House of Commons

Thursday 1st December 2011 Commons Chamber

Thursday 1 December 2011

The House met at half-past Ten o’clock

Prayers

Thursday 1st December 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 1st December 2011 Commons Chamber

The Secretary of State was asked—

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

1. What recent discussions he has had with the Secretary of State for Business, Innovation and Skills on the effect of the Green investment bank on levels of investment in renewable energy infrastructure.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

I regularly discuss the Green investment bank with ministerial colleagues, including the Secretary of State for Business, Innovation and Skills, and am confident that it can play a major role in capitalising private sector investment in renewable energy.

[Stephen Mosley]

I thank my right hon. Friend for his answer and welcome the Chancellor’s announcement in his autumn statement earlier this week of £200 million in incentives to support the green deal. Will the Green investment bank be able to back up that important investment and provide low-cost loans to support the green deal?

[Chris Huhne]

Supporting energy efficiency projects is indeed part of the Green investment bank’s remit, and clearly that includes the green deal. We can certainly envisage a key role in the launch of the private finance, because after all the green deal is private finance, but at the very beginning it will be important that the markets gradually get used to the idea of that new type of instrument, and the Green investment bank could have an important role in facilitating that.

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

I am glad to hear that the Secretary of State is discussing the issue with colleagues. When will a decision on the location of the Green investment bank be made, and when will it be up and running for business?

[Chris Huhne]

The first investment should be made in the spring of next year. The location will be a matter first for the advisory board, whose advice I also anticipate will be available next year. The hon. Gentleman will bear it in mind that the Department for Business, Innovation and Skills is leading on this.

[Roger Williams (Brecon and Radnorshire) (LD)]

The coalition agreement emphasised anaerobic digestion as a technology to take forward, yet many people who are keen on it find obstacles in their way, including funding. Will the Green investment bank be able to provide funds for those people so that they can take their projects forward?

[Chris Huhne]

I thank my hon. Friend for his question. He is right that anaerobic digestion is one of the technologies that we want to encourage. Indeed, it falls broadly within the renewables remit of the Green investment bank, but my understanding of the problems with anaerobic digestion is that they relate principally to planning and objections, rather than funding. Funding is not the key issue with AD.

[Caroline Flint (Don Valley) (Lab)]

As we heard on Tuesday, because of the Government’s cuts, which are going too far and too fast, the economy is flatlining, unemployment is rising and the Government will miss their borrowing targets. In his autumn statement the Chancellor lauded the Green investment bank as proof of his green credentials, but on 9 September the Government confirmed in a written answer that the Green investment bank would have full borrowing powers only from April 2015, subject to public sector net debt falling as a percentage of GDP. Will the Secretary of State confirm that the Government’s policy is that we will not have a proper Green investment bank with borrowing powers until 2016 at the earliest?

[Chris Huhne]

I thank the right hon. Lady for her question. When the Green investment bank will be able to borrow has been set out clearly from the beginning. She wants to make the point that the borrowing powers of the Green investment bank are delayed, but the reality is that we are the only leading industrial country never to have had an infrastructure bank, despite the common experience of the 1930s and despite 13 years of Labour government. I very much hope that we will meet the net debt-to-GDP target as soon as possible, and when we do the GIB will be able to borrow.

[Simon Wright (Norwich South) (LD)]

2. What recent discussions he has had with major energy companies on their pricing policies.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

I am sorry, Mr Speaker, but I do not have the answer to the question.

[Mr Speaker]

It is on what discussions the Secretary of State has had with major energy companies on their pricing policies.

[Chris Huhne]

Thank you, Mr Speaker. I was under the impression that the question had been withdrawn, but I am happy to answer my hon. Friend.

We have had a number of discussions with energy companies, most recently the energy summit, in which we discussed consumer pricing.

[Simon Wright]

I thank the Secretary of State for his response. I am concerned about the extent of savings that are offered to the internet savvy and subsidised by offline customers. Given the digital divide, with many of the poorest households and older customers not having internet access, what action is he taking to ensure that everyone pays a reasonable price for their energy?

[Chris Huhne]

One of the key issues is that people who do not have online access should be able to get sources of advice that enable them to take advantage of cheaper tariffs. That may be people who are elderly or not necessarily able to get online, and one of the things that we are attempting to do is to encourage charities in the sector and organisations such as Citizens Advice to provide help when it is not forthcoming from family members. They are also a very important way of helping the elderly to move on to cheaper tariffs, however, and I know that a lot of family members do take the time to ensure that elderly members of the family get cheap tariffs.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

Energy pricing affects our industrial competitiveness, so although I welcome the Government’s steps in the autumn statement on energy-intensive industries, I note the real concern in the ceramics sector that such steps will do nothing to assist it. Will we see further announcements in the coming weeks for industries such as ceramics, particularly on capital allowances?

[Chris Huhne]

One key thing with the energy-intensive industries is that it is crucial to help those that will be most affected because of electricity intensity and their competitive position in terms of trade. We will set out the full details of that in the consultation.

[Mr John Baron (Basildon and Billericay) (Con)]

The Minister will be aware that one recommendation of the billing stakeholder group was that energy suppliers should send a tailored communication to customers, detailing in pounds, shillings and pence how much they could save by transferring to that company’s cheapest standard direct debit tariff in time for this winter. Two suppliers, Scottish Power and npower, have complied; four have not. Will the Minister now look at bringing those four into line?

[Chris Huhne]

First, I pay tribute to my hon. Friend for his work on the issue, because it is crucial that people are provided with clear and specific advice on what they can do. He is absolutely right to draw attention to the two large energy companies that have already complied, and yes, indeed, we are bringing pressure to bear to ensure that all the others follow.

[Bill Esterson (Sefton Central) (Lab)]

Will not energy companies benefit from pricing at the expense of companies such as Energy Outlet, in Formby in my constituency, which has lost business due to the cuts in support for solar energy, and that consumers will also lose out due to the change that the Secretary of State has made at short notice?

[Chris Huhne]

I simply do not agree with the hon. Gentleman, who argues that consumers will lose out from the measure. If we had not acted quickly to deal with cost overruns in the sector, not only would we not have been able to provide a sustainable future for those who are employed and have businesses in it, but we would have added so substantially to consumer bills that the impact on many other businesses right across the country, through reduced consumer spending, would have been substantial.

[Ian Murray (Edinburgh South) (Lab)]

4. What steps he is taking to assist households with their energy costs.

[David Wright (Telford) (Lab)]

10. What steps he is taking to assist households with their energy costs.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

We expect the warm home discount scheme to help about 2 million low-income and vulnerable households per year. This winter, energy suppliers will be required to provide automatic rebates of £120 on energy bills to more than 600,000 pensioners on the pension credit guarantee. In future, the green deal and the energy company obligation will provide energy efficiency measures at no up-front cost.

[Ian Murray]

The Minister will be aware that the Secretary of State, at the Liberal Democrat conference just a few weeks ago, said:

“None of us should have to save on warmth in a cold winter. Some of the most vulnerable and elderly will shiver—and worse—if we do not help.”

Why then does he believe that the Government should cut winter fuel payments to 12.7 million pensioners?

[Charles Hendry]

The hon. Gentleman will be completely aware that that policy was announced by the previous Government, who did not put the money into their budget for it to go forward. We have therefore continued the policy that was put in place, but we have introduced the most rigorous scheme of energy efficiency in our homes—rolling it out in a way not even dreamed of by the previous Administration—to bring lasting help and care to support such people.

[David Wright]

Twenty-eight per cent. of households in the west midlands live in fuel poverty, and one of the key issues for them is the quality of the housing stock in which they live. Obviously, the poorer the housing stock, the more difficult it is to heat. What specific support are the Government giving to help those in private rented housing, which is often not invested in by landlords and often very fuel inefficient?

[Charles Hendry]

The hon. Gentleman makes a very important point. That is why the green deal has focused very strongly on those in the private rented sector and why we are considering introducing a legal obligation on private landlords to ensure that their homes are brought up to a reasonable standard. This sector has often been overlooked and has been harder hit than many others, and we are determined to make sure that it is now addressed properly.

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

I very much welcome the warm home discount scheme, for which a number of elderly people in Bournemouth would probably be eligible. How are the Government making people aware of this important scheme?

[Charles Hendry]

My hon. Friend rightly draws attention to the warm home discount, which is up by two thirds as a result of the decisions we have made, whereby £120 million will be spent supporting 600,000 poorer pensioners. The energy companies are writing directly to many of their customers—and we, as a Government, are writing to millions of others—to make sure that they are aware of the extra energy efficiency support that they can have.

[Andrew George (St Ives) (LD)]

How does my hon. Friend believe that the practice of falling block tariffs and direct debit discounts for the comfortably off helps to address fuel poverty?

[Charles Hendry]

My hon. Friend raises the important issue of whether people should pay more for the additional units they use or whether the level should drop. Our concern about moving to a rising rate is that children, pensioners or people with disabilities who are at home more and need more warmth could be adversely hit by such a change. Not only the larger properties and the richer families would be affected; it could easily also affect those whom we are most keen to support and help.

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

Does the green deal Minister remember telling the Energy Bill Committee that he fully expected the energy company obligation to provide a far greater level of support to tackle fuel poverty than either the carbon emissions reduction target or Warm Front? In what way is ECO’s pitifully small £325 million a year for fuel-poor homes a far greater level of resource than the 2010-11 Warm Front spending of £370 million or CERT spending of about £600 million on priority groups?

[Charles Hendry]

I am sure that the hon. Lady is aware that this is funding that people can have in addition to the green deal support. It is designed to make sure that there is a comprehensive approach. We have sought to ensure that we have an holistic approach and that we do more on energy efficiency and on assisting poorer households. We are trying to make sure that we do this in the most effective way possible.

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

5. What representations he has received on feed-in tariffs from people in Stoke-on-Trent.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

The Department has received a significant number of telephone inquiries, responses to consultation exercises and other pieces of correspondence relating to the consultation on feed-in tariffs. These are very likely to have included representations from the people of Stoke-on-Trent. However, at this early stage I am afraid that I cannot give the hon. Lady a detailed breakdown.

[Joan Walley]

The Minister did in fact receive a letter from the chief executive and leader of Stoke-on-Trent council telling him that what is at stake with the Government’s review of the feed-in tariff is 100 jobs and 4,000 council homes that will lose their opportunity to reduce heating bills. What is going on in Stoke-on-Trent is echoed all around the country. Given that everybody agrees that the feed-in tariff needs to be reviewed, but in a phased way, does the Minister agree that, at the very least, the existing tariff levels should be honoured for aggregated solar photovoltaic schemes where there are existing contracts?

[Gregory Barker]

There is nothing retrospective about the proposals that we are consulting on. The hon. Lady must accept that demand for the scheme is overwhelming compared with the budget that is available, and way beyond that which was anticipated by her own Government. We have to make very difficult decisions in balancing one factor against the other, but at the centre of our decision-making process will be a concern to ensure that this is a viable scheme that keeps the industry alive for the long term and does not support a short-term bubble.

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

rose—

[Joan Ruddock (Lewisham, Deptford) (Lab)]

rose—

[Mr Speaker]

Order. Although I accept that the same sun shines on all three places, Huddersfield and Lewisham, Deptford are rather a long way away from Stoke-on-Trent, to which this question is confined.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

6. What recent assessment he has made of the effects of Government policy on household energy bills.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

I am delighted to say, Mr Speaker, that I do have the answer to this question.

On 23 November, DECC published its updated assessment of the impact of energy and climate change policies on energy prices and bills. The latest estimates show that the average household dual fuel bill is currently 2% higher than it would have been if energy and climate change policies were not introduced. By 2020, these policies will mean that the average household dual fuel bill will be 7% lower than it would have been in the same year in the absence of our policies.

[Annette Brooke]

I thank the Secretary of State for that answer. Would he be prepared to work with the Department for Communities and Local Government to see how the benefits of the discount schemes for people on low incomes could be extended to park homes, where the site owner is likely to buy in bulk and then resell, perhaps at quite a high price? To help the very vulnerable people in park homes, could there be a specific campaign to tell park home owners that they are eligible for the green deal?

[Chris Huhne]

I am grateful to my hon. Friend for that question. As a long-standing campaigner for people who live in park homes, she knows that they are far too often overlooked in schemes that benefit people who live in substantial and ordinary properties. It is crucial that we have the dialogue that she asks for to ensure that we help those people as far as we can. There are obviously practical issues that we need to address. We will try to get to the bottom of this.

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

The Minister may not know that Huddersfield has a twinning arrangement with Stoke-on-Trent and that we work very closely together. People in Huddersfield, like the people in Dorset and Stoke-on-Trent, are sick to death of the cost of energy. They want a more visible, muscular effort from this Government to take on the energy companies, many of which are foreign-owned, and make them do their job.

[Chris Huhne]

I am sure that Mr Speaker is aware of Yorkshire’s unilateral declaration of independence, which allows twinning arrangements to be entered into between towns in Yorkshire and towns elsewhere in the country.

The hon. Gentleman made a serious point about energy costs. I assure him that we are doing more than was done under the Government whom he supported for 13 years to make this market as competitive as possible. We have just had the Ofgem retail review and its proposals to simplify the tariffs dramatically to make things much easier for consumers. We have introduced a clear limit on the period in which the energy companies have to switch people over. We are doing everything we can to make this a competitive market, at both the retail end and the wholesale end. That is the best guarantee for every consumer in this country, be they in Huddersfield or Stoke-on-Trent, that they will get the best possible deal.

[Mark Durkan (Foyle) (SDLP)]

Will the Secretary of State work with colleagues to establish a cost of warmth index, which could usefully inform the work of his Department, the Department for Work and Pensions, the Treasury and Parliament?

[Chris Huhne]

That is an interesting thought and I would certainly be interested to see more from the hon. Gentleman about this issue. I can see practical difficulties, given that warmth comes from so many different sources. For example, people who are off-gas grid and are reliant on heating oil may have substantially different problems from those who are on-gas grid and are able to avail themselves of a number of things. I would certainly be prepared to look at the idea if the hon. Gentleman put something on paper and sent it over.

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

7. What representations he has received on the length of time allocated to his consultation on feed-in tariffs for solar PV; and if he will make a statement.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

The Department has received a number of representations in response to our proposals to reduce feed-in tariffs for solar PV, including the length of time allocated to our consultation. The consultation closes on Friday 23 December. Detailed information on the representations will be provided in the Government’s response to the consultation in January.

[Mr Cunningham]

Is the Minister aware that many people who have given up their jobs or borrowed money from banks to invest in this area stand to lose out? What does he intend to do about that?

[Gregory Barker]

We intend to put the industry back on a sustainable path to growth, far more in line with the projections that were made by the former Secretary of State for Energy and Climate Change who is now the Leader of the Opposition. We need a scheme that supports the industry but does not impose burdens unnecessarily on hard-pressed consumers.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

Will my hon. Friend explain why the cut-off date of 12 December for new projects to be accepted at the current feed-in tariff is different from the consultation end date of 23 December? Why the two-week gap?

[Gregory Barker]

The reference date of 12 December is what we are consulting on, but the changes that we are proposing would not actually kick in until the beginning of April. We had to choose a date that we thought fair to allow people who had contracts in the pipeline to complete those contracts, but without allowing sufficient time for people to enter the market who were not already engaged in the process, and we chose April.

[Caroline Flint (Don Valley) (Lab)]

We all know that the Government’s consultation, which will last half the normal length of time and close after the cuts have already come into effect, is a sham. Because of the Government’s rushed changes to the feed-in tariff, which go too far, too fast, thousands of jobs are at risk. Last night, 4,500 staff at Carillion were warned that their jobs could go, but this morning the Secretary of State told the “Today” programme that he did not recognise that estimate, and that the cuts and job losses that he will cause were just a “sensible course correction”. Does the Minister believe that causing unemployment on that scale is a price worth paying?

[Gregory Barker]

It is so interesting how the right hon. Lady comes to the House with such inconsistent messages. One moment she wants to protect the consumer, the next she wants to push high costs on to consumer bills without a thought for the fuel-poor. The fact is that we are doing our best to contain a bubble caused by the ineffective scheme that her Government set up. We will put the industry back on a sustainable footing and do the right thing by the consumers whom she has conveniently forgotten.

[Caroline Flint]

Sorry excuses for a disastrous policy. I think it is 60p on an annual bill—in fact, in answer to a parliamentary question last week we were told that it was only 21p on the annual bill from 2010 to 2011. The fact is that the Minister’s cuts will hit families trying to protect themselves from soaring energy bills, put thousands of jobs and businesses in jeopardy and give the lie to the Government’s promise to be the greenest Government ever.

Last week, we read reports in the press about a meeting in the Minister’s Department between officials and the solar industry, in which officials said that the cuts to feed-in tariffs were part of a deliberate policy to kill off the solar industry. Will he come clean today and say that that is not his policy? If not, even at the eleventh hour and despite the damage that has been done, will he change course to enable solar to be put on a real sustainable footing for the future?

[Gregory Barker]

I think this ridiculous scaremongering is quite disgraceful. The right hon. Lady wants to talk up the problem and talk down the industry, and this pathetic attempt to smear my officials is frankly repugnant. It is her scheme that we are trying to fix—it was put in place by the last Labour Government. We will fix it and put the industry on a sustainable footing, but we should not take any lessons on budgetary control from the party that left us with a catastrophic deficit and drove this country to the brink of ruin. Shame on you!

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

8. What assessment he has made of the potential benefits of the renewable heat incentive for rural and remote households.

[Mr Speaker]

I call the Minister, if he has recovered his composure.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

The renewable heat premium payment, the initial heat support scheme launched on 1 August, is targeted at off-gas-grid homes, particularly those in rural and remote areas. It is too early to make an accurate assessment of the benefits, but we intend to evaluate them fully next year to feed into developing future support for renewable heat.

[Dr Poulter]

The Minister will be aware that 8% of UK households rely on oil for their central heating, many of which are in rural and remote communities, and that many people who use oil central heating are the frail elderly and people on fixed incomes. When he consults on the feed-in tariffs, will he look into the advantages of biofuels as a means of both driving down carbon emissions and supporting lower energy bills in rural communities?

[Gregory Barker]

My hon. Friend makes some excellent points. Sustainably sourced biofuels for electricity, including bioliquids, are already supported under the renewables obligation, but they are not currently supported by the feed-in tariffs. We will launch phase 2 of the feed-in tariff comprehensive review, which will consider their potential expansion to new technologies such as bioliquids. I certainly take his points on board.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Does the Minister consider that the renewable heat incentive makes sufficient provision for the encouragement of domestic and small-scale combined heat and power boilers, which are particularly appropriate to off-grid households but may not be fully covered by the provisions of the RHI because they are not necessarily supplied by fully biogas-based sources? Is he willing to investigate that and consider whether the RHI could support such devices to a better extent?

[Gregory Barker]

I am very willing to do so indeed. The RHI has not been launched in full for domestic appliances—we are currently trialling it with the RHPP—but I am keen to support micro-CHP in the way that the hon. Gentleman suggests. He is an expert on this area and I would be happy to work with him to see what further support we need to drive forward this exciting technology.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

9. What steps he is taking to secure agreement on climate finance in advance of the Durban climate change conference.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

There are three main elements. On fast-start finance to developing countries, I am proud to say that the Government are on track to deliver our £1.5 billion pledge. We want other donors to do the same. On long-term sources of climate finance, we are at the forefront of pushing for new sources of public and private finance and we want others to join us there too. Lastly, we will push for the green climate fund to be operationalised in Durban as part of a balanced outcome to the negotiations.

[Catherine McKinnell]

I thank the Secretary of State for that answer, but recent press reports suggest that countries might not be able to reach an agreement at Durban even on the green climate fund, which had been the only realistic expected outcome prior to the summit. What steps are the UK Government taking to ensure that countries reach an agreement on the structure, operation and finance of the fund?

[Chris Huhne]

My officials are working diligently on that. We want as many outcomes at Durban to operationalise the agreements at Cancun as we can get. I do not agree with the hon. Lady that that is the only potential outcome. One of the most important things we can hope to get out of Durban if the talks go well is a commitment from all parties to ensure that we have an overarching legal framework. We can negotiate that and we could also respect the science by ensuring that we peak global emissions by 2020.

[Ann McKechin (Glasgow North) (Lab)]

I am sure the Secretary of State will agree that financing for climate change measures is absolutely vital and that we have a very short period of time if we are not to feel the adverse affects of climate change. Does he agree with many groups, including the World Bank, the International Monetary Fund and the shipping industry, that a global tax on shipping is one way in which we could achieve a fair and sustainable way of financing climate change measures?

[Chris Huhne]

I certainly believe that a levy—a bunker fuels duty or whatever—is one potential way of raising the finance necessary. That was a recommendation in the report of the advisory group on finance, which was set up by the UN Secretary-General and in which I was honoured to participate. That is one of the most likely ways forward in breaking the back of that particular problem.

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

11. What progress he has made in establishing the green deal.

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

15. What progress he has made in introducing the green deal; and if he will make a statement.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

The green deal is a coalition agreement and a priority for this Government. We established the legal underpinning for green deal through the Energy Act 2011 and recently launched our consultation on secondary legislation, which will guide the detailed operation of the scheme. I am encouraged by the support we have had in developing this policy and the interest shown by a broad range of organisations in playing a role.

[Shabana Mahmood]

The green deal consultation sets out the Government’s plan to give three times as much subsidy to able-to-pay households than to fuel-poor households that take up the green deal. Why are Ministers giving three times more help to home owners who can afford to pay for improvements than to people living in fuel poverty?

[Chris Huhne]

The hon. Lady should be aware that the eco-subsidy is replacing two elements that we inherited from the previous Government: the Warm Front scheme, which was aimed at helping those in fuel poverty, and the carbon emissions reduction target and community energy saving programme schemes, which were aimed generally at householders. The proportions are broadly similar, so I do not accept that this is a departure in policy in terms of prioritisation. She will be aware that the warm home discount is aimed at those in fuel poverty—it will give two thirds more support to those in fuel poverty and will be targeted on the 600,000 most needy pensioners. That is a statutory scheme, which compares with the voluntary one under the previous Labour Government.

[Gordon Banks]

In answer to earlier questions, Ministers said that the green deal is with us and working here and now, but it is not. The Government are scrapping Warm Front and delays with the green deal mean that they will be the first Government since the 1970s who have not had a fuel efficiency programme. At the same time, they are downgrading the number of jobs that will be created by the green deal by 35,000. The question is simple: why?

[Chris Huhne]

The eco-consultation and that jobs estimate obviously came out before the Chancellor’s announcement in the autumn statement of £200 million of incentives for the uptake of the green deal. Those introductory incentives have been warmly welcomed across the industry and will ensure that we have substantial uptake of the green deal. On the point about funding, the whole model of providing energy efficiency changes with the green deal. That was supported across the House, including by the last Labour Government. It will, I believe, unlock substantially more money that was ever available from publicly funded, Exchequer-funded sources.

[Mr Speaker]

Order. I hope that the Secretary of State will not overuse his renewables.

[Guy Opperman (Hexham) (Con)]

The Green Alliance has conducted three constituency pilot workshops in my constituency of Hexham, in Bristol North West and in Redcar today. Will the Minister meet the Green Alliance and me before Christmas to discuss the outcomes for the green deal that we studied for some considerable time only last month?

[Chris Huhne]

It is a very interesting idea and one that certainly merits further consideration. I am delighted to say that the Minister of State, Department of Energy and Climate Change, my hon. Friend the hon. Member for Bexhill and Battle (Gregory Barker), will be very happy to meet my hon. Friend to take that matter further.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

We have heard a lot about interest rates this week. Affordable interest rates for green deal finance will be crucial if consumers are to take up the green deal at the scale and level the Government anticipate. A report by E3G says that relying on commercial loans could mean interest rates as high as 8%, 9% or even 10%. Polling has found that only 7% of the British public and homeowners would be interested in taking up the green deal if interest rates were as high as that. Given that, what specifically are the Government doing to get green deal interest rates down?

[Chris Huhne]

We are working closely with a group of interested parties to provide a finance aggregator for the green deal, which is exciting and will bring forward finance that is substantially cheaper than that estimated by E3G. We will announce the details of the scheme when we have them.

[Luciana Berger]

I thank the Secretary of State for that answer. The aggregator to which he refers is the Green Deal Finance Company, which is working very hard to try to lower interest rates. It estimates that it will need hundreds of millions of pounds from the Green investment bank properly to fund the initial capitalisation of green deal loans and to act as the catalyst that the green deal market needs. Without such funding, interest rates will be higher than 10% and the green deal will, therefore, surely fail. A moment ago, the Secretary of State said that he envisaged that the Green investment bank would provide some support for the green deal and that it could play a very important role. Will he tell us definitively today whether the Green Deal Finance Company will receive that scale of funding from the Green investment bank?

[Chris Huhne]

Obviously, it is up to the Green investment bank board to make its decisions, but it is clear that it is interested in helping energy efficiency and ensuring that green deal finance gets off to a good start. Let me make it clear how this particular market is structured. Green deal receivables—please excuse me, Mr Speaker, for reverting to financial market jargon—are very similar to utility receivables. As soon as the market is established and we secure a couple of deals, the Green investment bank’s support will become important. The market will then be happy to finance this on terms similar to utility receivables. If it does that, we will be looking at substantially lower interest rates than the ones the hon. Lady has been citing.

[Chris Williamson (Derby North) (Lab)]

12. What discussions he has had with the Chancellor of the Exchequer on the implications of the autumn statement for investment in energy infrastructure and onshore wind farms.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

I have been fully engaged with the development of the infrastructure theme of the growth review, embodied in the accompanying national infrastructure plan 2011 and announced in the Chancellor’s autumn statement. I welcome the inclusion of measures relating to energy infrastructure, including onshore wind. These will help to deliver our ambition for a secure, low carbon and affordable energy system.

[Chris Williamson]

This was supposed to be the greenest Government ever. The Secretary of State has already undermined solar energy and torpedoed carbon capture and storage. His attempts on the “Today” programme to distance himself from the Chancellor’s autumn statement cannot conceal the fact that his green credentials lie in tatters. Can he explain to the House why he has been so singularly unsuccessful in securing the investment that we so desperately need for a low carbon economy?

[Chris Huhne]

I think we must have been living in different worlds. The Government’s achievements on the green agenda since the election include electricity market reform, the green deal in the Energy Act 2011 and the pioneering renewable heat incentive. Furthermore, we have brought forward the subsidy review for renewables, which was widely welcomed by the sector, and secured £1 billion for the carbon capture and storage programme. Indeed, yesterday I visited a CCS pilot partially funded by Government money. I think that the hon. Gentleman is overlooking many achievements on the green agenda that do indeed mean that we are on course to be the greenest Government ever.

[Mr Mike Weir (Angus) (SNP)]

In interviews at the time of the autumn statement, the Chief Secretary to the Treasury announced casually that the money for the CCS project was being reallocated and would not be required until well into the next Parliament. Given that the Secretary of State has already pulled the rug from under Longannet, is this not clear evidence that he has abandoned any hope of developing CCS as a potential export industry?

[Chris Huhne]

Absolutely not. By the way, the hon. Gentleman did not quote the Chief Secretary precisely. The Chief Secretary pointed out that money was absolutely available for a CCS project. Indeed, all the negotiators involved in the Longannet project recognised that although the money was not enough to make Longannet work, it would be enough to make a CCS project work elsewhere. The reality is that there will be some slippage. The profiling of that £1 billion in the comprehensive spending review was heavily weighted towards the last year of the CSR, and if there is slippage it is bound to be in the next CSR. However, we will make profiling decisions on expenditure for CCS when the projects come forward following the competition next year, and I can assure the hon. Gentleman that the money is available to fund them.

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

The Secretary of State has just reiterated his claim last month that the £1 billion for CCS is safe. If so, will projects, including at Peterhead and elsewhere, aiming to be up and running before the end of this Parliament still have access to that £1 billion? If so, how does that square with the comments from his Cabinet colleague, the Chief Secretary to the Treasury?

[Chris Huhne]

The 2016 date is the end date for the competition run by the EU Commission. We hope to be able to support those projects in the UK that the Commission decides it is sensible to support, but there will be other projects too. The £1 billion is not necessarily available to fund the up-front capital costs entirely. If we can get private money into a scheme—such as the one I saw yesterday at Ferrybridge, where we invested £6 million despite the total cost being about £250 million—that is the right way to go. The Government are about using public money as effectively as possible to bring in private sector money as well.

[Glyn Davies (Montgomeryshire) (Con)]

13. What recent assessment he has made of the prospects for shale gas in the UK.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

Exploration for shale gas in the UK has only recently started, and it will be some years before the prospects for production in our geological, regulatory and economic conditions, and the economic prospects for the industry, can be fully assessed. However, a British Geological Survey study last year estimated that UK shales might yield some 150 billion cubic metres of gas—equivalent to roughly two years’ demand. Work is in hand to update these geological estimates in the light of more recent information, including Cuadrilla’s estimate of gas in place under its licences in Lancashire.

[Glyn Davies]

Media reports in the US state that shale gas discoveries have reinvigorated US oil and gas production. There have been substantial discoveries of shale gas in the UK, as the Minister mentioned, so does he agree that the UK could learn lessons from the US experience with a view to developing shale gas in the UK?

[Charles Hendry]

My hon. Friend is right to point to the lessons from the United States. Shale gas has transformed the energy outlook there and potentially turned the US from a gas importer to a gas exporter. There might be lessons to learn, but there are very different rules here on land ownership that will make things much more complicated. We are a much more densely populated area, and other countries such as Poland and elsewhere are clearly attracting interest in this connection, but we will explore the matter. There are no barriers to doing so but nevertheless we recognise the limitations.

[Mr Iain Wright (Hartlepool) (Lab)]

14. What recent discussions he has had on investment in jobs and skills in the green economy.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

I have had many recent discussions with the Chancellor and others on jobs and skills in the green economy. Green growth has been considered across all strands of the growth review, and I welcome recent announcements in this area, including on the green deal, which could support at least 65,000 insulation and construction jobs by 2015.

[Mr Wright]

I previously asked the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker). the same question, but he made such a mess of it that I am pleased that the Secretary of State is having a go. Why in the past year has Britain slipped from third in the world to 13th for investment in green technology?

[Chris Huhne]

Clearly the hon. Gentleman understands that investment in these terms is often a lagging indicator, and the last Government were sadly remiss in coming forward with adequate incentives—for renewables investment, for example. I am delighted to say that we have brought forward the renewables review and provided the certainty that the industry required, and I am sure that our position will improve in future rankings.

[Joan Ruddock (Lewisham, Deptford) (Lab)]

But how does the Secretary of State square the changes to feed-in tariffs with promoting a green economy? In just one small scheme by the Peabody housing association in my constituency, the four jobs at the association are at risk, the eight apprenticeships are at risk and the 100 jobs at Breyer, which is installing the scheme, are also at risk. The Secretary of State is killing the solar industry and he must know it.

[Chris Huhne]

That is absolutely not the case. The right hon. Lady knows very well the importance of sustainability, because—if I may pay tribute to her—she has a long track record in this House of standing up for sustainability. However, sustainability does not apply merely to environmental matters; it applies also to budgets and the growth of industry, and we are putting the solar industry on a sustainable basis for growth.

[Craig Whittaker (Calder Valley) (Con)]

17. What recent discussions he has had with energy suppliers on the provision of credit for energy supply to new businesses; and what assessment he has made of the effect on growth of the level of deposit currently required.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

The level of security deposits is a matter of negotiation between individual businesses and energy suppliers. If the terms of an energy supply contract are felt to be unreasonable, businesses should seek to obtain a supply from an alternative provider or seek independent advice from Consumer Direct.

[Craig Whittaker]

I thank the Minister for that reply, but requests from energy companies for large deposits up front is an increasing issue for new businesses in Calder Valley, as well as those being taken over by new owners. Will he reassure Calder Valley business people that the heavy-armed tactics that energy companies are using will be looked at and pressure brought to bear?

[Charles Hendry]

My hon. Friend raises an important issue, and I am grateful to him for raising it with me previously in a meeting. I understand the concerns facing businesses in Calder Valley and elsewhere. There are issues that Ofgem should be looking into, and I am happy to write and draw its attention to them. Indeed, Ofgem has recently said that it is doing more to try to ensure that businesses get a fair deal in this regard.

[Barry Gardiner (Brent North) (Lab)]

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

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

Since my Department’s last question time, I have published the annual energy statement and the green deal consultation, announced a comprehensive review of feed-in tariffs, launched the renewable heat incentive and confirmed £200 million additional funding for the green deal. Today I am publishing the carbon plan and the Government’s response to both Dr Mike Weightman’s final report and the consultation on the long-term management of the UK’s plutonium stock. Next week the Minister of State, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), and I will attend the 17th conference of the parties to the UN framework convention on climate change in Durban.

[Barry Gardiner]

The Department says, “It’s the Treasury,” the Treasury says, “It’s the Office for National Statistics,” and the ONS says, “It’s not us.” So will the Secretary of State please publish the definitive advice on why the climate change levy fund for feed-in tariffs for solar has to be counted on the Government balance sheet? Is he aware that the European courts have recently ruled that a similar scheme in Germany need not do so?

[Chris Huhne]

One of the key issues is not whether something is on the Government’s balance sheet, but the effect on consumer bills. The hon. Gentleman cannot, sadly, wave away the question of whether this measure will add at least £26 to consumer bills in 2020, and possibly as much as £80. I will happily take this issue away and look into exactly which Department is meant to come forward, but I return to the point that what he needs to take into account is not whether something is on the balance sheet but what consumer costs are. [Interruption.] The right hon. Member for Don Valley (Caroline Flint) is muttering at me from a sedentary position, but she claimed recently that she cared about consumer costs, and I do not seem to see that now.

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

T2. Will the Minister join me in congratulating Bentley Motors in my constituency on becoming the first plant in the UK car industry to achieve the new global energy management standard, snappily entitled the ISO 50001? What are the Government doing to ensure that businesses such as Bentley can continue to meet their renewable energy targets by investing in alternative energy sources?

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

I was delighted to have a chance to visit Bentley recently with my hon. Friend to see the work it is doing. I pay tribute to Bentley and to Volkswagen, the parent company, for the investment that they have put in place. There are systems in the CRC—carbon reduction commitment—energy efficiency scheme that help to encourage companies to improve their energy efficiency. Companies can qualify for climate change agreements through which they receive discount on the climate change levy in return for meeting energy efficiency targets. Many measures are already in place, but I congratulate the company my hon. Friend mentions on what it has already achieved.

[John Mann (Bassetlaw) (Lab)]

T3. China is doing it and Germany is doing it—reducing their reliance on Russian gas and Arab oil—so when will this useless coalition start standing up for the long-term British national economic interest?

[Chris Huhne]

I am grateful to the hon. Gentleman for eloquently making a point that I have made on many occasions. He will be pleased to see that the carbon plan contains a substantial discussion on exactly that issue. We are at a key turning point. Do we move forward to a position in 2050 where we will be reliant on imported energy for £9 out of £10 of our energy needs, or do we move forward to a position where we can be much more secure, much more energy independent and, indeed, make substantial improvements to our efforts on climate change?

[Jane Ellison (Battersea) (Con)]

T4. I recently took part in a conference, organised by Wandsworth Friends of the Earth and a number of local churches, which was focused on climate change and energy saving. One of the speakers, an architect, illustrated the enormous savings she had been able to make in a Victorian-era house through careful use of insulation and other methods. Does the Secretary of State share the encouragement this gave me that the green deal has much to offer constituents living in older houses?

[Chris Huhne]

It certainly does. My hon. Friend makes a very sensible point. It is precisely that sort of home, built before the first world war, for which we are going for the first time to be able to offer a substantial holistic refit, precisely because of the support given to solid wall insulation.

[Jonathan Ashworth (Leicester South) (Lab)]

T5. The Secretary of State will be aware that in the last few days the National Grid Company has said it would welcome greater independent auditing of its contracting arrangements with STOR—short-term operating reserve—aggregators. Given that the National Grid admits that it buys 500 phantom MW a year, which it presumably passes on to consumers, will the Secretary of State now insist on independent auditing of this relationship with STOR aggregators so that consumers get a fairer deal?

[Charles Hendry]

The hon. Gentleman raises an important issue. We have had discussions with the National Grid Company about this matter and we are glad that it recognises the scale of the problem. We will work with the National Grid to try to make sure that it is addressed.

[Chris White (Warwick and Leamington) (Con)]

T6. In my constituency, there are plenty of small businesses, co-operatives and charities that wish to play their part in building a greener economy. Many are concerned about some of the changes to feed-in tariffs but are hopeful that other measures such as the green deal will enable them to grow. Will the Minister give an assurance that the Government will make it as easy as possible for small businesses to get involved in the delivery of the green deal?

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

I can give my hon. Friend an absolute assurance. In fact, he may like to join me on 12 December when I host a round table specifically for small and medium-sized enterprises to work out how they can become key delivery partners in the green deal, which will provide a huge opportunity for local partnerships in exactly the way my hon. Friend suggests.

[Mr Speaker]

I call Mr Denis MacShane. Not here.

[Paul Flynn (Newport West) (Lab)]

Can the Secretary of State deny the outrageous claims that his own personal consumption of energy is about to be similar to that of a small town? Can he confirm for the House that he believes in leading the energy green crusade by example rather than just by exhortation?

[Chris Huhne]

I certainly can. I shall have to ask whether it is Huddersfield or Stoke-on-Trent whose energy I am meant to be consuming. I must admit I am not sighted on that issue, but if the hon. Gentleman would like to write to me, I will be happy to give him a full reply. I can assure him that I am not a small town and that my personal energy consumption is nothing like one!

[John Pugh (Southport) (LD)]

May I return the Minister to the subject of shale gas? Given the figures that have been announced for gas in place in the Bowland field, is it not important for the Government to form an early view on what can be economically and safely extracted?

[Charles Hendry]

A great deal of work needs to be done to assess the role that shale gas can play. We are aware of the gas-in-place estimate, but it is very different from an estimate of the amount of gas that may be recoverable. Much more research is needed, but we are satisfied that if the extraction goes ahead, it can take place under the existing legislative requirements relating to safety and environmental protection.

[John Robertson (Glasgow North West) (Lab)]

T8. An early-day motion tabled today, signed by me and the hon. Members for St Ives (Andrew George), for South Suffolk (Mr Yeo) and for Brighton, Pavilion (Caroline Lucas), calls on Ofgem to raise the level of debt for which pre-payment meter customers can switch suppliers from £200 to £350. According to the House of Commons Library, that would help more than 200,000 people immediately. Can we rely on the Secretary of State’s support?

[Chris Huhne]

We are working on a number of issues to try to ensure that those with pre-payment meters are given the best possible deal—that they can switch easily, and can opt for credit rather than pre-payment meters when that will help them. And yes, the hon. Gentleman can be assured that we will continue to pursue that agenda as vigorously as possible.

[John Glen (Salisbury) (Con)]

When considering the green deal and energy efficiency measures generally, does the Minister take into account the potential damage caused to property by condensation, which outweighs some of the advantages of some of those measures? Will he meet me and one of my constituents to discuss that growing problem, which compromises so much of what the Government are trying to achieve?

[Gregory Barker]

I should be happy to do so. It is true that older properties without damp courses, many of which were built before the first world war, are more difficult to treat, and much more research and development is needed to ensure that we do not unintentionally cause more problems than we solve.

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

T9. I am glad to hear that the Secretary of State and the Minister are going to the climate change conference in Durban next week, but has the Secretary of State not left it too late? Is there not a danger that the conference will not produce the outcome that we want? What is the Secretary of State doing to ensure that we secure an international agreement, especially in the light of reports that have appeared over the past few days of a lack of progress in the negotiations?

[Chris Huhne]

The hon. Gentleman has a long-standing interest and expertise in this matter, and I am delighted to answer his question.

I could not have gone to Durban any earlier than Sunday, because that is the beginning of the ministerial segment, but the hon. Gentleman can be assured that I have been involved in talks with a number of other ministerial participants ahead of the conference, including Chinese, Colombian and South African Ministers. I believe that we have a real chance of making progress. Some of the gloomiest reporting tends to appear just before the talks begin in earnest, and I have not given up yet.

[Mr Speaker]

I am pleased to learn about the ministerial segment, of which I had not previously heard.

[Mr Peter Bone (Wellingborough) (Con)]

I know that our splendid Liberal Democrat Secretary of State believes passionately in localism. Can he explain why, having been rejected, the proposed Nun Wood wind farm development, which covers three parliamentary constituencies and is opposed by the three Members of Parliament and the three local authorities concerned, has suddenly been granted approval on appeal? That cannot be localism at work.

[Charles Hendry]

My hon. Friend has made an important point. In future, as a result of one of the changes that we are making to the planning system, it will not be possible to overrule such decisions on appeal simply because the developments involved meet a regional renewable energy target. That target has been removed, and we are giving much more authority and many more decision-making powers to local bodies. Applications involving more than 50 MW will be submitted to the Infrastructure Planning Commission and then to Ministers for approval, but we are determined to strike the right balance between local and national interests.

[Mr Speaker]

I call Ian Murray. He is not here, so I call Ian Mearns.

[Ian Mearns (Gateshead) (Lab)]

Will the Secretary of State agree to meet me and my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) to discuss the announcement of redundancies by Carillion Energy Services, which employs people in both our constituencies, and the fact that he is putting thousands of real people’s jobs at risk by slashing feed-in tariffs? The Minister accused my right hon. Friend the Member for Don Valley (Caroline Flint) of scaremongering earlier, but redundancy notices have been served to 4,500 employees.

[Gregory Barker]

The hon. Gentleman makes a legitimate point. Obviously, we are concerned about any job losses anywhere in the economy, and I will, of course, be very happy to meet him and his hon. Friend.

[Julian Smith (Skipton and Ripon) (Con)]

As Leeds, Yorkshire is the second largest financial centre in the UK and a leader in green energy investment, does the ministerial team agree that it is the ideal location for the Green investment bank?

[Chris Huhne]

The ministerial team is acutely aware that it must represent all parts of the United Kingdom and that many places have a substantial and impressive claim to be the home of the Green investment bank. We await with interest the advice of the advisory board.

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

I was very pleased to hear Ministers recognise the problems of people on prepayment arrangements for electricity. Will the Secretary of State say what specific action he will take to ensure that those who cannot switch to credit arrangements do not end up on higher tariffs than those who can afford to pay by direct debit?

[Chris Huhne]

We will continue to investigate this matter with the energy companies. Some people on prepayment meters used to pay higher tariffs than even the standard rate, but that is no longer the case and they now pay less. That is a substantial step forward, but it is not the end of the story. We will continue to work on this, as I am aware—as is the right hon. Member for Don Valley (Caroline Flint)—that it is a key area of vulnerability.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

The planned roll-out of smart meters across the UK will entail millions of homes being fitted with new devices. Will steps be taken to ensure that such devices are interoperable so that they do not act as a disincentive to consumers switching suppliers in order to get a better deal?

[Charles Hendry]

My hon. Friend makes a very important point. That is fundamental to our approach. Smart meters are designed to give consumers more control over the energy they use in their homes, and allowing people to switch and take advantage of different tariffs will be a fundamental part of their success.

[Several hon. Members]

rose—

[Mr Speaker]

I would have called Mr Sammy Wilson if he were standing, but I won’t because he isn’t. Instead, I call Mr Nigel Dodds.

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

I am very grateful for the advantage given to me by my colleague. What action has been taken to deal with Northern Ireland’s especially high dependence on home heating oil, given that a number of the current initiatives to tackle fuel poverty do not apply to Northern Ireland?

[Charles Hendry]

The right hon. Gentleman raises an issue that is of even greater importance in Northern Ireland than anywhere else in the country. I recently met Bord Gáis to talk about some of its plans for extending the gas grid in Northern Ireland. I welcome those investments, and in addition the Office of Fair Trading has taken measures to ensure that the market operates fairly and properly in the interests of consumers. The OFT has committed to continuing to investigate any examples of market abuse.

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

Does the Secretary of State share my pleasure in the fact that the Daylight Savings Bill will finally reach its Committee stage next week, and does he agree that it makes sense for us to align our lives more with daylight hours? That will support tourism, help business and reduce carbon emissions.

[Chris Huhne]

I am certainly interested to see the Bill’s progress, and I look forward to the full consultations with all interested parties, including the devolved Administrations, which might allow us to come to a satisfactory conclusion.

[Mr David Hanson (Delyn) (Lab)]

Will the Government, along with Ofgem, urgently look again at standing charges? In my constituency, Scottish Power has recently raised the daily standing charge from 15p to 31p, thus at a stroke adding £50 to my constituents’ bills.

[Charles Hendry]

I urge the right hon. Gentleman to consider the announcements Ofgem has made today, dramatically simplifying the range of tariffs. Ofgem states that there must be a standard tariff that every company must apply in a similar way, and also that the variable tariffs must meet certain conditions. This is all part of trying to ensure that charging is much more straightforward and clearer for consumers, so they can see whether they are getting a good deal and switch if necessary.

[Several hon. Members]

rose—

[Mr Speaker]

The only hon. Member standing who has not had a go is Chi Onwurah.

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

Thank you, Mr Speaker. As my hon. Friend the Member for Gateshead (Ian Mearns) said, many of our constituents face unemployment as a direct consequence of the inept and unfair way this Government have introduced the changes to the feed-in tariffs. What are the Government doing to give them security in their jobs and to give some certainty to the industry?

[Chris Huhne]

None of us wants to see anybody facing uncertainty about their employment prospects. The reality is that we must ensure a sustainable future for the solar industry that is based on a budget that will last rather than one that runs out so quickly that the industry comes to a grinding halt. The key thing for us is to ensure that we are on-track to deliver our goals for the low-carbon economy, including all the employment opportunities, and we will do that.

Business of the House

Thursday 1st December 2011 Commons Chamber

11:34

[Angela Smith (Penistone and Stocksbridge) (Lab)]

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

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

The business for the week commencing 5 December is as follows:

Monday 5 December—Motion relating to ministerial statements, followed by motion relating to UK extradition arrangements.

The subjects for these debates were nominated by the Backbench Business Committee.

Tuesday 6 December—General debate on the economy.

Wednesday 7 December—Motion relating to the appointment of the chairman of the National Audit Office, followed by motion relating to the membership of the Speaker’s Committee on the Independent Parliamentary Standards Authority, followed by motion to approve a European document relating to European sales law. In addition, the Chairman of Ways and Means has named the London Local Authorities Bill as opposed private business for consideration.

Thursday 8 December—Opposition day [un-allotted day] [half-day]. There will be a debate on a Scottish National party-Plaid Cymru motion, subject to be announced, followed by a money resolution relating to the Local Government Ombudsman (Amendment) Bill.

The provisional business for the week commencing 12 December will include:

Monday 12 December—General debate on immigration.

Tuesday 13 December—Motion to approve the appointment of the chairman of the Statistics Board, followed by motion to approve a statutory instrument relating to financial restrictions (Iran), followed by Opposition day [un-allotted day] [half-day]. There will be a debate on a Democratic Unionist party motion, subject to be announced.

Wednesday 14 December—Opposition day [un-allotted day]. There will be a debate on an Opposition motion, subject to be announced.

Thursday 15 December—Business to be nominated by the Backbench Business Committee.



I should also like to inform the House that the business in Westminster Hall for 8 December will be a debate on the EU Council.

[Angela Smith]

May I start by placing on the record an apology from my hon. Friend the shadow Leader of the House, who is attending an engagement in her constituency today and is therefore unable to be with us? In fact, she is welcoming the Queen officially to open a new development. I suggested that she might also want to use the opportunity to ask Her Majesty to look in her diary to check when her Gracious Speech is likely to take place, so we can finally clear the matter up—unless, of course, the Leader of the House would like to tell us first this morning?

Will the Leader of the House tell us when the Government will bring to the House business of any substance? For some time now, we have seen a distinct absence of Government-sponsored business and the schedule just announced, which takes us to almost the very end of the session, is no different. Perhaps the Government are responding to the dark days of winter and the even darker days of the economic crisis they have helped to create by going into hibernation. After just 18 months in government, they have run out of ideas while their economic policy has run into the sand. At a time when millions of families are desperately worried about what the future holds, the Government are showing how desperately out of touch they are by offering no new legislation and not a single debate of any substance.

Mr Speaker, on Monday you heard a point of order from the shadow Leader of the House that raised concerns about the Government’s deliberate and selective leaking of the autumn statement to the media and you responded by expressing your grave concern about those matters. Since then, of course, we have enjoyed the rather dubious pleasure of listening to the Chancellor deliver his statement on the Floor of the House and, indeed, it was an illuminating experience, if only in the sense that it revealed the very few details of the statement that had not already been leaked to the media. How important those small details are, however. We learned, for instance, that the Government are unable to meet the deficit reduction target that they set themselves only 18 months ago and that growth forecasts have been slashed to 0.9% this year, down from the 1.7% forecast in March, and 0.7% next year, down from 2.5%, the fourth downgrade since this Government came to power. We also learned that the Government’s squeeze on living standards will be not only severe but prolonged. It will be extended to six years or longer—a situation not seen in the UK since the last war.

Despite all the spin in advance of Tuesday, the very measures that the Chancellor chose to highlight in his leaks have unravelled under close scrutiny. Borrowing is set to spiral by £158 billion, despite promises to balance the deficit by 2015. Unemployment is expected to continue to rise for the next two years and £1.3 billion a year will be snatched from children and families after cuts to the child tax credit and the freezing of the working tax credit. Meanwhile, the bankers will contribute just £300 million. After 18 months, the verdict is in—plan A has failed colossally. So may we have a debate on the Chancellor’s autumn statement? It is time for the Government to adopt Labour’s five-point plan and put jobs and growth first.

When listening to the Chancellor’s statement, the House could have been forgiven for thinking that we were back in the 1980s—back to the future. Now we have the “back to the future jobs fund”. With more than 1 million young people unemployed, the Government’s U-turn on tackling youth unemployment is welcome, but the devil is always in the detail. May we have a debate on the measures that have been announced for tackling youth unemployment and how far they will go toward repairing the damage inflicted by the Government’s decision to abolish the future jobs fund in the first place? Such a debate would provide the Government with a good opportunity to apologise for their hastiness in cancelling a successful initiative.

The Government should also apologise for their reckless approach to economic management and, more crucially, they should stop blaming everyone and everything else when things do not go according to plan A. Last week, we heard that they were not to blame for their planned reduction in the feed-in tariff for solar-generated power and the damage that threatens to inflict on the solar industry. We were also told that the reduction was not a betrayal of their promise to be the greenest Government ever. This week, we have also heard that it is not their fault that there is no guarantee that the £1 billion for carbon capture projects will be forthcoming in the near future. However, we then learned in The Independent that the autumn statement would announce a review of legislation relating to the protection of precious wildlife habitats in the planning process because they are deemed to be a potential barrier to economic growth. May we have a debate about the role of green policy in promoting economic growth, given that the Conservative party said, “Vote blue, get green”, whereas the reality is that we are not getting very much at all? It will take more than a few huskies and a vanity photographer to restore the Prime Minister’s green credentials.

Not only do the Government refuse to respect the usual courtesies of the House but they refuse to respect the promises they made to the electorate or to take responsibility for their actions when things go wrong. They are out of touch and they are hiding from the electorate and from Members of the House.

[Sir George Young]

May I welcome the hon. Lady to her debut at business questions? Of course we understand the absence of the shadow Leader of the House, who is in her constituency.

On the date of Prorogation and the Queen’s Speech, I repeat what I have said in previous questions—we will announce those in due course. We have a legislative programme going through both Houses, and when that programme has made good progress we will be able to announce the dates of Prorogation and the Queen’s Speech.

The hon. Lady somewhat devalued the debates between now and Christmas that I have just announced, including an Opposition day, which she thinks is of no consequence at all. There is an important debate on the economy on Tuesday and some important debates will be chosen by the Backbench Business Committee. I am sure that she did not mean to insult the subjects chosen by that Committee by implying that they are not of any importance to the House.

On the ministerial code, I look forward to the debate on Monday; the Backbench Business Committee has brought forward a motion on the subject. I repeat that we are committed to what is in the ministerial code: important announcements should be made to Parliament in the first instance.

When we set the target that the hon. Lady mentioned, we gave ourselves an extra year’s headroom, and we have now used that up, so we are still on track to meet the original target. The strategy on which we have embarked, which she criticised, has been endorsed by the International Monetary Fund, the OECD, the Bank of England and all credible commentators. It is the Labour party alone that wants to embark on a reckless series of policies that would put at risk the low interest rates that the country now enjoys.

I hope that the hon. Lady welcomes the announcement made a few days ago on the youth contract. The future jobs fund was an expensive use of resources, and many of the jobs were short-term posts in the public sector; those in them ended up back on the dole. Our Work programme is a much more targeted and efficient alternative.

On the issues that the hon. Lady raised about climate change, we have just had Department of Energy and Climate Change questions, in which there was an opportunity to press the Secretary of State on our commitment to our environmental targets, which I am sure that he reasserted.

I think that I have answered all the questions that the hon. Lady put to me. Her last point was to ask whether we would stop blaming other people for the problems that confront us. The Office for Budget Responsibility could not have been clearer about the reasons for the difficulties that confront the country. The first is issues in the eurozone, the second is the increase in commodity prices, and the third is the deep recession that we inherited from the Labour party.

[Mr Peter Bone (Wellingborough) (Con)]

On Wednesday, more than a third of questions were Opposition Whips’ questions with exactly the same wording. That blocks Members who really want to ask questions from getting their question on the Order Paper. I know that that is not something that the Government do. Will the Leader of the House issue a statement next week condemning the practice?

[Sir George Young]

I think that I am right in saying that my hon. Friend raised that issue with you, Mr Speaker, at the end of the question session. As my hon. Friend implies, it is way beyond my remit to comment on the issue, but I would say that there is no evidence at all of him ever having asked a question given to him by our Whips.

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

To help the Leader of the House fill the time before the end of the Session, the Backbench Business Committee will conduct a review of its work. To do that, we are sending out a feedback form asking Back Benchers about their experiences and ideas for the future of the Committee, so that we can put forward proposals for its future in the new Session. What can he do to help the Committee promote the survey and encourage Back Benchers to fill it in and return it before Christmas?

[Sir George Young]

I applaud the work that the hon. Lady and the Backbench Business Committee do, and I welcome her public service announcement about the survey. I would indeed encourage colleagues to complete and return the survey; that will, in due course, inform the review of the Backbench Business Committee that the House has committed to undertake at the end of the Committee’s first year.

[Mark Pritchard (The Wrekin) (Con)]

May we have an urgent debate on Burma? I am sure that we all welcome the recent release of political prisoners, but there are still more than 1,000 being held without charge or trial. If the Burmese regime is serious about being taken into the international family and community, it needs to let those people go.

[Sir George Young]

I am grateful to my hon. Friend for that. Like him, I welcome the signs of relaxation of some of the extreme measures undertaken by that regime. I cannot promise a debate, but I understand that the Backbench Business Committee has indicated that, on the last day before the Christmas recess, we will have a series of Adjournment debates. He might like to apply for one of those.

[Mr Ben Bradshaw (Exeter) (Lab)]

That was one of the most extraordinary Government business statements that I have ever heard—extraordinary for its complete absence of Government business. Is the Leader of the House not the slightest little bit embarrassed to be scrabbling around, trying to find things for us to do, when the Government face the gravest crisis since the 1930s? If I may make one suggestion, how about a debate on the Government’s plan for regional pay rates in the public sector, which will be absolutely devastating in south-west England, where we have very low pay in the private sector and, already, the biggest gap in house-price affordability?

[Sir George Young]

On the first point, we are anxious to avoid the fiasco that took place in the last Parliament; towards the end of a Session, Bills would be rushed through the House with inadequate consideration. As a result of the way in which we have planned this Session, the House has had ample time to discuss legislation. The right hon. Gentleman will know that we have two Houses of Parliament. Bills have to go through both Houses, and they have to complete the process before the House can be prorogued.

The legislative programme means that Bills, having gone through the House of Commons, are now in another place, where they are being considered. I am surprised that the right hon. Gentleman is asking for yet more legislation when, quite often, I receive complaints from Opposition spokespeople that we legislate too much and do not give the House adequate time. As for regional pay rates, he will have heard what my right hon. Friend the Chancellor said in the autumn statement: he has asked a commission to look at this and report back.

[Bob Russell (Colchester) (LD)]

May we have a road safety debate, so that Transport Ministers can explain to the House and to the country why they are pursuing policies that will result in more crashes, injuries and deaths, which would be the inevitable consequence of raising the speed limit to 80 mph, using the hard shoulder for moving traffic, and reducing the frequency of vehicle checks? Last night, St John Ambulance held its inaugural national awards. May I suggest that such a debate would provide an opportunity to discuss its campaign to introduce first aid training in schools, which would help to save lives, not increase deaths?

[Sir George Young]

I understand where my hon. Friend is coming from. The Government are consulting on raising the maximum speed limit and reducing the speed limit elsewhere. A final decision has not been taken on that proposition, and I shall ensure that his views are fed into the consultative process.

[Sammy Wilson (East Antrim) (DUP)]

I appreciate the efforts that you made, Mr Speaker, to allow me to ask a question earlier. I hope that the leader of my party, my right hon. Friend the Member for Belfast North (Mr Dodds), duly noted the way in which I stood aside for him, and rewards me accordingly.

In a breathtaking display of bigotry this week, the Sinn Fein Lord Mayor of Belfast refused to give a Duke of Edinburgh award to a young Army cadet. That typifies the intransigence that we see from Sinn Fein: Sinn Fein Members ignore the electorate by refusing to take their seats in the House, yet they get hundreds of thousands of pounds supposedly to carry out parliamentary businesses. Will the Leader of the House arrange for a debate and a vote so that the issue of the abuse of public funds can be dealt with?

[Sir George Young]

I agree with what the hon. Gentleman has just said. He will know that that issue was raised yesterday in Northern Ireland questions, and he may have heard what my right hon. Friend the Secretary of State said. I understand the disappointment of the young person who did not receive the medal in the way in which they hoped, and I understand the very strong feelings that have been aroused. I remind him of what my right hon. Friend said when that point was made yesterday:

“The right hon. Gentleman makes an interesting point. The armed forces are a wonderful example of people from right across the community working together.”

He went on to draw on the example of the Royal Irish Regiment and the work that it has done in securing

“representatives from right across Northern Ireland and the Republic”.—[Official Report, 30 November 2011; Vol. 536, c. 925-926.]

I very much hope that we can move forward in a more consensual way than that particular gesture indicated.

[Nicky Morgan (Loughborough) (Con)]

I know from personal experience and from my postbag in my Loughborough constituency that the lack of access to affordable child care is critical in preventing women from going back to work. May we have a general debate on child care policies?

[Sir George Young]

I would welcome such a debate, and on Tuesday it may be in order to discuss that. We have announced that we will invest an additional £300 million in child care support under universal credit, on top of the £2 billion in the current system. At the moment, that provision is available only if someone works more than 16 hours, but we are going to remove the minimum hours rule. I very much hope that my hon. Friend welcomes that announcement.

[Keith Vaz (Leicester East) (Lab)]

May we have a debate next week about the harmful effects of violent video games? Last week, the university of Indiana published research that showed that regularly playing those games resulted in physical changes in the brain. At a time when parents are thinking of purchasing video games for Christmas, does the right hon. Gentleman not think that it is important to hold a debate on this matter? This is not about censorship—it is about protecting our children.

[Sir George Young]

I am grateful to the right hon. Gentleman, and I know that this is an issue that he has pursued with vigour for some time. I cannot promise a debate next week. Home Office questions, I think, will be held on 12 December, but in the meantime I will draw his concern to the attention of the Home Secretary.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

Following the welcome announcement of additional funds for the Highways Agency and the Department for Transport for road infrastructure projects, may we have a debate on the key projects that Members wish to raise? Personally, I do not always find the Highways Agency as responsive as it should be, and it would be good to put on the record some of the projects that we are passionate about in our constituencies.

[Sir George Young]

I am grateful to my hon. Friend, who reminds the House of the supply side measures that we have taken, bringing forward some important infrastructure projects to generate employment. He will know that a large number of schemes were announced by the Chancellor on Tuesday, including some infrastructure projects to support growth in the west midlands. I am sorry if that did not go quite as far as my hon. Friend would wish, but on Tuesday, in the debate on the economy, I am sure that he will have an opportunity to make his plea, which I hope will be heard by Ministers.

[Ann Clwyd (Cynon Valley) (Lab)]

The Leader of the House may not have seen the Amnesty report on Saudi Arabia, which was published this morning. Amnesty says that

“hundreds of people have been arrested for demonstrating, while the government has drafted an anti-terror law that would effectively criminalize dissent as a ‘terrorist crime’ and further strip away rights from those accused of such offences.”

The hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) will lead a delegation from Parliament to Saudi Arabia at the weekend. Does the Leader of the House agree—I have already spoken to the hon. Gentleman—that anyone who represents the House in Saudi Arabia should raise those issues, and it is important that they are raised face-to-face with our opposite numbers?

[Sir George Young]

I feel as if I am a postbox in the dialogue between the right hon. Lady and my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski). She will know that we had a debate on Monday—indeed, I think she took part—in which some of those issues were raised, although not the recent report by Amnesty International. I am sure that my hon. Friend heard her plea, has taken it on board, and will report back when he returns and let her know how he got on.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

May we have a debate about rail in the north? We have a huge requirement for rail investment in the north, especially Yorkshire, and we have had some encouraging news recently. It would be timely to hold a debate after the announcement of the TransPennine Express electrification in the autumn statement on Tuesday.

[Sir George Young]

I would welcome such a debate, and it may be relevant on Tuesday. I see from the Chancellor’s announcement on Tuesday that there will be two new park-and-ride sites in York; and Leeds rail growth will be assisted by two new railway stations in Kirkstall Forge and Apperley Bridge, and a number of other schemes in the Yorkshire region. I very much hope that my hon. Friend accepts that this is a priority, and that we are making progress with infrastructure in the area that he represents.

[David Wright (Telford) (Lab)]

May we have a debate specifically on the national infrastructure plan 2011? As a fellow Shropshire MP, I support the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) in calling for a debate about roads and road investment. Just after the last election, we saw the removal of the M54-M6 toll road link from capital infrastructure projects. I should like to debate that in the House, and I am sure that other Shropshire MPs would, too.

[Sir George Young]

This reminds me of when I was Secretary of State for Transport many years ago, and heard all these pleas for extra investment, which I take seriously. I remind the hon. Gentleman that when his party came to power it imposed a moratorium on many of the schemes with which I was planning to go ahead. None the less, he makes a serious point about that particular road, and I shall draw his concern to the attention of my right hon. Friend the Secretary of State for Transport.

[Tony Baldry (Banbury) (Con)]

May we have a debate next week on today’s written ministerial statement on the retention of the mobility component in residential care? It would give the House an opportunity both to thank the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller), for listening to hon. Members on both sides of the House and to organisations such as Leonard Cheshire Disability, and to welcome the fact that, today, the Government have announced that the mobility component of disability living allowance will not be removed from people living in residential care homes, as an amendment will be tabled to the Welfare Reform Bill on Report in the Lords. That is welcome news, and the House ought to note that it is an extremely good example of Ministers taking the care, time and trouble to listen and respond accordingly.

[Sir George Young]

I am grateful to my hon. Friend. In business questions about 12 months ago, that subject was frequently raised by Members on both sides of the House, who expressed concern about our proposals under the personal independence payment to remove the mobility component of DLA for people in residential accommodation. As he knows, we asked Lord Low to review our proposals. He reported a few weeks ago, and today, the Under-Secretary of State for Work and Pensions has announced that we will not go ahead with our original proposals, as my hon. Friend said. We will table an appropriate amendment to the Welfare Reform Bill in another place to retain that entitlement, which enables people to have the mobility that they very much welcome if they live in residential or nursing homes.

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

You fortuitously called me, Mr Speaker, just in time to revive an old English custom: a pinch and a punch for the first day of the month. Of course, I would never pinch or punch the Leader of the House, but I might be tempted to do so with the Government unless during the slight time announced today we have a serious debate on the fact that university applications are already 15% down, which is a serious challenge to our university system. The punch is that we should do something more ambitious on youth unemployment than what came out of the autumn statement.

[Sir George Young]

I do not think that the position on university applications for next year is quite as grim as the hon. Gentleman outlines. There was a fall of 0.9% for places that had to be applied for by 15 October. The 15% drop to which he refers is in applications for which there is still time to apply. We have not reached the final date, so it is too soon to say that there will be a fall of 15%. The earlier figure to which I referred is much more encouraging. If one looks at the demography, one will see that fewer people in that age group are coming forward for higher education.

[Claire Perry (Devizes) (Con)]

May we have a debate on women and the prison system? Mahatma Gandhi said that a society can be judged by how it treats its first, its last and its lost. It is my strong belief that women in the prison system and the 17,000 children a year who are separated from their mothers as a result of incarceration are among the lost. May we have a debate in Government time to review that important problem?

[Sir George Young]

I welcome my hon. Friend’s interest in that important subject. I very much hope that our new approach to the penal system of payment by results will also benefit women in prison, that new contractors with an interest in finding long-term, secure employment and accommodation for those leaving prison will come forward, and that we will be able to improve our record so far and help those women rebuild their lives after leaving prison.

[Mr Dave Watts (St Helens North) (Lab)]

May we have a debate on why the Government have decided to increase the funding for transport in London while slashing it across the rest of the country? Are they trying to buy some votes for Boris?

[Sir George Young]

Certainly not. Our policy on rail fares applies throughout the country. We have changed the formula from RPI plus 3 to RPI plus 1, which will benefit travellers in whichever part of the country they travel. As far as the capital programme is concerned, if the hon. Gentleman looks at the announcements my right hon. Friend the Chancellor made on Tuesday, he will see that every region in the country will benefit from infrastructure projects being brought forward.

[Gavin Williamson (South Staffordshire) (Con)]

Just the other week I visited the Cheslyn Hay Boys Brigade, an organisation that has been running for 40 years as a result of the dedication and commitment of its volunteers. May we have a debate on how we can encourage more Boys Brigades to play an active role in supporting young people’s involvement in civic society?

[Sir George Young]

I welcome the work of the Boys Brigade in my hon. Friend’s constituency and agree that it has a role to play in achieving the objective he has just outlined. I cannot promise a debate in the near future, although he may be able with some ingenuity to squeeze the subject in on Tuesday, and there will be the normal pre-Christmas Adjournment debate on the Tuesday we rise, during which he may have an opportunity to develop his case with yet greater eloquence.

[Paul Flynn (Newport West) (Lab)]

May we discuss whether giving to the few, rather than the many, and describing the principal sacrifice by more than 1 million people yesterday as “a damp squib” is likely to create a big society or a divided society?

[Sir George Young]

Yesterday’s strike had less of an impact than some people had feared. Fewer job centres closed than in June and the number of schools that closed was lower than had been feared. While I am on my feet, I would like to pay tribute to those who work for the House for ensuring that it could operate yesterday and that in the Chamber we could have important statements and a debate on living standards.

If the hon. Gentleman looks at page 4 of the distribution analysis, he will see that the distribution is progressive and that those in the top 10% are paying 10 times more than those in the bottom 10%.

[Karen Bradley (Staffordshire Moorlands) (Con)]

I know from my own experience and that of my constituents just how important health visitors are to new mums in the vital first few weeks of a baby’s life, so will the Leader of the House find time for a debate on health visitors and other support given to new mums to help families through that difficult and daunting time?

[Sir George Young]

I am grateful to my hon. Friend. She will know that one of the commitments we made was to increase the number of health visitors, which we are doing by redeploying resources. With regard to social mobility and giving people a good start in life, health visitors and what we are doing with free nursery care and the pupil premium are all part of a process of enabling people from disadvantaged families to break through and achieve their full potential.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Further to the question asked by my hon. Friend the Member for Huddersfield (Mr Sheerman), may we have a debate on university applications? Today, applications are down 15% on average, compared with this time last year, but in Middlesbrough they are down 40%. Does the Leader of the House agree with the chair of South Tees Conservative Future when he said that he “can see the benefits of lower applications”?

[Sir George Young]

I am in favour of more applications but, as I said to the hon. Member for Huddersfield, it is too soon to draw the conclusion that I think the hon. Gentleman is drawing—[Interruption.] It makes sense to wait until applications close before drawing conclusions on whether they are up or down on last year. As I said, where applications have closed the reduction is 0.9%, so I think that he is being unduly alarmist.

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

May we have a debate on how the Government are working with local authorities to protect some of our most vulnerable children, especially in areas such as Sandwell, where the Labour-run council was recently judged by Ofsted to be failing in its provision to some of the most vulnerable children in the community?

[Sir George Young]

I very much hope that the local authority will respond to the Ofsted report and seek to improve its standards. I will draw my hon. Friend’s concern to the attention of my right hon. Friend the Secretary of State for Education.

[Mr Denis MacShane (Rotherham) (Lab)]

May we have a debate on anti-Semitism, because yesterday an hon. Member of this House said in front of a House Committee that Mr Matthew Gould, our distinguished ambassador to Israel, should not serve as such because he is Jewish? In such a debate we could make it absolutely clear that we do not have a religious bar in our diplomatic service and that we do not say that Jews cannot serve in Israel or that Catholics cannot serve in Catholic countries or the Holy See, so that we may eradicate anti-Semitism once and for all from public discourse in our country?

[Sir George Young]

I agree with the right hon. Gentleman and applaud the work that he did in the last Parliament on the subject. The Foreign and Commonwealth Office is an equal opportunity employer. It is inconceivable that it would apply any sort of prejudice of the type to which he refers in deciding who should be our ambassador in any part of the world.

[Gavin Barwell (Croydon Central) (Con)]

Earlier this week one of my constituents was arrested after a video of her ranting at fellow passengers on a Croydon tram and using the most foul racist language spread on social media. It shows that the evil of racism is still with us, but it also shows, on a positive note, the power of social media, as it allowed her to be caught and showed that the vast majority of Croydon residents do not share her views. May we have a debate on how the evil of racism in our society can finally be eradicated?

[Sir George Young]

I agree with my hon. Friend. I should not comment on the particular incident, as I understand that charges have been made. It would be quite wrong if people could not travel on public transport because they were worried about being subjected to the sort of abuse to which he refers. I believe that the penalties we have to deal with hate crimes are serious and hope that they will be used if the offences justify them.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Government have stated their desire to rebalance the economy and make up for the thousands of public sector jobs that are being lost in regions such as mine, yet today we received the dreadful news that 4,500 jobs at Carillion—a big employer based in Newcastle and Gateshead—have been put at risk as a direct result of the Government’s changes to the feed-in tariffs for photovoltaic panels. May we have an urgent debate on how their policies are impacting on private sector jobs in regions such as the north-east?

[Sir George Young]

I hope that the hon. Lady is able to intervene in the debate on Tuesday. I think I am right in saying that, right at the end of questions to the Secretary of State for Energy and Climate Change, the specific case of Carillion was raised and my right hon. Friend dealt with it. On the overall issue of unemployment, the OBR forecast shows that employment will be higher and unemployment lower if we compare the end of this Parliament with the start.

[Glyn Davies (Montgomeryshire) (Con)]

In Tuesday’s autumn statement, we heard good news on regional infrastructure development, and I was encouraged in particular to see the Chancellor refer to engagement

“with the Welsh Government on improvements to the M4.”

Will my right hon. Friend the Leader of the House ensure that there are opportunities for hon. Members to discuss investment in cross-border issues and projects that impact on Montgomeryshire and other cross-border constituencies?

[Sir George Young]

Those are important issues, and my hon. Friend reminds the House that there is indeed a commitment to

“engage with the Welsh Government on improvements to the M4 in south east Wales.”

The Welsh Government will also benefit from the Barnett formula, receiving enhanced funding in line with that which has been allocated to England, and there is also an urban broadband fund, which will create 10 super-connected cities, including Cardiff. There was a lot in Tuesday’s announcement to help my hon. Friend’s constituency and others in Wales.

[Jonathan Ashworth (Leicester South) (Lab)]

Given that the Leader of the House seems, if I may say so, to be struggling somewhat to arrange items of business, may I suggest that he schedules a debate on the important work of faith organisations in what I presume he would describe as the big society? Will he also join me in congratulating Leicester’s council of faiths, now in its 25th year, on its successful inter-faith week?

[Sir George Young]

I applaud what Leicester is doing on that particular subject, but let me explain to the hon. Gentleman what happens. The Government schedule time for Government legislation, and most of the rest of the time is allocated to the Backbench Business Committee, so if he wants a debate on faith organisations, which I would heartily support, he needs either to present himself on a Tuesday at 1 o’clock to that Committee and put in such a bid, or to apply to you, Mr Speaker, for an Adjournment debate. That particular subject would be warmly welcomed on both sides of the House.

[Harriett Baldwin (West Worcestershire) (Con)]

On Tuesday in the autumn statement, the Chancellor made the argument that investing in early years education and schools will do more to lift people out of poverty than just increasing benefits. Figures that I have obtained from the Library show that of all single-parent families on child tax credits with five or more children, 23,000 such households are out of work and 4,000 are in work, so may we have a debate about whether the best way to help those households aspire to greater prosperity is through helping parents into work with increased free child care, rather than increasing the size of their benefit cheque?

[Sir George Young]

My hon. Friend is absolutely right: the way to help such people is to help them into work and to remove the barriers that prevent them from going into work, one of which is child care. She will know that we have expanded free nursery education, first, for all three to four-year-olds and, then, to 20% of two-year-old children from disadvantaged families—a figure that was increased on Tuesday to 40%. I very much hope that that will help achieve the social mobility to which my hon. Friend refers.

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

May we have a statement from the Government on the protections given to whistleblowers? This is a particularly emotive subject in my constituency, as a result of the legacy of the Harold Shipman murders and the crucial role that whistleblowing played in bringing him to justice. A ruling in the Court of Appeal last month, however, to the effect that employers cannot be held responsible for incriminatory acts by the fellow employees of another of my constituents, has some people worried that the protections that we give to whistleblowers are not vigorous enough. Will the Leader of the House raise that issue with his colleagues in the Ministry of Justice and, perhaps, arrange a meeting between me and one of those Ministers to discuss it further?

[Sir George Young]

The hon. Gentleman makes a serious point, and there should not be the deterrent, which he implies, preventing people from coming forward and reporting malpractice, injustice or, even, criminal activities. Of course I will raise with the Lord Chancellor the concern that the hon. Gentleman has expressed following that decision of the courts, and I will see whether the Government need to take any remedial action.

[Brandon Lewis (Great Yarmouth) (Con)]

In Norfolk and East Anglia, a huge number of engineering, energy and high-tech businesses are ready to expand and grow, but for many years they have complained about the previous Government’s neglect of our infrastructure and, particularly, our road infrastructure. I therefore welcome this week’s announcement on the A14, building on the A11 and the Government’s broadband investment in East Anglia. May we have a debate on infrastructure and the economic opportunities resulting from it, particularly so that we can highlight in Norfolk the further opportunities that will emerge if we eventually dual the A47?

[Sir George Young]

My hon. Friend makes an important bid for yet further investment in infrastructure in his constituency, and I note that he welcomed Tuesday’s announcement, which will improve the A14, A11 and parts of the M1—junctions 10 to 13. I will pass on to the Secretary of State for Transport the fact that my hon. Friend’s appetite has now been whetted, and that he wants to see yet further investment in his constituency.

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

May we have a debate on localism? The Nun Wood wind farm application spans three local authorities, each of which looked at it independently and, in line with their local plans, turned it down, only for a distant planning inspector to decide that he knew better than the local plans, thereby allowing the application. Does the Leader of the House understand why my constituents, my hon. Friend the Member for Wellingborough (Mr Bone) and the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for North East Bedfordshire (Alistair Burt), feel so strongly about this issue, which is a real smack in the face for localism?

[Sir George Young]

I understand my hon. Friend’s disappointment at the decision of the planning inspector, and I know from my time as a planning Minister that there are now fewer opportunities to appeal. I very much hope that, when the Localism Bill hits the statute book and we introduce a new planning regime, there will be a system that is more responsive to local needs than the system we operate at the moment.

[Mr Philip Hollobone (Kettering) (Con)]

Given my right hon. Friend’s personal commitment to this Chamber being at the centre of the political life of the nation, will he support the motion, put forward by the Backbench Business Committee on Monday, that ministerial statements on major policy announcements be made first to this Chamber of the House of Commons?

[Sir George Young]

I reaffirm my commitment to that part of my hon. Friend’s motion. If he has looked at the Government’s response to the Procedure Committee’s report, he will see that I have severe reservations about the second part of his motion, which includes a rather punitive regime for breaching that aspect of the ministerial code. I will in due course on Monday, if I catch your eye, Mr Speaker, explain why the Government have doubts about the wisdom of the second half of the motion.

[George Hollingbery (Meon Valley) (Con)]

The Leader of the House will know about the extensive work being undertaken at the Department for Communities and Local Government on community budgets, including 16 pilot programmes, on families with complex needs in particular and on cross-departmental spending to solve those problems. Given the wide range of measures being taken by the Government, particularly with reference to today’s announcement by the disabilities Minister, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller), may we please have a debate about the scope of that work and its potential consequences?

[Sir George Young]

I welcome such a debate on that initiative and on other schemes such as the early intervention grant, which has done a lot of useful work, trying in particular to bring together funding streams that were previously disparate, and providing a more comprehensive policy to help such clients. I cannot promise such a debate, but in the pre-Christmas Adjournment debate my hon. Friend could initiate a discussion on that important subject.

[Bob Blackman (Harrow East) (Con)]

Thirteen days ago four Harrow police officers were stabbed while trying to apprehend a suspect in neighbouring Kingsbury. I am pleased that their courage has been commended by the Home Secretary and by the Mayor of London, and that my right hon. Friend the Prime Minister is writing to the four police officers, who I am pleased to say are recovering after having suffered those injuries. They are also about to receive “Get well” cards from local children, who are pleased about the work of the police in helping them to celebrate their religion and in going to school, but may we have an urgent debate or a statement on the measures that we can take to help the police and, in particular, given the protective clothing that is issued to them, to combat knife crime?

[Sir George Young]

Many of us will have seen that particular incident on our television screens. The specific issue of protective clothing is a matter for the police service, and I will draw my hon. Friend’s concern to the attention of the appropriate authorities, but more broadly he has reminded the whole House of the professionalism and bravery of our policemen and women. They get up in the morning and do not know what risks they will confront during the day, but they discharge their responsibilities with a commitment for which we are all very grateful.

[Jeremy Lefroy (Stafford) (Con)]

May we have a debate on ways to tackle the shortage of doctors who are specialised in accident and emergency care—a major factor in the temporarily reduced hours of the A and E department at my local hospital in Stafford? I place on the record my thanks to the Minister of State, Department of Health, my right hon. Friend the Member for Chelmsford (Mr Burns), for all his great help in the matter, but it is a long-term problem that needs to be discussed and tackled.

[Sir George Young]

My hon. Friend draws the attention of the House to a serious issue, but the problem in that case is the shortage not of resources, which are there, but of applicants to take up the posts. Discussions are indeed continuing between the Department of Health, the strategic health authority and the local trusts to see whether those barriers can be overcome, but I am grateful to my hon. Friend for his thanks to my right hon. Friend. I will pass on my hon. Friend’s concern and see whether we can accelerate the process.

[Mr Speaker]

I call Mr Guy Opperman.

[Hon. Members]

Hear, hear!

[Guy Opperman (Hexham) (Con)]

Thank you, Mr Speaker; I shall try to be worth the wait.

In Northumberland, hundreds of women have outstanding equal pay claims that some Opposition Members and I are trying to persuade the local authority to resolve. Please may we have a debate in the House on the issue of equal pay for women, past and future, and what the Government are trying to do about it?

[Sir George Young]

The Government are keen to address the injustice of unequal pay between men and women. In 2009, there was a gap of some 16.4% between men’s and women’s pay. We are working with employers to encourage voluntary non-legislative action to improve transparency on pay and on equality more generally.

Point of Order

Thursday 1st December 2011 Commons Chamber

12:20

[Paul Flynn (Newport West) (Lab)]

On a point of order, Mr Speaker. May I take this first opportunity to express my regret that in my excitement at being called early in topical questions, I inadvertently referred to the Secretary of State instead of the Minister of State, thereby denying the Minister of State the opportunity to explain how his green crusade is not only one of exhortation but of example? I express my regret to both of them.

[Mr Speaker]

I am extremely grateful to the hon. Gentleman for that very courteous clarification.

Backbench Business

Thursday 1st December 2011 Commons Chamber

[Un-Allotted Day]

[Mr Speaker]

We have two debates on, respectively, BBC cuts and debt management services. It may be for the convenience of the House if I explain that the Backbench Business Committee anticipated and recommended that there should be a broadly equal division of time between the two. Starting as we are at just after 12.20 pm, I would expect the first debate to conclude at approximately 3.15 pm.

BBC (Proposed Cuts)

Thursday 1st December 2011 Commons Chamber

12:21

[Austin Mitchell (Great Grimsby) (Lab)]

I beg to move,

That this House calls upon the BBC to reconsider the scale and timing of its proposed cuts so as better to safeguard BBC local radio, regional television news and programmes, the morale and enthusiasm of its staff, and the quality of BBC programmes generally, all of which have made the BBC the most respected public service broadcaster in the world.

I am very grateful to the Backbench Business Committee for providing this wonderful opportunity for Members to say what they think of the cuts proposed by the BBC in Delivering Quality First. It is important to get those views on the record and for us all to say what we think the BBC should do given its current financial stringencies. I am an admirer of the BBC. It is the best news and media organisation in the world, and an institution of which we in Britain can be proud. It is better to say that outside the BBC and admiring it than it is inside and working for it, as I once did, when one has to tackle the layers of bureaucracy above.

This admirable institution is now threatened by cuts. The licence fee settlement is the worst in the BBC’s history, with the licence fee frozen at £145 for six years. On top of that, the BBC is required, from 2014, to finance the World Service and BBC Monitoring, both of which used to be a Foreign Office responsibility and should, in my view, continue to be so. The BBC World Service does a better job for Britain in the world than the Foreign Office and all its pinstriped mandarins put together, and it should be financed by the Foreign Office. In addition, the BBC loses £150 million a year to finance superfast broadband, for which, again, the Government should be responsible, and £25 million a year to finance the Secretary of State’s dream of local TV stations. All this amounts to savings of 16% in the annual budget, to which the BBC has added another 4%—in other words, £670 million a year in cuts. That is on top of the efficiency savings of 3%, or £487 million, a year that were required in 2007 for the period 2008-13, and are, in fact, being exceeded. The BBC is suffering a double dose of anorexia, and that threatens quality, jobs, innovation and creativity, and hence a groundhog diet of endless repeats on television.

This is a squeeze too far. I have to admit that the BBC has certain faults, which I shall list. It has not helped itself with its erratic financial decisions. For instance, there was the hokey cokey about Broadcasting house. First, it was going to move, then it moved out to White City, and now it is going to move back and sell the old television centre at White City.

[Mark Pritchard (The Wrekin) (Con)]

I congratulate the hon. Gentleman, who is chairman of the all-party group on the media, on his consistency on this issue. I do not accept that the BBC has an anorexia problem. It is an obese organisation and, like the rest of the public sector, it needs to go on a diet. I accept that the BBC does a huge amount of good and is probably the best news organisation in the world. Does he accept that the decision on where the cuts fall should not discriminate against regional and local radio? The BBC is in danger of being very London-centric, retaining managers in London while laying off hard-working journalists in the regions.

[Austin Mitchell]

I accept that absolutely. The BBC should concentrate on efficiency savings, which are still possible in what is, as the hon. Gentleman says, a large organisation. That, and not the cuts in regional services and local radio stations that are forecast in Delivering Quality First, should be the basis of any cuts.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

rose—

[Austin Mitchell]

I would rather not accept a lot of interventions because many Members want to speak, and I think it is better that they make their points in the debate rather than interrupt my diatribe.

The BBC bureaucracy has always been more adept and skilful at interfering with and managing programmes than at managing the finances of the BBC. As a result, it is unable to cost its services and say where the efficiency savings should come. That is a problem for the BBC, but it is being cured with the help of the National Audit Office, which says in its report on the BBC’s efficiency programme—we discussed it in the Public Accounts Committee—that the BBC is making splendid progress. I want that progress to continue. I want the BBC to be able to say, “If we cut to this extent, the overall consequences will be X and the consequences for delivery and quality of services will be Y.”

We need that clarity so that the BBC can take a firm position on what cuts it can accept instead of its current approach, which is the culture that characterises Delivering Quality First of can-do submission to whatever the Government propose. The Secretary of State shakes his head. Last October, though, the BBC apparently quaked before the terrifying spectre of the Secretary of State; we have read about what must have been a terrifying weekend of pressure that he brought to bear. It should be immortalised in some kind of drama—“Three Days in October”—showing the terrifying effect that he had on the BBC, which caved in totally. The Secretary of State put the frighteners on, Sir Michael Lyons resigned, and the BBC set about a “Yes sir, no sir, three bags full, sir” programme of cuts. Indeed, the director-general, Mark Thompson, told staff in Belfast—this is very unlike him—

“If you’re really that unhappy, if you think that you can’t do your best work here then leave—no-one is forcing you to stay.”

That situation, described as consultation of the BBC staff, was forced on the BBC by the Secretary of State with his bullying tactics last October. It is a skill that amazes me. Now he sits there smiling, all friendly, but that is not how the BBC saw him last October.

I am not saying, in all this, that the BBC is its own worst enemy, because the Murdochs are still around. Indeed, the Murdochs are selling programmes; for instance, Elisabeth Murdoch sold “MasterChef” to the BBC. However, I am saying, loud and clear, that these cuts are going to be deeply damaging to the quality of the BBC service. One cannot force a 20% spending reduction over five years, with a loss of 2,000 jobs, 1,000 of which are in the vital news services, without it being a blow to creativity and to all the creative industries that supply and support the BBC, and without doing deep damage. That is what will happen over the coming years if the BBC, as it is being forced to do, follows the prescriptions laid out by James Murdoch in the MacTaggart lecture in Edinburgh a few years ago. The cuts programme has an amazing resemblance to what he said he wanted.

Let us look at the consequences. This debate provides an opportunity for all Members to give their views on the consequences and to say what they think should be done. I would like to first consider local radio. There is a strong feeling among Members that the cuts to local radio go too far and will be too damaging. That point emerged in the Westminster Hall debate.

[Daniel Kawczynski]

On the issue of local radio stations, Radio Shropshire is not even allowed to procure its own window cleaners. That is done centrally from London. The BBC in London sends window cleaners from Lancashire to clean the windows in Shropshire. That is highly unacceptable and must be changed. There must be better procurement and value for money at the BBC.

[Austin Mitchell]

I hope that the cleaners from Lancashire do not arrive with little ukuleles in their hands. That would be an example of excessive expenditure at the BBC. However, such examples do not make the case for the cuts, because the cuts will be much more deep-seated. I accept that there are anomalies and problems.

The cuts will press heavily on local radio, which we all respect. It provides our roots in society and in politics. I am particularly proud of Radio Humberside. It does not do enough on politics, but that is probably because it would lose its audience if it did more on politics. It would gain me, but it would lose its audience. It is a particularly good station. It will lose 8.5 members of staff as a result of these decisions.

In BBC local radio overall, the output will be cut by 22%, the budgets will be cut by 19%—far in excess of all the other cuts—and 280 jobs will be lost, which is an average of seven per station. That will be a crippling blow. Such harsh cuts press particularly hard on small organisations that have high fixed costs.

[Hugh Bayley (York Central) (Lab)]

I am grateful to my hon. Friend, who is making a magnificent speech. The talk about window cleaners trivialises the problem. BBC Radio York, which got the title of best original journalism of the year this year, will lose eight journalists as a result of the cuts. Surely the licence fee should pay for the sort of broadcast services that commercial stations will not provide. Local radio is at the core of that.

[Austin Mitchell]

I agree with my hon. Friend. I am sure that that station’s ratings will go up as his appearances multiply. It is true that local radio provides a better service for older people and that it is more listened to by older people. That is why I am dealing with this issue—I am one of the oldest Members around. It is true that the cuts will be deeply damaging to the roots of the BBC and to us in particular.

The same is true of the quality of the local press. The number of reporters in the local press is declining steadily and rapidly across the country. It is also tragic that regional television, which we rely on for the coverage of regional politics, faces cuts of 16% and 100 jobs lost. Regional news on television has already suffered from the cuts at ITV. Competition will be further damaged by these cuts.

BBC Online, which the Murdochs have complained about vociferously because it competes with their paid services, will be cut by 25%. That is real vandalism, because it is a quality service. I rely on it heavily for news and information.

The Asian Network, which is the only non-sectarian, non-political service for news, music and discussion for all Asian communities, will lose 47 people, have a budget cut of 46% and face the closure of its Leicester newsroom. That will be a bitter blow to ethnic communities and to the ethnic mix among BBC staff.

Those are the major objections that I have to the cuts. I have no doubt that other Members will put forward other objections. The BBC must consider the objections that come from us and from the rest of society. There may be other cuts to come. That is not clear because negotiations are still going on over pension conditions.

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

Before my hon. Friend leaves the issue of regional television, does he think that it is consistent with the BBC charter for the BBC to locate most of its production at Salford, Bristol and Cardiff, and to leave areas such as Birmingham, the west midlands and his part of the world out of the loop?

[Austin Mitchell]

No, I do not. It is true that services are being unacceptably concentrated in those places. We want better services and better staffing in Yorkshire and the Humber, which—dare I say it—are a nation in themselves and deserve to be treated as a nation. The cuts are a serious setback to recruitment and to the transfer of jobs out of London, which cannot be satisfied just by the creation of the monster of a centre in Manchester.

The newsrooms of the BBC and the BBC World Service are going to be merged. There are overlaps there, which will lead to further redundancies. We are told that Radio 4 has been protected from cuts, but its producers have been required to reapply for their jobs.

[Bill Esterson (Sefton Central) (Lab)]

I am pleased that my hon. Friend has raised the issue of Radio 4, which, as he said, is being protected. On Merseyside, more than twice the number of people who listen to Radio 4 listen to BBC Radio Merseyside, yet Radio Merseyside faces a cut of 20% and will lose a third of its staff. Overwhelmingly, the people who listen to it are elderly, disabled or poor. Those people do not have the option of finding other means of entertainment. Does he agree that it would make sense to protect local radio rather than Radio 4?

[Austin Mitchell]

I agree absolutely. Radio 4 tends to be radio south-east, or indeed radio Westminster at times, given its concentration on politics. Listeners in the regions deserve the same degree of protection.

I was arguing that Radio 4, which is supposed to be protected, is not being protected because its producers are all being asked to reapply for their jobs. Audio & Music, which produces programmes such as “Desert Island Discs”, for which my invitation to appear is still to arrive—I hope that it arrives before rigor mortis sets in totally—has been cut by 18%, with a loss of 140 jobs.

To conclude, my message to the BBC is simple and threefold. To the BBC Trust, I say please go easier and slower with the cuts, particularly those to local services. To the BBC management, I say reconsider the proposals in Delivering Quality First carefully, because management in the regions are in revolt. We have had discussions with the regional management in Yorkshire and Humberside. Although they are preparing the cuts, they clearly want MPs to come forward against those cuts. They are inciting us against their own management.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I hope that I will not pre-empt my hon. Friend’s third message to the BBC. The concern has been raised with me that the BBC does not seem to be listening to the evidence of the number of listeners and viewers at a local level. It also proposes to create super-regions for television programming, in particular for “Inside Out”, where it believes that audiences will tolerate it. However, there is no evidence of that.

[Austin Mitchell]

I agree absolutely. The people listen to the BBC, but is the BBC listening to the people in this instance? I ask BBC management, who have proposed a diet of sacrifices and cuts for everybody else in the BBC, what they can bring to the party. Salaries have become inflated in the BBC—there are 1,065 people earning more than £70,000 a year. Good heavens, that is as much as MPs get—what a scandal! We are grossly overpaid, of course, everybody says so. There are 45 people at the BBC with salaries of more than £190,000 a year, and the director-general’s package is also pretty inflated, it seems to me.

If BBC management agreed to cut the director-general’s package to £142,000 and lower the other top salaries in ratio with that, they could save and bring to the feast £27 million. That would be helpful when they are imposing cuts on other people. We are all in it together, and they are in it as much as the BBC staff. They should recognise that fact by making sacrifices. That is my third message to the BBC.

My final message is to the Government. I say to them that what happens is their responsibility, and substantially that of the Secretary of State. If and when—I say “when” because I think it is a case of “when”—it becomes clear that the cuts are destroying quality and ending intelligent debate and discussion of politics, the Government should stand ready to provide a supplementary licence fee. All the poll evidence indicates that people are prepared to pay more for their licence fee. One recent poll showed that they were prepared to pay 7p more a day. That would obviate the need for the cuts altogether. The Government should bear that in mind. They should certainly reconsider imposing the burden of the BBC World Service on the BBC itself. It should properly be financed by the Foreign Office.

I say to my fellow MPs who will speak after me, let us please avoid the old carping and criticism of the BBC. We all grumble at the BBC—it is there to be grumbled at, like the weather. However, it is also there to be admired. It is the best producer of quality programmes and quality news in the world, and an institution that we should be proud of, not treating in this horrendous fashion of cuts, sacrifice and dumbing down.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. May I explain to Members that, as Mr Speaker mentioned, we plan to end the debate at 3.15 pm and start the wind-ups at 2.45 pm? There are 12 Members who have indicated that they wish to speak, and I can be a little more generous on the time limit if Members are disciplined. If those speaking at the beginning take more than 10 minutes including interventions, it will mean that those who come later get less time. With that in mind, and knowing the self-discipline that Members will want to apply, I will set the time limit on Back-Bench speeches at 10 minutes.

12:43

[Martin Vickers (Cleethorpes) (Con)]

It is a pleasure to follow the hon. Member for Great Grimsby (Austin Mitchell). Clearly Radio Humberside is going to get a few plugs this afternoon.

It is tempting on such an occasion to attack and compliment the BBC in equal measure. I am very happy to say that I would pay my licence fee for Radio 4, and if I happened to get the Radio 5 Live football commentaries, “Newsnight” and “Match of the Day” thrown in I would be a satisfied customer. In reality, however, we are here this afternoon to convey to the BBC, through the Secretary of State, the concerns of our constituents.

It is clear that our constituents greatly value local radio. In the case of mine, that means Radio Humberside. Unless someone is local to the area, it is difficult for them to appreciate the antipathy to the word “Humberside”. Indeed, one of my illustrious predecessors, Michael Brown, pledged to expunge it from the English language. Alas, it lives on, although it is now sometimes referred to as “the Humber”. However, Radio Humberside has gone a considerable way towards overcoming the in-built suspicion of anything containing the word “Humberside”. Nowadays, we are at least referred to as “northern Lincolnshire”.

[Nic Dakin (Scunthorpe) (Lab)]

Does the hon. Gentleman agree that despite the issue of the word “Humberside”, there is a lot of affection for Radio Humberside among people in Scunthorpe, Grimsby and on the south bank of the Humber, particularly for its support for and reporting on local people’s activities, whether they be football, arts or other things?

[Martin Vickers]

I certainly agree with the hon. Gentleman, and the word “affection” appears somewhere in my notes in relation to Radio Humberside. I suspect, though, that most of my constituents on the south bank of the Humber are more interested in what goes on in Louth and Lincoln than in Cottingham and Kirk Ella. I therefore remain convinced that some savings could be made through joint working with Radio Lincolnshire. Residents in places such as Keelby and Caistor, which are really suburbs of Grimsby and Cleethorpes, feel much more part of what we might call the Humberside community than of the more rural Lincolnshire community. I acknowledge that the success of Radio Humberside is partly because people grow fond of—even affectionate towards—some of the presenters, such as Peter Levy with his lunchtime phone-in.

[Daniel Kawczynski]

Does my hon. Friend agree that local presenters are very much admired and revered by the local community and hold local politicians to account in debates? May I put in a plug for Eric Smith, my favourite presenter on Radio Shropshire, who is also appearing in “Aladdin” at Shrewsbury’s Theatre Severn, playing the emperor of China? I very much hope that people will go and see him over the Christmas holidays.

[Martin Vickers]

I hope that plug serves my hon. Friend well in his future dealings with his local radio station, just as I hope that Peter Levy will view my next appearance on his programme favourably after my mention of him.

With the decline of many local newspapers, although thankfully not the Grimsby Telegraph, local news on BBC stations will become more important, although it is easy for them to overdo the contribution that they make to local politics. I can speak only for the Humberside and Lincolnshire area, but many years ago there was a Radio Humberside reporter at local council meetings as a matter of course. Indeed, when I was first elected to Great Grimsby borough council in 1980, there was a reporter who not only attended meetings of the full council but had the unpleasant task of even being at every committee meeting. I often used to sympathise with him as he sat through far more meetings than even the councillors were forced to.

[Hugh Bayley]

The hon. Gentleman is absolutely right to stress the local links that local radio has with the community and the identification of listeners with their local radio station. During the catastrophic floods in York 11 years ago, I was tasked by the police silver command one Friday night, when we ran out of sandbags, with trying to find some people to come in overnight and sew additional ones. I put out public appeals on BBC Radio York, Radio Humberside and Radio Lincolnshire. Two hours later, a factory manager in Lincolnshire said that he had been called up by workers who had gone to the factory having heard the programme, so that they could open it up and sew. Within 24 hours there were 1 million sandbags. Is there not a risk that such local community service by radio—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. We have now had an advert and an intervention that is really a speech. Interventions are supposed to be brief and relevant to the point that the speaker who has the floor is making. I would be grateful if we could stick to that.

