House of Commons

Thursday 16th June 2011 Commons Chamber

Thursday 16 June 2011

The House met at half-past Ten o’clock

Prayers

Thursday 16th June 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 16th June 2011 Commons Chamber

The Secretary of State for Culture, Olympics, Media and Sport was asked—

[Andrew Gwynne (Denton and Reddish) (Lab)]

1. When he expects to implement the remaining provisions of the Digital Economy Act 2010.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

The provisions relating to the online infringement of copyright have been subject to a judicial review, but following the Government’s success in that case, we hope to announce a new timetable for the implementation of the measures in the Act shortly. We hope that the initial obligations will be proportionate, fair and effective.

[Andrew Gwynne]

I am grateful for the Minister’s response, but before the general election, his junior coalition partners campaigned fiercely to oppose web disconnection as part of the Act, and firmly pledged to take disconnection off the statute book. The coalition Government are now reviewing whether the disconnection provisions are technically workable. Does that mean that they are okay with the principle of internet disconnection, and what is the time scale for publishing Ofcom’s findings on sections 17 and 18?

[Mr Vaizey]

I think the hon. Gentleman refers to the provisions to block websites. As he quite rightly says, Ofcom has prepared a report on that, which we will publish alongside our proposals for taking the Act forward.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

Will the Minister join me in congratulating that great academic centre of learning, Bournemouth university, on expanding its digital economy studies in areas such as media studies and graphic design? Half the technicians who worked on the science fiction film “Avatar” are graduates of the university.

[Mr Vaizey]

I am happy to join my hon. Friend in congratulating Bournemouth university, which I visited when I was the Opposition spokesman. It is one of the leading digital media centres, not just in this country, but, I suspect, the world.

[Pete Wishart (Perth and North Perthshire) (SNP)]

It is over a year since this House overwhelmingly backed the 2010 Act, yet there is no sign of the key measures in it being implemented. As the Minister says, the judicial review has come and gone, and there is agreement on costs, so why does he not just face down his critics, put in a programme and get this Act implemented?

[Mr Vaizey]

That is exactly what we intend to do.

[Mr Don Foster (Bath) (LD)]

Further to the Minister’s earlier answer, he will recall that Liberal Democrats argued that the web blocking proposals simply would not work. Has he come to the same conclusion, and will he accept that it is vital to find ways to protect the internet protocol of creators from illegal websites? Will he tell us what will happen on that?

[Mr Vaizey]

As I have said, we will announce our proposals shortly. We asked Ofcom to prepare an independent report on the effectiveness of technical measures to block websites, which we will publish at the same time as our conclusions.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

2. What steps he is taking to ensure that users of British sign language have equal access to telecommunications services; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

We have implemented the revised EU electronic communications framework, including specific provisions relating to disability and equivalence. Ofcom has been given new powers to impose obligations with regard to equivalence on all providers through general conditions. We continue to work very closely with Ofcom and fully support its current review of relay services for deaf and hearing-impaired telecoms users, including BSL users in the UK.

[Gemma Doyle]

Deaf Connections tells me that there is an urgent need to introduce video relay technology to create equal access to telecoms for BSL users, but as the Minister indicates, Ofcom is about to launch its 11th publication on the issue. Will he meet Ofcom to discuss the pace of progress on access to functionally equivalent telecoms for BSL users?

[Mr Vaizey]

I can assure the hon. Lady that I take this issue very seriously indeed. It is not strictly accurate to say that this is the 11th Ofcom review. The review, which we look forward to, is being conducted in the light of the revised EU communications framework. Ofcom will publish a consultation document in the summer, but I have met Deaf Connections and constituents who lobby me on this issue, and I take it very seriously.

[Claire Perry (Devizes) (Con)]

3. What plans he has for the roll-out of superfast broadband.

[Nigel Adams (Selby and Ainsty) (Con)]

9. What plans he has for the roll-out of superfast broadband.

[Mel Stride (Central Devon) (Con)]

16. What plans he has for the roll-out of superfast broadband.

[The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt)]

When the Government came to office, just over £230 million had been allocated to broadband roll-out; that has now been increased to £830 million. It is still not enough, but we are determined to do what we can.

[Claire Perry]

The people of Wiltshire welcome the fact that they are among those receiving money in the next tranche of the high-speed broadband roll-out. However, high-speed, superfast broadband raises the spectre of children accessing inappropriate material on the internet more easily, which worries many parents. What pressure is the Minister putting on internet service providers to make access to internet porn an opt-in option? If that work fails, is he prepared to regulate to keep our children safe?

[Mr Hunt]

I can confirm that the Government take this issue incredibly seriously—the Bailey review on the sexualisation of youth is one indication of that. We are also having a meeting with the trade body United Kingdom Internet Sites to take the issue further. We believe strongly that internet service providers need to behave in a socially responsible way and to do what they can to protect children, so we fully support what my hon. Friend said.

[Nigel Adams]

What assessment has the Secretary of State made of how the roll-out of superfast broadband could support the introduction of universal video relay service in the UK, which would ensure that deaf sign language users have equal access to telecommunications?

[Mr Hunt]

The kinds of services that my hon. Friend mentions demonstrate exactly why it is important that we have an ambitious programme for the roll-out of superfast broadband. In the summer, Ofcom will be reviewing precisely the matter he raised. I would urge him to join me in encouraging the Labour party to get behind the agenda for superfast broadband. It is committed to 2 megabits; we are committed to superfast broadband. We want to be in the fast lane, not the slow lane.

[Mel Stride]

In Northlew, a small village in my constituency, a local not-for-profit organisation has ensured that about 200 subscribers now receive broadband using a microwave network. Will my right hon. Friend confirm that such technology will be covered under Broadband Delivery UK funding guidelines, so that other villages in my constituency may benefit from it?

[Mr Hunt]

I can confirm that our policy is technology-neutral. We are asking local authorities to come forward with a broadband plan that will secure 100% 2-meg connection, and 90% superfast broadband, but how they do that is up to them. I am aware that 8% of my hon. Friend’s constituents live in “not spots”, where they have no broadband access at all, and 13% of them live in houses with less than 2-meg connection. That shows what a priority this is. We want to be extremely imaginative, and I hope that we will have the support of the Labour party—

[Mr Speaker]

I am extremely grateful to the Secretary of State.

[Mr Tom Watson (West Bromwich East) (Lab)]

Many consumers are removing their fixed lines and using mobile telephony to access the internet. I recently wrote to the Secretary of State to say that because of the delay to the spectrum auction, there is a potential loss to the Exchequer of £316 million. Given that O2 is threatening legal action against Ofcom that could further delay the auction, will he consider using his powers under wireless and telephony legislation to ensure that this happens sooner rather than later?

[Mr Hunt]

We are absolutely committed to proceeding with the spectrum auctions as soon as possible, and we will do everything necessary to make that happen. However, I want to make the broader point to the hon. Gentleman, who is pretty well-versed in technology matters, that we think that mobile is going to play a vital part in the roll-out of superfast broadband. At the moment, the amount of mobile internet data is tripling every year. We need to get that mobile data to a fixed-line fibre point as quickly as possible if we are to deal with the twentysixfold increase in mobile internet data that we expect over the net four years.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

The Secretary of State recently clarified in a letter to MPs that the £530 million from central Government for the roll-out of superfast broadband will have to be matched by local authorities. Where does he expect this money to come from, and on what basis does he estimate that it will be enough to deliver 90% superfast broadband coverage?

[Mr Hunt]

We have done a very scientific study, which we will be publishing shortly. It shows the number of areas in each local authority area with either no access or slow access, or where we think the market will not provide access. We have done that calculation, and we know the costs involved in making it possible. We are confident that local authorities will support this agenda enthusiastically, unlike, I am afraid, the hon. Lady’s own Front-Bench team. So far we have had seven pilots in which local authorities have shown precisely that enthusiasm, including Wiltshire, which was mentioned by my hon. Friend the Member for Devizes (Claire Perry).

[Ian Lucas (Wrexham) (Lab)]

The Opposition are delighted that the Secretary of State has finally woken up and recognised that there is huge interest in the delivery of broadband services. Why, then, has he put back Labour’s commitment to universal broadband by a full three years? That means that rural constituencies, many of which are represented by Government Members, will lose out in the important race for growth and jobs under a Government not committed to providing the right infrastructure.

[Mr Hunt]

Let me start by welcoming the hon. Gentleman to the Dispatch Box in DCMS questions, and let me answer him clearly. The reason we had to put the date back three years is that there was not enough money in the kitty—something that the former Chief Secretary to the Treasury under his party knew only too well and was prepared to write down. However, we have not ditched that commitment; we have said that we will deliver it in this Parliament. Indeed, we have gone further and said that this is not just about 2 meg, because today’s superfast broadband is tomorrow’s superslow broadband. I would urge the hon. Gentleman and those on his Front Bench to get behind this Government’s commitment to a 90% roll-out of superfast broadband.

[Helen Jones (Warrington North) (Lab)]

4. What steps he is taking to support the promotion of the rugby league World cup in 2013.

[The Minister for Sport and the Olympics (Hugh Robertson)]

I have met the executive chairman and chief executive of the Rugby Football League on a number of occasions. Last November the Prime Minister provided a video message for the official launch of the 2013 rugby league World cup. The RFL is selecting venues with UK Sport’s support. These will be announced in November, and I will work with RFL on its promotional campaign as it develops.

[Helen Jones]

I am grateful to the Minister for that answer. Does he agree that the World cup gives us an opportunity to promote a sport that is family friendly, in which there is very little trouble on or off the pitch, and which is much cheaper for families to access at the weekend than major football games? Does he also agree that the World cup gives us an opportunity to encourage visitors to some of our northern towns? This could be a win-win situation, so will he pledge to do all that he can to use the World cup to promote those ends?

[Hugh Robertson]

The short answer is yes. May I thank the hon. Lady for her support both for the sport in general and, in particular, for her home team? As she correctly says, any major sports event is a fantastic opportunity to drive money into the local economy. That is why we have put more money into the major events part of UK Sport, which is standing behind the rugby league World cup, which I am sure will be a terrific success.

[Kerry McCarthy (Bristol East) (Lab)]

5. What steps the creative industries council will take to help increase employment and growth in the creative industries.

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

6. What steps the creative industries council will take to help increase employment and growth in the creative industries.

[Steve Rotheram (Liverpool, Walton) (Lab)]

7. What steps the creative industries council will take to help increase employment and growth in the creative industries.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

The creative industries council will provide a forum for the creative industries and the Government to engage in a joined-up way. Members will instigate industry-led approaches to boosting the growth and competitiveness of the creative industries, with the Government facilitating and removing barriers where appropriate.

[Kerry McCarthy]

Bristol is to be home to one of the new local enterprise zones announced in the Budget, with a focus on the creative industries. Will the creative industries council be able to offer practical assistance to make the zone a success, or will it be just a talking shop at the national level? Will it deliver results on the ground?

[Mr Vaizey]

I was lucky enough to visit Bristol recently, where the astonishing success of the creative industries is a wonder to behold. We certainly do not want the creative industries council to be a talking shop, which is why we set up four or five work streams, which I hope will be relevant to businesses in Bristol.

[Mr Bain]

UK Music has established that the music industry employs nearly 100,000 people and generates almost £5 billion a year for the UK economy. However, one of the biggest problems for up-and-coming musicians is in obtaining credit or finance from the banks. Can the Minister assure the House that the work of the creative industries council will lead to an increase in the amount of capital available for young musicians?

[Mr Vaizey]

I will certainly take the hon. Gentleman’s point on board. I recently met important industry figures Sandie Shaw and Brian Message, the manager of Radiohead, to discuss with a specific bank making capital available to musicians. I hope that other banks will take note of that initiative.

[Steve Rotheram]

The Minister is aware of the devastating impact of the cuts agenda on the cultural sector through lost economic benefit. However, is he aware of the importance of innovations that are directly attributable to music sales, such as X-ray computed tomography—or CT scanners, as they are more commonly known—which were developed by EMI primarily through sales of Beatles records, by four lads who shook the world? Without leadership, is the Minister not putting similar investment opportunities at risk?

[Mr Vaizey]

I am aware of the huge cultural vibrancy of this country, which is why I will travel to Liverpool later this month to open the Magritte exhibition at Tate Liverpool. Liverpool really is a vibrant and creative city. Returning to the earlier question about the Digital Economy Act 2010, the reason we are so keen to press ahead with it is so that our creative industries can earn money from the content that they create.

[Mr John Whittingdale (Maldon) (Con)]

Does my hon. Friend agree that one of the key determinants of the success of the creative industries is the strong protection of intellectual property? Is he considering following the example of President Obama and appointing a champion for intellectual property, which would send that signal? Does he agree that what would send precisely the wrong signal is any suggestion from local authorities that the enforcement of actions against pirate or counterfeit goods by trading standards officers should not be seen as a priority?

[Mr Vaizey]

I met President Obama’s copyright tsar, Victoria Espinel, when she was in this country last week. We had a meeting with the IP crime group, which is very effectively taking forward the enforcement of measures to tackle IP crime. The Minister, Baroness Wilcox, is also an extremely effective champion of the IP industry.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

The creative industries in the UK are world leaders but, to continue that trend, we need to ensure that the courses that are studied in our higher and further education establishments are truly robust. Will the Minister pledge to work with the Department for Education and the Department for Business, Innovation and Skills to ensure that those courses are fully recognised and really worth while?

[Mr Vaizey]

In an earlier answer, I praised Bournemouth university. One of the first things that I did as a Minister was to commission the Livingstone-Hope report on skills in the video games industry to ensure that our courses were fit for purpose, and I should like to take this opportunity to congratulate Sir Alex Hope on his well-deserved OBE for that work.

[Gloria De Piero (Ashfield) (Lab)]

The Government make available about £2 billion to British banks under the enterprise finance guarantee scheme to support small and medium-sized enterprises in the creative industries. Music industry representatives have told me that only two music companies have been successful in raising loan finance via the EFG scheme. One very experienced music manager was successful only on his ninth attempt. What is the Minister going to do to improve the scheme and to support our music industry?

[Mr Vaizey]

I suspect that the hon. Lady met the same people at the meeting that I referred to earlier. I absolutely understand the issue to which she is referring, and I want to continue to work with the banks to try to educate them on how the enterprise finance guarantee scheme can be used to support the music industry. Important changes in the Budget, such as the enterprise investment scheme, will also help our creative industries.

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

8. What recent progress has been made on digital switchover.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

Television switchover is on track and progressing extremely well, with almost 36% of UK homes having switched to digital already. A further 17.2 million homes will switch by the end of the programme in 2012.

[Andrew Bridgen]

Many of my constituents are concerned about the impending digital switchover in the east midlands. Can the Minister assure the House that any issues relating to previous digital switchovers have now been addressed? On a more local point, does he acknowledge that it is important that areas receive the right regional news for their area? That is not currently happening in many parts of North West Leicestershire.

[Mr Vaizey]

I hear what my hon. Friend says. Regarding regional news, his constituents will receive digital terrestrial television either from the Waltham transmitter, for BBC East Midlands, or from Sutton Coldfield, for BBC West Midlands. Digital UK has a postcode checker that will allow constituents to work out which service they will receive. It will also give them advice on how to re-tune if they want to receive a different service. Digital switchover has proceeded extremely smoothly, except in one area: my own county of Oxfordshire, where the transmitter burned down. I do not expect that to happen again, however.

[Mr Speaker]

I am sure that the Minister will not take it personally.

[Chris Bryant (Rhondda) (Lab)]

We in Wales know that digital switchover is a great thing, but it is not quite a utopia. The Freeview package that is available in my constituency and many other valleys communities is greatly diminished compared with the rest of the country. This means that Rupert Murdoch has a virtual monopoly not just on first-view American movies and many sports matches but on the actual provision of television services. What is the Minister going to do to ensure that my constituents get a fair deal?

[Mr Vaizey]

I would certainly be happy to meet the hon. Gentleman to discuss coverage in south Wales. I have learned from many years’ experience that there is no such thing as utopia, but we can strive towards it. As far as Mr Murdoch’s monopoly is concerned, I know that he will have taken note of Ofcom’s investigation into pay TV, sports rights and other such competition issues.

[Jim McGovern (Dundee West) (Lab)]

10. What discussions he has had with the Chancellor of the Exchequer on future Government support for the UK computer games industry.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

I discussed future Government support for the creative industries—including the video games sector—with the Chancellor of the Exchequer in the development of the plan for growth which was published alongside Budget 2011. The plan for growth sets out the specific actions that we are taking to tackle major barriers to growth in the creative industries and to create the right conditions for creative businesses to flourish.

[Jim McGovern]

I do not know about high-speed broadband, but that was a high-speed answer—and I am sure that the Minister will appreciate that it is not the one I was looking for. He will be aware that games companies in the UK are closing and that many of their staff are going to Canada. Ireland is now looking to introduce tax breaks, but for some reason this Government persist in doing nothing. Will the Minister reassure me, the House and my constituents that the assessment of tax breaks for the industry, as recommended by the Scottish Affairs Committee, will be carried out as a matter of priority before more harm is done to this very important industry?

[Mr Vaizey]

I am mindful of your desire, Mr Speaker, to crack through the Order Paper, which is why I tend to answer questions in a rapid manner. Let me first congratulate the hon. Gentleman on his championship of the video games industry. I know that 150 jobs have been created in the industry in his own Dundee constituency. Measures in the Budget, such as the changes to the research and development tax credit and the enterprise investment scheme, will help the video games industry. I will continue with my vocal and, I hope, practical support for that important industry.

[Alex Cunningham (Stockton North) (Lab)]

11. What recent progress he has made on his consideration of News Corporation’s proposed acquisition of BSkyB.

[The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt)]

Following my announcement on 3 March, I am currently considering responses to the consultation on undertakings, and I will announce my decision when the process is complete.

[Alex Cunningham]

Has the Murdoch empire, with its alleged wholesale illegal activities, not shown itself clearly unfit for an even greater control of the British media?

[Mr Hunt]

This is an issue about media plurality. I am not legally allowed to consider any other issues, but phone hacking is incredibly serious. The police are following their investigations and they must follow them wherever they lead. If the hon. Gentleman is not convinced by me, he should perhaps be convinced by his own Front-Bench team, as the shadow Culture Secretary has also said that the serious admissions of culpability by News International are not relevant to the News Corp’s BSkyB media plurality issue.

[Mr Ivan Lewis (Bury South) (Lab)]

The Secretary of State promised a decision on this matter on 26 April—and we are still waiting. Does he understand why people have no confidence in the integrity of the process or his role in it when, instead of referral to the Competition Commission, he has taken the unprecedented step of personally overseeing negotiations covering the legal, contractual and financial arrangements involved in establishing Sky News as a standalone company? The Secretary of State tells us that he is currently taking lessons in how to be a football referee. I assume he understands that the referee’s job is to be neutral—not to help one of the teams bundle the ball over the line.

[Mr Hunt]

The shadow Culture Secretary cannot have it both ways. I was accused before of rushing the decision, so now I am taking as long as it takes because we want not a rushed decision, but the right decision. I am not personally overseeing the negotiations. It is being done by Ofcom and the Office of Fair Trading, and I am receiving independent written advice from them at every stage, which I have either published or will publish. When it comes to the question of dithering, when I made the announcement on 3 March on what I was minded to do, the shadow Culture Secretary said that after talking to relevant parties, he would announce whether he supported my decision or not. We are still waiting to hear whether he does.

[Charlie Elphicke (Dover) (Con)]

Is it not the case that the development of the media market in this country is such that newsprint, internet, TV and, indeed, mobile platforms are coming together? Such common ownership will become more obvious, as reflected in the drift of policy. Would it not be wrong to hold that policy back and oppose that sort of development just because of the Labour party’s hatred of a single individual?

[Mr Hunt]

We absolutely want media policies that allow convergence. In fact, our local TV policy is a precise example of that, as we want to encourage local newspaper groups to get into other platforms. This particular issue, however, is about media plurality. It is about making sure that no one has too much power in any one part of our media. That is the prism through which we have to look at the issue, and that is what we are doing.

[Simon Kirby (Brighton, Kemptown) (Con)]

12. What recent representations he has received on proposals for local television; and if he will make a statement.

[The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt)]

We have had 140 responses to our consultation on local TV, including 69 expressions of interest from people interested in providing it.

[Simon Kirby]

Does my right hon. Friend agree that local TV can be successful in places such as Brighton and Hove, where its funding, its audience and its coherence with the local community are all factors contributing to its success?

[Mr Hunt]

I absolutely agree with that. My hon. Friend will know that I met Angi Mariani, the publisher of “Latest Homes” magazine in Brighton and “Brighton Lights” online magazine, who has submitted an expression of interest in running a TV station in Brighton—[Interruption.] He will know because he was with me when I met her.

[Mr Speaker]

We always appreciate a bit of extra information.

[Mr Hunt]

This has widespread support among local communities, universities and the internet community. In fact, the only organisation that does not support it is the Labour party.

[Mr Ivan Lewis (Bury South) (Lab)]

Now that the Secretary of State has been forced to abandon “Hunt TV”—otherwise known as “a new national TV spine”—his plans for local television are in disarray. Does he agree that, given his ministerial responsibility for ITV and Channel 4, there would be serious ethical concerns if he attempted to solicit funding from them for his personal vanity project? Can he confirm that, in the midst of 16% cuts, the BBC will be required to spend £25 million of licence fee payers’ money on supporting local television only if it can be proved to be viable, sustainable and good value for money?

[Mr Hunt]

Far from our plans being in disarray, we have published plans for about 10 local television stations, and we hope to have double or triple that number by the time the process has been completed. ITV is quite capable of looking after itself.

I must ask the hon. Gentleman to be a little bit consistent. When his party was in government, it planned to take £40 million from the licence fee to support two regional television channels, and to top-slice the fee. We are taking much less money, and we will create far more local television stations. I urge all Labour Back Benchers to encourage Front Benchers to back this initiative, because their constituents will support it wholeheartedly.

[Damian Collins (Folkestone and Hythe) (Con)]

13. What his policy is on support for a future bid for England to host the FIFA World cup.

[The Minister for Sport and the Olympics (Hugh Robertson)]

Any future bid for a FIFA World cup is some time away, which is probably not a bad thing. Such a bid is unlikely to be submitted until 2030. Any decision would be considered on its merits, but I would expect a far greater degree of transparency and accountability in FIFA before we could consider any future bid.

[Damian Collins]

Does the Minister agree that without reform of FIFA to give it greater transparency and accountability, any England bid is likely to fail in the world of double-dealing and self-interest that FIFA has become under Sepp Blatter—unless, of course, he wants to get Del boy to front the next England bid?

[Hugh Robertson]

It is clear, both from our experience of the last bid and from what has happened subsequently at FIFA, that the organisation is in need of radical structural reform, and the principles of transparency and accountability must govern that. The newly re-elected president has set a process in train, and we will watch it carefully, but I doubt that we will consider a future bid until that process has been completed.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

Accountability and transparency are also an issue in domestic football. Does the Minister agree that it is surprising and disappointing that the Premier League has withdrawn its funding for Supporters Direct, an organisation that is committed to transparency in football ownership?

[Hugh Robertson]

As the hon. Gentleman says, transparency and accountability are an issue in English football, and we await the Select Committee’s report with interest. As for Supporters Direct, I am sure the hon. Gentleman agrees that the language used by the chief executive constituted vileness of an entirely different order, and was quite unacceptable coming from someone holding such a position. That, of course, should not detract from the good work done by the organisation more generally. I believe that a meeting between the new chief executive and the Premier League is scheduled for Friday, and I hope that it will come to a successful conclusion.

[Alun Michael (Cardiff South and Penarth) (Lab/Co-op)]

14. What plans he has for future (a) funding and (b) parliamentary oversight of the work of the BBC World Service from 2014.

[The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt)]

We have protected funding for the World Service with an efficiency saving, and accountability to Parliament will continue through the Select Committee on Foreign Affairs.

[Alun Michael]

Does the Secretary of State agree that Britain’s place in the world, and its contribution to the world, are enhanced considerably by the work of the BBC World Service? I have seen that in relation to Somaliland and in eastern Europe. Does he share the widespread concern that is felt about the fragility of the service worldwide, and what can he do to satisfy us that Parliament will be fully involved and that the service is safe in his hands?

[Mr Hunt]

I entirely share the right hon. Gentleman’s support for the BBC World Service, which is an incredible jewel in our national crown and a very important part of our soft power. The moving of the service directly into the core BBC presents it with tremendous opportunities. It will strengthen the service’s independence and perceived independence, allow efficiency savings that will ultimately enable more to be invested in programming, and create the potential for improvements in the television service, BBC World News, which I think are long overdue.

[Mr Philip Hollobone (Kettering) (Con)]

15. What efficiencies in the administration of his Department he plans to make in the next 12 months.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose)]

Our aim is to reduce the Department’s administrative spend by 50% during the life of this Parliament. We have already reduced the pay bill by £3 million from 2010-11 through a voluntary redundancy scheme, and a programme to deliver further savings is in place.

[Mr Hollobone]

What methods are being engaged to expose yet further efficiencies that have not already been identified?

[John Penrose]

We continually keep everything under review, as would be expected. We have identified a number of particular points that I hope will satisfy my hon. Friend, including Ministers not using the Government car service, which will save about £250,000 a year, reducing hospitality expenditure by about £60,000 a year, and cutting spend on travel by about £30,000 a year. We will continue to scrutinise very carefully to find other such examples.

[Caroline Lucas (Brighton, Pavilion) (Green)]

17. Whether he has had discussions with the Secretary of State for Justice on the contribution of media training programmes to the rehabilitation of women in prison.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

My right hon. Friend the Secretary of State discusses a broad range of issues with his Cabinet colleagues. The Government believe that education and training programmes, such as the prison media centres project at HMP Downview, play an important role in the rehabilitation of prisoners.

[Caroline Lucas]

I thank the Minister for his reply. Does he agree that we should roll out rehabilitation models that use culture—such as the prison media centres project, which is run by people in my constituency—more widely, and will he therefore have further talks with the Secretary of State for Justice to ensure there is a national roll-out of such schemes?

[Mr Vaizey]

I understand that one of my officials is due to visit the project at the end of June, and no doubt he will return filled with ideas about how we might encourage such projects around the country.

[Mrs Mary Glindon (North Tyneside) (Lab)]

18. What assessment he has made of the likely effect of recent funding decisions by Arts Council England on arts and cultural organisations.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

My Department and Arts Council England continue to monitor the impact of the recent national portfolio announcements. Regularly funded organisations whose applications for the national portfolio were unsuccessful will continue to receive support during the financial year 2011-12, which will enable them to explore alternative sources of support or adapt their business plans.

[Mrs Glindon]

Given this year’s cut of 74% in arts funding for young people, communities and schools, what are the Government doing to widen access to art and cultural activities for young people and under-represented groups?

[Mr Vaizey]

The Arts Council has clear proposals to continue to support cultural education in schools, and we have also asked Darren Henley, the managing director of Classic FM, to build on his successful report on music in schools by now looking at the whole of cultural education in schools.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

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

[The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt)]

Over the next few weeks, I will have much progress to report on all our five priority areas, including broadband allocations for local authorities, next steps for the awarding of local TV licences, inaugural pilots of the school games, a 2012 tourism marketing strategy and a policy to promote financial resilience for the arts.

The House will want to congratulate Andy Murray on his success at Queen’s on Monday, and wish him success for another tournament about to start a few stops further down the District line.

[Michael Connarty]

I am sure the Secretary of State supports the idea of there eventually being independent licences for all four parts of the United Kingdom, but at present how can he possibly justify the fact that STV is not recognised as an independent producer, and is therefore denied access to 25% of the production available through the system, as it is treated like other small independents? Surely this must be taken on, and STV must become a qualified independent producer?

[Mr Hunt]

I am very well aware of the case STV is making. The only point I would make to the hon. Gentleman is that the outstanding success of our broadcasting industry has been based on the division between broadcasters and producers and that has benefits for Scotland, as it does for the whole of the United Kingdom. Under our local TV programme, we hope to award many more licences for much smaller areas.

[Mel Stride (Central Devon) (Con)]

T5. My right hon. Friend will be aware that the Government have been allocated some 9,000 tickets for the 2012 Olympic games. Will he reassure the House that none of them will be provided as free perks either to Government employees in general or, in particular, to UK politicians?

[Mr Hunt]

I am happy to reassure my hon. Friend about the details of those tickets: 3,000 tickets have been allocated to staff associated with the project—they will be purchased and are available through a ballot; 2,400 are being made available to host towns and cities, and they, too, will be purchased; 2,900 will be made available to guests of the Government, including international business guests and dignitaries, to make sure that we secure an economic legacy to the Olympics; and 450 tickets will be allocated as prizes in the school games, to which 6,000 schools have signed up.

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

The House is grateful for the Secretary of State’s clear exposition, and I hope that this is widely publicised.

I hope that the House will join me in welcoming to our proceedings a delegation from the Dutch Olympic committee. As London prepares to welcome the world to our Olympic games next year, will the Secretary of State recognise the limited scope for the International Olympic Committee to do more than issue invitations to the national Olympic committees of countries around the world? Given the sensitivity about what we would describe as pariah regimes, will he assure the House that all necessary and relevant diplomatic intervention will be taken at the appropriate time to prevent their participation?

[The Minister for Sport and the Olympics (Hugh Robertson)]

The short answer is that I entirely agree with the right hon. Lady. What was very apparent yesterday in dealing with the Libyan regime was how much easier it is to deal with these situations if the regime is the subject of European Union banning orders. With all such regimes it is a huge help if they are the subject of the relevant international sanctions. Like her, I would like to extend a very warm welcome to the delegation from the Dutch Olympic committee. They are close allies of ours in the cause of football reform, an issue close to the heart of the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), and I hope that they have a successful trip.

[Stephen Barclay (North East Cambridgeshire) (Con)]

Further to my correspondence with the Minister over the past two and half months following the Public Accounts Committee hearing on Ofcom and the notice I gave him that I would be raising this issue, will he confirm whether Ofcom will use present value estimates on net returns of long-term investments in its 2010-11 annual accounts? Would that comply with Treasury principles?

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

I do not know, so I will write to my hon. Friend.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

T2. Supporters Direct has not just been helping fan involvement in football clubs; it has also been advising on the bid for the Walthamstow dog track and helping to involve the community in that. Will the Minister meet me to discuss how we can help to promote fan involvement, not only in football but in a range of other sports?

[Hugh Robertson]

That is the first question I have ever had on dog racing, but it will not be the last. In the circumstances, probably the best thing to say is that I would be delighted to meet the hon. Lady to hear more about this.

[Alun Cairns (Vale of Glamorgan) (Con)]

I welcome the Secretary of State’s earlier comments about the importance of mobile broadband and the role it can play. Does he recognise the current imbalance in the market, with some providers having access to better bandwidth or a better spectrum on the bandwidth? What plans does he have to use the 4G auction to correct the imbalance?

[Mr Hunt]

I welcome my hon. Friend’s interest in and commitment to this subject. We recognise that there has to be a competitive market in broadband and that it would be very damaging for the broadband market if we did not have a competitive market in mobile provision. I know that Ofcom is working very hard to structure the spectrum auctions to make sure that we do.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

T3. Does the Secretary of State still believe in localism? If so, why is he undermining local radio up and down the country, reducing morale? Why is he attacking all those third sector arts organisations that are collapsing up and down the country because of a lack of funding?

[Mr Hunt]

We are not, and I do not know where the hon. Gentleman gets his information from. We have published the most ambitious local media strategy for many years, providing a way forward for local radio stations. We are continuing to support many community radio stations. On local arts groups, we have put in place a big package to try to encourage and help arts organisations to be resilient in difficult financial times.

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

The Crewe Alexandra girls centre of excellence in my constituency has a proud and enviable record of producing first-class international players and it has built a strong reputation, over many years, across the whole of the footballing community and beyond. The Football Association has rewarded that success by deciding to close the centre, leaving many gifted players and their parents dumbfounded and devastated. Can my right hon. Friend look into the matter urgently and take it up personally with David Bernstein, the chairman of the Football Association?

[Hugh Robertson]

I think that question gives me the opportunity, which I am sure everybody across the House will want to take, to wish the England women’s football team good luck in the forthcoming world cup. In response to hon. Friend, I will of course take the case up if he sends me the details.

[Mr Speaker]

I call Chris Ruane. He is not here, so I call Fiona Mactaggart.

[Fiona Mactaggart (Slough) (Lab)]

T6. In his response to the hon. Member for Devizes (Claire Perry), the Secretary of State spoke about his efforts to persuade internet service providers to create an opt-in system so that families can be protected from porn on their computers. Is it not time to abandon his charm and start using the stick of regulation so we can protect families from porn flowing into the home?

[Mr Jeremy Hunt]

That is precisely what we are doing. We are telling people that if they do not co-operate in bringing forward measures that will deal with this issue fast, we will legislate and regulate.

[Jake Berry (Rossendale and Darwen) (Con)]

I welcome yesterday’s announcement that 10,000 tickets for the Olympics will be made available free of charge to members of our armed forces. Will the Minister update the House on who else will benefit from the ticket share scheme and, specifically, on whether it will help school children in my constituency?

[Hugh Robertson]

As my right hon. Friend the Secretary of State has announced, a number of tickets will be available to winners of the school games. A further tranche of tickets are available to Sport England through the Places People Play initiative that will go to local sports champions.

[Kerry McCarthy (Bristol East) (Lab)]

T7. I want to thank the Minister responsible for the creative industries for having a productive meeting with me and a delegation this week to discuss the problems that UK musicians are having getting visas to tour the USA. Will he confirm that the Department is behind our efforts to smooth the path for musicians wishing to tour in the US and that he will do all he can to help us?

[Mr Vaizey]

I thank the hon. Lady. I thought it was a very productive meeting and my Department will certainly do all it can to facilitate relationships with the US Administration and to iron out some of the bumps in the road for musicians as regards obtaining appropriate visas.

[Mr Peter Bone (Wellingborough) (Con)]

Does the Minister for Sport and the Olympics agree that the Olympics are a celebration of world sport and host countries should be very careful about trying to ban people from coming to this country for the Olympics?

[Hugh Robertson]

I certainly agree that the games are a celebration of world sport. We touched on this issue with the question from the right hon. Member for Dulwich and West Norwood (Tessa Jowell). It is really important that when there are regimes that we do not wish to invite to this country, the relevant international sanctions should be in place to back that up. One of the ironies of the current process is that the ban put in place for the 1980 Olympics produced results for two people who did not abide by that ban, Lord Coe and Lord Moynihan, who are, of course, central to the delivery of the current games.

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

T8. The BBC is in discussions with DCMS over changes to the public value test. Will the Secretary of State guarantee that, notwithstanding the freeze in the licence fee and the cuts that the BBC is having to make, no services or TV channels will be allowed to close?

[Mr Jeremy Hunt]

I cannot give that guarantee, because the BBC operates at arm’s length from the Government and, quite rightly, has editorial discretion about what it does or does not do. What I can say, however, is that when we negotiated the licence fee last October, it was on the understanding that the 16% saving in the licence fee in real terms, to be implemented over six years, was an efficiency saving and that we would not expect the BBC to be unable to deliver any of its core services within the agreed budget.

The hon. Member for Caithness, Sutherland and Easter Ross, representing the House of Commons Commission, was asked—

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

1. Whether the House of Commons Commission has made an estimate of the monetary value of the residential accommodation provided for officials situated outside the secure part of the Commons estate.

[John Thurso (Caithness, Sutherland and Easter Ross)]

Outside the secure area, the House holds a long lease on a residential flat at 102 Rochester row, which is valued at £540,000 and has an annual rent of £440. A freehold property at 22 John Islip street, which is used as hostel-style overnight accommodation for staff supporting sittings of the House, is valued at £600,000.

[Thomas Docherty]

Perhaps I could press the hon. Gentleman. Given that we now have far fewer late-night sittings and that after the next general election we will have 50 fewer colleagues, perhaps now is the time to evaluate whether we could move those beds into the estate and make some real savings for the public purse.

[John Thurso]

The Commission is very alive to seeking savings within the accommodation budget. There are a number of possibilities that may arise in the future and these are kept under active consideration.

The Leader of the House was asked—

[Mr Peter Bone (Wellingborough) (Con)]

2. If he will bring forward proposals to hold Back-Bench business each sitting Wednesday and Prime Minister’s questions each sitting Thursday.

[The Leader of the House of Commons (Sir George Young)]

I have no plans to do so.

[Mr Bone]

The House sits for 139 days a year excluding private Members’ days. Under the previous Government, Members were encouraged to turn up on Monday evening and leave on Wednesday night. If we are to restore Parliament to the fulcrum of our democratic process, we must restore Thursday to a full business day. Does the Leader of the House agree?

[Sir George Young]

I certainly believe that Thursday should be a paid-up member of the parliamentary week. There have been 38 sitting Thursdays in this Parliament, for 21 of which my right hon. Friend the Patronage Secretary has indicated that he would like me and, indeed, the Parliamentary Secretary, Office of the Leader of the House of Commons, my hon. Friend the Member for Somerton and Frome (Mr Heath), to be present. When the Backbench Business Committee has tabled business on a Thursday that has required a Division there has been a good turnout by Members of Parliament, so I am not sure that I entirely accept the view that Thursday is not a fully paid-up member of the parliamentary week.

[Natascha Engel (North East Derbyshire) (Lab)]

The question put by my fellow Backbench Business Committee member, the hon. Member for Wellingborough (Mr Bone), is about establishing one day every week in the parliamentary calendar as a Back-Bench day, which would surely be helpful to the Leader of the House and the business managers as the Government could then schedule business around us and have the certainty of having one day a week for Back-Bench business.

[Sir George Young]

My own view is that it is to the advantage of the Backbench Business Committee and the House to have the flexibility of the current arrangements. The Wright Committee, on which the hon. Lady and I both sat, said at paragraph 214 that

“it could be left open to a process of regular discussion and negotiation as to which day of each week would be devoted to backbench business. This would avoid the rigidities referred to above.”

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

If, as some people are proposing and as the Select Committee on Procedure is currently considering, private Members’ business was moved from Friday to some other point in the parliamentary week, there would be an even greater risk of Thursday becoming downgraded. In the nicest possible way, may I remind my right hon. Friend the Leader of the House that during his thankfully unsuccessful bid for your seat, Mr Speaker, he himself brought forward the notion of moving Prime Minister’s questions to a Thursday?

[Sir George Young]

I am grateful to my hon. Friend. It is indeed the case that when I was on the Back Benches I could do some blue-sky thinking but my horizons are now more constrained. I say to him that the Prime Minister is more than satisfied with the current arrangements for Prime Minister’s questions.

[Helen Jones (Warrington North) (Lab)]

Is not the real reason why the Leader of the House cannot announce more time for Back-Bench business or give us the date for the end of the Session that the Government are running into trouble with their own legislation? Their Public Bodies Bill has been shredded in the Lords, they have been defeated on police commissioners, their Back Benchers are getting jittery about pensions and they have had to recommit the Health and Social Care Bill. Why do they not stop rushing into botched, ill-thought-out legislation, think things through and allow more pre-legislative scrutiny? Think how that would have improved the Health and Social Care Bill!

[Sir George Young]

I will take no criticism from Labour Members about the way we handle the parliamentary programme. We are giving far more time for legislation than the previous Government, who frequently guillotined the remaining stages of Bills. We have on several occasions allowed two days for Bills on Report, including this week, and we have extended the Session so that the House has more time to consider the legislative programme, so I entirely reject the hon. Lady’s assertions that we are rushing legislation through the House.

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

3. What recent representations he has received on the procedure governing Opposition day debates.

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

My right hon. Friend the Leader of the House and I have received no recent representations on the matter.

[Greg Hands]

I thank the Deputy Leader of the House for his answer. One of the problems we have at the moment with Opposition day debates is the late notification of the topic and the motion, which deprives Members on both sides of the House of the opportunity to prepare speeches and points. Will he have a word with his opposite number to see how we might be able to improve the procedure to help to improve debate on both sides of the House?

[Mr Heath]

I have to say that the hon. Gentleman is absolutely right. It is open to the Opposition to table the subject for debate immediately after the date is announced, and it would be a courtesy to the House if it were given an appropriate length of time to know what the debate will be and to allow Members to table amendments, if they wish.

[Pete Wishart (Perth and North Perthshire) (SNP)]

Is the Deputy Leader of the House satisfied with the amount of time the non-Labour Opposition parties get for Opposition days? Surely all the time that was afforded to the Liberals has gone to the Labour party. Why did none of it come to the smaller parties, which seem to get half a day every decade?

[Mr Heath]

In the allocation of time, we are bound by the Standing Orders of the House. The hon. Gentleman might like to look at the Standing Orders and suggest to the Procedure Committee or others that they should change them, but at the moment we can do only as the Standing Order require.

[Andrew Stephenson (Pendle) (Con)]

5. What recent progress he has made on his proposals to make the proceedings of the House of Commons more topical.

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

Since the general election, the Government have established the Backbench Business Committee, reintroduced September sittings, increased the amount of time available for topical questions and are making many more statements than the previous Government. I think that the increased level of coverage we have seen of questions, statements and debates in the media is testament to the increasingly topical nature of this place.

[Andrew Stephenson]

I thank the Deputy Leader of the House for his answer. A key step in making proceedings more topical would be to launch Select Committee reports on the Floor of the House. What progress is being made on that proposal? [Interruption.]

[Mr Heath]

The hon. Member for Rhondda (Chris Bryant) says from a sedentary position that that is a good idea. It is indeed a good idea. My right hon. Friend the Leader of the House will shortly write to the Chairs of the Backbench Business Committee and the Liaison Committee to seek their views on proposals to allow for short statements and questions from Committees on the day of publication of some reports.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

The Deputy Leader of the House referred to topical questions in his initial response, and we have seen those recently extended to International Development questions. Are there any plans to do so for other Departments that do not have topical questions, such as the Scotland Office, Wales Office and Northern Ireland Office?

[Mr Heath]

There are no current plans for further extensions, but we were very happy to accede to the request, which actually originated with the Opposition, to find time for topical questions on some of the Departments that previously did not have them. There are no plans to extend topical questions at the moment, but we will of course entertain any such requests in future.

[Mr Philip Hollobone (Kettering) (Con)]

Will the Deputy Leader of the House consider reactivating the second Adjournment debate procedure so that when Government business collapses, as it will today, there is an opportunity to use the full parliamentary timetable for Back-Bench business?

[Mr Heath]

The hon. Gentleman raises an interesting point which he might like to put to the Procedure Committee for its consideration. It is not for me, as a Minister, to give a yea or nay to the suggestion, but the Procedure Committee could usefully look at it.

The hon. Member for Caithness, Sutherland and Easter Ross, representing the House of Commons Commission, was asked—

[Stephen Mosley (City of Chester) (Con)]

6. Whether the House of Commons Commission has considered the merits of redistributing used IT equipment to charitable organisations.

[John Thurso (Caithness, Sutherland and Easter Ross)]

This matter was last considered shortly before the 2005 general election. The House received advice that accounting regulations required the recovery of the residual value of publicly funded assets when they were disposed of. For that reason, the possibility of charitable donation was not pursued and the assets were resold after having any data and software removed.

[Stephen Mosley]

I thank my hon. Friend for his response. Is he aware that the House of Lords allows the redistribution of old IT equipment to charities, and will he ask the Commission to reconsider its 2005 decision?

[John Thurso]

Perhaps I could point out to my hon. Friend that the total for Members’ equipment recovered to date is £75,000, which is approximately half its total value. The House of Lords has far less equipment, and it is of lower value, and can therefore take a different view. However, we will consider the matter at the end of this Parliament.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

7. Whether the House of Commons Commission has assessed the likely effects of enabling Members of the House of Lords to use facilities of the House of Commons.

[John Thurso]

Currently, all peers have access to some facilities in this House. Peers who were formerly Members of this House have access to a wider range of facilities here, and the House of Lords has a reciprocal arrangement for former Members of that House now in this House. The recent Administration Committee report on catering and retail services in the House makes some recommendations on widening access for peers, especially in the dining rooms at lesser-used times.

[Mr Sheerman]

The hon. Gentleman will know that that report is quite honestly full of some pretty absurd suggestions about the closure of facilities that this House of Commons values very highly, including the major cafeteria in Portcullis House in the evenings. There are almost 800 Members of the House of Lords, and rising, but there are going to be only 600 Members of Parliament. Our facilities, dedicated to Members of Parliament, are already under great pressure, and to open up all of them to another 800 Members would make life for most elected Members very difficult.

[John Thurso]

As I understand the report, that is a suggestion rather than a full recommendation. The House of Commons Commission will consider the report in due course, and I am sure that representations from the hon. Gentleman, and from other right hon. and hon. Members who might wish to make any, will be fully considered at that time.

The Leader of the House was asked—

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

8. What plans he has to reform arrangements for scrutiny of European legislation in the House of Commons; and if he will make a statement.

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

As my right hon. Friend the Minister for Europe said in a written ministerial statement on 20 January, the Government are keen to explore new ways of scrutinising European Union issues. He is in discussions with the European Scrutiny Committee and its counterparts in another place, but the Government will of course welcome proposals from other parliamentarians.

[Miss McIntosh]

From a reply to a written question, I understand that the Government are keen to end the gold-plating of EU directives, but the only way of doing so is by granting MPs the power to amend the statutory implementing regulations as they go through the House—to amend the text and to reject the regulations. Will the Government approve that?

[Mr Heath]

I understand the argument for amending draft orders. The difficulty is that, if the two Houses of Parliament amend matters differently, we will then need a reconciliation process, and, instead of an order-making process, we will effectively have a small Bill going through the procedures of Parliament. There are some difficulties with the hon. Lady’s proposal, but I will of course pass on her concerns to the Minister for Europe.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

During the final two years of the previous Parliament, the then Opposition railed against the fact that the structure of the European Standing Committees collapsed into basically random Committees. There used to 39 Members on three Committees who debated regularly the issues coming from Europe, and it was promised that they would be reinstated. The level of ignorance about European business in this House has gone through the roof, however, and it is time that the Government put people back on those Committees in order that they learn the business of Europe before they stand up and open their mouths.

