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Gavin Williamson (South Staffordshire) (Con)
1. What steps she is taking to promote Wales as a destination for inward investment.
The Secretary of State for Wales (Mrs Cheryl Gillan)
You may have noticed, Mr Speaker, that some Members are wearing leek ties or daffodils in advance of St David’s day. May I take this opportunity to wish everybody a happy St David’s day for tomorrow, 1 March?
I am committed to working with UK Trade & Investment, the Welsh Government and others to improve the level of inward investment that is attracted to Wales. Last week’s report by the Welsh Affairs Committee highlights a number of important issues. In particular, the need for joint working between this Government and the Welsh Government is very clear.
Gavin Williamson
Does my right hon. Friend welcome the Welsh Affairs Committee report and agree with it that the Welsh Government should engage more positively with the UK Government to attract investment to Wales?
Mrs Gillan
I can reassure my hon. Friend that I welcome the sterling work of the Welsh Affairs Committee, as I am sure do all Members, given that it was a unanimous report. It highlights areas that must be addressed by the UK Government and the Welsh Government. Recently, I met Nick Baird, the chief executive of UKTI, to discuss the response. I have said right from the start of this Government that I want to encourage closer working between the Welsh Government and the UK Government, particularly in the light of some of the disappointing figures in Wales.
Chris Evans (Islwyn) (Lab/Co-op)
General Dynamics has celebrated 10 successful years in my constituency. Will the Secretary of State congratulate the Labour Government, who were instrumental in bringing General Dynamics to my constituency?
Mrs Gillan
I have always said that politicians of all parties should co-operate to bring inward investment to both the United Kingdom and Wales. I have great pleasure in congratulating any individuals who were involved in bringing General Dynamics to Wales. I have visited General Dynamics on many occasions and it is an excellent company. I am pleased to concur with the hon. Gentleman’s sentiment.
Karen Lumley (Redditch) (Con)
Does the Secretary of State believe that restoring the Welsh Development Agency brand would reignite inward investment to Wales?
Mrs Gillan
I think that—[Interruption.] The personal remarks from a sedentary position have put me off my stride temporarily, even though they were not about me. My hon. Friend is absolutely right that branding is exceedingly important. There is no doubt in the UKTI report by the Welsh Affairs Committee that the WDA was a great brand for Wales that was well known across the world. I know that many people would like to bring it back. I think that is worth considering, although perhaps in another form. There is no doubt that branding is an important aspect when marketing Wales.
Mr Peter Hain (Neath) (Lab)
I join the Secretary of State in marking St David’s day. Will she join me in marking Wales’s magnificent triple crown victory over England on Saturday? I am sure she will have no trouble in doing so.
Since coming to office, how much private sector inward investment have the Secretary of State and her Government helped to bring to Wales?
Mrs Gillan
What a magnificent victory that was. It brought a tear to a girl’s eye to see the team doing so well. As far as the match on Sunday goes, Cardiff were robbed and they played very well.
Inward investment and that side of business life are devolved to the Labour Welsh Assembly Government, as the right hon. Gentleman should know, given that he was an architect of the legislation. Since coming into government, I have met delegations from Taiwan, China, Turkey, Japan and Russia to promote Wales as an investment decision. Indeed, I launched the first ever trade mission of Welsh businesses to Bangladesh, led by the Wales Bangladesh chamber of commerce. I stress to the right hon. Gentleman that there needs to be a partnership between the UK Government and the Welsh Government because when making inward investment decisions companies look at the UK as a whole. We need to give them reasons to go to Wales.
Mr Speaker
The Secretary of State’s replies are immensely courteous, but I am afraid that they are a bit long.
Mr Hain
I thank the Secretary of State for her reply, but remind her that in the 15 months since the Government spending review, the UK economy has grown by a miserable 0.2%—15 times less over the same period than the Office for Budget Responsibility’s 3% growth prediction in June 2010 after Labour left office. That collapse has massively damaged inward investment and jobs in Wales. Is it not high time that the Government changed course and followed the lead of the Labour Welsh Government with their Jobs Growth Wales scheme, which provides jobs for 4,000 young people in Wales? Where the Tories are hammering Wales, Labour is standing up for Wales.
Mrs Gillan
I have to say that I will take no lessons from the right hon. Gentleman, particularly given that, since we came into government, we are investing £1 billion in electrifying the great western main line and putting £60 million into broadband. It is important that both Governments work together. If the First Minister goes on a business delegation and brings back business to Wales I will be delighted, but I think that we should work together—and, for the right hon. Gentleman’s information, we will be sticking to plan A.
Mr David Hanson (Delyn) (Lab)
2. What assessment she has made of the effect of changes to feed-in tariffs on the Welsh economy.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
We are continuing to consult and engage with the solar industry on changes to the feed-in tariff scheme and our assessments are ongoing. There are several key innovative businesses in the solar industry in Wales and we are committed to ensuring that they have a prosperous future.
Mr Hanson
According to the Department of Energy and Climate Change’s own figures, the industry is likely to shrink by a third, which means 5,000 jobs, in 2012 as a direct result of Government policies that the Under-Secretary has supported. How many of those jobs will be lost in Wales? Will he put his hand up and say that it has been a hash from start to finish?
Mr Jones
I would certainly say that it was a hash at its inception, because the scheme that the Government of which the right hon. Gentleman was a member put in place was poorly designed and lacked the flexibility to respond to changes in the cost of installing PV and in the price of electricity. The measures that the Government are now putting in place in response to the recent consultation will provide consumers with a proper rate of return, of the sort that was originally envisaged.
Jonathan Evans (Cardiff North) (Con)
Does my hon. Friend agree that the important thing is that there is a fair, not an excessive, return? As a result of that, Italy, France and, in the past week, Germany have significantly changed the tariffs, as the Government have endeavoured to do in the UK.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
But this retroactive policy has shattered business confidence in Wales. We are set for advances in the green economy, but who will invest when moneys can be wiped out at the mere flick of a pen in Whitehall? It is simply not good enough, and the Under-Secretary should realise that we are considering a key industry in Wales.
Mr Jones
The right hon. Gentleman’s criticism would be more properly directed at the previous Government. The measures that the Government have now put in place will ensure stability in the industry and a fair rate of return for investors, and restore confidence to manufacturers.
Mr Llwyd
I hear what the Under-Secretary says, but can he guarantee that this sort of mess will not happen again and that we can further develop green technology in Wales, where we are well placed to do that, in my constituency and throughout Wales? We need to develop those industries, so will he assure the House that we will not again have this kind of mess, which undermines confidence in the whole sector?
Nia Griffith (Llanelli) (Lab)
Given the feed-in tariffs fiasco and this week’s news that big investors in wind energy are threatening to take millions of pounds worth of green jobs abroad because they are losing patience over the Government’s shilly-shallying about renewables policy, how will the Under-Secretary convince companies to invest in the installation and manufacture of renewable energy equipment in Wales, securing much-needed jobs and reducing our dependence on ever costlier imported gas and oil?
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
3. If she will discuss with ministerial colleagues the potential benefits of Wales being the test bed of the People’s Rail revised governance proposals; and if she will make a statement.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
My right hon. Friend the Secretary of State has regular discussions with my right hon. Friend the Secretary of State for Transport about a range of transport issues that affect Wales. I am aware that the right hon. Gentleman spoke to my colleague the Minister of State for Transport only recently.
Alun Michael
I am sure the Minister recognises that the Welsh Government—led by Carwyn Jones, and including Carl Sargeant as the Minister with responsibility for local government and transport—are showing a capacity for innovation and for bringing co-operative principles to bear. Would it not be a good idea to support the Co-operative party’s idea of the People’s Rail, so that railway services in and around Wales are accountable to the travelling public? Will the Minister support that idea?
Mr Jones
The People’s Rail proposals are a helpful contribution to the continuing debate on how we improve our transport infrastructure—I believe they were first floated some four years ago when the Labour party was in power. The Government are currently considering our response to the McNulty review, which has identified ways in which to make the railways more efficient and affordable in the longer term.
Hywel Williams (Arfon) (PC)
Rather than setting up a consumer mutual, which raises concerns about accountability to all the people of Wales, will the Government consider the utility of transferring responsibility for all railways in Wales to the directly democratic body, namely the Welsh Government and Assembly?
Fiona Bruce (Congleton) (Con)
4. What recent discussions she has had with (a) ministerial colleagues and (b) others on measures to reduce administrative burdens for businesses in Wales.
Chris Kelly (Dudley South) (Con)
6. What recent discussions she has had with (a) ministerial colleagues and (b) others on measures to reduce administrative burdens for businesses in Wales.
The Secretary of State for Wales (Mrs Cheryl Gillan)
I have regular discussions with ministerial colleagues, the First Minister and other organisations on reducing the regulatory burden on businesses and the public in Wales.
Fiona Bruce
Does the Secretary of State agree that although some decisions on business regulations are devolved, it is vital that the Welsh Government do not introduce any measures that are seen as a disincentive to invest in Wales?
Mrs Gillan
My hon. Friend is absolutely right. The Government—whether the UK or Welsh Government—must be careful to send signals to business that we are on its side. We must not place any more barriers in the way of businesses creating jobs in Wales, which is why I was particularly disappointed when the First Minister supported the extra financial transactions tax. I am sure the financial services industry in Wales will have been daunted by that.
Chris Kelly
The UK Government are scrapping new regulations that would have cost businesses more than £350 million a year and are radically reforming the planning system in England. Many such decisions are devolved to the Welsh Government, but would my right hon. Friend like Labour Ministers in Cardiff to follow suit?
Mrs Gillan
Yes. We are aiming to be the most business-friendly Government in history. By scrapping new regulations and with the red tape challenge, we have thrown down the gauntlet to all those organisations that put barriers in the way of business. I wrote to the First Minister about that some time ago—I am still waiting for his response, but I am sure he would share my sentiments that we need to encourage and not stifle business.
Geraint Davies (Swansea West) (Lab/Co-op)
At a time when unemployment is at a 17-year high and more people than ever are forced into short-term work, is the Government’s decision to withdraw working tax benefits from low-paid, part-time workers an example of reducing administrative burdens, or is it simply an example of the Government kicking someone after they have thrown them on the ground?
Mrs Gillan
I hope the hon. Gentleman has noticed that in creating the most competitive tax regime in the G20, which is the aim of the Treasury and this Government, we have also taken the lowest-paid out of tax. That will make a great difference to families and individuals across the UK, including in Wales.
Ian Lucas (Wrexham) (Lab)
But John Longworth, the director general of the British Chambers of Commerce, says that businesses tell him that they are still not feeling the burden of regulation lifting. Will the Secretary of State listen to business and confirm that the Cabinet was yesterday lambasted by the Chancellor of the Exchequer for not achieving satisfactory growth?
Mrs Gillan
Right from the beginning when I was appointed Secretary of State for Wales, I set up a business advisory group so that I could listen directly to the concerns of business and industry. I hold regular meetings with that group, and as recently as this week I met the new chief executive of the CBI Wales. I certainly listen to what businesses are saying, as do this Government.
Jessica Morden (Newport East) (Lab)
5. What assessment she has made of the effects of Government funding reductions on women in Wales.
The Secretary of State for Wales (Mrs Cheryl Gillan)
We want to put women at the heart of our economic future. Although we have had to make difficult decisions, we are ensuring that the reductions made are shared fairly, while still protecting the most vulnerable in society.
Jessica Morden
Not only are Welsh women being hit particularly hard by the cuts but, as my hon. Friend the Member for Swansea West (Geraint Davies) said, on April 6 more than 9,000 families in Wales will discover that they will be hit by a change to working tax credits that could mean the loss of up to £3,800 a year unless they increase their hours. Does the Secretary of State have any comprehension of how hard it will be for those families to increase their hours, especially in retail, and what is she doing to fight their corner?
Mrs Gillan
As the hon. Lady knows, the Government’s top priority is an economic recovery that provides jobs for everybody, including women. In difficult times, the Government have been helping families with the cost of living. For example, we have been freezing council tax, while the Welsh Labour Government have refused to implement a similar policy in Wales, and extending free health care and child care. We have increased that entitlement in England. I challenge Labour, in power in Wales, to match that record.
Guto Bebb (Aberconwy) (Con)
Many of the claims made about the effect on women of the reform of the welfare state in Wales have unfortunately been repeated in reports published yesterday by Cuts Watch Wales which, despite making claims about the effect on Wales of changes to the welfare system, state that there is no evidence to back up those claims. Does the Secretary of State agree that it is unfortunate that many public sector organisations, supported by the taxpayer, have agreed to be mouthpieces for Labour party propaganda on this issue?
Mrs Gillan
I always condemn organisations funded by the taxpayer being propaganda mouthpieces for the Labour party, so I agree wholeheartedly with my hon. Friend. He must remember that the Government are providing flexible parental leave, working with employers to end the travesty of the gender pay gap, establishing a women’s business council and providing enterprise mentors to help more women to start their own businesses. We have a proud record on women. [Interruption.] And as my right hon. Friend the Minister for Women and Equalities has just joined us on the Front Bench, I would like to offer her my congratulations on her work on this front.
Stuart Andrew (Pudsey) (Con)
7. What recent discussions she has had with (a) ministerial colleagues and (b) others on the delivery of public services in Wales.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
My right hon. Friend the Secretary of State and I have regular discussions with ministerial colleagues and Welsh Government Ministers to discuss a wide range of matters, including public services in Wales.
Stuart Andrew
Given the reports of patients in Wales crossing the border for better health care in England, does my hon. Friend agree that the NHS in Wales is in need of reform and deserves proper funding as in England?
Mr Jones
Yes indeed. The Government are seeking in England to create an NHS that is fit for the 21st century and that gives greater discretion to professionals and choice to patients. By contrast, Wales increasingly has a one-size-fits-all health service that is falling behind the rest of the country.
Chris Bryant (Rhondda) (Lab)
One of the key public services in Wales is housing, but a constituent who came to my surgery last week is in work and works a full week but unfortunately is homeless. Were he to resign from his job, the local authority would be required to find him a home, and it would be paid for by the taxpayer. He does not want to do that. What will the Government do to end the manifest unfairness whereby somebody who is in work and paying Child Support Agency fees can still be homeless?
Stephen Lloyd (Eastbourne) (LD)
Another area of public service delivery is the additional £350 million for child care tax credits that the coalition Government are delivering. What difference does the Minister think that will make to working mothers and mothers trying to get into work?
Kevin Brennan (Cardiff West) (Lab)
8. What plans her Department has to mark St David’s day.
The Secretary of State for Wales (Mrs Cheryl Gillan)
Tonight my right hon. Friend the Prime Minister is holding a reception for St David’s day. Tomorrow the Welsh flag will be flying over No. 10, and I will be attending the Back-Bench St David’s day debate and welcoming Welsh children from the Dreams and Wishes charity to the House of Commons and Gwydyr house. Tomorrow I will also be attending a St David’s day dinner in London and a church service in the Crypt, at St Mary Undercroft. I presented the Prime Minister with daffodils from the national botanic garden of Wales yesterday, and Gwydyr house is full of daffodils.
Kevin Brennan
This St David’s day will be tinged with some sadness, as Wales plays a memorial match in my constituency tonight in memory of Gary Speed, the Wales manager who died so tragically at the age of 42. Money will be raised for a charity called CALM—the Campaign Against Living Miserably—to help to prevent suicide among young men. Will the Secretary of State hold a collection in support of that charity at her St David’s day event?
Mrs Gillan
I hope that the memorial match in the memory of Gary Speed goes extremely well and that a lot of money is raised for the charity. In answer to the hon. Gentleman’s question, I will come back to him and let him know, because I would like to ask the people who work in the Wales Office. We are having a charity called Dreams and Wishes come in on St David’s day tomorrow. That is what we are focusing on, but I will see what I can do for the hon. Gentleman. [Interruption.]
Mr Speaker
Order. We could do with a bit of quiet, both out of respect for St David’s day and in order to hear the Chairman of the Select Committee on Welsh Affairs.
David T. C. Davies (Monmouth) (Con)
I wonder whether the Minister would consider marking St David’s day by allowing patients to opt out of the NHS in Wales and instead enjoy the lower waiting lists, lower infection rates and better funding that are the hallmark of the NHS in Conservative-run England.
Mrs Gillan
I am grateful to my hon. Friend for reminding us, on the eve of St David’s day, of the differences that are arising because of Labour Government policies in Wales. I am sure that his question will be heard by many people across Wales. I hope that the Welsh Labour Government will emulate our reforms and produce a first-class health service in Wales for all our citizens.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
9. What discussions she has had on Barnett consequentials to Wales for High Speed 2.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
My right hon. Friend the Secretary of State and I have had recent discussions with ministerial colleagues in Her Majesty’s Treasury on a range of issues, including funding for Wales.
Jonathan Edwards
HS2 is clearly an England-only project, yet the Chief Secretary to the Treasury said last week in answer to a question that I had tabled that Barnett consequentials would be decided after “budgeting and funding arrangements” had been completed. Will the Minister ensure that Wales does not lose out on the £1.9 billion that it should receive as a result of HS2, by securing guarantees that the project will be funded via a stream that results in Barnett consequentials? [Interruption.]
Mr Speaker
I hope the Minister caught the thrust of that—the Prime Minister was momentarily troubled by some sort of insect.
Mr Wayne David (Caerphilly) (Lab)
10. What recent discussions she has had with the Secretary of State for the Home Department on crime levels in Wales.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
My right hon. Friend the Secretary of State and I have regular discussions with Home Office Ministers on a range of issues relating to crime in Wales.
Mr Jones
I visited Gwent police last week, and I was delighted to see that the most recent crime figures show an 11% reduction in crime in that force area. One might have thought that, rather than talking Gwent police down, the hon. Gentleman would offer the force some support.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
Does the Minister agree that policing in Wales will be more effective and more accountable following the election of commissioners in November?
Stephen Mosley (City of Chester) (Con)
11. What recent discussions she has had with (a) ministerial colleagues and (b) others on the promotion of tourism in Wales.
The Secretary of State for Wales (Mrs Cheryl Gillan)
As this is Welsh tourism week, I have been out on visits. I also have regular discussions with ministerial colleagues and others on the promotion of tourism in Wales. Tourism is primarily a devolved matter for the Welsh Government but, as usual, we are keen to work with them to promote Wales internationally. [Interruption.]
Mr Speaker
Order. The Secretary of State’s answers can scarcely be heard, and that is simply not fair. Let us have a bit of order for Mr Mosley.
Stephen Mosley
Thank you, Mr Speaker.
There are huge opportunities for boosting tourism in north Wales by working with the beautiful, historic border town of Chester. Has my right hon. Friend had any discussions with the Welsh Assembly Government to encourage the joint marketing of our tourism gems on both sides of the Anglo-Welsh border?
Mrs Gillan
I will certainly ensure that my hon. Friend’s request is on the agenda at my next meeting with the First Minister. I also hope that many people visiting this country, particularly for the Olympic games, will take the opportunity to visit the many attractions on both sides of the border, but especially in Wales.
Chris Ruane (Vale of Clwyd) (Lab)
What more could be done to capture the Irish tourist market in Wales, especially north Wales?
Mrs Gillan
As the hon. Gentleman knows, that is the responsibility of the Labour Welsh Government, but I will certainly ensure that that matter is brought to the attention of Irish Ministers in my conversations with them.
Mr Andy Slaughter (Hammersmith) (Lab)
Q1. If he will list his official engagements for Wednesday 29 February.
The Prime Minister (Mr David Cameron)
This morning, I had meetings with ministerial colleagues and others, and, in addition to my duties in the House, I shall have further such meetings later today.
Mr Slaughter
According to Revenue and Customs, some families earning just £13,000 a year will lose £1,000 a year in tax credits from April. Before the election, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), now the Work and Pensions Secretary, described our warning that low-income families would lose tax credits as a lie and as irresponsible “scaremongering”. Did he mislead the public?
The Prime Minister
What we have done is increase tax credits for the lowest-paid people in our country, and we have actually lifted over 1 million low-paid people out of income tax altogether by raising the personal allowance. If the hon. Gentleman is worried about taxation issues, he should have a word with his candidate for Mayor of London, Ken Livingstone, and ask whether he is going to pay his taxes.
Mark Reckless (Rochester and Strood) (Con)
Many Irish people were moved by what the Prime Minister said about Bloody Sunday. Given that it is becoming increasingly clear that eurozone support for Ireland is conditional on its saying yes in the referendum, will the Prime Minister confirm that this country will support Ireland, whatever it decides?
The Prime Minister
We are certainly very good friends of the Republic of Ireland and the people of the Republic of Ireland. It is their choice whether to sign the treaty of fiscal union, and their choice whether to have a referendum on that treaty. As in all things, people’s views in a referendum should be respected.
Edward Miliband (Doncaster North) (Lab)
Before turning to other matters, does the Prime Minister agree with me that the allegations made by Deputy Assistant Commissioner Sue Akers in the Leveson inquiry about widespread corrupt behaviour at the heart of the press and the police are devastating, and that such behaviour can have no place in the national institutions of our country? Does he further agree with me that this underlines the importance of the police inquiry, which must get to the bottom of these allegations without fear or favour, and of the Leveson inquiry itself?
The Prime Minister
I completely agree with the right hon. Gentleman about this issue. There is all-party support for the Leveson inquiry, which needs to get on with its work—which it is conducting in a very reasonable and thorough way—and also proper support for the police inquiry. It is important to make the point that there is always a debate about what is right for newspapers to do to get stories that are in the public interest, but it is hard to think of any circumstances in which it is right for police officers to take money.
Edward Miliband
I thank the Prime Minister for that answer. On the Leveson inquiry, may I ask him to ensure that, in the weeks and months ahead, none of his senior Ministers does anything to undermine its work? Would he accept that it was ill-judged of the Education Secretary to say last week that the inquiry was having a “chilling” effect on freedom of expression? Does the Prime Minister now dissociate himself from those comments, and urge his colleagues, whatever their closeness to particular newspaper proprietors, not to undermine the Leveson inquiry?
The Prime Minister
I answered this question last week. The Education Secretary, like the rest of the Cabinet, fully supports the Leveson inquiry and wants it to proceed with the very important work that it does. That is the position of the Education Secretary and the position of the entire Government.
Edward Miliband
I thank the Prime Minister for that answer, but I have to remind him that the Education Secretary said:
“The big picture is that there is a chilling atmosphere towards freedom of expression which emanates from the debate around Leveson.”
I hope that the Education Secretary, who is sitting further down the Bench, will have heard the Prime Minister’s words.
Now, let me move on from one area where I hope there can be cross-party agreement, to an area where there is not. On Sunday, Lord Crisp, the man who ran the NHS for six years, said about the Prime Minister’s Bill:
“it’s a mess…it’s unnecessary…it misses the point…it’s confused and confusing and…it’s…setting the NHS back.”
Why does the Prime Minister think that, with every week that goes by, there are yet more damning indictments of his NHS Bill?
The Prime Minister
Let me just make one further point about the Leveson inquiry, because I think it is important. What my right hon. Friend the Education Secretary was saying—and I think it is important for all of us in this House to say—is that while these inquiries are going on, it is important for politicians who, let us be frank, benefit sometimes when the press are a little bit less hard hitting than they have been in recent years, to say that we support a free, vibrant, robust press. I do think that that is an important point, which is what my right hon. Friend was saying.
Turning to the health reforms, the right hon. Gentleman actually said something last week that I agreed with. He said:
“The NHS will have to change.
…because of the rise in the age of the population”,
because of the rise in
“the number of long-term conditions”,
and because of the rise in “expectations and costs.” It sounds a bit familiar. He is right that it has to reform. The problem for the Labour party is that it is against the money that needs to go into the NHS, which it says is irresponsible, and that although it supported competition and choice in the past, it does not support them any more.
Edward Miliband
The Prime Minister seems to have forgotten the question I asked him; it was about Nigel Crisp who ran the health service for six years. He was the chief executive of the national health service and he says that the Prime Minister’s Bill is “a mess…and confusing”—but the right hon. Gentleman will obviously not want to listen to him.
Let me ask the Prime Minister about somebody else, who appeared on the Conservative party’s platform at the spring conference in 2010. He hosted the first speech of the Health Secretary—he is not here, I do not think—and he advised the Labour Government, that is true. He is the GP at the head of the clinical commissioning group in Tower Hamlets. He wrote to the Prime Minister on Monday and said this:
“We care deeply about the patients that we see every day and we believe the improvements we all want to see in the NHS can be achieved without the bureaucracy generated by the bill.”
[Interruption.] Government Members say no, but this is a man who is in charge of a clinical commissioning group. Is it not time that the Prime Minister recognised that he has lost the confidence even of the GPs whom he says he wants to be at the heart of his reforms?
The Prime Minister
There are 8,200 GP practices covering 95% of the country implementing the health reforms, which is what they want to see happen. The right hon. Gentleman asks me if I will listen to those people who ran the NHS over the last decade, so let me give him a selection of people who ran the NHS in the last decade and see what they think of competition. This is what Lord Darzi said:
“The right competition for the right reasons can drive us to achieve more”.—[Official Report, House of Lords, 11 October 2011; Vol. 730, c. 1492.]
This is what John Hutton said. He was a Health Minister under the last Government—[Interruption.] Opposition Members do not want to listen to Labour Ministers from when they used to win elections. Anyway, this is what he said:
“Competition can make the NHS more equitable.”—[Official Report, House of Lords, 11 October 2011; Vol. 730, c. 1569.]
That is the view of a former Labour Secretary of State. What about an adviser to the last Labour Government, Julian Le Grand, who specifically looked at competition? This is what he said:
“the measured effects of competition have not been trivial…evidence shows that the introduction of competition in the NHS could be credited with saving hundreds of lives.”
The truth is that the right hon. Gentleman does not want to listen to past Labour Ministers because he is taking a totally opportunistic position in opposition to this Bill.
Edward Miliband
The reason that 95% of GPs are now having to implement part of these changes is that the Prime Minister has imposed them. Dr Everington addresses this in the last line of his letter, where he says:
“Your government—
I believe that this is a letter to the Prime Minister—
“has interpreted our commitment to our patients as support for the bill. It is not”.
And 98% of those in the Royal College of General Practitioners oppose the Bill. I have to say that it is hard to keep track of opposition to this Bill, because in the past seven days alone the Royal College of Physicians has called the first emergency general meeting in its history about the Bill, and the Prime Minister has lost the support of the British Geriatrics Society and the Royal College of Paediatrics and Child Health. So every week that goes by more and more health care organisations come out against this Bill. I have a simple question for the Prime Minister: can he now give the House a list of significant health organisations that are still wholehearted supporters of the Bill?
The Prime Minister
The right hon. Gentleman specifically said—[Interruption.] This is very important—[Interruption.]
Mr Speaker
Order. The Prime Minister has been asked a question, so let us hear the answer.
The Prime Minister
He said that 98% of GPs oppose the reforms—that was the figure. Let me give him the actual figures. There are 44,000 members of the Royal College of General Practitioners. Out of a total of 44,000, just 7% responded opposing the Bill. What about the royal college of physiotherapists? Of the 50,000 in the royal college of physiotherapists, 2%—[Interruption.] I know that that is enough for the unions to elect him leader of the Labour party, but that is about as far as it will go.
Edward Miliband
Government Members are obviously well trained today, but let me tell them that their support for the health Bill is digging their own burial at the next general election. I asked the Prime Minister a specific question. I know, by now, that he does not like to answer the questions, but I just simply asked him who supports his Bill, and answer came there none from this Prime Minister. Let me refresh his memory as to who opposes his Bill. By the way, it is no good the Deputy Prime Minister smirking—I do not know whether he supports the Bill or opposes it.
Edward Miliband
Oh, he supports it! Well there is firm leadership for you.
Let me refresh the Prime Minister’s memory as to those who want the Bill withdrawn: the Royal College of General Practitioners; the Royal College of Nursing; the Royal College of Midwives; the Royal College of Radiologists; the Faculty of Public Health; the Chartered Society of Physiotherapy; the Community Practitioners and Health Visitors Association; and the Patients Association. Does it not ever occur to him that, just maybe, they are right and he is wrong?
The Prime Minister
The right hon. Gentleman did not mention: the National Association of Primary Care—supporting the Bill; the NHS Alliance—supporting the Bill; the Association of Chief Executives of Voluntary Organisations—supporting the Bill; the Foundation Trust Network—supporting the Bill; Lord Darzi, a former Labour Minister—[Interruption.] Who was Lord Darzi? He was the surgeon Labour hired to run the health service. Here we are having had four weeks in a row of NHS questions but not a single question of substance—not one. It is all about process, all about politics, never about the substance. We all know that it is leap year, so maybe just this once I get to ask the question. We all know what the right hon. Gentleman is against, but is it not time he told us what on earth he is for?
Ian Swales (Redcar) (LD)
Q14. In my area, there are plans for 120 metre-high wind turbines between the beautiful villages of New Marske and Upleatham, which are less than a mile apart. Does the Prime Minister agree that such giant turbines should not be built so close to residential areas without local people having a say?
The Prime Minister
We want to see a balanced energy policy and there is a place for renewable technologies in such a policy. We are making two changes that I think will be welcome to the hon. Gentleman. First, we are cutting the subsidy to onshore wind, because I think that it has been over-subsidised and wasteful of public money. Secondly, when the Localism Act 2011 fully comes in, that will give local communities a greater say about issues such as wind turbines. Of course, we tried to do that earlier by abolishing the regional spatial strategies that the previous Government put in place, but we lost that case in the courts so we need the Localism Act to come into force in full.
Tony Lloyd (Manchester Central) (Lab)
Q2. Earlier, the Prime Minister answered a question from my hon. Friend the Member for Hammersmith (Mr Slaughter) with a little more abuse than he would have wanted. Does the Prime Minister recognise that 200 couples in his constituency with 400 children and 600 couples in my constituency with more than 1,500 children will lose working tax credit, possibly up to the level of £3,800 or more, which can be 25% of their income? Without sounding complacent, can he say how he will answer those couples and their children?
The Prime Minister
As the hon. Gentleman knows, we have had to take difficult decisions because of the enormous debt and deficit that we inherited. In taking those decisions, we have protected the poorest families by increasing the child tax credit. That is what we have done. We have also helped the poorest who are in work by lifting 1 million people out of income tax. The question must come back to Labour: “You left us with this mess, what would you do about it?”