[Martin Vickers]

Thank you, Madam Deputy Speaker. I entirely agree with the point the hon. Gentleman makes on floods and the like. We have had our share of floods in the Cleethorpes area—most recently four years ago. Local radio comes into its own on such occasions.

To go back to the coverage of local politics, it is completely unrealistic to expect local council meetings to be covered individually by reporters. Indeed, in some areas, there are far too many local councils to be covered by local stations, which is another argument in favour of single-tier local government—that is an argument for another day.

I support the Government’s approach to the licence fee. Any organisation as large as the BBC can and should make savings. The licence fee is a significant burden—

[Sammy Wilson (East Antrim) (DUP)]

rose—

[Martin Vickers]

I think I am running out of time, so if the hon. Gentleman will forgive me, I will carry on.

The licence fee is a significant burden to those on low and fixed incomes. I acknowledge that although various schemes help some categories of my constituents, the licence fee falls disproportionately on the elderly and the housebound, who quite naturally rely to a much greater extent on their radios for company and entertainment.

The licence fee must be contained. I do not subscribe to the more radical proposals for the BBC that are supported by some of my hon. Friends—I would regard myself as a critical friend of the BBC. As the hon. Member for Great Grimsby pointed out, in many ways, the BBC sets a benchmark for quality and is an institution of which we should be justly proud, but it must recognise that it is funded by what is in effect a compulsory tax, and the anger the general public feel about some of the salaries and fees paid to executives and presenters. Why do more than 100 members of staff earn more than the Prime Minister? I remain unconvinced of the merits of that situation, although I am sure they are capable individuals.

The director-general carries a heavy responsibility, but he and his colleagues must recognise that my constituents, many of whom do not earn as much in their working lives as his annual salary, contribute to that. My constituents remain amazed that £15,000 per episode of “Question Time” represents a reduction in the presenter’s salary—£15,000 is not far short of the average wage for my constituents. I am a passionate supporter of the free market and recognise that the BBC operates in a competitive environment, but it must, like all publicly funded organisations, recognise the circumstances in which the country finds itself.

The motion asks for local radio and regional TV programmes to be safeguarded, but not completely insulated from savings, which to a limited extent can always be found. I put “local” ahead of “regional”. I find the suggestion of a “Radio England” completely unacceptable. Regional radio used to exist. I recall that when I bought my first Marconiphone transistor radio, I could tune into Midlands, North, London and the like as well as exotic stations such as Hilversum, Athlone and Luxembourg. However, regional radio never really had any buy-in from its audience—people did not tune into 434 medium wave for the northern news; they tuned in because that was the best reception in the area.

I enjoy some programmes on BBC 4 television, but I remain unconvinced that its new programming could not or should not be aired on BBC 2—indeed, it would have been before the latter station was dumbed down. That is not a throwaway remark. I clambered into my loft last weekend and dug out some editions of the Radio Times from the 1960s and ’70s—do not ask me why I had them. When I flicked through those pages, I appreciated how much rubbish is broadcast these days in comparison with years gone by. I am told that BBC 4 is cheap television. I can understand that—it does not cost a great deal to re-broadcast a 1976 episode of “Top of the Pops”. I would prefer one from 1966, but that yet again shows my age.

Radio Humberside and local radio generally is greatly supported by our constituents up and down the country. It is that above all else that the BBC should concentrate on safeguarding as it looks for savings in other areas. I hope all hon. Members support the motion.

12:54

[Valerie Vaz (Walsall South) (Lab)]

I begin by thanking my hon. Friend the Member for Great Grimsby (Austin Mitchell) for introducing this timely debate. It is always a pleasure to follow the hon. Member for Cleethorpes (Martin Vickers).

The motion says it all. I call on the BBC to reconsider some of its short-term responses to the problem of relieving pressure on its budget, and I hope to set out why. So many times in the Chamber recently I have had to express my concern about our national institutions, which are the envy of the world. The BBC is a well loved service, and one that is respected for factual output, drama and music. It is now leading the debate on science and bringing its beauty and wonder to the masses.

I shall focus on the national position, what is happening locally in the west midlands and what will happen in future. As my hon. Friend the Member for Great Grimsby said, for just £12 a month, the nation can enjoy new drama, science and current affairs programmes. In my view, the BBC is hamstrung, because although the licence fee settlement is guaranteed until 2017, the licence fee is frozen. As he said, the BBC will also have new funding responsibilities for, among other things, the World Service and S4C, and must make savings of 20%.

The whole point of a public broadcaster is that it need not have an eye to the shareholder, so it can commission new and innovative programmes. The BBC is accountable to viewers, who will always tell it what they like and do not like, but people must have space and time to hone their craft. Creativity cannot be measured as a unit of expenditure.

[Steve McCabe]

Is it fair that viewers in the west midlands should have to pay the same licence fee as viewers in Cardiff, Bristol or Salford when the former get such a limited return for their investment compared with the latter?

[Valerie Vaz]

I thank my hon. Friend for that intervention, but I shall come to what is happening to BBC West Midlands.

A drama can have a greater impact and provide greater understanding of a topic; one has only to watch “Later…with Jools Holland” to see this country’s tremendous musical creativity; and in both television and radio, exploring the boundaries of our world and helping us to make sense of it is one of the cornerstones of what the BBC does.

What concerns me most as a west midlands MP is the proposed decimation of BBC West Midlands, which has a unique 90-year history of both factual and drama programme making. It is home to some of the most excellent programmes, such as “Countryfile”, “Coast” and “Gardeners’ World”. A long time ago, I made a programme that came from Pebble Mill—“Network East”—and I remember the expertise of the staff. They edited a piece on the Chelsea flower show at 7.50 pm for transmission at 8.00 pm. One can find such professionalism and dedication to the job across the whole of the BBC. As many hon. Members from the west midlands will know, when we go on the “Politics Show”, a remarkable woman—is there not always a remarkable woman?—does our make-up, acts as floor manager and provides the hospitality at the end of the programme. I am not sure what else she can include in her job. Perhaps the BBC will expect her to be a camera operator as well. That is the nature of her commitment and the commitment of the other people who work there.

The £15 million that is spent on the region is worth £28 million to the local economy, not to mention that Birmingham is the country’s second city and the geographical heart of England. That as well as skilled jobs such as journalists, researchers, engineers and producers could be lost. The pitch is that 150 skilled jobs in the area could be lost.

[Tracey Crouch (Chatham and Aylesford) (Con)]

If the west midlands is the heart of England, Kent is the garden of England. Is the hon. Lady aware that Radio Kent, which provides many of my constituents with an excellent service, has longer listening hours throughout the week than any other BBC radio station? That is why it is vital to retain top-quality programmes and stations for our constituents.

[Valerie Vaz]

The hon. Lady serves her constituents well by making such an important point and I hope that the BBC is listening to her. It is not only the skilled jobs that will go; the local news dimension and the cutting edge digital production will be lost. Once lost, such skills will never be regained.

The west midlands is one of the most diverse areas. When BBC operations moved from Pebble Mill to the Mailbox, Mark Thompson said that great cities such as Birmingham were central to his vision of the BBC. None the less, it is the future on which I wish to focus. In the midlands, there is a different a pool of talent from that in London. Broadcasting there offers opportunities for a first step in the media. Outreach work is carried out across the midlands and includes projects such as BBC News School Report, the International School and the university of Birmingham sports partnership in which, hopefully, it will be recognised that women can play sport and that there is a gender balance to be achieved.

[Yvonne Fovargue (Makerfield) (Lab)]

Does my hon. Friend share my concern that these cuts are having an effect on regional sports? For example, there are fears that the cuts, particularly those in London, will take away 95% of the coverage of rugby league, which is hugely popular in my constituency.

[Valerie Vaz]

My hon. Friend makes an important point, and I absolutely agree with her. I should also like to flag up my concern that after the move to Bristol, S4C may be made to broadcast from there to save costs rather than from Wales.

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

I am startled by the claim that S4C could be broadcast from Bristol. Is the hon. Lady telling me that that is official Labour party policy?

[Valerie Vaz]

Oh dear. I thought that the hon. Gentleman was listening. I was voicing not official party policy, but my concerns. I tend to look at the future and worry about things. The hon. Gentleman should be aware that such a move is a possibility. It is not one with which I agree. People have actually starved to secure the channel S4C, and it should remain in Wales, which is the most wonderful country. Let me press on now.

Each generation has seen the BBC achieving new successes. Programmes such as “Doctor Who” have been reworked and old legends such as “Merlin” have been broadcast. Savings can be found by curbing the excessive salaries of the so-called stars.

[Steve McCabe]

Jeremy Clarkson.

[Valerie Vaz]

Yes, Jeremy Clarkson. As I mentioned earlier, all this output costs £12 a month. If we match some of the savings with a slight increase in the licence fee—7p a day would mean a £2 increase a month—which my hon. Friend the Member for Great Grimsby mentioned, we could stop all these cuts. We cannot have a situation in which we buy in other people’s words and pictures rather than have news reporting on the ground. I have written about this matter to Mark Thompson and the chairman, Chris Patten. The reply, which I received today, does not reassure me that any of these cuts are necessary. I urge the BBC to think again. Operating a camera, directing and editing are different skills. Mistakes are made when there is no time for research and facts are not checked. The BBC is not a throwaway institution, but an institution that nurtures new talent while celebrating the wisdom of the long-standing people who work there. The world is getting more complex; the BBC needs to expand and not contract. The message from this House must be that it has to think again.

12:59

[Mr Don Foster (Bath) (LD)]

I congratulate the Backbench Business Committee on selecting such an important subject for debate and the hon. Member for Great Grimsby (Austin Mitchell) on introducing the debate with his usual panache. Bearing in mind his current attire, I was slightly taken aback by his attack on pinstriped mandarins. Other than that, I agree with a great deal of what he said.

The motion says that the BBC is

“the most respected public service broadcaster in the world.”

From the contributions that we have heard already, it is clear that it is the best public service broadcaster in the world. It is the best because of the high quality of its output on television, radio and online. Its news is both impartial and highly trusted, which is reflected in the fact that it produces only 27% of television news, yet secures 72% of all news viewing.

[Bill Esterson]

The right hon. Gentleman makes a good point about television. The same is true of radio, and local radio in particular. BBC Radio Merseyside and other regional radio programmes achieve high listening figures among the over-65s. The loss of such a service will be a blow to those people. Is it not true that the core of the BBC’s business is its regional news service and it should rethink its decision?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I have already said that interventions need to be brief. Brief means short and not a speech.

[Mr Foster]

Let me just say to the hon. Gentleman that I will discuss local radio a little later in my speech. The BBC provides a significant training function for many parts of broadcasting—not just for the BBC. One of the things that has not been mentioned is the vital role that local radio provides as the training ground for many of the people who go on to be national news presenters or who get involved in national news production. The intangibles of the BBC are many and varied. It is, for example, one of the best technological innovators. We have seen that with the fantastic success of the iPlayer, which, I think, will be replicated when we have the launch of YouView some time next year.

The BBC also makes a huge contribution to the creative industries in this country. We are well aware not only of its technological and training achievements but of the way in which it provides support for fantastic orchestras and for the Proms. It will make a huge contribution to the 2012 Cultural Olympiad. The BBC, in the many ways in which it operates, is critical to this country. We have already seen a number of cuts to its service. Under the previous Government, huge cuts were required. Indeed, it has already had to find savings of about £1 billion since 1998. That has included reductions in senior management and in salaries and that could go still further.

I was delighted that the hon. Member for Great Grimsby referred to the crucial role that the National Audit Office is now playing in scrutinising the accounts of the BBC. I was very pleased indeed when that role was introduced by the coalition Government.

Before I come on to the cuts, I want to address one other matter that worries me—and this is a criticism of the Government. At a time when the BBC has to deal with these significant problems, some of its attention will be diverted by the Leveson inquiry. It was wrong for the remit of that inquiry to be widened to include broadcasting when there are so many other important issues that need to be addressed.

It is absolutely right that the BBC cannot be immune from the cuts that are facing the public sector at the current time. Lord Patten, the new chairman of the BBC Trust, was right to say that it should be possible to run an outstanding broadcaster on £3.5 billion a year. While the hon. Member for Great Grimsby was castigating the Secretary of State earlier on in his contribution, he should have been aware that the size of the cuts imposed on the BBC could have been considerably higher had the Chancellor required the BBC to fund the free licence fee for the over-75s. Some credit must go to the Secretary of State for his role in ensuring that the cuts were not as great as they could have been. Nevertheless, there are serious cuts facing the organisation and additional responsibilities that it must take on. It is not surprising, therefore, that the director-general has said that the BBC simply cannot take on further responsibilities if there are further cuts coming down the track.

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

The work that the BBC has done over 30 or 40 years of violence in Northern Ireland is a credit to public broadcasting, but would the BBC not do itself more good if it were more transparent and, for instance, revealed exactly how much each presenter and employee gets? The public have a right to know.

[Mr Foster]

I hope that the right hon. Gentleman is aware that the BBC has already made great strides in making public that information, but with some individuals there will be issues of commercial confidentiality and contractual relations. It is difficult but the BBC has made progress, and I hope that if we enable the National Audit Office to consider these issues, more information will be forthcoming.

As I said, these are deeply challenging issues, and they include the increased responsibilities of the BBC. Unlike the hon. Member for Great Grimsby, I am pleased that the World Service will come within the wider remit of the operation of the BBC. That will be to the benefit of the excellent World Service, which reaches 165 million people around the globe every week. I recently visited the Arabic and Persian services, which are doing fantastic work and whose contribution during the Arab spring has been immeasurable. We should be praising their work. However, bringing the World Service and the BBC together will bring real benefits. I am pleased that Members on both sides of the House raised concerns about the level of cuts to the World Service—we should all be concerned about that—but I am pleased that additional funding has been found, and I hope that we can find more to ensure that it can continue its excellent work.

I am pleased that, with the management arrangements for taking on some of the responsibility for S4C having been sorted out, the channel now has a secure future, which means that it can continue to provide an excellent service through its Welsh-language service not only to the people of Wales but to the growing diaspora of Welsh people throughout the rest of the country.

I am perfectly sanguine about the need for the BBC to make a contribution towards the roll-out of high-speed broadband. After all, it is part of the BBC’s remit that it delivers services and helps to develop different platforms. It is right, therefore, that it is involved in high-speed broadband roll-out, although I would say to my right hon. Friend the Secretary of State—I have said this to him several times—that one contribution that the BBC could make but is not allowed to make as much as it would like is on demand management to help people to understand the benefits of high-speed broadband and to provide training activities.

I am lucky enough to be the chairman of the all-party group on the BBC, and recently we held a meeting at which Lord Patten and the director-general, Mark Thompson, came before the group to answer questions about its Delivering Quality First plan. It will not surprise Members that more than 50% of questions asked were about local radio and expressed concern about the cuts. I want to make it clear that I join all Members who urge the BBC to think again about the cuts. They are seriously damaging. As a proportion of radio stations’ budgets, the cuts might seem small but, as the hon. Member for Great Grimsby said, given that a high percentage of their budgets will go on fixed costs, the impact on many local radio stations’ cash budgets—used on programmes and to pay presenters—will be significant and do great damage.

I have already mentioned the training issue. I simply do not understand why something as important to so many of our constituents as local radio is under attack like this. It is worth remembering that about 20% of people listen only to local radio. It is a lifeline for such people, particularly older people and the disabled. I hope that the BBC will reconsider that matter, just as I hope that it will look again at regional television. After all, regional television provides journalists with particular insights into, and an understanding of, what is happening in a locality that cannot be reflected by people stuck in Salford, Cardiff, Bristol or wherever.

I hope very much that the BBC will consider one other issue that has not been raised so far today but which has been raised by members of the all-party group: the BBC’s coverage of European issues. It is worrying, for instance, that the BBC has not yet implemented the 2005 Wilson report, which recommended additional training to journalists about the operation of the European Union. Bearing in mind how important the EU is to this country, it is worrying that the only major programme covering European issues, “The Record Europe”, might be axed.

There is one area where the Government could quickly do something to assist the BBC. I find this matter bizarre. In the vast majority of the world, if someone were running a satellite or cable programme, they would be begging to have on their platform the programmes that the BBC produces. They would be paying it to make that contribution. The Government need urgently to address what are called in the jargon “retransmission fees”. If Virgin does not charge, other than for the costs of the operation, to have BBC programmes as part of its popular package, I must question whether it is now appropriate for Sky to receive so much money from the BBC. I urge the Government to look at that.

I end where I began. Notwithstanding the forthcoming cuts, I am confident that the BBC, despite all the changes taking place, will continue to be not only, as the motion states, the most respected public service broadcaster in the world but the best public service broadcaster in the world.

13:16

[Paul Blomfield (Sheffield Central) (Lab)]

In joining colleagues to make the case for local radio, I want to focus on three points. First, the cuts being made to local radio are unfair and disproportionate. Secondly, they will have not only an immediate impact on service but a long-term effect that could threaten the very future of local radio. Thirdly, echoing a comment by the hon. Member for The Wrekin (Mark Pritchard), these decisions are being made by a London-based management who appear not to understand the nature of their service or listeners outside the capital.

I want to illustrate these points with reference to Radio Sheffield, which is a successful station that broadcasts from the heart of my constituency and throughout south Yorkshire and which is listened to by 244,000 people every week. That equates to a remarkable 19% penetration of its potential market. On average, those people listen to Radio Sheffield for eight hours every week. I have to declare an interest as a regular listener of Radio Sheffield too. I shall declare another interest: I also listen regularly to Radio 4. I recognise, however, that Radio 4 has a significantly smaller audience across the country than the 7.5 million people who listen to local radio.

[Tracey Crouch]

Does the hon. Gentleman agree that one reason people are so loyal to their local radio stations is the variety they provide: there is the heavy speech content in the morning, followed by a variety of music, plugs for local events and so on in the lunch-time and afternoon shows, followed by the interesting speech content mix in the drive-time shows. That variety means loyal listeners.

[Paul Blomfield]

I agree with the hon. Lady about the variety and local roots of those different strands of the local radio offer.

It is important not only to consider the aggregate total of people who listen to local radio but to take note that one third—2.5 million people—of those people do not listen to any other BBC station and that, as the right hon. Member for Bath (Mr Foster) pointed out, almost one fifth listen to no other radio station at all. Yet while the Radio 4 budget is being protected, local radio across Yorkshire is facing cuts of about 18%. What does that mean for Radio Sheffield? The current 16 hours a day of local content will be almost halved, to nine hours. From broadcasting local content every weekday from 5 am to 10 pm, we will have two local slots, one in the morning and one in the early evening. The afternoon will be filled with regional programming—joint shows with Radio York and Radio Leeds—and from 7 pm, evening local radio will effectively become, as was pointed our earlier, “Radio England”, which is complete nonsense when it comes to local radio. The loss of medium wave will bring an end to language programmes for ethnic minority communities, which are highly valued and attract a significant local listenership. We are also facing shared sports commentary, an issue to which I want to return in a moment.

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

Let me say how much I support the case that my hon. Friend is making for local content from Radio Sheffield, a case that I would also make for Radio Newcastle. Does he think that the cuts to local radio are consistent with the BBC’s duty to reflect and strengthen cultural identities at the local and regional levels?

[Paul Blomfield]

My hon. Friend makes an important point, because I think the cuts conflict with that duty. The BBC has done a lot of great work over recent years in seeking to meet that aspiration and won a popular following from our minority communities in Sheffield. That is now at risk as a result of these cuts.

My concern is not only about the immediate impact, but that the transformation of the local radio offer—a significant change—will lead to a spiral of decline. Reduced budgets will lead to falling listener numbers, which would challenge local radio’s legitimacy further and leave the London-based management in no doubt in future. Smaller audiences for local radio would lead to further cuts, reducing listeners again. That spiral of decline will ultimately bring into question the future of local radio. That must be a worry for us all, because BBC local radio is unique. No one else, in either the BBC or the commercial sector, has a similar offer. As other Members have said, research suggests that many people—particularly older people—tune in to local radio for a sense of connection with their communities. A MORI study for Ofcom indicates that older people are more likely to listen to the radio at least five days a week, with 87% of those over 55 doing so. That is certainly true of Radio Sheffield, whose audience’s average age is 54. Those people listen to it because it is local: it is of the community and reflects that community identity.

[Julian Smith (Skipton and Ripon) (Con)]

Does the hon. Gentleman think that one of the challenges is that, looking at these issues from London, the Yorkshire dales, which I represent, and Sheffield, which he represents, may seem close, when in fact the communities there are quite different and distinct? We need to point that out to people living in White City.

[Paul Blomfield]

I absolutely agree with the hon. Gentleman’s point about regional identity; in fact, I was coming to that. My point about the spiral of decline is that, if evening programmes became national—“Radio England”—they would, by any definition, cease to be local, and the reason for listening to them would disappear. If afternoon programming becomes regional, the same will happen. In Sheffield, we are rightly proud of being part of Yorkshire, which is an important part of our identity. However, although Yorkshire is our region, it is not our community. Yet that point—precisely the point that the hon. Gentleman makes—is not understood by the BBC management in London.

Let me illustrate that by reference to the plans for shared sports coverage. Sport is very popular with the Radio Sheffield audience, and I have no doubt that the same is true around the country. Nobody else provides that service, and on a Saturday afternoon the station is the most popular station on the dial in south Yorkshire. One in four radio listeners are tuned in to Radio Sheffield. However, under the BBC plans, when Sheffield United play at Elland Road—as we will next year when we are promoted: I have to declare another interest at this point—the commentary will be provided by Radio Leeds. I recently pointed out to the director-general of the BBC—at the meeting to which the right hon. Member for Bath referred—that Sheffield United fans would rather switch off than listen to a Leeds-based commentary. He recognised that that was a problem and said that the BBC needed to provide more neutral football commentary—completely missing the point. As a Sheffield United fan, I listen to Radio Sheffield’s away commentary precisely because it is not neutral—because it is partisan and because Keith Edwards knows the club inside out and cares about it, just as I do.

[Martin Vickers]

As a blades supporter, I can understand what the hon. Gentleman is saying. Does he agree, however, that it is even more important for teams in the lower leagues—such as Grimsby Town, which is temporarily residing in the Blue Square premier league—and other local sports clubs to be covered by local radio? Without it, our 7-nil victory on Tuesday evening would not have been widely reported.

[Paul Blomfield]

That is an incredibly important point. I worry that, when the away coverage comes from London, as under the BBC’s proposal, a whole range of clubs will fail to get any commentary.

This issue goes beyond football. Local radio works because it is partisan, because it is rooted in communities and because it identifies with people, speaking to them and for them. Take that localness away and we will take the listeners away. As I mentioned earlier, BBC local radio in England has an estimated 7.5 million listeners, an increase of around 500,000 on last year and 700,000 more than the previous year. Cutting local radio in this way, when listener numbers are going up, makes absolutely no sense. If the current consultation launched by the BBC is to have any validity, I trust that it will listen to the huge number of voices raised in support of local radio and think again.

13:27

[Glyn Davies (Montgomeryshire) (Con)]

Thank you for inviting me to speak, Madam Deputy Speaker, in this debate on a subject that is hugely important for the people of Wales—possibly temporarily, before the whole thing is moved to Bristol.

I love the BBC. I love it as one might love a cantankerous auntie or some other relation. I enjoy complaining about the BBC, in much the same way as the hon. Member for Great Grimsby (Austin Mitchell), who introduced this debate, might enjoy complaining about the weather. I enjoy complaining about the left-wing bias and the ridiculous obsession with wind farms. In fact, about three weeks ago I even wrote a letter of complaint to the BBC—the first I have written in my life, I think. I wrote to “EastEnders”, because there was a line in it where someone said that somebody had died as a result of a bee sting. I was approached by all the apiarists in my constituency, who were outraged at the damage that that would do to beekeeping throughout Britain. I wrote to the BBC asking it to make it clear that dying from a bee sting is an incredibly rare event. When the BBC does such things on “EastEnders”, there should be a high-profile rebuttal of the idea that such events happen regularly. I am therefore taking advantage of this debate to make that rebuttal, because I do not think that the BBC issued one.

The BBC is hugely important in Wales; indeed, it is probably more important to Wales than to any other part of the country. I know that we all think that, but Wales is a proud nation, and the BBC not only delivers the same thing to Wales as to the rest of Britain, but actually underpins the culture of Wales. The BBC in Wales has its own orchestra. The BBC is absolutely part of Welsh culture. It does a terrific amount of work for our unique language—Welsh, the language of heaven. It is not just S4C that has been involved in that, but the BBC, which has played such an important part in developing the language. Indeed, it is one of the success stories when it comes to the world’s minority languages, and we have to recognise the role the BBC has played in that.

The BBC, through its coverage of the National Assembly for Wales, is also playing a huge part in the development of the political identity of Wales. I am unashamedly Welsh through and through, and I have been incredibly proud of the work the BBC has done to make Wales an identifiable nation since devolution became a reality in 1999. I am also proud of the work it is continuing to do, and I do not want to see it stop.

The truth is, however, that the BBC had to reduce its costs. The reduction in the licence fee—what we call BBC cuts—is an entirely reasonable expectation. The Government obviously have an influence on the licence fee in its discussion with the BBC, and vulnerable people must be protected. The BBC licence fee is a regressive tax, which impacts more on the poorer in society than on the wealthy. At a time when the whole nation faces difficult economic and financial circumstances—we cannot be sure how long they will last—it would be completely wrong for the BBC not to make a contribution through the licence fee. I am fully supportive of the reduction in the level of the licence fee.

I want to make three points; the first is about S4C. One of the BBC cuts is for S4C funding to the tune of a little less than £80 million a year. This is the first chance I have had to speak on this since serving on the Committee considering the Public Bodies Bill, which was effectively taken over by the issue for a significant part of its work. It helped all of us to understand the impact of the BBC in Wales. I received 1,100 e-mails about the proposed changes in the Public Bodies Bill, which people feared would give the BBC excessive influence over S4C. I sought assurances from the Minister and was very encouraged by those I received. What we found in the end is that the result has been a terrific score. I thus wanted in this Chamber to say a huge thank you to those who delivered the agreement between the BBC and S4C, which has produced what is as close to an operationally independent S4C in Wales as could be hoped for. We feared that that would not happen, but the matter has been laid to rest. I also want to mention the BBC National Trustee for Wales, Elan Closs Stephens, who played a terrific part in bringing about that agreement, which needs to be publicly recognised.

My second point is about English language broadcasting in Wales—an issue also raised by the former controller of BBC Wales in a recent high-profile speech. Many Wales MPs have been so focused on the future operational independence of S4C that we have perhaps not argued as strongly as we should have for Wales to have its fair share of English language production. It hurt me a little when I read in the report of the former controller of BBC Wales that Welsh politicians did not fight remotely as hard for English language broadcasting in their country as the Scots did. I thought that that was a challenge to us. One reason I wanted to speak in today’s debate was to try to make it certain that Welsh politicians started fighting for their share of English language broadcasting in Wales. It is not just a matter of S4C; it is about English language broadcasting as well.

The hon. Member for Walsall South (Valerie Vaz) suggested looking at the issue like an accountant to see whether BBC broadcasting in Wales could be transferred to Bristol. I can see that making a lot of sense from an accountant’s point of view, but my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) and other hon. Friends leapt to our feet like startled rabbits when we heard that. That is how we felt. I could not believe that anybody could possibly make such a suggestion—even in jest. It struck me that at that stage not a single Member from Wales from any party other than the Conservatives must have heard it. I would have thought that Opposition Members, including the hon. Member for Blaenau Gwent (Nick Smith) who was not in his place at that stage, would have leapt to their feet, too.

[Valerie Vaz]

The hon. Gentleman is being slightly unfair or failing to understand the point I was making. It was a simple one. I meant that if it was a question of costs, then there was such a possibility. It is not on anybody’s agenda, but I thought that, just by saying it, perhaps the situation could be saved.

[Glyn Davies]

I thank the hon. Lady. When she made that suggestion, it was the first time that I had ever heard it. Perhaps this is the quickest ever way to save a situation—three quarters of an hour after what the hon. Lady said. That seems promising, but the suggestion itself is so unreasonable and outrageous that one cannot even contemplate it. My own view is that if changes have to be made, perhaps we could move Bristol to Cardiff.

[Nick Smith (Blaenau Gwent) (Lab)]

I thank the hon. Gentleman for giving way, and I am sorry I had slipped out of the Chamber when that remark was made. I do not think anything serious was meant by it. I believe that the BBC Cardiff operation is fantastic. As we all know, it is the home of “Doctor Who”. I cannot believe that the significant investment made by BBC Wales in Cardiff in recent years will be overtaken by a move across the nearby channel.

[Glyn Davies]

I thank the hon. Gentleman for reinforcing my point.

[Alun Cairns]

Does my hon. Friend think that the hon. Member for Walsall South (Valerie Vaz) meant Bristol, Tennessee or Bristol in Avon?

[Glyn Davies]

I think I will pass on that one.

My third point is about political coverage in Wales. The new controller of BBC Wales has produced a plan for the future. On the face of it, the plan is a worry for politicians, particularly those based here in Westminster. It looks as if political coverage in Wales, particularly of politics in Westminster, will be reduced. If that happened, it would be a huge concern for me. I am reassured that it will not. We will have to wait and see the extent to which transferring the production of programmes from BBC Wales to the private sector happens. I gather that one programme in particular will be commissioned by the private sector. Let us wait and see how it works out and whether it delivers the same level of political coverage that we have been used to.

My feeling—this is a criticism I have made of the BBC in the past and I have heard Opposition Members express the same concern—is that coverage of Westminster politics is not as strong as it should be. It is more convenient for the BBC, given that it is located in Cardiff, to contact Members of the National Assembly and to relate to them. It is more difficult for it relate to Members of Parliament. It places a responsibility on us to make sure that we are noticed and that the BBC reports what we do. It is a serious concern, and I believe that over the next couple of years, we will have to look at whether the changes to the BBC in Cardiff actually deliver what the controller tells us they are going to deliver. I hope that our fears will not prove to be worth being overly concerned about.

There is no doubt that the BBC faces a huge challenge. The reductions in the licence fee and in the investment that the BBC can make are going to mean an awful lot of changes, but £3.5 billion is a huge amount of money. My view is that the BBC will return to the swaggering, confident self it used to be but has perhaps not been for the last couple of years, so that I can start to feel comfortable complaining about the BBC again. I look forward to regaining some of the pleasure I have often taken from that.

13:39

[Mr Iain Wright (Hartlepool) (Lab)]

I thank the long list of Members who have put pressure on a tight time scale to enable us to debate this important issue. In my brief speech I shall highlight, as others have already, the important and valuable local identity and distinctiveness—a phrase to which I shall return time and again—of the BBC’s output. I shall focus on local radio, but I shall also say something about the importance of local investigative journalism on television.

As part of its Delivering Quality First project, BBC local radio is expected to find savings of some 12%, but for some reason BBC Tees, my local radio station, is expected to find savings of 20%. There is no transparency and no rationale for the disproportionate cuts that my local station is expected to absorb, which will pose a severe risk to its link with its listeners and the local identity and distinctiveness that are rightly cherished.

Delivering Quality First states that the BBC Trust wants to

“protect the five editorial priorities that the Director-General has identified: news; children’s programming; UK drama and comedy; knowledge programming; and the coverage of events of national importance.”

I certainly agree that the corporation should concentrate its licence fee expenditure on the output that most people expect from it, but I also believe that local radio is the section of its output that seems most personal to, and most owned by, the licence fee payer. Many people have diligently paid their licence fees year in year out, and do not use other parts of the BBC’s service such as iPlayer or BBC 3. Local listeners feel very close to local presenters, and I think that BBC radio is the best broadcasting example of localism in action. That is certainly true of BBC Tees, as is reflected in its record listening figures and the fact that its audience satisfaction rates are at an all-time high.

I am not sure that the BBC’s actions comply with the trust’s wish to ensure that it

“continues to improve the extent to which its services resonate with all the UK’s nations, regions and communities.”

If anything, its proposals for BBC Tees drive a coach and horses through the special and distinctive service offered by local radio. I see that my hon. Friend the Member for Wansbeck (Ian Lavery) is present. I must point out, with the greatest respect to my hon. Friend, that communities in Teesside often have little in common with communities in Tyneside and Wearside. I predict that if the cuts go ahead and programming is shared between my area and, for instance, his, the listener engagement and interaction that constitute an important part of any local radio station’s activity will cease.

The corporation has stated that staple programmes such as the breakfast show and the early evening drive-time show will be protected. That seems to suggest that teams, indeed armies, of people are allocated to specific local radio programmes, which is certainly not the case at BBC Tees. I am struck by the amount of multitasking that is involved in producing, presenting, and investigative journalism. It is not unusual for Ali Brownlee, for example, to present a football show on, say, a Tuesday evening, reporting on what is invariably a defeat for Middlesbrough, and then to serve as anchor for the breakfast show a few hours later.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

rose—

[Mr Wright]

I will give way to my hon. Friend, who I believe is the only season ticket holder left at Middlesbrough football club.

[Tom Blenkinsop]

I second my hon. Friend’s support for Ali Brownlee. I also pay tribute to Mark Drury, another member of the BBC Tees sport team. However, given the record-setting losing form of Hartlepool this season, I should have thought that my hon. Friend would be much more appreciative of the station’s coverage of Middlesbrough and, indeed, Guisborough Town football clubs.

May I now strike a serious note, and ask my hon. Friend whether it is not rather dangerous that northern BBC stations such as BBC Tees are being subjected to cuts of more than 20% while their southern counterparts are being subjected to cuts in single figures?

[Mr Wright]

I admire and respect my hon. Friend’s championing of Guisborough Town, of which I understand he is the president, but I should prefer to draw a veil over Hartlepool United’s appalling home record of seven defeats in a row. I think it best not to talk about that.

I agree with my hon. Friend’s point about access to local sport provision. My only criticism of BBC Tees is that it gives far too much coverage to a local non-league team called Darlington.

I am not sure that such practices as the sharing of afternoon or evening shows will ensure that those 20% savings are achieved. The excellent John Foster show, which is broadcast between 2pm and 4pm, benefits from the resources of a presenter and a producer who doubles up as a broadcast assistant. There is hardly a huge amount of fat or inefficiency in BBC local radio, at least in my area. I fear that the loss of jobs and expertise will inevitably result in a deterioration in programme quality, not through the fault of BBC staff, but simply because they will have too much to do. Audiences will decline because they will no longer experience that sense of local identity and distinctiveness.

[Julian Smith]

The hon. Gentleman refers to the limited fat in local BBC stations. Len Tingle, who followed me around for a day last year, persuaded his wife to accompany him on a day out in the Dales and an evening at a B and B. She ended up carrying all his bags and acting as cameraman in the evening. I think that that shows how hard local journalists are working day in, day out.

[Mr Wright]

I entirely agree.

Another aspect of the local identity and distinctiveness to which I have referred is the fierce passion for and loyalty to an area. My hon. Friend the hon. Member for Sheffield Central (Paul Blomfield), in a far more eloquent speech than I could ever make, presented the case for ensuring that local radio stations are partisan in that sense. It is significant that BBC Tees’s strapline is “proud of where we live”. The station’s championing of new renewable and offshore wind technology in the area is second to none, and its advocacy of the area during the loss of the steel plant in Redcar and its unconfined joy when the plant was sold as a going concern to SSI showed that it would always fight Teesside’s case. While he is still in the Chamber, let me pay tribute to my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) for ensuring that the plant and its workers remained on Teesside.

Much of that passion for and pride in the station derives from its staff. The presenters, journalists and production staff at BBC Tees are all professionals, and fiercely loyal to the region. Most of the presenters were born and raised in the area, which has given them a knowledge of and affinity with the area that is unsurpassed in any other broadcasting medium. Both Ali Brownlee and John Foster, the former breakfast show host who now presents the afternoon show, were born in Middlesbrough. Neil Green, who currently presents the drive-time show, was born in Hartlepool, was a teacher in the area, and still lives in my constituency. It is important to bear in mind that those people use the same services as their listeners.

Such loyalty and passion, however, are not the same as slavish devotion. The quality of the journalism on the station is extremely high and challenging. I can certainly say, as an elected representative, that we are not given an easy ride when being questioned by presenters. I certainly was not given an easy ride this week when I was questioned about the autumn statement, along with the hon. Member for Redcar (Ian Swales). The station’s passion for ensuring that local politics is viewed in the context of what we do here in Westminster is very valuable.

In the run-up to last year’s general election, all the candidates for the seat that I now represent went to the BBC Tees studio, where we were questioned and challenged by Neil Green, who also fielded calls from listeners and prospective voters for well over an hour. It is difficult to think of another widely used, indeed universal, medium that would allow such direct democratic challenge, such professionalism, and such reach to and interaction with our constituents. Because many people in my area do not have access to the internet, e-mail or social media, BBC local radio is the sole means by which citizens can question people in positions of authority or people who are standing for election.

[Julie Hilling (Bolton West) (Lab)]

Does my hon. Friend agree that local radio stations such as the Greater Manchester station not only give our constituents a chance to challenge us throughout the year, but give us a chance to garner support for important local and regional campaigns, such as the campaigns for the Manchester hub and my own campaign here for the teaching of emergency life support skills?

[Mr Wright]

I entirely agree. As I said earlier, BBC local radio can serve as a champion for particular issues.

In the time left to me, I want to outline my concerns about the cuts to local investigative journalism. The “Inside Out” programme provides in-depth and important local journalism. It is comparable in quality and scope to Granada’s “World in Action” in the 1970s and 1980s, and no other current broadcaster or programme, with the possible exception of Channel 4’s “Dispatches”, is able to match it. In my region, its exposé on Southern Cross care homes and investigation into the supply chain used by the businesses of Mike Ashley, the owner of Newcastle United, were important and showed investigative journalism at its best. The 40% cut to that programme will allow those with powerful vested interests to sleep more soundly in their beds, which should be avoided.

There is, of course, cross-fertilisation between the two elements of the BBC. Local radio investigations and points put forward by listeners can feed into television journalism, and vice versa. The quality of local provision will fall as a result of these cuts, and licence fee payers in my area will receive a poorer service.

[Julian Smith]

Does the hon. Gentleman agree that the recent policing scandals in Cleveland and my area of Yorkshire would not have been analysed properly had it not been for BBC local radio and television news?

[Mr Wright]

I entirely agree. The BBC revealed the costs of those police investigations and challenged those in authority on such financial issues.

The world is getting much smaller in the sense that it is becoming ever more interconnected. People have access to news events across the world, such as the Arab spring, in a matter of seconds through BBC World Service and News 24, as well as through broadcasters such as Sky and CNN. Paradoxically, and somewhat perversely, the BBC cuts proposals will result in less local provision, but that is equally important. That should be avoided. One of the BBC’s great strengths is its local output, and that should be protected as much as possible.

13:51

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

It is simplistic to complain only about the cuts the BBC is facing. We need to take into account the broader economic perspective. Instead of adopting the top-down approach of considering where savings can be made, our starting point should be to ask the following question: what do we want the BBC to do and to achieve? Let me say at the outset that I am a strong supporter of the BBC. The quality of its output is first class, and it covers subjects that no commercial operator would consider addressing. It responds positively to education and social needs and demands. As a public service broadcaster, it ticks all the boxes and more. However, in doing the “and more” part, does it stifle competition and squeeze out competitors, thereby reducing plurality of provision? A guaranteed licence fee income of £3.5 billion and a total income of £5 billion puts the BBC in a strongly favourable position compared with providers who have to deal with fluctuating advertising income and economic unpredictability.

Critics of BBC budget cuts need to recognise that it may well be able to operate more efficiently in some of the many areas of its output, and, indeed, that it might not need to operate in all those areas, as other providers may be better placed to cover them. To the credit of the BBC—and the Secretary of State for Wales—freezing the licence fee has resulted in its being forced to look at what it does, and the Delivering Quality First agenda is the outcome, although I would suggest that it should be the start of its reaching the desired outcome.

I want the BBC to start by focusing on what other providers might do and what capacity they may have for providing entertainment and information, as the BBC must ask itself how it can ensure that it strikes an appropriate balance in services and subject areas while representing all parts of the nations and regions of the United Kingdom. How can it contribute to innovation, rather than squeeze out competition? Should it operate in every area where there are commercial alternatives, such as in the market that Radio 1 covers? Plurality and news output to target audiences must be considered of course, but do we need to continue with the same traditional approach?

It may be unfashionable to mention James Murdoch at present, and I would condemn him if he were to be found guilty of any of the allegations that have been made.

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

If.

[Alun Cairns]

If the right hon. and learned Member for Camberwell and Peckham (Ms Harman) wants to intervene on that point, I will happily respond.

James Murdoch has highlighted that when some years ago Radio 2 was losing its target audience of 24 to 45-year-olds, it paid millions of pounds to recruit Jonathan Ross to try to regain those listeners even though commercial operators already addressed that audience. If that is not an example of the BBC squeezing out competition, I do not know what is.

Does it make sense for the BBC to cover sporting events that ITV, Channels 4 or 5 or Sky would like to broadcast? I agree that we need to look at what should be free to air and whether pay per view is appropriate in all areas, but let us consider the example of Formula 1. The BBC has paid £300 million to screen Formula 1 over a five-year period. That amounts to £3 million per race, yet Sky will also broadcast every race. The partnership between Sky and the BBC is a significant and positive step forward, as it is certainly better than the previous situation of their competing outright, but two issues remain unresolved. First, could not ITV, Channels 4 or 5 or another broadcaster screen that popular sport? Secondly, the simple fact of the BBC bidding with public money will drive up the price and squeeze opportunities for others.

I recognise that the quality of the BBC can give it an edge over other broadcasters, but I remind Members that the BBC covered test match cricket for a long time, but the greatest innovations in the coverage of the sport occurred when the broadcasting rights were won by Channel 4 and then Sky, who took coverage to a much more sophisticated level. Innovations such as Hawk-Eye were introduced and a more informal approach to cricket attracted more viewers and new audiences.

I pay tribute to the BBC’s website coverage, which has set the standard for such output. It covers national and regional news in a structured way, and addresses subject matters across the spectrum from hard news to social gossip. It is an excellent example of the innovation the BBC can achieve. Yet if it continues to dominate this part of the market, that could prevent other providers—newspapers, broadcasters or even new entrants—from having the opportunity to innovate. The BBC set excellent standards, but it needs to consider whether there should be a subsequent, partial withdrawal when the market has matured.

I strongly support the BBC’s activities in areas where the market cannot provide. News in general is extremely important, and without the BBC’s news activities in many parts of the UK there simply would not be any coverage of significant news or social or cultural events. Wales and Scotland are of particular relevance in this regard, especially with the advent of devolution.

Other Members have talked about local television, so I shall now briefly address a parochial issue. The UK press does not always cover Wales as adequately as it should. This is where the BBC comes into its own of course, but in Wales its implementation of the Delivering Quality First agenda involves a squeeze on its political coverage. It argues that news is not being cut under the current proposals, yet there is a reduction in political output. Politics is news, so there is obviously a cut to news.

Although the BBC has, to its credit, responded well to devolution, that should not be achieved at the cost of coverage of non-devolved matters. Over recent years, there has been a trend to reduce political coverage on mainstream news outlets. Welsh questions have been covered on a mainstream outlet in Wales since 1987, but under current proposals that will no longer be the case.

[Glyn Davies]

Does my hon. Friend agree that Members of all parties must not stand back on this issue? Instead, we must raise our voices to complain, as a former controller of the BBC has urged, so that we in Wales get the coverage we deserve?

[Alun Cairns]

I am grateful to my hon. Friend for that intervention, and in his speech he highlighted that very point, and I underline it and pay tribute to it. Let us all have confidence about complaining to the BBC when we are unhappy so that it can respond. If we do not air issues and concerns, how will the BBC know about them?

I recognise that we, as politicians, are not the most popular people in the world. I would suggest, however, that some of the issues we debate are at least sometimes relevant to mainstream outlets in the nations and regions of the UK. There is no proposal to change coverage on the English regional output—granted, there will be local changes to BBC radio in England, but in Wales that situation does not exist.

While I am discussing Wales-related issues, I want to join my hon. Friend the Member for Montgomeryshire (Glyn Davies) in recognising the deal on S4C and I pay tribute to the BBC and the Secretary of State for delivering what he promised at the outset: a channel that was well funded, secure in its funding for the future and operationally and editorially independent. There were many sceptics in the debate, but even they have now been won over. I support the tribute that was paid to Elan Closs Stephens and to the chairman of S4C, Huw Jones, at the end of the negotiations, despite some of the difficult tensions among the membership of the authority.

Let me return to the broader issues. I know that the BBC has made significant progress on salary levels, but there remains scope for some further progress, particularly in relation to talent. I know that Graham Norton’s deal reduced from £16.9 million over three years to £4 million over two.

[Karl Turner (Kingston upon Hull East) (Lab)]

I am grateful to the hon. Gentleman for giving way, especially as I just came into the Chamber a few minutes ago. He talks about salaries at the BBC. Would he take this opportunity to make a comment about Jeremy Clarkson and say something about responsibilities coming with salaries?

[Alun Cairns]

I would certainly underline that point, but we should bear the context in mind. I did not see the broadcast and although I have read some reports about it, I would like to watch it before I comment specifically. I have no doubt that the Secretary of State will refer to it when he sums up.

I was talking about salary levels and progress has been made, but Graham Norton still earns £4 million over two years. I am sure that if that amount was squeezed further, he probably would not walk. Reference has already been made to the fact that David Dimbleby earns £15,000 per episode. Anne Robinson’s salary was cut from £4 million over two years to £2 million over two years. Demand for such roles clearly outstrips supply and the BBC has a fantastic ability in developing talent. It generates the supply as well as satisfying the demand. There is no excuse for paying such salaries to those people.

[Julian Smith]

Does my hon. Friend agree that work needs to be done to ensure that management salaries at the BBC in London and the south are much more equitable with management salaries and executive salaries in the north?

[Alun Cairns]

I am grateful for that point. The ultimate test is transparency and that is an area where the BBC has taken some small steps. For comparison, the agenda of the Government as regards local authorities, where every invoice in excess of £500 is published, leads me to expect the BBC to go that way, too. That greater transparency would allow people to judge and would better inform the BBC about its judgments and, no doubt, misjudgments, on occasion.

In the minute I have left, let me refer to Professor Anthony King’s report about how the BBC must better reflect the nations and regions of the United Kingdom on the network. It has taken some positive steps. For example, “Doctor Who” has been highlighted in this debate and it is now filmed and produced in Cardiff. There is a significant shift to Salford, too, but that does not get away from the fact that television from the nations and regions of the UK about the nations and regions of the UK should be broadcast on the network. Let me highlight, for example, “Boys from the Blackstuff”, a pioneering programme about Merseyside that educated significant numbers of people about some of the culture there. “Auf Wiedersehen, Pet” was a programme that made the north-east attractive to many people, and it brought it out through the characters. We need to see more of that sort of innovation and I am grateful to have had the opportunity to highlight it.

14:04

[Angela Smith (Penistone and Stocksbridge) (Lab)]

I congratulate the Backbench Business Committee on giving us this debate today and the Members who called for it, particularly the hon. Member for Cleethorpes (Martin Vickers) and my hon. Friends the Members for Great Grimsby (Austin Mitchell) and for Hayes and Harlington (John McDonnell). I called for such a debate in my Westminster Hall debate on this issue, because I feel very strongly that we must ensure that the BBC and the Government understand the depth and strength of feeling on the issue. More than 50 MPs tried to speak in the Westminster Hall debate—obviously, not all of them could get into a 90-minute slot, so this is a welcome opportunity to extend the number of voices heard in Parliament on this topic. Those voices need to be heard.

The BBC Trust is planning to achieve savings of about £670 million a year by 2016-17, with a net loss of about 2,000 jobs across the piece. The £670 million-worth of savings identified will be lumped together with £30 million of savings generated by exceeding the targets for the BBC’s current efficiency programme, which will result in total savings by 2017 of 20%. By anybody’s standards, that is a fairly significant cut in funding for our public broadcaster. The question is: why is that being done? Why are we seeing that level of cuts?

We know that the cost of the licence fee has been frozen until 2017, yet it has gone up by just £10 since 2007 and now costs just over £12 a month for all the TV, radio, websites and live events covered by the BBC. That compares with about £60 a month for some subscription services and, as the National Union of Journalists has pointed out, if all the current licence fee-paying households contributed just 7p extra a day, the cuts could be stopped. It is important to underline the facts that lie behind the measures that we are discussing. It is critical to point that out.

Of course, everybody has been talking today about what is good about the BBC. Many people have drawn attention to “Doctor Who” and I think it is worth drawing attention to some of the very expensive programmes made by the BBC, which are among the most loved of its output. “Frozen Planet”, for instance, is an amazing series. Everybody is now aware of the images of the criminal penguins that are doing the rounds on the BBC. “Springwatch” and “Autumnwatch” are very expensive programmes to make, but their educational value, never mind their entertainment value and their value in raising awareness of the environment, means that I would hate to see them disappear from the BBC’s output. They must be expensive to make—they are live and they involve a lot of filming over a long time.

As I said, everybody has mentioned “Doctor Who”, but I would also mention “Torchwood”, which, in my view, is one of the best programmes on the BBC. The maker of “Doctor Who” and “Torchwood” is Russell T Davies, who is one of the best programme makers of my generation. The right hon. Member for Bath (Mr Foster) mentioned this earlier—I wonder whether Russell T Davies would be the programme maker he is today without the investment in developing good programme makers that we have had from the BBC in the past. I would not like to see people like Russell T Davies walk away from the BBC. They are amazing and creative people and that quality makes the BBC better than any other public service broadcaster in the world.

[Julian Smith]

Out of interest, where does the hon. Lady stand on “Mad Men”? What is her view of American imports and, in particular, of that great show?

[Angela Smith]

I must confess that I do not watch “Mad Men”. I want to focus on the output of the BBC today.

In the end, the cuts to local radio proposed by the BBC are the most worrying. As the NUJ has pointed out, under the plans 22% of local radio output will go at a time when listening figures are going up. Current affairs and investigative programming will be badly affected across the board, but 40% of the reductions are outside London, which will have a disproportionate impact on local radio broadcasting. On top of that, as my hon. Friend the Member for Sheffield Central (Paul Blomfield) pointed out, output will go regional at local level, which is a contradiction, at 1 pm. Drive-time broadcasting will be local but then output will go national after 6 pm. On Sundays, local broadcasting will finish at 1 pm. The total reduction in local broadcasting is about 50%. We have had a pilot on afternoon regional programmes in south Yorkshire and it did not work. Many of the people in south Yorkshire who would tune in to Paulette Edwards tuned out as soon as they realised it had gone regional. As I said in the Westminster Hall debate, we are not parochial but we listen to local radio for a reason—because we want to hear about local news, local politics and local concerns. If we wanted to go regional or national, we would tune in to another station.

Local radio serves a very important purpose and delivers to a specific socio-demographic audience, as was pointed out earlier. The point has been made about the age profile of Radio Sheffield, but it should also be placed on the record that two thirds of the station’s audience are classed as C2DE—in other words it has a working-class audience. Many of those people listen to no other station than BBC Radio Sheffield. It is true that Radio 2 and Radio Hallam get a bigger audience in south Yorkshire, but the reach and audience of Radio Sheffield is significantly higher than the 12% Radio 4 weekly audience of 157,000 and the audience of Radio 5 Live, which reaches 126,000 listeners across the week—just 9.9%.

It is crucial that the BBC Trust gets this decision right. My hon. Friend the Member for Sheffield Central pointed out how passionately people believe in their local radio station, and I want to underline that point. What we enjoy about Radio Sheffield is the diversity of its output and the way it connects with its audience. This is a critical point. My hon. Friend made some funny comments about the sports coverage on Radio Sheffield and I point out that fans of Barnsley FC, Doncaster FC and Rotherham FC also rely on Radio Sheffield for distinctive and very partisan coverage. We must maintain that. I will counterbalance the point he made about Sheffield United by pointing out that Sheffield Wednesday fans, of whom I am one, are also keen Radio Sheffield listeners. On his point about Sheffield United playing Leeds United next year when they are promoted, I must say that they will have to get past Sheffield Wednesday first—they are fifth in the table and we are second—so we will see how that goes.

I want to emphasise the loyalty that there is for BBC local radio. Last Saturday, I was out canvassing in Penistone picking up lots more Labour votes—the swing to us there is quite significant—and I found what one lady said particularly interesting. She said, “I know who you are: I hear you on Radio Sheffield.” One thing that Radio Sheffield does is debate local politics in a very fair and balanced way, giving it significant coverage. She went on to say, “I absolutely love Radio Sheffield and Toby Foster—there’s nobody else I would listen to in the morning.” A lot of people would say the same about Rony Robinson, Paulette Edwards, Howard Pressman and all the other broadcasters on Radio Sheffield. That is the point—the proposals put forward by the trust will have a disproportionate impact on local radio. It must listen, take note and change its plans. I also think that the Government should think again about freezing the licence fee.

The hon. Member for Vale of Glamorgan (Alun Cairns) said that the BBC has an unfair advantage over some of its competitors. However, Radio Centre, which is the industry body for commercial radio, has said:

“While we understand that the BBC needs to make savings to meet the terms of its licence fee settlement, we do not”—

the word “not” is underlined—

“accept that this should inevitably lead to its most distinctive output being diluted.”

Even commercial radio understands the role that local radio has to play in delivering cultural, political and social services to the people of this country. I urge the House to support the motion.

14:16

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

It is a great pleasure to follow the hon. Member for Penistone and Stocksbridge (Angela Smith). I am very much enjoying all this football banter between northern Members of Parliament and finding out about all these broadcasters whom I had not heard of, such as Ali Brownlew and Toby Foster. I am going to have to tune into some local radio services in the north-east. Obviously, they provide a first-class service; we would not expect anything else from local radio in the north-east.

Hon. Members might be surprised to hear that I am not going to speak about local services. I am going to speak about national services, but not those provided by the wonderful Radio 4, Radio 2 and Radio 1. I am going to talk about the impact of the cut on national services in Scotland. We will experience a disproportionate cut compared with that across the United Kingdom. Scotland is not a region—it is a nation, and a nation needs a specific type of broadcasting capability available to it. We have our own national Parliament, which as everybody knows has many significant legislative powers. We have our own civic institutions, we have our own legal system and we provide education and health services entirely differently from the rest of the UK. As everyone knows, we have our own national culture and we require that to be reported in a remarkably different way from any other region in the United Kingdom. That is why it is absolutely critical that we get the correct resources to ensure that our nation is served adequately.

[Alun Cairns]

Does the hon. Gentleman feel that Wales, which is also a nation in its own right, has the same needs as Scotland?

[Pete Wishart]

Yes, is the short answer. I am very grateful to the hon. Gentleman for turning up today. There are two Welsh Conservative Members of Parliament present and we are hearing from Members from right across the United Kingdom, but is it not unfortunate that other than the hon. Member for Midlothian (Mr Hamilton), who is here on Whip’s duty, there is not one of the 40 Labour Members from Scotland here to debate such an important and significant issue as the BBC in Scotland? It is a real tragedy that they would rather turn up and vote on English issues than discuss issues of real importance for the people of Scotland.

We need a BBC that is properly resourced to cover adequately what is happening in England, but what is happening is that one nation’s BBC services are being protected at the expense of another’s. Lots of people in Scotland like Radio 4, and when I am in London I put the Today programme on, but what we learn from the Today programme is usually about the NHS in England and education in England and Wales. I like hearing about the NHS in England and finding out what is going on within the education services in England and Wales, but that means absolutely nothing to me or my constituents. We are continually served up a diet of UK news that is totally inconsequential to Scotland.

The hon. Member for Vale of Glamorgan (Alun Cairns) made this point and it was also pointed out by Anthony King, who produced a very good and detailed report on how the BBC broadcasts in the nations and regions. It still has things absolutely wrong.

[Alun Cairns]

Does the hon. Gentleman agree that although the BBC has taken a positive step, partly to respond to Anthony King, by moving to other parts of the UK for broadcasting, nothing replaces the broadcasting of Scottish, Welsh and Northern Irish issues on the network as well?

[Pete Wishart]

Absolutely. That was a key feature of the King report. He said that a lot was being lost in relation to Scotland and Wales when it came to national news reporting. Sometimes, we got the funny little story at the end about going up to Loch Ness or Snowdon or somewhere and giving an amusing little anecdote to end the news, but in terms of significant reporting of news concerning Scotland, Wales and even the English regions, there was absolutely nothing.

The King report made another important point, which the hon. Member for Vale of Glamorgan will recall. Some English journalists had to be sent on devolution training so that they would start to understand the difference between devolved powers and reserved powers and work out how to communicate that to the rest of the nation. They still get it absolutely wrong sometimes. We get it so often that we are becoming a little tired of it in Scotland and, presumably, in Wales and possibly in some of the English regions.

A particular type of approach is required when broadcasting for a nation; we have very different requirements, in terms of how the everyday experiences of the Scottish people are reflected and reported, and how the news agenda is shaped. That is why the cuts will have a disproportionate impact on the people of Scotland. Let me detail what we will experience in Scotland. One in 10 jobs at BBC Scotland is to be lost, and there is to be a reduction of about 16% in the total budget. BBC Scotland’s news operation and support staff will be hit hardest by the cuts. Between 100 and 120 jobs will be lost at the Pacific Quay headquarters in Glasgow by 2016-17. It is feared that production operations, and online and Gaelic services, and perhaps sport, will be cut and hurt. BBC Scotland’s news operation is to lose 30 jobs; 20 jobs will be lost at Radio Scotland. Craft and production will shelve 35 jobs, and operations and support will lose another 30. The whole future of the BBC symphony orchestra is still under review. That is on top of efficiency savings that will cost some 20 jobs.

The future of BBC Scotland’s “Newsnight Scotland” programme—affectionately known as “Newsnicht” down here—is under threat. It is an important feature of the news output and agenda in Scotland. It gives us the only opportunity that we get in the evening to go over, debate, and comment on what has emerged during the day in the Scottish Parliament, elsewhere in Scotland, or down here. I enjoy turning up at 11 o’clock in the evening to contribute to “Newsnicht”.

The problem with “Newsnight Scotland” is that although there has been an assurance from the BBC that it will be maintained, BBC 2 will be making a transition to high-definition television, and there is not the capability or opportunity for opt-outs for the nations or the regions. If the BBC is listening to this, I hope that it will tell us what it will do to ensure that we continue to get “Newsnight Scotland”, because it is a critical feature to so many people who are interested in the daily political and cultural diet in Scotland.

The Broadcasting Entertainment Cinematograph and Theatre Union in Scotland says that the scale of the cuts means that it will be almost impossible to ensure that the job losses will happen through voluntary redundancies; compulsory redundancies are likely. It is so concerned about the scale of the cuts in Scotland that industrial action has been talked about, and might be a feature, unless we get the problem resolved.

People are taking the issue into their own hands in other ways, too. There is a fantastic campaign about “introducing…”, which is a little programme on Radio 1 on a Monday evening, from 10 pm to 12 midnight. There is “introducing…in Northern Ireland”, “introducing…in Wales”, and “introducing…in Scotland”. That is under threat by the BBC. They are great programmes; they give many new artists and bands a radio platform for the first time in their career. They are responsible for the early development of artists such as Paolo Nutini and Calvin Harris. Bands such as Biffy Clyro and Frightened Rabbit sent their first demos to “introducing…”, and they are now to go.

Such is the response to those little programmes on Radio 1 that a petition on the subject has already secured the signature of some 6,000 people—more, per head of population, than the petition to try to save Radio 6. That is how much concern there is about it in Scotland. That is the type of impact that there will be on local services. I am grateful to the Under-Secretary of State for Culture, Olympics, Media and Sport, the hon. Member for Wantage (Mr Vaizey), who will meet campaigners who are trying to save the programmes. I have not had a response from Mr Thompson; perhaps we could have a discussion about his coming to meet the campaigners, so that he can explain to them why that iconic little programme is to be shelved. The proposal is ridiculous, because it will not save any money; there will still be an “introducing…”; it will just broadcast across the United Kingdom. The individual identities of the programmes, and the opportunity for bands from Northern Ireland, Wales and Scotland, will be lost. You know, Madam Deputy Speaker, how passionately I feel about the music industry and opportunity for young artists. I really hope that the BBC thinks again.

I have only a few minutes left and a number of issues to raise. The reason I am so annoyed by, and angry about, the BBC cuts in Scotland is that we do not even get our population share’s-worth back from the BBC. We in Scotland are actually subsidising the BBC; we give more through the licence fee than we get back in services. I am appalled that Scotland has to subsidise the BBC for the rest of the UK, just as we have to subsidise the rest of the UK when it comes to resourcing, and the balance of payments to the Treasury. That is a feature that we have had to put up with. If we have to subsidise the BBC’s television and radio services, let us do what we can to protect the services that we have.

We will need a properly resourced BBC, because there will be a few big issues coming Scotland’s way in the next few years. We will ask the people of Scotland to make one of the most substantial and important choices that the nation has ever had; they will have the opportunity to say yes to becoming a normal, self-governing nation, like those throughout the rest of the world.

[Mr Iain Wright]

When?

[Pete Wishart]

It will be in the second half of the parliamentary term, as was set out in our manifesto; that will be delivered. The BBC will have to be properly resourced to ensure that we can continue to inform the people of Scotland about this important choice. That is why we need BBC services to be properly resourced.

Back in 2005, production output from Scotland was below 4%; that was appalling, particularly given that, as I have said, we subsidise the BBC. Progress will be made on that, as the Secretary of State knows. All credit to the BBC: it has improved the situation. We are getting close to our population share target of 9% for production, and there is a commitment to meet that target by 2016. I do not know how cutting the BBC in Scotland so dramatically will help to achieve that. Again, I would like the BBC to explain how we are to hit those production targets by 2016 if we are to cut so deep and so hard in the BBC in Scotland. I hope that the BBC recognises that what I am talking about is not a local or regional, but a national service in Scotland. Our nation is losing out.

[Mr David Hamilton (Midlothian) (Lab)]

rose—

[Pete Wishart]

Of course I give way to Scottish Labour.

[Mr Hamilton]

I thank Peter “nae pals” for his contribution. Surely he should unite with everyone else on the Opposition Benches, because the same cuts are affecting all of us. Surely it would be more helpful for him to unite with the other Opposition parties, rather than arguing his single line, as he usually does.

[Pete Wishart]

I am grateful to the hon. Gentleman. I am four-square behind colleagues who want to ensure that regions and local areas of the United Kingdom retain services; they are losing their services at the expense of UK services such as Radio 4. Let us keep the local and national services. I say to the BBC: have another look at the impact of the cuts. Do well by the nations, the regions, and local radio.

14:27

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

I want to speak about the decision-making process that has been taking place over the past couple of years, which has, to be frank, been a nightmare. I am grateful to the Backbench Business Committee for giving us the opportunity to hold this debate. My hon. Friend the Member for Great Grimsby (Austin Mitchell) set out the overall implications of Delivering Quality First. He chairs the National Union of Journalists parliamentary group, of which I am the secretary. We have lived with the process for the last two years. We have met the staff who have lost their jobs already, and the staff whose careers are now at risk.

What comes out of every one of these debates is a consensual view across the House about the importance of the BBC. It is always described as a jewel in the crown of British culture, and as setting world standards in public service broadcasting. Many Members have emphasised its critical role as a foundation stone of local and national democracy. However, as a result of Delivering Quality First, as Members have set out, there will be significant cuts over time, which not only undermines the BBC’s potential to maintain those standards but shows that there is an agenda about the long-term future of the BBC itself.

It is important to discuss how we got here. There is a lesson for future Governments about how decisions are made on the issue. Never again should we have to go through this process. This is not just a budgetary exercise. The assault on the BBC is driven by an agenda that has been set elsewhere. I remember the James Murdoch lecture in 2009 at the Edinburgh television festival, in which he set out an agenda which, regrettably, the Government are following almost to the letter. He set out the objective of the Murdoch empire to deregulate the media overall and undermine the BBC by cutting its supply of funds.

[Alun Cairns]

Does the hon. Gentleman not accept that the freezing of the licence fee has made the BBC look at its activities and, at the very least, has reduced the salaries of some of the highest-paid people in broadcasting?

[John McDonnell]

There are always benefits from a process like this. My concern is about the long-term future and some of the short-term implications that the hon. Gentleman himself pointed out. We should not wander into this debate naively, because there is a separate agenda, which was set by James Murdoch at that time. The tone of sheer arrogance in that speech somewhat contrasts with the tone of his performance in the hearings by the Select Committee on Culture, Media and Sport. In that speech, he proclaimed his advocacy of Darwinism, and he said that he believed in natural selection in all things, particularly within the media market. It was like Gordon Gekko in “Wall Street” saying, “Greed…is good.” James Murdoch proclaimed that the law of the jungle worked. It was almost Orwellian. I shall quote him exactly:

“There is an inescapable conclusion that we must reach if we are to have a better society. The only reliable, durable and perpetual guarantor of independence of the media is profit.”

That is exactly the agenda that was set. It is that philosophy in other sections of the media that has led us all the way down to the Leveson inquiry and the descent of parts of the media into the gutter. This is not a conspiracy theory. I do not need to mention the 11 occasions on which the Prime Minister has met Murdoch’s News International. I do not need to mention the six occasions on which the Secretary of State for Culture, Olympics, Media and Sport has done so, or the three occasions on which the Deputy Prime Minister has done so. I do not think that it is part of those meetings; I do not think that it is part of a conspiracy. I simply think that the Government share that agenda.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

Until the hon. Gentleman began to personalise this and mention individuals, I was prepared to share some of his concerns about the Murdoch speech and some of the claims that were made. Two things should be perfectly clear. First, many Government Members feel very warmly towards the BBC, and want to enfranchise and support the tradition of public service broadcasting, which it does better than anyone else in the world. That comes not just from Back-Bench Members but, I am thrilled to say, from the Secretary of State and the Prime Minister.

The second thing is—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. This is an intervention, not a speech. [Interruption.] Yes, but interventions must be brief, and we are coming to the end—[Interruption.] Will the hon. Gentleman take his seat? This debate is due to end at approximately 3.15 pm, and there is a time limit for speeches of 10 minutes for Members who have been in the Chamber all afternoon. Throughout, I have implored all Members to make their interventions brief. I am not negotiating with the hon. Gentleman: I am telling him that he should make his intervention brief, and not make several points.

[Jesse Norman]

Thank you very much indeed, Madam Deputy Speaker, I appreciate that.

Does the hon. Gentleman not agree that his position would be much stronger if he focused on the benefits—the lowering of salaries, much greater flexibility and competition in the market—as well as the negatives as he sees them?

[John McDonnell]

The hon. Gentleman is a new Member, and I understand the point that he has made. Other Members have made that point. I do not want to criticise him, but if he had been here throughout the debate, he would have heard them make those specific points. I want to make my specific points, not seek to replicate or repeat other points that have been made, if that is okay with the hon. Gentleman.

I simply make this point. My concern is that this is not just a cost-cutting exercise. It is part of a political agenda that, in the long term, is aimed at undermining the BBC. It has been set outside Government—not in Government—but the Government concur with it. Secondly, I was here with the right hon. Member for Bath (Mr Foster) and my hon. Friend the Member for Great Grimsby, and was involved in discussions on the licence fee settlement. I never ever want to go through that exercise again, because it put at risk the future of a whole range of people, and that was not taken into account.

I remember the Secretary of State advising the director-general of the BBC in August 2010 that there would be a long consultation on the BBC licence fee, which would be determined the following spring. However, I also remember—my hon. Friend the Member for Great Grimsby has alluded to this—that weekend in October, and the 48 hours in which the Government brought the BBC in and threatened it. The right hon. Member for Bath is right: the BBC was threatened either with the licence for the over-75s being taken over—in other words, a £530 million cut immediately—or it had to take on proposals on the World Service, BBC Monitor and the Secretary of State’s grandiose plans for the future of television development. It was placed in an invidious position and there were threats of resignation, which created pandemonium in the settlement process. We had thought that the process would be a rational debate that this House could shape or influence in some way, but in fact it was the grubbiest deal we have seen in any public sector settlement of recent years. The people least taken account of were the workers who supply the service itself, which I think was disgraceful. If we learn nothing else across the parties, we should learn to behave in such instances in future.

What are the implications? One implication is that the management must now implement another 1,000 job cuts on top of the 7,000 that have been made since 2004. They are implementing those cuts with exceptionally limited consultation or engagement with the unions. Agreements are being torn up before workers’ eyes with minimal consultation.

My hon. Friend the Member for Great Grimsby referred to the meeting of BBC NUJ reps in Belfast on 14 October, which involved all staff, who were anxious about the process. I can quote the director-general—the problem with speaking in front of trained journalists is that they normally know shorthand—who said:

“If you’re really that unhappy, if you think that you can’t do your best work here then leave—no-one is forcing you to stay.”

That is real management empathy—unfortunately, Hansard does not do irony—with people, many of whom are about to lose their jobs. Such behaviour by management would be unacceptable in any structure, whether public or private. It resulted, for the first time in the BBC’s history, in a vote of no confidence by the staff in the director-general and his competence to manage the organisation.

I urge the BBC to pull back and start engaging in proper discussions and consultations. Otherwise, as the hon. Member for Perth and North Perthshire (Pete Wishart) said in relation to Scotland, some unions might move towards industrial action unless there are proper negotiations and their views are taken account of properly. I agree that that raises the issue of salaries in the BBC, and not just for the stars, but for management overall. I think that it is obscene that the director-general earns four times more than the Prime Minister. As has been said, we should consider the high level of salaries throughout and, in particular, the inequality between the high and low salaries. In a public organisation that is simply unacceptable.

A number of Members have raised concerns about local radio services, and we could list them and put the lists in the House Library for Members to see, but the cuts to stations right across the piece are effectively undermining local radio as we know it. It has recently been praised very affectionately in two debates, yet BBC management does not seem to take account of the views of Members expressed here. I do not believe that S4C is safe in the long term or that the deal will hold. I think that the Government will come back for more cuts. It is not about freezing the licence fee, as I think they will come back for further cuts in future years.

I am also anxious about the World Service. The right hon. Member for Bath has worked with us on that and there has been excellent cross-party work to try to protect as much of the World Service as we can, but there have already been cuts and I think that it is still in jeopardy overall. Political coverage is being undermined not only in the regions, but nationally, as we have seen 2,000 jobs going in some of the BBC’s core political reportage.

Overall, I am deeply anxious about the settlement. The only way now is to have a proper discussion—the discussion we should have had last year. Instead of it being bounced through in 48 hours, there should have been a proper discussion and consultation, and I believe that the only way forward now is to reopen the licence fee debate.

Let me say just one final thing on two parochial matters. Several hon. Friends have mentioned the Asian Network, a service that has grown over the years into one of the country’s most popular and well received stations and brought about social cohesion as the BBC is meant to, but a 50% cut in the Asian Network will, as every Member knows, undermine that service, and it will be picked off. That is salami-slicing, and it undermines the viability of particular services.

On my local BBC radio station, Radio London, sport is one of its most popular elements, but we are now told that cricket, rugby league and rugby union will no longer be covered, and that football coverage will be curtailed. As a result of such cuts, a station eventually loses its listenership, and that in turn threatens the viability of the station itself.

That is what we are fighting for. We are fighting not just against marginal cuts, but for the future of the BBC, the future of local radio, the future of specialist services such as the Asian Network and the future of services for the nations, regions and principalities that are under threat in the longer term. The only way in which they can be saved is by breaking the Murdoch agenda, by getting back to a discussion about the BBC as a public service, the jewel in the crown, and by reopening the debate about the licence fee—so that we can have a viable BBC for the long term.

14:40

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

It is a pleasure to follow my hon. Friend the Member for Hayes and Harlington (John McDonnell), who, along with many Members, has made a fantastic speech. I, too, congratulate my hon. Friend the Member for Great Grimsby (Austin Mitchell) and the Backbench Business Committee on securing this important and timely debate. Many Members in the Chamber today took part in the Westminster Hall debate that was so over-subscribed and well attended, and, likewise, the topic has come up time and again at many Culture, Media and Sport question sessions over the past year, so our opportunity for a debate today in the Chamber is a timely one.

We have heard from many Members about the different casualties of the Delivering Quality First review, none more tragic than the 2,000 people throughout the BBC who will lose their jobs as a result of it. I, too, will focus on the impact of the review on local radio—and in particular, on BBC Radio Merseyside.

It is clear from every contribution so far that all Members and the public rightly cherish the BBC, which is a source of national pride because of its quality, role in our public life and commitment to educate, inform and entertain, but it is clear also that the BBC faces a huge challenge. The licence fee freeze until 2017 is the worst in its history, and, given that it has to shoulder the costs of the World Service, it is obvious that many difficult decisions need to be made.

Unfortunately, the BBC has exacerbated those difficulties by producing a set of reductions that are, in some part, fundamentally unfair: unfair because local radio faces a disproportionate cut while larger budgets are protected; unfair because local radio provides a true community service to an audience who rely on it; and unfair because the cuts will mean an end to local news-gathering and locally produced content.

The 39 BBC local radio stations throughout the UK are a unique and popular part of our media landscape, and severely reducing their output would be a huge loss. Throughout the UK, 7 million people listen to their local BBC radio service, of whom 2 million listen to no other BBC radio station. As well as being popular, BBC local radio is also value for money for the listener, costing on average 3.2p per listener hour, compared with BBC 1 on television, which costs 6.7p per viewing hour, and BBC Radio 3, which costs 6.3p per listener hour.

All in the House have seen the value of their local BBC radio station when it has come to emergencies—we heard examples of flooding—or to the disturbances this summer. BBC Radio Merseyside played a very important role in informing the public of where they should and should not travel and of where the disturbances were, and in dispelling some of the myths that popped up on social media sites.

If BBC local radio goes, we will lose a vital service that reflects, celebrates and affirms countless local identities.

[Tracey Crouch]

Will the hon. Lady give way?

[Luciana Berger]

If the hon. Lady will forgive me, I will not, because I am conscious of the fact that one more hon. Member would like to speak before the winding-up speeches begin.

The feeling from those I talk to who work at the BBC is that local radio is being set up to lose its audience, so that it can be scrapped completely at the next licence fee settlement. I sincerely hope that that is not the case, because as a Liverpool MP I see the real value of local radio every day. That is why I have been campaigning against the cuts and why over 1,500 people signed a petition that I had on my website, which I presented to Parliament a couple of weeks ago. For many people, BBC Radio Merseyside is the voice of the city, and it is home to some of its most famous institutions, including the Roger Phillips show and the Billy Butler show. It is also hugely successful. It is the most listened to station outside London, with over 300,000 listeners who, on average, tune in for a staggering 16.2 hours a week. Yet the station will be one of the worst hit by the changes and will see its staffing funding reduced by 20%. Radio Merseyside is already run on a shoestring compared with the larger BBC services. Worse, as the majority of expenditure at the station is on fixed costs such as buildings, any budget reduction of this size cannot be made without a disproportionate loss of locally produced shows and cuts in jobs.

Given that, it is rather strange that no cuts will be made to Radio 4, which has an annual budget of £99 million—it is more than twice the size of the largest commercial station in the UK. With 66% of the licence fee spent on television, it is hard to understand why funding for BBC 1 has been cut by only 3%. I do not believe that it is impossible to find savings from these significantly larger budgets. For example, “You and Yours” is a show on Radio 4 that is aired for one hour a day, five days a week. It is a very informative programme, and I enjoy listening to it when I get the chance. However, there are more people working on that one radio show for five hours a week than there are in the entire staff complement at BBC Radio Merseyside. Is the BBC really saying that it cannot find any savings from that programme, or from its other larger radio stations or television stations? To me, it does not add up.

Alongside the reduction in funding, another planned change is the sharing of local radio programmes between groups or clusters of stations, so that at certain times of the day, instead of having individual local programmes, stations will share programmes with neighbouring city stations up to 50 miles away. Other Members have spoken about the impact that that will have in their localities. In reality, it means that there will be no local programming for large parts of the week. Localness is the DNA of local radio—the clue is in the title. Once one dilutes this service, one fundamentally changes the relationship between the provider and the listener—the licence fee payer. Local radio may be seen by senior managers as a quick and easy way to cut costs, but the listeners, who are primarily aged over 55 and in the lower socio-economic groups, and for whom local radio is not only a friend but a lifeline, do not agree. Local radio programme-sharing was tried in parts of the north in the early 1990s, and it failed to connect with audiences and to attract listeners, particularly in areas with a strong local identity such as Merseyside and Tyneside. It is true that many stations in the midlands and the south of England have been sharing programmes for some years, but they are seldom the stations with huge listening numbers.

BBC senior managers will talk about “value for money” from the licence fee. I agree that that is crucial, but the planned cuts are not equal in impact. The impact on local radio will almost certainly cut much deeper, with the likely loss of broadcast journalist jobs, including reporters and producers, reducing news coverage and programmes. Local radio therefore gets a double whammy—fewer local programmes and huge job losses, resulting in a much reduced news and information service. This comes at a time when other local news providers such as newspapers have been frantically reducing staff as they struggle to cope with the effects of the recession and influx of web-based news services. It seems that the BBC is keen to reduce service in the one area of the market where there is a discernible gap.

The BBC has said that the consultation on the Delivering Quality First proposals will be a genuine one. I have written to the BBC about this, as have many of my constituents and many Members here today. I hope that senior managers will listen to what the public are saying. To be fair, the BBC has a strong tradition of doing that, and I expect it to continue. Some press reports suggest that the BBC might be listening to the calls from various Members and that in the coming days we might see something of a U-turn on the cuts to local radio. That would surely be welcomed by all of us, as the current proposals are unfair and the BBC should rightly think again. I sincerely hope that Members on both sides of the House will support the Backbench Business Committee motion.

14:49

[Nick Smith (Blaenau Gwent) (Lab)]

I congratulate my hon. Friend the Member for Great Grimsby (Austin Mitchell) on initiating this debate.

At a recent session of the Public Accounts Committee, of which I am a member, we heard how the BBC delivered the efficiency savings requested under the last licence settlement but maintained its high standards. That must be acknowledged. In 2004, 64% of the public said that the BBC

“maintains high standards of quality”.

Today, the figure is 78%. At the moment, 80% of people are happy that the BBC exists, compared with just 72% in 2004. The key factor in achieving those savings was new technology. We have to be concerned about how future savings will be made, given that the savings in some sectors may already have been maximised and further staffing cuts of 10% are planned. Quality and a broad range of programming across the UK must be maintained.

I give special mention to the BBC World Service, which has done an excellent job over the past year in covering the phenomenal events in the middle east and north Africa. I look forward to the further development of world television.

The public rightly value programmes such as “Frozen Planet”, which other colleagues have mentioned, that are visually stunning as well as informative. People also value the BBC as an effective consumer champion in the UK and in Wales. BBC Cymru Wales is covering a story about car parking management in my constituency, following a high number of customer complaints. The car park operator has complained to me that the BBC’s filming of the car park “created a general disturbance”, and he has lambasted its “grossly unethical mafia-style actions”. That surprised me because I think that the BBC is doing an excellent job in reporting that important local story. The BBC is not afraid to ruffle feathers or to pursue consumer rights. That is another reason why it has massive public respect.

Finally, I thank the Backbench Business Committee for agreeing to this debate. It is important that we recognise the huge value of what is the world’s best broadcaster.

14:52

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

It is a pleasure to follow my hon. Friend the Member for Blaenau Gwent (Nick Smith).

My hon. Friends the Members for Liverpool, Wavertree (Luciana Berger), for Penistone and Stocksbridge (Angela Smith), for Sheffield Central (Paul Blomfield), and for Hartlepool (Mr Wright) put forward a compelling case for the BBC to think again about local radio. Surely the BBC will think again given the passion and the forensic arguments of hon. Members from all parts of the House.

I thank my hon. Friend the Member for Great Grimsby (Austin Mitchell) for moving the motion and the members of the Backbench Business Committee for choosing BBC cuts, particularly in local radio, as the subject of today’s debate. It has been an excellent debate.

The importance of the BBC to Britain today is hard to overstate. The BBC has unparalleled breadth, depth, reach and appeal. It is, along with the NHS, one of the things about Britain that is most trusted and valued. It is a source of national pride for its quality and international impact. Whether through sport, drama or just Saturday night family viewing, the BBC is an integral part of life in this country. We all think that we bring up our children, but actually we do it in partnership with the BBC and CBeebies. The BBC is valued worldwide. We could have had a whole debate on just the BBC’s children’s programmes, the World Service, BBC news, the BBC’s sports coverage, or the importance of the Proms and the great BBC orchestras to music in this country.

I want to take this opportunity to address some points to the Secretary of State about his responsibility for the BBC. His responsibility is to ensure that the BBC remains strong and independent. If he wants a strong BBC, he will sometimes have to stand up for it, as we did, against the commercial sector. Of course it is important that we have a dynamic commercial broadcasting sector, but it was good that when we were in government the BBC got more channels on radio and TV, developed major online services and expanded into digital. Not surprisingly, that attracted opposition from the commercial sector, and we withstood the pressure. I hope that the Secretary of State will stand up for the BBC’s strength, independence and future development, and resist unwarranted pressure from the commercial sector. When and if he does that, he will have our full backing.

When it comes to fighting the BBC’s corner, is it not bizarre, as the right hon. Member for Bath (Mr Foster) made clear, that the BBC has to pay Sky to carry its channels rather than the other way round? Why is it that when someone watches “Frozen Planet”, a BBC production, on Sky, the BBC has to pay Sky? In the next five years, the BBC will pay £50 million in satellite access fees, more than all the costs that the BBC is planning to take away from local radio and BBC Four combined. Surely that cannot be right.

[Mr Foster]

Will the right hon. and learned Lady add to what she is saying the simple statistic that 41% of all Sky viewing is of public service broadcasters?

[Ms Harman]

Absolutely. The right hon. Gentleman makes a very important point, which the Government could act on.

[Alun Cairns]

If that is such a priority, why was the issue not addressed when the right hon. and learned Lady’s party was in government?

[Ms Harman]

Perhaps it should have been, but we are talking about the situation now and in future, especially in light of what has happened in the licence fee settlement, with which I shall deal in a few moments.

As well as standing up for the BBC against commercial pressure, the Secretary of State will need to stand up for it against some on his own side. Lord Justice Leveson’s inquiry and Ofcom are now examining media plurality in the wake of the Murdoch scandal. The dominance of the Murdoch empire, which was so much the root of the wrongdoing that is now being exposed, would have been even more dangerous without the BBC.

I do not think we will see James Murdoch repeat his attacks on the BBC any time soon, but some who support the anti-BBC stance that Murdoch set out in his 2009 Edinburgh lecture will see the Leveson proceedings and the Ofcom review as an opportunity to re-launch their attacks, as my hon. Friend the Member for Hayes and Harlington (John McDonnell) said. Those voices have kept away from the debate today, but we know that the view still lurks among some in the Secretary of State’s party and on his Back Benches. If he wants a strong BBC, he will need to stand up to some on his own side strongly and publicly. When he does that, again, he will have our strong support.

The Secretary of State needs to stand up for the independence of the BBC. At the heart of its independence is the licence fee, and that is why so much concern has been expressed in the House again today about how the deal on the licence fee was done last October. My hon. Friend the Member for Great Grimsby talked about it as “Three Days in October—When Jeremy Terrorised Mark”. Actually, there was a prequel to that film: “Three Days in October—When George Terrorised Jeremy”. The Secretary of State, appearing to have failed to fight his Department’s corner with the Treasury and to have accepted cuts that were too deep, then imposed major new financial responsibilities on the BBC in a rushed deal behind closed doors, to be paid for from licence fee funds. One was the cost of the World Service.

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

Will the right hon. and learned Lady explain why, if George terrorised Jeremy, the settlement for the BBC required it to make 16% efficiency savings compared with 19% cuts across the whole of the rest of Government?

[Ms Harman]

The Secretary of State could be saying that, in the context of deficit reduction, which the Opposition believe is happening too far and too fast, the settlement could have been even worse for his Department. I do not like to play Tory Cabinet Ministers off one against the other, but the Secretary of State for International Development secured an increase for his Department. The point is that what is happening in the BBC derives from the deal that was done in October.

Of course, like all organisations, the BBC should be efficient, but the agreement on the licence fee should be a settlement between the British public and the BBC; it should not be, or be seen to be, an opportunity for Government intervention in the BBC. That is why there should always be an open process, based on evidence and involving consultation, particularly with the public, who pay the licence fee and receive the service. But that is not what happened. The licence fee stands till 2017, which is after the next election, but I am asking the Secretary of State to acknowledge today that the way in which that was done was wrong, and that to protect the BBC’s independence it should not happen like that again in future.

[Mr Hunt]

If the right hon. and learned Lady is so against the licence fee settlement, will she confirm that it is the Labour party’s policy to reopen it, and that she is against the six-year freeze in the licence fee, which has been so welcomed by hard-working families up and down the country?

[Ms Harman]

The Secretary of State did not listen to what I said. I said that to protect the independence of the licence fee and of the BBC, the licence fee deliberation should be done with great care, with consultation with the public at its heart, and that it should be based on evidence and be open and transparent. Actually, it is a threat to the independence of the BBC to have the Secretary of State locked in a room with the director-general and to have an imposed settlement. I have highlighted the question of independence. I like to think well of people, so I ask the Secretary of State to say that he will support a strong, independent BBC. He needs to show understanding of the concern about how the licence fee was imposed and I hope he will do so.

With the frozen licence fee, new financial responsibilities and the increase in inflation—the forecast is that it will be up from 1.6% to 4.5%—the BBC is having to cut back by at least 16%. The BBC faces invidious choices and hard decisions, which cannot but affect services, jobs and all the sectors for which the BBC is the creative heart.

The cuts to local radio and regional TV have prompted particular concern. I echo hon. Members on both sides of the House who have said that BBC local radio gives a sense of place in what are sometimes fragmented communities—it is about local identity, because it reports local sports and events as well as local news. Local and regional TV offers a ladder of opportunity into the national media and the outcry against the cuts in local radio is heartfelt and genuine.

I should like to add my view of the quality of local radio and to mention Ed Doolan of BBC West Midlands—he is not from my region and I am not trying to get on his programme; he is retired—who spoke out for the whole of the west midlands and was as high a quality of broadcaster as can be found anywhere in the world.

[Jesse Norman]

I share the right hon. and learned Lady’s view about the quality of radio broadcasting in the west midlands—BBC Hereford and Worcester is a classic example. Does she agree that the Government’s plans to introduce more local television to invigorate local markets are extremely welcome?

[Ms Harman]

We will see what transpires on that.

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

My right hon. and learned Friend mentioned Ed Doolan, a big figure in the west midlands. When Mark Thompson opened The Mailbox in 2004, he said:

“The BBC’s centre of gravity is shifting. The regions of the UK and great cities such as Birmingham are central to our vision of a new BBC”.

So much for the vision of 2004; clearly it is no longer with us in 2011.

[Ms Harman]

Let us hope that Mr Thompson is reminded of that spirit and that he listens to the words of my hon. Friend and hon. Members on both sides of the House.

The BBC Trust should respond to the motion and review its proposals. I know that the BBC’s room for manoeuvre is tight, but like other hon. Members, I urge it to think again. It should also think again and put right, at no extra cost, the men-only shortlist for BBC sports personality of the year. Is the BBC really saying that there are no sportswomen, or that sportswomen do not have any personality? Is it any surprise that it has come about given that the panel of people who draw up the shortlist includes representatives from the magazines Nuts and Zoo but not, unsurprisingly, from Grazia and Marie Claire? This is clearly a matter that the BBC needs to think about again.

[Tracey Crouch]

I am grateful to the right hon. and learned Lady for her generosity in giving way. I support everything that she says about the BBC sports personality of the year. As a sportswoman and someone who coaches girls on a regular basis, I think that it is important that the BBC looks at its overall coverage of women sports. Rather than imposing positive discrimination so that women get on to the sports list, we should raise the profile of women’s sports so that they can be shortlisted on the basis of merit.

[Ms Harman]

I am arguing not for positive discrimination but that there should not be discrimination against sportswomen. Women will not be fobbed off by the BBC telling them that it will sort out the process for next year; the BBC needs to sort it out for this year.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

For as long as we keep talented top athletes such as Sheffield’s Jess Ennis off the shortlist, we are sending out the wrong message to women who want to compete and engage in sport.

[Ms Harman]

Absolutely. The BBC can and should sort this out. The process for the awards is not written on tablets of stone. There is time to sort this out. The BBC should listen to what is being said by hon. Members and by people all around the country and sort the matter out.

Finally, may I raise an issue that was mentioned by my hon. Friend the Member for Kingston upon Hull East (Karl Turner)? Will the Secretary of State join me in condemning the really outrageous remarks of BBC presenter Jeremy Clarkson yesterday on live TV? He said that striking public sector employees should be “executed” in front of their families. The BBC has apologised for those remarks, but I hope that the Secretary of State agrees that Mr Clarkson should do the same.

15:07

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

I congratulate the hon. Member for Great Grimsby (Austin Mitchell) on securing this debate, which follows a well-informed and informative debate in Westminster Hall. I recognise that hon. Members have been speaking for their constituents and for many people the length and breadth of the country when they talk about their commitment to BBC local radio. Just under 10 million people listen to the BBC’s national and local services, in total consuming around 90 million hours of listening every week. That is a third of the 30 million adults who listen to local radio every week, including, as the hon. Member for Sefton Central (Bill Esterson) said—I do not think that he is in his place at the moment—a number of people who are disabled, older and from disadvantaged sections of society. We have heard of numerous examples across the country of where BBC local radio has filled a gap that would not have been filled by anything else. In line with what other hon. Members have said, I need to mention the excellent work done by BBC Surrey, which I visited recently, including the excellent Nick Wallis breakfast show.

Before discussing the specific proposals the BBC has made, I want to place this debate in the context of two broader issues that have direct relevance to the issues at stake. The first is the Government’s broader policy on local media and the second is the BBC licence fee settlement, which I negotiated last October.

Let me start with the broader policy towards local media. I am a localist. I have always believed that too much power is concentrated at the centre of our country and we should trust local communities with much greater power to control their own destiny. Strong local media are a vital part of that vision. However, local media in this country are not in a healthy state. Our newspaper industry is battling to reinvent itself in the face of massive technological change. Furthermore, our independent local radio stations have struggled to be profitable and started to consolidate under national brands, which can make them appear less, not more, local.

Almost uniquely among developed countries, we have virtually no local television. I want to put that right. People have characterised our local media policy as simply about local television, but that is a misrepresentation. I want to use the arrival of local television next year, when we will issue 20 cities with the first local television licences, to transform our entire local media landscape to help operators to develop new business models and, most importantly, to learn to respond innovatively to the local communities that they serve in a transformed technological environment.

The objective is to increase plurality—a word that we have heard a lot of this year—at a local level in a way that is consistent with the approach laid out by my hon. Friend the Member for Vale of Glamorgan (Alun Cairns). The relaxation of local media ownership rules is the first step, and next year’s licences will be the second step. The arrival of superfast broadband to 90% of the country by 2015—another of my departmental responsibilities—will mean that by then nearly everyone will be able to access local television over the internet. In short, as the BBC responds to the concerns raised today, which I hope that it will, the Government are doing their best to address the longer-term structural deficiencies in the local media sector.

Hon. Members have mentioned last year’s licence fee settlement. I strongly believe that the settlement is fair to the BBC and a good deal for licence fee payers. It is the first time that the licence fee has been frozen for six years, and at a time when nearly all other household bills are going through the roof, this will help struggling families and remind people that the BBC is doing its bit, too, to offer the public better value for money.

Overall, the agreement requires the BBC to make efficiency savings of 16%, which, as I said, is less than the 19% across the rest of government. I put it to the House that 16% efficiency savings over six years is not unreasonable: they are considerably lower than in many other parts of the public sector and far below those that many private sector companies have to make over much shorter time scales. The director-general of the BBC himself said:

“Anyone who believes that the BBC could have achieved a licence fee settlement at any stage and under any government, which would have called for lower efficiency targets than other public bodies were facing, is deluding themselves.”

Both he and the new chairman of the BBC Trust recognise the fairness of the settlement in challenging times.

I say to the right hon. and learned Member for Camberwell and Peckham (Ms Harman) that the Labour party also has responsibilities, and it cannot complain about the cuts without also saying whether it would reopen the licence fee settlement and end the six-year freeze. To engage in a debate about cuts and not say what it would do is irresponsible politics and undermines the excellent speeches made by Labour Back Benchers today.

The House will understand that, as mentioned, having negotiated an overall efficiency saving, it is not for the Government to specify how the BBC Trust spends the money. Operational and editorial independence is at the heart of the high esteem in which the BBC is held by the public and vital to the role that it plays in our democracy. Because of its fundamental importance, that independence is enshrined in its charter and agreement.

The hon. Member for Great Grimsby talked about the BBC’s culture of “can-do submission” and its saying to me, “Yes, sir, no, sir, three bags full, sir.” If only that were the case. He will know that I am probably the only Member to have been called a four-letter word that rhymes with his surname by a presenter on the “Today” programme. Oscar Wilde said:

“The only thing worse than being talked about is not being talked about”.

The presenter certainly cured that problem for me.

If it is wrong for the Government to compromise BBC independence, however, it is equally wrong for the BBC not to listen to, and take heed of, the views expressed by hon. Members today. I hope that the BBC will listen to the passion with which Members have spoken. I hope that it will note the articulacy with which, for example, my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) talked about local decision making at Radio Shropshire. My hon. Friend the Member for Cleethorpes (Martin Vickers) talked about Radio Humberside. My hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) talked about Radio Kent, which has the longest listening hours in the country. The hon. Member for Makerfield (Yvonne Fovargue)—I do not think she is here—talked about the importance of rugby league and local sports coverage. The hon. Member for Sheffield Central (Paul Blomfield) talked about Radio Sheffield and its reach to ethnic minorities, as well as its sports coverage. My hon. Friends the Members for Montgomeryshire (Glyn Davies) and for Vale of Glamorgan (Alun Cairns) talked about the important role that the BBC plays for the Welsh language. The hon. Member for Hartlepool (Mr Wright) talked about the importance of local identity, as well as the match reporting of Ali Brownlew.

The hon. Member for Penistone and Stocksbridge (Angela Smith) talked about the BBC’s brilliant natural history coverage—I think it was the first time that “criminal penguins” had been mentioned in this House. She also made an important point about the importance of the local as well as the regional, which is very much at the heart of the local TV agenda. The hon. Member for Blaenau Gwent (Nick Smith) talked about the fact that the BBC is not afraid to rattle feathers. In terms of local TV coverage, one of the things we need to do—[Interruption.] I think the phrase I was looking for was probably “rattle cages”. We want to increase, not decrease, the scrutiny of local democracy and local politics, which lies at the heart of many of the concerns that hon. Members have raised today. The hon. Member for Liverpool, Wavertree (Luciana Berger) talked about the pitfalls of local radio sharing. I hope that the BBC will think about those lessons. I had not heard that “Newsnight Scotland” was called “Newsnicht Scotland”, but what the hon. Member for Perth and North Perthshire (Pete Wishart) said about the dangers in the transition of BBC 2 to HD is something that the BBC would do well to listen to, because I know how important that programme is.

I hope that hon. Members will be reassured by some of the comments that BBC management have made in response to this whole debate and the points raised. The director general said to the Public Accounts Committee that local radio was an “incredibly precious service” and that the BBC did not want to preside over its decline. Lord Patten, the new chairman of the BBC Trust, described local radio as the glue that holds local communities together and a

“more trusted way of getting information than anything else”.

I know that Lord Patten has been visiting BBC local radio stations recently to learn more about them and their role. I am sure that he will see that radio is a medium that often generates a passionate response, especially from listeners. He will see that local radio is a unique source of local information, debate and culture. He will see that it serves a crucial function in building relationships with and supporting local communities. As such, local radio is rightly valued and treasured by Members of this House, speaking up for their constituents.

15:17

[Austin Mitchell]

With the leave of the House, I would like briefly to reply to what has been an interesting debate. We have heard praise from all parts of the House for the BBC and its role as a beacon of excellence in news, television and all the other services it provides. Some of the praise from Government Members was praise with faint damns and some of them suggested various cuts that could be made that were different from those proposed in the BBC’s agenda. In particular, we could consider cuts to Clarkson’s salary, which brings to mind an interesting proposal for a programme: “Cutting Clarkson: Women Viewers Say How”, which I can recommend for BBC 2.

It is interesting that nobody defended or justified the full scale of the cuts or the full scale of the impositions on the licence fee. The Minister presented himself in a more amiable light today than in those three days in October, when he must have presented himself as The Beast From 10,000 MHz, such was the terror that he produced in the BBC. However, he made what I thought were three mistakes in his presentation. I agree with him about the desire to stimulate and develop local television, but that should not be done at the cost of cutting BBC local radio, as the current proposals do. I agree that he has defended the BBC against 19% cuts, which was the average among Departments. However, if he works it out, adding the 16% cuts that he has imposed on BBC to the 3% efficiency savings that were already in train under the 2008 agreement—and which will continue until 2013—makes 19%. That is in addition to the further 4% cuts that the BBC is imposing to generate money for programmes. This is a fairly elementary mistake.