[Mr Heath]

I will not comment on the hon. Gentleman’s final observations, but he is right to say that we need to ensure that the House is able to scrutinise European business appropriately and fully. That is why I am sure the Minister for Europe is very much engaged in talking to him and his colleagues to make sure that we get the parliamentary structures right—and as soon as possible.

Southern Cross Healthcare

Thursday 16th June 2011 Commons Chamber

11:33

[Nick Smith (Blaenau Gwent) (Lab)]

(Urgent Question): To ask the Secretary of State for Health what action the Government are taking in respect of the crisis in Southern Cross.

[The Minister of State, Department of Health (Paul Burstow)]

The Government have made it very clear that the welfare of residents living in Southern Cross homes is paramount. We appreciate that recent events and media speculation have caused concern to residents in Southern Cross care homes, to their relatives and families and to staff. I very much regret that.

I should like to reassure everyone that no one will find themselves homeless or without care. The Government will not stand by and let that happen. Department of Health officials have been in frequent contact with Southern Cross’s senior management over the past three months, and that will continue. We are engaged with the company, the landlords and the lenders, and we are monitoring the situation closely.

The Government are acting to ensure that all parties involved are working towards a swift resolution with a comprehensive plan for the future, which must have the welfare of residents at its heart. It is for Southern Cross, its landlords and those with an interest in the business to put in place a plan that stabilises the business and ensures operational continuity of the care homes. That work is happening, and we must let it continue.

Let me be clear: this is a commercial sector problem, and we look to the commercial sector to solve it. All the business interests involved fully understand their responsibilities, but the Government also have a role to play. That is why we are working closely with the Association of Directors of Adult Social Services, the Local Government Association, local authorities and the Care Quality Commission to ensure that robust local arrangements are in place to address the consequences in the event that the company’s restructuring plan failed to put in place a business that was on a stable footing.

Yesterday, a meeting took place between Southern Cross, lenders and landlords in a committee. They agreed to work together to deliver a consensual solution to the company’s current financial problems over the next four months. They also made it clear that continuity and quality of care for all 31,000 residents will be maintained and that every resident will be looked after. That is a welcome development and the Government are encouraged by that positive agreement by the main stakeholders.

The exact details of the restructuring plan over the next four months will be set out over the next few days and the following weeks. The joint statement issued yesterday by the company, the landlords and the lenders provides further reassurance that the continuity of care of the residents is at the centre of this consensual restructuring. The Government will continue to keep close contact with all involved in the process, and I will continue to keep the House informed.

[Nick Smith]

I thank the Minister for his statement. In recent months, we have seen a drip, drip, drip of negative news stories about the financial stability of Southern Cross. After yesterday’s meeting with the 80 different landlords, the company’s future is still very uncertain. However, residents of Southern Cross, their relatives and the directors of social services will need further information—sooner rather than later—on what comes next for the company.

Residents and their relatives need peace of mind, and they need it now. The company appears to be hanging by a thread; the numbers speak for themselves. It has reported half-yearly losses of £311 million and its share price has dropped by 97% since 2006. Forty thousand staff work for the organisation, but 3,000 redundancies have been announced. There are 31,000 residents in 750 care homes; this is a UK problem, with 400 constituencies affected in Wales, Scotland, Northern Ireland and England.

The Government have been too slow to get a grip on the situation. The issue has been live since last December, but Age Concern says that the Government have allowed it to reach this crisis point. Questions that need answering include the following. Newspaper reports say that Southern Cross owes Her Majesty’s Revenue and Customs £20 million. Will the Government allow the company to be dragged down by that £20 million debt? What banks are owed money by Southern Cross? How much is owed and what actions will the banks be taking? How are the Government working with the company’s landlords—particularly NHP Ltd, whose parent company is hidden in a fog of complex overseas equity holdings? What are the Government doing to ensure financial probity in this crucial sector? We need to stop the get-rich-quick merchants preying on our elderly relatives.

Who will lead on this issue at the very highest level? This is a cross-Government matter that needs health, business and regulatory intervention. We need reassurance that residents will be safe in their homes, that continuing care will be of the highest standard and that, in the coming months, the Government will focus on ensuring stable financial governance for companies that care for our old and our vulnerable.

[Paul Burstow]

The hon. Gentleman asks a number of questions, some of which are for Ministers and others of which are for the landlords. He asked about NHP Ltd, and he is right to identify the fact that it is the largest landlord. He also asked about bank lending; obviously, the lenders have a key part to play in a solvent restructuring of the business, and that is why they were at the meeting yesterday. He mentioned HMRC, which, as an autonomous Government body responsible for making these decisions, is considering those matters at the moment.

The hon. Gentleman asks about the financial problems and the seeds of the problems. I urge him, in looking at the history of this, to look back several years to the restructuring of the company and the business model that was established and that caused the problem, and to ask himself who were in government at that time.

[Mr Stephen Dorrell (Charnwood) (Con)]

Does my hon. Friend agree that the Government have just one priority in this set of circumstances, and that is to secure the interests of residents? Will he assure the House that he will send a clear message into the system that there will be zero tolerance of any slippage in the quality conditions that are imposed on the providers of care to residents, and that he will continue to keep his eyes firmly focused on the day-by-day quality of care that is delivered to residents?

[Paul Burstow]

The right hon. Gentleman is absolutely right. The Government’s paramount interest—it is the interest that all of us in this House should have—is to ensure the welfare of residents. That has been the message that I, as a Minister, and officials have been giving, and will continue to give, to Southern Cross and to the landlords, and the CQC will have the responsibility of ensuring that that is carried out. It is absolutely clear that we all have to ensure that the restructuring succeeds, because that is in the best long-term interests of the residents.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

I thank the Minister for his statement, limited though it is. I congratulate my hon. Friend the Member for Blaenau Gwent (Nick Smith) on being granted this urgent question on an issue of great importance to Members of the House.

This is not the first time that Members have tried to bring the Minister with responsibility for care services before them to respond to their concerns. The lack of leadership and information from him during this period of uncertainty and anxiety for Southern Cross residents and their families, as well as its employees, has been notable. As a result of the agreement reached yesterday, we now appear to have a period of relative stability. However, great uncertainty remains for residents and employees at Southern Cross homes. We have heard that Southern Cross will now begin a period of restructuring, with reports of around 300 homes changing management, but contracts have been ripped up and it seems that 3,000 jobs are being lost. What assurances can the Minister give on security of employment for those working in Southern Cross?

On safety, last week we heard that Southern Cross is making 3,000 people redundant. We have also heard from the Care Quality Commission that Southern Cross has breached standards at 164 care homes—the equivalent of 28% of its English estate. Can the Minister guarantee the safety of and standard of care for residents, and how will he do this? Will the CQC carry out more frequent inspections?

There has been widespread condemnation of the business practices that led to Southern Cross’s financial problems. It is all very well for the Minister to point fingers at what might have happened many years ago, but this problem exists now, and the Minister is in government now. When people are treated as commodities with no thought to the consequences for them of this risky business model it is important that Government step up to the plate and do something about it. Southern Cross is not the only company in this industry to have financial difficulties. We have heard from the Business Secretary that the business model of Southern Cross and others in the residential care industry will be looked at by his Department. Will the Minister provide more details on the timing of this review and how Members will be told about its findings?

On cuts, the Minister says that there will be robust local arrangements, and I am sure that local authorities will step up to the plate if asked to do so. He must recognise, however, that local authorities are already under enormous strain as a result of the cuts imposed on them by his Government, including the cuts that they are already having to make to adult social care. How can they be expected to pick up the pieces of this national problem without assistance nationally from Government? In other words, are they to be given more resources to deal with the problem of Southern Cross if they are expected to be involved in plan B?

[Paul Burstow]

The hon. Lady is long on critique but very shallow when it comes to how she would approach this differently. Last week, I set out in a written ministerial statement the approach that the Government were taking. We also dealt with this extensively at last week’s Health questions.

The hon. Lady asked about the 3,000 job losses that are being proposed as part of redundancy measures by Southern Cross. Let us be clear: it has a statutory obligation to declare a ceiling for the number of job losses that may—I repeat, may—take place in the business. I have asked the CQC to undertake additional inspections to address concerns arising from the proposed job losses, and that has already been put in place.

The hon. Lady talks about cuts in social care spending but glosses over the fact that this Government, through the spending review, agreed to an unprecedented transfer of resources from the national health service to support social care, with £2 billion extra going into social care by 2014.

We might agree that we need to learn lessons from what is happening to Southern Cross, in respect of regulation and how we ensure a stable and successful social care sector for the future. That is why the Government are committed to an overhaul of social care and to bringing forward a White Paper to set out the plans in due course.

[Neil Carmichael (Stroud) (Con)]

Does the Minister agree that the fundamental problem was a flawed business model that was allowed to exist for far too long under the previous Government?

[Paul Burstow]

My hon. Friend is right to draw attention to that. It is oft commented in the financial pages of our media that that is one reason why this company is in this position and why such a restructuring is necessary. However, I take heart from the joint statement that was issued yesterday following the meeting between the landlords, the company and the lenders. It suggests that a clear route map is being worked out that will ensure continuity of care. That is what all Members of this House must want. We must all be interested, ultimately, in the welfare and interests of the residents in those homes.

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

But is it not absolutely clear that the business model deployed at Southern Cross—selling off 750 freehold properties at colossal profit and then leasing them back, the state paying the fees to meet those rents, and the rental income being siphoned offshore by the landlords into tax havens, leaving the homes grossly underfunded for many years, with 164 homes failing basic CQC standards—is a national disgrace that must be replaced? Does that not mean that the Prime Minister’s commitment to sell off all public services to any willing provider must now be abandoned?

[Paul Burstow]

I think we need a reality check. About 78% of care in the social care sector in England is provided in the private sector. That transfer to the private sector has not happened just in the past 12 months; it is the product of successive Administrations’ policies over many years. We must draw lessons from the experiences of the last few months, but we must focus on the paramount interests of residents and ensuring that this restructuring is successful. That is what I am focused on.

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

I thank the Minister for the information he has given the House and congratulate the hon. Member for Blaenau Gwent (Nick Smith) on his urgent question. There are two such homes in my constituency. This matter is of great concern not just to residents, but to staff. The impact on staff morale has an impact, in turn, on the care given to residents. I urge my hon. Friend to facilitate a speedy resolution as best he can, and to look at the model that we expect local authorities to adopt for buying care. Residents, their families and their advocates should be consulted more and be more involved in the process, so that care is more tailored and there are not such enlarged packages that can be exploited by large organisations, which may not be run as openly and transparently as they should be.

[Paul Burstow]

I am grateful to my hon. Friend for that important question, which points to the need for greater personalisation in the delivery of social care in the longer run. At the moment, in concert with our local authority colleagues, we must be clear about what happens in the event of failure, but also focus on ensuring that this business successfully ensures its future, and that of its employees and the residents who live in its homes.

[Mr Dennis Skinner (Bolsover) (Lab)]

A lot of people know that running care homes has been a licence to print money. This is the second such case in a fortnight, the first being Winterbourne View. There are billionaires in the background making a ton of money. There is evidence that it is not just Southern Cross that is in this position. The goose might have stopped laying the golden eggs, so it is time to go back to what we had in the old days: local authorities being in charge and owning care homes. What is more, would it not be wonderful if everybody was able to go to care homes, like hospitals, free of charge?

[Paul Burstow]

It is important to put on record that something that the hon. Gentleman said is not, and never has been, the case. Social care in this country is not free. That is one of the big inequities of our current system and one of the big challenges that the Government are determined to address through the review that Andrew Dilnot is undertaking.

On the hon. Gentleman’s question about the good old days, I have to say that many people did not see those days as good, because the care was not personalised and individualised, and it was not always of good quality, either.

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

Will the Minister say something more about the specific steps he is taking to see that the Care Quality Commission ensures that standards of care are maintained during the transition period in homes in my constituency owned by Southern Cross? What steps will he take to ensure that the CQC takes its responsibilities seriously?

[Paul Burstow]

That is rightly a key preoccupation of all Members who have constituents who are Southern Cross care home residents and their family members. We have been very clear in our discussions with the CQC that it has to maintain a clear focus on the behaviour and conduct of those homes during the transitional period, and particularly during the restructuring. As other hon. Members have rightly said, the CQC has already identified problems and is addressing them through its enforcement powers, and it will continue to do so.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

The Minister will know that many residents of Southern Cross homes, including in my constituency, have dementia, and that a lot of people with dementia cope very poorly with changes. What may happen is therefore of enormous concern to their relatives. May I therefore press the Minister—he must have had discussions with his officials—on what the Government’s legal position is, what the back-stop is if the worst case scenario develops, and what he will do now to reassure my constituents and many others that the Government really will ensure that their relatives do not face changes that will dramatically affect their quality of life?

[Paul Burstow]

rose—

[Mr Speaker]

Order. By my reckoning the hon. Lady posed three questions, but I know that there will be an immaculate and beautifully tailored single reply from the Minister.

[Paul Burstow]

Thank you very much, Mr Speaker.

I can assure the hon. Lady that, first and foremost, clear arrangements are in place to deal with a catastrophic failure, which I think is now increasingly unlikely. More importantly, we need to ensure that we learn lessons from past care home closures and take them into account in future. However, we can also be clear that the underlying viability of this business is very strong indeed. We need care homes, and that is why we now have a route towards a solvent restructuring of the business.

[Andrew Percy (Brigg and Goole) (Con)]

My concern is for the residents of the two care homes in my constituency, one in Goole and one in the Skippingdale area of Scunthorpe. It would be wrong if anyone tried to use the situation as a shield for making cheap political points.

Given that there are going to be up to 3,000 job losses, what measures will the Government take to monitor the quality of care and the staff ratio at individual homes, to ensure that there is no negative on impact on the residents? We are all concerned about that.

[Paul Burstow]

The hon. Gentleman asks an important question about the impact on the quality of care if there are staff losses. When it became clear that the company was posting a figure of 3,000 redundancies, I instructed the CQC to undertake additional assessments to ascertain any likely effect and ensure that there is no impact on the quality of care.

[Mr Jim Cunningham (Coventry South) (Lab)]

What is the Minister doing to beef up the CQC? As I understand it, there have been a number of redundancies there, and if he wants to maintain the quality of care he has to beef it up. Does he know that the Coventry Evening Telegraph recently conducted an investigation into 10 homes in Coventry, which were found greatly wanting in their standards, hygiene and medicine distribution?

[Paul Burstow]

On the hon. Gentleman’s question about the staffing of the CQC, I can confirm that last October I authorised an additional 75 inspectors’ posts to be filled by that organisation to strengthen it in the very way that he asks for.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

Given that the change in business model seems to have led to the current difficulties, what procedures have the Government and the Department put in place to prevent similar business collapses? Is the Minister convinced that the CQC has sufficient investigative, as opposed to enforcement, powers should the problem sadly recur in future?

[Paul Burstow]

There are certainly issues arising from the current situation that we will want to consider as we go about reforming social care. However, I think it would be wrong, while we are in the midst of the restructuring that the company is undertaking, to bring forward a hard and fast set of solutions to ensure the long-term stability of the social care sector.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

Tomorrow I will visit Bellevue Court in my constituency, one of the many Southern Cross-run homes around the country. I note what the Minister says about the Government guaranteeing that no one in the care of Southern Cross will be left without care as a result of what is happening. Clearly it is preferable for Southern Cross and its landlords and lenders to reach a solution that ensures that, but may I press him a little harder on what will happen if that does not come about? How will he live up to the guarantee, which the whole House has noted today, that if the rescue plan that Southern Cross is trying to achieve does not come about, the Government will ensure that no one is left without care and no one’s care is compromised either in Bellevue Court or in any of the 750 homes throughout the country?

[Paul Burstow]

I entirely understand why the right hon. Gentleman wants to press for further details about what would happen in the hypothetical circumstances that he is keen to explore. However, given the nature of the commercial discussions that are going on at the moment, to give credibility to hypothetical situations is to create the possibility of their becoming a reality. I do not want that to happen.

[Jake Berry (Rossendale and Darwen) (Con)]

The previous Government’s failure to regulate the banks led to a crisis in that sector. Is the national disgrace of Southern Cross, to which Members of all parties have referred, caused by a similar dereliction of duty through their failure to regulate the care sector?

[Paul Burstow]

I am entirely focused on ensuring, through the facilities and offices of the Government, that all the parties involved are clear about their responsibilities, which they are, and that they understand the reputational damage to them if they do not do what they must, which is to ensure a timely, thorough and effective restructuring of the business that secures the continuity of care for residents.

[John Mann (Bassetlaw) (Lab)]

In opposing the proposed sell-off of care homes by Nottinghamshire county council, I have been warning the council for 18 months about the crisis in Southern Cross, but that is not the only big care home provider with problems. As Mimosa, another major provider in my constituency, is also now in crisis and threatening to throw people out of Forest Hill care home, is the Minister prepared to meet families from my constituency so that he is ahead of the game on the next occasion rather than behind it?

[Paul Burstow]

rose—

[Mr Speaker]

Order. I will of course ask the Minister to provide a brief reply, as I know he will be happy to do, but we must focus on the very specific question of Southern Cross. This is not a general debate, whatever the temptations experienced by the hon. Gentleman.

[Paul Burstow]

In the spirit in which the question was asked, if the hon. Gentleman were to write to me I would be only too happy to consider his request.

[Andrew Stephenson (Pendle) (Con)]

The residents of Brierfield House care home in Brierfield and Hulton care home in Nelson will welcome the Minister’s reassurance that no one will end up homeless as a result of this fiasco. Will he say more about how we will learn the broad lessons of this situation and ensure that something like this can never happen again?

[Paul Burstow]

As I have indicated, in the work that we are currently doing preparatory to producing a White Paper later this year, we are engaged with many stakeholders in discussing quality and regulation. We want to ensure that we are clear about the right questions to ask in framing policy, and that we then get the right policy to deliver a more sustainable, high-quality social care system for the future.

[Kevin Brennan (Cardiff West) (Lab)]

The point that my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) made is the key one. The Minister has been very careful not to say what he should be saying, and I understand why—his officials will have told him not to. Will he pledge to the House that if there is a catastrophe of the kind we all want to avoid, every vulnerable person who should not be moved will be able to stay in their residential home? That is the pledge that we need to hear from him today. He needs to show some leadership as the Minister responsible.

[Paul Burstow]

The pledge that I can give to the House today is that all local authorities with Southern Cross care homes and responsibilities for residents whom they have placed there are clear about their statutory duties to guarantee and provide care, not just for state-funded residents, but for those who are self-funded. That is the clearest guarantee that I can offer—it is the essential guarantee of continuity of care.

[Mr Philip Hollobone (Kettering) (Con)]

My constituents are unclear about what effective regulatory early warning system exists to detect financial weakness in care home providers. In the light of the Southern Cross experience, how can any such mechanism be improved?

[Paul Burstow]

A number of hon. Members have asked how we ensure that we improve the system. Indeed, one question that the Health and Social Care Bill rightly raises is the future role of Monitor in effective regulation of the social care sector. We are exploring that issue with colleagues in the Department for Business, Innovation and Skills, and we continue to discuss it with other stakeholders. That could well offer us a longer-term solution.

[Ann Clwyd (Cynon Valley) (Lab)]

As the Minister says, the care sector is increasingly reliant on private sector providers. The sector includes not only people who run care homes, but care agencies. I suspect that they will be one of our next problems.

As a significant proportion of care home and care agency income comes from public funds, I believe that the Government and local authorities have both the right and the responsibility to assess the financial stability of providers, which they entrust with the care of very vulnerable people. Why has that not been done?

[Paul Burstow]

I should take this opportunity, because it has not been asked of me, to say that I have this week spoken to Ministers in the devolved Administrations. My officials maintain contact and dialogue with them. There are real concerns in Wales, where 17,000 residents in 54 care homes are affected.

The right hon. Lady is right that we need to look at wider issues in the sector. Of course, under the current legislative arrangements, the CQC has a duty to examine financial viability. We will look at that issue further.

[Mr Peter Bone (Wellingborough) (Con)]

Following the remarks made by the right hon. Member for Oldham West and Royton (Mr Meacher), directors have very specific duties in the stewardship of a company. Has the Minister had any discussions with the Business, Innovation and Skills Secretary about referring this matter?

[Paul Burstow]

I have not had those discussions—the need has not arisen—but I can be clear that the company feels that the consequences of yesterday’s meetings are important in terms of its ability to carry out a restructuring that safeguards the interests of residents.

[Gloria De Piero (Ashfield) (Lab)]

My constituents ask me specifically whether their elderly and sometimes frail relatives face the prospect of moving. I realise that my hon. Friend the Member for Cardiff West (Kevin Brennan) raised that issue, but what reassurance are we to give to our constituents in that respect?

[Paul Burstow]

I have tried to give the House a number of reassurances on that point. I would add that there have been home closures over a number of years, from which we must learn lessons. One lesson is that we must minimise the possibility of closures and ensure that when they take place they are handled sensitively, slowly and carefully. That is why I welcome the work that the Association of Directors of Adult Social Services recently published—it sets out strong, clear, evidence-based guidance to assist local authorities in managing any closures in future.

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

I have one Southern Cross home on Kesteven way in Hull and I am concerned about what the Minister said and the complacent attitude that the Department of Health is showing on the role of local authorities. Is there a co-ordinated plan for the whole country, bringing together all the local authority plans, so that we know that there is coverage for the whole country if the worst happens? I am not sure that there is.

[Paul Burstow]

Such work is in hand and has been for some time.

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

There is concern among Members on both sides of the House that 31,000 of the most vulnerable people in our country face having to move care home, with all the risks to their health that that involves. The Minister should not introduce a White Paper but sense the urgency of the matter. He should introduce regulations to ensure that the sector is more tightly regulated, and that such a situation does not happen again.

[Paul Burstow]

I understand the desire of all hon. Members for urgent action and a rapid resolution that secures the interests of residents, but I did not hear the hon. Lady suggest what those changes to regulation should be. When she cares to offer such suggestions, we can look at them.

[Ian Mearns (Gateshead) (Lab)]

I am grateful for the Minister’s reassurances, but I am afraid that they ring a little hollow, because I was aware of a great many shortcomings in the level and quality of care in Southern Cross homes in Gateshead before its financial crisis became a matter of public record. It seems that the CQC is looking at homes on an individual basis, and that it is not drawing a national pattern of the rotten care ethos within the whole of that organisation. When will the Minister address this as a national problem?

[Paul Burstow]

I am doing that, and shall certainly make it my business to look up past correspondence from the hon. Gentleman raising those concerns, so that we ensure that they are properly addressed.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am keen to accommodate remaining colleagues, but may I remind them of the merits of brevity?

[Ian Lavery (Wansbeck) (Lab)]

Thank you, Mr Speaker.

Residents in the six Southern Cross care homes in my constituency will be horrified by the Minister’s opening remarks. He said that this is a commercial problem to be dealt with by the commercial sector, which is absolutely outrageous and will frighten the wits out of each of those 31,000 residents. This is a society problem, and it should be dealt with by the Government. What small crumbs or words of comfort can he give to people in my constituency? When will we stop abusing elderly people and using them as marketplace commodities?

[Paul Burstow]

Two contributors to this debate have conflated two completely separate issues. Yes, the business is in serious financial stress—it is working its way through to being a viable business in future—but this is not about the abuse of older people in those homes. We should not conflate the two. It is unhelpful. We need to have a sensible debate and secure a sensible restructuring of the business.

[Mr Tom Watson (West Bromwich East) (Lab)]

I must tell the Minister that he is displaying a remarkable complacency in this crisis, which—like it or not—is his responsibility now. Hon. Members on both sides of the House will be holding surgeries this weekend and meeting the families and loved ones of the vulnerable people who live in those care homes. He has failed to give any guarantee about their future and he has not convinced the House of what lessons he has learned in the short term. This weekend, who can we phone—who will be in the Department?—if there is a problem?

[Paul Burstow]

I made it clear in my statement that the Department has taken steps, working with landlords, Southern Cross and others, to ensure that each party is clear about its responsibilities, and clear on what actions they would take in the event of business closure. However, I also want to be clear that as we move forward, we need to ensure that we learn lessons from this in the context of regulation, and to ask how this was allowed to occur in the first place. Now is not the time for those questions. My focus, as the Minister, is ensuring a successful restructuring of the business, and ensuring that the business remains focused on the welfare of residents.

[Lilian Greenwood (Nottingham South) (Lab)]

I am sorry to press the Minister again on this, but I think he recognises that changes to care, even when well planned, have a serious impact on the health of care home residents. Can he guarantee that if those commercial discussions fail, residents will continue to be cared for in their existing homes?

[Paul Burstow]

The Government have made it clear that in no circumstances will we allow the residents of any of those care homes to find themselves made homeless without good continuity of care. That is the pledge that we make.

[Joan Walley (Stoke-on-Trent North) (Lab)]

But is not the real question how the Minister will secure that guarantee? There is a real tension between care and commerce, and it seems to me that the restructuring could well affect certain areas disproportionately. We need briefings from the Care Quality Commission to ensure that Members in their constituencies can have feedback and reports on exactly how this matter is being dealt with.

[Paul Burstow]

I have already said that I take seriously the need to keep the House informed as we progress these matters. I am also clear that the paramount interest—the interest that the regulator has a statutory duty to enforce—is residents’ welfare. That is what we are doing, and what we will continue to do.

[Nic Dakin (Scunthorpe) (Lab)]

I welcome the Minister’s comment that every resident will be looked after. Will he further reassure residents of Baytree Court in my constituency that they will suffer no detriment as a result of this situation?

[Paul Burstow]

I can say that of course we need to make it absolutely clear to landlords and the company that their actions have consequences, and that their actions now must be focused on a speedy resolution to the restructuring of the business that ensures it can continue to employ good-quality staff and provide care for the 31,000 people who live in its homes.

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

I heard the Minister say that he had had discussions with the devolved Administrations. In his discussions with his Scottish counterparts, was he made aware of the very real concerns of the Convention of Scottish Local Authorities that should there be a catastrophic outcome, as he described it, they would not have the funding or resources to deal with the consequences? What is he going to offer to help in that respect?

[Paul Burstow]

That catastrophic outcome is by far the most unlikely of all the outcomes for Southern Cross. The most likely outcome is a successful restructuring with some of the business being moved to other operators that currently are the landlords of some of these homes. When I spoke to Nicola Sturgeon earlier this week, we discussed all the issues that concern her and me, and we agreed on the need to pursue the path of a consensual, solvent restructuring of the business as the best way of securing the welfare of the residents in those homes.

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

Eighty per cent. of Southern Cross’s income comes from the taxpayer, yet attempts seem to have been made to offshore as much of that money as possible. Age UK says that in the future all care home providers should have to demonstrate to the regulators that they have a solid business model. In his answer to my hon. Friend the Member for Wolverhampton North East (Emma Reynolds), the Minister seemed to imply that there had been no suggestions for how regulation could be strengthened. Will he seriously consider Age UK’s suggestion over the coming months?

[Paul Burstow]

I am grateful for that question because it allows me to make the point that Age UK was very welcoming of the Government’s proposition to look at Monitor’s role in the social care sector. We are in discussions with it and will continue to consider the idea.

[Mrs Mary Glindon (North Tyneside) (Lab)]

I understand that the Department of Health was invited to yesterday’s meeting with Southern Cross. With 31,000 vulnerable people facing the possibility of losing their homes, why did no one from the Government attend?

[Paul Burstow]

The character of the meeting has changed significantly over the past couple of days. The meeting is now focused on reaching a clear agreement between the lenders, the landlord and Southern Cross. We wanted to ensure that they were focused on that, which is why no representatives of the Department of Health were at the meeting.

[Jim McGovern (Dundee West) (Lab)]

All the contributions today have concentrated mainly on the rights and plight of residents, which is entirely understandable—I would not expect it to be any other way—but we should also think about the work force of Southern Cross. Just yesterday I was in touch with the local GMB organiser in Dundee, John Moist, who told me that at the homes in Dundee the work force are totally demoralised, which I think the Minister would agree is not the best atmosphere in which to provide care. Further to what was said earlier, will he consider setting up a helpline for MPs? Hon. Friends have talked about family members of residents coming to their surgeries this week; I have had employees at my surgeries, and it would help if I had someone to contact.

[Paul Burstow]

Just two days ago, I had a meeting with GMB officials to discuss their concerns about this and other issues in the social care sector. Of course we will consider the appropriate arrangements that might need to be put in place in the event of the scenarios that the hon. Gentleman talked about.

Academies (Funding)

Thursday 16th June 2011 Commons Chamber

12:14

[Andy Burnham (Leigh) (Lab)]

(Urgent Question): To ask the Secretary of State for Education to make a statement on funding for the academy programme.

[The Minister of State, Department for Education (Mr Nick Gibb)]

The errors reported in the Financial Times today relate to mistakes made by local authorities in their returns to the Department for Education, which relies on local authorities to provide accurate information about their spending. Occasionally, individual local authorities make errors that can lead to academies getting too much, or indeed too little, funding. The system for funding academies, which was set up—I have to say—by the previous Government, is unclear, unwieldy and, in our view, unfair. It is no surprise, therefore, that some errors occur, which is why we are proposing changes to the school funding system to ensure that all schools and academies are fairly funded. We are proposing a system without the complexities that lead to these types of problems.

It is slightly odd for the right hon. Gentleman to ask these questions and attack us for the failings of a system created by the previous Labour Government, of which he was a member. We are the ones sorting it out, just as we are sorting out this country’s historic budget deficit. The question for him is: does he agree that we should raise the bar for secondary schools from 35% achieving five good GCSEs including English and maths, to 40% next year? Does he agree that we should further raise it to 50% by the end of this Parliament? Does he agree with our announcement today—[Interruption.] I do not know why the Opposition do not want to hear this. Does he agree with our announcement on extending the academies programme to underperforming primary schools, particularly the 200 worst-performing primary schools, many of which were in that state for a decade while his party was in government?

[Andy Burnham]

When will the Government learn that they cannot just bat away the question and always blame somebody else for the things that go wrong? Today’s Financial Times writes that the Department has given a large number of academies in England more money than they were entitled to. The news comes just days after the Secretary of State caved in to a legal claim from 23 councils that too much money was taken from their budgets to pay for academies. This raises a simple question: do the Secretary of State and the Minister have a grip on the budget?

But where is the Secretary of State? On a day when serious questions are being asked about whether the rapid expansion of his academy programme is backed up by a properly funded plan, only this Secretary of State could be in Birmingham announcing another major expansion of it. Why is he not here making that statement to the House of Commons? Should he not be here to reassure Members that he can proceed with his academies programme fairly and efficiently without penalising other schools in Members’ constituencies? Will the Minister tell the House how many schools have been overfunded, and what is the total amount paid in error? Will this money be clawed back from schools? It is not good enough for the Minister to stand there and blame everybody else. When will he take responsibility for the budget of his own Department? If it did not spot the mistake before the Financial Times reported it, why not? When will it put in place a proper accounting procedure?

Under threat of legal action, the Government have announced a U-turn on academy funding. Can the Minister set out the details and timetable for a review, and does he accept the need for urgency? Is it not the case that the Secretary of State repeatedly finds himself in these positions because he rushes ahead and fails to consult people on changes? We have been here before on school sport, education maintenance allowance and Building Schools for the Future. The only way people can make him listen to them is to launch a legal action. That is no way to run a Department. We hear that he will pay the councils’ legal costs. In the past year, he has spent more money on solicitors’ fees than Ryan Giggs and Fred Goodwin put together. How much has he spent on legal costs, and is this not a scandalous waste, when every penny is needed for children’s education?

The Secretary of State is today raising the floor targets for secondary schools and focusing the academy programme on struggling schools. These are Labour policies, and we are pleased at his dramatic conversion to them. We support raising standards in our schools; it is the standards of the Secretary of State we worry about. Perhaps the plan we needed to hear today was for poorly performing Departments to be taken over by successful ones. The only trouble is—there are no successful Departments. On the radio today, the Secretary of State tried pathetically to blame Labour for his latest blunder. Is it not time that he took responsibility for his own serial incompetence before people lose confidence in him altogether?

[Mr Gibb]

Yet again, the right hon. Gentleman overstates his case. First, the Secretary of State is in Birmingham today speaking to the National College for School Leadership, which is a very important part of our system of raising standards, and I am sure that his predecessors spoke every year to those conferences too. We are taking action to tackle the problems, although I should remind the right hon. Gentleman that the problem highlighted by the Financial Times occurred every year under the last Labour Government. The difference between the former Government—his Government—and this one is that we are taking action to sort it out. That is why we announced a fundamental review of the school funding system. That review is already taking place, and we will be making further announcements and holding a further consultation on the details later this year.

The right hon. Gentleman also raised the issue of the LACSEG—the local authority central spend equivalent grant—which is about double funding, where central Government are funding both the local authority and the academy for the same central services. Again, that is something that occurred under the last Labour Government, and we are sorting it out. That is why the Department for Communities and Local Government top-sliced £148 million off the funding to local government—to deal with that double funding. We are now looking at the issue again, as a result of the action taken by the 23 local authorities, and sorting it out. I would like to know from the right hon. Gentleman whether he supports us in our review of the funding system, so that we can create a simpler and clearer system that all can understand, and one that is similar for schools and academies. We want to achieve a per-pupil funding system that is fair and that all can understand, rather than the system over which his Government presided where schools in some local authorities received some £4,000 more per pupil than other schools with the same problems. Those are the problems that this Government are seeking to sort out, and I hope that he will support us in those plans.

[Robert Halfon (Harlow) (Con)]

Is it not the case that this urgent question is a smokescreen for those who oppose academies, given that we have created more academies in 12 months than Labour created in 12 years? Is it not also the case that the last Government left 500,000 children illiterate, and that those who are creating obstacles to academies want to wallow in mediocrity rather than pursue excellence?

[Mr Gibb]

My hon. Friend is, of course, absolutely right. It is not clear where the Opposition stand on, for example, free schools. Since the election, the right hon. Member for Leigh (Andy Burnham) has said that he opposes the establishment of free schools. However, since the news broke that one of Tony Blair’s closest aides is setting up his own free school, the right hon. Gentleman has told journalists that he now supports free schools. Which is it: does he support our academies programme and the free schools programme, or would he close down those schools if he came to power?

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

When I published the original policy paper on academies 10 years ago, it was never intended that they should be overpaid and that local authorities should be underpaid for doing the job of supporting pupils. Can the Minister confirm that the 2.25% that has been withdrawn from school funding generally and the overspend on academies have denied other children the key services that they need to raise standards and give them the life chances that all of us should want for every child?

[Mr Gibb]

I think it is rich when former Education Secretaries attack us for this policy. We are talking about a system that this Government inherited from the previous Government, and we are trying to sort it out. We will look at every instance of underfunding or overfunding of academies on a case-by-case basis. We want to reach a position where all schools and academies in this country are funded through a fair, simple and transparent process.

[Mr Mike Hancock (Portsmouth South) (LD)]

We can all accept that the problems that have occurred are the fault of the regime in place under the last Labour Government, but can the Minister give me an assurance that he will put in place a replacement formula, so that the next tranche of academies will not suffer from the same inconsistencies, and local authorities, which will continue to service other schools, will not experience a detrimental cut in their allowance?

[Mr Gibb]

I am grateful to my hon. Friend for raising those issues. That is precisely what we intend to introduce and what the current review of school funding is seeking to deliver. That review is taking place right now, and later in the year we hope to be able to announce a further consultation on the details of its outcome.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Is the Minister aware that he is in danger of alienating those of us on the Opposition Benches who believe in the academy model for underperforming schools and who welcome announcements that are made to this House? The question asked by Sarah Montague on Radio 4’s “Today” programme this morning has to be answered: does the incompetence that we are talking about this morning emanate from local authorities, as the Secretary of State said time and time again, or from the Department?

[Mr Gibb]

As the Secretary of State made clear, we are talking about an error in the figures reported by local authorities to the Department, and these errors happen every year. We are determined to simplify the system, because it is the complexity of that system which results in local authorities making those errors when they report the numbers. The only way to tackle the problem is to simplify the system, which is what the school funding review is charged with delivering.

[Charlotte Leslie (Bristol North West) (Con)]

Does the Minister agree that this urgent question is an extraordinary own goal? Labour either knew about this structural, technical problem and did nothing about it, or else it had no idea. Which does the Minister think is worse: not knowing or ignoring?

[Mr Gibb]

My hon. Friend raises an important point, which goes to how to handle opposition. That is why I asked the right hon. Member for Leigh the questions that I did. This is not about just jumping on the latest bandwagon of a Financial Times report; it is about working out where the Opposition stand on issues such as raising the bar on standards in secondary schools and how to tackle the 200 worst-performing primary schools.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Since the beginning of the year, at the request of parents in my constituency, I have been trying to find out the funding basis of the several free schools due to open there. I have with me correspondence from the Department giving every possible excuse for not giving that information—it even makes “The dog ate my homework” sound plausible. The last correspondence, from two months ago, concerned my appeal against the refusal under the Freedom of Information Act. I have had no response whatever from the Department, which is concealing the information either because it does not know it because it is incompetent, or because free schools are being treated in a preferential way. Will the Minister please now answer those questions?

[Mr Gibb]

Details of free schools will be published once they open, so the hon. Gentleman will be able to see all that information once that free school opens. We are concerned about disclosing details of proposals for free schools where they have been turned down, because that can cause embarrassment to the individuals who have made those proposals, who will sometimes be teachers who have existing jobs. There are all kinds of reasons why we have to maintain confidentiality for those proposals, but all those details will be made available for any free school that opens.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I welcome my hon. Friend’s statement about simplifying the system. I hope that he agrees that it is only fair that students in free schools or academies should receive the same amount of funding as that provided to those in LEA schools.

[Mr Gibb]

My hon. Friend raises a good point. That is how the system is supposed to work, and how it does work. Academies are funded on the same basis as maintained schools; however, they have more control over that element of funding which is currently spent by the local authority on those central services provided by the academy. That is all that is meant to happen with the funding system. It is the complexity arising from that system and the fact that local authorities are funded by both the Department for Education and the Department for Communities and Local Government that has led to problems. However, this is an issue that we are tackling and sorting out.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

Even though the Secretary of State is in Birmingham, just in case he does not get a chance to talk to Councillor Les Lawrence, who recently complained bitterly on the front page of The Birmingham Post about significant hidden costs in the academies programme that leave local education authorities out of pocket, can the Minister address those concerns and say what the Secretary of State’s answer to Les Lawrence would be if he has the chance to talk to him today?

[Mr Gibb]

We have talked to Les Lawrence on many occasions. He raises an important point, which is that when the top-sliced funding for local authority central services is taken away from local authorities, there is an issue about how we allocate those savings across local authorities. That is the issue on which there has been correspondence with those local authorities. We are reviewing the position to ensure that we do not leave local authorities in a position from which they cannot fund the central services that they continue to provide to maintained schools, as well as those that they continue to provide to pupils attending academies.

[Angie Bray (Ealing Central and Acton) (Con)]

I agree with the point made by my hon. Friend the Member for Harlow (Robert Halfon) that the Opposition do not like to listen to the success story that is the academies programme. Why does the Minister think that more than 1,200 schools have already applied for academy status?

[Mr Gibb]

Those schools are applying because of the autonomy and independence that academy status brings to them. My hon. Friend is right to cite the figure of 1,200. By now, 704 academies have opened, compared with 200 when this Government came into office. They are delivering a very high standard of education, and I hope that the Opposition will support not only our existing academy programme but our proposal to extend the programme to primary schools and, in particular, to the 218 worst performing primary schools.

[Helen Jones (Warrington North) (Lab)]

I feel sorry for the Minister today, because he has clearly been sent here as the fall guy. Speaking as a parent and on behalf of the parents in my constituency, I should like to ask him a question. We have a Secretary of State who botched up the Building Schools for the Future programme, who had to do a U-turn on school sport partnerships and who cannot spot errors in the funding programmes of his own Department. Why should any parent have confidence in his running the education system when he cannot even run his own Department?

[Mr Gibb]

I know and like the hon. Lady; I have known her for many years. She is trying to create a theme here, but there is no theme. The problem that was reported in the Financial Times today occurs every year. It arises from the complexity of the funding system, which we are trying to simplify. It is as simple as that, and we will sort it out.

[Stephen McPartland (Stevenage) (Con)]

I congratulate the Minister on moving the focus on to the 200 worst-performing primary schools. Does he agree with Nick Pearce, the head of the Institute for Public Policy Research and Tony Blair’s former policy adviser, that this is something that the previous Government did not focus on enough?

[Mr Gibb]

Yes, I do. When we were in opposition, we proposed extending academy status to primary schools. The schools Minister at the time thought it was an appalling idea. However, we have to do something about the 200 underperforming primary schools. Indeed, we have to do something about all the underperforming primary schools, because primary school is where children learn the basics of reading and arithmetic. If we do not get it right in those early years, the life chances of all those thousands of children attending those underperforming schools could be blighted. We intend to sort those schools out.

[Ian Mearns (Gateshead) (Lab)]

The Secretary of State has made it plain that if schools do not buy a raffle ticket by going for academy status, they will not be able to get involved in the raffle to get capital out of the future school funding. He has already admitted to the House that 100 staff in his Department are engaged in the expansion of the free schools programme. How many staff are engaged in this botched expansion of the academies programme, and how much is that costing the Department?

[Mr Gibb]

This is an important part of raising standards in our school system; indeed, it is a crucial element. When 9% of boys leave primary school with a reading age of seven or under—they are basically unable to read—it cannot be said that applying staff in the Department to deliver the academies programme is a waste of taxpayers’ money. This is good money that is being diverted to a programme designed to raise standards in our least-performing schools, and I think that it is a good use of taxpayers’ money.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Does my hon. Friend agree that it is extraordinary for the Opposition to quibble about accounting errors? Is this not a smokescreen to distract attention from Tony Blair’s comments during the past two weeks supporting this Government’s policies on academies and primary schools?

[Mr Gibb]

My hon. Friend raises a point that I was too sensitive to raise with the Opposition spokesman—namely, that our policies were endorsed in The Sun yesterday by the former Prime Minister, Tony Blair. Furthermore, the former schools Minister, Lord Adonis, voted for our Academies Bill in the other place, supporting our expansion of the academies programme. I wish that the official Opposition would now support it too.

[Mr Tom Watson (West Bromwich East) (Lab)]

Is the Minister familiar with the maxim that a Minister can delegate power but not responsibility? Why does he not just say sorry to parents and pupils?

[Mr Gibb]

We are not denying responsibility. We are taking action to simplify the over-complex funding system that we inherited, which led to problems such as these in previous years.

[Brandon Lewis (Great Yarmouth) (Con)]

In Great Yarmouth, we have seen the benefit and freedom resulting from the transformation of schools such as the Ormiston academy. Does the Minister agree that it is that freedom and the potential for transformation that are encouraging at least one in three secondary schools to apply for academy status?

[Mr Gibb]

My hon. Friend is absolutely right. He will know, as I am sure the Opposition do, that academies are improving at twice the pace of the rest of the schools system. That is why we are so determined to expedite the process of conversion to academy status.

[Kerry McCarthy (Bristol East) (Lab)]

Turning underperforming schools into academies in Bristol was, for the most part, a great success. Free schools, however, are not needed and, for the most part, not wanted there. When are the Government going to get their priorities right, get a grip on their finances and help Bristol to address the real problem that it is facing at the moment—namely, the chronic under-provision of primary school places?

[Mr Gibb]

The hon. Lady seems to be contradicting herself. There is a shortage of primary school places, yet she says that there is no need for the free school programme, which could be used to create more school places. We want not only more school places but more high-quality school places, and that is what the free school programme, in particular, is designed to achieve.

[Mr Mark Spencer (Sherwood) (Con)]

The Dukeries college in Ollerton and the Joseph Whitaker school in Rainworth are just two of the large number of schools that are applying for academy status. Is not the fact that the numbers have reached such a high level a ringing endorsement of the Minister’s policy?

[Mr Gibb]

Yes, and it demonstrates that the teaching profession values that autonomy and the trust that the Government are putting in them. That is in enormous contrast to the top-down, prescriptive approach taken by the previous Government. That is why I believe that our system will work. In contrast, Labour did not manage to achieve a significant rise in standards in the schools system during its 13 years in office.

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

Can the Minister tell the House how many times the previous Labour Government were taken to court over their education policies?

[Mr Gibb]

The Sharon Shoesmith case springs to mind. I will write to the hon. Lady and let her have those figures.

[Richard Fuller (Bedford) (Con)]

Financial and accounting errors are a serious matter, and it is not surprising that the shadow Secretary of State for Education has raised the issue, given his direct experience of the catastrophic financial and accounting errors under the last Government. Does the Minister not agree that, on a day when this Government have thrown a lifeline to children trapped in underperforming primary schools, it is odd that Labour has once again turned its back on those children?

[Mr Gibb]

My hon. Friend is right. The Secretary of State has announced that we are taking urgent action to convert the 200 least-performing primary schools in this country to academy status, transforming those schools and giving the youngsters who attend them a significantly better start to their education, and I would have thought that that should be the issue to be raised today.

[Nic Dakin (Scunthorpe) (Lab)]

Given the Department’s serial bungling, can the Minister tell us how much it has spent on defending legal challenges in the past year?

[Mr Gibb]

These issues are faced by all Governments and all Departments—[Hon. Members: “How much?”] I do not have those figures to hand, but if I am able to get them, I will write to the hon. Gentleman.

[Charlie Elphicke (Dover) (Con)]

Three of the 704 new academies are in my constituency. We are seeing an education revolution, so why are we not discussing that and the success of our schools, rather than accounting errors that are a car crash left by the previous Government?

[Mr Speaker]

Order. The simple answer to the hon. Gentleman’s inquiry is that we are discussing this matter because an urgent question application was submitted to me and granted by me. No further discussion of that point is required.

[Neil Carmichael (Stroud) (Con)]

Is it not the case that this urgent question has certainly underlined the need for a full investigation and inquiry into the discredited system that the last Government used for the funding of schools, which was unfair and inefficient? Is it not ironic that this issue has been raised when schools want more autonomy from such systems? Is it not also the case that we should support—

[Mr Speaker]

Order. That is enough. The hon. Gentleman has had a good outing and I am sure he has enjoyed it.

