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Nick Smith (Blaenau Gwent) (Lab)
1. What assessment he has made of the potential effect on levels of voter registration of not creating a legal offence of failure to return an individual electoral registration request.
The Deputy Prime Minister (Mr Nick Clegg)
Before turning to the question, I am sure that the whole House will wish to join me in echoing the tribute paid by you, Mr Speaker, to Alan Keen, the Member for Feltham and Heston, for his 19 years of service as a Member of this House.
We need to establish some facts about what is and what is not changing in electoral registration. At present, it is not an offence not to register to vote, and that will not change. It is an offence not to provide information when requested to give it, and that will not change either. The civic duty to register to vote, which everybody recognises, remains, and that will not change. There are suggestions, including from the Select Committee on Political and Constitutional Reform, to create a new offence—one that does not currently exist—of failing to apply to register to vote. Of course the Government will listen to that, but I would warn against thinking that the only solution is criminalising people, because only 144 people were prosecuted in the last year under the present offences. There are a whole lot of other things that we need to get on with to ensure that we transfer people on to the individual electoral registration system over the coming years, which is exactly what we plan to do.
Nick Smith
A high level of voter registration is fundamental to our democracy. Credit companies are concerned that if the electoral register is reduced, it will be more difficult to carry out credit worthiness checks. Have the Government considered data sharing with the credit companies, which have excellent personal address information, to increase voter registration in our democracy?
The Deputy Prime Minister
I certainly agree with the principle that we should try to use data sets to compare the data that electoral registration officers hold with the data held by other people in easily accessible databases, and that is exactly what we are piloting at the moment. However, I do not think that I can do any better than to quote the Electoral Commission, which said:
“We would not want to see a move away from the current approach—where electoral registration, though not compulsory, is regarded as an important civic duty”.
That is precisely what we are doing.
Mr Philip Hollobone (Kettering) (Con)
If we are to have a strong and thriving democracy, should it not be a civic duty for everybody to be obliged to register to vote? Whether or not they actually vote, they should at least have a duty to register.
The Deputy Prime Minister
As I said earlier, it is a civic duty, and that will not change, and the offence of not providing information when requested to provide it will remain as well. I just think we need to pause and reflect on whether we think it necessary, on top of that, to create a new criminal offence of failing to apply to register to vote. Those who feel that it should be up to individual citizens whether or not they vote, should pause and reflect on whether it is necessary to criminalise people to get them on the register in the first place. I am not sure, bluntly, whether that is the right way forward.
Mr Wayne David (Caerphilly) (Lab)
The Deputy Prime Minister has quoted the Electoral Commission, but when the Government publish their Bill on individual electoral registration will he take on board its advice and publish details on the implementation of IER and the necessary secondary legislation at the same time?
The Deputy Prime Minister
Of course we are considering that very carefully, and of course we will wish to prove to this House that we have thought through all the necessary steps, such that each and every voter is properly approached, initially through individual contacts or approaches to households. People will canvass door-to-door to ensure that those who have moved or not yet registered have the opportunity to do so. As we debated last time at Deputy Prime Minister’s questions, the Electoral Commission had concerns about the opt-out system. That was its main concern, and I think we have provided satisfaction on it.
Mr Edward Leigh (Gainsborough) (Con)
2. What recent discussions he has had on changes to the law on succession to the throne; and if he will make a statement.
The Deputy Prime Minister (Mr Nick Clegg)
As my right hon. Friend the Prime Minister announced on 28 October, the 16 Commonwealth realms have agreed in principle that we should modernise the Act of Settlement with regard to the rules of royal succession. That means that if the Duke and Duchess of Cambridge were to have a first-born daughter, she would eventually become Queen of our country. In addition, we will remove the barrier to those who marry Catholics retaining their position in the line of succession, thus repealing an explicit and unique discrimination against the Roman Catholic religion.
Mr Leigh
After many years of campaigning, I thank the Government most warmly for finally grasping the nettle and removing this unique discrimination against Catholics. Does the Deputy Prime Minister agree, however, that this issue and the wider issues have now moved beyond statute? The fact is that the monarch gave up appointing Anglican bishops in the 18th century, and the Prime Minister has recently given up that power. In the future, can we ever prevent anyone from holding a post that they are born into, simply because of their religion or beliefs?
The Deputy Prime Minister
As I have explained, this is a significant step. I understand that there is a perfectly legitimate debate to be had about whether there should be other reforms, but all the Commonwealth realms must move as a convoy on this. We must all translate it into exactly the same legislation, which is what we will be working on in the months ahead. It is important to welcome this step, as my hon. Friend has done. It removes a unique discrimination against people of the Roman Catholic religion, and we must ensure that we implement it in full.
Mr Nigel Dodds (Belfast North) (DUP)
May I ask what discussions have taken place with the devolved Administrations on these changes, which affect all parts of the United Kingdom of Great Britain and Northern Ireland? If the Deputy Prime Minister has not already held any such discussions, what plans does he have to do so?
The Deputy Prime Minister
I spoke to the First Minister shortly before the announcement was made at the Commonwealth meeting in Perth. He is also reflecting on whether there should be other, wider changes, but he welcomed this as a significant step, in and of itself.
Lorely Burt (Solihull) (LD)
May I express my delight that the coalition Government have at last ensured fairness and equality in succession to the throne? Does the Deputy Prime Minister share my disappointment, however, that although I and others raised this matter many times under the previous Government, they put it in into the “too difficult” box for 13 years?
The Deputy Prime Minister
I certainly think that most reasonable people would say that, in this day and age, it cannot be right to have rules that discriminate on the basis of gender or religion. This is clearly a sensitive area, however. I have always been explicit in my own view, which I have expressed publicly on several occasions over the years, that we needed to look at these rules. I am delighted that we have now been able to mobilise a consensus among all the Commonwealth realms, so that we can now put this into practice.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
3. What discussions he has had with local authorities on (a) voter registration and (b) maximising participation in local and national elections.
The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
We have been having regular discussions with local authority registration officers and those involved in our electoral data-matching pilots and the smooth implementation of individual registration. Everyone in the House has a responsibility to encourage people to participate in elections. Mr Speaker, you will know that the Electoral Commission has a particular role to play in that work, which the Government find very valuable and which I am sure is supported by every Member of the House.
Mr Sheerman
Surely the Minister realises that a party that seems to believe in the big society and in localism would want participation to increase. Local authorities are deeply unhappy about the effect that the changes that are being mooted will have on local participation. Is he aware that the Deputy Prime Minister’s constituency—the wealthiest constituency in the north of England—could manage only a 73% turnout? What are we going to do about the others?
Mr Harper
The hon. Gentleman is confusing two things. Clearly, the Government want to ensure that the electoral register is complete and accurate. As regards the turnout for elections, however, it is the responsibility of all of us in the House to ensure that we provide people with compelling reasons to vote. For example, we are taking the necessary steps to clear up the mess left for us by the Labour party.
Sir Paul Beresford (Mole Valley) (Con)
In seeking to maximise participation in elections, what action is the Minister taking, and considering, to counter voter fraud and what I call the farming of votes?
Emily Thornberry (Islington South and Finsbury) (Lab)
How many allegations of fraud were there last year?
Mr Harper
That measure was supported by all three parties in the House, despite what the hon. Lady might say from a sedentary position. The previous Government legislated to introduce individual registration in order to move away from the household-based system. In this way, we will have a register that is more complete and, importantly, more accurate.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
4. What recent representations he has received on progress towards the objectives of the coalition agreement.
The Deputy Prime Minister (Mr Nick Clegg)
The coalition agreement underpins all the work of the Government and is the subject of many ongoing representations to Ministers.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Does my right hon. Friend agree that creating jobs in the economy is a vital objective of the coalition and that the private sector is indeed creating those jobs? Do the Government believe that the present system of tribunals to adjudicate on unfair dismissal is encouraging firms to take on new people or is it discouraging job creation in the economy?
The Deputy Prime Minister
As my hon. Friend will know, we are looking at all the measures that we think hinder growth and job creation. We have already announced a significant change in the tribunal system such that the qualifying period is extended from one year to two years. We have also announced that we will explore the establishment of what are called “protected conversations” so that employers and employees can talk, as the name implies, in a protected way about the performance of those employees, which employers have demanded for a long time. They have welcomed it because they think it will help them create more jobs.
Lindsay Roy (Glenrothes) (Lab)
The Deputy Prime Minister is appointing seven new special advisers. Some of his Conservative colleagues have described them as “spies”. Will the right hon. Gentleman tell us how those appointments match the coalition agreement’s proposal to limit the number of special advisers?
The Deputy Prime Minister
As with any new Government, both parties in the coalition Government—we have not had a coalition Government in a long time—have had to adjust the way in which they are supported in government to make sure that we deliver in full on the coalition agreement to which I referred.
Kevin Brennan (Cardiff West) (Lab)
5. What assessment he has made of the effect of introducing individual electoral registration on the completeness of the electoral register.
The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
The hon. Gentleman will know from listening to previous answers that we are taking a number of steps to ensure the completeness of the register, learning from the experience of the introduction of individual registration in Northern Ireland—including, for example, the carry forward of electors for a year—and looking at the data matching pilots to see whether they will be successful.
Kevin Brennan
Individual voter registration is worth pursuing only if, as well as making the register more accurate, it makes it more complete. I warned the Minister about this more than a year ago. Does he not realise that by combining this measure with a voter suppression policy such as not requiring people to collaborate with the electoral register, he is basically participating in the Florida-isation of UK electoral registers?
Mr Harper
That was not up to the hon. Gentleman’s usual standard—no, on reflection, I am afraid that it was. I made it clear from this Dispatch Box when I announced the policy that we are just as focused on completeness as on accuracy. As the Deputy Prime Minister set out, we are listening carefully to the responses to our consultation and to what was said by the Political and Constitutional Reform Committee, and we will bring forward our proposals in due course.
Dan Rogerson (North Cornwall) (LD)
The Minister will be aware that councils such as Cornwall are taking action to deal with multiple property owners being on the register in several places. I welcome the Government’s change of view on the 10% discount on council tax, but as that is one way of encouraging people to register their ownership of a second home, making it easier to cross-match data, has the Minister considered other ways in which councils could fulfil their duty of ensuring that the register is accurate?
Mr Harper
I have not considered any proposals arising from our council tax moves. The hon. Gentleman and I have had conversations about this matter, and I know that his electoral registration office has been making sure that the law is applied fairly but firmly in registering people who reside in Cornwall, thus ensuring that it is indeed more accurate as well as more complete.
Julie Elliott (Sunderland Central) (Lab)
6. What assessment he has made of the potential effect on levels of voter registration of not creating a legal offence of failure to return an individual electoral registration request.
The Deputy Prime Minister (Mr Nick Clegg)
As I have explained, we believe that individual electoral registration is the right thing to do. Her party does as well, as it was in her party’s manifesto. Preparations were made under the previous Government to introduce it. We brought it forward slightly and, as the Minister and I have explained, we are taking meticulous steps to ensure that it does not lead to a decline in overall rates of registration.
Julie Elliott
The Electoral Commissioner says that with these changes more than 10 million people will fall off the register. How will the Deputy Prime Minister protect people in urban areas such as mine of Sunderland Central from disfranchisement?
The Deputy Prime Minister
The hon. Lady must be careful not to misrepresent what the Electoral Commissioner said. It did not say that this system will lead to a drop-off on that scale. [Interruption.] No, the Electoral Commissioner clarified the point in subsequent publications. The Electoral Commission said:
“We would not want to see a move away from the current approach—where electoral registration though not compulsory is regarded as an important civic duty”.
We are maintaining that civic duty; we are maintaining the offence of failing to provide that information when asked for it; and we are seeking to address the Electoral Commission’s specific concern about the opt-out system.
Karl MᶜCartney (Lincoln) (Con)
7. What plans he has to reform the funding of political parties.
The Deputy Prime Minister (Mr Nick Clegg)
I consider reform of party funding to be very important in and of itself, and we made a clear commitment to it in the coalition agreement. I look forward to the contribution of the Committee on Standards in Public Life to the debate when it publishes its report shortly. It is immensely important for us to clear this up, because it has affected all political parties negatively, but it would not be right to ask our hard-pressed taxpayers to pay more to political parties at a time when they are having to deal with so many cuts and savings elsewhere. I should like to proceed with as much cross-party consensus as possible, and I am keen to work towards that aim, but I repeat that no one should doubt the determination of this coalition Government to deliver reform in this area.
Karl MᶜCartney
I thank the right hon. Gentleman for that interesting answer. Does he agree that it is time for the Labour party to be honest about the privileged influence that some of its larger donors have had on legislation that is debated in the House, and will the Liberal Democrats join the Conservatives—
Mr Speaker
Order. The hon. Gentleman must resume his seat.
Questions to Ministers should be about the responsibility of office-holders for public policies. It is no good the hon. Gentleman nodding at me; his question was out of order, and it is about time that he learned that fact.
Sadiq Khan (Tooting) (Lab)
The Deputy Prime Minister has previously endorsed the long-held convention that issues of party funding should—as he has just said—be resolved by cross-party agreement when that is possible. He has told us that the Committee on Standards in Public Life will report shortly: in fact, it will report next week. Is he concerned about the objections from the chairman of the Conservative party to the £10,000 cap proposed in the draft report, and is he worried about the possibility of a situation similar to that which arose in 2007 when the Conservatives walked away from the opportunity to secure a cross-party agreement? [Interruption.]
Mr Speaker
Order. It would help if there were not so much noise from Whips on the Treasury Bench, so that the Chair could hear what was being said. Questions must be orderly. The Deputy Prime Minister will answer that which is orderly, and not that which is not.
The Deputy Prime Minister
I wonder whether the right hon. Gentleman’s question was written by the GMB, because I hear that Opposition Front Benchers have got into the habit of asking their union paymasters what questions they should ask and what amendments they should table. If that happened in any other political party, Labour Members would say that it was an absolute scandal. We know that the trade unions can speak for themselves; it is time that we knew whether the Labour party can think for itself.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Deputy Prime Minister (Mr Nick Clegg)
I am sorry, Mr Speaker. I enjoyed the last answer so much that I temporarily forgot where I was.
As Deputy Prime Minister, I support the Prime Minister on a range of Government policies and initiatives, and, within Government, I take special responsibility for the Government’s programme of political and constitutional reform.
Michael Connarty
I am pleased to note that the Deputy Prime Minister remembers what his Department actually does.
One of the main topics of interest to people in my constituency is the commission that will consider the West Lothian question. Can the Deputy Prime Minister give us a firm timetable for consultation, and can he name all the parties that will be consulted, including the Labour party, the new Labour party leadership in Scotland and the trade unions, which are a fundamental part of the fabric of the Scottish people?
The Deputy Prime Minister
The Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), will give more details about the commission in a statement before Christmas.
David Morris (Morecambe and Lunesdale) (Con)
T3. Will my right hon. Friend elaborate on the comments made by my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) about industrial tribunals? If there is to be any reform, will he give us a timetable, and may I respectfully ask whether I may help out, given my experience in this regard?
The Deputy Prime Minister
I know that my right hon. Friend the Secretary of State for Business, Innovation and Skills is keen to proceed with the reforms that I mentioned earlier: the change in the timetable from one year to two, and the idea of protected conversations. I am sure that he would be delighted to benefit from my hon. Friend’s expertise.
Yvonne Fovargue (Makerfield) (Lab)
T2. Does the Deputy Prime Minister support the many charities and advice agencies—including most recently Scope—his party conference resolution and his Justice spokesman by opposing the complete removal of welfare benefits and the majority of social welfare laws from the scope of legal aid, even when the problems involved are interrelated and complex?
The Deputy Prime Minister
If we consider the recent massive expansion in legal aid and the budget for it, and the types of dispute brought within its scope, I think any reasonable person would agree that it is worth trying to put the budget on a more sustainable footing and that where there are alternatives to court—such as tribunals, mediation and citizens advice bureaux—they should be explored first, rather than immediately decanting people and disputes into the court system.
Tim Farron (Westmorland and Lonsdale) (LD)
T4. In Cumbria we are very proud of having close business and cultural ties with Scotland, but does my right hon. Friend share my concern that business confidence on both sides of the border is being badly affected by the uncertainty caused by the Scottish Government’s obsession with separatism?
The Deputy Prime Minister
I strongly agree with my hon. Friend. At a time of huge economic uncertainties in Europe and the world that are, understandably, creating anxiety among many families in this country, the last thing families in Scotland need is this constant guessing game—the First Minister’s cat-and-mouse game on the future of the Scottish people. What people want is certainty, because certainty is what delivers prosperity, jobs and growth.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
May I thank the Deputy Prime Minister for his tribute to our colleague, Alan Keen? He was proud to represent a London constituency, but he never lost his fierce, passionate commitment to social justice, which he brought with him from his roots in the north. We will miss him greatly, and our sympathies are extended to Ann and his family.
May I ask the Deputy Prime Minister about the shocking increase in the number of young people out of work for more than six months? In London, the increase has been 93%, in Warrington there has been a 200% increase since May, and the situation is even worse in many places. Because of this Government’s actions, the economy is too weak, and the Deputy Prime Minister’s programmes to help the young unemployed are too small. Will he admit that he urgently needs to take further action to help the young unemployed?
The Deputy Prime Minister
I accept that we need to take more action; it would be a real dereliction of duty if we did not do more to try to make sure that young people are given a real pathway into training, further and higher education or the labour market. As the right hon. and learned Lady will know, youth unemployment has increased pretty remorselessly since 2004, so it increased during the second part of the Labour Government’s time in office. Indeed, it increased by about 40% under Labour. There are some very big structural problems in the labour market that we need to address. I am leading some work on that in government, and we hope to make announcements on it very shortly, before the autumn statement. The right hon. and learned Lady was right to raise this subject.
Ms Harman
But long-term youth unemployment was going down, and, before the recession, was at its lowest level. As rising unemployment makes it harder to pay down the deficit, why have the Government cut work programmes by a third, and why are they closing jobcentres, including in my constituency of Camberwell? We expect it from the Tories—youth unemployment is a price worth paying—but how on earth can the Liberal Democrats be prepared to go along with this?
The Deputy Prime Minister
The right hon. and learned Lady should not be quite so pleased with herself. Under Labour the number of NEETs—young people not in education, employment or training—increased by 50%. Is that a record she is proud of? I think it is a good thing that we have delivered more apprenticeships than her Government ever did. We will deliver a quarter of a million more apprenticeships than were planned under Labour, and we are also creating a new network of university technical colleges to give young people the skills to get into work and rolling out a new Work programme aimed at supporting young people. As I acknowledged earlier, yes there is more work to do, and we must do more to support young people, particularly those aged about 18 or 19 who are making the difficult transition from full-time education to trying to find their feet on the first rung of the jobs ladder. We will do more—we need to do more—but the right hon. and learned Lady should not be quite so complacent about her Government’s record.
Karl MᶜCartney (Lincoln) (Con)
T6. I am concerned about the possible role that the EU foreign service had in recently deposing the elected Heads of two sovereign Governments. Can the Deputy Prime Minister confirm that he has sought assurances that EU officials based in this country do not abuse their positions here?
The Deputy Prime Minister
I do not think that there is any remote possibility of a coup being engineered from the European Commission office just around the corner. The whole world is looking at what is happening in Italy and Greece with growing alarm, and only Labour Members take it as a role model for their own behaviour. There is a big dividing line in British politics now between those on the Government Benches who believe that Governments should be in charge of their own economic destiny and those on the Opposition Benches who think that bond traders should be in charge of the economy.
Pamela Nash (Airdrie and Shotts) (Lab)
T5. We are just two weeks away from world AIDS day, in this the 30th year of the HIV epidemic. We now have scientific evidence to show that new HIV treatments are 96% effective at preventing the spread of HIV. Does the Deputy Prime Minister agree that the Prime Minister should support the United States Secretary of State Hillary Clinton and make the HIV generation a priority for the British Government in order to maintain our commitments to the millennium development goals?
The Deputy Prime Minister
As the hon. Lady may know, that is already one of the key priorities in our aid budget and programme. As she will also know, that budget is increasing substantially, even though we have such huge pressures on the public purse elsewhere, in order to meet the UN target of 0.7%. I know that a great deal of discussion is going on with the American Administration and others who are trying to work collectively. I am more than happy to look into the details of her question if she feels that there is more we should do on this front.
Richard Graham (Gloucester) (Con)
T7. I strongly support the principle of fairness in constituency size, which is behind the Parliamentary Voting System and Constituencies Act 2011, but does the Deputy Prime Minister recognise that the Boundary Commission’s proposal to relocate Gloucester’s entire city centre into the Forest of Dean constituency seriously damages the link between the Member of Parliament and the city, and the accountability of the MP for Gloucester’s regeneration? Does he agree that the Boundary Commission could split a ward? Will he confirm that that is in order?
Mr Speaker
Order. We have got the thrust of it. This is topical, so it has to be brief.
The Deputy Prime Minister
I feel in a slightly invidious position having to answer that question while the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper) is sitting next to me, because I know that he has an adjacent constituency. As my hon. Friend the Member for Gloucester (Richard Graham) knows, this is simply not a matter for Ministers. We have legislated—[Interruption.] I know that the idea of an independent Boundary Commission is alien to the Labour party, but that is what is going to happen.
Kevin Brennan (Cardiff West) (Lab)
T8. When a warning about the penalty was included on a letter to constituents of my hon. Friend the Member for Vale of Clwyd (Chris Ruane) in Rhyl West, the poorest ward in Wales, voter registration in that ward increased by 40%. If the Deputy Prime Minister really is a democrat, will he consider that startling statistic and make sure that there is not only a civic duty but a requirement for people to register to vote?
The Deputy Prime Minister
Only the hon. Gentleman thinks that you are a democrat by criminalising lots of people. Only the Labour party thinks that the solution to everything is to put more crimes on to the statute book. As I explained to him, the civic duty remains. It is not an offence at the moment not to register; it is an offence not to provide information where requested to do so.
The Deputy Prime Minister
Will he just listen? That offence will remain on the statute book.
Mr Speaker
Order. The House must come to order. Members must not keep shouting at the Deputy Prime Minister simply because they do not like what he is saying. It is called democratic exchange, and the hon. Member for Cardiff West (Kevin Brennan) should be used to it.
Andrew George (St Ives) (LD)
T10. The Deputy Prime Minister will be well aware that Cornwall is a distinctive region within the UK, with its own unique language and history, and that it has modest ambitions for devolution, not to cut itself off, but to cut itself into the celebration of diversity. Will he meet a delegation from Cornwall so that we can explore how Cornwall can help the Government to make better and more efficient decisions there?
The Deputy Prime Minister
I would be more than happy to meet a delegation such as my hon. Friend suggests. As he knows, this Government are pursuing a radical agenda of devolution, not just to the devolved Administrations within the UK, but to the regions and communities within England.
Lilian Greenwood (Nottingham South) (Lab)
T9. As a result of his Government’s economic policies, youth unemployment in Nottingham is back up to the level it reached the last time the Tories were in power. The Derbyshire and Nottinghamshire chamber of commerce is calling on Ministers to reprioritise their spending plans to promote growth, investment and exports. The Deputy Prime Minister would not listen to our concerns on police cuts. Is he going to listen to our concerns on growth and jobs?
The Deputy Prime Minister
As I have said, I accept that we need to do more. I do not believe that the generation born in the boom should suffer most in the bust, but I remind the hon. Lady that this is quite a complex issue. Youth unemployment has been increasing steadily since 2004; it increased by 40% during the Labour Government’s time in office. I am leading some work on this in Government and I hope to make an announcement soon, particularly in relation to youngsters who are trying to make the transition from education into work. If she has any ideas on this I am very keen to listen to her.
Mr Philip Hollobone (Kettering) (Con)
T11. May I relay to the Deputy Prime Minister the frustration, concern and anger of my constituents in Kettering that he is acting against the national interests by using his position to block the repatriation of powers from Europe and by preventing the scrapping of the Human Rights Act?
The Deputy Prime Minister
No Front Bencher in the coalition is talking about the unilateral repatriation of powers from the European Union. Why? Because it simply is not possible—it does not work like that. We have to seek agreement with 26 other countries to get that repatriation. The idea that one could simply get on to the Eurostar, go over to Brussels and come back with a bag load of powers simply is not feasible. Yes, let us examine the balance of powers, as we committed to do in the coalition agreement. I am a pro-European, but I believe in reforming the European Union. I do not believe the status quo is right, but I also believe that we need to act smart and move sensibly.
Lisa Nandy (Wigan) (Lab)
Last year, the Deputy Prime Minister, speaking in a professional capacity, set out how he would end child detention by May. It is now November. Does he still believe this practice is immoral and does he still plan to keep his promise? If so, will he tell the House when?
The Deputy Prime Minister
Compared with the previous Government’s record of thousands of young people being detained—yes, immorally—behind bars when they were entirely innocent, the new arrangements are a complete, humane, liberal revolution, of which I am very proud indeed.
Sheryll Murray (South East Cornwall) (Con)
T13. Currently, the new electoral register is published on 1 December each year. Will there be any change to this system in 2012 to allow the most up-to-date information possible to be available for the police commissioner elections due to be held on 15 November?
The Deputy Prime Minister
The plans for 2012 are just as they are for this year; there will be no change at all.
Chris Ruane (Vale of Clwyd) (Lab)
My hon. Friend the Member for Cardiff West (Kevin Brennan) mentioned the issue of Rhyl West. I put down a parliamentary question asking the Minister to look at the specifics of that case. To go from 2,500 to 3,500 registered voters in one year in the poorest ward in Wales, which has 900 houses in multiple occupation, is a fantastic achievement. If the Minister is serious about registration, he needs to look at best practice, so will he look at the issue of Rhyl West?
The Deputy Prime Minister
The Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), and I are more than happy to look at that example. The Select Committee on Political and Constitutional Reform has recommended that a new offence should be created and of course we will look at that—it is always right to look at suggestions from such a distinguished Committee. Under the current offences, only 144 people were prosecuted out of the millions of people on the electoral register last year. That suggests that some of the other things we are doing, such as data matching and making sure that everybody is approached in 2014 to get them on to the register, might be a higher priority than once again creating more new criminal offences on the statute book.
Stephen Williams (Bristol West) (LD)
Does my right hon. Friend agree that he has the opportunity in this Parliament to continue the work that was started a century ago by his predecessor, Asquith, and reform the House of Lords? Does he agree that the absolute bare minimum of progress would be the removal of the remaining hereditary peers and the Church of England bishops?
The Deputy Prime Minister
As my hon. Friend knows, our proposals are now subject to extensive scrutiny in a Committee that I hope will report in the early months of next year. I have always believed, as do many hon. Members on both sides of the House, that those who make the laws of the land should in some way or another be accountable to those who have to obey the laws of the land. That founding democratic principle, which is respected in legislatures all around the democratic world, is one that I should like to see installed in the other place as well.
Mr Dennis Skinner (Bolsover) (Lab)
Now that the Deputy Prime Minister has displayed a high state of excitement about party political donations, will he do the decent thing as leader of the Liberal Democrats and instruct them to surrender their ill-gotten gains of more than £2 million from that jailbird Michael Brown?
The Deputy Prime Minister
As the hon. Gentleman knows, that matter was independently examined; the Liberal Democrat party was entirely within its rights, and it was entirely reasonable, to accept the money at the time, even though, of course, we would not have done so if we had known then what we subsequently knew. Given that his colleagues on the Front Bench are tabling amendments and deciding how to vote according to what their paymasters in the trade unions say, we need to know whether he and other Labour MPs are voting for what they think is right, or what they think is right for the trade unions.
Mr Speaker
I am sure that the hon. Member for Bolsover (Mr Skinner) is duly flattered, but it is no part of his responsibility in the House to answer questions, or at least not at this mid-point in his parliamentary career.
Richard Drax (South Dorset) (Con)
Will the Deputy Prime Minister tell the House when he intends to join the headlong rush to join the euro?
The Deputy Prime Minister
I do not think that there is the remotest possibility that this country will join the euro while I am in government.
Mark Durkan (Foyle) (SDLP)
There are concerns that the net effect of the Government’s changes will be under-registration in England and Wales. Has the Deputy Prime Minister appraised the impact of that on the distribution of seats to the territorial boundary commissions under the Sainte-Laguë formula?
The Deputy Prime Minister
As the hon. Gentleman knows, I do not agree that moving to individual elector registration in the way we are—in the way advocated by the previous Government, too—will necessarily lead to the outcome he suggests. That is why we are putting so much time into data matching, making sure that there is a period of grace so that people can re-register on the other side of an election, and ensuring that people go from home to home to make sure that everyone has the opportunity to be individually registered.
Miss Anne McIntosh (Thirsk and Malton) (Con)
The Deputy Prime Minister told the House that he is responsible for constitutional and political reform. If the ambitious programme that he has set himself proves too ambitious, will he allow a little bit of slippage in reform of the Lords and the equalisation of boundaries?
The Deputy Prime Minister
It is important to be clear about our ambitions, and we have been, right from the outset, when the coalition Government were formed. We have five years to deliver the changes. Yes, they are major changes, but as we saw with the reforms to the Act of Settlement, even the most intractable issues that people believe are not susceptible to reform can be reformed if there is sufficient debate, and sufficient consensus in all parts of the House that reform is desirable. Most people believe, for instance, that reform of the House of Lords is long overdue; it is 100 years since it was first debated.
Paul Flynn (Newport West) (Lab)
1. What discussions he has had with the Secretary of State for the Home Department on the Baker report on extradition arrangements.
Graeme Morrice (Livingston) (Lab)
10. What discussions he has had with the Secretary of State for the Home Department on the Baker report on extradition arrangements.
The Attorney-General (Mr Dominic Grieve)
I have not had any such discussions with my right hon. Friend the Home Secretary.
Paul Flynn
Does the Attorney-General recall saying, in 2009, when in opposition,
“Our extradition laws are a mess. They’re one-sided. A Conservative government will re-write them”?
Will they? Or is this another example of this Government’s signature policy of promising miracles in opposition and delivering nothing in government?
The Attorney-General
The first thing the coalition Government decided to do on taking office was ask Lord Justice Scott Baker to preside over a report; of course, he was helped by others in that. We have now had that report. I will consider the recommendations that are specific to the Law Officers in conjunction with the Director of Public Prosecutions and the director of the Serious Fraud Office. That involves discussions with devolved jurisdictions. Of course, my right hon. Friend the Home Secretary will consult on the recommendations that touch on her responsibilities, together with other members of the Government who can provide some input.
Graeme Morrice
What consideration has the Attorney-General given to implementing a forum bar to give judges more discretion in deciding whether it is in the interests of justice for cases to be tried in the UK, such as the case involving Gary McKinnon, or where the offence was committed in the UK and it is difficult for the defence to bring witnesses and evidence to a foreign jurisdiction?
The Attorney-General
The hon. Gentleman makes an important point, which is touched on in Lord Justice Scott Baker’s report, and will have to be taken into account in the Government response. He will be aware that Lord Justice Scott Baker’s proposals are guidelines, rather than an implementation of the forum bar. That is something that the Government will have to consider.
Sir Menzies Campbell (North East Fife) (LD)
I have the misfortune to disagree with Lord Justice Scott Baker’s conclusion in relation to the standard of proof. May we have an assurance from the Attorney-General that in determining these matters proper account will be taken of the principle of reciprocity, and that it will be ensured that British citizens are not at a constitutional disadvantage in comparison with their American counterparts?
The Attorney-General
Mr right hon. and learned Friend makes another important point. Again, that is one reason why we asked for that matter to be looked into by Lord Justice Scott Baker and those who served with him. We are going to have to take account of his proposals, and I hope very much that my right hon. and learned Friend will make a contribution to that discussion.
Stephen Phillips (Sleaford and North Hykeham) (Con)
Will my right hon. and learned Friend give the House the reaction, if any, from international counter-parties to the Baker report?
The Attorney-General
I am afraid that I cannot comment on the reaction from international counterparts. There is interest in the matter—indeed, I have been made aware of that by a number of sources, particularly in respect of people connected with the United States. Outside that, however, I cannot comment formally, and I think it is likely that any formal response would go to my right hon. Friend the Home Secretary.
Yvonne Fovargue (Makerfield) (Lab)
3. What recent discussions he has had with the director of the Serious Fraud Office on its procedures for investigating cases of bribery and corruption.
Mr Gerry Sutcliffe (Bradford South) (Lab)
4. What recent discussions he has had with the Director of the Serious Fraud Office on its procedures for investigating cases of bribery and corruption.
The Attorney-General (Mr Dominic Grieve)
I hold monthly meetings with the director of the Serious Fraud Office to discuss all aspects of the SFO’s work, including what it is doing to counter bribery and corruption. The Bribery Act 2010 came into force on 1 July 2011, and the SFO was well prepared for that. The SFO website provides detailed information, including joint prosecution guidance from the director of the SFO and the Director of Public Prosecutions.
Yvonne Fovargue
No one has faced prosecution as a result of the global financial collapse. Does the Attorney-General think that that is because there was no wrongdoing, because the SFO is not doing its job, or because we need a change in the law?
The Attorney-General
I have no evidence that there is any need for a change in the law. As and when matters are brought to the attention of the police or the SFO that require investigation and that may be linked to the global collapse, they will be investigated and inquired into. She will appreciate that I am not in a position to comment on individual cases in the House for obvious reasons.
Mr Sutcliffe
Is the Attorney-General not a little complacent, because the Bribery Act is a new measure that came into force in 2011? There is concern around the world about the way in which global markets have operated, so the SFO should at least have a look at changes that might need to be made to the law.
The Attorney-General
The law on bribery and corruption has been looked at extensively by the House, and new legislation has been enacted. I believe—and I think that this view is shared across the House—that the legislation is fit for purpose. It has been applied in one case domestically, and no doubt it will be applied in cases concerning global finance, too. As I said in response to the previous question, unfortunately, I cannot comment on individual cases, but I have seen nothing in my routine business meetings with the Serious Fraud Office to make me think that this is an area—I understand that it is of concern to the House—that has in some way been overlooked.
Sir Peter Tapsell (Louth and Horncastle) (Con)
Following the two questions that I put to the Prime Minister on this subject, will the Attorney-General liaise with the Chancellor of the Exchequer to widen the scope of liability for criminal action against financial institutions, as in the recently passed Dodd-Frank Act in the United States, so that the concept of the presiding mind can be introduced into British law, thus greatly facilitating the prosecution of top bankers who in future behave in a disgraceful way?
The Attorney-General
I thank my right hon. Friend for that. Section 7 of the Bribery Act 2010 already goes some way in the direction of what he suggests. In addition to that, I know that the Law Commission is carrying out research into this area, and I look forward to seeing its conclusions on what changes to the law might be required.
Emily Thornberry (Islington South and Finsbury) (Lab)
The Attorney-General will recall that he once said about a case of bribery in Saudi Arabia that decisions balancing the national interest and the need to prosecute should lie with the director of the Serious Fraud Office alone. Indeed, as he has already said, there was cross-party support for Labour’s Bribery Act which enshrined that in law. If this is still his view, will he be instructing the Serious Fraud Office to proceed with a full investigation into the allegations by whistleblower Lieutenant Colonel Foxley of £11.5 million in kickbacks paid to senior Saudi officials? When does he expect to make a decision on the case of GPT? If he decides to stop the case, will he come to the House and explain why?
The Attorney-General
May I make two points to the hon. Lady? First, a decision on whether to investigate any matter—I am afraid I cannot comment on an individual case—is a matter for the director of the Serious Fraud Office and the Serious Fraud Office itself. Secondly, if, in the course of such an investigation, issues concerning the public interest were to come to light that required my being consulted and any decision being made, I can assure the hon. Lady that I would come to inform the House of any decision that I took, particularly if any such decision at any time were in any way to override a decision of the director of the Serious Fraud Office, or if there was a public interest matter which led to the case coming to a conclusion other than that which one might have expected.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
5. What discussions he has had with the Crown Prosecution Service on progress in issuing gang injunctions.
The Solicitor-General (Mr Edward Garnier)
None, is the short answer. The Crown Prosecution Service does not have a formal role in applying for or issuing gang injunctions. Those are a civil law tool applied for by the police and local authorities and ordered by the court. A failure to comply with the terms of an injunction is not of itself a criminal offence. That said, the CPS has an interest with other agencies in tackling illegal gang activity. The hon. Lady has been at the forefront in her own constituency and in the House in helping to deal with gangs, and I commend her for that.
Meg Hillier
I am pleased that in a letter to me the Attorney-General indicated that he would be willing to look at having specialist prosecutors from the CPS to deal with gang injunctions, and I hope that we may see that happen in my own borough, Hackney. What progress has been made on the transfer between courts of ASBO applications so that they can be dealt with alongside other crimes, where that is appropriate? We have seen some problems with the reorganisation of courts in our area, which may be contributing to the delay.
The Solicitor-General
From her knowledge of the subject, the hon. Lady will appreciate that there is a difference between ASBOs, which are a post-conviction instrument, and injunctions, which are anticipatory. I am not up to speed on the organisation of courts, which is a matter for HM Courts Service and the Ministry of Justice. None the less, the hon. Lady is right to point out that there is a need for co-ordination. The borough Crown prosecutor in her own constituency is now the central reporting point as far as she is concerned. I hope more progress can be made, and I am happy to discuss this further with her.
Tom Brake (Carshalton and Wallington) (LD)
Does the Solicitor-General agree that if gang injunctions are to be effective diversionary schemes and mentors must be available? What progress is being made on that front?
The Solicitor-General
As my right hon. Friend knows, the Home Secretary and the Secretary of State for Work and Pensions recently issued their report on the subject. Of course it requires a great deal of co-operation, diversion and the input of the criminal justice agencies, but we are doing our very best to ensure that this is dealt with.
George Hollingbery (Meon Valley) (Con)
6. What advice he has provided to ministerial colleagues on reform of the European Court of Human Rights ahead of the UK’s chairmanship of the Council of Europe.
The Attorney-General (Mr Dominic Grieve)
As the Minister responsible for conduct of litigation before the European Court of Human Rights, I have been involved in the discussions on the United Kingdom’s priorities for the chairmanship, which the Minister for Europe announced to the House on 26 October.
George Hollingbery
But does my right hon. and learned Friend agree that, despite the adoption of protocol 14, with 150,000 cases still outstanding at the ECHR, equating to a backlog lasting 40 years, further reform of the system of application is clearly needed, particularly with regard to the right of individual petition?
The Attorney-General
My hon. Friend is absolutely right that the backlog is now nearly 160,000 cases. It results in long delays for applicants, including many victims of serious violations, and effectively threatens to deny them access to justice. The Government are determined to try during our chairmanship to secure agreement to a set of efficiency measures that will help the Court deal with the backlog. In particular, we want to develop practical measures to strengthen subsidiarity. Primary responsibility for implementing the convention falls on national authorities in the Council of Europe’s member states, and the Court’s role should properly be to act as a safeguard for cases where a national authority fails to implement the convention properly. I think that that can be done without removing the right of individual petition, which is an important safeguard in countries that are members of the Council but where the human rights record is not good.
Jeremy Corbyn (Islington North) (Lab)
In view of the Attorney-General’s last answer, what pressure will Britain bring to bear during its chairmanship on eastern European countries where the treatment of Travellers, Gypsies and Roma people is so appalling and where many of them are unable to access local courts, never mind national ones, so that what happens in the European Court of Human Rights is completely beyond them? Does he not accept the need to pressurise those national Governments who are signatories to the European convention?
The Attorney-General
The hon. Gentleman is absolutely right that all 47 members of the Council of Europe need to observe the terms of the convention. If there were no violations of the convention, no successful cases would be brought before the Court. There are mechanisms—the Committee of Ministers is one—for enforcing judgments that have been handed down and preventing clone cases from coming back again and again and cluttering up the Court. Individual countries can try to take a lead, as I am sure the United Kingdom can, and of course the Human Rights Commissioner is central in trying to improve standards. It is worth bearing it in mind that, despite the hiccups and difficulties, standards are improving overall, which is a measure of the extent to which the convention has been a great success.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Does the Attorney-General recognise that, in seeking support from member states for necessary reforms of the Court, it would be helpful to make it clear that Britain is seeking not to abandon or leave the European convention, but to have a Court that can effectively safeguard against serious breaches of human rights?
The Attorney-General
I entirely agree with my right hon. Friend. That point is made repeatedly by Ministers. I represented the UK two weeks ago in the European Court of Human Rights on the intervention in the case of Skoppola. I took the opportunity to get that message across very clearly in subsequent meetings with a number of people connected with the Court and the Council of Europe.
Toby Perkins (Chesterfield) (Lab)
7. What steps he has taken to ensure that reductions in funding for the Crown Prosecution Service do not adversely affect front-line services.
Julie Hilling (Bolton West) (Lab)
9. What steps he has taken to ensure that reductions in funding for the Crown Prosecution Service do not adversely affect front-line services.
The Solicitor-General (Mr Edward Garnier)
The two key priorities of the Crown Prosecution Service over the spending review period are quality and efficiency. The CPS strategy is to protect front-line delivery. Savings were sought in the first instance from back-office functions. Savings made from the front line will be achieved through greater productivity and by maximising the gains from improved criminal justice system efficiency and better use of technology.
Toby Perkins
Under the POD system operating in the Crown courts, only the most serious cases are now allocated to an individual dedicated prosecutor. Can the Solicitor-General tell the House how many cases under that system have been dropped or delayed because evidence was not prepared in time?
The Solicitor-General
No, I cannot, because the CPS deals with hundreds of thousands of cases every year. The POD system is actually in the CPS’s offices, not the Crown courts, but I take the hon. Gentleman’s point. The point of the POD system is to enable more people to have ownership of cases so that they are dealt with more efficiently.
Julie Hilling
Under the Labour Government the CPS made great progress in prosecuting domestic violence, thanks in large part to the domestic violence training given to prosecutors and the use of dedicated domestic violence prosecutors. Does the Solicitor-General agree that the cuts to the CPS have placed a huge pressure on prosecutors, with the result that dedicated domestic violence prosecutors are now too overloaded with other work to give domestic violence cases the attention they need and deserve?
The Solicitor-General
I agree that the previous Government were particularly adept in dealing with domestic violence policy, and it is an area that my right hon. and learned Friend the Attorney-General and I have taken up with alacrity. I have appeared in the Court of Appeal to deal with unduly lenient sentences relating to violence against women, particularly sexual assaults. I broadly agree with her, but I do not accept that the system is under any strain in the prosecution of domestic violence cases. There are some really dedicated and hard-working lawyers and administrative staff in the CPS working to ensure that women are safe in their homes.
Mr Philip Hollobone (Kettering) (Con)
On the quality and efficiency of prosecutions, will the Solicitor-General ensure that parenting orders are pursued far more often in prosecution cases when young people are successfully convicted?
The Solicitor-General
We will endeavour to ensure that all appropriate orders and sentences are applied for and handed out. I am clearly not going to give a running commentary from the Dispatch Box on any particular case, but I agree with my hon. Friend’s broad point.
Jessica Morden (Newport East) (Lab)
8. What recent assessment he has made of the effectiveness of multi-agency risk assessment conferences in improving domestic violence prosecutions.
The Attorney-General (Mr Dominic Grieve)
I have not made any recent assessment of the effectiveness of multi-agency risk assessment conferences in improving domestic violence prosecutions. The most recent assessment, which the Home Office published in July, found that such conferences had the potential to improve victim safety and to reduce repeat victimisation, but that a more robust evaluation would be required. We see multi-agency working as a key component of the Crown Prosecution Service’s work to improve prosecutions in that area and to support victims, and we will continue to work with the Home Office on the matter.
Jessica Morden
Earlier this year the Attorney-General and the Solicitor-General visited Gwent police’s Onyx unit, which they declared to be one of the best in the country at delivering substantial change in the conviction rates for domestic violence and rape. The Attorney-General has repeatedly acknowledged the role that those services play, but can he confirm that he and the CPS are actively monitoring the impact of the cuts on them?
The Attorney-General
Yes, I can confirm that the CPS has very much in mind whether any areas of savings that may be made might have an adverse impact on the service that is provided to victims of violence against women and of domestic violence. My information is that the CPS does not believe that its own work has been in any way undermined or lessened by such measures. That service remains one of its high priorities, and it is a high priority for us as Law Officers as well.
Antibiotic Action Initiative
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Kevin Barron (Rother Valley) (Lab)
I am pleased to see that many hon. Members have turned up for the formal presentation of the petition tonight. I had the honour of having the parliamentary launch of the Antibiotic Action initiative on Wednesday last week, when a formal petition of more than 4,300 signatures was handed in at No. 10 Downing street.
The petition states:
The Petition of supporters of Antibiotic Action, a national initiative of the British Society for Antimicrobial Chemotherapy,
Declares that the Petitioners believe that the treatment of common and serious bacterial infections will be seriously compromised unless urgent steps are taken to stimulate investment in the discovery and development of new antibiotics, further declares that to support the discovery, development and bringing-to-market of new antibacterial agents, opportunities should be identified to safely streamline and accelerate the licensing processes for new antibiotics; declares that the commercial challenges faced by industry in developing and bringing new antibiotics to the marketplace should be addressed, and declares that more partnership between academia and pharmaceutical and diagnostics companies in the UK should be encouraged, in order to maximise the conversion of discovered-candidate molecules into licensed antibiotics available for use on the NHS.
The Petitioners therefore request that the House of Commons urges the Government to review the licensing processes for new antibiotics, conduct a review of the commercial challenges faced by the pharmaceutical industry in developing and bringing new antibiotics to the marketplace and encourage more partnership between academia and pharmaceutical and diagnostics companies in the UK.
And the Petitioners remain, etc.
[P000983]
Border Control Scheme
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
(Urgent Question): To ask for an urgent statement on border control this summer, covering private flights.
The Minister for Immigration (Damian Green)
Let me apologise for the fact that the Home Secretary cannot be here; she is attending an important meeting of the National Security Council.
It is simply not true that immigration and customs checks for all private flights were abandoned under this Government. In fact, the controls against high-risk private flights were strengthened, and that is entirely consistent with our overall approach to border security of using more intelligence-led checks against high-risk passengers and journeys. Far from weakening our border controls, those measures were aimed at strengthening our border.
Under the previous Government, it was clear that the UK Border Agency’s procedures for private flights meant that some high-risk flights were missed, and this left our country open to the risk of drug smuggling, illegal immigration and gun running. In fact, the previous Government did not even have agreed definitions of high-risk, medium-risk or low-risk private flights, and there were no standard operational procedures: flights landing in one part of the country might be met by a UKBA team; the exact same flight landing somewhere else might not.
Indeed, under the previous Government, Lord Carlile, the independent reviewer of counter-terrorism legislation, called private aviation the UK’s “soft underbelly”. To get a grip on that chaotic situation, in January the UKBA developed a new strategy for private flights, with the aim of meeting 100% of all high-risk flights through the use of better intelligence and increased compliance, the greater use of the warnings index and a standardised risk-assessment procedure. It gave us for the first time a consistent national system for dealing with private aviation, and it drew on the resources of the police and other agencies to make sure that all high-risk flights were met.
The strategy makes use of the legal requirement for pilots to submit records of their passengers. Those are checked against the warnings index, and a full, standardised risk assessment is carried out. The UKBA will deploy officers to meet any flight on which police or other intelligence causes concern, or on which there is a warnings index hit. Local UKBA teams, field intelligence officers and the police then work to ensure a high level of compliance with these procedures, which are, for the first time, consistent across the country. In the view of UKBA senior management, the new strategy is finally getting on top of the risk from private aviation.
Everything that Ministers in this Government have authorised has been done to strengthen our borders: resources focused on high-risk passengers and journeys, a new strategy to sort out private aviation, a new National Crime Agency with a border policing command, e-Borders to check passengers in and out of the country, and tough enforcement. Some 400,000 visas were rejected last year and 68,000 people with the wrong documents were prevented from coming to Britain in the first place.
These particular operational changes were made to address a problem that had existed for years and had been identified but not acted on by the Government of whom the shadow Home Secretary was a member. The border is safer now than it was two years ago. I commend this statement to the House.
Yvette Cooper
Last week, the Home Secretary told the House:
“the only incident of which I am aware when passengers were waved through passport control without any checks at all did not occur during my pilot. It happened in 2004”.—[Official Report, 9 November 2011; Vol. 535, c. 324.]
Yesterday, I was shown e-mails from the border agency from June 2011, which show that immigrations and customs checks were stopped on arrivals of private flights, in accordance with a new national general aviation strategy. That and the answer the Minister for Immigration has just given contradict the information given by the Home Secretary last week.
Why, then, does the Home Secretary not feel that she should come to this House to answer the growing number of questions about this borders fiasco? She has refused to come to the House and she has refused to do interviews for nearly two weeks. One e-mail from 14 June refers to the instruction not to see passengers arriving on private charter flights for either immigrations or customs purposes and states:
“we are not allowed to physically see the passengers”.
Does the Minister for Immigration agree that the Home Secretary was wrong to say that no passengers had been, as she put it, “waved through” on arrival? Will he now correct that?
According to Treasury figures, there are 80,000 to 90,000 private flights a year. Will the Minister tell the House how many of those flights went through with no checks on arrival and what the security and immigration implications are of not even checking whether the number of people getting off the plane is the same as had been advised? If there was a new general aviation strategy, why did the Home Secretary not refer to it last week? Did she even know it existed? Was it in the weekly updates we now know went to the Minister for Immigration? How does that strategy relate to the so-called pilot?
There are far more questions than answers in this continuing borders fiasco. How on earth can we have any confidence in what the Home Secretary says is happening at our borders? She will not come and answer the questions. She said that no one was waved through, but it is clear that many passengers were. She said that Brodie Clark went further than she authorised and admitted he had done so, but this morning Brodie Clark has said categorically that he did not. She said that the performance of the border agency improved this summer, but this morning the head of the statistics agency described that as a highly selective use of statistics that may, indeed, be in breach of the ministerial code. Did the Home Secretary knowingly provide wrong information or did she just not have a clue what was going on at Britain’s borders? She cannot keep running away. She must come to this House herself and answer these vital questions about what was happening at the border agency this summer.
Damian Green
It is a shame that the shadow Home Secretary wrote that rant before she listened to what I said in response to her first question. To say that the Home Secretary has not been visible in this House is palpably absurd. She was here twice last week—[Hon. Members: “ Where is she?”] She is attending a meeting of the National Security Council. I am sorry that the shadow Home Secretary does not seem to think that that is an important part of the Home Secretary’s responsibilities. I am sure that the House thinks it is an important part of the Home Secretary’s responsibilities. The right hon. Lady’s basic accusation that the Home Secretary has in any way not answered these questions is, as I say, palpably absurd.
The second question the right hon. Lady asked—indeed, the only substantive one in her rather scatter-gun approach —was about how many people were coming through without being checked. The answer, now, is that every private flight is checked against the warnings index. [Interruption.] I commend Opposition Front Benchers for saying that it is a bit late now. Yes, it is—for 13 years, nothing happened; the right hon. Lady has put her finger on it. There was a shambles in the immigration system, and private aviation was part of it. That was identified by the Government’s own counter-terrorism adviser, but they did nothing about it. We now have done something about it, and that means that every flight is checked against the warnings index and every high-risk flight is met. If there have been changes, as there have been this year, they have been for the better and they have made our borders safer.
Mr David Evennett (Bexleyheath and Crayford) (Con)
I welcome my hon. Friend’s statement on private flights and the need for consistency across the country with every flight checked, as he confirmed. Does he agree that the border force is responsible for allowing only legitimate entry and exit, and that that is what our constituents expect?
Damian Green
My hon. Friend is exactly right. He makes a good point about the border force. The men and women at the border are doing a very good job. All our changes are designed to ensure a more risk-based approach to immigration control—an approach that I was glad to hear commended by the former Home Secretary, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), on the radio this morning—and to make the border safer, precisely by using the expertise of the men and women in the border force who check people coming through the border. Using their expertise more intelligently, and not just having a one-size-fits-all border security system will make, and already is making, our border safer. I think that underneath their bluster, the Opposition agree with that.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
Is it not a fact that what the Home Secretary and the Prime Minister said in this House last Wednesday has been completely undermined by the latest revelations, which demonstrate that either they did know what was going on but would not tell the House or they did not know what was going on and could not tell the House? Is it not a fact that our borders are now less secure under this Government, with people coming in who are not even seen by the border agency? This Government have let the country down, and it is about time the Home Secretary went.
Damian Green
The answer to both the right hon. Gentleman’s questions is straightforwardly no.
Tom Brake (Carshalton and Wallington) (LD)
Does the Minister agree that it is this coalition Government who are going to have to clear up the mess left by Labour, reform a Department deemed not fit for purpose, and secure our borders so that our debate on immigration can be about the skills that the UK economy and the public sector need, rather than about border controls?
Damian Green
My right hon. Friend is right. I am sorry that the Opposition cannot elevate the tone of the debate. As I say, it is interesting that when Labour Home Secretaries cease to be Home Secretaries and become former Home Secretaries, they commend the degree of consensus about using a risk-based approach to security control and immigration control. That would be a sensible way for this debate to go forward, because it is perfectly clear that the long-term solution to the many challenges at our border is to use our resources as intelligently as possible and to use the very good people we have at the border to cope with and combat the highest risks. That is what the general aviation policy was meant to do, as was our pilot over the summer, and the early signs are that they are indeed successful. The Opposition can argue about the details, but I would genuinely welcome some common sense and support for these principles from the shadow Home Secretary. That would be a more sensible approach that the one she has taken until now.
Paul Goggins (Wythenshawe and Sale East) (Lab)
Given that the Home Secretary’s policy was consistent across the country, will the Minister confirm that a number of private planes were allowed to land at Manchester airport this summer without proper customs and immigration checks? If that is the case, will he tell me how many?
Damian Green
The point of the pilot and of the private jets policy was to improve checks. The idea that there were no immigration checks is simply wrong. It is wrong in relation to Manchester airport and wrong in relation to other airports. The right hon. Gentleman asked how many flights arrived without immigration checks. The answer is none.
Tony Baldry (Banbury) (Con)
Could the Minister kindly explain what happened under the previous Government before the change to the new general aviation policy that is based on a risk-based assessment?
Damian Green
What used to happen under the previous Government was that flights were designated as high, medium or low risk, but there were no criteria by which anyone could judge whether flights were high, medium or low risk. All the very good people at the border therefore took a view on an individual basis. The result was complete inconsistency between different parts of the country. I cannot think that anyone addressing this matter in a fair-minded way would say that having a decent set of national criteria about what is a high or a medium-risk flight is less sensible than the chaos that existed before.
Tony Lloyd (Manchester Central) (Lab)
The shadow Home Secretary asked the Minister a direct question. What he has announced this morning is inconsistent with what the Home Secretary told the House last week. Did the Home Secretary know?
Damian Green
Nothing that I have said this morning is in any way inconsistent with what the Home Secretary said last week.
Mr Rob Wilson (Reading East) (Con)
Has the Labour party passed on all the details that it says it has received from border agency staff about private flights? Has the Home Office had time to check the veracity and accuracy of those allegations?
Damian Green
The Labour party, predictably, has passed the information on to newspapers, so we know what it has. [Interruption.] I do know about that. I will not stand here and condemn people for using leaked information. I merely point out to the shadow Home Secretary that it is rather more effective when one produces documents that show that Ministers have done something wrong. Throughout this affair, she has so far signally failed to do that.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Will the Minister please tell the House how many of our border operations he has visited in the past 18 months?
Damian Green
All the big ones. I have been to all the major airports and all the major UKBA centres, as well as to several of the biggest overseas visa operations. The hon. Lady is quite right to suggest that Ministers should get out and talk to people who are actually doing the job. I do that as often as I can.
Claire Perry (Devizes) (Con)
As somebody who has spent their fair share of time with wailing infants in long immigration queues, I think that families across the country would welcome a more rational, risk-based approach to delivering results with scarce resources. Does the Minister agree that the fake outrage from the Labour party sits badly with its track record of 2.2 million people coming to this country, half a million asylum seeker claims and an open border—
Mr Speaker
Order. We are grateful to the hon. Lady for getting her views on the record. Unfortunately for her, the Minister is not responsible for the record of the previous Government.
Mr Gerry Sutcliffe (Bradford South) (Lab)
The public know that this is a shambles. We are getting the facts today only because of an urgent question from my right hon. Friend the shadow Home Secretary. Will the Minister put on the record the times that he has met Brodie Clark to discuss the pilot and the change in aviation strategy so that we can get the truth? The only way we are getting the truth at the moment is by forcing Ministers to come to the Dispatch Box.
Damian Green
I am very grateful to the hon. Gentleman for that point. He said some disobliging things about me in the debate last week, which was sad because I have always got on with him. He has given me the opportunity to say that in the year that he spent as shadow Immigration Minister he did not put down one written question on immigration. I am therefore entitled to doubt his deep interest in this subject. The answer to his question is that there are investigations going on. Clearly, all the facts are being put to the investigators. John Vine will publish his investigation in due course. He is an independent investigator and he will decide what to publish.
Mark Pawsey (Rugby) (Con)
I have been contacted in the past hour by a constituent who is a photographer, who carried metal boxes full of photographic equipment on private flights and took them through Stansted, with no checks, in the years up to 2002. The problem has therefore existed for years, including when the Labour party was in power, and it is plain wrong for the Opposition to raise the issue in the manner in which they have.
Damian Green
My hon. Friend is quite right to point out the shambles that was in place before, but as you pointed out, Mr Speaker, that is not my responsibility. I am very grateful for that. What I am responsible for is what happens now, and my hon. Friend makes a good point. That is precisely why we are making the changes that we are across the borders system. As I have said, using risk-based and intelligence-based measures will give us safer borders in the long run. Stansted is one of the airports where there have already been significant changes to plug some of the loopholes that existed. There is certainly more to be done at Stansted, Manchester and other airports, and I am not saying that the system is now perfect, but it is getting better.
Alex Cunningham (Stockton North) (Lab)
Part of Durham Tees Valley airport is in my constituency, and today we are getting conflicting information from officials there, one claiming that security is very much compromised, particularly in the case of private flights, and another claiming in today’s Evening Gazette that the airport is 100% secure. Will the Minister please tell the House who is right, and at least try to reassure the people of Teesside and beyond that their airport has taken the necessary steps to protect them and our borders?
Damian Green
The hon. Gentleman actually makes a very deep and important point. Different people working at the front line, presumably alongside each other, can genuinely have different perceptions of how good the system is. I would not go as far as the optimistic one of his constituents who says that it is 100% secure all the time—it would be foolish for any Immigration Minister to say at any time that every part of our border is 100% secure. However, I can absolutely reassure him, his constituents and the workers at the airport that we are doing our best to set up systems that make it more secure, and that we will keep doing so.
Damian Green
Well, that is not what the hon. Gentleman’s constituent has told him.
Henry Smith (Crawley) (Con)
For years there has been contamination of people arriving at entry points on domestic and international flights. Can the Minister assure us that such contamination will come to an end, and that there will be segregation of incoming passengers?
Damian Green
I am indeed aware of that, particularly at Stansted and Gatwick, and it is one of the priorities at the moment.
Ian Paisley (North Antrim) (DUP)
May I push the Minister for a little further clarification on the issue of flight warnings? There are 80,000 to 90,000 flights entering the United Kingdom. Can he assure us that the new checks that he mentioned will apply to flights that land in Northern Ireland, that there is no loophole for entry into the United Kingdom without those checks and that devolution does not have an impact on this aspect of the matter?
Damian Green
Any overseas flight that arrives in Northern Ireland from outside the common travel area will be treated like any other flight. Of course, the hon. Gentleman will know that there are complications and issues to consider with the common travel area, and as part of the list of things on which we are now acting, I am considering how to strengthen it so that we properly address the various problems that I know he and his colleagues from Northern Ireland have identified.
Kris Hopkins (Keighley) (Con)
Does the Minister agree that the previous Government’s reckless open-door immigration policy resulted in problems in community cohesion in many of our towns, and that we should not be taking lectures from individuals on the Opposition Benches?
Mr Speaker
Order. The hon. Gentleman has put his concerns on the record, but we must stick to the Minister’s responsibility.
Bob Blackman (Harrow East) (Con)
Will my hon. Friend the Minister remind the House what lessons have been learned as a result of the pilot, and what changes he is making to the system to ensure that our borders are secure?
Damian Green
The pilot is still being evaluated, but my right hon. Friend the Home Secretary has already said that the initial reported information suggests that it led to more interception of illegal immigrants, fraudulent documents, drugs and guns. The initial signs from the management information that we have suggest that the pilot was extremely positive, but there will be a full evaluation and then we will decide what is best to do for the future.
Mr Kevan Jones (North Durham) (Lab)
Further to the question from my hon. Friend the Member for Stockton North (Alex Cunningham) about Durham Tees Valley airport, will the Minister say exactly how many private flights arrived and were not checked? If he does not have that information to hand today, will he publish it?
Damian Green
As I have said several times, every private flight is checked against the warnings index. [Interruption.] The shadow Home Secretary, characteristically chuntering from a sedentary position, as she does throughout, is talking about that happening when flights arrive. It is actually safer to check them before they arrive, and that is what the warnings index is for. All private flights are checked against the warnings index before they arrive, and I tell the right hon. Lady—[Interruption.] I will tell her, if she will stop talking for a second and listen, that it is safer to check them before they arrive. That was why her Government and the current Government spent hundreds of millions of pounds on the e-Borders project—so that we could get the information before people came to this country. That was how we managed to prevent 68,000 people from even getting on planes to come here. If the Opposition Front Benchers cannot understand that stopping people before they arrive here is a better system, I fear that they do not understand the first thing about immigration control.
Nick de Bois (Enfield North) (Con)
In his evidence to the Home Affairs Committee, Brodie Clark said that he had sanctioned the relaxation of fingerprint checks at Heathrow. Was the Minister made aware of that?
Damian Green
For understandable reasons I have not been following what Brodie Clark has been saying over the past hour. I think it would injudicious of me to comment on anything that was said at a Select Committee hearing this morning when I was concentrating on the urgent question.
Phil Wilson (Sedgefield) (Lab)
Durham Tees Valley airport is in my constituency. How secure can the people of Teesside and Durham be if people arriving at the airport are not checked, not passed through immigration—not even waved through—and not even seen, because they have arrived on a private jet?
Damian Green
For the fourth time, I will tell Opposition Members—I wish their Whips could have thought of more than one question for them to read out—that every private flight is checked against the warnings index before it arrives. That is what makes it safe.
Mr Philip Hollobone (Kettering) (Con)
My constituents want to know the definition of private flights, which of the main airports they fly to, and what proportion of total passenger numbers is made up of such flights.
Damian Green
The definition is a flight that is not a scheduled flight. The number of airports that they fly into is in the hundreds, because frankly anyone who puts up a windsock in a field can have a private airport, but the number regularly used for private flights is between 100 and 150. The biggest usage of private flights is into our biggest airports, because most of them tend to be business flights.
Owen Smith (Pontypridd) (Lab)
The Minister keeps reassuring us that the system he has put in place is now safer, but UKBA staff are clearly not reassured of that, because one e-mail from them states:
“we are not allowed to physically see the passengers…we have no way of checking whether the handling agent information is correct or even if the number of people arriving…matches the number we have been advised.”
How, in that case, can the Minister tell us that he knows who is arriving and exactly how many people are on the incoming planes?
Damian Green
Because we are working much better than ever before with airports overseas, so we can check who is getting on the planes in the first place. As I keep repeating, it is better to do that overseas than to wait until people are in this country.
Neil Parish (Tiverton and Honiton) (Con)
Is it not necessary for us to bring in these tighter controls, because of the 2.2 million net immigration between 1997 and 2009 under the last Government?
Damian Green
There are two separate issues here, both of which need addressing. One is the vast number of people who arrived legally under the previous Government’s conscious policy of increasing immigration to unsustainable levels. Secondly, there is what we are discussing this morning—the fact that our borders were not sufficiently secure. Just as important as bringing down the legal numbers is making our borders more secure by a number of methods, such as the use of technology, the pilots that we operated in the summer and changing how we look at private flights. The various actions that we are taking are all designed to make the border safer.
Karl Turner (Kingston upon Hull East) (Lab)
The question has been asked several times, and I know that the Minister is frustrated, but I wonder whether he will give an answer. Does he think it acceptable that on his watch the UKBA could not even check passengers coming off private flights? Any chance of an answer?
Damian Green
I am tempted to revive that old parliamentary chestnut: “I refer the hon. Gentleman to the answer I gave some moments ago.” As I keep saying, it is better to do it overseas, which is what we do. It is also safer, and all the experts agree it is safer—and frankly, if the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) were still sitting on the Government Benches, she would be saying that it was safer as well.
Mr Speaker
Order. I am sorry to disappoint some colleagues, but time is against us—there is heavy pressure on time from Backbench Business Committee business—and we must now proceed.
Metal Theft (Prevention)
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Graham Jones (Hyndburn) (Lab)
I beg to move,
That leave be given to bring in a Bill to introduce a licensing scheme for scrap metal dealers; to enable magistrates’ courts to add restrictions to licences to deal in scrap metal; to require that financial transactions in trade in scrap metals be restricted to cashless payments; to give police officers powers to search properties owned by scrap metal dealerships; to provide that scrap metal proven to have been obtained through theft may be classified as criminal assets; to introduce criminal charges for theft of scrap metal which take into account aspects of the crime other than the value of the scrap metal stolen; and for connected purposes.
The crime of metal theft is reaching a crisis point in this country. According to the Energy Networks Association, metal theft from electricity networks rose by some 700% between June 2009 and June 2011. Organised crime has been involved in scaling the tallest electricity pylons and cutting down heavy tensile cable from the top of 275,000 V towers. The Association of Chief Police Officers has conservatively put the national cost of metal theft at £770 million. Figures from the British Transport police show that theft of overhead power cables has risen by 70% over the last year, with 2,712 cable-theft-related crimes registered in 2010-11. There are eight thefts or attempted thefts of railway cable every day, which has so far caused 240,000 minutes of delays to rail passengers this year and cost Network Rail £43 million over the last two years.
Yesterday, representatives of South West Trains told me of an incident involving a train travelling at peak hours from London. Metal thieves cut and removed a signalling cable and then, while Network Rail repaired it, cut a further section. The live shock could have seriously injured or killed Network Rail staff, while packed commuter trains were left at a standstill. Delayed and besieged passengers began exiting trains by climbing the embankments, crossing the live third rail. The result was an even greater section of the rail network having to be switched off for safety reasons—and this seven months before the Olympic games. In Burnley last week, something as simple as the theft of seven £75 brass padlocks left electricity substations exposed to inquisitive children. The past year has also seen six fatalities and 50 serious injuries, and I am sure that everyone in the House has been shocked by the increasingly numerous stories of thefts from war memorials. War memorials are being stolen, sold and scrapped because the regulatory framework surrounding metal recycling is so ineffective. In combination with the soaring international price of metal, there are effectively incentives to steal.
Metal recycling is a valuable industry. It is a sustainable means of reusing an important and increasingly expensive commodity. However, the soft regulatory framework undermines that logic by encouraging thieves to take materials that are still in use. The problem lies precisely in the fact that it is stolen metal that is being recycled. My Bill will go some way to removing the incentives to steal created by weak regulation in the industry. This is not red tape; the intention is to reduce the costs to businesses and the public purse incurred through damage to the nation’s infrastructure. Such regulation would allow legitimate, law-abiding and socially responsible scrap metal dealers to flourish. Indeed, a few scrap metal dealers already perform much of the requirements of the Bill in best practice.
Yesterday I met with representatives of SITA UK, a company that recently entered the metal recycling industry. They told me that they were shocked and appalled by the level of malpractice in the sector. The chief executive of SITA UK gave his full backing for the six elements of the Bill. So far, there has been no opposition from the affected industries to any of my six proposals. In fact, quite the reverse: they have received almost universal backing, with the concern now being that if we do not go far enough now, the problem will continue to escalate. The consensus in the industry is that the six measures in my Bill are vital if anything is to be done to stop the escalating crime. I now turn to those six provisions.
First, the Scrap Metal Dealers Act 1964 must be amended so that the current registration regime can be replaced by a robust licensing regime that is funded by a licence fee paid by scrap metal dealers. That is the first step towards something resembling a regulated industry. Secondly, property obtained through theft should be regarded as criminal assets. Classifying stolen metal as criminal assets would allow the Proceeds of Crime Act 2002 to apply. Crucially, that will impact on those who think that they can evade any regulatory regime. Thirdly, police authorities should be given the power to search and investigate all premises owned and operated by scrap metal dealers suspected of dealing in stolen property, as well as the power to close scrap metal dealers where criminally obtained metals are discovered.
Fourthly—there is a great deal of consensus in the affected industries on this point—trade in scrap metals must be restricted to cashless payments, with a concurrent requirement that scrap metal not be sold or processed until payments have cleared. Ministers may think that onerous, but such a system has been successfully implemented in France, Belgium and much of the United States. Alongside that, dealers should operate CCTV and require photo identification of sellers. Those measures would remove the anonymity of the seller and require honesty of the dealer. I have been informed by the industry that scrap metal is a £5 billion industry, with an incredible £1 billion estimated to be exchanged in cash payments. That amount of cash usage is unseen in any comparable, legitimate industry, and should also interest the Serious Organised Crime Agency and Her Majesty’s Revenue and Customs, if for no other reason than to verify its legality.
Fifthly, magistrates should be given the power to add restrictions to licences to deal in scrap metal, should they feel it necessary. Local knowledge is indispensible in addressing such crimes. Finally, the Theft Act 1968 should be amended so that sentencing is proportionate to the consequences of the crime, not the value of the metal stolen. A tougher sanctions regime is central to combating metal theft. That is important, because there has to be a realisation that we cannot police Britain’s metal estate. We have to accept the reality that there will always be an opportunity to steal metal and get away with it. We must adjust the deterrent sentence accordingly. The tariff must also reflect the fact that the theft of scrap metal worth £20 may cause £500,000 of damage or risk lives.
There is widespread support for the Bill in its current form. Yesterday I held a meeting in Parliament attended by representatives of BT, Network Rail, the Energy Networks Association, the Local Government Association, South West Trains, E.ON, Arqiva, Ecclesiastical Insurance and SITA UK, among others. They fully support the Bill in its entirety. In addition, I have received vocal support from the Country Land and Business Association and Lancashire constabulary. It is now time for the UK to prevent this epidemic plague. Supporting the Bill is an important step in demonstrating that this House not only takes seriously the theft of our heritage, public art and vital infrastructure, and the protection of churches and war memorials against desecration, but is willing to support tough measures. Therefore, I commend this Bill to the House.
Question put and agreed to.
Ordered,
That Graham Jones, Margot James, Mr John Spellar, Steve Rotheram, Mr Tom Watson, Bill Esterson, Pat Glass, Mr Alan Campbell, Martin Caton, Chris Kelly, Kate Green and Andrew Percy present the Bill.
Graham Jones accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 20 January, and to be printed (Bill 249).
Backbench Business
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Fisheries
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Frank Doran (Aberdeen North) (Lab)
I beg to move,
That this House considers that the Common Fisheries Policy has failed to achieve its key objective of producing a sustainable European fishery; welcomes the review of the policy by the European Commission; and urges Her Majesty’s Government to ensure that a revised Common Fisheries Policy makes particular provision for—
(a) a move away from a centralised management system to a system of regional management of fisheries involving all stakeholders and strengthening of the local management of the 12-mile limit;
(b) a manageable and practical scheme to eliminate the problem of discarded fish; and
(c) the replacement of the current system of annual quotas with a multi-annual system of management focused on conserving fish stocks within a sustainable fishing industry, in particular to protect the viability of low impact fishing.
Before I address the issues in the motion, I want the House to remember the bravery of our fishermen, and the incredibly difficult and dangerous work that they do. Fishing remains the most dangerous occupation in this country, and we remember them for their brave work and send our condolences to the families of those who have died. I remember in particular the tragic circumstances in which the husband of the hon. Member for South East Cornwall (Sheryll Murray) died in a shocking accident recently. We send our condolences to her in particular.
The common fisheries policy was established in 1970, before Britain joined the then European Community. Many people believe that the industry was traded as part of wider negotiations on access to the community. That is certainly the view of many in the fishing industry today, and it has coloured their opinion of the CFP ever since. Whatever the circumstances, the British fishing industry changed for ever when this country acceded to the common market in 1973.
Experience tells us that the CFP has failed in its objectives. Its primary objective was the
“rational and sustainable exploitation of fish stocks”,
but, over the life of the CFP, fish stocks have deteriorated considerably, as has our fishing fleet. The system is broken in several places. Decision making is centralised in Brussels, and it is far too complicated. The management style is far too top-down. Decision making is short term, and there is a one-size-fits-all culture. There are also serious issues with the science, but the science determines at least the direction of Council decisions on quotas. We have a system that operates on the basis that management measures and plans for EU stocks can all be created centrally by the Commission, that member states will enforce those rules, and that fishermen will obey them. To put it mildly, that does not reflect the reality of the fishing industry in Europe.
I should like to focus on two issues. The first is the problem of discards, which is high on the agenda. We are all opposed to the principle of good, saleable fish being thrown back into the sea. Television programmes, celebrities and many others outside and inside the fishing industry tell us that that is a bad thing, and of course it is a very bad thing. It is offensive to most of us, it is wasteful, it affects the viability and sustainability of fish stocks, and it distorts the science and scientific advice. It also deeply affects our fishermen, who are forced to throw perfectly good fish back into the sea to rot. The discard of fish is a direct consequence of the one-size-fits-all management approach by the European Commission and its strict adherence to a system of quotas applied to single species over the past 28 years.
The principle of the total allowable catch—TAC—system is questionable in itself, but the refusal to recognise that many fisheries are multi-species and require a much more sophisticated response is a significant sign of the inability of the present system to meet the needs of the fishing industry. Despite the huge improvements made by fishermen, particularly in Scotland, to use more sophisticated gear and other methods to avoid by-catch, it is still a major problem that the Commission has failed to address.
Then there is the even more difficult subject of black fish. From the earliest days of the UK’s membership of the CFP, that has been a problem, not just in the UK but across Europe. Until relatively recently, the subject was ignored by successive Governments. In the1970s, it was estimated that over 20% of the haddock caught in the North sea was illegally caught. Recent inquiries set up by Grampian police, Northern police and Her Majesty’s Revenue and Customs have resulted in a number of convictions of fishermen and fish-processing companies.
One statistic from a report published in July by KPMG gives a good idea of the scale of the fraud that has been uncovered. The report looked at crime in the corporate world in the first six months of this year, and it showed that, in Scotland, company fraud rose from £2.8 million last year to £94.1 million this year, of which £91 million related to prosecutions for illegal fishing. The sums involved are huge. Everyone in the fishing industry knew that it was going on, and that goes right up to Ministers and their officials.
The fraud has had a number of consequences. One has been a serious distortion of the science, much of which is based on the recording of the details of individual landings. It is clear that, for many years, the recorded landings have been wrong. There have also been serious consequences for many of the businesses that refused to become involved in the black fish trade. Most of them lost trade, and many went bust because their customers could get cheaper fish on the black market. I wish to discuss the related issues in more detail with the Minister, and I will contact him later with a view to arranging a meeting.
It is extremely important to stress that illegal fishing is not unique to the UK, and that it happens in many other countries. Following new regulations introduced in Scotland in 2004 requiring the registration of fish sales companies, the problem of black fish seems to have been almost eradicated. However, black fish and discards are two areas in which the Fisheries Commission has been blind to the impact of its policies. The policies in both areas have been immensely damaging to the fishing industry, not just here in the UK but across Europe, and of course both practices distort the science on which the whole quota system is based.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
I congratulate the hon. Gentleman on securing the debate, and on the motion. Having identified some of the crucial failings of the common fisheries policy, the motion also identifies one of the key solutions—namely, regional management. That would involve those with a stake in the fishing having a say in the policy. In that way, they would know what was going on and have a vested interest in ensuring that the policy was successful.
Mr Doran
I agree with the hon. Gentleman. One of the key needs of the fishing industry is to remove the top-down system of management and to involve the whole industry, right down to the level of the fisherman on the fishing boat. I will address that issue in a minute.
We are now promised a radical review. The Fisheries Council seems to recognise some of the issues on management. For example—picking up on the hon. Gentleman’s point—the possibility of devolved decision making is explored in the consideration of the transfer of responsibility away from the centre to the regional seas level and of the inclusion of the fishing industry. There is a strong view in the industry that decentralisation is essential for the future of the UK fishing industry, but it must be decentralisation that is meaningful and that works.
Industry leaders are worried about the lack of detail in the proposals and also about the model put forward by the Commission, as it will require member states with an interest in the various regional seas to co-operate. This has led to fears that regionalisation will simply result in a further layer of bureaucracy and cost. There is concern that the European Parliament, having recently been given new powers, might be reluctant to give them up. There is a history of that happening.
The industry would like to see member states with an interest in regional seas co-operating with regional advisory councils at regional sea basin level to prepare comprehensive management multi-annual plans. The regional advisory councils have been incredibly successful, particularly here in the UK and in other European countries. They must play a vital part in any proposals.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I, too, congratulate my hon. Friend and his colleagues on tabling this motion. It has broad support across the House, not just across the parties but among those who sometimes have differing points of view on EU-related issues. Does knowing that the House is united not give the Government strength going into the negotiations to take the opportunity of what appears to be some movement with the Fisheries Commissioner to get the solution that has been demanded by our constituents and communities for so long?
Mr Doran
My hon. Friend is absolutely right. We have a habit in fisheries debates in sending the Minister off to Brussels with all our support and help. This is not a party political issue; there might be many issues we disagree on, but this is certainly not one of them. The hopefully full support of the House expressed in this motion today is important.
The consultation also proposes a complete ban on discards. Commissioner Damanaki suggests a gradual approach, starting with a limited number of fish species in the ban. The starting point will be in the pelagic fisheries, moving on later to the demersal fisheries. Of course we all want to see a ban on discards, but any proposal to ban them must take account of the reality of fishing. The proposal suggests that the Commission will not budge from its current policy of a species-by-species approach, which ignores the reality of mixed fisheries. Our current science is inadequate and is unable to deal under the current rules with mixed fisheries. A large amount of discards come from those fisheries; what is needed is an ecosystem approach that recognises that many different species of fish—
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Does the hon. Gentleman agree that much of the problem of discards comes from the EU rules themselves, particularly the catch composition rules, which mean that the seven target species are not caught to a certain degree, but so many other kinds have to be dumped as a result that it amounts to absolute madness from the EU?
Mr Doran
The hon. Gentleman is absolutely right. There are many reasons for the high level of discards, and what he suggests is certainly a major one.
What we need is much greater emphasis on the science and particularly on making the science fit the management purpose. We have had more than two centuries of fisheries science, but in the present condition I understand that there is no analytical assessment of around 60% of the stocks in our waters. The science needs to improve, it needs to consider the specific problems associated with mixed fisheries and it needs to inform a sustainable policy. Of course, the Fisheries Commissioner’s proposals will work with some fish stocks, but it will fail—and fail miserably—if the same rules are applied to mixed fisheries.
Andrew George (St Ives) (LD)
In that case, does the hon. Gentleman agree that the practice of taking scientists on fishing vessels should be extended throughout the industry, because it will help to provide the best possible data for the future management of fisheries, especially in circumstances where we cannot distinguish between the intentional and unintentional over-catching of certain species, particularly in the mixed fisheries?
Mr Doran
One major problem with the science is that there is not a close enough relationship between the science and the fishermen. The hon. Gentleman is absolutely right. Other countries such as Ireland do that, and I do not see why we cannot have scientists on our boats and secure much more co-ordination with them. As I say, the science needs to improve, it needs to consider the specific problems associated with mixed fisheries and it needs to inform a sustainable policy. Of course the Fisheries Commissioner’s proposals will work, but not in the mixed fisheries.
Let me say a brief word about the December Fisheries Council meeting. I know that other colleagues will enter the debate on various aspects of the Commission’s proposals, but this is the only opportunity we will have to say something to the Minister about the Fisheries Council in December. As usual, there are many issues on the agenda; let me run through them very quickly. As far as the industry is concerned, the major problems are the pre-programmed effort and total allowable catch reductions required by the cod recovery plan, the mismatch between the science and the Commission’s proposals for 2012 TACs, and the continuing saga surrounding Iceland, the Faroes and the pelagic stocks. I hope that the Minister will deal with all those issues in the meeting.
Ian Paisley (North Antrim) (DUP)
Does the hon. Gentleman agree that the success of this debate and the House’s attitude will be measured largely in December at the Council meeting? If the Council is allowed to ram through another 25% reduction in our total allowable catch, it will effectively put more fishermen out of business and completely ignore the wishes of this place?
Mr Doran
I have two quick points for the hon. Gentleman. The Commission says that it will follow the ethos and philosophy of the recommendations in the consultation document. Yes, there is a mismatch between the science and what the Commission is proposing.
I was about to say that, in the 20 years of my attendance at fisheries debates in this place, I cannot remember a single good word being said about the common fisheries policy. I think that that reflects the views of most of my colleagues here. For a number of years the former Prime Minister, Ted Heath, attended these debates—not to support the fishing industry in Bexley or even to defend the CFP, but to defend his decision as Prime Minister to sign up to the CFP when the UK joined the then European Community. He put up with a lot of abuse and many attacks over the issue, particularly from his own side, but he stood his ground and maintained that the decision he made was in the best interests of the country. The current CFP review gives us an opportunity to argue for a much more radical change to the CFP—one that recognises the past failures of the system and puts in place a CFP that is fit for purpose in the 21st century.
The three issues set out in the motion—regional management, a practicable scheme to end discards and a multi-annual system of management—are a good starting point and we look forward to a positive outcome from the negotiations. In the meantime, there is work to be done at the December Council, and I wish the Minister well.
Mr Speaker
Order. Given the level of interest in this debate, I have imposed a five-minute limit on each Back-Bench contribution.
Miss Anne McIntosh (Thirsk and Malton) (Con)
May I congratulate the hon. Member for Aberdeen North (Mr Doran) and my hon. Friends, especially my hon. Friend the Member for South East Cornwall (Sheryll Murray), on securing this timely debate? The Select Committee, which I have the honour to chair, hopes that we might return to debate the work it is currently undertaking on this very subject. I hope that the hon. Gentleman and others will follow the direction of travel of the current EU negotiations, which seems very positive indeed. These are ground breaking and should command the support of all member states. The challenge to the Minister who will be leading these negotiations for the whole of the United Kingdom is to ensure that it is not just the northern member states that support these ground-breaking proposals from the Commission, as it is important for the southern member states to do so as well.
At the outset, I draw the House’s attention to the Select Committee’s initial report, “Implementation of the Common Fisheries Policy: Domestic Fisheries Management”, which was adopted on 18 May. We urge the Government to continue the work to find a market for less popular fish. I am delighted to see that that is part of Commissioner Damanaki’s current thinking. It is also important to implement the excellent work done under the previous and the present Government on “Project 50%”. Fantastic work was done in a short period of time to reduce discards by employing more selective gear. We would like to see that project pushed out widely across English fisheries.
We press for a reduction in discards as a key element in the current common fisheries policy negotiations and we want to ensure that the interests of the under 10 metre fleet are represented in them. There is common ground in what the hon. Member for Aberdeen North said about the eye-watering lack of scientific evidence. We must have the means to improve the scientific evidence before we agree any further round of reform.
I would like to sound a note of caution to the Minister—in a personal capacity, if I may. I think it is misleading for the UK to talk about under 10 metre boats when the European Union talks about under 12 metre boats. Will the Minister address the issue of whether we are disadvantaging our own fishermen in that regard?
In representing the six families who fish out of Filey Coble Landing and all who fish the Yorkshire coast from Scarborough, Whitby and Bridlington, I urge the Minister to reflect very carefully indeed before contemplating for the UK any introduction of a quota for lobster, crab and shellfish. I believe that the Minister is going forward in absolutely the right way by looking at pilot schemes. It has been put to me by the local fishermen that they are excluded at the moment from the cod and other quotas and that they are doing very nicely on a sustainable basis from lobster, crab and shellfish, so they do not wish to see their incomes penalised or jeopardised in any way.
I entirely agree with the hon. Member for Aberdeen North that we have not seen enough flesh on the bones of the Commission’s proposals. That is causing great anxiety. We need to know how the European fisheries fund will be replaced, and in particular how it will apply to active fishermen and coastal communities. I should like to know how the Minister thinks that we will navigate around the legal base, and how regionalisation will work.
This is the first occasion on which co-decision will rule the operation of these ground-breaking negotiations, so let me end my speech on a positive note. I hope for a maximum sustainable yield, an end to discards, and regionalisation of the industry.
Katy Clark (North Ayrshire and Arran) (Lab)
It is a pleasure to speak in the debate. I shall do so mainly on the basis of representations made to me by constituents, especially those who have been actively involved in marine conservation. My constituency contains a very active community-based organisation called COAST, which has campaigned successfully for Scotland’s first no-take zone in Lamlash bay on the isle of Arran. Many of those involved in the campaign come from a fisheries background, or have been involved in marine conservation issues as divers or scientists.
One of the main points that I shall make today is that sustainability—and, indeed, the approach taken by both the Scottish and the United Kingdom Governments to the creation of ecosystem-based marine conservation areas and zones—should be at the heart of our policies. Unless we start to address more seriously and effectively the significant conservation problems that exist in our seas, we will not have a fishing industry in this country. I believe that Members on both sides of the House, and both the United Kingdom and Scottish Parliaments, want a policy that is more effective in terms of sustainability than the common fisheries policy, which, as is well documented, has not been successful in its own terms.
There has been much talk of quotas, and specific species have been cited. Unless we take an ecosystem-based approach and recognise the inter-relationship of different species, we will not solve our problems. The Chair of the Select Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), mentioned the lack of scientific evidence, but another problem is the lack of transparency. We need much more information about, for instance, who holds the UK’s fishing quota.
The fishing rights that we have as a country belong to the general public, not to individuals, but I fear that unless we are careful, the proposed individual transferable quotas may lead to the effective privatisation of our fishing rights. I remind the Government that although transferable quotas have worked well in some ways in other countries, particularly the United States, they have also had a devastating impact on many communities.
I represent a part of the world where there used to be massive fishing fleets. Now only six vessels operate from my constituency. The seas have been fished out. We need to state clearly that we have a fishing crisis and a conservation crisis. I hope that the British Government will enter the negotiations on the CFP with an ecosystem-based approach at the top of their agenda, because that is the only way in which we shall be able to create the space that will enable our ecosystem to redevelop. Although we have had a no-take zone for only two or three years in Lamlash bay, we are already seeing an increase in the number of scallops and some species of marine life that have not existed in that part of the world for many years.
I urge the Government to look closely at the Marine and Coastal Access Act 2009, and to bring together policies not just to defend those whose livelihoods depend on the fishing industry, but to ensure that we have a fishing industry in the future, and plentiful supplies in our seas.
Ian Swales (Redcar) (LD)
I want to speak about the local inshore fishing industry in the Redcar area. One of my constituents in particular, Peter Rolph, has drawn the issue to my attention. He lives in Redcar but fishes out of Hartlepool, which a recent Sunday Times article cited to illustrate the problem. Another Hartlepool fisherman, Phil Walsh, told the newspaper that he was allowed to go fishing, but was not allowed to land most of his catch. He said:
“We’re discarding perfectly good cod by the basketful…We’re dumping plaice—we’re allowed only 100 kg of those a month—and haddocks, they’re getting dumped, too. The job’s a mess. The way the quotas are, we’re in a terrible situation. We’re on the verge of bankruptcy.”
I want to talk about inshore fisheries partly because of local interest and partly because the 75% of fishing boats under 10 metres long work inshore, but also because I think that the solution to some of our problems lies in such fisheries. We should bear it in mind that most inshore fishermen have a vested interest in sustainability. They want to go out day after day, and they want their sons and brothers to go out as well. They want a sustainable industry. The problem is the boats that do not care about sustainability: the Spanish trawlers that arrive once a year and take everything in sight. Whatever policies we favour should take account of the inshore industry.
My constituent has explained in great detail techniques that he has developed for targeted fishing—catching particular species—and very clever they are too. That is the way to reduce the number of discards. Because the time spent in nets is so short inshore, the number of dead discards is much lower.
Seasonality is another issue. Both the Sunday Times article and an earlier speaker said that the quotas should take account of the variation that takes place during the year. Specific quotas for the whole year would cause fishermen’s incomes to fluctuate in a way that they could not possibly manage. There should also be more flexibility in regard to the cost of licences. Fishermen need to be able to make a return, and, as we know, many with small boats are finding it extremely difficult to make a living.
I support the plea from my hon. Friend the Member for Thirsk and Malton (Miss McIntosh). We certainly do not need quotas for lobsters, crab and shellfish. Those who put lobster pots out each day do not want to kill off the lobster communities in their areas: they have a clear interest in sustainability.
Localisation is vital. Fishermen in my area tell me that cod are abundant there, but they are simply not allowed to catch them. We all recognise the need to rebuild the cod stocks in the North sea, but that has now been achieved in many areas, and the quotas have not caught up.
I welcome some of the Minister’s recent comments, particularly his comments on inshore fisheries. The solution seems to me to be more and more local management. Local areas know their own ecosystems and have an interest in preserving them as they have a long-term interest in there being viable fisheries for their children and future generations. I hope the Minister will take that into account in any policies he develops.
Ian Paisley (North Antrim) (DUP)
I welcome this timely debate. It is important that we set out some red lines before the December Council meeting so that the Minister is emboldened to make representations there on behalf of our industry, which is very important to coastal towns and villages around the entire United Kingdom.
In October there was a significant displacement of the scallop fishing effort from the Irish sea on to the north Antrim coast because British scallop dredgers had exhausted their area VII effort pot of 2011. That effort pot was agreed in the late 1990s under what was called the western waters regime. Uptake of it has accelerated because a growing number of vessels have diversified into the scallop fishery to escape restrictions introduced in other fisheries, such as the long-term cod recovery plan and the western channel sole recovery plan. Also, the Department for Environment, Food and Rural Affairs is considering recommendations for a chain of marine-protected areas, which would have to be mirrored by the Minister’s colleagues in the devolved Administrations. That could create further displacement.
It is easy to become confused by all these issues, and I do not envy the Minister’s responsibilities in having to deal with what is a huge range of very complex and interconnected areas. Yet, as I heard when I was chairman of our agriculture Committee in Northern Ireland, and as I regularly hear from my colleagues in Parliament and fishermen across the country, there is concern about how the common fisheries policy operates, and people are saying, “Enough is enough.”
The Minister’s website carries a colourful photograph of a fishing boat he saw on his travels. On the vessel’s side there is a picture of a Tasmanian devil, which is represented as a trawler skipper who is being questioned by a fisheries officer. He asks the skipper, “What are you landing today?” The skipper replies, “One box of whiting and six boxes of paperwork.” [Laughter.] We laugh, but we know that our fishing fleet is hampered by red tape and paperwork, and that that paperwork comes from one place and one place only: Brussels. We need to recognise that enough is enough; this has got to stop. We hope the Minister will be emboldened to stand up against the weight of EU bureaucracy that has been created.
Miss McIntosh
I am carefully following the hon. Gentleman’s remarks and I welcome much of what he says. Does he not accept that if we were to introduce a UK register, which I believe the Minister is minded to do, that would cut through a lot of the bureaucracy and we would find out who is fishing in UK waters?
Ian Paisley
That is an interesting proposal, and I shall be interested to hear the Minister’s response; I see that he is writing a note as he wishes to respond to it.
Do we really believe that a solution to the problems of paperwork or discards will be delivered by a commissioner who, in my view, is led by media hype, and by a Commission that, together with the other EU institutions, clearly wishes to exert even more influence over member states?
Mr Nigel Dodds (Belfast North) (DUP)
Given what has been said—and, no doubt, what will be said—in this debate, is it not clear that the common fisheries policy should be at the top of the list of policy areas to be repatriated from Europe?
Ian Paisley
My right hon. Friend’s point hits home with great force given what has been going on recently in the eurozone—or the “euro crisis zone” as it should be called.
There will be support from across this Chamber if the Department goes to Brussels in December and says that the 25% cuts in total allowable catches in the Irish sea alone are no longer acceptable. I hope the Minister succeeds in pausing the implementation of any further cuts in the so-called cod recovery plan and days-at-sea provisions, and the reduction in the Irish sea prawn quota. I hope the Commission will listen to those representations, and that our Minister will be able to bring home from Europe a catch that means our fishermen will be able to fish successfully.
Mr Charles Walker (Broxbourne) (Con)
It will not have escaped your attention, Mr Deputy Speaker, that Broxbourne does not have a rich maritime history. However, I enjoy our seas very much. I have a 16-foot Orkney made by Gus Newman of StormCats on the island of Islay, and a beautiful boat it is, too. I am proud to give him a plug in the Chamber this afternoon.
The common fisheries policy has been an absolute disaster for this country. It has been a failure of politics. Commercial fishing in this country is now almost a minority pastime. In saying that, I do not intend any disrespect to those brave men and women who fish commercially, but the fact of the matter is that over the past 40 years our commercial fishing fleet has been laid low.
Too often, scientific advice about the state of our commercial fishery stocks has been ignored. I know there are concerns about the merits of certain scientific advice. However, legend has it that 100 years ago in the North sea it was possible to stand an axe up on the backs of herring, and, as we know, the North sea was stocked to the gunwales with cod, pollock and other commercial fish. That is no longer the case. Too often, we are removing fish from our oceans and seas before they have had a chance to spawn even once, and that is not sustainable.
In the last Parliament, I and the Minister, my hon. Friend the Member for Newbury (Richard Benyon), served together on numerous Joint Committees considering marine conservation zones. I know Members hold different views about the merits of marine conservation zones, but they do provide a safe place for fish to breed—for fish to restock not only the conservation zone itself, but the seas around those zones.
Fiona O'Donnell (East Lothian) (Lab)
Does the hon. Gentleman therefore agree that today’s written ministerial statement delaying announcements on marine conservation zones for a further six months creates even more uncertainty?
Mr Walker
I know that the Minister faces an enormously challenging job in reconciling the various interests of fishermen, conservationists and recreational fishermen, but, having served with him on those Committees for the best part of two years, I also know that his heart is in the right place. If anyone is capable of doing the right thing and making the right argument and putting the interests of this country first, it is my hon. Friend the Member for Newbury. I doubt anyone in this Chamber could meet a finer man. [Interruption.] Yes, or would wish to meet a finer man.
We must give our seas the opportunity to restock themselves by providing a mechanism for them to do so. If in 100 years or 50 years—nay, in 20 years—we are to continue to have a commercial fishing fleet, then sustainability is essential.
Besides owning a small Orkney fishing boat, I am also chairman of the all-party group on angling. There are many hundreds of thousands of recreational anglers, who spend many millions—indeed, hundreds of millions —of pounds each year in our seaside communities.
Mr Marcus Jones (Nuneaton) (Con)
My hon. Friend is making a compelling argument, but does he not agree that recreational sea angling is far more than just a hobby? Rather, it is an industry that brings £1 billion into the UK economy, and it supports many of the 37,000 jobs that angling creates in this country. Does he therefore agree that our Ministers should work hard to try to protect that industry for the benefit of future generations?
Mr Walker
My hon. Friend makes a fine point. It is estimated that recreational sea fishers spend about £1 billion a year on fishing tackle and staying in the many wonderful seaside resorts and communities around our coastline. Their interests cannot be separated from this debate, because they did not create the problem but they are now living with it. So this debate goes beyond our commercial fishermen and stretches into almost every community in this country, because the hundreds of thousands of people who enjoy our coastline live in every community in this country.
So sustainability must be the key to this debate, but we do need a certain robustness in our dealings with the European Union. Forty years ago, we brought to the party the richest fishing grounds in the world—that is no exaggeration. As was pointed out by my hon. Friend the Member for North Ayrshire and Arran (Katy Clark)—I call her my hon. Friend—too many parts of our seas are now the equivalent of ocean deserts, and that is simply not acceptable. However, we do still have the opportunity to restore our once proud fishing industry to the position that it once occupied. We can do this—it is within our powers—but we must be robust in our dealings with the European Union. Things cannot continue as they have done for the past 40 years. We need to get our act together and we need to sort this problem out while we still can recover the position.
Austin Mitchell (Great Grimsby) (Lab)
I have always thought that the best possible way to reform the common fisheries policy was to come out altogether. Before the previous election that was Conservative party policy and I was sorry to see it changed, although it is still a policy to which the Government are attached. They wish to repatriate powers from Europe, and if ever there was a case for doing so it is in respect of fishing, because the blanket command-and-control policy operated from Brussels, with centrally decided political decisions, is not working, cannot be made to work and has to be ended. That means that we have to transfer power down to the regional advisory councils, which have been very successful, having been established only in 2002. They have been a major success but they need powers to allocate quotas, to impose conservation and technical measures, and to enforce those quotas. That means that they must have not only some fast-track powers of implementation, so that the whole thing does not get held up in the Brussels bottleneck, but the finance and staffing to do the job properly.
Therefore, we must, first, fulfil the rather vague aspiration in the Commission’s own document of transferring powers down to the RACs to give them the control of management. They need to work with the producer organisations; they need to involve the industry in deciding and managing its own fate. That is best done through the producer organisations, by giving them power. They have been very good at managing their quotas in their own areas and that power needs to be extended. If we are to have transferable quotas, as the Commission specifies, there have to be transfers within the producer organisations, rather than sales to foreign owners, as happened so much in respect of Spanish vessels. There needs to be a transfer of quotas within the individual POs so that we keep quotas locally. The producer organisations have to play a part, with the industry taking the lead.
We have to point out to the Minister—I am sure that he is aware of this—that the last vestiges of this command-and-control economy are the Commission’s proposals to cut the quotas, which were mentioned by the hon. Member for North Antrim (Ian Paisley). They are the last vestige of the ancien régime that the Commission is trying for, and they have to be imposed at the December Council. That is because the cuts in the quota that the Commission is proposing do not follow the advice of the International Council for the Exploration of the Sea. ICES says that there should be no increase in quota, but the Commission has translated that into a 25% reduction, which is ludicrous. So, too, is the other proposal, for which ICES does not provide an analytical assessment of what has to be done, that there should be a 15% cut. If that is passed by the December Council and comes into the process of co-determination with the European Parliament, we could be stuck with that decision until 2014, which would be ludicrous. It would be damaging to the industry and it would leave us with a huge cut in domestic fleets.
The Scottish Fishermen’s Federation—the hon. Member for North Antrim has just concurred with this point—calculates that if the proposed cuts are enforced on the white fish and the prawn fleets in Scotland, they will be able to fish for only four days a fortnight. They will not be able to make a profit and they will be forced to lay up. This will decimate our fleet for a goal that is mistaken and has no scientific basis, so it is vital that the Minister overturns those cuts and opposes further cuts as part of the cod recovery plans. Cuts in quota will mean more discards.
I have two other points to make. One is that we have to accept that all fish should be landed, not discarded. The fishermen can be paid a management fee—the cost of landing and marketing, and no more—but that will allow us to record all the catches actually made. Secondly, we need to end the system of buying quota from poor African countries, which is a kind of fishing imperialism, where huge Spanish vessels are going in, damaging the local industry, crushing the local boats, in many cases, and stopping the recovery. There can be management arrangements to assist people in managing their stocks and to help them, but there should be no buying of quota, at our expense, to crush the local industry. The times are better than how they have been portrayed and the stocks are recovering, but now is the time to take a firm stand and get the powers transferred back down to the regional advisory councils to save our industry.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I am going to reduce the time limit to four minutes. I want to get everybody in, so I ask for brevity, where possible, and fewer interventions. Where people intervene and then expect to speak, I am going to drop them down the list. Please, let us see if we can get everybody in.
Zac Goldsmith (Richmond Park) (Con)
I strongly support the motion and I congratulate our fisheries Minister on his continued and dogged determination to reform the common fisheries policy—it has not gone unnoticed by everyone who cares about this issue.
I never miss an opportunity to be rude about the CFP, but I am going to restrict my comments to one point. On 12 May, this House unanimously passed a motion calling, among other things, on the Government to restore our control over the 12 territorial miles that surround this country. That was a key part of the motion, but since the EU Commission published its proposals it has curiously slipped off the agenda and out of the debate. I asked the Minister about this matter in a recent letter and his response implied that I, and by extension the House, wanted to achieve this control by removing the historical rights of other countries. I want to make it very clear that that is not at all what I voted for and it is not what the House voted for. Those rights should absolutely be retained, but they must also come with responsibility.
The responsibility on other countries is to adhere to the rules that we set for those 12 miles. So whatever rules we apply to our fishermen must be applied to others. I repeat that we have to avoid the situation, which has been well documented, where we impose laws to protect dolphins and porpoises, and restrict the trawling for bass. Our fisherman, naturally, had to adhere to the rules imposed by our Government, but within days Spanish and French fleets were continuing with the same practices and the effect on porpoises and dolphins was recorded and was depressing.
We have a one-off opportunity, given the huge public demand for reform on an issue that does not normally capture the public imagination, to fight for real change. I simply ask the Minister to remember that the unanimous vote—the unanimous passing of the very radical motion on 12 May—gives him a mandate to be tougher than any of his predecessors have been able to be. So I urge him to take that message with him to Europe and to give the people there a very hard time, as he will almost certainly have to do so.
Mrs Mary Glindon (North Tyneside) (Lab)
I should like to put forward briefly the perspective of our local fishing industry. I was born in the former county borough of Tynemouth, which is now part of the Tynemouth and North Tyneside constituencies. The motto on the coat of arms of the former county borough was,
“Our harvest is from the deep”,
and the coat of arms proudly displayed the figures of a coal miner and a fisherman. Sadly, we no longer have any coal mines and our fishing fleet is very much diminished, but this diminished industry is still important to the local economy and local culture.
The recently formed Northumberland inshore fisheries and conservation authority, or IFCA, has put forward its views on the reform of the common fisheries policy to the Department for Environment, Food and Rural Affairs, after extensive consultation with officers from the Marine Management Organisation and representatives from the commercial and recreational fisheries and the marine science and councillor sectors.