It is wrong to say that the Government proposed the cuts and that the BBC cannot interfere in how those cuts are carried out. It has to stand itself in reserve. If the cuts become damaging to the BBC and its reputation for quality, it will need a supplementary licence fee increase to save it from disaster. That is the reserve power that was asked for.

For the rest, what has emerged from the debate is stunningly clear and loud. We are saying to the BBC that local radio should not be cut in the proposed fashion, that regional television should not be cut in the proposed fashion and, most loudly and clearly of all, that the BBC should go away and think again about the scale and timing of these cuts.

Question put and agreed to.

Resolved,

That this House calls upon the BBC to reconsider the scale and timing of its proposed cuts so as better to safeguard BBC local radio, regional television news and programmes, the morale and enthusiasm of its staff, and the quality of BBC programmes generally, all of which have made the BBC the most respected public service broadcaster in the world.

Debt Advice and Debt Management

Thursday 1st December 2011 Commons Chamber

15:21

[Alex Cunningham (Stockton North) (Lab)]

I beg to move,

That this House has considered the matter of debt advice and debt management services.

It is a special privilege for me to open this debate this afternoon—a debate called for by Members from across the House. Although we may have many differences, when it comes to debt advice and debt management services, we share a real concern for ordinary people, including some of the most vulnerable in our society who, often through no fault of their own, find themselves in crisis. Many see that crisis deepen because they do not know where to turn when they fall victim to unscrupulous practices that I am sure we would all unite in condemning.

I am extremely grateful to my hon. Friend the Member for North East Derbyshire (Natascha Engel), Chair of the Backbench Business Committee and to the Committee members for providing us with the time to discuss the issues on the Floor of the House today.

The Select Committee on Business, Innovation and Skills is currently undertaking an inquiry into this very matter, so I believe this debate will add value to the work being done, particularly regarding the scandalous actions of a large number of debt management companies.

Debt seems to have permeated every part of our society in the 21st century. Households are in debt; students are in debt; the Government are in debt; even premiership football clubs are in debt. Debt seems simply like a fact of life for many. Something tells me, however, that neither the Chancellor of the Exchequer nor Malcolm Glazer are subject to aggressive cold calling, excessive fees and misleading advertising by debt management companies from which many of the most vulnerable people in debt suffer. A report commissioned by the Consumer Credit Counselling Service found that 6.2 million people are financially vulnerable—in other words, they have no money left in the bank at the end of the month—and many more are on the brink. More startling is the fact that younger Britons are getting into more debt earlier in life. More than a million households in the 18 to 39 age group are already struggling to cope, with a further 893,000 at risk.

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

Is my hon. Friend as concerned as I am about the cuts to the Money Advice Service just now and how detrimental they will be to the money advice that can be given to young people?

[Alex Cunningham]

I certainly am, and I am going to deal with the issue later. I understand that a considerable number of this body’s staff are to be cut, which is bound to have a tremendous knock-on effect for services across the piece, not just those for young people.

Insolvency is also on the increase. Earlier this year, it emerged that 135,000 people were declared insolvent in England and Wales in the previous 12 months—the highest figure since 1960.

It should also be emphasised that it is the legacy of debt that is the real concern. There was a huge rise in consumer debt from the 1980s until 2007, and although consumer spending has reduced in the last few years, the debt remains, accumulating vast amounts of interest as time goes by. Contrary to what some may think, such debt is not predominantly due to reckless overspending. According to figures from the University of Nottingham, 50% of debt problems can be attributed simply to changes in individual circumstances, particularly unemployment or a drop in wages—something that is not too uncommon in the present grim economic climate.

I know that it would be easy to start outlining why even more people will need help in the coming years as a result of the Government’s policies, but I believe that the purpose of the debate is to concentrate on how we can best help the victims. If we are to help people, we need to retain and enhance the right services and ensure that there is appropriate regulation. Tackling debt head-on can have far-reaching benefits. One pound spent on debt advice saves £2.98 in future spending. A report from the Centre for Social Justice, published in October and entitled “Completing the revolution: Transforming mental health and tackling poverty”, estimated that debt advice could save about £30 million for the national health service, £50 million in legal costs and £220 million in productivity gains, as well as providing other benefits such as debt repayments to creditors.

I am proud of the good work that the Labour Government did in helping those in debt. Since 2005 the financial inclusion fund has done tremendous work, focusing on the most vulnerable members of society and providing free advice for anyone who needs it. I was relieved when, despite the current Government’s initial decision not to maintain the fund, it was announced in February this year that £27 million would be made available so that free face-to-face debt advice could continue to be funded during the coming year. Now I am concerned about future provision, and especially about the possibility that local government—which is also under a considerable financial constraint—will be required to do more in this regard and Government cash will dry up.

The Money Advice Service, set up by the Government to co-ordinate debt advice, is evidently a new body still trying to find its feet, but we desperately need a clarification of its role. For example, if it aims to co-ordinate debt advice, does that include fee-charging services? I hope that the Minister will publish the whole business plan for the service, particularly as I understand that—as was suggested earlier by my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks)—staff numbers are to be cut dramatically.

We must also maintain the excellent practice that exists in our constituencies. In my own constituency the Cabin, part of the Stockton district advice and information service, provides targeted advice for young people. It depends on grants to survive, and I was pleased to learn that the lottery was helping to fund it, but that type of funding is extremely limited, and it will run out.

One young person who was dealt with by the Cabin had approached a fee-charging money management company. According to its assessment, he would be able to pay £100 per month, of which £29.50 was a monthly administration fee. He tried his best to keep up the monthly payments, but knew that he could not really afford them in the first place. He visited the Cabin, which arranged a debt relief order for him, basing his monthly contribution on his current circumstances. He was then able to put his life back on track.

The Cabin’s manager, Janine Browne, is worried about young people finding their way to the very kind of organisation that we want them to avoid. She told me:

“We find the majority of debt collection agencies are very aggressive and if young people cannot access appropriate advice and support they will try other avenues which may not be effective or necessarily appropriate to their circumstances. Without support they bow to pressure.”

What is happening with debt management companies? In 2010-11, the Citizens Advice service in England and Wales dealt with 3,155 complaints about debt management services, 5% more than in the previous year. The key complaints were about poor advice, poor service, excessive charging, cold calling, and up-front fees for services that did not materialise. Most debt firms that have been audited have also failed to comply with guidance from the Office of Fair Trading in several respects, the main problem being misleading advertising that represents their services as being free when they are not. Through up-front fees, the companies take their clients’ cash for themselves first and their creditors second, leaving people disheartened by the lack of progress in dealing with their debts. What can we do?

I have a number of questions for the Minister. Free debt advice is currently widely available and easily accessed. How will he protect and promote those services? The current system of self-regulation is failing. How will he enhance it? Will he ban cold-calling canvassing for new business and the upfront fees? Will he introduce tougher licensing and a requirement for firms to make clear their fees on any advertising and on initially meeting clients?

[Gordon Banks]

My hon. Friend is giving the Minister a Christmas list—and the Minister will recall that this time last year we were addressing the Postal Services Bill, which caused much amusement. Does my hon. Friend agree that the Minister should pay particular attention to the powers of the Office of Fair Trading? Where it has evidence of wrongdoing, it must be able to act quickly to suspend the licences of companies, rather than cases being dragged out for up to four years in the courts before the OFT can finally take action.

[Alex Cunningham]

My hon. Friend steals my final point. He will find out in a few moments that I entirely agree with what he says. What I do know, however, is that some Christmas list requests will not be fulfilled this year because of the levels of debt people are facing.

What work does the Minister have planned with search engines such as Google on finding ways to help people in need find the free services that are available to them, rather than the unscrupulous merchants? Will he provide the OFT with the power to investigate ruthless companies and shut them down early, rather than that sometimes taking more than two years, during which time the companies still operate, make a profit and charge vulnerable customers? I look forward to the Minister telling us what is to be done.

[Karl Turner (Kingston upon Hull East) (Lab)]

On a point of order, Mr Deputy Speaker. In the previous debate, I raised the issue of the disgusting and disgraceful comments made by Jeremy Clarkson last night. My right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) directly asked the Secretary of State to address the issue in his closing remarks, but he failed to do so. Is that in order?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

That is not a point of order. It is for the Secretary of State to decide whether he will comment. The hon. Gentleman’s remarks have gone on the record, however.

15:33

[Tracey Crouch (Chatham and Aylesford) (Con)]

It is a pleasure to follow the hon. Member for Stockton North (Alex Cunningham). I attended the Backbench Business Committee with him in order to try to secure this debate, and I am grateful to the Committee for enabling us to speak on this important issue.

Debt is not a new phenomenon, but over recent years personal debt levels have risen sharply and have become unmanageable for many. Total UK personal debt stands at £1.5 trillion, UK adults owe an average of £30,000, and the Office for Budget Responsibility predicts that total household debt is set to rise from £55,000 to just over £80,000 by the end of this Parliament. My constituency of Chatham and Aylesford has pockets of severe deprivation and high levels of personal debt, and the number of new personal insolvencies there stood at 275 in 2009 alone. Those figures give a mere snapshot of the levels of debt we face in the UK, but they serve to highlight the importance of getting the debt advice right for those in need.

People can find it difficult to admit that their debts have become unmanageable. Many would rather continue as if there were not a problem with the state of their finances, struggling to make their monthly payments and racking up more debt. Typical symptoms include selectively ignoring bills, taking on more credit cards, and turning to store cards to relieve the pressure temporarily. Of course, that just prolongs the delay before the acceptance of a debt problem and worsens the situation in the meantime. Long gone are the days when bank managers took people aside, as they did with me, and cut up their credit cards, but I think many of us would welcome a return to the days when banks paid a bit more attention to personal accounts.

Although many of the individuals seeking debt advice represent a particularly vulnerable section of society on a low income, unmanageable debt is no longer confined to the least well-off. Data from Experian suggest that the biggest increase in personal insolvencies in 2010 was among middle-class families, who typically have a number of monthly outgoings to meet. Equally worrying is the number of young professionals and middle-income earners who have entered insolvency. To return to the point I made earlier about problems in dealing with debt, it is fair to say that it is such groups in society who struggle the most to admit that there is a problem in the first place.

Aside from not wanting to admit to what they see as a failure on their part, those people might be oblivious to the advice and services open to them and instead go on burying their heads in the sand. One fifth of the people struggling with debt are not sure where to turn for advice, let alone aware of the benefits and drawbacks of debt management plans, the meaning of an individual voluntary arrangement or the criteria for debt relief orders. When they decide to do something about their debts, information and impartial advice are key. Finding someone the right solution and getting them on to a feasible plan is vital to remedying the problem, not least as the repayment of debts owed is in the interest of not only the debtor, but the creditors they owe.

Unfortunately, customers can find themselves signed up to inappropriate repayment plans. Statistics from R3, the insolvency trade body, have revealed that 35% of individuals on a debt management plan were not made aware of alternative ways of consolidating their debts and 12% said that they felt pressurised into the arrangement by the company responsible for administering it. Up to 30% of those now declared bankrupt were previously signed up to a debt management plan. That demonstrates the clear lack of information provided and in some cases the coercion from some sectors of the debt management sector, which serves to prolong the misery for the individual and add to their debt burden.

[Gordon Banks]

I just want briefly to outline an issue in my constituency. One of my constituents was making payments through a payment plan and then found the same debt management company acting for the office of the Accountant in Bankruptcy when they went into bankruptcy. My constituent had no understanding of the basis on which that company was dealing with them at all.

[Tracey Crouch]

The hon. Gentleman makes a fair point. We all see people in our constituencies who have been tied in and there has always been a vested interest in such programmes.

[Lorely Burt (Solihull) (LD)]

I am sure that all Members will have tales to tell about some of the rogue companies that cynically take people on, take their money as an up-front fee and also charge them commission, knowing all along that that person will have to take on either an IVA or bankruptcy.

[Tracey Crouch]

As it happens, I was about to tell the House about an instance of which I have recently learned. An individual entered an agreement to pay back their debt through a debt management plan. The plan spanned a total of 14 years and required repayment totalling far more than the original debt. In fact, this particular individual would have found it far cheaper to declare bankruptcy. The information and advice simply were not made available to the customer, who was instead trapped in a monthly payment schedule repaying vast fees.

In the past, and certainly in that instance, debt management companies have been responsible for exploiting the vulnerable and heavily burdened with debt and it is welcome that the Office of Fair Trading has begun to crack down on rogue operations. As a Conservative, more regulation is not something I typically welcome, but, in tackling rogue DMCs it is clearly necessary. Their fees are not always made abundantly clear and cost consumers up to £250 million a year. Adding such high costs to the burden for those who are already over-indebted does not strike me as particularly helpful.

[Margot James (Stourbridge) (Con)]

Is my hon. Friend aware that the Select Committee on Business, Innovation and Skills is currently undertaking an inquiry into this issue? So far, we have heard from several experts that the regulation of debt management companies of the paid-for variety is not working at all. Like her, I do not relish more regulation, but I fear that in this area we have no alternative.

[Tracey Crouch]

I am aware that the BIS Committee is looking into this and I hope that its recommendations when it has finished the inquiry will help the Government to form an appropriate regulatory structure, because it is clear that the current structure simply is not good enough.

Currently, a clear bias exists in favour of pushing consumers into plans that are likely to yield more in fees, rather than focusing on paying down their debts steadily over time. That is in stark contrast to the advice provided by Citizens Advice and the Consumer Credit Counselling Service, which is free, impartial and in some cases anonymous. So the debt management plans are not always in consumers’ best interests. In many cases, they fail because the level of debt built up is already too great and the monthly payments are also too great.

Sadly, it is only when those DMPs fall apart that customers turn to the free services provided by Citizens Advice and the CCCS to help them to pick up the pieces. As a result, the advisers at those services see and hear some horror stories littered with shoddy advice and spiralling debt, so they are particularly well placed to comment on the sector. My local Citizens Advice recently had people with a record £3 million-worth of unsecured personal debt walk through its doors in a single week. It suffers from dealing with the impact of a dangerous cocktail—several high-cost credit shops on the local high street and the emergence of rogue debt management companies. It has campaigned heavily for the regulation of both those sectors, which I support and would welcome.

Earlier this year, I tabled an early-day motion calling for further regulation of debt management companies and for the Government to introduce a robust statutory regime under powers available in part 5 of the Tribunals, Courts and Enforcement Act 2007. That would limit what such companies could charge consumers and would require them to submit self-funded independent audits to a relevant authority. If such companies are found to have breached protocol, the company’s consumer credit licence can be revoked or sanctions brought to bear. That system relies on having an effective regulator, and I am pleased that the recent crackdown on rogue debt management companies by the Office of Fair Trading, which has resulted in the worst offenders having their licence stripped from them, is beginning to fulfil that role.

What we need is a standardised service under which vulnerable consumers looking for advice know exactly what they are getting and can rest assured that it will be in their best interests. Transparency is key to sanitising the debt management sector. Regulation and strict sanctions are necessary to rein in the sector, but it is equally vital that more be done to signpost those looking for help to the right services in the first place. The Government have taken welcome steps to improve the access and quality of debt advice, for which I commend them. The commitment of an extra £27 million for face-to-face debt advice to be delivered by Citizens Advice and others means that access to impartial advice can be assured. That will go some way towards encouraging those in debt to seek help.

Some 90% of MPs in the previous Parliament were contacted by constituents in financial difficulty. As a new Member of Parliament representing a constituency with pockets of deprivation, I know that I will make up part of a similar statistic at the end of this Parliament, as will many other hon. Members. We are in a position to signpost constituents who are in difficulty to free and impartial services such as those provided by the Money Advice Service, Citizens Advice and the CCCS, and to steer them away from costly alternatives. That is something I will continue to do.

In my opinion, debt and debt management should be taken as seriously as the provision of high-cost credit. As legislators, we have an opportunity to do what is necessary to control an industry that can, if misused, misdirected or mishandled, ruin someone’s life. There are a variety of reasons why people find themselves in debt and they should not be judged as a consequence. Instead, we should judge those who seek to help them out of debt and we should judge ourselves as legislators if we fail to do anything about this soon.

15:44

[Yvonne Fovargue (Makerfield) (Lab)]

It is a pleasure to follow the hon. Member for Chatham and Aylesford (Tracey Crouch), who made a thoughtful contribution; I agree with most of what she said. I congratulate my hon. Friend the Member for Stockton North (Alex Cunningham) on securing the debate, which is timely, as Christmas is coming up, although that is not traditionally a time when the advice agencies see people who are in debt; they see them in January, once the debts have come through.

The number of people finding their debt unmanageable can only increase; that is beyond doubt. My hon. Friend mentioned the Financial Inclusion Centre’s recent report, “Debt and the Generations”, which says that a £50 per month drop in disposable income, due to any one of a number of factors—a small drop in hours, increased pension contributions, increased child care costs, or a rise in rent—would result in 3.2 million people who are just about coping and keeping their head above water no longer being able to pay all their creditors. As has been said, we are not talking about being profligate, and buying designer trainers and large flat-screen TVs; we are talking about paying the heating bills, paying for food, and buying school uniforms. Research from the Joseph Rowntree Foundation shows that only one person in six seeks advice from any source. If we accept that, it means that a further 500,000 people would seek debt advice if incomes dropped by only £50 a month.

We need to target the people who are not seeking advice, as the research proves that people who receive advice manage significantly better than those who do not. The Money Advice Trust has done an interesting report called “Facing the squeeze”, which indicates that many families are managing at the moment only because they have low interest rates, are taking on additional sources of credit—some of which, unfortunately, are payday loans—or are cutting back on essential expenditure to the point of deprivation. All of us will have visited constituents like the one I visited the other week, who said, “I’ll put the heating on while you’re here, but I’ll turn it off when you’ve gone, because I want to save the money.”

It is incontrovertible that debts do not come singly, and that early intervention when there are debts saves money. Government policy is slightly short-sighted in removing the majority of debt issues from the scope of legal aid, and in leaving things until the point of eviction.

[Paul Blomfield (Sheffield Central) (Lab)]

Does my hon. Friend share the concerns of Peter Hemmingfield, a debt team supervisor in my constituency who works, under the community legal advice contract, with the Legal Services Commission to provide specialist debt advice? He is very concerned that the service that he provides will practically disappear as a result of the intended legal aid cuts. He says in a letter to me:

“A substantial amount of our work is involved in helping many clients who have mental and physical health problems, who are aged”—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Unfortunately, interventions have to be short; I am sure that the hon. Gentleman is just coming to the end of his.

[Paul Blomfield]

You are absolutely right, Mr Deputy Speaker; I was just coming to the end. Peter Hemmingfield talks about people who are unable to manage their debts alone. Should we not be concerned about the impact on the most vulnerable?

[Yvonne Fovargue]

I agree with my hon. Friend. As for the idea that people can manage by themselves, that is not happening at the moment, and as a result of the cut to legal aid, 100,000 of the poorest people will lose access to advice. We need to look at where they will go, and how they will be helped in future.

Of course, there is a cost to free debt advice, and it is estimated at about £150 million a year. The credit industry contributes 3% of that amount. I would like the Minister to investigate further how a levy on the credit industry could be made to work without affecting the business model of companies such as the Consumer Credit Counselling Service, which relies on a “fair shares” principle to fund its work; I would not like such companies to go because we were looking at a levy on the credit industry. However, it is not sustainable that the industry should pay just 3% of the £150 million.

On the latest figures, Citizens Advice deals with 8,910 new debt problems each working day. The reason why it deals with that many cases, and why people go to it, is brand awareness. Some 97% of people recognise Citizens Advice, although they might not always know what it does; they sometimes say, “It tells people where to go, doesn’t it?”—well, it does not tell people where to go very often. However, people recognise Citizens Advice, and I am concerned about the Money Advice Service spending its hard-earned money on building a brand that people will recognise. I would question the need to build yet another brand. Why not use a trusted brand to deliver money advice services on the high street?

I am pleased that there is more research on why people get into debt, and I do not think that the reasons have changed significantly over the years. As I have said, they include low income, sudden changes in income, changes in family circumstances, illness, divorce and so on. However, the type of credit that people access has changed. One form of credit that has exploded over the past five years is payday loans. There is evidence of people relying on that type of credit when they max out their credit card and have been denied other avenues of mainstream credit. They use their credit cards regularly to pay their bills.

Only this week I attended a fascinating presentation facilitated by the Centre for Responsible Credit on the international experience, particularly in the US, which is an interesting place, because different states have different regulatory regimes, so the way in which they work can be compared. The former secretary of the securities and banking council who presented the report was adamant that the sector needs to be regulated. He said that as an American citizen he is no fan of regulation, but that regulation needs to be enforced, and the regulator has to have the power to suspend companies where necessary.

I urge the Minister to consider the report and its conclusions, including limiting the number of roll-overs and a cooling-off period so that people cannot immediately take out another loan when the first one ends, then take out another one to pay off the second one. Evidence from Florida shows that capping the total amount that people can take out in any one period—for example, $500 in a year—improves their ability to pay back that loan. We asked whether that sent people into the hands of illegal lenders, but we were told that the average amount that people take out in loans in Florida is $388, which is quite a bit below the $500 limit. People do not max out their loans, which may mean that they do not go anywhere else. In California, however, where maximum loans are much lower at $250, people take out $249, which is evidence that they will look elsewhere quite quickly. It is an interesting report.

We should also consider setting up a real-time database owned by the regulator, but funded by payday loan companies, that stores basic data, including the number of loans and amounts, so that easy referrals for debt advice can be made.

[Damian Hinds (East Hampshire) (Con)]

Does the hon. Lady agree that the United States consumer credit market is rather different from the one in the United Kingdom? She is right to identify the difference between states, but another key difference is that there is no home credit market to speak of. There is a danger that if we over-regulate on payday lending we may shift that borrowing into other business models.

[Yvonne Fovargue]

I agree, but the disadvantages of the payday loan industry are greater than those in the home credit market, which is easier to regulate, because we can target it. The home credit market has been here for a long time—we all know the Provvy—and when I worked at a CAB, we could see when lenders were going around an estate, and we could talk to those consumers about that. If people get loans on the internet, or from high-street shops or over the phone, that is much more difficult to control.

We should consider a real-time database, because there is a lot of interesting data that could be gleaned from it. The regulator could very quickly look at companies acting illegally as a result of the information on the database. I recommend, too, the Smith Institute publication that was launched today, which is entitled, “A Nation Living On The Never-Never”. It includes a chapter by Damon Gibbons on learning from other countries. I agree: we are not the US or France, but there are things that we can learn, particularly because regulation is different in different states, so quite a lot of comparisons can be made.

That leads me into the need for debt advice, which should be free, independent and quality marked; should be funded in a sustainable way; and should meet the needs of all consumers, including the most vulnerable. Anyone who is in debt can be vulnerable. One of the most difficult cases that I saw involved an accountant, who had reached the stage where they could not open an envelope or answer the telephone. They needed the initial face-to-face advice so that someone could talk them through the situation and explain that they were not alone. They could then be referred to a telephone service and deal with things themselves, but the initial face-to-face advice had to be there.

[Gordon Banks]

My hon. Friend makes a forceful point. When a person is desperate and sitting at their computer searching for a solution, at that point they will embrace with open arms any organisation that responds to say that it can solve their problems, and they will jump into something that they might well regret. That is why the face-to-face advice is so important.

[Yvonne Fovargue]

I absolutely agree. My hon. Friend the Member for Stockton North had a point when he said that we need to look at Google. When someone googles “citizens advice debt advice”, they get the debt management companies, not Citizens Advice, because those companies can afford to pay for the ranking.

Finding debt advice is not like finding a plumber. It is not possible to go into the pub and say, “I’m in debt. Do you know a good company that can help me?” That just does not happen, because people are ashamed to admit that they are in debt. They go on the internet in the middle of the night or look through telephone books because they want the most anonymous way of finding help. That is why they can fall prey to dodgy debt management companies that do not offer the full range of debt solutions. I would probably need another hour to explain the complexity of the debt solutions and the need for a coherent system. I urge the Government to bring forward plans to implement a statutory debt management plan.

Debt management companies sometimes charge up-front fees, as has been said, and sometimes take the money before referring customers to not-for-profit providers. For the average debt of £30,000, the fees are £6,000 on average, which means the client takes a further 18 months to pay it off and the creditor has to wait a further 18 months. It is not good for either party.

Often people are unaware of the free alternatives, which is why I introduced a ten-minute rule Bill to try to level the playing field for not-for-profit providers, which put all their resources into providing advice and none of it into advertising. Since I introduced the Bill, I have received many more examples from across the country of companies ripping off clients—persuading them to take out secured loans or paying the creditors only small amounts, and then going into liquidation, taking the rest of the money. People were giving them continuous authority to take the money from their bank account, which can go on long after the debt should have been paid. However, there is currently no power to suspend such companies, even though the Office of Fair Trading knows that there is considerable consumer detriment. It can take up to two years to revoke a credit licence, because there is no limit on the number of appeals, and the short-term loans industry and fee-charging debt management companies rely on that. For some of them, their business model is to make a profit in two years and then go.

The landscape has completely changed for consumers. Both in the UK and internationally, self-regulation has been proven not to work. I realise that there is a one-in, one-out policy for regulation, but in this instance I urge the Minister to look holistically at the sector. There are so many new challenges and problems that it needs to be treated as a whole new area, rather than as an area that has been around for a long time. It is so different from even five years ago. I believe that we need to provide the necessary adequate regulations and enforcement, however many it takes, to ensure that our vulnerable consumers are not ripped off by the sharks who are profiting from desperation and despair.

15:58

[George Hollingbery (Meon Valley) (Con)]

I congratulate the hon. Member for Stockton North (Alex Cunningham) on securing this important debate and the hon. Member for Makerfield (Yvonne Fovargue), whom I followed on the occasion of our maiden speeches, on her speech. It is a particular pleasure to follow her today as she was so erudite and well informed as a consequence of her employment history.

Debt management and debt advice are important concerns even in relatively wealthy constituencies, such as mine. The latest report from our consumer advice bureau shows that debt advice is the No. 1 request it receives on a daily, weekly and annual basis. I do not want to trouble the House for long, but I want to raise an issue that many hon. Members have raised in the Chamber before. Questions on this matter have been asked before by the hon. Members for Great Grimsby (Austin Mitchell), for Ashfield (Gloria De Piero) and for Blaydon (Mr Anderson) and the right hon. Member for Delyn (Mr Hanson). The hon. Member for Westminster North (Ms Buck) has even introduced a private Member’s Bill on the matter. No doubt Mr Deputy Speaker will rule me out of order if the subject is not close enough to the motion before us, but I believe that the subject of bailiffs is important and germane to this debate, because many of my constituents and, I suspect, others rack up debts that they then have to refinance due to the bailiff system.

This is a complex argument, and there are two distinct sides to it. The BBC’s “Inside Out South West” made a programme on debt collectors last month, concluding that efficient debt collection—the threat of ultimate sanction—was important, particularly for small businesses, at this difficult stage of the economic cycle. My conversations with those closer to the Minister than I am, in the Ministry of Justice, suggest that that Department shares that concern.

On the other hand, all Members will have heard stories from many constituents about debts racked up because bailiffs’ charges have ended up way in excess of the original fine or charge. BBC’s “Watchdog” has done a great deal on the matter, and if one trawls the internet, one finds many websites that include lots of information and reflect a huge concern about the issue.

One or two of my constituents have been to see me about debt, and one who e-mailed me about a case then came to see me about her non-payment of council tax. She had missed just two £30 payments, and she knew she had, so she contacted the council to attempt to make arrangements—admittedly some months after she had missed those payments. She knew that it was her fault, but, after having her bailiff changed and trying to leave on an answerphone any number of messages to which there was never any reply, her bailiff was changed, somebody new arrived on her doorstep and she was presented with a bill for £642.

To many people that might not seem like a huge amount of money, but for my constituent it was completely insurmountable: she absolutely could not possibly pay that sort of money. We intervened, made arrangements for the local council and things were sorted out, but if we had not been there I hate to think where she would be. The answer is probably in the hands of the sort of debt management organisations that have been so well described today.

Another constituent failed to pay a parking ticket, and, after many months of dispute one way or another, with missed phone calls, missed letters and letters allegedly sent from bailiffs, she ended up with a bill for £500. A further constituent received a bill for £60 which escalated to £596. There is something plainly disproportionate about what happened in those cases. It is important that we have robust debt collection services, because we cannot allow people to rack up fines knowingly without any intention of paying them, but we have to look at the matter of proportionality, and I am worried about it.

My local citizens advice bureau has shown me two more cases that it has handled. It has one client who receives regular letters from a debt collection—bailiffs—company for her son who owes council tax, but he has not lived with her for five years, as she has made clear to the debt collection company any number of times. She has given the company her son’s address and phone number, but the letters keep on coming. She has also complained to the local authority, but it does not have the power to do anything.

The same bailiffs company persuaded another of my constituents to set up a direct debit to pay off arrears that she had run up some time ago, but the firm failed to collect the second payment, even though the direct debit was still set up. The company assured her that the direct debit was not set up, but bank records showed quite the opposite, and it has since charged her penalties for not paying an amount that it was supposed to collect and had a mandate to collect. That situation clearly cannot be allowed to continue.

This is a difficult issue, as I have already said. It is based on law, customs and practice from many years, if not many centuries, ago and there is clearly a need for reform. The previous Government did act on the matter, putting on the statute book the Tribunals, Courts and Enforcement Act 2007, to which my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) has referred. She mentioned section 5; my point is about section 3.

Section 3, as I am sure many Members will know, has not been enacted, but some progress has been made. There is an online certificated bailiff register, so debtors can check a bailiff’s status; all bailiffs now have to pass a Criminal Records Bureau check; and minimum training and skills are required for certification. But section 3 remains unenacted. It includes measures on when and how a bailiff or a High Court enforcement officer can enter a premises, what goods they can seize and sell, and what fees they can charge.

[Yvonne Fovargue]

I am glad that the hon. Gentleman mentions visits, because I have had two cases of bailiffs visiting a property, one in which they said, “You’ll be taken to prison and the child will be taken into care, and another in which they threatened to seize a pedigree puppy while a child was there. Some of their actions on visits are as bad as their letters.

[George Hollingbery]

A small trawl of the internet produces reports of any number of similar cases in which the circumstances are really quite horrifying. Vulnerable people standing on a doorstep, often surprised by the visit, can be bamboozled into doing all sorts of things. Indeed, in the parking ticket case that I mentioned, the lady was so upset by the situation, as was her neighbour, that the neighbour wrote out a cheque at that very moment to pay the £592 so that her friend’s car would not be taken away. These are unacceptable practices.

On taking office, the coalition said in its agreement:

“We will provide more protection against aggressive bailiffs and unreasonable charging orders, ensure that courts have the power to insist that repossession is always a last resort, and ban orders for sale on unsecured debts of less than £25,000.”

On 22 March this year, the hon. Member for Gedling (Vernon Coaker) asked a question of the Secretary of State for Justice about the timetable for consultation on the implementation of section 3 of the 2007 Act. He received this reply:

“The Government have given a commitment to provide more protection against aggressive bailiffs. We have identified options for public consultation on this commitment including the better regulation of bailiffs, the powers of bailiffs, their costs and how complaints should be dealt with. We are currently preparing the paper and intend to publish in spring 2011.”—[Official Report, 22 March 2011; Vol. 525, c. 971W.]

It is not spring 2011—it is early winter 2011—and that consultation is still not with us.

I must make it clear that I recognise that this is not an easy problem to solve. There needs to be a robust mechanism in place to enable those who are owed to collect outstanding debts from those who simply refuse to pay; all reasonable people would agree on that. Ministers are faced with serious difficulty in creating a scheme that has real teeth, but only as a last resort, without charges becoming hugely disproportionate. It is a fine balancing act, and I do not envy them the task. But if companies and taxing authorities do not have such schemes available, they could well face serious economic difficulties. It is not an easy task, and I can genuinely understand why making progress is difficult. That said, we have had promises and there is an expectation that something will happen. All I ask is that the Ministry of Justice—of course, the Minister who is with us today cannot respond on its behalf—provide some certainty for those in the industry and those who are subjected to bailiffs’ visits to ensure that we understand where we are going on this issue.

16:06

[Nic Dakin (Scunthorpe) (Lab)]

It is a pleasure to follow the hon. Member for Meon Valley (George Hollingbery), who made a very intelligent speech about controls on the use of bailiffs that is helpful in the context of the overall picture that we are looking at.

I congratulate my hon. Friend the Member for Stockton North (Alex Cunningham) on securing this debate, and I thank the Backbench Business Committee for allowing us the time for it. The debate is timely in two ways. First, as the Chancellor said this week, we face an economic storm. Families and individuals are facing rising energy prices, higher food prices, and rocketing fuel bills. Their incomes are being squeezed, and there is a real risk that more people will move into debt. Secondly, we are now in December, with the extra pressure of Christmas hitting household budgets. We do not want a debt hangover in the new year, with its awful consequences.

When someone summons up the courage to ask for help with dealing with their debts, they need to get the best possible support from people who will help them to clear those debts, not make matters worse. The hon. Member for Chatham and Aylesford (Tracey Crouch) clearly illustrated the dilemmas and problems, and the kinds of practices that unfortunately happen. At present, people who try to take responsibility for their debts can find themselves at the mercy of unhelpful, aggressive and sometimes unscrupulous practices that make dealing with debt an even more unbearable experience. In 2010, the high-cost credit industry lent £5 billion in the UK. Payday loans alone increased from £1.2 billion in 2009 to £1.9 billion in 2010. The UK now has one of the highest levels of personal debt in the world. In April 2011, the figure stood at a staggering £1,460 billion.

At this time, the future of debt advice is uncertain, with changes to eligibility for legal aid and the transfer of responsibility for debt advice to the Money Advice Service. It is important that the Government and the Money Advice Service confirm the future of the financial inclusion fund debt advice services as soon as possible, not just for next year but for future years. The funding from that is part of the overall funding of Citizens Advice services. There will be real risks if the critical mass of funding to provide advice is destabilised by further cuts in income at local or national level.

The FIF debt advice services are in their sixth year. They were deliberately located in areas such as Scunthorpe to meet the needs of communities that have difficulty accessing debt advice. Every year, those advice services have directly helped more than 100,000 people nationally to resolve their problems. Regular audits and evaluations have found high levels of customer satisfaction, with services exceeding clients’ expectations and effectively reaching their intended target group.

The provision of independent debt advice in my constituency is particularly worrying. The situation is in danger of being exacerbated by the changes to legal aid eligibility and reach. There are real worries about the availability and accessibility of future support. I fear that that is typical of the situation in many parts of the country.

If the FIF debt advice services cease, there will probably be no alternative sources of help. By definition, those services are used by people with very low incomes and limited means. Their inability to repay substantial amounts towards any consumer credit debt means that private sector debt management services do not see them as a profitable client group to serve. Research shows that there is little overlap and duplication between the national telephone advice services and the local FIF services. Clients often use local services on referral from other local agencies such as jobcentres, landlords and local authorities. Many of the people they serve have problems or communication needs that require support to be given face to face for it to be effective.

The quality of advice from many fee-charging debt management companies is questionable. Their fee structures mean that they get much of their income up-front. They are therefore not encouraged to work with their clients to help them manage their affairs and become debt free. A huge amount of those companies’ budgets is spent on advertising to draw in income from the indebted. That contrasts with companies such as the Consumer Credit Counselling Service and Payplan that use a “fair share” model to gain income. The incentive under that model is to work with creditors and the individual to make them better able to manage their money.

According to Citizens Advice, the majority of people in difficulty find themselves there due to changes in their life circumstances, such as death, divorce and redundancy. My hon. Friend the Member for Stockton North, in opening this debate, drew attention to research from the University of Nottingham that underlines that finding.

With all its experience, Citizens Advice highlights three principles for taking debt advice and management services forward. First, access to free and independent debt and money advice services is vital for those in financial difficulty. Such services need to be funded in a sustainable way and should meet the needs of all consumers, including the most vulnerable. Secondly, people in financial difficulties need better options to deal with their debts so that they are not drawn into using poor-quality debt management firms or taking on high-cost credit as a coping strategy. Thirdly, the consumer credit regulator needs stronger powers and more resources to prevent consumer detriment and to act more quickly and decisively to deal with problems. I will return to the point about regulation later.

There are other things that need to be looked at carefully. We have heard about misleading advertising. Many businesses claim that their services are free when they simply are not. Fees should be clear, understandable and highly visible from the start. At the same time, free services must be made equally obvious and clear. My hon. Friend the Member for Makerfield (Yvonne Fovargue) has introduced a ten-minute rule Bill to make advertisers signpost free advice. That is worth careful consideration.

Another issue is up-front fees. Debt management companies often front-load their charges, with customers paying several hundred pounds before they receive any advice. We need to consider whether up-front fees should be banned. We should also consider whether cold calling should be restricted.

The Office of Fair Trading lacks the resources proactively to monitor compliance by debt management companies. It has issued formal warnings to 129 firms out of the 172 that it has surveyed recently for compliance. We need to strengthen the regulatory framework. Across the House, there is recognition that this is an area in which the regulatory framework needs to be used. I draw attention to the comments of the hon. Member for Chatham and Aylesford, which made that point clear.

We can consider better control on firms entering the market, better scrutiny of business models and making the regime less reliant on enforcement action against firms that behave badly and more focused on preventing bad practice in the first place, so that bad firms do not get into the market. Consumer credit regulation needs to be strengthened, so that it has a deterrent power. At present, many firms are simply not sufficiently worried about action by the Office of Fair Trading to avoid unfair practices.

The regulator should be able to compel firms to compensate consumers for unfair practices, and there should be swifter enforcement against unfit firms. As my hon. Friend the Member for Makerfield said, firms that the OFT considers unfit to hold a credit licence can continue to trade and cause consumers harm for many years as a Jarndyce v. Jarndyce-type labyrinthine process is gone through in the courts. That is not to anybody’s benefit.

Interestingly, a large number of lenders in the UK are now US companies that have come here to take advantage of the lower level of regulation. Earlier this week I met an organisation called Veritec, which said that the market was very attractive to US companies at the moment because of the lack of regulation. Five of the seven largest UK companies in the sector started in the US. It is therefore right and proper that we look at practice in the US and how it has come to regulate this fast-expanding area of business since the problems in 2000 and 2001, particularly in the state of Florida. Those problems led it to introduce a regulatory framework that appears to have some attractions.

My hon. Friend has already drawn attention to the features of the Florida model: a maximum loan of $500—we could consider the maximum being a percentage of gross monthly income instead, but $500 is Florida’s model—limits on multiple loans, the stopping of any roll-over payments, a 24-hour cooling-off period between loans and finally, a very important ingredient, the real-time information system run by a private company and paid for by the credit companies, but accountable to and owned by the regulator. The database is funded by a transaction fee.

[Damian Hinds]

I am pleased to see that although it is the first of the new month, the hon. Gentleman has not taken the opportunity to make his face clean-shaven.

Will the hon. Gentleman acknowledge that the Florida measures apply specifically to payday loans, which do not account for the majority of the credit market or the majority of the debt problems in this country?

[Nic Dakin]

The moustache is having an encore for today and will be removed tomorrow.

The hon. Gentleman is right that the Florida measures apply to payday loans, but I believe that it is worth considering how that model can assist overall. Interestingly, by 2009, 6.8 million loans had been authorised in Florida, and not a single loan was extended beyond the contract period. More than 90% paid back their loan within 30 days and more than 70% repaid on the contract end day. Consumer complaints of mis-selling dropped significantly, as did overall indebtedness, and not one borrower was indebted by more than $500 at any given time. The Florida model may well not be the answer, but I ask the Minister to what extent the Government are drawing on practice elsewhere in the world, including in Florida and in France, which has also been mentioned, to help inform how we can move forward. I believe there is cross-party consensus about the need to regulate, and as the hon. Gentleman indicated, it is horses for courses—the Florida model covers payday lending, but there are other issues to consider.

[Yvonne Fovargue]

The other advantage of the independent database owned by the regulator is that if anyone researches a credit reference agency database, it does not show who has been on the payday lending database. When people move from payday lending to more established forms of credit, as we hope they will, their credit reference is not affected by the fact that they have had a payday loan, or maybe 10 payday loans.

[Nic Dakin]

My hon. Friend makes a significant point. The devil is in the detail—I can see that the Minister is nodding. We should learn from practice elsewhere that can better assist us. It is clear that practices in some US states have created unforeseen difficulties, so there is something to learn from what works well and what does not.

I should like the Minister to address certain questions when he speaks. Will he confirm that the Government recognise the need for sustainable face-to-face debt advice provision for people who get into significant debt difficulty? Will he confirm that the Government will ensure that funding is available for that in future?

Will the Minister take steps to eliminate misleading advertising of debt advice and to abolish the practice of debt management companies charging huge up-front fees, which results in perverse commercial incentives? Will he recognise that a consensus has been expressed by Members on both sides of the House that debt advice and debt management needs to be regulated? Such regulation should not be compromised by the one-in, one-out rule, however reasonable that aspiration is. Regulation is necessary if we are to have better activity. If we do not regulate soon, we will have consequences that we would rather not have.

Finally, will the Minister confirm that he will learn from practice elsewhere in the world? I am sure he will because he is very much into learning from others.

16:21

[Lorely Burt (Solihull) (LD)]

I congratulate the hon. Member for Stockton North (Alex Cunningham) on securing this debate and on his excellent contribution, in which he referred to the Consumer Credit Counselling Service report. The problem is enormous: 6.2 million households are financially vulnerable, of which 3.2 million are already in financial difficulty.

There is consensus on both sides of the House that debt advice is a distress purchase. People do not shop around. If they hear of somebody who can help them, they will grasp at the opportunity. There is an “any port in a storm” mentality. I was particularly taken by what the hon. Member for Makerfield (Yvonne Fovargue) said on getting to people before they join the 3.2 million who are already struggling, because help can be afforded to them at that stage.

We have talked about who offers debt advice. Citizens advice bureaux do a wonderful job, and work with the CCCS and Payplan, which are the two free advice services. The important distinction between pay advice companies and free advice companies is that the former are funded by creditors through a fair-share system. When the debt is paid off, the company that has managed to secure the payment receives a commission or contribution. That is important. We have heard about CCCS, which is partnered with Citizens Advice, and the Money Advice Trust, a debt line that will co-ordinate the best debt advice, but the problem, to which several hon. Members have alluded, is that there is not enough information out there for those desperate people when they can really benefit from the help.

Let us look at the pay debt management companies. All the money comes from the customer—the person who is in debt. The balance of their interest comes from getting the fees. Under the fair-share system, the interest is only in ensuring that the payments are paid back because companies do not benefit unless the debt is recovered.

The structure of these fees is also of concern. Not all companies charge an up-front payment, but some will charge hundreds of pounds before they have even looked at a case. Regular commission comes from the person who is making the payments back, and that just makes the problems worse. As I mentioned earlier, what is recommended further down the line is very often something that should have been recommended in the first place. These companies all favour solutions that make them money, so they go for the debt management plan and for the individual voluntary arrangements. Very few offer debt relief orders, which are a key insolvency tool for people with few assets and low incomes.

Although many Members in this Chamber would argue that there is no place for these pay debt management companies, it is important that we consider their case and what they have to offer. The Debt Managers Standards Association, which is one of the two trade bodies, told me that its members, the good companies, offer face-to-face meetings and professional help. They will also negotiate with the debtors. It says that those companies provide that service because they are being paid.

On the other side of the coin, Consumer Focus, which was responding to the Office of Fair Trading report into the debt management sector this year, said:

“On the basis of the OFT review, fee-charging debt management is a market which, at the moment, is largely failing consumers.”

We have heard about the rogue debt management companies and about the number of complaints that are made against them. Interestingly, people do not necessarily go to the regulator about such companies. They tend to go to the citizens advice bureau because they see it as their friend on the high street; the place where they can go to get face-to-face advice.

There are examples of companies that hold on to payments and then go into liquidation. Whatever else we do, we must tackle those rogue companies. Several Members today have called for those companies to be suspended. As soon as we discover that they are misbehaving, they must be suspended there and then before they have the time to wreak havoc and do even further damage.

As the OFT licenses debt management companies, it has certain responsibilities. Last year, it launched a crackdown, issuing warnings to 129 companies, 35 of which threw in the towel straight away. They knew that the game was up and they were not going to be able to make the sort of money that they wanted to.

Although the OFT has teeth, it could do more to regulate such companies. It is strapped for money, so it is unable to give the kind of service that it wants to give. In October, DEMSA agreed in principle that the Institute of Chartered Accountants should undertake monitoring of new and existing DEMSA members. DEMSA has an OFT-approved code of practice, so it is doing its best to clear up the industry and to provide a fair service to customers. At the end of the day, if a company rips off a customer, then they cannot pay. It is in everyone’s interests to clean up the industry.

I want to consider the options available. We could close down debt management companies altogether, but that would be illiberal and take away a service that is of help to many people in the country. Furthermore, of course, those people would simply go elsewhere. Where would they go? They could go to organisations such as the Consumer Credit Counselling Service. On the other hand, however, they might go elsewhere, including to a loan shark. If they are to use debt management companies, therefore, it is important that they have the protection that we all wish for.

Alternatively, we could work with the debt management companies. As suggested by the Debt Resolution Forum, we could require other companies to subscribe to the DEMSA code of practice and to auditing by the Institute of Chartered Accountants. My favourite option, however, would be to strengthen the OFT so that it can use its existing powers to levy a fee on debt management companies to pay for them to be audited. To ensure that it was not prohibitive for small debt management companies, the fee could be related to the number of debts under management at any one time. Consequently, the big companies would pay a larger share, and that would strengthen the OFT and enable it to do what it wants to do—ensure that these companies are properly audited.

The only other alternative is formal regulation, which could be done under existing statutory legislation. I was interested in the comments of the hon. Member for Stourbridge (Margot James) about the report from the Business, Innovation and Skills Committee, and it would be helpful to take an intensive look at the matter and establish whether regulation could provide a workable solution. People’s lives are at stake here. We could not be considering a more important issue that is able to make a difference to the quality of life of indebted people.

16:32

[Justin Tomlinson (North Swindon) (Con)]

It is a pleasure to follow my hon. Friend the Member for Solihull (Lorely Burt), who has been a long-standing champion for this issue. I congratulate the hon. Member for Stockton North (Alex Cunningham) on securing this important debate on a subject in which I take a particular interest—I supported the ten-minute rule Bill introduced by the hon. Member for Makerfield (Yvonne Fovargue) and have spoken in several connected debates.

This issue is important because 91% of people in financial difficulty feel that with better information and advice they would have made different decisions. Members of Parliament know through their casework of the distress in which individuals find themselves, and in times of financial difficulties their needs are even more urgent. These people do not necessarily have the time to shop around and make informed decisions, and many people get into financial distress following a significant change in their circumstances, whether it is a job loss, bereavement, illness or family breakdown. At such moments, they are not necessarily in the strongest position to address the challenges that they face.

I wish to highlight a number of issues. First, I have been a long-standing champion for the improvement of financial education, and I shall take this opportunity to plug my ongoing campaign. We need to equip people of all ages in this country with the key skills that enable them to make these important decisions, and I shall continue to press for that at every opportunity. The total costs of the decisions that people make are not necessarily displayed in a format that they understand—in plain, good old-fashioned cash terms.

[Andrew Bingham (High Peak) (Con)]

With his usual modesty, my hon. Friend just briefly mentioned the campaign for financial education in schools, on which he has led the way in the House—I think that the all-party group on financial education for young people, which he set up, is the largest in the House. Does he agree that financial education is very important to tackling the problem in the long run, particularly given that there are now so many different ways in which people can purchase things and borrow money? This education is crucial for future generations.

[Justin Tomlinson]

I thank my hon. Friend for that intervention. He has been extremely supportive of our ongoing campaign. One of the driving forces behind our desire for compulsory financial education is the fact that we live in a challenging, complex world, where individual consumers are all too often bombarded by unhelpful marketing messages. Equipping consumers to enable them to pick their way through that minefield would make a big difference.

We are also seeing products becoming available that have complex terms and conditions—again preventing consumers from making informed decisions—and for which the consequences of defaulting are not clearly set out. The up-front and administration fees are not clearly shown, and too many consumers are making monthly payments to such companies without clearing the original debt for which they turned to them to get help. We have also seen misleading company names and advertisements. People in financial distress are under pressure from the companies to which they owe money. They feel obliged to make a quick decision, so when companies contact them to say, “We can sort this out. You just need to say yes in this phone call and we’ll get these people off your back,” it can be very attractive. We have seen excessive amounts of cold calling and dishonest texting. I agree with the request that the hon. Member for Stockton North (Alex Cunningham) made to ban such practices—I am certainly someone who is sick and tired of receiving unwanted calls and text messages. A number of hon. Members also referred to Google rankings, whereby people innocently type in “free debt advice” and are bombarded with the complete opposite. I would recommend that the Minister look at that.

I welcome the OFT’s revised guidelines, which set out the standards and expectations of debt management companies, making it clear that they must be transparent about the service on offer and the fees charged, to ensure that the advice provided is in the best interests of the consumer. It is clear that the Government—especially the Minister, who has shown a great interest in this subject—and the OFT are seeking to make a difference. However, I have a number of questions for the Minister, which I hope he will respond to when he wraps up. Some 129 businesses have already been warned, 69 of which have now exited the debt management market. Does he consider that a success?

Secondly, the process can take up to two years. What can be done to speed it up? As the hon. Member for Makerfield pointed out, not only can those businesses inflict huge damage to the most vulnerable consumers in two years, but for some of them, their whole business plan is geared towards being around for only two years and making as much money in that time as they can. I have spoken to the Consumer Credit Counselling Service, which told me that many such companies are also fleet of foot. As soon as we knock them off in one form, they reappear in another. My final question on the issue is this: how easy is it to identify some of the online operators? If they are on the high street, with nice big shiny signs above their shop doors, it is obviously easy to identify and tackle them. However, many such companies operate online, making it difficult to track them down. Is that stopping the clock ticking in terms of action being delivered?

All those who have spoken today have promoted making available free, independent debt advice—which I, too, support. I welcome the increased content available online, but we must remember that a significant number of the most vulnerable consumers—the people we will see coming into our surgeries—still rely on individually tailored, face-to-face or telephone sessions to help. I pay tribute to organisations such as Citizens Advice and the CCCS, which provide fantastic, individually tailored, free advice sessions. Those sessions are essential, because vulnerable consumers, with their individual circumstances, need somebody with the patience to go through things with them. All too often they are people who, through fear of what they are encountering, have not opened their post. They need someone to sit down with them, because online advice relies on people to know their own situation, which all too often is not the case.

People might also feel the need to make a quick decision because the people to whom they owe the money are chasing them. A debt management company might say, “Just say yes on the phone and I’ll sort all those problems out.” When confronted with a bag of unopened post, people need somebody to help by saying, “We’ll sit down with you and get to a position where you can make a quick response.” Also, advice sessions will always take account of people’s individual circumstances, because every person is different—every person has different priorities and different amounts of debt—and will help them take the best possible course of action for their circumstances.

I welcome the Government’s commitment to secure the £27 million-worth of additional funding for the next year, but we need a long-term commitment, which is what the Money Advice Service is exploring. I urge it to continue and find what it is looking for, as this is so important. In these difficult and constrained financial times, this is an absolute priority, which I shall continue to support.

I would go further than some other speakers who talked about the need to provide access for free and independent advice. Just as we insist on having a Government health warning on all packets of cigarettes, I would like to see information published about how to access the free independent advice so that people can take a few moments out and contact those who can assist them. Too often, we have seen some of these debt management companies create spurious charities, whose people then provide the “independent advice” when they are, in fact, just subsidiaries of the company that is going after the business in the first place. Some have said that they did not want to get rid of this market completely, but wanted to be confident that every single consumer has easy access to the free and independent advice that we all believe is so important.

Finally, I want to explain how we can make a difference as individual Members of Parliament. Organisations such as Citizens Advice are under a lot of pressure: only a limited amount of funding is available and only so much time can be given to consumers who are in financial distress—effectively in a last-chance saloon—and need a quick response. When approached by R3, Citizens Advice and Nationwide, we carried out a training day, involving me as MP and all the staff in my constituency office. We were trained on how best to deal with people in financial distress. We were able to phone up the local citizens advice bureau and arrange an emergency appointment the following day, where people could benefit from a one-hour session. It provided an opportunity to sit down with the individual in advance and say, “This is what you need to bring to your session tomorrow”. The maximum help possible was provided in that one-hour session. All too often, consumers turn up at the last chance saloon without having all the information they need, which makes it difficult to give them the practical advice they need. I have been assured by both Citizens Advice and the Consumer Credit Counselling Service that they will happily provide similar training for all MPs. That shows how we can take this up to make a positive difference.

16:41

[Damian Hinds (East Hampshire) (Con)]

I congratulate the hon. Member for Stockton North (Alex Cunningham) and my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on securing this important debate, and I thank the Backbench Business Committee for granting the time.

With almost £1.5 trillion of personal debt in the country and £200 billion of unsecured consumer lending, debt can clearly be a problem at all levels of society. In common with others who have spoken, I am particularly concerned about the less well-off members of society accessing sub-prime and high-cost credit. It is worth reminding ourselves that although to many opinion formers, journalists and others, this is a relatively hidden market, it is not at all a small one. The leader in home credit provision claims to visit one in 20 UK households every week. The leader in the rent-to-own sector has almost 250 stores and hopes to double that number. Payday Loans—as we have heard, a relative newcomer on the scene—already has between 1 million and 2 million customers a year.

Most people who look at this issue end up concluding that we need a three-pronged strategy to deal with it. The first is about education and advice, both before the fact and when people get into trouble; the second is about smart regulation, including disclosure to make it obvious to people what they are taking on; the third is the provision of alternatives. All three are vital, either directly or indirectly, to the provision of debt management advice—directly because advice is one prong, and indirectly because they impact on the need to have that advice. I shall talk briefly about these three in reverse order.

Starting with alternatives, hon. Members will not be surprised to hear me mention the importance of credit unions. Credit is a fact of life. Although we all occasionally meet people who say, “Well, if you haven’t got much money, you shouldn’t borrow”, the fact of the matter is that it happens at every level of society to help people get through the ups and downs of life. Childbirth and Christmas can happen to anybody—[Interruption.] I accept that childbirth is unlikely to happen to me. We need affordable and responsible lenders to operate in the market. Credit unions provide affordable loans, promote financial inclusion, get more people to have bank accounts, which has a big knock-on effect, and encourage savings. With savings, people are much less likely to find themselves getting into debt problems later.

I congratulate both the current Government and their predecessor on their support for the credit union sector. They have taken different but equally positive approaches. The new legislative reform order will mean the liberalisation and potential growth of the sector; the coalition’s £73 million modernisation fund will help it to become self-sustaining over the medium term; there is a possibility of its working with the post office network—for instance, introducing “jam jar” budgeting accounts—and there are many other interesting and exciting opportunities.

Many Members have spoken about aspects of regulation. This is clearly not the occasion on which to go into detail about the regulation of the high-cost and sub-prime credit markets, because we do not have enough time, but I should like to touch on some key points. Other Members have mentioned the potential for caps on the cost of credit. At times during our debates about this subject in the Chamber it has seemed that there may be a simple answer to the problem, but there is not.

A blunt and general cap on the cost of credit would have few positive results and many negative ones. It would, for example, push a large number of people out of the legal credit market and into the arms of those whose idea of a late-payment penalty is a cigarette burn on the forearm. It remains true, however, that some form of usury limit exists both in the European tradition, in countries such as France, Germany and Italy, and in the Anglo-Saxon tradition, in countries such as Australia and Canada and—as we heard earlier—many American states. That does not mean that they are all correct and we are wrong, but it should at least make us ask, as the hon. Member for Makerfield (Yvonne Fovargue) did earlier, what we can learn from abroad. I know that the Minister and the Government as a whole are keen on that idea. A variable cap may well be possible, and I know that Bristol academics are considering that as we speak. I have my own particular hobby horse: I think that a limit to the annual interest rate and a separate one-off introductory or set-up fee, also limited, would be a successful formula.

Members have mentioned the way in which debt mounts up as a result of rollovers and the accumulation of behavioural problems, and that too needs to be considered. Perhaps most important of all is the need to ensure that debt is affordable by imposing a requirement to that effect on lenders. The hon. Member for Makerfield mentioned the Centre for Responsible Credit. She and I attended the launch of a report that laid bare the massive difference between the affordability of credit at the high-cost or sub-prime end of the market and its affordability at the mainstream end.

In some American states there is a requirement for operators to pool data with a central agency. That is specifically in the payday sector—the distinction is important—but in any case I do not think that there would be any appetite for such an operation in this country. It does not accord with our way of doing things, and even if it did, there would be huge IT problems, My God, imagine trying to hook up every sub-prime and high-cost credit provider in this country—not just in the payday sector—into a database. It would be a nightmare, and the fact that the credit reference system seems to work so poorly at present—some people have eight, nine or 10 loans by the time they seek help from the likes of the Consumer Credit Counselling Service—does not bode particularly well. There may be possibilities, however.

[John Pugh (Southport) (LD)]

The hon. Gentleman’s speech is teaching me a great deal, but is he implying that debts can be affordable without a usury cap, or that a usury cap is necessary for them to be affordable?

[Damian Hinds]

Obviously credit can be affordable without a usury cap. It depends on the price that is set. I am increasingly of the view that there probably is room for some form of cap, but that it should not be a blunt and general cap that would have all sorts of unintended consequences. As I said a moment ago, I do not believe that there would be any appetite in this country for an enormous central database storing credit transactions involving every conceivable type of provider and every single citizen of the United Kingdom so that loan applications could be compared with earlier ones.

Affordability is now a principle in the OFT guidelines. There is an argument that lenders should have a general duty of care to make reasonable efforts to ensure that the loans they provide are affordable to the consumer, and also that the loan does, indeed, get paid down over time.

[Yvonne Fovargue]

At present, however, even the most up-to-date credit reference agency updates only once a fortnight. My constituent who took out six payday loans in a day would not be stopped by that. Most of our payday lenders come over from America, where they are registered with one agency that regulates only payday loans as a short-term means of lending.

[Damian Hinds]

That is a perfectly legitimate and credible line of argument. The hon. Lady mentioned, however, that the payday lending market barely existed in this country five years ago. There are many other high-cost forms of credit, so this market has a remarkable ability to shapeshift, and targeting just one sector will result in the growth of other sectors. Not all the states in America have the payday loans regulations the hon. Lady mentioned, but those that do have experienced growth in other areas of lending, such as rent-to-own loans. Somebody always picks up the slack in the market, therefore. I am not arguing against all regulation, but I am arguing that what appear to be easy and general solutions are usually ineffective.

Education and advice are essential. Some people would say that the best advice on debt that we could give to individuals—or to Governments—is, “Don’t.” To be a little more nuanced, we could say that capital spending—people investing in themselves through investing in their education, their home or a car that will help them get to work—is a legitimate reason to incur debt, whereas current spend is usually to be avoided unless people can be confident they will be able to pay the money back. In other words, people must ensure that in the ups and downs of life there are not only downs, but an up will come, too. We might call that a golden role. Opposition Members will recognise that term, and they will also appreciate how important it is to stick to the golden rule and not change it part way through.

My hon. Friend the Member for North Swindon (Justin Tomlinson) has done amazing work not only in running the all-party group on financial education for young people but in raising the profile of this issue. I agree that young people must be equipped with the necessary skills for when they enter adulthood and the marketplace, and I believe the best way to do that is through maths, because if people understand percentages and so forth, they can assess all sorts of financial products. If schools and society are doing their job well, people will understand their self-responsibility too, which is also very important.

There will always be a need for a backstop solution for when things go wrong and I believe that debt counselling and advice should be mainly industry-funded. It must also be available through all channels—online, telephone and face to face. However, we must accept that face-to-face advice is massively more costly than the other channels. The hon. Member for Stockton North cited Citizens Advice cost-benefit analysis figures in respect of debt advice, but they are slightly exaggerated as they represent not the return to the Exchequer, but a much broader view of cost-benefit analysis taking account of the benefit to the economy. We must accept that face-to-face advice is costly, but, as my hon. Friend the Member for North Swindon rightly pointed out, it is essential to have that provision as it is important for some of the most vulnerable members of society. I am delighted that the Money Advice Service is focusing on how it can improve productivity—the case load throughput per person—in order to make face-to-face advice more affordable.

There is a role for debt management companies. There are hundreds of them and we must not over-generalise. On the other hand, a considerable number of them have got into trouble with the OFT, which suggests there might be a systemic problem in the sector. It is worth bearing in mind the circumstances of the customer that a fee-paying DMC will take on. They are, as has been said, typically not letter-openers. They often have unrealistic optimism about how the circumstances of their lives are about to change and turn around and, conversely, they have an enormous myopia about fixing today’s problem and today’s bills rather than looking at how to lay down long-term foundations. They are, almost by definition, quite easily swayed by good advertising—usually by either the first ad they see or the last. That all means that they are quite susceptible to the offer of an apparently easy solution whereby somebody else will take on the administrative burden and deal with the range of creditors on their behalf and they will focus on the smallness of the monthly payments rather than on how the alleged solution will bring them into long-term financial health.

That means, in turn, that the successful companies in the sphere tend to be those with the biggest marketing spend, the biggest promises, the longest repayment term on the loan and therefore the highest conversion rates. Although they will have a substantial drop-out rate, it does not matter so much if they have charged up-front fees that mean that they have ensured that their cash flow is safe. I hear from my excellent citizens advice service in East Hampshire that debt management companies all too often fail to consider the consumer’s overall position, the priority debts that they must pay first and their ability to pay back the loan schedule.

[Yvonne Fovargue]

The hon. Gentleman might be interested in a text that a colleague has just received—the Minister might be interested, too. It is cold calling from a debt management company and says that there is new legislation that means that debts can be written off. Is the Minister aware of introducing that new legislation? That is how people get drawn into the debt management companies.

[Damian Hinds]

Indeed. Remarkably, the hon. Lady might even discover that such texts seem to come from the Government on occasion. For the avoidance of doubt, let me state that they do not. Those are the sorts of tricks and ploys that are played, with a lot of subtle suggestions without saying anything. We probably know people who are not generally credulous who, from time to time, receive such a thing and take it as genuine.

I apologise for being almost boring in the extent to which I am going to agree with all previous speakers—[Hon. Members: “No!”] You are too kind. There is a remarkable degree of consensus among Members from all parties. Cold calling and canvassing for such businesses have no place in a responsible marketplace. The front-loading of fees sets apart the true interests of the customer and the provider. Although banning it might be excessive, we need to get rid of the front-loading and ensure that the operator has an incentive to see the individual through to financial security.

Finally, on search marketing and the extent to which people are actively searching for debt advice rather than being bombarded with marketing messages, I do not think we need to wait for a law or new regulation. There is only one substantial operator in that market. It is called Google and I am sure it has a corporate social responsibility department. I hope that it will read the transcript of the debate and take it on itself to ensure that although it will suffer some diminution in pay-per-click marketing fees, it can put free, respected and valued debt advice services at the very top of the list of the results when people search.

16:58

[Nick Boles (Grantham and Stamford) (Con)]

This has been a fascinating debate and I congratulate the hon. Member for Stockton North (Alex Cunningham) and my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on managing to secure it now, in a week when we have learned from the Office for Budget Responsibility, the Institute for Fiscal Studies and others that real disposable incomes for most people in Britain will not rise much in the next few years.

We all know, through our own experiences and those of the people we represent, the extent to which unavoidable costs such as filling one’s car, paying a heating bill or doing the weekly shop are going up. As a result, I fear that many more people will find that the sums just do not add up at the end of every week or month and that they cannot pay every bill on time. It is particularly important therefore that we anticipate now, in the next few months, the rising demand for debt management advice and work out how to protect the people who need to call on that advice.

Many hon. Members are great experts on aspects of this problem. My hon. Friend the Member for East Hampshire (Damian Hinds) is a great expert on credit unions, my hon. Friend the Member for North Swindon (Justin Tomlinson) is a great expert on financial advice and the hon. Member for Makerfield (Yvonne Fovargue) seems to be a great expert on everything to do with financial understanding. My interest in this subject comes from my constituency. I am lucky enough to represent the 750 people who work for Payplan in Grantham, which is an extraordinary business. It is important to understand that it is a business—a very valuable business—that does very well at making money. It does so by providing free debt management advice to troubled debtors and taking a fair share of contributions from creditors.

Payplan has demonstrated, along with the Consumer Credit Counselling Service and a few others, that it is an entirely commercial proposition to offer people advice based on the contributions received from creditors. It absolutely is not necessary to charge consumers for that advice in order to build a valuable business and make decent and respectable profits. Payplan is a partner of the Money Advice Trust and works closely with Citizens Advice and the National Debtline. I have run small businesses and I have many friends and colleagues who work in businesses, and I have not come across a business that makes as much money as Payplan does by doing as much good, so I am immensely proud to represent it and its employees.

The key question I want to address is the one at the heart of the debt management advice industry: what is the right economic model for that industry and should we be willing to intervene as a Government to change or specify that model? I go along with a view put forward by other hon. Members, particularly by those on the Government side, although my Lincolnshire colleague the hon. Member for Scunthorpe (Nic Dakin) also seemed to be of the same view. I am innately—I do not require the hon. Gentleman to go along with this—an economic liberal, like the Minister. I start off being sceptical of state intervention and I require that people demonstrate to me that a market failure is both obvious and substantial. I was therefore very happy, when a number of us met the Minister to discuss these issues a few months ago, to take his suggestion and look at whether there was a non-regulatory way of trying to fix the problem of cowboy companies gouging vulnerable debtors with huge fees up front and failing to fix their fundamental, underlying problem.

I was happy to look at whether there were alternative ways of dealing with the problem, and I set up a meeting with the excellent people who work in what has become known as the nudge unit at No. 10 Downing street. They are some of the most terrifyingly clever people one could hope to come across, and they are advised by one of the two authors of the original book, “Nudge”, who advise the Government on this issue. At the end of an hour in Portcullis house during which I fuelled them copiously with coffee because I knew that I would be able to make no other contribution to their deliberations, they reluctantly concluded—I think they were genuinely reluctant—that there was no obvious way of nudging this category of consumers.

Hon. Members have talked about the consumers in question, and about their state of mind and character. My hon. Friend the Member for East Hampshire described them, and while he was doing so I realised that he could have been describing me. There was the tendency to respond to advertising, and the unwillingness to open letters. Certainly, we Members of Parliament all feel, when we get personal letters, that we have had enough letters in the week. He missed out one vital element that certainly describes me: the total brain-freeze that seizes a person whenever they have to consider their personal finances. Last year, on my election to the House, I forced myself, for the first time, to draw up a budget for the year, and it is not a process that I intend to repeat soon.

We can all understand that for a person on a much lower income than any of us in the Chamber, and for a person whose costs were much more unforgiving than ours, it would be much more difficult to make a purely rational decision. They would be much less likely to ask themselves, “How is it that these people are able to do all this for free? Where will they send that money in the first few months? How quickly will my debts go down, and will they go down as quickly as they would if I went to another provider?”. It is simply unrealistic to expect consumers of that kind, in that situation, to go through the right process of questioning.

Is there a way of making sure that those consumers are at least fully aware of, and given all the required information about, the alternatives on offer? People have talked about Google, and requiring companies that charge consumers to mention the free advice systems. The difficulty is that there is almost no nudge that will overwhelm the advertising that could be funded by the huge fees that companies get. Even Google—a company that I admire greatly, and that is generally very keen to be socially responsible—will find it hard, on its own, to overwhelm the marketing brilliance of commercial operations that have a certain ruthlessness in their approach. As a result, I—and, more importantly, the nudge unit at No. 10—reluctantly concluded that there was no nudge available that would do the job.

As an economic liberal, I then forced myself to go to the next stage, and ask: is this market failure substantial, and is it obvious? I think that the answer is yes on both counts. It is substantial because the disparity between the information available to the consumer and the information available to the person selling to them is great. There are all sorts of areas where all of us, across the House, accept that that is the case, and that regulation is therefore necessary.

We believe, by and large, that it is important for consumers to know up front that cars have certain safety mechanisms in them, because most of us are not sufficiently well versed in checking for ourselves whether a car’s brakes fulfil the standards. We have myriad building regulations because we do not believe that consumers building, buying or moving into houses have any possibility of second-guessing whether the plumbing system will work, or blow up beneath them. We do the same with boilers, and with health care: we expect and require anybody providing laser eye surgery, or any other kind of operation, to be subject to specific regulations, because consumers cannot possibly second-guess whether those products are being provided safely. I would argue that the same applies to the consumers, and the product, that we are talking about.

We reached that conclusion a number of years ago in relation to other financial services. We decided that it was essential to regulate the fees that could be charged by independent financial advisers offering people mortgage, pension or endowment policies and products, for very similar reasons—we did not think that consumers would have the ability or information to assess whether fees were fair. Financial products are innately complicated, and we long ago concluded that consumers needed to be protected from the sharp practices of some providers.

What should the Government do? In the debate, two approaches have been proposed. The reluctance to regulate in a crude way is so deeply instilled in Government Members that they have proposed audits and restrictions on the percentage of fees that can be charged up front, on cold calls and on the worst practices of debt management companies that charge consumer fees. Listening to the debate—and I have genuinely changed my view slightly during it—I have come to the conclusion that going down that route would require enormous expenditure on regulation and enforcement. If we had to enforce measures on cold calls and on auditing everyone, as well as measures on the exact proportion of the fee taken from the repayment in a number of months, that would require such huge expenditure in the Office of Fair Trading that I fear it would be unrealistic.

I have concluded—no doubt the Minister will change my views yet again—that there is a simpler approach. We should take that spectacularly successful commercial model—fair-shares funding by creditors—and make it compulsory for any debt management company to make its money in that way.

[Alex Cunningham]

I have a simple question for the hon. Gentleman. Does he really believe that cold calling should still be allowed?

[Nick Boles]

I do not. I think that cold calling is a terrible idea, but I have good news for the hon. Gentleman: cold calling will die out automatically if all debt management companies follow the fair-shares model. There is not sufficient revenue available from the creditors to fund any of those dodgy marketing practices. That is why CCCS and Payplan do not indulge in those practices. To some extent, we are not here to save one commercial company and not another one, but they do not do so because their fair-share payments from the creditors do not make that possible. It is only because the fee-charging companies charge such huge up-front fees to consumers that they can afford to spend all that money to get them in in the first place.

The good news is that those bad practices would die out. On the other hand, we would have to do something else: we could not just require debt management companies to operate on that model. We would have to require creditors to make it available to all debt management companies, because none of us is in the business of somehow skewing the market towards one or two providers. We would have to require the creditors to offer that to any company that passed the basic regulatory requirements.

I understand that that would be a big step for any Government. The good news is that the legislation is already in place. The Tribunals, Courts and Enforcement Act 2007 is already on the statute book. Part 5, which envisaged setting up regulations for debt management advice, has never been activated, because a commencement order has not been laid. My final suggestion to the Minister is that the Government should bite the bullet and lay that commencement order. They should introduce a simple regulation to enable strong, competitive and profitable commercial providers of debt management advice to flourish by offering advice funded by fair shares from creditors, thereby ensuring that the interests of some of the most vulnerable in our society at some of the most worrying times in their life are protected.

15:59

[Ian Murray (Edinburgh South) (Lab)]

This afternoon’s debate has shown the passion of Members across the Chamber about this important subject. I congratulate my hon. Friend the Member for Stockton North (Alex Cunningham) and the hon. Member for Chatham and Aylesford (Tracey Crouch) on securing the debate through the Backbench Business Committee and pay particular tribute to my hon. Friends the Members for Makerfield (Yvonne Fovargue) and for Darlington (Mrs Chapman), who is not in her place, for doing so much to highlight concerns about debt advice and debt management. They are all strong advocates for their constituents, dogged campaigners and great champions of free debt advisory services such as Citizens Advice. We must put on the record our thanks to them for bringing such important information before the House.

Every life blighted by the spectre of debt is one too many. The human and family cost of uncontrollable debt should not be underestimated. The debate is often couched in terms of numbers and regulations, as we have heard this afternoon, but we must not lose sight of the fact that debt can often cost relationships, employment and, tragically, lives.

We come to the House this afternoon at a time of great economic uncertainty, which makes the debate even more important. Inflation stands at 5% and the sustained squeeze on wages has left many struggling to pay everyday bills, heat their homes and buy essentials. With Christmas around the corner, families will be under even more pressure as a result of financial worries.

Many consumers have got into debt by borrowing via credit cards, finance deals, overdrafts and unsecured personal loans. In numerous cases, as we have heard this afternoon, that is not down to reckless spending or people living beyond their means; too often it is due to the harsh reality of rising living costs. A recent survey found that such costs alone may force 71% of UK consumers to use savings, credit cards or overdrafts in order to meet the cost of bills—the trap of using debt to service debt. For others, it is down to a shock in their personal lives, such as unemployment, divorce, bereavement or ill health, and there is evidence that around half the people with debt problems are in that predicament because of some such tragic life event. That shows that the spectre of debt could fall on any of us at any time, as the hon. Member for Grantham and Stamford (Nick Boles) explained earlier.

There are numerous types of debt, from bank loans and overdrafts to credit cards and finance agreements, but one of the largest increases in indebtedness is due to debt to Government Departments and agencies, which has not been mentioned today. That includes those who have accrued arrears in council tax, benefit overpayments, payments to the Child Support Agency or Her Majesty’s Revenue and Customs, and even TV licences. Most concerning of all is the number of people with high-cost credit debt who are seeking advice. Debt due to loans from payday and high street lenders has rocketed in the past 12 months. The Money Advice Trust alone has seen the number of calls it receives increase from 200 a week to 1,000. That is hardly surprising, given that it is impossible to watch daytime television without being swamped by TV adverts offering easy high-cost credit on the high street or internet.

What happens to people when they fall into financial difficulties? Debt advice plays a critical role in helping to manage financial difficulties, but often people feel that accessing advice is stigmatising. Indeed, many fall into difficulty because of a lack of financial education. We should give a strong commitment to include financial education as part of the national curriculum in order to resolve some of today’s problems tomorrow. An e-petition started by Martin Lewis of MoneySavingExpert has received over 100,000 signatures, so I hope that the Backbench Business Committee or the Government will find time for a debate. I commend the hon. Member for North Swindon (Justin Tomlinson) for doing so much on that not only in the House through the all-party group on financial education for young people, but in promoting financial education in schools.

With the OBR revising the level of personal debt in the UK dramatically upward, it is little wonder the number of people walking through the doors of citizens advice bureaux across the UK seeking debt advice remains high. Citizens Advice alone deals with almost 9,000 new debt problems every working day. It is that free and accessible expert debt advice that can play a key role in unlocking control of the debt. I would like to put on the record my thanks to Citizens Advice for the contribution it makes up and down the country in often difficult and challenging circumstances. It deserves the gratitude of the whole House.

Without access to free debt advice from organisations such as Citizens Advice, however, consumers will often seek other less affordable solutions from fee-charging debt management services in order to pay down debt—an issue that every Member who has spoken this afternoon has mentioned. Sadly, there are too many examples of abuse in the sector, and it affects some of the most vulnerable people in society.

When the Office of Fair Trading looked at such companies last year, it found more than 90% non-compliance with its own rules, noting that

“the findings from this review shine a spotlight on a market where poor practices appear to be widespread… it is clear that standards across this market are not as high as should be the case.”

There is, therefore, a strong case for Government intervention.

Following the Government’s consumer credit and personal insolvency review, the Minister committed to the development of a protocol setting out what was expected from a debt management plan, so in his response will he outline the progress that has been made on that?

I welcome the Minister’s commitment to keep the legislative angle open, but he needs to go further now and consider a proper legislative response. It is disappointing that the Government have dragged their feet slightly on the issue, but they could commit today to respond properly to the OFT’s report.

Calls for regulation in the sector have been echoed by fair-share debt operators, such as Payplan and CCCS, which provide free, immediate and ethical debt advice and repayment schemes to more than half a million people every year. They work closely with the organisations that are critical to resolving debt issues—the creditors. Much of their work comes from Citizens Advice referrals, and there is high demand for debt management plans, as every week more consumers reach the limit of their indebtedness and seek responsible solutions to their financial difficulties.

Based on information that I have received from Payplan, the number of people in that situation increased from about 300,000 at the start of 2010 to more than 560,000 by the end. Like Citizens Advice, it fears that in the absence of an effective regulatory framework many vulnerable customers unfortunately receive poor and unsuitable advice from the fee-charging debt management companies that they contact for help.

Such consumers are often charged up-front fees for services that should be free, with charges not being clearly explained before they enter into an agreement. My hon. Friend the Member for Stockton North gave some stark examples of that in his opening speech, and Consumer Focus has also expressed its strong concerns, stating:

“On the basis of the Office for Fair Trading (OFT) review, fee-charging debt management is a market which, at the moment, is largely failing consumers.”

Debt advice does not need to cost, however. The fair- share models of Payplan and CCCS are effective at dealing with indebtedness and at getting debt under control. The Minister should look at enacting section 5 of the Tribunals, Courts and Enforcement Act 2007 to give consumers the statutory protection that they need through consistent industry standards, whereby only reasonable fees are charged and abuses of the system are rooted out.

Consumers who are often vulnerable need such regulatory protection. In fact, should we work towards a situation in which consideration is given to phasing out up-front charges or, even, fees all together? The idea has been highlighted in many speeches this afternoon.

Consumers need protection from the way fee-charging debt management companies advertise. During my preparation for today’s debate, I had the television on in the background, and while it was on no fewer than three adverts for debt management companies popped up during the breaks, with reassuring claims to “wipe out debts” through “easy solutions” and “one easy monthly payment”. We could be forgiven for thinking that they would solve all our financial problems at one stroke. As Members from all parts of the House know, however, that is simply not the case.

The up-front fee and structure of debt payments, whereby the companies take their cut before paying creditors, is not clear at all in the advertising. There is also no clear indication that such services can be accessed free. As my hon. Friend the Member for Darlington has articulated through her ten-minute rule Bill, statutory regulation, over and above the basic licensing and supervisory regime presided over by the OFT, is desirable in television advertising.

Over-indebted vulnerable customers are acting under stressful conditions and without the time or inclination to shop around. There should be adequate protection from rogue providers of debt advice, so that huge numbers of already indebted customers are prevented from falling into even greater financial difficulties. Indeed, the OFT’s report states that

“advertising is the most significant area of non-compliance, in particular misrepresenting debt management services as being free when they are not”.

The Government need to do more in this respect to ensure that consumers are fully informed about the processes and services available.

My hon. Friend the Member for Stockton North was right to be proud of the previous Government’s financial inclusion fund, which focused millions of pounds of resources on providing free debt advice to those who were most vulnerable and most at risk. It is therefore disappointing that the current Government’s record on helping with consumer debt funding is unclear. In January, they announced that funding to the financial inclusion fund would be cut, with the loss of 500 specialist advisers who work primarily through Citizens Advice, and then gave it a short reprieve of just a year. Were it not for the vocal opposition from Citizens Advice and other consumer debt support groups, along with hon. Friends such as, in particular, my hon. Friend the Member for Makerfield, the Government would have pursued that devastating policy on debt advice. The £27 million that has been allocated to the financial inclusion fund has given the Government a little time to consider how they will continue to provide crucial debt advice to the public. We know that, from April next year, the Money Advice Service will be responsible for the co-ordination of debt advice provision across the UK and has submitted funding proposals to the Financial Services Authority, but it would be helpful if the Minister updated the House on when and if the funding will be confirmed.

It is vital that the funding of free debt advice is maintained, particularly given the pressure on local government budgets, which could be significantly compounded by the changes to legal aid. Ministry of Justice figures show that the legal aid budget for debt advice is due to fall by a massive 75% from 2013. Last year, Citizens Advice dealt with 64,000 debt cases funded by legal aid. A 75% cut in future funding would reduce that number to just around 15,500. Potentially, tens of thousands of people will be left without the support and advice that they need in their time of need.

It would be remiss of the House to debate debt advice and management services and not to refer to the growing problem of short-term loans and the short-term loan market, which has been mentioned by hon. Members on both sides of the House. Over 1.2 million people use the payday lending market, not out of choice but out of necessity. Families are using doorstep and payday lenders who charge exorbitant rates of interest on these loans, piling on an unmanageable debt burden. It is not appropriate for the Government not to act. Should they not step in and regulate these markets in the interests of the most vulnerable and disadvantaged? My hon. Friend the Member for Walthamstow (Stella Creasy) has been a thorn in the Government’s side in pursuing the high-cost consumer credit market. In doing that, a regulator could work with industry to ensure realistic reductions in exorbitant interest rates and charges. [Interruption.] I am delighted that my hon. Friend has obviously made a direct impression on the Minister.

There are lots of examples of solutions out there. That would not, as many fear, involve imposing an arbitrary interest rate cap that may exclude the very people who need access to short-term credit. Although tackling interest rates is crucial, it is but one strand of the many ways in which that sector can be regulated. There could be upper limits on the amount borrowed or on the number of times an individual can borrow to help to prevent multiple loans. There could be grace periods or time restrictions on paying off a loan and taking out another in order to prevent “rolling”. A balance of regulation has to be struck to protect vulnerable consumers in this competitive marketplace.

Let us not forget to mention illegal loan sharks. I am pleased that the Minister has managed to continue to find funding for the specialist enforcement teams for the illegal money-lending project introduced by the previous Government. Those teams do tremendous work and have raised awareness and understanding of illegal lending.

I pay tribute to many of the speeches that have been made, particularly by my hon. Friend the Member for Stockton North, who spoke passionately about the effect of debt on the most vulnerable in our society. The hon. Member for Chatham and Aylesford—I believe that she is also a very useful footballer—pleaded for the banks to be more responsible and noted that 30% of those who go to debt management companies go bankrupt; that is something that we do not want to happen. The hon. Member for Meon Valley (George Hollingbery), who is not in his place, raised the subject of bailiffs, which is incredibly important to bear in mind in the context of this debate. My hon. Friend the Member for Scunthorpe (Nic Dakin), who is still sporting his Movember moustache—I am not, as it was shaved off by Andrew Neil this morning on the BBC—expressed strong concerns in relation to the provision of free debt advice, of which he has been a strong champion in this Chamber.

The hon. Member for Solihull (Lorely Burt) said that more information needs to be available to people when they need help. I think that everyone in the Chamber agrees with that. The hon. Member for North Swindon also deserves credit for all that he has done on financial education. The hon. Member for East Hampshire (Damian Hinds) raised the importance of credit unions and other lending organisations. I am delighted that he mentioned credit unions, because they have been left out of this debate a bit.

The hon. Member for Grantham and Stamford explained the nudge theory in Downing street. I thought that Nudge was the Downing street cat. Nudge is obviously alive and well in the industry. He also said that Payplan is in his constituency and does a good job in regulating the market in which it operates and in dealing with the debts of many of his constituents and the constituents of other hon. Members.

This has been an important debate. I commend my hon. Friend the Member for Stockton North for bringing the subject to the House. Given the economic outlook, the Government’s political dogma of not admitting that their plan A is not working, and the spectre of higher unemployment, lower growth and shattered consumer confidence, it is unlikely that this issue will improve any time soon. Millions of families may struggle with severe debt. Access to free and independent debt and money advice services is vital for those in financial difficulty. Those services need to be funded in a sustainable way and they must meet the needs of all consumers, including, most importantly, the most vulnerable.

17:31

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

This has been an excellent debate with contributions from all parts of the House. I will try to do credit to it in my response. I hope that I will be able to reflect on many of the excellent contributions.

The reason this has been such a good debate is that Members, from talking to their constituents, know that this is a huge problem. There is a rising tide of misery out there. It is incumbent on this House and this Government to respond to that in as many ways as we can. I will do my best to do that. For many years in opposition, my right hon. Friend the Secretary of State for Business, Innovation and Skills was critical of the previous Government because they did not take action to deal with the rising indebtedness of many families and individuals across the nation. He feels that we need to do as much as we can in government to deal with the misery that is the legacy of that increase in personal indebtedness.

In my initial remarks, I will go through each of the contributions and pick out points and respond to them. The hon. Member for Stockton North (Alex Cunningham) asked about the future funding of debt advice. The hon. Members for Chatham and Aylesford (Tracey Crouch) and for Edinburgh South (Ian Murray) also touched on that matter. I know that the funding of debt advisers under the financial inclusion fund is of great concern. The House will know that my Department has committed to continue the funding for this year.

Money Advice Service has also been clear that it intends to renew all existing grant agreements for the provision of face-to-face debt advice next year. It is in the process of securing funding from the Financial Services Authority for that, so that people in need have access to good advice. We look forward to that being confirmed by the FSA board over the next few days or weeks. It is considering the business plan put forward by Money Advice Service. Once it has made its decision, that business plan will be published. That answers another question from the hon. Member for Stockton North.

The hon. Member for Makerfield (Yvonne Fovargue) made an extremely informed contribution. I would like to pick up on her point about the importance of the Citizens Advice brand. That is critical to how we address these issues. People in distress, who may be suffering from mental health problems, family breakdown or any of the other things that compound the problems of debt, often do not know where to turn. As Members have said, they can react to the first piece of advertising that they see and end up in the wrong place. We need to ensure that everyone knows of the existence of the free debt advice that is available and knows that that is where they should go. I believe that, because the Citizens Advice brand is so well known and so trusted, it is the brand on which we need to build. I am grateful to her for making that point.

My hon. Friend the Member for East Hampshire (Damian Hinds) rightly talked about credit unions. He also touched on the research that the University of Bristol’s personal finance research centre is doing, having been commissioned by the Government to look into whether a cap on the total cost of credit is the right way forward. We will await that research before making any further moves in that area.

My hon. Friend the Member for Grantham and Stamford (Nick Boles) made interesting comments about the nudge unit. I do not know whether there are minutes from that meeting. He also talked about the different regulatory approaches that we could adopt. Not only will I think about what he said, but I am very happy to meet him to discuss it further.

My hon. Friend the Member for Solihull (Lorely Burt), in a very effective contribution, praised the OFT for how effective its crackdown has been. She asked for it to be given more resources and more teeth, and she gave some ideas about how we could obtain those resources.

The hon. Member for Meon Valley (George Hollingbery), who is no longer in his place, mentioned bailiffs. I will relay his remarks to my colleagues in the Ministry of Justice, because it was clear that the House felt strongly about the matter.

The hon. Member for Scunthorpe (Nic Dakin) talked about learning from other countries. The research that is being conducted on the proposal for a cap on the total cost of credit that can be charged by high-cost lenders will include a consideration of regulation in other countries, including those that have rate caps. He talked about the idea of a real-time database, and other colleagues also picked up that subject. I think it is fair for me to inform the House that the company behind that database, Veritec, has had meetings with officials in my Department, in No. 10 and in the OFT. We are considering the matter, but I am not making any commitment now—that would obviously be quite wrong. If a decision were taken to regulate the payday market more, the experience in other countries would have to be considered further.

We are opening discussions with stakeholders on how we can increase data sharing for the benefit of consumers. We will also explore the issue of credit scoring and whether high-cost credit providers should provide data to credit reference agencies. The hon. Member for Makerfield asked about that, so it is important that I make that point.

My hon. Friend the Member for North Swindon (Justin Tomlinson) again stressed the importance of education, and he is absolutely right. We are working with the Money Advice Service and the industry to see if consumers can be helped in considering whether a credit product is right for them before they purchase it. That will play a role.

The hon. Member for Edinburgh South pressed us on payday loans, as did a number of other colleagues. I can say that we have started intensive discussions with the payday loan industry to ensure that future codes of practice contain the consumer protections that we believe are needed to address the concerns that blight the market. I have personally written to the trade associations highlighting the importance of that work and my concerns about specific issues such as continuous authority. I will also meet them during the process. Payday loan companies dipping in and out of people’s bank accounts, taking money set aside for rent and food, is simply not on, and we need the codes of practice to reflect that.

I wish to turn in more detail to debt advice. Inevitably, some people will fall into financial difficulties, and when they do, I want them to be empowered to make the right decisions for themselves about their finances, and to have access to the appropriate debt advice when they need it. The Money Advice Service will take forward the co-ordination of debt advice delivery from April 2012, and my Department has provided the necessary funds to research and develop a new multi-channel debt advice service across the UK.

The interim findings of that research have highlighted a number of key principles, which the Money Advice Service will take forward in its delivery strategy. Those principles include some critical points. For example, people should know where, when and how to access the right debt advice for them. That relates to the point about branding that the hon. Member for Makerfield mentioned. The Money Advice Service’s research shows that there should be a standard set of approved tools that are well understood and used by advisers, which will help to ensure consistent, quality responses for consumers with similar issues.

The research also suggests that digital self-help should be much more widely available and awareness of it increased. People for whom digital services are appropriate should be encouraged to use them, but of course they will not be appropriate for some people, and they can be encouraged to access existing telephone services, which must remain a key option.

Above all, face-to-face advice has to be available for service users who have particularly complex debt or who have accessibility problems with other channels. Indeed, more face-to-face outreach services need to be developed, because as we have heard in the debate, many people are unable or unwilling even to come to a citizens advice bureau but nevertheless need support. Face-to-face services need to be improved and be more quickly available, although there are already some excellent services. That is what is coming out of the research. We hope that the new model, on which I have put an awful lot of emphasis, can be in place for 2013.

As well as debt advice, people who fall into financial difficulties need access to remedies that work effectively for both them and their creditors. Before concentrating on what the Government are doing in relation to debt management companies, I should like to outline some matters on which we are proposing important action. On 7 November, I published a consultation on proposals to reform the application process for bankruptcy. Bankruptcy is an appropriate route for some people to deal with their financial difficulties, but it is apparent from earlier consultations on proposals to reform how debtors petition for their own bankruptcy that people see clear benefits in removing the court from the process while providing the necessary safeguards.

I also want to ensure that the most appropriate route is provided when bankruptcy is applied for by a third party. That means involving the courts when there is a dispute between parties on whether bankruptcy is a proper outcome. However, when there is essentially no disagreement—in other words, in the vast majority of cases—I believe a more streamlined route into bankruptcy can be found. The new process will encourage debtors and creditors to resolve their issues when possible before applying for bankruptcy.

In addition, as promised in the Government’s July response to the review, on 17 November I published a consultation on bankruptcy and its effects on the ability of the individual to access a bank account. All hon. Members would agree that a bank account is one of the most basic requirements of financial inclusion. It allows people to carry out basic financial management tasks in a simple way and can also save them money, because there are often discounts for direct debits. The concern is that bankrupts are unnecessarily excluded as a consequence of their bankruptcy. The consultation seeks evidence on that situation and on how best to remedy it.

Sadly, I am very familiar with the problems in the debt management market, but I would like to thank hon. Members who have raised their concerns and added to this debate, particularly regarding the unscrupulous behaviour of some fee-charging companies. It is worth noting that since the Office of Fair Trading compliance review in September, a total of 70 businesses have exited the debt management market—70 businesses that were failing to comply with OFT standards have gone.

As the Commercial Secretary to the Treasury and I said in July, we believe that more can be done. I am pleased to report that my officials have opened discussions with stakeholders from all sides—fee-charging companies, free-to-debtor providers, and creditors and debt advisers—to explore how a debt management protocol might work. That should help to improve standards, guide debtors towards better-quality advisers and providers, and leave no room for the rogue elements within the industry.

Hon. Members asked a range of questions on the powers of the OFT in tackling debt advice and management. It is important to remember that we have a regulation—the OFT has the right to charge debt management companies for the credit licence, without which they cannot operate. The OFT manages that and will soon publish revised guidance for debt management companies, which we expect early in the new year. Debt management companies should comply with the guidance. If they do not, they are in danger of the OFT revoking their licence or fining them. We need to consider that and to build on it. Indeed, many of the responses to the consultation on whether we should change the regime for consumer credit regulation say that the OFT works well. However, people would like it to do more and to have more powers. Those responses were echoed on both sides of the House during the debate. I obviously cannot pre-empt what the Government will say in response to the consultation, so I am limited in what I can specify today, but I refer hon. Members to the consultation, because it is an important part of the way forward.

I shall try to rattle through a few other points that were made on the OFT in the short time that remains. Hon. Members quite rightly talked about how social media—Google, Twitter, Facebook and so on—are being abused by a number of those companies. The OFT consulted on that earlier this year and has revised its guidance, so it now states:

“Licensees who advertise or sell online or by email must comply with the Electronic Commerce…Directive”

It also states:

“Before using internet based and social media marketing, licensees should consider whether they can exercise adequate control over its content…The OFT considers that search engine sponsored links and online messaging forums which limit the number of characters are unlikely to be an appropriate means of providing…balanced and adequate information.”

That is typical technocratic language to say that the OFT will act in this area. My hon. Friend the Member for East Hampshire raised the point about the social responsibility of Google, and I hope that it listens and responds to his remarks.

On cold calling, the OFT’s revised guidance on credit brokerage and debt management sets out a number of specific practices relating to cold calling of consumers that it considers unfair or improper business practice.

On advertising, the OFT has taken a market-facing approach in the past few years to tackle bad practice in the market. For example, it took well publicised action against firms that sent misleading IVA mailings to customers or used lookalike websites to mislead customers into believing that they were charity-based sources of free debt advice.

I have rattled through a few of the issues. What I wanted to convey to hon. Members is that we are focused on those and that we are listening both to this House and to people responding to our consultation to see what we need to do to improve our current regulatory regime.

I am extremely grateful to the House and to the Backbench Business Committee for allowing this debate. I know that a number of Members—the hon. Members for Stockton North, for Scunthorpe, for Makerfield and my hon. Friend the Member for Chatham and Aylesford—helped to precipitate the debate. I hope that it has made a major contribution to our thinking and to the thinking of those who are part of this process.

17:46

[Alex Cunningham]

I, too, believe that we have had a good and measured debate this afternoon. I am also grateful to the Backbench Business Committee for granting us the time to do this and to the many Members—there were quite a few of us—who supported the idea of having this debate.

Hon. Members have made it very clear that they have deep-founded concerns that the people who find themselves in crisis should get the help and support that they need. It was good to see how much we agreed on, though there was a little on which we disagreed as well.

I am grateful to the Minister for his response to the issues that hon. Members have raised this afternoon; he has much to address. He is one Minister who listens and responds positively. He has trailed for us in his response some things on the future funding of advice services and he has also talked about possible changes in the OFT’s approach to some of its powers and interventions, which is very welcome. However, the proof of the pudding will be in the eating, and we look forward to it coming out of the oven.

I know that the Minister shares our tremendous concern for the victims of debt and debt management companies. I am pleased that he has taken on board all that has been said today. Perhaps one day he will welcome the end of the fee-charging companies that have caused so much damage.

Many hon. Members have outlined not just the anguish suffered by people who find themselves deep in debt, but the tremendous benefits to the individuals, to the families, to their health and to the economy of appropriate advice, action and protection. When the Minister leaves the Chamber today, I hope that he will talk to his officials, the charities and the other organisations about the solutions and that he will remember the strength of feeling across the House today. I hope that the debate will spur him on to ensure that we get early action to address all the issues that have been raised today. I look forward to seeing what will happen in the future because only the Government can deliver the action that we need.

Question put and agreed to.

Resolved,

That this House has considered the matter of debt advice and debt management services.

Business without Debate

Thursday 1st December 2011 Commons Chamber

Business of the House (7 December)

Ordered,

That at the sitting on Wednesday 7 December, notwithstanding the provisions of Standing Order No. 20 (Time for taking private business), the Private Business set down by the Chairman of Ways and Means shall be entered upon (whether before, at or after 4.00 pm), and may then be proceeded with, though opposed, for three hours, after which the Speaker shall interrupt the business.—(Mr Heath.)

Business of the House (8 December)

Thursday 1st December 2011 Commons Chamber

Ordered,

That at the sitting on Thursday 8 December paragraph (2) of Standing Order No. 31 (Questions on amendments) shall apply to the Motion in the names of Angus Robertson and Mr Elfyn Llwyd as if the day were an Opposition Day; and proceedings on the Motion may continue for three hours and shall then lapse if not previously disposed of.—(Mr Heath.)

Phenylketonuria (Kuvan)

Thursday 1st December 2011 Commons Chamber

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

17:49

[Kwasi Kwarteng (Spelthorne) (Con)]

I am grateful for the opportunity to raise the issue of access to Kuvan for sufferers of phenylketonuria. I believe that the most important part of our job in the House is to represent our constituents as conscientiously as possible. It is also our job to bring forward issues of national interest that, even though they might come to us initially as matters of individual complaint, relate more widely to national concerns. In raising this issue of access to Kuvan, I hope to fulfil both these important functions.

I want to raise this issue tonight for one simple reason: a constituent of mine, Mandy Macedo Box, who lives in Shepperton, has a six-year-old son who suffers from PKU. Mrs Macedo-Box’s son, Charlie, happens to have a particularly severe form of the illness. PKU is a relatively rare and unknown liver disease. Its sufferers have to restrict all protein-containing food in their diet in order to survive and to avoid damage to both the brain and the nervous system. About one in every 10,000 people has PKU. Sufferers can never eat food that has a high protein content, such as meat, dairy, bread and cakes, while foods containing lower amounts of protein, such as vegetables, can be eaten, but only in small amounts. Only fruit can be eaten safely.