[Mr Gibb]

My hon. Friend is absolutely right and asked a good question. Many local authorities have been raising this issue for many years; they campaigned on it and lobbied the previous Government about the unfairness of the school funding system. That is what we are determined to sort out with the school funding review.

[Anna Soubry (Broxtowe) (Con)]

I visited Foxwood special school in my constituency on Friday and learned how keen it is to obtain academy status. Will the Minister help Foxwood and other special schools by encouraging them to apply for that status, and will he particularly assist Foxwood school?

[Mr Gibb]

I am grateful to my hon. Friend. One of the changes proposed in the Education Bill is to allow academy status to apply to special schools as well. I would be very happy to help my hon. Friend; if she and the head teacher of that particular special school would like a meeting in the Department to discuss academy status, I would be delighted to arrange it.

[Mr Philip Hollobone (Kettering) (Con)]

The new academies in Kettering are hugely welcomed by local residents. Can the Minister confirm that the proportion of education funding that goes into teaching pupils will go up under this Government, with a lesser proportion being spent on bureaucracy in local town halls and in his Department?

[Mr Gibb]

My hon. Friend raises an important point about bureaucracy in the education system. We are devoting a huge amount of resources within the Department to clamping down on bureaucracy and removing bureaucratic burdens on schools. It is a large amount of work; it involves rewriting reams of guidance. The guidance on bullying runs to something like 400 or 500 pages, and I think it is rarely read in schools. We are streamlining it and slimming it down to about 25 pages, and we are doing the same thing with all the guidance so that it becomes efficient, quick to read and of high quality. Schools will then be able to use it without having to read through reams of lever arch files emanating from the Department. We are putting a stop to that.

Business of the House

Thursday 16th June 2011 Commons Chamber

12:42

[Hilary Benn (Leeds Central) (Lab)]

Will the Leader of the House give us the forthcoming business?

[The Leader of the House of Commons (Sir George Young)]

The business for next week will be:

Monday 20 June—Second Reading of the Pensions Bill [Lords].

Tuesday 21 June—A motion relating to the partial recommittal of the Health and Social Care Bill, followed by remaining stages of the Scotland Bill.

Wednesday 22 June—Opposition Day [18th allotted day]. There will be a debate on an Opposition motion. Subject to be announced.

Thursday 23 June—A motion relating to review of congenital cardiac services for children followed by a motion relating to wild animals in circuses. The subjects for these debates were nominated by the Backbench Business Committee.

The provisional business for the week commencing 27 June will include:

Monday 27 June—A debate on House of Lords reform.

Tuesday 28 June—Opposition Day [19th allotted day]. There will be a debate on an Opposition motion. Subject to be announced.

[Hilary Benn]

I am grateful to the Leader of the House for that reply.

The whole House will have welcomed this week’s successful meeting of the Global Alliance for Vaccines and Immunisation, which showed why the last Government were right to prioritise the vaccination of children from a rising aid budget and why this Government are right to continue to show leadership to save children’s lives.

Will the right hon. Gentleman confirm that the current Session will end in March next year, with a Queen’s Speech before the end of that month so that it is all done before the Easter recess and pre-election purdah?

On the Health and Social Care Bill recommittal motion, will the right hon. Gentleman confirm that it will be debatable and tell us for how long? The House must have the opportunity to discuss how the Bill will be scrutinised because the Health Secretary has said that only the relevant parts of the Bill will be recommitted. That is completely unacceptable, and it will make life only more difficult for the Government in the other place where, as we know, they already have problems with time. In the case of the last two Bills to be recommitted, the whole of the Bill was sent back. When are we going to see the draft amendments? How many clauses are going to be changed? What about the knock-on effects on other clauses? The reason why the Bill is in chaos is that the Government really messed it up first time round. That is why trust is in very short supply, making it essential that, this time round, the House and all those who care about the health service have the time and scope they need to look again at the Bill in detail.

As well as reconsidering the Health and Social Care Bill, can we also have a debate on why the Prime Minister got this so catastrophically wrong in the first place, with staff being sacked and then re-hired at great expense? As we saw yesterday—and it was really rather embarrassing—the Prime Minister does not do his homework and he does not even know what is in his own legislation. While no one wants to take responsibility for the mess, everyone is trying to claim credit for the changes. The Lib Dems think they have saved the NHS from the Tories, which has irritated those on the Conservative Benches, while the Prime Minister thinks he has saved the NHS from his Health Secretary, who is no doubt pretty cross, too. However, the people who really count, the public, think what we have known for a very long time—that you can’t trust the Tories on the NHS.

Following the comments of the First Sea Lord this week about the effects of the Libya campaign on the Royal Navy and bearing in mind that we could have saved both time and money if we still had our Ark Royal and its Harriers, when are we going to have a statement from the Defence Secretary about looking again at the strategic defence and security review? The review has proved incapable of surviving contact with real events, and it has left this country in the extraordinary position of being an island nation that cannot put an aircraft carrier to sea.

Having heard the Government’s pathetic excuses for refusing to bring in a ban on the use of wild animals in circuses, during the course of which the House was told, wrongly, that this was because of a non-existent legal case, has the Leader of the House had any indication from Department for the Environment, Food and Rural Affairs Ministers that they plan to make a statement dumping the policy before next Thursday’s debate? If not, will the right hon. Gentleman join my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick), the hon. Members for The Wrekin (Mark Pritchard) and for Colchester (Bob Russell), me and many other Members in voting to do the right thing?

Finally, can we have a debate on weekly rubbish collections? Although it was the Secretary of State for the Environment, Food and Rural Affairs who answered Tuesday’s urgent question, we really want to hear from the Secretary of State for Communities and Local Government as we all know that this was his pet project and his great cause, so he must be very disappointed. Brimful of nostalgia for the clink of glasses of warm beer, the thwack of willow on leather and the clang of weekly bin collections, he had proclaimed that having the rubbish taken away every seven days was

“a basic right for every Englishman and woman”—

Shami Chakrabarti and Liberty, please note. Jumping heroically on a passing bin-wagon, the Communities Secretary pledged to bring back weekly collections. In fact, he has been defeated by his own Conservative councillors who, after all, have introduced more alternate weekly collections than anyone else—Conservatives like Andrew Nunn, an environment cabinet member in Suffolk, who said bluntly:

“Eric Pickles should spend less time reading the newspapers. He’s got it wrong.”

I agree, but with one exception. After all the policies that the Government have had to throw away in the last few weeks, there is one address that desperately needs to keep a weekly collection of rubbish—No. 10 Downing street, where there is even enough room for a bin lorry to do a U-turn.

[Sir George Young]

I thank the right hon. Gentleman for that response. The House will note that his performances at business questions are attracting the attention of powerful friends. Last Friday, he was praised by the Daily Mail, which announced:

“Hilary Benn for Labour leader. The campaign starts here”.

After that intoxicating but unlikely endorsement, I looked up the odds on the right hon. Gentleman becoming the next Labour leader. I was disappointed to see him some way behind the pack at 33:1, but if I were a betting man, I would say it was worth a pony on the shadow Leader of the House.

I welcome what the right hon. Gentleman said about the conference on Monday. He will have noted the extra £800 million that the Government have invested in vaccination, and he will have heard the Secretary of State’s statement on Wednesday about our overall policy on aid.

The right hon. Gentleman should not believe everything that he reads in the press. The end of the Session will depend on the progress that we make with legislation. I remind him that the then Government were not telling us 10 months before March last year—in 2009—when that Session would end. According to my recollection, we did not know when it would end until March, when the Government hit the buffers.

The motion to recommit the Health and Social Care Bill would normally have been taken forthwith under the Standing Orders. We propose to make time available for the Bill to be debated, and to recommit the parts that were amended by the Government in their recent statement.

[Chris Bryant (Rhondda) (Lab)]

They were not.

[Sir George Young]

I mean the parts that we propose to amend. The recommittal motion will be tabled in good time for the House to debate it on Tuesday.

As for the right hon. Gentleman’s comments on the Bill, I hope that he read what Lord Darzi said about our policy. He said:

“I certainly don’t see it as a U-turn. I see it as a continuum of reform that the health service has witnessed for the last decade under Labour and it’s moving on into the next decade very much based on the changes in the demand on the health service.”

I hope that that view will be reiterated by Opposition spokesmen as the Bill proceeds through its remaining stages.

The Prime Minister dealt with the First Sea Lord’s comments yesterday when he referred to the statement by the Chief of the Defence Staff that we had the resources to continue the exercise in Libya for as long as it took. I remind the right hon. Gentleman that his party in government deferred the conducting of a strategic defence and security review for a long time. We have conducted one, and we have no plans to revisit it.

I announced that there would be a debate on circus animals next Thursday, in Government time, and the Government will make their position clear during that debate. I remind the right hon. Gentleman that that is yet another issue on which his party in government failed to take any action, leaving us to sort it out.

I was slightly surprised when the right hon. Gentleman raised the subject of bin collection. I remember his rather humiliating U-turn on waste only two years ago when, as Environment Secretary, he had to back down on his own proposals. As my right hon. Friend the Secretary of State said, we are backing local authorities that want to increase the frequency and improve the quality of their bin collections, and we have abandoned Labour’s guidance to the Audit Commission which penalised local authorities that carried out weekly collections.

[Philip Davies (Shipley) (Con)]

When can we expect a statement and a debate on sentencing? According to new assault guidelines, an assault on a police officer which involves a punch to the stomach that winds a police officer, when the criminal attempts to evade arrest and has previous convictions for public order offences, can now be punished with only a fine. That kind of soft, lily-livered approach to sentencing is driving my constituents mad, and it is time that the Government got a grip on the issue once and for all.

[Sir George Young]

I have some good news for my hon. Friend. The Government will shortly be introducing a legal aid and sentencing Bill, which will give him an opportunity to share his views with the House at greater length.

[Vernon Coaker (Gedling) (Lab)]

Will the Leader of the House find time for an urgent statement enabling the Business Secretary to explain to the House why the Government are refusing to sign a United Nations convention that protects the rights of domestic workers? On the day of the announcement to that effect, the Secretary of State for Work and Pensions was supporting an inquiry into modern-day slavery. It is about time that the Government got their act together.

[Sir George Young]

Questions to my right hon. Friend the Business Secretary will take place on 14 July, but in the meantime I will draw my right hon. Friend’s attention to the hon. Gentleman’s question and ask him to reply to it.

[Nigel Mills (Amber Valley) (Con)]

Will the Leader of the House find time for a statement by the Secretary of State for Transport explaining this morning’s decision to award the contract for Thameslink trains to Siemens, which will manufacture them in Germany, rather than to Bombardier, which would have manufactured them in Derby? I think that the whole House would like to understand how we reached the position of having to export those jobs to Germany.

[Sir George Young]

I believe I am right in saying that my right hon. Friend the Secretary of State for Transport issued a written ministerial statement today on two subjects, one of which was the award of that contract. Next Thursday, when my right hon. Friend responds to oral questions at the Dispatch Box, my hon. Friend will have an opportunity to press him, or more likely her—the Minister of State, Department for Transport, my right hon. Friend the Member for Chipping Barnet (Mrs Villiers)—on the reasons for a particular decision to award the contract to a particular company.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Earlier today, during questions to the Secretary of State for Culture, Olympics, Media and Sport, the future of Supporters Direct was raised. Since its creation 11 years ago, that organisation has been at the forefront of community involvement in football clubs, but its future is very much in doubt following the decision to rescind funding from the Football Stadia Improvement Fund. I believe that, whether one is a supporter of co-operatives, a supporter of the big society or just a football supporter, the excellent work done by Supporters Direct cannot be lost.

I understand that my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) has applied for a Westminster Hall debate on the subject. I do not know whether the Leader of the House is a football-supporting man, but I wonder if he will support my hon. Friend’s request.

[Sir George Young]

He is. He has supported Queen’s Park Rangers for a very long time, and welcomes its recent promotion.

I understand that during the exchange at Question Time, the Minister for Sport and the Olympics, my hon. Friend the Member for Faversham and Mid Kent (Hugh Robertson) was very supportive indeed of the hon. Gentleman’s proposition. I hope that it will be pursued further in Westminster Hall, and I will ask my hon. Friend whether he can add to what he said earlier.

[Karen Bradley (Staffordshire Moorlands) (Con)]

Many of my constituents have contacted me because they are concerned about the disruptive effect that industrial action by teachers will have on their children’s education. May we have a debate on that important issue?

[Sir George Young]

I understand my hon. Friend’s concern, which I am sure is shared by many Members on both sides of the House. I think it regrettable that two teachers’ unions have decided to take industrial action at a time when the Government are still negotiating with them about the future of pensions. That will be bad news for the children, and bad news for parents who go out to work.

Responsibility for contingency planning rests with individual employers, and at this stage the Government have no plans to change the legislation, but I will bring my hon. Friend’s concern to the attention of the Secretary of State for Education, and will see whether there is any further action that he can take.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

In his Mansion House speech last night, as well as pre-empting the final report of the Independent Commission on Banking, the Chancellor announced the sale of Northern Rock to the highest bidder. I do not know whether that will be considered in the statement that will follow business questions, but, if not, may I urge the Leader of the House to arrange a debate, or indeed a statement, on the issue? That would enable the House to be told why, in this instance, the Government have chosen not to implement the pledge in the coalition agreement

“to foster diversity in financial services, promote mutuals and create a more competitive banking industry.”

[Sir George Young]

Let me respond to the direct question posed by the hon. Gentleman by saying that whether a question about Northern Rock would be in order in the statement that is to follow would be a matter for you, Mr Speaker. I see that you are reflecting on it as we speak.

It has always been the Government’s policy to return Northern Rock to the private sector, and that is what my right hon. Friend the Chancellor announced yesterday evening.

[Mr Andrew Turner (Isle of Wight) (Con)]

The London Organising Committee of the Olympic Games and Paralympic Games appears to believe that the London Olympic Games and Paralympic Games Act 2006 prevents other people from even mentioning next year as a date. It says that the term “2012” is now widely used in the United Kingdom as a reference to the games. My constituent Julie Benson, founder of the Great Exhibition Company, is being threatened by that. She said that her exhibition next year

“will promote the best of Great Britain to the rest of the world —it’s not about a sporting event in London.'”

Can the Leader of the House reassure me—and Julie Benson, and printers of diaries and calendars everywhere—that the Act does not confer on LOCOG exclusive rights to any number or date, and that Members will not have to rely on the privileges of their membership of the House to talk about the date next year?

[Mr Speaker]

I am sure the ingenuity of the Leader of the House is such that he will fashion a way to relate his answer to the business of next week.

[Sir George Young]

Or, indeed, next year.

I endorse my hon. Friend’s general proposition: that there is no monopoly on 2012, and we are at liberty to refer to it. However, I would hesitate before engaging in what appears to be a legal dispute between two companies, as I believe that would be better sorted out by the courts than by Ministers.

[Chris Bryant (Rhondda) (Lab)]

May we have a debate on the fiduciary responsibility of members of boards of directors? Both UK and United States law makes it clear that directors are bound to

“exercise reasonable care, skill and diligence”

in ensuring companies act lawfully, yet this clearly has not happened in relation to News Corporation, the owner of the News of the World, where criminality has gone on extensively. That now leaves people such as José Maria Aznar, Andrew Knight, Kenneth Cowley, Rod Eddington, Thomas Perkins and Stanley Shuman in real legal peril.

[Sir George Young]

I believe that the hon. Gentleman has just asserted that somebody had acted unlawfully. If that is the case, it is a matter for the police.

[Nick de Bois (Enfield North) (Con)]

May we have a debate on the ownership and effectiveness of local and regional newspapers—including mine, The Enfield Advertiser and the Enfield Independent—since many editors throughout the country feel they are unable to scrutinise local public bodies? While it is not our role to run newspapers, I believe that, given the pressures on the industry, we should debate the implications of this serious matter.

[Sir George Young]

I would welcome a debate in Westminster Hall, or initiated by the Backbench Business Committee, on the health of local newspapers, in which we all have an interest. My hon. Friend’s question did not make it clear why they were impeded from reporting on certain matters, but if he writes to me, I will see what I can do, in conjunction with my right hon. Friend the Culture Secretary.

[Mr Denis MacShane (Rotherham) (Lab)]

May we have an early debate on nannies? I think the Leader of the House is now beyond the nanny-using stage of his life, but for many of us he is a kind of generous nanny within the House. However, as I speak, in Geneva, British representatives, instructed by the Prime Minister, are seeking to vote against a vital International Labour Organisation convention to protect domestic workers, and we are the only democracy so to do. This is not a matter for Department for Business, Innovation and Skills questions; it goes to the heart of this Government and, as with the EU trafficking directive, their contempt for international conventions to protect the most weak and vulnerable in our nation.

[Sir George Young]

We did, of course, sign up to the EU trafficking convention. I think the right hon. Gentleman’s question is the same as that asked a few moments ago by his party colleague, the hon. Member for Gedling (Vernon Coaker), in answer to which I undertook to raise the concerns with my right hon. Friend the Business Secretary, who has responsibility for these matters, and then to communicate that answer to the hon. Gentleman. I will send that response to the right hon. Gentleman as well.

[Gavin Williamson (South Staffordshire) (Con)]

Will my right hon. Friend support me in getting Ministers to answer questions on the dreadful treatment of my constituent, Julie Roberts? She has worked for Royal Mail for 21 years in the villages of Seisdon and Trysull. She recently had her mail van stolen. She immediately jumped on to its bonnet and held on for a mile while the thief tried to make a getaway. She was able to get the van stopped, and regain control of the vehicle. How does Royal Mail treat this lady? It suspends her, and she is under threat of losing her job. People in South Staffordshire want her back in work and Royal Mail to show some common sense and common decency.

[Mr Speaker]

I am unsure whether that is a request for a statement or a debate.

[Sir George Young]

Julie sounds like a courageous lady who was doing her best to defend Royal Mail property, and I will certainly draw my hon. Friend’s remarks to the attention of the Royal Mail chairman, and make sure this lady is recognised, if appropriate, rather than penalised.

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

It used to be the case that after the G8 summit the Prime Minister would make an oral statement to the House, which would allow us to question him on what he had done on the nation’s behalf, but we appear not to be having such a statement this year. Will the Leader of the House ensure that we reinstate this practice in future years, and not just for the G8 summit coming up shortly in the year that cannot be mentioned, but for other events such as the G20 summit, so we can properly hold the Government to account on what they do on our behalf in the international arena?

[Sir George Young]

My right hon. Friend the Prime Minister has made more statements from the Dispatch Box than his predecessor and has reported after most major conferences, and he is more than happy to hold himself to account. I will make some inquiries, including about the particular point the hon. Gentleman mentioned, but my right hon. Friend is certainly more than prepared to come to the House and answer questions after major international conferences.

[Mr David Nuttall (Bury North) (Con)]

May we have a statement on the continuing debt crisis in the eurozone and its effect on our International Monetary Fund contributions?

[Sir George Young]

I think my hon. Friend might be referring to a wholly misleading article that appeared in The Sun this morning. A resolution referring to our contribution to the IMF is before the House, and it will go upstairs to a Committee. The move to increase the IMF’s resources was first agreed by the G20 in April 2009, which was before any eurozone support, and I am sure the proposition will receive the attention it deserves from the House.

[Joan Walley (Stoke-on-Trent North) (Lab)]

Further to today’s written statement from the Department for Environment, Food and Rural Affairs saying that the Government will extend buying standards for food and catering across Whitehall, may we have a debate on such regulation? We need a national framework that applies to all public sector bodies, and it is wrong for hospitals to be excluded, particularly when we have made so much progress in the fish campaign.

[Sir George Young]

I commend the campaign. The next DEFRA questions will take place a fortnight from today, but in the meantime I will see if I can get an answer to the hon. Lady’s point.

[David Rutley (Macclesfield) (Con)]

Community groups play a vital role in helping to regenerate town centres and in attracting people to them by holding events such as the Barnaby festival, which will take place this weekend, and to which all Members are welcome. Will my right hon. Friend consider holding a debate on the important role community groups play in the regeneration of town centres, and will he join me in wishing the Barnaby festival every success this weekend?

[Sir George Young]

I am sorry that I cannot attend the Barnaby festival, but I am sure my hon. Friend will be present. This is an example of the big society in action. It is an opportunity for the community to come together and celebrate its history, and to promote Barnaby. I hope that the Barnaby festival will create opportunities for further regeneration and renewal, and I wish it every success this weekend.

[Kevin Brennan (Cardiff West) (Lab)]

On recommittal of the Health and Social Care Bill, why should not all Back-Bench and Front-Bench Members of any party have as much opportunity as the Government to table amendments, and to any part of the Bill they choose?

[Sir George Young]

They will have exactly that opportunity when the Bill reaches its Report stage; any Member will be able to seek to amend any part of the Bill when it comes back to the House on Report.

[Mr Peter Bone (Wellingborough) (Con)]

Saturday marks the 196th anniversary of the battle of Waterloo. May we have a statement from the Leader of the House on what plans are in place to mark the day when Britain, led by a future Conservative Prime Minister, defeated the French and ended their domination of Europe—and is there any likelihood of history repeating itself?

[Sir George Young]

One of my ancestors, Admiral Sir George Young, was a contemporary of Nelson, so I have a particular interest in my hon. Friend’s question. I will refer the matter to my right hon. Friend the Secretary of State for Defence, in order to find out whether there are any proposals to commemorate this important anniversary.

[Ian Mearns (Gateshead) (Lab)]

Will the Leader of the House consider finding time for a debate on the proposed sale of Northern Rock? I understand that the Treasury has this morning told reporters that retention of the Northern Rock Foundation, which does important big society work in the north-east of England, will not be a condition of the sale, which is a great concern to many of my constituents, and to people across the north-east of England.

[Sir George Young]

I have had a very quick conversation with my hon. Friend the Financial Secretary to the Treasury, who is sitting beside me, and I understand that he has the answer to the questions the hon. Gentleman has just posed somewhere in his red folder.

[Angie Bray (Ealing Central and Acton) (Con)]

Later this afternoon, a plaque is being unveiled at the excellent Brentham club in Ealing to commemorate Fred Perry, who started his tennis career there. Does the Leader of the House agree that we want more of our young tennis players to get into the top rankings and that it might be helpful to spend some time in a debate working out how we can help to achieve that?

[Sir George Young]

I have happy memories of the Brentham club, which used to be in my Ealing constituency, and I am delighted to hear of the event commemorating Fred Perry. I also have happy memories of the Ealing lawn tennis club, which I hope is also surviving. I would welcome a debate on sport and how we might do more to encourage young people, not only in tennis, but in other activities. I very much hope that 2012—I hope I may mention that date without getting into serious trouble—will provide an opportunity to raise the profile of sport and encourage more young people to get involved.

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

May we have a debate on the decision that the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker) took this week to increase the Humber bridge toll to £3 per car per crossing, which is now the most expensive in Britain? The decision was taken without waiting for the Treasury’s review on bridge tolls. Such a debate would allow us to discuss what this will mean for the regeneration of the Humber bridge area.

[Sir George Young]

The hon. Lady will know that in a week’s time that Minister will be at this Dispatch Box, ready, willing and able to answer questions about the Humber bridge toll.

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

May we have a debate about unemployment and jobs growth? Yesterday’s jobs figures showed a substantial increase in private sector jobs growth in the last quarter, which is of vital importance to my constituency, as it needs to get more, sustainable private sector jobs.

[Sir George Young]

My hon. Friend reminds the House of the very encouraging set of figures we saw yesterday, which showed that there were an extra 500,000 jobs in the private sector, more than counterbalancing any decline in the number of public sector jobs. Particularly good news was the decline in youth unemployment—that is now at a lower level than we inherited from the outgoing Government.

[Mr Philip Hollobone (Kettering) (Con)]

Given that the demand for Adjournment debates in Westminster Hall regularly outstrips supply, could we have sittings in Westminster Hall on Monday afternoons and Thursday mornings?

[Sir George Young]

That is an ingenious suggestion. As my hon. Friend will know, the Procedure Committee is examining the calendar. His proposition would certainly be within the terms of reference and I am sure that he has given evidence along those lines.

[Alun Cairns (Vale of Glamorgan) (Con)]

The Chancellor has talked about the need for a cultural change in banking regulation, given the failed system that was set up and led by the previous Administration. What plans does the Leader of the House have to allow a full debate on these issues, given that a White Paper has been published?

[Sir George Young]

That debate will be initiated in a few moments’ time by my hon. Friend the Financial Secretary to the Treasury, who will make a statement. My hon. Friend the Member for Vale of Glamorgan (Alun Cairns) is right to say that we need to reform the financial services regime, which manifestly failed, if the City is to continue to be a centre of wealth, enterprise and encouraging employment. I hope that he will remain in his place for a few minutes longer, so that he can get a more authoritative reply from the Financial Secretary.

[Harriett Baldwin (West Worcestershire) (Con)]

As this is carers week, may we have a debate on the support for carers? I understand that the chief executive of Carers UK has welcomed the fact that the carer’s allowance will remain non-means-tested outside the universal credit. In that debate, we could discuss the extensive additional support that the Government are putting into respite care for carers.

[Sir George Young]

My hon. Friend rightly reminds us that this is carers week. Tomorrow, I will be at the Princess Royal Trust for Carers’ Andover branch, praising those carers, who save this country a huge sum. My hon. Friend is also right to say that we have found additional resources for respite care for parents of disabled children and also for others via the NHS. We have also ring-fenced the carer’s allowance, so that it is not subsumed within universal credit.

[Robert Halfon (Harlow) (Con)]

Will the Leader of the House find time for a debate on harsh practice by the Royal Bank of Scotland? Louisa Allen is the latest of my constituents to be treated very toughly by RBS, which is risking an unnecessary court case and threatening her with bankruptcy even though she has the funds to pay for a reasonable settlement. Will my right hon. Friend speak to the chairman of RBS to see what can be done?

[Sir George Young]

I will certainly convey what my hon. Friend has just said to the chairman of RBS. My hon. Friend will know that under Project Merlin a clear commitment was given to increase bank lending. Although the banks are on target to hit the overall figure of some £190 billion, they are falling a bit behind on the small and medium-sized enterprises side of things. We made it clear that we reserve the right to return to the issue and take further measures should that be necessary. Not only will I pursue the matter with RBS, but the Financial Secretary has heard the question.

[Bob Blackman (Harrow East) (Con)]

Can my right hon. Friend find time for a debate on energy policy and the performance of the regulator? Like my constituents, I am fed up to the back teeth of a situation where the retail price of gas increases when the wholesale price does, but never comes down when the wholesale price drops. We clearly need urgent action on this because it is combating our work on our inflation targets.

[Sir George Young]

I understand my hon. Friend’s concern that retail prices go up faster than they come down. Hon. Members will have an opportunity to question Ministers from the Department of Energy and Climate Change on 7 July, so this question can be raised then. I know that this is concerning many hon. Members as we read about fuel prices increasing. We have introduced a number of measures to help, including the green deal, which is going through the House.

[Mr Mark Spencer (Sherwood) (Con)]

The community of Ollerton has for a number of years been seeking to redevelop its former miners’ welfare building. The project is being held up by the siting of a communications mast, which is the property of a company called Cornerstone, a subsidiary of Vodafone. Will the Leader of the House find time for a debate to discuss the power of communications companies to hold communities to ransom over projects such as this?

[Sir George Young]

I would be misleading my hon. Friend if I said that I could find time for such a debate, but it does sound to be a worthwhile subject for an Adjournment debate. I am sure that other Members of Parliament have similar concerns to those that he has outlined. I will draw his concerns to the attention of the Minister with responsibility for planning and Ministers at the Department for Culture, Media and Sport.

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

May we have a debate on the progress being made by the Government on the essential rebalancing of, and restoring of health to, our economy? Will my right hon. Friend ensure that Ministers have time in that debate to address the warnings issued last night by the Governor of the Bank of England that changing the mix of tight fiscal and loose monetary policy would “make little sense”?

[Sir George Young]

I entirely endorse what my hon. Friend has said and, indeed, what the Governor of the Bank of England said last night, which makes it all the more extraordinary that we heard a speech this morning demanding yet further tax cuts that are wholly underfunded.

[Andrew Stephenson (Pendle) (Con)]

Will the Leader of the House grant us a debate on the Independent Commission on Banking report and the specific proposal for more competition in the retail banking sector, so that healthy competition can be a powerful defender of the interest of consumers?

[Sir George Young]

As I said to one of my colleagues a few moments ago, there will be an opportunity after the Financial Secretary has made a statement for questions about our proposals to maintain the City of London as a thriving centre of enterprise that concentrates on serving its customers. There will be an opportunity to question the Financial Secretary on the ICB’s proposals.

[Brandon Lewis (Great Yarmouth) (Con)]

Will my right hon. Friend find time for an urgent debate on trade union reform laws, in order to give this House a chance to discuss the appalling way in which unions such as the Public and Commercial Services Union are threatening this country with strike action? That is happening even though that union had a turnout of only just over 32% in its ballot.

[Sir George Young]

Indeed, under 20% of that union’s members actually voted for industrial action. So far, we have had a good record on days lost through industrial action—the level has been one of the lowest. As of now, we have no plans to reform trade union legislation, but if we see a wave of irresponsible strikes, we would want to re-examine this again very carefully.

Regulatory and Banking Reform

Thursday 16th June 2011 Commons Chamber

13:18

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

With permission, Mr Deputy Speaker, I should like to make a statement.

It is now well known that the tripartite system set up by the last Government failed spectacularly in its mission to maintain stability. The decision to divide responsibility for assessing systemic financial risks between three institutions meant that, in reality, no one took responsibility. The crisis dramatically exposed that flaw and cost the taxpayer a vast amount of money. We cannot allow another crisis such as the one we have just witnessed. Shortly after taking office, this Government set in train a consultation on reforming our system of financial regulation. Today, after two extensive rounds of consultation, I am presenting to the House a White Paper, including draft legislation, setting out the blueprint for a completely new system of regulation. Let me summarise the main proposals.

A permanent Financial Policy Committee will be established within the Bank of England. Its job will be to monitor overall risks in the financial system, to identify bubbles as they develop, to spot dangerous inter-connections and to stop excessive levels of leverage before it is too late. It has already started operating on an interim basis and is having its first formal meeting today. Subject to legislative process, the permanent body will be in place by the end of next year.

We will abolish the Financial Services Authority in its current form and transfer its significant prudential functions to a new Prudential Regulatory Authority that will sit in the Bank of England. The Prudential Regulatory Authority will focus on microprudential regulation and will bring judgment to the vital task of regulating the soundness of individual firms that manage risk on their balance sheet, particularly banks and insurance companies. We recognise, of course, that such firms engage in very different businesses, which is why we are proposing to provide the PRA with a specific statutory objective for its insurance responsibilities.

We are also bringing in a new approach to protecting consumers. A financial conduct authority will oversee the conduct of financial services firms, the operation of markets and the protection of consumers, with new powers to ban the sale of toxic products. I can confirm that as an integral part of its mission to secure better outcomes for consumers and investors, the authority will also have a new duty to promote competition. Judgment, discretion and proactive intervention will be the hallmark of our new regulators.

We are bringing forward the draft Bill for pre-legislative scrutiny, for which a Joint Committee of both Houses will shortly be convened. We are seeking valuable input from Members on both sides of the House as it is in all our interests to get this right.

Last week, we also established under Sir John Vickers an Independent Commission on Banking to resolve the debate about the structure of the banking sector in the UK. I am sure that the whole House will join me in paying tribute to Sir John and his fellow commissioners for the excellent job they are doing. The commission’s interim report made two particularly important proposals: bail-in, not bail-out, so that private investors, not taxpayers, bear the losses when things go wrong; and a ring fence around better capitalised high street banks to make them safer and protect their vital services to the economy if things go wrong. I can confirm that the Government agree in principle with both proposals.

Of course, we will await the commission’s final report, but I can tell the House that any reforms will need to meet the following principles: all banks should be allowed to fail safely without affecting vital banking services, without imposing costs on the taxpayer, through reforms that are applicable across our whole banking industry and in a manner consistent with EU and international law. I can also confirm today that we welcome the commission’s recommendations on increasing competition in retail banking and we are working closely with it to achieve this aim.

We are also taking the first steps towards normalising the Government’s involvement in the financial sector. One legacy of the crisis is that today’s taxpayers have a direct interest in several banks through large-scale guarantees and shareholdings. We do not believe the Government should be a long-term investor in financial institutions. It will take some time—possibly several years—before we can make a complete exit from our investments in the banks, but today I can confirm the start of that process.

On the advice of UK Financial Investments, we have decided to launch a sale process for Northern Rock. This follows extensive work over the past three months to consider potential options for returning Northern Rock to the private sector while generating the best possible taxpayer value. The sale process will be open and transparent and in line with state aid rules. I have already written to the chair of the all-party group on building societies and financial mutuals, my hon. Friend the Member for Cardiff North (Jonathan Evans), to reassure him that any interested parties can bid for it, including mutuals. This reaffirms the Government’s commitment actively to promote the mutuals sector. That does not mean that other options to return Northern Rock to the private sector have been ruled out, but I believe that at this point in time a sale process is the most promising.

I also want to make the House aware that following an application by the Bank of England to the High Court today, Southsea Mortgage and Investment Company Ltd, a very small bank, has been placed into the bank insolvency procedure. That follows a decision by the FSA that Southsea no longer satisfied its threshold conditions for operating as a deposit taker. The Financial Services Compensation Scheme has been triggered and eligible depositors with balances up to the limit of £85,000 are safeguarded. Eligible depositors with amounts in excess of the insured limit of £85,000 may be entitled to receive a share of their savings above this limit as part of the insolvency process.

Finally, I want to update the House on the ongoing negotiations on international financial regulation. When I was in Brussels yesterday, my message was clear. We must learn the lessons of the crisis and create the foundations for stable and sustainable economic growth without fragmenting global markets. That is why global standards are in our national interest. Much of the debate has focused on the implementation of Basel III and we have been busy making the case for implementing it in full right around the world, including here in Europe. Last week’s International Monetary Fund assessment supported our arguments for minimum standards here in the EU, with discretion for national authorities to increase them where necessary.

When the coalition Government came into office, questions were being asked about the future of banking and regulation but they had not been answered. It has been our job to resolve them. Our goal should be a new settlement between our financial system and the British people; a new settlement where the banks support the people, instead of the people bailing out the banks. The statement today sets out the progress we have made towards building this new settlement and the actions we are taking to complete it and I commend the statement to the House.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

What utter contempt the Government are showing to Parliament by announcing these major proposals first to the bankers in the City yesterday and only today to elected representatives. Time and time again, Ministers give policy speeches outside this place and the House of Commons is merely an afterthought. Why is the Chancellor not here to make these announcements today?

That total disregard for the democratic process is reflected in the draft legislation, which hands vast new powers over the lives of all our constituents to the unelected Bank of England and leaves a gaping accountability deficit, with no mention of parliamentary accountability in all its 408 pages. Why are Ministers still so sketchy about the detail of these new powers for the Bank of England, with nothing on the face of the Bill, and is it true that there may be no further clarity on the toolkit for the Financial Policy Committee until next year?

Why is there still no clarity about the crisis management memorandum? Why have the Government not yet published the consolidated Financial Services and Markets Act 2000 draft for Parliament to see? Why is there no clarity about where consumer credit regulation will fit into this alphabet spaghetti of new quangos? Why are they still fumbling around with the composition of the Financial Policy Committee? Why have they failed to negotiate the flexibility needed from the European Union and the European banking regulators to ensure that all these new UK structures are allowed discretion to use the macro-prudential tools in the first place?

There will be significant concern, especially in the Portsmouth area, about the news on the Southsea mortgage bank—Southsea is perhaps a name that resonates in other ways—but we will need to watch developments closely.

Although there are clear inadequacies in the proposals published today, we will consider them carefully, and there are areas where we agree with the Government. The Chancellor is right that this was not a financial crisis made in Britain. It was caused by a failure in the banking industry in every major financial centre and a global failure in banking regulation. Families and businesses worldwide have paid a heavy price for the irresponsible actions of the banks, but Governments and regulators failed to see this coming and we in the Opposition must accept our part in that. Thankfully, however, we ignored the advice of the Chancellor, who called for lighter regulation and opposed the previous Labour Government’s decisions to step in to prevent financial catastrophe by nationalising Northern Rock and Royal Bank of Scotland and by cutting VAT to get the recovery moving.

Today’s announcement vindicates the rescue measures taken by my right hon. Friends at the time and shows that taxpayers always had a good chance of recouping the lion’s share of the sums involved. But on Northern Rock, can the Minister explain the haste in the sale? We hope he is not playing politics and rushing for a fire sale when a measured approach to maximising value and diversifying the banking system would be better. Why has the Treasury failed to consider mutualising Northern Rock and is the Minister really content to see it return to business as usual as yet another plc without exploring the benefits that a new building society might bring?

There are three tests by which the Chancellor and the Minister should be judged. First, are taxpayers and bank customers adequately protected from future bail- outs by the so-called firewalls in the bank structures? How can the Chancellor say he agrees with the conclusions of the Vickers Banking Commission before it has even published its final report?

Secondly, has the Minister secured sufficient international agreement on regulation and bank restructuring to secure a workable system protecting jobs here in Britain? Sadly, the Treasury has already shown a woeful lack of leadership internationally on pay transparency and bankers’ bonuses, which, by the way, should be taxed to pay for jobs and businesses here at home.

Thirdly, will we end up with a banking system that delivers the goods for our economy as a whole? Are small businesses getting the bank loans they need and why is Project Merlin already unravelling with confusion between the Department for Business, Innovation and Skills and the Treasury over so-called “stretch” targets, or capacity targets, how they are going to be enforced and whether the banks are really participating wholeheartedly? We need a diverse banking system, which should include a strong mutual sector—something that was promised in the coalition agreement but that the Government seem uninterested in delivering. We need clear and comprehensible regulatory structures with far clearer lines of accountability, and we need a Government who put customers, taxpayers and the real economy first.

[Mr Hoban]

That response clearly demonstrated the emptiness of the Opposition’s thoughts on these matters. They have had a year to consider whether these reforms are in the interests of strengthening financial regulation and whether they will strengthen the banking system, but here they are today, a year later, with no idea on the best way to proceed. That is not surprising given that the shadow Chancellor was a champion of light-touch regulation when he was the City Minister and he presented that argument not just in London but across the world. It is time for the Opposition to make their mind up: are they prepared to acknowledge the mistakes of the past and accept the tougher regulatory regime we have proposed, or are they going to cling to the legacy and wreckage of the previous Government’s financial regulation system?

Let me deal with one or two of the points that the hon. Gentleman raised. It has been clear from the outset that one of the roles of the interim Financial Policy Committee, which is meeting formally for the first time this afternoon, is to provide advice to the Treasury on the macro-prudential tools that it believes would be appropriate for the FPC. Until the interim FPC has concluded its work it is very difficult to give the House information on that, but what we are doing in the Bill is making sure there is a process in place to ensure there is consultation and that there is discussion in the House. Those tools will not be given to the Bank until we have gone through a legislative process in this place.

The hon. Gentleman raised the issue of Northern Rock. As someone who was born and brought up the north-east, I understand his concern and the importance of Northern Rock to the regional economy. We have, as part of our review, considered remutualisation and our financial adviser Deutsche Bank is reporting to UK Financial Investments on Northern Rock. The advice is to proceed in the first instance with a sale option and the option of remutualisation has been explored with Co-operatives UK and the Building Societies Association, which commissioned the report by Professor Michie. The final decision will be judged against such other options as an initial public offering or a stand-alone remutualisation, but I remind the Opposition that it is important to secure taxpayers’ interests, as we have invested £1.4 billion in Northern Rock.

On the Independent Commission on Banking, we have indicated that we would support the proposal, but we have said that we want to see the final proposal that Sir John Vickers makes. We have dealt with an issue that the previous Government failed to tackle. They closed down the topic of whether there were some structural issues in the UK banking sector that put taxpayers at risk. They were not prepared to confront that debate, but this Government have been prepared to do that and to take some serious and difficult decisions on that matter.

On the issue of bank lending, it is all very well the hon. Gentleman preaching, but the previous Government did not in any way attempt to get the big banks together to talk about increasing lending to small businesses. As the banking sector and the economy deleverage, it is important that those businesses seeking finance have that opportunity. That is why we secured commitments from the banks, and they are held to account on the published targets that were announced earlier this year. The package of measures we have announced demonstrates the progress we are making towards a new settlement on financial regulation and banking, and it is a pity that the Opposition are not prepared to face up to their responsibilities and take part in this debate.

[Mr Peter Bone (Wellingborough) (Con)]

I thought that the shadow Minister let the Government off far too lightly regarding Parliament. This place should hear new policy from the Government first. Yesterday, this was published by the BBC first and was then announced at Mansion House. I am afraid that the Government have failed on this occasion. Will the Minister please publish the media grid?

[Mr Hoban]

I would just point out to my hon. Friend that last night the Chancellor did not read out the White Paper—the blueprint for reform that we have before us today. That is the centrepiece of today’s announcement. We have engaged fully with Parliament on this and he will be aware that what we are doing is starting a process of pre-legislative scrutiny to ensure that Members across the House can take part in debate on this. Throughout this whole process, we have sought to keep Parliament informed of the actions we are taking and to ensure that Parliament has a chance to scrutinise the decisions that the Government have made.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Northern Rock is headquartered in my constituency and my predecessor MP, Jim Cousins, played an important role in saving the bank when the Conservative party had no understanding of the crisis and would have let it go to the wall. Could the Minister explain how the auction will be structured so as to promote Northern Rock’s mutualisation, which he says he wishes to see? Could he also say what guarantees he will offer on the name, headquarters, jobs and community contribution of Northern Rock?

[Mr Hoban]

The hon. Lady raises some important points about how a potential bidder would seek to maintain employment in the north-east, how they would use the Northern Rock name and how the headquarters would be structured. That is a case that the bidders will need to make in putting together their bid. I would encourage all those who have an interest in bidding for Northern Rock to engage with the people of the north-east and present to them why they believe that their deal would secure the best future for Northern Rock and its employees.

[Sajid Javid (Bromsgrove) (Con)]

Drawing on my 19 years as a banker—[Interruption.] I was far more popular then than I am now. Drawing on that experience, may I say that the Minister has rightly identified some deep structural problems with the UK banking system? Although over the coming weeks and months he will hear some howls of protest from certain sections of the UK banking community, may I reassure him that the principles he has outlined today will lead to a safer and more stable UK banking system?

[Mr Hoban]

I am grateful to my hon. Friend for his support. I am not quite sure at times which is the more popular profession, MP or banker, but he has experience of both. He is absolutely right that we need to stick to our course on this. There are some important issues that we need to tackle to make sure that the banking system is safer, to improve the regulatory structure and to ensure that the style of regulation is much more interventionist and proactive than in the past. That will doubtless cause some institutions some difficulty, but we have to recognise that it is in the long-term interests of the stability and sustainability of our economy for there to be better regulation of the banking sector and the financial services sector more broadly.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The Government set up the Independent Commission on Banking last year. The commission produced its interim findings in June and its final recommendations will not come out until September, but the Chancellor yesterday in his Mansion house speech and the Financial Secretary today in this Chamber have pre-empted two of those decisions, although it was made clear by the commission that it had not reached its final conclusions. Do not the Government owe an apology to members of the commission of inquiry?

[Mr Hoban]

Is that it? I really did wonder. The hon. Gentleman has played an important role in the Treasury Committee in challenging both this Government and the previous Government and holding them to account on banking reform and I should have thought he would welcome the fact that we are taking action to strengthen regulation of the banking system and to make sure that our banks are more secure. It would have been great if he had supported those measures.

[Mr Brian Binley (Northampton South) (Con)]

I welcome the Minister’s statement, but may I remind him that the reorganisation of the regulators or, indeed, of the banking structure will do little to stimulate demand quickly? Mortgages were down 9% in April on the same period last year and other sectors are seriously under pressure. Will the Government think more seriously about stimulating demand?

[Mr Hoban]

My hon. Friend makes an important point and one reason why it was important to reach agreement with the banks on Project Merlin was to send a clear signal to businesses that there was credit available to viable businesses, as well as encouraging businesses to come forward to banks with applications for loans. Also important is the work that the British Bankers Association taskforce is doing to commission an independent survey to look at the relationship between banks and their customers. One concern is the amount of discouraged demand in the system and I believe that by looking very carefully at the relationship between banks and their customers, we can see whether banks are putting off businesses from making those applications.

[Ian Mearns (Gateshead) (Lab)]

I listened with care to the Minister’s statement, but he has not mentioned the Northern Rock Foundation, which has disbursed millions to deserving causes in the north-east over several years. That disbursement is about 1% of profits, yet Treasury officials told a reporter from Newcastle’s Evening Chronicle this morning that the retention of the Northern Rock Foundation will not be a condition of sale. How will the big society survive in a region such as the north-east, let along thrive, without such a guarantee?

[Mr Hoban]

The hon. Gentleman raises an important point, and I am pleased that he gave prior notice during business questions. We all recognise, particularly those of us with strong roots in the north-east, the important work that the Northern Rock Foundation has done not only in the north-east, but in Cumbria. An agreement was reached that Northern Rock would continue to contribute 1% of its profits to the foundation between now and December 2012, but I am sure that any bidder looking for support from the north-east will think very clearly about the role that the foundation will play in future.

[Mr Mike Hancock (Portsmouth South) (LD)]

Will the Secretary of State give an assurance to the House and to the country that the sell-off of Northern Rock will not proceed unless there is absolute certainty that every penny of taxpayers’ money that was put into it will be recouped, plus interest, and that the proposed transformation of the banking system will begin to give people some trust in the system again?

[Mr Hoban]

My hon. Friend makes two important points. In the process of selling Northern Rock and returning it to the private sector, we are seeking to get the best possible deal for the taxpayer, given the investment we have put in so far. He is absolutely right that one of the challenges is to restore trust and confidence in the banking system, which has taken a blow in recent years for a range of reasons, including the mis-selling of payment protection insurance and the financial crisis itself. There is a big challenge for banks. The best way that they can establish trust and confidence is by demonstrating to the people of this country that they are doing what they should be doing, which is helping families and businesses realise their full potential by ensuring that credit is flowing to our businesses and that our constituents have opportunities to buy their own homes.