IFCA’s vision is to
“lead, champion and manage a sustainable marine environment and inshore fisheries, by successfully securing the right balance between social, environmental and economic benefits to ensure healthy seas, sustainable fisheries and a viable industry”.
That vision has parallels with the aims of the EU Commission to reform the common fisheries policy. But Northumberland’s IFCA knows from local experience that achieving the vision and reform of the common fisheries policy is subject to practical limitations and it is clear that local factors need to be taken into account.
The area covered by the Northumberland IFCA stretches along the north-east coast from the Scottish borders to, and including, the Tyne. It is a mixed fisheries area, so the aim of achieving a maximum sustainable yield by 2015 would be unrealistic in that area. A more flexible date for that target would therefore be of great help to our fishing industry. Northumberland IFCA also feels that achieving maximum sustainable yield will be crucial to determining multi-annual plans, which, with an ambitious target date of 2015, could create the danger of unnecessary fisheries closures. The emphasis should be on local measures that will ensure sustainable and viable fisheries, such as the lobster V-notching permit scheme and pot limitation, with buy-in from the local industry, which currently operate in Northumberland. The idea of regionalisation cannot be stressed strongly enough, and not only in relation to large areas such as the North sea. Within regions, the specific needs of districts such as the IFCA areas must be taken into account to strike the right balance and involve stakeholders.
I am pleased that the Northumberland IFCA is continuing the interest shown by the former sea fisheries committee in the EU’s commitment to reform the discards policy. However, our fishermen feel that the Government must stress to the Commission that there must be investment in appropriate infrastructure to enable local fleets to dispose of unwanted catch. Technical advances must also be taken into account. The Government should play a role in consumer education to ensure that extra catches that are landed can be marketed more effectively.
Mark Lazarowicz
My hon. Friend’s point about consumer education is very important, because this issue is relevant to others as well as to fishing communities. I think that the number of fishermen left in my constituency can be counted on the fingers of one hand, but this issue concerns the wider community, and that is precisely what is behind this idea—the motivation of communities as a whole to stop the scandal of fish discards.
Mrs Glindon
Yes; the Fish Fight campaign has demonstrated that nationally.
Consumer education would, one hopes, help with marketing the catch that is currently discarded. Ultimately, however, our local fishermen believe that the prospect of a complete end to discards has not yet been set out in sufficient detail to be a viable prospect, and that further debate with the industry is needed.
Livelihoods have been diminished in our fisheries, with resulting economic and social downturns across communities. As the Government are committed to localism, that should be extended to DEFRA’s approach to the common fisheries policy on behalf of our fishing communities. I firmly believe that our prosperity does not depend simply on creating new industries and businesses but on sustaining those that already exist, which are trying hard to survive. It is in the hands of the Government to negotiate a fair deal for the reform of the common fisheries policy, to ensure the future of our fishing communities in a way that meets the vision of IFCA.
Andrew George (St Ives) (LD)
First, I congratulate the hon. Member for Aberdeen North (Mr Doran) and other hon. Members on securing the debate. I strongly support the motion, which highlights the key points in the broad-brush approach of responding to the failure of the common fisheries policy, addressing in particular the problem of centralised management, the need for a more regionally controlled method of eliminating the problem of discarded fish and the need for a multi-annual basis for the future management of the common fisheries policy. Those who, like the hon. Member for Aberdeen North and I, have engaged in these debates over many years will reflect on the degree of consensus that has emerged in the past decade. That will not only strengthen the position but will provide a greater sense of purpose and direction for the Minister. I agree with the hon. Member for Broxbourne (Mr Walker) that not only is the Minister up to the task, but he will have the full support of the House in his work.
I am disappointed that we will not have a further opportunity to discuss this issue, other than today’s inevitably truncated debate. I hope therefore that the Minister will make himself available to the all-party parliamentary group and other groups around the House so that we can discuss the impact of the European Commission’s proposals regarding the future of total allowable catches and quotas around the UK coast.
I want briefly to address two issues, the first of which concerns the Government’s consultation on domestic fisheries and management reform for the under 10 metre sector, which clearly needs to be tidied up and regularised. I have taken a delegation from my constituency to see the Minister about this and he knows that there is significant alarm and concern about the impact that the reforms might have on the under 10 metre sector, not least in relation to the reference period that has been used by the Government for the possible future allocation of quota in forthcoming years.
In the Government’s response to the consultation, which came out a fortnight ago, the Minister announced the intention to try alternative management approaches before introducing far-reaching changes to the current system. The intention is to launch three pilot schemes next year. Having discussed this with fishermen around the coast of my constituency, I know that there is enthusiasm for putting forward the west of Cornwall and the Isles of Scilly as a potential area in which a pilot scheme might be advanced. That could be a means by which the area has some influence over the future development of that policy.
The second issue I want to address is the need to make sure not only that scientists work with fishermen but that fishermen work with scientists. My constituent Shaun Edwards and his crew saved 47 passengers in heavy seas from the dismantled Fryderyk Chopin vessel 100 miles south-west of the Isles of Scilly on 28 October last year. He spent more than 60 hours taking them back to harbour at Falmouth, but sadly lost his job as a result of doing so. He was working for the Centre for Environment, Fisheries and Aquaculture Science as an accomplice fisherman—I think the Minister knows about this case—and that is a great loss to science, as he was assisting CEFAS in its work.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
I shall try to keep my remarks brief. I want to make two points about the west coast of Scotland: about mesh sizes in the Minch for prawns and about catch composition, particularly for haddock. There seems to be an abundance of haddock on the west coast of the Hebrides inside the area known as the French line, which is about 100 fathoms or 200 metres deep, and it seems that the haddock are migrating into the Minch and around the prawn fishery. It should be good news that there is an abundance of haddock, but that abundance is becoming very bad news indeed, because EU catch composition rules mean that no more than 30% of catches can consist of haddock, cod or whiting. If a trip catches quite a lot of haddock, what should have been good news is not good news if there are not enough prawns to get that haddock landed, because it is not allowed to make up more than 30% of the catch. In that case, only a fraction of the haddock caught can be landed.
Haddock is abundant and tasty, and many people in Scotland prefer it to cod, but if they cannot get haddock they will eat cod, and that makes the situation worse. The basis of the problem is the cod recovery plan. Surely we should take haddock out of the catch composition rules, particularly for the west coast of Scotland, where many fishermen’s leaders and merchants tell me there is an abundance of haddock. That underlines the silliness, folly and lunacy of the common fisheries policy. The cod recovery plan prevents haddock from being landed, which will probably mean that more cod is eaten. That is almost a comedy, but, as we all know, it quickly ends up in the usual common fisheries policy tragedy.
Fishermen’s leaders on the west coast have expressed concern to me about a potential increase in mesh size in the Minch from 80 mm to 95 mm for prawns, especially as the size increased from 70 mm to 80 mm two years ago. The change would, of course, have catch implications for the smaller community boats, on which many local islanders work. The change should not be made now, just when Scottish Government scientists are undertaking technical trials, and in particular it should not apply to boats with an engine of under 300 hp, due to the disproportionate cost of gear change for them.
The prawn area in the west coast fishery seems to be in balance at the moment; people seem reasonably happy, although they are worried about some of the measures on the horizon, such as the mesh size proposals. However, they feel that there is a major problem with haddock. Ironically, the problem is caused not by a lack of haddock but by an abundance of it. I would be particularly grateful to the Minister if he looked at ways of removing haddock from the catch composition rules on the west coast.
I have participated in many debates on the common fisheries policy and fishing, and I feel that not a blind bit of notice is ever taken of them in Europe. Earlier this year I was in the Faroe Islands for the “Seas the Future” conference with people from Iceland, Norway, the Faroe Islands, Denmark and Scotland. At the end, officials from the EU talked about the CFP. They asked why I was complaining about the CFP in Tórshavn in the Faroe Islands; would I not come to talk to them in Brussels? It occurred to me that surely there are places besides this Parliament—democratically elected places—where the common fisheries policy is discussed, but are we talking into a vacuum? Surely we should have people in this Chamber listening, at least, to the complaints that Members of all parties express about the common fisheries policy. What actually happens is that one person leaves this Chamber, meets people from other chambers, and ends up having to horse-trade on the common fisheries policy. Ultimately, as we have seen over the years, fishing has been the loser.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Thank you for inviting me to speak, Mr Deputy Speaker. I congratulate hon. Friends from across the political divide on this truly excellent motion. My constituency hosts one of the principal fishing ports in the south-west. Plymouth is a global leader in marine science and engineering research. Our fishing industry is very much part of that, and part of our maritime heritage. I am delighted that the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon), is working so hard to protect the industry’s interests in Europe.
Last month I received an extensive briefing from the Plymouth marine laboratory. People there explained to me how plankton—the staple diet of our fish—is being lost from our seas. When my hon. Friend is next in the south-west, I would be delighted if he came with me to meet people at that laboratory, and to see that excellent research facility.
My local commercial fishermen face real challenges. They are concerned about the marine protected areas, and the quality of evidence being offered to my hon. Friend by his statutory advisers at Natural England and the Marine Management Organisation. Two weeks ago, in an Adjournment debate secured by my hon. Friend the Member for South East Cornwall (Sheryll Murray), I raised my concerns about the lack of transparency in the evidence-gathering process. All MPAs should be based on sound evidence, and the research should be of the highest quality.
I thank the Minister for commissioning from Dr Graham-Bryce an independent review of the process used to gather the evidence. Dr Graham-Bryce confirmed in his July report that
“the process used…fell short of best practice in many respects.”
Will my hon. Friend tell the House what progress the Department has made in ensuring transparent, robust processes? Will he confirm that any effects of displacement from MPAs will be covered fully, and that the work will be conducted by professional personnel?
Another incredibly important issue is scallop fishing. The scallop-fishing industry is an important export market that brings much-needed revenue and jobs to the Plymouth travel-to-work area. I am told that it is worth about £20 million. Recently, for the first time, western waters area VII was closed to UK vessels for scallop fishing. The area has recently been reopened, but problems and challenges remain. I hear that the UK has been at risk of reaching the kilowatt-days limit since 2009, which is before my hon. Friend took up his post. Will he explain why local fishermen were only recently alerted to that? Will we make sure that they are looked after much better, and have much more notice, in future? They can certainly be flexible, but they cannot quite turn on a sixpence immediately.
I have never missed an opportunity to call on my hon. Friend to press for the UK’s fishing waters to come back under the UK’s control. I urge him to carry on pressing for that, and for reform of the EU fisheries policy. That is the only way to make sure that we conserve and protect our fishing stocks and our industry.
Ms Margaret Ritchie (South Down) (SDLP)
For my constituents in the fishing ports of Ardglass and Kilkeel, the reform of the common fisheries policy is a somewhat distant process. That is not to say that they do not recognise the importance of the subject, but in what has become for many a struggle to survive, the common fisheries policy and the accompanying rules and regulations are matters for policy development in Brussels. What is vital to those in the industry, their families and the wider community in both fishing towns are issues to do with quota allocations, limits on days at sea and fuel bills. Those are the immediate priority, and they require resolution.
We have heard from the Commission that decisions made now should fit in with the spirit of what the new common fisheries policy will deliver. Given the current proposals for fishing opportunities in 2012, it is easy to conclude that that does not bode well for the future. The Commission’s failure to address the flaws in the long-term cod recovery plan, and the intention of imposing more of the failed medicine prescribed in that plan, which involves ill-thought-out discard policies and an inability to recognise the significant contributions made by many of my constituents to ensuring sustainable fisheries in the Irish sea, do not appear to reflect a Commission willing to surrender its centralised decision-making powers and make provision for the devolution or transfer of power to the regions.
On the other hand, the European Commission argues that it is precisely its light touch with regard to the detail of the Green Paper that signals its intention to allow the regions to decide their own management regime, within the broad framework of rules in the new common fisheries policy. In that context, who are we to believe? Is it the individuals, including some in the Commission, who offer up European Union treaties as the reason why any meaningful decentralisation is illegal? Or it is those who yearn to be regarded as the voices of reason within the Commission, and ask for our trust? For me, so far the evidence suggests that it is the former, although I want it to be the latter. I welcome the fact that the Minister is to respond to the debate, and I suggest to him that it would be helpful for the House to learn the Government’s legal opinion regarding the degree of decentralisation of the common fisheries policy that is possible after the Lisbon treaty.
I say to the House, and the Minister in particular, that for my constituents involved in the fishing industry—onshore and offshore—in Ardglass and Kilkeel in South Down, the industry is vital to their livelihood and their families, and to the wider community. It is a multi-million-pound industry that has to survive. I ask the Minister, in the negotiations, to do all he can to ensure that the fishing industry in the Irish sea is sustained for this generation—and, hopefully, for future generations.
Neil Parish (Tiverton and Honiton) (Con)
I congratulate hon. Members from all parts of the House who helped to secure this debate, especially my hon. Friend the Member for South East Cornwall (Sheryll Murray), who takes a particular interest in fishing.
May I tell the Minister to be careful of the European Commission bearing gifts? He must look that gift horse in the mouth, as he will find that the proposals on devolving powers to regional advisory councils and others are short on detail. When the Select Committee on Environment, Food and Rural Affairs took evidence on this issue, the producer organisations for the south-west were convinced that there were no real powers coming from Brussels, and that things were going the other way. I know that the Minister fights hard for British interests, and I commend him for doing so, but we have to introduce much more local control over fishing so that the fishing industry and people going out to fish have the ownership of conservation measures and are keen to see them work. At the moment that is done far away in Brussels, and if fish are saved in one member state the fishermen there will be convinced that someone else from another member state will come along and take them away. However, there is no proposal to devolve those powers at present.
Sarah Newton (Truro and Falmouth) (Con)
My hon. Friend is making a good point. Does he agree that it is important to include in the balance the needs of recreational fishermen? In my constituency, for generations, people, including me, have enjoyed going out with their fathers and their grandfathers to catch fish to eat at home?
Neil Parish
My hon. Friend makes a good point. A year or two ago I went to Falmouth, where we were trying to secure more help for sea anglers, who play an important part in the fishing industry, not only by catching fish but by bringing people down to Falmouth, the west country and other parts of the United Kingdom, where they stay in hotels and so on. The value of a fish caught by an angler can be a great deal more than that of a fish caught by a professional fisherman. I know that the Minister takes that dimension very seriously.
I want to discuss the change in fishing gear and the 50:50 process in Devon, where discards have been reduced by 50%, which is good news. Until we ban discards and land everything that we catch, how do we know what there is in the seas? Up to 2 million tonnes of fish throughout the European Union are discarded every year, which is a huge waste of resources, and means that we never quite know what the stocks are.
I welcome the Commission’s proposal on landing fish that is not fit for human consumption, suggesting that it should be made into fishmeal to be fed to farmed fish. However, I question its proposal on the landing of fresh fish, which would be kept and distributed to poor people throughout Europe—not that I am against poor people throughout Europe and the UK having fish, but the idea that the Commission will organise that in every port in the EU, especially in the UK, fills me with horror. Some of those proposals need to be considered carefully.
Of course we should ban discards—I know that the Minister has done a great deal of work on this, as have celebrity chefs—but about 70% of the fish landed in Newlyn harbour goes straight in a lorry to Spain, because we do not eat that type of fish. The more fish we can eat in this country, the more we can keep the fish that we land.
We all feel strongly about the issue of the under 10 metre fleet, and the Minister is looking at ways of getting a better share for that fleet, which is essential to the south-west community, including Devon. It is key that those family-run boats have more fish to catch because, in the end, there is a limited amount of fish in the sea, and we must make sure that there are options for that fleet. I look forward to what the Minister can offer us, because in the end, the sea and fish resources have to be shared out between all the fishermen.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I do not think that we could make this debate more timely if we tried. Negotiations to reform the CFP are under way, and it is vital that the voices of the fishing communities that we represent are heard in this debate.
The challenges that we face need to be seen in the context of a common fisheries policy that has systematically damaged our marine ecosystem for 30 years. It has eroded the livelihoods of fishing communities and fishermen, and it has been applied inconsistently in different EU states. There is a growing consensus, even in the House, that a decentralised approach offers a better way forward than the one-size-fits-nobody approach that we have at the moment, as it would allow coastal states to develop workable solutions and, crucially, it would allow the expertise of fishing industry leaders and other local stakeholders to come to the fore.
In my view the reform process will stand or fall on the strength of the regionalisation proposals, but it is not clear how regionalisation will work in practice, given the treaty constraints raised by the hon. Member for South Down (Ms Ritchie). I hope that the Minister will spell out the mechanisms and processes that are under consideration and how they might be made fit for purpose, because there is a great deal at stake for our fishing communities.
There is a great deal to be learned from the experience of regional advisory councils on the value of long-term planning and the need to bring fishing industry representatives into the decision-making process. There is a great deal, too, that we can learn from the efforts of our fishermen in recent years to put the industry on an environmentally sustainable footing. The Scottish fleet has been at the forefront of efforts to push alternatives to discarding, but when we discuss discards it is crucial to remember that they are a direct consequence of the impositions put on fishermen by the failed CFP. No one gains from discards.
In that respect, the catch quota pilot schemes in Scotland and England have shown real potential. They were trialled to see how good they were at cutting discards and improving the economic viability of vessels, and they have been extremely effective. So far, however, only a relatively small number of vessels have been able to benefit from them. More boats could benefit, and I urge the Minister to prioritise the issue with our international partners, particularly the Norwegians and the European Commission, and drive it forward so that we can expand the catch quota system and build on the success of the model across the EU.
The Scottish fleet has been more successful than any other European fleet in ending discards. Catch quotas are only one factor in that success: the conservation credit scheme, using selective gear and real-time closures, is the thing that has really made a difference by improving the sustainability of our fisheries, as has longer-term planning and sound science. Too often, science has been used to justify policy making of dubious quality, and it has sometimes been used as a blunt instrument. It has been made to say what policy makers want it to say. There is now widespread recognition that good science and sound scientific data are beneficial to everyone, but if we want to build trust in scientific data we have to use them consistently. When the scientific data show that stocks are healthy and fish are plentiful, we need commensurate increases in total allowable catches. The forthcoming Council meeting could not be more timely, as we should not have more quota cuts if the science says that that is not necessary.
Consistency is required. I have concerns about transferable fishing concessions, as the Commission is now calling them.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I urge the hon. Gentleman to think before intervening. He has already made a speech, and we are running out of time. More Members have indicated that they wish to speak. It is up to the Member in charge but, to be honest. I would be disappointed if the hon. Gentleman intervened.
Dr Whiteford
I shall move on, Mr Hoyle.
Exaggerated claims have been made about the benefits of transferable quota schemes. Some are more successful than others. The proponents tend to ignore the unintended consequences, especially for fishing communities—a point that was made earlier—but the key factor is improved governance. I therefore urge the Minister to look carefully at that. I welcomed his comments last week on this, and I urge him to—
Mr Deputy Speaker
Order. We are struggling for time, and if Members shrink their speeches so that everyone who wishes to speak can do so, I shall be very happy.
Sheryll Murray (South East Cornwall) (Con)
I have cut my speech from about eight minutes to three or four, but I cannot fail to pay tribute to the Royal National Lifeboat Institution, the coastguard and the Fishermen’s Mission, as well as all the families of fishermen who have been lost or injured at sea this year.
I am on record saying that my ultimate goal for fisheries is to restore national control, but that debate is for another time, and for another Minister. Turning to the motion that we are debating, I shall deal first with regional management. There is no scope in the treaty to achieve the transfer of decision making to regional level. The National Federation of Fishermen’s Organisations has suggested that member states co-operating with regional advisory councils at sea area level to prepare multi-annual management plans could result in de facto regional management. Will the Minister please explore these alternative routes with the NFFO?
On the 12-mile limit, there is a case for ending the 40-year-old access rights. We see from the regulations that France has access to 15 areas within our territorial waters, Ireland to two areas, Germany to six, the Netherlands to three and Belgium to five for a variety of species, whereas the UK gains access to two areas within German waters and one area within French waters. This is not fair. I have even heard that some Belgian vessels working in the Bristol channel have changed from beam trawling to demersal twin rigging to work inside the 12-mile limit. Some of these could be Netherlands- owned Belgian-registered flag of convenience vessels. Exclusive access to the 12-mile limit could help the under-10 metre fleet.
I welcome the move to ban discards, but that is not as simple as it may seem. May I have an assurance from the Minister that he will work with the industry so that a proper solution can be found? Banning discards must not destabilise the market.
I shall briefly mention transferable fishing concessions. The UK, the Netherlands and Denmark already operate a similar system, which has been shown to control effort, but this was always preceded by decommissioning. Does the Minister agree that for a system of transferrable fishing concessions to work, there needs to be substantial decommissioning beforehand?
This is the only chance that we have to raise the 2012 quotas. I welcome the move by the Commission to abandon the 25% compulsory reduction in stock, but I must point out that this could exacerbate the annual horse trading that takes place.
Let me make one last point about the waters off my own constituency. Any reduction in cod effort in the Irish sea, the west of Scotland or the North sea could serve to displace effort into area VII e and g, and disadvantage Cornish fishermen.
Finally, in 1991 I was widely quoted as telling a previous fisheries Minister that British fishermen were brave, honourable, hard-working men who deserve respect. My words are as true today as they were when they were first spoken. I am pleased that we have a Minister who has already shown that he shares my sentiments. I wish him well in the negotiations, and I hope the whole House will support the motion today and give him our full backing for the important and difficult task that he will be engaged in over the coming months and years.
Jim Shannon (Strangford) (DUP)
One good thing that the CFP managed to do was to unite all the fishermen, fishing bodies and elected representatives in opposition to a policy that has reduced the ability to make a living on the sea and continues to squeeze life out of the fishing sector. There will be no mourning its loss by anyone I know or have come into contact with.
Much has been made of the issue of decentralising or regionalising fisheries management, which I agree would be a positive step forward. The hon. Member for Great Grimsby (Austin Mitchell) and others have mentioned that, but there are those in the European Commission who suggest that post-Lisbon it is illegal to decentralise any meaningful responsibilities to the regions. Therefore, although I fully support the motion and join in the call for the Government to ensure that particular provision is made for regional management, I too would like to hear what the Minister believes is legally possible and how we can achieve that collectively. What discussions are being held with the legal experts to ensure that what is tantalising uncertainty will become cold, hard reality?
Last Saturday I held an advice surgery in Portavogie. The fishermen come to meet me with their list of things that they want me to do every month. They are concerned about the increase in bureaucracy, the changes in the net mesh size, more paperwork, more cost, more policing, more monitoring and less fish catch. All those are key issues for the fishing industry.
Northern Ireland’s fishing industry has instituted measures that have been introduced voluntarily which have cut discards of haddock and whiting by over 60%, yet go unrecognised by the European Commission—nobody in the European Commission seems to have any idea what is going on. As with most other good points concerning the fishermen, if the scientists have not marked it in their book, it could not possibly be happening. If the 25% cuts go ahead, the white fish sector in Northern Ireland is finished for ever. I know the Minister will be batting for us in the meetings in December.
Locally, to address the issue of discards, our fisherman have had to incorporate various EU-legislated panels in their nets, which did little, if anything, for discard reduction, before they could deploy the gear designed specifically for use in the Irish sea. So it was true—the net designed by our fishermen, which would have reduced discards, was effectively outlawed by Europe. That concerns me.
On 10 November there was a meeting to impose emergency technical conservation measures in western waters. I am told that national Administrations will have little input into the process, which is politically driven by the EU’s Greek Fisheries Commissioner. Let us be honest: if we pair the word “Greek” with the words “Fisheries Commissioner”, we can understand why fishermen’s knees are knocking.
The industry, like fisheries managers, has as a goal the reduction of unwanted catches to a minimum, but the fishing industry will not be made greener by driving it into the red. We must be honest about what we are doing. In a little over four weeks the Minister will be leading the UK team at the EU’s annual December Fisheries Council. I urge him to support the industry at home.
Finally, the three-point plan for the Irish sea is clear. There should be a pause in further implementation of the long-term cod recovery plan. We should secure a rollover on the area VII nephrop TAC, which has been successfully managed for more than 40 years and remains stable, and we should seek an increase in the Irish sea herring quota, a stock which is at its largest for 18 years. It is time our fishermen saw some reward for the sacrifices they have made in the face of the EU’s ever-moving goalposts. I support the motion and urge the Minister to do his best for the fishermen in Northern Ireland, as I know he will.
Peter Aldous (Waveney) (Con)
I had intended to talk about discards and the local management of fisheries, but as the points that I would have raised have been well made by other Members, I shall move quickly to my final point—securing a fair deal for the under-10s.
At present the under-10 metre fleet is treated poorly—as a second-class citizen comprising 85% of the national fleet, but with access to only 4% of the UK quota. The fleet needs to be enfranchised and we must move away from the current system of quota control that lacks flexibility and transparency. The Minister has commendably put forward proposals for the future management of English fisheries. He is right to attempt to do what most of his predecessors have put in the “too difficult to tackle” category. I commend him for introducing the pilot scheme that will operate from January.
However, there is a real concern that a rights-based method of control is not in the best interests of the under-10s. The problem is that there is no easily defined starting reference point on which to base a fair allocation for them. There is also the worry that globally there is evidence that rights-based systems do not work and quickly result in the loss of quota for the inshore sector. The evidence from Denmark is contradictory at best.
I commend Jerry Percy, now fishing in Wales but originally from Lowestoft in my constituency, for responding constructively to the consultation and coming forward with NUTFA’s—the New Under Tens Fishermen’s Association—proposals, which provide a way forward for the under-10s. The phrase, “If you can’t beat them, join them” springs to mind, but he is right to propose a dedicated inshore producer organisation.
I conclude by saying that there are three considerations on which the future management of domestic fisheries should be built. First, there must be recognition that quota is public property. Secondly, we must replace the current system whereby no one appears to know who holds quota with a transparent system—a register of holdings. Finally, quota should be only in the hands of working fishermen.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I need to bring the Minister in at 2.50 pm. I call Kelvin Hopkins.
Kelvin Hopkins (Luton North) (Lab)
I shall be brief. Hon. Members will have seen the Library’s Parliamentary Office of Science and Technology note 357, citing a European Commission report that stated that 88% of European fish stocks were being fished beyond sustainable levels and 30% of stocks were close to collapse. I have been quoted before as saying that this is an unmitigated disaster and these figures prove it. The only effective solution is to seek the abolition of the common fisheries policy and return fisheries to member states. All talk of reform at this stage is mere tinkering at the margins.
I welcome the motion, but it does not go far enough. The UK already has opt-outs in a number of EU areas, such as the euro and Schengen, so surely we could negotiate a simple opt-out for the CFP. If we cannot, we should tell our European partners that we will withdraw unilaterally from it in, say, three years’ time. We have much more to gain than they have to lose, because our fisheries are among the largest in the EU and the restoration of a 200-mile limit, or a 50% limit where there are adjacent countries, would solve the problems for us, certainly for our fishermen and for our fish stocks.
I had wanted to say much more but realise that time is short. I urge the Minister to mention in his negotiations that Members of this House are calling for the abolition of the common fisheries policy and will do so until we get it.
Fiona O’Donnell (East Lothian) (Lab)
I begin by congratulating my hon. Friend the Member for Aberdeen North (Mr Doran) on securing the debate and all Members on both sides of the House who have spoken. I realise that many did not speak for as long as they had hoped to, but they all did the right thing by speaking up for their fishing communities. I pay particular tribute to the hon. Member for South East Cornwall (Sheryll Murray). Anyone who knows her even a little will not have been surprised by the courage and passion she has shown in the debate.
There is clearly significant cross-party support for a debate on fisheries before the EU Council meeting in December, and I welcome the opportunity to speak about it today. It is widely accepted that the current CFP has failed to achieve its objective of ensuring that the fishing industry is environmentally sustainable and economically viable for the benefit of society now and for future generations, as the hon. Member for South Down (Ms Ritchie) said.
My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) spoke about marine conservation zones and referred to a conservation crisis. I hope that the Minister will apologise to the House and to all the stakeholders who took part in the consultations to identify marine conservation zones for yet another target that DEFRA has not been met. It really is not good enough. On the day when we are appealing to stakeholders to take part and contribute—[Interruption.] The Minister asks me whether I really want to go there. It would perhaps have been easier to go there if the scientific advice that he claims supports the decision had been available at the time. I hope that he will at least give us an explanation when he comes to the Dispatch Box. I also thank the Environment, Food and Rural Affairs Committee for its contribution to the debate and look forward to its report.
Sheryll Murray
Does the hon. Lady not appreciate that getting marine conservation zones right for our fishing industry is far more important than meeting artificially set deadlines?
Fiona O’Donnell
Getting it right also requires political leadership, which has been sadly lacking from the Minister on this matter. What we have instead is more uncertainty and delay for the fishing sector, which is not welcome.
Food security has not featured heavily in the debate, so I want to take the opportunity to mention it. In Europe we are eating more fish than ever before. We have hit an historic peak and the projections for the next 30 years show that consumption will continue to rise. With the EU already importing two thirds of its fish and growing demand in big markets such as the US and China, the reforms must address the issue. I hope that the Minister will address that when he comes to the Dispatch Box.
Reform is long overdue, as all Members have said—it is one concern that unites the House. That is the hope, but as ever the devil will be in the detail and in how strongly the Government argue and negotiate for UK fisheries and use regionalisation to respond to the needs of fishing communities. We support the reform process and stress the need for a strong voice for the interests of UK fisheries and a clear move away from the top-down management and control that pervades the current CFP.
I have no hesitation in acknowledging the hard work and commitment of the Minister in engaging with the devolved Governments and with stakeholders. It is essential that the UK has the strongest possible voice in these negotiations. I read yesterday that the Secretary of State is bending over backwards in representing the interests of the UK in reform of the common agricultural policy, but where is she on CFP reform? Can the Minister assure the House that the Secretary of State is fully engaged and will perform similar political contortions to get the best possible deal for the UK on fisheries reform? It would also be helpful if he put more flesh on the bones of his negotiating position. Four months on from the publication of the Commission’s proposals, does he have a clear view of what he wants to come out of CFP reform, which of the proposals he agrees with, and which he wants to strengthen? I am aware that the impact assessment closed only last Thursday, but can he update us on its progress? Any information would be welcome.
I would like to turn to some of the key areas of the reforms set out by the Commission. Regionalisation is a key element of the new CFP, as the hon. Member for Tiverton and Honiton (Neil Parish) and my hon. Friend the Member for Great Grimsby (Austin Mitchell) mentioned. The current top-down approach has failed to achieve its objectives. Radical reform is necessary. The new CFP must ensure that fisheries management is dealt with at the most appropriate level. Without genuine decentralisation of fisheries management, it is difficult to imagine that sustainable management will be achieved. To that end, I welcome the proposals for multi-annual plans devised by member states, which the Commission intends as a central tool for ensuring that fish stocks are kept at sustainable levels and achieve maximum sustainable yields. It is vital that the Minister works closely with stakeholders in that process.
The collaborative approach will be particularly important in the plans to eliminate discards under the basic regulation within the multi-annual plans. In some EU fisheries 60% of catches are discarded. Discarding is a symptom of the poor management and practice of the current CFP. Much of the focus of the current proposals is on landing all catches of the main commercial species, but there is a real danger that discards overboard will become discards ashore.
Mr John Redwood (Wokingham) (Con)
Given that all previous Governments have not wanted that policy but failed to get rid of it, does the shadow Minister have any idea how the Minister will be able to do so?
Fiona O’Donnell
I am sure that the Minister will be glad to answer that question, but I will say that what we are seeing now is a phased-in approach on three levels, which gives us a real opportunity. I share concerns that Members have voiced in the debate on how we can achieve that, but that is not an excuse for a lack of political leadership in achieving the aim.
The Commission’s proposals place a legal duty on the UK to implement a tradeable system of quotas, known as transferrable fishing concessions, which some Members have touched on. They have raised concerns in other debates and argued that we should not end up with a situation in which a vast share of our concessions is in the hands of a few and multinational organisations can buy up the rights to our national resource. There is a proposal that member states should maintain an accurate register of holders of transferrable fishing concessions. Does the Minister support and welcome those plans for transparency, and what preparatory plans and assessments have been undertaken by his Department? Has he come to a view on the transfer of concessions to other member states?
My hon. Friend the Member for North Tyneside (Mrs Glindon) spoke about reaching maximum sustainable yield, and like her I have concerns about how we achieve that, given the nature of our mixed fisheries. The scale of the challenge must not again be an excuse for a lack of political will from the Government in driving forward to achieve maximum sustainable yields wherever possible by 2015. Ensuring that decisions are based on the best possible data and scientific advice requires Government agencies and the Government to work with fishermen, and as the hon. Member for Banff and Buchan (Dr Whiteford) mentioned, there is good practice in the pilots in Scotland to build on.
I am pleased that my hon. Friend the Member for Great Grimsby mentioned external waters. It is proposed that fishing partnership agreements will be replaced with sustainable fisheries agreements, which will put more emphasis on achieving the aims of the CFP outside EU waters. I welcome the new legal framework introduced by the Commission to ensure that European fishermen fish responsibly, but there is another concern relating to employment rights—perhaps not the Government’s strongest cause—which I would like to raise with the Minister. We know that on EU vessels there are many workers from developing countries and there is concern about their employment rights.
Fiona O’Donnell
I am afraid that I must press on, as I have little time remaining.
I want also to mention—last but by no means least—the under 10 metre fleet and how pleased I am that so many Members have made the case for it today. We wait to see how the pilots work, but I hope that the Minister will draw on the experience and skills of the co-operative and mutual movements in making them a success.
Fish are not territorial; they move across borders and seas, as do fishing fleets. As the Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), recently remarked, “Fish do not wear Union Jacks”; and nor do they wear Scottish saltires, and that is why we need a common fisheries policy and a single strong voice speaking up for UK fisheries.
The measures under discussion look set to form the biggest shake-up of the CFP in its history, and the Commission’s proposal shows a welcome shift from annual decision making to longer-term management plans and ecosystem-based decisions, with policies that pledge to raise all fish stocks to a sustainable level by 2015, to stop discarding, to offer improved consumer information on the sustainability of seafood and to impose rules that offer financial support to environmentally sustainable fisheries.
I wish the Minister and the Secretary of State well in their negotiations, and I commend the motion to the House.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
I commend the hon. Member for Aberdeen North (Mr Doran) and his colleagues on the all-party fisheries group for bringing this issue to the House, and the Backbench Business Committee for supporting it. This debate leads on well from our debate in May, which my hon. Friend the Member for Richmond Park (Zac Goldsmith) brought to the House, and if Members support the motion they will give me and the Government a mandate to continue our work to introduce some common-sense reform to a failed policy, and to take forward proposals that will greatly advantage the industry and our marine environment.
I should like to take this opportunity, however, to recall the six fishermen who have lost their lives this year in the line of their work at sea and in the harbour. We must remember the courage and sacrifice of individual fishermen, who put their lives in danger to bring food to our tables. Today is especially poignant, given our memory of Neil Murray, the husband of my hon. Friend the Member for South East Cornwall (Sheryll Murray), to whom many Members have referred, and I know that the House will wish to join me in sending sincere condolences to all those families and friends who have suffered losses.
I shall try to cover as many points as I possibly can. I shall not be able to cover them all, but at this vital time, as we move toward the December round and, of course, through the wider CFP reform negotiations, I remain absolutely willing to meet the all-party group of the hon. Member for Aberdeen North and any other groups of hon. Members.
The hon. Gentleman talked about the manifest failing of the common fisheries policy and found a ready audience in the House and, certainly, with me. He spoke about discards, as did several hon. Members, and it is important that our reforms on discards—I think that these were his words—reflect the reality of fishing. It is absolutely vital that we do so on a stock-by-stock, sea-basin and species-by-species basis and secure a workable result that delivers not just what the 700,000 people who signed up to the Fish Fight campaign want, but a sustainable solution for the fishing industry.
The hon. Gentleman spoke about the landing of black fish, and let the House be absolutely clear: those who land fish illegally are stealing fish from their fellow fishermen, so it is absolutely vital that we do all we can to crack down on that practice. He spoke also about regionalisation, as did a great many other Members, and about the welcome addition of the regional advisory councils in the 2002 reforms, and I absolutely agree that that is the basis on which we should talk, using a sea-basin approach to the management of our fisheries.
I want to see regionalisation work, but I concede the concerns, raised by hon. Members from all parties, that regionalisation in its current form could lead perversely to an increase in the Commission’s powers. That is not what we want, and we will push very hard to ensure that regionalisation is effectively that.
The hon. Gentleman and several others raised another point, about the proposed cuts in the December round to those stocks where there is data-deficiency. We won a very important argument in the Baltic round of negotiations last month, noting that the arbitrary 25% or 15% cuts on the basis of a lack of evidence was completely illogical. It results in more discards, in poverty and in people going out of business, and we won that point. It remains on the table for the December round, but the principle has been won and we will drive it home, because it is really important.
My hon. Friend the Member for Thirsk and Malton (Miss McIntosh), the Chair of the Environment, Food and Rural Affairs Committee, made a very important point when she spoke about her Committee’s desire to see more work on marketing less popular fish. DEFRA is doing that. We set up the “Fishing for the Markets” project, and among other things we are undertaking a land-all scheme in North Shields. Indeed, we have been doing so for a long time—for well over a year—and it is paying dividends. As Members have pointed out, 54% of discards are nothing to do with quotas; they are species that are not eaten in this country.
Richard Benyon
If my right hon. Friend will allow me, I will not, because I have only five minutes and a lot to get through.
My hon. Friend the Member for Thirsk and Malton mentioned the lobsters and brown crabs off the coast of her constituency, and I assure her that we are thinking again about that issue, because we want to ensure that we carry people with us and our measures work.
The hon. Member for Redcar (Ian Swales), my hon. Friends the Members for South East Cornwall, for Waveney (Peter Aldous) and others spoke about the under 10 metre plan, as did the hon. Member for East Lothian (Fiona O'Donnell), who spoke for the Opposition.
Richard Benyon
If my hon. Friend will forgive me, I really do not have time.
The important thing is that those reforms really work. A lot of work has gone into the issue, not just by this Government, I am first to concede, and the three pilots will be taken forward. My hon. Friend the Member for St Ives (Andrew George) said that there is enthusiasm in his constituency, as there is around the coast, to ensure that they work, and we are recruiting coastal liaison officers, who will assist people not only with managing their fishing opportunity or quota, but with marketing their catch and getting a better price for what they land.
Richard Benyon
I am sorry, but I shall not give way.
The hon. Member for North Ayrshire and Arran asked about marine conservation zones, and that represented the one note of discord in the debate, but I think that I can address it precisely. The hon. Member for East Lothian, who leads for the Opposition, asked me to take forward proposals on which there is no scientific basis or not enough of one to sustain them, but that position was not taken during the lengthy hours of debate, in Committee and on the Floor of the House, about provisions that became the Marine and Coastal Access Act 2009. Neither the Wildlife Trust nor anyone else took that position. What we will do—[Interruption]—and the hon. Lady would do well to listen to this—is obtain the evidence so that we can take forward an ecologically coherent network of marine conservation zones. I assure her that it will be something of which she can be proud—and so can we.
The hon. Member for North Antrim (Ian Paisley) spoke with concern about the displacement effect of scallops, and he is absolutely right: our management of one area of the seas will impact on another. I assure him that I take that issue very seriously.
We secured a review of the cod recovery plan a year ago, and I—naively perhaps—thought that it might have manifested itself by now, but unfortunately there will be dramatic cuts in days at sea unless we can improve it.
I am grateful to my hon. Friend the Member for Broxbourne (Mr Walker) for his praise. There is a terrifying hidden threat when Members are nice to Ministers, because they are saying, “If you fail, boy do you fail” but I take his comments at face value and absolutely assure him that recreational sea angling is key to what we want to do—not just because of the enjoyment that it provides, but because of its social and environmental benefits and what it does for coastal communities.
The hon. Member for Great Grimsby (Austin Mitchell) mentioned the 25% and 15% cut, but I hope he is reassured that we are going to fight it. On the point that my hon. Friend the Member for Richmond Park made, I intend to get more management control out to 200 miles. With the marine conservation zones, it is vital that we get buy-in from the European Union, otherwise we might have the perverse case of conservation zones that are just for fishermen from the United Kingdom, not for those on vessels that fish from other parts of the EU.
Member states must be able to work regionally to develop management plans and to implement measures that are appropriate to their fisheries, but currently the proposals lack crucial detail on how regionalisation will work. I understand that there are legal constraints to devolving power, particularly to the regional level, but proposals must enable nations fishing in the same areas—often for the same fish, as Members have said—to come together and agree on how to manage their fisheries.
This debate is, of course, also important for allowing us to set out clearly that our partnership with fishermen, both in terms of science and how government works, is vital. This is a critical time for fisheries management and I am sure that the House shares my commitment and enthusiasm to take this once in a decade opportunity to overcome the structural failings of the CFP. It is a long and challenging road ahead, but the UK has a major role to play in influencing the new policy and, with negotiations under way, progress is being made.
However, there is a lot more we can and must do to deliver the reformed CFP that we want. We need continued engagement with the European Commission, other members states and the European Parliament to exert maximum influence throughout the negotiations. We also need to continue working closely with NGOs, fisherman, retailers, processors and others with an interest in fisheries and the marine environment to secure a policy that will deliver a real change for the future of fisheries and the marine environment. I hope that hon. Members will continue to support the Government’s view that fundamental reform of the CFP is required. I fully support the motion.
Mr Doran
With the leave of the House, may I say that we have had an excellent debate? I am deeply sorry to those who were not able to contribute. We seem to have had half an hour taken off our debate because of the urgent question. In the 20 years or so I have been attending fisheries debates, this is the one in which there have been the most speakers, which clearly underlines the importance of the issue we have been discussing.
The message to the Minister is loud and clear: we support radical reform. That has come from all hon. Members’ contributions. The Minister can go to the negotiations in December and in 2012 in the full knowledge of that support. He can afford to be brave. The Commission has put very little meat on the bones, but that could be an opportunity. He can be brave and bring the radical reform that we all want to see.
Jim Shannon
On a point of order, Mr Deputy Speaker. Last year, this debate took place in Westminster Hall and lasted for three hours. The request was made to have the debate here in the House, to which everybody could contribute. Will the Deputy Speaker consider the process and the time scale, because we thought we were going to have a three-hour debate here as well?
Mr Deputy Speaker (Mr Lindsay Hoyle)
I understand the feeling running through the House today. A lot of Members wanted to contribute and the debate has had to be cut short. I am sure that that will be taken on board for future debates.
Question put and agreed to.
Resolved,
That this House considers that the Common Fisheries Policy has failed to achieve its key objective of producing a sustainable European fishery; welcomes the review of the policy by the European Commission; and urges Her Majesty’s Government to ensure that a revised Common Fisheries Policy makes particular provision for—
(a) a move away from a centralised management system to a system of regional management of fisheries involving all stakeholders and strengthening of the local management of the 12 mile limit;
(b) a manageable and practical scheme to eliminate the problem of discarded fish; and
(c) the replacement of the current system of annual quotas with a multi-annual system of management focussed on conserving fish stocks within a sustainable fishing industry, in particular to protect the viability of low impact fishing.
Royal Assent
Mr Deputy Speaker (Mr Lindsay Hoyle)
I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Localism Act 2011
Education Act 2011
Fuel Prices
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Deputy Speaker (Mr Lindsay Hoyle)
I have to tell the House that no amendments have been selected.
Robert Halfon (Harlow) (Con)
I beg to move,
That this House welcomes the 1p cut in fuel duty at the 2011 Budget, the abolition of the fuel tax escalator, the establishment of a fair fuel stabiliser and the Government’s acknowledgement that high petrol and diesel prices are a serious problem; notes that in the context of the Government’s efforts to tackle the deficit and put the public finances on a sustainable path, ensuring stable tax revenues is vital for sustainable growth; however, believes that high fuel prices are causing immense difficulties for small and medium-sized enterprises vital to economic recovery; further notes reports that some low-paid workers are paying a tenth of their income just to fill up the family car and that high fuel prices are particularly damaging for the road freight industry; considers that high rates of fuel duty may have led to lower tax revenues in recent years, after reports from leading motoring organisations suggested that fuel duty revenues were at least £1 billion lower in the first six months of 2011 compared with 2008; and calls on the Government to consider the effect that increased taxes on fuel will have on the economy, examine ways of working with industry to ensure that falls in oil prices are passed on to consumers, to take account of market competitiveness, and to consider the feasibility of a price stabilisation mechanism that would work alongside the fair fuel stabiliser to address fluctuations in the pump price.
I would not be here today without the 116 MPs from all parties who have signed the motion; the many other Members who have Government posts who would have liked to have signed it; the 110,000 people who signed our e-petition; The Sun newspaper’s “Keep it Down” campaign; the FairFuelUK group led by Quentin Willson, who is in the precincts of Westminster today and who has been one of the leading campaigners for lower petrol prices; and Peter Carroll supported by the Daily Express. I also want to thank the Backbench Business Committee and its excellent Chair, the hon. Member for North East Derbyshire (Natascha Engel). Above all, I want to thank my hon. Friend the Member for Cleethorpes (Martin Vickers) who has been instrumental in helping me to secure this debate and the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) who I am pleased will be summing up. I want to consider why fuel duty is the No. 1 issue in Britain. I also want to talk about the financial impact, the economic impact and, finally, the social impact.
With the agreement of FairFuelUK, today’s motion has been framed to unite the House and to win as much support as possible. As I said, that is reflected by the fact that 116 MPs from all parties have signed it so this has been successful. Last week, a poll in The Sun showed that 85% of people now believe that the duty rise in January should be cancelled. Other polls show that people are more concerned about petrol and diesel prices than anything else. We have the highest diesel price in Europe and one of the highest petrol prices. The Government’s figures show that sales of petrol and diesel have been falling since 2008 because fuel is becoming unaffordable.
Mr Lee Scott (Ilford North) (Con)
Does my hon. Friend agree that another problem is the difference in price of the same brand at different garages? At one garage on a motorway, we could see £1.50 a litre and, locally, we might see £1.29 a litre. Surely that is also a big problem.
Robert Halfon
I agree with my hon. Friend. Often if someone is driving up the M11—as I often do—or any other motorway, they are hostage to the various petrol stations. As I will say later, we need a market study into competitiveness.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
Does my hon. Friend agree that rural areas, such as Shropshire, where there are limited bus services, are adversely affected by these expensive prices?
Robert Halfon
Absolutely. I welcome the fact that the Government are going to introduce pilots in some rural areas. I know that people will talk more about that today, but I thank my hon. Friend for his remarks.
In real terms, adjusted for inflation, motoring fuel has never been this expensive, apart from twice in history during historic crises of supply—Suez in 1956 and the OPEC strike in 1973. The current situation is being driven by higher taxes and we have to be realistic and truthful about who pays the lion’s share of fuel duty: it is ordinary families driving to work, mums taking their children to school, small businesses that cannot afford to drive vans or lorries, and non-motorists who depend on buses and who are also being crushed by rocketing food prices as the cost of road haulage goes through the roof.
Tony Cunningham (Workington) (Lab)
The hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) mentioned restricted bus services. Can I tell him that in large parts of Cumbria and other rural areas, there simply are not any bus services and people have to use their cars?
Robert Halfon
The hon. Gentleman is absolutely right. I was pleased to bump into him on holiday in Cumbria not so long ago. In certain areas, we cannot simply say, “People should use public transport.” People depend on their cars.
Brandon Lewis (Great Yarmouth) (Con)
I thank my hon. Friend for being so generous with his time. He mentioned small businesses. Coach companies in places such as Great Yarmouth are also affected. That affects the local economy because current prices make it difficult for them to have the money to invest further in their business and create more jobs and bus services for people locally.
Robert Halfon
My hon. Friend is exactly right. Later, I will show that transport firms are closing because of the high cost of petrol and diesel. His constituents are lucky to have him to represent them. As I said, small businesses have no choice but to use their vans and lorries, and non-motorists depend on buses and are being crushed by rocketing food prices.
Robert Halfon
Let me just carry on for a bit.
The jobless, who are struggling to get off benefits and out of the poverty trap, cannot afford to drive to work. Fuel duty is a tax on hard-working and vulnerable Britons. I accept that the Government need to raise revenue, but let us at least be honest about who pays this tax. When fuel duty was first introduced in the 1920s, it was a third of its current level in real terms. However, as ever, tax increases have had the engine of a Rolls-Royce but the brakes of a lawnmower. The fuel tax escalator was introduced in 1993. Labour then accelerated it to 6% above inflation, and it was finally halted in November 2000, when massive fuel protests brought the country to a standstill. That was when petrol was just 80p a litre.
Ian Paisley (North Antrim) (DUP)
Like everyone else, I welcome this debate. Does the hon. Gentleman accept that rural areas and the regions of this nation—places such as Northern Ireland—have the lowest salaries per worker but the highest fuel costs? That means fuel pricing has a disproportionate impact on people living in those parts of the United Kingdom. Importantly, Government taxation policy is encouraging fuel fraud, fuel laundering and fuel smuggling, meaning that the Exchequer is losing hundreds of millions of pounds each year.
Robert Halfon
As ever, the hon. Gentleman hits the nail on the head. He sets out how fuel prices are creating a more unequal society.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
Further to the point raised by the hon. Member for North Antrim (Ian Paisley), does the hon. Gentleman agree that this disproportionate taxation is absolutely unjustifiable for people in rural areas who have no choice but to drive, particularly those in poorer households and small businesses?
Robert Halfon
I absolutely agree with the hon. Lady, and I thank her for coming with me to the Backbench Committee to try to get this debate.
Robert Halfon
A lot of people want to speak, so I do not want to take too many interventions.
The coalition Government abolished the fuel escalator—we welcome that—and cut duty by 1p. They also introduced a semi-stabiliser, which means that duty will rise quicker than inflation only if oil prices are low for a sustained period. Thanks to this, motorists will pay £274 less on fuel duty during this Parliament than if the previous Government had been re-elected and stuck with their plans—but for most people filling up the family car, our prices are still the most expensive in Europe. Even bankrupt socialist nations such as Spain now have lower rates of fuel tax than Britain.
Albert Owen (Ynys Môn) (Lab)
I congratulate the hon. Gentleman on securing this debate. Does he acknowledge that in January there was a hike in VAT that affected individual motorists right across the country?
Robert Halfon
I am glad that the hon. Gentleman raises that. The majority of businesses that are suffering from fuel prices get their VAT refunded. Sadly, as I mentioned, the last Labour Government increased the fuel escalator by 6% ahead of inflation. When we cut fuel taxes in the last Budget, Labour Members voted against it.
Research has shown that residents in my constituency of Harlow are now paying £42 million in fuel taxes every single year. However, tax is not the only problem. There are suggestions that some of the big oil companies are behaving like a cartel, with a stranglehold over the market. Brian Madderson of the Retail Motor Industry Federation says that the small forecourts that he represents are now forced to buy fuel from the big players at a set wholesale price on a daily basis rather than on weekly or monthly terms. There is no competition from wholesalers on these terms. The Enterprise Act 2002 gives Ministers powers to ask for an independent market study, and that is what we need.
Another factor is that fuel prices are quick to rise but sluggish in coming down.
Neil Parish (Tiverton and Honiton) (Con)
Devon has as many roads as the whole of Belgium. We have very low wages, and many rural people are affected by fuel prices, in particular. There is also the question of diesel for lorries. Everything that goes by lorry uses diesel, so what about reducing its price in the way that it has been in many other countries?
Robert Halfon
My hon. Friend will be pleased to know that I prefer Devon to Belgium. Of course, he is exactly right.
In the past four months, the price of oil has fallen by 8% but fuel prices have stayed static. Oil firms protest that they are forced to buy raw materials in dollars and that currency fluctuations have made price cuts impossible, but analysis shows that this is false. The cost of Brent crude has fallen by nearly 20% since April this year, and yet the dollar has just risen by 6%.
Robert Halfon
Let me carry on for a moment.
Big oil firms should not hide behind currency fluctuations. Statistics from the UK Petroleum Industry Association, which is funded by the major oil companies, show that in early 2010 the price of crude oil fell steadily, and yet retail fuel prices stayed high for months. Why was that? Ultimately, the only way to resolve this is through open-book accounting. If the big oil companies want to prove their innocence, why do not they volunteer to publish the financial data?
I want to turn to the financial impacts. Since 2008, our consumption of diesel and petrol has declined, and the Government forecast that it will continue to plummet next year.
Tim Farron
My hon. Friend is being unfathomably but characteristically generous with his time. He says that consumption has gone down. Does he agree that consumption in rural areas has probably gone down as far as it is going to? Demand for petrol is so inelastic because people have only one way of getting to work, and that is by driving, even if they are on the minimum wage. This is now no longer an issue of environmental concern—it is about social justice.
Robert Halfon
I am pleased to say that I was also in the constituency of my hon. Friend for my holidays; it is such a wonderful part of the world. There is absolutely no doubt that fuel prices are threatening rural communities and preventing people from meeting and gathering together. Petrol is now so astronomically expensive that it is driving people off the roads and costing the Exchequer money.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We are not meant to be waving around the Chamber, Mr Carmichael. I am sure that you have already caught Mr Halfon’s eye.
Neil Carmichael
I wanted to invite my hon. Friend to Stroud for his holidays, as well, if he has not already been. If he does come, he will see that we have a large number of road haulage firms that are very concerned about the price of diesel. Of course, they are having to pass that on to small and medium-sized firms, which, in turn, means difficulties for them. We need to understand that and give further strength to his case in this House.
Robert Halfon
My hon. Friend makes the point better than I have; I completely agree with him.
In the run-up to this debate, lots of people came to me and said, “We all want lower fuel duty, but how can we pay for it?” In fact, this is back to front. Evidence suggests that we are on the wrong side of the Laffer curve and that lower taxes might increase revenues. The Government’s own figures show that between January and June this year 1.7 billion fewer litres of petrol and diesel were sold compared with the first half of 2008. The AA has done its analysis and says that this equates to £1 billion in lost revenue for the Treasury. As the Chancellor said earlier this year, we must put fuel into the tank of the British economy, and cutting fuel tax is the way to do it. The economic impact of this is disastrous. The ex-Tesco boss, Sir Terry Leahy, told The Sun:
“I don’t think people fully appreciated what an oil shock we’ve had. Filling up the family car has gone up 70% in two years, causing what was a steady recovery to go sideways.”
As some of my hon. Friends have said, UK haulage companies are being driven out of business as they face higher taxes here than in nearby countries such as Ireland, with which we share a land border. To their credit, the Government have taken some action, and foreign lorry drivers are now charged up to £9 a day to use our roads. But still the insolvency firm SFP has said that three quarters of transport business failures in the last year have been caused by excessive fuel prices.
Fuel prices are adding to our dole queues. In 2006, when petrol was just 95p per litre, experts at the London School of Economics published research showing that unemployed workers who could not afford to drive or to commute to jobs stayed unemployed for longer. Since then, fuel prices have surged by 40%, despite the recession, and many workers have suffered from redundancy or wage freezes. The Government are working on a rural fuel duty rebate for remote outer islands such as the Outer Hebrides and elsewhere. This is welcome, but it will help only a tiny number of motorists.
Tessa Munt (Wells) (LD)
I should like to add my comments to those of my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron). I want particularly to draw attention to the fact that young people in my constituency, which is very rural, are limited in their choice of education because there are no bus services to speak of, and they are sorely tested in trying to get to their schools and colleges if they choose to use a school outside their area. This was highlighted even more by the fact that they brought transport—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. This is far too long an intervention. We want to get through a lot of Members who wish to speak. Some people are trying to intervene who wanted to catch my eye early on, and I will put them further down the list if that carries on. I want to get as many people in as possible.
Robert Halfon
I understand and agree with the sentiments expressed by my hon. Friend the Member for Wells (Tessa Munt). I am grateful to her for supporting the motion and for backing me at the Backbench Business Committee.
Robert Halfon
I will not give way again because of what Mr Deputy Speaker has just said. I apologise to my hon. Friend.
I will turn to the social impact. In Harlow, the cheapest unleaded petrol costs £1.33 per litre. Most Harlow motorists are therefore spending £1,700 a year just to fill their tanks. For most people, that is the equivalent of £2,200 of income before tax—a tenth of the average Harlow salary. I met a Harlow man called Mr Barry Metcalf a few weeks ago. He is self-employed and uses his own car to commute to West Ham for work. He spends nearly £60 a week on fuel and has seen a 35% increase in the past year or two. The Government define fuel poverty as spending a tenth of one’s income on heating bills. What about spending a tenth of one’s income just on driving to work?
Of that £1,700, about £1,000 is taxation. That is why fuel duty is like a second income tax. The Office for National Statistics confirmed yesterday that fuel duty is regressive and that the poorest are hit twice as hard as the richest. Fuel duty is not just about economics; it is an issue of social justice. That is especially true in rural communities, which are being destroyed by fuel prices.
In conclusion, there is a strong financial, economic and social case for cutting fuel taxes. That is why we urge the Government to scrap the planned 4p fuel duty increases that are scheduled for January and August 2012; to create a genuine price stabilisation mechanism that smoothes out fluctuations in the pump price; to pressurise the big oil companies to pass on cheaper oil to motorists; and to set up a commission to look at market competitiveness and radical ways of cutting fuel taxes in the long term. There is an ethical case too. We must show that tax cutting is a moral creed. We must show that this is a Government for the many, not for the few; a Government who cut taxes for millions of British people, not just for millionaires. I urge the Government to listen to the 116 MPs who have signed the motion; to the 110,000 people who have signed the FairFuelUK e-petition; and to the many millions of families, small businesses and pensioners who are struggling with fuel costs. I urge the House to support the motion.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I remind the House that there is a four-minute limit on speeches. Members should restrict the amount of time that they use wherever possible. Brevity will be helpful in this debate.
Mr Dave Watts (St Helens North) (Lab)
I am sorry that my amendment was not selected by Mr Speaker, because I believe that the motion is wishy-washy. I will explain the reasons for that later. My amendment went into some of the details that need to be addressed to help hard-working families.
Like many Members, about four or five weeks ago I started to receive letters from constituents on this issue, mainly prompted by the FairFuelUK campaign. At the time I wrote back to my constituents to tell them that I could not support the campaign because it called for tax cuts without saying how they would be paid for. I have little time for campaigns by the Daily Mail, the Daily Express, FairFuelUK or the TaxPayers Alliance, which are extreme right-wing organisations that promote tax cuts at the expense of public services.
However, I have now changed my mind after speaking to some of my constituents. There is no doubt in my mind that high fuel prices are having a tremendous impact on many low-paid and middle-paid families in my constituency. It is clear that the Government have no idea about the impact that high fuel prices are having on many constituents around the country. It is also clear that they have no understanding of the impact that wage freezes, high inflation, tax increases and high unemployment are having on the general public and the economy. Many of my constituents will have no pay increase for two years. Prices go up in the shops virtually every week. Heating and petrol prices are a particular problem for many of my constituents, and many of them are struggling to stay afloat.
The second reason I support the campaign is the decision by the Liberal Democrats and the Tories to raise VAT to 20%, which has had a massive impact on the cost of living and on my community. It has made the situation worse. We have now had a flatlining economy for 18 months and unemployment is at a 17-year high. Those who believe that the motion will address those issues are sadly mistaken. What we need is a complete review of economic policy in this country, taking on board something like the Labour plan for jobs and growth. Unlike Labour, the Government parties have no policies for growth. Labour’s policies of providing 100,000 jobs for young people, bringing forward investment in major projects and schools, a temporary reversal of the VAT rise—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We need to stick to fuel prices.
Mr Watts
I am sticking to them, because the people promoting the motion believe that it will address their constituents’ problems. We have heard many Members talking about the impact that high fuel prices are having on their constituencies. I know that to be the case, but it is only part of the problem that people face on a daily basis. We need a review. At the last election the Tories promised to cut fuel costs and to stabilise them in the immediate future and the long term.
Many families depend on cars to get themselves to work and to deliver their children to school—
Mark Garnier (Wyre Forest) (Con)
Speaking as somebody whose combined family mileage approaches 50,000 miles a year, and as a Member who represents a semi-rural constituency, I am acutely aware of the burden placed on local households by fuel prices. The cost of fuel does not just affect those who use cars; it affects everyone through food prices and prices on the high street, and it affects those who use public transport.
Some argue that if we want to move towards a more sustainable economy, high fuel prices will encourage a greener outlook. I do not disagree with that. However, when we are doing everything we can to improve our economic prospects, now is not the time to allow rising fuel prices to limit the mobility of our work force and hinder manufacturers and retailers through increased transport costs.
Mr Mark Spencer (Sherwood) (Con)
Does my hon. Friend agree that young people in particular feel the pressure of high fuel prices when they are trying to find their first job, which is often low paid? Does he also agree that the cost of insurance adds a burden to young people who have to get to and from employment?
Mark Garnier
My hon. Friend raises a very good point. The cost of car insurance is unbelievably high for young people. That is a particular problem when they are trying to get on the job ladder. We should certainly be doing everything we can to help young people.
The price of oil, as we have heard, is determined by commodity markets as well as by the sterling-dollar exchange rate. The only way to control pump prices is therefore through fuel duty. However, the country has incredibly little room for manoeuvre. I am convinced that helping economic growth through tax breaks works, especially when those tax breaks are targeted at specific areas such as fuel duty.
A cut in the price of fuel at the pump would reduce manufacturing and distribution costs, increase the mobility of our work force, increase household disposable income and lessen, overall, the headwind facing our economic recovery. Taking into account the work that we are trying to do in Kidderminster to promote advanced manufacturing and help boost the retail industry, I would welcome any reduction in costs, including fuel and transport costs. However, given where our economy is, any reduction in fuel revenue would have to be met by an increase in revenue elsewhere. Everything that the Government do has to be fiscally neutral. We simply do not have the resources available to cut fuel duty significantly without putting in jeopardy our low borrowing rates, which mean that we are in greater control of our own destiny than some of our European neighbours.
Although I support the efforts that the Government have already made in cutting 1p off the fuel duty in March and suspending the fuel duty escalator—a reduction of £1.9 billion in fuel duty—I urge them to see whether more can be done to help. The rising price of oil leads to increased profit for the oil companies from existing oilfields, as we have heard, and that extra profit gives the Government more opportunities to look again at tackling the high pump price of fuel, either through encouraging price reductions by the oil companies or through the tax system.
What has recently been causing a great deal of anguish among my constituents is that it costs more to run a car in Wyre Forest than in nearby Dudley. The average of 134.8p per litre of unleaded is about 6p higher than in Dudley, just 10 miles up the road. I have written to the petrol companies to see whether they can explain why they want my constituents to pay more for their petrol than people in nearby Dudley or Wolverhampton. Just one has taken the trouble to reply, to say that it has received my letter, but I have had no other replies, and certainly no explanation as yet.
It is right that we are debating the overall cost of fuel duty to our economy, and it is right that we are looking for ways of reducing that burden. However, I want the oil companies to explain why they see fit to charge my constituents in Wyre Forest more for their motoring. Can they justify subsidising more urban areas, not just in the black country but in the country as a whole, at the expense of our semi-rural and rural communities? Can they please let us all know when they intend to remove that rural surcharge on fuel?
Albert Owen (Ynys Môn) (Lab)
It is a pleasure to follow the hon. Member for Wyre Forest (Mark Garnier). I congratulate the hon. Member for Harlow (Robert Halfon) on securing the debate, and I was one of those who signed the motion and helped him to do so. I believe that the motion is a little broad and weak in its application, but I understand the reason for that—securing this debate.
I wish to talk about two main issues to do with how fuel prices hit peripheral areas—not just isolated communities but other areas on the periphery. They suffer from a double whammy of high energy costs—particularly for those who are off the grid and have to pay for heating oil and liquefied petroleum gas—and having to pay more for their petrol.
Road journeys are a necessity in communities such as the one that I represent. We are not talking about Chelsea tractors or luxury vehicles; we are talking about the necessity of getting from A to B in rural and semi-rural areas, where alternatives do not exist. If the hon. Member for Harlow were to come to my constituency, along with the hon. Member for Crewe and Nantwich (Mr Timpson) and others, he would see the price differences as he moved west from Chester to Anglesey. Only yesterday, the difference was 7p per litre of petrol, and far more for diesel. We need to do something about that.
I welcome any reduction in fuel duty, for which I have campaigned for many years, but the March reduction was wiped out by the January VAT increase. That was a real problem for real motorists. I understand what the hon. Member for Harlow said about businesses reclaiming VAT, but ordinary motorists were unable to reclaim that extra 2.5 percentage points.
Andrew Miller (Ellesmere Port and Neston) (Lab)
My hon. Friend knows that fuel prices go up when he travels westwards from the Chester area to his constituency. However, there are also people in urban areas who are trapped by fuel prices, such as the lady who came to see me at my last surgery, who has to travel to Liverpool for medical treatment and also has to travel regularly to Bolton to see her daughter, who is in a mental health hospital. Such people need support, and some of them live in urban areas. I am sure he would not want to exclude them.
Albert Owen
Sure—and I was not making a rural versus urban argument, I was talking about peripheral areas, particularly those far from refineries. Indeed, I want to talk about British refineries. Quite often, crude oil from the North sea is actually refined in faraway countries and brought back here, which adds cost. We therefore need to improve our refinery capacity in this country, to keep prices down.
I welcome the fact that the escalator has been done away with. It was introduced in 1993, perhaps for good reasons: it was felt that people could move from private to public transport. However, in semi-rural areas that is just not possible. That is why motorists have been enraged by the rise in the escalator. It went up, I think, by 5% under the Conservatives and 6% under Labour.
The Government could deal with VAT now. We can talk about the effect that a semi-stabiliser would have on North sea oil and the prices at the pump, but the Government can take measures now to reduce VAT to help motorists today. When the previous Government lowered VAT from 17.5% to 15%, fuel prices came down, helping to stimulate the economy. [Interruption.] They did. The hon. Member for Na h-Eileanan an Iar (Mr MacNeil) is laughing, but he needs to compare the prices. Prices came down and businesses were able to trade more. Individuals could also use their cars more, and not just for work but for leisure. [Interruption.] The hon. Gentleman says from a sedentary position that fuel duty went up, but the calculation shows an overall saving to the motorist at the pump, and that is what we are talking about. We can argue the complicated and technical aspects, but at the end of the day people want lower prices at the pump.
Toby Perkins (Chesterfield) (Lab)
Government Members may well be laughing too, but people in Chesterfield are not laughing, because they are paying through the nose. It is not just the general public who are affected by the current level of VAT. Small businesses up and down the country that are not VAT-registered and do not qualify to get their VAT back are paying huge amounts. We should not be laughing about this; we should be taking the point seriously.
Albert Owen
I am grateful to my hon. Friend. The Government need to look again at changing the rate, because it worked. If we in this House are serious about stimulating the economy, we need to look at such mechanisms—which can be used now—because the economy is flatlining.
Areas such as mine are paying extra for energy and fuel, and we need to do something about it. We had a debate the other week about energy prices, and we agreed that we needed to investigate what is called the “rocket and feathers” effect—that means that when prices go up they shoot up quickly, but when they come down they come down slowly—for domestic energy users and retailers. As the hon. Member for Harlow said, we also need to look at that effect in relation to crude oil prices, which also escalate quickly but come down slowly. We need some sort of commission to examine that mechanism.
The three points that I wanted to make today are as follows. We need to look at the differentials between areas close to refineries and those on the periphery. I understand that a rebate is being considered for remote islands, but, as has already been said, that does not help the many motorists around the coastal areas of the United Kingdom who are paying considerably more. I heard one of my colleagues from Northern Ireland say that Northern Ireland has higher prices, but according to the website that compares prices, Bangor in north Wales pays 3p or 4p a litre more than Bangor in Northern Ireland. I say good luck to the people who live in Bangor in Northern Ireland, but my constituents are paying 7p a litre more, week in week out, to trade, to do business, to move people and goods across the area and to take young children to amenities and leisure facilities of a night.
It is time the Government did something. I will back them when they do the right thing. They can consider whether more could be done on refineries. We need to look at transport costs and VAT, and we need to help the people today.
Mr Alan Reid (Argyll and Bute) (LD)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on his campaign to secure today’s debate.
I represent a sparsely populated constituency where long drives for essential business are common, so I am well aware of the impact of high fuel prices on individuals and businesses. For example, the price of fuel on some of the larger islands in my constituency, such as Mull and Islay, is typically about 15p to 20p a litre higher than in a city centre supermarket, and on the smaller islands, such as Coll and Colonsay, the price is usually about 30p a litre higher. It should be stressed that this is not because of profiteering by the local filling stations. The reasons for the higher prices are low turnover, compared with all the fixed costs that a rural filling station has to pay, and the costs of the distribution network. The costs of fuel distribution in the highlands and islands are very high, and I hope that the Office of Fair Trading will investigate them.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
I understand exactly what the hon. Gentleman is saying about Coll and Colonsay, but he will know that a newspaper on Coll and Colonsay costs the same as in the city centre. Should the Government not move towards more parity and equality between islands such as Coll and Colonsay—or, indeed, Na h-Eileanan an Iar—and city centres?
Mr Reid
I agree with the hon. Gentleman, and I hope that he will give credit to the Government for what they are doing on fuel duty on islands. The high price of fuel obviously has a great impact on people’s living standards, and makes it difficult for anyone trying to run a business on an island or in a remote rural area.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
My hon. Friend is making the important point, which has come out again and again in the debate, that people in remote rural areas in constituencies such as ours have no choice but to use a car. Does he agree that, in the long run, the Government will have to look at a system of variable road user pricing that is based on the choices available and that will enable essential users to pay a lower price?
Mr Reid
I certainly agree with my hon. Friend.
There has always been an environmental argument for higher fuel prices, in order to persuade people to use public transport rather than a car. That argument works fine in a city with plenty of bus and train services, but it falls down completely in a rural area, and particularly in a remote rural area such as Argyll and Bute, where in places there is a bus service only on school days. That might be okay for getting schoolteachers to and from work, but it is no good for anyone who needs to be at work outside school hours. The advantage of road user pricing would be that more could be charged for driving on city roads, with a much lower price for driving on a remote rural road. The problem with fuel duty is that it is a blunt instrument, in that the same level of duty is charged in all parts of the country, irrespective of whether public transport alternatives exist or not.
Mr Reid
I am sorry; I have used both my interventions.
To go back to the point made by the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), I was delighted when the Government announced their intention to pursue a pilot scheme whereby there will be a 5p a litre fuel duty discount for those on many of the country’s islands, including all those in my constituency. That reduction will go part of the way towards removing the price differential between fuel on the islands and fuel on the mainland. I hope that the scheme will be up and running soon, and I ask the Minister to give us an update at the end of the debate on how the negotiations are going in Europe. I am sure that the pilot scheme for the islands will be successful; if it is, I would like it to be extended to remote parts of the mainland. Operating a rural filling station is clearly not a profitable business these days. On the Kintyre peninsula, two of the five filling stations that the area had at the start of the year have closed.
There was a time when it could be argued that high fuel taxation was needed to discourage people from driving and polluting the environment, but market forces have already achieved that. The environmental argument for high fuel duty is not sustainable in the present circumstances. The high price is already discouraging people from driving, and they are making only journeys that are absolutely essential. Changing people’s behaviour is possible only when public transport alternatives are available, which is simply not the case in the highlands and islands.
I was also delighted when the Government abandoned Labour’s fuel duty escalator in the Budget, introducing the fuel duty stabiliser instead and bringing down the fuel duty because the price was so high. The Government have scheduled a fuel duty increase for January, because it was hoped at the time of the Budget that prices would have decreased by then. Prices show no sign of coming down, however, so I hope that the Government will listen to everyone who has signed the motion and spoken in the debate, and not proceed with the January fuel duty increase. The price of fuel adds to the price of everything in a rural area. The high cost is holding back economic recovery, so anything that the Government can do to bring the price down would be greatly welcomed in all rural parts of the country, and particularly in the highlands and islands.
Mr Russell Brown (Dumfries and Galloway) (Lab)
I too want to thank the hon. Member for Harlow (Robert Halfon) for securing the debate today. Like many others in the House, I have received a multitude of e-mails supporting the FairFuelUK campaign. Expectations in my constituency and right across the country are very high indeed, and I think that some people are expecting fuel prices to fall at 7 o’clock this evening, on the back of this debate. That is not going to happen, however, and I have had to make my constituents aware that the wording of the motion will not provide a quick fix to the problems that they are facing.
Let me quickly raise one or two issues. Crude oil today is less than $115 a barrel; in 2008, oil was $147 a barrel. We have to ask about market speculation and what it is doing to the price of fuel and thus to our constituents. Like others who have spoken this afternoon, I represent a rural area, where people often have off-grid heating. That means they suffer more, not just from having to fill up their vehicles.
Heather Wheeler (South Derbyshire) (Con)
Do people in the hon. Gentleman’s constituency suffer as we do in South Derbyshire from fuel thefts, which are common in rural areas? This applies to heating oil in particular, but transport companies also have their stocks of oil stolen regularly, and yet the police do not seem to be able to trace them.
Mr Brown
Dumfries and Galloway constabulary is first class at tracking and tracing thieves. The hon. Lady is absolutely right. We often face this situation when the value of the product rises and people try to steal heating oil and all the rest of it. People have to heat their homes, whether it be with heating oil or liquefied petroleum gas, and they also have to use their vehicles. In some locations, there is no other form of transport whatever. For some, there is a bus until 5 or 6 o’clock in the evening, which can be very difficult when people need to travel a distance to visit other family members or friends in hospital. A car is thus an absolute necessity for many households.
We are seeing price differentials and we are certainly seeing them with some supermarkets. I am not going to name the supermarkets on this occasion, as the last time I mentioned just the word “supermarkets”, two or three of them were quick to write to me to express their anger. Supermarkets drive the price in our local communities: prices tend to fix around what local supermarkets are bidding from their customers.
Here we are getting towards the back end of the year and we see another price differential between diesel and unleaded petrol. The difference has gone up from what it was in the late summer—about 2p or 3p a litre—to up to 6p, 7p or 8p a litre today. I recognise that lies partly with the refineries, but surely in this day and age more investment should be forthcoming so that the price differential does not create an even greater problem for those who have decided to drive diesel vehicles.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
My hon. Friend is setting out the complexity of this issue. Does he agree that, given that complexity, the simplest way to relieve the pressure on families and businesses would be temporarily to reverse the rise in VAT?
Mr Brown
My hon. Friend is exactly right, and I was about to come on to that point. That was the most significant single increase of the last 12 months. The increase in VAT drove up the price by some 3.2p a litre. We could give families that amount back if we took off the extra 2.5% on VAT. I ask the Economic Secretary to consider that measure temporarily. My other plea to her and her Treasury colleagues relates to future increases in the pipeline, as outlined in the Budget. I sincerely hope that she and her colleagues will listen to what we are saying this afternoon, as we do not want the proposed increases finding their way through. She should be bold, as the previous Government were bold. That Labour Government took some flak on duty increases, but there were 11 occasions over nine years when the Labour Government either froze, postponed or totally abandoned increases that were in the pipeline because the price of crude oil was rising.
I sincerely hope that some Department will speak to the oil companies about what we are witnessing. I come back to the speculation going on in the marketplace, which is hurting our constituents and hurting businesses, particularly small businesses. I realise that because those who are VAT-registered will get the VAT back, any reduction will not affect them, but others are being hurt very badly. Like other Members, perhaps, I know of people in remote areas who have discovered that travelling to work is becoming far too costly, and some of them are considering giving up work altogether.
Nia Griffith (Llanelli) (Lab)
Does my hon. Friend agree that immediate action is required to stimulate economic growth, and that we need a Government who will respond to what is happening?
Caroline Nokes (Romsey and Southampton North) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on the persistence that enabled him to secure this important debate.
The issue that we are discussing does not affect only rural constituencies. I am very conscious that 75% of the constituents who have contacted me come from the more urban parts of the constituency. The truth is that everyone is affected by rising fuel prices. Nevertheless, a disproportionate burden has been placed on those who live in rural areas. In parts of my constituency, people have no choice but to use their cars. Those who live in remote rural villages travel, on average, 10,000 miles a year just to gain access to essential services. One constituent told me, “This is not about luxury. I leave home for work before the first bus arrives in the morning, and I return long after the last one has gone back to the depot.” He has no choice whatsoever.
However, it is not only those who use their cars for their own journeys who are affected. We should also consider those who act as volunteer drivers and support charities, an increasing number of whom tell me that they are finding it too expensive to continue to help the community in that way. We should be thinking about ways of supporting them. Although they welcome the increase in the Chancellor’s approved mileage allowance, they say it is becoming increasingly difficult for them to play their part in helping the local community and reducing the burden on the local councils that would otherwise foot the bill.
John Hemming (Birmingham, Yardley) (LD)
Does my hon. Friend agree that because of the greater scarcity of fossil fuels, we should be aware of the costs of energy generally and in the long term, not just the short term?
Caroline Nokes
Absolutely. I hope that I shall have time to mention that at the end of my speech.
This is not just of concern to middle-income families who may be running two cars; it is a huge cost for low-income families who spend proportionally more of their incomes on fuel.
Nadine Dorries (Mid Bedfordshire) (Con)
I am sure my hon. Friend agrees that some of those low-income families are trying to establish their own businesses, or are already running small businesses such as, in my constituency, landscape gardening businesses. Winter is coming, and those people will now have to deal with the increase in fuel prices as well.
Caroline Nokes
That is indeed of real concern.
It is little wonder that so many of our constituents signed the e-petition—more than 110,000 members of the public called for the debate—and little wonder that the focus has been on the proportion of taxation in the current average price of £1.34 a litre.
Susan Elan Jones (Clwyd South) (Lab)
The hon. Lady is making a powerful speech. Could she make it even more powerful by saying that she would support a reversal of the increase in VAT on fuel?
Caroline Nokes
I am not convinced that that would be legal.
This morning I met representatives of the Freight Transport Association. They told me that high fuel prices have had a crippling effect on the logistics industry, whose business viability is determined by the price of fuel. Even the smallest rise makes a massive difference to them. A 5p increase in fuel duty adds another £2,350 to the annual price of running an articulated lorry, and the 3p increase that is planned for January would mean that a fleet of 50 vehicles would have to recover £37,000 more per year.
Caroline Nokes
I am sorry, but I do not think I have time to do so.
Profit margins for hauliers are incredibly tight, which makes haulage a very vulnerable business. In particular, fuel companies are not willing to extend credit terms, with the result that some payments are shrinking to as little as three days’ worth. As haulage firms are often not paid for work for up to 60 days, this is very much a hand-to-mouth industry, and companies can afford to think only as far as January. That hinders growth, investment and further recruitment.
There are about 100 Freight Transport Association members in my constituency, which is, of course, close to a deep-sea port. Fuel duty is lower on the continent, and £1,000-worth of diesel purchased on the continent can give over 200 extra miles to the driver. That has led to European businesses becoming more competitive than their UK counterparts, further heightening the pressure on domestic hauliers.
I acknowledge that we are facing a very difficult economic situation, and that we need to take robust steps to tackle the deficit, and I also know that the planned rises are less than the previous Government had intended. It is a relief to constituents that the Government delayed the scheduled tax rises and have introduced a fuel stabiliser but, like others supporting this motion, I want us to have a stabilisation mechanism under which duty rises and falls in response to fluctuations in the underlying price of oil.
As I am a member of the Environmental Audit Committee, it would be wrong of me not to mention the impact motorists and hauliers have on our nation’s carbon footprint, but fuel taxation is a blunt instrument and the reality is that people in rural areas are having to bear the additional cost as they often have to make the same essential journeys as before.
There are alternatives to petrol and diesel that are more environmentally friendly. One of them is biodiesel, produced from used cooking oil. Over the last year, 99 million litres of used cooking oil was collected from restaurants, food manufacturers and caterers. It is an entirely sustainable fuel derived from a waste product and devoid of some of the negative impacts traditionally associated with biofuels. Therefore, if taxation on fuel is partly about encouraging behavioural change, rather than just being about revenue raising, the Government should encourage the use of this fuel, rather than see it as another target for increasing duty. The removal of the 20p per litre duty differential on this type of fuel, which is an excellent source of green energy, sends entirely the wrong message.
Madam Deputy Speaker (Dawn Primarolo)
Order. Before I call the next speaker, may I remind Members that when they rise to intervene they are addressing the House, not their colleague behind them, and they are to turn around and face the Speaker’s Chair? That will stop them saying “you”, because they will see that they are addressing me, and what they have to say has nothing to do with me. We will also be able to hear the interventions, which I have not been able to do thus far.
Graeme Morrice (Livingston) (Lab)
I welcome the opportunity to speak in this debate, and I join other Members in paying tribute to the FairFuelUK campaign and the thousands of businesses and individuals who have backed it. I also pay tribute to the hon. Member for Harlow (Robert Halfon) for securing a debate on this important matter.
There can be no doubt that for many months now high fuel prices have been hitting families and businesses hard. Indeed, the October AA monthly fuel price report highlighted that summer prices—those from April to mid-October—compared with those in 2010 were on average 17.5p per litre higher for petrol and 19.7p higher for diesel. These high price increases are an important element of the wider financial squeeze that so many middle and low-income families are currently experiencing.
New AA research published yesterday also underlined the fact that less well-off drivers have suffered more since the price of fuel peaked earlier this year. The research shows that those cutting back on car use and/or other spending rose dramatically among those living on lower incomes. That is a very worrying development. The constituents who have contacted me over the last few weeks are absolutely clear about what they want: lower fuel duty and lower fuel prices at the pumps.
On fuel duty, the Conservatives in opposition said that pump prices would be benchmarked and allowed only to move by 5p per litre in either direction, in response to the changing price of oil. The limited fair fuel stabiliser plan announced in the Budget does not equate to what the public might expect from a fuel duty stabiliser. Commenting after the Budget announcement, Edmund King, the president of the AA, said:
“In effect it is a stabiliser on an escalator rather than a stabiliser on prices. It does not reduce prices. All it does is to reduce increases in duty.”
That is not what consumers were expecting and, as the motion states, it is time for the Government to look again at a “price stabilisation mechanism”.
When the Government increased VAT to 20% in January, they contributed to a further increase in fuel prices. It was the wrong tax at the wrong time, and it has kept petrol prices high and hit economic growth. I support the call, along with my Labour colleagues, for a temporary VAT cut to 17.5%, which would immediately bring the cost of fuel down by about 3p a litre.
We must also be grateful to my hon. Friend the Member for Bassetlaw (John Mann) for the excellent research that he published earlier this year on the political responsibility for increases in fuel duty. His revealing figures show that Conservative Governments have presided over increases in duty and VAT that have actually cost motorists twice as much as increases made by Labour Administrations. His figures demonstrate clearly that Labour Members have always been on the side of the ordinary motorist and the business person, whereas the Conservatives have been content to use fuel duties as a punitive means of raising revenue.
Toby Perkins
My hon. Friend has not only laid out the case with tremendous vision, but he has used some research, which is very welcome. Does he not think that the many people from Chesterfield who wrote to me supporting the fair fuel debate will be surprised to see how meek the motion is? They were expecting a hell of a lot more from this debate than what is to be voted on.
Graeme Morrice
I certainly agree with my hon. Friend that the public are expecting more, and we are not going to see any action unless the Government do something about this imminently.
Nick Smith (Blaenau Gwent) (Lab)
Filling up a commercial van costs £15 more now than it did last year. In January, I asked the Prime Minister about help for hauliers who are struggling with their fuel bills and he told me that the Government were looking at a discount for haulage firms. So far there has been little action on that. Does my hon. Friend agree that it is vital to support our truckers at this time?
Graeme Morrice
I entirely agree with my hon. Friend. Immediate action needs to be taken to ensure that our hauliers, and our commercial and transport businesses, are supported in this regard.
Graeme Morrice
No, I am going to carry on because I have taken some interventions and I do not have much time. I am coming to the conclusion of my speech. [Interruption.] We hear all the jeers from those on the Government Benches, but we must not forget that in 1993 it was a Conservative Government who introduced the fuel duty escalator. It is a Conservative fuel escalator, despite the protestations from Conservative Members. The families and businesses that have contacted all Members of this House on this issue need and expect action that will bring about a tangible reduction in the price of petrol and diesel, sooner rather than later. I hope that today’s debate will act as a stimulus for real change on this issue in the weeks and months ahead.
Rory Stewart (Penrith and The Border) (Con)
I join so many colleagues in congratulating my hon. Friend the Member for Harlow (Robert Halfon) on securing this fantastic debate. It is such a great example of how the Back-Bench system should operate. On that note, I will try to keep my speech as short as possible, limiting it to less than two minutes in order to let others speak.
I wish to make one very simple point on behalf of Cumbria: rural isolation is not just a question of sparse population; it is also about the terrible hollowing out of rural areas over the past 15 years. When I look out of my window at home, I see the disappearance of a school, a shop and a police station. In the past 15 years, we have lost 2,200 schools, 550 clinics and 150 police stations—that is across the nation, not across Cumbria.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
My hon. Friend will also be aware that 600 filling stations are closing every year, making the distance that rural inhabitants must travel to fill up their car even more demanding.
Rory Stewart
I thank my hon. Friend for making that point. The loss of pumps is an incredibly important issue, as is the loss of all the other services that are going such as pubs and shops. Currently, my neighbour, who has Parkinson’s disease, has to travel for two and a half hours to see a neurologist in Newcastle, and our schoolchildren are travelling further and further. There are things we can do to deal effectively with these problems, including with broadband and smart metering. It is a real disgrace that we have not sorted out smart metering. There is much better technology available. However, I should like to make a small plea for an extension, as rapidly as possible, of the 5p rebate that is currently offered in the highlands and islands to other sparsely populated areas of Britain.
Graham Jones (Hyndburn) (Lab)
I appreciate that the hon. Gentleman is making a rural point and that there are all sorts of issues about bridges and roads and the amount that goes into them, certainly in Lancashire. However, on his point about unfairness, was it not a previous Tory Minister who said, “When it doesn’t fit, get on your bike and get somewhere else”?
Rory Stewart
The hon. Gentleman will be astonished to discover that I disagree very strongly with the idea that the solution to problems of rural isolation is to “get on one’s bike and move somewhere else.” Our rural communities are the lifeblood of this country. When we think about our rural areas, we think about this country. Farming communities and all the other forms of rural community have a value that goes well beyond their economic value. We would be terribly sorry to lose them.
George Freeman (Mid Norfolk) (Con)
My hon. Friend is a passionate advocate of all things rural. Does he agree that the disproportionate impact of the tax on rural economies effectively makes it a tax on rural areas? It is a tax on the rural big society and on the rebalanced economy. If we are not careful, it will trigger a serious tax revolt in our rural communities.
Rory Stewart
I would never be able to speak with such eloquence as my hon. Friend, who makes a wonderful point. In order to fulfil my commitment and in honour of my hon. Friend the Member for Harlow and the Backbench Business Committee, I shall now sit down after making my plea: “5p for Cumbria.”
Mr Nigel Dodds (Belfast North) (DUP)
I am grateful to be taking part in the debate and I congratulate the hon. Member for Harlow (Robert Halfon) and his colleagues on having secured it. I also congratulate the many individuals who signed the e-petition and those others who managed to persuade the Backbench Business Committee to have this debate today.
This issue is one of our constituents’ major concerns; indeed, surveys have put it right at the top of that particular poll. The fact that households in the United Kingdom pay on average £677 a year purely on fuel duty illustrates the extent to which this issue affects ordinary working people and those in the poorer sectors of society. The poorest 20% are generally paying twice as much of their income on fuel duty as the richest 20%, which cannot be right. It is clear that the impact is not just on poorer people but on those in rural areas, as has so eloquently been pointed out already, and there is also a disproportionate impact on younger people. We had a debate in the House not long ago about car insurance and it is clear that younger people face a big premium for car insurance. As a result, they are finding it very difficult to stay mobile, to get jobs and to stay in employment.
Tessa Munt
Just two Fridays ago in the Youth Parliament debate, transport was identified as a main issue of concern for the Youth Council's campaigns over the next year. I hope that the Minister will take that into account when she responds to the debate.
Jim Shannon (Strangford) (DUP)
We are urging people to get into work, but people who live in rural areas in Strangford and who travel to my right hon. Friend’s constituency of Belfast North will find that a two-hour round trip costs £10 a day. That is £50 a week or £250 a month, which is a large chunk out of anyone’s wage packet. Does my right hon. Friend agree that a reduction in the price of diesel and petrol would help the unemployed to get a job and would help the employed to stay in work?
Mr Dodds
I am grateful to my hon. Friend, who makes a good point and illustrates it with the facts. I will come on to the situation in Northern Ireland, but it is clear that a car is a necessity, not a luxury, for many people in his constituency, so he makes a valid point.
The fact is that Northern Ireland has the highest-cost fuel of any region in the United Kingdom. The Automobile Association’s October fuel price report showed that of the 12 regions of the UK, Northern Ireland was, on average, the most expensive for unleaded petrol, diesel and super-unleaded. On top of that, its energy prices more generally are among the highest in the United Kingdom. I mentioned car insurance; Northern Ireland’s car insurance premiums are by far the highest in the United Kingdom. They are, on average, 83% more expensive per person than in the rest of the United Kingdom. Earlier, someone mentioned a double whammy for their constituents; in Northern Ireland, we have a severe triple whammy when it comes to energy, fuel prices and car insurance. Those issues have to be addressed. Some will have to be addressed by the devolved Administration, and there are Ministers working on the issues, here and at home, but there are also issues that can be addressed only at the level of the Westminster Government.
I hope that this debate will contribute to focusing the Government’s mind on this serious problem. Some 83% of people in Northern Ireland go to work by car, van or minibus, compared with only 70% in the rest of the United Kingdom. That shows the rural nature of much of Northern Ireland, and the fact that we have an underdeveloped public transport network; for example, large parts of the west of the Province are not served by the railway network. Clearly, the car is therefore a necessity there, not a luxury.
Claire Perry (Devizes) (Con)
The right hon. Gentleman and I normally talk about pig farming, but on this occasion, we can talk about the fact that in our very rural areas—particularly in my constituency of Devizes—the issue is the lack of competition among petrol stations and heating oil providers. None of us is on a grid; we are all reliant on heating oil. My area has similarities, in microcosm, with the right hon. Gentleman’s area.
Mr Dodds
Absolutely. We in Northern Ireland have a higher dependence on off-grid energy supplies than other places in the United Kingdom, but there are many similarities. We in Northern Ireland have a unique situation: we share a land border with the Irish Republic. As the per-litre price for petrol is, on average, 5p cheaper in the Irish Republic—15p a litre cheaper for diesel—we have the problem of fuel smuggling, which costs the Exchequer about £200 million to £300 million a year. One way to deal with that is for the Serious Organised Crime Agency and others to be tougher in tackling the problem, but there also needs to be an extension of the rural fuel pilots to Northern Ireland. That would not only reduce the cost of petrol and diesel and boost the economy, but increase the tax take for the Revenue. That has been clearly shown.
People in my constituency tell me all the time that they are appalled by massive oil company profits; BP had profits of £3.2 billion in the second quarter of this year. They want those profits passed on to people in difficulties. They are appalled by the difference in petrol prices across the Province. They cannot understand why supermarkets—I will mention supermarkets—in my constituency charge one price in one area and another elsewhere, simply because they can get away with it. People in my constituency want the planned fuel duty increases for next year to be scrapped to boost the economy, reduce costs and boost the tax take, which is only at 66% today, compared with 81% in 2001-02; that shows that the current policy of ramping up tax and fuel duty increases is not working for the Government. People in my constituency want the measure of inflation used to upgrade fuel prices changed from the retail prices index to the consumer prices index, which is used for everything else.
Martin Vickers (Cleethorpes) (Con)
This is a vital debate that affects every household in the country. As an officer of the all-party group on fair fuel for motorists and hauliers, I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing the debate, and the Backbench Business Committee on recognising its importance, particularly as the call for a debate was supported by an e-petition—a valuable resource that the Government must be congratulated on introducing. This is not an anti-Government motion; I and other hon. Members who have signed it recognise the reality of the situation. Let us be honest: it is not the ideal time to suggest anything that will reduce the Government’s income streams. We accept that we are in a financial black hole, but I pay tribute to the Government’s handling of the nation’s finances.
Damian Collins
Does my hon. Friend agree that something that would increase the amount in the nation’s coffers and would be good for the haulage industry is the introduction of a levy on foreign lorries, which do not pay any UK taxes? That is particularly galling for hauliers in my Kent constituency, who pass by them on our motorways, knowing that they have made no financial contribution to them at all.
Martin Vickers
I entirely agree with my hon. Friend. My constituency, which I shall come on to, is another centre for the road haulage industry. It, too, would welcome such a proposal.
Unemployment in my constituency is above the national average, and incomes are below the national average. Much of the available work is seasonal, and jobs can be many miles away. For many people, travel costs are compounded by the Humber bridge tolls, but that is a debate for another day. My constituency not only includes the premier resort on the east coast, also known as Cleethorpes, but the industrial and port complex on the Humber bank, including oil refineries, which are major employers. Indeed, they are good employers that provide the area with much of its wealth, but today I am speaking for my constituents, who are finding travel costs an increasing burden.
My constituency is a major centre for the road haulage industry, which, needless to say, suffers from the present levels of tax and duty on petrol and diesel. That, coupled with the fact that there are many small towns and villages in the vast, rural areas that are a feature of Lincolnshire, means that people do not live close to their place of work or to the essential services that they need to access. Walking and cycling are not realistic alternatives.
Motoring taxes are a greater burden for people living outside major conurbations. The Countryside Alliance has produced figures that show that people in rural areas spent £1.34 per week more in petrol at the beginning of this month than they did at the beginning of the year. They also draw attention to the fact that an-above average number of low-income groups in rural areas are car owners, and that accounts for a much greater proportion of their income. The people I represent think that paying 60% of the cost of a litre of petrol in tax and duty is too much—it is unfair. I have said before in the Chamber that it is a risky business for Governments to talk about fairness, because it is human nature for someone to regard as fair what is beneficial to them, but to regard something as unfair if it benefits someone else.
What people do regard as unfair is the fact that, based on the most recent figures available, £31 billion per annum is collected in tax and duty. Total annual expenditure by the Department for Transport is only £23 billion, so they regard that as unfair.
Richard Fuller (Bedford) (Con)
Does my hon. Friend agree that fairness is another reason people are animated by the debate, and support the motion? Too often under the previous Government, both with fuel duty and with council tax, people saw taxes go up year after year with no justification. It is the justification for the tax that is the source of the unfairness in this instance.
Martin Vickers
I entirely agree with my hon. Friend, who strengthens my case.
I was discussing fairness. In the two unitary authorities that cover northern Lincolnshire, it is estimated that constituents pay £167 million a year in motoring taxes, compared with the £95 million that is spent on roads infrastructure—again, that is clearly unfair.
Martin Vickers
I think that I am running out of time.
I said earlier that my constituency is a major centre for the road haulage industry. Most large commercial vehicles do about 8 miles per gallon. The planned increase due in January will add £15 a week to the running costs of a single vehicle, which will impact not only on individual businesses but on the supply chain. The Federation of Small Businesses has produced figures that detail the impact on businesses in that category.
I recognise, as I said earlier, that the Government must protect their income streams. There has been much talk in recent weeks about the 50p tax rate. That must be secondary to a reduction in car taxes. Very few people in my constituency can even dream of earning an income that would demand a 50p tax rate. I want to get rid of it as soon as possible, but now is not the time. Rural bus services have been reduced. The Government understand the impact on local people in northern constituencies in particular, and I urge them to act as soon as is practicable.
Robert Flello (Stoke-on-Trent South) (Lab)
I begin by adding my congratulations to the hon. Member for Harlow (Robert Halfon) on securing today’s extremely important debate, which is long overdue. We have heard today of double whammies and triple whammies. I shall not go for quadruple or quintuple whammies, but simply point out that the price of fuel pervades every aspect of what we do.
Whether in a rural community or in a heavily urbanised community such as Stoke-on-Trent, everything happens because of the cost of fuel—constituents going to the local shop and travelling there by car or constituents going to work by bus are all affected by the costs of fuel. The goods in the shops will have got there by means of the haulage industry, and some of those goods will have come from the farming community that produced them. At some level, the cost of fuel will be a component of the cost of every item on the shelves.
John Glen (Salisbury) (Con)
Does the hon. Gentleman agree that one group that is particularly vulnerable to the cost of fuel is the disabled? Those who are on Motability schemes, such as the constituent who contacted me, have no choice—they have to use their car and are therefore subject to the high cost of fuel.
Robert Flello
I could not agree more. All our poorest communities, whether they are people with any form of disability requiring a mobility allowance or special vehicles, or the poorest communities trying their best to get to work in difficult circumstances, are the people most heavily affected. The point was made earlier about who is paying the tax. It is being paid by the poorest. Who is not paying the tax? The oil companies and the speculators, who are taking the opportunity of the Arab spring and in some cases the continuing troubles to speculate a little more in the belief that the price will go up, until that becomes self-fulfilling. We end up with petrol prices continually going up, irrespective almost of fuel taxes. We should have a thorough root-and-branch review of that.
In the few minutes available to me, I want to turn my attention predominantly to the impact on the haulage industry and the associated industry, the road rescue services. I place on record my thanks to the Road Rescue Recovery Association, the Scottish Vehicle Recovery Association, the Road Haulage Association and the Freight Transport Association for the campaigns that they have been running, alongside the FairFuelUK campaign, and the pressure that they have been bringing to bear to get the issue debated seriously on the Floor of the House.
Lindsay Roy (Glenrothes) (Lab)
Does my hon. Friend agree that the high fuel duty is having a particularly damaging effect on the construction industry, which is going through a difficult time at present?
Robert Flello
Indeed. Every aspect of what we do is affected by the price of fuel, whether at the pumps, domestically, or at the heavy duty pumps that the haulage industry and other industries use. All sorts of other issues then come into play. For example, hauliers will be looking to ensure that their vehicles are running as efficiently as possible, yet on the European stage there is the possibility of a reduction in the height of trailers to 4 metres, which will have a negative impact on our haulage industry in the United Kingdom, exacerbate the problem of the price of fuel and increase the need for a cut in the fuel duty.
As has been said, a temporary VAT cut would be absolutely the right thing to do to secure an immediate impact for the domestic motorist, but something different is needed for the haulage industry in the longer term. A VAT cut would obviously have a wash-through effect, but we need a more serious change and a restructuring of the way the fuel costs of the industry and associated industries are met.
Other factors that impact on the haulage industry, such as London’s low emissions zone, also have a knock-on effect. I wish that Mayor Boris would respond to my letters and agree to meet to discuss the impact on the haulage and haulage recovery industries. It has a direct impact on fuel efficiency and keeping traffic moving on London’s streets if vehicles that should be on the streets helping to recover other vehicles and keep traffic flowing are prohibited from doing so. That will of course become a greater concern in the run-up to the Olympics.
Indeed, other aspects of the price of fuel will affect the membership organisations—I will not name them—that come out when their members break down by the side of the road, and those organisations’ costs are passed on to their members through the running costs of the yellow or orange vehicles that assist people at the roadside. That industry will also be hit by Green Flag’s terrible announcement that it is devastating the number of contractors who work for it. Some of them will unfortunately end up unemployed.
Nia Griffith
Does my hon. Friend recognise the real danger to haulage companies from foreign competition because of the price differentials?
Robert Flello
My hon. Friend makes her point well.
In the 20 seconds remaining, I wish to make two points. First, instead of cutting the top tax rate of 50p for high earners, we should be helping motorists. Secondly, we should be looking at ways of taxing the speculators and the people who are making a profit from the ordinary motorist and make them pay instead.
Andrew Griffiths (Burton) (Con)
It is a privilege to follow a fellow Staffordshire MP in this important debate. I would like to join the long line of hon. Members who have congratulated my hon. Friend the Member for Harlow (Robert Halfon) on securing this hugely important debate. Few debates that have taken place in this House have prompted such a response from my constituents, and I have received numerous letters, telephone calls and e-mails asking me to take part. I congratulate the Backbench Business Committee, in particular, because this is a perfect example of the kind of issue that matters to our constituents and that we should be talking about in this House.
The Prime Minister said a little while ago that he wanted our country to be a nation that makes things. Well, my constituency of Burton makes things. I am proud to say that it is the home of British beer. We make diggers, car seats and produce many other things. I am proud of that and am doing my best to maintain it for the future, but those industries are being particularly badly hit by the massive hike in fuel prices in recent months. I think that this is the Economic Secretary’s first opportunity to reply to a debate in the House and I am pleased to welcome her to her new post and wish her luck. I hope that she will have some positive things to say, because businesses in my constituency are saying that fuel price rises are having a real impact on their competitiveness.
Lilian Greenwood (Nottingham South) (Lab)
Does the hon. Gentleman agree that one of the industries that will be hardest hit by the increases in fuel duty is the bus industry? Does he agree that it will be hit not only by two increases in duty next year, but by the Government’s decision to cut 20% from the bus service operators grant? What impact does he think that will have on passengers?
Andrew Griffiths
I thank the hon. Lady for her intervention, but I am staggered by the collective amnesia on the Opposition Benches. I will gladly give way again if she can name a single time in all the years her party was in government when it cut fuel taxes.
Lilian Greenwood
My understanding is that on numerous occasions we decided not to press ahead with increases in fuel duty, and that had an enormous impact.
Andrew Griffiths
That point will not be lost on the House.
Something else that will not be lost on the House is the fact that this coalition Government took the bold steps to reduce fuel duty, to bring in the fair fuel stabiliser and to look at what we can do to help rural businesses. That is hugely important.
Andrew Griffiths
I will not give way again; I have given way a few times.
I must tell the House what motorists and families in my constituency tell me about the high price of fuel and how it is impacting on them. They, like the constituents of many right hon. and hon. Members, are suffering because they have had pay freezes and, in some cases, pay cuts, because of inflation, and because they have had to cope with large rises in electricity and gas prices. So spiralling fuel prices are starting to impact on their quality of life, and on their ability to survive in these difficult times.
More than one constituent has told me recently that they have had to choose between doing regular maintenance on their vehicle and filling it up every month to get to and from work and to pick up the kids. We have to look at the impact, because our constituents have only so much to spend on motoring every month and every year, and, if we do not do something to help them soon, they will have to find savings elsewhere, and that could affect road safety.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
The hon. Gentleman is making a good argument for bringing down fuel prices. Will he therefore support Labour’s plan to cut VAT?
