House of Commons

Wednesday 11th January 2012 Commons Chamber

Wednesday 11 January 2012

The House met at half-past Eleven o’clock

Prayers

Wednesday 11th January 2012 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 11th January 2012 Commons Chamber

The Secretary of State was asked—

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

1. What discussions he has had with the Secretary of State for Defence about Ministry of Defence police numbers in Scotland.

[The Secretary of State for Scotland (Michael Moore)]

We have regular discussions with ministerial colleagues on defence matters relating to Scotland. The Under-Secretary of State for Scotland, my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), last spoke about the issue to the Under-Secretary of State for Defence, my right hon. Friend the Member for South Leicestershire (Mr Robathan) —who is responsible for defence personnel, welfare and veterans—earlier this week.

[Dr Whiteford]

As recently as November last year, the Prime Minister said that

“there are no current plans to reduce the number of Ministry of Defence police at the Faslane or Coulport naval bases.”—[Official Report, 23 November 2011; Vol. 536, c. 295.]

Since then, however, the Government have confirmed plans to cut the MOD police budget by 50%. I am curious to know whether the Prime Minister’s assurances hold water. May I ask the Secretary of State what proportion of that cut will fall in Scotland, and whether he believes that the threats to our national security have diminished sufficiently in recent months to justify a 50% cut?

[Michael Moore]

What the Prime Minister said stands. There are no current plans for the MOD to reduce the core police role relating to the security of our national institutions, such as nuclear safety at Coulport or Faslane. National security, including the security of our defence installations, is our highest priority. The reason we have so many MOD police in Scotland in the first place is our huge defence imprint, which would be put at risk immediately if the country were to become independent.

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

I am delighted by what the Secretary of State says about the importance of security at Faslane and Coulport, and by his assurance that there are no current plans to reduce the number of MOD police. I hope he will also be able to assure the House that the Government will never adopt any plans to reduce security at Faslane and Coulport, given the importance of the nuclear installations there.

[Michael Moore]

As I have said, national security and the defence of our security installations are our highest priority, and we will do nothing that would compromise that security.

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

2. What assessment he has made of the effect of the autumn statement on child tax credit payments in Scotland.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

The welfare system must remain fair and affordable, while protecting the most vulnerable. Most working-age benefits, benefits for disabled people and the basic state pension will increase by 5.2% in April. In order to remain on course with the debt consolidation plan and meet their fiscal mandate, the Government will increase the child element of child tax credit by the rate of inflation.

[John Robertson]

According to the House of Commons Library, the Government’s decision not to proceed with the £110 increase in the child element of child tax credit will take £41 million away from nearly 400,000 children in Scotland alone. Worst hit in Scotland will be Glasgow city, where 44,000 children are set to miss out on £4.8 million. When will the Secretary of State stand up for the children of Scotland?

[David Mundell]

The Government are standing up for the children of Scotland. That is why our priority is sorting out the mess that the Labour Government made of our economy. The hon. Gentleman would do well to heed the words of the former Secretary of State for Scotland, the right hon. Member for East Renfrewshire (Mr Murphy):

“The truth is the Labour party would have to make cuts if we were in power.”

[John Stevenson (Carlisle) (Con)]

We all accept that these are difficult economic times, but does the Minister agree that one of the most effective ways of helping the lowest-paid families is raising the income tax threshold to £10,000 and beyond?

[David Mundell]

I entirely agree. The measure has had a significant impact in Scotland, and more than 2 million basic-rate taxpayers will benefit from it during the current Parliament.

[Anas Sarwar (Glasgow Central) (Lab)]

After another week that has been dominated by political debate and headlines relating to Scotland’s constitution, we must not ignore a report by End Child Poverty showing that 50% of local authority areas in Scotland contain wards in which 30% of children are living in poverty, and that in some wards in my constituency the figure is 50%. What action is the Secretary of State taking, along with the Scottish Government, to ensure that every child in Scotland is given the best start and opportunities in life?

[David Mundell]

The hon. Gentleman raises important issues, such as the fact that many of the levers relating to child poverty rest with the Scottish Government. As a result of the autumn statement, the Scottish Government received more than £500 million in additional revenue. I should have thought it would be better if they focused on how to deploy that revenue to deal with such problems as child poverty than to obsess about the constitution.

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

3. What steps he is taking to promote Scotland as a destination for international inward investment.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

My right hon. Friend the Secretary of State and I firmly believe that Scotland is the ideal destination for international inward investment, and we have taken a range of actions to promote such investment. My right hon. Friend recently led the largest ever Scottish trade delegation to Brazil to promote closer business links with a key emerging market for the Scottish economy.

[Alun Cairns]

Does my hon. Friend accept that, in an ever more competitive world, uncertainty about independence has not helped the cause of Scotland or any other part of the United Kingdom that is seeking to attract much-needed inward investment?

[David Mundell]

I entirely agree with my hon. Friend, which is why I believe it is better that a referendum on Scottish independence be held sooner rather than later.

[Angus Robertson (Moray) (SNP)]

In contrast to the previous intervention, will the Minister acknowledge that international companies investing in Scotland since the re-election of the Scottish National party Scottish Government include INEOS, PetroChina, Dell, Gamesa, Amazon, Hewlett Packard and Mitsubishi Power Systems? Does he acknowledge that and welcome the investment?

[David Mundell]

I acknowledge that those companies have invested in spite of the uncertainty. We should consider the level of investment that Scotland could achieve if there was not that uncertainty.

[Angus Robertson]

That is the usual mantra that we hear from Government Members. Will the Minister respond to Scotland’s leading entrepreneur, Jim McColl, who said on this very subject that business is “not concerned” about the

“independence referendum…What many of us in business are convinced about is that a productive and prosperous future for this country depends on securing real economic powers for the Parliament through constitutional change”?

Will the UK Government drop their foolish conditions, so that we can secure that change in the autumn of 2014?

[David Mundell]

I am sure the hon. Gentleman will agree that Mr McColl is entitled to his opinion, as is any other citizen of Scotland. I am sure you will encourage them, as your own party’s Scottish Government already have, to contribute to our consultation on the independence referendum.

[Mr Speaker]

Order. Let me just point out to the Minister that I do not have my own Scottish Government.

[Mr Philip Hollobone (Kettering) (Con)]

Does my right hon. Friend believe that were Scotland to become separate from the United Kingdom, and were it to be forced to join the eurozone as a condition of re-entry into the European Union, that would hinder or help inward investment into Scotland?

[David Mundell]

Uncertainty over Scotland’s position in the EU, and uncertainty over which currency Scotland would use if it were ever to become independent, would certainly hinder inward investment into Scotland.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

4. How many young people are not in employment, training or education in Scotland.

[The Secretary of State for Scotland (Michael Moore)]

The annual population survey of 2010 estimates that 36,000 18 to 19-year-olds in Scotland were not in education, employment or training between 2009 and 2010.

[Mr Donohoe]

I thank the Secretary of State for that response, but it does not really answer the question of what is happening between the ages of 16 and 18, which is as important, if not more important. What is he doing to encourage youngsters to enter industry and to enable them to take up apprenticeships as joiners, electricians and plumbers, because this Government have failed to attract people into those industries? Does he agree that the idea, which I suggested to him at a meeting, of setting up schools-industry liaison committees is worth supporting?

[Michael Moore]

The hon. Gentleman rightly continues to focus on this issue. We are all deeply concerned about youth unemployment. I have visited his constituency, and I have also had other meetings in Ayrshire and elsewhere, and it is right that we should join the Scottish Government, employers and all the agencies to help young people—aged between 16 and 18 and of any age—to find work or support. The youth contract that we announced before Christmas will bring £1 billion of extra investment into supporting the young unemployed, whether through wage incentives, additional work experience and opportunities or money to the Scottish Government. That money could also be used to create the school-industry liaison groups the hon. Gentleman wants.

[Jo Swinson (East Dunbartonshire) (LD)]

As the Secretary of State says, youth unemployment is a huge concern for Members of all parties and for people across Scotland. The youth contract will help by providing 40,000 opportunities for young people in Scotland, but this problem will not be solved easily, so what will my right hon. Friend do to bring together people from the UK Government, the jobcentres and the Scottish Government, as well as business employers and education representatives, to offer the opportunities that young people in Scotland need?

[Michael Moore]

Over many months now, I have been bringing together exactly those groups in different parts of Scotland—including Ayrshire, Falkirk and the borders. At the end of March, I, along with the Secretary of State for Work and Pensions and the Scottish Finance Secretary, will bring everybody together so we can focus as two Governments and as all the interested parties on tackling this scourge that we must get rid of.

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

The problem with the Secretary of State’s complacent answers is that he simply does not grasp the scale of the crisis of slumping demand, employment and confidence that grips Scotland’s economy due to the crushing austerity being imposed by this Government. Does he not share the real fears of young people that, with youth unemployment at over 21% and seven people chasing every vacancy in Scotland, there simply are not enough jobs to go around, and is it not time to change course by boosting demand through a cut in VAT now, before this Government’s failing economic plan plunges Scotland into the misery of another downturn?

[Michael Moore]

I think it is wrong for the Labour party to be complacent about its record on the economy, which landed us in this mess in the first place. The shadow Defence Secretary, one of my predecessors as Scottish Secretary, said this week that Labour has to face up to the realities of the economy and the deficit, and the hon. Gentleman should do that, too. We want to work with everybody so that we can reduce youth unemployment, and I invite him to look at the youth contract in more detail.

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

5. What assessment he has made of the effect of the autumn statement on levels of poverty in Scotland.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

The Government took action at the autumn statement to build a stronger and more balanced economy. As a result, more than £500 million has been added to the existing Scottish budget by the UK Government, which provides the Scottish Government with additional resources in these uncertain times.

[Cathy Jamieson]

I thank the Minister for that answer. Does he agree that one of the most important ways of tackling poverty is ensuring full employment? Does he therefore share my concern that Mahle Engine Systems in my constituency seems set to remove jobs from an area hit by high unemployment, taking those jobs out of Scotland and out of the UK?

[David Mundell]

I would be very disappointed if that were the case. I know that the hon. Lady is a doughty campaigner for employment in her constituency. We must continue to stress the benefits of employers remaining in Scotland, which is why the current constitutional uncertainty is so damaging.

[Mr Jim Hood (Lanark and Hamilton East) (Lab)]

On Monday, when 700 of my constituents employed by WJ Harte Construction returned to work, they were told that the company had gone into administration, without any consultation whatsoever. I am told that Scottish Enterprise and the trade unions were not even aware of this. The MSP was not aware of it, and the MP certainly was not. The company was taken over by a venture capitalist more than two years ago, when it had a turnover of £100 million. It has now been run into the ground and the executives have run away with the money. Will the Minister meet me to discuss what we can do to save as many of these 700 jobs as possible? This is a disgraceful situation.

[David Mundell]

Obviously, as a fellow south Lanarkshire MP I am very disappointed to hear what the hon. Gentleman has to relate, and I should be very pleased to meet him to ensure that employment continues to be secured in south Lanarkshire.

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

6. What discussions he has had with the Secretary of State for Work and Pensions on the work capability assessment in Scotland.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

My right hon. Friend the Secretary of State and I are in regular contact with Ministers from the Department for Work and Pensions on a range of issues concerning welfare reform. We also recently met Professor Malcolm Harrington to discuss his second review of the work capability assessment.

[Tom Greatrex]

I thank the Minister for that answer. I am sure he will be aware of a report published today by Citizens Advice entitled “Right First Time?”, which examines the high level of incorrect and inaccurate decisions made in the work capability assessment. Given the amount of money that Atos Healthcare receives from the public purse for undertaking these assessments, is it not now time for the Government to consider the report’s recommendation that financial penalties be imposed on Atos for a number of those incorrect assessments? [Interruption.]

[David Mundell]

This was one of the issues that the Secretary of State and I discussed with Professor Harrington, and as he prepares his further report, this is inevitably one of the issues he will address. [Interruption.]

[Mr Speaker]

Order. There are far too many noisy private conversations taking place in the Chamber. I would like to hear Dame Anne Begg.

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

Now that the move from incapacity benefit to employment and support allowance is well under way, anecdotally, it would appear that Atos is finding it very difficult to carry out the necessary work capability assessments, so there could be extra delays. Will the Minister please engage with his fellow Ministers in the DWP to make sure that Atos can deliver on the contract?

[David Mundell]

I can certainly assure the hon. Lady that I will pass on her concerns to the Department.

[Iain Stewart (Milton Keynes South) (Con)]

7. What representations he has received from the Scottish Government on the holding of a referendum in Scotland on independence from the UK.

[Fiona Bruce (Congleton) (Con)]

8. What representations he has received from the Scottish Government on the holding of a referendum in Scotland on independence from the UK.

[Mark Menzies (Fylde) (Con)]

10. What representations he has received from the Scottish Government on the holding of a referendum in Scotland on independence from the UK.

[Lindsay Roy (Glenrothes) (Lab)]

11. What recent discussions he has had with the First Minister for Scotland on the referendum proposed by the Scottish Government on Scotland’s independence from the UK.

[The Secretary of State for Scotland (Michael Moore)]

Yesterday, I made a statement announcing a consultation to seek views on how any referendum can be made legal, fair and decisive. I discussed this yesterday with the First Minister, and I hope to have further discussions with the Scottish Government, along with other politicians and people from across Scottish civic society, during the consultation.

[Iain Stewart]

The House of Commons Library has given me strong evidence to show that the economies of Quebec and Canada as a whole suffered in the 1990s due to constitutional uncertainty. For the sake of jobs in Scotland and England, does my right hon. Friend agree that the last thing we need is a prolonged period of constitutional uncertainty, and that the First Minister should stop playing politics and get on with it?

[Michael Moore]

My hon. Friend is correct to point to that independent analysis and the experience of Quebec and the rest of Canada. It is vital that the economic uncertainty we now face because of the referendum is resolved, which is why we have brought forward proposals to make the referendum legal, fair and decisive. I want it to happen as soon as possible.

[Fiona Bruce]

Can my right hon. Friend confirm that if the UK Government do not facilitate an independence referendum, one cannot take place?

[Michael Moore]

The central issue arising from the consultation that I launched yesterday is that, as things stand, the Scottish Parliament does not have the legal power to hold a referendum, regardless of how that is described, and we need to provide that power by working with it. I am committed to working with the Scottish Government, and with people from across the country, so that we can get the power devolved to Scotland, the Scottish Government can then develop the question and we can get on with the referendum, which will be made in Scotland, for the people of Scotland.

[Mark Menzies]

Has my right hon. Friend had any conversations to establish what impact an independent Scotland would have on our relationship with the European Union and the euro?

[Michael Moore]

My hon. Friend is focusing on some of the central issues that we need to be able to get on to debate in the decision about whether Scotland should go its own way or continue to be part of the most successful multi-nation state in the history of the world, as I think it is vital it does. So let us get on and devolve the power to make it a legal referendum. Let us have a fair referendum and let us make sure it is decisive.

[Lindsay Roy]

The Select Committee on Scottish Affairs has already embarked on an inquiry to identify those issues, such as defence, which need to be resolved before a referendum is held. Does the Secretary of State plan to contribute to that debate with the Select Committee?

[Michael Moore]

I certainly do. What is really important is not just our debate now about the future of Scotland, but ensuring that everybody in the country gets the opportunity to participate in the consultation on the shape of the referendum, and I hope that people will respond to that. I hope that everybody across the country—not just politicians—will get involved in debating defence, welfare and the state of our economy, all of which, I believe, are much safer within the United Kingdom. [Interruption.]

[Mr Speaker]

Order. We are discussing extremely important matters and we should do so in an atmosphere of mutual respect.

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

We now know that there will be an independence referendum in the autumn of 1914—[Laughter.] That, of course, was the year that the great war started. There will be an independence referendum in 2014, designed and decided by the people of Scotland. If the Secretary of State is so concerned about the legal powers for the referendum, why does he not just devolve the powers, through section 30, without condition? I see that the Prime Minister has walked into this debate. I really hope that the Secretary of State can encourage the Prime Minister to come to Scotland as much as possible in the next two weeks, because the Prime Minister is the best recruiting sergeant for a “yes” to independence vote that we have.

[Michael Moore]

My right hon. Friend the Prime Minister will be a full participant in the debate, as will all people across the United Kingdom. For us, it is important that we have a referendum that is made in Scotland for the people of Scotland about our future in Scotland. The First Minister and now the hon. Gentleman —who gave a slightly different date—have put forward their preference for when that referendum should be, but before we can get anywhere near it we must ensure that it is legal. I hope that the Scottish Government will work with us to ensure that that is the case.

[Margaret Curran (Glasgow East) (Lab)]

Does the Secretary of State recognise that following this week’s important developments, the referendum campaign on Scotland’s future is now effectively under way and it is time to get on to the substance of the issue? What is more, given that the Scottish Government have said that they have been involved for some time in considering the details of the prospects for Scotland, will the Secretary of State tell the House whether any UK Government officials have been involved in any discussions on the future of the Scottish economy and, in particular, on whether a separate Scotland will keep the pound, join the euro or have a separate currency?

[Michael Moore]

The hon. Lady is right to focus on those key issues about the future of Scotland. I believe that Scotland is best served by continuing to be part of the United Kingdom, where our economy is stronger and our defence more secure, where we have much greater clout internationally and where our welfare system will be more generous and better. I hope that the Scottish Government will publish their plans about what they think should happen in an independent Scotland and in the meantime, as the hon. Lady says, let the debate commence.

[Margaret Curran]

I thank the Secretary of State for that answer. Does he agree that one of Britain’s greatest achievements was the creation of the welfare state? Have any discussions taken place about the implications of separation for welfare spend in Scotland, particularly as recent figures reveal that it was three times greater than oil revenues in 2010?

[Michael Moore]

The hon. Lady makes an important point about the contrast between the level of spending to support some of the most vulnerable in our society in Scotland and, indeed, the rest of the country and the volatility of oil revenues. I believe that we can have a more secure and generous welfare system by sharing the risks and resources across the whole of the United Kingdom, which has helped Scotland through difficult times in the past and at present.

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

Does my right hon. Friend agree that all Scots should be entitled to vote in any referendum on independence, whether or not they live in Scotland, including my dad, who is a proud Scotsman who happens to live in England and thinks of himself first and foremost as British?

[Michael Moore]

I pay tribute to my hon. Friend’s dad’s sense of patriotism and I am sure that he, like many other Scots around the country and around the world, will wish to contribute to our consultation. Like me, they will want to see this referendum on the most historic decision we will ever take in Scotland carried out legally and fairly, on a straightforward and decisive basis. Let us get that sorted and let us get on with the debate.

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

9. What steps he has taken to address youth unemployment in Scotland.

[The Secretary of State for Scotland (Michael Moore)]

rose— [Interruption.]

[Mr Speaker]

Order. I apologise for interrupting the Secretary of State, but we are discussing youth unemployment in Scotland, a very important matter, and I want to hear his answer.

[Michael Moore]

The Government have committed £1 billion over the next three years to implement the youth contract. Our package of support includes wage incentives for employers to recruit 18 to 24-year-olds from the Work programme and increased work experience opportunities for that age group. Other support is also available.

[Katy Clark]

I thank the Secretary of State for that answer. He is well aware of the rising levels of youth unemployment in North Ayrshire and I know that he has received strong representations about it from all the Ayrshire MPs. What more does he think that this Government can do at Westminster to increase public and private investment in North Ayrshire?

[Michael Moore]

I acknowledge the work that the hon. Lady has done and the fact that we recently met to discuss this very serious issue. It is important that the youth contract, which my right hon. Friend the Deputy Prime Minister visited Scotland to discuss on Friday, is taken advantage of by people across the country. I look forward to coming to the hon. Lady’s constituency in the near future to meet those very people so that we can discuss how to implement it most effectively.

[John Mann (Bassetlaw) (Lab)]

12. What comparative assessment he has made of the level of subsidy from the public purse for postal, transport and health services in Scotland and the north of England.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

Health and large aspects of transport are devolved areas, and it is for the Parliament in Scotland to decide how to allocate its budget. The Government have provided an annual subsidy to Post Office Ltd of £150 million for the last financial year and £180 million for this financial year. The subsidy is not distributed by country or region.

[John Mann]

Does the Minister think it would help the forthcoming debate if all the figures were made public so that my constituents and others can fully participate?

[David Mundell]

I absolutely agree that the debate on the independence of Scotland should be based on facts and on the issues. That is why we need to move on from the process and get on with the referendum.

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

The question of the referendum on Scotland is not a matter just for the Scottish Government or for the Scottish people. How and when will my constituents in England be consulted on this important matter?

[Mr Speaker]

I remind the Minister that the question is with reference to postal, transport and health services.

[David Mundell]

My hon. Friend’s constituents have the opportunity to be represented on these issues through him in this House.

The Prime Minister was asked—

[Mr Graham Stuart (Beverley and Holderness) (Con)]

Q1. If he will list his official engagements for Wednesday 11 January.

[The Prime Minister (Mr David Cameron)]

I am sure that the whole House will wish to join me in paying tribute to the servicemen who have fallen in the service of our country since we last met for Prime Minister’s Question Time—Captain Tom Jennings from the Royal Marines, Squadron Leader Anthony Downing from the Royal Air Force, Private John King from 1st Battalion the Yorkshire Regiment, and Rifleman Sachin Limbu from 1st Battalion the Royal Gurkha Rifles, who died after a long period in hospital where he was much loved by the staff who looked after him in Birmingham. Their outstanding courage and selflessness will never be forgotten. They have given their lives serving our country and making our world more secure, and our thoughts should be with their families and friends.

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

[Mr Stuart]

The whole House will wish to associate itself with the Prime Minister’s tribute to the fallen.

May I ask the Prime Minister to join me in congratulating Cranswick Country Foods on its £15 million investment creating a state-of-the-art facility in my constituency, which is licensed for exporting to the US Department of Agriculture, exports throughout the EU and employs more than 1,200 people? Unfortunately, the Food Standards Agency is blocking exports from that excellent plant to the far east. Can my right hon. Friend assure me that job-destroying and unnecessary regulation will not be tolerated by his Government?

[The Prime Minister]

I certainly join my hon. Friend in congratulating the company in his constituency on its expansion and on the welcome new jobs it is bringing. It is vital that we rebalance our economy, with greater emphasis on business investment and on exports. Exports to China went up by 20% last year. I shall certainly do everything I can to help to resolve the situation, and I shall be happy to ask a Minister from the Department for Environment, Food and Rural Affairs to meet my hon. Friend to discuss this issue.

[Edward Miliband (Doncaster North) (Lab)]

May I join the Prime Minister in paying tribute to Captain Tom Jennings from the Royal Marines, Squadron Leader Anthony Downing from the Royal Air Force, Private John King from 1st Battalion the Yorkshire Regiment, and Rifleman Sachin Limbu from 1st Battalion the Royal Gurkha Rifles? All of them showed enormous courage and bravery. They have made sacrifices on our behalf, and our deepest condolences go to their families and friends.

In the autumn statement the Chancellor said that train fares would rise by only 1% above inflation. Can the Prime Minister therefore explain why rail companies this month on some of the busiest commuter routes have increased their fares by up to 11%?

[The Prime Minister]

The power to do that was given to them by the last Labour Government.

[Edward Miliband]

No, Mr Speaker, the Prime Minister is wrong. The last Labour Government stopped them doing that, and this Prime Minister, when he came to office, reversed that policy, which we introduced. That is why the companies are able to rig the fares. That is why someone travelling from Northampton to London will see a rise on the season ticket of more than £300. Will he now stand up to the train companies, get a better deal for commuters and change his policy?

[The Prime Minister]

I know that the right hon. Gentleman has had a difficult start to the year, but I am afraid he has made it worse by getting the facts wrong. Labour, in 2009, allowed fare increases of up to 11%, because they introduced the idea of flexibility of 5% over and above the RPI plus 1% that was the case. What was the case in 2009 is the case today, but the key issue is this: there are only two places that money for railways can come from. It can come from the taxpayer or it can come from the traveller. What really matters is whether we are going to put money into rail investment, and this Government are putting that money in. We are building Crossrail, we are electrifying the Great Western main line, we are electrifying the line between Manchester and Liverpool, we are putting £308 billion into Crossrail, and of course, as my right hon. Friend the Secretary of State for Transport announced yesterday, we are building High Speed 2 as well.

[Edward Miliband]

I am afraid the Prime Minister is just wrong about the facts. The Labour Government saw that train companies were taking advantage of consumers, ripping them off by increasing fares more on the busiest routes, and we stopped it. We took that power away from them. He came to office and brought the power back. He made the wrong decision. And as for his idea that this is all to help the passenger, only last month the National Audit Office warned that the problem was that the money would probably result in increased train operating company profits. I ask the Prime Minister again: will he now go back and reverse his policy?

[The Prime Minister]

We originally set out an RPI plus 3% policy for train fares. We found money in the autumn statement to reduce that to RPI plus 1%, but if the right hon. Gentleman wants to see more money go into our railways—presumably he supports the electrification of the Great Western main line and the railway lines in the north-west—he will be touring the country telling us that he supports these things, but he is never prepared to take difficult decisions in order to support them. It is time—[Interruption.]

[Mr Speaker]

Order. The answers from the Prime Minister will be heard.

[The Prime Minister]

It is time for the Leader of the Opposition to listen to his shadow Defence Secretary, who wrote very candidly over Christmas:

“There is a difference between populism and popularity”—

and that difference is called credibility. Time to have some, I think.

[Edward Miliband]

Instead of his pre-prepared lines, the right hon. Gentleman should get his facts right about his own policy. He is just wrong. He says that he is continuing the policy of the Labour Government, and he is simply wrong on the facts. The Labour Government saw what the train companies were doing and said that we would put an end to it. The Prime Minister said at the weekend that he wanted to take action against crony capitalism. He has failed at the first hurdle. I ask him for the last time: will he now reverse the policy?

[The Prime Minister]

We are now on to the issue of higher pay. On the issue of the rail fares, let me be absolutely clear. Labour introduced the policy of 5% flexibility. They changed it for one year only—for an election year—but with no intention of making that permanent. If the right hon. Gentleman does not know that, he should. [Interruption.] If he wants to get on to the issue of executive pay, he is entirely right to raise it. Unlike a Government who did nothing—[Interruption.]

[Mr Speaker]

Order. I want to hear the answer, and however long it takes—[Interruption.] Order. However long it takes, I will.

[The Prime Minister]

Thank you, Mr Speaker. The Leader of the Opposition is right to raise the issue of executive pay—and unlike the previous Government, who did nothing for 13 years, this Government will act.

[Sir Roger Gale (North Thanet) (Con)]

I understand that my right hon. Friend recommended me for one new present, and I am about to ask him for another. The Leader of the Opposition is talking drivel, I am afraid. My constituents on the Kent coast line had been paying up to 10% increases under the previous Government for the last four years, until they lost office. I congratulate this Government on their courageous decision to pursue High Speed 2. May I ask my right hon. Friend to turn his attention now to a piece of unfinished business left by the previous Government? High Speed 1 at present runs, in effect, only from St. Pancras to Ashford. Could he see it driven through to Thanet, so that we can enjoy the sort of benefits that in the future will be enjoyed by Birmingham?

[The Prime Minister]

First, I congratulate my hon. Friend on his well-deserved honour for his many years of service to his constituents. He is entirely right about what happened under the previous Government, when regulated fares went up by over 18% and unregulated fares went up by over 23%. I will certainly look into what he says about High Speed 1, but I think that it is an advertisement for what we can get by linking up our country with high-speed rail, shortening commuter distances and helping to change the economic geography of our country so that we can build a stronger economy.

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

Q2. Over 80,000 pensioners in Liverpool will lose up to £100 this winter following the Government’s cut in winter fuel allowance. Will the Prime Minister adopt Labour’s policy of ensuring that energy companies automatically put elderly customers on the cheapest tariff for gas and electricity?

[The Prime Minister]

I am afraid that, as with the hon. Lady’s party leader, there seems to have been an outbreak of collective amnesia on the Labour Benches, because we have kept the previous Government’s policy on the winter fuel allowance and are meeting in full all the promises that she and her party made on the winter fuel allowance. We have gone one further, because they introduced higher cold weather payments only for election year, but we have made them permanent.

[Sarah Newton (Truro and Falmouth) (Con)]

The Prime Minister will have experienced at first hand the quality of nursing at Treliske. What steps are the Government taking to ensure that patients across the country receive the highest possible standards of nursing care from the NHS?

[The Prime Minister]

My hon. Friend is entirely right. I well remember—indeed, I will never forget—the time I spent at the Royal Cornwall hospital and the happy days I had there, and it was a great privilege to go back again last year. We have very high standards of nursing care in our country and the overwhelming majority of nurses do a fantastic job, but I do not think that we would be serving our constituents properly if we did not highlight those few cases where it goes wrong, and we have seen in the Care Quality Commission reports that there are areas where it has gone wrong. I think that it is incumbent on the Government to try to remove the bureaucracy that can get in nurses’ way, but it is also important for us to highlight best practice in the best hospitals in our country—I visited an excellent hospital in Salford last week—and say, “Let’s copy that right across the country,” so that we have high standards of care and look after the nutritional needs, indeed all the needs, of vulnerable people in our hospitals.

[Edward Miliband]

I want to ask the Prime Minister about Scotland. We on this side of the House believe that the United Kingdom benefits the people of Scotland and the people of the rest of the United Kingdom in equal measure. We are stronger together and weaker apart. Does he agree that we must make the case for the Union—not simply a case against separatism, but the positive case about the shared benefits to us all of Scotland’s part in the United Kingdom: the shared economic interests, the shared institutions such as the NHS, the defence forces and the BBC, and above all the shared values we hold together?

[The Prime Minister]

I am happy to say that this is an area where the right hon. Gentleman and I will be in 100% agreement. I passionately believe in the future of our United Kingdom, and passionately believe that we are stronger together than we would be by breaking apart. Frankly, I am sad that we are even having this debate, because I support the United Kingdom so strongly, but we have to respect the fact that Scotland voted for a separatist party in the Scottish parliamentary elections, so the first thing that it is right to do is make clear the legal position about a referendum, which is what my right hon. Friend the Scottish Secretary has been doing. We have made the offer to devolve the power to hold that referendum so that it can be made in Scotland and held in Scotland. Frankly, I look forward to having the debate, because I think that too many in the Scottish National party have been happy to talk about the process but do not want to talk about the substance. I sometimes feel when I listen to them that it is not a referendum they want, but a “neverendum”. Let us have the debate, and let us keep our country together.

[Edward Miliband]

May I agree with the Prime Minister? This is not a fight about process between the Westminster Government and the Scottish Government, or between the British Prime Minister and the Scottish First Minister. The way to tackle this issue is to have immediate cross-party talks in Scotland about the timing of the referendum, the nature of the single-question referendum and the vital involvement of the Electoral Commission. Does the Prime Minister also agree with me that we need as soon as possible, as he said, to get beyond process and have that discussion about the substantive issues? This is a momentous decision that our children and grandchildren will have to live with if we get it wrong, so we need a serious, thoughtful and inclusive debate about the choices and the benefits to Scotland of staying in the United Kingdom. On this important issue, the people of our country deserve nothing less than that serious debate about the benefits of the United Kingdom.

[The Prime Minister]

The right hon. Gentleman is right on those three points. On the process of negotiation, which is very important now, particularly given that the SNP has come out and made more clear what it wants to do, I am very happy for the UK Government and the Westminster Parliament to speak directly to the Scottish Government and the Scottish Parliament, and let us come to a conclusion about the best time and the best way to hold the referendum. But it must be clear, it must be legal, it must be decisive and it must be fair. Those are the absolute keys. I absolutely agree with the right hon. Gentleman: as soon as those process questions are settled, we need to get on to the substance. [Interruption.] The only point I would make about the timing—[Interruption.] As SNP Members, who cannot seem to keep quiet, are so keen to leave the United Kingdom, I do not quite understand why they want to put off putting the question for so long.

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

What action will the Prime Minister take to tackle the appalling issue of forced marriage both in the UK and globally?

[The Prime Minister]

My hon. Friend is absolutely right to raise that issue. We have taken some steps, as the previous Government did, to try to crack down on the practice of forced marriage, which, tragically, does take place in too many communities and too many places in our country. We are looking specifically at whether we should take further legal powers and make it a criminal offence, and I am taking a personal interest in the issue, as I think we should be taking every available step to say that it is simply unacceptable, in 2012 in a civilised country such as ours, to have such a barbaric practice.

[Lilian Greenwood (Nottingham South) (Lab)]

Q3. Nottinghamshire police serve areas of deep deprivation, face some of the highest crime levels in the country and, rightly, have ambitious crime reduction targets, but Her Majesty’s inspectorate of constabulary says that Nottinghamshire is one of five forces facing the most significant challenge to protect their front lines, and senior officers tell me that Government cuts will impact on front-line policing. Is it not time to implement the police funding formula in order to give my local police the resources that they need?

[The Prime Minister]

I shall look carefully at what the hon. Lady says, but all police forces are having to make efficiencies, and I praise chief constables for the steps that they have taken to deliver those efficiencies without affecting front-line policing, while at the same time still delivering a reduction in crime levels.

In Nottinghamshire police there are still 47 officers working in back-office jobs, there are still trained police officers working in human resources, finance and corporate development, and there is still further work to be done to civilianise those parts of the police force and make sure we get all our police officers out on the front line.

[Andrew Stephenson (Pendle) (Con)]

Q4. Following the murder of my constituent Jane Clough by her former partner, a rapist, Jonathan Vass, I presented the Bail (Amendment) Bill to the House, and in October the Ministry of Justice team agreed to change the law. Can the Prime Minister confirm to the House, and to Jane’s parents, who are in the Public Gallery today, when that will happen?

[The Prime Minister]

First, on behalf of the House, may I pay tribute to my hon. Friend for his work on the issue and, indeed, on that case? Our sympathies go out to the family, who have suffered so appallingly. I accept, and the Government accept in principle, that there should be a right of appeal against Crown court decisions allowing bail. There is of course that right in magistrates court cases, so there is a strong case for changing the law, and we will table an amendment in the Lords to the Legal Aid, Sentencing and Punishment of Offenders Bill, creating a right of appeal to a High Court judge against the granting of bail by a Crown court. I hope that that will improve the law, be more helpful to victims and give some satisfaction to the family whom my hon. Friend is representing so well.

[Angus Robertson (Moray) (SNP)]

The Scottish Government were elected with an overwhelming mandate to deliver an independence referendum in the second half of this parliamentary term—[Interruption.] They were. It is a fact. In contrast, the Conservative party has fewer Members of Parliament in Scotland than there are giant pandas in Edinburgh zoo. Why is the Prime Minister trying to emulate Margaret Thatcher by dictating to Scotland?

[The Prime Minister]

Quite the opposite: we want to give Scotland the power to hold a legal referendum. Right across this House there is a uniform belief that that needs to happen. Discussions can now be entered into about the timing of the referendum and its precise nature, so that we can ensure that it is fair and decisive. The people of Scotland deserve nothing less.

[Greg Mulholland (Leeds North West) (LD)]

Q5. Care of our older people is one of the most pressing issues facing this country today. Will the Prime Minister join me in welcoming Age UK’s Care in Crisis campaign, which was launched on Monday? Will he commit to ensuring that the White Paper due in the spring will present a way forward on this vital issue?

[The Prime Minister]

I pay tribute to my hon. Friend for his work on this issue, and to the Age Concern campaign. We have a huge challenge to rise to this agenda and we want to do so through the White Paper. There are three elements: we must do something about the rising costs of domiciliary care, improve the quality of the care that people receive, and address the issue of people having to sell their homes and all their assets to pay for care. We are looking hard at all those issues to work out a way forward that is right for our system, and that the country can afford.

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

Q6. The Sunday Times showed that in the past two years the 1,000 richest persons in Britain got richer by £137 billion—enough to pay off the entire deficit. Will the Prime Minister therefore tax them to fund the creation of 1 million jobs, which would be a far better way of cutting the deficit than prolonged austerity?

[The Prime Minister]

For a minute, I thought that the right hon. Gentleman was talking about the Prime Minister he served under. It is essential that as we reduce the deficit and take difficult decisions we are fair, and are seen to be fair. What we have done so far has seen the top 10% of the country paying 10 times more than the bottom 10%. Crucially, the top 10% in terms of earnings are paying more not only in cash terms, but as a percentage of their income. As we go ahead with this agenda, I want to ensure that people behave responsibly, and that the Government do too.

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

Q7. I am sure that you, Mr Speaker, and the Prime Minister will want to congratulate Mr Tony Whatling, who has served as postmaster in Westhall for more than 60 years and has still not retired. However, residents in Wangford and Walberswick are being let down because there is no post office outreach provision. Will the Prime Minister encourage the Post Office to use its generous subsidy to ensure that rural villages are served, not left stranded?

[The Prime Minister]

I certainly join my hon. Friend in paying tribute to Mr Whatling. To run a village store and post office for 60 years is a huge achievement. It is people like him who keep our country going. The Government have committed £1.3 billion to improve the network. As a condition of that funding, the Post Office must maintain at least 11,500 branches, but the point that my hon. Friend makes about mobile post offices is a good one. That is a way to serve many communities and to ensure that elderly and vulnerable people in particular get the services that they need.

[David Simpson (Upper Bann) (DUP)]

Q8. The Deputy Prime Minister is reported to have said in the past few days that in due course the UK will sign up to the EU treaty that the Prime Minister rejected a short time ago. Was the Deputy Prime Minister correct?

[The Prime Minister]

The position is very straightforward. We did not sign the treaty because we did not get the safeguards that we wanted to receive. That situation is not going to change. What coalition partners want to put in their manifestos at the next election is entirely up to them.

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

Q9. Does the Prime Minister agree that people should pay their taxes, keep their businesses onshore and not live as tax exiles in Switzerland, leaving pensioners high and dry? What is he doing to stamp out such predatory business practices?

[The Prime Minister]

My hon. Friend makes an interesting point. For all the lectures about predatory capitalism and taxing different businesses in different ways, the one person the Leader of the Opposition has chosen to advise him on this issue has based all his companies in the British Virgin Islands.

[Valerie Vaz (Walsall South) (Lab)]

Q10. The funding for the United Kingdom Resource Centre for women in science, engineering and technology has been cut. Given that 1 million women are unemployed and that women make up only 12.3% of people in science, engineering and technology, will the Prime Minister look again at funding for the UKRC, and at thereby restoring Britain’s leading role in science, which nurtured the talents of Dorothy Hodgkin and Rosalind Franklin?

[The Prime Minister]

I will certainly look at the case that the hon. Lady sets out. As she knows, despite having to make difficult decisions across a range of public spending areas we did not cut the science budget. Indeed, in the autumn statement the Chancellor provided a series of enhancements for specific science-based projects. I will look at the specific one that the hon. Lady mentions and get back to her.

[Mike Crockart (Edinburgh West) (LD)]

Today, unfortunately, is the 10th anniversary of the opening of Guantanamo Bay, a despicable institution that to this day still holds one UK national. Will the Prime Minister commit to doing all he can to see that 2012 is the last year in which that institution operates?

[The Prime Minister]

My right hon. Friend the Foreign Secretary is working very hard with the United States to try to secure the issue and bring this chapter to a close. As the hon. Gentleman will know, we have also taken steps as a Government and as a country to try to achieve some closure to what happened in the past, through a settlement with the people who were in Guantanamo Bay and through setting up a proper inquiry to ensure that the British Government were not complicit in any way in the torture of people in Guantanamo Bay or elsewhere.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

Q11. A moment ago, the Prime Minister was clear that it is crucial that Government economic policy be fair and be seen to be fair. Can he therefore confirm that the 50% tax rate on incomes above £150,000 will remain in place for the duration of this Parliament?

[The Prime Minister]

We take pretty much the same point of view as the former shadow Chancellor who, when he introduced that rate, said that it should be a temporary measure. I think we should also make a judgment about how much money the tax is actually raising. The purpose of the tax system is to raise money for the funds that we need to put into our public services, and it is very important that we look at how it works in practice.

[Heather Wheeler (South Derbyshire) (Con)]

Will the Prime Minister congratulate the Secretary of State for Transport and the good workers of Bombardier on securing a £188 million contract on 28 December, and on the announcement on the Toronto stock exchange, which was so important to the workers in Derbyshire?

[The Prime Minister]

I congratulate everyone at Bombardier on winning that contract. As I have said before from the Dispatch Box, I want the Government to be a good customer of British firms and work with their supply chain, and not to make the mistakes that the last Government made. They drew up the contract for the railway service that Bombardier did not win.

[Tony Lloyd (Manchester Central) (Lab)]

Q12. The Prime Minister will probably be aware that a chief executive of a stock exchange top 100 company is paid 35 times as much as a hospital consultant who keeps people healthy and saves lives. If the Prime Minister is going to act tough on high pay, and if he really does get it, will he give a date—a year from now, or within the lifetime of this Parliament—when we will see that obscene 35 times multiple come tumbling down?

[The Prime Minister]

I do think that we should make progress on the issue of pay ratios, and we can start with the Government setting out their own pay ratios as an act of leadership. I think this Government have shown some leadership, not least by cutting and freezing Ministers’ pay and having total transparency on pay across Government. On the specific case that the hon. Gentleman raises, this year we have seen a 49% increase in pay yet only a 4% increase in the FTSE. I am not against people running great companies being paid lots of money if they are growing and expanding them and succeeding, but we should not have rewards for failure. Frankly, the last Government had 13 years to deal with this, and did sweet nothing.

[Nick Boles (Grantham and Stamford) (Con)]

Does the Prime Minister think that it can ever be fair for a single family to receive £100,000 a year in housing benefit alone?

[The Prime Minister]

My hon. Friend makes an important point. The issue of top people’s pay and this issue are, in many ways, linked. We need to get rid of a something-for-nothing culture in this country. We inherited an out-of-control benefit system in which there were families on many tens of thousands of pounds of housing benefit. We had an out-of-control immigration system in which it paid to cheat, and we also had an out-of-control banking system in which reward was not linked to success. Unlike the last Government, we are going to deal with all those things.

[Tony Cunningham (Workington) (Lab)]

Q13. The Cumbrian health economy is in crisis—real crisis. How does the Prime Minister propose to deal with it?

[The Prime Minister]

The first and most important thing is that we are committed to year on year increases in NHS spending. I am afraid that that position is not backed by the hon. Gentleman’s party. Alongside the extra money, we also need to make sure that there is reform so that we give clinicians a leading role in the health service. We also have to do more on the public health and health promotion agenda, because that is the best way to reduce demands on our NHS. There is also one extra thing that we need to try to achieve: looking at the links between alcohol and crime, and alcohol and hospital admissions, which put massive pressure on our NHS. That is an issue that I want this Government to deal with.

[Sir Bob Russell (Colchester) (LD)]

Ethnic cleansing and apartheid are evil. Sadly, successive Governments have supported a country where those vile actions are inflicted on indigenous people. We welcomed the Arab spring, but the long Arab winter continues for Palestinians. Last Tuesday the Israeli Government said that they would proceed with the forced eviction of 30,000 Bedouin Arabs from their historic lands. Is it not time we treated Israel as we did apartheid South Africa?

[The Prime Minister]

What I would say to my hon. Friend is that first, we should respect the fact that Israel is a democracy. It is a country that has a right to exist and that has frequently been threatened by its neighbours—but also, we are a country that should stand up for clear human rights and clear rights and wrongs in international relations. This Government have been very clear that we do not agree with the Israeli Government’s practice on settlements. I raised the issue myself with the Israeli Prime Minister in a new year telephone call, and this Government will continue to act and vote on illegal settlements.

[Liz Kendall (Leicester West) (Lab)]

Q14. Bethany Mickleburgh, a 14-year-old girl in my constituency, has leukaemia and desperately needs a bone marrow transplant. Despite an incredible campaign by her family to get more people to join the blood stem cell register, Bethany still does not have a match and is having to look overseas. What plans do the Government have to improve public awareness of that vital issue and increase the number of potential bone marrow donors in the UK?

[The Prime Minister]

The hon. Lady is right to speak up for Bethany specifically, but also for all bone marrow cancer sufferers. The need to get more people on to the register, because of the importance of trying to get a match, is not widely enough understood. The Government will spend about £4 million this year to help promote that and make it happen. However, all of us, in our constituencies and in our own ways, can promote the idea and encourage people to do as the hon. Lady says.

[Mr Julian Brazier (Canterbury) (Con)]

May I draw my right hon. Friend’s attention to the excellent paper that ResPublica published this morning, which seeks to build on the Government’s initiatives both to build up cadet forces and to get more former military personnel into schools as teachers? It proposes that we set up in some of most deprived communities military academies and free schools administered by the reserve forces and cadets associations.

[The Prime Minister]

I pay tribute to my hon. Friend, who does so much to speak up for our reserve forces and our cadet forces, which are incredibly valuable assets to our country. It is worth noting that this year the cadet forces will do a huge amount to try to save and preserve our war memorials from the appalling crime of metal theft that they have been suffering. I will look very carefully at the ResPublica report that my hon. Friend mentions. We should empower our cadet forces to expand and perhaps to go into parts of the country where they have not always been present. The link that my hon. Friend makes between them and schools is a very good idea, which we should promote and support.

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

My constituent Miss S, who is 32, has lived alone for eight years and was forced on to housing benefit because of redundancy. That benefit has just been cut by nearly 50%, to the shared accommodation rate. Which does the Prime Minister think is most likely: that her landlord will reduce the rent by 50% or that she will be made homeless?

[The Prime Minister]

I congratulate the right hon. Lady on her preferment in the new year’s honours list. Although I profoundly disagree with many of the things that she has tried to do over her political career—mostly to disarm Britain one-sidedly—I praise her for her persistent efforts. No one can accuse—[Interruption.] I am sorry; let me answer the question very directly. As I understand it, all parties are committed to reform housing benefit. That was Labour’s commitment before the election. The housing benefit bill is completely out of control. Labour’s own welfare spokesman said last week that, at £20 billion, it was unacceptable and had to change. What we have seen so far, as housing benefit has been reformed and reduced, is that rent levels have come down, so we have stopped ripping off the taxpayer.

[Mr Speaker]

We now come to a statement by the Secretary of State for Health. Will Members who are leaving the Chamber do so quickly and quietly so that we may hear this very important statement?

Breast Implants

Wednesday 11th January 2012 Commons Chamber

12:35

[The Secretary of State for Health (Mr Andrew Lansley)]

With permission, Mr Speaker, I would like to make a statement about PIP breast implants. The House will be aware that approximately 40,000 women in this country have had implants manufactured by the French company Poly Implant Prothese, and that these implants could have been made of a non-medical grade silicone gel. My concern throughout has been for the safety and well-being of all these women. I wish now to update the House on what happened; how we are looking after the women concerned; and the further actions required.

In 1997, PIP received a European CE mark for its silicone breast implants. The CE mark was overseen by the German notified body, TUV Rheinland. The Medicines and Healthcare products Regulatory Agency adverse incident centre received a number of reports annually about PIP implants. Based on such reports, in 2008, the MHRA raised its concerns with the German regulatory authorities and the manufacturer. The MHRA was reassured by the notified body that the number of adverse reports was adequately explained by changes in the company’s reporting practices and by the increasing number of implants sold.

However, in March 2010, the French regulator discovered that rather than using medical grade silicone gel in the implants, PIP had in fact been using unauthorised silicone gel. This is in clear violation of the CE mark. The mark was promptly withdrawn and all EU member states immediately alerted. The MHRA immediately issued advice to stop using PIP breast implants in the UK. The French authorities are currently investigating this as a criminal matter, and the UK Government will help in any way we can with their investigation.

Initial toxicology tests in both France and the UK found no significant health risk to women with the implants. Also the MHRA could find no evidence of an increased risk of cancer. However, on 23 December 2011, following an increase in the number of reported ruptures, the French Ministry of Health announced that it was advising women, as a non-urgent precautionary measure, to consider having their PIP implants removed. The MHRA’s advice was that there was no scientific basis for recommending routine removal of implants in the absence of symptoms.

The available data, however, were incomplete. For this reason, I asked Sir Bruce Keogh, the NHS medical director, to form an expert group and to review the available data, including information from the French authorities, and to offer more definitive advice. I received the group’s interim report on Friday 6 January and a copy has been placed in the Library. I would like to thank the experts and members of the profession for their hard work and commitment in producing this rapid report.

The main findings of the expert group were, first, that there is no causal link between these implants and breast cancer. Secondly, the evidence on the rate of ruptures for PIP implants compared with other implants is incomplete and so this risk cannot be assessed definitively. Thirdly, although the rupture of implants or leakage of material can result in inflammation, there is no clear evidence that these problems are more serious in relation to PIP implants than other implants, or that they result in increased long-term health risks. Therefore, they have not recommended routine removal of the implants. Fourthly, there are risks inherent in the removal of breast implants, just as with any surgery, and these risks should be taken into account when taking any clinical decisions. However, for this particular group of women the risk is very low. Fifthly, the expert group recognises, as we have throughout, that women with PIP implants will be understandably concerned that they did not have the character of implant that they thought they did. The expert group advises, as we have, that we should give every woman an opportunity to secure advice, investigation and remedy.

The women who received the implants did so on the understanding that the implants met the requirements of the CE mark and were safe. That was not the case, and every provider has a responsibility to put things right. Although the majority of women will have received their implants privately, some—such as those who have had reconstructive surgery following mastectomy—will have received PIP implants through the NHS. All those patients will receive the highest possible standard of care. First, they will be contacted to inform them and give them all the relevant information and advice. Women who wish to will be able to speak to their GP or the surgical team that carried out the original implant to get advice on the best way forward for them. If the woman chooses, that could include an examination by imaging. If, when informed by an assessment of clinical need of the risks involved and the impact of any unresolved concerns, a woman decides with her doctor that it is right to do so, the NHS will remove and replace the implants, if the original operation was done by the NHS. Last week the NHS chief executive wrote to the service, and Dame Sally Davies, the chief medical officer, wrote to GPs and relevant health professionals. Copies of those letters are available in the Library.

It is right that those who received their care privately should also receive a similar level of service and reassurance from their care provider. However, I do not think it fair to the taxpayer for the NHS to foot the bill for patients who had their operation privately. Eight private health care companies, including Nuffield Health, Spire Healthcare and BMI, have confirmed that they will follow the same guidelines as those that I have set out for NHS patients. However, I want to be absolutely clear that the NHS will continue to be there to support any woman. If a clinic that implanted PIP implants no longer exists or refuses to remove the breast implants, where that patient is entitled to NHS services, the NHS will, in consultation with their doctor, support the removal of PIP implants in line with the guidance that I have just outlined. Any NHS service in that instance would cover only the removal of the implant, which would not include the replacement of private cosmetic implants. In such cases the Government would pursue private clinics to seek recovery of our costs.

These events highlight the need to ensure the safety of people having cosmetic interventions. It is clear from the information that we have received from the industry that the safety information that it collects and provides to the regulator is of variable quality. Without good data, we have no way of knowing when problems arise. I believe that there are a number of things that we now need to do. First, lessons need to be learned from this case and incorporated into the ongoing review of the EU medical devices directive. I spoke to Commissioner Dalli yesterday, and can confirm that this European work is under way. We also need to understand what happened in this instance in the United Kingdom. A review for that purpose will be led by the Minister for Quality, Earl Howe, with expert advice, and will shortly put its terms of reference in the Library. That review will investigate and report rapidly. The blame for what happened lies with PIP, but the review will enable us to learn lessons to improve future regulatory effectiveness and will feed into the Commission’s review.

In addition, the Care Quality Commission will conduct a swift review of private clinics. That review will look at evidence of compliance, patient safety and clinical quality, and the information and support given to their patients. Where a provider does not meet those requirements, the CQC has a wide range of enforcement powers that it can use to protect the safety of patients. The findings of that review will be published before the end of March.

Looking to wider issues of clinical safety and regulation, I have also asked Sir Bruce Keogh to reconstitute his expert group to look at how the safety of patients considering cosmetic interventions can be better ensured in the future. That will include treatments such as cosmetic surgery and dermal fillers. I expect his review to consider whether cosmetic products and interventions are appropriately regulated and have strong clinical governance; whether patients and consumers can be confident that the people who carry out procedures have the skills to do so; and whether the settings in which such procedures take place are able to ensure the care and welfare of people who use their services. That review will consider issues of governance, data quality, record keeping and surveillance, as well as ensuring that proper information is provided to secure patients’ informed consent.

I expect the review also to include consideration of an outcomes-based register of frequently implanted devices, covering everything from breast implants to heart valves and replacement joints, in order to provide the United Kingdom with a valuable asset for further innovation and safety improvement. There is already considerable clinical support for such a comprehensive register. The Government’s commitment is to provide effective reassurance and remedy for women with these implants, and also to learn the lessons to deliver safety and quality for the future. I commend this statement to the House.

[Andy Burnham (Leigh) (Lab)]

I thank the Health Secretary for his statement, and for the steps that he is taking to help the thousands of women who have found themselves in this worrying situation. We welcome much of what he has just announced, including the further reviews that he has commissioned. I assure him that we will support him in his efforts to reach a resolution as quickly as possible for all those people who are affected, but I have to tell him that he has a lot of work to do, and a lot of ground to recover, as his response to date has not helped to build those people’s confidence.

Over the Christmas break, the mixed messages coming from the Government did not go unnoticed. They only added uncertainty in what has been an anxious time for many people. The Health Secretary has gone from downplaying the dangers on 23 December to announcing an urgent review on new year’s eve, then giving an inconclusive statement late last Friday evening. This has left the people affected struggling to make sense of what it means. For the vast majority whose implants were fitted privately, there was precious little practical advice or help from the Department of Health as they began approaching their private providers. Many women were unable to access their records or told that long delays would be involved. Others have been asked to pay large fees to access their records. Many have simply hit a brick wall when they have sought medical advice or removal, even where there is evidence of rupture.

What people needed at the earliest stages was a strong statement from the Government of what was expected of all private providers—namely, that records should be provided without delay and without charge; that consultations should be arranged when people were worried; and that removal should be arranged urgently when there was evidence of rupture. The reality is that the Government’s failure to provide that leadership from the outset has left people fending for themselves in the face of a self-serving and unaccountable industry.

The Health Secretary was right, however, to establish an urgent review of the evidence by the NHS medical director, Professor Sir Bruce Keogh. We welcome the speed with which that review was conducted, and we echo the Health Secretary’s thanks to the members of the review panel. We accept the Government’s judgment on the advice to women regarding the removal of implants on the basis of the data that they have seen, but what confidence can we have in the evidence and data on which those decisions were reached?

We note the Secretary of State’s public comments about the industry’s failure to provide quality information in a timely fashion, and the interim report’s finding that the evidence is subject to “considerable uncertainty”. The review concludes that it should reconvene in “about four weeks time” to examine any new evidence, and to consider whether to update its recommendation on removal. I have to tell the Health Secretary, however, that that feels way too vague and ad hoc. May I press him to give a clearer timetable for this further process of review on whether to change the recommendation on removal? People need absolute clarity on when further statements will be made, so that they can make informed decisions. This is of course a separate matter from the long-term reviews that he has announced today.

This is particularly important in the light of the different decisions that other Governments are beginning to make in response to the situation. Yesterday, the Welsh Government announced that all women who received PIP implants, including those treated privately, will be offered replacement implants on the NHS. That is of course different from what the Health Secretary has announced today. What discussions did he have with his counterpart Minister in the Welsh Assembly Government before their announcement was made? Will he assure the House today that all the data that were available to Welsh Ministers and officials were also available to, and considered by, the Keogh review? Governments around Europe have responded sooner, more decisively and with greater clarity than the coalition has done. By contrast, people here have found the Government’s statements in response to be both inconclusive and ambiguous.

We support the decision to help NHS patients to have PIP implants removed and replaced, but does the Secretary of State appreciate how that decision has added to the confusion that many people feel and was interpreted as contradictory to the review’s overall finding? The clear implication of the Keogh review is that the best course of action is, in fact, to have the implants removed, but again no practical help was offered beyond the statements of expectation for private providers to match the support on offer from the NHS and the reference made to “moral duty”.

I, too, commend the private providers, such as Nuffield, Spire and BMI, that have done the right thing by their patients, but in recent days we have heard how some of the leading cosmetic surgery clinics have simply ignored the Health Secretary’s appeal. Transform, which used PIP implants on over 4,000 patients, has said that all women affected will have to pay £2,800 for removal, while the Harley Medical Group, which has 13,900 patients with PIP implants, has offered to pay for the cost of the new implant, but only if the NHS pays the far greater bill for the surgery. I am sure the whole House will agree that this is an appalling response to this situation, and that the failure of these companies to face up to their duty of care for their patients leaves everybody, including the Government, in a difficult position. It is simply unacceptable for any woman in England to be left in a position where she is worrying about her health and thus has no peace of mind, but is unable to afford to do anything about it.

I appreciate what the Health Secretary has said today about helping people out of this predicament. I agree with his decision where private clinics no longer exist, but in accepting that the NHS will provide private treatment where private providers refuse to, is he not in danger of letting those providers off the hook? May I remind him that most people will not accept that the NHS should subsidise the failures of private companies, and will look to him to pursue them to the nth degree to get any costs back? For instance, has he fully explored the insurance position of these private providers as a means of recovering costs? He says he will pursue them, but what assumptions has the Department of Health made about the likelihood of his success, and how much money is expected to be recovered? Has he fully explored the position of the French Government and considered whether there is any residual liability on the device manufacturer in that company?

Let me turn briefly to questions of regulation. Can we support what the Secretary of State said today about the wider review of regulation of the cosmetic surgery industry? If there are any loopholes, we will support him in closing them down.

Finally, the right hon. Gentleman’s Health and Social Care Bill envisages a much expanded role for the private sector in the delivery of health care. I make no comment about that, but has he reflected on the Bill and revisited the assumptions behind it? Will he assure us that issues of quality and safety will be safeguarded in the NHS that he seeks to create? We want to be assured that he is giving careful consideration to all these issues, as he considers his response to this worrying situation.

[Mr Lansley]

I am grateful to the shadow Health Secretary for his welcome of my statement and the principles behind what we are setting out to do to look after the women affected by these implants.

I do not share the right hon. Gentleman’s view that there were any mixed messages. I am sure he would have been the first to complain if I had not identified the lack of available and consistent data and not asked an expert group to look into this. As we look at countries across the world, we can be confident that we have set an exemplary standard in looking after women through the NHS and in bringing together an expert panel fully to understand what would be the best advice for women. The advice that no identified specific safety concern justified the “routine removal” of these implants was true on 23 December and it remains true today. As we have recognised from the outset and as I said on 23 December, if women are worried or concerned about the possibility of not having the implant they thought they had, that provides a perfectly reasonable basis on which to seek advice and investigation. It would be right for some women to ask for removal, but we should not assume that women are choosing to have these implants removed on the basis of clinical advice—even in France.

The chief medical officer spoke to a clinical counterpart in the Welsh Assembly Government before the publication of the expert group’s work. I have made sure that they are informed, but I have to say that the Welsh Government made an announcement yesterday without previously informing us.

[Paul Flynn (Newport West) (Lab)]

It’s called devolution.

[Mr Lansley]

It may be called devolution. I respect the devolved Administrations and always inform them of what I am doing, where it is relevant to them. We do not recognise the advice that Wales received. Sir Bruce Keogh’s expert group, which included some of the foremost experts in plastic surgery, made clear recommendations last week for patients in England and concluded that there was no significant increased clinical risk in cases where implants are not replaced.

If the shadow Secretary of State commends what the Welsh Government have done—[Interruption.] Perhaps he did not, but if he or anyone were to commend it, they would need to recognise that it runs the risk of letting the private providers off the hook. I am very clear that they should provide an equivalent standard of care. As the right hon. Gentleman made clear, there are limitations on what can be done. I do not have powers and I did not inherit powers to control what the private providers do in the private sector. I have to tell the right hon. Gentleman, however, that I have reflected on the Health and Social Care Bill, which is a positive legislative step forward. Just as it allows Monitor as a health and social care sector regulator, on which we are consulting, to look at the prudential regulation of private providers in social care, so it would allow us to consider the role of Monitor as a health sector regulator in licensing private providers of private health care. It is thus a positive not a negative step forward. There is no comparison, as the right hon. Gentleman will recognise, between the role of the private sector providing private care and the private sector in the NHS, which is subject to the same duties and obligations as an NHS provider. The Bill does not lead to an increase in private sector provision, but in so far as there are private sector providers, they will be properly regulated in the NHS.

On the role of private providers, they may be insured and there may be warranties relating to these implants. We do not have data on this aspect, but I am clear that these providers have legal and, indeed, moral obligations. I particularly commend a letter issued this morning by the leaders of the profession—the two principal professional associations—to their surgical colleagues. Having talked about the standard of care in the NHS, the letter went on to say:

“Those working in the private sector are urged to support in similar fashion. We would hope that implanting surgeons would honour requests for replacement surgery free of surgical charge”.

The private providers that have not made this offer to the women for whom they are responsible can see that their surgical associates are willing to carry this out free of surgical charge, so I see no reason why they should not now step up and deliver the standard of care that women have a right to expect.

[Mr Stephen Dorrell (Charnwood) (Con)]

May I welcome my right hon. Friend’s statement and the prompt action he has taken over the last few weeks to address this issue? Does he agree that the first priority when these concerns came to light was to ensure that the women who have had these implants had clear, authoritative advice based on the evidence of the right way to treat them, and that the process he established under Sir Bruce Keogh has provided and will continue to provide exactly that authoritative evidence-based advice? Does he further agree that there are some longer-term policy issues around the regulation of this industry that need to be addressed, but in a more considered way and not tied up in the emotions of this immediate concern?

[Mr Lansley]

I am grateful to my right hon. Friend and agree with all his points. I would add that when the French Government informed us of their prospective announcement—I spoke to the French Health Minister the day before it—we gave the best advice to date, based on the MHRA’s knowledge of the toxicology tests and its discussions with the French regulator. What we have to do is to establish the extent to which surveillance of these implants over a number of years should have led to any different conclusion. It remains true, however, that there is no evidence of long-term health effects that would give rise—and would have given rise at that time—to a different recommendation from the one that we made.

[Ann Clwyd (Cynon Valley) (Lab)]

This is not a new issue, as the Secretary of State must know. Twenty years ago I raised the case of a constituent who had to have a double mastectomy because silicon implants had leaked in her body. As a result, we set up an organisation called SOS—Survivors of Silicon. We worked with Which? magazine and the Department of Health, and we helped to set up the register of implants, which was unfortunately not made compulsory. That is why the data are missing.

This is part of a wider issue, of the proper regulation of the cosmetic surgery industry, 70% of which is virtually unregulated. I hope that the Secretary of State will insert an amendment into the Health and Social Care Bill to ensure that there is proper regulation of the whole industry.

[Mr Lansley]

I completely understand the right hon. Lady’s point, but this activity is not unregulated. For example, the Care Quality Commission is responsible for the registration of providers, and for ensuring that they meet essential standards of safety and quality. However, for precisely the reasons cited by the right hon. Lady, I am asking Sir Bruce Keogh’s group to consider wider issues relating to the regulation of cosmetic surgery and cosmetic interventions.

The registry to which the right hon. Lady referred was discontinued in 2004 because a substantial number of women were not consenting to the addition of their names to the register. I believe that, given the positive experience that has followed the establishment of the National Joint Registry, we can reassure women that their data can be entered without prejudicing their patient confidentiality.

I should make it clear that as yet we have no evidence demonstrating any significant difference between the rupture and leakage rates of PIP breast implants and those of other implants. Last June the American Food and Drug Administration published the findings of a study of normal implants, two of which had a 10% to 13% rupture rate over a 10-year period. It is important to appreciate that implants in themselves pose a distinct risk of rupture and leakage.

[Dr Sarah Wollaston (Totnes) (Con)]

I welcome the clear commitment to putting women’s health needs first in this context, but is not the heart of the problem the obvious conflict of interests for private clinics when it comes to the provision of long-term safety statistics? Will my right hon. Friend ensure that any future system allows women to self-report to the registry—albeit with a follow-up from specialists for confirmation purposes—so that we can have a complete picture of the long-term complications caused by devices of this kind?

[Mr Lansley]

My hon. Friend is right. When Sir Bruce and his colleagues are considering the establishment of a wider registry, they will consider not only the possibility of self-registration but the possibility of making clinical professionals responsible for the publication of such data. The responsibility should not rest solely on providers or manufacturers.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

I understand that a number of private clinics will not even scan a patient with PIP implants without charging. However, these goods were counterfeit. They were not of a medical standard, and they could be injurious to health. Should not the NHS be prepared to help women who must be worried sick, and perhaps cannot even afford to have a scan to reassure them? I cannot believe that the NHS would turn its back on a patient who was suffering after drinking counterfeit vodka, so why should it turn its back on these patients?

[Mr Lansley]

I am sorry that the hon. Lady framed her question in that way, because I thought I had made it clear that the NHS would always be there to support women. We will seek to recover the cost to the NHS if the original provider was a private provider: that approach has been adopted for years, and I am sure that it would have been adopted by my predecessors. No woman should have to feel that she will not be looked after, but I am making a different point—namely that, in the first instance, women should be looked after by the original providers, who have a continuing duty of care. They also have legal obligations—as well as the moral obligations to which I have referred—but it is not for me to advise on those.

[John Pugh (Southport) (LD)]

If the Government are paying for something that is needed, it is logical to assume that some private firms must be dodging their responsibilities. If those firms are not indemnified against the risks of surgery or willing to accept responsibility for its consequences, why on earth do we allow them to practise? Does the remedy not lie in our hands?

[Mr Lansley]

I entirely understand my hon. Friend’s point. The position we have inherited is that I have no powers in relation to the provision of private health care by private companies. As I said to the right hon. Member for Leigh (Andy Burnham), the Health and Social Care Bill provides for the establishment of Monitor as a health sector regulator that will license such providers. I am not making any judgment at this point on whether it would be appropriate for conditions to be attached to such licences in relation to the continuity of service to patients, but it is one option that we can consider.

[Chris Bryant (Rhondda) (Lab)]

May I suggest to the Secretary of State that the problems in the cosmetic intervention industry may be far more extensive than we have known thus far? A few years ago, I had my eyes lasered. I visited five clinics, four of which seemed to be trying to sell me an intervention rather than trying to do anything that would be in my general health interest. Will the Secretary of State add laser surgery clinics to his list, and also private dentists, many of which are encouraging patients to undergo operations that they certainly do not need?

[Mr Lansley]

I will reserve my position on dentistry, because there is a very wide range and cosmetic intervention constitutes a substantial proportion of overall dentistry activity, but I will happily consider whether there is an issue to be dealt with. As for laser eye surgery, I will ask Sir Bruce’s group to consider not only the establishment of a registry in relation to implants and devices, but cosmetic interventions more generally. I hope that we shall be able to reassure the hon. Gentleman when we publish the terms of reference.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Before I call Margot James, let me wish the hon. Member for Rhondda (Chris Bryant) a very happy birthday.

[Margot James (Stourbridge) (Con)]

I commend the Black Country Partnership NHS Foundation Trust on conducting 517 breast implant operations in the decade before 2008 without the use of a single PIP implant.

What this furore has revealed to me is the existence of a growing private sector offering a vast array of cosmetic surgery that extends well beyond breast implants. I fear that the need for tighter regulation of the industry will prove widespread, and I therefore welcome the Government’s commitment to a review. Does my right hon. Friend expect to be able to charge the private sector for the costs of any additional regulation that the review group may deem necessary?

[Mr Lansley]

I am grateful to my hon. Friend for what she said about the NHS. I think that before considering whether there is a cost associated with regulation and how it might appropriately be met, we should consider what is necessary to assure patients of safety and quality.

[Grahame M. Morris (Easington) (Lab)]

I welcome the statement, but may I caution the Secretary of State against placing additional burdens on the Care Quality Commission without providing it with additional resources? May I also urge him to heed the advice of my right hon. Friend the Member for Leigh (Andy Burnham), and pause to listen and reflect on what lessons can be learned and what safeguards can be provided for the future? I am thinking both of the protection of patients’ safety and of future NHS liabilities when surgical procedures or treatments are carried out by the private sector, which is likely to become more frequent as the privatisation provisions of the Health and Social Care Bill are implemented.

[Mr Lansley]

For reasons that I have already explained, the hon. Gentleman is simply wrong about that. It is nonsensical to attempt—as the editor of The Lancet did this morning—to compare the regulation of private providers of private care with that of private providers of NHS care. There is no comparison at all.

The CQC will inspect a sample of providers of cosmetic surgery to check that they are meeting registration requirements, and will undertake a number of unannounced inspections as part of that. We expect the inspections to be completed by the end of the month, and expect the CQC to have published its report by the end of March. It has confirmed that it has enough resources to undertake the inspections within its existing budget.

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

I add my support and thanks to the Secretary of State for what he is doing on this very important issue which has caused so much distress to so many women. Does he agree that this episode flags up a wider issue in the cosmetic surgery industry, in that some practitioners performing medical procedures do not have any medical qualifications or knowledge of anatomy? Does he also agree that it is a problem that there is no psychological counselling and that a holistic look at patients is not taken, as this is an on-demand industry? Finally, does he agree that there must be a proper paper trail and record system in the industry, so that we can consider what is in the best interests of patients and so that there is proper accountability for all providers?

[Mr Lansley]

My hon. Friend makes a number of important and perceptive points. It is, and will continue to be, one aspect of NHS advice that psychological assessment can form an important part in the management of patients referred for low-priority procedures, including cosmetic surgery. However, although we will look at cosmetic interventions and their regulation more widely, we must recognise that the issue in this instance related to what was a criminal act—seeking to adulterate the material in the implants. Many private providers were using what they regarded as properly certified implants for a perfectly proper procedure. To that extent, they were not engaging in any improper behaviour. However, they have legal and moral obligations to their patients, and I am asking them to discharge those obligations.

[Fiona Mactaggart (Slough) (Lab)]

It saddens me that, despite previous reports recommending more effective regulation of the cosmetic surgery industry, it has taken this crisis, causing so much distress to so many women, for the issue to be taken seriously. I am nevertheless glad that it is being taken seriously. Will the Secretary of State consider ensuring that people seeking cosmetic procedures must have independent counselling and advice from a body that will not make a profit from that procedure, and whose whole concern is the health of the patient?

[Mr Lansley]

I am grateful to the hon. Lady for that suggestion, and I will ask Sir Bruce’s group to consider it.

[Penny Mordaunt (Portsmouth North) (Con)]

I welcome the statement. What has the Secretary of State learned from this episode about the quality and take-up of routine insurance products offered by private companies to protect both patients and providers when cosmetic surgery goes wrong?

[Mr Lansley]

I am grateful to my hon. Friend for her welcome for the statement. Those seeking cosmetic interventions must ask serious questions about not only the nature of the procedure but the quality and reputation of the provider organisation, and ask it how it would protect their interests if things went wrong.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Secretary of State referred in his statement to the possibility that an organisation that had carried out operations had gone out of business. As there are long-term implications from such surgical interventions, has the Secretary of State considered instituting some form of levy or fund that would have to be paid into—nor do I want to let the private sector off the hook—so that if organisations go out business there would be a sum of money from which people could claim?

[Mr Lansley]

As I hope the hon. Lady will appreciate from what I said to the right hon. Member for Leigh (Andy Burnham), the Health and Social Care Bill introduces for the first time a comprehensive continuity of service regime for the NHS, and it also creates, through the health sector regulator, the potential for us to consider whether such continuity of service needs to be extended beyond the NHS.

[Ian Swales (Redcar) (LD)]

If the NHS stands behind private providers in such cases, it is effectively providing free indemnity insurance. Will the Secretary of State look at the insurance position of providers of such services and ensure that the taxpayer does not face open-ended liabilities?

[Mr Lansley]

As my hon. Friend points out, to that extent the NHS has always stood behind the private sector provision of health care. If things go wrong, people have the right to access NHS treatment as they must be looked after on the basis of clinical need. Referring back to points I made earlier, the Health and Social Care Bill gives us an opportunity to look more systematically at continuity of care for patients both in the NHS and the private sector and at the responsibilities of providers under their licence.

[Valerie Vaz (Walsall South) (Lab)]

I thank the Secretary of State for coming to the House and making this statement. How many clinics will the CQC be reviewing, and what will happens in respect of any clinics that are no longer practising? Presumably the CQC will not have access to their records.

[Mr Lansley]

I cannot tell the hon. Lady how many clinics the CQC will visit, but it will be a sample of providers, not all of them. As she may know from the material we published last Friday, there were 93 private providers. The operations were heavily concentrated in that a lot of them were carried out by a small proportion of providers, but about 87 other small providers, or even single-handed providers, are involved and accessing data from all of them will be difficult. I also recognise that, as the hon. Member for Edinburgh East (Sheila Gilmore) said, some may not be in business any longer, or there may be surgeons who have retired.

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

I also thank the Secretary of State for making the statement. Following on from a vein of questioning that has already been explored, will he elaborate on the point about the Government pursuing firms to recover costs and explain what mechanisms are available to the Secretary of State to recover costs?

[Mr Lansley]

I will do so to an extent. It depends on the nature of the legal contract between a woman and her private provider. I hope that in many cases the legal obligations derived under that contract or under sale of goods and services legislation will clearly mean that the woman will get redress from her private providers or her insurers. If the NHS becomes involved, there may be compensation through the injury costs recovery scheme, so if the NHS incurs costs, we can go on to seek to recover them.

[Yasmin Qureshi (Bolton South East) (Lab)]

I thank the Secretary of State for his statement. As has been said, most of the cosmetic surgery industry is not regulated. What time frame are he and his staff working towards?

[Mr Lansley]

Given the nature of the work I am asking Sir Bruce Keogh and his group to undertake, it will take them some time to look at the range of cosmetic interventions and make any recommendations. They are coming together as rapidly as they can. Many of them have given up a great deal of time over the past two weeks to help us in this work. We must recognise that there are things we need to do rapidly to ensure that there is support and reassurance for any woman affected by PIP implants, and we are acting rapidly. There are lessons and wider implications to be learned. This particular area of cosmetic surgery was not without regulation. The question is to what extent things were properly regulated with surveillance and enforcement over a number of years.

[Steve Brine (Winchester) (Con)]

I welcome the Secretary of State’s statement. As he knows, I co-chair the all-party group on breast cancer and we will want to monitor how women are treated by the NHS and private providers, and we will certainly feed that into the Department. For women who have fought breast cancer and been through the trauma of reconstructive surgery, this will bring it all back and be tremendously upsetting. Does the Secretary of State therefore agree that speed is of the essence in respect of replacement surgery where it is wanted, so that those women can again put this nightmare behind them?

[Mr Lansley]

I am grateful to my hon. Friend and I completely recognise the points he makes. As he will know, the overwhelming majority of the approximately 3,000 women who had PIP implants through the NHS will have had them as breast reconstruction surgery following mastectomy. From day one, we were clear that we wanted all those women to be able to get advice, investigation and remedy, and removal and replacement, should they wish. If the NHS was responsible for the original operation, we will be responsible for the replacement with new implants, if that is what is wanted.

The NHS is very clear about this issue in the advice that was presented. I welcome the fact that my professional colleagues in the associations are making it clear that, through the NHS, replacement procedures for these women should be possible rapidly, but it should not prejudice the availability of urgent referral for cancer, which will continue to be an operational requirement in the NHS.

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

The question arises of access to records in both the private and NHS sectors. Is it not time to look again at who is the keeper of medical records? Should it not be the patient—therefore bringing together the NHS and private provision, where applicable—rather than the institutions?

[Mr Lansley]

Of course, as the hon. Lady knows, we have been thinking hard about precisely this issue. The NHS Future Forum made further recommendations to us only yesterday about achieving access for patients to their own records by 2015 across the NHS. The NHS should keep records, but the patients themselves should have access to them. We will pursue that issue in the NHS, although frankly, I am not in a position to mandate that in the private sector. However, any patient would be well advised to say, “Why can’t I hold my own record from a private provider?”

[Bob Blackman (Harrow East) (Con)]

I welcome the Secretary of State’s statement, but PIP is not the sole supplier of breast implants across the industry. What assurances has he received from the industry that no other company has embarked on the practice of using non-medical grade silicon in its breast implants, so that women who have had such implants can feel safe?

[Mr Lansley]

I have no evidence of such behaviour on the part of other companies. My hon. Friend is right: PIP is only one of a number of suppliers, and in this country probably only one in seven breast implants were PIP implants. Other countries have looked at this, and across Europe the regulatory process should ensure the scrutiny of these implants, including proper testing. The European review must look at whether that surveillance, including unannounced inspections and appropriate testing, gives us the assurance we are looking for.

[Heidi Alexander (Lewisham East) (Lab)]

Yesterday, I was contacted by a constituent who had PIP implants inserted by the Harley Medical Group in 2006. She said:

“There is so much conflicting information at the moment, I feel as though I’m being pushed from pillar to post. To add absolute insult to injury nobody is keen on helping us, they are saying the NHS should help…or they say they will perform the procedures on us for an extra fee.”

Can the Secretary of State tell me precisely what further representations he will be making to private providers to ensure that all women get access to the advice and treatment they need?

[Mr Lansley]

We have been very clear about the advice we have given to women, and I hope that, through the NHS, any woman in those circumstances would go and see their general practitioner, who will have full access, from the chief medical officer, to the expert advice we have disseminated. I know that the Harley Medical Group has not shared with others the view that it can match the NHS’s standard of care; but given that, the professions are suggesting to surgeons that they should honour requests for replacement surgery free of surgical charge. I hope that gives a basis on which more of the private providers will now meet their full obligation of a duty of care.

[Mr Philip Hollobone (Kettering) (Con)]

What is the Department of Health’s central estimate of the number of women who have had breast implants through private clinics who will seek their removal through the NHS?

[Mr Lansley]

I am sorry to disappoint my hon. Friend but I cannot offer him such an estimate. We know that some 37,000 women had PIP breast implants. Clearly, not all those will necessarily want removal, and on advice, it might be any proportion of those; I cannot tell him what that figure would be. As we see in France, recommending the removal of implants does not mean that all women will have them removed.

[Mark Durkan (Foyle) (SDLP)]

I acknowledge the Secretary of State’s commitment to engaging proactively with the devolved Administrations on this issue. However, in his statement he used somewhat clumsy language regarding the third main finding of the expert group, saying that “there is no clear evidence that these problems are more serious in relation to PIP implants than other implants, or that they result in increased long-term health risks.” Is he not concerned that, put so clumsily, that will not only fail to reassure those with PIP implants but extend concern and alarm to those who have received other implants?

[Mr Lansley]

I am afraid that absence of evidence does not mean evidence of absence. We can be very clear, on expert advice, that there are no specific safety concerns that routinely require the removal of these implants, nor identification of any increased long-term health risks, in precisely the way I have described. I cannot go further and provide, on advice, absolute assurance, and the expert group was clear about that. That is why the French Health Minister, whom I was talking to last week, and I were clear that we should undertake additional toxicology tests on implants when they are explanted, in cases where they were implanted over a period of time, to begin to understand the extent to which they had adulterated filler material and what was in it.

[Andrew George (St Ives) (LD)]

I commend my right hon. Friend’s initiative. However, he said the following, which may have been sloppy wording: “those who have had reconstructive surgery following a mastectomy, will have received PIP implants through the NHS.” Of course, the majority will not have done so, and I have confirmed with surgeons in Cornwall that PIP implants have never been used in the NHS in Cornwall. Given that the Medicines and Healthcare products Regulatory Agency issued advice to stop using PIP implants in the UK in March 2010, can the Secretary of State confirm that this advice was acted on, no doubt within the NHS but across private clinics as well?

[Mr Lansley]

I hope I did not say what the hon. Gentleman ascribes to me. Some 3,000 women, we think, had PIP implants, and of course, that is only a fraction of the number having breast reconstruction surgery. I think I can offer him reassurance. The MHRA withdrew authorisation in March 2010, and given that there was only one distributor of these implants in this country—Cloverleaf—they will not have been distributed for use after that date.

[Toby Perkins (Chesterfield) (Lab)]

A constituent in Chesterfield contacted me who is at her wits’ end. She has been in considerable pain since having a PIP implant fitted, and has been told by the private provider that she will have to pay £3,600 to have it replaced. What more can the Secretary of State do to ensure that her private provider follows the example of the other eight providers that are doing this free of charge? Let us put some pressure on these companies to make sure that all of them do the same as the NHS and replace the products they have fitted.

[Mr Lansley]

I think I have made it clear that not only the Government but, helpfully, the professional associations are looking to give no reason why private providers should not match that standard of care, especially if the implanting surgeons are willing to offer replacement surgery free of surgical charge themselves. It would be very helpful if the hon. Gentleman and other Members gave us details of such cases on behalf of their constituents. Clearly, his constituent will have had that implant before March 2010. The adverse incident centre has had 478 reports of ruptures over the whole period, which extends back many years. One of the things we want to understand as part of our review is why, if there were ruptures and, more to the point, adverse health effects associated with these implants, they were not disclosed to the adverse incident centre. As yet, we have not seen a range of health effects over a period of time that, in themselves, distinguish these implants from other, normal implants.

[Mr Marcus Jones (Nuneaton) (Con)]

I contacted the Harley Medical Group on behalf of a concerned constituent this morning and was told that it would be making a decision on its response to this issue by Friday, although that is somewhat contradicted by the comments made by the shadow Secretary of State. Regardless of that, does my right hon. Friend not agree that the Harley Medical Group, or any other company, should step up to the plate, take full responsibility and work to make sure that it gives the people involved complete satisfaction, without any cost to the individual concerned?

[Mr Lansley]

My hon. Friend will understand that I cannot speak about the precise details of the situation with the Harley Medical Group. All I can say is that the group has told the media that it does not feel it can offer that standard of care completely, but that will have been before the professional associations wrote to their members asking them to support replacement surgery free of surgical charge. I know that the group has told members of the media that it is willing to offer to the Government that if we are responsible for the removal of implants, it will pay for implants to be available for replacement purposes. Frankly, if surgeons are willing to waive the surgical charge and the group is willing to pay for the implants, it is not too much to ask for it to be responsible for removal and replacement, where it is in the woman’s best interests to do that.

[Paul Flynn (Newport West) (Lab)]

Does the Secretary of State not regret failing to react to the call made last May for British patients to have the same protection against failures of all medical devices as that enjoyed in the United States? Is not the real scandal here, again, the chronic under-reporting by the industry and the MHRA of failures of devices and drugs? Is not the answer for this probe to look into the possibility of having a genuinely independent regulatory authority, instead of one that is entirely funded by the industry, because self-regulation is often no regulation?

[Mr Lansley]

The hon. Gentleman says that this body is entirely funded by the industry. It is true that in relation to pharmaceuticals the MHRA is funded by levies on the pharmaceutical industry, but much of the cost of the regulation of medical devices is actually met by the taxpayer. I regard the MHRA as operating in an independent fashion and its expert and scientific advice as independent from Ministers. None the less, as he says, the review that Earl Howe will lead will examine the lessons to be learned, including those about the effectiveness of regulatory surveillance and enforcement in this country, albeit that the regulatory failure occurred, in essence, in Germany, in the first instance, and in France.

[Richard Burden (Birmingham, Northfield) (Lab)]

The uncertainty that many women face relates to not only the level of risk associated with PIP implants, but whether the implants they had fitted were PIP implants. I accept what other hon. Members have said about problems with record keeping in the private sector, and that needs to be taken up. The Secretary of State said that the estimated 3,000 NHS patients will be written to. If they are to receive such a letter, will he reassure them about when that will be?

[Mr Lansley]

The chief executive of the NHS wrote to the NHS bodies last week. As the hon. Gentleman will realise, the numbers concerned in each organisation will not be very large, so I am looking for what he describes to happen rapidly.

[Mr Denis MacShane (Rotherham) (Lab)]

Will the Secretary of State send officials to investigate the Birkdale clinic in Rotherham and its executive, Mr Promod Bhatnagar? Scores of women have had PIP implants at the clinic and are now being told that they have to pay £2,900, in cash, to be screened and looked at again. Mr Bhatnagar has threatened groups in south Yorkshire with “unimaginable consequences” if they raise this issue. After his very unclear statement, will the Secretary of State finish by saying that as in every other European country, and standing with the women of Britain, taxpayers do not mind paying for a few hundred women to be properly investigated? My constituents have contacted me saying that the women of south Yorkshire should be able to go to their general practitioner, go straight into hospital and be seen to, and we should clear up all the fuss about bills afterwards.

[Mr Lansley]

I think I have been absolutely clear about what I expect to happen, in relation both to women treated through the NHS and what I expect of private providers. I have also made it clear that if private providers will not or are unable to meet that standard of care, the NHS is available to support women. It is absolutely wrong to say that we are somehow responding to women differently from other European countries, because across Europe countries affected by this are taking exactly the same view that we take.

[Jim Shannon (Strangford) (DUP)]

I thank the Secretary of State for his statement and I again highlight the concerns that a great many ladies have. Just today, I have been made aware that constituents of mine, as well as those from other regions of the United Kingdom, have had PIP breast implants carried out privately in the Republic of Ireland. When they contacted the firm, they found that it had gone bust, so what help can he give ladies, both financially and physically, who were NHS patients in the United Kingdom but had operations carried out outside the United Kingdom, specifically in the Republic of Ireland?

[Mr Lansley]

I refer the hon. Gentleman to what I said in my statement: if women are entitled to NHS treatment in those sorts of circumstances, they should come to the NHS and we will provide the standard of care that I outlined.

[Ian Mearns (Gateshead) (Lab)]

The Secretary of State has demonstrated his obvious concern for the women affected by this situation. Does he accept that they are gravely concerned about the difference of opinion that is emerging between Governments in the countries where these implants have been used, in particular, the difference between our Government’s advice and that of the country where the implants were manufactured, France? Will he also reflect on whether companies in the private sector that are giving either cosmetic or other treatments of this nature to women are properly insured, so that even if they go out of business the insurer will cover women for future treatments should something go wrong?

[Mr Lansley]

On the hon. Gentleman’s final point, I refer him to what I said earlier about how we might deal with that in the future. On the point about other countries, I have spoken to Commissioner Dalli and I have spoken to my French counterpart twice. What I want to be clear about is that the French authorities did recommend routine removal of implants, but from any individual woman’s point of view we are, in effect, recommending that the same thing should happen: any individual woman should see the clinician responsible, should be examined—by imaging, if necessary—and should consider, in the light of that and in a clinical decision with her adviser, what is right for her. That will be true in France and in Britain. I wish to emphasise that we have not seen, on advice, scientific evidence that justifies the recommendation of the routine removal of these implants. We are not saying to women that we think they should have them removed; we are saying that women should have access to imaging. Clearly, women with symptoms, or women for whom evidence of rupture or leakage has been provided through imaging, may well choose to have the implants removed, and we would support that.

Trade Union Officials (Refund of Pay to Employers)

Wednesday 11th January 2012 Commons Chamber

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

13:38

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

I beg to move,

That leave be given to bring in a Bill to provide that pay for hours worked on behalf of trade unions by trade union officials during hours when they are paid by an employer should be refunded to the employer by the trade union; and for connected purposes.