[Mr Kevan Jones (North Durham) (Lab)]

The Minister, who knows the north-east very well, will be aware that when Northern Rock was a building society it was a highly respected institution, not only because of its prudent lending, but because it was the first choice for many small savers. Although he reaffirmed in his statement the Government’s commitment to mutualisation, will he not be straight with the people of the north-east and say quite clearly that mutualisation is not an option and that Northern Rock will be privatised, as was spun out in the newspapers this morning?

[Mr Hoban]

As I said earlier, re-mutualisation is an option. The advice we have received is to proceed with the sale process, which could be to a proprietary business or another mutual. Once that process is under way, we will be able to compare that outcome with the other two possible outcomes, which are an initial public offering or a stand-alone re-mutualisation. I am keen that United Kingdom Financial Investments engages with this, as it has done already, to see whether that is a viable option.

[David Rutley (Macclesfield) (Con)]

I welcome the Chancellor’s move to put an end to the failed tripartite model. What steps will be put in place to enhance the working relationship between the Treasury and the Bank of England, given the Bank’s enhanced role?

[Mr Hoban]

My hon. Friend makes an important point, and one that the hon. Member for Nottingham East (Chris Leslie) noted in his remarks. It is absolutely vital that the Bank has a good and robust relationship not only with the Treasury, but with this House. I think that we all agree that the relationship between the Treasury Committee and the Monetary Policy Committee, for example, is one of the most transparent between any central bank and any legislature across the world. We want similar standards of transparency and openness to apply in the relationship between the FPC and the House.

The White Paper sets out how the relationship between the Treasury and the Bank will be strengthened and how the Governor will meet the Chancellor to discuss the outcome of the financial stability review. We are also in the process of developing a crisis memorandum of understanding to ensure that the proper channels of communication are open between the Treasury and the Government. That is a much better set of arrangements that will ensure that the House is kept informed and that we can hold the Bank to account for its new responsibilities.

[Mr Iain Wright (Hartlepool) (Lab)]

Is there not an inherent contradiction in Government policy? On the one hand there is stricter ring-fencing of banks’ capital reserves, and on the other there are the Business Secretary’s proposals, via Project Merlin, for banks to lend more to small businesses. Who will win this battle of economic policy—the Chancellor or the Business Secretary?

[Mr Hoban]

There is no dispute between the two. It is very clear that we need banks to hold more capital and, based on the work done at Basel III on the implementation of the higher level of capital, that should not restrict the amount of credit available. Yes, we need to see banks deleveraging and reducing the size of their balance sheets, but that should not be at the cost of businesses in our constituencies and across the country that need capital in order to grow and expand. Banks should be reducing their lending to each other, rather than reducing the exposure to businesses in this country.

[Mrs Anne Main (St Albans) (Con)]

I welcome the Financial Conduct Authority if it genuinely gives consumers greater protection. Under the current regulations, a constituent of mine, Mr Joseph Choonos, was pressured into taking out a Barclays loan in the most inappropriate way by a course provider, which then dumped the course. Barclays is now pursuing him dreadfully for the loan, which he has no way of paying back. He has no way of having a good dialogue with Barclays. If the proposals help vulnerable consumers in any way, I will be truly grateful.

[Mr Hoban]

I cannot comment on the case my hon. Friend raises, but we have corresponded about it. We need to see better outcomes for consumers of retail financial services. As she may be aware, we are also consulting on the future regulation of consumer credit and will announce our response to the consultation proposals shortly. One of the challenges we face is the disjointed regulation of consumer financial services. Credit, in the situation she raises, is regulated by the Office of Fair Trading, and other aspects of financial services are currently regulated by the Financial Services Authority and, in future, the Financial Conduct Authority. Whatever body is the regulator, we need to see better outcomes for our consumers, which will help to restore the trust in regulation that we all recognise is so vital.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

Further to that point about the powers of the Financial Conduct Authority, will the Minister clarify whether it will have oversight of the consumer credit market, particularly the high-cost credit market, which is a source of concern for many Opposition Members? Perhaps he will take the opportunity to confirm whether the FCA’s powers of intervention could include capping the total cost that lenders can charge for lending where it is detrimental to consumers so that we can deal with the toxicity of the legal loan shark market.

[Mr Hoban]

The hon. Lady will have an opportunity later this afternoon to quiz me on this in more detail as we are meeting to discuss it. She will recognise that credit, particular the high-cost credit to which she refers, is currently regulated by the OFT, not the FSA. We will announce shortly our response to the consultation on who should regulate consumer credit in future.

[Joseph Johnson (Orpington) (Con)]

Many of my constituents depend on the existence of a thriving financial services industry in London. They are hard-working, responsible and diligent employees and not at all deserving of the opprobrium that is often heaped on people who work in the sector. Like Professor Willem Buiter of the London School of Economics, they are very much of the view that the financial crisis damaged London’s prestige and international standing much more than it did other leading financial centres around the world. Does the Minister share that view?

[Mr Hoban]

The financial crisis clearly had an impact on London’s standing as a global financial centre, but my hon. Friend will be pleased to note than in the most recent survey of global financial centres London still came top. That is a recognition of London’s continued strength. It is important to ensure that we have a well-regulated and well-functioning financial services sector that can not only meet domestic demand, but serve the interests of an array of international companies. I believe that the package we have announced today, coupled with further regulatory changes being made in the European Union and internationally, will help to ensure London’s continued pre-eminence as a centre for financial services.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Before the general election, the Chancellor and the Business Secretary were involved in a verbal fistfight about who was going to be toughest on the banks, so it is not surprising that neither is here today to make this business-as-usual statement. If the previous Government were charged with light-touch regulation, are not this Government guilty of light-touch reform?

[Mr Hoban]

The reforms we have set out are proportionate, and the recognition of the need to strengthen the banking sector through structural reform is a significant move. We, unlike many other economies, were exposed to a financial sector challenge of some scale, and it is right to respond to that. We have ensured a proper debate about those issues, which the Independent Commission on Banking has led, and the reforms announced in its interim report have been widely welcomed. That gets the balance right. It is not about being tough or about being light touch; it is about getting things right.

[Steve Baker (Wycombe) (Con)]

Do the Government agree that the best form of regulation is exit from the market? Does the Financial Secretary agree with me and my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) that there should be a primary duty on the regulator to promote competition?

[Mr Hoban]

My hon. Friend makes an important point about exit. One area on which we are all working, not just in the UK but elsewhere, is to ensure that, when an institution fails, the matter can be resolved and that the resolution can take place without an impact on the taxpayer. That will help with competition and to tackle the broader issues, whereby taxpayers have to stand behind banks. We need to get that right.

On competition, we need to recognise that the role of regulation in financial services is quite broad. Some of it is about promoting competition, and some of it is about consumer protection when there are asymmetries of information. In the blueprint that we have published today, we see an acknowledgement of the role that competition will play, and that is why we have given the Financial Conduct Authority a primary duty to use competition in pursuit of its regulatory objectives. That gets the balance right between the different roles that the FCA has to play.

[Keith Vaz (Leicester East) (Lab)]

In three weeks’ time, 5 July marks the 20th anniversary of the closure of the Bank of Credit and Commerce International. The Minister on that day 20 years ago was a young accountant working for Price Waterhouse, the much-criticised auditors of BCCI. For 20 years, the bank has been in liquidation and for 20 years we have been asking for the publication of the confidential parts of the Bingham report, which, as the Financial Secretary will know, was the basis on which we had the system of regulation that he has just changed. Is he absolutely certain that the best way of dealing with these matters is to hand them back to the Bank of England? If he is, will he please do what the previous Government failed to do and ask the Chancellor to publish the confidential parts of the Bingham report?

[Mr Hoban]

I hear the right hon. Gentleman’s request, and his right hon. Friend the Member for Edinburgh South West (Mr Darling) has made a similar request, to which he did not seem to accede when he was Chancellor of the Exchequer. The new regulatory regime does learn the lessons of the past, and the supervisory style and confused mandate of the FSA mean that we need to change.

The lesson that we have learned from the financial crisis is that, importantly, the Bank of England’s expertise in market surveillance and in understanding macro-prudential trends can best work with the needs of a micro-prudential supervisor by ensuring that that micro-prudential supervisor is an independent subsidiary of the Bank. And, just so the right hon. Member for Leicester East (Keith Vaz) does not get the wrong impression, I did not work on the audit of BCCI.

[Mark Garnier (Wyre Forest) (Con)]

My hon. Friend will know that the financial services industry in this country employs some 1 million people and generates £50 billion a year in tax revenues. Will he assure me that these proposals strike the right balance between protecting the consumer, whom the Financial Services Authority failed so much, and maintaining our leading position in the global financial marketplace?

[Mr Hoban]

My hon. Friend is absolutely right to highlight the numbers of people employed in financial services not just here in London, or in Edinburgh and Glasgow, which are well-known financial services centres, but throughout the country. We need to ensure that the industry continues to be a strong contributor to employment, to economic growth and to tax revenues, and to ensure a balance so that it does not pose an excessive risk to the strength of the UK economy. The measures that we have put forward today strike the right balance between encouraging the industry to continue to be a wealth and employment creator and ensuring that the right protections are in place for consumers, so that they buy the products that those companies sell. Those companies will not thrive unless there is consumer appetite for buying pensions, for investing in their futures, for taking out deposit accounts and for buying life insurance policies. We need to get that balance right between consumer interest and business interest, but businesses will be best served if consumers feel happy about buying products from them.

[Toby Perkins (Chesterfield) (Lab)]

The Minister rightly says that a key part of the recovery of the banking sector’s reputation is an increase in the public’s confidence in the system, and he is putting a lot of power and confidence in the role of the Bank of England. What specific new powers will the Bank have to enable more public confidence in a safer banking system in future?

[Mr Hoban]

The Bank of England and the FSA published a couple of weeks ago a document setting out the new regulatory approach that the PRA will set. They were clear that, rather than waiting for a bubble to burst and for problems to emerge, they will intervene earlier to force firms to take action to correct problems, and that shift in style—from waiting for a problem to happen to trying to pre-empt its creation—is absolutely vital. We are reliant on the judgment and the discretion of the regulators in following through that new regulatory approach, but rather than waiting until it is all too late, as happened in so many different examples over the past 10 years, giving the regulator the power to intervene early will have a significant benefit on outcomes for our constituents.

[Mr David Nuttall (Bury North) (Con)]

I welcome the Minister’s statement. Does he agree that the best way to protect consumers is to have a fully functioning and competitive free market, and that the best way for the free market to work efficiently is, ultimately, for all companies, including banks, to be allowed to fail?

[Mr Hoban]

My hon. Friend makes an important point, which goes back to the point that my hon. Friend the Member for Wycombe (Steve Baker) made about exit from the financial system. That is why it is important that resolution tools are in place to enable firms to be wound up in an orderly fashion, rather than being reliant on taxpayers’ money to keep them going.

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

The Minister is well aware that savers are getting a very low interest rate, while for those who try to borrow there are high interest rates and unattractive terms—not just for individuals but for businesses. That must be stifling the economic recovery. The banks are not meeting Project Merlin’s targets, so should not the Government use regulation and their ownership of banks to address those issues?

[Mr Hoban]

The hon. Lady is absolutely right to say that it is important that banks lend to businesses. If the economy is to continue to recover and to pick up momentum, banks need to be able to lend. That is why we introduced the lending commitments under Project Merlin, and we will monitor them very carefully. We have said that we will not be afraid to use any tools at our disposal if those targets are not met.

[Paul Uppal (Wolverhampton South West) (Con)]

Continuing the theme of competition, and being mindful that the Vickers report will be published in September, will the Minister assure the House or provide guidance on how any future framework will provide genuine competition? In the US, in particular, banks fail without adverse publicity or at any cost to the public purse because there is a larger proliferation of smaller banks, and that would swim against the tide of mega-super-banks, on which we have been over-reliant.

[Mr Hoban]

My hon. Friend makes an important point about diversity in the financial system. One of the points that the Governor of the Bank of England made in his Mansion House speech last night was about the need to reduce the barriers of entry to the banking system in order to encourage more competitors to come forward. That is an excellent way in which we can promote choice and competition and get a better outcome for consumers, whether individuals or businesses.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I, like many hon. Friends, believe the Government’s decision to proceed so quickly with a sale process for Northern Rock shows that they are willing to miss a golden opportunity to learn the lessons of the financial crisis and diversify the UK banking sector. On remutualisation, will the Minister undertake to release all the advice he has received, information on all the meetings he has been to and all the rest of the paperwork, so that we can decide—Co-operative MPs such as myself, and other Members—whether remutualisation has been taken as seriously as it should have been?

[Mr Hoban]

The hon. Gentleman makes an important point. I reiterate what I said before. Yes, Northern Rock has been put up for sale. The purchaser could be a proprietary company or another mutual. An acquisition by another mutual could actually help strengthen the mutual sector. I have made it clear that as the sale process proceeds, we will compare the outcome with either an initial public offering or a stand-alone remutualisation. The challenge that those supporting a stand-alone remutualisation need to address is how we ensure that the taxpayer gets value for money from that.

[Nigel Mills (Amber Valley) (Con)]

Although I warmly welcome the long-term direction that the Government are taking, may I press the Minister a little further on the short-term problem of the regulators’ demands for banks to improve their balance sheets? That is leading to deleveraging, which is starving businesses of the funds that they need to provide the growth that we need. Is there any way in which we can force—or encourage, at least—the regulator to go against the cycle and, when times are tough, to be a little more relaxed and allow banks to lend more in these difficult situations?

[Mr Hoban]

My hon. Friend makes an important point. The Chancellor was very clear last night. Yes, we do want the banks to deleverage, but one way of doing that is to reduce their exposure to other banks and to the financial sector. That will give them the capacity within their capital, as they build up their capital levels, to continue to lend to small and medium-sized enterprises and larger corporates. That is one of the reasons why we set out to establish a commitment from the banks to lend up to £190 billion this year to businesses of all sizes, including £76 billion to SMEs. I think we have the right approach. We want a stronger, more sustainable banking system but we need one that will lend to small and larger businesses. Project Merlin helps us to achieve the right balance. We need the banks to deliver on that commitment.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

Does the Minister now regret having voted against the saving of Northern Rock?

[Mr Hoban]

The challenge is to make sure that we tackle the legacy that we have been left and that we get the banking system back on a firm footing. What we have announced today is a process in which the Government will cease to be a long-term investor in the banking system. We would all agree that that is the right approach.

[Angie Bray (Ealing Central and Acton) (Con)]

I welcome the reforms, particularly the separation of investment banking from retail banking. However, do we not still have the problem that some of our banks are literally too big to fail?

[Mr Hoban]

The package of proposals that the Independent Commission on Banking is developing is aimed at tackling that. It is one of the reasons why it proposed a retail ring-fence and increased capital so that the ring-fenced retail business will continue to be strong. But we need to make sure that we have the right resolution tools in place in the event of a bank failure. I commend the previous Government for their introduction of the special resolution regime, to which I referred in my statement in the context of Southsea Mortgage and Investment Company Ltd. We need to continue to work on tools that will help us resolve a bank failure without the taxpayer having to pick up the bill. That is the position that we ought to be in.

[Mr Philip Hollobone (Kettering) (Con)]

My constituents in Kettering want to know that the household savings that they have deposited in their local high street bank are safe from financial speculation and that never again will large banking groups imperil the UK economy through unsustainable banking practices. How far does the Minister’s statement today go to reassure my constituents?

[Mr Hoban]

My statement today has demonstrated the action that we have taken over the past year to create a more stable and sustainable banking system. That should give comfort to my hon. Friend’s constituents in respect of the safety of their savings. Savers and depositors should be mindful of the limits on deposits imposed through the financial services compensation scheme, but the range of interventions that we are making, through this statement and further reforms, will ensure that we have a safer, more sustainable banking sector in the future—one that does not impose a burden on the taxpayer, but makes sure that it continues to meet the needs of businesses and households across this country.

[Harriett Baldwin (West Worcestershire) (Con)]

Does the Financial Secretary share my astonishment at the selective recollection of historical facts by Opposition Members? The run on Northern Rock started well over a year before the global financial crisis, and it was the first run on a bank in this country for more than 100 years. In rebuilding the stability of the financial system, will the Financial Secretary repeat for my constituents the reassurance that their deposits up to £85,000 are now effectively guaranteed by the Financial Services Compensation Scheme?

[Mr Hoban]

My hon. Friend makes two important points. The first is to recognise the role played by the Financial Services Compensation Scheme in protecting depositors up to that £85,000 limit. The other point is that there is collective amnesia among the Opposition about their role in the financial crisis. Yes, Northern Rock took place before the global financial crisis—and they were the champions of light-touch financial regulation and introduced the tripartite system of regulatory reform that was shown to fail during the crisis. The Opposition need to recognise their responsibility; until they do so, it will not be possible for them to move on.

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

Does my hon. Friend agree with the recent report from the other place saying that the tripartite authorities

“failed to maintain financial stability and were found wanting in dealing with the crisis, in part because the roles of the three parties were not well enough defined and it was not clear who was in charge”?

[Mr Hoban]

My hon. Friend makes an absolutely vital point. The failure of the financial regulatory system put in place by the Labour party when in government was hard-wired into the system. It was destined to fail because of the failure to identify a clear match between the people who had the power and those who had the responsibilities for managing financial stability. My hon. Friend is absolutely right. The previous system was destined to fail. We have learned the lessons from that crisis; I am not sure that the Labour party has.

[Bob Blackman (Harrow East) (Con)]

I welcome the statement and the announcements today. However, will my hon. Friend elucidate on the expected time frame for the setting up of the new regulatory bodies? There must be at least a risk that one or more bodies that are being abolished will take their eye off the ball while they are doing their work, and there will be a time frame before the new bodies are set up.

[Mr Hoban]

My hon. Friend makes an important point. We hope that the pre-legislative scrutiny of the Bill will start shortly. It is programmed to take 12 sitting weeks. We want to make sure that the legislation progresses through this House and the other place as quickly as possible and that it is properly scrutinised. We need to make sure that we do not make mistakes in haste that we repent of at leisure. It is also important to recognise that the FSA is starting to adopt the new style of supervision that we would like to see it exercise, and that should give us some comfort that the lessons have been learned and are now being put into practice.

[Alun Cairns (Vale of Glamorgan) (Con)]

I welcome my hon. Friend’s statement, which I am sure will go a long way towards reintroducing stability within the economy in general and the banking system. What reassurance can he give that the stability will apply to the banks as well as consumers, so that the banks can go on generating wealth? That will reduce the risk that banks’ headquarters will leave the UK to establish elsewhere.

[Mr Hoban]

It is important that the UK should remain a global financial centre. We need to get the regulation and supervision in place that ensures that London can continue to prosper and grow and also that there is no wider threat to the economy and taxpayers.

Tamils (Deportation)

Thursday 16th June 2011 Commons Chamber

Application for emergency debate (Standing Order No. 24)

14:08

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I seek leave to move the Adjournment of the House to discuss a specific and important matter that should be given urgent consideration—the deportation by the UK Border Agency of my constituent Mr Jenach Gopinath back to Sri Lanka, whose Government are suspected of war crimes against Tamils, including the killing of 40,000 Tamil citizens.

Later today, a plane chartered by the UKBA will deport 40 asylum-seeking Commonwealth citizens of Tamil ethnicity back to Sri Lanka. One of the passengers is my constituent Mr Gopinath. I have just learned that another, Miss Tharmalingham, is also my constituent. Mr Gopinath was formerly employed by a leading Tamil MP, and in Sri Lanka he was arrested and detained by the authorities. He believes that he would be in danger if he returned there, as does Miss Tharmalingham. I have just learned that another passenger, Mr Najandarajah, hanged himself with his prison duvet last night, and is now in hospital; a passenger on an earlier flight did kill himself.

These people are desperate, and understandably so. A lawyer has told me that his client was tortured after he was deported. Luckily, the client escaped back to the UK. Amazingly, the UKBA tried to deport him again, but he was eventually allowed to stay on appeal. This week, Channel 4 screened a devastating documentary showing definitive evidence of war crimes and routine atrocities by Sri Lanka against Tamils, including video of summary executions. The UN has reported a wide range of serious violations of international humanitarian law. Forty thousand Tamils were killed; they were all Commonwealth citizens. Seventeen thousand are still held in camps, and even those who have got out are still under canvas as they are not allowed back to their homes. There is evidence of continuing abuse against Tamils, including torture and extra-judicial killings. The President of Sri Lanka, a probable war crimes suspect, has taken on enormous powers over the judiciary and policing.

The British Government are supposed to be one of the leading forces in the Commonwealth, yet they are not only turning a blind eye but sending plane-load after plane-load of Tamils back. They are taking no measures to monitor them, and Sri Lanka does not allow any journalists or independent observers. The people on these planes, such as Mr Gopinath, have identified themselves as Tamils and as being against the Sri Lankan Government. Britain is flying them on specially chartered flights; it is not as though they are arriving incognito. Even worse, UKBA has shared documents about these passengers with the Sri Lankan authorities. We might as well paint targets on their backs. To me, it is obvious that Tamils have a reason to fear for their safety in Sri Lanka; given the emergence of yet more evidence of atrocities, how could they be safe?

Mr Deputy Speaker, the British Parliament needs to say whether we want our country to continue with these deportations and to continue to have Tamil blood on our hands.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I have listened carefully to what the hon. Lady has said. I have to give my decision without stating any reasons. I am afraid that I do not consider that the matter she has raised is appropriate for discussion under Standing Order No. 24. I cannot therefore submit the application to the House.

Armed Forces Bill

Thursday 16th June 2011 Commons Chamber

Bill, as amended in the Committee, considered.

Third Reading

14:11

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

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

I have in front of me a four-hour speech because I did not quite manage to cover everything that the hon. Member for West Dunbartonshire (Gemma Doyle) and the shadow Defence Secretary raised with me two days ago.

As hon. Members will know, in essence, our purpose in this debate is to agree that the Bill has been scrutinised by the House and to wish it well as it moves to the other place. The Ministry of Defence does not often introduce legislation, so this is a task that very few Defence Ministers have the pleasure of performing. As is the custom, I should like to use this occasion to pay tribute to a number of people who have helped during this House’s consideration of the Bill. Before I do so, I should like to discuss some weightier matters.

For the Ministry of Defence, the Bill represents an important step regarding the armed forces covenant. For the very first time, the armed forces covenant has been recognised in statute. Some 10 years ago, people did not talk about a military covenant; that is a relatively recent development. However, everybody, over centuries, has recognised what is meant when people refer to it. The Prime Minister said that the armed forces covenant would be recognised in law, and it will be so recognised through this Bill.

The Bill will have an enduring legacy. Under its provisions, annual reports on the covenant will be required. We are very serious about the covenant. It is not a political fad—something that will be allowed to wither away in a year or so as political fashions change—because the armed forces are far too important for that. We expect that Parliament will want to debate the issues that are highlighted in the report, and I certainly do not see any way in which anything will be covered up. It is right that Governments, of whatever political hue, should be held to account for the way in which they uphold the covenant.

We discussed the covenant at length during the Select Committee stage. Hon. Members have expressed differing views, as have people outside Parliament. The Government have listened to those views and tabled the amendments that were accepted on Tuesday.

[Angus Robertson (Moray) (SNP)]

The Minister will be aware that many, if not most of the public services covered in the covenant are devolved. I am sure that he will join me in commending the work of Major-General David McDowall, the Scottish Government’s expert adviser on veterans’ affairs, for his efforts in this field. Will the Minister confirm that there has been correspondence between the First Minister and the Secretary of State for Defence to confirm the delivery of the covenant in Scotland?

[Mr Robathan]

I pay tribute to Major-General McDowall. Although I do not know him, I am sure that he does a very good job. I have of course met Alex Neil, as the hon. Gentleman will know. There has indeed been correspondence. That will not be a surprise to him, as he was in the House on Tuesday when I read out half the letter, but there we go.

The House has agreed that the amendments bring clarity about the principles that the Secretary of State must take into account in preparing his report. I was particularly pleased that they were accepted in all parts of the Committee on Tuesday without a Division, and that they have also been welcomed outside Parliament. The result is clause 2, which establishes the annual report as a route towards achieving real benefits for armed forces personnel, former members of the armed forces and their families.

As hon. Members will know, the Bill has been used to amend the legislation governing the reserve forces. This is an important change, because it will allow us to call out reservists for service in the United Kingdom in a wider range of circumstances than is permitted at present. For instance, we discussed on Tuesday the recent floods following snowfalls in Cumbria, where reservists would have been ideally placed—particularly medical reservists to deliver blood supplies. We also discussed the forthcoming Olympics. There are a huge number of occasions where we currently do not have the power to call out reservists, even should they volunteer.

[Mark Lancaster (Milton Keynes North) (Con)]

Does my right hon. Friend agree that this is long overdue change, and that given the ongoing review of the reserve forces, it will make them much more relevant in years to come?

[Mr Robathan]

I do think it is overdue. It provides the opportunity to call people up in the same way that we can use the regular forces. It also fits in well with the reserve forces review, Future Reserves 2020, which we are undertaking to ensure that this country makes proper use of the reserves. The amendments that we made this week anticipate some of the changes that may be proposed in the review and that the study is likely to recommend when it is published later this year.

When we debated the amendments earlier this week, the hon. Member for West Dunbartonshire raised a point about the Reserve Forces (Safeguard of Employment) Act 1985. She rather threw me because I was not an expert on that Act, but I have now looked up the details, so I should like to take this opportunity to respond to her point. It concerned the Cabinet Office’s red tape challenge, which is a welcome initiative to look at legislation and identify where it is no longer required. One area of legislation to be reviewed relates to employment law. I gather that on the website, under the heading, “Managing Staff”, 127 pieces of legislation are listed for review. I congratulate her on having studied this website, or perhaps on having a very assiduous researcher who has done so for her. The list includes the 1985 Act, which appears at the top of the list only because that is how the list has been ordered, not because it is a particular target for rationalisation. Of course, we carry out reviews from time to time to ensure that our existing employment legislation is appropriate, and we will continue to do so. However, I can assure her that for the foreseeable future it is absolutely our intention that the protection that this Act provides for reservists and employers will continue to remain available.

[Mr Mike Hancock (Portsmouth South) (LD)]

If the review that is being carried out into the reserve forces comes up with recommendations that would need to be written into the covenant, would it be possible to update it in the yearly report, or would the covenant, as now written, have to await the five-yearly report under the Bill?

[Mr Robathan]

The hon. Gentleman raises two points. First, should things change as a result of the reserve forces review that might give rise to something different, that would not necessarily be covered in the Bill as enacted but might require some other form of legislation. Secondly—I am delighted to see the coalition acting as one on this—we have argued all along that we want broad guidelines within the covenant report, not boxes to tick, so the Secretary of State can consider almost anything he likes when preparing his report. Furthermore, the external reference group, or anybody else, can raise whatever they like under the covenant report and our subsequent discussions about it.

To return to the protection of employment for reservists, the 1985 Act will apply to the amendment that we passed to widen the use of reserves in the UK and to all other current operations. I hope that the hon. Member for West Dunbartonshire will accept that assurance as a response to her earlier point, and I will not send her a letter if that is okay.

I think that this is a good Bill. It is the first Bill that I have taken through the House.

[Mr Kevan Jones (North Durham) (Lab)]

And the last.

[Mr Robathan]

I might concur. I am proud to have served on the Select Committee that scrutinised the Bill and would like to thank my fellow Committee members, most of whom are here, for the serious and careful way in which they went about their work.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

Where are the Labour ones?

[Mr Robathan]

I will resist the cry from behind me to be partisan on this occasion, although I would not usually.

The Committee undertook visits to Chilwell, Headley Court and Colchester, which helped Committee members in their consideration of the Bill. I thank everybody who put themselves out to arrange those visits for us, both here and in those places.

I thank the Select Committee Chairman, my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), for his good humour and wise guidance and I thank the Committee staff for their work behind the scenes. There is a gap in my brief because my civil servants said that they could not possibly put in that I would like to thank them. I would like to thank the Ministry of Defence Bill team for the work that they have done on our behalf. Sometimes, they found things marginally fraught, but most of the time they just got on with doing their work in a good-natured way. One has to take tranquilisers if one works for me. [Interruption.] I thought I would get that in before anybody else. I still have not got the letter from the mayor of Bradford, by the way.

We have a good Bill, which has benefited from the scrutiny it has received. I believe that the Bill we send to the other place is in good order. Above all, it contains much that will benefit the many people who have served, do serve or will serve in our armed forces. I wish the Bill well in its remaining parliamentary stages, and I commend it to the House.

14:22

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

The Minister has surprised me by giving a much shorter speech than I expected, considering his contribution on Tuesday.

[Mr Robathan]

I am awfully sorry, but I think we need to get it on the record that my speech on the group of amendments on Tuesday was shorter than the hon. Lady’s.

[Gemma Doyle]

I think the Minister will find that I spoke for a shorter time than he did, but, on the basis that my speech was rather more engaging, I took a number of interventions. As such, my speech took up a greater amount of parliamentary time. I shall move on.

I very much welcome and support the Bill, just as I welcome all measures designed to improve welfare for the armed forces, their families and veterans. I appreciate the Minister’s commitment to this issue. As has been said by the shadow Secretary of State for Defence, this Opposition will always act in the interests of what is right for our country and will always support the Government when they do the right thing by our forces. In this Bill and the amendments to it, the Government have made progress in the welfare of our armed forces and all service families. The Government have committed to stronger provisions to enshrine the covenant in law. As we have done throughout this process, we will work with Ministers whenever necessary to ensure that the path from rhetoric to reality is as smooth and fruitful as possible.

It is worth reminding ourselves that although the right decision has now been taken by the Government, they acted reluctantly, in the face of public pressure and following much denial from Government Members that any amendments were required. Indeed, on 10 February, at the first sitting of the Select Committee on the Armed Forces Bill, the Minister stated:

“The covenant is a conceptual thing that will not be laid down in law.”––[Official Report, Select Committee on the Armed Forces Bill, 10 February 2011; c. 21.]

He went on to say that it is a “conceptual, philosophical statement”. I imagine he wishes that he could eat his words now. Although we support the Government, we will scrutinise and form judgments based on their actions and not their words, which have been proved in this process to sometimes be two different things.

Many provisions in the Bill concern the welfare, well-being and management of our service personnel. The previous Government had a strong record in this area, not just through the introduction of the Armed Forces Bill in 2006, but by ensuring that the forces’ pay increases were among the highest in the public sector; investing in accommodation and rehabilitation facilities; increasing access to the NHS for dependants; and introducing the personnel Command Paper, the first ever cross-Government package of benefits.

The military covenant is the bond between the nation and our services. It says that the United Kingdom’s commitment to its armed forces is made in recognition that a career in the armed forces differs from all others. The covenant recognises that service personnel agree to sacrifice certain civil liberties, to follow orders and to place themselves in harm’s way in defence of others. In return, the United Kingdom shall help, support and reward our armed forces, their families and, of course, former serving personnel.

I am still somewhat new to this place—I am not sure how much longer I will get away with saying that—but I firmly believe that one of the most difficult decisions we are asked to make is to ask our service people to put themselves in harm’s way for the protection of this country and to safeguard human rights around the world. I felt that responsibility strongly when we voted on 21 March on action in Libya. I know that Members who have been here longer than me have been even more greatly vexed about these issues in recent memory.

Upholding the covenant is now more important than ever. At a time of unprecedented cuts to the defence budget, when we have seen allowances and pensions cut and personnel made redundant in record numbers, and when there are warnings about the capacity of our forces to perform at the current tempo for 90 days longer, it is vital that all service people have the protection to which they are entitled. The principle that no member of the service community, including dependants, should suffer disadvantage arising from service and that special provision may sometimes be needed to reflect their sacrifices is vital. We support the introduction of that principle to the Bill.

It is important, however, that such principles apply to policy making and implementation in all public bodies to ensure that all action undertaken by public servants is in tune with our commitments to the armed forces. I am still concerned, therefore, that the Government amendments did not go as far as they could have gone. As the Bill stands, the Secretary of State must only “have regard” to the principles in

“preparing an annual armed forces covenant report”.

That is a limited application of the principles, which we have all agreed are vital. Rather than applying across Government to all issues, the principles will apply to only those issues the Secretary of State deems fit to include in his report. There is, therefore, ministerial judgment about where the principles of the covenant apply, rather than an obligation on all public servants to take heed of them. I hope that the Minister appreciates the difference that I am pointing out.

I support the action that the Secretary of State is taking, and I believe in the Prime Minister’s desire for a genuinely enshrined covenant, but I fear that we will not fully achieve that unless the principles of the covenant are given due regard in all aspects of public policy making. As the Minister knows, I tabled amendments at earlier stages to try to achieve that. I am sorry that we have not persuaded the Government to go quite as far as we would have done, but as you would imagine, Mr Deputy Speaker, we are delighted that the Minister has come as far as he has. Having stated in Committee, as I said, that the covenant would not be enshrined in law, he has now been forced to support amendments that ensure it will be.

When I asked the Minister on Tuesday what had changed his mind, he stated that he had engaged in a listening process. I have to say, we saw very little evidence of that in the Committee’s debates or evidence sessions. I am sure that everyone would be grateful if, at some stage, he provided an explanation of his change of direction.

To ensure that the ambitions that we all hold for the covenant are realised, it is vital that there is sufficient accountability between members of the armed forces and the public servants charged with its implementation. I fear that the Government’s proposed annual report, in which Ministers will report on what they deem fit to report on rather than being obliged to provide an update on all aspect of forces’ welfare, may still be somewhat inadequate.

An annual debate in the House on the covenant is very welcome, but it should not be at the expense of real scrutiny. For the report to be meaningful, the Minister knows that I believe that there needs to be a greater number of fields on which Ministers are compelled to report. I have asked the Minister to explain why he has chosen only the three subjects that are specified in the Bill for inclusion in the report, but he has not yet given a rational explanation of why other welfare issues for which the Secretary of State is directly responsible are not included.The original intention behind the introduction of a covenant report was clearly to allow Ministers to say that they were enshrining the covenant in law, whereas their actions now demonstrate that they knew all along that that was not what they were doing. As such, the Minister will forgive me for being concerned that the Secretary of State will decide which issues to put into and leave out of his report.

My bigger worry is that without a duty on public bodies to give regard to the principles of the covenant, and without a responsibility on the Secretary of State to report on a wider set of concerns than is currently included in the Bill, there will not be a thorough examination of the possible issues of disadvantage that we have discussed, covering all relevant responsibilities of the Government.

On accountability, we welcome the Secretary of State’s confirmation that the external reference group, which I understand may now have had a name change, will publish its comments on the annual report alongside the report itself, and that as such its terms of reference will be updated. It would therefore be useful if the Minister confirmed at the earliest opportunity that the change means that the group will now be a permanent body, charged with overseeing the implementation of all policies that relate to forces welfare. I also look forward to his advising us of when updated terms of reference will be ready, and whether they will be placed in the Library for Members to view.

For the enshrinement of the covenant principles to be genuinely meaningful, there must be a proper system whereby service people can report on whether those principles are being upheld. All would agree that the Bill must be about people’s lives, not simply about securing the safe passage of legislation. When asked in a recent parliamentary question who was the legal arbiter of any complaints by service people about the principles of the covenant, the Under-Secretary of State for Defence, the hon. Member for Mid Worcestershire (Peter Luff), stated that the chain of command or the Service Complaints Commissioner was responsible. That is surprising, because in her annual report last year the commissioner said the existing complaints mechanism was a

“most ineffective system. It causes extreme delay and fails to deliver justice. It also leads to inconsistencies.”

The very arbiter whom the Government recommend that armed forces use to determine whether the covenant is being upheld says that the system is not good enough.

This is not about creating new rights, it is about the accountability of those charged with upholding the principles that the Government are enshrining in the Bill. The commissioner recommended that an armed forces ombudsman be introduced, and I would be interested to hear what consideration was given to that recommendation. As the Minister did not support amendments earlier in the week regarding the creation of an ombudsman to oversee these issues, I am anxious to find out what measures will be introduced to ensure that our forces have the opportunity to make their own judgments.

[Mr Robathan]

I just wish gently to point out to the hon. Lady, apropos our altercation at the beginning of her speech, that she has now spoken for rather longer than me on Third Reading as well.

[Gemma Doyle]

I am not really sure that that was a substantive intervention, so I will carry on.

The three fields specified in the Bill as being covered by the annual covenant report are devolved, so Scottish and Welsh armed forces or veterans are potentially excluded from any recommendations at all to be made in the report. We need clarification of whether the report will apply to all UK forces and what the devolved implications of the Bill are. On Tuesday, the Minister produced a letter from the First Minister of Scotland. I do not doubt the First Minister’s intentions with regard to this matter, but I know that the Minister will be shocked to hear that the First Minister does not always do exactly what he says he will. I therefore look forward to the Minister confirming his own view of what the devolved implications of the Bill are.

There was some confusion in Committee on Tuesday about the Government’s position on the reserve forces’ employment rights. I very much welcome the Minister’s commitment, which he reiterated today. Indeed, I congratulate him on standing up to the Secretary of State for Defence, who refused to give such a commitment just a matter of weeks ago. However, it would be welcome if the Minister confirmed what discussions he has had with the Cabinet Office to ensure that all his colleagues are on the same page.

As I said initially, the Opposition will judge the Government on the military covenant on their actions and not on their words. One of the Government’s first major acts since their U-turn on the military covenant is their decision to abolish the Chief Coroner’s Office. The Royal British Legion has called that “a betrayal” of armed forces families that “threatens the Military Covenant.” That very neatly demonstrates the need for accountability and the need for the principles of the covenant to apply to all Government policy.

The Bill would not have prevented that decision, and nor does it provide for servicemen and women who feel disadvantaged as a result to seek redress. The Minister said earlier this week that he could not speak for the Secretary of State for Justice, but I am asking the Minister to speak to him—I urge him to persuade the Secretary of State for Justice to do the right thing for service families. However, the Minister should also look at this carefully as an example of why the Bill does not go as far as it could, or indeed should.

In conclusion, the principles of the military covenant ensure that we do our bit for the men and women of our armed forces who serve this country and their families. I welcome the Bill, which has been much improved since we started out. I am delighted that the Government have come so far on this issue, and I look forward to pushing them a little further forward at the earliest opportunity.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. May I just remind hon. Members that we have only two hours—the Bill must be done and dusted by 4.11 pm?

14:36

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I am grateful, Mr Deputy Speaker. You can be sure that my remarks will be brief.

I must confess to three interests. First, I am a medical officer in the Royal Naval Reserve. Secondly, I am a potential beneficiary of the naval medical compassionate fund, which is in clause 27—“potential” because one must decease before benefiting. Thirdly, I have a non-pecuniary interest in my book, which was published today, by happy chance, on the military covenant.

I am pleased to support the Bill, which has gone a long way. There are two authorities in this field that we should not upset: one is the Royal British Legion and the other is Joanna Lumley. Consecutive Governments understand the truth of that. It is quite something when the Royal British Legion writes to MPs, as it did on 9 June, to say that the Bill represents an historic agreement. Notwithstanding the reservations that it has expressed as the Bill has gone through the Commons, it is clearly of the view now that the Bill represents a positive measure that will materially benefit the welfare of the men and women to whom we owe so very much.

I should like briefly to address the subject of the chief coroner. I have an interest, in that Mr Masters has sat in Trowbridge in my constituency, and I have visited his court and discussed the matter of military inquests with him at some length. I gently point out to the Opposition that both Mr Masters and Mr Walker in Oxford have done a wonderful job over the past several years in highlighting the plight of men and women in the armed forces and in standing up for the families of those who have sadly deceased. It is not clear to me that an office of the chief coroner would have added to that process. Indeed, I would go further: there is every prospect that such an official could be more biddable than local coroners because he is more central.

The big thing that has stood out over the years from those inquests is their independence and their willingness to find out what is happening on the ground. I pay tribute to both those two gentlemen.

[Mr Kevan Jones]

I agree with the hon. Gentleman and pay tribute to those two individuals. However, he does not understand that the chief coroner’s role is to drive up standards across the country. Following pressure from the hon. Gentleman when he was in opposition, we rightly allowed military inquests to move away from where the body arrives back in the UK and inquests can now be heard at other coroners courts. The important thing about the chief coroner is that his role would be to ensure that the high standards kept by the two coroners of whom the hon. Gentleman speaks are consistently applied throughout the country.

[Dr Murrison]

I hear what the hon. Gentleman says, but I would say to him that we now have several years’ experience of a local model with two excellent coroners who have not held back when they have felt it necessary to criticise the Government. That is absolutely appropriate. I understand that Labour Members bear the scars on their backs from these two gentlemen, but that is precisely as it should be. I have to say that I have been very impressed with how Mr Masters in particular has conducted his business and has got to grips with the reality of front-line service.

At the heart of the military covenant lies the concept of “no disadvantage”, which I am pleased has informed much of this debate. “No disadvantage” is played out on two levels: first, no disadvantage in access to public services, which can be easily understood by those of us who represent large numbers of servicemen and women. We have seen it in the disadvantage that service children have been put to when they move around frequently. I am pleased, therefore, that the Government have introduced, as part of the pupil premium, a sum that will, in some small way, mitigate the disadvantage they suffer. We see it also in servicemen and women being bumped off NHS waiting lists and having difficulties accessing dentists.

Secondly, at another level—perhaps a more fundamental level—we have the concept of “no disadvantage” in relation to those who have suffered greatly, physically and mentally, as a result of their military service. It is surely the mark of a civilised society that, when men and women who have contributed so much to that society are injured physically or mentally, we do everything in our power to mitigate the disadvantage that they suffer. I believe that that is what is in Ministers’ minds with the concept of special provision, which has been introduced under amendments to the Bill, and which we discussed on Tuesday.

It is vital that men and women who give so much of their mental and physical health are restored to health so far as is reasonably practicable. I have been impressed recently while touring limb centres, and particularly Headley Court, by the importance of ensuring that that care is ongoing. The Minister can be certain that as this matter returns to Parliament annually the ongoing care of those who have suffered mentally and physically will be brought up time and again. I am very concerned that as the tempo of operations reduces, and as the battle rhythm declines over the years leading up to 2015, the prominence of military matters and our military personnel will decline. Throughout our history, that has always been what happens after the war fighting stops. Indeed, Rudyard Kipling’s sardonic poem “Tommy” highlights that very well. We need to bear in mind Tommy Atkins and his plight, and I believe we need to think about that as we plan how to keep this issue in the public mind and, by extension, the minds of politicians.

The annual report has come in for criticism. Some think it is flute music, that it has no substance. I think it is vital, and I commend Ministers for introducing it as part of this Bill. I am also delighted that the Government have listened so well to external bodies that have impressed on Ministers the need to ensure that those who feed into that annual report are heard properly, and that the report, when it comes to Parliament, properly reflects their views and input. In a year or so, we will have the opportunity of seeing this process in action, and I confidently expect the House to have every opportunity to debate the military covenant again and in depth. I suspect that the Minister knows full well that if this looks like being a superficial exercise, he will come in for a great deal of criticism. However, I confidently expect that in a year or so, we will be able to commend him once again for this measure of his to which we are going to give a fair wind today.

There are those who say that the Bill does not go far enough. There are also those who say that we should be more didactic in what we write into the Bill. They are simply wrong. We have support from an unlikely source, in the Archbishops Council, which will of course reflect the views of the unlikely guest editor of the New Statesman magazine. He is not a gentleman who is necessarily known to be a supporter of the coalition Government, yet the Archbishops Council is quite clear that the military covenant exists in the moral realm. It is not contractual, and it is not statutory.

There is a risk, however, that pressure from Europe could codify a military covenant. There is something called Synchronised Armed Forces Europe—which is known by the rather misleading acronym SAFE—which seeks to impose a European soldiers statute that would codify the covenant. I urge Ministers strongly to resist such a thing.

I do not intend to detain the House any longer, as a number of colleagues wish to speak. I congratulate Ministers on bringing forward this measure. The Government have taken the Armed Forces Bill—a Bill that, as something of a constitutional anomaly, we take through this House every five years, with the exception of the Armed Forces Act 2006, which dealt in depth with service discipline—and really added substance to it. This is a truly historic Armed Forces Bill that will do much for the men and women to whom we owe so much, and will honour the covenant that we all have with them.

14:46

[Mr Mike Hancock (Portsmouth South) (LD)]

I would like first to offer the hon. Member for West Dunbartonshire (Gemma Doyle), who spoke for the Opposition, and the Minister the opportunity to join the reserve forces, because if their combative skills in this place are anything to go by, they would both be welcome in whichever element of the service—

[Mr Robathan]

I am too old.

[Mr Hancock]

One is never too old to give service to one’s country.

I join the hon. Member for South West Wiltshire (Dr Murrison) in paying tribute to the two coroners who have dealt with military deaths up to now. I have assisted families who have been through that process, and they have always been very complimentary about the way the coroners have acted, the way they were treated by the court and the way the coroners—they believe rightly—tackled the very controversial issues that had resulted in the deaths of their loved ones. I have yet to meet or hear from anyone who is seriously dissatisfied with the behaviour of those coroners, both of whom rightly deserve to be congratulated and thanked on behalf of this House and all the families who have been through that process.

There are those Members who would like more written into the Bill than the three points in the covenant, but really the list is endless. The three issues identified were those that have been raised most consistently, but that is not to say that the others will be ignored. One benefit of having a yearly review and a report to this House is to give all players—those inside and outside the armed forces, whether former or serving members, and other groups representing them—the opportunity to put into play their points of view. Therefore, not writing things into the Bill is not as relevant as some would want to think. I happen to believe that Members from all parts of the House who have worked as Ministers in the Ministry of Defence have tried to put the armed forces at the forefront of their endeavours to be fair.

I also criticise those who do not believe that the covenant is a contract. It is a contract: a contract between the British people, through this House, and the armed forces. Those who have criticised the idea that the covenant is not a written contract are mistaken. At a time when the armed forces have never been held in greater esteem, the people of this country believe that we have a duty not only to honour the covenant, but to make it work for those inside or outside the forces. The idea in the Bill of giving greater independence when complaints are made and dealt with is to be welcomed. However, I am slightly dismayed that we have not done more to introduce a proper ID card for veterans, to give them the same status that veterans have in other countries. I am grateful that the Minister and the Secretary of State have at different times conceded that further consideration will be given to that matter. We need to be sure that we honour our pledge to provide these services through the covenant and through the Bill, wherever they are asked for around the country. It should be irrelevant where the person lives at the time.