Andrew Griffiths
I am sorry, but the hon. Lady’s argument would have more strength if her party had done something to cut fuel duty when it was in power.
In the few minutes that I have left, I will raise an issue of particular importance to my constituents.
Andrew Griffiths
I have given way a number of times; I will continue, if I may.
I represent Uttoxeter, a fine market town situated between Stoke and Derby. It has a race course, and it is a great place to live and to do business, but my constituents have to pay 6p a litre more for their fuel than motorists who live just a few miles down the road in Stoke and Derby, because—I believe—of the supermarkets’ power and their virtual monopoly on forecourts throughout the country.
I have already written to the Secretary of State for Business, Innovation and Skills, and he has advised me to write to the Office of Fair Trading to make an argument, but it is time we looked at how the supermarkets operate, because they have an anti-competitive effect on the market place and drive prices up. It will not be lost on colleagues that petrol companies quickly put up prices on the forecourt when there is an increase in the price of a barrel of oil, but are much slower to reduce them when the price of a barrel comes down. It is time that the supermarkets and the big petrol companies starting acting fairly towards our constituents, and I urge the Economic Secretary to do what she can to help.
Stewart Hosie (Dundee East) (SNP)
I congratulate the hon. Member for Harlow (Robert Halfon) on securing this debate. It is important, and he will know that in the previous Parliament there were a number of debates on the subject and a number of attempts in Finance Bills to introduce a fuel duty regulator—precisely the price stabilisation mechanism that he describes in the motion today.
Going back over such debates from the previous Parliament is quite instructive, because it tells us why there is such anger among the general public. In the report of a debate in 2005 we read that the price of unleaded petrol had risen to 86p a litre, a rise of 6p in six months; by 15 May 2008 it had gone up to something over £1.10 a litre; and by the time of the Finance Bill debate in July 2008 it averaged £1.32 a litre.
The underlying price is more intriguing, however. In 2005 Brent crude had risen to $60 a barrel, up a massive $10 on the previous year. By the time of the debate on the 2007 pre-Budget report it had risen to around $84 a barrel. In the run-up to the 2008 Budget the price was $94 a barrel. As someone mentioned earlier, prices crashed through and spiked at around $140 a barrel. This week the price has stabilised at $114 a barrel, but the price at the pump has risen inexorably.
From 86p a litre in 2005, diesel prices in Dundee this week had risen as high as 140p a litre—£6.40 a gallon. In the constituency of the Chief Secretary to the Treasury diesel was nearly 145p a litre—£6.60 a gallon. In Kirkwall, in the constituency of the Liberal Deputy Chief Whip, the right hon. Member for Orkney and Shetland (Mr Carmichael), diesel is 152p a litre—£6.90 gallon—and in the constituency of my hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil) it is almost £1.54 a litre. That is £7 a gallon, so it now costs £90 to fill up the tank of the average family saloon car. One can quickly see why people are so angry.
In our past debates, we heard about support outside Parliament from many organisations. The Road Haulage Association said:
“UK hauliers are struggling as never before to cope with continually rising fuel prices”.
Nothing has changed. The National Farmers Union and the Scottish Fishermen’s Federation said similar things. The Federation of Small Businesses said that it was
“behind the introduction of any mechanism which automatically uses extra tax revenues…to reduce prices at the pumps”.
And, my goodness, we need that now.
Sheryll Murray (South East Cornwall) (Con)
The hon. Gentleman mentioned the Scottish Fishermen’s Federation. Does he agree that many fishing vessels can reclaim the duty, so it does not affect them?
Stewart Hosie
Indeed, they can. What that organisation said at the time was:
“Transport is…a vital component of the fishing industry and cost increases there have applied even greater pressure, felt more acutely by the more remote fishing areas of the North West and the Northern Isles.”
I was paraphrasing what it said, as we have a whole four minutes each to speak. The point is that the response to spiralling costs under Labour was a fuel duty escalator, not a fuel duty stabiliser. The Labour Government set their face against every attempt to introduce a price stabilisation mechanism and, most cynically of all, increased duty to compensate for the temporary reduction in VAT.
The coalition’s response was to introduce the “fair fuel stabiliser”. That is what they called it. However, instead of using the windfall they already had from the North sea, they engaged in a smash-and-grab raid of £2 billion extra, with an increase in the supplementary charge. Hon. Members will remember that that led EnCore Oil to suggest that no tax would be paid on undeveloped and undiscovered oil. Other organisations said that very large projects were no longer viable because of the surprise Budget move. Chevron warned that the measure had
“shaken investor confidence to the core.”
Everyone was singing from the same hymn sheet except the Chancellor, who said that he
“did not expect investment to be damaged.”—[Official Report, 3 May 2011; Vol. 527, c. 604.]
Mr MacNeil
Does my hon. Friend agree that the Chancellor’s reckless smash-and-grab of North sea taxation has endangered investment in Scotland?
Stewart Hosie
It has indeed. There were stark and powerful warnings from the sector at the time that went on for a considerable time, and forced some limited changes to the regime. In the cold light of day, this month, the Aberdeen and Grampian chamber of commerce, along with others, carried out a survey that revealed that:
“50% of operators say Chancellor’s tax hike harmed North Sea investment.”
That policy did little to help the haulier and the motorist, but it did a great deal to damage the oil and gas sector.
Of course, it is not just the oil and gas sector and the traditional users of haulage who have been damaged. This week I have been contacted by a building company—a static business, not a haulage business—in my constituency, which told me that over the past few years, fuel as a proportion of its overheads has rocketed to 20%. We are not just causing inflation for goods that are moved, we are not just putting the haulage sector under pressure, we are not just making it difficult for people even to afford to go to work: the increasing cost of fuel as a proportion of overheads is driving other sectors to the wall too. These are very difficult times indeed.
This is only a Back-Bench debate—I am delighted that we have secured it—but the strength of feeling is very clear. There is now a body of opinion saying that constant high price rises, and the spikes in the price at the pump, are damaging the entire economy. I hope that the Minister is listening carefully to what has been said, and that action will be taken quickly.
Fiona Bruce (Congleton) (Con)
The high cost of fuel is impacting detrimentally on families, pensioners and businesses in my constituency, comprising as it does rural areas interspersed with market towns. I want to concentrate particularly on the small businesses in my constituency and the impact it is having on them.
In my constituency there are just a handful of large businesses, the largest of which employs just over 500 people, but there are 4,000 small businesses, which are therefore the engine of the local economy. For most of them, car travel and other vehicle travel is not an option but a necessity. As someone who has run a small business for 20 years, I know the reality behind the phrase “living on the margins”. That is a constant reality for many small businesses today. Because transport costs are a substantial component of their outgoings, fuel price rises have eroded those margins to almost unsustainable levels.
Stephen Lloyd (Eastbourne) (LD)
I share my hon. Friend’s concern about small businesses, and I recently found a statistic of which she may not be aware. Over the past year the UK’s 4.8 million small and medium-sized businesses have paid over £260 million more for fuel than they did only 12 months ago. Does she agree that sometimes the price of fuel becomes a step too far for small businesses?
Fiona Bruce
I entirely agree. Small businesses are being forced into an impossible predicament. Do they transfer the increased costs to their customers, do they lose their customers, or do they sacrifice the making of any profit just to keep going, which is not sustainable in the long term?
Esther McVey
We are talking about small businesses, which I too represent here today. In the Wirral there is the double whammy of not only increasing fuel prices but increasing toll prices. Marginal profit is completely wiped away when both of those are taken into account.
Fiona Bruce
My hon. Friend makes a very good point.
Let me give the House some specific examples of small businesses in my constituency that are suffering in that way. Smallwood Storage Ltd is a transport and storage business in Sandbach employing nine people. This week it told me:
“We need a level playing field, the price of fuel has become too high as a percentage of our overheads and is out of proportion with the rates we charge. As a small business, we do not have the power of larger companies and are being squeezed from all sides.”
Another local company, B Lakin Transport, a haulage businesses in Somerford employing 10 people, said:
“Increased fuel costs have knock-on effects on everything…as the price continues to creep up, customers will go elsewhere and even look to foreign drivers who can use cheaper fuel from the continent; avoiding the extortionate prices in Britain.”
It continued:
“A driver from Luxembourg can fill up their petrol tank in Luxembourg at a fraction of the cost here. In October 2011, 1000 litres of unleaded fuel would cost £1130 in Luxembourg compared to £1350 in the United Kingdom—that’s a saving of £220 each time the tank is filled.”
Let us remember that haulage competitors from Luxembourg can fill their tanks there, drive to the UK and then return to Luxembourg without having to fill up here at all. B Lakin Transport tells me:
“Combine this with the exemption from road tax for foreign drivers, and we are clearly at a significant disadvantage to these foreign drivers from the outset.”
Fiona Bruce
Through the motion, we are asking the Government to explore a number of ways in which they could assist small businesses, such as the ones that I am describing, with this predicament.
I will cite another business in Cheshire. It is not a small business, but it is an interesting comparison, because it is not a haulage company. Roberts Bakery is a large family business that produces bread in Northwich, just outside my constituency. Just yesterday, it informed me that the increase in fuel prices since last year alone has added £10,000 a week, or £500,000 a year, to its delivery costs. That is a serious additional overhead for such a family company.
The price of fuel is hindering such businesses from playing their essential role in the economic recovery and job creation that we so desperately need in this country. It is effectively pricing UK businesses off the road, driving people out of work, preventing companies from taking on and holding on to contracts, and fuelling further economic difficulties.
I signed up to support the motion, and I applaud all the other Members who have done so. I ask the Government to consider as a matter of urgency the impact that high fuel duty rates are having on local economies such as the one in my constituency, and to take action to address the issue accordingly.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
I congratulate the hon. Member for Harlow (Robert Halfon). I rise to speak on behalf of my constituents who have expressed to me their deeply held views about the rising cost of fuel.
People are angry in unprecedented numbers right across my constituency. The same is true throughout Britain. At my weekend surgeries there has been a steady flow of constituents who have not held back from telling me what causes the most hardship in their domestic finances. One of the dominant themes is rising petrol pump prices, which are a constant weekly battle for motorists.
Mr Donohoe
I understand that my right hon. Friend has an Asda in his constituency. Asda has introduced a price of 128.9p per litre across the whole nation. Surely if the Government are to do anything, it should be to reintroduce universal prices for petrol. He is old enough, as I am, to remember when we had those.
Mr Clarke
I am grateful to my hon. Friend. I have a big constituency, which stretches from Cumbernauld right through to Chryston, Coatbridge and Bellshill. The prices at Asda, welcome as they are, do not deal with the problems elsewhere.
These are truly worrying times. We have sluggish growth, rising unemployment, falling confidence in the manufacturing sector and depressed business confidence, so this is no time for complacency from the Government.
By September 2011 the cost of petrol had increased by 17.7% in a year. Our constituents are now paying petrol prices that are the highest in all 27 countries of the European Union. The only country in the world that seems to beat us on motoring taxes is Turkey.
Andrew Griffiths
The right hon. Gentleman is making the point that we are the most expensive country in Europe. Will he tell us when our prices became the highest in Europe?
Mr Clarke
We are where we are.
What the Chancellor does on fuel duty increases next year could make or break many people’s ability to go about their everyday lives, whether they are looking after their family or running a business. Failure by the Government to take effective action would mean winding the clock back on travel and mobility to a time when the freedom of the road was the preserve of the middle class. That cannot be right or fair. It would be a retrograde step for my constituents and would place their finances in an intolerable position.
With 80% of the population living in a car-owning household, a car is now a necessity, not a luxury. Unlike here in London, where vast transport links provide the necessary infrastructure for people to live their lives effectively, in constituencies such as mine people use and rely on their cars daily. Lower-income families, elderly people and those living in rural areas will be the most adversely affected and hit by rising fuel prices. In September, the then Secretary of State for Transport suggested that the railways had become a rich man’s toy. If that is the case, how can the Government’s policy, which is allowing exorbitant fuel prices literally to drive people off the roads, be justified?
Despite the Government’s seemingly generous gesture of a 1p cut in fuel duty, the public will simply not be fooled. The simultaneous increase of 2.5 percentage points in petrol tax that accompanied the VAT rise from 17.5% to 20% in January makes a mockery of the Government’s proposal. Their meagre attempt to placate motorists will benefit only the Treasury.
The fuel duty stabiliser has not shielded drivers from pump price volatility. That is why I believe that the Government need to take real urgent action now to help ease the squeeze on struggling families and kick-start the economy by temporarily reversing the VAT increase.
Karl Turner (Kingston upon Hull East) (Lab)
Will my right hon. Friend give way?
Mr Clarke
I am sorry, but I will not.
I know that when times are tough, tax revenues are seen as vital to the Treasury. My constituents know that, too, because most of them have been through tough times. However, let us be clear that those revenues cannot be loaded on to the backs of the poorest and most vulnerable in our society. It is they who are suffering most from rising fuel prices, and it is for them that the House ought to speak tonight.
Andrew Bingham (High Peak) (Con)
First, I add my congratulations to my hon. Friend the Member for Harlow (Robert Halfon), who is no longer in his place, not only on securing the debate but on the tenacious way he has pursued the issue relentlessly since his election last year.
I rise to support the motion and highlight the extra impact of fuel prices on High Peak. We have a large number of quarries, all of which produce the finest quality limestone in the country. That limestone has to be moved by road or rail, but predominantly by road. Quarries have to be where the stone is, so they cannot be moved around. I wish to tell the House a short tale about a constituent of mine, Mark Pearson, who operates his own wagon. He is a single operator who carries 17.5 tonnes of limestone with every load. In the past three years his fuel bill has increased from £1,600 a month to £3,200 a month. That huge increase in his overheads has to be borne by somebody, whether by Mark himself or the end users of the stone. Such overheads will restrict employment and business growth.
Karl Turner
The hon. Gentleman makes a powerful point on behalf of his constituent, who is clearly being squeezed. Did he bother to ask his constituent how much the increase in VAT is costing him?
Andrew Bingham
As I am sure the hon. Gentleman is aware, many businesses are registered for VAT and so will be able to reclaim it. It is the other tax that is the addition to their costs.
Andrew Bingham
If the hon. Gentleman had been paying attention, he would know that I said my constituent was an owner-operator with his own truck.
Andrew Percy
If that owner-operator did have employees, does my hon. Friend think that he would be happy with the six planned rises under Labour?
Andrew Percy
Does my hon. Friend think that those pretend employees would have been happy with the fact that the previous Labour Government escalated the fuel escalator?
Madam Deputy Speaker (Dawn Primarolo)
Order. We cannot have shouting across the Chamber. It is absolutely unacceptable, Mr Turner. We will have proper debate.
Andrew Bingham
My hon. Friend makes an excellent point, as he always does.
High Peak businesses suffer from rurality. We are midway between Sheffield, Manchester and Derby. The distances from our businesses’ customers and their suppliers mean that bringing goods in or sending them out costs more. My big concern is that as increases in fuel costs are borne more and more by local businesses, they will eventually say, “Enough is enough” and move out of the countryside into urban areas, further exacerbating the difference between the rural and urban economies.
We must remember that families are affected too. Although I understand that this debate is predominantly about fuel costs, I have to mention the increased energy costs that families are having to bear at the moment. I venture to suggest that High Peak is probably the coldest constituency in England. We have had a cricket match snowed off in Buxton in June, so we feel the winters, which are deeper and longer. That puts a further burden on family budgets.
Other Members have made the point that increased car use is required in rural areas. The proportion of households without a car in London is 43%, while in metropolitan areas it is 31%. In rural areas, only 10% of households do not have a motor vehicle. The reason is—
Andrew Bingham
No, I am going to move on, if the hon. Lady does not mind, because we are short of time. Also, I note what the former occupant of the Chair said about those making interventions not being called to speak, and I would not like to deprive the House of her speech later on.
When public transport links are not as good, a motor vehicle becomes a crucial part of family life. Someone spoke earlier about four-wheel drive vehicles. I understand the image they have as Chelsea tractors, but we should remember that sometimes four-wheel drive vehicles are vital in rural areas, as they are the only way that people can get about. As for public transport in my area, anyone who wanted to travel between the two major towns of Glossop and Buxton by bus would need to take a meandering route through New Mills, Whaley Bridge and Furness Vale. A car is the best way.
I believe that one day vehicle movements will perhaps fall slightly as communications improve, but broadband in rural areas is not as fast as it is in urban areas. That reduces people’s ability to work from home, which means that they have to travel to work, again putting more pressures on budgets. Cities and urban areas have faster broadband, better public transport and, more often than not, a better climate. In High Peak it is colder for longer, we have fewer public transport options and families and businesses need to travel further.
Given that I still have about one minute, I shall mention one further aspect. Local mountain rescue teams are staffed by volunteers who use vehicles, but also pay duty. I give hon. Members the image of a cold, snowy mountain in High Peak, with a sheep in one field and a human being in another, and a farmer going to save the sheep and a mountain rescue team going to rescue the human being. Which one pays less for fuel? The farmer will quite rightly use red diesel and pay no duty; the mountain rescue team, as a not-for-profit group of volunteers saving a human life, is faced with paying all the duty on that fuel. However, that is a debate for another day. I put my hon. Friend the Minister on notice that I keep putting in for a Westminster Hall debate on the issue. I hope that one day I may get lucky.
To sum up, rural areas face the challenges of using more fuel, and in High Peak we pay more.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
I, too, welcome this debate, which gives Members the opportunity to discuss an issue that is close to our constituents’ pockets. Like many others, my constituency is a mixture of the urban and the rural, and everyone is feeling the pressure at the pumps. Today’s motion was necessary to create the opportunity for this debate, but sadly it omits some crucial aspects. I am disappointed that the amendment in the name of my hon. Friend the Member for St Helens North (Mr Watts) was not selected, because it would have filled the debate with all the pertinent issues that we need to discuss.
During the speech by the hon. Member for Harlow (Robert Halfon), his bipartisan mask slipped as he made certain political points about the motion. My constituents want to know how the Government plan to tackle the high cost of fuel now. They also want to hear the longer-term plan to enable the country to become less dependent on petrol and diesel. The hon. Gentleman purports to be a champion of the consumer’s cause, but although this debate partly covers the issue, important facts have been left out and the bigger story remains untold.
John Peel said:
“I never make stupid mistakes. Only very, very clever ones.”
I wonder whether the hon. Gentleman has indulged in John Peel’s rhetoric in the motion. It contains faint praise for the Government’s austerity programme, yet that programme is a significant part of the problem, rather than part of the solution, because it goes too far and too fast. Also, there is no mention whatever of the whopping 20p a gallon on the price of fuel following the latest VAT rise.
Gareth Johnson (Dartford) (Con)
Is the hon. Gentleman aware that the Labour Government increased the cost of petrol no fewer than 12 times? We would not be having this debate if that had not happened.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
On that point, I was looking at the AA website this morning and comparing unleaded fuel prices in my region of the north between May 2006 and May 2010. Over that four-year period, the price increased by 24.2p, yet in just one year between May 2010 and May 2011, we have seen a 16p jump. That is two thirds of the increase that we saw under four years of a Labour Government.
Mr McCann
That gives us the real picture. I shall say more about that in a moment.
My constituents know that the price of oil is linked to the complexities of production, of exchange rates and of international stability, and that interference in one or more of those factors can cause prices to spiral out of control. They lose comprehension, however, when they see little evidence of price reductions when those factors are reversed. I remember well that in 2008 the price of oil was $147 a barrel and the price of unleaded in my town was £1.15. Yesterday, the price of oil was $114 a barrel, and the price of petrol £1.35.
Mr McCann
I have already taken a couple of interventions. If my hon. Friend does not mind, I want to allow a couple of other Members to get in.
We need some answers from the Minister to explain the phenomenon that I have just outlined, because the public just do not understand it. If this debate is to have any credibility, it also needs to address some other issues. I do not believe the hon. Member for Harlow’s simplistic proposal that reduced prices will bring in more income. If he believes that we need to reduce fuel duty, he must tell us where the resulting cuts would be made. Or would he advocate increasing other indirect taxation, or direct taxation, to fill the gap?
Robert Halfon
I thank the hon. Gentleman for giving way, and for signing the motion. As I mentioned earlier, the AA has proved that the Treasury is getting £1 billion less in revenue because of the high cost of petrol. People are unable to afford to drive their cars, and the Treasury is therefore losing money. If we cut taxes, more money will go into the Treasury.
Mr McCann
That is the same explanation that the hon. Gentleman offered before, but I still do not understand it. I signed the motion because it was the only way of getting an opportunity to discuss this issue, which is important for our constituents. I would have preferred that the amendment tabled by my hon. Friend the Member for St Helens North—[Interruption.] Well, the hon. Member for Harlow is going to have to tell us how he proposes to fill the gap if fuel duty is cut. And if he believes that the gap does not need to be filled and that we should be taxed less, he will have to tell us what public services would suffer as a result.
A former Member of this House was once described as a vacuum surrounded by charisma. I think we all hope that, at the end of the day, this debate will not become a vacuum surrounded by synthetic anger.
Mr Robin Walker (Worcester) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on his passionate speech, on his many campaigns on this issue and on securing this debate, and I welcome the huge interest and support across the House for it. The price of fuel remains, week in, week out, one of the most important and pressing issues raised by people in Worcester. It is an issue on which I, like many other hon. Members, am determined to see real progress.
I wholeheartedly support today’s motion and was proud to put my name to it as a long-term advocate of fuel price stabilisers. I want to put forward one more argument for action that has not been sufficiently covered in this debate and I want to raise a couple of further concerns, which I hope the Minister will be able to respond to in her reply.
As my hon. Friend the Member for Cleethorpes (Martin Vickers) set out and as the hon. Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) acknowledged, the Government have to pay attention to balancing the budget. The motion notes, however, that fuel duty revenues are lower now than they were in 2008 despite the fact that the level of taxation has increased since. In my view, that makes but understates the case for rethinking further increases. As I have argued in Westminster Hall debates, that case was admirably set out by the Office for Budget Responsibility when it first looked at, and then rejected, the idea of a fair fuel stabiliser. It concluded that although higher prices added to Government revenues in the short term, by increasing the take from fuel duty, their longer-term impact was to reduce Government revenue through the combination of discouraging usage and the wider negative impacts of high fuel costs on the economy. Although the OBR used this argument to reject the original plan for a stabiliser, I have said many times that the logic of its argument is that lower fuel duties could result in higher tax revenues, and I am happy to put that case again today.
We should look not only at the impact on fuel duty receipts themselves, substantial though they might be, but consider the effect of sky-high prices on business profits and thence corporation tax, their impact on the rate of inflation and thus the rate of increase in costs to Government in everything from wage inflation to benefit uprating. We should consider the depressing impact of high fuel costs on the whole economy and in particular on business and enterprise.
Mr Graham Stuart (Beverley and Holderness) (Con)
Does my hon. Friend agree that it is a central Conservative insight that we can lower the rate and up the take so that small companies in rural areas such as mine are able to do more work, earn more, pay more tax and keep the economy going?
Mark Pawsey (Rugby) (Con)
I would like to make the point that a lot of freight companies are filling up on the continent. If we reduced the amount of duty, particularly on diesel, they would be encouraged to fill up in the UK, which would bring additional revenue to the Exchequer.
Mr Walker
My hon. Friend brilliantly pre-empts my next point. I was going to say that most business users also use diesel, which, as my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) pointed out, is an important issue. One concern I particularly wanted to raise is the fact that diesel in this country is so much more expensive than anywhere else in Europe. I am told that this is not simply a matter of taxation as the rates of fuel duty are set equally for unleaded petrol and for diesel, but of refining capacity, which the hon. Member for Ynys Môn (Albert Owen), who is no longer in his place, also mentioned. Also relevant is the fact that North sea oil has traditionally been better suited for the production of unleaded petrol than for diesel. However, it does seem extraordinary that one can drive across most of Europe seeing prices for diesel consistently lower than those for unleaded, only to arrive in this country and find that there is a 7p differential in the other direction. In fact, we are one of the few countries that treats diesel and unleaded exactly the same for tax purposes, and many others, including France and Spain, tax diesel much less than we do.
Perhaps I should declare an interest at this point as the driver of a rather battered Y-registration diesel Golf with more than 150,000 miles on the clock, but my prime interest is that diesel tends to be the fuel of choice for business users and the freight and haulage industries. Its cost and the extent of taxation on it thus have a more direct impact on our economy and on prices in the shops than does unleaded petrol. Given the importance of diesel to business and the economy, will the Minister give special consideration to steps that could be taken to encourage the closure or reversal of that price differential, whether it be directly through fuel duty or indirectly through encouraging investment in refining capacity.
Like others, including my hon. Friend the Member for Wyre Forest (Mark Garnier), I am very concerned at the wide geographical price differentials within the UK. Although many have argued that this is a matter of rural sparsity and have put the case for a rural fuel derogation, which I accept, I want to put the case for urban centres such as Worcester that find themselves paying a higher price for fuel than their neighbours or competitors.
Mr Walker
I was just coming on to that, but I am very much in favour of the free market and want to encourage competition.
A glance at petrolprices.com shows the average price for diesel in Worcester yesterday was 142p compared to 139p in Cheltenham or 140p in Birmingham—two cities that it sits between. For the lowest priced unleaded, however, the differential increases from that 2p or 3p to a staggering 5p, with Worcester drivers paying 134p compared to 129p in Birmingham or Cheltenham. My constituents regularly raise concerns about that. They fear that there is insufficient competition affecting prices in Worcester. I realise that it is not the Minister’s job to set prices everywhere in the country, but I would appreciate a reassurance from her that the Government are determined to see active competition between retailers, and are doing all they can to stimulate it.
Other Members have mentioned supermarkets. I have been led to believe by constituents that Tesco and Sainsbury have changed their policies, and that rather than trying to be the lowest-price retailers of petrol in any given area, they now aim to sell at the average price for the area. Their purpose may be to prevent accusations of predatory pricing, but this is a very counter-productive way of doing that. I hope that the arrival of a new Asda store in Worcester next year will increase competition in the area.
Like many other Members, I am worried about the fact that constituents who need their cars to travel to work, and businesses in my constituency that need to use road transport, are paying too much for their fuel, and that too much of that cost consists of tax. I welcome the steps that the Government have already taken to protect our economy from the previous Government’s planned increases, the fact that fuel is 6p cheaper now than it would have been otherwise, and the Chancellor’s declaration that he wants to
“put fuel into the tank of the British economy.”—[Official Report, 23 March 2011; Vol. 525, c. 966.]
I believe that it has never been more important to do so, and I commend the motion to the House.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
I congratulate the hon. Member for Harlow (Robert Halfon) on securing the debate. I was pleased to sign the motion, and to support his application to the Backbench Business Committee.
I have seldom witnessed so much unanimity across the Chamber, and I think that that is a sign of the seriousness with which people out there view the fuel situation. For a long time, my party—along with our friends in the Scottish National party—has argued in favour of some form of stabiliser. We tabled amendments to Budget motions in 2005 and 2008, and received support from outside organisations including the Freight Transport Association, the Road Haulage Association, the Federation of Small Businesses, and farming unions such as the National Farmers Union and the Farmers’ Union of Wales. Along with our colleagues in the SNP, we held an Opposition day debate on this matter in February this year, before the 2011 Budget in March.
According to the FairFuelUK campaign, fuel accounts for over 40% of all business transport costs. It is clear that continuing rises in fuel costs as a direct result of fuel duty rises will increase the pressure on companies that are already struggling to stay afloat, or perhaps already going under.
Roger Williams (Brecon and Radnorshire) (LD)
I agree with the right hon. Gentleman about the effect of high fuel prices on businesses. One way in which businesses can deal with it is by upgrading their fleets so that their lorries become more fuel-efficient, but that will not be possible if the current proposal to phase out 100% capital allowances is implemented.
Mr Llwyd
It is difficult enough to find a bank that will provide the money in the first place—when it rains, the banks want their umbrellas back—but I take the hon. Gentleman’s point.
Of course, it is not just businesses that are suffering. Families have been gravely hit by the rise in fuel prices, and, as has already been pointed out, fuel duty has a disproportionate impact on those who are least able to pay it.
Mr Watts
Does the right hon. Gentleman agree that the difference between this and earlier fuel price rises is that the Government’s present policy is to impose a pay freeze, while also allowing inflation to run at 5%? Families are being hit by the treble whammy of higher prices, inflation, and the increased price of petrol and other fuels.
Mr Llwyd
That is true. As we heard earlier from the hon. Member for Ynys Môn (Albert Owen) and others, families are being squeezed from all directions. According to figures issued yesterday by the Office for National Statistics, the poorest 20% of households pay proportionally twice as much in duty as the better off.
In rural areas such as my constituency, the cost of running a car is as important to people as their food budgets, because they cannot do without a motor vehicle. We have proposed the introduction of a fair fuel duty regulator that would prevent unexpected spikes affecting people at the pump through increased VAT, which is then pocketed by the Treasury. We suggested that an estimate be made of the fuel price over the coming six months, showing the amount of revenue that the Government would expect to receive, and that a cap be imposed if the price reaches an upper limit and VAT and fuel duty be frozen until the end of that period. The Government would, of course, receive their predicted amount, rather than a windfall from consumers who are already squeezed by the price hikes and unable to spend their income elsewhere.
Unfortunately, the then Labour Government in London stubbornly ignored the problems of rising fuel prices, and the motions in 2005 and 2008 addressing the issue were defeated. The Conservatives abstained in the vote on the 2008 Finance Bill, but decided only a few weeks later—in July 2008—that they would support a fuel duty stabiliser, a move that we welcomed at the time, believing that if they came to office they would introduce a mechanism similar to that we had been advocating. Sadly, when the matter was put to the vote in February this year, the voting pattern was reversed: the Conservatives and Liberal Democrats voted down our motion, while the Labour party abstained. This ever-changing position on a fuel duty stabiliser shows the political expediency of many politicians.
In March 2011 the UK Government cut fuel tax by 1p per litre and delayed some future rises, but the VAT increases have had a significant impact on prices. We voted against that move in summer 2010 and recommended a cut in June this year. The stabiliser model that we suggested is not the one that has been introduced by the UK Government, and it is clear that the problem has not yet been solved. Two further duty rises are scheduled for 2012, which could have dire consequences for business and motorists alike, especially given the ongoing economic difficulties, which are not likely to be solved in the near future.
We therefore need an effective and fair fuel duty stabiliser, and we must also look at pricing in rural areas. We must address the amount of VAT being levied, too. Most importantly however—and moving away from the impact of future fuel duty price rises—we also need to invest in renewable energy alternatives, to reduce our reliance on oil and other fossil fuels.
I heard the arguments about so-called Chelsea tractors. Where I live such vehicles are an absolute necessity—although they are often more downmarket than most Chelsea tractors. When I drive around the country, I have to do so because I cannot take public transport. In London and other conurbations, including Cardiff and Swansea, there is a choice. We need to make that choice viable. We urgently need to address this issue.
Dr Sarah Wollaston (Totnes) (Con)
When Labour came to power in 1997, fuel duty stood at 36.8p per litre. When it left office in 2010, the price was more than 57p per litre—“a pain in the gas” as they say in the United States. I therefore welcome the early and decisive action taken by the Treasury in taking 1p off fuel duty, scrapping the duty escalator and delaying the 3p per litre rise. Many Members have today made a compelling case for why we now need the Treasury to go further, however.
I represent a large rural constituency in south Devon, and having a car in order to get to work or exercise choice in education is not a luxury; it is an absolute essential. My constituents spend a far greater proportion of their disposable income on fuel than those who live in cities.
A further 3p rise in January would not just hit householders, however; it would hit essential local businesses, too. Some 65% of all the UK’s groceries are delivered on retread tyres produced by a company in my constituency: Bandvulc tyres. It also exports to cities across Europe. It is a significant employer and wealth generator, but a 3p a litre rise in fuel duty would cost it an additional £24,000 a year, because it uses more than 500,000 litres of fuel a year. It is a family-run manufacturing business producing a sustainable product and creating local jobs. It wants to stay in Devon but knows that it would make economic sense to relocate part of its business to eastern Europe as a result of the fuel duty rise. There are similar examples among other businesses in my constituency.
Another very important sector in my constituency is tourism. I am talking about businesses such as Sharpham wines and cheeses, which attracts 7,500 tourists a year and employs up to 40 people. More importantly, it is in the top six wine producers in the UK and it is another wealth creator that exports across Europe. That business spoke of the ripple effects of a further rise in fuel duty, as did many others. A business that I visited last week, Palladium Building Supplies, told me of the knock-on effect to the entire building industry across south Devon that there would be if we go ahead with this rise.
Mel Stride (Central Devon) (Con)
My hon. Friend is making a powerful point about the effect on businesses. Does she accept that not only are these high fuel prices damaging businesses, but that, in turn, that is leading to less revenue to the Exchequer, because businesses are becoming less profitable?
Dr Wollaston
My hon. Friend makes an excellent point. This is about whether a 3p a litre increase will generate any income. Many of my constituents feel that it will lead to a drop in income, because they will simply not be able to fill up their cars.
Jo Swinson (East Dunbartonshire) (LD)
I agree with the hon. Lady’s case, which has been made by others, that the Government need to take account of the impact of the high price of fuel and the hurt it is causing to families, individuals and businesses. She mentions an important short-term measure, but does she agree that in the medium and long-term it is also important that the Government take action to reduce our dependency on oil, the price of which is only likely to rise, and look towards investment in things such as electric cars and charging infrastructure across the country, so that we will be set for the rest of the 21st century?
Dr Wollaston
My hon. Friend makes a good point. Indeed, one organic business in my constituency said that it would find a rise more acceptable if it could be seen directly as a green tax. Unfortunately, that is not the case. In my constituency, people will be badly hit by a double whammy, in that the bus service operators grant is set to be reduced by 20% next year. Just when they cannot afford to use their cars, people are being hit by a real threat to rural bus services, which are already at a critical level in south Devon. I hope that the Minister will set out what proportion of the rise will be set aside for green taxation purposes.
Priti Patel (Witham) (Con)
Does my hon. Friend agree that the points she is making show precisely why motorists need to see greater transparency in how fuel prices are determined? I am thinking, in particular, about the disparity between pump prices and the price of oil.
Dr Wollaston
I fully support that, because in south Devon those on the lowest incomes will be hardest hit. They will be spending yet more of their disposable income on fuel or they will be waiting at the side of a road for a bus service that can no longer afford to operate.
Fiona O'Donnell (East Lothian) (Lab)
I will keep my remarks brief and the reason for that makes me rise to my feet with a rather heavy heart. The reason is that I want to hear more Government Members speak, because they are playing us off the park today; their damning analysis of the Government’s lack of strategy for economic growth far exceeds the efforts of those of us on the Opposition Benches. It is almost incredible listening to them. We would not believe that they are in government; it is as if somebody else did this.
I would not go as far as to say that I rise to bury the motion, but I certainly do not rise to praise it. [Interruption.] These are the benefits of a classical, if comprehensive, education, which some Government Members may have had. I rise because many of my constituents have been in touch with me in support of this campaign. I have to say that I have gone back to them trying to dampen down their expectations. What we actually have before us reminds me of when my children have done something really bad and they are working up to telling me. They say, “Mummy, I love you. Mummy, your hair looks really nice today. Mummy, I have been really good” and that seems to be the approach of the motion. It is almost simpering in the way in which it cosies up to the Government, praising them for action which it then goes on to identify has clearly failed in its objectives. These are objectives that my constituents want. I have been back to my constituents and pointed out the strong language of this motion, which acknowledges the problem, “notes” there is a wee bit of a problem and “further notes” the problem. It says that all this will be considered and, best of all, says that all this is being done in the name of “sustainable growth”. I presume that means keeping it low, with no growth at all, because that is what the Government are delivering.
Fiona O'Donnell
I shall not give way at this point because I am keen to make progress and allow others to contribute.
My constituency is largely rural and my constituents rely heavily on their cars not just to get to the shops but to engage in the big society—to take their daughters to Brownies and their sons to Scouts, or their sons to Brownies and their daughters to Scouts. They go out to reach the cheaper petrol at Asda up at Dunbar. That is the reality of living in East Lothian. My constituents suffer a double whammy and I find it really hard to listen to the hon. Member for Dundee East (Stewart Hosie) going on about what this Government have not done, because another Government could do something to make things easier for my constituents to get around East Lothian—the Scottish National party Government in Holyrood could re-regulate the buses.
Fiona O'Donnell
No I will not. The hon. Gentleman should sit down and listen to what I am going to say before being so eager to get to his feet. He should let me finish this point.
The Scottish Government could have re-regulated the buses so that we could have a service in East Lothian that meets the needs of my constituents, instead of meeting the party election funding of the SNP Government. They have not taken advantage of that option, so in East Lothian we have the double whammy of rising prices at the pumps and a poor local bus service that is being further cut by an SNP council.
Mr David Hamilton (Midlothian) (Lab)
As my hon. Friend’s neighbour in Midlothian, and given that 56% of our people travel to work in Edinburgh every day, may I say that bus availability is a really big issue? The re-regulation of bus services is key, but the only people who can do that are that lot over there on the SNP Benches.
Fiona O'Donnell
My hon. Friend and neighbour is absolutely right. The SNP should stop talking about what they want other people to do and which other powers they want and instead start using the powers they have.
Mr MacNeil
The hon. Lady has to ask herself whether she wants the Conservative Government here in Westminster to have taxation powers over Scotland or whether she wants Scotland’s powers back in Scotland at the Scottish Parliament.
Fiona O'Donnell
That is not the only choice. I want a UK Government who do the best for all the people in the UK—not just those in the Western Isles, Glasgow and Edinburgh, but those in Liverpool and London too. I note that the hon. Gentleman did not say why his party in Holyrood did not support a private Member’s Bill to re-regulate the buses. He should stop whingeing about what he cannot do and start doing something with the powers he has.
Fiona O'Donnell
No; the last interruption was not very satisfactory—I am not taking another risk.
I find myself in a familiar situation. I spoke in a similar debate not very long ago about a haulage company in East Lothian that was about to go bust because of fuel prices. I remember an hon. Member from somewhere on the Government Benches saying something about claiming back VAT. Unfortunately, I did not realise at that time that the company was not even registered for VAT, so that was not an option. The company has gone out of business and those jobs have gone. Others in East Lothian are trying to find work but the reality is that those jobs as a rule are not in the county—they are in Edinburgh. Given the poor local provision of public transport, they are forced to take to their cars. That is a real problem for making work pay for my constituents. If the Government are serious about getting people back to work they have to enable rural communities.
I am sorry that the hon. Member for Penrith and The Border (Rory Stewart) is not here. His contribution was not so much a speech as a postcard from some rural fantasy that he sent to the House. He spoke about how important this debate and this motion are, but I remember the last time there was a debate on this issue in which the will of the House was unanimously expressed—
George Eustice (Camborne and Redruth) (Con)
I welcome this debate, and I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing it. I also welcome some of the very good actions that the Government have taken to date, most notably the suspension of the fuel duty escalator, the cut in fuel duty, and the rural rebate that is being considered, which we hope will be piloted in the Isles of Scilly, not far from my constituency. I agree with the many Members who have said today that fuel tax is a regressive tax that tends to hit the poorest, and rural areas, hardest.
Sheila Gilmore (Edinburgh East) (Lab)
I find interesting the discovery by Government Members, including the hon. Gentleman, that taxes on spending are regressive. When that argument was about the increase in VAT, it seemed to be ignored, so has he changed his mind on VAT, too?
George Eustice
The issue of VAT has been covered widely by others. I would just say that I think all Government Members regret the fact that the Labour party made such a pig’s ear of running the economy that we had a £150 billion black hole in our finances.
I would like to focus on a separate but linked fact: fuel tax has a disproportionate impact on areas that are geographically peripheral. I come from Cornwall, and there is no doubt that fuel tax is a regressive tax that hits Cornish businesses far harder than businesses in the main population centres.
Glyn Davies (Montgomeryshire) (Con)
I am grateful to my hon. Friend for giving way, because the issue is particularly important in my constituency too. High fuel prices act as an anti-regional-development policy. Not only are they a cost on business, but they discourage business from locating in certain places. They work very much against the thread of Government policy in other areas.
George Eustice
I completely agree. That will be the main thrust of what I say. I was in business in Cornwall; indeed, on many occasions, I drove a lorry that took our excellent Cornish strawberries to Birmingham. The reality is that Cornwall is 300 miles away from London, and 260 miles away from Birmingham. We have to drive the best part of 100 miles just to get to the seat of my hon. Friend the Member for Totnes (Dr Wollaston). Let us look at how that translates into tax. A typical 16-tonne lorry doing a round trip to London would incur, in total, tax of £220, just on that one trip. Let us compare that with a lorry driving from Birmingham to London: the tax taken for that would be only £80. A similar operation in Cornwall has to pay three times more tax. That is unfair, and it is felt acutely by businesses in the primary sector, particularly in areas such as fishing and farming, in which Cornwall has a comparative advantage.
If we are serious about developing a regional policy, we have to help the most peripheral regions to develop industries and jobs in the sectors in which they have a comparative advantage. The irony is that places such as Cornwall have EU grants to help develop businesses in the areas where we have strengths, which include food processing, farming, and green energy. The regional growth fund has a similar purpose. We are undermining those efforts by having a regressive tax through high fuel duties. The impact is to compound the single most important disadvantage that the regions have, which is their distance from the market. As I say, that is particularly noticeable in Cornwall. Our climate gives us a comparative advantage; we grow potatoes early, and can grow cauliflowers in winter—bulky commodities that cost a lot to transport. Of course, with our marine resources, we have fishing, too.
I want to finish with a suggestion on how we might go forward. Alongside the rural rebate, which is due to be piloted, we should consider, perhaps as a strand of regional policy, some kind of rebate for businesses in peripheral regions such as Cornwall. It should not be beyond the wit of man to devise such a scheme. To be eligible, a business would have to be located in a county such as Cornwall. The rebate would be available only on fuel supplies delivered to an address in the area. As for how we would give the rebate, we have heard that most businesses that run a transport fleet would be VAT-registered, so it would be possible to have some kind of fuel duty rebate that runs alongside the VAT return. I know that none of these things is easy; it would take some work to develop the detail of such a policy, but it would be an interesting idea to look at. It could be a very powerful regional policy. In the meantime, I commend the motion to the House, because it is important that there be cross-party consensus on how to deal with the issue.
Rosie Cooper (West Lancashire) (Lab)
More than 100,000 people have added their names to an e-petition, and they and many millions more want to know whether the Government are prepared to listen to them and take the necessary action to ease the burden on hard-working families and businesses and, indeed, on our struggling economy. Out of that desire for action, and to support people in my constituency, I added my name to the amendment tabled by my hon. Friend the Member for St Helens North (Mr Watts) that called on the Government to reverse their VAT increase and, in doing so,
“cut 3p off a litre of petrol”.
Nick Smith
Very shortly, the Chancellor will give his autumn statement, so does my hon. Friend agree that that is a terrific opportunity for the Government to signal a temporary cut in VAT that will both help drivers and boost our economy?
Rosie Cooper
I do indeed, because the general public are simply not interested in any more words, any more knockabout, or any more “he said, she said”. They have signed up in their thousands for action to reduce the cost of fuel and its impact on families and businesses. Study after study shows that transport is integral to an individual’s ability to access employment opportunities and to take part in social and cultural activities. For many people, access to transport is the difference between social exclusion and social inclusion. I could give examples from my West Lancashire constituency that illustrate that the cost of fuel has a significant impact on people, whether they live in urban or rural areas.
The sixties town of Skelmersdale was designed with the car as king. There is no railway station or pavement system to allow people to walk across town, and public transport services are limited. That means that residents rely on their car to get to work and to get around. In many cases, workers are forced to use taxis to travel to work, and if fuel costs increase, residents in those hard-pressed areas must decide whether travelling to work is financially viable.
Tom Blenkinsop
Is my hon. Friend concerned, as I am, that the policy of the Department for Work and Pensions of forcing unemployed people to look for work within a radius of 90 miles might be undermined by the fact that fuel costs are so high?
Rosie Cooper
In my constituency, to be forced to look for work within 9 miles is darn near impossible because there is no transport infrastructure.
Andrew Selous (South West Bedfordshire) (Con)
I think that the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) meant to say that it was 90 minutes, rather than 90 miles, which is quite a significant difference.
Rosie Cooper
Fine: my answer remains the same.
There are many rural communities in West Lancashire, and in those areas, public transport is almost non-existent. The main services in villages have closed down, so people have to travel to the main towns to shop, to go to the doctors or to go to work. They rely on their car to get about or, in the case of some older people, on the kindness of a friend to give them a lift. Yet again, if people cannot run their car because of costs, that has a negative effect on all aspects of their life. I am concerned about the impact on both the young and older people in rural communities, as they may become ever more isolated, making them more vulnerable. How do pensioners on a fixed income that has been stretched to the limit find the extra money to cope with further fuel increases?
Some people argue that a reduction in fuel duty and thus fuel prices would mean an increase in the number of journeys and carbon emissions. I absolutely understand that argument, which reflects the fact that there is a difficult balance between our desire to tackle climate change and enabling people to go about their daily business, go to work, support their family, and run their company. Simply pricing people out of their car is not a real solution, especially in areas such as West Lancashire, where there is no real alternative in place.
It strikes me that with a flatlining economy, rising unemployment and businesses unwilling to invest because of the current uncertainty, now is exactly the time for flexibility and common sense. People like those living in West Lancashire—hard-working families and local businesses employing people—are looking to the Government to help them out just a little. They want help to ease that burden, and it is probably the least they are owed, after broken promises to introduce a fuel duty stabiliser, a failure to scrap the planned fuel duty increase and a decision to increase VAT. It is time for social justice and fairness. It is time for the Government to listen and to act. People want them to do it, and to do it now.
Mr Marcus Jones (Nuneaton) (Con)
I begin by thanking my hon. Friend the Member for Harlow (Robert Halfon) for working so hard with colleagues and with the public to secure this vital debate, which affects not only drivers, but every citizen in this country. Virtually everything we consume is carried by road, so when the cost of fuel increases, we all feel the extra burden. When we do our weekly shop, when we pop down the local pub for a swift half or when we buy virtually anything else, we notice that the cost has increased. That is why, in my response to the Chancellor’s last Budget, I said in the House that my constituents would have breathed a sigh of relief when the Chancellor scrapped the duty escalator increase programmed into the Budget by the previous Chancellor, the right hon. Member for Edinburgh South West (Mr Darling).
Graham Jones
The hon. Gentleman makes a valid point that family budgets are under pressure. The subject of the debate is important to my constituents—I received about 60 letters. Does he agree, though, that the increase in VAT to 20% is hitting family budgets and adding £450 to the average family’s tax bill?
Mr Jones
I thank the hon. Gentleman for his comment. Like many Opposition Members, he is presenting a confused view of things. His party did not vote against the VAT increase. One minute the Opposition seem to want a VAT reduction only on fuel, which would be difficult to achieve because of the situation with the EU. In fact, as has been pointed out, it would be illegal. The next minute the Opposition want a full VAT cut, which I find strange. It is yet another uncosted policy to add to the other five points in the five-point plan. Perhaps we should call it the six-point plan for bankruptcy that the Labour party is advocating.
I remind the House that in the last Budget the Chancellor also cut 1p off the price of a litre of fuel. Although that is a small cut, it was welcomed by many. Thus at the last Budget the Chancellor saved the motorist from an impending increase of about 26p a gallon. That move showed that my right hon. Friend the Chancellor had listened to the people of the country and the FairFuelUK and other campaigns that have lobbied MPs and the Government in a reasoned, fair and pragmatic fashion. My right hon. Friend was probably wise to listen, because we all know now that certain surveys tell us that 85% of the public think the cost of fuel is hurting people and businesses.
I sincerely thank the Chancellor for taking that course of action. I hope that after today’s debate the Minister will pass on to the Chancellor the comments made by Members, and that he will think very hard, as he did before, and try to mitigate or not put through the increases in fuel duty programmed in for 2012.
Jason McCartney
To follow up my hon. Friend’s earlier comments about having a swift half, I recently spent an evening serving behind the bar in one of my local rural pubs to celebrate British pub week—the Wills O’Nats in Meltham, a very rural pub a mile from the nearest houses. All the staff have to drive there. All the customers drive there, of course, with a designated driver and with soft drinks. So it is important not just for enjoying a drink, but for employment opportunities that we support our rural pubs and that we try to do what we can with the fuel duty to help such employment.
Mr Jones
As my hon. Friend rightly points out, that is a vital issue for our local communities.
The road transport angle is vital to my constituency, where many jobs depend on the industry, as it is a major road and network hub for UK distribution. Many transport and haulage companies are suffering greatly. As we have heard, most heavy goods vehicles do about 8 miles to the gallon, so the planned 3p increase in January 2012 will add about £15 a week to the cost of running a vehicle, according to figures I have received from the Freight Transport Association. For companies with fleets of more than 50 vehicles, of which there are several in my constituency, the planned increase will increase their costs by £37,000 a year. They will either absorb the cost or pass it on to their customers. With such low operating margins in the transport sector these days, I suspect that it is inevitable that the increase will be passed on, thus adding further inflation to the supply chain.
Furthermore, an increase would also widen the gap between UK and continental fuel prices and increase the number of foreign trucks operating in the UK. We should think carefully about that, because foreign trucks pay no UK fuel duty, no UK road fund licence and no UK employment taxes. That will increase their ability to undercut UK hauliers, potentially put UK jobs at risk and exacerbate the loss of tax take that hon. Members have mentioned this evening. Smaller haulage companies tell me that fuel prices are crippling their cash flow, as they have to pay at the pump or on very short seven-day credit terms, whereas their customers want 30, 60 or 90-day credit terms.
I would like to say more on this important matter and talk about the general motorist and car driver, but unfortunately I am running short of time. In conclusion, deficit reduction is rightly the Government’s first priority, but I appeal to the Chancellor to listen to the public on this vital issue, particularly before his autumn statement, and see what he can do to minimise the impact that it might have on our hauliers and motorists.
Sammy Wilson (East Antrim) (DUP)
I welcome the opportunity to speak in the debate, because the price of fuel is an important concern for many of our constituents. I will start with two observations. First, I am glad that there has been little evidence today in the House of the green zealotry that drove the increase in fuel prices—a point we must not forget, because it was argued that that was a way of weaning the population off fossil fuels. Secondly, although Members have talked about the role of petrol and oil companies, let us not forget that 60% of the cost of fuel is accounted for by Government action. Therefore, this is the appropriate place to debate what can be done about it.
The Government’s record on this differs from what they said in opposition. They had many fine ideas in opposition. Indeed, in “A Fair Fuel Stabiliser” they indicated that any reform should help families when the cost of living is rising and reduce the inflationary impact on the economy—but what has the record been since they came into power? In Northern Ireland, fuel bills for families have increased by an average of £254 a year for those using diesel and £284 a year for those using petrol. The Government promised in opposition to do something for families when the cost of living was rising, but their actions have been different.
They made clear in opposition what they thought about an increase in VAT. Indeed, in an intervention in this House in 2008, a Conservative Member asked the then shadow Chancellor:
“Does my hon. Friend not agree that Labour’s plans to increase VAT to… perhaps even 19.5 per cent…. after the next election will hit hard-working families hardest? Should the Government not be ashamed of themselves?”
The answer was “absolutely”, and that the Conservatives would keep reminding the then Government of that
“every…day between now and the…election.”—[Official Report, 26 November 2008; Vol. 483, c. 741.]
The Conservatives did that, but as soon as the election was over and VAT went up to 20%, it all went quiet on the Government Benches, and we did not hear much from them about VAT hitting the poorest families hardest.
During this debate, Government Members have said, “Ah, yes, but we reduced fuel duty.” On the one hand, fuel duty was reduced; on the other, VAT was put up. The Chancellor gave, and the Chancellor took away. That is the truth for hard-working families.
Jim Shannon
I thank my hon. Friend for his passionate speech. As he represents a rural constituency similar to mine, has he been contacted by farming communities regarding the effect of fuel prices on food production, which affects everybody in the country? There is the price of the fuel for their machinery, but the increased fuel prices also get passed on to them in the price of fertiliser and other things that they use on the farm. Is he concerned about that, and about its impact on food prices?
Sammy Wilson
That just illustrates the inflationary impact of the situation, not just on individual families but throughout the economy, and the Government ought to bear it in mind as they ask themselves, “What shall we do to regenerate the economy?”
Various reasons why it is difficult to do something have been given. The first, which we have heard from Government Members, is that if we try to reduce VAT Europe will intervene. That is another reason for renegotiating our position on Europe—but leaving that aside, I note that 75% of the tax is not VAT but fuel duty, so even if there is a problem with Europe, the Government have another way of dealing with the problem.
The second reason that has been given has involved asking, “What about deficit reduction?”, but there does not seem to have been any difficulty with deficit reduction when it has come to bailing out the euro, with £12.5 billion having already been pumped into it and the Government talking about more money going to the International Monetary Fund. Indeed, as Government Members have said, the measure could almost be self-financing anyway: if, for example, it led to a rise in demand, there would be more duty; if it cut costs, more corporation tax would be paid.
Mark Durkan (Foyle) (SDLP)
Does the hon. Gentleman recall that previously, whenever the Scottish National party or Plaid Cymru moved their various motions, Labour voted them down and the Tories abstained, and then the Tories voted them down and Labour abstained? Does he believe that there must be something particularly volatile in fuel prices on the road to Damascus to bring about such changes in outlook?
Sammy Wilson
I believe in Damascus road experiences, and if they help the consumer that is a good thing, so I look forward to that. I hope that the Government will have a Damascus road experience on this issue. Consumers would be pleased if they did.
In opposition, the Conservatives made promises. Now that they are in government they hold in their hands the levers to help consumers, and from this debate will come the expectation that promises made in the past will be delivered by those who hold the levers and have the ability to use them in the present.
Andrew Selous (South West Bedfordshire) (Con)
I, like others, warmly congratulate my hon. Friend the Member for Harlow (Robert Halfon) on bringing this important debate to the House today.
In my constituency the car is essential really to all my constituents. We have three market towns and 14 villages, and although the bus companies do valiantly they cannot serve all my constituents, many of whom have to commute a long way—for 90 minutes or even longer—out of my constituency to find regular work. When there were difficulties with the buses in villages such as Hockliffe and Eggington there was enormous upset, because many people in those areas find motoring so expensive.
In rural areas, on average only 10% of people do not have a car, because they are so necessary, and more than half of households need two cars to get their families around.
Anne Marie Morris (Newton Abbot) (Con)
Is my hon. Friend aware that in rural constituencies such as ours the cost of filling up at the petrol pump comes to 10% of the wages of an individual on the lowest income? That is an enormous amount, and does he agree that it puts a particular burden on those living in rural communities?
Andrew Selous
My hon. Friend is absolutely right: that adds insult to injury.
The huge disparity in petrol prices experienced by so many of our constituents is extremely difficult. In addition, the disparity between the price of diesel and unleaded petrol concerns me greatly. Diesel used to be more expensive. We then had parity, and now diesel has shot up again. It is apparent that we have an inadequate supply of UK refining capacity for diesel in this country. We have to import much of our diesel from Russia, which causes particular problems given that around half of all car sales are of diesel vehicles.
Tessa Munt
There is also the increase in prices for liquefied petroleum gas, which has gone up astronomically in the past few years.
Andrew Selous
My hon. Friend makes a good point, and I am glad that she has been able to get it on the record.
Of course, the Government are in a very difficult fiscal position because of the economic mismanagement we inherited. Every day we are still spending around £330 million more than our income, and these things are not easy for Treasury Ministers. In spite of that we have managed to reduce the cost of fuel by around 6p per gallon, which my hon. Friend the Member for Harlow said would equate to around £274 less spent on fuel per motorist in this Parliament. That is very welcome. Government Members are instinctive tax cutters, which is why we have set out plans to reduce corporation tax to the lowest rate in the G7 by the end of this Parliament. That is where our instincts lie, and my hon. Friend the Minister knows that.
In contrast to some of the other speakers today, I want to consider the future in relation to fuel prices and talk about how some of the new technologies will be able to help save our constituents money. On 10 May I held a debate in Westminster Hall, in response to which the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), told hon. Members that people who buy a Nissan Leaf would have an average reduction in their motoring costs of around £1,000 per year, and that there would be a payback on the total costs within seven years. He also sent me further information to show that the seven-year fuel costs of a Ford Focus are £6,827. For a Toyota Prius that figure is £4,034, and for a Nissan Leaf coming on sale next year, it is just £517. Some 48 other makes of electric vehicle will be available soon—for example, the Vauxhall Ampera and others. I am delighted that in my constituency, charging points for electric cars will be installed at Ashton square by the Grove theatre car park in Dunstable, and at the West street and Hockliffe street car parks in Leighton Buzzard.
We have rightly heard much about the problems faced by small businesses. We need to consider the use of biomethane for trucks and hydrogen fuel cell technology for buses and heavy vehicles. At Nagoya airport in Japan all the buses are powered by hydrogen fuel cells. We need to ensure that we develop a hydrogen refuelling network, as we are doing for electric vehicles. Our constituents will then be able to enjoy cheaper fuel.
We also need to look at what is happening internationally. In Israel and Denmark the Better Place company is engaged across the whole economy. On 1 November Mr van Erck of that company told a meeting of the Westminster Energy, Environment and Transport Forum, at which some hon. Members were also present, that within three years the best-selling vehicle would be electric. Not only can we have cheaper motoring for our constituents, but the UK is also on track for a sizeable share of what HSBC estimates to be a $677 billion market by 2020. That was mentioned by Michael Hurwitz, a director of the Government’s Office for Low Emission Vehicles on 1 November. Such a plan would stimulate the economy and create British jobs for British workers, as well as lower prices for our constituents.
The UK is in a race to design, manufacture and power cheaper low-carbon vehicles. We have a once in a lifetime opportunity to lead in this industry as we lead in Formula 1, with eight of the Formula 1 teams based in “motorsport valley" in the United Kingdom. Such a challenge will be good for our constituents’ pockets and good for the economy. I recommend to the Government that we power forward in this area, for the whole of the United Kingdom.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I want to address this debate from the perspective of a low-paid part-time worker. Working families will be told to earn at least £212.80 a week or face having tax credits removed. In my constituency, particularly in places such as rural east Cleveland, as well as suburbs such as Hemlington and Coulby Newham in Middlesbrough, many women work part-time at or just above the minimum wage. After recent public transport cuts by the Government affecting over 90% of local authorities outside London, those women are forced, in the main, to travel by private car. This will become even more the case next year when the Government remove the subsidy for bus fares, further increasing by 20% the cost to the customer of public transport in the form of buses.
Nic Dakin (Scunthorpe) (Lab)
Does my hon. Friend agree that women are particularly badly affected by fuel prices?
Tom Blenkinsop
That is precisely the point I am making. The lack of a Government growth strategy is making it even more difficult for women to exist within or get into the labour market.
Those women and other workers, particularly in my constituency, need affordable transport, and the Chancellor’s 20% VAT rate is counter-intuitive to that requirement. The economic climate is such that growth in private sector jobs is flatlining, and such jobs are mainly part-time and low paid. The problem is that people who want to work full-time can only get part-time jobs. Part-time employment cannot fund the everyday necessity of a car, and part-time workers are increasingly reliant on a diminishing—
Jim Shannon
Is the hon. Gentleman aware that over the past 50 years car ownership has increased from 5% to some 51%, and that those in a lower income bracket are most affected? Does he not think that that clearly underlines the case that we need lower prices?
Tom Blenkinsop
Yes. We have heard today the very good arguments about the differences between rural and urban areas, but in certain rural communities in my constituency there is less than 30% car ownership, so there are also class and income issues, as well as a diminishing public transport system that is becoming more and more expensive because of Tory cuts and rising fuel prices.
Female part-time workers often visit two or three workplaces. I used to cover, as a community trade union official, Teesside Cast Products, a steelworks in Redcar. I also represented those in OCS, who worked not only as cleaners and canteen staff but elsewhere as carers on a part-time basis. One of the women I knew did a total round trip of approximately 40 miles a day between two or three work sites. Her employers frequently attempted to remove or decrease her company subsidised fuel costs through unilateral variations in terms and conditions. The Government’s attack on her tax credits and their policy of 20% VAT made it almost impossible for her to work on a day-to-day basis. If it were not for the union fighting for her terms and conditions on fuel payments from her employers, she would undoubtedly have become a Department for Work and Pensions statistic and have been downgraded into a burden on the state rather than the hard-working unionised woman I know her to be.
The Office for National Statistics has demonstrated that in 2010 the poorest 20% of households spent 3.5% of their disposable income on petrol and diesel, compared with 1.8% in the case of the richest fifth of the population. Meanwhile, in the same period, Shell’s profits more than doubled to £4.3 billion, Exxon Mobil made £6.5 billion, and BP made £3.2 billion. We must take note that the squeeze caused by the Chancellor increasing VAT from 17.5% to 20% has added 3p to the price of a litre of petrol. Diesel keeps industry, and the vital service sector that it requires, flowing, much like capital and skills. More than this, public services, including Royal Mail, such as it is—it is going to be fractured and regionalised by privatisation—police vehicle response units, ambulances, fire services and councils incur increased costs via the 3% VAT increase.
Christopher Pincher
I know that the hon. Gentleman is a decent man, but will he explain why, if he really wants to see fuel price reductions, he fought the general election on a manifesto to support the fuel duty escalator that would have put 5p on a litre of petrol this April and increased the duty every year for the next three years?
Tom Blenkinsop
That was not in our manifesto, although the Tories’ manifesto clearly stated that they would not raise VAT.
Budgets in Middlesbrough, Redcar and Cleveland have been most severely cut by this Tory-Liberal Democrat Government, with cuts of up to 10% for those local authorities. Leafy areas in the south-west such as Dorset have had a 1% budget increase, and we are feeling the pain the most. Our area provides the manufacturing-led recovery for this country, but we are not getting the financial benefits from this Government. The 20% VAT rise and its effect on fuel is hurting us.
The public organisations that I have spoken about consequently reduce their contracting of car and van fleet services, which hurts small businesses in communities such as mine. Those small businesses in turn reduce their staff numbers as they are squeezed by the direct increase in fuel prices due to VAT and the indirect negative multiplier effect of public service cuts.
As Opposition Members predicted, killing off public services will not, in and of itself, evacuate space for the private sector to fill. It has simply intensified the pain of already difficult budget cuts. That has happened because of the Chancellor’s economic decisions before the eurozone crisis. The statistics from the Office for National Statistics and the Office for Budget Responsibility show that the cuts were happening before the eurozone crisis, despite the Government’s attempts to use it as a smokescreen for their failed economic policies.
Sarah Newton (Truro and Falmouth) (Con)
This is an important issue that affects every home in my constituency. I add my thanks to my hon. Friend the Member for Harlow (Robert Halfon) for securing this debate.
That appreciation is shared by my constituent Annalise Lucas from Cubert. She is a member of Network Cornwall, which is a network for female small business owners in Cornwall. Like many mums with small children, she balances work—running her costume design business—with looking after her family. Like many hard-working families in my constituency, Annalise and her husband, who works at Newquay Tretherras school, are finding the ever-increasing fuel prices, coupled with the higher costs of living in Cornwall, a real struggle.
Andrea Leadsom (South Northamptonshire) (Con)
Is my hon. Friend aware of the many young mothers who work part time and who struggle to afford the cost of filling their car to get to work?
Sarah Newton
I am aware of that concern, especially in rural areas where there is no option but to use a car because of the limitations of public transport.
Hard-working families and mums who are raising their children are the backbone of communities across my constituency. I look forward to hearing from the Minister what more the Government can do to support those families. We all agree that it is vital to sort out the nation’s finances, but we must support people to carry on looking after their families.
Sir Robert Smith
The hon. Lady is making an important point, which has been expressed across the House, on the strength of feeling about the need to tackle fuel price rises. Perhaps one challenge that comes from this debate is how the Office for Budget Responsibility calculates the benefit that the Government get from higher fuel prices through the windfall in VAT revenues and other revenues. The OBR argues that that does not count for anything. Perhaps in revisiting that we could also address the argument that a reduction in fuel duty might increase revenues by increasing spending.
Sarah Newton
What we are all agreed on today—I hope we will hear this from the Minister—is that we should leave no stone unturned in finding ways to stop the increases in fuel prices and in starting to tackle the problems that we have heard about in this debate.
I will not use the limited time that I have to duplicate the points that have been made by my colleagues, the majority of which I agree with. However, I will develop the issue raised by my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) about the impact of rising fuel prices on volunteer transport schemes. Like many rural areas, my constituency does not have good public transport. It also has a high proportion of elderly people, many of whom are living in poverty.
We have one acute hospital that serves everybody living in west Cornwall. Volunteer drivers play a vital role in taking people to hospital, to their GPs and to other therapeutic appointments. Volunteer-run minibuses are also very important. One such service, Transport Access People, run by Age UK Cornwall, is based in my constituency. TAP has just under 30,000 clients and its volunteer drivers have clocked up more than 2.6 million miles. It currently has 250 volunteer drivers, but it has lost six in the past couple of months because of rising fuel prices.
Sheryll Murray (South East Cornwall) (Con)
Transport Access People covers not only the west of Cornwall but the whole of Cornwall. In my constituency, TAP is finding it extremely difficult to get volunteer drivers because of the excessive fuel costs that they have to pay.
Sarah Newton
My hon. Friend makes a very good point, as usual. To cover the increased costs that she mentions, TAP has had to put its price up to 41p a mile. It is worried about the future, because it may have to raise it to 45p a mile, which is what similar organisations in other parts of the country are having to charge. Given that the average journey is 25 miles, and that it is not uncommon for patients to travel 50 miles for an appointment, we can see how prices are mounting up for patients. Some are entitled to free travel, but many people on very modest incomes are not.
A report by CAB Cornwall, the citizens advice bureau, has highlighted the fact that some people are not attending hospital appointments because they cannot afford to. That is a waste of precious NHS resources and not at all good for the patients concerned. Work is being done locally to try to address that, with more NHS services being moved closer to people’s homes, but that will take time. I hope that the Minister will commit to considering what further help the Government can provide to keep these much-needed volunteer drivers on the road.
Matthew Hancock (West Suffolk) (Con)
Are there not unfair differences in the local price of fuel as well as the national price? In Haverhill, in my constituency, fuel is up to 10p more expensive than in nearby Bury. Is that not patently unfair?
Sarah Newton
It certainly is, and I am sure that that is the experience of drivers right across my constituency and Cornwall.
We have heard from all Government Members who have spoken that they absolutely understand that the Government’s priority is to reduce the deficit and sort out the nation’s finances. People in my constituency broadly understand that. However, I hope that we can ensure that cuts are made and revenues increased fairly, so that they do not adversely affect some of the most vulnerable and poorest people in my constituency who are being affected by the lack of volunteer drivers to take them to hospital.
Sheila Gilmore (Edinburgh East) (Lab)
Like the hon. Member for Truro and Falmouth (Sarah Newton), I want to talk about some of the issues that affect people in my constituency. I feel a little out of place in this debate: so many Members from rural constituencies have talked about either the rural idyll or the rural hell that I feel, as I represent an urban constituency, that I should perhaps not venture into the discussion. However, fuel prices do of course affect urban as well as rural areas.
I wish to develop points about issues such as community transport, which is essential for a lot of elderly people to be able get to activities such as lunch clubs, and to get out of their own homes instead of being housebound. The local organisation in my area is struggling because of the reductions in grants, which are a result of local government cuts. Its core funding, which allows it to be run and administered, has been cut, and at the same time fuel prices are increasing. If it increased its charges to the organisations that use it, that would just bounce the problem on to another set of voluntary organisations—the ones that provide lunch clubs and other activities.
Mr McCann
Does my hon. Friend accept that as well as the austerity cuts in the United Kingdom Parliament, with the Government going too far, too fast, which is having a disproportionate effect, the Scottish National party Administration in Scotland are making unsustainable spending decisions? They are placing the burden on local government, which in turn has to make tough decisions about local spending.
Sheila Gilmore
We have had the experience of four years of a council tax freeze, which people no doubt think is a wonderful thing on one level, but which is presenting huge problems to voluntary organisations.
The other organisation that I wish to mention briefly is a social enterprise—a laundry service—operating in my constituency. It not only provides a valuable service but tries to be commercial and turn a profit so that it can reinvest. It employs many people with learning difficulties, for example, and provides them with valuable training. However, that laundry service goes round collecting sheets and towels and so on from hotels and other large organisations, which involves transporting them to and from the people contracting with it. That organisation, which will certainly not benefit from being able to reclaim VAT, for example, is struggling in this financial climate, yet it is an important organisation, because it provides not just a useful service but valuable employment opportunities for people who otherwise might not be able to get them. We cannot contemplate it ending.
Mr David Hamilton
I agree with my hon. Friend. Many people employed in the voluntary sector work across the city, but they do not have access to buses to enable them to do so, and therefore require vehicles. This issue has a direct effect on those workers, many of whom are part timers, and raises costs for them.
Sheila Gilmore
I wholly agree.
One of the fascinating things about this debate—I mentioned this in an intervention—is the rediscovery, it would appear throughout the House, of the fact that taxes on expenditure are indeed regressive. I would ask that this rediscovery be carried into the further debates that we will no doubt have on VAT, in the autumn statement and into the next Budget. We made the point over and over that the increase in VAT would particularly harm those on lower incomes. Some Government Members try to argue that it did not really do that, because richer people spend more and therefore pay more VAT. However, as a proportion of income and in terms of the effect on family income, it is indeed those who earn least who are affected. I am therefore pleased to see that we all apparently now agree on the regressive nature of such taxes.
Finally, we should not see this debate and our environmental ambitions as an “either/or”. We should not appear to be saying that we no longer want to make our country a greener place. We need to invest in green manufacturing industries, which will enable us to get out of this position. It is interesting that the motion refers to the tax take going down, which many people have simply put down to increased fuel costs. However, many other things could have reduced the tax take, such as fewer people working, fewer people paying tax and fewer people travelling, not just because of cost but because they do not have jobs to go to.
Again, this comes down to what we have said about the economy. If we let it run down and down, both demand and income to the Treasury will be reduced, and we will not cure the deficit, as is becoming increasingly obvious, as this Government are having to borrow more.
Nigel Mills (Amber Valley) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on his tireless campaigning to secure this debate. I think it was back in February that I last spoke in a debate on fuel prices. Indeed, it should be a tradition that we debate fuel prices two or three weeks before every Budget or the autumn statement. The last debate was a great success, because shortly afterwards the Government scrapped the 5p rise and introduced a 1p cut. We hope that our new Minister will follow that trend and that the next 3p rise will be scrapped, with perhaps even a small cut made to encourage people.
The price of fuel is one of the topics we debate where so many of our constituents feel the pain personally, either as individuals or in the businesses they run.
Mr McCann
It is nice of the hon. Gentleman to give way, because he will remember that I followed him when he made his maiden speech in the House. Does he think that his constituents are feeling the pinch of the increase in fuel prices attributed to the VAT increase that his Conservative and Liberal Democrat coalition introduced?
Nigel Mills
I am tempted to say that I will give way again to the hon. Gentleman if he will tell us whether he voted against the VAT rise. We have heard a great deal of concern expressed today about the VAT rise, but it is surprising that those feelings are so strong, given that most Members did not vote against it. We have often said that we had to introduce that increase in part to fix the mess that Labour left for us. If the hon. Gentleman wants to take away that £12 billion or £13 billion of tax revenue, he will have to find a way of replacing it. I shall return to the question of fuel prices before I run out of time.
The point has been well made that this issue is all-pervasive, in that fuel costs affect everything that we buy. Today the headlines are telling us that inflation has fallen to 5%. Who on earth would have thought that we would be reading such headlines? The last thing that the Government want to do is put up fuel prices, which would affect everything that we buy, thereby pushing up inflation again.
Elizabeth Truss (South West Norfolk) (Con)
Does my hon. Friend agree that the situation is particularly difficult for people living in rural areas? One of my constituents who was unemployed has found a job further afield. He is earning £17,000, but he is spending £3,000 of that on petrol.
Nigel Mills
I absolutely agree with my hon. Friend. I have similar situations in parts of my constituency. Petrol prices are much higher there than they are in large cities. I have perhaps had a bit of luck recently in that Asda has opened a branch in the past year, which has pushed some petrol prices down a little—not that I like to pay tribute to supermarkets all that often.
Governments of both parties have spent nearly 20 years putting up petrol prices, and they have justified that in part by saying that it would encourage us to change our behaviour by buying smaller cars and driving less. Well, I think we have all got that message now. I have a smaller car that does many more miles to the gallon, as have most of my constituents, and many of the businesses that I talk to have reformed the way they transport their goods in order to reduce the number of lorry loads. The message is already out there, and we do not need any more nudging. We all understand it, and there is little more that we can do. For many people, their journeys are essential, and we risk pricing them off the road and out of economic activity completely.
The price of fuel is high. In fact, the underlying price—excluding the duty—has increased by about 20% over the past two years. There is no need for an inflationary rise in the duty to ensure that the price goes up in line with inflation, because the price has already risen by that amount. I cannot see any justification for a price rise on that basis. The only argument left for a further fuel duty increase is the fact that we need tax revenue, but this would be an especially bad way of generating that revenue, given the damage that it would do to our economy at this difficult time. I therefore urge the Government to scrap the rises that are planned for next year, and to try instead to find a way of reducing the duty in order to stimulate the economic activity that we need.
Toby Perkins (Chesterfield) (Lab)
I congratulate the hon. Member for Harlow (Robert Halfon) on securing the debate, but I would like to express my disappointment, and the disappointment of the many dozens of people in Chesterfield who have written to me about this matter, that the motion demands so very little of the Government. It calls on them to “consider the effect” of fuel duty increases, to “examine ways of working” with industry, to “take account” of market competitiveness and to “consider the feasibility” of a price stabilisation mechanism. That is hardly a manifesto for change. Is that what 110,000 people wrote to Members of Parliament about? We are asking so very little of the Government today. Jesus said:
“Blessed are the meek: for they shall inherit the earth”,
and the hon. Gentleman must be very blessed indeed. His request to the Government will greatly disappoint the many people who have written to me.
I recognise entirely that the cost of fuel is just one of many costs that are going through the roof, resulting in many people in our constituencies really struggling at the moment. The cost of energy is a significant one, and the cost of food is going through the roof. Inflation is going up, wages are stagnant and the people in our constituencies are struggling desperately. I welcome the fact that Conservative Back Benchers are finally showing an understanding of the principle of the Government forgoing revenue in order to deliver economic growth, reducing the deficit through the higher tax revenues that result from people having more money in their pockets. It was exactly that principle that persuaded me to vote in favour of shelving the increase, when Conservative Members were not doing so. Having arrived at that point, however, it is bizarre that Conservative Members should think that the issue is purely about fuel, and that all the other reasons why people have no money in their pockets and why consumer confidence is so low are not significant. They focus solely on fuel.
This issue is having a massive impact on businesses. The hon. Member for Harlow started by saying that some businesses do not pay VAT, so they are okay. However, small businesses pay VAT, as do public services, charities and ordinary people out there who are paying it the whole time. The significance of this should not be underestimated. Over the past 15 years or so we have seen a reduction in the amount of tax on fuel as a percentage of its cost. The peak period of the highest tax on fuel was back in the mid-90s. Since then, we have seen a reduction. Over the course of the last few years, we have seen a massive increase in the cost of petrol. The tax has been significant, but the big increases recently stem from the profiteering of the fuel companies—[Interruption.] Is that an attempt to intervene? I was not inviting one, but I am happy to oblige.
Andrew Percy
The point I have been trying to make is what the hon. Gentleman might think of his Government’s decision to escalate the escalator and push through 12 rises. It is a bit difficult being patronised by a party that did all that to fuel prices.
Toby Perkins
The escalator was the invention of the previous Conservative Government. The reality is that when the major fuel protests broke out in 2000-01, the amount of their income that people were spending on fuel was far less than it is today. All the revenue is coming in now, and Conservative Members say that the Government were generating too little money in years gone by. They stand before us today with all the benefit of the money that has gone in over the years, yet for all the talk we hear from people such as the hon. Member for Brigg and Goole (Andrew Percy), we have a motion before us that asks the Government to consider whether they can do something. If the massive increase in fuel duty over the years is so awful—I think it has gone up a lot—why do we not have a proposal that is a bit stronger? Why is the motion so feeble? [Interruption.]
We have also heard from Conservative Members—[Interruption.] If they want to intervene, they can do so, but I will not just be barracked. According to Conservative Members, there is a huge amount of support for the 1p reduction, which will save motorists £274 over the Parliament. At the same time, people are spending £300 or £400 extra in VAT, so this does not add up. We need a stronger motion, so that we can really help to put some money back into people’s pockets.
Mark Pawsey (Rugby) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on the assiduous campaign he has fought on this issue, which has generated massive interest across the Chamber in response to the great pressure on our constituents. I was pleased to add my name to the motion, as I recognise the impact of fuel prices on individuals, particularly those in rural communities such as the villages around my constituency, many of whom have to rely on their car and spend a substantial proportion of their income on fuel.
In common with my hon. Friend the Member for Congleton (Fiona Bruce), I want to concentrate my remarks on the impact on business—and particularly on small businesses—as a generator of growth in our economy, just as I did when we last debated the matter on 16 March. I will deal first with the issue raised by my hon. Friend the Member for Worcester (Mr Walker): the price gap in the UK between petrol and diesel, which is up to 8p a litre. The duty is, of course, the same; it is the higher cost of production that leads to a higher price. That is the reverse of the situation 10, 15 or 20 years ago. Frankly, as the gap widens, there is a disincentive for business to run more fuel-efficient vehicles powered by diesel. There is no reason for having the same rate of tax on fuel, and having a lower rate for diesel would greatly assist business.
The differential between the price of diesel in the UK in comparison with mainland Europe is also important, as my hon. Friend the Member for Nuneaton (Mr Jones) said. That presents a significant advantage to overseas competitors, particularly haulage businesses, many of which are based in my constituency in the middle of England. The Government are losing revenue as UK-based operators fill up their tanks on the continent, and there is evidence that they are specifying vehicles with larger fuel tanks for the purpose. The location and size of those tanks also raise safety issues, especially in view of the horrendous accident on the M5 only a few weeks ago.
In our last debate on this issue, I said that businesses needed certainty and stability in regard to the price of fuel. That is often their most important consideration as they negotiate the prices at which they sell to their customers. I used to run a business that used delivery vehicles to supply goods. We had 10 vans and 10 sales reps. The cost of fuel was a major budget consideration for that small business. Between January 2009 and January 2011, it increased by £1,000 a month before VAT—£12,000 a year. Most of those increased amounts cannot be recouped, because businesses are not able to raise their prices. Loss of profitability and the fear of generating loss have led to massive concern about the price of fuel.
Mr Marcus Jones
I am sure that my hon. Friend will acknowledge that the problem is even worse for small businesses that are not registered for VAT and therefore cannot reclaim it.
Mark Pawsey
I also note that, according to research conducted by the Federation of Small Businesses, one in 10 businesses says that if something is not done about fuel prices, it will need to lay off staff. A quarter say that a freeze on wages is attributable to the cost of fuel, 36% say that they will have to reduce investment in new products and services, and 78% say that their overall profitability will be in jeopardy. The situation would, of course, have been worse under Labour, which—as we have heard from Government Members on many occasions—introduced a fuel duty escalator involving seven increases. Had it not been for the action taken by the Government, fuel would now cost 6p more per litre.
I know from my career before I entered the House how important fuel prices are to the business sector. I hope that in his autumn statement the Chancellor will be able to give the necessary support to hard-pressed households and to businesses.
Nic Dakin (Scunthorpe) (Lab)
Let me begin by thanking the many constituents who have contacted me to express their concern about fuel prices. The debate has covered a wide range of issues. Having listened to all of it, I have concluded that there is a unanimous view throughout the House that higher fuel prices are hitting people hard at a time when household budgets are being squeezed as a result of rocketing energy prices and rising food prices. As was pointed out by the hon. Member for Harlow (Robert Halfon), whom I congratulate on securing the debate, mums, ordinary families and small businesses are being affected by the level of fuel prices. It is now clear that the Government’s decision to increase VAT to 20% in January, pushing up the price of petrol and the cost of living, was a serious mistake.
Jim Shannon
Does the hon. Gentleman agree that transport is the single biggest item of expenditure for most households, ranking above food, power and housing, at a time when the level of inflation is also increasing? Does he believe that a decrease of 1p, 2p, 3p or more on the forecourts would make a difference?
Nic Dakin
I think that a decrease on the forecourts would be very welcome to ordinary families and businesses.
The Tory tax of choice, VAT, is a regressive spending tax, and I welcome the recognition on the Government Benches that that regressiveness is damaging household incomes. New EU growth figures have been published today. They show that the UK’s economic growth is slower than that of all the other EU countries except Greece, Portugal and Cyprus. It is therefore essential that there is action now. We urgently need action to get the economy going again. That is why organisations such as the Federation of Small Businesses are supporting Labour’s five point plan for jobs, including cuts in VAT, tax breaks for small businesses that take on extra workers, and taxes on bankers’ bonuses to create 100,000 jobs for young people.
I want to focus on young people, as these fuel taxes are creating difficulties for them in getting to learn and getting to work.
Lisa Nandy (Wigan) (Lab)
My hon. Friend makes a powerful point. Does he agree that young people in rural areas, including in my constituency, often have to travel long distances to get to college or apprenticeships, and that they have been particularly hard hit by the abolition of the education maintenance allowance and other measures, which have squeezed their incomes disproportionately at the same time as fuel prices have risen?
Nic Dakin
My hon. Friend very clearly makes a point that I, too, was going to make. We fear that the number of young people who are unemployed will rise to over 1 million this week. If that happens, it will be desperate for the people of this country.
Fuel duties and fuel taxes are a barrier to young people getting to learn and getting to work. That is why, in this Chamber last week, the Youth Parliament identified transport as its major concern.
Finally, I wish to draw attention to the absurd increases in the Humber bridge tolls for local people, including those in my constituency. The tolls have risen from £2.70 to £3 for a single journey. They are therefore the highest tolls in the country. I am pleased that the Economic Secretary is present on the Treasury Bench, and I welcome the interest the Government are taking and the review of the Humber bridge tolls. Whatever happens to fuel taxes, I hope we will also look at the Humber bridge tolls, which are a tax on local businesses and local people. We must give them a better deal.
Owen Smith (Pontypridd) (Lab)
This has been a very important debate. It has also been timely, because VAT on fuel and high fuel prices are just two of the essential costs that are currently squeezing family living standards throughout Britain and strangling business confidence. It is also timely as today’s inflation figures reveal that inflation is still at 5%, which is more than double the Government’s now-forlorn target. This country has higher inflation than any country in the eurozone apart from Estonia.
The debate is timely, too, because, as my hon. Friend the Member for Scunthorpe (Nic Dakin) just said, the unemployment figures will be published tomorrow. We all hope that we will not see the dole queue growing on a Tory watch, as it so often has done in the past. Most importantly, it is a timely debate because the Chancellor has a brief window of time in which to change his mind and take action before he appears at the Dispatch Box in 14 days. He has a chance to do something, and the need to do something has been the theme of this debate.
Almost 20 Government Back Benchers representing constituencies across the country—from Wyre Forest, Argyll and Bute, Penrith and The Border, Cleethorpes, Burton, Congleton and High Peak among other places— have spoken in the debate. All of them pleaded with their Government to do something about high fuel prices in this country. I congratulate the hon. Member for Harlow (Robert Halfon) on securing this debate. He put the case most eloquently in an interview he gave on Radio 4 this morning, when he said that what he wanted from his Government were tax cuts for millions of hard-pressed people, not tax cuts for millionaires. We on the Opposition Benches entirely agree with that sentiment. The occupants of the “millionaires’ row” of the Government Front Bench may be less keen, however. [Interruption.] Yes, perhaps present company should be excepted, I confess. Normally, there are a few more millionaires on the front row. Tonight, they are a bit short. Perhaps they would like to come in.
Owen Smith
I am not going to give way on that point.
What all those Back Benchers have wanted is action. The crucial difference between what they have called for today and what has been called for by Opposition Members, including my hon. Friends the Members for Ynys Môn (Albert Owen), for Livingston (Graeme Morrice), for Dumfries and Galloway (Mr Brown) and for Stoke-on-Trent South (Robert Flello), the hon. Member for Dundee East (Stewart Hosie), my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke), and my hon. Friends the Members for East Kilbride, Strathaven and Lesmahagow (Mr McCann) and for West Lancashire (Rosie Cooper) and many others, is that we want something substantive done. For example, we want what we might have seen in the motion had it pursued the line of thought that the e-petition did. We want to see something tangible. What Opposition Members have called for is straightforward. We have said, “Cut VAT by 3p on a litre of petrol, reverse the tax increase that the Chancellor put on ordinary working people in the Budget and get the economy moving.”
Owen Smith
I will not give way because we do not have much time. [Hon. Members: “Go on.”] I will give way once.
Owen Smith
Interestingly, the Government tried to tell us that there was no prospect of our seeking a derogation in respect of VAT on petrol, but they are, in effect, seeking a derogation for their rural subsidy—or their rural special pilot. [Interruption.] We are not opposing it, but we are saying that they could go further than simply seeking a derogation for rural areas; they could cut 3p off VAT right across the country, not just on fuel, but on all things, and get the economy moving. That is what they could do. There is a reason for them to do it, and here they should have listened to the hon. Member for Romsey and Southampton North (Caroline Nokes). She gave a very interesting speech and it was interesting to hear a Conservative Member acknowledge, so many years after Conservatives have protested that it was not true, that VAT is a regressive tax. VAT hits the lowest-paid people the hardest, and VAT on fuel does exactly the same.
It is very instructive today that so many Conservative Members should have signed the motion, albeit this bowdlerised, Whip-friendly motion. It is evidence that Conservative Back Benchers, unlike those on their Front-Bench, are perhaps concerned about the living standards of ordinary people in this country. It is also evidence that they have spotted, at last, that they were sold a pig in a poke by their Chancellor at the Budget last year. What he said when he announced, with such great hubris, that he was putting fuel in the “tank” of the economy was that the Government were going to have a fair fuel stabiliser—this is the fair fuel stabiliser that he had been promising since 2008. Hon. Members may remember that this was a pledge to link the prices of unrefined petrol and refined petrol in order to smooth out volatility. Of course that is not what Conservative Back Benchers got at all. They have not got a mechanism that smoothes out volatility or that connects petrol prices to oil prices. They have not got what they all stood on as a manifesto pledge. This is yet another broken promise from this Government.
Owen Smith
I will not give way. What they have got instead is more smoke and mirrors from the Government. They have got what one commentator referred to as the Chancellor taking one policy and giving its name to another one. The casual observer would think that they had fulfilled their manifesto pledge, but in reality, of course, they have not done so.
Robert Halfon
I thank the hon. Gentleman for his kind remarks; I am glad to hear that he was listening to the “Today” programme. He talked about a vulgarised Whip motion, but that same motion was signed by 13 Labour MPs, including the hon. Member for Bolsover (Mr Skinner).
Owen Smith
I presume that the hon. Gentleman could confirm—I am not going to give way to him once more to give him a chance to do so—that he spoke to the Whips beforehand. I say that because the motion does not reflect what he wanted in his e-petition. What the motion rather coyly says is that the Government should
“consider the feasibility of a price stabilisation mechanism”,
thereby conceding that what the Chancellor said he was delivering is fiction. It is not a stabiliser; it is merely a gimmick, as we have come to expect from this Government. Why should anybody trust the Tories on fuel tax? Similarly, we should not trust them on VAT because they always say that they are not going to put VAT up and when they get in, they do.
At this point, I must give Government Members a bit of a history lesson, because we have heard such rot this afternoon about the Labour Government’s record on fuel tax. Between 1979 and 1997, during the last period of Tory government, the Tories increased fuel duty fivefold—not a five-point plan but a fivefold increase in fuel duty, which went up from 8p to 45p by the time they left office. During the ’90s, when they invented the fuel duty escalator, fuel duty increased from 59% to 75% of the price per litre. That is what we inherited when came to government. It was left to Labour effectively to stabilise prices by freezing successive—[Laughter.] Hon. Members may laugh but they really ought to read the facts before they come into the Chamber and speak. Let me quote from the House of Commons note that was prepared for this debate:
“Duty rates were cut or frozen for around six years from early 2000…By autumn 2008 duty was lower…in real terms”
than at any point since 1996.
The Economic Secretary to the Treasury (Miss Chloe Smith)
Will the hon. Gentleman give way?
Owen Smith
In a moment. What is the reality of what the Government did—[Hon. Members: “Stop pointing!”] I think she is worth pointing at. What is the reality of what the Government did in the Budget? It merely takes us back to where we were in 2008. Far from it being a substantive change, this is once again smoke and mirrors from the Government. They say there is nothing they can do but there is a choice—there is always a choice in politics.
Miss Smith
Did the hon. Gentleman vote against the Finance Bill measures? Did he vote for the fuel duty cut that we proposed?
Owen Smith
We have heard that utterly specious remark all the way through. We voted against the entire Budget, which we feel is choking off growth in this country. There is a choice the Government could take—they could choose to act. They should act today and implement a plan—plan A or plan B, we do not mind what it is called. They should just do something.
The Economic Secretary to the Treasury (Miss Chloe Smith)
I very much welcome the opportunity to debate this motion and I shall happily correct a few points that the hon. Member for Pontypridd (Owen Smith) has just made. Most importantly, this is a chance to listen to and consider the contributions of hon. Members on both sides of the House. I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing the debate and moving the motion and I apologise to him for missing a few minutes of his speech initially. Let me take this chance also to congratulate the Backbench Business Committee and the 100,000 and more petitioners who have put this issue forward for debate today. Unlike many Opposition Members, I do not disparage the motion. I respect this as an avenue of democracy.
Even though average pump prices have fallen over the summer, there is little doubt that the cost of fuel remains a very difficult issue and a concern to many families and businesses across the country—and, indeed, to young people. The hon. Member for Wells (Tessa Munt) mentioned students and the Youth Parliament. Let me say for the record and for the hon. Members for Pontypridd and for East Lothian (Fiona O'Donnell), that both my primary and secondary schools were comprehensives. I fully respect the needs of all those across the whole of society.
Elizabeth Truss
Does the Minister agree that many people in rural Norfolk where she grew up will struggle to find an alternative to using their car, and that we need to reflect that in our policies?
Miss Smith
I welcome that point from my hon. Friend and near neighbour. I should like to reassure her constituents, as well as motorists up and down the land, whether they are in rural, suburban or urban areas, that this Government have listened to their concerns and will continue to do so. However, today is not the day to try to change taxes—that is for the Budget. Today is to listen.
From our first Budget last year—indeed, from when we were in Opposition, when we said, as the hon. Member for Pontypridd has pointed out, that we would introduce a fair fuel stabiliser—this coalition Government have listened and acted. In the Budget in March, we announced a £2 billion package to support motorists at a time of record pump prices. However, the Labour party, including the hon. Gentleman, whom I do not believe was there at 4 am when many of the rest of us were, failed to support that package, which was supported by the Federation of Small Businesses on behalf of, for example, van drivers.
Before I come to specific points raised in the motion, I will explain why the Government took the action that they did in the Budget.
Owen Smith
Does the hon. Lady agree that the price stabiliser is not what it was described as being by the Chancellor and the Prime Minister when they were in opposition? It does not link pump prices to oil prices.
Miss Smith
It is the Labour party that wants a price stabiliser, and I shall come to that. Our fair fuel stabiliser aims to do other things, and I shall deal with that in due course.
Motoring is an essential part of everyday life for many households and businesses, and the cost of fuel affects us all. The Government recognise that the price of petrol is a significant part of day-to-day spending. We know that high oil prices are causing real difficulties with regard to the affordability of motoring. It is important that a responsible Government listen, consider and act.
It was the previous Government who, in the 2009 Budget, introduced a fuel duty escalator. That involved planning for seven fuel duty increases after the 12 that they had already made. None of those planned increases was subject to either oil price or pump price movements. Despite what Labour Members may claim now, and the synthetic anger referred to earlier in the debate, the previous Government had no plans whatever to support motorists. The right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) said, “We are where we are.” It is regrettable that the previous Government did not act to prevent us from being where we are. From the very beginning of this coalition Government, we have looked at how we could ease the burden on motorists. We acted with a £2 billion plan to ease that burden.
Miss Smith
I am terribly sorry, but I am very short of time. I need to explain how we acted. We acted by cutting fuel duty by 1p per litre from 6pm on Budget day.
Miss Smith
Time is short; hon. Members will appreciate that I need to press on. We acted by cancelling the previous Government’s fuel duty escalator for the rest of the Parliament. We acted by introducing a fair fuel stabiliser that will better share the burden of high oil prices between motorists and oil companies, and we acted by ensuring that there are no fuel duty increases at all this year.
Miss Smith
No. I am sorry, but there is not time.
I need to explain to the hon. Lady that we deferred the inflation-only increase that was planned for April 2011 to January 2012, and deferred the 2012-13 increase to 1 August 2012.
Miss Smith
No, I will not. I need to press on.
There have been calls for the Government not to go ahead with those two duty increases. I can understand that, and my right hon. Friend the Chancellor understands that, but let us not forget that those increases remained in the Budget so that we can deal with the record deficit that we inherited. This is a time of international instability, and the difficult decisions that the Government have taken to tackle the deficit have made Britain safer for householders. Our reduction plan has led to low interest rates, which help householders through their mortgages.
Miss Smith
The hon. Lady will appreciate that I need to leave time for Back Benchers to respond to the debate. In addition to the cut in fuel duty, which hon. Members have, of course, welcomed today, the Budget announced further support that will benefit motorists. Our fuel duty cut came on top of the freeze in vehicle excise duty for hauliers that hon. Members mentioned.
Mr Deputy Speaker (Mr Nigel Evans)
Order. The Minister has made it absolutely clear that she is not giving way for the duration of her speech.
Miss Smith
Thank you, Mr Deputy Speaker.
I need to explain that our fuel duty cut was on top of an increase in approved mileage allowance payments; that helps employees and volunteers who use their own cars. I think that, in the light of their speeches this afternoon, my hon. Friends the Members for Romsey and Southampton North (Caroline Nokes), and for High Peak (Andrew Bingham), will welcome that. That is all on top of the increase in the personal allowance, cuts in corporation tax, above-inflation increases in child tax credits, and the triple guarantee for pensioners. That is real help for motorists, businesses and families, as my hon. Friend the Member for Truro and Falmouth (Sarah Newton) said.
Let us not forget that although the Opposition have talked so much today about helping motorists, they could not even bring themselves to offer their support for the fuel duty cut, or the increase in the supplementary charge on oil and gas companies to fund it, in the Finance Bill debates.
Miss Smith
No; I am terribly sorry. Today, average pump prices are approximately 6p per litre lower than they would have been if we had continued with the previous Government’s planned escalator, which the Opposition are so keen to airbrush out of history. That means that a typical Ford Focus driver would have been £56 better off in 2011-12, and an average haulier £1,700 in 2011-12. [Interruption.] Opposition Members are chuntering and trying to suggest that motorists would be better off under their plans for an escalator and a VAT rate of 17.5%. We know that the right hon. Member for Edinburgh South West (Mr Darling) was planning to increase VAT.
The Opposition cannot say where £12 billion of extra expenditure would come from, and it is simply not true that motorists would at present be better off under the previous Government’s plans. When comparing the changes that we announced in the Budget with the previous Government’s fuel duty and VAT plans, pump prices are approximately 3p a litre lower. By the end of the Parliament, average pump prices will be 3.5p a litre lower. Cutting fuel duty and scrapping their escalator will more than offset the impact of the increase in VAT.
I shall quickly address the issue of whether oil price falls this summer have been passed on at the pump, which is a matter of concern to hon. Members who have participated in the debate and to many of our constituents. For motorists to realise the benefits, as we all wish them to do, retailers need to pass those on at the forecourt. Individual pricing decisions are for retailers—we have heard about competition from my hon. Friend the Member for Worcester (Mr Walker) and others—and the Office for Fair Trading is not aware of any evidence that would allow it to launch an investigation.
The Chancellor has made it clear that although the Government can control the duty rate it cannot control the world oil price. After such a good debate, I hope that I speak for Members from all parts of the House in saying that we all want motorists to benefit as much as possible from falls in oil prices. A number of complexities mean that pricing is not the same at every petrol station in every part of the country, but overall prices today are lower than they were at the beginning of the summer, just as they were lower at 6 pm on Budget day after we cut prices by 1p. They are 6p a litre lower because of the actions taken by this Government.
Furthermore, I regret to say that the motion is wrong about fuel duty receipts, which have not fallen by £1 billion since 2008. Official receipt data show that receipts have increased in recent years. Let me deal briefly with the fair fuel stabiliser. The support we are providing to the motorist needs to be paid for. My hon. Friend the Member for Beverley and Holderness (Mr Stuart) referred to sound Conservative principles, and this is one of which I am proud—things must be paid for—and it is fair that companies make a higher contribution. Only in that way can we support the motorist in a way that is fair, affordable and transparent. Updates on the introduction of a rural fuel duty rebate will be available to hon. Members who are interested in that, and we must do what we need to do in a sustainable manner.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
It is an honour to wind up the debate, which has been far ranging and widespread, both geographically and in content. Luckily, it was a virtual tour of our constituencies—had it been a driving tour, it would have cost a veritable fortune.
The debate has taken place after much pressure from outside, and I pay tribute to the hon. Member for Harlow (Robert Halfon) who, since coming to the House, has been a great champion of this issue. In fact, in the previous Parliament, he might well have spoken for the Scottish National party and Plaid Cymru. I hope that I am not damaging his career too much by giving the praise that only an SNP Member could give to boost it in that way.
The right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) and my hon. Friend the Member for Dundee East (Stewart Hosie) have pointed out that the House has been rotating around us nationalists. The hon. Member for Foyle (Mark Durkan) pointed out in an intervention that the SNP has been constant on the issue, and whoever has been in government and opposition have played their points as such. The price of diesel, at £7 a gallon in my constituency, is damaging to families and, in particular, to businesses.
Mr MacNeil
I cannot give way.
Many hon. Members, including the hon. Members for Worcester (Mr Walker) and for Beverley and Holderness (Mr Stuart), pointed out that tax was up, but revenue was down. As the hon. Member for Camborne and Redruth (George Eustice) said, it is a regressive tax, which is something that we should change. Three years ago, Iceland had a huge crash, but today it has lower unemployment and a greater growth rate. Interestingly, the cost of its fuel is about two thirds the cost in the UK. The UK has the highest petrol taxes in Europe, with Greece in second place. The message is surely going out to the Treasury and the Chancellor: no tax rises in January.
Question put and agreed to.
Resolved,
That this House welcomes the 1p cut in fuel duty at the 2011 Budget, the abolition of the fuel tax escalator, the establishment of a fair fuel stabiliser and the Government’s acknowledgement that high petrol and diesel prices are a serious problem; notes that in the context of the Government’s efforts to tackle the deficit and 5 put the public finances on a sustainable path, ensuring stable tax revenues is vital for sustainable growth; however, believes that high fuel prices are causing immense difficulties for small and medium-sized enterprises vital to economic recovery; further notes reports that some low-paid workers are paying a tenth of their income just to fill up the family car and that high fuel prices are particularly damaging for the road freight industry; considers that high rates of fuel duty may have led to lower tax revenues in recent years, after reports from leading motoring organisations suggested that fuel duty revenues were at least £1 billion lower in the first six months of 2011 compared with 2008; and calls on the Government to consider the effect that increased taxes on fuel will have on the economy, examine ways of working with industry to ensure that falls in oil prices are passed on to consumers, to take account of market competitiveness, and to consider the feasibility of a price stabilisation mechanism that would work alongside the fair fuel stabiliser to address fluctuations in the pump price.
Mr Deputy Speaker (Mr Nigel Evans)
Several hon. Members were not called in this evening’s debate because it was very popular and there were time constraints. That will be noted for further debates.
Independent Police Complaints Commission
(12 years, 5 months ago)
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Mr David Lammy (Tottenham) (Lab)
Thank you, Mr Deputy Speaker, for giving me the opportunity to debate the Independent Police Complaints Commission, an organisation that has taken on increasing importance in recent months. It is right in such a debate to begin by thanking all local officers in Tottenham for the work that they do day in, day out. The vast majority of them serve us very well indeed. Some of those brave men and women serve their own community, and it is clear that they put others ahead of their own needs. All of them put their lives on the line to keep Tottenham safe, and I thank them for that.
However, for all the bravery of those officers, things very occasionally go wrong, and when they do individual officers must be held to account for their decisions and actions. There is no way of escaping Tottenham’s recent history: there is a history of people in Tottenham dying during or following police contact. I wish to God that this were not true, but anyone who has lived in Tottenham knows just how those deaths have strained the relationship between some of our residents and the police. With the death of Cynthia Jarrett in 1985, Roger Sylvester in 1999, and Mark Duggan this August, Tottenham’s history has been punctuated and measured by these tragic events.
Of course, deaths in police custody or following police contact are not only a Tottenham issue, as, for example, the unexplained death of Christopher Alder in Hull more than a decade ago shows us, and they are not just an issue for the black community. Recent years have seen the deaths of Ian Tomlinson and Jean Charles de Menezes due to police actions. But in Tottenham we do seem to bear our share of these tragic events.
It takes years—decades—of effort to build community relations and to foster a two-way sense of trust between residents and the people who should be their police. Despite a lot of good work, it is the list of deaths that everyone remembers. It is not just the fact that a person has died following contact with the police that is important; how the death is investigated and who carries out the investigation are just as important. That is what I want to discuss this evening.
Before describing how I think the IPCC can be improved, it is important to recognise that the journey to the creation of an independent complaints authority has not been short or without controversy and resistance, because we have come a long way indeed. In 1985 Lord Scarman produced his groundbreaking report on the Brixton riots four years previously. He was deeply concerned about the total breakdown of trust between the police and some of the communities they were supposed to serve. His report called for an independent body to be set up to investigate police complaints as a means of restoring trust.