Richard Graham (Gloucester) (Con)
This summer, in my constituency of Gloucester, and everywhere around the country, people will be looking forward with huge excitement to the start of the Olympic games. It is a great opportunity to celebrate how well the UK manages these great global events, but not everybody sees it as that sort of an opportunity. The general secretary of Unite sees it instead as an opportunity for a general strike. Does the Prime Minister agree with me that nothing could be further from the spirit of the Olympics and nothing could do more damage to the reputation of our country?
The Prime Minister
I think my hon. Friend speaks for the whole country about what the general secretary of Unite said. Let me quote it directly:
“I’m calling upon the general public to engage in civil disobedience.”
That is what he said. Let us remember that Unite is the biggest single donor to the Opposition, providing around a third of their money, and had more of a role than anybody else in putting the right hon. Member for Doncaster North (Edward Miliband) in his place. It is not good enough for the Opposition just to put out a tweet; they need to condemn this utterly and start turning back the money.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Q3. No top-down reorganisation of the NHS, no reduction in front-line police officers and no cuts to tax credits for low-income families: why does the Prime Minister find it so hard to keep his promises to the British public?
The Prime Minister
We promised to increase spending on the NHS and we are boosting spending on the NHS. We promised the cancer drugs fund, and 10,000 people have got extra drugs through that fund. We promised that the number of doctors would grow faster than the number of bureaucrats and, since the election, the number of doctors has gone up by 4,000 and the number of bureaucrats has gone down by 5,000. That is what coalition policy is doing for our health service.
Mr Stewart Jackson (Peterborough) (Con)
When will the Prime Minister close the loophole for multinational companies that allows the migrant cap to be flouted using intra-company transfers, or is that another tough immigration policy that will fall victim to the “curse of Clegg”?
The Prime Minister
On this one, my hon. Friend is being unfair. We have a tough migrant cap for migrant workers, and business said how important it was to have intra-company transfers, but only at relatively high salary levels. That is what we put in place and it demonstrates that over time we will be able both to control immigration and to do so in a way that does not damage business.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
Q4. We now know that the Government were made aware of fraud allegations at A4e before the Prime Minister appointed that company’s chairman as his family tsar. As the Prime Minister is in danger of acquiring a reputation for ill-judged personal appointments, will he tell the House what independent checks he believes should be carried out before such appointments are made and whether any such checks were carried out in respect of Emma Harrison?
The Prime Minister
First, let me be absolutely clear that I was not aware of any allegations of irregularities when Emma Harrison became an adviser to the Government on troubled families. At the time she was appointed, there were no formal investigations into A4e; there was just the company’s own probe into irregularities. I think that this issue needs to be properly dealt with and I am concerned that subsequent to Emma Harrison’s appointment, information needed to be passed up the line to Ministers more rapidly. I have asked the Cabinet Secretary, Sir Jeremy Heywood, to review the guidelines across Government and this particular case. When the right hon. Gentleman talks about the horse having bolted, he might want to put into his question the fact that Emma Harrison was given a CBE by the previous Government and that all the allegations that are being made are into contracts that his Government handed out. A little more transparency about that might be a good thing.
Dr Sarah Wollaston (Totnes) (Con)
Will the Prime Minister join me in paying tribute to the courage of the war photographer Paul Conroy from Totnes, who was injured showing the world the horrors of the Syrian regime? Will he join me in thanking all those who helped to secure Mr Conroy’s safe passage to Lebanon?
The Prime Minister
I certainly join my hon. Friend in doing that. The role that the media play by being in incredibly difficult places such as Homs in Syria to bring the truth and the news to the world is very important. That is what Paul Conroy was doing and that is what Marie Colvin was doing when she tragically lost her life. I certainly pay tribute to Paul Conroy and above all, as my hon. Friend says, to the very brave people who helped to get him out of Syria, many of whom have paid an incredibly high price. I can tell the House that Paul Conroy is now safe; he has been in our embassy in Beirut in Lebanon. He is being properly looked after and I am sure that soon he will want to come home.
Sheila Gilmore (Edinburgh East) (Lab)
Q5. Last October, the Chancellor announced a new policy called credit easing. Can the Prime Minister tell us how many businesses have been helped?
The Prime Minister
The Chancellor said at the time of the autumn statement that the policy would be in place in time for the Budget, and that is exactly what is going to happen. [Interruption.]
Peter Aldous (Waveney) (Con)
Q6. High streets across the country, including those in Lowestoft, Beccles and Bungay in my constituency are facing tough trading conditions at present, including the prospect of a 5.6% increase in business rates. Can the Prime Minister outline what the Government are doing to support traders to enable them to grow their businesses and create jobs?
The Prime Minister
My hon. Friend is right to raise this issue. There are real concerns about the hollowing out of some of our high streets and the number of empty properties. What we have done is double the small business rate relief scheme, and that has helped an estimated 330,000 small firms. We are also removing legal red tape that requires ratepayers to fill in paperwork to claim that relief, which is something that Labour refused to do when in office. From working with Mary Portas, we have a whole plan for how we can try to help reinvigorate our high streets, which is absolutely vital for our towns and cities across the country.
Mr Nigel Dodds (Belfast North) (DUP)
The Prime Minister might have seen the headlines in the newspapers today that the happiest people live in Northern Ireland. As the Democratic Unionist party has been the major party of government for the past five years in Northern Ireland, we on the DUP Benches are not surprised by that. Of course, one thing that overshadows that happiness is the high and escalating price of petrol and diesel, which is the highest not only in the United Kingdom but in the European Union. Can the Prime Minister bring happiness to all parts of the UK by agreeing to do away with the August fuel tax increase and address fuel allowances as soon as possible?
The Prime Minister
I am delighted to hear that the people of Northern Ireland are the happiest in the United Kingdom, although I have to say that their representatives in the House do not always give that impression. Perhaps I have been missing something. We recognise that families and businesses are continuing to feel the pressure from very high prices. We have cut the fuel duty and scrapped the automatic fuel duty stabiliser. That has meant that average pump prices are 6p lower than they would have been under the previous Government’s plans, but clearly we are also being impacted by a higher oil price.
Mike Freer (Finchley and Golders Green) (Con)
Q7. This week, the Government took action on unacceptable tax avoidance. Does the Prime Minister agree that the principles of paying a fair share of tax should apply both to banks and to former Mayors of London?
The Prime Minister
My hon. Friend makes an important point. Whether it is Barclays bank or, frankly, Ken Livingstone, people should pay the proper amount of tax, and I hope that Her Majesty’s Revenue and Customs will look carefully at all these sorts of cases. Londoners, many of whom live in Labour-controlled areas with high Labour council taxes, will be pretty angry about what they have seen and will probably conclude that red Ken has been caught red-handed.
Julie Hilling (Bolton West) (Lab)
Q8. The Institute for Fiscal Studies has reported that the Government’s tax and benefit changes will hit families with children five times harder than those without children. Is that what the Prime Minister means by “the most family-friendly Government…ever”?Is it fair, or is it just another broken promise?
The Prime Minister
What this Government have done is increase tax credits for the least well-paid; lift people out of tax; and introduce free nursery care for two, three and four-year-olds, and expand it for families. All those things have made a difference.
Incidentally, the hon. Lady did not mention that she is sponsored by the Unite union. She could have taken this opportunity to condemn Len McCluskey. [Interruption.]
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Q9. Since the furore about work experience broke out, has my right hon. Friend had any businesses and/or organisations come forward to support this vitally important and publicly popular initiative, which will help young people to get the skills that they need to get into work?
The Prime Minister
My hon. Friend is entirely right: the whole country wants to see more young people given the opportunity that work experience provides. The good news is that since this row in the pages of our newspapers, we have had expressions of interest from 200 small and medium-sized employers who want to get involved in the programme. It is time for businesses in Britain, and everyone in Britain who wants to see people have work experience, to stand up against the Trotskyites of the Right to Work campaign, and perhaps recognise the deafening silence there has been from the Labour party.
Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)
Q10. Happily, Mr Speaker, I am able to welcome the Prime Minister’s commitment to the reform of the European convention on human rights and the powers of the European Court of Human Rights. Will the Prime Minister give a commitment to allowing this House a proper debate on the subject when the Brighton declaration is published, and will he ensure that, once again, the principle of subsidiarity is respected, and that the British courts have a proper say in what goes on in this country?
The Prime Minister
I do want to see the principle of subsidiarity get a fairer hearing at Strasbourg—that was in the speech I made at the Council of Europe about reform of the Court—so that it does not become a court of the fourth instance, whereby someone who has already been in front of a local court, a court of appeal and a supreme court in their country then comes to the ECHR. We do have proposals for reform. On what is debated in this House, we now have the Backbench Business Committee, which has an enormous number of days in this House—
The Prime Minister
Not enough, I hear. It has more than enough in my view, and it can make over a day for that debate.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
Does the Prime Minister agree that one of the best ways to deliver on our commitment to the fairness agenda is to go ahead as quickly as possible with implementing the coalition’s agreement to raise the tax threshold to £10,000?
The Prime Minister
The coalition agreement commits us to real increases in that threshold. We have achieved that in Budgets over the past two years in spite of the difficult conditions that we face in the economy. I think it is a good idea to lift people out of tax. It particularly helps low-paid people, and it particularly helps low-paid women.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
Q11. The Ministry of Defence is buying tankers from South Korea when the work could be done here. The MOD says it will “not consider wider employment, industrial, or economic factors”in procurement. Why will this arrogant and complacent Prime Minister not stand up for world-class British industry?
The Prime Minister
I do stand up for world-class British industry, and as I said, when I travel the globe, I am very happy to have British Aerospace and Rolls-Royce on an aeroplane with me, promoting Great British companies. It is just a pity that when I do that, I get attacked by the Labour party.
David Morris (Morecambe and Lunesdale) (Con)
Q13. Is the Prime Minister aware of the tragic death of my constituent, Penny Hegarty from Over Kellet? Penny’s husband, Dr Phil Hegarty, believes that his wife’s death is just one example of systemic management failures at the University Hospitals of Morecambe Bay NHS Trust. Will the Prime Minister assure Dr Hegarty and all my constituents that recent work to improve the management will continue, and that this trust will be turned around?
The Prime Minister
I can certainly give my hon. Friend that assurance, but first I am sure that the whole House will want to send the deepest condolences to the husband and family of my hon. Friend’s constituent, Penny Hegarty. I know that the Minister of State, Department of Health, my right hon. Friend the Member for Chelmsford (Mr Burns), has met local MPs on a number of occasions to keep them updated. Clearly, patients have the right to expect far better standards of care. I know that the Care Quality Commission and Monitor have both raised concerns about standards at the trust. As my hon. Friend says, it is being turned around, but that work needs to be undertaken with all speed.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
Q12. Is the Prime Minister aware that Graeme Brown, who is the director of Shelter Scotland, described the proposal for a bedroom tax as“grossly unfair and shows the UK Government is simply failing to listen to the voice of reason being put forward by housing professionals, social landlords, MSPs and individuals”?Does the Prime Minister accept that widows and widowers left in their family home when their children leave and on a low income can lose up to 25% of their housing benefit support if he continues with this? Is he unfeeling, or is he just determined to get his way?
The Prime Minister
The issue is this: we desperately need to reform housing benefit. If we had not done anything about housing benefit, it was expected to cost over £24 billion a year. As the hon. Gentleman’s own welfare spokesman, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) said, Beveridge
“would scarcely have believed housing benefit alone is costing the UK over £20bn a year. That is simply too high.”
I am getting slightly frustrated with these statements in principle about reform. The Opposition say they are in favour of a benefit cap, but they vote against it. They say they are in favour of welfare reform; they oppose it. They recognise that housing benefit is out of control, but they frustrate every attempt to deal with it.
Amber Rudd (Hastings and Rye) (Con)
On this leap day, when shy men throughout the country will be nervously hoping that their girlfriends might make a commitment to them, may I ask the Prime Minister to give romance a nudge and to remind us and confirm that the reforms made through the welfare system will always, always support hard-working families?
The Prime Minister
I was wondering where my hon. Friend was going with that for a minute or two, but she is right. It is a leap year, a very special day, when all sorts of things can happen—all sorts of possibilities. The key thing is that through both our tax system and our welfare system we should be encouraging families to come together and stay together, and celebrating commitment.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
Is the Prime Minister aware that the entry clearance office in Abu Dhabi has rejected an application by Mrs Maqsood Jan to come from Pakistan to attend her granddaughter’s wedding in Manchester? Would the right hon. Gentleman specify what kind of employment a 72-year-old woman who does not speak English and has never left Pakistan is liable to obtain in my constituency, where unemployment is 10.6%? Will he overrule this barmy decision and allow Mrs Jan the once-in-a-lifetime opportunity to attend her granddaughter’s wedding? If the Home Secretary has said—[Interruption.]
Mr Speaker
Order. The right hon. Gentleman has been lucidity itself. I am sure he is bringing the question to an end.
Sir Gerald Kaufman
I am; I am bringing it to an end. If the Home Secretary has whispered to the Prime Minister that Mrs Jan can appeal, I should add that the wedding is on 2 April and the appeal procedure is too slow to make that possible.
The Prime Minister
To answer the right hon. Gentleman very directly, I was not aware of the individual case. There are hundreds of thousands of people who travel between Pakistan and Britain every year. We must have tough controls to prevent the abuse of our immigration system, but I suggest that he takes up the case individually with my hon. Friend the Minister for Immigration, who has a superb grip on these issues and I am sure will be able to give him some satisfaction.
Mr Peter Bone (Wellingborough) (Con)
Under Tony Blair’s regime, we could sleep safely at night because we knew that Lord Prescott would take over if Tony Blair was incapacitated. What would happen if the Prime Minister were incapacitated?
The Prime Minister
I have been waiting for this question for some time, because I know that my hon. Friend has asked almost every Cabinet Minister, including the Deputy Prime Minister who, I think, replied that my hon. Friend seemed to have a morbid fascination with the end of the leader of the Conservative party. All I can say is that I have no plans to be incapacitated.
Helen Goodman (Bishop Auckland) (Lab)
Further to the Prime Minister’s answer to my right hon. Friend the Member for Doncaster North (Edward Miliband) on the Leveson inquiry, he is of course absolutely right that we need a free press, but the nation will not thank him if he goes along with the suggestion made by Tory peer Lord Hunt, chairman of the Press Complaints Commission, that the Defamation Bill, which is coming forward in September, should be used to legislate for a new system. That would pre-empt the Leveson inquiry. Will the Prime Minister make it clear that he will not do that?
The Prime Minister
I am glad that the hon. Lady asked that question, because I have absolutely no intention of pre-empting the Leveson inquiry in any way at all. I think that if we look back to the debate we had in this House, we will see that both the leader of the Labour party and I said how important it was to trust Leveson to get on with the job and to give every signal that we want to be able to adopt what is proposed without there being regulatory arbitrage between the parties. I think that there is an understanding on that basis but, given that there is that understanding, I repeat again that it is important that hon. Members on both sides stress the importance of a free press to the health of our democracy.
Bob Blackman (Harrow East) (Con)
Hard-working families in my constituency are absolutely astonished that a benefit cap of some £26,000 is being opposed by the Labour party. Does my right hon. Friend agree that we will always make work pay and provide benefits for those who are unable to work?
The Prime Minister
I am delighted, Mr Speaker, that my hon. Friend caught your eye, because today is the day that the Welfare Reform Bill becomes an Act, and for the first time we will have a proper cap on welfare. That is supported by this side of the House, opposed by that side, but backed by the overwhelming majority of people in our country.
Points of Order
(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Julie Hilling (Bolton West) (Lab)
On a point of order, Mr Speaker. Further to the Prime Minister’s statement that I am sponsored by the union Unite—I am grateful that he has waited to hear this—can you advise me on how this untruth can be corrected, as I am not sponsored by Unite, and on what opportunity the Prime Minister will be given to correct the record?
The Prime Minister (Mr David Cameron)
Further to that point of order, Mr Speaker. I believe that I was reading something from the Register of Members’ Financial Interests, which is that Bolton West constituency Labour party received £1,250 from Unite in 2010 and that the hon. Lady registered a donation of £2,250 from Unite in 2010 in the register. Of course, if I have in any way got that wrong, I will come back to the House at the earliest opportunity.
Mr Speaker
I am most grateful to the hon. Lady for her point of order, to the Prime Minister for his response to it and for this opportunity to set out the position. Let me say this for the benefit of the hon. Lady and the House: whether or not she is sponsored by Unite, and I emphasis whether or not she is—I am happy to accept that she is not if that is the factual position, because I do not know—[Interruption.] I do not need any help from a junior Government Whip—he would not know where to start—[Interruption.] The hon. Member for Lichfield (Michael Fabricant) says that he is a senior Government Whip—[Interruption.] I do not think that the Speaker has ever greatly cared about the level of seniority of Whips as far as that goes.
Whether or not the hon. Lady is sponsored by Unite, I emphasise that there is nothing wrong constitutionally in our arrangements with being sponsored by a trade union, so it is not an accusation. The matter is not—[Interruption.] Order. The hon. Member for Ealing North (Stephen Pound) is a man of magnificent qualities, but he is in no position to advise the Chair on what is or is not allowed. This is not—I repeat “not” for the benefit of the hon. Gentleman—a point of order for the Chair. That, as I often say, is the beginning and the end of the matter. The hon. Lady has put her concerns on the record.
Robert Halfon (Harlow) (Con)
On a point of order, Mr Speaker. Following my point of order with you on Monday about charges for the Clock Tower, do you have any information about whether Members will be given a vote on that very unfortunate decision to charge people to visit the House of Commons?
Mr Speaker
No, I have no such information, and I am afraid that it is not a point of order for the Chair. I have known the hon. Gentleman for over 20 years—probably nearer to 25—so I know what a tenacious terrier he is, but he must raise these matters in an orderly way. I think that we have got his point; he has got my response; and at least as far as today is concerned we will leave it there.
If there are no further points of order, we come now to the ten-minute rule Bill, for which the hon. Member for Wycombe (Steve Baker) has been so patiently waiting. It would be helpful if people going past him would do so quickly and, preferably, quietly, so that we can hear from Mr Steve Baker.
Financial Institutions (Reform)
(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Steve Baker (Wycombe) (Con)
I beg to move,
That leave be given to bring in a Bill to enforce strict liability on directors of financial institutions; to require directors of financial institutions to post personal bonds as additional bank capital; to require personal bonds and bonuses to be treated as additional bank capital; to make provision for the insolvency of financial institutions; to establish a financial crimes investigation unit; and for connected purposes.
I draw the House’s attention to my registered interest in Cobden Partners.
In a developed society such as ours, we need a vibrant, dynamic, reliable and robust means of executing payments and intermediating savings to entrepreneurs: we need a good banking system. Unfortunately, as the Governor of the Bank of England said in his 2010 Bagehot lecture:
“Of all the many ways of organising banking, the worst is the one we have today.”
Elsewhere in that speech, he said:
“At the heart of this crisis was the expansion and subsequent contraction of the balance sheet of the banking system.”
We might well discuss why balance sheets expanded so far and which factors and choices drove that expansion, but for today’s purposes it suffices to quote Martin Wolf, writing in the Financial Times on 9 November 2010, who said:
“The essence of the contemporary monetary system is the creation of money out of nothing, by private banks’ often foolish lending.”
Further, on 23 February this year the Bank of England’s executive director for financial stability, Andy Haldane, published an article in the London Review of Books, in which he wrote:
“The continuing backlash against banking, as evidenced in popular protests on Wall Street and in the City of London, is a response not just to the fact that the world is poorer, as pre-crisis riches have turned to rags, but to the way these riches were privatised, while the rags are being socialised. This disparity is nothing new. Neither in the main, is it anyone’s fault. For the most part the financial crisis was not the result of individual wickedness or folly. It is not a story of pantomime villains and village idiots. Instead the crisis reflected a failure of the entire system of financial sector governance.”
It seems that there is an increasingly unified message coming out of the Bank of England.
We must rise above that inadequate story of pantomime villains. Entrepreneurial error and gaming rules in the pursuit of self-interest are nothing new, and the system should have been able to cope. It is that foolish lending of new money, that failure of the entire system of financial sector governance, which must be addressed.
What is to be done? Mr Haldane supplied an answer. He wrote:
“The best proposals for reform are those which aim to reshape risk-taking incentives on a durable basis”.
That is what my Bill intends to do. It aims to reconnect risk and reward in the financial system, and to deal with the moral hazard that allowed the privatisation of vast gains and the projection of vast risks and losses on to the public.
I believe that profit is right and proper when earned through voluntary exchange without force or fraud. Bonuses based on just profits are a good thing. If some people gain but the costs of their actions are forced on to others through state power, however, that is an injustice. It is one from which our constituents are still smarting, and it is one which is causing people to question the basis of our social system. If we are to prosper, we must preserve and extend commercial freedom, promote personal, professional and mutual responsibility and facilitate enterprise under the rule of law. In banking, a business that is categorically different from others, we must ensure that those who stand to gain also bear the risks of their actions. I therefore propose the following measures.
First, on the liability of bankers, board members of financial institutions should be strictly liable for losses—that is, liable without the need to prove fault on their part. In the event of bank insolvency, board members would be subject to unlimited personal liability. Their own wealth—all assets, houses, pensions and so on—would be at risk. In addition, bank directors would be required to post personal bonds that would be potentially forfeit in the event of losses, not as a cap but as a guarantee. Bonds should be at £2 million, adjusted for inflation, or 50% of net wealth. Any board member who resigned would still be subject to unlimited liability and the requirement to post bonds for a period of two years following their resignation, so that they could not run away from impending disaster.
Secondly, bonus payments would be deferred for a period of five years. The bonus pool would be invested in escrow accounts, with appropriate provision for stocks, dividends, stock options and cash.
Thirdly, personal bonds and the bonus pool would be used to make good bank losses. Should a bank report losses over any period, they would be borne by beneficiaries of the bonus pool in the first instance. Further losses would be borne by board members and made good from their posted bonds. Any further losses would then be borne by shareholders in the usual way. Finally, in the event of insolvency, bank directors would be exposed without limit.
Additional measures would cover the definition of core capital and accounting standards, provide a robust definition of bank insolvency, require a new fast-track receivership regime for banks, which is long overdue, and produce a programme to end state support and return financial institutions to normal operations. There would also be provisions relating to EU passporting rules and provisions for criminal investigations and criminal liability.
Those measures are targeted at banks, which are categorically different from other businesses, but whether they can be achieved without extending the scope of the Bill to any company regulated under the Financial Services and Markets Act 2000 is a matter for debate. To promote diversity and competition, wholly owned mutuals and new small banks might be exempted from certain provisions, such as the requirement to post bonds.
The obvious question is who would become a director of a bank under a regime of unlimited liability. Actually, unlimited liability banking has an illustrious history. The two greatest bankers of the 19th century, Nathan Rothschild and J. P. Morgan, both operated highly successfully under unlimited liability. It made them conservative in their risk-taking and reassured counterparties who appreciated what they stood to lose if a deal went wrong. I am grateful to my hon. Friend the Member for Wyre Forest (Mark Garnier) for reminding me that unlimited liability partnerships were relatively common until the 1980s.
The principle of unlimited liability for directors in certain circumstances was placed on a statutory basis in 1929 and remains in section 232 of the Companies Act 2006. My Bill would make bank directors’ duties openly enforceable. Let us not forget that, as colleagues in all parts of the House will know, banks are often quick to require small business directors to provide personal, secured guarantees. What is sauce for the goose is sauce for the gander.
Members will have seen that both HSBC and Lloyds have been engaged in bonus clawbacks, and that, too, establishes the principle that bonuses should be at risk in the event of losses and damage. The banking system is, after all, capable of generating losses so large as to threaten our entire economic system.
Hard-working families and individuals paying tax out of typically modest incomes must never again suffer the injustice of carrying the risks, and consequences of risks, taken in the pursuit of often enormous private returns. Risks must fall to those who take them. Instead of vicarious liability of taxpayers, there must be responsibility in the banking system. The Bill represents an opportunity to free the banking sector and the public from regulatory capture and lobbying. It could raise standards from the bottom up, through the preservation and extension of commercial freedom and the development of professional, personal and mutual responsibility.
The Prime Minister has called for a responsibility revolution, and that is what this Bill would provide. It would end the culture of rewards for failing in the banking system and establish a basis on which London could continue to grow into the future as the world’s leading trustworthy financial centre. It is time for us to say to bankers, “Put your money where your mouth is. By all means make a fortune, but if you want the reward, bear the risks.”
Question put and agreed to.
Ordered,
That Steve Baker, Mr Douglas Carswell, Ian Paisley, Peter Aldous and Mr Richard Bacon present the Bill.
Steve Baker accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 312).
Treaty on Stability, Co-ordination and Governance
(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr William Cash (Stone) (Con)
I beg to move,
That this House has considered the matter of the legal and other action now to be taken by the Government in upholding the rule of law and protecting UK interests in respect of the nature and content of the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union.
Thank you, Mr Speaker, for approving my application for this debate. I am also deeply grateful to all those Members—some 100 or so—who rose so spontaneously and strongly to support the proposal that I put to the House yesterday afternoon. This is only the fifth emergency debate since 2001. The debate is about the rule of law: not only the rule of law as it affects the United Kingdom but, inevitably, the rule of law in Europe as a whole. The Prime Minister, to his great credit, rightly exercised the veto to protect UK interests, but this is not simply a question of the single market and financial services, however important they may be to the UK economy.
The rule of law is inseparable from democracy, which, based on freedom of choice, leads to the making of law through general elections in line with the wishes of the voters. That is as important as it is simple. Unfortunately, the European Union, despite its much-vaunted claims and aspirations, has increasingly departed from democratic principles and from the rule of law in the pursuit of ideology. We are now witnessing ever-increasing tendencies towards bureaucracy, and even the imposition of technocratic Governments on individual member states, as in Italy and Greece. Yesterday, as it has in the recent past, the Bundestag voted on European bail-outs. According to opinion polls, about 80% of the German people are against the bail-outs, yet the German Government and the Bundestag passed the proposals by a massive majority.
Mr Denis MacShane (Rotherham) (Lab)
This line about European technocrats imposing technocratic Governments all over the place is very fashionable. However, the truth is that the current crisis, which is very serious—the hon. Gentleman is right to hold this emergency debate—is about the raw power of politics. It is about the politics in Germany in not wanting to bail out Greece; the politics here; the politics in Greece, where people voted pretty overwhelmingly to accept the bail-out package, with parties splitting up; and the politics in Italy, where people dumped the wretched Berlusconi and put in quite a good guy, Monti, for the time being. The Commission is not involved in this; the technocrats are out of the game; the Eurocrats are off the pitch. It is about raw politics. We are in the driving seat, and the hon. Gentleman might be as well.
Mr Cash
I am grateful to the right hon. Gentleman, who makes an important point. However, this is not merely about technocrats but about the brutal fact that the political game as it is now being played is increasingly coercive. That is part of the problem that I shall address.
Henry Smith (Crawley) (Con)
Following yesterday’s announcement of the Irish referendum, does my hon. Friend share my concern that if the result is the wrong one as far as the European establishment are concerned, it will be ignored and overruled by some method or another?
Mr Cash
I do indeed. A new rule is being imposed through the arrangements under this treaty which involves a kind of qualified majority voting for referendums whereby if member states do not have the requisite number of referendums in which they say that they do not want the treaty, they will simply be ignored. I hope that when it comes down to it and the Irish people have this explained to them, that will be a spur to their voting no, because people are being taken for a ride.
Mr John Baron (Basildon and Billericay) (Con)
I congratulate my hon. Friend on securing this emergency debate. Does he share my concern that with democracy having been suspended, in effect, in two countries, with a deepening democratic deficit across the eurozone as rules are bent, and with a eurozone fiscal compact that seems to undermine the EU institutions, we could fast be reaching a tipping point as regards the EU’s credibility and legitimacy?
Mr Cash
Absolutely. For those of us who have been critical of the European Union, but not of Europe, because we believe that we need stability and prosperity in Europe, my hon. Friend’s remarks are entirely justified. We are now facing the breaking of the rule of law through the imposition of European rules. It is an extraordinary paradox that the law should be used to break the principle of law itself.
Chris Bryant (Rhondda) (Lab)
How is the hon. Gentleman going to vote on this motion? As I understand it, his idea is that the treaty should not go forward, but if the motion is agreed to, we will have decided that we have considered the matter, and the Government will therefore be able to proceed with the treaty.
Mr Cash
The hon. Gentleman is rather missing the point. The question before the House is that we should have a proper debate about legality. There will not be a vote, as far as I am concerned, because we need to have an open discussion among Members of Parliament, not only in the European Scrutiny Committee, as has been the case so far. We have heard evidence from many distinguished lawyers and economists, and from the Minister for Europe, although sadly, and deeply regrettably, not from the Foreign Secretary, who has twice declined to come before us. He did say that he would come on 27 March, but that is far too late for the purposes of our proceedings. The most important thing is that we have an open and transparent debate about questions that otherwise would not get across to Members of Parliament, let alone to the people at large.
I have just spent two days in Brussels as Chairman of the Committee, with my hon. Friend the Member for Hertsmere (Mr Clappison). We had an extremely constructive dialogue with members from the national Parliaments and Members of the European Parliament. The only remedy that is provided in this time of economic and, I submit, political crisis in Europe is more Europe, not less. That completely misses the point.
As I discovered only a few months ago at the multi-annual surveillance framework meeting, some people want further European institutional change towards greater political union. In effect, they say that the solution to the problem is the European Parliament, rather than the national Parliaments, although they do want us to be involved so that we can sign our own suicide note. On economic matters and the multi-annual surveillance framework, they want more money to be spent, irrespective of the failure of the European economic systems that they have put in place. The Minister for Europe, who was at that meeting, will recall that he, I and others who were being realistic about this matter were simply astonished by the continuing stream of determination to seek more and more money for the European Union, through the financial transaction tax, by increasing its resources and through the common commercial tax base.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
No one can beat the Chairman of the European Scrutiny Committee for diligence. However, I will not be staying to take part in this debate for one reason: I am disappointed at his timing. The Committee has yet to hear from the Financial Secretary to the Treasury, we have not yet finished our evidence sessions and we have not yet presented our report. I know that the Government are desperate for something to fill the gap in this debating hall, which has frankly turned into a disappointing—
The Vice-Chamberlain of Her Majesty's Household (Mr Mark Francois)
Do you think we put him up to it?