To maintain this low-protein diet, sufferers have to work out a complex diet of “exchanges”, which often includes prescription products, such as imitation rice or protein-free bread. As well as this very restrictive diet, sufferers often have to take a number of supplements to help their bodies function normally and to reduce their appetite. I am sure that Members can imagine how restrictive and detrimental to the quality of life this can be, especially for children and their families.

There is now a drug on the market that has been developed to help with the treatment of mild and moderate cases of PKU. This drug, Kuvan, enables sufferers to double the amount of protein that they can tolerate, which obviously means an increase in the amount of real food that can be ingested. I am sure that you can imagine, Mr Deputy Speaker, the huge improvement in the quality of life that such a drug would bring to many sufferers of PKU. Unfortunately, however, as is often the nature of these things, the drug is not guaranteed to work in Charlie’s case. It has therefore been proposed that Charlie take the drug for a trial period of one month so that doctors can determine whether it can help his condition.

The drug company that manufactures Kuvan has offered to make the drug available to Charlie’s local health authority, NHS Surrey, on this trial basis on the understanding that should the trial be successful, NHS Surrey would agree to fund the drug for patients with PKU in Surrey in the future. I understand that similar arrangements have been offered to other primary care trusts. However, the crux of the problem is that in Surrey the local area prescribing committee is simply unwilling to make this undertaking because—it claims—there is

“limited evidence of ongoing clinical effectiveness, and lack of cost-effectiveness”

of the drug.

To put it simply, we are now in the absurd position where the drug company will not commit to a trial period unless the PCT can guarantee future funding should the trial be successful, while, on the other hand, the PCT will not commit to a trial period because it cannot guarantee future funding because it is not sure that the drug will work. While this stand-off continues, the quality of life for a young boy in my constituency and many other sufferers of PKU continues to be seriously impaired simply because they have no access to a drug that might help to alleviate the symptoms of the disease.

To make matters even more frustrating for Charlie and others like him who are desperate for some non-dietary treatment, we know that Kuvan, although not available to many PKU sufferers in the UK, is routinely made available to patients in European countries such as France, Germany, Italy and Spain. It simply does not seem right that, despite the many miracles that we all know the NHS performs every day, British patients should be disadvantaged in that way, compared with their peers on the continent. It is in that context that I feel that a solution to the impasse must be found. Why can British sufferers of this disease not access the drug on the national health service? An answer might lie in the fact that the National Institute for Health and Clinical Excellence has not yet positively approved the drug. If that were to happen, some progress may well be made.

Finally, I find it quite striking that in an area where we are supposed to be supporting a great British business—pharmaceuticals—we should not be able to provide funding for the drug, thereby restricting the opportunities of many thousands of people in this country.

I am grateful to the House and to you, Mr Deputy Speaker, for the patience that you have shown in this debate—and, in fact, for your consideration in granting it. This may seem a small issue, but it has a massive bearing on the quality of life of those affected—both the sufferers and their families. It is quite right that it should be aired in the highest possible arena, which is what this House represents. I urge the Government to do all they can to find a solution to this grave dilemma.

17:56

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

I congratulate my hon. Friend the Member for Spelthorne (Kwasi Kwarteng) on securing this debate and on setting out so clearly, on behalf of his constituents, the concerns that they have brought to him and the concerns that he, in turn, wanted to ensure the House properly addressed this evening. He is absolutely right: that is exactly what Adjournment debates are for. They are an opportunity for constituents’ concerns to be raised in this House, and I pay tribute to him for doing so.

My hon. Friend talked about the case of Charlie and the situation facing him and his family. He will understand that the necessity for patient confidentiality meant that until I heard his speech, I was not aware of that specific case from the briefing that I had to prepare for this debate. However, I hope that I can give him a response that will none the less address a number of the important points that he raised. As part of the preparation in advance of this debate, my private office supplied me with a copy of the postings on the Phedup website that talk about Charlie’s case. One can feel only strong sympathy for the concerns that my hon. Friend has raised on behalf of his constituents. As a 12-year-old boy, Charlie wants to be like every other young person growing up. He does not want to be different from his cousins. That point comes across clearly from the website.

I cannot deal with all the details, but I understand how important it is for children with phenylketonuria to be treated early and to receive the most effective treatment from the NHS. As my hon. Friend rightly said, the condition affects around one in 10,000 babies born in England. Those with phenylketonuria—or PKU, as it is more commonly known—are unable to break down the amino acid phenylalanine, which builds up in the blood and, critically, the brain. In most people with the deficiency, food is not broken down by the enzyme known as phenylalanine hydroxylase, or PAH—I will stick with the initials from now on, if I may. In people with PKU, the PAH enzyme function is impaired because of a genetic mutation. As a result, phenylalanine levels in the blood and other tissues rise, which can lead to brain damage and, in some cases, learning difficulties.

Without treatment early in life, the outlook for those with PKU is very poor. Most people will develop severe learning disabilities and will require constant care. With treatment, however, the outlook can be incredibly good. Since 1969, the NHS has screened newborn babies for PKU, so early detection is commonplace in this country. Following a low-protein diet and taking regular dietary supplements containing amino acids helps keep the phenylalanine levels low, avoiding the terrible damage that the condition can inflict on a person. Specially formulated low-protein foods and nutritional supplements are available on the NHS, and GPs are able to prescribe them to treat patients with PKU. As with any condition that requires constant management and attention from—

17:59

Motion lapsed (Standing Order No. 9(3)).

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

[Paul Burstow]

Thank you, Mr Deputy Speaker. I was not prepared for that procedural intervention.

As I was saying, any condition that requires constant management and attention from birth can be an incredibly stressful one, as my hon. Friend captured in his remarks. I appreciate how difficult it must be for children and their parents or carers to maintain the protein-free diet necessary for the majority of patients with PKU. From what I understand about the condition, children with PKU cannot eat many of the foods that we all take for granted. Some of the pleasures of life are not available to them, which makes simple day-to-day activities like going to school difficult. Again, I very much understand the desire to see a child living a life that is not different from that of their peers. That point was powerfully made, as I said, on the Phedup website when I looked at it today.

The Government recognise the importance of maintaining this diet. That is why a range of food and nutritional supplements are provided by prescription on the NHS. The committee responsible for approving these products definitely understands the importance of providing a range of products for patients and takes special care to make sure that these products are approved for NHS use.

This debate is primarily about the role of a new drug, Kuvan, and how it can change individuals’ lives if it is made available because of how it can deal with the problem of phenylalanine levels in children and adults with PKU. Kuvan is a synthetic form of a vitamin that helps PAH enzymes work better. However—here we come to what I fear is the important point—the drug is not believed to be universally effective. It works only in some cases for some types of PKU, depending on which precise PAH gene mutation is present. As I understand it, only about four in 10 patients are likely to benefit from it. As my hon. Friend said, the benefit is determined only after a month, and through a blood test. Kuvan is more likely to benefit those with the milder forms of PKU, and most people would still need to continue with their dietary treatment. The drug might enable them to eat a few grams of protein, but would not allow a complete reversion to a conventional lifestyle and diet.

Let me deal with the role of the primary care trust in all of this. PCTs are legally obliged to provide funding so that drugs positively appraised by NICE are available on the NHS. This includes drugs with European orphan designation. In the absence of NICE guidance—for instance, where NICE has not appraised a treatment or is in the process of doing so, or where NICE has not recommended a treatment for use on the NHS—the PCTs are responsible for making funding decisions based on the needs of their populations.

I understand that the Surrey NHS area prescribing committee has considered Kuvan and has taken a decision on the basis of the evidence not to make it available in Surrey. The panel, which included GPs and other clinicians, considered the available clinical evidence, together with supporting information from parents of children diagnosed with PKU. After full and careful consideration—my hon. Friend has quoted this—it concluded that there was insufficient evidence to support the use of Kuvan at this time.

Doctors can request treatments that are not usually funded on behalf of their patients through an individual funding request, if they feel that there are exceptional clinical circumstances. I understand that a further request has been made by the Great Ormond Street Hospital for Children NHS Foundation Trust. I believe it has led to further correspondence between the PCT and the trust. At the moment, the foundation trust has not supplied all the information necessary for the application to be properly considered. I hope that that information will be provided and that consideration will be given to those representations by the foundation trust. I shall also ensure that the report of today’s debate is made available to the primary care trust, so that its members can see for themselves the representations made by my hon. Friend.

Under the NHS constitution, patients have the right to expect local decisions about the funding of medicines and treatments to be made rationally, following proper consideration of the evidence. To help PCTs make those difficult decisions, the Department has issued a set of core principles. PCTs are required to have clear and transparent arrangements for local decision making on the funding of drugs, and for consideration of exceptional funding requests.

My hon. Friend asked how we could address these difficult issues in the future. We want to improve access, on the NHS, to innovative medicines that are effective, particularly those that can allow a fellow citizen to lead as normal a life as possible. We will do that by reforming the way in which companies are paid for NHS medicines, adopting to a new value-based pricing system when the current pharmaceutical price regulation scheme expires at the end of 2013. That will bring the price that the NHS pays more into line with the value that a new medicine delivers in terms of the benefits that doctors and patients gain from a drug. The aim of the new pricing system is to create a system that has the capability to include the broadest possible range of new medicines. When possible, we want to avoid creating different processes for different treatments.

I understand that some people with very rare conditions—including, I suspect, the one that we are discussing—who want to gain access to a particular treatment fear that their cases will not be considered fairly under the new system because they are among a tiny minority who would benefit in such circumstances. We will keep an open mind, and if, as we continue to develop our plans to implement value-based pricing, it becomes clear that some treatments for the very rarest conditions would be best dealt with through separate arrangements, we will consider those options.

I well understand the need for this matter to be raised in Parliament. I will ensure that the points that have been made today are taken up with the PCT as it gives further consideration to the case being advanced by the foundation trust and by the family. I assure my hon. Friend that the Government’s priority is to ensure that NHS patients, including those living with phenylketonuria, are able to gain access to the most appropriate treatments in order to manage their conditions.

My hon. Friend has raised an important point about the need to ensure that the quality of life is properly respected, and that, in the very rare cases of phenylketonuria, that respect is reflected in the provision of drugs that allow a child to enjoy a wider range of meals and, as a result, grow up as a normal child with a normal life. I hope that he feels heartened by the debate, and that, as a hard-working constituency Member of Parliament, he will be emboldened to pursue this matter further.

Question put and agreed to.

18:08

House adjourned.

Westminster Hall

Thursday 1st December 2011 Westminster Hall

Thursday 1 December 2011

[Nadine Dorries in the Chair]

Transport Disruption (Winter 2010)

Thursday 1st December 2011 Westminster Hall

[Relevant documents: Fifth Report from the Transport Committee, “Keeping the UK Moving: The Impact on Transport of the Winter Weather in December 2010”, HC 794, and the Government Response, Sixth Special Report, HC 1467.]

Motion made, and Question proposed, That the sitting be now adjourned.—(Norman Baker.)

14:30

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

A year ago today, the UK was in the midst of a very cold spell of weather. North-easterly winds had swept snow in from the Arctic and it fell throughout the country, adding to substantial falls during the last week of November. The temperature barely rose above freezing and was below minus 10° C all day in parts of Scotland.

There were two periods of intense cold weather last winter, from 30 November to 3 December, and from 16 to 22 December. The temperature in December 2010 was 5° C below the average for the month, and there were nine significant snow “events” bringing the most widespread snow in the UK for 30 years. Winter 2010-11 was the third cold winter in succession. We are still waiting to find out whether this winter will be another severe one or whether there will be a return to the milder conditions we had become used to.

The severe weather last December affected aviation severely. Heathrow airport was closed shortly before Christmas and other airports were also disrupted, as were our trains, particularly in Kent and Sussex. Eurostar services were disrupted, with long queues in the cold outside St Pancras station as people tried to get to Paris or Brussels just before Christmas. There were also problems on major and local roads, as well as complaints about pavements and minor roads being left under snow and ice for weeks at a time. The Transport Committee’s inquiry looked at all of these issues and we published our report in May. I am pleased to have the opportunity to debate the Government’s reply to our report just as winter 2011-12 begins.

First, I pay tribute to David Quarmby, who led a small review team during 2010 that looked at winter resilience in the transport sector. He also audited how transport coped with the first spell of adverse weather a year ago. His analysis has been extremely important: it was comprehensive, and his recommendations were accepted by the Government. Can the Minister confirm that all of the Quarmby recommendations have now been implemented in full? If we have further transport disruption this winter, will he commission an independent review, so that we can continue to learn lessons and improve transport’s resilience to bad weather?

Bad weather causes disruption to businesses and individuals and affects normal activities. Mr Quarmby tried to estimate how much the transport disruption due to bad weather last winter cost the UK, and concluded that increased spending on winter resilience by highways authorities could be cost-effective. Since then, the Office for National Statistics has estimated that the adverse weather last December knocked 0.5% off UK GDP during the third quarter of 2010-11, which reduced growth from 0.6% to 0.1% and cost about £1.6 billion, and the Secretary of State for Transport told us that transport disruption cost the nation £280 million per day.

Those are very big figures and they show why there are sound economic reasons for addressing the situation, as well as the inconvenience that transport breakdown in bad weather causes to daily life for most people. A day at home because of heavy snow might be seen by some as fun, but the implications for businesses can be substantial, and many people can be left isolated by bad weather when they cannot get out, cannot get basic provisions and cannot receive their usual visits from friends and relations. In addition to those implications, there are further social consequences: schools can be shut, and vulnerable people can be trapped in their homes, with higher heating bills as a result. Preparing our transport systems for winter is therefore absolutely essential.

One of the issues that our report examined was the importance of long-range weather forecasting. Although it is true to say that short-term forecasts are generally accurate, long-term forecasting is poor—indeed, it is discredited, particularly since the Met Office made its “barbecue summer” predictions a few years ago. The previous Secretary of State for Transport, the right hon. Member for Runnymede and Weybridge (Mr Hammond), suggested that for an investment of £10 million, the Met Office could achieve a big step forward in forecasting capability. We took up that suggestion and recommended that that investment be made. The Government’s reply to our report makes no specific comment on that issue, so I ask the Minister to set out the Government’s position on that today. Do they agree that there should be further investment in the Met Office or other appropriate organisations? If so, what do they think that investment should be and when will it be made? The Department for Transport told us that it is working across Government to review evidence on winter weather patterns and to test whether current levels of investment in winter resilience are optimised. Again, we would be interested to know the outcome of that work.

Aviation bore the brunt of the transport disruption last winter. Gatwick airport closed for 46 hours from 1 to 3 December, and Heathrow airport closed from 18 to 20 December after 7 cm of snow fell in one hour. At the height of the disruption, 10,000 passengers spent the night in the Heathrow terminals. Not only were the airports closed for a time and flights postponed or cancelled, but there was also the very important question of how passengers’ needs were dealt with when that situation arose.

I accept that heavy snow will close any airport in the world for a short period. I also accept that Heathrow is in a particularly difficult position because it operates at virtually full capacity; other airports can recover from disruption more quickly because they are neither as busy nor as full. However, there were problems with how the disruption was handled, which involved the airlines as well as the airports. There was ambiguity about whether or not the airport was closed. Passengers did not know whether to come to the airport or stay at home, and far too many ended up staying for long periods in terminals, worried that they might miss a flight if they left.

BAA was criticised for not implementing its snow plan, for inadequate communications with passengers and airlines and for not having adequate snow and ice-clearing equipment. To BAA’s credit, it appointed David Begg to review its winter resilience plans and their operation. He produced a strong report and did not pull any punches. He recommended that Heathrow should adopt

“an improved resilience target that the airport never closes as a result of circumstances beyond its control.”

He also recommended improvements to planning and communications. BAA accepted his report’s recommendations, which was a very positive move.

We must recognise that, as our hub airport, Heathrow plays a crucial role in maintaining the UK’s competitiveness. Is the Minister satisfied that the changes made at Heathrow will make the airport better prepared for winter weather this year? That question relates to its dealing with the initial impact of bad weather, the process and the speed of recovery from disruption, and how passengers’ needs are met during that time.

The Committee recommended that the Secretary of State for Transport should designate a senior official to have oversight of the snow plans of major airports. We proposed that idea because we thought that Parliament and the public needed reassurance that the plans put together by the airports were adequate, but the Government rejected that recommendation in its response. I would like the Minister to tell us why today.

One of the ironies was that the very severe airport disruption was not reflected in airport performance measures—indeed, they suggested that business had continued as normal. The Committee recommended that airport regulation should include a measure to assess air travel disruption. I am pleased that a draft airport regulation Bill, the Civil Aviation Bill, has now been published; the Transport Committee will start to scrutinise it next week and will look at the proposed new regulatory regime. We are told that winter resilience will be reflected in the Bill, and I would like to hear more from the Minister, hopefully today, about how that will be achieved. The Committee will pursue the issue in more detail in its pre-legislative scrutiny.

Airports and airlines must do more to look after passengers. It is striking that there seems to be no organisation that represents air passengers’ welfare. There was an organisation that dealt with air passengers’ needs, but the Government have abandoned their own proposal to move that responsibility to Passenger Focus and it is unclear exactly who is responsible for considering passengers’ needs. The responsibility does not lie solely with airports, although they do have very serious responsibilities; airlines, too, should help passengers during periods of disruption. Our Committee recommended that airports should do more to look after passengers at times of disruption, but should be able to reclaim the cost of doing that from the airlines. I am pleased that the Civil Aviation Authority is taking that proposal forward and I look forward to seeing how the idea develops. I am also pleased that, in the draft Bill, the CAA’s primary duty will be to passengers, but we need to see how that would operate in practice.

A problem with airport recovery after disruption is in managing flight landings and departures. The previous Secretary of State, the right hon. Member for Runnymede and Weybridge, appeared before our Committee and was asked a lot of questions about this. He suggested that airports might be enabled to impose emergency timetables, with oversight by the Civil Aviation Authority. The Select Committee thought that that was a good idea, but the Government no longer seem as keen as they were to go ahead with it. I would be interested to hear the Minister’s views and the Government’s current thinking on that proposal.

Gatwick airport brought to our attention another issue: the importance of maintaining surface access to airports to keep them running. Although its runway was clear, staff and passengers struggled to reach Gatwick airport by rail or road. A more co-ordinated approach to managing the response to adverse weather is needed to ensure that such problems are avoided. The Committee felt that, if necessary, the Government should step in to resolve conflicting priorities, but that that should not be necessary and the matter should be dealt with locally. Whether it is passengers or staff who are affected, not being able to get to airports by road can be a serious impediment.

There were also problems with rail services last winter, particularly south of the Thames where the third-rail system was again unable to cope with the snow and ice. Network Rail was caught out by the early start to the winter, with its snow-clearing trains still in depots being converted from their autumn leaf-clearing role. That mistake was not repeated this year and Network Rail has invested £40 million in new snow equipment. A conference of network operators in the south-east was held in November to discuss what further action was taken, and there were a number of detailed discussions about actions taken by various operators. Is the Minister monitoring the outcome of that conference and staying abreast of the practical, preventive steps being taken by Network Rail and the train operating companies to deal with the problems?

The Chancellor announced in his autumn statement that there would be further investment in winter resilience equipment, but we do not have any detail about exactly what that means. Can the Minister explain what the resilience equipment is, how much will be spent and when, and what will happen to make a real difference? It has been accepted, I think, that the long-term answer to the specific problems in the south-east is the replacement of the third-rail system with a safer, more robust form of electrification. It will be expensive, which is perhaps why it has not yet been done, but surely it could be phased in, even if over a longer period. I understand that options are being studied, and I would like to hear more from the Minister about what is happening with the programme for the electrification of the third-rail system.

Passengers across all modes of transport were let down by inadequate information. At times of severe disruption transport delays and breakdowns are inevitable, but information systems must be ready to inform passengers and potential passengers about the situation. Although some breakdowns might occur without notice, others are known about and indeed can be predicted. Online timetables were not updated quickly enough to take cancellations into account, and many people ended up buying tickets for non-existent trains. Real-time information for passengers on trains and in stations was very poor. When we raised the issue with industry representatives in the Select Committee we were told that there were numerous information systems across the railway, that some of them were very old, and that pulling them together was one of the legacies of privatisation. We did not accept that argument: many years have passed since privatisation, so it cannot be used as an excuse not to have updated systems and not to deal with problems.

We agree with Passenger Focus that a culture of looking after passengers when things go wrong is not yet second nature across the rail industry. That needs to change. The Office of Rail Regulation has published proposals to clarify responsibilities for the provision of information, but in a very recent publication it is unclear whether ORR is talking about a consultation—if so, I would like to know how long it will take—or about making specific proposals. I am interested to hear what knowledge the Minister has of that and what he can do to progress it. The rail industry’s national taskforce has also been working on improving real-time information provision ahead of this winter, so is the Minister confident that we are in a better situation than we were last year?

There was major disruption on some motorways, but traffic on the UK’s main roads was generally kept moving during the bad weather. Credit should go to the Highways Agency and the local highways authorities, which rose to the challenge and worked hard to keep roads open, in co-ordination with the agency.

During the year before last, there was a great deal of concern about problems in providing sufficient salt to put on the roads to prevent ice from forming. As a result of David Quarmby’s review, many changes were made. The arrangements had considerable success and resulted in great improvement. We felt that the Government’s strategic salt arrangements worked well, generally speaking, although some local authorities did complain about transparency, distribution and the cost of the salt. However, improvement was made. Had last year’s bad weather continued for longer than it did, further issues might have been raised about the adequacy of salt provision. What are the Minister’s views on the salt situation for the current year and next year? Does he think that there is enough salt to deal with a long bad winter? Are we in a better position than last year? I repeat that last year was dealt with much better than the year before. Salt provision and co-ordination arrangements among the Government, regional organisations, local authorities and salt suppliers worked far better.

Public support is widespread for more action to clear pavements and minor roads during periods of disruption, particularly to maintain access to facilities such as schools and health centres. Often when we discuss disruption to transport networks in bad weather, there is a perhaps inevitable focus on major roads and major transport networks. They are clearly of economic importance and they matter for the country as a whole, but it is also a problem if somebody living in a local road cannot get out, is worried about falling or cannot get access to goods, services, basic amenities or friends. Sometimes, by concentrating on the big questions and challenges, we do not give sufficient attention to the local issues that matter so much to individuals. In particular, it is vital to maintain access to facilities such as schools and health centres.

Voluntary effort has a role to play. Some local authorities have been involved in organising it, some have taken steps such as providing grit bins at the ends of roads and some are considering what else they can do locally this year. Our Committee asked that the Government make available online more practical information about what people can do voluntarily, such as helping clear pavements outside their own premises, after the publication last year of the snow code, which provided reassurances about potential legal liabilities. Local problems such as side roads and access to local homes need addressing. Do the Government have any comments on that? I know that local authorities are considering it. Given their financial problems, they are restricted in what they can do, but it is important and should not be neglected.

Our report reflected our concern about how many drivers appear unprepared for winter weather. According to an AA survey, nearly half are unprepared. Has the Department done anything to encourage drivers to be better prepared this year? Last year, drivers were warned that they should make only essential journeys in bad weather. It is often difficult to define what essential journeys are. Many people think that their journey is essential if they want to go out, but there is no further clarity about what that means. We thought that the police and the Department should develop a set of travel warnings to provide clearer guidance to the public about what sorts of journey they should not undertake during particular types of bad weather. The Highways Agency agreed to consider that recommendation. It would be helpful to know whether any progress has been made.

At our inquiry, we heard from the Freight Transport Association, which asked for specific snow and ice warnings for HGVs, similar to current warnings about high winds. I understand that that recommendation has been accepted. Will the Minister confirm that? If that has been done, it will be helpful. Parts of the major road network, such as certain hills or junctions in exposed areas, are particularly prone to disruption in severe winter weather. We suggested that the Highways Agency should deploy its traffic officers in such areas during bad weather to help clear blockages and deal with problems as quickly as possible. Some of the public reaction during the bad weather came from people trapped in vehicles behind blockages on the road. They were concerned that the blockages had not been removed and felt that more warnings should have been given or more urgent action taken. The Government agreed with our concern, but it would be helpful to know whether specific action is being taken to address the problem.

Our report covered a great deal of ground. I have referred to most of the areas involved, but there were many concerns involving all modes of transport. It was also essential to consider the needs of the non-travelling public. Our report asked for better information at all levels and more co-ordination to secure effective action, as well as more investment targeted at the most appropriate places. With more accurate information about weather and road conditions, train services and flights, people can make better informed judgments about whether to travel, and transport providers can plan better.

I hope that our work has helped the Government respond to the policy challenges highlighted by last December’s bad weather, and I hope that it has shown our main transport providers that they should be doing more to put passenger welfare first. Our report considered how effective co-ordination of information and action—including preventive action, action to deal with problems and recovery—can mitigate the impact of bad weather in an ongoing process. I hope that our report contributes to enabling transportation links to operate in the interests of the public despite bad weather.

14:57

[Simon Wright (Norwich South) (LD)]

I am grateful for the opportunity to contribute to this debate. I congratulate the Select Committee on Transport on its report, which made numerous recommendations that many of us can support. I will speak briefly about the recommendations relating to better weather forecasting and the provision of improved warnings and travel information to drivers.

Achieving better medium and long-term forecasting would allow transport operators to plan better for problems ahead. We start in a good position. The Met Office is widely recognised as one of the best weather predictors in the world, providing accurate and reliable forecasts over various time scales. The Met Office relies increasingly on supercomputing to carry out its work. Developing capacity and capability is vital if it is to undertake more detailed forecasting in future.

The science is available now to predict weather better, but computing power is required to realise that science. In the past, meteorology applied to weather forecasting had the most cutting-edge computing power available. Today, that is no longer the case, but last winter showed us that it is still needed. Better computing power means that the science can be applied in ever higher degrees of resolution.

The investment required to ensure that the Met Office has adequate computing power is probably about £15 million a year. That is a little more than the hon. Member for Liverpool, Riverside (Mrs Ellman) suggested, but it is in the same ballpark. That investment would bring tangible benefits to the UK through improved short-range weather forecasts, long-term predictions and climate change projections.

The economic case for better forecasting is clear in relation to advance planning for extreme weather events affecting transport infrastructure, but other opportunities would arise from better flooding, snowstorm and high wind forecasting. The insurance industry, which has a strong presence in my constituency, also stands to benefit, given that two thirds of the world’s insured losses are related to natural events. Getting information out early means that businesses and communities can plan their activities and, in extreme events, possibly save lives, too. For long-term planning, the improvements in climate modelling from improved computing power would help significantly to inform investment in and delivery of major transport infrastructure projects. The Met Office’s public weather service at present is already worth more than £500 million to the economy. Increasing computing power would increase that even more. The sooner we invest in improving the supercomputing capacity of the Met Office, the sooner the UK will see the social and economic benefits.

I also want to say a few words about how best to communicate the impact of weather on driving conditions. At present, the Met Office-issued warnings are to be interpreted by drivers based on The Highway Code, with advice provided through the media by the Highways Agency and police. Last winter, drivers were advised at the height of the extreme weather conditions not to use the roads unless they had to. However, the interpretation by drivers of this advice is not clear. Do people who hear this message ask themselves, “Do I need to use my car to make this journey?”—the answer to which is often yes—or do they ask themselves, “Will there be serious implications to not making this journey at all?”, in which case the answer might be no?

It needs to be noted by Ministers that the Highways Agency research on driving behaviour in the winter before last shows that there had been little change in behaviour, despite the severity of the weather and the warnings issued. I strongly support the Committee’s recommendation for research into travel messages and how they influence behaviour, or fail to. The nature of language used, consistency of message and clarity for the recipients are all vital. If we are to tell people not to travel unless necessary, they need to be clear about what circumstances are and are not necessary. Perhaps advice needs to be more direct—“Do not travel unless there is a medical need to do so.” Perhaps different levels of alert could be devised, but let us support proper research into the issue so that we can know what makes a difference and what does not, rather than simply tweak existing practices that have not always delivered results.

Websites can also play an important role to help drivers plan their journeys. The Highways Agency’s Traffic England website, for example, provides real-time information on any problems on the motorway and A-road network. We need to make sure that drivers are aware of such tools, but we also need to recognise that at times of high demand some websites simply cannot cope. There were reports on some days of extreme weather last winter that traffic information websites were going down. For those drivers who are already out on the roads, it is vital that every effort is made to ensure that there is access to real, in-time information about the conditions on particular routes, and that drivers are able to adjust their routes as necessary, including before joining, and therefore adding to, existing problems on roads.

The AA’s survey of drivers has already been mentioned. It highlighted that drivers most wanted to be actively directed away from motorways if there were problems, and that they supported the use of the police to carry out that function. Roadside assistance could also be delivered through improved information and signage. I support efforts by the Highways Agency to develop the use of variable message signs and the expanded use of similar technologies across the road network where appropriate.

The ever-increasing availability and use of in-car technologies, such as sat-nav and smart phones, mean that new opportunities are available for providing real-time data specific to the interest of the individual driver following a specific route. Again, I think that the Highways Agency has an important role to play, working with providers of data-based services, to ensure that the data that it provides are as complete and as usable as they can be. There is even a role for the agency to help develop data applications of its own where needed.

We need to get weather forecasting as good as it can be, and we need people who are both planning journeys and driving on our roads to have access to the most up to date and accurate information about the weather and the condition of particular routes, and a system of warnings that are proven to be effective in changing driver behaviour when the conditions require it.

15:04

[Julie Hilling (Bolton West) (Lab)]

We have been so lucky so far this winter, but that seems to me to be part of the problem in this country with winter resilience. We have winter after winter with very little snow and ice, but then have winters like the previous three. At a time of dreadful cuts to budgets across the piece, it can be easy to make winter preparedness a lower priority, especially for weather events that do not happen every year. A few years ago, one of my local authorities sold one of its snow ploughs, because if felt that our winters had warmed. I think that, last year, it might have regretted that decision.

I want to focus on the people end of the problem with winter weather. Colleagues already have talked and, I am sure, will talk about airports, major roads and rail. I have quite a large constituency, the ground of which varies from being quite high to quite low. The highest parts are the west Pennine moors and, like any high ground, there can be snow there when there is none lower down in the constituency. In fact, I have sat in a constituent’s house in Horwich in absolute panic, because the snow had started to lie heavily, wondering how on earth I was going to get home, but by the time I got home at the other end of the constituency I ran into only a little drizzle. As they say in Lancashire, it is an overcoat colder up at one end. That illustrates graphically the need for accurate, localised information.

I am sure that all colleagues present would share my frustration at seeing a sign at the start of the M1 that says that the M6 is closed at junction 16, because a driver does not know whether it will still be closed when they get there in three hours’ time. I recognise the limitation of roadside signs—it is not possible to put a huge amount of information on them—but we need that localised information, and we need it on local radio, websites, sat-navs and other electronic devices. It is hugely important that that information is regularly updated, because, too often, information is left on those sites long after the obstruction or the problem has been cleared, which leads to an absolute lack of trust in the information when the driver gets there and the road is no longer closed.

This is not just a bad-weather issue, because we need that information all year round, whether it relates to accidents, roadworks or other incidents on our highways. As I have said, the information needs to be localised. In my experience of my locality, certain main thoroughfares are cleared as quickly as possible. I have no complaints whatsoever about the speed with which that is done, bearing in mind the weather conditions over the past couple of years. However, one would expect other roads that one considers to be main thoroughfares to be cleared, but they are not because they are not in the local authority’s plan. I am concerned about some of those routes. They can be quite major roads and side roads on which, in parts of my constituency, cars can be trapped for many days.

The then Transport Secretary, the current Defence Secretary, told the Transport Committee that the issue of snow clearance is one for local authorities, but I do not think it is enough to leave it to local authorities. More should be done to set expectations and to support them with funding allocations, taking those areas that are prone to severe weather conditions into particular account.

There is also an issue with particular parts of local authority areas. Johnson Fold, a council estate in my constituency, has some of the highest housing in the borough, on the edge of the moors. Two winters ago, when the rest of the borough had defrosted, Johnson Fold was still snow and ice-bound. I came across elderly people who had been trapped in their homes for three weeks. The vast majority of residents, particularly on this estate, are of limited means, so they cannot purchase additional help to clear roads and paths. There are fewer cars on the roads, because they do not have as many cars as those in the more affluent areas, so the traffic flow does not get rid of snow and ice, either.

I appreciate the then Secretary of State’s suggestion of voluntary snow wardens. What has happened to them, and how much progress has been made? Standards should be set whereby resources that are no longer needed on major networks are used in the more remote areas, so that they are not disproportionately affected, and I think that that advice and those standards should be led by the Government.

That leads me to another concern of mine about pavements, which we seem to leave entirely to local authority discretion. I accept that pavements might not be their first priority, but we need to get our thoroughfares going, because they are part of our transport system; people need to walk to and from trains and buses, and they walk to work and other places. Again, it seems that some standards should be set. I know that different things happen in different local authorities, and when the bins could not be collected in two local authorities in my area, staff were transferred to clearing the pavements, but more standards should be set.

I say that because these problems lead to costs in other areas. They lead to increased costs in the health service because accidents occur and people have slips and falls. They also lead to costs in the economy at large when people cannot get to and from work or to shops to trade with people who are trying to run their businesses. Should those additional costs, which lie outside transport in the smallest sense, be factored into the economic costs of severe whether?

The hon. Member for Norwich South (Simon Wright) talked about people being given information, but do the cuts to what the Government call their marketing budget—I would call it their information service—mean that less information is being provided to people through traditional means, such as television adverts and literature? Does that mean that people are less prepared? Do they have shovels and blankets in their cars? Should the Government review their expenditure on advertising safety measures? I do not think we are giving people some of the public information advice they need, particularly on safety.

Finally, how will the cuts and potential cuts to the BBC and local radio services affect the travel services on which we all rely? Those services give very localised information about hold-ups and blockages, but will that information be affected by cuts at the BBC?

15:12

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

It is a pleasure to serve under you as Chair, Ms Dorries. This is an important and timely debate, and I congratulate the members of the Transport Committee on their valuable and constructive report and on securing this slot. I also congratulate the Committee Chair, my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), on her excellent opening speech. She will be delighted to know that I will reinforce many of the points she made.

A year ago this week, Britain was hit hard by extreme winter weather and experienced the earliest snowfall for 17 years. Temperatures fell as low as minus 21°C—temperatures not normally associated with the UK. The snow and cold were extremely prolonged, extending right through to Christmas and the new year, and we are well aware of the impact they had on Britain’s transport networks: thousands of flights were cancelled at major airports; passengers were trapped overnight on stranded trains; motorways were closed for hours on end after accidents; and people were trapped in their houses as councils ran low on salt to treat roads.

It was an exceptional winter, and it would be unrealistic to claim that Britain could have got through it without some disruption to our transport networks. No one blames the Government for the thickness of the snow, but it is right to ask how prepared and resilient they enabled the country to be. The 2009 winter under the Labour Government was also harsh and caused transport disruption, leading to the establishment of the Quarmby review. The following year, it became clear that the new Government had not gone far enough in putting David Quarmby’s recommendations in place, despite having received the interim report in July.

On salt supplies, in particular, although the distribution method may have improved, as the Committee’s report noted, the Government gave the impression of being asleep on the job. In its April report on the winter disruption, the Committee identified criticism from the Local Government Association, which said that recommendations on reducing salt spreading rates came far too late in the planning process. The AA and the Royal Automobile Club had concerns about the resilience of the UK’s salt supply arrangements, while the Institute of Highway Engineers said that the strategic salt supply was inadequate.

The Committee noted that Ministers claimed credit for having a stockpile of salt left at the end of the winter, but the truth is that we got lucky. The UK went into the winter with less salt than recommended by David Quarmby’s report. From parliamentary questions I have tabled, we know that 60% of Britain’s stock of salt was used up by the end of December. Had milder weather not prevailed in the new year, we would have faced much more widespread road closures. Last winter, Britain’s salt stocks and distribution systems came close to being inadequate to meet the challenge we faced. We are fortunate that we have not faced early snow this year, but we need to know that stocks and systems are in place to respond if and when severe weather strikes.

I would be grateful if the Minister answered a number of questions on road issues. Is he confident that, as of today, the UK has a large enough stockpile to cope with a prolonged period of extreme weather? What measures are in place to ensure that stocks can be replenished, from domestic or international resources, over the winter? As an aside, let me say that I was grateful that the Leader of the Opposition sent me down the salt mine at Winsford last year. It was an excellent experience, and I recommend that the Minister takes the opportunity to visit it.

What measures has the Minister taken to ensure that the salt distribution network is robust, even in severe weather? Are his officials in a position to provide more timely information and advice to local authorities on the availability of strategic salt stocks and on recommended salt spreading rates? During last year’s severe weather, the Highways Agency phone line for providing information on road conditions and reporting hazards missed its targets for response times in three separate weeks. What measures have been put in place to ensure the phone line has the capacity to function properly this year?

Just as we cannot afford Britain’s road network to seize up, so we must avoid a repeat of the disruption, delays, distress and economic damage caused by the failure of airports and parts of the rail network to function as well as they should have during the severe weather. The Select Committee report acknowledges that decisions on investment in both sectors are often rightly in the hands of private sector bodies, but that cannot mean that the Government wash their hands of responsibility.

Our major airports are an essential part of our strategic transport system and our economic competitiveness. The Begg report clearly gave the impression that provisions at Heathrow for dealing with severe weather and recovering from a period of enforced closure were woefully inadequate. Heathrow’s status as a global hub airport faces intense competition, and an inability to cope well with severe weather will not help it in any way. Let me therefore reinforce the importance of the question asked by my hon. Friend the Member for Liverpool, Riverside by asking whether sufficient runway clearing equipment is now in place at Heathrow and other airports. What involvement have Transport Ministers had in signing off revised snow plans for those airports?

The major problems on the railways last year revolved around the third-rail electrified network in the south-east. I was pleased to note from a written answer I received that some de-icing vehicles were made available for that network earlier this year. In October I was informed that 16 anti-icing multi-purpose vehicles and six snow and ice treatment trains would be available from today, 1 December. Are those indeed in place? Can the Minister also confirm whether locomotives are available on the third-rail network to rescue stalled trains? In the longer term, as my hon. Friend the Member for Liverpool, Riverside alluded to, the Quarmby review recommended that Ministers should look seriously at whether the time had come to replace the top contact system of third-rail electrification. No one should underestimate the scale of the cost of such a proposal, but it has warranted no mention in the national infrastructure plan, which was published on Tuesday. Has there been any work on the recommendation, and what conclusions have been reached?

Last year, as has been mentioned extensively, one of rail travellers’ key complaints was the failure of information systems. Often, station information screens were blank, because contingency timetables had not been uploaded to the national computer system. What measures are in place to prevent a reoccurrence of that problem? Some train operators provided a good standard of information, through both traditional and social media methods, throughout the disruption. Others seemed at times to give up. What discussions has the Minister had with the Association of Train Operating Companies and individual companies to ensure that best practice will be spread across the industry and that poor performers can be penalised?

On several occasions last year, passengers were trapped on powerless, stalled trains, without emergency blankets or emergency supplies of food or drink. On 27 October this year at column 285W I asked a written question on whether provision had been made for such supplies to be carried on trains during severe weather. I was concerned to receive a response that stated simply that the matter was the concern of the operating companies. We need Ministers to take a more hands-on approach than that. If necessary, they should consider instructing companies to make such provision. Will the Minister make a commitment to consider the issue and carry out a full analysis of which operating companies have made arrangements to carry blankets, water and food?

Following three severe winters, questions are rightly being asked about whether we have the right balance of investment for winter resilience. Governments of all shades, in recent decades, have perceived a decline in instances of severe winter weather, and have made investment decisions accordingly. It is possible, whether as a result of climate change or not, that we may need to revise our approach. After last winter, the then Secretary of State made a commitment to studying whether there was evidence that the cost-benefit analysis of investment in winter resilience had shifted. I would be grateful if the Minister would update us on any such work that is taking place.

When the Minister answers the question of my hon. Friend the Member for Liverpool, Riverside about the announcement of funding in the autumn statement, will he make it clear whether the investment that is being made will ensure that all the additional capacity that is being bought will be available this winter?

15:23

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

A huge range of questions were asked in the debate, and I will do my best to get through them. I thank the Select Committee on Transport for initiating the study and for producing a helpful and balanced report—indeed, its Chair, the hon. Member for Liverpool, Riverside (Mrs Ellman), made a helpful and balanced contribution today. The Committee is doing its job and the Government have found its comments useful in focusing our attention on the important issues.

As the hon. Lady and the Opposition spokesman, the hon. Member for Barrow and Furness (John Woodcock), said, last winter was extraordinarily cold. The hon. Gentleman referred to the fact that the temperature reached its lowest for 17 years; it was indeed exceptional. I am grateful that he did not seek to blame the Government for the weather—he almost did, but not quite. [Interruption.] If he wants to, that is fine. We were collectively—not just the Government, but local authorities and transport providers—better prepared in 2010 than in 2009, which also saw serious weather. I think that we are better prepared in 2011 than we were in 2010.

The availability of salt stocks has been mentioned. The hon. Member for Barrow and Furness said his leader sent him down a salt mine; my leader has not sent me down one yet, but perhaps that will come if I do not perform well this afternoon. I am happy to say that salt stocks are healthy: in October there were 2,755,000 tonnes of salt stocks, which compares favourably with—indeed, it is considerably more than—what we had last year. There were no problems with salt stocks either this year or last year. Had we had a Siberian winter, no doubt we might have had a problem, but even with an exceptional winter the salt stocks were perfectly adequate. We now have more stocks than last year, and having undertaken a survey of all local authorities, and all councils bar two have responded, we are confident about the figures we quote. In addition, we have published guidance on salt spread rates, which is available on the UK Roads Liaison Group website and through the Highways Agency. We are well prepared this year.

The hon. Member for Liverpool, Riverside asked whether all the Quarmby recommendations had been implemented in full. She will know that some of them were not for the Department for Transport, so I cannot definitively say whether all the local authorities have implemented all the measures identified for them. However, all the recommendations that relate to the Department for Transport have either been completely implemented, or have made significant progress toward implementation. If the hon. Lady wants to pursue a particular point, I shall be happy subsequently to provide her with information in recommendation-by-recommendation form; that is perfectly possible.

The hon. Lady asked whether we would have an independent review this winter. I hope that that will not be necessary. We are better prepared—I shall explain why I think so in a moment—and so are transport providers. If something were to go awry we would want to examine what happened—as would the Committee, I am sure—but I hope that will not happen.

The hon. Lady and my hon. Friend the Member for Norwich South (Simon Wright) highlighted the importance of preparations by the Met Office and the capacity to identify future weather patterns—at least beyond a few days. I believe that last winter the Met Office forecasts broadly reflected what occurred, which was useful, but it remains the case that severity can vary over relatively small distances, so an element of operational judgment on how reliable the information is will always be required by transport providers and, indeed—to pick up the point made by the hon. Member for Bolton West (Julie Hilling)—by those who make their own judgments about whether to venture out. Weather in this country can change markedly within five or 10 miles, so it is difficult to get even local radio forecasts very accurate. Incidentally, I am not responsible for BBC local radio cuts, and nor are the Government: it is a matter for the BBC what it does. I simply hope that the BBC can protect local radio, which is a valuable service and information source for the country.

The hon. Member for Liverpool, Riverside and my hon. Friend the Member for Norwich South both rightly asked about a potential £10 million investment in supercomputing capability for weather forecasting. We are considering that suggestion sympathetically. There is a need to understand the benefits of more detailed forecasting and its role alongside other measures designed to increase the resilience of transport infrastructure to disruption from extreme winter weather. We are working with economic and scientific colleagues across Government to review the evidence about winter weather patterns and to test whether current levels of investment in winter resilience are being optimised. The Met Office raised the idea of supercomputing capability. Perhaps the hon. Member for Liverpool, Riverside, as Committee Chair, knows that the previous Transport Secretary commissioned a review by the chief economist and chief scientist at the Department for Transport to establish whether there was a case for greater investment in measures to improve winter resilience. That review is also formally assessing the business case, and, if it is viable, the potential funding options for such an investment. The present Secretary of State has the report on her desk and will publish it shortly.

The response of aviation was rightly raised. It is undoubtedly true that there were significant problems at Heathrow last year, to which hon. Members rightly drew attention. The Committee referred to the criticism that major airports were under-investing in winter resilience equipment, and thought that that was borne out. The hon. Member for Liverpool, Riverside also mentioned the David Begg report in her opening remarks and the useful work that he has done. As she knows, we broadly agree with the thrust of the Committee’s observation on the level of airports’ investment in winter resilience. However, Heathrow and Gatwick have taken on board the need to do rather better than last year. They have put in place revised arrangements and made new investment to reduce the risk of disruption as a result of future severe winter events.

I can confirm that both airports have made significant investment in additional snow and ice clearance capacity and that Heathrow has committed more than £30 million to date, including on tripling its snow and ice clearance vehicle fleet and quadrupling staff numbers available for snow clearance. Gatwick has invested £8 million in further snow and ice clearance equipment, including the acquisition of snow clearance vehicles from Switzerland and the subsequent acquisition of 30 additional vehicles. Both airports have revised their operational command and control procedures to improve their response to severe weather.

At Heathrow airport, operators and others who use the airport have agreed capacity contingency plans that are enforceable through the airport’s local rules. Those plans will be initiated during periods of temporarily reduced capacity to deliver an effective schedule for passengers. Heathrow has tripled the number of vehicles available for snow clearance compared with December 2010—there are now 185 vehicles at the airport. It has increased the number of staff available for snow clearance from 117 to 468 per shift and it has a new reservist role, so that 950 non-operational staff can be deployed. It has agreed with industry on a new process for managing the necessary flight cancellations during disruption, which was mentioned, so that passengers have more timely and accurate information about whether their flight is operating. I entirely agree that it is important to do that given what happened last year at the airport. In answer to the hon. Member for Barrow and Furness, yes, I am confident that Heathrow and Gatwick are much better prepared this year than they were last year. There was, indeed, an ambiguity about whether Heathrow was closed. That was not helpful and I am hopeful—confident, even—that that will not occur this year.

The issue of emergency timetables was also mentioned in relation to Heathrow. As the hon. Lady rightly said, the former Secretary of State for Transport raised that possibility, and it is worth considering the matter. In principle, the Committee said that it can see the benefits to passengers of imposing an emergency timetable at busy airports. The Civil Aviation Authority will continue its work on improving airports’ resilience, including by monitoring the progress made by airports to improve their performance through the implementation of agreed capacity reduction plans in relation to an emergency timetable where appropriate. The operators and others at Heathrow airport unanimously agreed to capacity contingency plans being enforceable through the airport local rules. They will be introducing such plans if necessary as a result of the requirements that the winter imposes on them.

The Chair of the Select Committee referred to future plans for the CAA. Let me just find the relevant note on that. The hon. Lady was concerned about the draft Civil Aviation Bill and the plans for passenger representation. As I have already mentioned, the Civil Aviation Authority will continue to monitor the progress made by airports to improve their performance. There will be enforcement through the CAA through licensed conditions to facilitate greater airport resilience and a better passenger experience during any disruption. The CAA is taking an active interest in that matter, as I think the hon. Lady recognises.

There has also been an attempt to ensure better surface access to airports during disruption, which the hon. Lady mentioned. I can assure her that the Department for Transport will be monitoring future events, including access to airports, to ensure that there is co-ordination between modes of transport. That was recommendation 14 of the Committee’s report. We are engaging and have engaged with transport operators already to ensure that contingency plans are in place to deal with any events this year. However, although we and the operators can make the best plans possible, we are dependent on the weather. We cannot prepare for every single eventuality; we can simply do our best under the circumstances and ensure that we respond as best we can.

The information provided to passengers was raised by a couple of hon. Members. It is certainly true that the information on airlines and trains provided to passengers was not at its best. Some train companies are better than others, but we are concerned that accurate information needs to be provided on a timely basis, including on whether or not to travel. That needs to be clear. The hon. Member for Barrow and Furness asked what discussions I have had on either winter preparedness or passenger information during disruption. I have had extensive discussions with the train companies and with Network Rail. I have met them regularly on a monthly basis. During those meetings, we have considered passenger information during disruption and winter preparedness to try to ensure that, first, the trains are able to run—I will come on to the infrastructure points in a moment—and, secondly, that when something does occur, passengers are properly informed about what is happening and what action they should take.

That includes, as I mentioned in a debate yesterday or the day before, ensuring that when a train is stranded, appropriate steps are taken to ensure that passengers can get to a station as soon as possible, rather than potentially being stranded for a long time on a train. However, it is not appropriate to micro-manage train companies and for Department for Transport officials to count how many blankets are on trains. We have a responsibility to indicate to train companies that they should be prepared, but it is for them to take that forward on their own basis and to ensure they are properly prepared. Ultimately, the buck stops with them. We do not own the train companies, but we have a right to say to them that they should be prepared, and we have done that. However, it is up to them to ensure that they take that forward in their own way and they will be held accountable for any shortcomings that occur as a consequence.

Two or three hon. Members raised the matter of pavements. I entirely agree about the lack of attention that some local authorities have sometimes given to pavements. It is wrong simply to assume that people in vehicles are the only ones who matter. Many people have to get from A to B on foot and they deserve proper consideration, too. On a purely practical basis, there is no point keeping a bus route clear if the whole pavement around the bus stop is a sheet of ice, which I saw in my town of Lewes last winter. There needs to be some joined-up thinking. There also needs to be some thinking from local authorities to identify important passenger routes, such as doctors’ surgeries, to ensure that essential journeys carried out by foot can take place. I hope that the hon. Member for Bolton West will appreciate that, again, it is not for us to tell local authorities which roads and pavements should be clear, but as I have made plain to the Local Government Association and others, it is incumbent on them to think about the needs of those who are on foot, as well as those who are in vehicles.

I hope that we have made it easier for individuals who want to help to take action themselves by removing the suggestion that they will be subject to legal action if they clear their path or help in any other way. It was unhelpful that that suggestion got around and we have knocked it on the head. We have made it clear that we welcome people taking sensible steps to keep pavements clear both for themselves and for other people. We are also grateful to the farming community for the steps it has taken to ensure that it can help with vehicles that, for example, are stranded in country lanes and that would otherwise be there for some time. The idea that people should help each other is not new, but it does not do any harm to reiterate it today.

I have dealt with emergency timetables, the CAA and the surface access. On the Highways Agency and crisis response, I am happy to say that the agency has developed and implemented a revised crisis management policy to co-ordinate its services better during a severe winter incident. That policy ensures that an appropriate level of Highways Agency command is in place to take over all strategic management. Its aim is improved co-ordination, thereby mitigating the impact of severe weather in the first instance and, if necessary, helping to speed up the recovery of the network. As the hon. Member for Liverpool, Riverside said, the Highways Agency did a pretty good job last year, but obviously there is still room for improvement and we are keen to see that.

[John Woodcock]

Does that include extra capacity on the emergency telephone line, if needed? If the Minister is not sure of the answer, will he write to me?

[Norman Baker]

I will mull that over and provide an answer before the end of the debate.

The hon. Gentleman asked about snow wardens. The Local Government Group has set up a website for local authorities to share best practice, including what to do about snow wardens and encouraging that process. I understand that many authorities already have snow warden schemes in place.

The hon. Member for Bolton West suggested that we might do more to lean on local authorities. We try to resist the temptation to suggest that Whitehall knows best—that we can always run what happens in Kettering better than people in Kettering can. We do not want to do that. I draw the hon. Lady’s attention to the fact that a local authority has a general duty under section 41 of the Highways Act 1980 to ensure, as far as is reasonably practical, that safe passage along a highway is not threatened by snow or ice. If she or anyone else thinks that local authorities are failing in that duty, they can of course pursue them appropriately, but that is the general duty that I hope gives some reassurance and cover.

I was asked about variable message signs on highways to improve the information that can be displayed. I take the point that sometimes messages are first seen from a long way away and may not be current when they are reached. I also take the point—I referred to it earlier—that localised weather conditions can be such that the message actually gives inaccurate information. However, the Highways Agency is widening the use of variable message signs to improve the messages that can be displayed during severe weather. They will now be able to be used to provide severe weather-related incident information and warnings of forecasts of severe weather, as well as messages saying that weather will be particularly bad in any particular area. The agency is trying to provide that information in a more localised and more up-to-date fashion, bearing in mind the constraints that I mentioned.

As was mentioned, the Highways Agency is developing a comprehensive publicity campaign for this winter, which is aimed at encouraging road users to take more responsibility for their actions during severe weather through focused messages. Road users are being encouraged to plan their journeys ahead of severe weather, to check weather forecasts before setting out, and to prepare their car and carry an emergency kit with them. Variable messages will be used to make that point to drivers. The campaign is called “Make time for winter”. I am happy to tell the hon. Member for Liverpool, Riverside that that partnership marketing campaign takes on board the comments made by her Committee and responds directly to them. The campaign was launched on 24 October, in unison with the Cabinet Office’s “Get Ready for Winter” and Scotland’s “Ready Scotland” campaigns. I hope that they will be useful in making drivers consider their actions carefully throughout the winter period.

It is difficult to be specific about whether drivers should go out. Ultimately, people have to make their own judgments based on common sense. It is common for the Government to tell individuals not to fly to a particular country because of the political situation unless they have to. We have to rely on individuals to make those judgments for themselves. All we can do is put a flag up and say, “Hang on a minute, look at the facts in this particular case.” That is what we will try to do.

The information about Highways Agency telephone lines has now come to me. I am told that the agency has a wide range of channels for members of the public to contact it and is not aware of any particular problems with the telephone line systems. However, as the hon. Member for Barrow and Furness raised the matter, I will look into it and write to him with any further information.

The Highways Agency carried out a complete review of its performance last winter, taking into account the recommendations of both the Transport Committee and the Quarmby audit. It has worked with a number of key stakeholders to develop measures to improve preparedness for severe weather this winter. I have referred to some of those measures, but it is also carrying out a series of winter snow desk exercises and stakeholder briefing sessions to test its preparedness for the coming winter, and issuing guidance to service providers to confirm elements of the winter service that need to be exercised in advance of winter. It has taken other steps, including better liaison with the Met Office.

I mentioned that I regularly raise passenger information during disruption with train companies. It may be useful for hon. Members to know that the Office of Rail Regulation has been consulting on making good passenger information a licence condition for train operating companies. I understand that it is likely to announce its conclusions shortly, after consultation, and I will be interested to hear what it says—it is, of course, independent of Government.

It may be useful to comment on the train companies’ preparation in terms of both trains and the network, so that we can be more confident than perhaps some people have been in the resilience of the rail network for the coming winter. I think that it is fair to say that both the train companies and Network Rail have taken significant steps to improve their preparedness compared with last year—and, indeed, last year was better than the year before. Network Rail now has key route strategies for each route, which set out arrangements for keeping route lines and critical junctions open and which facilities can be expected to be provided.

On the routes that are electrified with third-rail current—a point raised by the hon. Member for Barrow and Furness—which are by and large south of London, Network Rail has introduced conductor rail heating in critical locations, which will keep it clear of snow and ice. The pilot projects so far have been successful and we are considering further roll-out. Network Rail has also introduced a new and improved snow and ice clearance train, including a snow plough and equipment to keep the conductor rail free of ice and snow. The hon. Gentleman also asked whether the commitment to meet certain deadlines by 1 December had been met. I am assured that the answer is yes, it has been met.

Extra point heaters have been installed in some locations to ensure that points remain operational—as hon. Members will know, points are particularly vulnerable to freezing, which can then cause a major problem in either direction for quite some distance—and maintenance has been carried out on existing point heaters to ensure that they remain reliable. The train companies have already undertaken maintenance work on their train fleets to improve reliability during winter operation, including action to minimise problems with frozen sliding doors and frozen couplings. Some fleets on the third-rail network have been equipped to spray de-icing fluid to keep the conductor rail clear of ice and snow. They have also ensured that supplies of salt and de-icing products are available at stations and depots, to keep platforms and other areas clear of snow and ice for the benefit of passenger safety.

The train companies are also being encouraged by us to liaise with local highway authorities to ensure that roads leading to stations and depots are kept clear of snow and ice—the hon. Member for Liverpool, Riverside talked about co-ordination across modes—and staffing arrangements have been reviewed to ensure that staff are available to operate the service. A number of train companies have made arrangements to accommodate staff who are unable to get home.

Several train companies have produced contingency timetables that will be introduced in the event of severe winter weather. They have been validated by Network Rail to ensure that they are capable of being operated robustly. Improvements in timetabling software mean that they can be uploaded to industry journey-planning systems overnight. Steps have been taken—sometimes high-tech, sometimes low—to improve trains and keep them resilient, including, according to my crude understanding, stuffing a sock into the horn to ensure that it does not fail, because if the horn fails, the train cannot go out. Every possibility, therefore, is being covered by the train companies to ensure that trains run.

My experience last year was that the train companies tried hard to ensure that trains ran—for example, Virgin ran trains to get people home, although they had to run slowly. One of the points I make to officials and others in the rail industry is that it would not be right to penalise companies through their performance measures if they were doing the right thing and getting passengers home rather than meeting some abstract performance measure. Southern also performed well by running diesel stock down the Brighton main line, which enabled passengers to get home under diesel traction when the third rail was not available; other companies took similarly helpful measures. The information from one or two companies was clearly inadequate, which caused a great deal of unhappiness among passengers, but I am confident that those companies will be much better prepared to deal with passenger disruption this year.

I hope that I have covered most of the points made today. If I have missed any out, I will pick up on them and write to Members accordingly.

15:50

[Mrs Ellman]

With the leave of the House, I will conclude the debate. We have had an interesting and helpful discussion. Individual hon. Members have raised key points, and I thank the Minister for his comprehensive reply, which indicates that the subject is being treated seriously and action is being taken. It is an ongoing issue to which we may well return, but I have been encouraged to hear how the Government are dealing with it.

Bus Services

Thursday 1st December 2011 Westminster Hall

[Relevant documents: Eighth Report from the Transport Committee, “Bus Services after the Spending Review”, HC 750, and the Government Response, Ninth Special Report, HC 1550.]

15:51

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

Buses are the most popular form of public transport in this country. There were 4.6 billion bus passenger journeys in England in 2009-10, compared with 1.3 billion rail journeys, yet buses rarely attract high-profile attention. In part that is because central Government do not take as close an interest in buses as they do in rail travel, but I suspect another reason. Outside London, buses are disproportionately used by older and less well-off people who, regrettably, do not attract the same attention as rail travellers. However, buses are vital, connecting people with town centres, jobs, colleges, shopping, family and friends, and when bus services are cut, people’s lives are badly affected.

Last year’s spending review included three decisions with significant implications for bus services in England; nearly half of bus operating revenue comes from public sources, so any reductions from such sources are highly relevant. First, support for local authorities overall was cut by 28% and funding for local buses was no longer ring-fenced. That affects those services paid for by local authorities for social reasons, or about 20% of services overall, although that figure varies from place to place. The TAS Partnership estimated that that will eventually reduce the subsidies available to bus services by £125 million. By February, local authorities had confirmed an overall reduction of £44 million for 2011-12.

Secondly, changes in the formula for concessionary travel reimbursement have taken about £100 million away from local authorities. Concessionary travel reimbursement is claimed to be provided on a “no better off, no worse off” basis, and the formula changes are intended to iron out teething problems found during the introduction of the scheme under the previous Government.

Thirdly, the Government announced a 20% reduction in the bus service operators grant, a form of fuel duty rebate, to take effect from April 2012. That will affect all bus services, commercial as well as subsidised, and is estimated to remove around £60 million from the industry. I should add that the increased cost of diesel has also put up bus operators’ costs and, inevitably, will have put pressure on services.

The total reduction in revenue for the English bus industry, outside London which has rather different arrangements and which we did not consider in our investigation, is likely to be between £200 million and £300 million per annum. By June 2011, 70% of English local authorities had decided to reduce funding for supported bus services, which affected some urban as well as rural services. Some authorities, such as those of Hartlepool and Cambridgeshire announced that they would cut some of their subsidised services altogether.

Our inquiry took place in the first half of this year, and we published our report in August. We wanted to find out what the effect of the spending review changes was likely to be and to consider how it could be ameliorated. We were particularly keen to hear the views of bus users and took specific measures to find out exactly what was happening to them. Working with the excellent parliamentary outreach service, we distributed leaflets about our inquiry in libraries and citizens advice bureaux in areas that we knew to be most affected by cuts in services. We used parliamentary petitions to identify bus service campaigners in particular areas. We also took oral evidence from a panel of bus users, and that evidence brought home to the Committee and to the public the practical implications of cuts in essential services. We received a great deal of correspondence and evidence about the impact of bus cuts on people’s lives, from all sources, including letters from disabled people and senior citizens, telling us about their experiences and how cuts in services meant that they could no longer socialise with friends and families. We heard from students who had had to leave their college courses because they could no longer get to college on time and, after we had published our report, I met members of the Liverpool Schools’ Parliament who reinforced that point. They spoke about the impact of cuts in local bus services on the accessibility of school and college to them. Time and again, the letters and all the correspondence, petitions and personal representations showed why bus services matter and should not be left to market forces.

Our main conclusion was that the combined impact of the three spending review changes to bus funding posed the greatest financial challenge to the industry for a generation. We were not convinced that the Government had a full understanding of the impact of the funding changes on subsidised and commercial services, and we recommended that they should co-ordinate the collation of information about changes to subsidised services. I am pleased that the Government agreed with that recommendation, and they are now working on it with the Association of Transport Coordinating Officers. Can the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), tell us when that information will be ready, so that we can monitor how the provision of subsidised bus services is changing throughout the country? Has the Minister been in touch with local authorities about their plans for subsidised services in 2012-13? It is not solely about local authorities, however; how is the commercial sector responding? What information has been received about the likelihood of further cuts? Many hon. Members know from their constituency work that local bus services, commercial as well as subsidised, are being reduced.

The Government have stated that they hope that communities, operators and local authorities can work together to improve local bus services. I certainly agree with that aim, but will it actually happen? The Committee recommended that the Government should identify the barriers to co-ordinating different types of transport services. Does the Minister agree that the Department should do so, and report on what progress has been made?

We looked at the possibility of community transport schemes playing a greater role in delivering local bus services. The Government are considering ways of making such services more commercially viable, but it is unclear how that consideration is progressing. I was disappointed that one option for expanding community transport, by allowing people to use their concessionary fare passes on community transport, was rejected. The Government clearly want to see community transport expand, and the Committee welcomed their new fund in support of that, in particular in rural areas, but they do not seem to be resolving what is a mounting problem. Perhaps the Minister could clarify the Government strategy.

I am also worried that the changes to the bus service operators grant, which are due to be introduced next spring, will hit both subsidised and commercial bus services hard. At the time of our inquiry, the Minister’s view was that operators would be able to absorb most of the changes. The bus industry has challenged that view, and I would be interested to hear the Government’s assessment of the impact of reducing BSOG to bus services next year.

[Mr Hugh Bayley in the Chair]

The Government are reviewing BSOG to see whether it can be delivered in a different way—for example, by paying it to local authorities instead of to bus operators. I would be interested to hear the Government’s thinking on that. It is important that the money provided by the Government is earmarked for local bus services. That must be achieved, whatever means are adopted.

One theme that emerged from the public’s evidence was that consultation on changes to bus services is often inadequate. There were examples of good practice, but passengers were sometimes not asked about changes, or were consulted on only one option. That is not good enough, especially when considering how important bus services are to their users. The Committee recommended that Passenger Focus should develop a consultation toolkit for local authorities to use when proposing changes to subsidised services, and the Government agreed. What progress has been made? Is the toolkit ready, and will the Department monitor how it is used, and encourage local authorities to follow best practice?

The need for proper consultation does not rest solely with local authorities and the integrated transport authorities. Private bus operators also have responsibilities, and they should encourage customer feedback about services, and consult on changes before they are registered with the traffic commissioners. Hon. Members will know from their constituency work how worried people become about abrupt changes to service provision, including those from commercial operators. We need better notice, better consultation, and more involvement from bus users. If there are financial difficulties—the public are certainly aware that there are financial difficulties in almost every public service—the users of the service often have ideas for how to make best use of available resources. It would be good to see more consultation with local people before decisions are made.

In their response to our report, the Government seemed to be sympathetic to that argument, but said that they wanted to reflect on the Competition Commission’s proposals before reaching a view. The commission’s role in looking at the future pattern of bus services will be extremely important. It has been examining the competitiveness of the bus market since the beginning of last year. Consequently, we did not examine that issue, or consider in depth how legislation on quality partnerships and contracts has been used. However, we recommended that local authorities and integrated transport authorities should use the provisions in the Local Transport Act 2008 to achieve better partnership working, and I am pleased that the Government agreed.

The Competition Commission’s findings are due to be published this month, but there has already been a lot of discussion about whether they will make a significant difference to the transport market, and specifically the bus market. Some of the information published about bus companies’ strategies in places such as the north-east does not suggest that competition is working effectively. There seems to be a reluctance to tackle that by using quality contracts, or franchising. I note that Tyne and Wear transport authority is actively considering a quality contract approach. It would be helpful to know whether the Government are taking an interest in that, and examining barriers in authorities that want to agree quality contracts. If there are barriers, they should be addressed, and I hope that the Government are taking an interest in that. The Select Committee will consider the Competition Commission’s report when it is published, and I expect that we will return to this issue in the new year.

I want to finish by referring to the concessionary fare scheme, which enables free local transport throughout the country. It was one of the biggest successes of the previous Government’s transport policy. I congratulate the Minister on ensuring that it was not a victim of the spending review, which was significant. Passenger Focus found that 39% of older bus pass holders made a greater number of local journeys by bus than before they obtained their passes. That resulted in more social inclusion, and enabled them to be more active than would otherwise have been the case. The importance of transport includes health implications, and one area that health authorities have identified is that it is important for older people to maintain an active life for good health. The concessionary free pass is a major factor in achieving that.

When we examined how the concessionary pass scheme was working, we concluded that to inform development of future policy, data are required on how it is working, who uses it most, and who finds it most beneficial. In their response, the Government did not seem to accept that, and perhaps the Minister will reconsider. The scheme is highly valued, and we think there may be scope for smart ticketing to reduce its cost.

Our inquiry shone a light on how the spending review is affecting a crucial but often under-appreciated and under-reported part of our transport network. We engaged with the public in innovative ways to publicise why buses matter, and to ensure that we have the best possible information from people who are dependent on buses. We are worried about the impact of the cuts that have taken place and those to come. The outcome of the Competition Commission’s work, and how the Government respond to it, will be crucial to development of the bus industry—bus services for passengers—over the next few years. The Committee will continue to pay close attention to bus services, and I anticipate questioning the Minister on that in the Committee in the not-too-distant future.

16:07

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

It is a pleasure to serve under your chairmanship, Mr Bayley. The Committee’s inquiry has been one of the more enlightening and intriguing it has embarked upon since I joined it after the election. It certainly brought home to me the fact that buses should be part of total services, and that many people depend on them. In a relatively deprived constituency such as mine, where many people cannot afford a motor car or are not well enough or active enough to drive one, buses are essential. Extracting a definition of a socially necessary journey from some of the commercial operators who appeared before us was frustrating. They squirmed but could not provide an answer. They won the award for worst witnesses of the year so far.

The inquiry enabled me to mull over the Government’s role in bus services. Is it appropriate to expect a Minister in Whitehall to pull a lever, and to raise the quality of services throughout the country? It is an unavoidable truth that local bus services are best controlled by local councils, or some locally accountable body. Ever since the Committee’s first inquiry on economic growth in transport, we have heard talk of new regional bodies that will allow transport decision making closer to the ground. However, we have yet to see anything beyond potential names emerging from the Department, and I would welcome more guidance from the Government on when there might be progress.

The Government’s other role is to set a good example. As the hon. Member for Liverpool, Riverside (Mrs Ellman) said, we had some truly lamentable examples of consultation, and calling some of them consultation was a joke. It was a case of “We’re removing the service, and if the passengers don’t like it, hard luck because we’re doing it anyway.” That is not consultation; that is “get lost” or “get knotted”. Nevertheless, central Government have a role to play.

I was bored one Sunday afternoon, so I started looking at the Government’s official response to the report. I sat at my computer trying to open complicated Excel spreadsheets of statistical data. I am sure it is a marvellous resource if someone has a spare lifetime to get to grips with it. I was intrigued to note that a review is being conducted of what data are being collected. I hope that most of them do not disappear as part of some review. I was struck by a few statistics. I wondered why 77% of Scottish buses have ITSO card readers, but only 18% of buses in English non-metropolitan areas have them. I thought that that was an interesting difference.

I also noted that English non-metropolitan areas have now seen the third annual decline in a row in the number of overall passengers. For the first time, concessionary fare journeys dipped in English non-metropolitan areas over the past year. I know that statistics are not everything. I noted that in Blackpool, passenger journeys had dropped from 16 million five years ago to just 14.5 million in the past year. I know why: we have had major civil engineering works and it has been impossible to get anywhere in the town centre. Statistics can be a little misleading at times and do not always paint the whole picture, but they struck me as interesting examples of some of the trends in bus ridership.

I raise those statistics, but I do not want the Minister to think I oppose what he is doing. I think that what the Government are doing is fair and balanced and reflects where we are as an economy and as a nation within the global economy. There is a healthy dose of localism in what the Minister proposes. I also recognise the Minister’s own deep, personal commitment to buses and to public transport more generally, and I praise him for it. I echo the comments of the hon. Member for Liverpool, Riverside on the importance of the Competition Commission’s report, which is continually forthcoming. If I believe what I read in my newspapers, I hope it will criticise what seems to be an utterly dysfunctional market in certain parts of the country.

The Minister will not be surprised to learn that I wish to devote the bulk of my remarks to community transport. Rather than re-rehearse my ten-minute rule Bill, which called for the extension of the concessionary fares scheme to community transport, I want to reflect on some of the Government’s responses in the ninth special report. Like the Minister, I share the desire to put community transport on a more sustainable footing, requiring less public subsidy and building on the social enterprise model. In the long-term, that has to be the way ahead.

I welcome the dedicated £10 million fund for community transport. I welcome, too, the efforts of the Department for Environment, Food and Rural Affairs with the rural social enterprise fund. However, we must also acknowledge that community transport is not just a rural phenomenon —it matters greatly in urban areas, too. In some ways, for more vulnerable, marginal groups, it matters more in urban areas.

I certainly take the Minister’s point—I assume it is the Minister’s, because it sounded as though he had drafted it—in response to recommendation 13 and the creative imagination that local authorities must apply to circumstances in which they withdraw supported services. Where that is occurring, it makes immense sense for community transport to step in and fill a hole for a relatively small amount of money. I agree with the Minister that that is a sensible and useful way forward for community transport. None the less, I am concerned at the complexity of some of the legislation, which represents a barrier to many volunteers, who get terribly confused, as I continue to do, over section 19 and section 22 services—over who to pay and what to do. It is a technical and complex minefield. I recognise that the Vehicle and Operator Services Agency and traffic commissioners put a lot of effort into trying to guide providers through that minefield, but it is still deeply complex.

At the Community Transport Association’s conference this morning, I heard the Minister’s comments about why he was reluctant to extend concessionary fares to section 19 services. For those who were not there, I will paraphrase his point: it would cause a policy issue to allow those in what is essentially a private members’ organisation, club or society—whatever we want to call it—to have access to a wider concessionary fares scheme. I thought about that over lunch. It strikes me that that is coming at it from the wrong way. Many of those people have to join a dial-a-ride scheme because they cannot access mainstream public transport in the first place. This is perhaps part of a dialogue rather than a direct challenge, but I wonder whether the problem lies more with the Transport Act 1985 and the higher threshold it sets for accessing section 19 services, rather than the reason given not to extend concessionary fare schemes to section 19 services.

I am intrigued—I think that is the correct word—by the Government’s response to the wider issue of concessionary fares. The Department rightly points out that community transport will usually offer a

“more flexible, personal service”,

which could become

“the mode of choice for concessionary pass holders.”

I would not deny that a sudden, rapid overnight expansion of community transport would undoubtedly cause problems for commercially provided and supported services, but I struggle to understand why the provision of a high quality, excellent service that responds to people’s needs should be seen as a problem. I have never been one to believe in levelling down to the lowest common denominator. That is one reason I find myself on the Conservative Benches. I would like other mainstream providers to be encouraged to raise their game rather than be told, “Don’t worry, we are not going to make it too uncomfortable for you. We are going to make sure the community transport lot stay in their box and do not put you to shame.” That would not be terribly helpful.

I understand the Minister’s point about the possible dangers to supported rural bus services, but we must realise, as the report did, that although more people may have concessionary fare cards, they actually have fewer buses on which to use them. That is my underlying concern.

I am thoroughly pleased that the Government have lived up to the pre-election pledges of both parties to protect the concessionary fares scheme. That is entirely right and proper, but we now have to ensure that vulnerable citizens in my and other Members’ constituencies have the services that they need to ensure that they can get to where they need to go. I am not convinced that the mindset of local councils or local commercial providers is such that they understand that vulnerable people need to get to GP surgeries, hospitals and libraries, and that that is where the bus network should go. At the moment, it is a patchwork quilt of constantly changing routes and services that confuses passengers, providers and even Members of Parliament. I ask the Minister to do one thing: hurry up with his consultation toolkit and make sure that passengers are meaningfully involved when local authorities consult on service changes.

16:18

[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bayley. It is always a pleasure to follow the hon. Member for Blackpool North and Cleveleys (Paul Maynard), who, like me, represents a coastal town.

Before I begin my comments, may I pay tribute to Mr Thomas Bunce, who was a resident of Burbank in my constituency? He worked hard to secure adequate bus provision—particularly the 516 service—for the community. Sadly, he died suddenly in September after a journalist had been to see him to discuss bus services. Hartlepool and Burbank are poorer for Mr Bunce’s passing. I hope the House will join me in paying tribute to him and extending our gratitude and sympathy to his family. [Hon. Members: “Hear, hear.”]

I am grateful for this opportunity to debate an important issue that is important to my constituency, and I thank the Chair of the Transport Committee, my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), and her Committee for raising this topic, and for encouraging members of the public who are affected by cuts to services to contribute to the inquiry. After seven years in the House, I cannot think of another Select Committee inquiry in which the Chair and members of the Committee actively encouraged members of the public to contribute to its findings. It is a fantastic model that we should use in future in the House.

Hartlepool has one of the worst bus services anywhere in the country—a situation that has worsened as a result of the comprehensive spending review. Due to the worst local government financial settlement for a generation, the local authority has withdrawn all public subsidy to private bus operators. In March, I raised the issue of bus services in Hartlepool on the Floor of the House through a petition of residents, and I encouraged Hartlepool residents to get in touch with the inquiry and express their feelings. Together with the Committee’s active encouragement of public participation, it meant that—as usual—Hartlepudlians did not disappoint. The Committee’s report features heavily the opinions of Hartlepool residents on the loss of their bus services; pages 12 and 13 contain quotes from nine people, five of whom are my constituents. Their views have had a big impact on the Committee and on the shadow spokesman, my hon. Friend the Member for Barrow and Furness (John Woodcock), with whom I have discussed this issue.

Mrs Olly, 80 years old, stated:

“I appreciate that spending reviews were needed and accept a reduced service but to discontinue the service altogether is appalling.”

Mrs Robinson said:

“I am a carer for my 85 year old father who has just undergone an operation for bowel cancer and also has heart problems. I used to get the 516 bus service (this has now been completely withdrawn). It now costs me £11 per day by taxi so am only visiting my father three days a week which is leaving him alone four days in each week.”

Miss Raw declared:

“The bus service from Elwick to Hartlepool has been withdrawn leaving the village completely cut off from Hartlepool. I do not drive and therefore am finding it very difficult to shop for essentials, visit doctors, dentists, opticians, banks, hospital visits etc. Also I no longer visit friends, go to the theatre, or cinema, especially in the evening. In fact we are completely isolated.”

Finally, Mrs Power stated:

“Since the removal of the bus service my daughter now has no way of getting to and from college. Is she surely not entitled to the education she deserves? My daughter works very hard and gets excellent grades and I feel appalled that her future education is being jeopardised in this way!”

On publication of the report, my hon. Friend the Member for Liverpool, Riverside kindly gave an interview to my local paper, the Hartlepool Mail:

“We received a lot of information from people in Hartlepool which demonstrated the problems caused by the withdrawal of local bus services…The information was very dramatic, which showed the impact it had… Hopefully this will make the Government think again about planned cuts… I would like to thank the people of Hartlepool who gave us the information.”

I echo that thanks.

As I said, Hartlepool has a poor bus service. That results from a number of factors, not least, as the hon. Member for Blackpool North and Cleveleys pointed out, that in many areas—and in my area in particular—the market for bus services does not operate effectively. Passengers do not have the choice that a market should provide, and they are forced to endure poor and inadequate provision from a monopolistic provider—Stagecoach. That company’s disdain for passengers was demonstrated a few weeks ago when, with Councillor Allan Barclay, I met about 40 residents from Ryehill Gardens. They are mostly elderly, cannot afford taxis and are effectively isolated as a result of changes to and withdrawals of bus provision. They do not want an extra bus service; they want the number 3 service to be diverted—perhaps just once or twice a day—so that it goes into town and comes back via Ryehill Gardens, allowing them to travel to and from town, get groceries, attend appointments or meet friends. On average, that diversion would add about seven minutes twice a day to the existing bus service. Stagecoach rejected that suggestion and—perhaps even worse—it did not give residents the courtesy of a meeting to explain its decision. Members will agree that that is not good enough, and it demonstrates all too vividly the contempt—that is not too strong a word—shown by Stagecoach, and why people in England need a complete change in the provision and regulation of bus services.

The Committee reported on bus services after the comprehensive spending review, but in the week of the autumn statement perhaps we should bring it forward and talk about future financial arrangements. The report stated:

“The combination of the reduction in local authorities’ revenue expenditure and changes to the Department for Transport’s concessionary fares reimbursement guidance in 2011-12, with the 20% reduction in Bus Service Operators’ Grant (BSOG) due to be implemented in 2012-13, has created the greatest financial challenge for the English bus industry for a generation. The combined impact of these funding changes will, in some parts of the country—”

Hartlepool, for example—

“have a disproportionately adverse impact on the provision of local bus services and the level of bus fares.”

That is one of the report’s central paragraphs.

As my hon. Friend the Member for Liverpool, Riverside said, local government was hit hard in the CSR. Revenue expenditure will be cut by 28% over four years, with central Government assistance going from about £38.5 billion in 2010-11 to £22.9 billion in 2014-15. As a result of this week’s autumn statement, however, it will get a lot worse. This week, the Chancellor confirmed that his deficit reduction targets will not be met in this Parliament, and that he will have to extend them over a further two years. That will mean more pain over a longer period, and it will be concentrated not on capital expenditure but current spending. The autumn statement confirmed that current spending will be cut by an additional £910 million in 2012-13, £1.175 billion in 2013-14, and £1.735 billion in 2014-15. After this Parliament, the figures become unsustainable and economically dangerous—£8 billion and £15 billion in 2015-16 and 2016-17 respectively.

Local government and transport will bear the brunt of many of those changes, and I predict that the cut to BSOG in 2012-13 will be much worse than the 20% predicted. Will the Minister indicate how he intends to combat what the Chancellor laid out in the autumn statement, and say how he expects England to have a functioning bus transport service, given the astonishing budget cuts currently planned that are only going to get worse?

As the Committee pointed out, bus passengers are facing their biggest challenge since the second world war. On behalf of my constituents, I thank the Committee for its work in highlighting the issue and putting pressure on the Government. As the hon. Member for Blackpool North and Cleveleys said, the current model in which monopolistic bus providers are able to cherry-pick services and make excessive profits cannot be sustained, especially at the expense of important social routes, and cuts to Government budgets tip that model over the edge. Communities such as mine would welcome and encourage a co-ordinated and sufficiently funded public transport service, but that can happen only if a strong Transport Minister backs this important issue in Whitehall against the Chancellor, and takes steps to remove power from monopolistic providers, thereby re-regulating bus provision in England.

16:28

[Iain Stewart (Milton Keynes South) (Con)]

It is always a pleasure to serve under your chairmanship, Mr Bayley, and I add my thanks and congratulations to the Chair of the Transport Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman). She comprehensively set out the evidence taken by the Committee and the conclusions that it reached, and I was proud to be part of that investigation.

I wish to pick up on one or two points in the report, add some experiences from my local area and give one or two international examples that I have researched. I was struck by the variation in the ways that local authorities around the country responded to the admittedly challenging economic circumstances in which we now operate. Some authorities have taken a hatchet to bus services. The hon. Member for Hartlepool (Mr Wright) gave evidence of that from his area. Other authorities have responded innovatively and positively and worked hard to protect local bus services.

I shall give an example from my own local authority in Milton Keynes. It predates the comprehensive spending review. Just after I was elected, in May 2010, the local bus operator, Arriva, completely reorganised its network and timetables. It said that it had had a consultation on that. As my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) said, it was anything but a consultation. Indeed, some people turned up on the first Monday of the new system, expecting their usual bus to turn up, but it was not there. In the first chaotic few weeks of being a new Member of the House, my mailbag and e-mail inbox were flooded with complaints from patients who could not get to their GP surgery, from students who had missed exams and from shoppers who could not get to their local shops. There were all sorts of problems. That was one of the first big local issues that I had to deal with. I was lucky enough to be able to secure an Adjournment debate in the Chamber in the first few weeks after the election. The Minister may recall responding to it.

I am happy to report that many of the problems have now been remedied. The situation is not perfect, but through work with the local council, with Arriva and with the new bus users group that was set up, many of the problems have been solved. I raise that as an example because consultation is vital. Bus services need to be responsive to the needs of the local area, and those needs may change as time goes on. It is important to talk to the users—the bus passengers—but also to the local service providers, such as the GP surgeries, local colleges and schools and retailers, so that a local bus service is provided that people want to use and that generates additional traffic.

Another issue in relation to which good local consultation is vital is concessionary fares. We have talked about the concession card. I am glad that that has been preserved, but of course it applies only to off-peak services, and one problem identified to me locally is that pensioners want to use buses in the peak time. Some still wish to work; we are all being encouraged to work for longer and longer. They also have to get to some services before the 9.30 am cut-off. The shadow Minister, the hon. Member for Barrow and Furness (John Woodcock), indicates from a sedentary position a financial issue. I am happy to report that in Milton Keynes we have come to a deal. This relates to the point about consultation. The local authority and Arriva have worked together to provide not free bus travel for pensioners before 9.30, but a concessionary fare of 50p a journey. During consultation, people who would be using the buses said that they would be happy to pay a fare at that level. That was found out through a very effective form of local consultation.

As other hon. Members have said, it is important to share that good practice throughout the country, because some local authorities clearly have not taken that approach. The evidence from my area is that the local authority has done that. I strongly urge the Minister to take up the recommendations that the Select Committee made about a consultation toolkit and a mechanism for disseminating good practice throughout the country. I have a fairly open mind about what the best forum for that is. It may be the Department itself, the Local Government Association or another forum. Clearly, there are examples of good and bad practice, and we need to ensure that the good practice is rolled out as far as possible.

I want to touch on not just current bus services, but the planning for future bus services. Milton Keynes is a fast-growing area, so what applies to us may not be relevant in other areas, but with house building forecast to grow quite significantly in future years, I think that such planning will be an important issue in many areas. I am talking about planning properly for new bus services. I want to highlight the Oxley Park area of my constituency. That is a new-build housing estate on the western edge of Milton Keynes. The good part was that there was a plan for a new bus route going through it, with stops all the way along so that people could easily get to the centre of Milton Keynes and to other key destinations in the authority area. That was all well and good, and it was financed by some section 106 money and through other agreements with the house builders to put in that facility.

The problem has arisen because the design of the estate had to meet density targets. The houses are crammed in; the main road through the estate is quite narrow; and there is not sufficient car parking space. That means that the bus drivers have to go through a chicane of parked cars. Sometimes they cannot get through at all. There are issues of road safety: there are many young families in the area, and kids naturally want to play outside. There is also a noise problem because the houses have been built right up to the pavement. The buses, with diesel engines, make a noise, and the service runs until quite late, so I have had many complaints from residents saying that they cannot get to sleep because of it. That is providing a disincentive to bus use—people are campaigning for the bus route to be removed.

However, with proper planning—I welcome the provisions of the Localism Act 2011 on better community involvement in designing new housing areas—we should be able to plan new housing areas with bus routes in a way that does not cause problems and in such a way that people want to use them. I hope that the Minister will liaise with his colleagues in the Department for Communities and Local Government and take that suggestion forward.

I have one other point about local consultation, and it relates to finding innovative new ways of delivering services. Milton Keynes is largely an urban area—85% of the population of the local authority area lives in the urban centre of it—but it covers quite a wide rural hinterland as well. There are quite a number of small villages on the outskirts with very small populations. Most of those people drive, but there are a few people for whom a bus service is a lifeline, although it is not commercially viable to provide a regular bus service that one person uses every other day. As far as I am aware, the council has not come to any conclusions, but it is exploring innovative new ways of not having a bus service but helping people to use a local taxi service at no additional cost over what the bus fare would be. I am talking about a more responsive service, which they will want to use, as opposed to a static timetable that may be inconvenient for them. Again, that is where local innovation can come to the fore. There will be plenty of other examples across the country, and those good ideas can be shared.

I want to move on to a more general point about strategic planning in relation to buses. Buses have always been the poor cousin of the transport system. Having to use a bus is almost looked down on, but that need not be the position. I shall give an international example. In the summer recess, I was invited to go to Switzerland by Swiss Federal Railways. That was primarily to look at its railway system, but as part of the visit, we looked at its transport system and planning as a whole. On one of the days, we went to visit the small city of Zug, just south of Zürich. It has put in a new commuter railway line from the city centre to the outskirts. We travelled on that and got to the suburban station. We then watched what happened. A train arrived from the centre of town. Everyone got off and went to the adjacent bus station, where six buses were waiting. Five minutes later, they all dispersed to the housing areas around the station. Fifteen minutes later, they all came back in, and the passengers had five minutes to cross to the railway platform. The next train then went back into the centre of Zurich. The system was integrated, with some public and some private operators, who worked together to provide a reliable and regular service.

Another thing that struck me from that example was the sheer range of passengers using the system. There was everyone, from smartly suited business men to students and shoppers. Everyone was using it—it was a good cross-section of the local community. The system was so well regarded that people wanted to use it. No one was thinking of driving into the centre of town, because they knew that they had a reliable system. We in this country have been poor at that. I am not going to make a party political point—I think Governments of all colours have failed to grasp the option of having a much more integrated across-the-zones transport system. I hope we can have more of that.

I will again cite a local example—the welcome announcement in the autumn statement that the east-west railway line will be built from Bedford, through Milton Keynes, to Oxford and further south-west. I campaigned for that in this Chamber two weeks ago—I had secured a Westminster Hall debate to call for it—and I am delighted that it has been delivered within two weeks. I might have to be careful in what I wish for.

In developing that line, which has a strong case in increasing rail use and encouraging people off the roads and on to rail, how much better would it be if, as part of the planning, the services were integrated with the bus systems in Milton Keynes, Oxford and other places along the route? People who live elsewhere in Milton Keynes who want to travel to Oxford will therefore be able to decide that they can get bus x to Bletchley station and then straight on to a train, rather than say, “I am not sure when I will get there if I get a taxi to Bletchley. I will be better off using the car.” With proper planning, the new transport infrastructure projects can be even more successful than they will be.

Such optimism needs to be part of the bus industry. I was slightly perturbed, when we were taking evidence from some bus operators, that they were not seeing the opportunities in the current climate. I cannot predict what fuel prices will be like in the future—I am not a betting man, but if I were, I would suspect that they will remain high for some time. That surely is an incentive and opportunity for bus companies to say to people, “You do not have pay £1.35 for a litre all the time. You would be much better off getting a bus to your destination.” If bus companies think innovatively and work with local authorities and others to provide new services, there is an opportunity to grow the market.

I am optimistic about the future of bus transport in this country, but we must seize the opportunity. The economic circumstances are challenging—I am not going to get into a debate about how we got here and what the future will be. We have to accept the reality that economic circumstances will be challenging. However, there are opportunities to grow the system and the usage of buses. The Select Committee’s recommendations are helpful in nudging that forward, and there are good international examples that we can follow. I hope that our contribution in the report will help persuade the Minister to take those arguments forward.

16:43

[Julie Hilling (Bolton West) (Lab)]

I apologise for having been somewhat remiss at the start of my speech in the first debate, first, in not congratulating my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) on securing the debate and on her work and leadership as Chair of the Select Committee on Transport, and secondly, in not saying that it is a pleasure to serve under your chairmanship, Mr Bayley. I hope that I have put things right and that I will be forgiven.

Bus services are a classic example of the private sector making profit but the taxpayer picking up the tab when things go a bit wrong, particularly when a route is not profitable. Although it is not profitable to enter into a debate here on whether buses should have been deregulated, there is a debate to be had, as my hon. Friend the Member for Hartlepool (Mr Wright) said, on how bus services can best meet the needs of our communities in the future.

There is a huge difference between buses inside and outside London. Buses outside London are predominantly used by the less affluent and are a lifeline for many in our communities. As the hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) said, perhaps because of poverty, disability or age, many cannot drive. We all start too young to be able to drive, and I hope that we all end up too old to be able to drive. Our bus services can be woefully inadequate, particularly if someone wants to go between communities rather than to the centre.

There is a reasonably good service in my constituency if people want to go into Bolton, but please do not try to go between Blackrod and Horwich, or between Westhoughton and Smithills. Someone living in the student area of Manchester has a bus going into the centre of Manchester every minute, right around the clock, but someone living in Hag Fold in my constituency cannot get off the estate on a Sunday morning, and people dare not stay out too late at night, because the buses stop running at a ridiculously early hour.

Perhaps we should ask why everyone sees the bus as a good form of transport in London but not elsewhere. In London, buses are still regulated. Private companies are contracted to run the services, but control is in the hands of Transport for London. The previous Government introduced quality contracts, under which local authorities and integrated transport authorities can commission a bundle of services rather than have bus providers just bid for various routes. Currently, a provider can decide that a route is not commercially viable and leave a local authority the choice of either paying for the service or leaving passengers stranded with no bus service. The consequences of that are enormous—kids not being able to get to school, young people having to give up college because they cannot get there, and people giving up part-time or full-time work because they cannot get to their place of work. My hon. Friend the Member for Hartlepool described the isolation of people who are stuck in their communities and have no way to leave to visit the doctor or friends—they are trapped. It does not seem right that a provider can say, “This route is not profitable,” and ask the local authority to pick up the tab.

Quality contracts mean that profitable and non-profitable routes can be bundled together as a package, with the expectation that a provider will provide services on all those routes until the end of a contract. That seems much fairer. Rather than have the taxpayer pick up the pieces, there can be a balanced approach between the taxpayer and the operator. Unfortunately, operators do not seem keen on quality contracts. What will the Government do to assist local government to get bus services that are fairer to the taxpayer?

I have several concerns about the general cuts to bus services. As we have said, for many people there is no alternative to the bus. Buses are a fundamental part of integrated transport. We do not want people to drive to a station to catch a train; we want them to be able to use buses on part of their journey. Most of us do not live next door to a railway station, and we have to find some way to get there. Buses have to be a fundamental part of the transport system, not just the bit that poor people use. We need to look at greater integration, but services are diminishing as we speak. As the hon. Member for Milton Keynes South (Iain Stewart) was saying, the integration of our services is not improving. I am also deeply concerned about rising prices. The cost of bus journeys outside London can be extremely high. What are the Government going to do to improve the affordability of bus fares? Are they monitoring the effects of cuts to concessionary fares and school transport?

I will finish by saying that, as with so many of the cuts that are happening at the moment, the cuts to public transport are having a disproportionate impact on less affluent and vulnerable people. I hope that the Minister can give us some reassurance that he will take action on the concerns that we have raised.

16:50

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

Thank you for calling me to speak, Mr Bayley. It is good to be serving under your chairmanship for the first time.

I congratulate the Transport Committee on securing this hugely important debate and on its excellent report, which shows just how much damage is being done to bus services up and down the country. The Committee’s words have been quoted already, but they are very important. According to the Committee, the current situation is

“the greatest financial challenge for the English bus industry for a generation”

and

“some of the most vulnerable people in society, including the elderly, will be most affected by these changes.”

It is not hard to see why the Committee had to use such strong language. Its Chair, my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), set out the key decisions by this Government that have led to half a billion pounds being cut from local transport funding in this year alone. First, the 28% cut in direct funding to councils has removed £95 million from local transport. Secondly, £223 million has been taken from funding for the concessionary fares scheme for pensioners, which threatens services that are viable only because of that subsidy; as a result, many pensioners are finding time restrictions placed on their bus pass. Thirdly, a further £254 million will be taken out of support for buses next January, when support for bus fuel costs is reduced by a fifth.

Unfortunately, in their formal response to the Committee’s warnings about the damage being done to bus services, Ministers have displayed just how out of touch they are about the impact of the cuts to local transport and buses, which are being made too far and too fast. In their response to the Committee’s report—and, let us remember, after half a billion pounds has been cut from bus services funding in this year alone—the Government claimed that the bus industry was

“able to absorb this reduction without raising fares or cutting services”,

even though the Committee report is clear that, as my hon. Friend the Member for Hartlepool (Mr Wright) flagged up, the cuts will lead to

“a disproportionately adverse impact on the provision of local bus services and the level of bus fares”.

The scale of service reduction and fare rises was reinforced by a report from the Passenger Transport Executive Group on the impact of the spending review on bus services, which found that by 2014 bus use will fall by a fifth and fares will rise by 24% in real terms. In addition, the Campaign for Better Transport has found that the cuts have already led to huge reductions in services across the country, with one in five supported services being reduced and three quarters of local transport authorities planning to cut back on their bus services.

Behind those figures lies the real damage that is being done by cutting our bus services so heavily. The cuts are hurting young people, who are already struggling as a result of this Government’s decisions to cut the education maintenance allowance, treble tuition fees and end the future jobs fund. A million young people are out of work, and trying to get to places of education or to start working is made even harder for them when their local bus service is taken away. The cuts are also hurting older people, who find themselves isolated and cut off from family and friends because the bus service on which they rely has been taken away. During the general election, all political parties promised to protect free bus passes, but many older people are now asking what is the point of their free bus pass if there is no bus for them to travel on.

Perhaps the most striking part of the Select Committee’s excellent report is the evidence gathered from bus users around the country about the impact of the Government’s cuts on their quality of life. My hon. Friend the Member for Hartlepool rightly raised the plight of people in his constituency. I will add the case of Mr Turpin, a 65-year-old in Somerset who had a quadruple heart bypass but who now has to cycle every week up a steep and busy A road because his bus service has been withdrawn. These are not statistics that we are discussing; they are real people who are suffering real hardship as a result of this Government’s decisions. Unfortunately, their stories are being repeated in towns and villages up and down England. In my constituency, the No. 60 bus in Ulverston is the latest service to come under threat, after just seven months of running unsubsidised. The hon. Member for Blackpool North and Cleveleys (Paul Maynard) made a good point about the paucity of the so-called consultation processes carried out by the private sector.

Bus services are being cut, communities are being left isolated and where buses remain the fares are soaring well above inflation. If the Minister wants to avoid being labelled the modern-day Beeching of the buses, he must tell us what he proposes to do about the damage that is being done to bus services. Can he say when the consultation toolkit being created by Passenger Focus for local authorities will be completed and rolled out? Has he started work with the Local Government Association to help community transport associations?

Finally, will the Minister accept the recommendation made by the Transport Committee and by my own party’s transport policy review that local communities and the transport authorities that represent them should be given a greater say in how their bus services are funded and provided? My party’s policy review is clear about that. It is not good enough for Ministers simply to devolve the blame for their cuts to local transport funding without giving local transport authorities the power to manage their own transport services. The answer is not simply to enhance the voice that communities have, important though that may be; it is to put them directly in charge of the local decision making on transport. That is what we are calling for the Government to do.

16:57

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

Thank you, Mr Bayley, for calling me to speak. As always, I will do my best to respond to the various points that have been made.

Let me begin by congratulating and thanking the hon. Member for Liverpool, Riverside (Mrs Ellman), the Chairman of the Transport Committee, both for her Committee’s report into this very important subject and the measured way in which she presented the report’s findings. Buses are the predominant form of public transport and they are used disproportionately highly by those on lower incomes, so it is quite right that the Committee should look at them seriously, as it has, and come forward with its thoughts and recommendations.

As we set out in our response to the Committee’s report, “Bus Services after the Spending Review”, the Government place a great deal of value on local bus services. We recognise the important role they play in people’s lives and in the wider economy. We have put significant funds into ensuring that services can continue to operate across the country, whether that is by retaining the bus service operators’ grant in full for this financial year, or by reiterating and maintaining our commitment to the concessionary travel entitlement for older and disabled people. In addition, the local sustainable transport fund was established, providing more funds for sustainable transport over a four-year period than the previous Government provided. In tranche 1, £155 million was handed out and 35 of the 39 successful bids included bus-related elements.

However, we recognise that more needs to be done, which is why I announced at the UK bus awards on Tuesday a further £25 million of capital funding for buses. The previous two tranches of the green bus fund have been a success story, paying for more than 500 new low-carbon buses. The Government are now committing another £20 million for the third tranche of the green bus fund, to ensure that carbon emissions from buses continue to fall. I am sure that the industry will confirm, as it has to me, that when people are presented with new clean buses they find them more attractive, which means there are more people who want to use them. I announced earlier this week that, with the Mayor of London, we are committing £10 million to reducing emissions from London’s buses and improving air quality in the capital. We continue to support bus manufacturers and operators, to promote jobs across the UK in companies that can supply clean vehicle technology. I was pleased to be able recently to open the new Optare factory, which is a vote of confidence by British bus manufacturers in the future of bus use in this country.