The Bill addresses an issue that has recently attracted great public attention: the funding by the taxpayer of public sector employees who in fact work not as nurses, teachers, social workers, local government officers or civil servants but as trade union representatives. It was raised in an Adjournment debate last year by my hon. Friend the Member for Cannock Chase (Mr Burley) and I pay tribute to him for that, to my hon. Friend the Member for Witham (Priti Patel) for her work in the area and to other colleagues for their support today. The number of my colleagues in the Chamber attests to the importance of this issue.

This is not an area where definitive information is available, because adequate records have not been kept. The facts so far, taken from freedom of information requests to some 1,300 public sector organisations, are as follows. In 2010-11, trade unions received £113 million from public sector organisations. If extended over the lifetime of a Parliament, that would amount to the extraordinary sum of more than half a billion pounds in payments. An estimated 2,840 full-time equivalent public sector employees worked for the trade unions in 2010-11, paid for by taxpayers. That is equivalent to 2,840 public servants whose work has to be done by others: teachers who are not teaching, nurses who are not nursing and social workers who are not assisting their clients. The Department for Work and Pensions alone has 308 full-time equivalent staff working on trade union activities paid for by taxpayers, while Her Majesty’s Revenue and Customs has 181, to give just two examples. These facts are quite unknown to most people in this country and they deserve much wider publicity. It will be a source of huge anger to my constituents in Herefordshire, who must fill in their tax forms this month in very difficult economic times, to learn that they are subsidising nearly 200 tax officials who do no tax work at all—all the more so as under the previous Government the Revenue drastically cut back its office in Hereford.

It is important to be clear about one thing, however. The Bill is not about attacking the unions. The trade union movement in this country has an often distinguished history of supporting and protecting working men and women and their families. Many unions do very good work for their members today. I recognise these things and I welcome them. In a similar spirit, the House will know that I am a great supporter of co-ops, mutuals, credit unions and other organisations whose purpose is to empower and support people who are often on very modest incomes. The issue here is one of basic principle: is it appropriate for the taxpayer to subsidise any such large-scale activity by private organisations? If it is, should it be allowed without proper processes of competitive tender and public accountability? My own answer to these questions would be, in general, a resounding no.

Taxpayers’ money should be spent, as far as possible, on the front line of public services. In general, private organisations should not be subsidised by the state. Moreover, the fundamental principle of no payment without accountability is already observed throughout the public sector in other areas. Public procurement is supposed to be competitive and transparent, and so is commissioning of services in the NHS and across local government. In exactly the same way, there should be proper transparency and accountability in public funding for trade unions.

I myself have just waged a long campaign to recover some £1.5 billion for the taxpayer on the private finance initiative—only a small portion, so far, of the money overspent by the previous government on PFI. In effect, PFI included a massive subsidy to the financial and construction sectors. The principle is exactly the same here: taxpayers’ money should not be used to subsidise private organisations without proper transparency and accountability. Why should the unions be any different?

There is an important further argument. Subsidising the unions with taxpayers’ money is not ultimately in the interests even of their own members. Indeed, it will tend to undermine the services those unions provide. All subsidies distort incentives. This subsidy encourages union leaders to lobby politicians for hand-outs, rather than focus on doing the jobs their members pay them to do.

Finally, taxpayer funding creates huge conflicts of interest. Inevitably, some union reps will be tempted to engage in political activity during time funded by the taxpayer. That was the problem with Ms Jane Pilgrim, the former nurse turned union rep at St George’s hospital, Tooting, who denounced the Secretary of State for Health on the basis of a meeting she had never attended. That was politicking pure and simple, but the conflict between political activity and taxpayer funding would be removed if unions were required to refund public money received, as this Bill would demand.

Various defences have been made of such payments. It has been suggested that they actually save money, that union reps are needed for pay negotiations and that union reps must be employees, but those arguments entirely miss the point. The issue is not whether the unions provide valuable services, whether they should be paid for doing so or whether public servants may not also be union reps; the issue is why they should be paid in that role by the taxpayer.

There is a wider point as well, which is that of transparency itself. Last week, my office called seven of the biggest unions, asking for their latest financial reports and accounts as background research. The response was extraordinary. Some unions, such as the National Union of Rail, Maritime and Transport Workers and the Union of Shop, Distributive and Allied Workers, do not put this information online at all—USDAW kindly invited me to write to its treasurer with a request. Others, such as the NASUWT, make it available only to members. Unison had its 2009 statements online, and the National Union of Teachers had a summary. Only the Public and Commercial Services Union had a full recent report and accounts online.

Matters only become murkier on further investigation. The unions are regulated by the relatively little-known certification officer, who requires them to file an annual return. In the case of Unite, that reveals that the union had income in 2010 of £141 million and made a pay-off of more than half a million pounds to its outgoing joint general secretary, Derek Simpson—

[Mr Denis MacShane (Rotherham) (Lab)]

Is this in order?

[Mr Speaker]

Order. Stop the clock. The right hon. Member for Rotherham (Mr MacShane) should behave not like a trainee rabble-rouser but rather like the elder statesman that at his best he can be.

[Jesse Norman]

Astonishingly, there is no management report in Unite’s annual return, no historical comparison of income and expenditure, no discussion of the year’s activities, no analysis of the current environment or future prospects, no biographies of senior officials and not even any photographs. The impression given by that annual return is one of contempt for the union’s membership. Members should ask themselves what would be required if Unite were a charity like, to choose an example at random, the Sheffield Hospitals Charity. Its annual report and accounts is a model of detailed and clear presentation, full of information about the organisation, its people and its work. There is a very clear sense of public commitment and purpose. Its page on the Charity Commission’s website is packed with accessible information and graphics, but there is nothing especially unusual about that report and accounts or that disclosure. It is simply that the standards for public disclosure and the standards of treatment for donors are much higher for charities than for unions.

The Sheffield Hospitals Charity had income last year of just £2 million; Unite is 70 times larger. It is Britain’s biggest union, with more than 1.5 million members, and wields enormous political power. If this is how it treats its membership and the taxpayer, the case for greater union accountability and for more transparent regulation could hardly be clearer. I commend the Bill to the House.

13:48

[John Healey (Wentworth and Dearne) (Lab)]

This Bill attacks the most basic and most benign feature of trade union work—the day-to-day support for staff at work by their colleagues who are prepared to volunteer as trade union representatives.

Last time, the attack was led by the hon. Member for Cannock Chase (Mr Burley) in this Chamber. I had thought he might be detained elsewhere. I have to say to the hon. Member for Hereford and South Herefordshire (Jesse Norman) that I am surprised to hear him attempt to bring in this Bill. He is gaining a growing reputation for hard work and intelligent comment, but his speech was a cheap-shot speech based on ignorance, ideology and inaccurate briefings from the TaxPayers Alliance. He talks about trade union accounts and public service, but the Bill is a broadside against trade union organising in both the public and the private sectors. It is a personal attack on around 200,000 people who are ready to help their colleagues by giving advice, by supporting them at grievances and discplinaries and by negotiating with managers. That is difficult and demanding work, but many of those representatives are also ready to take on extra, special responsibilities for improving health and safety, equality, training and environmental standards.

The Bill is a personal attack on people such as Kevin Maggs, a GMB learning representative at A & P ship repairers in Cornwall. He organised open learning days for his colleagues at work and encouraged them on to courses. He says that some of them have been able to gain qualifications for a job they have done for years, whereas others have been able to understand their pay slip for the first time because of their improved literacy and numeracy. The hon. Member for Hereford and South Herefordshire might not be able to understand that, but Ministers do. Let me quote the Minister for Further Education, Skills and Lifelong Learning, who said last year:

“I want to pay tribute to union learning reps, who have made so much difference to so many lives, and to such effect. Trade unions can play an invaluable and immeasurable role in improving skills in the workplace.”

That is why the Government are rightly investing £33 million to support union learning. It is part of the £110 million condemned by the TaxPayers Alliance.

Many trade union reps rightly receive paid time off from their other work to carry out those duties. Many also devote much of their own time to that work. A recent Government survey showed that reps in the public sector contribute up to 100,000 unpaid hours each week to carry out their duties. Our union reps are the unsung heroes of the long, proud British tradition of volunteering. They are the workplace wing of the Prime Minister’s big society. There should be receptions in Downing street to pay tribute to their work. They support their colleagues and they save employers and the Exchequer millions of pounds each year by reducing the number of employment tribunals and days lost through illness and injury. By improving productivity and training, they help organisations to get through periods of great pressure and great change. I looked at the new year’s honours list this year and saw there were hundreds of civil servants, charity workers and business people on it—especially civil servants—but I found only one person, Mr Charles James from Leeds, who was honoured for the service he has given to his union and to his community. We should see many more ordinary workplace reps being honoured in future like Mr James.

I think that the House will have recognised that the hon. Gentleman did not quote one single employer. Employers are not calling for this attack; it does not even feature on the CBI’s 11-point checklist of curbs it wants to see on trade unions. Many of our biggest and best British companies work with trade unions and recognise them—Rolls-Royce, Tesco, Virgin Media, Odeon cinemas, the HSBC bank and Jaguar Land Rover. Those names are known worldwide and those companies know the benefit of working with trade unions and know the benefit of trade union representation.

If we accept that employers as well as employees benefit from union representation, it is entirely right to expect employers to make a contribution towards the cost. That is why the hon. Gentleman’s Bill is wrong. Let me say one final thing to him and his colleagues. Many trade unionists voted Conservative at the last general election—too many—and some even voted Lib Dem. They do not deserve this and the Bill does not deserve support from any part of this House.

Question put (Standing Order No. 23).

13:55

Division 419

Ayes: 132

---

Conservative: 121
Democratic Unionist Party: 7
Liberal Democrat: 3

Noes: 211

---

Labour: 186
Liberal Democrat: 13
Scottish National Party: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Conservative: 1
Alliance: 1
Green Party: 1
Independent: 1

Opposition Day

Wednesday 11th January 2012 Commons Chamber

[Un-allotted Day]

Rail Fares

Wednesday 11th January 2012 Commons Chamber

14:07

[Maria Eagle (Garston and Halewood) (Lab)]

I beg to move,

That this House believes that the scale of increases to rail and bus fares and the high cost of fuel are significantly increasing the transport sector’s contribution to the cost of living crisis facing households up and down the UK; notes that, despite the Chancellor’s announcement in his Autumn Statement that rail fares would rise this month by 1 per cent. above inflation, many commuters have found their tickets have gone up by as much as 11 per cent.; recognises that this is a direct result of the decision to give back to train companies the right to add a further increase of up to 5 per cent., resulting in the cost of getting to work rising to more than the cost of monthly mortgage or rent payments for many families; notes with concern the National Audit Office’s warning to the Department for Transport that higher rail fares are likely to lead to higher profits for train operating companies; deplores the Government’s decision to levy even higher increases of 3 per cent. above inflation for 2013 and 2014; and calls on the Government to end the right of train companies to increase regulated tickets by more than the cap set by Ministers, so as to prevent fare increases of up to 13 per cent. that could otherwise hit passengers in each of the next two years.

This has not been a happy new year for many commuters. Having been promised by the Chancellor in his autumn statement that he was keeping increases in rail fares at just 1% above inflation, many had a nasty shock as they returned to work last week—not fare rises of 1% above inflation, but increases of up to almost 11%. Season tickets between Chester and Crewe are up by 10.6% on a year ago, and tickets between Llandudno and Bangor hiked by the same double-digit increase, 10.6%. Return tickets are also up—Exeter to London, for example, up by 9.6%, Cardiff to London by 9.7% and Plymouth to London by 9.7%.

But what did the Chancellor tell the House in November? He said:

“RPI plus 3% is too much. The Government will fund a reduction in the increase to RPI plus 1%. This will apply across national rail regulated fares, across the London tube and on London buses. It will help the millions of people who use our trains.”—[Official Report, 29 November 2011; Vol. 536, c. 810.]

He was right—it would have done, except that the Chancellor forgot to say that his Government had quietly given back to train companies the right to add up to another 5% on fares, provided the increases averaged out at the cap that he had set, giving the train companies back the right to fiddle the fares.

[Mr John Redwood (Wokingham) (Con)]

Given that we all would like lower rail fares, does the hon. Lady think that there should be a bigger Treasury subsidy out of taxpayers’ pockets in order to achieve that?

[Maria Eagle]

Our position is that we would have continued in this Parliament, as we did in 2009, to put a stop to the power train operating companies have to fiddle the fares—

[Stephen Hammond (Wimbledon) (Con)]

Will the hon. Lady give way?

[Maria Eagle]

If the hon. Gentleman will allow me to finish answering the last intervention, I might get around to giving way to him. As the previous Labour Transport Secretary made clear, we would not have given back to train operating companies the power to fiddle the fares by hiking them by more than the cap on the most profitable routes and getting away with it by introducing much lower increases on the routes that do not rake in the cash. That is something we put a stop to in government once times got tough.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

Will the hon. Lady give way?

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

Will my hon. Friend give way?

[Maria Eagle]

I will give way to the Minister, who I expect will be winding up the debate, and then to my hon. Friend.

[Mrs Villiers]

The hon. Lady claims that Lord Adonis, a previous Transport Minister, would have continued the suspension of the fares basket, but the reality is that he did not renegotiate that with the train operators; he negotiated for a one-year contractual suspension. If he had intended to carry on with that, he would have negotiated the period into the franchises, but he chose not to.

[Maria Eagle]

The right hon. Lady is wrong to say that there was no intention to continue with that. She can try to rewrite our policy as much as she wishes, but my noble Friend Lord Adonis made it perfectly clear in oral and written evidence to the Transport Committee that the ban on flex would continue into subsequent years, and that remains our policy.

[Andrew Gwynne]

My hon. Friend is right to point out that it was the previous Labour Government who got rid of train operating companies’ ability to fiddle the fares. Was she as astounded as I was at the lack of knowledge displayed earlier by the Prime Minister, who did not even know that it was his Government who had reinstated the right for those companies to clobber hard-working commuters?

[Maria Eagle]

I must say that I was quite surprised that the Prime Minister did not seem to have that information. It was only after my right hon. Friend the Leader of the Opposition had asked him three times that the Prime Minister managed to claw his way towards an accurate answer, but that is what we have come to expect from him.

[Dr Julian Huppert (Cambridge) (LD)]

While we are discussing the rewriting of policies, what message would the hon. Lady give to a previous Transport Secretary who in 2007 allowed Stagecoach South West to raise fares by 20%, or indeed to the Transport Secretaries who allowed that to happen in the 10 years before that? Does she agree that that was a huge mistake and that fares went too high?

[Maria Eagle]

If the hon. Gentleman will wait, I will move on to say a little more about our current policy thinking later in my speech.

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

Will the hon. Lady give way?

[Maria Eagle]

I will give way, but then I must make some progress, because the debate already has to be shorter than we had hoped.

[Mr Evennett]

I am extremely grateful to the hon. Lady and am listening to her with great interest, but she is attempting to rewrite history. Does she feel any guilt about the huge fare increases that took place under the Labour Government, because commuters in my constituency had a really rough time?

[Maria Eagle]

The reality is that when the previous Government saw what train operating companies were doing with the power that flex gave them to game the system and clobber some commuters far more than others, we banned it. This Government have reintroduced it. Times are still tough and the Government should not have caved in to pressure from train companies, but they seem to be unwilling, or perhaps incapable, of standing up to vested interests on behalf of commuters, who are now paying the price. I have made it clear that we would have strictly enforced the 1% above inflation cap and not allowed the increases of up to 11% that commuters have faced at ticket offices since the new year.

[The Secretary of State for Transport (Justine Greening)]

Perhaps the hon. Lady would like to finish the other part of her phrase, which is that she would not have allowed rises of above RPI plus 1%, just as she would not have allowed below RPI plus 1% flexibility. Will she confirm that that is the position and that many commuters would face fare increases under her proposals?

[Maria Eagle]

What we are not seeing from train operating companies or the Government are proposals to reduce fares. The technical position is of course that if an average cap is applied to each fare, the fare rise will apply to each fare. The Secretary of State is right about that, technically speaking.

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

On the commitment to reduce fares, is my hon. Friend aware that the Labour candidate to be Mayor of London intends to bring forward a package to reduce fares, given that Boris Johnson’s increase in the cost of a zones 1 to 4 travelcard equals a 21% rise, despite the fact that Transport for London has a £729 million operating surplus? The Labour party has a commitment to cut fares.

[Maria Eagle]

I am aware of that and thank my hon. Friend for making that point. At least Labour’s candidate understands how hard it is for ordinary, hard-pressed commuters to afford the kind of fare rises that the Government are not only allowing, but promoting. It is no good Ministers hiding behind the deficit, because this is not a simple case of bringing additional money into the Treasury; it is also about bringing additional money into the profits of private train companies. The National Audit Office report on the Department for Transport’s spending settlement warned:

“There is a risk that the benefit of the resulting increase in passenger revenues will not be passed on to taxpayers fully, but will also result in increased train operating company profits.”

High fares equal increased profits in an industry that relies on subsidies of more than £4 billion of taxpayers’ money every year. It is no wonder passengers in Britain are paying three and a half times more for their rail tickets than those in France, Germany and Holland, all countries that do not have the costly and fragmented rail industry structure that is the legacy of the Tories’ botched privatisation of our railway industry. The French, German and Dutch state railways are so successful that they are now bidding for and winning franchises to run rail services in Britain. The Government are step by step nationalising our rail services—it is just that it is not our nation. The profits will be helping to keep down fares in France, Germany and Holland for their own domestic passengers. It is no wonder that fares are so high under our broken system.

Therefore, we would enforce a strict cap on fare rises, but I believe that we need to go further and make fares fairer. Because the system has lost all credibility, passengers feel ripped off and know that they are being ripped off. They feel that the system does not work in their interests and that it is designed to catch them out. That is what I have been told by passengers as I have travelled across the country over the past year. In addition to getting spiralling rail fares under control, here are five other ideas that passengers have said would make a real difference. First, why is there no single national definition of peak time? Why are train companies allowed to set different rules so that passengers have to know precisely which company they are travelling with or risk facing a fine for travelling on the right ticket at the wrong time? Why are the companies allowed to chop and change peak time, stretching it out simply to hike their profits?

[Mrs Villiers]

rose—

[Dr Huppert]

rose—

[Maria Eagle]

I have already given way to the right hon. Lady and to the hon. Gentleman, so I will make some progress in my speech. At the very least, rail passengers would like tickets to state clearly the precise time restrictions that apply instead of simply being referred to some obscure part of a website that they do not have access to when purchasing a ticket.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

Will the hon. Lady give way?

[Maria Eagle]

I want to make a few points about what I have heard from passengers and will try to give way to the hon. Gentleman later.

Secondly, passengers want a legal right to be offered the cheapest ticket for the journey they wish to make, and they do not think that it is too much to ask that the cheapest fare must be clearly advertised. Should passengers not be entitled to a refund if they have not been sold the cheapest ticket?

Under this Government, it is to become harder to buy the cheapest ticket if plans to replace staff with machines and close all 675 category E station ticket offices are implemented, yet that is what Ministers are considering, along with cutting the opening hours of 302 category D station ticket offices. All the evidence suggests that many people are not sold the cheapest ticket when they buy a ticket online or from a machine.

Thirdly, passengers have told us that they want the cheapest fares to be available wherever tickets are sold, yet the cheapest fares often appear to be available only online. Should not the same fare structure apply to tickets purchased at train stations and other outlets as applies to those bought online, ending the digital divide that is arising and increasing costs for older passengers, in particular?

Fourthly, what really annoys rail users is when they make a genuine mistake or are forced to change their travel plans but find themselves treated as a common criminal in front of other passengers and required to get out their cheque book and cough up. Of course we have to protect revenue, but we also have to have some common sense. Within the same period of the day, there has to be greater flexibility to vary plans, even on pre-booked tickets. Trains are not airlines, and we do not wish to go down the road of airline-style ticketing, with no cheap walk-on option.

Finally, passengers told us—

[Alok Sharma (Reading West) (Con)]

Will the hon. Lady give way?

[Maria Eagle]

If the hon. Gentleman will just let me get to the end of my points, I may give way to him.

Finally, passengers told us that they understand that sometimes a track has to close, such as for essential work, to keep our railways safe, but when a rail replacement service makes their journey longer, often adding considerable inconvenience, they want to know why their ticket costs the same. They can apply for a discount if their train is delayed, but not if it turns out not even to be a train and ends up being a bus.

Those are all ideas that we are looking at seriously, because for too long Governments have let the train companies get away with treating passengers in a way that would not be permitted in other industries.

[Paul Maynard]

Is the hon. Lady seriously arguing that peak hours on the west coast main line should be the same as those on Merseytravel lines?

[Maria Eagle]

I am arguing that it is important to have a national understanding of peak hours, so that passengers are not clobbered and do not have to wait until what seems like a long time after normal peak hours in order to get on a train home. That would be an improvement, and it would clarify the system. People would not be caught out as they frequently are, and they would not be inconvenienced by having to wait for hours after their meeting has finished in order to get on a train home.

If this Government are not going to stand up to the train companies and take on vested interests, we will. Those are all ideas that we are looking at seriously.

[Charlie Elphicke (Dover) (Con)]

Will the hon. Lady give way?

[Maria Eagle]

No, I am going to make some progress.

[Alok Sharma]

On that point?

[Maria Eagle]

I said that I am going to make some progress.

For too long, Governments have let the train companies get away with treating passengers in a way that would not be permitted in other industries. The previous Transport Secretary described rail fares as eye-watering and rail services in Britain as a “rich man’s toy”, yet he failed to understand that the policies of his own Government are making the situation worse.

[Alok Sharma]

Will the hon. Lady give way?

[Maria Eagle]

No.

Next year’s fare increases are set to be even higher—not 1% but 3% above inflation, with the same again in 2014. Unless the Government are willing to stand up to the train companies, and unless they are willing to take on the vested interests and remove the right to add another increase of up to another 5% on top of this year’s so-called cap, commuters next year will face fare rises of up to 13%, with another 13% the year after. That is happening at a time when average incomes are plummeting. Over three years, some tickets will rise by almost one third as people’s real incomes fall by 7.5%, yet the Government seem completely out of touch with the impact of that on households.

Season tickets are heading rapidly towards £10,000 a year on some routes into London once underground travel is included; families are now paying more on commuting costs than on the mortgage or rent; and ticket price rises are outstripping wage increases several times over, if people are fortunate to see a wage increase at all. That is the cost-of-living-crisis facing households throughout the country. Rent levels are going up; energy and water bills are rising relentlessly; bank charges are extortionate, as the cost of living means overdraft limits are breached; and the cost of transport is rising.

[Justine Greening]

I am listening very carefully to the hon. Lady, who is raising what we all recognise as important issues, but I want to double check something, because earlier in her speech she talked about getting more money into Government coffers through the RPI plus 5% flexible policy. Does she recognise that the policy she is announcing today is a spending commitment? If so, how does she set it against what her shadow Chancellor said yesterday, when he stated:

“I can say to you unequivocally we can make no commitments to reverse any of the Government’s tax rises or spending cuts”?

[Maria Eagle]

I do not know the spending commitment to which the Secretary of State says I have referred, because there is no spending commitment, and it is complete nonsense for her to say that there is —[Interruption.] I understand her point, but if she wishes to try again I will give way.

[Justine Greening]

Clearly, the money for that policy has to come from somewhere, and it is from the taxpayer. The hon. Lady obviously accepts that point, so the policy is a spending commitment. Will she simply confirm the reality of that?

[Maria Eagle]

What I have said is that we would stop the operation of the flex system, as the Secretary of State’s Labour predecessor did. We said before the election that we would do so, but the Government have reversed that policy, and commuters are being clobbered as a result. That is quite clear.

[Charlie Elphicke]

Will the hon. Lady give way?

[Maria Eagle]

No. This is a shortened debate, and I want to give people time to make their speeches, so I hope that the hon. Gentleman will forgive me if I make some progress. I have already spoken for a little longer than I would have hoped, and that is partly because I have taken interventions.

The Government need to be tougher not just on train companies, but on private bus operators. While train fares grab the headlines, most people’s experience of transport is in fact the local bus. For many, the bus is a lifeline: for those without a car; for older people who no longer drive or may never have done so; and for our young people, for whom the bus is their only way to get around, especially if mum or dad do not have a car or work all hours. Yet quietly, and without much fanfare, throughout the country there is a catastrophe facing bus services, with services being cut and fares rising. Again, that is thanks to decisions made by the Government. Their unwillingness to take on the vested interests in our transport industry is holding back the reform that is required.

In the spending review, the Government have made three decisions that have hit bus services. First, they have cut councils’ local transport funding by 28%—and front-loaded it. that has meant the end of support for many subsidised routes, and the end of ring-fencing has placed further pressure on councils—[Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. It really is not necessary for the Secretary of State to keep shouting across the Dispatch Box. She is about to address the House, and I am sure that she expects everybody to listen to her as well.

While I am on my feet, I must say that increasingly in the Chamber there is the behaviour whereby Members shout and heckle constantly when somebody else is speaking, and it is not really acceptable, so I hope that Members will stop it.

[Maria Eagle]

The end of ring-fencing has placed further pressure on councils to divert funds from bus services in order to protect other front-line services such as Sure Start or social care budgets.

The Government’s second decision has been to cut the funding available to bus companies in order to reclaim some of their fuel costs, particularly in rural areas where otherwise they would simply not run the service. Thirdly, the Government have changed the formula by which local authorities are reimbursed for the cost of delivering the concessionary fares scheme for older people, leaving councils with a funding shortfall that has led to new restrictions on when passes can be used, and to cuts in services.

On the impact, the Campaign for Better Transport calculates that one fifth of supported bus services throughout England now face the axe; more than 1,000 bus services have already been lost; and many surviving routes have seen fares hiked significantly.

The Public Transport Executive Group, which represents all the passenger transport executives, serving 11 million people throughout the metropolitan areas of England, calculates that as a result of the Government’s policies bus usage and patronage will decline by 20%, fares will increase by 24% above the rate of inflation and the added congestion alone will cost £68 million.

Ministers fail to understand that, when they cut a bus route, they cut an opportunity for young people to stay on in education, for people to travel further afield to take up employment, and for older people to remain connected to family and friends, with all the quality of life and, even, mental health benefits that that can bring. That impacts not only on those who rely on their local bus services, but on our ability to reduce the deficit. When those who want to travel further to take up work find that they cannot afford to do so or that the bus service is no longer there, those opportunities simply cannot be taken up. Young people who get the grades that they need to give them a chance in life and to find a good job will find that they simply cannot get to where they want to go for work or to continue their education.

The Government have said that those who are out of work should be willing to travel for up to 90 minutes to take up a reasonable job offer or else lose their jobseeker’s allowance. However, they are also taking away the only affordable means for people to do so. That is a total failure of joined-up government.

The Government are telling young people to stay on in education post-16, yet they have not only axed the education maintenance allowance, but failed to protect the local bus services that enable young people to get to college. The scale of the cuts faced by councils is leading to restrictions on concessionary fare schemes for young people. Some councils are telling us that they may have to axe schemes altogether. It is no wonder that the UK Youth Parliament chose to debate the need for cheaper fares and more accessible public transport for all young people during its annual sitting in this Chamber, following a vote by 65,000 people across the country.

The Association of Colleges has warned of a drop in further education enrolment and 60% of colleges have reported a drop in transport spending by their local authority. On average, students travel between 9 and 35 miles to get to college, with 72% of them relying on the bus to get there. That is another total failure of joined-up government. The consequence will be added pressures on family budgets or young people simply being unable to take up the opportunities that they need to reach their potential. That is a tragic waste for those young people. It is an idiotic policy because it will lead to higher welfare costs and less tax take in the future. It is a knee-jerk cut that will make it harder to reduce the deficit.

Cuts to school transport support for younger pupils are adding to the burden on families, with parents struggling to afford the fuel costs of the school run or having to juggle getting children to school with getting to work. Figures obtained by the Campaign for Better Transport show that council spending cuts have led to almost three quarters of local education authorities making cuts to school transport.

The loss of bus services has also had a devastating impact on older people. Despite the Prime Minister’s election pledge on the free bus pass that we introduced in government, he has axed £223 million from the scheme in this year alone. That has an impact on the viability of many bus services. Do not take my word for it; Tory-controlled Norfolk county council is leading the campaign for fair funding from the Government for concessionary fares. It has support from councils in Cumbria, Somerset and Devon, all of which have Tory leaders. Norfolk alone has calculated a £4.5 million shortfall in funding for the concessionary bus scheme. Up and down the country, pensioners are asking what is the point of a free bus pass if there is no bus. The Prime Minister has failed to honour the spirit of his election pledge and has left many older people isolated.

[Dr Huppert]

Will the hon. Lady give way?

[Maria Eagle]

I hope that the hon. Gentleman will forgive me, but I have given way to him once and I need to conclude.

The issue is not only about the level of spending; we need the proper regulation of bus services, not least when they rely on public subsidy. Having made these cuts, the Government are powerless to influence bus fares or to protect bus services because they are unwilling to stand up to the private bus operators and to take on the failure of bus deregulation outside London. In London, we have control over fare levels and we can regulate bus routes, or we could if we had a Mayor of London who was not choosing to let bus fares spiral out of control. It is time to consider the right way to reverse bus deregulation across England. We should give new powers to local communities to deliver bus services in the way that best suits them.

[Charlie Elphicke]

Will the hon. Lady give way?

[Maria Eagle]

I am coming to a conclusion so I will not.

Whether it is the increase in rail and bus fares or the rise in the cost of fuel, this Government are allowing the costs of transport to spiral, adding to the cost-of-living pressures faced by families. The Government have failed to tackle those increases not because of the deficit, but because they are unwilling to stand up to vested interests. They are failing to stand up to the train companies, letting train fares rocket by up to 11%. They are failing to stand up to the bus companies and to look at the best way to re-regulate the industry outside London. They are failing to stand up to the banks and impose a bonus tax, adding to the high cost of fuel. As a result there are rising transport costs, which are adding to the pressure on households up and down the country. This Government are too out of touch to do anything about it.

14:34

[The Secretary of State for Transport (Justine Greening)]

I am delighted to be back at the Dispatch Box for the second day in a row. I am also delighted to be debating this important issue with the Opposition who have left the country with such debts, that the Government have little leeway to do what the hon. Member for Garston and Halewood (Maria Eagle) is proposing, which is to add more debt on to a debt crisis.

The Opposition talk about how they feel about train services and rail fares and I will respond to the particular points that the hon. Lady has made. However, many people who are listening will find it galling that the day after the Leader of the Opposition made his relaunch speech which talked about responsibility, his party is instantly engaging in an Opposition debate that shows no responsibility whatever and is making more unfunded commitments that would only add to the debt levels with which it has already burdened our country. The Labour party left this country with the highest structural budget deficit of any major economy in the world and with the highest deficit in our peacetime history. Those debt levels are costing us £120 million a day. We would much rather invest that money in our transport system and other public services. The debt levels that the Labour party left us are crippling the country and we have to tackle them first. As we regain control of our country’s finances, we are aware of how difficult the economic situation is for many people. That is why the Government have taken tough decisions to restore credibility to this country’s economic policy.

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

I am pleased that the Secretary of State is drawing attention to the history behind this matter. My constituents experience the highest rail fares in the country at nearly 30p a mile. Those fares did not get to that level overnight. In his speech on Monday, the Leader of the Opposition described Hertfordshire as one of the cheaper places to live. That shows that the Opposition are completely out of touch with my constituents.

[Justine Greening]

The Opposition are out of touch. The speech largely failed to talk about how we can tackle the underlying problem in the rail industry, which is the cost. The hon. Member for Garston and Halewood touched on that point and I will come to it later. The industry was passed over to this Government with a high cost. I want to tackle that cost, but the previous Government did nothing to tackle it in 13 years. One of the most important things that the Government and I have to do is to get to grips with the high cost of the railway industry. That must be part and parcel of the Government’s overall approach to getting a grip on our public finances.

At the heart of the Government’s clear determination to do that is giving ourselves the best possible chance of keeping interest rates as low as possible for as long as possible to help families and businesses with loans and mortgages. It is not just the taxpayer who is paying through the nose for debt. We must keep interest rates as low as possible for people across this country who rely on that for their household finances to make sense. Let us be clear: if we had taken the advice of the Opposition to spend more and borrow more, which is what they have been talking about in this debate, we would be talking not about the cost of rail and bus fares, but about an International Monetary Fund bail-out to keep our country afloat, and we would be living in a country facing bond yields and interest rates like those of European countries such as Greece. That is the situation that the Opposition want to swap for.

[Kwasi Kwarteng (Spelthorne) (Con)]

Does my right hon. Friend have any idea why the perennial problem of rail costs was not tackled in 13 years under Labour and why she and her Department have had to deal with it?

[Justine Greening]

My personal view is that there were two key reasons—a lack of ability to tackle the problem, because Labour simply did not understand how to do so, and a lack of willingness. Tackling the problems means that we need to have some difficult discussions about the work force, and as we saw in the vote that has just taken place in the House, the Labour party shows no willingness ever to stand up to its party pay leaders, the unions.

[Maria Eagle]

Given that the Secretary of State has said that she is interested in reducing the costs of the railway industry, does she accept that she needs to examine its structure? One of the big causes of excess cost in the industry is the fragmentation that was left to us after the botched privatisation that the previous Tory Government carried out.

[Justine Greening]

I think many people watching the debate will wonder why the hon. Lady’s party did nothing in 13 years. I will shortly publish a Command Paper setting out our approach to tackling a number of the broad challenges that exist.

[Mr Tom Harris (Glasgow South) (Lab)]

I am disappointed that the Secretary of State is being so churlish and saying that the last Government did nothing to reduce costs. Is she even aware that in the five-year control period ending in 2009, they forced Network Rail to improve its efficiency by 33%? Why has she not admitted that that was a major achievement, or that further efficiency savings were included in the next control period ending in 2014?

[Justine Greening]

I do not think there is any way in which the hon. Gentleman can dress up the outcome of the McNulty report, which set out very clearly just how expensive our railway industry is compared with those in mainland Europe.

I understand that rail fares are a large part of household expenditure for many people, particularly commuters, who often travel significant distances to go to work and earn a living. Of course, the taxpayer subsidises the rail industry alongside rail fares, and thanks to difficult decisions that the Government took in the emergency Budget and the spending review, the Chancellor was able to announce in the autumn statement that we would fund a reduction in the planned increases in fares so that regulated fares would increase by RPI plus 1%. That reduction is helping millions of people who use our trains.

[Mr Edward Leigh (Gainsborough) (Con)]

Will my right hon. Friend say something about rural fares? The anytime weekly return to London from Market Rasen, which is not in the frozen north, is £150, and the average weekly wage in Market Rasen is £561. That means that people are paying 26% of their weekly salary just to get to London and back. That is not acceptable, and something must be done. We must have less emphasis on the high-speed rail link and all those wonderful projects and more emphasis on helping ordinary people in rural areas.

[Justine Greening]

My hon. Friend is right to set out the very difficult balance that we have to strike. On one hand we have to ensure that we keep rail fares affordable, and I am determined to do what I can to do that in spite of the fiscal straitjacket within which the Government are having to operate. On the other hand, we have to ensure that we can balance investment in the short term. I am sure that many Members were delighted to see Bombardier agree the contract with Southern for more carriages, and we are putting unprecedented investment into the existing railway lines. We have to strike a balance between working out who pays for the hard work that is going on today and ensuring that we have a railway network that is fit for service in the future.

I know that some passengers on particular routes have faced higher increases than others, and I listened to what the hon. Member for Garston and Halewood said about the 5% flex in rail fares. I am bound to point out, however, that it was the last Labour Government who introduced that flex in 2004.

[Maria Eagle]

I accept that it was introduced by the Labour Government, but it was then stopped by the Labour Government and reintroduced by the current Government.

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

It was stopped for one year.

[Maria Eagle]

No, permanently.

[Justine Greening]

I am pleased that the hon. Lady has made that intervention, because I have with me an exact extract from the franchise agreement that the last Labour Transport Secretary put in place. I shall quote from it, to remove any uncertainty, and then maybe the hon. Lady would like to intervene on me again. It states:

“With effect from 1 January 2010, Schedule 5 of the Franchise Agreement will be amended as set out in the Appendix to this notice.”

That is the change that she has talked about. However, it continues:

“On and from 1 January 2011, the amendment to the Franchise Agreement set out in this notice of amendment shall be reversed.”

Does she want to intervene to correct the record?

[Maria Eagle]

I am very happy to intervene. Of course I will not contradict what the legal agreement states, but the last Labour Transport Secretary made it perfectly clear to the Transport Select Committee in 2009, in oral and written evidence, that the policy was to continue. It had not been negotiated, but that is different from the policy having been changed. Negotiations go on all the time in government, as the Secretary of State will be finding out. I do not think that quotation makes the point that she thinks it does.

[Justine Greening]

I really suggest that the hon. Lady stops digging the last Labour Transport Secretary into a deeper hole than he is already in. The contract is absolutely clear-cut, stating categorically in black and white that the flexibility levels introduced by her party’s Government would be reintroduced the year after their abolition.

[Mr Tom Harris]

Irrespective of what the legal agreement was, does the Transport Secretary personally believe that it would have been a good idea to renegotiate a further period for which the flex would not have been in force?

[Justine Greening]

I do not, because I believe that the train operating companies need flexibility, so I support my predecessor’s decision. If I did agree with negotiating a further period, it would represent a spending commitment. I agree with the shadow Chancellor that now is not the time to make any further spending commitments, even if the hon. Member for Garston and Halewood does not. We can see the absolute disarray that the Labour party is now in.

I find it incredibly frustrating and galling, as I think many other people do, to hear on one day the leader of the Labour party—the party that left this country in a worse financial state than any other Government ever have—profess that we must be responsible, even though Labour was irresponsible and did not have the custodian values that it needed in looking after our public finances, then the day after, to hear Labour talk about more spending and more debt in the middle of a debt crisis. The very people who let this country down the most and left our public finances in their worst state ever are now the ones talking about responsibility. Most people outside will see that for exactly what it is—absolute political gibberish.

[Ms Buck]

Will the Secretary of State give way?

[Justine Greening]

No, I am going to make some more progress now.

I ask the hon. Member for Garston and Halewood, or perhaps the shadow Minister who winds up the debate, to come clean and talk about how their spending commitment would be funded. If the hon. Lady wants to go against what the shadow Chancellor is saying about there being no more spending, she must accept that her suggestion represents a spending commitment. It is time to talk about how she would fund it, otherwise she has to accept that it would lead to more debt at a time when we are right in the middle of a debt crisis. There is no point in the Leader of the Opposition promoting responsibility when his own party continues to show absolutely none.

The hon. Lady also has to admit that the flexibility that she wants to take away from train operating companies has meant some passengers benefiting from lower increases or decreases. For instance, passengers on the Birmingham to London route via High Wycombe have seen their annual season ticket price reduced by 7%, and the Gatwick to Bournemouth saver return has been reduced by 28%. She is proposing to raise the cost of those passengers’ travel. Presumably she is quite happy to confirm that—she can intervene if she wants.

The bottom line is that for all the bluster that we heard from the hon. Lady, she would abandon the long-term investment in capacity improvements that depends on continued funding from both the taxpayer and the fare payer. She talks about 11% fare increases, but the last Government also allowed such increases. It is worth reminding ourselves of their record on rail fares and value for money. The Labour-led Transport Committee in the last Parliament stated:

“Neither passengers nor tax payers are getting value for their money…The value for money of rail travel has deteriorated by most yardsticks over the past decade.”

I have listened carefully to the comments of the hon. Member for Garston and Halewood, and I hope that we both accept that the real driver of rising costs for fare payers and taxpayers is the inefficiency of the rail system that we inherited from the Opposition. She mentioned other European railways, and Sir Roy McNulty’s independent review of our railway network found that the system that we inherited from the previous Government is 40% less efficient than those of our best European comparators. Taxpayers and fare payers must shoulder that huge cost burden because of the previous Government’s failure to reform our railways.

Unless we are prepared to get to grips with the underlying causes of the inefficiencies, we will never make the progress that I am so passionate about achieving. That means getting different parts of the industry to work more effectively together, as we are doing through the rail delivery group, which has been set up, as Roy McNulty proposed. It means aligning incentives better and increasing transparency—I absolutely agree with that. However, it also means tackling some of the work-force issues, which, we must all accept, have driven up costs. When we reach those difficult discussions in the coming weeks, months and years to tackle rail industry costs that are too high, I hope that the Labour party will step up to the plate and join us in making the necessary decisions to bring rail costs down for the longer term and relieve the fare rise pressures that we have experienced year after year.

[Kelvin Hopkins (Luton North) (Lab)]

The Secretary of State rightly draws attention to the difference in cost between continental railways and ours. The only major difference between them and us is that theirs are publicly owned and integrated and ours are privately owned and fragmented.

[Justine Greening]

That is an over-simplification. However, the hon. Gentleman is right to point out that Sir Roy McNulty identified in his report a need for the different parts of the rail industry to work together much better. Network Rail is already doing that with many of the train operating companies. That was to be a key way of driving costs down—not through worsening services but by running the system better in the first place.

[Stephen Hammond]

If we are comparing privatised or denationalised and nationalised railways, perhaps the Secretary of State would like to reflect on the point of history that, in the last 15 years of British Rail, fares rose faster than in 15 years of denationalised railways.

[Justine Greening]

As ever, my hon. Friend, for whom I have huge respect and who is obviously an expert in the House on the subject, makes an incredibly powerful point. It is worth complementing that with the point that we also experienced unprecedented increases in passenger demand since privatisation.

[Julie Hilling (Bolton West) (Lab)]

When the Secretary of States talks about reducing costs in the industry and staff numbers, does she mean cutting the salaries of people who work in ticket offices on basic wages of £16,000 or £17,000, or of train dispatchers, who are on basic wages of £14,000—not big, but low salaries? Is she saying that those people should have their salaries reduced?

[Justine Greening]

I do not think that I have talked about reducing salaries. Many people might say that a train driver on a salary of £40,000 or more had a well-paid job compared with them.

Clearly, we need to address important issues that relate to the costs of the railway industry. That is why we will publish the rail Command Paper early this year to set out how to meet the challenge. That is the real prize. The long-term way of reducing pressure for relentless fare rises is by tackling the underlying driver: the industry’s cost base. As I said, that will also give the Opposition an opportunity to demonstrate whether they are serious about reducing costs to passengers or whether their policy review is limited to tinkering at the edges with uncosted commitments drawn up on the back of an envelope.

[Mrs Main]

I have written to the Secretary of State about Network Rail, which has fundamentally failed many of the train operators—67% of all delays and stoppages are to do with Network Rail. It is time to have a debate about it. Network Rail, which is with the Office of Rail Regulation now, has been deeply inefficient in the amount of money that it costs the taxpayer.

[Justine Greening]

That is what I mean when I talk about the need to align financial incentives better so that people are pulling in the right direction and so that, when performance is not good enough, it costs the people who cause the inefficiency in the first place.

I want to move on to the second aspect of the comments of the hon. Member for Garston and Halewood —bus fares. Although every sector and Department have had to play their part in deficit reduction, the Labour party still does not accept that, even after yesterday’s speech by the Leader of the Opposition. Nevertheless, we are determined that, even in the difficult economic conditions that we face, buses will continue to receive their fair share of funding. Yes, it is constrained by the terrible legacy that the Labour party left us, but we are determined to encourage more people on to buses and to make bus travel more attractive. That is why we set out in a spending review our commitment to continuing our financial subsidy of bus operators. The bus service operators grant remains untouched for this financial year, with savings to be introduced only from April, alongside others that we have had to make across Government as part of tackling the deficit that the Labour party left us.

[Ms Buck]

Does the Secretary of State therefore think that the Mayor of London was wrong to raise a single bus fare by 50% since 2009?

[Justine Greening]

Many Londoners will not forget that the current Labour candidate for Mayor increased bus fares in 2004 by a huge amount. I simply do not accept that his proposals for London will mean anything other than catastrophically undermining the essential investment, on which so many Londoners count, in the transport system. It is financial jiggery-pokery, and it does not add up. I believe that Londoners will see right through it in May.

We must tackle the deficit, but we continue to ensure that funding goes into our bus services. Indeed, we spoke to the industry as part of the spending review about how we could get more out of the bus service operators grant. After difficult spending decisions, the industry said that it felt able to absorb the reduction without raising fares or cutting services. Nevertheless, we are protecting the concessionary bus travel scheme.

[Lilian Greenwood (Nottingham South) (Lab)]

I can assume only that the Secretary of State is out of date, because the Confederation of Passenger Transport UK told me that, although it initially felt that it could absorb the 20% cut in the bus service operators grant, the combination of that and the cuts to concessionary travel repayment and local transport was a perfect storm.

[Justine Greening]

The hon. Lady should apologise to that organisation more than anyone else because her Government left the country’s finances in a state that means that we have to make very difficult decisions. There is not a day when I do not come into the office wishing that the state of the public finances that the Labour party handed us was better. The reality that we must all, apparently apart from Labour Members, face is that we have got to tackle that problem. That means making some difficult decisions. The Labour party is in complete disarray.

[Several hon. Members]

rose—

[Justine Greening]

Until the Opposition speak with any sort of single voice, it is pointless taking further interventions. Most hon. Members would accept that I have taken an awful lot and it is time for constituency Members of Parliament to have their say on behalf of their communities.

We are committed to investing in bus travel. In the past two months, we have also announced nearly £100 million of additional investment in buses as part of the growth review.

We are committed to investing in the transport infrastructure—not only HS2, as we announced yesterday. We are putting unprecedented investment into rail infrastructure. Even in these tough times, the Government are taking action to help people with the rising cost of living at the same time as dealing with the massive budget deficit that the Labour Government left us. That is why we are helping keep interest rates low for families and businesses, freezing council tax for the second year running, cancelling this month’s fuel duty increase on top of last year’s fuel duty cut. It is why we are funding a reduction in the planned increase in regulated rail fares and continuing our financial subsidy of bus operators while implementing a massive programme of investment in our transport infrastructure, not just for passengers today and in the next 10 years, but for those in the decades to come. Our determination to reduce the cost of railways in the long term to fare payers and taxpayers means that we will introduce proposals for substantial reform in the rail Command Paper early this year.

That is the significant action that we are taking. The Labour party talks about responsibility at the top, but in reality that means difficult decisions. We are making them, and that stands in stark contrast to the Labour party’s tinkering, unfunded and, in so many cases, unworkable proposals.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I have to inform hon. Members that a time limit of six minutes has been placed on Back-Bench contributions.

15:00

[Mr Tom Harris (Glasgow South) (Lab)]

Since the Secretary of State spent some time talking not about rail fares but about the economic legacy of the last Labour Government, I wish to make one brief point first. As an Opposition Member, she was a member of the shadow Treasury team and, up until November 2007, the Conservative party’s policy was to support every penny of spending made by the Labour Government. If she is claiming that the deficit that the Government inherited was created in the last 18 months of the Labour Government, that is something that the House would like to debate. She cannot pour scorn on the spending of that Government when she sat on the Opposition Front Bench and supported every penny. That is double standards. The Secretary of State shakes her head, and I am more than happy to give way if she wants to explain why she did not tell the then shadow Chancellor that he should not support Labour’s spending plans.

[Justine Greening]

Everybody in Britain knows exactly which party got the country into the financial mess. It is precisely why Labour Members are on the Opposition Benches now: it was them.

[Mr Harris]

That says quite a lot about the Secretary of State’s reluctance to accept her own culpability for supporting the spending plans of the previous Labour Government.

I do not believe that the railway industry is broken, or a basket case. I was proud to serve as a railway Minister in the last Labour Government, and I understand the successes that have grown from 13 years of Labour governance of the railway industry. We have more people travelling on the railways than at any time in their history outside of wartime. We have more services every working day than ever before, and punctuality is at an all-time high. Those were achievements that this Government have managed to continue—and I hope that that continues—but fares are a fundamental weakness. They are the crucial interface between the travelling public and the railways and—irrespective of the public subsidy to the railways—if we do not make rail travel affordable for ordinary people, it will not be surprising if they feel that the railways are letting them down.

The previous Secretary of State for Transport, the right hon. Member for Runnymede and Weybridge (Mr Hammond), famously described the railways as a “rich man’s toy”. A few weeks ago, I challenged the Secretary of State in the Transport Committee about whether she agreed with that assessment and, understandably, she did not want to commit herself. She told the Transport Committee that she wanted to see the balance between the taxpayer and the fare payer move towards the latter. She also said that in the long term she wanted the fare payer to pay less. Well, she can have one or she can have the other, but she cannot have both. It is clear that unless the taxpayers’ contribution is increased, fares will not come down. The Secretary of State refused to answer that point at the time.

[Paul Maynard]

The hon. Gentleman raises the interesting question of whether the burden can be switched to the fare-paying passenger at the same time as reducing fares. Does he agree that if we do what McNulty recommends and try to reduce the overall cost base of the railways, that conundrum could be solved?

[Mr Harris]

I am sure that the hon. Gentleman, who also sits on the Transport Committee, is as much of an expert as any other Member, and I will agree to consider his comments.

The Prime Minister was wrong today and failed to give the facts about the policy of the last Labour Government and the policy of this Government. Even if it was for only one year, Lord Adonis managed to challenge the rail industry on the so-called basket of fares and whether the RPI plus 1% policy should apply to individual fares or to a basket of fares. He got a lot of support on both sides of the House for insisting—against the arguments of his own officials and the resistance of the industry—that that policy should apply only to individual fares. As we know, if it is applied to a basket of fares, some can go up by 6%, instead of 1%. Whether or not that was a temporary agreement for one year, surely when a new franchise is let the Minister has a responsibility to challenge the industry and set such an arrangement in stone at the very start.

When the railways were first privatised, the policy—it was then RPI minus 1%—was applied to a basket of fares, as agreed with Ministers. That was what Lord Adonis succeeded in challenging, but sadly only for one year. Will the Secretary of State give a commitment that, in future new franchises, the Adonis approach will be applied to fares to protect fare payers and to ensure that train operating companies take money out of their own pockets, rather than the pockets of fare-paying passengers?

[Mrs Villiers]

Will the hon. Gentleman give way?

[Mr Harris]

I only have six minutes and the Minister will have plenty of time to wind up at the end of the debate.

I hope that the Secretary of State will not take the same path as has been followed in Scotland, where the SNP Government—for the first time since the 1960s and Beeching—are threatening to close stations, including Kennishead in my constituency, even as passenger numbers are increasing there and throughout the network. That is a disgraceful approach for any so-called progressive Government to take, and I hope that the Secretary of State will make a commitment that she will not close stations or lines in the rest of the country.

It is too easy to criticise rail services and forget some of the major advances that have been made since privatisation, but at the crucial interface between train and customer, there is a growing crisis of affordability—on the personal level, rather than the national taxpayer level.

[Charlie Elphicke]

The hon. Gentleman says that the Adonis policy was for one year only. Was that not an election year? I am sure that most people would agree that that is the kind of cynicism that used to characterise the previous Government and it is a good thing that we have got rid of that.

[Mr Harris]

Most fare-paying passengers would not agree that it is a good thing that that policy was got rid of, because they are paying more as a result. Perhaps the hon. Gentleman represents constituents who are very wealthy and can afford to pay unlimited increases in fares. If he is claiming that it was a cynical manoeuvre by Lord Adonis, he has clearly never met him. It was officials who recommended that the agreement should be for one year. Is the hon. Gentleman really saying that a Secretary of State should ignore legal advice? That is disgraceful and completely misrepresents what the then Secretary of State and Labour Government were doing for rail passengers.

15:08

[Stephen Hammond (Wimbledon) (Con)]

I direct the House to my entry in the register. It is a great pleasure to follow the hon. Member for Glasgow South (Mr Harris), who is the joint chair of the rail group and was of course a distinguished rail Minister.

The motion makes four contentions. First, it is critical of the scale of fare increases overall. Secondly, it contends that the scale of rail fare increases has added disproportionally to the increase in the cost of living for us all. Thirdly, it says that the flex mechanism should be stopped, and fourthly that the profits of the rail companies are too high. I wonder whether, in my short contribution, we might look at some of the facts rather than the hyperbole.

First, as the hon. Gentleman pointed out, there can be no discussion of rail fares without accepting that there is always a balance between what is funded by the taxpayer and what is funded by the fare payer. Successive Governments since 1945 have chosen to subsidise both the operating and the capital costs of rail expenditure, so there has been an implicit subsidy of fares from the taxpayer. That equation has been long recognised. It was Lord Adonis who, in the later years of the Labour Government, decided that the balance had swung too far from taxpayer support and needed to swing back to the fare payer. Therefore, if we want to start talking about why rail fares are increasing and taxpayer subsidies are decreasing, let us all be absolutely clear. History shows that the change in the slant of that equation happened post 2004, and certainly accelerated from 2006, so that the £10.5 billion overall operating costs of the industry are now split, with 62% coming from the fare payer and 38% from the taxpayer. The bulk of that change happened between 2005 and 2010.

Secondly, when it comes to the system of regulated and non-regulated fares, it was the last Government who introduced the policy of RPI plus 1, which is why regulated fares are increasing this year by RPI plus 1. Are Opposition Front Benchers saying that they have changed their attitude towards regulated and non-regulated fares? Are they saying that they will not operate RPI plus 1 in future? The motion is of course stoically silent about that. Let us look at the relative contribution of different sectors to the increase in our cost of living. The motion’s claim does not bear too much examination, for it is not rail or bus fare increases that are contributing most to our increased cost of living. The World Bank global food index has gone up 19% over the last year, while Green Flag says that the costs of motoring and car insurance are up 21%. The average fare increase this year—I accept that it is an average; we will come to that point in a moment—is 5.9%, so the motion fails when it says that there is a disproportionate increase from transport.

As my right hon. Friend the Secretary of State has already pointed out, no one wants to see excessive price increases. Also, I accept that we are talking about an average and that some people have seen rather larger fare increases, but that is also the point about flex, is it not? Flex is a weighted average increase—a device, introduced by the last Labour Government and suspended for one year only, to manage demand. If the Labour Opposition are going to get rid of flex, they have to say whether the shadow Secretary of State will write to every commuter whose rail fare increase was less than the average and tell them why she is doing it. Is she going to put in place another tool or mechanism to manage demand? Let us not forget that although she talked about demand in peak hours, rail markets, like many other markets, are localised markets around cities or in rural areas. That is why the last, Labour Government agreed and negotiated differing peak hours with the rail companies, to ensure that localised demand could be managed over peak and “shoulder” hours. If she is going to get rid of flex, she has to stand up and say how she will accept that challenge and demand.

Finally, there is a lot of talk about the huge profits earned by the rail companies, but their operating profit margin has been absolutely constant over the last 10 years, at approximately 3%. Let us look at some of the other companies around—say, that mouthpiece of the Labour party, the Daily Mirror, whose operating profit margin is 16%. It is absolutely clear—it is also implicit in RPI plus 3—that any extra contribution will go back into the rail industry, not the profits of the rail companies. Today’s motion is interesting, but it fails the test of fact. That is why I hope the House will reject it.

15:14

[Owen Smith (Pontypridd) (Lab)]

Transport infrastructure is one of the most important and pressing aspects of economic renewal. It is one of the keys to seeing the real improvements in our economy, the growth in jobs and the economic development that we all need. That is perhaps particularly true in some of the, as it were, post-industrial parts of Britain, such as my constituency in the south Wales valleys. Rail there has always enormously important. Indeed, it is perhaps more important right now than during any period in the last century, and arguably since the 19th century.

That is why I welcome the Government’s infrastructure investment decisions. I welcome the announcement about electrification of the Great Western line between London and Cardiff, although I deplore the fact that the Government have not recognised the excellent business case for going as far as Swansea. I also welcome the decision to take forward, in conjunction with the National Assembly Government, a business case to consider electrification of the valleys and the creation there of a so-called metro system. The reason that is so important is that travel to work in urban metropolitan centres such as Cardiff from their hinterlands is the key to the economic regeneration of places such as Pontypridd, the seat I represent. I urge the Minister to consider that business case carefully when it comes forward and to look on it favourably, because doing so would be a genuinely bold and imaginative step, and a key to change.

Secondly, I agree with my hon. Friend the Member for Glasgow South (Mr Harris), the former Transport Minister, that we cannot say that all is ill with our railways right now. They are, without a doubt, more efficient, cleaner and less dangerous than they were before the Labour Government. It is Labour investment and Labour management of the rail system that led to those changes, in particular the way we effectively negotiated franchises, which—not always, but in the main—led to investment and improvement. Indeed, I commend the current Government for taking forward that infrastructure legacy.

[Mr Robert Buckland (South Swindon) (Con)]

Does the hon. Gentleman not agree, however, that the terms of reference for the previous Great Western franchise put the service at the wrong stage, in effect applying a lower common denominator and thereby regressing the service? The new franchise needs to start from the current level and quality of service, so that we can encourage value for money and progress, instead of the rather problematic issues that we have encountered with First Great Western in recent years.

[Owen Smith]

I am grateful for that intervention, which gives me the opportunity to say that it was, of course, the Labour Government who managed that franchise, such that we called in Great Western and demanded the changes that it made and that it adopt special measures.

[Mrs Villiers]

The Labour Government did make some attempt to fix the problems, but they created them, because they let the franchise in the first place.

[Owen Smith]

In truth, the problems we have with the railways are in large measure precisely due to the fragmentation that resulted from the botched privatisation of our rail industry. That is the reality.

The way we have debated this issue today—in particular, the way the Secretary of State took the opportunity, uncharacteristically perhaps, to make a lot of heavy-handed party political points—does not serve our constituents and rail travellers well. This is too important an economic issue, as she will know from her time on the Treasury Bench, for us to play knockabout politics with it. The key issue that the Opposition are raising today is affordability. Very simply, given that it is so important for many of our constituents that they are able to take advantage of the improved, more efficient and cleaner train services that are now available, those services must be affordable. That is why we are concerned about the large fare increases in the recent round, although Arriva Trains Wales has commendably kept down a lot of its fares across parts of my patch to RPI plus 1. On the Great Western line, however, there has been a worrying increase of 10% in the cost of travelling between Cardiff and London, as my hon. Friend the Member for Garston and Halewood (Maria Eagle) said. That will make businesses and commuters think hard about whether they can continue to travel on that vital line for commerce and commuting.

It is important that the public understand that this Government took a decision to repeal the ban on flexing fares that the Labour Government put in place. That measure was introduced as a result of the economically straitened times in which we found ourselves in 2009. Lord Adonis made that decision to try to address the issue of affordability, and it is party political point scoring to suggest that the fact it was negotiated as a legal contract for one year was indicative of a longer-term intention. There is no read-across in that respect, and the Secretary of State would do well to take Lord Adonis at his word when he put it in writing to the Select Committee that he intended to continue the practice while we remained in economic difficulty.

What has changed since 2009? People are harder up than they were. Things have not got easier for my constituents or for those of the Secretary of State; they have got harder. That is why the Government should have thought long and hard about how they could justify taking a decision that might be in the interests of the train operators but is not in the interests of the travelling public. That was fundamentally the wrong decision for them to take.

I welcome the common sense that we have heard from my hon. Friend the Member for Garston and Halewood today about the need for a cross-party review of our rail services. The fares are too complicated, and the system is too complicated. The flexing at peak times across different parts of the country is also too complicated. Many people end up paying higher fares than they ought to, because the system is engineered in such a way that they cannot access the cheapest fares. We have seen this with the energy companies as well. They rig the market in their favour by making it utterly impenetrable to ordinary people, and it is the same on the railways. My hon. Friend is absolutely right to say that we must look into those issues, and at the underpinning question of the nature of the structure—the ownership principles—of the railway industry. We cannot simply say that there is no alternative, and we cannot get into a tawdry, tedious knockabout over whether this or that issue represents a spending commitment. That is just point scoring, and we need a much more fundamental discussion about the nature of our rail services. We need a Government who are going to act in the interests of the people, not just those of their people.

15:23

[Mark Menzies (Fylde) (Con)]

May I start by welcoming the biggest rail investment programme that the country has seen? It was clear to all of us who were in the Chamber yesterday that the Secretary of State has shown great leadership and vision in taking difficult decisions on the future of the railway network. There is cross-party consensus on High Speed 2, but that was the kind of difficult decision that Governments can sometimes be tempted to kick into the long grass. I therefore welcome the fact that this Government have decided to press ahead with the project with such vigour. Such capital projects have to be paid for, however, and they cannot always be paid for solely from the public purse. Unfortunately, we also have to be prepared to ask the travelling public to make a contribution.

The electrification of the triangle of routes between Manchester, Preston and Liverpool represents a great step forward for the north of England, Mr Deputy Speaker. I know that you, too, care passionately about the railways, because you are a north-west MP. That investment will no doubt have substantial benefits for businesses in the north-west, and I am sure that the whole House will welcome it.

For the foreseeable future, the west coast main line will be the main artery connecting the north-west to London, and, as I know the Secretary of State is aware, the franchise is now up for renewal. May I take this opportunity to urge her, when she is looking into the franchise, to take into account not only the quality of the bids but the proposed fare structures? Will she ensure that low-cost, flexible fares remain available for the people who do not always have the luxury of being able to book many days in advance? We must ensure that people on low incomes who have to travel at short notice are not priced off the railways.

Moving on, may I point out that some of the key stations on the west coast main line, such as Preston and Wigan, are in desperate need of serious capital investment? For many years, they have been given a lick of paint and nothing more. I urge the Secretary of State to ensure that whoever operates that line focuses on such investment. We also need to be clear about how that investment will be paid for. We cannot keep asking the taxpayer to put their hand in their pocket; we must accept that if we want stations in the north-west and elsewhere in the UK that we can be proud of, some of the cost must fall on the travelling public.

Many of us will have received letters and postcards about the increase in rail fares, and in the current climate we must do everything possible to ease the stresses on people’s living expenses. They face not only higher rail fares but higher household fuel bills, for example. The Government are not insensitive to that, and we need to recognise that they are doing everything in their power to keep those costs to a minimum. In launching such large-scale, ambitious projects, my right hon. Friend the Secretary of State is to be congratulated on doing everything that she can to keep price increases down to RPI plus 1%. That is significantly less than the increase of RPI plus 3% that was expected before the autumn statement, which should be welcomed. We are a railway nation, but if we want railways that we can be proud of, we need to be prepared to pay for them. The taxpayer does not have a limitless cheque book.

15:27

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

I want first to talk about how the Government have increased fares with no added visible benefit to Teesside and the rail users of the north-east. The Secretary of State has mentioned unprecedented funds being put into rail lines, but sadly, that has not happened on Teesside. As the hon. Member for Fylde (Mark Menzies) said, the announcement in the Chancellor’s autumn statement that the trans-Pennine route from Manchester to Leeds and York would be electrified has been greeted with enthusiasm in the north. However, that enthusiasm has been tempered with concern that the move could risk fragmenting the highly successful trans-Pennine network. The plans for partial electrification have opened a can of worms, as they could leave many major towns and cities of the north worse off than they were before.

The TransPennine Express franchise covers a network of routes across the north and into Scotland, and currently uses an all-diesel fleet. With Manchester as its hub, the TPE network serves Manchester airport, Liverpool, Blackpool, Barrow, Windermere, Glasgow and Edinburgh on the west side. Liverpool and Blackpool are to be electrified under previously announced plans, leaving Carnforth, Barrow, Oxenholme and Windermere unwired. To the east from Manchester, the TPE operates to Leeds, Hull, York, Scarborough, Middlesbrough and Newcastle. The core route between Manchester and Leeds is used by all the TPE’s eastbound services, with a pattern of four trains an hour. The Hull route diverges east of Leeds, while the Scarborough line branches off at York, and the Middlesbrough trains leave the electrified east coast main line at Northallerton. The busy section between Manchester and Leeds is ideal for electrification with lots of trains operating over a steeply graded route. The northern hub strategy would see the core route’s frequency increased from four to six trains an hour, with many services running west from Stalybridge into Manchester Victoria.

The new Ordsall curve will, when completed, allow trains to continue to Piccadilly and the airport, while Liverpool services would head west over Chat Moss, but what happens to the routes such as those to Hull, Scarborough and Middlesbrough to the east and Barrow and Windermere to the west, which are not currently down to be electrified? I have already asked parliamentary questions about the future prospects of the service to Manchester airport, expressing the concern that Teesside could be left to languish on a “non-electrified branch line”. Rail campaigners I know in Cumbria have expressed worries about Barrow trains terminating at Lancaster and about Windermere becoming a self-contained branch.

The route in my area has massively increased in popularity, largely due to the huge benefits brought by the previous Cleveland Labour authority, which invested heavily in the local rail line in 1993 and formed new train stations such as Yarm.

It is ironic, given the recent Government announcement after fantastic campaigning by my hon. Friend the Member for Sedgefield (Phil Wilson) for the delivery of the Hitachi plant at Sedgefied, that dual-use—both diesel and electrified—trains made by Hitachi will be built in an area that would not benefit from those self-same carriages. Network Rail has been asked by the Department for Transport to look at the business case for electrifying the line to Middlesbrough, Scarborough and Hull, and I believe an announcement is expected in July.

All this comes down to basic economic arguments when we have a Government who are evacuating the public sector and public sector spending and trying to implement regionalised pay and to change local business rates supposedly to attract private investment. Industry, however, particularly that using freight in my area, has no market certainty about how this Government are developing their transport plans. What makes me and people in my area angry is that at a time when manufacturing is in the doldrums, with statistics showing a potential recession, and despite the fact that the north-east is bucking the trend through its chemical industry, local steel industry and the agricultural industries in the region, we are nevertheless not getting any of the infrastructure benefits of the positive measures coming from industry and local workers in my region.

The Secretary of State said that the previous Government had left a terrible legacy and that this Government’s fiscal measures were amending that position. I beg to differ. The reason why we are able to lend at better rates at the moment has absolutely nothing to do with the fiscal measures of this Chancellor—the Secretary of State knows this—as it is really due to quantitative easing and Bank of England policy since 2008. That can be measured by the fact that foreign market purchasing of our bond yields has not increased since 2008. The Secretary of State can talk as she wishes about the economic changes being made by this Government’s policies, but the truth is that this Government have no plan for growth. As I have said, manufacturing is delivering for this nation in my region, yet the Government are providing no infrastructure support. That has been backed up by the civil engineering association in my region, which recently met me and reiterated that argument.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I now have to announce the result of the deferred Division on the question of the carry-over for the Local Government Finance Bill. The Ayes were 329, the Noes were 207, so the Ayes have it.

[The Division list is published at the end of today’s debates.]

15:32

[Dr Julian Huppert (Cambridge) (LD)]

Rail fares in this country are far too high. Under the last Labour Government we saw year after year of fare rises, and we now have one of the most expensive railways in the world. From 1997, 13 years of Labour government saw rail fares going up by 66% in cash terms. I welcome, however, some of the shadow Secretary of State’s comments about people wanting simple ticketing, as they want to understand what is going on. I welcome that, although it is somewhat belated. I and many others have been arguing for that for many years. I hope we can go further; it is a shame that it did not happen during those 13 years.

Most recently, thanks to pressure from the Liberal Democrats—both inside government, from those such as the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker) and outside it—and arguments won by a new Secretary of State and Minister for the railways, fares have risen by 1% above inflation this year rather than the planned 3%. I welcome that, and I hope it will not revert to 3% in future years.

We in the Liberal Democrats believe that fares should fall in real terms rather than rise even further above inflation, as happened year on year under Labour. As the shadow Secretary of State confirmed today, Labour policy is for fares to go up by more than inflation every year. That is something that the British public should be concerned about; they have heard it from the shadow Secretary of State today. The Conservatives have also argued for similar increases. We need to reduce the fares and to understand how we can reduce them, we first need to look at how fares have become so high.

[Justin Tomlinson (North Swindon) (Con)]

With pressure to raise revenue to offset fare rises and reduce overcrowding, why not give greater freedoms to train conductors to sell spare capacity in first-class carriages during peak times?

[Dr Huppert]

I would have to look at the details, but it is an interesting idea that is worth looking at. There is also the question of how much spare first-class capacity there should be so that potentially everybody could afford to use it. I am sure that the responsible Minister will look at that.

Why are rail fares so high? Why do commuters suffer from some of the most expensive tickets in Europe and some of the most crowded services? The main reason is chronic underinvestment and mismanagement of the railways. Over the last 50 years, for example, the length of our rail network has roughly halved, but even just since 1980, the number of passenger journeys has doubled. That is good, but it puts pressure on those railways. Government after Government have invested far too little in our most important transport network. Infrastructure spending simply has not kept up with demand, and that pressure on the railways has caused a downward spiral. An overcrowded, inefficient and unreliable service is far more expensive to run. The Office of Rail Regulation estimates that UK railways are up to 40% less efficient than their European counterparts, despite the cost of tickets. That puts fares up, and reduces the amount of investment that is available from them.

The network has become increasingly expensive to run as it has deteriorated, and Government after Government have shifted the spending burden on to passengers. I believe that a large chunk of the 30% savings identified by the McNulty review should be passed on to passengers in the form of lower fares as soon as possible, with the rest being spent on infrastructure. I hope that the Secretary of State and the Minister will accept that those are the priorities.

What is key is significant and well-targeted investment in the railways. That is why the Liberal Democrats were so thrilled by the announcements made by the coalition Government towards the end of last year. Despite the eye-watering public deficit that we face and the ongoing eurozone disaster, we managed to find the £1.4 billion of investment in our railways that was announced in the autumn statement—£400 million more than was announced for the roads, which represents a very good rebalancing towards sustainability—and yesterday we heard the excellent news about High Speed 2.

If we have managed to find those funds now, in such difficult times, just think what could have been done in the boom years. That opportunity was missed. It is deeply regrettable that the necessary investment was not made sooner. Funding would have been easier, decisions would have been much easier to make, and the fares that we face now would be lower. It is a great shame that that did not happen when the money was available.

As well as what can be done in the longer term, there is more that we can do now. For years the Liberal Democrats have called for rail fares to be more open, transparent and rational—so that people can understand what they are buying, why they are buying it and when they can use it—and for franchise agreements to be more flexible. On both those fronts, the Government are making significant progress by reforming franchise agreements and opening up Government data. Nevertheless, there is more to do, and I am sure that the Minister will say more about it later.

Without accountability and openness, there can be no reform and no incentive for fare reductions. It is because of the lack of transparency that successive Governments have employed in rail policy that the debate has become so fractious and fares are so stubbornly high. We see politicking and individual fares being picked on in various quarters. We can all do that. Today we heard the Labour party present the fare rises as though they were a new phenomenon, but fares have risen above inflation since 2003. Some fares have always been allowed to rise more than others as long as they fit the average cap. That was the system established by Labour in 2004.

I could give a number of examples. In 2007, fares on Stagecoach South West Trains rose by 20%. In January 2009, when the retail prices index was 0.1%, fares rose by 6%: 60 times as much as inflation, which was a huge amount. Some comments were made about Ken Livingstone earlier. Londoners will not forget that, having promised in his manifesto

“I will freeze bus and tube fares in real terms for four years”,

Ken Livingstone raised bus fares by 43% in January 2004. They will know what to believe when he makes similar promises again.

The real casualties of all that are the rail system and the passengers whom it is there to serve. The masking of the cause of the fare rises, the predicted income and the pricing structures have meant that the real issues have not been dealt with for too long. We are letting the public down by continuing down that route and not taking the steps that I have outlined. We should pay attention to what is happening throughout the country at present, not just to the extremes—the highest and lowest figures. Overall, fares are rising by 5.9%, which is below the “1% above inflation” cap. That is good, but the fares are still too high and they need to come down.

We should focus today on the overall burden on passengers, on the causes of that, and on how we can reduce those causes. Unless we invest and deal with the problem now, we shall never be able to achieve our goal of a cheap, efficient and sustainable transport network. I hope that Liberal Democrats in Government will be able to make those tough decisions in order to give Britain the efficient and sustainable network that we deserve, and I hope that we will be successful in our pressure for fares to go down in real terms and not up, up, up. The public deserve a good, reliable and affordable rail system.

15:39

[Alison Seabeck (Plymouth, Moor View) (Lab)]

Rail travel is vital to the far south-west. It takes nearly three and a half hours to travel from London to Plymouth, and five hours to travel further down the Penzance main line. We have ever-diminishing air travel options—Plymouth airport has just shut—and only two strategic road routes, and there is no motorway leading down to Cornwall. Rail and its affordability are therefore incredibly important.

Over the 15 years since privatisation, rail travel in the south-west has boomed. There have been 85% more journeys, 40% of them to London and the south-east. The number of journeys in Plymouth has increased over the past 10 years, despite the recession, and we have seen the fastest rate of travel-to-work growth—about 4.6% each year.

A major capacity gap is looming, however. The decisions taken on High Speed 2 will not help the south-west as much as we would like. It is especially expensive for people in the south-west to travel around the country, as we pay more per mile than those in other areas. That is part of the legacy of botched privatisation. There is a deep sense of unfairness. I fully accept that rail passengers have to pay towards the service they use, but there should be fairness in the system and that does not exist.

Local authority figures and development plans suggest that the number of rail passenger journeys will increase further, and in excess of Network Rail’s figures—I urge the Government to compare the figures of Network Rail with those of the local authorities—but passengers will still face historically high fares, and in particular those travelling from the south-west. Why are standard anytime single fares that are priced per mile so much higher for our region than for any other region? A standard open ticket down to Plymouth will now cost £252, up by 9.7%.

The Government put forward the idea that people can commute for 90 minutes into work. The 90-minute journey out of Plymouth to Taunton is a fair stretch, and a young person doing their first job will have to pay £170 a week if they cannot afford to buy a season ticket. That simply is not realistic, and it is certainly not affordable.

A number of Members touched on the economic significance of the rail network for regional and city growth. Its importance to the south-west cannot be overestimated. So much potential could be unlocked if our rail services were efficient, on time and, importantly, affordable. In yesterday’s local government finance debate, we talked about how local authority budgets might grow, such as through increasing business rate revenues. Those revenues will not grow if a decent infrastructure is not in place and if fares are not affordable, as under those circumstances businesses will not want to invest in cities that are distant from the central hub of London.

As always, we in the south-west and Plymouth are concerned about our peripherality. Following the HS2 announcement, we are increasingly concerned that the south-west’s links to London are not being looked at and that we are not getting a strategic overview of exactly how the benefits of HS2 will pan out in terms of access to and from the south-west. We have also received no reassurances about affordability, and we see no fairness in the fares structure. We need a fares structure that is simpler, too. We have a new franchise coming up, and fares structuring and pricing must be taken into account at that time. I also urge the Minister to take on board the concerns of the people of the south-west.

My hon. Friend the Member for Garston and Halewood (Maria Eagle) was right to call this debate, as we should highlight the policies of the Government, which do not tackle the rail companies and therefore, in effect, acquiesce in the unacceptably high rail fares. I urge Members to vote for our motion.

15:44

[Iain Stewart (Milton Keynes South) (Con)]

I am disappointed by the text of the motion. We could have had a sensible and mature debate on the future of the rail industry, its costs and the appropriate balance between revenue from the fare box and from the taxpayer, but instead we have merely had cheap political point making, which does no one any service. From listening to some contributions, one would have thought that train fare increases occurred for the very first time in January of this year, whereas there have, of course, been increases for many years.

For many years before I was elected, I commuted daily up and down the west coast main line between Milton Keynes and Euston. Every year, the season ticket went up a couple of hundred pounds. Now, it is about £5,000, and if one adds on parking charges, that is a huge sum of money to come out of people’s pockets after tax. I acknowledge that that is a huge cost, but we need to have a sensible debate about how we move forward from here, rather than just engaging in cheap point scoring across the board. I hope that the Select Committee on Transport, on which I serve, will turn its attention to this issue at some point this year, once the Government have published their fares review and response to McNulty.

In the short term, it is important that we do what we can to cap fares, and I welcome the announcement in the autumn statement that we are scaling back from RPI plus 3 to RPI plus 1. However, it is also important that passengers see something for what they are paying. I applaud what the Government have done to prioritise investment in the rail industry, and we have seen some examples of that on the line I use. It is far from perfect, but there are measures to tackle overcrowding. We have a new fleet of trains, and just this week, Virgin Trains announced that an extra three of its fast trains will stop at Milton Keynes during the evening peak. That will go some way towards relieving overcrowding, and many of the Pendolino trains are being lengthened. Some tangible improvements are therefore happening, although not as fast as I would like—I would like more trains to stop during the peak morning period—but, this is a welcome first step.

Also welcome is the announcement in the autumn statement about the East West Rail line, which will connect my constituency westwards to Oxford, and southwards to Aylesbury and on to London. I hope that, in the fullness of time, we will extend eastwards towards Cambridge, so that I can go and see my hon. Friend the Member for Cambridge (Dr Huppert) in record speed. However, I suspect that that is a little while off. The key point is that these are tangible improvements in the short term that passengers can see for the extra money they have to pay.

However, there are long-term structural issues within the rail industry, and we need to have a frank and honest debate about how we move forward. We should look not just at this country, but overseas to what other countries do. During the summer recess, I had the great privilege of travelling to Switzerland as the guest of the Swiss railway to examine its system. It has increased cost pressures, as well. We hold up the Swiss railway example as nirvana—the goal that we want to achieve—and in many respects it is, but it is having a big argument at the minute about putting up rail fares to pay for increased infrastructure investment in order to increase capacity. So, this problem is not unique to this country.

However, there are certain parts of the Swiss system that we should look at. In the one minute and 50 seconds remaining to me, I do not have quite enough time to go into that issue in depth, but the Swiss have what they call the general access card, which covers public transport costs across all modes, be they rail, tram, ferry or bus. We should encourage measures in this country to improve transport integration, which has long been talked about. The former Deputy Prime Minister, now Lord Prescott, proclaimed that we would have a committee for integrated transport; however, 13 years on, little has been achieved. We need to address such issues and to look at the long-term costs within the rail industry. Our rail costs are among the highest in the world, and we should not just accept that the existing situation must be preserved in aspic for ever.

Some tough issues have to be addressed and it is not going to be easy, but I am looking forward to having a sensible debate. I hope the Transport Committee will tackle these key issues when we conduct our inquiry, hopefully later this year, and that we can have a sensible debate, rather than the petty and pointless political point scoring that has happened today. There are many sensible Opposition Members with whom I serve on the Transport Committee, and I hope we can have a decent discussion and explore all the issues.

15:49

[Julie Hilling (Bolton West) (Lab)]

I start with the point that I wanted to make to the Secretary of State during her speech. There was a global financial crash; although the previous Prime Minister may have been a very powerful man, he did not cause a financial crash in America, Japan, Germany, Europe and the rest of the world.

In my postbag and in my surgeries I increasingly encounter stories from ever more desperate constituents. I hear from those who are losing their homes and their jobs, from those who are terrified about losing their disability benefits and about the changes to housing benefit, and from those who are having to give up their college courses because they can no longer afford to get to them. I hear from ordinary people who are paying the price of the failure of the banks and of this coalition Government’s economic policy.

The rise in gas and electricity prices means that many people are choosing between heating and eating, and some people cannot even afford food. Last year, the Trussell Trust fed more than 60,000 people who were experiencing food poverty, and the number of people seeking help because they simply do not have enough money to feed their family is growing. These people have lost their jobs or faced an unexpected bill, have had their benefits cut or fallen ill, their relationship has ended or they have simply not received a pay increase for a number of years. These are ordinary people facing devastating circumstances simply because they are poor.

Transport costs are yet another problem. Even in this age of the car, many people are totally dependent on public transport. That could be because they are too young or too old to drive, because they have disabilities, because they are young and cannot afford thousands of pounds for car insurance or because they are on low pay and cannot afford to own and drive a car. The bus is an essential part of most people’s travel on public transport. Twice as many people use buses as use trains, with bus use particularly common in the lower income bracket, and 25% of households do not have access to a car. There has been a perfect storm in the bus industry: a 20% cut in the bus service operator grant; a 28% cut to local government funding for transport; and changes to the way funding is provided for concessionary fares for older people, which cost local authorities £223 million in 2011-2012.

What has been the result of that? It has been as follows: children’s fares rising in my area to half the adult fare, rather than being the flat rate of 80p that they were before; bus services disappearing because local authorities can no longer support them; young people dropping out of college or not applying to go because they no longer get education maintenance allowance to pay for the fares; people no longer able to get to their place of work or to afford the fares to get there; the unemployed unable to afford fares to seek work; young people unable to get to youth projects and left with nothing to do; and the elderly and other vulnerable groups left isolated on their homes. It is no wonder that the UK Youth Parliament chose public transport as its No. 1 issue for 2012.

One of my constituents, Sandra, wrote to me about the increase in cost for children on the bus last April, saying that the cost of getting her two children to school had gone up by 50%. The weekly fare for both girls was £16 and it has risen to £24, or £96 per month, so she will have to find an extra £32 a month just for their transport. She said:

“What option do I have but to pay these amounts, this is the nearest school my girls can attend however it is too far for them to walk especially as it would involve crossing the busy A6 junction which has seen so many fatalities.

The other option is for me to drive them there and pick them up which in this day and age of trying to do our bit for the environment is very negative, plus it would mean taking away their independence which they gained since attending high school.

Surely the knock on effect will be that more parents will drive their children, congestion will increase and the bus company will see a reduction in people using their services which will ultimately see the service itself being cut due to lack of use….Working parents are feeling very stretched at the moment and all these extra costs seem very harsh.

I know many parents I have spoken to feel the same”.

Michelle contacted me in a similar vein, saying:

“As hard working parents who are really struggling to make ends meet in the current economic climate we don't qualify for any financial help from anyone, and there is a limit to how much we can afford to pay. I am aware that there such a thing as a Junior Saver Pass which can be bought weekly—but it would cost me even more to buy this pass than it will be to pay the increased bus fare! So, to put it bluntly, I am stuffed!!!

I wonder, are we going back to the dark times that Orwell wrote about not many miles away when many working families were living and working well below the breadline?”

Of course, it is not just children who face unaffordable increases in bus fares. First Bus will put up its fares this month by more than 7% and some providers are increasing fares by even more.

Let me turn finally to rail. UK rail fares are already the highest in Europe, with some season tickets costing a fifth of the average UK salary. We are forcing those who have cars to go back to driving, increasing congestion and carbon emissions, and forcing those who do not have cars into unemployment and isolation. The Secretary of State talks about the cost of our rail services but does not address the fundamental problems of botched privatisation in the first place. We clearly need to look at how we can reduce costs, but we should not do that at the expense of rail users.

I want to ask a final question: is public transport a public service? No public transport network in the world is not subsidised, but if the Government continue along the path of expecting the user to pay the full cost of any public transport service, people of ordinary means and the poor will be driven off public transport. Indeed, trains will become simply rich men’s toys.

15:55

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

It is a pleasure to speak in this debate. Paragraph 13 of the final McNulty report states quite clearly:

“Fares structures do not send efficient pricing signals, particularly in terms of managing peak demand, and are extremely complex.”

As a frequent user of the west coast main line I can only concur with that diagnosis, but what has struck me about today’s debate has been the lack of any praise for what the Government are doing to tackle it. I am not just talking about RPI plus 1 rather than RPI plus 3, or about the fact that we have more passengers on our railways than we did in the 1920s, but I find it strange that the Opposition find it difficult to recognise our investment, particularly in the north-west with the Ordsall chord, which is the first stage of the northern hub, and the electrification of the line to Blackpool—and that is before we get on to High Speed 2; I am told than those on both Front Benches are suffering a degree of HS2 fatigue.

I listened to the speech from the hon. Member for Garston and Halewood (Maria Eagle), the shadow Secretary of State, and I began to ask myself whether that was the new reality and the new approach for tough times or whether it was just about borrowing a bit more—the same old story and the same old solution—without saying where it would come from. That is not just a knockabout point, as it goes to the heart of transport policy. The previous Labour Government, rightly in my view, wanted to shift the burden of paying for our railways from the taxpayer to the fare-paying passenger, a policy that this Government are continuing. I am not quite sure I understand why the Labour Opposition do not want to continue with that approach. I began to get a bit confused. As I listened to the hon. Lady, I felt like I was watching a game of what I call policy Twister, where a Front-Bench team try to contort themselves into new poses to fit the leader’s latest re-launch. As someone who spent many years in an opposition front-bench team, I know what it feels like. I have been there, done that and bought the T-shirt.

I do not want to denigrate the hon. Lady’s proposals, as I thought that some of them made a lot of sense. For example, I have concerns about the digital divide and the availability of fares only online, and she was right to raise that. I feel, however, that in the wider debate we need a slightly more coherent understanding of what the McNulty review recommends. I am concerned that the debate seems to focus on what is said in the latest RMT or Transport Salaried Staffs Association press release. This is not just about ticket offices—and, by the by, I share many people’s concerns about the loss of ticket offices. We need to understand that McNulty goes much further than that.

Somewhere within rail policy, we must discuss where the burden lies and where the balance falls between the fare-paying passenger and the taxpayer. Given that McNulty called for a fare review and we are delivering a fare review at the end of the year, I am a little perplexed as to why the Opposition could not wait to see what is in the fare review. I am proud to serve on the Select Committee on Transport and I am looking forward to our cross-examination regarding the documents when they come forward. I have no doubt that we will find some flaws and will communicate those flaws to the Government in our usual courteous way, and that will be a good thing. Hon. Members have to recognise that there is a Command Paper coming out that will look at the structure of our railways and that there is a fare review coming out that will also address the issues.

The hon. Member for Garston and Halewood illustrated a useful point when she confirmed to me that one of her core beliefs is that the peak period should be the same in Euston as in Merseyside. I should think that would raise some very interesting problems. Anyone who uses the west coast main line, as I am sure she does to get back to Liverpool, must realise that at peak hours on a Friday the place is a hell hole. Passengers have to be put in cattle pens; it is not acceptable. Is she suggesting that we should reduce the standard national peak time? That would just cause that problem at Euston every day of the week and make it worse. Is she suggesting that we should have a much longer national peak hour? That would make it quite hard for many of our parents and neighbours who travel from Runcorn into Lime Street to do their shopping in Liverpool One to get there and back in a day on an off-peak ticket. That is an example of how the policies that the hon. Lady has suggested today have not really been thought through.

I would far rather that the hon. Lady recognised that the Government are taking relevant steps and are making a difference. They are bringing forward the fares review and the Command Paper on the structure of the rail industry that we need to see. I have a feeling that this debate might have been plonked on Opposition Members from above. I know that that happens sometimes—Members do not always choose to have a debate but might be told, “You’re having one.” They have done their best to cobble together a press release but I am afraid that although they get A-plus for effort, they get D-minus for homework. There is a debate to be had, but I am not sure that today’s debate was the one we wanted to be having.

16:01

[Heidi Alexander (Lewisham East) (Lab)]

Let me start by picking up on the last point that the hon. Member for Blackpool North and Cleveleys (Paul Maynard) made. He suggests that this debate was thrust on our Front Bench. Far from it; I believe that a number of Members desperately want to discuss this issue—[Hon. Members: “Where are they?”] Well, I am here and if hon. Members will grant me the courtesy of listening, I will tell them that my constituents e-mail and write to me on a weekly basis about this issue, and when I knock on their door they talk to me about the affordability of the railway. My constituents depend on the railway far more than most Members’ constituents, partly because there are not a huge number of locally based jobs in the area of Lewisham that I represent. Most of my constituents who work—70%—travel into central London, down to Croydon and out to Bromley using the railway, not the tube, and sometimes the bus to go about their daily life. The railway and the affordability of train fares are critical to my constituents. That is why we are having this debate today.