Michael Connarty
I am not immune to the value of the Whips, but I honestly believe that they have got themselves into such a situation that they have allowed even this debate because they are desperate to fill the Order Paper.
Mr Speaker
Order. First, the hon. Gentleman’s intervention is too long. It is very enjoyable, but too long. Secondly, although I do not usually comment on the content of debates at all, I feel that I must do so for the benefit of the House. I know that it will please the senior Government Whip—I must get my seniority right—when I make the point that this debate was granted by me. It was nothing whatever to do with any Whip, senior or junior, and that is the end of it.
Chris Bryant
On a point of order, Mr Speaker. Of course, what you say is absolutely true, but you would not have granted this debate unless 100 Members had stood up. My hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) is absolutely right to say that a lot of Tory Back Benchers have been dying for anything other than the complete vacuum—
Chris Bryant
The hon. Gentleman said so last night to me in the gym. They are dying for anything other than the absolute vacuum that there has been in the business in this, the longest parliamentary Session since the Long Parliament.
Mr Speaker
That is an interesting point, like many of the hon. Gentleman’s points, but it is not a point of order for the Chair, as he knows perfectly well.
Mr Cash
That was not really a point worthy of comment, but I will certainly reply to the hon. Member for Linlithgow and East Falkirk (Michael Connarty), who is my colleague on the European Scrutiny Committee. The question of legality has already been canvassed. The Government have demonstrated that in the letter written by Sir Jon Cunliffe, on their instruction, to the secretary-general of the European Council, which expresses severe reservations about and, in effect, disputes the advice of the legal adviser to the European Council. Without wishing to prejudice what the European Scrutiny Committee may conclude in our report, the fact is that there is already sufficient notice of the concerns over legality for the matter to be considered by the whole House, rather than just in the Committee, as important as that is. There is one simple reason for that: silence or acquiescence can be assumed to be consent. I will explain that point in a moment.
While the question of legality is allowed to continue without challenge, and while it is decided whether the European Court of Justice should be called upon to make a judgment about this matter, which will itself take time, we are depending on the action, legal or otherwise, of the Prime Minister, who is going to the Council tomorrow. It is therefore important for us to at least indicate our view in this debate, in amplification of what the European Scrutiny Committee is considering and what it may yet conclude. I cannot make any assumptions about what its conclusion will be. We have certainly had the most powerful evidence from the likes of Professor Paul Craig, who is by no means unknown in European Union circles as a person of immense stature.
Michael Connarty
I am about to leave the Chamber, because I believe that this is not the right time to debate something that we are considering in the European Scrutiny Committee. I am used to all-party Back-Bench Committees being run as the fiefdom of the Chair. However, as a former Chair of the European Scrutiny Committee, I think that it is extremely discourteous, when we have not finished our inquiry or published our report, to have a debate on something that the Chair of the Committee sees as a matter of interest. It is wrong to do that and I think that it should be discussed in the Committee. I am now going to read my papers for the Committee sitting at 2 o’clock so that we can have some debate.
Mr Cash
I will reply to that point simply by saying that it is important that we, as a House, consider matters as they are going on concurrently. There should be no presumption that other Members of the House necessarily know the detail of the matters that we are discussing.
Mr Robert Buckland (South Swindon) (Con)
May I reinforce my hon. Friend’s point that it is important for the House as a whole, and indeed for departmental Select Committees, to have thematic debates about issues that arise from the EU? Such debates should happen at an earlier stage than they do, which so often seems to be at the last minute. I agree with him on that point.
Mr John Redwood (Wokingham) (Con)
It is quite right to have this debate as it is urgent and on a matter of great moment. Does my hon. Friend think that there is any way in which 25 countries can construct a treaty that presumes to use the EU institutions that belong to the 27 member states as a whole, without having an adverse or substantial impact on the UK? Should we not be warning our Prime Minister of that threat before he negotiates?
Mr Cash
Absolutely. Given that the Prime Minister is going to the Council tomorrow, where it is inconceivable that this matter will not be raised, and that the ratification process is under way, it is important to get that point on the record. I believe the arguments to be self-evident.
Neil Carmichael (Stroud) (Con)
I am enjoying this interesting debate. It is an opportunity to air some key issues. Why does the European Scrutiny Committee meet in private? It would be more helpful if it was open to us all more often.
Mr Cash
We have periodically sat in public, but then the position has been reversed. That depends on what is decided by the House as a whole, because these matters relate to the Standing Orders. I see that the Leader of the House is here. He knows how vexed this question is. We have gone backwards and forwards on it. However, the issues that we are discussing have been discussed extensively in public. My hon. Friend is more than welcome to come along if he wants to listen to any of our sessions. [Interruption.] As my hon. Friend the Member for Rochester and Strood (Mark Reckless) has just indicated, if he does not want to come along, he can read the transcript. I have copies of it here if he wants to look at it. I do not think that anyone can dispute the fact that the information is out there.
The question of when action needs to be taken is highly relevant in determining whether the Government are seen to acquiesce in decisions that are being taken by other Parliaments, which, as my right hon. Friend the Member for Wokingham (Mr Redwood) said, will affect us vitally.
Mr Speaker
Order. Before the hon. Member for Stone (Mr Cash) takes an intervention, may I say that it is always a privilege to listen to his speeches, and today is no exception, but gently point out that about a dozen people wish to speak? I therefore confidently anticipate that he is approaching the conclusion of his remarks.
Mr Dodds
I congratulate the hon. Member for Stone (Mr Cash) on securing the debate. I think that it is right and proper that the whole House considers such matters. On the Irish referendum, will he confirm that the rules have been rigged so that if 12—never mind the rest—eurozone countries approve, the pact will be deemed to be ratified?
Mr Cash
Absolutely. I do not know whether the right hon. Gentleman was in the Chamber at the time, but I referred to that in reply to another colleague. We are effectively having a new qualified majority voting system for referendums.
The catalogue of breaches of the spirit and the specific legal requirements were epitomised in Madame Lagarde’s remarks on 17 December 2010 about the first bail-out fund, otherwise known as the EFSM—the European financial stabilisation mechanism. She said:
“We violated all the rules because we wanted to close ranks and really rescue the euro zone.”
That is the objective and the method. She is now head of the International Monetary Fund, and we are faced with the prospect of the United Kingdom being expected to contribute to the IMF for what everybody knows is a back-door arrangement to underpin and guarantee the bail-outs in the European Union, which the IMF was not set up to provide, as the United States and other countries have made clear.
Indeed, Germany and France broke the stability and growth pact as it was originally instituted. Now we have a new feature in the big political landscape: in the pursuit of a tax and fiscal policy and compliance with a so-called golden rule to balance their budgets by a form of coercion, 25 member states of the European Union have now come up with an agreement to increase the powers of the stability and growth pact as it applies to them, irrespective of whether a country held a referendum and voted no, as the right hon. Member for Belfast North (Mr Dodds) just suggested. The vote would simply be swept away by a majority vote of the other countries, which insisted on applying the golden rule. One is bound to ask what kind of golden rule it is and whether it is not possible for individual countries to balance their budgets out of self-interest and through their own democratic decisions, rather than having a rule imposed on them in pursuit of the ideology of economic and political union. Indeed, the imposition of such a rule will, of itself, not balance the budgets anyway, as has been found in the past. This is using rules of law to breach the rule of law.
The real solution to the European crisis, which is not confined to the eurozone and deeply affects the United Kingdom, is that the levels of public expenditure, which led to the breaches of the criteria in the treaties, can be solved only by generating growth and giving oxygen to small and medium-sized businesses, for example, through deregulating the massive over-regulation and multiplicity of laws, such as the working time directive, among many others. The list is vast.
Yet again, the whole treaty is a vain attempt to sacrifice practicality and democracy on the altar of ideology, just as the referendums in Ireland, France, Holland and so on were all simply thrown away.
Mr Cash
I will not give way again. I have listened to what Mr Speaker has said and I have no intention of giving way. I have given way a great deal already, as I am sure Mr Speaker appreciates.
Even today, the European Central Bank is departing from its established rules in providing what some suggest is as much as a trillion euros of guarantees, and flooding the markets with unearned money to support countries which are failing to run their economies properly. There is a further problem, which is an increasing trend towards coercion, again in pursuit of ideology.
There is an increasing tendency by Germany to impose its will on other member states, but it should not be forgotten that although Germany pays vast sums into the European Union, it benefits enormously from that, and it could be argued that both French and German banks have played roulette with the Greek economy, and are now, through the rules and the treaty, seeking to obtain repayment and bolster their own banks and their own economies by imposing new rules to suit their requirements. Germany, of course, wants to help the euro. It has an enormous investment in it, but I would argue that the tendencies to coercion are not in the interests of Germany, the European Union or the United Kingdom. Indeed, today, we read that the constitutional court in Germany yesterday blocked the powers of a special parliamentary panel to fast-track emergency decisions affecting the rescue fund.
The new treaty is described as the “treaty on stability, co-ordination and governance” in the EU, yet it is not, contrary to what the Opposition said at an earlier stage, an EU treaty. The Lisbon treaty lays down specific requirements before changes can take place. They specify that the rules shall not be changed unless everyone agrees. The false assumption underlying the new treaty between the 25 is that, despite the failure to achieve unanimity, and even though the rules on enhanced co-operation have not been used, they claim that it remains legitimate to obtain those ends by a different route. I put that to the Minister for Europe the other day—namely that the treaty is based on the dangerous assumption that the end justifies the means, and that they would argue that, even if it is unlawful, the requirement to introduce the treaty for political reasons overrides the law. The question is whether it is lawful for the EU institutions, such as the Commission and the European Court, to be involved in such an agreement.
The new treaty is the triumph of expediency over the law. Professor Paul Craig sets out his arguments in 11 pages of carefully analysed argument. I am certain that the Government know all that and I am glad that the Attorney-General is here. If he wishes to intervene, I shall be only too happy. As a former shadow Attorney-General, I am sure that my right hon. and learned Friend knows the parameters of the unlawfulness of this treaty, which is why I suggested that he should come today.
I believe profoundly that the Government know that the treaty is unlawful and, in the words of Professor Paul Craig, it is important to consider whether it can
“confer new functions on EU institutions.”
He continues:
“I believe this would be contrary to the existing Lisbon treaty and to legal principle.”
He then examines articles 7 and 8, which I have no time to go into, as well as articles 3(2) and 273. They all raise questions that are before the European Scrutiny Committee about detailed matters, which we will tackle in due course in our report.
Chris Kelly (Dudley South) (Con)
Will my hon. Friend encourage people who wish to find out more to visit the European Scrutiny Committee’s website at www.parliament.uk/ESCOM?
Mr Cash
I certainly would, as I said earlier.
Angela Merkel is quoted in The Wall Street Journal a few days ago as saying:
“As Chancellor of Germany, I should and sometimes must take risks but I cannot embark on an adventure.”
I cannot think of any more dangerous adventure than moving away from the rule of law and inviting the tendency to coercion, which is increasingly evident in German policy making. Indeed, I believe that new rules of law are being asserted to break the rule of law. I am sorry to say that in Germany they seem to believe in government by rule. We believe in government by consent.
The process will not work. We are now in the period of a phoney war. Those who have seen the play “Three Days in May”, about 1940, may well wonder whether it is now obvious that, if we were to acquiesce in imposing the new and unacceptable rules, and in using EU institutions, that would become a new process of appeasement. Fortunately for us, in those dark days, Churchill refused to accept Halifax’s advice at the end of that fateful month.
The letter that the Prime Minister has sent, through Sir Jon Cunliffe, to the secretary-general of the European Council makes it clear that we have serious reservations. We now have two Europes, both built on sand. It is essential that we have a referendum in this country so that the people can have their say because there are such profound questions—
Mr Cash
On what kind of Europe we want. It is increasingly obvious that the position has become unacceptable and that the rule of law itself is now in jeopardy. We are involved and we must have a referendum on our relationship with the EU. However, first the Government must decide what action they will take about the challenge to the rule of law in Europe. They must put referral to the European Court of Justice firmly on the agenda, follow that through and, at the same time, reassess our policy towards the European Union and insist on a renegotiation of the treaties to ensure that the United Kingdom is not found wanting.
Emma Reynolds (Wolverhampton North East) (Lab)
I congratulate the hon. Member for Stone (Mr Cash) on his innovative use of House procedures to secure this debate. In fact, it would have been unnecessary for him to use such innovation if the Government had agreed to re-establish the pre-Council debates that Labour held when it was in government.
I welcome the opportunity to debate this important issue. The Opposition would not usually want to intrude on the private grief of the Conservative party, or indeed of the coalition, but we nevertheless have a duty to point out the inconsistencies in the Government’s position. I might not always agree with the hon. Gentleman, but I sympathise with him today, because the only thing that is clear is that the Government’s position is manifestly unclear.
The fighting talk we heard from the Government in December and January flies in the face of reality. Ministers loyally and repeatedly rehearse the script that the Prime Minister vetoed the use of the European institutions. The Foreign Secretary was categorical in his assertion that EU institutions were reserved for the use of the 27. He stated:
“What we are clear about is this, that the institutions of the European Union belong to the 27 member states”.
On the eve of the January European Council, the Secretary of State for Work and Pensions, who is listened to closely on those issues by Conservative Members, could not have been clearer. He said:
“The fact is the prime minister vetoed them using the institutions”.
The Chancellor took to the airwaves just hours after the January European Council ended, saying, without hesitation and seemingly without equivocation:
“If we had signed this treaty…we would have found the full force of the…European Court, the European Commission, all these institutions enforcing those treaties, using that opportunity to undermine Britain’s interests…We were not prepared to let that happen”.
Martin Horwood
The hon. Lady makes a robust call for clarity on policy. Can she confirm whether the Labour party is in favour or against the use of EU institutions by the 26?
Emma Reynolds
If only the position of the Liberal Democrats were clear on that matter—[Interruption.] I will come to that.
There was a guarantee from the top of the Government that EU institutions would not be used—I hesitate to describe it as a “cast-iron” guarantee, because it might upset some Conservative Members, but none the less, the position seemed to be clear. The evidence seemed compelling and the Government seemed to be clear what they were saying, but how quickly things unravelled—on the European Commission, on the use of the buildings and on the role of the European Court of Justice. One by one, the Government’s guarantees faded into yesterday’s headlines, and their empty rhetoric was painfully exposed.
Mr Baron
The shadow Minister will accept that the fiscal compact is designed to save the euro. Could we therefore have clarity on the official Opposition’s position on the euro? Given that all the economic evidence and the 85 currency devaluations since the second world war show that countries that have left a currency bloc benefit, and given that Greece desperately needs a devaluation, will she explain why she supports the cry to save the euro when that policy serves only to make the austerity packages worse?
Emma Reynolds
Unlike the hon. Gentleman, the Opposition believe that the stability and preservation of the eurozone is in our country’s interests. If those countries took on their former currencies, there could be a disastrous impact on our economy. I do not agree with him.
David Cameron walked out of the negotiation at the—
Emma Reynolds
Not for a minute—I have taken a couple of interventions already.
The Prime Minister walked out of the negotiation at the December Council with no additional guarantees or safeguards to protect British interests; no protections on the single market; no additional safeguards for financial services; and not even a seat at the table of eurozone meetings to ensure that we had a voice, if not a vote. In short, he gained nothing apart from the short-lived praise of some Conservative Back Benchers, but even that is changing.
Article 8 of the new treaty states that the Commission, the European Court of Justice and the buildings will all have a part to play in the working of the fiscal compact. In fact, the Government’s representative in Brussels, Sir Jon Cunliffe, stated in a letter to the European Council that articles 3, 7 and 8 all make explicit reference to the role of the EU institutions in the fiscal compact.
Despite profound confusion over the Government’s interpretation of the legal basis for the treaty, the treaty is clear. According to the terms of reference set out in the text of the agreement to be signed tomorrow, the fiscal compact will rely on the operation of the EU institutions upholding the terms and workings of the agreement. The Europe Minister told the European Scrutiny Committee last week that one can argue about the politics of the terms, but they amount to a promise by 25 countries that they want to support doing certain things under the European treaties. He said that in those cases, the use of the European institutions is, by definition, already authorised.
Emma Reynolds
Not for a minute.
Will the Minister therefore state clearly, and once and for all, whether the Government believe the legal status of the agreement, as set out in the terms of the fiscal compact, and specifically in the articles I have cited, is wrong? If it is wrong, what will the Government do to correct it? If they will do nothing to correct it, are we right to assume that that is their way of quietly admitting that they have been forced into a humiliating U-turn?
Emma Reynolds
I will not give way. I have given way once to the hon. Gentleman already.
At least the leader of the Conservatives in the European Parliament, Martin Callanan, has been clear. He said:
“There is no doubt that the government’s position has altered since the December summit, when they were insisting the institutions could not be used…I blame a combination of appeasing Nick Clegg, who is desperate to sign anything the EU puts in front of him, and the practical reality that this pact is actually quite hard to prevent.”
Does the Europe Minister therefore agree with the analysis of his party’s leader in the European Parliament?
Emma Reynolds
Not for the minute.
Does the Minister agree with what the Deputy Prime Minister said on “The Andrew Marr Show” in December? He said:
“Well it clearly would be ludicrous for the 26, which is pretty well the whole of the European Union with the exception of only one member state, to completely reinvent or recreate a whole panoply of new institutions.”
Perhaps there is more agreement between Martin Callanan and the Deputy Prime Minister than first meets the eye. They both believe, as the Opposition do, that the Government have flip-flopped. Despite their initial bravado, they have been unable to veto the use of the institutions.
Henry Smith
I have waited patiently since the intervention from my hon. Friend the Member for Basildon and Billericay (Mr Baron) to hear exactly what the official Opposition policy is on the fiscal treaty. Incidentally, is it still official Opposition policy to join the euro?
Emma Reynolds
The shadow Chancellor has made it clear that we do not think we will join the euro in his political lifetime.
The ultimate irony is that the Prime Minister, who has previously been so scathing of the EU, has now been reduced to relying on that institution to be the last line of defence in the protection of British interests, because the EU, unlike him, will be in the room. The UK will be barred from key meetings, rendering us voteless and voiceless in future negotiations. Without being in the room, we stand little chance of knowing—let alone influencing—whether eurozone Ministers will stray into areas of decision making that affect the 27.
The Opposition are right to be concerned at that prospect and to doubt the effectiveness of such a system in protecting British interests, and we are right to ask questions on how that situation was allowed to happen.
Andrew Percy
The shadow Minister said strongly and clearly that she believed the euro needed to be saved, and that any country leaving the euro would have a negative impact on our country and economy. What evidence does she draw on to support that assertion?
Emma Reynolds
A disorderly default by any member of the eurozone could have disastrous implications for that country and knock-on effects for the rest of the EU. There would be a contagion effect that the hon. Gentleman would be naive to think would not take place.
We are right to stress that the response by the Government and centre-right Governments across the EU to the eurozone crisis has been economically inadequate, and any worsening of the crisis will have a devastating impact on our economies. Although we welcome the fact that in January the European Council spoke about the need for growth and jobs in order to ensure the recovery of the eurozone, we are concerned that this is merely an add-on to the current deal rather than an integral part of it. In the light of that, will the Europe Minister comment on the position of the French Socialist presidential candidate, who is visiting the UK today and urging EU member states to reopen the treaty to include more commitments to growth and jobs?
I will cite the words of one Member of the House who seems to share our deep scepticism about the consequence and cause of the Prime Minister’s diplomatic defeatism last December—the Deputy Prime Minister. Earlier this month, he explained:
“The language gets confusing. Veto suggests something was stopped.”
The phantom veto of December has now been exposed. He also said that over time the treaty would
“be folded into the existing EU treaties so you don’t get a permanent two parallel treaties working separately from each other…We all see this as a temporary arrangement rather than one which creates a permanent breach at the heart of the EU.”
According to him, the Prime Minister’s walkout in December was a temporary arrangement.
The crux of the issue was eloquently and pithily expressed by the hon. Member for Rochester and Strood (Mark Reckless) the day after the 30 January European Council, when he asked the Prime Minister:
“Will the Prime Minister explain what it is that he has vetoed?”—[Official Report, 31 January 2012; Vol. 539, c. 687.]
Nothing, it seems. The Government Back Benchers who gave the Prime Minister a hero’s welcome in December have now realised that he did not prevent anything from happening. We said at the time that his walkout was not an expression of the bulldog spirit but a form of diplomatic defeatism.
Mark Reckless (Rochester and Strood) (Con)
Is the hon. Lady aware of one thing that the Prime Minister seems to have achieved with this veto—as it has been described? In Ireland, the Irish Attorney-General has said that the fact that the compact is outside the EU treaties has influenced the advice that Ireland needs a referendum.
Emma Reynolds
That suggests that the Prime Minister’s influence is greater than it is. It is up to the Irish people to decide whether to accept the treaty, whether within the European treaties or outside.
Despite the penny dropping with everyone else, the Prime Minister resolutely clings to his phantom veto. At the press conference after the January European Council, he said:
“There isn’t an EU treaty because I vetoed it; it doesn’t exist.”
That flies in the face of the evidence. The European treaty involves 25 out of 27 of the member states. It involves the European Commission and the European Court of Justice. It sounds like a European treaty; it walks like a European treaty; it clearly is a European treaty. The Deputy Prime Minister is at pains to describe this situation as temporary, but in truth he was powerless to prevent the Prime Minister from putting the Conservative party interest above the national interest, as it was reported he was advised to do by the Foreign Secretary.
Bob Stewart (Beckenham) (Con)
Does that mean that the official Opposition would be happy with the treaty, leave it as it is and do nothing?
Emma Reynolds
We have made it clear that we are not happy with the treaty. We would not have walked out of the negotiations in December when a text was not even on the table. We would have negotiated a different treaty. We believe that this is a fiscal straitjacket like the one that the Government are putting on our country, and it is not in the interests of the eurozone or the UK.
As a result of the Government’s actions, Britain has never been so excluded from decisions affecting its vital national interests. That is bad for British business, bad for jobs and bad for families across the country. No British Government, regardless of political colour, have been as complacent as this Government about the emergence of a two-speed Europe. By putting party interest above the national interest, the Prime Minister has rendered the Government dependent on what could be described, euphemistically, as the Conservatives’ least-favourite institution—the European Commission—to protect the UK from decisions being taken without us even being in the room. Even Baroness Thatcher, a staunch critic of the EU, understood that being in the room was of paramount importance. She would never have relied on the European Commission to defend the British national interest.
Andrea Leadsom (South Northamptonshire) (Con)
I find the Opposition’s stance rather astonishing, because it focuses only on micro-details and fails to address the big picture. As an eternal optimist, I feel that the big picture—the opportunity for Britain—has rarely been better, because real change is in the air. As a banker by background, I have very real concerns about the prospects for the euro’s survival, and I think that the European Central Bank’s long-term repo arrangements will not endure beyond the first roll-over and may well collapse long before then. But regardless of the outcome for the euro in the short to medium term, there is no doubt that change is in the air.
I should mention to the shadow Minister that, as I am sure she realises, the treaty is not an EU treaty but a fiscal compact treaty that does not include all the EU member states. She did not seem to make that clear. The fiscal compact treaty will create a euro summit for those who are part of the eurozone and those who have ratified that treaty. The euro summit will consider things such as competition and structures, and inevitably will, therefore, be a forum for caucusing. That is almost inevitable. So change is in the air.
I take great pleasure in the fact that, because change is in the air, there is the opportunity for change for Britain too. The prospect is no longer of a two-speed Europe but of a multi-tier Europe—in respect not just of those in the eurozone and those outside it but of those in the Schengen arrangement and those outside it, and of those great fishing nations interested only in the common fishing area and those who wish to be excluded from it. A multi-tier Europe in which member states can pursue their own particular interests but join together in areas of common cause is the opportunity facing us.
I am delighted with everything I hear from our Government about our approach to that. We should welcome and support those in the eurozone area who wish to work more closely together on further fiscal integration to support their currency, and we should also be pressing for change in the best interests of Britain. In that context, I want briefly to mention the work of more than 120 Conservative Back Benchers in forming the Fresh Start project. I pay tribute to my hon. Friends the Members for Daventry (Chris Heaton-Harris) and for Camborne and Redruth (George Eustice). The three of us, together, have been pulling together an enormous project that looks at every single policy area under the EU and attempts to determine where it acts in Britain’s interests, where it goes against Britain’s interests and what the options are for change. To my knowledge, such work has not been done for a good long time. It was astonishing that the shadow Minister could not come up with any detail, but could only nit-pick at what the Prime Minister has been doing.
I also pay tribute to the hon. Member for Dunfermline and West Fife (Thomas Docherty), who sits on the shadow Minister’s side of the House and who has become co-chair with me of an all-party group. That group has seen significant engagement from both sides of the House in the interests of EU reform and what could be a better deal for Britain.
Emma Reynolds
I would like to make it clear to the hon. Lady, who is making an eloquent speech, that the Opposition are in favour of European reform, but not the same kind that she is. For example, we are not in favour of repatriating European social policy, and we also think that, even were it desirable, it would be a pretty unrealistic aim.
Andrea Leadsom
I am glad that the hon. Lady made that intervention, because I can assure her that the all-party group on European reform, with which her hon. Friend the Member for Dunfermline and West Fife other Labour Members, Government Members and Members across the House are closely involved, is investigating the options for change. It is not a campaign group but an investigative group. It is a disappointment to me and to others that the hon. Lady has not engaged in that debate, because we have turned up some extremely interesting facts.
As the devil in the EU is in the detail, I would like briefly to mention three areas. The first is financial services. Before the financial crisis, the single market for financial services was a very good thing. It significantly added to British GDP, as well as the GDP of Germany, France and Italy. All the change at EU level was about creating a better single market, including in UCITS—undertakings for collective investment in transferable securities, the most successful financial services export from the UK ever.
Financial services had great legislation; however, since the financial crisis the EU has turned to stopping, slowing down, preventing and shutting down financial services, almost in a sort of act of revenge against the bankers. Indeed, I have heard many EU politicians talking about how City-style financial services are to blame for the problems they have found themselves facing. However, that is simply not true, and our Prime Minister did absolutely the right thing for British businesses and the British economy by standing up for financial services and seeking the safeguards that would enable us to protect the industry, which employs a total of nearly 2 million people in this country and contributes 11% of our GDP on an ongoing basis. He therefore did absolutely the right thing, entirely contrary to what the shadow Minister suggested.
Secondly, the shadow Minister mentioned social policy and the working time directive, and said that the all-party Fresh Start group would repatriate those powers. Not true: we are looking at what the options for change are. She will know, as do many people, that trainee doctors in the NHS are severely hampered. In fact, a coroner in the west country recently attributed the death of one elderly gentleman to the working time directive, which had meant that not enough doctors were on call and that the two doctors on duty were seeing 300 to 400 patients between them. Change is therefore vital.
My third and final point is about structural funds, where we now have a genuine opportunity. Back in 2003, the hon. Lady’s Government’s policy was to repatriate the local element of structural funds. In Britain we have been contributing €33 billion to structural funds over the past seven years. Some €9 billion comes back to the UK, but that is decided by the EU. What on earth is the point of that? We can decide best where to allocate that €9 billion. Interestingly, some of our poorest regions are net contributors to structural funds, not net beneficiaries, so the potential for reform is massive.
Bob Stewart
Does that mean that we can change quite easily without any further ado, simply by adopting my hon. Friend’s suggestions?
Andrea Leadsom
All the changes that the all-party group is investigating would require negotiation. Some things are more complicated than others, although we are setting everything out in the research that we are undertaking. [Interruption.] I have been asked to finish, so I will.
My two final points are these. For far too long we have tried to avoid the EU and not engage with it, so the other thing that the Government are doing that I welcome is engaging far more and far better with EU policy making at all levels. My second point is about better EU scrutiny in Parliament. We have been rather bad at that in the past, so I am glad that the Minister for Europe will be doing far more of it in future.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I know that this is an important debate and that everyone wants to get in, but we have so many speakers that I am going to have to impose a seven-minute time limit. However, even then it will be very tight, so if Members could save some time and ease up on the interventions, that would be helpful.
Mr Denis MacShane (Rotherham) (Lab)
I will do my best, Mr Deputy Speaker.
I do not really disagree with some of the points that the hon. Member for South Northamptonshire (Andrea Leadsom) has just made, but to achieve her aims she will have to find allies. The difficulty is that the Conservative party is perceived as profoundly hostile to European co-operation. It is allied with some very odd gentlemen in the European Parliament, as we know, and it sits with the Russians at the Council of Europe. We represent a democratic political organisation in this Parliament, and we cannot achieve co-operation at a supra-parliamentary level by just telling people what we want and expecting everybody else to agree. Therefore, there has to be a new approach to Europe.
I congratulate the hon. Member for Stone (Mr Cash) on securing this debate under Standing Order No. 24. It is absolutely outrageous that we do not have proper debates on Europe in Government time. Indeed, I am sorry that the Leader of the House is not here—I have made that point to his face; I am not saying anything behind his back. It is unfair to ask the Backbench Business Committee, which is generous on a number of issues.
Mr MacShane
And it is not as if this place is crammed full of legislation, is it, Mr Deputy Speaker? I really wish that the Government would stop continually hiding behind the Backbench Business Committee’s existence to deny their allocation of time for what are important debates.
The hon. Member for Stone made the interesting observation that the EU institutions could not be used for just a group of EU member states, but of course that is nonsense. They are used if there are rows over Schengen, which does not include us, or if there are rows over fisheries policy, which on the whole does not involve Austria, Hungary or other land-locked nations. Also, there have always been groups or clusters of EU member states with particular concerns which the European institutions have to have some regard for.
Mr MacShane
If the hon. Gentleman will forgive me, I want to give time to other colleagues and do not want to take up my full time.