The issue of community transport was raised by the Chairman of the Select Committee and by my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), and I shall deal in particular with the point about where it fits in the system. As the hon. Lady will have heard this morning, community transport has a viable role in a number of ways. It helps to provide door-to-door transport for people who would otherwise not have any transport at all, and it helps with moving groups around in a way that commercial services would not be able to deal with—for example, children or young adults who want to go from A to B when there is no bus running, or old people who want to get to the cinema for a day out. It also provides bus services where there is no case for a commercial service, and probably no case for a supported service either. The community transport sector is very important and I want it to prosper and grow, which is one of the reasons why in March I announced £10 million to kick-start growth in the sector. The evidence is that local councils have welcomed the funding and are using it, by and large, productively. I accept that there is more to be done, and I hope to be able to say something even more positive in the next few days.

My hon. Friend the Member for Blackpool North and Cleveleys has put an interesting case, promoting his view of life with section 19 and the concessionary fare arrangements, and the report’s recommendations show that the Committee shares that view. There are three issues about section 19 and about why it would not be right at this point to extend the concessionary fare arrangements. One issue is simply cost. We have protected in its entirety the entitlement element of the concessionary fare arrangements. We have not gone back at all from the previous Government’s legislation. To extend the arrangements further would incur extra cost, at a time of financial difficulties for local government and the Government nationally.

Secondly, I know that my hon. Friend wants to approach the matter from the other end, but there is a point of principle about whether a concessionary fares system should be provided for services that are essentially available only to members of a group, and I am not sure that it should.

The third issue is that there is a consequence for existing bus services, particularly supported ones in rural areas, which are probably among those nearest the mark on viability, even when supported by local councils. If we were to see a significant number of people changing to community transport because of the incentive provided, existing bus services could be fatally undermined and the situation made worse. I am hesitant, therefore, to extend the arrangements as my hon. Friend has suggested, but he has made some fair points to forward his case.

The Committee has asked that we monitor the impacts of any changes made by local authorities or operators. We will do that, in conjunction with our partners in industry and with local government. The Campaign for Better Transport has recently collated figures on reductions in budgets and services, which has been useful. We recognise the importance of monitoring trends over time, and that is why we publish annual bus statistics and run a national travel survey, which will continue. But this has to be done properly. Robust data take time to collate, corroborate, clean up and publish. We continue to receive information, which we use as it comes in, but we want an accurate picture once a year.

The Department for Transport recently published the 2010-11 annual bus statistics, which show that compared with the previous year the number of bus passenger journeys in England rose slightly, bus vehicle mileage increased by a similar amount, and bus fares remained the same in real terms. That is a slightly different picture from the one presented to us this afternoon. Figures for 2011-12 will be available next year, but in the meantime there is no doubt that in some areas of the country a combination of the difficult macro-economic climate, local authority bus cuts, and operator decisions is making life more difficult for people who need to travel by bus. I do not want to shy away from that, but the national picture is more mixed. As my hon. Friend the Member for Milton Keynes South (Iain Stewart) mentioned, in many places local councils are taking positive steps to ensure that better services are provided more cost-effectively and more efficiently, and I would like to give some examples of that.

The first comes from Dorset, which I have mentioned in previous debates. Dorset is one of England’s most rural counties, so commercial services are limited to the main towns, and for non-commercial services contract prices have been rising. A further problem the council faced was that there were more than 700 different contracts for passenger transport services with, including taxi firms, about 300 operators. The contracts covered the full range of council services, from adult social care to school transport. By combining budgets and staff in a single integrated transport unit, and by working in partnership with local operators, the county council has managed to make significant savings while introducing new, longer-term contracts that offer stability for operators, and secure patronage and revenue information for the council. There were some teething problems, and people who pay attention to such matters will have seen mention of them in the local transport press, but the council has saved large amounts of money and managed significantly to minimise cuts. There are lessons to be learned from Dorset. The council has made annual savings of up to £1 million on contracts for school and tendered bus services, and it has opened up the local bus market to new operators, which has the potential to kick-start competition for commercial services.

The second example comes from Bedford. Despite financial constraints, Bedford borough council has been able to improve bus service provision in rural areas. This has included new and restored routes, increased frequencies and free travel for under-16s at weekends and during school holidays. This was made possible simply by negotiating closely with local bus operators and consulting extensively with local communities, the sort of measures that my hon. Friend the Member for Milton Keynes South advocated in his contribution. In both these examples, new approaches to procuring bus service contracts have resulted in new entrants into local bus markets, which the Competition Commission identified in its provisional findings as vital to making the markets more competitive and providing a better deal for passengers and local taxpayers.

A third example comes from the Isle of Wight. In September, Isle of Wight council and the local bus operator, Southern Vectis, developed an innovative community transport scheme. Local groups provide volunteer drivers to operate rural routes that feed into the main bus network on the island. The drivers are fully trained by the operator, which also provides the vehicles and fulfils the regulatory and maintenance requirements. This partnership has brought community transport and the resources of a private sector bus company together for the first time. It is a very interesting model. I am greatly encouraged that councils, operators and residents can come together when budgets are tight to develop a rural bus network that suits their local needs. It is exactly the sort of scheme that the community transport fund I announced in March is designed to encourage.

[Paul Maynard]

Will the Minister confirm that it is interesting to note that the National Union of Rail, Maritime and Transport Workers was fully behind the scheme in the Isle of Wight?

[Norman Baker]

It is important to note that. That is a very relevant point and it leads me on, perhaps, to the points made by the hon. Member for Hartlepool (Mr Wright). I am sorry that, unlike the Chairman of the Committee, who presented matters fairly and equitably, albeit in a challenging way, he sought to present matters as something of a party political rant. He was keen to say that this was the Government’s fault, but the Government have not cut bus services in Hartlepool—his local council has. Councils up and down the country have not been cutting bus services, and if all the services in Hartlepool have disappeared he needs to take the matter up with his local operator and council.

The picture varies enormously across the country. I am not pretending that it is easy for local councils; it is perfectly true that there are challenges as a consequence of the local government settlement. Cuts have been made across the country in local bus services, particularly in supported ones. The Opposition spokesman, the hon. Member for Barrow and Furness (John Woodcock) said, I think, that the Campaign for Better Transport had found that three quarters of local authorities were cutting back on buses. That is unwelcome, but the fact remains that a quarter are not cutting back at all. Perhaps we should look at them for lessons on how they have managed to maintain their bus services rather than cutting everything in sight, which appears to have happened in Hartlepool.

[Julie Hilling]

Perhaps one of the things that should be considered is the level of cuts made to those local authorities. We know that the same cuts have not been made everywhere, and that some local authorities, particularly those in the north-west, north-east and other areas, have had far greater cuts than some authorities in the south, which have had much less stringent budgetary cuts.

[Norman Baker]

The hon. Lady will appreciate that I am not responsible for how the Department for Communities and Local Government has distributed its money, and I cannot comment on that in detail. What I would say, having looked at bus patterns across the country, is that it is not the case that southern counties have maintained their bus services while northern ones have not. The picture is much more mixed. The east riding of Yorkshire, for example, has done well on maintaining bus services. A north-south split is not reflected in the way she suggests.

[John Woodcock]

What the Minister has said is potentially important and will be listened to by councils throughout the country. Is he actually saying that if any council cuts bus services, it is the council’s fault and not a result of the drastic reductions in local funding imposed on councils by the Government?

[Norman Baker]

What I am saying—I hope that I have said it fairly—is that it is a challenging position for local authorities. They have received reductions in funding, which has meant difficult decisions for them, and I can understand why some of them have looked to their bus services. However, within the framework in which they operate, some have managed to protect their services, and, as in the case of Bedford, even enhance them. Others have made limited cuts. Others have taken an axe to services. Those who live in Hartlepool and elsewhere need to ask their councils why they have taken an axe to services when other councils have not.

[Mr Wright]

If the Minister will let me continue with my rant, that Pontius Pilate approach to decision making will not wash if he wants to be a champion of local bus services. Will he comment on the second part of my remarks, which concerned future financial arrangements and possible cuts to bus services as a result of the announcements in the autumn statement?

[Norman Baker]

I will. I always try to respond to all points made by hon. Members, as those who have heard me respond to debates will know. I will deal with those points, but first I will deal with the points that the hon. Gentleman made during his speech. He said—I think that I am quoting him accurately—that we need a complete change in how buses are regulated. I point out that at the moment, the regulation of buses is a consequence not just of deregulation in 1996 but of 13 years of his Government between 1997 and 2010. The record will show that when the Local Transport Bill was before the Commons and I was on the Committee considering it, I wanted to go much further in the direction that he is now advocating than did the party of which he is a member in 2008.

[Mr Wright]

Will the Minister give way on that point?

[Norman Baker]

I will, but I need to make progress.

[Mr Wright]

The Minister has had 18 months in office. He has just set out his approach. When will he enact it?

[Norman Baker]

I will not give way again, as I am trying to answer the hon. Gentleman’s points, and he is anticipating me all the time. The fact is that we now have a regulatory framework that his Government put in place in the Local Transport Act, and the record will show that it would have gone more in the direction that the hon. Member for Barrow and Furness wanted if his Government had accepted the amendments that I tabled at the time.

Our position has been set out clearly. The Government await the results of the Competition Commission’s inquiry. It would be premature to make judgments about the landscape of the bus market until it has reported. We will read the Competition Commission report carefully, consider the arrangements for the bus service operators grant at the same time and in parallel and make it clear where we are going as soon as we have had a chance to digest the final report. That is the responsible course of action, given where the Competition Commission is at present.

[Julie Hilling]

Will the Minister give way?

[Norman Baker]

Yes, but for the last time, as I need to make some progress.

[Julie Hilling]

I thank the Minister for giving way; he is being generous with his time. My question is simple: have we any idea when the commission is likely to report?

[Norman Baker]

Yes. We will have clarity from the commission, and clarity from the Government on BSOG, in the early part of next year. We will then be able to answer questions in more detail based on what the commission has said.

I think that it is unfair to paint the autumn statement in the negative way the hon. Member for Hartlepool did. He said that things would get worse. I do not want to have a debate about the finances, as this is not the place to do it, but I will give one statistic. The day after the general election, our interest rates were higher than Italy’s. They are now lower than Germany’s, which suggests that the Government are handling the economic position rather better than he gives us credit for.

In addition to the money for green buses announced this week and for retrofitting existing buses, the Chancellor gave transport authorities another £50 million this week in his statement. I hardly think that this has been a bad week for transport, or for local authorities as far as transport is concerned. It seems to be a good week in terms of what has been handed out.

I mentioned that the Competition Commission’s report would be published shortly. The Department has submitted its formal written response to the provisional remedies, which is available to view on the Competition Commission’s website. In the response, I broadly welcomed the provisional remedies. I believe that they have potential to improve multi-operator bus ticketing in particular, and I welcome the commission’s focus on that issue in its recent inquiry into the bus market. There is no question but that better integrated ticketing can help by enabling passengers to make more seamless journeys. Smart ticketing can also play an important role. That is why I have committed to delivering, with operators and public sector bodies, the infrastructure to enable most public transport journeys to be undertaken using smart ticketing by December 2014, to answer the point raised by my hon. Friend the Member for Blackpool North and Cleveleys.

I mentioned the Local Transport Act 2008. There has been some concern that the provisional remedies have been ambiguous in terms of the tools in the Act that can enable authorities to increase the quality of services, so let me be clear. Statutory quality partnership schemes, quality contract schemes and voluntary and qualifying agreements remain useful tools for local transport authorities to deliver their public transport policies. That is the present position. The Government have taken no action to undermine quality partnerships or quality contracts. We will consider where we are after the Competition Commission has reported. In the meantime, it is perfectly open to local authorities to use the terms of the 2008 Act. It is available on the statute book for them to use if they decide that that is what they want to do.

The hon. Member for Bolton West (Julie Hilling) discussed the general price of bus fares. She is absolutely right to express concerns about that. Over the past 30 years, the trend has been that the average cost of travelling by bus has increased more than the average cost of travelling by train or car. We recognise that buses are used disproportionately by poorer people. I want to ensure that we consider that issue in our response to the Competition Commission’s inquiry into the bus market. It is not for us in Government to start telling people how much they should charge for buses in Kettering or anywhere else, but we must ensure that the system and the market work properly, which is what we are trying to achieve as part of our consideration of the Competition Commission responses.

I was interested in the point made by my hon. Friend the Member for Milton Keynes South about the deal reached between the council and Arriva to provide a 50p rate before 9.30. It is an exceedingly interesting idea that a bus company and a council can come together to create a new, innovative arrangement that meets the needs of local people and, presumably, the bus company as well. We need more arrangements such as that, and I hope that we will see what we can do to encourage such innovation across the country.

[Iain Stewart]

I would like to place it on record that a key body instrumental in brokering that deal was the Milton Keynes Pensioners Association. It required good work on all sides, but the association had an instrumental role in helping that deal be struck.

[Norman Baker]

I am grateful to my hon. Friend for rightly putting that point on record.

Several Members raised the importance of consultation. I welcome the Transport Committee’s emphasis on it, and it is right that Members have mentioned it here. It is also right that councils and operators considering changing services consult properly. It is clear from the evidence that the Committee and I have seen that there are some good examples and some pretty ropey ones. The message that I want to give to bus companies and local councils is that they must consult properly and take into account the consequences of any changes that they propose. Actually, if they consult properly, they often get some good and constructive responses and end up with a solution that is better than the one proposed, not just for customers but for the company.

The Chair of the Transport Committee asked when I expect we will know what the Association of Transport Coordinating Officers is doing with its assessment. I mentioned the annual statistics, but the ATCO assessment is happening now, and we expect the results early in the new year. There is no reason why the Department should not share that with the Committee as and when it comes to us, so I will ask my officials to ensure that we are in touch with the Chairman then.

The toolkit has been mentioned by a number of Members. Passenger Focus is gathering evidence from local authorities and bus operators to find examples of good practice. It is receiving good support from the authorities it has contacted and we expect to see a first draft in January, so we and Passenger Focus are making good, swift progress, which is rightly important to Members present.

The only other points that I want to pick up on are two of the issues to which the Chairman of the Committee referred—namely the bus service operator grant and the concessionary fares reimbursement formula. Contrary to the information that has just been provided by the hon. Member for Barrow and Furness, it is a fact that the Confederation of Passenger Transport UK, to which I spoke immediately after the spending review, told me that, in general terms, it felt that the BSOG reduction, given the notice that we had given and the limited amount of reduction, was one that it could in general absorb without fares rising or services being cut. That is what the industry told me. I am happy to give the hon. Gentleman the exact quote if he wants. That is what it said.

[John Woodcock]

I am aware of the quote, but does the Minister accept that, while it is one thing to look at that in isolation, the situation is entirely different if we combine it with the two other substantial cuts faced by the industry, and that it is simply unrealistic to expect things to remain the same?

[Norman Baker]

There is an issue as to the extent to which other elements of what is happening in the wider market, including the price of fuel, what is happening in the world market, the eurozone or any other factors outside our control, affect the operation of bus services. The hon. Gentleman has referred specifically to the BSOG reduction and the industry has given me a specific response. That is what it said and we should stick with it.

On the concessionary fare reimbursement formula, we have not changed, in any shape or form, the legislation that we inherited from the previous Government. It requires councils and transport authorities to deal with operators in a way that reimburses them so that they are no worse off and no better off from handling concessionary fares. That is a legal requirement and it has not changed. All we have done is issue guidance to indicate to local authorities how they should perhaps discharge that function. They are under no obligation to follow that guidance if they do not wish to do so. The remedy for bus companies that are unhappy with that is to go to an independent appeal. Not very many of them have done so and not many appeals have been won. If bus companies are receiving less money from local authorities and are not seeking to appeal, or do not win appeals, that suggests that they were overpaid previously, contrary to the terms of the legislation. That is a simple analysis of the situation. If, on the other hand, they win their appeal, it shows that local authorities have not been sufficiently reimbursing them on a no better, no worse-off basis. The legislation has not changed at all. I think that, to some extent, the argument is something of a diversion.

I am very conscious of the importance of buses in our country. I do not underestimate the difficulties of local councils in particular, and I am concerned about the level of supported services in some parts of the country, as opposed to the commercial services, which I think are, by and large, all right. We need to see the picture across the country. One effect of localism is that some councils are handling this very well while others are handling it very badly. It is not for us to say that a local council must follow a particular procedure, but I think it is the right of people in those areas to ask why there are no buses in their council area while they are running very well indeed across the border. That is a legitimate function for local people to practise.

We have supplied a lot of help to the bus industry in the way I have described—through the green bus fund, the local sustainable transport fund and the money that the Chancellor has given this week—and I hope to make further helpful announcements in the not too distant future.

17:23

[Mrs Ellman]

I thank Members for their constructive contributions, which I hope will help us to improve bus services. I also thank the members of my Committee, who today displayed the enthusiasm, commitment and knowledge that has helped to make this report effective. It will be even more effective if it changes the situation, as I hope it will. Buses matter and my Committee intends to continue to attach to them the importance that they deserve.

Question put and agreed to.

17:24

Sitting adjourned.

Written Ministerial Statements

Thursday 1st December 2011 Written Statements

Thursday 1 December 2011

Further Education Reforms: Building a World Class System

Thursday 1st December 2011 Written Statements

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

The Government are today publishing “New Challenges, New Chances: Further Education and Skills System Reform Plan: Building a World Class Skills System” and the underpinning skills investment statement for 2011-2014, copies of which are being sent to all hon. Members and placed in the Library.

Our vision is for a further education and skills system in England freed as far as possible from central bureaucratic burdens, thus able to respond more effectively to the needs of local learners and employers and so make the maximum possible contribution to renewed growth.

Our plan is based on 10 key policy commitments:

1. We will empower learners—from basic through to higher-level skills—to shape the system through their participation. First-class information will inform their choices, with Government funding focused on supporting students where it can have most impact.

2. We will launch a national careers service in April 2012 to provide information, advice and guidance which both informs and stimulates demand for further education, work-based training and higher education. Lifelong learning accounts will equip learners with the information they need to make the most of their learning opportunities.

3. We will create a vocational pathway as navigable, rigorous and attractive as the academic route, so recalibrating the character of higher learning.

4. We will develop and promote excellent teaching, by establishing an independent commission on adult education and vocational pedagogy to develop a sector-owned strategy and delivery programme. We will also facilitate an independent review of professionalism in the FE and skills work force.

5. We will take further action to ensure that qualifications are of high quality and comprehensible, by improving awareness of the qualifications and credit framework—consulting employers on their engagement in qualification development—and by consulting on the character and function of national occupational standards.

6. We will take action to remove restrictions and controls on college corporations, creating new roles for governors, working closely with other educational providers in post-14 learning, with local stakeholders taking the lead in developing delivery models to meet the needs of their communities.

7. We will continue our programme to free the FE system from central control, building upon the successes already achieved, including further work by the Skills Funding Agency with colleges to remove bureaucratic burdens.

8. We will provide £3.8 billion a year of public funding to the sector and we will create a simple transparent funding system that is both robust in ensuring funding enables high-quality provision that delivers good value for money, and which responds to local needs.

9. We will empower students by providing better access to quality information to make informed choices, determined by a better understanding of opportunities for further learning and employment destinations. Simultaneously, to assure quality, we will take swift action in relation to failing provision, providing intensive support and, if necessary, intervening to ensure that alternative and innovative delivery approaches are secured for the future.

10. We will build on the growing international demand for practical, technical and higher-level vocational skills. Inspired by the legacy of our achievements at WorldSkills 2011, we will stimulate and support the sector to take advantage of opportunities in the global market.

EU Competitiveness Council (Pre-Council Written Ministerial Statement)

Thursday 1st December 2011 Written Statements

[The Minister for Universities and Science (Mr David Willetts)]

My hon. Friend the Parliamentary Under-Secretary of State for Business, Innovation and Skills, Baroness Wilcox, has today made the following statement.

The EU Competitiveness Council will take place in Brussels on 5 and 6 December 2011. I shall represent the UK on internal market and industry issues on 5 December, and my right hon. Friend the Minister of State for Universities and Science will represent the UK on research issues on 6 December.

The internal market and industry substantive agenda items on 5 December will be: a policy debate on enhanced co-operation in the area of the creation of unitary patent protection; a policy debate on unitary patent protection with regard to the applicable translation arrangements; agreement of general approach for proposals for a directive regarding interconnection of central, commercial and companies registers; a presentation by the Commission regarding business competitiveness and SME programme; a policy debate on a unified patent court and draft statute; adoption of Council conclusions for the industrial policy flagship initiative; adoption of Council conclusions on impact assessment in the Council; an exchange of views on results from the single market forum; and; adoption of Council conclusions regarding customs co-operation with eastern neighbouring countries.

A number of other items will be discussed under AoB. This will comprise of Commission presentations and updates on the following:

European shipbuilding;

Proposal for a regulation on European standardization;

Proposal to align product harmonisation directives to decision 768/2008 (NLF);

Results of the European tourism forum and informal ministerial meeting;

Results of the conference on the implementation of lead markets initiative and the European innovation partnerships (Warsaw, 26-27 October 2011);

Single Market Act implementation;

Services directive: state of implementation;

Consumer market scoreboard;

Proposal for a regulation on a European observatory on counterfeiting and piracy;

Proposal for a directive on the protection of orphan works;

Proposal for a regulation of the European Parliament and of the Council concerning customs enforcement of intellectual property rights;

Proposal for a directive on alternative dispute resolution (ADR) and proposal for a regulation on online dispute resolution (ODR);

Proposal for a regulation of the European Parliament and of the Council on a consumer programme (2014-2020);

Cohesion policy;

REACH: Report and review in the light of EU competitiveness; and

REACH and the candidate list of substances of very high concern;

Work programme of the incoming Danish presidency.

The research substantive agenda items on 6 December will be: a presentation and exchange of views of the framework programme for research and innovation (Horizon 2020); a Commission overview on progress towards agreeing the Euratom framework programme for 2012-13; adoption of Council conclusions regarding launching of joint programming initiatives on “Healthy and Productive Seas and Oceans”; “The microbial challenge—An emerging threat to human health”; “Connecting Climate Knowledge for Europe (Clik’EU)”; “Urban Europe—Global Challenges, Local Solutions”; “Water Challenges for a Changing World”; and adoption of Council conclusions on partnering in research and innovation. There will also be an adoption of space Council orientations on the value of space for the security of European citizens.

The research, space and any other business items will comprise of information from the Commission regarding active and healthy ageing; a presentation by the Commission on the European earth monitoring programme (GMES); information from the Hungarian delegation regarding the Budapest declaration on agricultural research; and information from the presidency regarding the report on the high level ministerial group on simplification.

The Government’s objectives for the Council are:

To contribute to a debate on political aspects of the patents package (the patent regulation, languages regulation and the unified patent court);

Confirm agreement with Council conclusions or general approaches with respect to companies registers, industrial policy and customs co-operation;

Further progress on impact assessment in Council;

Express the UK’s initial views on the Horizon 2020 proposals; and

Agree new joint programming initiatives and conclusions on partnering in research and innovation.

New Homes Bonus

Thursday 1st December 2011 Written Statements

[The Minister for Housing and Local Government (Grant Shapps)]

Today, 1 am pleased to announce the delivery of 159,000 more homes over the last year, and £431 million of Government funding to local authorities.

The new homes bonus is a powerful, simple and transparent incentive for housing growth. It is a key part of the housing growth focus of our national housing strategy, which we published on 21 November. Commenced in April 2011, the bonus is based on the council tax of additional homes and those brought back into use, with an additional amount for affordable homes, for the following six years. It ensures that those local authorities which promote and welcome growth can share in its economic benefits, and build the communities in which people want to live and work.

The bonus will be paid in respect of 159,000 homes from October 2010 to October 2011 including 137,000 extra homes and 22,000 long-term empty properties brought back into use. The allocations also include the first affordable homes enhancement, which totals £21 million in respect of 61,000 new affordable homes.

This means we will pay councils £431 million of provisional new homes bonus for local authorities in England. This includes the second instalment of £199 million in respect of year 1 and £232 million for housing growth in year 2.

We are committed to ensuring that the bonus remains a flexible, non-ringfenced fund, for local communities to spend as they see fit—from reinvesting it in housing or infrastructure, support local services or local facilities, or using the funds to keep council tax down. Local authorities are best placed to understand the barriers to growth in their areas, the needs of their local communities and lead a mature debate about the benefits that growth can bring. There are already good examples of local authorities using the bonus in a variety of ways. For example Wychavon is returning up to 40% to the community where growth is taking place. Liverpool are reinvesting in a commitment to deliver 2,000 new homes. The Vale of White Horse is investing in business growth by making the car parks free in the three local market towns of Abingdon, Wantage and Faringdon.

The new homes bonus is a key part of our ambition, set out in the local growth White Paper, to create a fairer and more balanced economy through encouraging growth. It will sit alongside the Government’s proposals to allow local authorities to benefit from economic growth by the local retention of business rates. Our reformed community infrastructure levy allows local authorities to ensure development contributes to the infrastructure needed to support growth and will give people a real say in spending to deal with the impacts of growth on their neighbourhoods.

On top of these provisional allocations, we will address any loss of new homes bonus in areas affected by last summer’s riots through riot recovery funds.

Local authorities will have until 30 December to make representations on their provisional allocations. The Department has written to local authorities with details for making representations on their authority’s provisional allocations and I have also written to all Members of Parliament in England.

A full list of the provisional allocations is being placed in the Library of the House. Further information on the bonus, including the first “New Homes Bonus Bulletin—Unlocking the Bonus” can be found at

www.communities.gov.uk/housing/housingsupply/newhomesbonus.

A copy of the bulletin is also in the Library of the House.

School Admissions and School Admission Appeals Codes

Thursday 1st December 2011 Written Statements

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

I am today laying the revised “School Admissions and School Admission Appeals Codes” (“the Codes”) before Parliament as required under section 85 of the School Standards and Framework Act 1998. Subject to the views of Parliament, these codes will come into force on 1 February 2012. A copy of these codes has also been published on the departmental website, so that schools and local authorities can take account of the technical changes that have been made to the codes since their publication on 2 November.

The White Paper, “The Importance of Teaching”, outlined the intention to

“simplify the code so that it is easier for schools and parents to understand and act upon, while maintaining fairness as the guiding principle”.

As part of the consultation process we consulted on a number of key policy changes that are set out below, all of which are intended to deal with issues which we believe create unfairness in the system, or which frustrate or confuse parents.

The current codes have evolved over a number of years with successive versions adding further regulations in a chaotic and unplanned fashion. As a result, the admissions system has grown unnecessarily complex and bureaucratic, comprising some 130 pages of densely worded text, with more than 650 mandatory requirements. These revised codes are less than half the size of the previous codes and are simpler, fairer and easier to understand. We have removed much of the repetition and unnecessary material, whilst retaining the key safeguards to ensure that school places can be allocated in a clear and transparent manner.

The Department consulted extensively on the codes from 27 May to 19 August and received more than 1,330 responses with 700 from parents, as well as a wide range of interested parties, including local authorities, dioceses and head teachers. Overall, respondents broadly welcomed the proposals to slim down the codes.

These codes make a number of changes to the current codes:

Giving greater freedom to schools to increase the number of places they are able to offer by removing the duty to consult locally and the ability to object when a school increases its admission numbers;

Ensuring that any child who leaves public care through adoption, a residence order or special guardianship order, will continue to be given the same priority although they are no longer looked after by the state;

Making the co-ordination of admissions to primary schools administratively simpler through a single date, 16 April, each year when offers of school places are made from 2014 onwards;

Allowing schools to prioritise the children of staff either employed at the school for at least two years, or who will meet a clear skills shortage;

Allowing infant classes to exceed the statutory limit to avoid separating children from a multiple birth, and for children of armed forces personnel admitted outside of the normal admission round;

Allowing schools to take direct applications from parents for in-year applications;

Prohibiting the use of random allocation as the principal method of allocating places across a local authority area;

Requiring admission authorities to consult on unchanged arrangements only every seven years, rather than three;

Reflecting changes in the Education Act 2011, allowing anyone to object to the schools adjudicator about admission arrangements, and enabling objections about academies’ admission arrangements to be referred to the schools adjudicator; and

Greater clarity on decision-making and related processes for appeals, to ensure greater uniformity and to reduce costs across the system.

In addition, as highlighted in the code, but achieved through individual funding agreements, we will be allowing academies and free schools to prioritise pupils eligible for the pupil premium.

Nuclear Energy (Government Responses)

Thursday 1st December 2011 Written Statements

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

The Department of Energy and Climate Change (DECC) will today publish two documents that further demonstrate the Government’s commitment to managing our existing nuclear legacy and sites in a responsible manner:

the conclusions of its consultation on the long term management of UK-owned separated civil plutonium and;

our response to the recommendations for Government contained in the chief nuclear inspector’s final report on events at the Fukushima nuclear site in Japan that was published on 11 October 2011.

Management of the UK's plutonium stocks

The consultation was published in February and set out for public scrutiny Government’s preliminary view on the long-term management of the UK’s plutonium. In particular, the consultation covered the security and proliferation sensitivities associated with continued storage of plutonium, and how these could best be managed in the interests of future generations.

The consultation document made it clear that, although there remain many issues to be resolved before any policy could be implemented, the UK Government believed that there was sufficient information available to make a high-level judgment as to the right strategic policy option for plutonium management. The Government therefore proposed a preliminary policy view to pursue reuse of plutonium as mixed oxide fuel (MOX); converting the vast majority of UK civil separated plutonium into fuel for use in civil nuclear reactors. Any remaining plutonium whose condition is such that it cannot be converted into MOX, will be immobilised and treated as a waste for disposal.

Having considered all responses received during the consultation period the UK Government have concluded that they have identified the right preliminary view. Accordingly, the Government confirm this as the preferred policy. While the UK Government believe they have sufficient information to set out a direction, it is not yet sufficient to make a specific decision to proceed with procuring a new MOX plant. Only when the Government are confident that their preferred option could be implemented safely and securely, that is affordable, deliverable, and offers value for money, will they be in a position to proceed with a new MOX plant. If we cannot establish a means of implementation that satisfies these conditions then the way forward may need to be revised.

The Government are now commencing the next phase of work, which will provide the information required to make such a decision. The next steps towards will see further information being gathered by the Government and NDA through detailed commercial discussions on the market for MOX fuel and the availability of reactors in which it can be burned. Other discussions will focus on detailing the costs and time scales for procuring services or facilities, including a suitable MOX plant, which can be delivered at minimum risk to Government.

Further workstreams will take forward the requirements for the justification of the whole MOX path from fabrication, through use to disposal, which will be required before UK Government can commit to spending significant capital on procuring a new MOX fabrication plant.

In addition, the Government have concluded that overseas owners of plutonium stored in the UK could, subject to commercial terms that are acceptable to UK Government, have their plutonium managed alongside UK plutonium, in line with a reuse policy. Where appropriate and subject to compliance with inter-governmental agreements and commercial arrangements that again, are acceptable to Government, the UK would be prepared to take ownership of overseas plutonium stored in the UK after which it would be managed alongside UK plutonium, again in line with a reuse policy.

While converting the plutonium into MOX is the most credible and technologically mature option, the Government remain open to any alternative proposals for plutonium management that offer better value to the taxpayer, and will seek to gather more data on all options.

Copies of the consultation response have been placed in Libraries of both Houses or can be obtained from the DECC website.

http://www.decc.gov.uk/consultations/Default.aspx? status=28&area=0

Weightman report on events at the Fukushima nuclear site

I welcome the findings and recommendations in Dr Weightman’s report and commend him and his team on the important work that they have undertaken in pulling together information and lessons from the events in Japan.

In the response the Government set out work we have done or intend to do in implementing Dr Weightman’s recommendations, including:

Continuing to work with our international partners on nuclear safety, particularly through the development of the IAEA director-general’s “Action Plan”.

Taking forward work from the nuclear emergency planning liaison group review of the UKs national nuclear emergency arrangements in the light of the experience of dealing with the prolonged Japanese event.

Ensuring that openness and transparency are enshrined in the work we are taking forward to create the ONR as a statutory body.

Copies of the Government response have been placed in Libraries of both Houses or can be obtained from the DECC website.

http://www.decc.gov.uk/en/content/cms/meeting_energy/nuclear/safety_and_sec/weightman/weightman.aspx.

The Carbon Plan

Thursday 1st December 2011 Written Statements

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

The Government are today publishing the carbon plan, setting out the Government’s long-term plans to meet its carbon targets, including the fourth carbon budget set earlier this year. The plan shows how doing so will set us on a plausible pathway to our 2050 target to reduce emissions by at least 80% from 1990 levels. The plan will help drive new high-value economic sectors and save billions through energy efficiency.

The carbon plan shows that UK emissions have already been cut by more than 25% on 1990 levels. With the policies already in place the economy will easily exceed the 34% target set for the first 15 years under the Climate Change Act, and would have done so even if the recession had not occurred. Meeting the fourth carbon budget of a 50% cut in emissions by the mid-2020s will not have any additional cost implications during this Parliament, but beyond that will galvanise jobs and investment during a decade of mass deployment of key technologies.

In the next decade, the UK will complete the cost-effective measures begun in the previous decade, in particular focusing on energy efficiency. We will also need to prepare for the future by demonstrating and deploying the key technologies needed to entirely decarbonise power, buildings and road transport in the 2020s and beyond. Rather than picking winners, the Government will support the development of a portfolio of technologies for each sector in order to drive innovation and lower costs. As part of the carbon plan, we are publishing the updated list of the key actions that each Government Department and the devolved Administrations are taking in each sector during the lifetime of this Parliament, to provide further transparency and accountability.

In the 2020s, these key technologies will move towards mass roll out. Developing options now will not only reduce the costs of deployment in the 2020s, but it will also enable the UK to gain a long-term competitive advantage.

Up to 2030 and beyond, emissions from the hard-to-treat sectors, such as industry, shipping and agriculture will need to be tackled. This will require a range of solutions to be tested in the 2020s at the latest, such as more efficient practices in agriculture; switching from oil and gas to bioenergy or low-carbon electricity in industrial processes; and deploying carbon capture and storage.

Today’s package represents a significant step forward in our commitment of moving to a low-carbon economy. To the negotiators in Durban working this week and next to make progress on a global agreement on climate change, the carbon plan shows the UK is walking the walk, demonstrating that even in tough times it can be done and living up to our promise to show climate leadership.

To the public and businesses at home, rightly worried about the cost of living and state of the economy, the carbon plan shows that the gradual rebalancing of our economy away from carbon is achievable and, in the long run, highly desirable.

Our national economic interest is to be found in a cost-effective transition to low-carbon. Every bit of progress we make is one more step away from import dependency, away from the emissions that are likely to lead to savage weather impacts, and towards an economy that wastes less and saves more.

Live Animal Exports (Clarification of Minister's Comments)

Thursday 1st December 2011 Written Statements

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

During a debate on 24 October 2011, Official Report, column 146, I made reference to a Mr Onderwater being prosecuted for cruelty following the earlier reference by the hon. Member for South Thanet (Laura Sandys) to business men who were involved with the operation of a livestock ferry at Ramsgate who had been convicted of animal cruelty. I regret the information I gave was not accurate and I wish to apologise to the House.

Mr Onderwater runs a Dutch registered company called Onderwater Agneaux BV. He pleaded guilty on behalf of his company at Folkestone magistrates’ court on 5 July 2010 to six offences of not displaying any sign on his vehicles indicating the presence of live animals contrary to article 6(c) of the Welfare of Animals (Transport) (England) Order 2006 and article 6(3) of Council Regulation (EC) No. 1/2005 on the protection of animals during transport. The prosecutor was the trading standards department of Kent county council.

Mr Onderwater had also mis-described the cargo of live animals in consignment notes as seafood, frozen meat and boxed meat: the Crown court found this was in order to deceive the ferry companies. Mr Onderwater had been informed on several occasions that he was contravening the legislation by not displaying such signs yet the company continued to commit the same offence in the two months following first detection.

On 1 September 2009, 320 sheep were transported described as meat.

On 30 September 2009, an unspecified number of sheep described as meat for further processing.

On 11 November 2009, 240 sheep described as meat.

On 14 November 2009, 307 sheep described as seafood— Mr Onderwater was driving this lorry.

Also on 14 November 2009, 286 sheep described as boxed meat.

On 19 November 2009, 270 sheep described as frozen meat.

He was fined £1,000 for each offence, with costs of £4,355.

Mr Onderwater represented his company at an appeal against this sentence at Canterbury Crown court on 10 August 2010. On appeal the total fine remained at £6,000 but costs were reduced by £680 to £3,675. His Honour Judge O’Sullivan fined the company £400 for the first offence, £800 for the second offence, £1,000 each for the third, fourth and fifth offences and £1,800 for the sixth offence.

His Honour Judge O’Sullivan said in his sentencing remarks that there was no offence which involved “mistreatment of animals” but that the company’s persistent offending despite being caught made it quite clear that the company had no intention of trying to abide by the regulations. The judge noted that there is a wider use for these signs to indicate the presence of live animals on vehicles and that it is important, for instance, in case of an accident that the cargo can be identified as being livestock so that the necessary measures for safeguarding the welfare of the animals can be put into operation.

Protocol Providing for Additional Members of the European Parliament

Thursday 1st December 2011 Written Statements

[The Minister for Europe (Mr David Lidington)]

Following ratification by all 27 member states of the European Union, the protocol amending Protocol No. 36 to the EU treaties on transitional provisions, which made amendments to the composition of the European Parliament, entered into force on 1 December 2011. The protocol was approved for the purposes of section 5 of the European Union (Amendment) Act 2008 by section 15 of the European Union Act 2011.

The protocol allotted to the United Kingdom one additional seat in the European Parliament. As the statement on 26 October 2010 by the Parliamentary Secretary, Cabinet Office, the hon. Member for Forest of Dean (Mr Harper) set out, the Electoral Commission undertook an independent analysis to determine which European electoral region in the United Kingdom the new MEP should be assigned to. As a result of its analysis the Electoral Commission, in compliance with its obligations under the European Parliament (Representation) Act 2003, decided that the west midlands should be the recipient region. The Government accepted this recommendation.

The returning officer for the west midlands region referred to the results of the 2009 European elections, as if the extra seat had been available in the west midlands electoral region in those elections. This method of filling the seat is in accordance with the terms of the protocol and is in line with the practice of most of the other member states which gain additional MEPs under the protocol. In accordance with the procedure set out in schedule 2 of the European Union Act 2011, the returning officer has declared Anthea McIntyre to be returned as the additional MEP for the west midlands.

This is an interim measure until the next elections to the European Parliament take place in June 2014. At those elections all UK MEPs, including the MEP for this extra seat, will then be elected in compliance with the normal procedure.

Legal Aid Reform (Competitive Tendering)

Thursday 1st December 2011 Written Statements

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

The Government set out their intention to introduce competition for the procurement of legally aided services in “Proposals for the Reform of Legal Aid in England and Wales” (November 2010). The consultation paper stated that the immediate focus would be on criminal legal aid, with civil and family legal aid to be addressed over a longer period. The response to the consultation (June 2011) stated that proposals for criminal legal aid competition would be published in a separate consultation paper during 2011. This statement provides an update on the Government’s position in relation to competition and criminal legal aid services, and a timetable for future activity.

The Government believe that competitive tendering is likely to be the best way to ensure long-term sustainability and value for money in the legal aid market. Pressure on legal aid expenditure is likely to continue, increasing the need for further reform of the current arrangements for administratively set remuneration rates in the absence of competition.

The Government believe that tendering criminal defence work for competition, alongside regulatory changes, has the potential to significantly modernise legal aid provision, improve the service provided to legal aid clients, streamline the procurement process and deliver value for money for the taxpayer.

Clearly the development of a competition strategy will be likely to have a substantial impact on the market for legally aided services, as will a number of other current developments. These changes will require significant levels of engagement between the Government and the profession. We plan to begin these discussions in early 2013 once the key components of our legal aid reform package, the regulatory changes allowing alternative business structures, and the introduction of the quality assurance scheme for advocates have had time to bed down. We will publish a full formal consultation document on the competition strategy towards the end of that year. The indicative timetable for the development of our competition strategy is therefore as follows:

Libya Crisis

Thursday 1st December 2011 Written Statements

[The Prime Minister (Mr David Cameron)]

I am today publishing in full the National Security Adviser’s review of how the Whitehall machine operated during the Libya conflict and what lessons we can learn, in keeping with the commitment I made to the House on 5 September.

I told the House on 21 March that I believed that military intervention was necessary, legal and right to protect the people of Libya from the brutality of the Gaddafi regime, and I pay tribute to the courage and professionalism of our armed forces during this conflict. There remains much to do to secure a successful transition to a peaceful and prosperous democracy, and we will continue to assist the interim Libyan Government. But our armed forces, our diplomats and development experts who re-established the British presence in Benghazi and Tripoli, and all those in the UK who contributed to the success of the international effort, can be proud of the part they have already played.

The National Security Council proved its worth in ensuring effective co-ordination of this country’s contribution throughout the crisis in Libya. But it is always right to learn the lessons after any conflict. In addition to the areas where things went well, Sir Peter Ricketts’ review has also highlighted a number of lessons for future conflicts, including the importance of swift evacuation of UK nationals; integrating better economic analysis and policy more prominently at the early stages of conflict planning; and establishing a clearer cross-Government process for the negotiation of United Nations Security Council Resolutions.

Copies of the review of lessons learned from Libya have been placed in the Libraries of both Houses. The review is also available on the No. 10 website.

Child Support Maintenance Calculation Regulations 2012

Thursday 1st December 2011 Written Statements

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

I am today publishing a consultation document on the calculation methodology for the new statutory child maintenance scheme, to be launched next year.

The Government want to encourage and support parents to make their own family-based arrangements, but are committed to providing a statutory service for those separated parents who are unable to co-operate.

As part of our programme of reforms, the existing Child Support Agency schemes will be replaced over time with a new, efficient scheme for those parents who are unable to make their own arrangements.

The aim of the new scheme is to produce a faster, more accurate and transparent process for assessing child maintenance payments. Payments will usually be based on the non-resident parent’s latest tax year gross income, sourced directly from HM Revenue and Customs. This will make the scheme less dependent on information from non-resident parents and so make it harder for non-resident parents to avoid their responsibilities by not disclosing their full income.

Annual reviews will ensure that cases are kept up to date in a way they are not on the current CSA schemes.

I am also announcing two proposals today which would provide particular benefit to parents with care, who are generally mothers with children.

The Child Maintenance and Other Payments Act 2008 provided for the flat rate paid by non-resident parents on benefit and low income to be increased from the current £5 to £7. I am today consulting on whether this should be increased further to help ensure more children receive the financial support they need.

I am also consulting on achieving a fairer situation for children to get closer to equalising the financial support for children living with, and those living apart from, the non-resident parent.

The consultation document, the impact assessments and draft regulations will be available on the Child Maintenance and Enforcement Commission (CMEC) and Department for Work and Pensions websites later today. A link to the CMEC website is attached below.

Copies of the consultation document and the impact assessment will be placed in the Libraries of both Houses.

http://www.childmaintenance.org/en/publications/consultations.html.

EEA Opt-in Decision

Thursday 1st December 2011 Written Statements

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

The Government are committed to the free movement of workers within the European economic area, and also to protecting the sustainability and affordability of our welfare systems. As part of that commitment we want to ensure that non-active migrants from outside the EU cannot gain access to welfare if they have never worked or paid contributions in the United Kingdom.

In considering proposals to amend the social security provisions of the EEA agreement, we took the view that the proposals would have the effect of extending social security co-ordination to non-active persons moving between the EU and EEA. Furthermore, the proposal was based on treaty powers for the co-ordination of social security schemes in relation to the free movement of workers within the EU (article 48 of the treaty on the functioning of the European Union), whereas the provisions related to free movement between the EU and the EEA states.

In focusing on the nature and content of the proposal rather than the cited legal base, the Government came to the conclusion that the appropriate legal base was article 79(2)(b) TFEU, which allows the EU to adopt measures concerning the free movement rights (including social security rights) of third-country nationals. Article 79(2)(b) lies within title V of part III of the TFEU, and so the Government considered whether they wanted to opt in to the measures; and we concluded that we did not want to opt in.

In negotiations we continued to argue for a change to a title V legal base, and that the UK’s position be reflected in the text, but were unsuccessful. The decision on the position to be adopted by the EU was put to the Employment, Social Policy, Health and Consumer Affairs Council in June 2011. The Government expressed our serious concerns over the legal base for the proposal, and noted our right to take further action. The Council decision was none the less adopted, and a further decision giving effect to the measures was adopted in the EEA Joint Committee on 1 July 2011.

In parallel with these processes, we considered across Government the options, including legal action, open to us and we have decided to take direct action in the European Court on the basis that the article 48 legal base is incorrect and that the Council decision is therefore invalid. That action was initiated on 16 August by submitting an application on behalf of the UK to the Court of Justice of the European Union.

I believe this action demonstrates how seriously the Government take our obligation to protect our rights under the treaty on the functioning of the European Union.

Mobility Component in Residential Care

Thursday 1st December 2011 Written Statements

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

The Government are today announcing that the mobility component of disability living allowance will not be removed from people living in residential care homes and that the mobility component of personal independence payment, which will replace disability living allowance, will also be payable at both the standard or enhanced rate to people in residential care homes provided they satisfy the entitlement conditions.

In the spending review 2010 it was announced that, from October 2012, the disability living allowance mobility component would be withdrawn from people in residential care homes after 28 days. Our aims have always been to ensure not only protection of public funds but also that disabled people who live in residential care homes retain their independence and are not prevented from getting out and about.

In response to concerns raised about this proposal, the Government announced that they would not remove the mobility component from people in residential care homes from October 2012 and that it would look again at the underlying evidence and gather more, before reaching a final decision on the way forward for the new personal independence payment. We have now gathered and reviewed further evidence, including the helpful contribution provided by Lord Low’s review. Although this does show that the issue of mobility needs for people in residential care homes presents a complex and varied picture there was insufficient evidence of overlaps in funding provision to justify the withdrawal of the mobility component.

Having listened to the concerns raised and carefully considered the evidence, the Government will now table an amendment to the Welfare Reform Bill for consideration at Lords Report stage to remove the provision which allows for withdrawal of the mobility component of personal independence payment from residential care home residents.

UK Disability Strategy

Thursday 1st December 2011 Written Statements

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

I am pleased to announce that today the discussion document, “Fulfilling Potential”, was published. This sets out the Government’s vision of enabling disabled people to fulfil their potential and have opportunities to play a full role in society.

“Fulfilling Potential” invites disabled people and their organisations to help shape future policy and develop a cohesive new cross-Government disability strategy. This will be a key part of our commitment to breaking down the barriers to social mobility and equal opportunities faced by disabled people in Britain today.

“Fulfilling Potential” outlines three main areas for discussion: realising aspirations, increasing individual control and changing attitudes and behaviours. It seeks practical ways of making a real difference to disabled people’s lives, even in these difficult economic times.

The Government inherited a wide range of relevant strategic thinking including the Life Chances report, the Independent Living Strategy, and the Roadmap 2025. We will build on this and on the UK’s commitment to the UN convention on the rights of disabled people. We will work closely with the devolved Administrations to share best practice and strategic approaches.

Following a three-month engagement period, we will publish our new strategy in spring next year.

Welfare Reform Bill (Conditionality and Sanctions Contingency Fund Advance)

Thursday 1st December 2011 Written Statements

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

The Department of Work and Pensions has obtained approval for an advance from the contingencies fund of £800,000 to allow for the development of IT. This amount is part of the proposed investment in conditionality and sanctions changes of £3 million agreed at the time of the spending review.

In October 2012, the conditionality and sanctions project will introduce a claimant commitment, designed to give greater clarity to claimants about the consequences of failing to comply with their job seeking or work preparation requirements. This will be underpinned by a more robust sanctions regime with tougher sanctions for repeated non-compliance, and a revised hardship regime. These changes will align current key benefits with the proposed policy for universal credit, which will simplify the migration of existing claims on to universal credit from 2013.

The advance from the Contingencies Fund will allow essential work to commence on detailed process design and IT changes, to enable the implementation of the new conditionality and sanctions regime in advance of universal credit.

Parliamentary approval for additional resource and capital of £3 million for this new service will be sought in the supplementary estimate for the Department for Work and Pensions. Pending that approval, urgent expenditure estimated at £800,000 will be met by a repayable cash advance from the Contingencies Fund.

Grand Committee

Thursday 1st December 2011 Grand Committee

Thursday, 1 December 2011.

Eurozone Crisis

Thursday 1st December 2011 Grand Committee

Considered in Grand Committee

14:03

Moved By

[Lord Lamont of Lerwick]

That the Grand Committee do consider the economic situation of the United Kingdom, including the impact of the eurozone crisis on the United Kingdom and other non-eurozone members.

[The Deputy Chairman of Committees (Lord Brougham and Vaux)]

Good afternoon, my Lords. I am sorry about the delay, but we had to have a sound engineer so that Hansard could report.

The House yesterday agreed a Motion to limit the debate in today’s Grand Committee in the name of the noble Lord, Lord Lamont of Lerwick, to four hours.

14:03

[Lord Lamont of Lerwick]

My Lords, I am very delighted to have the opportunity to introduce this debate. I ought to explain that this debate originated as a question put down by myself and the noble Lord, Lord Flight, intended for the dinner break, and was to be a debate entirely and only on the euro crisis. Somehow the Motion has metamorphosed into something wider, and the debate that was originally intended to be in the Chamber has now been relegated to the Moses Room. In view of the attendance here today and the importance of the subject, which can hardly be underestimated, perhaps it would have been more appropriate had it been in the Chamber in the first place.

I hope that noble Lords will forgive me if, despite the widening of the Motion, I confine my remarks almost entirely to the issue of the eurozone. Of course, I will listen extremely carefully to the points made by other noble Lords—notably, the noble Lord, Lord Eatwell, from the Front Bench, the noble Lord, Lord Myners, its other spokesman, and, of course, my noble friend Lord Wolfson of Apsley Guise, who is going to make his maiden speech during this debate. He is notable for many things, but one other notable thing that he has done has been to offer a very large prize—I shall not mention the exact sum of money—for anyone who can given him the solution as to how to dissolve a monetary union. During the course of my speech, I hope to name at least one candidate for the prize.

I will say just one brief word on the Autumn Statement and the position of the British economy. The critics of the Autumn Statement criticised the Chancellor and the Government yesterday for not having achieved their borrowing targets and for having increased borrowing, yet these were the same people who were urging them the day before to increase borrowing further. They seemed to believe that if we had borrowed more money last year, we would be borrowing less money this year. If only life were as simple as that.

As the Chancellor of the Exchequer said the day before yesterday, you have only to turn on your television to see that everywhere in Europe other countries are reducing their budget deficits and taking drastic action to do so. Indeed, we are probably doing so less quickly than many other countries in the eurozone. The Government’s starting point was the situation that our annual deficit as a proportion of GDP was equal to that of Greece, around 12 per cent. Of course, as is fairly, rightly and frequently pointed out, we had the advantage of a low stock of debt, but if you are adding to that at the rate of 12 per cent per annum, that advantage will quickly disappear. In today’s world, the Chancellor was absolutely right to embark on the programme of fiscal consolidation that he has.

One reason for having a debate on the eurozone crisis by itself is that I believe it represents a large threat to our economy and that of the world. One commentator yesterday compared the Chancellor’s task to that of a doctor treating a patient on board the “Titanic”, and the approaching iceberg was the eurozone. If anyone doubts the seriousness of the situation, just look at the front pages of the newspaper, with Mr Van Rompuy and Mr Barroso sitting opposite the President of the United States in the White House; they were not invited there just to have a cup of tea. Indeed, the action by central banks yesterday to increase dollar liquidity and the liquidity of banks in other currencies via swaps was expressly done, according to the spokesman of the United States Government, to offset the effects of the eurozone crisis and the threat to the banking system.

Denial has been a theme of the eurozone crisis. Outstanding examples of denial have been the constant assertions that eurozone banks have adequate capital, a debt default within the eurozone could never happen and the break-up of the eurozone was unthinkable. We have had extraordinary suggestions from Commissioner Barnier—the noble Lord, Lord Myners, had some observations about him the other day—who went out of his way to suggest that credit agencies should be banned from expressing opinions on the economies of member states that had received financial assistance. It seems extraordinary that, in a European Union where we have Charter of Fundamental Rights that enshrines the freedom of speech, this should not extend to credit agencies expressing an opinion about the state of different European economies. We have had many hobgoblins, not just credit agencies. We have had short sellers, credit default swaps, hedge funds and derivative traders—all have been blamed for the increasing and exacerbating crisis within the eurozone.

This crisis has also been characterised by drift. Perhaps that is inevitable because of the nature of the eurozone. When the eurozone was first set up, many people argued that having a currency without a government was a strength; but, in fact, being a currency without a government has turned out to be one of its fatal weaknesses. Thus we have had a whole plethora of attempted solutions at the crisis. First, we had the Irish bailout, then the first Greek bailout, then the Portuguese bailout and then the second Greek bailout. We had the European stability facility, which, as the director of the IMF said, was probably introduced illegally. We then had the European Financial Stability Facility, the EFSF, and we have the proposed ESM in 2013.

We have had lots of different versions of the EFSF. First, it was going to be leveraged; nothing much seems to have happened on that. Then we were going to have co-investment by other countries in it. Then, despite the extreme criticism of credit default swaps, it was going to be made into some sort of insurance mechanism doing exactly what credit default swaps do. Finally, de haut en bas, it was decided that the bailout should be funded by the Chinese—the richest countries in the world were going to ask some of the poorest countries in the world to bail them out. I think that there is an average income of $24,000 per annum in the eurozone compared with $5,000 per annum in China.

It is not just the policies of the eurozone that are the problem. One of the anxieties has been about the ability of the eurozone to execute any solution. Many weeks have passed since the first proposed 50 per cent haircut on Greek bonds was announced. The terms have still not been agreed by private holders, full interest is still being paid on Greek bonds, and the eurozone still wants to deny that there has been a Greek default because, of course, it wishes to maintain the myth that sovereign bonds in the eurozone are risk-free.

We all have different views about the euro and the eurozone and how it was set up, but there seem to me two fatal flaws in the eurozone that have received inadequate attention. The first was the German insistence on the no-bailout rule. That, of course, has been breached not once but several times, but it is still very dear to the German heart for reasons perhaps to do with their own experience of monetary union. It is something that they have surrendered very reluctantly, and it is, I believe, one reason why the German reaction at each stage of the crisis has been to do the minimum necessary in order to keep the euro afloat. For them, there will not be a big bazooka.

The second flaw, which has been pointed out by the economist Andrew Smithers and which again, I think, has received inadequate attention, is the misconstruction of having one central bank coexisting with 17 sovereign Governments. Normally, of course, a central bank must be able to print money. The Bank of England and the Federal Reserve board are owned by their Governments, whose bonds they buy and sell with no credit risk in their daily operations with the banking system. In a currency area, there should, of course, be local governments, but their borrowing should be tightly controlled from the centre, as it is in the UK, or they should be able to default, as is the situation in the United States. In Europe, the pretence is that the debts of the member states are without credit risk; so the European Central Bank is unable to avoid putting risks on its balance sheets in its day-to-day operations with the banking system. It is hardly surprising, therefore, that the Germans are so opposed to the European Central Bank being forced to buy more bonds. It is one thing for the European Central Bank to be the lender of last resort to the banking system, but one can understand the Germans thinking why should it be the lender of last resort to Governments that have overspent and overborrowed?

Until recently, talk of restructuring the eurozone, or of the departure of some members, or of the break-up of the eurozone, was unthinkable. That all changed, of course, at the Cannes summit, when some Greeks made it clear that they did not want to accept the terms of the write-down but wanted to remain within the eurozone. They were then threatened with expulsion from the eurozone—what was unthinkable suddenly became possible. We know that the Financial Services Authority and indeed the Treasury have been drawing up contingency plans. The FSA has been putting questions to companies about a change in the structure of the eurozone. I am not advocating or supporting a change in the eurozone’s structure or saying that a country should depart, but it would be foolish not to recognise that this is now on the agenda and requires thinking about. It is not inconceivable that in a couple of years’ time the shape of the eurozone could be different from how it is today.

We have seen currency unions that have been broken up before: the currency union between Britain and Ireland; that of Czechoslovakia; and indeed—often ignored—that of the rouble-zone, where one currency became five, six or seven currencies. It is clear that, in the currency union of the eurozone, financial integration has been very deep, and has accelerated exponentially in recent years. However, the issues that would arise if one country departed are clear. Some of those were outlined in a paper by Philipp Bagus of King Juan Carlos University in Madrid. My noble friend Lord Wolfson might care to both study his report and to bear it in mind for the award of his prize for someone studying how monetary unions might be adapted. He identified the issues of redenomination, the importance of keeping payment systems going if one country departs, derivative contracts, cross-border loans and the capital banks.

I entirely accept that, in the eurozone, the departure of one or several members would be highly complex and could be extremely expensive. However, while we hear a lot about the costs of breaking up or altering the shape of the euro, the costs of the euro remaining as it is are becoming astronomical and potentially disastrous. Let us start with the bailouts. The two bailouts of Greece cost, respectively, €109 billion and €110 billion. The Irish bailout cost €95 billion. The Portuguese bailout cost €75 billion. These come to a total of nearly €400 billion. If the EFSF reached €750 billion, Germany’s part in that would be €211 billion. Where other countries get into difficulty and are unable to meet their obligations, Germany’s share of that would rise. For this reason the EFSF looks a little like a pack of cards or, as one distinguished central banker called it, a gigantic Ponzi scheme. If it increased to €1.45 trillion—and given that the guarantee of Italy and some other countries in that situation would be worthless—Germany would have to guarantee nearly €800 billion, or 32 per cent of German GDP. If France were to lose its AAA status, the German share would rise to €1.385 trillion, or 56 per cent of German GDP. These may be contingencies; they may be theoretical. However, merely to examine the numbers is to understand why Germany recoils from ploughing more and more money into the EFSF and recoils from the big bazooka.

The European Central Bank has accepted Governments of the peripheral countries as collateral from the banks. If any of the eurozone Governments were to default, they would probably bring down with them part of their domestic banking system. The banks in that situation would be unable to repay the loans to the European Central Bank, which would be left with the collateral. Open Europe calculated Greece’s 50 per cent haircut alone would cost the ECB between €44.5 billion and €65 billion—and that is just one country. Again, one can see why the Germans are reluctant to put more into the EFSF and reluctant also to let the ECB do what so many people have urged it to do: buy more and more bonds.

Which direction will the Germans go in? They talk of fiscal union, but do not mean what we in our debates mean by a fiscal union. We tend to mean a common treasury and tax system. The Germans mean simply more peer pressure and more supervision of national budgets. That is unlikely to work. So what is the German solution? It seems to be to do the minimum possible at each stage. Each country that is in difficulties is expected to deflate for long enough to become competitive with Germany and to put its public finances on a sound footing. However, given the dire state that some of these countries are in, I question whether that is a sustainable solution. The eurozone threatens to asphyxiate its members.

If there were a real fiscal union requiring treaty changes, it would of course be vital to protect our national interests. I would have no objection to the Government agreeing treaty changes that did not affect us, but it is vital that our national interests should be protected. I hope that the Minister will give us some assurance on that. However, I do not think that that is the route Germany will go down. I have said what I think it will try to do. With this minimalist approach, we can look forward—alas—to recurring crises. They could come every few months. They could go on, possibly for years. I think that it was Adam Smith who said,

“there is a lot of ruin in a nation”.

There is probably a lot of ruin in several nations put together. Such a continuing crisis would be extremely damaging to confidence. It would sap it continuously and would mean that the already bleak outlook for growth would become even grimmer.

Such an approach may keep the eurozone and the currency afloat. However, the great risk is the possibility of an accident occurring in the mean time while adjustments take place. It could happen somewhere else in the financial system; for example, in the marking to market of sovereign bonds. We could see a major crisis in a major bank or in another financial institution. It is far better now to look at restructuring the eurozone and not to take it as a given that it must continue in its present form. The effect of delay will be simply that in the longer run the costs of adjustment will become greater. There is no painless solution, but let us hope that somewhere in Brussels, someone is working secretly to prevent this crisis turning into complete chaos.

14:24

[Lord Monks]

My Lords, I am grateful to the noble Lord, Lord Lamont, for initiating this timely and important debate. Its title is rather wide; as has been said, it is about the UK and the euro, and my angle is going to be a little bit different from the one that the noble Lord opened the debate with. In the week of the Chancellor’s Autumn Statement, there have been yet more make-or-break meetings in Brussels. Yesterday there was a substantial public sector strike, just to underline the timeliness of what we are going to debate today.

No one should doubt that in the present economic crisis there are also the seeds of a considerable political one. The way that the international markets set strict rules for countries makes it fairly clear that many democracies are struggling to live within those rules, and to some extent that includes us.

When the banks were in trouble, everyone agreed that that moral hazard did not apply. Governments sprang to their defence and transferred the banks’ huge debts on to their nations’ balance sheets, splashing copious amounts of red ink over the national accounts. Yet when the individual countries were subsequently hit, moral hazard came in with the vengeance. The terms of the so-called rescue packages are very harsh—less Marshall Plan, more reparations.

It should now be clear, and I hope that it is clear in Brussels and in the IMF, that this is a road to depression and political crisis in the countries worst affected, not a road to recovery. The single way to cut deficits is to get people back to work. Then there are more tax revenues to be collected and more disposable income to spend. Looking after the deficit while hoping that unemployment looks after itself is self-flagellation or, worse, economic suicide, as Joseph Stiglitz has regularly termed it.

How did we get into this mess? There are many reasons for that, but one is that the world economy has changed fundamentally since the financial deregulation of the 1980s. This was carried through in the UK largely on the watch of the Treasury of the noble Lord, Lord Lawson, who inadvertently is leaving at the very moment that I have referred to him.

[Lord Lawson of Blaby]

No, I am here.

[Lord Monks]

Apologies for that. One effect of this, although there were others, is that the traditional constraints in financial services largely disappeared. Banks increased their leveraging and invented a bewildering range of new products, most of which in hindsight appear to have been more dangerous than beneficial, described as “socially useless” by the noble Lord, Lord Turner, currently chairman of the FSA or, to use another memorable phrase used by Warren Buffett about credit derivative swaps, “financial weapons of mass destruction” that we turned in on ourselves. Wall Street and the City nevertheless claimed to have developed sophisticated forms of risk management, a claim that we can now see was wholly fatuous. By the way, very few people anywhere saw the crash coming, and the economic crisis is now also a crisis of economics. The economists have quite a lot to answer for.

To return to deregulation, though, the effect was to increase private indebtedness to unsustainable levels, leading to rising inequality with totally unjustifiable rewards for people at the top—especially, but not only, in financial services. Even in this crisis, in the period of flat growth that we are going through, average executive pay of directors in the FTSE top 100 increased by 49 per cent last year. And just wait for the forthcoming Christmas bonus season in the City; on past form it will be an orgy of Bourbon-like self-indulgence and a two-fingered salute to the Prime Minister’s claim that we are “all in this together”.

In a debate here last Friday, it was suggested that Europe and the euro were to blame for the crisis by the constraints imposed on national economies. In fact, in my view it is not Europe that threatens national sovereignty. Properly led, though I accept that that is a fairly big qualification, it offers a chance at European level to enhance national sovereignty by creating an economic bloc large enough to influence markets and not be cowed by them.

As for the UK, the crisis has exposed the long-running problem that we have not been fully competitive for a long time with our neighbours across the North Sea: especially Germany, but also the Netherlands and the Nordic countries. We have not benchmarked our performance on a consistent basis against those countries in a way that others do—countries like Belgium and, to a degree, France. We have tended to muddle along using periodic devaluations of sterling, bolstered for periods by the bonanzas of North Sea oil and later by the boom in financial services. Now there are no more bonanzas in view, and the national task must be to move our economy in the same direction as our North Sea neighbours. We must be more long-termist. We must promote more investment, more manufacturing, social markets, greater equality and more multi-stakeholder governance on boards, including worker influence, as well as strong public services. That is the way those countries do it, and theirs are among the most successful economies around, not just for this year but for many years.

The noble Lord, Lord Heseltine, recently said that he had favoured the UK joining the euro because it would make us more like Germany. I believe that he was right, and he could still be right if the euro survives the present crisis. Soon Germany has a very big decision to make. In fact, I think Mrs Merkel is the only one who can win the prize of the noble Lord, Lord Wolfson, because she is the only one whose decision is going to matter. One of the interesting things about this debate is how marginal it feels to the debate about the future of the euro.

While we are talking about the German influence, I think that the reasons of the noble Lord, Lord Lawson, and the noble and learned Lord, Lord Howe, for pushing in the 1980s for the UK to join the exchange rate mechanism also rested on a wish to make the fundamentals of the British economy move in a more northern European or Germanic direction. I believe fundamentally that that remains the challenge today for the British Government of whatever hue, for employers—unions included—and for all sections of British society. Our North Sea neighbours have had continuous success, and we should resume our efforts to match them.

14:32

[Lord Ashdown of Norton-sub-Hamdon]

My Lords, I am grateful to the noble Lord, Lord Monks, for introducing this issue. Although it is perfectly reasonable to be discussing the economics of this country, it seems to me completely bizarre that we should be discussing, outside the circle around the fire, this 650-pound gorilla of what happens to the euro. For us not to have addressed or discussed that seems bizarre. Indeed, for us to be doing it in this Room today rather than in the main Chamber seems odd as well, and I am grateful to the noble Lord for mentioning that.

It is a privilege to follow the noble Lord, Lord Monks. I agree with so much of what he said, and I will come on to that in a moment. Although we talk about the economic crisis, I think that the real crisis is a deep political one, and perhaps we do not recognise that at our peril. Of course we must look forward, but it behoves those of us who argued, as I did, that this country should join the euro in 1997 to say a little word about the past and perhaps to justify that position.

I start by saying that I do not resile one iota from my belief that it would have been right for this country to have joined the euro at some time between 1997 and 1999, for reasons that I shall seek to explain. Those who argue to the contrary, that not joining the euro was the best thing that we ever did, seem to miss a number of points. First, they presume that the euro would have been the same as it is today had we joined; of course, it would not have been. We would have added substantially to those voices within the eurozone in favour of liberalised markets and greater competition, and the balance of the euro would have been different. Even those of us who argued, as I did, that it was illogical to create an economic giant controlled by a political pygmy might even have begun to win the argument within the eurozone that we had to create the instruments to ensure that the position we have now arrived at in the euro was at least less likely.

The second proposition is that somehow or other, if we had joined the euro, we would have been like Greece, Portugal, Ireland and Italy. I do not think that that is true. We are not a small southern economy without a manufacturing tradition but with a certain cavalier attitude to the rules. We are a northern economy, large and with a strong manufacturing tradition, and we respect those rules.

Those rules would have been very good for us. I reflect on the fact that by not joining the euro we left ourselves open to do what we have always done whenever we hit a problem: we do not tackle the fundamental problem, which is that Britain does not produce enough goods at competitive prices that the world wants to buy. Instead, we devalue our way out of trouble. It is what Harold Wilson did, for which he was excoriated, and it is what we have done. Even Conservative newspapers have said, “Thank God we can devalue”. Harold Wilson, thou should be alive this day.

Instead of doing what we needed to do—produce competitive goods that the world wanted to buy—we devalued our way out of difficulty. Instead of acting like Germany, we decided to act as we always have done. Sooner or later this country must tackle its fundamental problem and produce goods that the world wants to buy at a competitive rate. However, not only did we take advantage of the ability to devalue and dodge the issue, but we decided that it was easier and more fun to behave like Italians and build up a massive amount of debt—in fact, not like the Italians, because their debt was 97 per cent of GDP in 1999 and is about 104 per cent now, while our net government debt is now two and a half times what it was.

We are now faced with the worst of all propositions. We have to make ourselves competitive because at last we must, and we must deal with a huge burden of debt as well. Is the position better than it would have been if we had been subject to the disciplines inside the euro? I do not think so. Let us compare our position to that of Germany or those of the other northern economies that are most like us. I take the position of Germany in particular, but one could find the same examples in Benelux, Austria, Finland and other countries. Between 1999 and now, Germany increased its debt by 20 per cent but doubled its growth. We increased our debt by 250 per cent and halved our growth. In which position would one prefer to be?

Of course, Germany has the problems of the euro to cope with. However, as an economy it has nothing like the problems that we now have to cope with and nothing like the difficulties that are ahead of us. I know which of the two positions I would much prefer to be in. It was a great pity that this country did not grasp the nettle and submit itself to those disciplines. I am very confident that if we had done, today we would not be in the economic position in which we find ourselves.

I will address the future in the three or four minutes that I have left. Here I find myself more in agreement with the noble Lord, Lord Lamont, than I had thought I would be. There are three options available to the eurozone. Option one is that the whole thing collapses. Of course, that would be a disaster and a catastrophe. I am very confident that it will not happen because the countries that run the eurozone have too much invested in it; they will not allow it to happen. For all that the noble Lord, Lord Lamont, told us of the costs of trying to save it, the costs of not doing so are even greater.

The second option is that somehow the euro of 17 survives. If I was asked to make a judgment on that, I fear I would say that it is unlikely for two reasons. First, I am not sure that the people of the nations that will have to face these austerities will all agree to do so. It may be unwise not to, because conditions for them will be far harsher outside than inside. However, with a frightened population it is unlikely that all of them will accede to the austerity measures necessary to maintain their position inside the euro of 17. Secondly—here the noble Lord, Lord Lamont, is right—the markets cannot yet be made to believe that the euro of 17 can be sustained. We would probably need a bail-out fund not of €1 trillion but of €2 trillion or even €3 trillion to do that. I doubt if the markets can be made to believe that. Therefore I believe and have always believed that the most likely circumstance is that we will fall back to a core euro. Sooner or later, that is the most likely outcome.

I do not predict it as a certainty. However, on the balance of probability the most likely outcome is a eurozone made up of Germany, Austria, Finland and Benelux. My guess is that Sweden would join under those circumstances. So might Denmark, which is tracking the euro. France, of course, would be in—perhaps not for economic reasons, but for political ones it could not be left out. The big question is whether Italy would be in. Again, it seems almost impossible to imagine that it would be, because I doubt that the German people would bail out Italy. However, if Italy is not, Germany will have to find a huge sum to bail out the banks—to recapitalise German and French banks—as a consequence. Somehow or other, that seems to be the position that we come to.

The question is: what should Britain do in these circumstances? If we had a core euro of that sort, the eurozone would be strong—in surplus, perhaps—and it would be deeply in our interests to join. Do I say that we should from this position? No, I do not. But being the only one of the outs, the only one of those not in the current eurozone that wants to go further out, while all the rest of them want to get back in would be disastrous. If we do not show a willingness to join if it is in our country’s interests, then we immediately diminish our influence and our effect in the Councils of Europe. It is inevitable that the eurozone countries, whether a core eurozone or one of 17, will caucus together and work together to their advantage and, ultimately, our disadvantage. If we are outside that circle, we diminish the influence and voice of Britain catastrophically.

My position is very simple. Let me see if I may differentiate it from what I suspect is the position of the noble Lord, Lord Lamont. My position is very practical. Should it become in Britain’s interests to join the euro we should do so. His position is likely to be that even if it were to be in Britain’s interests to join the euro, we should not. A position driven by pragmatism seems to me to be the best position for our country. I believe that this will come sooner than we think. If this thing can be made to survive—and I believe in the end that it will survive—then, sooner than we think, we will have to address the question of whether or not it is in our interests to join. If it is, I say we should, whereas I think that many people, especially in the Conservative Party, still take the view that even if it was in Britain’s interests to join we should not. A position driven by pragmatism is wise for this country; a position driven by prejudice is not.

14:41

[Lord Williamson of Horton]

My Lords, I declare an interest, as I spent a good part of my career in the United Kingdom in public service dealing with European affairs and a smaller part of my career in the European Commission.

I am very glad, like earlier speakers, that this debate has been arranged, because the serious difficulty that at least five eurozone members are having with the sale of state bonds to finance their public expenditure is already clearly having an effect on our economy, and, if events continue to deteriorate in the eurozone, it could have a much more serious effect. Despite some of the gloom around the Autumn Statement, the present Government are handling our economic problems well, with the consequent low interest rate on UK bond issues, at or about the level of German Bunds. But we must not be complacent. I do not accuse the Government of this, but complacency is implicit in some comment in the United Kingdom on the eurozone’s problems. It is not just the eurozone’s problem.

I wish to speak briefly on two issues. First, what are the eurozone countries likely to do—all of us here are speculating on it, but it is important—by way of treaty change or other economic or financial measures? Secondly, and most importantly, how should we best protect our national interests as the drama continues to unfold?

First, then, what are the eurozone countries likely to do in order to respond to the absence of a central bank or financial institution of last resort? The European Central Bank has recently purchased a very large amount of national debt from some eurozone countries, but it is under the eagle eye of the German constitutional court. I doubt that it could issue euro debt bonds of its own without breaking the Maastricht treaty. Such bonds could be only a partial substitution of national bonds, and the guarantee need not necessarily be full—it also could be partial. Stability bonds would be a valuable aid to the correction of eurozone problems.

Almost every day the Financial Times tells us that the European Central Bank must be more like the Federal Reserve, and sometimes the Financial Times is right. It seems almost certain that new powers will be taken in the eurozone, either by way of enhanced co-operation or by treaty change.

The United Kingdom has already made it clear—correctly, in my view—that it is benevolent but will not participate. So far, there has been a treaty change in March this year to put the European stability fund on a permanent footing, as well as other measures short of a treaty change in October. In September the Dutch proposed a new budgetary commissioner with the power to intervene in eurozone countries with excessive deficits, with potential sanctions. In October the Commission proposed closer monitoring of eurozone countries’ budgets, including the right to ask a country to look again at its budgetary proposals, and envisaged developing options for eurobonds. The Commission believes that that could be done by an enhanced co-operation procedure with treaty change later. That is questionable. Currently, the position of the eurozone countries is that they are considering changes to strengthen monetary union, including possible treaty change, with an interim report this month and a final report in March 2012.

So it is all go, but, unfortunately, not many of the problems have gone away—rather the contrary. It goes without saying that other methods of increasing the resources available to the European stability fund or a greater use of finite resources could combat some present difficulties. The recent decision by a number of central banks to cut the cost of dollar swap lines is useful in the short term.

However, I would like to say a word or two about the possible enhanced co-operation or treaty change that is under discussion in the eurozone. The Minister has an outstanding knowledge of finance, but it is possible that even he may have found the institutional issues somewhat labyrinthine—not, of course, a traditional Greek labyrinth but a grade one European labyrinth. If the eurozone countries wish to move quickly, as the markets clearly want, the procedure of enhanced co-operation under Article 20 of the treaty and the detailed arrangements in Articles 326 and 334 of the Treaty on the Functioning of the European Union is the quickest. Changes made in this way would, of course, apply only to those countries that agreed them, would not form part of the acquis and could not affect the single market. The Treaty on the Functioning of the European Union is extremely explicit on that point, stating that enhanced co-operation shall not undermine the internal market, that it shall not distort competition between member states and that it should not constitute a barrier to, or discrimination in, trade between member states.

In my view, eurozone countries could not legally introduce a financial transaction tax by this method, but that view may be contested—that is a point of importance for the United Kingdom. If action were not taken by enhanced co-operation of the eurozone countries, the treaty would have to be amended or we would just drift along. For a treaty amendment, there are two methods: there is the ordinary revision procedure —more accurately described as the complicated revision procedure, including a convention, an intergovernmental conference and unanimity of all member states. I think that that is one possibility which can be excluded. Or there is the simplified revision procedure under Part IV of the Treaty on the Functioning of the European Union, without a convention or an intergovernmental conference but requiring unanimity and ratification by member states. We would need to ensure that if the treaty changes applied only to the eurozone, our national interests within the European Union as a whole were not damaged. In my view, maintaining and strengthening our financial services should be the prime object of our attention.

If, as I assume, there were no transfer of powers or competencies from the United Kingdom to the European Union, a referendum would not be required in the United Kingdom. The highly important European Union Act, passed in the current Session but which seems to have had little public impact, embodies the principle of “so far and no further” by requiring referendums in the United Kingdom if there were any transfer of powers or competences but not otherwise.

The most effective response to the eurozone difficulties might well be stability bonds, with partial substitution of national bonds and some element of guarantee. But of course in order to pass the “no bail-out” hurdle currently in the treaty, a simplified treaty revision for the eurozone members would be needed in that case.

14:49

[Lord Lawson of Blaby]

My Lords, I join others in commending my noble friend Lord Lamont for having, by a somewhat circuitous route, initiated this debate and for his outstanding opening speech. I echo him too—he was perhaps slightly understated—as in my judgment it is an absolute disgrace that this debate is for only four hours and has been shunted off to the Moses Room rather than being on the Floor of the House. Much as I love the government Chief Whip—and it is not just her—on this occasion the House has been badly let down by the usual channels.

We have so little time that, like my noble friend Lord Lamont, I will confine myself entirely to the eurozone disaster. It was predictable and predicted. I was not alone in predicting it, but I think that I was the first Minister to explain the fatal flaw at the heart of this misconceived venture. I shall quote a speech that I made as Chancellor of the Exchequer at Chatham House on 25 January 1989, before European monetary union had come into being. It was even before the Delors report, the blueprint for monetary union and the eurozone, had been published, but by that time we knew what it was going to say. I said:

“Nor would individual countries be able to retain responsibility for fiscal policy. With a single European monetary policy there would need to be central control over the size of budget deficits and, particularly, over their financing. New European institutions would be required, to determine overall Community fiscal policy and agree the distribution of deficits between individual Member States. These are not technical issues.

The setting up of a European Central Bank or a new European institution to determine Community fiscal policies go to the very heart of nationhood. What organisation would really be the government? It is clear that Economic and Monetary Union implies nothing less than European Government—albeit a federal one—and political union: the United States of Europe. That is simply not on the agenda now, nor will it be for the foreseeable future”.

That is what I said more than 20 years ago, and it was as true then as it is today. It was not meant to be a case for Britain not joining; in my opinion, there was no way Britain would join anyway. I was trying to persuade my European friends and colleagues that they would be ill advised to go down this calamitous route.

You might ask, “Why did it happen?”. It happened partly because there are always ignorant worshippers in the church of Europe who believe that anything that is “more Europe” must ipso facto be a good thing—you do not have to work out the details, because if it is “more Europe” it is good. Of course, the main promoters were much more sophisticated than that. They knew that it could not work without full political union, and it was full political union that they wanted. This was never an economic venture; it was entirely political. It was a means to achieve a full blooded political union—a united states of Europe.

The motives of those who wished for that may have been commendable or noble, but they committed two unforgivable errors—and I could use a worse word than error. First, they showed complete contempt for democracy. That has always been one of the least attractive aspects of the European movement during my time. It was quite clear that you could not have a political union unless you could convince the people of these democracies that they should have it. You had to carry the people with you. But the people do not want it; and it is not just the British who do not want it. As some noble Lords know, my main home nowadays is in France. I can assure noble Lords that French people do not want it either. None of the peoples of Europe, save perhaps those of Luxembourg, want it. But they have been shown a complete contempt for democracy.

The other disgrace, which made this venture the most irresponsible gamble that any senior group of politicians has ever taken in the post-war era, is that it was quite clear that if the gamble did not come off, there would be a disaster, and that is what we have now. In fact, we have a doomsday machine. It is quite extraordinary that we are not asking how to dismantle this doomsday machine, but how to keep it going. “How do we go from bad to worse? Let us keep the doomsday machine going”. It is nonsense. When you have a doomsday machine, you try to dismantle it, but they say, “No. How can we perpetuate it?”.

So where do we go from here? This has both an economic and a political dimension. As I said, the economic dimension has to be the dissolution of the eurozone and a return to national currencies. It has to be done in as orderly a manner as it can. As my noble friend Lord Lamont said, there have been a number of cases in history where monetary unions have been dissolved. Incidentally, history also shows that, as with German monetary union in the 19th century, you have to have political union first, which Bismarck in Prussia imposed, before you can have monetary union. They had to solve the question of the political union first, and they could have monetary union only after achieving political union. I admit that it is not easy, but it is clear that it is the least bad solution. To continue with the doomsday machine would be very much the worst step—not just for us, but for the whole of Europe.

The other aspect of the economic way out is how we deal with a potential—and burgeoning—banking crisis. The consequences of impaired sovereign debt in the eurozone mean that we have a new banking crisis superimposed on banks that are already enfeebled by the banking crisis of 2008 to 2010. This is where the economic threat is coming from. There is no economic threat posed by the break-up of the eurozone because that would be a good thing. The economic threat—it is serious and I do not wish to belittle it—comes from the problem of a serious banking meltdown. But there are ways in which this can be addressed. I believe that the IMF has a key role to play, and as members of the IMF, obviously we will be contributors. The heart of the problem is impaired sovereign debt on banks’ books and so on. I have some experience of this because the first thing I had to deal with when I became Chancellor of the Exchequer in 1983, along with my opposite numbers in what was then the G5—it had not grown to seven in those days—was the Latin American sovereign debt crisis. It was not quite as big as this one, but at the time people felt that there was a real threat to the world economy. It was handled pretty well by the IMF with the support of the finance Ministers and Governments of the G5 countries. I do not have time to go into it now, but it can be done.

Countries are then able to buy time, and that means that to some extents banks are able to do so as well. Banks need time to strengthen their balance sheets. Some banks may still need official assistance as well—assistance from the taxpayer, as it were—in order to prevent a serious banking crisis, but that is the responsibility of national Governments and Treasuries. It is absurd to think that there can or should be a European solution to that. The German Government will have to support German banks if they need support, the French Government will have to support French banks if they need support and so on, just as the noble Lord, Lord Myners—whom I see in his place—tried to support them. Perhaps he was too generous to them; the terms were not very good, and he did not strike a very good bargain. Nevertheless, he was absolutely right that there needed to be some taxpayer support for British banks in difficulty at that time. This is the responsibility of the national Governments around Europe. The idea that there should be eurozone bonds, as if the eurozone were a Government, is ridiculous. The idea that you put the European Central Bank, which is probably already technically insolvent, into an even worse state is absurd.

That is the economic way through. Politically, later on—

[Lord De Mauley]

My Lords, I do apologise to my noble friend. I respectfully draw his attention, and that of other noble Lords, to the fact that this is a time-limited debate. There is a confusion of clocks around the Chamber, but the one to keep an eye on is the one in front of each of us.

[Lord Lawson of Blaby]

I am most grateful to my noble friend for reminding me of that. It underlines what an outrage it is that we are being cribbed and confined in this way.

[Noble Lords]

Hear, hear!

[Lord Lawson of Blaby]

However, I conclude by saying that, later on, we will have to address the politics, which means that we have to get our European partners to sit down around the table and say, “Look, the existing way that Europe works is disastrous”. It has led to this. We have to have a proper constitution; not the Lisbon anti-constitution, but a proper constitution in which it is quite clear which are the competences of the centre and which are the competences of the member states, and to have them properly entrenched, as any self-respecting constitution does.

Finally—this is finally, I tell my noble friend—meanwhile, because we cannot wait for that, there is a threat to the City of London and to Britain as the great financial centre of Europe and the world from misguided European regulation, whether it is the Tobin tax or other things.

I cannot possibly give way. Please, I cannot because of the time. Blame the Whips on both sides.

We have to say clearly that we will invoke the Luxembourg compromise. There is no way that we will allow ourselves to accept a majority vote on regulations that will be damaging to the City of London, when the City of London is far more important—indeed, far more important to Europe—than all of the rest of the financial centres of the European Union put together. We must be absolutely firm in invoking the Luxembourg compromise in saying, “No way”.

[Lord Myners]

My Lords, before my noble friend speaks, I ask the Whip representing the Government whether we will all now be allowed, if required, 13 minutes. The Whip made very little effort to restrict the noble Lord, Lord Lawson. I personally would have liked the noble Lord to have had more time to speak because he has such rich and informed experience. The Whip allowed that to run for 13 minutes, and I hope that he will extend the same courtesy to people from the other side of the House if they so wish.

[Lord De Mauley]

My Lords, the noble Lord knows perfectly well that we are a self-regulating House. We have all agreed to time-limited debates.

15:04

[Lord Desai]

My Lords, first I thank the noble Lord, Lord Lamont, for giving us this opportunity. I shall also heed what my noble friend Lord Monks said: this is not just an economic crisis, but a crisis of economics. I guess, as the first paid-up academic economist to speak in this debate, I had better take that seriously.

I want to talk simultaneously about the UK economy and the European zone, but I also want to include the USA. I see this as a crisis of the developed economies. I see this as an historic moment when the tectonic plates are shifting, and we are now landed with a geriatric capitalism. The young and dynamic capitalism has moved eastwards and southwards—indeed anywhere but to the old, developed economies.

It is not just that the eurozone is in crisis—and it not just an exchange rate crisis, it is a sovereign debt crisis. The United States is in a crisis of debt and deficit, and so are we. The question we have to ask is this: why is no one practising good old-fashioned Keynesian economics? We told the world for many years that we had the answer and that this would never happen again. Perfectly sane people—I presume they are sane—across many countries are finding that they are restricted by debt and they have to tackle deficits, but they cannot use the fiscal spending instrument that they thought they could always use. One answer is that we are all cowards, but I shall resist that.

There are a couple of things that are worth saying. A long-running cycle started in the 1970s, at which stage manufacturing began to leave the developed economies and migrate eastwards. That came about partly as the result of globalisation and partly through a profitability crisis in western countries. Our labour costs were too high and capital went in search of cheaper labour elsewhere. This happened not just in the UK, but by and large a group of developed countries had the same experience. There are one or two exceptions, but I will stick to this argument. We tried to find substitutes in the services sector, both in public services and in financial services. At the end of 40 years, we have finally come to the crunch. They are no longer a viable solution to our problems.

In the mean time, especially during the long boom from 1992 to 2007, probably the longest boom in the history of capitalism, we compensated for our lack of wealth-creating capacity by finding debt instruments. Both households and Governments were in debt before the recession hit. It is important to remember that both Germany and France broke the growth and stability pact not while there was unemployment but when there was full employment. Our debts started to go up while we still had full employment, as did our household debt. When we entered this recession, unlike any previous recession, we were already in a highly indebted position for both households and Governments. It is this which makes the application of the Keynesian solution somewhat difficult. First, there are large leakages due to imports since we do not make very many things. If you do spend money, there is bound to be import leakage. But it is also the fact that households, especially in the latest crash, feel compelled to deleverage because they have acquired debt and they now feel that they have to get out of it.

There is money in the private non-financial corporations. They are sitting on large surpluses. The puzzle is this: why is it that when interest rates are at historically low levels, private non-financial corporations are not investing? One obvious answer is that there is no demand. But if investment has to be for the long run, surely no one believes that demand is going to stay low for ever. There is an obstacle to private investment spending in the economy, and that is one of the things we need to tackle.

I shall now read out a headline from yesterday’s Financial Times. It states:

“Europe squeeze makes Osborne look soft”—

we are all in this together; all countries are tackling it. In the UK, it was quite clear before the election in 2010 that the problem of our debt levels had somehow to be tackled. There was almost an all-party consensus; the difference was on at what rate we should try to eliminate the deficit. My party took the view that within the Parliament we would eliminate half the deficit, and of course the coalition Government took the view that all the deficit should be eliminated. Now, if we are to believe the OBR, it will not be possible to do it within a single Parliament and will take longer. I reserve my judgment on that; it may be much too pessimistic a view but, for the time being, let us leave it.

Could something else have been done? That is the real question. Could a slower cutting of deficit have led to less of a drop in demand and employment? If so, would we still be suffering from the extra shock of the eurozone crisis—the inflation and all that has derailed the Osborne policy? There are two problems, and I am sure that the noble Lord, Lord Skidelsky, will speak on them. First, I am sceptical that the half-deficit elimination strategy could have been sustainable, especially when markets all around were going hysterical about sovereign debt. That is a matter of judgment and people will disagree. Secondly, even if it was possible to do it, the eurozone crisis and the inflation shock caused by the quantitative easing policy of the Federal Reserve and the Bank of England would have been there anyway.

The room we have for manoeuvre is quite limited. I only have half a minute. We need to develop a very different economy in which households restore the habit of saving and Governments restore the habit of balanced budgets. If we can do that—perhaps not by 2015 but in another decade or so—we might be able to restore western economies to a healthy state.

15:12

[Lord Alderdice]

My Lords, I start from the position of one who has been for many years, and still is, very committed to the European project, not just for reasons of political principle and doctrine but because of my experience in my part of the United Kingdom. It was the European project approach that inspired us as traditional enemies—unionists and nationalists—to meet each other across the table rather than across trenches, virtual or otherwise. It was that model of the institutions—cross-border and council of Ministers—that enabled us to find our way forward into practical political ways of co-operating east-west, north-south and within Northern Ireland. It was the European context that brought the United Kingdom and the Republic of Ireland together and produced a framework of relationships in which political leaders and civil servants were able to work together. However, I confess to having been profoundly disappointed by two approaches and three attitudes within the European project that have been profoundly damaging in recent times.

From the start, I wanted to see the development of a Europe of the regions, because it seemed the way for us to move beyond the nationalism that had been so damaging in the last century and towards a federal Europe. However, as time went on it became increasingly clear that political leaders were not terribly prepared to give up the national power of Governments and pool sovereignty sufficiently to make a Europe of the regions a serious possibility. That to me was finally made clear by the appointment, late in 2009, of Herman Von Rompuy and the noble Baroness, Lady Ashton—very fine people in themselves—which was a mark of the lack of preparedness of European leaders to appoint those who would really drive Europe forward. For many of those leaders, and for many of their people, the European project had become a vehicle for the accumulation of power and wealth, not the management of conflict.

The second was the debate between deepening and enlargement. It seemed that one had to choose one or the other. Many of my colleagues, particularly in the rest of Europe, disagreed. They said, “No, no. That is very old thinking. It is wholly possible to have deepening and enlargement at the same time”. I always begged to differ. I could see value in both, but I could not see the possibility of both being done at the same time. That struck me again at Copenhagen in 2002, for example, when a number of new members were brought in who did not necessarily abide by the rules. I think particularly of the admission of Cyprus when it was quite clear that the Cypriot problem had not been resolved and that this would ensure that it would be impossible to resolve the problems not only of Cyprus but of our relationship with Turkey. Tragically, so it proved.

Those were not the only rules that were broken. Here I move on to the three attitudes. The attitude to the rules was defective, as the noble Lord, Lord Desai, mentioned. The stability pact was already being broken long before we ran into the recent economic problems. It seemed as though the project itself and its political dynamic were so important that one could afford to close one’s eyes to the breaking of rules both by southern and northern countries for their own short-term purposes.

There was a second attitude that disturbed me. I wholly realised that the appointment of the Commission as an institution that could drive things forward when national interests would sometimes have held them back, was a necessary thing for the starting and development of the European Union. However, if it continued for too long, a tendency would develop in which European elites and bureaucrats felt that it was not really necessary to bring all the people along all of the time. Again, while I see the short-term requirement for the new Governments of Greece and Italy not to be properly democratically anchored, it is a very dangerous development that thoroughly undermines our capacity to turn to autocrats in other parts of the world and recommend the European project.

Finally, as time went on, the fundamental purposes of the project became lost and submerged. Increasingly, countries wanted to join the European Union not for the political reason of preventing a return to political instability and war in Europe but because they thought that it was a short-cut to wealth and comfort. Many countries joined without any real intention of finding a way to measure up to the kinds of requirements that were in place. At the same time, politicians saw the European project as a way of gaining a platform on the world stage, where they could compete with the United States, China and the developing powers. However, while that may have been their ambition, it was not the purpose of the project and was frankly not what Europeans themselves wanted. They were not interested in that kind of competition. They wanted peace, stability, reconciliation and economic progress in Europe.

As we move down this road, it has been extremely damaging to us within the European Union. Of course, the noble Lord, Lord Desai, is absolutely right. The economic problems we face are not solely problems for Europe; they are much wider. However, today we are concentrating on Europe. In appreciation of the noble Lord, Lord Lamont, I hope that this debate is the first instalment of a wider consideration of issues that are absolutely critical for our country and need further, longer discussion in your Lordships’ House.

Noble Lords will not be surprised that, as a doctor, I will focus on diagnosis before coming to treatment. There are serious questions about whether the diagnosis of the economic dilemmas that we face has been correct. We were told from the start that it was a liquidity crisis. Then it was a problem of bank capitalisation. Then it was a recession, perhaps even a depression. All these things may be around but, fundamentally, what we face is a differential and massive correction. Some countries have simply been living within Europe way beyond not only their current means but any means that they are likely to be able to acquire. That is a very serious matter because, when we come to the resolution of the problem, some of those countries will not be able to return to the way of living that they had three, four or six years ago. As my noble friend Lord Ashdown said, we could be among those countries; there have been indications of that in recent times.

A solution was put forward by some of our colleagues. I heard Guy Verhofstadt, the former Belgian Prime Minister and a good liberal in many ways, make a diagnosis and treatment proposal that I had heard from him before. He said last week in Palermo that a state without a currency was possible but that a currency was not possible without a state to back it up—therefore, we need more Europe and a European federal state. My difficulty is not in thinking how we can find rules for such a thing to happen. As I said, the problem is in persuading people to live by the rules. Although I can understand that a fiscal union could be developed on a German model, I remain to be convinced that even if it is applied to Greece, the culture of Greek society would accept a German-style implementation of those kinds of rules. So I have difficulty in seeing not the theory but the political practicality of making it work. We need to go back to where we made some earlier mistakes.

If it is not possible for all the countries to maintain the requirements of staying within the euro, as seems to be the case, it may be unhelpful for us to insist that Europe moves forward with all those countries within the euro—unhelpful for them and for Europe. The interests of this country economically and politically require us to have a sensitive and nuanced approach to our European colleagues, not to try to press them in a direction that they cannot sustain. There are rules and debts have to be paid, either by the debtors, the creditors or the whole society through inflation or something else. However, if we do not find a new way in which to run Europe with a more variable geometry that allows all of us to remain together in peace and with variable but significant economic and political prosperity for all of us, I fear that, tragically, questions over the fundamental purpose of the European project—to maintain economic and political stability—may hove back into view. That prospect should make all of us shudder.

15:21

[Lord Flight]

My Lords, it is nearly six months ago that the noble Lord, Lord Lamont, and I at the same time asked for a debate on the eurozone’s problems. It is interesting that they have been allowed to worsen since, whereas if measures had been taken a little earlier, perhaps the crisis would not be as grave. But I would like to congratulate the noble Lord, Lord Lamont, on his speech and the noble Lord, Lord Lawson, on his. It was a great pity that we could not hear all that he had to say; here we have two ex-Chancellors of the Exchequer who were in the eye of the needle at key times in recent history and who knew at first hand a lot of what went wrong at the time.

My very modest contribution is a great one for insomniacs. I wrote a book in 1988 called All You Need to Know About Exchange Rates. It focused on what was going on in Europe, and there are references to the wisdom of the noble Lord, Lord Lawson. The point it made even then—a pretty obvious point—was that if countries are very disparate in their economies and some have a real Germanic hard-working ethic and others like to enjoy life you cannot share a currency. It will fall apart. People forget that Europe tried a common currency from 1863 to 1893 everywhere excepting the German states, including Switzerland as well as the other countries—the silver franc. That fell apart because France became massively uncompetitive. There are a lot of other issues but, at the heart of the problem as to why the euro is in such trouble, is the fact that southern Europe has become 35 per cent to 40 per cent uncompetitive against efficient, northern, Germanic Europe. Who wants to buy the bonds of a country where you can see staring you in the face, one way or t’other, that there is going to be a big devaluation sooner or later? That is really at the absolute heart of the problem. You cannot share a currency when those are the characteristics.

Kohl said to Mitterrand that you cannot really embark on a common currency until you have political unification. Mitterrand said to Kohl that that would take forever to achieve, but that if there was a common currency it would force political integration and unification. Much is said about that as a potential solution to our problems. However, I do not see the reality of that. An exercise was done that demonstrated that Germany would need every year to give something like 35 per cent of its GDP to the southern economies to keep them afloat. People forget that in America 30 per cent of federal taxes still go to keeping afloat the unsuccessful regions. Even in little UK, about £80 billion per annum is transferred from the more prosperous to the less prosperous parts. If you share a common currency where there are significant economic differentials, you need substantial transfer payments to keep the less successful economies afloat. However, the sort of long-term transfer payments that would be needed for Germany, Italy, Spain and Greece to share a currency are simply not realistic.

The German solution has been to say, “Come on, you economies, have an internal devaluation and be like us”. Is it realistic to think that Italy would have a 35 to 40 per cent internal devaluation? There would be blood on the streets; it would be hardly practical to achieve. I cannot remember which noble Lord made the point but he was quite right; we do not want Versailles but perhaps a bit of the Marshall Plan. I read just the other day to my amazement that Germany only finished making its Versailles reparations a year or so ago. The total payment was the equivalent of about €350 billion—and look what that did to Europe in the 1930s.