Unforgivably, it would be another 19 years before the IPCC opened for business. Instead of the Government agreeing to what was so obviously needed, deckchairs were duly rearranged and the old Police Complaints Authority was set up to replace the Police Complaints Board, but it proved just as hapless. Changing a word in the title proved easier than changing the way of working, because in those days it did not matter whether it was the Police Complaints Authority or the Police Complaints Board that conducted the investigation. They were not investigations for the victim, their family or the concerned community; they were investigations by the police and for the police.
The opening of the Stephen Lawrence murder trial yesterday again brings the failures of the Police Complaints Authority into sharp public view. The Macpherson report on Stephen’s death highlighted these failures perfectly. It noted that the authority’s report on the Metropolitan police’s handling of the death was known as the Kent report, principally because the Kent police handled the inquiry into the Metropolitan police. The Kent report began making excuses for the Metropolitan police in its preface:
“The depth of detailed scrutiny applied in the complaints investigation could have found fault in most police criminal investigations. The reader of this report should bear in mind that the benefit of hindsight and the luxury of having time to assess all of the information that was available to the MPS is bound to reveal errors, omissions and flawed judgement.”
The Macpherson report highlighted the shocking extent to which the Police Complaints Authority examined whether racism impacted on the Met’s investigation, stating:
‘Many officers were asked directly whether racism had an impact upon their activities in the case. Predictably they replied in strong terms denying such impact. The result was the finding by Kent that: “Kent Police have found no evidence to support the allegation of racist conduct by any MPS officer involved in the investigation of the murder of Stephen Lawrence.”’
Scarman’s warning in 1985 about the lack of independent oversight of the police had become, 12 years later, the whitewash of the Kent police’s so-called investigation of racism in the Met. Like the Scarman report, the Macpherson report called for an independent body to investigate police complaints.
Thankfully, one Home Affairs Committee report later, the Government listened that time and the IPCC was set up in 2004. Make no mistake: the IPCC is certainly an improvement on what went before, as the police are not investigating themselves. We are pleased about that, but not very pleased, and certainly not content. The death of Mark Duggan tells us why we should not be content with what we have, because it is not yet good enough.
Keith Vaz (Leicester East) (Lab)
I congratulate my right hon. Friend on securing this important and timely debate. Does he share my concern, and that of members of the Home Affairs Committee, that several months after the current chair of the IPPC announced that he was leaving, there is still no replacement? We now understand that the job is to be advertised again. Does he agree that there needs to be a permanent chair to provide that organisation with good leadership?
Mr Lammy
I totally agree with my right hon. Friend. I was surprised when I found out that that important role in our country had been vacant for so long. I hope that when he comes to the Dispatch Box to reply to the debate, the Minister will explain that.
The IPCC has two roles, police scrutiny and public guardianship. It is charged with investigating complaints independently, and with the fullest scrutiny, but its role does not stop there. Given that it investigates on behalf of all of us, it must communicate and work with the public.
In the case of the death of Mark Duggan, it remains to be seen whether the IPCC fulfilled its primary duty to scrutinise the actions of the police on 4 August, but it is vital that the commission does all within its power to convince the Duggan family and the wider Tottenham community that its investigation is thorough, impartial and independent. Without that, we will be back to the bad old days of the Kent report and the police investigating police, and I hope that the IPCC do not take us there.
We wait to see whether the IPCC will fulfil its primary duty, but even in the days immediately after Mark Duggan’s death it was clear that it had failed completely and utterly in its secondary duty—that of guardianship. Mark Duggan’s family were forced to learn of the death of their son and father from watching television. That is beyond unacceptable. Why did nobody from the IPCC contact the family on the day of his death, when it had opened its investigation? Despite warnings from people throughout the community, the IPCC failed to communicate with the family until two days after the shooting, and even then it was unable to communicate anything of substance to them. That is not good enough.
Despite employing 15 media officers, the IPCC failed to make an appearance in the media to reassure a sceptical public—certainly in my community—that it would investigate Mark Duggan’s death thoroughly, impartially and independently. Its inability to fulfil that responsibility is difficult to explain. There was no direct communication by the IPCC to the affected communities in Tottenham in the hours and days after Mark Duggan’s death. Would it have been too difficult to hand-deliver a letter to residents of the affected areas, reassuring them of the investigation, explaining the known facts and appealing for calm and co-operation? No, it would not—but yet again, that did not happen.
In the absence of any word from the IPPC, a dangerous vacuum was allowed to open up, and rumours were allowed to take hold in the place of hard facts. That is not good enough. When the supposed facts were released to the media, they were quickly retracted. It was put out that there had been an exchange of fire in the incident that led to Mark Duggan’s death, but that turned out not to be true. Why did that happen? Again, that is far from what we would expect of an organisation with the role of public guardianship.
To this day, communication between the IPCC and Tottenham residents, as well as with the wider black community, appears sparse at best and unthinking at worst. That has to change. The magnitude of the IPCC’s task is immense, and some of the signs leave little hope in the strained community that I represent. Two thirds of people have heard of the IPCC, a number that has barely budged since the body was founded seven years ago, but one third of those think that it is part of the police—again, a figure that has barely budged. Ethnic minorities are even less likely to have heard of the IPCC, and they are more likely to believe that it is part of the police. That is the scale of the challenge awaiting us.
Jim Shannon (Strangford) (DUP)
Is the right hon. Gentleman aware of any police investigations in other regions of the United Kingdom, such as Northern Ireland, Scotland or Wales, that could be a catalyst for, and an example of, an improvement on what he has described?
Mr Lammy
I am grateful for any suggestions, and I suspect that the Government will be, too. I know that communities beyond the black community have had concerns about how the police investigate the police, and I am sure that in Northern Ireland there are lessons that need to be carefully reflected on, developed and learned.
The IPCC has to do more to convince a sceptical public that it is truly independent and has learned the lessons of Scarman and Macpherson. I hope that the Duggan inquiry will go some way towards doing that, but the IPCC, given the way in which it handled those initial days, has made things hard and has not lived up to those expectations. What assurances can the Minister give the people of Tottenham that the Duggan inquiry will be thorough and independent? A good start would be to address the shocking statistic that 30% of IPCC investigators are former police officers, and far fewer are from an ethnic minority background. Investigators such as police officers must look like the communities they are working in, and the IPCC must never allow itself to appear simply as a replica of the old Police Complaints Authority. What assurances can the Minister give that those figures will change?
The IPCC can work only under its current powers, and it is time for those powers to change. At the moment the IPCC cannot compel a police officer to speak to it unless that officer is a named suspect in a criminal investigation. The IPCC needs the power to speak to everyone, including the police, right up to the top. Will the Minister assure me that the IPCC will be given the powers to compel police officers to co-operate with its inquiries?
At the moment the IPCC does not have the power to suspend a police officer pending an investigation. The officer involved in the Mark Duggan case has not been suspended and is still working. The Minister will understand that members of the community that I represent find that quite incredible. Will he assure me that the IPCC will be given the power to suspend police officers who have been involved in a death due to police contact?
At the moment the IPCC does not have the power to initiate its own prosecutions following an investigation. In the Roger Sylvester case, as in others, power is often handed to the Crown Prosecution Service, which then does not prosecute. There is an inquest that brings in an unlawful killing verdict, and the families feel very let down indeed. The initial inquiry should have that prosecution power in the first place. Will the Minister explain why the IPCC finds itself caught between the coroner, the CPS and the police in relation to its powers, and say whether he will review what powers are needed following the concerns that have been raised not only in the cases I have mentioned, but in successive cases over many years?
At the moment, the IPCC does not own the scene of an investigation until some time after an incident has taken place. The scene of the Duggan death was not owned by the IPCC until hours after the shooting. That has to change. Will the Minister assure me that the IPCC will own the crime scene right from the beginning in recognition that there can be tremendous concern and anxiety about the fact that the initial officers caught in the incident can effectively own the scene for hours before any degree of independence takes over? The IPCC budget is tiny. It is £35 million a year, which is less than that of every single force in the country.
John McDonnell (Hayes and Harlington) (Lab)
I want to mention something I have learned from recent meetings with the IPCC. Is my right hon. Friend aware that a very limited and relatively small number of cases are managed cases, so the vast bulk of work that the IPCC is dependent on is dealt with by the police themselves?
Mr Lammy
With that budget, one can understand that the IPCC simply cannot get through the level of complaints that are being made. In fact, a sub-set of complaints is in effect being handled by the police. Again, we will need reassurances about whether the budget is appropriate for the sort of organisation that has to be armed to do this job independently and effectively. This is why there is a trust deficit in what the organisation does, and I hope that the Minister will respond to it.
The Minister will, of course, need to start by reviewing the many deaths that take place following police actions. Since 1999, according to the Library, 322 people have died in or following police custody, yet not one police officer has been jailed for any of those incidents. These are shocking figures. I ask the Minister to reflect on the sheer extent of those figures, whether he is content, and whether there should not be some independent review into that aspect of its work.
I hope that the Minister will commit to an inquiry into the disgraceful revelations regarding the handing over of the wrong body to the family of Christopher Alder, who died in police custody in April 1998. Mr Alder was a paratrooper who fought for his country, yet he was left to choke to death, handcuffed on the floor of a police station in Hull. The fact that his family found out just two weeks ago that the body they buried was not in fact his, and that he is in a mortuary over a decade later, is a disgrace and of tremendous concern in a civilised country. I hope that the Minister will undertake an inquiry and get involved. I am pleased to see my right hon. Friend the Member for Leicester East (Keith Vaz), the Chairman of the Home Affairs Committee, in his seat; I am sure that he is as concerned as I am.
We need a review of deaths in police custody. We need a review of the IPCC’s powers and resources, and we need to understand that it is truly independent. My community waits to see its conclusions in relation to the death of Mark Duggan, and I hope that the Minister can reassure them.
The Minister for Policing and Criminal Justice (Nick Herbert)
I congratulate the right hon. Member for Tottenham (Mr Lammy) on securing this debate. I appreciate his long-standing interest in this topic and his immediate concerns about the ongoing investigation by the Independent Police Complaints Commission into the events surrounding the shooting of Mark Duggan in his constituency on 4 August. The whole House will recognise the passion with which he speaks on these issues and, I believe, will share his overriding concern, which is to secure community confidence in policing. That confidence is essential to ensure policing by consent, which we so prize in this country.
I join the right hon. Gentleman in praising the police for the work that they do, including that to secure order on our streets in the summer. That work is often difficult and dangerous. It is nevertheless imperative that when there are instances where police action goes wrong and there is culpability, there must be a robust system to ensure that that confidence in policing is maintained. That is as much in the interests of the police themselves as of those of us who guard the public interest to ensure that it happens.
I should like to address two key issues that the right hon. Gentleman raised. First, I will set out the background to the IPCC, including how it is set up and the way it operates, and deal with some of the issues relating to budgets and staffing. Secondly, I want to turn to the future and set out the issues confronting the IPCC in the context of the Government’s overall programme for reform of the system to ensure that we can maintain confidence in the police complaints system and that it plays a key role in the new policing landscape.
The police are a monopoly public service and their officers exercise coercive powers over citizens. They are expected to, and must, uphold the highest standards of behaviour and provide a policing service that enjoys the confidence of the public. The police complaints system is an important safeguard in holding the police to account. The complaints system should focus on allowing people who are dissatisfied with the provision of a policing service to make a complaint, and that complaint to be responded to appropriately.
There needs to be public confidence in the integrity and independence of the complaints system. It was the importance of that independence that gave rise, for the reasons the right hon. Gentleman described, to the establishment of the IPCC, in preference to the bodies that preceded it, in 2004 under the Police Reform Act 2002. It is worth reiterating that the IPCC is independent by law and makes its decisions independently of the police, Government, complainants and interest groups. This means that all complaints must be dealt with in accordance with legislation and the guidance issued by the IPCC and agreed by the Home Secretary. All complainants who have their complaints dealt with by the police in the first instance have a right of appeal to the IPCC. It independently investigates the most serious incidents and complaints. It regularly reports publicly on the outcome of investigations and it makes local and national recommendations as appropriate to ensure that the same things do not go wrong again. Its reports have to stand up to the scrutiny of inquests and courts.
The Government no more direct the IPCC than we direct police forces. It is essential that it remain an independent body.
Nick Herbert
I will come on to that issue.
I would first like to respond to the concerns of the right hon. Member for Tottenham about the proportion of IPCC investigators who come from a police background. He said that about 30% of investigators and about 10% of the IPCC’s staff overall come from a police background. Let us put it the other way around: the vast majority of investigators—70% of them—do not come from a police background. The contribution of those from a law enforcement background is vital in ensuring that the IPCC conducts competent and robust investigations. The idea that the IPCC is an organisation that consists of police officers investigating other police officers is a grotesque caricature, because of its make-up, the way it operates, and the way Parliament established it.
The right hon. Gentleman also raised the issue of the IPCC’s budget. Its budget is some £35 million a year and it employs approximately 400 staff. That does not make it a small organisation by any standards. Shortly before I was elected to the House in March 2005, the IPCC had a total of 72 investigators, deputy senior investigators and senior investigators. In March this year, it had 121 such investigators. Its role has broadened in some respects, but it is not an organisation that has been starved of public funds. Of course the IPCC needs to manage with a diminishing budget during the current period, because all policing organisations have to make savings. Nevertheless, in 2010-11 it started 164 investigations and completed 154, which is more than 50% more than in the previous year. I therefore do not believe that allegations about resourcing can be made about this organisation.
John McDonnell
What proportion of complaints lead to managed investigations that are investigated directly by the IPCC?
Nick Herbert
I do not have that figure to hand, but I am happy to let the hon. Gentleman have it after the debate. Of course, we have a structured system that ensures that the commission has the overall supervision of complaints, which I will come to, and that it deals directly with the most serious complaints. That is as it should be.
The IPCC will not become complacent, nor will this Government let it. Having made those points to the right hon. Member for Tottenham, I do not want him to think that I am dismissing what he has said. I hope he knows that I am not.
Following four years’ operational experience, the IPCC conducted a review of the police complaints system, the aims of which were to check how well the system was delivering against the original aspirations and to ensure that it continued to improve. The review found that some of the statutory provisions for the handling of complaints were unnecessarily bureaucratic or no longer necessary. Through the Police Reform and Social Responsibility Act 2011, which we have just passed, the Government are introducing reforms that will put an emphasis on police accountability and make the police complaints system more effective and efficient. That will mean giving police forces additional discretion to deal with low-level complaints, which will free up the IPCC to deal with the most serious and high-profile complaints. It is important to distinguish between matters of public concern about performance issues, in which case what often matters is that there is strong police accountability and responsiveness, and those on which there are serious complaints about a breakdown that needs investigating by the commission.
We are giving the IPCC new powers to recommend and direct that unsatisfactory performance proceedings be brought against an officer when a complaint reveals that their performance is unsatisfactory. We are also giving the commission more flexibility in how it carries out its administrative functions, so that it has the freedom to direct more resources to carrying out its investigations. Those changes and others will improve the handling of police complaints by removing bureaucratic processes from the system, but it is important to realise that we are not stopping there.
In July, on the back of the revelations about phone hacking, we announced to Parliament that we would give further consideration to whether the IPCC needed additional powers, including the power to question civilian witnesses during the course of its investigations, and whether it should be given greater powers to investigate institutional failings in police forces. As the right hon. Gentleman mentioned, the IPCC is also in the early stages of a review of its powers, resources and approach in relation to investigations arising from deaths following police contact. That is obviously a very serious issue, and I know the IPCC has been in touch with him, and will keep in touch, about that piece of work. I will take the closest interest in it as well. In addition, we are setting up police and crime commissioners, to be elected a year from today, to hold the police to account.
I also want to respond to the points made about the IPPC’s chairmanship. I am aware of concerns that we do not have a permanent chairman at the moment. We are taking particular care over the position, precisely because it is crucial to ensure the success of the IPCC. A new chair should be in place early in the new year, but until then Len Jackson, a highly effective individual in whom the Government have complete confidence, has agreed to remain interim chair. We are determined to secure the right appointment to the organisation, because we invest considerable importance in its independence and integrity. It has new challenges to meet and old challenges that still have to be met. I accept the right hon. Gentleman’s concern about it, and I want to assure him and the Chair of the Home Affairs Committee that the Government will continue to ensure that the IPCC does the job that it was set up to do—
Westminster Hall
(12 years, 5 months ago)
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Eurozone Crisis
(12 years, 5 months ago)
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Mr John Baron (Basildon and Billericay) (Con)
Good morning to you, Mr Caton. In raising concerns about the UK’s liability to the eurozone bail-out via its contributions to the International Monetary Fund, I will ask various questions of the Minister. I will question the assumption that we always get our money back, whether the IMF’s policy will work and why the IMF should be getting involved at all.
That we are talking about large sums of money cannot be denied. Our liability through the European financial stabilisation mechanism totals some £6.5 billion. Our liability through the bilateral loan to Ireland exceeds £3 billion. Despite Government assurances to the contrary, it does not stop there. Our IMF liability to the Greek, Portuguese and Irish bail-out packages announced before May 2011 totals some £3.5 billion, and that does not include the latest Greek bail-out. Adding in our additional contributions, which are almost doubling—from some £10 billion to nearly £20 billion—it is obvious to all that we are soon talking some big figures. I do not think the Minister can deny—I shall welcome his intervention if he thinks otherwise—that some of the additional IMF money will be routed through to the eurozone crisis. Therefore, the Government’s claim that our liability stops with the EFSM and our bilateral loan to Ireland simply does not wash.
Let me be clear: I support the IMF’s work. IMF programmes can and do work under certain conditions. However, there are real risks to those IMF contributions routed through to the eurozone crisis.
The Government take great comfort from the fact that no country that has lent money to the IMF has ever lost that money. However, this recession is very different. Having been a fund manager in the City of London, running pension funds, charity money and funds for private clients, I know that it is always dangerous to say, “This time it is different,” but economic history makes that clear. Recessions since the great depression have always been de-stocking events, where the problem has been a fall in demand. In response to that, the Keynesian approach of stimulating the economy through additional demand—if necessary, by borrowing—has by and large done the trick. This recession, however, is a deleveraging recession, which has been built on excessive debt. Governments and consumers have taken on too much debt. Demand is not the issue; excessive debt is. The only remedies for this recession are to pare down the debt and attain greater growth through increased competitiveness.
I worry that the Government are underestimating the scale of the debt. There is £300 billion-worth of Italian debt to be rolled over in the coming 12 to 18 months. The eurozone went to the Chinese, who have massive reserves, but the Chinese did not want to know. The fact that the IMF wants an additional £10 billion from us clearly suggests that it does not have our original £10 billion. The Government would be foolish to ignore the omens. Does the Minister accept that there is at least some risk that the UK could lose some of the money routed through the IMF to the eurozone crisis? Again, he is welcome to intervene if he so wishes.
Mark Reckless (Rochester and Strood) (Con)
My hon. Friend refers to £10 billion and another £10 billion. I understand that when the issue was discussed in the Joint Committee on Statutory Instruments, the Minister said that, broadly speaking, our liability to the IMF would be £20 billion. However, I understand that another funding source exists that may mean that our liability is already £40 billion. Can my hon. Friend enlighten us?
Mr Baron
My hon. Friend is right to raise that issue. There is an additional liability that we know relatively little about, because the Government have not come to the House to explain it. I hope the Minister will take the opportunity in this debate to address that concern. Is that true? What is the extent of the liability? How would it be called upon in the event of certain contingencies?
Mark Field (Cities of London and Westminster) (Con)
My hon. Friend referred to the idea that we have never—hitherto, at least—lost money to the IMF. Does he recognise that there is potentially a huge opportunity cost in lending money, often at low interest rates, to the IMF? As he will know, Parliament was told at the time that the bilateral deal struck with Ireland had tremendously advantageous interest rates. There has been a haircut on that interest rate across Europe, which could well happen to any future IMF contributions that we make.
Mr Baron
My hon. Friend is absolutely right. There is a real danger that we underestimate the extent of the debt and the defaults that could happen. One is not joining the bandwagon of warning signals. The debt that has to be rolled over is quite clear for all to see, but I do not think the Government are acknowledging that. Simply to fall complacently back on the fact that no money ever loaned to the IMF has been lost is to miss the point completely.
Ian Paisley (North Antrim) (DUP)
I congratulate the hon. Gentleman on securing the debate. He mentioned a number of times the bilateral loan, which is of significant interest to my colleagues and me. He may be interested to know that last December, I wrote to the Chancellor to suggest that Her Majesty’s Government should hold the deeds of all properties in the United Kingdom that are in the possession of the National Asset Management Agency, the Irish state bank, so that it cannot disproportionately influence our market by the unilateral sale of those properties. Does the hon. Gentleman agree that that is one way of protecting ourselves and our own local market against NAMA?
Mr Baron
That is certainly one option that should be explored more thoroughly. I referred to the Irish loans because the Government line to date has been that our liability to the eurozone crisis stops at the bilateral loan to Ireland and at our existing £6.5 billion contingency liabilities to the EFSM. That is simply untrue, given the additional contributions through the IMF.
Will additional IMF funding work? That will simply reinforce existing eurozone policy, which is itself fundamentally flawed. The existing policy simply does not address the core causes of the crisis, which are a lack of competitiveness and Governments spending too much. Debt is the problem, as I have said, not demand. We have had 14 or perhaps even 15 gatherings, conferences and summits to save the euro, but each has failed to address the core reason for the problem, which is a fundamental lack of competitiveness. Where are the swathes of cuts to regulation? Where is the introduction of measures to improve competitiveness? They simply have not been there. All that has happened, and all the concern there has been, is to put together more debt to solve an existing debt crisis.
Mr Douglas Carswell (Clacton) (Con)
The Government say that no one has ever lost money by lending to the IMF. Can my hon. Friend tell me whether the IMF previously lent money to make a debt crisis worse, as it is now doing? Previous IMF bail-outs involved a debt default or restructuring and devaluation, not more bail-outs and borrowing. Surely, putting the IMF in charge in that way is making things worse. Putting Christine Lagarde at the helm is a bit like putting a debtor in charge of a bank.
Mr Baron
My hon. Friend nearly stole one of the lines I was about to come out with. Fundamentally, I agree with him. The problem is caused by excessive debt: that is what makes this recession different from previous ones, yet the solution the eurozone leaders have come up with is to pile on more debt. That is not the solution. All it is doing is reinforcing failure and failed policies.
There are further reasons why this policy will not work. I cannot think of a monetary union in the economic history of this planet that has succeeded without fiscal union also being in place. Again, I call on the Minister to intervene if he can correct me. To pursue monetary union without fiscal union is a doomed policy. Can the Minister come up with one example of successful monetary union in a country where fiscal union has not also been present? As I say, I would welcome his intervention, but I doubt that he will have such an example.
As my hon. Friend the Member for Clacton (Mr Carswell) has suggested, another reason why this policy will fail is that it fundamentally ignores the importance of devaluation to recovering economies. Usually, there are three elements in an IMF package: reduced spending, increased revenue and the ability to allow the currency to devalue. That last bit is important because a currency that devalues helps to take the strain off the economy. If an economy is deemed to be, say, 25% uncompetitive compared with its neighbours, allowing its currency to depreciate to about the same extent will go a long way towards taking the strain. If we cut off that option, that 25% gain in competitiveness can really be brought about only by cuts to public services, salaries and pension funds. That is simply not an option, and for that reason it makes those austerity packages so much worse.
To my knowledge, the IMF has never lent to a country or put in place a programme in a country that cannot devalue, which is why the Government line that only three of the 53 IMF packages go to the eurozone is disingenuous. Can the Minister name one country, one package in those 50, where devaluation is not an option? That is the fundamental difference. In the three packages in the eurozone, devaluation is off the table, which will make the austerity packages worse.
Having asked the Minister several questions, I was hoping that a number of notes would have been passed to him so that we could get some answers. I am sure he has pre-empted my questions and has the answers in his brief. Again, I would welcome him intervening to name one of those packages outside the eurozone in which devaluation is not an option. They do not exist. Devaluation is terribly important when it comes to an IMF package, but we are not allowing that option in the eurozone. That is another reason why these IMF packages will fail.
Neil Carmichael (Stroud) (Con)
When the IMF intervened in our economy in 1976, when Denis Healey was fighting to save the pound, that intervention arrested the devaluation of the pound.
Mr Baron
I agree to a certain extent, but my hon. Friend cannot deny that we had the ability to devalue. The currency markets could take the strain and, to a certain extent, they did. If we look at the strength of the pound since the second world war, we see that it has been a sorry tale of devaluation. Had that devaluation not taken place and had we been locked into a system that did not allow devaluation, my goodness me, the austerity packages introduced to compensate for that lack of competitiveness would have been very severe indeed.
Mr Christopher Chope (Christchurch) (Con)
I share my hon. Friend’s scepticism about the role of the IMF in the treaty that establishes the European stability mechanism. Does he recognise that that treaty is littered with references to the IMF, even to the extent of including a provision that says that no application can be made for a loan unless a similar application has been made to the IMF first?
Mr Baron
My hon. Friend is absolutely right. The IMF is an integral part of the rescue package for the eurozone, but that is something that the Government are, at least publicly, not willing to acknowledge, which is very wrong indeed.
I question why the IMF is getting involved in these bail-outs. The eurozone is a currency union. If a state within the United States got into trouble, the IMF would not be expected to ride to the rescue. The same should be true of the eurozone. I contend that Greece is not economically sovereign: it has no central bank, it cannot set interest rates, it has no currency, and it cannot devalue. I would go so far as to question whether Greece is even politically sovereign. At least in the United States, the people can elect the governor of individual states. That is not happening in Greece and Italy. In some cases, we do not even have a Government.
Mr David Nuttall (Bury North) (Con)
My hon. Friend refers to the possibility of an American state finding itself in financial difficulties. Of course that has already happened in California. Can he confirm that, in those circumstances, the IMF was not involved and was not able to contribute?
Mr Baron
That is absolutely right. My hon. Friend reinforces my point. The US is a currency union and the IMF is not expected to ride to the rescue there, yet it is expected to ride to the rescue of countries in the eurozone, which is also a currency union. That is completely wrong.
Glyn Davies (Montgomeryshire) (Con)
Let me ask my hon. Friend about the wider context. We are dealing with the financial aspects here, but I have always had a greater interest in the constitutional aspects. It seems that the euro is destroying democracy as we know it. Should we not consider that issue, especially as we are seeing the end of democracy in Greece and Italy? Europe has always been my concern, which is why I opposed the whole thing in 1975. We are now seeing the creation of a single country in Europe, to which the British people have not signed up, and that will eventually lead to trouble.
Mr Baron
My hon. Friend is absolutely right. If he needs confirmation, I suggest that he look at the front page of City A.M., where he will see what Angela Merkel has said about political union. There is a political deficit in the eurozone at the moment, which is why Governments are being appointed and not elected in Greece and Italy. That is a consequence of the fact that the eurozone and the EU are hellbent on political union at the cost of democracy and getting the people’s consent.
Mr David Davis (Haltemprice and Howden) (Con)
I congratulate my hon. Friend on a formidably cogent speech. Sadly, I will not be here to hear the Minister’s attempt to answer it. The democratic deficit that I am worried about is the one in this country. We are having this debate in Westminster Hall. Whatever its outcome, it will not change what happens in the IMF. Is there any way that Parliament can have a say on British taxpayers’ money being used in pursuit of an end that is against their interests?
Mr Baron
My right hon. Friend makes a good point. By raising such issues in Parliament and in collaboration with other like-minded individuals, we can hope that we can force the Government to think again and to look at the various mechanisms at our disposal in the House. If we do not raise these points in our Chambers, the Government will not answer the questions that need to be put to them. My right hon. Friend is right; we will not change anything today. The hope is that together we can force the Government to think again.
Let me go back to why the IMF is getting involved at all. What makes the situation even worse is that the eurozone has resources that could do much more to help. For example, the Bundesbank has reserves of £180 billion, £130 billion of which is in gold, and gold is going up in price. That is in stark contrast to our country and the action of the previous Government, who sold gold at near the bottom of the market.
I agree with the point made by my hon. Friend the Member for Clacton about why we supported Christine Lagarde, the former French Finance Minister, being put in charge of the IMF. It is like putting the debtor in charge of the debtors’ prison. Christine Lagarde has admitted on record that the bail-out arrangements broke the rules, but she said that that could be justified because we all had to rally round to save the euro, which itself is a political objective. That is complete nonsense and it does not augur well for the future, and the Government taking confidence in the fact that the IMF has signed off the packages does not augur well either. The IMF signed off the initial Greek package and look at what happened then: the situation went from bad to worse. I suggest that it will get worse still. Having some sort of blind confidence in the IMF signing off the packages is basically abdicating one’s responsibilities of Government to question what is going on. I do not see that detailed questioning happening at the moment.
I suggest that the Government’s line on this issue—their approach to the eurozone crisis—is symptomatic of their flawed approach generally to the euro. The Government seem to have fallen in behind the French and Germans in this cry that somehow we must save the euro. I suggest to the Minister that that is economic clap-trap. Binding divergent economies into a single currency without full fiscal union was, and remains, a massive mistake. Similar thinking warned us of the perils of exiting the exchange rate mechanism, yet look what happened then: almost to the day that we exited the ERM, our recovery started and it was a very strong recovery.
I suggest to the Minister that the sky will not fall in if the euro breaks up. We will still have, by and large, a free market, although I think that it could be improved, and we will still have consumers demanding goods. If anything, by not trying to save the euro, we could help to stimulate demand, because by trying to save the euro we are cutting off one of the key ways to improve competitiveness—devaluation. By cutting off that option, we are making the austerity packages worse; we have to add to the austerity packages because the countries in need do not have the option of devaluation.
Saving the euro is making matters worse, yet the Government are silent on this issue. They have shown no leadership. They have fallen behind the line that saving the euro is everything—it is not. I suggest that the Minister and the Government look at the experiences of Norway and Switzerland, which have their own currencies and free trade agreements with the EU. Those countries are doing very well. Saving the euro should not be the ultimate goal, because it is making the austerity packages worse.
Mr Stewart Jackson (Peterborough) (Con)
My hon. Friend is making a powerful and convincing speech, but is the situation not even worse than he suggests, in that the Government are effectively adopting a de facto policy of support for a tighter fiscal union, which in the long term will inevitably militate against this country’s strategic political and economic interests as a sovereign state?
Mr Baron
My hon. Friend makes a good point. By joining in the chorus that we must save the euro, we are implicitly supporting fiscal union within the eurozone, which is the wrong approach to take, certainly for this country’s interests. But, no doubt, the Minister will be able to clarify the Government’s position on that issue.
The same flawed approach by the Government has denied the people of this country a referendum on the EU and our future relationship with it, while allowing massive budget transfers to Brussels. Our budget increase totals about £21 billion or £22 billion. It will increase from £19 billion for the last seven years to about £41 billion in the next seven years. What could we get for that additional £21 billion or £22 billion? We could get 100,000 police officers on the streets for each of those seven years, 100,000 nurses in our hospitals or 100,000 teachers in our schools. How could we stimulate growth with that money? We could cut basic rate income tax by 1p in the pound for each of the seven years. We could cut small business corporation tax by 6p in the pound. My goodness me—would that not be a concrete measure to stimulate growth and encourage competitiveness in this country?
I am afraid that the Government’s thinking on this issue is intellectually incoherent, economically flawed and, perhaps worst of all, flies in the face of what the majority of people in this country want. What we want is leadership—strong leadership. We hear noises such as, “Oh, regulation from the EU hurts growth.” There is nothing new in that; saying it is just making noise for the sake of making noise. We have known that about EU regulation for years. What we want is strong leadership that repatriates powers to this country, stops the salami-slicing of our political sovereignty, encourages the establishment of a genuine free market in Europe and guards against our liabilities to the eurozone crisis. But I do not see that strong leadership in front of me today, which worries me and a number of my colleagues and right hon. and hon. Friends greatly. Meanwhile, we stumble on.
I suggest to the Minister that this country will wake up about this issue one day and that we will renegotiate with the EU. My hope is that we will renegotiate a free trade arrangement, similar to the arrangements that Norway and Switzerland have, and that we have a constructive businesslike arrangement with the EU, without sacrificing political sovereignty and without going down the road of political union. My concern is about the damage that will be caused to this country between now and then and the cost that we and our children will have to bear.
I hope that the Minister, as he has refused my invitation to intervene on the questions that I have put to him, will come up with some answers when he winds up this debate. I hope that he answers the questions that I have put, because they are the questions that people in this country are asking.
Martin Caton (in the Chair)
Order. I want to start the winding-up speeches at 10.40 am. At least seven hon. Members are indicating that they would like to speak, so greater brevity of speeches will mean a greater number of them.
Jim Shannon (Strangford) (DUP)
I am grateful to you, Mr Caton, for allowing me to speak. I commend the hon. Member for Basildon and Billericay (Mr Baron) for bringing this matter to the House today and giving us all a chance to express ourselves in the way that our constituents have expressed themselves to us.
I want to make it clear from the outset where my opinion lies—we need to look at the signs in front of us and then take action. Iceland was not prepared to pay back a bail-out; the Greeks were not willing, or perhaps they were not able, to make the cuts necessary to meet their payments; and now we are looking towards Italy and all the chaos that seems to be enveloping that country. For too long, we have watched other countries prosper with bail-out funding while we cut funding to schools, hospitals and infrastructure to remain solvent and to claw our way back to a sound financial footing, which are the very things that the hon. Gentleman discussed.
For too long, we have paid into the EU while watching our farmers and fishermen flounder under the weight of EU dictates. We watched other nations flaunt the rules even as we were fined £60 million in Northern Ireland for mistakes in filling in some forms. Just last week in Portavogie, which is in my constituency, I had an opportunity to speak to some fishermen. They told me that they are weighed down by bureaucracy, such as new rules on mesh sizes for nets and types of net by red tape and by monitoring, which they have to pay for themselves because the cost of policing fishing falls on the heads of fishermen.
I believe that the people want out. They see the crisis and that the house of cards is no longer simply swaying but precariously quivering with the wind of change blowing through Europe. We stood in this House last month and advocated allowing the people to have a referendum on Europe. We were denied the opportunity to have a referendum by the strong whip of the three major parties. At least my party, the Democratic Unionist party, stood strong and united in our call for a referendum. We feel that that is what the people want us to do. People must be given the opportunity to have their voices heard.
My mother had a wee statement; she had lots of wee statements, as mums always do. She said, “Don’t throw good money after bad,” but that is what is happening in Europe. How long will it continue? When will it end? Is this not the chance to leave Europe, or to change it so that it no longer resembles the red-tape-loving, common-sense-ignoring, self-serving, life-sucking drain of money that it has been for so long? Angela Merkel, the German Chancellor, has said that she wants substantial treaty change to strengthen it and to give the European Commission the chance to impose fiscal discipline on excessively indebted states in the single currency area. I am concerned that other European countries have a clear policy—a strategy—about what they want, and that they want us to be a subservient part of it. We want, and need, more. We need to be free to fish our seas and farm our lands responsibly, as we have done in the past, and we need not to be bound by restrictions placed upon us by those who are self-serving in Europe. As we struggle in this financial mire, China sits back and laughs. It is time to take control.
I have spoken before on the IMF, and I say again that the money is not for bailing out the euro, because the eurozone countries should and must bear the brunt. I stated in the House earlier this year:
“It is clear that the European financial stabilisation mechanism is not fit for purpose…On 9 May 2010, the European financial stability facility was created, and it is a special purpose vehicle agreed by 16 members of the eurozone and aimed at preserving financial stability in Europe by providing financial assistance to eurozone states in economic difficulty.”
That is very commendable, but perhaps unworkable. Furthermore:
“Thus far, we are not at all involved, but no to the euro meant no to the EFSF. The tricky part came with the notion that the facility may be combined with loans of up to €60 billion from the European financial stabilisation mechanism, which is again reliant on funds raised by the European Commission using the EU budget as collateral, and up to €250 billion from the IMF, all to secure a safety net of €750 billion.
If there is no financial operation in activity, the EFSF would close down after three years, on 30 June 2013. If there is a financial operation in activity—which of course there is—the facility would exist until its last obligation had been fully repaid. There has indeed been activity, and a good deal of it involving the EFSM, despite the fact that it should not have been involved to the extent that it had an equal if not greater share of the bail-outs. The purpose of the European financial stabilisation mechanism is to provide an emergency funding programme that is reliant on funds raised on the financial markets and guaranteed by the European Commission using the European Union budget as collateral.”—[Official Report, 24 May 2011; Vol. 528, c. 813.]
In my opinion, that has not changed, and as we look at Greece and Italy and wait to hear of the next country to fail, it is clear that despite the Prime Minister’s claim that there is no risk to the taxpayer, there is a danger that the money will not be used for the good of the United Kingdom. That is a huge risk, and it cannot be allowed.
I sincerely urge the Minister to think clearly before any more money goes into the IMF. We have been hoodwinked before to our detriment and to the financial cost of everyone in this country, and it cannot happen again. Let us not forget that we are fighting to reduce the deficit here and that we must prioritise. I commend the Prime Minister on his idea of the big society. Regardless of whether it is workable, I support the thrust of it, but it will be difficult for it ever to happen and for the benefits to be seen in the UK, never mind Europe-wide. As I stand here today representing my constituents, I state very clearly that we should not put any more of our funds into the IMF without first being certain of where the money will go, to the penny. We cannot afford to do otherwise, because the people do not want us to, and it is their money that the Government are toying with. For the first time since joining the EU, it is time to work things out to our advantage. We need to take that chance, and we need to take it now.
I support the thrust of what other hon. Members have said today, and I hope that the Minister will respond positively to our concerns as MPs and elected representatives. The concerns are genuine. The people I represent, who have put me here, are very clear: they want us out of Europe, and they want us out now.
Mark Field (Cities of London and Westminster) (Con)
I thank my hon. Friend the Member for Basildon and Billericay (Mr Baron)—my very old parliamentary friend—for securing this debate. He talks with immense sense and, as a man who had a job outside politics before entering this place, immense experience. After 20 years in the financial markets, I suspect he has forgotten more about finance than many people who talk on these matters on all our behalves know.
Conventional wisdom dictates that high noon for the euro is imminent. The assumption is that the single currency will collapse or that the eurozone will be forced into a headlong rush towards full fiscal union. Nevertheless, despite all the euphoria of the past week about Italy, I suspect that we shall experience many more months of tottering along from market crisis to emergency meeting, to fully fledged conference and half-hearted bail-outs—the sort of disaster to which my hon. Friend has referred. Indeed, if—it is a very big “if” and no one seems to be focusing on it at governmental level—the global bond market remains relatively stable, the cheap price of Government debt provides little incentive to create a viable long-term structure for our ailing continent’s economies. There is a massive bubble in the bond market that no one is really talking about. The Chancellor prides himself on Britain being a safe haven; America, with its $13 trillion debt, is an even safer haven with rather lower interest rates, as is Germany. It is absolute madness when we are receiving 2.2% for getting our debt away and have inflation of 5.6%, and I am afraid that the bubble will burst at some point with, I suspect, disastrous effects.
Many purists will rightly bemoan that politics is being allowed to outweigh the economic realities, and that cannot go on for ever. What is so dangerous about the utter lack of leadership and vision among Europe’s leading politicians is that the longer this crisis continues, the more private sector confidence drains away and global markets begin to discount the entirety of Europe. More crucial still is that the two distinct problems that face many struggling European economies, solvency and liquidity, are becoming conflated in the minds of markets. The Greek issue is simply one of solvency, or rather insolvency. Greece must be allowed to default, from within the eurozone, I suspect. I support its creditors, who are predominantly EU banks, taking a substantial haircut. They lent the money at attractive interest rates, implicitly recognising the risks, and they must now take the consequences.
Mr Carswell
My hon. Friend talks about allowing Greece to default within the eurozone. Surely that is the worst of all possible worlds. Surely the way to handle the problem is not just to default but to decouple and set Greece free. Default within the eurozone is the worst possible option.
Mark Field
The only difficulty is how on earth it would ever borrow money again. Greece has been living in Alice in Wonderland economics for the past 20 years. We need to look at what happened in Argentina. That economy has struggled massively for the past decade, because it has not been able to borrow money in the international markets.
Mr Carswell
Does my hon. Friend not agree that today Argentina has a better bond rating than many eurozone countries and that that shows the way?
Mark Field
I suspect that that says more about eurozone countries than about the fundamental health of the Argentinean economy, but if my hon. Friend will excuse me, I will continue.
With the failure of European leaders and Finance Ministers truly to grasp the nettle, the liquidity problems faced by Portugal, Ireland, Spain and Italy are becoming ever more deep-seated. It is very difficult for Angela Merkel in Germany—as someone who has German blood running through his veins, I accept that. I appreciate that her domestic political position appears ever more precarious, because the EU’s economic powerhouse should have ceded control of the deepening crisis to the European Central Bank. The ECB’s mandate could, and perhaps should, be to provide market intervention to restore and maintain confidence on behalf of all solvent eurozone economies, but in her actions to date, Mrs Merkel has indicated that the politics are just too difficult for her nation, which remembers the days of hyperinflation during the early part of the Weimar Republic. Furthermore, all this requires, as ever within the EU, bypassing democratic safeguards, and it potentially involves unfathomably vast quantities of central bank support, with potentially hazardous medium-term economic consequences.
Mark Field
I hope that the hon. Gentleman will excuse me; I know that others want to speak.
The twin lessons of the economic depression in the 1930s are that avoiding catastrophe requires swift action and that once a process is under way we should not worry unduly about overkill. It is better to pump too much liquidity into the system, rather than inadequate amounts. A financial system in free fall requires active central bank intervention, however irrational the collapse of market confidence. Nevertheless, in the absence of a central bank for the 17-nation eurozone that has real political clout or, more important still, sufficient funds to provide comprehensive cover in a liquidity crisis, it is regrettable that the UK is now expected to stand ready to bolster the IMF. The IMF seems to be the only institution that can bail out countries that are close to default—Italy and Spain, for example. My hon. Friend the Member for Basildon and Billericay is absolutely right that there is disingenuous thinking and talking within the eurozone. The reality is that if Italy or Spain has a problem, the European Central Bank and the European financial stability facility cannot address it. Clearly, such a problem must be addressed by the IMF.
Without stable financial markets, there is little hope of the sustained growth essential to economic recovery. The UK economy is a global leader in the financial services sector, but it is especially prone as a consequence to the adverse impact of uncertainty on worldwide financial markets. No UK taxpayer will stand by and watch with any sense of satisfaction as unimaginably large sums of money or guarantees are given to bail out the banking system.
As has been pointed out, our Prime Minister and the Chancellor have repeatedly vowed that there will be no further bail-outs of the eurozone. However, in the event of a collapse in market confidence for Italy or Spain, the UK, as a founding member of the IMF, will almost certainly be expected to increase both its absolute funding and its guarantee facilities to the fund, which is an extremely unpalatable prospect. However, I also accept that a UK failure to act would not only have immediate, serious consequences for the global financial services sector, but amount to an abdication of our responsibilities as a mercantile nation in the international field of trade and commerce.
As MP for the City of London, I reluctantly accept that I have no choice but broadly to support the UK Government’s proposal to underwrite further funds to the IMF. Nevertheless, I regard that as a matter that must be addressed not by the Executive alone but also here in Parliament. If the UK taxpayer is to be further exposed to IMF loans and guarantees, that must happen only after a statement from the Prime Minister outlining why such a course of action is in the national interest, after a full parliamentary debate and as the consequence of an affirmative vote in Parliament. In my view, nothing less will do.
I know that many other Members want to speak. There is much more that I would like to say, but I will touch on a point that my hon. Friend the Member for Basildon and Billericay made regarding the wisdom behind the UK Government’s enthusiastic promotion of a headlong move towards fiscal union in the eurozone. I say to the Minister that we should be extremely careful what we wish for. Such a development would embolden the eurozone, even in its apparent weakness, to embark on a rapid and radical political power grab throughout the EU. Alarm bells would ring in the City of London. It would be very bad news for this country, and we should not stand by and let it happen without ensuring that our national interests are properly served.
Mr Christopher Chope (Christchurch) (Con)
It is a pleasure to participate in this debate. I congratulate my hon. Friend the Member for Basildon and Billericay (Mr Baron) on his good sense in calling for it. It is fantastically well attended, and it is a pity that it is not longer.
At business questions on Thursday, I raised with the Leader of the House the issue of the loan to Ireland. He said that he would tell the Financial Secretary to the Treasury of my interest in the subject, and that my hon. Friend would come to this debate with the answers to my questions. I hope that he has had due warning.
The loan to Ireland goes to the heart of the issue of trust, to which my hon. Friends have referred. The people in this country do not understand what is happening in their name. The Chancellor announced that we would give a £3 billion loan to Ireland. That is £50 a head for every member of the UK population. He announced that the rate of interest would be about 6%, in round figures, and that that would give the British taxpayer a healthy profit.
It then emerged in late July that the interest rate was likely to be lower, but had not yet been decided. The first tranche of the loan was paid to Ireland on 14 October. Even as we speak, the rate of interest on that loan has not been agreed. It is still being negotiated downwards. At the same time, the Irish bond rate has remained pretty constant, at more than 8%. Why are we negotiating the rate downwards? Why, indeed, are we lending all that money to Ireland when our own small businesses are crying out for money?
Mark Reckless
Is my hon. Friend aware that it is not just the interest rate that is uncertain but the priority of the loan? When addressing the Committee considering the Ireland and Portugal bail-outs and loans, the Financial Secretary stated that the loan to Ireland ranked broadly the same as those of the IMF and other international institutions, when actually it ranks below the IMF and the EFSF.
Mr Chope
My hon. Friend makes a good point. We were told that the IMF would help Ireland and that we could help Ireland and influence its economic policy through the IMF. We were also told that we needed to give Ireland a £3 billion loan so that we could have even more influence, but I do not think that it is written in any agreement that to have yet more influence we need to reduce the interest below the rate agreed at the outset. The fact that the Irish have drawn down on the loan shows that they do not look a gift horse in the mouth. They realise that this is a great opportunity.
Let us consider the opportunities in Ireland. I got my assistant to research the interest rates available to small businesses in Ireland at the moment, so this information is from yesterday. Allied Irish Banks is offering loans of up to €100,000 to small businesses at a “competitive rate” of 4.4% variable. New and early-stage businesses under three years old can get that money. Now, I do not know what it is like for my hon. Friends, but in my constituency it is almost impossible for businesses to get a loan from the bank at a rate of 4.4%, if they can get one at all. We know that Allied Irish Banks is the beneficiary of a £3.5 billion bail-out. We are giving Ireland money that it is using to subsidise its banks, which in turn are subsidising its small businesses to compete unfavourably against ours.
Ian Paisley
I agree with the thrust of what the hon. Gentleman is saying. Does he agree that it is actually far worse? The Irish state bank, the National Asset Management Agency, holds £14 billion of property in this city, which it can dispose of any time it wants and put the money back into its own national coffers. Is it not time that we had a Select Committee inquiry into NAMA’s activities in the United Kingdom jurisdiction?
Mr Chope
That sounds to me like a good point. People should start selling their assets. That is what families must do if they get into difficulties. We have to think about selling assets, which is what countries in debt should be doing.
Another example is the Bank of Ireland, which received €5.2 billion in the banking bail-out, and which is offering interest rates of 5.24%. More than half of all loan decisions are made on the spot and 87% of applications are approved. Would that we had similar arrangements in the United Kingdom. By comparison, HSBC was offering small business loans yesterday with a starting interest rate of 7.9%, which is obviously only for the most favoured customers.
Can the Government explain why we are reducing the rate of interest on the Irish loan? When the Bill went through the House, I voted against it, but it passed on the basis that we would make a significant profit on the interest. Now that the Irish are drawing down on the loan, surely we should know what the interest rate is. Is there any other organisation that can go to the bank and get a loan while the bank manager says, “Don’t worry, we’ll agree the interest rate later”? It seems reckless in the extreme.
My final point deals with the treaty establishing the European stability mechanism. Most people do not realise that the European stability mechanism is a new international financial institution that will have international immunity, and that it will be funded by the 17 members of the European Union. What will Ireland pay? Its subscription will be €11.145 billion, which is about £10 billion. Another way of putting it is that we are lending money to Ireland so that Ireland can, in turn, pay its subscription to the European stability mechanism. It is a farce.
Glyn Davies (Montgomeryshire) (Con)
Thank you, Mr Caton, for giving me the opportunity to contribute to what is probably the most important subject of debate that we will have during this Parliament. I congratulate my hon. Friend the Member for Basildon and Billericay (Mr Baron) on securing the debate and on presenting his arguments in a challenging and clear way. I look forward to the Minister’s response to the points he has raised.
Most of my hon. Friend’s speech dealt with the financial aspects of the issue. My view, however, is that it is not possible to consider the issue without also looking at the wider context. Indeed, I raised that point when I intervened on him. The key concern for me and many others is that the euro is destroying democracy as we know it in western Europe. That was my main reason for opposing Britain’s entry to the euro when it was established.
I am not sure how many of the hon. Members present were involved, like me, in the 1975 campaign to leave the European Economic Community, but I think that some of us might have been—I can see one or two. At the beginning, we thought there was a chance that we would be successful, but in the end the argument that I supported was well beaten. I was not trained as an economist—or as anything really; I left school when I was 16 to be a farmer—but my argument was that the public’s gut instinct in those days was that we were creating a huge bureaucracy whereby the ability to influence decisions in our country was to be transferred somewhere where we would not have influence. That was the fundamental gut instinct that drove us to the “no” side.
When the eurozone was being established, I became involved in the opposition to it, which was unusual, because I was the chairman of the Agriculture and Rural Development Committee in the National Assembly for Wales and the agricultural community was fairly supportive of Britain joining the euro. I remember being dismissed on platforms as an extremist, but I was simply not in favour of Britain joining the euro. My argument was exactly the same as that which many people are making today—to create a successful eurozone almost certainly means financial union. Nobody has hidden that. In 1975, the purpose of many people who were behind the establishment of the EEC was that we would eventually move to political union in Europe. That was the small print. Today, I hear people saying that they thought we were joining an economic community, but that is not what I or a lot of other people thought.
Mr William Cash (Stone) (Con)
My hon. Friend is making an important point. Last night, the Prime Minister made a speech at the Guildhall in which he called for fundamental reform in the European Union, but it is not really just a question of fundamental reform in the EU, is it? What we have to have is a fundamental change in the relationship between the United Kingdom and the European Union, because it is a failed project. We have been enmeshed in it and it is increasingly causing damage to our own economy.
Glyn Davies
My hon. Friend has anticipated my next point, although I shall not use precisely the same language that he uses and has used for a long time—probably about 30 years. The Government’s policy, which I support, is that we should seek to repatriate powers from the European Union. That is easy to say, but for the Government to deliver that objective, the Prime Minister, Chancellor and Foreign Secretary have to have a way to do so. As Members of Parliament, we have a responsibility to think about exactly how we are going to do that. Which parts of European policy, precisely, do we wish to repatriate—whole blocks or just specific parts? The issue is hugely complex and a tremendous amount of work will have to be put in to enable it to be addressed.
We could speak for hours on the issue—I am sure that I could. A lot of Members want to speak. I have raised the points that I wanted to make and look forward to the Minister’s response.
Stephen Hammond (Wimbledon) (Con)
I congratulate my hon. Friend the Member for Basildon and Billericay (Mr Baron) on securing this debate. Like him, I spent some years in the City of London, in various institutions. I want to address three things. First, I want to look at the theoretical construction of the euro as it was set up. My hon. Friend talked about the various eurozone summits and why they failed to find a solution. The reality, of course, is that a theoretically implausible project means that any eurozone solution will not be practical. I also want to talk about some of the reactions, and conditions the International Monetary Fund might want to attach to its bail-out, and our interest in it.
The single market was much welcomed in terms of the encouragement of free trade, which then drove some people to the aspiration for a single currency. It was clear that those countries that were going to join would lose the basic levers of economic policy, namely taxation—that is, fiscal policy—as well as interest rates, exchange rates, protectionism and, indeed, unemployment. It was also clear to any undergraduate, or even A-level economist, that the reality was that a fudge might be possible in good times, but not in a recession. The opponents of that view pointed to optimal currency area theory, which showed that the transaction costs would be lessened and that everything would, therefore, be fine. In practical terms, however, we have seen a theoretical misconstruct. The euro was a misconstruct because it failed to recognise exactly what that theory says: for optimal currency area theory to work, the economies have to be homogeneous in nature or flexible in their arrangements, so that they can move to homogeneity, or a currency union needs to be established alongside a fiscal union at the same time; otherwise, the overwhelming point is that whatever is set up in terms of a single currency will fail.
On the economies that were in the eurozone when it began—the wealth of Germany, the emergence of Ireland and the agrarian underdevelopment of Portugal— surely the appropriate description is diverse rather than homogeneous. Moreover, if we look at the policy formulation since the currency has been in existence, we see that there has been no flexibility that would allow movement to a homogeneous economy. Unless we recognise that the project is flawed in theory and do something about the theoretical basis, we will never find a practical solution. It is not surprising that we have had 15 eurozone summits that have provided no solution whatever.
The absurd reactions of Europe’s senior eurocrats are also of extreme concern. They are preventing any serious discussion of a resolution. The basic premise at the moment is, “The euro must be saved, the euro must be saved, the euro must be saved.” Only last week, President Barroso said yet again that the euro should be the norm for Europe. He even denied the UK’s permanent right to opt out. The President of the European Council, Mr Rompuy, also made an extraordinary remark over the weekend when he suggested that, if the eurozone’s integrity was not preserved, the functionality of the internal market could not be taken for granted. That is an absurd proposition. First, we need only look at the history of how the single market functioned before the euro came into being. Secondly, a single market does not need a single currency, but I will not bother to go into the theoretical construct for that.
Mr Cash
Does my hon. Friend remember Madame Lagarde saying on 17 December 2010, when she was Finance Minister for France, that they broke all the rules because they wanted to save the euro at all costs? The rules have been broken, and that relates to the stability and growth pact and every single aspect of this.
Stephen Hammond
My hon. Friend is right, and my hon. Friend the Member for Basildon and Billericay made exactly that point. I will not go on, but it seems simply ridiculous. If the eurocrats of Europe think that saving the euro is more important than working out the solution to the economic crisis, progress will be, at best, tortuous.
From a UK perspective we must be interested. The idea that we are not interested in what the IMF bail-out is—or, indeed, in the fact there is a eurozone crisis—is clearly wrong. The impact on the UK is extraordinary. We trade with the eurozone, and therefore have a significant interest. My hon. Friend the Member for Cities of London and Westminster (Mark Field) referred to the possibility of a default of Greek banks. It may or may not be true that we have little or no exposure to Greek banks—I think it is broadly true—but we have great exposure to banks that lend to Greece within the eurozone. That contraction of balance sheets will affect lending to small and medium-sized enterprises in the UK. Therefore, we must have that interest.
A basic and necessary precondition of what the IMF must say to the leaders of Europe is that they must recognise their wider international responsibilities. My hon. Friend also made the point about the Germans effectively wanting to control the eurozone, but not being prepared to accept the economic leadership that that implies by allowing the ECB to attempt to solve the liquidity crisis. We should extend money to the IMF, but I am realistic in accepting that, overall, that means the IMF would extend extra money to the eurozone. Any money that the IMF extends to the eurozone should be met with the precondition that the ECB becomes entirely independent and able to print money for the eurozone, or else it is bound to fail.
The IMF also needs, and almost certainly will accept, a necessary theoretical construction that provides a solution. The most likely solution is that we see a number of countries leave the eurozone—leave the euro—and some perhaps form a tighter unit. That being so, the IMF must stand up and say that it is prepared to fund the cost of dislocation for those leaving the eurozone, so that they have a chance to devalue, make the necessary adjustment to living standards and the necessary lowering of labour costs to allow a competitive solution.
Mr Carswell
Is my hon. Friend saying that he wants the IMF to fund the cost of eurozone members’ dislocation from the euro?
Stephen Hammond
I am saying that I accept that the IMF will make a bail-out to the eurozone. On that basis, one of the best solutions for the eurozone is for a number of countries to be allowed to leave the euro. The IMF will therefore need to fund the cost of the dislocation of those countries leaving the euro to give them any hope, attendant with their devaluation, of an economically sustainable future.
Stephen Hammond
I notice that I have gone on rather longer than my five and a half minutes. I had a number of other points, but thank you for the opportunity to speak this morning, Mr Caton.
Neil Carmichael (Stroud) (Con)
I congratulate my hon. Friend the Member for Basildon and Billericay (Mr Baron) on securing this crucial debate. A large number of important matters have been raised, and it is a good opportunity to discuss them in this Chamber.
I take issue with the assumption that devaluation is a good thing. We have formally devalued twice since the second world war, and we are in a slowly-emerging devaluation. Post-departure from Bretton Woods, we effectively devalued over time. I see no evidence that any of those devaluations ever led to long-term improvements in productivity or competitiveness, so although the IMF, as it has in the past, has perhaps lent to countries that can and have devalued, it is not necessarily a good thing.
Mr Carswell
Does my hon. Friend accept that Argentina’s decision to decouple from the dollar and default on its debts helped it to achieve economic growth? Does he think that that was a good thing or a bad thing?
Neil Carmichael
I am a great believer in all countries growing. Argentina is doing reasonably well, but that has more to do with the neighbouring countries that it trades with in Latin America than with decoupling from the dollar. However, I take the point that some countries will take the opportunity for a quick leap forward.
Mr Carswell
Does my hon. Friend agree that the IMF’s decision to allow the Ugandan shilling to devalue helped to stimulate growth in Uganda in the 1990s and that, without that devaluation, it would not have enjoyed 15 years of prosperity?
Neil Carmichael
If my hon. Friend thinks that the devaluations of 1949 and 1967 in this country led to a period of improved productivity and competitiveness, I would dispute that. I want to pursue that argument, because that is what I think is important.
Mr Baron
My hon. Friend is being generous in giving way. Devaluation is not necessarily the best thing going, but it helps to take the strain for a currency that is weakening and therefore allows austerity measures to be perhaps less harsh than they would otherwise be. That is the point. There is no economic evidence to suggest that, if we did not allow devaluation to take effect, austerity packages would be worse and make the economic downturn much worse.
Neil Carmichael
I can certainly understand my hon. Friend’s argument, but it is worth pointing out that devaluation is not a panacea and should not be used frequently.
Neil Carmichael
I will take one more intervention on devaluation, or this discussion will be devalued.
Mr Hollobone
This country has devalued on a trade-weighted basis by 25% since the peak in 2008. If we had not had that devaluation, this country would now be inflicting on itself a far harsher austerity package and unemployment would be far higher. Without the devaluation mechanism, countries face far starker choices.
Neil Carmichael
This Government’s real achievement is to address the deficit. They have set out a plan that is effective and encouraging markets to understand that we are taking the appropriate action. That is one of the benefits of being outside the euro, and we should focus more on that, rather than worrying about the benefits or otherwise of devaluation. I repeat for the last time that I do not think that devaluation is a panacea that we should be pursuing.
Neil Carmichael
One of the obvious pieces of evidence is that we are not talking about the IMF coming to bail us out—a huge achievement by the Government that should be recognised. We will have to move on from devaluation, but I think that I have made my point and others have attempted to make theirs.
Inflation would certainly help debt reduction, because it does in the long run. As I said in an intervention, when Denis Healey borrowed money from the IMF, that did arrest devaluation. We were more easily able to pay the IMF back quite quickly because of the impact of inflation. I do not support inflating the economy in that way either, as a remedy.
Mark Field
In the late 1970s, inflation was coming down quite rapidly from a height of 26% in 1975. One could argue that there has been a deliberate policy by the Bank of England, perhaps in cahoots with the Treasury, to allow a little bit of inflation to go into the system. That is exactly what is happening here in the UK, where historically we have had high real inflation, which is having a major impact on all our constituents’ living standards.
Neil Carmichael
Inflation did go down, but after the IMF loan was made. It reached a peak in 1976, which I think was 26%. That happened to coincide with the time of the IMF loan, so that is the position that we should discuss.
Mr Edward Leigh (Gainsborough) (Con)
My hon. Friend has been very generous in giving way. He will accept—will he not?—that we should not have stayed in the exchange rate mechanism.
Neil Carmichael
Well, we were blasted out of the ERM. We do not want to repeat that fiasco, and we should all recognise that.
We talked briefly about the United States. Gerald Ford, President of the United States in the mid-1970s, refused to bail-out New York, and quite right, too. He was a fiscal conservative. That was the right decision in the long run, and, of course, a decision that did not affect New York’s membership of the dollar. I just wanted to put that on the record.
We must focus on two things, and the Prime Minister identified them both in his speech yesterday. I want to ram home the importance of reforming the European Union, because that is what it needs. In particular, we have to drill down on the single market, to ensure that it is a single market and that competitiveness in goods and services is enhanced. We can really do that.
On euro measures, this country would be making a big mistake if we assumed that the euro will not affect us significantly, because it certainly will. [Interruption.] I shall wind up. I have been so generous with interventions that I do not have the time to point out that we need fiscal union in the eurozone, the ECB to be enhanced—as my hon. Friend the Member for Cities of London and Westminster (Mark Field) rightly said—and much more rigorous auditing of what is going on.
Last but not least, there is a democratic deficit, although the IMF extension was discussed in the House and we voted on 11 July. I have noticed two things. First, Germany and France are effectively bypassing the Commission in a lot of their decisions—
Martin Caton (in the Chair)
Order. The hon. Gentleman has gone on beyond the time at which I said that I wanted to start the winding-up speeches. Many Members have asked the Minister questions to which they want to hear the answers. I should be grateful to the hon. Gentleman if he stayed seated now.
Chris Leslie (Nottingham East) (Lab/Co-op)
I was interested to hear the comments of the hon. Member for Stroud (Neil Carmichael). I have learnt a lot, including Gerald Ford’s attitude to New York city and the history of the Ugandan shilling. At one point in the debate, I was almost feeling sorry for the Minister, given the heat that he is falling under and that he is simply following orders—it is not entirely his fault—but in the short time available, he needs to explain not only the answers to the questions asked, in particular by the hon. Member for Basildon and Billericay (Mr Baron), who gave a thorough and refreshing contribution, but an area of policy that has not been touched on as much as it should have been and that is central to the debate, which is growth. How will we rejuvenate growth, not only in the UK but throughout the eurozone, as a way to solve the crisis?
The Office for Budget Responsibility continues its relentless drive to downgrade economic prospects, and the European Commission has forecast a massive change in our fortunes. Last year, gross domestic product growth was supposed to be 2.2% in 2011, but a couple of weeks ago, that prediction was downgraded to only 0.7%. We are now forecast to have the slowest growth in Europe, with only Greece, Italy, Portugal and Cyprus growing more slowly in 2011. The Office for National Statistics, however, shows that exports to the euro area were rising by 17.3% in the third quarter, so the eurozone alone cannot be an excuse for the UK’s lack of growth.
Given the fragility of our economy and our vulnerability, I accept that prolonged uncertainty in the eurozone could worsen our position, but it would be disingenuous of the Treasury to suggest that our woes are caused by the eurozone situation. I would be worried if it genuinely thought that to be the case.
Chris Leslie
Not in the short time that I have available. I prefer to hear the Minister and to deal with particular issues, some of them raised by a number of hon. Members. For example, the hon. Member for Cities of London and Westminster (Mark Field) discussed bond yields and the dangers of the Government giving the impression that we are a safe haven relative to the rest of the world. I am worried about the complacency shown by the Government. Bond yields are as much a function of our relative independence from the euro and the flexibility of having our own central bank. The director of the National Institute of Economic and Social Research, Jonathan Portes, made it clear recently that our gilt yields declining to an all-time low was partly a result of the economy’s weakness, because safe-haven flows are typically accompanied by a rise in the value of the pound or rising stock prices. He could not have been more concise or clear:
“The reason people are marking down gilt yields is because the economy is weak”.
We should not see that entirely as the be-all and end-all of economic policy. The hon. Gentleman is right that we should see it not merely as a safe-haven function, but as a bubble that may burst at any point.
What should the Government be doing? The crisis is far from over, even though the markets have calmed somewhat this week. My right hon. Friend the Leader of the Opposition rightly pointed out that the European summit—the G20 summit—finished prematurely, without adequately solving the difficulties with the EFSF and the permanent bail-out arrangements, and that a further European summit might be necessary to thrash out the issues properly. We also need a proper strategy for jobs and growth throughout Europe and concrete steps to support demand immediately. We have to end the prevarication about the role of the European Central Bank as lender of last resort and to give proper attention to what it takes to make that EFSF firewall stand behind eurozone members.
Hon. Members mentioned the IMF in some detail. In the summer, before the details of the permanent eurozone bail-out fund had been agreed, the Labour party urged the Government to pause before granting additional funding to the IMF. We called for the commencement of the larger eurozone-only bail-out fund to be brought forward and for the Government to negotiate an end to our liabilities via the temporary EFSM. The Minister at the time did not explain what the UK Government were doing to help to ensure that an adequate and permanent EFSF was put in place and, as I said, the European summits came and went, despite the Prime Minister’s attendance.
Ministers, including the Prime Minister, have repeatedly misrepresented our view of the IMF’s role. Today’s debate shows that our concerns are shared across the party divide. Tim Geithner in the United States and people in many other countries have also voiced their reservations. In principle, because of the IMF’s generally vital role in the global economy, we support an increase in its subscription, but I make no apologies for questioning the Government’s stewardship of our public funds. We have a duty to protect the best interests of the UK taxpayer.
We have consistently said that the IMF’s job is to support individual countries with solvency crises and not to solve a structural problem caused by eurozone countries unable to agree the necessary steps to support and maintain their own monetary union. The IMF does have a role around the world and should have the necessary resources, but there should be no IMF funding to plug the gap in the eurozone’s bail-out fund and to do the job that the ECB should be doing. The only way to ensure market confidence in the eurozone is for the ECB, alongside that permanent bail-out fund, to be given the political support that it needs to act as lender of last resort when liquidity problems arise. That is the logic of monetary union that the 17 eurozone countries are signed up to.
I want to hear the Minister’s answers, so I will curtail my remarks. It is vital for the Government to wake up and realise the role that a growth strategy must play in Europe and in the UK. Without that, there could be serious ramifications for the UK and our economy. If the Government fail to act as an honest broker, stepping up to show the leadership that many hon. Members have urged in today’s debate and so that the ECB becomes lender of last resort and that the EFSF has enough weight to become an effective firewall, the eurozone crisis may well deepen further. The Chancellor continuing to talk about Britain as a safe haven betrays a relaxed complacency in the Treasury that is not warranted. Such an approach is misinformed, neglectful and very dangerous in the situation that we face.
The Financial Secretary to the Treasury (Mr Mark Hoban)
I congratulate my hon. Friend the Member for Basildon and Billericay (Mr Baron) on securing the debate.
Let me be absolutely clear: it is in our vital national interest that eurozone states reach a coherent, comprehensive and lasting solution. First and foremost, they must implement the agreement reached towards the end of October, which involves a three-pronged strategy to recapitalise the European banks, resolve the situation regarding Greek debt and reinforce the EFSF to create a firewall between Greece and other vulnerable euro area countries. The new Governments in Greece and Italy need to show that they can implement the tough measures required to deal with their debts and make their economies more competitive. Uncertainty in the eurozone is undermining not just their economies, but ours. A return to stability in the eurozone will benefit our economy, whereas continued uncertainty will harm it. My hon. Friends the Members for Cities of London and Westminster (Mark Field) and for Wimbledon (Stephen Hammond) made that point.
We have a clear interest in greater certainty in the eurozone, but at no point have we committed, or will we commit, any British taxpayers’ money to a special purpose vehicle, or through the EFSF or the ESM, either directly or through the EU budget.
Mr Baron
If I may be so bold, the Financial Secretary is coming up with the economic clap-trap that we must all save the euro. Does he accept that binding divergent economies into a single currency without fiscal union was and remains a massive mistake? It is as simple as that. The world will not fall apart if the euro breaks up, and countries such as Norway and Switzerland have proved that by trading with the eurozone using their own currencies.
Mr Hoban
My hon. Friend is absolutely right, which is why we did not join the euro in the first place. The remorseless logic of monetary union, as he said in his speech, is fiscal union. Fiscal union is necessary for monetary union to work. That is what we are seeing throughout the globe, and that is why we said that eurozone members must make greater progress towards fiscal union.
Mr Hoban
As I have said, uncertainty and problems in the eurozone have a damaging impact on the UK economy and have a chain effect on what is happening here in the UK. It is not in our economic interest for that to continue. Just last week, John Cridland, director-general of the CBI, commented on the negative impact that the problems in the eurozone are having on the UK economy. We are an open economy and our European partners are our largest trading partner, so it is in our interest to ensure that the eurozone works. That will be of huge benefit to the UK economy.
Mr Hoban
I would like to make some progress. Let me address UK commitments through the IMF, which is the centrepiece of this debate. In a carefully worded statement, the hon. Member for Nottingham East (Chris Leslie) covered Labour’s retreat on its IMF policy. He was bravely leading his troops through the No Lobby in July without the support of the architects of the G20 London deal. The former Prime Minister and the former Chancellor were not there. What has happened? Last week, his boss, the shadow Chancellor, cut his legs from under him by saying that
“the Labour party supports an increase in the UK’s International Monetary Fund subscription”.
I do not think the hon. Gentleman is in a position to lecture anyone about consistency and principle.
As a founding and permanent member of the IMF, and as one of its largest shareholders, we continue to be a strong supporter of its role as a global backstop to the world economy. Currently, 53 countries are being supported by the IMF, of which only three—Greece, Ireland and Portugal—are in the euro area.
Mr Hoban
Let me continue. As a founding member of the IMF, we recognise its important role in stabilising the global economy in times such as this. That is why we participated on the nine previous occasions when its quota was increased. In these turbulent times, it is essential for confidence and economic stability that the IMF has the necessary resources, and there may well be a case for further increases. At the G20 two weekends ago, Britain, the US, China and all the other countries round the table made it clear that in principle we are willing to have an increase in IMF resources to boost global confidence. We stand ready to contribute within limits agreed by the House and set out in the International Monetary Fund Act 1979. That limit, denominated in the IMF’s units of account—special drawing rights—stands at 38.8 billion SDRs, or about £38.3 billion pounds.
Let me remind the House that no one who has lent money to the IMF has ever lost that money. The money goes directly to the IMF and not to individual countries. It is one of the most creditworthy institutions in the world, and its loans are afforded preferred creditor status, which means that they are first in line to be repaid, even if not all other creditors are paid. Consequently, no country has ever lost money as a consequence of lending to it.
There has been no agreement about the timing, extent or exact method through which IMF resources will be increased, but an immediate need is to implement existing plans to increase its resources. Let me make clear how IMF resources will be used. Any increase must be available to all its members and not reserved for use only by the euro area. There can be no hypothecation, and money is lent to the IMF, not to specific countries.
The use of IMF resources is linked to the question of the need for economic reform. All hon. Members recognise the need for the euro area to reach a comprehensive resolution to the crisis, and clearly it is for the euro area to resolve that crisis. That resolution cannot be simply through recapitalisation of banks, the creation of a euro area bail-out fund or resolving the problems in Greece.
Mr Hoban
Perhaps my hon. Friend will be patient. There are areas where the eurozone needs to tackle its competitiveness to respond to those issues. There is the question whether IMF money is conditional on structural reform to improve competitiveness. The answer is yes, because conditions are built into IMF programmes to ensure that competitiveness changes take place. Portugal, for example, has an extensive programme of privatisation, and the Portuguese Government’s right to be involved in private companies must be abolished. In Ireland, legislation has been passed to increase the state pension age to provide a significant boost to long-term fiscal stability. In Greece, the Government are discussing breaking the link between the national minimum wage and the annual inflation rate, and market reform is being promoted to allow businesses to set wages independently of collective agreements.
Mr Hoban
Let me continue. I have only three minutes left, and I want to ensure that I address as many of my hon. Friends’ questions as possible.
We are seeing structural reform to improve the competitiveness of economies hand in hand with IMF programmes. I hope that that will reassure my hon. Friends that reform is taking place in those countries to ensure that they meet their international obligations.
Mr Baron
Returning to a previous point, I suggest that the reason why the eurozone crisis is causing a bit of a problem over here is that existing policy is making the situation worse. Denying devaluation is forcing greater austerity packages on populations that are already trying to pare down their debt. That is the problem that the Government do not see.
May I take my hon. Friend back to devaluation? The Government make great play of the fact that only three of the 53 packages go to the eurozone. Can he name one programme outside the eurozone where a country cannot devalue?
Mr Hoban
My hon. Friend seems to believe that devaluation is necessary to restore economic growth. That is not the case. Ireland is a country that cannot devalue, but a consequence of how it implemented its reform programmes is that in quarter 2 growth increased by 1.6%, with a 2.3% increase year on year. That demonstrates that devaluation is not necessary to improve a country’s competitive position, for it to earn its way out of problems or for it to grow. Devaluation may make life easier, but it is not impossible for an economy to grow, even if currency devaluation is not possible. In September, the troika concluded that the programme is on track and remains well financed. In Ireland, the authorities are implementing a programme policy.
In the euro area, we are seeing programmes to restore competitiveness, but those reforms must be made throughout the eurozone, if the eurozone is to strengthen and help to underpin economic growth in the UK. No request has been received as yet for additional resources from the IMF, but the role that it can play in underpinning global economic stability is important, and this is an opportunity that the UK should consider if we are to resolve some of the problems in the wider global economy, tackle the fragility and, by definition, improve stability in the UK.
Bletchley-Oxford Rail Link
(12 years, 5 months ago)
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Iain Stewart (Milton Keynes South) (Con)
It is a pleasure to serve under your chairmanship for what I believe is the first time, Mr Caton. I am delighted to have this opportunity to help to promote the case for reopening the east-west railway line, which would link Reading, High Wycombe and the rest of the Thames valley with Oxford, Bicester, Aylesbury, Bletchley, Milton Keynes, Bedford and destinations further east.
The campaign is run by the East-West Rail Consortium, which is a partnership of local authorities, the South East Midlands local enterprise partnership, rail operators and Network Rail. The ambition is to have the western section included in the next control period—CP5—and HLOS, the high-level output specification, from 2014. I am in the process of establishing an all-party group to help to promote this campaign.
The east-west railway has the informal and slightly romantic name of the Varsity line, linking as it does Oxford and Cambridge, although the extent of the route is much greater than that, particularly the link to Aylesbury. My comments today will primarily focus on the western end of the east-west rail link. I should make it clear that many, including my hon. Friend the Member for Cambridge (Dr Huppert), regard this section as a vital first step to opening the eastern end of the line between Bedford and Cambridge, and from there linking into the existing rail network serving Cambridgeshire, Norfolk and Suffolk.
Mr Andrew Smith (Oxford East) (Lab)
I congratulate the hon. Gentleman on securing this important debate and on his establishment of the all-party group. As he has mentioned the other place, I want to get in early and mention Oxford and how strong the support is for this initiative across political parties, both in Oxford and in the wider Oxfordshire county. The cost-benefit ratio is, of course, particularly good.
Iain Stewart
There is indeed widespread support along the line of the route and across parties. I was about to mention that this is not a new campaign. A former constituent of mine, a Mr Chris Wright, e-mailed me at the weekend to say that this year marks the silver anniversary of his involvement in the campaign to reopen the line.
By way of background, the line was built in phases between 1846 and 1862. The first attempt to close the line was made in 1959, but a local campaign opposed the closure. It did not even feature in the Beeching plans in the 1960s. It was only when fast trains were introduced between London and Cambridge and London and Oxford in the ’60s that patronage fell away to such an extent that it was quicker for people to travel into London and back out again rather than make the cross-country journey. British Rail withdrew passenger services, except of course for the section between Bletchley and Bedford, which remains in operation today. Even though passenger services were withdrawn, the line remained in operation for many years and was used for a variety of purposes, including freight services and for diversionary passenger services when the main line was undergoing engineering work.
In 1993, the section between Bletchley and Calvert Junction was mothballed, although much of the track bed remains and, thankfully, none of the line has been built on. Much of the route is already back in use. In 1987, British Rail reopened the Oxford to Bicester Town section. The Chiltern Railways Evergreen 3 project, subject to the Secretary of State’s decision on the recent public inquiry, plans to upgrade the line and build a new chord, which would see fast passenger trains from London to Oxford via Bicester and High Wycombe.
Chiltern Railways services have also been extended north of Aylesbury to the new Aylesbury Vale Parkway station, which has been built to service new housing development in the north of that town. The section between Aylesbury and Bicester remains open for freight purposes, so the line needs to be upgraded only for passenger services. My right hon. Friend the Member for Aylesbury (Mr Lidington) is a strong champion of the restoration of this passenger service.
John Howell (Henley) (Con)
The historical perspective is useful and my hon. Friend is setting it out clearly. There is enormous support for this project including from, for example, Oxfordshire county council. A wide spectrum of organisations now supports it, and it will bring enormous benefits for people in my constituency who are within striking distance of Islip station.
Iain Stewart
I am grateful to my hon. Friend who illustrates the widespread support for this project. It cuts across both the public and private sector. I will come on to some of the benefits that I believe restoring this link will provide.
Ian Paisley (North Antrim) (DUP)
The hon. Gentleman has outlined a history of the railway being in and out of fashion, and then back in again because demand renews as population shifts. That is very telling, because it seems to be the history of our rail system. Indeed, it is similar to what has happened in Northern Ireland. Does he believe that one of the benefits of rail is to stimulate the local economy and that that is the best way to get the economic growth that we so desire?
Iain Stewart
I am relieved that the hon. Gentleman is not calling for the line to be extended via a new tunnel under the Irish sea to Ballymena, which might be a little too ambitious. Nevertheless, he has made an important point. The country made a strategic mistake by closing so many railway lines in the ’60s, which we are now painfully and expensively trying to rectify. I will come on to the economic benefits that he has mentioned.
George Freeman (Mid Norfolk) (Con)
I congratulate my hon. Friend on raising this topic. On the role of rail in promoting economic growth, I want to put a word in for extending the innovation corridor across East Anglia to Norwich. I speak partly on behalf of the Economic Secretary, who cannot be here today. If we look at the story of the Cambridge phenomenon, one of the single biggest contributors was investment in the Norwich-Cambridge railway line and the non-stop connection. If we want to rebalance the economy, we should consider the eastern region’s strengths in cleantech, biotech and life sciences. Extending the Oxford-Cambridge-Norwich corridor would play a key part in unlocking our global potential.
Iain Stewart
My hon. Friend makes an excellent point. I see this line as creating an arc of technology and new industry, which would be hugely beneficial to the economy. As I have said, I will come on to that in a moment.
There is another piece of the jigsaw. In 2008, Milton Keynes Central station was remodelled to enable it to incorporate east-west trains. This project is not about a new railway line; it is about reinstating, upgrading and integrating sections of railway line that already exist. As I shall come on to in a moment, that can be done for a comparatively small capital investment, and the project enjoys a benefit-cost ratio of more than 6:1.
Turning to the benefits, the east-west rail link is good for business and economic growth, good for the environment and good for the nation’s wider strategic transport aspirations. At a time when everyone is shouting for more growth in the economy, this project would provide a rail link to an economic corridor that is at the cutting edge of the UK’s economy. It would, for example, link Reading at the heart of the Thames valley, Science Vale UK with its world-leading research and development facilities, Oxford with its academic and tourism economy, Eco Bicester, which is one of the four eco-towns in the country, and my home area of Milton Keynes, which is a fast-growing new city with a dynamic economy. As my hon. Friend the Member for Mid Norfolk (George Freeman) has just pointed out, it would link with Cambridge, East Anglia and all the important economic sectors.
Peter Aldous (Waveney) (Con)
Does my hon. Friend agree that the proposal would play a valuable role in getting freight from the east coast ports across the country without needing to go into London? It would also provide another way for passengers to travel without using the over-congested Great Eastern line from Norwich to Liverpool street.
Iain Stewart
My hon. Friend makes an important point. My comments are primarily about passenger services, but the freight side is equally valuable in putting together the strategic network for the country.
This area’s economic strengths lie in key growth sectors for the future, such as high-value-added, science-based research and development, precision engineering and, especially, automotive engineering—Red Bull Formula 1 is located in my constituency and won this year’s constructors’ championship—pharmaceutical and life science research and development, green technology and low-carbon services and products. All those things are attractive to inward investment, and I believe that a fast, reliable public transport corridor that links them together and to the rest of the United Kingdom, as well as to the population centres from which they will draw their work force, will help to generate up to 12,000 new jobs.
Ben Gummer (Ipswich) (Con)
I congratulate my hon. Friend on bringing this important matter before the House and the Minister. The largest software development centre in Europe is just outside Ipswich, and it would be a great help to link that to other centres of excellence at Cambridge and Oxford. The line between Felixstowe, Ipswich and Cambridge has already been built, and it will be improved thanks to this Government’s investment.
Iain Stewart
I am grateful for that intervention, which again illustrates the arc of economic growth that runs from east to west. The western section of the line will be instrumental in opening up the second phase of development eastwards.
Richard Fuller (Bedford) (Con)
I, too, congratulate my hon. Friend on securing the debate; the Minister must be impressed to see a rail project that has such widespread, extensive and popular support, let alone with the economic benefits that have been outlined. Does my hon. Friend believe that such a project would also help with areas of economic deprivation? My constituency has seen levels of unemployment that are above the national average. Too often such issues are thought to affect other parts of the country and are sometimes overlooked in the eastern area.
Iain Stewart
My hon. Friend makes a valuable point. The south-east is assumed to be uniformly wealthy, but that is not the case. My constituency also contains pockets of deprivation, and this project will stimulate overall economic activity and benefit all areas.
A key benefit of this project would be a reduction in journey times, leading to a modal shift in our methods of transportation. The proposed rail link would result in a significant reduction in journey times from east to west. Road transport is a nightmare along that corridor, particularly in the key middle section of the line. I often have to drive west from Milton Keynes along the A421 trunk road between Bletchley and Buckingham and the A4421 from Buckingham to Bicester. Both roads are single carriageways, and they are so congested that it is difficult to predict journey times with any accuracy.
The time savings will be transformational. For example, a car journey between Milton Keynes and Oxford, which can take up to an hour and a half, would be replaced by a 40-minute train journey. The journey from Oxford to Bedford would reduce from over two hours by car to one hour by train. The east-west rail line would also open up a new direct rail link from Milton Keynes to Aylesbury and the rest of the Chiltern Railways network to and from London Marylebone. It would help to achieve a modal shift from car to rail, with all the environmental benefits that that entails.
Hon. Friends have raised the issue of wider connectivity and freight, and the east-west rail line would provide much better links with the UK national rail network. It would join up the Great Western line, the west coast main line and the midland main line, which in time would be followed by the east coast main line and the network in East Anglia.
The potential for wider rail services—passenger and freight—to use that corridor is significant, both for scheduling new longer distance services in the future, and for providing a north-south relief route should engineering work be planned on one of the main lines. Such a link would be a valuable piece of the UK’s strategic railway jigsaw, and indirectly it would also relieve some of the pressure on London, which is a point raised by my hon. Friend the Member for Waveney (Peter Aldous). Many people find it easier and quicker to travel into London and go back out, rather than travel across country.
I hesitate to raise this issue, given its controversial nature in the rest of Buckinghamshire, but the east-west rail link would intersect with the proposed route of High Speed 2—the Minister and her colleagues will be glad to hear that I do not intend to enter into the pros and cons of HS2, because there will be plenty of time for that in the weeks and months ahead. Nevertheless, such an intersection would open up the possibility of a parkway station. If HS2 proceeds along the planned route, I would like to see the business case for a parkway station properly assessed in the context of the Y-network, and connections to Heathrow and High Speed 1. More than 500,000 people would live within 30 or 40 minutes’ rail journey from a parkway station, which might significantly augment the business case for HS2. It would also go some way to answering the justifiable objections of people in Buckinghamshire who claim that they will endure the pain of HS2 but receive no gain. That, however, is a side issue, and the case for the east-west rail link stands independently from that for HS2.
All in all, the east-west rail project could generate an additional 2.5 million rail trips annually, and result in nearly 1.5 million fewer car journeys. It has the potential for an annual uplift in regional gross domestic product of £38.1 million and could generate additional annual tax revenues of £17.1 million. All those benefits could be secured for a relatively modest capital investment of £250 million, which, when put in the context of the £33 billion needed for HS2, seems a comparatively small sum. If 100% publicly funded, the project has a benefit-cost ratio of 6.3:l, and the ratio is 11.2:1 if there is a private sector contribution. Again, that compares favourably with the benefit-cost ratio for HS2 of about 2.6:1.
Much work is being undertaken by the consortium to realise private sector investment in the east-west rail project. After five and a half years, a positive income stream would be generated through the fare box and no ongoing public subsidy would be required. Last July, Oxford Economics was commissioned by the consortium to provide an independent assessment and review of the east-west rail link, and it concluded that there is a strong business case for the project to go ahead.
Through local enterprise partnerships, the consortium is developing a funding package to enable the delivery of the scheme via both the public and the private sectors. One key source of funding will be the HLOS for CP5, which is unique in that it is being promoted by a non-rail-industry entity. Consequently, it has not yet appeared in the initial industry plan for CP5, but nobody should take that as a sign that it is not a viable project. I believe that the east-west rail project is a no-brainer and that with a fair wind trains could be running by 2017. If the Government are looking to fast-track infrastructure projects that will deliver growth and jobs, may I gently suggest that the east-west rail project could easily be brought forward and that trains could be running by the end of this Parliament?
I conclude by paying tribute to Patrick O’Sullivan, the consortium’s project manager from Jacobs Engineering UK, and all those involved with the East West Rail Consortium, together with those who have campaigned to restore the rail link for many years. I am extremely grateful to have had this opportunity to present the case for the east-west rail link, and I hope that I have persuaded my right hon. Friend the Minister of its merits.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
It is a pleasure to serve under your chairmanship, Mr Caton, and I congratulate my hon. Friend the Member for Milton Keynes South (Iain Stewart) on securing the debate. I welcome the opportunity to consider the merits of the east-west rail proposal, and I welcome the strong attendance from MPs who support the project.
Like those of my hon. Friend, my remarks will focus on the western section of the project—the part most developed—although I may touch briefly on the central section if time permits. He has outlined with great clarity the potential benefits of reopening the line along the western section, and described the boost to economic growth that he believes it would bring, as well as the improvements in journey times, the potential for a modal shift in transportation and, not least, the potential boost to high-tech industries.
I was very impressed by my hon. Friend’s contribution, and I was equally impressed by the presentation I received on this project last year, when my hon. Friend, together with my hon. Friend the Member for Milton Keynes North (Mark Lancaster), brought the chairman of the East West Rail Consortium to see me. At that useful meeting I agreed that the Department for Transport would work with the consortium in developing its plans, and that work has since progressed.
The Department has started evaluating the consortium’s plans and forecasts as we prepare the high-level output specification that will set out the Government’s requirements for rail control period 5 from 2014 to 2019. We will consider seriously whether we can provide funding to support the east-west rail project as part of CP5. We have heard today from hon. Members on both sides of the Chamber about the impressive value-for-money case that it seems can be established for the project. However, value for money on its own is not enough. We also need to consider affordability. There is no doubt that this is a very substantial scheme. Whether it proves affordable depends on the extent of alternative sources of funding available to support the project. It also depends on how the benefits of delivering the project compare with competing priorities for CP5—for example, the northern hub or other proposals to improve connections between our northern cities.
As my hon. Friend the Member for Milton Keynes South said, east-west rail is not in the initial industry plan put forward by the rail industry for CP5, but I can assure him that this project will be considered just as seriously as the proposals that are in the industry plan. It is worth noting that the industry plan does make provision for east-west rail, notably in relation to Network Rail’s proposals for Oxford station. I can also happily inform my hon. Friend that the Association of Train Operating Companies is providing expert advice to the Department on the best-value long-distance passenger services that might use the route if it goes ahead. That is assisting our evaluation of the project and could enhance the value-for-money case for east-west rail.
I have been very impressed by the work of the consortium as well as the supportive MPs. The collaboration of the 20-plus local authorities in the consortium provides a good example for others to follow in building a broad local consensus for an ambitious vision of new rail infrastructure to support economic growth and, potentially, housing growth.
Richard Fuller
Will my right hon. Friend deal with an issue that is gaining currency for some of us who represent constituencies in the eastern area and in the south-east? Government investment priorities sometimes overlook the fact that there are significant areas of deprivation in the south-east. There is a tendency to favour projects in other parts of the country. This project is not only vital to economic growth, as has been mentioned. It is also of value in restoring opportunities for job creation in areas and pockets of significant deprivation. Will she deal with that issue?
Mrs Villiers
Certainly I will. My hon. Friend the Member for Pudsey (Stuart Andrew), who is sitting beside my hon. Friend the Member for Bedford (Richard Fuller), often berates me for not committing sufficient funding to rail infrastructure outside the south-east. The reality is that the Government must consider carefully where taxpayer funding will deliver the greatest economic benefits. Whether we are talking about deprivation in the south-east or in the north, that is a crucial issue that we need to consider to take the difficult decisions on where to prioritise funding. We do not at all assume that everywhere in the south-east is prosperous. We know that improving our transport infrastructure in both the south and the north can deliver major benefits in quality of life, jobs and growth. That is why we are seeking to roll out a major programme of investment that helps the whole country.
The consortium has funded much of the cost of its work on the project to date, steadily developing its plans so that they stand on an equal footing with projects being proposed by the rail industry nationally in the IIP. The consortium has also explored ways for local authorities to use the forecast economic growth to fund part of the building costs if the project gets the go-ahead. That could make the project much more affordable, as we have heard. If we can agree to provide some funding for east-west rail as part of CP5, we may look to the consortium to make good on those local contributions on which it has been working so hard.
Ben Gummer
Certainly many of us will welcome the tone of the Minister’s statement, which is exciting. In the mix is the Greater Anglia franchise, which I know she is working on and which will start in 2014. A component of that will be infrastructure improvements. As much of this line falls within that franchise area, I wonder whether it would be possible to draw within the franchise a need for the new holder to invest in it as part of the franchise.
Mrs Villiers
Time constraints prevent me from going into the detail of what might be included in CP5 for the Greater Anglia area, but I am well aware of my hon. Friend’s campaign to improve the infrastructure there. That will be considered very seriously as part of both the HLOS process and the refranchising process.
Different ways of delivering the project have been carefully assessed by the consortium, with each one being tested for efficiency. I welcome, for example, its work on finding a lower-cost approach to planning consents, with a mix of permitted development rights and local authority planning permission.
The Government are already working on projects that could benefit the east-west rail corridor. As my hon. Friend the Member for Milton Keynes South said, the route between Oxford and Bicester Town, as well as being part of the east-west rail project, is being upgraded under the Chiltern Evergreen 3 programme. That will deliver new train services between Oxford and London Marylebone by 2014. Our agreement with Chiltern Railways includes funding the cost of strengthening the bridges and improving the tunnel, which will ensure that that section is capable of accommodating possible traffic resulting from east-west rail. Chiltern has planned its improvements so that the section is ready for a further upgrade of track and signals. Again, if east-west rail happens, that will be necessary.
My hon. Friend was brave enough to mention HS2. If HS2 goes ahead along the preferred route put forward for consultation, that could co-exist with east-west rail; there would be some synergies, potentially. The preferred route for HS2 would run parallel to east-west rail, between Quainton and Claydon. The operation of HS2 could free up busy parts of the west coast main line, including Milton Keynes, enabling new regional and local services to be run. That could improve the business case for east-west rail by providing space for more long-distance connecting journeys.
On my hon. Friend’s proposal for an HS2 station, I can assure him that we are considering with great care all the consultation responses, including all those that have proposed new stations. He proposed that we should fast-track east-west rail and deliver it by the end of the Parliament. I see that as quite an ambitious goal, but I will take it on board in discussions in the run-up to the growth review.
I think that the consortium is right to concentrate on the western section of the route. The case for reinstating the central section between Bedford and Cambridge is less developed. However, it is generally accepted that if the western section gets the go-ahead, that will be the time for more substantial work to see whether we cannot take forward the rest of the project at some future point.
The railways are experiencing a renaissance in 21st-century Britain. More people are travelling by train than at any time since the 1920s. Despite a deficit as serious as any in our peacetime history, we are undertaking the biggest programme of rail upgrades since the Victorian era. In the days before privatisation, projects on the scale of east-west rail to reopen lines closed years previously would have been scarcely conceivable. Now, they are not just conceivable, but credible and even realistic. However, despite—
Mrs Villiers
I am about to run out of time. Despite the strength of the business case, there is no doubt that a very large amount of investment—about £250 million—is required to rebuild the route, and the expanded train services would probably require extra subsidy in the early years of operation. Ultimate success will therefore depend on a continued focus on getting costs down and bringing in additional funding sources. It will also depend on what is affordable, taking on board competing priorities for CP5. This debate has provided a very welcome opportunity to consider those issues and is a valuable contribution to the preparation for the HLOS statement and the Government’s decisions on what it will be possible to fund in the CP5 period.
Mr Andrew Smith
Before the Minister concludes, will she give way? There is still time remaining.
Mrs Villiers
We are continuing to assess this. The HLOS statement will be published in the summer. I think that the latest deadline for that is July, but we have not set a specific date for publication. In the meantime, we will continue to work on this project, alongside the consortium, and as and when there is an announcement to be made or progress to be announced, I will ensure that the right hon. Gentleman is the first to hear about it.
Aviation Industry
(12 years, 5 months ago)
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Mr Brian H. Donohoe (Central Ayrshire) (Lab)
It is good to see you, Mr Gale, in the Chair. You and I, of course, have something in common, in that you used to serve, while I still do, in the British Transport police as a special constable. You will know something about transport, and I presume that I, too, know something about it.
It is good to have secured a debate on an important matter this afternoon and to see so many Members, under a one-line Whip, here to support me, presumably, on the importance of aviation. It is also good to see the Minister in her place, and the shadow Secretary of State, my hon. Friend the Member for Garston and Halewood (Maria Eagle), in hers this afternoon—unusual, it has to be said, for an Adjournment debate. I think that that shows the importance of this afternoon’s subject.
My mind was taken away from the subject at the weekend because young Rosie Donohoe, my first grandchild, was brought into this world at 2.45 pm on Saturday. Rosie and her mother Lisa, and her father Graeme, are well.
Mr Donohoe
I thank hon. Members.
I return to this afternoon’s important subject, which is the future of the UK aviation industry. The aviation sector is vital for the economy, bringing financial benefits both to the UK and to those who serve the airline business. It is also important for the skills and the high-skilled employment that it brings and because of the important growing marketplace that the airline industry is within.
Coupled with that is the importance of the aerospace industry, which is connected to the airline industry in every respect. I have such an interest in the subject because a fairly sizeable chunk of employment in my constituency is based on those two industries. Spirit, which employs more than 1,000 people, is based in my constituency. Goodrich, GE Caledonian and BAE Systems are just a few of the companies that my constituency has within the sector. All are major stakeholders in the future of the aviation industry.
The aviation industry requires the Government to step up their responsibilities to provide a political framework to allow the sector to grow sustainably, integrated with other transport modes, which are equally important. We were involved in a few discussions just a number of weeks ago, and I see the hon. Member for Blackpool South—
Mr Donohoe
Sorry; I will always get that wrong. I see the hon. Member for Blackpool North and Cleveleys (Paul Maynard) in his place this afternoon. He has taken the lead on the case regarding High Speed 2, which is part of the overall package that we have to consider today.
More than any other industry, aviation operates in a global marketplace and needs global solutions to avoid market distortions that would prejudice against UK industry. In that respect, it would be dangerous for the UK to add or continue with unilateral actions that would serve only further to drive UK industries abroad, along with the financial and skills benefits they are associated with.
About 15,000 jobs a year are at stake unless the UK finds way to increase aviation capacity in the south-east. The management at Gatwick airport has argued in a submission to the Department for Transport that that is of great importance to its airport, as well as to the whole country. The UK stands to lose between £20 billion and £47 billion of benefits over 30 to 50 years unless the Government reconsider the current stance of no expansion.
Iain Stewart (Milton Keynes South) (Con)
I congratulate the hon. Gentleman and his family on the safe arrival of Rosie. He mentions airport capacity in the south-east. With the advent of a high-speed rail network, which he also mentioned, what is termed the south-east could be expanded to include airports such as Birmingham, which has considerable spare capacity. Should we not look at the whole of the southern part of the United Kingdom, rather than just what is narrowly defined as the south-east?
Mr Donohoe
I will return to that point, because I have included in my speech the effect of that and the question of the whole package.
Mary Macleod (Brentford and Isleworth) (Con)
The hon. Gentleman talked about the need for additional capacity. Does he agree that London—he is talking about the south-east—remains the best connected city in the world, with more than 130 million passengers, which is more than many other great cities?
Mr Donohoe
I will come on to that as well; I have a speech that I would like to continue with. Last month, another runway was opened in Frankfurt, which will impact more and more on the position of the UK aviation industry.
The lack of hub capacity could cost the economy right now some £1.2 billion a year in lost trade. The CBI and other organisations, such as the Institute of Directors, say that that must be tackled if the UK is to maintain its global competitiveness, and I support them.
The coalition reversed the previous Government’s plans to build a third runway at Heathrow and, as I understand it, oppose the building of new runways at Stansted or Gatwick, which runs at 78% capacity. The coalition has said that it will produce a new aviation framework by 2013, but we need to bring that forward. It is clear that unless we do so, we will lose business.
As a reminder, the UK is the sixth biggest economy in the world. The world is becoming increasingly interconnected, and its centre of economic gravity is moving further east, but the UK does not have a cohesive aviation policy. The coalition has allowed us to fall far behind. Frankfurt opened its fourth runway just last month. France’s Charles de Gaulle already has four runways, and Schiphol, which is becoming more and more of a direct competition, now has six. We therefore have to think about where we are going in the future. Is it important for us to continue having a hub airport in the first place? One wonders whether that should be the way forward.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
I hope I can reassure the hon. Gentleman. Will he welcome the fact that passenger numbers at Heathrow have reached record levels over recent months? I recognise the crucial importance of Heathrow airport, which is why the Government have arranged a programme to ensure that Heathrow is improved and works better, with reforms to security and other measures, which I will talk about in my speech.
Mr Donohoe
It would be wrong not to. Indeed, there is the possibility of further expanding the number of take-offs and landings by increasing the number of mixed-mode operations, which I understand are still being operated at Heathrow. That will allow it to expand further. The problem with that is all the environmental issues will start to create a real problem, because the noise in the air would become far greater than the noise today. Given the size of Heathrow, there is a clear argument, as the industry and all whom I know have been making for some considerable time, for further expansion through a third runway.
Mrs Villiers
I am afraid that in this instance I may have to disappoint the hon. Gentleman. The trial that is under way at Heathrow is not mixed mode, but a series of operational freedoms geared at improving resilience and tackling and mitigating delays. Those freedoms are substantially different from mixed mode because we are great supporters of runway alternation.
Mr Donohoe
I will always be corrected by the Minister in that respect. Under the previous Government, there was a trial period of mixed mode. I understood that the only way we could increase the number of passengers going through the airport was if we brought mixed mode into operation. I do not think I will be proven wrong in that respect.
Graham Stringer (Blackley and Broughton) (Lab)
Does my hon. Friend not agree that the number of passengers going through Heathrow is only one measure of its economic importance? If we look at the destinations served by Heathrow in its constrained state, we see that it is losing out in many of the emerging economies such as China, Brazil, Malaysia, India and Russia, and that is where the damage to the UK economy is being done.
Mr Donohoe
I could not have put it better. My hon. Friend will be speaking in this debate and will no doubt reinforce that point. It is clear that that is the situation.
Mr Donohoe
I want to make some progress because I know that there are a number of hon. Members who wish to speak. To give way again will impact on that wish, so I will, if I may, move on.
The London Mayor believes that London will become a destination on the end of a branch line unless a new international airport in the Thames Estuary is built. Quite a lot of work would have to be done for me and many in the industry to be convinced of the practicality of such an airport. It is fine putting concrete on the ground, but difficulties emerge when it comes to airspace. The situation in the south-east is among the most complex in the world. Such consideration is vital in assessing the needs of an estuary airport, as there are major structural airspace implications. Of course, we could carry out such work; we have never argued that we could not. However, the scale of the airspace structural change necessary to accommodate the proposal would be enormous and should never be underestimated.
In NATS’ expert view, a four-runway estuary airport could not operate in tandem with Heathrow if Heathrow were to remain the same size as it is today. Such an airport would need to be a replacement for Heathrow. There would be significant implications for other airports in the region, most notably for City airport, which I use weekly, Southend, Stansted and Biggin Hill. It is not simply a matter of shifting current traffic patterns to the east. The eastern boundary of UK airspace is an important factor. Belgian and Dutch airspace and the proximity of airports such as Schiphol and Brussels mean that climb and descent profiles would be affected, so international co-operation would be required.
With westerly winds in the UK prevailing for 70% of the time, westerly operations may increase departures over central London itself. Refining existing flight paths provides more certainty for people already living below them and would be better than blighting new areas, which is what could happen if Boris’s idea goes forward.
Airspace is a critical pillar of national transport infrastructure, yet it is too often the forgotten factor in the consideration of aviation expansion, particularly airport development. The UK has 11% of Europe’s airspace and 25% of its traffic. We are Europe’s transatlantic gateway, which is a strategically important industry underpinning economic growth.
Airports do not work without the airspace to feed them. The Civil Aviation Authority has set out a blueprint for future airspace strategy, and NATS and BAA are co-chairing a cross-industry group over the next 12 months to work out an implementation plan. A major review of airspace has already been started. It has to assume that the current infrastructure will be in place. This is a once-in-a-generation opportunity, so the Government’s policy framework needs to be able to stand the test of time. Fundamentally, if this opportunity is not to be lost, we need cross-party support, which the shadow Secretary of State has argued for for some time.
We face the possibility of being stacked in the air—it happened to me only yesterday. I believe that that is an inefficient way to operate, but some say that it is an extremely efficient means of maximising limited runway space. None the less, it is not very good for the passenger who is trying to get into London. NATS supports the provision of additional runway capacity in the south-east because that is where the demand is. That sounds like common sense.