I should inform the House that I might not be here for the wind-ups, because I have to go and hear Monsieur François Hollande speak at King’s college London. I am excited about meeting Monsieur Hollande, this socialist who is proposing to increase the income tax on people earning €150,000 to 45%—in other words, lower than the business-crushing tax rate that the present Chancellor of the Exchequer imposes on higher earnings. Of course, Monsieur Hollande is not proposing to rip off the epaulettes or the légion d’honneur from bankers he does not like—as our Prime Minister did with Sir Fred Goodwin—nor is he proposing retrospectively to deny bankers their bonuses or to introduce retrospective tax legislation on what bankers earn. We have the most anti-banking Prime Minister in the history of Great Britain. As a low-tax socialist, I will be glad to be at the college listening to Monsieur Hollande, who seems to have a much more moderate and pragmatic policy.
I would be interested to hear from the hon. Member for Stone, who has left his place, why exactly the Royal Bank of Scotland—partly owned by us—and HSBC are running to the European taxpayer, in the form of the European Central Bank, to ask for cheap loans. Why on earth should the European taxpayer bail out appallingly badly run, inefficient British banks that do not lend their money, but continue to try to pad out their bonuses and salaries? I certainly do not object to their doing so; indeed, I hope that the European taxpayer will show some generosity.
Mark Reckless
The right hon. Gentleman is commenting about two banks, which he has given as an example, but as for HSBC at least—a large international bank with interests throughout the world, particularly in Asia—the UK is only a modest part of its operations. Frankly, his comments are unjustified in that respect. What is the objection to those banks accessing liquidity ECB support on the same terms as anyone else, and why should they not do so?
Mr MacShane
Because of the breathtaking hypocrisy of the Conservative party, in that when action is needed to allow HSBC and RBS—British firms—to continue functioning and operating in a Europe that needs to keep its head above water, and which therefore might need some help from the IMF, all we hear from the Conservatives is that we should not be part of it. However, what is sauce for the RBS and HSBC goose—going and asking for euro taxpayer handouts—has to be sauce for the UK gander. We are all in this together.
Jacob Rees-Mogg (North East Somerset) (Con)
Will the right hon. Gentleman give way?
Mr MacShane
Although I will lose time, I will give way—it is the hon. Gentleman, for heaven’s sake.
Jacob Rees-Mogg
I am grateful to the right hon. Gentleman; I will be very brief. RBS has business in Ireland. It is lending against its loans in Ireland, which are in euros and are therefore a matter for the eurozone. Of course it ought to be able to get money from the ECB on that basis.
Mr MacShane
And 50% of our exports go to the eurozone; therefore, it makes sense for us to help the eurozone stay alive. However, that will be difficult, because in our broad economic and fiscal policy we are more European than the Europeans. We are implementing anti-growth, deflationary, 1930s-type policies that Herbert Hoover or Heinrich Brüning would have instantly recognised. That is why unemployment is going up, why job creation is falling and why growth is flatlining. The paradox is that we need new policies for Europe, but they are not on offer from this Government, this Chancellor or this Prime Minister, who is entirely on the same wavelength as Chancellor Merkel, President Sarkozy and all the others who are currently pursuing job-killing, growth-crushing, deflationary, austerity, Treasury-driven financial and fiscal policies in Europe. I am surprised that we have not heard the terms “Camkozy” or “Merclegg”, because there is undoubtedly very little difference between the right-wing Conservative policy of our political leaders and that of the politicians controlling the big continental countries.
Let us be clear: the Commission is not involved in this. The European technocracy and bureaucrats are not involved in this; they are utterly sidelined. This is about the raw politics of anger in Germany against Greece, and the raw politics in Greece against Germany. It is also about the raw politics of the Conservative party in this House, some of whose members rightly feel that all the pledges made by their leader, now the Prime Minister, on referendums, renegotiation and repatriation have not in any way been delivered. That is what is causing upset and concern in the House of Commons. I am sure that it was also raw politics in Ireland that led the Taoiseach to agree to the referendum there. We know that Monsieur Hollande has said that, if elected, he will renegotiate the treaty. We also know that Mr Rajoy, the new conservative leader in Spain, has said that he will not implement a Merkozy-type dose, because Spain could not take it.
We need a new approach in Europe, and in this country. I would have no problem if, after 15 years of wallowing in Euroscepticism, the Conservative party rejoined the real European world. I would like to see Conservative MEPs sitting with other centre-right MEPs, precisely to create the links that the hon. Member for South Northamptonshire mentioned. We need more engagement, and not in order to join some Euro-federalist nirvana—that is not on offer at the moment. We are living in not a two-tiered Europe but a multi-tiered Europe, and we have to be part of it. We are not at the moment, but I hope that the Government can change their course before it is too late.
Martin Horwood (Cheltenham) (LD)
It is always a pleasure to follow the right hon. Member for Rotherham (Mr MacShane) in debates on Europe. He is the authentic voice of Euro-enthusiasm on the Labour Benches—[Interruption.] He is one of the authentic voices. I could not, however, work out from listening to his speech whether he was in favour of the treaty or not.
It is also traditional to congratulate the hon. Member who secured a debate such as this, but in this case I think that the hon. Member for Stone (Mr Cash) has missed the point on a colossal—almost historic—scale. There are questions of legality and politics around the treaty, but they are dwarfed by the really big issue, which is the future of the European economy. The treaty represents a sincere and concerted attempt to make that future stronger, safer and more prosperous. We can argue about its chances of success, but I think that the hon. Gentleman is trying to have his cake—perhaps I should say “gâteau”—and eat it. He is calling on European economies to practise fiscal responsibility without the treaty, while simultaneously criticising them for not sticking to the previous, more flexible, regime. I do not think that he can have it both ways.
That is in stark contrast to the letter written by the Prime Minister and 11 other Heads of Government in the run-up to the summit, which tried to address the real issue of promoting prosperity in Europe. It talked about completing the single market in service markets and promoting the digital economy, as well as
“providing a secure and affordable system for cross-border on-line payments, establishing on-line dispute resolution mechanisms for cross-border on-line transactions”.
It also proposed promoting an “internal market in energy” and “energy interconnection”, as well as a
“commitment to innovation by establishing the European Research Area, creating the best possible environment for entrepreneurs and innovators to commercialise their ideas”.
That is exactly the agenda that should be dominating our discussion of the summit. We should be talking about how we are going to get the whole of the European economy back on track towards creating jobs and sustainable prosperity.
We have to ask ourselves: what is the real threat to the UK’s national interests? Is it really the use of EU institutions by fiscal compact countries? Could that not be interpreted as a connection that will strengthen the interests of the 28, relative to the fiscal compact countries? That connection, and the involvement of the Commission, will mean that at least one institution will have to uphold proper adherence to the European Union treaties and the safeguards in the fiscal compact treaty.
Is there any threat to the single market, which is one of Britain’s primary interests in all this, given the safeguards that we have succeeded in inserting into the treaty by having a seat at the table and being part of the discussions that led to the drafting of the treaty, despite not being a signatory to it? That is in contrast to the view expressed by the hon. Member for Wolverhampton North East (Emma Reynolds), who is no longer in her place. I believe that that was a positive step by the Government, and a positive example of the re-engagement that we have seen since December.
Mr MacShane
Does the hon. Gentleman still share the view of his leader, now the Deputy Prime Minister, that the Conservative party’s colleagues in the European Parliament are “nutters”, “anti-Semites” and “homophobes”?
Martin Horwood
I think that the right hon. Gentleman is misquoting the Deputy Prime Minister, who was referring to the other parties that are members of that group. I obviously have a great deal of sympathy with that point of view, but I can assure the right hon. Gentleman that our leader was not accusing Conservative MEPs of that.
What is the most serious threat to the UK’s national interests? Is it the use of the EU institutions? Is there a threat to the single market, given the safeguards that have now been inserted into the treaty? I would say not. The most serious threat to the UK’s national interests is the most serious economic crisis in Europe’s post-war history. It is a real and present danger to British jobs, British prosperity and British companies. Why would we now throw a spanner into the works of the only vehicle with a chance of bringing that crisis under control? To use the term used by the hon. Member for Stone, I think that such an idea reveals something about his own pursuit of ideology, rather than any real defence of the UK’s national interests. For that reason, I think that he might even be losing sympathy among his Conservative colleagues for what must now count as the political equivalent of antisocial behaviour in continuing to be completely obsessed by the legal minutiae and institutional details, rather than the really big picture that is facing Europe and Britain within the European economy.
Graham Stringer (Blackley and Broughton) (Lab)
The hon. Gentleman said that he was going to make a really big point, but I do not think that he is doing so. The really big point is surely that Europe cannot grow while policies for competitive deflation are in place. They involve either one country, Greece, which is bankrupt and will never be able to pay its debts, or four countries. That situation is never going to lead to a stable Europe that can grow and with which we can trade. Is not that the really big point? Would not we all be better off if Greece left the euro in as stable a way as possible?
Martin Horwood
The hon. Gentleman has raised some of the issues that we should be debating, although they are not the subject of the motion, which is about legal compliance. There are issues about whether the compact will work and whether it will do enough to stimulate growth, and the Prime Minister and the other Heads of Government have addressed them in their letter, and in the agenda for growth, jobs and sustainable prosperity that they are pursuing. I think that that addresses the hon. Gentleman’s question.
Those questions about the economic situation are what we should actually be debating here, and there is an argument for reinstituting regular debates in advance of European Councils. It is unsatisfactory that we have ended up debating this matter with less than a day’s notice and with very little preparation, at the very last minute before the European Council. There is also an argument for a thorough revision of the whole scrutiny procedure for European legislation in this place. With all due respect, I think that the European Scrutiny Committee keeps bringing us back to discuss the technicalities, yet we never seem to have debates on the substance of issues such as the fundamental economic questions and the structure of the European economy, as the hon. Member for Blackley and Broughton (Graham Stringer) has just pointed out.
Martin Horwood
I will not give way again, because I will not get any more time and the Deputy Speaker has instructed us to be brief.
Where is the report from the European Scrutiny Committee on the economics of this matter—and where, come to that, is the report from the Treasury Committee on the economic aspects? We must address these issues in revising the way in which the House of Commons scrutinises European affairs; we need to take a step up and get away from this constant obsession with legal technicalities and the minutiae of organisational details. We need to get away, too, from Eurosceptic obsessions that see conspiracies everywhere to try to undermine British sovereignty, and to get on to the real issues of how to promote jobs and prosperity in Europe as a whole. That is the mission that the Prime Minister with the other 11 Heads of Government has set out in the letter. I think that is exactly the right agenda, and it is in stark contrast to some of the suggestions made in today’s debate.
Chris Bryant (Rhondda) (Lab)
It is a delight to follow the hon. Member for Cheltenham (Martin Horwood), even though we were in English classes together at school and I still bear grudges about that. He was broadly right in his analysis—I appreciate that my right hon. Friend the Member for Warley (Mr Spellar) will worry that I am praising a Liberal Democrat—and I agree with him. I agree, too, with all those who said that it is a shame that we had to use the Standing Order No. 24 procedure to secure a debate on one of the biggest issues affecting parliamentary sovereignty, our economic future and our relationship with some of our biggest allies in Europe. In addition, we do not usually get to hear enough from the Minister for Europe.
If the Government take away one thing from today’s debate, I hope it is the fact that we need properly structured debates before European Council meetings, so that they have a strong mandate from us and we are able to inform what they take to the meetings.
It is a shame that the hon. Member for South Northamptonshire (Andrea Leadsom) is no longer in her place. I gather she is often referred to nowadays as the new iron lady—although I do not know who will get an Oscar for playing her in the future. I profoundly disagree with her that a multi-tier Europe is a good idea. During my four and a half seconds as Minister for Europe the BRIC economies—Brazil, Russia, India and China, and for that matter, Mexico—repeatedly told me, “It is essential that we know that we are dealing with a single market.” If we decide to cut up the single market, with lots of different tiers of different elements of legislative proposals, it will do us damage with the growing economies of the world. China is not interested in dealing with 27 different countries in Europe; it is interested in doing business in Europe. If it is going to be more difficult to do business in Europe, it will do business elsewhere—and we will have cut off our nose to spite our face.
I wholeheartedly agree with the hon. Member for Stone (Mr Cash) about the danger of technocratic Governments being imposed on other European countries. There has always been an element of democratic deficit within the European Union. In a sense, it is almost inevitable—unless we choose to elect a single President and Government of Europe, to which I would be wholeheartedly opposed because I do not think that there is a single people of Europe. That is why we will always have a strange mixture of elected Governments in member states working alongside a European Commission and a European Parliament. It will never be perfect, but I would say that this House is not perfect in different regards either. The historical process of parliamentary democratic reform in this country has always been a matter of trying to improve on what we had last year—not some golden ideal, but improving on what we had and have last year and this year.
Of course there need to be changes in Europe, but if the economic solutions effectively being enforced on some European countries have so little support within those countries, there is a danger not only that the individual Governments will face riots and significant civil disturbance, but that the whole European Union could face big problems.
I agree with the hon. Member for Stone in his analysis of Germany, too. That country has tended to suggest to the world that it is paying for rescuing the countries in trouble. That is far from the truth. The honest truth is that Germany is making an awful lot of money out of the present arrangements and intends to make even more money out of the arrangements on the table in the near future. We sometimes need to push back to the Germans and say, “Actually, you need to be little bit more honest about exactly where your economic and financial interests lie in all of this.”
The broad position is that there are two choices. We can try to make the euro work because the UK believes that if it were to fall apart it would lead to significant dangers, particularly given that we are the banker and the financial powerhouse of Europe. I believe that that is the right approach for us. There were problems with the initial creation of the euro, particularly when there was no enforced audit, and countries could simply make up the numbers, sometimes even employing extremely expensive accountants to help them to do so. Some big countries in the EU wanted to turn a blind eye to it because they themselves worried about the enforcement of the stability and growth pact, so they allowed some countries to do that. It is important that we rectify some of those inherent problems in the creation of the euro, which is why, broadly speaking, advancing towards some kind of fiscal union, as adumbrated in the treaty, is the right direction for us to take, although there might be some details about which I would be worried.
There is an alternative route, however, which is essentially to dismantle the euro. I know that some Conservative Members believe, for perfectly legitimate reasons, that that is the right course to take. They believe that we cannot have a single currency with a single interest rate for the very different labour markets across the whole of the EU. I just think that that they are wrong on that. I believe, and I suspect I will be proved right, that not a single country will leave the euro this year or next year; in fact, a couple more might join it.
There were problems with the UK veto exercised before Christmas. It has, to coin a term, left us with a Bulgarian muddle. In truth, we have neither an EU treaty nor a not-EU treaty; we have a sort of European treaty that is a halfway house with legal dubiety at its centre. That is where the hon. Member for Stone is absolutely right. I think it would have been better if we had stayed at the table and made sure that we had an EU treaty that was right for Britain. I disagree with those who say that this is a question of more Europe or less Europe—
Mr John Redwood (Wokingham) (Con)
This debate is about the future of democracy itself. There can be no more important issue. We are considering a draft treaty that presumes to take substantial powers of decision over how much a country can spend, how much a country can tax and how much a country can borrow from the democratic choices of the member state to a centrally imposed system, which it is hoped will make the euro work better. This matter is of vital importance to the United Kingdom because we wish our neighbours to live in democratic prosperity for their own sakes, because we wish to trade with them successfully and because we wish to make sure that there is no danger whatever that our cherished freedoms and independence as a member state that has deliberately kept out of the euro could in any way be damaged by this treaty, which presumes to use European Union institutions to enforce a non-European institution will.
The peoples of western Europe are right to be mightily worried about the bad state of health of their respective democracies where they have adopted the euro. We see daily on our televisions or hear reported on our radios dreadful scenes from Greece, Spain and Italy, which are struggling with the common economic discipline and policy being imposed today. The German-led new treaty says that such discipline is not strong enough, that there needs to be more mutually assured deflation and that there needs to be a madness imposed on these countries to try to see whether the euro will work.
Ministers rightly say that they must not say anything in public or be seen to do anything in public that makes the difficulties of the euro area worse. I fully endorse that approach. They should never normally comment on the euro, because it is too dangerous, it is too difficult and it is up to those in the euro to say what they wish about how their currency is developing. But how it develops is of grave interest to us, so I urge my right hon. Friend the Prime Minister to ensure that, in private, when he is round the table, as he will be, with all the other leaders and with a right to a view, he speaks truth to their impotence. He should say to those assembled leaders struggling to get a grip on their recalcitrant economies and some stability into their very unstable currency, “This is not working.” He should tell them that, in truth, the treaty before us this afternoon cannot conceivably make the euro work. Other things can help to ease the pain of the euro, and in another debate we could discuss many other policies that could pull off the trick of getting many countries through and the euro out the other side, but this treaty is not the way to do it.
This treaty is deeply offensive to many democratic peoples in the countries of western Europe that will face it. It reinforces a German view of how to make the economies of western Europe work that clearly is not working. If part of the medicine for a country that has borrowed too much is to spend less and borrow less in the public sector—that can be the right approach, and I can think of countries where that could apply—at the same time a series of policies have to be adopted to promote growth in the private sector, so that there is some hope, there are some new jobs and there could be new tax revenue coming in.
Where the EU is proposing tax rises, it needs tax reductions on enterprise, business and success. Where it is proposing a bigger monetary straitjacket, it needs monetary ease. It is now creating a very big monetary easing across the eurozone as a whole by tipping trillions of printed money into the system to try to make it work, but that new money cannot possibly help Greece or Portugal, because they have frozen and damaged banks, they are under the austerity cosh, and representatives of the European Union are going in and treating them as if they are damaged economies that cannot conceivably pull through.
The euro scheme is damaging the confidence that Greece and Portugal need in order to see light at the end of the tunnel; it is putting people off investing there. Why would someone go to Greece to invest through euros, if they think that it may be driven out of the currency and forced into a big devaluation? Why would they seek to do business in Greece when the banks are frozen and they are not benefiting from the liquidity injection that is helping the corporate bond market and the Government bond market, temporarily, in Italy and in Spain?
Above all, our Prime Minister has to secure and protect the British interest. We in this House should be very proud of what our predecessors created, obtaining control over how much is raised in taxation, how much is spent and how much this country borrows and prints. We are rightly out of the euro, because those in it cannot conceivably maintain democratic control over those issues. I am grateful to my hon. Friend the Member for Stone (Mr Cash) for raising this issue today before the summit, but we are worried that—inadvertently, I am sure—the Government might get us dragged into much greater supervision of our economy by the European Union, in a way that signs us up to the very mad policies that we are rightly warning them cannot conceivably work.
Europe is at risk: jobs are being destroyed; economies are being gravely damaged; the people are on the streets; and the main political parties in these European countries are signing up to exactly same policy, so even where a general election takes place the popular will is thwarted, as people do not have a proper choice if they stick to the main parties. In one or two countries Governments are even being changed by the European elite without a single vote being cast and without the democratic view of the people and their parties being consulted. Surely everyone in this House is ashamed of that. Surely we all unite in saying that the thing that brings us together is our belief in the power of the ballot box, the voice of the elected representative and the right of people to choose and to say that a policy is failing. We are told by the European establishment that only its policy can work. There is no evidence whatsoever that the policy is working, but there is massive evidence of the damage it is doing.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Eight speakers wish to speak and the Minister would like 15 minutes in which to wind up, so it would be helpful if Members tried to be generous to others.
Mr James Clappison (Hertsmere) (Con)
It is a great pleasure to follow my right hon. Friend the Member for Wokingham (Mr Redwood), and I strongly endorse the sentiments he uttered throughout his speech, including those at the end. I warmly congratulate my hon. Friend the Member for Stone (Mr Cash) on securing this debate.
I heard the comments made by the hon. Member for Cheltenham (Martin Horwood), who speaks for the Liberal Democrats on Europe and does so consistently. He suggested that my hon. Friend is being technical or difficult in raising these matters for debate, but he had the House’s support for an emergency debate. My memory of events in this House goes back a long time, and I recall that similar comments were made when my hon. Friend was raising concerns about the Maastricht treaty and about the single European currency. Yet a very wide body of opinion in this House now suggests that the Maastricht treaty should never have been signed and that the single European currency is not a self-evident good. The hon. Member for Cheltenham would do well to remember that. When my hon. Friend the Member for Stone rings the alarm bells, we should all prepare to man the barricades.
Mrs Anne Main (St Albans) (Con)
Does my hon. Friend agree that mission creep over the years means that we are right to be sceptical now?
Mr Clappison
My hon. Friend is absolutely right, and the apposite point is that this treaty is a new form of mission creep by the European Union. We need to be clear that something new and important is happening in the European Union, as has been suggested by learned legal opinion submitted to the European Scrutiny Committee. We have seen in the past, under our European Union treaty obligations, that notwithstanding the promises made to us, there has been a massive erosion of the United Kingdom veto and a substantial extension of EU competences—but at least we have always known that that has been done within the framework of the treaties themselves and that we have conferred power on the EU within that framework.
We are now dealing with something novel, because when hon. Members come to look at this agreement in detail they will find that it is not within the framework of the EU treaties; it is a separate international agreement that deals with how the European Union might act. Although it is said to be an international agreement, it is not an EU treaty and it will not describe itself as such, but the EU runs through it like a golden thread. It is as if the EU has come up against an obstacle in proper legal procedure and just decided to ignore proper legal procedure and go its own way; it has looked at the rulebook, the rulebook was not convenient for it and so it has torn up the rulebook and drawn up a new set of rules. The way in which it may act within that new set of rules could have substantial implications for our country. I hasten to add that our Government have taken the right course so far in dealing with that.
Martin Horwood
The moment had almost passed, but the question I was going to ask was: if the hon. Gentleman is questioning even back to Maastricht, does he still support the single market, which Conservatives would surely see as one of the greatest achievements the European Union has delivered?
Mr Clappison
With the Single European Act, we had a single market established before the Maastricht treaty. I do not have time, in the seven minutes available, to go over the whole Maastricht treaty, but a very wide body of opinion now suggests that it should never have been signed—I have heard that said from the Government Front Bench. All the safeguards that were put in place have turned to dust. Let us bring things a little more up to date. The hon. Gentleman will recall that his party was so upset about the signing of the Lisbon treaty that it wanted a referendum on getting out of the EU altogether, and Liberal Democrat Members walked out of the House.
The hon. Member for Rhondda (Chris Bryant), who is no longer in his place, made some apposite points, as did the right hon. Member for Rotherham (Mr MacShane), although he was completely wrong. He asked what was wrong with groups of states coming together within the European Union to do something where not all member states are participating, as in the case of the Schengen agreement and many other things. That comes back to my main point, because that was all being done within the framework of a treaty. A completely different treaty is being set up now, but it is one within which member states are still co-operating and operating within the framework of the European Union, using the EU institutions, as we know. It was apparently drawn up by the European legal service, the European Commission has a central role in it, the European Commission is mentioned in the whole of the preamble and throughout every article, and the final decision-making body with arbitration powers over this is the European Court of Justice.
Mr Clappison
I will give way to my hon. Friend at the end, if I may, because I need to make one or two other points before then.
I would respectfully draw to the attention of the Minister the fact that although we are rightly not a part of this treaty, it brings about some fundamental innovations in decision making among EU member states. In particular, I refer to articles 7 and 8. My hon. Friend the Member for Stone rightly referred to the coercive powers being taken by the European Union, and I urge my right hon. and hon. Friends to consider just how coercive those powers are and to try to ensure that they are never brought to bear against this country. No pressure should be put on us to submit.
There is a body of opinion in the EU that wants to make this country submit to the EU deficit procedure and we have, unfortunately, entered into some commitments on that. We must keep out of those commitments because they run completely counter to the principles of democracy both in the individual member states and in the EU. Under article 7—let us remember that this is not an EU treaty and is outside the EU—when the Commission is of the opinion that a country is in breach of the deficit procedure, it brings the matter before the other member states and unless there is a qualified majority vote against taking the decision that the commission wants to take, the matter must be treated as a breach and the offending country will be hauled before the European Court of Justice. This is a very significant procedural development.
We are familiar with how we used to have a veto in European Union matters. It goes back to 1975 and we were promised when we joined the European Union that we would always have a veto. That was eroded and we agreed to abide by the qualified majority vote for more and more things, particularly in the single market, but at least it was a qualified majority vote and a qualified majority of states had to be in favour of a measure before it could take effect and legally bind this country. Under the new EU method of decision making, the Commission gets its way unless there is a qualified majority vote against what it wants to do. There could be a clear but simple majority of EU member states against the Commission’s finding a member state in breach, but it will still legally be necessary for the country to be considered to be in breach and hauled before the European Court of Justice even though a majority of EU states were against that course of action, and despite what individual electors in the countries concerned might want. There could scarcely be anything more coercive than that.
My hon. Friend the Member for Stone is right to ring the alarm bells. This is a new procedure—it is very new—and it is taking EU integration to a completely different level.
Mr Clappison
I have given way to the hon. Gentleman once and I am afraid I am not going to go back to all the treaties—Lisbon, Maastricht, Amsterdam— we have had in the past. He has had his chance to have his say.
I warn right hon. and hon. Members to look at the detail of the treaty. It is new and very important and is worrying in the context of what is taking place in Europe, particularly as regards the lack of democratic control that countries now have over their decision making and over very important fiscal and economic matters that go to the heart of democracy. I urge colleagues and my colleagues on the Front Bench to be vigilant. The Government took the right decision in vetoing the treaty—we had the right to do so, it was in our interests to do so and we should never have considered being part of such a framework.
My right hon. and hon. Friends have been right to reserve the Government’s position, as they have through the letter that has communicated the Prime Minister’s view through Jon Cunliffe to the European Council. We reserve our position on the use of EU institutions, which we are entitled to do, and there should be no criticism of the Government—the Opposition are being very opportunist if they try to make something out of it—but, in its typical way, the EU has taken no notice. We should take no notice of the EU, however, and we should insist on the strict letter of what we are entitled to under the treaty provisions and be extremely vigilant to ensure that there is not, to use the words of my hon. Friend the Member for St Albans (Mrs Main), any further mission creep by the EU. We should ensure that we have no part in these matters. We are not part of the euro and we should be very careful to ensure that the EU does not try to extend the scope of what it is trying to do over this country. If it does, it will be at the expense of democracy and of this House. We have seen far too much of that already in my time in the House, and we need to be vigilant and to stand firm against these very worrying new legal developments in the EU.
Mr Peter Bone (Wellingborough) (Con)
It is a great pleasure to follow my hon. Friend the Member for Hertsmere (Mr Clappison) and I agree with every word he said. I shall try to discuss some different issues in my speech.
Let me start by congratulating my hon. Friend the Member for Stone (Mr Cash) on achieving a debate under Standing Order No. 24. I want to comment first on its parliamentary significance. This is only the second time in my parliamentary career that I can remember such a debate being granted, and the first was on the phone hacking scandal. This shows the importance that Mr Speaker gives to the matter. More than 100 Members rose in the Chamber when he agreed to the debate and they were not just from one side of the House, but from both, and they were not just from the Conservative and Labour parties, as all the Democratic Unionist party members were here. It was a very significant show that this House wanted to discuss its views in advance of the European summit and that Members wanted to get their message across to Ministers. I hope that when the Minister sums up, he will be in receiving rather than transmitting mode. That is why this debate is important— Ministers should know what the House is thinking before they go to Europe to debate the issue and, if necessary, cast any votes.
I want to return to the question of the procedure that has led to the mess we find ourselves in today.
Graham Stringer
The hon. Gentleman is making a point that has previously been made in this debate in slightly different ways, which is that there should be more opportunities for this House to say to the Government what position they should take before they go into European negotiations. Does he agree that such debates should not only be reinstated but be on votable and amendable motions?
Mr Bone
The hon. Gentleman is psychic, because that was the very point I wanted to come on to. It is ridiculous that we are not having such debates and it is even more ridiculous to suggest that they should be scheduled by the Backbench Business Committee. Everyone knows that the Backbench Business Committee is supposed to get 35 days a year, but that has not happened in this double Session of Parliament. I am very pleased to see the Leader of the House pay close attention to the debate and it would help the House enormously if the Committee had the days marked in advance. If that were the case, perhaps the Backbench Business Committee could put on such debates, because we would at least know in advance that we had the days. We did not have a day before the summit on which we could have scheduled this debate. That is not the issue, however. This debate should not be put on by the Backbench Business Committee but by the Government, and it should be on an amendable motion rather than a “take note” motion. I agree entirely with that point.
Let me briefly mention the veto. The Prime Minister rightly vetoed the EU treaty, and no one can pretend that this is an EU treaty—it clearly is not, because we vetoed it. It is also clear that the Prime Minister and the Government believed that the EU institutions could not be used.
Mr Spellar
I think that the hon. Gentleman might just have answered my question. He was stridently asserting that the Prime Minister had asserted his veto, and I wanted to know what he had vetoed and what effect it had had.
Mr Bone
I do not honestly believe that the right hon. Gentleman, who has sat all through this debate, could possibly not understand what the veto is about. The Prime Minister quite clearly vetoed the treaty so it could not be an EU treaty. That is what happened. That is why the British people were 100% behind the Prime Minister and why coalition Members—or at least the Conservative coalition Members—were wholly supportive of him. He had a better reception for that veto than for any other of the very good things he has done as Prime Minister.
The next issue is whether the treaty will work. I am sorry that the hon. Member for Rhondda (Chris Bryant) is not in his place, but he made a very good point when he said that there were two ways of looking at this matter. One was that we could create this European political and economic union dominated by Germany and that the euro would work. I do not think there is any chance of that system working and it would actually result in the greatest political unrest in Europe since the second world war.
Bob Stewart
It looks to me very much as if we would have a centralised economy commanded by Germany. If there were any chance of it working, it would be brought down by the fact that the people of Europe—the people most affected by it—would reject it. There would be a total rebellion by the people of those countries.
Mr Bone
It is very appropriate that my hon. Friend in particular made that point. What we would see is extreme nationalism. We would have extreme nationalists saying, “This is the fourth reich,” and all that that would mean. I am talking not just about little political demonstrations on squares outside Parliaments; it would overturn democratically elected Governments. That is why the solution that the hon. Member for Rhondda suggested would not work.