A federated Europe is not the answer to the euro's problems. I cannot see that forcing massive internal devaluations is a solution, either. Hong Kong managed to effect a successful internal currency devaluation after the Asian currency crisis, but that was one of the few successful cases.

So where are we with the various proposals? The noble Lord, Lord Lawson, made the important point that you can perfectly well change currencies if you organise it well and in time. The risk is to the banking system. It is interesting to note not only what the Fed and other central banks organised yesterday, but that, quietly, the Bundesbank over the past six weeks has lent nearly €500 billion to the central banks of southern Europe. Not just individuals but businesses and anyone owing money had been getting their money the hell out of those countries and parking it in euros in Germany and elsewhere. In those countries, the banks are being squeezed like fury and have become forced sellers of government bonds in order to manage their balance sheets. Mercifully this has not been written up too much in the newspapers, but there is an acute banking crisis already in those economies. Yesterday was almost a rescue day before the whole thing collapsed. I note that the IMF said yesterday that the euro was within 11 days of collapse.

Contrary to what some on my side of the argument said, I support the concept of the ECB being able at least in the short term to buy government bonds, because there is a need to buy some time to work out arrangements for orderly currency reordering in the eurozone. I do not think I will win the noble Lord's competition, but it seems to me that the only other option to everyone going back to their historic currencies would be to have a soft currency for southern Europe and a hard currency for northern Europe. One could achieve that either by leaving the euro as the soft currency and bringing in a new, hard currency, or by doing it the other way round. From what one hears, there is a possibility that that may come to fruition because Germany is seriously looking by itself at bringing back the deutschmark. If that happened, Holland, several Benelux countries and probably France would endeavour to join the currency bloc. That is one solution. It is less painful than everyone going back to their individual currencies. It could be done, as occurred in 1893. It needs planning. Banks have to be closed and one has to work out who will bear what liabilities, but it is not impossible.

Keeping the banking system afloat is absolutely fundamental and again I am relieved that the US has come to the rescue. It seems to me that the management by the leaders of the eurozone over the last year has been pitiful. These problems were staring us in the face a year ago; people were writing articles and letters to the paper about them. It is not something that has just come and hit us from nowhere. The whole underlying problem has been understood as well. I just hope that it will get sorted in an orderly fashion and will not collapse in a chaotic fashion. Our economy is clearly in a precarious situation and chaotic collapse would be very bad news for this country. I am still in the camp that thinks that a hard/soft currency would work and I hope Germany will use its initiative to achieve that.

15:30

[Baroness Valentine]

I declare that I am chief executive of London First, a not-for-profit membership organisation that seeks to make London the best city in the world in which to do business.

I will not presume to predict the denouement of the crisis in Europe. However, whatever path to stability is eventually taken, it is likely to take until at least 2020 for Europe to find any sort of new “normal”. With our primary trading partner in a state of flux at best, and paralysis at worst, we in the UK must carefully consider how best we can avoid contagion and the steps we can take to return to growth.

Given the likely period over which we can expect to see reduced growth elsewhere in Europe, it is clear that our own path out of recession is likely to be more challenging and slower than we had previously predicted. To use a hill-walking analogy, before the eurozone crisis we had hoped that we would be gently, if challengingly, climbing our way to the sunlit uplands in the next year or two—a pleasant hike up the South Downs, if you will. We are in a different reality now. Perhaps a better analogy might be a trudge up Ben Nevis—longer, tougher and exposed in places.

Just as there are several routes up Ben Nevis, there are numerous, sometimes competing, approaches proposed for returning to growth. The one I would like to focus most on today is investment in infrastructure. In this context I welcome the Chancellor’s announcement of £6.3 billion in additional investment in infrastructure over this spending period, although this increment is modest compared with the cut in spending from the previous Parliament. The reduction in direct public investment makes it all the more important that the new approaches to funding infrastructure that he announced, such as the memorandum of understanding with pension funds, bear fruit. Investment in economically productive infrastructure shores the UK up for the long term, gives business the confidence to invest, and provides jobs.

I also welcome the review of the PFI model that Infrastructure UK begins this week. However, I would urge the Government to bring it to a prompt conclusion. Private investment will be essential to delivering the Government’s new swathe of infrastructure projects as set out in the national infrastructure plan. However, each investment must be carefully thought through so that it delivers sustainable growth rather than quick fixes or botched jobs. We must be clear about the objectives of any project and the part played by the Government in achieving them. In this context I welcome the new Cabinet committee to be chaired by the Chief Secretary.

If we look at schemes introduced under the old PFI process, a key lesson is that you need an experienced and accountable client for them to deliver well. In practice, this means government clients must resist the temptation to overspecify or constantly tinker. It means standardisation of projects like schools and hospitals and it means being prepared to employ expertise that is not present within government. I appreciate that this runs against the grain of current thinking but there is a real risk of the Government being penny-smart and pound-foolish. Investors need certainty about what will follow from PFI and the Government need to be absolutely clear where accountability sits for the whole of any project, resolving planning issues, funding and financing, and getting the best possible deal for the public sector, otherwise we are in effect setting off without a map.

There will, of course, be many competing demands for infrastructure investment. Typically, investment in London’s infrastructure shows a higher economic return than elsewhere in the country and the capital is some 30 per cent more productive than the rest of the UK. There is therefore a strong argument for supporting projects that will help London to lead the UK through the difficult times ahead. Some of these are within the City itself, such as desperately needed river crossings in east London or the extension of the Northern line to Battersea. These would have a rapid and positive economic impact. While I welcome the government support, I should like to see it accompanied by details of proposed user charges, clarity on sources of public funding and a timetable.

There will also be difficult decisions to be taken. Almost inevitably, given the nature of infrastructure projects, there is an inherent tension between economically productive investment and political antipathy. For example, it is becoming widely accepted that the UK needs an international hub airport with greater capacity than can currently be achieved at Heathrow; the Chancellor noted as much in his speech. The lack of hub capacity is stopping the UK from having the range of direct flights to BRIC and other growing countries enjoyed by European competitors, thus undermining growth and commerce. There is an obvious solution: build a third runway, where the planning application is ready, the financing is in place and services could be up and running within a decade. Ironically, that is the one conclusion that the Government have ruled out. Perhaps the chill winds of economic circumstance have yet fully to penetrate Downing Street.

Beyond infrastructure, and as the rest of Europe works its way back to stability, the competitive position of London will increasingly be challenged. Indeed, we are already seeing this in some of the financial regulation emanating from Brussels such as the proposed financial transactions tax, which has the potential to have a disproportionally damaging effect on London as Europe’s financial capital. Likewise, when I look at the way in which some of our European competitors are forging transport links with emerging markets, I see a risk that we will be left quite literally waiting at the gate.

At the moment, the capital probably has the most successful and international professional and business services sector in the world. A recent report indicates that almost two-thirds of major international companies have an office presence in London. People come here to do deals because they know that the talent and structures are here. London is the natural launch pad for American businesses looking for a European base and vice versa, as well as a toehold for Far Eastern businesses.

Retaining those businesses and attracting more is vital for our future. As Europe is stagnating, so it is imperative that we raise our game in trading terms with the rest of the world. International businesses must see London as a strong and competitive place to do business, and that relies both on their perception of current policy and on their confidence in the Government’s future plans. Above all, the UK must be—and be seen to be—open for business. Immigration policy needs to welcome productive workers and genuine students, employment law needs to create the conditions for more jobs, not fewer, and our regulatory approach needs the flexibility to accommodate these global players. Our corporate and personal taxes need to be seen to be competitive and consistent. At one end, I urge the Government to act on their ambition to lower the top rate of tax. Equally, I would like to see the personal allowance increased as speedily as possible, a measure that is fair and puts more money back in everyone’s pockets.

I began by observing that the eurozone’s path to stability was still uncertain. That being the case, it is all the more important that our own leaders demonstrate clarity of vision, certainty of direction and consistency of approach in how they address the challenges that this crisis has brought for our own country. That way, perhaps climbing the mountain ahead may feel a little more like a hike in the hills.

15:38

[Lord Wolfson of Aspley Guise]

My Lords, it is with great pleasure that I speak for the first time in your Lordships’ House. I thank your Lordships for the extraordinarily warm welcome that I have received from everyone I have come into contact with here. It is a genuine inspiration and privilege to hear the quality of debates and observations in this House. I also thank the officials and staff for their never-ending patience, helpfulness and professionalism, which are such a great asset to this institution.

I thank my supporters: my noble friend Lord Leach of Fairford, who has been something of a political mentor to me, and my father, my noble friend Lord Wolfson of Sunningdale. I realise that not so long ago it would have been a contradiction in terms for a father to introduce his son. For me it was an unusual pleasure and an apt one. My father’s incisive mind, his deep work ethic, his moral courage in both business and his political life and his philanthropic convictions have been an inspiration to me. I hope that they will remain so and that they will guide me. I am not just saying that because I am his heir, by the way, in case anyone was thinking that I was just creeping.

My father’s qualities reflect some of the character of his uncle, the son of a Jewish eastern European refugee who founded a great business empire and went on to do charitable works. Those have been conscientiously carried on by his son. Indeed, it is his charitable works that are more of an inspiration. It is a lesson in capitalism that it is not necessarily the making of the money but the wise spending of it that is a testament to greatness in a capitalist society. It is also a remarkable testament to this country that my great-grandfather was able to count among his descendants within three generations, three Members of this House and a Baronet. It is an extraordinary reflection of the tolerance, openness and opportunities afforded by this great nation, and it is an honour, to serve in this House which, over the centuries, has done so much to shape and protect the laws and liberties of this land.

Today, we are talking not about protecting our laws and liberties, but protecting our finances. I worry about all the hard work that is going into propping up the eurozone at the moment. To use an analogy, it is like a group of men standing around a fire on a freezing cold night. The fire is beginning to dwindle, and slowly but surely they decide that the best thing they can do to keep it going is to take their coats off and burn them. At some point I worry that we will run out of coats. The German standing by the fire does not have an infinite supply of clothes to burn on the fire. If nations are to behave responsibly at this time, we must face up to the possibility that the eurozone may well collapse. The noble Lord, Lord Ashdown, instructively pointed out that the euro may survive, but that it is likely to do so in a lesser form.

The turmoil and problems caused by a collapse would be enormous, but I do not believe ultimately that the reason for it is anything to do with the financial markets; it is to do with the labour markets. It is to do with the structural problems that have caused these financial problems. The fact is that over the past 10 years, Greek wages have risen by around 30 per cent relative to German wages. Wages in Spain and Portugal have risen by 20 per cent more relative to German wages. That has locked them into a structural lack of competitiveness. Internal devaluation is simply not an option, because people have mortgages and debts. If they take a pay cut, they cannot take a debt cut. If they take a debt cut, that is a real devaluation; that would mean leaving the eurozone. What happens when countries leave the eurozone is the challenge I am most worried about.

The noble Lord, Lord Lamont, was kind enough to refer to a prize that I have initiated. I am hoping that, having heard this debate, there will be a Lords entry and we can pool our resources, although obviously I would not be part of the team myself. The big problem for me is not what happens to trade, because I think that it will sort itself out. I am a trader and I am used to dealing with big swings in the valuation of currencies. The major problem is the banks. The position that we in this country must worry about is the position of the British banks with subsidiaries in southern European countries, particularly where they have more loans and mortgages outstanding than they have deposits. I would be interested to hear the Minister’s view on this. Do the Government have a clear view of what the exposure of British banks would be in the event that certain countries leave the eurozone? British banks could be left with an enormous exposure to debt that would have to be written off. The problem is that whatever view we have at this time of the size of that exposure, it can change. That was pointed out by my noble friend Lord Flight. It can change overnight, and indeed some £500 billion-worth of those deposits have already moved from the weaker countries to the stronger ones.

It is my belief that unless something is done urgently to control this flight of capital, the crisis that will eventually emerge will be far worse. We are facing a Catch-22 of enormous proportions. If the Governments of Europe begin to impose anything that looks like capital controls, that in itself will precipitate the end of the eurozone. If they do nothing, the end of the eurozone will be that much worse.

I finish by saying that, in my view, it is a far better approach to take the bolder of these two choices, and address the issue of capital flight now, before it is too late, with all the risks associated with it. In a case where you have to choose between making a bad decision and making a very bad decision, it is always best to make the bad one.

I thank your Lordships for hearing my maiden speech with such silence and respect and even with apparent interest. I, too, am disappointed that I was not able to make it in the Chamber.

[Noble Lords]

Hear, hear.

[Lord Wolfson of Aspley Guise]

However, I am at least able to say that I made it in front of a full house, so I thank your Lordships very much.

15:45

[Lord Hollick]

It is a great pleasure to follow the maiden speech of the noble Lord, Lord Wolfson. He showed great humanity and insight, with a nice, witty touch. He is a man of considerable distinction in the business world and, as we have heard today, comes from a family of great distinction. He was the youngest CEO in the FTSE 100 when he was appointed as CEO of Next. He showed, as has been mentioned on a number of occasions, a great flair for promoting some of the causes close to his heart when he announced his £250,000 prize—no mean prize, that. Perhaps he might like to consider a more modest prize for Peers who can come up with an exit strategy from the current economic turmoil that we find ourselves in. Sadly, as he has pointed out, he will be unable to participate in that, as House rules would probably prevent him under a conflict of interests. I congratulate him on his speech, and we very much look forward to his contributions.

I am very grateful to the noble Lord, Lord Lamont. There are two debates here, one about Europe and one about the United Kingdom. I intend to talk about the United Kingdom, but obviously against the background of all that has been said on Europe. The OBR report was a truly sobering document. There has been an alarming deterioration in the public sector finances, with borrowing set to rise by more than £150 billion above last year’s forecast. Growth has stalled for at least another 18 months, with all the risks on the downside. Household budgets, down by 2.3 per cent this year, are under intense pressure, particularly for the less well-off. This takes place against the existential threat of the disintegration of the eurozone, with all the consequences that have been colourfully and accurately made plain in this debate.

The Chancellor’s key economic judgment in 2010 was that fiscal consolidation would promote growth, that private sector growth would replace the jobs lost in the public sector and that private sector investment would make up for the shortfall in public sector investment. That judgment has been shown to be wrong. If you peel away the rhetoric, the Chancellor is now admitting as much. He is now being urged by both the IMF and the OECD to consider a more flexible approach, with a staged approach to cuts combined with temporary tax cuts. The Chancellor, like his predecessor, has worked hard and successfully to maintain credibility in the financial markets. As we have seen in the eurozone over the past few months, once credibility is lost, it is hard and very painful to regain: borrowing costs increase to quite unsupportable levels. Financial markets want to see a clear plan, effectively implemented; but they are also well aware that fiscal consolidation without economic growth is a dead end. The risk in today’s very volatile world economy is that our current recession will turn into a depression.

In March, the Government published The Plan for Growth, with 137 measures. They have just published a scorecard on how they are getting on with these measures. The OBR judged at the time that the measures would have no significant impact on growth. So how does the latest package shape up? Is this apparently long list of rather hurriedly assembled growth measures likely to make any measurable difference? It will not, according to the OBR, until 2014-15. I would be grateful if the Minister could confirm that the Treasury also agrees that the measures will have no discernible effect over the next three years, when growth is most needed.

In our debate on growth in March, noble Lords on all sides of the House urged the Government to focus on infrastructure and SME financing. The Government listened and acted. The noble Lord, Lord Skidelsky, has long advocated an infrastructure bank, which I enthusiastically support. An independent specialist bank that can evaluate risk, access and finance projects and possibly take advantage of the Government's ability to borrow at ultra-low interest rates will be essential if we are to encourage pension funds to invest in infrastructure. Pension funds are indeed hungry for safe, long-term, inflation-proof returns. However, all the evidence suggests that they prefer to invest in established projects with proven cash flows, not in risky greenfield projects.

SMEs create jobs and bring competition to established players, to the benefit of productivity and the consumer. SMEs are now coming to the centre of the political debate. On the supply side, more rigorous competition needs to be stimulated in sectors such as banking, utilities and energy supply if new entrants are to be encouraged to enter the market. Of course, funding must be more readily accessible. Credit-easing initiatives are welcome, particularly after the poor experience of Project Merlin. However, the Treasury is still far too fixated on debt finance. Many of our SMEs are undercapitalised by international standards, in part because the tax system treats debt finance more favourably than equity finance. With insufficient equity, the SME owner pays a very steep price to the bank and has to pledge all his assets to raise a loan.

Instead of tinkering with minuscule tax reliefs for EIS or VCT schemes, why do we not tap into the considerable cash resources of entrepreneurs and the wealthy in our society and encourage them to invest risk capital in SMEs by allowing equity subscription to be written off against the marginal rate of tax? This would not only bring in much needed equity to SMEs but would make available the experience and knowledge of the investors. I can testify that the smart-investor model works well in the venture capital industry here and in Europe, and it is one of the key ingredients behind the successful level of business formation in the United States.

Why SMEs are not borrowing is apparently a mystery to the Treasury. The reason is simple: why should they take on more borrowing to increase capacity if there is no sign of an increase in demand? When Bob Diamond appeared recently before the Economic Affairs Committee of this House, he noted that since the start of the year more than 40 per cent of Barclays business customers had increased the level of their cash deposits with his bank because they saw no merit in investing at a time of weak demand.

If the Government are to deliver growth, they must stimulate demand. Now that the Chancellor is embracing a more flexible and interventionist approach, he needs to be bolder. He should borrow to finance infrastructure projects that generate cash returns, and should stimulate demand by lowering taxes such as VAT and the basic rate of income tax, which will feed directly through to consumption. He should provide much bigger tax incentives to invest in SMEs and to encourage employment and training. He has already identified a number of areas where taxes can be raised without damaging growth. I suggest that he should now bear down even harder on loopholes such as the stamp duty avoidance scheme on expensive properties and on the regressive structure of community charges. Now that he has at last embraced a new approach, he needs to turn this week's mish-mash of measures into a bold and coherent plan to promote growth through investment and demand management.

15:53

[Lord Maclennan of Rogart]

My Lords, it is a very great pleasure to follow the maiden speech of the noble Lord, Lord Wolfson of Aspley Guise. In Glasgow, where I was brought up, his family was regarded not only as distinguished but as one that aspiring young people ought to emulate. I had the privilege of meeting some of his family in that great city rather a long time ago. I enjoyed what he had to say, as I believe the whole Committee did, and we look forward very much to his future participation in our debates.

The euro crisis has been repeatedly cited as the external factor that has blighted Britain’s economic recovery prospects. It therefore seems to follow that this country ought to do all that is within its power to assist in the resolution of that crisis. The attitude of the responsible Ministers has, I fear, been insufficiently supportive of the efforts being made by the other European Governments to avert the risk of sovereign default and spreading contagious bank collapses.

In the somewhat bullish report that the Chancellor of the Exchequer, Mr Osborne, gave to the House of Commons after the European summit of 26-27 October, he indicated that, although the IMF could use,

“its expertise and advice to help the eurozone to create the special purpose vehicle that it is considering”,

he emphasised not only that the IMF,

“cannot put its own resources in”—

as he put it—but that Britain would not put its resources in either. Having stood back, the Chancellor then saw fit to call for the eurozone countries to produce their plans,

“to increase their firewalls and sort out Greek debt”.—[Official Report, House of Commons, 27/10/11; col. 471.]

While it is clear that our Government recognise that it is in Britain’s interest that the euro operates more effectively, it is rather obscure how the Government are working to bring that about.

The situation has deteriorated in the past few weeks. Risk premiums on the bonds of the AAA-rated Austria and France rose to record levels. It was pointed out this week, on 28 November, that two decisions were made at the summit with damaging consequences that were not intended. I quote a report from Reuters Breakingviews:

“First, banks underwent a stress test that marked their sovereign bond exposures to market whereas previously regulators maintained the fiction that these positions were risk-free. This meant that lenders suddenly had to start holding capital to back their sovereign debt investments. Not surprisingly, they have become more reluctant to buy bonds. This, in turn, has made it harder for governments to fund themselves. Second, the summit decided to strong-arm the banks into agreeing to”,

what was described as,

“a ‘voluntary’ debt restructuring for Greece. Because the deal is supposedly voluntary, credit default swaps (CDS)—a type of insurance policy that pays out if an entity goes bust—won’t be triggered. This arm-twisting has convinced lenders that CDSs are a useless way of hedging the risk of investing in euro zone government bonds. Without a hedge, many prefer not to hold the bonds at all—again making it harder for states to fund themselves”.

Despite these political problems, it does seem that there has been some good political news. The new Prime Ministers of Greece, Italy and Spain have all indicated their determination to cut debt and make their economies much fitter. None the less, they will have an impossible task if investors cannot be convinced that the euro is here to stay. Perhaps the central hope of restoring confidence lies with the European Central Bank. If it can devise support for Governments who are intent on restructuring their economies, that should be backed. It does not necessarily mean that it has to become a lender of last resort; however, that prospect has definitely been advocated by many in this country and elsewhere, although reluctantly considered by Germany. Germany should certainly consider ways and means by which the central bank could go further, to assist the problem of facilitating its greater involvement. Of course, Germany is afraid of the lack of adherence to the terms of the stability and growth pact in some of the peripheral countries—perhaps overlooking what it did itself in the earlier days, which has already been referred to in this debate.

This country should also back the central bank, although we are not part of the eurozone. It was rather surprising that the Government indicated that they would not contribute money to the IMF that might be contributed to Europe. That seems to me to be a bizarre position and certainly makes it more difficult to give credence to the thought that the present Government are actually trying to help the eurozone. The EFSF might be the recipient of loans from the European Central Bank to bring its firewall into effect. Given that the ECB is not at present committed directly to fund Governments, perhaps it could itself lend to the IMF, which in turn could lend to Italy and Spain.

The German recognition and requirement of fiscal discipline is rational and should certainly be embodied in the revised treaty, but perhaps that might be extended to form a debt union, with the mutualisation of debt jointly and severally guaranteed. However, such moves cannot be made overnight and will not deal with the immediate problem. The threatened countries must now pool their thinking on what are acceptable debt targets and the timing of their implementation, and that will not be a uniform scenario; it will have to take recognition of the different platforms from which countries are starting.

Before Britain loses its reputation altogether as a concerned member of the European Union, it should seek to use its position to indicate ways in which the situation can be taken forward. Showing good faith rather than Euroscepticism can have a catalytic effect.

[For the continuation of today’s proceedings, see Official Report, 5 December 2011.]

House of Lords

Thursday 1st December 2011 Lords Chamber

Thursday, 1 December 2011.

11:00

Prayers—read by the Lord Bishop of Ripon and Leeds.

Housing: Rented Homes

Thursday 1st December 2011 Lords Chamber

Question

11:06

Asked By

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what action they are taking to deal with the shortage of homes for rent.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, the Government are committed to the provision of affordable housing and are investing nearly £4.5 billion to help deliver up to 170,000 new affordable homes, mainly for rent, by April 2015 in England. This is more than the 150,000 originally estimated and means that the Government will be able to deliver more affordable homes in that timescale than had originally been anticipated.

[Lord Kennedy of Southwark]

My Lords, we have the lamentable failure of the Government on new homes for rent. There is also the impact of 80 per cent of market rent, which means that a family of two adults and two children living in the London Borough of Newham needs an income of £48,000 a year to afford a home without claiming universal credit. Does the noble Baroness understand that, because of the lack of joined-up thinking across government and failed policies, hard-working families are paying the price?

[Baroness Hanham]

My Lords, that scoops up a whole lot of things, some of which are not entirely to do with me. The universal credit is not part of my department, although I recognise that the housing benefit goes towards the contribution of housing facilities. We are trying to provide, and will provide, affordable housing for as many people as we can. The universal credit and the amount of money paid in housing benefit is something that my noble friend Lord Freud will deal with in due course.

[Lord Shipley]

My Lords, does the Minister agree with me that the reason for the shortage of homes for rent is the failure of the previous Government, over 13 years, to build council houses? Given the pressure on the private rented sector, and the fact that 40 per cent of homes in that sector do not meet the decent homes standard, what consideration is being given to further regulation of the sector? Will the Minister consider the advice of the British Property Federation, the National Landlords Association and the Association of Residential Letting Agents that there should be a system of compulsory regulation of letting agents to ensure that professional and ethical standards are applied to private sector lettings?

[Baroness Hanham]

My Lords, with regard to the last point made by my noble friend, the Minister for Housing, Grant Shapps, has said that he is looking to see whether there is any requirement for letting agents to be registered. He is keeping that under review but there is no plan to do so at the moment. With regard to decent homes, yes, the decent homes money will still be there, and we expect to make a big contribution to that in the next few months and have done so already. Yes, the number of affordable homes was going down, rather than up, under the previous Government, and it is a matter that we are having to deal with.

[Baroness Turner of Camden]

My Lords, is the Minister aware that one of the problems is the size of the rents that are being charged, particularly in places such as London? For example, in my area of London a two-bedroom flat will cost £500 a week to rent. That is right out of the range of ordinary working people. Is the Minister aware that after the last war there was rent regulation that enabled at least some people to get into affordable homes? Some regulation is needed in this area at present.

[Baroness Hanham]

My Lords, young people on the waiting list who require affordable homes, or who are being asked to find private accommodation, will, like everybody else, have to see where they can find accommodation that they can afford. That is happening across London in particular. Housing benefit will support what it can, but I am afraid that people either have to pay the additional amount or find somewhere that falls within their capability. I do not think that anybody wants to go back to rent control. It was not helpful, did not leave properties in good condition and was not fair.

[Lord Best]

My Lords, will the Minister tell us what is happening about the real estate investment trusts, which are the intermediaries that allow insurance companies and the big pension funds to invest in residential property? They have been held up for a long time by the bureaucracy and complexity of the system but we badly need the finances that those big City institutions could put into residential housing. They would probably be rather good landlords. Will she tell us what is happening about those REITs?

[Baroness Hanham]

My Lords, I recognise entirely what the noble Lord has said. This is a very important aspect of getting money into residential accommodation. I think this matter is still being discussed with the Treasury. I hope that it will be able to say something about that in the not too distant future.

[The Lord Bishop of Hereford]

My Lords, we have heard questions about the rental prices in London. Will the Minister be kind enough to say something about what the Government are doing to try to ensure that there are more affordable rental homes in villages and the countryside as well?

[Baroness Hanham]

My Lords, the Government have a number of policies. The right reverend Prelate will know that a community right to build is one of the policies coming forward, which will enable communities to decide whether they can contribute in some way to getting affordable housing. Secondly, we are allowing decisions about the requirement for housing to be made locally so that local people have a bigger say in what is provided and where. We fully recognise the fact that affordable housing is needed in country villages but we also believe that if local people know where it is going to be, understand where it is going to be and are happy with that, there is far more likelihood that those properties will be built.

[Lord McKenzie of Luton]

My Lords, the Minister will be aware of provisions in the Welfare Reform Bill whereby housing benefit will be docked for those tenants deemed to underoccupy their house, even if there is no suitable available accommodation for them to move into. The noble Baroness will also be aware of the announcement on Tuesday about the so-called reinvigoration of the right to buy, with 50 per cent discounts. Will those tenants deemed to underoccupy their house be able to benefit from the right-to-buy provisions at the full 50 per cent discount?

[Baroness Hanham]

My Lords, I must be perfectly honest that I cannot answer that correctly. I will write to the noble Lord on that aspect. However, as regards the proposal on the right to buy, it is suggested that the discount will go up to 50 per cent, which means that there will be more opportunity for people to take advantage of the right to buy. The other side of that is that, unlike in the past where a substantial proportion of a deposit had to come back to central government, it will be retained locally so that it can be used to provide further affordable housing.

[Lord Cormack]

My Lords, will my noble friend recognise that although the right-to-buy policy was rightly and widely welcomed, and many of us welcome what the Chancellor said in outline, nevertheless it took a lot of houses out of the affordable bracket? It was a particular mistake to allow those occupying old persons’ bungalows to buy their houses because it meant that their children bought them and then sold them on at a great profit, thereby depleting the stock of that sort of housing. Can we please not repeat that mistake?

[Baroness Hanham]

As I said in my previous answer, any money that comes from right to buy will be invested in new affordable housing. As for residential homes, they are slightly different to the mainstream right to buy, but I note what my noble friend says.

Pakistan

Thursday 1st December 2011 Lords Chamber

Question

11:15

Asked By

[Lord Ahmed]

To ask Her Majesty’s Government what is their assessment of the contribution made by Pakistan as the front-line state in the “war on terror”.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, Pakistan remains an important partner in the fight against terrorism. As my right honourable friend the Prime Minister stated following his meeting with President Zardari on 4 July last,

“working together to defeat terrorism in all its forms is very much top of our agenda”.

The al-Qaeda core has been severely weakened over the last six months. It is important that the UK and Pakistan, together with other key international partners such as the United States, continue to work together to disrupt terrorist groups which threaten all our interests.

[Lord Ahmed]

I thank the Minister for his reply. Will he join me in sending condolences to the families of 26 Pakistani soldiers who were killed by a NATO air strike a few days ago? Is he aware that Pakistan has lost over 30,000 civilians and over 5,000 soldiers—more than any other country in the world—as well as $75 billion to $80 billion, and that Pakistan has hosted over 6 million refugees from Afghanistan? Separating the sacrifice made by the people of Pakistan from Ali Baba and his 40 companions, will the Minister assure the House that the British taxpayers’ money allocated to DfID for education and training teachers will not end up in this individual’s private accounts in Switzerland?

[Lord Howell of Guildford]

Yes, my Lords, as regards condolences, I certainly join the noble Lord. In fact, my right honourable friend the Foreign Secretary spoke to the Foreign Secretary of Pakistan only the other day to offer his deepest condolences. A full investigation of that really tragic and dreadful incident is, of course, under way. I hope Pakistan will participate fully in that investigation. The United States has expressed its regret at the loss of life.

As regards the suffering faced by Pakistan, I think we all acknowledge the colossal strain on Pakistan, its society and all its citizens, with the conditions they face not only on the terrorist side, but also through the visitations of floods and other challenges, all of which add great difficulty to Pakistan’s administration. As for our aid, I can assure the noble Lord that all our aid is independently evaluated and scrutinised under our UK Aid Transparency Guarantee, and that certainly applies to all aid to Pakistan as well.

[Lord Stirrup]

My Lords, will the Minister agree that the most telling contribution Pakistan could make to global security would be to improve levels of effective governance, economic growth and employment within its own borders, and that the international community should not allow its frustration over other issues, however understandable, to divert it from this strategic focus in its engagement with Pakistan?

[Lord Howell of Guildford]

Yes, that is an extremely wise observation, and I think that Her Majesty’s Government would totally agree with it.

[Lord Avebury]

My Lords, I add my condolences to the relatives of those who lost their lives in the tragic event last week. I ask the Minister whether consideration will be given to postponing the Bonn meeting to allow Pakistan to participate. Could its agenda perhaps be extended to cover discussion of the findings of the NATO inquiry into this tragedy, including an investigation into the allegations made by Major General Ishfaq Nadeem, that it was impossible for NATO not to have known that it was attacking Pakistani posts, and that NATO had ignored mutually agreed communications procedures?

[Lord Howell of Guildford]

No, I do not think it would be right to seek postponement of the Bonn meeting which is coming up, and we urge Pakistan to join. I know that in its dismay at this whole event it has thought about not joining, and in a sense that is understandable. But one looks for second thoughts and hopes that Pakistan will join the meeting. It is not a meeting organised by or about NATO, it is about the whole future of Afghanistan. Pakistani involvement would be valuable and we strongly encourage it. We stick to the timetable that has been planned.

[Lord West of Spithead]

My Lords, while I was Minister for Security for three years, the country of gravest concern to me globally was Pakistan. Notwithstanding the huge efforts, huge sacrifices and so forth that have been made in Pakistan, does the Minister not agree that one of the greatest risks to that country is violent, extremist terrorism within and around its borders and not threats from India? The fact that India is being looked at by some people within the ISI and the army as the greatest threat has diverted its efforts.

[Lord Howell of Guildford]

The noble Lord makes an extremely good point. Pakistan has many problems but very high on the list are the terrorist threat and its borders with Afghanistan, as we all know. As to relations with India, we notice that India and Pakistan have recently been talking. We greatly welcome and encourage their dialogue, which we hope will lead to a less tense development on that side and therefore less distraction from the main aims that the noble Lord has rightly identified.

[Lord Ahmad of Wimbledon]

My Lords, accepting that Pakistan has been in the front line in the war on terror for the past 10 years, I seek our Government’s assurance that strategically, militarily and tactically on the ground Pakistan’s role will not be diminished and that it will continue to play an integrated role in the war against terror—not watching on the sidelines but being involved and engaged fully to prevent the kind of incidents that we saw recently with attacks on Pakistani forces within Pakistani sovereign territory. I join in extending condolences to the families who suffered loss as a result of that act.

[Lord Howell of Guildford]

I am sure that my noble friend’s condolences will be appreciated. These horrific things do happen, and we await an investigation of what on earth went wrong for this to have occurred. Full integration in counterterrorism is very much our purpose. As the House knows, we have counterterrorist discussions with Pakistan, although I cannot reveal the details, and we are determined to use its skills and intelligence availability in the united war against terror.

UK Border Agency: Prisoners

Thursday 1st December 2011 Lords Chamber

Question

11:22

Asked By

[Lord Avebury]

To ask Her Majesty’s Government what is their response to the recommendations by the independent Chief Inspector of the UK Border Agency on how the agency manages foreign national prisoners.

[The Minister of State, Home Office (Lord Henley)]

My Lords, this is an important report and the United Kingdom Border Agency has taken its recommendations seriously. Of the eight recommendations, four were accepted in full, three in part and only one was rejected. We have taken steps to implement and reinforce policy and procedures relating to the management of foreign national offenders. I have placed a copy of the full response in the Library.

[Lord Avebury]

My Lords, I thank my noble friend for that response, but does he not agree that the UKBA’s lukewarm response to the Chief Inspector’s recommendation that it should reduce the number of decisions that are overturned on appeal was disappointing? As the UKBA must have a good idea of the likely adverse decisions of the court in most of the one-third of appeals that it loses, is it not both perverse and costly to the public purse to continue acting on the presumption that, where the deportation threshold is met, only in exceptional cases will deportation breach Article 8? Secondly, what is the Government’s strategy for reducing the number of foreign nationals who remain in prison after their sentences have expired, mainly because of non-co-operation by the prisoner or his embassy with the process of obtaining an emergency travel document?

[Lord Henley]

My Lords, I do not accept that our response to that particular recommendation was lukewarm. We accepted it in part and we accept that there is a need to improve the quality of our decision-making. We also accept that it is necessary to increase the number of those whom we manage to deport, as and when their sentences end. The number of those who have not been deported has come down steadily over the past few years.

[Lord Hunt of Kings Heath]

My Lords, is not the reason for the potentially muted response of the UKBA and the Government to this report because the core conclusion is that the quality of decision-making needs to be improved? The UKBA is faced with a 20 per cent cut in its budget and major new responsibilities. No wonder the Border Agency does not have that much confidence in improving the quality of the work that it is doing.

[Lord Henley]

My Lords, the UK Border Agency has confidence that it can improve these things and that it can do this within the perfectly manageable reductions that it is facing as a result of, as we have said on a number of occasions, the actions of the party opposite when in government. The agency will be able to improve its decision-making and it accepts that it needs to improve its quality.

[Lord Ramsbotham]

My Lords, the executive summary to this report mentions that,

“By January 2011, over 1,600 foreign national prisoners were detained under immigration powers at the end of their custodial sentence, pending deportation”.

I remember that, as Chief Inspector of Prisons in 1999, I recommended that the default position should be that prisoners sentenced to deportation should have that deportation processed while they were in prison, so that at the end of the sentence they went straight to the airport and out. Why were more than 1,600 still detained after the end of their custodial sentence?

[Lord Henley]

My Lords, there are frequently problems dealing with the country that the individual prisoner is going to and arranging travel documents. I remember the recommendations made by the noble Lord and that is something that we shall have to address in due course. Obviously, the best way of dealing with that would be to start the process somewhat earlier.

Riots Communities and Victims Panel

Thursday 1st December 2011 Lords Chamber

Question

11:26

Asked By

[Lord McKenzie of Luton]

To ask Her Majesty’s Government what is their response to the recommendations for immediate action contained in the interim report of the Riots Communities and Victims Panel published on 28 November.

[The Minister of State, Home Office (Lord Henley)]

My Lords, we welcome the interim report from the independent Riots Communities and Victims Panel into the serious events of last summer and will study its findings carefully. There are a very large number of recommendations, which we shall consider in detail and with care.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for his reply and for his welcome of the report. Does he agree that we are indebted to the panel that produced the report and for its work so far, including that of my noble friend Lady Sherlock? The report offers many challenges to government, local authorities, community organisations and faith communities, and cites positive examples of young people who are responsible, ambitious, determined and conscientious, despite having deprived backgrounds. It also says that for many there is a common theme of people needing hopes and dreams, and that a sense of injustice, powerlessness and a lack of opportunity weighed heavily in their minds. They did not feel that they had a stake in society. Does the Minister agree that that should trouble us all? Notwithstanding difficult economic times, what assurance can he give the House on the Government’s priority in tackling these matters?

[Lord Henley]

My Lords, as the noble Lord will be aware, the report came out only on Monday this week, so it is a bit early to make a very detailed response to all the recommendations. I have had a brief chance to look at the report but I have been engaged in other business in this House for most of the week. The report addresses itself not just to the Home Office but to other government departments and, as the noble Lord quite rightly said, to a whole host of other groups all of whom will need to consider what is in it.

Further, we await a report from HM Chief Inspector of Constabulary, the Met and the police in Manchester and Merseyside. The IPCC is also conducting a report, so a great deal will have to be looked at in due course. It would be wrong to announce too early how exactly we will respond to the very many recommendations in this report.

[Lord Cotter]

My Lords, on 11 August, I asked the Government,

“to ensure that measures”—

to assist businesses in riot areas—

“are taken very speedily, with minimum red tape and bureaucracy”.—[Official Report, 11/8/11; col. 1526.]

In my Oral Question on 13 September, I asked the Business Minister to,

“continue to monitor the situation”.—[Official Report, 13/9/11; col. 617.]

On both occasions I received reassuring replies. I am shocked to learn from the report that many people have not yet had any compensation at all. Indeed, seven months after the riots in March the expectation from the report is that nearly nine out of 10 large claims and as many as half of small claims for business will not be met. It is likely that this situation will be answered—

[Noble Lords]

Too long!

[Lord Cotter]

I want to ask the Minister to ensure that we get a clear response now on behalf of business because I feel that it is inexcusable and that there is a sense of betrayal. Will the Minister give us a response quickly?

[Lord Henley]

My Lords, a number of the recommendations relate to the Riot (Damages) Act 1886, the Act that governs compensation for businesses that were affected by the events last summer. I will answer a Question on this subject in two weeks’ time. The immediate recommendations from the interim report were that there should be an extension of the deadline for the submission of claims. I can confirm that we will look at that, just as we will look at the workings of the whole of the Riot (Damages) Act in due course.

[Baroness Sherlock]

My Lords, I thank the Minister for that comment in particular. As a member of the Riots Communities and Victims Panel, I had the privilege of meeting a great number of people and was very moved and shocked by stories of loss and trauma, so I welcome the fact that the Government will look at the Act.

Two things were raised most often with us. First, we did not meet a single person who had received a payout under the Riot (Damages) Act. Has anyone had such a payment and, if not, will the Government move to overhaul the Act in some detail? Secondly, there was a sense that people in areas hit by riots felt that they had been abandoned by the police. I met some hugely brave police and PCSOs who had gone out there and risked their lives. Will the Minister comment on what the Government will do in response to make sure that police tactics are appropriate for the kind of disorder we now see? That means smart policing, not just tough policing.

[Lord Henley]

My Lords, I congratulate the noble Baroness on her contribution to this report as one of the four members of the panel. We are very grateful to her for all her work. We will review the Riot (Damages) Act. It is a fairly ancient bit of legislation and obviously needs looking at. We will also review police tactics and how they worked and we will look at the reports from the Met and other police authorities. We should also look at the areas where we had no riots because there are possibly lessons to be learnt from why there were riots in some places and not in others. There will be a great deal to consider and no doubt the noble Baroness and her panel will produce yet more for us as this was only an interim report. I look forward to that, and the Government will respond in due course.

[The Lord Bishop of Ripon and Leeds]

My Lords, one of the most heart-warming flipsides of the tragedy of the riots that comes out from the report was the way in which it brought out the best in so many people, including many young people. What can the Government do to recognise and honour those who supported communities during the riots, those who cleaned up afterwards and, indeed, those who, in many cases, prevented riots developing in the first place?

[Lord Henley]

My Lords, the right reverend Prelate is quite right to draw attention to all those who did such sterling work during and after the riots. We all owe an immense debt of gratitude to them. I think we should also learn what we can about how some communities came together and either prevented riots or cleaned up after them. Again, I believe that there are lessons to be learnt, and the Government will take note of that in due course.

[Baroness Kingsmill]

My Lords, in the light of the Minister’s remarks on the riots and in the light of his obvious condemnation of the violence that was incurred by them, will he also add his voice to those condemning the remarks of Mr Jeremy Clarkson last night that strikers should be put up against a wall and shot in front of their families?

[Lord Henley]

My Lords, I am not, fortunately, responsible for the remarks of Mr Jeremy Clarkson and do not have to answer for him, but I think the noble Baroness can imagine what I think about his remarks.

[Lord Elystan-Morgan]

My Lords, will the Minister assure the House that in looking at the operation of the 1886 Act, consideration will be given not only to extending the time limit for a claim, which I think is a few weeks, but to the whole ethos of the Act: that is, the question of claiming against police authorities and the fact that the Act goes back a century and a quarter to a period when policing was much more formative in its development than it is nowadays?

[Lord Henley]

The noble Lord is right to draw attention, as I did earlier, to the age of the Act. It is possibly coming up to its sell-by or use-by date, which is one of the reasons why we want to review it. The recommendation in the report was that the submission of claims should be extended to 90 days. The Government had already extended it from 14 to 28 days. Extending it to 90 days is a very interesting suggestion and will be looked at as part of a wider review of the whole Act.

[Baroness Symons of Vernham Dean]

My Lords, will the Minister answer the specific question raised by my noble friend Lady Sherlock? Have any compensation payments been made so far?

[Lord Henley]

My Lords, I apologise for not answering that part of the question. My understanding is that some payments have been made but I confess that the number is very few. We would like to see more paid in due course, although we want to make sure that the right claims are paid. There have, in some areas, been rather a large number of claims and one suspects that not all of them are quite as valid as others.

Caravan Sites Bill [HL]

Thursday 1st December 2011 Lords Chamber

First Reading

11:36

A Bill to make provision to secure the establishment of caravan sites by local authorities in England for the use of Gypsies and Travellers

The Bill was introduced by Lord Avebury, read a first time and ordered to be printed.

Business of the House

Thursday 1st December 2011 Lords Chamber

Timing of Debates

11:36

Moved By

[Lord Strathclyde]

That the debates on the Motions in the names of Baroness Emerton and the Earl of Sandwich set down for today shall each be limited to two and a half hours.

Motion agreed.

Procedure of the House Committee

Thursday 1st December 2011 Lords Chamber

Membership Motion

11:37

Moved By

[The Chairman of Committees]

To move that Lord Campbell-Savours be appointed a member of the Select Committee in place of Lord Goldsmith.

Motion agreed.

Nursing

Thursday 1st December 2011 Lords Chamber

Debate

11:37

Moved By

[Baroness Emerton]

That this House takes note of front-line nursing care.

[Baroness Emerton]

My Lords, I welcome the opportunity to introduce this debate to take note of first-line nursing care. The timing of this debate is opportune for several reasons, not least that the Health and Social Care Bill is currently in Committee, giving an opportunity for amendments to the Bill that are considered helpful to the implementation of the proposed Health and Social Care Act.

The professions of nursing, midwifery and health visiting—the largest single workforce in the NHS—plays an important part in delivering high-quality care to patients. The NHS is currently facing the Nicholson challenge of saving £20 billion within the next three years, not avoiding cuts in service provision. The scene is therefore one of challenge: meeting the forthcoming organisational changes while maintaining and developing new approaches to the delivery of high-quality care. That inevitably causes a mixture of anxiety and excitement: anxiety for job prospects, but excitement at the opportunities opening to the profession by moving to an all-graduate profession and by meeting the patient’s needs holistically, with integrated patient pathways through primary, secondary and tertiary care, then back to primary care and care in the community, where the patient can be cared for in their home and supported by the NHS and social care with as much independence as possible for the individual and closeness to their family.

Where do the professions of nursing, midwifery and health visiting want to see themselves in the newly reorganised health and social care services so that they can deliver the high-quality care required and innovate in developing the new procedures that will result from research evidence, which will in turn result in best practice and be cost-effective? I declare my background in nursing. I am retired and not on the effective register of the NMC. I am a fellow of the Royal College of Nursing and president of the Florence Nightingale Foundation.

I should like to address concerns that have been raised in recent months about the move to degree-level registration for nurses. As my fellow commissioners set out in the report Front Line Care, degree programmes equip nurses and midwives to work in many settings and roles and draw on a wider repertoire of knowledge and skills, including the capacity to make complex assessments and clinical decisions and deliver therapeutic interventions in situations that are often unpredictable and emotionally charged. I would emphasise that these skills include effective communication skills and, in particular, how to provide care in a compassionate way. Any nurse practising in the 21st century care setting must have all these skills. We must also remember that 50 percent of university-based education programmes, at both degree and sub-degree level, continue to be delivered in practice. In moving to a degree-level profession we are following what is already in position in Wales, Scotland, several countries in Europe and elsewhere, as well as in professions such as midwifery and physiotherapy. Recent changes to pre-registration nurse education, as set out in the Nursing and Midwifery Council standards, will equip nurses to lead and deliver care and will ensure that nurses of the future are equipped to work within a modern healthcare system, while ensuring that care continues to be delivered with compassion.

It is vital that the focus is not just on what education and training nurses and midwives should receive in their pre-registration courses. Equally important are the development of post-qualification training pathways for nursing, which are sadly not funded in the same way as our medical counterparts. The funding exists in the current education and training budget to fund junior doctors’ salaries and postgraduate placements to training. We wish to see this extended to nurses and midwives so that they can continue to improve and develop throughout their careers and in particular, in the early years after registration. I would be very grateful if the Minister could confirm if the forthcoming publication of education and training will address the lack of central funding for post-qualification pathways for nursing, midwifery and health visiting.

The Royal College of Nursing, the Royal College of Midwives and the Queen’s Nursing Institute have all recently published reports reflecting the staffing levels currently being experienced and the urgent need to address the whole issue of workforce planning, taking into account the recommendations in the current Bill. The increase in community care is going to require an increase in community nurses—that is, district nurses—to meet the nursing care needs of those transferred from secondary care following admission to hospital, those suffering from long-term conditions, the treatment of the elderly, frail and vulnerable who require care and support to live independently, and not forgetting those who choose, in increasing numbers, to have end-of-life care at home.

These demands from the community will require highly qualified nurses facing a very different setting, with support and mentoring to adjust if moving from secondary care into the community setting. This means that the workforce planning for the forthcoming changes in the community will need to include the training requirements, not only the professional qualifications, for an induction into health and social care spanning NHS and local government management systems, and third sector involvement in health and social care. The specialist nurses for long-term care, for example Parkinson’s, multiple sclerosis and cancer care, play an important part in maintaining the patient to stay in the community and will form part of the community team that supports these patients. The increase in demand on the mental health service will need community psychiatric nurses, not forgetting those with learning difficulties.

Working in the community places different demands on the community nurses than those working in secondary care and there is much to be learnt in regard to working with social services and voluntary organisations, and not least the families, carers and neighbours of those for whom they care.

Research evidence from the United States, Canada, Australia and here in the UK clearly demonstrates that a higher ratio of registered nurses to support workers results in lower mortality and morbidity. It shows that 26 per cent of patients are more likely to die where nurses have the heaviest work load and 29 per cent are more likely to die after a complicated hospital stay. Seventy-two per cent of nurses with the heaviest workload showed negative job outcomes, burnout and job dissatisfaction and saw their hospitals’ care standards deteriorating.

Aiken’s study in the US demonstrated that every one patient added to the average, hospital-wide nurse workload increased the risk of death following common surgical procedures by 7 per cent. The UK evidence was recorded in 2007 by Anne Marie Rafferty. I ask that this research evidence be studied by the Government and that a cost-benefit analysis be worked on to see whether workforce numbers could be refined to take account of these findings in order not only to reduce morbidity and mortality but also to shorten length of stays, improve clinical outcomes and reduce infection, readmission rates and possibly the number of hospital beds. It should be recognised that community staff should be trained and in post in order to receive the increased workload.

Any reorganisation of services requires an in-depth analysis of the effects that the changes are going to cause and the means of solving the identified issues. As the nursing and midwifery professions and health visitors form the largest single part of the NHS workforce and play a vital part in delivering high-quality, safe care with compassion, respect and dignity, the implementation programme requires leadership from the profession nationally and at CCG level, as well as at the point of delivery of care, from ward sisters in secondary care and from nurse and midwife leaders in the community.

Nursing could best be described as the art and science of delivering high-quality, evidence-based care. The history of nursing demonstrates that nurse leaders effected changes in the development of the profession by exercising their powers of leadership through influence and persuasion, a leadership exemplar being Florence Nightingale, who influenced practice, education, research and public health and through evidence presented to politicians. Mrs Bedford Fenwick introduced the nursing register and regulation in 1919 after attempting to have six Private Member’s Bills passed in Parliament and 30 years’ struggle. Other examples are the Salmon report, which many nurse leaders influenced, as they did with Halsbury, Platt, Briggs and the royal commission that led to the nurses and midwives Act 1979, the establishment of the UKCC and national boards and education moving into universities. Again, a time span of nearly 25 years was involved.

The involvement of politicians has been central to the implementation of these changes. One could describe politics as the science of government. Nurses, midwives and health visitors need to exercise their leadership skills by influencing and persuading government with evidence that will lead to changes in the profession, leading to higher-quality, evidence-based, safe and cost-effective care to the satisfaction of patients, relatives and the public. However, while it is recognised that implementation of research-based change takes time, can we wait 30 years to see a reduction in morbidity and mortality rates among patients?

Given the current economic situation and the recent negative reports on care delivery, there is a very important task to be achieved in regaining the public’s and patients’ confidence in the profession. There is no doubt that we have excellent nurses and midwives throughout the country, but sometimes there are failures, usually due to a systems failure in the organisation. It is therefore important that the status of the professions is raised in the eyes of the public and patients. This can be done only by addressing the professional issues as well as the organisational team, starting with the board, providing them with clear sets of values and objectives to which the whole organisation is committed, with clear lines of accountability and authority.

My passion is to see nursing care of world-class standard, but as well as attacking the issues within the profession there is the overriding need to address the culture within the NHS so that all professions and support staff are committed to ensuring that the part they play contributes to the change in culture—that is, compassionate care with dignity and respect throughout the workforce; and staff valued, which in turn is projected to all patients, relatives and the public, restoring the view that the NHS provides excellent compassionate care with dignity and respect to all. This would override the rather negative and critical view that pervades at the present time in some places. I beg to move.

11:51

[Viscount Bridgeman]

My Lords, I thank the noble Baroness, Lady Emerton, for her expert and sensitive treatment of this subject. I am afraid what follows now will be a slightly inadequate summary of what she began by saying and reverted to later in her speech—that is, the fundamental challenge to the training of nurses in the United Kingdom. As she reminded us, the trend over the past 10 years towards the requirement that nurses should be educated to degree standard is a desirable objective in itself. It makes nurses better equipped to address the ever increasing sophistication, both in treatment techniques and in equipment, and crucially it gives student nurses who are so motivated the chance to aspire to management positions within healthcare.

The downside of this, to which the noble Baroness has referred, is that during this period of nurse training a decreasing amount of time is spent on the ward with hands-on experience of dealing with patients. This is compounded by the fact that there is not the same opportunity for the junior nurse to learn from the ward sister—who I suppose one must now refer to as the ward manager—who can pass on his or her experience. These individuals so often find that the nursing teaching posts are more attractive than hands-on nursing and it is to these that many of them move. This is a problem which is not going to go away; frankly I see no immediate solution and I should welcome comforting words from the Minister.

I have some recent experience of the healthcare sector as a former chairman of an independent hospital in London, the Hospital of St John and St Elizabeth. On the whole, the independent hospitals have been able to retain the traditional system of the matron having total responsibility for the nursing staff, with the ward sister or manager looking after patients on the ward and, crucially, having responsibility for services such as cleaning. It would be both arrogant and unrealistic, coming from the independent angle, to say “If we can do it so can you”. There are so many differences between the environments of the National Health Service and the independent sector that it makes such a glib suggestion inappropriate, not least the organisational demands which a body the size of the National Health Service faces. Furthermore, on a personal note, I wish to place on record the great help and support the hospital with which I was associated receives from the NHS in many, many ways. There should be no misunderstanding about this—I am not referring to financial help. However, it is important that the two sectors have regard for each other, possibly to their mutual benefit.

Let me recount one experience I had which I think may be relevant to this debate. While the independent sector struggles to attract good nursing staff as much as the NHS, most are fortunate in having a satisfactory body of trained nursing staff. However, many of these hospitals, including my own, also operate a programme of giving work experience to trainee nurses in the NHS. Ours formerly involved an arrangement with one newish university in the London area. On more than one occasion, Matron was somewhat startled to come across the attitude “I am not interested in the nursing, I am only here to get something on my CV”. Subsequently—and understandably— the change was made to sourcing from one of the London teaching hospitals where we encountered a totally different type of student nurse—keen and committed, potentially a credit to the nursing profession.

The wastage of resources in the nursing training programmes of some institutions is self-evident and I would welcome an assurance from the Minister that his colleagues in the DoH are monitoring this, and particularly the suitability of candidates for these training schemes. My message to your Lordships—and, indeed, the Minister—is that I see no easy, quick-fix solution to the present less-than-perfect juxtaposition between academia and ward experience.

In conclusion, perhaps I may return briefly to the subject of ward cleaning. Many are the complaints one hears that the ward was dirty and that the ward manager was unable to do anything about it because he or she was not in the reporting line for the contractor. I hope that arrangements can be made in future contracts for the contractor to be more visibly responsible to the ward manager. That would go some way towards allaying this problem, which seems too dependent on considerations of cost.

11:55

[Baroness Warwick of Undercliffe]

My Lords, I thank the noble Baroness, Lady Emerton, for providing this opportunity to highlight this crucial aspect of our national healthcare provision. Her distinguished leadership and experience in the nursing field give enormous weight to her observations today. She is a doughty advocate for the nursing profession.

There cannot be anyone in this House who has not at one time or another had cause to be grateful for excellent nursing care. However, we may also know of, or have experienced, less than compassionate care, or even neglect or indifference, from overstretched nursing staff. Like others, I am horrified by some of the stories that have appeared in the media, and we cannot ignore the shocking failings uncovered, for example, at the Mid-Staffordshire NHS Trust. Sadly, it would be wrong to suggest that the unfortunate cases that hit the headlines are entirely anomalous or isolated incidents. Indeed, it seems that not a week goes by without another story revealing a lack of care and compassion and arguing that standards are falling.

Some of those who claim this most vociferously blame the lack of compassion on the move to make nursing a degree-level profession. Like the noble Viscount, Lord Bridgeman, I want to focus my remarks on the area of nurse education. I want to challenge most strongly the line put forward in the media—and, indeed, on occasion in this House—that some of the recent instances of lack of care are because nurses are now all graduates and consider it beneath them to clean bedpans or clean after the vulnerable and sick in their care. The “too posh to wash” arguments favoured by newspaper columnists do not stand up.

Studies in England, Scotland and Northern Ireland have shown that graduate nurses spend longer hours working in clinical areas than their non-graduate counterparts. American studies have found that graduate nurses stay in the profession, on average, four years longer than non-graduates and, in addition, they tend to stay at the bedside more often, working with older people and those who are terminally ill. US research—it is a shame to quote only US research but there is very little research in this country on this area—has also noted that graduate nurses acted more independently and took more responsibility for their professional judgment.

The point I wish to make is that there is not, and should not be, a distinction between professional academic head on the one hand, and caring heart on the other. As the excellent report, Front Line Care, asserted last year:

“Truly compassionate care is skilled, competent, value-based care that respects individual dignity. Its delivery requires the highest levels of skill and professionalism”.

The core values of care and compassion do not change even as nursing becomes more demanding and complex. The challenges that nurses face today require higher degrees of skill and a more well-rounded preparation. Indeed, Front Line Care urges:

“To ensure high quality, compassionate care, the move to degree-level registration for all newly qualified nurses must be implemented in full … There must be greater investment in continuing professional development.”

I strongly support this position and I hope that the Minister, in replying, will confirm that the Government do too. Nurses practise in increasingly complex clinical and social environments.

The decision in 2009 that all new nurses must hold a degree-level qualification to enter the profession from 2013, was made with the aim of increasing skills, and training a medical workforce capable of operating in a more analytical and independent manner. I believe that making nursing a degree-level profession is the way to ensure high-quality front-line patient care. Currently, one in four nurses has a degree as their highest qualification, and I believe this must grow. As the noble Baroness, Lady Emerton, reminded us, this would merely enable us to catch up with Wales and Scotland and several countries in Europe and elsewhere—indeed, as well as with other professions.

I believe that it is a mistake to view being academically qualified and being a caring professional as somehow incongruous. This is not assumed in medicine or clinical psychology, so why should it be in nursing? Compassion is vital, but it is not enough; nurses must also be well educated to deliver safe, effective care. All nurses need to put quality care at the centre of what they do, but they also need extensive knowledge, analytical skills and experience to work in a variety of settings.

I know that universities strive to ensure that students entering the profession have the right blend of personal, caring attitudes along with the necessary knowledge and practical skills to deliver high-quality, evidenced-based nursing care for patients. This is why, as the noble Baroness reminded us, half of university-based education programmes at both degree and sub-degree level continue to be delivered on the ground, in health practice. Of course, there can always be improvements, and I know that universities and hospitals themselves are striving to make those improvements. But education and training must not stop at the point of registration. It must continue to consider post-qualification pathways for recently registered nurses, and recognise the importance of both multi-professional training and continued professional development.

Many noble Lords have raised the importance of education and training in a reformed NHS as the Health and Social Care Bill goes through Committee, and we have been reassured that the Government will give this area due weight and consideration on Report. Will the Minister reassure us today that, in its plans in the Bill for ensuring the continuation of appropriate education and training across the health professions, and developing a well educated and compassionate workforce, the new system will ensure continued professional development?

My final point is to echo some of the points made by the noble Baroness, Lady Emerton, that front-line nursing care is being severely threatened by the £20 billion efficiency savings target set by the NHS. The Royal College of Nursing's Frontline First campaign has been monitoring cuts in NHS services and posts since July 2010. Its analysis of 41 trusts in England has highlighted the fact that registered nurses and healthcare assistants account for 34 per cent of the posts earmarked to be cut. On average across the 41 trusts, 8.3 per cent of qualified nursing jobs appear to be lost. The RCN cites these findings as evidence that trusts in England are making short-term cuts to meet the efficiency savings target. So, despite Government promises that there would be no cuts to front-line NHS care, clinical services and staffing levels are indeed being severely affected. At the same time, we know that English SHAs are cutting the number of pre-registration nursing places they fund. Last week, it was reported that nursing courses in London would be reduced from 2,000 to 1,580 after NHS London decided to withdraw funding. Estimates earlier this year suggested that course places in England for 2011-12 would be cut by 9.4 per cent compared to the previous year. These cuts to existing posts and to new entrants will have potentially disastrous consequences for patient care. So it is important for the Minister to address the issues of cuts and places in his reply.

The need to provide skilled care for people with many different conditions will continue to grow; we must have sufficient nurses, and our nurses must be properly equipped and supported to provide that skilled care.

12:05

[Baroness Jolly]

My Lords, I thank the noble Baroness, Lady Emerton, for inspiring this debate. Hers is one of the most respected voices in your Lordships’ House, and when she speaks on this subject we all listen and learn. I am also delighted to see here in the Public Gallery nurses who have come to listen to the debate.

What is the front line? All but a few of the 600,000-odd nurses are working right there, delivering world-class care to their patients. Some will be in key management positions in our trusts and a few are top civil servants advising the department and strategic health authorities. They are members of clinical networks, and I hope that in the new world they will be advising the NHS boards and should be on clinical senates.

If you were to talk to a focus group of the general public and ask them to close their eyes and think of a nurse, what would they say? In all probability they would think of a woman. Depending on their age, they might put that nurse in a frilly starched cap, and almost certainly in a hospital at the sharp end of acute medicine—including theatre, A&E, intensive care and neonatal nursing—although those with recent experience of the NHS might have a more modern, nuanced view. Of course, that picture is not accurate. Many nurses are men, and in the days of infection control frilly caps have gone. This focus group might be surprised that it is a graduate profession and that there are many specialist nurses with the equivalent of masters’ degrees in their specialism. This situation is completely unrecognisable from that of 20 years ago. Let us be completely clear—here I totally agree with the noble Baroness, Lady Warwick—that, despite much red-top protestations to the contrary, all but a very few nurses do their jobs with utmost professionalism, as they fit into a multidisciplinary team based around patient care.

I shall focus my remarks today on the nurses whose front line is the local community and who work in community settings, in the home and in community hospitals. They are largely unsung but play a vital role in patient care. They give the patients what they want—personal care at home or close to home. Their role is vital in keeping patients out of the acute setting wherever possible and in taking tasks from doctors, who are thus freed up for diagnostic work. We should be in no doubt that this is not only good news for the patient but, incidentally, delivers considerable savings to the NHS.

What roles might nurses take in community care? They are involved with cancer, continence, COPD, diabetes, district and community nursing, end-of-life care, learning disability, mental health, midwifery, minor injury nursing, multiple sclerosis, older people, practice nursing, prescribing, renal, school nursing, smoking cessation, stroke and substance misuse. My list is not exhaustive, and I apologise unreservedly for any areas that I have omitted. These nurses are quietly innovative. The way that they work improves the care of their patients. They are collaborative and forge links with GPs, acute care, charitable sector providers and local authorities. They were designing informal packages of care and pathways before those terms were in common parlance. They act, while others plan and strategise.

In the history of community specialist nurses, midwives get the earliest mention in literature, in Exodus, delivering babies as the tribes of Israel fled from Egypt—if anyone can go back more than 6,000 years, I am happy to hear of it. This is a far cry from the world that my noble friend Lady Cumberlege spoke about on Monday in Committee on the Health and Social Care Bill. I should like to highlight two areas of outstanding care. Your Lordships will know that I worked for Macmillan Cancer Support, and I should like to explain its work in the community, and the role of minor injury nurses.

Last Sunday, I attended a service in Exeter cathedral to celebrate 100 years of Macmillan Cancer Support, which was established by Douglas Macmillan in response to his father’s death from cancer. There are now thousands of Macmillan-trained nurses in the community, offering services such as chemotherapy at home, wherever possible, and helping the whole family deal with end of life, where necessary. At present, only a quarter of patients are able to die in their own beds, and 24/7 community nursing is critical to helping cancer patients die at home. These front-line nurses prevent crisis situations from occurring, so that patients are not transferred into hospital and hence reduce costs to the NHS in the longer term. However, half of PCTs are not providing this vital service. The palliative care funding review recognised that a relatively small investment in 24/7 community services would enable commissioners to deliver improved outcomes for patients and ensure that palliative and end-of-life care services are delivered in the most cost-effective way. The new draft end-of-life care quality standard also supports the need for 24/7 community nursing, and Macmillan would like to see the standard implemented effectively and as quickly as possible. Macmillan is also supporting those living beyond cancer. Macmillan nurses help families link into specialist benefits advisers—either Macmillan's own or those trained by Macmillan and now working in CABs across the country—who work through and around the system for the patient and their carers. That is true personalisation.

On minor injury nurses, every week millions of people go to A&E or their own doctor for conditions that are minor—neither an accident nor an emergency. They go because A&E is easily accessible, but they waste the time of trauma teams. Two highly skilled specialist nurses in a community hospital or within an A&E department can run a minor injuries unit. They have access to advice from the A&E department as and when required. These units are able to treat a range of conditions: cuts, bruises, burns, simple fractures —even broken bones, as long as the skin has not been broken and the bone does not stick through—as well as sprains, strains and head injuries. Saturday afternoons see them full of sportsmen and women. In one year in Cornwall, 900,000 patients attended a Cornish minor injury unit. This prevented nearly 1 million attendances at A&E. By anyone's reckoning, that is an impressive record. If we visit their websites, praise for their service is fulsome. Holiday-makers visiting Cornwall, in Newquay, St Ives or Bude, leave messages on the websites to say how impressed they are by the services and asking why they are not offered locally.

I would like to move on to two general points about specialist nursing. Changes to the workforce need to be patient-centred and must not be undertaken simply as a cost-cutting exercise. There is anecdotal evidence that, in some cases, services are downgrading roles simply to save money without analysing the needs of patients. Changes to the workforce need to be thought out and patient-centred, mapping needs against skills. Macmillan is looking at how cancer patients can be given one-to-one support by a team of different professionals so that they receive support from the right person at the right time. In particular, Macmillan is looking at how support workers can be used to release capacity for specialists so that they can concentrate on tasks that make best use of and develop their skills, thereby improving the productivity and efficiency of teams.

I would like to echo remarks made by the noble Baroness, Lady Emerton, the noble Viscount, Lord Bridgeman, and the noble Baroness, Lady Warwick. I suspect that the speakers who follow might agree, although I dare not anticipate your Lordships’ speeches. Education and training must be protected if we are to ensure a high-quality future nursing workforce. I am extremely concerned that under the current financial constraints, education and training budgets are being cut. In addition, there is not the capacity or funding to free up professionals to attend such training. Neglecting the continued education of professionals hampers their ability to advance their knowledge to meet the new and emerging needs of patients and threatens the future supply of specialist nurses. I would welcome assurance from the Minister on this subject.

This has been a very interesting and important debate. Its timing within the Committee stage of the Health and Social Care Bill is really useful. We must do all we can to advance the nursing profession and in particular those specialist nurses who add so much to patient care.

12:15

[Baroness Masham of Ilton]

My Lords, I thank my noble friend Lady Emerton for securing this debate on front-line nursing care. Whatever health Bill comes before us as new legislation, nothing will improve unless caring, compassion and dedication are put back into nursing. There is a lack of leadership and the lack of anyone taking responsibility on some wards, which are understaffed and badly managed. If there was a referendum on whether to bring back the old-type matron, who was in charge of nursing within the whole hospital and sisters who were hands-on and in charge of their wards—and the cleaning and helping of patients with their problems and discharge—wards would be better run.

Many of the tiers of nursing administration should be dropped; I am sure that the public would agree overwhelmingly. It is leadership and responsibility that is needed with front-line nurses. There is no doubt that hospitals are challenging places to run and that good administrators are vital but, again, there should not be overload and they should not be in conflict with clinical staff. The safety and well-being of patients should be the priority, and working in harmony is surely better. A consultant told me the other day that she had gone to the ward to see a patient and asked a nurse for the notes. The nurse retorted that the patient's nurse was not there that day, so I ask: was no one looking after her? This attitude is so unhelpful and the culture needs changing.

The other day, I was telephoned by a very popular GP who retired last year but still trains doctors. He told me that one of his trainees had a very rare condition that needed a life-saving operation, but the funding was not forthcoming. It is becoming a desperate situation. Knowing that his wife nursed part time in the local hospital, I asked how she was. The answer came back that she had become so concerned about patient care and nurses going off sick that she had not been sleeping at night, and had worried so much that she has now left. This nurse was Guy’s trained and could not go along with the lack of staff and poor standards. It was one of the good days for patients when she was on duty. A culture of indifference to patients seems to have crept in with many nurses.

Having said that, I know that there are some excellent nurses and, for anyone who appreciates good nursing, they shine like bright stars. This being World Aids Day, there will be a debate on HIV and AIDS later today, and I have been so pleased to meet some very dedicated and kind nurses working on wards with AIDS patients. Perhaps this is because they have chosen this specialty and it is more than just a job. This is also the centenary year of Macmillan nursing—many congratulations to that splendid organisation, which has about 5,000 specialist nurses throughout the country, helping and advising people with cancer, while volunteers raise money by all sorts of ways. For many long-term conditions, specialist nurses are vital for illnesses such as diabetes, Parkinson’s disease, stroke, epilepsy and so many other conditions. They teach patients and carers, help patients from getting worse and keep them out of hospital. They are the vital link between primary and secondary care.

Most importantly, however, there are cuts to nurses, including those qualified in specialised neonatal care, and this cannot go on. There is a serious situation at the moment because the £20 billion Nicholson efficiency savings are causing cuts in important front-line nursing staff. For example, when nurses retire they are not being replaced. It has been brought to my attention that there is considerable anecdotal evidence that demonstrates how the district nursing service has been stretched to the point that it is providing a bare minimum service in many areas. District nurses are vital if patients who need nursing care in the community are to manage. The importance of district nurses should be recognised. Skills needed for nursing in the home are different from other forms of primary care nursing. I hope that the Minister will look into what is happening across the country.

With all the recent reports about the lack of care for the frail and elderly, and the horrific evidence shown in the “Panorama” programme of cruelty to people with learning difficulties in a care home, it seems that care assistants should be registered and regulated. I am among many people who feel that it is of great concern that nurses can be struck off their register and take unregistered jobs as care assistants. Patients are being put at risk, as it is unrealistic to think that the few nurses on a busy ward can supervise both care assistants and student nurses when there are vital jobs that only the nurse can do behind closed curtains. There should be training for all care assistants. They are often dressed up in uniforms which are indistinguishable from trained nurses, which is not open and honest to patients.

On a positive note, I would like to say what an excellent job nurses do in front-line nursing in Afghanistan. There seems to be real team co-operation while working under stressful conditions.

Prevention of infection has become more important than ever, given the increasing resistance to antibiotics. I would like your Lordships to realise the importance of infection control nurses working on the front line. There is much concern about moving the Health Protection Agency, which is vital in the fight against infections. Any dilution of its independence and ability to research will have an effect on front-line nurses in the long run. There are many infections, such as gram-negative bacteria, klebsiella and E. coli that affect urinary infections as well as PVL-SA—Panton-Valentine leukocidin positive staphylococcus aureus—which is an infection that can affect young, healthy people, causing necrotising pneumonia and can kill in a few days. There have been improvements in MRSA and C. difficile in hospitals, but controlling infections needs constant attention to detail. We should never get complacent.

I have great admiration for the front-line nurses who go out and find homeless and hard-to-reach people at risk of tuberculosis and work in prisons with a multitude of infections, including hepatitis B and C. Drug-resistant TB must be kept under control. These resistant infections, which are expensive and hard to treat, can be passed to anyone. Without doubt, front-line nurses are vital for our well-being and that of our children. They vaccinate the population and so often are the first people to stop a killer infection such as meningitis in an A&E department.

I hope that this debate will help to show our appreciation for front-line nurses, who need to have the highest standards to keep the NHS on top of the job.

12:25

[Lord Hunt of Kings Heath]

My Lords, in thanking the noble Baroness, Lady Emerton, for her splendid opening to our debate, I declare an interest as chair of the Heart of England NHS Trust and as a consultant and trainer for Cumberlege Connections. I also acknowledge my noble friend Lord MacKenzie on the Front Bench. I suspect that what he does not know about nursing is not worth knowing; it is very good to see him there.

This is a very timely debate. We all agree that the quality of nursing care is fundamental to the quality of the patient experience. However, we are presented with a paradox. On the one hand there have been huge advances in the nursing profession over the past 20 years. There has been the move to it being a graduate profession. Nurses have taken on much greater responsibility. There is complex care and specialist nurses, in both hospital and the community, as the noble Baroness, Lady Jolly, so vividly informed us. I think also of midwifery. If the noble Baroness, Lady Cumberlege, were here, she would be able to talk about changing childbirth and how the profession was encouraged to take on a huge leadership role. The public have welcomed the increased responsibility that nurses have taken on.

At the same time there has been a mounting concern about basic standards of care and issues to do with hygiene, the feeding of patients, nutrition, dignity and even face-to face contact. This has been reinforced by several reports from unannounced visits and the CQC over the past few years. There have been any number of investigations of concerns about what seems to be a falling off in basic values of care. What is the reason for that? My noble friend Lady Warwick convincingly demonstrated that the old canard about modern nurses being “too posh to wash” just does not stack up. However, there are a number of questions that one might ask. There is a real question about whether nurse training is too focused on academic performance rather than on practical nurse training.

I also wonder whether the drive for specialist nurses and modern matrons has removed too many experienced nurses from the ward or the equivalent within the community. Has the lack of regulation for healthcare assistants led to patchy and inadequate care in some places, despite the undoubted dedication of many of them? We need some serious thinking about how to enhance quality overall and the standards of basic care that nurses give. Certainly, in my own trust a lot of thinking has gone into the quality of nurses. I claim no credit for it. While we do not have matrons in starched caps, we certainly have visible chief nurses in purple uniforms walking the wards as a visible demonstration of nurse leadership, which has been warmly welcomed. Anyone who wants to see nurses really dressed up should go to the Florence Nightingale service in Westminster Abbey once a year. I always hope that the chief nursing officer will come in uniform—alas not. To see the chief nurses of the Army, Navy and Air Force marching up the aisle is a wonder to behold. The reason why the public like to see it is that they want to see nurses in authority. They want them to have the confidence to be leaders in the ward, in the community and in the health service as a whole.

Another thing that we have done is to develop a robust measurement of nurse standards by polling 400 patients a month, looking at the results, reporting to the board and trying to identify any problems with nursing care. The third thing that we have done is to develop VITAL—virtual interactive teaching and learning. Essentially, it assesses all nurses online for their knowledge of best practice in fundamental care. This covers, for example, nutrition, falls, privacy and dignity and pain management. Since the summer, 60 per cent of our trust’s workforce have achieved 100 per cent in that online examination. Our intention is that from next year all newly qualified nurses and midwives will have to achieve 100 per cent within six months or they will not get the substantive contract. We also expect our nurses and midwives to sign up to a code of values and behaviour. We are introducing a badge for our nurses which will be achieved only if they get 100 per cent in the online test, sign up to our values and have evidence that they are putting those values into action. The noble Baroness, Lady Emerton, will certainly remember the badge, which nurses wore with pride. It showed where they came from and who they were; for example, the Tommy’s nurses. We need to get some of that ethos back into the health service.

We have done a lot but there are a lot of issues around the training and education of nurses. I do not disagree with the requirement for nurses to have a degree. I do not think there is any argument about that. However, we have thought about how a foundation trust could be much more involved in nurse education and in supporting students in practical nurse training. We wanted to facilitate a practice-based model built around the trust which promoted our core values but adhered to national standards and the curriculum as laid down by the Nursing and Midwifery Council and with appropriate academic accreditation. It is fair to say that our proposal has not met with universal acclaim. Indeed, I feel that all the establishment bodies concerned with nurse training and education have put a real dampener on this. We have been accused of turning the clock back to the old schools of nursing. That is a bit unfair to some of the old schools of nursing because they were pretty good. However, we are not trying to do that. We seek to facilitate a more practical-based nurse education degree, which would have degree status but would be built much more around the hospital and its values. I do not think that this discussion is at an end. I believe that we will soon have a new chief nursing officer to follow on the excellent current CNO Christine Beasley, if one has not yet been appointed. This must be one of the main focuses of the new chief nursing officer. What could be more important than sorting out the education and training of nurses?

The noble Viscount, Lord Bridgeman, and the noble Baronesses, Lady Jolly and Lady Masham, were right about the role of senior sisters, or their equivalent, in the community. We need to empower them to lead. That means they have to have control of the budget so that whoever is providing the cleaning or the food, whether it is directly employed people or contract cleaners, none the less when the senior sister wants something to happen there is no question but that it happens. We need to give our senior sisters much more confidence and support to take on a leadership role. We need to go back to the days when doctors were a bit scared of the senior sister because she is in charge and she is the person on whom the patients depend for the overall quality of care. Making our senior sisters supernumerary so that they can focus entirely on leadership and management will cost us £1.6 million. It is a challenge to find the resource to allow them to focus much more on leadership. The problem with being drawn back into being counted as one of the qualified nurses on wards is that they then get so focused on caring for patients that they just do not have the time to carry out the leadership role that is required.

I urge the noble Earl to take account of two further points. My noble friend Lady Warwick talked about the lack of UK research in relation to basic nursing standards. The noble Earl will not be surprised to hear that there is an issue with regard to the amount of money spent on research into nursing. I know of the efforts made by the department over the years to give a boost to the amount of money spent on research in relation to nursing but clearly we need to go somewhat further in that regard. We probably need to have more academics who can focus on research.

With regard to healthcare assistant regulation, the Government’s response is to have a voluntary register. I suspect that there will be a halfway house and that it will not be long before some NHS organisations will say, “You can’t be a healthcare assistant with us unless you register voluntarily”. I hope that training programmes will be set up but, for the reasons that the noble Baroness, Lady Masham, has given in terms of safeguarding the public, the argument for regulation is becoming ever more persuasive.

I hope the noble Earl recognises that the number of nurse training places should be determined by Ministers. If he devolves that issue, he will find that in times of financial difficulty the number of training places will be cut. I would give much more discretion to the NHS locally to determine arrangements with universities regarding the provision of graduate education for nurses. However, history tells us that the moment the department relinquishes control of the number of training places, the health service does the wrong thing. I know that we are debating the tension between national leadership and local discretion, but national leadership is required in some areas, and this is one of them.

12:36

[Baroness Browning]

My Lords, it is a great pleasure to follow the noble Lord, Lord Hunt of Kings Heath, with whom I have debated many issues in this Chamber.

I agreed with every single word that he said in this debate. I stand in awe of what he has done in his trust. He recounted the list of things that had been implemented, not all of which seemed to need an awful lot of money, although I understand what he said about education and training. You wonder why such practice cannot be rolled out around the country and why exemplars cannot be picked up rather than having trusts that try to reinvent the wheel, struggle or in some cases attract rather adverse headlines, as we have seen in recent years.

I had the great privilege to serve as a Member of Parliament for 18 years in another place. During that time I had the pleasure of working with and for nurses and midwives in my constituency, many of whom came to see me to discuss the problems that they encountered in their work. Sometimes they came individually and sometimes collectively. I pay tribute to the work that the profession does. There are people out there who go that extra mile. As patients or relatives of patients, we should all be extremely grateful to them for that. I know that I am.

However, as has been mentioned by other speakers, healthcare, which includes the nursing profession, has been the subject of some very worrying and adverse headlines, not just in recent weeks but for a long time. Some eight years ago in a debate in another place I raised concerns about nutrition and fluid intakes based on my personal experience of having an elderly relative in a hospital. It seems to me that these things have gone on for a very long time. Mencap still has concerns in this regard. Three years ago it published a report, Death by Indifference, which discussed people with learning disabilities who had died on hospital wards not through disease but through neglect. That is an indictment of us as politicians and of our nation. Members of the nursing profession and others involved in healthcare must feel that very keenly when they see and read about what is happening.

As I listened to the noble Lord, Lord Hunt of Kings Heath, I wondered how hard it would be to make best practice universal if there was a political will and a professional will in all parts of healthcare to look at what works and to implement best practice. I realise that budgets come into these things and that there are always differing opinions on how to do things. However, we are starting to see some common themes coming through, not least in the report Front Line Care, which the noble Baroness discussed. There is a common theme in this report. There is great confusion in the healthcare system, particularly in hospitals, and we as patients are also confused. It is quite possible to go into a general hospital ward and come away still not really knowing who was in charge. It is the uniforms, it is the way people conduct themselves. It is not that people are not doing their job, but you cannot always say who is in charge.

The heading on page 60 of the report says, “The Proliferation of Roles and Titles”, and I would add uniforms to that. At one time I thought I understood all the uniforms on a ward, but I have to say that I do not now. Having been in hospital this year, all I can say is that the lady in the pale blue uniform did a jolly good job for me, but I still do not know what her job title was. The report says:

“especially doctors … were often unclear about what skills and competencies they could expect from individual nurses and support workers, exacerbated by the plethora of job titles and role descriptions”.

It is bad enough that I as a patient was confused, but the fact that doctors are also confused tells us that something needs to be sorted out, and urgently.

Much more seriously, if doctors do not know what they can expect from these different job titles and uniforms, and if the nurses themselves have to delegate—I will come on to delegation in a moment—it is no wonder that there are problems and that some of them become systemic. I say to my noble friend, for whom I have great respect for the work he does on the Front Bench, that these problems are now systemic and need to be treated as a matter of urgency.

Frankly, we do not need another five years of reports and anecdotal evidence. It seems pretty obvious that some people are now overcoming these problems—the noble Lord, Lord Hunt, explained what happens in his trust—and this could now be rolled out. While I understand the need for localism and local decision-making, the Government have to take some leadership in making sure that this is rolled out and that they act as the catalyst to ensure we do not have the same debate in five years’ time.

I return to the subject of nurses and the nursing profession. I agree with noble Lords who have said that it does not necessarily follow that because someone has a degree in nursing, they lack compassion. That is a rather terrible thing to say. However, there is a question about the structure of nursing, which yet again is picked up very well in the report on page 87, under the part entitled “The Way Forward”. The report says:

“There was much comment on the style of leadership needed for the future. ‘It’s to do with whether we’re transactional (you will do this, that or the other—talking down to staff)”—

the Hattie Jacques scenario, I suspect, although a lot of people would quite like to see a few more Hattie Jacques on the ward—

“or transformational leaders (embracing staff and recognizing skills and contributions)’”.

The report goes on to talk about mutual respect, not working in silos, and working as a team. Anyone who has worked in any large structure, whether in healthcare or elsewhere, will recognise those two different styles of management, although I have to say that it does not have to be one or the other. Leadership is about taking difficult decisions and about looking holistically across the whole. I quite agree with colleagues who have said today that those in charge of a ward should also have the authority to deal with nutrition and cleaning. I remember a debate in a German hospital, where the wards were absolutely spotless, about whether cleaning services should be contracted out. The question was asked, “How do you make sure that these wards are so absolutely spotless?”. The reply was that the cleaning was contracted out but that the person in charge of the ward was able to stop the payment of the contract if they were unhappy with the results. That is the sort of authority and leadership that is needed on a ward, and it should be placed with an individual. This is not rocket science. If we had the collective will to implement that, it could be done tomorrow.

Nurses also have to delegate. I was very interested to hear Tony Hazell giving evidence on Tuesday to the Health Committee, which is holding an inquiry into education, training, and workforce planning. He said that there will be more training, both for nurses and for healthcare workers to whom nurses delegate. From this report, it is clearly rather important that everyone in the structure knows and understands their role, and that people are prepared to delegate so that they are not working in silos. In-service training is also important for nurses working in hospitals, out in the community and elsewhere, as well as for those who are not nurses but who work in a supportive role. If such ongoing training were in place, we would not get the horrendous stories, which I have personally experienced on more than one occasion and with more than one person, of food being left at the end of the bed for someone who cannot access it. In-service training and education throughout is important, and it will also help nurses.

Finally, it is important that where there are serious problems, nurses should be able to report colleagues in a structured way. It is called whistleblowing—a horrible term—but in my experience, where really good nurses experience this and hit the buffers in trying to report problems, too many of them leave the service. They find it just too difficult and too unpleasant. We have to build that into the structure when we come to reform these services.

12:47

[Lord Young of Norwood Green]

My Lords, I, too, thank the noble Baroness, Lady Emerton, for initiating this debate and congratulate her on a superb contribution. I enjoyed the history of nursing but must admit that I felt that one name was absent—especially as we are talking about front-line nurses—and that was Mary Seacole, who brought a different approach, though a very interesting one, about the same time as Florence Nightingale. I see that I have not transgressed because the noble Baroness is nodding. I am relieved that I have got my history right.

I enter this debate as a lay person, but I cannot help thinking that if Benjamin Franklin were alive today and living in the UK, he might be saying that there are three things that are certain: death, taxes and—whoever we are, at some point in our life—being impacted on by the National Health Service. Of course, the unfortunate fact is that as we gradually mature—I do not say get older; in the House of Lords we mature—we experience that impact. Last year I spent a week in an NHS hospital having a large lump of titanium inserted in to my hip. It was largely a very good experience. It was fascinating being in the ward, looking at the atmosphere there and the nature of the people who treated me. As has been said, some were absolutely superb: they had empathy, compassion and all the things that you want. Others, I could not help feeling, needed to be taken to one side and told, “Look, part of working on a ward is to show care, empathy and compassion. If you’re not doing that—it doesn’t matter who you are, whether you are a doctor, nurse or care assistant—you are actually undermining the quality of care for people who are really at your mercy as patients”.

When it is good, it is really good. I noticed this during that week. There were some ward sisters who came on and would do anything; never mind “too posh to work”, they would do any job whatever. They were a brilliant example of leadership at its very best. There were others with whom I felt that it was not quite right. The worst example that I saw was when the elderly woman with suspected pneumonia in the bed next to me was getting in to that panicked breathing mode. In a plaintive voice, she said, “Help, nurse. Help”, and a young nurse who was sitting at a computer turned round and said, “Someone will be along in a minute”. I had difficulty in restraining myself at that point and fortunately someone did come along, but why did that nurse not get off her backside and do what she should have done, which was to respond to the woman while holding her hand? It is a matter of changing the culture—something that has already been referred to. I hesitate to bring up the worst examples but, if we do not have an honest and frank debate, we will not really address the issue.

However, as I said, I have seen some wonderful examples. My wife is currently being treated for a serious kidney condition and the renal ward at Hammersmith Hospital is absolutely brilliant. I reckon that the senior ward sister there—Sister Nicola—would be able to solve most of the problems in the National Health Service if only we could clone her. She is marvellous and empathetic, and the ward runs like clockwork, and so there are some absolutely brilliant examples.

My noble friend Lady Warwick rightly condemned the generalisation that takes place in the media by implying that, if you have a degree as a nurse, somehow you cannot undertake basic nursing tasks. I, too, reject that—it is clearly wrong. However, we have to make sure that the training for people who study for a nursing degree is right. As I understand it, they should spend 50 per cent of their time on the wards. I should be grateful if the noble Earl, Lord Howe, could confirm whether that is the case when he responds. Ward experience under the watchful eye of trained sisters is vital.

My noble friend Lord Hunt, who seems to have captured the ground in progressive approaches to the development of nursing, gave us some very useful pointers. Why do nurses not have something equivalent to the doctors’ Hippocratic oath? My noble friend was absolutely right to talk about a code of values. That ought to be taken on board and be a part of the national scheme. Knowing who is in charge and has authority is important. Going back to one of the best examples that I had experienced, when I asked Sister Nicola what her qualifications were and whether she had been in the nursing profession for a long time, I discovered that she actually had only a diploma. I am not arguing against degrees but, with my passion and enthusiasm for apprenticeships, I argue that there should be a vocational route into nursing. Interestingly, when I asked the consultant for her views on this, she said, “It’s funny you should say that. We have a healthcare assistant who is a mother. She has returned to work recently and wants to go into nursing”. There ought to be that vocational route for healthcare assistants. I am reminded of the old sandwich courses that you did if you wanted to get a degree in engineering. Again, when the noble Earl replies, I should be grateful if he could take up that point.

The noble Baroness, Lady Browning, said that there are a number of practical things that can be done—my noble friend Lord Hunt told us about some of them—and that we do not need another five years of research to encounter what we know to be proven good practice. I hope that the noble Earl, Lord Howe, will be able to assure us that spreading best practice will be one of the Secretary of State’s key roles. It is not just about money; there is a real debate about staffing, although I do not want to go into that. Obviously if people feel under real pressure, that is going to create problems. I do not particularly want to explore that side of the issue but spreading best practice, as a key part of developing the health service, seems to be fundamental. Surely it would be a cost-effective, value-added method of improving the health service.

I have one or two points to make in conclusion. The noble Baroness, Lady Browning, touched many buttons when she talked about the confusion over uniforms. I absolutely echo that. You think, “That one’s in blue, that one’s got blue with spots on and that one’s in pale blue”. Sometimes it is also really difficult to distinguish healthcare assistants.

There is a question over whether healthcare assistants should be regulated. I tend to feel that, because they have become so important to hospitals and community care, the one thing that we should insist on is a requirement for basic training. That should not be an option. Perhaps a code of values, which my noble friend Lord Hunt suggested in relation to nurses, should also be adopted for care assistants.

A number of contributors said that it was important to make sure that those in charge of wards have authority. I have recently been in hospitals where the wards have been spotlessly clean. That is one part of the problem in wards but it is not the only one—noble Lords have also referred to the feeding of patients and so on.

I am conscious of the time but I should like to make a final point. I think that it was on the “Today” programme on Radio 4 this morning that I heard a former nurse speaking about whistleblowing. I do not like that phrase either, because it should not have to happen. The right management environment should encourage people, as part of working in a team, to explore the strengths and weaknesses of their work on a ward. They should be able to say, “How can we work together? If there are problems, I should be able to feel that I can go to my immediate manager and have a frank discussion”. It is important to ensure that the right processes are in place to enable nurses to feel confident enough to do that.

In conclusion, I feel privileged to have had the opportunity to take part in this debate and I look forward to hearing the noble Earl’s response.

12:57

[Lord Patel]

My Lords, I note that I am the only doctor speaking in this debate. Noble Lords are right: doctors do as matrons tell them. Therefore, when my noble friend Lady Emerton—the matron—said to me, “You will speak”, I did not argue, but I am very pleased to be able to do so and I thank her for the opportunity.

As most noble Lords know, during my fruitful life my specialty was maternal foetal medicine. I worked in a team that looked after mothers whose pregnancies were complicated by other medical conditions or who developed serious complications during pregnancy or labour. I pay tribute to the most dedicated nursing workforce with whom I had the privilege to work—midwives and specialist neonatal nurses. They were the key members of the team and prevented not only deaths but handicaps among the babies who were born either prematurely or with difficulties, or whose mothers had a difficult labour. They are the most skilful nurses with whom I have ever worked. I still go to my hospital occasionally. I walk through the labour and delivery room and get the usual comment: “Have you come here to work or to drink our coffee?”. I have the coffee, as I do not think that I would be allowed to work. I am going to talk mostly about the current state of affairs in midwifery and neonatal nursing.

We currently have a shortfall in England of between 4,500 and 5,000 midwives. This is partly because of a fall in recruitment but it is also related to an increase of 22 per cent in the number of live births over the past two years. There are now 690,000 births per year in England. Another problem is that the midwifery workforce is ageing. Half the workforce is aged between 45 and 55, and therefore recruiting a younger workforce is extremely important. Not only that, there is a change in the way in which midwives work. Their work has become more complex because of older mothers. There has been a 71 per cent increase in 40 year-old mothers and a 24 per cent incidence of obesity in pregnancy, both of which lead to higher rates of complications in antenatal care and in labour.

There is also a reduction in the overall budget. In 1997-98, the maternity services budget was 3.1 per cent of the total NHS budget. Although the sum might have gone up in total, it was 2.46 per cent in 2010. There is a serious issue of recruitment of midwives and an increase in maternity services. I know that the Government recognise the problem. Even before the election the Prime Minister, as Leader of the Opposition, writing in the Sun pointed out that midwives were,

“stretched to breaking point … overworked and demoralised”.

He promised that when in power, the Government would increase the number of midwives by 3,000. Unfortunately, that has not happened.

I congratulate the Government on the issue of training. They have committed to maintaining the same number of places for student midwives in the 2011-12 academic year as there were in 2010-11, which was a record high. This is welcome as it will help to address the two issues of the midwifery shortfall and the ageing midwifery profession, provided that there are jobs at the other end of the process. Recruitment ought to be part of it.

Last week the Royal College of Midwives published its State of Maternity Services Report 2011, which makes several good points. The key ones suggest steps to address the problem. One is to increase the choice of place of birth—I know that the Government are keen to allow mothers to have a choice—such as midwifery-led units and home births. Births in these settings require less midwife time, and in low-risk pregnancies outcomes are not affected. Other suggestions include: the appropriate deployment of properly trained and supervised maternity support workers to do non-midwifery tasks; a guarantee not to cut midwife training places; and encouraging the health service to increase recruitment and meet the target of 4,000 more midwifes.

There is clear support for more midwives. A recent public e-petition to Parliament calling for the Government to recruit an extra 5,000 midwives has already been backed by 20,000 people. I hope that after today’s debate it might increase to 2 million. I hope that I have made my point that there is a need to address the midwife shortage if we are to deliver quality care to pregnant mothers and newborns.

I turn briefly to the issue of neonatal nursing. As highlighted in the report published on 9 November by Bliss, a special-care baby charity, one-third of neonatal units in England are cutting their nursing workforce, stopping recruitment or downgrading posts. Referenced against the Department of Health’s toolkit for neonatal services, there is a shortage of nearly 1,200 neonatal nurses. Care of the neonates, both premature and following neonatal surgery, is highly skilled, intensive work, and outcomes for those vulnerable babies, including mortality rates, are directly related to skilled nursing care around the clock. Cuts in training and education budgets have led to a shortage of qualified specialist neonatal nurses. We need commissioners and providers to implement NICE specialist neonatal care quality standards. In future we will rely a lot more on NICE quality standards to drive up quality and outcomes in the health service. If they are not implemented—as they clearly are not, in specialist neonatal care— improvements will not come about.

The Government want a reduction in perinatal and infant mortality. Delivering care to neonatal quality standards will go a long way to achieving that. I look forward to the Minister’s comments on both maternity and neonatal services.

13:06

[Lord Ribeiro]

My Lords, I apologise for speaking in the gap without giving notice, but I could not let the noble Lord, Lord Patel, give the impression that he was the only doctor here who was prepared to speak. I thought that I would share some thoughts on my view of nursing, which I have to limit to my own special interests of surgery as they are the only group of nurses I know anything about.

It is interesting that reference was made to the Salmon report, which I think was produced in 1968 when I was a fairly young junior doctor in the Middlesex hospital, which sadly no longer exits. We had a matron, wing sisters and ward sisters, and there was no question about who was in charge. There was leadership right down to the ward level, and the important thing about nurses at that time—there are still quite a few of them out there today—was that they knew they were in charge. They had responsibility for the ward and I totally agree that we should not wait for the hospital manager to say that a sister of a ward cannot tell the cleaning staff that they have to stop. I well remember doing ward rounds at Basildon hospital when the sister would put a notice on the door saying, “Ward round in progress. Consultant present. Quiet please”. If the cleaning staff tried to come in she would tell them to go away until the ward round was finished. Latterly we would not dare tell the cleaning staff to go away because their response would be, “If I don’t clean this ward now I’m not coming back”. There has to be proper leadership. It does not have to come from Richmond House; it has to come from within the organisation, seeing its responsibility to ensure that leadership is delivered. Leadership is the key—knowing who is in charge.

One of the things that has been said about doctors is that they have treated nurses as their handmaidens. It may be said that doctors have been resistant to seeing nurses progress, and we have had a long debate about training, education and diplomas, which I shall not go into. But the opportunities that opened up for nurses after Salmon did provide nurses with a way to move into management and other areas. The advantage for nurses is that their opinion and advice has influenced medical care over the past 40 years that I have been in medicine, and much of it to the good. The downside has been that we have created another pathway for nurses to go other than the ward. Therefore, talented nurses may have wanted to stay on the ward but if they wished to progress and improve their salary status, they had to go sideways into management. That is where some of the problem has emanated from. We must look at ways of remunerating and keeping nurses who want to stay on the wards to do so.

I shall not speak for long but I want also to make a point about teamwork—nurses and their contribution to the team function. As a surgeon, like the noble Lord, Lord Patel, I know that we work in a close team. Our main team is the ward staff and ward sister who look after our patients. In my case the ward sister would tell me through the grapevine when my junior doctors were not doing all that they should. There is a big function for the ward sister, other than just looking after patients. In theatre, you have a close-knit team. Another thing that I regret is that in the old days many nurses would come along and observe what was going on in theatre and say that they would like to become theatre sisters. They were encouraged to go into it. Latterly in my time as a consultant, I found that fewer and fewer nurses were being directed to go to work in theatre. I think this is a great shame because we live in a world of multidisciplinary working, and it is important that nurses should be encouraged to specialise if they wish to.

Finally, I came back from Afghanistan recently, and in answer to the noble Baroness, Lady Masham, I have to say that the nursing teams in Camp Bastian are superb. Many of them are volunteers from this country, and their contribution to the war effort in Afghanistan has to be noted and applauded.

13:10

[Lord MacKenzie of Culkein]

My, Lords, we all owe a great debt of gratitude to the noble Baroness, Lady Emerton, for securing this important debate on front-line nursing today. It has been a very well informed debate. It is not very often that we have the opportunity to debate nursing in this House, so the debate is to be doubly welcomed. It comes at a time when the nursing profession is, to coin a phrase, getting it in the neck. As my noble friend Lady Warwick of Undercliffe said, not a week goes by but there are reports of poor care with a lot of armchair analysis of where it is all going wrong. There are justifiable concerns which have to be addressed, and I will come to them shortly.