The Bill has a number of attractions for people in the armed forces, but it does not really satisfy those who have an interest in the way in which reservists who go on active service are treated when they return. The Select Committee on Defence has taken evidence recently on the way in which returning reserve service personnel are treated—by the health service or by employers, for example. The situation is unsatisfactory in that there is still a sense of exclusion. Returning reservists are not given enough support, for example, when they have problems with their employers.

We need to build into the review of armed forces legislation over the next five years, and into the covenant itself, greater support for reservists who are having trouble. It is often difficult for someone returning to the United Kingdom after serving abroad for six months to deal with problems arising from their employment. Where do they get the help and support that they genuinely need? In some parts of the country, it is very difficult to get that sort of assistance, and we must look at that.

[Bob Stewart (Beckenham) (Con)]

What sort of help is available for a Territorial Army reservist when he has problems with his job? How can the Government help, given that a commercial arrangement is involved?

[Mr Hancock]

I think that the military legal services ought to be made available to them. The hon. Gentleman has a distinguished record of service in the armed forces, and I believe that the same facilities that would have been offered to him, should he have encountered difficulties during his military career, such as medical or legal advice, should be forthcoming to others. I want those facilities to be offered to individual reservists on their return to the United Kingdom, and I hope that the Ministry of Defence will consider that matter seriously.

On behalf of my hon. Friends on the Liberal Democrat Benches, I should like to say how delighted I am that the coalition has been able to deliver on its promise to armed forces personnel and their families that the covenant would be written into legislation and therefore deemed to be part of the law of the land. People can now have great confidence that the armed forces, if not the national health service, are safe in the hands of the coalition.

14:52

[Patrick Mercer (Newark) (Con)]

It is always a pleasure to follow the hon. Member for Portsmouth South (Mr Hancock), who speaks so clearly on this subject. I shall be brief, but I should like to make one or two points. There can be few more solemn moments in the Chamber than when the names of the dead are read out at Prime Minister’s questions on a Wednesday. This is now happening practically every week. I therefore find it interesting that, despite the statements of support and grave interest in our armed forces, our debate on the very thing that supports them—namely, the military covenant—has been scheduled for a Thursday afternoon. There are very few Members present—disgracefully few on the Opposition Benches—and there is a larky atmosphere with people trying to get out of this place as quickly as they can. That is a discredit to the men and women who serve us, and to the subject that we are debating today.

I am pleased to see so many hon. and gallant Members and former comrades in arms around me, however. I should like to pay tribute to the excellent speech made by my hon. and gallant Friend the Member for South West Wiltshire (Dr Murrison). It was a highly intelligent speech, but I disagree with him on one subject. He used the very moving terms “battle rhythm” and “tempo of operations” aspirationally, saying that he hoped that both of those things would decline. It is worth bearing in mind that in April, 1st Battalion The Rifles deployed to Helmand province, and that, 131 years ago, its predecessor, the 66th of Foot, also deployed to Helmand. That was exactly the same area and exactly the same regiment facing exactly the same tribesmen, and with a similar political backdrop. In four hours, 994 men were killed in the battle of Maiwand, which now falls within the area of responsibility of the 1st Battalion The Rifles—what a coincidence.

I do not think that the tempo of operations or battle rhythm is going to decrease at all. As the fighting operations in Afghanistan and Pakistan decline, I have every confidence—I say this with no pleasure—that other operations will come up that will require our fighting men and women to be deployed in other parts of the world and that the military covenant will be just as important then as it is now.

Despite my earlier rather churlish comments, I am delighted that this Government have chosen to put these measures in a place where they can be properly recognised. I think it crucial to support the morale not just of the fighting men and women but of their families by assuring them that things are being done for them. My hon. and gallant Friend the Member for Beckenham (Bob Stewart), who I know is going to speak later, used to command the Cheshire Regiment. [Interruption.] I gather that he is not going to speak later, which will be a great disadvantage to the whole House, I am sure. When he and I were serving, I know that we felt that no differentiation was made at all, as no particular support or advantage was given specifically to soldiers, sailors or airmen and their families. I thus rejoice in the fact that health care, schooling, taxation and other individual items are to be put on a more sensible basis for those who serve to protect us.

I ask the Minister to think carefully about how the military covenant—ill defined as it necessarily and properly is—might evolve and develop, and about whether we can learn anything, particularly from our American cousins.

There is one thing that completely defeats me. As a former commanding officer, I knew that I had only one thing to hand by which I could financially advantage those under my command. In those days, it was called the commanding officer’s discretionary fund. Over the years, that fund has gone up and I understand that it is has recently been about £60 a head. Forgive me for teaching the House to suck eggs, Mr Deputy Speaker, but this is simply a fund of money given to commanding officers—be they commanding mobile bath units or a battalion of the guards—to spend as they see fit on those under their command without any further reference to higher authority. It is an extremely important fund. It has been spent recently on preparing homecoming parades; it has helped with regimental funerals; it has provided people with excellent opportunities for training; and it has allowed people to enjoy themselves a little and to get some quality time.

Modest though it is, this discretionary fund is extremely important, yet it has been cut, which I do not understand. This fund is immediate, important and goes right to the heart of the military covenant. I appreciate that in the overall scheme of things it is not a big sum of money and I appreciate that it is not a large issue overall, but to the men and women inside the units, it is crucial. I deplore the fact that it has been cut, because that stands on its head the logic and the propriety of everything else that has been done through the military covenant.

I will spare the House any more of my rhetoric. I am grateful for the opportunity to have made these points and I am grateful to this Government for what they have done. I hope to see the military covenant evolving and improving, and I have absolutely no doubt that the Minister will now think carefully about the commanding officer’s discretionary fund—and I am sure that he will restore it.

14:59

[Mrs Helen Grant (Maidstone and The Weald) (Con)]

In this, my first year as a Member of Parliament, it has been a revelation and a reassurance to know that so many colleagues throughout the House have served in our armed forces, and I am even more surprised and steeled by the number who continue to serve as reservists. Their front-line experience is priceless in these thorny and precarious times. I do not share their direct experience of the ways of modern warfare, but I certainly see the landscape from a different plane. I am the mother of a teenage son who is training to become a Royal Marine commando, and my constituency is home to 36 Engineer Regiment and the Queen’s Gurkha Engineers. The health and well-being of our armed forces is therefore very close to my heart.

I do not intend to make a long speech, but I want to say a little about clause 2, about the military covenant, and, in particular, about how the covenant can help our military families. Isolation is a significant issue for military families when their loved ones are away, and in my constituency some Army mums have set up a local support group called Troopers Mums. Those inspirational women support themselves as well as the servicemen and women of whom they are so proud. They say that one of the most important factors for families dealing with isolation and worry is the existence of a support network of like-minded, empathetic people who are undergoing the same fears and anxieties. Sometimes it can be as simple as knowing, just from a look, when someone needs a cup of tea and a chat. Those women rely on each other in moments of need, and in many cases a problem shared is truly a problem halved. Troopers Mums are not asking for help; they simply want to be able to help themselves.

I know from my own research that other good support groups exist, but their functioning seems to be fragmented, unconnected and sporadic. Perhaps we can explore how we might develop and support a more uniform and accessible network across the country. When I use the word “support” I do not refer to state finance, state interference or yet another layer of state bureaucracy, and I echo the sentiments of one of the mums who said that she would not want a single penny to be diverted from the front line, but I think that with Government endorsement and some sponsorship from the private sector, we could assist families in a real and tangible way by helping them to set up and operate networks of their own.

The second point that I want to make about the military covenant concerns our nation as a whole. The covenant is a commitment between the Government, our service personnel, families and the nation. What worries me is that even if we enshrine the Government’s part of the bargain in legislation, things can still go badly wrong if our nation does not buy in. In conversation with my Troopers Mums, I heard of many instances in which a little kindness and understanding could have gone a long way, especially in the workplace. One mum told me that she had not been allowed time off to attend her son’s medal ceremony because she had already been given time off to attend his graduation some years earlier. Another told me that when her son was severely injured while serving in Afghanistan, she began to struggle at work. The response from her superiors was that she should “pull herself together.”

Closer to home, here in Westminster, I recently attended an armed forces dinner. I sat next to a man who had served in Iraq and had been awarded the Conspicuous Gallantry Cross, which is one down from the Victoria Cross. He had also served in Afghanistan, where his gallantry had earned him the Military Cross. I asked him about his Army life, and we talked of many things. He mentioned his home on an Army base, where he lives with his wife, who will soon turn 50. They cannot close the windows properly in their house because the double glazing framework has blown out. Their kitchen is made up of badly fitting, ill-matching units which are dysfunctional and look a complete shambles. They are sometimes embarrassed to ask people to supper because of the state of their accommodation.

Warrant Officer Mick Flynn is one of Britain’s most highly decorated soldiers. He is one of our heroes. He has given his entire working life to his country, and he is justly proud of his career. He does not complain, and he asks for little. I think that, as we debate the military covenant, the House will agree that we should support the rhetoric with practical action, such as ensuring that someone goes round to Mr and Mrs Flynn’s house to sort out their windows, fix the kitchen, and restore a little dignity to their home.

[Bob Stewart]

They will now.

[Mrs Grant]

Good. That will give some tangible meaning to the term “military covenant”.

There is a positive side, however. I heard a story of a uniformed serviceman boarding a civil jet to return to the UK and the other passengers giving him a spontaneous round of applause as he took his seat. That is a great example of attitude, awareness and respect, and perhaps we should do much more of that kind of thing unreservedly. In order for the covenant to work, society must also modify.

I am very proud to support the Bill. I hope it will help to maintain public awareness of the sacrifices made by our military personnel and their families every single day.

15:04

[Andrew Percy (Brigg and Goole) (Con)]

It is a pleasure to be called to contribute to this debate. I welcome the Bill’s provisions, especially the enshrining of the military covenant into law.

I have not been able to contribute to earlier debates on the Bill, nor do I have any military service as distinguished and gallant as that of some Members who have spoken. My only experience of military service was going to Leconfield base when I was about eight or nine with my father, when he was in the Territorial Army in east Yorkshire. That is as far as my direct interaction with the military goes. However, my constituency, and east Yorkshire and north Lincolnshire in general, is a major recruiting ground for our military. Consequently, a number of veterans in my constituency and across the area regularly contact me on military matters, as do the families of serving personnel. This subject is of great local interest, therefore.

The constituency also has a long and proud history of supporting our military and playing an important role in military operations. Only last week, I attended a ceremony in Goole to mark the anniversary of D-day, and the Mulberry harbour was, of course, constructed in Goole, so the military is never far from the minds of the people of Brigg and Goole. I have also been working with a number of charities in my local area, not least the National Gulf Veterans and Families Association. The Minister knows of my interest in it, as he recently met me at the Ministry of Defence to discuss its work. I know it will welcome the military covenant provisions.

I may not have any direct military service history, but a month or so ago I spent some time with the armed forces scheme in the Falkland Islands, which was incredibly enlightening as it gave those of us without that experience the opportunity to engage with service personnel in all three branches of the military. I was staggered to hear how poorly some of them feel they are both treated and prepared for leaving the military. I was especially shocked to learn that many of them find that it is a problem for them to wear their uniform when they return to the UK. In fact, some of them highlighted that they had been verbally assaulted for wearing their uniform. That demonstrates that we have to ensure that more respect is shown to our military by the general public, and there is no better way of leading on that than by enshrining the military covenant in law.

When talking to those soldiers, sailors and airmen in the Falklands, I was most interested by what they planned and wanted to do on leaving the military. As a former teacher who takes a close interest in educational issues, I was struck by the fact that in the past there has been insufficient support for those leaving the military, and I certainly hope the covenant will address that. I particularly welcome the Government’s announcements on independent learning funds for those in the military and greater support for those leaving the military. I hope we hear more about that in the coming months and years.

We have heard a lot about the Joanna Lumley test. In my constituency, I apply the Mavis Vines test. She is a constituent of mine who worked for 25 years in Berlin for the British military before returning to Goole, and who now continually, and quite rightly, pressures me on the issue of how our veterans and serving personnel are treated, especially as her son has just returned from Afghanistan. One issue that she continuously presses me on—quite rightly—is housing. In 10 years as a local councillor, I saw the pressures relating to housing. We are all aware of those, but housing is never far from the minds of those who serve in our military and are transients, to say the least, when serving. Consequently, I hope that enshrining the military covenant and the annual report on the covenant in law will address some of the pressures and challenges that service personnel face.

I needed no more evidence of how a great deal remains to be done on our treatment of our military, but I received some when a constituent came to see me a couple of weeks ago. His son is a ground crew man who is working as part of Operation Ellamy in Italy. My constituent informed me, against the wishes of his son, that service personnel were continuing to be served rotten food and that they had insufficient computers to make contact with their families back home. This relates back to a point made by my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) about isolation. When these people are on active service overseas, that isolation is not helped if there are not enough computers, mobile phones or communication routes back to their loved ones back home. Although progress has been made since this Government came to power, a great deal more clearly can and should be done to support people on active service overseas.

I do not want to detain the House for too long, but I do want to express my support for the Bill. The Government are right to enshrine the covenant in law. I heard the words of the hon. Member for West Dunbartonshire (Gemma Doyle) and I will resist asking why these things were not done previously. The Labour Government did have a number of years in which they could have enshrined the covenant in law. I hope that we can proceed in a cross-party way on this issue. There remains much to be done to support our military, but the amendments that have been made to enshrine the covenant are the right ones. I am sure that hon. Members from all parts of this House will support the Bill, as I will, and I conclude by wishing our service personnel all the very best.

15:12

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

I would like to start my contribution by putting on the record just how much I enjoyed serving on the Armed Forces Bill Committee. Not only was that a great honour for me, but it was very interesting and, at times, fun, as others have said. It was my first Public Bill Committee and it would have been my first choice in terms of subject. I am sure that one of the reasons why I was asked to serve on it was because of my military background, although I can assure the House that my military experience is very modest.

I am sure hon. Members are aware that I am a serving reservist. I am currently a trooper in the ranks with the Royal Gloucestershire Hussars, as part of the Royal Wessex Yeomanry. Previously, I was a gunner with 266 Commando Battery in Bristol and was attached to 29 Commando on Operation Herrick 9. Because of injury—I snapped my collar bone—and the general election interrupting my military service, and despite my best efforts, I have not been able to join the friends I served with last time who are in Afghanistan, on Operation Herrick 14, as part of 3 Commando Brigade. That has made me feel guilty from time to time, and it leads to some days when I am a bit out of sorts because I am here when they are out there doing the business and doing a great job. While they are out there serving our country, if I have been able to serve on this Committee and make a small contribution that will in the end improve the lives of servicemen and women, veterans and their families, at least I will have done my bit in some way. I hope the rest of my friends’ deployment goes very well and they all come back safely.

On occasion, the Committee has been more partisan than I would have liked. However, that has mainly been on the detail and emphasis, rather than the principle of doing the best that we can for our troops, veterans and their families—in principle, there is complete agreement on that. I am glad that there is broad agreement across the House and the party political divide on this final version of the Bill.

I want to pay tribute to all my colleagues on the Committee, with whom I have really enjoyed working, especially my new friend the hon. Member for North Durham (Mr Jones), who is, I know, very passionate about the armed forces and did some fantastic work in the previous Government, when he was a Minister. [Laughter.] Sorry, I could not resist.

We all recognise that the most important and prominent duty of any Government is the defence of the realm and the protection of our people. I believe the whole House is also in agreement that it is of equal importance that all Governments value the contributions and sacrifices that our servicemen and women make in carrying out that most crucial task. The welfare of our nation’s servicemen and women is rightfully at the top of the political agenda and the Government have moved swiftly to ensure that any lapses in the commitment between Government and our armed forces are rectified.

In the Bill, we have a piece of legislation of historic importance to our nation and to our armed forces. The commitment has existed since the inception of the nation state—from the times when the ancient Romans gave land to their veterans to provide them with a livelihood to 1593 when Elizabeth I recognised the country’s responsibility to wounded veterans—and the passing of the Bill, in this House, proves our firm and now unbreakable commitment to our service personnel, veterans and their families.

Most significant will be the statutory duty on the Secretary of State to report annually to Parliament on the effects of service in our armed forces and on the welfare of serving and former members of the armed forces and of their families. That provision will ensure that the armed forces covenant that the Government are rebuilding will be advanced year on year. Each report will have to set out how the Government are supporting our armed forces, their families and veterans in key areas such as health care, housing and education.

For the first time in the history of our nation, the Bill will give statutory recognition to the armed forces covenant and provide a mechanism for ensuring that it is addressed by Ministers and Parliament. As I have mentioned, in Committee there was broad agreement, at least on the key principles that underpin the armed forces covenant. To me, those principles are that when our armed forces personnel on operations in Afghanistan and elsewhere face paying the ultimate price in the protection of our country, its citizens and our freedoms and way of life, we should only ask them to do so in the knowledge that they are properly equipped for the task, that they will be trained to the highest level and that when they retire or should they be injured, wounded or indeed killed, they and their families will be provided for in recognition of and admiration for the sacrifices that they have made.

The covenant between the state and the men and women we ask to defend it is rightfully a long-standing tradition and commitment and its continuation and development is more important than ever before. That is why I, too, welcome the amendments tabled in the name of the Secretary of State for Defence, which were accepted by the House. Those amendments have been welcomed by Chris Simpkins, the director general of the Royal British Legion, who said:

“I firmly believe that we now have a much better Bill, which is not just fit for purpose, but also embodies the ‘historic agreement’ and covenant principles”.

The way in which the covenant was reflected in legislation was debated in great detail in Committee, and we can all be proud of what has come out of those deliberations.

This Bill is recognition of a duty that precedes even this place, the mother of all Parliaments, and that is the duty of care, protection and equality for those who are asked to defend our country. This is a proud moment for this Parliament, which will enshrine that covenant in law for the first time.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Economic Regeneration (Barnsley)

Thursday 16th June 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Stephen Crabb.)

15:18

[Dan Jarvis (Barnsley Central) (Lab)]

It gives me great pleasure to secure today’s debate on an issue that is extremely important for Barnsley and for the whole country.

The cuts and changes to welfare pursued by this Government are hitting the most vulnerable parts of the country the hardest, and Barnsley is on the front line. More than 25% of our jobs are in the public sector, one of the highest rates in the country. The loss of many of these jobs will take tens of millions of pounds out of the local economy just as benefit changes start to bite. We have taken huge strides to overcome the stagnation and decline that hit us the last time the Conservatives were in power, but these cuts have the potential to push us back years.

The legitimacy of the Government’s programme depends on its fairness. Before they go further down the road they have embarked on, they have a duty—an obligation—to stop and think about the effect it will have on places such as Barnsley. That does not mean that we reject reform to our public finances or to our public services, but the deficit needs to be tackled in a way that corresponds to sensible economic policy, not to the demands of ideology. Welfare needs to be reformed in a way that does not kick the genuinely vulnerable in the teeth. The question is how far and how fast the cuts and changes are made and what is done to make the process a transition, rather than a reckless abandonment of our communities and a gamble with our economic future.

First and foremost, places like Barnsley need targeted support to help drive development and employment—a coherent, responsible regional development strategy that has the resources to succeed. That does not mean giving unsustainable handouts. What is holding Barnsley back is not the fundamentals—we have the location, the work force and the will to thrive—what we need is the investment to overcome the entirely man-made barriers to our progress.

[Michael Dugher (Barnsley East) (Lab)]

I thank my hon. Friend for giving way and for securing this important debate. Does he agree that there is proof that the area still has something very significant to offer in ASOS’s announcement last year of 1,100 new jobs for Barnsley, specifically in Grimethorpe in my constituency? Is it not the case that those jobs and that investment came about because of decisions made by previous Governments to ensure that we had in place infrastructure such as the facilities, warehouses and roads to attract such firms, and that we need a real partnership with government?

[Dan Jarvis]

I thank my hon. Friend for that constructive and useful intervention. I believe that the ASOS model provides a useful example of how the Barnsley development agency, working with the metropolitan borough council, can aggressively seek to target other industries and businesses. The ASOS model is a useful one that we need to learn lessons from and employ in future.

As I have said, what we need is the investment to overcome the entirely man-made barriers to our progress. Without that, as my colleague the shadow Business Secretary recently said,

“the government’s belief that the retreat of the state is automatically matched by the expansion of the private sectors is going to be tested to destruction.”

The Government have dispensed with the strategic investment fund, with grants for business investment and with regional development agencies. The new regional growth fund has only a third of the money that was available under RDAs. I accept that RDAs were not without their failings, but the local enterprise partnerships that have replaced them are short on funding and short on power.

[Bob Stewart (Beckenham) (Con)]

Does the hon. Gentleman honestly think that any Government Member or anyone in this country wants to cut jobs just for the sake of it for some reason of politics? The fact is that jobs have had to go because we just cannot afford them any longer and we cannot just plough money into the public sector all the time.

[Dan Jarvis]

I thank the hon. Gentleman for his intervention. I do not believe that Government Members think of these issues in such ways but this is a matter of policy. Barnsley is the kind of place that will go into a recession first and come out of it last and I believe that when the Government are making significant cuts to public services that will have an impact on jobs and livelihoods across Barnsley, they have a duty and an obligation to pause and consider the effect that those cuts will have on the people in Barnsley.

Where public sector cuts are made and jobs in the public service are lost, I do not believe that it is a given that the private sector will come in and fill the void. That should not be a natural assumption. In order to promote the kinds of conditions that allow the private sector to invest in places such as Barnsley, there needs to be a targeted programme of investment and development. I do not believe that the policies that the Government are putting in place will do that, but I thank the hon. Gentleman, as ever, for his useful intervention.

The LEPs, which have replaced RDAs, are short on funding and short on power. They are not even guaranteed the money for their own start-up costs, never mind for investment to support business. They will have to apply to the regional growth fund, whose first round of funding is already 10 times oversubscribed, and they have been denied access to cash from the European regional development fund, which is being centralised at the desk of a Whitehall bureaucrat. Perhaps the Minister can explain how that fits with the Government’s supposed localism agenda.

I believe that we can and must do better than that. First, we can strengthen the LEPs and make them much better able to co-ordinate and lead a strategic approach to regional development. Among other things, that means giving them access to the ERDF and allowing them to join together to secure investment for cross-regional projects. It means giving them a stronger, more formal role in the development of local economic growth plans. It means removing or reducing the £1 million threshold for RGF bids so that smaller companies can apply and LEPs can work with them to bring in the investment projects needed to spur growth. Will the Minister consider these changes?

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

I am pleased to say that small businesses can participate in the RGF. The £1 million programme for the second phase will allow small and medium-sized enterprises to participate, and in the first phase we saw that they were able to participate in Merseyside and Plymouth, so I am happy to give the hon. Gentleman that assurance.

[Dan Jarvis]

I am grateful to the Minister for that assurance.

One area where LEPs have real influence is the creation of enterprise zones. I commend the Government on the proposal being put forward by my local LEP, but I hope that the Government will not penalise proposals from several LEPs, including my own, for enterprise zones that are spread across several sites. The Government must be ready to listen to LEPs where there is a clear rationale based on the complexity of the local economy and the real needs of businesses. The uncertainty on this question reflects the over-simplistic and unclear nature of the criteria for enterprise zone site selection. Will the Minister ensure that those problems are rectified as a matter of urgency so that the work of LEPs such as mine is not inhibited by a lack of flexibility?

In any case, enterprise zones are a limited tool. They can offer reduced business rates, fast planning and fast internet, but a far greater concern of entrepreneurs in Barnsley is the lack of skilled workers. I will talk about the shortcomings of the Government’s skills policy in a moment, but given that the skills problem is one of the biggest barriers to private sector growth, would it not make sense to mandate the LEPs to oversee a locally adapted skills strategy, in partnership with businesses and local authorities? At the very least, we should take up the suggestion made by the Centre for Cities that enterprise zones should include special support for training and skills development.

For Barnsley, another vital issue, of which I know the Minister is aware, is the Government’s position on transferring the assets of the regional development agencies to LEPs or to local authorities. Those assets were built up by the RDAs with the specific aim of supporting local development, and in many cases they are critical to projects for transforming our local economies. That is the case in Barnsley, where the keystone Barnsley Markets project has been premised on the use of land belonging to the RDA. That is not some bureaucratic black hole; it is the future of Barnsley as a town—a project that is ready and waiting to move forward, and exactly the practical purpose for which the asset was originally acquired.

In total, the future of some £500 million in RDA land and property assets throughout the country is in doubt. I firmly believe that local authorities or LEPs should be given the first say on the use of those assets, and that is not just a Labour view; it is one echoed throughout the House. I am greatly concerned that the Government may be contemplating a fire sale at reduced prices, which would bolster central coffers at the expense of regional development and be deeply short-sighted. Will the Minister reassure the House that this will not happen, and will he allow LEPs to use the assets as they were meant to be used?

An active LEP is important, but it is not enough on its own, and the recent figures on bank lending bear out what I hear in person from businesses in my constituency. The problem is especially severe for small and medium-sized enterprises, exactly the sort of businesses that are most important for driving job growth. Research shows that South Yorkshire has one of the highest concentrations of SMEs with high growth potential anywhere in the UK. Keep that in mind, Madam Deputy Speaker, if anyone ever tells you that Barnsley does not have untapped potential.

There is, however, a steady stream of reports that SMEs are being held back by the lack of credit, even when the business case is sound. I was glad to hear that the Business Secretary did not rule out more action down the line if targets continue to be missed; I was not so glad when he told me that banks miss their targets more by choice than by chance. That is not acceptable for businesses in Barnsley or anywhere else in the country.

What plans do the Government have to ensure that banks meet their small-business lending targets? At what point do the Government take firmer action on the two state-owned banks? Would they accept the banks meeting their lending targets but failing to meet their small-business lending targets? What will Ministers do if the banks continue to claim that the demand is not there? It is a claim that many small businesses contest. Is the Minister going to wait to the end of the year to do more than lecture the banks if they are at fault? And what will happen next year if the Project Merlin agreement has not delivered? The Government have admitted that the lack of lending still threatens the entire recovery, but that problem needs to be resolved now.

The market is the foundation of our economy, but the Government have to play a role in helping it develop in a way that matches our strengths and builds the society that we want. If Barnsley is to thrive, it must be at the cutting edge of high-tech, high-value manufacturing and of the new digital and green economies. Instead, the Government are axing the zero-carbon homes initiative, which was helping to develop the next generation of British manufacturing. What are they going to do to support the development of the new economy that we need?

[Mr Prisk]

On the zero-carbon homes initiative, in fact we have completed that definition, we have published it, and we intend to implement it.

[Dan Jarvis]

I am grateful to the Minister for that confirmation.

Part of the effort is developing the infrastructure that is needed to bring growth anywhere outside the south-east—especially high-speed rail. The plan that Labour put together in office will bring Leeds within 80 minutes of London, and that could have a major positive impact in Barnsley. However, it is not yet clear that the Government are serious about bringing high-speed rail to the areas that most need it. If they were, why has the Secretary of State for Transport so far declined to include the northern branches of the planned Y-shaped network in the transport Bill? Will the Minister reassure the House that that will change, and will the Government reconsider the scale of their cuts to rail transport generally, which threaten a repeat of the under-investment of the previous Conservative Government and fare rises that threaten to put rail travel out of reach for the less well off?

Better transport will particularly help another sector with great potential in Barnsley—tourism. Indeed, that sector has been a key driver of job creation across the country. As the Government say, in the current economic climate those performances make the tourism sector a particularly important part of the UK economy. Barnsley is a great town with a proud history. When I look around the metropolitan borough at places such as the Elsecar Heritage Centre in the constituency of my hon. Friend the Member for Barnsley East (Michael Dugher), Cannon Hall and Wentworth castle in the constituency of my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), and the new town hall museum project in the heart of my constituency, I see enormous potential for tourism in Barnsley.

I am glad that the Government’s tourism strategy acknowledges the need for some Government help when market failures mean that tourism is not properly promoted. But they should also consider providing some support for places that have a clear tourism potential but are not yet established destinations. I am thinking especially of areas particularly in need of growth, such as Barnsley. Will the Minister outline how the Government plan to help us achieve our tourism goals?

I believe that the most fundamental barrier to aspiration and economic development in Barnsley is a lack of skills. I recently spoke to a major employer and asked him the three most important factors to consider when relocating or setting up a business. His reply was simple: “Skills, skills and skills.”

[Michael Dugher]

I am grateful to my hon. Friend for giving way again; he is typically generous. He rightly identified the issue of skills and he is right that we need to lift the level of skills in Barnsley if we are going to attract the jobs of the future. Does he agree that certain Government policies such as the scrapping of the education maintenance allowance and the trebling of tuition fees will make that harder, not easier?

[Dan Jarvis]

I am grateful to my hon. Friend for those useful points. The Government’s decision to abandon EMA, treble tuition fees and remove the Barnsley-inspired future jobs fund provide a triple whammy for the hard-working people of Barnsley seeking to secure employment. I ask the Government to consider the impact of those decisions on places such as Barnsley.

The Government’s strategy on skills leaves a lot to be desired. I am glad that they plan to build on Labour’s investment in apprenticeships, but despite the urgent problem of youth unemployment, 16 to 18-year-olds will not be able to access a single one of the extra places that they are funding.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

With your forbearance, Madam Deputy Speaker, I should like to place on the record the delight of the House in the MBE awarded to my hon. Friend in the Queen’s birthday honours last week.

Is it not the case that significant numbers of young people want to leave school at age 16 and do not want to engage in full-time education, but would benefit from a mix of work and training that is typically represented by a good, solid apprenticeship? Is it not a fundamental mistake to deny young people that opportunity, especially given that it develops the work habit from the very earliest point of entry into adult life?

[Dan Jarvis]

I am very grateful to my hon. Friend for her kind remarks and for the useful and constructive contribution she has made to this debate. I completely agree about apprenticeships. They are a vital pathway for young people, bridging the gap between the classroom and the world of work. I am proud of the work that the Labour Government did in increasing the number of apprenticeship places. I hope to work constructively with Members across the House to persuade businesses across the country, not only in Barnsley and South Yorkshire, to take on more apprenticeships. An apprenticeship is a valuable opportunity for young people that gives them vital experience of the world of work.

The Government have axed Train to Gain, which provided work-based training to 575,000 people in 2009-10. They have also scrapped fees remission for people over 25 who are doing level 2 and level 3 courses. That is partly why the Minister for Further Education, Skills and Lifelong Learning has had to admit that adult apprentices may have to borrow up to £9,000 to fund their training.

[Nigel Adams (Selby and Ainsty) (Con)]

The hon. Gentleman is making a great case for Barnsley, which is a very proud town. I appreciate that he has not been in the House for all that long since his magnificent victory a few months ago, but it probably has not escaped his notice that the Labour Government were in power for 13 years. If there is a big skills shortage in Barnsley, does he not therefore accept that his own party has to take some of the responsibility for that?

[Dan Jarvis]

I am incredibly grateful to the hon. Gentleman for that intervention, which gives me the opportunity to remind the House—although there will be no need to remind people in Barnsley—of the impact of the policies of the Conservative Governments led by Margaret Thatcher in the 1980s. People in Barnsley will recall the damage that the Conservative Governments who were in power until 1997 did to such places. I will be very happy to walk through Barnsley with the hon. Gentleman, who is always welcome to come and visit—it is not terribly far from his constituency. I will be delighted to show him the real, long-lasting structural improvements that were made in Barnsley as a result of 13 years of Labour government. In effect, the cuts made by the Conservative Governments of the 1980s and 1990s created structural, long-lasting, generational decay in Barnsley, and that takes a significant period to overcome. I believe that the Labour Government made considerable progress during the 13 years when they were in office, and that is clear to people when they walk through the streets of Barnsley. The Building Schools for the Future programme is a classic example; it has provided state-of-the-art infrastructure for kids who go to school in Barnsley. We can be proud of that record. I am grateful to the hon. Gentleman for the opportunity to make that point.

As I said, the Government have axed Train to Gain, which was a valuable scheme that provided a significant amount of work-based training to hundreds of thousands of people. They have also scrapped fees remission for people over 25 who are doing level 2 and level 3 courses, and the Minister has had to admit that adult apprentices may have to borrow £9,000 to fund their training. As Labour Members will be well aware, the Government have also cancelled the Barnsley-inspired future jobs fund, pioneered by Councillor Steve Houghton, the leader of Barnsley metropolitan borough council. I remind the House that the FJF provided jobs for 100,000 18 to 24-year-olds, with a valuable training element. Overall, I believe that those decisions represent a reckless underinvestment in the skills needed for economic regeneration and are a body blow to the aspirations of young people not just in Barnsley, but across the country.

Barnsley stands to be particularly affected by the changes in benefits made by this Government. I fully agree that welfare needs to be reformed, but I do not believe that we are going about it in the right way. Above all, the changes do nothing directly to support new jobs. Across the country, there are five times as many claimants as there are open positions. We risk the injustice of penalising people for failing to get jobs that simply do not exist.

There are several ways in which the reforms undermine job creation and stop people getting off benefits. The assumption that the unemployed are earning the minimum wage in the calculation for universal credit will make it virtually impossible for many people to set up a business. The new enterprise allowance cuts out anyone who has not been on jobseeker’s allowance for six months. People coming off disability allowance and people who have just been made redundant who want to set themselves up in business are being told that they have to waste six months uselessly claiming jobseeker’s allowance before they will be eligible for the new enterprise allowance. That costs taxpayers more for people who want only to stand on their own two feet. Will the Government look again at their welfare reform programme as it clearly needs improvement?

The problems facing Barnsley are indicative of those facing towns across the country. The message seems self-evident: we can either sacrifice everything to balancing the books in a way that undermines the economic stability of the country or we can tackle these problems head-on. This is not a request for unlimited spending or an end to reform; it is just a request for the Government to do their bit so that we in Barnsley can fulfil our potential. For now, the Government’s approach is ensuring that places such as Barnsley bear a disproportionate burden. If this Government are to live up to their promises, if they are to make a claim to the basic principles of fairness, and if their cuts and reforms are to have any legitimacy with the British people, that must change.

15:47

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on securing this debate. I do not know whether this is his first Adjournment debate, given that he is a relatively new Member of the House—the second most recent if my calculations are right—but some of the language was a little flowery, and there was a strong desire to have a go at the Conservative Government. There seemed to be a moment of frozen time between 1997 and last year, but we will pass that by.

I agree with the hon. Gentleman that Barnsley should share in the sustainable, long-term growth that is the overriding priority of this Government for the whole country. We want to forge a new model of growth based on rebalancing the economy both geographically and in terms of sectors. We want to promote and encourage innovation and boost exports, which is a real key to enabling small and medium-sized enterprises to prosper, and not just rely on consumption fuelled by public debt.

The hon. Gentleman rightly highlighted the proud industrial heritage of Barnsley. He was right that it is working hard to continue its transition from the traditional coal mining and glass making industries to new industries such as the low-carbon, creative and digital industries. As he rightly highlighted, Barnsley’s potential has been shown by the decision of ASOS to move parts of its operation to Grimethorpe. I believe that it already employs some 500 people and is set to increase that to 1,000, making it Barnsley’s biggest employer. I am happy to put it on the record that that investment is evidence of the council, the business community and the economic development partners working together locally to make the best use of the area’s assets to bring in the long-term jobs that are important for the people of Barnsley.

As you will know, Madam Deputy Speaker, Barnsley is well positioned to benefit from the growth potential of both the Leeds and Sheffield city regions. That is why we agreed that, sitting where it does, and considering the travel-to-work market areas in which it sits, it should be a full member of both local enterprise partnerships. That underscores the principle behind the partnerships. We have introduced them so that they are founded on real, functional economic areas that actually reflect where businesses trade and people work. Through LEPs, we are encouraging business and civic leaders to come together to provide strong leadership at local level. After all, it will be those local leaders who really understand the barriers that are holding back growth in their area. Our policy is deliberately designed to empower them to set the agenda and work together to both drive sustainable growth and create private sector jobs.

In the past few months I have visited 18 local enterprise partnerships, including both the Sheffield and Leeds ones. I have to say, I have been immensely impressed by the ambition and capability of the boards and their members.

[Angela Smith]

Barnsley is responsible for the production of more than 90% of clay pipes in this country, which, as the Minister knows, is an energy-intensive industry. The Government have a role to play in ensuring that we keep those jobs in the UK and in Barnsley, and create more of them in that really important, environmentally friendly industry. Will the Minister acknowledge that he and his Department have a role to play in ensuring that such industries can stay in the UK and are not made uncompetitive by Government policy on carbon floor pricing?

[Mr Prisk]

I am not just pleased to acknowledge that, I am actively playing that role now. The Prime Minister is on record as saying that we do not want, as an unintended consequence of our policies to reduce carbon emissions, to somehow export jobs in such industries only to see the net effect on the climate worsened. The hon. Lady is absolutely right about that, and that is why, working with the energy-intensive industries, we have set in train an approach to develop a proper mitigation strategy. In that way we can help the generators of energy who need a carbon floor price without, as an unintended consequence, destroying the industry to which she refers and the brick, ceramic and steel industries. That is one challenge that we need to meet. It is a tricky balance, because some sectors wish to see a new regulatory framework and others do not. We are trying to ensure that we secure one group without destroying the other.

I mentioned that Barnsley is part of both the Sheffield and Leeds city LEPs. Sheffield city region is focusing on advanced manufacturing and technology, and I am sure that the hon. Member for Barnsley Central will be aware that the advanced manufacturing research centre, based at the university of Sheffield, was recently announced as one of the seven partners in the Government’s first technology and innovation centre. That will focus on high-value manufacturing, and it includes some world-leading businesses such as Rolls-Royce and Boeing. Sheffield city region’s LEP is looking to exploit the potential of the industries to which he referred—creative, digital and low carbon—in which there are real emerging opportunities. For instance, there are the emerging plans for the Dearne valley eco-vision.

Let us not forget that both Leeds and Sheffield LEPs have been charged with overseeing the launch of enterprise zones, as announced by the Chancellor. I worked in enterprise zones in the 1980s, and I do not share the hon. Gentleman’s natural scepticism of them. I see the benefit of them. I am not unaware of the danger that if we do not handle them right there can be an unnecessary displacement effect, but we have reformed them to allow the local business and civic leadership to tell us, through the LEP, including the Barnsley team, where they feel the zones should be. That is a critical difference from what we saw in the 1980s, which is so clearly emblazoned on his memory. Then, the zones were imposed from the centre. We are not doing that. We are asking the partnerships, “Where will the zones have the best effect?”

The enterprise zones will have an important effect. We will notice improvement through the business rates tax breaks, the business-friendly planning rules and the application of superfast broadband, which will kick-start private enterprise locally. The extra business rates that are collected as a result will then be retained and made available to work across the whole local enterprise area. I suspect that one or two businesses will begin to realise that Barnsley, sitting in the middle of two LEPs, is in quite an advantageous position in that context. I also suspect that the hon. Gentleman will fight to ensure that Barnsley remains in that position.

The Government are working with LEPs and enterprise zones on some potential additional incentives to suit local circumstances. This is particularly relevant in south Yorkshire, because those incentives include consideration of enhanced capital allowances for plant and machinery where there is a strong focus on manufacturing. We are also considering tax increment financing to boost the long-term viability of such areas, and ensuring that we provide specific and tailored support for inward investment through UK Trade & Investment. I shall say more about inward investment in a moment, because the hon. Gentleman referred to it a moment ago.

On Yorkshire Forward assets, and particularly the Barnsley markets project, I fully accept that the forthcoming closure of Yorkshire Forward has left the future of the project open. I also appreciate that the project is key to Barnsley’s ambitions to be, as the hon. Gentleman has said, a 21st-century market town. That is why I discussed the future of the markets with a delegation from Barnsley council a few months ago. I said then—and I am happy to say it again now—that we have never, and we will not, plan a fire sale of RDA assets in Barnsley or anywhere else.

The project is a victim of the economic downturn in recent years, but I understand that there is now a prospect of getting it going again, which is excellent news. The Government want a resolution that enables the project to be completed. We must have one eye on protecting the taxpayer, but local completion for the local economic benefit is firmly in our sights. I must be careful because discussions are ongoing, but let me put on the record that I welcome the positive discussions that the council is having on the future of the markets. My Department is working closely with local partners to see whether we can get that sorted out.

The hon. Gentleman asked about the regional growth fund. He is right. The first round was incredibly popular, which means that it was, to a degree, oversubscribed. However, I am pleased to tell the House that some 7,628 direct jobs will benefit from that first round, plus a further 2,716 indirect jobs. Most obviously—this is perhaps the most high profile initiative in some media circles—there was £6.4 million funding for the Haribo manufacturing plant in Normanton, and a £2 million R and D project under the new David Brown brand, Windserve. Perhaps most relevant to Barnsley is the £18 million programme for the Sheffield city gateway. That will significantly benefit the whole city region, including Barnsley metropolitan borough.

We are coming to the close of the second round stage—it closes on 1 July—the funding for which is twice that of the first round. Again, there has been a high level of interest. Lord Heseltine gave a briefing this morning for Members of Parliament. I do not know whether the hon. Gentleman had the chance to attend, but if not, he is very welcome to talk to my Parliamentary Private Secretary or to me to ensure that he is fully up to date.

May I clarify two points that the hon. Gentleman raised? First, LEPs can, and indeed are, bidding as part of that round. Secondly, small and medium-sized enterprises can bid, as I mentioned, through the various project schemes. This is one area in which they are getting together to put together sensible programmes that allow that. The House will understand that it is quite difficult to administer sensibly a £1 billion competitive fund down to sums of hundreds or small thousands of pounds. However, the £1 million limit has been adjusted to allow for projects and programmes, which has meant that a number of encouraging small and medium-sized bids are involved.

The hon. Gentleman referred to the importance of skills, and he is right. Skills are vital if we are to equip people for the new opportunities that lie ahead. That is why we are doubling to 24 the number of university technology colleges by 2014—to enable more young people to gain the technical skills they need from an early age; it is why we are funding up to 100,000 work experience placements for young people; and it is why we are investing £250 million in a substantial expansion of apprenticeships, which the hon. Gentleman acknowledged, by 75,000 places over the next four years. To help SMEs, a £75 million programme was announced in the plan for growth—support targeted deliberately to help SMEs that want to access advance-level and higher apprenticeships.

The hon. Gentleman asked whether LEPs should be mandated to drive skills locally. We do not need to mandate that because they are doing it already. One of the great things about the shift from regional development agencies to LEPs is that they allow that local initiative. I was immensely encouraged, certainly in my conversations with the Sheffield city region LEP, that they intend already to bring together their higher and further education college partners and their business partners. They can act as the co-ordinating point, and the nice thing is that we do not have to tell anybody to do that; they are going to do it of their volition.

The hon. Gentleman talked about the role of SMEs, and I entirely agree with him. They are crucial, whether in the economy of South Yorkshire or across the UK as a whole. As someone who started his business at the bottom of the last recession, I have been determined to ensure that the Government, with the remarkable support from everybody from the Prime Minister downwards, set out a path that will help SMEs start, grow and prosper. That is why we are cutting the corporation tax rates for businesses in Barnsley to 20p; simplifying the tax regime; and reducing the overall corporation tax headline rates, which will put an additional £1 billion in the coffers of business for it to reinvest. That is good for jobs. It is also why we are ensuring that new firms in Barnsley are exempted from national insurance contributions on the first 10 employees and extending the small business rate relief holiday—those rates so penalised smaller businesses trying to survive—for a further year from October; and why we took the decision substantially to expand the threshold for the entrepreneur capital gains tax relief from £2 million under the previous Government to £10 million under this Government. That will send the message that we want not only to cut tax rates to help SMEs start up, but to reward business owners as they develop their businesses. That is a crucial message, and one that was well received by businesses around the country.

Those measures are allied to a change in the way we deliver business support in Yorkshire and elsewhere. One of the key changes will be to strengthen how the manufacturing advisory service operates by putting together a £50 million package over the next three years. That outreach service helps SMEs in Barnsley and South Yorkshire, as well as the rest of the country, to improve their productivity, capability and strengths. That is an important shift.

The hon. Gentleman mentioned trade and the need to ensure not only that people can invest in the area, but that SMEs can expand. I believe that Barnsley’s businesses need more help in this field, which is why we have overhauled the former strategy and focused UK Trade & Investment on the future of SMEs and on strengthening their ability to reach new markets; and why we have asked the export credits guarantee department to improve substantially the financial support for exports. That will enable south Yorkshire businesses to apply for the new export enterprise finance guarantee, which will underpin their ability to borrow money to reach new markets. It is also why we have tried to establish simpler trade credit insurance schemes, which are an important way of ensuring that businesses have the confidence to start that process.

The Government share the hon. Gentleman’s desire to see Barnsley flourish, along with the rest of the country. That is why we are going all out to create a business environment that will give companies the confidence to start, invest and grow, and it is why local communities are being freed from central control and mandates. It will enable them to determine their own future, most obviously through their LEP. This, in a way, is the key to achieving long-lasting economic regeneration and sustainable growth in Barnsley and elsewhere. I can assure him and the House that this will continue to have our relentless focus now and in the months and years ahead.

Question put and agreed to.

16:34

House adjourned.

Ministerial Correction

Thursday 16th June 2011 Ministerial Corrections

Thursday 16 June 2011

Foreign and Commonwealth Office

Thursday 16th June 2011 Ministerial Corrections

Topical Questions

The following is the answer given by the Minister for South Asia, the hon. Member for North East Bedfordshire (Alistair Burt), to a question from the hon. Member for East Lothian (Fiona O'Donnell) during Foreign and Commonwealth Office Question Time on 14 June 2011.

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

Ahead of Channel 4’s screening this evening of “Sri Lanka’s Killing Fields”, what recent assessment have the Secretary of State or Ministers made of the credibility of the Sri Lankan Government’s lessons learned and reconciliation commission and its new deadline to report in November this year?