The solution to this problem is to allow countries to leave the euro in an orderly way. Greece, Spain and Portugal at least would come out of it and would then be able to do what every other country has done in the past when it has had an economic problem—devalue its currency and set its own interest rates. There would then be some hope for growth in the future. The idea that we will permanently have regions of Europe that will always be depressed and have the most horrible austerity funded by German taxpayers is beyond belief. I have a feeling that the good and the great of Europe have a policy at the moment of hoping that something will turn up. It is like borrowing more and more on one’s credit card hoping that one’s Euro lottery ticket will come up. It will never come up. What they have to do is deal with the problem now. That will not be pain-free but it will result in a Europe that will begin to grow again. That would be not only in our interests but in the interests of other individual countries.
Probably the main point I want to address is whether we as a nation are being a good Samaritan. It seems to me that we are not, although we see the problem. We did not go into the euro because we always thought that we could not put different countries with different political structures into one economic area with one interest rate and one currency and expect it to work. We said that was wrong, and that has proved to be the case. What we are doing at the moment—this is where the good Samaritan point comes in—is walking by on the other side of the road. We can see what has happened and that something is seriously wrong—that someone is seriously sick—but are we prepared to risk being unpopular and say something about it? If we were a real friend and a real good Samaritan we would say, “You’ve got this wrong and the way to fix it is not to carry on but to stop, think of the problem and solve it by having an orderly reduction in euroland.” That is where we are letting down not only ourselves but other countries in Europe. I urge the Minister not to walk by on the other side of the road but to be a good Samaritan.
Mark Reckless (Rochester and Strood) (Con)
This debate is not just about legality; it is about how we best protect our interests, which are best served by having a strong and vibrant growing European economy. Currently, we do not have that, and the reason we do not have it is the euro. The idea that the solution to that is more euro is no more credible than the Opposition’s suggestion that the solution to a crisis caused by borrowing is more borrowing. If we are to protect our interests, we need to know where those interests are, to be modest and to recognise that our influence on these matters is limited. I believe Greece would be far better off if it were to leave the euro, default, devalue and price its way back into the market. We could encourage our constituents once more to go on holiday in Greece and it would recover in a way that it cannot if it stays within the euro. However, that is a decision for the Greek people and is one over which we have precious little influence.
I shall concentrate on Ireland. Yesterday, the Taoiseach announced there would be a referendum in the Republic to reaffirm, or otherwise, the country’s commitment to the euro. Ireland faces a fork in the road and has three potential choices: to stick with the euro and the programmes being imposed on it; to reinvent its own currency; or to re-establish a relationship with the pound sterling. In December 2010, I commissioned an opinion poll across the Republic of Ireland by a company called RedC, which interviewed a representative sample of 1,000 Irish people, somewhat more than a third of whom agreed that in light of the financial crisis they would support Ireland’s leaving the euro and re-establishing a link with the pound sterling. Earlier, we heard from the Prime Minister that while the eurozone says, “We will only support the Irish people if they vote as we tell them to,” the UK will support the Irish people whatever choice they make in this referendum on their future.
We in this country have very clear interests in Ireland. Last year, we were exporting more to Ireland than to all the BRIC countries—Brazil, Russia, India and China—but that has now changed and we now export 8% to the BRIC countries but only 4.5% to Ireland. That is because the Irish economy has contracted so much that there has been a significant negative impact on the UK, and particularly on Northern Ireland, in terms of our exports. Irish migration has turned from a net migration from this country into Ireland to a very strong migration the other way. That is something we have allowed for many years. I should declare an interest because my mother came to this country from Ireland as a 17-year-old nurse. If the euro prevents Ireland from creating jobs for its young people, we will create those jobs and they will come here and continue to be welcome, but would it not be better if Ireland had a monetary policy more suited to its needs?
The euro is destabilising the Irish economy, and it will do that again, just as it has already done, at great economic cost to Ireland and some economic cost to the UK. In addition, the bail-out we are told that Ireland is getting is a bail-out not of the Irish people but of the European banks. The current position is that the European Central Bank has extended—in my view extremely unwisely—very large sums of money to the Irish banking system, ostensibly as liquidity support, initially for the short term but increasingly for three years, at very low interest rates. The Irish bail-out replaces that credit with official credit that the Irish taxpayers, not just the Irish banks, will have to pay back. Instead of the European Central Bank supplying all the credit, which it is, realistically, unlikely to get back, that credit is being displaced by taxpayer financing from the EU, the eurozone, the International Monetary Fund and, indeed, this country. The Irish people will have to pay that back instead of the European Central Bank suffering the losses it deserves for causing this crisis in Ireland and for having very unwisely extended credit.
Ireland faces a choice: whether to stick with that system, grind further into poverty and give control, in this Carolingian settlement, to France and Germany to lord it over them, or to reinstate its own currency. Were it to do that, it would need capital controls, otherwise there would be capital flight, and it would not have access to overseas capital. It would need to pay the difference between its spending and tax by printing its own money, there would be significant devaluation and probably quite a lot of inflation, and in the short term there would be very severe uncertainty. None the less, that would be better for Ireland than sticking with the current European programme.
Instead, the other option, which, when I question the Chancellor and the Prime Minister, at least appears to be on the table, is re-establishing the old link that Ireland had with sterling within a single currency area. I am talking about a common currency area that makes some sense for similar economies with similar housing markets, in which the interest rate does not lead to the boom-and-bust cycle that the euro that has been applied to the Irish economy so inevitably does. Instead of relying on official European credit with all the terms, conditions and subjugation that involves, and instead of cutting the country off entirely from overseas credit for a period with all the risks that entails, the Irish economy could look to the UK private sector, much as, to a degree, it is now doing, certainly in terms of the property market, to give the support and credit that the Irish banking system cannot provide itself.
When we look at our interests—we have the Royal Bank of Scotland and the Ulster bank—we see that UK banks have already written off or taken impairments for £40 billion-worth of loans to the Irish economy, but the Bank of Ireland, despite negative equity of perhaps £15 billion in respect of its Irish property loans, has taken only a £1 billion impairment. Very few Irish people have had their homes repossessed, and there has just been a carrying on, with massive negative equity and with the interest just about being paid. That cannot be sustained in the long term, and this country should stand ready to support a recovery in Ireland by sharing our currency if necessary, in our own interests, in Irish interests and in Europe’s interests.
Mr Robert Buckland (South Swindon) (Con)
It is a pleasure to participate in this welcome debate, which, as my hon. Friend the Member for Stone (Mr Cash) said, allows for the expression of a wider spectrum of the opinions in the House on matters germane to the European Union and the crisis in the eurozone, and I am grateful to him for securing it. I reiterate a point that I made to him in an intervention, and that needs to be underlined today: it is incumbent on both Houses to raise their game when it comes to the scrutiny of European legislation in its various forms, and to raise their game significantly when it comes to debates about thematic developments in the European Union.
The European Scrutiny Committee, which my hon. Friend chairs, does an admirable amount of work, but its limited remit, as I think he would concede, does not allow it to go as far as he and others would perhaps like in looking at some of the thematic issues raised today. That is why I strongly believe that it is the role of subject Select Committees, at a far earlier stage, to do the work of scrutiny, examination and report. That would add to the quality of debate on the detail of European policy.
I am a member of the Justice Committee, and together with other members, I recently paid a most instructive visit to Brussels. We met the Vice-President of the Commission who has overall responsibility for justice and home affairs, and we met other members of the directorate-general. Frankly, it was instructive, because it became blindingly clear to me and my colleagues that we as domestic parliamentarians need to have an input into the detail of proposed regulations at a far earlier stage. I am thinking particularly of the justice and home affairs pillar; by 2014, we have to have considered whether we opt into the entire mechanism, or stay out and perhaps adopt some of the regulations that we have chosen to opt into thus far. That is important work that we are missing.
The Liaison Committee has met my right hon. Friend the Minister for Europe, and I know that the Government are keen for Parliament to take a far more proactive role. I am glad that they take that view, and I look to the Liaison Committee and the Chairs on it to take up the cudgels, or the baton, and get that scrutiny right.
Far too often in debates about the European Union—I speak as a lawyer with 20 years’ professional experience—we end up talking about the legalistic aspect of Europe, and we forget that Europe is nothing without its people. I have the honour of representing a constituency in Swindon that has many links with the European Union. We have many major manufacturers, including car manufacturers such as Honda, which exports 50% of its vehicles to the 27. We have a number of other international companies that export widely to the European Union. Our links and trade with Europe are vital.
I yield to no one in my enthusiasm for widening trade with the BRIC countries—Brazil, Russia, India and China—and the wider world. That agenda is something that we all agree on, but we have to accept the reality of Britain. The reality is that the EU—the 27—is still our major trading partner. Any scintilla of schadenfreude, or a wish that the eurozone would break up, is dangerous. It suggests that somehow we are not linked at all with the affairs of the EU—that it is a faraway place of which we know little. I think of Neville Chamberlain when I say that, and I resent bitterly the suggestion that those of us who favour positive engagement in Europe are the heirs of appeasement—far from it. We are fully engaged with the affairs of Europe. The lesson from history is that when Britain disengages, we end up having to go in to sort the mess out, and I for one am not prepared to take that path.
Richard Drax (South Dorset) (Con)
Does my hon. Friend not accept that all of us in this country want to trade with Europe? There is no question about that. There is no “little island” mentality. We want to be part of, and trade with, Europe; we just do not want to be told what to do by Europe, and we want our own currency. It is not a matter of “little Britain”. We do not want to get out; we want to trade with Europe—that is it.
Mr Buckland
I do not disagree. My hon. Friend the Member for South Northamptonshire (Andrea Leadsom) made a powerful point about variable geometry; we should use Europe in our national interests, and work with it where appropriate. My hon. Friend the Member for South Dorset (Richard Drax) is absolutely right about trade and the single market, which was, let us face it, a British invention. Lord Cockfield did a huge amount of work to make sure that that aspiration became a reality, and my hon. Friend is right to emphasise the issue. As for not being told what to do, again he makes a fair point. I do not accept that, at any stage, the British Government, or the people of this country, should be put in a position in which they end up doing something against their will. That is why I supported the Bill on European referendums, now the European Union Act 2011, why I agree with the mechanism that the Government proposed, and why I was happy to speak in support of that Bill on Second Reading and at other stages.
To come back to the reality of the debate about Europe, we are talking about real jobs. We should be talking about trade, widening the single market, the digital economy and the energy market—all things that form the subject matter of a very helpful letter, signed by the Prime Minister and 11 other Heads of Government on 20 February, which set out a plan for growth. That should be at the core of negotiations at the European Council. That should be the agenda, because that is the agenda that is relevant to my constituents and the wider country. It would be wholly ridiculous for me, an elected representative of Swindon, to say to my Honda workers, “What we need is more arcane debate about the legality of Europe,” when what they want to hear is debate and discussion about how we can grow the economies of Europe and expand the growth agenda. That is what I call on Ministers to do.
Mr Buckland
I shall take an intervention from my hon. Friend, as he was good enough to allow me to intervene on him.
Mr Cash
I entirely agree with my hon. Friend, and it has been, in a way, my political life’s work to try to draw attention to the effect that this legal framework has on our daily lives, but it is absolutely unacceptable to suggest that we can make any changes of the kind that he would prefer to make, in order to benefit his constituents or mine, without having regard to the legal constraints imposed on us as a result of treaties.
Mr Buckland
I yield to no one in my respect for my hon. Friend, and he and I have had many conversations on these issues, but we cannot get away from the point that the European Union is an exercise of political will first and foremost. It is the political will of its members that drives the future course of the European Union. I accept that we all work within a legal framework, but let us be clear about where we are. The 25 have agreed to sign a treaty that is not an EU treaty. If there is to be any proposed fold-in in five years, the British veto will apply. We have the right to say no, and that is an important point that we need to underline.
Mr Buckland
I shall take an intervention from my very good and honourable Friend.
Jacob Rees-Mogg
I am grateful to my hon. Friend for giving way. We may not have the ability to say no, because the issue may qualify for enhanced co-operation in five years’ time.
Mr Buckland
As a lawyer, I love a legal debate, and bearing in mind what has been said and the aspirations signed up to by the 25, I think there is a very strong case for saying that when the five-year period comes to an end in 2021 or ’22, we will still be in a good position, bearing in mind the clear political will that the Prime Minister has shown by his refusal to participate, and to allow the United Kingdom to participate. That is a very clear statement of intent, and I would be happy to argue the case on that point in five years’ time, just as I am happy, and happy for the British Government, to argue the case about some of the articles in the fiscal compact. Where there is reference to the European Court of Justice, it is incumbent on the Government to argue the point, and to make it clear that we wish the compact to be entirely outwith the institutions of the EU.
Those are matters of legal debate. I do not accept that they are now set in stone, or in some way unarguable or unimpeachable. Let us bear in mind what happened in the economic crisis of 2008, when member states cast to the four winds rules that we all thought immutable. We need to remind ourselves at all times that the institution is an exercise of political will or it is nothing. That is why clear expressions of political will, such as the one that we heard from the Prime Minister in December, are the right approach. I welcome the debate, and I thank my hon. Friends for taking part.
Jacob Rees-Mogg (North East Somerset) (Con)
May I join in the congratulations to my hon. Friend the Member for Stone (Mr Cash) on getting this crucial debate, and say how shocked I am by my hon. Friends the Members for South Swindon (Mr Buckland) and for Cheltenham (Martin Horwood) for their view that the legality does not desperately matter and it is all about politics? This is a novel and somewhat eccentric view for parliamentarians to take, when the heart of the matter is the law and the detail of the law. Without the rule of law, what we are doing here ends up being a waste of time.
Jacob Rees-Mogg
My hon. Friend is bursting to intervene, so I happily give way to him.
Mr Buckland
As I said, as a lawyer I realise that although the law is not irrelevant—of course it is not—political will often takes precedence, as we have seen in the history of the development of the EU. Surely my hon. Friend can accept that.
Jacob Rees-Mogg
I am afraid to say that I disagree with my hon. and almost learned Friend. Law is the foundation of what politicians do, and politicians use their political will through the law. Indeed, they have the ability through Parliament to change the law, but they cannot just ignore it.
That is why I want to come on to Sir Jon Cunliffe’s important letter. He makes two significant points. First, he notes that
“the EU institutions must only be used outside the EU Treaties with the consent of all Member States, and must respect the EU Treaties.”
In response to a question at a meeting of the European Scrutiny Committee last week from my hon. Friend the Member for Hertsmere (Mr Clappison), the Minister for Europe—who, if I may say so, was extremely helpful at the evidence session—said when asked whether permission had been given by the Government for the EU treaties to be used:
“No, we have not been asked so to do.”
It ought to be of grave concern to the House and to the country that the member states of the European Union, excluding us and the Czech Republic, have decided to proceed with a treaty without establishing that they are following the correct legal forms.
Mr Cash
My hon. Friend may be interested to know that yesterday in the European Parliament, which I attended as Chairman of the European Scrutiny Committee, in a dialogue between MEPs and MPs, one of the French representatives said from the platform to the chairman that she did not think it appropriate for me to be able to make certain comments because the United Kingdom Parliament and the United Kingdom were not part of the eurozone. My hon. Friend might find that rather extraordinary.
Jacob Rees-Mogg
Indeed, but one never knows what people might say in relation to the European Union.
As I was saying, it is a shocking state of affairs that our partners in Europe should want to proceed with a treaty without even bothering to go through the proper forms to ensure that that treaty is lawful under EU law. They have not even asked the question. It may be that they know what the answer will be, but if they do, they are one up on most Members of Parliament.
The other point raised in Sir Jon Cunliffe’s letter is that
“we must reserve our position on the proposed treaty and its use of the institutions”.
This, again, is very important because what we are trying to find out is whether the Government are reserving their position on the current legality of the treaty, or how the treaty will be used in practice. If it is the former—if the Government are concerned about the current legality of the treaty—it is important that they act now to establish their concern and to have a judgment from the European Court of Justice, rather than waiting. If the Government wait, as my hon. Friend the Member for Stone said earlier, he who is silent is seen to consent, and we will find that we have allowed the treaty to be implemented and we will have lost our ability to have recourse—
Jacob Rees-Mogg
It is a particular honour to give way to my hon. Friend the Member for Cheltenham.
Martin Horwood
It is an equal pleasure to intervene on my hon. Friend. I am grateful to him for allowing me to do so. Does he accept that by reserving their position, the British Government may gain something of a tactical advantage by perhaps retaining the ability to challenge any future perceived breach of this treaty and therefore encouraging compliance with the European Union treaties?
Jacob Rees-Mogg
I am afraid I do not agree with my hon. Friend because a key part of the treaty may already be in breach of European Union law. I refer hon. Members to article 8, which states:
“If the European Commission, after having given the Contracting Party concerned the opportunity to submit its observations, concludes in its report that such Contracting Party has failed to comply with Article 3(2), the matter will be brought to the Court of Justice of the European Union by one or more Contracting Parties.”
What that says is that the European Commission may end up enforcing requirements under the stability pact in direct contradiction of TFEU—the treaty on the functioning of the European Union—126(10). We discussed this at length in the European Scrutiny Committee and the Foreign Office’s wise legal counsel, Mr Ivan Smyth, gave us a very helpful answer—that in treaty terms, “will” is not an obligation, and if it were an obligation, the wording would have to be stronger than “will”.
It seems to me that that is a pretty narrow basis for maintaining the legality of what the treaty requires the Commission to do. Let us bear in mind that under the treaty law, the European Commission does not have the authority to enforce the requirements of the stability pact on member states; under this treaty it does not quite have that authority directly, but it is so close to doing so that it would not make any difference at all.
A further aspect of the treaty concerns me. Article 16 says that the treaty will be rolled into the TFEU within five years, so it will become part of the whole package of European Union law within five years. It is currently thought, though others may think differently, that it would not have been possible for this treaty to be brought in under enhanced co-operation. However, there is a school of thought that maintains that the European Stability Mechanism treaty which is awaiting ratification by Parliament would allow enhanced co-operation to be used, in which case this treaty could be rolled into the European Union’s treaties without the say-so of the House, under enhanced co-operation. We should be deeply concerned about that, not least—going back to article 8—because it refers to how countries may be fined. Let us bear in mind that the treaty is supposed to be all about the eurozone member states, and is nothing to do with non-eurozone members and nothing at all to do with the United Kingdom because we are not a signatory and it is not yet part of the TFEU. But if that is the case, why does it say
“The amounts imposed on a Contracting Party whose currency is the euro”—
that is, a fine of up to 0.1% of GDP—
“shall be payable to the European Stability Mechanism. In other cases, payments shall be made to the general budget of the European Union”?
We have here a treaty that is making provision for fining non-euro members for their budgets, even potentially ones that have not signed up to the original treaty if it is rolled in within five years, as the treaty itself requires. That is why this debate is so important to establish the legality and see whether we can at this early stage stop this treaty—a genuine veto, rather than a soggy veto—or whether we will find that by doing nothing now, by being friendly, kind and generous to our neighbours, we do not really help them with the economic situation that they face. I agree with those who say it would be better for some countries to default and devalue. We will instead find that by being silent, we have consented to a treaty that is against our fundamental national interests.
Neil Carmichael (Stroud) (Con)
Thank you, Mr Deputy Speaker, for allowing me to contribute to this important debate. I have listened carefully to a large number of speeches, many of which have raised interesting points, including that of my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). I recognise that there are issues relating to the legality of the proposed treaty, but it is important to stress that this is not an EU treaty. That is the key point and the one on which our case must rest; otherwise, we will get terribly confused. The second key point about the treaty is that it includes not only all members of the eurozone, but aspirant members. However, it does not include us as we are neither members nor aspirant members of the eurozone.
Mark Reckless
My hon. Friend suggests that there might be confusion and asserts clearly that the treaty is not an EU treaty, but surely if it was an international treaty it would be in international public law and subject to the jurisdiction, such as the states agree, of the International Court of Justice at The Hague. However, it is actually being implemented through the European Commission and will be subject to the European Court of Justice, both of which are creatures of European Union law.
Neil Carmichael
I thank my hon. Friend for his intervention. That does not alter the fact that it is not an EU treaty, and that is the point. The Commission might well take a view on these matters, and that brings me to another key point. It is in our nation’s interests to ensure that the treaty works in protecting the euro in the long run. We do not want the euro to fail, because that would badly affect our economy. It is important that we continue a dialogue with the process but are not actually involved in it. It seems to me that what we have secured through the veto and our continued resistance to being a part of the treaty is essentially an overview on proceedings to ensure that the EU positions are safeguarded, because in so doing we will protect our interests and those of the overall single market.
It is important to note the comments of the US Secretary of State, Hilary Clinton, who noted that the United States was concerned not about our failure to be part of the treaty, but about whether the treaty itself would succeed in its principal mission of enhancing the position of the euro. That is a clear expression of the American Government’s position, and it is consistent with our position because we, too, recognise that that is a fundamental priority. I am not often asked by constituents whether the treaty is an EU treaty or some other kind of treaty; what they are worried about are the economic circumstances in which they live, and that is what we have to start talking about.
Although I welcome the debate, I am disappointed that it was secured only as a result of Standing Order No. 24, and that for that reason we had less than 24 hours to consider it, but it is also necessarily important to talk about what will happen at the European Council, which is almost immediate. At that Council we need to drill down on the key issue of what we need to do to ensure that growth comes to Europe and to Britain.
Mr Buckland
On that point, should not priority be given to tackling the tariff barriers and, indeed, non-tariff barriers that often exist between the EU and countries such as Japan and other major competitors, which are a real block to more effective trade?
Neil Carmichael
My hon. Friend is absolutely right, and I thank him for that intervention. It is crystal clear that we need to engage properly with the large economies, such as those of Japan, China and the US, because they understand that we are talking about a European dimension. He has hit the nail on the head in that regard. It is critical that we look outward for trade opportunities and inward to ensure that we are internally competitive. That means that the single market needs to be further upgraded and that the energy market needs to be made into a European market, because until it is we will continue to suffer from price variance and supply problems. If Members want to know about that, then rather than worrying too much about what is happening in Europe with regard to policy, they should just ask their constituents, who will tell them that they want more stable and lower energy prices, and the way to achieve that is by developing an energy market.
To do all those things, Britain must be a key player in the European Union, and the Government are rightly ensuring that we are. We have to be there in order to develop bilateral relationship and to be part of the leadership of the European Union, so it is right and proper that we show a responsible attitude to the way in which the treaty we are talking about unfolds. If we are seen to object to any measure intended to protect the euro or to deliberately obstruct the measure they wish to introduce, we are at risk of taking some blame for something that we do not want to happen in the first place. Therefore, it is in our interests to start co-operating with those nation states that are considering the treaty. That is why we should be sensible about the use of the EU institutions.
At the beginning of this whole process, immediately after the veto, I said that we should consider the questions relating to the use of the EU institutions. There are two good reasons for allowing the use of the EU institutions: first, to secure our reputation as a country that is involved, engaged and ready to contribute to the future of the EU; and secondly, to ensure that we can easily observe what is going on, because we have a clear and obvious interest in making sure that the EU treaties, such as the Lisbon treaty, are enforced and maintained as part of the governance of the EU. That is how we will be able to check the legality of the treaty we are talking about today. We will do that not by complaining about it or chucking grenades into the process, but by allowing it to happen and ensuring that we keep an eye on what is happening. That is the Government’s key objective and I am pleased to note that that is what the Government are doing.
I will end with the points that are really important to my constituents. In my constituency we need jobs, growth and investment. There are firms in my constituency that depend on European markets and that are part of significant and complicated supply chains stretching across Europe. We need to think about the importance of those supply chains to our economy and ensure that we encourage investment across Europe and between nation states where appropriate. The critical issue is to move the terms of debate away from the questions of treaties and so on and towards what we actually want the EU to do and how we express this country’s objectives for the EU. The electorate are much more impressed if we talk about economic growth, because that is one of their priorities, as it is ours. It is also a question of labour mobility, because when people are thinking about moving jobs they appreciate a flexible labour market, and one of the things the European Council should focus on in the coming days is labour mobility and youth employment. I note that that is on the agenda, and rightly so, and think that the electorate and the House will welcome it when the results are announced.
Mrs Anne Main (St Albans) (Con)
Thank you, Mr Deputy Speaker, for allowing me to speak in the debate. I have to leave at 3.30 pm, as I have advised you, but I have been here for the entire debate. I am pleased to follow my hon. Friend the Member for Stroud (Neil Carmichael) but must say that I disagree with just about every word that he said. I congratulate my hon. Friend the Member for Stone (Mr Cash) on securing the debate, but as my hon. Friend the Member for Stroud observed, we have had only a day’s notice of it. That was because my hon. Friend the Member for Stone was so fleet-footed and secured it through Standing Order No. 24. Should we not have had that emergency measure, we would have had no discussion whatsoever.
My hon. Friend the Member for Stroud said that we had not had enough time to contemplate the matter, but we should contemplate the impact of this form of legislation even if we do not get debates on it. My hon. Friend the Member for Stone and my hon. Friend the Member for Hertsmere (Mr Clappison), who is not here at the moment, have spent many long years studying the implications of what goes on in Europe for our economy and our legislature. It is extremely important that we do so. This is not about navel gazing.
I was somewhat disappointed in my hon. Friend the Member for South Swindon (Mr Buckland), who seemed to feel that by studying the matter we are somehow being disloyal. It is not disloyalty. We are doing just service to our constituents, because although there may be the political will or ambition in Europe, the impact will be very much on us as a democratically elected Parliament. I, like many other colleagues, have been extremely disappointed by the mission creep throughout Europe, which has in effect led to imposition on a democratic country—such as Greece—by people who were never elected by that country but who now make decisions about it.
Mr Buckland
I am grateful to my hon. Friend for allowing me to correct a misapprehension. I apologise if I created the impression to which she refers, because it was not my intention at all. I think that we are all patriots in this House—we should be—and that although we may agree on the ends, we may differ on the means by which we achieve them. I should not for a moment question my hon. Friend’s integrity or her sincere devotion to her country.
Mrs Main
I thank my hon. Friend for that intervention, and I end this part of the debate on that conciliatory note.
I have sincere concerns, however, that the mission creep that I mentioned in an intervention has led us to the point at which a democratic country can have something imposed upon it, leading to riots and civil unrest, because it is not willing to take the necessary pain that the EU must inflict on it. Although we are not today debating whether Greece should leave the EU, we all should heed the warning that when Greece signed up to being a full member of the EU it did not sign up to have something imposed upon it, as it has had.
Mrs Main
No; the hon. Gentleman has made many speeches and many interventions, and I am sure that as the lone representative of the Liberal Democrats today he has had more than his fair share of the debate. I shall not take interventions from him.
I am extremely concerned that we will find ourselves dancing on the head of the same pin as we did in the previous Parliament. The hon. Gentleman was a Member then, so he will remember the Liberal Democrats saying, “We need to have a full EU in/out vote on this, and we will give you a genuine vote,” whereas the Conservatives, in opposition at the time, said that we needed to have a vote because there was a treaty. We were assured, “Oh, no, no, it is not a treaty. It is just something we don’t need to have a referendum on.” Such dancing on the head of a pin is what most of us on the more Eurosceptic side of our party find worrying about this particular treaty-that-is-not-a-treaty, into which we supposedly do not need to have any form of input.
Mark Reckless
Does my hon. Friend accept that the difference between our commitment to a referendum on the Lisbon treaty and the Liberal Democrat commitment to an in/out referendum is that theirs is still possible?
Martin Horwood
Will the hon. Lady give way, as she is attacking us directly?
Mrs Main
No, I am not giving way to the hon. Gentleman. I have made my views clear about why I will not. He has had plenty of opportunity.
I am extremely concerned also that the package under discussion could be incorporated into EU law within five years, because this situation is very much like our bleating about the Lisbon treaty, when we kept saying, “It does have a big effect, it does have a big effect,” and we were constantly told that it did not. The treaty under discussion has a potentially big effect, and that is why I offer encouragement to the Minister, which I am sure he has been offered by many hon. Members today, including my hon. Friend the Member for South Swindon (Mr Buckland). The Minister has the huge support of the House and the political will of this Parliament, and the Prime Minister had the support of the majority of the House in using the veto. He had robust support, which I believe he has also among the public, for exercising the veto, but, despite the fact that we are not ultimately part of the process, what we do not want is to become a part of it because of mission creep.
So I say to the Minister, who is going along to discuss those matters, that we could be affected by them, despite the fact that they are not designed to affect us. They are designed to affect those countries that are happily allowing themselves to be influenced in that way, but my fear is that, like all the other treaties that have come our way over the years, including Maastricht, ultimately five years down the line, when this one is incorporated, we will somehow feel its chilling effects.
I felt the need to jump up and down when my hon. Friend the Member for South Swindon said, “What does the EU make us do that we don’t wish to do?” Well, I should like to deport Abu Qatada, but I cannot. I should like not to be fined or pursued in the European Court of Justice for trying to introduce a means of not allowing people who have never paid into our benefits pot to claim—a habitual residence test—which was overturned on the ground that we were somehow being discriminatory. Those are just two examples of our regularly being made to feel that we must do something, and, what is more, the European courts now have a punitive nature, whereby they routinely fine countries that are non-compliant and say, “If you don’t do so we will place people in your country to deliver whatever we want delivered.”
The European courts are intent on getting their own way, and they have found a new method of getting around the rather difficult matter of our veto. They have decided to ignore us, inasmuch as they have said, “This agreement isn’t to do with you,” but ultimately it will be because we will feel its effects. So I encourage the Minister to go along to the discussions with a truly sceptical mind, based on his long and distinguished career in the House, during which time he has seen these arguments made again and again, and seen how in reality the situation has translated into something very different further down the line.
Stephen Phillips (Sleaford and North Hykeham) (Con)
I rise not to detain the House, as I know that the Minister will shortly be on his feet, subject to other contributions, but because it seems to me, having listened to the majority of speeches in the debate, that the issue under discussion is extraordinarily important—so important, in fact, that I am disappointed not to see more Members on the Opposition Benches.