Like the noble Baroness, Lady Emerton, I am a nurse who is no longer on the effective register, and I have not been for the past 10 years to so, but because of that I want to start from this side of the House by saying something in defence of the nursing profession. The vast majority of nurses, and midwives too, are good and safe practitioners. They provide good quality and safe care. They are highly skilled. They are involved in research and all sorts of things that could have been only dreamt of in my early days as a nurse. Good work does not get publicity. The noble Baroness, Lady Jolly, reminded us of the good work done by Macmillan nurses and hospice nurses, and the noble Baroness, Lady Masham, and the noble Lord, Lord Ribeiro, referred to nurses who join the military reserves, spend six months in Camp Bastion, then come back and continue their remarkable work in the National Health Service. Good work is done by specialist nurses, such as stroke nurses or community psychiatric nurses, to highlight just a very few. Good things do not get publicity; bad things do. The image of the nursing profession is suffering as a result of recent publicity, some of it rather damning, about the quality of care in a number of settings.

In my experience, morale has its ups and downs, and now it is on the way down but at least until now the image of nursing had always been good. Morale is now being hit from a number of areas including the growing public perception that nurses are not capable of compassionate care, the two-year pay freeze and pension issue, the downgrading of posts and the actual and forecast staffing reductions coming from the Royal College of Nursing and UNISON. As we have heard today, that is not just hyperbole from staff organisations. The noble Lord, Lord Patel, told us stories about special care baby units and the number of neonatal nurses who are being downgraded while in post. We are getting the same story from the Multiple Sclerosis Society that a significant number of posts are being cut.

It became really too much when a leader in last week’s Sunday Times said:

“One reason for the government’s tough austerity programme is that … Labour poured more money into the National Heath Service … and the number of nurses increased by a fifth”.

That is going too far. Poor morale is not conducive to happy nurses, and no Government can ignore it for very long. I think a match may have been put to a slow-burning fuse with the prospect of even heavier cuts, 1 per cent pay maxima and possibly different salaries for nurses doing the same job, for example, in Stockton-on-Tees and in Guildford. Bad morale has an effect on staff. It cannot be overlooked, but neither can or should it be used to justify bad delivery of nursing care. I hope that we can get some broad measure of agreement on the way forward, which means dealing with some of the reasons for the apparent decline in some aspects of care.

The report of the Prime Minister's commission on front-line nursing, set up by my right honourable friend Gordon Brown, has much to commend it. The noble Baroness, Lady Emerton, was, as she reminded us, a commissioner. The recommendations of that commission, if implemented, point the way forward on many of the issues that need to be addressed for the future. The present Government welcomed the report. They say that it does not go far enough but, at the same time, they say that it has to be looked at in the light of the present economic climate. That might be a contradictory position.

Staffing levels are always an issue in nursing. We heard about them yesterday in the debate on mandated levels and ratios, and we know from research that inappropriate staffing leads to poorer care and higher mortality. In response to amendments yesterday, the Minister told us about the safeguards that will be in place, but most of them are already in place yet have not prevented the problems, for example, in Mid Staffordshire, and when the CQC gets involved, it is, as was highlighted yesterday, usually too late.

There is much mythology about the so-called good old days. The press are forever hankering after matron, but know nothing about the science and art of nursing. What is not a myth is the fact that basic or essential care was better. I speak as a fascinated observer and recipient during a recent six months’ hospitalisation. I should have been in for one night, but ended up staying for six months. My experience was that most technical skills were excellent, although staffing levels and ratios outside intensive care and high dependency were not always good enough. Essential care was not always as good as it could or should have been. The care that used to be delivered by enrolled nurses, student nurses and pupil nurses is now delegated to some 303,000, I understand, healthcare assistants or support workers who fulfil many different nursing and midwifery roles. I am told that there are some 120 different job titles for support workers throughout the National Health Service. If that is true, find it astonishing. As was said yesterday, there is too much variation in the quantity and quality of training available for support workers. That needs to be improved and to be done to a national standard agreed with stakeholders. Scotland has already done this, and Wales and Northern Ireland are looking to follow.

Much of the care that is delegated to healthcare assistants is hydration, nutrition, pressure area care, intimate care, oral hygiene and keeping the patient clean and dry. We used to call that nursing care but, to my regret, it is often now dismissed as social care. It is nothing else but essential nursing care, and if it is not done, and done properly, then we have lost sight of what we are about as a profession. Healthcare assistants increasingly do more than essential care. They do temperature, pulse, respiration and oximetry observations. In the community, they are dressing leg ulcers and undertaking catheterisations and tube feeding, which were once the sole prerogative of the district nurse. I understand that healthcare assistants can, in some hospitals, undertake procedures such as cannulation. I wonder whether patients know that the person putting a needle into their vein is unregulated and not professionally accountable. I suspect they would be surprised.

Can we get rid of the confusing titles? Patients are entitled to know who is looking after them. The noble Baronesses, Lady Masham and Lady Browning, and my noble friend Lord Young mentioned uniforms. They are confusing. Patients have no idea who is looking after them. The whole of the profession is suffering because the basics are not always being attended to. This is, I am convinced, due to incorrect staffing levels and training, education and organisational cultural issues. It is also to do with societal attitudes to the elderly, which is not peculiar to the National Health Service. The National Health Service cannot cure society's ills, but it needs to get a grip and sort this matter out internally.

There are more changes to come. Nursing in England is to become a wholly degree-based profession, which is right. But perhaps I may pick up on the point made by my noble friend Lord Young that there needs to be a wider entry gate. There is always the fear that when a profession becomes wholly degree-based, it cuts out the possibility of a number of people who would make excellent nurses getting entry to that profession.

Good selection of potential students is essential. Recently, we have heard quite a bit about nurses not being fit to practice when they emerge from universities. I do not know whether enough nursing input goes into that selection but, if not, it should do. We also need to deal with clinical practice and relate it to theoretical content, and we need to get it right. My noble friend Lord Hunt of Kings Heath has spoken at length on this point and I agree with him entirely. I do not think that there is anything wrong with a practice-based model and I hope that those discussions are not at an end.

Protection of the public should be effective, all the more so given the cost-driven trend for employers to substitute trained nurses with support workers. That brings me back to regulation, at least of those who are delegated duties by trained nurses. The Nursing and Midwifery Council, the Royal College of Nursing, UNISON, the Queen’s Nursing Institute, the health committee in another place and, not least, healthcare assistants themselves want statutory regulation. The Government do not agree. They want assured voluntary registration. Some regard this as a small step in the right direction. It is small step but we do not think that it goes far enough. However, we will come back to that debate in the near future under the Health and Social Care Act.

Perhaps I may return to the Prime Minister’s commission on front-line care. I hope that the Minister will give us some detail on what the Government plan to do with each of the recommendations. I appreciate that that is a tall order, so perhaps he could write to us. There are four very important first principles. On the pledge for nurses and midwives, my noble friend Lord Young spoke about the Hippocratic oath and having an equivalent, which could be developed.

We have heard a lot in this debate about the responsibility of senior nurses. I agree entirely that they need to be given back the authority that they had. On corporate responsibility, as we have heard, recently Sir David Nicholson told a conference of senior NHS staff that many of its employers had no idea of how many nurses they have in the hospital or on a ward at any one time. A hobbyhorse of mine is the return of the ward sister. That responsibility must be restored and properly defined. Like the noble Baroness, Lady Emerton, I am passionate about nursing. I look forward to what the Minister has to say. Again, I thank the noble Baroness for giving us the opportunity for this debate.

13:22

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, on occasions like this, I reflect on how lucky we are in this House to have the noble Baroness, Lady Emerton, in our midst. She has allowed us to appreciate once again why she is such an unquestioned authority on this crucial subject of nursing care. I, for one, am very grateful to her.

The wording of her Motion is of course carefully chosen. Front-line nursing—in acute settings, in the community, in schools and in people’s homes—is a part of all our lives and has always been an essential element of patient care in the National Health Service. Patients are clear about what good nursing care should look like. They want to be confident that their nurses are knowledgeable, safe and competent. They expect their nurses to be caring and compassionate. They want to be treated with respect by nurses who genuinely care for them and about them.

We in Government are also clear about what we expect from a front-line nursing workforce. I cannot better the description offered by the noble Baroness, Lady Warwick. We expect high-quality, safe and knowledgeable care for all; we expect dignity and compassion for all; and we expect nurses to make the most of each and every interaction they have with patients to improve their health and well-being, and their experiences of care.

What makes a good nurse? The first requirement is a point raised by my noble friend Lord Bridgeman. We should attract people into the profession who not only have academic ability, but also have the right values, attitudes and behaviours. Education commissioners expect universities to demonstrate that their recruitment processes embrace this approach. Employers will also look for this as part of their selection and recruitment processes when they are helping to interview potential students and are appointing registered nurses. Getting this right at the start will help to reduce attrition and maximise the resources that we put into nurses.

The second requirement, as our debates on the Health and Social Care Bill have amply demonstrated, is that we educate and train our nurses well. The Nursing and Midwifery Council undertook a comprehensive review of pre-registration education and published new standards for pre-registration education in 2010, following extensive and wide public consultation. Importantly, fundamental care is specifically reflected in these new standards. I would say to my noble friend Lord Bridgeman that student nurses spend as much time gaining practical, hands-on experience with patients as they spend in the classroom. In fact, I believe that that ratio has not changed over the past 30 years. I completely agree with the excellent points made by the noble Baroness, Lady Warwick, about degree-level nursing. The first of the new educational programmes began only this year and it will be about three years before the first students emerge from these new programmes. The NMC will evaluate these changes and I look forward to seeing this work.

The next requirement is to enable nurses to nurse. That means doing what the noble Baroness, Lady Masham, talked about so compellingly: finding ways to make sure that we keep senior, experienced nurses beside patients delivering hands-on care and not filling in endless piles of paperwork, which are sometimes of marginal usefulness. That is why we are committed to reducing bureaucracy and empowering our nurses as clinical leaders. The NHS institute’s productive series is helping nurses to reduce unnecessary and wasteful practice at the point of care, which is freeing up nursing time to be spent on essential tasks, such as providing assistance with mealtimes and carrying out interventions to prevent pressure ulcers and falls. Any good nurse will tell you that spending more time with the patient facilitates a better and more timely patient assessment, thus enabling the nurse to spot signs of deterioration or to pick up on small but significant things that a patient often will not think to mention. That is why my officials are working with the NHS institute to explore ways in which areas that are not yet embracing the productive series can be identified and supported with implementation, thus allowing the spread of best practice, about which the noble Lord, Lord Young of Norwood Green, spoke.

A phrase that I have learned recently is “essential rounding”, a system that sees nurses doing planned rounds every one to two hours to check on patients and to deal with any concerns. We are pleased to see nurses embracing that concept. Feedback about it from patients and nurses is very positive, with some studies seeing a reduction in falls and improvement in patient experience since implementation. In fact, a plethora of best-practice guidance is available. But central initiatives can take us only so far, which is why effective nursing leadership at the front line is so important. Matrons and senior nurses are role models and they are pivotal in developing the culture of care in their clinical areas. Through the standards they set for others to follow, to monitoring the performance of individual nurses, they ultimately make the difference between good and bad care.

I welcome the work of the NHS institute in developing a clinical leadership competency framework which will help develop patient-centred nursing leadership. The noble Lord, Lord MacKenzie, whom I welcome to the Front Bench, was right that the vast majority of nurses are extremely professional, care deeply about their patients and do a tremendous job, often under very difficult circumstances. But, at the same time, the noble Lords, Lord Young and Lord Hunt, were right to be honest that this is not always the case. The CQC’s report on its 100 unannounced nurse-led inspections showed how the quality of care—in this case, for older people—can fall far short of what we would want. That problem is far more widespread than we would expect. About half of hospitals visited gave cause for concern. Twenty hospitals were not delivering care that met the essential standards that the law says people should expect. I was alarmed to see that in 14 hospital trusts fewer than half the staff said that they would be happy to see a friend or relative treated in their own hospital.

However, I would say to the noble Lord, Lord MacKenzie, that I do not think that it is right simply to say that this is because of poor staffing. The CQC dignity and nutrition inspections found many examples of excellent practice where staffing was not ideal and cases of poor nursing care where there was a full staffing complement. We are hearing more and more concern from patients and nurses themselves about inadequate staffing levels and inappropriate use of support workers. As I said in our debate yesterday, setting safe staffing levels is not an exact science. These decisions are complex and they are best made by local clinicians and managers on the ground, who understand the needs of their patients. As noble Lords are aware, there is guidance available from the RCN and others to assist clinicians and managers in setting safe staffing establishments.

This same guidance is used by the CQC when determining whether providers have enough suitably qualified, skilled and experienced staff. The CQC can take tough and independent action when an organisation is not taking appropriate steps to ensure that there are sufficient numbers of suitable staff at all times. The noble Baroness, Lady Emerton, mentioned Anne Marie Rafferty’s research. I would be pleased to look at that research in detail and I will ask the Nursing and Midwifery Professional Advisory Board to consider it and report back to me early in the new year.

Much of the concern around nursing in acute settings has been related to inappropriate delegation by nurses to healthcare support workers. Wherever there is a multidisciplinary team of regulated professionals and unregulated healthcare workers, appropriate delegation and supervision is vitally important. This is an area ripe for formal review. We very much welcome the NMC’s plans to update its guidance on delegation so that nursing staff know how to do this safely and are clear that they retain responsibility for their actions. We have also asked Skills for Health and Skills for Care to accelerate production of a code of conduct and recommended core training for healthcare support workers and adult social care workers in England. We expect work to begin by April 2012, with the aim of delivering outputs ahead of the establishment of an assured voluntary register, which could be operational from 2013 onwards.

Nurse leaders, managers and trust boards must take staffing concerns seriously and, where staffing is found to be an issue, they must take immediate action. In the new world of the NHS, there will be two watch words for commissioners: outcomes and quality. This carries the basic point that clinical commissioning groups will want to satisfy themselves that the services they commission have safe and effective staffing profiles. Nurses will have an increasing role in commissioning and in developing the shape of local services—that is exciting.

Safe and effective care has several strands to it, all in the direct gift of nurses. Noble Lords may be aware of the QIPP safe care work stream quality improvement programme—the safety thermometer—which aims to focus nursing attention on four areas of harm: falls, blood clots, pressure ulcers and catheter-related urinary tract infections. We have published the 2012-13 operating framework with strong messages about reducing harm in these areas, making sure that these are firmly on trusts and commissioners’ agendas.

My noble friend Lady Browning spoke of the need for government leadership and she is right. We are making sure that the nursing contribution to quality is being championed at the very centre of government. The SHA chief nurses are leading the nursing contribution to quality improvement at the front line through the energising for excellence quality framework. Much of the success of the quality framework will depend on transparency and, as part of our transparency agenda, NHS North is working towards local publication of nurse-sensitive metrics in areas such as falls and pressure ulcers and is also exploring how best to include patient and staff experience data. The patient experience is absolutely centre stage as we set about measuring the quality of nursing care. Ensuring that patients have a positive experience of care is reflected in the NHS outcomes framework that the new NHS Commissioning Board will use to hold the NHS to account for what it delivers. Everyone who works in the NHS has a role to play in ensuring that patients have a good experience. It is not optional, and it is not “someone else’s job”. The task is to make listening, understanding and responding to patients’ views as commonplace as acting upon clinical audit data, patient safety data or financial data.

Nurse training has, unsurprisingly, featured prominently in this debate. The noble Baroness, Lady Warwick, raised the issue of continuous professional development. Later this month, the Government are publishing our detailed proposals on education and training that will describe the arrangements for continuing professional development, which we recognise is of great importance. My noble friend Lady Jolly spoke about the role of specialist nurses and her concern about downgrading roles without due regard to patients’ needs. I agree that service planning has to put patients firmly at the centre. The Government acknowledges the important role of specialist nurses in improving health outcomes and patient experience. In the end, local organisations must have the freedom to determine the skill mix of their clinical teams. Commissioners, clinicians and trust boards have to work together to ensure that the workforce is capable of meeting the needs of patients and that they have access to continuing professional development.

My noble friend also spoke about the introduction of end-of-life care standards, and I am happy to assure her that we will continue to work towards implementing the end-of-life care strategy.

The noble Baroness, Lady Masham, spoke with her customary force about bringing back old-style matron. That resonated throughout your Lordships’ Chamber, and there is no doubt that strong nursing leadership is essential at all levels for high-quality care. The noble Lord, Lord Hunt, was quite right about that. Directors of nursing and trust boards must set the culture for a hospital, and that includes a leadership style that challenges poor standards and creates an environment for high standards.

My noble friend Lady Browning raised the subject of whistle-blowing. It is very important that the culture of a hospital is right to enable whistle-blowing to happen. Leadership from boards has to set the tone for that. To whistle-blow does require great confidence and support. I believe that more of this will come because of the increase in graduate nurses.

All this has a direct bearing on the point made by my noble friends Lord Bridgeman, Lady Browning and Lord Ribeiro about cleaning. Nurses have a key role to play in ensuring that hospitals are kept clean. The infection control nurse, the ward sister and matron who set and enforce local standards are particularly important. The code of practice for the prevention and control of infections ensures that nurses are involved in all aspects of cleaning standards. The code provides that directors of nursing are involved in all cleaning contract negotiations, which is very important. Matrons have personal responsibility and accountability for delivering a clean safe environment for care.

The noble Lord, Lord Hunt, mentioned supernumerary sisters. The RCN has just published guidance on developing business cases to fund the supervisory status of the sister so she can exercise her leadership role effectively. The guidance is helpful, timely and above all very practical.

The noble Baroness, Lady Masham, spoke of the importance of district nurses—again, absolutely to the point. We acknowledge the enormous contribution of district nurses in helping people manage long-term conditions, keeping people out of hospital and ensuring people are able to access the resources they need, when they need them. We want to make sure that people go to hospital only when they need what a hospital can do. We see a much greater role for district nurses in the future, not a diminishing one.

The noble Baroness, Lady Warwick, and others mentioned the RCN Frontline First report. I do not want to dwell too long on this, but I have to voice some serious criticism about that report. The RCN’s numbers are mainly based on an analysis of just 41 trusts. The trusts identified in the report have disputed the RCN’s figures. The RCN has not offered commentary on the fact that some of these plans are about moving services out into the community to provide better care for people when and where they need it. We are not disputing that some trusts have reduced the number of staff—some have—although many of these are support staff and often it is being done through natural turnover. We do emphatically reject the conflated numbers that the RCN is claiming. I have got some chapter and verse in my brief, but all I would say is that it is up to local trusts to determine their workforce needs. We have made it clear that any reduction in clinical posts must not have an adverse impact on the quality and safety of patient care. We have introduced a quality assurance process for SHAs to complete with trusts.

The noble Lord, Lord Patel, spoke about midwifery. The Government are not reducing the number of midwifery trainees. In 2010-11, 2,488 midwives training places were planned. A further 2,507 training places are available this year—that is a record high. The Government are committed to ensuring that we have the right number of trained midwives, especially given the increased number and complexity of births in recent years. This includes ways of supporting midwifery recruitment and retention to help local organisations which are able to commission the number of training places that they need. We have asked the Centre for Workforce Intelligence to undertake an in-depth study of the maternity workforce starting this year. This will inform the future commissioning of training places, including for midwives.

On specialist neonatal nurses, I took the points that the noble Lord made. The National Institute for Health and Clinical Excellence quality standard and the toolkit for high-quality neonatal services are valuable tools to assist NHS commissioners and providers in the provision of high-quality care for babies and their families. However, I shall take away the points that the noble Lord raised.

We have heard today from my noble friend Lady Jolly, among many others, about the opportunities for front-line nursing. Technology moves on, medical knowledge is constantly advancing and the members of our nursing workforce will need to keep abreast of these changes. But one thing that we know will not change is the importance of the care that nurses deliver; and the key role that nurses can and do play in improving quality of care, patient outcomes and their experiences of care.

[Lord Young of Norwood Green]

Will the noble Earl comment on my point about a vocational route into nursing?

[Earl Howe]

In the time available, I shall do so very briefly. Access to nursing is, as the noble Lord will know, already through quite a wide entry gate—through progression from apprenticeships, NVQs and access courses. Universities set the entry standards and do not always rely on A-level qualifications. However, it is important that students must be able to cope with degree-level study—it would be wrong to set them up to fail. However, we are aware that the entry gate about which the noble Lord, Lord MacKenzie, spoke needs to be as wide as reasonably possible.

It is patients who matter most. As a Government, we are committed to bringing about the improvements in front-line nursing care that patients want.

13:45

[Baroness Emerton]

My Lords, I thank every single person who has contributed to this debate, which has covered a very wide area. Everything said was neither good nor bad, but was to be noted—as the title of the debate invited us to do. The debate has given us an opportunity, particularly as we are in the middle of the Health and Social Care Bill, to ponder on some of the things that have been raised today. It has been particularly open and honest, and I congratulate and thank everyone who has participated. It has been an especial pleasure to me to have in the noble Lord, Lord MacKenzie, a nurse on the Front Bench and I thank him for it. I thank also the Minister for going through in such detail all the points that have been raised and for agreeing to take some of them forward.

Motion agreed.

International Development Policy

Thursday 1st December 2011 Lords Chamber

Debate

13:44

Moved By

[The Earl of Sandwich]

That this House takes note of Her Majesty’s Government’s proposals for international development policy, including proposals on the situation of Dalits.

[The Earl of Sandwich]

My Lords, I am delighted to open this debate on international development. It is nice to see a few old friends present. There may be other preoccupations nearer home, such as the eurozone crisis or the recession, but I am asking noble Lords to look at the drama going on every day in countries suffering from poverty and injustice. I much look forward to the maiden speech of my noble friend Lord Singh, who knows a lot about this subject. I declare an interest having been associated for nearly 40 years with Christian Aid, mainly as a staff member and a board member, and having also worked closely with Save the Children, CARE and Anti-Slavery International.

The current director of Christian Aid, Loretta Minghella, said in a conference last week that,

“The scandal and outrage of 21st century poverty is wrong”.

More than 1 billion people suffer from hunger or injustice, and the two often go together. According to Save the Children, chronic malnutrition affects 178 million children—one-third of all children under five in developing countries. Of these, 7.6 million died from malnutrition, ill health or other effects of dire poverty last year. The world’s population continues to grow, being above 7 billion, and could grow by perhaps half as much again in this century. Yet the rate is slowing down with economic growth, and I believe that this planet has the resources to grow enough food and defeat hunger. We will further reduce the number of malnourished people provided we beef up support for small farmers in the poorest countries, and production and distribution are properly managed.

We in Britain are in the forefront of this campaign. It is my starting point that, largely due to the work of our voluntary organisations, the British public in their many forms have become much more aware of needs around the world. Thanks to our NGOs and church networks working overseas, aid today has enormous popular support, expressed in the manifestos of all the parties and leading to our ring-fenced aid budget, which is not surprisingly envied by other departments. Both Conservative and Labour Governments have a good record in maintaining this country’s reputation in development, even in conflict countries such as Iraq and Afghanistan where at times we have become unstuck militarily. The problem in Iraq was that huge sums of mainly US aid was wasted through foreign contracting firms and consultants. In Afghanistan, too much of our aid programme was skewed towards military objectives in Helmand. Nevertheless, through such projects as the national solidarity programme and the Afghan NGOs, we have undoubtedly made an important, long-term contribution. Child mortality has come down by 26 per cent since 2001.

Our official aid agency, DfID, has shown that it is second to none among OECD agencies, at least level with the Scandinavians, who have always had the highest reputation. I am certain that DfID will be able to spend its increased allocation up to the 0.7 per cent target, although there are real concerns that other government departments may poach some of the budget. No doubt the FCO and the BBC will find legitimate ways of using some of it for diplomacy and broadcasting because there is much common ground between them.

Yet despite DfID’s successes, I doubt that the public can be satisfied with the progress of the UN and our aid agencies in meeting the millennium development goals, or that our successive Governments have done enough to eradicate poverty. Everyone knows that government money is wasted, especially those who have worked in non-government agencies. This is why the coalition has decided to review the aid programme and test its accountability, to make sure that every project is value for money. Later, I shall ask the Minister whether that is achievable.

I am glad that my noble and right reverend friend Lord Harries will speak about the situation of the Dalits, since he also served on Christian Aid’s board. We are both well aware that a large proportion of India’s poor, about 170 million, are from that community. Atrocities are committed against them every day. I have described previously the appalling inhumanity of many caste Hindus, some in senior positions, and the urgent need for India and Nepal to implement the laws that they have already made. FCO and DfID have entered a dialogue with New Delhi and some of the active NGOs. I hope that the Minister will update us on that dialogue.

I shall not deal with multilateral agencies or the European Union today, but I hope that someone will. They were well covered by the noble Lord, Lord Hunt, in his debate last week, when the noble Lord, Lord Judd, demonstrated how essential they are in monitoring themes such as gender equality, human rights and trafficking. I can confirm this from my own work with ASI and Christian Aid.

During a stay in South Sudan in February and an IPU visit to Kosovo two weeks ago—two post-conflict states at different stages of development—I realised, not for the first time, that international development can mean very different things. South Sudan is one of the poorest states on earth and we are engaged with its new Government, not always successfully, on designing better systems for delivering education, health and clean water. The World Bank trust fund, as in Afghanistan, ensures that the money sits in an offshore account and is not spent until it has been through an arduous process of accounting, which can mean that it is not spent at all. Large sums have gone astray in the process and it is widely assumed that this explains the lifestyle of many senior members of government. The existence of excellent NGOs in South Sudan, however, has ensured that funds have reached the people directly as well as through the machinery of government.

In Kosovo, capacity building is much more formal and official. DfID has been a key actor in the building of confidence in institutions, and I was personally impressed by the advice it is giving to the Kosovo Assembly through Select Committees on issues such as finance, the constitution and the electoral system. In the main it is governance and the rule of law which receive UK funding. Kosovo has been a special concern of this country since NATO’s intervention in 1999, yet DfID has decided to close its aid programme at the end of next year and this could prove very damaging. I must ask the Minister what provision there will be for the embassy—or perhaps the EU or one of the German agencies—to take over the programme.

Incidentally on the theme of governance, the CPA is holding an important conference here this week which is benefiting parliamentarians from all over the world. Kosovo is one of 16 bilateral programmes that DfID has decided to close down by 2016 so as to focus its bilateral spending on 27 priority countries. I am sure that the Minister will explain how they became priorities and whether it was the focus on the poorest rather than on post-conflict countries.

The question is: do we have enough confidence in DfID? Do its projects represent value for money? Will they make a real difference to the lives of the poor? Evidently the coalition is not satisfied with DfID’s performance because it has commissioned a whole series of reforms and reports to make aid more effective and accountable. New Governments always do this to show up their predecessors and PR plays a role, but I know that the Secretary of State is personally committed to a strong humanitarian response, and his ministerial visits to Sudan and the Somali border testify to this. I am sure that he will encourage the excellence in DfID’s programme.

I was pleased that the bilateral review has led to a new focus on the conflict states and an emphasis on tackling the two scourges of the poor: maternal mortality and malaria. In this context we should note on World Aids Day the real progress made against that appalling condition, and I also welcome the new all-party group of my noble friend Lord Crisp, which will deal with global health and the vital question of health workers. UCL and the Lancet are also continuing their valuable joint research on global health.

Last week saw the first four reports from a new watchdog, the Independent Commission for Aid Impact, which is to report to Parliament on whether the UK aid programme is making a difference and achieving value for money. This is a tall order judging from what I have read of the initial recommendations for Bangladesh and Zimbabwe. The commission will have to delve into many of our overseas programmes in detail and while it claims independence it will rely heavily on the experience of DfID itself to steer it through. While I am impressed by the Government’s efforts to achieve greater accountability, I doubt they will have the energy and resources to follow up every project. Halving administration costs to only 2 per cent is surely too ambitious and I wonder if the Minister really thinks that it is achievable.

Corruption is endemic in the poorest societies and has to be targeted within our aid programme. It can be eliminated. I have always been impressed by what the Crown Agents have done with the customs and port rehabilitation programme in Mozambique, which still has a big UK training component. However, the Public Accounts Committee report on 12 October found that DfID did not estimate levels of fraud and corruption. It said that its increased budget was bound to lead to higher spending on multilateral projects which would be easier to manage and reduce the need for monitoring and assessment. Perhaps the Minister could confirm whether this is true.

Aid effectiveness is the international buzz word and the Fourth High-Level Forum on Aid Effectiveness is taking place this week in Busan in Korea. This forum follows the Accra agenda for action designed to promote deeper partnerships in development which respect the diversity of aid and acknowledge the ownership of the country concerned. This is an important principle, well known to NGOs, that rich countries have no right to make decisions for poor countries, although in practice they do it all the time. I would like to think that DfID is pursuing the agenda, but in international development when the donor agencies interfere they always say that they are doing it in the name of good governance, accountability and transparency. In reality hypocrisy wins and conditionality remains a powerful weapon of aid.

I have mentioned India, which is having a fierce public/private argument about its services at the moment. I am glad the Government have kept it in the portfolio, although replaced by Ethiopia as the largest UK programme. The role of China deserves a debate all on its own. China has taken a prominent position in Africa, not least through its gift of the impressive new African Union headquarters in Addis Ababa which will open with great ceremony next month. It is a significant investor in east Africa. Earlier suspicions that Chinese workers were replacing African ones were unfounded and China has a good reputation for major infrastructural schemes, such as roadbuilding and agricultural development. DfID has already looked at ways of working more closely with China on rural projects; I trust it will do so again. Investment in agriculture is vital, especially seen in the context of the effects of climate change—now being discussed in Durban—which hit the rural poor most of all. Is DfID doing enough to help these small producers, men and women, with agricultural extension schemes and to encourage the private sector to help finance transport and rural roads and so improve trade and food distribution?

There have been growing criticisms of land grabbing in South Sudan, Uganda and elsewhere by farms and forestry schemes, some of which are based in the UK. Multinationals are adept at evading codes of conduct and corporate responsibility although there are exceptions. Can DfID do anything to safeguard against these negative developments if they stem from British companies?

For many years I have admired the effectiveness of the International Development Association, which has done a lot for small farmers. However, I understand that even IDA is in the business of promoting private enterprise well out of reach of these farmers and perhaps at their expense. One of its loans to Mali, for example, covers the salaries of a Malian investment promotion agency. Will the Minister say whether the coalition should be supporting this kind of profit-led promotion?

In conclusion, I take noble Lords back to my original statement about public opinion. The Government have a mandate to use a very generous budget not only to bring relief from suffering but to enable the poorest farmers and many other communities to achieve a sustainable livelihood and thereby bring down the numbers suffering from hunger and the price of food as a matter of urgency. Will the Minister confirm that the Government are fulfilling this mandate? I beg to move.

13:59

[Lord Judd]

My Lords, I am sure that the whole House will applaud the noble Earl, Lord Sandwich, for having secured the debate and for having opened it so effectively. His commitment on these issues is steadfast. Like him, I greatly look forward to the maiden speech of the noble Lord, Lord Singh of Wimbledon, with all his background and experience.

I am, naturally, glad that the Government remain firm in their objective of securing 0.7 per cent of gross national income for the aid programme by 2013. However, apart from its diminishing value in real terms in the context of global financial realities, it is important to know what exactly is the Government’s definition of aid. It seems it is being repeatedly stretched to make up for cuts at the Foreign and Commonwealth Office and elsewhere.

It is interesting that the noble Baroness, Lady Northover, is to reply to the debate. She has a long-standing reputation, established in opposition, not only for advocating 0.7 per cent but of constantly underlining the importance of the quality of the aid and development provided within that objective and, very significantly, of supporting the central related policies in the sphere of international rights, finance and trade.

I pay tribute to the many NGOs, whose work on international aid and development has been a bedrock of increased political commitment by all the principal political parties. Their advocacy is of a high standard, based as it is on real front-line experience. In preparing for this debate, I have, yet again, found invaluable the insight, analyses and challenges provided by Oxfam, of which I am glad to have been a previous director, Saferworld, of which I am a trustee, and the World Development Movement.

The debate is well timed. The High-Level Forum on Aid, effectively, is reaching its conclusions in Busan, South Korea, as we deliberate here today. Can we be assured that the commitments of the 2005 Paris declaration will not be sidelined in Busan and that those commitments will be strongly reaffirmed? It is surely disappointing that, as the OECD has confirmed, while the developing countries have made significant progress on delivering the commitments of the Paris declaration, particularly in improving their planning and financial management, donor countries have made significant progress on only one of their 13 targets—that of improving co-ordination between themselves.

DfID has announced its intention to reduce the amount of UK aid spent on budget support around the world by 43 per cent. Can the noble Baroness tell us more of the real rationale for this? While aid given directly to the budgets of developing countries may, of course, sometimes cause difficulties in measuring instant results, it can surely be an excellent means of achieving sustained positive outcomes. It allows developing countries to make long-term investment in the core services, such as the health and education systems. Is there not a danger that, in overstressing aid for specific targeted projects compared with demands for measurable short-term outcomes, the sustainable development process will be distorted and undermined? Is DfID, in its plans, and with its preoccupation—some might say obsession—with targets, getting that balance right? How will the indispensable long-term funding to establish essential supporting systems be ensured? Frequently the real sustained effect of aid can be measured only in the long term. That is certainly my experience of years of involvement.

Seven million people are already facing acute food shortages in Niger, Chad, Mali, Mauritania, Nigeria and Burkina Faso. This indicates that next year there will be a massive problem of food availability and the danger of widespread famine will become acute. The danger is all the greater because people have not yet had the opportunity to rebuild their assets and increase their resilience after the severe crisis of 2009-10. If in a so-called normal year 300,000 children die in the region from malnutrition-related causes, any small addition, whatever form it may take, can push these catastrophic figures disastrously higher still.

Greatly to their credit, the Governments of Niger and Burkina Faso have already signalled they will need assistance. In the light of these indications and clear warnings, and taking into account DfID’s commitments made in response to the challenging Humanitarian Emergency Response Review of the noble Lord, Lord Ashdown, to strengthen anticipation and early action in disasters and to build resilience to disasters, what exactly are the Government doing convincingly to apply these commitments in the grim realities once more accumulating in the Sahel?

Meanwhile, climate change poses a grave threat to food production and to the livelihoods of the poorest communities around the world, most especially of women, who rely on being able to grow their own food to survive. Changing rainfall patterns, longer and more severe droughts, floods and rising temperatures all present acute challenges to farmers and make it difficult for them to know when best to sow, cultivate and harvest their crops. This will inevitably eventually lead to vast movements of people, aggravating the pressures of migration and provoking instability.

This makes the events at Durban all the more relevant and urgently demanding. An effective global agreement to tackle climate change can no longer be delayed. Obviously this must include provision to assist the poorest countries and the most vulnerable people within those countries. The green climate fund is an imperative. What exactly are the Government doing to pursue innovative sources of finance to fund it—for example, a levy on global shipping or a tax on international financial transactions? As we listen to the Chancellor it seems very little, if anything. Indeed, there seems to be an entrenched ideological opposition to some of these proposals. This is inexcusable. How does the noble Baroness, with her past advocacy of precisely such measures, feel about that as the position of the Government? Do not all negative arguments about taxes on financial transactions, for example, fall into insignificance against the developing human nightmare? A minute rate of tax on financial transactions could produce very large resources for the battle for humanity.

One of the greatest obstacles to the implementation of the millennium goals on schedule is certainly the 1.5 billion people who live in states affected by conflict and fragility. I understand that, in response to this, a new deal has been proposed at the High Level Forum this week. Can the noble Baroness confirm that this is indeed the case and that the UK is meaningfully and not just rhetorically behind it? I gather it has five objectives: fostering inclusive and legitimate politics; establishing and strengthening people’s security and justice; promoting employment and livelihoods; ensuring fairer social services delivery; and better financial management. I, for one, would be cheered if all this can be confirmed. If it is agreed that aid in more fragile states should focus on achieving peace, it will mean that ensuring that conflict, security and justice issues, which have been absent from the current MDG agenda, are brought fully into the discussions also about what follows MDG in 2015.

Success in moving forward will depend upon the new deal becoming not only a deal between national governments and international donors but a deal between them and the people living in conflict-affected communities, ensuring that these people themselves have genuine ownership of development and peace-building processes. If countries are to make a successful transition to peace, it will be essential that dialogue processes are genuinely inclusive and sufficiently independent to bring in a meaningful range of differing perspectives and to keep the most sensitive issues on the table. The new deal must on no account limit itself to legitimising the use of aid for “train and equip”-style security and justice programmes. If it is to support sustainable peace, it must focus on not only the capacity of state institutions but on their culture and professionalism and how they behave. It is vital that they also focus on what matters to the people living in conflict-affected countries—less exposure to violence, greater confidence in their safety, access to justice, services and livelihoods, and political freedom and inclusiveness.

If I have become convinced of anything in a lifetime of work in these spheres, both in Parliament and outside it, it is that sustainable peace cannot be imposed or manipulated. It has to be built from the community upwards; building in widespread inclusiveness in the process and a real sense of ownership of that process and its outcomes by the parties to the conflict is absolutely essential. After all, the process began to move in Northern Ireland when the political wing of the IRA became part of it.

14:11

[Lord Roberts of Llandudno]

My Lords, I appreciate the opportunity given us by the noble Earl, Lord Sandwich, to discuss once again this crucial issue. I was reading recently about the potato famine 150 years ago in Ireland and how 1 million people starved to death there and 1 million more emigrated. There was such poverty in some of the south Wales valleys, and then there was the cotton famine in Lancashire and its horrendous consequences. In many other places, such as the Highlands with its crofting problems, we realise that we ourselves have in the past been touched by such poverty. Possibly it is comparable to the worst poverty that we can see in the world today.

We have people who are humane and want to move in and help those in need. Sometimes the need arises because of the scourge of diseases, as in Africa at present, or the failure of the crop year after year, as has happened with the potato crop in Ireland—or else you have the greed of mine owners or mill owners or others who are the masters of their communities. There are so many reasons and often it is those reasons, some of which are very presentable, that cause such hardship for millions and millions of people. In the mid-1930s, the Duke of Windsor, then the Prince of Wales, visited Merthyr Tydfil and other places in south Wales and saw the devastation and said, “Something must be done”. It is easy to say. Today we see the Horn of Africa and the devastation in parts of Asia and the tremendous need in other parts of the world. Something must be done. In the south Wales valleys that something was done by intervention from outside. Often the people who are weakened and have no more motivation left—people who do not even have the energy to think of their futures—rely on outside aid.

I welcomed the other day the autumn Statement, which really confirmed this 0.7 per cent for international aid. We need it and it must be used, but we can also remember our tremendous debt to voluntary giving—and the noble Lord, Lord Judd, was part of that great movement. CAFOD, Oxfam, Save the Children, UNICEF and Christian Aid have done tremendous work, as have countless smaller charities that we may not know anything about, in parishes and communities—people who see the concern. I remember being involved about 20 years ago in the Ethiopian famine, when we had to thank the press and television for the way in which exposure at that level made people want to give. I remember standing with a milk churn in Llangollen after one such programme had shown the great need from some area in the world, and people queued up to donate.

I remember also how we tried to get pure and safe drinking water for children in Rwanda. We had the appeal and there was some individual sacrifice. I wish I had a copy of the letter with me now from one lady from south Wales, who said:

“All my wedding presents have gone. I am living in one-room accommodation and all I have is the vase that my husband gave me on my wedding day. I am selling that vase because the need of the children of Rwanda is greater than my need”.

That is sacrificial giving. We should always say “Thank you” not only to the big organisations but to those whose hearts are, to use a Methodist phrase, strangely warmed when they see the need and want to respond to that need.

While some people are giving and giving most generously, this week I have heard of one or two examples that I dare not mention in this Chamber, which show how people respond to the needs and suffering of other people. Some are giving but others are taking and are trying to make a profit from the most vulnerable people and the poorest nations in the world. I am grateful to the Guardian newspaper for showing last weekend how venture capitalism had become vulture capitalism and how certain organisations and finance organisations are trying to milk the situation for their own benefit and the profit of their own people.

I have a reference to the Democratic Republic of Congo and the demand by venture capitalists for the repayment of £100 million debt, which is equal to giving 500,000 children schooling or giving 8 million people safe drinking water. The choice is there, but somehow the compassion of ordinary people is often not shared by these organisations.

I am grateful to a Methodist colleague of mine, Dr Mike Long, in Llandudno, who recently researched the situation in Zambia. I will not go into the details, and most noble Lords know it in any case. In 1979, Zambia was given credit by Romania for $15 million to buy agricultural machinery and vehicles. Zambia was unable to repay. We should remember that life expectancy in Zambia is 39.8 years. This debt mounted and in the end the demand was for $53 million by one of these venture capitalist organisations. It has been reduced to $15 million in a court case. But the people of Zambia find it so difficult.

In Lusaka, a declaration by the Christian churches of all denominations stated that:

“Zambia cannot pay back because the debt burden is economically exhausting. It blocks future development. Zambia will not pay back because the debt burden is politically destabilising. It threatens social harmony. Zambia should not pay back because the debt burden is ethically unacceptable. It hurts the poorest in our midst”.

We—the majority—give, and others are ready to reap the benefit from the most vulnerable and poorest people and nations of the world.

I thank the Labour Government of 2010 for their Debt Relief (Developing Countries) Act 2010, which might clear the debts of 40 of the poorest nations in the world. However, there are loopholes, one of which is Jersey. I hope that the Minister, who is a noble friend of mine of long standing, can give me some assurance that Her Majesty's Government will somehow or other try to bring the courts of Jersey into the embrace of that Act.

With those few words, I therefore say that we are joining other nations to give the poorest countries in the world a fresh start by breaking the chain of poverty. For many, it will be a beginning that they never dreamt was possible.

14:20

[Lord Harries of Pentregarth]

Like other noble Lords, I am grateful to the noble Earl for initiating this debate on such an important subject. It will be a particular pleasure to be able to listen to the noble Lord, Lord Singh.

I strongly agree with many of the points made by previous speakers, but I shall focus exclusively on the second part of the Motion regarding the proposals on the situation of the Dalits. Everyone is aware in general terms of the situation of the Dalits—the former untouchables—but it is difficult for us fully to take on board the extent and seriousness of their plight. To take, for example, the extent, more than 260 million people in the world continue to suffer from practices linked to caste, and of those, 170 million are Dalits living in India. As to the seriousness of their situation, more than 200 years ago William Wilberforce described what he referred to as “the cruel shackles” of the caste system as,

“a detestable expedient … a system at war with truth and nature”.

Since Wilberforce’s time, one form of slavery has been abolished, as we know, but not that associated with caste. It is properly described as a form of slavery. As the Prime Minister of India, Dr Manmohan Singh, said in 2008,

“caste is a blot on humanity”.

He described it as being parallel to apartheid. Manual scavenging, of which all noble Lords have heard, is just one of the many forms of degradation to which Dalits are subject.

In the light of this, it is obvious that it is not possible to consider issues of education, health and poverty reduction in India or other countries such as Bangladesh or Nepal where the caste system operates without highlighting and prioritising in policy terms the issue of caste and its terrible effect on the most vulnerable. Studies show that Dalits suffer quite disproportionately in education at every level, in health at every stage of their lives, and in access to benefits. There is absolutely no hope of achieving the millennium development goals without ensuring that every aspect of development policy takes fully into account the dire effects of caste with an appropriate focus on those suffering most as a result. DfID is of course aware of this, but does that awareness drive every aspect of policy in a concerted and consistent way and is the effect of this monitored?

More specifically, does DfID explicitly address caste exclusion across all the civil society programmes that it funds, developing clear benchmarks and indicators to monitor this? Furthermore, does DfID integrate social exclusion into all its programmes, beyond those of civil society? Does DfID support excluded groups in their advocacy and help them increase the accountability of Governments to the most excluded? In order that we might be clear that we are practising what we are preaching, does DfID ensure that in its own employment practices it has a team that is fully inclusive and representative? Following on from that, does DfID, throughout its India office, build understanding of social exclusion? Without positive answers to these and other questions, all attempts at poverty reduction will be undermined, as a growing body of research increasingly shows.

DfID also has a key role to play in influencing other donors, such as the Asian Development Bank, the European Community, the World Bank, the UNDP, and so on, better to understand and address these issues. DfID has a key role in ensuring that all UK NGOs and foreign investors adopt best employment practices in their policies. There is evidence in the past of some employment agencies used by NGOs excluding certain Dalit and Muslim names before passing on selected candidates.

I have mentioned that there are at least three key areas—education, health and access to benefits. I know that the noble Lord, Lord Avebury, will address education in particular and how Dalits are heavily disadvantaged in every aspect of education. I shall not therefore deal with that. However, I will briefly mention another area—children’s health. A recent study of children under 12 being treated showed that Dalit children were discriminated against in a variety of ways. By every indicator, this discrimination was shown to affect between 80 per cent and 90 per cent of encounters between Dalit children and those charged with providing them with some kind of medical help. I shall give some small examples. Medicine was placed in the hand without the person giving it actually touching the hand; or the medicine would be put on the floor or window sill; they were given less time with doctors and nurses; and the children were called names and treated roughly. It is not surprising that infant mortality—high in India as a whole—is particularly high among Dalits.

There is another particular area that the noble Baroness, Lady Cox, would have highlighted if she had been able to speak in the debate. I refer to the human trafficking and slavery of India’s Dalits. For example, there may be as many as 20 million people in Indian bonded labour, of whom between 80 per cent and 98 per cent are Dalits. In addition, children, particularly Dalit children, are being trafficked into domestic servitude and prostitution, with 40 per cent of India’s sex workers being children. Then there is ritualised prostitution and bride trafficking. In all these areas, it is Dalits who are most at risk and find it almost impossible to obtain redress. Often they do not have identity papers, they have difficulty being believed, and—believe it or not—a third of rural police stations do not even allow Dalits to cross the threshold. DfID has done well to institute the human trafficking in south Asia programme, but at the moment its resources are too small to make the impact that is needed—not just in cross-border trafficking but in India itself.

My point is therefore very simple. It is impossible to tackle the subject of poverty, particularly in India, Nepal and Bangladesh, without highlighting and prioritising the issue of Dalits and expressing those priorities in real policy terms. DfID is aware of this, but is that awareness driving every aspect of policy in a concerted and consistent way? Is the effect of this policy on the Dalits being properly monitored?

14:29

[The Lord Bishop of Ripon and Leeds]

My Lords, I, too, am deeply grateful to the noble Earl, Lord Sandwich, for achieving this debate and for his powerful opening speech emphasising the positive contribution that aid can make to breaking the “chains of poverty”, to use the phrase of the noble Lord, Lord Roberts. Yet, we heard from the noble and right reverend Lord, Lord Harries, of that continuing failure to tackle discrimination based on work, descent and caste. I therefore welcome the renewed emphasis on the situation of Dalits in south Asia, and look to ways in which international development policy can be used to affirm and develop human rights for those who are so savagely damaged by descent and caste.

I hope that we will not be lulled, if that is the right word, into thinking that this is a problem for India and south Asia alone. We need to watch the ways in which such discrimination exists in other societies, including our own, and I therefore welcome the determination of the UN Decade of Dalit Rights to identify and connect with the diaspora of those affected by discrimination based on descent and caste.

Like others, I want specifically to welcome the Government’s defence of their international aid budget of 0.7 per cent of GDP even though that involves some diminution in the actual amount of aid. But to defend that figure through tough economic times is a major tribute to the work of the Minister and of the Government as a whole. I hope that she and they will hear our congratulations on achieving that continued figure. I hope that in her reply the Minister will report on what she expects of the high-level forum on aid effectiveness in Bhutan, to which others have already referred.

I also welcome the establishment of the department’s faith working group, which recognises the importance of faith in many communities around the world and the need to explore how faith can contribute to the success of policies tackling discrimination—not just the work of faith bodies in this country, which I acknowledge and am very grateful for, but the contribution made by religious organisations and faiths throughout the world. In that context it is particularly good to be able to be part of a debate in which the noble Lord, Lord Singh of Wimbledon, is taking part, someone from whom I and many others have learnt much of the place of faith in societies all over the world. I should be grateful for comment on what progress the faith working group has made and whether any concrete steps have been taken as a result of its work.

The UK has a strong record on seeking an international aid policy which will have real impact. In particular, I want to both stress and encourage the new moves being made, not just here but throughout Europe, for greater transparency in the extractives sector. Tearfund’s recent report, Unearth the Truth, gives examples of the need to use natural resources for the real benefit of our poorest communities across the world. Exports from extractive industries are worth something like nine times the value of aid to Africa. Tearfund cites Sierra Leone and also Colombia as countries where conditions could be transformed if the revenue from the extractives sector was reinvested in meeting millennium development goals and in providing basic services such as health, water and sanitation.

I hope that the Minister will be able to comment on how we can have a more transparent picture of the way in which the extractives industry affects relationships with some of the poorest countries of the world and ways in which aid can be directed so that it can provide support and encouragement in the development of those countries.

The condition of the Dalits and of others discriminated against by work or descent must be a wake-up call for all those who believe in fundamental human rights. I am grateful for the stance of successive Governments in the crucial use of international aid to promote the care of the poorest in our world and I look forward to a renewed expression of the Government’s commitment to the breaking of those chains which bind not just those who are themselves in a situation of poverty but all of us in the worldwide culture in which we share.

14:36

[Lord Singh of Wimbledon]

My Lords, it is with a feeling of humility and trepidation that I rise to speak for the first time in this House, particularly after having listened to the earlier words and speeches that were put so movingly.

I shall say a few words on where I am coming from, and what I hope to bring to the House. I started life as a mining engineer, but not long after qualifying, was told by the then National Coal Board that British miners would never accept a Sikh mine manager. I was offered a job in the scientific department but politely declined, seeing it as an opportunity to go and see a bit of India, a country that I left as an infant. Surely people there would welcome me. They did not. I was seen as a Punjabi, and not welcome in the mines of West Bengal, but I stubbornly dug my heels in and gradually became accepted.

I returned to England to take up a post in a civil engineering management consultancy, and though there was some initial hostility, I was soon respected and valued and even assisted in taking a year off to do an MBA. It was while I was with this company that I noticed a strange end-of-day ritual that made me see the lighter side of our attitude to those we see as different.

We were on the fifth and sixth floors of an eight-storey building. Above us were the overseas civil engineers, who clearly thought themselves superior. They would go about with briefcases carrying labels of exotic places visited. At the end of the day they would get into the lift to go home. When the lift got to our floors, a curious thing would happen; those inside would unconsciously stick out their stomachs to give the impression that the lift was a little fuller than it actually was. We would barge in none the less; the stomachs would gradually recede and we all became fellow work colleagues.

The lift would then move to the floors below, occupied by the Department of Health and Social Security. We all joined in in sticking out our stomachs to deter what, in our bigotry, we saw as a lower form of life entering our lift. However, again, they took no notice and got in; the stomachs would grudgingly recede and we all got to the ground floor as fellow human beings—until the next day.

This strengthening of common identity by looking negatively at others is all too common. We see it all too often with a group of people who have been speaking together on a street corner. If one goes away, you can be sure that those remaining will often make some negative comment about the person who has just left, to strengthen their newfound sense of unity. We see it in the behaviour of football crowds. In its most serious form, it can lead to the active persecution of those we call different.

Guru Nanak, the founder of the Sikh faith, saw it in the India of his day some 500 years ago. He reminded us that we are all, men and women, equal members of the same human family and he criticised all notions and distinctions of race, caste or gender. These are 21st-century values being put forward in the 15th century. This theme has been central to my own life: from campaigning against apartheid in South Africa when it was unfashionable to do so, to supporting dissidents in the former Soviet Union and working with Amnesty International, and others, for greater social and political justice for all members of our human family. In this context, I fully endorse all the comments of the noble and right reverend Lord, Lord Harries, about Dalits, and the other remarks made by other speakers.

Some of us are quick to criticise some aspects of life in the United Kingdom but when we go abroad, even to our countries of origin, we see that this country is way ahead of much of the rest of the world—light years ahead in its freedoms, and its understanding and respect of different cultures and ways of life. Our country can take justifiable pride in the way that it has welcomed many from other lands and the lead it has taken in extending human rights, social justice and economic well-being to other parts of the world.

Moving to the central theme of today's debate, some 10 years ago I was invited to join a working group of DfID. I went as a cynic but was soon converted by the passion and genuine commitment of all those involved including, as has been mentioned, many voluntary organisations. I persuaded Sikhs to buy bonds of the GAVI alliance for the mass vaccination of 500 million people and urged the community to support the humanitarian work of DfID with its characteristic generosity. We also established Khalsa Aid, a Sikh charity.

At this time of economic recession, it is tempting to look to our need and ignore the suffering of others; in biblical terms, to cross to the other side of the street. Yet, as the continuing success of Children in Need showed, this is not the way of the British people. The euro crisis, economic difficulties in the United States and the emergence of new, major competitors also remind us that our economic future is inextricably linked to that of other nations, including the very poor. Britain is unique in the way it has led on many issues of justice and in the fight against poverty. It is a tribute to Britain that we are continuing to give assistance, with international development the highest priority. In the past year, Britain's development budget of just short of 0.6 per cent of GDP helped to train more than 95,000 teachers, build or refurbish 10, 000 classrooms, train more than 65,000 health professionals and provide clean drinking water to more than 1.5 million people.

In addition to the ethical arguments, there are strong economic and geopolitical imperatives for helping the poor climb out of poverty. These include the development of soft power and influence in key areas. By 2050, Africa will be a key trading partner, rich in resources with a population of over 2 billion. Understandable reservations about the misuse of aid should be tackled by more stringent checks and never be used as an excuse for doing less or doing nothing.

I could go on, but I am conscious that a maiden speech should be brief. Before I finish, I would like to thank your Lordships for your extraordinary kindness in making me feel so welcome, with particular thanks to the noble and right reverend Lord, Lord Carey, and the noble Baroness, Lady Kennedy, in introducing me to your Lordships.

14:45

[Lord Avebury]

My Lords, I am particularly delighted to be the first to congratulate the noble Lord, Lord Singh, on his thoughtful and practical maiden speech, graced as it was with touches of humour. The noble Lord and I are old friends from years back, so it gives me particular pleasure to welcome him to this House today. He has had a very distinguished career, not only as a chartered engineer and management consultant—backgrounds that I share with him—but as an effective promoter of interfaith understanding, for which he received the Templeton Prize in 1989. The noble Lord was also awarded the interfaith medallion for services to religious broadcasting in 1991.

The field of work in which I have known him best is in his services to the prisons. He was the Sikh representative on the Chaplain-General’s consultation with other faiths back in the mid-1990s. When that was developed into the present Chaplaincy Council he continued to serve on it as the Sikh adviser to NOMS, in which capacity I know he has made a significant contribution—not always on the side of the establishment. The noble Lord has been the editor of the Sikh Messenger since 1984 and director of the Network of Sikh Organisations since 1995. He brings wisdom and the insights of the Sikh faith to our deliberations based, among other principles, on sharing with others whose needs are greatest and the equality of all human beings, as he mentioned. We look forward with eager anticipation to hearing from the noble Lord often in the future.

The noble Earl, Lord Sandwich, has given us a welcome opportunity of looking at DfID’s policy on aid to India and what we are doing to help the Government of India in promoting equality, particularly for the most severely disadvantaged communities. Even though untouchability was formally prohibited by the Constitution of India in 1950, it is so firmly embedded in the culture that 60 years on, the 170 million Dalits still endure extreme forms of social and economic exclusion and discrimination, as we heard from the noble and right reverend Lord, Lord Harries. We need to consider whether, and if so how, DflD's policies could be geared towards helping India to eliminate the severe handicaps that Dalits have to endure, perhaps bearing in mind the saying of the Guru Nanak, the founder of the Sikh religion that, in his mother's womb no man knows his caste.

We would agree that DfID's work should be refocused on the poorest, and that concentrating aid on state partnerships in Bihar, Madhya Pradesh and Orissa, but with some elements stretching to five other states, is a simple if rather crude way of achieving that objective. The Dalit Solidarity Network-UK and the National Campaign on Dalit Human Rights in Delhi urge that we review our policies from a human rights perspective, in light of the fact that Dalits are not benefiting proportionally in the remarkable economic advance being made by India as a whole. We should therefore address caste-based exclusion and deprivation across the whole of the civil society programmes that we fund, developing clear benchmarks and indicators to monitor progress and ensure that we are getting value for money, as the noble and right reverend Lord, Lord Harries, has also said.

I doubt that there can be, as the Government response to the Select Committee report implies, an abrupt transition from a level £280 million yearly aid programme from now until 2015 to a partnership based on critical global issues. I would be grateful for an assurance that projects specifically geared towards alleviating caste discrimination will continue to be supported. UNICEF, for instance, has a knowledge partnership with the Indian Institute of Dalit Studies to unpack policy concerns of relevance to children. It is looking at the barriers that limit access by Dalit children to healthcare, which were also mentioned by the noble and right reverend Lord, Lord Harries, leading to high levels of morbidity and mortality in these communities.

The Select Committee says that DfID's new Indian programme should have a strong focus on reducing child and neonatal deaths, and the Government agree with them—although they also agree that resources should be switched from health, which now absorbs 40 per cent of the budget, to sanitation, to which only 1 per cent is allocated.

Although India has reduced the under-five mortality rate from 118 to 66 per thousand births between 1990 and 2009, it is not on track to achieving the reduction by two thirds of this rate by 2015, called for in the millennium development goals. In the UN’s 2010 report on the MDGs, it says that revitalising efforts against pneumonia and diarrhoea, while bolstering nutrition, could save millions of children’s lives. The Global Alliance for Vaccination and Immunisation, GAVI, referred to by the noble Lord, Lord Singh, and to which the UK is the largest contributor in the world, is funding the adoption of vaccines against these diseases in an increasing number of countries. We promised $485 million out of the total of $1.5 billion subscribed at the pledging conference in London last June, believing, as we do, on solid evidence that this is one of the most cost-effective ways of spending aid money to help attain MDG4.

Paradoxically India still has the largest number of unimmunised children globally—7.2 million in 2010—even though it is the world's largest manufacturer of vaccines. It has introduced measles vaccine in about half the states and is making some good progress with Pentavalent, but only in two states as compared with the original plan for 10; while as yet it has no plans for rolling out vaccination against pneumococcal disease and rotavirus, which are the two biggest killers of children worldwide.

A delegation from the APPG Against Childhood Pneumonia, of which I have the honour to be co-chair, visited Bangladesh in November and was told it was on course to roll out all three of these vaccines nationally over the next few years. Penta is already being delivered, as the delegation saw on a visit to a village 50 kilometres from Dhaka. GAVI estimates that the second measles vaccine will start in 2012, followed by pneumococcal conjugate vaccine in 2013 and rotavirus in 2014.

It is not therefore altogether clear to me why India lags behind on saving children's lives when the potential is so clearly there. Will my noble friend say whether the plan for Pentavalent has been scaled back because GAVI had yet to be satisfied that vaccines could be effectively delivered and administered in India? Will she also say whether DfID can help India to solve any of the logistical problems that are delaying these programmes? I gather that more than 25,000 cold chain points have been established, but that active management of their proper functioning and timely repair is critical. If this is blocking approval by GAVI of the programmes, is it something on which DfID could offer technical assistance, bearing in mind our very substantial investment in GAVI itself?

I would be grateful if my noble friend could also say what monitoring there is of the existing immunisation programmes in Bihar and Madhya Pradesh where less than 50 per cent of children were covered in a 2009 survey, and in Orissa where the coverage was under 60 per cent, to ensure that Dalit children were being protected, at least in proportion to their numbers. If, as one might suspect from the UNICEF study already referred to, discrimination and the fear of discrimination inhibits access to healthcare generally for Dalits, the probability is that the existing programmes are not reaching these deprived people. In Bihar, for instance, the reason given for the partial information of a third of those missed was an awareness and information gap, which was far more likely to affect Dalits than the rest of the population. Would DfID be able to help to design local awareness-raising campaigns in our three target states, possibly with the help of experts in communication from the Dalit diaspora?

The Select Committee recommended that DfID should fund the collection of data on caste, tribal and religious affiliation of those who access maternal services or have institutional deliveries, but the Government's response was that adequate disaggregated data were available without further studies. Are they equally confident that disaggregated data exist for access to vaccination and immunisation programmes and if not, will they consider funding a pilot study in the three target states?

On education, the Select Committee had nothing to say about Dalits except indirectly, where it particularly welcomed DfID's new focus on girls' education. In their reply, the Government said they would use the opportunity of India's request to support their flagship secondary education initiative to look at,

“ways to help get more Dalit girls into secondary school and ensure they can afford to stay there".

According to a UNICEF study from 2006, the dropout rate of Indian Dalit children from primary education was 44 per cent, and the National Commission for Scheduled Castes and Scheduled Tribes says that for girls this rises to an astonishing 75 per cent. There is no doubt that Dalit girls suffer even more extreme discrimination, prejudice and persecution than boys. Stories about the rape, violent assault and murder of Dalit girls appear regularly in the media. To mention one: when five boys were frustrated in their attempt to rape a 17 year-old Dalit girl in Lucknow last August, they poured kerosene over her and set her on fire. AsiaNews reported the comment of Anulraj Anthony of the Justice and Peace Commission of the Catholic Bishops Conference. He said that two aspects revealed the vulnerability of the victim: "She is a girl and a Dalit". So it hardly surprising that vulnerable girls from these communities have an uphill struggle to get anywhere in the educational system.

The UN Special Rapporteur on the Right to Education has made special reference in his 2006 report to the needs of girls from communities that experience discrimination, and says that literacy is as low as 9 per cent for the Mushahar women of Bihar state. Surely one way of improving Dalit girls' access to secondary education is to reduce their dropout rates from primary education and to promote MDG2A, to ensure that girls as well as boys complete a full course of primary education. The empowerment of women everywhere starts with literacy, and this is an absolute imperative in a society where there are ancient cultural barriers to the equality of particular communities.

We have our own problems here with deprivation of children from Gypsy and Traveller communities, and I am often struck by the parallels with the caste system. So it is not in a spirit of criticism that I want DfID to do more to help India to address the acute disadvantage suffered by the Dalits in health, education and, indeed, access to public services in general. It would be presumptuous to say that we can make more than a minor contribution to helping them to eliminate dysfunctional cultural norms that have persisted for millennia, but I hope that our aid to India can be concentrated on helping it to meet its own objectives.

14:58

[Viscount Craigavon]

My Lords, I am grateful to my noble friend Lord Sandwich for obtaining this Cross Bench day debate on this subject and allowing our noble friend Lord Singh to participate. Some of us are more familiar with him on the morning “Today” programme, when we are not entirely awake, hearing his few words of wisdom. Now I am fully awake, I realise that his words are even more wise. I believe we should be grateful to the present Government for the direction of progress by this department since the election. That obviously includes the funding commitments, even with the latest adjustments.

The structure of the millennium development goals allows us to make international comparisons, and I am aware that the Commonwealth representatives are currently discussing MDGs in a conference at Westminster. One of their concerns is the fast-approaching deadline of 2015, and what happens after that. In this large area, I would like to focus particularly on the importance of MDG5, and mainly on 5B, which is about achieving universal access to reproductive health by 2015. We should be grateful that the Minister, Andrew Mitchell, even in his shadow role before the election, appreciated the importance of this field of reproductive health; and we are very fortunate now to have as a spokesperson in this House, the noble Baroness, Lady Northover, whom we know—as the noble Lord, Lord Judd, said—is an expert in the whole field of international development as well reproductive health. I also welcome the noble Baroness, Lady Kinnock, to these debates from her Front Bench.

As I am sure the noble Baroness, Lady Northover, will confirm, we had good news on Tuesday from her Under-Secretary of State, Stephen O’Brien, at a family planning conference in Senegal, where DfID has committed £35 million of new money for contraception in an area of the world that is particularly able to benefit from it. It is helping to save thousands of women’s lives. He is quoted as saying:

“Family planning is a smart, simple and extremely cost effective investment of aid. It is at the centre of all our development work and we are going to ensure more women are given the choices they want and deserve”.

That statement is very encouraging, and I hope that it leads to further such initiatives, as well as informing the practice of the other parts of the department. That is a very good instance of one of the main concerns, which is meeting the unmet global need of an estimated 215 million women who want to avoid or delay pregnancy, but who have no access to any effective methods.

To return to the department as a whole, we have recently had the opportunity to read the financial management reports of the Auditor General, the Commons Public Accounts Committee following that, and the reports and recommendations of the Independent Commission for Aid Impact, which was initiated by the department. Parts of these examined such things as effectiveness, value for money, leakage through fraud or corruption, running costs, delivery chains and suchlike. This is not the place to follow up those considerations in detail, but it is useful to have an independent opinion on such things.

Even on a cursory reading, one realises the full complexity and problems of successful and effective delivery, especially into other less developed countries, of the services required. One of the issues raised, partly in the context of bilateral versus multilateral spending, was the rather unusual,

“pressure to spend increased resources”,

which was mentioned by the noble Earl, Lord Sandwich. When money might be available, but the skills, facilities and manpower to deliver bilateral aid programmes effectively are not there, it might be easier to support multilateral programmes instead, when effectiveness and value for money would be more difficult to assess.

The large proportion of money that is required to be donated through EU channels can also suffer from a lack of accountability. I understand that a new agreement is up for negotiation, and I hope that we can take the lead among our European partners in helping to frame new uses for that money, over which we can have more oversight. Maybe the noble Lord, Lord Hannay, who will follow me, will be able to add to that,

I mentioned MDG5 at the beginning. That is, by common consent, the most off-target of the MDGs and, given that the target year is 2015, the hope now is that these aims will continue to be pursued beyond that year. Some progress in that MDG has recently been reported. The recent figure of 500,000 maternal pregnancy-related deaths, has now been reduced to 360,000. According to the Guttmacher Institute, 30 per cent of such deaths can be reduced by the provision of good family planning.

Normally in addressing this subject I try to avoid what one might call the numbers game. However, recently we have had the rather stark reminder of the world population reaching 7 billion, with attendant future upward projections. That has resulted in journalistic and more learned diagnoses of how serious or otherwise that milestone is. As we invoke population numbers as a contributing factor to climate change, we must always be aware that our western environmental footprint is many times that of most of the developing world. For example, one figure is that our footprint is 20 times more damaging to the environment than an Indian’s. The Indian Health Minister said that the birth of the 7 billionth child was a great worry and told the Times of India that all celebrations should be put on hold until the population stabilises. As we know, that is some way off for India.

I am always astonished when people casually mention, quite commonly, the inevitability of wars being caused by the shortage of water. There are many other essential commodities in danger of becoming scarce, particularly with the increasing demand from countries such as China, which understandably want to raise their standard of living. Last weekend, the Times had an article with the headline:

“Standing between the world and starvation”.

It was about the increasing price of and demand for phosphorous fertiliser being produced in China and its inevitable exhaustion, which is, admittedly, some years away. However, that is the basis of what might be unsustainable agriculture in many parts of the world, which often includes GM crops.

I am afraid that it might be human nature to hope for some magic solution to all these problems—that is, until they are palpably upon us. It is similar, but even more so, with the population numbers. If there is any magic solution there, it is simply the offer of choice, mainly to women, rather than any talk of coercion, as there might have been in the past. This is part of the sustainability debate, and I hope that the department can take it as its task to lead us in anticipating such crisis situations in the future.

When earlier I said that I normally avoided talking about numbers in this field, it was partly because of my belief that, even more importantly, we should focus on the quality of life, rather than quantity. In marking the 7-billion milestone in debates in the UN in New York, the rather unfortunate phrase “the bottom billion” seemed to emerge. It refers to the poorest, who have little or no access to basic needs. While not wishing to give currency to that phrase, maybe we should be as concerned about them as we are about the increasing numbers. It is encouraging that the department now seems to be targeting a reduced number of poorer states, as well as identifying fragile states for special attention.

I referred earlier to people expecting magic solutions to save us from ourselves. Sometimes that takes the form of comforting myths as to why we need not address population growth seriously. As a member of the All-Party Group on Population, Development and Reproductive Health, I hope I may recommend a recent publication, which was co-authored by one of its vice-chairs, Richard Ottaway MP, who is also chair of the Foreign Affairs Committee in the House of Commons. It is a highly readable and attractive publication, called Sex, Ideology, Religion: 10 Myths about World Population Growth. This was published about a month ago and will shortly be available online on the group’s website, which is on the All-Party Group’s list. It deals more concisely and eloquently than I can now with why we should continue to take population growth seriously. I am sure that the department will continue to do that, along with its many other responsibilities, which we have heard about today.

15:08

[Lord Hannay of Chiswick]

My Lords, I warmly congratulate my noble friend Lord Sandwich on obtaining this debate on international development policy. I sometimes feel that we devote too little time to foreign affairs and development as we apply ourselves to our primary task of scrutinising and improving the Government’s legislative proposals. I never felt that more strongly than yesterday, when the Foreign Secretary’s Statement on relations with Iran was not repeated in this House. I have no intention of diverting this debate on to that ground, other than to say that it was a lamentable decision. If we want to be regarded as a mere superfluous appendage to the other place, that is the surest way to go about it.

I should also like to congratulate my noble friend Lord Singh on his extremely graceful maiden speech. Ten years ago I chose to make my maiden speech in a debate on international development, so I cannot but congratulate him on his choice of subject matter.

The coalition Government’s decision to ring-fence our overseas aid from the spending cuts was a courageous one when it was first made and is all the more so now that they are sticking to it in the face of much discouraging economic news. Through all the cacophony of press criticism of that decision, I have yet to hear one respectable argument for making developing countries far poorer than we are suffer because of an economic crisis for which they have absolutely no responsibility. In any case, they are already suffering from the slowing of the global economy.

I am certainly not going to cheer the decision of two days ago to reduce the sums earmarked for aid in the latter part of the current spending period. However we are—and this I do welcome—sticking to our Gleneagles and UN commitments. That 0.7 per cent of our gross national income is going to be a good deal less than was earlier anticipated is, I fear, an ineluctable fact. I hope that the Minister replying to the debate will be able to say what we are doing to hold other developed countries to their Gleneagles and UN commitments, which some of them are missing by a very wide margin indeed. We should not spare their blushes, however much they would like us to do so. What plans do we have to use next year’s G8 and G20 meetings to get those commitments back on track?

I was encouraged to hear that the Secretary of State for International Development had recently been to China to discuss the scope for co-operation between us in helping developing countries. Can the Minister say something about the outcome of that visit? Did the Chinese respond positively? What sort of programmes and projects could we work on together? I hope, too, that we are working on similar trilateral co-operation with countries such as India and Brazil, which are just beginning to mount serious aid programmes. Some time back I suggested that co-operation over aid could be one of the best ways of thickening up our relations with those emerging powers. Are we doing that now in a systematic way? Brazil in particular has many links with African countries, both cultural and economic, and it has devised imaginative and effective programmes for bringing its own poorer citizens out of the abject conditions in which many of them lived, so it would surely be an ideal partner if we could agree to work together. Have we got anywhere down that road?

I return briefly to a question that I put to the Minister recently: namely, the plight of UNESCO following the lamentable US decision to withdraw all its support from that organisation when Palestine was admitted as a member. I hope that we have not concealed our disagreement with that deplorable move. Why on earth should developing countries around the world be punished for giving the Palestinians a status that is no different from that which we all, including the US Administration, believe is our right? That sort of behaviour is a throwback to the worse mistakes of the previous Administration. I know that it is mandated under US law, but that is an explanation not an excuse.

Be that as it may, I hope that when we come to consider our own future support for UNESCO we will take all that into account. I very much support the broad thrust of our policy of holding UN agencies to account for the quality and effectiveness of their development work, but no organisation can take a cut such as UNESCO has had to take overnight without a lot of disruption and some damage to its overall performance. Can the Minister say how we are planning to respond? With some sympathy, I hope.

I am sorry to disappoint my noble friend Lord Craigavon but I am not going to say anything about EU aid. Having taken the afternoon off from the festivities in the Moses Room and chosen to participate in your Lordships' debate on this aid programme, I thought that I might as well go the whole hog. Therefore, I will not refer to the EU’s programme but I will follow my noble friend by drawing attention to the 2015 deadline for achieving the millennium development goals—a deadline that is now well above the horizon.

A lot has been achieved and more certainly will be in the next three years, but it is already clear as daylight that we will fall short, and by a substantial margin. Moreover, too many of the successes have been concentrated in too few of the developing countries, so it is surely high time for us to clear our own minds about what we will aim to achieve after the 2015 deadline. I suggest that we will need a better focused, less broad-brush approach and that it should concentrate on what Professor Paul Collier has so eloquently called the “bottom billion”. I am sorry if the phrase offended my noble friend. Our decision to ring-fence our aid puts us surely in pole position to lead the search for an improved MDG mark 2. I hope that the Minister can tell us that we are already at work with that in mind. If so, can she give us some idea of where we think the main emphasis of those future programmes should be?

One other point I would like to raise is the question of failing or failed states. Last July DfID produced an excellent paper on this tricky subject which I could not fault, partly because it followed so closely the path set out in a number of preceding reports, not least that of the UN reform panel on which I had the honour to serve. Prevention is better than waiting for countries to go over a cliff and then trying to catch them in mid-air or, more often, picking up the pieces in the aftermath of the disaster. It not only costs less but saves many lives that would otherwise be lost.

Is this a proper task for development agencies or should they, as some critics suggest, concentrate exclusively on the alleviation of poverty? I suspect that this is in any case something of a false choice. The poverty of failing or failed states is in many cases dire. One of the characteristics of those states is that for purely political reasons their poverty cannot be alleviated by classic developmental policies. Are we just to let them stew? I would say not. Moreover, it is essential to demonstrate that the international community’s responsibility to protect—R2P, as it is called—is not just a recipe for military intervention but a call in the first instance for strengthened policies of prevention. Therefore, I argue that helping those states to avoid failure is very much a proper object of our development policy. I hope that the Minister will say something about how the department is following up and implementing that first-class paper of last July.

In conclusion, I very much welcome the recent decision by DfID to put more resources into the BBC’s World Service Trust. The fact that much of the World Service’s output has genuine developmental value is surely not in doubt and has been quantified. It is high time to recognise this potential as another facet of our development policy. It should have happened a good time ago, as some of us in this House urged last winter, but better late than never. Back-Benchers are supposed to get more pleasure out of criticism than praise, but I am truly pleased to speak so positively about the coalition Government’s development policies—more positively, I suspect, than some of their supporters in another place would have done. I hope that that will be some small encouragement to the Government to stick to the path they have chosen to follow.

15:17

[Baroness Kinnock of Holyhead]

My Lords, I also add my thanks to the noble Earl, Lord Sandwich, for initiating this debate, and indeed for his lifelong, strong commitment to international development. I also congratulate the noble Lord, Lord Singh of Wimbledon. He clearly brings great wisdom and experience to the work of this House, and as his maiden speech has shown today, we can look forward to many more interventions of that calibre from the noble Lord.

This is a timely opportunity to consider how best to implement international development objectives in what is, as many noble Lords have intimated, a rapidly changing and deteriorating international environment. Today, we are discussing these issues against the backdrop of faltering progress towards meeting the MDGs and in the knowledge that most of the world’s poorest countries will not meet the 2015 targets, as well as knowledge of the emerging and growing threats linked to climate change, food security, and a very disappointing record on aid.

One particular statistic has called into question whether the MDGs are actually able to reach the most marginalised, disadvantaged and hard-to-reach poor. We now know that 75 per cent of the world’s 1.3 billion poor people actually live in middle-income countries, and that in fact 20 years ago, 93 per cent of poor people lived in lower-income countries. We have seen a huge shift in that period. Does this evidence not then dictate that we need to focus more on poor people, not just on poor countries? We can tick the boxes when we use MDGs as our benchmarks, but social exclusion, environmental sustainability, and governance are just not factored in to the MDGs. The MDGs are formulated in terms of average progress, and fail to assess whether progress has been broad-based or indeed equitable. MDGs’ assessment processes tend to obscure what is happening within countries.

All the evidence shows that the most disadvantaged people—who have been referred to by many noble Lords today—are being left further and further behind. Social disparities are seriously holding back progress. With that MDG focus on aggregate progress, we will not deal with those intersecting inequalities which are so resistant to change, and when such uneven progress is being disguised by the process used by the MDGs. Meanwhile, as Ban Ki-Moon said recently,

“inequality eats away at social cohesion”.

All of this sits very well with both aspects of the debate: international development and the Dalits. The work of the Institute of Development Studies in Sussex and the Overseas Development Institute is very clear and very good indeed, and I recommend it.

In Latin America, for example, extreme poverty is much higher among indigenous and Afro-descendent populations compared with the white Latino population. The region’s poor earn only 3 per cent of the total regional income, and make up 25 per cent of the population. Remarkable progress has been made, however, by Governments in Brazil, Chile, and Malaysia.

Noble Lords have drawn attention to the plight of the Dalits, who are denied fundamental rights and opportunities. This evidence clearly makes the case for challenging discrimination which leads to entrenched poverty and indeed to terrible suffering. In Nigeria, only 4 per cent of mothers in the predominantly Muslim north-west are delivered in a health facility, compared with 73.9 per cent in the predominantly Christian south-east. In Kenya, minority ethnic groups have lower immunisation levels and higher under-fives mortality rates. A poor indigenous woman in Guatemala has one year of education compared with the national average of almost six years.

In every country and in every region, people are being denied their right to play their part in social and economic developments. This is on the basis of gender, race, ethnicity, religion, and often location—if people live far away from the capital, it is much easier for their needs to be ignored. This is systematic social, economic, and political discrimination, and leaves people literally and metaphorically at the end of the road. This calls for an expansion in developing countries of, for instance, social protection, access to decent work, minimum wages, and many other opportunities which people need if they are to see real progress.

In 2000, the millennium summit identified the need for social justice. Does the Minister agree that dealing with inequalities is the key to realising that aspiration, of which we have somehow lost sight?

Global aid budgets are critical to the achievement of the MDGs. We are obviously very clear that the achievements of this Government in getting agreement across the whole party on overseas development are extremely important, but we want some clarity on the reduction in overseas development aid. A reduction of something like £1.17 billion seems to be on the cards. That is enough to vaccinate millions of children against deadly diseases and, for example, to cover the training of midwives, who would be able to save many lives. Will the Minister give some detail on which budget lines will be affected by this reduction in funding? Bilateral programmes depend on long-term sustainable financing. Incidentally, this is a core effectiveness principle which the Government have signed up to in Busan. Will the Minister give an assurance that bilateral funding for country programmes will not be reduced?

Will the Minister perhaps also indicate whether the World Bank allocation will be reduced? In the context of the Durban conference, will he clarify whether it is the intention to take money for climate change adaptation and mitigation? Will the Government give an assurance that this will be additional money and that it is not the intention to take the necessary resources from the DfID budget? Of course, the Labour Government made a very strong commitment to 90 per cent of funding for climate change being additional funding, with 10 per cent being not additional but focused on poverty reduction. Are the Government also prepared to agree to that arrangement?

My final point is on the prospect of a commitment to the financial transaction tax—referred to by my noble friend Lord Judd—which I think it has been proven does not have to be global. The FTT is seen increasingly as not only desirable but feasible. It has been endorsed by Bill Gates, by a clutch of Nobel peace laureates, by UNICEF and the UNDP, and by many other economists and others, as well as, as the Minister knows, the Liberal Democrat manifesto before the last election. Robert Peston has recently said that an FTT,

“would improve the functioning of capitalism”.

Does the Minister agree with this view? I look forward to her response.

15:27

[Baroness Northover]

My Lords, I, too, thank the noble Earl, Lord Sandwich, for securing this debate and for introducing it, as ever, so cogently. As others have also said, he has an outstanding record of work in this area. Once again, the depth of experience among noble Lords has shone through. I was struck by the very wise maiden speech of the noble Lord, Lord Singh of Wimbledon, which I thoroughly enjoyed. I am sure that we all look forward very much indeed to his future contributions.

This debate—in its title, at least—spans all that the Department for International Development does and has an especial and additional focus on Dalits. In some ways, their plight serves to show up all that we should be doing: if we are not addressing the needs of the most marginal people, then what is our purpose? Underlying all this is fairness. Across the world, too many people live in conditions that are anything but fair. In sub-Saharan Africa, one child in seven does not live to see their fifth birthday simply because of unsanitary conditions and dirty water. Every year, more than 1 million children lose their mothers simply because those women did not receive adequate care during pregnancy and childbirth. Each day, 69 million children do not have the chance to go to school.

As the right reverend Prelate the Bishop of Ripon and Leeds said, we know that what we are doing to help people out of poverty is right, but we also know that it is in everyone’s interest. The noble Lord, Lord Hannay, played his part in the UN high-level panel, which made very clear that particular link. If we fail to tackle the root causes of the global challenges that face us, whether they be economic instability, conflict and insecurity, climate change or migration, then we will all suffer the consequences. That is why I am very pleased that, despite our economic situation, the coalition has kept to its commitment to spend 0.7 per cent of GNI on aid from 2013. I thank noble Lords for the welcome that they have given to that commitment, as well as for the very kind words that have been expressed to me by noble Lords.

I can also assure noble Lords that, as well as meeting their promise on the quantity of British aid, the Government are determined to ensure the quality of British aid. We are doing what we can to encourage other countries to meet their promises. It is in extremely difficult circumstances that this is the case, as noble Lords will appreciate, and we are also, as referred to by the noble Lord, Lord Hannay, trying to bring in the BRIC countries. My right honourable friend the Secretary of State received a positive response when he was in China and I look forward to hearing more from him on this issue.

On the quality of aid, the coalition Government undertook the bilateral and multilateral reviews referred to by noble Lords. The noble Earl, Lord Sandwich, in particular, asked about specifics, particularly in relation to the bilateral review. All DfID’s programmes were assessed against need, effectiveness and other factors, including what was being done by other donors. DfID concluded that British aid should in future be focused on 27 countries, which together account for three-quarters of global maternal mortality, nearly three-quarters of global malaria deaths and almost two-thirds of children out of school. This tighter focus will ensure that we concentrate our efforts where the need is the greatest, increase our impact on fragile or conflict-affected states and deliver in the places where most poor people live. Aid to Russia and China has been stopped, while another 14 countries will see their existing aid programmes closed by 2016.

The noble Earl, Lord Sandwich, asked about Kosovo. I can assure him that DfID’s graduation from Kosovo will be a phased process, honouring existing commitments and exiting responsibly. After 2012, the British embassy will continue to support Kosovo and UK funding will continue through the EU and other multilateral agencies. The noble Earl will no doubt note how well the EU came out of the multilateral review, and we are very glad that the UK can continue its strong funding through that, which will support Kosovo.

In the multilateral aid review, DfID assessed 43 international funds and organisations to which the UK contributes. Nine organisations, including UNICEF and GAVI, were assessed as providing very good value for money and therefore we are increasing their funding. The noble Earl asked whether there was a particular proportion that would go between bilateral and multilateral countries. There is not a fixed proportion. In the multilateral review, four organisations were deemed to be underperforming and have been placed on special measures. We are pressing for UNESCO, the Food and Agriculture Organisation, the Commonwealth Secretariat and the International Organisation for Migration to improve their performance. Should we see no improvement when these organisations are re-assessed in 2013, the UK will reconsider its support.

I hear very much what the noble Lord, Lord Hannay, said about UNESCO, which we did indeed discuss at Question Time the other day. I have written to him on that subject and I hope that he will receive that letter shortly. We bear in mind the balance between the challenges facing UNESCO in this regard and its need to make sure that it delivers more effectively than thus far.

These are extremely difficult times for the United Kingdom. Therefore, it is even more important that people can see that the aid that they are supporting through their taxes is targeted, focused on the poorest, and makes a difference. The noble Earl is quite right that there is great public support for aid.

The noble Lord, Lord Judd, is right to flag up whether the emphasis on results puts the longer-term programmes under some question. The answer is that we are acutely aware that development is a long-term process. We are fully committed to that. The concentration on education, health, girls’ education and so on underlies that commitment, but it is also important that people can see the end-result of their aid giving so that we can ensure that we can maintain the percentage to which we have committed this Government.

No other Government thus far have managed to achieve that. I bear in mind what the noble Baroness, Lady Kinnock, said about there not being as much money available, even when we meet the 0.7 per cent, as if we had a really flourishing economy. That is enormously to be regretted, but I note what other noble Lords said about the achievement of reaching even 0.7 per cent. I pay tribute to the previous Government for helping us on that way, but this coalition Government are committed to that.

Just as DfID has scrutinised multilateral donors, it is offering itself for scrutiny because that is very important in people understanding where this money is going—hence the new Independent Commission for Aid Impact, ICAI, which published its reports recently, and DfID’s new aid transparency guarantee. The focus on results does not mean that we do not understand how development is a long-term effort.

We also know that the concentration on fragile states will not easily produce instant results, but we are acutely aware that conflict breeds poverty. No low-income, fragile country has yet achieved a single millennium development goal. I hope that I can assure the noble Baroness, Lady Kinnock, that we are making plans for after 2015. Although at the moment there is tremendous focus on trying to ensure that as many elements of those MDGs as possible can be delivered, we are looking beyond that.

We are increasing the level of funding for fragile states to 30 per cent of development aid by 2014-15, while the building stability overseas unit, which is based jointly with DfID, the Foreign Office and the Ministry of Defence, is focusing on upstream prevention. Some of the lessons learnt from the lack of development awareness in the early days in Afghanistan, for example, must surely be applied in the future, as well as some of the lessons from Iraq. For example, not destroying the infrastructure needed to support the civilian population once the initial conflict was over is one lesson that was carried through, with the building stability overseas unit emphasising that that was to be the way that things were approached in Libya.

I know that noble Lords will understand and commend DfID’s focus on women and girls, recognising that daughters, mothers and wives tend to reinvest gains in their own families and communities, completing a virtuous cycle of development. We will also invest in girls’ education. One extra year of schooling can increase a girl’s wages by 10 to 20 per cent, helping to end the transition of poverty from one generation to the next. We will maintain a particular focus on maternal health, saving the lives of 50,000 women in pregnancy and childbirth.

I hope that the noble Viscount, Lord Craigavon, will welcome the fact, as he seems to have done, that we will also give at least 10 million more girls and women access to family planning. Contraception costs less than £1 a year. The noble Viscount noted that the global population figure now stands at 7 billion, which shows how important the policy is. That cannot be overstated.

More generally, we are seeking to provide people with the means to pull themselves out of poverty. Wealth creation is the engine of long-term growth, as we have seen in parts of Asia, and so we are putting in place the conditions—land reform, better transport links, fairer legal systems and improved internet access—that we hope will encourage that development. Within DfID, a new private sector department is helping to promote this. We will redouble our efforts to open global market opportunities to developing countries, pressing the EU to do all that it can to make sure that poor countries benefit. We will continue to lobby G20 countries to provide 100 per cent duty free, quota free, market access for the least developed countries.

Where British companies invest in developing countries we will make sure that they do so in an open, transparent and accountable manner. The new Bribery Act helps to reinforce that. We strongly encourage businesses to respect human rights and the environment and we provide support for international standards, such as the OECD guidelines for multinational enterprises.

I was asked about the extractive industries. UK support for that has contributed to 11 countries reaching compliance status and 22 other candidate countries going through the validation process by September 2011. The right reverend Prelate is absolutely right that it is extremely important to look at the economic development of these countries and to make sure that that is occurring in a way that assists the population at every level, down to the bottom billion to which reference has been made, and not simply to those at the top, and that we do not concentrate simply on aid.

Good health is a basic starting point for people who are trying to lift themselves out of poverty. That, too, is an area on which we very much focus. At the moment, there is a strong emphasis on malaria in all our country programmes with a view to helping halve malaria deaths in the 10 worst affected countries. On this World AIDS Day, the British Government remain at the forefront of global efforts to tackle HIV/AIDS, on which I note that I have another debate immediately after this. Although we have made huge progress, there are still more than 34 million people living each day with HIV. Our main focus is on women and Africa where there is the highest incidence and the greatest vulnerability.

Alongside all our proactive work on governance, health, education and economic growth, we will continue to respond to humanitarian emergencies. As noble Lords know, more than 13 million people are experiencing the worst effects of the drought that has spread across the Horn of Africa. UK aid is providing much-needed support, including food, vaccinations and clear water and sanitation. Our response to humanitarian crises has also been reviewed by my noble friend Lord Ashdown—a review that has been widely welcomed internationally. The incidence and severity of natural disasters is likely to increase due to climate change. We know that the poorest and most marginal will be hit the hardest and worst. The noble Lord, Lord Judd, is absolutely right about that and it is a major focus of DfID.

Time is running short, and I want to turn now to the Dalits. Noble Lords have rightly made the point that members of the Dalit caste suffer from the most severe forms of poverty, deprivation and exclusion. Often living apart from the rest of society they routinely face discrimination in accessing basic services and are barred from undertaking certain occupations. The case of the Dalit girl mentioned by my noble friend Lord Avebury brings that graphically home to us. We have heard much about their plight from noble Lords—in particular, the noble and right reverend Prelate, Lord Harries of Pentregarth, and my noble friend Lord Avebury, who have been doughty champions of Dalits in this House in terms of those overseas and those in the United Kingdom.

Britain is committed to helping India to eradicate caste discrimination. Indeed, as noble Lords know, discrimination on the grounds of caste was abolished by the constitution of India in 1950, but we recognise that there is a long way to go. The UK regularly raises such issues with the Government of India, about which the noble Earl, Lord Sandwich, asked. It was last discussed in September on a ministerial visit by my noble friend Lady Warsi.

DfID’s development programme is specifically designed to benefit the poorest and most excluded, including Dalit women and girls. We are seeking to increase the number of Dalit children, especially girls, enrolled in school. My right honourable friend the Secretary of State for International Development is due to visit India shortly and plans to meet Dalit girls while he is there and seek to address how we can ensure that more of them are in school and able to see school through.

At a strategic level we are supporting civil society programmes, such as the poorest areas civil society programme and the international partnerships programme. Both are aimed at tackling discrimination, and together the two programmes should help more than 25 million excluded people.

DfID is also working with Dalit groups in Bangladesh and Nepal to help them access basic services, such as health and education. DfID Nepal is working with the Dalit NGO Federation and my honourable friend in the other place, Lynne Featherstone, visited Nepal in June this year in her capacity as champion on violence against women, and engaged with Dalit women there. The noble Earl, Lord Sandwich will remember that when we were in Nepal a few years ago through DfID, we also met Dalit groups and I certainly found that extremely informative.

I am aware that I am running out of time and have numerous questions from right across the House. My best strategy is to write to noble Lords in answer to the numerous questions raised. To conclude, as ever this has been an extremely stimulating, wide-ranging and constructive debate, which has amply demonstrated the House’s understanding of the many complex challenges which we face in our efforts to alleviate poverty and suffering across the world. We know there are major challenges facing all of us, we know we are all inter-linked and the noble Lord, Lord Singh, put that beautifully. Something happening in one area of the world will have an impact elsewhere. We know it is a challenge maintaining aid when we are in the midst of our own economic problems. We also know that, whatever those problems are, those who are the most vulnerable are those who are already at the margins—the poorest and especially the women and children among them. I know that view is shared right across the House.

15:47

[The Earl of Sandwich]

My Lords, I do not want to stand in the way of another important debate, on HIV/AIDS—a very relevant and connected debate, albeit in the United Kingdom—so I will be brief.

This has been a very heartening debate because it is encouraging to know about programmes that are really working and to hear people who are sympathetic and instrumentally involved in seeing policy through. I was very encouraged by that.

It is a Cross-Bench day so I thank all the Cross-Benchers, if not for electing me, for electing the subject of the debate and also the subject of the Dalits, raised by the noble and right reverend Lord, Lord Harries, which I think strengthened the content of the debate. It is a very wide canvas and it is almost impossible to fill in all the areas. I hope that he will be recruiting from Members of the House for his new all-party group on Dalits; it will have a lot of impact on legislation here, where the Dalits are also discriminated against.

I thank the Minister for her stamina, not least because she was up late last night, as was I, and saw what was happening. She now has another debate to respond to. The 0.7 per cent target is still there. I was hoping for a fuller answer on the multilateral agencies. I am slightly alarmed to think that the IOM as well as UNESCO, mentioned by the noble Lord, Lord Hannay, are on trial in some way in the aid programme, because they have such a reputation, and as he said, they need support day by day.

I must thank my noble friend Lord Singh for his maiden speech. I was a student in India years ago and the gurdwara was the place to go when you were really down and out—I remember that so well. We think in our childhood culture of the bearded as being wise. I am sure that he has always been told that he is wise, but, more than that, he is a mining engineer. We need those to give real strength to our debates.

I thank the noble Lord, Lord Avebury, who always brings up interesting subjects, and the noble Lord, Lord Judd, whom I have known for many years. I thank all your Lordships.

Motion agreed.

HIV and AIDS in the UK

Thursday 1st December 2011 Lords Chamber

Debate

15:51

Moved By

[Lord Fowler]

That this House takes note of the report of the Select Committee on HIV and AIDS in the United Kingdom (HL Paper 188).

[Lord Fowler]

My Lords, I am grateful to the authorities for finding room for this debate on World AIDS Day. Perhaps I may first offer some thanks. I thank the committee, which was a mixture of old campaigners— I must be careful how I say that these days, but the noble Baroness, Lady Trumpington, is not here—and Members who were very much new to the area but who made a major contribution. I am delighted to see so many of the committee here, late on a Thursday afternoon, including my noble friend Lady Ritchie. I thank the clerks, Mark Davies and Matt Smith, for their invaluable work and tremendous effort. I also thank all those people who were witnesses, many of whom are the heroes of the struggle against HIV and AIDS—the clinicians, the Health Protection Agency, the department and voluntary organisations, without which, frankly, we would not be able to manage in this country.

It is 25 years almost to the week that we had our first debate on HIV and AIDS in Parliament. It was on Friday 21 November 1986. Reading that debate, I see that, as Health Secretary, I had the support of Michael Meacher for Labour and of Archy Kirkwood for the Liberal Democrats. I even had the support of Bill Cash—I have not often been able to say that in my political career. All the parties combined to make it an entirely non-partisan debate, and so it has remained—as, too, have many of the issues raised in it; public education, treatment and research are still the issues today.

However, there is of course one enormous difference between now and then. At that stage, AIDS was a death sentence. We had neither drugs nor vaccines. In the hospital wards, we found young men dying as doctors and nurses looked on helplessly. That was why we took the decision then to mount a very high-profile public education campaign using television, radio and press, while sending leaflets to every household in the country. If we wanted the public to know of the dangers, it was the only course open to us.

Of course, not everyone at that time agreed. They said that it would offend the public—there was little evidence afterwards that it had done that—and that the Government should stand well clear of such a controversial and, to them, distasteful error. My view and that of my colleagues on the special Cabinet committee that we had set up under the brilliant chairmanship of Willie Whitelaw was that that was not the case. Disease was disease, suffering was suffering, and we had a moral and human obligation to treat sexual disease just like any other and, above all, to try to prevent its spread.

The aim of our Select Committee has been to examine the progress that has been made in the 25 years that have intervened. The greatest change in every meaning of that word is the availability of effective drugs. Antiretroviral drugs have transformed the life expectancy of those with HIV. Provided that people are treated early, there is no reason why they cannot live long lives. In this country we are fortunate that such drugs are freely available, a position that even today after more than 25 million deaths worldwide is still not the case in many parts of the world. In Britain the drugs are there and the death toll has been drastically reduced. Perhaps that is why one of the most common questions that I get asked today is, “Is it still a problem?”. The answer is an unequivocal yes. It is not only a problem, it is a growing problem. The evidence that the Select Committee received on this was utterly clear. Today almost 100,000 people in this country are living with HIV, the number of HIV patients has trebled in the past 10 years, a quarter of those with HIV do not know that they are infected and continue to spread the disease, and although we have drugs to prolong life there is still no cure and no vaccine.

This point should be emphasised; those with HIV, despite the drugs, face a lifetime of treatment and, even worse, the threat of discrimination in jobs and normal social life. The stigma has not been removed. It is not consequence free. A few months ago I received a letter from a man who had just been diagnosed with HIV. He said: “Last year I was diagnosed with the disease and it almost drove me to suicide. I would not want someone else to go through the pain I have. I am now seeing a psychiatrist and talking through how to deal with the disease”. More happily he went on to say that he had now started the medication and his viral level was almost undetectable. That gives some indication of the kind of pressure and suffering that can be caused, even today, to those with HIV.

The real tragedy is that HIV is entirely preventable. Thanks to medical advance, very few babies in this country are now born with the condition. It is not like asthma or epilepsy. To be blunt, we have seen in the past decade a failure in our efforts to reduce the spread. One reason for that failure is clear enough; as a nation we spend more than £750 million a year on drugs to treat HIV, and in contrast the Government spend a miserable £2.9 million trying to prevent it. That is the failure of the policy and the direct and unavoidable challenge to this Government.

The basis of our report is that priority should be given to preventing HIV and AIDS in the United Kingdom. So far, the effort has been wholly inadequate over the past decade and a new priority must now be given to prevention policies if the epidemic is to be stemmed. Our belief is that HIV and AIDS remain one of the most serious public health issues confronting the Government at the start of the 21st century.

In principle I am encouraged by the Government’s proposals to set up a new public health body with a ring-fenced budget; it is an excellent idea, although we will obviously have to ensure that the detail of the proposal lives up to the promise. However, I say to them that it is essential that much greater priority is given to prevention in areas such as HIV. At the moment we have a health system that is financed to treat the casualties but is simply not resourced to prevent those casualties coming about. Before Ministers say that this is simply a plea for money, let me remind them what can be saved by successful prevention policy. It is estimated that a lifetime’s treatment costs between £280,000 and £360,000 for every patient. If we can prevent just 1,000 new infections, we are talking about savings of around £300 million. That is good news for the NHS budget, and it is exceptional news for the people spared a lifetime of treatment.