[Alistair Burt]

I spoke this morning to the Foreign Secretary of Sri Lanka, who had the opportunity to update me on some positive measures that were being taken in relation to Jaffna. I was in a position to remind him of the importance of having a credible and independent investigation of the various allegations that are now very much on the table from the United Nations and others. It is essential that those are dealt with. We note the new timetable for the LLRC to report in November, but, however long this takes, it will not be possible for Sri Lanka to move forward unless it has addressed some of the horrors of the past.

[Official Report, 14 June 2011, Vol. 529, c. 633-34.]

Letter of correction from Alistair Burt:

An error has been identified in an oral answer given on 14 June 2011. The correct answer should have been:

[Alistair Burt]

I spoke this morning to the Foreign Minister of Sri Lanka, who had the opportunity to update me on some positive measures that were being taken in relation to Jaffna. I was in a position to remind him of the importance of having a credible and independent investigation of the various allegations that are now very much on the table from the United Nations and others. It is essential that those are dealt with. We note the new timetable for the LLRC to report in November, but, however long this takes, it will not be possible for Sri Lanka to move forward unless it has addressed some of the horrors of the past.

Petitions

Thursday 16th June 2011 Petitions

Thursday 16 June 2011

Arms Exports

Thursday 16th June 2011 Petitions

The Petition of residents of Wirksworth and the Derbyshire Dales,

Declares that the petitioners strongly oppose the current sale of UK arms to any country currently engaged in conflict, or any country known to be a repressive regime which pays scant regard to human rights; and further declares that the petitioners believe that the hurried revocation of UK export licences for arms and crowd control equipment which had been freely sold to Libya makes their point all too vividly.

The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to prevent the further sale of UK arms and riot control equipment to any country engaged in conflict or with a record of human rights abuse.

And the Petitioners remain, etc.—[Presented on 16 March 2011, Official Report, Vol. 525, c. 4P.]

[P000903]

Observations from the Secretary of State for Foreign and Commonwealth Affairs:

The Government take their arms export responsibilities very seriously. Respect for human rights and fundamental freedoms are mandatory considerations for the assessment of all export licence applications. We do not export equipment where there is a clear risk it might be used for internal repression.

The UK operates one of the most robust and transparent arms exports control systems in the world. All applications for the export of controlled military goods are assessed, on a case-by-case basis, against the Consolidated EU and National Arms Export Licensing Criteria. This criteria includes the vital provision to revoke licences in the light of changing, unexpected circumstances.

In response to events in the middle east and north Africa, I have commissioned a review of Government policy and practice with regard to the export of equipment that might be used for internal repression, in particular crowd control goods. The Foreign and Commonwealth Office is leading this internal review in close consultation with the Department for Business Innovation and Skills (BIS) and the Ministry of Defence (MoD). The Government will be reporting back on the review to Parliament as soon as practicable.

Parking Restrictions (Ablewell Street, Walsall)

Thursday 16th June 2011 Petitions

The Petition of the business owners and customers of Ablewell Street, Walsall,

Declares that the Petitioners are opposed to the parking restrictions on Ablewell Street.

The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to encourage Walsall Metropolitan Borough Council to allow a parking amnesty of at least 30 minutes.

And the Petitioners remain, etc.—[Presented by Valerie Vaz, Official Report, 24 May 2011; Vol. 528, c. 891.]

[P000923]

Observations from the Secretary of State for Transport:

The responsibility for parking restrictions rests with the relevant local authority and it is for them to decide on appropriate policies that balance the needs of local residents, emergency services, local businesses, and those who work in and visit the area.

Local authorities have a crucial role to play in relieving congestion and improving road safety and the environment.

Where problems occur, the Government look to local authorities to use their traffic management powers to address these issues which may include the introduction of parking restrictions to balance the supply and demand for road space in the light of local needs and circumstances.

Where local authorities have obtained civil parking enforcement (CPE) powers under the Traffic Management Act (TMA) 2004, they can enforce their own parking policies. The Government recommend that all local authorities take on CPE powers so that the police may concentrate on the more serious priorities.

The Government do not intervene in local parking matters as to do so would contradict the coalition Government’s policy to promote localism.

Westminster Hall

Thursday 16th June 2011 Westminster Hall

Thursday 16 June 2011

[Mr Joe Benton in the Chair]

BACKBENCH BUSINESS

Thursday 16th June 2011 Westminster Hall

Student Visas

Thursday 16th June 2011 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Jeremy Wright .)

14:30

[Paul Blomfield (Sheffield Central) (Lab)]

It is a pleasure to open the debate with you in the Chair, Mr Benton. I thank the Backbench Business Committee for allocating time for consideration of this important issue. My request was supported by hon. Members from all three main parties. In that spirit of consensus, I will begin by endorsing the words of the Home Secretary when she made her statement on student visas to the House:

“The UK has a worldwide reputation for providing quality education to overseas students, and Britain is rightly the destination of choice for many people wishing to study abroad”.—[Official Report, 22 March 2011; Vol. 525, c. 855.]

Indeed, that reputation—that quality—has made UK education a major export. My constituency includes both our city’s outstanding universities—Sheffield, where I spent most of my working life, and Sheffield Hallam, where I was a governor for seven years in its previous incarnation as Sheffield City polytechnic. The issue is critical for those institutions, as it is for many across our country. Some 12% of the university of Sheffield’s income—a total of about £50 million—derives from international student fees, with more than £20 million of Hallam’s income coming from the 10% of their students who come from overseas. In addition, the two universities estimate that their international students spend around £90 million a year in the Sheffield city region.

We also have Sheffield college, with 300 overseas students contributing £1 million in fees and probably a further £1 million in local spending. Also in my constituency is Sheffield international college, which provides language courses for up to 1,000 students a year paying £10 million in fees and contributing up to £15 million to the local economy. Overall, international students contribute approaching £190 million a year to Sheffield’s economy. Just pause to think about that in terms of the number of jobs and businesses they support in just one city.

The UK is the second most popular student destination in the world after the United States. Overall, the international student market is estimated to be worth £40 billion to the UK economy. It is a growing market in which we have been increasingly successful. From 2000 to 2008, our world market share rose from 1% to 11%, while at the same time the US share dropped from 24% to 19%, so there is a lot at stake in the changes that we make to our student visa system.

[Andrew Selous (South West Bedfordshire) (Con)]

I congratulate the hon. Gentleman on securing this debate. I support the Government in wanting to have robust checks on the level of students coming in, but there is a particular issue for this year where offers have been made. The universities thought that they could have some discretion on how the English tests were set. Where offers have been made, there is a particular issue this year, given that the proposals are so prescriptive. Does he agree with that point about the time scale?

[Paul Blomfield]

I thank the hon. Gentleman for that intervention, because I very much agree with that point. It is one that I intend to come to. There are two issues that we need to cover: the proposals overall, where relatively small changes would make a significant difference, and the transition to the new system.

I accept that the Government recognise the significance of the changes and the enormous concern that exists within Parliament and across the sector. In their consultation on the original proposals, the Home Office received more than 30,000 submissions. I recognise that the Government made significant changes that were widely welcomed within the sector, but there remain significant points of concern that our universities and colleges believe will threaten recruitment and therefore threaten our economy. Indeed, as hon. Members will be aware, the Home Office impact assessment, published on Monday, demonstrated that the proposals were likely to cost the UK economy a shocking £2.4 billion, and perhaps up to £3.6 billion.

[Mr Ben Bradshaw (Exeter) (Lab)]

Does my hon. Friend agree that the impact is devastating for English language schools in my constituency? They have already been devastated in terms of applications as a result of the changes. If we look at the turnout today, the geographical spread of hon. Members’ constituencies, and the number of them present, shows that there is a serious problem that the Government need to get a grip on.

[Paul Blomfield]

I very much agree with my right hon. Friend’s point. There is concern across the sector, in higher and further education, in language schools, and, indeed, across the whole country. Judging by the hon. Members present today, I am sure that will be reflected in the contributions to the debate.

I do not believe that the Government are deliberately seeking to damage the economy through these measures, but, by their own assessment, that will be the effect. Over the past few weeks, Ministers have told us that good government is about listening, pausing the legislative process and making changes to get things right. Student visas are another issue where changes are needed to get things right, so let me move to the areas that I believe need attention. First, on English language requirements, my point is not about fundamental change to the Government’s proposals, but about getting implementation right. Let me start with universities. The UK Border Agency’s statement of intent for the new system, which was published in March, stated that:

“We will allow higher education institutions to choose their own method of assessing the English language competence at B2 level.”

However, the subsequent UKBA clarification document, which was issued in April, requires higher education institutions to demonstrate B2 levels of competence in all four components. It also says that, if there is any doubt about a student’s language, UKBA is likely to ask them to undertake their own approved tests—it is a crucial point—even if the institution has made an unconditional offer. That clearly conflicts with UKBA’s own statement of intent. In my constituency, Sheffield’s universities accept only students with good English, but they do not currently require students to meet the specific subset scores now demanded by UKBA; they do not need to.

Only this week I was talking to the vice-chancellor of the university of Sheffield. He gave me the example of what he described as a brilliant physics PhD student who had contributed enormously to one of his research groups, but who probably would not have passed the language requirements.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

My own university, Keele, has a strong record in attracting overseas students. It also makes a vital financial contribution. The vice-chancellor has written to me about the changes. Keele has more than 1,700 offers outstanding at the moment, many of which have to be summarily revisited. Like my hon. Friend’s universities and most other universities, it accepts only students with good English capabilities, but it now finds its discretion has been removed. Will he urge the Minister and the Government to reconsider the issue, particularly with regard to any unintended consequences?

[Paul Blomfield]

I thank my hon. Friend for his intervention and join him in urging the Minister to look again at that issue. We should trust the universities to determine adequate levels of English competence. After all, they have, through their own initiative and ability, developed our education into this worldwide export earner.

[Tony Lloyd (Manchester Central) (Lab)]

My hon. Friend is making an excellent speech. He talks about the offers that universities have made that may now have to be withdrawn. The vice-chancellor of the Manchester Metropolitan university, whose views will be very similar to those of people up and down the land, said to me that he is now in the difficult position of having

“to notify students who have accepted offers that they must now meet new conditions. We are also concerned about the legal ramifications of altering the terms of offers already accepted.”

In other words, the universities could be sued and lose out financially above and beyond the visa withdrawal.

[Paul Blomfield]

That is absolutely right. This afternoon, we need to consider the transitional arrangements for the introduction of these new requirements and the position in which they put our universities.

[Richard Fuller (Bedford) (Con)]

The hon. Gentleman is making some sensitive contributions on this important issue. In response to an earlier intervention, he talked about trusting our universities to assess English. Does he also accept that we are going through a period of time in which that trust in some colleges has not been something that we can rely on? How would he ensure that immigration student visas are there for valid educational reasons and that there is enough scope and control, while, at the same time, allowing that amount of trust to the colleges that he is talking about?

[Paul Blomfield]

The hon. Gentleman raises an important point. Part of the difficulty with this debate is that it has focused on discouraging international student numbers from the demand side. We should be looking at it from the supply side by dealing with those institutions that forfeit trust. I agree with the highly trusted sponsor system, which is the same trajectory of policy as that of the previous Government.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate my hon. Friend on securing this debate. Overseas students are absolutely vital in Oxford both for the universities and the many language schools. Is not one damaging feature of what the Government have done the erection of this huge bureaucratic maze through which institutions have to go? Would Government Members not be complaining rightly about red tape if this applied to any other area of exports? Clearly this issue has been exempted from the red tape moratorium. Is not the answer to bring forward a system that combines highly trusted status, proper inspection and a proper operation of country risk profiles?

[Paul Blomfield]

My right hon. Friend makes an important point from his huge experience and from the fact that there are two excellent universities in Oxford and I certainly agree with him.

Let me move on to the problems that have been created by the speed of implementation. When the Home Secretary was announcing the revised tier 4 arrangements in March, she said:

“We recognise the need to implement these changes in a staged manner that minimises disruption to education providers and students.” —[Official Report, 22 March 2011; Vol. 525, c. 858.]

We all know, I think, that that is not happening. The new requirements took effect on 21 April at an advanced stage of the university’s admission cycle and at a point where a number of offers had been made and, crucially, had been accepted. In Sheffield, our two universities and Sheffield international college had already made more than 20,500 offers to prospective students for degree-level courses and currently have 1,300 offer holders and applicants for English language programmes. All those offers have to be revisited as applicants may now no longer meet the UKBA’s new subset score requirements. The colleges must now notify students who have accepted offers and who, therefore, have a legally binding contract with them that they must meet new conditions. They are deeply concerned about the legal ramifications of such a change and the damage that could be done to their reputation. They have to alter the terms of the offers that have already been accepted. Could that not be avoided by having transitional arrangements in place to enable students to be admitted in this new academic year on the terms on which offers have been made?

[The Minister for Immigration (Damian Green)]

Let me clarify this matter. If the certificate of acceptance was issued before the new rules came in, the new rules do not apply. There is no retrospection in this. Before this hare is set running, let me stop it because it is simply not true.

[Paul Blomfield]

I thank the Minister for his intervention, but I have to say that that is certainly not clear to our universities.

[Lilian Greenwood (Nottingham South) (Lab)]

Does my hon. Friend share the concerns expressed by the university of Nottingham in my constituency? Not only were these changes implemented very quickly, but detail on the changes is released in policy guidance and is changed on numerous occasions. The university says that the UKBA’s list of approved English language qualifications in the policy guidance changed numerous times between 21 April and the end of May, which is when there is a peak in the number of admissions that the university has to deal with.

[Paul Blomfield]

My hon. Friend makes an important point. It goes back to the fact that the Government are not achieving the Home Secretary’s desired intent, which is to ensure that these changes are introduced in a non-disruptive way.

I return to the point that the Minister made. Clearly, there is confusion within our universities, so it might be helpful if he undertook to liaise with Universities UK to put out a statement saying that all offers made will be honoured without the requirement to meet the new visa regulations—if that is what he said.

[Damian Green]

If an unconditional offer was made and accepted, the certificate of acceptance would have been assigned before 21 April and that remains valid for six months and therefore for the coming academic year. I met Universities UK and it was as a result of our discussions that the new guidance was put on the website. I am trying hard to meet the needs of both universities and hon. Members in this debate. To those who ask for flexibility and for me to talk to Universities UK, I can say that that is exactly what I have been doing. As a result of that, we have now produced new guidance, and I hope that hon. Members are satisfied with it.

[Paul Blomfield]

I thank the Minister for that contribution, but there is still some need for clarity. As my hon. Friend the Member for Nottingham South (Lilian Greenwood) has indicated, there is still a great deal of uncertainty. A lot of activity is currently under way in our universities to re-verify the offers that have been made.

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

I congratulate my hon. Friend on securing this debate. Did he, like me, hear the Minister say that the position was the same for those students who had received an unconditional offer and an acceptance? I am not sure whether I heard the Minister clearly. If that is the case, it does not deal with the many students who had conditional offers, which is one of the problems that the universities and colleges are facing.

[Paul Blomfield]

That is a helpful observation from my hon. Friend. Will the Minister cover that point in his later remarks?

May I raise another transitional problem that was mentioned to me by the academic director of Sheffield international college regarding its preparatory programmes for the university? Sheffield international college provides pathways programmes. About 600 of its students each year go on to one of our universities in Sheffield. These students came to the UK with a conditional offer to proceed to the university of Sheffield if they succeeded with their language course at Sheffield international college.

They arrived in good faith but now face a change that has required a small number of them to sit additional English exams in their final term so that they can renew their visa. The new regulations require minimum levels of achievement in elements of the English language test that were not required on the students’ entry to the UK. Consequently, they find themselves in the final term of their programme working hard to try to stay in the UK to complete it rather than working hard to achieve their conditional requirements.

In addition, the new requirements came into force on 21 April, during the Easter break, and that has reduced the amount of time that some students have had to fulfil them. Earlier this week, I was contacted by Sheffield international college about four Chinese students in my constituency whose visas expired yesterday. For the past seven weeks, the college has been trying frantically to arrange for the students to sit the new tests, in different places across the country, before their visas expired. The students understand that they have to pass these new tests so that they can apply to extend their visas, but it has not been possible for them to sit the tests because the UKBA testing system has been unable to offer a sufficient number of tests. The system simply cannot match the demand that has been created by the chaos caused by the revisions of the visa requirements. In turn, that has led to three of the students at the college deciding to return to China this weekend. They have been unable to complete their course, their year of study has been wasted and potentially they will be unable to progress on to their degree programmes. How many other students are there across the country in a similar situation and what reputational damage does all that do to UK education internationally?

[Jeremy Corbyn (Islington North) (Lab)]

If those particular students have been asked to return to China, can my hon. Friend confirm whether they have been told that they cannot re-enter the UK for a further five years, on the basis of a failed immigration application, or will they be allowed to return to the UK when they have completed the test?

[Paul Blomfield]

I thank my hon. Friend for his intervention. I should clarify that the students have not been asked to return to China. They decided to return to China because they have been unable to secure the tests that they now need to sit in order to proceed to university on the basis of their original offer.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I congratulate my hon. Friend on securing this debate. He is, of course, a member of the Business, Innovation and Skills Committee, which visited China earlier this year. While the Committee was there at the end of February and the start of March, robust representations were made—let me put it like that—by both businesses and students in China about the forthcoming visa regime in the UK. The evidence that my hon. Friend has just given reinforces the negative impression that exists in China about the welcome that Chinese students will receive here. Does he agree that that is significant not only for the intake of students from China, with all the benefits that accrue from that intake, but for the long-term relationships, particularly the long-term business relationships, that could accrue from a country that will be a leading global economy?

[Paul Blomfield]

I very much agree with my hon. Friend. Only yesterday I was talking to the pro vice-chancellor of one of our north-western universities. It has an associated campus in China, which he visited recently. He made the point about the damage that is being done to our reputation abroad. There is another issue to which the Minister might want to refer later. Notwithstanding the changes that have been made, there has been residual reputational damage, which we need to address as a country by working with our universities and colleges on a positive promotion of Britain as a country that is open for business.

[Mr Andy Slaughter (Hammersmith) (Lab)]

My hon. Friend is making a very good case, assisted by the fact that there are about 25 Members here to support him and also by the fact that the Minister has had to intervene regularly to try to clarify the Government’s position.

My hon. Friend has identified two specific problems. First, I have several language schools and other schools in my constituency that are suffering, so I know that there is great competition internationally in this field. We were ahead of the game and now we are behind it. That is causing not only reputational damage but genuine economic damage to very good schools, which may go under because the Government are sending out all the wrong signals.

Secondly, I received an e-mail from Leiths cookery school, which is in my constituency. It was told two months ago that instead of 20 places for non-EU residents, it would have only three. That makes not only a big business difference but a big culinary difference to that school. [Laughter.] We are now becoming a bit of a laughing stock in the international market because the Government are constantly chopping and changing in accordance with a political agenda, which is undermining education in this country.

[Paul Blomfield]

I thank my hon. Friend for his contribution, which echoes the concerns that I and other Members have expressed.

I now want to discuss a second area of concern, which is the changes that are being made to the post-study work route. Having worked with international students, I know that post-study work opportunities are an important factor in their choice of country in which to study. In a question that I asked when the Home Secretary made her statement on student visas on 21 March, I regretted the fact that she dismissed post-study work and said that international students should simply judge which country to study in on the strength of the academic offers that they received. As anyone who works with or in universities will know, the reality is that the total offer is the critical factor in a student’s choice of which country to study in.

Post-study work provides students with the chance to consolidate their learning in a relevant context and to obtain full value from what has been a considerable investment in the UK educational system. Equally, having talked to companies in Sheffield, I know how much they value the chance to recruit talented international graduates, particularly those with a PhD, for a time-limited period.

[Keith Vaz (Leicester East) (Lab)]

In evidence to the Home Affairs Committee’s inquiry into student visas, post-study work was critical. However, we also need to look at the basis of our discussion of student visas. Those who come as students and stay on specifically to work in a particular field because of the degree that they have managed to obtain are actually not migrants at all, because they wish to leave the country eventually. Is it not the point that if they are not migrants they should not even be included in the immigration figures?

[Paul Blomfield]

I thank my right hon. Friend for his intervention and, having read the Home Affairs Committee’s report on student visas, I also thank him for the quality that that report has added to the discussion of this issue. I very much agree with him about the specific point that he has just made, namely that we should not consider international students as migrants. Certainly immigration is an issue and when I talk to people on the doorstep in my constituency they express concern about it, but nobody has ever expressed to me any concern about students being in Sheffield.

I know that the Minister, when he addresses this issue, will say that we are bound by the requirements of the United Nations, which defines migrants as those travelling to another country for more than 12 months. However, our main competitor in this market is the USA and it has chosen not to define students as migrants.

[Nic Dakin (Scunthorpe) (Lab)]

I congratulate my hon. Friend on securing this debate. Earlier this week I spoke to the vice-chancellor of Lincoln university and she told me that the current arrangements for post-study work gave the UK a competitive edge in the market for international students. Does my hon. Friend share that view and, indeed, has he culled that view from universities across the country?

[Paul Blomfield]

I thank my hon. Friend for his intervention. That view has certainly been expressed to me on many occasions by many vice-chancellors. It also reflects my experience of working with international students. As I said earlier, this is a market in which we have been spectacularly successful, growing our world share of it from 1% to 11% at the same time as the USA’s world share of it dropped. One of the contributory factors in that decline in the USA’s world share was the way in which the USA messed around with its own visa requirements during that time.

[Mr Stewart Jackson (Peterborough) (Con)]

I congratulate the hon. Gentleman on securing this important debate. However, in fairness, he is not using a holistic approach. The Home Office concedes that one in five students in higher education and on pre-degree-level courses will become a de facto economic migrant, and therefore the complete fiscal impact, given the net rise in immigration, will clearly include an effect on the public purse and on the delivery of important public services.

[Paul Blomfield]

I assume that the Home Office, as a diligent Department, took account of all the relevant issues when it published its impact assessment earlier this week and indicated that the proposals’ effect on the economy would be minus £2.4 billion.

[Mr Andrew Smith]

My hon. Friend is being very generous in giving way. Is not the response to the hon. Member for Peterborough (Mr Jackson) that he is ignoring these graduates’ contribution through their wealth creation, skills and taxation payments? If the Government will not listen to us, should they not listen to Sir James Dyson, who not only sits on the Prime Minister’s business advisory group but headed an innovation taskforce for him? Sir James said:

“It is sheer madness to be effectively chucking out graduates who we desperately need. I am afraid what it will end up doing is driving firms like us abroad because we simply can’t get people to do our research and development.”

[Paul Blomfield]

I very much agree with my right hon. Friend. I have talked to companies in Sheffield, and they say that the opportunity to have some of the best intellectual talent in the world working with them in product development and improving manufacturing processes is a startling benefit that our city gets from its two universities.

I will move on to the specifics of an area that the Government have seen as problematic: the post-study work route. I understand, unless there are more changes that the Minister wants to share, that under the new proposals international graduates of UK universities will, from April 2012, need a confirmed job offer for a graduate level role—that is fair enough—but which pays at least £20,000, and they will need to apply for a tier 2 visa for the job before their tier 4 visa expires. There is nothing wrong with limiting work to that of a graduate level, but the imposition of a £20,000 salary threshold is too restrictive for some sectors and regions. Sheffield university tells me that its average graduate starting salary falls below £20,000: in arts and humanities it is £16,600, in pure science it is £16,100 and in social sciences it is £18,000. According to the graduate employer survey of 2011, graduates in Yorkshire should generally expect a starting salary of between £15,000 and £18,000.

One of Sheffield university’s strengths is architecture. The students’ union international students’ officer, Mina Kasherova, in written evidence to the Business, Innovation and Skills Committee, highlighted the problems facing architects: they need to gain work experience after graduation to obtain their professional qualification, but they will not be able to get such a post with a salary of more than £20,000 through tier 2.

[Richard Fuller]

This is an open question. The hon. Gentleman made the point that the average salary requirement for a student coming to this country to go on to post-graduate study would be higher than that which a student from this country would normally accept. Does he believe that we ought to set the bar higher for international students, as a point of principle?

[Paul Blomfield]

We should ensure that we make a realistic offer to students coming here. If we say that we recognise, as the Home Office has, and as the Government have in their reconsideration of their original proposals, that post-study work is part of the attraction of coming to this country, we have to be able to offer that work meaningfully, for the benefit both of the students and, as some of my hon. Friends have said, of companies here. Universities UK has pointed out that this problem extends to a range of professionals, including trainee solicitors, pre-registration pharmacists and optometrists.

The second problem in relation to post-study work is the reduction of the period that students have in which to find a job, from one year to that indicated by the date of expiry of their tier 4 visas. Universities UK points out that recruitment in certain roles and sectors is cyclical, and that some individuals might not be able to apply for certain roles because their visas will have expired before the recruitment process takes place. Will the Minister consider applying some flexibility and common sense to the starting salaries and the time period?

A third area of concern is the maximum length of study. Universities UK is worried about limiting the maximum total period of leave to five years of study at national qualifications framework levels 6 and 7. If that limit is rigidly applied, it will prevent international students from studying a four-year undergraduate degree followed by a two-year postgraduate programme. I recognise that there will be exceptions, but they should not be limited to courses that lead to the award of a professional qualification or registration, because there are many other long courses at both undergraduate and postgraduate level. The limit is causing concern to Scottish universities in particular.

The fourth area of concern is a very distinct one, and I mention it on behalf of the hon. Member for Stourbridge (Margot James), who would have been here herself but for the demands of a Public Bill Committee. I understand that she has corresponded with the Minister on this, and is awaiting a reply to her latest letter. In her constituency, as in mine, the Ruskin Mill Educational Trust runs a college that provides practical skills therapeutic education for young people aged 16 to 25 who have a range of learning difficulties. It offers just five places each year to overseas students and, due to the specialist nature of its work, the annual fees are between £70,000 and £100,000. The students there clearly work at or below NQF level 1, and therefore will always fail to meet the requirements for level 3. This is clearly not abuse of the system but something that needs a common-sense and flexible approach.

All the issues I have raised are ones of detail, and dealing with them will not undermine the Government’s objectives. Failing to deal with them, however, will undermine the recruitment efforts of our universities and colleges. In conclusion, I wish to make a general point about the Home Office’s impact assessment. It is extraordinary that we seem to be pressing ahead with proposals—the Minister has signed them off—that it has been demonstrated will cost the economy possibly £3.6 billion, including £170 million in tuition fees over the next four years. That will mean millions lost to our universities at a time when they can least afford it because of the changes that they undergoing, and billions lost to the economy at a time when we can least afford it. I hope, therefore, that the Minister will genuinely reflect on these issues and make changes that will not undermine his policy goals, but avert that damage.

[Several hon. Members]

rose—

[Mr Joe Benton (in the Chair)]

Order. Before I call the next speaker, I take the opportunity to mention that I intend to commence the winding-up speeches at no later than 5 pm. A number of Members have indicated that they wish to speak, and obviously everything will be done to try to get everyone in, but I ask you all to bear that in mind.

15:10

[Mr Stewart Jackson (Peterborough) (Con)]

It is a pleasure to serve under your chairmanship for what I think is the first time, Mr Benton. I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on his cogent, intelligent and measured speech. If I might make one slightly negative observation, it was perhaps very narrow, and I understand that, given that he pursued his constituency interest, rather than looking at the overall picture on immigration. It is a mark of how important this issue is that the hon. Gentleman has the support of so many of his hon. Friends, who will no doubt make eloquent pleas on behalf of the higher education and other institutions in their areas.

The Government’s policy must be seen not simply in a vacuum or within the narrow parameters of student visas, but in the context of the Government’s commitment to reducing net immigration. That policy position is supported by a substantial majority of the British electorate; it was clearly enunciated in the Conservative election manifesto in May 2010 and it was recapitulated in the coalition agreement of that month, which is the basis on which this Administration put forward their policies.

I have to say that the position we have taken was also a constituent part of the policy pursued by the former Government. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne), and even the right hon. Member for Morley and Outwood (Ed Balls), have expressed concerns and linked the inability to deal with immigration to the fact that the Labour party achieved its second-worst electoral result last year.

[Yasmin Qureshi (Bolton South East) (Lab)]

Does the hon. Gentleman not agree that these measures will only make the UK a less competitive and less attractive destination in the international student market, which is a significant growth area?

[Mr Jackson]

Time permitting, I hope to articulate the slightly wider view that universities have not only a narrow remit to deliver education to their paying customers as part of a contractual relationship, but a social responsibility to educate the people of this country appropriately.

[Richard Fuller]

My hon. Friend makes an excellent point. One problem with the lens through which the previous Government looked at immigration policies was that it often focused predominantly on economic perspectives. Having had years of immigration, which have kept working wages down, and hearing that we need different immigration policies based on economic benefits, the British people want to see immigration brought under control first before they move forward. Does my hon. Friend agree?

[Mr Jackson]

My hon. Friend makes an astute point. Incidentally, there is no empirical, anecdotal or demonstrable academic evidence to show that there will be a significant impact on good-quality institutions and the courses they offer. That is simply because we are going forward incrementally, and we cannot yet assess the impact.

[Yasmin Qureshi]

I thank my hon. Friend for giving way. He says that there is no empirical evidence, but all of us have received letters from university chancellors in our constituencies and adjoining constituencies. They are specifically and clearly saying that the Government’s measures will radically affect their institutions financially and in terms of the facilities that they provide for other students. How can the hon. Gentleman say what he has said?

[Mr Jackson]

I am touched that the hon. Lady calls me her hon. Friend, and I am happy to accept that sobriquet. I would direct her to the recent comments by Nicola Dandridge of Universities UK, who said that the Government’s proposals

“take into account many of the concerns expressed by Universities UK and will allow British universities to remain at the forefront of international student recruitment.”

That was said after an exhaustive, detailed and comprehensive consultation with key stakeholders, including language schools, universities, colleges of further education and others intimately involved in the system.

[Mark Lazarowicz]

If I am called to speak, I hope to refer to a letter that I have had from the principal of Edinburgh university, Professor Sir Timothy O’Shea. The university was founded in the middle of the 16th century, and its chancellery recently passed a humble address on the occasion of the Duke of Edinburgh’s 90th birthday. Is the hon. Gentleman saying that it is not a reputable institution and that the concerns raised by the principal are not real?

[Mr Jackson]

The former Prime Minister was an alumnus of Edinburgh university. However, none of us is in any doubt that we live in an age of globalisation and that we must be competitive. The Government’s template and watchword is that we will be open for business and geared to growth across a number of areas, including manufacturing, services, finance and higher education. We all understand that that approach is based, in the higher education sector, on the reputation, kudos and prestige of the institutions involved, and none of us has any argument with that. I truly and sincerely believe that the Government and my hon. Friend the Minister would not hastily introduce proposals that damaged that reputation.

The onus is on those taking the Government to task to demonstrate that the proposals will damage the reputation of the higher education sector and that they are not—as I believe, and as the Chairman of the Home Affairs Committee would surely concede, given the views expressed to his Committee—about dealing with bogus institutions, bogus students and overstayers. I will talk later about the financial impact, which I mentioned in my intervention on the hon. Member for Sheffield Central.

The wider issue is that if we do nothing about net migration, we will have a population of 70 million in 20 years and one of perhaps 80 million in 50 years. Under the Labour Government, net migration quadrupled to 237,000 per annum between 1997 and 2007. With the exception of Malta, England is now the most overcrowded country in Europe, along with the Netherlands. Under the former Government, 5.2 million people came into this country as foreign migrants, while 2 million left.

As I said, senior parliamentarians have noted that significant mistakes have been made. I draw hon. Members’ attention to the projections made about European Union migration before the free movement directive came into force in 2004. Officials at the then Home Office told us that about 13,000 to 15,000 EU migrants would seek temporary work under the worker registration scheme, but they were out by a factor of 25, if not more.

[Keith Vaz]

I have no objection to the hon. Gentleman’s widening the debate, because he touches on the context of the Government’s actions. However, on his last point, we cannot do anything about EU migration. Does he not agree that we should be careful about restricting genuine people from taking genuine, legal routes to come here to study, because we cannot stop people coming from the EU? Does he not also agree that it is essential that we know the figures—how many people come in and how many go out—when we debate immigration? To this day, we do not have accurate figures.

[Mr Jackson]

The Chairman of the Select Committee makes his point in his normal charming and intelligent way. My wider point, which he anticipates, is that the former Government made no effort to anticipate EU and non-EU immigration. Indeed, it has recently come to light that they suppressed research commissioned by the Department for Communities and Local Government, which looked at some, although not all, of the negative consequences of large-scale migration.

All I am asking in considering the specific and narrow point about tier 4 student visas is that we genuinely look at the cost-benefit analysis for the wider community. Yes, we can argue about nuances and value judgments made by individual higher education institutions, but at the same time we must concede that within the wider policy framework, these decisions, which are essentially about large-scale migration, have wider ramifications. That is consistent with the Government’s view that we must move away from the inexorable conveyor belt towards a population that will be significantly greater within 25 years than the population of Germany or France, for example.

The policy has been flexible and there has been appropriate consultation. It is aimed principally at bogus students and overstayers. I would like to see the evidence that HE institutions will be adversely affected, because the level of graduate unemployment across all disciplines in the UK stands at something like 20%, which is pertinent when considering public policy on the recruitment of international students who might stay to work after the conclusion of their studies. That is fair. If we look at the fees regime and at how financial arrangements for universities will progress over the next few years and measure that against demand, we see that because of our reputation and because we have the kudos of being a principal centre of superb higher education in the world, the demand for people across the world will remain high, whether for chemical engineering, languages, dentistry or humanities.

[Lilian Greenwood]

Although many universities, including my universities in Nottingham, say that this will have a detrimental impact on their ability to recruit students and therefore on economic activity in the UK, the hon. Gentleman suggests that we must wait until that damage is done before the Government will act. That seems immensely short-sighted. Everyone is warning that this will cause damage and he wants to wait until the damage is done.

[Mr Jackson]

The evidence given by Migrationwatch UK for example—[Interruption.] Migrationwatch UK has put forward an evidence-based, robust and demonstrable case. It may not be to the taste of many Opposition Members, who are reminded on too many occasions of their abysmal failings in the management of immigration on behalf of the citizens of this country. Nevertheless the case is not usually challenged in terms of its robustness, and I am sure that the Chair of the Home Affairs Committee would concur.

[Keith Vaz]

It may come as a surprise to the hon. Gentleman that when Sir Andrew Green gave evidence to the Select Committee, he did not regard students as migrants. His main concern was those who came illegally and bogus colleges, not genuine students coming to the country to support University Centre Peterborough.

[Mr Jackson]

The right hon. Gentleman has reiterated the points I am making. I will not repeat verbatim what Sir Andrew said in his evidence to the Committee in February—I think—but he said that he was mostly concerned about pre-degree education, language schools and “bogus” colleges and that he did not see the increase in student numbers per se as a “problem” for immigration. I do not dissent from that view; he and are at one. I resist the premise on which the hon. Member for Nottingham South (Lilian Greenwood) proceeds, but I must be very careful because my brother is a professor at Nottingham university, so I am aware that it is a superb institution—he would expect me to say that, but nevertheless it is true.

The issue is not about reducing the number of students per se, but about closing loopholes and ensuring that we retain our integrity and reputation. If we look at pre-degree level courses, we must in fairness also look at the evidence over past years and draw a link between the number of students who have come into the country, over the past 15 years for example, and long-term economic migration and settlement. It would be foolish and short-sighted not to accept that many students have been economic migrants. We are looking perhaps at a reduction in student numbers of only about 10% from the 2009 figure of 270,000. No one has yet given detailed projections of how many of them would be in each sector.

On the face of it, yes, institutions will lose £105 million due to students not coming, but we must make the link and look at the opportunity cost—the displacement of indigenous people, who are British citizens, who are not in work and are on benefits as a result of jobs being taken by people who began as students but entered the work force. It is foolish to disregard that.

Even the Scottish Trades Union Congress and others have conceded that if we do not get a grip on that displacement and the corollary—the cost imposed on taxpayers—it will drive down wages and conditions, particularly for those in low-wage and low-skilled jobs in my constituency and others. That cannot be good for community cohesion and the economic well-being of the country.

[Mr Bailey]

In my constituency, regrettably, I do not have a university, but, equally regrettably, I do have a substantial British National party presence. Many of issues that the hon. Gentleman has brought up—the widening of the debate—are relevant to constituencies such as mine. I want to make it quite clear that representatives of local manufacturers have taken me round foundries and said to me, “The one thing that we do not want is a block on immigration, because we cannot get people from our own indigenous population to work in the foundries”. It is only by recruiting from outside that we have managed to sustain the jobs of the indigenous people who work in the foundries. Does the hon. Gentleman accept it from me that the issue is far more complex than he has articulated?

[Mr Jackson]

I am glad that the hon. Gentleman in the great socialist spirit articulates the point of view of the forces of capital, because they will almost always seek to drive down wages.

[Mr Bailey]

The hon. Gentleman is putting words into my mouth. I am articulating the role that immigrant labour can play in supplementing British businesses employing British white indigenous workers.

[Mr Jackson]

My hon. Friend the Member for Reading East (Mr Wilson), who is a very wise man, has reminded me of the hon. Gentleman’s party’s trouble over the concept of, “British jobs for British workers.” There was a pretty sharp U-turn over that. I am not mentioning creed, religion or colour, but economic and social trends in demography. I respect the hon. Gentleman in this instance because he is speaking for his constituents, as he is elected to do, and is a long-standing Member of the House, but I am also speaking for my constituents and from the position of having had between 16,000 and 20,000 migrants—admittedly from the EU—move to my constituency since 2004, because it is a centre for agriculture, horticulture and food processing and manufacturing. There has been displacement and pressure on maternity and other health services, housing, and in terms of crime, policing. Thirty-one per cent of children in my primary schools speak English as an additional language.

I concur with the right hon. Member for Leicester East (Keith Vaz): I accept that EU migration is sui generis, but it is because we can debate immigration in a reasonable and considered way that we do not give in to the BNP and allow it to spread its spite and division and destroy social cohesion. Unless we have a grown-up, truthful and honest debate, we will be in a difficult position.

Others wish to speak, so I will conclude as soon as possible. The number of overstayers has been assessed at about 32,000, as a rough guess, in recent figures by the Home Office. The focus is on overstayers. The UN definition of “migrant” has been mentioned. The hon. Member for Sheffield Central handled that issue sensibly. There is a debate to be had about the United Nations definition and whether students are economic migrants or merely temporary numbers in the system. That is fair enough. We hope to resolve that issue through e-Borders and discussions with European Union Governments, although I bring him back to the United Nations rather than the United States adopting that particular definition.

I respect the views of hon. Members and of the higher education sector, which is undoubtedly a vested interest and will seek to defend its business model as much as anyone else. We have seen other public services do so this week. Those in the higher education sector are articulate and can influence parliamentarians and others, for instance in the media, but they should remember that they have a responsibility to people who are not so articulate. They have a responsibility to develop scholarships and outreach programmes for people in this country, they have a wider remit to upskill people who might never have had an opportunity to go to university and they have a responsibility to drive social mobility. That is the challenge for universities.

I believe that the proposals are absolutely correct. They have taken on board the concerns of higher education institutions and others, and I think that they will deal with the issue of bogus students and colleges. I commend them to the House with the proviso that feedback will continue. In all sincerity, I do not believe that they will do anything but enhance the reputation and long-term viability of higher education institutions in this country.

15:32

[Keith Vaz (Leicester East) (Lab)]

It is a pleasure to follow the hon. Member for Peterborough (Mr Jackson). He is right to widen the debate from student visas, because the Government’s intention in trying to limit the number of students coming into this country is based on their view that over the next four years—by the end of this Parliament—they can reduce net migration from hundreds of thousands to tens of thousands.

However, I am sure that other Members, like me, are surprised that the Government have already revised their statistics and calculations. As the Select Committee on Home Affairs concluded, it will be difficult for the Government to meet that target. When the Home Secretary made her statement to the House, she said that she hoped to reduce student numbers by 80,000 each year until 2015, but on 13 June, the Home Office revised its figures and told us that curbing student visas will reduce total numbers by only 46,000 annually. Some could say that that is because the Government have listened and recognised the importance of the student route, but I think it relates to a fundamental point made by the hon. Member for Peterborough and—dare I say it?—the chairman of Migrationwatch UK: we cannot discuss immigration openly, honestly and transparently unless we know what the figures are, and we do not know what the figures are, because we still do not count people in and out of this country.

Part of the blame must lie with the previous Government. They signed the e-Borders contract and agreed to pay the company concerned £188 million, and, in my view, they failed to monitor how that private sector contract operated. This Government, of course, have decided to end the contract with Raytheon. Sadly, it took them more than nine months to appoint a successor, and they have now agreed to spend another £30 million or so, asking Serco and IBM to provide the same service as was provided in the past.

The reason why I raise the issue, and why the Select Committee keeps raising it in every report that we produce, is that we are all for having a good debate on immigration—it is important and healthy to do so here rather than on the streets of West Bromwich, Leicester or anywhere else—but if we are to have that debate, let us have some figures on which we can all agree. At the moment, we still do not have those figures.

On the completion of the e-Borders programme and the Minister for Immigration’s focus on it, he was keen to ensure when he was in opposition that the previous Government counted figures, although I am glad that the Government have abandoned their original plans for asylum seekers to be dealt with on that famous offshore island before coming into this country. It is important that we ensure that the e-Borders programme works, for the reasons outlined by the hon. Member for Peterborough, which I think we all believe are extremely important in any discussion of this kind.

Everyone here today who has spoken on behalf of the great university towns and cities of this country has spoken for genuine colleges and institutions. Of course there are some in our constituencies that are not genuine, but by and large, what has driven my right hon. Friend the Member for Oxford East (Mr Smith) and my hon. Friend the Member for Manchester Central (Tony Lloyd) to come here—as well as the hon. Member representing University Centre Peterborough, and me with my two great universities, De Montfort and Leicester—is our belief that the Government’s proposals will affect those genuine institutions. We should be cautious about damaging them and the reputation of our colleges.

The figures are coming from India already. The number of applications to this country has decreased by 40%, even before the proposals have been implemented. If that damage starts—it started in America when the Americans changed their system, and in Australia when the Australians decided to do the same—it is difficult to recover once people believe that they cannot come to study in a country. That is why we must be tough on bogus colleges.

[Mark Lazarowicz]

My right hon. Friend is right to say that most of us here have come because of deep concerns about universities and colleges in our constituencies, but we also have concerns about the many reputable, high-quality English language schools that are being affected even more seriously by the changes, in some ways. The Government must change their proposals if those schools are to survive.

[Keith Vaz]

My hon. Friend is absolutely right. The Home Affairs Committee held a big meeting in Brighton with local MPs from various parties, including the Green party, the Conservative party and the Liberal Democrats, and they were all against the Government’s proposals due to the damage that they will cause to English language colleges. In many cases, such colleges are the pathway to full-time degrees. It is extremely important that we focus on them as well.

However, we must be absolutely tough on bogus colleges. We have suggested two ways for that to happen. Unannounced inspections by the UK Border Agency are necessary. In the past, the UK Border Agency rang up colleges and told them that inspectors were coming. By the time they arrived, all of a sudden—like “Mission: Impossible”, for those who are old enough to remember it—a whole lot of students and teachers had been brought in for the inspectors to see. How crazy is it to tell a bogus college that it is about to be inspected?

I had a call from a Conservative councillor in a London borough who preferred to ring up the Home Affairs Committee rather than the UK Border Agency to tell us that a new bogus college was operating in her ward. On Monday, I sent my research assistant to the college. She rang up and said that she was a student and wished to enrol on the course. They said, “Right, come along at 10 o’clock and we’ll give you a brochure.” She arrived, and there was absolutely nobody in the college. She stood outside and rang them again. They said that they were not open yet, but would be in September, and that they had applied to the Home Office. I have a letter for the Minister. I hope that he will check whether that is in fact the case, so that I can tell the hard-working local councillor whether that college is bogus.

We need proper inspections. Nobody in the Chamber has a tolerance of bogus colleges. We want to ensure that they are closed down, because they are bad for the students who go there. The second point on bogus colleges and abuse relates to the points-based system that the previous Government introduced. The system gives no discretion to entry clearance officers and immigration officers at Heathrow airport. It is left to whistleblowers to go to the Daily Mail and say that we let in all these people who had student visas who do not actually speak any English, but are doing computer courses—I think that was the last claim that we saw in one of the newspapers. We need to give discretion to our professionals. The points-based system is absolute and clear, but that extra discretion is necessary to enable the entry clearance officers to say yes and no, even if people qualify under the points-based system, and to give immigration officers the authority to make those decisions.

My final point is one that I raised with my hon. Friend the Member for Sheffield Central (Paul Blomfield), and I join other hon. Members in congratulating him on securing the debate. I know that he has been trying to do so for many months. He was offered a shorter slot. He said that many people were interested in the issue, hung on and we can see the number of hon. Members who are here today. I congratulate him on hanging on long enough to secure a good three-hour debate. I will not speak for long because other hon. Members wish to speak.

The Home Affairs Committee report concluded that students were not migrants, and should not be part of the figures. They are not migrants because they come to study, not to settle. Of course, the Minister will come out with his figures and say that he finds that some settle in the end, because they keep applying to change their courses. Well, I for one have no problem with non-switching. I am not a great fan of people who come on the basis of one set of visas and want to switch to another.

I do not know whether it happened during the term of office of my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), but the previous Labour Government stopped the switching from visitors to spouses. I therefore have to tell my constituents that, if people come here on holiday and fall in love with a British citizen, I am afraid that they have to go back and apply again. The previous Labour Government provided for that. I have no major problem with switching, but we need to be very clear. It is more of a systemic problem than one of intention. If there is a problem of intention, we can deal with it by preventing switching.

We should not, however, damage our university and English language sector by accusing all students of wanting to come here, study and stay. That is why what my hon. Friend the Member for Sheffield Central said about post-work study is so important. When they choose to come here, they also choose to work for that year, and that is essential to their studies. If they do not come here, they will go to the United States of America, Australia or France.