Taxation is another important area. When I applied for this debate, I felt that somebody from the Treasury should be here with the Transport Minister. The industry is charged some £7.9 billion in tax. Tax is paid by aviation firms, and employees contribute around £6 billion. There is also the evil air passenger duty, which was introduced by a Labour Government. When it started, we had to pay £5 for short-haul flights and £10 for long-haul flights. Now, if a family of four want to go to Australia, they have to pay more than £700 in duty. I know families who now travel from Glasgow to Frankfurt, Charles de Gaulle or Schiphol. They then take their bags off the plane and get on to another plane to reach their destination just so that they can save themselves that exorbitant tax. We are one of very few countries in Europe to apply such a tax, and the Treasury needs to look at the matter. Without a doubt, we are haemorrhaging passengers who travel, connect and interconnect through Heathrow.
Ian Paisley (North Antrim) (DUP)
I welcome what the hon. Gentleman says about airport duty. Northern Ireland has successfully campaigned for a reduction in its duty and we thank the Government for recognising that. The other issue that I want him to address is the connectivity between the peoples of these islands. Does he agree that we must not sacrifice our internal links for the sake of the more lucrative external links out of the United Kingdom? I am particularly concerned about the potential sale of British Midland International. If it goes ahead, will we see a reduction in internal flights between Northern Ireland and London and between Scotland and London? That is a concern.
Mr Donohoe
I am grateful to the hon. Gentleman for that; I will come on to that matter. Suffice it to say that, only last week, there was an announcement that British Airways was to buy the BMI routes. I predict that those will be the ones that operate between Scotland and England. We have already lost the service from Glasgow. Ryanair’s winter programme is being implemented and there are no flights from Glasgow Prestwick to Stansted. Already we are seeing problems.
As the hon. Gentleman travels in planes as often as I do, he may have experienced similar problems. Any plane that I get on from Glasgow is always full, which shows that there needs to be further expansion in the number of domestic landings in central London. I will come back to that argument a little later.
Returning to APD itself, there is no doubt that that tax was introduced, like most taxes, at a minimal level, but it has become a significant factor in how, and from where, people travel long haul.
In the future, we need to have a joined-up approach on aviation policy and taxation, which of course would involve the Department for Transport and Her Majesty’s Treasury. Such an approach is required to ensure that the tax system and aviation policy are aligned and consistent. Unless they are, we will lose out; of that, there is no doubt. A joined-up approach is absolutely imperative to ensure a sustainable and competitive aviation sector.
Returning to infrastructure development, the Government have adopted an aviation policy that states that there will be no new runway capacity in the south-east, potentially up to 2050. That approach is flawed. As demand increases, there will be a need for new capacity.
Mrs Villiers
Just to reassure the hon. Gentleman, the Government have never said that we have ruled out any capacity expansion in the south-east over that period. What we have said is that the coalition will not give permission for new runways at Heathrow, Gatwick or Stansted. That is not the same as saying that there will be no expansion in the south-east ever, under any circumstances.
Mr Donohoe
I take that point on board, but the Minister is drawing a very fine line in that sense, because I would argue that unless there is an increase in the number of runways, the potential for increasing the service all that much is very limited. I think I would be proven correct by asking the views of those in the industry itself. That is the clear answer I get to the point she is making.
There is no doubt that capacity in the south-east is restricted. As I argued earlier, the south-east is where the need for more air transport services is greatest, yet there is less ability to extract more capacity from the existing infrastructure. Heathrow and Gatwick continue to operate at nearly 100% capacity, even with continuing reductions in domestic services.
Looking to the future, in a global and highly competitive industry such as aviation, any demand management measures implemented by the UK Government would have far-reaching consequences for the economy, jobs and our connectivity with the rest of the world.
Karen Lumley (Redditch) (Con)
Birmingham International airport, which is near my constituency of Redditch, is running at 40% capacity. With High Speed 2 hopefully coming on-stream soon, does the hon. Gentleman agree that that airport could be used to enhance passenger travel?
Mr Donohoe
The difficulty is that passengers will not travel out of London to Birmingham to fly to Schiphol and then fly long haul; the hon. Lady might think that they will, but they will not. The idea that they will do that is just nonsense. What they will do is fly short haul from wherever they happen to be to one of the connections that are readily available in mainland Europe and, it is argued, beyond, rather than doing what she is suggesting. Her suggestion is just not feasible as far as the aviation industry is concerned. In the short term, therefore, methods of leveraging capacity into existing airports need to be agreed, and in the medium term, capacity expansion at regional airports and in the south-east, including a second runway at Gatwick, should be considered.
That brings me to the point made by a Member from over the water in Northern Ireland: the hon. Member for North Antrim (Ian Paisley), who has now left the Chamber. There is the possibility of a further solution to the problem of internal connections within the UK, which is the use of a runway that is already in existence. That runway, of course, is at Northolt, which is only 4 miles from Heathrow. With a bit of realignment, that runway could take on board most of the domestic air traffic that flows into the south-east. That would allow the slots at Heathrow for long-haul flights, which come at a premium, to be relieved and it would allow passengers from the other regions in the UK to connect at Heathrow itself.
I have looked at this idea in some detail. The CAA has argued that it would be difficult to employ Northolt as an airport, but the difficulty is not insurmountable. Indeed, there are those within the industry who argue that Northolt is part of the solution to the capacity problem. I do not know whether the Government have looked at Northolt at all; if they have, it would be very interesting to know the Minister’s view. For me, at almost a stroke the use of Northolt would mean that a third runway at Heathrow could become available, and it could be connected very simply to the main complex at Heathrow. That is a solution that should perhaps be given more thought.
In the long term, of course, the Government themselves have to decide whether the UK needs a hub airport. If they do and they decide that it will not be Heathrow, significant questions need to be asked, including where the hub airport will be located and when, and what criteria will be used to decide its location.
The current situation is unsustainable. The regions will be deprived. We have already heard about what is going on to the routes between Scotland and Heathrow, and between Northern Ireland and Heathrow. That problem will not go away, because airlines will be more inclined to go from Heathrow long haul, allowing for a far greater payload than would ever be the case with any domestic flight. That issue must be looked at.
In the future, we need to look more seriously at what the competition are doing. I have already said that Frankfurt airport has opened another runway, Schiphol airport has six runways and Charles de Gaulle four. Those airports are catching up quickly with Heathrow and their passenger numbers are growing at enormous rates. Their owners must laugh with glee at the stupid situation that we in the UK find ourselves in regarding our own aviation future.
Aviation is a significant contributor to the UK economy and nobody can argue against that. It is a driver of the wider economy, and it has been a great server of the public and a benefit to society. Although aviation can have an adverse impact on the lives of people living around airports and under flight paths, it can also bring many benefits to local and regional economies in inward investment and jobs. The aviation industry is committed to reducing its local and global environmental impact, but airport expansion—where it is required—is an essential tool for the growth of the UK economy.
A successful UK aviation policy requires a joined-up approach by Government that addresses taxation, infrastructure development and sustainability, to ensure that the aviation industry continues to stimulate economic growth and helps to rebalance the UK economy.
As a footnote, I predict that, if there is not an early indication of a change in policy by this Government, British Airways will be off to Madrid airport, which by that time will be run by the owners of BAA, and UK plc will be left miles behind.
Jack Lopresti (Filton and Bradley Stoke) (Con)
It is a pleasure to serve under your chairmanship, Mr Gale. I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing today’s debate and, of course, on the new addition to his family.
As we have heard, the UK aviation and aerospace industries are vital to the UK’s economic success. Moreover, based on the criteria set out by the Government to rebalance the economy, they have a vital role to play in delivering growth through manufacturing and exports. That will be the broad thrust of my remarks.
Our country’s aviation endeavours are quite rightly a huge source of pride to many people. Aviation is a sector in which the UK is undoubtedly a world leader. In aviation, British engineering and manufacturing set the standard and still pull in big international orders.
Filton is in my constituency, and is where I live. Most people would agree that it is at the very heart of the UK aviation industry on the manufacturing side. We are fortunate to have an outstanding cluster of aviation and aerospace companies on our doorstep. Airbus, GKN, Rolls-Royce, Boeing and BAE Systems, to name a few of those companies, all have a significant presence in the constituency of Filton and Bradley Stoke and employ thousands of people.
This debate is about the future of the UK aviation industry, but I want to start by recognising the aviation heritage in my local area and how we reached the world-leading standards of today, because only by appreciating and understanding our past will we be able to maximise opportunities, develop a vision for the future and, crucially, inspire the next generation of engineers, scientists and other people who will work in the aviation industry.
Aircraft have been built and flown at Filton since their inception, and we are proud that our aviation roots are well over a century in the making—last year, we commemorated and celebrated 100 years of aviation in Filton. The pioneer and entrepreneur Sir George White, the humbly born son of a Bristol painter and decorator, was the founder of our local industry and, it could be said, the founder and father of British aviation. In 1910, Sir George founded the Bristol Aeroplane Company, and we should all honour and celebrate his legacy, because what he achieved was truly remarkable. He was a pioneer of aviation, a great philanthropist and a completely self-made man. This great Bristolian was the embodiment of social mobility and enterprise, and his example and legacy should be used to inspire the next generation of aviation and aerospace engineers and scientists. Without his vision, we would not have the home of British aviation in Filton, or the thriving UK aviation industry that we have today.
Sadly, BAE Systems has decided to close the airfield in Filton at the end of next year, but that provides us with many opportunities, with room to expand the existing aviation and aerospace industries locally, and plans are close to fruition for an aviation heritage centre, which will house the last complete aircraft built at Filton, Concorde 216, which was the last Concorde ever to fly. The plans importantly include a science, technology, engineering and mathematics learning centre, which will help to inspire children to go to college and university locally.
Perhaps unsurprisingly, there is a concern in the UK aviation industry that the Department for Transport is anti-aviation. I do not subscribe to that view, and I know that the industry appreciates that the concern is more down to airport expansion issues than to anything else, but the fact remains that it is important for our aviation industry’s airline customers that there is an efficient air transportation system in the UK.
Passenger numbers are set to continue to grow, which will help to fuel further growth in the aviation industry. Department for Transport figures show UK terminal passenger numbers increasing to 520 million per annum by 2050, from roughly 210 million in 2010 according to the Civil Aviation Authority. That increase is modest in comparison with that which will be seen globally, not least as a result of the rise of the BRIC economies—those of Brazil, Russia, India and China—and other emerging markets. Airbus’s most recent global market forecast, published in September 2011 and covering 2011-30, foresees the need for more than 26,900 passenger airliners with seating capacities of at least 100, along with more than 900 new factory-built freighter aircraft. In the same time frame, the world’s passenger aircraft inventory will more than double from today’s 15,000 to 31,500 plus.
We should continue to push for further technological improvements and ensure maximum social and economic value for each tonne of CO2 emitted, but the future growth of the aviation industry presents a major opportunity for the UK economy, and it would be unwise to start playing productive sectors of the economy off against each other as we seek solutions to climate change. In a highly competitive global market, adverse regulations that limit a particular sector’s ability to grow domestically are more likely to increase the possibility of a competitor based elsewhere in the world gaining commercial advantage, than effectively to reduce greenhouse gas emissions. I encourage the Government to work through bodies such as the International Civil Aviation Organisation to promote solid and economically sound solutions.
That said, the overwhelming feeling I have picked up from the local aviation companies that I speak to regularly is that the Government are doing a lot of good work to ensure that the UK maintains its position as the world’s second largest aerospace industry, which is an incredible national achievement given the economic conditions and the global competition.
Mary Macleod
Does my hon. Friend agree that this debate should be largely about not how we expand airports such as Heathrow—I do not subscribe to the need to expand them—but about transport across the whole UK, and about looking for creative solutions? The Eurostar is a perfect example, because most of us who travel to Paris or Brussels take it.
Jack Lopresti
My hon. Friend makes a good point. She has worked very hard in campaigning against the expansion of Heathrow airport. I agree that there has to be a more regional dimension to our transport challenges.
I have been asked by the companies that I talk to regularly to pass on their thanks and compliments to the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), on his commitment to the aerospace growth partnership, which he co-chairs. The AGP is an industry and Government partnership aimed at addressing the future needs of the UK aerospace industry, and it will prepare a strategy that embraces technology, manufacturing and supply chain. Such initiatives give the sector confidence in economically uncertain times. By nurturing such relationships and demonstrating the UK Government’s commitment to the sector, we are ensuring that Britain is one of the best places in the world for aviation companies to do business.
The Government sent another strong signal to my local industry by confirming in the strategic defence and security review announcement last year a major order for 22 of the fantastic A400M aircraft, whose wings are manufactured at the Airbus site in Filton. Not only is it a fantastic bit of kit that will provide a much-needed enhanced lift capability for our armed forces, but it will provide us with many export orders. The SDSR also gave us the good news that 14 specially converted Airbus A330 strategic transport and tanker aircraft will replace the ageing TriStar fleets, which will benefit our armed forces and the local and national aviation industry.
The aviation industry holds one of the keys to the economic growth that the UK desperately needs, and the Government are working hard to support the sector and its highly skilled employees. It is the UK’s highly skilled aviation and aerospace work force who contribute so much to the industry’s success, and I ask the Government to continue to do all that they can to support the industry’s employees, especially in these tough economic times. I was very pleased to hear about the Government-backed talent retention solution from the Business Secretary’s skills and jobs retention group. The TRS is designed to help engineers facing redundancy link up with companies with vacancies for highly skilled engineering and aerospace staff, and it is backed by top companies such as BAE Systems, Airbus, Rolls-Royce and GKN.
The aviation industry is an engine of growth for the UK, and we must do all we can to ensure that it is nurtured and protected. From progress on biofuel and research and development programmes to sustainable aviation projects, the UK is a world leader in aviation. As the industry confronts the challenges of operating in an ever-growing and increasingly competitive global marketplace, we must do all we can to help aviation and aerospace companies make the most of the fantastic opportunities that present themselves.
Graham Stringer (Blackley and Broughton) (Lab)
The future of the aviation industry has been hobbled by Government policy, but that future is important, and I hope to explain why in the few minutes available. I congratulate my hon. Friend the Member for Central Ayrshire (Mr Donohoe) on securing this debate, which is vital not just to aviation but to the whole UK economy.
Historically, the United Kingdom’s aviation business has been the second largest market in the world, not just in the production of aeroplanes but in the flying of them. We are in danger of losing that position; we almost certainly will. The arguments for constraining runway and airport capacity in the south-east fall down when looked at in detail, as do the solutions, and I will try quickly to go through the reasons why.
Aviation is vital to the economy, not just because airports and aeroplanes—the production of them and the flying of people in them—produce jobs, but because reducing the connections that aviation gives us to the rest of the world is, in essence, like switching off the internet. If someone in the House stood up and said, “We’re going to stop the growth of the internet and communications with the rest of the world,” people would think that that Member had gone off his or her rocker. Effectively, however, that is what we are doing by constraining air capacity in the south-east.
There is only one hub airport in this country, and that is Heathrow. By constraining its runway capacity, we will not necessarily reduce any increase in the number of passengers using it, because operators can use larger aeroplanes on the same runways. However, we will certainly reduce its importance to the economy, because we will reduce the number of destinations it serves. Already, the number of short-haul destinations served by scheduled services from Heathrow is 46, while Amsterdam has 67, Frankfurt 74, Paris 78 and Madrid 63. Heathrow still has more long-haul destinations than those airports, but there is an ecology of short-haul and long-haul routes, and as the number of routes diminishes, so Heathrow’s importance also diminishes. Heathrow already has fewer connections to some of the growing cities in China. As I said in an intervention on my hon. Friend, it has fewer connections to Malaysia and to the BRIC—Brazil, Russia, India, China—economies than its competitor hubs in the rest of Europe, so it is already losing out, and it will lose out further.
It is often said that the regional airports can take the strain, and the hon. Member for Redditch (Karen Lumley), who is no longer in her place, said that people will go to Birmingham. However, all the evidence is that the airlines have no levers to help them to get extra capacity at regional airports, and they have not had any for 20 years. We are going through a recession and economically difficult times, and the loss of traffic at regional airports is about twice the rate at Heathrow. Indeed, the Government’s policies—this also applied to the previous Government—are having a perverse impact, because of the nature of the economies involved. Air passenger duty has a really negative effect on regional airports, and some airlines are choosing to use hubs outside a region because of it. The most recent example that I have come across—there are others—is AirAsia, which was more or less signed up to using Manchester airport, but which is now flying from Kuala Lumpur to Charles de Gaulle. The reason that it gave was simply air passenger duty.
What is true for regional airports, where air passenger duty has a differential impact, is also true for the whole United Kingdom economy—we can do the sums and see the transfers. It is not just that flights are not happening at regional airports, but that operators of flights—particularly tourist flights—from Japan, south-east Asia and the emerging economies are choosing to go to Charles de Gaulle, Frankfurt, Schiphol, Copenhagen and Madrid, rather than Heathrow, because of the extra cost of air passenger duty. As a result, air passenger duty is damaging not only regional airports, but Heathrow itself.
I was pleased by the decision to reduce air passenger duty at Belfast airport. However, if we want to use the capacity at our regional airports, there needs to be a differential between them and the south-east airports. Any differential must help our regional airports, rather than being less than helpful to them, as it is at present. The other way that regional airports could be helped is by building infrastructure. Very few airports in this country have direct links to high-speed trains or good public transport connections. Improving public transport to our regional airports at a cost to the public purse would therefore help in some way.
The biggest push that could be given to our major regional airports, such as Birmingham, Manchester and Glasgow—I do not think this really applies to other regional airports—would come from completely opening up the skies. The previous Government gave regional airports the ability to take flights, with their permission, with fifth freedoms, which meant that those flights could pick up passengers at those airports. That is an advantage, but it would be a much bigger advantage —I imagine this would appeal to a Conservative Government—if we completely opened up the skies around those airports, so that any aeroplane could fly in and out, pick up passengers and take them wherever they wanted. Historically, the only reason why that has not happened is the Government’s over-protectionist position towards British Airways and BAA.
Things can be done to help regional airports that go beyond what is being done at the moment, which is counter-productive. Incidentally, if air passenger duty is such a good idea, why do so few other countries in Europe have it? Only four other countries—Denmark, Norway, Malta and Holland—have it; some have tried it and got rid of it because it is so economically damaging. We have to test these things against what our competitors are doing to find out whether we should have them, and I do not think we should.
It is often said that there are environmental reasons for constraining traffic in the south-east. As my hon. Friend explained, however, when we look at the detail of what happens, it becomes clear that people do not stop flying because of constraints in the south-east system; they use other hubs, and the constraints imposed by air passenger duty reinforce that. Rather than taking a direct flight or using Heathrow, people from Manchester will fly to Schiphol, Copenhagen or wherever and fly onwards because it is cheaper. That saves them air passenger duty and it saves them going into the constrained south-east hub. As a result, there is at least twice the environmental damage, because aeroplanes produce most pollutants—carbon dioxide and other pollutants—when they take off. Someone going to, say, Tokyo may go via Copenhagen. There are not, therefore, good environmental reasons for such a view.
Regional airports are not an alternative, for the reasons that I have given. The former Labour Secretary of State, Lord Adonis, said Boris island was bonkers, and within five minutes of looking at it, we can see that it will never happen—for environmental and planning reasons, and because of the sheer cost and financing involved. When there were fewer environmental issues, it took Munich 25 years to develop a new airport, which opened in 1992. Something as huge as Boris island will simply not happen as an alternative.
I should like to make a number of other points, but other hon. Members want to speak, so I will sit down. There is, however, no real alternative to expanding Heathrow; we certainly cannot use Heathrow and Gatwick as one airport. The Government’s policies are hugely damaging to the aviation industry and the UK economy.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing the debate. I shall try to be quick, because I know other hon. Members want to speak, so this will be high speed, if not on high rail, which will make a nice change.
I welcome the progress that the Government are making on aviation policy. They are taking steps in the right direction. It is not fast enough for me or many in the industry, but perhaps we need to learn patience. Good, evidence-based policy is not one of Jamie’s five-minute meals. It needs good-quality evidence, and if we do not form policy based on evidence, rather than on prejudice, it is plain stupid. I am not here to boost Blackpool airport, although it is a wonderful airport to fly into and see the wonders of the Fylde coast. I do not even want to waffle on about air passenger duty. I do not want to tempt the Minister down a route that she probably does not want to go down, given that she is not a Treasury Minister. I do not even want to bang on about a third runway at Heathrow, because I think that is a stable door that was shut long ago, unfortunately.
We must discuss a more fundamental question: what does UK plc need from our aviation industry? What do we actually need? Hidden, buried away like a nugget of gold within the scoping document, are two fundamental questions that the Government must consider. What are the benefits of maintaining a hub airport in the UK? And how important are transit and transfer passengers to the UK economy? Those things may seem self-evident. How could anyone dispute them? Yet a fortnight ago I met a commercial director for a regional airport, who said, “There is no such thing as a hub airport. There is no Government definition of one, so they don’t exist. So we don’t need a hub airport any more.” That struck me as the most illogical and ludicrous thing one could possibly argue, but none the less he tried. I would prefer to focus on not Boris island but Boryspil airport, which, for those who do not know, is the main airport for the city of Kiev, the capital of Ukraine. That is a classic example of an emerging market destination, which is economically crucial, and to which services from the UK are not sufficiently good. Yet all the aviation policy that we seem to be able to focus on is some future airport in the Thames estuary. We need to focus on the needs of the UK economy—of UK plc—here and now.
I welcome the work that I know the Minister is doing to make Heathrow and the other south-east airports function better, so that we get bang for our buck and extract the maximum from the capacity that we already have. I want London to be surrounded by a string of pearls in the form of excellent, functioning airports. One of them, however, cannot be a pearl but must be a diamond—the hub airport. To understand why, we must understand the definition of a hub airport, and why it matters to the economy. Transfer passengers do not exist merely for the benefit of Starbucks. The Frontier Economics foundation recently issued a report showing that there are at least 13 flights to emerging market destinations in which more than half the passengers are transfer passengers, who did not start their journeys at Heathrow. The more that we squeeze the short-haul flights that the hon. Member for Blackley and Broughton (Graham Stringer) referred to, the harder it will be to sustain flights to emerging market economies, because we will not have the transfer passengers, which is a grave concern.
I confess that a few months ago I wondered whether the UK really needed a hub airport. The Japanese Transport Minister once famously said that Incheon in South Korea was now Japan’s hub. I know that for many of my constituents Schiphol or Charles de Gaulle is essentially their hub airport. I began to think, “Can the UK survive without a hub airport? Can’t we just fly to Paris or Amsterdam?” However, the Frontier Economics report makes the fundamental case why we cannot do that. It is explicit about the amount of trade that we are losing as a consequence of having poorer connectivity with the emerging market economies. It is a question of not only the number of people flying through Heathrow, but where they are going. The hon. Member for Blackley and Broughton rightly made the point that Heathrow’s number of destinations is gradually dropping. In the past five years, it has decreased from, I think, 227 to 180. Over the same five years, the number of destinations reached from the main competitor hubs in Europe has increased.
There is clearly a case to be made that Heathrow is entering a period of consolidation. It may be getting more passengers, but they are going to fewer places, and, in the cycle, that is usually the beginning of the end of an airport’s hub status. That is what happened to New York about 20 years ago, when the destinations started to drop off and it lost its hub status. While I fully expect that in the coming 20 years Heathrow will remain England’s major international gateway, I have concerns whether it will retain its hub status. Hon. Members may ask whether that matters. New York no longer has a hub airport, but it remains a world city. I question whether we—UK plc—can afford to sacrifice the economic benefits that come from a vibrant, well-connected hub airport, which I think is fundamental.
Mary Macleod
Does my hon. Friend realise that London has 92 flights a week to China, whereas Paris has 73 and Frankfurt 69? We have good connectivity with China, one of the most important growing economies. Surely the issue is about working with businesses in China and elsewhere to find out their requirements. Has he had any correspondence with businesses there to find out whether they require additional flights to Heathrow and London?
Paul Maynard
I thank my hon. Friend for that useful intervention. Of course the main reason, historically, for our having far more flights to China is our historic tie to Hong Kong. The destinations that we serve are Beijing and Shanghai, and there are more than 3,000 seats a week going to Hong Kong. I think that Frankfurt serves five destinations and Paris four. We dominate on the Hong Kong routes, but we underperform in relation to all the other top 10 Chinese cities. Of course, economic growth in China is happening not in Hong Kong but in cities that most of us have probably never heard of—the likes of Chengdu and Dongguan, which no one is yet serving. Far more than focusing just on the number of people who are flying and the routes they are flying on, we must think about connectivity. Are we serving the places where the economic growth is?
I make a plea to the Government. I welcome what they are doing to make the airports around London and the south-east more suited to improvements in the passenger experience, but I ask that we should not overlook the benefits that can be provided by an active, well-maintained and well-funded hub airport, which works well and connects to the places that UK plc needs to be connected to for growth. That needs to be a fundamental part of our aviation strategy.
John McDonnell (Hayes and Harlington) (Lab)
I shall be as quick as I can, because others want to speak. This will be the first debate in perhaps two decades when our colleague Alan Keen has not been with us, and I pay tribute to everything that Alan did over the years. On a happier note, I, too, welcome Rosie. Given the interest in aviation shown by my hon. Friend the Member for Central Ayrshire (Mr Donohue) she clearly arrived by stork.
I obviously have an interest in Heathrow, which is in my constituency, because of my constituents who work there, fly out of there and live around it. With reference to those who live around Heathrow, I want to tell BAA and colleagues who are present that the third runway is dead: that is it; it is over; it is finished. All major political parties have made it clear now that it will not be built. As to my hon. Friend’s novel idea about Northolt, this is almost becoming personal now—they are coming at me from all ways. Northolt was ruled out a long time ago because of its impracticality. It would cause just as many problems as expanding Heathrow. I understand the Government’s interest in making Heathrow more efficient, but experimentation around the Cranford agreement, moves towards mixed mode and, certainly, any attempt to increase the number of night flights would be resisted, because of noise and pollution. Nevertheless it is worth examining how we can make Heathrow much more efficient.
Despite everything that has been said by all the major parties, the blight in my constituency continues because of BAA’s continuing angst and lobbying for the third runway. It needs to be made even more explicit now to BAA that that is not going to happen. I say that—people may have seen the television programme last night—because BAA has bought up nearly two thirds of Sipson and refuses to sell the properties to families. It has made them available to families on short-term licences of up to two years and no more, although it now tells us that those licences are possibly renewable. It is destabilising the village. In addition, the threat of the third runway that BAA keeps mooting is still blighting the villages of Harmondsworth, Longford, Harlington and Cranford Cross.
One solution—I say this to the Government on a cross-party basis—is to agree to put in place a similar covenant to the one at Gatwick that will ensure for generations that there is no further threat of a third runway in the area and that is legally enforceable and binding.
We have discussed the role that High Speed 2 could play in alleviating the pressure on Heathrow. I support High Speed 2, but we need a consultation on the routes into Heathrow as soon as possible. Not consulting on the overall route has caused further blight, particularly within the London borough of Hillingdon.
An issue has come up this week involving my constituents who work at Heathrow. The European Transport Workers Federation, the union representing aviation workers across Europe, held a demonstration on Monday about the deregulation of ground handling services such as baggage handling, ticketing and general passenger facilities. They are concerned that deregulation might not only put security operations at risk at airports across Europe, but affect staff health and safety.
On another staff issue, Heathrow is still a wonderful area of employment opportunity for all west London constituencies. It is still recruiting staff, yet the Government are consulting on closing the Heathrow jobcentre, a reduction of six staff members. Employers and unions alike have urged the Government to rethink, as it is one of the best recruitment facilities at the airport for ensuring that local people are attracted into employment and that the skills base in the area is developed.
Both staff at the airport and those flying out of Heathrow are affected by an issue that the British Airline Pilots Association raised with its members recently. The European Union is seeking to relax the flight time limitations on pilots. Britain has the gold standard, which ensures that we have the best safety standards in the world, but the European Union is seeking to undermine that gold standard and bring us into a system that reduces protections and weakens regulations. BALPA, the trade union for pilots, has made it explicitly clear that it is extremely anxious about the safety implications of the moves within Europe.
Those are the issues that I wished to raise in this debate. On the expansion of Heathrow, there comes a time when my hon. Friends must recognise that they are no longer in the majority but in a small minority. Continuing to harp on about the need for a third runway not only destabilises the population around Heathrow, but prevents our getting on with developing a proper aviation policy that is integrated with transport overall.
Mr Rob Wilson (Reading East) (Con)
I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing this debate and on the birth of his new family member, Rosie.
I want specifically to discuss my strong support for much-needed improved ground access to Heathrow. In my view, there is a specific and strong case for improving railway connectivity to London Heathrow via a western extension of services. The case is not based solely on improved accessibility for passengers, because it is also driven by a strong national economic imperative.
This is a debate about the future of the industry. Often, when talking about the future, we try to be optimistic. Optimism is definitely required when discussing aviation, due to the financial challenges facing the nation. Given the financial crisis and the need for economic growth to stimulate recovery, we must be mindful of the contribution made by the industry. Simply put, we all acknowledge that a strong aviation industry is good for the British economy.
In that light, I am keen to secure the multiple benefits of improved rail access to Heathrow airport for my constituency of Reading East. However, it is worth noting that the benefits of access reach far wider than individual constituencies. I have been working closely with key figures in government and the railway and aviation industries to make extended western access to Heathrow a reality. As we debate the future of this important industry, I am pleased to report that the project is making progress, which is important.
Estimates from the Treasury put the aviation industry’s contribution to the UK economy at £18 billion, which cannot be ignored in the current economic climate. The aviation sector employs 250,000 people directly and an estimated 200,000 more in the supply chain. Again, that contribution should not be taken lightly. Heathrow airport has 65.7 million terminal passengers each year, and Department for Transport forecasts estimate that that figure will have risen to 85 million by 2030.
Looking to the future, as air travel grows, so will the industry’s contribution to the wider economy. We cannot afford to ignore it or fail to make the right investment to exploit it. After all, there are plenty of other airports across Europe willing to challenge Heathrow’s position. We must defend Heathrow’s pre-eminence on the European and worldwide stage. There is, of course, a balance to be struck between aviation expansion and its negative impacts, such as the environmental considerations that hon. Members have discussed.
Mary Macleod
Does my hon. Friend agree that we must also take account of local residents? What we really want is to make Heathrow better, not bigger, and to ensure that the noise impact on local residents is minimised.
Mr Wilson
Of course. I think that the hon. Member for Hayes and Harlington (John McDonnell) would totally agree. The Government have said that expansion should not come at any price. As we know, they have cancelled the planned third runway at Heathrow. There is, by and large, cross-party consensus on the issue. However, that is not to say that we cannot make improvements to the system that we already have, as my hon. Friend has said, and Heathrow is a prime example. Improved western railway access to Heathrow would help to maximise the benefits that the airport provides.
For my constituency, that means strengthening Reading’s standing as the commercial centre of the Thames valley. Direct railway access to Heathrow would entrench and extend Reading’s position as a place to do business. Leading technology companies such as Microsoft and Oracle have established headquarters in Reading East, along with many other companies too numerous to name with a global outlook and an international reach.
The lack of direct rail access has rightly been described by the president of the Reading chamber of commerce as bringing “huge frustrations”. Big businesses based in Reading pay an estimated £10 million a year in taxi fares to send executives and business people to and from Heathrow, which is not particularly business-friendly. Money is not the only cost to businesses resulting from inadequate connectivity to the airport. The absence of a link also costs them precious time that could be spent with clients and customers. Lengthy journeys on the M4 to Heathrow, with their inherent risk of traffic jams and other delays, are not acceptable for international businesses.
The easier transport to an airport is, the more people and businesses will use it, in which case the economic benefit will then flow into the wider economy. I have been working with key figures at BAA, Network Rail and First Great Western and officials from the Department for Transport. All have come together to breathe new life into the project. As a result, £119,000 in funds was recently allocated to Network Rail, and design consultants have been appointed. A feasibility study is under way and is due to be completed in December. I look forward to the report’s publication.
As I have outlined, the exciting benefits for Reading East are clear, but the project also has the potential to open up direct rail access to parts of the country that are poorly served. For the first time, Heathrow would become directly accessible to Wales, Herefordshire, Devon, Dorset, Cornwall and many other areas by means other than car or coach. I have no doubt that hon. Members representing constituencies in those areas would also benefit, and that they look forward to the report’s publication. Additionally, I hope that they will attend a parliamentary reception that I am hosting on Thursday 24 November to give the project further traction. I am delighted that my right hon. Friend the Transport Secretary will speak at the event.
I am passionate and serious when I say that this project is part of the future of the aviation industry. The implications of this important expansion in accessibility are vast, as millions of people would find themselves with a new route to Europe’s busiest airport. As the world shrinks and our outlook becomes ever more global, why should some parts of Britain be disjointed in their access to our premier airport?
I am optimistic about the future, despite the gloomy economic outlook. Aviation will play an important role in delivering growth for the UK economy. We cannot afford to endanger that future prosperity by not constantly seeking improvements to the industry—in this case, through better connectivity to Heathrow airport.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
I will be brief, Mr Gale, because I am conscious of the time. Siren voices in Scotland are already arguing that air passenger duty should be devolved to the Scottish Parliament. I do not share that view, because it would create more problems than it would solve, so I hope that the Minister and her colleagues will resist any temptation to do that.
On Scottish airports, increased competition for slots at Heathrow is already causing a problem, as my hon. Friend the Member for Central Ayrshire (Mr Donohoe) suggested by highlighting BMI’s withdrawal of its flights from Glasgow to Heathrow. The net result is that we have only one airline that flies from Glasgow to London Heathrow, namely British Airways, which has a monopoly where the prices are already soaring. That has given us many problems.
Finally—I am grateful for this opportunity to speak, Mr Gale—Scotland is located on the periphery of Europe and, as such, travelling by air is not a luxury, but an essential element of business and family life. I sincerely hope that the Minister takes that into account.
Maria Eagle (Garston and Halewood) (Lab)
I congratulate my hon. Friend the Member for Central Ayrshire (Mr Donohoe), first, on securing this debate on the future of aviation, which has clearly been in demand from other Members—we have had an excellent debate—and, secondly, on the birth of his granddaughter, Rosie, who will think that she is the centre of the universe by the time she is old enough to read Hansard. I also welcome you, Mr Gale; it is a pleasure to serve under your chairmanship.
Our aviation industry is central to our economic prosperity and should be a key driver of the growth without which we have no prospect of emerging from the dangerous economic situation in which we find ourselves. The industry contributes more than £11 billion to the UK’s gross domestic product—more than 1% of the total—and supports up to 200,000 jobs directly and 600,000 indirectly across the UK.
I regret, however, that just as the Government do not have a credible strategy for growth, neither have they yet managed to set out a credible strategy for aviation, let alone set out the role that aviation could play in improving our economic situation. For a crucial sector on which our economy depends, the reaction from business to the Government’s decision not to set out an aviation strategy until the latter part of this Parliament has ranged from incredulity to plain bemusement.
I would much rather that we were not in opposition—it is a deeply frustrating place to be, as the Minister may recall—but the one thing that it provides is the time and space to develop ideas for the future, as well as some detailed plans. However, after 13 years in opposition, it is clear to the industry and to the wider business world that this Government came to office without such plans.
We have had lots of consultations, relentless industry engagement, scoping documents and taskforces. That is all very laudable, yet none of it makes up for the lack of a policy, let alone a strategy. With the economy on the brink, holding out the prospect of a policy late in the latter part of a five-year Parliament is, frankly, not good enough. It represents a total failure to prepare for government, and Members do not have to take my word for that. The chairman of the Airport Operators Association, Ed Anderson, has said that, while the industry knows what the Government are against,
“we are not sure yet what it is in favour of”,
and he went on to describe “better not bigger” as an “election slogan”, saying:
“Better not bigger doesn’t constitute a strategy.”
The Government also face international criticism. The chief executive of the International Air Transport Association, Giovanni Bisignani, has been quoted as saying that the Government seem
“intent on destroying its competitiveness with a policy agenda focused on increasing costs and limiting capacity growth.”
Sir David Rowlands, a former permanent secretary at the Department for Transport, has described the Government’s policy as “mildly extraordinary”, which is damning criticism from somebody from the higher reaches of the mandarinate.
Baroness Valentine, speaking for London First, said in another place earlier this year that
“government seems content for aviation policy to drift.”—[Official Report, House of Lords, 24 March 2011; Vol. 726, c. 872.]
She has also said, most damningly, that
“the Government’s aviation strategy is damaging our economy and enhancing that of our EU rivals.”
We have heard that criticism echoed by some Members who have contributed to today’s debate.
Maria Eagle
In a moment.
I am sure that the Minister saw the letter in The Times earlier this year signed by 74 senior business leaders. Setting a long-term strategic direction for aviation in London, the wider south-east and across the country is a vital part of delivering the growth and jobs that the country needs, and the letter concluded:
“All options must be considered, short term and long term, to address growing demand.”
We agree with them, which is why earlier this month, in a speech to the Airport Operators Association, I made an offer to the Government, which I am happy to repeat today. We are willing to take the politics out of aviation, put aside party differences and work together on a joint aviation policy for the good of the nation. As I have said, this is a clear, unambiguous offer, with no catch.
Aviation matters to our country—every Member who has spoken in this debate has said so—and to businesses and families throughout the country. It is an industry that needs stability for the long term, and a long-term plan that straddles Parliaments and Governments and that is capable of surviving after fruition.
In addition to the Government’s more immediate work that they must conclude—that is fine—I believe that the best way forward is the establishment of a cross-party commission to set out our long-term aviation strategy for a generation or more. We should not have rows from one Parliament to the next about an element of the strategy, but set out a long-term plan. We must not repeat the party political wrangling that turned the proposed third runway at Heathrow into a political football. We must also agree that we will then stick to that agreed strategy, whatever the outcome of the next election.
Any terms of reference for such a cross-party examination of capacity will inevitably start with an understanding that the answer for the south-east will not be to fall back on the proposed third runway at Heathrow. We have accepted that the local environmental impact means that that is off the agenda. The cross-party body must have the freedom to look at all options for growth, including in the south-east, while prioritising making the best use of existing runways and airports. A bigger prize is available for us all if we put political battles to one side and develop a long-term strategy for aviation to which everybody can sign up. It is time to move on and find an alternative way forward.
I should like the Minister to clarify the Government’s position on two further issues: first, the link between high-speed rail and aviation; and secondly, emissions from aviation. We have offered Ministers our clear, cross-party support for the high-speed rail line that we proposed when in government. I have been clear that we will work with the rest of the House to deliver the legislation needed to take forward that vital project. We fully accept that there is simply no other credible way to tackle the growing capacity issues on our existing main rail lines. We have, however, argued that there is a clear case for connecting the new high-speed rail line directly to Heathrow from the start. The Opposition and the Government agree that the line should connect to Heathrow; the only debate is over whether that happens from the start, or via a costly, multi-billion pound spur, tacked on at a later date.
As we have argued, taking the line via our major hub airport opens up the prospect of private sector funding, potentially saving the taxpayer billions. It would lead to a new route that made better use of existing transport corridors and better protected the area of outstanding natural beauty that the current proposal crosses. It would also open up the opportunity to connect to the Great Western main line, thus bringing the benefits of the high-speed line to the south-west and Wales and increasing connectivity for the south-west to Heathrow.
Creating a major new transport hub to the west of London at Heathrow—rather than several miles away at a site with other, inadequate transport connections—that mirrors the hub in the east at Stratford represents the joined-up thinking that is too often lacking in our transport infrastructure planning. I hope that the Minister will confirm that the Government are looking at that alternative proposal.
Our proposal is one that the Minister herself supported when she was the shadow Secretary of State for Transport, and I suspect that she still sees its merit. I hope that she will indicate a willingness to look again at it. She has our support as she seeks to do better at persuading her new Secretary of State of the merits of the case than was possible with the previous Secretary of State.
On carbon emissions, I hope the Minister agrees that we will simply not achieve the goal set out in the Climate Change Act 2008 to reduce emissions by at least 80% by 2050, compared with 1990 levels, unless aviation does more. That is why we believe that future aviation growth must go hand in hand with a greater cut in aviation emissions than we agreed when we were in government.
The Government have failed even to re-affirm their commitment to the existing emissions target for aviation that we set in government. I hope that the Minister will take the opportunity to do that today and that she will support our call for the Energy and Climate Change Committee to set out what it would mean for aviation to go further and ask it to update accordingly the carbon budgets that have been set.
I hope that the Minister will agree with us that, in principle, international aviation should be included as well, once the Committee produces its advice on accounting methodology. As the Minister will know, the industry’s sustainable aviation road map makes it clear that, by 2050, it is possible to get absolute emissions down to levels seen at the turn of the century, even as passenger numbers are projected to grow by a factor of three, so we all agree that it is possible to do more. Therefore, this should be seen not as a threat but as an opportunity. Fuel efficiency improvements in aircraft engines and air frames, improvements in air operations, both in more fuel-efficient practices and air traffic management, and the use of alternative fuels produced sustainably—all those things can make a contribution. The UK should be at the forefront of developing the new technologies that enable the aviation industry to thrive, while reducing emissions.
I again thank my hon. Friend for securing the debate. I hope that the Minister will feel able to respond positively and make up for the Government’s failure to date to provide an aviation strategy, which this country so badly needs.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing the debate, and on Rosie’s arrival. I would also like to associate myself with the comments made about the late Alan Keen and his sad, recent death. He had a long and distinguished record on aviation matters.
I agree wholeheartedly with the importance that hon. Members have attributed to the aviation industry as a strong part of our economy and a vital gateway to the global marketplace for business. Many hon. Members made that point, including the hon. Members for Blackley and Broughton (Graham Stringer) and for Central Ayrshire. I also welcome the emphatic support for the aerospace industry provided by my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti). Supporting and providing the right economic climate for manufacturing to flourish is a hugely important part of the Government’s overall economic strategy. It is crucial that aviation in the UK is able to grow and prosper in the future, but I think we are agreed that a dash for major aviation growth regardless of cost is not the right approach. That is why we are developing a new aviation strategy to set out the way forward that will allow the British air transport industry to grow in the years and decades ahead, as well as addressing its environmental and quality of life impacts. No one underestimates the scale of the challenge, because reducing harmful emissions through greener technologies is more complex in aviation than in other transport sectors and will take longer to deliver.
In response to the points made on air passenger duty, we have listened with care to industry concerns, which is why we have made it clear that switching to a flight tax is not viable without wider international support for such a move. We have postponed this year’s inflation-based increase in APD, and proposals for further reform of the tax will be published soon.
In response to the hon. Members for Central Ayrshire and for Blackley and Broughton on the issue of the Thames estuary airport, as the Prime Minister has said, the Government have no plans to build a new airport in the estuary, or in Medway or elsewhere in Kent. The hon. Member for Central Ayrshire outlined some of the practical issues that would have to be surmounted before such a programme could go ahead, including, of course, the very significant airspace capacity issues. Nor do we have plans to redevelop Northolt as a third runway for Heathrow.
I agree with my hon. Friend the Member for Reading East (Mr Wilson) that surface access to airports is a crucial part of making them successful. That is why Crossrail and Thameslink are going ahead—both will improve access. We continue to consider other options for western access to Heathrow, including work that could be co-ordinated with the proposed HS2 spur to Heathrow.
We have made it clear that a key plank of the Government’s approach to aviation is the cancellation of Labour’s misguided plans for a third runway at Heathrow. I find it ironic that the shadow Secretary of State, the hon. Member for Garston and Halewood (Maria Eagle), accuses us of having no policy, when the previous Government spent 13 years on an aviation White Paper that everyone agrees is no longer fit for purpose, and on pursuing a runway that is universally agreed to be absolutely the wrong approach for the UK economy. One of the coalition Government’s first acts was to cancel the third runway at Heathrow. I continue to believe that the price in terms of the environmental impact would have been far too high, given that noise already has a significant impact for thousands of people living with a plane overhead every 90 seconds. At the time, Labour described our position as
“politically opportunistic and economically illiterate”.
It seems that those on the shadow Front Bench have learned the error of their ways—but not all on their Back Benches.
We are clear that we need to protect and enhance the connectivity that is vital for our economy, which is why Heathrow’s success as one of the world’s busiest and most successful international airports is so vital. Our aviation strategy is designed to ensure that the UK maintains and improves the success of this leading international gateway. There is no evidence that Heathrow is about to lose its hub status. It remains an immensely successful airport, with more services to China than any of its European rivals, and a particularly strong connection with Hong Kong as China’s main hub airport. Our immediate priority is to make our airports work better within their existing capacity limits.
Henry Smith
I was delighted to welcome the Minister to Gatwick airport last month for the opening of new security gates. Will she congratulate Gatwick airport on the more than £1 billion of investment that it is making in enhancing capacity? Indeed, Sir John Major will open the renewed north terminal on Thursday.
Mrs Villiers
I am happy to offer my congratulations on that. Contrary to the allegation that the Government have created a policy vacuum, we have a range of initiatives designed to make our airports better—our priority is to make them better, rather than bigger. We are legislating for a much more passenger-focused system of regulation. We are improving air space management through the Future Airspace Strategy in the Single European Sky programme, which is already delivering real benefits in the UK and Ireland. We are changing the way aviation security is regulated to enable the industry to deliver the same high standards in security, but in a more passenger-focused and more hassle-free way.
Our south-east airport taskforce also included proposals to improve resilience and address delays. As a result, we are trialling the tactical use of greater operational freedoms at Heathrow. This is very sensitive, because those freedoms mean that occasionally there will be some incursions into the respite period, with occasional use of both runways for departures, or, occasionally, use of both runways for arrivals. However, I emphasise that that is not mixed mode and the Government remain committed to runway alternation and the benefits it brings. Very careful consideration will be given to the impact of the trial on local communities. I emphasise that the measures being trialled are to be used only to improve resilience, and prevent or recover from disruption, and not to increase capacity, which remains capped at current levels.
We have published our scoping document, setting out the issues to consider for the future of aviation. We know how crucial it is to have a successful regional airport sector, as hon. Members have highlighted today. We will look at ways to harness spare capacity to support economic growth and help to relieve crowding in the south-east. High-speed rail has strong potential to provide an alternative to thousands of domestic and short-haul flights. HS2 to Manchester and Leeds will deliver a three and a half hour journey time between London and Scottish destinations, providing a viable alternative to thousands of Scottish flights.
Mrs Villiers
I am sorry, but I really do not have the time. We accept that the international nature of aviation, as has been said, means solutions are often best delivered at a multilateral level. That is why we are working with the International Civil Aviation Organisation towards agreement on emissions and on noise issues. That is why we have worked very hard on the inclusion of aviation in the emissions trading scheme. We will publish our draft strategy in spring next year for public consultation, with a final strategy due in 2013. We want to see Britain, and British companies, spearheading the global debate on greener air travel and shaping a low-emission aviation sector of the future. We need to work with the industry to find new ways of decarbonising air travel, boosting investment in low-carbon technologies and fuels, and enabling the aviation sector to generate the headroom it needs to grow in a sustainable and successful way. Our world-beating aerospace sector will play a vital role in that. The challenge creates great opportunities for that world-beating sector.
We want to open a new chapter on the aviation debate. We are interested in working on a cross-party basis, as has been discussed today. Our goal is to move away from the polarised opinions that have dominated the discussion in the past. We want to develop a broader consensus for the change we need to deliver a flourishing air transport sector that can support economic growth, while addressing its local environmental impacts and playing its full part in combating climate change.
Mr Roger Gale (in the Chair)
Order. I owe an apology to the Minister and to the Opposition Front-Bench spokesperson. It does not happen all that often, but I am afraid that, so captivated was I by the quality of the Back-Bench debate, I misread the clock. I apologise to both Front Benchers.
I am also sorry that I was unable to call the hon. Member for Crawley (Henry Smith), but his constituents will have noticed from his intervention that he was assiduously present throughout the debate.
Finally, while I am on my feet, I express my pleasure at the birth of the granddaughter of the hon. Member for Central Ayrshire (Mr Donohoe).
Bank Account Fraud
(12 years, 5 months ago)
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Stephen Timms (East Ham) (Lab)
I am grateful to Mr Speaker for selecting this debate, and I am delighted to see the Exchequer Secretary to the Treasury in his place, upholding as always the high standards set by previous occupants of his office.
The debate arises from troubling recent constituency cases, in which constituents who have been the victims of fraud have found themselves seriously disadvantaged by actions taken by the banking industry in response. They have suffered what seems to be arbitrary and draconian punishment without even an explanation, still less any opportunity to challenge what had been done to them. No one can object to the banking industry taking every step it can to protect itself and its customers from fraud. It is absolutely right that it should do so, but those measures need to be taken in a way that treats customers fairly, and such a requirement has not been met in the cases to which I shall refer. I hope the Minister will agree that we need a better way of protecting against fraud, which does not cause its victims such hardship.
I will put to the Minister a series of points, to which he is likely to be sympathetic and to which I will be grateful for his response. First, if customers are to be denied the opportunity to have a bank account, they should be told and not, as in my constituency cases, be left to find out for themselves, submit numerous applications to different banks and be rebuffed each time for reasons that have not been made known to them. They should be told for how long they are likely to be unable to open an account. They should be given accurate information about what alternative courses of action might be available to them. If the only account they will be able to open is with a credit union, they should be told so. My constituents have been provided with no such information and been left completely in the dark.
Secondly, there should surely be at least some allegation of wrongdoing before someone is deprived of a bank account. In the case of my constituents, as I am about to explain, no such allegation was made, but the inter-bank machinery of the financial services industry organisation, the Credit industry fraud avoidance system, was triggered anyway. Thirdly, someone who is to be denied the opportunity to have a bank account should be provided with a reason. Such people should have someone in their own bank, in CIFAS or somewhere with whom they can discuss the matter—someone who understands what is going on. Fourthly, they should be given the opportunity to challenge the refusal of an account. Being unable to hold a bank account is too serious a handicap for there to be no practical way at all to challenge what is being done.
I will set out the experiences of my constituents, which have given rise to my concerns. I first became concerned when my constituent Miss Josephine Dolor came to see me in July. She had a Halifax bank account, with a bank card, which she had last used in early November last year; she was 17 at the time. When she next tried to find the card, she could not do so. At that point, as she accepts, she made a mistake. Thinking that the card would turn up, she did not report its loss and took no action for some weeks. She recognised that the card had really been lost only when she could not find it after Christmas. She then reported its loss at the East Ham branch of Halifax on 29 December last year, some six weeks after it first went missing.
By that time, all Miss Dolor’s education maintenance allowance payments, amounting to about £100, had been withdrawn from the account. In addition, in late November, £1,000 was transferred into her account from somewhere else, and another £600 was transferred in on 9 December. By 18 December, those funds had all been withdrawn. The transfers in have since been confirmed as fraudulent and remain the subject of a fraud investigation by the bank. On 7 February, Miss Dolor was interviewed by a Halifax officer, and she explained what had happened and that she had no knowledge of how anyone else could possibly have known the personal identification number for her card—although they clearly did—and the officer said that she believed Miss Dolor’s explanation.
At that point, it would be difficult to criticise Halifax. Miss Dolor had had the opportunity to explain what had happened, and her version of events had been accepted. However, at that point things started to go badly wrong. In response to an inquiry about the closure of the account from Miss Dolor’s mother, she received a letter from Halifax customer relations dated 29 March. The letter was rather unclear. It included an apology to Miss Dolor, a reimbursement of the £100 that had been taken out of her account and a £50 payment
“for any distress our process has caused”.
It appeared that, as the Halifax officer had stated, the bank accepted that Miss Dolor was innocent of any wrongdoing. But the letter also said:
“No explanation has been provided as to how a third party may have access to your PIN. Regrettably we are not going to offer you any more accounts as a result of the fraud. This is a business decision.”
That blunt termination of the account was only the start of Miss Dolor’s problems. She subsequently found out the hard way that it was impossible for her to open an account with any other bank, because Halifax has registered her with CIFAS. Lloyds Banking Group, the parent of Halifax, tells me that that is a requirement of its membership of CIFAS. CIFAS, though, says that it is not a requirement and that it is up to the bank how the case is registered. Lloyds certainly did not warn Miss Dolor of the consequences of the “misuse of facility” registration that it had made of her. In my view, Lloyds should certainly have explained that to her. I understand why Lloyds registered my constituent: because the withdrawal from the account was carried out using her card—that is not in dispute—and her PIN. Miss Dolor told me that she has no idea how anyone could have known her PIN. It is not written down anywhere, she has not told anyone what it is, not even her mother, and she is not aware of anyone ever watching her use it, although of course fraudsters have some clever techniques for obtaining such information. There is certainly no dispute that someone had the PIN. On one occasion, a fraudulent withdrawal was apparently made in a branch using a signature that did not to me look very much like Miss Dolor’s.
CIFAS told me yesterday, however:
“If Halifax had considered that Miss Dolor was a victim of fraud they would have filed her case as such. If she had been filed as a victim, Miss Dolor’s ability to hold bank accounts, or indeed open new ones, would have remained unhindered...Halifax chose to register this case as a ‘misuse of facility’ which identified Ms Dolor as being a fraudster”.
At the same time as apologising to Ms Dolor and issuing her with compensation, Halifax was registering her with CIFAS as a fraudster, and that registration was subsequently supported by the Financial Ombudsman Service. As a member of CIFAS, Halifax is required to register the details of all proven fraud cases, but I understand that that is not a legal obligation, simply a condition of CIFAS membership. Being the subject of a misuse-of-facility registration with CIFAS has had disastrous consequences for Miss Dolor. Her account with Halifax was summarily closed, and she has since been unable to open an account with any other bank or the Post Office.
One of the most disturbing aspects of the matter for me is that no one explained to Miss Dolor that that was going to happen. Halifax gave the impression that it accepted that she was the victim, and it gave her compensation. It did not inform her that she would no longer be able to have a bank account. She had to find out the hard way. The other banks told her not that that was because of her registration with CIFAS, but simply that she did not meet their criteria for opening an account. There was a real danger in the summer that, because Miss Dolor had no account into which to pay her student loan cheque, she was going to have to give up her university place. In the end, she was able to open an account with a local credit union. She cannot access that account from her university home, so it is awkward for her, but it meant that it was at least possible for her to commence her course in September.
One letter from Halifax suggested that she should open a basic account somewhere. She has tried but has been rejected twice, because that is not possible given her registration. Surely her bank should understand the consequences of its action against her, and inform her of those consequences. That did not happen, and when I pressed Lloyds, its response was:
“Our letter of 29 March 2011 went into detail about CIFAS.”
That was simply untrue. The letter of 29 March should have explained that the misuse-of-facility registration with CIFAS would make it impossible for Ms Dolor to obtain a bank account anywhere. What it actually said was that
“extra checks will be made for you when you are applying for financial products...your credit file has not been updated to hold negative information”.
It reads as though Lloyds was doing her a favour. In fact, Lloyds almost prevented her from starting her university course. Surely customers are entitled to expect their bank to be straight with them.
When a person applies to open a bank account, each bank runs that person’s details through the CIFAS database. If they are found to have a misuse-of-facility registration on CIFAS, it seems that they are told that
“further checks have shown you do not meet the bank’s criteria for an account”,
and that is the end of the story. There is no appeal and no further recourse. Miss Dolor inquired at just about every High street bank, and at the Post Office. She has never had the opportunity to discuss the position with anyone. She has simply received the same automated response every time. My constituent, who is an enthusiastic, intelligent, young woman who aspires to a career in law, has been placed in limbo. As far as one can tell, she has not even been accused of any wrongdoing, let alone found guilty of anything. She is the victim of a fraud, yet she is still, one year after her card was stolen, unable to open a bank account anywhere.
Another constituent, Mr Ravi Borra, contacted me last month on finding himself in a similar situation. He is an MBA student at Coventry university’s London campus. To support himself he has worked full time as a waiter at St Pancras station during his vacation. For that he received just over £1,000 for a month’s work, and he was paid by cheque. After paying that cheque into his bank account in good faith, he was contacted by his bank—again, it is Lloyds—which informed him that the cheque had been flagged as being fraudulent, his account had been suspended, and he had been registered on CIFAS. Like Miss Dolor, he cannot open an account elsewhere, and when he attempted to do so, he was told repeatedly that his application did not pass the qualifying tests. He filed a complaint with Lloyds in September, and was contacted by the fraud department a few days later and was told that, although it could not reopen his old account, it could set up a new account for him. Mr Borra was happy with that compromise. He received his PIN number and debit card for his new account, but the very next day he received a letter from Lloyds saying that
“recent risk assessment on your accounts has highlighted concerns and as a result we have taken the decision to close all the accounts you currently hold with us in two months time...in the meantime, I have placed a block on all your accounts which stop all transactions”.
Mr Borra finds himself in a complete nightmare. He did a month’s work for which he has received no payment. He cannot open a bank account. No one will tell him what is going on. He cannot even apply to extend his student visa and it seems that he may be unable to finish his studies.
Late yesterday, CIFAS told me that Mr Borra’s registration with it was cancelled by Lloyds last month, but no one has told Mr Borra that, and the new block on his new account was imposed after the deletion. He has told me today that he still cannot open an account anywhere, for reasons that are at the moment unknown. Lloyds says that it is simply complying with its obligation as a CIFAS member, but CIFAS says that when someone is registered with it, it cannot delete that data. The prerogative for doing so lies with its members—the banks—and the registration remains on the database for a minimum of one year. One year without a bank account seriously disrupts a person’s life. There seems to be nothing my constituents, who have not been accused of anything, can do to open a bank account and resume their lives.
The Minister will recognise that being without a bank account is a serious disadvantage and may mean not being able to start a university course or take up a job. People should not lightly or accidentally be deprived of the chance to have an account, but that is what seems to have happened in these cases. As far as I can tell, no one decided that my constituents should be denied the chance of having a bank account. Rather, actions by their bank triggered a response from the machinery that has been put in place, with the effect that they cannot have a bank account for at least a year. Surely that is too serious a sanction to allow it to happen by accident. Being denied a bank account is appalling for anyone, and contrary to Government policy. As we move towards the introduction of universal credit, this Government, like the previous one, are encouraging people to have bank accounts, but in arbitrarily closing accounts the banks are undermining Government policy as well as causing hardship to their customers.
I hope the Minister agrees that people such as those I referred to should not be treated in that way. Perhaps he can offer some hope that those who find themselves in that nightmarish situation may be offered a means of finding a way out.
The Exchequer Secretary to the Treasury (Mr David Gauke)
It is a pleasure to serve under your chairmanship, Mr Gale. I congratulate the right hon. Member for East Ham (Stephen Timms) on securing the debate.
I sympathise with the right hon. Gentleman’s constituents, whose experiences he described so vividly. He knows that it is difficult for the Government to comment on specific cases, but it is clearly unacceptable that individuals who have been victims of fraud—that seems to be the case that he set out—should be systematically denied access to a bank account. As far as I am aware, there is no legal or regulatory reason for this to happen.
As the right hon. Gentleman said, the consequences in this day and age of someone being denied a bank account are considerable, and I entirely agree with him that that should not lightly or accidentally be denied. It is worth making the wider point that the Government want to ensure that we improve levels of financial inclusion, as indeed did the Government in which he served with such distinction. We believe that banks should serve the economy, and we are committed to improving access to banking and the transparency of financial products for consumers.
Having access to appropriate banking services is an important element of modern life, and it can help to alleviate some of the problems faced by low-income families. A bank account enables individuals to make and receive payments through a variety of channels, have a more secure place to keep money and reduce the cost of household bills. The number of individuals without bank accounts has fallen in recent years, but the Government remain keen to see the situation improve further, and in particular to identify groups who may have specific difficulties in accessing a bank account.
While the situations described by the right hon. Gentleman are clearly invidious, it is not clear how many individuals are affected by this sort of difficulty. This is the first time that I have personally been made aware of this issue. As far as the Treasury is aware, it is not widespread. The right hon. Gentleman may have identified a growing problem that we need to look at. His industry and dedication as a constituency MP have highlighted not one but two cases that happen to have occurred among his constituents.
The issue falls within the remit of the Financial Secretary to the Treasury. He is not available to attend the debate, but he will be asking officials to investigate how this matter may have arisen and how many consumers may be affected. We will write to the right hon. Gentleman to explain the findings, and I am grateful to him for highlighting this particular issue. Clearly, we need to understand whether the problem is widespread.
The right hon. Gentleman set out four points, and I shall try to respond as best I can. I will take his first and third points together. He asked whether individuals should be informed if they are going to be denied a bank account and, if so, whether they should be provided with a reason. Those are eminently sensible and reasonable points. Consumers have the right to ask for a reason if they are denied a bank account, as set out in the Money Advice Service’s guide to bank accounts, which is available on its website. Consumers may also complain to the specific firm if they are unhappy with the outcome, and they can take their complaint to the Financial Ombudsman Service.
The decision to offer a bank account is ultimately a commercial decision. Current account providers are not obliged to provide a specific reason for not offering an account. However, it is worth highlighting the Financial Services Authority’s principle that financial institutions are required to treat their customers fairly, which is relevant in these circumstances.
The right hon. Gentleman questioned whether consumers should be denied a bank account where there has been no allegation of wrongdoing. Again, decisions as to whether to offer a bank account are a commercial matter for the financial institution concerned, and the Government do not intervene in such decisions. However, there is no legal or regulatory reason for victims of fraud to be denied a bank account. The circumstances that he set out appear to be of some concern.
The fourth question asked by the right hon. Gentleman was whether consumers should be given the opportunity to challenge the refusal of an account. If consumers are unhappy with the decision taken, they may complain to the specific firm concerned, and if they are unhappy with the outcome, they can take their complaint to the Financial Ombudsman Service. I reiterate the point that if a financial institution, or more specifically a bank, has been in breach of the FSA principle of treating customers fairly, the individual customer can raise that with the bank and with the Financial Ombudsman Service. If the explanation that is given to a customer is wrong—for example, if there is misleading information about how CIFAS works and its impacts—without wanting to be drawn too much into specific cases, it seems there is a case that the customer is not being treated fairly.
Stephen Timms
Part of the difficulty arose when the banks to which an application was made simply said to Miss Dolor, “You do not meet the criteria for an account.” I do not know whether that meets the terms of providing an explanation, but it clearly did not shed any light on the matter for her. If she had been told that she had been registered in such and such a way with CIFAS, she would have understood what was happening. The whole process was opaque. Does the Minister agree that some effort should be made to provide some illuminating information rather than a kind of stonewall response? It might meet the letter of the requirement, but in practice it does not help the customer at all.
Mr Gauke
I have considerable sympathy with the point that the right hon. Gentleman makes. Again, I do not want to be drawn into an individual case, but clearly it is not terribly helpful when the response may be technically accurate, but does not get to the heart of the matter. As he has set out, the individual customer, a member of the public, will be concerned if they find themselves in that most difficult of situations where they are being denied a bank account, but without any real understanding as to why. As in the cases that he has highlighted, an individual may go from bank to bank without being given any real indication as to why they are in that difficult position. In such circumstances, I sympathise with him and his constituents.
The Government want to ensure that everyone can access the financial services that they need to play a full part in society. I am grateful to the right hon. Gentleman for raising this issue in today’s debate. I assure him that we will consider the matter and investigate whether it is widespread. I want to assure him that it will be taken into account as part of the Government’s ongoing work to improve financial inclusion and access to bank accounts. He has rightly set out some of the difficulties that exist for individuals if they are not able to access a bank account. If the attempt to tackle fraud is working in such a way that the innocent are being punished, we need to address that by working with the FSA and the high street banks.
I reiterate my thanks to the right hon. Gentleman for raising the matter. My colleague, the Financial Secretary, will reply to him with further details after we have had an opportunity further to investigate the extent of the problem. If there is anything that we can do to address this matter, we are certainly keen to do so.
Planning Guidance (Northumberland)
(12 years, 5 months ago)
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Sir Alan Beith (Berwick-upon-Tweed) (LD)
Thank you, Mr Gale, for chairing this debate. I am glad that the Minister is taking part. He and I have worked together on other issues over quite a long period. I am glad to have the opportunity to discuss the potential impact of the draft planning guidelines in Northumberland. My hon. Friend the Member for Hexham (Guy Opperman) would like to have taken part, but he is still taking part in the constituency boundary inquiry in Newcastle, at which I spoke yesterday.
I want to address three main questions in this short debate. First, does the guidance enable planning authorities to combine the protection of the countryside with the encouragement of those forms of development that local people need if they are to have affordable homes and jobs? Secondly, how does the guidance affect the strategic housing land assessment that councils have been required to carry out? Thirdly, how will it be applied to wind farms and wind turbines?
Quite a lot of my constituents have involved themselves through e-mail in the debate about the planning proposals, and some have clearly been concerned by fears that they will unleash a torrent of development in the countryside or strip away the protections that the countryside enjoys. Ministers have made it clear that the guidance does not reduce or dismantle the protection given to national parks, areas of outstanding natural beauty or the green belt—my constituency contains the first two of those. Instead, it embodies a principle that has always been part of the planning system: a person has the freedom to make use of his or her land unless there is good reason for the community to deny that right, such as the protection of landscapes, the conservation of historic buildings and areas, or the promotion of sustainability. I sometimes wonder, however, whether man-made landmarks that we know and love—Stonehenge, Blackpool tower, Kielder water, Lindisfarne castle, for example—would have received planning permission from some authorities.
The Government are right to get rid of much of the top-down structure and guidance that has grown up over the years. Regional spatial strategies have ludicrously restricted the number of houses that can be built in Northumberland’s rural villages, and regional strategy has created a presumption in favour of wind farms in many of the most attractive parts of my constituency. The objective of having a much shorter guidance manual is correct, but the Government must develop clearer wording around the concept of a
“presumption in favour of sustainable development.”
If they do not, Ministers and planning authorities will waste a lot of time and money in the law courts over the next few years, and the planning process will be subject to even more delays. People may feel that the dice are being loaded against them—I will return to that point.
When an organisation with such a distinguished record as the National Trust rings the alarm bell, Governments need to take notice. The trust is a major land and property owner in my constituency; it owns most of the village of Cambo, and much of Low Newton-by-the-Sea, as well as historic buildings that are great tourist attractions. The trust’s initial comments and those of the Campaign to Protect Rural England might have given the impression that people who live in and care about the countryside are against all development, but that has never been so. Indeed, the National Trust sometimes applies for planning permission for developments that it considers necessary to make the country houses it owns sustainable. Country people know that the countryside cannot be run as a museum. If they are to provide local services, local people need homes at prices that they can afford. Shops, pubs, churches and local transport need a resident population to sustain them; they cannot survive on weekend-cottage owners alone. Jobs are needed to stop rural depopulation.
During my time as a Member of Parliament—which, admittedly, is getting quite long; 38 years last week—I have seen a huge reduction in the number of houses inhabited full time by people who work locally. House prices, inflated by scarcity and the demand for second homes, are far beyond the reach of local people in rural Northumberland. I therefore welcome the wording in the guidance that, in rural areas, local councils should plan to meet the need for affordable housing and that some market housing should be allowed if it will provide more affordable housing for local people. Although I welcome the debate about protecting the countryside, I do not want it to lead to the Government adopting wording that would make it even more difficult to secure the housing and small business development that are essential to a sustainable countryside. Equally, I would not want anything to add to the feeling shared by some of my constituents that, even under the current system, the balance of power is in favour of large developers.
James Wharton (Stockton South) (Con)
I congratulate the right hon. Gentleman on securing this important debate; it refers specifically to a part of the world that is not too far from my own. He pointed out that many communities feel that they do not have enough control over developments. Does he agree that that is the case all too often? Many communities in my constituency are opposed to local developments—whether housing developments, wind turbines or any other sort of development—and feel that they have no power or voice under the old system.
Sir Alan Beith
Indeed, and I welcome the various ways in which the Government are trying to empower local people—for example, through local neighbourhood planning. Alnwick in my constituency is one pilot area for such a development. I genuinely welcome the Government’s attempt to bring more of the planning decision process to local people. Of course, some things in the planning guidance might work the other way, and I will address some of those issues.
As I have said, some people in my constituency feel that the dice are loaded against them in favour of big developers. In my area, there is the added issue of large, landed estates that are in a relatively powerful position and can consider their actions for the long term. They have many levers in their power, which people feel can sometimes make it difficult effectively to oppose developments that they do not like, or even to secure the appropriate balance of social housing in a development.
The Minister will know that I have experienced difficulty in getting a satisfactory answer to constituents’ concerns about the strategic housing land availability assessment and how it will relate to the presumption in favour of sustainable development—what a jargon-filled world we live in, between the SHLAA and the presumption, but that is what we must examine. If the SHLAA is just a developer’s wish list and does not change the designation of land or the way that planning considerations are applied, it will not be a problem.
Experience of a recent case in Berwick, however, has created the fear that the SHLAA listing, which the planning authority agreed to without first consulting English Heritage, could override important archaeological and landscape considerations in future planning decisions. An extremely sensitive site close to the Royal Border bridge and castle was included in the draft SHLAA, although the heritage and landscape factors were not listed in the assessment. That has left local people feeling that, should the area ever be the subject of a planning application, the dice would already be loaded because relevant factors had been set aside by the site’s original inclusion in the land assessment.
There is also concern that, in many places, local development plans do not exist, have not been finally agreed to, or have not been updated. That could lead to a disregard of relevant planning considerations for sites included in the SHLAA list, or to the presumption in favour of sustainable development overruling conservation, landscape or other considerations. What assurance can the Minister give to localities that do not have an approved up-to-date local plan?
Finally, I will consider wind turbines and wind farms. Large parts of my constituency, which is characterised by beautiful countryside and stunning views, have been designated as suitable for onshore wind generation. Some parts, such as the national park, although not the adjoining areas, have been excluded. The result is an avalanche of applications for the rest of the area, some of which encircle communities such as Wingates, a hilltop village near Rothbury. In the borders region, 250 turbines have been erected and 600 are in the planning process. Northumberland has granted permission for three wind farms, and a further 10 have been approved by inspectors on appeal. The planning authority needs to be confident that it is free to make sensible, careful and robust decisions about which sites to approve and which to reject. Opinions are, of course, divided over individual wind farm sites and about the general policy of wind-farm development.
James Wharton
The right hon. Gentleman refers to the need for local councils to have a genuine framework of accountability through which they can influence applications for wind farms. In Northumberland, the Conservatives have called on the county council a number of times to look at the introduction of a policy that will make it clearer, for both applicants and residents who are concerned about potential developments on their doorsteps, what the framework in that area should be and what is, or is not, permissible. Does he believe that to be a possible way forward, and would he support such a position?
Sir Alan Beith
I will go on develop the case in my own way, and the hon. Gentleman will see how I think that we should handle it. His intervention is relevant to my point because, although there are many divided opinions, they do not divide along party political lines. He mentioned the Conservative party, and in Northumberland there are applications to place a turbine on a site belonging to the Conservative leader of Northumberland county council and for a wind farm to be put on land owned by the hon. Member for Stroud (Neil Carmichael). Enthusiasm for renewable energy and wind farms, and concern about them, stretches across the parties.
In such a highly-charged debate, we must know what the new planning guidance will mean. It could be argued that a wind farm or wind turbine is, by definition, a sustainable development because it produces sustainable energy without carbon or non-renewable resources. If that is combined with the existing designation of some larger areas as suitable for wind farms, does the presumption in favour automatically come into play? We need to clear that up, because if it were so, the planning process would break down. The planning authority would be left powerless to make sensible decisions about the suitability of a site, its cumulative impact in the light of other approvals, landscape issues, wildlife protection or proximity to residential developments. The planning authority would fear losing every appeal against refusal, at considerable cost. Therein lies one of the problems with the suggestion made by the hon. Member for Stockton South (James Wharton). If the planning authority devises a framework that is more restrictive than the regional framework to which it is already subject and then loses its cases on appeal, we are no further forward.
Let me consider, as I have referred to it, the proximity to residential properties. The planning guidance is a missed opportunity to write in a national presumption against close proximity to residential properties for large or multiple turbines. The Government have not looked favourably on the relevant private Member’s Bill promoted by the hon. Member for South Northamptonshire (Andrea Leadsom). They should reconsider the issue to give people some reassurance, not about small turbines designed to provide electricity for a house or farm, but about large installations built very close to residential property.
The Minister must make it clear that what I have described in respect of the presumption in favour of sustainable development will not have the effect that I have suggested—that that is not the Government’s intention. Even within areas designated as suitable for wind farms, there should be no non-rebuttable presumption. Planning authorities will be seen as a waste of space if they do not have the freedom to control the rush to find and develop wind-farm sites in which so many developers are competing. My constituents will rightly be angry if the planning authority is unable to take into account historic views of Holy island, Bamburgh and the Cheviots, or any of the other factors that I have mentioned, including wildlife protection and closeness to residential property.
There are a great many applications in my constituency, and that has introduced a new and rather worrying element, to which I want to direct the Minister’s attention. One developer, which has applications in relation to the Elsdon area and the area north of Belford—two separate applications relating to different parts of my constituency—somehow managed to give residents in Elsdon the impression that, although there would be some funds for community benefit if the scheme went ahead, there would be a lot more if they did not oppose it and there was no need for an appeal or an inquiry. It would not be acceptable for the planning process to be distorted by people being pressured to forego their right to express their point of view. Needless to say, it did not have that effect. When the people affected thought that that was what they were being told, they reacted in a pretty hostile way. It certainly did not bring them round in favour of the proposal. However, that would be a very unwelcome development in planning matters.
Some people do not like community benefit at all. I accept that if a scheme—whatever the development—goes ahead and has potentially detrimental effects on an area, or if it would be more acceptable if other things were done at the same time, developers should be encouraged to provide those benefits to the community. However, their scale should never be conditional on whether the planning process has been allowed to go ahead in the normal way or has been curtailed by people feeling that somehow they would lose out if they pursued their objection.
We want to protect the very special beauty of our countryside from the threat of inappropriate or badly sited developments, whether wind farms or other kinds of development. We need the power to make local decisions. We want to maintain a living countryside that welcomes the homes and jobs that are needed if the countryside is to be sustainable. The result of the debate about planning policy needs to be a system in which local people play a crucial part not only in helping to shape their area, but in keeping it as one of living communities whose beauty and grandeur are protected for future generations.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
It is a pleasure to speak under your chairmanship, Mr Gale. I congratulate my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) on securing the debate, which I know is important both to his constituents and more generally. I am delighted to be doing business with him again in a Committee Room of sorts. Our roles today are slightly different from our previous incarnations in the Select Committee on Justice.
I shall try to deal with the important points raised by my right hon. Friend. He has made powerful points in the context of his constituency and its surrounding county. In a wider context, there has been a positive and constructive debate on matters of planning policy in relation to the Localism Bill and in other debates in both Houses. I welcome the opportunity to debate those matters further.
I am pleased that my right hon. Friend recognises, fairly, that there is a pressing need for reform of national planning policy. The system has grown unworkably complex, with more than 1,000 pages of national planning policy and at least a further 6,000 pages of guidance. The complexity of that system slows down decision making and frustrates the sustainable growth that the country needs, such as new homes for young families struggling to put together a deposit and new jobs to breathe fresh life into local economies. He correctly recognises that that applies in rural areas as much as in towns and cities.
A streamlined framework focusing on key priorities will be more accessible and transparent. In the future, anyone who wants to understand the principles informing how decisions are made will be able to do so. That is important, as polling evidence suggests that many people feel cut off from the planning system because it is too complex. They do not feel able to find their way through it. They feel that they are unable to understand or to influence. If the system is not intelligible to the intelligent and well-informed citizen, it is not delivering on one of its key purposes.
It is important to get this right, because planning is a very important tool. It is how we create communities that work and, as my right hon. Friend said, places that we are proud of, and it is how we lay the foundations for business. Also, and very importantly, it exists not only to protect, but to enhance our green spaces, parks and countryside for our enjoyment today and for generations to come.
Let me make some remarks on the specific issues that my right hon. Friend helpfully raised. I am sure that you, Mr Gale, and other hon. Members will understand that I am constrained in what I can say today, given that we are engaged in considering the large number of responses—some 14,000, as I recall it—that we have received to the consultation. Of course, we need to give all the responses careful attention and avoid any impression of pre-empting the outcome of the consultation.
We have heard concerns expressed about the effect of the proposed presumption in favour of sustainable development on local areas, whether that is my right hon. Friend’s rural Northumberland or urban areas. Some of those concerns—I exempt my right hon. Friend’s observations from this entirely—have been very wide of the mark. Joseph Harper, QC, editor of the “Encyclopedia of Planning Law and Practice”, has said that much of the criticism is ill informed. However, that does not mean that there are not genuine concerns, which I hope that the Government will be able to allay.
We want to ensure that planning is a positive process that reflects the needs of each area and to emphasise the central and critical role of the local plan in decision making. We want local authorities to be responsible for deciding what housing and other development they need and where it should go without the sort of top-down, unpopular targets that were imposed on them under the previous Government’s regional strategies. We want that development to be plan-led. Indeed, the proposed new system does not undermine the concept of the plan and enhances its importance.
What the presumption says, in layman’s terms, is quite simple: locally prepared plans should set out what is needed in each area, development in line with those plans should be approved without delay, and in the absence of an up-to-date plan, the policies in the draft national planning policy framework, including its requirement for development to be sustainable, should guide decisions.
My right hon. Friend raised a concern about irrebuttable presumptions. I assure him that that is not the case. Like any legal presumption, the presumption is rebuttable by evidence, which is a basic legal tenet. In this context, the best evidence to rebut a presumption will be the existence of an up-to-date local plan that deals with the issues raised by the development in question.
Sir Alan Beith
I want the Minister to take into account the situation in Northumberland, where the county planning department took over from six district councils, some of which contained significant areas that were not the subject of a developed or agreed local plan. In these times of straitened resources, getting the structure of local plans fully completed and agreed in every place will take some time. We may need some kind of transition period before the principle can operate in quite the way that he has suggested. Will we not have a situation where some factors are not properly examined, because there is no local plan governing the situation?
Robert Neill
I take my right hon. Friend’s point. I am sure that he will have noticed that the Minister with responsibility for decentralisation, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), recognised that point in the debate that we had in the House recently. I cannot pre-empt our response to the consultation, but I reassure my right hon. Friend the Member for Berwick-upon-Tweed that his point is particularly well heard by the Government. The Minister with responsibility for decentralisation has indicated that we will look to provide suitable transitional arrangements for local authorities in such circumstances, including the local authority of my right hon. Friend the Member for Berwick-upon-Tweed.
Against the background of the importance of a local plan, the onus is put on democratically produced local plans to identify and provide for the needs of each area. Plans must be based on evidence and be deliverable, or they will not have the confidence of the community or of investors, who might need to be brought into the area.
On housing, plans must, as is the case now, reflect the local housing based on a strategic housing market assessment and the availability of suitable land, which is set out in strategic housing land availability assessments. SHLAA, as they are often referred to, do not allocate land for development, but inform decisions on land allocations to be taken through a local plan. They form part of the evidence base. Policy restrictions such as landscape designations and the potential impacts of development on the landscape are identified through the assessment. Sites are chosen for development in the local plan and are subject to full consultation with statutory consultees and the public through the local plan process. None of that is undermined in the new system.
Sir Alan Beith
That is a key point on which I want to press the Minister. If the assessment has been carried out in a way that fails to address some issues, such as landscape, is there any proper mechanism by which it can be reintroduced when a planning decision has to be taken?
Robert Neill
Ultimately, each planning application has to be addressed on its merits and the relevant material considerations and policy. The plan is one of the principal material considerations in a case, but the existence of, for example, designations that are consistent with national policy or other impacts can always be taken into account. There is a classic dictum by Lord Clyde in the House of Lords on such matters, which states that the weight to be placed on any material consideration is a matter for the decision maker. Again, that has not changed. Obviously, the weight that each material consideration carries will vary from case to case, but that is the whole point of the system. I assure my right hon. Friend that such issues are not shut out by the process.
The natural environment is an important part of the process. We pay great attention to the safeguarding of the natural and historic environment. Under local plans, communities can shape development in an area to reflect what is important locally, which includes special landscapes or the character of villages. Again, the best protection, making allowances for the transitional arrangements that I have referred to, is to get a plan in place, which can reflect precisely the points raised by my right hon. Friend.
Although we recognise that we need jobs and homes for young people and opportunities for businesses to expand, that will not be at the expense of our natural and historic environment. The draft framework sets out the Government’s thinking on how the planning system should safeguard the environment while providing for sustainable growth. The national planning policy framework maintains designations for the green belt, areas of outstanding natural beauty, national parks, sites of special scientific interest and other designations that protect the character of our country’s landscape, stop unsustainable urban sprawl and preserve wildlife. We are going further on that, because we will introduce a new local green space designation through the NPPF. It will enable communities to identify green areas of particular importance to them for special protection. That might be a key green in a village or a market town, as well as in a major city.
If we are going to protect the environment, it is important that we use land effectively. That is why the draft framework clearly states that
“plans should allocate land with the least environmental or amenity value.”
That means using derelict land when considering where to develop. We want developers to reuse derelict land, if that is the most appropriate course of action.
We also want to respect the historic environment. It is a non-renewable resource, and its conservation is integral to sustainable development. I reassure my right hon. Friend that we are committed to ensuring that the framework will maintain the existing protection, as set out in planning policy statement 5 for the historic environment, and we are looking carefully at the specific wording in the NPPF.
My right hon. Friend mentioned wind farms. Residents will have greater choice than ever in that regard through their local and neighbourhood plans—neighbourhood plans are a key part of the system, too. The plans will enable them to decide the look and feel of the places that they live in and love, while making sure that genuine larger-than-local objectives are met, such as protecting the natural environment, supporting sustainable local growth and combating climate change. I appreciate that proposals for wind farms can be controversial, but onshore wind, along with other renewables, has an important contribution to make to our energy mix and to reduce the pressure on consumer bills. However, that is not and should not be any excuse for building wind farms in the wrong place. The draft framework does not give a green light to all development proposals.
Whatever the class of development, decisions will continue to be plan-led. Plans will continue to set out what would be unacceptable, and they will be underpinned by the environmental safeguards in national planning policy. I believe that our new planning policies will ensure that communities and their environment are protected from unacceptable developments.
The consultation is closed, and I have indicated the steps that we are taking to consider it. As well as the written consultation, we held 11 regional workshops, including in the north-east. We have had wide engagement with organisations across the spectrum, including those referred to by my right hon. Friend, and I am glad to say that there has been good progress. We are finding unlikely bedfellows—property developers and environmental groups—sitting down and talking together to find common ground on how we go forward.
I hope that I have given my right hon. Friend and his constituents a renewed assurance on the transitional arrangements and the importance of historic and other environmental protections, and reassured them that the new planning policy framework is an opportunity, not a threat. I look forward to working with him again to see how we can take the framework forward as it is translated into a final document.
Question put and agreed to.
Written Ministerial Statements
(12 years, 5 months ago)
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ECOFIN (8 November 2011)
(12 years, 5 months ago)
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The Chancellor of the Exchequer (Mr George Osborne)
The Economic and Financial Affairs Council was held in Brussels on 8 November 2011. The following items were discussed:
Financial Transaction Taxes (FTTs)
The Commission presented its proposal on FTTs. Under the proposal, the tax would apply where at least one of the parties to the transaction was established in a member state. The tax rate would be 0.1% of the value of equity and bond transactions, and 0.01% on derivative contracts on the notional value of the transaction. I made it clear that the Government do not support the Commission’s proposal. As stated in the Commission’s own assessment, it would reduce growth and cut jobs. Other member states, including Bulgaria, the Czech Republic, Italy, Luxembourg, Latvia, the Netherlands, Romania and Sweden also voiced concerns with the current proposal. I asked the presidency and the Commission to work on a timetable to resolve this issue quickly, as it was clear that the Council would not be able to reach unanimous agreement on this proposal. The presidency noted the request for a fast resolution, and suggested the working group meeting on 5 December should consider options and alternatives to put to Ministers for further consideration.
Energy Taxation Directive (ETD)
The presidency decided to remove the orientation debate on the ETD from the agenda. This directive would require member states to tax energy products by taking into account both CO2 emissions and energy content. Discussion will continue with officials at working group level.
Follow up to the October European Council. 23 October and Informal meeting of EU Head of State or Government on 26 October
Ministers discussed the banking package that was announced on the 26 October by EU Heads of State and Government. The discussion focused on all three aspects of the banking package: access to term funding for banks; bank recapitalisation; and state aid guidelines. I made it clear that the Government would support co-ordinated national guarantee schemes, where appropriate, to support banks accessing term funding. However, the Government could not support a scheme which placed euro area bank liabilities on the UK. I underlined the importance of the bank recapitalisation aspect of the package. This should be undertaken while mitigating the risk of deleveraging. I also emphasised that the state aid rules should continue to apply fully. As a next step, the Council asked the Economic and Financial Committee to explore the options for addressing the issues related to access to term funding.
Follow up to the G20 summit 3-4 November in Cannes
Ministers discussed the outcomes from the G20 leaders’ summit held in Cannes on 3-4 November. The outcomes from the summit include: an action plan for growth and jobs; building a more stable and resilient international monetary system; reforming the financial sector; promoting more efficient commodity markets; strengthening the international trading system; and addressing climate change and development challenges. The G20 agreed that additional resources for the IMF could be mobilised in a timely manner; Finance Ministers will work on deploying a range of options by their next meeting.
Financial assistance to Greece—disbursement of next instalment
The presidency removed this item from the agenda. Euro area countries and the IMF made it clear that they would not disburse the next instalment of the Greek financial assistance programme until there was greater certainty about the new Greek Government. Once the new Government have endorsed the measures to put Greek debt on a sustainable footing, as agreed at the informal meeting of EU Heads of State and Government on the 26 October, the sixth tranche can be disbursed.
Economic governance—surveillance of macroeconomic imbalances: design of the “scoreboard”
The Council agreed conclusions on the scoreboard for assessing macroeconomic imbalances. Ministers agreed that current account surpluses would not lead to sanctions. Ministers also agreed the scoreboard for the excessive imbalances procedure. The Government support these measures as they will help to restore and maintain macroeconomic stability in the EU. The six-pack on economic governance, including the scoreboard, will be implemented in mid-December.
Preparation of the 17th Conference of Parties (COP-17) of the United Nations Framework Convention on Climate Change (UNFCCC) in Durban. South Africa
ECOFIN agreed conclusions on climate change in preparation for the UN conference in Durban, 28 November to 9 December. The conclusions endorse a report on finance provided by the EU and its member states as part of their “fast start” commitments. These commitments will aid climate mitigation and adaptation measures in developing countries.
Annual Meeting of EU and European Free Trade Association (EFTA) Economy and Finance Ministers
This meeting took place before the formal ECOFIN, and discussed improving regulation to secure financial stability. The Commission outlined the comprehensive response that was set out at the informal meeting of EU Heads of State and Government on 26 October. The President of the European Central Bank, made it clear that the Basel III rules on capital requirements for banks should be minimum, not maximum requirements. There is a risk that banks might deleverage as a consequence of the current economic environment and uncertainty about capital requirement rules. Following this, there was a roundtable discussion with Finance Ministers from Liechtenstein, Iceland, Norway and Switzerland. EFTA countries shared their views on the recent financial crisis and economic developments in euro area countries, and the impacts of these on their own economies.
Follow up to the Eurogroup meeting, 7 November
Ministers discussed political and economic developments in the euro area, as a follow-up to the Eurogroup meeting. I underlined that the deterioration in the euro area was having a huge impact on the UK and other non-euro area countries. As such, all 27 countries have a strong interest in the situation being resolved. I made it clear that the euro area needed to give more detail on how they would implement the package agreed at the informal meeting of EU Heads of State and Government on the 26 October.
ECOFIN (18 November 2011)
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The Financial Secretary to the Treasury (Mr Mark Hoban)
The Economic and Financial Affairs Council—Budget meeting will be held in Brussels on 18 November 2011. There is no provisional agenda at present. The following items are on the agenda:
Preparation of the Conciliation Committee meeting with the European Parliaments
The Council will aim to agree a final position on the draft budget for 2012, as part of negotiations with the European Parliament via a concurrent Conciliation Committee meeting. The Government will seek a final budget that delivers real budgetary restraint at EU level, supporting ongoing efforts to consolidate public finances across many member states, and that respects the principles of sound financial management.
As part of this process, the Government expect Ministers to be invited to discuss the Letter of amendment No. 2 to the preliminary draft budget for 2012, which handles mainly administrative costs relating to the expected accession of Croatia to the EU. The Government believe that these amendments should not increase the level of EU administrative expenditure.
Ministers are also expected to be invited to discuss Letter of amendment No. 3 to the preliminary draft budget for 2012, which concerns updates for estimated needs for agricultural expenditure and international fisheries agreements, reflecting changing market factors, revised estimates of needs for some direct payments, and legislative decisions this year, which are expected to affect this policy area next year. The Government are broadly supportive of these technical amendments.
Finally, Ministers may be invited to discuss this preliminary draft amending budget No. 6 for 2011, which would amend the 2011 EU budget to reflect latest implementation capacity and financial needs for the remainder of this year. The Government believe that any extra funding needs should be met fully via redeployments within existing budgets.
Outcome of the Conciliation Committee meeting with the European Parliaments
The Council will seek to agree to the outcome of the Conciliation Committee conciliation.
Any other business
At this time, the Government do not expect any issues to be raised under this agenda item.
Banking Act 2009 Reporting
(12 years, 5 months ago)
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The Financial Secretary to the Treasury (Mr Mark Hoban)
The Treasury has laid before the House of Commons a report required under section 231 of the Banking Act 2009 covering the period from 1 April 2011 to 30 September 2011. Copies of the document are available in the Vote Office and the Printed Paper Office.
Personal Independence Payment
(12 years, 5 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
The Welfare Reform Bill introduces a new disability benefit, personal independence payment (PIP), which will replace disability living allowance (DLA) for working-age claimants from 2013-14. There are a number of existing tax reliefs relating to DLA, and suitable amendments to a number of pieces of tax legislation will be needed on the transition to PIP.
In line with the Government’s approach to tax policy making, legislation relating to these provisions will be published in draft form in due course, with appropriate amendments made in a future Finance Bill (or by Treasury Order if appropriate).
In line with this, the relevant provisions have been removed from the Welfare Reform Bill.
However, the Government have decided to retain the provision in the Welfare Reform Bill that will make PIP tax exempt, in order to provide absolute certainty that these payments will be free of tax.
Private Finance Initiative
(12 years, 5 months ago)
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The Chancellor of the Exchequer (Mr George Osborne)
Today, I am announcing the Government’s intention to reform the private finance initiative (PFI).
The Government are committed to continuing sustainable investment in the assets we need to deliver public services, including our schools, hospitals and roads. However, we need to ensure that this investment is cost-effective, and that the taxpayer is getting maximum value for money. The Government share some of the commonly identified concerns that PFI contracts can be too costly, inflexible and opaque.
Reforming the PFI model will be the next in a series of steps that this Government have already taken to improve the cost-effectiveness and transparency of PFI.
We abolished PFI credits at the spending review 2010 to create a level playing field for all forms of public procurement. We also introduced new assurance and approval arrangements in April this year, to strengthen the scrutiny given in the approval process of all projects, including those using private finance.
In July, to improve transparency, the Government published, for the first time, the unaudited Whole of Government accounts which included an assessment of the PFI liabilities, and we announced a plan to deliver £1.5 billion of savings from the existing stock of PFI contracts in England.
The Government will expect a new delivery model to draw on private sector innovation but at a lower cost to the taxpayer, offering better value for our investment in public services. The Government’s approach to reform will be guided by the following principles, to create a model that:
is less expensive, and that uses private sector innovation to deliver services more cost-effectively;
can access a wider range of financing sources, including encouraging a stronger role to be played by pension fund investment;
strikes a better balance between risk and reward to the private sector;
has greater flexibility to accommodate changing public service needs over time;
maintains the incentive on the private sector to deliver capital projects to time and to budget and to take performance risk on the delivery of services;
delivers an accelerated and cheaper procurement process; and
gives greater financial transparency at all levels of the project so that the public sector is confident that it is getting what it paid for, and that the taxpayer is sure it is getting a fair deal now and over the longer term.
In order to bring about that change I am announcing the Government’s intention to conduct a broad-based engagement process with interested parties, led by the Treasury, to bring forward proposals for a new approach in using the private sector in the delivery of public assets. In considering what the future model should be it will be important to learn from the past and make full use of the wealth of experience that exists across the public and private sectors, and internationally. Where PFI has been successful—in getting projects delivered to time and to budget, and creating the correct disciplines and incentives on the private sector to effectively manage risk—we will look to retain these benefits.
The Government will be launching a call for evidence on 1 December that aims to capture the learning and lessons of the past 20 years of PFI. We will look to use those lessons to help inform the development of a new model that addresses the concerns of PFI. We invite those across the private and public sector that have strong ideas on how the future model should work to come forward with proposals and contribute to the development of a new delivery model.
Marine Conservation Zones
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
As part of the Government’s commitment to implementing in full the provisions of the Marine and Coastal Access Act, we are creating a network of national protected areas in British seas to ensure our underwater wildlife flourishes in years to come. We are clear that looking after the wildlife and habitat in our seas is just as important as looking after those on land.
The Government’s first step to identifying new marine conservation zones (MCZs) in English waters was taken forward through four regional MCZ projects managed by the statutory nature conservation bodies, who are Natural England and the Joint Nature Conservation Committee. The regional projects provided their recommendations for proposed sites for MCZs on 8 September. These have been reviewed by the independent science advisory panel (SAP) and their advice to the SNCBs and DEFRA is being published today on DEFRA’s website.
The Marine and Coastal Access Act requires the establishment of a network of conservation sites in the UK marine area. In English waters the network will comprise European marine sites, sites of special scientific interest, sites designated under the Ramsar convention and marine conservation zones (MCZs). The Act requires that the network must conserve or improve the UK marine environment and protect a range of representative features.
The regional MCZ projects have done excellent work in bringing stakeholders together and making site recommendations, but it is clear from the SAP’s advice that there are a number of gaps and limitations in the scientific evidence base supporting the MCZ recommendations.
It is important that we get this right. It is vital that we have an adequate evidence base for every site if we are to create successful well-managed MCZs. An adequately robust evidence base will be essential when we come to implement management measures.
DEFRA will therefore be commissioning significant additional work to support MCZ designation including an in-depth review of the evidence base for all the regional projects’ site recommendations and committing additional resources to carrying out seabed and habitat monitoring.
Protecting our marine environment is essential and the Government remain fully committed to establishing MCZs to contribute to an ecologically coherent UK network. However, the need to strengthen the evidence base for the MCZ recommendations means this is going to take longer than the ambitious target first put forward. We are likely to be able to designate some MCZs fairly quickly where the supporting evidence is adequate. However, for others we anticipate that more investigation will be needed before they can progress towards designation.
Natural England and the Joint Nature Conservation Committee will provide the MCZ impact assessment and their formal advice in July 2012. This is six months later than previously planned and this revised timetable will enable them to address the recommendations from the independent review of the evidence process for selecting marine Special Areas of Conservation (published July 2011) and take account of any further evidence obtained from the work that DEFRA is now commissioning. We will give careful consideration to all the advice received before undertaking formal public consultation on MCZs by the end of 2012. This consultation will include all sites recommended by the regional projects with clarity on how and when work on them will be taken forward. It is envisaged that the first MCZ designations will take place in 2013.
DEFRA and delivery partners will work together ensuring that early management measures are put in place to provide effective levels of protection for designated sites and continuing to build the evidence base for future designations. DEFRA will also take the opportunity, working with stakeholders and SNCBs, to look at other marine features which may benefit from spatial protection.
This phased approach to designation will also allow more scope to shape the English network taking account of sites being considered by the devolved Administrations and neighbouring member states.
Natural Capital Committee
(12 years, 5 months ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)
The natural environment White Paper, published on 7 June 2011, set out the Government’s intention to establish an independent Natural Capital Committee. It will commence its work in early 2012. As part of this, I will be making appointments to this new committee, and these will be advertised shortly.
The natural environment White Paper sets out our commitment to putting natural capital at the centre of economic thinking, and at the heart of the green economy. The Natural Capital Committee will enable us to achieve this goal by advising the Government on the state of natural capital in England. The Committee will report to the Economic Affairs Committee, chaired by the Chancellor of the Exchequer.
The Committee will:
Provide advice on when, where and how natural assets are being used unsustainably.
Advise the Government on how they could prioritise action to protect and improve natural capital, so that public and private activity is focused where it will have greatest impact on improving wellbeing in our society.
Advise the Government on research priorities to improve future advice and decisions on protecting and enhancing natural capital.
Further information on the natural environment White Paper can be found on the DEFRA website.
UK Relations with Colombia
(12 years, 5 months ago)
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The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne)
I wish to update the House on the UK’s developing partnership with Colombia, and the opportunities this provides to both our countries.
In last November’s Canning lecture, the Foreign Secretary set out his vision for a step change in the UK’s relationship with Latin America. As part of our re-engagement with the region, the relationship between the UK and Colombia is broadening and deepening. Colombia has the potential to be one of Latin America’s great success stories and we are working in partnership with the Colombian Government to help it achieve this aim. Colombia is already an emerging power with a diversified economy, a growing middle class and a strong, democratic central Government. Colombia’s economy grew by 4.3% in 2010, with similarly strong growth forecast over the next five years. It has achieved macroeconomic stability.
It is important not to forget the context in which this has taken place. Colombia is addressing a legacy of over 50 years of armed conflict. In the 1990s the country was on the brink of political, social and economic collapse. The numbers of paramilitary and guerrilla forces grew and Colombia endured increasing and apparently unstoppable violence, cocaine production and trafficking, poor economic performance and massive internal displacement. Colombia’s citizens suffered serious human rights abuses, including the extrajudicial killing of thousands of civilians by members of the armed forces.
A new Colombia is emerging. Since the 1990s, the security situation has changed dramatically. There has been significant reduction of cocaine production, while murder and kidnapping rates have sharply decreased. The FARC guerrilla group has been significantly weakened.
The country’s progress to date in dealing with these issues should be recognised, but we should not shy away from the scale of the remaining problems. High numbers of candidates were murdered in the months before last month’s local elections. Too many Colombian soldiers continue to lose their lives at the hands of the FARC. Large numbers of alleged cases of extra judicial killings are yet to be prosecuted. Deadly attacks on human rights defenders have increased. Making progress in these areas is fundamental to Colombia realising its full potential.
The Colombian President, Juan Manuel Santos, stated his strong commitment to reform and modernisation in his inauguration speech in 2010. He has set out an ambitious programme in the areas of governance, equality, prosperity and security and committed to a policy of zero tolerance of human rights abuses. President Santos has improved relations with neighbouring countries like Ecuador and Venezuela and enhanced the active and constructive role Colombia plays internationally.
We have already seen important examples of these pledges being put into practice. The Santos Government have passed the flagship Victims and Land Restitution Law, which aims to return land to millions of displaced people and compensate victims. The state intelligence agency (DAS), which had been responsible for some of the worst human rights abuses, has been disbanded. In September, in a landmark judgment, its former head was found guilty of criminal conspiracy for providing right-wing militias with lists of leftist activists and trade union leaders, some of whom were subsequently killed or imprisoned. The rate of prosecutions for extrajudicial killings has risen sharply.
Colombia is at a pivotal moment of change at which it enjoys the leadership of a strong president with a strong mandate, with whom we share common values. The UK is taking the opportunity this offers to develop further our close relationship with Colombia.
Prosperity—Partnership for Growth
Promoting trade is vital for the UK’s economy and prosperity. Our approach is to ensure that Colombia’s economic growth, development, human rights and the rule of law are complementary and mutually reinforcing.
At present Colombia is only the UK’s fifth largest export market in Latin America. The export of UK goods to Colombia grew over 30% in 2010 and has grown even faster in the first half of 2011. But there is more potential to be realised. We support the EU/Andean multiparty trade agreement, which will help to increase our commercial exchanges. Education, science and innovation are central to the growth of both our economies. Colombia has pledged $89 billion for investment in these sectors by 2015. Educational exchange will be a central part of our relationship. We will explore opportunities to develop partnerships between UK and Colombian research institutes and spin-off companies.
Human Rights—Shared Values
We welcome the efforts of the Santos Government to address human rights abuses through a wide-ranging reform programme and a national human rights policy, working with civil society and the international community. This commitment has already translated into an improved dialogue with civil society, better relations with the judiciary and an impressive legislative record.
We have long been a strong advocate of human rights improvements in Colombia and a close partner of the Colombian Government and civil society in delivering them. This is a central part of our relationship and will not change.
Very serious problems remain, on which we encourage further progress. This includes ensuring the security of human rights defenders, protecting the cultural and territorial rights of indigenous groups, tackling impunity and improving access to justice.
Security and International Partnerships—Common Purpose
At the UN and elsewhere, the UK and Colombia continue to have a strong partnership on international security matters and on counter narcotics. We are working together closely at the UN Security Council.
Counter-narcotics work in Latin America is an integral part of the UK’s drugs strategy. Colombian cocaine poses a direct and significant threat to the UK. With our help, in recent years Colombia has arrested high-profile drugs traffickers, dismantled organised crime networks and seized over 25 tonnes of cocaine per year. Our support for this work will continue.
We are developing our partnership to achieve shared objectives on other international issues such as climate change and biodiversity. We work together in international fora to pursue green growth, combat climate change and secure our energy supplies for the long term. We are both committed to a legally binding international climate agreement and have strategies for delivering low carbon growth.
Our relationship with Colombia has long historical roots and is broad and rich in substance. It is predicated on our common aim of improving prosperity and security in the UK, Colombia and further afield. The Government look forward to developing our broad-based relationship further and the visit of President Santos to the UK later this month will make a significant contribution to this process.
Misuse of Drugs
(12 years, 5 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
I am pleased to announce that the final version of the joint Working Protocol, developed and agreed between this Government and the Advisory Council on the misuse of drugs, has been deposited in the House Library today.
The new Working Protocol sets out the framework within which the Government and the Advisory Council commit to engage in the provision and receipt of its expert advice to Government on drug-related issues; maintain the expertise and membership of the Council; and intend to work together under the new power under the Misuse of Drugs Act 1971 to invoke temporary control of a new and emerging psychoactive substance to help prevent harm.