In entirely practical terms, I refer Ministers to paragraph 229 of our report, where we challenge the local procurement policies at present being pursued inside the health service and propose that antiretroviral drugs should be purchased on a national scale using the purchasing clout of the health service. The Government should reconsider their position and, in so doing, they would do well to read the debate in this House last Thursday, particularly the speech of the noble Lord, Lord Sugar, who made exactly that point about purchasing generally.

Of course, not everything costs vast amounts of new money. One of the undoubted reasons why HIV is spreading is that too many people are not tested; a quarter of the 100,000 with HIV do not know that that is their condition. That is obviously bad for the people who do not test, because the longer it goes on undiagnosed the worse the outcome for the individual. It is certainly bad for the country, because every undiagnosed person represents a public health hazard. It is a sure way of spreading the virus.

We have a series of proposals, but I shall pick out only three. Home testing kits are already available on the internet, but it is a trade that is unregulated and unchecked. The committee took the view that home testing was a sensible extension of testing generally, provided that such tests were accurate and under a licensing system. I am glad that the Government agree with that and I congratulate them on accepting it.

The second proposal concerns general practitioner testing. We should involve general practitioners much more and certainly ensure that people who sign up with GPs for the first time are tested. That point was made this week also by the Health Protection Agency, which points out that of the 680 people with HIV who died in 2010, two-thirds were diagnosed late.

The third area concerns prisons. I am less sure, to be frank, what the Government’s attitude is here, having read their response. We know that the incidence of HIV in prisons is above the average. It would seem almost an automatic step for prisoners to be tested for their own sake so that treatment can be given, and certainly for the health of other prisoners. I will welcome the Minister’s guidance on this. Overall, the aim of policy should be that HIV testing should be a normal part of medical care.

Let me return to 1986 and make a comparison between one feature that has improved markedly and another that has not improved to anything like the same extent. The good news comes from drugs. It was not entirely unanimous inside the Thatcher Government that we should introduce clean needle exchanges for injecting drug users. I could put it more strongly than that. There were fears that it might be seen as condoning criminality and that drug crime would rise. Nevertheless, we went ahead and the result has been consistently successful. Only about 2 per cent of HIV cases in the United Kingdom come from injecting drugs and we have received no evidence from the police that it has led to any increase in criminality.

I add this; we were set up certainly to look at HIV/AIDS in the United Kingdom, but we cannot ignore what is happening in the rest of the world—not only in sub-Saharan Africa but in countries such as Russia and Ukraine. There the HIV epidemic is driven by injecting drug users and is at an alarming level. In Russia, more than one-third of drug users are living with HIV; in Ukraine the position is even worse. Conceivably, our experience here might be of help. Can the Minister say what efforts we are making to make our experience available overseas?

The part of our experience that is less encouraging is that the stigma and discrimination that surround HIV testing have not remotely disappeared. We were told of examples in employment and even of graffiti being daubed on homes and people being forced to move away. I do not say that this is general but I do say that it occurs too often. Noble Lords will know, of course, the teaching of the Christian Church—and, indeed, of every other religion—of love thy neighbour. In that context, it is interesting to look at the Ipsos MORI poll carried out in 2010 for the National AIDS Trust. Respondents were asked whether they agreed with the statement, “If I found my neighbour was HIV positive it would not damage my relationship with them”. Thirty-three per cent strongly agreed with that, while 30 per cent tended to agree, but 23 per cent either disagreed or strongly disagreed. That position had actually got worse since 2007.

The stigma surrounding HIV is one further reason why the whole issue should be tackled early, and we should take relationship education seriously and not be dictated to by the bigots who say that it is all a plot to force explicit sex education down the throats of four year-olds. People who campaign on that sort of falsehood should hang their heads in shame.

It is interesting to see from the same survey that young people in particular are interested in hearing more about the reality of HIV and that many confess to ignorance in this area. In 1986, the campaign was “AIDS: Don't Die of Ignorance”. Of course, the challenge today is different, but no one can dispute that there is a challenge or that ignorance of HIV remains an issue. Frankly, I do not agree with the Government that no new campaign in this area is worth while. There is a real danger that we drift into worse problems by our complacency. Of course, I understand the restraints on spending. It may come as a surprise to the Front Bench that in Margaret Thatcher’s Government we also had restraints on public spending. What we did not have was a budget of £120 billion. Prevention, either against HIV or in any other area, is not one of the most costly programmes for the health service. We need a new prevention initiative. That is good financial investment for the health service, but above all it is a good human investment in that it can avoid so much avoidable suffering and distress.

16:06

[Baroness Gould of Potternewton]

My Lords, I start by thanking the noble Lord, Lord Fowler, for making the meetings enjoyable, friendly and determined. We were absolutely sure that we were going to come to the right conclusions. The people out there who work in the field have welcomed the report. I have not heard one negative remark about the report and that says an awful lot, in many ways, about how the noble Lord, Lord Fowler, guided us through those many days. I support the noble Lord in his thanks for the staff. Sometimes we overburdened them but nevertheless they were absolutely wonderful with us. It was certainly a very concerted effort—every Tuesday morning for eight months. As one noble Lord said to me when it was over, he was suffering from Tuesday morning withdrawal symptoms—I am looking straight at him. I think that that applied to many others. If I raise any criticism of the response, this is in no way a criticism of the officials in the Department of Health, with whom I have worked for many years, and all of whom are fully committed to building the sexual health services, including for HIV, from the Cinderella service that it was to the improved service that we have today. Even the response goes in the right direction of travel. At this point, I declare an interest, among many, as chair of the Sexual Health Forum and as chair of the All-Party Parliamentary Group on Sexual and Reproductive Health.

I reiterate what the noble Lord, Lord Fowler, said—that the Select Committee was right to focus on prevention as a theme of the report, whether relating it to raising awareness, education, testing or treatment. It cannot be said too often that HIV remains the most serious infectious disease affecting the UK and prevention is the only way we will make that change. We had an interesting short debate during the passage of the Health and Social Care Bill on the need for national sponsored awareness-raising campaigns. But as with the response to the Select Committee report, I did not get any real assurance that national campaigns were on the agenda. While accepting the need in some instances for targeted campaigns—£2.9 million has been spent on those campaigns—there appeared to be a complete rejection of the idea of campaigns directed at the general public. That is a serious mistake as it does not take into account the rising number of UK-acquired infections among people not in the high-risk groups, who now account for more than 25 per cent of newly diagnosed infections each year. However, I was pleased to see the welcome given to the National Aids Trust website, HIV Aware, which directs its messages of prevention and awareness specifically to the general public. This is a classic example of the important role that the third sector plays in the alleviation of HIV and support for those affected. Has thought been given by the department or the Government as to how we could nationally disseminate the themes of the HIV Aware campaign more locally so that there is uniformity of message throughout the country? It would cover high prevalence groups as well as the wider audience. It would raise awareness and provide information and advice at very little cost. I do not think the argument against that can relate to cost.

Also in terms of awareness-raising, I was pleased to note the work taking place among faith leaders. As our visit to Leeds highlighted, it was possible to have dialogue with some faiths, but in other instances it proved to be very difficult. It is terribly important that this work is expanded for us to influence what is happening among some of the groups who find it difficult to accept HIV.

Overall, the public have become less aware of HIV and that has created widespread public ignorance. As the noble Lord, Lord Fowler, said, the lack of awareness by the public is one of the reasons why stigma persists and why there are so many mistaken beliefs on the supposed dangers of HIV. This creates a negative and judgmental attitude towards people with HIV. Stigma is still a daily reality for many people living with HIV. As in the instance given by the noble Lord, Lord Fowler, it can have a devastating effect on the life of someone with HIV and can often be compounded by profound health inequalities—for HIV is also about health inequalities.

Most importantly and crucially, stigma can deter someone from being tested. Ignorance makes people very frightened of being tested in case they then have to face the consequences that go with it. Preventing the spread of HIV has to involve the promotion of early testing and the widening of the scope of venues where testing can take place in order dramatically to reduce the estimated 22,000 people who have HIV but do not know it—the 25 per cent who are undiagnosed but might be furthering transmission.

As the Select Committee Report states, HIV testing must become normalised. An offer should be made to newly registered patients in general practice as well as to general and acute medical admissions. The Department of Health’s important screening pilots have shown that staff and patients welcome more HIV testing in hospitals and in primary care and community settings. However, for the future, it will be for healthcare professionals and local authorities, when they take over in 2013, to follow that work through. I am putting a positive slant on the Government’s response that they will consider favourably the Time to Test report. Perhaps the Minister can confirm that I am right to be optimistic.

The evidence of success of this approach is made forcibly by the success rate of antenatal clinics where an offer is automatically made and, as a consequence, mother-to-child transmission is at a very low level. I heard this morning at a meeting of how, when the fathers turn up at the clinics, staff can try to persuade them to have an HIV test. Many have previously been resistant to that. They are examples to learn from. The high level of acceptance of an offered test makes economic as well as medical sense and that message needs to be repeated. Prevention of half those undiagnosed cases would save the country £1.2 billion in healthcare costs. More than half the people are diagnosed late and some are already very ill, which again leads to far higher annual treatment costs. If we could have early testing, we could have early treatment and reduced costs.

The work being undertaken by MedFash, referred to in the Government’s response, will, I am sure, be invaluable in providing an interactive tool to support GPs and primary care staff in offering HIV testing as it will enable those staff, among whom there is great nervousness about making an offer, to do so. That barrier needs to be looked at much earlier and we must think about having discussion of HIV in medical schools and nurse training, so that when staff are faced with such questions, they know the answers. Instead, they are finding it very difficult.

It is also very important that we look for a positive outcome to the public health outcomes framework indicator on late diagnosis. I appreciate that many are being considered in the public health field and I know that the Minister cannot give me an answer. However, I am hoping that she will say that I can be optimistic.

One of my concerns about the new structure—although I am a strong advocate of public health moving into local government—is the design of the new commissioning structure and the inter-relationship between the different elements that make up that structure. This is particularly important for HIV because of the expected split between treatment and care and between prevention and testing. The split of functions may be inevitable, or it may not be; it might still be changed. I understand the case made by the Government in relation to other infectious diseases. I welcome the commitment that prevention work will not become isolated from treatment services. However, I would like to hear a little more about how that will happen in practice. Perhaps the Minister can elaborate on the mechanisms that will ensure that that prevention work does not become isolated from treatment services.

In conclusion, I should like to make three short points. On standards, the response indicates that the provisions set out in the Health and Social Care Bill allow for the development of quality standards for social care and public health, opening up the possibility of quality standards that fully support integrated care pathways. The question that follows, however, is whether comprehensive guidelines will be produced to make that system consistent and effective or will it be left to each locality to determine how that works. In some it might and in others it might not.

The committee recommended that NICE be commissioned to develop treatment and care standards for HIV specifically. While there are excellent standards produced by BHIVA, they do not address the need to co-ordinate specialist health HIV services with other services. I hope that the Government might reconsider and take up the recommendation that was in our report.

My next point relates to charging for HIV treatment and care and the recommendation that HIV should be added to the list of conditions in the NHS (Charges to Overseas Visitors) Regulations 1989. This is a matter which the noble Lord, Lord Fowler, the noble Baroness, Lady Masham, and myself will be raising during the passage of the Health and Social Care Bill. I am not asking for an answer to that today. However, I understand that a review is being undertaken and it might be helpful if we could know when the review is to be concluded.

Finally, I want to say a few words about tariffs. The response indicates that funding methods such as block contracts provide no incentive for organisations to improve patient care. In the light of that clear and positive statement in the response, can the Minister clarify the decision in the Health and Social Care Bill not to allow national tariffs for public health, including sexual health? Not to allow a level of flexibility of tariffs will almost inevitably mean a return to block contracts and therefore, as the response says, diminished patient care. There is a clear contradiction here and I think that it needs clarification.

Much has been achieved in the past. However, if we are to maintain momentum and respond effectively to the challenges of a growing epidemic, we need a national, holistic strategy on HIV, a view endorsed by the HPA in its report earlier this week. We need a strategy that encompasses the findings of the Select Committee report: early diagnosis, effective treatment and social care, HIV prevention and testing in a wide range of settings, laws and policies to eliminate stigma and discrimination, a well-trained workforce and the reduction of health inequalities. That is the approach that I hope we will see in the planned sexual health policy framework, which gets a number of mentions in the response to the report. Only then can we be assured that the momentum that has been achieved can and will be maintained.

16:19

[Baroness Tonge]

My Lords, I begin by congratulating the noble Lord, Lord Fowler, and the committee, of which I was a member, on this report. I consider it to be a very important piece of work and I would have hoped that the Government would have accepted all of our recommendations. Perhaps that was a bit too much to ask for; sadly, we have a little more persuading to do. I want to talk about two or three aspects of the report and I make no apology for repeating some figures that we have already heard, because they are very important and need to be engrained on everyone's mind.

HIV infection is growing in the United Kingdom. By next year, there will be more than 100,000 people living with the disease in this country and in AIDS treatment, one of the great medical successes in recent years—a quite fantastic medical success—the costs are now approaching £1 billion a year. Yet we still have to remember the title of the committee’s report: No Vaccine, No Cure. It is not curable but for the fortunate people who are diagnosed early, this disease has become a rather nasty long-term condition, which can be controlled with the right treatment, so that people can go on to live a relatively normal lifespan. We have already heard about early testing being desirable. Unfortunately, this has led to a young generation growing up now who think that AIDS can be cured, like any other STD. It is, “No worries, then”—you go to the doctor.

It was 25 years ago that the noble Lord, Lord Fowler, as Secretary of State for Health, launched the never-to-be-forgotten “Don't Die of Ignorance” campaign, with its collapsing tombstones. My children trembled in front of the television set during that campaign. It had impact. They have never forgotten it, and it certainly slowed the spread of that disease in the UK. The noble Lord should always be remembered for his courage in pushing through that campaign, against what I know was some pretty tough opposition.

I do not know how much that campaign cost, but I know how inadequate spending on prevention is today. We have heard that £2.9 million is being spent on prevention—the cost of a house in my old constituency—despite the Government using “prevention” 35 times in their response to the report. I counted each mention because I am a pretty sad person sometimes. Despite those 35 times, only £2.9 million has been spent on prevention yet, as we have heard, nearly £1 billion is spent on treatment in one year. On another preventable statistic, as we have heard, a lifetime of treatment is estimated to cost between £250,000 and £350,000. For the individual and for the Treasury, prevention has to be and is better than cure.

I want to emphasise a few more aspects of prevention, which may not have occurred to some people. AIDS is one of many sexually transmitted diseases and in my view we should not single out one disease for a campaign, as we did recently with chlamydia. That was a wasted opportunity. AIDS is a very serious disease, but I repeat that we have a sexually active population. Sexual images are everywhere and much advertising uses them. Heterosexual and homosexual activity is on our TV screens, in the cinema, and on the internet and YouTube. I do not watch YouTube but I know that young people watch it a lot. That activity is everywhere and young people are immersed in it, but whoever has seen an actor talk about condoms or sexually transmitted disease before hopping into bed with the leading lady? I never have in my lifetime.

I do not want to sound like an old prude but we have to accept that this is the way people behave. They must have the freedom to live their lives, heterosexual or homosexual, as they wish—so long as their actions do not affect others, which sexually transmitted disease does. That is good John Stuart Mill stuff: they are limiting the freedom of people to enjoy their lives. Therefore, people must be given the right warnings and information, and they must be given to all sections of the population, not just the target groups. I have talked to some AIDS campaigning groups about this, and I can say that a spin-off from this more generalised approach to the whole population may help to diminish the stigma which AIDS sufferers have to contend with. I repeat: it is a sexually transmitted disease like gonorrhoea, syphilis, trichomonas, chlamydia and even warts. Are your Lordships feeling uneasy yet, sitting on your red Benches? They are all sexually transmitted diseases and can be prevented. Let us be open about them all and push preventive messages for all of them, especially AIDS.

In their response to the report, the Government said at page 8 that they do,

“not support the Committee's recommendations on the need for a national campaign aimed at the general public, as there is little evidence that this would be effective”.

Where is the evidence? I do not think we saw that evidence and we should if it exists. There should be no ifs and buts from the Government. We must massively increase preventive campaigns or face huge bills and destroyed lives. We must also have statutory sex-and-relationships education in our schools, covering all aspects of sexual activity. Stop caving in to the religious lobbies—state education must provide this.

We have another problem however—I hope on a lighter note—even if we got the Government to agree on these issues. It is the reorganisation of the health service which, as noble Lords probably know, is not one of my favourite topics. The Health and Social Care Bill will have a huge impact on the treatment, care and prevention of AIDS and every other sexually transmitted disease, because everything is being broken up. Treatment of the disease is to be commissioned by the national Commissioning Board and provided nationally. HIV prevention will be commissioned by Public Health England, I think either via or with local authorities. Sexual health promotion generally will become the responsibility of local authorities. Genito-urinary clinics, many of which treat AIDS patients too at the moment, will be the responsibility of local authorities, but the AIDS bit will somehow have to be funded by the national Commissioning Board.

AIDS testing will be done by local authorities. GPs will be encouraged to monitor and maintain AIDS patients already being treated, but the cost of their drugs will be commissioned nationally. Failed asylum seekers with AIDS, still sexually active in the population, are currently denied free treatment. Who will be responsible for them? Do noble Lords get my drift? Said quickly, it all begins to sound like a Gilbert and Sullivan patter song. During the Christmas holidays, I am going to work on the NHS reorganisation plans to make a nice little ditty out of all those various quangos and the way in which they will connect with one another.

For example, why should cash-strapped local authorities—I have been a member of one—or Public Health England get excited about testing for AIDS or prevention of AIDS if the budget for treatment lies with another body? In reality, they will be one phase removed. Arguments about savings “in the long term” in my experience in management, fall on deaf ears because all budgets are short term and even Governments seldom look beyond the next election. Ah, but I hear you cry, we shall encourage integration and co-operation. This, I suppose, is where the health and well-being boards come in, but without representation on those boards from the national Commissioning Board responsible for AIDS treatment, how will they integrate? What about a local authority which has a particular religious majority, or just plain old-fashioned stigma, prejudice, ideology or disapproval? What about that authority? This may severely restrict the choices made and the services it provides.

As well as the health and well-being boards, health services require full staffing and plenty of resources for those staff to find the time to contact colleagues in other services to integrate and co-operate with. Call me an old cynic but I was in the thick of it for many years in the NHS and I know the reality. These words and phrases are pushed out so easily but are so difficult to implement in practice. Noble Lords will have gathered that I am disappointed by the Government’s response, but I am prepared to accept that it may be different once they get to grips with the consequences of their own health reforms.

16:30

[Baroness Masham of Ilton]

My Lords, I should like to congratulate the noble Lord, Lord Fowler, on securing the Select Committee on HIV and AIDS in the UK. Now we have the Government’s response to the committee’s report and this debate on 1 December. I think the noble Lord is Lord Fix-it. I was pleased to be a member of the Select Committee and thank the staff for their very hard work.

I have been a member of the All-Party Group on HIV/AIDS since its formation in 1987. In the early days of HIV/AIDS, the noble Lord, Lord Fowler, was Secretary of State for Health and instigated the campaign to warn people against the dangers of HIV/AIDS. To this day, many of us remember the lilies and the tombstones. Some of us, who were in at the beginning of this serious virus, know that there is no vaccine and no cure, and that great effort should be put into prevention and research. The USA undertakes a huge amount of research but there is still no vaccine.

Spending on prevention is seriously inadequate. HIV is entirely preventable but the latest figures show that the Government spent only £2.9 million on national prevention programmes, compared with £762 million on treatment. In a number of cases, general sex or health campaigns have made no mention of HIV, so the public think that it is not a problem. There has been little in the press that confirms their idea that the virus has gone away. This disparity of spending persists despite the fact that preventing one infection avoids a lifetime of treatment, estimated to cost between £280,000 and £360,000. We recommend that a new national campaign should be mounted to tackle the ignorance and misunderstanding that still exist.

As I said, many members of the public think that HIV/AIDS is no longer a problem; they are wrong. There are many people living in the community who are HIV positive and do not know it. They may be infecting others unknowingly. Late diagnosis is a huge problem. People are diagnosed when they are seriously ill and often die within a year or are very expensive to treat. Our Select Committee suggested that there should be wider testing facilities, for example in GPs’ surgeries.

A few years ago the very good GP surgery Lambeth Walk, which I visited, conducted a pilot scheme in testing for HIV. It was ideally suited because the surgery is close to St Thomas’s Hospital, which has an HIV/AIDS unit for secondary care. I have heard that the pilot scheme ended and the testing did not continue. Will the Minister please look into why this project did not continue? Perhaps she would write to me.

We took evidence from many people who work for organisations that are involved with HIV/AIDS. One such body was the Health Protection Agency, which does an excellent job, working with infections. There is concern because in the Health and Social Care Bill now before your Lordships' House nobody seems to know what is happening to this independent body, which advises the Government and is well thought of throughout the world. I think the HPA falls into the category of, “If it ain’t broke, don’t fix it”. Could the Minister please tell the House what will happen to the HPA? We have the very difficult situation of drug resistance and the very problematical HIV virus which mutates. Research is so important and should be shared with the rest of the world in order to find a vaccine.

The HPA, or whatever it becomes, should still be able to do research and receive grants. There was concern that if it is absorbed into the Department of Health or Public Health England its independence may be lost. People with HIV can be very susceptible to tuberculosis and again there are strains of TB which are resistant to antibiotics. This is an increasing danger. Our report says that data on HIV in prisons must be improved. The Health Protection Agency should utilise surveillance and profile HIV within the prison population. At the same time a review exercise into offender health services in public prisons is under way. The Government should supplement this with a review of the extent and nature of HIV prevention, testing and treatment services within the public prisons to determine the levels of provision across the country.

The Government’s answer is that the Department of Health has worked with the Health Protection Agency to improve disease surveillance in prisons and provide prison-specific data on STIs, including HIV. The department and the HPA are aiming to disaggregate data on prison diagnoses next year. What will happen if the HPA is disbanded? I need an answer, being a member of the All-Party Parliamentary Group on Prison Health.

Throughout the process of taking evidence we found that stigma kept on coming up. HIV stigma is still a daily reality for many people living with HIV. A recent National AIDS Trust survey revealed that 69 per cent of people agree that there is still a great deal of HIV stigma in the UK. In a large-scale east London study, one in three people living with HIV had experienced discrimination. Half of all discrimination was in healthcare. The Department of Health must take a lead on this and develop training resources aimed at stopping such discrimination to be used by all current and new NHS and professional bodies.

One of our recommendations is that the Government, local authorities and health commissioners build on work already taking place within faith groups to enlist their support for the effective and truthful communication of HIV prevention messages. The Government agree but I read in the Evening Standard of 25 November that the London Church has been putting lives at risk by telling HIV-positive worshippers to stop taking their medication because God had cured them. After a healing process in which the pastor sprayed water in their faces and shouted over them, asking for the devil to come out, the patients were told that they could discard their medication. This is a death sentence but illustrates that there are many problems still to be overcome.

We found some excellent services and dedicated staff and volunteers when we visited Leeds, the Chelsea and Westminster Hospital, the Homerton Hospital and Brighton. I want to mention a gem that some of us visited in Brighton. High up on a hill overlooking the city, with a wonderful view, is the Beacon: a splendid, beautifully adapted house where people with HIV/AIDS can stay after they have been in hospital for a short time to rehabilitate before they go home. There should be more Beacons across the country for all sorts of long-term conditions. One finds good ideas often come out of HIV/AIDS treatment, and there are many aspects that would have been good for us to look at, such as children’s facilities—children can become HIV positive from mothers giving breast milk—and end-of-life resources, but time did not allow for this..

I hope the report will be of use. There is something special about HIV/AIDS, as the virus and drugs are complicated. The priority aim should always be prevention. We must not forget that last year there were an estimated 3,800 UK-acquired HIV cases diagnosed.

16:41

[The Lord Bishop of Wakefield]

My Lords, I am particularly nervous to follow the comments on the particular church background that the noble Baroness mentioned a moment ago. I would like to start with an example of where the church and church agencies have been rather more positive. Almost 20 years ago when I was in Rome for a series of meetings, I was taken to two or three projects in Trastevere, in the heart of the city. These included a language school for illegal immigrants, a soup kitchen and a hostel for children born with HIV/AIDS. It was a powerful experience, meeting the children and their mothers. The unit had been opened about a year before by Desmond Tutu and was entirely the initiative of the Community of Sant’Egidio, a lay community which now works throughout the world on the same sort of projects.

This commitment to HIV and AIDS was mirrored in this country by the churches in the early days of the Mildmay Hospital, the London Lighthouse and other early AIDS projects. Of course, there was some element of enlightened self-interest in this work. The churches, not least through their priests, have been affected by these diseases just as much as other organisations and agencies. Looking back to my experience in Rome, I was stimulated to think further about the complexity of this task and the way that that agency had found itself dealing with illegal immigrants at the same time as HIV/AIDS, and so on. Migration and the spread of the disease and other viruses have been a key part of all this, as indeed has the enormous growth in international travel. This automatically presents us with issues about the treatment of all people with HIV, regardless of where they come from or indeed their present resident status. Humanitarian concern places an imperative on us to make sure that all who are living with HIV/AIDS receive proper care and treatment. This point has already been made by noble Lords in this debate. Again, there is, of course, an element of enlightened self-interest in this. If we are selective in the way we face this continuing issue, we may indeed be storing up further trouble for our own society in the coming years. Disease and infection know no boundaries, either morally or internationally.

Just two months ago I welcomed representatives from across the Anglican Communion, and especially from Africa, to a day consultation at Lambeth Palace on this very subject. I had been well briefed having spent two weeks in Tanzania only a month earlier, where I was introduced to projects. The focus at this consultation at Lambeth was particularly on sub-Saharan Africa, to which the noble Lord, Lord Fowler, referred earlier. It struck me at the time that in what I was saying to that consultation, I could equally well have been speaking to myself and to our own situation here in the UK. The situation is not something that we can take for granted, and that seems to have been made perfectly clear in all the speeches that we have heard so far in this debate. The situation here is as serious as it ever was. The figure of 100,000 that we heard at the beginning is terrifying, and it is increasing.

The Church of England is committed to the fight against HIV/AIDS through its community work in many places. In my own neck of the woods in the diocese of Wakefield, the St Augustine’s project in Halifax provides help for asylum seekers, refugees and EU migrants, and to all those resident in the local community who need assistance. HIV and AIDS is, of course, an integral part of this, so we do work from first-hand knowledge in each locality.

In 2004, the Church of England produced a report which we called simply Telling the Story: Being Positive about HIV/AIDS. In a useful and concise manner it focused on many of the problems that we still face—for example, the question of openness about the crisis. It read:

“At the heart of the AIDS crisis lies the sin of stigmatization. Unless and until we address this central issue, whether it is manifested in our communities, expressed in our personal or national attitudes or, as in the case of Africa, is directed towards an entire continent, stigmatization will remain the single most resistant defence against any fulfilment of our promise to future generations”.

What the report said remains just as true now as it was then. It went on to say:

“If the Church’s response is to be effective ... then we will need to understand that the only way that we can work for an AIDS-free world is to work for stigma-free hearts, individually, nationally and globally”.

Any one of us who has encountered people living with HIV/AIDS will know only too well of the difficulties that they have in finding the courage to be open about what has afflicted them and is threatening their lives.

Earlier, I noted that our attitudes to AIDS are related not simply to stigmatisation but to enlightened self-interest. This means that there are at least three practical ways in which we must respond to be effective. First, with regard to public health, new evidence shows that effective HIV treatment results in a 96 per cent reduction in onward transmission. Therefore, ensuring that everyone who needs treatment receives it is the key to tackling the UK HIV epidemic. Charging for such treatment deters people both from being tested for HIV and from seeking treatment.

Secondly, ending charging for HIV will, in the end, save the NHS money by preventing new infections and identifying HIV early, as the noble Lord, Lord Fowler, noted in his introductory speech. Then it can be effectively treated. This will reduce hospital costs and, indeed, expensive high-tech treatment. Thirdly, there is no evidence to support the claim that there is a market in HIV “health tourism”, or indeed to suggest that the ending of charging in this country would lead in that direction.

I have mentioned once or twice issues of enlightened self-interest but ultimately the issues behind this debate take us to a far deeper level—to what is essential to our common humanity. Universally we owe it to each other to offer free and effective care in response to an epidemic which has wiped out whole populations in sub-Saharan Africa but which has also been, and remains, critical within our own society. Such fear still exists, so people are unprepared to talk about their condition and others are too frightened to face it when dealing with people pastorally or medically.

I remember, as I am sure do many other noble Lords, that some 25 years ago people whispered about the terrifying implications of the growth of AIDS. Such whispering began on the boundaries of some of the homosexual communities in North America. Now, a generation on, this is no matter for whispering about, nor indeed is it the rumour of an impending crisis. The crisis is already upon us and it is also no longer an issue for homosexuals alone; it affects all parts of our community. The crisis is upon us and we owe it to each other as a society to respond with all the resources that we can effectively muster.

16:50

[Baroness Healy of Primrose Hill]

First, I congratulate the noble Lord, Lord Fowler, on securing this important debate on World Aids Day and must say how privileged I was to have served on the Select Committee that was so expertly chaired by him.

The report calls for urgent action by the Government and I wish to highlight two recommendations in particular. Recommendation 72 states:

“HIV awareness should be incorporated into wider national sexual health campaigns, both to promote public health and to prevent stigmatisation of groups at highest risk of infection. We recommend that there should be a presumption in favour of including HIV prevention in all sexual health campaigns commissioned by the Department of Health”.

Recommendation 139 states:

“Ensuring that as many young people as possible can access good quality SRE”—

sex and relationship education—

“is crucial. We recommend that the Government’s internal review of PSHE”—

personal, social, health and economic education—

“considers the issue of access to SRE as a central theme. Teaching on the biological and social aspects of HIV and AIDS should be integrated into SRE”.

The report makes it clear that although there is a widespread assumption that the danger has gone away, nothing could be further from the truth. Thousands of people are still being infected every year and the number of those diagnosed with HIV continues to grow relentlessly. Next year it is estimated that there will be 100,000 people with HIV in the UK. Although medical advances have ensured much better treatment and enabled those diagnosed with the illness to live much longer thankfully, serious medical and mental health problems remain for many with HIV.

As the report states:

“Patients can now live with HIV, but all those infected would prefer to be without a disease, which can still cut short life and cast a shadow over their everyday living”.

I highlight those two recommendations as part of the way forward to help prevent the disease and to increase understanding and tolerance by the public for those who have contracted the virus. The problem of stigma has already been raised by the noble Lord, Lord Fowler. It leads to isolation and fear of getting treatment and possibly prevents people seeking a test in case they are found positive and excluded by their community. Our report argues that the awareness of responsibility and risk must extend to the population as a whole, and general campaigns may be necessary to educate the wider population. Evidence from charities noted by the Select Committee suggests that a general HIV prevention campaign would be valuable. As the report says in paragraph 100:

“Discrimination against those affected by HIV is based, at best, on ignorance and, at worst, on prejudice, and we unreservedly condemn it. This underlines the need for a general public awareness campaign on HIV”.

I am particularly disappointed that the Government have responded to this by saying:

“We do not support the Committee’s recommendations on the need for a national campaign aimed at the general public as there is little evidence that this would be effective”.

I hope they will think further on this and that with the publication of their new sexual health policy framework planned for 2012 they will have reassessed,

“where further work is needed to ensure a strong and sustained response to tackling HIV”.

Complacency is not an option when looking at the scale of infection in the UK. As the report states:

“There has also been a dramatic increase in the yearly number of new HIV diagnoses since the late 1990s. This peaked in 2005, with more than 7,800 new diagnoses ... In 2010, there was a year-on-year increase for the first time since then, with an estimated 6,750 people diagnosed”.

By next year, the report states, and I repeat, that the figure for people living with HIV is likely to be above 100,000.

The need to increase awareness remains, and so does the need to ensure that young people are taught about the illness and how to guard against it. The committee heard evidence of the increase in numbers of young people contracting the virus. The Health Protection Agency report of 6 June 2011 states that,

“a quarter of MSM”—

—men who have sex with men—

“newly diagnosed in 2010 probably acquired their infection 4-5 months prior to diagnosis, with higher recent rates in younger ages”.

According to the HPA, in 2009 10 per cent of diagnoses for HIV were among those aged between 15 and 24 years old. The National AIDS Trust has highlighted that since 2000 new HIV diagnoses among 15 to 24 year-olds have risen by nearly 70 per cent and among young gay men they have more than doubled. As a generation grows up without memories of the widespread health promotion messages of the 1980s, spearheaded by the then Secretary of State, now our formidable chairman of this Select Committee, the noble Lord, Lord Fowler, reliable HIV information for young people remains essential.

Given the lack of either a vaccine or a cure, then,

“prevention is better than cure when there is no cure”,

as Dr John Middleton, vice-president of the UK Faculty of Public Health said. One of the best means of prevention lies in education. Present teaching looks at HIV and AIDS within the science curriculum. However, the separate subject of SRE, with its focus on broader social issues, which can increase levels of safe sexual behaviour according to the Sex Education Forum, should also be considered as part of HIV and AIDS prevention methods. While the report calls for the mandatory teaching of SRE in schools, the Government have indicated that that was,

“not the approach we are taking to education policy”,

and that it was,

“imperative that parents will maintain a right to withdraw their children from SRE lessons”.

Yet a recent survey commissioned by Brook, the charity, found that 43 per cent of young people said that their SRE was unsatisfactory or non-existent. More alarming is the recent Sex Education Forum research, which found that one in four young people did not learn about HIV in school, which was described by a government Minister, Nick Gibb, as “unforgivable”.

The Select Committee report states that,

“ensuring that as many young people as possible can access good quality SRE is crucial”,

and recommends that the internal government review of PSHE considers access to SRE as a central theme. In a report in 2010, Ofsted highlighted SRE as an area for improvement, finding that in a third of schools visited students’ knowledge of SRE was no better than satisfactory. In a previous report, Ofsted expressed concerns about teaching around HIV and stated specifically:

“In particular, schools gave insufficient emphasis to teaching about HIV/AIDS. Despite the fact that it remains a significant health problem, pupils appear to be less concerned about HIV/AIDS than in the past”.

I am pleased to see that the government response to this report states:

“The reviews of the National Curriculum and of PSHE by the Department for Education will take account of the Committee's recommendation”,

but where compulsion is not appropriate I return to the report's call for a national sexual health campaign. We cannot afford to let public awareness of HIV and AIDS fade away, and young people must be given the information either through such a campaign or by better education in schools or preferably both. It will help young people to learn to look after themselves and their health better and to increase their understanding and tolerance of those who live with the illness. The success of the “Don't Die of Ignorance” campaign in the 1980s should serve as a lesson to the Government to ensure that young people do not live in ignorance today.

16:59

[Lord Lexden]

My Lords, I join other noble Lords in congratulating my noble friend Lord Fowler most fervently on the excellent work of the Select Committee that he has chaired and on securing this debate on World AIDS Day. I approach any event involving my noble friend with trepidation. To my shame, I did not always have the answers to the perfectly straightforward questions that he asked me at Conservative Central Office, where I worked when he was party chairman nearly 20 years ago, yet with his customary kindness he always seemed to forgive me.

This is an immensely important occasion that should be noted by people and organisations that share the deep concerns that have been expressed so movingly in this House today. The Motion before us refers to the whole United Kingdom. The matters that we are considering affect all parts of our country. I am above all conscious of their impact on Northern Ireland, the place that has been closest to my heart since the 1960s when I began to study its history and went on to teach, along with British history, at Queen’s University Belfast. Political responsibility for all health services rests of course with the devolved Northern Ireland Executive, but on this day above all the interests of those suffering as a result of HIV/AIDS in the Province should surely form part of our general UK deliberations.

Northern Ireland has just one laboratory dealing with the results of tests carried out throughout the Province. It therefore enjoys a high degree of accuracy in its data. Equally importantly, the lab can gather evidence of rates of testing from all sources, enabling it to pinpoint areas where the most rapid improvement can be made. Over the years, Northern Ireland has enjoyed a relatively low prevalence of diagnosed HIV, but recent trends suggest that this may well be changing. The Health Protection Agency recorded 79 new diagnoses of HIV in Northern Ireland in 2010, which is a 316 per cent increase on new diagnoses in 2001. The increase for the United Kingdom as a whole over the same period was around 20 per cent. Rates of testing in Northern Ireland are not increasing in response to the state of affairs as rapidly as they should. Less than 10 per cent of all HIV tests are being performed in primary care settings. The vast majority are being done in clinics or in hospital.

As our Select Committee’s report has made clear in comments endorsed so firmly by noble Lords speaking in this debate, the stigma and discrimination that continues to surround HIV must be eliminated. That is absolutely crucial in Northern Ireland if the number of tests performed in GP surgeries is to increase significantly. As my noble friend Lord Fowler stressed, and as other noble Lords have said, early diagnosis improves the chances of more effective management of this disease. Too many deaths of HIV positive adults are due to the diagnosis coming too late for effective treatment. As has also been pointed out, early diagnosis of a patient is also of major importance in preventing the spread of infection to others.

How might earlier diagnosis be promoted in Northern Ireland? First, there is a strong case for the increased availability and accessibility of testing in areas where people might otherwise go untested. Almost one-fifth of GP practices in Northern Ireland did not perform a single HIV test last year. Of those that did, half performed three or fewer. In some places, the story is more encouraging. Northern Ireland’s south-eastern trust has made particularly good progress in increasing primary care testing, with a new clinic being established to serve the local community. It will be instructive to take note of the successes of the south-eastern trust and to consider how its innovations might best be extended to the rest of the Province.

There is also a strong case for the advocacy of point-of-care testing among targeted groups. Point-of-care tests such as the well known “determine” are easy to perform and can offer results within 15 minutes, which can be life-saving where time is of the essence. At-risk groups, such as the homeless, are not easy to contact and help if longer tests are employed, but we will not get the major increases in testing and early diagnosis that are needed in Northern Ireland without increased awareness among clinicians and staff of the issues surrounding HIV and AIDS, which often include the difference between them and the dispelling of misinformation.

Here too, there is some good news in the Province. The in-service HIV awareness training project began in Belfast during the hard-hitting campaigns of the 1980s initiated by noble friend when he was Secretary of State for Health. The project has made steady progress ever since. Around 60 HIV awareness trainers help staff and practitioners to understand the basic issues surrounding HIV and AIDS. They promote methods of early detection and diagnosis and address the changing character of the virus.

Since the project began, more than 40,000 staff have received training and the project has expanded to take in the south-eastern and southern trusts. The Belfast trust hopes that by 2013 the entire Province will be able to benefit from the training, which is devised in consultation with a wide range of organisations. In areas such as healthcare, which can have a high turnover of staff, projects such as this are vital in securing the quality and, importantly, the continuity of care that patients faced with an HIV diagnosis need.

In Northern Ireland, as in the rest of the United Kingdom, the advances that we have seen in medicines that help people to cope with HIV and AIDS must be accompanied by similar advances in the public understanding of the disease. If that does not happen, the disgraceful social stigmas that surround the issue will persist. The social aspects of HIV and AIDS are central if the goals advocated by this widely applauded report are to be met.

Public understanding, as we have heard, has certainly increased, but many of the stigmas that campaigns during the 1980s highlighted still persist for those with a positive diagnosis. Research carried out by the HIV support centre in Belfast on 40 of its clients reveals that over half have been verbally assaulted, harassed or threatened in the past 12 months as a result of their HIV status, and over 25 per cent had felt suicidal. One respondent to the 2010 people living with HIV stigma index said, “We are all afraid of rejection. The moment you tell someone you are HIV positive they just run a mile and never look back”.

These are the attitudes that we must change. Not only are they hurtful and harmful to people with a diagnosis, they are also likely to deter people from seeking a test in the first place. It is shocking to think that someone might prefer to wait until a test is carried out in an intensive care unit than come forward at an early point because of the risk of being stigmatised and rejected by those around them, including their families and friends. Sadly in Northern Ireland this remains all too common.

If only we could create new antiretroviral medicines overnight. Sadly, as we have heard in this debate, it could be many years before the next great leap forward in helping people to live with HIV and AIDS. What we can begin overnight is a redoubled commitment to increasing public education on HIV and AIDS, a commitment to reducing the stigmas that HIV-positive people face, and a commitment to preventative messages and projects such as needle exchanges as highlighted in this report.

We must continue to press for three things. First, more accessible testing is needed in places where people are unlikely to go to a clinic or hospital until it is too late for effective treatment. Secondly, more training is needed for staff and professionals in order to increase the level of testing that is being performed outside hospitals or clinics. Finally, unequivocal support must be given to organisations, voluntary or publicly funded, that are helping to break down the barriers associated with HIV and AIDS today, and helping those struggling with the condition to lead happier lives. We must end the situation in which people considering being tested must perform some kind of social versus medical cost-benefit analysis. Only then will people with HIV receive all the benefits of early diagnosis. Only then will the public at large become fully aware of the true nature of HIV in the United Kingdom and the great steps forward that have been taken. Only then will those who follow us in the next generation be adequately equipped to protect themselves against its threat.

Keats's beautiful poem, To Hope, contains the following poignant lines, which seem particularly apt today, and I conclude with them:

“Whene'er the fate of those I hold most dear

Tells to my fearful breast a tale of sorrow,

O bright-eyed Hope, our morbid fancy cheer;

Let me awhile thy sweetest comforts borrow”.

17:10

[Lord Rea]

I thank the noble Lord, Lord Lexden, for his contribution and congratulate him on it. It was very refreshing to have someone who was not on the committee bring us some fresh insights and information from a part of the world which we did not visit.

Like all speakers, I congratulate the noble Lord, Lord Fowler, not only on his excellent introductory speech and on securing this debate on this day, but, more than this, on his dogged persistence with this issue over the past quarter of a century and his courage and correct judgment in putting HIV/AIDS so startlingly on the map in the mid- 1980s. As my noble professional friend Lady Tonge said, he faced strong disapproval and opposition from powerful members of the establishment, despite getting all-party support. He wisely persisted with the tombstone public education campaign as well as the controversial but highly successful needle exchange scheme which he has told us about. As result, the UK became the most successful country in the world in curbing the epidemic. In the developing world and some developed countries, the epidemic has continued to spread and, in sub-Saharan Africa, has resulted in the expectation of life for the whole population being reduced by 10 to 15 years with serious socioeconomic effects. But that is another debate, although a highly important one.

It was a privilege to serve on the Select Committee. I thank not only our chairman and our specialist adviser, Professor Anne Johnson, but also our two brilliant, dedicated clerks and, last but not least, our highly efficient secretary Deborah Bonfante, who handled the mountains of printed paper which passed before our eyes smoothly and effectively. Our witnesses, whether scientists, clinicians, voluntary sector workers or patients, were always knowledgeable and helpful.

I shall concentrate on some clinical and epidemiological aspects of the epidemic, emphasising, as all speakers have done, the imperative need for better prevention. This was the common thread which drew all our witnesses together and is the theme of the report. It is often said that the persistence of HIV in the developed world is at least partly due, as the noble Baroness, Lady Tonge, said, to the availability since the mid-1990s of antiretroviral treatment that prevents HIV developing into AIDS, and that this has resulted in greater risks being taken by some sections of the sexually active population now that HIV is no longer a death sentence. Even if this was only partly true, it indicates widespread ignorance of the burden that living with HIV can cause, as several noble Lords have most vividly described, even when ARV treatment is being correctly given. Though some of them will live a full lifespan, others will not be so fortunate. There are often unpleasant side-effects, though they are now less common since combination antiretrovirals have become more refined.

The future health and lifespan of HIV-infected people receiving ARV depends very much on the stage that the infection has reached when treatment is started. Early diagnosis after infection is thus extremely important. ARV drugs are much less effective when there is a high viral load, so that full blown AIDS symptoms which are difficult and expensive to treat can develop, even when the subject is on ARV treatment. Fifty per cent of newly diagnosed cases in the UK are classified by the HPA as being at a late stage of infection, with a CD4 cell count of less than 350 per cubic millimetre, just over half of which are severely immunocompromised, with a CD4 count of less than 200. The late diagnosis rate varies from group to group, being highest among heterosexual men—63 per cent of them. It is estimated by the HPA that 22,200 people are living with HIV infection in the UK who are undiagnosed. Most of them are unaware of their condition; some of them are developing high viral loads which means that they will respond less well eventually to treatment as well as acting as a reservoir of infection.

HIV carriers who are being successfully treated, on the other hand, have a very low infectivity of 1 per cent or 2 per cent but even this low rate means that they must still use a condom or take other steps to reduce the chance of passing on their infection. So while acquiring HIV infection is no longer an automatic death sentence it is still a life sentence—it means a lifetime of medication and the other serious drawbacks I have described—a much worse fate than that of other sexually transmitted diseases which can now mostly be treated and cured.

In addition, as the noble Lord pointed out so vividly, people living with HIV are subject to a number of social consequences. We heard from several of our HIV-positive witnesses examples of stigma against people with HIV in employment and in social settings, despite successful ongoing treatment. Frequently there are psychological symptoms, sometimes very severe, including suicide. Life insurance policies and mortgages are difficult or impossible to obtain by HIV-positive people, according to the Terrence Higgins Trust. If after perseverance a policy is agreed, the premium is highly loaded and no cover will be given for illness or death from an HIV-related condition. That puts people at a huge disadvantage when attempting to live a full life, and buying a house, for instance.

The noble Lord, Lord Fowler, and others have described the increasing financial burden caused by HIV infection, particularly the cost of drugs. This cost is increased if HIV is detected late and complications have to be treated in hospital. But the main cost of HIV comes from the persistence and spread of the epidemic through sexual contact with HIV carriers who are not aware of their HIV status. As other noble Lords have pointed out, this is why one of the main messages from our witnesses and the report is the need to widen the screening net by testing in more settings than previously. In fact I suggest testing wherever a blood test is being carried out for any reason and on certain other occasions, for instance when a patient is having a health assessment or being registered at a general practice, for hospital out-patients or in-patients and in STD clinics even when a blood test was not originally planned.

The case for this policy is very well argued in the Time to Test for HIV report, mentioned by the noble Baroness, Lady Gould, published this year—or was it last year?—by the HPA. We visited a group practice in Brighton where routine HIV testing was done as well as the carrying out of general healthcare of HIV patients being followed for their HIV and treated by at the HIV unit at Royal Sussex County Hospital. When a positive test result meant that someone had a fatal disease there was a policy of only testing when suitable counselling for this eventuality was made available. Now that a positive test does not have quite such a dramatic meaning, it is acceptable for the test to be carried out by any suitably trained professional, providing of course that the consent of the patient is first obtained; an opt-out possibility must always be offered.

I have not covered our recommendations at all systematically. There are 53 of them; each has been covered by the Government’s response and many of the report’s recommendations have been accepted. I am particularly pleased that the recommendation to make home testing legal and quality controlled has been accepted. This was the suggestion of many of our witnesses. Also welcome is the lifting of the requirement for all overseas visitors to have to pay for HIV treatment. Lifting this charge makes good public health sense.

I was, however, disappointed in the Government’s response—other noble Lords have mentioned this—to paragraphs 236 and 237 of the report, which called for the integration of HIV and sexually transmitted disease services. This is particularly relevant in the light of the changes envisaged in the Health and Social Care Bill now in Committee in your Lordships’ House. I hope that the noble Baroness who is replying to this debate will be able to raise in Committee some of the issues that I am about to describe.

We heard justifiable concerns about the split between HIV treatment services to be commissioned by the National Commissioning Board, and the provision of prevention services for HIV and other STIs in genitourinary medicine clinics to be provided by local authorities—through their ring-fenced public health budgets, presumably. The proposed changes claim to enable integration between the services, but in this case it seems that the reverse is being proposed. Many PCTs have increasingly brought HIV and STI services together under the same roof, as they logically should be. In this case the opposite seems most likely to occur. Perhaps the noble Baroness can tell us the department’s latest thinking on this particular problem.

I was going to speak also about the future of the HPA, but that has been covered extremely well by the noble Baroness, Lady Masham, and, as I have now been speaking for 12 minutes, I shall end on that point.

17:21

[Lord May of Oxford]

My Lords, I begin by paying tribute to the noble Lord, Lord Fowler, with sincerity undiminished by the repetition. He did a superb job of chairing an excellent committee. I thought I would be unique in paying tribute to our special adviser, but the noble Lord, Lord Rea, anticipated me. Anne Johnson, with whom I have had the privilege of working and publishing, for that job, was not merely the best person in Europe but the best person, arguably, in the world. She was absolutely superb. She has a connection with this House that is not widely appreciated. If my memory is correct, she is the niece of a very distinguished late Member of the House.

I think the Government’s response to our report was basically a good one. That must be borne in mind as I now go on to air the respects in which I found it disappointing. My speech will be perhaps a little different in that it will be more academic. However, it will be no less impassioned.

I have on a previous occasion drawn a graph with my hand and scattered my papers down the aisle and I risk doing it again. It is worth reminding the House what has happened not only with HIV but with sexually transmitted diseases. When HIV first appeared it was mainly among men who had sex with men and among drug users, and its incidence rapidly went down in this country, Australia and New Zealand because of effective measures such as those we have heard about. It then, for about 15 years, ticked along at a low level, slowly further declining among drug users and men who have sex with men and slowly increasing among heterosexuals to keep it at a roughly constant low level. However, over the past six, seven, eight years it has begun an upswing that shows no sign of diminishing. The question before us, which we have heard a lot about, is: why is this?

It is a fact that many studies of people—particularly young people—reveal that they are less well informed and less concerned about sexual health than was the case 20 years ago. As our report says, this is possibly because diagnosed early the majority of people with HIV can expect a near normal life expectancy. That is true and good and it needs emphasis, not least because it has a complicated and curious association with the stigmatisation initially that HIV was a death sentence. While that is true and good at the moment, it is not quite as simple as it is presented. We do not yet have clear sight of a vaccine. I declare an interest in this subject as I am co-author of the first and contentious prediction of the demographic impact of HIV on sub-Saharan Africa that was grossly pessimistically at odds with the World Health Organisation and others, whose models were much more elaborate but epidemiologically stupid. To my great regret, we were right.

I have a continuing interest in a fact not commonly appreciated in debates such as this. Although our almost magical understanding of the interaction between an individual virus and the immune system cells can enable us to design a drug or sequence of drugs that suppresses viral replication, we still do not have an agreed understanding of the pathogenesis—of how the initial infection is handled. Escape mutants appear and at first they are handled, then finally the immune system goes down. My view is that it will be difficult to have a vaccine before we have an understanding that matches the brilliant descriptive molecular biology with a more complex sense of the incredibly complex dynamics of the immune system and the many escape variants that it is trying to handle.

At first, we could not handle the resistance that quickly evolved to the first antiretrovirals. My research group, among others, was involved in that in the 1990s. We now have a mixture of a richer panoply of drugs, combined with a better understanding of how to use them, and we can keep people alive—but how long that is going to last is not something that anyone can sign off on. It is not a question of whether eventually, as with any set of such agents, we will finally run into a barrier; it is not a question of whether but of when, in relation to the timescale of when we have a vaccine. One thing that we sought in our discussions was an estimate of that. I am pleased to say that very good people working on this are of the view—which I share—that we probably will have a vaccine before we run into the wall. But we do not have a guarantee.

We have a very good reason, well beyond that of simple compassion or the financial details that we have heard about, not to take our foot off the pedal but to keep emphasising the need to slow down and reverse the increase in the incidence. This is a three-pronged thing. We need uninfected people to appreciate the need to be more careful; we need infected people to be diagnosed earlier so that they can be treated earlier, which will make them less infectious to a degree; but to do that, the third prong, we need infected people to know that they are infected. That brings us to some of the key recommendations that did not get the in-your-face affirmation that I would have wished.

The first recommendation is that:

“HIV testing should be routinely offered and recommended, on an opt-out”—

not an opt-in—

“basis, to newly registering patients in general practice, and to general and acute medical admissions”.

I realise that that will not be popular with some groups, but that is what we recommended. We also said that routine and opt-out testing should be offered in other circumstances that are related to the trend in the upward rise of sexually transmitted infections—hepatitis is one, or associated things such as TB. The Government’s response to this was broadly welcoming, but speaking from my five years’ experience as Chief Scientific Adviser first to Major and then to Blair as a permanent secretary embedded as a kind of anthropological tourist in a strange culture. I recognise, I am afraid, in the response to that recommendation, the caution and elevation of process over product that is characteristic of our well meaning and excellent Civil Service. I would like there to be a much more positive and unambiguous affirmation of the need to do that. I have resisted expressing that thought with colourful Australian adjectives.

Another of our recommendations is that we repeal the ban on home testing kits, with appropriate caveats. The Government supported us, but with subtle nuances of language they did not accept the recommendation, and said that they would review the policy. They will think about thinking about it. That is not good enough.

What is totally indefensible on ethical and common-sense grounds is our current policy that visitors or others without the right to live here can be freely diagnosed as having HIV but cannot be treated. This is ridiculous simply on common-sense financial grounds, much less unambiguous ethical grounds, because it demotivates people from even being tested. The government response did not agree with or even support us. It used the dread words “review policy”. That is not good enough.

In general, we also recommended,

“that the Department of Health undertake a new national HIV prevention campaign aimed at the general public”.

Here I shall go off-piste to offer a personal opinion on how best to do this. I am strongly of the view that wherever possible this sort of activity should be delivered though the NGOs, not the NHS. That is because some 10 years ago £400 million was put into a campaign on sexual health by the Department of Health. In the event, only 31 of 191 primary care trusts spent a penny of the money on sexual health, and none spent any of it on awareness campaigns. What fraction of that £400 million was given to NGOs? It was 1 per cent. It would have been much more effective if 1 per cent had been given to the primary care trusts and 99 per cent to the NGOs.

In summary, despite the negative tone of some of the things I have said, the Government have given us a welcoming response and they have a proud record in this, as we have heard. I was living in the United States when the committee of the noble Lord, Lord Fowler, was acting, and we watched in despair and distress as the same recommendations coming out of the US National Academy of Sciences to Ronald Reagan were seen as the kind of immorality you expect of a bunch of academics. I end by emphasising again that we have done well but we are not doing as well now. We have to put our foot back on the pedal and we have to be focused on effective prompt action, not on endless review.

17:34

[Lord Black of Brentwood]

My Lords, like other noble Lords who have spoken, I warmly welcome the publication of this first-class and comprehensive report from the Select Committee, and I am delighted that we have an opportunity to debate it on such an important day.

If I may, I start with a personal tribute to my noble friend Lord Fowler. For nearly a quarter of a century, his name has been inextricably linked with this issue and he has courageously trod an often lonely path. The Don’t Die of Ignorance campaign was a phenomenally bold move. Looking back on it 25 years later, we can see that it was a seminal moment in the history of HIV and AIDS that without any shadow of doubt saved countless thousands of lives. I say to my noble friend that I was just over 20 when the campaign was launched and was therefore part of a generation of gay men who, without the very stark warnings the campaign contained, could have fallen victim to what was then an untreatable disease. My generation owes an enormous debt to the foresight and courage of my noble friend, those who worked with him and the pressure groups that so assiduously supported him. They gave us the gift of life.

I wholeheartedly endorse the conclusions of this compelling report, in particular the emphasis on early and better testing. There is no doubt, as we have heard so often during this excellent debate, that the issue of late diagnosis is now the greatest challenge in dealing with HIV/AIDS. As the report makes clear, delays in dispensing antiretroviral therapy have grave health implications for the person diagnosed, as well as the risk of onward transmission. As the noble Lord, Lord Rea, touched upon, the figure in the report that 52 per cent of adults diagnosed with HIV in 2009 were diagnosed late is shocking. The problem is even higher among those aged over 50, at over 65 per cent. This is becoming not so much a problem of the young but a problem of the middle-aged.

When treatment of HIV is so effective and easily accessed, with rarely any of the problems of unpleasant side effects that once occurred, there can be no excuse for this. We need, therefore, above all else, to get to the roots of this issue. That is what I would like to concentrate upon, drawing heavily on the report.

There are undoubtedly many causes—after all, this is a very personal issue—but I would like to highlight three. One is certainly education. I do not just mean what is taught in schools, where the report has valuable recommendations on incorporating sex and relationships education into the national curriculum to ensure that children are taught about security in intimate relationships; it is more the importance of education throughout life. As the problem of late diagnosis among those aged over 50 is real and pressing, perhaps we need to find, for instance, novel ways to educate older audiences too, by deploying information through the media and the opinion-forming channels which influence those in middle age.

The second is the role of GPs and health professionals. The report rightly highlights how,

“a major obstacle to more widespread testing seems to be with those who could offer the test”.

In other words, some GPs avoid recommending a test to those who might have HIV because of misconceptions about the need for counselling, time constraints and, above all, stigma.

When I was preparing for this debate I visited the excellent Bloomsbury Clinic within the Mortimer Market Centre in Camden a few weeks ago. I heard a dreadful story there of someone who made his way to the clinic after having been ill for two years with a variety of conditions that should have shouted to his GP “HIV” from the rooftops. This person had never been given a test by his GP; by the time it was discovered, when he found his way to the clinic, full-blown AIDS had set in and the person involved lived barely a few weeks.

That sort of situation, rare though it is, is completely unacceptable. I hope that the recommendations in the report on the need for practitioners to become more confident in identifying those at risk of HIV are acted on without delay.

However, perhaps the single most significant problem remains that of stigma, as many noble Lords have said, most movingly, perhaps, in the examples given by my noble friend Lord Lexden. Of course, there have been remarkable strides in addressing the fear and misunderstanding of HIV, which are the wellsprings of stigma. Enormous credit must go to those many organisations—we have heard about the National AIDS Trust and the Terence Higgins Trust, which do remarkable work—which have fought tirelessly to combat HIV, as well as to the wonderful clinicians who work with patients and give them the confidence to deal with it.

However, there is much more to do and it is absolutely central to the issue of diagnosis, because fear of stigma and fear of testing are inextricably linked. Consider this: in the 2009 People Living with HIV Stigma Index, as we have heard, one in eight HIV-positive people living in the UK reported being physically harassed in relation to their HIV status in the previous 12 months. More than one in five had been verbally assaulted or threatened.

My noble friend Lord Fowler quoted from the survey on public knowledge and attitudes undertaken last year by the National AIDS Trust, which does such fantastic work in this area, about how people would regard a neighbour who was diagnosed with HIV, quoting, quite rightly, “Love thy neighbour”. There is an even more shocking figure in that survey that 20 per cent of respondents disagreed with the proposition that,

“if someone in my own family told me they were HIV positive, it wouldn't damage my relationship with them”.

Therefore one in five would have a more negative view of someone in their own family who was diagnosed.

Four areas of action need to be taken to tackle stigma, and the report very helpfully points the way in some of them. The first relates to healthcare professionals; sadly, as the noble Baroness, Lady Masham of Ilton, said, half of all discrimination reported by people with HIV is in healthcare, particularly in the case of dentists and GPs. Yet those are the very people who should be encouraging testing then, when somebody is diagnosed HIV positive, ensuring that they get swift and effective treatment from experts at the brilliant HIV centres around the country. NHS staff need consistent, high-quality and, above all, continual training about not just the basic facts regarding HIV but the unacceptability—indeed, the unlawfulness—of HIV discrimination, and about the actions that need to be taken to ensure that patients with HIV have the respect and support they deserve. Here, the new NHS Commissioning Board has a vital role to play in requiring anti-stigma training, especially in primary care.

The second area relates to general public information. Undoubtedly, “Awareness of HIV”, in the opening words of the report, is “below the public radar”. What that means is that public understanding of HIV transmission has also decreased significantly in the past decade. The Ipsos MORI surveys commissioned by NAT, which we have heard mentioned today, have over the past few years shown an increase in the number of people believing HIV can be transmitted through kissing. Less that half those questioned cite sharing needles as a possible route, although that is actually the second most common transmission method. These misunderstandings foster stigma because of the link between poor understanding of how the disease is transmitted and a judgmental attitude towards people living with it. Education in schools is obviously vital here, but so are local sexual health campaigns and information to ensure that, at the local level, people have accurate information on how HIV is and is not transmitted.

The third area relates to the media; here, I must declare my interest as executive director of the Telegraph Media Group. Undoubtedly, HIV scare stories in some small parts of the media still foster the fear that is the basis of stigma. While HIV and its ramifications are complex issues to report, not least because they can often become entwined with other emotive subjects such as immigration, there is never an excuse for inaccurate reporting when it can have a terrible human cost. Some progress has been made. The National AIDS Trust, working with the help of the Press Complaints Commission, has produced excellent guidelines for reporting HIV which have started to make an impact. They cover the law, the myths, the vocabulary and issues about testing. They are extremely important in tackling stigma and I encourage their wide dissemination in newsrooms across the media.

My fourth point relates to public policy. The Government's recent mental health strategy has, as one of its six objectives:

“Fewer people will experience stigma and discrimination”.

The Government are, rightly, backing this with significant funding. HIV is in many ways comparable to mental health in terms of conditions that arouse fear and foster stigma: yet there is no strategy or funding in place specifically to tackle HIV stigma and its resulting harms to public health. As the noble Baroness, Lady Gould, said earlier, such a strategic policy could work across departments and disciplines, involving education and teachers, the police, social workers, the media and, above all, healthcare professionals to tackle stigma at its roots.

Of course, money is tight but investment in a strategy of this sort would be perhaps the most cost-effective money the Government could ever spend. Various noble Lords have quite rightly pointed out the simple maths, which I am afraid were never a strong point of mine. I would look at it this way: £1 million spent on an HIV stigma strategy would be recouped by preventing just four of the 2,656 confirmed UK-acquired infections diagnosed in 2010. It is just four; once we get to the fifth, we have started saving. If it were successful, the long-term savings to the public purse could be considerable. Taken together, these four steps could significantly help tackle the stigma, encourage more people to get tested early, help prevent onward transmission of the virus, and ensure a better quality of life for the 100,000 people who will soon be living with HIV.

In my closing comments, I want to mention those 100,000 people. Thanks to effective treatment, there is no reason that they should not lead long and healthy lives. However, we have to recognise that HIV is now a chronic illness, that our understanding is relatively new, and that we do not know what its long-term consequences might be, or the long-term effects of the drug therapies, particularly in terms of other conditions that those living with HIV might contract. If you have HIV, every illness that you get could potentially impact on your treatment regime. As people live longer, this is going to become a much more complex issue to deal with and the model of care, as the report notes, will need to change accordingly. That means a holistic approach to treatment, with regular access to specialists in the field for all those with HIV.

For a number of reasons, some of which I mentioned earlier, GPs may not be the best suited to this task. I am cautious of any moves to give them primary responsibility in this area when it is specialist care which is going to be increasingly vital as the health service copes with an increasingly elderly population living with HIV. Ideally under the new commissioning arrangements, designated centres of excellence for HIV treatment and care should be the ones responsible for ensuring the most effective, convenient, continuous and flexible therapy for all HIV patients. I believe this would be likely to offer better longer-term results in quality of care than the strategy of giving GPs shared responsibility with specialists.

In my remarks today, I have tried to touch on a wide range of subjects. I could go into nearly as much detail as the brilliant report that we are considering. That is a point that underlines how complex this issue is in public policy terms. We are fortunate indeed that this report has given us the opportunity for such an important debate. I hope that in its way it can be as effective as the original campaign 25 years ago—this time not just so much about saving lives, but improving the quality of those lives. That is the great and noble task ahead.

17:47

[Baroness Massey of Darwen]

My Lords, I, too, thank the noble Lord, Lord Fowler, for securing this debate and I thank the Select Committee for producing such a timely and thorough report. I was not a member of that committee, but I want to make some general comments about prevention campaigns, then focus on prisons and schools and ask the Minister about the Department of Health’s new sexual health policy framework. It is an honour to follow so many well-informed, even poetic, speeches. I know that all those noble Lords who have spoken today have a long-standing commitment to HIV/AIDS prevention and treatment. In thanking Lord Fowler, I have to say that he is one of my public health heroes.

At a time when HIV/AIDS was emerging as a health threat, when the public response was one of fear, confusion and prejudice which sought to stigmatise certain groups, the noble Lord remained calm and reminded us that this was a health issue that needed to be tackled firmly. I know this because I was working in public health at the time, and how glad we were that he was in post. Yes, there were, I believe, icebergs and tombstones—sometimes misinterpreted by the general public—and maybe we would do some things differently now. However, the noble Lord, Lord Fowler, certainly had a great impact on those campaigns of public awareness.

The rampant and unthinking prejudice which emerged then still has echoes in the ignorance and dangerous attitudes of some people who oppose sex education and sexual health promotion today. It is interesting that other public health issues, such as vaccination, smoking, wearing seat belts and so on, are not connected to sex, or are perhaps only marginally, and so are not fraught with the connotations attributed to HIV and AIDS. In the government response, the high cost of treatment is described as a compelling investment. In 2010, prevention could have saved over £32 million annually. I was pleased that the committee recommends both targeted, intensive campaigns and, very importantly, that awareness should be incorporated into wider national sexual health campaigns, with evaluation commissioned by the Department of Health.

There should certainly be a new national HIV prevention campaign targeted at the general public. Let me say briefly why this is important. There has not been such a campaign for a long time. The high profile of HIV/AIDS has decreased and the problem of HIV infection and other sexually transmitted infections is increasing. We are in a new era of communications. We now have the internet, social networking of many kinds and highly sophisticated mobile phone applications. All are wonderful but they can also be misused, as we have seen in grooming and internet and mobile phone bullying. I have sympathy with the support of the noble Lord, Lord May, for NGO involvement in such campaigns.

Apart from HIV and AIDS, there are other dangers, some rather curious. I was in Nottingham last week, discussing substance misuse and public health. I must declare an interest as chair of the National Treatment Agency. As I learnt in Nottingham, there is concern about the injection of steroids in relation not just to bodybuilding but to the desire for the body beautiful. There is also concern about the injection of a substance that will give a body tan that also enhances libido. In Nottingham, people were found who have contracted HIV/AIDS and hepatitis B through these practices. It is very worrying and a call to renew our look at how we campaign.

Prevention campaigns have to be part of general health campaigns, using ever more sophisticated and subtle means of communication with adults and young people. I am also glad that the committee has shown concern for future structures in public health. Such concerns were highlighted by the noble Baroness, Lady Tonge, and many others. As the report points out, sexual health has often been the poor relation of the health service. The voluntary sector has done an enormous and valuable amount to tackle HIV and AIDS. We all wait to see how drug, alcohol and sexual health services will fare in future public health services with a ring-fenced budget. They must not be lost among other demands. I know how ring-fencing has in the past enabled drug treatment to improve the numbers in treatment and waiting times. Health and well-being boards and other local monitoring groups must be vigilant about keeping HIV on the agenda.

The public health White Paper, Healthy Lives, Healthy People, spoke of working,

“towards an integrated model of service delivery to allow easy access to confidential, non-judgemental sexual health services”.

It points out that testing should be a priority of any prevention policy. Prevention has been spoken about a great deal today. The testing of pregnant women has been a success. Other testing, such as by GPs and home testing, could be effective, as many others have pointed out.

I now want to talk about schools, which were referred to by others, including my noble friend Lady Healy. Schools should be considered part of the community and, therefore, connected to community services. There have been good examples of older pupils in schools visiting Brook Advisory Centres as part of the PSHE programme. This encouraged them to seek advice, perhaps after leaving school. Schools should also teach about public health issues. The danger of HIV infection should be taught as a specific issue, not just in sex education—if it exists. I should like to see secondary schools teaching compulsory modules on public health. This would go alongside teaching about respect for oneself and others, decision-making, self-esteem and communication skills. All these skills can reinforce the ability to behave responsibly in relation to sex and substance misuse. I am not talking here about explicit sex education for five year-olds and I do not believe that schools are either. Those who rant about sex and five year-olds should visit some schools and inform themselves about the responsibility of school governors, some of whom are parents, for the curriculum.

We have suffered recently from a barrage of misinformation and prejudice about teaching sex education. Such misinformation is an insult to teachers, parents and school governors and it should have a health warning on it. Primary schools, including five year-olds, can discuss relationships with family, friends and the community. Children have rights and responsibilities. They can learn about keeping themselves and others safe. Later, this foundation of rights and responsibilities can be used to teach about drugs, alcohol and sex. Lack of information and misinformation are highly dangerous.

I turn briefly to offender health. People in prisons are a high-risk group in many ways. Among them there are significant levels of illiteracy and mental health problems. We know that some prisoners use drugs and have sex. But, significantly, prisoners leave prison and may spread infections. The recent report on prisons and drugs chaired by my noble friend Lord Patel of Bradford recommended: a cross-government strategy; a streamlined commissioning system; a framework for service delivery; user and carer involvement—that is very important; and links to the wider criminal justice and health and social care systems. For HIV we need all those things. We need guidance to prison governors and clarity on best practice in managing HIV in prisons, to include provision for prevention, testing and treatment and data collection. I hope that clinical commissioning groups will address, monitor and evaluate the outcomes of interventions in prisons. There must be continuity of care. The programmes to identify substance misuse and provide individual key workers to help with employment, housing and other social issues have proved highly successful.

The report on prisons highlights many significant issues for HIV and AIDS prevention and management of services. I very much look forward to following what happens in the new structures for public health. I hope that the Minister can give us a preview of the sexual health policy framework. I also hope that, perhaps in two years’ time, the noble Lord, Lord Fowler, will reconvene a committee to look at the outcomes of these new structures and the impact of the sexual health policy framework. As usual he has done a great favour to those concerned for public health. I again congratulate him and the committee on this debate.

17:57

[Lord Gardiner of Kimble]

My Lords, it has been a great privilege to serve on the Select Committee under the chairmanship of my noble friend Lord Fowler. It has been a particular privilege to serve with colleagues across your Lordships' House, our professional adviser and clerks, who all know so much more than I do about this devastating and serious virus.

I fear that I may have asked some all too obvious questions. My first was because I failed to understand—and still do—why antiretroviral drug prices need to vary across the country. I am a supporter of localism but surely it is desirable to procure nationally if this means that more competitive prices can be achieved across the country and significant savings can then be utilised on the front line of treatments or, indeed, on prevention measures. In the Government’s response to the committee's report, it is acknowledged that beyond London regional procurements have been less successful. However, I do not see that rectifying this has been viewed as a priority. I hope that I am wrong. Predominantly, it has been a privilege to hear directly from exceptional professionals, dedicated volunteers and courageous and inspirational people who live with HIV.

Your Lordships have already heard that in this country the stark facts are that the number of people living with HIV is increasing—it is now more than 100,000—with treatment costing £1 billion a year. In the world some 34 million are now living with HIV/AIDS. The rate of infections in the world is thankfully slowing yet in the UK the rate is increasing, so now is the time for the UK to tackle this virus with renewed determination. With early diagnosis we can enable the majority of people with HIV to have as normal a life as possible. The drugs have transformed the prospects for so many. However, we must now concentrate even more tenaciously on prevention. This is the key to all our aspirations to defeat HIV/AIDS and eventually eradicate it.

Some prevention measures in the UK have been outstanding successes. Many noble Lords have already referred to the clean needle programmes and routine antenatal testing of pregnant women. More generally, however, our financial commitment to prevention campaigns for too long has been disproportionately low. The lifetime cost of treatment of a single patient is nearly £360,000. Yet £2.9 million, as has already been referred to, is all we will spend on national prevention programmes in 2011-12. The Government in their response recognise the benefits that investment in prevention would offer. We need to do more than that. We need action. There must be a far more robust attitude, a sense of mission on prevention, which my noble friend Lord Fowler so admirably galvanised and led in the 1980s.

We must be bold about prevention programmes. Is the UK rate of infection increasing because we have not been? Of course our efforts should be focused on the parts of the community most at risk. But should not HIV also be seen as part of the overall sexual health campaign? The more we place it in that context, the wider the message reaches. I do not understand why the Government are so adamant that a national campaign aimed at the general public, which the committee recommended, would not be effective. I apologise to the Minister, but when the national campaign led by my noble friend Lord Fowler is universally acknowledged as having been extremely effective, I do not understand the Government’s initial response. At the same time, the Government quite rightly accept that more needs to be done by all to address behaviour that increases the risk of HIV infection. I urge the department to look at this with urgency as it formulates the new sexual health policy framework. I am sure the department will be widely supported in being robust in considering all the options when prevention contracts end in March next year. I also hope that upon gaining new responsibilities, local authorities will prioritise prevention.

No responsible person underestimates the financial pressures we face in this country; new money is more than hard to find. However, we will fail to be cost effective if we do not direct scarce resources towards prevention. Even with the success of antenatal testing, last year over 70 babies were born HIV positive; that is, 70 children with the prospect of medication all their lives. It is a sobering and distressing thought and we must do better.

One element of serving on the committee which most affected me was learning about the consequences of late diagnosis in terms of quality and expectancy of life. Some 52 per cent of adults in 2009 were deemed as diagnosed late: heterosexual women at 59 per cent and heterosexual men at 66 per cent. Two-thirds of those over 50 were diagnosed late. That may be a profile that is not what many would have expected. Going further, 30 per cent of new diagnoses are in the very late diagnosis category. This is a frightening percentage with many adverse health implications.

In committee we discussed testing at some considerable length and received much evidence. The current situation surely warrants that we should look at the whole issue of testing and its expansion. Antenatal testing is now seen as a routine and uncontroversial procedure. Is this not the route we should now take? As part of tackling stigma and discrimination, should we not be looking to normalise as much as possible our approach to testing? Why cannot HIV testing on an opt-out basis—as the noble Lord, Lord May of Oxford, has already highlighted and as is recommended in our report—be routinely offered and recommended to new registered patients, to general and acute medical admissions and on entry to prisons? The wider we test, the more we can break down stigma. The more we do so, the more likely that people will come forward, be tested and, if necessary, receive medication. Therefore, I endorse the Government’s comments that HIV testing should be within the competence of all doctors and nurses, and I welcome the department’s review of the policy which bans the sale of home-testing kits. Echoing the noble Lord, Lord May of Oxford, I hope that the review will, in turn, move to action.

I came to the deliberations of the committee with a fresh mind. I can see, alas, that we in the UK have been faltering in our national efforts to conquer this dreadful virus despite the supreme dedication of superb professionals and volunteers. We need renewed vigour and courage to seize this moment. Every new infection of a baby, a young person, a man or a women takes its toll on the patient and on their family and friends. Medical advances since the 1980s have been dramatic, yet no cure is in sight. It is on our watch now that we must be innovative and bold on prevention and compassionate to the all too many people who live with HIV.

18:06

[Lord Collins of Highbury]

My Lords, I, too, congratulate the noble Lord, Lord Fowler, on initiating this excellent debate. I have huge respect for the work that he has done and continues to do in raising awareness of HIV and AIDS.

I also pay tribute to all the members of the Select Committee for producing such an excellent and timely study. I say “timely” because only this week the Health Protection Agency warns that the virus is on the rise again in the UK. As we have heard in today’s debate, more than 100,000 people will be living with HIV in the UK by the end of the year, and, as the noble Lord, Lord Fowler, said, more than a quarter of HIV infections remain undiagnosed—that is, in people who have not yet had a test and do not know that they are infected.

The HPA reported that new diagnoses of HIV in men who have sex with men have hit a record high, with around 3,000 men diagnosed in one year. That is the largest annual figure ever recorded. It was 1,820 in 2001, 2,660 in 2005, and 2,790 in 2009. As many noble Lords have said, it is time to break the silence and stigma around HIV, and this report is a very welcome step in helping us to do that.

Early diagnoses and the excellent treatments now available from the NHS mean that many have a chance of avoiding the worst consequences of this virus. As the noble Lord, Lord Fowler, reminded us, when the epidemic began 30 years ago, people with HIV swiftly became sick, developed AIDS and died of infections, such as pneumonia, which their bodies could not fight off. Today, combinations of antiretroviral drugs keep people alive and healthy, and can give them a relatively normal lifespan as long as they stay on the medication. This means, too, that the number living with the virus continues to rise.

Early preventive action not only saves lives but saves money. This is where I also want to amplify the conclusion in the report that a new priority must be given to prevention. As many noble Lords have said, spending on preventing infection is seriously inadequate—just £2.9 million compared with the £762 million treatment bill. I very much regret that the Government dismiss out of hand the committee’s recommendation for an advisory committee for HIV prevention research. Such a committee might give us a clearer indication of the effectiveness of some of the public campaigns.

An area that I want to stress in particular, evidenced in the committee report, is the link between prevention strategies and treatment. As my noble friend Lady Gould and others have said, that link is tested. As I have said, more than a quarter of those with HIV in the UK do not know that they have it, which means that they may be unwittingly passing it on to others and may not be diagnosed until they are ill and treatment is more difficult.

As my noble friend Lord Rea said, in 2010, 50 per cent of all new diagnoses were made late—in other words when the CD4 cell count falls below the level at which treatment is recommended. The proportion diagnosed late is higher in heterosexual men—63 per cent—and heterosexual women—58 per cent—than among gay and bisexual men—39 per cent. Black African and Black Caribbean people are more likely to be diagnosed late than white people. People diagnosed over the age of 50 are more likely to be diagnosed late than younger people. While progress is being made, it is being made very, very slowly. At the current rate it could take 50 years to eradicate the late diagnosis and start treatment on time.

As the noble Lord, Lord Fowler, reminded us, of the 680 people with HIV who died in 2010, two-thirds were people who had been diagnosed late. On the other hand, the outlook for people who are diagnosed promptly is excellent, with life expectancy just a few years shorter than that of people without HIV. Will the Government do more, as the Select Committee and the HPA ask, to increase access to HIV testing? For example, the report advocates that such testing is routinely offered to new patients of GPs and at hospital general admissions in areas of the country where rates of HIV infection are high. While I welcome the Government’s positive comments, including reviewing the ban on the sale of home testing equipment, I believe, as the noble Lord, Lord May, said so effectively, that more needs to be done to incentivise public health commissioners to prioritise HIV testing. With responsibility for HIV prevention moving to local authorities, it is vital to look for ways to ensure they are prioritising this issue and to invest in effective targeted prevention work. It must be a key performance indicator. Like others, I very much hope that it remains in the final public health outcomes framework. However, there are currently no plans to include a specific public health outcome measure on HIV prevention or sexual behaviour. I should like the Minister to respond to that.

This lack of emphasis from central government is exacerbated, as we have heard today, by the distribution of budgets and responsibilities in the new health structure proposed in the Health and Social Care Bill. As local authorities will not be paying for HIV treatment out of their budgets—this will be funded by the NHS Commissioning Board—like others, I am concerned that there is no cost-saving incentive to prevent further transmission. The Bill proposes significantly to increase the power of local authorities through health and well-being boards. While I am not opposed to greater local power in principle, I am concerned that the new structure opens the door for an ever-increasing politicisation of public health, which could have a severe impact on less socially acceptable health conditions, such as HIV. There are still considerable negative associations and stigma attached to HIV and a severe lack of knowledge about HIV among the general public, as the National AIDS Trust's recent Ipsos MORI research study report showed. This makes it particularly vulnerable to prejudice and can silence local voices of people with HIV. Stigma, prejudice, ideology or disapproval can threaten evidence-based interventions which meet the health needs of groups most at risk of HIV. There is potential for the increased role for elected officials to pose a threat to the continuation of the high-quality services needed to tackle the HIV epidemic in the UK. Indeed, in some places, HIV organisations have already begun to experience barriers when working with local politicians. Therefore, I urge the Minister to acknowledge how important it is for the Government to understand this and to build suitable protections into their reforms package. This should be through HIV-related outcomes in the NHS public health and social care outcomes frameworks. There should also, in relation to HIV and sexual health, be a detailed mandate from Public Health England to local authorities which sets out the essential elements of a comprehensive sexual health service, as my noble friend Lady Gould urged. It is vital that the Government ensure that stigmatising views of HIV, and around sexual health more broadly, do not affect decisions about local public health services.

As the Select Committee report said, stigma and lack of understanding can undermine HIV prevention efforts. Misinformation circulated about HIV, suggesting that it is a judgment or that it can be cured through non-medical methods, poses a threat to public health messaging. This is especially the case when such statements are made in faith-based settings, given the significant influence of faith leaders in some communities. As someone who still finds leaflets from local churches in Finsbury Park offering cures for AIDS, I know how important such work is, as the noble Baroness, Lady Masham, reminded us. I am therefore pleased that the Government agree with the Select Committee's recommendation about the valuable contribution that faith leaders and faith groups can make to HIV prevention and care services. When linked to projects such as the African Health Policy Network’s Ffena programme, which has trained more than 100 people living with HIV to become advocates for understanding of the condition, we know the policy can make a real difference in our communities. These sorts of projects involving HIV-positive people as advocates and confident service users are a vital tool in addressing stigma through publicising the condition and encouraging dialogue. It is really important that the Government ensure continued support for this work, especially in these difficult economic times.

After recent research that showed that drugs can protect against the transmission of the virus, I also welcome the report's call for immediate reviews into the possibility of putting people on medication sooner and offering it to their uninfected partners. However, I fully accept that such a policy should be considered after detailed research into the particular circumstances pertaining in this country.

Finally, I want to turn to the Health and Social Care Bill's proposals on health and well-being boards. Many noble Lords have mentioned them in the debate. They will be central to the integration of services. However, I share the concerns expressed by many HIV/AIDS charities that the NHS Commissioning Board will not be routinely represented at all health and well-being board meetings. Without the presence at health and well-being board meetings of those commissioning HIV services, there is a real risk that the importance of HIV prevention, as well as the concerns of people living with HIV, will be sidelined in favour of areas where there is a direct financial benefit, and which, perhaps, are not as potentially controversial. I ask the Government to do more to ensure the presence of representatives from the NHS Commissioning Board at health and well-being board meetings and to guarantee that voices representing the needs of people with HIV are heard in the deliberations of those boards.

18:20

[Baroness Northover]

My Lords, I congratulate my noble friend Lord Fowler on securing this important debate today, World AIDS Day. He has an outstanding record as the person who very much shocked us into an awareness of AIDS. He also deserves plaudits for his continuing interest in HIV and AIDS nationally and internationally, an interest that has done much to raise awareness inside and outside Parliament. As we know all too well, in issues such as this awareness is a significant part of the battle.

The report by the House of Lords Select Committee on HIV and AIDS in the United Kingdom, No vaccine, No Cure: HIV and AIDS in the United Kingdom, was most timely, given that it was 25 years ago when my noble friend led the Government’s response to HIV and AIDS. I commend the outstanding membership of this Select Committee, many of whom have a long record of work in this area, as I know from when I was an officer of the All-Party Parliamentary Group on HIV and AIDS. This report will help to inform the Department of Health’s new sexual health policy framework planned for next year.

In October, we published the Government’s response to the report and made clear that we agreed with many of the Committee’s recommendations on combating HIV and AIDS. World AIDS Day provides an excellent opportunity to reflect on the progress that we have made. Globally, there has been progress. The epidemic has stabilised in many regions. New infections have fallen by 21 per cent since 1997. Nearly 7 million people are on antiretroviral treatment—a more than tenfold increase over five years.

Today is also an opportunity to recognise the continuing challenges presented by HIV, both globally and at home. More than 34 million people are living with HIV and, as noble Lords have noted, there is no cure or vaccine in sight. Around 10 million people in need of treatment are not getting it. There are more than 7,400 new HIV infections every day, which is two for every person who begins receiving treatment. To compound the problem, HIV funding is flatlining, about which we can read more in today’s papers.

While the scale of the epidemic is very different in countries such as the UK, as my noble friend Lord Fowler pointed out, we are not unaffected by the global picture. Effective treatment from the NHS can transform the lives of those living with HIV or AIDS, but there is no cure or sign of a vaccine and HIV still attracts considerable stigma, which is a huge challenge.

The Government’s early response all those years back, led by my noble friend Lord Fowler, has helped to make sure that the UK has remained a relatively low prevalence country for HIV, particularly compared with some of our European neighbours. The early introduction of needle exchange and harm minimisation programmes, for example, has meant that we have very low rates of HIV in drug users who inject, unlike in other countries, as my noble friend pointed out.

Earlier this week, the Health Protection Agency published its annual HIV report for 2010. There are now around 91,500 people living with HIV, of whom around a quarter are unaware of their infection. This means that they are unable to benefit from highly effective treatment and risk unwittingly transmitting HIV infection to others. The HPA also reported that in 2010, new diagnoses in men who have sex with men—MSM—reached a peak of 3,000, and MSM remain the group most at risk of HIV transmission in the UK.

That is why I very much welcome the report’s focus on the importance of HIV prevention. The Government agree that we need to be more effective in supporting responsible sexual behaviour. HIV prevention makes good economic sense too, as noble Lords have pointed out. The HPA estimated that preventing the estimated 3,800 HIV infections acquired in the UK in 2010 would have saved over £32 million annually, or £1.2 billion over a lifetime, in costs.

This year, the department has invested £2.9 million in a national programme of HIV prevention for men who have sex with men and for African communities, delivered by the Terrence Higgins Trust and African Health Policy Network. On top of that, the NHS provides many HIV prevention services, some funded separately and some funded as part of mainstream services such as testing and distributing information and condoms. The Department of Health is currently considering how national HIV prevention programmes might be taken forward when the current programmes end. The Committee’s comments will help to inform what happens.

Of course, effective prevention requires effective testing. Late diagnosis is the most important factor associated with HIV-related morbidity and mortality in the UK. We agree with the Committee that HIV testing should be offered more widely and in various healthcare settings, particularly in areas of high prevalence. In September 2011, the HPA published its final report on pilots which the department funded in 2009-10 to help to reduce late diagnoses of HIV. The findings were encouraging and patients responded to being offered HIV tests. We are also funding the Medical Foundation for AIDS and Sexual Health to develop ways of helping GPs and primary care staff to offer HIV tests more routinely.

It is vital that the public health system is versatile and proactive enough to deal with HIV and AIDS. Reference has been made to how this is going to be structured in the future. Ring-fenced public health funding is central to our NHS and public health plans. This will allow us to plan spending on prevention without the money being raided for other projects. In today’s restrictive financial climate, this is a very noteworthy commitment in this area.

Finally, I turn to the concerns raised by noble Lords about the current policy to charge some people for HIV treatment. As we made clear in our formal response to the Committee, we are concluding an internal review of our current policy—I know that review does not please the noble Lord, Lord May, but I hope he will be encouraged in the end—and expect this review to be completed by the new year, including any discussions with the other government departments that have an interest. The review is considering many of the issues raised today. These include the increasing evidence on the public health benefits of early diagnosis and the significant role of HIV treatment in reducing the onward transmission of HIV.

Promoting HIV testing to reduce undiagnosed HIV and late diagnosis remain important priorities for HIV prevention. We would be very concerned if our current policy was to deter people from being tested for HIV, even though testing has always remained free of charge to all. I acknowledge that a small number of vulnerable people will not be covered by the current exemptions and that they may be deterred from accessing HIV testing services because they cannot afford treatment or are confused about the entitlement to free NHS treatment. In considering any changes to our current policy we must avoid creating an incentive for people to come to the UK for the purpose of free HIV treatment, without compromising our overriding responsibility for public health. I hear the powerful case made by the right reverend Prelate the Bishop of Wakefield in this regard. The department’s review has considered many of the issues raised today and we will conclude it by the new year.

I turn to some of the questions that noble Lords have put to me. The noble Lord, Lord Fowler, asked about supporting more HIV testing in general practice. I have made reference to the funding that we have provided to the Medical Foundation for AIDS and Sexual Health, which is working on a three-year project to try to support GPs and primary care staff in offering HIV testing. The noble Baroness, Lady Gould, also referred to that.

The noble Lord, Lord Fowler, and the noble Baroness, Lady Masham, asked about prisoner health. As they know, we do not routinely screen people in prison for HIV just because they are prisoners—rather, we have an active case-finding programme which encourages both prisoners and staff to consider whether their behaviour, current or previous, may have put them at risk of infection with HIV and provides them with an opportunity for testing. We respect the rights of prisoners to accept or refuse testing if they so choose, which reflects normal practice in the wider community.

The Department of Health offender health team has worked with the HPA to improve disease surveillance in prisons. We aim in the new year to disaggregate data on diagnosis made on people in prison. Condoms are routinely provided in prisons to prevent the transmission of STIs. NICE evaluated the evidence of effectiveness of needle-exchange programmes in prisons and stated that there was a need for more research on the added value. It felt that the condom programme was useful.

The noble Lord, Lord Fowler, and other noble Lords, including the noble Baroness, Lady Healy, spoke of the need for a new prevention campaign. The awareness campaigns of the 1980s, which targeted the whole population, were effective in raising the public’s awareness of a serious public health threat at a time when we did not know how HIV would develop or the main routes of transmission. By the mid-1990s, it was clear that men who have sex with men and people from sub-Saharan African countries were disproportionately affected by HIV. That is why, since 1996-97, the Department of Health funded programmes that focused on those communities. This approach is supported by community organisations and others including the HPA. The previous Government also subscribed to this. I hear what noble Lords have said and this will no doubt continue to be assessed on an evidence-based approach.

The noble Lord, Lord Fowler, asked about home-testing kits, to which I think I made reference in my speech. We are reviewing our policy on banning the sale of home HIV tests. We recognise anyway that the current ban is probably not sustainable given that home-testing kits are already available from overseas on the internet. It is essential if there is any change that home-testing kits are quality-assured, including the provision of clear patient information on following up positive or unclear results. It is extremely important that those kits are reliable if they are going to be used at home.

The noble Lord, Lord Fowler, asked about national procurement of ARV drugs, as did others. The Department of Health is keeping this under wider review. We are very keen to ensure that we have clinical collaboration in ensuring there is leverage on price and that experience from procurements on a local and regional basis will be used in evaluating the ability to take this forward on a multi-regional or national basis. It will be under review.

Various noble Lords, including the noble Lords, Lord Lexden and Lord Black, and the noble Baroness, Lady Gould, spoke about stigma. It is of course very much the case still that stigma is an enemy to progress. TB was a stigma in the 19th century and cancer in the 20th century and we have a problem here also when people are unwilling to come forward because HIV has the power to define a person in a way that an illness simply should not. Too many people with HIV still experience shame and isolation because of their diagnosis and that can manifest itself, as we have heard, in discrimination in all sorts of places.

The Department of Health’s new sexual health policy framework planned for next year will consider how key partners involved in HIV care work and others can work together to reduce and challenge HIV stigma. The national HIV prevention programme for African communities, funded by the Department of Health, has contributed to toolkits for faith leaders and communities in this area and we want to develop this further; that is a very important message that comes out of this report.

The noble Baroness, Lady Gould, asked whether the Department of Health would consider the HPA’s Time to Test for HIV report. The answer is yes and this will help to inform our forthcoming sexual health policy framework. She also asked about the public outcomes framework; we are considering responses to this, including a proposal on an indicator on late HIV diagnoses and we will publish that framework very soon. The noble Baroness also asked about tariffs on sexual health; as she probably knows there is ongoing work on tariffs and I will write to her in more detail about this.

My noble friend Lady Tonge expressed her reservations about our plans in general and this issue in particular. I can reassure her, at least in one or two areas. The £2.9 million on prevention that was flagged up as being inadequate excludes work done on prevention by the NHS, for example testing, condom distribution and local health promotion. There is more there than she might have felt. I will no doubt address many of her concerns on the health Bill more widely outside this Chamber, otherwise I am sure we will be here again until at least midnight.

My noble friend Lady Tonge, and the noble Baronesses, Lady Healy and Lady Massey, spoke about PSHE in school; I assure noble Lords that we recognise that children benefit enormously from high-quality PSHE which helps them make safe and informed choices. There is a slimming down of the statutory curriculum to give schools more freedom and space to teach a curriculum which engages pupils; however, we have launched a review of PSHE to identify the core body of knowledge pupils need and ways of improving the quality of teaching. I emphasise that we welcome representations, including evidence and examples of good practice, and I strongly urge noble Lords to feed into that process. As a result of the review we will be drawing up proposals, based on the evidence, and consulting on them.

The noble Baroness, Lady Masham, asked about the future of the HPA; we will be having further discussions about this in the health Bill. In fact, we almost came to it last night but I think it will now be discussed on Monday. As she knows, the HPA, along with a number of other organisations, will be brought together into Public Health England, which will be free to carry out research; it is an executive agency of the Department of Health that will be established in April 2013—always assuming your Lordships pass the health Bill. It can carry out research, it must give advice to the Government—it has that independence; those working will be able to apply for grants and so on. We will work to maintain the excellent quality of the HPA’s current HIV surveillance programme when it transfers to Public Health England.

The noble Lord, Lord Lexden, referred to Northern Ireland, and it was extraordinary to hear of the difficulties that he perceived there. It shows how in many areas, not only geographically but by community, some communities can be particularly difficult and harder to reach than others. Nevertheless, I assure him that the Department of Health works with the devolved Administrations to discuss issues that are common across the UK, such as increased testing, and to share good practice on prevention and care.

There was some concern about possible fragmentation because of local authorities being much more involved now in public health and also the NHS Commissioning Board. Again, we will no doubt return to these issues in the Bill, but the Department of Health is already working, and will be working over the coming year, with key stakeholders to map out the integrated sexual health pathway that will address the concerns raised today. This debate will no doubt feed into those concerns to ensure that work on the issue is joined up.

I have referred to the HIV home testing kits, which the noble Lord, Lord May, flagged up. The noble Lord, Lord Black, and other noble Lords spoke about HIV awareness in the general population being very low. Although we wish to seek improvement in all kinds of areas, it is quite interesting to note that, according to NAT’s Ipsos MORI poll, four out of five adults in the communities that are most at risk were aware that HIV can be passed on by having sex without a condom. In other words, the targeting of information, at least to those groups, is having an effect. I am pleased that that is the case.

The noble Baroness, Lady Massey, the noble Lord, Lord Gardiner, and others asked about the sexual health policy framework. We are seeking to take a life course approach—that sounds like a course that we are offering through PSHE—to sexual health needs, for young people through to old people, including people aging with HIV, and we are working with the Sexual Health Forum to agree this framework. That work is being undertaken at the moment.

The noble Lord, Lord Gardiner, asked about introducing HIV testing and learning from antenatal HIV testing. We have asked the UK National Screening Committee to consider the evidence on making HIV testing more routine. We await its response.

I hope that I have covered most of the points raised. If there are points that I have not answered, I will write to noble Lords. Clearly we have a tremendous amount to think about as a result of this report and there is still more to do. We all have a part to play in keeping HIV high on the agenda, and debates such as this and the coverage today in the media all help to raise the profile of the disease. I welcome the report and the extremely important cajoling from noble Lords today. I am aware that we shall return to some of these areas in the discussions on the health Bill. I look forward to being further cajoled and I hope that we can make progress in at least some of the areas that have been flagged up in this important debate.

18:44

[Lord Fowler]

My Lords, it has been an excellent debate and I thank everyone for taking part in it. I repair one omission and give thanks to our special adviser, Anne Johnson, who was absolutely first class in her advice.

I said at the beginning that we had the first debate on HIV/AIDS 25 years ago this month in the Commons, and today’s debate was very much in that tradition, with outstanding contributions. There was general agreement on the serious increase in HIV, the central importance of early testing and the importance of combating the stigma.

I thank the two Front-Benchers—the Minister and her shadow—for their contributions. On the Minister’s reply, to use the famous words of the noble Lord, Lord May, there were quite a lot of reviews in what she was saying, but I agree with her that a ring-fenced budget is infinitely preferable to one that can be raided and which we have had in the past. I am encouraged by what she says about charges for people from overseas and on home testing. I am not quite so encouraged by what she says about prisons, which we will have to revisit. As for what she says about a general campaign in getting this message over, I will say only that, as I count it, the noble Baroness, Lady Massey, called for one, as did the noble Baroness, Lady Gould, with all her experience, and as did the noble Baroness, Lady Tonge. The noble Lord, Lord Gardiner, agreed that there should be one, as did the noble Baronesses, Lady Masham and Lady Healy. For what it is worth, I think that there should be one as well, so I think she might find herself in a slight minority in this House.

The right reverend Prelate the Bishop of Wakefield made a quite outstanding speech on the work of the Church of England, to which I pay tribute. I also pay tribute to Bob Runcie, who was archbishop at the time of the 1986 campaign. I agreed with everything he said about charging for HIV treatment.

The noble Lord, Lord Lexden, made an important speech and rightly reminded us of the importance of Northern Ireland and the challenge there. The noble Lord, Lord Rea, talked about HIV not being a death sentence any more but certainly being a lifetime of medication. The noble Lord, Lord May, in a masterclass on the background, history and origins of HIV, made an outstanding contribution. I hope he is right in his predictions on the development of a vaccine. Above all, I think his message was that there is no reason to take the foot off the pedal at this point, which I hope that the Minister heard very clearly.

The noble Lord, Lord Gardiner, made a crucial point in passing about purchasing policy on drug costs. The noble Lord, Lord Black, underlined the vast importance of involving general practitioners in the work, which, as his example showed only too well, has not always been the case.

There will be future opportunities for talking about these things. If I could put in a commercial for the right reverend Prelate and the noble Lord, Lord May, we have an amendment down on testing for overseas visitors and we might conceivably put the Minister under rather more pressure than she was under this afternoon. I thank her and indeed everyone for an important debate on World Aids Day. I hope that we can renew our efforts to combat HIV, which seems to be the message that has come through from the whole debate.

Motion agreed.

House adjourned at 6.49 pm.