The Minister of State, Foreign and Commonwealth Office, the hon. Member for Taunton Deane (Mr Browne), gave evidence to us, as I think he did to the Committee chaired by my hon. Friend the Member for West Bromwich West (Mr Bailey). He talked about Britain being the centre of world for education. He told us about Nottingham university and how he personally, because of his interest in Malaysia, had gone to Malaysia and got thousands of Malaysian students to study in Nottingham. Indeed, there is a campus just for Malaysian students. He was very proud of that. We cannot have one Minister saying that we are open to the world and then have other Ministers trying to prevent that from happening.

I hope that the Minister will not say that the UN tells him that the students are migrants, and so they have to be migrants. If they are not migrants and they wish just to study and then leave, they should not be counted as migrants. If they are working illegally or there is any abuse, I say to the Minister for Immigration—I know that he will take this seriously, and has taken this seriously—out they go. There is no tolerance of people who abuse the system. I have just come back from a visit to the Greek-Turkish border, where I saw people who are trying to come into this country, crossing over at an enormous rate. I, for one, am very happy to work with the Government and others to try to stop illegal immigration.

When we are dealing with people who genuinely want to come to study, the Government should stop, consider and reflect, because of the potential damage to our reputation as the greatest country in the world for education. That reputation was the reason why my family chose to come here when I was nine years of age. They chose to come here because of this country’s reputation for valuing education. Let us not damage our reputation. Let us make sure that our rules and policies are clear and transparent, but fair.

15:45

[Richard Fuller (Bedford) (Con)]

It is a great pleasure to serve under your chairmanship, Mr Benton, and to speak in the debate secured by the hon. Member for Sheffield Central (Paul Blomfield). He made an articulate speech that raised a number of points, which I am sure the Minister will consider. I think that he will find support across the House on some points. Other points might be a little more contentious, but we look forward to hearing his comments.

Mr Benton, I must ask for your forgiveness and that of other hon. Members, as I will not be able to stay for the closing remarks from the Minister. I have a good reason, which allows me to highlight what is perhaps a contrarian point. I am meeting representatives from the Taiwanese embassy equivalent to talk about a visit by Taiwanese students to the university of Bedfordshire in my constituency of Bedford, which includes Kempston. Some Opposition Members talked about the importance of having people come from mainland China. We all have to make our choice of Chinas. I tend to prefer those that have elections and do not lock up Nobel prize winners. The issue with Taiwan that is important to mention is that we have simplified immigration rules for Taiwanese students to come to study here. It is precisely because the controls and understandings that Taiwan has in sending students overseas are so well administered that we have confidence in the country that is sending, as well as the country—the UK—that is receiving. It will be a great pleasure to welcome them.

We have a responsibility to weigh up two major factors, which have come through the different contributions: restoring people’s confidence in our immigration system and controls; and ensuring that we are optimising and maximising the opportunity to enhance the economic well-being of our universities, and the role that our open educational system can play to spread freedom, democracy, belief in the rule of law, understanding of free markets, and the belief that every citizen’s rights have to be recognised in all parts of the world. That is an important and critical role that our universities play. As I am leaving shortly, I will address those two areas quickly.

My hon. Friend the Member for Peterborough (Mr Jackson) said that immigration control is a significant responsibility for the Government. If we do not believe that, then I do not think that any of us can have knocked on doors at the general election. It was raised as a concern by many residents. There was exasperation at how the system had got out of control under the previous Government. Both the previous Government and this Government sought to bring in controls. We are still dealing with an issue where people’s confidence has not yet been restored. I urge the Minister, in response to all the hon. Members he will hear from today, not to lose sight of the fact that he has a significant responsibility to ensure that people’s confidence in our immigration system is restored. He and his colleagues in the Home Office have made a very good start, but he has to see it through to the end. That sometimes requires very tough decisions. I urge him strongly to continue all the way through this period of office, and I congratulate him on the steps that he has taken.

[Mark Lazarowicz]

Does the hon. Gentleman accept that confidence in the immigration system will be even more jeopardised if the Government make announcements that claim that they will sort out the problem, but then find that the immigration figures are still increasing and that, for example, the measures for overseas students will do nothing whatever about EU students? Will that confusion lead to even less confidence in the immigration system?

[Richard Fuller]

The hon. Gentleman urges some very good caution. The worst thing to do is to ignore the immigration issue, pretend it is not there and destroy people’s confidence in the system, as his Government did. However, as the right hon. Member for Leicester East (Keith Vaz) said, there is an issue about trying to ensure that we have the numbers, so that we are dealing with the facts. Facts help people to gain confidence. If people do not have the facts, it is harder to gain their confidence. However, the measures this Government are taking on that have been a significant step forward on behalf of the country.

The United Kingdom—what a wonderful country we live in, and how proud we can be of our values and our society. We have these great debates in this fantastic mother of Parliaments. We are a beacon for educated people around the world. We should be really, really proud of what is now called the soft power that countries such as ours have. The fact we have a vibrant series of educational institutions is a critical part of ensuring that the United Kingdom continues, in the words of a former Foreign Secretary, to punch above its weight. There is no doubt that hon. Members from all parties think that that is an important thing for us to accomplish.

However, we must recognise that our higher education institutions are going through some substantial changes and challenges. I would like to praise Professor Marilyn Leask, who is the dean of the Bedford campus of the university of Bedfordshire. There is a Luton campus, but I shall not speak for that one. I will speak for the campus in Bedford. Professor Leask is considering with energy and vitality how to deal with the challenges faced by our higher education system in terms of the changes to student fees. She is based in a teaching training institution for physical education and is considering new ways to accommodate those changes. We must recognise that our universities are going through substantial changes. This issue is one part of a much bigger picture that they are trying to piece together, as they put together a more sustainable long-term funding basis for their future operations. It is probably not the most important part of our universities’ business model, but it is an important issue.

I ask the Minister—again, apologies that I will not be here to listen to his response, but I shall read it with great interest—to explain how the relationship between the Home Office and the Department for Business, Innovation and Skills is operating, so that we can get a sense of whether we have an integrated strategy. Million+ is asking for an integrated higher education strategy, which is a very good thing. If we have all these advantages from being this wonderful country and if we want to educate the world, we must have a coherent strategy to achieve that. That does not necessarily mean that some of the issues raised today have to be acceded to, because I do not think that all of them are right, but it does give a context for where we are heading. As these institutions and universities are building their new business models, we need to give them a context in which they can plan for the long term more coherently.

[Lilian Greenwood]

The hon. Gentleman makes an incredibly important point about this being a time of great change for universities and that they are having to look at their future planning. Does that not make it all the more important for the Government to proceed on the matter with caution and deal with the timing carefully? Universities need to be able to plan and adjust, rather than being rushed into things. That is one of the concerns that universities have raised.

[Richard Fuller]

The hon. Lady makes a good point about the transitional arrangements this year. She has heard an answer from the Minister on that and I am sure that he will address the matter again when dealing with some of the follow-up concerns raised by the hon. Member for Sheffield Central. That is a particular issue on which I am looking forward to hearing the Minister’s comments.

More generally, on Opposition Members’ calls for caution, when we are looking for change, caution is not always the best way to proceed. It is important to deal with the matter clearly and cleanly, so that the people who are responsible for building business models do not have to anticipate future changes. Such an approach is helpful to them when setting their strategy. Being cautious is not always the best approach. In this instance, given my and other hon. Members’ concerns about the importance of getting peoples’ confidence back in immigration, obtaining clarity quickly will be of benefit to the long-term strategy of our higher education institutions and our universities. They need to have an integrated strategy, so that they know the Government’s direction of travel. They need an understanding between the Home Office and BIS to make that happen.

My message to the Minister is, first, that he has a responsibility to fix immigration. That is what the British people asked for at the last general election and that is what they are looking to the Home Secretary and the Minister to accomplish. I urge him to consider everything he does through that lens, rather than through the particular lens of each issue. Secondly, he has heard from hon. Members on the issue of whether students are migrants or not. It may be worth considering what happens in the United States and the United Nations. Some of us prefer the approach of the United States to that of the United Nations. Will the Minister look at that as part of setting an overall strategy, as it would be interesting and worth while to do so?

On the transitional arrangements that my hon. Friend the Member for South West Bedfordshire (Andrew Selous) and others mentioned, again, the Minister has given an answer and I look forward to him expanding on that in his closing comments. I urge the Government to have an integrated, international higher education policy. We have a fantastic country. We have to bring people here, so that we can spread a message of freedom and spread understanding of the English language. We must give people Shakespeare and give people an understanding of the Magna Carta. If we do those things, we will have a country that can not only interact, but sell to the rest of the world.

15:49

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

For the avoidance of doubt, I had better declare an interest. From time to time, I receive remuneration from the higher education sector for work I do with it.

I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing the debate. After being a council leader for Sheffield and an MP for the city for 24 years, I thank him for drawing my attention to the international college’s work. I was unaware of the extent of that work—every day, I am on a learning curve.

There seem to be two aspects to what we are debating. The first is the macro. That relates to the overall issue of migration and its impact on our country and the politics in which we are all engaged. The second is the unauthorised, the unauthenticated and the unacceptable. That relates to those colleges and institutions that either do not exist or, if they do, do not provide what they say on the can they offer. In addition, such institutions do not offer courses of sufficient quality to students of sufficient quality.

Those two aspects are getting slightly mixed up, although that is not because the first matter is not important. To coin a phrase from the former Prime Minister, Tony Blair, I certainly have scars on my back from the near four years I was Home Secretary in terms of the two major pieces of legislation that we introduced and the changes we made. That included the two-thirds reduction in asylum, the security and immigration provisions on French soil, the measures regarding liaison officers at airports across the world and a substantial tightening up of how we operated visas. Such policies provided a foundation on which my Government subsequently built and this Government have been building. The issue is incremental. If we take a step in one direction, we find that the plastic bottle has bulged out in another. I suggest to the Minister, who is deeply committed to this matter, that immigration will affect this Government, as it did previous ones.

As the issue has been mentioned, I would like to say how much I agree with my right hon. Friend the Member for Leicester East (Keith Vaz) about embarkation and e-Borders. I was responsible for kick-starting e-Borders, but I claim no credit or discredit whatsoever for the contract that was let. In fact, when the 20-year rule comes in, there will be letters on file from me as a Back Bencher advising against what was done. The speed of operation to get this right is critical because, if we do not know who is leaving, we really cannot make a judgment about whether the system is working. That applies directly to students who have fulfilled their courses and/or their term afterwards for permission to work. If the system is working properly, much of what we are debating would be seen in that broader context, and we would not be so obsessed with artificial targets for future migrants. We would be able to deal with the issue of what a migrant actually is and provide a proper definition in a way that removes the harder edge of politics.

It is inevitable that there will be politics involved in discussions on immigration. We might then debate issues and not end up with policies that damage the country, rather than enhance its well-being. I do not intend to repeat what has already been expressed, because time is pushing on and extremely good points have been made. Even those points that I have doubts about have been enlightening. I would, however, like to reinforce some of the key points that have emerged.

First, the economic value to this country is not just the money that comes into the universities or the local community, but the way in which those who have benefited from both the study in, and the experience of, our country add to our potential economic value in years to come, as they become the advocates for Britain and part of global institutions and enterprises, whose connection with and alumni from our institutions make an enormous difference to Britain in this global economy and international trading world.

Secondly, to take up the point made by the hon. Member for Peterborough (Mr Jackson), our universities are able to offer that social responsibility much better if they have a higher level of agreed income. The income that is coming in from overseas, free as it is from issues of debt repayment and the difficulties that we have debated over recent months, adds to a university’s ability to contribute to the wider community and the social well-being of our country. The issue is much broader than whether the university itself has an enhanced income, important as that is.

Thirdly, there is an issue about whether we really want numbers of legitimate, verified students, with the right qualifications in the right quality of institution, in this country. If we listen carefully to the debate, we will hear that everyone pays lip service to the importance of legitimate students coming here, but we then hear a different nuance, namely, “But they are foreigners and that is dangerous, because our electorate do not really like foreigners.” We need to get off that and on to where migration policy has not worked properly—even the measures for which I was responsible did not always work—and the importance of enforcement. We need proper inspection and enforcement, including clamping down on those colleges that do not really exist or are just an excuse for people to get into the country. Moreover, if our legitimate university and higher education institutions, both in the public and the embryo private sector, are not checking whether students are taking up their courses, enforcement is the crucial element. That is the end at which we need to ensure that we get this right, rather than trying to reduce, per se, the number of legitimate students coming into the country. That is critical.

In 2000, I led a delegation, which included the Higher Education Funding Council and this country’s leading universities, to China. The Chinese welcomed us and were very pleased to have a two-way arrangement with us that includes students coming on a temporary basis to learn our language and about our systems. That was a good thing to do, and anything that damages it would be a major mistake.

That brings me to my central point. It is the message we send that is absolutely critical, and the message that has been received outside this country is the wrong one. It is not that we want to avoid the illegitimate, the unacceptable and the fraudulent, either in terms of the provision in our country or of those coming in for reasons other than to study properly. The message that is being received outside this country, as has already been said, is, “You will not be welcome.” Will the Minister do everything possible, along with our embassies and high commissions, to change the message, so that it is received properly and understood by students and industry? Sponsored students are very important, and major enterprises across the world need to know that their potential employees, or those who are sponsored by them, are welcome in this country.

I want to touch briefly on the complications that we face. Many of them could be overcome if there was greater flexibility in the transition period—there is no question about that. It is no good for the Minister, who intervened on my hon. Friend the Member for Sheffield Central, to say that, if firm offers were made before 21 April, certificates would be honoured. As was pointed out almost immediately, many of those offers are conditional and do not therefore apply. In some sectors, including professional bodies and professional courses, the number of certificates has been capped arbitrarily, sometimes at levels including those that have been taken on from institutions that no longer exist or have been deregulated. They have, therefore, been punished for picking up students who were badly treated by those that did not come up to standard.

I would like us to address why we do not use highly trusted sponsor status and the oversight mechanisms of professional and private sector operators, which will now be operated by the Quality Assurance Agency for Higher Education—I congratulate it on the speed with which it has moved—rather than a complicated system that does not rely on enforcement and inspection, but on the front end rather than the back end. To complicate matters, it is crucial—this has been said by the hon. Member for Bedford (Richard Fuller)—that the Department for Business, Innovation and Skills gets its act together with the Home Office, so that they speak the same language and that those with expertise share it. For instance, on professional qualifications for accountancy, why suddenly drop in, as the statement and assessment did on Monday, that there has to be approval at gold or platinum level by the Association of Chartered Certified Accountants, when it has preferred providers of its own? These professional qualifications are a bit like the guild system in mediaeval England.

I counsel the Minister to be very careful not to get involved in what is corporatism. For somebody who is a declared libertarian, that is a dangerous position to be in. We should not put into the hands of those who have a specific interest in particular providers the ability to exclude other providers. That is a dangerous game in terms of the kind of oversight that we would expect.

In brief, I do not think that any Member present does not think that it is a good idea to progress on the road of tightening up in relation to those who have been fraudulently operating the system or those who come here and are not legitimate students. Let us all agree on that. We might even agree that those of us who tried in the past did not come up to scratch in achieving the goals that we set ourselves. A little humility from all of us on that might not be amiss. It is important that the lessons of history are learnt: sometimes, speed leads to the obverse of the objective that is sought, and a little give and take—sensibly, openly and without criticism when people are flexible, so that we give the Minister a bit of leeway—might achieve the overall goal that he and, I believe, BIS seek, namely a system that works and welcomes people into this country, because it is good for our economy, good for our social life and good for the future of Britain.

16:08

[Mr Rob Wilson (Reading East) (Con)]

It is a pleasure to serve under your chairmanship, Mr Benton, and I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on his detailed opening account, which set out the issues that we are discussing. I intend to be as brief as possible, because the House has now adjourned and I am sure that Members, particularly those Opposition Members present in the Chamber, have long journeys back to their constituencies.

I support the need for strict controls to exclude bogus students, and welcome the Government’s proposals targeted at the least trustworthy institutions. As has been said, not least by my hon. Friend the Member for Peterborough (Mr Jackson), the previous Government did nowhere near enough to get control of the issue of bogus students and colleges. Many people in the country will welcome the change of emphasis by this Government—through the leadership, indeed, of the Minister.

Sixteen tier 4 sponsor licence-holding institutions operate in my constituency of Reading East. During the consultation period of December 2010 to January 2011, my office surveyed all those institutions, including face-to-face interviews with representatives of four of them, the university of Reading and three private colleges. Sharing some of those findings with colleagues might be helpful, although I will try not to repeat anything said in the debate. I promised the institutions involved that I would share some of their main concerns.

Both the university and the independent sector in my constituency stressed the crucial importance of achieving and retaining highly trusted status. The independent sector in particular felt that its future literally depended on such status. While the private colleges accepted the need to tackle bogus students, they expressed great concern about the UK Border Agency’s inspection process. The perceived problems largely emanated from the lack of formal criteria from the UKBA of what was necessary to achieve and retain that trusted or highly trusted status. Additionally, some expressed concern about the understanding, even the ignorance, of some inspectors about how the independent sector operated. For example, in the experience of one college, the UKBA inspector expected a desk and a seat for every single student enrolled, despite a student normally being expected to be in attendance for no more than 15 hours per week.

The most frequent call I heard from colleges was for a level playing field. The universities are granted highly trusted status as a default position but, in the view of the colleges, if the same rigorous expectations as are imposed on the private college sector were imposed on the universities, many of them would lose the cherished highly trusted status. For instance, to obtain such status, a private college is expected to achieve a drop-out rate of no more than 2% to 3%, but universities can expect to achieve a drop-out rate for non-European economic area students of approximately 6% to 10%. Therefore, the Government target of 3% was considered by the private college sector to be wholly unrealistic.

Transparency is essential for a fair and effective inspection regime, but a real concern is that colleges get no debriefing following inspection, as schools do with Ofsted. Inspection reports may be obtained through freedom of information requests, but that procedure is not really quick enough. Targeting efforts on the least trustworthy colleges in the unregulated private sector is right, but we should also remember that only a tiny minority of colleges are bogus. I hope that the new proposals will not put private colleges at a disadvantage by failing to set out clear criteria for highly trusted sponsors or with the somewhat arbitrary and opaque inspection and even evaluation process. Tackling the transparency issues will help good colleges get on with the job of educating students and will increase public confidence in the student visa regime.

In conclusion, does the Minister share my concerns? If so, what can he do to ensure the transparency in the sector that we all wish to see?

16:14

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

It is a pleasure to serve under your chairmanship today, Mr Benton. I am glad to have the opportunity to speak in this debate on student visas, which is an issue of importance not only to the ancient university of Edinburgh but to the other three universities in my city, Heriot-Watt, Napier and Queen Margaret. There are also implications for many of the city’s colleges, in particular Telford college with its new headquarters, which has a long history of welcoming international students and, indeed, only recently received an award as the best college in the UK for international student support. For the record, I congratulate the college on that award. Student visas are also of concern to many of the high-quality and reputable language schools in my constituency and elsewhere in Edinburgh.

As other Opposition Members have said, no one disputes that it is important to crack down on bogus students and colleges and on low-quality colleges. In common with many other Members, I have had people at my surgery who have been the victims of applying to colleges that then did not come up to standard. No one is under any illusion that we must tackle that issue, or the wider one of immigration, but they must be discussed in the right place and at the right time. We must not, however, allow the pursuits of a Government wanting to fulfil an arguably unfulfillable promise on immigration to have a detrimental effect on bona fide students and bona fide universities and colleges, which make a vital contribution to the economy of the UK and of many of our communities. I take issue with the hon. Member for Peterborough (Mr Jackson) who talked about the “vested interest” being defended by Members; we are not only talking about the professors, principals and numerous staff of universities but about institutions that affect the wider economy. Universities and colleges are important in themselves and for the wider economic benefits in our communities.

Many Members, in all parts of the Chamber, made points with which I associate myself, but I will concentrate on a number of specific issues, raised directly with me by some of the universities and colleges in Edinburgh. First, as mentioned by my hon. Friend the Member for Sheffield Central (Paul Blomfield), who commenced the debate, in many Scottish universities it is still the norm for the undergraduate degree to be over four years and not three. Clearly, the five-year limit will have consequences for those who wish to study at postgraduate level as part of the wider education offer in England, but it will have much more serious consequences for someone who might have only one year after the completion of the undergraduate course in which to consider taking a postgraduate course.

The implications are wider still. Professor Steve Chapman, the principal of Heriot-Watt university, has pointed out to me that a number of degrees include an integrated year abroad or industrial placement as part of the undergraduate course, so people will use up their five years even without going to postgraduate level. The five-year limit also means that there is absolutely no flexibility at the end of the course, for resits possibly or for delays caused by other legitimate extensions. I hope that the Government will reconsider and change the proposal to take account of the four-year undergraduate course that is still standard in much of Scotland.

In addition, Professor Chapman said that five-year integrated undergraduate and masters programmes are common, again allowing for no flexibility at the end of the five years. He points out that the school of engineering at Edinburgh university has 19 separate master of engineering, five-year, integrated undergraduate and masters degree programmes, with other courses available elsewhere in Scotland. I hope that the Minister will consider the consequences of the five-year limit for the Scottish education system, in which a four-year undergraduate degree is the norm.

My second point was made by a number of colleagues: the shortness of the notice given to universities about the changes. As I indicated in my earlier intervention, I received a copy of a letter that the principal of Edinburgh university, Professor Sir Tim O’Shea, sent to the Minister at the beginning of May:

“I write to express alarm at the changes to English language requirements as part of the Tier 4 student migration system. The changes will impact on a third of our expected international intake this year and present a serious impediment to the successful recruitment of high quality international students.”

He goes on to say:

“The changes to English language requirements for Highly Trusted Sponsors have been introduced without any dialogue, part way through our admissions cycle and with no transition phase to enable effective planning. The changes will almost certainly result in legal challenges to our admissions process given that it will necessitate amendments to offers of admission already made to over 800 international applicants seeking to enter the University of Edinburgh this year.”

He then makes an important point:

“The benefits of having ‘Highly Trusted Sponsor’ status remain unclear if sponsors who achieve the highest levels of compliance are to be obstructed from admitting the highest calibre of international students.”

Professor O’Shea urges the Government to postpone changing the English language requirement in this admissions cycle, and asks the UK Border Agency to consult on changes for the next cycle. I endorse his comments, and I hope that the Minister will take on board the concerns expressed by Professor O’Shea and many other university principals and organisations with an interest in this debate.

There may be some misunderstandings about the implications. As my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) said, there are particular issues for those who have received conditional offers or have not completed the process of accepting a firm offer by 21 April. The fact that clarification is needed is a reason for, at least, postponing the changes to the next cycle so that universities can fully take on board the changes that the Government are introducing.

I could make many other points about issues that my hon. Friends have raised, including the effect on language schools, which I mentioned briefly, and restrictions on dependants, which will have an effect on some students. Concern about the post-study period was raised at length by colleagues. I will not raise those matters again today.

In statements elsewhere, the Government have recognised the need for the UK to maintain its position with our global competitors in many respects. The ability of high-quality, qualified students to come to the UK is one way of ensuring that we are globally competitive. As my right hon. Friends the Members for Leicester East (Keith Vaz) and for Sheffield, Brightside and Hillsborough said, the consequences for our reputation and standing abroad will be long standing. If the message gets out that Britain is not open for business and is not welcoming to international students, it will have an effect not only on students who do not come here but go elsewhere, but on future business contacts if students do not have a positive experience in the UK, on future cultural contacts, and on general good will towards the UK. There will be short-term and long-term economic consequences.

As the hon. Member for Bedford (Richard Fuller) made clear, there are many other reasons for welcoming international students to this country. It is not a question just of a narrow economic interest; there is the wider interest of Britain’s standing as a whole. However, the economic interest is important. In Scotland alone, the income raised from international student fees in 2009-10 was worth some £260 million. Of every £100 earned by Scottish universities from teaching grants and contracts, international students accounted for £16. Economic interest is not the only reason why the changes should be reconsidered, but it is important, and I hope that the Minister recognises that. Those of us who raise the concerns of universities in our constituencies are raising immediate concerns, but also concerns about our ability to compete on the world stage. I urge the Government to reconsider the way in which these proposals are being introduced, particularly with reference to the implications for those who want to come to Scotland to take a four-year degree course and thereafter to consider postgraduate study as part of the overall package that attracts them to our country.

[Several hon. Members]

rose—

[Mr Joe Benton (in the Chair)]

Order. Five more hon. Members have indicated that they want to speak, and we have just over half an hour left. I will try to get everyone in, but I ask hon. Members to bear that in mind.

16:24

[Jonathan Lord (Woking) (Con)]

It is a pleasure to serve under your chairmanship, Mr Benton. Like other hon. Members, I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing the debate, and on the excellent and measured speech with which he introduced it. I pay tribute to my hon. Friends who have spoken today, particularly my hon. Friend the Member for Peterborough (Mr Jackson) who explained the background and the wider issues at stake. We have had some excellent contributions from both sides of the Chamber.

I want to follow up some of the points made by my hon. Friend the Member for Reading East (Mr Wilson). In Woking, I have several private colleges with a good reputation—I do not have a publicly funded university—which make a real contribution to the life of the constituency and to their students. The Tante Marie cookery school is the largest independent cordon bleu cookery school in the UK. It was founded in 1954 by Iris Syrett, the distinguished cookery writer, and is now part-owned by Gordon Ramsay. It is an internationally renowned establishment and wants to be competitive with the world’s best cookery schools.

Like my hon. Friend the Member for Reading East, I have received feedback from legitimate private sector colleges, which believe that things are stacked against them. The rules are constantly changing, and that costs each college a lot of time and money. As my hon. Friend said, they must meet an extremely high bar to gain highly trusted sponsor status, and that includes proving that less than 2% of their overseas students drop out in the first third of the course. Most publicly funded colleges or universities would not meet that test, but they are not asked to fulfil any such criteria.

The bar is high, but my understanding and that of colleges is that, if they gain highly trusted sponsor status, their overseas students will not now be allowed to work while they are at the college, although a student studying almost exactly the same course at a publicly funded university or college would be allowed to work. That will make it very difficult for private colleges to compete with publicly funded universities, both internationally and in the UK, and to attract foreign students. A student’s ability to work during their studies has no effect on net migration, but removal of the right to work will have an impact on the number of genuine students who are interested in coming to the UK to study. If they cannot work while they are here, the UK will be a much less attractive and much more unaffordable place for them to come to study, especially as most other countries will allow them to work as well as study.

The Government’s intention is to reduce net migration and, as we have heard from my hon. Friends today, that is a laudable objective, which most people want their MPs to support and get a grip on. The best way to do that in the context of education, as we have heard from throughout the Chamber, is to crack down on the bogus colleges and to ensure that students leave when their course has finished. There is a clear difference between a student coming to the UK for the duration of a course, and someone migrating to the UK to live here. The former is undoubtedly beneficial to the UK, the student and our economy.

As my hon. Friend the Member for Bedford (Richard Fuller) said, what better way of spreading British values and the values of democracy, the rule of law and our cultural heritage with the rest of the world than through having genuine students come here to learn and live alongside British students in this wonderful country of ours.

I have long been an admirer of the Minister, whom, I believe, has one of the most difficult briefs in government. He approaches his task with customary tact, intelligence and verve. However, I must say that the potential unfairness of the new rules, and the way they discriminate against private colleges, even after they have achieved every level of quality assessment, will make life difficult for them. In my view, private colleges that meet all the quality criteria should have equal treatment with educational establishments in the public sector, and more equal treatment with similar colleges in other western democracies.

[Jeremy Corbyn]

I agree with the hon. Gentleman. However, in reality, students who are attracted to cookery schools such as the one he mentioned, and to most language schools, are not in competition with publicly funded universities. They are different courses and different groups of students, although I agree with him about the treatment that such colleges receive.

[Jonathan Lord]

I am grateful for that intervention. As I said earlier, there are many different private colleges in my constituency—I gave one interesting example of a college of which I am particularly proud. I believe that both publicly funded colleges and universities, and private colleges, have a great deal to contribute, and genuine students should be encouraged to come to the UK to study.

I tried to delineate the difference in the way that private colleges have to perform against different and difficult rules. Even when they receive the status of highly trusted sponsor, they find that other rules have been introduced and that, because of the lack of a level playing field, it is difficult for them to attract genuine foreign students to come to this country.

I have heard representations from some good private colleges that genuinely feel that they are going to be bankrupted. A lot of colleges will be bankrupted, but it will be the good and bad together. That cannot be fair to the colleges, to potential students, or to UK plc. I urge the Minister to look carefully at that issue and ensure that our private colleges—in particular the good ones that have highly trusted sponsor status—are treated properly and allowed to continue with the excellent work that they have done over many years for those foreign students who gain so much from coming to study in this country.

16:33

[Nic Dakin (Scunthorpe) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Benton. First, may I declare an interest? This time last year I was principal of a sixth-form college that educated 120 fee-paying international students. International students are a competitive business. As we have heard, it is effectively an export industry; non-EU students buy a UK education in a fiercely competitive global market. Students who come to the UK are often from influential families in their home country and region. They will return and become leaders of their cities, regions and countries. That they have been educated in the UK disposes them positively towards all things British, and can only assist in the UK’s future global influence and economic prosperity.

I want to focus on the further education sector. More than 20,000 fee-paying international students study at sixth-form and further education colleges. College fee income from international students is more than £42 million a year, and there is additional income from books, food, accommodation and other things. UK plc benefits by at least £80 million a year.

Let me draw on the concerns raised by John Leggott college in my constituency where, as I said, I was principal. The college has excellent results for international students, and has won many awards for its work with them. It has worked with the British Council and others to develop strong relationships in key markets across the world. It has an excellent reputation but—here is the “but”—the British Government’s treatment of visa regulations, the interpretation of those regulations by the UK Border Agency, and their implementation by particular consulates, seriously threatens the college’s international business.

The head of the international centre, Maggie Williamson told me:

“Feedback from agents in China is that the UK visa system is so complicated, daunting and a real obstruction, that most students now don’t even bother thinking about the UK. They just go to the United States without considering the UK, so this has made applications drop dramatically.”

There is a lack of a level playing field between FE and sixth-form colleges, and those independent schools that—quite properly—are also active in the market. Like the hon. Member for Woking (Jonathan Lord), I call only for a level playing field and for fair treatment for different providers.

Independent schools automatically get highly trusted sponsor status and do not have to pay the £400 registration fee—the relevant information states that they will not have to pay the full burden of highly trusted status. Will the Minister consider whether that is fair and proper in the current market? It sends an unfortunate message to the key markets in which the different bodies are operating.

Independent schools can hold pre-sessional courses for students on the same confirmation of acceptance of study—the CAS form—that is required when students finally join the school. That is not the case for the FE and sixth-form college sector. Having said that, there are practical issues about whether the CAS system is effective, and its operation is worth further scrutiny. The secure English test does not have the same power of insistence for independent schools as it does for the FE and sixth-form college sector. Students who wish to come to the UK have to take a particular exam, such as IELTS—the International English Language Testing System—and the cost of taking it abroad is a disincentive to students who wish to enrol on courses in the UK. There is an uneven, unequal market, and I hope that the Minister will look at that.

I am grateful to the Secretary of State for Education for enabling and encouraging the UK Border Agency to meet me and representatives from my local college to discuss the issue. The UK Border Agency recognises the absurdity of the situation, but it later said in a letter that it would not change anything. I hope that the Minister can focus on the matter and bring about fair treatment for different types of institution within the market. That would be of great assistance and importance.

Prospective students are currently putting money into banks to come to the UK. They do so in good faith that those banks or financial institutions will be on the list of trusted financial institutions. That list, however, has not yet been published, and students may put money into a bank only to find out later that it is not on the list. I hope that the Minister will ensure protection for students and institutions in such an eventuality. It would be helpful if the Minister considered that practical issue.

Much of the aspiration behind the policy is correct, but I hope that the Minister will look at and respond to concerns about the way in which it is applied, so that it can apply equally and fairly across different types of institution in a way that is practical and allows business to proceed.

Britain needs to be open for business in the student export market. In my opinion, politicians and the Government should be strong enough to shout up for British business, British students and British education. We should not pander to the sometimes hysterical argument and atmosphere around the subject. If we do that, we will export British jobs, the British reputation and future British influence to the more politically savvy parts of the world.

I hope that this excellent debate, in which hon. Members from both sides of the Chamber have engaged in a sensible articulation of concern, brings about a practical way forward that says that Britain is the best place in the world to come to for an international education, and that we will ensure a level playing field for institutions in Britain. We are open for business. Do come and help us to prosper into the future. That is what I hope will happen as a result of the debate.

16:40

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to speak under your chairmanship, Mr Benton. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing the debate and on the comprehensive way in which he set out the wide range of issues that arise from the changes that the Government are making. Other hon. Members have also spoken about those matters, and I will not cover ground that has already been covered. I will focus on two areas of which I have intimate knowledge: my constituency, Newcastle upon Tyne Central, and my area of expertise, science and engineering.

As hon. Members undoubtedly know, Newcastle is a great university town. Newcastle university, in my constituency, was founded in the 19th century by, among others, the great industrialist Lord Armstrong. When my father was a student there in the 1950s, it was known as King’s college, Durham. I do not whether, as a Commonwealth citizen, he required a student visa at the time, but if he did, I am very glad that he acquired one.

My mother was a student at Northumbria university, or Newcastle polytechnic as it was, in the constituency of my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown). Born in Newcastle, she certainly did not require a visa, although given that she was in her 50s when she finally got to go to university, a university education was in many ways a foreign country to her.

My point is that Newcastle has a long and proud history of educating a wide and diverse range of students from all kinds of backgrounds and from all over the world. It is therefore not surprising that I feel strongly about this subject. I am proud that Newcastle is a favoured destination of UK and international students. It attracts students from all over the world. Newcastle university has 3,000 international students from more than 110 countries, while Northumbria university has students studying degrees at partner institutions in Hong Kong, Malaysia, Bangladesh, Seoul and elsewhere.

Students are therefore a vital part of our economy, contributing much to our businesses, our bars and clubs and our cultural life. Why on earth would we want to put up a sign saying “Do not come and study here”? I am afraid that that is increasingly the impression that we are giving and I will cite two case studies that exemplify that.

First, student A, studying biochemistry, sent the UKBA a request for a certificate of approval in February. Despite faxing and phoning, with the support of my office, for many months, she still has not had her passport back. Her student visa expires in July, and she cannot apply for a new visa without her passport, which the UKBA still has.

The second example is a student who is studying for a doctorate in marine engineering. He is in his final year. He has applied for a visa, which has been refused as the UKBA states that he should have completed his doctorate by now. However, with his application, he submitted a letter from the university explaining that the external examiner was ill, so it would require some more months to finish. The refusal took no account of the fact that the student had been in Newcastle for six years, with legal visas, paying substantial sums to the university in addition to rent and living expenses in Newcastle.

Those are just two examples of the many cases that my office has had to deal with. They mainly involve students in the middle of degrees or doctoral work, who thus have proven study records and whom the university has decided are able to complete their courses. Often the wording of the refusal has included factors not applicable to the case, showing that a form letter was used, rather than consideration being given to the individual applications. All the students refused visas who contacted my office were studying STEM—science, technology, engineering and maths—subjects. That may be because Newcastle attracts STEM students. It may be because the UKBA particularly dislikes STEM students. If that is the case, I hope that the Minister will explain why.

The view of those in the university to whom I have spoken and who have contacted me is that the refusals have much more to do with not exceeding quotas than the lack of merit of the individual applications. Why on earth would we do this? There is a shortage of UK and EU STEM students. International STEM students enable departments to have the scale to undertake a wider range of courses and high-quality research in fields that might otherwise be closed down.

As the Campaign for Science and Engineering recently said,

“Nearly 40% of the UK’s scientific output from 2002-2007 involved international collaborations, so it is actually a positive aspect of UK higher education that students are exposed to a diverse peer group from the outset.”

As my hon. Friend the Member for Sheffield Central said, the impact assessment for the proposals that we are discussing has confirmed the huge loss to the economy. It also confirms that the drive to cut overseas student numbers will reduce overall net migration by about 48,000 a year between now and the next general election. I am very afraid that we will lose many of the people whom we do not need or want to lose. We are in a globally competitive environment. Our universities and our country need to be competitive in that environment. We cannot and should not hang up a global “Closed” sign above our universities.

[Mr Joe Benton (in the Chair)]

I remind the final two Back-Bench speakers that the winding-up speeches will start at 5 o’clock.

16:47

[Tony Lloyd (Manchester Central) (Lab)]

I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) not simply on obtaining the debate, but on the way in which he introduced it. Despite some of the speeches that have been made, this is not an attempt to make a frontal assault on the whole of the Government’s immigration policy. All of us who have taken part in the debate and, I think, every Member of the House of Commons would accept that the bogus college has no place in British society. We should close such colleges down, prosecute those involved in running them and kick out those who have obtained bogus visas. That should be a statement of obvious fact.

What we are talking about here, though, is a recognition that, in the introduction of a relatively new system, haste may have been involved and there may be a need to fine-tune and adjust what already exists. I think that that is what my hon. Friend the Member for Sheffield Central concentrated on and I hope that we can get the Minister to address those issues. Rather unkindly, I will be complimentary to the Minister, as the hon. Member for Woking (Jonathan Lord) was. The Minister is a thoughtful man, and I hope that he will think about the issues that have been raised, because they are important.

Our higher and further education system is a precious national asset economically, but also culturally and in the wider realm of public diplomacy, so it does matter. It matters to all our constituencies. A city such as mine, with a huge educational infrastructure, both in higher education and in further education, depends on it for employment and for the very nature of modern Manchester. Within that context, I will concentrate on three particular aspects of the rules as they are now beginning to apply. These points have been brought to me by individual establishments. I will begin by raising, as other hon. Members have, the issue of a level playing field with respect to private institutions.

The Nazarene theological college, which obviously trains students in areas of theology, has made the point to me that the majority of its students are not visa holders—they do not need to be. It has a limited number of very high level students, mainly PhD students. However, PhD students attending private colleges such as the Nazarene college are treated differently from those who attend our public universities, in that only postgraduate students at universities and Government-sponsored students are able to bring in their dependants—their spouses and children. Often, those studying for doctorates at theological colleges are mature students. Frankly, saying that they must spend three or four years away from their families means that colleges will not be able to attract that kind of high-level student. I hope that the Minister will reconsider, because that college believed that there might be movement in that area. Perhaps that is something that warrants reconsideration.

A couple of institutions, both operating at a high level, have raised with me an issue that I have previously raised with the Minister—the post-study work route. One is the Northern Ballet school, which says that its graduates often do not get the regular paid work that they need; they need work experience if they are to pursue their careers. They will often take on freelance or part-time work, but at the moment that would take them outside the provisions of the post-study work route. Similarly, SSR college, which trains people to degree level, works in conjunction with universities on sound recording, a vital part of modern education. It, too, says that its students, after graduation, often have to look for part-time work, but again that would prevent them from taking the post-study work route.

The next point that I wish to raise in the brief time available has already been put to the Minister—the capacity to revise the impact of the new regime this year. INTO Manchester, which provides a route into higher education, and Manchester Metropolitan university have both raised similar issues with me about existing offers of places. The Minister said that unconditional offers would be honoured but there is the question of conditional offers.

More narrowly, questions have been asked about those people coming on to foundation courses where the language qualification is lower. Students often come to the university over the summer months to begin a part of their language course before going on to the foundation course. The summer is nearly with us, and the problem for these institutions is that they are having to correspond with students at a very late stage to say that they must now get the B1 English qualification, which they are finding too difficult.

My appeal to the Minister is whether, even at this late stage, we can modify the impact of the rules, make them a little more flexible, and recognise that in the longer run we do not want to damage this vital part of our economy and culture; I am sure that the Minister, too, does not want that. We need to refine that process in a way that suits everybody and makes no serious assault on the Government’s immigration policies.

16:53

[Jeremy Corbyn (Islington North) (Lab)]

I shall be brief so that the Minister has sufficient time to reply to the debate. I apologise to the House for missing part of the debate. It was the Government’s fault. I was forced to go to the Ministry of Justice to hand in a petition about legal aid; if the Government had not cut legal aid, I would have been here for the entire debate. The Minister may care to mention that to his colleagues.

I welcome the debate. I also welcome the introduction by my hon. Friend the Member for Sheffield Central (Paul Blomfield), and the spirit in which the debate has been conducted. All of us represent private sector institutions, which have now fulfilled the requirements put upon them by the previous Government, and that is welcome, or publicly funded universities—in my case, London Metropolitan university. I agree with my hon. Friend the Member for Manchester Central (Tony Lloyd) that none of us is in favour of bogus colleges.

I was often deeply concerned about the way in which overseas students would come to this country and be hoodwinked into going to crummy colleges that did nothing for them, but which certainly exploited them. That did this country more damage than anything else, because those students felt that they had been brought here under false pretences—as indeed they had. They did not succeed in learning much and were often relieved of a great deal of money, only to be disappointed with the performance of the educational institutions. I do not have a problem with the fact that we have a tough regime for the private sector and language schools; we should be clear that they are genuinely offering an education for overseas students. However, what is proposed seems to be a knee-jerk reaction to what is being said about immigration, and it conflates immigration issues with issues about people’s right and need to study. It is damaging the reputation of this country and it is damaging the aspirations of students from other countries.

At some point, most MPs have been on delegations abroad on behalf of Parliament or other organisations. Everywhere we go, we come across people saying, “I studied in Newcastle”—or in Manchester, Birmingham or London—and that they benefited from it and enjoyed it. They are well disposed towards many things about our country—literature, science, engineering, transport systems or whatever it happens to be—and good will is built up as a result. We cannot calculate that good will, but we all know that it exists.

Now, when I go to other countries and talk to younger people about the possibility of studying in Britain, they say, “It’s expensive”—it is expensive—“it’s difficult to get a visa, and the immigration service and the entry system to this country have a very bad reputation.” People do not enjoy the experience, as non-EU nationals, of trying to come through Heathrow, Gatwick, or anywhere else, particularly if they come from Bangladesh, Africa or Latin American countries. They do not like the way in which they are interviewed, or the intrusive questioning that goes with it. A balance has to be drawn, and I am not convinced that we have it correct. I know that this is not related to education, but many tourists that visit Europe leave out Britain. They do not wish to go through the visa business of coming here, so they restrict their tour to France, Germany and the Netherlands.

I represent a constituency that includes London Metropolitan university. It has a huge diversity of students and a great diversity of courses, which I hope it will be able to maintain, but that is for another day. It needs overseas students. The student body needs overseas students. The university has built commendably close relationships with higher education institutions in Russia and Ukraine, as well as in other parts of the world, and it has many overseas students. The overseas students benefit from the quality of the education that they receive and from the experience of being in London, but our students at London Met—mainly local adult students—benefit enormously from their interaction with students from entirely different backgrounds. It is not a one-way street; it is very much a two-way street that is of enormous benefit to our students and to our economy.

I hope that in his response to the debate the Minister will recognise the economic value, the social value and the educational value of overseas students, and not stick with the arbitrary date of 21 April for the application of any new requirements. I hope, too, that he will recognise that there is a huge body of united opinion among private sector institutions as well as the publicly funded universities, and among Members across the House, that this country should be a centre for higher education. We all want our universities to benefit from overseas students. Our country has benefited greatly from them—in research, as my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) pointed out, and also in their good will towards this country when they return home. That is something that we can change quickly and I hope that we will.

16:59

[Mr Gerry Sutcliffe (Bradford South) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Benton. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing the debate. It is a subject that is important to us all, and contributions to the debate from all sides reflected the need to consider the matter seriously. We heard from Back Benchers, members and Chairs of Select Committees, and a former Home Secretary, which shows the importance of the issues that we face.

It is my job to reflect on the issues that have been raised in this debate. There have been a number of recurring themes to which the Minister will want to respond. If he is not able to do so today, I am sure that he will write to hon. Members with detailed answers. Some of the concerns may fall under the responsibility of other Departments.

I was struck by the contributions from the hon. Members for Peterborough (Mr Jackson) and for Bedford (Richard Fuller) because they reminded the Minister of his obligation to deliver the Conservative manifesto commitment to reduce net immigration from hundreds of thousands to tens of thousands. That commitment may have been watered down slightly in the coalition agreement, but it is, none the less, a millstone around the Government’s neck because it is so difficult to achieve. I understand the debates and discussions around immigration, but I reflect also on the words of my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett). He said that when he was Home Secretary, there were issues that needed to be faced, but the goalposts kept moving. As he said, we tried to do all sorts of things to try to improve the situation.

The recurring themes in this debate on student visas have come from both sides of the House. I hope that we can get away from the partisan approach to immigration and the feeling that anything the previous Government did was completely bad and that the present Government will deliver their target. If we continue in that vein, we will not achieve our joint aim of balanced migration. We all want to ensure that we have in our country the people whom we want, require and need. We must reflect on the fact that the previous Government introduced the UK Border Agency and a whole series of initiatives to try to deal with migration.

I was struck by a point made by my right hon. Friend the Member for Leicester East (Keith Vaz), the Chair of the Home Affairs Committee. He said that part of the problem with migration and immigration issues is the counting in and the counting out of people; it is hard to understand what the facts and figures really are. We have accepted that the previous Government failed to deliver in that regard and we look to support the present Government in their attempts to try to reach a solution to that difficult problem.

Let us put to one side the issue of net migration and how we achieve that and reflect on the issues that we have here today. Student visas and the whole issue around students became a problem when the Home Secretary made a statement on 21 March, saying that we were going to reduce the number of students by 400,000 by 2015. The reality is that that will not be achieved. We have already heard that that figure will be reduced by 50%. That is part of the reason for this millstone around the Government’s neck.

We then move on to the issue, which my hon. Friend the Member for Sheffield Central put so passionately, of the impact that we are having on our higher education sector. The message has gone out to the wider world that Britain is not open for business. We heard about the concerns that the Business, Innovation and Skills Committee had to deal with on its visit to China and the 40% reduction in applications to the UK from India. On a recent all-party visit to Azerbaijan, I was told that the Azerbaijanis wanted to work and be involved with the UK, but thought that there problems in relation to how we saw the situation in further and higher education.