Be that as it may, and given that the Minister will, on behalf of the Government, shortly respond to the debate, I think it important that he give a direct response to three points that I have listened to during our proceedings. First, there is the point, which my hon. Friend the Member for Wellingborough (Mr Bone) made so ably, about the procedure by which the matter has come before the House. We are fortunate indeed that Mr Speaker yesterday acceded to the request from my hon. Friend the Member for Stone (Mr Cash), whom I too congratulate on securing this debate under Standing Order No. 24. It is perfectly right that he should have sought that liberty and, therefore, that we debate the matter today.
But for the fleet-footedness, as another hon. Member described it, of my hon. Friend, there would have been no opportunity for the House to discuss the matter before the end of the week, when the treaty will be signed by those who choose to do so. Given its provisions, to which I shall turn in due course, that would have been a matter of very grave concern not just to those of us on the European Scrutiny Committee, who look at such matters with great interest and, I hope, care, but to the whole House, albeit that it would have been in ignorance of some points that have been made about the importance of precisely what is going on.
It is a great shame in those circumstances that Government time was not scheduled in advance of the end of this week for the debate to take place. Although I know that it is not directly my right hon. Friend the Minister’s responsibility, I have no doubt that he, who will answer for the Government, has discussed the matter with the Leader of the House, and it is perfectly appropriate that the House be told why no debate was scheduled in Government time. That is the first point that he must answer.
The second point concerns the legality of using the European Union’s institutions in the context of the treaty to which those 25 countries will become signatories. We know, because the Prime Minister has told us, that the Government have their own concerns about whether it is appropriate that EU institutions be used outside the framework of the treaties that already exist for the governance of the European Union.
I understand and accept—the Government are entirely right—that there must be a degree of pragmatism in relation to the aims of the treaty, which we hope will succeed in stabilising the euro, although many Government Members, many Opposition Members, I suspect, and, indeed, many people in the country are concerned that it is just yet another piece of paper, and that all we are doing is putting off the evil day when the euro finally unravels and countries such as Greece, Portugal, Cyprus and perhaps even Italy have to drop out.
Let us assume in favour of those who have put the treaty together and framed its provisions and that it stands some chance of making things better in the eurozone. As my hon. Friend the Member for Stroud (Neil Carmichael) indicated, that is important to all our constituents, because we all want to be able to trade with a successful eurozone. Let us therefore make that assumption in favour of the treaty and those who have framed it.
Even in those circumstances, there still exists the problem of the legality of the use of the institutions of the European Union. I hope that my right hon. Friend the Minister will make it absolutely clear to the House, and through the House to the British public and our partners in Europe, that the Government will not countenance anything that not only damages this country and its interests but is unlawful under the treaties to which we have already subscribed. That is the second point with which he must deal.
The third point is the most important. The treaty is potentially the thin end of a very large wedge. Other Members have alluded to the fact that when the European Union and the faceless bureaucrats in Brussels do not get their own way, they simply look for a solution that is not necessarily lawful but is at least pragmatic, to ensure that what happens is precisely what they want, rather than what the people of Europe want. That has been the hallmark of European governance since the EU was established, and certainly since the Maastricht treaty. We see it very clearly in this case.
My right hon. Friend the Prime Minister was absolutely right to veto the suggestion of any further European treaty that would have damaged the interests of this country and the City of London. When Opposition Front Benchers ask, “What was vetoed?”, as they did earlier in the debate, I say that it is very clear. It was a further European Union treaty that this House does not want and that, more importantly, the people of this country do not want. It would have been damaging to the interests of Britain and all our constituents. It would have been extraordinarily straightforward for the Leader of the Opposition to stand behind the Prime Minister, but he chose not to do so. Perhaps he is fearful of Europe, and perhaps the fact that none of his Back Benchers and almost nobody from the Labour party is here for the debate indicates that Labour is perfectly willing to see imposed upon the British people the same sort of treaty that it gave us in Lisbon without a referendum, having promised one in the first place.
Emma Reynolds
Can the hon. and learned Gentleman explain to the House what in the fiscal compact treaty would have applied to the UK, and therefore why the Prime Minister felt the need to veto it?
Stephen Phillips
If the hon. Lady had actually read the fiscal compact treaty, and if she had been here when my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) made his speech—I do not think she was—she would know that article 8 of the treaty provided for penalties in relation to countries that are not eurozone members. She would also know that article 16 required the treaty to be rolled into the treaty on the functioning of the European Union within the next five years. That is the thin end of a wedge and indicates clearly to me and other members of the European Scrutiny Committee that in the current case it is possibly being contemplated that the provisions of the treaty will in due course become binding on the United Kingdom, notwithstanding the fact that the UK is not a member of the eurozone. That is the direct answer to her question.
When the Leader of the Opposition says that he would have negotiated further on the treaty, Conservative Members are entitled to ask with whom he would have negotiated. The negotiations had come to an end. Is the hon. Lady saying that the Leader of the Opposition would have negotiated with himself? The Opposition need to stop opposing just for the sake of opposition, and instead stand behind the Prime Minister and his veto and behind debates such as this. With that said, I hope that the—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order.
I have three speakers still to call, and we have 10 minutes before the wind-ups.
Mr Christopher Chope (Christchurch) (Con)
It is a pleasure to be able to participate briefly in this very important debate and to follow my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips). I congratulate and thank him, the Chairman of the European Scrutiny Committee and all its other members for putting the spotlight on this important issue.
My hon. and learned Friend said that the UK Government must make it clear that they will not countenance anything unlawful. The question is whether anything in the treaty is unlawful, and that is where the rule of law comes in. My understanding is that one of the most important elements of the rule of law is that the law should be clear and easily understood; otherwise, it is very difficult for people to know whether they are complying with it. Over the years, ambiguity has been the hallmark of the laws that the EU and the European Court of Justice have gradually developed, which have been against this country’s best interests.
What is in the treaty is very unclear, as my noble Friend Lord Howell, the Foreign Office Minister, made apparent when he said in the other place:
“There has been much comment about the use of the European Union institutions, and I want to come to that. The new agreement sets out limited roles…The legal implications are complicated and hinge upon how the agreement is implemented. It is for this reason that we have reserved our position.”—[Official Report, House of Lords, 16 February 2012; Vol. 735, c. 936.]
As my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) asked, what is the point in reserving our position? If we remain silent, it could be interpreted as an estoppel or a consent to what is going on.
Why are not the Government asking the European Court of Justice to interpret the treaty now? The ECJ will have a role in interpreting the arrangements for the European Union’s accession to the European convention on human rights. If it can do that, why cannot it examine the treaty? We would then know exactly what it thought about the legality or otherwise of the treaty. If we wait for it to interpret the treaty, we will find that it does so in a purposive manner, in accordance with the principle that it is right and proper for the EU to have more and more power. Why do we not get a proper and authoritative interpretation of the treaty now, before we proceed?
If one needed any ammunition to support the principle that the treaty is ambiguous, one would need look no further than the opinion of the Council of Ministers. Four questions are asked in it and the answers are set out, and they confirm that it is incredibly ambiguous.
Richard Drax (South Dorset) (Con)
I pay tribute to my hon. Friend the Member for Stone (Mr Cash) for securing the debate. He stands up for everything in which I and a lot of Members on both sides of the House believe.
I simply do not understand why we all look at this huge abyss, this black hole, this legal and financial federalist nightmare, yet go on pouring billions of euros into it in the hope that it will somehow recover. It will not. The political elite in the entire eurozone are betraying the very people they say they represent.
We are going to have tears over this. We have, unfortunately, already had riots in Greece: God forbid that we have riots in this country one day when the people wake up to realise that we have been, dare I say it, disingenuous—I will not say untruthful because I am not allowed to use that word in this House—to our electorate. We have to be truthful, and we have to base our politics on common sense and the law. I want us to have jobs, growth, wealth and mobility, but we will not get them under the current EU federalist state. We must renegotiate and start talking. I urge those on the Front Bench, please, for our party and our country, to say at the meeting, “Enough is enough: let’s sit down and find a more common-sense approach for the future.”
Laura Sandys (South Thanet) (Con)
I am sorry that my hon. Friend the Member for South Dorset (Richard Drax) is going to be crying over the treaty. His constituents will be worried about this, as we all are, but it is not only about the treaty, because that is merely the result of a major crisis. In debates in this House, we often express concern, in many respects, about many countries, whether they be Somalia, India, or the economies of the far east. Those economies impact on this country. It is crucial that whatever emerges from the way in which the EU implements the treaty serves our national interest by ensuring our greater economic security.
I share Members’ fears about whether the treaty will deliver the right result. Over the past 18 months, we have watched the economic meltdown across Europe being met with inactivity and summit after summit, as Ministers from all over Europe have come together but there has been no endgame, no result, and no agreement. This comes extremely late in the game. That means that whatever is done will cost Europe—the eurozone—a lot more money than if the situation had been addressed 18 months ago. This is not a day when Europe is shining in its glory. This has come too late, in a crisis, and as a result Europe has cost itself more money.
It is not in our interests to be part of the treaty, but it must be in our interests to support Europe in sorting out its own economic situation. I worry whether it will be successful, but very much hope that it will be. I know, however, that we are in a better position than we were before the Prime Minister went off to Brussels to veto the treaty. The veto is in place protecting the UK from the treaty, and we are giving our support in ensuring that the European economies get their act together.
The Minister for Europe (Mr David Lidington)
I thank my hon. Friend the Member for Stone (Mr Cash) and all hon. Members who have taken part in the debate. I am conscious that in the limited time available I am unlikely to be able to do justice to all the various and detailed questions that have been asked. As my hon. Friend said, I gave evidence on this subject to the European Scrutiny Committee for nearly two hours last Thursday. I am not sure whether the transcript is yet available on the Committee’s website, but if Members wish to explore these matters further, I refer them to the detailed answers that I attempted to give to my hon. Friend and other members of the Committee.
I take very seriously the comments made by a large number of hon. Members about the importance of scrutiny. I completely agree with those who have said that while the European Scrutiny Committee does an excellent job within its prescribed terms of reference, which are confined to looking at documents as they come from the EU institutions, there is a powerful case for what one might term more upstream engagement by Parliament in examining the strategic direction of European policy before it takes the form of specific items of European legislation. Some, at least, of the Chairs of the departmental Select Committees are interested in pursuing that further, and I very much hope that they will feel encouraged to do so.
In response to my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) and others who asked about having debates before European Councils, I can only repeat what has been said before from this Dispatch Box: it was an explicit part of Tony Wright’s report, which led to the creation of the Backbench Business Committee, that such debates should be among those for which responsibility was transferred from the Government to the Backbench Business Committee, to be dealt with in the time that was allocated to that Committee.
Mr Lidington
I will not give way, but I take seriously the point that my hon. Friend the Member for Wellingborough (Mr Bone) made about the Backbench Business Committee wanting to have predictable times at which it can schedule such debates. The Leader of the House was listening carefully when he made his remarks and, I am sure, will be attentive to that particular point. I draw my hon. Friend’s attention to the fact that a review of the procedures suggested by the Wright Committee is due in the near future.
I did not agree with my hon. Friend the Member for Stone when he laid strictures on individual EU countries. Greece and Italy may do things differently from how politics is done here, but everything that has happened in those countries so far has been within the bounds of their constitutions. The legislation that the Governments of those countries take through has to be enacted by the democratically elected Parliaments.
My hon. Friend the Member for Stone was right to point to what I believe to be a genuine, underlying tension in European affairs at the moment between two important pressures. The first is the economic logic, which prescribes that if we had a single currency, interest rate and monetary policy, logically we would have to move towards greater fiscal integration. That, after all, is one reason why I and most members of my party opposed the United Kingdom entering the euro. We felt that that was the inherent logic of the project. Against that, there is the political challenge, which is whether, if there is to be greater fiscal integration among countries that share a single currency, there is a sufficient sense of common political identity, not just for the Governments of those countries, but for their voters, that they can accept major decisions in economic policy being taken at, and democratic accountability being transferred to, the European institutional level, rather than being based solely at national level.
Mr Baron
My right hon. Friend is well respected in his post. Can he highlight the concrete and substantive guarantees that will exist to prevent the two-tier Europe that is being created through the establishment of the fiscal compact from acting against the best interests of this country?
Mr Lidington
There are two parts to my answer. First, the action that the Prime Minister took in December ensured that what other countries chose freely to do, through sovereign decisions, will not be binding on the UK through European law. Secondly, as a number of my hon. Friends have said, the Government are determined to work actively with other members of the European Union in pursuit of common interests. Although this might not give the assurance that can be given by a rule book, the culture that I see at work in the European Union week by week is one in which countries come to the table with interests and views of their own. Countries do not act as a predictable bloc or cohesive caucus because they happen to belong to the euro. There are eurozone countries lined up with us to support budgetary discipline. Other eurozone countries—largely net recipients—want to see a greater EU budget. There are also euro-outs that are net recipients and that want to see a bigger European budget. The way in which countries line up on particular issues does not follow logically from where they stand in relation to the fiscal compact or from whether they are members of the eurozone.
Mr Lidington
I will not give way again, because I have limited time and there are a lot of points to which I wish to respond.
I will not dwell on what happened in December because I want to get on to what hon. Members asked me this afternoon. However, I draw the House’s attention to the fact that my right hon. Friends the Foreign Secretary and the Chancellor of the Exchequer have now sent detailed accounts of the approach to the December European Council meeting and the events that took place shortly afterwards to my hon. Friends the Members for Croydon South (Richard Ottaway) and for Chichester (Mr Tyrie) in their capacities as Chairs respectively of the Foreign Affairs Committee and the Treasury Committee. Those letters have been copied to my hon. Friend the Member for Stone and are already available on the websites of the Foreign Affairs and Treasury Committees. I am making arrangements for them to be placed in the Library today.
The Prime Minister’s decision in December ensured that the treaty, to which 25 countries subscribed, was “outside” the European Union. As my right hon. Friend told the House in January,
“we are not part of it and it places no obligations on the UK. It does not have the force of EU law for us, nor does it for the EU institutions or for the countries that have signed it”.—[Official Report, 31 January 2012; Vol. 539, c. 678.]
I want to deal with some of the points that my hon. Friends the Members for North East Somerset (Jacob Rees-Mogg) and for Hertsmere (Mr Clappison) made. The treaty does not govern how the European Union shall act. It imposes certain obligations on the contracting states, which are linked to the EU. However, in so far as it refers to EU treaties, it makes it clear that they and their rules have primacy and apply in any circumstance where there might be overlap or apparent contradiction.
My hon. Friend the Member for North East Somerset asked about the prospect of non-eurozone members being fined under the fiscal compact. If a non-eurozone member state has ratified the treaty, until it joins the euro, it can decide which parts of titles III and IV of the compact apply to it. Once that country joins the euro, the whole fiscal compact applies to it. The fiscal compact rule in article 3(2) and the jurisdiction of the Court under article 8 fall within title III, so pending membership of the euro, the non-euro countries can choose whether they wish to be bound by those aspects of the compact. A member state, whether in the euro or not, can be fined only once it has ratified the fiscal compact through its national means.
My hon. Friend also asked about the risk of the treaty somehow being imposed on us in the next five years by underhand means.
Jacob Rees-Mogg
I want to clarify the point that I was trying to make. The treaty might possibly come in through enhanced co-operation, so although it would not formally be imposed on us, it would reach the status of an EU treaty if the current treaty that we are in the process of ratifying is ratified.
Mr Lidington
I do not know whether we will have time to explore that this afternoon. I may write to my hon. Friend setting out the answer in greater detail, but I do not believe that his fears are justified. Treaty change can take place only under the procedures for treaty change in the treaty on European union and the treaty on the functioning of the European Union. It cannot take place under enhanced co-operation, which can, in any case, bind only those countries that choose to participate in it. That is clear in the treaties.
The role given to the European Court in the compact in relation to the balanced budget rule—and, indeed, the imposition of that rule—could not be introduced under enhanced co-operation. Although the compact declares that it has the objective of being incorporated in the EU treaties in five years, that is only an aspiration, not a given. Any changes to the EU treaties would have to be agreed by all 27 member states, using the procedures under the EU treaties themselves for treaty amendment. Change cannot be made through the EFSM treaty, which is to be signed intergovernmentally by the eurozone members only.
Mr Lidington
Forgive me, but I will not because I want to press on and try to answer more of the questions asked during the debate.
It is a fact that the compact says that it is a treaty that shall be applied in conformity with the obligations set out in the EU treaties. The declared intent of the signatories is that they shall act at all times in accordance with EU law.
It is a matter of legal fact that the primacy of EU law laid down in the EU treaties is not and cannot be affected by the drafting of an intergovernmental treaty. Article 2 of the compact explicitly states that if there is any conflict or overlap, the EU treaties will prevail. In any case, even if that phrase were absent from article 2, it would be against EU law for EU member states to enter into any kind of international agreement that contradicts the EU treaties and EU law.
However, it is also true that elements of the fiscal compact give us serious concern. Our concerns relate to certain tasks accorded to the European Commission and the European Court of Justice. I set out our concerns in greater detail in my evidence to the European Scrutiny Committee last Thursday. In fairness, it is worth alluding to the fact that others who gave evidence to the Committee—I am thinking of Professor Dougan, of Martin Howe, who is by no means a euro-enthusiast, and of the Council Legal Service written evidence to the Committee—presented a different interpretation and argued that article 273 of the EU treaties could be interpreted as justifying what was set out on the use of the institutions under the fiscal compact.
The concern of the British Government is that the example set under the compact for the EU institutions, the role and functions of which are determined by treaties agreed by all 27 member states, could be used in future either to set unwelcome precedents or to impinge on the integrity of EU law and the arrangements set out in the EU treaties. That is why we have reserved our legal position. That in turn means that we are vigilant and ready to act, including by taking legal action in the European Court of Justice, if we believe that the EU institutions are being used in a way that is contrary to the provisions of the EU treaties and that harms our national interest.
The Prime Minister made clear at the informal January European Council that the EU institutions can be used outside the EU treaties only with the consent of all member states. He also said that the treaty should not undermine the operation of the single market or otherwise infringe on areas of policy that are properly for discussion by all member states in the EU context. That position was repeated in writing by Sir Jon Cunliffe, our permanent representative to the EU, on 22 February. I deposited that letter in the Library of the House on the same day.
The actions the Government have taken in respect of the compact have been informed by advice from across Government. I will not be drawn into a detailed discussion of what the Government’s legal analysis says, not least because reserving our position means that we might at some stage wish to go down the path of legal action. I do not want to say anything that might prejudice or reveal a position that we might take in court in such circumstances.
I am sure most hon. Members realise how foolish it would be to speak in such a fashion, but I am confident that reserving our position is the best way of protecting UK interests. It enables our partners to undertake economic and political tasks that we hope will help to stabilise the eurozone while preserving our right to take legal action should that become necessary.
The problem all our economies face in Europe is a lack of growth. That growth will not come from increased Government spending, nor will it come from consumer spending funded by increased private indebtedness; it can come only from structural reform and a growth in trade, both within Europe and beyond. My right hon. Friend the Member for Wokingham (Mr Redwood), and my hon. Friends the Members for South Swindon (Mr Buckland), for Cheltenham (Martin Horwood) and for Stroud (Neil Carmichael), spoke strongly in the interests of their constituents when they urged the Government to press forward with an innovative and assertive agenda for economic reform and growth in Europe. We are working with our partners to do that, as was evidenced by the letter to which the Prime Minister added his signature to those of 11 other Heads of Government, and for which Bulgaria, Slovenia, Portugal and Lithuania have voiced support. The Government intend to be active in promoting our economic interests in Europe and the wider world, and I commend our approach to the House.
Mr Cash
Undue delay in reserving our position on the necessity of getting concrete guarantees and an answer to the question of whether we will go to the European Court of Justice over this matter is no substitute for action. We must take action now because the advice from the legal adviser states:
“within five years…when this happens”.
His assumption is that this will happen within five years. We must take action now. We cannot allow delay to trump the necessity of getting this right. It is essential that we move, and move now. I shall speak to the Prime Minister about this shortly. I seriously hope that the Attorney-General will take the necessary action and advise accordingly so that the Cabinet is fully apprised of the fact that this is not a lawful treaty.
The Leader of the House of Commons (Sir George Young)
On a point of order, Mr Deputy Speaker. Owing to the debate under Standing Order 24 that has just ended, the time available for the debate on the Water Industry (Financial Assistance) Bill has been reduced. It is therefore the Government’s intention, if necessary, to make more time available to complete the debate that is about to commence at a later date. I will give more details in the business statement tomorrow.
Mr Deputy Speaker (Mr Nigel Evans)
I am grateful to the Leader of the House for that clarification.
Water Industry (Financial Assistance) Bill
(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)
I beg to move, That the Bill be now read a Second time.
In December, the Government published “Water for Life”. The White Paper set out many of the challenges facing the water sector. These challenges are not just about how much water we have available now and in the future; they range from the environmental impact of water management to the means by which we deal with waste water and, not least, the issue of affordability.
There have been dramatic improvements in the health of many of our rivers, but more needs to be done. The House will recall that the Government have invested £92 million to improve our rivers and waterways. Despite that, however, over-abstraction and pollution of our rivers, lakes and streams means that only a quarter of our water bodies are fully functioning ecosystems. The water and sewerage sectors have, though, made significant progress. More than £90 billion has been invested in the 22 years since privatisation to reduce the water industry’s impact on the natural environment and to continue to deliver high-quality drinking water while keeping water bills generally affordable.
It is also worth noting that last year, despite the driest spring on record, there were no hosepipe bans, which was testament to the 36% reduction in leakage achieved by the industry since privatisation.
Mr Tobias Ellwood (Bournemouth East) (Con)
I do not want my right hon. Friend to digress too far from her speech. She mentioned hosepipe bans last year, but there are likely to be bans this summer owing to the lack of rainfall now. Has any thought been given to the long term and to providing a national grid for water so that we can share the water supply up and down the country?
Mrs Spelman
Thought has been given to that. We had a drought summit last week, and I have said publicly that hosepipe bans are more likely this year because we have had our second dry winter. The important point, however, is local connectivity. That is the key. Water companies explained to us at the summit how they are connecting to their neighbours. It is important for the House to know that transporting water over a significant distance is prohibitively expensive. The idea of building a pipeline to transport water from the north-west, which pleasantly has it in abundance, to the south-east, which traditionally does not, might sound attractive, but it is prohibitively expensive. However, local connectivity produces, in essence, a virtual national grid.
Today, our reward for all that investment is world-class drinking water and a cleaner environment. Water supplies are also safer, better and more secure than ever before. Water and sewerage services also remain relatively inexpensive compared with other household bills, and are good value for money. The average bill stands at just over £1 a day. At the same time, water companies are investing £22 billion over the current five-year price round in mains replacement, flood resilience, river improvements and better water quality in 55 wetlands and bathing areas.
However, a minority of customers struggle to pay their water charges, either because they are on low incomes or because they live in areas where bills are higher than average. In fact, 23% of household customers across England and Wales spend more than 3% of their disposable income on water and sewerage charges. We now want to start tackling that problem. The Water Industry (Financial Assistance) Bill will allow us to provide support to keep bills down in the south-west and to reduce the risk of future infrastructure developments, such as the Thames tunnel super-sewer, raising bills disproportionately. Clause 1 creates a general power to enable the Government to make a payment to water companies for the purpose of reducing charges payable by customers. The only circumstances under which we currently envisage using that general power is in support of South West Water customers. We believe that the circumstances they face are exceptional.
Anna Walker’s review of charging for household water and sewerage services, which was commissioned under the previous Government, identified why households in the south-west face the highest water bills in the country. At privatisation, South West Water had the lowest regulatory asset base per property. Since then, the company has had to invest around £2 billion to raise the standard of its infrastructure to the same level as the rest of the country. With comparatively fewer customers, the cost of new investment per property has been higher there than anywhere else. The benefits of that investment include improved water quality, reduced leakage, cleaner beaches and better bathing water quality, as enjoyed by the south-west’s many visitors. However, the costs have been borne solely by South West Water customers, whose bills have risen as a result. I would like to pay tribute today to hon. Members past and present in all parts of the House who have devoted years to raising the profile of this historic unfairness on behalf of their constituents.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Does the Secretary of State accept that average water bills across the country are set to rise by almost 6% in April and that this Bill will do nothing to help the vast majority of people, who have seen their incomes cut or frozen? Why should water companies not have to tighten their belts like everybody else?
Mrs Spelman
I can give the hon. Gentleman the assurance that water companies are indeed tightening their belts like everybody else. The rise that he described is the one set out by the economic regulator Ofwat, as an indicator of the overall level of inflation, which has not a little to do with the economic mess that we inherited from the previous Administration. However, the important point for the hon. Gentleman is this. He and I share the use of Severn Trent Water’s services, and companies such as ours will be able to introduce a company social tariff, which would assist the most vulnerable in the water area where we reside. Indeed, it would be open to every company to do so, and we have published a consultation about the company social tariff.
Andrew George (St Ives) (LD)
Let me congratulate my right hon. Friend on bringing forward this measure and remind her of the cross-party nature of the origins of the Bill and the fact that we have been working towards it across all parties for many years, including under the previous Administration, and not only following the Anna Walker review, as there has clearly been every intention of addressing what has been a clear historic unfairness for South West Water customers.
Mrs Spelman
My hon. Friend is quite right. Indeed, I look across the Chamber to the right hon. Member for Exeter (Mr Bradshaw) as a demonstration of the cross-party consensus that existed, which I have acknowledged. The diligence with which south-west constituency Members raised awareness of this historic unfairness is the reason our Government have sought, finally, to do something about it and stop turning a deaf ear to families struggling with that historic legacy, which is what had happened for too long.
There are limits to the help that we can give, because of the vast economic deficit that we inherited. However, we believe that the Government should help to correct the historic inequity that has left water bills in the south-west so markedly out of kilter with those elsewhere in the country. We have therefore committed to funding South West Water to enable it to cut bills by £50 a year for all household customers. The payments will start in April next year and will be maintained to the end of the next spending review period. The £50 reduction will be transparent on customers’ bills and, contrary to the impression that might have been gained, will not provide any sort of benefit to South West Water. It will simply be passported straight through to the householder, who will receive that money in full.
We take pride in helping hard-pressed families in the south-west, but we recognise that the challenge of helping vulnerable customers with water affordability problems is a different and more general problem that can be felt in households anywhere in the country, as the hon. Member for Birmingham, Selly Oak (Steve McCabe) suggested. As constituency MPs, we all know the families that we are talking about. That is why our water White Paper has set out definitively the dual approach that we are taking to tackling affordability issues. First, we are taking measures now to enable water companies to introduce social tariffs and to tackle bad debt. Secondly, over the longer term, we are introducing a package of reforms to increase competition and innovation in the industry that will help to keep bills down and improve customer service.
We consulted recently on how water companies could design social tariffs to reduce the bills of those who would otherwise struggle to pay in full. We will publish final guidance in the spring to enable companies to bring forward social tariffs in their charging schemes from 2013. Water companies’ responses to the consultation have shown their commitment to addressing customers’ affordability problems. Many already have schemes in place, such as trust funds, matched payment schemes, referrals to benefits advice and some existing social tariffs, but we have to be realistic in acknowledging that bad debt is also a serious problem in the water industry.
Bad debt adds an average of £15 to all paying customers’ bills, and this Government are taking action to address that. We are consulting on measures to reduce bad debt, and we are considering two options. The first is a regulatory measure that would make landlords liable for the water charges for their tenants’ properties if they failed to supply details of those tenants to the water company. However, we are mindful that the measure has to be proportionate and easily administered, so we are also consulting on whether we should ask landlords to share their tenants’ details with water companies voluntarily.
Alison Seabeck (Plymouth, Moor View) (Lab)
Will the proposals that the Secretary of State has just mentioned be similar to the present regulations involving landlords and energy companies, or might they be somewhat different?
Mrs Spelman
Electricity utility bills are the domain of the Department of Energy and Climate Change, rather than the Department for Environment, Food and Rural Affairs. We are seeking to ensure that people who use water pay for it; it is a question of fairness. Water has historically been treated somewhat differently from other utilities such as electricity and gas, so there might be some differences in the details of the proposals. The hon. Lady will have an opportunity to raise that point as part of the consultation.
This Government are going to get a grip of the issue of bad debt, which is forcing up bills for those who do the right thing and settle their bills on time. We are on the side of those who play by the rules and pay their bills in good faith and, unlike the previous Government, we are going to ensure that their interests are properly served by clamping down on those who do not, or will not, pay their bills.
Despite the considerable progress that has been made on cleaning up our water environment, challenges still remain, not least in the river that ebbs and flows outside these very walls. The House has previously debated the fact that London’s sewerage system is operating close to capacity. We are now at a stage at which waste water containing untreated sewage overflows into the Thames between 50 and 60 times a year, involving an average total of 39 million cubic metres a year. The sewage discharges kill fish and leave litter and debris floating in the water. Because of the tidal ebbs and flows, that debris can take up to three months to reach the mouth of the river, and frankly, it stinks—just ask David Walliams. Hon. Members will recall his Sport Relief challenge last spring to swim 140 miles along the length of the Thames here to Westminster. His challenge should have been the distance, the strong currents and the undertows, not the quality of the water he swam in—water that was bad enough following heavy rain to place his entire endeavour in jeopardy.
We might not quite face the “Great Stink” of 1858, when the stench of sewage led to this House’s curtains being soaked in chloride of lime in an attempt to disguise the overpowering smell and, ultimately, to Parliament being suspended, but the sewer outflows will only get worse with population growth, increased urbanisation and more extreme rainfall events caused by climate change. This, as I am sure all Members will agree, is unacceptable.
We are the world’s seventh largest economy; this is our capital city; this city is a shop window for our entire country—and the status quo is simply not good enough. This Government are going to put the “Great” back in “Great Britain”—a Government who are showing that Britain is open for business and competing globally. That is why we need a 21st century solution, not a 19th century one that would still rely on allowing the Thames to function as a sewer.
Mr Andrew Love (Edmonton) (Lab/Co-op)
Over 1 million customers of Thames Water are in what is termed water poverty. The Thames tunnel, which I support, is estimated to cost something in the region of £4.2 billion, putting £1 a week on the bills of Thames customers. What are the Government going to do to ensure that more people will not fall into water poverty as a result?
