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.