I was struck by the comments of the hon. Member for Milton Keynes South (Iain Stewart), who said that train fares have been increasing for a number of years. That certainly has been my experience as a London Member of Parliament, but the real difficulty this year is that the train fare increases are particularly hard to stomach given that they come on top of so many other increases in the cost of living, such as in utility bills and food. Constituents are coming to us and saying that their housing benefit is being reduced, and it is a real kick in the teeth when train and bus fares are being hiked by such considerable amounts this year.

[Iain Stewart]

The two issues that the hon. Lady has just mentioned are not separate points, because trains require energy to run on and if energy costs go up the operating costs of the railways also go up. One cannot simply differentiate those two issues.

[Heidi Alexander]

Energy was just one of the things that I mentioned. Most people would recognise that the cost of living is going up considerably. However, I agree with the hon. Gentleman when he says that, with fares going up, our constituents—the public—expect to see an improvement in service, getting some bang for their buck. When the trains roll into stations in my constituency, they are rammed full of people. This morning I tried to get on the 8.32 train from Lewisham and had to wait for the next one to come along. The previous Government put in place a number of measures to increase capacity on some of the suburban lines coming into London.

[Henry Smith (Crawley) (Con)]

Will the hon. Lady give way?

[Heidi Alexander]

I am afraid I will not give way; I have limited time. With the railways Minister present, I would like to make the point that that increase in capacity, lengthening trains to 12 cars, is incredibly important. Also, the new rolling stock on the suburban lines is critical. The new rolling stock has much more standing room, which my constituents are calling out for.

My problem with the increase in train fares is that it is making it much more difficult for my constituents to find work. A single man on low pay working in central London came to my surgery recently. He said that he was gravely worried about whether he could afford to get to work. If people are not able to stay in work or have to look for other jobs, that will add to the bill that the Government are paying out in jobseeker’s allowance. I have fundamental concerns about the impact of rising fares on people’s ability to stay in work. The Campaign for Better Transport has estimated that in London, if two parents are working and have two children in child care, that can swallow up 40% of the household’s income. Hundreds of pounds added each year to the cost of getting about in London will make a significant difference to household budgets.

Not only is it important that train fares are affordable so that people can go about their daily lives, get to work and stay in jobs, but everyone in the Chamber would recognise that ultimately we need to do more to get people on to public transport. The environmental benefits of getting people out of their cars, reducing congestion and pollution by getting them on to the trains and buses, are key. If people do not believe that public transport is affordable to them, we will not see the change in behaviour that all of us in the Chamber want.

In the few minutes remaining to me, I shall pick up on some of the remarks made earlier by the Secretary of State about the proposals put forward by Labour’s candidate for Mayor, Ken Livingstone, on fares policy. She suggested that in some way the 7% cut in fares that Ken Livingstone is promising for October this year would fundamentally destabilise Transport for London budgets. TfL has costed the proposal at £215 million. At present TfL works with an operating surplus of £727 million. It is possible and it can be done. That is why it is the right policy for Ken Livingstone to pursue.

I conclude by saying that it has always interested me that we view public money spent on roads as an investment, yet public money spent on railways as a subsidy. For me, the sooner that changes, the better.

16:08

[Lilian Greenwood (Nottingham South) (Lab)]

We have heard this afternoon exactly how the cost-of-living crisis is hitting households up and down the country. My hon. Friend the Member for Bolton West (Julie Hilling) described the devastating circumstances faced by some of her constituents. This debate is not about point scoring. It is about the lives of the people whom we represent—the people who went back to work after the Christmas holidays and suddenly found that they had to pay almost 11% more to catch the train. As my hon. Friend the Member for Pontypridd (Owen Smith) noted, passengers travelling from Cardiff to London face increases of 9.7%. My hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) highlighted the frightening cost of fares to and from the south-west.

As usual, there were plenty of warm words from the hon. Member for Cambridge (Dr Huppert), but I remind him that his party is part of this Government and their policy is to increase fares in this Parliament by RPI plus 3%.

[Dr Huppert]

Will the hon. Lady give way?

[Lilian Greenwood]

I will not give way at the moment.

We have heard about shoppers finding that they have less to spend when they get to the shops or the market because bus fares have gone up, about small businesses struggling with the high cost of petrol, and about mums and dads having to find more money from the family budget to help teenage sons and daughters pay to travel to college because they have lost their education maintenance allowance and the fare concessions they used to get have been cut. Parents are having to get the car out to take their children to school, even if they cannot really afford to, because school transport has been cut. As has been said, that does nothing to contribute to the green agenda.

The cost of living crisis is hitting hardest those who are least able to withstand it and is made worse by the decisions that the Government have made, which show that they are out of touch with the concerns of ordinary families. When so many people are struggling to pay their bills and make ends meet, only a Government who are completely out of touch with these concerns would allow inflation-busting increases in rail fares, yet that is exactly what this Government have done. They were forced to back down on their original plan to increase rail fares by inflation plus 3% this year, but passengers will still face those rises in January 2013 and January 2014.

When passengers heard the Chancellor’s autumn statement, they understandably expected that the most they would have to pay this year was an extra 1% above inflation, but they soon found that they were wrong, because the Government gave private train companies the right to increase some tickets by an additional 5%, something that Labour banned in government precisely because we understood the pressures commuters face in tough economic times.

[Alok Sharma]

At the start of the debate the hon. Member for Garston and Halewood (Maria Eagle) made a spending commitment to keep fares down. Will the hon. Lady tell us where the money for that would come from and, assuming she does not wish to increase the national debt, what she would cut to fund that commitment?

[Lilian Greenwood]

I am not making any spending commitments this afternoon. The real question needs to be addressed by the Minister, which she might do when summing up. She needs to address the point, made by the National Audit Office, that rather than protecting taxpayers or paying for the investment described by the hon. Member for Milton Keynes South (Iain Stewart), the flexibility will boost the profits of train operating companies. How will she tackle that?

As my hon. Friend the Member for Glasgow South (Mr Harris) rightly said, rail services flourished under Labour, with more services, more passengers and better punctuality than ever before. He also noted that Lord Adonis stood up to train operators and removed this flex. Lord Adonis stated in evidence to the Transport Committee:

“In a time of economic stringency I do not think it acceptable for individual commuters to face significantly above-average fare increases. The Government’s intention is, therefore, that in future the cap should apply to individual regulated fares, not just to the average of each fares basket.”

He said “in future” and nothing about it being for one year.

The Prime Minister might say that he wants to tackle crony capitalism, but actions speak louder than words. His Government have shown that they are on the side of private train operators, rather than passengers, letting them increase some fares by as much as 11% with no guarantee that the money will lead to a better deal for taxpayers. As I have said, the NAO has warned that that could simply result in higher profits for train companies. The Government also know how difficult it is for passengers to navigate their way around complex fare structures to find the cheapest tickets, but they will not rule out getting rid of the very ticket office staff who can help and advise people, particularly those who are unable to find the best offers online or by using a ticket machine.

If things are bad for rail users this January, bus users might say, “Look at the year we’ve already had.” The Transport Committee called the 2010 comprehensive spending review

“the greatest financial challenge for the English bus industry for a generation”.

Alongside rising fuel prices and a depressed economy, many bus operators have had no option but to raise fares, cut services or both. What have the Government done to help bus users, many of whom are among the least well-off in society? They have cut transport funding to local councils by 28%, a loss of £95 million in 2011-12 alone. They have changed the way in which the concessionary fares scheme is funded, taking a further £223 million away from local authorities in the past year, and they have decided to cut the bus service operators grant, the fuel rebate to bus companies, by 20% from April.

If we add those changes together, we find that the result is devastating. Fares are going up, one in five supported bus services has been scrapped and the Campaign for Better Transport has collected examples of more than 1,100 bus services that have already been lost in the English regions. Whole communities have been left isolated without access to public transport, and almost three quarters of local authorities have been forced to cut or to review school transport provision.

Older people, who are protected from fare rises, having benefited enormously from the free bus pass introduced by the previous Labour Government, are finding additional restrictions on when they can travel and, particularly in rural areas, that the service they relied on has disappeared. The Prime Minister may have promised to keep the free bus pass, but it is of little use if people have no local bus to travel on.

Time and again we see this Government choosing to implement policies that have a disproportionate impact on the very people who most need to be protected in harsh economic times: older people and disabled people, who often do not have the choice to use a car; and the unemployed, who are already paying the price of this Government's economic failure. Some 64% of those seeking work do not have a access to a car, so they rely on buses to get to interviews and jobs. As my hon. Friend the Member for Lewisham East (Heidi Alexander) said, how will they access job opportunities or stay in work without public transport and how can work pay if travel to work is not affordable?

We heard about young people, 72% of whom rely on buses to get to college and to give them independence. They are already struggling without their education maintenance allowance, or are facing a threefold increase in tuition fees, so it is little wonder that colleges report a fall in admissions, and that the UK Youth Parliament made cheaper, fairer and more accessible public transport its No. 1 issue for 2012.

For the one in 10 people in rural areas who do not have access to a private car, a bus is essential to get to the nearest shop, doctor or post office—not that car users have done much better. For all the Government’s talk of fuel stabilisers in opposition, one of their first acts was to increase VAT to 20%—immediately putting petrol prices up by 3p a litre and adding an extra £1.35 to the cost of filling up the average car.

The Government claim that those changes are all in the name of deficit reduction and that there is no alternative. That is not so. What is required is the determination to stand up to vested interests and to powerful lobby groups. We have already set out how we would ease the pressure on households from the rising costs of transport—not by increasing spending, but by banning private train companies from averaging out the cap on fare rises. That would mean a maximum increase of inflation plus 1% this year, not increases of up to 11%.

My hon. Friend the Member for Garston and Halewood (Maria Eagle) also set out how we are considering other options to ensure that passengers are protected from unfair pricing, including a single definition of peak and off-peak; a right to the cheapest ticket; a right to a single price for the same ticket; a more flexible way of changing one’s travel plans; and a right to a discount when a rail replacement bus service is put on.

Labour’s policy review is looking at all options for reforming the structure of Britain’s rail industry. We need root-and-branch reform of its costly fragmented structure, and we need a better deal for taxpayers and passengers. We also want to devolve more transport responsibilities, so that more decisions are made locally by integrated transport authorities with powers to deliver local bus services in a way that best suits each community, ensuring that the needs of local people are met and that fares are affordable. For young people who are aged 16 to 18 and in education, we want to see a concessionary fares scheme delivered by the major bus companies in return for the subsidies that they have received.

In the transport spending review, the Government recognised:

“Transport provides the crucial links that allow people and businesses to prosper”.

Well, people and businesses are suffering as a result of their poor decisions. Yesterday, we, like the hon. Member for Fylde (Mark Menzies), welcomed the good news about High Speed 2 and the Government’s commitment to long-term investment in our infrastructure, but they must face up to the here and now. They need to listen to passengers and start taking action to tackle the quiet crisis facing people the length and breadth of this country.

16:19

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

Time is too short to refer to every contribution to today’s debate, but I welcome all those that have been made.

The hon. Member for Glasgow South (Mr Harris) criticised a fares system that he presided over as rail Minister. My hon. Friend the Member for Wimbledon (Stephen Hammond), along with many others, pointed out that RPI plus 1 and above-inflation fare increases were introduced under the Labour Government and did not start under the coalition.

The hon. Member for Pontypridd (Owen Smith) commented on the Government’s continuation of a major investment programme and called for a simpler ticketing system. My hon. Friend the Member for Cambridge (Dr Huppert) also welcomed our commitment to a programme of rail improvements that is probably the biggest since the Victorian era. He welcomed the fact that we had been able to prioritise it despite the deficit because of the difficult decisions that we have made in other areas. My hon. Friend the Member for Milton Keynes South (Iain Stewart) welcomed the progress on East West Rail and made some important points about how fares operate.

The hon. Member for Bolton West (Julie Hilling) made a moving speech about the hardship that her constituents are feeling. As for buses, we are of course doing all that we can within the constraints of the fiscal straitjacket created by the deficit that we were left by Labour. Within those constraints we are of course striving to help those who are facing hardship with the cost of living.

My hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) pointed out the impracticalities of having a single uniform peak throughout the country and that the Opposition transport team appear not to have read the speeches made by their leader or the shadow Chancellor. I particularly liked my hon. Friend’s reference to the game of policy Twister that they have unfortunately had to play today.

The hon. Member for Lewisham East (Heidi Alexander) commented on the concern about the effect of inflation and fare rises. That is exactly the concern that the Chancellor responded to in his autumn statement in putting the limit on the average rise in national rail, tube and bus fares at RPI plus 1. That help for people struggling with the cost of living was welcomed by my hon. Friends the Members for Fylde (Mark Menzies), for Cambridge and for Milton Keynes South. We ought to pay tribute to the Secretary of State for her role in that. We were able to do that at the same time as delivering a major investment programme only because of savings made elsewhere in government to tackle the deficit—the kind of spending reductions that Labour has consistently opposed.

[Mr Tom Harris]

“Many families are feeling the pinch because of stratospheric fare increases—racing ahead of inflation—inflicted by the Department.”—[Official Report, 24 July 2007; Vol. 463, c. 691.] Those are not my words, but those of the Minister in this House. Can she point out any improvements that have been made since then?

[Mrs Villiers]

The former rail Minister has made my point for me. The Opposition must be suffering from collective amnesia if they think that this problem suddenly appeared in May 2010 when the coalition took over. In 2006, a Labour-dominated Select Committee described the Labour Government as “breathtakingly complacent” on value for money in fares. The truth is that concern about rail fares has been growing for years, as my hon. Friends the Members for Bexleyheath and Crayford (Mr Evennett), for St Albans (Mrs Main) and for Milton Keynes South have said.

A major reason for the increases is that under Labour the cost of running the railways spiralled and hard-pressed passengers and taxpayers were left to foot the bill. It is fair that passengers contribute to the cost of running the railways and to the massive programme of upgrades that we are taking forward, but neither fare payers nor taxpayers should have to pay for industry inefficiency. This Government understand how vital it is to get the cost of running the railways down and to tackle the legacy of inefficiency that we inherited from Labour. That is the long-term, sustainable solution to delivering better value for money for taxpayers and fare payers.

[Lilian Greenwood]

The point that we are seeking to make is that when the Government say that fares will go up by inflation plus 1%, that is what they should go up by, not by up to 11%, which is what many people face this year as a result of the Government’s decisions.

[Mrs Villiers]

The hon. Lady need not worry as I will come on to the fares basket in a moment. Before I do, it is crucial to say that we are determined to deliver our goal of ending the era of above-inflation fare rises. The only long-term, sustainable solution to delivering better value for money for taxpayers and fare payers is to get the cost of running the railways down, not the short-term, uncosted, poorly thought-through proposals that we have heard from the hon. Member for Garston and Halewood (Maria Eagle) this afternoon.

We have started reform already, with the reform of the franchising system and our commitment to further electrification to reduce costs. We are also determined to see the rail industry working together better, with a strong shared incentive to reduce costs and deliver better outcomes for passengers.

Another key plank of getting the cost of the railways down is making working practices on the railways more efficient. When Labour was in charge, pay in the rail sector rose more than twice as fast as it did in the economy more widely. Difficult decisions may lie ahead, and I do not believe Labour is capable of taking those decisions where the interests of the unions conflict with the goal of getting better value for money for passengers.

[Mr Tom Harris]

Will the Minister give way?

[Mrs Villiers]

No.

Labour failed to deal with the problem in government, and its heavy dependence on union funding would make it utterly incapable of dealing with it if the country were unwise enough to return a Labour Government. If the Opposition were really serious about getting better value for money for passengers, they would not be making glib announcements in the House; they would be remonstrating with their friends in the rail unions about a responsible approach to pay, from the boardroom to the platform.

I turn now to the fares basket and the flat cap on prices. Frankly, the shadow Secretary of State was in all sorts of trouble on the matter. The claim made by her and the Leader of the Opposition that the suspension of the cap was an ongoing policy, representing a dramatic change of heart by Lord Adonis, is simply not borne out by the facts of what Lord Adonis did in government.

[Mr Harris]

Will the Minister give way?

[Mrs Villiers]

No. The hon. Gentleman did not do anything about the flat cap in his entire time as a rail Minister, so I will not take his intervention on the matter.

Lord Adonis inserted in the franchise contracts a one-year suspension of the flat cap. That conflicts with what the shadow Secretary of State said today.

[Mr Harris]

I promise it is the last time, but will the Minister give way?

[Mrs Villiers]

No.

More important, the shadow Secretary of State has given us no indication of just how much it would cost to repeal the fares basket provision. Amazingly, she did not even seem to understand that it would have a cost. I can assure her that it would. She has given no credible explanation of how Labour would pay for the change, and whether it would come from higher fares, higher taxes, cuts in services, the cancelling of extra carriages or upgrades or more borrowing.

Just one day after the Leader of the Opposition finally acknowledged that dealing with Labour’s deficit means that there is no more money left to spend and said that the Opposition would take a more responsible approach, the shadow Secretary of State stood at the Dispatch Box making spending commitment after spending commitment on rail fares, concessionary bus travel, local government funding, school transport, VAT—the list goes on and on. She and the shadow Minister, the hon. Member for Nottingham South (Lilian Greenwood), made several billion pounds of commitments today.

The truth is that when it comes to the cost of living and the economy, Labour just does not get it. It must be just about the only political party in the world arguing that the way to get out of a debt crisis is by borrowing more money. Whether it is a credit card bill or the international gilts market, that simply does not work. There is no way that interest rates could have stayed at today’s low levels without the action that we have taken to deal with the deficit and avert the crisis enveloping other European countries with public finance positions almost as bad as ours.

In government, Labour brought this country to the brink of bankruptcy, leaving Britain with one of the biggest structural deficits in the developed world. Today’s debate demonstrates that, contrary to what the Leader of the Opposition said, Labour has learned nothing in opposition. The biggest threat to the cost of living in this country is the spiralling interest rates that we would get if we gave way to the demands that Labour makes every single day in the House for more and more spending.

It is clear that if Labour had won the last election—thankfully it did not—it would have utterly failed to take the tough decisions needed to get the deficit under control. That would have had disastrous consequences for the cost of living for millions of families right across the nation. I urge the House to reject the motion.

Question put.

16:29

Division 420

Ayes: 251

---

Labour: 234
Democratic Unionist Party: 5
Scottish National Party: 5
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1
Independent: 1

Noes: 319

---

Conservative: 271
Liberal Democrat: 46

Energy Prices

Wednesday 11th January 2012 Commons Chamber

[Relevant documents: The Fourth Report from the Energy and Climate Change Committee on Electricity Market Reform, HC 742, and the Government’s response thereto (Sixth Special Report, HC 1448), and the Sixth Report from the Committee on Ofgem’s Retail Market Review, HC 1046, and the Government’s response thereto (Eighth Special Report, HC 1544.]

16:44

[Caroline Flint (Don Valley) (Lab)]

I beg to move,

That this House believes that soaring energy bills are driving up inflation, contributing to a cost of living crisis afflicting millions of families, and that the energy market is not serving the public interest; notes the motion passed by this House on 19 October 2011 calling on the Government to investigate mis-selling, simplify tariffs, increase transparency of trading data, require energy companies to use their profits to help with bills this winter and reform the energy market to increase competition and drive down energy bills; regrets that since then the Government has failed to deliver on any of these measures; further notes that consumer efforts to control their energy bills have been undermined by cuts to the Feed-in Tariff and Warm Front scheme, and that there are serious concerns about whether the Green Deal will be taken up by, and work for, consumers; notes that over 90 per cent. of eligible families will not receive the Warm Homes Discount in 2012; calls on the Government to require energy companies to provide the lowest tariff to over 75s and use their profits to ensure that all families eligible for Cold Weather Payments receive the Warm Homes Discount; and further calls on the Government to reform the energy market to make it competitive and responsible, to cut VAT on home improvements to 5 per cent. for 12 months and to ensure that the Green Deal is offered on fair terms to consumers which will deliver real savings in energy bills.

May I wish you a happy new year, Mr Deputy Speaker?

Less than three months ago, the Opposition warned that soaring energy bills were driving up inflation, squeezing household budgets and contributing to the cost of living crisis afflicting millions of families. We warned, too, that trust in the energy sector had fallen to dangerously low levels as people grew sick and tired of the energy companies’ sharp practices. We set out a clear plan to provide real help now, as well as to reform the way in which our energy market works. We called on the Government to investigate the scandal of mis-selling, and to ensure that people were properly compensated. We also urged them to simplify tariffs, in order to put an end to the disgrace of four out of five families paying more for their energy than they needed to. We asked for more transparency on energy companies’ trading data, so that the public could see for themselves how much the companies were paying for their energy, as well as how much they were charging for it. We argued for a radical overhaul of the way in which our energy market was structured, to break the dominance of the big six and increase competition in order to drive down bills for families and businesses. We also called on the Government to make the energy companies use their record profits to help people with their bills this winter.

The Government did something unusual—so unusual that the Government Whip on the Front Bench at the time seemed surprised by it. They backed our motion. They agreed to support our plans. Indeed, commenting on the Labour motion, the Secretary of State said that

“there is nothing we disagree with”.

He went on to say that

“sympathy from the sidelines is not enough. It is our responsibility to do everything we can to help.”—[Official Report, 19 October 2011; Vol. 533, c. 944.]

Today, however, the scale of the Government’s failure is clear. More families are in fuel poverty and struggling to heat their homes. Consumer Focus says that a quarter of all households in England and Wales—5.7 million in all—are now in fuel poverty. National Energy Action fears that the figure could be as high as 6.6 million. These are levels not seen since the dog days of the last Conservative Government. The number of households in debt to their electricity and gas suppliers is up, too, but energy companies’ profit margins are still in excess of £100 per customer per year.

[Alok Sharma (Reading West) (Con)]

It is all very well for the right hon. Lady to lecture the Government, but in the last six years of the Labour Government, the number of households in fuel poverty rose by 2.8 million. Is she proud of that record?

[Caroline Flint]

I am proud of the fact that, by the time we left government, there were 1 million fewer people in fuel poverty. That included 500,000 in the most vulnerable households. The fact is that we took measures to tackle fuel poverty. Is there more to do? Yes. But what is happening now is that the figures are going up and, as I will demonstrate, this Government are not helping; they are hurting.

Confidence in the energy companies is at a near record low. Less than half of the public are satisfied with their energy supplier, yet energy company bosses have awarded themselves huge pay rises and bumper bonuses totalling millions of pounds. Complaints to the energy companies have soared, often over dodgy tariffs or incorrect billing or meter readings. There have been 4 million complaints in the past year alone, and the figure has gone up by 26% in the last three months. Today’s Which? report shows that one in five customers who have had problems with their energy supplier did not even make a complaint, and that nine out of 10 complaints are unresolved and never make it to the energy ombudsman. As much as £4 million in compensation is going unclaimed. There are real concerns about whether the watchdogs, the consumer groups, and organisations such as the energy ombudsman and Ofgem have the powers that they need to protect the public. We need to think clearly about the kind of infrastructure that is needed to ensure that those organisations do their job.

Time and again, we see a Government who are not just out of touch but completely unable to stand up to vested interests in the energy industry. Far from doing everything they can to help, this Government are making things worse, not better, for millions of hard-working families. Their failing economic policies mean that the average family faces the worst squeeze on income since records began in the 1950s, with families and children hardest hit.

What, then, are the Government doing to help people? What have they done for pensioners forced to choose this winter between heating their homes and having a hot meal? They have cut the winter fuel allowance, despite promising not to. We have been honest that under a future Labour Government that might be something that we cannot reverse, but let us be clear about the facts. Before the election, we warned that the Conservatives wanted to cut the winter fuel allowance. In response, the Prime Minister said:

“We would keep the winter fuel allowance. Let me take this opportunity to say very clearly, to any pensioner who is watching this or reading any of these reports, I know that you are getting letters from the Labour party saying the Conservatives would cut the winter fuel allowance…Those statements from Labour are quite simply lies.”

Our 12.7 million pensioners now know that we were not lying.

The Government, however, have tried to change the story. Now they like to say that the decision had already been taken by the last Government. Even today, the Prime Minister repeated that allegation. It is simply not true. When Labour left office, the decision had not yet been taken. It was perfectly within the Government’s power to continue with the extra payment, as Labour Chancellors had in previous years, but they chose not to. This Government took the decision in last year’s Budget—and they should take responsibility for it.

[Several hon. Members]

rose—

[Caroline Flint]

The difference between Labour Members and Government Members is that we do not just give up; we look to find other ways to help pensioners with their fuel bills. Nobody should have to pay more for their energy bills than they need to. This is especially important for pensioners over 75 who are more susceptible to the cold and least able to take advantage of online deals. That is why my right hon. Friend the Leader of the Opposition announced yesterday that, to start with, we would ensure that all pensioners over 75 got the lowest tariff on offer, saving them up to £200 a year—on the Government’s figures, not ours. There might be less money around, but for those 4 million pensioners, Labour can still deliver fairness in these tough times—not by spending more money, but by saying to the big six energy companies that, at a time when people are struggling yet they are enjoying strong profits, they must act in a way that is responsible and fair to the public.

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

Does the shadow Secretary of State agree that whatever the situation with the winter fuel allowance, one thing that would have put a lot more money into pensioners’ pockets is the restoration of the link between pensions and earnings—something Labour promised in 1997. They failed to deliver that yet we delivered in our first Budget, which will bring about a record rise in pensions this year?

[Caroline Flint]

One of the first actions taken by the Labour Government after winning in 1997 was to look at the situation of the poorest pensioners in our country, many of whom were women who had never been able to earn enough to have a second pension. We had priorities in respect of what we were going to achieve—pension credit, the winter fuel payment, other support through the Warm Front scheme: we did more for pensioners than any Government for generations. What is happening is that we are now going backwards, not forwards.

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

Does my right hon. Friend agree that it is not what people say, but what they do? The last Labour Government took pensioners and families out of poverty, while introducing help and assistance for fuel costs. This Government have cut fuel cost assistance and are putting more people into poverty. Is that not the difference—not what we say, but what we do?

[Caroline Flint]

My hon. Friend is absolutely right: actions speak louder than words. The actions going on at the moment mean that the number of people in fuel poverty is going up and there is less support coming forward to help the most vulnerable. We are heading for a car crash when the Warm Front scheme ends and we wait to see whether the green deal will happen in a way that will help people. I shall say a little more about that later, and I am sure my hon. Friends will want to make some points about it in their contributions.

Let us talk about helping low-income families with their energy bills. The Secretary of State likes to boast about the warm home discount scheme. He says it is a statutory scheme and that Labour had only voluntary agreements—never mind that those voluntary agreements secured £375 million to help almost 1.6 million households with their energy bills over three years. What the Secretary of State forgets to say is that the present scheme exists only because Labour legislated for it when we were in office. When the present Government decided to take it on, we warned that, on the basis of their plans, they could exclude hundreds of thousands of people from the help that they needed.

In Committee, my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) said

“there are concerns about the make-up of the broader group and the discretion given to energy companies to fund it.”

She asked for assurances

“that the Government will evaluate how effective the discretionary nature of the broader group will be and, if necessary, take steps to expand the core group if households are falling through the gap”.—[Official Report, Third Delegated Legislation Committee, 28 March 2011; c. 6.]

The Government did not heed those warnings, and, as research by Save the Children revealed last week, only 3% of families who are eligible for help from the warm home discount scheme will receive the support to which they are entitled this year.

The Secretary of State may try to tell us that more people will be helped as the scheme develops, but those families need help now, not in three or four years’ time. This is not about spending more money or adding to customers’ bills; it is about standing up to vested interests in the sector, and telling them that they have a responsibility to their customers and to the public.

The Government are not only cutting help for people in need, however. They are also hitting families who want to do their bit—who want to do the right thing, to have more control over their energy bills, and to make their homes more energy-efficient. The Government’s disastrous and chaotic cuts in the feed-in tariff for solar power will be back in court on Friday. In defence of their plans, Ministers have been forced to resort to ever more outlandish claims about how much it is costing the public. First it was £26 a year, then it was £40, then it was £80. The actual figure—what it is really costing consumers—is just 21p per household per year, compared with average bills in excess of £1,300. What the Government do not seem to understand is that one of the reasons why so many people, especially pensioners, chose to install solar was the fact that it enabled them to control their energy use and cut their bills.

[Guy Opperman (Hexham) (Con)]

Today the Select Committee on Energy and Climate Change heard some of my constituents give evidence on the issue of off-grid energy. May I ask a simple question? Is the Opposition’s policy to regulate it—yes or no?

[Caroline Flint]

We have had a number of debates on the subject. One of the problems with off-grid energy is that some of the schemes that the Government are coming up with do not help the people who are affected by it. I shall say more about that later in the context of the green deal. There are real questions about who will be excluded, but we are talking today about energy prices, and about what we can do to make the market more competitive and responsible.

I look forward greatly to learning what the Select Committee has discussed in relation to off-grid energy, and will think about some of its recommendations. We will make up our own minds about what we should do, but I acknowledge that there is a problem. During the three months for which I have had my present job, it has arisen many times in debates. I also acknowledge that there are insulation problems for many people in rural communities whose homes have solid walls. I am afraid that I cannot give the hon. Gentleman chapter and verse today, but he can be reassured that the issue is on my radar.

[Barry Gardiner (Brent North) (Lab)]

The witnesses who gave evidence to the Select Committee made it clear that the statutory protections that exist under the licences for mains gas or electricity supply do not exist for off-grid gas customers, who are the vulnerable customers. Will my right hon. Friend at least consider committing the Opposition to regulation if the code of practice that the industry is seeking to introduce on a voluntary basis is inadequate to secure such protections for those customers?

[Caroline Flint]

I feel that the time has come for us to take stock of our position. The first line of the motion refers to an energy sector that works in the public interest. That does mean that we can still support competition, and I think there should be more competition in the sector. For all types of energy—on-grid and off-grid—it is time that we had another look at what is happening in the market. For me, energy is not like buying a phone or a car; rather, it is essential to life, and therefore a higher order of accountability is required. I will be very happy to look at the issues raised by the Committee. Select Committees are useful for the Opposition as well as the Government. I will be very happy to talk to my hon. Friend and to the hon. Member for Hexham (Guy Opperman) and to see what the Select Committee comes up with, but I think the time for standing by has passed.

[Robert Flello (Stoke-on-Trent South) (Lab)]

In Blurton in my constituency, there was the fantastic sight of houses having photovoltaic panels erected on their roofs, but the project that E.ON had with Stoke-on-Trent city council covering thousands of houses across the city has now been cut short. E.ON said to me that it understands why the Government were looking at the issues of feed-in tariffs and the cost, but it cannot understand why it was given six weeks to complete projects that were going to take five weeks to bring in.

[Caroline Flint]

It is always very helpful to hear of real examples. We have listened to many smaller businesses in this sector of course, but even the big six energy companies have concerns about the way the Government have gone about changing the rules on solar. Sadly, about 100,000 social homes may not get solar in the future because of these changes. We all agree that the tariff should come down, but, aside from that point, if the Government’s plans go ahead, people will only be able to have solar if their home is a category C residence in terms of efficiency, and therefore about nine out of 10 homes in England will no longer have the option of having solar even under the changed rules and tariff. This is another example of bad management of a project that was clearly popular among the public and that has created jobs—the sector is one of the few that has experienced growth.

In the long run, we know that the most sustainable way for people to cut their bills is for them to use less energy.

“Energy efficiency is a no-brainer because it makes homes warmer and cheaper to run.”

Those are not my words; they are the words of the Secretary of State from back in September, but what has actually happened on his watch? The number of families getting help to insulate their homes or make them more energy efficient has plummeted.

Let us take the month of April as a point of comparison. In April 2010, the month before the general election, more than 15,000 households got insulation measures through Warm Front. In April 2011, just six households got insulation through Warm Front—not 6,000, 600 or even 60, but just six. The Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), has said that this year he expects 50,000 households to get help with insulation through Warm Front, but so far fewer than 15,000 properties have been helped—not even a third of what the Minister promised. On the current trend, fewer than 20,000 households will get help with insulation this year, a fall of more than 90% on what we delivered in our last year in office.

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

Unfortunately, the right hon. Lady is making completely the wrong point. Warm Front does not deliver insulation; it introduces heating systems for people who do not have heating systems. Insulation is primarily the responsibility of CERT, the carbon emissions reduction target, and CESP, the community energy saving programme. Warm Front is not primarily an insulation programme. Perhaps she would like to try again.

[Caroline Flint]

Well, I have to say that some of my constituents have had help with things such as boilers, heating and also insulation.

[Robert Flello]

I am deeply troubled by the Minister’s intervention. If he visits my constituency, I will take him to houses that have had loft insulation put in through the Warm Front scheme, and to properties that have had replacement boiler systems fitted, not systems fitted for the first time. That is not the point he made a moment ago, as he will see if he checks Hansard.

[Caroline Flint]

The truth is that the Government are not on the same planet as most of the rest of us.

What the Minister did not answer is why the number of homes being fitted with insulation went down from 15,000 to six within a year. That is the question the Government should answer today. Let us be clear: when Warm Front is finally abolished next year, this will be the first Administration since the 1970s not to have a Government-funded energy efficiency programme in place. That is disgraceful. But, it is okay, because they say, “Don’t worry, we’ve got the green deal.” However, real questions have to be addressed about whether the green deal will be offered on fair terms and will actually deliver real energy bill savings, and whether it will really work for the public.

Let us start with the interest rates. Time and again, Ministers have been asked what sort of finance will be available to households interested in taking up the green deal. Time and again, they have failed to provide a straight answer. The reality is that if the level of interest is too high, given all the other pressures that families face at the moment, they will just not be interested in taking it up. Polling conducted by the Great British Refurb Campaign found that only 7% of home owners would be interested in taking up the green deal if the interest rate was 6% or more. However, we are hearing that the rate could be as high as 8% or 10%, so I ask the Secretary of State again today whether he can assure us that the green deal will be offered on fair terms and at a fair rate to the public.

In the autumn statement, the Chancellor also announced £200 million to provide incentives for the green deal. We still do not know what that money will be spent on or how it will encourage take-up. Most important of all, the fundamental idea behind the green deal—the “golden rule”, as the Government like to call it—is that the savings from better energy efficiency should cover the costs of the green deal. That is the promise being made to the public, but on looking at the small print, it is clear that the golden rule is not so golden after all. There is no guarantee that bills will not be higher after the green deal. If there is no guarantee, there is a real concern about the potential for mis-selling. The danger of what might happen out there is obvious: people will say, “We’re a Government-backed scheme—we promise you this”, but down the road they will not deliver. This measure will not balance out the costs that people are having to pay. In the light of stories about people not saving money or unwittingly inheriting higher energy bills after buying a green deal property, any credibility the scheme had will be shot to pieces.

[Tessa Munt (Wells) (LD)]

Will the right hon. Lady consider the fact that after a green deal installation, people might find themselves in a home that is at least warm, even if their bill is the same? They might not have saved any money, but they will for the first time be warm in their homes.

[Caroline Flint]

The warmth issue is not really part of the equation. The question of what this measure should mean has been discussed in Committee. The “golden rule” is about people saving money. With all due respect to the hon. Lady, the problem is that the scheme should be far further forward than it is. We already know from what has happened with solar that a number of businesses doubt whether they are going to enter the field to work within the green deal. For example, those involved in insulation are worried about the measure’s impact on the work they do, an issue I will say a little more about later.

So many questions have been left unanswered, and any Government scheme that allows anyone to go out and say that they are Government-backed has to stand up to scrutiny. We have to make sure, first, that the public are not priced out of taking part, but we must also ensure that they do not become the victims of cowboys involved in the scheme.

[Several hon. Members]

rose—

[Caroline Flint]

I am going to make a bit of progress. The Department of Energy and Climate Change website actually states:

“The Warm Front scheme provides heating and insulation improvements to households on certain income-related benefits”,

and it goes on to refer to grants for loft insulation and draught-proofing—I rest my case.

Perhaps the Government will also respond to firms, such as those I have met, undertaking cavity wall insulation, which provide a sensible, professional product under the carbon emissions reduction target—CERT—scheme. Some 6 million homes have cavity walls without insulation, and 10 million lofts do not have insulation. That provides enough work for a whole industry to do—work that is good both for the public and for the environment. However, I understand that, under Government proposals, if this work is to be undertaken under the green deal, a full assessment of the property will have to be made—the householder’s lifestyle and behaviour will be included in this. The assessment sounds as if it will have to be paid for by the consumer, yet the work that they wish to have done may be blindingly obvious. I hope that the Government will ensure that the public and businesses are still able to improve the energy-efficiency of homes without being forced through a bureaucratic and unnecessarily costly process.

With the end of the Warm Front scheme, and of the community energy saving programme and CERT, what will happen to families in fuel poverty, or in hard-to-treat homes, for whom the green deal might not be suitable? The Government’s solution is the energy company obligation—ECO—but only a quarter of the money from ECO will help households in fuel poverty; the rest will go to able-to-pay households. So the Government’s promise that ECO will do more to tackle fuel poverty than either CERT or the Warm Front scheme just does not stack up. In what way is ECO’s £325 million a year for fuel-poor homes greater than last year’s Warm Front budget of £370 million or the CERT spending of nearly £600 million on priority groups?

We know that as well as coming up with policies, even in these tough times, to help families with spiralling energy bills now, we must also reform the energy industry to secure a new bargain in the future. I have said it before and I am going to say it again: to start with we have to deal with the sheer number and complexity of tariffs on offer. We have 400 tariffs, with about 70 new ones in the past year. They are confusing and unfair, and they must be reformed. At his infamous energy summit in the autumn, the Secretary of State implored people to switch. Perhaps he could tell us today exactly how many people took his advice and switched, and how much they have saved. The problem is not that people are not shopping around enough; the real problem is that there are too many tariffs on offer, that they are too complicated to understand and that even when people do switch, they do not always get a better deal.

[Mr Watts]

Does my right hon. Friend agree that it is clear that the energy companies have made the tariff system as complicated as they can? Is it not a fact that even when people do switch and take the Prime Minister’s advice, they often find that they get a worse deal than the one they started with?

[Caroline Flint]

I am afraid that that is the case. I have met a number of the energy companies over the past few months and they are obviously hurting as a result of the public criticism being directed their way. However, when we examine today’s Which? report, we find that 4 million people complained in the past year and that the number of complaints rose by 26% in the past three months, so something is seriously not right. The real problem is that there are too many tariffs on offer. Having more than 400 tariffs is not about competition or choice, and it does not serve the public interest; it serves only the interests of the energy companies. So we need, as we have said before, a simple new tariff structure that is clearer and fairer, and that will help all customers to get a better deal. I know that consultations are going on at the moment, but the Government really need to step up the pressure. We should not be unable to knock a few heads together, and we need to do that sooner rather than later. We must keep the pressure on as that is the only way to make the companies change. The Which? report has highlighted the terrible situation with bills that were overestimated or incorrect as well as the mis-selling that went on in the past. We need a proper investigation and proper compensation for people who have been ripped off. Only then will we start to rebuild trust in our energy companies.

As well as a more responsive energy industry, we need a more competitive energy market. The energy market is dominated by just six firms that supply more than 99% of electricity and gas. Today we heard that EDF will cut its gas prices by 5%, but the public will ask why energy companies are still so quick to put up people’s bills when wholesale prices go up but slow to bring them down when they fall as well as when the other big energy companies will follow suit.

[David Mowat (Warrington South) (Con)]

I have in front of me a copy from the EU website of the gas prices for every country in Europe and it would appear that the UK has the fourth lowest gas price of the 27. What is the right hon. Lady’s analysis of why that has happened?

[Caroline Flint]

First, that is not about the point I was making, but is the hon. Gentleman defending the way in which prices have soared in the past year? Is he defending the companies’ atrocious record in dealing with people’s complaints? I would not stand in his shoes and make that case. The truth is that prices need to be transparent and we need to know how they are arrived at. It is quite clear—it has been proved by an Ofgem report and the Secretary of State might back me up on this point—that there is evidence that when prices go up the bills go up far quicker than they come down when prices fall.

[David Mowat]

Will the right hon. Lady give way on that point?

[Caroline Flint]

No, I will not give way to the hon. Gentleman again.

The bigger issue is how we carry out a root-and-branch reform of the energy market for the future.

[Mr Mike Weir (Angus) (SNP)]

I thank the shadow Secretary of State for giving way, and she is making a very good point. Rather than asking EDF why it is reducing the price by 5%, should we not be asking why it is doing so two months after putting it up by 15%?

[Caroline Flint]

It was actually 15.4%, but I do not want to be churlish. I am pleased that the prices have come down, but part of what we are seeing from the energy companies is due to the fact that they are starting to smart from the criticism levelled at them. The problem is getting worse and, as I have said, complaints have gone up and prices, which went up steadily over the past few years, have soared in the past year. We are not the establishment—the Government are, they are in the driving seat and they have the tools to do something about it. I only wish they would.

We must ask the fundamental questions, and the fundamental problem in defining whether prices are reasonable and fair and considering the other pressures on those prices is the fact that we are hampered by the lack of transparency in the market. The energy companies that generate energy sell it on to themselves and then on to customers. If the few big dominant firms were forced to sell the power they generate to any retailer, companies such as supermarkets and other independent retailers—like Good Energy, which came top of the poll for customer service in the Which? report—could play more of a role in the market. There would then be more competition and the upward pressure on prices would be eased.

Times are tough, we all know that, and we know that it means difficult decisions must be made. When times are tough, fairness is our first priority but, unfortunately, for the Government fairness is the first casualty. Millions of families and pensioners across the country are struggling with their energy bills and a cost of living crisis, but the Government are so out of touch that they are making things worse rather than better. They are cutting the help people get with their energy bills and scaling back on energy efficiency. By failing to stand up to the energy companies, they are letting down the public. We know that people need real help now and a more responsible and competitive energy market for the future. For those reasons, I commend the motion to the House.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The wind-ups will start at about 6.40 pm. As hon. Members can see from the clock, we do not have a lot of time for the debate so if people could have in their mind a five-minute limit and aim to make a four-minute speech we will be able to accommodate more Members. Brevity has to be the order of the day.

17:20

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

Thank you, Mr Deputy Speaker. I shall try to take on board your injunction for brevity.

Last year, we saw a big energy price rise, which came on top of increasing petrol and food costs. With the cost of gas imports now falling, I welcome today’s announcement from EDF, which has responded to the smaller companies leading the way such as Co-op and Ovo by joining them in cutting domestic gas prices. Some of the big energy suppliers were quick to pass on rising costs last year and it is only right that they should now pass on cost reductions to hard-pressed householders as quickly as possible. I urge the remaining five large energy suppliers to follow suit and give consumers some respite this winter. If suppliers do not reduce prices, consumers can send them a clear message by voting with their feet and taking their business elsewhere.

[Mr Watts]

On that point, has the Secretary of State contacted those energy companies and made it absolutely clear that if they do not drop their prices, he will take action to force them to do so?

[Chris Huhne]

I have been very rapid in my reaction to the EDF announcement and I have been pressing the energy companies and saying that they need to act to inform their customers about the cheapest tariffs.

The House last debated this topic in October, when I said that simply expressing concern and sympathy for those who are struggling to pay their bills is not enough. It is our responsibility to do everything we can to help. The clear steps we have taken to increase competition are working and it is right that energy companies should feel the pressure to keep bills down. We are not complacent and I can report that the action I promised then to help people with their bills is taking place now.

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

In the objectives that the right hon. Gentleman has set for himself and no doubt for the Government he makes the point about keeping energy prices down. Is he satisfied that Ofgem, the regulator, is exercising the powers that it has? Are those powers insufficient?

[Chris Huhne]

I am grateful to the right hon. Gentleman for raising that issue, which I shall address in greater detail. Ofgem is working closely with us on this and I think it is tackling many of these issues. I will give further detail on that.

Following the consumer energy summit, at which my right hon. Friend the Prime Minister and I brought energy suppliers, consumer groups and Ofgem together, we have been working together to make sure that consumers know about the help that is available and about how they can cut their energy bills this winter. In October the Government launched the “Check, switch, insulate to save” campaign on the Directgov website, and next week Citizens Advice is co-ordinating a big energy week campaign. Big energy week is designed to connect consumers who are struggling to cope with energy bills with the support available to help them to reduce their energy costs and maximise their income. More than 100 events will take place across the country, reaching out to people who might not know about those schemes.

In December, Ofgem published for consultation radical proposals to require suppliers to simplify their tariffs and billing information so that consumers can compare suppliers’ deals much more easily. Currently, as the right hon. Member for Don Valley (Caroline Flint) has pointed out, more than 400 different tariffs are available. Frankly, this leads to confusion rather than to greater choice. I suggest that is part of the reason why the switching of rates in the UK has declined over time. Ofgem’s proposals should help consumers to identify more easily the best deal for them. I support Ofgem’s work in this area and will continue to work with it to boost the transparency of bills and competition in the energy market.

It should be quick and easy to switch supplier. As part of our implementation of the EU third energy package in November, we have cut to just three weeks the time it takes to switch. Citizens Advice and Ofgem have received the highest level of funding yet from suppliers for the energy best deal campaign, which helps vulnerable consumers to shop around for the best available deal. Even without changing supplier, millions of households could save just by switching tariffs or payment method.

As agreed at our consumer energy summit, suppliers are placing messages on the front page of all bills to encourage consumers to phone them or visit a website to find out if they could be saving money. They are also writing to about 8 million customers who pay on receipt of their bill to tell them that they could save up to £100 a year if they move to direct debit payment. Nearly all these letters have now been delivered.

[Tessa Munt]

Has my right hon. Friend made any progress in sorting out the situation faced by people who have prepayment meters and therefore do not receive a bill? It is difficult for them to establish what they are paying over any period, and the most vulnerable customers are often in that situation.

[Chris Huhne]

I am grateful to my hon. Friend for the concern about prepayment meters. It is one thing that we have been looking at closely. Thankfully, people on prepayment meters are not paying more than was previously the case, and that is a step forward. I am sure there is more work to be done and we are looking at it closely.

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

The hon. Member for Wells (Tessa Munt) raised the issue of people on prepayment meters. There are two other key issues concerning people. One million households across the UK do not have access to a bank account so they cannot have direct debits; likewise, there are those who do not have access to the internet—the digital divide.

Further to the point that the Secretary of State made about the energy companies that are writing to their customers, I received one of those letters asking me to go on to direct debit. I called my energy company, E.on. It wanted to put me on to a monthly payment, which would have cost me at least a third more and I would have had to wait until May before I could reassess the situation. So even when energy companies are writing to their customers, myself included, they are not offering consumers the best deal. I cannot move on to direct debit because the company wants to charge me more than I pay already.

[Chris Huhne]

I can only recommend that the hon. Lady look at switching energy supplier to see whether she can find a better deal. We know from Ofgem that people can save substantial sums of money by doing that—£200 a year. Her particular case is obviously regrettable.

[Barry Gardiner]

The Secretary of State rightly talked about the simplification of tariff structures. Will he give a commitment to the House to look carefully at the possibility of enforcing a rising block structure? In an era of rising energy costs, it seems inequitable that the highest per unit cost should be paid for the first tranche, which of course the poorest families have to use. We should be applying the “polluter pays” principle, which means that as we use more energy, we pay more per unit for it. Please will the right hon. Gentleman look at that?

[Chris Huhne]

The hon. Gentleman makes a good point. One of the first things I did on becoming Secretary of State was to ask for a serious look at the issue. It is unfortunately much more complicated than one might suppose at first glance, not least because there is such an enormous variation in energy use in different income groups. For example, among the poorest people measured by income, the variation in energy use, off the top of my head, was as much as a multiple of six. There could be dramatically different effects from a rising block tariff, which do not correspond neatly to what the hon. Gentleman and I would want.

We want the companies to take more account of the wholesale market. Up like a rocket and down like a feather—that was the old days, and it must end. I agree with the right hon. Member for Don Valley in her points on that, although I note that Ofgem did not find evidence that that was the case. We are helping, through greater competition, to get the consumer the best deal and we have done a great deal to defend the consumer interest over the past 20 months—rather more, I would say, than the right hon. Lady’s Government did in 13 years.

[Caroline Flint]

Will the right hon. Gentleman answer my question? How many consumers have switched since the energy summit?

[Chris Huhne]

I will let the right hon. Lady know the information as soon as we have it. When it is available, I will write to her.

It is important to get the message across that households can save money not only by switching supplier, but by using less energy. Insulating lofts and walls can cut energy bills. The six largest energy suppliers all offer free or cut-price insulation, yet many households still have not taken up the offer. That is why the Government are writing to 4 million of the most vulnerable energy customers to tell them that they are eligible for free or heavily discounted loft or cavity wall insulation, and I am pleased to say that the initiative has been funded by suppliers.

[Mr Weir]

Following up on the Secretary of State’s answer to the hon. Member for Wells (Tessa Munt), I note that Ofgem stated in its briefing for the debate:

“The number of gas and electricity customers paying by prepayment meters has increased compared to the same quarter in 2010, by 6% and 4% respectively”.

Those are worrying statistics indicating that people are moving to prepayment meters and falling through the gaps despite the Government’s attempt to contact them and get them on to cheaper tariffs.

[Chris Huhne]

I agree with the hon. Gentleman. Sadly, during tough times people tend to fall behind with energy bills and so can be moved on to prepayment meters. One of the things that it is very important the Department does is try to ensure that those who no longer need to be on prepayment meters, from a credit point of view, are moved back so that they pay more directly and can take advantage of those schemes.

[Bob Stewart (Beckenham) (Con)]

If the Government are writing to so many vulnerable people, can we not make it as simple as possible? When we start talking about the elderly shopping around, why can we not just say, “Here are two or three very good deals that will work for you”, and then use that to ensure that energy providers bring their prices down? We should say to energy providers, “We are going to recommend this, so you had better bring your prices down.” That is what we need. We want to keep it as simple as possible.

[Chris Huhne]

I entirely agree with my hon. Friend on the need to continue the whole process of clarifying energy bills and making them simpler so that they are absolutely transparent and people find it easier to switch. That applies to all age groups. Compared with those of us in our 50s, those in their 60s and 70s—the silver surfers—actually do more on the internet, so we should not underestimate the ability for that to happen.

My hon. Friend might be interested to know that the letters the Government are sending out direct customers to a dedicated independent helpline as part of our programme to ensure that an extra 3.5 million homes are properly insulated by the end of 2012, and later this year we will be rolling out the green deal to help even more households save money through energy efficiency. We are ensuring that extra support is available this winter for the most vulnerable households. We are requiring energy companies to provide help to around 2 million low-income households through the warm homes discount, at a cost of £250 million for 2011-12, which is 40% more in cash terms than last year under the voluntary arrangements operated by the previous Government.

The right hon. Member for Don Valley made much of our apparent meanness on this exercise, but I do not see how the Government can be accused of being mean to those in the most vulnerable groups when it comes to energy bills when we are increasing the warm home discount by 40%. The scheme will help around 600,000 of the poorest pensioners with a core group discount of £120 this winter. We are spending £110 million on heating and insulation for low-income and vulnerable households living in energy-inefficient housing through the Warm Front scheme. We will also provide winter fuel payments to pensioners and cold weather payments to some households in areas that have extended periods of very cold weather.

[Robert Flello]

Many of the houses in my constituency and others were built without cavities. Often people take the opportunity to insulate their roofs and loft spaces but cannot do more because there are no more cavities to fill. What will the Secretary of State do about that?

[Chris Huhne]

The hon. Gentleman’s constituency is clearly a perfect place for the green deal, because the ECO subsidy will in part subsidise solid-wall homes with solid-wall insulation. That will be a very substantial step forward for many people who have not been in a position to benefit from energy efficiency because they have not had cavities to fill. A very large number of people in housing built before the first world war, and in more recent housing built quickly after the second world war, are in that position, and this measure will help.

[Chris Heaton-Harris (Daventry) (Con)]

There was a ten-minute rule Bill yesterday on park homes. Will they benefit from the green deal?

[Chris Huhne]

Park homes will be eligible for the green deal. We in the ministerial team are very keen to ensure that park homes, which are often the Cinderella of the housing stock, are looked after, and we are trying our best to ensure that they are eligible for the full array of measures that are available elsewhere.

The new energy company obligation, alongside the green deal, will include support not just for solid-wall insulation, which I mentioned to the hon. Member for Stoke-on-Trent South (Robert Flello), but provide “affordable warmth” to low-income and vulnerable households, through heating and insulation measures. That is the direct replacement for the Warm Front scheme, so the right hon. Lady’s charge that we are the first Government not to pay for help through public expenditure is disingenuous, because there will be help, but it will be delivered in a different way through the ECO subsidy, and with greater targeting and, I believe, greater help.

Those policies will make a difference this winter and next, but, as I said in October when I addressed the House on this topic, we also need to take the right long-term decisions so that energy does not become unaffordable. We must keep the lights on in the cheapest, cleanest way to ensure that households get the best deal in the long term. Over the next 10 years, we need £110 billion of investment in power plants and another £90 billion of investment in energy infrastructure to avoid the risk of blackouts. We must invest now not only to improve our energy efficiency, so that we do not need to produce as much energy to keep warm, but to reduce our dependence on fossil fuels in the long term, so that we do not have to rely on ever-more expensive imports.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

I wonder whether we are in the position we are in today because of the previous Administration’s inability to take the decisions needed to ensure that we had a firm energy future.

[Chris Huhne]

My hon. Friend is absolutely right. The story of energy policy under the previous Government is one of stopping and starting, and of failing for many years to face up to the need to deal with the problem of renewing our energy infrastructure. But we are not dithering or delaying any longer: we in this Government are biting the bullet. We are determined to proceed with what is necessary to ensure that we have clean, green and secure energy for our nation.

Our proposals to reform the electricity market will deliver the best deal for Britain and for consumers, ensuring secure, low-carbon electricity supplies, and providing green jobs.

[Malcolm Wicks (Croydon North) (Lab)]

This is not the point that I was going to make, but I recall the Labour Government making the difficult decision on nuclear so convincingly that even the Liberal Democrats are now in support.

On the long-term issue, however, what is missing from this debate is the global dimension, although the Secretary of State has touched on it. Given that world energy demand is going to increase by 30-odd% in the coming years, with consequences for pricing, has the Department made any forecast of the implications for British energy prices and costs over the next 10 or 15 years?

[Chris Huhne]

I very happily exempt the right hon. Gentleman from my strictures about the previous Government’s policy, because when he was in the post of Energy Minister he certainly took some tough decisions, but sadly the record over the 13 years is not one of which Labour Members can be proud.

On energy prices, the right hon. Gentleman is absolutely right, and we have of course produced a forecast in the annual energy statement. Like all forecasts, it gets more uncertain the further out it goes, but it does point to a rise over time in oil and gas prices worldwide because of increased demand from, in particular, the far east. One of the current environment’s most striking features, about which there ought to be much greater public awareness and debate, is the sharp recovery in oil, gas and other commodity prices, despite continued relatively slow growth in Europe, the United States and Japan. This is the first time that that has happened in the post-war period. That shows the influence that the rapid growth and catch-up in the far east will have on world commodity prices.

[Guy Opperman]

I merely reiterate the point that with 24% of the north-east in fuel poverty, the situation in relation to heating oil and liquefied petroleum gas for off-grid customers is clearly unsatisfactory. Does the Secretary of State accept that and what specifically does he intend to do about it?

[Chris Huhne]

My hon. Friend makes a good and important point. People who are off-grid have traditionally had to deal with substantially higher costs than those who are on grid, and that continues to be the case. The case for regulating off-grid is weak, because as long as the market is competitive, it ought to deliver a reasonable result for consumers. I was surprised, as were other members of the ministerial team, that when we asked the Office of Fair Trading to look at the market, it was given a clean bill of health on competition grounds. We need to continue to watch this situation and we are very much on the case. With the renewable heat incentive and the green deal, it will be important that people who are off-grid think about other options rather than being reliant on heating oil, such as ground source heat pumps and biomass, which can already be cheaper than on-grid options.

[Graham Stringer (Blackley and Broughton) (Lab)]

The Secretary of State correctly points out that all projections on future energy prices show an upward trend. There is a debate about how much of that is down to renewables. One interesting difference between the UK and European market and the United States market is that there has been a decoupling of the gas price from the oil price in the north American market because of the intense use of shale gas that has been developed. What will the right hon. Gentleman do to develop shale gas in Lancashire and elsewhere in this country to change the projections so that the price of gas goes down?

[Chris Huhne]

I am grateful to the hon. Gentleman for his question. Shale gas is potentially an exciting development that could bring enormous prosperity to the parts of the country where it has been found, such as Lancashire. Provided that all the environmental safeguards are properly in place, it presents the opportunity to reduce the cost of gas. Of course, for the same calorific value, gas is about half as polluting in carbon terms as coal. Used with carbon capture and storage, it may be a long-term source of electricity generation. We are looking closely at this issue. We have been in contact with Cuadrilla, the energy company that has been involved in exploration in Lancashire. I hope that we will be able to make progress. Crucially, we must learn the lessons from the mistakes that were made in the United States. I do not want to see water tables contaminated; nor do I want the industry to be exempted from the provisions for clean water, which is what happened in the United States. There will be a different regulatory environment. In that context, I am sure that we can see success.

As so many people want to speak, I will curtail the remarks that I was going to make about our work with Ofgem. I will simply say again that we are considering giving Ofgem powers to order companies to provide redress to consumers who lose out as a result of a company’s regulatory breach. As a result of our implementation of the EU’s third energy package, companies are no longer able to block action by the energy regulator, Ofgem, by forcing it to seek a second opinion from the Competition Commission. We are determined to be on the side of the consumer in ensuring that the market is as competitive as we can make it.

We are doing everything that we can to help households with their energy bills this winter. On tariffs, bills and insulation, we are making it easier for people to save money and energy. We are taking action to help the most vulnerable households cope with rising bills and inefficient properties, and from the green deal to the reform of the electricity market we are making the right long-term decisions to ensure warm homes and affordable, secure energy for the future.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Please keep in mind the need for brevity, as we have less than an hour before the wind-ups.

17:44

[Albert Owen (Ynys Môn) (Lab)]

It is always a pleasure to follow the Secretary of State. I, too, welcome the debate, and I congratulate my right hon. Friend the Member for Don Valley (Caroline Flint) on calling it and on keeping up the pressure on the energy companies, which is very important. As she said, the Government agreed to a motion in October calling for investigation of mis-selling, the simplification of tariffs and improved transparency, and for energy companies to use their profits to help with bills. We have not seen a lot of action yet on the points in that motion, but I acknowledge that there has been some progress, which can be laid at the door of the regulator, which has been more proactive, and of the consumer groups. I pay tribute to Consumer Focus, Citizens Advice and Which?, which have highlighted many of the issues involved. The House and politicians from all parties can also take credit, because we have embarrassed many of the energy companies into taking action. I welcome today’s 5% price reduction, but I agree with other Members that it does not in any way make up for the previous double-digit rises.

Although we have had a mild winter—[Interruption.] I know that there are exceptions, such as the wind in Scotland, but compared with last year we have had a mild winter. However, that does not disguise the fact that there will be huge rises in the bills that people receive in January.

I wish to concentrate my remarks on those who are not on the gas grid. I make no apologies for doing so again and again. They are not a fringe group but some 2 million households in Britain alone, which does not include Northern Ireland, where 80% are off-grid. Those families do not get the same protection as those who are on-grid when it comes to simple matters such as help with prices. I make a direct plea to the Government to help those people. I cannot overstate that case. They ruled out social tariffs for those off the grid, I believe in June 2010, and I ask them to reconsider that.

The Energy and Climate Change Committee is undertaking a mini-inquiry into fuel poverty and off-grid gas, and we heard evidence today from the Office of Fair Trading. Unlike the Secretary of State, I was not surprised that the OFT came to the conclusions that it did, because it has a very narrow remit. The people who undertook the inquiry did not look at the matter in enough detail to conclude what we all know—that people off the grid have been ripped off in many ways.

It is not enough to refer the matter to the Competition Commission. The problem of higher prices is real, but anecdotal evidence that we have received from consumer action groups such as the one from the constituency of the hon. Member for Hexham (Guy Opperman) that gave evidence today, and from the constituents who write to us, suggests that people off the grid are being treated unfairly. There might be four companies in an area providing fuel, but they are all selling at very high prices.

Fuel poverty in off-grid areas is going up. I have some figures from Consumer Focus that I will share with the House. Some 28% of fuel-poor customers in England, 34% in Scotland and 37% in Wales are not connected to the grid. To be fair to the Minister of State, the hon. Member for Wealden (Charles Hendry), he has met Members representing off-grid customers since the last debate. I urge him to give Ofgem the responsibility to treat customers who are off the grid equally. As I said, there are 2 million such households, and they deserve the same treatment and the same protection as those who are on the grid.

I urge the Secretary of State to consider radically extending the gas mains. The renewable heat incentive may be a good thing, but it is a long way in the future. We could create jobs in construction and help to alleviate fuel poverty if we extended the gas mains to off-grid areas. They include not just isolated areas but those very close to the original gas mains that supply towns and cities. Such an extension could be done relatively quickly and would be real action, which is what our constituents demand.

17:49

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

The motion’s opening line states:

“That this House believes that soaring energy bills are driving up inflation”.

No one can argue with that. There has been a massive increase in energy bills, and before we continue with the debate, we should assess the reasons for that. All the independent financial analysts recognise that there has been a double-digit inflationary rise in energy bills, and that has spread to the economy. We live in a dangerous world, where there is much instability. The European Union recently approved sanctions on oil exports from Iran. All that has a knock-on effect on energy prices in this country. It is important, when setting the scene for the debate, to understand why energy prices have increased and that the Government can do something, but not everything.

In the summer I was in the United States when Michele Bachmann amusingly commented that she would reduce the price of fuel back to $2 a gallon. Perhaps that is why she has polled only 5% in the primaries—one simply cannot say, “We’ll reduce it back”: that flies in the face of dealing with the world crisis. There has been discussion for many years—certainly when I was at school, but it is now coming to the fore—about whether we have reached peak oil. Whether we have or not does not matter because the markets believe that we have reached that position.

There has been a 30% increase in energy demand in the recent past. As the Secretary of State pointed out, there are forecasts, but the further into the future they go, the more unreliable they are.

[Mr Mark Spencer (Sherwood) (Con)]

Yesterday, the Leader of the Opposition said that the previous Administration had not made enough progress, and he was Energy Secretary at the time. Is my hon. Friend as relieved as I am that we now have a ministerial team that is taking action to deliver real change, not only on lowering prices but on securing our energy future?

[Alec Shelbrooke]

I am most grateful for that intervention. Half the problem with such motions is that they ignore the facts that I outlined in my opening remarks and simply state that everything is the fault of the existing Government. Many people feel that the Labour party likes to be in perpetual opposition—my constituents certainly feel that, and I see nothing to disprove the theory. The right hon. Member for Don Valley (Caroline Flint) was very clear about the reforms that she wants to make, so why was she not clear when she was in government only two years ago? Perhaps the comment about window dressing goes a lot further than we thought.

Of course, we are trying to move forward in our proposals for energy consumption in this country, and the Secretary of State is right to say that we have bitten the bullet on how to generate energy. Let us be honest: we are in a coalition and we know that the Liberal Democrats had views on nuclear power. They held a perfectly acceptable view in their manifesto, and I greatly respect the work that the hon. Member for Wells (Tessa Munt) has done throughout her life as a member of CND—they were her beliefs, but we had to move forward.

[Tessa Munt]

They still are my beliefs.

[Alec Shelbrooke]

Quite right—the hon. Lady corrects me from a sedentary position. However, we had to bite the bullet and make decisions to secure this country’s energy future. All those things have a knock-on effect. The Labour Government’s dithering, delay and unwillingness to make those decisions because of the fright their Back Benchers gave them have been shown up massively by the two parties that came together to run the country after the mess left by the last lot, with one coalition partner making a decision that it did not want to take, but realising that it was right for the country. That is what is important: what is right for the country.

The right hon. Member for Don Valley said much about the Government cutting the winter fuel allowance for 2 million pensioners; there was a lot of “We told you so.” Later in her speech, however, the right hon. Lady said that the proposed legislation was initiated by the Labour Government and we have picked up on it. She cannot have it both ways. Labour was quite clear in its manifesto and previous decisions that it would do exactly the same thing on the winter fuel allowance. In these austere times, it is the Government who are resisting the populist pressure, coming perhaps from some of the more right-wing media, to means-test the winter fuel allowance, and we are ensuring that it is all there. The tax bribes that Labour was giving out at the last election were seen through, which is why it suffered the worst defeat since 1918.

I have already outlined the need for a coherent policy on energy futures, which will help to bring prices down. The situation with the feed-in tariffs is difficult, but we need to ensure that progress is made. We have done many other things to help people with their pensions, including introducing the triple lock, and ensuring that pensioners this year will receive the highest cash settlement that they have received in the last 100 years—it is huge.

There is every chance that the Opposition motion would lead to more borrowing, less tax, and disaster. When people cannot pay their bills, it is because of the economic incompetence of the Labour party.

17:56

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

I shall try to talk to the subject that we are here to discuss, unlike the hon. Member for Elmet and Rothwell (Alec Shelbrooke).

Last year, the average household saw energy costs rise by about £300 and Ofgem announced last October that the profit for energy companies had risen to £125 per customer per year, from £15 in June. My contention is not that the cost of energy is rising, but that the big six do not have a great track record of passing on wholesale decreases as quickly as increases.

Today’s wholesale energy prices are lower than they were a few years ago—and lower than they were only a few months ago. According to Bloomberg, the wholesale price for gas in autumn 2008 hit over 70p a therm. If we compare that with 59p per therm last October, we see that wholesale gas prices have actually dropped 15% since then. Similarly, prices in the wholesale electricity market reached £120 per megawatt-hour in autumn 2008. Today, they are just over £50 per megawatt-hour—less than half the price back then. But gas prices have dropped by only 15% and electricity prices by only 11% since last May’s peak. According to Bloomberg, in December natural gas futures declined by 30% compared with 2011. Today, energy companies can buy their gas for 53p per therm, some 9% cheaper than even last October.

The reason for this is sadly apparent. European demand is going down as the continent is moving towards a downturn and productivity is declining. This may be why EDF announced today a 5% cut, but—as my right hon. Friend the Member for Don Valley (Caroline Flint) pointed out—the company raised its gas prices last year by 15.4% while future gas derivative prices were falling, and while current market prices are down on previous years.

As a result, there is great suspicion among many, including Ofgem, that the big six have not been passing on wholesale market price reductions, not only last year but this year. These are clear acts of anti-competiveness in themselves, especially towards smaller energy companies, let alone customers and small businesses. For example, section 2 of the Competition Act 1998 prohibits the abuse of a dominant position in a market by one or more undertakings which may affect trade within the UK. I will quote competition law guidelines again as it seems that the Secretary of State did not hear me the last time I did so. They state:

“Conduct may be abusive when, through the effects of conduct on the competitive process, it adversely affects consumers directly (for example, through the prices charged) or indirectly (for example, conduct which reduces the intensity of existing competition or potential competition). A dominant undertaking is under a special responsibility not to allow its conduct to impair undistorted competition.”

I strongly suspect that one reason behind the price rises is probably that the companies have grossly failed to stockpile their energy reserves to hedge adequately against future prices. That could explain why, when future prices have fallen by almost a third, the companies are not passing on the reduction. There may be numerous reasons for that—one reason is probably ineptitude—but I feel that the main answer lies more in the lack of any incentive to pass on substantial price falls.

[David Mowat]

Will the hon. Gentleman give way?

[John Robertson]

I will not give way. There are a lot of people wanting to speak.

My constituents are grossly disadvantaged. The Secretary of State talked about going on the internet, but the low internet uptake in Glasgow—we have one of the lowest uptakes—will not allow that to happen for my constituents. However, I was pleased to hear that he has taken on board the point about severe housing, which is what we have. Efficiency savings cannot be made in concrete housing blocks. In fact, all my constituents seem to do is pay to heat up the concrete blocks in the winter and cool them down in the summer. I therefore look forward to hearing more from the Minister. I hope he will look at the prices, go back to the companies, give Ofgem the teeth that it needs and ensure that the fines that should be imposed on the companies in question are indeed imposed.

18:01

[Simon Wright (Norwich South) (LD)]

In October we saw the launch of the “Check, switch, insulate to save” campaign. There is a clear need to raise awareness of what people can do today to reduce their bills. Many people can go online, check around for better deals and switch suppliers or change to a cheaper tariff, but three in every five consumers say that, in fact, they have never switched supplier. There are perhaps a number of reasons why not, one of which is that there remains a digital divide, which means that the information is not as easily or quickly available to all. What is more, many of the best deals are for online-only web accounts. Many households could save around £100 immediately by simply moving to an online account, but this is little help to those who have not embraced the internet, which in many cases also includes poorer households. Those who are not online include more than half the UK’s over-65 population.

Other households tend to avoid doing too much of their business online, because they have poor quality internet access where they live. I strongly welcome the Government’s investment in better broadband for Norfolk. Better communication links will allow more people to search online for the cheapest services and, as a result, become more powerful consumers. However, even with 100% broadband coverage, many households will still not connect to the internet. It is therefore vital that every effort be made to ensure that support is available for offline consumers to ensure that everyone can access the cheapest tariffs, not just the internet-savvy. I welcome the work that citizens advice bureaux and Ofgem are doing to help.

[Bob Stewart]

Is that not the very point that we were making earlier? Citizens advice bureaux and the Department, in sending out these letters, should advise vulnerable people exactly what they think is best for them. That should make it as simple as possible for very vulnerable people, and that is our duty.

[Simon Wright]

That is a very good point, and I thank the hon. Gentleman for making it, but given the sometimes huge price differential between online and offline accounts, I hope that Ministers can work with Ofgem and the suppliers to seek to narrow the gap.

In recent years, competition for new customers seems to have been increasingly focused on price comparison websites. That has meant that those who use such tools can find massive discounts for web-only accounts, while the majority, who do not, end up paying more. To improve competition, we need simpler tariffs. Over 70% of consumers tested in Ofgem’s market research said that they would be more likely to switch if tariffs were made clearer. With a bewildering 400 or so tariffs available, only 44% of people in Ofgem’s research were able to select the cheapest tariff, even under a simplified form of the current arrangements.

We also need tariffs to be structured in a way that encourages energy conservation. A system of rising block tariffs—which was mentioned earlier—where customers pay less for the initial blocks of consumption and a rising amount for subsequent blocks, would provide an additional financial motivation for households to consider energy conservation. Low energy users would be rewarded for their efforts. At present, intensive energy users pay proportionately less.

I recognise that there are concerns about the unintended impacts that such a system could have on households that necessarily consume high amounts of energy, such as those of people with long-term health conditions who need to keep their house at a higher temperature. Perhaps we could consider other forms of social tariffs for such households, and examine whether extra support could be made available for housing insulation improvements, possibly through the green deal and through energy company observation. I know that Professor Hills’s fuel poverty review will consider tariff structures in its final report, and I hope that energy conservation will be seen as an important part of that work.

I also want to mention smart meters, which could play a massively important role for consumers. Every household should have one by the end of this decade. As well as encouraging more efficient energy use and allowing for more precise billing, these meters will provide consumers with billing information on what they are paying for, at the touch of a button. There is great potential for people to use that information to ensure that they are getting a good deal. For households to get the maximum benefit, consideration must be given to how best to inform, engage, and motivate consumers to use their meters to the best effect. The consumer engagement strategy, which I hope to see being developed and implemented during this year, will have a vital role to play in that regard.

Simplifying and reforming tariffs and improving transparency are all necessary short-term steps required to increase competition. There are a few encouraging signs of competition in what is, overall, a difficult market for consumers. Today’s announcement by EDF of a reduction in its customers’ gas bills in response to the falling cost of imported gas, following similar moves by smaller suppliers such as Ovo and the Co-op, will be welcomed by many of my constituents. Last year, however, rising costs were passed on to customers very quickly, and I now want to see—on behalf of all my constituents—action being taken by the other big five energy suppliers to reduce their prices. Whether or not they do so will be an indicator of how competitive the market is for consumers. If suppliers do not reduce prices, how many of their customers will go elsewhere? Promoting competition now is vital, and I welcome the emphasis that Ministers, working with Ofgem, have given to this issue.

Today’s debate is important. The issues are not simple, but the public rightly expect Ministers to intervene, and I welcome the progress that has been made in recent months. We are heading in the right direction, and I urge Ministers to continue.

18:07

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

My objective today is, as it has been in similar debates under the previous Government and this one, to speak up for my constituents who are getting a very raw deal from the energy suppliers. Energy companies are renowned for using fluctuations in wholesale prices as an excuse for unacceptably high domestic energy bills. The issue affects every household in my constituency, particularly those of pensioners and families on low incomes with young children, and it causes financial misery to consumers.

I have written to Ofgem, and met representatives of the organisation. I have sought to remind it of its duty to consumers. Likewise, I have been in touch with the Office of Fair Trading, which has a duty to ensure that a cartel is not operating against the public interest. I remain to be convinced about that. The problem that we are discussing today will not simply go away, and my activity will continue until pressure is brought to bear on energy suppliers to reduce the inflated prices that are being unfairly charged to all households.

As I travel round my constituency, I find that the issue uppermost in the minds of my constituents is the rocketing price of gas and electricity. The price of both has gone up substantially, leaving those consumers helpless or in debt from dealing with the problem. Food inflation is up by 6.2%. Electricity prices have risen by 10%, and gas prices are up by as much as 17.4%.

I was hoping that during this debate we might be spared the fool’s bargain solution of asking the public to switch providers. By heavens, we have heard that so often. This has not, is not and never will be the solution. I have a sense that the Government know, deep down, that what I am saying is perfectly true.

There is no need for extensive research into the domestic energy supply industry. The man and woman in the street are absolutely convinced that energy companies are simply leapfrogging one after another when it comes to increases. An unregulated energy market that allows consumer prices to soar while wholesale prices are decreasing is unjust, irresponsible and is hitting the poorest households hardest. The rip-off continues unabated, and I think we are right to challenge it today.

Let me issue this challenge to the Minister: can he name any other product or commodity that has risen in price so steeply not just during the last year, but during the last decade? This explains why energy prices have, frankly, become a national scandal. I am in constant touch with ordinary decent people in my constituency who are struggling against extraordinary energy price increases. Consumers need energy to keep themselves warm and to cook meals, and they need hot water. Wholesale price fluctuations have largely been blamed on the energy supply from the continent, but there is a healthy scepticism about this rationale. I am not against companies making a profit. What I am against are the profits of energy companies rocketing while consumers are facing human misery.

Clearly, we need to ask whether competition is working as it should. Are companies becoming too comfortable in this small sector in which the price-setter, British Gas seems more keen to keep its prices up than to keep its customers? I am not especially concerned with the profits that those companies are making—obscene though I believe them to be. Nor am I concerned about whether they should face competition inquiries or fines, because fines will be of no use whatever to low-income families in my constituency. My concern is that those people should get a fairer deal—no less and no more than that.

The previous Government made huge strides to combat fuel poverty through the winter fuel payment and other measures such as pension credit. The tragedy is that those efforts are being completely undermined and devalued by the scandalous energy prices that consumers are being—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order.

18:12

[Ben Gummer (Ipswich) (Con)]

It is always a great pleasure and honour to follow the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke), whose defence of his constituents is always reasonable and valiant. I think he is right to this extent—that appealing to people to switch supplier will not be the entire cure for problems in the energy market. The reason for that is that the energy market is broken, so competition will not work entirely. It can work to a certain extent, but not entirely, if the market cannot deliver what the consumer wants.

To understand how to fix the market, we have to look at the history of the market and why it went wrong. If we look at energy prices, we find that they have moved since the privatisation of the late ’80s. They fell consistently beneath the retail prices index every year from the late ’80s and the early 2000s. They did so over a longer period than at any time since records of energy prices began. Then, from the mid-2000s they levelled out, and from 2005 to 2007 they increased further than RPI until 2010 when the last Government left office.

I am fully aware that this is often not a moment to talk about the previous Government’s record, but they had a fundamental hand to play in the reasons why we are in the position we are in now. It is also incumbent on us to point out that much of the responsibility lies with the man whose name stands at the head of the motion who seeks to lead the British public as Prime Minister after the next election. He is responsible for the complete lack of action taken to do anything about the broken energy market, which has caused the problems from which our constituents, including those of the right hon. Member for Coatbridge, Chryston and Bellshill, suffer today.

In a debate earlier in the Session, the right hon. Member for Don Valley (Caroline Flint)—who is now shouting from a sedentary position—said that reform of the electricity market was

“what my right hon. Friend the Member for Doncaster North (Edward Miliband) has been calling for ever since he was Energy Secretary, including now, as leader of the Labour party.”—[Official Report, 19 October 2011; Vol. 533, c. 931.]

A Secretary of State does not call for a reform of the energy market, or of the electricity market. The right hon. Gentleman’s purpose should have been to do something about the situation, but far from doing something about it—or even calling for something to be done about it—he issued the following warning to the then Opposition Front-Bench team during a 2009 debate on the Energy Bill:

“I have to say that the alarmism... is of no help at all.”—[Official Report, 7 December 2009; Vol. 502, c. 43.]

It was not alarmism, however. We understood that the market was broken, and we understood that fundamental changes were needed. That is why we are introducing the changes that need to be made now that we are in power.

My first problem with the proposals in the motion is that they do not have the agreement of even small energy providers, who say that the right hon. Lady’s pooling mechanism would not work.

[Caroline Flint]

How do you know?

[Ben Gummer]

I can tell the right hon. Lady, in answer to her sedentary question, that even the small providers have put that on record.

Secondly, the right hon. Lady alluded to a series of reforms that she believes would combat fuel poverty. That suggested that the last Government’s attempts had somehow been successful, or would be successful were they to be continued. In that earlier debate, the right hon. Lady also said:

“we had the most ambitious programme to help people in fuel poverty deal with their bills”. —[Official Report, 19 October 2011; Vol. 533, c. 932.]

Let me remind her of that policy. Between 2000 and 2008 the last Government spent £20 billion on abatement of fuel costs, and what happened to fuel poverty during that period? It increased by 333%. That was indeed ambitious. It was ambitious to the extent that for every household the Labour party put into fuel poverty, the taxpayer paid £5,700. The taxpayer paid £5,700 to reduce a household to fuel poverty, yet Labour Members have had the cynicism to come to the House and claim that their policies would work again, and that the brave and principled position of Her Majesty’s Government is somehow misguided. It is a hypocrisy which lays bare a party that has no ideas of its own, and is reduced to attacking its own record.

18:17

[Pat Glass (North West Durham) (Lab)]

I have spoken in every energy debate in the House since my election. That is because my constituency is largely rural and is in the north-east, and because 25% of my constituents are living in fuel poverty. Many of them are on low incomes, there is high unemployment in the constituency—it has doubled in the last 12 months—and we have an ageing population. Any suggestion of an increase in fuel costs always causes real fear and anxiety in constituencies such as mine.

I listened carefully to what the Secretary of State had to say. While apparently guiding us carefully through the complexities of the energy industry, he seemed to me to be doing so from the point of view of the chief executive of an energy company, and I found that incredibly disappointing. I thought it was complacent in the extreme, and I believe that my constituents would be rightly angered by it. The Secretary of State spoke of dithering and delay in the last Government, but in the two years in which I have been in the House, I have witnessed a master class in dithering and delay. We need to get on with doing something about the present situation.

In my brief speech, I want to raise two issues. As a past student of economics, I want to discuss the artificial economy created by successive Governments in the energy industry, and I also want to return to the issue of off-grid and heating oil prices.

Successive Governments have created and modified the artificial market in the industry, but that artificial market has failed to establish safeguards that would prevent companies from manipulating the market in order to achieve massive profits at the expense of the consumer and at virtually no risk to themselves. It has failed to prevent an oligopoly in which these companies can operate with impunity. We now have few suppliers in the market and entry into the market is almost impossible, and the actions of those few suppliers have a disproportionate and negative impact on consumer prices.

Most of our strategic energy companies are also now foreign-owned. I sat through the previous debate on transport, and I heard the shadow Secretary of State tell us how the rail industry is being gradually renationalised and returned to Government ownership, but, unfortunately, not British-Government ownership; foreign companies and Governments now own our rail industry, and the same is happening in our energy industry.

On off-grid and off-gas, I was stunned by the Secretary of State’s remark that the Office of Fair Trading report gave a clean bill of health to the industry. It is clear to me that he has not read that report. I accept that the report said there was no monopoly in heating oil, but I think that is because its remit was far too narrow so the investigation was too limited.

[Guy Opperman]

I am the hon. Lady’s constituency neighbour and we share a great deal of common ground on the issue of off-grid problems. So far as my constituents are concerned, there is no genuine competition and fairness of pricing in respect of off-grid, so from their point of view the report by the OFT, which was only a market study, is manifestly insufficient and not right. Do her constituents convey the same concerns?

[Pat Glass]

Yes, exactly the same issues are raised in my constituency surgeries. The OFT accepted that in some parts of the country there are fewer than three suppliers, but in practice even though there may be three advertised suppliers, sometimes only one company is prepared to deliver. That is certainly the case in parts of my constituency, and I am sure that is also the case elsewhere. That may not be a monopoly in the view of the OFT, but for my constituents it is definitely a monopoly. Some of my constituents were faced with increases of almost 100% in heating oil prices in the run-up to Christmas last year, and only one company was prepared to deliver. I call that a monopoly. I urge the Government, and my party’s Front-Bench team, to look again at the regulation of this sector.

I am pleased that the Prime Minister seems recently to have woken up to the public’s anger about irresponsible capitalism. We have a culture in which obscene profits are made and consumers are suffering as a result. However, I do not believe that the Prime Minister is serious about this; rather, I think it is just focus-group rhetoric. If he is really serious about doing something about irresponsible capitalism, the energy industry in this country is a good place to start.

18:23

[Sarah Newton (Truro and Falmouth) (Con)]

I simply do not accept the criticism we have heard this afternoon from the Opposition that the Government are sitting on their hands and letting people die in their homes this winter. In the few minutes available to me, I shall demonstrate that, as Opposition Members have said, actions do, indeed, speak louder than words, and I shall describe a fraction of the things that are being done in my constituency to tackle fuel poverty now, as we speak.

Cornwall council and the council of the Isles of Scilly have led a successful bid to the Department of Health for more than £140,000 for a campaign called “Warm homes, healthy people”. It is estimated that each year about 300 people in Cornwall die as a result of living in cold homes, which is, of course, 300 too many. Partners in this campaign include the NHS in Cornwall and the Isles of Scilly, Age UK, Community Energy Plus, the citizens advice bureaux, Cornwall Voluntary Sector Forum, Truro Homeless Action Group, the home improvements agencies, St Petroc’s, the Cornwall drug and alcohol team, New Connection and the councils’ own housing and adult social care teams. All of them are combining their efforts to tackle this problem. They will identify those most at risk of fuel poverty. They are going to make sure that people access all the advice and support that is already available for them. As the right hon. Member for Don Valley (Caroline Flint) said, millions of pounds go unclaimed in benefits and compensation from energy companies. This practical programme will make sure that the people who need support actually access it.

[Mr Watts]

Will the hon. Lady give way?

[Sarah Newton]

I will not, because I want to allow more colleagues to join in.

The programme is going to give people really good advice on how to protect themselves from the risks of high humidity and on insulating their homes, and it will make sure that they are taking up the available grants. It is also going to make sure that people really take advantage of the many existing free programmes.

This programme has had widespread support from people in Cornwall. The council cabinet member responsible for health and well-being has said:

“This is a great example of community and voluntary organisations coming together with the public sector to offer a joined up approach to a big issue. The funding is very welcome indeed as it will help all the agencies involved target support to those in most need and at most risk. By working together, frontline workers and volunteers will have systems in place to make sure that vulnerable people are directed to the service most able to help them.”

Our director of public health for Cornwall and the Isles of Scilly has also warmly welcomed this investment, saying that it will be used alongside money that Cornwall council and the NHS already spend in subsidising the Warm Front scheme to ensure that all the costs of insulating people’s homes are met.

In addition, the council cabinet member responsible for housing has said that this funding is “great news” and is going to back up the money already being received from the Government to tackle homelessness. People who are homeless or living in very poor quality accommodation—in the mobile homes and park homes that we have heard about; in poor quality, poorly insulated private rented sector accommodation—will be able to top up the money the Government are already giving to people at risk of homelessness, which will actually make a difference this winter.

In addition, I have been working with all these different voluntary sector organisations, and, together with Church groups and poverty forums, we have come up with a practical guide that will be widely distributed to people. Anyone and everyone who is worried about heating their homes this winter will have the full range of advice about all the benefits and services available to them.

I challenge my colleagues on the Opposition Benches. Yes, actions do speak louder than words, and rather than spending hours in these sterile and futile debates, why do they not roll up their sleeves, go back to their constituencies and work with those who really want to make a difference to people this winter?

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I want to allow some people who have been here throughout the debate to get at least something on the record. I do not like dropping the time limit to three minutes, but I am afraid I have to. I call Mike Weir.

18:28

[Mr Mike Weir (Angus) (SNP)]

In the brief time available I just want to make a few comments. Rising energy prices are obviously causing huge problems for many families. Every 5% rise puts a further 46,000 households into fuel poverty. It is not a completely grim picture. For once, there is some good news in Scotland. The Scottish house condition survey, which measures fuel poverty, published in November, shows a reduction in the number of homes in fuel poverty in 2010, although, like the rest of the UK, the figure remains far too high. The current average dual fuel bill is now £1,345 a year, an increase of almost 50% over the past four years. Today, EDF trumpeted the decision to reduce gas prices by 5%, but that comes on top of an increase only a couple a months ago of 15.4%.

There are other related issues. I raised with the Secretary of State in an intervention the issue of prepayment meters. There is great concern about the huge increase in the number of people moving over to prepayment meters—presumably, people who are unable to meet their energy bills—and there is a real danger of self-disconnection when that happens. We do not always know when some of these people are doing this. That is a real worry and we need to do something about it.

The mantra of switching simply does not work. The energy companies appear to be doing a “follow my lead” on rising prices; I very much doubt whether that will necessarily occur when prices start to go down.

I note that Labour’s motion suggests that we should

“require energy companies to provide the lowest tariff to over 75s”.

That, in itself, is a good idea, but the problem is that it will work only if the tariffs are lower; there is no point putting people on the lowest tariff if all the tariffs are high, which tends to be the position at the moment. At the Scottish Government’s energy summit last November, Scotland’s six largest energy providers pledged to help vulnerable customers transfer to their most efficient tariff, so there has been some movement on this issue and it should be encouraged. However, the previous system of higher winter fuel allowances for elderly people is a much better option, because it reduces the amount they have to pay out, irrespective of what bill they are on, and I am slightly disappointed that Labour seems to be moving away from that approach.

I wish to make the point about off-grid customers, of whom my constituency has many and about which other hon. Members have spoken. I have previously raised this prospect, but the Government should consider, at the very least, making the winter fuel payment earlier to vulnerable people who are off-grid, as that would allow them to fill up their tanks in the summer or early autumn, when the price tends to be lower, although it is not always. That is a no-cost and positive option, so I urge the Minister at least to consider it again.

18:30

[David Mowat (Warrington South) (Con)]

I have been sitting here for a few moments trying to work out whether to talk quickly in the next few minutes or to curtail my remarks. I wish briefly to say something about the structure of the UK gas and electricity industries.