Mrs Spelman
Naturally, Thames Water will be one of the water companies looking at a company social tariff. That provides a means, as with Severn Trent Water and every other water company, of really helping the most vulnerable customers. It is important, too, to put in context what Thames Water customers, probably including some hon. Members, pay now. Unlike South West Water, Thames Water currently has significantly below average water bills. The average combined water and sewerage bill is £356 a year. South West Water ratepayers pay £517 a year, whereas Thames Water’s ratepayers have a combined bill of £319 a year. We are starting with Thames Water’s ratepayers who have a significantly below average bill.
Mrs Spelman
Let me make a little progress, if I may.
We need a solution that prevents sewage from entering the Thames in the first place. Today, the proposed Thames tunnel offers the most timely, comprehensive and cost-effective solution to the combined sewer outflow problems. We are very aware, though, of the impact its construction would have on local communities. Thames Water has just finished its second public consultation on its proposals, and will consider the responses it has received. It plans to publish its response in the latter half of May. Thames Water will continue to work hard with those potentially affected to minimise the impact where practicable.
We recognise that the large and complex Thames tunnel project comes at a cost, which will impact on Thames Water sewerage bills, but we are confident that the bills would still remain below the current national average and below the average bills of Southern, Anglian, Wessex and Severn Trent Water customers—and well below those of South West Water customers.
Mr Slaughter
Does the Secretary of State agree that
“the cost of the tunnel is too large to justify the environmental benefits”,
and that the
“Projected costs ... outweigh the advantages of a cleaner river”?
Mrs Spelman
Is the hon. Gentleman saying that his party is not in favour of trying to clean up the sewage out of the Thames? He will know that the initial study on the Thames tideway was launched when his party was in power—in 2001—and that a significant amount of time was spent looking at alternatives and carefully assessing with the greatest rigour what the costs of such a complex project might be. Just to put this in context, the proposed cost for the Thames tunnel is comparable to the amount having to be spent in Paris to do almost exactly the same thing, and on what the German Government are having to do to deal with an outdated system on the Rhine-Ruhr. So I do not accept his argument that the expenditure on cleaning the sewage out of the Thames is not justified.
The objective of our approach is to help relieve the extent to which households in London are being asked to contribute. As I said in my written ministerial statement on 3 November 2011, the Government believe that the private sector can and should finance this project, but we accept that there are some risks that are not likely to be borne by the private sector at an acceptable cost. We are willing, in principle, to provide contingent financial support for exceptional project risks where this offers best value for money for Thames Water’s customers and taxpayers. However, I will want to be assured that, when we offer this contingent support, taxpayers’ interests remain a top priority. We are working with Ofwat, Infrastructure UK and Thames Water to ensure that the financial structure for the proposed Thames tunnel includes safeguards, so that the likelihood of Government support being called on is minimal.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I do not oppose the Bill at all, but may I just alert my right hon. Friend to something? Leaving aside the arguments about whether there should be a full tunnel or another solution, which I hope to address if I am called to speak, there are concerns about the Government giving money to a company such as Thames Water. It is not a very transparent organisation, being a private equity-funded company that has 10 layers of corporate structure, including in tax havens in some parts of the world. The Government should attach tough conditions to support for any water company if this is to be seen as transparent and good value for money.
Mrs Spelman
I share the right hon. Gentleman’s concern that there should be rigour in this exercise, and I have just talked about the safeguards we are seeking. I can also assure him that we have been advised by Ernst and Young that the projected cost of this project does represent value for money, but the rigour will continue to be maintained throughout the elaboration of the project.
Mrs Spelman
I wish to make a little more progress.
We believe that simply having this power available will help us to maximise private sector investment in the tunnel and keep the cost of financing down. The Bill in 1858 that provided the money to construct a new sewer scheme for London, and to build the Embankment in order to improve the flow of water and of traffic, was rushed through Parliament and became law in a mere 18 days. Although we do not anticipate such swift progress, we need to ensure that assistance is provided promptly to South West Water customers and, similarly, that Londoners can be assured that the power to provide contingent financial support is in place while we work with Thames Water and other stakeholders to plan for the financing and structuring of the tunnel.
Mrs Spelman
I have already taken one intervention from the hon. Gentleman.
As the Bill contains just two simple spending powers to implement intentions that the Chancellor set out in the autumn statement, our intention is that the Speaker be able to certify it as a money Bill. I am, however, mindful of the limitations that would place on discussions in the other place and of the desire to debate the need for the Thames tunnel, in particular. The need for the proposed Thames tunnel will no doubt be discussed in detail if, as I expect, the waste water national policy statement is debated before the end of March. We will also shortly be laying a draft order before Parliament to amend section 14 of the Planning Act 2008. This section 14 order would enable a major sewer such as the Thames tunnel to be included as a nationally significant infrastructure project, and we look forward to hearing any concerns that hon. Members may have.
Miss Anne McIntosh (Thirsk and Malton) (Con)
My right hon. Friend will be aware that the Select Committee undertook some work on the waste water policy statement, largely addressing the whole issue of the Thames tunnel. I am mildly surprised that we did not use that opportunity, either during the Committee’s work or the Government’s response to it, to discuss this particular planning point.
Mrs Spelman
I thank my hon. Friend for that question. As I just said, there were 21 working days for the national waste water policy to be debated from the moment it was laid before Parliament on 9 February. There is still time and I am sure that hon. Members will take advantage of that.
Finally, those looking forward to seeing the other legislative reforms proposed in the White Paper should rest assured we are firmly committed to our programme of market reform for the water and sewerage sector.
Frank Dobson (Holborn and St Pancras) (Lab)
Will the right hon. Lady give way?
Mrs Spelman
I am just summing up.
It is right, however, that the House should get the chance to scrutinise our proposals in detail and, to that end, we will publish a draft water Bill in the coming months. I commend this Bill to the House.
Mary Creagh (Wakefield) (Lab)
The Bill is welcome, if a little unexpected. It is welcome because it provides assistance to the people hit hardest by the botched Tory privatisation of the water industry, which created a water company in the south-west with too few people to pay for the £2 billion investment needed to create the south-west’s sewerage system over the following 20 years, with just 3% of the population clearing up 30% of the nation’s coastline. It left them with the highest unmetered water bills of any region and the Bill seeks to provide some relief, a fact that we welcome.
Miss McIntosh
I am delighted that the hon. Lady had the opportunity to visit my constituency and I look forward to hearing from her how that went. Does she not appreciate the fact that, as the Secretary of State has just mentioned, £90 billion has been invested since privatisation that probably would not otherwise have been invested? There was also a debate among the hon. Lady’s hon. Friends in the past about privatising the railways, but there is general agreement in the country that water privatisation has been a success bar the unfortunate circumstances that pertain in the south-west in the context of its having the longest coastline and the application of the EU bathing directive in that regard.
Mary Creagh
I am happy to report that the pigs I met in the farmer’s field in the hon. Lady’s constituency were extremely well. There was a very strong smell of bacon coming off them, even while they were alive, which was very nice, and I was very happy to see them.
On privatisation, we accept the consensus that privatisation is here to stay and that it has delivered the investment in the infrastructure at no direct cost to the taxpayer. It is clear that that cost has been paid indirectly by customers through their bills, however, with particular damage to customers in the south-west. That is why the Bill is with us today.
Stephen Gilbert (St Austell and Newquay) (LD)
This seems to be a particularly smelly debate. Can the hon. Lady explain why over 13 years, despite recognising the problems of privatisation in Cornwall and the south-west, Labour did nothing to help address the concerns that the Bill addresses?
Mary Creagh
I have in my hand a graph from Ofwat’s website about the annual average bill. The hon. Gentleman will see—I am not sure whether he can see this far, but I would be happy to pass it on to him—that when we passed the relevant water legislation in 2000 water bills dropped from an average of £325 a year to £285 a year. During that water review period, water bills were much lower. We took action across the country and that will also have affected the hon. Gentleman’s constituents in the south-west. He is also ignoring the fact that we asked Anna Walker to consider the issue of affordability. We have had the Walker report and only one aspect of its many recommendations is being debated today. The rest are being left, I am afraid, on the long finger.
Sheryll Murray (South East Cornwall) (Con)
I paid water bills in the south-west for 13 years under the hon. Lady’s Government and I cannot remember my bills ever being stable or not increasing considerably. I do not know where she has got her figures from—perhaps she is looking at a national figure—but I can assure her that my bills have not reduced.
Mary Creagh
Does the hon. Lady think that the £50 a year for which the Bill provides until the end of the spending review period is adequate compensation for her constituents? It will undoubtedly be eaten up by the next two years-worth of price increases in cash terms.
Neil Parish (Tiverton and Honiton) (Con)
Does the hon. Lady accept that this coalition Government have done more in 13 months than the Labour Government did in 13 years? We have 3% of the population in the south-west and 30% of the beaches, and that is why we have got these extreme costs. This Government have faced up to their responsibilities and delivered real cash to water bill payers, rather than just talking about it like the previous Government.
Mary Creagh
I am disappointed at the hon. Gentleman’s tone, because he is ignoring the fact that we commissioned the Walker report when we were in government. He is also ignoring the action we took, not least to prevent customers from being disconnected. I am sure that many of his constituents were affected in the early days of water privatisation when hundreds of thousands of customers were cut off—disconnected—from their water supply for non-payment of bills. We changed that. We changed the law and effectively instigated a right to water, which we think is a basic human right and is required for basic dignity and decency. I am sure that affected many people in the south-west.
The Bill is welcome because it lays down powers exercised by the Secretary of State to provide finance for the huge infrastructure investment that is needed to clean up the Thames, which has had very little investment since the great sewer drilled by Bazalgette 150 years ago. However, there are a number of questions that the Secretary of State must answer. First, why is the Bill so short? We are in a time of drought not seen in this country since 1976, so why is she focusing on the little picture rather than the big picture? Why was the water White Paper that was due in spring 2011 not published until December 2011? Her colleague the Minister with responsibility for water is now promising a draft water Bill this spring, so can she confirm that there will not be a full water Bill to take forward the other measures in Anna Walker’s report in the Queen’s Speech this May—yes or no?
Mrs Spelman
The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon), will be happy to answer this point in detail, but we do not need new measures to do some of the important things we need to do right now to tackle this drought. I mentioned the drought summit. As we saw last year, flexibility in terms of abstraction licences helped our farmers and we did not need hosepipe bans.
The extra time we took for the water White Paper improved it, putting resilience at its heart, and the climate change risk assessment vindicated that decision. I am sure that hon. Members would like the time to debate, through proper pre-legislative scrutiny, the measures set out in the water Bill. The Prime Minister gave an undertaking to the Chairman of the Select Committee on Environment, Food and Rural Affairs that a draft bill would come forward within months and I have repeated that commitment today.
Mary Creagh
I take it from that answer that there will not be a full water Bill in the Queen’s Speech this May. On the issue of abstraction, the proposals so far in the water White Paper talk about reforming the abstraction licence with an end date of 2027. The Secretary of State has had three drought summits—
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
Much can be done now.
Mary Creagh
That is fantastic; so we can look forward to a reform of the abstraction regime that will not take until 2027.
Frank Dobson
In considering any water shortages that may or may not occur this year, will my hon. Friend and the Secretary of State bear in mind that in the 22 years since privatisation there has been no net increase in reservoir capacity in England?
Mary Creagh
I am sure that the Secretary of State will have digested that point from my right hon. Friend.
This is an orphan Bill, which is decoupled from the long-term reforms required to tackle climate change and keep water affordable. Why does the Bill, which affects two areas—the south-west and London—not mention those two areas? Is it because that would make it a hybrid Bill, which would require full and proper scrutiny in the other place? Is it because by not mentioning those two areas and drawing the Bill widely, the Secretary of State is able to define it as a money Bill, which means that it receives only a cursory one day’s scrutiny in the other place? What possible reason could she have to fear their lordships’ scrutiny of this worthy and timely Bill? We can surmise that she is keen to get her short Bill through Parliament—an endeavour that does not seem to have been properly communicated by the Whips to her own Back Benchers, if today’s sudden change of business is anything to go by.
Andrew George
I note that the hon. Lady described the Bill as worthy and timely. I am curious about her line. She says that £50 per household in the south-west is insufficient; I would like to know whether she and her party propose offering more to the south-west, and how that would be funded. Secondly, in view of the line that she is taking, is she suggesting that she and her party will vote against the Bill today?
Mary Creagh
I am happy to say that we will not vote against the Bill. If the hon. Gentleman waits, I will come on to some of the wider affordability issues and will, I hope, answer some of his questions on the wider issues.
The next unanswered question is: why are we debating the Bill now? We know that the Government ran out of meaningful new legislative business about two months ago, and the House has been surviving on thin rations—a meagre diet of one-line-Whip business and Back-Bench business debates, valuable though they are. There was no new Government legislation, but suddenly—boom!—out of the Department for Environment, Food and Rural Affairs, a Department whose Ministers are the embodiment of clout, grip and competence, spurted a sudden, short water Bill, born of the realisation that if the Department has lost its slot in May’s Queen’s Speech, it had better deliver on the Chancellor’s promises to the south-west and his coalition partners. That happened just six short weeks before the end of one of the longest parliamentary Sessions ever held. Clearly, such a masterstroke of parliamentary planning and timing could have been confected only by the Department that brought us the forest sell-off.
Labour in government corrected many of the injustices of water privatisation. As I said, in 2000 we banned water companies from cutting off the water supply of homes, schools and hospitals for non-payment. It is extraordinary to think that legislators would allow provisions that let hospitals—care givers and providers of sanitation—be cut off for non-payment of bills. We allowed for compulsory metering in areas of scarcity, and a more muscular Ofwat, holding the water companies to account, has emerged in recent years.
Mary Creagh
I will make some progress, and then I will give way. Where specific issues required careful consideration, we brought in experts to advise us. We commissioned the Pitt report after the 2007 floods, the Cave report to look at competition and innovation, and the Walker report, which analysed water charging and looked explicitly at the problem of high bills in the south-west. My hon. Friend the Member for Ogmore (Huw Irranca-Davies) legislated for water companies to introduce social tariffs in the Flood and Water Management Act 2010. I shall now examine each of those issues in turn.
Some have questioned why the Tory and Lib Dem Government wanted to extend £40 million a year in financial assistance to a region dominated by Tories and Lib Dems. I will leave others to speculate about the politics, but it is clear that customers in the south-west face bills that are, on average, 43% higher than in other areas. That is why we examined the issue in government and did the groundwork on helping those 700,000 households. I pay tribute to colleagues in all parts of the House, and to our former colleague, Linda Gilroy, for their work on the issue.
Mr Matthew Offord (Hendon) (Con)
Perhaps the hon. Lady could tell the House the average cost of a water bill in the south-west pre-privatisation, and say how that compared with bills in other parts of the country.
Mary Creagh
I do not know what the costs were, but I can say that all water bills were considerably lower pre-privatisation. If the hon. Gentleman looks at graphs of what happened to bills post-privatisation, he will see that they went up exponentially, particularly in the early 1990s. They were kept down in ’91 and ’92, and then they went up exponentially across the board. From memory, they were around £250; that has gone up massively.
Mary Creagh
I do not have those figures. Does the hon. Gentleman have them? Perhaps he will share them with the House in the debate.
We accept the argument that the south-west requires additional help to keep water affordable, but stopping there misses the point. Ofwat, the independent regulator, estimates that a fifth of households are already spending more than 3% of their income on their water bills, yet Ministers have failed to bring forward any plans to tackle high bills, apart from in the south-west, which has the highest bills in the country. There, around 200,000 people spend more than 3% of their disposable income on water bills, but in the Thames region there are a staggering 1 million people in the same predicament, so surely we should be working towards extending help through a national affordability solution. Without one, the effect of the Government’s £50-a-year payment in the south-west will soon be wiped out by price rises; prices will rise by more than inflation in each of the next three years. The assistance is welcome, but decoupled from wider reform, it will provide little lasting help on water affordability. I hope that answers the point raised by the hon. Member for St Ives (Andrew George).
We know from Ofwat that the groups most vulnerable to water poverty are single parents, pensioners and jobseekers. When we were in government, we introduced WaterSure, a national affordability scheme paid for by a cross-subsidy from water customers, and paid only to metered households with three or more children or to people with certain medical conditions, but the limitations of the scheme are apparent, because not everyone in water poverty has three or more children, and many pensioners and jobseekers will not be eligible for the scheme.
There is a further problem of penetration of WaterSure. Only a third of eligible households access the scheme, so there is big issue relating to the role of the water companies in educating their customers about WaterSure and the role of places such as jobcentres in making sure that people have access and understand their entitlement.
Mrs Spelman
When the hon. Lady’s party was in power, what did it plan to do about the fact that two thirds of people eligible under WaterSure were not taking it up? Will she acknowledge, therefore, that with the baton being passed to the present Government, who continue to run the WaterSure policy but with more determination to enable more eligible households to take it up, we have supported that with the introduction of guidance on social tariffs to all companies?
Mary Creagh
The right hon. Lady might want to answer her own question. We commissioned the Walker report, which said that Ofwat should do a six-monthly league table of water companies showing the best and worst performers. She has had 18 months. Has she implemented the recommendations of the Walker report? She has made her own guidance to water companies on social tariffs voluntary, not mandatory, and I fail to see how allowing them to choose whether to implement them will help customers.
Alison Seabeck
Perhaps I can shed some light on what was going on under the previous Government. In the Plymouth south-west area, a detailed pilot was undertaken to identify people for whom water was unaffordable. That was to feed through into forward policy development. Anna Walker used that as part of the basis for some of the work that she did, so it is not true that we were not considering how to reach the people who needed help.
Mary Creagh
I thank my hon. Friend for that clarification. It is clear that much work was done in the south-west because it has the highest penetration of WaterSure customers and the highest rate of metered households, despite the fact that water is plentiful in the south-west, so it has nothing to do with scarcity. It has to do with people making a rational economic choice and understanding that if they move to metered bills, their costs will go down.
The Government should be using existing data about benefits to ensure that everyone who is eligible is on the WaterSure tariff. I hope we have described the heavy lifting that we did on that tariff. Last year the Government consulted on taking on the costs of WaterSure and absorbing them at a cost to the Exchequer of £10 million a year, as opposed to continuing the cross-subsidy. This idea was dropped from the water White Paper. What has happened to that notional £10 million? Why is it not being used to part-fund company social tariffs or a wider tariff to help the wider population?
Londoners will see their bills rise by £70 to £80 a year when the Thames tunnel is finished in, we hope, 2020. London has some of the poorest people in the country and a significant number living in water poverty. WaterSure will not help most of them. It is imperative that company social tariffs are introduced well before the Thames tunnel is completed to minimise the financial impact on Londoners, yet the Government’s draft guidance on company social tariffs shows that they are adopting a minimalist approach.
The Government have ruled out data sharing, which is key to helping water companies identify customers in water poverty and enabling them automatically to reduce their bill, which is obviously the least painful way, rather than allowing people to get into water debt and then taking action through the courts to pursue the money. They have ruled out an affordability scheme administered nationally, and they have ruled out an extension of WaterSure, which is the only national social tariff. Under DEFRA’s draft guidance, the design of social tariff schemes is left entirely to the water companies. Indeed, it is their choice whether to implement a scheme at all. This is the big society in action: a postcode lottery for millions of customers facing water poverty. We believe that it is untenable for the Government to pass a water financial assistance Bill without providing any assistance to the rest of the country. We will pursue amendments that would oblige water companies to deliver a social tariff scheme that meets clear and uniform criteria.
Dan Rogerson
On the question of how WaterSure will be funded and placing obligations on companies, if we have a funded social tariff in the south-west, it will have a disproportionate effect on the other bill payers who are paying into the pot. More work needs to be done before we start pushing regions down the route of having generous social tariffs, because we need to know what costs are being loaded on to other bill payers in the region.
Mary Creagh
That is an excellent point. That is why we were interested in the Government’s consultation, which talked about a national affordability scheme and offered the potential to absorb the costs of WaterSure. I hope that the Minister will offer some clarity on that in his closing speech, and I am sure that we can work together on that.
Simon Hughes
I do not mean to pre-empt what the hon. Lady might say on the other aspects of bills for water rate payers, but are she and her colleagues concerned—I put this point to the Secretary of State—that the value to water rate payers in London of the Thames tunnel, which is now priced a £4.1 billion, might not be what it was when the previous Government thought it was a good idea? There are big questions about whether it represents value for money for water rate payers and is the best solution in the light of the evidence.
Mary Creagh
We believe that the allocation of sums, guarantees, indemnities, or whatever form the financial assistance takes, should be done with full parliamentary oversight, and I will address that when I move on to clause 2.
We believe that the tariffs should be paid for by cracking down on bad debt, which the Secretary of State mentioned in her speech. Ofwat’s website states:
“More than five million households currently owe money on their water bills and over the last five years the amount owed has increased by more than 50%.”
In 2010, £1.6 billion was outstanding, three times the amount of bad debt for gas and electricity bills, despite the fact that water bills are much lower. As she said, the people who cannot or will not pay add an average of £15 a year to the bills of consumers who play by the rules. Bad debt arises in part because landlords are under no legal obligation to provide their tenants’ details to water companies. Rather than a voluntary approach, the Government should compel landlords to share their tenants’ details with water companies, and I know that the consultation is ongoing and is due to close fairly soon. If we reduce bad debt, we can reduce everyone’s bills and fund social tariffs that help those struggling to pay.
Clause 2 creates financial mechanisms and guarantees to support the construction of the Thames tunnel. Why do the Government avoid using the words “Thames tunnel”? Are they trying to avoid a proper discussion of the merits? Labour supports the project. Our Flood and Water Management Act 2010 introduced a “provision of infrastructure” regulation, creating the framework for the tendering, designation and building of such projects. However, costs have risen and time scales have stretched. The Government need to show leadership and make a clear commitment to the project and ensure that the right vehicle for managing and delivering it is put in place. The consultation process for the tunnel is vital for ensuring that sites are placed correctly and the environmental impact of the work on residents is minimised.
Mr Slaughter
I agree with what my hon. Friend says about the Thames tunnel, and to that extent I agree with the Secretary of State. However, had the Secretary of State not chuntered through her speech in such a cursory manner on an issue that is very important to London Members, I could have told her that the virulently anti-tunnel comments that I quoted were not mine, but those of my neighbouring Tory MP, the hon. Member for Chelsea and Fulham (Greg Hands), who happens to be a Government Whip. This is just another example of members of the Government saying one thing in the House before going back to their constituencies and saying the exact opposite.
Mary Creagh
That used to be the province of the Liberal Democrats, but perhaps saying two different things, depending on whether one is at the top or the bottom of the hill, in the House or in one’s constituency, is contagious. We should all take the necessary precautions, but such indiscipline would never have been allowed when I was a Government assistant Whip.
There remain, however, a number of hurdles to clear, not least that of the Communities and Local Government Secretary, who has an effective veto over the tunnel, so DEFRA support alone will be insufficient. We see the tunnel, in addition to its environmental benefit, as an opportunity to create up to 4,000 direct jobs for Londoners, to expand apprenticeships and to regenerate London. With the provision of financial assistance, we expect not just those apprenticeships but higher-level training to be a non-negotiable part of the deal.
In an infrastructure project of this scale, complexity and duration, we should be setting targets not just for apprentices but for the number of young people who will achieve masters-level civil engineering qualifications over the project’s lifetime, as well as encouraging local and national procurement to secure growth and the economic recovery in London.
No impact assessment has been produced alongside the Bill. The rather short explanatory memorandum states that this is because the Bill is associated with public expenditure, but clearly there will be burdens on water companies when administering any schemes under clauses 1 and 2, so what conditions will South West Water have to fulfil? Presumably, there will be an audit process, so what will the company’s administrative costs be, or has it agreed to waive them?
Of more concern, however, is the fact that there is no provision anywhere in the Bill to require potentially large sums of taxpayers’ money to be spent transparently and accountably. Clauses 1 and 2 state that undefined “terms and conditions” can be attached to the use of public money, but that falls well short of making clear exactly what will happen, and we believe that certain safeguards should be specified in the Bill.
I had a little look at the Water Industry Act 1991 this morning, and section 152 states that the Government can pay out money to water firms only
“in the interests of national security.”
So it is clear that infrastructure projects of the scale and cost of the one before us were simply not envisaged at the time of privatisation.
Today’s Bill shows those limitations, and section 154 of the 1991 Act also states very clearly that if any financial assistance or guarantee is given,
“the Secretary of State shall lay a statement of the guarantee before each House of Parliament”
and
“as soon as possible after the end of each financial year…lay before each House of Parliament a statement relating to that sum.”
The right hon. Lady says that the subsidy to South West Water will continue until the end of the next comprehensive spending review period, but that again is not in the Bill or in the explanatory memorandum, and we want to see those things guaranteed.
Mr Adrian Sanders (Torbay) (LD)
Will the hon. Lady commit her party, should it ever return to power, to continue the £50 discount each year?
Mary Creagh
We have to look at the cost of water bills in the round—the average, unmetered cost of water bills. We want to bring them down throughout the country, but we are not sure what sort of economy we will inherit, so I shall not make any election promises today.
We will seek to amend the Bill in Committee so that the Government are required to seek further parliamentary approval for such payments through the laying of a statutory instrument. That power should be triggered after a sober assessment of the facts, and after the Secretary of State has made her case to the House.
The explanatory memorandum is silent on state aid. Is the Bill compatible with EU state aid rules? Has the Environment Secretary discussed the matter with the European Commission? [Interruption.] Okay. So water customers do not run any risk of having to repay the assistance at a later date. That is a relief.
In conclusion, despite the right hon. Lady’s warm words, this “financial assistance” Bill is poorly named. It extends no financial assistance to anyone except those living in the south-west. It is an orphan Bill, conceived in haste, which is silent on the wider affordability issues, and it ignores the cost-of-living crisis for households hit by this Government’s assault on the squeezed middle.
We recognise that privatised water has brought benefits, with £90 billion invested in our infrastructure at no direct cost to the taxpayer, and we believe that water should remain a properly regulated private industry. Today, however, is a day for thinking about the water customer. Since privatisation, customers’ bills have increased year on year, wherever they live. Many have found themselves adjusting to metered water, and by 2015 there will for the first time be more metered customers than unmetered ones. Climate change will mean more regions being under greater water stress, with consequences for customers’ water use. That is why it is down to us to hammer out a new consensus on water affordability. I ask Ministers to work with us to amend the Bill and help hard-pressed families.
Miss Anne McIntosh (Thirsk and Malton) (Con)
I congratulate the Secretary of State and the Department on bringing forward what some might call a small but perfectly formed Bill. The House will be at a loss to understand from what the shadow Secretary of State said whether the Labour party is in favour of the Bill, the Thames tunnel super-sewer structure and the more affordable water bills that the Bill proposes.
I would have welcomed the opportunity to put my points to the Secretary of State, but I see that she has been called away urgently. She talked about the 21 days available for a debate on the national waste water policy. I am delighted that the relevant documents have been selected for this debate, which allows me to draw attention to the conclusions in the Environment, Food and Rural Affairs Committee’s fourth report, on the draft national policy statement on waste water. We stated:
“Given the importance of this NPS in delivering waste water and water quality objectives, we recommend that it be subject to a debate on the floor of the House of Commons on an amendable motion prior to desgination.”
When the Under-Secretary of State, my hon. Friend the Member for Newbury (Richard Benyon), winds up the debate either today or on some future date, will he confirm whether the Government intend to table an amendable motion for debate?
Simon Hughes
The Minister knows that some of us have been asking for that process to be followed, and we look forward to such a motion coming before the House. I therefore endorse the hon. Lady’s request, which I think will have widespread support from all parties.
Miss McIntosh
I am sure the Secretary of State, wherever she is, and my hon. Friend the Minister will have heard that point.
Mr Love
I, too, express my interest in having a debate on the national policy statement, which is very important. The hon. Lady mentioned the need for an amendable motion, but from speaking to the Minister’s office and the Department’s parliamentary office, I understand that it will be non-amendable. An amendable one would be greatly preferable.
Miss McIntosh
I am grateful to the hon. Gentleman, and I commend his work in bringing his constituents’ concerns to the Select Committee and continuing to represent them now. Those of us who work in London during the week all wish to see the super-sewer in place, but we understand the length of time that it will take. There has not been an engineering project of that nature since, I think, 1858, and the Committee has no doubt about the impact that the sewer’s construction will have on his constituents and others.
The Committee’s wish, as recorded in our report, is for an amendable motion, and I am delighted that there is support for that. It may be within the gift not of the Minister but of the party managers, and looking further along the Treasury Bench I see how well represented they are today. I am sure that our point will be taken back to the highest possible authorities. I welcome, in passing, the Leader of the House’s commitment to allow more time for this debate.
At the conclusion of her speech, the Secretary of State made some remarks—on which, unfortunately, she would not take any interventions—about the amendment relating to planning, which will be of great interest to the Select Committee and, I am sure, to right hon. and hon. Members who live along the path of the proposed super-sewer. I hope that my hon. Friend the Minister will be able to clarify those remarks.
On the waste water national policy statement, the Committee is pleased that the Government’s response to our report set out the areas where DEFRA has accepted our recommendations and consequently amended the NPS—for example, in line with our recommendation that the inclusion of a project in Ofwat’s asset management plan be removed as a criterion of proof of the need for the project.
Neil Parish
It is absolutely right that the planning process be taken into consideration. In my view, the Thames tunnel must go ahead, because when I was returning to Battersea from this House late one evening, cycling along the Embankment, the tide was low, and I could smell the sewage being pumped out into the Thames. [Interruption.] Hon. Members may turn their noses up, but I have smelt it, and we must do something about it.
Miss McIntosh
Given what the hon. Member for Edmonton (Mr Love) said as well, I do not think that the House is in any doubt about the need for the Thames tunnel super-sewer, but we should not underestimate how long the project will take and its cost. Concerns about rising costs, to which hon. Members alluded, were expressed in the evidence to the Committee.
Mary Creagh
The hon. Lady said that she was not clear whether we support the Bill. I want to put it on the record that I said at several points that we do support it. As for whether we would continue with it, we would have no plans to repeal it in government if we were elected in 2015.