Hon. Members may wish to note that a draft of the protocol was made available (DEP2011-0598) to the House to help inform the scrutiny of related provisions in the Police Reform and Social Responsibility Act 2011.
I am pleased to inform the House that the Government and the Council will continue to embed working practices in accordance with the Working Protocol. The Working Protocol will support the Council in the delivery of its work programme that addresses both the work priorities set by Government as well as work of its own volition. The Council has recently delivered a thematic report on new psychoactive substances, which I commissioned, and that will now inform a cross-Government strategic response to this problem. It is also working to provide expert advice to deliver recovery based support to dependent users, which is central to this Government’s drug strategy.
Professor Les Iversen, chair of the Advisory Council, and I welcome the protocol in supporting our respective roles and responsibilities. At the heart of the protocol is a shared commitment to ensuring that the best evidence-based advice is available to Government on drug misuse, working together with the common purpose of reducing drug-related harms in the UK.
High Court and Court of Appeal Civil Division (Fees)
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
I have published today a consultation paper detailing proposals to increase fees in the High Court and Court of Appeal Civil Division.
These two jurisdictions hear the most complex civil court cases, and are particularly resource-intensive to run. The fees structure does not currently reflect the cost of providing services in these courts, meaning that there is a significant gap between costs and fee income. We propose to make targeted changes to these structures, affecting around 30 fees, in order to align more closely costs and income. Taken together, the proposals would reduce the current taxpayer contribution to HMCTS by £12 million to £14 million.
The cost of running the civil and family courts is currently around £612 million a year. Of this amount, 80% is funded through court fees with the remaining 20%, around £121 million, funded by the taxpayer. The Government’s long-term aim is to reduce this taxpayer subsidy by ensuring that fee income covers 100% of the cost of providing civil court services, minus the income foregone to the remission system. This is a system of fee waivers and reductions which ensures that access to justice is preserved for the least well off; around 160,000 fee remissions are granted per year.
Reducing the taxpayer subsidy of the courts service will be achieved through a combination of cost reductions (for example, reform of the courts estate, changes to civil and family justice processes) and fee increases. This will offer a fairer system to the taxpayer by targeting their contribution where it is most needed, and will ensure that, as far as possible, users pay for the service they receive while access to justice is protected for the most vulnerable.
As the cost of running civil court services is projected to decrease due to planned efficiency savings taking effect, it would be premature to increase all civil court fees to cover costs in a single round and risk recovering more than the cost of running the service. Instead, we propose to make phased and measured increases to fees over the short to medium term in order to balance correctly cost reduction and fee increases. My Department has already taken several such steps:
September 2010—inflationary increases to fees paid in private family cases, which projected an increase in fee income of around £6 million per year.
April 2011—inflationary increases to most civil, family and non-contentious probate court fees since each fee’s last increase, which is projected to increase court fee income by around £21 million per year.
This consultation paper represents the next step in this strategy. The paper contains 17 proposals affecting just over 30 civil fees in the High Court and Court of Appeal Civil Division, focusing on areas where there is a noticeable gap between fees and the cost of providing services in particular cases. The proposals cover diverse areas of work in these jurisdictions; the most notable are:
introduction of higher bands of issue (entry) fees in the High Court. The current highest issue fee paid is £1,670, for money claims over £300,000. We propose to add further bands, meaning that the highest entry fee paid would be £10,000, for claims over £l billion;
introduction of time-related hearing fees in the High Court and Court of Appeal Civil Division to reflect the increased cost involved in providing longer trials. The current hearing fee in the High Court is £1,090; we propose to introduce banded fees based on the time a court hearing is projected to last. The highest proposed fee is £10,900, for a case which lasts over 10 days.
Making increases in this way will mean that those whose cases consume a greater resource in court will pay more proportionally for the cost of processing their case, while the remission system remains in place for those who cannot afford to pay fees.
It is available online at http://www.justice.gov.uk/consultations.
Rail Reform
(12 years, 5 months ago)
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The Secretary of State for Transport (Justine Greening)
Our railways are currently the most expensive in Europe. That is something we can and must tackle. The recent review by Sir Roy McNulty found scope to cut rail costs by 30%—up to £l billion a year. My Department is committed to working with the rail industry to develop a strategy to deliver a better value railway for the benefit of passengers, taxpayers and the wider economy.
In furtherance of that strategy, my Department has undertaken to develop and publish detailed proposals on delivering a sustainable railway including reform of Network Rail. I am today announcing my intention to publish a Command Paper that sets out those proposals early next year.
It will allow time for greater consideration of other issues central to the question of rail reform. This will also allow the Command Paper to reflect properly the consequences of my decision following our consultation on a national high-speed rail network.
As part of the development of a comprehensive strategy for rail, and alongside the Command Paper, I also plan to consult on the scope to devolve responsibility for some rail passenger services in parts of England to sub-national bodies, and on issues relating to the review of fares and ticketing announced in May. In addition, the ORR expects to consult later this year on possible changes to its role, particularly in respect of future franchises.
Grand Committee
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Arrangement of Business
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The Deputy Chairman of Committees (Lord Geddes)
Before the first Motion before the Grand Committee is considered, I remind noble Lords that in the case of all the statutory instruments the Motion before the Committee will be that the Committee do consider the statutory instrument in question. In the case of the third statutory instrument, further proceedings in the Chamber would need to be tabled for further action to ensue. In the case of the other statutory instruments, the Motion to approve the instrument will be moved in the Chamber in the usual way.
If, as is likely, there is a Division in the House, the Committee will adjourn for 10 minutes.
Legal Services Act 2007 (Appeals from Licensing Authority Decisions) (No. 2) Order 2011
(12 years, 5 months ago)
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Lord McNally
That the Grand Committee do report to the House that it has considered the Legal Services Act 2007 (Appeals from Licensing Authority Decisions) (No. 2) Order 2011.
Relevant documents: 29th Report from the Joint Committee on Statutory Instruments.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, for the convenience of the Committee I intend to speak to the two orders together.
On the appeals order, noble Lords may be aware that the licensing regime for alternative business structures contained in the Legal Services Act 2007 became operational on 6 October. In relation to that regime, the Law Society has had its application to become a licensing authority approved by the Legal Services Board. In accordance with the 2007 Act, before the Law Society can be designated as a licensing authority by order of the Lord Chancellor, it is necessary for there to be an appellate body with the power to hear appeals against its decisions made in relation to alternative business structures.
The purpose of this order is to modify the functions of the Solicitors Disciplinary Tribunal—known as the SDT—so that it can perform that function, subject to its designation as a licensing authority. As required by the 2007 Act, this order is made on the recommendation of the Legal Services Board following wide consultation and with the consent of the SDT and the Law Society.
In summary, the order makes provision for the SDT to hear and determine: decisions which are appealable under Part 5 of the 2007 Act and under the Law Society’s own licensing rules; the orders which the SDT may make, where that is not already provided by the Act itself; the orders for costs in relation to those appeals; and onward appeals from the SDT to the High Court. The set-up and operating costs of this SDT appeal mechanism will be funded by the Law Society and met by the licence fee payable by licensed bodies.
The Law Society has elected to use the SDT rather than the First-tier Tribunal as its appellate body because it wanted a consistent approach to appeals by all the firms which it regulates—both alternative business structures and traditional firms—and because the SDT has a wider discretion than the First-tier Tribunal to award costs. During a previous debate in the summer, noble Lords expressed concern about different licensing authorities using different appellate bodies to determine appeals from their licensing decisions. I think that point was made by the noble Baroness, Lady Hayter. I can see merit in using one appellate body for all appeals relating to alternative business structures, and that has also been the Legal Services Board’s preference. However, the structure of the 2007 Act means that the Legal Services Board can only recommend appeal routes to which the prospective licensing authority and the proposed appeal body consent. Therefore, licensing authorities cannot be forced to use a particular appeal route.
The Legal Services Board made its recommendation on the Law Society’s appeal route to the Lord Chancellor in August, and this order has been brought before the Committee at the earliest opportunity. As I have already said, the Legal Services Board originally consulted on a proposal that there should be a single appellate body to hear decisions of all licensing authorities and proposed the First-tier Tribunal for that role. However, the Law Society did not consent to that proposal and elected to use the SDT as its appeal body. The consequences of this decision impacted on the timing of the Law Society’s designation as a licensing authority and were explained to the parties concerned at the time.
Following the Law Society’s decision a new draft order was prepared and, in accordance with the statutory requirement, the consultation on the order was undertaken by the Legal Services Board. That consultation was completed in June and the order was finalised shortly after, but not in time for consideration by this House before the Summer Recess. Without the appeal arrangements being in place, it was not possible to designate the Law Society before the commencement of the alternative business structures regime in October. If approved, the order will provide the individuals and businesses affected by the Law Society’s licensing decisions with an opportunity to challenge these decisions through an independent and impartial appellate body.
I will now turn to the exceptions order. This is the second exceptions order to be laid this year. The purpose of this amendment is to extend the exceptions to the Rehabilitation of Offenders Act 1974 to include non-authorised persons with a restricted interest in alternative business structures—a point originally raised when we last discussed this by—
Lord Jones
The Minister has already referred several times to consultation. Perhaps now, or in his summing up, he will give any instances of consultation in Wales and with whom consultations may have been taking place.
Lord McNally
I will address that in my closing remarks.
I was about to say that the matter of the extension of this order was raised in particular by the noble Lord, Lord Hunt of Wirral, who is not in his place today. Noble Lords will be aware that the Rehabilitation of Offenders Act allows individuals lawfully to conceal certain spent cautions and convictions after a specified period of time has elapsed. The Rehabilitation of Offenders Act allows individuals to do this by declaring certain cautions and convictions as spent. Once a caution or conviction is spent, the individuals need not declare it when applying for most types of employment, seeking licences or applying for insurance.
The Government believe that individuals who have put their criminal past behind them should be given a chance to reintegrate into society. Research has consistently shown that employment reduces the risk of reoffending. By removing unnecessary barriers to employment, the Government are therefore demonstrating their commitment to clearing the way for ex-offenders to lead law-abiding lives. The Government also recognise the importance of protecting the public; therefore, there must be a balance. In certain specified circumstances, for example, it is right that employers or regulators are aware of an individual’s full criminal record history when they are determining the individual’s suitability to fulfil a certain role or carry out a specific activity. The exceptions order amending this Act seeks to achieve this balance towards public protection.
The exceptions order lists specific activities for which the employer, regulator or other relevant body is entitled to information about the spent cautions and convictions of persons applying to carry out that activity. These activities are those that present individuals with a particular opportunity to cause harm to the public or involve regular contact with a particularly vulnerable group. This includes work with children, as well as work in certain sensitive financial or legal positions.
Today, I am seeking to extend the exceptions order to those seeking to hold a restricted interest in an alternative business structure. During passage in this House of a previous amendment in an exceptions order in June this year, a number of noble Lords raised concerns about the risk of criminal ownership to alternative business structures. Following that debate, the Ministry of Justice expedited consideration of a business case, seeking further amendments to the exceptions order in relation to the provision of legal services. After careful assessment of the business case, we concluded that the exceptions order should be extended to persons who hold a restricted interest in an alternative business structure. This, the Government believe, addresses the immediate concern of safeguarding the new structures from the risk of criminal ownership—a point that was made at the previous debate by the noble Lords, Lord Hunt of Wirral and Lord Thomas of Gresford. It effectively captures those who might pose a risk of improper management of firms providing legal services, including the risk of the exploitation of access to client money.
Schedule 13 to the Legal Services Act requires all those who hold a restricted interest in an alternative business structure to be subject to a fitness-to-own test. Information about an individual’s spent convictions will form part of that test. Therefore a licensing authority, when determining whether or not an individual is fit and proper, will be entitled to ask questions about the individual’s previous criminal history, which will include any spent cautions or convictions.
While the Law Society and other consultees welcomed the decision to make this further exceptions order, they also expressed a desire for further exceptions to be made, in particular for non-lawyer managers of alternative business structures who do not hold a restricted interest. It is important to state that the framework of the Legal Services Act makes provision for a statutory approval process only for those persons who fall within Schedule 13. There is not a separate statutory provision which allows for the approval of non-lawyer managers who do not hold a restricted interest. Our analysis found that all non-lawyer managers will be captured by this order, unless the percentage of their interest or voting rights falls below the statutory threshold that constitutes a restricted interest under Schedule 13. Our analysis is that such persons would not pose a significant enough risk to the management of an alternative business structure to justify making an exception. However, if a licensing authority deemed it necessary—and if the Legal Services Board agreed to the change to its regulatory arrangements—it has the power under Schedule 13 to make licensing rules so that the threshold at which a person is considered to have a material interest in an alternative business structure is less than the 10 per cent threshold set out in Schedule 13.
I am satisfied that this order effectively addresses the immediate risk to alternative business structures of criminal ownership. As we go forward and begin to see alternative business structures in operation, the Ministry of Justice will consider any future business case to extend the exceptions order further, in the usual way. Should compelling evidence be presented that additional roles in relation to alternative business structures or the legal services sector should be added to the exceptions order, then the appropriate amendment could be made.
I am sure that noble Lords will appreciate that, when deciding whether or not the exceptions order should be extended to a particular role or activity, the Government must be mindful of the careful balance between access to information about spent convictions and the important goal of improving access to employment for offenders who have proven that they have put their criminal lives behind them.
I believe that the decision to extend the exceptions order only as far as necessary, to persons who hold a restricted interest in alternative business structures, will enhance the regulatory safeguards in relation to those seeking to hold a material interest in an alternative business structure, but will also ensure that this balance is maintained. I beg to move.
Baroness Hayter of Kentish Town
My Lords, I would like to speak on the first of the two orders. I no longer have formally to declare an interest as I no longer chair the Legal Services Consumer Panel, but it was in that guise that I had such an interest in the implementation of this part of the Legal Services Act and the availability of the alternative business structure—a sort of one-stop-shop—which has been very strongly supported by consumers of legal services.
As the Minister said, this order is part of the architecture for setting up the alternative business structure licensing system, and it will allow the SRA to become a licensing authority by the end of this year—sadly, not by 6 October as was originally hoped, but nevertheless within 2011.
As has been outlined, the order deals with appeals by applicants who want to be an ABS against the granting of a licence, which is effectively the permit to act as a recognised ABS, by the SRA’s licensing arm. Similar appeals about, for example, whether an individual is fit and proper to own an ABS, or to be the head of legal practice or a head of finance administration, and decisions to impose licensing conditions or the imposition of a financial penalty would also be heard. Under the system being put into place by this order, as the noble Lord, Lord McNally, has said, the existing SDT, although slightly adapted, will hear such cases rather than the First-tier Tribunal, which will be used by the other licensing authority, the Council of Licensed Conveyancers. As has been mentioned at an earlier stage, we regret perhaps that there is not a single body dealing with all such appeals in order that a real body of expertise and precedent can be built up, which would give certainty and consistency to this aspect of the new delivery service.
As regards the new service, I know that we do not often congratulate civil servants but the MoJ and the Legal Services Board have worked immensely hard to get all this quite complicated machinery into place. They should be congratulated. As part of that, it is disappointing that the only reason—I know that the Minister gave two—that the Law Society via its SRA arm has insisted on a separate route rather than the First-tier Tribunal is because of the tribunal’s own rules about awarding costs. At the moment the SDT, when considering solicitor conduct cases, has the power to award costs to be paid by the losing to the winning side. Therefore, the SRA’s costs are always met. Under the new process, having gone to the tribunal, the tribunal would hear not the case brought by the SRA but an appeal against the SRA decision. Thus, as the tribunals do not generally have the power to award costs unless it is a case with absolutely no merit, the SRA would have to meet its own costs. I fear that not using the First-tier Tribunal is the reason for this separate order today.
I think that it is in the interests of business or consumers to understand the rules as they develop. It is also probably not in the interests of the Government or the LSB, which needs to watch carefully over this new system. It is quite a risk to set up something like alternative business structures. The MoJ and the LSB will need to look over the new system of legal service provision and how it is bedding down. It would have helped to have a single appeals body regardless of which front-line regulator was handling the case.
However, the rules that the SDT will apply are to be welcomed. They are virtually the same as those in place for the First-tier Tribunal, which will help with consistency in the short term and perhaps allow for adjudications to be combined at a later date. With those comments, I certainly support the order.
Lord Dholakia
My Lords, I welcome both orders. The Minister will recollect that when the matter was first discussed here, we raised our concern and he was good enough to say that he would take the matter back, examine it and see what appropriate action was necessary. I endorse what the noble Baroness, Lady Hayter, has said. The Minister and his staff have worked very hard to effect those changes, which are certainly welcome.
The order sets out an independent appeal mechanism against a range of ABS decisions, which is right; for example, refusing an application for a licence, imposing a conditional licence, disqualifying a person from working in the ABS or imposing a financial penalty. The most interesting part is that appeals on these matters are to go to the Solicitors Disciplinary Tribunal. I am told that this helps the SRA to license alternative business structures from the new year onwards. I am also told that the SRA has found significant interest from organisations seeking to become ABSs. It has received over 500 inquiries. Examples of such organisations include private equity investors, claims management companies, the expansion of in-house legal departments, major retailers, accountancy firms and partnerships between non-lawyers and insurers.
I particularly welcome the second order as I am involved in promoting a Private Member’s Bill on the rehabilitation of offenders. The noble Baroness, Lady Hayter, hit the nail on the head in regard to this. In the end this is about consumer protection and looking at what information is available. I am delighted to support the measure because it sets out an interesting aspect in simple terms. This is a significant step in that not only will the SRA be able to issue licences, but also the Government have agreed to include non-lawyer owners and, in certain circumstances, the managers of ABSs in the exclusions of the Rehabilitation of Offenders Act 1974. That is right, and we very much appreciate the Minister’s support. Over a period of time this will ensure that all owners of ABSs will have to disclose all their previous convictions and cautions, which ultimately helps the consumer to understand what happens in this legal process.
Again, I thank the Minister for the action that he and his staff have taken on this, and we certainly support the orders.
Lord Bach
My Lords, I start by thanking the Minister very warmly for his clear and thorough opening remarks and description of these orders. I have little to say about them except to express the support of the Opposition for them both. There is no doubt that the Legal Services Act 2007 will have a major, if not profound, influence in the years to come on how legal services are delivered in this country. That was clear when the draft Bill was debated and discussed by a Joint Committee of both Houses under the chairmanship of the noble Lord, Lord Hunt of Wirral, and when the Bill went through your Lordships’ House some time afterwards. I think we can see the importance of that Act in the orders before us. Alongside it there are many sensitivities that surround the bringing into force of various parts of this Act, whether large or small. I hope—indeed I am sure—that the Government and the ministry are aware of and alive to those sensitivities in deciding which way to go.
I shall say a word about the first order, which deals particularly with appeals bodies. On the face of it, it is a shame that there is not to be a single appeals body—I agree with my noble friend Lady Hayter on that—but I suppose that this is one of the sensitivities that I am talking about. It is interesting to see in the Explanatory Memorandum the consultation outcome in relation to this order. For a consultation outcome, this has a dramatic and rather more exciting history than is normally the case in such consultations and it is quite clear that there has been toing and froing before the Government came forward with this order allowing the Law Society its way in this instance. I do not for a moment suggest that that was the wrong decision. However, a single appeals body is an attractive proposition, and I wonder whether over a period of time events might lead to it.
As for the Rehabilitation of Offenders Act 1974, I start by wishing the Private Member’s Bill under the charge of the noble Lord, Lord Dholakia, well. It is relevant because, with a senior government Minister present, maybe the Government themselves will have to play a role at some stage in making sure that his Bill, which is much delayed—this came up under the Government I was proud to serve in—gets on to the statute book in one way or another. It may be in the form of a Private Member’s Bill with all the difficulties that that involves both in this House and in another place, or with a little help from Her Majesty’s Government. Certainly, if the Government were to put their weight behind the Bill of the noble Lord, Lord Dholakia, we would support it too.
However, as far as this order is concerned I am most grateful—particularly to the Minister—for describing in detail why the universal opinion of the various groups that were consulted about this was not met in terms of a slightly wider group being subject to the exemption to the existing Act. He described it very adequately. Is there any concern that by leaving out that group of people there will be some difficulties down the road? It would be unfortunate if people who should be exempted from this Act were not exempted at this stage, and if the Government had to do it on a “first today and then tomorrow” basis.
These are important issues even though they are in orders that are going through this Committee pretty quickly. I have no doubt there will be others that involve the ABS and the other important results of the Legal Services Act 2007. Bearing in mind that the Act was passed under a different Government, we will do all we can to ensure that Act comes into fruition successfully.
Lord McNally
My Lords, I thank the noble Lord, Lord Bach, for that response. He is always very kind about how clear and thorough I am in explaining statutory instruments. He knows as well as I do that it is only because of the hard work of the people who sit behind me. I am very pleased that the noble Baroness, Lady Hayter, and my noble friend Lord Dholakia thanked the Ministry of Justice and the LSB for their work on this. It is exciting. I pay tribute to the previous Government. The alternative business structures will produce changes which, I suspect, will be mainly to the benefit of the consumer in the provision of legal services. What we are trying to do with these orders is to put the last pieces in place to allow them to function.
The noble Lord, Lord Bach, and the noble Baroness, Lady Hayter, both expressed the concerns that were reflected during the last debate—that we have not got a single route here, in that the solicitors have decided to have their separate body. Whether it will cause the problems of a lack of consistency, we will have to see. What I can assure noble Lords is that the LSB will be carrying out further work, and looking at appeal arrangements, and the MoJ will be working closely with the LSB in relation to this. I also understand the question put by the noble Lord, Lord Bach: have we gone too narrow in this extension? As I explained, I do not think we have. However, let us see. The concern expressed last time was that the alternative business structures may allow criminal elements in that would corrupt the new structures. We listened in this Committee and have brought forward extensions, and now think that we have got things right. Again, the LSB will follow the new structures as they go in. So far, only one new alternative business structure has been announced. The Co-op has beaten Tesco; perhaps it should now be called Co-op law rather than Tesco law.
This is an exciting development for which the previous Administration can take credit and which we have been pleased to help bring into being. We will discuss legal services in general in more detail when we get to the Legal Aid, Sentencing and Punishment of Offenders Bill in a short while. However, as the noble Lord, Lord Bach, and I have discussed before, legal services in general are in flux. The ABSs will provide an exciting new dimension to them.
On the question asked by the noble Lord, Lord Jones, I can only draw his attention to the fact that the consultations were carried out by the Legal Services Board for England and Wales and the Law Society of England and Wales. I am sure that both bodies carried out their consultations across the geographic areas of their responsibility. If he can draw to my attention the case for them not doing that, I will be happy to follow it up. However, since they are both bodies that have an England and Wales dimension and were both charged with wide consultation, my understanding is that they will have consulted in Wales.
Lord Jones
I am grateful to the Minister for fielding my query. I content myself with the reminder to him: he is the Minister and he will do the work.
Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) (No. 2) Order 2011
(12 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord McNally
That the Grand Committee do report to the House that it has considered the Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) (No. 2) Order 2011.
Relevant document: 30th Report from the Joint Committee on Statutory Instruments.
Health Research Authority (Establishment and Constitution) Order 2011
(12 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Turnberg
That the Grand Committee do consider the Health Research Authority (Establishment and Constitution) Order 2011 (SI 2011/2323).
Lord Turnberg
My Lords, this instrument is to set up the Health Research Authority as a special health authority. The main reason given for taking this step rather than the primary legislation route is because there is some urgency in finding a home for the national research ethics committees that will soon find themselves homeless when the strategic health authorities and the National Patient Safety Agency go out of business.
I can, of course, understand why it is necessary to go down this rapid secondary legislation route because even if the Health Research Authority were to find a place in the current Health and Social Care Bill, it would still be a couple of years before it would be fully enacted and we need something sooner. However, there remains the question of why it cannot be put into the Bill as well so that there can be a smooth transition from this temporary solution to a more permanent one. No doubt, we will be exploring that when we come to debate it later in the Bill.
The anxiety remains that we will have to wait a considerable amount of time before we see another round of primary legislation to set up a permanent agency. In our debates on the Bill yesterday, we heard about the doubts being expressed about when we will see further legislation. Can the Minister enlarge on the hint he gave in the debate last week that we might see something relevant to this in 2012?
It might be helpful if I said a few words about why the establishment of a health research authority or agency is so important. It comes directly from the recommendations in the Academy of Medical Sciences’s report A New Pathway for the Regulation and Governance of Health Research which the Government commissioned last year and which, to their credit, they have endorsed enthusiastically. The report described in great detail the current regulatory burden faced by clinical researchers and proposed a number of solutions, the most important of which was setting up this agency. It pointed out how the UK research effort is being undermined by an overly complex regulatory and governance environment and how this has caused a fall in the UK’s global share of patients in clinical trials of all types, as well as a marked increase in the time needed to navigate a very complex research approval process. Regulation has grown as new regulatory bodies have been set up, often in response to some scandal or other, and often with seemingly good reason, but without any consideration of the overall impact of yet another new hurdle and without any evidence whatever that they have improved the safety of patients or the public.
The problem is confounded by the delays and duplication in the governance arrangements within individual NHS trusts. They are now thought to be the single greatest barrier to health research, especially where several trusts are involved in multicentre trials, for example. There is a definite need for a regulatory pathway that allows us to cut through all this unnecessary and complex bureaucracy while at the same time ensuring the safety and interests of patients.
Now we have a research regulatory authority as an important government response, and we have to see how it is going to achieve all that is expected of it. First, the National Research Ethics Service, with its 80 or so local ethics committees, has done a marvellous job in the past few years in streamlining the ethics approval process. It has, for example, made it much easier for those engaged in multicentre research proposals to gain approval. Preserving its function has been vital, but unfortunately moving it by itself from one body to another will do no more than preserve the status quo. It simply moves it from one home to another, yet the research regulatory agency was expected to do so much more.
My questions for the noble Earl are: will the authority have any more responsibilities? For example, will it have any of the responsibilities currently undertaken by the ethics and confidentiality committee of the National Information Governance Board? That committee advises the Secretary of State on whether permission should be given to researchers wanting to use data about patients where it is not possible to gain consent. It is a very important safeguard for patients, but it means that researchers have to have two sets of ethical permission to do the research, one from a normal ethics committee and another from this committee, and that causes all sorts of delays. Can we expect some streamlining here? I see in the Explanatory Memorandum to this order that that might be on the horizon. If so, can the Minister give any further information on that and on when it might happen?
Then there is the problem posed by the delays caused by the local R&D committees in each of the NHS trusts. They can hold up research for months, especially if more than one trust is involved in multicentre research proposals. For example, Cancer Research UK said that the average time for a multicentre research grant to be approved was over 600 days. Can the noble Earl say whether the new authority will have any role in easing that problem, perhaps by ensuring that limits are set on the times that trusts can take in considering proposals? Will it, for example, be able to vet research proposals in such a way that it can save local R&D committees from each having to repeat much of the straightforward common areas of a proposal, leaving them to check on aspects of specific local importance? That would certainly help to speed up the process.
The excellent report from the academy outlines a whole range of other regulatory bodies and functions that could and should be rolled up into the new authority. I shall not go into them, save to recommend that noble Lords who have not read the report might find it of some interest.
A research regulatory authority or agency has enormous potential for good if we can get it right. If we do, all will benefit—the researchers, certainly, but most importantly the patients, who will access new treatments sooner and more efficiently. We will gain economically too, because we will regain something that we are already losing: the investment from the pharmaceutical industry, which is watching our debates with interest.
We owe a debt of gratitude to the Government for setting up this authority and removing the uncertainty surrounding the ethics committee, but much more needs doing. I look forward with interest to the response of the noble Earl, Lord Howe.
Lord Willis of Knaresborough
My Lords, first, I apologise to the noble Lord, Lord Turnberg, for arriving one minute into his speech; I did not realise that the earlier business would have been dispatched so summarily this afternoon. I am grateful to him for introducing the debate and giving us an opportunity to address the issues he raised ahead of discussions during the passage of the Health and Social Care Bill, to which there are clear amendments on some of these issues. Like him, I say to the Minister without hesitation that I welcome the establishment of this special health authority. He promised it in answer to questions some time after I had arrived in the House and saw the need to move on the academy’s report as quickly as possible, and I compliment him and the Government for moving so speedily; there is no issue about that.
The need to find a home for the National Research Ethics Service was important. There was haemorrhaging of staff and good will and, in terms of any research project, it is important that you have a stable, effective and well respected ethics service. We probably have the best research ethics service in the world. We welcome the appointment of Janet Wisely, the current chairman of NRES, as the new chief officer for the Health Research Authority; she is well respected and that level of continuity will serve us well.
Lord Willis of Knaresborough
My Lords, I am delighted to continue. It is a punishment for coming a minute late that we have a Division half way through. While welcoming the special health authority, it is important to look at the order that has been referred to the Grand Committee. What we see, particularly under the heading “Functions of the Authority”, is the wonderful phrase in Article 3(1)(b),
“such other functions; as the Secretary of State may direct”.
What concerns me is that, while this organisation is set up as temporary, it could in fact simply continue indefinitely. There is no time limit on it.
As the noble Lord, Lord Owen, said in the debate yesterday, we have a real issue over the Government’s promises that there will be legislation. In reality, what we have been promised is a draft Bill in the next Session of Parliament, which will deal with research, education and training and any other such matters. As the noble Lord said yesterday, the Government will not be terribly enthusiastic about introducing another Bill. It will probably take us to 2013—or even beyond that—before a draft Bill is fully considered. That takes us right up to the end of this Parliament; perhaps to the final year or final Session of this fixed-term Parliament. Are we really saying that we are going to have a Bill of such importance and magnitude coming before Parliament at that stage? Quite frankly, I have my doubts despite the best intentions of the noble Earl, Lord Howe. If that is the case, we will see this temporary authority simply running on beyond the next election. Unless the Minister can give us a clear indication today of how long this organisation is going to stay in place, whether it has an end date and whether we will have actual, not draft, legislation, then I for one will continue to press the point.
Why do I say this is important? It is because it is not just the research ethics service that is in limbo. Several other organisations are in limbo as well. We have had the Public Bodies Bill. We have two organisations, the Human Tissue Authority and the Human Fertilisation and Embryology Authority, in limbo and running down their permanent staff. There is a real question about their future and significant elements of both may—I stress “may”—come into this new authority.
My first question is: when Article 3(1)(b) says,
“such other functions; as the Secretary of State may direct”,
is there a plan or an intention to take key elements out of the Human Tissue Authority and Human Fertilisation and Embryology Authority and move them into this organisation? The legislation is there for that to happen. It does not need any further primary legislation. Secondly, there is the issue of the Medicines and Healthcare Regulation Agency. What is going to happen to that? It is another organisation that is intricately involved with the research agenda and again there is an element of uncertainty about its future. Is there any intention to move parts of that into the new agency? Is that what we mean by “any other such functions”?
The other issue is the research and development permissions for each NHS trust. The noble Lord, Lord Turnberg, summed it up quite admirably. The main thrust of the Academy of Medical Sciences’s excellent report—which, to be fair, politicians on all sides of the House, including the Minister, have supported and agreed—is the key point that the noble Lord, Lord Turnberg, made. Recruiting people to trials can take over 600 days and while there is a commitment, quite rightly and importantly made last year by the Government, to go to a 70-day average period, how is that going to be driven? Paragraph 3(a)(i) refers to,
“the facilitation and promotion of research”.
Is that what this order actually means, and is it what the Minister means? When I asked him in a Question for Written Answer—I am sorry, but I do not have the reference; Hansard will find it—whether there was any requirement for legislation in order to ensure that NHS foundation trusts become actively involved as part of their duty to promote research and clinical trials, the clear response from the Minister was that there is no need for that because there is perfectly sufficient legislation at the moment for that to happen. I do not know how that is going to happen. If we are going to have an authority, other than the National Research Ethics Service, that simply treads water on every other aspect of research, we will be missing a trick because we could be two, three or four years away from having a permanent solution.
In conclusion, I ask the Minister what work the special health authority will do to prepare for new functions which may come down the line with the new Health Research Authority. What timescales does the Minister envisage for the establishment for the new Health Research Authority and for it becoming operational? Does he have a clear timeline that is not simply in terms of legislation? Indeed, what preliminary work will be done to pave the way for the new national research governance service, which was going to be swept into this organisation too? I think I can give the Minister eight out of 10 for making a commitment to the House. He has made a promise, and I thank him for that, but can we please now have some flesh on these bones as well so that we know what direction of travel we are heading in so that we can all get on the bus?
Baroness Finlay of Llandaff
My Lords, I would add my words of welcome to the principles of research which have been supported by the Government. I know that the Minister has done much personally to promote this. In welcoming the Health Research Authority as a special health authority, I also echo the words: “The problem is this: for how long and where will it lead to?”. The current regional ethics committees that are going will be covered in this, but they are only half the problem in relation to research. The other half is R&D committees in trusts. There is a separate committee for every trust and people who want to undertake multi-centre research have to take their research through them. If you are researching into rare diseases, you may have to go through every trust in the country in order to be able to recruit enough patients to enter into whatever study you are conducting. That could be 100 or so different committees. It means that researchers have to sign up at every trust. Each trust behaves quite differently. Some speed research through in about two weeks, but others become extremely fussy. Unfortunately, that fussiness often focuses on things like the patient information sheet. The committees will spend time requesting redrafts of that sheet, but the redraft may be rejected by another trust. Researchers end up going around in circles for months on end in what is in fact a pretty futile activity.
That is because the original research ethics committee which looked at the proposal will have to go through everything, including the consent form, the patient information sheet and so on. The committee also has to look at the protocol of the study itself and the science behind it. If the science is bad, that is really when the research programme should be stopped in its tracks. That is the role of the ethics committee, and if it does its job properly, it could centralise all these other factors and look at them.
Apart from the duplication taking time for researchers, it is duplication across the whole country with people doing exactly the same job and coming to slightly different, but often not very consequentially different, conclusions. There is duplication at many levels. One could say that if something is good enough for the research ethics committee, it really should be good enough across the board. If it is not, there is a question about the research ethics committee and the way it functions, and it needs to be looked at again because it is not up to scratch.
There are quite a few things that I hope can be centralised, and it will be helpful if the Minister will clarify what will and will not be centralised. For example, will checks on the principal investigator’s qualifications to undertake the research be centralised? Will the protocol of a study and the science behind it be scrutinised with patient information sheets and patient consent forms? Will there be a way of informing the trust that that has been done adequately and does not have to be done again? At a local level, of course the trust has to look to see whether it has the right research facilities and the right infrastructure. That is not usually about the nature of the research but more about whether it is in a position to participate. That is a feasibility check at a local level. That could be done very quickly, but it needs a different mindset. I am concerned that with the push to autonomy for all the different trusts, a trust can say, “No, we’re not going to play ball with this. We want to have our own processes and do our own research ethics rather than participate at a national level”, which might strengthen its R&D committee processes.
An issue not being addressed in this order is indemnity for research. Are there plans to establish an all-England research risk pool or some kind of centralised and co-ordinated indemnity so that we free research processes and stop risk-averse behaviour at local level? Sometimes, risk aversion, which is an inappropriate interpretation of risk, is making some of these committees particularly nitpicking in their processes. I recognise that that might need primary or secondary legislation, but I urge the Minister to take away the amendments that we have tabled to the Health and Social Care Bill and think very carefully about them because they would solve quite a large part of this problem. They would not solve it all, but this order is an interim measure, and it cannot last for years because the gaps will widen and we will then carry on losing research from our shores. We are all aware of the urgent need to turn that traffic around and to bring pharmaceutical and all other types of research back because it is a strength and an economic earner for this country if we can get it right. The infrastructure is critical.
Baroness Thornton
My Lords, I thank my noble friend Lord Turnberg for introducing the debate on this order. As noble Lords know, this order establishes the Health Research Authority to facilitate and promote research related to the health service through the research ethics committee that will check that research proposals meet ethical standards and will establish and appoint members to those committees. I think everybody would agree that the provenance of this initiative is the Academy of Medical Sciences’s review, which was published in January, and that the urgency arises from the abolition of the National Patient Safety Agency.
I will first ask a couple of questions about the National Patient Safety Agency because I would like to get some issues on the record. We are all aware of the reason that this order has been brought forward. The Minister has been completely clear with the House about the process. It needs to be there to scoop up the National Research Ethics Service. What is happening to the National Reporting and Learning Service and the National Clinical Assessment Service? The National Patient Safety Agency had three functions, and those were they. What is going to happen to the other two very important functions?
In addition the National Patient Safety Agency was responsible for commissioning and monitoring the National Confidential Enquiry into Patient Outcomes and Death, the Confidential Enquiry into Maternal and Child Health, and the National Confidential Inquiry into Suicide and Homicide by People with Mental Illness. I would like to know what will to happen to them. Where are they going to live when the National Patient Safety Agency no longer exists? Indeed, what will happen to the special programmes that the agency has conducted over the years, such as the programme into maternal and newborn babes? This is very important work, with accumulated knowledge and skilled staff, and I am concerned about that.
I agree with the noble Lord, Lord Willis, about the momentum that there is to establish an independent health research body. That was underlined by the discussions we had on the Public Bodies Bill over the future of the Human Tissue Authority and the HFEA. It would also benefit the Committee if we could be brought up to date as to where things are with them, and their future. But the outstanding question is: why can we not start now and include the new agency in the Bill, and get on with it? We will have that debate on the Floor of the House.
I have just a few more questions. How will the independence of this special health authority be guaranteed, because it is not the arm’s-length body that will ultimately be created? What costs are involved with this? Are there any extra costs for which funding will have to be found to set up this ethics committee? How will that be progressed? Finally, what will happen to the current board members of the National Patient Safety Agency led by Sir Liam Donaldson?
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, I thank the noble Lord, Lord Turnberg, for his positive comments on the creation of the HRA as a special health authority and welcome the opportunity of this debate to clarify the role of the authority on its establishment on 1 December. As I said last week when we discussed amendments to the Health and Social Care Bill, the Government have signalled their clear and strong support for research by increasing the research budget of the Department of Health in real terms over the current spending review period. I fully recognise the importance of ensuring that research is promoted within the health service. High quality health research is critical to the ability of the NHS to deliver world-class health outcomes, an end towards which we are all striving.
I think that noble Lords will agree that regulation of research is excessively complex. Both this and inconsistent local practices need to be addressed. As the Academy of Medical Sciences’s report set out, it is still far too difficult for researchers to navigate the complex national and local processes for research approvals. The Plan for Growth, which was published alongside the Budget 2011, announced the Government’s proposals. At the national level, we said that we would create a Health Research Authority to combine and streamline the approvals for health research, which are scattered across many organisations. At a local level, we said that we would transform the incentives for efficiency in research initiation and delivery. These two components are critical and we are already tackling the complex local processes for research approvals. Through the Health and Social Care Bill and the efforts of my department and the National Institute for Health Research, we are seeking to embed a positive and proactive research culture across the depth and breadth of the NHS. The noble Lord, Lord Turnberg, asked me what we are going to do about delays at trust level, and that question was echoed by the noble Baroness, Lady Finlay.
We have developed a co-ordinated system for gaining NHS permission for research that is supported by the National Institute for Health Research. It aims to standardise the checks that lead to trust approval, and centralise those that do not have to be carried out locally. In May we fulfilled our commitment to launch a framework of good practice and standard procedures to facilitate consistent local research management and greatly improve performance.
NHS trusts which adopt these standards will stop unnecessary duplication of checks, a local barrier to getting a research project off the ground that has frustrated researchers for many years. For clinical trials the National Institute for Health Research will publish outcomes against public benchmarks, including—and I address this particularly to my noble friend Lord Willis—an initial 70-day benchmark to recruit the first patient to a trial. Future NIHR funding will be conditional on meeting benchmarks.
I turn back to national-level commitments. The instruments not only fulfil our commitment to establish the Health Research Authority as a special health authority this year; alongside the directions we are giving it, they also ensure that the Health Research Authority will have substantive functions from the outset.
First, the HRA will unify the existing functions of the National Research Ethics Service from the National Patient Safety Agency and strategic health authorities. This will provide continuity and a stable platform for the National Research Ethics Service to build on the achievements it has already made. For example, a major obstacle to conducting research has been the completion of the numerous forms required to gain research approvals and permissions. The Health Research Authority will continue to run the integrated research application system developed by the National Research Ethics Service. It is an online one-stop shop that lets researchers apply for all the research approvals they need, not just to ethics committees but to NHS trusts and other health research approval bodies.
Secondly, in addition to ethical approvals, and from the outset, the HRA will have duties to co-operate with other bodies to improve the whole system: to create a unified research approval process and to promote consistent standards for compliance and inspection. This means it will promote alignment across the whole system, working closely with other bodies, such as other regulators. For example, it will work with the Medicines and Healthcare Products Regulatory Agency on operating a co-ordinated national approval process for research involving medicines or medical devices. It will also work with the National Institute for Health Research on promoting proportionate action to demonstrate compliance with standards that are consistent on both the regulatory and provider sides. Therefore, it will support the work of the National Institute for Health Research to promote improvements in local NHS approval processes.
Thirdly, and most importantly, from the outset the HRA’s role will be to protect and promote the interests of patients and the public. It is crucial that members of the public participating in research are—and feel—safe. The HRA will protect patients from unethical research, and enable patients to benefit from opportunities to participate in research by facilitating research which conforms to ethical standards and the law. Its role in combining and streamlining health research approvals, alongside the work of the National Institute for Health Research with NHS trusts, will improve the timeliness of decisions about research projects. This will increase opportunities for our patients to benefit from research.
The noble Lord, Lord Turnberg, asked about the ethics and confidentiality committee function within the National Information Governance Board for Health and Social Care. The NIGB is an independent statutory body established to improve and monitor information and governance in health and adult social care. It provides advice to the Secretary of State on the appropriate use, sharing and protection of patient and service user information. In particular, it has set up a committee—the ethics and confidentiality committee—for advice on the processing of patient information, including confidential patient information, under the Health Service (Control of Patient Information) Regulations 2002. Confidential patient information may be processed under those regulations only where the processing has been approved by the Secretary of State and, in the case of medical research, also by a research ethics committee. It is intended that the HRA will take on the Secretary of State’s role in approving the processing of such information for medical research as part of its role in combining and streamlining approvals for health research. The establishment of the HRA will help to ensure that the application and review processes are streamlined and, as I have said, follow consistent standards.
My noble friend Lord Willis asked me to summarise the functions of the HRA as a special health authority. I have already mentioned that it will assume the NRES functions from the NPSA as well as strategic health authorities’ functions as the appointing authorities for research ethics committees. In due course, it will perform the Secretary of State’s function of approving the processing of patient information for medical research. My noble friend mentioned the reference to directions in the order. Principally, those directions will relate to the need for the HRA to co-operate in the exercise of its functions with the regulatory bodies that I have referred to and with others.
My noble friend asked whether the Government have any intention to transfer HFEA or HDA functions into the special health authority. The answer is no, because we cannot. As a special health authority, the Health Research Authority is generally restricted to exercising the Secretary of State’s functions relating to the health service in England. Establishing it as an NDPB in due course will enable functions to be conferred on it which are not specific to the health service in England, including giving it functions which go beyond health, including functions relating to social care. The Academy of Medical Sciences’s report proposed that the research-related functions of the HFEA should reside with the Health Research Authority. We will be consulting on the future of the HFEA and on our preferred option that the research-related functions of the HFEA should pass to the HRA. Establishing the HRA as an NDPB will enable it in due course to take on functions relating to embryo research which are not health service functions in England.
The noble Baroness, Lady Finlay, asked me about indemnity for research and the possibility of an all-England risk pool. Trusts are members of the NHS clinical negligence scheme, which indemnifies them in respect of negligence for which they have assumed vicarious liability, whether the negligent activity was standard care or research.
The noble Baroness, Lady Thornton, asked about other functions of the NPSA and, in particular, the National Reporting and Learning Service and the National Clinical Assessment Service. I will write to her on that, but I can tell her that most of the NPSA’s functions are expected to transfer to the NHS Commissioning Board after Royal Assent. Patient safety will of course be at the heart of the new system. Responsibility for national confidential patient inquiries has already moved to the Healthcare Quality Improvement Partnership, which manages the national clinical audit programme.
The noble Baroness also asked me about the cost of the Health Research Authority. The funding will follow the functions. The Health Research Authority will continue the reform of the National Research Ethics Service releasing efficiency savings, we trust, for developing the authority’s other functions.
Looking forward, it is important to ensure that we maintain momentum and build on the advances that the Health Research Authority will be able to take forward as a special health authority. It is our intention to publish draft clauses on the Health Research Authority for pre-legislative scrutiny in the second Session. Future legislation will allow us to establish the Health Research Authority as a stable and independent non-departmental public body. The current regulatory framework for health research involves many overlapping acts and instruments, so there is much work to be done to ensure that we develop legislation that is fit for purpose.
Research has been a core function of the National Health Service since its foundation. It is key to the future of health and healthcare in the UK. The creation of the Health Research Authority as a special health authority is, I believe, an important step on the road to removing unnecessary bureaucracy that could stifle research in this country.
I am most grateful for the support of noble Lords. We will no doubt be returning to these issues when debating amendments tabled to the Health and Social Care Bill. In the mean time, I recognise the value of these exchanges and thank all who have contributed so fully to this debate.
Lord Turnberg
My Lords, the noble Earl said that in future the NIHR will require trusts to have a 70-day limit on the time in which it can consider requests. Does that also reflect on non-NIHR-funded research from other organisations or is it only NIHR research?
Baroness Finlay of Llandaff
Before the noble Earl concludes his response to that question, I should like to raise the matter of “any qualified provider”, how the all-England risk pool might relate to that, and whether there will be a research obligation and a research link in relation to the broad range of people who will provide services under the “any qualified provider” remit. It would be both their indemnity and how much they would be part of this process.
Earl Howe
My Lords, the precise arrangements for the CSND are being worked through at the moment. I will write to the noble Baroness on that. As I have described, the incentive relates directly to the NIHR funding but the benchmark is measured against other research and all studies that are going on. There is a wider dimension to this.
Lord Turnberg
I should apologise to the noble Earl for burdening his day off from the health Bill during several weeks of hard work. I thank him for his detailed response and will reflect carefully on what he has said. Today’s debate will be useful when we debate this issue in the health Bill proper on the Floor of the House. I hope that it will reduce the amount of time that we discuss the Bill, although I cannot promise that. We will wait and see.
Violence Against Women
(12 years, 5 months ago)
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Baroness Hussein-Ece
To ask Her Majesty’s Government what plans they have to promote and support the International Day for the Elimination of Violence against Women, designated by the United Nations General Assembly for 25 November each year.
Baroness Hussein-Ece
My Lords, the United Nations General Assembly designated 25 November as the International Day for the Elimination of Violence against Women, and invited Governments, international organisations and NGOs to organise activities designed to raise public awareness of the problem on that day. Women activists have marked 25 November as a day against violence since 1981. The date came from the brutal assassination in 1960 of the three Mirabal sisters, who were political activists in the Dominican Republic.
Violence against women has been described as perhaps the most pervasive violation of human rights across the globe. Governments have obligations to prevent violence against women under international and national human rights and equalities laws. Under the European Convention on Human Rights and the Convention on the Elimination of All Forms of Discrimination against Women, the United Kingdom has obligations to prevent violence against women before it happens.
The UK Government's commitment to tackling violence against women is clear. Our success in tackling this will be a test of this Government's ability to build a fairer society. There is clearly much more to do to ensure that women and girls are not held back. We should strive to be ambitious in our aims and to meet a shared commitment to ending violence. Violence against women and girls in the UK is still, sadly, widespread and has serious social, health, emotional and financial consequences. It is more prevalent among women in England than stroke, diabetes and heart disease. Attitudes that justify and excuse abuse are, sadly, still deeply entrenched.
Gender equality cannot be achieved while violence continues. In modern-day Britain, two women a week are killed by a partner or ex-partner. Sexual harassment in schools, communities and workplaces is still routine, and 60,000 women are raped every year. Trafficking and sexual exploitation affect thousands of women in the United Kingdom, and an estimated 6,500 girls in this country are still at risk of female genital mutilation each year. This is a scandal, and we simply cannot go on like this.
Just last summer, Jane Clough, a 26 year-old nurse working in Blackpool Victoria Hospital was brutally murdered by her ex-partner, the father of her baby, as she arrived to begin her night shift. Her murderer, Jonathan Vass, had appeared in court the previous December charged with three counts of rape. He had been further charged with six counts of rape and three assaults. Despite strong objections by the police and the Crown Prosecution Service, he was released on bail by Judge Simon Newell, who had been told that he posed a real threat to the victim as a witness. Just recently, I watched a TV documentary about this awful case, which was so harrowing. For weeks, Jane Clough lived in fear. She kept a diary of how she feared for her life. Despite this fear, Jane did all the right things. She reported the rape and the violence, but her rapist was bailed, and he went on to kill her. This young woman was badly let down by the judicial system, resulting in her brutal death, leaving a small baby. When will victims receive more protection, and when will lessons be learnt? How can victims have confidence in the system when we still have incidents like this which, unfortunately, are still commonplace?
I declare an interest as a commissioner in the Equality and Human Rights Commission. As part of the commission's role as the national human rights institution and in line with our international reporting responsibilities, we at the commission have supported the drafting of the Council of Europe Convention on Preventing and Combating Violence against Women and Domestic Violence. This convention sets out legally binding standards for all forms of violence against women, bridging some of the existing gaps in human rights protection. However, the United Kingdom has yet to become a signatory of the convention.
In April 2011, the Committee of Ministers of the Council of Europe adopted a new convention on preventing and combating violence against women. It has not, as I mentioned, been signed by the UK Government. Since the convention opened for signature in June, 17 countries have ratified, including Austria, France, Germany, Iceland, Macedonia, Sweden, Turkey and Ukraine. The commission, and many of us, would be expected to encourage the United Kingdom Government to adopt international human rights standards. Can I ask the Minister whether the United Kingdom Government have reached a decision on becoming a signatory? In a recent response to a similar question, the Equalities Minister stated that the Government would consider the equality implications when making a decision on that signature.
Lord Boswell of Aynho
I speak as a member of the British delegation to the Parliamentary Assembly of the Council of Europe. I have some experience of these situations there and I am very much in sympathy with what the noble Baroness said about the need to combat violence of all kinds against women.
Would it not be fair—I am perhaps setting this up for the Minister also to comment—to say that in the United Kingdom we tend to take a very rigorous view of our ability to have the legislation and the other administrative arrangements in place before we sign up to conventions and that there will always be, as indeed there was in relation to the convention on the trafficking of women, where a number of us pressed very hard for a British signature, a certain reticence before we sign up? It is not a lack of commitment—or at least I hope it is not—but rather a determination to get our ducks in a row before we commit ourselves. Some of the other member states may take a slightly lighter view of their responsibilities, although they should, of course, take them equally seriously.
Baroness Hussein-Ece
I thank my noble friend for that helpful intervention and for bringing his experience to bear on what I have to say. I hope that the Minister, when she comes to respond, will also ratify some of the problems in committing to a signature.
We all know that internationally—and this is an international day, after all—there is still so much to do. I have raised the plight of Afghan women in your Lordships’ House before, and I would like to turn briefly to a terrible incident that happened just last Thursday, which I was struck by. It was reported very widely in the news. A group of armed men stoned and shot dead a woman and her daughter in Afghanistan’s Ghazni province. Officials blamed the Taliban, who they said had accused the women of moral deviation and adultery. The police said that two men had been arrested in connection with the murder. The attack happened only 300 metres from the governor’s office in Ghazni city, which is on the list of places to be transferred to Afghan security control, and close to the police chief’s office and a Western-backed provincial reconstruction team. I find it quite extraordinary that no one called for help in this terrible incident. Security officials said armed men entered the house where the young widow lived with her daughter and took them out to the yard where they were initially stoned and then shot dead. Officials said a number of religious leaders in the city had been issuing fatwas asking people to report any one who was involved in adultery.
We are 10 years on in this country’s involvement with Afghanistan, and I think most of us will remember —I certainly remember very clearly—that one of the reasons given for that involvement was to make things better for women in Afghanistan. Despite all these promises, the plight of women in Afghanistan seems to be, and the evidence shows this, worse than ever. Can the Minister say what representations and influence Britain has in bringing the plight of women to the top of the political agenda in terms of our relationship and our activities in Afghanistan? What activities are being developed, or are planned, to highlight what is happening there, and what can be brought to bear to change things?
I will conclude with an appropriate and wise comment from Mary Wollstonecraft, the 18th century writer and activist, who is regarded as the mother of British feminism. She will have her image beamed onto the Houses of Parliament tomorrow between 4.10 pm and 6.10 pm. The campaign to celebrate her life is being organised by the charity Newington Green Action Group. It hopes to place her statue in London’s Newington Green, in Islington, in the ward I represented as a councillor, very near to where I grew up, where Wollstonecraft lived and set up a girls’ school in the 1700s. She simply wrote of women:
“I do not wish them to have power over men; but over themselves”.
She lived between 1759 and 1797, and it struck me that 250 years later we are still debating this very basic principle of allowing women to have control and power over their own lives. I hope that one day there will be no need for further debates such as this.
I thank noble Lords who have taken part in this debate. There were other noble Lords who indicated that they would have liked to have taken part, but there is a lot of business going on, and a clash in your Lordships’ House.
Baroness Howells of St Davids
My Lords, I thank the noble Baroness, Lady Hussein-Ece, for providing this opportunity to discuss such an important subject and for her carefully crafted opening to this debate. I will use my few minutes to share with you some of the insights I got on the subject while working as a councillor in the community. However, first I invite the Committee to consider how for centuries mankind has sought control. The way of controlling has been by the cracking of the whip by bosses, parents and school teachers. Today, we are very lucky that some of these controls have been removed. At the base of discipline, the end result has been to show who is in charge. Taking control is the key factor. Such behaviour may emanate from a number of causes, including a sense of entitlement, often supported by sexist, racist, homophobic and other discriminatory attitudes. I well remember a case of a father battering his son to death when he disclosed to him that he was gay. His words to me were, “I accepted my son had grown up, but I had no control over his sexuality, and I had to bear the shame”. He said this over and over again. “When did I lose control of my family? I did all I could for my son, and now he has brought disgrace, he has brought shame to our family. My wife was too soft”. He then turned and attacked her.
It is always clear that the abuser is responsible for the violence. However, I believe conditioning may be at the root of uncontrolled abuse. How do we begin to address such conditioning? Domestic violence can be defined to include any violence to children, mothers or other members of the family. Domestic violence is dangerous. It is more so when the perpetrator is the man who sees himself as the breadwinner and the supporter of the family. He asks himself how he can become big when he can no longer play that role. He feels helpless, he loses the control he has always had and the power of being in charge which has always been there. If it appears to be slipping by losing one’s job, by feeling that others in the workplace are getting better breaks, or even by having a nervous breakdown, then the abuse can start.
When discussing the issue with women, most always want to blame themselves. The perpetrator is in no doubt that it is not the woman’s fault. Nevertheless this is so well accepted that the woman herself believes that she is the reason that his control has gone. Although this perception is changing in women, they are still reluctant to report the abuse. Children in households are often sworn to secrecy. Women can always recount cases of others who have been brave enough to seek redress, only to find that even where cases have been proven, somehow the danger they and their families are in hardly ever penetrates the legal system. The abuser either escapes jail, or if he is incarcerated, he serves half a sentence and returns to take vengeance on them, which often leads to their deaths. One young woman opened her door without even knowing that the man who had abused her was out, and he shot her as the door opened.
Our society appears to be becoming very violent. Many learned men and women have written in great detail about the causes of violent behaviour, blaming family breakdown, the loss of Christian values, the influence of the media, drugs and criminality as a whole. During this time of recession, can the Government be the voice for change on violence against women? We know from research that the vast majority of domestic violence is perpetrated against women and children, and women are considerably more likely to experience repeated and severe forms of violence and sexual abuse. Women may experience domestic violence regardless of their ethnicity, religion, class, age, sexuality, disability or lifestyle. The main perpetrators, as we know from research, are always men. Abusers choose to behave violently to gain control. A perfectly reasonable man can resort to domestic violence if he feels that he is losing that control. The mentally ill can also resort to violence as in their illness they perceive that their control is slipping away from them. The victims of stroke can also become very violent indeed. Does the Minister have any plans to end that sort of violence against women at this time, perhaps by bringing forward new legislation so that at least we can have the final say on the abusive acts that men perform against women?
Baroness Gale
My Lords, I begin by thanking the noble Baroness, Lady Hussein-Ece, for tabling this very important debate today, on the eve of White Ribbon Day. The debate has highlighted how difficult it is to eliminate all forms of violence against women and girls, but let us look at what is going on in the United Kingdom today. In our country, one in four women and one in six men is affected by domestic violence during their adult lives. In 2004, Professor Sylvia Walby estimated that the cost to the UK economy in terms of both lost productivity and direct costs associated with such violence is £23 billion a year. Tackling domestic violence should be seen as essential not just for reducing costs but also in order to remove a significant barrier to true equality, not just in the workplace, but in society as a whole.
The noble Baroness mentioned the statistics. Currently, two women a week are killed by a partner or ex-partner, which is a terrible disgrace. Some 60,000 women are raped every year, while trafficking and sexual exploitation affects thousands of women in the UK. The noble Baroness described that as a scandal, and I agree with her. Women who suffer from violence need help and support. This Christmas, families across the country will be under added strain as a direct result of the coalition cuts. It is imperative therefore that the Government should take a long hard look at the impact of their policies on women’s safety. The Government must ensure that cuts to police and local authority services do not mean that women who experience domestic violence are left vulnerable and without proper support.
Community police officers play a vital role in working with women in their community. Only a few weeks ago I had the opportunity of listening to three women community police officers whose work on the ground means that they are regarded as friends in the community. Women who need help are quite happy to speak to these policewomen who will keep an eye on them, which sometimes is all that they need. They are there to help and support them, and will take action if things get worse. These women police officers love their job and are really involved in the community. I hope that this vital work where the police can work directly with the community will not suffer in England. Only yesterday, the Welsh Government announced that they will be taking on a further 500 community police officers, which will be welcomed by the communities in Wales, especially by vulnerable women.
I perceive a worrying theme emerging throughout government, which seems to give little thought to issues concerning the safety of women and the disproportionate effect that policies will have on their lives. Women need to feel safe both at home and when they are out and about in the community. CCTV and street lighting play a key part in making women feel safe on their own streets. The Government’s savage cuts to local authority budgets and plans to roll back CCTV use by police and local authorities will jeopardise that safety.
The changes in the definition of domestic violence and admissibility of evidence in the legal aid Bill will mean that many women who are victims of domestic violence will not be eligible for vital legal aid support in the future. Last month, the Women’s Institute published a report, Legal Aid is a Lifeline: Women Speak Out on the Legal Aid Reforms, which spells out how women feel about the legal aid Bill and how concerned they are. In the past, women who have suffered violence and abuse over a period of years have had legal aid when they have needed it. The report makes grim reading.
Women are concerned about the gateways to legal aid, as spelled out in the Bill. Comments made in focus groups for the report say that the gateways fail,
“to reflect women’s experiences of domestic violence”.
Another concern highlighted that, if women are denied access to the legal advice that they need in order to leave a relationship, more women will be killed by violent partners. Women said that not just their safety but the safety of their children depends on legal aid. Legal aid is a vital lifeline for women and children to get out of abusive relationships. Does the Minister agree with women who fear that the removal of legal aid, except in very restrictive circumstances, could lead to violence against them increasing rather than decreasing, which is what we all hope to see? Will she agree to discuss this further with Ministers, not only to make them aware but for them to listen to the voice of women who have experience in these matters? I hope that Ministers will take a long hard look at the findings from this respected organisation.
This year, at the Labour Party conference, the shadow Home Secretary called on the Government to take decisive action and make stalking a separate criminal offence in order to provide greater protection for the majority of women, who make up 80 per cent of stalking victims. With the support of the National Association of Probation Officers and Protection Against Stalking, Labour has tabled an amendment to the Protection of Freedoms Bill which will create a specific new offence of stalking and will increase the maximum penalty to five years’ imprisonment. Scotland introduced a similar provision in June 2010, which will lead to an estimated 500 to 600 prosecutions—up from an average of seven stalking-related prosecutions a year. The amendment to the Protection of Freedoms Bill replicates this highly effective change to Scottish law and we hope that Members on all sides of the House will support it.
My noble and learned friend Lady Scotland had hoped to speak in our debate, but she is attending the funeral of the late Lord Gould. The work that she has carried out in the field of domestic violence is well known and she is an expert on it. Had she been here today, we would have learnt about an organisation she has recently established called the Global Foundation for the Elimination of Domestic Violence. I can do no better than quote from her notes when she launched the foundation. She said:
“Globally the problem of domestic violence is no less acute. Figures from UN Women show that violence against women and girls is one of the most widespread violations of human rights. Compared with the UK, globally up to six out of every 10 women experience physical or sexual violence in their lifetime. Furthermore, a study of 24,000 women in 10 countries by the World Health Organisation recorded that the prevalence of physical and/or sexual violence by a partner varied from 15 per cent in urban Japan to 71 per cent in rural Ethiopia, with most areas being in the 30 to 60 per cent range. Internationally much valuable work has been done by UNIFEM and now UN Women, but I believe we can all do more to address this issue.
The Global Foundation for the Elimination of Domestic Violence will be an invaluable tool for sharing knowledge, promoting good practice and providing the research expertise to help countries, organisations and people to come together to eradicate this deeply damaging problem … The Challenge for the future is to eradicate that abuse so as to limit the damage and dysfunction that is caused to, not only women, but their children, and indeed their partners. Stopping a potential perpetrator early on is far easier and more effective than dealing with the devastating consequences they may subsequently cause. I believe we have new opportunities to change the status quo. There is no doubt in my mind that we can, if we choose, eradicate domestic violence from our world. The real question is: do we choose?”.
We can do no better than take heed of the wise words of my noble and learned friend Lady Scotland. I look forward to the Minister’s response.
Baroness Verma
My Lords, I join all noble Lords in thanking my noble friend for opening this important short debate. I also thank all noble Lords who have participated. The wealth and quality of contributions demonstrates that ending violence against women and girls is an issue which resonates with us all. We must continue to work together with the voluntary sector, the police, local authorities and others to turn that vision into a reality. I hope that I will be able to answer some of the questions through my contribution and, of course, I will gather up towards the end what I feel I have missed out.
The Government take the issue of domestic violence very seriously. We believe that no woman should have to live in fear. No one should think that it is acceptable to be violent. No child should ever grow up in a home where violence is an everyday occurrence. As has been said, one in four women in the UK has been affected by domestic violence. According to a UN report, at least one in three women globally says that she has been beaten or sexually abused in her lifetime.
The Government are developing a number of events to support and promote this year’s International Day for the Elimination of Violence against Women. This will be an opportunity both to mark what has already been achieved and to build a profile of the existing and emerging work that we are trying to carry out to tackle what is often a hidden issue. This is all part of ongoing work. As noble Lords are aware, on 25 November last year, the Government published Call to End Violence against Women and Girls, which outlined four guiding principles: first, to prevent violence happening in the first place by challenging the attitudes and behaviours that foster it and to intervene early where possible to prevent it; secondly, to provide adequate levels of support where violence occurs; thirdly, to work in partnership to obtain the best outcome for victims and their families; and fourthly, to take action to reduce the risk to women and girls who are victims of these crimes and to ensure that the perpetrators are brought to justice.
A detailed range of supporting actions was published on 8 March this year. We have protected more than £28 million of Home Office funding until 2015 for specialist services to tackle violence against women and girls. This funding is going to support independent domestic violence advisers, independent sexual violence advisers and multiagency risk assessment conference co-ordinators, posts which are vital to support victims of domestic and sexual violence and abuse. Other vital services are also being funded, such as £900,000 of Home Office funding per year for providing support to national helplines, including the stalking helpline. This funding is in addition to the Ministry of Justice funding of up to £3.5 million per year for up to three years to rape crisis centres. Last week, the Home Secretary announced a £1.2 million programme over the next three years for services to support girls under 18 suffering rape and sexual abuse.
The Home Office is also running a media campaign to challenge attitudes among some teenage boys and girls and to send out a clear message that any abuse in relationships is unacceptable. Central government funding is one aspect, but we know that many organisations also rely on funding from local authorities. Local authorities also have to make some tough spending decisions, but we made sure that protecting vulnerable people, including victims of domestic violence, was a priority in the spending review. The Supporting People programme will give local authorities 99p this year for every £1 they had last year, so we take the view that there is no excuse for making cuts to these essential services.
We are working to change attitudes towards women. Earlier this month, we launched a campaign on social media and online channels to help stop teenagers becoming victims or perpetrators of abuse. The campaign shows that abuse is unacceptable, helps young people to recognise abusive behaviour and aims to empower them to challenge that behaviour. We are also providing training for professionals and front-line staff in areas such as the NHS to spot the early warning signs of and risk factors for domestic and sexual violence.
We are also piloting new powers for the police with domestic violence protection orders in three police force areas: Greater Manchester, West Mercia and Wiltshire. DVPs prevent the perpetrator returning to a residence or having contact with a victim for up to 28 days, for example, which gives the victim immediate protection and allows her breathing space to consider her options. We have directed that local areas and agencies should undertake a domestic homicide review after every domestic violent death to make sure that the right lessons are learnt to help stop future homicides and violence. The Government want constantly to look at new ways of protecting victims and preventing tragic incidents happening. That is why we recently published a consultation on a domestic violence disclosure scheme to seek views on whether to introduce a scheme for disclosing information about an individual’s history of domestic violence to a new partner.
We are very clear that our obligations to help women who are being abused do not stop at our borders so, for the first time, our strategy to tackle violence against women and girls also includes the innovative work we are doing internationally on this global problem. In addition to contributing £10 million of core funding to UN Women and £3.2 million to its women, peace and security programme, DfID’s business plan for 2011-15 now identifies violence against women and girls as a priority and commits DfID to pilot new approaches to prevent it. The UK national action plan commits DfID to helping 10 million women access justice through the courts, the police and legal assistance. As many as 25 DfID country officers are now pushing forward with integrating violence against women and girls programmes into their operational plans. These include interventions designed to respond to violence once it has happened as well as programmes designed to prevent violence through long-term attitude and behavioural change.
For example, in Somalia DfID is funding training for police officers and legal officials in dealing with sexual violence cases, as well as funding sexual assault referral centres which enable women to access free medical care, counselling and legal advice. Through the Social Inclusion Research Fund in Nepal, DfID has also funded a wide range of work tackling violence against women and girls, including a one-year action research project on sexual violence in schools. Lynne Featherstone MP, the Home Office Minister with responsibility for equality, visited Nepal from 12 to 15 June this year, partly because of these efforts to address widespread violations of women’s rights. The Minister met a broad range of people, including the former Prime Minister, Madhav Kumar Nepal. Two weeks ago I met the Italian Minister for Women and Equality. We had an incredibly constructive meeting, and the Minister also met the Home Secretary. We found that we are all committed to ensuring that we recognise our shared commonalities in wanting to tackle this very serious issue. I am glad that our European partners are working closely with what we are doing so that we have a consistent approach on how to tackle this really despicable form of violence. The UK is responding to the urgent need to reduce the impact of conflict on women and girls and to tackle sexual violence in conflict through its national action plan on UN Security Council Resolution 1325 on Women, Peace and Security.
Before I conclude, I will respond to some of the points raised by noble Lords. My noble friend Lady Hussein-Ece asked about the Council of Europe convention on domestic violence. The Government are strongly committed to combating violence against women and promoting women’s rights more broadly. The Home Secretary has commissioned a cross-Whitehall consultation and has identified that legislative reform in various complex policy areas will be necessary if the UK is to sign and ratify the convention. However, I reassure my noble friend and other noble Lords that the Home Office is continuing to work robustly with interested government departments to identify obstacles in the way of signature and ratification so that they can be addressed. My noble friend Lord Boswell was absolutely right to say that we take these issues very seriously, so we want to make sure that what we are signing up to will deliver exactly what it says on the can. We are working hard with our partners, but I reassure my noble friend Lady Hussein-Ece because I know she feels passionate about this, that we are making sure that when we sign up we will have something that we can deliver on.
My noble friend also mentioned Afghanistan, and I know that she and I share a common theme on this. The incident she mentioned was despicable and has to be openly condemned, but I assure her that our work in Afghanistan is quite robust and productive. Through our multi-donor Afghanistan Reconstruction Trust Fund, which helps to pay the salaries of civil servants, we have been able to pay 48,000 women teachers. That has aided 2 million girls to get to school. We know that progress looks as if it is slow, but at least it is in the right direction. I suspect that pressure from the UK and other partners will ensure that that progress continues.
I also pay tribute to my noble friend Lady Howells of St Davids—I call her my noble friend because I think she is—on her eloquent and thoughtful contribution. She set out graphically exactly what the problems are. We all recognise that there has to be a culture change and an attitudinal change. Like her, I believe that this is not about party-political point-scoring, but about us working collectively to ensure that we make progress on this issue. I hope that she will be reassured by my own contribution that the Government are taking some very serious steps towards those changes.
Of course I agree with the noble Baroness, Lady Gale, that women absolutely have to feel safe. They have to be confident that we as a Government are taking account of this issue. We have no control over the global economic condition, and she knows that we have to work against the backdrop of our own national deficit that needs to be addressed. But that does not mean that we will cut back on making sure that vulnerable people—women suffering from domestic violence—are protected. We take these issues seriously and, as I have said, we have dedicated resource funding for particular funding for particular projects to ensure that women will be protected and will have recourse.
The noble Baroness asked whether the definition of domestic violence has been changed. I can reassure her that it has not. Women will still have recourse to legal aid if they are the victims of domestic violence. We will have a long and full debate on the legal aid Bill so I do not want to take up my time discussing that here, although I am sure that we will have plenty to say to each other in the Chamber on that one.
The noble Baroness also asked about stalking. Yesterday my honourable friend Lynne Featherstone launched in Manchester a consultation on stalking. We take this issue very seriously.
I have gone over my time. If there is anything that I have not mentioned or have not responded to, I undertake to write to noble Lords. I thank my noble friend for tabling this Question because it is a very important subject.
Transport: London and the Regions
(12 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Empey
To ask Her Majesty’s Government what plans they have for improving transport links between London and the regions.
Lord Empey
My Lords, by coincidence a Question was asked in the Chamber earlier today which brought the issue of links between the regions and London very much to the fore. Perhaps I will take the opportunity to refer to that later. It is the case that for decades Governments have had regional development policies in place. Since the Second World War I believe that successive Governments have made it part of their policy to carry out works and to spend money on the development of the regions and their economies in order to bring prosperity to the entire country. One of the ways this was done—Europe did the same thing—was by putting into place meaningful infrastructure so that it was possible to get to and from particular regions. This is how our country has developed since the Industrial Revolution. We can go back to the canals and all sorts of developments; they were all about creating access to all sorts of centres of population from centres of production. The United Kingdom developed in this way over many decades.
We know that there are many proposals on the board for developing rail, the most obvious of which is the proposal to put in a high-speed rail link between Birmingham and London. There are other proposals for road development and for the east and west coast railways to be upgraded. All these things are part of the general infrastructure of our country. Indeed, the European Union through its regional development funds has provided significant amounts of money to improve infrastructure throughout the United Kingdom.
The debate I want to have now is on whether we are going to continue to ensure that the investment that successive Governments have made in trying to improve the economies of the regions is going to be sustained in these difficult times. It was clear from the Question this afternoon—and I found this from my experience in government as well—that when a business makes a decision about whether to expand, or an inward investor decides whether to come into a particular area, a key issue and one of the first things that they look for, after whether the relevant labour is there, is the infrastructure. Can they get goods, services and people in and out of a region quickly and effectively so that they can get worldwide access for their goods and services? Can they get executives, and of course the population in general, in and out? Now that we travel much more, one of the key considerations is whether, if you are in one of the regions, you have access to the major hubs, particularly air hubs. That way you can go on holiday or conduct your business as efficiently and effectively as possible.
There has been an enormous debate, particularly in the London area, over airports. We have things like Boris island being talked about and the proposal from Norman Foster for the Isle of Grain. There have been decisions from the Government and the Opposition not to proceed with the third runway at Heathrow. Therefore, air travel and traffic in general is the subject of extremely significant debate in this country at the present time. When the noble Earl replied earlier in the Chamber, he made the point, which I fully understand, that if you are looking at air route access from the regions for instance, there is potential for a public service obligation to get people from a region to the London area. However, from the evidence of the comments made around the Chamber this afternoon, we all know that that is not quite the issue.
The issue is very specific. Heathrow is the principal air hub in the United Kingdom and if you do not have meaningful access to Heathrow, you do not have meaningful access to other routes in and out of the UK. It is as simple as that. If you are going to market remote regions as places where people can do business, one of the first things they will look for is whether they can get to that place reasonably quickly, efficiently and cost-effectively. If you do not have access to your principal airport, that is likely to be a negative factor when an investment decision is being made.
My anxiety is this: as we know, in recent days British Midland International has come on the market and Lufthansa wants to sell it. There has been a bid from BA and we know that Virgin Atlantic is also interested. This has significance, not only for Northern Ireland, but for all our regions. I believe that earlier this year BMI removed its Glasgow service. I have no doubt that air routes, particularly for the Scottish Islands, Edinburgh, Glasgow, Newcastle, Manchester and Cardiff, are all vital. Therefore, how can we ensure that our regions will retain appropriate access to our principal airport at Heathrow, as long as it remains the principal hub?
It is not clear to me—and I would ask the Minister to respond to this at the end of this debate—how the Government can ensure that this access exists. I am afraid that it is not enough to leave it purely to commercial decisions, because everybody knows that landing slots at Heathrow and at other key airports are worth enormous sums of money. We are talking about hundreds of millions of pounds. It is also the case that airlines tend to make much more profit out of long-haul flights than from regional flights. It does not take a lot of imagination to see this. Indeed, the chief executive of the IAG group, Willie Walsh, has already indicated publicly that he would be looking at some of these slots for international use. Of course, Virgin Atlantic is an international carrier and not a domestic carrier. It therefore seems highly unlikely that, if it should become the owner of BMI, it would suddenly wish to take on and start producing a domestic service, when even its very name indicates that it is an international carrier.
It would seem that there is a genuine, clear and present threat to access of the key slots at Heathrow for the regions in general, and not simply for Northern Ireland. Northern Ireland’s case is more acute because we cannot get into our cars and drive directly to the south-east, nor can we get on a train to the south-east. We have either a ferry and a very long drive, or air access. To all intents and purposes, for meaningful business to be done, you need air access.
As was made clear in the House earlier, in many cases flights are exceptionally expensive if you want to get to the key hubs. I would say to the noble Earl that access to some of the peripheral airports in the London area might be fine for leisure customers and so on, but it is not suitable in all cases for the business customer. Anyone with anything to do with economic development will learn that access has to be as quick and as accessible as possible. It is therefore my intention to draw your Lordships’ attention to the critical importance of access as we move forward, and I would ask the noble Earl to address that in his response. I intend to take this matter further, if necessary through the route of a Private Member’s Bill, if the law is insufficient to allow the Secretary of State for Transport to have adequate direction powers over this matter. I feel strongly that we cannot sit back and simply wait until a crisis arises. We have to anticipate it and prevent it.
Lord Berkeley
My Lords, I congratulate the noble Lord, Lord Empey on initiating this debate. He has raised an issue which applies to many parts of the United Kingdom. Northern Ireland is a bit different. I did think of being helpful at Question Time today by suggesting to the Minister that since both parties had rejected the idea of a third runway at Heathrow, much of the domestic traffic could be taken by a high-speed line, and that it should be continued to Scotland and then tunnelled to Northern Ireland. But it might take a little bit longer and it might be a bit expensive. However it does exemplify the problems.
I am not going to talk about HS2 today. I thought I would focus on the connectivity problems of somewhere which is a pretty far-flung part of England—Cornwall, where I live. It is a great countryside and holiday destination, but it has high unemployment, low wages and few opportunities to change that. That is why it has objective 1 status, along with south Yorkshire, west Wales and the Valleys, and Merseyside. The noble Lord, Lord Empey mentioned the objective 1 issues. To quote from the European Commission’s definition, it is an area,
“where the gross domestic product is below 75% of the Community average”.
The problems associated with this and the regions are,
“low level of investment; a higher than average unemployment rate; lack of services for businesses and individuals; poor basic infrastructure.”
That applies to the areas I mentioned. Northern Ireland is actually a transitional one and not an objective 1 area, as are the Scottish Islands. To a greater or lesser extent they all suffer from that.
I go to the Isles of Scilly often, and there is a serious problem with transport there, but I will not mention that tonight because it needs much more debate and justifies another occasion. I shall go into the Cornwall problem in more detail. As the noble Lord, Lord Empey said, it is to do with economic regeneration and connectivity—just as the Government are arguing in favour of the HS1 line from London to the north, if I can put it that way.
It is interesting to compare the rail services between the four objective 1 areas I have mentioned at a time when the Government are about to renew the Great Western franchise. I believe the Minister said that the draft specification would come out in the new year. If we review those four areas and take the centres of Liverpool, Leeds, Swansea and Truro: to Liverpool the journey time to London is two and a quarter hours, and there is one train every hour; to Leeds, it is two and a quarter hours, and there are two trains an hour; Swansea takes three hours and there are two trains an hour, one of them changing at Cardiff. But to Truro it is four and a half to five and a half hours, with one train an hour and 40 per cent of them require you to change. The first train from Cornwall in the morning from Paddington gets to Truro at noon with one change, so you cannot really do a day trip for meetings.
I talked to someone this afternoon who deals with Scottish transport. He said that the growth in traffic within Scotland between the central belt and Aberdeen is quite amazing. I know it is not the Minister’s responsibility, but we can get examples from these places which indicate that more people are travelling by rail, as is happening in Cornwall. The growth in the branch lines and the main line in Cornwall has been amazing in the last year. On the Falmouth branch, traffic has increased by 67 per cent in a year, which is pretty incredible. All the branch lines in Cornwall are growing by 19 per cent on average, as is the main line up through the centre of Cornwall. That is good because it indicates that there is a demand. People see it as important for economic regeneration and clearly they want to use the railway, whether to go to school, university, hospital or work. It is great that it is being used.
I would urge the Minister to consider, in the new franchise for Cornwall, an hourly limited-stop service from Penzance, which would probably take four and a half hours—and I mean a limited stop—and in between services that stop at every station. There should be better branch line services, including Sundays, and when you get to rolling stock, the dear old 125s we have seen for so long could be improved and enhanced. They could have automatic door locking and toilet retentions, which they jolly well should have by now. They should last for another franchise. The noble Lord, Lord Bradshaw, might have different ideas, but I think it is quite possible.
It is time that our local services, be they mainline or branch line, stopped being third in the hand-me-down. You start off in the rich south-east and then go somewhere north—I apologise to those who come from the north—and then somehow Cornwall gets the old pacers that go clunkity clunkity clunk along the line. They are lovely trains, and they do have seats. I am encouraged that the county council in Cornwall is talking about possibly helping fund some of these trains themselves. I do not know how they will do it, but it is an interesting idea if they are able to do so. Because of the very long journey time we need to keep the sleeper, which is now extremely popular and means that you can get to a meeting in the morning.
In conclusion, I hope to have demonstrated that in rail connection terms, Cornwall is at the bottom of the four objective 1 areas in the UK. It needs, for the reasons given by the noble Lord, Lord Empey, a regular fast service to London, along with cross country services—they are possible and necessary. We need better capacity and frequency which can slot in and take the pressure off the pretty appalling local roads. It does not need much investment, it just needs a commitment to support objective 1. Of course, objective 1 will run out at some point during the next franchise and we do not yet know what the European Commission is going to propose for the next stage. But if there is any funding from that source to start the franchise off, that would be good.
There are many other projects that could do with the funding, but I hope that Ministers will take the opportunity to look at the position of regional transport. I have talked about Cornwall, but there are many other areas. Others can talk about Wales, and of course the Welsh Assembly Government deals with that. But it would also be nice to think that, within the franchise specification, the county councils could have a voice in a similar way that the Welsh Assembly Government do with the franchises that go to Wales. I look forward to the Minister’s comments and to his acceptance of all these lovely ideas for the new franchise specification which will come out in January.
Lord Bradshaw
I thank the noble Lord, Lord Empey, for introducing this subject. I worked in Northern Ireland for seven years and was an extremely frequent user of the services that were then provided by both BA and British Midland. Of course, BA has abandoned the route and the service has moved to Belfast City airport, but it is still a reasonable service, but, as the noble Lord, Lord Empey, said, it is difficult to envisage people seeking to do business in Northern Ireland unless there is a good quality, guaranteed service from London. Despite what the noble Lord, Lord Berkeley, said, Northern Ireland is particularly isolated because there are no alternatives. You can take the sleeper train to Cornwall or a train to Edinburgh or Glasgow. It may take longer than you wish, but the train takes you into the centre of the city. Also, for most places it is possible to get there and back in a day, provided that you are willing to get up early. When I went to Northern Ireland, I would get on a plane from London airport at 8.15 or 8.30 am, and I could be back in the evening having had a useful day over there.
In response to the Question asked in the Chamber earlier today, the noble Earl referred to the passenger service obligation and said that there was no such obligation so far as air transport is concerned. I take issue with him on that statement because passenger service obligations exist over a wide range of transport needs. The noble Lord, Lord Berkeley, will back me up when I say that on the German railway, there are periods when you cannot run trains through particular parts of the country because of the passenger service obligation imposed by the Länder Governments to stop such trains interfering with the commuter services around the big hubs.
There are passenger service obligations in the form of what are known as public service requirements which are imposed on most railway franchises. Franchisees are not free to cast a service aside. They have to maintain a minimum number of stops and a minimum speed of service. If you look at the services from Glasgow, Edinburgh, Inverness and Aberdeen to the Scottish islands, I think you will find that they are all supported by way of a PSO grant of some sort. So I would ask the noble Earl to go back to his department and say that the answer he was given this afternoon is not the whole story and needs thorough investigation.
In fact, as the noble Lord, Lord Empey, has said, the reason that IAG has put forward a proposition to purchase the slot and the airline, BMI, and the reason that Virgin Atlantic has shown interest is because of the international value of those flights. We have to ask ourselves, as a country, whether we set more store by people going to visit places such as Euro Disney and Florida than we do by the economic health of our own country. We are very good at talking down our own needs, allowing the market to dangle attractive propositions for us, and losing sight of what we are for. The United Kingdom as it stands is the whole of the United Kingdom, and Northern Ireland is part thereof.
I ask the Minister to go away, think carefully about what he has said today and seek further guidance because, on reflection, he will find he is wrong.
Baroness Scott of Needham Market
I, too, thank the noble Lord, Lord Empey, for securing this evening’s short debate. Many noble Lords will know that I live in Suffolk. It is not far away; Ipswich is about an hour and 10 minutes from London Liverpool Street, and Norwich, at the far end of the mainline, is two hours away. It is only 120 miles, but it takes as long as it does to get to Brussels. Nevertheless, many people in the east of England commute into London to work, and many have organised their lives around having a good and reliable rail service between East Anglia and London.
Until 2004 we were certainly well served, with Anglia Railways running intercity services and First Great Eastern running commuter services. From Ipswich into London, the competition between the two meant that our service continued to improve. In 2004, the franchise was merged and won by National Express, which called the new service One. It was an inauspicious start. Passengers on the platform would hear an announcement for the seven 20 one train. Was it the train operated by One at 7.20, was it the only train going at 7.20, or was it a train going at 21 minutes past seven? Nobody knew; there was utter confusion and within just a few months there was a huge rebranding exercise. Sadly, things did not get any better.
Passenger satisfaction with the service is the second lowest in the UK at 79 per cent. I am not surprised that the figure is so low, because I have observed a steady decline in basics such as cleanliness, the presentation of the trains and the catering service. I can tell the noble Lord, Lord Berkeley, that this particular part of the rich south-east does not get good rolling stock; it is very old, and when we get new train sets they are always hand-me-downs from other operators. The only redeeming feature is the cheerfulness and helpfulness of the staff who have to put up with all this and offer a good service.
The performance on the line stands at about 90 per cent, which is obviously a major concern for both passengers and the operator. The line is dogged by basic infrastructure problems such as track circuit failures, broken rails, faulty points and signal failures. When you add to those the usual problems such as weather, trespass, fatalities on the line and, most recently, cable theft, it makes travelling on the line highly unpredictable. For lengthy hold-ups, of course, we have the great Delay Repay system but, unlike all other train operators, National Express does not offer an automatic refund to its season ticket holders, who have to claim it. For the rest of the passengers, if they claim compensation, it comes in the form of vouchers, which can be used only in a ticket office. With fewer stations having staffed offices and passengers having to use machines and the internet, the compensation vouchers are useless. It is no wonder that passengers are fed up.
We were all pleased when National Express lost the franchise and we look forward to the new franchisee, Abellio, starting up on 5 February. It has the franchise for 25 months, until the results of the franchise review can be implemented. It is a good company, and most of us are pleased that it is taking over. The new 15-year franchise terms that come in after that are very welcome and will provide a much greater incentive for investment in the franchise.
I know that the DfT has announced that the new franchise will bring significant improvements to the cleanliness of the trains, passenger information, parking, cycling and public transport connections. However, unless there is serious investment in the infrastructure, Abellio and East Anglia commuters will face an uphill struggle. I wonder if the noble Earl can say anything about any work that Network Rail plans to improve the track and signalling on our line.
The contract for the new franchise was due to be signed today, and I guess it has already happened. So it was with some concern that I read an article in Modern Railways which suggested that Abellio are in discussions with the ROSCO, Angel Trains, to reduce the amount of rolling stock on the line. It is talking about reducing the capacity by 4,000 peak-hour seats. Can the noble Earl confirm whether this is correct? If so, how was the decision made and what assessment was made of current passenger numbers, future growth and the safety and comfort of passengers? In addition, I would be interested to hear whether the decision was made before or after the franchise was awarded to Abellio. If it was before, were the other two bidders in the process allowed to rebid on the basis of this reduced fleet?
This line is an essential part of the infrastructure of the east of England. It plays a hugely important role in the economic prosperity of our region and desperately needs long-term investment, both on the part of the rail operator and of Network Rail. In the short term, of course, it will be highly visible in next year’s Olympics.
Lord Davies of Oldham
My Lords, we are all grateful to the noble Lord, Lord Empey, for arranging this timely debate. As he indicated, we had a little dress rehearsal at Question Time on a limited dimension of this debate. I hope that the Minister has used the time between the dress rehearsal and the proper play to come up with more positive lines than I felt he gave us at Question Time. However, we did tease from him an important fact, which has been emphasised by the noble Lord, Lord Bradshaw, and addressed by the noble Lord, Lord Empey, about whether the Government had powers to act in a critical situation.
The initial bland response was that these were all commercial decisions regarding these crucial slots. BMI has gone and it may well be that the new owners—we do not yet know who will be the new owners of BMI—will, as the noble Lord, Lord Empey, indicated, find the new slots infinitely more economic and financially valuable if they are used for intercontinental travel rather than anything to do with a service to the regions, including the critical case of Northern Ireland.
The Minister developed that theme a little more positively during Question Time, but I hope he will take the opportunity of this debate to be positive about the relationship with the regions, as most of the speeches have asked him to be. That is the immediate critical dimension, not just Northern Ireland, although the Belfast service is probably the most critical service that one worries about. Edinburgh is anxious too, as the noble Lord is almost certainly well aware. As the noble Lord, Lord Bradshaw, indicated, the train is an alternative as far as Edinburgh is concerned, whereas it is not for Belfast. That does not alter the fact that if the service to Edinburgh were to be greatly reduced or even suspended, there would be a great deal of consternation among Scots, just as there is at present in Northern Ireland. That is the most critical issue that the Minister needs to address in his response.
The noble Lord, Lord Empey, was generous enough to broaden this debate’s title to include the regions, not just the specific issues of Northern Ireland. Other noble Lords have taken the opportunity of identifying the problems of ensuring that our regions are economically viable in these troubled times. The great danger is that their situation deteriorates more rapidly than the general economy of the country. They can ill afford to do that.
As my noble friend Lord Berkeley indicated, there are real problems in Cornwall and the south-west, and transport is an important dimension. There have been concerns about transport issues so far as Cornwall is concerned, and for that matter Devon as well, for a number of years. I do not doubt that the noble Baroness, Lady Scott, would identify Suffolk. I have the great advantage of enjoying exactly the same train company services as she does, but being a little closer to the south-east and on the line that also serves Stansted, there is a certain difference in the quality of service. However, nothing is more irksome than seeing classy trains, the rolling stock of the future—the rolling stock of today for people travelling to Stansted even though London commuters want those trains—going past at 60 miles an hour and never stopping at the intermediate stations. So we have our own small grievances. However, I recognise what she has said.
An illustration of just how urgently the Government have to put their thinking cap on in this area was brought home to me with an absolute jolt last year when they introduced the national insurance holiday for people being engaged by companies. That national insurance holiday was extended to all the regions except the south-east. Parts of the south-east winced at that. Try telling Hackney, Haringey and Tower Hamlets that they are enjoying the prosperity of the south-east, and they will tell a very different story. The extraordinary thing was that East Anglia was classed with the south-east as being one of the more prosperous areas. That is light years from the understanding that the noble Baroness probably has about living in East Anglia. Certainly if we had had anyone speak on behalf of Norfolk, they would reinforce the comments she made. I do not think that the Government are filling us with the greatest confidence that they have a deep understanding of the regional problem in the United Kingdom.
I turn to the particular issue of aviation, to which the noble Lord, Lord Empey, drew attention. This is the sharpest issue at present but, as we would expect, the initial response of the Government is to throw up their hands, perhaps with a little dip of the head in sadness, and say that this is a commercial world, that it is nothing to do with them and there is not much that they can do about it. That is largely their policy on aviation anyway, and that is why the third runway has gone by default. We recognise the fact that the third runway is not going to be pursued. It is a limitation on Heathrow, but that does not alter the fact emphasised by the noble Lord, Lord Empey, in his remarks. Heathrow is a hub, and that is why our view on High Speed 2 is that it has got to go via Heathrow. It must link with the hub of Heathrow because, as has been emphasised in the debate, for the regional and, in fact, for the whole of the UK economy, we have to recognise that for external investment and for businessmen arriving in this country, to say nothing of the tourist industry, which is not marginal in terms of our overall position, even without the third runway and the capacity limitations on expansion resulting from that, Heathrow is our critical hub. It will not do to say that people will be able to arrive with equal facility elsewhere. It may be the case with regard to some aspects of tourism, but it is not going to be the answer for businessmen pressed for time if in fact Heathrow is not included. So we want to see the high speed link via Heathrow, and we also think that there is absolutely no reason why the Government should not look again at the route and take on board the fact that they have had a small number of representations, probably from their own supporters, about the route through the Chilterns and that there may therefore be a different route which could be identified.
However the trouble at the present time is that almost every decision which the Government take looks as if it militates against the unions. When it comes to rail, for instance, the fact is that electrification of the great western line is going as far as Cardiff, but not as far as Swansea, which has a clear implication for the Welsh economy. We know the significance of Swansea. We did not know the significance of Swansea before this year. We know it now because it is playing so very well in the premier football league division, and therefore its status is growing in that respect in Wales. However the trouble as far as the Welsh economy is concerned has always been that Cardiff is the capital city, and has been not only the centre point but almost the potential choking-off point for investment beyond it. That is why it is so important to have effective communication links beyond Cardiff to Swansea, and we regretted that decision with regards to electrification. It is also the case that when it comes to the line up to Sheffield, Nottingham and Derby—important cities which clearly require as much assistance and development as they can get—no electrification is to take place there.
We are also well aware of the reduction in new rolling stock, the point that the noble Baroness, Lady Scott of Needham Market, emphasised with regard to East Anglia. It is the case that the previous Government’s projected figure of 1,400 new carriages for the east coast and great western services has been reduced to 600. These cutbacks have an impact upon the regional economies. So my charge against the Government is that unless the Minister can be more positive about the position than we have seen thus far, strategies which are being produced at the present time emphasise the north-south divide. They increase the difficulty in particular of those hard-pressed regions of which undoubtedly the southwest, and particularly Cornwall, is a very clear illustration, and they create enormous dismay in those parts of the United Kingdom which depend a great deal on air links, of which Northern Ireland is inevitably the outstanding illustration. I hope the Minister therefore will be as positive as he can be in response to these very important points made in this debate.
Earl Attlee
My Lords, I start by thanking the noble Lord, Lord Empey, for securing this debate. He put the position of Northern Ireland very clearly. I suggest to the noble Lord, Lord Davies, that my department has a very good understanding of regional needs. The Government’s vision is for a transport system that is an engine for economic growth, sustainable, safer and more secure. In delivering this transport system we will help to improve the quality of life in our communities. Transport networks, including those between London and the regions, provide crucial links that allow people and businesses to prosper. Simply put, increasing connectivity between our great cities and international gateways will facilitate the movement of goods and people and encourage economic growth right across the country. The Government’s plans, including targeted investment in forthcoming transport projects, will contribute to building the balanced, dynamic and low-carbon economy that is essential for our future prosperity. In answer to the noble Lord, Lord Empey, these investments will be sustained. Forecasts show that our country’s transport networks are becoming increasingly congested and that demand for travel is set to grow. This will further exacerbate congestion unless we act.
Let me remind the Committee of some of the action that we are already taking. The Government are providing additional Pendolino trains on the west coast main line. By the end of 2012 all the trains will be in service, thus increasing capacity on that route by around 20 per cent. Further to this, the intercity express programme will deliver a new fleet of 100 intercity trains—not carriages—to replace the existing diesel-powered 125 fleet. This will support and accommodate anticipated growth on routes, including those to the north of England, East Anglia, Scotland, Wales and the south-west. Introducing these trains, combined with infrastructure improvements such as the electrification of the Great Western Main Line, will see journey times fall and capacity increasing by more than 30 per cent during peak hours.
Lord Berkeley
The last announcement I saw from the noble Earl’s department said nothing about the IEPs going to East Anglia or to the south-west. The south-west was going to retain the 125s. Has the policy changed?
Earl Attlee
No, my Lords. It refers to the cascading of rolling stock. I will touch on cascading later. The noble Lord, Lord Davies, asked about rail electrification. The policy of the Government is to support a progressive electrification of the rail network in England and Wales, and we are looking at the costs and benefits of further electrification. We will continue to work with stakeholders to review these schemes and assess their affordability and value for money.
These improvements will play an important part in making better use of our existing network, but they will not be enough to keep up with increasing demand for rail travel. Additional intercity capacity will be needed in future and the Government cannot afford to ignore this problem. High speed rail provides the best way to meet that pressing need. The Government’s proposals for a national high speed rail network will add the capacity that we need, bring faster journeys between major towns and cities, improve reliability of journeys and drive modal shift from air and road to rail. Crucially, high speed rail is an investment in the future of our whole country, bringing economic growth and other benefits to the towns and cities of the Midlands and the north as well as to London. In answer to the noble Lord, Lord Davies, this will help to reduce the north-south divide.
My right honourable friend the Secretary of State for Transport intends to announce the outcome of the recent major public consultation and final decisions on the Government’s strategy for high speed rail before the end of the year. While the importance of rail networks should not be underestimated, the majority of journeys between London and the regions are made by road. The strategic road network connects all major English towns and cities, and links in to the road and motorway networks in Wales and Scotland. As your Lordships will be aware, the main road links between London and the regions are the M1, M4 and M6. During the current spending review period, seven schemes are planned on these roads. These will increase capacity and journey time reliability. Six out of the seven schemes are managed motorways, which, through a combination of techniques, including hard shoulder running and gantry mounted variable signing and better co-ordination, will provide around 210 additional lane miles during busy periods. It is also worth noting that three years of research on the M42 managed motorway pilot scheme, which was introduced by the previous Government, has shown that accidents have more than halved since hard shoulder running was introduced.
Air travel has become increasingly popular for domestic journeys. The Government recognise the importance of air links between London’s airports and our regional airports, not least because they provide fast and direct links between cities, which is exactly the type of service that both business and leisure travellers demand. A key part of the Government’s approach to aviation is to seek to create the right conditions for UK regional airports to flourish. The noble Lord, Lord Berkeley, talked about the problems of air travel in the south-east. I should like to draw the attention of the Committee to the fact that Newquay airport has scheduled services to London Gatwick and Manchester. New scheduled services to Edinburgh, Glasgow and the east Midlands are due to commence in 2012.
It is important to remember that in the UK, airlines operate in a competitive and commercial environment, and have done so for many years. Individual airlines determine the routes they operate, with take-off and landing slots at major London airports governed by European law. Currently more than 90 return flights are operated between Northern Ireland airports and London, and 600 each week between Scottish airports and London.
We want to see a successful and competitive aviation industry which supports economic growth and addresses aviation’s environmental impact. Aviation should be able to grow and play its part in delivering our environmental goals and protecting the quality of life of communities. Accordingly, the Government have made a commitment to produce a sustainable framework for UK aviation. In March we published a scoping document to begin a dialogue on the future direction of aviation policy, and we will issue a public consultation on a draft policy framework next year. We are also seeking to reform the economic regulation of airports, to put passengers at the heart of the regulatory regime, and to support investments in our airports.
I will try to answer as many questions of noble Lords in the time available. The noble Lord, Lord Berkeley, talked about rail travel from Cornwall. As touched on by the noble Lord, Cornwall County Council has an ambitious programme of local rail improvements. We are talking to the council and Devon County Council about devolving some responsibilities for rail to a group of south-west local authorities. A typical journey time from London to Plymouth is just over three hours, and around five hours to Penzance. The noble Lord, Lord Berkeley is correct in his analysis, but there is no easy way of addressing this issue. Trains on this route make frequent calls, so cutting out the number of stops would be one way of speeding up journey times. But the communities at which the trains stop value their calls, and withdrawing those would create difficulties for them.
The noble Lord also talked about what we know as the cascading of used rolling stock. The noble Lord will be well aware that the business cases for rail schemes, including electrification, often rely upon the process of cascading, and it is a complicated jigsaw that the department has to manage.
Lord Berkeley
May I correct the noble Earl? I entirely agree with him that the fewer stops there are, the faster the trains go, but leaving out stops will leave some communities missing. That is why I said that there should be a stopping service in between the fast ones every hour, to pick up the passengers from the communities in between.
Earl Attlee
I am grateful to the noble Lord for that elucidation. The noble Lord asked whether the minimum service levels will be based on the current First Great Western timetable. The proposed approach to the specification of the services for the next Great Western franchise has yet to be developed and would anyway form part of the public consultation.
Many noble Lords have talked about the problem of slot allocation at Heathrow and public service obligations. Perhaps it would be helpful to the Committee if I carefully reiterated the positions. It would be open to the Northern Ireland Assembly to apply to the Secretary of State for Transport to impose a public service obligation on an air route from Northern Ireland to London, should it feel that a case can be made which satisfies the EU regulation on PSOs. If approved, this would permit slots to be ring-fenced at a London airport. As I said at Question Time, there is no other mechanism for the Government to intervene in the allocation of slots at Heathrow or other London airports.
It is important to note that EU regulations state that the PSO must be between two cities or regions and not between individual airports. Therefore, any PSO would have to take into account services to all five London airports. Other European states have exactly the same problems. You may have a region in France that is slightly deprived, and it might want to fly direct to Charles de Gaulle, but it cannot. It might, perhaps, have to fly to Orly and not have the benefit of going to a hub airport. We do not necessarily have a unique problem.
The noble Lord, Lord Empey, suggested that we cannot leave this issue to the commercial market. It is important to note that any PSO on a service to Heathrow could be subject to legal challenge from other airlines. The noble Lord, Lord Bradshaw, talked about the requirements in franchise rail operations, but he needs to remember that airline operations are commercial operations, not franchise operations.
Lord Bradshaw
Will the Minister pause there to think of what happens with the services to the Highlands and Islands of Scotland? They are not commercial. They are supported by a PSO agreement.
Earl Attlee
My Lords, I was just coming on to that point. The noble Lord pointed out that PSOs already exist on air services to Scottish islands from Aberdeen and Inverness. He is correct. They are supported by the Scottish Government as lifeline services that otherwise would not be economic to operate.
Lord Bradshaw
They are lifeline services, but is Northern Ireland’s remaining air service to Heathrow not in the same category because, if it disappears, the region will be in real trouble? This is not a trivial point. You have got to concern yourself with regional development. Next year, Londonderry will be the European city of culture. Perhaps the air service will disappear at the same time.
Earl Attlee
My Lords, I understand what the noble Lord is saying, but BMI has not been sold, and no services have been stopped yet. I think he is going ahead of himself slightly.
The noble Baroness, Lady Scott, asked about the Greater Anglia (Short) franchise and customer satisfaction. Although this is a relatively short franchise, she will recognise that Abellio has offered commitments that will improve customer experience. She also asked several other very detailed questions, and I fear that I will have to write to her on those points.
Abellio plans to continue to run all those services that are crowded today or are likely to become crowded in the next five years in the formation planned by NXEA. In almost all cases where crowding occurs today, the trains concerned are being operated at the maximum formation allowed by the infrastructure, so it is an infrastructure limitation, not a rolling stock limitation.
Finally, the noble Lord, Lord Empey, touched on the Thames estuary airport. We welcome the input from the mayor and Lord Foster, and their suggestions will be considered alongside the many other contributions about our future aviation policy. However, such a project would be hugely complex. Detailed consideration would be needed on a range of issues, including airspace capacity, safety and access to the airport as well as costs and funding.
Lord Empey
I know that my colleague in Northern Ireland, the Transport Minister Danny Kennedy, has been to the European Parliament and spoken to the chair of its transport committee, who in turn has spoken to Lufthansa about the slot issue. This is a pertinent issue. I understand the legal difficulties the Minister is in, but perhaps it is something that with co-operation between Brussels and ourselves we have in our own hands to resolve.
Earl Attlee
I am sure that noble Lords will keep a very close eye on this issue.