First, I shall discuss the gas industry. I heard the comments made by hon. Members from both sides of the House, but particularly by Labour Members, about the predatory nature of the industry, cartels, price fixing and so on. I return to my earlier intervention by saying that this country has the lowest gas prices in Europe, leaving aside three small countries. I am not defending these organisations and if the prices could be lower, they should be lower. However, if that situation is the result of predatory pricing and the operation of a cartel, the companies are not very good at it.

[Ben Gummer]

Is my hon. Friend aware that the probe initiated by the previous Secretary of State found that the energy companies were not acting as a cartel and that there was indeed price transparency between them?

[David Mowat]

I was aware of that, and I shall finish on this point by saying that if Labour Members have evidence of directors operating a cartel, which is a criminal offence, they should come forward with it. Alternatively, they should just stop making the accusation, which is becoming increasingly silly.

I was somewhat disappointed by the Secretary of State’s answer to the question about shale gas, because it has the potential to be a game-changer. In the United States gas prices have reduced by a factor of three and, in 2015, the US is going to start exporting shale gas, and if we do not have it here, that could well have a major impact on the structure of the industry and how it will work in the future. For the first time, we are seeing the decoupling of gas and oil prices, and once that has happened, all bets are off. The price of gas in Europe—in the European balancing hub—is three times what it is in the US. If a fraction of what happened in the US happens here, the results could be very radical and could create some issues to address in terms of the debt strategy.

Whereas we have nearly the lowest gas prices in Europe, the same cannot be said for electricity prices. We have structural issues to address in our electricity market. We do not have cheap nuclear power, as France does. We have missed the opportunity on that, although we are doing our best to catch up.

In the minute remaining, I want to suggest to the Minister one area that I believe we have got wrong in policy terms. The Climate Change Act 2008 sets a very ambitious target of 80% decarbonisation, and I accept that, but I believe we have confused the need to decarbonise with the need to go for renewables. The 20-20-20 directive from 2009, which imposes a renewables target over and above what we could have done to reduce carbon, has confused the issue. As a result, we have gone into nuclear more slowly than we should have done and, frankly, we have gone more slowly into carbon capture and storage, which is an alternative. Will the Minister assure us that the Green investment bank will be concerned with decarbonisation, not just renewables, and that the money available from it will therefore be available to the nuclear industry, which is in as much need of it as other parts of the decarbonisation chain, and the CCS industry?

18:35

[Barry Gardiner (Brent North) (Lab)]

Since 2004, gas and electricity bills have increased more than six times faster than household incomes, meaning that a quarter of all households in England and Wales are now in fuel poverty. Increasing energy bills and stagnating incomes also mean that an additional 25% of people now face energy debts and more than 850,000 electricity consumers and more than 700,000 gas customers are now in debt to their energy supplier.

I would dearly love to give the hon. Member for Ipswich (Ben Gummer) a lesson in the history he so eloquently went into earlier, but I shall defer that to another occasion. I would point out, however, that although he accused the previous Government of not having tackled structural reform in the energy market, they did so on two occasions with the new electricity trading arrangements, or NETA, and the British electricity trading and transmission arrangements, or BETTA. We will save the rest of that debate for another day.

The point that I most wish to make is that the costs of environmental and social measures, such as CERT and the renewables obligation, now account for about 4% and 10% of gas and electricity bills respectively. This is an unpopular thing to say—and certainly unfashionable, coming from me—but it is the truth and we have to face up to it: developing a low-carbon energy infrastructure will require long-term planning and significant investment. Whereas 84% of recent energy price rises were unrelated to low-carbon measures, the remaining 16% were and the Committee on Climate Change estimates that policies to achieve a low-carbon economy will add about £110 to bills over the next decade. That is because it expects electricity consumption to drop by 50%, meaning that per unit costs of electricity will skyrocket. The most important thing we can do, therefore, is achieve energy efficiency.

On that point, I want to challenge the Secretary of State on ECO. He will know that the Fuel Poverty Advisory Group and National Energy Action have said that ECO spends only 25% of its funds on the fuel poor and 75% of its funds on trying to reduce carbon emissions, which could be better directed at targeting solid-wall insulation for the fuel poor in the private rented sector. I ask him please to consider that, as it can achieve his energy emissions objectives and increase the benefits to the fuel poor.

18:38

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

As many other Members have said, this is an issue of huge concern to constituents across the country, and my constituents have some particular concerns that make the impact of rising energy prices much greater. We have a lot of properties that are off-grid, which is a huge issue particularly in the marshland villages, and I also represent in the Scunthorpe part of my constituency a large number of park homes, which other Members have mentioned. A lot of people in my constituency live in single-skin properties, many privately rented, where landlords, despite their legal right, require them to be on energy meters. That was an experience I had for about three and a half years before I was able to buy my house. I lived in a rented property with one of those meters and I know the added costs. Like other Members, I am getting increasing amounts of casework about this matter. I hope the Secretary of State will act on the concerns about private rented landlords, park homes and single-skin properties.

There is not a great deal of time to go into casework issues, but another issue I want to discuss is switching. I was saddened by the comments of the right hon. Member for Don Valley (Caroline Flint) and I remind her that, under her Government, in the region we represent, Yorkshire and the Humber, fuel poverty went from 7.7% of households in 2004 to 19.9% in 2009, so this issue has not appeared overnight. It is wrong to pooh-pooh the idea of switching. One thing that I have done—my hon. Friend the Member for Truro and Falmouth (Sarah Newton) said that she had done something similar in her constituency—is to produce a book and guide for my constituents to assist them as best I can by informing them about how they can switch and how they can make use of the social tariffs and their replacements. There are practical things that we can do, but I do not deny that it is sometimes incredibly confusing. I had a lady in her 80s at my constituency surgery the other week. She explained that she was unable to switch because she did not have access to the internet and her children lived a long way away. We need to do more for such individuals.

I want briefly to address a point made by the right hon. Member for Don Valley. I intervened on her about it but it is worth saying again. If a point is worth making once it is worth making twice. Never mind the nonsense about the winter fuel allowance and the fact that Labour would probably have raised it—even though she committed today to not raising it, which tells us all we need to know—the one thing that would have helped pensioners in my constituency previously, instead of giving them that disgusting 75p rise, would have been Labour making good on its 1997 election pledge to link pensions to earnings. I am proud that we have done that, and it should put £5 or more into the pockets of pensioners.

18:41

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

I am pleased to respond to this very important debate. At the start of the debate, my right hon. Friend the Member for Don Valley (Caroline Flint) reminded the House of the last time we debated rising energy prices—in October, just three months ago. In that debate, the Government supported our motion calling on them to investigate mis-selling, simplify tariffs, improve the transparency of trading data, reform the energy market to increase competition and drive down bills, and to demand that energy companies use their profits to help with bills this winter.

Since then, the Government have failed to deliver on every one of those promises. No action has been taken to address the chronic lack of trust between energy companies and their customers. There has been no action to increase transparency and competition and no action to help with the soaring cost of bills. Today, we have heard in speeches of Members from across the House about the consequences of the Government’s failure. They have told us about constituents who have been let down and who are struggling to keep warm this winter. Families and pensioners are facing a cost-of-living crisis. They are being squeezed by huge increases in prices at a time when their incomes are decreasing in real terms. In the latest round of price increases, electricity has gone up by 10% and gas has gone up by more than 17%, and that has come on top of high fuel prices and food inflation at 6.2% as well as the Government’s VAT rise, which is costing the typical pensioner around £275 a year.

Several hon. Members have talked about unfairness. My hon. Friends the Members for Ynys Môn (Albert Owen) and for North West Durham (Pat Glass) raised the issue of the 2 million customers who are off-grid, which is a specific issue in their constituencies. Those households suffer specifically from the monopolistic situations in their area and do not have choices about electricity and gas when such services are not available to them.

The hon. Member for Norwich South (Simon Wright) rightly talked about people who do not have access to the internet as a means of identifying the cheapest deals. A number of Members talked about the scandal of prepayment meters and the high costs incurred for those customers.

My hon. Friend the Member for Brent North (Barry Gardiner), my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) and my hon. Friend the Member for Glasgow North West (John Robertson) all highlighted that at a time when their constituents are being squeezed by record rises in their bills, energy companies are seeing record rises in their profits. It cannot be right that while the cost of a typical dual fuel bill now stands at more than £1,300, thereby making energy bills one of the biggest costs that households face, the profits of the big six, which supply 99% of our households, have risen to more than £100 per customer.

The Government are exacerbating the situation by making the wrong choices for Britain’s bill payers. They are wrong to withdraw support from the most vulnerable consumers when they need it most. They are cutting winter fuel payments by £50 for the over-60s and by £100 for the over-80s despite having promised before the general election not to do so. They are also running down the successful Warm Front scheme before they scrap it completely next year. That scheme was introduced by Labour and has helped more than 2 million households to save money by improving their homes’ heating systems and energy efficiency.

Ministers are quick to lecture consumers about the importance of energy efficiency, yet at a time of soaring energy costs they are cutting help for those who are trying to install those vital measures, be it insulation or more affordable and energy-efficient heating systems. In 2009-10, during the last year of the Labour Government, over 200,000 homes received new heating and insulation under the Warm Front scheme. By November last year, fewer than 15,000 households received such help—a staggering reduction of 85%. The hon. Member for Truro and Falmouth (Sarah Newton) must be receiving the majority of the Warm Front support in her constituency.

It shows just how out of touch this Government are that, when they should be supporting those who are trying to do the right thing, they are instead making it more difficult. They are wrong, too, because as well as scrapping existing successful schemes, they have introduced new programmes which are not delivering. I am pleased to see the hon. Member for Elmet and Rothwell (Alec Shelbrooke) back in his place. He did not know the difference between the warm home discount and winter fuel allowance. It is a shame that he was not able to stay for the debate, because he might have learned about it.

The new warm home discount is failing to help those in fuel poverty. We warned the Government that the scheme was too narrowly focused and would not deliver the support needed. It seems that those warnings went unheeded. Research by Save the Children, which came out last week, highlighted the huge shortfall in funding provided by energy companies for the schemes, which means that only 25,000 of the 800,000 households eligible for the warm home discount will get help this winter. That is just 3% and it is not good enough.

When pensioners and low-income families are struggling to make ends meet, it is time the Government got tough with the energy companies. We would provide real help now by making the energy companies ensure that all vulnerable pensioners and low-income families with children at risk of fuel poverty who receive cold-weather payments automatically receive the warm home discount. When in government we took action to help consumers, thanks to measures such as Warm Front and the winter fuel allowance, which the Government are now cutting. The number of households in fuel poverty fell by 1 million. Of course we would have liked to have reduced that even further, but now fuel poverty is rising and things are getting worse, not better, as a direct result of the decisions being made by this Government.

At the same time as cutting support, the Government’s plans for the new schemes, the green deal and the energy company obligation, will not deliver either. We have just heard that at a meeting in the other place, the Energy Minister there said that the regulations for the green deal would be delayed. We wait to hear how long that delay will be.

The Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), told the House in 2010 that the green deal would be the game-changer for fuel poverty, but his figures revealed that only 350,000 to 550,000 households would be lifted out of fuel poverty by 2020. These are derisory ambitions. His plans mean that the Government will be gifting three times as much subsidy to households that can already afford to improve their homes, compared with those in fuel poverty who cannot even afford to keep theirs warm. To echo my hon. Friend the Member for Brent North, why, when money is tight, is the Minister not prioritising support for those who need help most?

We have seen a clear choice emerge in this afternoon’s debate. On the one hand, there is an out of touch, out of date Government unable to stand up for hard-working consumers—out of touch because when energy bills are rising, millions are struggling to keep warm and fuel poverty is rising, their only answer is to cut support and tell consumers to shop around. Although it is refreshing to hear from the hon. Member for Ipswich (Ben Gummer) that he believes that the energy market is broken, the Government are out of date because they are wedded to an orthodoxy which for too long has allowed utility companies to do what they please at the expense of their customers. On the other hand, the Labour Opposition have plans to deliver fairness in tough times, to provide real support for struggling households this winter, even when Government have less to spend, and to take on the vested interests, reforming the energy market so that it benefits the many and not just the few.

We heard throughout the debate how the huge rises in gas and electricity prices mean that bills are one of the biggest costs that households face. The Government lecture consumers, telling them that it is possible to save up to £200 on an annual bill by shopping around. In some cases that might be true, but Ministers are out of touch if they think that it is easy for consumers. We have heard from many about the 400 different tariffs. It is those who need help most, Britain’s pensioners, who are losing out from the Government’s failure to force companies to introduce simpler tariffs. Research by Ofgem has shown that elderly customers are much less likely to investigate cheaper tariffs or switch suppliers, compared with the average consumer. It is crucial that at times like these, when money is tight and people right across the country are struggling to get by, the Government do everything they can to help them.

Yesterday my right hon. Friend the Leader of the Opposition showed that Labour will deliver fairness for elderly people struggling with soaring fuel bills as well as taking action to cut the deficit. The plan he set out in today’s motion would cut gas and electricity bills for up to 4 million elderly pensioners, not by spending more money, but by getting energy firms to show greater responsibility towards their most vulnerable customers. We want energy companies to move their customers who are over 75 automatically to the cheapest tariff they offer for gas and electricity.

As well as taking action to protect the most vulnerable in our society, we must ensure that everyone benefits from fairness and responsibility in our energy market, so we would go further by introducing real reform to increase competition and drive down prices. For too long the market has been dominated by a handful of companies. Today’s debate has shown once again that the market is broken and that we need to fix it. I hope that the House will vote for action today and I urge Members to support the motion.

18:50

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

I am delighted to have the opportunity to respond to the debate, which I think we all would agree has dealt with some extremely important issues that concern us all. I think we should start with the recognition that there is no monopoly of care when it comes to fuel poverty. Every Member of the House, regardless of party allegiance, cares about their constituents being able to pay their bills and worries about how they can do more to assist them. This is a long-term concern. Fuel poverty started to come down in the 1990s under the Conservative Government and continued to decline until 2002. It then increased from 2 million households living in fuel poverty to almost 6 million over the course of the Labour Government. As prices have continued to rise, fuel poverty has continued to go up. It is an issue that no party can claim to have addressed, but one that every Member cares about finding the right solutions to.

Important issues were raised in the course of the debate. The hon. Member for Glasgow North West (John Robertson) talked about the difficulty of insulating the types of housing found in his constituency and the hon. Member for Angus (Mr Weir) referred to the problems faced by people on prepayment meters. We heard the continuing debate about off-gas grid customers. We welcome the progress and the interaction we have had with the hon. Members for Ynys Môn (Albert Owen) and for North West Durham (Pat Glass) and my hon. Friend the Member for Hexham (Guy Opperman) to try to ensure that constituents who are off-gas grid get a better deal than they have had so far. We have ensured that the warm home discount will be payable to those who are off-gas grid and have seen good engagement with the Office of Fair Trading, which said following its market study that if there was evidence of market abuse it would carry out a full investigation in that area.

I have asked Members on both sides of the House to provide evidence of how the market is working in their constituencies and, if they find that there is not the range of market providers that the OFT suggests, ensure that that is brought to my attention. If there are problems with delivery in some areas or with advance payments being required, I want cast-iron evidence so that we can decide on the most appropriate way to go forward on those issues.

We have heard discussions about the green deal, which the right hon. Member for Don Valley (Caroline Flint) raised. I well remember a discussion with the right hon. Member for Lewisham, Deptford (Dame Joan Ruddock) in 2010, when she was Energy Minister, after we had put forward an amendment to the Energy Bill. She said that the green deal was not possible and the Labour Government voted it down. We could have had the green deal in place 18 months ahead of where we are now and delivering the sort of help we want to see. It is the most ambitious programme this country has ever seen for insulating our homes, with the ambition of 14 million homes having good energy insulation over the course of the next decade, which knocks into oblivion any other scheme that has been tried by previous Governments. I well remember the current leader of the Labour party, when he was Secretary of State for Energy and Climate Change, telling the House in December 2009 that their ambition was to have five pilots in different parts of the country. We have taken it from five pilots to a nationwide scheme delivering on a level that has never before been possible.

My hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) was absolutely right to draw our attention to the upward pressure on prices. Indeed, the Leader of the Opposition, in his Labour party conference speech last year, said that

“over time there is going to be upward pressure on energy prices.”

Yet from the right hon. Lady there was not a word about the global picture—the fact that towards the end of last year gas prices were 40% up on the year before, after the world’s worst oil incident in the gulf of Mexico, the world’s worst nuclear incident in Japan and a war in the middle east. She wrote that out and acted as if the only reason for prices going up is the greed of the energy companies, saying that we in this debate have to get a sense of reality.

What the Government have been doing, however, is working to remove some of the levies that Labour put in place. Indeed, over the course of this decade we will have reduced people’s energy bills by £100 compared with what they would have been if Labour’s levies had stayed in place. The renewable heat incentive is now to be paid from general taxation, rather than from a levy; and the carbon capture and storage levy, which, in the words of the leader of the Labour party, was going to cost £9.5 billion over the coming years and be paid for by consumers, is no longer on consumers’ bills.

Introducing the green deal, the warm home discount and electricity market reform, rebanding the renewables obligation and changing the feed-in tariffs will all help to bring down consumers’ bills by £100 when compared with what they would have been under Labour’s levies. So where Labour put in place stealth taxes on bills, this Government have now removed them.

As my hon. Friend the Member for Warrington South (David Mowat) said, the issue is not just one of global energy prices, but whether there is enough electricity generation to meet demand. There was not a word from the Opposition about the need to rebuild our energy infrastructure—the £200 billion that is necessary, or the fact that during this decade we have to secure twice as much investment as Labour achieved during the previous decade. In reality, if we do not secure that investment, the lights in this country will go out. The leader of the Labour party, when in government, referred to that as “energy demand unserved”, whereas all of us know that in ordinary people’s language it means power cuts. That is why we have started the most ambitious programme of market reform—things that Labour in government told us were not necessary. The carbon floor price, the capacity mechanism and market reform more generally have all been put in place in less than two years by this new Government.

We are also clearing Labour’s backlogs. Last year, the highest number of planning consents since the Electricity Act was passed in 1989 were granted to get those new projects under construction, and the highest number of oil and gas licences for more than a decade were approved, as we try to get the most out of our indigenous resources. We have already brought forward by 12 months the roll-out of the smart meter programme, because of its importance in giving consumers control over their bills, so it was no wonder that Steve Holliday, the chief executive of National Grid, when interviewed on television a week ago said that we were closer to having an energy policy now than at any time in his lifetime.

My hon. Friend the Member for Ipswich (Ben Gummer) also highlighted the role of the Leader of the Opposition in the issue. It is worth looking at what he has said and where his policy has gone. It has not been a good week for the right hon. Gentleman, and it may not get any better now. In government, he said that there should not be a Competition Commission inquiry, yet the Labour party in August said that there should be, and now it is silent. We do not know its view on that issue now. In government, he said also that the energy companies should not be broken up, but in his conference speech he talked about breaking the dominance of a market that has clearly failed. Now, a few months later, he is silent on that as well.

The right hon. Gentleman talked about pooling electricity generation, yet he did not agree with that in government, and now the Labour party is silent. Ahead of his conference speech, he talked about cutting energy bills for four out of five families, but that has been lost. All we hear today is that people who are over 75 years old should be given extra support: bizarrely, a Labour party giving more support to wealthy 75-year-olds than to 74-year-olds who are struggling to pay their bills.

As my hon. Friend the Member for Truro and Falmouth (Sarah Newton) said, we have in place measures that are working. We have simplified tariffs, and we have helped with switching, although there is more to be done, as my hon. Friend the Member for Norwich South (Simon Wright) said. We have introduced the biggest energy efficiency initiative ever, and there is more help to encourage new entrants—

[Ms Rosie Winterton (Doncaster Central) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.

18:59

Division 421

Ayes: 248

---

Labour: 232
Scottish National Party: 6
Democratic Unionist Party: 3
Plaid Cymru: 3
Social Democratic & Labour Party: 1
Alliance: 1
Green Party: 1
Independent: 1

Noes: 323

---

Conservative: 275
Liberal Democrat: 46

Business without Debate

Wednesday 11th January 2012 Commons Chamber

Delegated Legislation (Committees)

Ordered,

That the Motion in the name of Sir George Young relating to the Electoral Commission shall be treated as if it related to an instrument subject to the provisions of Standing Order No. 118 (Delegated Legislation Committees) in respect of which notice of a motion has been given that the instrument be approved.—(James Duddridge.)

Khat

Wednesday 11th January 2012 Commons Chamber

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

19:15

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

I am delighted to have secured this debate, and I would like to start by paying tribute to the attempts by successive Governments to deal head on with specific issues encountered by minority communities—as we heard only today with the Prime Minister’s commitment to address forced marriage. I must admit, however, to being slightly disappointed that, as a Member of a party that raised the expectations of my constituents by pledging to ban the drug khat while in opposition—a commitment made by no fewer than three members of the shadow Cabinet on three separate occasions—I stand here yet again calling on the Government finally to fulfil their very clear commitment. This is not a partisan issue. Indeed, as I sense we shall see tonight, it unites the House, and it is time that the Government acted.

I have three main points to make but I shall give first a little background, which I hope will mean that the Minister in his response will not need to dwell on the past, but can focus on the future actions his Department intends to take. The distinctive customs and traits of other cultures constitute the vibrant country that we live in today. East African culture has had a particularly far-reaching effect on our society. The religious dedication and hard-working ethos that colour the characters of east Africans have been something to admire over recent years, with independent businesses and community leaders flourishing across towns and cities in the UK. However, with the highs come the lows. One element of east African culture which has long been disputed is the legality of the native east African drug khat. Given the frequency with which khat has been discussed over the past year, I know that most hon. Members are now familiar with the drug, but for the benefit of those who are not, I shall explain in more detail.

Khat plants are grown in Africa and the middle east, and are chewed primarily among Somali, Ethiopian and Yemeni communities. The effects of khat are varied but as a stimulant it creates euphoria and increased sociability—hence its popularity at social gatherings such as weddings. However, the paranoia, aggression and hallucinogenic effects make it extremely disruptive not just to the individual and their health, but to their family and wider society.

Khat is a barrier to inclusion and integration, and it was my sincere impression—and more importantly that of my constituents—that this Government intended to act. This is the second time I have raised the subject of khat in this Chamber and I was deeply encouraged when the Lord Commissioner of Her Majesty’s Treasury, my hon. Friend the Member for Kenilworth and Southam (Jeremy Wright). confirmed in response to the first debate that in February last year the Advisory Council on the Misuse of Drugs was ordered to carry out a full review of the available evidence on khat, and to reconsider the question of controlling it. One year on, and with no report to speak of and none expected anytime soon—indeed, this week the Department confirmed that it will be at least another year—the same amount of limited research is available to us.

From the first mention of khat in Parliament 16 years ago to this very day, Members on both sides of the House have shared their evidence. From Portsmouth to Glasgow, councils and local authorities are standing in isolation, but what we need is a joined-up, united front. My debate today has been sparked by the frustration of my constituents that after 19 months of the coalition Government we appear to be no further forward.

In seeking to progress the matter, I wish to highlight three distinct points. First, I wish to remind my hon. Friend the Minister, for whom I have enormous respect, of the detrimental impact that khat has on issues ranging from health to crime. This will demonstrate how simply kicking this issue into the long grass with further “monitoring” is simply unacceptable. Secondly, I want to revisit the pledge that we made in opposition to act on khat, and to ask why we now seem to be shying away from this pledge. Lastly, I will suggest that tackling khat fits in with this Government’s recent accomplishments in determinedly facing up to the problems that divide our minority communities.

[Jim Shannon (Strangford) (DUP)]

The hon. Gentleman has outlined some of the side effects of the drug, which also include insomnia and depression. Does he feel that those two health effects are sufficient reason to ask that the legislation be changed urgently? Does he agree that it is important that any legislative change should affect all the regions, in conjunction with the devolved Administrations, so that it applies UK-wide?

[Mark Lancaster]

The hon. Gentleman makes an important point; indeed, I will come to the health effects in greater detail shortly. However, let me be absolutely clear that I am pressing for this Government to act in the manner that he suggests.

In my constituency, there are more than 6,000 Somali residents. One of the leaders of the Milton Keynes Somali community, Adan Kahin, has shared many alarming stories with me. His biggest concern is that khat is at the root of family breakdown, owing to issues such as unemployment, economic hardship or aggression arising from heavy usage. Adan has expressed explicit concern about the number of teenage boys whose fathers are absent from the home, instead spending all day chewing in a mafrishi, or khat house. If the Government are truly concerned about the antisocial behaviour witnessed last summer, it is vital that we shine a light into those corners of society. Adan has warned of usage spreading to female members of the community—women who are left alone all day with large numbers of children and little escape. What links all users, however, is the common belief that turning to khat will alleviate the destitution and stress that permeate their lives. I am even aware of instances in well-regarded British institutions where khat has been chewed inappropriately during working hours. There have also been complaints about disturbances caused by delivery of the plant and violence outside mafrishis, with one incident even leading to the death of a seller in my constituency.

Our hands-off policy means that there is absolutely zero quality control. One box of khat checked by port health at Heathrow contained such high levels of pesticides that it was unfit for human use, and that is just one box out of the 10 tonnes arriving each week. Because of the lack of information held on hospital admissions, we are still uncertain about the overall long-term health effects. Problems range from the need for substantial dental treatment, owing to the quantity of sugar and cigarettes consumed, to more serious conditions, such as liver failure and psychosis. It is clear that health practitioners are clueless about how to advise users. Those wishing for a fresh start are stranded, with little or no support—no addiction services or pharmacological agents who can treat khat dependence. Essentially, there are few ways out.

The last review of khat surmised that usage is not prevalent. That may be true for the mainstream population, but not for the demographic concerned. It has been put to me that the Government are not interested because this is perceived as a minority issue. I know that this is not the case, but it is in the Minister’s hands to demonstrate to my community that he does care, as actions, as we all know, speak louder than words.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

I congratulate my hon. Friend on securing this important debate. On that very point, when the Advisory Council on the Misuse of Drugs reported in 2005, it said:

“On the basis of the evidence, the Council recommends that Khat is not controlled”.

However, the following sentence, to which I think he is referring—this is the pertinent one—says:

“Use of the substance is very limited to specific communities within the UK, and has not, nor does it appear likely to, spread to the wider community.”

Does it not appear to him that there is no equality under the law in this case? The last time the issue of khat was analysed, it seems that the ACMD advised that we not ban it, simply because it applied only to that minority community.

[Mark Lancaster]

My hon. Friend makes a powerful point, which simply underlines what I said earlier. I know that the Minister is committed to equality, which is why I am sure he will address the issue when he responds to this debate. Khat does easily not fit a pre-existing drugs profile, given that its use is limited to certain ethnic communities. That is precisely why we must give it special attention.

Let me move on to my second point. The Government’s silence on this issue prompted me to re-read our manifesto, to make sense of the khat conundrum, but it holds no evidence of a U-turn, with other evidence actually pointing to the contrary. In a 2008 article in The Guardian, the co-chair of the Conservative party, the noble Baroness Warsi, claimed that khat was

“far from harmless and should be banned”.

Indeed, the title of that article was “Conservatives will ban khat”—not “Conservatives might ban khat”, not “Conservatives will consider banning khat”, not “Conservatives will seek advice from the ACMD and then ban khat”, but “Conservatives will ban khat”. In a 2006 report entitled “The Khat Nexus”, the then shadow Home Secretary, my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), claimed that a Tory Government would

“schedule khat as a class B drug.”

Those were watertight pledges, made regardless of an ACMD review. So if nothing else, can the Minister explain to my constituents why we now appear to have had a change of heart?

This Government have, however, made a beeline for new legal highs. It is right that we award legal highs that attention, but we cannot ignore the fact that khat, by its very nature, also fits the description of a legal high. I was shocked to learn that cathine and cathinone, two components of khat, are members of the same group of drugs as mephedrone. As components, cathinone and cathine are illegal, as is mephedrone, yet contradicting all common sense, khat, which contains those same substances, is legal. I would like to know how we can continue to promote the hypocritical message that cathinone is okay in one substance but not in another? Just because a drug is legal does not mean it is safe. Tackling new legal highs cannot be a flag-waving policy; we must not forget the question of khat, which has languished in this Chamber year after year. As we take action on those powerful synthetic drugs, khat users and their families watch from the sidelines as their plea goes unheard yet again.

Another reason for my keen interest in this topic is that it is a cross-party point of concern. Wherever large immigrant groups of Somalis settle, the problem of khat is never far behind. This is an issue that the whole House can support, and we should therefore be working towards an integrated solution. It does not help that councils and local authorities are standing alone on the issue. I commend Hillingdon council’s recent report, produced in 2011, which was forthright enough to make recommendations to the Government on matters ranging from classification to temporary bans.

Unlike the UK, some countries are acting. As of yesterday, even the Netherlands—a country renowned for its liberal drugs policy—has banned khat. The UK is now the only legal point of entry for khat into Europe, and that is an embarrassing position to find ourselves in. The Dutch Government have clearly stated that 10% of users, who are predominantly Somali, develop problems with khat. I want to ask the Minister what is preventing us from safeguarding our citizens in the same fashion. The most disturbing comparison comes from Somalia itself: even that war-torn country has made moves to control khat. Islamist courts there are working to put a stop to the khat scourge, and to promote a more stable and cohesive society. What we need is joined-up thinking, and top-down leadership to reassure councils and communities that they are not alone. This is an ideal opportunity for the Government to prove to our communities that we recognise—and, indeed, will tackle—the problems on their doorstep.

That leads me nicely on to my third and final point, which is the commendable way in which this Government have faced up to issues that traditionally effect ethnic minority communities. We have not shied away from those problems, which are so often left to rot at the core of our society. We have rightly begun to take steps to address forced marriage in this country—an issue that has shocked the nation and that works directly against the values and self-worth that we teach our young women, of every background, in British schools. The work that we are promoting on the subject of domestic violence will have a direct effect on majority and minority ethnic communities.

That is not all. I was encouraged to read in the Conservative manifesto that we would be promoting improved community relations for minority ethnic communities, which action on khat will help to deliver. In my own constituency, good work is being done to address those marginalised, sometimes controversial, issues; acting on khat will not be out of step with the current momentum. We can prove to those who doubt our intentions that when we make promises, we stick to them, which is why I am sure the Minister will agree that it is important, given our previous promises, that we are seen to act on khat.

Finally, I want to bring the debate right up to date. We are standing here today, almost one year on from the report being ordered, with no new evidence from the Advisory Council on Misuse of Drugs. Since its appearance on the British crime survey of drug misuse, the usage of khat has increased. We are unaware of the percentage of khat imports that are being used to extract cathinone and cathine, and in turn, being illegally re-exported. Also, we have only anecdotal evidence that usage is spreading to the indigenous population. Why have we not commissioned a report to explore that threat?

Today, I want to know why my Government’s previous enthusiasm for acting on khat has waned so suddenly. May I ask the Minister to consider how I should respond when my constituents ask again what the Government are doing to protect future generations from the dangers of khat? And—if I may have the audacity to predict his response—may I ask whether he realises that, in order to get the evidence that his Department repeatedly demands, procedures have to be put in place first, in order to reap that information? Banning khat is unfailingly the end-state that I and the community want from this Government, as previously promised, but I wish to outline other possible interim measures.

[Jim Shannon]

The drug khat is controlled in America, Canada, Norway and Sweden, to mention but four examples. Does the hon. Gentleman feel that the Government could make contact with those countries to ascertain how they went about criminalising the drug? Might this not provide a way forward on the basis of information that might be helpful for the Government?

[Mark Lancaster]

I thank the hon. Gentleman for that suggestion, which underlines the ridiculous point that, following the Dutch move only this week, khat is controlled everywhere in the western world apart from in the United Kingdom.

These are the interim suggestions I would make to the Minister—hopefully to be implemented before we get around to banning khat. Better provisions must be made for addict support. The most effective way of delivering this would be to provide targeted training to those already working within areas affected by khat, to deal with it in a culturally acceptable way. Community mobilisers who already assist with housing, health and education are incredibly well placed to co-ordinate this. Evidence suggests that heavy users are unlikely to seek help, which means that we must do more to reach them.

Secondly, a full health practitioners’ guide to khat and its health effects should be prepared and delivered to GPs and pharmacists nationwide. Thirdly, greater attention must be given to the importation of khat at ports. Finally, the disruption caused by khat houses and mafrishi congregations can be controlled through licensing. A minimum age should be introduced to protect young British citizens from the harm caused by the drug. Checks must be carried out on premises to ensure that they comply with health and safety standards.

After years of talk on khat, if my Government wish to retain the trust of the east African community, the time has come to follow the rest of the western world and act on khat.

19:31

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

This has been an interesting and impassioned debate, and I would like to take this opportunity to thank my hon. Friend the Member for Milton Keynes North (Mark Lancaster) for continuing to raise this issue. I am mindful that this is the second debate he has secured, having previously spoken on the same topic in a pre-summer recess debate last year. He represents well and effectively his constituency and these particular parts of the community in it by seeking to draw attention to this issue this evening.

My hon. Friend said that there was some kind of formal commitment and he drew attention to statements of shadow Ministers in the Opposition prior to the last general election. I would say to him, however, that there was no specific manifesto commitment and no provision was made in the coalition programme for government for the classification of khat. I would like to assure my hon. Friend, the community he represents and other communities and interested parties that the Government are concerned about this serious issue. It is a matter we want to investigate properly and effectively by closely examining the problems highlighted this evening; we do not want to kick this into the long grass.

We have heard today about real public concerns over health issues—sleep deprivation, loss of appetite, oral hygiene and mental health—and particularly about the social harms associated with the use of khat. Although its use has a cultural context and can be socially accepted among Somali, Yemeni, Ethiopian and Kenyan communities in the UK, many concerns have been raised within these communities. Higher prevalence of khat use among them and its potential for misuse might well disproportionately affect the social cohesion around khat users and their families, as well as their quality of life within wider UK society. We need fully and properly to understand this dimension.

Under the Misuse of Drugs Act 1971, the Government are required to look to the Advisory Council on the Misuse of Drugs to provide advice on drug-related issues, including on the case for control based on available evidence at the time of its consideration.

As my hon. Friend knows, the ACMD last formally considered the misuse of khat in 2005, when it advised against bringing the plant under the control of the 1971 Act and made recommendations for health and prevention approaches responding to local community needs, which the last Government accepted. In the light of those 2005 recommendations, the handling of khat-related issues has focused on the tailoring of health and education responses to local community needs, such as the availability of appropriate drug prevention materials and information to raise awareness among practitioners and khat-using communities.

[Mark Lancaster]

Will my hon. Friend confirm that the Government are under no obligation to follow the ACMD’s advice? The last Government did not do so when it came to the reclassification of cannabis.

[James Brokenshire]

The Government will consider the evidence and recommendations supplied to it by the ACMD. The ACMD has an advisory role in that context and Ministers make the ultimate decision, but we have stated in our working protocol with the ACMD that we should properly consider the advice that we are given, and I think that that is the appropriate course.

The FRANK service provides information and advice on khat and harms associated with its use and misuse, directed at young people, their parents, and those working with them. Treatment for khat misuse typically consists of psycho-social interventions and talking therapies to help change behaviour, and drug action teams are expected to review commissioning of local services in order to respond in the best way to the diverse needs of their local communities. My hon. Friend has specifically sought to draw attention to that diversity this evening.

[Mark Lancaster]

Will the Minister give way?

[James Brokenshire]

I will give way once more.

[Mark Lancaster]

Can the Minister confirm that FRANK offers that information and advice in the native languages of the east African communities?

[James Brokenshire]

I am told that a leaflet has been published in English and Somali, that a range of other drug information leaflets have also been published in Somali, and that the helpline is equipped to take calls in Somali via a translator. However, I understand my hon. Friend’s wish to ensure that the service is provided in a way that makes it accessible to those who may be in the greatest need of its support, and I agree with him that more needs to be done.

The Government are concerned about khat use—particularly among young people—and about the societal impact on the most affected communities, and they adopt a serious approach to their role by taking appropriate action to protect all sections of the community from harms caused by drugs. Since the ACMD’s last review in 2005 there has been an advance in the evidence base, which is why I requested the ACMD to undertake a comprehensive review to update its 2005 assessment. The chair of its khat working group has told me that the planned process of evidence-gathering for the review will be rigorous, and will include engagement with communities and stakeholder organisations and a public evidence-gathering meeting.

The ACMD review will cover issues including classification of khat under the 1971 Act, reporting the prevalence of khat use, identifying key khat-using populations, identifying and quantifying harms associated with khat use—specifically social harms—developing an understanding of responses to khat use through services and public information campaigns, and considering the nature of the khat trade, including international trafficking. The chair of the working group has indicated that he would be pleased if my hon. Friend put him in contact with constituents who have evidence to contribute to the review. Furthermore, the ACMD would welcome sharing its terms of reference for the review and its planned process for evidence collation. I would certainly encourage my hon. Friend and other Members present to get involved and support that. My right hon. Friend the Home Secretary will emphasise in her annual commissioning letter to the ACMD, which will be issued shortly, the priority that this work should now continue to have as part of the ACMD’s work programme in order to ensure its advice is delivered on time.

We have published two studies on khat, one in October 2010 and the other in July 2011. They reviewed perceptions and international evidence on the link between khat use and social harms, and included an overview of the evidence in respect of legislative approaches adopted abroad. These studies have been shared with the ACMD to inform its review. We identified research gaps, which was why those two studies were commissioned. We anticipate that they will help inform the ACMD’s review. We will ensure that there is appropriate information and we encourage others to participate in the review.

The October 2010 study of perceptions of social harms found that khat use was widely socially accepted within Somali, Ethiopian and Yemeni communities, and that there was an increased prevalence of use including among women and young people. There was widespread support for some level of Government intervention, but there was no consensus, although there was a range of suggestions, including regulation of trade, local investment in tailored services and more research and better statistics, and some called for control.

The July 2011 review of literature on social harms found no robust evidence either for or against in respect of the link between khat and social harms, but there were perceptions of social harms among the UK’s immigrant Somali, Yemeni and Ethiopian communities although there was little evidence of a clear causal relationship to support this view. Reference was made to stronger evidence on the health harms of khat consumption.

The Government have made clear in our drug strategy a commitment to a drug policy that is based on evidence and outcome. We have placed proper consideration of the advice provided by our independent experts, the ACMD, at the heart of enabling the delivery of the strategy. The Government and the ACMD have also agreed a new working protocol, which has been placed in the House Library, setting out a framework for mutual engagement in line with statutory duties. I am sure that my hon. Friend shares my anticipation at the publication of the ACMD’s findings and appreciates the importance of considering the advice of our experts before deciding on next steps, in particular any legislative intervention. My hon. Friend will not expect the Home Secretary to prejudge the outcome of this advice and preclude the consideration of evidence that will be available then. I take this opportunity to invite Members to direct any representations and evidence in respect of khat to the secretariat of the ACMD, based at the Home Office.

We take this issue very seriously. I commend my hon. Friend on the way in which he has approached it and his continued focus on it. We will not kick it into the long grass. We remain focused on this matter and will take action if that is judged appropriate.

Question put and agreed to.

19:44

House adjourned.

Division 418

Ayes: 329

---

Conservative: 265
Liberal Democrat: 52
Democratic Unionist Party: 7
Labour: 1
Plaid Cymru: 1
Independent: 1

Noes: 207

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Labour: 202
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Alliance: 1
Green Party: 1

Westminster Hall

Wednesday 11th January 2012 Westminster Hall

Wednesday 11 January 2012

[Philip Davies in the Chair]

North Korea

Wednesday 11th January 2012 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Newmark.)

09:30

[Fiona Bruce (Congleton) (Con)]

It is a pleasure to speak under your chairmanship, Mr Davies, and to have secured this debate at such a momentous time, so soon after the succession of Kim Jong-un, the new leader of North Korea, following the death of his father, Kim Jong-il, last month. It was even more gratifying to hear, only yesterday, of the North Korean Government’s announcement that they will grant an amnesty for prisoners to mark the birthdays of those two leaders. We look forward to hearing more news about the prisoners to be released.

[Jeremy Lefroy (Stafford) (Con)]

On that amnesty, does my hon. Friend hope for the release of Dr Oh, who has not seen his wife and daughters for 15 years?

[Fiona Bruce]

I thank my hon. Friend for raising that very important case, on which a number of my colleague parliamentarians have made representations. I believe that the Minister is aware of that case, and I look forward to hearing his comments. I also hope that further representations can be made to the North Korean Government about the release of Dr Oh’s family as part of the amnesty.

The amnesty announcement emphasises what many see as a fresh opportunity, at the start of a new era, to forge further relationships with the people of North Korea. That is the hope of many people in Britain who have worked often for years to develop relationships, and indeed friendships, with people in North Korea to share knowledge, understanding and support. Several of my parliamentary colleagues from the all-party group on North Korea have visited the Democratic People’s Republic of Korea—the DPRK—in recent years, as have many other delegations from the UK. Interestingly, in 2010, that included the Middlesbrough Ladies football team, who apparently attracted a 20,000-strong crowd of spectators.

On a more modest level, but no less importantly, the Speaker of the House of Commons has met the Speaker of the North Korean Assembly, Choe Thae-bok. Mr Speaker was able to raise human rights concerns with his DPRK counterpart in a very constructive discussion. Most recently, the DPRK authorities extended an invitation to the Archbishop of Canterbury to visit their country soon, and I hope that he accepts.

The most recent visit of the all-party parliamentary group was in autumn 2010, after which it produced a report, “Building Bridges Not Walls: the Case for Constructive, Critical Engagement with North Korea”. The report describes a welcome commitment from DPRK officials to dialogue, with particular reference to negotiating a peaceful resolution as regards the relationship between North and South Korea. “Building Bridges Not Walls” also states that the APPG had

“the opportunity to see some encouraging developments, including the establishment of a Russian Orthodox Church in which Russian diplomats freely worship; a Protestant seminary; the work of British Council teachers; English-language teaching at Kim il-Sung University…a newly opened e-Library at Kim il-Sung University; and the establishment of the impressive Pyongyang University of Science and Technology (PUST), with a faculty of teachers from the United States, the United Kingdom and the Netherlands. These are welcome developments which we hope will…contribute towards the establishment of a more open and prosperous society for all the people of North Korea.”

I believe that I speak on behalf of many people in this country who fervently hope that the accession to leadership of Kim Jong-un will further pave the way for that.

The APPG delegation also voiced concerns that cannot be batted away with diplomatic niceties about the need to discuss grave human rights issues in North Korea through a process of constructive critical engagement. That should be done in the same way that President Ronald Reagan and Margaret Thatcher established the Helsinki process with the Soviet Union. The APPG reports says:

“It is time for peace, and ‘it is time for Helsinki with a Korean face’.”

In other words, as the human rights researcher David Hawk says, a process is to be encouraged that would

“pursue peace, engagement, and reconciliation in association with the promotion and protection of human rights”.

That sums up more eloquently than I ever could the process that many in Britain desire to see develop in this new era. I would appreciate the Minister’s comments on how the British Government can help to facilitate dialogue to that end.

I turn to the protection of human rights, on which it has to be said that North Korea has, by any international standard, a deplorable record. I was stirred to call for this debate by a visit two months ago to the UK Parliament by a remarkable young man who is now in his late 20s, Shin Dong-hyuk. I understand that he is the only person ever to have escaped from a North Korean prison camp. On hearing Shin’s story, I was moved, by compassion for the North Korean people, to highlight their dignified suffering in order to encourage support for them in their plight. May I record that I called for this debate holding no hatred of the people of North Korea? I am motivated by a deep love for the North Korean people, and by concern for their needs and their deep suffering over decades.

[Mr Robert Buckland (South Swindon) (Con)]

Will my hon. Friend give way?

[Fiona Bruce]

I will certainly give way to my hon. Friend, particularly as he is chairman of the Conservative party human rights commission, of which I am privileged to be a serving member.

[Mr Buckland]

I congratulate my hon. Friend on securing the debate. May I reinforce her remarks about the evidence of Shin Dong-hyuk, which was not only moving but informative? He taught us that life in the prison camps was very often the only way of life that families who had been born into captivity knew. When he came to the west, he learned for the first time about the Nazi holocaust, and it instantly reminded him of some of his experiences in North Korea. Is that not very powerful testimony of the depth of deprivation of human rights from which the people of North Korea are suffering?

[Fiona Bruce]

My hon. Friend makes an excellent point. If you will indulge me, Mr Davies, I shall shortly go into further details of Shin Dong-hyuk’s testimony to us.

It was in meetings with the Conservative party human rights commission, and at an event that I chaired on behalf of the Henry Jackson Society, that Shin Dong-hyuk told his life story. It is the personal testimony of someone who was born into a North Korean prison camp, lived there for 23 years and then escaped. As my hon. Friend says, his story was authoritative, valuable and deeply moving.

Shin Dong-hyuk was born in camp 14 in 1982. Shin described the conditions he endured for the first 23 years of his life. When he was 14 years old, his mother and brother were executed in front of him because they tried to escape. He was held for seven months in solitary confinement. The torture he faced was unimaginably inhumane. With extraordinary dignity and lack of bitterness, he described to us how he was hung upside down by his legs and hands from the ceiling, and on one occasion his body was burned over a fire. His torturers pierced his groin with a steel hook; he lost consciousness.

On another occasion, Shin was assigned to work in a garment factory. Severe hard labour is a common feature of North Korea’s prison camps. He accidentally dropped a sewing machine, and as a punishment the prison guards chopped off his middle finger. According to Shin, couples perceived by the authorities to be good workers are arbitrarily selected by prison guards and permitted, even forced, to get married, with a view to producing children who could, in turn, become model workers. Children born in the prison camp are, like Shin, treated as prisoners from birth. As a child in the prison school, Shin recalled the teacher, who was also a prison guard, telling the children that they were animals whose parents should have been killed. He told them that, by contrast, he, the teacher, was a human, and that they should be grateful to be alive.

Shin also recalled seeing, while at school, a seven-year-old girl in his class being severely beaten because she was discovered to have picked up a few grains of wheat on the way to school. The beating continued for two hours, and her classmates had to carry her home. She died the next day.

In 2004, at the age of 22, Shin met a fellow prisoner who had seen life outside the camp. This prisoner described the wider world to Shin. Initially, Shin did not believe him. His entire life until then had been spent behind the barbed wire of the prison camp, and he thought that this was the extent of life. Eventually, the other prisoner convinced him, and Shin’s curiosity developed. Together, they decided to try to escape, and in 2005 they put their plan into action. What then followed is a story of agony and ecstasy. In a written testimony available on the internet, Shin recalls:

“I had no fear of being shot at or electrified; I knew I had to get out and nothing else mattered at that moment. I ran to the barbed wire. Suddenly, I felt a great pain as though someone was stabbing the sole of my foot when I passed through the wire. I almost fainted but, by instinct, I pushed myself forward through the fence. I looked around to find the barbed wire behind me but Park”—

his friend—

“was motionless hanging over the wire fence! At that desperate moment I could afford little thought of my poor friend and I was just overwhelmed by joy. The feeling of ecstasy to be out of the camp was beyond description. I ran down the mountain quite a way when I felt something wet on my legs. I was in fact bleeding from the wound inflicted by the barbed wire. I had no time to stop but sometime later found a locked house in the mountain. I broke into the house and found some food that I ate, then I left with a small supply of rice I found in the house. I sold the rice at the first mining village I found and bribed the border guards to let me through the North Korean border with China with the money from that rice.”

Shin described to us first seeing the country of North Korea outside the prison camps, and said that, to him, it looked like paradise.

Shin’s story will be published in March this year, in a book called “Escape from Camp 14”. I hope that many of us will read it. I am aware that the Minister met Shin, and I look forward to hearing his reflections on their discussions. The Archbishop of Canterbury and Mr Speaker also met Shin, and expressed what an impact that encounter had on them. Shin, however, is by no means the only North Korean defector to have spoken in Parliament; earlier this year, Kim Hye-sook addressed a meeting organised by the APPG. She spent 28 years in the North Korean prison camps, and was first jailed at the age of 13. Kim was forced to work in coal mines even as a child, and witnessed public executions.

What Shin Dong-hyuk and Kim Hye-sook have in common is that they were victims of North Korea’s appalling “guilt by association” policy, which punishes people for three generations for the alleged crimes of a family member. Kim’s grandfather had gone to South Korea during the Korean war, and for that reason her family were regarded as hostile elements by the regime, and jailed. According to lists of detainees, which I have been sent, many others in the camps are jailed for being Christian.

It is estimated that there are approximately 200,000 prisoners in such camps, and over the years human rights reports by organisations including Amnesty International, Human Rights Watch and Christian Solidarity Worldwide have catalogued stories from survivors of the camps, who testify to the widespread use of forced labour, executions, torture, rape, sexual violence, forced abortions, infanticide and religious persecution. One, Kim Wu-yeong, told CSW:

“Christianity is public enemy number one in North Korea. If someone is a Christian in North Korea they are a political enemy and will be either executed or sent away to a political prison camp.”

Further information can be found in the book “North Korea: a Case to Answer, a Call to Act”, published by CSW in 2007 and available on the internet.

One of the most remarkable books I have ever read is “Nothing to Envy: Ordinary Lives in North Korea” by Barbara Demick. If hon. Members read just one book on North Korea, I would recommend this one. It is available from the Library and tells the life stories of several escapees from North Korea to South Korea—people who have not lived in prison camps, but who have none the less suffered greatly over the past several decades in many ways, in a country where freedom of speech and movement is minimal and malnutrition is commonplace. I remember reading and being so saddened by one mother’s story; I identified with her. In the 1990s, when there was a severe famine in the country, she was forced to search the countryside for grass and bark, which she would mash up and feed her family. Both her husband and her loved son died during that famine.

Despite the passing of that terrible famine, malnutrition still affects many millions of people who live in North Korea. The current humanitarian situation is dire and food aid is desperately needed. The World Food Programme and UNICEF conducted an assessment last year that shows that food needs are acute. The problem has continued over many years with such serious implications for growth that the North Korean army has, I understand, now reduced its height requirement for men from 4 feet 8 inches to 4 feet 3 inches. Our fellow men and women are living at this time, in the 21st century, when there is so much plenty in so many other countries, but they live in another part of the world with such shortages in a country that, as the book “Nothing to Envy” describes, was once a developing nation but is now going backwards. Compassion should surely move us to do all that we can to provide food aid and to support international aid agencies that are willing to help.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Lady on securing the debate. She is moving on to one of the most important issues on this subject—humanitarian assistance. As well as making it very clear to the new regime in North Korea that the brutality and the other matters that we are all very deeply concerned about need to stop, we need to ensure that humanitarian assistance gets to the people of North Korea, as opposed to the Government and the regime, which could well be entering a new, dangerous phase.

[Fiona Bruce]

The hon. Gentleman makes a good point. One of the issues that I will ask the Minister to address is the monitoring of humanitarian food aid across the country. Currently, food rations are distributed by the DPRK under the North Korean Government’s food distribution programme, on which millions of people are dependent, but it meets less than half the daily calorific needs of most recipients.

To underline the urgent need for food, I will relate some of the descriptions given to the APPG at a meeting here in Parliament, just a few weeks ago, by Baroness Amos, the UN Under-Secretary General for Humanitarian Affairs and Emergency Relief Co-ordinator, after she visited the country late last year. I hope to report what Baroness Amos said accurately. She stated that the background to her visit was that in 2011, for the first time in 16 years, the North Korean Government made an international appeal for assistance—welcome news. By a UN assessment, she said that 16 million people in the DPRK are now in need of food aid and that the number is increasing because of the growth rate, especially in women and children.

Baroness Amos recounted that during her visit she was at pains to stress to the North Korean Government that humanitarian aid is impartial. She visited a hospital, a market, a biscuit factory, a Government food distribution point and a co-operative farm. She reported a situation of chronic poverty and underdevelopment, with an annual gap of about a million metric tons in the amount of food needed, according to the DPRK’s own targets. People live mainly off maize, cabbage and occasionally rice. There is no oil, although if people live near the sea, there is occasionally fish, but no meat. She asked some mothers when they last had an egg: no one could tell her. So there is virtually no protein for people in need of food aid. In fact, there are hardly any animals to be seen.

The nutritional deficit in children is acute, and there are major structural problems with food production, with severely low production from land and an almost total lack of mechanisation. Indeed, another visitor to North Korea, who went last month, told me this week that she had seen only three tractors over several days of travelling across the countryside.

Transport is a major problem. Baroness Amos reported seeing steam lorries—something she had never seen anywhere else in the world—where coal is burnt on the back of lorries to create steam and three out of four of them appeared to be broken down.

Food for much of the population comes from the public food distribution system and is obtained on production of ration cards. People receive about 200 grams of food a day, on average, although the DPRK’s own target is about 600 grams. Needs are particularly acute outside the capital Pyongyang. People living in Pyongyang rarely travel out of it, and vice versa, so the desperate needs of those outside the capital are perhaps not as well understood as they could be.

Will the Minister advise us about the endeavours of the British Government to facilitate the provision of food aid to North Korea, either directly or through international aid agencies? Will he press for unrestricted access for humanitarian aid organisations to all parts of the country and inform us what the British Government are doing, by themselves or through the European Union or United Nations, to address the crisis? What efforts have been made to ensure monitoring of aid and what assessment have the Government made of the effectiveness of international aid and the ability of international humanitarian organisations to reach North Korean people in need?

I want to highlight two other concerns: the situation of abductees and the plight of refugees. The Minister will, I hope, be familiar with the case of Dr Oh, who has been mentioned. There are many other cases. Will the Minister tell us what the latest position is regarding Dr Oh’s family and what efforts the British Government are making to press the North Korean authorities to account for the large number of foreign abductees, believed to run into several thousand, and to release them? What steps can the British Government take to work with Governments of countries whose citizens have been abducted and with international organisations such as the UN to secure their release?

Additionally, what steps can be taken to urge China to desist from the forcible repatriation of North Korean refugees and to tackle the plight of refugees who subsequently suffer at the hands of human traffickers? The number of women affected in that way runs into tens of thousands.

[Andrew Selous (South West Bedfordshire) (Con)]

I congratulate my hon. Friend on her speech, which I am listening to with interest. Does she agree that there has been quite a lot of discussion in the media about nuclear and military issues and the backward economic situation, but that human rights in Korea has had little exposure? Does she agree that that needs to be remedied urgently?

[Fiona Bruce]

I agree. I hope that this debate will raise awareness of those two key issues.

The former UN special rapporteur for human rights in North Korea, Mr Vitit Muntarbhorn, has called on the international community to

“mobilise the totality of the UN to promote and protect human rights in the country”.

Will the Minister advise us whether the British Government would consider taking a lead to seek the establishment of a UN commission of inquiry in this respect on the subjects that my hon. Friend mentioned? In particular, what steps is the Minister taking to press the new leadership to open up access to international human rights monitors, including the UN special rapporteur for human rights, who has repeatedly been refused access? Can the Minister say whether any progress has been made in negotiation and dialogue with the DPRK authorities by the new UN special rapporteur to the DPRK?

With reference to the prison camps, such as the one Shin Dong-hyuk described, I understand that the North Korean authorities regularly say that these are not prisons as described. Will the Minister, through a process of Government engagement between the two countries, endeavour to arrange access to some of the camps for British parliamentarians, such as those from the APPG, who have already sensitively endeavoured over several years to build constructive relationships with North Korean people? In this regard, I pay tribute to the chairman and founder of the APPG for North Korea, Professor Lord Alton of Liverpool and his colleague in the House of Lords, Baroness Cox.

I welcome the British Government’s improved funding support, despite their austerity programme, for the British Council’s English teaching work within North Korea. It is particularly pleasing to note that English is now being taught as the second language in the DPRK. I should particularly like to offer my congratulations on the recent acceptance of the first two scholars to study at Cambridge university, which is to the credit of our Government, the Foreign Office and those scholars.

I welcome the Minister’s thoughts on what can be done to encourage the flow of information from the outside world into North Korea, perhaps through support for radio broadcasting.

I understand that there are some 400 North Korean refugees here in the United Kingdom. The book, “Nothing to Envy”, which I have mentioned more than once already, describes how difficult modern life, with all its choices and complexities, is for North Korean refugees. What support is available for them in the UK to help them prepare for a better future for themselves and their country? Is there dialogue between the Government and those refugees to aid our country’s understanding of North Korea and in turn help build relationships with that country?

I thank the Minister for meeting Shin Dong-hyuk personally. I believe that that is an indication of his sincere concern about these issues. Will he also consider meeting Dr James Kim, a remarkable man who has founded Pyongyang university of science and technology—PUST—within the past two years, when he visits Parliament on 15 February? Perhaps after hearing of the wonderful story of hope that the establishment of that university provides, the Minister may consider making representations to the Department for International Development to give support to PUST, if not on a wider basis for North Korea.

It is encouraging that the UK Government have developed, over the past 10 years, diplomatic relations with the DPRK. I pay a particular tribute to our diplomatic staff in North Korea, especially our new ambassador, Karen Wolstenholme, who I am sure will follow in an equally exemplary manner her immediate predecessor in the British embassy in Pyongyang, Mr Peter Hughes, whose ongoing concern for the people of North Korea has been evident to me whenever I have had the pleasure of meeting him.

What a positive step it would be if the United States established diplomatic relations with the DPRK and thereby effectively formally ended the Korean war. Can the Minister advise us what steps, if any, the British Government may be taking to encourage the Americans in this respect?

Shin Dong-hyuk told me that the North Korean people cannot change their situation by themselves. They need help from the international community. I hope that the Minister gives us an indication of what we can all do to give more hope to the people of North Korea.

09:58

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Congleton (Fiona Bruce) on securing this debate and on bringing this matter to Westminster Hall for consideration. I also commend her on her passion and compassion on behalf of the people of North Korea and for making some salient, pertinent points about conditions in North Korea.

I wish to focus on human rights, specifically how people with Christian beliefs are affected. Perhaps the only subject at school that I excelled at was history. I was interested in the history of the second world war and the Korean war. In my constituency there are still some Korean war veterans, who tell stories about the critical battles that they fought and how they came through. No one could fail to be horrified by the stories they told. Today, when we look at North Korea, we see things getting progressively worse, and I want to focus on that.

Yesterday, just before I left the hotel where I was staying, on one of the TV news channels there was a story about the new leader of North Korea, Kim Jong-un. There was this guy on a horse galloping around, looking well fed—there is certainly no shortage of food in his house—surrounded by immense numbers of people, who were supportive, all smiles and cheering him on. They were all wearing army uniform which tells us a lot. He appeared to be a confidante of many people, and he was looked on as a leader for change, perhaps to change things for the better. That, however, was a persona for TV, a story that the North Koreans wanted to put forward. The reality in North Korea is very different for people who do not necessarily accept his leadership or the authoritarian regime that he supports.

Any number of charities working to end the persecution of Christians highlight what happens in North Korea as some of the most horrific acts of persecution anywhere in the world. Open Doors and Release International have a chart of countries in the world, giving their level of persecution. In No. 1 position, at the top of the chart—not the championship or premier league winners, but at the top of the persecution league—is North Korea, in the persecution of its people and how it affects them.

[Dr William McCrea (South Antrim) (DUP)]

I join my hon. Friend in congratulating the hon. Member for Congleton (Fiona Bruce) not only on securing the debate but on her choice of subject. My hon. Friend has raised his concerns about rights and so on, but on 19 December, the UN passed a resolution by majority, with 51 abstentions, that expressed the Assembly’s

“very serious concern at the persistence of continuing reports of systematic, widespread and grave violations of civil, political, economic, social and cultural rights”.

Is my hon. Friend concerned that there is no mention of religious rights?

[Jim Shannon]

I thank my hon. Friend for bringing that matter to my attention, and to the attention of everyone in the Chamber. I am concerned about that, and I hope to use this opportunity, as others in the House will do today, to highlight the issues on behalf of Christians, who need to know that their human rights and individual needs are being represented by people on the other side of the border who have not forgotten about them.

Release International has stated that North Korea has one of the most repressive regimes in the world, and the extent of that repression is unknown because the country is fiercely independent, politically isolated and closed to all countries except China and Russia. The hon. Member for Congleton suggested what our Government might be able to do on behalf of people in North Korea whose human rights have been violated, and perhaps we need to ask Russia and China to be the main players in any process.

Defectors describe a society in which human rights do not exist and freedom of association, worship, movement and even thought are denied. Such claims are credible in the light of the fact that North Korea can make use of the world’s fifth largest army, of 1.2 million soldiers and 8.3 million reservists—9.5 million people. The hon. Lady referred to the height requirement being reduced, but one thing we always see when the soldiers are marching is that they are fit, healthy and determined. North Korea has a state monopoly of the media—TV, radio and the press—that indoctrinate the population with party propaganda, and the country also has 14 concentration camps, some of which hold as many as 50,000 prisoners. One has to feel compassion for people in those prison camps who might feel that they are forgotten, so it is important to ensure that they are not forgotten.

North Korea’s founder, Kim Il-sung, referred to as the so-called great leader, is comparable to Joseph Stalin or Mao Tse-tung as an ideologue who controlled the masses through propaganda, revolutionary zeal, ruthless elimination of opposition and the sacrifice of large numbers of the population to starvation due to economic mismanagement. He used a philosophy known as juche—self-reliance and permanent revolutionary struggle—to achieve a national unity that has produced an isolated nation that many call the hermit kingdom. His son, Kim Jong-il, the so-called dear leader, continued his father’s policies but, if anything, more destructively. After decades of economic mismanagement and resource misallocation, North Korea has relied heavily on international aid to feed its population since the mid-1990s. Chronic food shortages and widespread malnutrition are rampant. My hon. Friend the Member for East Londonderry (Mr Campbell), in his intervention, spoke about food aid and how it could best be used. North Korea’s history of regional military provocations, the proliferation of military-related items, the development of long-range missiles, programmes for weapons of mass destruction and massive conventional armed forces, is of major concern to the international community. We in this country cannot ignore the effects of that.

As juche becomes increasingly weak and deluded, North Korea and its regime appear ever more vulnerable. We are now in a state of limbo after the death of Kim Jong-il as to the intentions of his son, Kim Jong-un, who was educated in the west but, according to The Wall Street Journal, is depicted by US intelligence as

“a volatile youth with a sadistic streak who may be even more unpredictable than his late father”.

The last and most extreme of the world’s dictatorships seems set to run as before. The dictatorship is certainly not over with the demise of his father. Citizens are obliged by law to display portraits of the late Kim Il-sung and Kim Jong-il in their homes. It is considered highly subversive to have a religious faith and, as stated by the hon. Member for Congleton, anyone refusing to accept the Korean leader as the supreme authority is likely to be punished with imprisonment, death or simply disappearing.

The precise number of Christians in North Korea is unknown. Before the communists came to power, numbers were higher than today but, during the Korean war of 1950 to 1953, many fled to South Korea or were martyred. Those said to remain in North Korea are forced to hide their faith or face terrible consequences. The debate information pack included many press stories of those who tried to escape and who were shot and killed as a result. People have reportedly been executed merely for owning a Bible. Every one of us has a Bible in the house, probably more than one, and we have that freedom of expression. In some countries people do not, and North Korea is one of those countries. Many Christians have been sent to concentration camps as political prisoners for their beliefs—for having a belief in God—and have been subjected to brutal treatment in appalling conditions: torture, abuse, execution or simply being worked to death. There are an estimated 50,000 people in those concentration camps.

The regime still maintains the facade of religious freedom, and in 1998 opened three churches in Pyongyang. However, they are widely considered to be showcases for the benefit of foreigners and those who visit the country, demonstrating a façade of religious opportunity, and sermons contain political material supporting the regime. Christianity as we know it, and as is expressed in the Churches of the United Kingdom and elsewhere in the world, is not what happens in North Korea.

The Harsh regime and grinding poverty have forced thousands of North Koreans to try to escape to China. It is estimated that as many as 350,000 North Koreans live in China as illegal immigrants, with many more in South Korea and other countries. The Chinese authorities stubbornly uphold their policy of repatriating defectors found in their territory, even though repatriated North Koreans face notoriously harsh treatment. The North Korean authorities allegedly pay Chinese informants to denounce defectors, so defectors in China are forced into hiding and, often, into the clutches of ruthless individuals who trap them into forced labour or the sex industry. Some time ago, I watched a TV programme—again, a news item—that showed how people escaping North Korea left one set of horrific circumstances for another, and were exploited by those who take advantage of the vulnerability of such people. Pressure needs to be applied, so can the Minister, if possible, outline clearly what discussions have taken place with China and how we intend to help more? Thankfully, some of those who escape have turned to Christ after meeting missionaries who share the gospel with them. We as a nation must be ever mindful of those who are less well off and those who need help and support. The House and MPs who represent areas such as mine, and many others, have a duty to ensure that we do our best for them. We should apply any pressure we can on China and Russia to play their part in ensuring that change is brought about in North Korea.

I will continue, as will many other hon. Members, to pray daily for people in North Korea. I hope that something practical can be done, and it should be done if there is a possibility of success. I commend the hon. Lady on introducing the debate, and I look forward to the support of the House for the issue.

10:10

[Martin Horwood (Cheltenham) (LD)]

It is a pleasure to serve under your chairmanship, Mr Davies, in a debate on a subject other than Europe. I pay tribute to the hon. Member for Congleton (Fiona Bruce) for securing the debate, and for the passionate and compassionate way in which she introduced it. Her speech was one of the most moving that I have heard this Parliament, and some of the points were very well made. The story she told of Shin Dong-hyuk was inspiring and horrifying in almost equal measure.

Many international comparisons have been made of the regime in North Korea. The hon. Member for South Swindon (Mr Buckland) said that it stood comparison with the Nazis, and the re-education and prison camps do indeed bear comparison with those under Hitler. In North Korea, there are disappearances, torture and violent repression, carried out with as much ruthless efficiency as there was under any of the old Latin American military dictatorships. We see there the “duce” ideology, as totalitarian and intolerant as that of the Khmer Rouge. The cult of personality is as extreme as that of Ceausescu or Bokassa. The reckless mismanagement of the food supply has caused a self-induced famine as devastating as that experienced by China during Mao’s terrible “great leap forward”. To those traditional state crimes can be added terrorist acts that bear comparison with those of al-Qaeda, abductions like those by Somali pirates, and a nuclear programme that is as threatening as anything in Iran.

That is an extraordinary list, and in many ways it probably adds up to the most completely ruthless dictatorship in modern history. That poses a bit of a problem for those trying to focus opposition, or to support those campaigning for any sort of freedom in North Korea. In Burma, attention can be focused on a figure such as Aung San Suu Kyi; in eastern Europe, there were figures such as Walesa and Václav Havel, and there was Nelson Mandela in South Africa, but their equivalents in North Korea were annihilated long ago, or imprisoned and forgotten. That poses a problem.

[Mr Buckland]

To reinforce the point that the hon. Gentleman is making so eloquently, the last special rapporteur of the UN Human Rights Council classified human rights abuses in North Korea as sui generis—that is, as a completely separate category from any other abuses in the world. The hon. Gentleman has encapsulated why the rapporteur’s findings were absolutely right.

[Martin Horwood]

The hon. Gentleman’s point is absolutely correct.

It is important to focus on the people who have managed, extraordinarily, to escape from the regime, such as Mr Shin. I am pleased that the Minister has met Mr Shin personally, and that the Government are taking seriously the views, opinions, testimony and witness of those who manage to escape from the regime.

The hon. Member for Congleton asked us to focus on humanitarian and human rights issues, and rightly drew attention to Baroness Amos’s report of her visit last year, which highlighted that, on the humanitarian front, there is chronic poverty, underdevelopment, poor infrastructure, and indicators of widespread malnutrition and stunted growth in the population. Daily diets are deficient even in basic protein and essential fats. Previous UN assessments of the food supply suggested that it was very poor, with poor management of land, and as the hon. Member for Congleton suggested, there is poor access to basic mechanical farm equipment. That seems extraordinary in the 21st century. Add to that a near total breakdown in the management of public health, and vulnerability to human trafficking and perhaps even the exploitation of children, in which agents of the state may be complicit, and the picture is truly apocalyptic.

The picture is little better on the human rights front. We have heard about the widespread use of torture and possibly rape, and certainly about the regime’s use of extrajudicial beatings, imprisonment and execution in the many prisons camps. There is persecution not just of what the regime deems to be criminal acts, but of wrong thinking in a souped-up version of the Maoist red guards’ worst excesses. There is absolutely no freedom of belief, of the press, of thought or of political expression.

That poses the problem for democratic Governments of how to deal with such regimes. How can influence be exercised over a regime that is so totally beyond the pale that it is, as the hon. Member for South Swindon suggested, almost in a class of its own? There are some avenues. There is the traditional diplomatic pressure that the Government exercise through diplomatic contact with the North Korean embassy here in this country, our embassy in North Korea, and the embassies of our European Union partners. Clearly, we should continue to use those channels. We should also continue the pressure to encourage North Korea to allow access for the UN special rapporteur on human rights. We should certainly support a commission of inquiry, but there is clearly a problem in the UN Security Council, and we may not be able to obtain widespread support, which seems incredible. If China and Russia are not minded to support that, it is a damning indictment of their foreign policy. I should be grateful to hear the Minister’s latest report of any discussions that he may have had on that front with Chinese and Russian colleagues, or the UK’s representation at the UN.

There is also an issue with refugees. Some 300,000 refugees have allegedly made their way from North Korea to China. Apart from the logistical and social problems that that might cause, if they are caught, they are apparently routinely repatriated to North Korea, where they face almost certain torture and execution. A few refugees seem to reach countries such as Vietnam, Laos and Mongolia. What discussions has the Minister had with China and other regional Governments, and organisations such as the Association of Southeast Asian Nations, on the treatment of North Korean refugees and the protection of their human rights and their right to asylum, which are extraordinarily important in the current situation?

Beyond that, there is the exercise of what is traditionally called soft power. It is difficult to make humanitarian aid relationships conditional, and that seems a brutal and inhumane approach, but some conditionality or attempt to ensure that food aid gets to the right people and is not being used as a political tool is important. I should be interested to hear the Minister’s thoughts about his Department’s latest approach to that policy, and the approach taken by the Department for International Development.

The hon. Member for Congleton referred to the British Council and the language-teaching programme, which is a positive step. I should be interested to hear whether the Minister has any news about penetration of the BBC World Service or other language services into North Korea. I know that it is standard practice in North Korea to solder the tuning dial of radios, so that they can be tuned only to North Korean stations. The extraordinary levels to which the regime goes to try to repress its people are astonishing, although it does not require a mechanical or electrical genius to undo solder, so perhaps messages are getting through.

There are limits to soft power when a regime is totally unresponsive to that approach. We must try to find a means of exerting pressure. We could hope that a new regime and a new leader might lead to some change, but I think that may be as futile as the hope that Saif al-Islam Gaddafi or Bashar al-Assad would be a new influence on their countries. The likelihood is that, in reality, Kim Jong-un is much less influential in the exercise of power than even his father, and certainly his grandfather.

The key relationship in the region, and the only one that could make a material difference, is that between North Korea and China. China’s tacit tolerance of the appalling regime in North Korea is allowing it to survive, and it is crucial to emphasise to the Chinese that if they are to be players in international relations and participate responsibly as part of the international community, they cannot be seen to be complicit in the survival of such an appalling regime.

The kind of instability that I am sure the Chinese fear more than anything is a possibility in North Korea. As we have seen in north Africa and all over the world, repression leads in the end to a kind of instability. In an utterly dysfunctional society, a repressive regime will fall in one way or another, and it is surely better for that to happen through a process of international action and intervention than in a chaotic way that may cause instability on China’s doorstep. I would be interested to hear what the Minister has to say about any discussions he has had with China. As the hon. Member for Congleton has said, there is a moral case for not being tempted to forget and dismiss the situation in North Korea. Inaction is simply unacceptable in the face of such an appalling situation, and we should be grateful to the hon. Lady for pointing that out.

[Several hon. Members]

rose—

[Philip Davies (in the Chair)]

Order. Two more speakers are seeking to catch my eye, and I intend to call the shadow Minister no later than 10.40 am.

10:21

[David Simpson (Upper Bann) (DUP)]

It is a pleasure to serve under your chairmanship, Mr Davies, and I assure you that I will be brief.

I congratulate the hon. Member for Congleton (Fiona Bruce) on obtaining this timely debate, and on the time that she has spent in this House looking at human rights issues. She has also looked, from a faith position, at the persecution of Christians across the globe, and I pay tribute to the outstanding work that she has done since becoming a Member of the House.

During my time in the House, many debates on human rights have been held in this Chamber, including on Somalia and on Burma, where some changes are taking place. North Korea probably has one of the worst regimes that the world has seen in recent years. According to recent press releases and the Financial Express of Bangladesh, North Korea has told the international community not to “expect any change”. It would seem, therefore, that we are in for more of the same persecutions and human rights violations that we have seen from that bitter regime in the past.

My hon. Friend the Member for Strangford (Jim Shannon) mentioned the persecution of those who hold a particular faith. In this great United Kingdom, we claim the privilege of civil and religious liberty for all. We may not practise that liberty too well, but we certainly claim it and state it as our position. Many years ago, people in the United Kingdom were burned at the stake because of their faith and what they believed. Thank God that day has passed, and people have the freedom to practise their faith in whatever way they desire. That is not the case, however, under North Korea’s brutal regime. As the hon. Member for Congleton said, it has been estimated that up to 200,000 people have been consigned to the prison camp system because of their faith, and that of those people, between one quarter and one third have been sentenced for religious reasons. The lower end of that estimation places the total number somewhere between 40,000 and 70,000 people, the majority of whom profess Christianity.

Religious people who engage in evangelism, or who have been in contact with foreigners or missionaries, have been arrested and subjected to harsh penalties, including imprisonment or execution. There are frequent reports of the execution of Christians in North Korea, and the United States Commission on International Religious Freedom has stated:

“Severe religious freedom abuses occur regularly, including: discrimination and harassment of both authorized and unauthorized religious activity; the arrest, torture, and possible execution of those conducting clandestine religious activity.”

I urge the Minister to do whatever possible to help and to alleviate the difficulties experienced by those who are persecuted because of their faith under that brutal regime.

There are also issues of malnutrition, and the imprisonment of people who do not bow down and worship their leader. I believe, however, that there is a deep-rooted problem in that society, and we hope to see some changes in the not-too-distant future. I urge the Government to do what they can, and to use their influence through international development or aid. The hon. Member for Congleton mentioned that a request for aid had been made by North Korea, and that is perhaps an area in which pressure can be used to alleviate the difficulties experienced by people in that country.

10:27

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

It is a pleasure to serve under your chairmanship, Mr Davies. I pay tribute to my hon. Friend the Member for Congleton (Fiona Bruce) for securing this debate, and for the tone of her speech. She achieved the right balance between raising legitimate concerns about human rights, and reflecting a positive way forward and underlining the importance of engagement, and I warmly congratulate her.

I would like to share a few personal reflections. Seven or eight years ago, I visited North Korea with Michael Bates, who is now in the upper House—actually, he is not there, as he is walking from Mount Olympus to London on a 3,500-mile journey to raise awareness of the Olympic truce, which again is about peace and human rights. We went to North Korea of our own volition, and it was an extraordinary experience.

What hon. Members have said in this debate is correct: I have been to many countries in the world, but nowhere is quite like North Korea. One of my most striking memories, which I will carry with me to my grave, is of being woken at 5 o’clock in the morning in the state-owned hotel in which we were staying. We were woken by military music blaring not from a radio, but from loudspeakers on street corners. It continued for about 10 minutes, after which the odd light would turn on in apartment blocks all over Pyongyang. The music started again at 6 o’clock, and as we looked out of the window, we saw people filing down in silence from their apartment blocks, walking three abreast along wide pavements. There was not a car to be seen and the roads were empty; people were walking silently to work.

One point that has perhaps not been touched on in the debate is the regimented nature of the North Korean regime, which is extraordinary. One morning, we got up and walked along the pavement with other people. It was eerie; thousands and thousands of people were walking to work in complete silence. In North Korea, people tend to work from 6 o’clock in the morning until 6 o’clock at night, and then go home and do two hours of self-improvement. How about that as a policy for the United Kingdom?

We were in North Korea shortly after its latest famine, and we saw extraordinary poverty. One day, we were taken out of Pyongyang, even though not many people are allowed to leave the capital. We were taken to see something that the North Koreans were quite proud of: a new latrine block—not a toilet block, but a latrine block—in a hospital in a city about an hour and a half north-west of Pyongyang. They showed us this extraordinary thing that we would have condemned in the 1950s. That is just an example of how far behind they are.

Sometimes people say to us that politics is not important. One of the abiding reflections that I have is that down in the South are people who are broadly free and broadly prosperous, but in the North—it is not a small country; it has a population of 25 million people—the people are very much not free and not prosperous. Many of them are in poverty, and all of them are in oppression, apart from the ruling elite. The only difference between the two—these are the same people—is the political system and structure, so we must never let anyone tell us that politics is not important. It is crucial in underpinning freedoms.

My visit to North Korea was an extraordinary experience, and one that I thought hon. Members might like to hear about. I believe that it is right for the Government to engage with North Korea, despite all the problems that we have heard about today. We are all scratching our heads as to what we can do about that, and perhaps there is a glimmer of hope with a new leader coming in. As the hon. Member for Cheltenham (Martin Horwood) suggested, we do not know the extent to which people are secretly listening to certain radio stations or hearing news from the outside world. Of course, there is no internet access for the ordinary masses. However, we do not know the extent to which there is awareness of how life is different outside North Korea, and how there might well be an opportunity in the future. My instinct is that if there is change in North Korea, it will come quickly and suddenly and from who knows where, so I think that it is right for the British Government to engage positively with North Korea in the meantime.

One thing that I did while in Pyongyang was vote in the Conservative party leadership election taking place at that time. My hon. Friend the Member for South West Bedfordshire (Andrew Selous), who is sitting beside me, had my proxy vote, which I exercised by telephone from a hotel in Pyongyang. I am probably the only person ever to have voted in Pyongyang. Whether I made the right decision, history will decide.

I just wanted to share those reflections. North Korea is an extraordinary country, and I believe that we are right to engage with it positively. I pay tribute to Christian Solidarity Worldwide, which has been mentioned several times, for the excellent work that it does in banging the drum and raising awareness of human rights abuses in North Korea, but also in other countries. Whatever attitude our Government take in terms of positive engagement, it is very important that British non-governmental organisations are raising awareness, fighting for the causes and championing human rights around the world. They do a fantastic job, and long may that continue.

As for the attitude of the North Koreans to outside pressure, one thing that we have to realise is that they have lived for 50 years with hostility from outside. All over Pyongyang are billboards, and almost all of them show North Korean soldiers squeezing the life out of an American soldier or bombing the Japanese. They hate the Japanese and they hate the Americans, for all sorts of historical reasons, and there are billboards proclaiming their hatred of those countries, so in one sense external pressure simply bolsters the regime. It is already saying to its own people, “Look, it’s us against the world.”

As has been mentioned, China is the key relationship, in the way that I guess the relationship with the USA is key for Israel. I suspect that it suits China quite well to have this slightly odd regime on its doorstep, almost like a buffer zone. Is it not extraordinary that there is a country on earth that can make the Chinese human rights record look quite good? It happens to be right alongside it, in North Korea.

[Andrew Selous]

Does my hon. Friend agree that when our Government quite properly raise human rights issues with the Chinese authorities in relation to what is going on China, they should at the same time mention the situation in North Korea, given that it is a country of 25 million people where there is such widespread abuse of human rights?

[Mr Streeter]

Yes, I do agree, and I am sure that the Minister will touch on that in his response.

As we are paying tribute to the Government’s position, which I think is absolutely right, and to non-governmental organisations for raising awareness, I think that we ought not to let the opportunity pass to pay tribute to Lord Alton, who has been mentioned a couple of times. He has done an extraordinary job as chairman of the all-party group on North Korea. I am privileged to serve as one of the vice-chairs. He has done an extraordinary job in getting the balance right between entertaining people from North Korea when they come over here and organising all kinds of meeting and so on, and being robust and firm about human rights abuses. I wish him every success in the future.

I have the privilege of chairing the Westminster Foundation for Democracy, and I have had a couple of meetings with members of the Korean Workers’ party when they have come over here in recent delegations. It is extraordinary to be talking about that kind of democracy with people from a one-party state, where people really have no understanding of it at all. However, it is important that those discussions continue, because all the time we are sharing our values and our pitfalls and mistakes—we always talk about our own mistakes along this journey towards democracy. Although that is a very long-term venture, it is important.

One way to get into the heart of the regime is to support education initiatives in Pyongyang and elsewhere in North Korea. The English language is increasingly valued by the North Koreans. It is now taught, I think, in all their schools as the second language. They have universities that are broadly staffed by English lecturers. They have an interest in English literature and in English culture. If I may say so to the Minister, he should work with the British Council and with his own Department to continue to build links, bridges and relationships. That is about looking forward. It may seem fruitless, but I believe that in the long term it will pay off, and I very much encourage him to continue down that road.

10:35

[Kerry McCarthy (Bristol East) (Lab)]

It is a pleasure to speak under your chairmanship, Mr Davies; welcome to your position. I congratulate the hon. Member for Congleton (Fiona Bruce) on securing the debate. As has been said—by the hon. Member for Cheltenham (Martin Horwood), I think—her concern about the plight of the people in North Korea shone through in everything that she said. It is important that we discuss this issue in terms not just of criticising the regime in North Korea, but of the compassion that I am sure we all feel for the people of North Korea.

I, too, had the pleasure of meeting Shin Dong-hyuk when he was in Parliament recently. The hon. Lady spoke in detail about the account that he gave. No one who met him could fail to have been moved by his personal story. The thing that stuck with me particularly was his account of the young girl who had been caught with some grains of rice in her pocket and was eventually beaten to death—she died because of her injuries. What struck me was the fact that he said, “Actually, we regarded this as commonplace. We weren’t horrified by it, because it was so common for that sort of horrific scenario to be enacted in the prison camps.” He had no awareness of life outside his camp, or of the fact that there was an alternative, until he escaped. What he had to say made a very powerful impression on me. Christian Solidarity Worldwide is to be congratulated on its efforts to ensure that we get to hear about such examples.

Obviously, the situation in North Korea at the moment, with the death of Kim Jong-il and Kim Jong-un’s succession, has created a great deal of uncertainty among the international community. Whether we can treat it as an opportunity to try to put the international spotlight on North Korea and highlight some of the opportunities for change is a moot point. Certainly, we would all be united in hoping that it does present an opportunity, but, as has been said, there is not just one issue to tackle in North Korea. The hon. Member for Cheltenham talked about this. There are humanitarian concerns and concerns about the repression of free speech and lack of democracy. There are the kidnappings and the prison camps. There are so many issues to be tackled, but we need to do all that we can to try to keep the focus on North Korea and to keep diplomatic efforts to engage with North Korea at the forefront of what is being done.

As the 2010 Foreign and Commonwealth Office report on human rights and democracy highlighted,

“Human rights, as understood by the rest of the world, do not exist in the DPRK.”

The former UN special rapporteur on human rights in North Korea described the situation as “horrific and harrowing”. As has been said, the outside world lacks reliable information about life in North Korea. The fact that we have to rely on the accounts of the few people who have managed to defect—it can take them many years to reach a safe place where they feel able to talk about their situation—shows how dire the situation is.

It is difficult to imagine the sheer scale of the restrictions on freedom of speech, freedom of information, freedom of movement and freedom of association. The hon. Member for South West Devon (Mr Streeter) gave a fascinating account of his visit to North Korea and of just how different it is. I have visited many countries where there are real concerns about human rights, but the scale of what he was talking about was very different from that in any of the countries that the rest of us have visited.

As has been said, external media are prohibited, and there are indications that the restrictions are being enforced even more stringently. There is no freedom of religion, and several Members have talked particularly about the persecution of Christians. The rights of women are enshrined in the constitution, but sexual harassment and violence are reportedly widespread, while victims of human trafficking are treated as criminals. There are also reports of forced abortions and infanticide, and child labour is not uncommon.

The punishments associated with even minor transgressions against the restrictions are harsh and arbitrary. Although the numbers are not known, for the reasons that we have discussed, the death penalty, including public executions, and torture and other forms of inhumane treatment are used routinely.

Even more worryingly, Amnesty International reports that, in preparation for Kim Jong-un’s succession, officials deemed a threat to him were executed. Although it is difficult to secure completely reliable figures, Christian Solidarity Worldwide notes there was a 58% increase in reports of human rights violations between 2010 and 2011. The populations of the prison and political labour camps also seem to have increased, with estimates that 200,000 people are now held in them.

The hon. Member for Congleton did not touch only on the human rights abuse, and it is important to note that the debate is also about the humanitarian situation, which the UN special rapporteur has described as absolutely dire. As we have heard, there are severe food shortages, which, along with the lack of proper health care, are a serious danger for the people of North Korea. There is minimal medical care outside Pyongyang, and any facilities are of a poor standard. The food shortages are acute and chronic, and inefficiencies in the public distribution system are exacerbated by floods and harsh winters. It is estimated that 1 million people have died since the mid-1990s because of the lack of food, and millions are suffering from malnutrition.

Of course, the situation is exacerbated by the fact that the regime is not prepared to admit just how bad things are or to engage with the international community to the extent that it needs to on the issue of aid. China and South Korea have provided the most humanitarian aid, but with the deterioration of the bilateral relationship with South Korea since 2008, its contribution has fallen drastically. I was in China just before Christmas and took the opportunity to talk to the Chinese authorities about what more they could do to provide support for the people of North Korea.

I very much support the World Food Programme’s emergency operation, which was launched in April, but there are concerns. The UN has reported that it has received only 31% of the resources needed, and the assessment is that there is still a serious crisis.

Countries face a difficult dilemma when providing humanitarian aid to North Korea, not least because of the difficulty of ensuring that aid reaches the people who need it most. We also get into the whole debate about whether aid should be used as leverage on the human rights issue. However, the UN has warned that aid to North Korea should not be politicised when the humanitarian situation is so dire, and I subscribe to that view.

Can the Minister tell us whether longer-term plans will be in place once the World Food Programme operation ends in March? Do the Government agree with the UN’s statement that aid to North Korea should not be politicised? In that context, what can we do to support the humanitarian programme in North Korea?

Will the Minister assure us that the Government are making every effort to work with the EU and the UN to send a clear message to North Korea and to ensure that the transition to the new leadership presents an opportunity rather than a danger? What discussions have UK representatives had with international partners—particularly North Korea’s neighbours—and representatives of the North Korean regime since Kim Jong-il’s death? Does the Minister share my concern that efforts to cement the new leadership in place could lead to a deterioration in the human rights situation? If the new leader is not secure in his position, that could trigger a greater crackdown on anyone seen as a potential opponent of the regime.

Following Kim Jong-il’s death, the Foreign Secretary indicated that the UK’s priority was the resumption of the six-party talks. Any engagement between North Korea and the international community would be welcome, but will the Foreign Office seek to broaden its efforts beyond denuclearisation to include a human rights agenda?

One significant obstacle to progress is North Korea’s refusal to admit external observers, so we support continuing efforts to press for a visit by the UN special rapporteur. Can the Minister advise us on any recent diplomatic discussions on the issue?