I hope that the Minister will reflect on the points that have been raised today about the transitional arrangements, the time that the institutions will need to put in place the scheme and the problems relating to the offers that have been made to individual students. He should reflect, too, on the cost to the country. The hon. Member for Peterborough said that there was no empirical evidence on the financial impact of such a change, and yet the Home Office’s own impact assessment says that the cost to the country will be £2.6 billion or even £3.6 billion.

Foreign students benefit our university and college system in the UK. Hon. Members have talked about how they develop people intellectually, socially and culturally. We are also seeing a higher number of UK students going to universities in America. Our competitors, such as the US and Australia, are taking advantage of our current situation.

In conclusion, the problem of student visas needs to be addressed. We do not view it in a partisan way. We do not want to attack the Government’s immigration policy. We recognise that there must be managed migration and we want to work with the Government in a consensual way to achieve those things. The student visa issue is impacting in a negative way on the private sector and on public colleges and universities and we need to do something about that pretty speedily. If we do not, we throw away something that is a boost to our economy. I am talking about the benefits that foreign students bring to our universities and to our many cities and towns.

I hope that the Minister will reflect on this excellent debate, recognise that there are serious problems that need to be faced and come up with some solutions in the short term that will prevent any further damage to this sector. We need to have more debates on migration and immigration to decide what we can do collectively to resolve the issues.

I have some sympathy with what the Chair of the Home Affairs Committee said. He asked whether we should go down the route that the US has determined. I hope that the Minister will reflect on an important debate that has had no partisan input, and I look forward to hearing what he has to say.

17:07

[The Minister for Immigration (Damian Green)]

I echo the remarks of the hon. Member for Bradford South (Mr Sutcliffe) about the thoughtful and passionate nature of the debate. The hon. Member for Sheffield Central (Paul Blomfield) introduced this important debate in a thoughtful way.

I will follow the good examples of my hon. Friends the Members for Peterborough (Mr Jackson) and for Bedford (Richard Fuller) and the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), the former Home Secretary, in saying that there are clearly macro and micro aspects to this and it is important that we conduct the debate about student visas and tier 4 within the overall context of the Government’s immigration policy.

I should say at the outset that Britain is quite rightly internationally renowned for its top-quality education institutions. Many hon. Members have rightly made that point. The students who choose to study here from across the globe bring numerous cultural, social and economic benefits to the UK and to their own countries when they return. We all acknowledge that and it is certainly acknowledged across Government.

We must recognise that the student visa system had become a broken instrument. It has failed to control immigration and, in many cases, to protect legitimate students—a point that the hon. Member for Islington North (Jeremy Corbyn) made. He said that severe damage has been caused. He said that people come here honestly hoping to study and then find that they have been scammed. Bogus colleges are scamming not just the British immigration system but the students who come here.

Student immigration has more than trebled in the past 10 years and is now far larger than the other two main routes of immigration—the work route and the family route. Too many of the people who come here calling themselves students have a primary motivation of working here, and not of receiving a high-quality education. Too many institutions are providing a service that is not about education but immigration. Addressing that issue is at the heart of what we are seeking to do. Many Members from all parties have agreed that it is worth driving out that abuse.

There are endless examples of institutions and “students” working the system to get round language requirements and rights to work, and to bring in dependants. That is not just a small problem; too many colleges provide minimal or no tuition or classroom study. We have students barely able to hold a conversation in English turning up to “study” degree-level courses.

Last year, both Governments—the Labour Government and the coalition Government—were in power. So I hope that I will respond to the point made by the hon. Member for Bradford South about being non-partisan by saying that in 2010 tier 4 visas represented 14% of visas that were issued, but tier 4 visa-holders were responsible for 41% of refusals at ports, in other words actually being turned down by immigration officers. The equivalent figures for tiers 1, 2 and 5 visa-holders were all less than 1%.

We want genuine students coming to Britain to attend courses of high educational value at legitimate and responsible institutions. We need to maintain our international reputation for providing top-quality education, and we want the very best students to stay on in the UK to complete their studies. That is exactly what our proposals are designed to deliver and that is why the Home Secretary announced a comprehensive programme of reform on 22 March. I want to set out what those changes mean in practice and how they will contribute to meeting our wider objective of reducing net migration to the tens of thousands. I also want to address the many specific points made by individual Members during the debate. I will try to deal with them all in the next few minutes.

Many contributors to the debate have talked about flexibility, including the hon. Member for Sheffield Central. Indeed, to minimise disruption to education providers and students, we are implementing the changes in three stages. The rules for the first stage came into effect on 21 April. Last Monday—13 June—we laid the second set of changes to the rules before Parliament. They will come into effect on 4 July. We will complete our changes by the end of 2012.

We continue to have extensive dialogue with the sector about the changes that we are making. I can assure right hon. and hon. Members who are concerned about that that there are numerous and constant contacts at official level and, where necessary, between myself and Universities UK and selected vice-chancellors about these changes, because we want to introduce them in the most practical way possible.

I want to respond to a specific point that was made about the timing of the changes. The hon. Member for Edinburgh North and Leith (Mark Lazarowicz) read out the letter from the vice-chancellor of a university in his constituency asking if all the changes could be delayed for a year. I should say that when we began to have discussions on them last autumn, we were urged by the universities themselves to get on with them, because we all know that the longer there is any uncertainty in a system, the more people are wary of that system. Various Members have said that the uncertainty that exists is deterring people from making applications and so on. If we allow the uncertainty to continue for another year, I suspect that the results would be worse. So that was the wise advice that I received from the universities last autumn.

I must repeat the basic point that there are so many abuses of the system that we need radical reform. Many colleges seem happy to accept students who do not even meet their own admissions criteria and who speak very little English. In one college, we found that there were two lecturers for 940 students. In another, we found that students were attending classes for just one day a month and working excessive hours for the rest of the time. UK Border Agency enforcement teams recently picked up students who were supposed to be studying at a college in London, but were actually living and working in west Wales; indeed, every student whom we found from that college was doing that.

We are targeting the least compliant students and institutions, and of course that is what we should do. For too long, institutions in parts of the privately funded education sector have been essentially unregulated, yet all the evidence suggests that those institutions pose the biggest risk to immigration control. In a sample of tier 4 students studying at private institutions about which the UKBA had concerns, up to 26% could not be accounted for.

The UKBA has revoked the sponsorship licences of 64 colleges. I hope that that meets the reasonable request of the right hon. Member for Leicester East (Keith Vaz), who is Chairman of the Home Affairs Committee, that the inspection regime should be robust. He said that the UKBA used to phone up institutions in advance to say that its inspectors were coming. As is evident from the number of licences that have been revoked, the enforcement regime is getting better.

I want to turn to the current points-based system. Again in the spirit of non-partisanship, I must say that this Government did not arrive and tear up that system. We said that we could build on it and we accepted the point of having objective ways of measuring who comes to the UK, and that is what we are seeking to do. Under that objective system, a sponsor assesses the intentions and ability of the student; UKBA staff no longer have the power to refuse a migrant entry to the UK on those grounds. We therefore need to make absolutely sure that sponsors are exercising their powers responsibly, and that is one of the things that these reforms are designed to achieve.

[Mr Stewart Jackson]

Will my hon. Friend give way?

[Damian Green]

I will give way once; I suspect that I will not get through my speech if I give way to all the Members who wish to intervene.

[Mr Jackson]

I am very grateful to my hon. Friend for giving way. On the points-based system, given that the overall purpose of immigration policy is to reduce net migration, can he confirm that after the introduction of the points-based system in 2007, arrivals of students, dependants and student visitors increased from 370,000 in 2007 to 489,000 by 2009?

[Damian Green]

Absolutely. Indeed, the numbers were still rising right up until last year. We now have the figures up to the summer of last year and the numbers were still rising at that point. As I was saying, we are building on the points-based system, but we are precisely introducing limits and precisely driving out abuse in the student system. That is why we will move on to other systems, so that we can get the numbers down. The points-based system is not enough on its own, but it is a platform on which we can build.

The Home Secretary announced new reforms that mean that all sponsors must now be vetted by one of the approved inspectorates and all of them must attain the status of highly trusted sponsors. In line with that commitment, we announced earlier this week that the Quality Assurance Agency for Higher Education and the Independent Schools Inspectorate would extend their activities to cover privately funded providers. Sponsors must meet our immigration requirements and high standards of educational provision. Institutions that do not meet those requirements are now subject to a limit on the number of students that they can bring in. To stay on the sponsor register in the longer term, they must achieve highly trusted sponsor status no later than April 2012 and gain accreditation by the relevant agency by the end of 2012. The imposition of a limit responds to the urgent need to tackle abuse, allows sponsors time to adjust to the new system and prevents surges in applications from high-risk sectors. We are well on track to delivering a sponsorship system that the public can trust.

We are also raising the bar on entry requirements. All students coming to study degree-level courses must now be able to speak English at an upper intermediate level and others will have to speak English at an intermediate level. If students cannot answer basic questions in English about their course, UKBA officers will refuse them entry at the border. That was another point legitimately made by the Chairman of the Home Affairs Committee. We are now bringing back the power for immigration officers at the border to recognise that someone is obviously, indeed blatantly, incapable of fulfilling the requirements of their visa.

In recognition of our trust in universities, we are flexible about the methods that they use to assess a student’s level of English. That brings me on to a specific point that was made by the hon. Member for Sheffield Central. Let me start by discussing what is, if you like, the biggest transitional issue. That is the English language requirement, which he raised in his introductory speech.

The appropriate level of English for those coming to study at level 6 and above is an upper intermediate level across each of the four disciplines: reading; writing; speaking; and listening. That is level B2 on the common European framework of language. A lower level—B1—is the appropriate level for lower courses, including the pathways courses that many Members have mentioned. Those are courses taken by people coming in who do not have the appropriate level of English but who want to take an English language course in the UK on their way to taking a full university course here. So we have set a lower level of English as a requirement for those students.

In order to get a visa, those outside universities will have to present a test certificate from an independent test provider proving that they have attained the required level. As another flexibility that we have introduced, universities will be able to vouch for a student’s ability if they are coming to study at degree level or above. Indeed, there might be the odd student who cannot meet the requirements for all four disciplines but is so exceptional that we will allow individual requests by university academic registrars.

A number of Members have talked about English language schools. People who want to come to the UK to study lower-level English can do so for up to 11 months through the student visitor route. We introduced that concession after discussions with the English language colleges last autumn, and the colleges have welcomed it.

On the confirmations of acceptance for studies and the visas, the requirements for an offer of a place at a university are separate from the requirements under the immigration rules. Universities could, and should, have assigned a confirmation of acceptance for studies to people who held unconditional offers before 21 April. Someone with a conditional offer has, of course, not yet satisfied the university’s own academic entry requirements. The immigration system and its requirements have always been separate from the academic entry requirements, and it is important not to confuse the two. For instance, any Government would refuse a student entry if their background indicated that a potential harm would be posed to the UK, even if a university had given an unconditional offer of a place.

It was mentioned that there are difficulties relating to the English language tests. The UKBA ran a procurement exercise and expanded the list of English test providers to ensure that there was significant capacity, and we are in regular contact with each of the approved test providers, which have demonstrated flexibility in expanding test centre capacity where there is demand. If there are blockages, we are trying hard to remove them.

There has been much inevitable discussion about the impact assessment, and various figures have been cited. I wish to put on the record that the net cost is said to be £2.4 billion. The £3.6 billion is the gross cost, but there will also be £1.1 billion of benefits. The truth about the impact assessment process is that it is in its infancy and is not yet satisfactory. I have spoken to the economists who do the assessments and they agree that the process needs to improve. I do not want to go into the economic theology of what works and what does not work because it is late on a Thursday afternoon, but I shall give one very practical example. The way in which the assessments are carried out requires us to assume that there is a zero displacement effect of students taking jobs on the local labour market. In other words, if a foreign student is doing a job and then leaves, 100% of that economic activity is assumed to be lost. In practical terms, however, it is likely that that person will be replaced by a British student or someone else. Clearly, therefore, the assessments are not satisfactory, and we have asked the Migration Advisory Committee, which is independent of Government, to look at the process over the summer.

The definition of immigration is beginning to vex us, and I am half-tempted to spend a long time discussing whether students should somehow be removed from the definition altogether. There is clearly an academic argument to be had, but I will just make the underlying point that although it would be fantastically convenient for the Minister for Immigration suddenly to discover that hundreds of thousands of people who were regarded as immigrants yesterday would not be regarded as immigrants tomorrow—I would hit my targets with no effort at all—that is not realistic, and I do not think that the public would accept it. In terms of confidence, the point is very well made that immigration statistics are imperfect, particularly regarding counting people in and out, and that is why we have re-let the e-Borders contract. Over the next few years we will develop a much greater ability to count people out as well as in, but it seems sensible to stick to the internationally agreed measurements we have always had, which are used by other countries, rather than apparently try to redefine our way out of what is a serious and difficult political issue.

The other big subject that many Members have mentioned is post-study work, and I am afraid that I will have to agree to differ with the hon. Member for Sheffield Central. The students’ primary motivation should be to study, not to work. The ability to work after finishing a course or, as my hon. Friend the Member for Woking (Jonathan Lord) said, while doing a course, should not be a significant part of the motivation of someone coming here on a student visa. If people want to come here to work, there are work routes, and I do not want them to deceive either us or themselves by saying, “I’m here as a student but what really matters to me—the motivating force—is that I can either work during the course or stay for a couple of years afterwards.” It is simply not the case that everyone who does that gets a graduate-level job. In one cohort that we looked at, of those who were hanging around for the allowed two years after finishing their degrees, about 20% were unemployed, and 50% of those who were employed were in unskilled jobs and not making use of their studies.

[Tony Lloyd]

Does the Minister not recognise that there are some people who would benefit as part of the total package of education plus skills training but who might not qualify under the current post-study work route structure?

[Damian Green]

No. The problem is that the post-study work route has been abused as much as it has been legitimately used. We are not closing down that route altogether; we are specifically saying, “If you can get a graduate-level job, you can stay.” That seems very reasonable—[Hon. Members: “It is about the salary”]. I thank Members for that. Let me talk about the £20,000 salary that the hon. Member for Sheffield Central suggested was somehow wrong. I have to say, in the gentle spirit of non-partisanship in which I am making this speech, that the £20,000 minimum salary threshold for tier 2 was set by the previous Government, following a recommendation by the Migration Advisory Committee in August 2009. At that time, the tier 2 skill threshold was jobs at national vocational qualification level 3, and this Government have now raised that threshold to jobs at NVQ level 4, at which level the case for a salary threshold of at least £20,000 becomes even more compelling.

[Paul Blomfield]

What the previous Government surely had in mind when they set that threshold was not post-study work but the conventional application for tier 2.

[Damian Green]

It was set as a graduate-level salary, and it still is. We have kept that threshold. We have not inflation-linked it, and we have increased the skill level, so, if anything, there is a stronger case for it now.

I have a fascinating answer about accountancy qualifications for the right hon. Member for Sheffield, Brightside and Hillsborough, but given that there are only three minutes to go I hope that he can hold his interest on that topic and bear to have my reply in writing.

In response to a point made by the hon. Member for Edinburgh North and Leith, it is true that initially universities were automatically granted highly trusted sponsor status, but they were all required to apply for the status by the end of June 2010. All applications were considered against the published criteria. I was puzzled that someone said they were confused about the criteria, because they were published. Universities retained highly trusted sponsor status after June 2010 only if they had met all the criteria.

The hon. Member for Scunthorpe (Nic Dakin) made a point about independent schools. Independent schools have been afforded greater flexibility simply because of their extremely low levels of non-compliance. They have earned that privilege because they are practically 100% compliant. The requirement for a secure English language test applies to all users of tier 4 general. Independent schools largely use the tier 4 child route, for which there is no English language requirement. That route is also available to sixth-form colleges that recruit 16 and 17 year olds.

There was a question about the list of financial institutions, and I can say that that list will be available on the UKBA website shortly. The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) asked about quotas, and I am happy to assure her that there are no quotas for UKBA officials to grant or refuse applications.

Once all the rules have been implemented, I expect the reforms to reduce the number of student visas by about 70,000 a year, and I estimate that at the end of this Parliament there will be about 260,000 fewer student visas and about 100,000 fewer dependants’ visas. Members have raised many practical issues that I have not had time to address, but I will take them away and think about them hard, particularly the individual cases mentioned by the hon. Member for Manchester Central (Tony Lloyd) .

I am of course aware of the importance of international students for British educational institutions and for the UK economy, but I believe that the measures strike the necessary balance.

17:30

Sitting adjourned without Question put (Standing Order No. 10(11)).

Written Ministerial Statements

Thursday 16th June 2011 Written Statements

Thursday 16 June 2011

Housing and Local Government (Unpublished Research Reports)

Thursday 16th June 2011 Written Statements

[The Minister for Housing and Local Government (Grant Shapps)]

Today the Government are publishing a further group of reports presenting the findings from research projects commissioned by the previous Administration. There is a significant backlog of unpublished reports that were produced by the previous Government and over the next few months we will be publishing further reports in groups, themed on particular topics.

The reports and findings are of general policy interest, but do not relate to forthcoming policy announcements. We are publishing these documents in the interests of transparency and as part of our freedom of information commitment to publish the results of all commissioned research. For transparency, all concluded research work is being published, though some reports may not be as complete or in the format that the Department for Communities and Local Government would normally require.

The four reports published below represent the findings from four DCLG research projects commissioned at a total cost to taxpayers of £161,796 and one report from the Homes and Communities Agency commissioned at a cost of £63,600. These findings cover the topics of housing and local government.

Housing reports

(i) Domestic violence—Assistance for households without dependent children.

This study explored the type of assistance provided by local authorities and also other specialist agencies. This report was commissioned in November 2008 at a cost of £70,000.

(ii) Cumulative impacts of regulations on house builders and landowners.

This report provides expert advice on the returns expected from landowners when selling land for housing and the factors that drive this. This report was commissioned in June 2008 at a cost of £3,000.

Homes and Communities Agency report

(iii) New affordable homes: What for whom and where have registered providers been building between 1989 and 2009.

This report analysed available data and evidence to provide an assessment on how the provision and investment of affordable housing by registered providers has changed over the last 20 years (1989-2009) with more detailed case study work in five local authorities. This report was commissioned in February 2010 and cost £63,600.

Local government reports

(iv) Long-term evaluation of local area agreements and local strategic partnerships: Final report.

The report considers the role of local strategic partnerships and the impact of local area agreements, from the point of view of partnership working, efficiency and service improvement. The report was commissioned in 2007 at a cost of £47,898.

(v) Evaluation of inspiring communities: scoping report including the theory of change and outcomes framework.

This is a scoping report which includes the theories of change for the various projects—why and how the initiatives should work—and the outcomes framework, showing how success should be measured. The report was commissioned in 2009 at a cost of £40,898.

At a time when public budgets must be reduced, the new Government want to ensure their research delivers best possible value for money for the taxpayer and that sums expended are reasonable in relation to the public policy benefits obtained. My Department has rigorous scrutiny and challenge processes for commissioned research.

New projects will continue to be scrutinised to ensure the methodology is sound and that all options for funding are explored at an early stage. This includes using existing work from other organisations, joint funding projects with other Departments or organisations and taking work forward in-house.

These reports and findings are of general policy interest, but do not relate to forthcoming policy announcements and are not a reflection of the current Government’s policies and priorities. DCLG is publishing these reports in the interests of transparency.

Copies of these reports are available on the DCLG website. Copies have been placed in the Library of the House.

Service Personnel and Veterans Agency

Thursday 16th June 2011 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

With effect from 16 June 2011, the Service Personnel and Veterans Agency (SPVA) will cease to have the status of executive agency of the Ministry of Defence (MOD).

The SPVA was formed in April 2007 from the merger of the Armed Forces Personnel Administration Agency (AFPAA) and the Veterans Agency (VA). The purpose of the merger was to provide both serving and retired members of the armed forces and their beneficiaries with a single point of contact for all personnel administration matters, and this has been achieved.

The SPVA will become part of the new Defence Business Services (DBS) in 2013. The SPVA will relinquish its agency status from 16 June 2011 as this is not considered critical to delivering its business, but it will retain its name until it is incorporated into DBS to avoid the unnecessary expenditure associated with re-branding. This change in operating status will have no impact on SPVA’s customers and will achieve staff reductions in the support functions of £319,000 per annum, starting in late financial year 2011-12. Wider savings to Government are also anticipated, in particular the costs incurred in auditing the agency’s annual report and accounts.

Diamond Jubilee Civic Honours Competitions

Thursday 16th June 2011 Written Statements

[The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)]

On 1 December 2010 I announced the launch of the diamond jubilee civic honours competitions for the grant of city status and of lord mayoralty (or, in Scotland, lord provostship) to mark Her Majesty the Queen’s diamond jubilee in 2012. The closing date for entries was 27 May 2011.

I am pleased to announce that 26 applications for city status and 12 for lord mayoralties have been received. This is a magnificent response to the competition and it is clear an impressive amount of effort has gone into all the applications that have been submitted.

The full list of applicants for city status is:

Bolton

Bournemouth

Chelmsford

Colchester

Coleraine

Corby

Craigavon

Croydon

Doncaster

Dorchester

Dudley

Dumfries

Gateshead

Goole

Luton

Medway

Middlesbrough

Milton Keynes

Perth

Reading

Southend

St Asaph

St Austell

Stockport

Tower Hamlets

Wrexham

The cities applying for a lord mayoralty are:

Armagh

Cambridge

Derby

Gloucester

Lancaster

Newport (Gwent)

Peterborough

Salford

Southampton

St Albans

Sunderland

Wakefield

The process of assessing the entries will begin shortly. Careful consideration will be given to all applications, after which Ministers will formally provide their advice to Her Majesty, as such honours are awarded under the royal prerogative. The results are expected to be announced early in 2012.

Post-Energy Council (Luxembourg 10 June)

Thursday 16th June 2011 Written Statements

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

Andy Lebrecht, Deputy Permanent Representative to the EU, represented the UK at the Council.

The Council began with a report by the Commission on the progress of the regulation on energy market integrity and transparency (REMIT). The Commission noted the importance of the issue for the development of the internal energy market and reported that informal trilogues with the European Parliament would begin on 16 June with the aim of reaching a First Reading agreement.

The Council then agreed conclusions on the energy efficiency action plan and the Commission outlined the next steps on energy efficiency, including the publication of a draft energy efficiency directive in June. There were a number of interventions by member states, noting the importance of energy efficiency.

The presidency presented a summary of the informal Energy Council discussion in Hungary on the forthcoming 2050 energy road map. The Commission explained that work would continue over the summer on scenarios for the road map and highlighted the challenges of meeting the 80% to 95% emissions reductions targets and the importance of member states’ decisions on energy mix. The UK noted the importance of the road map setting out potential scenarios to enable each member state to make such decisions. In response to requests from several member states, the Commission said that it would carry out a study for the autumn on the impacts on EU markets of national decisions about energy mix.

The Commission noted the agreement reached by ENSREG on the content of nuclear safety tests and that the tests had begun. The UK emphasised that nuclear security should not be included in the stress tests, being a matter of national security

Poland briefly outlined its plans for its presidency. Key issues will be security of supply and international co-operation, offshore drilling and infrastructure.

The Commission reported on a number of international energy relations issues, including the need for rapid progress over the southern corridor. Ministers discussed the issue of financing for energy infrastructure over lunch.

Environment Council (21 June 2011)

Thursday 16th June 2011 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

My right hon. Friend the Secretary of State for Energy and Climate Change and I will represent the UK at the Environment Council in Luxembourg on 21 June.

At this Council, Ministers will take note of progress reports relating to the proposal for a directive on control of major accident hazards involving dangerous substances (“Seveso III”) and to the proposal for a regulation regarding the possibility for member states to restrict or prohibit the cultivation of GMOs in their territory.

The presidency will also seek the adoption of Council conclusions on the protection of water resources and integrated sustainable water management in the European Union and beyond, a road map for moving to a competitive low-carbon economy in 2050 and the EU biodiversity strategy to 2020.

The lunch discussion will be on climate change and the status of international negotiations.

The following topics will be covered under “any other business”:

Information from the Commission on aviation/emissions trading scheme implementation;

Information from the Commission on the Conference on the Implementation of the EU Environmental Law (Brussels, 15 June 2011);

Information from the Commission on CSD 19 conclusions and possible way forward to Rio+20;

Information from Romanian delegation on the meeting of Environmental Ministers from the Black Sea Economic Co-operation countries (Bucharest, 31 May 2011) ;

Information from the Dutch delegation on the risks associated with nanomaterials;

Information from the French delegation on the management of cormorants;

Information from the Lithuanian delegation on nuclear installations planned in the EU neighbourhood (Kaliningrad region and Belarus);

Information from the Austrian delegation on new challenges in the light of the Fukushima accident—reflections of countries without nuclear power (Vienna, 25 May 2011);

Information from the Swedish delegation on global, regional and bilateral action on short-lived climate forcers;

Information from the Danish delegation on the use of industrial gas credits under the effort sharing decision;

Information from the presidency and Commission on the outcome of the first meeting of the Open-Ended Ad Hoc Intergovernmental Committee for the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (Montreal, 5- 10 June 2011);

Information from the Slovak delegation on the third meeting of the Conference of the Parties to the Framework Convention on the Protection and Sustainable Development of the Carpathians (Bratislava, May 25-27, 2011) ; and

Presentation by the Polish delegation on the work programme of the incoming presidency.

Food and Catering Services (Government Buying Standards)

Thursday 16th June 2011 Written Statements

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

I am pleased to announce that the “Government Buying Standards for Food and Catering Services” has today been published. There are Government buying standards for commonly procured goods and services in 10 major product groups, but this has not previously included food and catering.

These are mandatory on central Government and we will encourage the rest of the public sector to use them. We want to support and develop a profitable and competitive food chain and to ensure a secure, environmentally sustainable and healthy supply of food. Where Government lay down standards of production, they should ensure that their own purchases meet these standards.

Therefore, these standards will set an example and provide a clear, credible and workable example for the wider public sector to follow. This is something that has not been done before and has been cited as one of the key barriers to progress in driving up standards of public sector food. In particular, the standards deliver an undertaking for 100% sustainably sourced fish.

DEFRA and Department of Health economists conducted an economic impact assessment on proposals, which we then opened up for review by a wide range of stakeholders ranging from catering and food suppliers, public procurement practitioners and Government Departments to sustainability NGOs and consumer groups. More than 50 responses were received.

In response to the review, some changes were made to the criteria, which were then agreed across Government.

The standards that have been agreed cover:

Sustainably sourced fish.

Animal welfare.

UK or equivalent production standards where this does not increase overall costs.

Higher environmental standards, such as organic or Integrated Production (for example LEAF, or Linking Environment And Farming) for a proportion of food.

Seasonal produce.

Fairly traded produce.

Energy and waste management.

Nutrition.

Control Powers (11 March - 10 June)

Thursday 16th June 2011 Written Statements

[The Secretary of State for the Home Department (Mrs Theresa May)]

Section 14(1) of the Prevention of Terrorism Act 2005 (the 2005 Act) requires the Secretary of State to report to Parliament as soon as reasonably practicable after the end of every relevant three-month period on the exercise of the control order powers during that period.

The level of information provided will always be subject to slight variations based on operational advice.

The future of the control order regime

On 23 May 2011, the Terrorism Prevention and Investigation Measures Bill was introduced in the House of Commons. A copy of the Bill can be found on Parliament’s website. The home page for the Bill is:

http://services.parliament.uk//bills/2010-11/terrorismpreventionandinvestigationmeasures.html

The Bill makes provision for the abolition of control orders and their replacement with a new, less intrusive and more focused regime. The control order system will continue to operate until its replacement is in force.

The exercise of the control order powers in the last quarter

As explained in previous quarterly statements, control order obligations are tailored to the individual concerned and are based on the terrorism-related risk that individual poses. Each control order is kept under regular review to ensure that the obligations remain necessary and proportionate. The Home Office continues to hold control order review groups (CORGs) every quarter, with representation from law enforcement and intelligence agencies, to keep the obligations in every control order under regular and formal review and to facilitate a review of appropriate exit strategies. During the reporting period, three CORGs were held in relation to the orders in force at the time. Other meetings were held on an ad hoc basis as specific issues arose.

During the period 11 March 2011 to 10 June 2011, one new non-derogating control order was made, with the permission of the court, and served. One non-derogating control order which was made, with the permission of the court, during a previous quarter was served during this quarter. A control order already in force at the beginning of this reporting period was revoked on the direction of the court and a new order made and served in its place. Two control orders have been renewed in accordance with section 2(6) of the 2005 Act in this reporting period.

In total, as of 10 June, there were 12 control orders in force, all of which were in respect of British citizens. All of these control orders were non-derogating. Three individuals subject to a control order were living in the metropolitan police district; the remaining individuals were living in other police force areas.

One set of criminal proceedings for breach of a control order was concluded during this reporting period following a CPS decision that prosecution was no longer in the public interest in the light of the revocation of the control order to which they were related.

During this reporting period, 60 modifications of control order obligations were made. Twenty-five requests to modify control order obligations were refused.

Section 10(1) of the 2005 Act provides a right of appeal against a decision by the Secretary of State to renew a non-derogating control order or to modify an obligation imposed by a non-derogating control order without consent. Three appeals have been lodged with the High Court during this reporting period under section 10(1) of the 2005 Act. A right of appeal is also provided by section 10(3) of the 2005 Act against a decision by the Secretary of State to refuse a request by a controlled person to revoke their order or to modify any obligation under their order. During this reporting period two appeals were lodged with the High Court under section 10(3) of the 2005 Act.

On 5 April 2011 a judgment was handed down by the Court of Appeal in BM v Secretary of State for the Home Department [2011] EWCA CIV 366, in relation to the appeal brought by BM against the decision of the High Court to uphold his control order. The Court of Appeal allowed BM’s appeal. It found that the High Court did not consider the correct legal test at the initial review of the control order because it only considered whether the control order was necessary at the date of the hearing and not at the date it was made. It further found that, on the basis of the evidence before it, the control order was flawed from the outset. The Court of Appeal made clear that it only considered the open evidence against BM in reaching this decision. The judgment recognised that the Secretary of State argued that the control order was justified on the totality of the evidence, including closed evidence that was not before them, but found that they should consider only the open evidence that was before them so as to avoid delaying the outcome of this case. The Court of Appeal directed that the control order should be revoked 48 hours after hand-down with retrospective effect from the date on which it was made.

On 20 May 2011 a judgment was handed down by the High Court in CD v Secretary of State for the Home Department [2011]EWHC 1273(admin) in relation to the appeal brought by CD under section 10(3) of the 2005 Act against the decision to refuse to remove an obligation that would require him to relocate away from his previous area of residence. The judge dismissed the appeal, concluding that the relocation obligation was a necessary and proportionate measure to protect the public from the risk of what is an immediate and real risk of a terrorist related attack. The judge also found that the Secretary of State should contribute to the travel costs of CD’s family. He made clear that the finding in this case does not mean that a contribution to travel costs should be made in every case of relocation.

Most full judgments are available at: http://www.bailii.org.

Justice and Home Affairs (Post-Council Statement)

Thursday 16th June 2011 Written Statements

[The Secretary of State for the Home Department (Mrs Theresa May)]

The Justice and Home Affairs (JHA) Council was held on 9 and 10 June in Luxembourg. My right hon. Friend the Secretary of State for Justice, the Scottish Cabinet Secretary of Justice, Kenny MacAskill MSP, and I attended on behalf of the United Kingdom, the following issues were discussed at the Council:

(The Council began in Mixed Committee with Norway, Iceland, Liechtenstein and Switzerland (non-EU Schengen states). The presidency reported that preparations for the VIS go-live date of October 2011 were on track. The Commission underlined the importance of member states notifying their preparedness by the end of July to allow time for the necessary legal and technical preparations.

The update on the Commission-led project to implement the central element of the second generation Schengen Information System (SIS II) confirmed that implementation was still on track.

The Council agreed the draft regulation on creating an IT agency. This will now be considered by the European Parliament to establish whether it can be the basis for a first reading deal.

In advance of the June European Council, Ministers held a wide-ranging debate on borders, asylum and migration, adopting conclusions reacting to three Commission communications on immigration issued last month. The UK highlighted that a stable, secure and prosperous future for the region required effective management of migration, mobility and security. Migration should be considered in assessing reform in the European neighbourhood. The global approach to migration provided the tools and principles for partnerships on migration and member state involvement was vital. Dialogue had to be balanced and transparent. On asylum, the UK raised concerns about the emphasis on legislative solutions: the problem was not a lack of rules, but implementation of the existing ones. While agreeing to the draft conclusions, the UK stated that they did not believe that the common European asylum system was in the UK’s national interest and any further opt-in decision would be taken on a case-by-case basis, taking account of national interests. The UK opposed suspension of the Dublin arrangements for the return of asylum seekers to their first port of entry into the EU and relocation or burden-sharing options but supported practical co-operation. Finally, the UK said a comprehensive approach to migration had to address the issue of free movement. Public support could not be undermined by fraud and abuse of residence rights and associated benefits. The UK and Frontex figures showed sham marriage was on the rise, with evidence of links to organised crime. The balance between safeguarding rights and protecting citizens was vital. The UK said that this issue should be discussed at a future meeting to meet the Stockholm programme commitments in this area.

The Commission presented proposals to amend Regulation (EC) No 539/2001 which lists third country nationals who must possess visas to cross the external borders of the Schengen area and those exempt from this requirement. The Commission’s amendments also include the introduction of a suspension mechanism to allow for the temporary reintroduction of visa requirements in an emergency situation. It would apply to all current and future countries granted Schengen visa waiver (not just the western Balkans). The Commission stressed that it would be applied only in very exceptional cases and as a last resort. The UK does not participate.

Next the Council discussed elements of amending the Frontex regulation. The Commission underlined the importance of reaching agreement with the European Parliament by the June European Council. Frontex agreed on the need for urgency; the agency was at a critical point and could not continue without a revised regulation. There was general agreement on balancing member state responsibilities for border control with the obligation of others to provide resources to support them. The Commission stated that the respect of fundamental rights was of the highest political importance to both the European Parliament and the Commission; the Council would have to agree to the independent monitoring of return operations. Member states disagreed on another name for the proposed “European Border Guard System”. Discussions on the regulation will continue at COREPER ahead of a further trialogue with the European Parliament next week.

The presidency presented Council conclusions confirming that Bulgaria and Romania had successfully completed the Schengen evaluation process; the Council will discuss accession in September.

Finally the Commission presented the main findings from the first six months of monitoring the impact of granting visa liberalisation to the western Balkans. Even though the large majority of travellers are bona fide, there had been a high number of unfounded asylum applications in certain member states relating to minority populations (especially Roma). The Commission underlined that the western Balkan countries were starting to address these problems. A number of follow-up measures would now be necessary, including targeted information campaigns, increased use of border controls and entry bans, and targeted assistance to minority populations.

Following Mixed Committee, Interior Ministers held a lunchtime discussion on asylum where the Commission presented revised proposals to amend the procedures and reception conditions directives. The upcoming Polish presidency said all their efforts would be focused on agreeing at least a core of a common system by 2012. The UK reiterated that a common asylum system would not be in the UK’s national interest.

After lunch, the Council resumed with the Commission giving a short update on three legal migration directives: seasonal workers, intra-corporate transferees and the single permit for residence and work on which they hoped the electronic storage of data would allow a way forward. The UK is not participating in these measures.

Next the Council agreed conclusions on establishing priorities in the fight against organised crime over the next two years.

The Commission presented its air cargo security progress report on the implementation of the EU action plan of 30 November 2011. Commissioner Malmström regretted the negative vote at the Regulatory Committee (the preceding day) due to “difficulty” between transport and security officials in member states and called for greater co-operation. The UK expressed “extreme disappointment” at the outcome in Regulatory Committee, emphasised the threat remained significant and that the proposals voted on would significantly improve standards and called for Transport Ministers to reconsider this.

The presidency adopted the Council conclusions aligning internal and external counter-terrorism. The EU counter-terrorism co-ordinator (EU CTC) presented his discussion paper, highlighting the Arab spring, EU engagement in Pakistan and disappointment at the Regulatory Committee vote. The UK welcomed the EU CTC’s paper, specifically the importance of communication; the link between CT and drugs, the rule of law and organised crime; nuclear security, aviation security; political dialogue with the Arab world and progress on EU PNR. The UK agreed the threat remained strong and said that the EU must target efforts on areas of greatest risk (while complementing member states’ actions) and welcomed the EU Pakistan strategy. The UK asserted the importance of EU passenger name records, committed to supporting the communicators’ network, thanked the Presidency for the conclusions on aligning internal and external CT and highlighted the launch of the UK’s new Prevent strategy.

Under AOB there was a presentation of the project “Police Equal Performance" which is designed to enhance law enforcement capacity in cross-border activities in the western Balkans; a finalised proposal should be completed by the autumn. The upcoming Polish presidency gave a presentation on their priorities which included the common package for asylum; action to tackle synthetic drugs; the Eastern partnership, civil protection; and management of the external border.

The justice day commenced with the Council reaching a general approach on the directive on combating attacks against information systems. The UK welcomed the text, although noted reservations about the developing trend of providing in all such instruments for extra-territorial jurisdiction based on jurisdiction; this should not become the default approach.

Next, the Commission introduced its package of proposals on corruption, including a Commission decision on an anti-corruption reporting mechanism and a paper on EU accession to GRECO (the Council of Europe’s Group of States Against Corruption). The Commission thought Europe had to take this in hand and that corruption had a significant cross-border element, hence the importance of EU involvement in improving the patchy implementation of existing international standards. The Commission was mindful of avoiding additional burdens through the reporting mechanism.

The presidency secured a partial general approach on articles 1 to 18 and Y of the draft directive on the European Investigation Order (EIO), although acknowledged that aspects of the text might need to be revisited at a later stage. Many member states congratulated the presidency on the progress made over the last few months, although it was clear that substantial concessions had been made across the Council, with the grounds for refusing to execute an EIO being the most controversial issue. The UK could not support the current text, maintaining its parliamentary scrutiny reservation. The UK disagreed with the current exceptions to the dual criminality check which executing states could undertake in respect of the most sensitive and serious investigative measures. The drafting of the provision on ne bis in idem might also need to be revisited at a later stage. The incoming Polish presidency intends to continue the negotiations.

Next the Council adopted conclusions on the memory of crimes committed by the totalitarian regimes in Europe. Several member states intervened to recall the importance of action in this area and said they would prefer a legally binding instrument in this field.

The Council then agreed the proposed resolution establishing a road map for future action on protection of victims’ rights. The road map is a statement of political intent, and sets out the basis for future legislative measures. The UK agreed the road map.

The Commission also presented the recently published victims package, including a draft directive on rights in criminal proceedings, a regulation on protection measures in civil matters and a communication on strengthening victims’ rights in the EU. The UK noted the presentation and has yet to make its decision on the opt-in for the directive and regulation.

The presidency also introduced its political guidelines which aimed to set the direction for fundamental issues in the matter of the proposed regulation on succession and wills. The compromise was welcomed by the majority of member states. The UK was grateful for explicit commitment to revisit some issues at a later point to facilitate its possible participation.

Over lunch, Ministers discussed a presidency paper on the future of EU criminal policy.

After lunch the Council noted the proposal for a regulation on electronic publication of the Official Journal of the European Union, which would give proper recognition and legal certainty to the electronic version. As some member states (including the UK) could not lift their parliamentary scrutiny reservations, the text could not be forwarded to the European Parliament for consent, but agreement would enable quick progress to be made should reservations be lifted.

The Council agreed the revised road map on implementation of the European e-justice action plan and endorsed the report of the working party on e-law, without discussion.

The presidency gave an update on the state of play on negotiations on the accession agreement of the European Union to the European convention for the protection of human rights and fundamental freedoms. The Commission expressed the view that considerable progress has been made in the timeframe and they looked forward to continuing work with the Council of Europe.

Then the Commission introduced the recently published communication on protection of the financial interest of the Union through criminal law and administrative investigations.

The Commission presented its communication on protecting EU funds against fraud and other criminal conduct. Commissioner Reding highlighted the proposed reform of the internal structure of Eurojust, in order to provide OLAF (the EU’s anti-fraud office) with a judicial partner, and the importance that a European public prosecutor (EPP) could play in protecting public money across EU. The Government have made it clear that they will not participate in an EPP.

There was a presentation on the missing children Europe conference that took place on 25 and 26 May 2011. The presidency and the Commission recalled the successful conference to raise awareness of the 116000 hotline for missing children, although were disappointed that a substantial number of member states had not yet fully implemented the helpline, the deadline for which had now passed. The UK has implemented the hotline and it is fully operational.

Slovenia also updated delegations on the Brdo conference of the western Balkans, held on 15 April at Brdo pro Kranju, which focused on improving judicial co-operation in criminal matters, in particular in relation to organised crime and asset recovery.

Germany also informed the Council of its impending accession to the network for legislative co-operation, which would take place on 17 June at the next meeting of the network, in Budapest.

Finally, Poland presented its priorities for the presidency, which begins on 1 July 2011, and confirmed that they would focus on protection of citizens’ rights. They hoped to make progress on the regulation on succession and wills and the Brussels I regulation and prioritise the Commission’s package of proposals on victims. Poland also indicated that it would hold discussions on EU contract law at the informal JHA Council on 18 and 19 July.

Chiltern Railway (Penalty)

Thursday 16th June 2011 Written Statements

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I have decided to impose a penalty on Chiltern Railway of £350,000, having taken account of the outcome of a statutory consultation process.

The penalty relates to four breaches of the terms of the company’s franchise agreement which occurred before management of Chiltern transferred to Arriva UK trains in early 2011. These involved late delivery of two station improvements, and two timetable changes which were not properly authorised by the Department for Transport and which could, if un-rectified, have significantly reduced the value of the franchise to the Department. These breaches were in the context of the company’s poor performance in meeting a number of its detailed contractual obligations over a substantial period.

The Department imposes such penalties very rarely. When it does so, the aim is to encourage train operators to comply with their contractual obligations to the Department under franchise agreements. It should be emphasised that the penalty does not relate to Chiltern’s operational performance. As a number of consultees commented, the company is noted for its high standard of performance and customer satisfaction, and for the substantial investment it is making in improving services.

The penalty has been reduced from the proposed level of £500,000 in the light of the responses to the consultation, and in particular the welcome and clear assurances from Chiltern that it has stepped up its commitment and oversight at senior management level to ensure compliance with the terms of its franchise.

The receipts from the penalty will be retained by the Department and reinvested in transport. No decision has been made at this stage as to the final use of the funds.

Thameslink Rolling Stock

Thursday 16th June 2011 Written Statements

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The Department for Transport is today announcing the identity of the preferred bidder for the new fleet of trains required for the Thameslink programme. This represents a significant milestone in the delivery of this crucial rail upgrade project.

The £6 billion Thameslink programme includes major improvements to central London stations such as Blackfriars, Farringdon and London Bridge and will generate significant benefits for passengers. It will make travelling across London and the south-east faster, easier and more reliable and will reduce crowding on some of the busiest sections of London’s transport network. It will see the introduction of a new generation of electric commuter trains operating with metro-style frequency at up to 24 trains per hour through the central section during the morning and evening peaks.

This new fleet of trains comprises some 1,200 carriages. By the end of 2018, this will almost double the capacity of Thameslink’s core central London section in the peak periods. It is a major part of the Government’s commitment to introduce an additional 2,100 carriages on to the rail network by 2019, as announced in November of last year. The new Thameslink fleet is expected to release existing carriages for use elsewhere on the network, particularly as further routes are electrified, for example in the north-west of England and the Thames Valley commuter lines.

The competition to supply trains and maintenance services for the Thameslink programme was designed and launched under the previous Administration in 2008, in accordance with EU procurement procedures. In October 2009 the previous Government announced that the two remaining short-listed bidders were Siemens Plc with Cross London Trains (XLT) and Bombardier Transportation UK Ltd with VeloCity. Since then, a great deal of work has been undertaken by the Department with both bidders to refine proposals and to secure best and final bids.

Following the completion of the process, I can announce today that the preferred bidder for the supply of the new Thameslink trains will be Siemens Plc with Cross London Trains (XLT)—a special purpose company comprising of Siemens Project Ventures GmbH, Innisfree Ltd and 3i Infrastructure Plc.

The Siemens-led venture will deliver the first new train on to the network by the start of 2015, with the order complete by the middle of 2017. The new trains will offer a step change in passenger experience, with greater passenger carrying capacity, improved passenger communication and easier access for passengers with specific mobility needs. They will also deliver high-levels of reliability with the owner and manufacturer of the trains liable for financial penalties if the trains do not perform.

The choice of Siemens Plc with Cross London Trains (XLT) as preferred bidder represents the best value for money for taxpayers. Siemens is today confirming that this announcement will create up to 2,000 new jobs in their UK operations and across the UK supply chain in train component manufacturing, with a particular focus in the North-East of England, and in the construction of the depots and subsequent maintenance of the new fleet of trains.

These jobs are additional to those created by the Thameslink infrastructure works which are currently underway. At the peak of construction activity—during the reconstruction of London Bridge station from 2013 to 2018—we expect around 3,000 people to be directly employed on the Thameslink infrastructure works as a whole, with as many again employed in related jobs in the wider community. Taking account of other investments in rail announced by this Government, including Crossrail and the Inter City Express programme, the total peak construction employment rises to around 17,000 people.

In order to maintain momentum on the Thameslink programme, it is important that discussions with Siemens Plc and Cross London Trains move forward quickly to enable financial close to occur as soon as practicable. That is, of course, subject to the Government being satisfied that the proposal continues to offer value-for-money as the commercial discussions are concluded.

The alternative bidder, Bombardier Transportation UK Ltd with VeloCity—a special purpose company comprising Bombardier Transportation (Holdings) UK Ltd, RREEF Ltd, Serco Holdings Ltd, Amber Infrastructure Group Ltd and SMBC Leasing (UK) Ltd—also presented an attractive proposal and it is our intention to retain them as the reserve bidder.

This announcement of the preferred bidder for these new trains marks further progress in the delivery of the Thameslink programme, and reinforces the Government’s commitment to upgrading the capacity, quality and reliability of our transport infrastructure and ensuring high value for money for the taxpayer in delivering major rail projects.