The noble Lord, Lord Empey, suggested that he would return to this matter on a future occasion, and I look forward to all such debates. In conclusion, I thank him for this short debate and for all his efforts in encouraging improved transport links between London, the regions and Northern Ireland.
House of Lords
(12 years, 5 months ago)
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Royal Assent
(12 years, 5 months ago)
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Phone Hacking
(12 years, 5 months ago)
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Lord Grantchester
To ask Her Majesty’s Government what measures they will take to prevent journalists from citing the protection of sources as a means of avoiding prosecution for illegal activities such as phone hacking.
Baroness Rawlings
My Lords, protection of sources is not a defence against prosecution of any illegal act. If journalists, like anyone else, break the law, they should expect, like anyone else, to be prosecuted.
Lord Grantchester
Given that the Bribery Act, which places an obligation on companies to put procedures in place in relation to the actions of their employees, came into force in July this year, what steps do the Government intend to take so that it is possible to discover whether owners or editors of newspapers have authorised or paid third parties for illegal activity? Will the Government ensure, through regulation or otherwise, that owners and editors are required to disclose information relating to such authorisation of payments?
Baroness Rawlings
My Lords, the noble Lord, Lord Grantchester, makes a very valid point. The most important point is that bribery and corruption are extremely serious offences, which the Government believe should be punished with the full force of the law. Journalists see themselves as having an ethical duty to protect their sources, and that is enshrined in the PCC’s code of practice. It is likely that anonymity is an important consideration for some people and that the provision of anonymity for the informant has led to stories that are in the public interest. Of course, journalists must also abide by other clauses of the code. Foremost among those is accuracy, and an editor must be sure that a story is accurate regardless of source.
Lord Fowler
My Lords, on phone hacking generally, has my noble friend noticed that there is now a campaign to deny the importance of the Leveson inquiry by some in the press who say that the matter should be left to the press to sort out for itself? Is it not the past failure of the press to take action that has led to this independent inquiry? Is its importance not further underlined by the mounting evidence that the phone hacking scandal extends beyond the News of the World to other papers?
Baroness Rawlings
My Lords, my noble friend is very expert in these matters and has gone to the core of the subject. The failure of some of the press to abide by the law has been evident. Regarding the Leveson inquiry, we all recognise the importance for our democratic process of a free and effective press that acts with integrity. That is what we all want. However, at the same time, we have to acknowledge that certain parts of the press have not abided by the law or the self-regulatory code to which they voluntarily signed up. As my noble friend says, it is the failures that the Leveson inquiry will seek to address.
Lord Collins of Highbury
My Lords, in view of the allegations in relation to unlawful payments made to serving police officers, can the Minister confirm that the Bribery Act 2010 applies with equal force to the proprietors and owners of newspapers, and indicate what steps, if any, Her Majesty’s Government intend to take to ensure that adequate procedures are put in place to prevent corrupt practices?
Baroness Rawlings
My Lords, we are all against, obviously, corrupt practices, and the making of payments to police officers by journalists is a serious crime. These allegations are being investigated by the Independent Police Complaints Commission. The IPCC is experienced in investigating allegations of corrupt behaviour by police. These range from allegations of corrupt relationships, misuse of public funds and abuse of powers to inappropriate sexual relationships. This is the first time that the IPCC has overseen an investigation concerning allegations of police payments specifically from journalists.
Lord Stoneham of Droxford
Assuming that a strengthened Press Complaints Commission emerges from the current public debate, will the Government consider withdrawing the VAT exemption on those newspapers which do not join the new regulation process?
Baroness Rawlings
My Lords, I have read about that and at the minute we are waiting for the Leveson report, which will be giving us details and assessing that point.
Baroness O'Cathain
My Lords, if there is any truth in the suggestion—I am sure that there is truth in the suggestion—by my noble friend Lord Fowler that there is a campaign against the Leveson inquiry, can the Government do anything to stop it? This seems to undermine the whole principle of a free press and free expression.
Baroness Rawlings
My Lords, we are not aware of a campaign against Leveson or his inquiry, which started yesterday. We wish it the best passage, because it is very important, as will be the Communications Act that we will be discussing here.
Baroness Farrington of Ribbleton
My Lords, will the noble Baroness define the difference between public interest as a defence and prurient interest? The noble Baroness seemed to imply that public interest could be used as a defence against an allegation of breaking the law.
Baroness Rawlings
My Lords, regarding public interest, editors are responsible for the truth and for what is published in a newspaper, not the source of the story. If a story is not accurate, a range of options is available: the editor, the PPC or the courts, depending on the nature and the scale of the inaccuracy. We do not believe that additional safeguards on this point are necessary, but of course we will await the results of Lord Justice Leveson’s inquiry into the wider ethics of the press.
Lord Inglewood
My Lords, I declare an interest as chairman of a local newspaper company. Would my noble friend the Minister not agree two things: first, that the bribery legislation applies equally to all citizens in this country, whether they are journalists or whether they are not; and secondly, that the decision whether to prosecute when evidence of a crime is available is something which is vested in the prosecution authorities?
Baroness Rawlings
My Lords, my noble friend goes really to the heart of the matter and brings out a very important point, which was stated clearly by my noble friend Lord Patten in his speech on Sunday, in which he said that the suggestion that a possible solution to the current crisis in confidence in the media today, which seems to be present as well in your Lordships’ House, would be a form of the Hippocratic oath,
“a watermark to distinguish proper, ethical journalism from the mass of intrusive and unregulated material”.
Airports: Heathrow
(12 years, 5 months ago)
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Lord Glentoran
To ask Her Majesty’s Government, in the light of the possible sale of British Midland International, what they are doing to protect Heathrow landing slots for flights to and from Northern Ireland.
Earl Attlee
My Lords, the allocation of take-off and landing slots at Heathrow is governed by EU law. We recognise the economic importance of air services from the devolved Administrations to Heathrow. However, airlines face competitive pressure to use their slots for the most commercially viable routes. Ultimately, decisions about which air services operate between UK airports are commercial ones for airlines to determine.
Lord Glentoran
My Lords, I thank the Minister for his reply. The background to this Question is that BMI is being sold. It is vital for the Northern Ireland economy to have a regular professional service from Heathrow to Belfast. Does not the Minister agree that the fortunes of a part of the United Kingdom should not be in the hands of an airline or its executives? What will Her Majesty’s Government do to ensure that Northern Ireland is not deprived of Heathrow landing slots, which are vital for badly needed inward investment into the Province?
Earl Attlee
My Lords, the proposals for the sale of BMI are a commercial matter for its owner, Lufthansa. There is no indication that there will be any changes to the current level of BMI services from Belfast City Airport to London Heathrow. A number of other airlines also operate services between Northern Ireland’s airports and London airports. Existing services also operate from Belfast International Airport to hub airports in northern Europe.
Lord Kilclooney
My Lords, does the Minister recall that there used to be two airlines flying from Belfast to Heathrow—British Airways and British Midland? However, British Airways withdrew that service and allocated the slots elsewhere. If it now takes over British Midland, will the Government do nothing to stop British Airways withdrawing those slots from the Belfast flight?
Earl Attlee
My Lords, at the moment we do not see a problem. However, it would be open to the Northern Ireland Assembly to apply to the Secretary of State for Transport to impose a public service obligation on an air route from Northern Ireland to London, should the Assembly feel that a case can be made which satisfies the EU regulations on PSOs. If approved, this would permit slots to be ring-fenced at a London airport. However, there is no other mechanism for the Government to intervene in the allocation of slots at Heathrow or other London airports. We do not see the need at the moment to impose a public service obligation.
Lord Kinnock
Does the Minister recognise that it is important to sustain the Heathrow slots for Northern Ireland simply because Heathrow is the most substantial hub? In the case of sustaining the economic interests of Northern Ireland, it is important that there is an absolutely dependable service from that hub into the Province. That is in the interests of the whole of the United Kingdom. Therefore, will the Minister maximise the use of public service obligations to ensure that when Lufthansa disposes of British Midland the slots will not disappear into a black hole as well?
Earl Attlee
The noble Lord is quite right in his initial analysis, with which I agree. However, at the moment we do not see a problem, and for that reason we would be unable to impose a public service obligation.
Lord Alderdice
My Lords, my noble friend may not see a problem, but will he take it from me that those of us from Northern Ireland who are users of the service do share the anxieties raised by the noble Lord about British Airways’ previous treatment of Northern Ireland? This is not just a question of the economy of a company but the economy of a part of the United Kingdom. Having slots to other airports is simply not an adequate replacement. Economy flexible flights with British Midland now cost well in excess of £500 return. It is clear that it is making a profit. Therefore, it does not seem reasonable to assume other than that the Government should take some responsibility and assist the Northern Ireland Assembly rather than simply leave this matter to the Assembly to deal with on its own.
Earl Attlee
My Lords, I hear what my noble friend says. There is a further difficulty with the public service obligation, which is that one can be imposed only if there is a difficulty with services to London as a whole, as a region. If there is a problem with services to London as a hub airport, that would not justify imposing a public service obligation, so at the moment it is difficult to have the effect that the noble Lord seeks.
Lord Davies of Oldham
My Lords, the House should have taken solace from the fact that the Minister has added to his very negative response in his first Answer by indicating that the Government can act if it proves to be necessary. Will he recognise that of course the interests of Northern Ireland are very much involved in this issue, but that it is not just Northern Ireland and Belfast? Edinburgh, too, has its anxieties about this situation. Is he aware that Willie Walsh, the egregious head of IAG, in welcoming the potential opportunities from this purchase, stated that in fact the great business opportunities, of course, lay with using these slots for long-haul aircraft, not for serving parts of the United Kingdom?
Earl Attlee
My Lords, I can definitely feel the heat from your Lordships. The sale of these slots to BA will increase the share of BA’s parent, IAG, of all Heathrow airport slots from 44 per cent to around 53 per cent, although IAG points out that even after the acquisition of BMI’s slots, its percentage of Heathrow slots would still be smaller than Lufthansa’s 60 per cent slot holding at Frankfurt.
Lord Forsyth of Drumlean
Will my noble friend give an undertaking to look at this issue more carefully? The noble Lord is perfectly correct that this is an issue not just for Northern Ireland but for Scotland, where the flights from Glasgow and Edinburgh have been greatly reduced, the fares are very substantial and it is undoubtedly the case that British Airways would use these slots for more lucrative transatlantic flights. It is no good looking at London as a whole. The point is that Heathrow is the hub from which it is possible to do business internationally.
Earl Attlee
My Lords, commercial aviation is a global business. This is reflected in the fact that airport slots in EC countries are managed within regulations that follow the worldwide slot guidelines determined by IATA. The EU slot regulations seek to ensure that non-discriminatory and transparent procedures for slot allocation exist across member states.
Immigration: Students
(12 years, 5 months ago)
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Lord Clement-Jones
To ask Her Majesty’s Government what evaluation they have made of the impact of the new student visa rules on the intake of overseas students in United Kingdom universities for the academic year 2011–12.
The Minister of State, Home Office (Lord Henley)
My Lords, the Government’s impact assessment concludes that the student visa reforms will have no impact on the number of visas issued to international students to attend UK universities either in the academic year 2011-12 or in subsequent years.
Lord Clement-Jones
My Lords, that shows that the impact assessment must be flawed. The early indications are that they are being heavily impacted, particularly from India, where the number of students is 20 per cent to 50 per cent down, as a result probably of the withdrawal of the post-study work route visa. Will the Government reconsider their policy before treating students as economic migrants and irreparable damage is done both to the finances and the reputation of UK universities?
Lord Henley
My Lords, I do not accept what my noble friend had to say, and I would refer him to the comments made by Universities UK about the reforms, saying that they will allow British universities to remain at the forefront of international student recruitment. I also refer my noble friend to the latest figures for non-EU university student applications for the 2012 academic year which are mostly for medical, dentistry, veterinary and Oxbridge courses, and those show an 8.8 per cent rise.
Baroness Prashar
My Lords, does the Minister agree that the Government should introduce a transitional measure for those students already in the UK whose colleges closed either as a result of action taken by the UK Border Agency or because many private and public sector providers voluntarily relinquished their licence because the system became too burdensome? It is estimated that there are some 5,000 internal students with no course, no sponsor and the majority have lost their fees. Would it not be more humane and less damaging for the reputation of the UK if those already here could retain their current visas and work entitlements while moving to an alternative sponsor? This would avoid students, particularly those from poor countries, staying here illegally.
Lord Henley
My Lords, we want to make sure that we continue to have high-quality students coming to the UK, and that is why I am very grateful for the support of Universities UK for the reforms that we are proposing. What we do not want are bogus students coming over for what might be called rather dubious or possibly non-existent institutions. As I have made clear, what we have done certainly has the support of Universities UK and will benefit universities in the UK, although it might not benefit what I would describe as the somewhat dubious institutions that have been acting in this field. We want to clamp down on the abuses of the immigration system that have crept in here.
The Lord Bishop of Norwich
My Lords, theological and bible colleges are generally small institutions but highly cross-cultural in character because of their international students. The chances of these international students abusing their immigration status seems tiny, yet these institutions have to go through the same procedures as large universities at a very high and unsustainable per capita cost. Can the Minister suggest how we might have a size-sensitive system which prevents these institutions operating with no international students at all?
Lord Henley
My Lords, I would hope, as I think would the whole House, that most theological colleges are reputable institutions. However, if some of them are facing problems because of their size, I will take away the right reverend Prelate’s point and have a look at it. As I said, we want to make sure that we get the right students into the right institutions but get rid of the abuse that has crept into the system.
Lord Turnberg
My Lords, is the noble Lord aware of the particular problems faced by overseas medical students? There are more than 3,000 of them in the UK at the moment and they have problems when they want to bring a spouse or children here. That is to say nothing of the fact that we have included these 3,000 in the calculation of the number of doctors that we are likely to need. Is this not counterproductive?
Lord Henley
My Lords, we have tightened up on dependants coming in, but only dependants wishing to study for first degrees. Dependants will still be able to come in for postgraduate courses. I will look at the point that the noble Lord makes in relation to medical students but I am not aware of a fall in the number of medical applications. As I said in answer to the first supplementary question, we seem to have seen a rise over the past year.
Baroness Brinton
The UK Border Agency has recently decided that it will no longer accept guarantees from UK higher education institutions for UK-based packages, including part-time work and bursaries. We do not understand the reason for this. Can the Minister explain why the rules have changed, especially given the soundness of most universities in this country?
Lord Henley
My Lords, we accept that most of our universities are proper, reputable institutions, and that is why we have given universities additional flexibility in some matters. However, I will look at the specific point that my noble friend has raised. In the main, UK universities are fine on this; the abuse occurs elsewhere.
Lord Hunt of Kings Heath
My Lords, the new student visa rules have placed a further responsibility on the UK Border Agency at the same time as it has received a 20 per cent cut in its budget for a four-year period. Is the noble Lord confident that the UKBA has the resources to do the job that it has been given?
Lord Henley
My Lords, yet again the noble Lord seems to be denying the need to make cuts as a result of the profligacy of the party opposite. Yes, we are confident that the UKBA has, and will continue to have, sufficient resources to deal with the job that it has. No doubt I shall be dealing with these matters later when the noble Lord raises a somewhat spurious amendment to the terrorism Bill.
Lord Naseby
Is it not enormously welcome that Her Majesty’s Government have taken action to close these bogus colleges, which defrauded young students and were useless so far as the UK was concerned? Perhaps I may suggest to my noble friend that he contacts the high commissioners for the genuine Indian sub-continent students to see whether over the next year we can help those genuine students to come here.
Lord Henley
I thank my noble friend for that contribution. I remind him that, as a result of this measure, we will see a reduction in net migration numbers of some 60,000 a year. We are committed to this and will want to go further in due course.
Iran
(12 years, 5 months ago)
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The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, this report from the International Atomic Energy Agency clearly indicates that Iran has worked on developing nuclear weapons and that some of this work is continuing. We support the production of this report by the agency and call on Iran to take the necessary steps to assure the international community that it is not pursuing a military nuclear programme. We will be pressing for strong action when the agency’s board of governors meets later this week.
Lord Luce
My Lords, since, as the Minister indicated, there is growingly credible evidence that Iran is developing a capability to introduce and develop nuclear devices, and against the background of a dangerously volatile region in the Middle East, would the Minister agree that we should work extremely hard to persuade China, Russia, Israel, the Arab nations—all of us, in all our interest—to work in a concerted fashion to introduce tougher international sanctions that hurt Iran, but keeping literally as a last resort the possibility of military measures?
Lord Howell of Guildford
Yes, I would certainly agree. We are all—and “all” means the entire planet—threatened by nuclear proliferation and the flouting of the proliferation regime which Iran has constantly demonstrated. The noble Lord is absolutely right that although we have an unprecedented degree of sanctions, and are thinking of more sanctions and more targeted sanctions, as long as China tends to be undermining these—and, to some extent, Russia as well—those sanctions are obviously weakened in their effect. So, he is right that we all have to work together to halt a threat that is really to the entire pattern of humanity.
Lord Alton of Liverpool
My Lords, in considering the kind of sanctions that might be imposed on Iran, will the Minister say whether that will include surveillance technology—the sort which has been sold to Iran by the British company Creativity Software, and which has been used in the past against democracy activists and human rights campaigners, leading to their systematic torture? What pride does it bring to this nation that we have been selling such technology to Iran?
Lord Howell of Guildford
We are discouraging every kind of trade and business with Iran, not only those covered by sanctions but also investment by oil companies, for instance, and a whole range of others as well. The specific product that the noble Lord mentioned is one that I will certainly examine, but my overall understanding is that we are discouraging in every possible way all areas of trade with Iran, over and beyond both the EU and the US sanctions.
Baroness Falkner of Margravine
My Lords, does my noble friend agree that, alongside the 3+3 talks, it would be very useful for the UK to advocate re-examining the Turkey-Brazil option which was on the table some months ago in order to keep open the door for future negotiations? Does he accept that unilateral military action by any state in a pre-emptive fashion would be deeply dangerous to the region as it stands today?
Lord Howell of Guildford
My Lords, I certainly accept the second point. On the first point about the Turkey-Brazil initiative, that was an interesting initiative but it did not actually deal with the major problem, which we have here, of proliferation. It was focused, as my noble friend knows, on the enrichment processes and the obtaining of enriched uranium which might be necessary for weapons-grade purposes. So, without saying that the Turkey-Brazil initiative was the answer, we certainly recognise that it might be part of the answer in the future.
Lord Triesman
My Lords, by an ironic twist of fate I now get to ask the noble Lord the very question that he asked me some short while ago. After I repeated the FCO brief on that occasion I tried to have an exchange that was of more use to the House. If there are to be further sanctions that are capable of having an impact on Iran’s trajectory, what is the Government’s view on the sort of sanctions they should be, the prospects for succeeding in achieving them at the UN, and the timeframe?
Lord Howell of Guildford
I hope that I can give as good an answer as the noble Lord did when I asked him the question. It might be even better. We are going to press for further sanctions but one has to be realistic, as I indicated in answering the noble Lord, Lord Luce. If the sanctions are undermined by trading activity and the import of products from China and other countries then they are bound to be limited in effect. However, we believe that sanctions of a financial kind can be tightened still further to make it ever harder for the mullahs and the Iranian Government to get the revenues for some of their oil and oil products. We also believe that more targeted sanctions can be developed and various loopholes can be closed. All these things can be done and probably will be done. However, the bigger issue is how the world unites as a whole to put pressure on the regime to cease to flout the non-proliferation regime and the rulings and the resolutions—six of them—of the UN Security Council.
Lord West of Spithead
My Lords, the elephant in the room seems to be the use of military force, as has been mentioned, though I quite understand why that has been left on the table. However, does the Minister agree that if you make a threat you have to have the willingness to carry it out? It seems to me that we are sleepwalking towards a situation where we may well find ourselves as a nation involved in military action the full implications of which we have not thought through. Does the Minister believe that that is a real risk?
Lord Howell of Guildford
The risks are there on all sides. The noble Lord says that we have not thought through the implications but one can think them through all too clearly. One has only to speculate for a moment on what would happen if Iran were to mine or threaten to mine the Straits of Hormuz: it would double the oil price straightaway. That is a major danger and there are many others as well. The implications have been thought through. As the noble Lord recognises, however, the message from Iran is that all options remain on the table. Meanwhile we concentrate on negotiations and ever tighter sanctions and we hope to achieve an effective outcome. However, the reality must be presented to Iran: the options, of all kinds, are on the table.
Bank of Ireland (UK) plc Bill
(12 years, 5 months ago)
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Statistics and Registration Service Act 2007 (Disclosure of Pupil Information by Welsh Ministers) Regulations 2011
(12 years, 5 months ago)
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Lord Wallace of Saltaire
That the draft regulations laid before the House on 19 July and 15 September be approved.
Relevant documents: 28th and 29th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 9 November.
Terrorism Prevention and Investigation Measures Bill
(12 years, 5 months ago)
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16:14 - Division on Amendment 1 - Ayes: 79 / Noes: 273 - Amendment 1 disagreed.
19:02 - Division on Amendment 53 - Ayes: 165 / Noes: 168 - Amendment 53 disagreed.
Lord Lloyd of Berwick
Lord Lloyd of Berwick
My Lords, we are all agreed that the measures which can be imposed by the Home Secretary under Clause 2 could place serious intrusions on personal freedom. On the second day in Committee the noble Lord, Lord Rosser, referred to the “profound impact” on the liberty of the individual of these exceptional measures. He was right. He might perhaps have added that these restrictions are by no means temporary. Of the 12 individuals currently subject to control orders, one is already in his fifth year of being subject to a control order and four have already been subject to control orders for between two and four years. It is my case that restrictions of that severity should not be imposed by the Home Secretary—more particularly when the individuals concerned have not been charged with or convicted of any offence—and it is right and proper that they should be imposed by the courts. That is the purpose of the first amendment. There are a number of subsequent amendments dealing with the same point, but this debate will turn on the first amendment, and the position is very simple.
The amendment has already received strong support from the Joint Committee on Human Rights. That report came too late to be considered in Committee by the noble Lord, Lord Henley, as fully as he would have wished. As the report presumably contains the Government’s best case for leaving Clause 2 as it stands, I shall deal with it in some detail. In their original response to the concerns of the Joint Committee on Human Rights, the Government relied upon,
“a well-established principle across our legal system of imposing”,
preventive restrictions,
“to protect the public from criminal behaviour”.
They cited numerous examples of such preventive orders: serious crime prevention orders, anti-social behaviour orders, risk of sexual harm orders and many others of the same kind. In every one of those instances, the order is made by the court, as it should be, and not by the Executive. That particular principle, although certainly well established, does not help the Government in any way in relation to Clause 2 and this amendment; indeed, it favours the amendment because it illustrates the way in which preventive orders are habitually made.
In their more recent response, the Government rely upon a different well established principle, that in national security cases it is the Home Secretary who makes the decision and not the court. What is the evidence of this other, and more restricted, principle? With one exception, which I will of course come to, the only example given by the Government in their response was the power of the Home Secretary to deport individuals on national security grounds. That was the power to which the noble Lord, Lord Carlile, referred in Committee. I am sorry not to see him in his place today. When I asked him whether he would accept that there is a distinction between deporting foreigners and deporting British citizens, he described the distinction I was seeking to make as “casuistic”, so I feel I had better make that distinction good.
The power to deport is contained in Section 3(5) of the Immigration Act 1971, an old and very familiar provision. It specifically excludes deportation of British subjects. One might ask: how could the Home Secretary claim the power to deport British subjects? Where would she deport them to? The same applies to the other example given by the noble Lord, Lord Carlile, that the Home Secretary has the power of deprivation of citizenship. That power, which is contained in Section 20 of the British Nationality Act 1948, applies only to those who have obtained British citizenship by fraud and other similar such cases. It has never applied—and could never have applied—to British citizens by birth. Therefore, we can forget about deportation orders and deprivation of citizenship orders made by the Home Secretary as being a valid precedent. I am somewhat surprised that that was even mentioned in the recent government response to the Joint Committee on Human Rights. That perhaps shows the extent to which the Government have had to scrape the barrel to find any precedent at all for Clause 2 of the Bill.
Lord Phillips of Sudbury
I am sorry that I did not give the noble and learned Lord leave of this question. I am entirely in sympathy with what he said in moving the amendment, but can he tell the House what happens if, as his amendment says, the court rather than the Secretary of State may,
“impose specified terrorism prevention and investigation measures”,
and if the court has to consider whether conditions A to C are met? Condition A reads that,
“the Secretary of State reasonably believes that the individual is, or has been, involved in terrorism-related activity”.
Does that then mean that the court has to make the order, but it has to consider whether the Secretary of State reasonably believes—or should there ideally be a removal of “Secretary of State” in Clause 3(1) and replacement by “the court”? I hope that I have made myself reasonably clear.
Lord Lloyd of Berwick
The noble Lord has been very clear. I fully understand—and that is exactly what is provided in a subsequent amendment. I think that it is Amendment 3. You have to read Amendment 1 with an amendment that strikes out the words,
“the Secretary of State reasonably believes”,
in Clause 3(1). So it does tie up.
Lord Goodhart
My Lords, I have supported the statements of the noble and learned Lord, Lord Lloyd of Berwick, at Second Reading and in Committee. I will take the same position yet again on Report.
I agree that terrorism is a great threat to the United Kingdom and that steps must be taken to prevent it. I agree that those steps may include civil penalties that restrict the activities of those who are probably involved in terrorism. But there are conditions that should be applied to those requirements and included in this Bill. The most important of those conditions is that the rule of law must be applied and observed. A fundamental rule of the rule of law is that penalties must be imposed only by people who are independent—either judges or, in the case of serious criminal proceedings, by a jury. In particular, the prosecutor should not also be the judge. Under this Bill, that is exactly what happens. The Secretary of State is both the prosecutor and the judge. That is doubly objectionable, not only because the Secretary of State imposes the penalty but because the defendant cannot give his own story in defence of the prosecution being brought against him.
It is true that under Clause 6 the court must give permission to the Secretary of State to impose measures that she has decided to apply. But as is stated by Clause 6(6), the court is applying a judicial review, which is not the same thing as a trial of the evidence. This means that the court cannot, in effect, question evidence supplied by the Secretary of State; it must refuse permission to impose the measures that the Secretary of State proposes, if, as is said in Clause 6(3),
“relevant decisions of the Secretary of State are obviously flawed”.
But what on earth does that mean? To whom must the flaw be obvious? I question the whole concept of something being obviously flawed, when more than one person may well be applied to in deciding whether the flaw is obvious or not. As I said, to whom must the flaw be obvious? Can counsel for a defendant argue that the flaws are obvious? I think probably not but one does not know. The fact is that the court has only a limited power over the imposition proposed by the Secretary of State. It is pretty clear that the court has no power to examine the facts of the case as presented by the Secretary of State.
This simply does not satisfy the rule of law. The rule of law is not wholly inflexible. We accept that, in certain circumstances, it is necessary in the interest of the nation to exclude relevant evidence from the presence of the defendant. But there is no justification for denying the court the right to consider the adequacy of that evidence. If it deals with this matter simply by a review process, that cannot happen.
I refer again to the report of the Joint Committee on Human Rights, published on 19 October. Paragraph 1.6 of the report, which I quoted in Committee on that date, states that,
“the well-established principle is that executive restrictions on liberty are such a radical departure from our common law tradition that they always require prior judicial authorisation after proper legal process. It is for the Government to justify this Bill’s departure from that fundamental principle”.
That is a statement with which I entirely agree and which I think those who were responsible for drafting this Bill should have taken into account. It does nothing to prevent procedures being taken up against the person who is understood to be involved in terrorism. It does not make the matter seriously more difficult for the Government. I do not think it does at all. The Secretary of State will clearly have come to a view that this person is liable to be prosecuted and made the subject of an order. I believe it is really a matter for the Secretary of State not to impose the measure herself but to present the evidence that she has to the member of the court who is in charge of this. It is for the member, or the members of the court, to take this up.
I will add one reason which might actually encourage the Government to accept the amendments. Having the judgment made by the court on the basis of an application by the Secretary of State—if the judgment is actually made by the court in all respects—would make the situation simpler or cheaper. In particular, since the court would not need to give itself permission to make the order which it wishes to make, the need for a directions hearing under Clause 8 would simply disappear. It would not only be a more justified and proper treatment of the evidence, it would also make it a simpler system for the Government.
Baroness Hayman
My Lords, I have added my name to these amendments and, given the speeches of the noble and learned Lord, Lord Lloyd of Berwick, and the noble Lord, Lord Goodhart, I can be relatively brief. I certainly will not challenge them in terms of legal expertise, having ended my legal career with a first degree in 1969, but I feel strongly on this issue because of my own experience as a parliamentarian. I had the honour to be a member of the Privy Council committee chaired by the noble Lord, Lord Newton of Braintree, who I am glad to see in his place, which reviewed the provisions of the Anti-terrorism, Crime and Security Act 2001, particularly Part 4 of that Act, which was considered by us and by many others to be unsatisfactory. The Government paid little heed to the results of that committee’s deliberations until the courts made them do so. We ended up with the 2005 Act, in which I played some part on the duration of control orders, an issue to which we will return, mutatis mutandis, later in today’s Report stage.
I came out of that experience, particularly the experience of the Privy Council review committee, with two clear views. One was that there was a problem that needed to be addressed and that there was some justification for going beyond the normal criminal legal procedures in terms of the threat of terrorism. Some of that was in terms of creating new offences—we saw the offence of “acts preparatory to terrorism” that came out of that review, which I believe has been helpful—but even that was not enough and there was the need, as I think the noble Lord, Lord Goodhart, has just said, for measures that were extraordinary. I do not need convincing on that score.
The other thing that became clear to me was that we should, as legislators, try to make those extraordinary measures deviate as little as humanly possible from the fundamental principles that we normally apply, through the criminal justice system and the whole of our legal processes, to the deprivation of liberty and to constraints upon movement and actions—the fundamental human rights of those living within our country, particularly our citizens. I look at the provisions of the Bill, which I believe are an improvement on control orders—limited but an improvement—and ask myself whether we are deviating as little as humanly possible.
I believe there would be a great improvement, without a balanced increase in risk to security, if we transferred that initial decision on the imposition of such measures from the Secretary of State—the Home Secretary—to the courts. That is the fundamental and simple reason why I support these measures. I was emboldened to do so partly because of the comments made by the chairman of the Privy Council committee, the noble Lord, Lord Newton of Braintree, as I always pay great respect to those who have been my chairs on committees. Perhaps we will hear from him later. However, I remember that, when we were discussing the 2005 Act and talking about analogous issues and the role of the judiciary, one of my colleagues who was not in sympathy with the position that I was taking turned on me and asked, “What’s so special about the judges?”, to which I replied, “They’re not the politicians”. That fundamentally remains my position today, and it is why I added my name and give my support to this group of amendments.
Lord Newton of Braintree
My Lords, on this occasion I have not actually been tempted. I had hoped to come in anyway, although I was a little late getting here, and I apologise for that. I would like to say to the noble Baroness, Lady Hayman, that I much appreciate the remarks she has just made. I well remember the experience we had together and the hugely valuable contribution that she made to that committee. I can also say that I share her views on absolutely everything that she has said, so I will not speak at great length. I agree also with what I have heard since I came into the Chamber. The Minister ought to know—if he was in any doubt—that there was not complete unanimity on this point on the Benches immediately behind him, even though the voices so far have come from elsewhere.
The arguments adduced on the previous occasion in Committee to which the noble Baroness has referred were, frankly, unbelievably thin. I do not blame the Minister for that—I suspect that they are inherently thin, and unless they are a lot thicker this evening then I will find myself in some difficulty, and he needs to know that.
Lord Macdonald of River Glaven
My Lords, I support these amendments. I declare an interest as the independent reviewer of the counterterrorism review. I should also like to pay tribute to the noble and learned Lord, Lord Lloyd, for the many hours that he has devoted to these issues over the years.
Why should it be the court rather than the Home Secretary? In my brief analysis, there are four reasons. First, on any analysis, the measures in this Bill are an exception to our normal rule-of-law principles for reasons set out very clearly by my noble friend Lord Goodhart. Secondly, they constitute a very serious potential stigmatisation of those subjected to them: a declaration of belief on the part of the state that the individual is involved in acts of terrorism. In my estimation it can hardly get much worse. Of course, the orders are anonymised, but family, friends and no doubt, the wider community, quickly become aware of the fact. Thirdly, our courts are very well used to adjudicating issues of national security, and they do it time and time again—for example, every time a question of public interest immunity arises, and in many other situations too. I am not aware of any credible argument that they do so incompetently. They may of course embarrass the Government and one or more of the agencies from time to time, but that is an entirely different point. Fourthly, and finally, our courts are independent, and they therefore bring the vigour of their independence to their decision making. In this area, that becomes a question of important public confidence.
My analysis is that it is the exceptionality of these measures, their severity, and the damage that they may do to their subject—who after all has heard no more than the gist of the case against him, quite exceptionally—that demands that they should be orders of the court rather than punitive and potentially damning directions of the Home Secretary.
Lord Pannick
I, too, support the noble and learned Lord, Lord Lloyd of Berwick, on Amendment 1, and his proposal that the imposition of a TPIM should be a judicial and not an administrative act. If restrictions of this nature on basic liberty are to be imposed, they are to be imposed on British citizens, and imposed entirely outside the criminal law process. Surely it is necessary for the procedure to require that they be imposed by judges, particularly when they are being imposed by reason of serious allegations of wrongdoing on the part of the individuals concerned?
The Minister said at Second Reading—and I reminded your Lordships in Committee—that the Government’s approach to this Bill was to try to balance civil liberties and security by ensuring that the Bill goes,
“no further than is absolutely necessary”—[Official Report, 5/10/11; col. 1137.]
in limiting people’s rights. Those were his words. Surely that test, that criterion—which must be the right criterion—requires that these restrictions be imposed only with judicial approval. If the security services, with all the information available to them, are unable to persuade a High Court judge in a closed session, where the material is not disclosed to the individual concerned, that the restrictions are needed, the restrictions should not be imposed at all.
If the Revenue requires a court order before it is able to raid a person’s house in order to seize his documents, surely the Home Secretary should require a court order before she can require that same individual to remain in his house overnight, or not to contact other specified persons, or before she can impose any of the other specific restrictions under a TPIM order.
Your Lordships should have no doubt that for these orders to be imposed by a judge on application by the Home Secretary, and not to be imposed administratively by the Home Secretary herself, would substantially increase confidence in these orders in those sections of the community most suspicious of them.
The Archbishop of York
My Lords, this clause gives the Home Secretary power to impose measures for terrorism prevention—so in many ways she is acting like a judge—and investigation, so she is behaving like the DPP. That is not right. You cannot combine functions that belong to the courts and the Director of Public Prosecutions into one person. That is always going to be problematic.
In this country, one of the greatest joys is that no one is deprived of their liberty unless they have committed an offence defined in law, been investigated and gone before a court, which in the end imposes the deprivation of liberty. Of course, you tell me, “This is the United Kingdom; the Home Secretary could never be near this”. In Uganda, if the President felt that you were committing treason, he made an order and you found yourself arrested, locked up and deprived of the possibility of any defence. Of course, you would say, “That is terrible; it should not be like that”. Friends, it happened to me.
Therefore, I feel where you are going at the moment, if you are going to deprive and impose specific measures on a person, surely it should be by application to the courts, and it would be the duty of the Home Secretary to present evidence that persuades a judge. Of course, we will be told that the Home Secretary will act very quickly. As the noble Lord, Lord Goodhart, and the noble and learned Lord, Lord Lloyd of Berwick, said, it can be done ex parte, very quickly; there is no reason that cannot happen. For the sake of those of us who came to enjoy the separation of the Executive from the judiciary and still see it as the greatest defence for the liberties of people, I hope that the Government will accept that this will be an improvement to the Bill if this separation is made.
There should be no doctrinaire stuff about it. In the end, it cannot really be the same person who does all this. Thank God, I will never be Home Secretary. If I were, I would find this clause terrifying, because in my conscience I would not want to be the judge, jury and executioner all in the same place—and the DPP as well, all combined into one. For the sake, therefore, of keeping this fantastic balance of the Executive and the judiciary never meddling with one another, this legislature would do well to accept all of the amendments that have been tabled by the noble and learned Lord, Lord Lloyd of Berwick. This is what I rejoice about in this country—its liberty and its separation of powers.
Baroness Kennedy of The Shaws
My Lords, I, too, support this amendment. I want to thank the most reverend Primate for his remarks. It would be very easy for this to become a debate in which lawyers hold the floor, but it should not be, because this is so fundamental to who we are and what our system is here in Britain. We are talking about the rule of law and about liberty and the protections we provide for it.
I wanted to pick up what my noble friend Lady Hayman said when she answered the question: what is so special about judges? Her answer was that they are not politicians. It is more than that. Our judiciary is independent. We spend time—I certainly do—speaking to lawyers and judges in other jurisdictions about what the meaning of an independent judiciary really is, and how it protects our politics. As the most reverend Primate has said, it is a protection for the politicians and for our polity that we hand over issues to do with something as precious as liberty to judges—even in these exceptional circumstances—because that way we are adding weight to the importance of liberty’s meaning in all of our lives.
Lord Phillips of Sudbury
My Lords, I support strongly the last point made by the noble Lord, Lord Pannick, which has been indirectly referred to by the noble Baronesses, Lady Kennedy and Lady Hayman, and by the noble Lord, Lord Macdonald of River Glaven. I hope that my noble friend will take full account of the political importance of this group of amendments. The psychology of extremism feeds on a sense of unfairness and oppression. The law as it stands, and indeed as it is improved in the Bill, will inadvertently provide to those who already feel hard done by, or the subject of extreme unfairness, a spur to yet further, potentially terrorist, activities. That will be the case if an important decision of this nature— which has, as other noble Lords have said, extreme repercussions—is not the decision of an independent judge but that of a politician. However good the politician is, the person who may be converted to extremism will view that politician as an agent of politics and not as an agent of justice. For that reason, among many others, I urge my noble friend to adopt these amendments.
Lord Condon
My Lords, I, too, support the amendment proposed by the noble and learned Lord, Lord Lloyd, on the grounds that have already been spoken of, but also on the very pragmatic grounds that, every time we as a country step beyond the normal bounds of the rule of law, or contemplate extra-judicial measures, or contemplate allowing the Executive to have powers in this area, we risk alienating young men and women who may be wavering around, or contemplating being drawn into, terrorism. We create war stories and martyrdom. Even though these are small in number, they can be used to recruit vulnerable young people into supporting or contemplating terrorism.
History tells us that every time Governments—here or abroad—have contemplated extra-judicial executive powers, in the long term those powers have tended to work against us. I understand the reasons why Governments want to maintain public confidence by being and appearing to be very tough on terrorism, and the pragmatism of police forces and intelligence services which want the widest battery of powers to be available to them immediately as they contemplate their response to terrorism. However, I fear that this power and others that I have previously spoken against in your Lordships’ House could be counterproductive in the long-term fight against terrorism. That is why I support the amendment that we are considering today.
Baroness Hamwee
My Lords, the noble Lord, Lord Newton of Braintree, warned the Minister that those directly behind him were not unanimously supportive of the Government’s position. I have previously warned the Minister that those at a bit of an angle to him are, similarly, not wholly with him.
I wish I had used the example given by the noble Baroness, Lady Hayman, when I recently brought some young cousins into the Chamber and attempted to explain the separation of powers. That is exactly what this is about. Recently the Government have sometimes responded to judgments of the courts as though the courts sought to usurp policy-making powers. They are not the first Government to do so. That very response demonstrates the importance of the role of the courts, and the need to demonstrate our integrity as a country for the reasons that the noble Lord, Lord Condon, has just explained.
Lord Faulks
My Lords, I have enormous respect for the noble and learned Lord, Lord Lloyd of Berwick, for his experience and the consistency of his approach to this issue. I also acknowledge how delicate the situation is, how important the liberty of the individual is and that any powers of this nature ought to be hedged by a great many safeguards. However, a decision of this nature is one that falls to the Home Secretary to take. So far, the judges who have these powers have exercised the right to scrutinise thoroughly in a way that we cannot feel is short of what might be desired. I respectfully submit that it is a power that should belong to the Home Secretary, who makes these decisions, no doubt with great anxiety and the consciousness that any decision that she makes will be looked at very carefully.
A judge will have an opportunity to look at a particular case on an ad hoc basis. However, we should not underestimate the strategic role of the Home Secretary to see an act or potential act of terrorism, or a terrorist, in the wider scope. Notwithstanding all the powerful speeches that have been made, I respectfully submit that this is a question that belongs to the Home Secretary and her alone.
Lord Rosser
My Lords, we do not feel moved to change our stance on the procedure that is associated with control orders. Therefore, we have a fundamental difference of view with those who have tabled the amendments that we are discussing and, indeed, with all noble Lords bar one who have so far spoken in this debate. The security of our citizens—protecting them from the risk of terrorism of the exceptional kind that we have seen and been under threat from in recent years—is the responsibility of an elected Government through the Home Secretary. It should be a matter for the Home Secretary, who is accountable to Parliament and the electorate, and not the courts, to make an executive decision on whether a TPIM and its associated conditions are needed if she or he reasonably believes, based on the intelligence available, that an individual is involved in terrorist activity that places the security of our citizens at risk. For that reason, we are not able to support these amendments.
Lord Henley
My Lords, I thank the noble Lord, Lord Rosser, for those remarks, just as I thank my noble friend Lord Faulks for his remarks. I believe that we are not alone in objecting to the amendments put forward so ably by the noble and learned Lord, Lord Lloyd, for whom I have the utmost respect. We have been debating matters of this sort, sometimes on the same side, sometimes on different sides, for many years. I acknowledge his expertise, but I have to say that I do not agree with the gist behind this large group of amendments that he has tabled with support from my noble friend Lord Goodhart, the noble Baroness, Lady Hayman, and others.
Put simply, the key change under these amendments would be that TPIM notices would be imposed by a judge rather than by the Secretary of State. We have heard a great many legal arguments put forward by a great many extraordinary and eminent noble Lords—some learned, some not learned, but many are more learned than even the most learned of learned Lords. If we can take an Occam’s razor to this point, the question is: do we think that this it right for the Home Secretary to make this decision or should it be a matter for the courts? It is as simple as that.
It is no secret that the Government take a different approach to that proposed by the noble and learned Lord and other noble Lords, be they learned or not. It is no secret that we take a different approach from that recommended by the Joint Committee on Human Rights and others who have spoken in this debate. These are matters that we have debated in the House during the Bill’s passage and to which the Government have responded, in full, to the Joint Committee on Human Rights, including their response to the report of 19 October issued earlier this month.
The arguments are well rehearsed. I appreciate that noble Lords have again set out their views that such restrictions that may be imposed under this Bill—and which I emphasise are preventive, not necessarily punitive—should only ever be imposed by a judge. It is a respectful and principled decision. It has consistently been held by some in this House in relation to control orders in the past and now to TPIMs, but we cannot agree with it. We do not accept, as the noble and learned Lord, Lord Lloyd, would put it, that it is unprecedented for decisions of this sort, based on national security cases or on sensitive material, to be taken by the Executive. As he is aware, there are a number of occasions when executive decisions are made by the Home Secretary and others.
The noble and learned Lord was wrong to suggest that deprivation of British citizenship applies only to citizenship obtained by fraud. It can also be used on grounds of being conducive to the public good if the citizen is of dual nationality, which the noble and learned Lord did not mention in his response. He did mention that it can also be used under asset freezing, under the Terrorist Asset-Freezing etc. Act 2010. Again I appreciate that the noble and learned Lord did not accept that Bill, but it is now an Act. It can be used on financial restrictions under the Counter-Terrorism Act 2008. It can also be used—and has been very recently—regarding decisions to proscribe organisations that the Home Secretary believes are involved in terrorism. It is a well established principle that it is the relevant Secretary of State who can take such decisions in, for example, cases of asset freezing and others such as immigration cases with a national security dimension, with subsequent judicial oversight. That is the important point to remember. My right honourable friend the Home Secretary will make that decision. She is the right person to make it, but it will be reviewed by the courts in due course. I give way to the noble and learned Lord.
Lord Lloyd of Berwick
Does the noble Lord accept that the only precedents on which he relies, other than the very recent terrorist asset-freezing legislation, are immigration decisions which have nothing whatever to do with what is before us? They deal basically with foreigners, not with British-born subjects.
Lord Henley
It is still a matter of national security. That is why we believe that it is for the Home Secretary to make the appropriate decision and for that to be reviewed by the courts. The noble and learned Lord mentioned the 2010 Act, with which he did not agree and which he opposed. I mentioned that but I also mentioned the Counter-Terrorism Act 2008 and the financial restrictions under that. That is another example. I accept that the other matters concern immigration decisions but they are important. I also mentioned the fact that the Home Secretary has the power to proscribe organisations which she believes are involved in terrorism. Again, that matter can be reviewed by the courts, as can the one we are discussing. Therefore, it is irrelevant whether the earlier matters concerned only immigration, as the noble and learned Lord put it. These matters go beyond that. They involve national security. I will give way to the noble Baroness in a minute when I have finished this point. Therefore, I think it is right that my right honourable friend the Home Secretary should be involved in those decisions.
Baroness Hayman
I am grateful to the Minister for giving way. Until I listened to the speech of the noble and learned Lord, Lord Lloyd of Berwick, I had not been aware of the argument put forward by the noble Lord, Lord Sassoon, as regards the executive nature of the terrorist freezing orders to be made, that there was a distinction and that these were justifiable because they dealt with financial matters, not individual liberties. Will he comment on that argument?
Lord Henley
The noble Baroness is right to mention what my noble friend Lord Sassoon said on that occasion. He drew a distinction between financial matters—that is, property—and individual liberties. However, both are matters that affect one’s human rights. Despite the noble Baroness’s socialist background —I am sorry if I make her laugh—I presume she would accept that the rights to property are matters which involve one’s human rights, just as the rights to liberty do. My noble friend Lord Sassoon drew the distinction that both of them are matters relating to one’s human rights.
Baroness Hayman
I would not wish the noble Lord, Lord Sassoon, to be tarred with the brush of having a socialist background because he seemed to distinguish between the two sorts of intrusions on individual liberty.
Lord Henley
There is obviously a distinction but both involve one’s human rights. That is the importance. The noble Baroness may have noticed that when my noble friend Lord Sassoon noticed on the television that the noble and learned Lord was making these points, he came in to have a quick word with me to make clear what he had discussed, and I will try to convey those feelings to the House. I hope that I have understood what my noble friend whispered to me on the Front Bench, and I hope that the noble Baroness will accept it.
As we also made clear, we believe that it is not just the view of the Executive that is crucial in these matters. That is why I quoted earlier the view expressed by the courts. It is consistent with the view expressed by the Court of Appeal in the case of MB, which the noble and learned Lord also referred to, in which the court said that,
“the Secretary of State is better placed than the court to decide the measures that are necessary to protect the public against the activities of a terrorist suspect”.
In the same judgment the Court of Appeal also noted that the principle that the courts should pay deference to the Executive on matters relating to state security has long been recognised by the courts in this country, including the Law Lords, and by the European Court of Human Rights.
As I said at the beginning of my speech—in asking, as it were, for something approaching an Occam’s razor to be put to this argument—it is just getting it down to the simple question: which do you think is the appropriate body to make this decision?
Lord Henley
I am not going to give way until I finish this point, and then I will give way to the noble Lord.
We believe that it is for the Home Secretary to make the decision, and for this decision to be subsequently reviewed, because the Home Secretary is a politician who is answerable to Parliament. I appreciate that some will knock the role of politicians but I would remind noble Lords of the very powerful speech made by the noble Lord, Lord Reid, at Second Reading, where he reminded us that most of our freedoms are the result of politicians and their acts, and not of the courts. The Home Secretary, as a politician answerable to Parliament, will make that decision and that decision will then be reviewed by the courts in due course. It is that very simple decision that we want to make. Should it be the Home Secretary or should it be the courts? We believe that it should be the Home Secretary. I will now give way to the noble Lord.
Lord Pannick
I am grateful to the noble Lord. I am puzzled by why he thinks that judicial control at the outset would undermine ministerial responsibility when he accepts that there should be judicial review on a merits approach at a later stage if the order is challenged. Why is the latter equally not an undermining of ministerial responsibility?
Lord Henley
Because my right honourable friend is responsible for security and, as I said, she is answerable to Parliament. We believe that she should make that initial decision and that later on it can be looked at by the courts. However, we think it right and proper that she should make it. That is the reason why, as I said, I am trying to strip this amendment down to its simplest point: do you want the decision made by my right honourable friend the Home Secretary or do you want it made by the courts? We believe it right that it should be made by my right honourable friend and then reviewed by the courts. For that reason I cannot support the amendment that the noble and learned Lord has moved.
Lord Lloyd of Berwick
The Minister has not dealt at all with the point on Section 4 of the 2005 Act. There is a clear case, as I am sure he realises, where the initial order is made by the court and not by the Secretary of State. Why should that not apply here? It is not an answer to say that that is a derogation order—or if that is an answer, why is it an answer?
Lord Henley
My Lords, if I had wanted to use up a great deal of the House’s time, I could have answered a great many points, and indeed the House may wish me to answer them. I was trying to bring this matter down to a simple question for the House: who would be the appropriate person to make this decision?
Section 4 was raised. The Government’s counter-terrorism review looked at that but did not consider that derogating control orders provided an appropriate parallel. No derogating control orders have ever been made and the context here would be different. Derogating control orders would impose obligations so stringent that the Government would, as I understand it, need to derogate from Article 5—that is, the right to liberty—of the European Convention on Human Rights before such orders could be imposed. Non-derogating control orders—the only kind ever used—can, by definition, impose only less restrictive obligations, and Parliament agreed that these should be made by the Secretary of State.
I go back to the very simple point that I want the House to address in the noble and learned Lord’s amendment: who do you think is the right person to make this order? We believe that the right person is the Home Secretary because the Home Secretary is answerable to Parliament and is responsible for national security. That will then be looked at by the courts, but we do not believe that it should be the courts ab initio. For that reason, I cannot support the noble and learned Lord’s amendment.
Lord Lloyd of Berwick
My Lords, I regret that I find the noble Lord’s reply to the debate pretty unsatisfactory. I have as great a respect for him as he says he has for me, and I just wish that he could have made a better case for the Government than he has. I think that the case is as weak as it could possibly be. I do not suppose that this amendment is likely to succeed, but it should and I therefore propose to divide the House.
Lord Hunt of Kings Heath
“Residence measureA1 (1) The Secretary of State may impose restrictions on the individual in relation to the residence in which the individual resides.
(2) The Secretary of State may, in particular, impose any of the following—
(a) a requirement to reside at a specified residence;
(b) a requirement not to allow others to reside at that residence without the permission of the Secretary of State;
(c) a requirement, applicable between such hours as are specified, to remain at the specified residence.
(a) may be in any locality in the United Kingdom that appears to the Secretary of State to be appropriate;
(b) may be a residence provided by or on behalf of the Secretary of State.
(a) the condition that the individual remains overnight at other agreed premises between such hours as the Secretary of State may require;
(b) the condition that the individual complies with such other restrictions in relation to the individual’s movements whilst away from the specified residence as may be so required.
(a) the generality of sub-paragraph (7) of paragraph 14 (power to impose conditions when granting permission), or
(b) the power to impose further conditions under that sub-paragraph in connection with permission granted by virtue of sub-paragraph (5) of this paragraph.
Lord Hunt of Kings Heath
My Lords, I have a number of amendments in this group and I should like to start with Amendment 44A. At Questions, the noble Lord, Lord Henley, seemed to think that this was peripheral to our debates today but I do not think that it is. Surely the context in which we consider the Bill is in relation to the measures that are necessary to prevent terrorism. We were offered a Statement in lieu of a PNQ in the other place on the matter to which I am going to refer, but it is just as appropriate to discuss it here.
Amendment 44A essentially asks the Secretary of State to commission an independent review to report on the operational effectiveness of the terrorism prevention measures in place at our international borders. That is set in the context of serious concern about the operation and effectiveness of the terrorism prevention measures in place at our international borders and the Bill has to be seen in this context. Of course, one has to refer to the significant reduction in the levels of security in border checks at UK points of entry in the summer of 2011, which has been the subject of considerable parliamentary debate and concern over the past two to three weeks. The noble Lord will be aware that the Home Secretary has yet to answer some very serious questions, particularly in regard to the scale of the security breaches that have taken place.
The subject of the PNQ in the other place today concerned reports this morning that thousands of passengers arriving on private jets from all over the world were allowed into this country this summer without any passport checks as a matter of official policy, at least according to information that appears to have come from UK Border Agency e-mails. The internal UKBA documents show that immigration and customs staff were instructed not to meet passengers arriving on private charter flights, including executive jets, as part of a so-called light touch targeted approach to border checks that was adopted this summer without, as far as I am aware, the information being put into the public domain.
These e-mails from the UKBA also reveal the extent to which full passport checks on European passengers were scaled back under the limited pilot scheme authorised by the Home Secretary on 28 July. I have to say that this is a very worrying state of affairs. In the context of the cuts that have taken place in the UKBA budget, it suggests that the UKBA is having great difficulty in carrying out its functions effectively. Essentially, since the Government came to power, a number of additional responsibilities have been placed on the UKBA at the same time as the huge reduction in its budget. No wonder we have reached such a difficult situation. The point that I put to the noble Lord, Lord Henley, is that this exposes general concerns about the operation and effectiveness of terrorism prevention measures, which is why I commend Amendment 44A to the House.
I return now to a group of amendments moved in Committee by the noble Lord, Lord Carlile. The noble Lord is not able to be with us this afternoon but I am grateful to him for putting his name to my amendments. Essentially, they propose keeping the existing control order provisions for relocation—which is the central point of many of our discussions on the Bill so far—until after the Olympic Games. From a chosen date after 1 January 2013, it would be open to the Government to come back to Parliament and replace the current relocation provisions with the provisions in the Bill, which would remove relocation subject to the emergency legislation that is also in the Bill.
The evidence given by the Deputy Assistant Commissioner to the Public Bill Committee in the other place was quite persuasive on the reason for and effectiveness of the use of control orders. The decision in the case of CD earlier this year was made after the Government argued, in the interest of national security, for a relocation component in CD’s control order. I remind the noble Lord, Lord Henley, that in Committee the noble Lord, Lord Carlile, asked if the Government had changed their mind about CD and, if so, why. If they have not changed their mind, why are they bringing the Bill before us?
On timing, is it really sensible to remove the relocation provisions at the current time? The Olympics are almost upon us. The noble Lord will know of reports in the media of US concerns about Olympic security. I fully accept that the Government have stated that this has not been reported accurately, but there is no denying the challenge facing us. My amendment does not seek to detract from the essential point of this legislation. All it does is keep the existing exclusion order provisions until after the Olympics. At that point, if the Government are satisfied that they no longer need the provisions, they merely have to bring an order to Parliament and the provisions in the Bill will take over. If I may so, it is a pretty good offer. It allows the Government to continue with these provisions over a particularly challenging time but does not undermine what they are essentially seeking to do. The noble Lord was not very warm towards these amendments in Committee. Let us hope that he is a little warmer to them at Report. I beg to move.
Lord Pannick
I support the Government in their decision not to include the relocation power in the Bill. The speech of the noble Lord, Lord Hunt of Kings Heath, was notable for what he did not say about relocation powers. He did not mention the central feature of such a power, which makes it particularly intrusive and particularly damaging to the life of the individual who is the subject of it as well as to the lives of all members of their family. That is why such a measure should surely only be available if the Government conclude that it is truly necessary to protect national security. My understanding is that they do not, as the Minister made clear in Committee. I support them in that.
Lord Faulks
I agree with what the noble Lord, Lord Pannick, said. I understand the reasons behind this change, yet I have some sympathy for what the noble Lord, Lord Hunt of Kings Heath, said. It is reasonable to ask for reassurance about what will be a massive event with security implications. I am sure that the Minister will answer that query. I wonder if there is also an issue in relation to the transition from control orders to TPIMs at the end of this year, as the 28-day transitional period will fall over Christmas and new year. I would be grateful if the Minister would provide some reassurance that the police will be able to manage this transition.
Lord Judd
I am grateful to the noble Lord, Lord Pannick. Of course, he is right. That is not the first time he has been right: nor, I imagine, will it be the last. I make one plea to my noble friend. I am concerned that, if the official position of the Opposition and the party which I support—and of which I am a member—is that it is not necessary, as was demonstrated on the last amendment, for action to originate with the courts and judges, this will extend still further the powers that will flow from an executive decision by the Secretary of State. To have such far-reaching powers—whether they are needed at all is a separate issue—without the action having originated in the courts becomes even more disturbing. I hope that my noble friend and his colleagues, in considering future policy over a longer period, will give this serious consideration.
The noble Lord, Lord Phillips, in the debate on the previous amendment, made what for me was the most powerful argument: that is, what are we trying to do? We are trying to promote the security and well-being of the British people. If we are going to do that we must have the maximum possible support for what is being done in all the communities that matter in this context. If that is to be the case, and if people are not to be prone to manipulation by extremists in the midst of their concern and anxiety, it is desperately important to demonstrate that when extensive powers are brought to bear, they have the authority of the courts and are part of the whole tradition of the administration of justice and the rule of law as we have understood it in this country.
Let us make no mistake. The objectives of the extremists are to undermine and destroy our commitment to the rule of law as we have understood it and to destroy the credibility of our claims about the rule of law. We must be careful that we do not play into the hands of the manipulative extremists and put the vulnerable and the impressionable under still more pressure to join their ranks.
Lord Newton of Braintree
My Lords, before I say anything else I had better warn my noble friends on the Front Bench that—to their surprise—I am about to support them, along with the noble Lord, Lord Pannick. However, that is in the context of having voted against them on the previous amendment and having agreed with every word that the noble Lord, Lord Judd, said, which built on what my noble friend Lord Phillips said in the previous debate. If these provisions had still been in the Bill during the previous debate, they would have been a major focus of it. The notion that one forces somebody away from their friends, takes their children out of their schools and breaks all their links by a relocation order, underlines the desirability of this being something that is sanctioned by the courts and not done as an executive fiat by the Home Secretary.
I will speak, but not at length, to the Labour Front Bench. This is a bit of a sad day for all of us except the 79 who formed a small group in the Lobby behind me. However, in the light of this debate, it is an even sadder day for the Labour Party—I suspect that the noble Lord, Lord Judd, would agree with me but I will not ask him to indicate that—when set against the background of much of what it has stood for over the years. One thing that pleased me when we got the coalition was that there were clear indications—and not just because it was a coalition—that the Conservative Party was occupying the freedom ground again rather than the authoritarian ground. There are now reasons to question that, but I will not go on down that line.
I want to conclude without repeating points that have already been made. Okay, there will be problems during the Olympics, but they will be a great showcase for our country: its values, qualities and abilities. Why do we want, in the course of the Games, to maintain a proposition that is, frankly, inimical to everything that most of the rest of the world thinks that this country stands for and to what most of us think is what our democracy stands for? That is my question and that is why I support the Minister.
Lord Macdonald of River Glaven
My Lords, I also support the Government’s position on these amendments. The counterterrorism review gathered a great deal of evidence about relocation, as well as other measures applicable under the control order regime. The evidence was considered extremely carefully, as far as I could see. After all, the review was conducted by no less a division of the Home Office than the Office for Security and Counter-Terrorism, which is to be found in the deepest bowels of that department of state. Its conclusion, which I thought was certainly in accordance with the evidence, was that relocation was disproportionate and unnecessary in the face of other measures available under the TPIM legislation and particularly in the light of the Government’s decision to increase the amount of funding for surveillance, which after all is the main technique used by countries like us around the world to deal with these sorts of issues. I agreed with the conclusions of the counterterrorism review, as I thought that they were clearly in line with the evidence, of which there is a great deal. I am sure that the Government’s position on these amendments is the right one.
The Archbishop of York
I, too, as someone who supported the noble and learned Lord, Lord Lloyd of Berwick, in his amendment, believe that it is the duty of the Home Secretary to make the application to the judge and the judge to determine. To bring back relocation would make the case worse—not because we lost the last Vote, but I generally feel that on this particular bit of the Bill the Government have got it right. So I hope that we do not have to go through the Lobby Doors again but that the amendment will be withdrawn. Nothing will cause me greater difficulty in my understanding of British justice than bringing back relocation. That actually causes more difficulty in our communities than anything else. If there is going to be relocation, the noble Lord, Lord Hunt, should in his amendment have said that it should be done on the orders of a judge and not the Secretary of State.
I go with the Government on this, as I think they have got it right. Of course, we lost the last and most important amendment, but there we are.
Lord Bew
My Lords, I support the amendment in the name of the noble Lord, Lord Hunt. Coming as I do from Northern Ireland, I regard control orders with great suspicion and concern, as with anything that smacks of internal exile. That is one of the implications of control orders and it is quite right that the House should take an extremely sceptical view of them.
None the less, there are two important considerations, one already alluded to by the noble Lord, Lord Hunt, which is the evidence given by the deputy assistant commissioner about the efficacy of control orders. The other crucial point is the recent public debate over concern about security during the Olympics. There is a balance to be struck here, and it is very difficult for the Government to get this right; but this is a very modest request—a timing issue, focused fundamentally and purely on the question of security during the Olympics. For that reason, I favour the terms of the amendment in the name of the noble Lord, Lord Hunt.
Lord Harris of Haringey
My Lords, I am grateful to have the opportunity to follow the noble Lord, Lord Bew, who has summed up the argument about prudence on this amendment. This is not a new power—it is making available during the Olympics year the existing powers. That is all that it does. It does not create a new power, despite what my noble friend Lord Judd has said. I am very conscious—and I do not think that the Minister answered this point on Second Reading or in Committee—that the power of relocation has been used in a very small number of cases, and it has been used by the present Home Secretary. This is not some hangover from the days of the previous Administration in terms of its use; it has been used by the present Government and the present Home Secretary.
I would like to be satisfied on why the Government think that a power that was used earlier this year, because the Home Secretary considered it necessary on the basis of the information that she had received is no longer necessary in the period during the Olympics when we know that the threat will be extremely difficult. That is extremely important.
Lord Lloyd of Berwick
Is not the possible answer to that question that, at that stage, the Home Secretary was not aware that she had sufficient resources by way of surveillance to do without relocation?
Lord Harris of Haringey
I am sure that it is helpful to the noble Lord, Lord Henley, to have the noble and learned Lord, Lord Lloyd, putting his arguments in advance. That may well be the argument on which the noble Lord, Lord Henley, will rely.
That brings me to my next point: can the Minister assure us that all of those extra surveillance arrangements will in fact be fully available, including the technical measures, by the end of this calendar year? Can he assure us that all of those arrangements are in place, and will be in place, and where there are technical measures, whether they have been adequately tested? The last thing any of us in this House would want to see is a situation in which new measures turned out not to be fully functioning when the need was greatest.
This is an amendment about prudence. I think it was relevant that the noble Lord, Lord Faulks, raised the point about the transition period. Again, I would be interested to hear the Minister’s response. It seems to me that the Minister has to satisfy the House today that not passing this amendment is a prudent, sensible and proportionate course of action. Those of us who are concerned about the security that will be available during the Olympics want to be satisfied that every necessary measure is available. Let us remember, this is not a mandatory obligation on the Secretary of State. Amendment 5 proposes that the Secretary of State “may impose restrictions”. It would only kick in under the very small number of instances where the Home Secretary was convinced, on the basis of information received, that this was something that was appropriate and proportionate to do. It would not be used on a blanket basis, and the number of instances in which relocation has been used under the existing control order regime is, as I understand it, extremely small.
I turn to Amendment 44A and the report on border controls to prevent terrorism. While I am not quite sure I understand the logic of the grouping which puts this with the other amendments, I none the less think it is extremely important. We have to recognise that, irrespective of the discussions there have been in the last week or so, there are issues about the security of our borders. This is nothing to do with whether the UK Border Agency has or has not been doing its job properly; has or has not exceeded the instructions of the Home Secretary; has or has not relaxed controls over and beyond that. It is about whether or not the controls could ever work. Therefore I think this report would be extremely valuable.
Could the Minister tell us what work is being done about people who arrive in this country by train through the Channel Tunnel, but whose destination may not have involved them having to go through passport control in either Paris or Brussels? To what extent are the Government considering what is going to happen at the point at which Lille, I think it is, is connected to a greater number of major train lines within the continent of Europe? What steps are in place to ensure that our borders are secure under those circumstances?
Can the Minister also satisfy us—and this has been the subject of debate in the last few days—what steps are in place to ensure that people who arrive in this country by coach are also adequately screened and whether the arrangements in place are able to cope with the volumes involved? Finally, for those who arrive by ferry, are arrangements in place to manage the numbers involved, and manage them properly?
Baroness Hamwee
My Lords, on the amendment on relocation the noble Lord, Lord Hunt, said that it does not detract from the essential point of this Bill. I think it does because the change to the measures which can be imposed is the essence of this Bill. Relocation is an extensive measure and can be particularly damaging—the noble Lord, Lord Newton, referred to this. I would add to his examples not just that of taking children out of their school and replanting them somewhere quite different but that of separating the individual who is the subject of the measure from his family, which has happened with relocation in a number of instances. I do not need to explain the impact of that.
Reference has been made to the evidence given to the Public Bill Committee in the Commons on behalf of the Metropolitan Police. I read that evidence as the sort of thing that any good copper would say in seeking to defend the police's position and ensure that as much money as possible was allocated to the activity, making quite understandable caveats about limits. Before the noble and learned Lord, Lord Lloyd of Berwick, mentioned it my reaction, too, to what happened earlier this year was that—as I think the Minister’s predecessor but one told the House on an earlier occasion—the extra surveillance measures were not then in force but would be, so the situation is changing.
I have always found a difficulty with pointing to the Olympic and Paralympic Games as a kind of watershed, not because I do not acknowledge that they could be a high-profile occasion for any terrorist to use but because we either are or are not equipped for dealing with terrorism. I cannot quite get my own head around whether, disregarding what the Americans may have said yesterday—they have always said that in relation to the Games—the Games are so very much more of a danger point. Indeed, is there not a danger for us in focusing on them as the critical time? It would be very damaging to the reputation of the Games and of this country if there was an attack earlier or later than that because we appeared to have relaxed our guard. I just find a difficulty in that.
Amendment 44A is exactly the opportunistic sort of amendment which I would entirely have expected the Opposition to table. Any Opposition would do so, but if the situation is as serious as they point out, then I, for one, do not want to wait a year. However, I am not sure whether this is in any way the right amendment. I would like to see an evaluation of the pilot that we have heard has been carried out, not to wait a year for that, but we are told that more dodgy people were picked up as a result of the pilot and it is important that we understand how that worked. This amendment, however, appears to go wider than the measures under this Bill because it does not use the term “measures”, which is defined in the Bill. I wonder whether the amendment is even within the scope of the Bill but leaving that technical thing aside, this is about immigration and controlees. The subjects of TPIMs are or will be British citizens, so although it raises important points I do not think those points are wholly relevant to this Bill. The subject is important but it is important to get it right, not to have it as a political football.
Lord Henley
My Lords, we have a curious group, as some noble Lords have put it, with the amendments relating to relocation, and Amendment 44A, put down by the noble Lord, Lord Hunt of Kings Heath, I believe late last night.
The noble Lord, Lord Harris of Haringey, who is a pretty experienced politician, curiously came over rather naïve about this and could not quite understand why these two amendments had been grouped together. That point was answered by my noble friend Lady Hamwee when she pointed out that it was possibly a somewhat opportunistic amendment to put down. I give way, as always, to the noble Lord.
Lord Harris of Haringey
I know this is fearful—every time the noble Lord mentions my name I stand up, and I will endeavour not to do that.
My puzzlement was associated with the grouping. Had this been freestanding as Amendment 44A, we could have had a nice little debate about that and about its place in the Bill. I was puzzled that it was grouped with these other amendments on the relocation powers.
Lord Henley
Given that the noble Lord is quite an experienced Member of this House, he will know that the grouping is not a matter, sadly, that the Government have any control over, and that it would be a matter for the noble Lord, Lord Hunt of Kings Heath, to decide that he wished to have this amendment grouped with the other amendments. Of course, the Government are more than happy to go along with that.
If I may, I will deal with that amendment very briefly. It is an amendment that asks for yet another report and I have to say that it is not necessary. As the noble Lord, Lord Hunt of Kings Heath, knows, there is ample provision already in place for independent review. We have the independent reviewer of counter-terrorism, currently David Anderson QC, and for 10 years before him we had my noble friend Lord Carlile of Berriew, who did that job exceedingly well. The independent chief inspector of the United Kingdom Border Agency, currently John Vine, is also required to review the operation and effectiveness of the measures in place at our ports and airports. They both report annually to the Home Secretary and their findings and reports are laid in Parliament.
I will not go much further than that and I will not deal with the specific points that noble Lords have raised in relation to recent events, partly because John Vine has been asked by the Home Secretary to make a report into these matters. There are also two other internal reports that deal with these issues—again, which have been promised by my right honourable friend—that will be made available when they come out. It would therefore not be right or proper to deal with those matters.
Referring on to the question of private planes coming in and what controls we have there, as my honourable friend in another place, Damian Green, made clear, we have absolutely nothing to hide. We have in fact strengthened the procedures there compared to what they were pre-2010 and we have made sure that we prioritise and make appropriate risk-based assessments on any planes that come in. A Statement was offered to the party opposite but for reasons of its own it wished not to take it.
I turn to relocation. Again, I accept that this is an issue that has been debated extensively throughout the Bill’s passage both in this House and in another place. Obviously there are strong views on all sides. We accept that relocation has proved effective in disrupting terrorism-related activities, but it does, as my noble friend Lord Macdonald made clear, raise particularly difficult questions of proportionality. The question is therefore, as I put it at Second Reading and which I repeat now, one of balance. Our review of counter-terrorism acknowledged these difficult questions and considered them carefully. The review concluded that the best balance lies in a more focused use of the robust restrictions that will be available under the Bill together with the increased resources that will be available for covert investigation. It concluded that it will be possible to protect the public without the powers of relocation being routinely available.
We must always remember not to look at this Bill on its own. It is part of that wider package of changes, including those in the counterterrorism review, aimed at striking a better balance across the whole range of counterterrorism and security powers, and it will be complemented by the significantly increased funding that we are providing for those purposes. We have also published the Draft Enhanced TPIM Bill, which will be introduced if necessary, in exceptional circumstances, after some degree of prelegislative scrutiny, as is found appropriate by the authorities in this House and another place. It would provide more stringent restrictions, including that power of relocation, if necessary.
I understand that the noble Lord, Lord Hunt, has concerns over timing, particularly in relation to the Olympics. Again, he ought to listen to what my noble friend Lord Newton had to say about that, and possibly the Olympics is the one occasion when we would not want to be showcasing to the world the fact that we have measures of this sort. However, I take his concerns about the Olympics. The Government have made very clear that arrangements will be in place to manage effectively the transition from control orders to TPIM notices. Security arrangements for the Olympics are being planned on the basis that the TPIM Bill, and the powers available under it, will be in force. These plans are also proceeding on the basis that the additional powers contained in the Draft Enhanced TPIM Bill will, we hope, not be needed or be necessary. As is right and proper, our planning for the Olympics is both flexible and risk-based, and we will continue to monitor the threat to ensure that we adopt the most appropriate response, including keeping this issue under review as necessary in the light of developments.
Finally, my noble friend Lord Faulks raised a detailed and very important question about the transition period when this Bill comes in, which will be over Christmas. He asked whether I could provide some reassurance that the police would be able to manage this transition during that period. As the House will be aware, the Bill includes provision for a transition period during which control orders will remain in force to enable the necessary arrangements for TPIMs to be put in place where appropriate. The Christmas and New Year holidays are likely to fall within that period because we are approaching the time when the Bill will complete its passage through both Houses, assuming that the Bill receives Royal Assent before the Christmas period. We have recently received advice from the Metropolitan Police that while extensive preparations are being made for the transition to the new regime, an extension to the transition period from 28 days to 42 days would be required to ensure that operational risks are minimised over the holiday period. I give an assurance to the House and to my noble friend that I undertake to bring forward an amendment to the Bill at Third Reading that will make that necessary change in Schedule 8 to the Bill—I think it is more or less the last sentence of the Bill.
I hope that with those explanations, and stressing again the need for balance and proportionality, the noble Lord, Lord Hunt, will feel able to withdraw his amendment.
Lord Hunt of Kings Heath
My Lords, I am very grateful to all noble Lords who have taken part in this short debate. I am disappointed that the noble Lord, Lord Henley, could not respond somewhat more positively to my Amendment 44A. My noble friend Lord Harris asked a number of pertinent questions. No doubt when the official inquiries report, we will get answers to them. There is an underlying concern about the security of our borders and the resources available to the UK Border Agency. I hope that we will have another opportunity to return to this in due course.
As for my other amendments, I say to the noble Lord, Lord Pannick, that at Second Reading I recognised the exceptional and intrusive measures that control orders imply and I do not at all detract from that. I just happen to think that they are one of the tools that should be open to the Government, with ample judicial review where they happen to be used.
I very rarely disagree with my noble friend. I was surprised at what the noble Lord, Lord Newton, said. After all, if the Opposition had indeed voted with the noble and learned Lord, Lord Lloyd, the Government would have been defeated. Government defeats are something that I usually rejoice in, but the fact is that I feel that it is right that we are consistent with the position that we took in Government and our view that, in the end, it is for the Home Secretary to make that judgment, rightly or wrongly. I do not think that it is a sad day for the Opposition. It would have been a sad day if we had taken an opportunist position.
The noble Lord, Lord Faulks, asked a very good question and I think that he got a very good answer. Forty-two days has a certain ring about it in the history of debating this legislation and I look forward to the debate at Third Reading when the noble Lord, Lord Henley, brings forward his amendment. At the end of the day, my noble friend Lord Harris and the noble Lord, Lord Bew, had it right: the amendments I am putting forward are modest ones. All they do is give the Government the opportunity to use exclusion orders for a very limited period to take us through a challenging period, with the option at the end—within just over a year—to come to this House with an order to remove those provisions from legislation and let this Bill follow its course. I still believe that that is, and would be, a sensible way forward, and I am disappointed that the Government are not going to take it.
The noble Baroness, Lady Hamwee, said that we are either equipped or we are not equipped. That is the Government’s position, to be either equipped or not equipped. They have made a great song and dance of getting rid of exclusion orders but have then said, “Just in case, we will have emergency legislation up our sleeve, and, by the way, there are certain circumstances when Parliament cannot be recalled, so we had better have it in this Bill as well”. We can talk about being equipped or not equipped: it is absolutely clear that the Government know that they might need these provisions in the future. That is why they are legislating for them, either through the emergency legislation, which is going through pre-legislative scrutiny at some point, or in this Bill. They ought to have welcomed the flexibility that my amendments would give them.
However, the most reverend Primate the Archbishop of York has advised me not to move the amendment on this occasion. He was a wonderful Bishop of Birmingham when I first met him. In this case, I will take spiritual advice and will not seek to press the House on this any further. I beg leave to withdraw the amendment.
Lord Henley
Lord Henley
My Lords, I beg to move Amendment 8, in my name. In doing so, I shall speak to Amendments 13, 30, 31, 45, 46, 47 and 48, all of which are in my name. Also in this group, I will touch upon Amendment 14, in the name of my noble friend Lady Hamwee, which is an amendment to my Amendment 13. These are a number of necessary technical amendments to the Bill. I hope that some noble Lords will have had the opportunity to read the letter that I sent last week explaining what each amendment achieves. However, for the benefit of the House and for the record, I should briefly explain why we need to make these amendments.
I shall start with Amendments 8 and 13. These amendments make two small but important changes to clarify the drafting of the residence and police reporting measures. The residence measure is intended to ensure that the individual can be required to reside at a specified address, and to remain there for specified periods overnight. The clear purpose of this is to manage risk. As part of this measure it may be necessary to require the individual to remain within the residence itself. This means that it could be necessary to prohibit them from entering any garden or outside area forming part of the property, or any communal areas in a shared property. As currently drafted, the provision does not necessarily make clear that the measure can be applied in this way. It is potentially ambiguous as to whether the requirement to remain at the residence includes any outside or communal areas. Therefore, it may be open to legal challenge on its meanings.
Baroness Hamwee
My Lords, I have Amendment 14 which is an amendment to the Minister’s Amendment 13. I am grateful for his confirmation that the wording that I have proposed is not necessary. I did not think that it was. I was relying on the word “and” at the end of the new paragraph (a), but I am glad to have that on the record.
Will it be open to an officer to direct reporting times? That presumably will be the case if the Secretary of State does not give a notice covering the matter. Will it always be the Secretary of State who gives that notice? The Minister will recall my concern that reporting should be required at a time which in general terms is reasonable and would particularly allow for the individual to carry out a course of study or to undertake work. As I probably said on the last occasion, one could not quite envisage applying for a job and saying to a prospective employer, “I am sorry, I am going to have to take two and half hours off three times a week in order to report in to a rather inconveniently located police station”. That was the reason for my amendment and if he can give any further assurances I will welcome them.
I welcome his amendment generally, because I think that it is helpful, and I also welcome Amendment 47. I did not have the technical considerations in my mind when I tabled this amendment at Committee stage. It was a much broader matter, but whatever the reason I am glad to see the paragraph going.
Can I ask the Minister a little more about Amendment 8? In the letter that he sent to your Lordships following the last stage giving the thinking behind all these amendments, which was very helpful, he said that in providing that an individual must stay within the premises,
“This is therefore a clarifying amendment. This is important for monitoring, enforcement and disruption purposes”.
Can I ask what is meant by “disruption” in this context? I would have expected that surveillance would be adequate to cover an individual being in the back garden. Presumably surveillance is going to be done largely through technology rather than through a pair of binoculars. Is there not electronic surveillance? Is it a matter of disrupting communications? If he is able to add a little flesh to that I would welcome it.
I am grateful to the Minister for his comments on my Amendment 14, which I will not seek to move when the time comes.
Lord Henley
My Lords, I hope that I can deal with my noble friend’s points. I am grateful to her for her comments. She asked whether it would be open to the police officer to direct reporting times. The point behind my amendments was that the Secretary of State would deal with such times. That would be in the order. Further directions may be given by the police in relation to someone coming to the police station but the times would be a matter for the Secretary of State.
As regards Amendment 8, we need to be able to disrupt any potential terrorist activities. For that reason one would not wish the individual to be able to leave the house and enter the garden at certain times as it might allow communication to take place on which it is not so easy to keep an eye. That was the reasoning behind government Amendment 8. I hope I have explained that clearly. If I have not, I will write to my noble friend in due course.
Baroness Hamwee
Baroness Hamwee
My Lords, in moving Amendment 9, I wish to speak also to Amendments 10, 11, 12, 20, 40, 42, 43 and 44. All these amendments, which stand in my name and that of the noble Baroness, Lady Stern, follow on from debates held in Committee. None challenges what I think is fashionably called the architecture of the Bill. All seek to ensure that within the framework of the Bill, and without harming the effectiveness of measures, TPIMs have regard to their impact on the individual, who has not been charged, let alone found guilty of any offence—in other words, under our legal system, he is innocent—and on his family.
I have spoken previously about the need to recognise the individual person at the centre of any proposed measure. This is a matter of human responsibility. The restrictions imposed through control orders have been very considerable and in some cases very damaging. I acknowledge and welcome the Government’s efforts to reduce the restrictions and to write legislation in a different way, spelling out the limits of restrictions, but there is still potential for a lot of damage. I suspect that, to an extent, this may depend on how a particular measure is applied. I welcome the assurances that the Minister gave at the previous stage but wish to pursue a number of matters a little further.
I mentioned the individual but, of course—the noble Lord, Lord Newton of Braintree, mentioned this—it is also a question of the individual’s family. It is difficult to imagine the impact of such a measure on children, wives—I have heard of at least one wife who has attempted suicide more than once—and the community in the widest sense. This aspect is in my mind directed also at the effectiveness of TPIMs in avoiding taking measures that may tip the individual, his more extended family, friends, acquaintances and associates into the very sort of action which the Bill seeks to prevent. There are restrictions on association and communication and I worry that they could have that effect.
Baroness Stern
My Lords, I support these amendments so ably spoken to by the noble Baroness, Lady Hamwee, and I express my gratitude to her for the tremendous amount of detailed work that she has done on this issue.
As I made clear at Second Reading and wish to make clear again, I very much appreciate the approach that the Minister is taking to the Bill and the improvements to the current regime that have been introduced. However, the noble Baroness, Lady Hamwee, has reminded us very usefully that at the centre of this is indeed a human being, and his family, who is subject to very demanding requirements to go at certain times to certain places, not to go into the garden, as the Minister has just explained, and to be subject possibly to 12 months’ imprisonment for failing to conform.
Perhaps I may concentrate solely on Amendments 40 and 42 to 44. Amendment 40 expresses the wish for a continuation of—and, I hope, improvement to—the Control Orders Review Group, which arose after many, many discussions in this House on the earlier regime. I look forward very much to hearing some reassurance from the Minister on a review group for TPIMs. Amendments 42 to 44, which concern oversight and review, go further than a projected review group. The measures that we are discussing here clearly will not lead to a complete deprivation of liberty but they will undoubtedly have a profound effect on the day-to-day life of the person who is subject to them and the family of that person. They are not compatible with living a normal life as we know it. Although, as the Minister made clear earlier, they are indeed preventive, they will feel—to use the word chosen by the noble and learned Lord, Lord Lloyd of Berwick—punitive. Their effect is punitive, and that is why we need to consider the proposals in these amendments. The person who is subject to these measures will feel that he is being punished, and the people implementing the measure, who come from a law enforcement background and are familiar with punitive measures, will see that the person has had imposed on him measures that are, in effect, punitive. These measures will indeed affect the liberty of the person and they will also affect very directly the lives of that person’s family members, so the family will also feel that they are being punished. In all cases where we punish, we have systems in place to ensure that the treatment of those undergoing sanctions and measures is subject to independent inspection and oversight.
Lord Henley
My Lords, I am grateful to my noble friend and the noble Baroness, Lady Stern, for speaking to this fairly varied group of amendments. My noble friend said that she had grouped them together because the Whips were very keen on that process. I think that the Government are often keen on grouping things together because that can speed up debate, particularly when the amendments are essentially probing.
The noble Baroness is quite rightly seeking some reassurances and statements from the Government on what certain things mean. I shall work through the amendments in the order that they are tabled and shall try to satisfy my noble friend and the noble Baroness, Lady Stern, about what is meant and shall try to deal with their concerns.
I start with Amendment 9. My noble friend asked for clarification on what is meant by an “area of a specified description”. I confirm that allowing the Secretary of State—the Home Secretary—to impose restrictions in relation to both places and areas of a specified description is necessary to avoid unhelpful uncertainty about whether somewhere is most accurately defined as a place or an area. For example, it may be clear that airports qualify as places of a specified description, but it may be less clear that all the areas surrounding an airport, such as car parks, drop-off points or other areas connected to or adjacent to an airport, are captured. In conjunction with the rest of paragraph 3, the provision therefore gives the Secretary of State the required powers to restrict individuals entering places or areas where this is necessary for reasons of national security. Again, I can assure my noble friend that the scope of that area will not be what she described as a huge geographical area.
Turning to Amendment 10, I am happy to confirm that the power for a constable to give directions, as provided by the movement directions measure in Schedule 1, extends only to directions in relation to measures imposed under this Bill. This is because of the effect of Clause 30(1) and Clause 2. The result of these provisions is that the reference to “specified measures” in the movement directions measure is a reference to the terrorism prevention and investigation measures imposed under this Bill and specified in the TPIM notice.
In relation to Amendment 11, I can confirm that, for the purposes of the financial services measures in Schedule 1, “financial services” means any service of a financial nature. This includes banking and other financial services, but is not limited to them. Where paragraph 5 provides that the restriction on the possession of cash does not extend to cash held by a person providing financial services, it therefore includes financial services provided by members of other professions such as the noble Baroness herself, lawyers or estate agents. That would involve them holding money on behalf of an individual.
Amendment 12 would mean that the Secretary of State could not restrict the individual’s ability to associate or communicate with “specified descriptions of persons”. This provision is necessary because, in appropriate cases, it may be necessary, for example, to prevent the individual communicating, without prior permission, with persons living outside the United Kingdom. In such a case, it is not practicable or possible to specify all the named individuals to whom this applies. In the case of this particular example, I can reassure my noble friend that this would not prevent the individual seeking permission to speak to particular individuals, such as family members, who are abroad. The effect of the provision would be that the individual would need to provide further details about individuals with whom he wished to communicate in order to allow the Secretary of State to make an informed decision about whether to permit the communication.
In relation to Amendment 20—an amendment to Condition D in Clause 3—I can confirm that, as currently drafted, the legislation will require the Secretary of State to consider issues of proportionality as part of the consideration of the necessity of individual measures to be imposed under a TPIM notice. I can therefore assure my noble friend that the additional words that she suggests are not necessary in order to achieve the desired effect.
I turn now to Amendment 40. The noble Baroness’s amendment would add two new subsections to Clause 11. That clause currently simply requires the Secretary of State to keep under review whether Condition C—the necessity for measures—and Condition D—the necessity for specific measures—continue to be met. Amendment 40 would put on a statutory footing the requirement for a review group of officials to consider cases on a quarterly basis and to report to the Secretary of State. This review function is undertaken in the control order context by the Control Order Review Group. I can confirm that a TPIM review group will be established for the new regime to perform this function on a quarterly basis.
I turn finally to Amendments 42, 43 and 44. They build on proposals that my noble friend put forward in Committee. When debating my noble friend’s previous set of amendments in this area, I made the point that the measures that can be imposed under TPIM notices are intentionally more limited in nature than those that can be imposed under control orders, with lengthy curfews, compulsory relocation to another part of the country and total bans on communication equipment no longer allowed. I also made clear that the Bill as drafted—together with the relevant control order case law and the duty of the Secretary of State to act compatibly with convention rights—already ensures that the Secretary of State will give careful consideration to the impact of the measures on individuals and their families, including the impact on their mental health, before imposing the TPIM notice and while it remains in force. There will be, as of course it is right that there should be, careful and ongoing consideration of the impact of the measures on the individuals subject to them and on their families, including any impact on their mental health. This will be thoroughly considered as part of the regular reviews that will take place under Clause 11.
There is an extensive framework of judicial oversight and full appeal rights in relation to the TPIM notice, the measures specified in it and their impact. The individual will have the opportunity to make their own representations on these matters, including submitting assessments prepared by any person they wish. If a measure is considered to have a disproportionate impact, it will be revoked by the Secretary of State, and if it is determined by the courts to have such an impact, the courts will be able to quash it or direct its revocation or variation. We should also remind ourselves that the overriding purpose of the Bill is to protect the public from a serious and sustained risk of terrorism. It is therefore right that the Government should weigh their responsibility to protect the public heavily when considering the proportionality of their decisions.
The Home Secretary can be faced with difficult decisions when considering what restrictions are necessary and where to strike the balance of proportionality between the rights of the individual and the rights of the wider public to be protected from that person. The High Court has specifically accepted that an individual’s mental health does not automatically trump the national security case against him and the right of the public to be protected from the risk of terrorism. This serves to underline the difficult balancing act that will have to be conducted by the Home Secretary in each and every case.
The Home Secretary’s decisions are necessarily informed by sensitive information about individuals’ involvement in terrorism-related activity and the threat they pose to the public. It is this information that tips the other side of the scales and against which the impact of the measures must be weighed in order to arrive at a reasonable and balanced decision that accords sufficient weight to the need to protect the public. This information would not be available to the commission proposed by these amendments, but it will be fully taken into account by the courts and the Home Secretary when reviewing the ongoing necessity and the impact of the measures.
It therefore seems that the amendments put forward by my noble friend do not provide exactly the right balance. The approach I have outlined of careful ongoing review and rigorous judicial oversight strikes the right balance between protection of the rights of the individual and protection of the public from a risk of terrorism. It will ensure that the measures imposed are both necessary and proportionate. I hope the explanations of the earlier amendments and reassurances on the last three will be sufficient for my noble friend and the noble Baroness, Lady Stern. I hope my noble friend will feel able to withdraw her amendment.
Baroness Hamwee
My Lords, before the Minister sits down, can he say whether the Government propose to publish the terms of reference of the TPIM review group? He may not be able to answer that.
Baroness Hamwee
My Lords, I certainly do not intend to press any of these amendments and I am grateful to the Minister for his explanations. I will comment on three of them. I am interested that a solicitor holding his client’s money might be providing financial services but am happy to accept that interpretation. On the first of the amendments, I take the Minister’s point about needing to use the correct terms, but I hope that every measure will be absolutely clear about the area as well as the place which is included—not, for instance, an “area around” or the “environs of” Heathrow Airport. If necessary, it would be proper for a map to be produced so that the individual as well as everybody else can be absolutely certain about what area is designated for this purpose. On the proposal for an independent commission, I am not seeking to challenge the architecture of the Bill and I am well aware of the court’s ruling that national security is not to be trumped. However, I hope that the Government and the new review group will take into account the points I have made, and the noble Baroness, Lady Stern, has made so powerfully, about, among other things, the need for an independent take on what is going on and to involve in the assessments people of experience and, where appropriate, non-members of the review group with that relevant experience. Having said that, and having thanked the Minister, I beg leave to withdraw Amendment 9.
Lord Henley
(a) to report to such a police station, at such times and in such manner, as the Secretary of State may by notice require, and(b) to comply with any directions given by a police officer in relation to such reporting.”
Lord Lloyd of Berwick
Lord Pannick
My Lords, with the consent of the noble and learned Lord, Lord Lloyd of Berwick, I shall speak to Amendment 16, which is in my name and the name of the noble Lord, Lord Macdonald of River Glaven.
A TPIM notice may be issued under the Bill by the Secretary of State where she reasonably believes that an individual is or has been involved in terrorism-related activity. Amendment 16 seeks to substitute a test of balance of probabilities. The argument in favour of this amendment is very brief. If the Secretary of State is not satisfied on a balance of probabilities that an individual is involved in terrorism-related activities, surely there is no justification for taking these exceptional legal measures against him.
I asked the Minister on the first day in Committee, at cols 312 to 313 of Hansard, whether there would be any impediment to national security if the balance of probabilities test were to be adopted. The Minister did not suggest that any such conclusion had been reached in any of the reviews that had been undertaken. I remind your Lordships also that on the first day in Committee, at col. 301 of Hansard, the noble Lord, Lord Carlile of Berriew, with his extensive experience, said that he would have no difficulty if the balance of probabilities test were to be the test adopted in the Bill. I hope the Minister will be able to accept the amendment.
The Deputy Speaker (Baroness Harris of Richmond)
My Lords, I must tell the House that if Amendment 15 is agreed to I cannot call Amendment 16 by reason of pre-emption.
Lord Lloyd of Berwick
My Lords, I support the amendment spoken to by the noble Lord, Lord Pannick. It covers the same ground as my amendment, which would have amended Clause 6 by substituting civil standards of proof for “obviously flawed”. I agree with every word that the noble Lord, Lord Pannick, has said.
The great advantage of the balance of probabilities as a test is that it is flexible. At the more serious end, it approaches the criminal standard. There could hardly be a more serious finding to make against an individual, as has been said often today, than that he has been engaged in terrorist activity. Therefore, the burden of proof in these cases ought to approach the criminal standard. There is not the slightest justification for a burden of proof which is less than the civil standard.
With one exception there is no precedent that I can find in English law for a serious finding, such as is involved here, being made on the basis of reasonable belief. In the earlier debate I referred to many instances of prevention orders being made by the civil courts, some in serious cases such as sexual harm and so on, and in every case the burden of proof has been the balance of probabilities, and so it should be here.
Lord Macdonald of River Glaven
My Lords, Clause 4 of the Bill indicates that the finding which will be made in relation to a TPIM is that an individual has been involved in,
“the commission, preparation or instigation of acts of terrorism”;
or in,
“conduct which facilitates the commission, preparation or instigation of such acts, or which is intended to do so”;
or in,
“conduct which gives encouragement to the commission, preparation or instigation of such acts, or is intended to do so”;
or in,
“conduct which gives support or assistance to individuals who are known or believed by the individual concerned to be involved in”,
such conduct.
This is a very grave finding. As I suggested earlier, it is a finding which justifies a standard of proof on the balance of probabilities rather than reasonable belief. I support the amendment for the reasons that have already been set out.
Baroness Kennedy of The Shaws
My Lords, I, too, support the amendment. It was always a great source of regret and sorrow to me that during Labour’s years in government we saw an erosion of the standards of proof on many different fronts. I remember getting support from the Conservative Benches and agreement that erosions of the standard of proof were taking place. Therefore, this rather strange volte-face by the coalition Government has come as a surprise to me. I want the Government to think again about this erosion of the standard of proof. As noble Lords who have already spoken have said, the consequences are serious. This House should not contemplate having anything less than the balance of probabilities.
Lord Judd
My Lords, I, too, support the amendment. Inevitably my argument relates back to what I said on a previous amendment, but it is absolutely crucial that we should have the maximum possible support across all communities for what is being done. If the Secretary of State is to have these great powers, which the House has reaffirmed today, then we must fall over backwards to ensure that justice is nevertheless seen to be done, and not just done. In that sense, it must be very convincing indeed when the Secretary of State acts. The amendment is wise and sensible. The absence of the provisions in the amendment again undermines the battle for the hearts and minds of the impressionable young.
Lord Mackay of Clashfern
My Lords, we have to bear in mind that as the Bill now stands, the initiator of this procedure is the Secretary of State with responsibility for national security. The Secretary of State has available to him or her all the information that the state can provide, including on a secrecy basis, on these matters.
When a court is deciding something, the balance of probabilities is a suitable standard because it is not expected to believe one thing or the other; it is to accept the balance of the evidence one way or the other. Requiring the Secretary of State to believe is a higher standard than the balance of probabilities. I cannot believe that the Secretary of State would be entitled, on a mere balance of probabilities, to come to the belief that this is what happened.
Of course, Secretaries of State might be rather special, and they might be able to come to a faith and belief without much in the way of evidence. However, that is taken care of by the language in the Bill as it stands, that the belief must be reasonable. So it is not only belief but a reasonable belief. In other words, the Secretary of State must have available to him or her information as a result of which he or she comes to be convinced that the person has engaged in the activities that the noble Lord kindly laid out for us. I agree that it is an extremely serious matter but the language in the Bill is suitable to a situation in which a decision has to be made, not by someone who has to review the evidence as an impartial judge but by someone who comes to the evidence with the executive responsibility to take the necessary action. In my view, this requirement that the Secretary of State should reasonably believe that the person in question has been involved in these activities, is a stronger and more reliable basis for going forward than a mere balance of probabilities. It is difficult to see how one could be convinced on the balance of probabilities alone.
Lord Lloyd of Berwick
The noble and learned Lord refers to a “mere” balance of probabilities. He will of course be aware of the many cases decided in the highest courts where what he calls a “mere” balance of probabilities can approach the criminal standard, specifically in cases such as these.
Lord Mackay of Clashfern
I agree with that and am very much aware of it, but it is still a mere balance of probabilities. Although it can go very close to the criminal standard, it is still a balance of probabilities that is being used, and I would say that the criminal standard requires a jury in effect to believe—to be sure—that this is what happened. I regard “reasonable belief” as a very strong and appropriate phrase to use where the person initiating the procedure is the person with the responsibility to have before him or her all the necessary material.
Lord Newton of Braintree
My Lords, having stuck my neck out first one way and then the other in the earlier part of our proceedings, I had decided to keep my head down on this one. I want to say to my noble and learned friend, given the views I expressed in the House earlier in the day, that he has made me feel better. It may be respectable to keep my head down, so I shall continue to keep it down.
Baroness Hamwee
My Lords, that was a very obvious keeping-down of the head, done in a rather energetic fashion.
I would like to raise a point which I raised—obviously rather ineffectively—at the last stage, and that is to ask why the Government make a different provision for the generality of the Bill than for the temporary power provided in Clause 26? Under that power, the Secretary of State can impose enhanced measures on individuals whom she,
“is satisfied, on the balance of probabilities, are, or have been, involved in terrorism-related activity”.
It does not seem to me that the answer to that question can be that the situation is different. The urgency of the situation—with Parliament not sitting and, as I understand it, a heightened state of security—relates to the ability of the Secretary of State to make an order. However, the balance of probabilities relates to the individual, not to the overall situation.
I am glad to see the noble and learned Lord, Lord Lloyd, nodding. I too feel better now, as it is obviously not a completely stupid question. I do not see where the distinction comes, as we would still be considering individuals. It may be that the noble and learned Lord, Lord Mackay, has answered the question for the Minister, I do not know.
Lord Henley
I am just wondering whether the Opposition want to comment on this matter.
It is very important to start by reminding the House what we have under control orders, what we are proposing and what the amendment proposes. Under the control orders, the standard of proof was a “reasonable suspicion” by the Secretary of State. We considered this, as your Lordships are well aware, in the counterterrorism review, and it was concluded that it was necessary to raise the test of involvement in terrorism-related activity from “reasonable suspicion” to “reasonable belief”. Reasonable belief is considerably stronger than reasonable suspicion, as my noble and learned friend Lord Mackay has said. We have raised that standard, as is right and proper. It will provide an additional safeguard, and is consistent with the approach taken in the Terrorist Asset-Freezing etc. Act 2010.
It is obviously a matter where we have to consider proportionality and the appropriate balance. Again, I have to weary the House by stressing the need for that balance. We consider that a change to reasonable belief will not be prejudicial to national security. It is right that the Secretary of State should be able to take action to protect the public in circumstances where she reasonably believes that an individual has been involved in terrorism-related activity and the measures are necessary. I was grateful for the support of my noble and learned friend in this matter.
It was right to raise the standard of proof to reasonable belief, but we do not believe that it is necessary to go as far as a balance of probabilities, which might be a more appropriate action if this amendment had been considered at the same time as the first amendment we debated and if this were a matter for the courts to decide. As it is, this is a matter for the Home Secretary to decide, and we believe that this is the right action and that a move to a balance of probabilities would provide the wrong balance for the main TPIM regime in terms of ensuring that the public will be protected.
My noble friend Lady Hamwee went on to mention the enhanced TPIM Bill. That is a different matter where we are obviously considering much more draconian measures should they ever, sadly, be necessary. That is something that will be considered in due course by this House and another place as part of the scrutiny of the draft legislation. For this Bill, we believe that getting the balance right means sticking with reasonable belief, which is a considerable improvement on reasonable suspicion. I hope, therefore, that the noble Lord, Lord Pannick, will feel able to withdraw his amendment on this occasion.
Lord Pannick
My Lord, I do feel able to withdraw this amendment. I do so in particular because the noble and learned Lord, Lord Mackay of Clashfern, tells the House that reasonable belief, in the circumstances, is a stronger test than balance of probabilities. I beg leave to withdraw the amendment.
Lord Henley
Lord Henley
My Lords, I spoke to this amendment with Amendment 8. I beg to move.
Lord Henley
Lord Henley
Again, I spoke to this amendment with Amendment 8. I beg to move.
Lord Lloyd of Berwick
“Time limit on measures under section 2
(1) Measures imposed under section 2 shall remain in force for the period of one year, or such lesser period as the court shall determine.
(2) Measures may be renewed for a further period of one year, and no more, on a further application to the court if the court is satisfied on the civil burden of proof that the individual has been involved in terrorist related activity since the imposition of the original measures.”
Lord Lloyd of Berwick
My Lords, very briefly, Clause 5 enables the Secretary of State to renew measures for a further year if conditions A, C and D are satisfied. He does not need to be satisfied of condition B, that there has been fresh terrorist activity during the first year. Amendment 39 has two separate purposes. First, it requires the Secretary of State to be satisfied of fresh terrorist activity during the first year before he automatically renews for the second year. Secondly, it places an absolute limit on renewal of two years. It cannot go beyond that.
Curiously enough, this amendment might have received some support from the noble Lord, Lord Carlile of Berriew. If I remember correctly, it was his view that somebody who had been subject to a control order for two years would have little further potential use as a terrorist. He was rather minded to pose—or had some sympathy with posing—a limit of two years on the extent to which these measures can be renewed.
The Minister said at an earlier stage that it is not the Government’s intention to use measures of this kind to warehouse individuals who are suspected of being terrorists. Yet, as we know, they have been warehoused—if that is the right word—for periods of three, four and five years without ever having been charged or tried. That is happening now. The purpose of this amendment is to ensure that that does not happen in future. There should be a final limit of two years. I beg to move.
Lord Rosser
My Lords, very briefly, this amendment seems to provide for a TPIM to remain in force for no more than a year or a lesser period determined by the court. It also provides that the measures may be renewed for a period of no more than one further year if, on application to the court, the court is satisfied on the civil burden of proof that the individual has been involved in terrorist-related activity since the imposition of the original measures. If that is correct, our view is that those considered to be engaged in serious terrorist activity are not often likely to have so changed their intentions within a period of 12 months. For that reason, it would not be appropriate to end the order. The amendment suggests that it would be, unless there was evidence of further terrorist-related activity. If we understand the amendment correctly, our view is that it would detract from the ability to protect the public. We are not inclined to support it.
Lord Henley
My Lords, I get the impression that the House wishes to move on. I never understand these things—I do not know whether the noble Lord, Lord Hunt, wishes to go out for dinner or whatever—but I will endeavour to be relatively brief.
I was amused for the second consecutive amendment as first the noble Lord, Lord Pannick, and then the noble and learned Lord, Lord Lloyd, cited my absent noble friend Lord Carlile as being a likely supporter of their amendments. It is easier to make these assertions in his absence. We will invite my noble friend to look at Hansard in due course and decide whether he necessarily agreed with the noble Lord or the noble and learned Lord. I just say that in passing.
I thank the noble and learned Lord for his explanation, which would obviously change the provisions relating to the period for which a TPIM notice can have effect. I will set out our thinking on this issue. In his model, there would be a requirement for new terrorism-related activity to have taken place while a TPIM notice is in force, in order to allow that TPIM notice to be extended into a second year. Again I must dare to use the word “balance”. We do not think that this strikes the right balance in the context of preventive orders of this kind. Indeed it would undermine the ability of the Government to protect the people of this country from a risk of terrorism.