Finally, last September, the International Coalition to Stop Crimes against Humanity in North Korea, led by Amnesty International, Human Rights Watch and the International Federation for Human Rights, was launched to campaign for the establishment of a UN commission—something that the European Parliament has called for previously. The Government have indicated that they are not against a commission, but there are doubts that it would be possible to secure UN Security Council support. Will the Minister advise us whether there are any active negotiations on the issue and whether he takes a positive view of whether a commission can be achieved?

10:46

[The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne)]

Thank you, Mr Davies, for giving me the opportunity to conclude the debate. It is a pleasure to serve under your chairmanship for the first time.

Let me start—not just because it is the convention to do so, but because I want to—by congratulating my hon. Friend the Member for Congleton (Fiona Bruce) on raising this subject and giving us an opportunity to debate it at some length. As well as having responsibility in the Foreign Office for Asia, I have a thematic responsibility for human rights policy, and, over my year and a half as a Minister, I have observed that many serious human rights causes around the world, although they certainly deserve our attention, receive far more attention in the House and among campaigning organisations in Britain than North Korea does. In my view, North Korea receives insufficient attention, considering the gravity of the situation in that country. In a small way, we have, I hope, started to address that deficit this morning. I therefore pay tribute to my hon. Friend not only for raising this subject, but for doing so with such evident decency, humanity and passion.

I also pay tribute to the hon. Member for Upper Bann (David Simpson) and the hon. Member for Strangford (Jim Shannon), to whom I should apologise, because I called him the Member for Shannon in a previous debate—I think I got it right this time. My hon. Friend the Member for Cheltenham (Martin Horwood) got to the nub of many of the political questions underlying the human rights problems in North Korea. He was quite right to focus some attention on China’s role, and I will seek to come to that.

We heard a fascinating speech from my hon. Friend the Member for South West Devon (Mr Streeter), who was quite right to draw a stark contrast between North Korea and South Korea to illustrate the importance of politics. An amazing transformation has taken place in South Korea, which has, in my lifetime, been poorer than North Korea, but which now has the 12th largest economy in the world. It is a member of the G20; it has big companies such as Samsung, LG and Kia; it has the UN Secretary-General; and it will host the winter Olympics in a few years. You name it—South Korea has an amazing success story to tell, but it shares the peninsula with people who, although ethnically and linguistically the same, are in radically and shockingly different circumstances.

I, of course, pay tribute to the hon. Member for Bristol East (Kerry McCarthy). This certainly is a cross-party issue, and I am sure that everyone wishes to treat it in that way. She was right to point to the most recent Foreign and Commonwealth Office human rights and democracy report, which lists North Korea as a “country of concern”. She gave the report’s crucial quote, which is that

“human rights, as understood by the rest of the world, do not exist in”

North Korea. The Foreign Secretary has made it clear that human rights

“are part of our national DNA and will be woven into the decision making processes of our foreign policy”.

As such, we treat human rights and the humanitarian plight in North Korea with the utmost seriousness.

North Korea is a secretive society with limited access to outsiders. Verification of the real situation in the country is difficult, but, as my hon. Friend the Member for Congleton and others rightly noted, civil liberties are severely curtailed there. Fundamental freedoms that we take for granted, such as freedom of expression, freedom of assembly and freedom of movement within a country, do not exist. Even freedom of religion, which is enshrined in the North Korean constitution, is restricted, with the state prosecuting all illegally held religious services and missionary activities. The Government also impose pervasive everyday restrictions on their population, such as the ban on listening to or watching foreign radio and TV programmes and the requirement to display portraits of Kim Il-sung and Kim Jong-il in all homes.

The judiciary is not independent and the legal system is not transparent, so citizens have no protection from the state. Ordinary citizens are not able to get advice from defence lawyers and many endure ad hoc, onsite public trials. There are also continued reports of public executions, with some indication that their frequency is increasing. Also deeply worrying is the current estimate that there are about 150,000 to 200,000 political prisoners serving terms in prison camps. Accounts continue to emerge from defectors of torture and beatings in correctional centres, labour training camps and detention centres across the country. Inmates are believed to endure inadequate meals, hard labour and a lack of medical care.

As has been mentioned, like other hon. Members, I also had the opportunity to meet Shin Dong-hyuk during his visit to the UK in October. I greatly appreciate the efforts of Mr Shin to raise awareness throughout the world of the appalling conditions and the seemingly inhumane treatment of people in North Korean prison camps. His personal testimony brought home the human suffering in a way that statistics could never manage, but it is worth mentioning that I am afraid that a lack of transparency and independent verification means that we are unable to get a full and accurate picture of the conditions in the camps. I am unable to inform hon. Members of how widespread the maltreatment that Mr Shin experienced is, because we are unable to obtain information that it is as clear as we would wish it to be, but the situation is obviously extremely serious indeed.

As the hon. Member for Bristol East mentioned, the rights of women and children continue to be of concern. Although women’s rights are enshrined in the North Korean constitution, sexual harassment and violence—both domestic and in detention—is still widespread. Human trafficking remains one of the gravest crimes against North Korean women. Victims are often treated as criminals rather than helped by the authorities. The welfare of children is of equal concern, with many having no access to education and children under 16 routinely used as cheap labour.

We also have serious concerns about North Korea’s failure to guarantee the right to eat and their management of the food sector. The North Korean Government’s prioritisation of the military budget and their 1 million-strong army means that the state does not spend nearly enough in support of food production and imports. In recent decades, that has led to serious health issues among their population and humanitarian catastrophes, including the severe famine in the 1990s that caused up to 2 million deaths. International food aid and development aid have reduced the number of famine deaths, but North Korea still requires international assistance to feed its population.

We work bilaterally and multilaterally, in partnership with the United Nations, European Union and non-governmental organisations, to improve the situation in North Korea. Bilaterally, we take every opportunity to raise concerns on North Korea’s human rights record via its embassy in London and our embassy in Pyongyang. Most recently, our ambassador in Pyongyang raised human rights as an area on which the UK and North Korea disagree, when she called on Kim Yong-nam, the President of the Presidium of the Supreme People’s Assembly—one of the most senior figures in the North Korean Government—in October 2011. Through our embassy in Pyongyang, we also contribute to a series of small-scale humanitarian projects, but it is one of the hardest countries in the world in which our diplomats serve.

On large bilateral funding, the UK does not give aid directly to North Korea, owing to the difficulty in agreeing acceptable access and monitoring controls with the Government. We therefore believe that the Department for International Development’s contribution to various multilateral organisations in North Korea represents the best way to contribute financially. Such commitments include subscriptions to various UN and Red Cross funds. Multilaterally, we continue to work through the UN and the EU to raise concerns about human rights abuses.

I assure my hon. Friend the Member for Cheltenham that I have personally raised the Government’s and my concerns about the Chinese Government’s role in North Korea directly with the Chinese Government. The point has been made in the debate that the current condition of North Korea might suit China. That might or might not be the case, but for the reasons that he spelled out, I do not accept that analysis. Even if one believed that its condition was in China’s narrow political interest, the Chinese need to take account of a moral dimension, which is that the most appalling degradation of human life is taking place on their doorstep and any country that does not devote its energies to addressing such an issue needs to reconsider its political priorities and responsibilities.

[Andrew Selous]

The UK Government recently tabled a resolution on Syria at the UN. It was unsuccessful, but they nevertheless tried. Why do the Government not take the same approach to North Korea?

[Mr Browne]

At the UN, one always has to assess how one can be most effective. There is a place in politics for dramatic statements of intent and a place for trying to achieve the objectives that we all share. Our approach has sought, as much as we are able, to bring about those objectives, but we keep an open mind about how we can best achieve them in future.

The succession of Kim Jong-un brings with it an opportunity for us to push the new leadership to acknowledge the need for greater respect of their citizen’s human rights. However, that will be difficult in the next few months, as it is likely that those who have recently assumed power in Pyongyang will take some time to establish policy priorities and a modus operandi for dealing with foreign countries. On 5 January 2012, the Presidium of the Supreme People’s Assembly issued a decree to implement an amnesty of prisoners to mark the 100th birthday of Kim Il-sung and the 70th birthday of Kim Jong-il. We will push for further details and encourage transparency, but if it goes ahead, it will be a welcome small step forward for human rights.

We will need to be mindful of the increased risk to stability on the Korean peninsula, as the new leadership in Pyongyang establishes its security credentials. To that end, we continue to be in very close contact with key allies, including South Korea, the United States, Japan and our partners in the EU. Despite that important work, we will ensure that we and international partners continue to prioritise all the justifiable human rights concerns that have been articulated in this debate.

I again thank my hon. Friend the Member for Congleton for raising the topic this morning. I assure all Members present that the situation in North Korea is as grave and as big an affront to our common humanity and decency as that in any country in the world. The British Government and Parliament will continue to work to bring about radical change.

Empty Property Rates (SMEs)

Wednesday 11th January 2012 Westminster Hall

10:59

[Julian Sturdy (York Outer) (Con)]

It is a privilege to be granted time to hold this debate here today and to serve under your chairmanship, Mr Davies. As all Members present know, the rating of empty properties is a contentious and sensitive issue.

Let me start by outlining the situation of a couple of farmers in my constituency who have lived and worked on their land for decades. After the previous Government strongly encouraged them to diversify their land, they decided to develop a couple of small business premises to rent out to local entrepreneurs and small and medium-sized enterprises. They undertook substantial developments and put tenants in place. The future looked bright until the financial crisis broke and the recession hit. As a result of the subsequent turmoil in the financial market, many of my constituents’ tenants were forced to downsize and move out. In some unfortunate cases, their tenants’ small businesses collapsed, as bank lending sadly dried up. The limited three or six-month exemption from empty property rates has now expired, with the threshold returning to its original £2,600 level. As a result, my constituents now face bills totalling thousands of pounds.

Like all rational and sensible politicians, I have a great deal of sympathy for my constituents. In a letter to me, they said:

“We have worked hard all our lives to get what we have today... the price we are paying now is the price of progress and it is like a lump of concrete around our necks.”

One of my core principles in life is that every person has the absolute right to aspire and achieve without unfair burdens being placed on their shoulders.

In the current economic climate, our inherited policy of rating empty properties is unfair. We seriously run the risk of driving small business men and women into the ground, particularly in rural areas, where a number of small retail and commercial properties have been developed on diversified land. The owners are not wealthy property tycoons and often possess only limited experience of property management. It is wrong to believe that every property owner can take the hit of tax on empty properties; many simply cannot. To lay the blame for such a situation at the door of the coalition Government is entirely foolish and short-sighted.

[Gavin Williamson (South Staffordshire) (Con)]

I congratulate my hon. Friend on securing this debate. I must declare an interest as outlined in the Register of Members’ Financial Interests. Does my hon. Friend agree that the previous Government introduced this scheme with the good intention of ensuring that all redundant properties were redeveloped? However, it has been an incredibly blunt instrument, and with the economic downturn, it has effectively caused chaos for many small investors. We need to consider a more subtle approach to encourage the regeneration of areas.

[Julian Sturdy]

As my hon. Friend has said, the scheme is a blunt instrument that has had unforeseen consequences. It is also a barrier to investment and regeneration, which particularly affects the north, but I will go on to that point later in my speech.

The previous Labour Government reformed the empty non-domestic property rate relief in 2007 in an alleged attempt to encourage more commercial properties to be brought back into use throughout the supposedly never-ending boom years. The Rating (Empty Properties) Act 2007 increased rates on empty properties from 50% to 100% of their occupied rate. It also removed the exemption for storage and industrial premises, which was recommended by Kate Barker and Sir Michael Lyons in their independent review ahead of the 2007 Budget. As one would expect, the plans were controversial at the time. It was said that the 2007 Act would lead to constructive vandalism. However, the vast majority of property owners would not deliberately hold back empty properties from the marketplace. If I had been an MP at the time, I would have said that such properties were most often empty as a result of the poor planning system or a simple lack of demand for commercial properties within specific locations.

Appreciating that the new policy introduced unnecessary burdens on businesses in recessionary times, the pre-Budget report of November 2008 outlined a temporary increase to the threshold for exemption from such rates to £15,000 and then later to £18,000 for a two-year period. That provided much-needed relief for many affected individuals and was greatly appreciated. The Business Centre Association estimates that that measure saved its members about £10 million. However, the problem has returned. On 1 April 2011, the empty property threshold returned to £2,600, which is a remarkable and dramatic drop from the temporary £18,000 figure.

As a loyal supporter of the coalition, I appreciate that the Government cannot afford to tackle every issue and reduce the vast deficit simultaneously. Furthermore, I understand that some issues must take priority over others. I accept that the reckless economic legacy of the previous Government has largely tied our hands. Thankfully, though, this Government are intent on spending only what they can afford, and long may that approach continue.

The previous Government are responsible not only for the creation of the empty property tax rates, which they designed and implemented, but for the inflexibility of the coalition’s fiscal options. Having to spend £120 million a day to pay off our country’s debt interest payments hinders the present Government’s ability to reform as broadly as they might otherwise do. None the less, empty property rates should be higher on the Minister’s list of priorities.

Property owners in rural villages across the country are beginning to be hurt by this policy. They now feel let down by successive Governments. Such sentiments have been summed up well by Liz Peace, chief executive of the British Property Federation, who said:

“If the Government is pinning its hopes on a private-sector led recovery, then this is a damaging and retrograde step. Empty rates are a tax on hardship at the worst possible time. The majority of the properties affected by this announcement will be in areas which are already economically disadvantaged, and so this will be a further blow.”

[Jason McCartney (Colne Valley) (Con)]

I congratulate my hon. Friend on securing this important debate. On Friday, I visited a mill complex on the outskirts of Huddersfield that is home to many thriving and positive businesses. I saw at first hand the disincentive for the owners of that complex to bring back some of the units into habitation and to make them ready to show off to new businesses. He has talked about the Business Centre Association. Does he agree with its idea of allowing an exemption period of three years for all new and refurbished units to try to get them back into use as an incentive to stimulate small businesses?

[Julian Sturdy]

I appreciate those comments. The BCA was also talking about returning to the threshold figure of the recessionary times of £18,000. Given the tough economic times that we face, those two policies would help the situation.

[Mark Pawsey (Rugby) (Con)]

On the exemption period, does my hon. Friend agree that six months is too short a period in which to find a new tenant? The commercial property market is difficult. Six months between one tenant leaving and the finding of a new tenant is insufficient to do the necessary marketing, to show people round and to get people into the accommodation. At the very least, the exemption period needs to be increased.

[Julian Sturdy]

I entirely agree with my hon. Friend. The six-month exemption period—indeed, it is only three months for retail premises, which is obviously even shorter—is incredibly burdensome for property owners. He is right that the short exemption period is difficult when marketing these properties and looking for new tenants.

We have to accept that there must be churn within the market. No one will ever say that we will get 100% of such properties filled up. Even in the best of times, we are perhaps talking about filling 80% to 85% of properties, and there must be that effective churn within the market to allow flexibility within businesses.

[Guto Bebb (Aberconwy) (Con)]

I congratulate my hon. Friend on securing this debate. The specific point about churn is crucial. In my constituency, there is a very successful small business park in the town of Conwy and its proprietor feels that he is being penalised, because he tried to develop an incubator unit-style approach. In effect, he is now being penalised because of the churn. He is providing a service to the local business community and allowing people to have easy options to come in and out of the business park, which is vital for new business development, but he is actually being penalised by the system.

[Julian Sturdy]

I entirely agree with my hon. Friend. He is absolutely right that we need the churn within the market to allow new investment and new businesses to start up. As I said in my initial remarks, there are unforeseen consequences to this measure and it seems to be a barrier to investment and regeneration within certain areas.

As I have already said, the British Property Federation has expressed such sentiments, and it is not alone in doing so. Ahead of the Budget last year, the TaxPayers Alliance urged the Chancellor to scrap this tax altogether. In addition, ahead of the pre-Budget report last year, almost 50 regional chief executives of the British Chambers of Commerce signed a letter to the Chancellor that highlighted the perverse consequences of the policy.

Sadly, nothing has happened and according to Government replies to my written questions on this matter, there are no plans in the short term to review the situation. Consequently, I want to focus the rest of my speech on three main points. If they are taken further, I firmly believe that the Minister will urge the Government to review their position sooner rather than later.

First, I have already outlined my concerns about the impact of empty property rates on small businesses in rural areas. In addition, I briefly want to discuss my fears about the specific impact that this tax has across the whole of the north of England. As a Member of Parliament for the north, I have always been interested in the economic north-south divide. My first question at Prime Minister’s questions was to ask the Prime Minister specifically about that gap. After all, it is statistically the case that the economic divide between the north and south of England actually increased during Labour’s rule.

On many fronts, the coalition should be commended for its introduction of the regional growth fund and local enterprise partnerships, which are specifically aimed at addressing regional imbalances. However, such positive measures run the risk of being undermined if negative policies, such as empty property rates, are allowed to strangle many SMEs in the north.

Recently, Horncastle Group—a property developer based in Yorkshire—wrote to me about that issue. Its chairman, Mr Andrew Horncastle, has been lobbying against this regressive taxation for years. Discussing the issue with me, Mr Horncastle said:

“This empty rates property tax is a tax on failure, and as such it discriminates between the prosperous south and hits weaker regions, particularly in the north. It is a short-sighted, ill-thought through socialist-style tax grab, and it does not sit in any proper growth strategy.”

Frankly, I could not agree more with those comments. Those areas that are directly outside new enterprise zones will be hit further by this form of regressive taxation. At a time when we are genuinely attempting to rebuild and rebalance our northern economies, it seems somewhat foolish that we are continuing to operate such negative rates on empty properties.

Secondly, I fear that empty property rates carry with them unintended consequences. A number of Members have already touched on this issue. In 2009, the Royal Institution of Chartered Surveyors showed that empty property rates are the key driver behind decisions to demolish empty properties and they act as a barrier to investment in new property. Likewise, with an increased work load—owing to the higher vacancy rates—the cost of administering this tax within local authorities has already started to mount. Demolitions, higher administrative costs, additional financial demands on small businesses and a stagnating commercial property and flexible space sector are the consequences of this regressive policy.

My third point relates to the very simple principle of fairness. My right hon. Friend, the Prime Minister, has himself talked passionately and genuinely about “enemies of enterprise” that act as unnecessary hurdles for entrepreneurs and SMEs. The empty property tax is a perfect example of an enemy of enterprise. For a country targeting a private sector-led recovery, it is not right that such rates are imposed upon the very small businesses whose success we are counting upon. Indeed, it is not only not right; it is not fair. I believe passionately that no Conservative would view the policy as being desirable or fair.

Actions speak louder than words, and if we admit that something is wrong but fail to reform it, we are badly letting down all those who are affected by it. I also firmly believe that any cost of tackling empty property rates would be far outweighed by the investment in premises, jobs and training that would follow in a rejuvenated market.

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

I congratulate my hon. Friend on securing this debate and I apologise—I would very much have liked to have been here at the beginning of this debate. The point that he has just made is very important. Regarding regeneration, in my constituency, I have found that empty property rates often make individuals who own commercial or industrial property view that property as a problem. Consequently, they will sometimes consider measures to try to mitigate the empty property rate tax. So the tax actually changes the mindset of property owners; it changes how they view the property. They do not view it as an opportunity but as a millstone around their necks.

[Julian Sturdy]

I entirely agree with my hon. Friend. If he had been here for the beginning of my speech, he would have heard me quote one of my constituents who said almost exactly the same thing.

The coalition should be commended for pursuing a fairness agenda, but let us now extend the principle of fairness to the empty property rates tax, because there is nothing fair about increasing taxes on property owners who are already suffering due to high vacancy levels.

[Rebecca Harris (Castle Point) (Con)]

On fairness, one of the small business owners in Castle Point said that he would be very happy to pay tax on income that he was earning. He supports local businesses; he often has very good deals to help local businesses to get going; and he contributes enormously to the local community and local economy. He says that he would be delighted to pay even more on income that he was genuinely receiving, but he feels that it is incredibly unfair to be penalised when a property is empty.

[Julian Sturdy]

I entirely agree with my hon. Friend and that point is very well made. In fact, the whole hub of the argument is about fairness. People are completely prepared to pay tax on income earned, but this tax on empty properties could be seen as a tax on failure and it is just simply unfair.

Similarly, there is nothing fair about forcing entrepreneurs to consider selling, abandoning or even demolishing their premises because of the threat of excessive taxation. To penalise a property owner whose property falls vacant in recessionary times is not a prescription for economic recovery but a recipe for economic stagnation. Our stance on empty properties requires a fundamental review.

[Mark Pawsey]

rose—

[Philip Davies (in the Chair)]

Does the hon. Gentleman have permission from both the Member who secured the debate and the Minister to speak?

[Mark Pawsey]

Mr Davies, I have spoken to my hon. Friend who secured the debate, but not the Minister. Could I have two minutes to speak?

[Philip Davies (in the Chair)]

You can speak very briefly, because we want to hear the Minister’s response to the debate.

11:19

[Mark Pawsey (Rugby) (Con)]

Thank you, Mr Davies, for calling me to speak.

I declare my entry in the Register of Members’ Financial Interests and I remind the Chamber that I raised this issue in Westminster Hall in November 2010. Interestingly, Mr Davies, you were in the Chair then too. Equally interestingly, there was no attendance at that debate by any Opposition spokesmen, which perhaps indicated the Opposition’s level of concern about matters affecting business.

At that time, I raised a constituency case, as my hon. Friend the Member for York Outer (Julian Sturdy) has done today. My constituent had a commercial property as an investment, which he had acquired after selling his business that had been located there. In recent months I, too, have visited constituents who have been very much affected by the changes including, most recently, an engineering company that has a vacant unit on its site, is unable to find a tenant and is liable to pay the commercial rates. In his reply to me a year ago, the Minister spoke of support to small business generally, but regretted the fact that the Government were unable to offer the concession that property owners would like.

My hon. Friend the Member for York Outer drew attention to the fact that the situation has become worse rather than better as a consequence of the fall in the exemption limit from £18,000 to £2,600, which means that the large majority of properties are now included. My hon. Friend spoke about the need for a private sector-led recovery from the recession we are suffering. Critically, at a time when we are demolishing perfectly sound industrial premises to avoid paying the vacant commercial rate, and developers are not developing new industrial and commercial premises because if they do so they might be left vacant, we are making it more difficult for small businesses to get started. There are strong reasons why the Government need to address the issue, and I very much look forward to the remarks that the Minister may make to be able to assuage the fears of businesses in this sector.

11:19

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

It is good to serve under you today, Mr Davies. I commend the persistence of my hon. Friend the Member for York Outer (Julian Sturdy) in getting this matter before the House. It is interesting to see how many other colleagues share his concerns.

I want to begin and, bearing in mind the time, it might be very nearly where I finish as well, by picking up one of the points that my hon. Friend the Member for York Outer made about the financial situation facing the country. He drew attention to the fact that £120 million a day is spent servicing the interest on the outstanding public sector debt; I wish that that was the whole story, but unfortunately it is not even half of it—it is only a quarter. In the 2009-10 fiscal year, the signed-off accounts showed a deficit accumulation of £164 billion of extra debt added to the national debt for that year. That sounds like a lot of money, but people find it very difficult really to understand how much it is. Looked at on a daily basis, it is £450 million added to the national debt for every day of that financial year, and it was in that context that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) left his famous note: the money has all gone.

I want to make it very clear that the Government recognise the vital role that small businesses play in building a sustainable economy, but a sustainable economy depends on having a sustainable financial system and sustainable public expenditure. I am sure that my hon. Friend the Member for York Outer, and our other hon. Friends who have contributed to the debate, would be even more enthusiastic than I am, as a member of the coalition Government, to see the fiscal and financial situation brought under control. We have a coalition commitment to rebalance the economy and to support businesses to provide the growth and jobs that the country needs, and Members have eloquently pointed out the particular role of small start-up companies in doing so. This Government have made an excellent start and are doing a great deal, but there is always a balance between putting the finances right as a short-term necessary foundation and providing the right springboard for growth.

This Government fully recognise the problems that were caused by the outgoing Government’s so-called reform of empty property rates. Members have spoken eloquently today about the problem, and have allocated the blame correctly to the outgoing Government. From 2008, the exemption period was restricted to three months for non-industrial property and six months for industrial property, with ratepayers being liable for full rates once that period had lapsed. The previous Government claimed that the purpose of the reforms was to increase the cost of holding empty property and thus to encourage owners to relet or redevelop empty commercial properties, or to sell them on to people who would do so. That argument was based on an economic theory that was, and still is, not fully accepted by the business community; hon. Members have pointed out that even in good times it would be unrealistic to think that every commercial property in the country would be full—there would always be churn and vacancies.

The Government fully understand and appreciate that ratepayers would like us to undo the previous Government’s so-called reforms, or to continue with the temporary measures, but our ability to take action needs to be balanced against the very high costs involved. We are, however, also providing targeted support on business rates, and there is an overriding need to reduce public expenditure and support the economy generally by reducing the deficit. Had any Labour Members been here today, and that is perhaps something of a statement in itself, I can imagine that they might have said, “Why don’t you do it anyway, it’s only another day’s deficit borrowing?” Restoring the relief would cost somewhere between £400 million and £500 million a year—just another day’s borrowing. I believe that those of us present are more mature and responsible than that, and would not simply say, “Oh yes, it’s just another day. Let’s do it.” That is the challenge the Government face because, as my hon. Friend the Member for York Outer made clear, the Government have to balance getting the economy straight financially and fiscally with providing the springboard for business growth.

I have a long list of the very wide range of help we have provided to businesses, and had time permitted I would have read it out, but I would be happy to pass it on to Members who have contributed to the debate. The help focuses on getting new businesses started and on getting existing businesses to expand. We have to set priorities. Although changes to the empty property rate are currently unaffordable, we recognise that the problems caused by the previous Government’s reforms are still there, and we will certainly keep the matter under review.

We have already taken some major actions, particularly on business rates, to demonstrate our commitment to providing targeted support for the business community. Yesterday, the Local Government Finance Bill, which reforms business rates, received its Second Reading. When the measure comes into force, it will give every local authority the capacity to rebate business rates at their discretion in their local area. I hope that Members here today will support that legislation with great enthusiasm, and that they look forward to the day, in April next year when the measure comes into force, when they can go to their local authorities and make as eloquently as they have today the case for empty property business rate relief, which can then be targeted and shaped to local circumstances.

Although I would like to spend time on the long list of good things that the Government have done to support business, I hope that in the limited time available I have been able to explain why the Government have set rigorous priorities and feel obliged to stick to them through these 12 months. I hope that there is a glimmer of light at the end of the tunnel, when the Local Government Finance Bill becomes law, for my hon. Friends to approach their local authorities and put their case strongly to them.

11:19

Sitting suspended.

Iran (Human Rights)

Wednesday 11th January 2012 Westminster Hall

[Dr William McCrea in the Chair]

14:30

[Dr William McCrea (in the Chair)]

Before I call the hon. Member for Liverpool, Riverside (Mrs Ellman), may I wish right hon. and hon. Members a very happy new year?

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

I am pleased to be conducting this Adjournment debate under your chairmanship, Dr McCrea.

This debate draws attention to Iran’s horrendous human rights record. The abuses affect a wide range of people—women, gay people, dissidents and the human rights lawyers who try to defend those people, including the lawyer Abdolfatah Soltani, held since September 2001 for creating propaganda against the system. Last September, three Iranian men were executed after being found guilty of charges relating to homosexuality. Last week, the daughter of Akbar Hashemi Rafsanjani, the former President of Iran, received a six-month jail sentence for allegedly spreading propaganda against the regime. Sakineh Mohammadi Ashtiani, an Iranian woman who was due to be sentenced to death by stoning for alleged adultery, may now be hanged; we are told that the change of punishment from stoning to hanging is some kind of progress.

However, I wish to focus on an area of persecution that has received too little public notice and attention: the long-standing and ongoing persecution of the Baha’is, adherents of the Baha’i religion founded in Iran in the mid-19th century. The persecution is not widely acknowledged, although it is pervasive and is escalating dangerously. There are thought to be more than 300,000 Baha’is in Iran and 188 Baha’i communities worldwide.

Following the Iranian revolution in 1979, 200 Baha’is were expelled and thousands were imprisoned. The 1991 memorandum of the Supreme Council of the Cultural Revolution set out what still remains official policy towards what is ominously called the Baha’i question. The memorandum makes it clear that official policy is repression of the Baha’is in an effort to crush the religion and its adherents—in the words of the Iranian Government’s official policy, to block their progress and development. The repression takes a number of forms in an ongoing and systematic persecution. It means arbitrary arrest and imprisonment and the denial of access to higher education and areas of employment. The homes and businesses of Baha’is have been subject to arson attacks, cemeteries have been destroyed, and children have been harassed.

There are 102 Baha’is imprisoned in Iran. One current issue of major concern is the trial of the seven former leaders of the Baha’i community of Iran: Fariba Kamalabadi, Jamaloddin Khanjani, Afif Naeimi, Saeid Rezaie, Mahvash Sabet, Behrouz Tavakkoli and Vahid Tizfahm. They were detained in 2008 without charge and were denied access to lawyers for a year. In January 2010, they appeared in court on charges that could have led to their execution. In August, they received sentences of 20 years. Although the sentences had been reduced to 10 years following international condemnation, the length has since been restored.

In May 2011, another series of raids was held on 39 Baha’i homes in Tehran, Karaj, Shiraz, Gohardasht, Sari and Zahedan. In the ensuing weeks, eight people were released, but 11 remain imprisoned. The charges were of conspiracy against national security and conspiracy against the Islamic Republic of Iran by establishing the illegal Baha’i Institute for Higher Education, an online programme to support Baha’i youth barred from universities. I have raised the persecution of the Baha’is previously.

[Nic Dakin (Scunthorpe) (Lab)]

I pay tribute to my hon. Friend for securing this afternoon’s debate. Canadian Senator Dallaire, a former commander of the UN mission in Rwanda, recently drew attention to the escalation of attacks on Baha’is and others in Iran, which he described as

“a slow-motion rehearsal for genocide”.

Does my hon. Friend agree that such comments from such a distinguished observer of human rights are a great cause of concern, as are the issues that my hon. Friend outlines?

[Mrs Ellman]

I agree with my hon. Friend. Those comments show how the situation is escalating. They should lead not only to increased concern but to increased action. I intend to refer to that comment later, and will say what I think should be done to address the situation.

[Mr Mark Williams (Ceredigion) (LD)]

I pay tribute to the hon. Lady’s work on behalf of the Baha’i community. We are both members of the all-party friends of the Baha’is group, which tries to advance the cause of the Baha’is. Does she agree that one of the big problems with Iran is raising awareness of the human rights issue in Iran? I am thinking of the case of Madam Ashtiani, of the 600 people who have been executed over the past year, and most definitely of the Baha’i community in general. That is where contributions from Canadian senators and others are particularly important. There has been a huge awareness deficit across the world of the extent of human rights violations in Iran.

[Mrs Ellman]

I agree with the hon. Gentleman. It is extremely important to raise awareness, knowledge and consciousness of these atrocities. It is important that people take action to prevent or stop persecution, but unless they become aware of it, it is less likely that action will be taken. Contributions such as his are important in increasing that awareness.

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

Reference has been made to members of other faiths. Has my hon. Friend read the report of the United Nations special rapporteur, which condemned the actions taken against Arabs, Azeris, Baha’is, Balochs, Christians, Kurds, Sufis and Sunni Muslims? The report was published in September by the special rapporteur, Ahmed Shaheed, who was appointed by Secretary-General Ban Ki-moon.

[Mrs Ellman]

That report is extremely important in documenting the wide range of persecution in Iran. It is important that the report is made known more widely and leads to action. I congratulate my hon. Friend on his work during the previous Parliament as Chair of the Select Committee on Foreign Affairs, which considered human rights in Iran and specifically referred to some of these issues, including the Baha’is and other groups to whom he referred. The Select Committee’s work in drawing public attention to the situation is extremely important, but what also matters is that the information is used and followed by action, in this country and internationally. I note that both the present Government and the previous Government have taken the issue of general persecution against a range of people in Iran seriously and have raised it. Their work has been good, but much more still needs to be done.

In March 2011, the United Nations Human Rights Council appointed a special rapporteur to monitor Iran’s compliance on human rights, and last December the General Assembly expressed deep concern about a wide range of abuse that is continuing and, in some cases, escalating. It stated that the abuse includes a “dramatic increase” in the use of torture, the systematic targeting of human rights defenders, pervasive violence against women, and continuing discrimination against minorities, including members of the Baha’i faith.

Regrettably, those representations, and the work done by our Government and others in the United Nations—and, indeed, in Europe—have not had a great deal of effect. Persecution continues and concerns are escalating. My hon. Friend the Member for Scunthorpe (Nic Dakin) referred to the concerns expressed by the Canadian Senator, Roméo Dallaire, who has drawn attention to the rise in atrocities in Iran, both generally and specifically against the Baha’is. It is extremely important that the world does not wait until there is a genocide. It should heed warning and take further action to put pressure on the Government of Iran to stop what they are doing. The Minister does good work in this area, but what further representations does he intend to make? Will he make representations to those members of the UN Human Rights Council who did not feel able to join in the condemnation of the atrocities, in order to persuade them to increase the pressure and join that widespread condemnation?

I have a specific request: will the Government call for Dr Bielefeldt, the UN special rapporteur on the freedom of religion or belief, to be granted a visa to visit Iran, so that he can compile a new report on freedom of religion or belief there? Dr Bielefeldt’s comments in October 2011 on the extreme nature of the persecution of the Baha’is in Iran are extremely alarming. Will the Minister do all that he can to support the issuing of a visa from Iran to allow Dr Bielefeldt to visit and conduct further investigations?

Too little is known about the plight of the Baha’is. Some Members may be aware of it only from their constituency work and their work with refugees. Many of us find that people in our constituencies are seeking asylum on grounds of persecution following their experiences in Iran. I have met a number of such people. Indeed, I am in the process of making representations on behalf of two Baha’is from Iran who are seeking asylum following persecution in their homeland, in this case for their work in the field of the arts. That demonstrates the Iranian regime’s repression of its whole population.

Last July, the popular Iranian comedian, Omid Djalili, wrote in The Guardian about the plight of the Baha’is and, indeed, his own experience as a Baha’i. He wrote about his experience as a member of an Iranian football team in Northern Ireland. He was a valued and successful member of the team, but when his colleagues discovered that he was a Baha’i, he was cold-shouldered and dropped from the team, which is an example of absolute prejudice against Baha’is.

[Mr Robert Buckland (South Swindon) (Con)]

The hon. Lady referred to the 1991 memorandum. Does this not go beyond a culture? It is an actual black-and-white policy, as laid out by the Supreme Council of the Cultural Revolution. The memorandum needs to be withdrawn so that there is not a policy in black and white, with expulsion from universities, exclusion from employment, and general exclusion from life in Iran.

[Mrs Ellman]

I agree with the tenor of the hon. Gentleman’s remarks. In the context of the whole field of human rights in Iran, we are talking not about persecution by individuals, and something that is inconsistent with the general tenor of the way in which the Government operate, but about state-sanctioned persecution, which is what makes it so ominous and horrendous. That is why it so important that action is taken, not just nationally—we cannot achieve very much on our own—but internationally. It is extremely important that people understand what is happening—that this is part of the state apparatus, not an anomaly.

Omid Djalili wrote a number of interesting things in his article. He wrote about his own experience. I was privileged to hear him speak about it directly at the House of Commons only a few months ago when he addressed a meeting held by the all-party friends of the Baha’is group—of which I am the treasurer—about human rights in general. In his Guardian article, he took the issue further than his individual experiences. He wrote about the general situation in Iran in relation to Baha’is and how he felt that their plight had been ignored for far too long in Iran as well as outside it. He wrote:

“Nowadays, the climate feels different. In February 2009 a group of Iranian intellectuals, writers, activists and artists signed an open letter to the Bahá’ís stating their regret concerning the Iranian government’s treatment of its Bahá’í minority. They made an open apology for their silence during Iran’s long-running persecutions: ‘a century and a half of oppression and silence is enough’. This letter was welcomed by the Bahá’ís, who have always made it clear they are humanitarians, not political activists, working towards social transformation for all at a grassroots level, not concerned with overthrowing governments.”

It is important that people understand that the nature of the Baha’is is peace-loving. They want to unify people and do not seek division and dissent. It is important that that gentle approach is not misunderstood, that people understand what is happening to the Baha’is and, indeed, to other groups, and that they are willing to take action about it.

I hope that this debate will focus attention on Iran’s deplorable record on human rights across the board. The abuses affect far too many people. I hope that it will shine some light on the position of the Baha’is, whose plight is little known and little understood. What matters most, however, is that action is taken. I look forward to hearing the Minister’s response.

14:47

[Mr Stewart Jackson (Peterborough) (Con)]

I am grateful for the opportunity to contribute to this vital debate. It is a pleasure to serve under your chairmanship for the first time, Dr McCrea, and I warmly thank the hon. Member for Liverpool, Riverside (Mrs Ellman) for bringing this issue to the Chamber. I am indebted to Christian Solidarity Worldwide for assisting my preparation for this debate. I could not speak in front of a more apposite ministerial representative than the Under-Secretary, who has taken a great interest in the issue throughout his years in the House.

This is a period of unprecedented tension between the west, broadly speaking, and Iran, but that should not mean that we resile from confronting Iran with the reality of the human rights abuses and persecution that it is inflicting on many of its citizens. In the context of human rights, I would like to focus specifically not on the Baha’i faith, but on the wider Christian community and the suffering that it endures at the hands of the state.

Iran has witnessed a steep rise in the persecution of religious minorities during 2011, principally of Christians belonging to both the sanctioned Churches and the unsanctioned house-church networks. The most worrying forms of persecution include regular raids on gatherings; harsh interrogations and torture of Christians, including demands for the recantation of faith and for information on the identities of fellow Christians; detention for long periods without charge and other violations of due process; convictions for ill-defined crimes or on falsified political charges; the economic targeting of the Christian community through the demand of exorbitant bail payments; and the threat of imminent execution of a house-church pastor.

Both evangelical Christians and Christians within the traditional Armenian and Assyrian Churches who conduct services or church activities in Persian are deemed a threat to the Islamic integrity of the nation and live increasingly in an atmosphere of instability. Targeted persecution has been undergirded by a proliferation of anti-Christian rhetoric from senior figures in Iran and, as the hon. Member for Liverpool, Riverside has said, has been accompanied by the continuing repression of the unsanctioned Baha’i religious community.

I particularly want to raise the very worrying case of Pastor Youcef Nadarkhani, which I have previously brought to the Minister’s attention. Pastor Nadarkhani was sentenced to death for apostasy—abandoning Islam—in 2010 and was involved in two further court cases last year. The case went to appeal at the supreme court in June 2011, and the verdict of the lower court was not overthrown. However, the supreme court requested a re-examination of whether Pastor Nadarkhani had practised Islam as an adult before his conversion to Christianity. The re-examination took place in September last year, and it was ruled that although the pastor had never practised as an adult, he was nevertheless guilty of apostasy due to his Islamic heritage.

In a series of hearings from 25 to 28 September, the pastor was given three opportunities to recant his faith to secure his acquittal and release. He refused very courageously each time and was returned to prison to await a final written verdict from the court. A significant international outcry raised the profile of the case and the courts have twice referred to the supreme leader of Iran, Ayatollah Khamenei, for his opinion. However, the ayatollah has so far avoided commenting on the issue and no official final decision has been reached. Pastor Nadarkhani remains in Lakan prison.

On 23 December, the sanctioned Assemblies of God church in the city of Ahvaz was raided during a Christmas service. Everyone in the building, including children attending the Sunday school, was detained, interrogated, threatened and eventually released. However, the church’s senior pastor, Pastor Farhad, remains in detention along with some of the church leaders. Although direct attacks on sanctioned churches were rare in 2011, a large number of unsanctioned or underground house churches were violently raided, items confiscated and members arrested and interrogated. More than 300 members of house churches are known to have been arrested and interrogated in at least 48 cities throughout Iran in 2011. However, the complete figure is almost certainly significantly higher. The majority of those arrested were released following questioning and a short incarceration, but many have been recalled for further questioning, and at least 41 have spent a month to a year in prison. Some of those arrested have not been formally charged and many of them face long periods of solitary confinement.

Farshid Fathi-Malayeri, who was arrested on 26 December 2010 in Tehran, is still being held in Evin prison. He has not been formally charged and a court date has not been set. That evangelical church leader and father of two young children has been kept in solitary confinement for a large part of his incarceration. The equivalent of £120,000 was demanded as bail for his release, and his family eventually managed to raise that, yet the authorities still refused to release him. On one occasion, as a form of psychological torture, Farshid was told to pack a bag and get ready to leave. The guards led him as far as the outer gate of the jail where other prisoners were being released, but he was then suddenly ordered back to his cell. Noorollah Ghabitzadeh, a church leader arrested in Dezful on 24 December 2010, is also believed to be still detained, although little is known of his condition.

Detainees regularly face solitary confinement, sleep deprivation, illness as a result of privations, denial of medical treatment, unsanitary conditions in prison and forms of psychological and physical torture during interrogation. Torture is used to pressure individuals to make confessions and to provide information on others. As I mentioned, exorbitant bail postings secure the release of individuals, along with illegal documents that religious detainees are forced to sign. Such documents demand an end to participation in Christian activities, the renunciation of faith, and compliance with further questioning when summoned. Laptops and mobile phones are often confiscated during raids on private Christian homes and are used to obtain information on the activities and identities of other Christians.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Liverpool, Riverside (Mrs Ellman) on bringing the matter to the House today. One of the repercussions of the issue being discussed relates to employment and the owning of property. It is not just about being hit for worshipping God in church; there are repercussions beyond that. Does the hon. Gentleman know whether the Government have made any representations to the Iranian authorities to reduce and minimise the threats to Christian people?

[Mr Jackson]

I pay tribute to the hon. Gentleman, who has taken a great interest in these issues. If he will bear with me, I will make some key requests of the Minister when I conclude. I certainly agree with the tenor of his comments.

The majority of Christians arrested in the past year have been released and are either on bail awaiting trial or have been issued with severe warnings and threats against other Christian activity. The Church of Iran evangelical denomination has been particularly targeted with legal action in the past year. Pastor Behnam Irani is a pastor from that network who has been imprisoned since May 2011. He is currently serving a five-year sentence in Ghezel Hesar prison in Karaj for action against national security. The verdict against him includes text that describes Pastor Irani as an apostate and reiterates that apostates “can be killed”.

According to Christian Solidarity Worldwide sources, Pastor Irani is sharing a cell with criminals who regularly beat him and, as a result of injuries sustained during these assaults, he is now having difficulty walking. Christian Solidarity Worldwide was informed that, during the first few months of his imprisonment, he was held incommunicado in a small cell, where guards would repeatedly wake him from sleep as a form of psychological torture. He was moved into a cramped room where inmates could not lie down to sleep, before being transferred to his current cell.

[Jo Swinson (East Dunbartonshire) (LD)]

The hon. Gentleman is making a compelling contribution about the distressing persecution of the Christian minority in Iran, as the hon. Member for Liverpool, Riverside (Mrs Ellman) did about the Baha’i. Does he agree that it is bizarre that the Iranian Government claimed to support the Arab spring, when people were demanding democracy, freedom and human rights, while they oppress their citizens and abuse their human rights in the most appalling way, whether on the basis of religion, sexuality or for daring to express a political viewpoint?

[Mr Jackson]

The hon. Lady is absolutely right. It is more than distressing; it is of extreme concern to anyone who values freedom, liberty and democracy. We are seeing the beginnings of a systematic approach that sometimes prefaces genocide, and our Government—and other Governments—are starting to realise that.

I am mindful that other hon. Members want to speak, so I will make some progress. The Islamic Penal Bill, which would amend the Islamic penal code, is expected to be passed into legislation by the Iranian Parliament this year. The Bill will almost certainly increase the severity of human rights abuses in Iran. The initial approval of the Bill by the Iranian Parliament on 9 September 2008 was a worrying development, as the original draft stipulated the death penalty for male apostates and life-long hard labour or imprisonment for female apostates. In June 2009, Ali Shahrokhi of the Parliament’s legal and judicial committee reportedly told the Iranian state news agency—the Islamic Republic News Agency—that the committee had decided to remove the reference to the death penalty from the Bill as it was not

“in the interest of the regime”.

However, it is possible the death penalty clause may still be in the text. There were fears that, if that was the case, the clause would be implemented in the case of Pastor Nadarkhani without warning at any time and would endanger other Christians.

The persecution of Christians has been accompanied by a proliferation of anti-Christian rhetoric from authority figures in Iran. In October 2010, Supreme Leader Ayatollah Khamenei declared from Qom that Christianity was being deliberately spread by Iran’s enemies as a means to weaken Islam within Iranian society. Likewise, on 4 January last year, Mr Morteza Tamaddon, governor of Tehran, made a speech in which he openly threatened further arrests of Christians. He declared that evangelical Christians had inserted themselves into Islam “like a parasite” with the backing of the west. We must think back to the vile propaganda of the Nazis before the war and the way in which Jews and others were characterised when we consider the appalling comments that have been made by leading figures in the Government of Iran.

In August 2011, Ayatollah Hadi Jahangosha echoed this sentiment in a presentation on Mahdivism—belief in the twelfth Imam. He declared that

“the West is trying to devour our youth by publishing and advertising false Gnostic books…our enemies have noticed that Satanism and false Gnosticism are not popular in Iran and because of that they are taking a religious approach to expand Christianity.”

He identified the house-church movement as a deviant sect by stating that

“the ‘real Christians’ do not believe in this distorted Christianity-Protestantism.”

Furthermore, following the seizure of a consignment of 6,500 bibles in Zanjan province in mid-August, Dr Majid Abhari, adviser to the Iranian Parliament’s social issues committee, declared that Christian missionaries were attempting to deceive people, especially the youth, with an expensive western-backed propaganda campaign. In seeking to portray evangelical Christians as part of a foreign conspiracy against Iran, the regime seeks to justify its continuing crackdown on house churches and individual Christians.

I had intended to speak on the Baha’i faith persecution, but it has been covered admirably by the hon. Member for Liverpool, Riverside. I will, however, conclude by way of putting questions to the Minister. Perhaps he will respond by saying what action is necessary by the international community, and by the Foreign and Commonwealth Office and the Government. We should urge the Iranian Government to uphold their obligations under their own constitution and penal code, which do not codify the death penalty for apostasy, and their obligations under international law, including provisions for freedom of religion or belief, contained within the international covenant on civil and political rights, to which Iran is a state party.

We should urge the Iranian Government to ensure the removal of the clause stipulating the death penalty for apostasy from the draft Bill for the amendment of Islamic penal code in light of Iran’s human rights obligations, and to make the amended draft publicly available.

[Mr Gregory Campbell (East Londonderry) (DUP)]

On the point about the possible amendment within Iran, I, like others, was lobbied regarding the pastor. Thankfully, the death penalty was not used. Does the hon. Gentleman agree that our Government should, at every level possible in the immediate future, in the next weeks and months, ensure, as far as we can, that pressure is applied to the Iranian Government, and that we should not pre-emptively take any action that would endanger the life of the pastor about whom we are all concerned, as well as the lives of other Christians and Baha’is in Iran who could suffer a fate similar to that which has, unfortunately, been hanging over the pastor’s head?

[Mr Jackson]

I thank the hon. Gentleman. It is important to make the point to the Iranian Government and Iranian parliamentarians that the world is watching and that they cannot inflict their vile regime, systemic torture and abuses of human rights without very serious ramifications on the part of the international community. We should urge the Iranian Government immediately to release all Baha’i detainees held on account of their beliefs and to end official discrimination, monitoring intimidation and other hindrances to their freedom of religion.

A comment was made earlier by the hon. Member for Ilford South (Mike Gapes) about Mr Ahmed Shaheed, who must to be able to continue and complete his work unmolested. He is newly mandated as the UN special rapporteur on the situation of human rights in Iran. He needs to continue to monitor the regime’s compliance, specifically with respect to international human rights standards, including freedom of religion or belief.

Finally, the motto of Christian Solidarity Worldwide is, “Be a voice for the voiceless”. This debate is vital. Again, I pay tribute to the hon. Member for Liverpool, Riverside, because at least in this Chamber in our Parliament, the voiceless do have a voice this afternoon.

[Several hon. Members]

rose—

[Dr William McCrea (in the Chair)]

Order. It is normal to call the Opposition Front Bencher at 3.30 pm, followed by the Minister. A number of hon. Members are seeking to catch my eye. I should like to allow as many of them as possible to speak, so I ask colleagues to be mindful of that when they are making speeches.

15:06

[Jeremy Corbyn (Islington North) (Lab)]

I welcome the debate and the opportunity to raise the issue of human rights in Iran and, from that, our relationship with Iran. I deplore intolerance. I deplore the attacks on the human rights of religious people and religious minorities, dissidents within Islam or, indeed, linguistic minorities in Iran. Most countries in the world, including our own, have gone through periods of the most grievous intolerance towards minorities. One hopes that at some point Iran will come through this.

The current intolerance towards many dissidents in Iran is not particularly new. Indeed, it has gone on since the 1950s. The high point of freedom in Iran was the nationalist Government of the early 1950s. The coup of 1952 brought in the Shah’s regime and his secret police. The revolution of 1979 brought in the Islamic Republic and a great deal of repression of its opponents, particularly in its early days and more latterly. We should recognise that large numbers of people in Iran stand up for human rights, democracy and their own rights. Any change within Iran is more likely come from internal opposition and internal organisation than from anything that is done from outside or any outside pressure.

To add to the list of people affected, I draw attention to an early-day motion that I tabled early in December:

“That this House is alarmed at the re-arrest of Ebrahim Madodi from the Vahed Trade Union Syndicate in Tehran; calls for his release and that of fellow trade unionist, bus workers’ leader, Reza Shobabi immediately; and supports the rights of independent trade unionists in Iran to represent their members without the threat of imprisonment.”

Ebrahim Madodi was released after an international campaign mounted by the TUC in this country and supported by many other unions. Indeed, campaigns have been mounted on behalf of Christians who have been under threat in Iran. The regime responds when there is enough international pressure. They do not send an e-mail straight away saying, “Thanks for your representations; it has all changed.” What one notices is that subtly, over a period of a few months, usually some kind of change happens. It is therefore well worth raising these issues, and it is very important that we continue to do so.

I should like to draw attention to a couple of other points, but I am mindful of what you said about time, Dr McCrea. The UN special rapporteur on extradition and summary executions in Iran, supported by Amnesty International and Human Rights Watch, drew attention to the very large number of executions that have taken place in Iran, either for alleged drug dealing or alleged consumption of drugs. This country has a policy of absolute opposition to the use of the death penalty. I pay tribute to our representatives at the UN Human Rights Council, who routinely and absolutely assiduously, whenever a peer group review comes up of the human rights in any country, immediately raise the issue of the death penalty if it is applied in that country. When the Minister replies, I hope that he will be able to assure us that, when the next opportunity arises at the council, the death penalty in Iran will be mentioned again and complaints will be made about it.

In the context of what is happening in Iran, it is worth referring to documents from the Iran Human Rights Documentation Centre, as well as to its campaigns for media freedom, for film makers and for legal representation to be available to all those who have been arrested or detained by the Iranian state. We recognise that work, and we want to put pressure on the Iranian Government to ensure that the centre can carry out its work without let or hindrance.

It is also worth recognising that there is a problem in Iran beyond that which has been mentioned so far. A number of bombings and assassinations of scientists—nuclear scientists and others—employed by the Iranian Government are taking place in Iran, and mysterious explosions are taking place at military bases. I do not know, any more than anybody else in the Chamber knows, who is perpetrating those attacks, but there is clearly a pattern. I do not believe that any country, whether Iran or anywhere else, should have nuclear weapons. Iran is still a signatory to the nuclear non-proliferation treaty, and I hope that it remains one. I also hope that we take steps to achieve a nuclear-free middle east.

The British Government were obviously concerned when the attack on the British embassy took place, and all diplomatic representation has now been withdrawn from Iran. I should be grateful to the Minister if he explained what options are now available to people in Iran who want to contact British representatives, because I have constituents of Iranian origin with family members in Iran who want, quite legitimately, to visit family in this country. Under normal circumstances, they would be perfectly able to do so, but they now find it extremely difficult to know how to apply for the appropriate visa. I should be grateful to him if he explained how they could do that.

In this country, we have considerable freedoms to speak, as well as protection for minorities and tough anti-discrimination and anti-racist legislation. All that is absolutely right and proper, and I would want the same for everyone in every country in the world. I therefore support those in Iran who are doing their best to stand up for rights, democracy and accountability in their society. However, I am not convinced that such rights will be won for Iranian people by imposing isolation and sanctions on Iran’s Government, threatening military action or, indeed, attacking Iran. That will not bring about change but make the situation considerably worse for people in Iran.

Will the Minister therefore explain exactly what dialogue is taking place with the Iranian Government and what dialogue took place with civil society before the withdrawal of British diplomatic staff? Dialogue with civil society can be helpful in protecting people, but it can also be helpful in promoting changes in society. I want to see changes, but I also want to see peace. The presence of US warships in the region and sanctions against Iran will not necessarily bring about those changes; in many ways, such things are probably strengthening the regime and its intolerant side, rather than its more tolerant side.

We should pay tribute to those who demonstrated during the election process to call for free and fair elections, those who stand up in universities demanding intellectual freedom and those who stand up for plurality in society. Surely, that is really what the Persian tradition is about—not the intolerance and oppression that all Members in the Chamber have rightly drawn attention to.

15:14

[Andrew Selous (South West Bedfordshire) (Con)]

It is a pleasure to serve under you, Dr McCrea. I congratulate the hon. Member for Liverpool, Riverside (Mrs Ellman) on securing this important debate. She may be interested to know that Michael Nazir-Ali, a Member of the House of Lords and formerly Bishop of Rochester, was very active on behalf of the Baha’i community in Iran in his recent travels to that country.

I want to echo some of the remarks made by my hon. Friend the Member for Peterborough (Mr Jackson), who talked about the persecution of Christians in Iran, a subject I have raised on the Floor of the House with the Minister. It is important to say at the start that Christianity in Iran is as old as Iran itself. We know from the New Testament that Parthians, Medes and Elamites—all tribes from Iran—were present on the day of Pentecost. Furthermore, some of the earliest Christian missionaries to China were Iranians, and there is a lot of evidence that the early Church in Iran went back to the early centuries after the birth of Christ, and to people such as Tatian the Assyrian.

Any idea that the regime in Iran tries to put out that Christians are somehow not intrinsically Iranian, not patriotic or not part of the country is therefore historically wholly untrue and is not borne out by the facts, even though Christians are few in number in Iran. Their numbers are growing, however, and there is considerable growth in the Church. That is despite the fact that eight Christian leaders have been murdered for their faith since 1979. Open Doors, another excellent charity, which looks at religious freedom around the world, says Iran is the second-worst country in the world in which to be a Christian, after North Korea. Some colleagues in the Chamber were at this morning’s debate on North Korea, in which we looked at the position of minorities—Christians and others—in that country.

I was delighted by the Foreign Secretary’s intervention in the case of Pastor Nadarkhani, which was bold and clear, and it was heard in this country and around the world. I agree with the hon. Member for Islington North (Jeremy Corbyn), who said that our interventions do have an effect. Things may not change immediately, but countries do not like justified, evidence-based international criticism. Such debates are worth while in a small way, because when we mention the names of people who have been wrongly treated for whatever reason, we show our concern for them, and that has an effect. Those of us who are privileged to have a platform from which to speak in this place are called to be a voice for the voiceless, as my hon. Friend the Member for Peterborough rightly said.

It is right that we go on raising the case of Pastor Nadarkhani, and that of Pastor Fahad, who is in detention. Pastor Fahad’s Christmas service was raided on 23 December, when many of us were enjoying the freedom to go to carol services and so on in our communities. Children in the Sunday school were arrested and taken into detention—what an appalling thing to do to children.

[Jeremy Corbyn]

Will the hon. Gentleman confirm that intolerance in Iran towards Christians and, indeed, other religious minorities, including Jewish people, is outwith the traditions of Persia before the Shah’s time, when there was considerable religious tolerance of a wide variety of faiths?

[Andrew Selous]

That is a good point, and it adds to some of the historical context that I was trying to give earlier. I am grateful to the hon. Gentleman for quite properly putting that on the record.

Like my hon. Friend the Member for Peterborough, I want to mention the case of Farshid Fathi, who was imprisoned just over a year ago, on 26 December 2010. He is still in Evin prison, and I have not met him, but I have met Dr Tony Sargent from the International Christian College in Glasgow, who knows him well. Farshid Fathi is a very bright and dynamic young man who is the life and soul of the party, but he is languishing in prison when he should be free to nurture a church, as he feels called to. Similarly, Pastor Behnam Irani was imprisoned in May 2011, and he, too, is someone we should not forget. I agree with the concerns my hon. Friend raised about the Islamic Penal Bill. There is still the possibility that the death sentence could appear in it for apostates.

In mid-August last year, 6,500 Bibles were seized in Zanjan province. It is illegal for Christians in Iran to print or sell Persian Bibles, such as the one that I am holding. Bibles have been seized, and there have been reports of some having been burned. Christians around the world rightly condemned the threatened burning of a Koran by a rather fringe and slightly lunatic pastor in Florida some years ago, so some condemnation by Muslims of what we have heard from Iran on the burning of Bibles would be welcome and would give us a bit of reciprocity.

I have had meetings with diplomats from the Iranian embassy, but I do not think that there will be many more, because they are back in Tehran at the moment. I met Mr Mousavi and Mr Sahabi, and got the impression that they were personally slightly uncomfortable with what is going on in Iran, which is perhaps a glimmer of hope for the future. When I met them in the Pugin Room, they gave me a document, which I have with me today, called “Minorities in the Islamic Republic of Iran”. It reads very well, as documents from Governments with poor human rights records tend to, and it says that Christians in Iran should

“Enjoy freedom in holding religious ceremonies and rites.”

We know from what my hon. Friend the Member for Peterborough eloquently said that that is not the case at all.

It is right that we keep raising such matters and do not give up. History tells us that the cause of freedom shines through in the end. Whether one is in Islington, Bedfordshire or any other part of the world, such rights, as the hon. Member for Islington North said, are universal. We will continue to raise these cases for as long as it takes.

15:21

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

During the previous Parliament, the Select Committee on Foreign Affairs went to Iran in autumn 2007, and in February 2008 it published a report that went into considerable detail on many issues, including the human rights situation. The Select Committee concluded that Iran is a complex and diverse society ruled by a theocratic regime. My impressions are of a young country that wants to engage with the rest of the world, but is prevented from doing so by the policies of the ruling clique. However, another problem is that there is not one ruling group; that touches on the point about how the authorities sometimes move in unexpected ways, because decisions are not taken in a way that is transparent from our point of view.

How we deal with a country such as Iran is a dilemma. On the one hand, we try to encourage a process of openness and reform, but on the other, we recognise its appalling behaviour, whether in systematically breaching obligations under the non-proliferation treaty; sponsoring terrorist actions in other countries; or defending the autocratic, repressive Syrian regime, as it is doing at the moment. We and the European Union had problems with the policy of so-called “constructive engagement”, which has run into the sand. We saw the newly elected President Obama extending his hand to the Iranians when he came to office in early 2009 and being snubbed. How do we deal with a country of that kind?

[Fabian Hamilton (Leeds North East) (Lab)]

I, too, was in the delegation to Iran in November 2007. Would my hon. Friend agree that we were given privileged access to, among other things, some of the dissenters? Following on from the point made by my hon. Friend the Member for Islington North (Jeremy Corbyn), there are quite a number of dissidents who stand up for the things that they believe in—a free, open, democratic and pluralist Iran—despite being oppressed day in, day out.

[Mike Gapes]

I accept my hon. Friend’s point, but I think that we were not “given privileged access”; rather, our diplomats made it possible for us to engage with some people. It was a privilege for us, but those people were taking great risks in contacting us, and some of them are no longer in Iran and are not allowed to return, due to their activities at that time and because they would not be secure and safe.

I want to conclude by making a contrast. BBC journalists are not allowed to report in Iran, and the Iranian authorities make systematic efforts to jam international broadcasts and satellites, including the BBC World Service Persian television service, which has been very popular with the Iranian people. The regime tries very hard to keep from the people the truth about the atrocities in June 2009, when protestors against the rigged election were on the streets in huge numbers, and about what subsequently happened to protestors’ families. Propaganda is broadcast to Iranian homes by state-controlled Press TV, including broadcasts from London of people who claim that the demonstration against tuition fees was parallel to the protests of June 2009.

Will the Minister say something about the anomaly of the BBC not being allowed in Iran and foreign broadcasts systematically being prevented from getting through to Iran—so far as the regime is able to prevent that—when we allow representatives of the Iranian Government, through their mouthpiece, Press TV, to broadcast propaganda about this country that completely distorts what is happening in the world? Given the current crisis, and the fact that diplomatic relations are broken, I find it difficult to see why we do not take steps to prevent Press TV from behaving in such a way. Would we have allowed Nazi media to broadcast from London in 1939? I ask that question as a serious point for us to think about for the future.

15:26

[Martin Horwood (Cheltenham) (LD)]

It is a pleasure to serve under your chairmanship, Dr McCrea.

[Dr William McCrea (in the Chair)]

Order. Perhaps I might be helpful: the Front-Bench spokespeople have been flexible about time, so I will not cut off Back-Bench speakers at half-past 3, as I originally said I would.

[Martin Horwood]

I am now even more grateful to serve under your extremely lenient and enlightened chairmanship, Dr McCrea.

I congratulate the hon. Member for Liverpool, Riverside (Mrs Ellman) on choosing a subject that is even more topical today than she probably realised it would be when she secured the debate. It is clear that the human rights situation has worsened since the contested elections in Iran in 2009. Amnesty International’s recent report states:

“The authorities maintained severe restrictions on freedom of expression, association and assembly. Sweeping controls on domestic and international media aimed at reducing Iranians’ contact with the outside world were imposed. Individuals and groups risked arrest, torture and imprisonment if perceived as co-operating with human rights and foreign-based Persian-language media organizations. Political dissidents, women’s and minority rights activists and other human rights defenders, lawyers, journalists and students were rounded up in mass and other arrests and hundreds were imprisoned. Torture and other ill-treatment of detainees were routine and committed with impunity. Women continued to face discrimination under the law and in practice. The authorities acknowledged 252 executions, but there were credible reports of more than 300 other executions.”

It is almost inevitable that the true total is higher.

The situation for human rights defenders, lawyers, protestors, trade unionists and ethnic minorities seems to be getting worse. The regime’s intolerance of not only dissenting political beliefs, but, as many hon. Members have pointed out, dissenting personal beliefs is increasingly clear: secular teachers at universities have been purged; Ahwazi Arabs have been sentenced to death for enmity to God; and Amnesty has drawn attention to the plight of Sunnis, dissident Shi’as, Christian converts and evangelists, and the Dervish and Sufi communities, who all suffer discrimination, arbitrary detention and attacks on community property.

By drawing attention to the plight of those of the Baha’i faith, the hon. Member for Liverpool, Riverside has shown that she is particularly well informed. The faith is not even recognised as a legitimate religion in Iran, so the hon. Member for Peterborough (Mr Jackson) was right to say that discrimination against the Baha’i is systematic and institutionalised. My small group of Baha’i constituents have shown me great hospitality in my constituency, and I promised them that I would take every opportunity to support the rights of the Baha’i in Iran. I am happy to fulfil that pledge today.

[Jo Swinson (East Dunbartonshire) (LD)]

My hon. Friend reads out a devastating roll-call of abuses. However, the situation is even worse than he outlined. He mentioned 252 executions, but in 2011 that number included the execution of a juvenile. There are currently 143 juvenile offenders on death row in Iran, in complete defiance of international law.

[Martin Horwood]

My hon. Friend makes a devastating point in support of her argument.

The last faith group in Iran that I shall mention is the Jewish community, which is extremely long-established. There is a history of tolerance of the Jewish community in Iran, but there is increasing evidence that anti-Semitism is growing there, and that the small Jewish community there is being blamed for the actions of the Israeli Government. Those actions are beside the point; an unfair collective punishment is, in effect, being imposed.

I support the consistent calls from the United Kingdom Government and the European Union for an improvement in the human rights situation in Iran. Certainly, the decision by the EU in October to increase targeted sanctions on officials—those identified as responsible for particularly grave human rights abuses—was exactly right. The sanctions regime is interconnected with the nuclear programme in Iran, but targeted sanctions relating to human rights are every bit as justified, in my view, as those relating to the nuclear programme.

It is important, as the hon. Member for Islington North (Jeremy Corbyn) mentioned, that we do not pursue a path that leaves the regime no escape route and inadvertently strengthens the hands of the hard-liners in the regime. Iran is not North Korea. Iran is not a monolithic society; it has human rights defenders, courageous and independent-minded writers, filmmakers, journalists, bloggers, lawyers and young campaigners; it does, in effect, have opposition; and, above all, it has a young population that is quite aware of what has happened in the neighbouring Arab countries in the Arab spring, and is aware of what democracy really looks like—and what oppression looks like.

Of course, Iran has a tradition of vigorously contested elections, even though they are not democratic in the sense that we would recognise. That tradition of independent thought and resistance should be reinforced and supported wherever possible. That means that the exercise of soft power can have some effect, can still be deployed and is likely to have positive effects.

The jamming of international radio and TV broadcasts—I cannot remember which hon. Member mentioned that—is an important issue. I draw attention to it again and ask for ministerial support to raise it at the International Telecommunication Union world radio conference in Geneva, which begins on 23 January. The jamming of the BBC Persian TV service has resulted in that service being taken off the Hot Bird satellite, which is the main satellite for the region. That illegal censorship is, in effect, denying freedom of information and human rights to the Persian-speaking population. I welcome Ministers raising the profile of that issue in advance of the conference.

The Persian people, like their Arab neighbours, have the potential to tackle the human rights issue once and for all themselves, through their own resistance and traditions of championing freedom. We should do everything we can to support them.

15:30

[Kerry McCarthy (Bristol East) (Lab)]

It is a pleasure to serve under your chairmanship, Dr McCrea.

I, too, thank the hon. Member for Liverpool, Riverside (Mrs Ellman) for securing this debate. I do not intend to touch on the issues that she raised with regard to the Baha’i faith, because she did comprehensive justice to those and we will hear the Minister’s response. We also heard from the hon. Members for Peterborough (Mr Jackson) and for South West Bedfordshire (Andrew Selous) about the plight of Christians. Both issues have been raised with me on a number of occasions by local campaigners, including members of the Baha’i faith and the Christian community in Bristol and on a wider scale.

I join hon. Members in paying tribute to the work of Christian Solidarity Worldwide, which was also mentioned earlier today during a debate on human rights in North Korea. CSW does sterling work campaigning there, as well. It is testament to that organisation’s powerful campaigning on this issue that so many hon. Members have mentioned it.

I was going to mention the BBC World Service Persian TV service being jammed, but that has already been mentioned by hon. Members. Will the Minister comment on what representations have been made? That has been going on for a couple of years, and since 2009 there has been almost consistent jamming of the service and only intermittent ability to broadcast. I should be grateful if the Minister said a few words about that.

It is 17 years since Iran last submitted a report to the UN human rights committee. As we have heard, the scale of human rights abuses in the country is vast. It is not just people of religious faith who have come under threat: political activists, women and ethnic and sexual minorities live under the real and ever-increasing threat of arbitrary arrest, torture and even death. The UN has called on the Iranian Government to engage with the international community in strengthening human rights safeguards and we fully support this approach.

A key area of concern is the deplorable attack on the British embassy in Tehran last November. The Iranian Government have blocked access to the embassy’s website, which detailed Iran’s human rights obligations and important information about how Iranians could travel to the UK. Given that the Government have now closed our embassy in Iran—a measure that Labour spokespeople supported—will the Minister say how they intend to continue to monitor human rights violations in the country? Does the Minister accept the concerns of some human rights campaigners that the embassy’s closure will inevitably have an impact on the UK’s ability to appeal to the Iranian Government regarding ongoing and future human rights abuses? Will he also say what impact the closure of the embassy will have on our work with civil society groups within Iran?

Although the attack on the embassy was utterly deplorable, we should not allow that to deter us from trying to find ways to continue to promote human rights and hold the Iranian Government to account for their abuse of those rights. The campaign to save Sakineh Mohammadi Ashtiani from being stoned to death has already been mentioned; that is a compelling example of how international pressure can have an effect on the regime. As my hon. Friend the Member for Islington North (Jeremy Corbyn) said, there are small signs that such things have an impact, even though they may not deliver overnight the ideal situation that we would like. The campaign to save her life continues. There is still a threat of death by hanging. It is important to try to mobilise international opinion on such issues.

[Jeremy Corbyn]

At some point, Iran will have to submit itself for an in-country review of human rights at the UN Human Rights Council. I do not know when that will be, but it cannot be that far away, because it is near the end of the first tranche of in-country reviews. That would be an ideal time for the concerns that hon. Members have raised here to be rearticulated by the British representative in Geneva.

[Kerry McCarthy]

It is important that Iran is subject to such intense international scrutiny.

The UN special rapporteurs have difficulty coming up with authoritative statistics. Figures show that 252 officially announced executions were carried out in 2011. However, Amnesty International, the International Campaign for Human Rights in Iran, and the UN have reported that more than 300 people were secretly executed in Iranian prisons in 2011. There is a strong suspicion that the real figure is probably far higher.

Among those secretly executed were women and a great number of foreign nationals, particularly from Afghanistan, the majority of whom were accused of drug trafficking offences. Testimony from relatives and other inmates reveals that the majority of the victims were not informed of their sentence until a few hours before the execution was carried out and that most executions occurred without families being given prior notice. Most deplorably, as has already been mentioned, Iran continues to execute children, who are widely reported to have been tortured into making confessions. It is suggested that 143 children remain on death row.

[Jim Shannon]

In respect of the figures that the hon. Lady mentioned, approximately 550 and 600 people were executed in Iran last year—and probably every year for a period of time. Iran is second only to China in that regard. Does its being number two in the world league of executions lead to concern?

[Kerry McCarthy]

We oppose the use of the death penalty in any circumstances, but the crucial starting point is that information on executions that are carried out should be transparent. We should know the figures for what people have been convicted of and how many executions have been carried out—half the executions I mentioned were carried out secretly, and most people would regard it as inappropriate that offences such as drugs trafficking should carry the death penalty. The issue is significant, and one on which we should continue to put pressure on the Iranian Government.

[Mr Stewart Jackson]

The hon. Lady is giving a good overview of the difficulties. Does she concede that, because of its role as a state sponsor of terrorism and other activity in the middle east, in particular in support of despotic regimes, Iran is in many ways exporting human rights abuses throughout the region?

[Kerry McCarthy]

There is certainly concern about the international role played by Iran. I do not want to stray into the territory of its foreign policy, particularly because Iran does not fall under my brief in the shadow foreign affairs team, but I share the hon. Gentleman’s concern about the influence of the Iranian regime, in particular in the region, and the wrong message being sent to other regimes.

We have not debated in much detail today the impact of human rights abuses on women in the country. Officially, under article 20 of the Iranian constitution, there is equality between men and women. It states:

“All citizens of the country, both men and women, equally enjoy the protection of law and enjoy all human, political, economic, social, and cultural rights, in conformity with Islamic criteria.”

As a recent report by the UN confirms, however, Iranian law provides an insurmountable barrier to gender equality. To give a few examples, under Iranian law, a woman’s testimony is worth only half a man’s testimony; the age of criminality starts at the age of nine for girls, whereas it is 15 for boys; mothers may never have guardianship of their children, even if they are widowed; and women do not have equal inheritance rights. For some time there has been growing concern about the crackdown on women who fail to adhere to the traditional dress code in public. For example, the number of women applying to university has declined since measures taken by the regime to enforce the dress code there.

Disturbingly, Iranian authorities blame women who have been raped for inducing their attackers to sexually assault them. In June 2011, 14 women were kidnapped and gang-raped, but the Government claimed that the women had brought the attack on themselves and that the manner in which they had been dressed was reason enough not to bring the attackers to justice. Recently, we have seen the imprisonment of women’s rights activists who signed the “One Million Signatures” campaign to repeal discriminatory laws. One activist was sentenced to nine and a half years in jail for assembly and collusion against the regime and to a further two years for participating in a protest against laws discriminating against women. Another women’s rights activist was given three and a half years in one of Iran’s most notorious prisons in May 2011.

Three gay men are known to have been hanged in Iran in 2011, and two teenage boys, in a case that drew widespread international attention, were hanged in 2005 for the same offence. Some observers report that that is only the tip of the iceberg, because in many cases the families are not prepared to make public the fact that their relatives were executed under the sodomy laws.

I finish with a few words about the role of social media in Iran. We heard from the hon. Member for Cheltenham (Martin Horwood) about how a fairly well organised, well educated opposition movement exists in Iran, and how it is struggling to break free from the regime’s grasp. According to Harvard university, the rate of growth of internet usage is higher in Iran than in any other country in the middle east. An estimated 700,000 active blogs come from the country. In 2009, the regime was quick to blame the use of the internet, social networking sites in particular, for the outbreak of protests following the disputed presidential election. Today, the regime does all it can to block access to websites promoting democratic change. For example, in September last year, a blogger received a nineteen-and-a-half year prison sentence for propaganda against the regime, and the UN’s recent report on the state of human rights in Iran gives numerous examples of bloggers and journalists imprisoned for similar activities.

It has now been reported that internet cafés have been asked to record customers’ online footprints and to install security cameras. As recently as Monday this week, the Iranian regime announced that it intends to introduce its own internet operating system, to enable it to block websites considered unsuitable and to monitor online activity. As we saw in other countries during the Arab spring, social media are incredibly important in spreading democratic ideas and in enabling people to mobilise opposition to human rights abuses and undemocratic practices. I urge the Minister, in his discussions on human rights in Iran, to stress that freedom of expression is an important human right, and that access to the internet and to social media is now a fundamental freedom that should be protected.

15:39

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)]

I echo the sentiments of others, Dr McCrea, that it is a great pleasure to serve under your chairmanship. I thank all colleagues who have spoken, in the spirit of a collective Parliament speaking across party lines on matters about which we think similarly. I appreciate the challenge offered by one or two colleagues and will do my best to respond.

I congratulate the hon. Member for Liverpool, Riverside (Mrs Ellman)—an old friend in such matters over the years—on securing the debate and on how she raised the issues, from deep knowledge. She mentioned a series of individual cases, and I might touch on some during my remarks, although there were too many for me to comment on them all. She spoke for all of us when she hoped that such debates shone some light on the situation of the Baha’i community for instance, or others under pressure in Iran. As my hon. Friend the Member for Peterborough (Mr Jackson) said, we collectively act as a voice for the voiceless and for those minorities known and unknown to us, in what we do here. Colleagues have certainly lived up to such obligations.

The human rights situation in Iran continues to deteriorate sharply. The United Kingdom, together with the international community, continues to urge the Iranian regime to respect its human rights obligations and to improve the situation of its people. Our efforts and those of Iranian and global civil society ensure that the international spotlight remains on the serious human rights violations taking place in Iran today. Before I comment on some of the individual items that came up, let me refer to one or two general issues raised by colleagues.

Concern is not felt simply by those outside Iran, and I pay tribute to the bravery of those operating in Iran. In September last year, The Times ran a good seminar entitled “Imprisoned in Iran”, to raise awareness of the plight of victims of human rights abuses. The event was well attended, raised a large number of issues and was addressed by my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs. Among his remarks, he said:

“2011 has shown that demands for human dignity are irrepressible. Iranians should take solace from this… Iran is very different from its Arab neighbours. But the lessons of the Arab revolutions hold true for Iran just as they apply to repressive countries across the world. Simply refusing to address legitimate grievances about human rights or attempting to stamp them out will fail.

While some governments across the region are waking up to this truth, Iran is moving in the opposite direction. The actions of the Iranian regime are holding Iran back, isolating its people and suffocating their immense potential, and preventing Iran from enjoying normal and productive relations with the outside world.”

My right hon. Friend conveyed the sense of how well we understand the dynamics. Iran is a complex society, not a monolithic one. At one and the same time, we can condemn the activities of the regime and express support for the Iranian people. When relations with the regime have necessarily to be rather more restricted than they were, it is still possible to engage the Iranian people and to have contacts with the regime itself. Colleagues said that they wanted the United Kingdom Government to be aware of that sentiment, so let me elaborate.

I thank the hon. Member for Bristol East (Kerry McCarthy) for her support and that of her Front-Bench colleagues in relation to the appalling attack on the embassy. When there is a problem and an embassy must be evacuated, neighbours step in to provide support. We are working actively to find a country that will take on the obligations and we are in negotiation, but until that is done, under the Lisbon treaty—if a Minister may mention that—EU partners can provide support for one another in such circumstances. We are grateful to other EU member nations that have been able to provide support.

[Jeremy Corbyn]

If a family of Iranian origin living in Britain wants to invite a family member to an occasion here, or the other way round, to which specific embassy in Iran should that family address its inquiries?

[Alistair Burt]

At the moment, they can take the matter up with any other EU embassy. In due course, one designated embassy will take on responsibility as a protecting power. That process must be negotiated not only with the country willing to take that on, but with Iran—that may explain the time that has been taken—but for the time being a partner EU nation can take on that request. I hope that that explanation is helpful.

Despite the invasion by regime-backed paramilitaries and the subsequent closure of the embassy, our wish to maintain strong support for and friendship with the Iranian people remains. We have always stated that our disagreement with Iran on human rights is with the Iranian leadership regime, not the people. Human rights are universal, and Iran’s failure to meet its obligations is punishing and stifling the fulfilment of the wishes and aspirations of millions of people.

Dialogue continues, and the hon. Member for Liverpool, Riverside and others, including my hon. Friend the Member for Cheltenham (Martin Horwood), spoke about the importance of continuing a dialogue using social media and the like. Again, the Government are well aware of that. We have a good system of direct contact with people in Iran. We have a Farsi service and can communicate directly with people in Iran. They are savvy and open to the world; they know what is going on; and they know the limitations of their own regime. We are also aware of how we can continue to contact and work with them. We have a Farsi spokesperson to speak directly to the Iranian people, so colleagues may be absolutely sure that we will do that.

The embassy is not the only way in which to make representations to Tehran. The hon. Member for Liverpool, Riverside was right to raise the matter, because closure of the embassy makes that more difficult but not impossible. Our contacts through other channels and with other agencies will certainly be kept up. The balance is difficult to maintain, but we are endeavouring to do so.

The hon. Member for Islington North (Jeremy Corbyn) speaks with a deep background of the issues and raises the awkward and realistic ones that need to be raised. It is clear from our contact with Iran on the nuclear issue that an offer of negotiation is available. We urge Iran to respond to the latest letter from Catherine Ashton, the EU High Representative, because we will not be caught out by the Iranians saying that they have been backed into a corner. The opportunity exists for them to talk. We oppose the killing of civilians, and we want a negotiated solution to the problem. We are also alert to the fact that human rights issues in Iran may often be more powerful than the nuclear one, which is why we are concentrating on the matter today.

I shall respond to some of the specific issues raised. The hon. Member for Bristol East mentioned the situation of women in Iran. In 2010, we opposed Iranian membership of a specific UN women’s committee because of Iran’s discriminatory practices in relation to women. In June last year, my right hon. Friend the Foreign Secretary spoke out about the arrest of women activists and praised those whose conscientiousness and achievements should be celebrated but who are instead behind bars. We will continue to highlight and to encourage Iran to address gender discrimination in Iranian law.

Iran’s excessive use of the death penalty is a major cause of concern. In 2011, reliable sources reported that about 650 people were executed, although because of the opacity of the Iranian judiciary and penal system, it is quite possible that the number is much higher. That maintains Iran’s inauspicious record as the country witnessing the highest number of executions per capita in the world. Iran’s use of the death penalty shows little regard for minimum international standards in the application of the death penalty, including a lack of fair trial and the execution of juveniles. We should not forget other brutal punishment methods, including stoning. Fourteen people still live under sentence of stoning.

On freedom of speech and assembly, last year Iran was described by the Committee to Protect Journalists as the

“biggest prison for journalists anywhere in the world”.

It finished the year with more journalists and bloggers in prison than anywhere else, including China. The traditional forms of media in Iran are all run by the state, with satellite television banned and most foreign journalists denied entry. The hon. Member for Ilford South (Mike Gapes) raised that matter. Iran blocks more than 10 million websites and is pursuing a separate and highly censored Iranian internet, disconnecting Iran from the world wide web.

The hon. Gentleman referred to the contrast between Press TV and everything else. The contrast is this: we do not control and we do not censor through Government as such. The law does that. Press TV may be investigated by Ofcom. That is the appropriate regulatory body. That is how we do it here, not through Government diktat. That is the contrast between the two nations. Press TV must obey the laws of this country, but is handled independently, as we all know.

In 2011, we have again seen brutal crackdowns by the Iranian state. During the first one in February, several people were killed by the security forces. In April, more than 30 people reportedly died during protests in Ahwaz in southern Iran. In August, security forces attacked people who were protesting peacefully against the neglect of a natural salt lake in Azerbaijan province in northern Iran, and several deaths were reported. The range of activities that a repressive regime may clamp down on is extensive.

The majority of colleagues wanted to raise the issue of minorities, including the Baha’i and Christian communities. In 2011, we saw increasing patterns of violence and intimidation against minorities. The authorities have continued to crack down on Kurdish and Baluchi groups, as well as those mentioned today. Religious minorities have been subject to arrest and intimidation, as we have heard. Christians and Baha’is in particularly have suffered harassment, and I am grateful to my hon. Friends the Members for Peterborough (Mr Jackson) and for South West Bedfordshire (Andrew Selous) for their remarks. I echo the tribute to Christian Solidarity Worldwide.

We have spoken in the House about both issues a number of times, and the Government have made representations on them. I have met the Baha’i community in the United Kingdom, and I made representations direct to Iranian representatives when they were here. We continue to raise the matter, and we have done so also in relation to Christian persecution, about which colleagues spoke movingly. We particularly deplore the pressure that has been put on the Baha’i community in Iran, and the attacks on the Baha’i Institute of Higher Education, and its closure. We will continue to raise all those issues.

A general point about the protection of religious minorities is that protection of an individual minority must be done in company with all. In our experience, those who oppress one minority usually oppress others, and it is collectively safer if we raise the issue on behalf of all—the lesbian, gay, bisexual and transgender community, women, Christian minorities, Muslim sect minorities and Baha’is. If we seek to protect the rights of all, we are doing the best that we can.

On UK action at the UN and through the Human Rights Council, colleagues can be assured that we press other countries to support resolutions that we have co-sponsored. The result of a vote in December showed how effective lobbying had been because the margin was the largest ever in relation to a country-specific resolution against Iran. That showed how successful some of the work had been, and we will continue with that. The next periodic review when Iran must deal with the issues will be in 2014, and we will press at the council in March, as we do at every council, for Iran to deal with the record against it that colleagues have spoken about. There is no doubt that the issues raised here will continue to be raised by colleagues, but they may rest assured that their concerns are echoed by the Government. We will continue to stand up for the rights of those who are oppressed in Iran.

Sergei Magnitsky

Wednesday 11th January 2012 Westminster Hall

15:59

[Mr Denis MacShane (Rotherham) (Lab)]

It is a great pleasure to initiate this debate under your chairmanship, Dr McCrea. Today I want to deal with the tragedy of a lawyer who worked closely with and for a British company—and its British chairman who is present in Westminster Hall—and who was done to death under the most atrocious circumstances. If a British lawyer working for an overseas firm had been arrested and so mistreated in the UK, all hell would break loose. This tragedy, however, happened in today’s Russia, and my charge is that the British Government have been singularly lax in dealing with the case, and lacking in adequate and necessary measures, not only to obtain justice but to send a clear message that putting to death a lawyer who represents British interests is not cost free. I do not claim a new policy of “advocatus Britannicus sum”, but the idea of civilisation and the rule of law, as well as the clear rules in the European convention on human rights to which Russia is a signatory, provide a special place for lawyers to represent their clients without facing prosecution or persecution unto death.

The details of the tragic death of Sergei Magnitsky are somewhat well known. Mr Magnitsky was the Moscow lawyer of British businessman William Browder. Mr Browder was born American and is the grandson of Earl Browder who was leader of the Communist party in the United States during the 1930s until he fell out with Stalin in 1945. Earl Browder’s grandson decided that capitalism was a better bet than communism, and over a decade beginning in the 1990s he built up the largest investment fund in Russia with billions of dollars of assets. However, not all went well for young Browder when he started publicly complaining about endemic corruption in Russian state companies, and in 2006, President Putin expelled him from Russia as a “threat to national security”. I would like to recommend to the House the remarkable documentary by Ms Norma Percy on the early Putin years. It will be shown on BBC 2 next Thursday and it illustrates the interface between politics, state bureaucracy and business.

Once the Putin regime decides that it does not like a business leader, it does not operate in half measures, and when it decides to turn on someone, it does so in spectacular fashion. After Browder’s expulsion, Putin’s tax police raided his offices in Moscow, seized all his company stamps and seals and stole his investment holding companies. Browder hired a bright young Russian lawyer, Sergei Magnitsky, to try to stop this continuing state-sanctioned crime. Magnitsky investigated all the police actions and discovered that Browder’s companies had not only been stolen but had subsequently been used by the tax police to fraudulently refund from Government coffers the $230 million in taxes that Browder’s firm had paid in the previous year.

Magnitsky did what any lawyer would do on behalf of his client: he filed criminal complaints and testified on the involvement of the tax police in that enormous theft. That was a big mistake. He was subsequently arrested by the same tax police officers against whom he had testified, and blamed for the fraud himself. The scams that the Putinocracy arranges are not just for a few high-up people—everyone gets a cut. To shut him up, Magnitsky was flung into one of the roughest prisons in Russia and essentially held a hostage. Because the Russian state could not get at Mr Browder, who, as a British citizen was now safe in London with his family, they went for his lawyer to send a signal to other firms operating in Russia saying that when the tax police—or anyone else demanding a cut—knock at the door, co-operation is wiser than insisting on the rule of law.

Sergei Magnitsky was brutally treated in prison. He was tortured for 358 days by sleep deprivation, freezing temperatures, the withholding of food and other torments left over from the Stalin era of torturing people whom the Kremlin did not like. After six months of such treatment he became extremely sick and was systematically denied any medical treatment. Eventually, Magnitsky’s beleaguered body began to give way and his condition became critical. Instead of sending him to the emergency room, his jailers put him in an isolation cell and allowed eight riot guards with rubber batons to beat him until he was dead. In November 2009, he was found lying in a pool of his own urine, dead on the cell floor at the age of 37.

Since then, the Russian Government have tried to cover up the cause of Magnitsky’s death, and a network of named officials in the tax, police, public prosecution and prison departments of the Russian state has been identified as part of that cover-up. Many of those involved have bought property abroad at prices that would be impossible on their declared salaries.

None of those facts are secret and they have been reported by journalists in Moscow, as have the details and names of those involved. The names have been listed by US Senators, Congressmen and Congresswomen, and by parliamentarians in some EU member states and in the European Parliament. The Magnitsky affair has also been the subject of a Council of Europe report. I, together with a number of right hon. and hon. Members, as well as Peers, have asked questions in Parliament and sought to highlight this assault on a respected British business, and show the terrible insight that the Magnitsky death gives us into how Russia operates. I had the luck to secure this debate, but that could have happened to any number of interested colleagues who support me on this affair, some of whom are present in the Chamber.

Vasily Aleksanyan was another young lawyer, and former general counsel to Yukos. In 2006, Mr Aleksanyan was arrested as part of the persecution of those involved in Yukos. He rapidly developed serious health conditions due to AIDS-related illnesses, but was denied antiretroviral treatment or chemotherapy in prison. In 2008, the European Court of Human Rights intervened and ordered Russian authorities to release Aleksanyan. The damage done to his body during his detention was too great, however, and he died last year as a direct result of the denial of treatment in jail.

That is the Magnitsky story. We must now turn to the Whitehall story and ask the Minister why the Foreign Office and Home Office have been so lax in taking up the Magnitsky case, and unwilling to take action against the named officials who were involved in theft via the tax system and the crime that Magnitsky sought to reveal. Will the Minister explain why some of the principals involved have been allowed to enter the UK without let or hindrance? Lieutenant Colonel Artem Kuznetsov from the Russian Interior Ministry was named in Magnitsky’s testimony as having orchestrated the theft of the Hermitage fund’s investment companies. Kuznetsov was also accused of perpetrating the $230 million tax fraud, as well as Magnitsky’s false arrest and persecution in detention. Public records—let me stress that—show that shortly after the $230 million was paid from the Russian Treasury, Kuznetsov’s family acquired $3 million worth of high-end apartments in Moscow, land plots outside the city and several luxury cars. Kuznetsov travelled to the UK twice in 2006.

Major Pavel Karpov, also from the Russian Interior Ministry, was named by Magnitsky as a close accomplice of Kuznetsov. Karpov initiated the criminal case against Mr Magnitsky that was used as a pretext for his false arrest. Public records in Russia—again, I stress that—show that Karpov’s family acquired $1.3 million in real estate assets and luxury cars following the completion of the fraud. Mr Karpov travelled to the UK four times between 2006 and 2007.

Dmitry Klyuev is the owner of Universal Savings bank through which the $230 million proceeds of the fraud were laundered. He was previously involved in a number of other tax-refund frauds, and in 2006 was convicted of a $1.6 billion fraud relating to the attempted theft of shares from Mikhailovsky GOK, a Russian iron ore company. Mr Klyuev also travelled to the United Kingdom at least five times in 2008. As I have said, all these names are on the record in Russia and on Capitol hill in Washington.

The following Government officials also played a role in the tax fraud that Magnitsky uncovered, his subsequent arrest and imprisonment, the persecution of Hermitage lawyers and executives, Magnitsky’s continued detention, the denial of medical care, torture, the denial of fair hearings, and finally his death in custody and the subsequent cover up: from the courts service, Judge Yelena Stashina, Judge Alexei Krivoruchko, Olga Egorova; from the Interior Ministry, Mr Oleg Silchenko, Oleg Urzhumtsev, Alexei Anichin, Oleg Logunov, Boris Kibis, General Major Tatiana Gerasimova; from the FSB—the Russian secret service and the successor to the KGB—Mr Viktor Voronin; from the tax offices, Olga Stepanova and Elena Khimina; from the prison services, Dmitri Komnov, Fikhet Tagiev and Yuri Kalinin; and from the General Prosecutor’s Office, Andrey Pechegin.

I ask the Minister to agree that those people should now be banned from entering the UK and their names circulated via Interpol and Europol. We need to sharpen up our diplomatic tools by declaring that the functionaries linked to Magnitsky’s death are unwelcome as visitors in Britain, thus copying what the US State Department has done under pressure from the US Congress.

[Mr Dominic Raab (Esher and Walton) (Con)]

rose—

[Chris Bryant (Rhondda) (Lab)]

rose—

[Mr MacShane]

I give way first to my hon. Friend.

[Chris Bryant]

The hon. Gentleman and I are probably about to say exactly the same thing. Does my right hon. Friend agree that there is not much point in just banning these people secretly behind closed doors? It is important that we say publicly that they are not welcome in this country.

[Mr MacShane]

I think that I may just have hinted at that.

[Mr Raab]

I congratulate the right hon. Gentleman on securing the debate. Does he agree that in addition to highlighting the tragic case before us, it is time for a British equivalent of the US Sergei Magnitsky Rule of Law Accountability Act, which would hold to account more generically foreign officials responsible for grotesque human rights abuses, through travel bans and asset freezes, and also that, as in the US, this a matter not just for the Executive, but for Members of this House and for Parliament?

[Mr MacShane]

I would support that. Perhaps some right hon. and hon. Members present might combine to ask the Backbench Business Committee for a longer debate, which might allow a slight pause for breath and more development of some of these themes. In particular, it would show the Russian authorities that this is a cross-party affair, with support from a considerable number of Members of both Houses.

[Mr Robert Buckland (South Swindon) (Con)]

I just want to add Canada to the list. It has also passed legislation in similar terms to the United States, so it is not just one country but many countries taking a strong stand against these appalling acts.

[Mr MacShane]

Poland and, I believe, the Netherlands have done so as well, but the addition of Canada, which is a great beacon of democracy and a Commonwealth country, is most welcome.

Yes, I believe that we should be doing what has been set out. We should not need to have a debate, because I hope that when the Minister replies, he will tell us that he fully accepts that the Foreign and Commonwealth Office will put a statement, a note, in the Library tomorrow, with those names on it, saying that they are not welcome in the UK, and will pass the names on to Europol and Interpol. So far, the FCO has resisted that idea and has constantly sought to downplay the Magnitsky affair. The FCO position or, more accurately, the Whitehall position has been to shelter behind Russian bureaucracy.

On 15 November 2011, the Minister for Immigration finally replied to a letter that I sent him in August on the idea of a visa ban. That was a very discourteous gap between my letter and his reply. He wrote:

“The Russian Presidential Council on Human Rights presented to President Medvedev its report on Mr Magnitsky’s arrest and treatment”

and the

“Minister of the Interior has announced that its own internal investigation has not found any evidence of abuses by their officials”.

Well, that is a surprise—a bureaucracy defends its own people. Nevertheless,

“the Investigative Committee of the Russian Federation chaired by Alexander Bastrykin”

would report by 24 November. To my knowledge, no such report was issued, and it is time for the FCO and Home Office to stop parroting Russian excuses for inaction and instead to follow the example of the United States, Canada and Poland and make it clear that those who stole the money that Magnitsky was investigating and then colluded in his death should not be given a permanent status of impunity by Whitehall fiat.

In an earlier reply to a parliamentary question from me on 13 July 2011, the Minister for Immigration—I welcome the Under-Secretary from the Foreign and Commonwealth Office, but this is as much a matter for the Home Office as it is for the FCO—confirmed the following:

“The Secretary of State for the Home Department…does have the power to exclude foreign nationals whose presence in the UK she judges would not be conducive to the public good”,

but he added that

“the duty of confidentiality means that the Government are unable to discuss the details of individual immigration cases.”—[Official Report, 13 July 2011; Vol. 531, c. 398W.]

I am sorry, but that will not do and it is not true. Her Majesty’s Government have regularly published the names of those to whom they deny visa entry. They include or included the TV cook Martha Stewart, the actor George Raft, the Scientologist L. Ron Hubbard and even a Nobel laureate, the Chilean poet Pablo Neruda, who wrote:

“Death is the stone into which our oblivion hardens.”

It is the wish of the Russian authorities that Magnitsky’s death hardens into oblivion, but as another great writer who lived under communism, Milan Kundera, wrote:

“The struggle of man against power is the struggle of memory against forgetting.”

Let us not hear from the Minister today that the Government cannot publish the names of the people whom they ban. We should not allow Magnitsky to be forgotten. If the Home Office can publicly ban a cook, an actor, a loopy and a poet, surely it can ban those Russian officials named as associates in this massive theft, then the arrest and ill- treatment to the point of death of a lawyer representing a British citizen and his company.

Modern Russian apparatchiks like to visit, buy flats in and educate their children in London. If we name and shame and announce that they will lose those privileges if they break the law and allow a lawyer representing a British firm to die in agony for having defended his client’s interest, diplomatic pressure will be focused and sharp and will send a clear state-to-state signal that Russia cannot live above the law.

This is not just about Russia, however. We need to find ways of sending signals to mid-level officials in other authoritarian regimes that when they break the law, the doors of Britain are not easily open to them. A new approach is required to create a new tool of democratic diplomacy—namely, the precisely targeted travel ban that is made public so that all law-abiding state officials in Russia and elsewhere can see that corruption and collusion in murder are no longer crimes without sanction. That is what more and more decent Russian citizens want.

A further signal could be sent. Just as Mr Putin is not welcome on the streets of Moscow today, Britain should say that he is not welcome at the opening ceremonies of the London Olympics. In 1980, Mrs Thatcher had the guts to say no to a formal British endorsement of the Moscow Olympics after the Soviet invasion of Afghanistan. If the Prime Minister wants to emulate the Iron Lady, he should say no to Mr Putin, who will use the London Olympics and the winter Olympics in two years’ time as events for self-promotion.

Of the 20 years since the end of communism, Russia spent the first decade being plundered by oligarchs and the second decade being robbed by state functionaries up to the highest level. It is time that Russia became a normal rule-of-law nation and its tax collectors levied taxes for the good of the people, not their own offshore bank accounts.

16:17

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)]

I congratulate the right hon. Member for Rotherham (Mr MacShane) on securing this very important debate. The high-profile case of Sergei Magnitsky is of serious concern to Her Majesty’s Government and one in which there is a clear need for Russia to act. As the right hon. Gentleman made clear, Mr Magnitsky, a Russian lawyer, went into pre-trial detention and died in state custody nearly a year later. Before his arrest, he had been working to uncover an alleged tax fraud against the Russian state by certain Russian law enforcement officials, a number of whom are alleged to have been involved in the investigation and detention of Mr Magnitsky.

In July 2011, the Russian presidential council on human rights published a report that found that Mr Magnitsky had been denied medical treatment and had been beaten while in detention, which directly contributed to his death, yet no one has been held to account by the Russian authorities. It is deeply disappointing that the Russian investigative committee appears to have made little progress. The publication of its findings in relation to Magnitsky’s death was postponed a number of times during 2011. They are currently due to be issued on 24 January. It is vital that the Russian authorities complete a thorough and transparent investigation into his death without further delay, as the case has wider implications for the rule of law and respect for human rights in Russia.

[Jo Swinson (East Dunbartonshire) (LD)]

What confidence does the Minister have that the Russian authorities will be able to complete that kind of transparent, thorough and fair investigation in this case?

[Mr Bellingham]

I am grateful to my hon. Friend for intervening. Of course, it is disappointing that the Russian investigative committee has made so little progress. It is also very disappointing that its report has been postponed on three occasions, but we are putting on all the pressure that we can and understand that the report will be issued on 24 January. We will keep up the pressure and look forward to publication on that date.

On HMG action, we have made our concerns very clear to the Russian Government. I should like to point out to the right hon. Member for Rotherham that the Prime Minister discussed this case with the President during his visit to Moscow in September, when he also outlined the need for confidence in the rule of law in Russia. This case is an unfortunate reminder that Mr Magnitsky’s death in pre-trial detention is not an isolated incident in Russia: approximately 50 to 60 people die in pre-trial detention facilities annually.

Our embassy in Moscow is providing financial support to the important work of the Social Partnership Foundation—a human rights non-governmental organisation—to look at the underlying causes of such cases and to help prevent further cases occurring.

The right hon. Gentleman referred to the Government subjecting Russian officials allegedly implicated in Magnitsky’s death to punitive measures in the form of visa bans. He will be aware that the immigration rules enable us to refuse a visa where information on an individual’s character, conduct or associations makes entry into the UK undesirable. However, the UK has a long established global practice, which has been followed by all recent Governments, including the one of which he was a member, of not commenting routinely on individual cases.

The right hon. Gentleman named a number of individuals whom he says were involved in the case. The Home Office and I will look into the cases of those individuals and will write to the right hon. Gentleman in due course.

[Chris Bryant]

I hope the word “routinely” was important in that sentence. The Minister for Immigration has, on several occasions, done a nudge, nudge, wink, wink to me to say, “Look, these people aren’t going to be coming into the country.” Frankly, though, we need more than that. If the Minister was prepared to provide a list of people who would not be welcome in this country, that would be a significant step forward.

[Mr Bellingham]

I am grateful to the hon. Gentleman for making that point. It is not something on which I can give a guarantee this afternoon, but we will be in a better position to do so once the investigative committee has issued its report on 24 January.

[Dr Julian Lewis (New Forest East) (Con)]

There is nothing routine about a murder closely connected with a British enterprise. Although Mr Magnitsky was not a British citizen, this case really is on a par with the Litvinenko murder. The reason why these things keep happening is well known: these people are crossing the Russian state. If the Russian state does not want to be seen as a gangster, surely it should stop killing journalists, lawyers and dissidents.

[Mr Bellingham]

My hon. Friend makes a powerful point in his own inimitable way. I would not want anyone to have the impression that I was describing this case as routine, because obviously it is not. What I said was that the Government have a policy of not commenting routinely on individual cases. Obviously, this is an incredibly serious case, and I take on board what he has said.

On visa action taken by other countries, we are aware of media reports that the US has imposed sanctions on implicated officials and added them to a visa application watch list. Although Bills have been introduced in the US Congress and some other countries’ Parliaments, such as in the Netherlands and Canada, and motions have been passed in support of visa bans against Russian officials allegedly implicated in Mr Magnitsky’s death, we are not aware that those states have taken such action.

What we ultimately want—as all Members will agree, I believe—is the Russian Government to take the initiative in ensuring that justice is achieved in this case and in putting in place measures to prevent further such cases occurring. To that end, we are urging the Russian Government to conduct a full and transparent investigation into Mr Magnitsky’s death, and we continue to raise the case at the highest levels.

[Fabian Hamilton (Leeds North East) (Lab)]

I am grateful to the Minister for what he says about the action that the Foreign Office is taking and to my right hon. Friend the Member for Rotherham (Mr MacShane) for raising the issue in the first place. This case is of the utmost importance. Will the Minister act in concert with his European colleagues, so that all the nations of the European Union can show their anger at the way in which this lawyer has been treated and at the abuse and violation of human rights in Russia today?

[Mr Bellingham]

I will certainly make sure that the hon. Gentleman’s strong comments are passed on to the Minister for Europe, so that he will speak to his European counterparts about this case at the next appropriate Council. He has already raised it with them, and similar action has been taken by other European countries. In the light of what the hon. Gentleman says, we will ensure that the case is raised again.

I should like to say a few words about the wider situation in Russia. The FCO’s annual human rights report makes it clear that we remain concerned about the rights afforded to Russian citizens and the strength of democracy. The Russian Government’s support for human rights often appears ambivalent. As President Medvedev has acknowledged, there is a pressing need to strengthen the rule of law in Russia. Legislative changes to reduce corruption represent a tentative step in the right direction. Reports of grave human rights abuses in the north Caucasus continue, and Russian human rights defenders and journalists remain at high risk. In some cases, though, we have seen some minor positive developments.

The state Duma parliamentary elections have been the key recent test of Russia’s democratic credentials. The conduct of those elections confirmed our concerns about human rights and democracy in Russia. Before the elections, NGOs and media organisations were routinely harassed. The Organisation for Security and Co-operation in Europe was permitted to observe the elections. The Office for Democratic Institutions and Human Rights concluded that they had been

“slanted in favour of the ruling party”.

As my right hon. Friend the Minister for Europe said on 6 December, those conclusions underline the need for alleged electoral violations to be investigated rapidly and transparently and to ensure that all democratic institutions, including the media, civil society and opposition political groups, can operate freely in Russia.

[Malcolm Bruce (Gordon) (LD)]

I apologise for being slightly late. I very much appreciate this debate. Does the Minister acknowledge that it is not just the conduct of the elections but the whole functioning of democracy in Russia that prevents anyone who could challenge the system from getting nominated, never mind elected, as a presidential candidate? Will Her Majesty’s Government not make it clear that pluralism requires a much more open access to democracy than is currently available in Russia?

[Mr Bellingham]

I am grateful to my right hon. Friend for making that strong point. In light of what he says, I can tell him that our wider work on human rights in Russia focuses on a number of key areas: democratic rights, including supporting free and fair elections, freedom of expression and freedom of the media; support for those seeking to resolve conflict in the north Caucasus; support for those seeking to increase monitoring, reporting and prosecution of human rights abuses; better support and protection for human rights defenders; support for those seeking a stronger rule of law with improved access to justice; and making progress towards greater equality and reduced discrimination.

[Jo Swinson]

I thank the Minister for giving way; he is being very generous. In early 2010, I visited Chechnya with Lord Judd to investigate the human rights situation. Will the Minister, in his discussions with Russian colleagues and his ministerial colleagues, impress upon the Russian Government that this is also an issue of security? It was clear from our trip to Chechnya that, without the proper upholding of human rights, the security situation and the terrorism issues faced there would not be resolved.

[Mr Bellingham]

I thank my hon. Friend for making that point. I agree with what she says, and we will ensure that that is taken up at the highest level.

In addition to the Magnitsky case, it is important that the Russian Government fully investigate the unresolved murders of journalists and human rights defenders. We remain concerned at the lack of progress in prosecuting those responsible for the 2009 murder of Natalya Estemirova. The murder of Russian journalist Anna Politkovskaya remains one of the most worrying cases of recent years. More than five years after her tragic death, the case still remains to be concluded. In October, Russian prosecutors announced new charges against suspects allegedly involved in organising her murder. The Prime Minister raised this case with President Medvedev during his recent visit to Moscow, calling on the Russian authorities to take further steps to bring all perpetrators to justice. There is a low success rate in investigating and prosecuting these crimes, thus perpetuating the perception of impunity, which undermines freedom of expression and human rights in Russia.

[Mr Raab]

I thank the Minister for giving way again. He is eloquently making the case for the kind of legislation that the US wants to enact. He mentioned the Bill that has gone through Congress. It looks likely to become law and is unlikely to be vetoed by the President. Given the evidence that he has adduced here before us today, would he be open to that kind of Bill being introduced in the House of Commons?

[Mr Bellingham]

If that Bill gets through Congress, we will certainly look at it very carefully. We will look at whether there are any appropriate lessons for this country, and we will consult parliamentary colleagues from all parts of the House. I cannot give any guarantees, but we need to watch very carefully to see whether the Bill becomes law in the US.

In conclusion, I hope that what I have covered today illustrates the Government’s concern and action, both on the wider issue of human rights in Russia and on the specific case of ensuring justice for Sergei Magnitsky. As my right hon. Friend the Foreign Secretary said:

“Human rights are part of our national DNA and will be woven deeply into the decision-making processes of our foreign policy at every stage”.

That applies to our dealings with Russia as much as with any country. We will continue to engage Russia on human rights through bilateral contacts, including our annual human rights dialogue, which will take place in London this year—in the summer, we hope—as well as through multilateral channels, such as the EU, the UN and the Council of Europe.

I thank the right hon. Member for Rotherham for bringing Parliament’s attention to this issue and giving me the chance to explain the Government’s position. We will continue to push for the respect of human rights and the rule of law in Russia and achieving justice for Sergei Magnitsky.

16:29

Sitting suspended for a Division in the House.

Technology (Primary Schools)

Wednesday 11th January 2012 Westminster Hall

16:40

[John Pugh (Southport) (LD)]

I begin by apologising to the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb) and his Parliamentary Private Secretary, the hon. Member for Grantham and Stamford (Nick Boles), because they have had to listen twice in a week to my meanderings on the curriculum. I also apologise the people who have advised me on this debate and might be reading it in Hansard, because I have to confess that on this subject I am relatively untutored. However, I do speak with passion and enthusiasm, which might to some extent compensate for my lack of precise knowledge.

It is sometimes helpful to put things in an autobiographical context. I am the victim, as many people are, of the traditional British approach to design and technology. Like you, Dr McCrea, in primary school I did craft, the rationale for which was always slightly fuzzy, the practice somewhat varied, and the results certainly diverse. In my case, the only achievement of note that I can remember was a papier-mâché giraffe that my mother loyally put on the mantelpiece for a few years until, presumably, it toppled off. Then one went on to grammar school, and although some traditional craft skills were always put in one’s way in the early years, if one was considered to be relatively clever one went off and did Latin and Greek. Pupils continued with practical subjects only if, in some sense, they were not making the grade.

I was brought up in Kent, where there were three categories of school: grammar school for those people who passed the 11-plus; secondary modern schools for those who failed it; and technical schools for those who were somewhere in the middle. The theory was, essentially, that pupils did the hands-on, practical stuff if they were not academic, even if they were highly numerate. It was rather like the Confucian model of education that they had in China in centuries gone by, which had a disdain of things that had a technical aspect to them. Consequently, we ended up with the problem we are all familiar with, and about which I will not go into any depth, which is that we have a dearth of engineers in the country, a decline in manufacturing, and even a loss of some basic craftsmanship at many levels. That is not entirely due to the school system; it has something to do with how the workplace has reacted to apprenticeships and financial pressures. However, the school system certainly plays a part, and it differs markedly from the German one, in which there has been a better element of technical education for some time.

We have woken up to this mistake, but to some extent we still see technology as an escape route from serious academic study for the less able—something that is bolted on to or plugged into the curriculum as we get towards the school-leaving years. There are very adverse consequences of that line of thought. Fundamentally, we fail to recognise that human intelligence is very diverse, and that people have enormous undiscovered potential. Even people who have been academically very successful—those who, in the schools’ terms, are successes—have latent abilities that they have not had the chance to explore. We deprive children, including the academically able, of the challenge that technology presents, and to some extent we allow the academically able to consider it not a failure to be bad at technical matters. There are people, certainly of my acquaintance, who would be appalled at some minor slip of grammar, but who openly own up to not being able to put on a plug or do anything of practical utility at all.

More contentiously—this is the more difficult bit of what I want to say—we alienate some children, particularly some boys, from the education process, or if we do not alienate them we do not adequately engage them. I was reading recently the biography of Steve Jobs, who was a disruptive and singularly uninspired pupil in the early years of his education.

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

I congratulate the hon. Gentleman on raising this important matter. I want to make a point about aspiration, and about inspiring boys and girls. It comes down to the fact that the curriculum provides the opportunity under aspects of science for the creative teaching of design and technology. For example, Byron primary school in my constituency was the winner of the 2007 design and technology competition for schools. It built go-karts, with the help of BAE Systems, and raced them competitively—so there was competitiveness in there, and working with outside technology departments as well. It all came down to having excellent teachers and to using the curriculum to provide creativity. That is a clear example of how the curriculum can provide opportunities, if they are taken to a greater extent, to inspire people in technology. Byron school has excellent teachers, including the head, Jim Fernie.

[John Pugh]

I thank the hon. Gentleman very much for that intervention, because there is a need to pay tribute to the awful lot of very good practice in this area. I have been inundated with exemplars of schools that have done astounding things under the banner of design and technology.

The point I wanted to make with my reference to Steve Jobs was that technology can be a catalyst in a child’s education, in the early years. In pre-school education, that should be a fairly familiar concept to us, because we recognise that as well as introducing little children to books to encourage their development, there is also a need to introduce them to constructive toys and toys out of which they can make constructs. Technology, almost from the word go, plays an appreciable part in a child’s general cerebral and educational development.

A point that eluded me before I started looking further into the subject—a point that is not particularly well understood—is that technology is a catalyst. It not only gets people into technology, but gets them comfortable with areas of education with which they had previously not been comfortable—mathematics and literacy, for example—because the design elements of the design and technology curriculum have a real drive on presentational as well as constructive skills. Many additional gains, aside from pure technological ability, are driven by good design and technology education. There are many excellent examples of that, including those mentioned by the hon. Member for Gillingham and Rainham (Rehman Chishti).

It is not my supposition that every child will be technically gifted in the same technologies. There is a huge diversity of potential and of things to be good at, which is why we want the curriculum to be as varied and imaginative as possible. I do not think that that is disputed; there is wholesale agreement right across the board that that is a worthy ambition—one that I think the Minister would be perfectly happy to own and espouse.

The difficult thing is the technical question. Although we can all agree that fulfilling every child’s potential and stimulating their talents is a laudable ambition, there is an interesting debate about how to do that, and what the Government and the forthcoming curriculum review can do to encourage it. There is excellence in technical education, but it is fair to say that although there is a constant stream of improvement in both primary and secondary schools, there is also some patchy performance. Errors can be made. If we look at information and communications technology teaching, which the Secretary of State touched on today, we see that quite a few significant errors have been made in how ICT is used in the classroom. I will return to that in a minute or two.

We must also acknowledge that, however good design and technology might be, there are other equally good things, such as numeracy, literacy, imagination, music and all sorts of other things, that the Government wish to encourage and schools wish to incorporate in their curriculum. A further dimension to the problem is that even if we have the most laudable ambitions, we still need a work force who are trained to implement them effectively. Of course, the poor old primary school teacher is meant to be a jack of all trades and to be equally good at an astounding number of things, which is a tough call.

In passing, looking at the wider implications, some of the greatest successes in technical development often take place outside the school curriculum, rather than in the classroom. Reading about the development of the IT industry in California, we find that boys leaving school and going off to things such as the Homebrew Computer Club—Bill Gates and Steve Jobs were among them—made significant developments that ultimately had spin-offs for the whole culture of California. That was not necessarily in the curriculum, and it could not necessarily have been easily incorporated.

The design and technology sector has genuine fears of the educational world. The principal fear is that, in slimming down the curriculum, technology may suffer. In other words, if we reduce the demands of the national curriculum in total, which most people would support, technology may drop out or be put on the back burner. Some people argue that the absence of a standard assessment test or rigorous measurement will not do much to improve the overall quality of the subject. There are complementary and opposed fears that heavy-handed state intervention or diktat will have perverse effects, particularly if, as we all believe, design and technology is a blend of both technical skills and genuine creativity.

There are certain dilemmas involved in ensuring that present good practice is further built on and developed. Ofsted has recorded significant progress in recent years, but I worry that that might be lost in curriculum revisions simply because it is not fully assessed or seen to be assessed.

I turn to two other connected issues. One is the speech by the Secretary of State today on the state of the ICT curriculum. I entirely echo his sentiments. In a Guardian article I wrote after tabling an early-day motion, I said:

“we will end up with second-rate education for pupils, who will have no understanding about how IT is developed or is likely to progress. The future of IT in business in the UK is not going to be just about using PowerPoint presentations.”

Pupils must

“become innovators of software, rather than people who just punch data into keyboards.”

That article was published in 2007, so I like to think that I am five years ahead of my time.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

The picture that my hon. Friend paints is an accurate and grim one. There are 100,000 IT vacancies in this country at the moment, and the people are not there to fill those posts, because the number of people taking computer science courses at university has halved since the year 2000, and the number of drop-outs has risen. That is because the basic science in schools is not being taught, which is why I think the Secretary of State’s speech today is timely, if not long overdue, as my hon. Friend would say.

[John Pugh]

I certainly subscribe to the general view that a crash-course in Boolean algebra is probably more useful to the future of IT in this country than learning how to use Word or any other Microsoft product, but the insistence that ICT and technology education are about using applications shows how sometimes, when the state or organisations associated with it weigh in, they can get things wrong.

A lot of what we have is in part, although not entirely, a consequence of distinctly poor procurement, encouraged by the defunct Becta—Bringing Educational Creativity to All—which the Secretary of State had the wisdom to abolish. There are lessons to be learned. I genuinely think that when we intervene to advise schools, we must accept that schools, from their own practice, might wish, for good reasons, to be diverse and different, rather than aligning themselves with some common curriculum idea that could perish as rapidly as it emerged.

The second issue is a little contentious as well. Part of what I wanted to say today and might not have expressed adequately involves gender. I suggest, tentatively, that boys in general might benefit a little more than girls from good technical education. That might play some part in addressing the problem of children leaving schools without any qualifications, a disproportionate number of whom are boys.

In saying that, I accept that girls are and can be excellent technologists, and that technology is much more varied than the sorts of thing that boys first fixate on. I accept that gender is a spectrum and that boys and girls are all different. I also accept that the Department for Education has invested in efforts to prove that I am speaking nonsense, and that what I say can be both challenged and refuted. I have studied the Department for Education’s website, which has some excellent documents, largely written by female members of staff, suggesting that much of what I will go on to say is mythology, and that in fact boys and girls approach the curriculum in broadly similar ways. The similarities are far more important and prevalent than the differences, but I am not convinced by the argument that there are no differences. Although some views can be challenged, they are not necessarily refuted.

It is a basic biological fact that male and female brains are structurally different—males and females are, obviously, hormonally different as well—and that, irrespective of social conditioning, the two behave quite differently. That can be evidenced not only by anecdote, but by the performance of girls at any linguistic task; their abilities are far in excess of the abilities of boys, both in the UK and elsewhere. We have to recognise that and ask ourselves whether technology, if properly construed, might do something to balance out the attainment levels of the sexes in that respect. I make that proposal in the knowledge that, to some extent, it is controversial, but I think that it would benefit from some examination.

The essential problem remains that if we want design and technology to be embodied adequately in the curriculum, as we do, and if we genuinely want to spread good practice as best we can, how will we do it within a narrowing curriculum, and in an environment where teachers face a variety of demands? Moreover, how will we do it at a stage at which it is immediately relevant to children? My supposition is that some children who attend primary school, and who are not naturally bookish or who do not come from bookish homes, may find it difficult at times to engage with what they are offered and therefore detach themselves from the curriculum. That will eventually lead to poor attainment and to them being transferred to secondary school as underperformers. Giving them a series of other activities simply because they are not very good at what the school has to offer is less likely to be successful than finding out at an early stage where their talents lie and giving them an opportunity to explore them through design and technology. I believe that that opportunity exists, and we have to capitalise on it.

I will be interested to hear the Minister’s response, particularly on how he sees D and T fitting into the curriculum and its revision, as planned.

17:02

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

I congratulate my hon. Friend the Member for Southport (John Pugh) on securing this important debate and on his interesting opening speech. He need not apologise to my hon. Friend the Member for Grantham and Stamford (Nick Boles) or me for a second contribution on educational matters—these are important issues and it is always a pleasure to hear what he has to say.

My hon. Friend the Member for Southport is right to say—we need to reiterate this—that design and technology is absolutely not just an alternative for those young people who are not academically inclined; it is an important subject in its own right. Indeed, the expert panel that we appointed to look into evidence from around the world for our national curriculum review recommended in the report that we published before Christmas that design and technology should become a basic curriculum subject, with greater freedom for schools to teach what they want, free from the constrictions of a programme of study, to encourage innovation and an individual approach. The national curriculum review will consider that before providing final recommendations to the Secretary of State.

My hon. Friend has strong views about the importance of technology in primary schools and schools in general, and has voiced his concerns about the risk that too rigid a policy on the provision of technology to schools can stifle the very innovation that we all seek. Of course, technology can never supplant good teaching, but the effective use of digital technology can support good teaching and help raise standards in schools. We need to support the effective and innovative use of technology in schools, with good practice being developed and shared between them. That means not only exposing children to technology and encouraging them to feel comfortable with it, but promoting technology as a useful tool in itself and as a means to help develop general teaching in schools.

We do not seek to micro-manage the application of technology. As we stressed in the schools White Paper, it is for individual schools to identify their own needs and to address them as they think best. We need to encourage and enable teachers to take better advantage of the great opportunities presented by the burgeoning range of digital technologies, and to use them to improve their teaching and efficiency.

As my hon. Friend has said, the Secretary of State emphasised the fact that technology is a priority in his speech to the Schools Network conference last month and at the BETT technology show this morning. Like me, he wants to encourage the innovative use of technology both within and beyond the classroom. We need to equip our pupils with the technical skills and the knowledge to meet the needs of the 21st-century workplace.

This country has an exemplary record on the use of technology in schools. There is on average one computer for every seven primary school pupils, and one for every three in secondary schools. Primary schools spend an average of £12,400 each year on information and communications technology, and an additional sum of almost £1,500 on software and content. No one should doubt the importance that we attach to the use of technology to support our teachers.

I recognise that some will fear that the passing of Becta, to which my hon. Friend referred, has left a gap in the provision to schools of specialist advice on technology. We are in a period of transition, but this should be seen as an opportunity for the commercial sector and professional organisations to adapt their services to fill that gap.

My hon. Friend has spoken about the curriculum. We are in the process of reviewing both the national curriculum and the suite of qualifications. I think that we all agree that the current ICT curriculum, to which he has referred, is in need of an overhaul. It is outdated and needs to be reformed. We see the teaching of technology-related knowledge and skills as an important part of a broad and balanced curriculum that schools offer their pupils, but it is also our belief that, in a fast-moving and continuously evolving area such as ICT and technology in general, central Government are not necessarily best placed to define the knowledge that pupils need to acquire. As my hon. Friend has said of the early career of Bill Gates, he did not learn the skills that he used to build the Microsoft empire from technology lessons at school. He had a general, good education and he used it to develop his own work in understanding computers and software.

I have been fortunate over the past few months to meet representatives of those who work in the industry, particularly the ICT industry, who are concerned about the lack of a rigorous foundation in programming and the consequences of that for the wider economy. They are persuasive advocates and their detailed submissions to the national curriculum review have been very welcome.

As my hon. Friend has mentioned, the Secretary of State addressed the BETT technology show and took the opportunity to announce that the Department for Education will shortly open a consultation on the withdrawal of the existing national curriculum programmes of study for ICT from September this year. This is an interim measure that is intended to give schools more flexibility to develop their own programmes of study to meet the needs of their pupils more effectively. This move may have come as a surprise to many people, and we recognise that we are taking a wholly new approach.

[Mr Graham Stuart]

Will the Minister give way?

[Mr Gibb]

I will happily give way to my hon. Friend, the Chairman of the Select Committee on Education.

[Mr Stuart]

I am grateful to the Minister. I, too, have met, in recent months, representatives who have made an impressive case. Can he explain—because I do not know the answer—why, until last year, there was not a single computer science GCSE? All we had were programmes of study and qualifications in, as he has said, operating programmes. The actual educational material was not in the courses. Why was that? How did we get into that position, and how will we make sure that we will not allow such things to happen in future?

[Mr Gibb]

My hon. Friend is right and that situation undermines the status of ICT. We have seen that in the GCSE figures. In 2000-01, something like 95,200 people took the GCSE in ICT, and last year that figure went down to 31,800, so something has gone very wrong with the content of the specification in ICT GCSE and in the programmes of study that were in recent reviews and that have led to this problem. There is a widespread belief that the existing programmes of study for the subject lack ambition, and that they serve to inhibit schools from engaging with innovative and inspiring ICT initiatives. We have heard that from so many sources—from teachers and pupils, from industry and, indeed, from my hon. Friend just now.

Some of the biggest names in the computer-related industries have told us that, in its current form, ICT is turning pupils away. That, in turn, is hampering the development of more relevant ICT-related GCSEs, with a focus on the more rigorous disciplines of computer science programming. That has had disastrous consequences for our digital industries, which face ever-increasing competition from emerging economies all around the world.

Eben Upton, a computer science academic at Cambridge university, was reported in yesterday’s Guardian as saying of applicants for degree courses whom he was interviewing:

“None of them seemed to know enough about what a computer really was or how it worked…Children were learning about applications, which are pretty low-value skills. They weren’t being properly equipped to think about how computers are programmed…Computing wasn’t being seen as the exciting, vibrant subject it should be at school—it had become lack-lustre and even boring.”

Our proposed change to the ICT curriculum will offer a chance for the subject to be rejuvenated, freeing teachers to explore and innovate, and hopefully to inspire a new wave of pupils to pursue computing and ICT. We need highly-skilled programmers if we are going to continue to compete in today’s and tomorrow’s markets, which will be increasingly dependent on, and driven by, the new digital technologies.

That is why the Secretary of State made the announcement that he did this morning. Pending the outcome of the national curriculum review, ICT will remain compulsory at all key stages in schools and it will be taught at each stage of the curriculum. The existing programmes of study will no longer be compulsory, but they will still be readily available for reference purposes on the web, although no school in England will be required to follow them. Subject to the consultation, from September this year, all schools will be able to use whatever resources they choose to teach the subject, and there is a wide range of excellent materials to choose from. I know that industry and specialist organisations, such as the British Computer Society, e-skills UK and Naace are already working on an alternative ICT and computing curriculum.

[John Pugh]

The worry is that we will go from one phase of prescription to another phase of prescription. We will not get back the days when young men came in and programmed BBC Micros on BASIC and such things, and got very excited about it. Technology is changing enormously. Years ago, if someone in the computer industry was asked about the key skill required, they would have said, “Keyboard skills,” yet touch-screens and so on will make those very skills obsolete. The model that the Minister is suggesting, which involves not only advice from above but interaction from below, is probably the right way forward.

[Mr Gibb]

I am grateful for my hon. Friend’s support for the radical notion of removing the programme of studies. As the Secretary of State said this morning:

“Imagine the dramatic change which could be possible in just a few years, once we remove the roadblock of the existing ICT curriculum. Instead of children bored out of their minds being taught how to use Word and Excel by bored teachers, we could have 11 year-olds able to write simple 2D computer animations using an MIT tool called Scratch”—

17:13

Sitting adjourned without Question put (Standing Order No. 10(11)).

Written Ministerial Statements

Wednesday 11th January 2012 Written Statements

Wednesday 11 January 2012

Equitable Life Payment Scheme

Wednesday 11th January 2012 Written Statements

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

The Treasury can confirm that the Equitable Life payment scheme is making high volumes of automated payments—10,000 this week alone.

The Equitable Life payment scheme is due to make in the region of £1.5 billion worth of payments. This represents a significant logistical exercise, which requires complex systems to be established to not only make payments but also respond to the resultant policyholder queries. The Government met their commitment to start making payments by the middle of last year and high volumes of automated payments are now being made.

Many thousands of payments a week are being made and the volume will continue to be ramped up. This means that over the coming months hundreds of thousands more eligible policyholders will receive their payment from the scheme. These payments will be made in accordance with the recommendations of the Independent Commission on Equitable Life payments. The Treasury has also confirmed that the first payments to with-profits annuitants have also commenced, and over 3,000 annuitants have already had their first payment issued.

The scheme is making good progress in paying out the £500 million provided for this financial year by the 2010 spending review, and as part of the Government’s commitment to transparency, the scheme will be publishing a more detailed report on the scheme to date. This report will be made available via the scheme’s website in the coming weeks.

Eligible policyholders that have not received payment yet need not do anything—the scheme has policyholders’ details from Equitable Life and the Prudential and will contact all the eligible policyholders it can by June 2012 at the latest.

Social Housing

Wednesday 11th January 2012 Written Statements

[The Minister for Housing and Local Government (Grant Shapps)]

I announced in the Government’s housing strategy my intention to tackle social housing fraud and I am today launching a consultation that sets out my proposals in this area. These proposals would increase the deterrent to tenants considering cheating the system, enable those who do to be detected more easily and punished more severely, and encourage social landlords to take a more proactive approach to tackling tenancy fraud. This would free up valuable social homes that can then be allocated to those in greatest need.

There is a clear case for reform. Social housing is an enormously valuable national asset, providing essential support for millions: yet while there are over 1.8 million households on social housing waiting lists, estimates of the number of social homes in England being unlawfully occupied range from 50,000 to 160,000. The National Fraud Authority estimates that tenancy fraud costs £900 million per year. Replacing these unlawfully occupied social homes—to house those who have effectively been displaced by those who commit tenancy fraud—would cost several billion pounds.

Most forms of tenancy fraud are civil matters rather than criminal offences. This means that while abusing a social tenancy can be extremely lucrative, the consequences for those caught breaking the rules tend to be relatively minor—in most proven cases the legal tenant is simply required to give back the keys to a property in which they do not live. Existing legislation does not allow for a criminal prosecution for sub-letting or most other types of tenancy fraud.

In addition to the lack of an effective deterrent, tenancy fraud investigators argue that they do not have sufficient investigatory powers, meaning that they can only detect a fraction of the homes being unlawfully occupied. Recent Government investment has seen an increase in the number of social homes being recovered, but it is apparent that stronger measures need to be considered.

My proposals would introduce new legislation so that social tenants who abuse their tenancies could be subject to criminal sanctions with a maximum penalty of a £50,000 fine and two years’ imprisonment. They would also allow for any profits made from tenancy fraud to be confiscated, a restitutionary payment to be made to the landlord, and would give local authorities the power to prosecute for matters related to tenancy fraud.

We are also proposing to remove the discretion a court has when it comes to evicting tenants of housing associations who have been proven to have sub-let the whole of their homes. This would bring housing association tenants into line with council tenants. I will also review the “intention to return” defence often used by tenants, which has meant that a tenant can live away from the property for a substantial period of time, sometimes years, and still maintain their tenancy by arguing in court that they intend to return to the home.

These proposals would be in addition to rather than in place of the existing powers social landlords have, and in my view are sensible and practical measures that would rectify the anomalous situation whereby the incentive to cheat the system is so much greater than both the risk of detection and the eventual penalty incurred.

National Curriculum in England (Information and Communication Technology)

Wednesday 11th January 2012 Written Statements

[The Secretary of State for Education (Michael Gove)]

I am today announcing my intention to launch a public consultation on my proposal that the national curriculum programmes of study and associated attainment targets and assessment arrangements for information and communication technology (ICT) in maintained schools in England should not apply from September 2012.

There is a significant and growing base of evidence, not least from Ofsted inspections, that demonstrates that there are persistent problems with the quality and effectiveness of ICT education in schools. Evidence indicates that recent curriculum and qualifications reforms have not led to significant improvements in the teaching of ICT, and the number of students progressing to further study in ICT-related subjects is in decline. Furthermore, the ICT curriculum in its current form is viewed as dull and demotivating for pupils. Its teaching may not equip pupils adequately for further study and work, may leave them disenchanted or give rise to negative perceptions that turn them off the subject completely. At the same time we know that the demand for high-level technology skills is growing, and many employers in the IT industry are concerned that the way in which ICT is taught in schools is failing to inspire young people about the creative potential of ICT and the range of IT-related careers open to them.

However, we also know that ICT teaching in schools can be done well. There are numerous positive examples of schools that are leading the way in developing new and exciting visions for ICT, and of industry-led initiatives which are invigorating ICT teaching in schools. In order to facilitate more innovative ICT provision in schools, I am proposing to make provision under the 2002 Education Act to disapply the existing ICT programmes of study and attainment targets at all four key stages, and the associated statutory assessment arrangements at key stage 3, from September 2012.

Under this proposal ICT would remain a compulsory subject within the national curriculum, subject to the outcomes of the national curriculum review. However, schools would be freed of the requirement to adhere to the existing programmes of study, attainment targets and statutory assessment arrangements.

By disapplying the ICT programme of study from September this year schools will be able to offer a more creative and challenging curriculum, drawing on support and advice from those best positioned to judge what an ambitious and forward-looking curriculum should contain. I am encouraged by the work of subject organisations and others on how universities and business can develop high quality computer science qualifications. I am keen to explore how Government can continue to facilitate this.

If, having listened to the views expressed in the public consultation and subject to the will of the House, I decide to proceed with the proposed disapplication of the ICT programmes of study, attainment targets and assessment arrangements, it will represent an interim measure that will be effective from September 2012 until September 2014, when the outcomes of the national curriculum review will come into force. The status of ICT within the school curriculum is currently being considered by the national curriculum review alongside that of all other national curriculum subjects (aside from English, mathematics, science and PE), and I will bring forward proposals later this year.

The public consultation on this proposal will commence shortly and run for 12 weeks. A consultation document containing full details of this proposal and how interested parties can respond to the consultation will be published on the Department for Education website. Copies of that document will also be placed in the House Libraries.

Single Payment Scheme

Wednesday 11th January 2012 Written Statements

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

As explained in my statement of 8 November 2011, Official Report, column 12WS, one of the performance indicators I set the Rural Payments Agency (RPA) for the 2011 single payment scheme (SPS) was to pay 78% of the total estimated fund value to a minimum of 86% of eligible claimants by the end of December 2011. I can now confirm to the House that those figures were reached and exceeded.

By the end of 31 December 2011, RPA had made payments totalling some £1.427 billion (82.5%) to 92,066 English farmers (87.8%). These figures represent the highest ever proportion of SPS payments made by the agency in the opening month of the payment window. As such, it is a good example of the progress being made at RPA as it strives to deliver an improved level of service for English farmers in its administration of the scheme.

The focus now is on validating the remaining claims and making the related payments as soon as possible. I expect further progress in that regard over January, with a view to ensuring that the second SPS 2011 performance indicator (to have paid a minimum of 95% of both the eligible claimants and the total estimated value by the end of March 2012) is also met.

House of Lords

Wednesday 11th January 2012 Lords Chamber

Wednesday, 11 January 2012.

15:00

Prayers—read by the Lord Bishop of Gloucester.

Somalia: Piracy

Wednesday 11th January 2012 Lords Chamber

Question

15:06

Asked By

[Lord Naseby]

To ask Her Majesty’s Government what naval contribution the United Kingdom will make towards, and what advice they will give to British-registered vessels on, combating piracy near Somalia after the current monsoon season.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, the Government continue to provide support to the multinational naval operations off the coast of Somalia. For example, we provide the operational commander and headquarters for the European Union’s counterpiracy operation and we will provide a ship to the combined maritime forces throughout 2012 for counterpiracy tasking as part of the forces’ wider operation. The Government urge all shipping transiting the high-risk area to comply with the industry’s best management practice. The Department for Transport has also published interim guidance on the use of armed guards in exceptional circumstances to defend against pirate attacks.

[Lord Naseby]

Is my noble friend aware that despite the welcome news that he has given today the situation remains extremely worrying as the geographical area of the ocean covered by the pirates gets ever wider? Is my noble friend further aware that already 10 per cent of shipping is being rerouted around the Cape at a cost of £3 billion and it is forecast that that may rise to 30 per cent? Against that, should we not confront the pirates in two further ways: one by deploying UAV aircraft to pinpoint exactly where the mother ships are that support the pirates; and, having pinpointed them, surely the naval operations should go on the front foot and sink them rather than just react to situations?

[Lord Howell of Guildford]

My noble friend is quite right that this is a very serious situation spreading of course not only to the Gulf of Aden area, but out into the Indian Ocean and the west of Africa. He perhaps would accept that the statistics show—maybe because of diversion of shipping but for other reasons as well—that successful attacks fell dramatically last year. There were 127 attacks in 2010, 47 of which were successful, and by 2011 there were more attacks—150—but only 25 were successful. The success rate for the pirates in achieving their ugly objectives has been much reduced. Nevertheless, my noble friend is absolutely right that very firm action is required. The matter of UAVs is under consideration but there are difficulties, even for UAVs, in covering such an enormous area. We are talking about somewhere twice the size of Europe. On the question of vigorous action when these pirates are encountered, the Government believe that interim guidance is a strong first step, as initiated by my right honourable friend the Prime Minister, in his discussions on these matters in Australia a few months ago. The details laid down are definitely an advance in dealing with pirates in a most vigorous manner, and rightly so.

[Lord Boyce]

I welcome the Minister’s comment that the Royal Navy will be providing a ship to support the anti-piracy operations off Somalia. The Minister will also be aware that the Navy has been unable to meet its full-time commitments for a duty ship over the past few months. Noting such other contingencies coming up, such as the potential closure of the Hormuz Strait by Iran, will the Government now recognise that they have cut back too far on the size of the destroyer and frigate force?

[Lord Howell of Guildford]

My Lords, the noble and gallant Lord will not be surprised at my answer that these matters are kept under constant review. We need to deploy in the most effective manner the forces that our resources allow us to deploy, and we will continue to examine all needs and priorities in that light.

[Lord Davies of Stamford]

My Lords, I am very glad that I gave way to the noble and gallant Lord because I thoroughly agreed with his intervention. If we are half-serious about dealing with this menace, should not the first and indispensable step be to cut off the flow of funds to the pirates? Every week literally millions of pounds are passed to the pirates from ship owners and particularly from underwriters. The largest share of this probably comes from underwriters in the City of London. The means used to pass the funds may be unconventional but the payments are perfectly legal. If we were to criminalise the payments and use the existing apparatus of criminal assets seizure legislation and money-laundering legislation to interdict them, would that not be a very substantial step in the direction of dealing with the problem?

[Lord Howell of Guildford]

I say to the noble Lord that actually the first step is to deal with the conditions on land that give rise to the piracy operation by sea; that is where we start. However, he is quite right that the flow of cash and finance is a very important part of this. We are working with Interpol and with the UN Office on Drugs and Crime to see whether we can be more effective in tracing the patterns of finance. It is not easy but it is certainly an area where we should concentrate.

[The Lord Bishop of Gloucester]

My Lords, is the Minister aware of the work of the Mission to Seafarers, the world's largest provider of port-based humanitarian and welfare services for seafarers and their families, which has provided assistance to victims of piracy, especially in the region around Somalia? Will he consider engaging with the Mission to Seafarers to develop a model of support for families of hostage victims?

[Lord Howell of Guildford]

Yes, I say to the right reverend Prelate that that seems an excellent initiative and idea, and something that we will certainly consider most carefully.

[Lord Chidgey]

Will my noble friend reflect on the fact that in the past two years since 2009 there has been a sevenfold increase in the number of piracy incidents that have taken place off east Africa, according to the IMO; that there are some 2,300 crewmen being kept hostage at the moment, according to NAVFOR; and that the ransoms paid out in the past two years went up from $80 million to $135 million? In that regard, what will be the contribution of our Government to the conference on Somalia in London at the end of the month, and, more importantly, to the maritime security conference that will take place in Dubai next week?

[Lord Howell of Guildford]

My noble friend is absolutely right; these are two very important conferences. He was correct to mention the latter one, but I particularly emphasise his point about the conference on Somalia that has been organised for London on 23 February. It is a major initiative that will bring together all parties concerned not just with piracy but with the issues of what to do with the failed state condition we face in Mogadishu at the moment. The conference will be well attended and I believe that it will be extremely effective in focusing on the problems of the area, of which the piracy element is a very important part.

[Lord Tomlinson]

Will the Minister tell us something about what would be the greatest deterrent to piracy: namely, bringing pirates to justice? Deterring pirates is one thing but bringing them to justice is by far the most effective deterrent. Will he tell us whether the success rate in that matches the successes reflected in the earlier statistics he mentioned?

[Lord Howell of Guildford]

A considerable amount is being done but I concede that it is not enough. The aims have been to develop prison transfer facilities in the Seychelles, where progress is being made; and also in Kenya, which has taken the brunt of the problems of dealing with captured pirates and bringing them to justice. We are working with the Seychelles to upgrade all operations, with both financial and technical support. We are working with the Kenyans and with Somaliland, which are willing to develop both custody facilities and judicial facilities. All these things are going on and are a very important part of the overall aim of defeating the piracy infection.

Social Networking Sites

Wednesday 11th January 2012 Lords Chamber

Question

15:15

Asked By

[Lord Storey]

To ask Her Majesty’s Government what additional measures they are planning to take to prevent bullying on social networking sites.

[Baroness Garden of Frognal]

My Lords, the Government are committed to tackling bullying on social networking sites by working with industry, academia, charities and parenting groups to develop tools and information for children and parents aimed at keeping children safe online. The Government are pressing the internet industry in the UK and in Europe to implement clear and simple processes for dealing with abuse online. The Government have also recently reviewed their cyberbullying policy.

[Lord Storey]

The Minister will be aware of the hugely increasing problem of cyberbullying by and of children and young people, particularly in schools. She will also be aware of how easy it is for children under age to set up and operate an account without parental permission. Will she meet the industry, teaching organisations and children’s welfare organisations to discuss the problem and how further safeguarding of our young children can be put in place?

[Baroness Garden of Frognal]

My noble friend speaks with great experience from his distinguished teaching career. The Government are aware of how proficient young children can be at setting up accounts and using the internet generally. We are backing the launch by the UK Council for Child Internet Safety of a one-stop approach to advise on online safety which will occur on 7 February. On my noble friend’s last question, I should be very happy to go ahead with the meeting as he suggests.

[Lord St John of Bletso]

Does the Minister agree that schools have an extremely important role to play in ensuring that young people and children are aware of the risks of social networking, in building resilience, and in ensuring that young people are aware of the harmful impacts that their online behaviour can have on others?

[Baroness Garden of Frognal]

Yes, indeed; I entirely agree with what the noble Lord said. In July the Government published guidance to schools on behaviour and bullying that summarises legal obligations and encourages schools to identify the motivations behind bullying and encourage people to seek further help and advice as necessary. This is an issue that the Government take very seriously.

[Baroness Walmsley]

Is the Minister aware of the importance of stopping children wanting to bully in the first place? That is the best way of dealing with bullying. In the light of that, is she aware of the programme called Roots of Empathy, which has now been rolled out into two-thirds of the local authorities in Scotland? It is already very well evidenced. Will she undertake to look at the evidence of this programme in Scotland which is already reducing the incidence of bullying in schools, and see how the Government could encourage its rollout across the rest of the UK?

[Baroness Garden of Frognal]

Yes, I do indeed undertake to my noble friend to look at that programme. She and others in this House have been very involved with encouraging programmes such as PSHE which teach children self-respect and respect for others and identify the motives behind bullying. Obviously, legislation can only go so far. We need a change in the culture so that bullying is an unacceptable activity.

[Baroness Jones of Whitchurch]

My Lords, the Minister will know that one of the problems we face is that parents are way behind their children in keeping up with technology and are often oblivious to what is happening under their own roof. Does she agree that one small way in which the social networking sites could help, and should help, both parents and schools would be to ban children using fake names or multiple names to disguise their identity?

[Baroness Garden of Frognal]

The noble Baroness makes an interesting point. Some of these things are always much more difficult to implement than they are to suggest. Although the internet service providers are being extraordinarily helpful and supportive of the Government on ways of tackling this, and that will certainly be one aspect they consider, whether it is feasible to stop the worst cases of bullying is another question.

[Baroness Benjamin]

My Lords, will the Government consider having a campaign to make parents and schools aware of how social networking sites can also be used to groom children for sexual exploitation?

[Baroness Garden of Frognal]

My noble friend raises another interesting point. The initiatives which the Government are taking at the moment encompass parents as well as children to try to make sure that families are aware of the dangers of the internet. Of course there is no way that anyone wants to stop the spread of information and the freedom of information, but we need to get the right balance between that and things which are offensive and illegal online.

EU: December Council Meeting

Wednesday 11th January 2012 Lords Chamber

Question

15:20

Asked By

[Lord Soley]

To ask Her Majesty’s Government what, if any, changes they envisage in the United Kingdom’s relationship with the rest of the European Union following the summit meeting of 8–9 December 2011.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, Britain remains a full member of the European Union and will continue to work hard with our many allies in Europe to advance our national interests as well as those of all other EU member states. Nothing arising from the December Council meeting alters that.

[Lord Soley]

I am grateful for that reply but, intentionally or unintentionally, at the December meeting the Prime Minister gave the very strong impression that Britain could never accept the concept of the ever closer union spelt out in a variety of treaties signed by the United Kingdom over many years. Will the Government give a clear answer, not least for that section of the Government led by the Prime Minister, as to whether we are on board for ever closer union, or do we reject that concept?

[Lord Howell of Guildford]

I think that most people looking at the 21st century have found the concept of ever closer union implying more and more centralisation as, frankly, yesterday’s stuff. This is not the way in which the European Union will strengthen its cohesion and flexibility in the face of the new international landscape. While certainly the events of the December Council struck a particular view in regard to the safeguarding of Britain’s interests in the light of the plans which are now going forward and in which we are participating for the new fiscal union and possible fiscal union treaty if one emerges, I do not think that there is anything very revolutionary or new about recognising in the debate on the reform and development of the European Union that ever closer union as a simple integrationist concept is out of date.

[Lord Peston]

My Lords, I ask this question for future reference. Surely it is the case—perhaps the Minister could confirm it—that the central aim of Her Majesty’s Government in Europe is to make sure that we have no friends there whatsoever.

[Lord Howell of Guildford]

I am afraid that that is upside-down thinking, because the enlightened view in Europe is that we should move towards the reform of the European Union in all aspects. Everyone agrees that maybe the time has come to revise its great purposes in the 20th century. I was fascinated by a remark made the other day by the noble Lord, Lord Liddle, who I hope will speak in a moment on this issue. He rightly said that the old arguments for Europe will no longer do. We are in a new situation in which many intelligent people throughout the European Union realise that new approaches are needed. I am sorry that the noble Lord is not one of them.

[Baroness Falkner of Margravine]

My Lords, does my noble friend agree that the concept of ever closer union in the treaties was about an ever closer union of the peoples of Europe? Nothing that this coalition Government are doing would prevent a closer relationship between the peoples of Europe, but that does not imply the Governments of Europe for ever being bound in ever closer unions. On the financial transaction tax that France has agreed to pursue unilaterally, our understanding is that the German Government are reluctant to proceed unilaterally. Are we having conversations with the Germans on the effects of the tax should it be implemented more widely?

[Lord Howell of Guildford]

My noble friend is absolutely right about the first point. The peoples of Europe, the communities of Europe and the interests of Europe are binding more and more closely together in the internet age and in the age of the information revolution, but the question of how this resolves at governmental level is obviously much more complex. She is absolutely right about that. As far as the financial transactions tax is concerned—the so-called Tobin tax—Her Majesty’s Government’s view is that if this was a universal tax, the chances of which are frankly pretty remote, it would begin to make sense to apply it, but that if it was merely going to be for the European Union or even for selected countries in the European Union, it would not make much sense at all. That seems to be a view that increasingly the Germans are sharing.

[Baroness Symons of Vernham Dean]

My Lords, if what the noble Lord says is true, that everyone throughout the European Union agrees that there are better arguments for the future, why were we left isolated on 8 and 9 December? Why did nobody agree with us then?

[Lord Howell of Guildford]

The precise issue was that the safeguards against additional incursions into financial interests, of which this country holds a very large proportion in Europe, were not going to be agreed. This led my right honourable friend the Prime Minister reluctantly to say that he could not agree to the kind of treaty being proposed. The other 26 countries are looking at it—as are we, in participating in the current operations and examination—and are finding out whether it works for them. I am not sure that in the end either the 26 or even possibly all 17 countries will be really prepared to go along with every detail of the treaty so far. However, a new draft has been produced that already begins to adjust somewhat to the concerns that my right honourable friend voiced and that other countries have expressed as well.

[Lord Pearson of Rannoch]

My Lords, was the European Union not supposed to bring peace and—

[Lord Campbell of Alloway]

Is the noble Lord aware that this question of ever closer union could not be agreed at the Messina conference and could not be interpreted in the Rome treaty? As a result, a compromise amendment was made that the Court of Justice could deal with the matter, which is where we are today. We are now in the twist of a federal demand that we should remove, with other people, our residual sovereignty for imposed financial restriction, to which I personally object.

[Lord Howell of Guildford]

Of course, the European Court of Justice is applicable and is an instrument of the European Union treaties. Ad hoc arrangements and other co-operation arrangements that are not within the treaties would not be covered by the European Court of Justice. I was interested to see in the draft of the fiscal union treaty that is now circulating that the proposition that the ECJ should have precedence over national laws has been removed. I appreciate that my noble friend’s long-term considerations go much deeper, but it may be that here and now some of the concerns that he has expressed are being recognised.

[Lord Liddle]

Will the Minister bear with us as we continue with an old argument? Will he confirm that it is the clear policy of the Foreign Secretary and the coalition that there will be no attempt to repatriate powers from the European Union during this Parliament? Will he confirm that that is the Government’s policy and, if it is, how does he justify the Foreign Secretary permitting civil servants in his department to work with the new All-Party Group for European Reform to explore what powers might be repatriated? How is this Conservative initiative consistent with the policy of the coalition?

[Lord Howell of Guildford]

I do not want to play with words but I understood that in all parties, including the noble Lord’s party, and in the think tank with which he is closely associated, clear and forward-looking minds were looking at ways of rebalancing powers between Brussels and the member states as a whole—not just between Brussels and this country but between the European Commission, the European Council, the European institutions and the nation states. Again, there seems to be a very enlightened argument—of which I thought he was part, although he seems not to be so at the moment—that certain powers, particularly social powers and other detailed regulatory powers, would be far better administered close to the recipients, those in need of social care and those on the workshop floor, than by central organisations in Brussels. This is a sensible way forward and I am very glad that our officials are studying it closely.

Democratic Republic of Congo

Wednesday 11th January 2012 Lords Chamber

Question

15:30

Asked By

[Lord McConnell of Glenscorrodale]

To ask Her Majesty’s Government what action they are taking in response to reports of violence in the east of the Democratic Republic of Congo following recent elections.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, I thank noble Lords for the break.

We are working to tackle the threat of armed groups in a number of ways. We have pressed to ensure that the protection of civilians remains the priority for the United Nations organisation stabilisation mission—MONUSCO. We are supporting the disarmament, demobilisation and repatriation programme to remove fighters from the battlefield peacefully. We have also supported UN sanctions against members of armed groups who breach humanitarian law.

[Lord McConnell of Glenscorrodale]

My Lords, I thank the Minister for reflecting the Government’s commitment to those actions. I had the immense privilege of being in the DRC for the recent elections as an international observer, and I praise the ordinary Congolese people for their determination to vote in secret and safely as often as they could, despite provocation at times. I also praise the ordinary Congolese people who conducted the vote at the local level, but the parties continue to dispute the result of the elections. Does the Minister agree that there is a need for maximum transparency in the election results so that any dispute is based on fact rather than accusation? There is also a need for reconciliation between the parties, perhaps led by the international community, to ensure that the country can move forward and develop rather than continue in conflict.

[Lord Howell of Guildford]

First, I salute and congratulate the noble Lord on the role he played in participating in EurAc, the network of European NGOs’ elections observation mission to the DRC elections in November. His questions are extremely apposite and are obviously backed by a deep hinterland of information.

The noble Lord asked what we can do to meet the particular problem that was reflected in the recently reported horrific FDLR killings in the east of the Democratic Republic of Congo the other day. Our strategy has three elements. First, we are funding the demobilisation, repatriation and resettlement programme, which helps to remove fighters from the battlefield. Secondly, we are very substantially supporting the UN force, MONUSCO, to the tune of £69 million, which represents over 8 per cent of its entire budget and is coming from us here in the UK. Thirdly, we are supporting sanction regimes that are aimed on a continuing basis at identifying leaders of armed groups and seeing how they can be removed from the battlefields. Those are the three broad aims that we are activating over and above the fact that the Department for International Development has a budget over the next four years of £790 million for development in DRC. This is a hugely effective programme.

[Lord Alton of Liverpool]

My Lords, does the Minister believe that the sheer scale of irregularities in the recent DRC elections and the violence and intimidation that has arisen could have happened without the complicity of the authorities there? In the east of the Congo—the Kivu and Goma regions to which the noble Lord’s Question refers—rape has been used as a weapon of war, and in a country where more than 6 million have died in what many call Africa’s first world war over the past 25 years, what can the Government do to assist MONUSCO, particularly in the protection of vulnerable women and the bringing to justice of those responsible?

[Lord Howell of Guildford]

The killings in the east of the Congo that we were debating a moment ago are one thing, and it is not for me to declare that they were to do with the undoubted violence that occurred during the actual elections. I fully concede that, as the noble Lord has rightly pointed out, there were reports of irregularities during the elections, and we are not going to just ignore them and pretend that nothing went wrong; it did. The Minister for Africa, my honourable friend Henry Bellingham, has called on the DRC authorities to investigate all irregularities promptly and fairly, and we have pressed the Congolese electoral commission—CENI—to make key improvements in the compilation process for the legislative count. We will also urge CENI to carry out with international help an in-depth review of irregularities raised by the observer missions, and will press it to implement any recommendations. We are not letting the matter rest. We recognise that there were some serious irregularities and that these need to be pursued and reviewed with great vigour.

[Lord Chidgey]

What will be the Government’s response to the UN group of experts’ report on the DRC, which highlighted the failure of the Mines Ministry to take control of mining out of the ICC-indicted military’s hands? This has resulted in increasing criminalisation and increasing funding streams to military groups, which are all part of the problems of violence in the Congo. What steps will the Government take to raise awareness among UK-based firms of the risks they run in the mining industries and of the international diligence standards for mineral trade? What has been done to put forward the UN conditions, which were introduced more than a year ago, on the trade in conflict minerals?

[Lord Howell of Guildford]

These are very detailed questions on which I would like to write to my noble friend in more detail. Generally, we recognise these problems and general approaches to them have been taken, particularly in our close work with MONUSCO and the UN, but I shall write to him in more detail on his precise analysis.

[Baroness Kinnock of Holyhead]

My Lords, does the Minister recognise that the systematic violence against women by police, military and non-state armed groups in the DRC that the engagement of women in security sector reforms is absolutely essential? Through UK funding to the DRC, will the Government ensure that women’s groups are provided with the knowledge, the skills and the resources they need to hold the security services to account?

[Lord Howell of Guildford]

Yes, we will. I think I can speak on behalf of my honourable and right honourable friends in DfID in saying that this is a central consideration in the substantial programme of aid, assistance and reform that the department is carrying forward, as well as in all our concerns in dealings with MONUSCO and the United Nations.

Inheritance (Cohabitants) Bill [HL]

Wednesday 11th January 2012 Lords Chamber

First Reading

15:37

A Bill to make provision for the property of deceased persons who are survived by a cohabitant.

The Bill was introduced by Lord Lester of Herne Hill, read a first time and ordered to be printed.

European Union (Definition of Treaties) (Republic of Korea Free Trade Agreement) Order 2011

Wednesday 11th January 2012 Lords Chamber

Motion to Refer to Grand Committee

15:38

Moved By

[Lord Strathclyde]

That the draft order be referred to a Grand Committee.

[Lord Barnett]

My Lords, before dealing with the Motion, will the Leader accept that there is something much more important affecting every Member of this House today—not in three months’ time, but today—which is our ability to get in here and get out again? The current restrictions on cars coming in and out are becoming nonsensical. I am told that it will take three months to review the situation; it should be reviewed today. We are supposed to be in charge of our own place; we can surely decide; we can tell Black Rod; we can do what the devil we like. I declare a personal interest: I had an operation a week ago and have been advised that I should do as little walking as possible in the near future. I find it very difficult walking across the road to get a taxi, and other Members are finding it even more difficult. Surely he can do something about that now.

[Noble Lords]

Hear, hear!

[Baroness Trumpington]

My Lords, may I support the noble Lord, Lord Barnett? I have just put down a Question to that very effect, but unfortunately it must wait a month before it can be heard in this House. I strongly support the point that the current arrangements are a total failure and should revert. Any suicide bomber who wishes to attack this place certainly could do so without somebody looking at the bottom of their car. Please will the Leader do something about it today?

[Lord Campbell-Savours]

My Lords, before we go down this route, could we just remember that we have a duty to secure the security of this institution? Difficult decisions have had to be taken and we should be very careful about rescinding them.

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, I am well aware, as are most Members of the House, that this week there have been some difficulties in entering the car park. I know that Black Rod has received many representations—I expect that, even after today, he will continue to receive many further representations—and I urge noble Lords who believe that they can suggest improvements commensurate with providing the security of the House, as the noble Lord, Lord Campbell-Savours, has pointed out, to do so as early as possible.

I will have discussions with the Chairman of Committees and members of the relevant committees that made these decisions to see whether the review can be speeded up. I understand the difficulties that have taken place.

[Lord Peston]

I think I am right in saying that we are still a self-governing House and therefore that what my noble friend has asked the Leader of the House to do is a perfectly reasonable request. However, the Leader of the House has shown no sign that he intends to respond to that request. I sit on the Joint Committee on Security. This matter is not being driven by the security of this House but by the other place. There is no pressure for this from this House whatever. The Leader of the House has been asked to find some space so that colleagues can at least express their opinions. This is all he is being asked to do. The people involved in this think this is a done deal and have no intention of backing off no matter what the experiment shows. It is therefore vital that the Leader of the House should tell us that he will find space early next week so that we can all express our opinions.

[Lord Laming]

My Lords, as a member of two committees that were involved in making this decision for this experimental time, I was not aware of any pressure coming from any outside source. The decision was taken sincerely and clearly within this House by the membership of this House. Should it be thought sensible, I am very happy to review the matter, but let us learn from the experience and see whether we can approach this in a spirit that is intended to make it as constructive and as safe as possible.

[Lord Campbell-Savours]

Perhaps I may slot into the minds of Members what could be a long-term solution. It is for us to reclaim our underground car park across the road, which we own, and build a tunnel which links the House to that car park.

[Lord Pearson of Rannoch]

My Lords, I am sure this has already occurred to any would-be terrorist, but what do the security arrangements of the House do about the river and the boats that go up and down it? My friend hired one of those boats the other day and was free to take suitcases on and off as she wished. If we cannot do anything about that, why do we carry on making entrance to this place more complicated and inconvenient?

[Lord Strathclyde]

I am not sure that the Floor of the House is the best place to discuss matters affecting the safety and security of the House.

In answer to the noble Lord, Lord Peston, nothing I said in my earlier reply was supposed to be discourteous to the noble Lord, Lord Barnett. This House is self-regulating. The decision was taken by various committees of the House that would not have been able to do so without its agreement. Perhaps the review could be done more quickly than in three months. Those noble Lords who have suggestions and ideas as to how we could improve the situation should write to Black Rod—or, indeed, raise it in their party meetings, which might be a better place than having a debate in this House.

Motion agreed.

Local Better Regulation Office (Dissolution and Transfer of Functions, Etc.) Order 2012

Wednesday 11th January 2012 Lords Chamber

Motion to Refer to Grand Committee

15:44

Moved By

[Lord Strathclyde]

That the draft order be referred to a Grand Committee.

Motion agreed.

Welfare Reform Bill

Wednesday 11th January 2012 Lords Chamber

Report (3rd Day)

Relevant document: 21st Report from the Joint Committee on Human Rights.

15:44

Schedule 3: Abolition of benefits: consequential amendments

Amendment 33

Moved by

[Lord Freud]

33: Schedule 3, page 126, line 3, leave out “and (2)” and insert “(2), (2A), (3) and (4)”

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, I speak in support of the amendments tabled by the Government in relation to Clauses 51 and 52—namely Amendments 33, 34, 37, 39, 40, 41, 43, and Amendments 63 to 67.

The important issue of the impact of time limiting on those with deteriorating conditions was raised in Grand Committee. I outlined in debate the existing safeguards which would protect people in these circumstances. However, when we looked again at the safeguarding provisions, it was clear that a person would be able to requalify only in very limited circumstances. In light of that helpful debate, we have decided that further clarification should be provided on the face of the Bill and are therefore moving these amendments.

The government amendments will enable people whose contributory ESA, while in the WRAG, has ceased as a result of time limiting, to requalify for an award of ESA if, after their award ends, they continue to have, or are treated as having, limited capability for work, and—I stress this point—at any time thereafter they develop and continue to have limited capability for work-related activity and would become eligible for the support group. The substance of this new category of entitlement is found in Amendment 43, which provides for claimants to have further entitlement after time limiting has been applied to an award of contributory ESA. I note with pleasure that the noble Lord, Lord McKenzie, and the noble Baronesses, Lady Morgan and Lady Meacher, have added their names in support of Amendment 43.

Without wishing to anticipate or foreshadow the debate on Amendment 42, tabled by the noble Lords, Lord Patel and Lord McKenzie, I trust that the noble Lord, Lord McKenzie, having lent his support to Amendment 43, may feel able not to proceed with Amendment 42. I shall endeavour to explain why shortly.

I turn to the remainder of the government amendments in this group. In previous versions of the Bill, the time-limiting provisions for ESA youth appeared in Clause 52. As a result of the amendments, we have moved to provide for new entitlement to contributory ESA through deterioration, and it has been necessary to amend how the time limiting of ESA youth awards will work to provide for the new deterioration category. This is because we wish the category of further entitlement to ESA after deterioration to cover both claimants who deteriorate after their time-limited contributory ESA awards end and claimants who deteriorate after their time-limited ESA youth awards end. We have therefore moved amendments to provide for Clause 51 to deal with the time limiting of ESA youth awards where a claimant is in the work-related activity group. To be clear, the clauses as revised by the government amendments still have the effect that claimants awarded ESA on grounds of limited capability for work developed during youth will have their awards time limited, if the claimant is not in the support group.

Amendment 42 is similar in a number of respects to Amendment 43, and I think I can probably say was the inspiration in an earlier form for that amendment. However, the point is that Amendment 42 is less favourable than Amendment 43 in one important respect, as it states that a claimant must be assessed as having limited capability for work-related activity within five years of the termination of the first ESA award. The approach taken by the government amendments would not seek to put this time limit on the new form of entitlement to ESA for claimants whose condition deteriorates. We would allow a claimant to return to a contributory ESA award at any time after their time-limited award has ended, as long as they develop limited capability for work-related activity or fall to be treated as having it, and as long as they have continued to have or be treated as having limited capability for work throughout the period after their time-limited award ended.

On this basis, I trust noble Lords will agree that Amendment 43 and the supporting government amendments provide a more generous approach than would be provided by Amendment 42. I beg to move.

[Lord Patel]

My Lords, I speak to Amendment 42, to which the Minister has just referred. Before I start, perhaps I might wish him a happy new year and, in doing so, thank him enormously for his Amendment 43. It may be claimed that it was in response to my amendment in Grand Committee; if so, I am very grateful for it. I thank him and I do not need to go any further.

[Baroness Meacher]

My Lords, I support Amendment 43, tabled by the noble Lord, Lord Freud, and I also wish to congratulate him on levering a little money out of his Government, or the Treasury, to enable that amendment to be tabled. However, I also want to speak to my Amendment 42A, rather late in the day, which seeks to introduce just a little more humanity into this part of the Bill. It simply extends a little the remit of Amendment 43.

At present, a claimant who has a terminal illness and who is expected to live no more than six months would be placed in a support group, which means that they would have no conditions attached to their benefit entitlement. If they have a few good days when they might be able to work, there is no commitment for them to have to do that although anyone in this position who has a job will no doubt wish to work as far as they possibly can. I am talking about those people who do not have a job and who therefore find themselves in the position of having to look for one, when they have a terminal illness that will deteriorate over time until they finally die.

This amendment applies to a group of people who are suffering from a life-threatening disease, the symptoms of which cannot be controlled by any recognised therapeutic procedure, and where there is reasonable cause for these symptoms not to be able to be controlled by any such procedure. At present, the default position is that these claimants will be allocated to the work-related activity group and will be expected to undertake interviews and activities on this rather wild and ridiculous assumption that they should be finding a brand new job, with a brand new employer, for whatever little bits of time they are able to function. At the same time, of course, they have to prepare themselves mentally for the ever worsening symptoms that will lead to their death.

My question to the Minister is whether he regards such expectations of persons on a downward path towards death as humane and reasonable. I hope very much that he will answer that question rather carefully in his response, in the sense that having accepted the government amendment and put that forward, he will find that this amendment is a very minor shift which brings people in a rather similar position into line. Again, I must emphasise that this amendment would not in any way discourage terminally ill people who can work from doing so. Rather, it is an attempt to remove callous pressures from being applied to people who already have probably far too much to cope with.

The Minister knows that I understand very well the need to reduce the numbers of people on ESA and, most particularly, to reduce the months and years that some people remain on it. We are really of one mind on that. Of course, proper conditions need to be applied so that if people are really sufficiently well to work, they make every effort to do so. However, we are talking about people whose lives are severely curtailed. They will not be around to spend years on ESA, let alone to claim pensions. Are we not in danger of throwing the baby out with the bathwater here?

I shall leave your Lordships with just one case to illustrate the point. A CAB client had had major surgery for breast cancer, twice. At the time of her assessment for benefit she was suffering severe pain and undergoing tests that revealed some abnormal bone activity. She told the HCP about her condition and the fact that she was due to have a further scan. This lady was found to have metastatic non-curative cancer of her bones, primarily in her pelvis, hips, back and spine, as well as down her legs and in the rib area. She was told that she had three or four years to live, although I have to say that sounds a little unlikely to me, and my guess is that it will be a pretty miserable three or four years.

On appeal, this claimant had her “fit for work” status—which is mind-boggling in itself—removed, but she was placed in the work-related activity group. She became very tearful and had to see a psychologist. She was unable to return to her previous job due to pain from the operations removing the lymph glands under her arms. She got extremely tired, of course—if you have metastatic cancer you are not going to be in a good way to do anything. The CAB adviser was of the view that this client would not be able to work again due to the increasing pain levels that she was going to suffer.

Anyone who has known anyone with metastatic bone cancer will know that this is not a happy thing to have; it is seriously deleterious. That is the point that I want to make: here you have people whose pain, tiredness and general debility cannot be adequately controlled, and there should be some fairly automatic procedure to deal with them. Perhaps the Minister could consider the position of a potential employer. Who would take on an employee with metastatic bone cancer? I have to say that I would not. How reliable would such an employee be, and for how long—for how many days or weeks at a time? Who knows? The prospects, though, are pretty poor.

This client will have to go through the humiliating and endlessly negative experience of writing applications and going for interviews, knowing in her own mind that employers, if they are half sensible, simply will not take her on. It is that aspect that we need to get hold of. Also, she could be accused of wasting employers’ time: why should they be reading these applications and interviewing her when, poor soul, she really is not in a fit state to work?

Noble Lords have mentioned in previous debates that terminally ill claimants will be saving taxpayers substantial amounts of money because of course they will not be living for decades with dementia, as people like myself might be doing. All we are looking for is dignity in those last months and, if they are lucky—although perhaps this might not be lucky after all—years before they die. As the Prime Minister said in his first party conference speech as Prime Minister,

“people who are sick, who are vulnerable, the elderly—I want you to know that we will … look after you. That's the sign of a civilised society and it's what I believe”.

We are really not talking about a lot of money here. I hope that the Minister will consider this matter.

[Lord Kirkwood of Kirkhope]

My Lords, I would like to make a brief contribution to this debate. Anyone who was part of the collective consideration in Grand Committee would have to acknowledge the very constructive role that the Minister played in this part of the Bill. The Bill is very difficult territory. I think that it was an amendment in the name of noble Lord, Lord McKenzie of Luton, that opened the door to some of the changes that the Government are now proposing, but it was palpable to everyone who was watching the Minister that the defence that the department was taking at the time was not adequate to meet the demands that were being made of it in the cross-examination that he was getting. For myself, I think that it was commendable that he was alive enough to what was being said by adult people around him at the time on an important issue. It is not a huge issue; there may be 4,000 or so claimants who might now benefit from this measure, but those who do will get substantial benefit. It is appropriate, particularly from my side of the coalition on this side of the House, to recognise that this is a significant amendment that was won only because the Minister was willing enough to listen and make a constructive response. That is why we have the amendment in front of us today, and I hope that the House will support it unanimously.

16:00

[Baroness Finlay of Llandaff]

My Lords, I shall make a brief intervention in support of the noble Baroness, Lady Meacher. It is important for the House to remember that whatever is said in the prognosis of someone who has an advancing life-threatening disease, it is completely unreliable; it is no better than a guess. These patients are living with uncertainty. They may die much sooner than their prognosis predicts or they may live longer, but they know that death is staring them in the face.

We are talking about adults of working age. They often have dependants. They often have children for whom they must make provision. If they do not use what energy they have to work on making provision for those children, the problems in the next generation among bereaved children will be much greater. There are questions about who will care for the children, what provision will be made, what the children are being told, how they are being prepared for bereavement and so on, quite apart from legal arrangements. Many people who are single parents say that making provision for those children is particularly difficult at times. Therefore, it does not make sense to take what little energy people who are ill have and put them through a system that stresses them further. It is much better for our society to use the energy that they have to do the thing that they know needs to be done, which is to make provision for those who will be left behind after their death.

I just emphasise that the uncertainty with which they live makes their lives even harder. It is impossible for an employer to know accurately about taking someone on. They may take them half way through an induction period before they become ill. Given the competition for jobs at the moment, any employer seeing this will, if they are in their right mind, say about the job that needs to be done, “Hang on, is this sensible for my place of work?”, however much they want to help someone. I caution the Government against preventing people using the energy that they have to make provision for the future of those who will be left behind after their death.

[Baroness Morgan of Drefelin]

I just want to thank the Minister for bringing forward Amendment 43 and the other government amendments in this group, and for listening to the debates in Committee. I do not want to detain the House in any way—I know we are engaged in several critical debates this afternoon—but the noble Baroness, Lady Meacher, has explained very eloquently the challenges that the Government have in addressing the thorny, knotty and difficult problems of people facing terminal and life-shortening illness. I do not want to say more than that because her points have been made so clearly.

[Lord McKenzie of Luton]

My Lords, I start by also thanking the Minister for Amendment 43 and wishing him a happy new year. I am sure it will become happier when we get into February. That is the case for several of us. Perhaps I can comment first on some of the other amendments to which the noble Lord referred. I understand that Amendments 33 and 34 are consequential. The fact that they include references to provisions that cover 365 days or the clock for counting those days already being under way does not imply our acceptance of them. They are the subject of subsequent amendments that we are about to come to. Similarly, as we have heard, Amendments 37, 39, 40 and 41 are the formulation to confirm the intention that the limit should apply to contributory claims under the youth condition. Again, as will be clear, we do not support the 365-day limit or the future denial of claims under the third condition, and we will address this by amendments in the next group. Therefore, our not challenging these amendments should not be taken as accepting this as the final position; likewise in relation to Amendments 63, 64, 65, 66 and 67.

Amendment 43, tabled by the Minister, obviates the need for Amendment 42. It covers the same point and, as he said, goes further in that there is no time limit. This is to be welcomed. This enables someone to reconnect with contributory ESA after time-limiting should their condition deteriorate and they become eligible for the support group. It would appear that this applies equally to those with an existing youth condition claim and those accessing contributory ESA via the first and second national insurance contributions. Perhaps the Minister would just confirm that. It would appear that there is no time-limiting factor—I think that he confirmed this—so the gap between the time limiting of the contributory allowance and arrival in the support group could be five or 10 years or, in theory, even longer. I touch on this particularly because I am bound to say that this is not something to which the Minister warmed in Committee. On 8 November, at col. 33 of Hansard, he stated in relation to Amendment 71P:

“However, this could mean benefits being reinstated 10 or more years after the claimant last worked, which is not reasonable”. —[Official Report, 8/11/11; col. GC 33.]

Further, he stated that,

“people in the WRAG who have gone through their time-limited period do not then have a right to go into the support group on a contributory basis”.—[Official Report, 8/11/11; col. GC 36.]

I do not wish to be churlish about this but that is why we included the five-year limitation in Amendment 42, which sought to meet the Government at least part way. However, the Government are to be congratulated on Amendment 43, which deals with the disconnect from the national insurance contributions and also addresses the concerns powerfully expressed in Committee about people with deteriorating conditions who are initially placed in the WRAG. My noble friend Lady Morgan of Drefelin spoke about people with Parkinson’s disease, motor neurone disease and some forms of cancer. The Government will fulfil their stated intent that the time limiting of contributory ESA will not affect those in the support group.

However, as ever, I have a couple of questions. Amendment 43 states that the employment and support allowance entitlement,

“is to be regarded as a contributory allowance for the purposes of this Part”.

Why is “regarded as” used rather than “is”? Is it or is it not a contributory allowance? The requirement is that the person remains assessed as having limited capability for work. How is this to work in practice in circumstances where entitlement to the contributory allowance has lapsed and income or capital levels preclude entitlement to income-related ESA? Does it require the individual to be subject to the crediting-only arrangements? Would a claimant commitment still have to be in place? If somebody’s prognosis of limited capability for work has lapsed but there has been no reassessment because nothing is due, how does this affect the position in practice? Where someone’s reassessment has initially led to a fit-for-work designation but this has been overturned on a reconsideration or appeal, will the claimant be treated as being continuously in the WRAG and remain entitled to the benefit conferred by the government amendment? The noble Lord’s letter of 8 January, which I received yesterday, suggests that around 4,000 people will benefit from this measure by 2016-17. This may be only a small proportion of those damaged by the general time limiting. Nevertheless, I stress that it is welcome.

Amendment 42A, spoken to by the noble Baroness, Lady Meacher, and supported by my noble friend Lady Morgan and the noble Baroness, Lady Finlay, raises an extremely important point about individuals with life-threatening diseases where there is evidence that their diseases are uncontrollable or uncontrolled by a recognised therapeutic procedure. It requires them to be treated as being in the support group to obtain the benefit of the easements in the Government’s legislation. I would be interested to know how often such individuals would not be assessed as being in that group anyway. I think that we heard some examples from the noble Baroness, Lady Meacher. I await the noble Lord’s reply but I hope that he can give her a sympathetic response to this important issue.

[Lord Freud]

My Lords, picking up the point of the noble Lord, Lord McKenzie, about the discrepancy between Amendments 42 and 43, sometimes when a powerful argument is made in Committee, it succeeds even more than do the proponents of that argument. In this case we went back, thought about the measure and said, “If we are going to do it, let us do it properly”. That is why the measure is indefinite and not for five years. The noble Lord asked whether Section 1B on further entitlement after time-limiting covered contributory ESA under the first and second contribution conditions and the ESA youth awards. The answer is yes

Let me turn to Amendment 42A. I very much understand noble Lords’ concerns on this, but the amendment would not achieve the stated aims of placing in the support group individuals with conditions that reduce life expectancy to two or three years. Substantial provision is already available to ensure that individuals with life-limiting diseases are provided with appropriate support. The amendment seeks to ensure that individuals with uncontrollable diseases who do not meet the support group criteria of the WCA, set out in regulations, are treated as having limited capability for work-related activity. Under the current system, individuals who meet this provision and are treated only as having limited capability for work will have a condition that does not significantly limit their functional ability such that it would be reasonable to expect them to undertake work-related activity. However, anyone who has an uncontrollable condition may still meet the current support group criteria if, as a result of their condition, there would be a substantial risk to their health if they were held to be capable of work-related activity. A large number of protections are therefore built in.

Perhaps I may provide an example of how that might work—and does work. Consider an individual with extremely severe uncontrolled hypertension, who has little or no symptoms or functional impairment. This individual will not meet the test of limited capability for work-related activity necessary to go into the support group, or even the test of limited capability for work to go into the WRAG. As a result of their condition, work-related activity is likely to pose a substantial risk to their health.

[Baroness Meacher]

I apologise for interrupting the Minister. The point that I was trying to get across was in the example of the woman to whom I referred. It may be that today she could do a little bit of work—although probably not. The difficulty is that the assessors do not take into account the likelihood over a number of weeks that this person simply will not be able to maintain an employment pattern. No employer in their right mind would therefore take them on. The issue that I am trying to raise is that the assessment processes, as I understand them, absolutely do not go anywhere near that level of sophistication. I agree that we are not talking about large numbers of people, but each and every case is a tragedy in its own right. There will be people who, for reasons that we can understand, will be assessed as not qualifying for the support group at this moment, yet for whom employment is completely unrealistic. I hope that the Minister can get the sense of what I am trying to say.

[Lord Freud]

I am sympathetic to this issue—one has to be. Clearly, we are continuing the whole time with improvements to the WCA process. We are getting a lot of improvements. We are beginning to sense that. Although the figures do not show it, the anecdotal feedback is becoming much more encouraging. This is an area in which we can make the assessments with the kind of detail that is necessary as we work through the process. Indeed, that is where it should be done. As the noble Baroness, Lady Finlay, said, in these situations it is extraordinarily difficult to come up with a six-month or a year’s prognosis. We all know that. The position, on the balance of probabilities, is that if the prognosis is six months, people go straight into the support group. That has happened since 2008 and for about 10,000 people.