The counterterrorism review carefully considered the issue of time limits and how long restrictions such as these should remain in force on the basis of the same evidence. It concluded that extension of a TPIM notice for a further year should only be allowed on one occasion if the notice continues to be necessary in order to protect the public. After that one extension—up to two years—new evidence would be required to impose a new TPIM notice. That is a significant move away from the position in control orders, which can potentially be renewed indefinitely on the basis of the same evidence where the control order remains necessary.
We are of the view that the ongoing necessity for the notice can be made out for a second year on the basis of the original terrorism-related activity. This is particularly so where that activity is very serious, suggesting that the individual’s mindset and intentions, perhaps to do serious harm, will not have changed after just one year subject to restrictive measures. Indeed, there are many court judgments in the control order context confirming that, for the purposes of public protection, ongoing necessity is not dependent on new terrorism-related activity since the imposition of the control order. We do not believe that the new terrorism-related activity should be required in order to extend the original TPIM notice for that one year.
While the Government’s view is that TPIM notices should not be used to warehouse people, and should not be imposed indefinitely on the basis of the same evidence—as can happen under control orders if the statutory test continues to be met—a notice that can only last one year without evidence of new activity undertaken while subject to the measures will not be sufficient to disrupt the threat posed by the individuals concerned in many cases.
Again I come back to the question of balance. We believe that the balance is about right in what we propose—that is, one year with the ability to extend it for another year. If there is to be any extension beyond that, we need new evidence of terrorist-related activity of one sort of another, as set out in the Bill. The limits proposed by the noble and learned Lord’s amendment shift the balance too far the other. I hope that he will be happy to withdraw his amendment on the basis of that explanation of balance.
Lord Lloyd of Berwick
My Lords, I am sad, but nevertheless I withdraw the amendment.
Lord Henley
“(b) on summary conviction in England and Wales, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum, or to both;(ba) on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum, or to both;”
“( ) In relation to an offence committed before the commencement of section 154(1) of the Criminal Justice Act 2003, the reference in subsection (3)(b) to 12 months is to be read as a reference to 6 months.”
Lord Henley
“(12) The Secretary of State must obtain the consent of the Scottish Ministers to the inclusion in a temporary enhanced TPIM order of any provision—
(a) which would be within the legislative competence of the Scottish Parliament if it were contained in an Act of that Parliament, or(b) which otherwise confers functions on the Scottish Ministers.(13) But subsection (12) does not apply to any provision of an enhanced TPIM order which—
(a) applies (with or without modifications) an enactment contained in, or amended by, this Act, or(b) otherwise corresponds to such an enactment.”
Lord Pannick
“( ) This Act expires at the end of the period of 1 year beginning with the day on which it commences.
( ) The Secretary of State may, by order, revive the Act if a draft of such an order is laid before and approved by an affirmative resolution of both Houses of Parliament.
( ) An order under this section expires a year after the day on which it is made.
( ) An order made by the Minister under this section is to be made by statutory instrument.”
Lord Pannick
My Lords, your Lordships have come to the final amendment on Report. Amendment 53 in my name and in the names of the noble Baroness, Lady Hayman, and the noble Lord, Lord Hunt of Kings Heath, would require an annual review of this legislation in Parliament as is currently the case with control orders.
Our debates at Second Reading, in Committee and today on Report have confirmed that the Bill addresses a fundamentally difficult problem for a free society, which is afflicted by the scourge of terrorism. The Bill, regrettably but necessarily, confers powers on the state to impose substantial restrictions and detriments on persons suspected of involvement in terrorism but against whom no proceedings are brought in the criminal courts. These orders will be imposed by the Secretary of State as an administrative matter, given that your Lordships rejected the amendment proposed by the noble and learned Lord, Lord Lloyd of Berwick. On any view, these are exceptional measures in a free society.
It is vital that the continuing need for such exceptional measures be examined every year. This will serve three important purposes. First, it will impose a discipline on Government. Civil servants and Ministers will need every year to consider the continuing case for the provisions and they will need to defend them in Parliament. Secondly, this will provide a means by which the continuing need for the measures can be explained to the public every year, and in particular to those sections of the community that are doubtful as to the need for the measures and their fairness. Thirdly, of course, it will give us—Parliament—an opportunity to express our view every year as to whether the measures continue to be justified. Both your Lordships’ Constitution Committee, of which I am a member, and the Joint Committee on Human Rights have supported the amendment. Indeed, your Lordships’ Constitution Committee in its Report questioned whether it is constitutionally appropriate not to have annual reviews of what it described as a scheme of “extraordinary executive powers”.
In Committee on 1 November—I refer to Hansard cols. 1131-1132—the Minister made three main points. First, he said the Bill contains adequate protection because it provides for a sunset clause after five years. However, 2016 is a long way away, and annual reviews are needed for all the reasons I have given. Secondly, the Minister said the Bill is the product of detailed scrutiny and has struck the right balance in its substantive provisions. The point is that the Bill contains exceptional measures, the need for which will depend on the nature and extent of the threat posed at any particular time. However confident noble Lords may be that the contents of this Bill strike the right balance, this is a context where annual scrutiny is essential. Thirdly, the Minister emphasised that the Secretary of State has power under Clause 21(2) to repeal the powers. However, that is no substitute for an annual obligation on Ministers to come before Parliament so that we can debate, and Ministers can explain to us and to the wider public, whether these wholly exceptional measures are still needed. I beg to move.
Baroness Hayman
My Lords, the noble Lord, Lord Pannick, has spoken with his usual clarity and force and that means I can be very brief. It was the issue of time limiting the provisions of the Prevention of Terrorism Act 2005 that six years ago brought me into conflict with my then own—and then government—Front Bench. I am delighted that the noble Lord, Lord Hunt of Kings Heath, has put his name to the amendment. I have to say, however, that like the noble Lord, Lord Newton, I was disappointed at his attitude on Amendment 1. He invoked the principle of consistency. I think he ought to be careful about that when we review this particular amendment, given that the Labour position then on time limiting was consistently to oppose any form of time limiting on the 2005 Act until two thumping defeats in this House and some fairly vigorous ping-pong.
Lord Hunt of Kings Heath
I am most grateful to my noble—and, dare I say, socialist—friend for raising that. The point I raised on our debate on the first amendment was consistency with the legislation, which we took through and which we were operating.
Baroness Hayman
My Lords, I have always felt that consistency was a dangerous principle for politicians to invoke. I make a serious point here. Of course there is a virtue in consistency, but there is also a Galbraithian view on thoughtless and mindless consistency. I have always felt that the overwhelming obligation for politicians was to be willing and able to justify their inconsistencies as well as to have underlying consistency of principle. However, this is all by way of an aside and I hope the House will at least feel that I am consistent in my view.
As the noble Lord, Lord Pannick, has said, when we are departing from the normal procedures and principles of the criminal law—and there are reports of various committees, both Joint Committees and committees of your Lordships House about the exceptional nature of the provisions in the Bill—there is an obligation upon us as parliamentarians to keep that under review, and always be willing to reassess what we have done and how we have done it.
In the words of the noble Lord, Lord Faulks, in our debate in Committee—I hope that I am not paraphrasing him—we have got it basically right in the Bill and there is no point in having an annual squabble about it. However, I do not see this as an annual squabble. I see it much more as the noble Lord, Lord Pannick, did, as the opportunity to reassess both the need and the efficacy of what we have put in place. These are difficult balances to strike. We do not get them right and perfect every time. There is a discipline imposed by Ministers having to justify each year the continuation of provisions that all of us recognise as important and exceptional and departing from principles that are equally fundamental to how we conduct ourselves as a society.
I feel very strongly that it is not an overwhelming burden to put on Ministers to ask them to have the respect for Parliament and the recognition of the departure from the norm that the measures in this Bill contain once a year, to reassess and bring before Parliament a renewal order that asks whether we have got it as good as we can get it. Therefore, I hope that the House will support the amendment tonight.
Lord Mackay of Clashfern
My Lords, I would like warmly to support this amendment. It is absolutely clear that this procedure is a very special one, outside the ordinary system of courts of law and the like. It is justified on the basis of need by those familiar with the terrorist threat that our nation faces. In the nature of things, that threat must vary, and it must be right that this Parliament should have an opportunity annually to review such special procedures as these. However satisfied we may be—and, obviously, different people will be satisfied to different levels whether the balance is right—it is an altogether exceptional procedure.
The noble Lord, Lord Judd, said earlier that justice must be seen to be done. This is not a procedure in which that is going to happen; in the nature of the procedure, it does not have that characteristic. Therefore, it is highly important that we have a provision that enables us to review each year whether or not this type of procedure is still necessary and efficacious. I agree with everything that the noble Baroness, Lady Hayman, said about this. I found valuable her exposition of how politicians should be consistent, and if they happen to be inconsistent they should have an explanation for it—not just that they have changed sides.
Lord Macdonald of River Glaven
My Lords, I support the amendment for reasons already advanced. For my part, I have no desire at all to see this sort of scheme become a normal and conventional part of our legal arrangements; it is not, for all the reasons that noble Lords have repeatedly advanced this afternoon. It is an exceptional scheme, and it is important that it continues to be seen as such. The amendment lays it bare; it mandates appropriate and continuing scrutiny, engaging the regular attention of this House and providing reassurance that these measures will not continue for a moment longer than they are required or necessary. A strong part of providing that reassurance will be annual scrutiny by this House of the continued necessity for such a scheme as is undoubtedly going to pass into law.
Baroness Kennedy of The Shaws
My Lords, I, too, support the amendment. I am not going to take up the time of the House, because I think that the arguments are simple. It is about the exceptional nature of this shift, which requires us to keep it under scrutiny. I remember having conversations with colleagues when we were discussing control orders, and hearing repeated over and over again in this House how important it was that liberty is maintained and that requires eternal vigilance. That is why when you depart from the norms that are in our system you have to have them under review as often as yearly.
I know that the Minister speaks passionately about liberty—I have heard him do so. I remind him that that vigilance requires that we keep this constantly in front of us, and I think that once a year is not asking too much.
Lord Newton of Braintree
I have three prefatory remarks. First, I apologise to one of my noble friends, to whom I had given the impression that I might simply pack up my tent and go away. Actually, I got so interested that I am still here—and from that she will know that I may not be as totally supportive as she would like.
Secondly, I would just like to say what a joy it is that the noble Baroness, Lady Hayman, is now back in our deliberations rather than presiding over them as Lord Speaker, and to say how good a speech she made alongside that of the noble Lord, Lord Pannick, in supporting the amendment. I will not follow her down the line of discussing obstinacy versus consistency as a virtue, but I am bound to say that one thing that I have observed in government over the years is that when consistency becomes obstinacy, which is what happens on too many occasions with politicians, it is a danger and not an asset.
Thirdly, I would say to my noble and learned friend Lord Mackay, who I was very keen should speak before me, that he has again given me a greater cloak of respectability than I normally have on these occasions. The House will realise from that that I agree entirely with what my noble and learned friend said, and I hope the Government will think again about this, as the case is clear, compelling and strong.
Lord Judd
My Lords, personally, I have the unease that in all that we have done with these special arrangements there is a danger that historically we will have proved inadvertently—maybe—to have given a victory to the extremists and terrorists, because we have abandoned in this area of the administration of justice the principles that we hold dear and believe to be fundamental to our whole system of society and law.
It is absolutely essential that the Executive have to demonstrate all the time why such a risk must be taken and why it is necessary to have these exceptional measures. For that reason, the responsibility is always with the Executive to justify what is being done and therefore to review the process at least once a year is the very least that we can settle for.
Lord Faulks
My Lords, consistency has become something and since I opposed this amendment on the last occasion I intend to be consistent in opposing it on this occasion.
Of course, the arguments are extremely beguiling in favour of an annual review. Any provision which threatens the liberty of the subject demands anxious consideration at every level. But there is a difference between what happened in 2005 and what we are confronted with today. I am sure that those who brought in those provisions—those exceptional and extraordinary measures—hoped that they would not be necessary for more than a short period. Unfortunately, that has not proved to be the case. This Bill is the result of a careful and thorough review of counterterrorism and of mature reflection by a number of people that, sadly, powers of this nature need to remain. There have been important modifications to these powers, including the higher threshold for the Secretary of State before deciding that there should be such provisions and the removal of the relocation measures. There has been a degree of sensitivity over how potentially extreme the provisions are, but the legislation has been the result of a mature consideration and has been scrutinised in a thoroughly orthodox way through both Houses of Parliament. It has not been the result of an accelerated procedure.
I respectfully suggest, although entirely appreciating the arguments that such provisions need regular review, this has had a thoroughgoing review. It can be reviewed again after the end of this Parliament, and I respectfully ask the House to consider rejecting the amendment.
Baroness Hamwee
My Lords, the noble and learned Lord, Lord Lloyd of Berwick, expressed a certain weariness when he spoke on this issue in Committee. I do not think that he used the words “ritualistic” or “formulaic” but that may have been what he had in mind when he referred to the way some of the control order debates seemed to be going. I share that concern, but it leads me to say that we should make sure that renewal of this provision is not ritualistic or formulaic. We should take care to avoid that. However, it is not an argument for saying that we should not undertake that renewal.
We will, I am sure, be told by the Minister that we can debate the issue at any time that any of us succeeds in putting down a debate, and that the Government could repeal TPIMs at any time. Neither of those claims is an answer to the points that have been made. I urge the Government, if they lose the Division that is about to come, to turn it into a virtue and explain annually why it is that any renewal is required. The term “trust” was used quite a lot at an earlier stage in this Bill. Trust does need to be renewed, as well as everything else, to take both your Lordships’ and the country with them. The Government should regard this as an opportunity, not something that should be pictured in any way as a defeat.
Lord Rosser
My Lords, I will be brief. Our own Joint Committee on Human Rights said that the TPIMs remain,
“an extraordinary departure from ordinary principles of criminal due process”.
It went on to recommend that the Bill should also,
“require annual renewal, and so ensure there is an annual opportunity for Parliament to scrutinise and debate the continued necessity for such exceptional measures and the way in which they are working in practice”.
Your Lordships’ Constitution Committee, as the noble Lord, Lord Pannick, said, also questioned whether it was constitutionally appropriate for the extraordinary executive powers involved in TPIMs to remain in being for a lengthy period of time. Whatever one’s views on the need for TPIMs, these are considerable and exceptional measures, and it is surely right and appropriate that Parliament should—as happens currently with control orders—continue to have the opportunity and the duty to decide each year whether the situation remains such that the measures in this Bill and the associated powers should continue in being or instead be allowed to expire.
The fact that debates on the Bill are taking place now does not affect the necessity and appropriateness of proper consideration each year by Parliament of whether the circumstances remain such that these powers, and the way in which they are used and operated, are still needed for a further period of time. It remains to be seen whether the Minister’s position has changed on this issue, but if the noble Lord, Lord Pannick, decides in the light of the Minister’s reply to test the opinion of the House, we should support his amendment.
Lord Henley
My Lords, perhaps I may say how grateful I am to the noble Lord, Lord Pannick, for setting out his amendment and explaining it so carefully. I am also grateful that he set out the arguments I put forward both in Committee and at Second Reading. I will go through them again because I think that the House would like to hear them, and I might be able to persuade noble Lords of the merits of my position. I will not follow the second speaker in the debate, the noble Baroness, Lady Hayman, in her strictures to her own former Front Bench about consistency. I will leave that as an internal family matter that they can sort out among themselves. Consistency is important on some occasions, but that is a matter for the noble Lords, Lord Hunt and Lord Rosser, to consider in due course.
It is important that I set out the Government’s views on why we think it is not necessary to go to an annual review, as opposed to the five-year review that we are proposing. I will set out the argument on three major grounds, more or less as the noble Lord, Lord Pannick did. First—that dread word—we believe that renewal every five years strikes the right balance. It reflects the need to build in effective safeguards to ensure that powers do not remain in force longer than is necessary. It also reflects the competence of Parliament to apply intense scrutiny to legislation—no one can say that this legislation has not had intense scrutiny, and it has not been emergency legislation as on previous occasions—and to arrive at a position that will not need to be reviewed annually. Each new Parliament will have the opportunity to debate this view in the context of the situation at the time and to take its own view. This is in line with the length of Parliaments provided by the Fixed-term Parliaments Act.
Secondly, we believe that annual renewal is unnecessary. The Bill has been subject to full parliamentary scrutiny with the usual timetable allowing for a settled position to be reached. As I stressed earlier, by contrast the control order legislation had to be, necessarily, rushed through with very little opportunity for debate, although there was considerable debate in this House. That made annual renewal an appropriate safeguard for the 2005 Act. Admittedly it was a safeguard that was initially opposed—as the noble Baroness, Lady Hayman, reminded us—by the Government at the time, but it is one that is not necessary in respect of this Bill.
I stress that there are other significant forms of oversight and scrutiny. There will be the annual report by the independent reviewer of terrorism legislation; there will be quarterly reports to Parliament by the Secretary of State—she must report quarterly on the exercise of these powers under the Act—and there will be the usual post-legislative scrutiny which requires a detailed memorandum on the operation of the Act to be submitted to the relevant departmental Select Committee and laid before Parliament. As we discussed when debating many of the earlier amendments and all earlier stages of the Bill, every individual TPIM notice will be carefully scrutinised by the courts.
Thirdly, I stress again—this point was raised by my noble friend Lady Hamwee and others—that there are other means by which the Bill can be amended or repealed. There is an order-making power to repeal the TPIM powers, and if it becomes clear that the powers are no longer needed—we would all welcome that occasion if it should happen—it will be possible at any time during each five-year period for the Home Secretary to repeal the powers by order. If it becomes clear that the powers should be changed, the legislation can be amended by Parliament at any time in the usual way.
We do not, therefore, believe that an annual renewal is necessary. We think a five-year review of these matters strikes the right balance. I appreciate that other noble Lords who have taken part in the debate have strong views on the matter and I understand the concerns of the noble Lord, Lord Pannick. However, I hope—although I doubt very much—that what I have said might persuade him on this occasion to withdraw his amendment.
Lord Mackay of Clashfern
My Lords, first, is it fundamental to the Bill being put before Parliament that the Secretary of State believes, at this moment and in the light of the information that she has, that the Bill is essential? Secondly, if that is the basis of the Bill being put before Parliament, can she say whether in a year’s time, after it passes, the situation will be the same?
Lord Henley
My Lords, the important point is that the Bill is the result of the counterterrorism review that my right honourable friend the Home Secretary initiated and which she reported on earlier this year. Following the review of counterterrorism legislation we came forward with the Bill and other parts of the package that we discussed at earlier stages. My right honourable friend therefore believes, as do I, that the Bill is fundamentally necessary at the moment. However, she has given herself a power, if she feels that the Bill is no longer necessary, to withdraw it. That power is set out in the Bill; I suppose that it is a Henry VIII power which many people would welcome on this occasion, but we would only withdraw the Bill if we felt that it was no longer necessary.
Lord Henley
What I was saying, if the noble Lord will allow me to continue my argument before he intervenes, is that we do not think that an annual review of this by Parliament is necessary: once during each Parliament should be sufficient. However, as I made clear, other reports from the independent reviewer and from my right honourable friend will come before Parliament to inform debate on these matters.
Lord Hunt of Kings Heath
All I wanted to say to the Minister was that while he referred to a Henry VIII clause, he might also have reminded his noble and learned friend of the other Henry VIII clause, which allows the Home Secretary in certain circumstances to go back to control orders.
Lord Henley
My Lords, the noble Lord said it for me. All I am saying is that the Bill can be withdrawn by my right honourable friend, should she so wish. Those powers are set out in the Bill.
Lord Pannick
My Lords, I am disappointed by the Minister’s response, although I admire his powers of advocacy in what I regard as a hopeless cause. This is an exceptional Bill. I am sorry that the Minister feels unable to respond to the wisdom and experience of other noble Lords who have spoken in the debate. The noble Baroness, Lady Kennedy of The Shaws, spoke of eternal vigilance. I hope that your Lordships will at least agree that annual vigilance is essential in relation to this Bill. I wish to test the opinion of the House.
London Olympic Games and Paralympic Games (Amendment) Bill
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text
Lord Rosser
“Security
(1) Section 6 of the London Olympic Games and Paralympic Games Act 2006 (Security) is amended as follows.
(2) After subsection (2) insert—
“(3) Three months prior to the start of the Games, the Government shall report to Parliament on the outcomes of consultations under subsection (2), with specific reference to the following—
(a) the number of police officers to be deployed,(b) the number of military or territorial forces to be deployed to undertake police duties,(c) the number of private security contractors to be deployed to undertake police duties,(d) the level of qualification and training of forces deployed under paragraph (c),(e) the cost of the total security operation,(f) national and border security preparations,in order that the Olympic Delivery Authority may effectively exercise its duties under subsection (1).””
Lord Rosser
My Lords, the amendment seeks to ensure that appropriate measures have been taken on security arrangements. It calls for the Government to report to Parliament on a number of specific issues, which are detailed in the amendment.
We had a debate in Committee about police numbers required at the Olympic and Paralympic Games when the Minister assured us that sufficient police officers will be available, albeit it does appear that this will be done on the basis of quite extensive and quite prolonged overtime working. Since that debate, further issues affecting security have come to light. One concerns what is happening—or perhaps more significantly, what is not happening—at our points of entry. Another concerns the use of security personnel, and another, the use of our Armed Forces. In Committee the Minister said that,
“it is quite possible that the Armed Forces will provide some specialist support … but the exact nature of this requirement is still to be agreed and a number of options are being explored”.—[Official Report, 25/10/11; col. GC 256.]
Since this is a matter on which the Secretary of State for Defence has now surfaced, can the Minister tell us whether any conclusions or decisions have been reached on the use of our Armed Forces—how many, and in what capacity, and what options are still being explored? As there has been talk of the use of ground-to-air missiles, who will make any decision on the availability and use of such missiles?
On security personnel, it is claimed that there has been a significant underestimate of the numbers required. What then is the position? If it is the case that rather more will be needed than originally envisaged, what are the areas of activity or locations where the underestimate was made? Who is advising on the numbers of security personnel needed, and who is making the decisions on how many will be needed, and where and when? How many security personnel will now be needed in total, and what will be the total cost of such personnel? Will that cost be higher than originally estimated, and if so, by how much? Are the security personnel all being provided by one company, or from a range of companies and organisations?
A further issue that has arisen since Committee is what is happening at our points of entry. The Home Secretary said last week that she did not know how many people entered the country who should have been prevented from doing so. As the Government have always claimed that there will be no reduction in front-line services as a result of the cuts, can the Minister give an assurance that there has not been—and will not be—any reduction in the number of front-line UK Border Agency staff involved in security checks, bearing in mind the importance of such checks, particularly in the period running up to and during the Olympic and Paralympic Games?
Can the Minister also give an assurance that the Government now know who is entering the country? We have been told that there are currently times when there are significant delays at our airports—not least Heathrow—and other points of entry. If that is happening currently, what steps do the Government intend to take to ensure that such delays do not happen in the run-up to, and during, the Olympics, without compromising the thoroughness of security checks, which will be more important than ever since the Games will be a tempting target for those bent on committing acts of terrorism? In addition, the Government have said that it is important that people coming from other countries to the Olympics gain a positive impression of our nation. That will not be assisted if there are lengthy delays at points of entry.
There have also been reports that the USA wishes to bring its own security personnel—some of whom would be armed—to protect its own competitors and officials at the Games. Can the Minister say whether that is true and also whether any other countries have indicated such a wish to have their own security personnel? If this is not true, can the Minister say whether the Government would agree to such a request if one was made by any particular country?
Finally, since security at the Games involves the police, the Armed Forces, security companies, and border agency staff, there is a need to ensure that there is proper effective overall co-ordination. In the light of the apparent discovery of an underestimate in the number of security personnel, and the difficulties over handling quickly the numbers coming through our points of entry without compromising security, can the Minister say who, in the run-up to and during the Olympics, is in overall charge with the day-to-day responsibility and accountability for seeing that all aspects of the security operation and all organisations and bodies involved in the different aspects of security are delivering and that their activities are co-ordinated?
The events of the past few days do not inspire confidence that the Government have a proper grip on the situation or that the decisions that need to be taken have been taken or are close to being taken. I hope that the Minister will recognise that when it comes to security, there is a world of difference between knowing what should be happening and knowing what is or is not actually happening. I hope the Minister will be able to provide some firm reassurance on these points when she responds to the amendment. I beg to move.
Lord Patten
My Lords, this amendment is potentially imperfect and deficient in its content. Secondly, it is potentially disturbing and indeed dangerous. I say these things with care and, of course, declaring my interest as a member of the advisory board of the British Olympic Association. For those who know my athletic prowess, this is an unlikely role for me to have, but that is what I do, as a sort of unpaid Parliamentary Private Secretary to the noble Lord, Lord Moynihan, the chairman of the British Olympic Association, who, alas, is unable to be in the Chamber tonight. I have declared that interest. However, the noble Lord, Lord Rosser, mentioned ground-to-air missiles. The last thing I ever expected to have to do in a debate about the Olympics is to declare my interest working with the world’s largest defence company, but that I had better do as ground-to-air missiles have come up, and that should be recorded properly in the register.
Needless to say, in making these critical remarks about deficiency and possible danger, I do so full of good will. The Olympic movement is full of hopes that 2012 is going to be a great success, and therefore I say this in a bipartisan way, hoping to improve matters rather than make them worse. I am against this amendment and if it comes to a vote I shall cheerfully vote against it. If you are going to have this kind of reporting back to Parliament three months before the Games, first, the timing is a bit tight, to put it mildly; secondly, the amendment is deficient in missing some of the big things that should be considered.
The first would be the specific need to check and recheck, through the sorts of channels that are not iterated in this amendment, that the built environment of the Olympic Park should be checked again and again for latent objects or devices which could have been put there during the construction period. I believe that the greatest care has been shown by the people who built the park—there was some pressure early on to make sure that everything was sealed and checked—but there are devices that do have a latency and you can never be too careful.
I suspect that is nothing like as big an issue as my other example of where there are yawning gaps in the drafting: the failure to mention cyber matters at all. If anything is going to happen to disturb the Games apart from random acts of terrorism, involving whatever devices or armaments, which may or may not be successful, it is going to be a cyberattack—on the ticketing, on the transport infrastructure, on a whole range of other matters that can be affected by cyberwarfare, and I use that conventional phrase, I hope, advisedly. If I was at his elbow when the noble Lord, Lord Rosser, was drafting the amendment—and I am not his unpaid Parliamentary Private Secretary—I would have suggested that for completeness these things should have been considered. Alas, they are not. I know they are being considered by my right honourable friend the Home Secretary, the Metropolitan Police, the security adviser to the Olympics and everybody else, but I do not think they should be considered belatedly, three months out from 2012, and with the weight and amount of detail that is going to be prescribed here should this amendment be successful.
This is why I used the words “disturbing” and potentially “dangerous”, because if we do fear the potential problems that have been referred to, then giving great detail about preparedness is rather like giving great detail about a military deployment during that deployment’s beginning and early stages. It is never a good idea to warn those people who are going to cause trouble. The weight of security is obviously going to be very much greater than we thought three or four years ago and that is a very good thing, but I really hope that the noble Lord, Lord Rosser, in this bipartisan spirit that has motivated my speech throughout, of wanting to see 2012 as successful as possible, will, after probing, withdraw his amendment. I know my noble friend the Minister will answer all the points he has raised about ground-to-air missiles and the rest of it—it is somewhat surprising to be debating those things in this Chamber this evening—but it is not very sensible to have this kind of reporting back under the glare of publicity, three months before the Games, informing those people who might try to disturb the Olympic Games exactly what security is there. I think that is entirely wrong. If I was not being bipartisan, I would say it is barking. However, I just say it is misguided.
Lord Addington
My Lords, I am afraid that the last point made by the noble Lord, Lord Patten, is the one that immediately occurred to me. You do not tell somebody how you are going to stop them doing something, or what sort of resources you are going to put in place. I like to think of Report as clarifying rather than probing, so I ask my noble friend to give me one primary assurance: that we will have our initial plans, our reserve plans and then we will have other reserve plans, and that ultimately the resources of the state will be available to secure something as important as the Olympic Games. Whether this requires Robocop running around, with missiles coming out of backpacks, with James Bond running around after him, which seems to be what people are suggesting in the press, whatever is required that we can do to make sure the Games happen safely is what the Government should commit to. If we are suggesting that we should limit ourselves to some predetermined number of staff, that is clearly wrong. No matter what you put on a piece of paper it would be wrong. If it gets that dangerous that in the end we have to cancel, then we will have to cancel. Can my noble friend give us an assurance that the whole resources of the state will, as far as practical, be deployed to make sure these Games are a success?
Baroness Garden of Frognal
My Lords, I am grateful to the noble Lord for tabling this amendment and giving us another opportunity to provide reassurances on this topic. The safety and security of the Olympic and Paralympic Games are of paramount importance to the Government—and for all concerned—and it is only right that we give this subject the full attention that it deserves.
This amendment would require the Government to place before the House, three months before the start of the Games, a report detailing the thrust of such consultations that the Olympic Delivery Authority, in exercising its security responsibilities under Section 6 of the 2006 Act, chooses to have with the Metropolitan Police Commissioner and other relevant police authorities.
As covered in Committee, your Lordships will be aware that, as under the previous Administration, the Government have pursued and are continuing to pursue a policy of maximum transparency in communicating what London 2012 safety and security will look and feel like. This includes the overall London 2012 safety and security strategy, which was updated and republished in March this year and which sets out the overall approach to Olympic and Paralympic safety and security. Updates on security preparations and readiness form part of the Government Olympic Executive’s reports which are published quarterly; indeed, the next one is due very shortly.
Lord Rosser
I thank those Members of your Lordships’ House who have participated in this debate and thank the Minister for her response. She addressed a great many of the points that I raised. I am not sure that all of them were addressed. I am not quite sure whether an undertaking has been given with regard to dealing with the queues which exist at the present time at our airports. If more staff are not provided, presumably this situation could conceivably get worse in the run-up to, and during, the Olympics, when there will be considerable numbers of people coming into the country.
I would comment only that the issue of security is likely to be raised on occasions before we get to the Olympics if further issues are raised in the press about, for example, what is happening at our points of entry and the problems that we appear to be having there, and if we are faced with statements in our media, which appear to have some validity in the light of what the Minister said, that there has been an underestimate of the number of security personnel who will be needed. We would be failing in our duty in this place—as I am sure they would be in the other place—if we did not raise these concerns and ask Ministers to comment on them and, we hope, give appropriate assurances that everything is under control.
Once again, I thank the Minister for her reply. I appreciate that she responded to a great many of the points that I raised and I am grateful to her for that. In the light of what she said, I beg leave to withdraw the amendment.
“Operation of Olympic Route Network
(1) Section 11 of the London Olympic Games and Paralympic Games Act 2006 (Olympic Route Network) is amended as follows.
(2) After subsection (5) insert—
“(6) The Secretary of State will work with the London Organising Committee and the Greater London Authority to produce a strategic overview and detailed proposals for encouraging the use of public transport by—
(a) individuals in possession of a valid Olympic Identity and Accreditation Card,(b) members of the general public, and(c) non-Olympic visitors and other tourists,during the period of the Olympic Games and the Paralympic Games.””
Lord Stevenson of Balmacara
My Lords, we discussed the traffic management provisions for the Olympic route network in Committee and had a good debate. Since then, the Minister has written to many noble Lords and we are very grateful to her for that. In raising this issue again on Report, I do not want it to be felt that we are in any sense being critical of the responses that we have so far had to these debates. I reaffirm that we all share a commitment: we do not want competitors missing their events or officials failing to turn up at the right time just because London is gridlocked.
Following the mention of bipartisanship—I am sorry that the noble Lord, Lord Patten, is no longer in his place as I wanted to raise it for him—I want to mention one other matter. It is not directly related to this amendment but I think it would help the House. In our previous series of debates we had a big discussion on ticketing. It was very pleasing that the head of ticketing at LOCOG made contact with me directly and asked whether we would like a briefing on our side of the House. I said that we would but also suggested bringing in the noble Lord, Lord Higgins, who made some points in Committee that I am sure your Lordships will remember. As a result of that, we had a bipartisan meeting with LOCOG at which we bashed the issue of tickets around. I have not yet seen the letter that the Minister promised to write but I think we may have convinced him that one or two of the things that the Government were offering in Committee—they were certainly in the comments made by the noble Lord, Lord Coe—were not really necessary for where they wanted to get to and that there is a better solution to some of the problems that were raised in the House. That is a good example of how we should progress on these matters. I am very grateful to those who were able to facilitate it.
The discussions at Second Reading and in Committee have not stilled the sense of unease that many of us feel about the provisions in the Bill relating to transport. Nor have they stopped people contacting us or writing to us. It certainly is not wise to get a black cab at the moment, with all that is going on around taxi use of the ORN. Media scares are to be expected but—I hope I speak for everybody in your Lordships’ House—we would be at fault if we did not try everything in our power to ensure success in every aspect of the Games. As the noble Baroness, Lady Grey-Thompson, said in our previous debate, this may not be the sexiest part of the Games’ organisation but you have to get it right if the Games are to be the best yet, as we all hope they will be.
As things stand, the feeling of the House at the end of the previous debate on this issue was that there is a potential PR disaster here. I should like to highlight three of the many concerns that have been raised. First, the laying out and operation of the Olympic lanes—the two central lanes on many parts of the ORN, which at peak may have Olympic vehicles passing down them every six seconds—is bound to have a major impact on the road system in London and cause much change and disruption to normal, day-to-day activity. Secondly, there is a growing sense that there will be two classes of traveller making their way to the Olympic venues: those who glide down the Olympic lanes and those whose journeys are pure hell. Thirdly, there is the need to reduce non-Olympic demand on the Tube—that is, Londoners, non-Games visitors and people going about their everyday lives. We were told that this reduction would be approximately 30 per cent during the Games. That is on top of those reductions that will already have happened as a result of the normal change of the seasons. If people are to get to the venues in reasonable time and London is to keep moving, there must be a three in 10 reduction in usage of the Tube system.
Lord Myners
When the Minister responds to this amendment, it would be helpful to know whether the current expectation is that government Ministers will be able to take advantage of the speedy travel to the Olympic centres and back to their homes; or whether they will travel with the rest of us by the same mechanisms that they deem appropriate for the rest of the population. It is a very simple question to which I hope we will get a very straightforward answer.
Baroness Ford
My Lords, as someone who has been very closely involved with the preparation of the Games, I should like to make one or two points that I hope might be helpful to noble Lords in thinking this through. I think that there will be two classes of people travelling to the Olympics. There will be lunatics who want to go by car, and there will be very sensible people who do what I do every other day, which is to take the Tube—the Central line, the District line or the Jubilee line—to Stratford. There is no better way to get to E20 than by public transport. Anyone who imagines that there is a better way of doing it plainly never makes that journey.
I have also made that journey frequently over the past two or three years during August. It is like living on a different planet. The travelling experience at the end of July and the start of August is completely different from the experience at any other time of year. It is partly that cyclical change in travel patterns that has led us to believe that there will be less pressure during the Games period than there would be at normal times. That may be a vain hope, because people may decide to stay in London. However, experience shows that during that period there is something like a 30 per cent drop-off—the Minister will probably correct me—in passenger transport in the Tube.
The planning that has been put in place is by no means sanguine. One has only to think back to the opening of the Millennium Dome to understand how a poor transport set-up can absolutely mar an occasion and completely destroy its reputation. However, bearing all of that in mind, and thinking through all of that planning, I think that the work that has gone in to arranging the travel plans for the Olympics has been well thought through; by no means has it been complacent or sanguine. It is right to urge people to take public transport. Those who use the Central, Jubilee or District lines to Stratford—and we hope that people will use the Javelin trains from St Pancras too—will realise that, out of peak hours, those trains are virtually empty. There is plenty of capacity there. If people plan their routes properly and choose their times sensibly, I think that they will have a good experience going to and from the centre of London to Stratford.
Baroness Grey-Thompson
My Lords, I declare an interest in that I am a board member of Transport for London, and I also sit on several committees of the London Organising Committee of the Olympic and Paralympic Games. I believe in encouraging those who can use public transport at Games times to do so, and I think that they will find it quick, relatively easy and, dare I say it, fun. London will be busy. It will clearly look, feel and work very differently at Games times. The happiness quotient at each of the six Games that I have attended is perhaps hard to explain. However, the Games-time city has a very different feel to it. It is also important to remember that London will be open for business. This amendment is useful, because it is important that we have an opportunity to highlight the positive sides of London’s public transport system, and there are many; to continue to encourage a wide range of people to think about public transport as a serious option; and to remind ourselves of what we are trying to achieve.
It is commonly accepted that organising an Olympic and Paralympic Games will be a huge logistical challenge, but there are twin objectives—not only to deliver a great 2012 Games, but to keep London and the UK moving. Many positive things are already happening. The transport infrastructure is complete, in operation and delivering an early legacy well ahead of the Games. There has been detailed planning, modelling and testing, aided by the test events programme, and there is the experience that London has from other large events. Detailed transport information is being made available to businesses, and from early next year there will be a lot more information available to help the public plan right up to and during the Games. For many spectators, the Games are still a long way off; they are not thinking that far ahead about how they are going to plan their Games times. However, when their tickets are in their hands, information will be available about how to travel around. From my own sporting background, I understand the need to minimise disruption at Games times. This will be important in how we are perceived internationally.
I would like to take this opportunity to knock down some of the transport myths that seem to be associated with the Games, because I believe that these exacerbate perceptions and put people off thinking about public transport as a sensible option. It is not true that the Olympic route network is only for the Games family. Any vehicle, including taxis, can use the vast majority of the ORN. In London, it covers just 1 per cent of the road network and only one-third consists of Games lanes. Games lanes are only implemented when there is more than one lane available. The largest element of the Games family is the media, followed by athletes, officials, Games workers, and only then sponsors and IOC members. The vast majority of the Games family— 80 to 90 per cent of them—will use buses and coaches to get around.
The second myth is that there are going to be queues of two to three hours to get into stations and on to trains in London during Games time. Again, this is not true. TfL and Network Rail have undertaken modelling to understand the likely demand at key stations, such as London Bridge, if businesses and people do not change their travel behaviour during Games time. This shows that, at certain times and in certain locations, demand will exceed transport capacity, but queues of the length that have been mentioned in the media are not expected. There is ongoing work with businesses to deliver the change in travel patterns and reductions in demand required. That needs to keep going, especially for the smaller businesses. The big businesses understand that they need to plan ahead. I was at a conference a couple of weeks ago and talking to somebody who owns a restaurant close to the Games. He asked me how many potatoes he needed to order. I said that I had no idea, but you need to be thinking about that right now. It is important that we keep reminding those small businesses that they need to start planning well ahead.
The third myth is that there will be 100 days of traffic disruption in London around Games venues, due to the ORN and road restrictions. Once again, this is not true. The ORN comes into operation just a couple of days before the Games and is taken out as soon as it is no longer required.
Much has already been done to encourage the use of public transport, but as we move into the new year, the public will start to think and plan ahead as the Games become more real. It is the role of LOCOG and the stakeholders to decide how the various groups are moved around London. It is in their interest to make public transport work, because this is how the rest of the world will see us. It is important that we do not forget the tourists who are coming to London who will want absolutely nothing to do with the Games. There will be people who may not even think about the Games being on. As we get closer to the Games, and as the competing nations and chefs de mission visit more frequently, many who hold a valid identity and accreditation card will naturally see public transport as a viable option in many circumstances, although I would not encourage competing athletes to use it. At other times, they will find it an easy way to get round. The stories about the best way to get in and out of the city—to go shopping and to do all the other things that athletes do—will spread quickly among them. I do not think that we have to worry too much about this. The chefs de mission have significant experience at Games times in advising their team members on the most efficient way to travel around the busy city. A lot of this will just naturally happen.
Baroness Doocey
My Lords, I declare an interest as a member of the Metropolitan Police Authority and the Home Office Olympic Security Board. Everyone would agree that the Olympic lanes are what I would describe as a necessary evil, because nobody would want athletes not to get to their events on time. I wholeheartedly agree with the noble Baroness that the only sensible way to get to the Games is by Tube; there is no question about that. However, with just 36 weeks to go to the Games, I am concerned that London’s emergency services are still unclear about the circumstances in which they will be allowed to use the Olympic route network.
Last week I chaired a meeting of the Metropolitan Police Authority’s Olympics committee, where the London Ambulance, the London Fire Brigade and British Transport Police came along to the committee to give evidence. All these emergency services expressed deep concern about the Olympic route network. Although agreement has been reached that will allow them to use the Olympic Games lanes when answering emergency calls, no decision has yet been made about allowing emergency vehicles to use these lanes when not answering emergency calls. This means that when emergency services need to get back to base or to move equipment from A to B, they could be faced with sitting in traffic jams for hours on end. It also means that the rail emergency response vehicles would face similar problems. This could have major repercussions in the event of a serious incident on the rail network.
I find it almost unbelievable that with less than eight months to go, this has not yet been resolved. Can I ask the Minister if she can do everything possible to take whatever steps are necessary to get this sorted as a matter of urgency?
Baroness Ford
My Lords, I should apologise to the House and say that I ought to have prefaced my earlier remarks by declaring my interest as chair of the Olympic Park Legacy Company.
Baroness Garden of Frognal
My Lords, I am grateful to the noble Lord, Lord Stevenson, for tabling this amendment and allowing us to have another lively debate. I am also grateful to him for his comments about the spirit of co-operation and bipartisanship in which this Bill has been conducted. It has been a great pleasure to work with noble Lords in trying to ensure that we all achieve the best results for the Olympic and Paralympic Games.
On the matter of transport, I can assure the House that promotion of public transport is at the heart of our transport strategy for the Games and that detailed plans have already been set out in the Olympic Delivery Authority’s Olympic Transport Plan required by Section 10 of the 2006 Act. Indeed, the opening words of the most recent, June 2011, edition of that plan are:
“London 2012 will be the first ‘public transport’ Games”.
I am grateful to the noble Baronesses, Lady Ford and Lady Grey-Thompson, for their support for public transport, and the use of public transport, in the course of the Games. This might be the moment to reassure the noble Lord, Lord Myners, that Ministers will not use the ORN Games lanes.
Next summer the world will come to London to share in the excitement of the Olympic and Paralympic Games. The Games will draw up to 600,000 ticketed spectators daily to London’s transport system. Many more will come to London and other venue cities to join in the wider celebrations. There will be up to 3 million additional trips in London on the busiest day of the Games, in addition to the 24 million trips normally made. It is the scale of the demands that this volume of visitors will place on our transport system, rather than the specific impacts of the operation of the Olympic route network for the Games family, that drives our strategy of promoting travel by public transport, walking or cycling at Games time. The Olympic route network roads will, as I explained in the Committee debate, almost all be fully open for normal traffic and the temporary traffic management measures necessary to make the network work effectively for the Games family will be implemented in a proportionate and targeted manner so as to minimise the impact on normal business. I am grateful to the noble Baroness, Lady Grey-Thompson, for so clearly setting out, and exploding, some of the myths around transport in London at this time.
Our goal is that all spectators travel to the Games by public transport. We have invested £6.5 billion in transport infrastructure since 2005 to boost London’s transport capacity to enable spectators and visitors to get to their events and to keep London moving. Londoners are already benefitting from this transport legacy in advance of the Games. The improvements to the public transport system already delivered include a 50 per cent increase in Docklands Light Rail capacity with lines extended to Woolwich and Stratford International; extra capacity on the Jubilee line, with the signalling upgrade now complete and additional trains already operating at peak times, with more early in 2012; the new high-speed rail service between St Pancras, Stratford International, and destinations in Kent; refurbished and extended London Overground services on the East London and North London lines; upgrades to national rail services on the Lea Valley and Great Eastern lines; King’s Cross-St Pancras and Stratford regional stations essentially rebuilt and expanded, with step-free access and extra capacity; and step-free access now provided at Southfields, serving the Wimbledon venue, and at Green Park, a vital central transport hub during the Games. I have mentioned those facilities in some detail, given the numerous concerns about the problems of transport in London, to show that an awful lot of work has already taken place to improve transport facilities around the capital.
In addition to these upgrades, additional public transport capacity will be provided specifically at Games time. This includes: later evening services on the London Underground, DLR and national rail services from London, with trains running up to 90 minutes later than normal; a high-frequency Javelin rail shuttle service between St Pancras, Stratford International and Ebbsfleet; direct coach services from a range of cities across England and Wales to the Olympic Park, ExCel and Greenwich Park; park-and-ride services from three sites near the M25; and enhanced river services between central London and Greenwich. As a further encouragement to use public transport, all spectators will receive a free all-zones Travelcard for the day of their Games event ticket. A dedicated Games journey planner on the London 2012 website enables ticket holders to plan and book their journeys well in advance of the Games.
Taxis and private hire vehicles will play an important role at Games time, in particular as a travel option for those with reduced mobility. ODA and its partners are working closely with the industries to assess likely demand, to make them aware of the temporary traffic restrictions that will be in place and to mitigate their impact where possible. They are also working to ensure appropriate provision of pick-up and drop-off points at all of the Games venues as well as key transport interchanges. Information packs are being put together for all taxi and private hire drivers, which will cover the ORN, venues and other details about the Games, ensuring that drivers can operate effectively and make the most of the opportunities that the Games offer. I say to my noble friend Lady Doocey that the packs will be distributed in spring next year. More information will be going out but I hear what she says about the emergency services. We will make further inquiries to ensure that all that is in order and come back to her on that.
The amendment seeks to encourage the use of public transport by those with an Olympic identity and accreditation card. For most of the transport needs of the athletes, officials, media and marketing partners who form the Games family, transport by road along the Olympic route network, mostly in buses and coaches, will, as at previous Games, provide the most convenient and effective means of ensuring that they get reliably to where they need to be each and every time. We listened with great interest to the experience of the noble Baroness, Lady Grey-Thompson, in respect of the transport for the Olympic athletes and the Olympic Games family. We are, of course, encouraging the use of public transport as much as possible. For example, the media will use the Heathrow Express to travel between Heathrow, which is LOCOG’s official port of entry, and central London. Transport for London will be providing access to free public transport travel for all members of the Games family.
The Games will, of course, place unprecedented demands on our public transport system, despite the enhancements to capacity I have described in detail and the normal summer seasonal reduction in background demand that can be expected at this time of year, so it will be necessary to reduce non-Olympic demand at key hotspots at times of high Games demand to keep London moving. The latest surveys and forecasting enable those times and places to be identified and the necessary reductions to be specifically targeted. On the basis of the most recent surveys and forecasts, we now know—noble Lords have already indicated this—that we will need to reduce non-Olympic demand by approximately 30 per cent on average across a number of hotspots on both the road and public transport networks. Larger reductions will be needed on certain days at particular times at specific stations and lines. Further details on those hotspots will be published by TfL at the end of this month, but, just to be clear, we are not looking at a blanket reduction of 30 per cent in non-Olympic demand across the whole of London for the entire Games period.
The noble Lord, Lord Stevenson, asked how we will achieve the public transport reductions and whether we were confident that the necessary reductions will be achieved. There is a rolling programme of tracking research used to estimate the level of reduction that may be achieved in 2012. This gathers information on public awareness, propensity to plan and intention to take action to change travel behaviour during the Games period. A whole host of research goes into trying to ensure that we have the best ideas of where the transport hotspots will be and how we can cope with the additional traffic. TfL has been working with businesses since November last year to encourage them to plan to reduce journeys where possible, and reroute, re-time or change the mode of essential journeys. TfL is already working directly with businesses responsible for more than half a million employees in transport hotspots. This will be supplemented next year by extensive public communications to commuters and the wider public.
Finally, the amendment also calls for proposals to promote public transport use by non-Olympic visitors and tourists. I am aware that behind this may be concerns in some quarters that the Olympic and Paralympic Games will deter non-Games tourists from visiting the UK. This has been indicated in tonight’s debate. The Government are committed to ensuring that the tourism industry maximises the economic benefits provided by the Games. Including new money that has recently been announced from the GREAT campaign, plus private sector support, VisitBritain will invest around £127 million in a new international marketing programme. Over the next four years it is expected to deliver 4.6 million extra visitors from overseas and £2.27 billion in extra visitor spend. We have also recently announced the 20.12 per cent discount initiative which will be launched next year by VisitEngland as part of a campaign to use the Games to boost domestic tourism.
Visit England’s campaign is supported by a £3 million investment from the Olympic budget and is expected to deliver 12,000 new jobs and £480 million in extra spend over three years. At this point, I congratulate the noble Baroness, Lady Ford, and her team on their success in achieving the World Athletics in 2017. If we get all the transport right for the Olympics, then 2017 will be a piece of cake.
I hope that has addressed the points that noble Lords have made in this debate. We hope that the non-Olympic visitors and tourists will of course be able to benefit from the significant enhancements to public transport provisions, and that the Olympic lanes will work as efficiently as intended to get the athletes and the Olympic family to and fro. The noble Lord, Lord Stevenson, asked where the previous reductions have been achieved, and we have looked to previous host cities on the reductions and on travel to get indications of travel demand. Sydney, Salt Lake City and Vancouver have all contributed to helping our plans for assessing the numbers likely to be travelling.
I have something here for the noble Baroness, Lady Doocey, on the emergency services. The Games consultation and engagement team is working with the emergency services to ensure that vehicles attending emergencies can move around the city safely and easily. There will be ongoing discussion about the other vehicles she mentioned, the ones that are not actively engaged on emergency services. That is all being debated and consulted on.
I hope that I have been able to demonstrate that we are well under way in delivering a comprehensive and detailed strategy to promote public transport for the Games while also effectively managing the pressures that will be placed on specific parts of that system. On that basis I hope that the noble Lord, Lord Stevenson, will feel able to withdraw his amendment.
Lord Stevenson of Balmacara
Perhaps I may ask the noble Baroness to go back a little in her speech. I heard her say something about one-day travelcards being available to Games ticket holders. Can she confirm that?
Baroness Garden of Frognal
Yes, there will be travelcards available to ticket holders and to those attending the Games.
Lord Stevenson of Balmacara
This is for London only, I assume.
I thank all who have spoken in this debate, particularly my noble friend Lady Ford and the noble Baronesses, Lady Grey-Thompson and Lady Doocey, who shared their expertise in these matters. I am left with three quotes and a conclusion which I would like to cover before we resolve how to take this forward. When the noble Baroness, Lady Grey-Thompson, was talking about modelling, she said that on certain occasions demand is going to exceed supply. That is picked up by the sense of the word hotspot which I assume covers much of the same issue. There is obviously going to be a problem at some point during the Games and we recognise that.
The noble Baroness, Lady Doocey, was worried that emergency service vehicles would be sitting in traffic jams for hours on end, and I hope that she found the Minister’s response helpful. If there are traffic jams, they will not be the only people sitting in them; it is also going to be Londoners and others who wish to go about their ordinary business, including visitors and businesses that may have time-sensitive deliveries to make—for instance newspapers. There is obviously a second concern in that.
The third concern—the one we are all beginning to push at—is that we are making it clear that these will be the world’s first public transport Games, while at the same time recognising that even our enhanced public transport system will not really be able to cope. We have a problem.
Our amendment was an attempt to try to take a little of the potential blame away and bring it back to Parliament. However, I think that it has not found much favour and therefore will not push it further at this stage.
Lord Myners
Before my noble friend finishes, can we ask the Minister to say a little more about the one-day travelcards as I think it may well be the first time that this has been announced? Am I correct in understanding that, as my noble friend says, these are for London travel but that they will cover travel for the journey to and back from the Games, that they will apply to wherever the traveller travels from, and that they will be free? If they are not free, then they are just a return ticket, and not a travelcard at all, so can the Minister confirm what exactly these travelcards cover and will they apply to people going to Weymouth to see the sailing, or to Greenwich to see the equestrian events? Can the Minister be more precise please?
Baroness Garden of Frognal
All spectators will receive a free all-zones travelcard for the day of their Games event ticket, so that will cover the London venues. A dedicated Games journey planner on the London 2012 website will enable ticket holders to plan and book their journeys well in advance of the Games. We are hoping that the all-zones travelcard will be an additional encouragement to the spectators to use public transport.
Lord Stevenson of Balmacara
I am grateful for that useful clarification. Let us paint the scenario. The Ministers are trapped in their cars, not in the Olympic lanes, but possibly hovering close to the Olympic network.
Lord Stevenson of Balmacara
Or they are in the Tube—I will come to that. Everybody who has deliveries to make in London has to make them at unsocial hours with difficult transport arrangements but they have to take notice of that; if they are not worrying about the number of potatoes they have got to buy, they will certainly be worrying about this. They will, we hope, get it right and we will be working on that.
All the extra visitors will be confused and bemused as they often are in London, so no change there, but those who have tickets for the venues will be trying to use a Tube system running at overcapacity. Despite the improvements already mentioned there is very little time—eight months now—until we get into the critical phase.
It does seem a bit of a mess. I do not think there is anything one can do about it, and we must all pull together to try to make sure the best comes out of it. I wish those who are responsible for it all the very best. With that, I withdraw this amendment.
Sovereign Credit Ratings: EUC Report
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Harrison
To ask Her Majesty’s Government what is their response to the Report of the European Union Committee on Sovereign Credit Ratings: Shooting the Messenger? (21st Report, HL Paper 189).
Lord Harrison
My Lords, I bring to the House’s attention Sovereign Credit Ratings: Shooting the Messenger?, a report of the European Union’s Sub-Committee on Economic and Financial Affairs, and International Trade, which I have the honour to chair.
As noble Lords will be aware, credit rating agencies have had a very high profile since the banking crisis erupted in 2008, in relation to which there has been widespread and, in the committee’s view, deserved criticism of their role. When the banking crisis hit, the rating agencies were revealed to have woefully underestimated the risk that complex financial products, such as mortgage-backed securities, posed. Thus we were told in the evidence that some securities that carried an AAA rating one day were downgraded to a CCC the next. Indeed, many commentators accused the rating agencies of contributing to the severity of the crisis.
In the crisis aftermath, many sovereigns, as well as the European Union, sought to sharpen regulation of the credit rating industry. In the European Union this led to the creation of the European Securities and Markets Authority, or ESMA. With the reputation of the credit rating agencies yet to recover, many people were quick to blame them for exacerbating the European Union sovereign debt crisis after it intensified in 2009. They were accused of failing to predict the crisis, and then of precipitating it by downgrading the ratings of euro area sovereigns too far and too fast. In the midst of this, the Commission in November 2010 launched a public consultation to discuss the need for further regulation in the credit rating industry and invited views on proposals to foster a European credit rating foundation which might challenge the oligopoly of the major rating agencies.
In April 2011, and in the light of these developments, our committee launched this inquiry, seeking to analyse the interaction between the credit rating agencies and sovereign debt, with a particular focus on the role of the CRAs in the euro area crisis. We took evidence during May and June from representatives of the “big three” rating agencies—Fitch Ratings, Moody’s and Standard & Poor’s; from representatives of the OECD and the International Centre for Financial Regulation; from Dr Wolf Klinz, the European Parliament rapporteur; and from the Financial Secretary to the Treasury, Mark Hoban. We also received a welter of additional useful written evidence, for which we are grateful. Our report was published in July and we are pleased that the Government’s response now brings this debate to the Chamber tonight.
The committee concluded that the rating agencies could not be accused of precipitating the euro area crisis. Their downgrades, in reality, reflect the seriousness of the problems that some member states currently face. Indeed, in most cases the CRAs followed, rather than led, market sentiment. We acknowledged that downgrades can, in certain circumstances, exercise a disproportionate influence on markets, exacerbating existing fragile situations. However, whether this happened in relation to the euro area crisis is more difficult to determine. Yet the committee did conclude that the credit rating agencies conspicuously failed to challenge the assumptions on which their assessment of the sustainability of sovereign debt was based in the years running up to the crisis. They palpably failed to identify risks in some member states which began building up long before the crisis hit. However, they were not alone in that misjudgment.
The committee has two central concerns apart from the ones that I have expressed. The first relates to the extent, or otherwise, of competition in the industry. We concluded that the credit rating agency industry is, at present, an oligopoly. The stranglehold of the largely United States-based big three has proved impossible to break. This is not for want of trying on the part of some. As I have already mentioned, the Commission has floated the possibility of the establishment of a European credit rating agency, whose start-up costs could be,
“wholly or partially covered by the public sector”,
although over time,
“public investment could … be phased out”.
The European Parliament Committee on Economic and Monetary Affairs raised the possibility of an independent, non-publicly funded European credit rating foundation. We concluded that there was a compelling argument for a thorough competition inquiry into the structure and regulation of the credit rating industry, but we also felt that the European Union should not fund, either initially or in the long term, a credit rating agency. An EU-sponsored credit rating agency would simply lack credibility with the markets.
Our second concern relates to the use of credit ratings. Sovereign ratings can play a useful role that contributes to the smooth, efficient working of the worldwide sovereign debt market. However, there is a compelling need to reduce the mechanistic role that credit ratings play in regulations, investment mandates and private contracts. This hardwiring of ratings leads to knee-jerk rating changes which can cause deleterious cliff-edge effects, herd behaviour among investors and systemic disruption. Indeed, there is an overwhelming imperative for investors to see sovereign ratings for what they ultimately are: subjective provisions that rely heavily on the personal judgments of rating agency staff. Investors should not follow ratings blindly but should view them as opinions that need to be balanced and confirmed by other market indicators. Responsibility for investment decisions ultimately lies with investors, and they should bear in mind the principle of “caveat emptor”—buyer beware—when deciding how much reliance to place on the judgment of rating agencies.
Where, then, do we stand today? We have received the Government’s response to our report and I am heartened that they agree with so many of the committee’s recommendations. I am sure that the Minister will want to elaborate on the Government’s position.
The question now turns to the Commission. Given that ESMA has only recently taken over the direct regulation of credit rating agencies, we argued in the committee that the new system should be given time to bed down and its effectiveness should be assessed before further changes are made. Yet Commissioner Barnier has pressed the case for further regulation of rating agencies for some time now and today—as if to prove the timeliness of this evening’s debate and the fact that he has obviously read our report—he launched the Commission’s latest proposals. Significant among them is the decision to postpone the proposal to suspend the credit ratings of sovereigns receiving funds. I would like the Minister to respond to that in particular. I underline the fact that, as I understand it, the suggestion is only to postpone the proposal. The Commission also has ambitions to reduce the overreliance on credit ratings, to improve the quality of the rating process and to promote the general obligation on investors to do their own assessment. I hope that the Minister will respond to those three ambitions.
There is also the question that ESMA might be communicated with by the credit rating agencies. That flies in the face of what we said on the committee—that 12 hours is a sufficient break and we do not require the three-day break that might confuse the markets even more because something might be said out of turn. We need more diversity and stricter independence of the credit rating agencies and, again, I ask the Minister to respond to the question of competition.
This is an important issue. Recently the credit rating of France was reduced from AAA, with deleterious effects on the markets. We need to be serious about this. I hope that we can have a good debate and that the Minister will be able to respond to the Commission’s proposals.
Baroness Noakes
My Lords, I had not originally intended to take part in today’s debate. I had seen the report of the EU sub-committee chaired by the noble Lord, Lord Harrison, and agreed with its balanced view and recommendations. I also agreed with the Government’s response to that report. Then I noticed, as the noble Lord, Lord Harrison, has already pointed out, that the noble Lord has cleverly timed this debate to coincide with the expected announcement of the EU Commission’s latest regulatory onslaught on credit rating agencies. So here I am.
I start from the position that we have to push back at the relentless tide of regulation from Europe and that any more regulation has to have the highest level of justification. I also believe we should make a start on returning powers to the UK, but stopping further regulation from Europe is not a bad place to start.
Looked at dispassionately, it is not clear that the rating agencies deserve the degree of punishment that has been meted out to them in the wake of the global financial crisis. Both Europe and the G20 needed scapegoats to cover up the fact that neither Governments nor their regulatory and prudential agencies had the faintest idea of the financial mayhem that was stalking the world in 2007. So the credit rating agencies, which certainly did not cover themselves in glory in relation to structured financial products in that period, ended up subject to a range of regulatory interventions and technical standards.
As is well known, the European Commission has never intended to let the financial crisis go to waste. The noble Lord, Lord Harrison, and I attended a breakfast briefing last week where a senior member of the Commission’s staff positively bragged that the crisis had led to 29 pieces of legislation affecting the financial services sector. His justification for this onslaught was, to say the least, minimal, but he evidently relished the opportunity to increase the regulatory reach of Brussels, and credit rating agencies have been caught up in this Commission land grab.
As the noble Lord, Lord Harrison, has noted, the Commission now wants to ratchet up the regulatory pressure on the rating agencies even further. This appears to be retaliation for their alleged failings in relation to the stressed eurozone economies. There is no doubt that Ireland, Portugal, Greece, Spain and Italy have not enjoyed having their credit ratings reduced—the reductions were late and sudden—but those countries had to face up to the fact that their credit ratings had been overstated for too long.
I completely agree with the report of the sub-committee chaired by the noble Lord, Lord Harrison, that the credit rating agencies did not precipitate or exacerbate the euro area crisis. I also agree that they did a rather bad job of not identifying the real risks in those economies. However, this is not a sufficient excuse for additional regulation.
It took me rather a long time today to confirm whether Commissioner Barnier did in fact launch his latest round of regulatory assault on the credit rating agencies. In fact, one blog this afternoon reported that Commissioner Barnier himself had been downgraded from “punctual” to “tardy” because he was late for the relevant press conference. However, a couple of hours ago I managed to track down a one-page summary of the proposals.
As the noble Lord, Lord Harrison, has noted, one of the things being mooted as part of the proposals is one which would allow credit rating agencies to be silenced if a country was in some kind of crisis intervention. That idea should have been killed at birth and never taken into the heart of EU policy-making. Constraining the credit rating agencies from placing their sovereign debt evaluations in the market is contrary to free speech. It is also impractical because the rating agencies would presumably have to declare that they were unable to issue a rating, which could well trigger a panicked response in the sovereign debt markets. The creation of an information void—or, at least, one with only government-controlled information—is likely to have the worst possible effect on credit markets. Fortunately, the Commission has stepped back from the brink on this and the matter is now marked, in the summary that I saw, as “for further consideration”. I hope that that means that the proposal is gone for good, but we have yet to see.
A dodgy proposal that has survived is that of compulsory rotation of rating agencies every three years or every 10 issues. I share the view of the committee and the Government that greater competition in the rating agency market would be a good thing, but there are problems with the rotation proposals. First, as most issuers already use more than one agency, the impact of the rotation proposal is huge turbulence in what is a very small market. It might well give the smaller agencies an opportunity to improve their position, but does that end actually justify the means? Creating further competition through turbulence has no respectable precedent.
Secondly, there are likely to be real impacts. Certainly, issuers will be faced with varying increased internal costs in dealing with additional rating agencies, possibly annually if they do a lot of issues. More importantly, it is far from clear that the markets which look to credit agencies will accept any new players at face value. Disruption in corporate credit markets, and through that disruption in the real economy, may be the only certain result of these proposals. It is not surprising that the Association of Corporate Treasurers is deeply concerned about these proposals and it wrote to the Commission in clear terms recently. It was disappointing and unsurprising in equal measure that Commissioner Barnier’s spokesman dismissed the association’s views as “a typical lobbying move” that “smacks of desperation”.
A further bad idea is the proposal to create a European framework for civil liability. The sub-committee chaired by the noble Lord, Lord Harrison, had it right when it said that civil liability is best left to member states. It is clear that S&P’s foolish error last week on the rating of France has touched a raw nerve, and has strengthened the resolve of those at the heart of the European project to control and punish credit rating agencies. But anybody who has looked at France’s economic position might marvel that it has hitherto escaped the analytical stringency applied to others in the eurozone. Credit spreads are now telling their own story on France. The mistake was unfortunate, but do we want a credit rating sector terrified of making a mistake, or one which is not prepared to boldly challenge received wisdom? What the markets want and what, for example, France might want, may not coincide. I have not had time to look in detail at the Commission’s proposals in this area, but I hope that they do not live up to the rhetoric of punishing mistakes that was being bandied about last week.
The only good aspect of the latest proposals is that the Commission has dropped the barmy idea of establishing the European credit rating foundation, which the noble Lord, Lord Harrison, has referred to. I understand from the press that there is now a suggestion in Brussels that another non-credit rating agency approach might be adopted, possibly using, for example, the European Court of Auditors. Will the Minister say whether the Government will give any support to an EU move to take credit rating agencies out of sovereign debt ratings? More generally, will my noble friend say whether these new proposals from the Commission will be subject to the UK’s veto, or can they be bulldozed through by qualified majority voting?
The Government’s official response to the committee’s report agreed with the committee that further changes should take effect only once the existing raft of changes had had time to bed in. Will my noble friend confirm that the Government will stick to that position?
Lord Myners
My Lords, I congratulate my noble friend Lord Harrison and his committee on the excellent work that they have done on this issue. They have produced a flawlessly argued case which, on the whole, the Government have very sensibly accepted in their written response. I share with the noble Baroness, Lady Noakes, a great interest in how the Minister will respond to what the Government have said.
I am delighted to see the Minister here as I was a little worried that the noble Lord may himself have been downgraded. The appointment of the noble Lord, Lord Green of Hurstpierpoint, as a member of the Treasury team was relayed to us in a press release issued very quietly by the Treasury and was not given a lot of publicity. He is to give advice to the Chancellor on issues relating to banking, which seems to me to be the job that the noble Lord, Lord Sassoon, was doing. I am delighted to see that the noble Lord, Lord Sassoon, is here and that he has not been downgraded, which would have been a great disappointment to me and to other Members of the House. It would be interesting to know why his advice on banking is not sufficient for the Chancellor, and why the Chancellor now needs the noble Lord, Lord Green, to be a member of the Treasury team.
As the noble Baroness, Lady Noakes, said, credit rating agencies have, to some extent, been used as scapegoats by those who should have taken responsibility for policy errors but instead sought to deflect the blame on to others. The credit rating agencies clearly played a lamentable role in the rating of SIVs, CDOs and other packaged products. They engaged in misdirected behaviour, employed flawed processes and had a business model based on suspect economics: the issuer pays protocol. Some would say, in respect of sovereign debt, that the case is not proven as to whether the rating agencies also had a role in triggering some element of the sovereign crisis. I am more inclined to give the rating agencies the benefit of the doubt and to say that they did not play any significant part in causing the sovereign crisis.
Here I disagree with paragraph 22 of the committee’s report, which says that credit rating agencies play a role in determining the cost to governments of borrowing. They simply do not. The realistic situation of the borrowing nation’s capacity to pay determines the price it pays for credit. The thermometer does not trigger the fever. The credit rating agencies measure the likelihood of repayment. They certainly do not have any impact on the cost of credit. Again, at the risk of giving even more credit to the noble Baroness, Lady Noakes, she was absolutely right in pointing to the case of France, where the credit rating agencies may say one thing about the rating of that country but the pricing of its debt in the markets says something rather different in terms of differentiation between France and Germany, the quality of covenant and the capacity to honour debt obligations.
The reality is that credit rating agencies are a lagging indicator rather than a leading one. They tend to verify the market’s judgment rather than to lead it. We should not be terribly surprised by that. My experience is that, on the whole, credit rating agencies employ rather average people. They are given extraordinary status by Mr Peston and others on television when they talk about changes in rating, but quite frankly, if you are good at the job, you work in an investment bank, a bank or a hedge fund; you do not work for Fitch, Standard & Poor’s or Moody’s. On the whole, these are at best average folk. They express opinions. Their opinions are worth little more than many other opinions—certainly a lot less than those of people who make decisions with real money or authoritative commentators such as Mr Martin Wolf in the Financial Times and others. In many ways, these credit rating agencies are of little consequence at all. We should probably not spend too much time on them, except that they tend to be taken rather seriously by the media and—more importantly—regulators.
We need to understand the way in which the credit rating agencies are hardwired at the moment into regulatory architecture and find a way to eliminate the central role that they play. In that respect, we should strongly support international efforts to reduce the role of credit rating agencies in helping to determine risk-weighted assets and other important calculations that feed into Basel and other capital requirements. Unfortunately, the role of the credit rating agencies is rather helped in this respect by their standing in America, under the SEC regulations, as nationally recognised agencies or quasi-regulatory authorities. This is a deep lacuna. I urge the Financial Policy Committee of the Bank of England to look at the role of credit rating agencies and see whether we can find a way of taking them out of the central role that they currently play.
The implementation of the credit rating agency directive will be in the hands of the European Securities and Markets Authority—ESMA. This has only recently been established but is an important agency because it will exercise direct regulatory authority. I hope the Minister will correct me if I am wrong here, but I believe that ESMA has the power to overrule national regulatory agencies. In other words, the FSA is subordinate to ESMA and could not, if it wished to, introduce higher standards. ESMA has been clear that it intends to ensure that its rules are enforced uniformly across the EU and in so doing will limit the ability of individual countries to require additional measures. Mr Steven Maijoor, the chair of ESMA, was quoted in the Financial Times recently as saying that,
“we are moving toward common supervisory standards”.
The regulations will not be based on the UK’s “comply or explain”. They will be enforced on all national regulatory agencies by ESMA. I would welcome an assurance from the Minister that he will stand up for self-determination of regulation in the UK and not allow us to be steamrollered by ESMA or any other part of the European regulatory architecture.
We saw some very flawed thinking from the European Commission on credit rating agencies—that there should be a government-sponsored CRA, the banning of the publication of ratings, and the pre-approval of methodology, which implies again some process by which these become nationally recognised outcomes rather than the opinions of rather average people. I worry very much about Mr Barnier. I met Mr Barnier when he was a Minister. He came to see us at the Treasury. He came down the corridor and I was watching him. I am a great fan of art and I was rather impressed that he stopped to look at every painting. I thought this is a man with whom I share a common interest—until I realised he was actually looking at his reflection in the glass on every painting, and adjusting his hair or his toupee. This to me is a man whom we should treat with a very long spoon. I hope the Minister will take due care in working with Mr Barnier because we have been forewarned that this man intends to seek even more powers than those he announced today. He said he wants to return to the issue of censoring rating agencies. I sincerely hope that the Government and the Opposition would have no part in endorsing such an activity.
The Financial Secretary to the Treasury—it is not the noble Lord, Lord Sassoon, but Mr Hoban—said in his letter to the noble Lord, Lord Roper, on 28 September that he would be reporting back to us on the work of the Financial Stability Board on rating agencies,
“which was due to report in mid September”.
He actually wrote the letter on 28 September, but I am accustomed to how timing and seasons change when Ministers come to author letters. I would be interested to know whether this reply has been produced and whether the Minister can tell us what the FSB has decided on credit rating agencies.
Finally, as my time expires, I regard the CRAs as just another of those innocent fools and victims who played a part in the financial crisis. Your Lordships have already had an excellent committee report on the auditors. We have now had a report on the credit rating agencies. I think attention should now be turned to the benefit consultants and, finally, to those rascals who decide whether a credit event has been caused in the credit default swaps. Plenty for the Minister to do even though he is now job-sharing with the noble Lord, Lord Green of Hurstpierpoint.
Lord Vallance of Tummel
My Lords, I first congratulate the noble Lord, Lord Harrison, on his admirable chairmanship of our committee during the production of the report. My first brush with the credit rating agencies was when the Select Committee on Economic Affairs produced its report, Banking Supervision and Regulation, in June 2009. We were highly critical of the part the agencies played in the run-up to the preceding year's financial crisis, of their failure to detect the toxicity of many of the financial instruments they rated, of their potential conflicts of interest and—this was not to be laid at their door—of the systemic risk of hard-wiring ratings into financial regulations and the mandates of institutional investors, which the noble Lord, Lord Myners, referred to. Therefore, it comes as something of a surprise to find myself defending the agencies, at least in part, as they sit in the firing line from the Commissioner for the Internal Market.
It also comes as something of a surprise, although a pleasant one, to agree with almost all of the Government's response to the report on sovereign debt ratings. I will not rehearse again the arguments about the distinction between the rating of corporate and sovereign debt that is set out in our report. Suffice it to say that sovereign debt ratings are almost always unsolicited, so the issues of conflict of interest that surround the issuer-pays model and of ratings shopping simply do not apply.
What matters in the context of sovereign debt boils down to three main things. The first is the oligopolistic nature of the credit rating agency market, which is dominated by the three main players. Such a concentration of power is uncomfortable to say the least. The second is the hard-wiring of credit ratings into the regulatory system and the systemic risk that goes with it. The third is the issue of what regulatory constraints are warranted in respect of the methodology, content and timing of credit ratings. This will inevitably include a degree of political judgment overlaying the economic analysis.
As to the nature of the market, I think it is something of a natural oligopoly. An open market for credit ratings will lead inevitably to concentration on a small core of players with the skills, experience and global reach to do the job. In this respect, the market is similar to that of financial auditors. This is one area where I question the Government's view that one should be,
“lowering barriers to entry rather than intervening in the market directly”,
to quote their response to our report. Lowering barriers is a necessary but insufficient approach when there is a natural and entrenched monopoly of this kind. So if Commissioner Barnier wants to rotate the use of agencies by limiting the frequency with which an issuer can use the same agency, he is broadly on the right track. The promotion of competition in this market will mean not just removing potential barriers to entry but the direct handicapping of the large incumbents, although the calibration might need some work. Incidentally, rotation would not bear directly upon unsolicited sovereign debt issues, where potential conflicts of interest do not apply.
As to the phasing out of the hard-wiring of credit ratings in regulatory structures or in the mandates of institutional investors, everyone seems agreed on the objective, whether they are regulators or rating agencies. However, it is one of the things that is easier said than done, as there is a real risk of throwing out the baby with the bath-water, or at least of unintended consequences. One thought that occurs to me is to take a leaf out of the book of UK corporate governance here and apply the principle of “comply or explain”. If minimum levels of credit rating were not mandatory requirements but subject to the comply or explain rule, there would be at least some leeway for financial institutions to use their own judgment, subject to their explanations satisfying the relevant regulators. That limited exercise of judgment might just put a brake on the automatic mass selling of a security that can follow a downgrading which breaches a mandatory requirement. It is a passing thought that the Government might like to bear in mind.
Finally, and specifically with regard to sovereign debt, what regulatory constraints are genuinely warranted as to the method, content and timing of credit ratings? The sensitivity in certain parts of the eurozone to a credit rating agency having the temerity to pass judgment not just on the credit-worthiness of a nation's sovereign debt but, by extension, on the competence and effectiveness of those who are trying to prop it up is very clear. But that is no excuse for what one might call retaliatory regulation—and there is a sense of retaliation in some of the possible measures being aired by the Commission and others.
In terms of principle, there is no question that the agencies need to be properly registered and subject to some degree of regulation, and it is clearly appropriate for ESMA to insist on transparency of methodology. However, to my mind the recent suggestions that ESMA should effectively determine in advance which methodologies are, or are not, to be deployed is right over the top and an undue interference in the market.
As to the Commission’s thankfully postponed suggestion that ESMA should have the power to ban or suspend credit rating when a country is in negotiations or is covered by an international solidarity programme with the EU or IMF, as we said in our report, and has been said this evening, that smacks of censorship. Perhaps the Commission would like to suspend the “Lex” column in the Financial Times on the same grounds. It also smacks of naivety; as the noble Baroness, Lady Noakes pointed out, a ban could easily put the financial markets into a spin. Other commentators would inevitably fill the gap, and the whole exercise could end up being self-defeating. No doubt the Government will do their best to keep that one at bay, should the postponement prove only temporary.
Credit ratings of sovereign debt matter—hence all the sensitivity surrounding them. If you will pardon my lapse into Franco-German, some may have experienced a brief “frisson de Schadenfreude” when Standard & Poor's inadvertently downgraded French sovereign debt earlier in the month. But it was really no laughing matter. The credit rating agencies may not have precipitated, or even significantly exacerbated, the eurozone crisis, but the oligopoly’s sins of omission or commission can do real damage. It follows that the power and dominance of the three large agencies need to be addressed, but to my mind that is best done through promoting structural change in the market and not by more regulation of a retaliatory kind.
Lord Foulkes of Cumnock
My Lords, I join in the warm congratulations to my noble friend Lord Harrison on securing the debate. I am a member of the European Union Select Committee, which is very ably chaired by my noble friend Lord Roper.
I joined the committee just as this report was being concluded, and although I welcome the report, I feel it does not go far enough. I disagree with much of the essence or strength of what has been said up to now. Some of the action of the credit rating agencies has, frankly, been scandalous and it needs more urgent action. As the Minister knows, I have raised it two or three times at Question Time, and although the Minister has been reasonably helpful and wrote to me recently about it, I am not sure that he or the Government are really seized of the concern that is widely held about the action of credit rating agencies and the urgency of action that is necessary.
It is quite ridiculous that three US-based agencies have 95 per cent of the global credit rating agency work. They are private companies, with their own shareholders, their own owners, who often benefit from the decisions made by those agencies. Whether my noble friend Lord Myners—who has disappeared suddenly—thinks they should get any credence or not, they are given great credence, not just by the media, but by a whole range of other people. Yet look at their record. Joseph Stiglitz, the Nobel prize winner, said that the subprime crisis would simply not have happened without the CRAs’ contribution. He says:
“They were the party that performed the alchemy that converted the securities from F-rated to A-rated. The banks could not have done what they did without the complicity of the rating agencies”.
It was that subprime crisis which started the global financial crisis that we are currently in. Look at the accuracy of their forecasts. They gave positive ratings to AIG and to Lehman Brothers right up until the very moment of their collapse. What an astonishingly poor record that was.
I disagree with the report when it says, “Do not shoot the messenger—they did not exacerbate this situation”. The inherently pro-cyclical way of functioning aggravated the European sovereign debt crisis and pushed several European countries to the brink of bankruptcy. For example, explaining the reasons for Italy’s downgrade on 17 September this year, Standard & Poor’s put forward that,
“market interest rates are anticipated to rise”.
Of course, interest rates would only rise even further as a result of the downgrade by S&P, so it exacerbates the problem and you get this vicious cycle downwards. Of course the creditors are happy, and some of the people behind Standard & Poor’s might be making quite a bit of money out of it.
In the current European context, it is questionable where the true responsibility lies for the austerity and the dire economic consequences we see in nearly all of the European countries in the eurozone, and the social consequences resulting from that. Are democratically elected Governments really able to decide their fiscal and economic policies in full sovereignty and independence, or do Moody’s, S&P’s, and Fitch effectively assume true economic power in the European Union? I think that is a question that needs answering, and I hope we will get a response from the Government in relation to that.
Let us then go to the conflict of interest of credit rating agencies. As I said earlier, they are private companies, and as such their primary purpose is to seek profit and to enhance their market position. The experience of the recent crisis, as well as testimony of former employees of the CRAs, has shown that managerial pressure on analytical units is used in order to modify outcomes and to decide on ratings models which are more likely to enlarge the CRA’s market share in this respect. Accuracy would not seem to be the prime objective of the credit rating agencies.
I think the answer—I disagree with the noble Baroness, Lady Noakes, on this—is that we need to look to the European Union. If this Government were prepared to consider regulation and to deal with this as far as the United Kingdom was concerned, I would welcome that and look at it, but they have ruled that out. The noble Baroness said that she wants less regulation; that is why we need to look to Europe to see some ways of protecting ourselves. I favour the establishment of a European independent credit rating agency. First, such an agency would ensure that we become less dependent on the CRAs’ opinions and would use alternatives to risk assessment in legislation and regulation. Secondly, I would argue that competition between CRAs should be promoted, as some have said already, by lowering the barriers to entry to the market and by increasing transparency. Thirdly, the inherent conflict of interest which I have described in the predominant current business model would be bypassed through sound measures to combine different business models. Rating states and companies needs different criteria; using the same criteria for them does not work.
I would argue that the European Union has the power. I get concerned at this growing Euroscepticism that seems to be infecting both Houses of this Parliament. We saw it with the noble Baroness, Lady Noakes, and, I am afraid, with my noble friend Lord Myners. I am glad that my very good and noble friend Lord Roper is here. He is a long-standing supporter of the European Union and we should be enthusiastic still about what can be achieved collectively. Just a few days after Remembrance Day, we ought to remember why the European Union was set up in the first place. The European Union has an unequivocal mandate in anti-trust matters, determined by the treaty and by directive 2003/6/EC on insider dealing and market manipulation and its amendments, so it has the power to take action in relation to this. I would argue that it should take action.
In summary, the subprime crisis would simply not have happened without credit rating agencies. In the 10 years up to 2007, the revenues of credit rating agencies rose by 900 per cent. That is what they are in it for—to make money. The ratings delivered by credit rating agencies constrain decisions taken by Governments, by pension funds, by banks and by the ECB, because of the credibility given to them. As I said earlier, the three US-based credit rating agencies share 95 per cent of the market. Their business model is riddled with conflicts of interest, and I would argue that fixing credit rating requires tighter regulation of existing private agencies, as well as the establishment of a European independent credit rating agency.
I am not anticipating that the Minister will agree with what I have suggested, but I certainly hope that it will get a positive response from my colleague and noble friend Lord Eatwell, the shadow Minister.
Lord Kerr of Kinlochard
I will not follow the noble Lord, Lord Foulkes, into his trenchant criticism because most of it seems to apply to the role of the credit rating agencies in respect to private issuers; I will stick to the sovereign risk role which is discussed in the admirable report from the committee chaired by the noble Lord, Lord Harrison. I was a member of his committee and he has presented our report clearly. I have virtually nothing to add on the substance.
I do not believe that the credit rating agencies performed very well in the nine or 10 years leading up to the financial crisis. It is very odd that Ireland stayed on an AAA rating from 1999 to 2009—an extraordinary rating—and it is pretty odd that Greece was left by Moody’s unchanged from 2003 to 2009 and then shot down nine notches in under a year and a half.
One of the minor elements in the Commission package of proposals announced today may be quite useful: the idea that there should be more frequent reviews. It suggests six months, which might be worth considering. Most of the other bits in today’s package that seem to be good are the omissions from the rumours of what would be in the package. I do not at all agree with the noble Lord, Lord Foulkes, that it would have been a good idea that the Commission should, as it floated in the summer, put forward the idea of an EU-sponsored, public-sector-paid-for, CRA. That would be a very bad idea for the reasons that the noble Lord, Lord Harrison, has explained. As our report points out, it would be assumed in the markets that,
“EU governments … would have undue influence over its decisions”.
I am puzzled about the present situation of the other very bad idea—it was not floated before we wrote this report, and therefore is not in this report—of the ban on credit ratings, and the power of ESMA to impose temporary exceptional bans. That seems to me to be a rotten idea for a lot of reasons, particularly the one given by the noble Lady, Baroness Noakes, and the noble Lord, Lord Vallance. The moment a credit rating agency signalled that it was under a ban—and it would have to do so, so that the market was not misled into thinking that the previous rating was its considered judgment as of that day and in future—the market would at once react severely, with a panic sell-off of the relevant sovereign debt.
I am very glad to know how the Minister rates these strange events in Brussels today. It looks as if there was a debate in the Commission, and Commissioner Barnier did not win. The text that it has put out today, which explains the draft directive and the draft regulation, says that ESMA will be granted the power to ban sovereign ratings, although such bans would be temporary, exceptional, and subject to strict conditions. In the press release, Monsieur Barnier says,
“The possible suspension of sovereign ratings is a complex issue which … merits further consideration”.
I disagree. It is straightforward, it is black and white, and it is a rotten idea. I hope that the postponement is sine die, and that the Minister may be able to throw some light on that.
There is, in a way, a philosophical problem here. It has been inherent in a lot of things in the European Union since the beginning. Monsieur Barnier says today in his press release that, ratings,
“are not just simple opinions”.
Oh yes they are. That is exactly what they are. We say in our report that investors should not rely on them,
“as an authoritative indicator of creditworthiness, but view them as opinions … to be balanced and confirmed by other market indicators”.
We say caveat emptor should rule. That is because we believe in markets. You could caricature the Barnier philosophy as Colbertian. Ours you could perhaps overwrite as Adam Smith. On one side we have a dirigiste philosophy, and on the other we have the invisible hand. That debate has existed on a lot of much more important matters than this one, and on the whole it is going the right way. The arrival of the Scandinavians and the eastern Europeans has meant that the Colbertians are definitely a minority in the European Union now. I hope the postponement of the idea of suspension means that this issue is also going the right way. The press reports that in the debate in the Commission the British and Swedish commissioners were arguing against the proposal, and that seems plausible. Possibly the debate in the Commission is going the right way because of the admirable report produced by the noble Lord, Lord Harrison. Let us say it could certainly be a factor.
I have a little time left and I want to use the rest of it to raise a slightly wider issue. In the financial crisis and the subsequent lessons-learnt exercises such as the G20, there was general agreement on the need for changes in financial regulation. For EU members, that means changes in EU regulation. I say to the noble Baroness, Lady Noakes, that the Commission is doing its job when it produces drafts. The one produced today is minor, peripheral and not very important. Some of them are very important indeed. Some of them are very silly. In my view, the Tobin tax proposal is very silly and likely to fail for that reason. Some of them are a bit Colbertian and need to be exposed to a good Adam Smith critique, but they are not cooked up on a whim.
This country was part of the international consensus on the need for changes and the Government in whom the noble Lord, Lord Myners, played such a key role was part of that consensus. I say to the noble Lord, Lord Myners, that Michel Barnier is a serious politician who had a long career as an elected politician in France and has had previous successful terms as a commissioner. We should not regard Barnier as a figure of fun. He is not a figure of fun. Nor should we regard some of these regulations as daggers aimed at the heart of London. They are not an anti-British conspiracy. Of course, since they are about financial regulation and the London market is the biggest and most important European market, they are particularly relevant to London.
It is very important that this country plays a central part in the legislative process, making sure that the voice of Adam Smith is properly heard. That might not happen if we were to come to be seen as unconstructive and to describe ourselves as sceptics; if we were seen to be hectoring and unsympathetic in the current debate about the eurozone; if we were showing that we were unaware of what the German constitutional court says, or even what the treaties say; if we were seen to be criticising our partners for prevarication and pusillanimity and delay. They are dealing with a very serious problem. Remember the parable of the bacon and eggs. The 17 eurozone members are the pigs; the 10 non-eurozone members are the hens. Our contribution might be quite useful; theirs is a matter of life and death. This is their currency we are talking about. If, unlike some of the other 10 non-members, we are absolutely determined not to provide any eggs, perhaps we would do well not to cluck quite so much. Perhaps a period of silence, as a great Prime Minister once said, might be called for.
Diplomacy often consists of getting someone else to put forward our ideas as his. He cannot do that if we have already shouted about them aggressively in public, and he will not want to do it if we have previously lambasted him for not acting on them already. I do not expect the Minister to respond to these thoughts but I hope he will take them back with him as he wends his weary way back to Great George Street, where I used to work, and make my successors think about them.
Lord Monks
My Lords, it is a puzzle to me, as it is to some of you, that the three major credit rating agencies, which have made such great errors of judgment in recent years, managed to survive and to prosper. Yet that is the story of the big three, and despite their level of failure investors certainly take notice of their assessments. I can sympathise with what my noble friend Lord Myners said about perhaps not taking them so seriously, but the reality is that many people do and they are a significant influence. I am afraid that we cannot belittle them and pretend that they are a marginal influence. At the very least they are an alibi for investors, with their boards, to say, “Well, it got AAA ratings”, or whatever it was on a particular investment that has gone wrong.
Let us look at their record briefly. Enron was rated AAA. In addition, there were the sub-prime mortgages mentioned by my noble friend Lord Foulkes. The display of a near-fatal lack of curiosity about the people to whom sub-prime mortgages were being sold—mainly people who were low paid and in precarious work—in the United States, was curious, to say the least. Somehow, it was forgotten that there was a risk to those people on the margins of home ownership if interest rates rose a bit and real estate prices fell. The credit rating agencies missed that point. A lot of people missed a lot of points in the economic crisis, as we know, but the credit rating agencies were somewhere at the heart of what went on. They were not on the margins in the C-stream, making comments that people took little note of.
Now the agencies are passing judgments on the troubled eurozone countries. I do not think that they are doing so with much sensitivity to the consequences of their judgments. Several noble Lords referred to the mistake about the downgrade of France last week. The mistake was corrected promptly, but that correction has proved insufficient to quell nervous markets, which had already been betting that France would soon lose its coveted AAA rating. The announcement of the downgrade, therefore, should have been very carefully checked before the judgment was given in the first place, given France’s linchpin position in the eurozone crisis. It clearly was not checked.
Before 2008, credit rating agencies gave dodgy products the benefit of nearly any doubt, provided they were being paid by the issuers of the debt. Now they seem to be compensating for their earlier misjudgments with strict assessments of the sovereign debt of individual countries. I do not believe that there is a conspiracy to do down Europe or the euro. But I do believe that incompetent businesses in a key area like this should pay a price and not fly free.
I congratulate the European Union Committee on the way that this was presented by my noble friend Lord Harrison, and on the analysis, which hits the right note about these agencies. I am more sceptical about the central recommendation, that a more competitive environment will be enough to raise standards. It is obvious that a more competitive environment—as the noble Lord, Lord Vallance, said—could lead to a bidding war between agencies to curry favour with their potential customers.
I do not share the scepticism that several noble Lords expressed about the European Commission proposals. I am not quite sure exactly what the status is of the proposals that were issued this afternoon, but I would not rule out the idea that agencies’ conflicts of interests could be better regulated. Nor would I rule out the idea that agencies might refrain from action during the rescue of a particular country with sovereign debt problems. It is fairly clear that a country in such a position is already in big trouble, without Standard & Poor’s coming along and possibly giving an inaccurate judgment on the situation that the country finds itself in.
I would like to see a register of past performance of credit rating agencies—where they have been right or wrong. That would aid transparency in what is a difficult and risky area.
The other proposal the European Commission was set on—whether it is in the final proposals remains to be seen—was the idea of a civil action in the event of bad advice or a bad rating. People in professions have to pay a price if they are negligent in some way. I do not think that there should be a rush to judgment, or a rush to say that this is another example of Europe trying to barge into the sacred fields of the City of London. The City of London’s future cannot be as a greater Monaco—slightly offshore—if it is to thrive and meet the top standards in the country. It should be welcoming good standards, not appearing, as it often does, to be pushing them away. I do not agree with my noble friend Lord Myners in his judgment of Commissioner Barnier.
I ask the committee, in its future work, to look carefully at the proposals of the Commission to add to its own. We can perhaps find some degree of unity. The Government’s position was reasonably positive: to place a tighter rein on the agencies and develop a more reliable system than the current dangerous oligopoly.
Lord Eatwell
My Lords, a great strength of this report, on which my noble friend Lord Harrison is to be congratulated, is that it distinguishes clearly between the role that rating agencies play in the markets for private securities and the role that they play in the sovereign debt markets. In private markets, rating agencies provide a relatively simple rating for what are often mathematically very complicated financial instruments. Without this sort of interpretation, the markets in complex products could not operate. The role of the rating agencies is to provide confidence to the buyers. Unfortunately, in the recent past that confidence was seriously misplaced, as my noble friends Lord Foulkes and Lord Monks both commented.
However, as the report makes clear, and as the noble Lord, Lord Kerr, pointed out, the task of rating agencies in respect of sovereign debt is quite different. Sovereign debt instruments are typically fairly simple; they are standard bonds of fixed duration. In this instance, the necessary rating skills are quite different from those needed in unpicking a complex statistical model. First, they consist of a devotion to whatever is the conventional economic wisdom of the time. It is convention, not good economics, that matters and often drives markets. Secondly, the sovereign appraisal should include an assessment of the political and economic controversy within and between sovereign states. Here, political fashion inevitably plays a role in determining whether any given package of economic policies is deemed sound or not. As we in this country know to our cost, the current fashion is for austerity—today’s cure for all economic ills.
It is not at all obvious, as the report acknowledges, that the rating agencies have any particular superiority in evaluating sovereign risks over any intelligent investor, as my noble friend Lord Myners emphasised. If the role of rating agencies is so straightforward, why are they of any importance at all in the discussion of sovereign debt? Neither the report nor, disappointingly, the Government’s response addresses this core question. If, as the report’s title suggests, rating agencies are but the messenger, what is the origin of the message that they bear? To put it another way, if they are but the symptom—distressing and perhaps worth treating in itself, but not fundamental—what is the nature of the disease? It is in the light of that more basic issue that we should judge the Government’s response.
The basic issue has two dimensions: the development of the international bond market over the past three or four decades and the particular design of the sovereign bond market in the eurozone. The current structure and scale of international bond markets are a relatively recent phenomenon. For example, today the annual value of cross-border transactions in UK sovereign bonds comfortably exceeds 1,000 per cent of UK GDP. In 1971, the comparable value was nil. A similar explosion of cross-border activity is to be found in the sovereign bond markets of all G7 countries other than Japan. Into this environment of huge cross-border flows is thrust the eurozone, an economic entity larger than the United States of America. The sheer scale of the eurozone economy ensures that any significant bond fund manager anywhere in the world who is seeking to diversify exposure must have major holdings of US dollar bonds and sovereign bonds denominated in euros. However, whereas exposure to the dollar may be obtained by investing in US treasuries, exposure to the euro may be obtained by investing in any of the various eurozone sovereign bonds. Investors have a choice as to which euro sovereign to hold—a choice that is likely to be informed by their estimate of risk and return, and influenced to a greater or lesser degree by the rating agencies. This is a perfect structure for costless speculation and costless hedging, leading to huge flows between euro sovereigns and exposing any given sovereign to almost unlimited speculative pressure via naked trades. This is the disease.
Let me put the matter another way. The state of California, comprising 13 per cent of the US economy, is bankrupt. This has no impact on the US bond market. Greece, comprising 2 per cent of the eurozone economy, is similarly compromised, with disastrous destabilising consequences for the eurozone as a whole. It is against this background of a huge international bond market and a serious design flaw in the eurozone that the Government’s response to the report should be judged.
Do the Government’s proposals, such as they are, help to suppress the symptoms, or do they provide a guide to tackling the disease? The Government rather downplay the report’s criticism of the rating agencies’ performance prior to the sovereign crisis in the eurozone. The report is forthright:
“The valid charge against the rating agencies … is ... that they failed … to identify risks in some Member States”.
The Government’s response ignores this conclusion altogether and focuses instead on the need to share “factually correct information”. Can the Minister explain why the Government do not share the committee’s views on the failings of the rating agencies prior to the crisis?
On the symptoms, the Government are surely right to support measures to reduce hard-wiring of ratings into legislation rules and guidance. Yet the Government’s statement that they believe that,
“the more sophisticated use of ratings by investors should be encouraged”,
is surely one of the more vacuous platitudes of recent times. The Government’s support for greater transparency in the methodologies of the rating agencies, mentioned by the noble Lord, Lord Vallance, is likely to make matters worse rather than better, by increasing volatility as traders, knowing the methodologies, anticipate ratings changes.
In contrast to the noble Baroness, Lady Noakes, the Government express enthusiasm for greater regulation of the ratings agencies. As was pointed out, the Government signed up to this at the G20. Will the Minister tell us what regulatory steps the Government propose and explain how these steps will enhance the smooth operation of sovereign bond markets? What is most striking about the Government’s response is that it makes no attempt whatever to locate the role of the rating agencies in the context of the overall operation of the eurozone sovereign debt market. That, after all, was the topic of the report. Mr Cameron and Mr Osborne have repeatedly urged the eurozone Governments towards action, without spelling out exactly what action they propose. Perhaps the Minister will help fill the void in government thinking this evening by telling us what steps the Government propose should be taken to stabilise the eurozone bond market and where the rating agencies fit in to the Government’s plans.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, I start by thanking your Lordships for a thorough and insightful debate on the role of the sovereign credit rating agencies. I particularly thank the noble Lord, Lord Harrison, and the members of EU Sub-Committee A, on Economic and Financial Affairs and International Trade, for their report. It is a report of considerable importance as we continue to live with the consequences of a financial crisis in which credit rating agencies played a significant role, and as we cope with a sovereign debt crisis in which they continue to have a key role.
The Government believe that the report contains a number of valuable insights, with which they largely agree. We have had a surprising alliance of dissenting voices, starting with the noble Lord, Lord Foulkes of Cumnock, who spoke in his characteristically vigorous style. I am sorry that the noble Lord, Lord Myners, did not hear that analysis of the credit rating agency scene, which differed completely from the one that he gave. The noble Lord, Lord Monks, was also a dissenting voice. In a rather different way, the thoughtful analysis of the noble Lord, Lord Eatwell, came to some different conclusions. However, the Government believe that your Lordships’ report is very valuable and will continue to inform the European-led decisions.
We are firmly of the view that credit rating agency reform is needed. However, as the committee rightly highlights, it is also important to remember that credit rating agencies play a critical role in efficient financial markets by providing independent assessments of creditworthiness. Since the financial crisis, Europe has already agreed new regulation on CRAs, which has come into effect. Therefore, today’s new proposals constitute a third round of proposals coming out of Europe since the crisis. I should say at this point that the subject of the debate is for the Government to respond to your Lordships’ committee. I understand that many of the questions concern the European proposals that have emerged just this afternoon. I will address them as far as I can but your Lordships will appreciate the shortness of time in this debate and the fact that my first duty tonight is to respond to the committee’s report. However, we have had a third round of proposals from Europe today.
As has been noted, CRAs are now supervised under the European Securities and Markets Authority and must comply with raised standards on methodology, conflicts of interest and disclosure. That is business that is already agreed. While this represents substantial progress, the Government believe that further CRA reform should focus on three aspects which closely reflect the committee’s overall conclusions. First, it is vital to reduce overreliance on CRA ratings. That point has been made by a number of speakers this evening. We strongly agree with the report that investors must ultimately take responsibility for their own investment decisions—caveat emptor, indeed. The hard-wiring of ratings in legislation, or in the internal risk assessments of financial institutions, leads, among other things, to cliff-edge effects and instability.
Secondly—this was also recommended by the committee—we support increased disclosure of ratings assumptions and process, and of underlying assets embedded in complex products. This will encourage investors to use CRA ratings in a more sophisticated manner. It will also make CRAs more accountable for their ratings.
Finally, we support fostering competition in the credit rating agencies, but without compromising ratings quality. We agree with the committee’s recommendation against the public provision of ratings. Instead, we favour reducing reputational barriers to entry such as through initiatives to establish a central platform of CRA performance statistics. The Government also strongly agree that international consistency on CRA regulation is important. We shall continue to use the Financial Stability Board to stress this because it is not only Europe but IOSCO and others that are coming forward with proposals, so the FSB will be important.
I want to take this opportunity to respond to some of the key conclusions of the report. We agree with the committee’s assessment that CRAs cannot be held responsible for precipitating or exacerbating the euro area crisis. Sovereign downgrades in Europe have reflected fundamental internal and external imbalances and CRA reform should not distract us from the key task of addressing those imbalances. The noble Lord, Lord Eatwell, challenges me with the rather bigger question of what action needs to be taken to stabilise the eurozone. I wish that we had time for that subject tonight, but there will be other opportunities. A lot of critical action is needed. CRA reform is important but it should not distract us from the other actions that he talks about which are for another debate.
We also agree that the proposal to suspend ratings for countries receiving international aid would only reduce information in the financial markets, possibly leading to further contagion. The key to reducing the destabilising effects of rating changes is timely and effective communication by the CRAs, not suspension. The Government agree that CRAs should always seek to learn from their past performance and endeavour to provide markets with timely and accurate ratings. However, the build-up of imbalances in the euro area was not reflected in the data in the run-up to the sovereign crisis, so it is crucial that the quality of national statistics in Europe is improved to underpin the assessment by CRAs and all others.
The committee also suggests that there should be a competition inquiry into the industry—a point that was touched on by the noble Lord, Lord Harrison, and others this evening. The competent authority to survey competition in the industry is the European Commission. It should keep the industry under review. The concentrated nature of the industry has been referred to a number of times, but it is for the Commission to decide whether there is evidence of the abuse of a dominant market position on which to base a competition inquiry. Such an inquiry should have regard to the impact of recent and forthcoming reforms in the CRA industry.
As we know, the debate has been particularly timely because the European Commission today released its proposals for this further package on CRA reform, which I believe will be voted on under qualified majority voting. I have to say at this point that I very much agree with the noble Lord, Lord Kerr of Kinlochard, that it is not necessary or appropriate for the noble Lord, Lord Myners, to lampoon Commissioner Barnier. I hope that this debate is read in Brussels for a lot of the serious comment that is highly relevant to the Commission’s ongoing deliberations; but frankly the comments of the noble Lord, Lord Myners, do the UK absolutely no favours by lowering the tone of the debate in a rather demeaning manner. He sits there and laughs, but it exemplifies why the previous Government made so little progress in many European negotiations. He takes a flippant and dismissive attitude to the Commission, and it really is not necessary.
Our initial response to the Commission’s proposals is very much in line with the committee’s conclusions. We welcome the proposals to reduce the overreliance on CRA ratings and to improve the transparency of ratings, the methodology and the structured finance products. Such transparency will help foster competition. It is worth noting that already 31 CRAs have applied for registration in Europe, so there is evidence of developing competition—a point raised by my noble friend Lord Vallance of Tummel, as well as my noble friend Lady Noakes.
We oppose measures to interfere directly with industry structure or with ratings methodology. We strongly oppose efforts to harmonise and increase the scope of CRA liability, for which we already have an appropriate regime in the United Kingdom.
Clearly, many parties raised concerns about some of the proposals that were suggested earlier—particularly the ban on sovereign ratings and the thought of a publicly funded EU rating agency. We share those concerns and are glad that the Commission has agreed that they merit further reflection. I am not able to say whether it is a sine die, kick-into-the-long-grass situation; we will have to look at the detail and see what happens. However, it is a good first step to see the proposals taken off the table for the moment. Of course, we do not want to see a special regime for regulating sovereign markets, which would reduce their impartiality and comparability and hence their value in international markets.
The Government are committed to reforms that will ensure that credit ratings are credible and transparent, and will continue to serve as a useful indicator to international financial markets. The Government will continue their close engagement with European and international partners to achieve these objectives. We look forward to examining today’s Commission proposals in detail and to keeping the House fully abreast of the Government’s developing response.