The data are extraordinarily imprecise. There is great variability among clinicians. It is very hard to pin down anything that we could use with any consistency stretching out to two or three years. Medicine is advancing with great rapidity, so whatever we decide on today may be radically different in two years’ time. A longer prognosis could mean that a condition could be very well controlled for a period and then deteriorate dramatically towards the end. The amendment concerns only conditions that are uncontrolled and uncontrollable. Clearly, that may not be the case for many life-limiting diseases. I think there is consensus around the House that in many circumstances work is beneficial and important for those with life-limiting conditions. Some will want to continue to work, and it is important that we have a system that does not write people off but allows for that.

16:15

The most important point is that it is simply not appropriate to put such provision into primary legislation. We already have powers in the Welfare Reform Act 2007 to treat claimants as having limited capability for work or for work-related activity. Where appropriate, we use those powers to make regulations that allow for people who would otherwise fail to demonstrate limited capability for work or work-related activity to be treated as having either or both. It is important to place those treating provisions in the regulations, so that we have the right flexibility to ensure that the test is operating properly and covers the right people.

Terms such as life-threatening, uncontrolled, uncontrollable, recognised and therapeutic are subject to different interpretations. That is why it is important to be able to refine the wording or adjust it over time to ensure that the test remains accurate and appropriate. If we placed such wording in primary legislation, we would not be able to amend it with the flexibility that we would need. We would need future primary legislation—I think that everyone in the House knows what pressure there is on time for primary legislation—which would hinder its being updated.

We already make provision for a variety of “treating as” provisions in secondary legislation. There is no basis for inserting this provision into primary legislation when the other important provisions are contained in and work effectively through secondary legislation. Bluntly, that would lead to inconsistency in both primary and secondary legislation.

I ought to pick up a couple of points made by the noble Lord, Lord McKenzie. On his question about how appeals work, claimants will be treated as having limited capability for work where an appeal has been made, and will be able to benefit from the new provision if they move to the support group, having won the appeal. How will we continue to assess capability to work after the time-limited award ends? Credits-only claimants will continue to have work capability assessments, as will claimants on income-related ESA. This is clearly a complicated area. I hope that I have dealt with it. I can write to the noble Lord if he needs further detail.

I thank noble Lords for their comments on Amendment 43, for which I am pleased to have had so much support. That was one of the really good things that came out of Committee. A lot of good things came out of Committee, but that provided a real learning opportunity for us and I hope that we have responded in style. I ask noble Lords to support the series of government amendments, as I am sure they will, and I urge them not to press Amendments 42 and 42A.

Amendment 33 agreed.

Amendment 34

Moved by

[Lord Freud]

34: Schedule 3, page 126, line 3, at end insert—
“( ) section 1B(1) (as inserted by section (Further entitlement after time-limiting) of this Act;”

Amendment 34 agreed.

Clause 40 : Interpretation of Part 1

Amendment 34A not moved.

Clause 44 : Claimant commitment for jobseeker's allowance

Amendment 35 not moved.

Clause 46 : Sanctions

Amendment 36 not moved.

Clause 51 : Period of entitlement to contributory allowance

Amendment 36A

Moved by

[Baroness Meacher]

36A: Clause 51, page 36, line 31, after “2007” insert “, and subject to section 52,”

[Baroness Meacher]

Amendment 36A is a paving amendment for Amendment 46, which is consequential upon it. Our aim with these two amendments is to ensure that young people who are very severely disabled and who are assessed as qualifying for the support group continue to be entitled to contributory employment support allowance in the future. Clause 52, if not amended, would remove this entitlement from all such young people. Amendment 46 would accept the Government’s position that those somewhat less disabled young people would be entitled to employment support allowance as a member of the work-related activity group, or WRAG, but for one year only, so this is a very modest amendment. We recognise the financial constraints within which Ministers are working. Having said that, in principle I support Amendment 45, but Amendment 46 is more limited.

Until now, under the Welfare Reform Act 2007 the contributory allowance of ESA is payable to all those who have paid sufficient contributions and to young people who have not had an opportunity to make contributions because they have had limited capability for work for at least 28 weeks prior to being awarded the benefit. In other words, under the 2007 Act and under Amendment 46 a young person with a long-term condition or impairment which is so severe that they qualify for the support group—thus having a condition which prevents them working and paying contributions —can qualify for benefit as of right without having to be subject to a means test. The Government plan to remove this entitlement—at least for new claimants. As I understand it, those who have gained this entitlement as young people will continue within the support group.

The Government’s arguments in their impact assessment are, in my view, extraordinarily weak. First, they argue that abolishing the youth entitlement to contributory benefit puts those young people on the same footing as everyone else claiming contributory ESA. This is surely simply not the case. These young people with congenital conditions or impairments so severe that they are entitled to the support group provision are in a completely different category from people who are able to earn and build up capital, pay contributions and thus have some kind of dignity. They are surely in a category of their own.

The Government have said that they will protect the most vulnerable. As I said in my previous speech, the Prime Minister himself made a very personal commitment to protect these people. Is there anyone more vulnerable than a severely disabled young person who has never had, and will never have, the chance to earn a living? I find it difficult to think of anyone.

The second government argument is that the abolition of the youth entitlement to contributory benefit will simplify the system. My question is: simplify the system for whom? I understand that one of the most common errors made by jobcentre staff is the failure to advise young people of their entitlement to contributory ESA. Balancing a reduced number of errors against the hardship which Clause 52 will cause hardly justifies the reform. For the claimant, a contributory benefit which does not change with a change in income or capital is surely much, much simpler. Simplicity for whom? It may be simplicity for Jobcentre staff but certainly not for the complainant, so the Government’s argument does not stand up.

The Government’s attempt to save money by denying this particularly disadvantaged group of people may indeed backfire. Would it not be wonderful if some of them could find a partner, despite the level of their disabilities? In the long run, such a relationship would undoubtedly save the taxpayer. How much more difficult for someone to find a partner if not only do they have to cope with their own severe disabilities, but they are also a financial burden if they have no entitlement of their own to any income should their partner have any earnings? Such a position is quite different from an able-bodied person who has had an opportunity to build up earnings and capital—and indeed a pension of their own. These people will never have a pension; they will never have any sort of entitlement unless we make that provision for them in this Bill.

This is not an even playing field. The Government will argue that most of these young people will be entitled to some means-tested benefit. Indeed, I understand that only 10 per cent will receive nothing at all under a means-tested system. Then—you could turn that argument on its head—there will therefore be very little savings by denying these people the dignity of an entitlement to some benefit. Why remove that dignity from this peculiarly disadvantaged group?

The noble Lord, Lord Freud, in a letter sent to the Cross-Bench Convenor on 8 January, points to a very different argument with which I have some sympathy; it is quite, quite different. The noble Lord refers to a recent European Court of Justice ruling that restricts the Government’s freedom to apply the residence and presence tests that are part of the conditions of entitlement to ESA. This restriction makes the youth provision potentially available to people living abroad who come over here for a short period and then go home and have an entitlement for life. I understand that the Government are fighting the EU court ruling and I wish them well in that fight.

We need to be very clear that young people with very severe disabilities or impairments, which qualify them for the support group, are among the greatest priorities for this Government. As I said, the Prime Minister made his commitment to that group. Taking account of the EU ruling, but also the absolute priority for this particular group of claimants, I ask the Minister to take away this issue and consider tabling an amendment at Third Reading that would provide residential conditions, or perhaps parental contribution conditions for entitlement to this youth contributory benefit—the passporting in of youth to this benefit. There must be some way of providing for conditions for this benefit for young people that would preclude people abusing the benefit as the EU ruling has made possible.

If the Minister can agree to take this matter away and positively discuss with us and others a way forward to protect this group of people, while precluding the abuse, I would withdraw the amendment. But I would want the understanding that I will bring back the amendment at Third Reading if we cannot arrive at some satisfactory arrangement. We should not be ignoring the real entitlement of these young people—the most disadvantaged people in our society. They should have an entitlement to benefit, so that they do not have to rely on means-tested benefits for the rest of their lives. That is what we are talking about here. Either they have an entitlement to benefit or they are subject to means testing in perpetuity. It is an important matter and I hope that the Minister will be willing to take it away.

16:29

[The Earl of Listowel]

My Lords, I put my name to Amendments 36A and 46, to which my noble friend has just spoken so eloquently. I strongly support them. Young people with a severe congenital disability, or a severe disability developed early in life, merit contributory employment support allowance; it should not be removed from them. Noble Lords who are acquainted with families who have disabled children will know of the appalling difficulties they face when their child makes the difficult transition to adult services. It is particularly important that such disabled young people have financial support because the transition to adult services is often very poor.

Vital to a safe transition is a social worker, who can be a powerful advocate for a child and their family. However, what does one hear again and again from such families? Their social worker continually changes, the parents have to keep rebriefing the social worker on their child's needs, and there is no continuous and strong advocate for the child.

We should consider another group. As vice-chair of the parliamentary group for children in care, I know of the high rates of disability among children taken into public care. There must be absolutely no erosion of financial support for these children as they leave care. Amendment 46 would ensure that this erosion would not happen.

I am most grateful to the Minister for his helpful letter to the Convenor. I recognise that retaining contributory ESA for this small group of very vulnerable young people would be somewhat inelegant. I also recognise the concerns that my noble friend raised about the European judgment. However, I hope that the Minister may be able to help in this area, given the particular needs of this vulnerable group. I also hope that my noble friend will press this matter as far and as hard as she can.

[Lord Patel]

My Lords, I speak to my Amendment 45, which takes a much more radical view and proposes leaving out Clause 52. I guess the happiness will end now. However, I take note of the comments made by the noble Baroness, Lady Meacher, about the anxiety over abuses in the system, and I will listen carefully to the response from the Minister, because it is an important issue. I agree with the noble Baroness that it will not be worthwhile pressing any of the amendments if the Minister’s response is that there is a need to reconsider matters in the light of our comments.

I will outline the reason for my suggestion that we leave out Clause 52 by exploring historically why youth ESA was set up. Under the provisions, a person under the age of 20 who is not in full-time education or who has had a limited capability for work for 196 consecutive days can gain entitlement to contributory ESA despite not having reached the contributions threshold. This measure has existed in some form in the benefits system for nearly 40 years to enable young people to access contributory benefits if they are unable to work because of illness or disability.

The youth rules were introduced for incapacity benefit in April 2001 as a result of provisions in the Welfare Reform and Pensions Act 1999. They were intended to refocus benefits on people disabled early in life who had never had the opportunity to work and gain entitlement to incapacity benefit through the payment of contributions. The rules were carried over into ESA as part of the Welfare Reform Act 2007, again to ensure that young people who had not had the opportunity to build up a sufficient contribution record would not be excluded from the non-means-tested allowance.

With the Welfare Reform Bill the Government now intend to abolish the youth condition, as well as time-limiting its receipt to 12 months for existing claimants. The justification for this change, as set out in the impact assessment, is that it,

“will simplify the benefits system and ensure a consistency of treatment for those claiming ESA”.

This assessment completely fails to recognise that young people with long-term health conditions or disabilities are already in a place of disadvantage in comparison with older adults, hence the introduction of the youth condition in the first place, and that this change will entrench this disadvantage. This will mean that young people, including those unable to work because of cancer, will be extremely unlikely to be able to access the contributory element of ESA and will have recourse only to the means-tested income-related element to be subsumed into universal credit. Young people who are ineligible for the income-related component, which will include those with a partner who works more than 24 hours a week and full-time students, could therefore lose up to just under £100 a week. This will have a devastating impact on those who are unable to work and are struggling with the significant additional costs of a cancer diagnosis—and, believe me, there is a significant cost for all kinds of reasons once cancer is diagnosed.

The eligibility of young people for benefits is extremely dependent on their circumstances and particularly on their education status. I have serious concerns about how students, for example, are treated under the system. Full-time students are able to claim income-related ESA only if they are already in receipt of DLA. This is another example of how the eligibility rules at present disadvantage young people. I am also concerned about the knock-on effect of many young cancer patients who are students becoming ineligible for DLA as a result of the introduction of PIP—and we will discuss that later. I believe it is critical that the Government ensure that the eligibility of students with long-term health conditions and/or disabilities for ESA is not dependent on their receipt of DLA.

Let me give an example. David was diagnosed with stage 4 Hodgkin's lymphoma when he was 22. Before he was diagnosed, he received a full wage working for the NHS that stopped when he was undergoing treatment. As he had been working for his employer for only six months, he was entitled to three weeks’ paid sick leave. He was subsequently unable to claim any benefits, including ESA, because he was forced to move back home with his parents. David told me: “It can be really difficult for young people to build up time with one employer so that they are entitled to sick pay at full pay”. Similarly, it is extremely difficult for young people to build up national insurance contributions, so I am thankful that at present the youth rules enable young people, including those with cancer, to access contributory ESA, which can be a lifeline when they are already impacted by a loss of earnings.

DWP statistics show that 17 per cent of the current caseload of ESA claimants aged 16 to 24 are currently accessing contributions-based ESA, or both income and contributions-based ESA, and could therefore be negatively affected by this change. The DWP impact assessment estimates savings of only about £11 million per annum while noting that 70 per cent of those affected will lose £25 a week as a result of qualifying for income-related ESA only, which equals about £1,300 a year. A further 10 per cent will lose almost £100 a week by virtue of not qualifying for income-related ESA. Over a year, this amounts to almost £5,000. Only 20 per cent, or just under 3,000 claimants, will get exactly the same amount of income-related ESA that they would have got under the youth provisions. Based on the Government’s own estimates, this loss of income may affect as many as 10,000 people by 2015-16.

This means that only 20 per cent of claimants will be financially unaffected by these changes. I believe that it is wrong that these savings should be levied from such a small group of vulnerable young people. Indeed, the department’s own impact assessment notes that:

“The abolition of the ESA ‘Youth’ provisions is more likely to have an impact on disabled people because ESA is directly targeted at people with health conditions that limit their ability to work. There is a risk that the affected group will be more likely to need more support because of their condition than all ESA customers”.

I therefore believe it is wrong that the Government should seek to remove a vital form of financial support for young people with serious long-term health conditions. For a proposal that by the Government’s own admission will impact around 10,000 young people, the cumulative savings will be only £11 million.

In Committee, the Minister stated that he believes that his,

“proposals have built-in support for this group of claimants”.—[Official Report, 8/11/11; col. GC 58.]

I can assure the Minister that this is not the case and that his proposals will have a significant financial impact on young people with serious health conditions who may have no other option for financial support. For example, young people with cancer are not always able to access DLA, particularly if they have a treatment period of less than nine months. ESA may be their only option while they are undergoing treatment.

The Minister has also argued that no other group has this kind of concession in contributory benefits. However, that is exactly the point: the rules exist precisely because it is unlikely that young people will have been able to build up the requisite national insurance contributions, but they should still be able to access a benefit designed to provide financial support to those unable to work because of illness or disability. I do not see how this proposal can be part of a “principled approach to reform”, which is the basis for the whole of welfare reform.

The measure will remove a vital source of financial support for young people with serious health conditions and disabilities. I hope that the Minister will give some indication that he recognises this and that he is willing to look at it again or at least give it further thought. I take the point made by the noble Baroness, Lady Meacher, about the abuse of the system, which certainly needs to be addressed. When the time comes for me to decide whether to press my amendment, I will be mindful of that.

[Baroness Lister of Burtersett]

My Lords, I support Amendments 45 and 46, to which my name is attached. The purpose of the amendments has already been explained and the case has been made convincingly. I simply want to add to that. Young people who are disabled from birth or early in life have been entitled to claim ESA or its predecessors from the age of 16 since 1975, as the noble Lord, Lord Patel, pointed out. That has been accepted by all the main parties as a fair and proper way to treat young disabled people. Indeed, my noble friend Lord McKenzie did not thank me for reminding the Grand Committee that in a previous Parliament he was urged to be more generous to this group of young people by the then Opposition spokesperson, the noble Lord, Lord Skelmersdale. I was therefore rather surprised when the Minister argued in Grand Committee that no other age group can qualify for contributory ESA without having paid, or been treated as having paid, national insurance contributions. That is because all other age groups will have had the opportunity to earn such contributions, as the noble Baroness, Lady Meacher, and the noble Lord, Lord Patel, have already pointed out.

We are talking about a very small group. According to the Government’s figures, about 15,000 young people are likely to be affected each year. Some of these will qualify for income-related ESA, although sometimes at a lower rate, when there will be an estimated average loss of £25 a week, which is a significant sum for those on a low income. They may become automatically eligible for passported benefits such as free prescriptions, depending on the outcome of the review currently being undertaken by the Social Security Advisory Committee, but that does not justify removing their underlying entitlement to a weekly income. One in 10—or 1,500 a year—will lose all entitlement to benefit, perhaps because they have a partner in full-time work or because of the capital rules.

16:45

What kind of young people are we talking about? In Grand Committee I gave examples provided to me by CPAG that illustrated the kind of young people likely to be affected, which I know noble Lords found very moving. They were of young disabled people in foster care or living with a kinship carer; young disabled people who had built up savings to be used to help them maintain their independence; and young disabled people who might be fearful of forming a relationship for fear of losing their independent income. I will not repeat the case studies but will provide a couple more that CPAG has kindly given me:

“Martin has been disabled since childhood. For years his parents have been putting money into a savings account for him, including saving money from his disability living allowance. Now a young man, Martin cannot work but can nevertheless look forward to living an independent life. Claiming contributory ESA in youth will help him to do this. Because of the capital his parents have painstakingly saved for him, he is excluded from income-related ESA. Instead of having the means to pay for the independent living equipment and support he needs, if he cannot access ESA in youth he will have to run down his savings on day to day living costs, leaving him with no financial cushion for extra needs or against the day that his parents are no longer able to provide any support.

Ryan is 17 and has significant mental health problems. He currently lives with his grandmother. He is looked after by the local authority which pays his grandmother a small allowance for his upkeep. She cannot get child benefit or tax credits for him and is finding it difficult to manage. Ryan can get ESA in youth to provide him with his own independent income and some security for himself and his grandmother”.

Noble Lords may well ask what could possibly justify depriving this very small group of vulnerable young people of the independent means that offer them some security without the vagaries of means-testing. Is it a matter of principle? No principle has yet been enunciated by the Government and I think we can all agree that the something for something principle can be suspended in these circumstances. Is it cost? It would appear not. The department has indicated that this is not about cost. That said, the Minister’s final card in Grand Committee was the statement that the amendment tabled there, a slightly less restrictive version of Amendment 46, would reduce the expected cumulative benefit savings by around £10 million by 2015-16. That is cumulative, not annual, savings and, as was pointed out in Grand Committee, £10 million was easily within the margin of error. That was a very weak card to play.

What it seems to come down to is administrative simplicity. I am not sure that any policy that increases reliance on means-tested benefits, which the impact assessment acknowledges will be the case, adds to the sum of simplicity in the benefits system. I do not believe that your Lordships would want to deprive a small group of very vulnerable young people of a degree of financial security simply to make the overall system look tidier administratively.

I hope I am not doing the Minister a disservice when I say I did not feel that his heart was in the uncharacteristically feeble defence he put up for this clause in Committee. If there are any remaining technical problems with the amendment, including those raised about the European Court of Justice ruling and its possible implications—which I admit I was not aware of until today, although the noble Baroness, Lady Meacher, has made some suggestions about how they could be dealt with in an alternative amendment—these could be put right at Third Reading.

Given that the costs will be lost in the margin of error, I hope that the Minister will show the same openness of spirit with this amendment as he showed with the earlier government amendment, and accept either this amendment or one along similar lines—or, as the noble Baroness, Lady Meacher, has suggested, that he will bring forward an alternative amendment at Third Reading. If he cannot make such a commitment, I hope that your Lordships’ House will stand up for this very small group of vulnerable young people.

[Baroness Finlay of Llandaff]

My Lords, I have also added my name to Amendment 45, which was so ably spoken to by the noble Lord, Lord Patel, and the noble Baroness, Lady Lister of Burtersett. There are many complex issues in this group, all of which been addressed pretty comprehensively, but I would like to add a piece of new research which emerged in December. It shows that half of young cancer patients have to borrow money as a result of their illness. More than one in five have borrowed over £1,000, while almost one in 10 have borrowed over £2,000. The eligibility of young people is heavily dependent on their circumstances, such as their educational status and so on, and they are in a unique situation.

I should like briefly to address the situation of students. They are unable to access contributory ESA, and can access income-related ESA only if they are already in receipt of disability living allowance. Many young cancer patients, particularly those with initial treatment periods of less than nine months, may not be able to access DLA. Furthermore, there are students who are fit and well one day but, for whatever reason, discover that they are not on the following day. Some are diagnosed with devastating diseases such as osteosarcoma or cancers like Hodgkin’s lymphoma. There are also those involved in traffic accidents or who suffer catastrophic sports injuries, head injuries and so forth. The numbers are small, but suddenly these young people become very dependent and require long periods of rehabilitation. If you are a full-time student whose life suddenly collapses around your ears and treatment starts immediately, the costs mount up quickly. The problem with the way that the Bill is worded at the moment is that it closes the door on young people being able to access options for financial support. The complications of this have already been discussed, and I hope that between now and Third Reading the Minister will be able to consolidate the sentiments and ensure that we do not inadvertently remove a very important safety net for young people.

[Baroness Howe of Idlicote]

My Lords, those of us who sat through the entire Committee stage and have listened to and contributed to these arguments are now hearing it all again. We are hearing the horrific details about the suffering of children and their families and carers, and indeed of grandparents who are often involved in the care needs of these children and young students. All this must help to persuade the Minister, who we know has tried his very best in a number of respects, and has succeeded in a number of areas in which we had considerable concerns. In this case, however, with the numbers so small and the need to look elsewhere to make savings if that is necessary, why should we continue to penalise this group? Surely we can get around the European inhibition confronting us, and we have even had suggestions about that. Some brilliant speeches have been made today and I hope that they have had the desired effect.

[Lord McKenzie of Luton]

My Lords, I speak in support of Amendments 45 and 46. As the noble Baroness, Lady Howe, has just said, we have heard very powerful presentations by my noble friend Lady Lister, the noble Lord, Lord Patel, the noble Earl, Lord Listowel, the noble Baroness, Lady Finlay, as well as from the noble Baroness herself. I do not plan to repeat all the key issues associated with why I support these amendments. We have gone over them in Committee and we have heard them again today.

Society imposes significant challenges on young disabled people, especially so far as employment is concerned. These challenges will be particularly acute in the next few years as unemployment soars, particularly youth unemployment, which is now more than 1 million. Given the determination to place a time limit—we have yet to settle whether it should be one or two years—on contributory ESA for those in the WRAG, the abolition of the youth condition seems particularly spiteful.

The amendment of the noble Earl, Lord Listowel, would preserve the third condition, but only in circumstances where the claimant was and remained in the support group, thus focusing the support on those with the highest needs. The amendment would not appear to add any further benefits to existing claimants who qualify for ESA as a result of the third condition, because that is now covered by the government amendment. However, it would preserve the third condition for new claimants who fell within the support group. As such, I suggest that it is absolutely consistent with the Government’s Amendment 43, which was so widely praised earlier. I would hope that it was readily acceptable.

Just to be clear: the effect of government Amendment 43 is to provide among other things for those with an existing claim which relies on the third condition, the youth condition, to remain entitled after time- limiting if they have moved into the support group. Amendment 46 would allow the third contribution condition still to be applicable for new claimants but only where they would go directly into the support group. So there is a parallel in enabling young people with the most severe needs, existing and new claimants, to make use of the third condition. It is unlikely to have any significant cost, but doubtless the Minister will advise on that.

The letter sent by the Minister to the Cross Benches, and perhaps more widely, states that a “recent” European Court of Justice ruling limited the circumstances. How recent is “recent”? I do not believe that we debated or touched on this issue in Committee—if I am wrong, the Minister again will correct me. The letter goes on to say that the judgment further weakens the ESA youth provision, making it potentially much more widely available than intended. Of course, none of us would support benefit shopping if that is what is behind the concerns felt and we would work with the Government to try to make sure that it did not recur and was stopped, but until we have a much clearer idea of what is involved here, it would seem wrong to throw out now, on the basis of this potential issue, the prospects before us in the Bill to deal with the third condition and people entering the support group. If we do that now on the basis of the judgment, we close it off because we are coming to the end of the primary legislation.

At the very least, I hope that the Minister will be able to give a clear assurance to the House today that there will be an opportunity to come back to this issue at Third Reading and for us to have more detail, and that he will facilitate that. I would urge him also, because it would be consistent with that, not to press his Amendment 45A, because it would cut off the opportunity for people to make use of the youth condition for employment and support allowance. If noble Lords who have tabled these amendments are going to withhold pressing them on the basis that this issue requires further input, I hope that the Minister will undertake to do the same when he responds.

17:00

[Lord Freud]

My Lords, I start with government Amendment 45A, on which the noble Lord, Lord McKenzie, ended his remarks. We have already discussed government amendments to provide for further entitlement to ESA after a contributory award has been time limited. As I mentioned in the previous debate, it has been necessary to amend how the time limiting of ESA youth awards will operate as a result of providing for that new category of entitlement. We have introduced the amendments so that the deterioration category will be open to both claimants with a time-limited contributory ESA award and claimants with a time-limited ESA income-related award. In practice that means that the substance of the ESA youth time-limiting measure has been placed in Clause 51 instead of Clause 52. The government amendment preserves the intended policy for preventing new claims to ESA youth from being made in the future. The amendment to Clause 52 seeks to remove the substance of ESA youth time limiting, which will now feature in Clause 51, but to retain the measure that prevents new ESA youth claims being made.

Our proposed changes to the condition relating to entitlement to ESA on grounds of limited capability during youth are part of, basically, a set of principles around the form, where we are trying to focus our support for the poorest people. We are seeking to avoid duplication and to redefine the contract between the state and individuals as we move towards introducing the universal credit, which is clearly a far more efficient way of directing our resources to the poorest people.

As we go through some of the specific areas, I should remind the House that the universal credit, when it is introduced, is designed to focus each year an extra £4 billion into the pockets of the poorest people. On the other side, we do not think it is right in principle that, for example, a claimant who under the existing youth provision has qualified for contributory ESA as of right and then comes into a large amount of money—for instance, an inheritance from a parent—should then be in a position to continue to receive the scarce resources of the state in terms of contributory ESA without having paid any contributions. The figures available show that there is support for these youngsters in income-related ESA and that, indeed, 90 per cent of existing recipients will go from contributory to income related.

[Baroness Meacher]

My understanding is that many of these people may receive some income-related benefit but not at the same level of the contributory benefit that they would receive under the amendment. My second point is that the Minister has frequently referred to the £4 billion addition in the Welfare Reform Bill: is that a monetary addition rather than a real-terms addition because surely in real terms there will be a considerable drop in the overall welfare reform cost under the Bill?

[Lord Freud]

To be absolutely honest, unwinding the effects of the first full year, which will be in 2017, is quite hard to do in simplistic terms when compared to an SR. The simple answer is that the £4 billion is a real £4 billion, not an eroded £4 billion. The impact assessment makes it clear that it is made up of roughly half and half efficiency; it is a much more efficient system. We have taken the efficiencies that we have gained and put them back into the pockets of people, plus an extra amount of £2 billion. That is where the money is coming from. The bulk of it is going into the lowest two quintiles in a rather efficient way; I forget whether it is 80 per cent or 90 per cent, but the bulk of that money is directed very efficiently.

I turn to Amendment 45 in the names of the noble Lord, Lord Patel, and the noble Baronesses, Lady Lister and Lady Finlay. Clearly, the design of that amendment removes Clause 52 altogether. As I have just mentioned in my remarks on Amendment 45A, we have a principled approach to reform, in which we are trying to modernise and simplify the current welfare system and remove duplicate provision when our resources are limited.

As we move towards universal credit, on which I have just spent a bit of time, there are other areas of rebalancing the relationship between the state and individuals. I remind noble Lords again that the small number of youngsters who do not qualify for income-related ESA are in this position only because they have alternative resources available to them. All those in the ESA support group will continue to receive unlimited support. We will also, of course, provide support to ESA youth claimants whose awards end, and they later become vulnerable through their conditions deteriorating so they develop limited capability for work-related activity.

[Baroness Lister of Burtersett]

Does the Minister accept that there may be resources available to that group but that they are not resources over which they would have control, as they do not provide those young people with any form of independence, as does the contributory ESA?

[Lord Freud]

My Lords, where they have other resources, as they move into young adulthood, clearly they have to be resources of their households at that stage and their own capital and household income. The reality is that very many of this small group of youngsters are inheriting very substantial sums of money; that is why they are in the position that they are in. That is a decision in principle over whether we should support people who have very adequate resources of their own. We will continue to support those who have deteriorating conditions even when they have a high income. They just go back into the support group.

Let me just go into the rather complicated position with European law and the specific judgment here, which I am looking at. I do not know whether the noble Lord, Lord McKenzie, will regard it as recent enough—this is the Lucy Stewart case on 21 July last year. It is within half a year, so I think that is recent. We have a code for soon and sooner or whatever; recent is within half a year. That judgment made it clear that we cannot use the past/present test to deny access to a benefit if a claimant demonstrates a genuine link to the UK in other ways, which may include consideration of the relationship of a claimant and the social security system of the competent member state or claimants’ family circumstances. The past/present test requires that a claimant must be present in Great Britain for 26 weeks out of the last 52 preceding a claim for employment and support allowance. We still lost the case, even though we had lots of powers on residence. Clearly, the view of this Government is that it should be a matter for the Government of this country to decide how people qualify for benefits. The effect of this judgment is that young people can qualify for a benefit even when they have not lived in this country for many years.

I cannot be absolutely hard and fast on the European benefit-shopping issue; I can tell your Lordships only that this is causing us enormous concern at a number of levels and we are currently challenging Commission lawyers on it. The issue, at the simplest level, is that if you can call something social support it is much less likely to be abused and taken abroad than if it is a contributory right. That is where the battleground is and your Lordships can clearly see what we are doing here. When we are asked for a concession and whether we can get round the European law, what we are looking at is a system that basically provides the support for the vast bulk of the youngsters whom we want to support without opening our doors wide to current and future dangers of this kind of benefit exportability. That is the approach that we have adopted to try to get round this problem.

[Baroness Hollis of Heigham]

It is a dilemma. I think that the entire House sympathises with the noble Lord. Many of us have been faced with this dilemma in the past. You are eligible for benefits in the UK if you are ordinarily resident. Much of the protection has been about whether you are allowed to go away for extended periods of holiday and still continue to claim. That is secure, but the problem of contributory benefits is that which flows out of the free movement of labour and, as a result of that free movement, generates you a right to a contributory benefit whichever state you may subsequently live in.

We understand the Minister’s dilemma very well, but I would have thought that there is a route out, which is of course to recategorise this as a special non-contributory benefit. That has a long pedigree in social security and European Union co-ordination of benefits and would therefore take it out of the label “contributory”. It would take it out of the labour market eligibility, because these young people have never been in the labour market. We are trying to apply a label to them that is not appropriate. By relabelling this, perhaps along the lines suggested by the noble Baroness, Lady Meacher, we should in my view be secure.

[Lord Freud]

My Lords, I do not think that we ought to spend a huge amount of time on this—it is really difficult and moving very fast. The principle is that it is the automatic entitlement that makes us vulnerable. If it is for income supplement and social support, it protects us. Your Lordships can see that the change that we have made here is to cover the vast bulk of the youngsters with support, but it is not automatic. That is precisely the safety that we are going into with this European legislation. I do not think that the precise workaround from the noble Baroness, Lady Hollis, works or that we should sit round this Chamber and work something out. All I can tell your Lordships, for your consideration, is that this is the way that we have found to get round it while, as I say, covering 90 per cent of those youngsters.

I ought to hurry along, but let me move to giving your Lordships the figures on Amendment 45. The reduction in the cumulative benefits savings by 2016-17, over five years, would be around £70 million, which we would need to find elsewhere. A little bit here and a little bit there—it is a very hard thing finding bits of money.

[Baroness Lister of Burtersett]

I am sorry to interrupt again but in Grand Committee the cumulative saving during that period was £10 million. Now, suddenly, it is £70 million. Where has the other £60 million been accumulated?

17:15

[Lord Freud]

The figure that is closest to the one in Grand Committee is the one relating to Amendment 46, which I will come to, which is closer to £17 million. This one is £70 million.

Amendment 36A, moved by the noble Earl, Lord Listowel, and the noble Baroness, Lady Meacher, and Amendment 46 would allow new claims to ESA to be made by those claimants who at the end of the assessment phase would be placed in the support group. We understand the purpose of Amendment 36A to be to provide support for Amendment 46. I have already listed the rationale for rejecting Amendment 45, which would remove Clause 52, and that rationale applies to Amendments 36A and 46 as well. In addition, Amendment 46 would have accepted considerable unwanted—

[Lord May of Oxford]

At the risk of exposing my lack of full comprehension of this, I have been listening to the debate and I resonate with the concern that the Minister has expressed about the abuse of this system, but at the same time I have not heard clearly that his resolution of one problem has not created a different and arguably more severe problem that has been emphasised by people who really understand this.

[Lord Freud]

My Lords, we have had a pretty good Socratic debate on the welfare Bill for some time. I hope that I can get over to noble Lords that the move from an automatic payment system, which is what we have for these youngsters, to one based on their income needs will pay them effectively the same amount depending on the position of their disability, will cover 90 per cent of the same people and will leave out the last 10 per cent who have their own means of one kind or another. That is the solution that works best in terms of the European legislation.

[Lord McKenzie of Luton]

Before the Minister sits down, is the ruling in question a concern only in relation to the youth condition that we are discussing today, or does it have a wider implication? If the latter, how are the Government proposing to address that?

[Lord Freud]

My Lords, I am being dragged a long way away from my brief. This is a widespread concern that runs to benefit tourism. We are currently challenging the Commission in the Court on one of its findings and trying to build a constituency with other European countries that are also enormously concerned at the implications of this. As I say, though, the principles are that these automatic payments leave us far more vulnerable than income support in this area.

I know that noble Lords are listening very hard to this, because it is an important concern that we all have. I hope that I have been as clear as I possibly could have been on this issue. It is a moving target and changing all the time. It is not settled at all, so I cannot lay it out absolutely—I can talk only about the risks involved.

[Lord McKenzie of Luton]

I think that we all understand that, but the Minister is praying this EU ruling in aid of his desire to stop the youth condition continuing in future. He has already said that that ruling has much wider implications, and that there will be a wider need to look at how it can be fully addressed. In those circumstances, is it not unfair of him simply to target this particular benefit and say, “This can be dealt with by stopping it”, rather than addressing a wider solution in due course?

[Lord Freud]

My Lords, not really. This is a prime area in which we have automaticity without any payment system. This is one of the areas where we are very vulnerable so it makes enormous sense to look at it now and as it comes up. Therefore, I would not agree with that point. Shall I rattle along?

Amendment 46 would create considerable and unwanted uncertainty for claimants and operational difficulties for the department. A claimant would need to claim ESA and go through the assessment phase without any entitlement to ESA at all until the question of limited capability for work-related activity was determined at their WCA. This is because, under Amendment 46, only claimants who were found to have limited capability for work-related activity at the end of the assessment phase would be entitled to ESA on the grounds of youth. As I have already said, the amendment would save rather less—£17 million until 2016-17. The discrepancy is in the SAR, which is covered by a very similar amendment, to pick up the point of the noble Baroness, Lady Lister.

I confirm that the Government see Amendment 46 as linked to Amendment 36A, but none of the amendments in this group is consequential on any other. We would expect the House to make a decision on each individually. In due course I will move the amendment in my name, Amendment 45A, and I urge noble Lords not to press theirs.

[Baroness Meacher]

I thank the Minister very much for his reply to the various amendments, and many Members of the House for their contributions. What we have here is an attempt to protect the dignity of a very vulnerable group of severely disabled people at a cost of £10 million, which is absolutely paltry. I refer to Amendment 46.

I feel that we are being somewhat sidetracked by the intervention on the European Union. Contributory benefits of all sorts are vulnerable to this situation. I think that the whole House has made it very clear that we are behind the Government’s fight to make sure that benefits tourism is stopped. We do not want to see it happen.

[Lord Freud]

My Lords, can I make it absolutely clear that contributory benefits per se are not vulnerable because they are paid? The vulnerability is in assumed contributory benefits, where they have not been paid.

[Baroness Meacher]

If I may say so, that brings me back to the point that I made earlier. We need to find a way of making it clear that this is a non-contributory benefit for people who, sadly, will never be able to contribute towards a contributory benefit. This is a social benefit for very disadvantaged and disabled people—a very small group of such young people, who will never have a chance, almost certainly in the rest of their lives, of any sense of independence or dignity, unless we give it to them today at a cost of £10 million to the entire tax-paying population of this country. On that basis, I do need to test the opinion of the House. However, I respect the Minister’s position and hope we can have further discussions about how we can prevent benefits tourism, which is completely unacceptable.

17:24

Division 1

Ayes: 260

---

Labour: 174
Crossbench: 65
Bishops: 4
Ulster Unionist Party: 3
Liberal Democrat: 3
Democratic Unionist Party: 1
Independent: 1
Plaid Cymru: 1

Noes: 216

---

Conservative: 141
Liberal Democrat: 60
Crossbench: 10
Independent: 1

17:39

Amendment 37

Moved by

[Lord Freud]

37: Clause 51, page 36, line 33, at end insert “by virtue of the first and second conditions set out in Part 1 of Schedule 1”

Amendment 37 agreed.

Amendment 38

Moved by

[Lord Patel]

38: Clause 51, page 36, line 34, leave out “365 days” and insert “a prescribed number of days which must be at least 730”

[Lord Patel]

My Lords, I shall speak also to Amendments 38A and 39A. These amendments oppose the introduction of a 12-month limit on the amount of time in which those in the work-related activity group, or WRAG, are able to claim contributory employment and support allowance, or ESA.

All the cancer charities, such as Macmillan, the Disability Benefits Consortium and the wider disability sector also oppose the principle of time-limiting ESA. I believe that people with a disability or illness who have paid into the system should be able to receive support for as long as they meet the eligibility criteria for ESA and are unable to work due to their condition.

As I said, Clause 51 amends the Welfare Reform Act 2007 to introduce a 12-month limit on the amount of time that a person in the WRAG is entitled to contributory ESA. The cancer charities, such as Macmillan, along with the rest of the disability sector, strongly oppose the principle of time-limiting. There is already more than enough incentive for people with disabilities and long-term illnesses such as cancer to get back into work. What they need is enough time and the right support. What they do not need is to be penalised for not recovering quickly enough.

The Government are clearly opposed to removing time limiting altogether. Therefore, I understand the need to find a compromise that meets the Government’s priority of finding savings but, crucially, gives disabled and sick people a more realistic timeframe in which to return to work. Evidence supports extending the one-year time limit.

The impact on disabled people of time-limiting ESA will be considerable. The Government’s own figures show that 94 per cent of people in the WRAG will need ESA for longer than 12 months. Those affected, including 7,000 people with cancer, will lose up to £94 a week of vital support, despite having paid national insurance contributions throughout their working lives. The proposal in the Bill is based on the Government’s objective of making savings. However, the Government have provided no evidence to demonstrate that a 12-month time limit is reflective of the amount of time needed by people in the WRAG before returning to work.

The coalition agreement promised to protect the vulnerable from spending cuts. In his party conference speech the Prime Minister, David Cameron, said:

“People who are sick, who are vulnerable, the elderly—I want you to know we will always look after you. That’s the sign of a civilised society and it’s what I believe”.

It cannot be right to take crucial financial support away from people who have paid into the system but are unable to work due to illness.

The Government’s own figures estimate that 94 per cent of people in the WRAG will not be ready to return to work after one year—I repeat: 94 per cent—but the Government have stated that the change will help to encourage people to come off benefits. They have also stated that the proposal is aimed at making savings and is not based on an estimate of what is a reasonable length of time within which to expect people with a disability or illness to be able to return to work. It cannot be right for the Government to propose such a significant policy change without providing evidence that the measure is appropriate or reasonable.

In Committee, the Government were asked to publish evidence to demonstrate that a 12-month time limit reflected the needs of people in the WRAG. I have seen no such evidence. The Government were also asked which organisation of experts they had consulted before making the decision to introduce a time limit for contributory ESA. They have not consulted any of the organisations which have subsequently raised concerns about the impact of this policy. The time limit will be imposed on people who are in the WRAG. Those in the WRAG are people who, following the work capability assessment, have been found not to be fit to work because of their disability or illness. While those in the WRAG are expected to carry out some work-related activities to help them to return to work, they are still considered to be not fit for work. If, following the WCA they had been found to be fit to work, they would be eligible for ESA and placed on jobseeker’s allowance. People in the WRAG could still be severely disabled or debilitated, as is the case with people recovering from aggressive cancer treatment.

17:45

Let me give an example. Martin was diagnosed with primary progressive MS in 2007. He continued to work until November 2009, albeit with difficulty. He cannot walk or stand up. He has incontinence problems and suffers badly from fatigue and muscular weakness in his legs and back. Martin recently received a letter from the DWP outlining how the Government are seeking to change the rules on ESA and to impose a time limit on benefit. He said:

“The real sting in the tail is that the ‘clock’ starts ticking from the date you first ever started receiving the benefit. In my case that is since June 2009—so, some 27 months ago, so in their eyes I am 15 months over the limit! Therefore, my payments would stop immediately once the policy comes into force next year”.

Currently no one is placed in the WRAG indefinitely. Only those who meet the strict eligibility criteria for ESA and are unable to work will be able to continue to receive ESA. People in the WRAG can be called for an assessment at any time and will lose benefit if they are found to be fit for work. The current system works on the basis that people should not receive support for longer than they require it. The Government’s proposals, therefore, will affect only those vulnerable people who are too unwell to work. The vast majority of disabled people want to work if they can and do not need an incentive. Unlike incapacity benefit, the WRAG or ESA are clearly focused on supporting people into work, and receipt of the benefit is conditional on claimants taking agreed steps and activity to move towards work. This can include training, education or condition management. Claimants who are taking the agreed steps to return to work should not be penalised simply because they need longer than one year. Many disabled people will simply not be fit enough to return to work after just one year. For example, people with cancer will often experience side-effects of their condition and treatment, such as severe fatigue or depression, for many months, and in some cases years, even after the treatment has finished.

People with cancer face a range of barriers that impact on their ability to return to work. This House understands that more clearly than anywhere else because many in the House, or their relatives, have experienced what it is like to be on treatment, such as chemotherapy, radiation or post-surgery. People can experience debilitating physical and psychological effects from cancer and its treatment, including severe pain, fatigue, nausea, fever and diarrhoea. The majority get poor advice about the impact of the cancer diagnosis on their working life and on how to manage their condition. They are not routinely offered a range of the back-to-work services that they need, such as counselling, retraining and work-based advocacy. They are less successful in securing workplace adjustments to which they are legally entitled and which help them to return to work. That is probably linked to the fact that just 43 per cent of employers know that people with cancer have legal protection against discrimination.

Stephen Townsend started claiming ESA in March 2011. His partner earns roughly £160 a week. Under the Bill, he will lose his ESA in April 2012. He states:

“I can’t believe the Government is planning to take away all my ESA after just 12 months because my wife works more than 24 hours a week. I had renal cancer and have had a kidney removed. I’m still in a lot of pain. I need to stick to walk and get awful pins and needles down my legs. Without my ESA we would find it really difficult to get by. We have used up virtually all our savings already. I have worked all my life and paid into the system but this doesn’t seem to mean anything”.

A lot of these patients will not just have paid into the system; they will have paid into their pensions, which they will not live to collect.

Under means-testing thresholds, thousands of people will lose their ESA if their partner earns as little as £150 a week. Of the people who will lose out, 51 per cent will be in the lowest-third income centile. The average drop in income will be £52 per week for those who lose out. For those in the lowest-income centile, the figure will be £35 per week. It is a significant amount of money for people who are struggling to make ends meet.

This policy will penalise people who worked before their disability or illness, paid into the system, often for many years, and are doing all they can to return to work. They are not part of the something-for-nothing culture of which the Government have been so critical. The people who will be affected have paid their national insurance contributions. Therefore, it was disappointing when, in a response to the press, an official spokesperson for the Department for Work and Pensions drew a distinction between disabled people and taxpayers.

The Government claim that alternative means of support, such as housing benefit and tax credits, will be available for people who lose their ESA. However, these benefits depend on personal circumstances and many cancer patients will be ineligible. For instance, a couple without children who own their own home will not be eligible for housing benefit and will qualify for tax credit only if the working partner works for more than 30 hours a week, which may not be possible because of their caring commitments.

In 2008, Julian was diagnosed with cancer of the jejunum, which is part of the small intestine. He stated:

“Many people may not be aware that when you have cancer, you tend to feel the cold a lot more—even in the summer months! Especially if you are recovering from an operation or having chemotherapy. Additionally, your body is more susceptible to the cold whilst it is fighting disease.

Due to my illness I am no longer working and am at home during the day, which means that I have the heating on. This has meant that my heating and electricity bills have practically doubled”.

The Government have not made a satisfactory assessment of the likely impact of time-limiting health and social care budgets. For instance, and unbelievably, the impact assessment from the Department for Work and Pensions states that there will be no impact on health and well-being. Unfortunately, it does not provide any detail on how this conclusion was reached. In response to recent Parliamentary Questions, Ministers admitted that no robust assessment had been made of the impact that time-limiting ESA would have on the number of people in poverty, on health and social care budgets, on the demand for benefits advice services such as Citizens Advice and on people with long-term degenerative conditions.

Many of today’s newspapers cover a report that states that for many cancer patients, financial worries are second only to worries about their condition and treatment, and are even more important than the possibility of dying. I have serious concerns about the impact that time limiting will have on the psychological well-being of sick and disabled people who might already be experiencing depression and anxiety. This will also put pressure on mental health services funded by local authorities. In Committee and in answer to PQs, it became clear that the Government had failed to adequately consider the profound impact that the proposal will have on sick and disabled people. Given the clear inadequacy of the Government’s impact assessment, how can they be confident that the change will not have a significant impact on the health and well-being of those who will lose support, and will not simply displace costs to other areas of already stretched local authority health and social care budgets?

Calls for a rethink on the time limit have been widespread. There has been severe criticism of the policy from experts and commentators in the media_. Today’s newspapers are full of it. Liberal Democrats voted to change their party’s policy to oppose an arbitrary time limit on ESA. In Committee, the Government’s case was unconvincing and did not stand up to scrutiny, at least by the Committee Members who attended. Despite assurances from Ministers throughout debates on the Welfare Reform Bill that the Government will improve the WCA for cancer patients in the light of Professor Harrington’s recommendation, the Government are now consulting on proposals that will reduce the protection offered to thousands of cancer patients undergoing treatment. Today’s report by Citizens Advice about the accuracy or reliability of the WCA points out that for 96 per cent of people who are assessed it is inadequate, inappropriate or inaccurate. Instead of extending automatic entitlement to ESA for cancer patients undergoing chemotherapy to other patients receiving equally debilitating treatment, the Government’s proposals would remove automatic entitlement altogether and force all cancer patients, even those on intravenous chemotherapy, no matter how sick they are, to undergo an assessment to prove their eligibility, an assessment that today’s report has found to be totally unreliable and faulty.

This is why leading cancer charities, Macmillan Cancer Support and many others, and oncologists have been unable to support these proposals. Even without this retrograde step for cancer patients, it is widely recognised that the WCA needs significant improvement. Why this change before improving the WCA? Why subject sick and vulnerable patients to a faulty testing mechanism? Instead of taking away support from sick and disabled people who are still unable to work, the Government should be working with disability organisations to design back-to-work programmes that offer personalised support appropriate to customers’ needs.

There are additional concerns about the amendments that ensure that time limits for contributory ESA for those in the WRAG are not applied retrospectively. As it stands, because of the retrospective nature of the proposals in the Bill, anyone placed in the WRAG in April 2011 or before will immediately lose their contribution-based ESA when the proposed legislation comes into effect in April 2012. Those who will not qualify for income-based ESA because of savings or a partner in work will lose £94 a week. I do not believe that the time accrued in the WRAG prior to the proposal coming into effect should contribute to any time-limit period.

The Government had an amendment to protect those with deteriorating conditions, and I welcomed it, but although it addresses the concern of people with deteriorating conditions, it does not go far enough. It is extremely important that a person in the WRAG who has been subject to the ESA time limit of 365 days is able to requalify for the contributory benefit at any time that they are subsequently assessed as eligible for the support group. The Government’s amendment does not address the central concerns about the inadequacy of the 12-month time limit. I beg the Minister to consider this again.

I know the argument will be that in cost terms this is very significant, but I wonder whether there might be other ways of trying to find a compromise, even if it is to see whether a review can be carried out and its results assessed to see whether the 12-month time limit is satisfactory. As I said before, I am sympathetic to cutting the deficit, but I am highly sympathetic to sick and vulnerable people not being subjected to something that will make their lives even more miserable. I beg to move.

18:00

[Lord Low of Dalston]

My Lords, I understand that short speeches are the order of the day so that we may make progress. I shall therefore try to make a short one. I put my name to this amendment because I feel very strongly that the proposal to time limit contributory ESA to one year is one of the most retrograde features of the Bill. At Second Reading, I identified as many as five things wrong with the Government’s position. I will not repeat all those here but I will refer to a sixth, which I did not quite crystallise at Second Reading. The matter was gone into in great detail in Committee, although I was unable to be present. However, I have carefully read the debate twice, most recently through the long watches of last night as I travelled back from Bangkok on an overnight flight with an active two year-old for company.

In any case, the argument emerges most starkly if one sticks to its bald outlines, which have to do with the basic unfairness of the proposal. This was incisively encapsulated by the Disability Benefits Consortium in the words of a woman with Parkinson’s disease. She said,

“There’s no guarantee that I’ll find a job in 12 months. It could take me much longer”.

At this point, one might interpolate, “especially in current economic conditions”.

She continued,

“I’ve worked all my life and paid for decades into the system on the understanding that there will be support if I need it. To be told that all this support could have an arbitrary time limit is both unfair and stressful”.

There are two aspects to this unfairness besides the one which I have just interpolated. First, the condition of sick and disabled people in the WRAG is such that their likelihood of being able to get into work within a year is remote in the extreme, especially in present conditions. As my noble friend Lord Patel has told us, the Government’s figures show that 94 per cent of people in the WRAG need support for longer than a year and a DWP research report entitled Routes onto Employment and Support Allowance, which was published last September, revealed that, despite its name, after 18 months, only 9 per cent of claimants who had previously been out of work on incapacity benefit had found work and still only 25 per cent of those who had entered ESA from work had found new employment. In these circumstances, as the lady quoted by the Disability Benefits Consortium said, to limit ESA to just one year is both arbitrary and unfair. It is in no way evidence-based and is simply cost-driven. The DWP estimates that by 2015-16, 700,000 people will lose their entitlement, of which 280,000 will lose it entirely, which will mean a loss of £94.25 a week.

The second unfairness resides in the breach of the contributory principle that the noble Baroness, Lady Lister, was so concerned about in Committee; that is, the breach of faith of citizens who have paid their national insurance contributions perhaps for 30 or 40 years in the belief that the support would be there if needed. A correspondent who wrote to me said:

“I believe it is totally wrong that people who have worked and paid tax plus national insurance for many years—36 in my case—should have their entitlement to state support time limited in this manner. It seems that the state is breaking its side of the contract at a time when people are most vulnerable”.

The Minister dismissed this in Committee. He said that national insurance contributions were to cover a wide range of contingencies, including the state pension and the NHS. He argued that a year was a reasonable amount of support to give someone when they got into difficulty. In a letter dated 10 January 2012 addressed to Cross-Bench Peers, to which my noble friend Lord Patel has referred, the Minister said that it strikes a reasonable balance between the needs of sick and disabled people claiming benefit and those who have to contribute towards the cost. But you might as well say that it was enough to give someone a pension for, say, three years to help them with the adjustment to retirement, after which they are on their own. Perhaps that will come to be the Government’s position: who knows? Anything is possible. Who would have thought that we would be reducing ESA support for which people have been contributing all their working lives to just one year?

Finally, I come to my sixth point, which I failed to develop at Second Reading. Ministers are constantly pointing to the unprecedented amount of support that they are putting in place to help people back or in to work. Only last night a statement was read out on the radio from a DWP spokesperson, which said:

“We are absolutely committed to supporting more disabled people into work. That is why this Government has protected the budget for specialist disability employment services. Aside from our disability employment advisers, we also have specialist teams at Jobcentre Plus who actively work with businesses to encourage them to interview disabled people with the right skills. Work Choice is expected to support more disabled people into employment each year than any of its predecessor government programmes”.

As regards specialist teams, Ministers have little idea of the reality. No Minister could go on the programme and this statement was read out in response to a blind woman—an able person with a lifetime of successful, professional employment, who had been made redundant last May. She told a woeful tale of the poor advice and lack of support that she had received. She received none of the interviews or training that had been promised. She is very eager to find a new job but few, if any, openings have been drawn to her attention. Despite repeated requests, no information has been provided in an accessible form. Her adviser seemed to have had little training. I know the woman concerned and on one occasion she told me that she felt she could do the adviser’s job better than the adviser.

The Work Programme is not working. In these circumstances it is not only unfair but downright cruel to time-limit contributory ESA to one year. At present it is unlimited. To reduce the level of support to just one year at a stroke is draconian in the extreme. I would drop Clause 51 entirely but I am a realist and recognise that, to have any prospect of success, compromise will be necessary. The amendment proposed by my noble friend Lord Patel is surely the least one could make to ameliorate the draconian nature of the Government’s proposal. I very much hope, too, that in the light of their conference’s decision to oppose the time-limiting of contributory ESA last September, Liberal Democrat colleagues will search their consciences and also give my noble friend’s amendment their support.

[Baroness Hollins]

My Lords, local health charities and services are also very concerned about the impact of time-limiting ESA. They are well aware of how difficult it is for people with severe and enduring mental illness to obtain and to sustain employment, especially at a time of deficit. My postbag is full of angry letters. One correspondent wrote to say that her brother took his own life largely due to difficulties in his working environment. She wrote:

“I personally have only ever managed a very chequered career due to living with complex mental health conditions and welcome any effort on the part of our Government to encourage a mental-health friendly workplace and specialist schemes to support people with mental health conditions into work, but”—

and here is the rub—

“on a voluntary basis because I am deeply concerned that any system built on a backdrop of conditionality, sanctions and time limits will prove to be totally counterproductive, leading to fear, anger and disengagement”.

I could speak at great length about some of the many issues that have been raised with me and I support this amendment.

[Baroness Thomas of Winchester]

My Lords, the time-limiting of ESA is one of the most emotive issues in the Bill, as we have heard. As the noble Lord, Lord Low, said, people affected by severe illness in their working lives who have paid national insurance for many years expect to be protected by the state.

As I said in Grand Committee, by bringing in this change in policy, the Government are acting like a private insurance company that changes the rules when a person makes a claim. However, as we know, the comforting words “national insurance” are really a myth, as many are about to find out when those in the WRAG who have been receiving ESA for a year by this April will have their money stopped immediately. Of course, some will go straight on to income-based ESA, but according to the impact assessment, about 40 per cent will find their income dropping by a staggering £90 a week if they have modest savings or a partner earning only about £148 a week.

The key question is whether it is fair to cut the benefits of those too ill to work, in this time of austerity, when the highest spending department in Whitehall has to take its share of deep cuts in expenditure. As we know, the change to universal credit, which we discussed at the beginning of the Bill, is going to be very expensive initially before savings will be made. Presumably the Treasury demanded this measure as a quid pro quo for finding the money to pay for universal credit.

What troubles many people, and certainly troubled the Lib Dem conference last year, is the arbitrary nature of the one-year cut-off. As we have heard, the DWP’s own figures show that 94 per cent of longer-term claimants were on ESA for more than a year. The many briefings that we have all received tell us that most people with severe but not necessarily rapidly deteriorating conditions struggle to be well enough after a year. I welcome the Government’s amendment, which would mean that those with deteriorating conditions will have a reassessment with a view to them migrating from the WRAG to the support group after a year.

What about the others? Will everyone be entitled to ask for a reassessment at the end of the year or only those with deteriorating conditions? For example, what about people who have had quite severe strokes? Their condition may not be deteriorating but they may be a very long way from the jobs market although that will be their eventual destination. If reassessments are to be allowed, at what point will people be asked to be reassessed? If it is too near the one-year cut-off point, I can envisage such a backlog that it may be many months before the reassessment is carried out.

Is the answer Amendment 38 tabled by the noble Lord, Lord Patel, to allow two years in the WRAG instead of one—another arbitrary time limit? I understand that this would be prohibitively expensive. The figure of £1 billion over the next few years has been mentioned. If this amendment is successful, the House of Commons will almost certainly claim financial privilege, which will mean that this House cannot even debate it again. A vote for Amendment 38 might lead to ping-pong, if it were to be won, but only to ping, not to pong. It would therefore be a merely Pyrrhic victory as the amendment would not go any further.

The work capability assessment is at the heart of this debate, and Professor Harrington’s reviews of it are most welcome and instructive. He advises patience, saying that the changes he has asked for and which the Government have accepted are taking time to bed down. I quite understand that, which is why I am so opposed to what I still wish to call the retrospective nature of this part of the Bill, even if strictly speaking it is not retrospective as it is not actually clawing money back from people. However, stopping someone’s claim the minute the ink is dry on the statute book, having warned them in a round robin letter, is pretty sharp practice. The Government maintain that people have been given enough notice of the April 2012 cut-off date because they could have read about the proposal in the small print of the comprehensive spending review in October 2010. How incredible is that?

18:15

If the Government were to wait, even if only for six months rather than a year, it might give Professor Harrington’s recommendations for improving the WCA a chance of being implemented consistently around the country; if six months would be too expensive, what about three months? I am sorry that the Government are including the 13-week assessment phase in the year because that is paid at the lower JSA rate rather than the WRAG rate. If they ignored this phase, it would at least give people 15 months instead of 12 months, and again those three months could be useful in concentrating minds on improving the work capability assessment. As the noble Lord, Lord Patel, said, we have all received the CAB report, which is pretty damning about the work capability assessment right now.

One of Professor Harrington’s recommendations is that DWP decision-makers should look independently at the Atos Healthcare assessments, in particular the person’s medical reports, and then make their own minds up; in other words, they should not just rubber-stamp the Atos recommendation. I wonder whether that now happens routinely across the country and whether and how it is being monitored. The Government should pull out all the stops as a matter of urgency to make sure that the Harrington review proposals are being implemented in full throughout the country as the payback for bringing in this policy so soon. Does my noble friend the Minister know whether this is happening?

I believe that the number of appeals about the WCA is beginning to drop, but I fear that there will be many more appeals when this policy is brought in from people wanting to migrate from the WRAG to the support group. Even the impact assessment reckons that 50 per cent of those affected by time-limiting will appeal, of which 20 per cent might be successful.

Many of us are uneasy about the whole policy because of the unintended consequences that we expect to flow. Low-paid partners may be tempted to give up work so that means-tested ESA can be claimed, while the category with the highest claimants—those with mental health conditions—could give up in complete despair. Those with modest savings will wonder why they are being penalised if they are saving for care in their old age. However, I reiterate that voting for Amendment 38 might make us all feel better but it could be seen as a rather cynical move because we know that it will not stick and it might be reported as a great victory. I would rather vote for a more modest amendment such as Amendment 40A, which leaves out the assessment phase, which has more of a chance of success. However, I shall listen to my noble friend’s winding-up speech with great care.

[Baroness Lister of Burtersett]

My Lords, I want to make a very brief point in support of the amendments. The Government say that time-limiting ESA is not based on an estimate of a typical recovery time—it is not evidence-based—but on the principle that these are people who have other means of financial support, which of course is exactly the same principle that the Minister raised earlier to justify removing the ESA youth condition.

This other support is of course income-related ESA, and the Government point out that 60 per cent of people affected will be able to claim it. That means that 40 per cent of those affected—roughly one-third of men and nearly half of women—will not be able to. We are talking here about an erosion of their financial autonomy. Many noble Lords have received many letters from people saying that they are shocked and anxious at the implications of this.

An article in today’s Guardian summed up very well what this erosion of financial autonomy means. This quotation is from a man who is going to be affected by this:

“The satisfaction of being able to contribute to the family budget with a benefit that has been earned and paid for will be removed. The last shred of dignity will be stripped from people who have already lost a great deal in life and who may already feel a burden on those who care for them”.

Disabled people should never feel that they are a burden on those who care for them, and it is terrible that they are being made to feel that way by this clause.

[Baroness Hollis of Heigham]

I shall be very brief and respond, if I may, to the noble Baroness, Lady Thomas of Winchester, who over the years has been a doughty champion for disabled people. However, I have never before heard her make a speech based on the sole proposition that because the House of Commons might reject an amendment, it should not be moved in this House. That is not a sound base for policy, as the noble Baroness will accept. That does not mean to say that at Third Reading there may not be compromise or fallback amendments and so on, but this House has never walked away from its proper duty to scrutinise because it feels that the other place may not accept what we are doing. I hope that the noble Baroness will not run up that sort of argument again.

[Baroness Thomas of Winchester]

My Lords, I shall respond to that. What I said was that noble Lords may think that we will go into ping-pong: that the House of Commons will say one thing and we can come back to the debate and have a dialogue. That does not happen with financial privilege. There are many new Peers in the House who will not realise that financial privilege is imposed by the Commons, which it may be—it may not, but it probably will be because this is going to cost around £1 billion over the next few years. People outside will be given a false sense that we have done something and scored a great victory by defeating the Government and so everything will be all right. No, it will not be. That is what worries me. This is not like ordinary ping-pong; it is quite different.

[Baroness Hollis of Heigham]

My Lords, almost everything passed in this House has financial implications. The House of Commons is entitled to and regularly will dismiss every amendment passed in this House under financial privilege. There is nothing new in that. We do indeed then go into ping-pong because this House will offer an alternative amendment for the House of Commons to consider. Should we reach that situation, some of the fallback amendments mentioned by the noble Baroness could then be considered.

[Lord Blencathra]

My Lords, it is with some trepidation that I intervene briefly in this debate in view of the learned comments that one has heard from both sides. I seldom contribute to debates of this nature because it is outside my areas of expertise, but I am prompted to do so as the result of a speech made yesterday. I heard the leader of the Opposition say that,

“in these times, with less money, spending more on one thing means finding the money from somewhere else”.

He went on to say that:

“When someone wins, someone else loses”.

I have looked briefly at the amendments before your Lordships’ House today and I had not intended to say anything on them because I knew that they had considerable spending implications, but I am tempted to speak out because of what the leader of the Opposition said yesterday.

The noble Lord, Lord Patel, has made a powerful and compelling speech, and it would be easy for me and no doubt for other noble Lords to vote for his amendment and feel morally good. But the sting lay at the tail end of his remarks when he said, I think, “Of course, this could have some enormous cost implications”, and then he came up with not what I would say is a formula but a suggestion, which I must admit I did not quite understand, about how one could try to save on some of those considerable costs. However, I am informed that his amendment as it stands has serious cost implications. I believe that it would cost up to £200 million next year, maybe £400 million the year after and again the year after that. I hope that my noble friend the Minister has the correct figures, but I believe that it will be around £1 billion of expenditure over the next three years. The House needs to know exactly what those figures are.

Perhaps I may turn to the Opposition and say this. If the Opposition are tempted to support this amendment —I hope that I am not being too political here—I hope, in view of what the leader of the Opposition said yesterday, that they will spell out where the money is to come from. At this stage I am not concerned about whether the Commons will reject the amendment or whether there will be ping-pong, although that is a valid debate to have in due course, but it is incumbent on the Opposition or on those who are arguing for this amendment to say where the £1 billion, if indeed it is £1 billion, is to come from. Is to come from higher taxation or from a cut in public spending somewhere else? Is it to come from increased government borrowing? Someone somewhere will have to pay for this.

[Lord Boswell of Aynho]

I am most grateful to my noble friend for allowing me to intervene. Having listened to the debate this afternoon, does he not acknowledge that whereas the previous amendment, which was supported by noble Lords, was in comparative terms a relatively small matter of cost, this is of a different level and magnitude of costs—at least 10 times as great? Whatever might have been said about the previous amendment being comparatively trivial, this could not be possibly be so described.

[Lord Blencathra]

My noble friend is correct. The last amendment would cost around £70 million, and no doubt the Government will say that that is going to hurt and that the money will have to come from somewhere. But if the costs of this amendment are £700 million, £800 million or £1 billion, as I have read somewhere, we need to know that before we go into the Lobbies in support of the powerful speech made by the noble Lord, Lord Patel, in which he spelt out some of the difficulties that a large number of people will face if this cut is made.

I conclude with these remarks. It is easy to feel morally good because we have done something to help those who will be affected, but we have to bear in mind the others who will lose £1 billion of expenditure, or wherever that £1 billion will come from.

[Lord Wigley]

My Lords, we went into this matter in considerable detail in Committee and the Minister withstood the pressure at that point on the basis of it being so expensive. Perhaps I may repeat the point made from several different directions in Committee. If it is indeed £200 million plus £400 million plus £400 million, that is money that is coming off vulnerable disabled people. There are other priorities which I believe are not as pressing as the needs of these people.

It has been said that some will lose £90-odd a week. That is a considerable amount of money for those who are dependent on help such as this. If they are indeed fit to work and can hold down a job, they would earn considerably more than that, so there is an incentive to go to work, but the disability itself might well prevent them being able to take up opportunities, and indeed the psychological effect of the uncertainty of waiting out the 12-month period might add to the lesser likelihood of their being able to work. In a civilised society it is not the disabled people at the end of the queue who should be bailing out successive Governments for the economic mess that we are in. If we need to share it out, as the noble Lord said a moment ago, there is such a thing as taxation, which shares out the burden more equally. Why put the burden on the shoulders of the most vulnerable in our society?

[Lord May of Oxford]

My Lords, I suspect that others might share my feeling that in some of the last exchanges the discussion has taken on a curious additional aspect. The exchange about whether whatever we do will ultimately be nullified by the Parliament Act speaks to me not as an argument for doing one thing or another but in support of the distinctive character of this Chamber. Particularly from the Cross Benches, the Chamber brings to debates that in the lower House would be basically political in nature a degree of expertise and knowledge of the impact on the ground of the things that we do. That is often missing, particularly in the upper chambers of parliaments in other countries with which I am familiar. I shall mention the acquaintance with uncomfortable facts, and again we have here an echo of what we heard a moment ago.

I have every sympathy for the Minister, who has quite properly to tackle questions of fiscal responsibility. At the same time, powerful points are being made about individuals and how this is going to play out in the system by people who really know it. That is something distinctive which we add to the debate, and I hope that it is taken into account when things go back to the Commons.

[Lord McKenzie of Luton]

My Lords, we support each of the amendments tabled in the name of the noble Lord, Lord Patel. As we have heard, the first would amend the Bill’s 365-day limit on the contributory employment and support allowance and proposes to replace that with an order-making power for setting a limit, but with the proviso that it should be not less than two years. The proposal that any limit should be set by order opens up the opportunity, sadly missed in the Government’s formulation, for any time limit to be evidence based. The 365-day limit currently in the Bill is supported by scant evidence, apart from some references to “international practice”, which did not bear scrutiny in Committee.

18:30

What the Government are proposing is fundamentally unfair. The unfairness is compounded by issues to which we will come later; for example, the inclusion of the assessment phase in the time and the counting-in of contributory benefits already received when the legislation enters into force.

As the noble Lord, Lord Patel, said, to be entitled to employment and support allowance, an individual must be assessed as having limited capability for work and/or limited capability for work-related activity; that is, they are not fit for work. Contributory ESA is a non-means-tested benefit and is earned by having a national insurance contribution record, some of which requires payment and some of which is credited in. It demonstrates a recent attachment to the labour market, but the long-standing principle underlying it is that people pay contributions on the basis that, if they fall out of work through ill health or disability, they have a degree of financial protection. Some may pay in throughout their working lives and may never have to draw on it; some may pay in for just a few years and need recourse to the benefit for an extensive period. That is what social insurance is all about.

But we should be clear: being in receipt of a contributory benefit does not amount to having a life on benefits. The benefit is payable only for so long as somebody is unfit for work. We have accepted with some reluctance that a time limit could be imposed on contributory ESA, but it would have reasonably to reflect a time period sufficient to enable people to overcome their illness or disability and to access employment. A minimum of two years is to an extent still arbitrary, but there is no doubt that it is a more realistic timeframe within which to expect a return to work. However, an evidence-based process rather than an arbitrary figure should be locked into primary legislation.

Why will the Government not at least agree to remove the 365-day limit from the primary legislation? They have prayed in aid international comparisons for the one-year restriction, but even cursory probing in Committee, particularly by my noble friend Lady Hollis, demonstrated this to be a trifle flimsy. Our Library was unable to access any meaningful international analysis. Comparisons are made with the JSA regime and the fact that contributory JSA lasts only for six months, but JSA is a regime applicable to those deemed fit for work—that is, work ready. Let us be clear: to be eligible for ESA, a person must be assessed as having limited capability for work. That is defined in the Welfare Reform Act 2007 as being where a person’s,

“capability for work is limited by his physical or mental condition, and … the limitation is such that it is not reasonable to require him to work”.

Of course, it is expected that people who are able should take every opportunity to move closer to the labour market, but any suggestion that the one-year time limit will act as a spur to force people towards work by making them poorer seems particularly pernicious. We and the Government know full well that many people in the WRAG will not be able to access work within a year.

The Government propose to do this irrespective of the particular health circumstances of an individual and in the knowledge that the prognosis for many people is that they will not be fit for work within 12 months. Indeed, they know full well that the data indicate the contrary. As we have heard, some 94 per cent of contributory ESA claimants have a claim which will last longer than one year. An analysis of the Pathways programme showed that, for 2008-09, only some 13 per cent of those who started the programme found work within one year. Perhaps the Minister would let us know the expected job conversion rates in the Work Programme for those entering from the WRAG.

The Government seem almost to be seeking to undermine the WCA and WRAG designations by bringing further policy levers to bear to push people back to work. There is the implication that it is somehow easy to be assessed as eligible for the WRAG. Pretty much all the evidence, as we know and have debated often, points in the other direction. Despite some improvements on Harrington, the volume of successful appeals against exclusion from the WRAG remains high.

The Government offer in mitigation the availability of income-related employment and support allowance without time limits, which will certainly help some, but the thresholds, as we have heard, are low—household income of £7,500 or capital of £16,000—and will preclude many from benefiting. We have heard about the numbers affected—100,000 people losing their benefit overnight and, overall, some 700,000 people. Income losses will amount on average to £36 per week.

We are told that time limiting ESA will save some £1.3 billion a year by 2016 and that our amendments are unaffordable, but we should challenge this. If we are to be denied the opportunity to amend anything which the Government have cut, what purpose do we serve here? Of course the Government have to tackle the deficit and of course this is not easy, but it is for the Government to justify why this particular burden should be borne in this particular way. On their own impact assessment, of those who lose out from these proposals, more than half fall within the bottom three income deciles. Those in the lowest income decile lose on average £35 a week. What definition of fairness allows this to happen?

Amendment 38A, which I hope is more palatable to the noble Baroness, Lady Thomas, because of its cost implications, is more narrowly focused. It would remove time limiting in its entirety from those undergoing treatment for cancer or those who are in the WRAG as a consequence of being diagnosed with cancer. We heard in Committee and again today powerful testament about the range of barriers faced by people with cancer and its impact on their ability to return to work. They are not the only ones in this position, but we should take this opportunity today to secure greater justice where we can, even if this cannot be delivered for all. Supporting these amendments would not deny the Government a contribution to the government deficit; supporting these amendments would not give people a life on benefits; but it would give them a better chance to overcome the barriers which prevent them doing what they overwhelmingly want to do; that is, access the labour market with all the benefits that this can bring.

[Lord Strasburger]

My Lords, I fully support the Government’s efforts to address the huge deficit which they inherited. However, my noble friend the Minister needs to explain why I should support this attempt to penalise some of the most vulnerable and disadvantaged people in our society for the greed of the financial services industry and the incompetence of the regulators. Do these sick and disabled people have the broadest shoulders, which we keep hearing about, to carry the burden of the cuts?

[Lord Freud]

My Lords, before we consider this group of amendments, it is important to remember the context within which they are proposed. I remind noble Lords that our proposal to time-limit ESA applies only to contributory ESA claimants in the work-related activity group, or WRAG. Those in the support group and those claiming income-related ESA are unaffected by the proposals.

We will always provide a safety net for those who have limited income, and people will still be able to claim income-related ESA subject to meeting the conditions of entitlement, including an assessment of means. In addition, other benefits such as housing benefit and council tax benefit will be available. However, it is only right that those claimants in the work-related activity group who are above the income threshold for income-related ESA should have their contributory benefit time-limited in a similar way to contributory JSA.

Amendment 38, tabled by the noble Lords, Lord Patel, Lord McKenzie and Lord Low, and the noble Baroness, Lady Hollins, requires the time limit for claimants receiving contributory ESA in the WRAG to be a minimum of 730 days and to be prescribed in regulations. Amendment 39A, tabled by the noble Lords, Lord Patel and Lord McKenzie, is designed to have the same effect for claimants whose ESA youth awards are time-limited.

We understand noble Lords’ concern about the proposal to introduce a time limit of 365 days for these claimants and the reasoning behind their request for the limit to be a minimum of 730 days. However, as I said in Grand Committee, the 365-day time limit is not an arbitrary one. It is similar to the limits applied in several countries overseas and around the world, including France, Ireland and Spain, and strikes a reasonable balance between the needs of sick and disabled people claiming benefit and those who have to contribute towards the cost. We strongly believe that a time limit of one year is the correct approach for a number of reasons. It strikes the right balance between restricting access to contributory benefits and allowing those with longer-term illnesses to adjust to their health condition and surrounding circumstances, and it is double the length of time allowed for contributory JSA in recognition of that fact.

There is also a very strong financial argument. As requested, I shall give my noble friend the figures on the costs. The total costs in this SR period are £1.1 billion —next year it is £270 million, then £420 million, and then another £420 million—and then £360 million, and then £140 million in 2016-17. Over the full five years it will be £1.6 billion, including £1.1 billion in this SR. It is a very large sum.

The noble Lord, Lord McKenzie, said that Governments have to justify reductions, and clearly reductions are difficult. However, when he proposes reducing our cuts by £1.6 billion over five years, he should consider that he also supported the move late last year on the social sector size criteria, which will cost £700 million in the SR period and £1.5 billion over five years. He is already up, over five years, to above £3 billion in reductions in cuts. The opposition Benches have also voted for or supported universal credit changes in excess of £600 million a year on an annualised basis once the system is introduced. These are huge figures which we will have to find elsewhere. Before one starts making such reductions, one has to ask: where are the alternatives? Where will we find these sums? That is why it has been such a difficult process for the Government to find ways of reducing the deficit while causing the minimum difficulties possible. Clearly, one makes the cuts where there is the most expenditure, but the expenditure has been provided to those who are the most deserving. That is the natural structure of it. That is why it is so difficult to do this.

The effect of Amendment 38A would be that no time limit is applied to contributory ESA for those claimants receiving treatment for cancer or where they are receiving benefit because of a diagnosis of cancer. Another effect of the amendment would be to extend the 12-month time limit for claimants in the WRAG if they are either having cancer treatment or their limited capability for work is caused by the effects of their cancer. I understand noble Lords’ concerns in tabling the amendment and can confirm that at present around two-thirds of those with a primary diagnosis of cancer who complete their WCA are placed in a support group. This means that they would not be affected by time-limiting.

We want to make sure that the system is as accurate as possible and that is why we asked Professor Harrington to carry out his review.

18:45

[Baroness Morgan of Drefelin]

The Minister referred to the position of two-thirds of cancer patients. Is that before or after the changes coming from the Harrington review with regard to intravenous chemotherapy versus oral chemotherapy and the automatic move of patients into the support group?

[Lord Freud]

The figure that I quoted is the existing one. I shall come straight on to the cancer issue because it is clearly of great importance. On the basis of the Harrington recommendations, the figure is expected to go up by about 10 per cent on the existing figure on our modelling basis.

There is a great deal of misinformation about the position and I shall try to pull out some of the main issues on cancer. First, the Guardian printed a letter from Professor Harrington in which he said:

“I believe the government’s proposals would significantly improve on the current system and would be of considerable benefit to those who face the real personal challenge of a cancer diagnosis and subsequent treatment”.

He went on to say:

“The government’s proposals have been developed as a result of evidence submitted to me by Macmillan and discussions with cancer specialists. The proposals would considerably increase the number of people who receive unconditional support in the benefits system. They would also reduce, not increase, the number of face-to-face assessments that individuals suffering from cancer would undergo. The proposals are underpinned by a presumption that people undergoing cancer treatment will be entitled to the benefit if they have the necessary supporting evidence. They widen the scope of the people this applies to, while also allowing people who want to work to do so. This will mean better provision all round. Delays in these proposals may ultimately affect individuals and their quality of life”.

We have now published the Macmillan evidence, which I hope is available and of great interest to noble Lords. What is interesting about the evidence is how many professional oncologists support this approach. I have a few quotes here which I would like to share with the House. The first states:

“Not all patients will experience toxicity related to treatment … Not all patients should be exempt”.

The next states that,

“some people on long-term maintenance treatments may have little or no upset and be quite able to work”,

and so on. That evidence is available to noble Lords.

As to where we are on the important issue of cancer, we are now carrying out a consultation with the industry. That will be ready in March, when we will pick up the responses and apply them. The noble Lord, Lord Patel, may take some comfort from the fact that there is now a major process going on as we consider this issue, and he would be right to take such comfort.

On the point raised by my noble friend Lady Thomas on the WCA, we are absolutely committed to making it as effective as possible. It is beginning to move quite quickly now in the right direction. We have taken forward all of Harrington’s recommendations from year one, which means that decision-makers are better supported and have received new training, and all the ATOS reports now have a justification. Professor Harrington has praised the improvements that he has seen so far.

The other point raised by the noble Lord, Lord Patel, was—

[Baroness Finlay of Llandaff]

Before the Minister moves on, I wonder if I could ask for some clarification. When he talked about the evidence from oncology, he implied that patients would have to be not working for two years. I do not see anything in any of the proposed amendments that stops people going back to work as soon as they want to go back to work. Indeed, one hopes that many people will get back to work, perhaps on a part-time basis or whatever, within months of having their treatment, but the purpose of the amendments is not to force those who are so debilitated post-treatment or during treatment, particularly with fatigue that can go on for weeks or months before it improves, and not to make them subject to a guillotine coming down at the end of the year. Can the Minister clarify that there is nothing in the amendments that stops people going back to work as quickly as they want to?

[Lord Freud]

Clearly, there is nothing in any amendment or proposal to stop people going back to work should they wish to go back to work, but we are talking about the expectations that there are between the citizen and the state. That is a really important psychological relationship between the two, and that is what we are talking about rather than anything else.

I pick up the point made by the noble Lord, Lord Patel, when he quoted Citizens Advice. We were disappointed by what it said, not because it said stuff that we did not like to read but because it was based on the evidence of 37 work capability assessments when there were more than 600,000 completed in the year to May 2011. That report also relied solely on Citizens Advice’s own interpretation of the healthcare professional’s report and did not allow the HCP the opportunity to explain the reasoning.

Our view and policy is that the right way to address cancer diagnosis and treatment is by ensuring that the WCA provides an accurate and effective dividing line between the support group and the work-related activity group. We want the WCA to consider and assess fully the effects on an individual from both their cancer and the treatment they are receiving for that cancer. As I said, sufferers will be entitled to any income-related ESA.

I pick up the point raised by the noble Lord, Lord Wigley, on the burden on those who can least afford it, because some quite simplistic numbers are flying around here. We have said that income-related ESA will be available to those with the lowest incomes. I accept that if an ESA claimant’s partner has earnings of £152.70 a week, no income-related ESA will be available, but that does not mean that the couple will be £94.25 a week worse off when the contributory ESA is withdrawn. I give an example of why that is not the case. A couple with a rent of £100 a week and council tax of £25 a week, one with the earnings of £152-odd and the other with a contributory ESA of £94, will have a total income of £291 before ESA is withdrawn and £277 afterwards. The main reason is that housing benefit and council tax rise substantially. So there is less income but there are not these very dramatic changes when you go through the actual sums—

[Lord Strasburger]

Do the same figures apply to a couple who own their own property?

[Lord Freud]

My Lords, as noble Lords know, we have two systems of housing support. We have housing benefit for those who rent their property and support for mortgage interest for those who need support with their mortgage payments. Currently mortgage payments are running rather lower than benefit, but that is only because mortgage rates are lower and that can change. We are looking at the whole system of support for mortgage interest, but there is a system in place to support people whether they are home owners or payers of rent.

On the basis of what I have said, I hope that the noble Lord will feel able to withdraw his amendment. Before I ask that he do so, I confirm that the Government see Amendment 39A as linked to Amendment 38, but that none in this group is consequential on another, and we would expect the House to make a decision on each individually.

[Lord Patel]

I thank the noble Lord for his response. I could pick up on each of the points that have been made and answer them, but the time does not allow that. I have to say to the noble Lord, Lord Blencathra, that we are talking here about the level of savings from welfare reform. We are not talking about the Government finding extra expenditure; it is the reduction in savings that we are talking about. The total reduction in saving of the whole welfare reform package will be in the region of £18 billion. We are talking here about not taking money away over five years even to the level of £1.3 billion from the most vulnerable in society. As I pointed out, they are those on the lowest third centile of income, to whom, as the noble Lord, Lord Wigley, said, it is £94 a week. If we are going to rob the poor to pay the rich, we are entering into a different form of morality. The noble Lord asked the question whether it is moral. I say that it is moral to look after those that are sick, vulnerable and poor. If that is immoral, what is moral is to pay the rich—and we are on a different planet altogether.

I come to the figures quoted. The figures are based on the assumption that no one goes back to work until they reach 24 hours. If you speak to cancer patients, you find out that their greatest desire is to go back to work, because it is part of therapy. Noble Lords should read the powerful article written by a very bold and courageous lady called Jenni Russell, which says:

“Not skiving, minister, just suffering cancer”.

She describes what it felt like to have treatment for breast cancer. If you speak to patients on chemotherapy—and my noble friend Lady Finlay sees them every day—they feel good after four days of misery following chemotherapy. By the time they feel better it is time for another period of misery. The effect is cumulative to the point that after a few courses they cannot get out of bed and they wonder whether death might not be better than the disease. It is those people that we are talking about. They are not skivers or benefit cheats. They are the last people who cheat. Are we going to make savings there? I was honest in accepting that what I proposed was costly, but I am not going to be dishonest and say that therefore we should let those people suffer. I ask the House to determine who should be supported.

19:00

Division 2

Ayes: 234

---

Labour: 162
Crossbench: 53
Bishops: 3
Liberal Democrat: 2
Ulster Unionist Party: 2
Democratic Unionist Party: 1
Independent: 1
Plaid Cymru: 1

Noes: 186

---

Conservative: 132
Liberal Democrat: 49
Crossbench: 2
Independent: 1

19:13

Amendment 38A

Moved by

[Lord Patel]

38A: Clause 51, page 36, line 36, at end insert “except—
(a) where a person is receiving treatment for cancer when entitlement shall continue for so long as the person has (or is treated as having) limited capacity for work; or(b) the person has (or is treated as having) limited capacity for work as a consequence of a cancer diagnosis.”

[Lord Patel]

My Lords, Amendment 38A is specific to cancer patients. I have already spoken enough about the suffering of cancer patients and why they require extra time to recover. I have already referred to the article in the Sunday Times, in which a lady who experienced this describes very fully how debilitating it is. The amendment is merely to say that those cancer patients who are currently undergoing treatment, whether it be chemotherapy or radiotherapy, or who have recently finished treatment and are recovering from it but need that extra bit of time, should be supported. This is a small number of cancer patients; there are not many because most of them have recovered within a year. I beg to move.

19:14

Division 3

Ayes: 222

---

Labour: 159
Crossbench: 44
Liberal Democrat: 4
Bishops: 2
Ulster Unionist Party: 2
Democratic Unionist Party: 1
Independent: 1
Plaid Cymru: 1

Noes: 166

---

Conservative: 122
Liberal Democrat: 41
Crossbench: 2

19:31

Amendment 39

Moved by

[Lord Freud]

39: Clause 51, page 37, line 4, at end insert—
“(2A) The period for which a person is entitled to a contributory allowance by virtue of the third condition set out in Part 1 of Schedule 1 (youth) shall not exceed 365 days.”

Amendment 39A (to Amendment 39)

Moved by

[Lord Patel]

39A: Clause 51, line 4, leave out “365 days” and insert “a prescribed number of days which must be at least 730”

Amendment 39A agreed.

Amendment 39, as amended, agreed.

Consideration on Report adjourned until not before 8.32 pm.

EU: Healthcare

Wednesday 11th January 2012 Lords Chamber

Question for Short Debate

19:32

Asked By

[Lord Kakkar]

To ask Her Majesty’s Government what assessment they have made of the impact of the European Union on healthcare in the United Kingdom.

[Lord Kakkar]

My Lords, I am very grateful for the opportunity to introduce this Question for Short Debate on the impact of the European Union on the delivery of healthcare in the United Kingdom—a subject on which I have spoken in your Lordships' House on a number of previous occasions. In doing so, I wish to draw noble Lords’ attention to my entry in the register of interests as a practising surgeon, professor of surgery at University College and active biomedical researcher. I would also like to take this opportunity to thank those noble Lords who have kindly added their names to the speakers list and who will make a contribution to this short, time-limited debate.

The impact of European Union directives and regulation on the delivery of healthcare in our country is an important issue. It is not primarily an issue of politics but of the well-being and safety of patients in our healthcare system. If there have been unintended consequences of the adoption of regulation and directives into domestic legislation, it is important for Governments to recognise this and ensure that appropriate measures are taken to overcome them.

We can consider the impact of legislation from Europe on the delivery of healthcare in our country in three broad areas. The first is directives and regulation that have already been incorporated into the laws of our country. The second concerns how directives and regulation that are under consideration should be incorporated into domestic legislation. The third covers areas of broader concern connected with potential consequences, particularly with regard to European Union competition law and the intended purpose of the Health and Social Care Bill.

As regards the first category, it is well recognised that the European working time regulation has had a detrimental impact on the training of our young doctors, particularly those who are training to pursue careers ultimately as independent practitioners at consultant level in the craft specialties, such as my own of general surgery. A restriction to 48 hours’ working per week has resulted in trainees feeling that they have insufficient experience at the end of their training to be certain that they can perform independent consultant practice in the way that it is envisaged in our country rather than models for the delivery of clinical practice in other European countries, to the extent that there is genuine concern that we may be producing generations of consultants less able to deliver the rigorous and demanding practice that we have always expected and have been fortunate enough to receive in our country.

There is also the question of the additional cost of providing locum cover to ensure that rotas are compliant with a 48-hour working week. In an important piece of work published last year, the Royal College of Surgeons identified an additional £200 million a year cost in providing locums to ensure that rotas were 48-hour compliant after the first year of the introduction of the final European working time regulation.

There has also been considerable concern about the problem of language and competence testing. I think most noble Lords would agree that the same standard should apply to every doctor and healthcare practitioner working in our country with regard to their ability to speak the English language and be able to communicate appropriately with patients. There is no doubt that the ability to communicate is a hugely important part of the delivery of healthcare. Equally, it is only right that patients in our healthcare systems are able to expect that all doctors and other healthcare professionals who have the privilege of treating them in our hospitals and other healthcare environments practise to the same level of competence. At the moment it is impossible for the national regulatory bodies in our country to ensure that doctors who are registered elsewhere in the European Union meet the same standards as we expect of our own graduates or graduates from elsewhere in the world.

There are real concerns that the first year after qualification from medical school—formerly known as the house job year, now known as foundation year 1 —which is an essential part of completing the process for full registration with the General Medical Council, has now been opened up to competition from medical graduates across Europe as part of the free mobility of labour in the European Union. However, this first year of clinical practice remains an important element of ensuring that our young medical graduates can complete their training and can ultimately register to practise in our country. The issue is very simple: if they are unable to take that year, they are unable to fully register and will not be able to practise in our country. This is a huge waste because these talented graduates should remain in our country and serve our nation, ensuring that the debt they have is repaid through practice in the National Health Service. In this year’s round of appointment to that first foundation year, some 52 potential graduates have not been given a foundation year 1 post and some 113 practitioners from the European Union have taken places on those foundation year 1 schemes. How do Her Majesty’s Government propose to ensure that this problem does not result in our graduates being unable to complete that essential first year after they have qualified from medical school?

There are also important concerns about the impact of the European clinical trials directive in terms of reducing the competitiveness of the biomedical science and research science output of our country. It is estimated that in the year 2000, 6 per cent of all patients who entered clinical trials around the world came from our country. Soon after that, in 2003, the clinical trials directive was incorporated into our domestic legislation, and the problems associated with its bureaucracy have resulted in a reduction in this country to just 2 per cent in 2006 and 1.4 per cent in 2010 of the number of patients included in clinical trials around the world.

These are all well proven areas where Her Majesty's Government need to develop a strategy to address the problems that have been experienced. However, there are also important matters relating to directives that are currently being considered by the Department of Health for inclusion in domestic legislation. There is a directive on transplantation which, if incorporated, will add bureaucracy to the delivery of transplantation services in our country, resulting in added cost. Those responsible for the delivery of these services believe that our standards that are highly regarded throughout the world are of sufficient quality and that any potential European directive must not be gold-plated and undermine an already successful service.

With regard to energy efficiency, a directive that is currently under regulation has caused considerable concern to the NHS Federation. This directive requires the building stock of all public bodies, including the National Health Service, to be improved on an annual basis, and for 3 per cent of floor space to be addressed each year. This will cost some £70 million a year, and the NHS, given the severe financial constraints it is facing, can hardly afford this.

Then there is the ongoing concern that European competition law may inadvertently be applied and in some way affect the proposals of Her Majesty's Government in the Health and Social Care Bill. Clinical commissioning groups, in wishing to take forward the development of new services to improve the clinical outcomes and care of our patients, could be disrupted in doing that through the application of European competition law.

In October last year, the Prime Minister indicated that all government departments should look at European regulation to determine how it might be adversely impacting on the work of those departments and the life of our country. There is no doubt that in the area of healthcare, the training of our young doctors, the innovation and delivery of biomedical research, and the delivery of healthcare itself have been detrimentally affected. It is absolutely essential that Her Majesty's Government are sensitive to the concerns—repeated on several occasions by those with responsibility for the delivery of healthcare in our country—and act as a matter of priority.

[Baroness Northover]

I remind noble Lords that this is a time-limited debate and that all speakers, except for the Minister, have two minutes. When the clock displays two minutes, noble Lords have had their two minutes. I note that we are without at least one speaker in this debate.

19:44

[Lord Ryder of Wensum]

My Lords, I congratulate the noble Lord, Lord Kakkar, on opening his debate with such clarity and force.

I am chairman of the Institute of Cancer Research, a college of the University of London. We are now regarded as the leading cancer research organisation in the world and are judged on the discovery and development of drugs. The clinical trials directive has harmed us. It lacks harmonisation across and even within countries. What is called a clinical trial in country A may be an observational study in country B. Sometimes drugs within a protocol are deemed investigational medicinal products instead of supportive medication or routine therapy. Red tape abounds, inspections are inconsistent and heavy-handed, and high-quality clinical trials are stifled by the directive. It handicaps innovation, causes delays with new trials, obstructs our competitive edge over the USA and other countries, and renders us a less attractive location for trials. It damages our pharmaceutical industry—Britain’s most successful manufacturing sector. The Americans are counting their good fortune, and soon the Chinese and the Indians will be accumulating theirs.

Trials are cornerstones of the work with our sister organisation, the Royal Marsden Hospital. The blame for the follies inflicted on us radiates at the feet of the EU, and I urge the Government to press harder for revisions to the directive.

19:46

[Baroness Scott of Needham Market]

My Lords, I wish to focus on the mutual recognition of professional qualifications directive, which provides the framework within which healthcare professionals move around within the EU.

I am entirely supportive of the notion of free movement across the Union and I have no doubts about the benefits that the mobility of healthcare professionals can bring to patients and to the medical profession. However, a number of high-profile cases have called the workings of the directive into question, and all UK regulators have expressed strong concerns that the current system forces them to admit individuals who do not meet the standards that would be required of UK or non-EU professionals.

Professional mobility should never be at the expense of patient safety. There is evidence that, as it currently stands, the directive is striking the wrong balance. The requirements as currently set out are not sufficient to ensure that qualifications and skills are adequate and up to date. We need a competence-based approach, rather than a one-off qualification, fixed at a particular point in time and hard to compare across jurisdictions. Knowing that an individual who has not practised for years has had to take steps to come up to date is essential.

Authorities in host member states must be able to access adequate information regarding the professional history of an individual and to seek answers to any queries they may have. Use of the Internal Market Information System is likely to represent a simpler and more cost-effective option than the proposed European professional card. There is currently no alert system to inform member states when a fitness-to-practise case is brought against an individual. If such a system were to be introduced in some member states, it would be hindered by the use of domestic data-protection legislation.

The ability to communicate effectively in the language of the host member state is critical to safe and effective practice and is the most obvious cause of concern to patients. The directive fails to ensure that professionals meet the necessary standards.

19:48

[Baroness Masham of Ilton]

My Lords, I live in a rural area where patients with serious conditions are now treated many miles away. The local population has become reliant on the voluntary air ambulance. This is the most popular charity in the north. It can be a life-or-death situation. The lifeboats that also save lives and do an equally important voluntary job do not have to pay VAT on fuel, but the ambulances do. A Question was therefore tabled asking whether air ambulances could have equal exemption from VAT. The noble Lord, Lord Sassoon, answered:

“EU law provides a specific exemption from VAT for the supply of certain equipment and services used for sea rescue. There is no equivalent provision for air ambulance rescue services”.—[Official Report, 16/6/11; col. WA 202.]

Is it not time that the EU helped all charities that save lives throughout the EU and allowed VAT exemption on fuel?

I ask the Minister, is there a problem of medication being sold to EU countries for a better price than in the UK? Are we running short of some drugs in some areas? I declare an interest: I have used CoAprovel for some time. My surgery in north Yorkshire can no longer obtain it, and I therefore take the prescription to London, where the drug is still available. The UK should maintain adequate supplies of medication so that patients are never left in a situation where they must wait for their treatment. I hope that safeguards will be put in place.

19:50

[Viscount Bridgeman]

My Lords, I join other noble Lords in congratulating the Lord, Lord Kakkar, on his masterly overview of the subject.

In the short time available, I have to record cautiously encouraging news. Your Lordships will recall a debate on 8 September in which attention was drawn to the problems with language testing of health professionals from the EEA. My noble friend Lord Howe gave an encouraging reply at the time and, following a constructive Green Paper issued by the Commission, a draft directive was issued in December which includes three significant proposals.

The first is that a warning system is to be introduced so that regulatory bodies must warn each other if, for example, a doctor or nurse has been struck off or suspended from a register and attempts to register in another member state. The second is that there will be updated minimum training requirements for doctors, dentists, pharmacists, nurses and midwives to reflect the evolution of those professions and of education in those fields. That is particularly important with some of the newer accession states, where there is a very different culture and practice. The third is the right for regulatory bodies to check the language skills of health professionals—something for which UK health organisations have been pressing. On that point, does the department’s reading of Article 38 of the directive, especially its second paragraph, give a blanket power for a competent authority routinely to examine all applicant health professionals for knowledge of the language, which I understand to be a common aim among those authorities?

Those three proposals will have a major impact in remedying the shortcomings affecting health professions which were thrown up by the original directive. I remind your Lordships that the healthcare regulatory organisations in England, and those covering devolved Administrations where they have responsibility, played a major role in discussion on the Green Paper. Finally, I pay tribute to the Minister and his department for working with the Commission to achieve what I am confident will be a favourable and constructive development.

19:52

[Lord Clement-Jones]

My Lords, I was hoping that the noble Lord, Lord Owen, would be taking part in this debate, as I believe that he was going to be talking about competition law, but this is an opportunity to intervene briefly on the issue. I think the noble Lord, Lord Kakkar, for giving us the opportunity.

The main arguments given by the department for there being a low risk of application of EU competition are that, for commissioners, healthcare is provided on a universal basis on the principle of solidarity and, for providers, that they will not be regarded as undertakings unless the particular economic activity in which they are engaged is part of a market.

However, a number of questions arise. What if providers collaborate, as they do in the post-acute care and enablement programme, which is a collaborative model? What if other providers who are excluded from a consortium object to that? It could be alleged that there is anti-competitive behaviour. What if commissioning bodies create a market, as we have done with elective surgery and ISTCs? There are also question marks over the criteria for mergers, in particular when foundation trusts merge. Why cannot we also temper the application of EU law by referring specifically to Article 106 of the TFEU in terms of the task of integration assigned to commissioners, and mitigate the Competition Commission’s exercise of its duties regarding tariffs, Monitor’s duties, and so on, by praying in aid the need to have regard to the interests of patients?

19:54

[Lord Patel]

My Lords, I want to speak about the data protection directive. It regulates the processing of any personal information, and has been transposed in the UK as the Data Protection Act. That legislation covers any activities that involve data processing. They are as diverse as marketing and internet transactions, routine administrative data collection and the use of health records for research and clinical practice.

Health research is therefore only one small aspect of the directive, but that complex legislation has had a major impact on how health data are used in studies. Properly controlled access to individuals’ health records is essential for health research. Health records enable researchers to identify patients to take part in clinical trials and to provide data for observational studies, such as those looking for associations between particular lifestyle choices and ill health. Researchers find the legislative framework for the use of health data complex and confusing. For example, they are uncertain how much protection now offered by exemptions for research on how they handle anonymised data, where the identity of individuals is masked.

The European Commission will put forward a new legislative proposal to replace the data protection directive at the end of January. That is expected to increase the rights of individuals, and it is highly likely that that will have an impact on how we use health data in research, even if that is unintended.

The Government recognise the importance of the use of patient data in research. I welcome the recent commitment to consult on changes to the NHS Constitution to create a system that will enable patients’ records to be used in research unless they opt out. This is therefore an exciting but also anxious time for the use of health data in research. We must make sure that changes to EU data protection legislation do not inadvertently hamper those plans. I am sure that the noble Earl will liaise with the Justice Department to ensure that that is not the case.

19:56

[Lord Walton of Detchant]

My Lords, in the 1970s, when I was chairman of the education committee of the General Medical Council, before I became its president, I was for five years a member of a European advisory committee on medical education, which produced a number of reports on basic and clinical education. It had the effect of improving medical education in many parts of the EU. That remains somewhat uneven. At the same time, we introduced a Professional Linguistic Assessments Board exam for doctors from outside the European Union coming to work in the UK to assess their clinical competence and their ability to understand English. When we tried to do that for European incoming doctors, we were threatened with being taken to the European Court because that was contrary to the Treaty of Rome. At that time, we persuaded the Department of Health that it was essential that it should impose a language test on incoming doctors from the EU as a condition of employment. That has been done very unevenly. What action are the Government taking to improve that situation? Do they propose to try to renegotiate the European working time directive, which has had such an adverse effect on the training of many junior doctors?

Secondly, does the noble Earl think it likely that the Human Tissue Authority will be the competent authority to deal with the transplantation directive in the UK at a time when the Government propose either to abolish or to merge that organisation? Finally, is the European directive on clinical trials being considered by the newly established Research Regulatory Authority?

19:49

[Lord Lexden]

My Lords, there can be no doubt about the importance of the issues which my noble friend Lord Kakkar raised for debate and introduced with his customary eloquence.

As is well known, where the European Union is concerned, the tendency is often for difficult practical issues to be subordinated to well intended political ideals. As the Social Policies and Consumer Protection Sub-Committee, of which I am a member, pointed out in its report on the mobility of healthcare professionals last year, nowhere is it more important for this tendency to be resisted than in matters relating to patient safety.

The sub-committee concluded that the mutual recognition of professional qualifications directive,

“fails to command the confidence of patients and professionals”,

and that the increased desire for mobility, which we all share, was nevertheless resulting in the admittance of individuals who do not meet standards required to be considered to practise in the United Kingdom. We should keep the sub-committee's conclusions firmly in mind and continue to push for the development of a competence-based approach for the recognition of qualifications across the EU.

More positive, to my mind, are EU proposals for enhancing cross-border access to healthcare—proposals that do more justice to the principles of open markets and free movement. The proposals have the potential to reduce waiting times for patients facing unduly long delays. The principle that patient reimbursement should not exceed the value of the cost of the same or equivalent treatments on the NHS should exert pressure to keep the new directive’s costs under control.

As ever, though, we must be vigilant. As the NHS devolves increased local powers to patients and professionals, the importance of thorough and transparent pricing structures becomes greater. It is easy to imagine a situation in which two patients receive differing levels of reimbursement for the same treatment, performed at the same hospital abroad, based on differences in British local costs. It will be hard to justify such differences to the electorate. As we seek improvements in service, we must always be alert to practical difficulties that may arise.

20:00

[Lord Crisp]

My Lords, I should like to raise three unrelated issues and ask three simple questions. The first builds on the issues raised by the noble Lord, Lord Kakkar, in his opening remarks and picked up by the noble Lord, Lord Walton, about the working time directive. I understand that the recent attempts to revise the directive have failed but that discussion is under way with what are called the EU “social partners”, which are essentially the trade unions and employers organisations. I ask a simple question: if those discussions raise it in this fashion, will the Government support the opt-out from the EU working time directive proposed by the surgeons, which would allow them to work up to 65 hours a week?

The second unrelated issue is that one of the unintended consequences of opening our doors to Europe in this way—very positive as that is—is that it has tended to exclude those from other parts of the world who have made such an enormous contribution to the UK, particularly those from Commonwealth countries. Will the Minister confirm that the Government will continue to support the international medical training schemes for people from the Commonwealth and beyond? Indeed, will he promote them further? At the moment they are not being picked up in any great numbers.

My third point picks up on the issue raised by the noble Lord, Lord Lexden, concerning the cross-border healthcare initiative. It seems to me from everything that I have read that it is very uncertain what the numbers will be in practice. Can the Minister let us know what the Government’s own assessment is of the likely impact of introducing that directive later this year or next year?

20:02

[Baroness Greengross]

My Lords, I basically support many of the aims of the working time directive. None of us wants to see junior doctors exploited or working until they are so tired that they are a danger to the patients for whom they care.

The two judgments in SiMAP and Jaeger were most unfortunate and in fact skewed the working time directive in a very bad way. The result has perhaps been damaging to one very large group of patients—frail older people, who form a quarter of the patients in our hospitals. As we know, some tasks previously carried out by doctors were understandably handed over to nursing staff. This can be a good thing, but in many cases what was previously carried out by nurses has been handed on to healthcare assistants. Healthcare assistants are largely untrained, are not regulated and do not always have the competences that are needed. We know, sadly, that much basic care, such as help with feeding, adequate nutrition and hydration, and even basic toileting, has not been carried out well and has had dreadful consequences, which unfortunately we read about in the press all the time.

These very frail patients—a quarter of the patients whom we treat—often suffer from some form of cognitive loss or dementia. They need to be cared for by people whom they understand and feel they can trust, and language is very important in this. We must be certain that these patients feel safe with the people who are caring for them. Therefore, we need language testing by regulators to make sure that the standard of care that our frail patients receive respects their dignity and human rights, and we must work towards that.

20:04

[Lord Ribeiro]

My Lords, I apologise to the noble Lord, Lord Kakkar, for missing the beginning of his speech, and I thank him for bringing this debate to your Lordships’ House.

“The European working time directive is destroying surgical training”. This was a comment from a surgical trainee responding to the General Medical Council’s national training survey of 2010. It echoes warnings made by the Royal College of Surgeons since 2004, when the 58-hour maximum working week was introduced. In 2011, the Association of Surgeons in Training and the British Orthopaedic Trainees Association surveyed 1,887 trainees on the impact of the working time regulation, which introduced the 48-hour limit in 2009. Sixty-six per cent reported a deterioration in surgical training, only 1.6 per cent reported an improvement, and 67 per cent had to attend work when off duty to maintain their operative training and learning.

The GMC repeated that survey again in 2011. While showing an improvement in some specialties, it found no change in surgery, with 80 per cent of trainees working beyond their rostered hours. It found 60 per cent of trainees in obstetrics and gynaecology and surgery taking longer to achieve the required educational competences as a result of the working time regulation. In America, trainees are allowed to work up to a maximum of 80 hours, and in some specialties this can be increased to 88 hours.

I believe that a more flexible approach is needed to allow senior trainees on the verge of consultant practice to work longer hours if needed, as in the United States. A return to an average of 56 hours for craft specialties would allow new trainees, starting at 48 hours, the time to develop their skills as they progressed through their training to a maximum of 65 hours for senior trainees, as allowed by the opt-out clause of the EU and as noted by the noble Lord, Lord Crisp. A one-size-fits-all solution is not appropriate, and the feedback from trainees suggests that it is damaging their training. Will the Minister identify what steps the Government intend to take to ensure greater flexibility, and will the Government consider overturning the SiMAP and Jaeger judgments and revising the new deal and the WTR?

20:07

[Baroness Wheeler]

My Lords, I, too, congratulate the noble Lord on initiating this debate, and I also congratulate other noble Lords who have very comprehensively covered the wide range of important EU healthcare issues currently in the process of discussion, development or implementation in the UK. Considering these issues as a whole in the one debate, rather than tending to debate them separately as various reports or new proposals or directives come up, has been invaluable. It provides us with an overview of the key issues, how they impact on each other and how they can reach into every aspect of the NHS care and treatment of patients, research, and the working lives and training of healthcare professionals.

The cross-border health directive, which we are required to enact by October 2013, the draft directive on the mobility of health professionals, and the implications for our NHS of the EU’s proposals for revising the energy efficiency directive—with the prospect of huge expenditure and further upheaval for our NHS if, as a public body, it is to become a major driver in achieving EU energy efficiency targets—all present major challenges for the NHS, and one does wonder how well equipped it is to meet them in its current state of uncertainty and upheaval.

In view of the short time available, I want to focus on four questions to the Minister. First, on the clinical trials directive, I echo the concern of noble Lords who have pointed to the UK’s steadily diminishing global share of clinical trials. I look forward to hearing from the Minister how the Government are addressing this decline. How will the new NHS architecture impact on this, and when might we expect our share to start rising again?

Secondly, on EU procurement law, the question we need to address when we come to it in the next stage of the Health and Social Care Bill is the proper balance between planning and the social solidarity that is expressed by the NHS. We also need to consider the effect of EU procurement law on commissioning and the progressive effect of the EU procurement regime to the point where commissioning decisions and planning become victims of court cases. What is the Minister’s opinion of where the balance lies? Will he expedite the meeting that he promised with noble Lords, including my noble friend Lady Thornton, to discuss ways forward on this matter?

Thirdly, how is EU work progressing on tackling health inequalities across EU countries? What initiatives are being undertaken or supported by the Government and what are the timescales for report and development? Finally, I note that last year the UK NHS was owed more than £38 million from EU member states for healthcare treatment for their nationals, so it would be helpful if the Minister could update the House on the progress and systems that are in place to ensure that this money is collected.

20:10

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, I begin by thanking the noble Lord, Lord Kakkar, for calling this debate and, indeed, all noble Lords who have spoken and contributed so eloquently and, I may say, succinctly. The Government are determined that the NHS achieves results for patients that are consistently among the best in the world. One way to do that is to compare our experience with those of other European countries. There are many areas where we can learn from each other—for example, where we have worked closely with counterparts in Spain, which has the highest organ donation rate anywhere in the world, to improve donation rates here.

In assessing the impact of the EU on healthcare in the UK, we should start by recognising that the Treaty on the Functioning of the European Union respects the right of member states to organise and manage their own health services. Much of the activity of the European Union on health is therefore designed to complement national policies. However, various areas of European legislation, as noble Lords have pointed out, can have an impact on healthcare in the UK. One such area is social policy. Every year, many millions of UK citizens travel within the EU knowing that, should the need arise, they can access immediately necessary healthcare for free, or at a substantially reduced cost, by using their European health insurance card as a temporary visitor. Many UK state pensioners prefer to live in the warmer climate of countries like Spain or France, and do so knowing that their healthcare costs are covered. Of course, if they were to live here in the UK, they would be entitled to treatment under the NHS.

Noble Lords will be aware—some have mentioned it—of the European Union directive on cross-border patient mobility. Until relatively recently, there was little discussion of the issue of patient mobility at a European level. However, a new generation of Europeans, accustomed to crossing borders with ease and able to purchase goods and services from any part of the European Union, are proving less willing to accept constraints on where they can obtain their healthcare. The new directive brings together several years’ worth of case law established by the European Court of Justice. It makes clear the rules that apply when EU citizens wish to access treatment in another member state. The directive sets out the arrangements under which member states are obliged to accept citizens from other EU states, and explains the rules for refusing such treatment. It also sets out the systems that a state must provide to allow its own citizens to access their rights to cross-border healthcare. I say to my noble friend Lord Lexden that we do not expect an influx of patients rushing to take advantage of NHS services. The NHS does attract some overseas visitors, including many from outside Europe, who pay for their treatment. EU citizens, entitled to treatment under the directive, would be reimbursed by their home system but only up to the cost of providing the treatment in their home state.

There is also a substantial body of European legislation regulating medicines and medical devices. This legislation, harmonising requirements for allowing medicines and devices into the EU, has reduced burdens on pharmaceutical and medical device companies in accessing the whole European market. The UK plays a prominent role in shaping the regulatory frameworks for medicines and devices with the Medicines and Healthcare products Regulatory Agency, which is one of the leading regulators in Europe.

My noble friend Lord Ryder and my noble friend Lady Wheeler—I apologise for calling the noble Baroness, Lady Wheeler, my noble friend, although of course she is—spoke of the clinical trials directive, as did other noble Lords. That directive is designed specifically to harmonise clinical trial practice across Europe. In recent years, there has been a decline in the number of clinical trials conducted in the EU and the UK. That cannot be attributed only to the introduction of the clinical trials directive as international competition for attracting clinical research has increased dramatically in recent years.

However, the Government consider the revision of this directive to be a priority to ensure that the UK remains an attractive place for the conduct of clinical trials. The European Commission is also committed to revising the directive. A scheme was introduced in April this year for the notification of low-risk national trials, replacing the traditional authorisation process, and more risk-proportionate monitoring has been introduced, taking a targeted approach to monitoring that depends on the level of risk a trial represents to patients and data credibility. I should say to my noble friend Lord Ryder that one of the Government’s aims for the revision of the clinical trials directive is to harmonise its implementation across Europe. The Government have been influencing the Commission so that the revision of the directive ensures that the EU becomes an attractive place for the conduct of clinical trials once again.

Another priority for the Government is the revision of the directive on the mutual recognition of professional qualifications. We have made it clear that we want to stop foreign healthcare professionals working in the NHS unless they have passed robust language and competence tests. The proposal published by the European Commission last month contains some welcome amendments, such as a new proactive alert mechanism. This should contribute significantly to tightening the European regulatory framework and improving patient and public safety. While the proposal would not allow language checks by a competent authority before recognition of the qualification of a professional, they do make it clear that controls on language checks would be permissible and could be undertaken before a professional was able to practise. I should say to my noble friend Lord Bridgeman that the Government are currently analysing the proposals in detail to formulate a UK negotiating position. As usual with EU proposals, part of this process will involve consulting the devolved Administrations. I say to my noble friend Lady Scott and the noble Lord, Lord Kakkar, that the Commission’s proposal does contain some welcome amendments, such as that proactive alert mechanism and negotiations on the text are due to begin at the end of January 2012, with the aim of reaching an agreed directive in the autumn of this year.

With regard to the European professional card, which was raised by my noble friend Lady Scott, the Commission has worked with stakeholders to develop proposals for the card. There have been some positive developments in the proposals and it seems that what is now proposed will be underpinned by use of the internal market information system, but we need to seek views from competent authorities about the administrative implications of the proposals before we can finalise our position. The Government have made clear that mobility should not be at the expense of patient safety. The Commission’s proposals recognise the unique position of healthcare professionals and they build additional safeguards into the directive for healthcare professionals in certain areas—for example, in the case of that alert mechanism. Provided that the necessary safeguards are built in for healthcare professionals, we see no reason for a conflict between the joint aims of facilitating patient safety and freedom of movement.

In relation to EEA migrants having access to the vocational year’s training as part of the directive proposals, which was an issue raised by the noble Lord, Lord Kakkar, the proposals were only recently published by the Commission, which was undertaking a detailed analysis to better understand the impact on healthcare professionals and patient safety. A number of aspects of the proposals require further clarification. A key priority for the Government going forward is to ensure that freedom of movement by professionals is balanced by safety considerations.

I move now to the working time directive, which was an issue raised by many noble Lords, including the noble Lords, Lord Kakkar, Lord Walton and Lord Crisp, the noble Baroness, Lady Greengross, and my noble friend Lord Ribeiro. We are committed in the coalition agreement to limit the application of the working time directive in the UK. The agreed government position is that retention of an individual’s right to opt out of the limit on weekly working time must be the UK’s clear overall priority in any renegotiation of the directive. The UK would welcome changes to increase flexibility on on-call time and compensatory rest, but not at the expense of losing the opt-out.

The noble Lord, Lord Crisp, mentioned the opt-out in particular, and my noble friend Lord Ribeiro asked about flexibilities. The directive at the moment affords all doctors the choice to opt out and work more than 48 hours a week. Doctors who opt out can work up to 56 hours—the maximum outlined in the new deal. But breaching that limit would be very costly for the NHS. The opt-out gives working people, including doctors, the choice over their working hours. They are better off because of that choice, we believe. Therefore, it is a Government priority that individuals should continue to enjoy the right to opt out if they wish. The 48 hours is measured over the reference period of six months. Therefore, doctors may in any week work more than 48 hours; there is flexibility. In response to the Temple report, my right honourable friend the Secretary of State asked Medical Education England to advise NHS employers on ways to realign and simplify the new deal. The Department of Health has received its report and is considering the recommendations very carefully, including the case for negotiating a new contract.

I move to organ donation, which was raised by the noble Lords, Lord Walton and Lord Kakkar. The Government are fully committed to supporting action across the EU to increase the number of safe, high-quality organs available for transplant. We are working with the Commission and other member states to help ensure that any legislative framework will not prove to be a disincentive to organ donation and transplantation. I am sure that all noble Lords will agree that having more safe, high-quality organs available for transplant across Europe would benefit all member states alike.

The noble Lord, Lord Kakkar, and my noble friend Lord Clement-Jones, raised the issue of the potential consequences of the application of EU competition law to the NHS under the Health and Social Care Bill. Competition law could already potentially be applied to the provision of NHS services. The relevant treaty provisions have already been incorporated into UK law. The purpose would be to protect patients' interests from abuses. The potential consequences would extend to remedies and sanctions to address abuses in individual cases. However, European case law makes clear that commissioners of NHS services would not be subject to competition in respect of their purchasing activities, so under the Health and Social Care Bill clinical commissioning groups would not be constrained by EU competition law in their decisions on how best to improve services. I have more to say on competition law but unfortunately time is against me.

The noble Baroness, Lady Masham, asked me about the exemption from VAT for air ambulances. I will write to her on that as I do not have the answer in my brief.

The noble Lord, Lord Patel, asked about the data protection directive. The Commission is in the process of reviewing the existing directive and will publish a draft for consultation, which we expect by the end of the month. We will then have an opportunity to comment and give our views. The department is well sighted on this. We are involved in the discussions to ensure that UK researchers are not affected by proposals covering data protection in respect of research.

The noble Lord, Lord Walton, asked about the role that the new Health Research Authority might have in clinical trials. The HRA will not take over the role of the MHRA in assessing and inspecting clinical trials but will be involved in streamlining the processes, as the noble Lord is aware. On 1 December the HRA issued proposals for the further development of its national research ethics service.

Time has moved on. In closing, I will highlight the positive impact that the EU has had on healthcare in the UK. We are able to share experience and expertise with other member states to improve quality and standards and to encourage innovation, and we are determined to ensure that the United Kingdom continues to play a key role in shaping the European health agenda.

20:23

Sitting suspended.

Welfare Reform Bill

Wednesday 11th January 2012 Lords Chamber

Report (3rd Day)(Continued)

20:32

Amendment 40

Moved by

[Lord Freud]

40: Clause 51, page 37, line 5, after “(1)” insert “or (2A)”

Amendment 40 agreed.

Amendment 40A

Moved by

[Lord McKenzie of Luton]

40A: Clause 51, page 37, line 13, at end insert—
“(d) does not include any days in which a claim in respect to ESA is in the assessment phase.”

[Lord McKenzie of Luton]

My Lords, I shall speak also to the other amendment in our name in this group. Perhaps more than any other component of these changes, the inclusion of the assessment period in the tally of days which count to limit contributory allowance serves to underline that this is fundamentally about budget cuts. The assessment phase of an ESA claim normally ends 13 weeks after the beginning of an entitlement. It is the period during which DWP gathers relevant information about a claim to determine whether a person has limited capability to work or limited capability for work-related activity. While the assessment is under way, there is no entitlement to an additional component. Indeed, it is the additional component which is supposed to reflect the additional needs of those who are not job ready. If the assessment determines that a claimant should be treated as having limited capability for work or work-related activity, the relevant additional component will be backdated to the end of the 13-week period, albeit that the assessment period may have been longer. During the 13-week period, the individual is entitled to only the contributory ESA rate equivalent to the income support JSA basic personal allowance rate. This is the same rate as the contributory JSA rate. By including in the 365-day period the 13-week assessment phase with no additional component, the Government are denying the receipt of 13 weeks of the additional component at the end of the period. This is demonstrably unfair.

We will doubtless be reminded of the cost implications which are, I think, £20 million a year after 2012-13 and £115 million for that year, the accumulated effect of those hitting at the start of the system. The effect of what the Government are proposing is that the additional component receivable by those entitled to contributory ESA in the WRAG will be available for only nine months, not 12 months. This is an example of where somebody has looked at every conceivable means of clawing back moneys from sick and disabled people. The benefit to government is said to be £100 million in a year, but looked at another way, this is an additional £100 million in a year taken from the pockets of the disadvantaged.

Amendment 41A addresses the position of those with fluctuating conditions who might move between the WRAG and the support group. Fluctuating conditions have been a strong feature of our debates on this Bill and on previous welfare reform measures. Concerns have been expressed about how work capability assessment operates for those with such conditions, whether there is sufficient training for DWP staff and providers and whether there is appropriate expertise which can be brought to bear to make sure that the system works as it should for people with fluctuating conditions. This brings with it the prospect of individuals potentially moving between the WRAG and the support group when reassessment arises.

Movements into the support group have been protected by the government amendment, and for so long as somebody is in the WRAG or the support group movements into the latter would not be denied contributory ESA, but periods in the WRAG are accumulated for the purposes of the time restriction. The problem this brings is as follows: consider somebody with cancer or another fluctuating condition who has spent, say, 11 months in the WRAG, has moved to the support group for a period and whose condition subsequently improves so they move back into the WRAG on a reassessment. If the clock does not then start again, they are given one month to prepare themselves for the loss of contributory benefit and to seek to re-enter the workplace. This problem would be made worse if there was an extensive period in the support group because of the greater disconnect with prior work-related activity. It is submitted that the amendment is a narrow and entirely reasonable proposition. The Minister may have figures about how many people it might affect, but it is suggested that it is unlikely to be many.

Amendment 41A, which has been tabled by the noble Lord, Lord Patel, precludes the starting of the time-period limitation for contributory ESA until the relevant provisions of the Bill enter into force. It has our support as it stands. As we discussed earlier, the clock has already started. When this legislation enters into force—the earliest date being April this year—some 100,000 people will lose their contributory ESA overnight, and for some that will be as much as £94 a week. Some may have been receiving it for the bare 365 days yet have paid their national insurance contributions for decades. We await further comments from the noble Lord, Lord Patel, but on any reasonable analysis, this is retrospective legislation and should be opposed. If there is to be time limiting of contributory ESA, in the normal course of events one would expect it to operate for claims after the introduction of the legislation. The Government are applying it to existing claims. Worse, they are counting days for which the allowance has already been received. Letters of notification have served only to cause confusion and dismay. Just imagine the consternation that would be caused by having a letter drop on the doormat telling you that in six months’ time it is likely that you will lose as much as £94 a week of your income—overnight.

In their understandable need to address the deficit, which we acknowledge, I believe the Government have lost all perspective and all sense of fairness. They have been thrashing around in all directions to grab back money on the flimsiest of propositions. Frankly, they should be ashamed of themselves.

[Lord Kirkwood of Kirkhope]

My Lords, I want to make a brief contribution to this debate because we have had a busy day and I think we all want to go away and reflect on what some of the earlier important amendments and votes mean for the rest of the Bill.

As I was preparing for tonight’s consideration of the Bill, I thought that Amendment 40A had some real potential to try to keep some channels open to the department. We have had some very powerful speeches and some significant decisions taken by the House. For myself, I want to go away and read all of those carefully. If we were looking for a way of trying to meet some of the obvious concerns that have been expressed in this debate, both internally and externally, this amendment suggests that there might be a possibility of getting something that can stand the test of time and that does not destroy the tight financial framework within which the Minister is seeking to operate. I know that he cannot on a whim say, “Yes, this is something that is possible for me to go away and look at”, but I think this is potentially realistic.

There are a number of reasons for supporting it, not just because it is realistic and meets some of the concerns but because it wins some extra time for everyone. The extra three months would be of significant advantage to the claimants concerned. My noble friend Lady Thomas made an important point earlier when she said that Harrington has a great deal of potential. I do not think that has been properly reflected in any of this evening’s discussions. The Government have set out their stall very robustly about the five-year set of annual reviews. I am well pleased, and I think everyone else is, about the progress that Professor Malcolm Harrington is making. Perhaps he should be invited to consider some of these things, including what might be done around the assessment phase. All I am saying is that I think there is some potential here for getting a compromise that might be winnable in terms of the financial constraints and might keep the channels open through the rest of the proceedings of this Bill—we might be able to come back to it at Third Reading.

In the balance of what else has happened today, this might seem nugatory or irrelevant, but I do not take that view. I think there is a mechanism here that is sensible and that may be doable. It will not be easy and there cannot be any guarantees, but I would really counsel my noble friend the Minister—who I know is actively concerned about all of this and is trying to find a way through that meets his financial framework as well as the concerns that have been expressed so powerfully by colleagues—to give this very careful consideration. The hour is not great but the House might be well advised to think carefully about this after the Minister has responded. I feel quite strongly that Amendment 40A may be worth considering voting on if we cannot get a response from the Minister that meets some of the concerns that have been expressed this evening.

20:45

[Baroness Lister of Burtersett]

My Lords, in Grand Committee the question of the assessment period got a bit lost because there were so many issues that the Minister had to deal with. I asked the Minister why the assessment period was not included but never got an answer.

We talk about the time limit kicking in after a year but it is a year minus 13 weeks because for those first 13 weeks people affected will be paid at JSA rate, which is lower. Quite a number of us were confused, but the upshot was that the Minister said:

“I have to admit that I am not particularly happy about the assessment phase of ESA and how it is working … I would like to look at it. It is difficult to have a set of principles around something that one is somewhat unhappy about”.—[Official Report, 8/11/11; col. GC 46.]

I hope that the Minister has looked at it in the interim and has perhaps realised that there is no principled reason for the clause as it now stands and there is every principled reason for supporting the amendment. I hope that the Minister will see reason and it will not be necessary to test the opinion of the House in the way that the noble Lord, Lord Kirkwood of Kirkhope, was suggesting.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, I shall leap straight in on the issue raised by the noble Baroness, Lady Lister, on the assessment phase. What I was really alluding to was the upcoming sickness absence review, which is an important review of how we treat sickness absence. One of the things it has looked at is the interrelationship between sickness absence periods and the ESA regime. Basically the review sees no real reason for the assessment phase. As we look at this we must ask: are we structuring ESA and sickness absence so that it is a vulnerable or difficult process? I am sympathetic to my noble friend when he says that there might be a way through this. I want noble Lords to be aware that huge weaknesses have been found. We are pushing people through a process that puts them in limbo for a long period of 92 days or more. The sickness absence review states that that is deeply unsatisfactory, and I suspect that a lot of noble Lords in this Chamber who understand the system also believe that. In that area, I am not sure that this is genuinely the direction in which I want to go because I am not sure that it is something we want to maintain.

Moving on from that, let me set out some of the technicalities of the assessment phase. It usually ends after 13 weeks unless by that point there has not yet been a WCA determination. If a WCA has not been carried out by the 14th week, the assessment phase ends when a determination about limited capability for work has been made. So if the claimant’s assessment phase lasts longer than 13 weeks and they are found to have limited capability for work or work-related activity, the payment of additional components is then backdated. That is the existing system, which I am not that happy with. The effect would be to exclude it in terms of counting to the 365 days, or at least the 730 days depending on where we are, but in practice it does not always happen within 13 weeks and we have a lot of disparity of treatment. Even if we were to stay with the regime, it would be a pretty messy system.

I know that noble Lords hate me when I go through figures, but let me give some—I shall do my best because these figures have been running around. Purely on this basis, there is a cost of an extra £430 million cumulative to 2016-17 over the five-year period. I shall try to make a quick off-the-cuff assessment of how much extra it is when we look at it on top of the two years, and it is not actually a hugely different sum. It is £200 million on the SR period and £400 million on the total period of five years. I know that noble Lords feel that hundreds of millions are easily obtainable, but it is not an insignificant amount of money.

Moving on to Amendment 40B, the effect of this amendment would be that for existing ESA claimants, the one-year time limit would be calculated from the date the clause is commenced, and none of the time already spent on ESA would count towards the 365-day total entitlement. I want to have a word about retrospection. The noble Lord, Lord McKenzie, used the word slightly freely and in fact slightly aggressively. I was upset but not ashamed. I can understand that noble Lords are unhappy that we are taking account of days before the clause is brought into account, but this is about the question of whether noble Lords feel that this is the right approach; it is not about retrospection. Retrospection involves interfering with a claimant’s past entitlement and we are not doing that with this measure.

It is worth explaining what retrospection of time limiting would involve if we were to do it, which we will not. It would involve interfering with past entitlement to ESA. An example would be: at the date we commence the time-limiting provisions, if a claimant who had been receiving contributory ESA in the WRAG for 18 months, it would be retrospective if we demanded repayment of the extra six months of benefit he had already received because that would interfere with the claimant’s past entitlement. We absolutely are not doing anything which is retrospective in that sense. We are redefining the terms on which claimants are entitled to ESA in the future.

[Baroness Thomas of Winchester]

My Lords, perhaps I may make a small point. Were claimants who were receiving ESA last April told by the benefits office or whoever pays their benefit that it might be subject to this one-year cut-off? I ask this because the Government had already announced it in their comprehensive spending review. Were claimants warned then? I know that they were sent a letter in September saying that their claim was likely to end this April if it had started in the previous April. However, were they warned in April 2011?

[Lord Freud]

My Lords, it was a reasonably well publicised announcement by the Chancellor. There was no formal process of warning afterwards. That process began, as my noble friend points out, in September. How much warning people had is an issue, but the essential fact is that we are redefining the terms for entitlement to ESA. That happens quite a lot. Examples of future changes to entitlement include, among others, changing the descriptors to the work capability assessment.

I understand noble Lords having concerns about the fairness of the measure. Again, fairness is a matter of achieving a balance in our policy, so that as many claimants as possible who are in the WRAG are entitled to ESA for the same period.

The noble Lord, Lord McKenzie, asked for figures. We expect that, by April 2012, around 100,000 people will have been receiving contributory ESA and been members of the WRAG for more than 12 months. If the amendment were accepted, we would have another substantial decrease in our savings forecast and a real problem.

Amendment 41A would enable claimants to start a fresh 365-day period if they moved from the support group back to the WRAG—I am not sure whether we are now talking about 365 days or 730 days, so let us leave that on one side for a minute. In practice, for those claimants moving between the two groups regularly—it is funny how, when things are encouraged financially, regularity seems to increase—the amendment would be likely to mean that they would be able to remain on contributory ESA indefinitely.

We have always made it clear that, when addressing claimants in the WRAG, our aim is for as many people as possible to receive contributory ESA for the same period. This will be a period of 365 days on our original formulation and at least 730 days on the basis of the amendment that passed. Restarting that period each time a claimant moved from the support group to the WRAG would lead to inconsistent periods on benefit for claimants.

I accept the amendment that has just gone through, but, on the basis of the period—whether one year or at least 730 days—we do not think that we need to make any of these additional changes, particularly given their high cost in the current fiscal climate. I urge noble Lords not to press these three amendments. We do not consider them consequential upon each other.

[Lord McKenzie of Luton]

I thank the Minister for that reply and all noble Lords who have contributed to this short and rather interesting debate.

I suppose that whether something is retrospective depends on what one’s definition is, but if somebody’s entitlement was put in place at a certain time and under a certain set of rules, to have that entitlement restricted by subsequent legislation and to have the clock running from that earlier date would be, in most common parlance, retrospective. We can argue about the semantics all night and not change anything, but the way in which the Government have gone about this is particularly unfortunate.

I acknowledge the contribution and concerns of the noble Lord, Lord Kirkwood, and my noble friend Lady Lister over the assessment phase. My noble friend instanced the concern that the Minister expressed about this in Committee; I think that he has gone a little further today. As I understood it, he said that the assessment phase, when put in the context of a sickness absence policy, perhaps did not make a lot of sense. If that is the case, I presume that these issues will have to be addressed at some stage and some adjustment made to the process.

Rather than put us in a position where we would wish to test this issue by a vote—there is clearly a degree of support behind me on this and a strong degree of support on the Liberal Democrat Benches—can the Minister offer some comfort that there will be a chance to review this before we sign off the Bill? The consensus of those who have participated is that things are not satisfactory as they stand. Quite what would have to change in the light of any sickness absence policy which is developed would depend on where that policy is heading.

Certainly on issues of fairness, by taking account of the assessment period you are docking three months of someone’s employment and support allowance. Most people would see that as being the period when you get the addition because you are in one of the two ESA categories and therefore the Government are restricting it to only nine months.

[Lord Freud]

Let me clarify that—I hoped I had. Clearly you may not know what category of ESA you are in but you receive the money for the full 12-month period once it is decided. So there is not a problem like that. It is not nine months; it is a full 12 months.

On the question of what is to happen to the assessment phase, I will not be in a position by Third Reading, which is not far away, to give an answer. I am sure the noble Lord will have read the sickness absence review. It is an interesting piece of work which severely criticises the assessment phase. If we need to change it, we will give our response later this year. It is a substantial piece of work and it will take time to work through. It seems that it will become an area for regulations and if one is going to tie a lot of weight on this particular formulation it would probably be easier for the noble Lord to add another three months to his 24 months, if that is what he is trying to do. If it is a formulation of protection to add on another three months, it is not one that anyone would want to rely on for that reason.

[Lord McKenzie of Luton]

Tagging on three months is not the purpose of the amendment or of anyone who has spoken to this. There is concern about unfairness. The Minister said that you get the money from day one, but the point is that you get the money only at the basic JSA rate for the first 13 weeks. You do not get the enhanced funding that comes with the employment and support allowance when you are in either the not-fit-for-work group or not-fit-for work-related activity group. Those premiums do not kick in until after week 13. The Minister is frowning. Someone will correct me if that is wrong but I am getting support from the Liberal Democrat Benches.

I realise that we are not going to get definitive answers on any potentially significant policy development and change in the sickness absence report between now and Third Reading. However, rather than cause us to press this to a vote tonight, could not the Minister at least agree that we can have some further engagement between now and Third Reading to understand a little better the parameters of what is happening on sickness absence and how it might affect the assessment phase?

Seeking to press an issue that, given the hour and whose troops are available, we may or may not win would not be particularly constructive. People are trying to end up in the same place on this issue, which is very much the thrust of what the noble Lord, Lord Kirkwood, is saying, so could the Minister at least assure us of further engagement so that we can understand where this may be heading and the parameters within which it will be considered? Otherwise we move to Third Reading stuck with an assessment phase that we do not think is particularly fair and, in the Minister’s own words, not particularly sustainable. That does not seem a very sensible position to be in.

I do not propose to press the amendments tonight on the other two issues, retrospection and not accumulating the time spent in the work-related activity group, but I am seriously minded to press the issue of the assessment period, because we could have further engagement on that that might be of benefit to noble Lords, some of whom may be more supportive of these measures than others. We are genuinely trying to help the Government, and if they do not want to be helped we might have to look at the alternative. Perhaps the Minister can help us.

[Lord Freud]

My Lords, I am in a difficult position here. My view on the assessment phase is not going to have developed much further in the next two weeks. All I can say is that—well, let me just say what I would say in two or three weeks. I do not think that the assessment phase adds any value to the process; it puts people in limbo. It was meant to be a period in which people adjusted and settled down, and then they had their assessment. It does not seem to be working in that way at all, so we have had the very firm advice that we should get rid of the sickness absence review. If you want to be on ESA you apply for ESA, and if you pass the WCA you are on it, but you do not have all this messing around. That is what our firm advice was from an extraordinarily interesting and important piece of work, and that is where we will end up. If we start sticking other things on to a very shaky process that we want to get rid of, it does not seem a very useful thing to do at all.

[Lord McKenzie of Luton]

The Minister has advised us of an extremely helpful point. Would it follow that if the assessment phase disappeared, once the assessment had taken place and someone was assessed as being appropriate for putting into the WRAG or support group, the levels of funding under the ESA would kick in from day one? If they would, and that is the implication of what the Minister says, and the assessment phase went, that would be the difference between what we are facing at the moment and what might be the future. It would mean in effect that there would be no assessment phase and no period when people were paid at a lower rate than the work-related activity group component rate or the support group rate. If that is the case, we will not have quite the beef that we have at the moment with including the assessment phase.

The noble Lord has been helpful. We are just trying to see here and now how that formulation and prospect features in the Bill before us. At the very least, I ask that we agree to have another look at this, given what the Minister has said and that he is not going to be able to say anything much further between now and Third Reading, rather than having to take a decision on something tonight on which we would have only three-quarters of the information that we need. The Minister has been genuinely helpful, and we have to see how that translates into what we are considering.

[Lord Freud]

My Lords, I do not want to reopen this matter at Third Reading on the basis of things that I will have no further information on at all. That does not make much sense. The noble Lord is absolutely right that if we were to get rid of the assessment phase—and clearly that is something on which, as those who know how government works will know, we would have to do some work—it would be a big change. It would tie in with a lot of other changes, with work that we are going to be doing this year. We are utterly committed to this sickness absence review, which has been a very important document for us. My noble friend said that there was some value in using this assessment phase in this way in the future. I am trying to say that I do not think there is, because I would not want to put any weight on it. There might be other things that we can do to get out of a hole—if we are in a hole—but I honestly do not think that this is a promising line. I do not want to have this debate again at Third Reading. I have said everything I can on it, but I hope that I have said enough.

[Baroness Lister of Burtersett]

I apologise, but I wonder whether the Minister could say one more thing now so that we do not have to come back to it at Third Reading. If the assessment phase is done away with, clearly there is no issue. Given that the Minister himself is clearly suggesting that he would like to see that, would it be possible for him then to say whether, in the event that the assessment phase is not abolished, he would accept the spirit of this amendment now?

[Lord Freud]

I am clearly not in a position, and it would take more than a couple of weeks to get into a position, to make that kind of assurance. I know how skilfully your Lordships ask me these questions, and I deeply appreciate it, but I cannot do that. All I can tell the noble Baroness is that we have had a very powerful report on sickness absence, which I am personally very closely associated with and have sponsored. It made this recommendation, and most people in this Chamber who understand these matters would say that that is the way to go—as I would. Noble Lords must take their conclusions from that, but I cannot go much further or make promises on hypotheticals, because that is not how the system works.

[Lord McKenzie of Luton]

I understand the noble Lord’s dilemma; he is creating a bit of a dilemma for us. Can we at least agree that if we do not press the amendment tonight we preserve the right to bring back the issue at Third Reading, while accepting that the Minister might not be able to say anything further? It would at least give those of us who are not as close as the Minister is to the detail of the sickness absence stuff and where that might be heading a chance to reflect on what that might mean for this; and in particular if there were to be a change—as the Minister seems to want—and the assessment phase went, how that would be accomplished within the framework of the legislation.

[Lord Freud]

My Lords, I do not think that I can do that. We need to take a view now on this. All I can say is that Third Reading is probably not the time anyway for some of this stuff to come to a head. It is not the point at which my noble friend is thinking about it coming to a head. This kind of thing will probably come to a head when we have the debate between the Commons and the Lords. That is when some of these issues need to be looked at, so it is not helpful or productive to think of it happening at Third Reading. This kind of thing may become more relevant at a later stage, but not at Third Reading.

[Baroness Hollis of Heigham]

Does the Bill contain power by regulation, or would the Minister welcome an amendment to introduce it so that at some point down the line, possibly after further consultation and so on, he can make the changes which at the moment he is minded to make but is not yet in a position to introduce?

[Lord Freud]

Without having those in my ever helpful Box right behind me to respond to that—I hope that they are writing—my strong impression would be that I would have powers in regulation. No, my strong impression is the opposite. I am on my own.

[Baroness Hollis of Heigham]

Perhaps the Minister could write to us.

[Lord Freud]

I think I will owe noble Lords a letter. Thank you very much.

21:14

[Lord McKenzie of Luton]

That was an extremely pertinent question. If in essence we can deal with this in due course when further analysis has been undertaken though regulation, that is fine; we would be happy to rest our case there. If the Minister is saying that primary legislation would be needed to deal with this —if that is the message coming from the Box—we are unlikely to have that opportunity for some little while.

[Lord Freud]

We are looking at the sickness absence review process, which is what this is about, and that is a substantial change that will need primary legislation. So I think my reply is to presume primary legislation.

[Lord McKenzie of Luton]

The Minister has not made this easy. I have been trying as best I can to avoid having a vote on this today.

[Baroness Hollis of Heigham]

If my noble friend will allow me, would the Minister be content if we were to introduce such a power by regulation at Third Reading, which would commit him to nothing or everything, according to how he wished to play it in future?

[Lord Kirkwood of Kirkhope]

Before whoever it is who is speaking sits down, I should say that I think that the Minister is making life difficult for himself. If he cannot take the advice that he is getting from all sides—and I, too, concur with what has been said—I, too, will look to get an expression of opinion from the House, which I really do not want to do. The suggestion that has been made about regulation-making powers is an easy out. I do not care what the Box thinks, actually; the Minister has the knowledge and the wisdom to take that decision right now, which would be a beneficial outcome for everyone.

[Lord McKenzie of Luton]

That has been helpful, as has been the intervention of my noble friend Lady Hollis, and I think that I can see a way forward. We do not need the Government’s permission to introduce an amendment in due course to take a regulation-making power, so if there is not that opportunity at the moment we will find out between now and subsequent Report days or even Third Reading. I think that that is what we will do; it will be a route through this. On that basis, and with that preliminary notice to the Minister, I beg leave to withdraw the amendment.

Amendment 40A withdrawn.

Amendment 40B not moved.

Amendment 41

Moved by

[Lord Freud]

41: Clause 51, page 37, line 14, after “(1)” insert “or (2A)”

Amendment 41 agreed.

Amendments 41A to 42A not moved.

Amendment 43

Moved by

[Lord Freud]

43: After Clause 51, insert the following new Clause—
“Further entitlement after time-limiting
(1) After section 1A of the Welfare Reform Act 2007 (as inserted by section 51 above) there is inserted—
“1B Further entitlement after time-limiting
(1) Where a person’s entitlement to a contributory allowance has ceased as a result of section 1A(1) or (2A) but—
(a) the person has not at any subsequent time ceased to have (or to be treated as having) limited capability for work,(b) the person satisfies the basic conditions, and(c) the person has (or is treated as having) limited capability for work-related activity,the claimant is entitled to an employment and support allowance by virtue of this section.(2) An employment and support allowance entitlement to which is based on this section is to be regarded as a contributory allowance for the purposes of this Part.”
(2) In section 1 of that Act (employment and support allowance), in the definition of “contributory allowance” in subsection (7), after “subsection (2)(a)” there is inserted “(and see section 1B(2))”.”

Amendment 43 agreed.

Clause 52 : Condition relating to youth

Amendment 44 had been retabled as Amendment 45A.

Amendment 45 not moved.

Amendment 45A

Moved by

[Lord Freud]

45A: Clause 52, leave out Clause 52 and insert the following new Clause—
“Condition relating to youth
In section 1 of the Welfare Reform Act 2007 (employment and support allowance), after subsection (3) there is inserted—
“(3A) After the coming into force of this subsection no claim may be made for an employment and support allowance by virtue of the third condition set out in Part 1 of Schedule 1 (youth).””

[Lord McKenzie of Luton]

This amendment was in the same group as the amendment on which the Government were defeated but runs contrary to the decision that the House made previously. The assumption is that this matter will not be pressed. Otherwise, the Government give us no alternative but to force a vote on it.

[Lord Freud]

Yes, my Lords, we would like to take this to a vote.

21:19

Division 4

Ayes: 132

---

Conservative: 91
Liberal Democrat: 37
Ulster Unionist Party: 1
Crossbench: 1

Noes: 49

---

Labour: 28
Crossbench: 15
Ulster Unionist Party: 2
Bishops: 1
Plaid Cymru: 1

21:30

Amendment 46

Moved by

[Baroness Lister of Burtersett]

46: Clause 52, leave out Clause 52 and insert the following new Clause—
“Condition relating to youth
In paragraph 4 of Schedule 1 to the Welfare Reform Act 2007 (condition relating to youth), after sub-paragraph (1)(d) insert—“(e) after the assessment phase has ended, the claimant has limited capacity for work-related activity.””

[The Deputy Speaker (Viscount Ullswater)]

The Question is that this amendment be agreed to. As many as are of that opinion will say, “Content”.

[Noble Lords]

Content.

[The Deputy Speaker]

To the contrary, “Not Content”.

[Noble Lords]

Not Content.

[Lord McKenzie of Luton]

Forgive me—are we not dealing here with Amendment 46, which the Government have accepted is consequential on Amendment 36A?

[Baroness Hollis of Heigham]

My Lords, I was the person who drafted Amendment 36A. The noble Baroness, Lady Meacher, clearly introduced it as the paving amendment to Amendment 46. So the Government cannot do as they are now suggesting.

[Lord Freud]

My Lords, let me read out what I said in my speech. I said that I confirm that the Government see Amendment 46 as linked to Amendment 36A, but separate Divisions will be required on all amendments in this group.

[Lord McKenzie of Luton]

My Lords, the noble Lord does not make that happen just by asserting it. One amendment is consequential on the other. We have had a very clear and substantial vote on this, and it is quite disgraceful that the Government are seeking to undermine that.

[Baroness Hollis of Heigham]

I am sure that the noble Lord, Lord Freud, does not wish to appear to be subverting the view of the entire House, which was expressed in the full knowledge that the amendment which we voted on was devised—I devised it—as a paving amendment to a substantive one, so that we could debate it in good time. Most of the population of the House has gone home, believing in good faith that the previous vote has established the principle—as it has. However, the noble Lord is trying to renege on that by forcing a vote despite the late-night keeping of the roster. That would be quite improper and quite unprecedented, and I strongly suggest that he think again.

[Lord Freud]

My Lords, I cannot understand this. I was extremely clear, and have been really clear all the way through, about which amendments relate to which, and which have to be taken separately. I read out what I said. I said it quite loudly and all noble Lords heard it. I cannot feel that it is right to accuse me of anything but absolute clarity in the House.

[Lord Bassam of Brighton]

My Lords, this is somewhat unprecedented, and I am trying to be helpful here. The House is in danger of getting into a considerable muddle. I respectfully suggest to your Lordships that we should perhaps adjourn to try to sort this out, or perhaps come back to it when the House is in fuller session. I do not think that anyone on our side wants to accuse the Government of sharp practice, but that is certainly how it feels at the moment. That is not right or good for the reputation of the House. I ask the Minister to reconsider the course upon which he is currently embarked. Perhaps I may continue with a few more words, and perhaps the Minister will be enabled with a response that can help. I do not want the House to lose the respect that it has, and it should not be frustrated in the way in which the Minister is currently suggesting. My noble friend Lady Hollis made a very reasonable point earlier in addressing this issue. It would serve the Government better if they withdrew for a moment and paused to think about where they are going, so that we can better reflect and try to sort this out in the way that is usually in the House’s best tradition.

[Lord Freud]

My Lords, I have thought more deeply and accept that the amendment is consequential.

[Lord Bassam of Brighton]

I thank the noble Lord for that moment’s reflection, which does great service to your Lordships' House. I am very grateful to him.

Amendment 46 agreed.

Clause 56: Claimant responsibilities for employment and support allowance

Amendment 47 not moved.

Clause 68: Housing benefit: determination of appropriate maximum

Amendments 48 and 49 not moved.

Clause 69: Ending of discretionary payments

Amendment 50

Moved by

[Baroness Lister of Burtersett]

50: Clause 69, page 54, line 8, at end insert “providing those amounts are ring-fenced for the purpose set out in that Act”

[Baroness Lister of Burtersett]

My Lords, I hope that this debate will be a bit more straightforward than what we have just been discussing. The amendment aims to protect the ultimate safety net in our social security system by ring-fencing the money devoted to it when responsibility is devolved to local authorities without any statutory duties attached.

Clause 69 abolishes the discretionary Social Fund, described by Barnardo’s as a lifeline for some of the poorest and most marginalised people in our society. Together with Family Action, to which I am indebted for its assistance, it is among many voluntary organisations looking to your Lordships' House to safeguard that lifeline. Indeed, 20 have this week written an open letter to the Minister. This is not the place to make the case against the abolition of the discretionary Social Fund; we rehearsed that in Grand Committee. Instead, it is up to us to ensure that when the discretionary Social Fund is abolished, the money allocated to local authorities and the devolved Administrations is used for the purpose intended.

The Social Fund was introduced in the late 1980s in place of a system of statutory payments to help some of the poorest members of society with one-off needs. At that time, the noble Lord, Lord Kirkwood of Kirkhope, and I were ranged against the noble Lord, Lord Newton of Braintree, who unfortunately cannot be with us this evening for health reasons. Today, we are trying to salvage something from the forthcoming wreckage of what we now acknowledge that the noble Lord, Lord Newton, achieved—one of life's ironies.

Through a system of community care grants and crisis loans, the discretionary Social Fund provides vital cash assistance to some of the most vulnerable members of the community. CCGs help people on out-of-work benefits to remain in or set up their own home, to retain their independence. We are talking, for instance, about young people leaving a children's home or foster care, people with chronic health conditions or disabilities who need aids and adaptations to allow them to live in the community—about one-third of recipients are estimated to be disabled—and women who have fled domestic violence. As one such woman said:

“The community care grant meant such a lot. I had been in a refuge. I had very few possessions as I had to leave them all behind ...The CCG helped me make my flat into a home”.

Crisis loans are interest-free loans payable where there is an immediate threat to health or safety—for instance fares when a child has to be taken to hospital or money to cover the cost of replacements following a flood or fire.

We accept that the discretionary Social Fund needs reform, but this is not reform, it is abolition with no guarantee that local authorities will pick up the pieces using the money allocated to them. The aim of the amendment is to write into the Bill just such a guarantee and thereby achieve the Government's aim of protecting the most vulnerable.

Experience suggests that without some form of statutory ring-fencing, there is no way to ensure that the money allocated to local authorities and devolved Administrations will be spent in the way that the Government and Parliament intend. That is not a criticism of local authorities but simple realism. Local authorities are already hard-pressed to meet all their statutory functions in the face of budget cuts. This pot of money could be very tempting.

In Grand Committee, the noble Lord, Lord Brooke of Sutton Mandeville, held us spellbound with a cautionary tale of what happened when he was a junior Minister of higher education, and money intended for Liverpool Polytechnic was purloined by Liverpool council for housing. It clearly impressed the Minister. More recent experience is that of Supporting People—a fund designed to help vulnerable groups. Since the ring-fence was removed from that, overall spending on Supporting People has been cut by more than 10 percentage points more than the settlement received by local authorities for the purpose. That is an existing budget; the pressure to cut a wholly new budget will surely be greater.

We should listen to what local authorities themselves have to say. Recently published DWP research with authorities addressed this issue. While admittedly some authorities were unenthusiastic about ring-fencing—perhaps seeing tying their hands in that way as being like turkeys voting for Christmas—a number were,

“concerned that without a ringfence ... funding would quickly become amalgamated into existing budgets and as a result its identity, visibility and purpose would be lost. A second concern was that Councillors or Directorate heads would redirect the funding to plug gaps in other budgets”.

It is just such fears that this amendment is designed to allay.

Both the present and previous Social Fund Commissioners have expressed similar anxieties. What will happen to the woman who has fled domestic violence and who needs to turn a house into a home for her family, or the disabled person anxious to remain in her home but without the means to do so, or the ex-prisoner who needs to set up home? The potential consequences have been spelt out by organisations such as Citizens Advice and Family Action: greater reliance on overstretched charities, on food banks and on high-cost lenders, as the Joint Committee on Human Rights also warned in its report on the Bill, or simply going without, with a potential risk to health or safety.

A child rights impact assessment of the Bill, just published by the office of the Children’s Commissioner, suggests that such consequences mean that the clauses in the Bill abolishing the Social Fund could be in breach of the UN Convention on the Rights of the Child on a number of counts. Can the Minister—wherever he is—please tell the House what account has been taken of the convention and what the Government’s response is to this advice? I am sure that your Lordships’ House would not want to agree to a breach of obligations under the convention.

The case for ring-fencing was made from all Benches in Grand Committee. In response, the Minister acknowledged the strength of feeling and indeed accepted the spirit of the amendment when he said:

“It is quite clear that we need to make sure, if we are putting money out for vulnerable people, that it goes to vulnerable people and is not diverted elsewhere”.—[Official Report, 10/11/11; col. GC 140.]

I could not have put it better myself.

On the other hand, he argued against ring-fencing. He contended that ring-fencing would restrict innovative thinking and limit local authorities’ ability to devise schemes that best address the specific needs in their respective areas. However, ring-fencing does not prevent innovative schemes; it simply prevents local authorities using the money for some other purpose entirely.

The Minister promised to reflect on the arguments put in Committee. I am sure that all noble Lords will be delighted if he has come up with a solution to the dilemma in which he found himself—that of accepting the spirit of ring-fencing but not the legislative means of achieving it. If your Lordships’ House should pass this amendment, it would not cost the Government an additional penny, which should be music to the ears of the government Benches. On the contrary, it would help to ensure that the money voted by Parliament was spent on safeguarding the health and well-being of the vulnerable people for whom it was intended. I beg to move.

[Baroness Turner of Camden]

My Lords, I support the amendment. When I first read the Bill, it had been my intention to put down an amendment to try to remove the clauses dealing with the Social Fund. Clauses 69 to 72 outline the abolition of the discretionary Social Fund, including community care grants and crisis loans. As we have heard from my noble friend Lady Lister, the Government expect these responsibilities to be undertaken by local authorities.

We are dealing here with quite desperate people. The funds provide assistance for people at the very end of their tether. They have no one to turn to and nowhere else to go. The problem is that local authorities are now under considerable pressure themselves. They are having to economise and there is no guarantee that the very poor people for whom the funds provided some form of immediate support will figure very high in the list of requirements so far as local authorities are concerned.

I did not process my amendment earlier but my fears are very well met in the amendment now before the House. As my noble friend indicated, it provides for ring-fencing to ensure that a local authority makes provision for the people already provided for by the Social Fund arrangements. There are many instances, as we are aware, of women facing domestic violence, which is rather horrifying. Much of it takes place within families, sometimes within immigrant families, and the women have absolutely nowhere to go. Some of the violence is unbelievably cruel and sometimes it surfaces in cases that eventually reach the courts. We have an obligation to ensure that people in such desperation have somewhere to turn.

There are other levels of deprivation and concern that have already been referred to, involving children, homeless people and those who have just been released from institutional care. They are people who have nowhere else to go and we have to provide that support for them. I very much hope that the Government will be persuaded to accept this amendment.

21:45

[Lord Blair of Boughton]

My Lords, I am a Cross-Bencher who does not necessarily spend all day in this House but I have been here all day for this amendment because I have seen the effects of the Social Fund and on victims of domestic violence, in particular. The idea that we would allow the Social Fund to become a discretionary matter for local authorities is an abdication of our duties to the poor and the desperate. I very much support the amendment tabled by the noble Baroness, Lady Lister.

[Lord Kirkwood of Kirkhope]

My Lords, I should like to make a contribution to the debate as someone who was happy to co-sponsor the amendment of my longstanding and noble friend Lady Lister.

This has happened partly because the department thought that the Social Fund was beginning to become too difficult to handle. I know that the current explanation is that it is all part of the localism agenda, but I do not believe that. The criticisms that have been well set out by my noble friend Lady Lister are all valid. They are concerns that I share. More than anything else, I am beginning to hear from my spies, who are everywhere, that local authorities are coming to arrangements—if I were them I would do the same—for benefits in kind with white goods providers and food banks, though not quite soup kitchens yet. The point that I am making is that there is no substitute in certain circumstances, when families are in crisis and people are at risk of prejudice to their health, to the availability of access to liquid cash. There is no substitute to get them out of the kind of classic crises, whether domestic violence or other things. They need hot money and they need it right now to get them into a place where they can become safer. No amount of ingenuity, local creativity, co-operation or anything else is a substitute for that. We are not safe in this House to devolve this money—I shall come on to how it will be devolved in a moment—without recognising the value to family households in crises of having access to cash.

There is a very important point for Parliament about the oversight of this money. As colleagues know, we have a sophisticated system. There is a Social Fund commissioner and a variety of excellent public servants have served in that office with distinction. They have overseen the independent review service and have provided extremely useful current advice, information and data that have helped to stay on top of some of the policy issues. All of that is being thrown to the winds. I deeply regret that and said so at some length in Committee. The work that the Social Fund commissioners did in the past will be missed. I can see no way that Parliament will be able to stay as closely in touch with developments in this important policy area under the regime proposed in the clause.

I have no confidence at all that we can be secure in the knowledge of what will happen in Scotland and Wales. The Government may be able to control to some extent the conditions and provisions under which local authorities in England and perhaps Wales—although I am not sure about Wales—will comply with these regulations. However, certainly in Scotland the money will be given to the Scottish Government, or will pass through the Scottish Government, and noble Lords may have noticed that arguments have started to mature north of the border that perhaps will knock relations between the Westminster and Scottish Governments temporarily out of kilter. My serious point is that there will be different legalities relating to the controls and dispositions that will be made by local authorities in England and north of the border. I have no way of knowing how the Government will handle that.

No additional cost is involved in the amendment. That is an important consideration, given our earlier debates. We had some good discussions on this in Committee and I, like the noble Baroness, thought we had got some constructive and seriously positive responses from the Minister. I simply want to know how Clause 69 in all its glory and with its 10 subsections will be translated into practice and implemented.

I assume that there will be further opportunities at the regulation-laying stage—assuming that we do not agree any of the amendments that I think are necessary to improve the Bill in this important area—when the powers and the money are transferred. The money is important because another unique aspect of the Social Fund is that it has loans that are repaid, and the repaid loans refurbish the resources available for further use by other clients at a later stage. I am not sure exactly what amount of money will be transferred. I am certainly not clear—and I do not think that anybody else is—about how it will be disposed of, in relation to who gets what and the disbursement formula that will be used to allocate money. I assume that it will be done on a basis of need, but I have no way of knowing what that is. If I have missed it, I would be very pleased to be pointed towards the work that the Government are doing.

This is a really important part of the Bill and the amendment is the very least that we should ask for. This House should say that whatever sum of money is available at the moment, it would not be safe for us to let it be devolved to local authorities. I am sure that they will do their best and I have nothing against them, but we must impose a condition that any moneys that are disposed of and devolved for that purpose must be devoted to that purpose and to no other.

[Baroness Howe of Idlicote]

My Lords, I remember there being considerable concern in this area upstairs in Committee. Having listened to what the noble Baronesses, Lady Lister and Lady Turner, said, in particular about the plan in the amendment tabled by the noble Baroness, Lady Lister, I think that there is a way of dealing with the situation. Some of the problems of exactly how it will be spread out and all the rest of it might need a little more administrative attention, but I think this is a satisfactory answer about what to do with this sum of money. I would back it like that. Let us end the argument.

[The Lord Bishop of Bath and Wells]

My Lords, it is often said that we read the world from the position we occupy in it. In particular, users of the Social Fund are unlikely to be very visible and able to hold local councils to account. Recent analysis of some 500 discretionary Social Fund applications has revealed that 12 per cent involved someone leaving institutional or residential care, 20 per cent involved someone who had experienced a period of homelessness and 8 per cent involved someone leaving prison. These groups are much less likely than others to be able to demonstrate local connections, and without crucial assistance from community care grants to buy essential items such as cooking equipment and bedding, they may struggle to sustain and maintain a home. That puts those who have been offenders at risk of reoffending or of moving back into temporary or institutional accommodation, which is far more costly and means they lose their newly found independence. The issue of vulnerable groups and local connection is recognised in housing legislation where people with no local connection must be assisted by the local authority to which they originally applied. I believe that similar provision should apply to protect such groups in the absence of a standard national Social Fund, especially as the Welfare Reform Bill also abolishes the independent review service that reviews refused Social Fund applications. I hope that we can take note of this amendment.

[Baroness Hollis of Heigham]

My Lords, I, too, support my noble friend’s amendment. The whole point about the Social Fund is that all the other elements in the social security system are nationally determined and demand-led—AME-led. The Social Fund has always represented an element of flexibility, of discretionary judgment, for those who do not fit tidily into categories and need only income. When, for example, people needed a modest amount of capital for a fridge, an oven or whatever, they could go to the Social Fund. If they needed to set up after a flood or a fire, they could go to the Social Fund in ways that you cannot cover within a national framework, except by a discretionary local grant.

That is fine, but the problem with the Government’s current proposal to send it to local government is threefold. First, there will be no necessary standards across local government so that similar circumstances are met in similar ways by different local authorities. For good and for bad, there will be a postcode lottery, and we know that demand will almost certainly be greatest in some of the inner cities and least, perhaps, in some of the more prosperous suburbs. There will be no consistency of standards.

Secondly, when that happens, and in the absence of identified funds, people who need that money will go not just to payday loan companies, because they do not have the security, or to pawn shops but to the forms of debt that we are all appalled by. One of the very good things about the Social Fund is that repayment, with no more than £5 or £10 per week of your income going out, is effectively interest-free. By pulling the Social Fund away from people who are most in need of some element of credit to get them from here to there, we are sending them into much more costly spirals of debt and very real problems of repayment. The third problem associated with this proposal is the guarantees we need to have that the money will be spent on the people for whom it is ordained.

The Minister can help us in this if he makes it very clear that local authorities will have no wriggle room to spend the money on anything other than the groups of people whom we are identifying. The firmer he can be in making clear to the House the statutory nature of that guidance, the more he will ease some of our concerns. He also needs to make it clear to the House what elements of the Social Fund will remain AME-demand-led and how much of it will be recycled and capped within a cash grant, what the situation will be in a local emergency—a factory explosion, a major flooding disaster or the like—and whether the local authority, as opposed to central government, has the capacity to respond to that in its social fund.

Therefore, can the Minister tell us first, how he can absolutely guarantee—short of ring-fencing, if that is not where he is prepared to go—that that is reported back to Parliament? Secondly, how he will manage the mixture of AME and DEL expenditure that currently goes into the Social Fund to ensure that local need is properly met?

22:00

[Baroness Sherlock]

My Lords, I have two specific questions for the Minister. Following on from my noble friend Lady Hollis, even if the money were to be spent on the same people, how can the Government guarantee that it is spent for the purposes for which the Social Fund was originally created?

Looking at the local authority fieldwork summary report mentioned by my noble friend Lady Lister, the fear is clearly out there in local authorities that the money will be sucked up by social care budgets. For example, even if it was spent on child protection, that would simply be displacing other money and there would not then be money available to enable local authorities to give cash to vulnerable families. How will the Minister ensure that it gets to the right people and for the right purpose?

My second question follows on from what the noble Baroness, Lady Lister, said about the Office of the Children’s Commissioner, which believes that the Government are in breach of Article 9 of the UN Convention on the Rights of the Child. Has the Minister taken advice on this matter and, if so, will he share it with the House?

[Baroness Meacher]

My Lords, I rise to speak to Amendment 50ZC and I will try to speak extremely briefly in view of the hour. This amendment seeks to ensure that the Social Fund remains in place—

[Baroness Garden of Frognal]

With great respect to the noble Baroness, that is in the next group. We are going to stop on this group.

[Baroness Meacher]

I accept that agreement—excellent.

[Baroness Hayter of Kentish Town]

My Lords, I think I have the right group. As we have heard, unless this Bill is amended, it will fundamentally alter discretionary payments. Budgeting loans will be replaced by payments on account as part of the universal credit. Community care grants, which help those on means-tested benefits stay in their own homes, and crisis loans, which basically do what it says on the tin —they are for a crisis and they are a loan—will both be abolished and the money handed over to local authorities.

As has been said, the problem is that there are no guarantees that similar support will be available to vulnerable people who need it; the funding will not be ring-fenced; and there will be no statutory duties attached, not even any guidance of the sort that my noble friend Lady Hollis has requested. Earlier the Government were very clear that they would not issue any guidance—we trust they may have had time to rethink that. Without guidance, which would guarantee access to certain groups or place a statutory duty on councils to provide the sort of service that has existed, or to ring-fence the money, there is a real danger that the kinds of support that have been available will simply dry up.

The lack of ring-fencing caused the biggest concern to those responding to the Government’s consultation: 42 per cent of respondents raised it, a higher proportion than on any other part of the proposals. The various charities, which know a thing or two about vulnerable people, have, I am sure, contacted the Government—they certainly contacted us about this. Crisis is,

“deeply concerned about the impact on homeless people moving into independent, settled accommodation”.

Family Action is similarly,

“seriously concerned about the abolition of the discretionary Social Fund”,

which it fears,

“will remove one of the final safety nets for some of the most vulnerable and needy members of society”.

Barnardo’s also knows a thing or two about working with vulnerable people. It feels that,

“the Social Fund is a lifeline for many”

and is therefore “seriously concerned” about its removal and the money being given to local authorities, should this not be ring-fenced. Scope is similarly,

“deeply concerned that the Government plans to devolve a vital source of support … with no intention of ring-fencing”.

I am sure that some 22 charities have been in contact because they are worried about the loss of this last safety net for the most vulnerable when they suffer from emergency situations in the form of traumatic events such as homelessness and domestic violence, which has already been referred to by the noble Lord, Lord Blair.

The lack of the ring-fence was mentioned here tonight by the noble Lord, Lord Kirkwood, and in Committee, including by the noble Lord, Lord German, who is not in his place. In response to that, the Minister, who also is not in his place, said that he was extremely concerned about what was being said about the lack of a ring-fence and that he would reflect on the issues raised. I trust that his reflection is going to be shared with us shortly. As we have heard, a third of those getting community care grants are disabled, a quarter are lone parents and one in 10 are pensioners. These moneys go to people moving out of residential or institutional care to live independently, including children moving on from care and people coming out of homeless hostels, psychiatric hospitals and women’s refuges. These are exactly the sort of people who are being helped. In the future, of course, we may rather sadly have to add those who are forced to move as a result of the Government’s so-called under-occupancy rules, should the Government insist on overturning your Lordships’ amendment. Similarly, we risk larger families being forced to move elsewhere once the benefit cap, if that is not amended, affects high-rent areas such as London and the south-east. Again, people will be forced to move and set up home anew. Community care grants also help families at risk due to exceptional pressures. We have heard about overcrowding, relationship breakdown and the examples of a house fire or flooding.

Perhaps the Minister could tell the House whether he has read Destination Unknown, a Demos report tracking the lives of disabled families through the cuts. If he has read it, does he recall the central message that, for the disabled, one unexpected event such as an added illness, a mix-up over benefits, the need for new wheels on an electric chair or longer taxi rides to medical appointments can completely blow a person’s budget out of the water? The disabled tend to have no savings, no leeway and nothing else to rely on. It is exactly this sort of money that has been available to them. Charities, which have also often stepped in, are seeing their supply of funding drying up. They are finding themselves overburdened with demands. Jobs are less available, and the traditional hiccups or slight delays in payments that are bound to occur with the introduction of new systems that we will see at a later stage can have a devastating effect on the week-to-week budgets of disabled people. They just manage, but it is these sorts of emergency funds which can make all the difference when something goes wrong.

Crisis loans are slightly different from the other elements and the DWP has claimed that this expenditure rose following the introduction of the telephone-based application scheme. However, there is no actual evidence that it was a cause rather than a correlation which showed on the figures as the rise in claims also coincided with an increase in unemployment. Also, it is important to remember that the crisis loan scheme is a loan.

Another report that the House may be aware of was published by Barnardo’s in December last year on the vicious circle and heavy burden of credit on low- income families. Families can become trapped in a cycle of debt, which can have a very persistent effect. The Social Fund offers a far better alternative to vulnerable families than home credit, payday loans and other forms of high-interest lending, including of course illegal loan sharks. It is estimated that a £100 loan from a loan shark needs repayments of £285 and takes 57 weeks to repay. The same loan from the Social Fund costs £100 and takes 15 weeks to repay. Furthermore, these are the amounts we are talking about. I think that the average award last year was just £83, so we are not talking about hundreds of thousands, but we are talking about money that makes an enormous difference to a certain number of people. These loans can be life-changing. They can be the rent for a new home; they can be the move out of institutional care and help to pay either that rent up front or for the cooker that enables one to live there.

Our concern is that a lack of ring-fencing will mean that these loans are simply not available under a new scheme. Councils, as has been heard, are already worried that the money will drift away elsewhere, and we understand the temptation for that. We have already seen 123 local authorities increase their meals-on-wheels charges, some by up to 400 per cent, while their own grants to local voluntary agencies, which used to be able to help, are drying up. We should not be surprised if local authorities were a little tempted to move this funding elsewhere.

The amendment does not seek to frustrate the Government’s intention to localise, nor does it argue with the contention that need will best be met if identified at a local level. It seeks to provide a safeguard for the many people who need the support that the Social Fund now provides to help them in a crisis. It is because of the strong concerns that we have heard expressed across the House about the vulnerability of these groups of people if this money is not available that we support the amendment.

As Barnardo’s points out, some local authorities do not yet have expertise in working with the poorest. An inner London borough may well understand how to implement the infrastructure to offer a Social Fund replacement, but this is less likely in a shire county with a smaller and more dispersed population of disadvantaged people. Indeed, localised replacement is likely to be provided through adult social services. Many people who need the support of the Social Fund, such as homeless people, will not be clients of social services, so they may struggle to access it anyway. Without ring-fencing and some guidelines about who it should go to, we have grave worries about the gap that will be left. I hope that the Minister’s period of reflection on the amendment will enable him to accept it.

[Lord De Mauley]

My Lords, I absolutely understand what the noble Baroness’s Amendment 50 is trying to achieve. I assure your Lordships that we are equally committed to ensuring that this money is targeted on and reaches the most vulnerable people. We appreciate the importance of this money to vulnerable people, as the noble Baroness, Lady Hayter, has just explained.

As noble Lords have said, ring-fencing was debated in Committee and the Government have thought carefully about the valuable points that were made. We share the desire of noble Lords to ensure that these funds are used in the way intended and are not lost in the general pool of local authority funding.

We have concluded that the most appropriate way to make clear to local authorities the purpose of the funding is by setting it out in a settlement letter from the Secretary of State that will accompany the funding that is sent to each local authority. This letter will set out clearly what the funding is to be used for and describe the outcome that must be achieved. It is important that local authorities are not constrained in how they achieve that outcome, so the letter will not prescribe the method that should be used.

[Baroness Hollis of Heigham]

Obviously this letter has not yet been sent; I presume that it has been drafted. Would the Minister be willing to circulate to Members of this House taking part in the debate the draft of the proposed settlement letter that he expects to send, so that we can be reassured? I am sure that his intentions are entirely beneficent in this regard, but it might assuage some of our concerns were we to see a letter in draft before it was sent out. If we had comments on it, we could then feed them back to him.

[Lord De Mauley]

My Lords, the letter is not yet in draft. If it is possible to do something along the lines that the noble Baroness asks, I will do it, but I hope she appreciates that I will make no commitment on that.

The letter will ensure that the money intended for vulnerable people goes to vulnerable people without curtailing the freedom of local authorities to tailor provision and, for example, pool funding, without imposing a one-size-fits-all approach that does not take account of the different needs faced by different areas. Furthermore, to underline its purpose, the funding will be distributed to local authorities through a specific revenue grant, rather than including it with the rest of their general expenditure in the main revenue support grant.

22:15

I acknowledge that ring-fencing has been put forward as a means of ensuring that the money is spent appropriately. Our concern is that if the funding is ring-fenced in the way the amendment requires, local authorities will be prevented from investing in services or pooling the money with funding for other existing services to provide a comprehensive and effective support system for the most vulnerable in their communities.

We have thought further on the issue of how we can check that the funding for this new provision has indeed helped to support vulnerable people. The department is already planning to conduct a review in 2014-15, obtaining appropriate information from a representative cross-section of local authorities in order to help inform future funding levels. Following the helpful contributions of noble Lords in Committee, I am able to commit that this exercise will be extended to provide more information about the way in which local authorities have used the funding.

The noble Baroness, Lady Lister, raised a human rights question. The policy is developed taking account of the Government’s commitment to human rights. We do not accept that the Social Fund changes breach the convention. Support will still be provided for children, and local authorities will be able to link the new provision with existing responsibilities such as those through the Children Act.

[Baroness Sherlock]

I asked specifically whether the Government had sought or received any legal advice about whether or not this proposal was compliant with the UN Convention on the Rights of the Child. Can the Minister answer that question?

[Lord De Mauley]

Perhaps I may come to that in a moment.

[Baroness Sherlock]

I shall look forward to it.

[Lord De Mauley]

My noble friend Lord Kirkwood asked about the structure of what is being transferred. The current Social Fund AME allocation of £178 million will fund the new local provision. It will be distributed based on spend at the point of transfer nationally between England, Scotland and Wales. In England, the funding will be devolved to upper-tier local authorities. Again this will be based on Social Fund expenditure. The AME funding splits £141 million to replace community care grants and £36 million for emergency provision. The first year of the new system will be 2013-14 and the funding will be the same as the amounts in 2012-13.

My noble friend asked about the Social Fund Commissioner. The Independent Review Service changed 20,886 decisions in 2010-11. The number of crisis loans, budgeting loans and community care grant decisions made was 5,595,000. The IRS makes decisions on cases that can go one way or another depending on the discretion of the decision-maker. All decisions on the discretionary Social Fund are also first subject to an internal review in Jobcentre Plus.

My noble friend asked about the possible substitution for cash and white goods and indicated that he thought it might not meet the needs. There will of course still be national provision of advances of benefit through the new payments-on-account scheme that will replace budgeting loans and crisis loans for alignment.

The noble Baroness, Lady Hollis, asked how the mixture of AME and DEL will be managed. All the money is AME. There will be, of course, additional admin funding on top to cover the cost of the new burdens.

[Baroness Hollis of Heigham]

Is the Minister therefore saying that if local authorities represent that there is increased need based on the criteria in the letter of guidance, the Government will respond with increased expenditure because AME, of course, means that it is demand led?

[Lord De Mauley]

I would not go that far.

[Baroness Hollis of Heigham]

I thought that the noble Lord would not. I do not think that we can say that it is AME, in that case, if it is not. The point about AME within DWP is that it responds to demand. If it is going to be a cash grant, it is not going to be demand; it will effectively be DEL.

[Lord De Mauley]

Historically it has been AME. The funding for the year 2012-13 will be the funding that is transferred in 2013-14. It will not increase by that amount. However, there are the budgeting loans to which I have referred as well.

The noble Baroness, Lady Hayter, raised a question over benefits. Short-term advances will replace crisis loans for alignment as part of a national payments on account scheme. These advances of benefit will cover those in financial need as a result of waiting for an increase in benefit or for a benefit claim to be dealt with.

On the question asked by the noble Baroness, Lady Sherlock, the policy is developed taking account of all relevant rights. We did not take specific legal advice.

I hope that what I have said will enable the noble Baroness to withdraw her amendment.

[Baroness Lister of Burtersett]

I am very grateful to all noble Lords who spoke in support of the amendment, in particular the noble Lord, Lord Blair, who waited patiently all day and has shown his commitment to the importance of this amendment in doing so. The noble Lord, Lord Kirkwood, is ever a supporter on the side of righteousness and rightly said that ring-fencing is the very least that noble Lords should expect.

I am grateful to the Minister for the spirit in which he responded to the amendment. It was very much the spirit in Grand Committee by the end—the recognition that we must ensure that the money is spent. As my noble friend Lady Sherlock said, it is not just on the people for whom it is intended but for the purpose for which it is intended. I am afraid that I am personally not convinced that a settlement letter is sufficient to ensure that. We have made some progress but not nearly enough. The Minister then half-answered the question that I was going to asked on how the Government would check that the settlement letter was followed. I think that he said that there would be a review in 2014-15 of a cross-section of local authorities. Perhaps I may suggest that perhaps he would like to consider Amendment 50ZA before we come back, as it would go further than that and require local authorities to report on how they use the money, because that is the only way in which to be sure that the settlement letter is adhered to.

I am afraid that I am not terribly convinced by the Minister’s response to the question asked by my noble friend Lady Sherlock about the UN convention on children’s rights. If the Government have not taken legal advice—and I believe that the Children’s Commissioner’s report is only just published—I would want to know specifically what the Government’s response is to that report and to what the Children’s Commissioner says. We have not heard that response tonight. However, I am aware that it is very late and it is not the time to test the opinion of the House, even though not one noble Lord has spoken in support of the Government and all noble Lords have spoken in support of the amendment. Nevertheless, I beg leave to withdraw the amendment.

Amendment 50 withdrawn.

Consideration on Report adjourned.

House adjourned at 10.24 pm.