Miss McIntosh
I am sure that the whole House will welcome the hon. Lady’s helpful clarification, because her concluding remarks were a little ambivalent.
Returning to DEFRA’s acceptance of some of our conclusions, some of the site-specific material has been moved to an annex that is part of the document that is not to be relied on by the decision maker in reaching a decision on a project. That meets, to some extent, our criticism about the inclusion of weak material on the Thames tunnel, as well as on Deephams sewage treatment works. Perhaps my hon. Friend the Minister will also give us a status report on those treatment works.
David Mowat (Warrington South) (Con)
In the Select Committee’s consideration of the £50 reduction in the south-west, did it look at water poverty more generally across the United Kingdom, including whether other regions have more consumers in water poverty than the south-west, so that it might have been fairer for the money to have been allocated in a different way?
Miss McIntosh
In our report on the Thames tunnel, we did not consider aspects of affordability, which are rightly covered in an earlier report to which I will turn shortly.
I am delighted that DEFRA accepts that the remaining site-specific sections have been improved and that the Government have, as recommended by the Committee, moved to change the definitions in the Planning Act 2008 to include sewerage transfer and storage projects such as the Thames tunnel in the process for deciding applications for nationally significant infrastructure projects. The Committee welcomes that. I hope that we have discharged our duties comprehensively, given that this was one of our first opportunities to do so under the Planning Act.
Simon Hughes
I pay tribute to the hon. Lady and her colleagues on the Select Committee. May I make an unashamed, but well-linked plug? Next Tuesday, 6 March, at 7 o’clock in Committee Room 11, I will be hosting a meeting to discuss the state of the issues that relate to the Thames tunnel. I hope that she or one of her colleagues will be able to come and listen to what is said.
Miss McIntosh
I am most grateful. If it does not clash with our Committee meeting, all of us who are available will endeavour to be there.
I echo the comments of the hon. Member for Wakefield (Mary Creagh) about there not being an impact assessment. The explanatory notes state that because the Bill is concerned solely with public expenditure, no impact assessment has been undertaken. Clearly, it is not just about public expenditure; a substantial amount of money is being requested by the water companies, through the Government, to give a £50 reduction. The Minister will be aware that some of those who live in and represent the south-west are concerned that increases in inflation will wipe out the £50 reduction.
Today, the Select Committee took evidence from the Minister of State, Cabinet Office, who is responsible for providing policy advice. He told us that an impact assessment is meant to look at the environmental impact of a project. I am not suggesting that the Bill is defective because it does not have an impact assessment, but I would like to record my personal disappointment that there is no impact assessment. It would have allowed the House to perform proper scrutiny on Second Reading and in subsequent parliamentary stages. It should have been incumbent on the Government to produce an impact assessment on the implications for the water companies of the reduction of water bills in the south-west of England and on the impact that the Bill will have on Thames Water.
The Select Committee produced an excellent first report of this Parliament, if I may describe it as such, entitled, “Future flood and water management legislation”. It is right at this moment to pay tribute to the work of the previous Government. There was all-party support for the Pitt report and its recommendations. There was also all-party support for, and obviously positive scrutiny of, the Flood and Water Management Act 2010. The fact that we are having to wait for the draft water Bill, which will cover all the other aspects, is a source of concern. We are approaching apace 30 June 2013, when the Association of British Insurers will look to replace its statement of principles on the provision of flood insurance. There will also be a host of other measures to consider.
Perhaps in responding, the Minister could explain what he is doing about insurance. I want to record my personal resistance to any state funding of insurance. There are hard cases, which many of us will have in our own constituencies, where houses remain at a substantial or high risk of flooding. I can think of examples such as Thirsk, Pickering, Malton in the past, and Sinnington at the moment. There are therefore insurance aspects that need to be considered. However, as soon as a Government introduce an element of state funding or state insurance, it leads others who are on a low or fixed income to argue that they have concerns about their ability to pay insurance. I know from the visits I made as shadow floods Minister to parts of the country such as Cumbria that there is real concern, particularly when properties are rented, about whether those on low incomes can afford even contents insurance.
Stephen Gilbert
With some 200,000 homes in the country at risk of flooding, what mechanism would my hon. Friend propose for ensuring that the people affected can access affordable insurance?
Miss McIntosh
Speaking in an entirely personal capacity, and looking at sustainable development and flood prevention, the one thing we could do today is to stop building on floodplains. Perhaps the House would like to unite around that and an amendment could be tabled to a future water Bill.
There are things that we can do now. There has been lots in the papers recently about water stress and scarcity, and drought. That will inevitably have an impact on homes. There is a risk of subsidence and there are reports of roads cracking. That obviously has insurance implications for householders and business properties, but also for highways. Again in a personal capacity, I challenge the Minister on how we will pay in those mostly rural areas for roads that are cracking now because of drought rather than the flood damage that occurred in the previous two years.
I welcome the fact that our report discusses the new responsibilities of the upper-tier authorities for flood and water management, and that funds are available. The Government response talks about providing the funding to lead local flood authorities through direct grants and says that that is expected to fund fully their new responsibilities under the Act. However, my local authority tells me that those moneys are not ring-fenced. If that is the case, and we are reducing, because of austerity, the money for the core tasks of the upper-tier authorities—county and unitary—that will pose real difficulty for them, and I put that to the Minister.
My hon. Friend the Member for Tiverton and Honiton (Neil Parish) mentioned affordability. The Minister and others have been challenged about that in many forums, not only the Select Committee, but all-party groups. It is right that the Bill focuses on affordability for the south-west region. [Hon. Members: “Hear, hear.”] I have no connection with the south-west, other than hoping that I have many friends on both sides of the House who represent the region extremely ably. However, there is a particular issue in that the population is small and there is a heavy emphasis on fixed and lower incomes. As I said, the application of the EU drinking water directive, and especially the bathing water directive, posed enormous problems for the south-west.
I therefore welcome the fact that the Bill addresses affordability. I hope that when the House has ample time—I am sorry if it will not be this year; we keep hearing that something will happen in the coming weeks or the coming months—and the draft Bill is before us, we can address some of the other affordability problems and also a social tariff.
David Mowat
I have listened to the points about the south-west, and I, too, have no problem with the region being helped through the Bill. However, there is an issue about water poverty and in which regions it is greatest. There is a case for helping them, notwithstanding the specific problems that exist in the south-west. I believe that there is more water poverty in the north-west than the south-west, and there is therefore a case for doing something there at the same time.
Miss McIntosh
I do not want to rehearse the arguments I have just made, but every hon. Member could point to examples of water poverty. I am sure all of us have constituents who write to us or come to our surgeries to talk about the affordability of their bills. Dealing with that is the role of Ofwat. I should like to record my thanks to the chief executive, and more especially the chairman, of Ofwat for their work in that regard. They have a real role to play.
One other piece of unfinished business that I expect to be included in the draft water Bill—this was raised in the Committee’s scrutiny of future flood and water management legislation and the Government’s response—is the Gray review of regulatory aspects. I hope my hon. Friend the Minister confirms that that will be covered by the draft Bill, along with the Cave review, which is on aspects of competition—specifically, the level of competition that there will be—and the Walker review. In times of water stress and scarcity, it is important that we encourage people to use water sensibly and, as Ofwat and Anna Walker have frequently said, that we encourage households and businesses not to heat their water beyond the supply that they need, because doing so leads to unsustainable use.
Another issue pertains specifically to the Thames tunnel and more widely. The Committee is persuaded that the Thames tunnel is the best way to proceed for the purposes intended, because sustainable drainage systems were excluded. However, we just touched on how to prevent floods, and I hope the Minister can today report on progress on establishing sustainable drainage systems throughout England and Wales. Will he renew the commitment, or give us a once-and-for-all-time commitment, that the Government will end the automatic right to connect, which goes to the heart of water stress and scarcity? In Filey in my area, 300 houses will be built on a functional floodplain against the council’s advice. The field takes surface water surplus, but there is nowhere to displace it to. Yorkshire Water is trying hard to accommodate proper capacity and connection for those 300 extra homes without making others short of supply, but the area is not flush with water, if you will pardon the expression, Mr Deputy Speaker.
I welcome the debate and the opportunity to draw the Committee’s wider concerns to the House and the Minister. On the two specific points to which my right hon. Friend the Secretary of State referred, I hope the Minister will confirm that there will be a debate on an amendable motion on the Floor of the House on the national policy statement on waste, and clarify what planning issue the Government will bring before the House.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
It is a pleasure to follow the hon. Member for Thirsk and Malton (Miss McIntosh), who as Chair of the Environment, Food and Rural Affairs Committee obviously speaks with great authority on such matters. As one of her vice-chairs on the all-party parliamentary group on local environmental quality, I am used to following her—I have certainly done so for the past couple of years. Perhaps in future I will get ahead of her, but that is something to hope for.
I shall not speak for long. I want to raise two issues, the first of which is the Thames tideway tunnel and how it will impact on my constituency. I am grateful to the Minister who has responsibility for the natural environment and fisheries for the letter he sent to London MPs yesterday to explain how the Bill will help. The second issue relates to water for fire sprinkler systems, which we have discussed before. It could be referred to in the Water Industry Act 1991, which the Bill amends. This might be a missed opportunity to amend the Act further to deal with that issue.
I shall deal with the constituency matter first. As a former Minister in the Department for Environment, Food and Rural Affairs and a former Minister for London, I am familiar with the challenges facing the Government in dealing with the problem of massive sewage discharges into the Thames. Since the formation of the coalition Government, all the political parties, as well as the Select Committee, have considered the matter and concluded that something needs to be done.
In my constituency, Thames Water’s original plans would have taken nearly all of King Edward memorial park, which, given the population density, is one of the very few green open spaces in Tower Hamlets in east London. Not surprisingly, the plans caused considerable outrage—and that hostility continues today—and it led to the formation of the Save King Edward Memorial Park campaign. It comprises local residents, freeholders, leaseholders, council and social tenants, and residents from the new expensive blocks on the river as well as from the established estates and nearby. All were determined to protect the park from being destroyed by Thames Water.
I pay tribute not only to the campaign officers but to all residents, local councillors and officers of Tower Hamlets council, as well as to the local papers, the East London Advertiser and The Wharf, for the campaign to save the park. The campaign officers are Carl Dunsire, Emma Dunsire, Robin Milward, Toni Davey, Mahbub Mamun Alam, Raihan Islam and Mark Baynes. They have all done an excellent job bringing the community together and lobbying Thames Water and myself—and I have been in discussions with DEFRA, so the campaign has clearly made an impact. Local celebrities, including Sir Ian McKellen, Lee Hurst and Helen Mirren—to name but a few—have also registered their support.
I must also pay tribute and give credit to Thames Water. That will not go down well in the constituency because it is still regarded pretty much as the enemy, but to its credit, it has engaged with us, understood and several times changed its plans for King Edward memorial park. Mr Phil Stride and his team deserve credit for that. Some months ago, Thames Water also engaged as a consultant our former colleague, Mr Martin Salter, the former Reading MP. That has helped the consultation process with local residents. Also, I recently chaired a constituency public meeting to which more than 100 people turned up.
The Save KEMP campaign, which, as well as local residents, comprises people of professional standing—for example, Carl Dunsire is an engineer—identified an alternative brownfield site on Heckford street. That proposal was put to Thames Water a considerable time ago, and since then the company has floated it as a secondary option. Having said that, the company’s preferred option remains to build out on to the river from the foreshore of King Edward memorial park, rather than in the park.
John Biggs, the Greater London assembly member for east London, and I wrote to Thames Water this week seeking the latest consideration of the two options and the costings. Heckford might be slightly more expensive but given the disruption to the local community, the support for the project and everything else, if the costs were equitable, the local community would be strongly in favour of Heckford.
Frank Dobson
Will my hon. Friend bear it in mind, when talking about the extra expense, that Thames Water, over the past six or seven years, has made profits totalling £1 billion, which have been paid out to its currently Australian shareholders and before that its German shareholders?
Jim Fitzpatrick
My right hon. Friend makes an important point that will be a matter for scrutiny in Committee. I expect it to be raised in Committee in due course.
East London assembly member John Biggs and I are seeking Thames Water’s latest considerations, and obviously the Bill would affect the building of the Thames tideway tunnel. The local community is resolute on this issue. My only concern about the choice between the Heckford street site and the Thames foreshore site is that building the interceptor to the sewer on the foreshore would mean much more traffic by water, on the Thames. If Heckford street is chosen, there will be several thousand heavy goods vehicles on the streets of Tower Hamlets and further east for several years. That would not be a welcome dimension, but these things are in the balance, and obviously we are pressing for the best possible outcome for the local community.
The second issue that I want briefly to mention is fire sprinklers. I pay tribute to the Minister, who is always courteous and efficient. I am grateful for the meeting that he afforded me and the officers of the all-party group on fire safety and rescue to discuss the matter only four to five weeks ago. There is a myth perpetrated by the media—mostly in adverts on TV and in the cinema—that when a fire in a building activates the sprinkler system, every sprinkler right across the building is activated and the whole place is doused in water and damaged. The reality, of course, is that the only sprinkler activated is the sprinkler head immediately above the seat of the fire, as the heat generated by the fire melts the soldered link, causing the blockage to fall away and allowing the water to act as an extinguishing agent. The problem with the myth is that people are frightened of sprinklers, because they think that if they install them in their building and they are inadvertently activated—we know that smoke detectors can go off because of burning toast—their home would be damaged. However, that is not the case, and the cost to society of not installing sprinkler systems in buildings includes the hundreds of millions of pounds lost to schools damaged by fire every year—a cost that is often passed on to local council tax payers, as most local authorities self-insure.
Mr Slaughter
My hon. Friend is making a good point about a matter that was brought home to me recently. Hon. Members will remember the serious fire that closed Wood lane, opposite the BBC in Shepherd’s Bush—perhaps that is why it got so much publicity. The consequence of such events in major buildings with no sprinkler systems is not just the risk of loss of life, but often the permanent loss of jobs where buildings cannot reopen and the huge damage to industrial and public buildings.
Jim Fitzpatrick
My hon. Friend anticipates the point that I am coming to, immediately after I make the point that when a school burns down, the problem is not just the damaged building, but the disruption to the education of the students at that educational establishment and the impact on parents, who have to take their kids to schools further away, with disruption to friendships and the rest of it. As for the point that he correctly makes, when there is damage to an industrial or commercial premises, there is not only the damage to the building, but the cost of insurance for the company, a loss of production and, more often than not, unemployment costs to the individuals who work on those premises, because it takes months and sometimes longer to rebuild or replace, if at all possible.
Most critical of all is the loss of life. Fire deaths affect the most vulnerable in society. The majority of people who die in fires are the most vulnerable—the old, the sick, the young, people with social difficulties or people with addiction problems. The most vulnerable are the ones who predominantly die in fires. Tragically, we have recently seen a number of major multiple fatalities across the country, most recently in London—in what was formerly Brent East—where a mother and five children died in a fire. However, the experience of local authorities where fire sprinklers are the norm is entirely different. There is a district in Arizona called Scottsdale—one of Phoenix’s five districts—that is the fire sprinkler capital of the world, as I am sure the House will be pleased to learn. Scottsdale has had a city ordinance for 30 years that says that if someone builds something, they have to install a sprinkler system. One person has died in a fire in Scottsdale in 30 years. Scottsdale has 250,000 people. They smoke, they cook, they burn candles and they probably have heating too, despite the desert climate. Sprinklers save lives. That is now becoming the UK experience. More local authorities, more registered social landlords and more developers are recognising the benefits of sprinkler systems.
There has been extensive correspondence between the all-party group and DEFRA on the Water Industry Act 1991. If I may, I shall quote from a letter from former chief fire officer Ronnie King, who is a highly regarded officer in the fire service, as well as being the active administrative secretary of the all-party parliamentary group on fire safety and rescue and the chair of the water liaison group. In reference to the Act, which the Bill amends, he says:
“To this end I outline in this letter a proposed change to section 57 on the provision of water for firefighting. Section 57 covers the duty to provide water for firefighting and currently this duty is limited solely to providing water from designated fire hydrants. Increasingly householders are seeing the benefit of installing sprinkler systems, which will lead to significant reductions in fire deaths and injuries if they could be more widely used. Under the current legislation such supplies are classified as non-domestic supplies and are subject to agreement of terms and conditions on a case by case basis. An amendment of section 57 to include as firefighting water that taken from service pipes connected to a sprinkler system will clarify the status of connections to the water system for automatic fire sprinkler purposes. The current ambiguity is a barrier to the proliferation of sprinkler systems.”
I acknowledge that the Minister has asked his officials to examine that matter and to report on it. If nothing can be done in this Bill, we would be grateful if it could be considered for the water Bill that is coming along not far behind it. I also want to acknowledge that the vast majority of the water companies already do the right thing in co-operating, without the legislative clarity that the proposed amendment would provide. An amendment to the Water Industry Act 1991 in the Bill would be welcomed by the fire service and the fire industry as another major step towards a safer society, but I recognise that that might not be possible yet. School fires are increasing, and I am told that 10% of schools are affected by vandalism involving fires each year. More fires are occurring during school hours, and it is only a matter of time before there is a major tragedy. Most fire legislation is reactive and retrospective, drafted on the back of a major loss of life. The amendment that I have suggested could take us forward significantly, and protect our children in the future.
In conclusion—and as a complete aside—we really need to hold a fire evacuation drill in this place at some point, because we need to give leadership to the rest of the country on these issues. I am grateful for your indulgence, Mr Deputy Speaker.
Andrew George (St Ives) (LD)
It is always a great pleasure to follow the hon. Member for Poplar and Limehouse (Jim Fitzpatrick). As a former fireman, he demonstrates his passion for and knowledge of that subject. The last two contributions have shown how wide-ranging this debate can be—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I have been thanked for my indulgence, but let us just say that a conversation went on about how relevant some of the contributions were. Please do not test my patience too much.
Andrew George
Thank you, Mr Deputy Speaker. I was in no way implying any criticism of your great office, or of the way in which you apply the rules to our debates. I have carefully cut out of my speech all the parts referring to swimming and surfing in the waters of the south-west, and any other matters that you might consider a further indulgence.
As a Member of Parliament from the south-west, it is my primary objective to address the two issues that represent the primary purpose of this three-clause Bill before us today. Having said that, the hon. Member for Poplar and Limehouse spoke about the associated issue of fire sprinklers, which I hope will be dealt with elsewhere. Similarly, I know that the hon. Member for Thirsk and Malton (Miss McIntosh) never misses the opportunity to address the important matter of flood defences in her constituency.
I come to this debate to congratulate the Government warmly on what they are achieving through this measure, particularly by the clause that is intended, although not by name, to benefit or at least address an unfairness to the water bill payers of South West Water that has gone on for 22 years. The unfairness has been identified across all parties and by the Anna Walker review, which was commissioned by the previous Government in August 2008 and concluded in December 2009—just before the last general election. It highlighted the need to address this significant and long-standing unfairness.
I welcomed the comments of the shadow Secretary of State, the hon. Member for Wakefield (Mary Creagh). She clearly enters into debates in a full-blooded manner in a debating Chamber that often becomes extremely tribal. At certain points in the debate, I was not sure whether Labour Members were going to be encouraged to vote against the Bill. Following my intervention on the hon. Lady, however, she made it clear that she and her hon. Friends would support the Bill. That will resonate through the House, following what is, after all, a cross-party consensus on this issue. She raised legitimate questions about problems of affordability—across the country generally, but particularly for the customers of South West Water—that need to be looked at further. I hope that my hon. Friend the Under-Secretary will deal with some of those issues in his response. I hope, too, that legislation will be forthcoming soon after the next Queen’s Speech so that we can further meet concerns about affordability issues.
Speaking about how South West Water operates itself, I have in the past called it an ethics-free and risk-free money extortion system. I know that is rather strong language; it goes back primarily to the days when Bill Fraser was the chief executive of South West Water. His management of the business in a rather belligerent and Thatcherite style has largely been remedied by both his successors, Bob Baty and Chris Loughlin. With Chris Loughlin and his board of directors addressing the legacy, it might no longer be appropriate to describe the company as ethics-free. Chris Loughlin has managed the company well and genuinely wants to address the concerns about water affordability. I take my hat off to him and his board members for their efforts.
That said, one thing we cannot escape from is the fact that all water companies—certainly including South West Water—have a monopoly within their areas. There is effectively no competition at all. Significant questions have been raised about the effectiveness of Ofwat as a regulator. It is supposed to establish the “K” factor every few years to restrain the levering up of water bills, but water companies are still able almost to predict the end-of-year dividends at the beginning of each financial year.
Sheryll Murray
Does my hon. Friend agree that about 20,000 households in the south-west could reduce their bills by about £350 to £400 if they took up the option of water meters, and that many of those households include the elderly and the most vulnerable?
Andrew George
I absolutely agree that there are still many customers of South West Water who could enjoy lower bills as a result of transferring to water meters. Ultimately, however, the unit charges are bound to have to increase once all households switch to water meters. Unmetered households are currently charged significantly more than metered households, so when companies plan for the future it will simply not be possible for them to maintain the same level of profitability and dividend to their shareholders if they continue to charge at the current rate.
The point that my hon. Friend makes is extremely valid, but I must also say that I have taken up issues with South West Water, as I know other hon. Members have done. One such issue relates to customers living in sheltered accommodation or in houses in multiple occupation where they have single unmetered bills but do not have the benefit of being able to convert their property on to a meter because of the circumstances in which they live. In those circumstances South West Water has to be asked for what is known as an “assessed charge”, which often results in those people—inevitably, they are vulnerable households—having their water bill halved or significantly reduced to below that level. So there is further work to do to address the problems of water affordability for those living in households that cannot convert from unmetered to metered properties. I have asked South West Water if they would, as a default, automatically offer the assessed charge to those living in such accommodation, rather than their having to trigger it by requesting it. That is an important point.
Miss McIntosh
May I return to the hon. Gentleman’s comment about almost being able to predict the dividend at the beginning of the year? Water companies do not rely solely on water bills for their income and investment. Given that they are now viewed as a fairly reliable investment for pension and insurance funds, is it not a good thing that their dividend is fairly stable?
Andrew George
I certainly would not wish to denigrate or diminish in any way the importance of successful British companies. Where a company provides a good basis for investors, I celebrate that, along with others. I am simply commenting on the reality of the situation of water companies in relation to all other private companies, which ply their trade in a much more risky environment. That is simply a matter of fact, not of debate.
Simon Hughes
There is a link between the experience of colleagues and constituents in the south-west and that of people in the Thames area, because Kemble used to own South West Water and it now owns Thames Water. When it owned South West Water the bills were significantly high and there were a lot of complaints. People are fearful that some of the practices it used then, which included paying out dividends greater than its income—that seems to be not about saving the capital—might be being applied at the moment.
Andrew George
I am grateful to my right hon. Friend for that intervention.
On the question of the high water bills in the south-west, let me put on record the fact that in 2010-11, bills for South West Water customers were, on average, £486, which is certainly higher than the average bills in the rest of the country, which were £339. Unmetered customers had much higher bills, of course, at a rate of £721, whereas bills for metered customers in the south-west were £394 on average. As I and others have said, that was the focus of the Anna Walker inquiry.
Andrew George
My hon. Friend is absolutely right. Cornwall has been at the bottom of the earnings league table pretty much since records began. It has significantly higher water bills than anywhere else in the country, high levels of unemployment in some parts, as well as dependence on benefit, pensioner households and so on, and if we add to that the low average incomes across the households in the area, it is inevitable that in many households people will pay more than 3% of their income to meet their water bills.
As my right hon. Friend the Secretary of State said earlier, the problem is partly caused by a lower level of infrastructure at the time of privatisation in the early ’90s and by the fact that the south-west has been significantly more burdened by the costs of the bathing water directive than any other region in the country. I have drawn the same parallel as others. The bathing waters around the Cornish and south-west coast are a national asset yet only 3% of the population must pay for the cost of cleaning up. The cost is very high, because many outfalls must all be dealt with very expensively, which is the primary cause of the excessive bills across the south-west. The general populace enjoy other national assets, such as the museums and galleries of London, and it is the general taxpayer who pays for them. We do not ask just London taxpayers to pay for the National Gallery, the British Museum and the other museums—we, as a country, contribute and that is an important parallel.
There has been a long-standing campaign and the Anna Walker review was rather belated but at least welcome and took us a long way down that road. I congratulate the previous Government for that and pay tribute, as other hon. Members have, to Linda Gilroy, a former Member of this House who contributed a great deal towards advancing the case for fairness in the billing of water customers, particularly in the south-west. I also congratulate the hon. Member for Plymouth, Moor View (Alison Seabeck) for calling a debate on 14 June 2010, which can be found at column 710 of Hansard, and my hon. Friend the Member for Torbay (Mr Sanders) for doing so on 9 March 2011.
There are issues that need to be addressed. To sum up—I am aware that I have taken as much time as the previous speakers—I hope the Minister will address my questions. Clause 1(3) concerns the discretion of the Secretary of State in determining which customers within any particular water company area might benefit from the intervention of the Secretary of State to vary the bills or make a contribution, and my question, which relates back to the announcement of the payment of £50 per household in last year’s autumn statement, concerns how a household will be defined.
In my area, a large number of households run bed-and-breakfast facilities, guest houses and other businesses, and they are businesses for the purposes of South West Water’s billing structure. However, there are also many wealthy second home owners who have water meters and pay virtually nothing towards the very high costs of getting water to their properties, which are often very remote—on cliffs and so on—and taking away their sewage. Often, they let their properties at very high prices and make a lot of money, but they are not considered to be businesses and so they will get the benefit of the reduction of £50 per household. That clear and evident unfairness is one of many, but I shall not bore the House with a raft of examples regarding this issue of how households should be defined. If we are addressing issues of vulnerability and affordability amongst water rate payers, we need to be very careful how we define households.
The £50 per household reduction is a rather blunt instrument. Yes, it is efficient and it means that the administrative costs will, one hopes, be less than would have been the case with a more elegant and sophisticated measure for targeting vulnerable households. However, because of the problems with adopting a WaterSure system across the south-west and because of the evident unwillingness of water rate payers in the south-west to make any further contribution to a scheme that would benefit vulnerable households, it is unlikely that those households will be able to benefit from any application of a regionally based WaterSure system. I therefore urge my hon. Friend the Minister to look again at whether we can resurrect any form of a national WaterSure system. Clearly, we will go back to South West Water and talk to it again about how it might address the issue of particularly vulnerable households.
A number of matters need to be addressed and I am sorry that I have not addressed those concerning London, but I know they will be addressed by many other people. I look forward to hearing my hon. Friend’s reply and his responses to the questions that have been raised.
Dame Joan Ruddock (Lewisham, Deptford) (Lab)
May I start by apologising to the House? I have an urgent constituency engagement and will have to leave before we conclude the debate.
Let me say at the outset that my constituents and I support the construction of the Thames tunnel. There is no doubt that we cannot continue to discharge raw sewage into the Thames. Much as I would like to debate many of the wider issues, I am essentially here to make a statement on behalf of my constituents, because Thames Water has a proposal to intercept the Deptford storm relief sewer that runs through Deptford discharging north into the Thames.
The site selected by Thames Water is a triangle of green, open space—the Crossfield amenity green, which is bounded by Coffey street, Crossfield street and Deptford Church street. For those who do not know it, Deptford Church street is a major dual carriageway intersecting the Crossfield residential housing estate. Thames Water proposes at least four years’ work on the site, the permanent legacy of which will be four main ventilation columns at least 6 metres high, with associated control units and maintenance requirements. During the phase one consultation, the preferred site was Borthwick wharf foreshore, but for the phase two consultation Deptford Church street is the preferred site and the Borthwick wharf foreshore is put forward, together with the Sue Godfrey nature reserve in Bronze street, as an alternative.
We in Deptford cannot understand Thames Water’s change of plans, which will have a great impact on an exceptional area of my constituency. The phase two consultation site information paper identifies three reasons why Deptford Church street is now preferred. The reasons given are, first, that Deptford Church street has relatively good access compared to Borthwick wharf foreshore; secondly, that using Deptford Church street would avoid work to the Thames foreshore; and, thirdly that the potential effects on residents, visitors and business amenity would be less than with the alternative site.
On access, no traffic impact assessment is provided to enable comparison between the two sites, so how can we judge? On avoiding work on the foreshore, there is a particular paradox. The majority of the site selection assessments favour sites in close proximity to the river, with jetty or wharf facilities. Clearly, the Borthwick wharf foreshore would have a great advantage over Deptford High street, in that material and spoil could be delivered and removed using the River Thames. Furthermore, the alternative site is located at the point at which the combined sewer overflows are discharged into the River Thames. Intercepting the sewer at that point would capture the contents of the entire length of the sewer. Intercepting it further inland, at Deptford Church street, would leave a length of the sewer uncaptured.
Thames Water has provided no data on the number of people, households and businesses affected at both sites, so it is impossible to compare the sites. In addition, the impact on St Joseph’s Catholic primary school on Deptford Church street is direct and severe when compared to any comparable community impact resulting from the use of the Borthwick wharf foreshore. A number of businesses will be directly affected by the use of Deptford Church street, while Borthwick wharf and the adjacent Payne’s wharf are both vacant.
Let me turn to the issues specific to the Deptford site chosen by Thames Water. There are two primary schools close to the proposed site: St Joseph’s Catholic primary school is opposite the site, and the new Tidemill academy is close by. As I say, the proposed works will take at least four and a half years, which represents most of the period of primary school attendance. That area of Deptford appears in the top 10% of areas in the country in the index of deprivation, making primary education of paramount importance. Both indoor and outdoor learning will be impacted by noise and air pollution.
Fire evacuation for St Joseph’s during the period is of concern. The school requires an off-site space near the school for 260-plus children and 25-plus staff, and they need to reach it quickly and safely. The site currently used is the green space that Thames Water proposes using for its shaft and associated construction works. No impact assessment on the school and its fire regulations has been offered.
Sited alongside the green is the grade-I listed St Paul’s church, the single most significant listed building in Lewisham. The proposed shaft and associated building works directly affect the setting and structure of the church, the boundary wall to the church cemetery, which is listed in its own right, and the grade-II listed railway viaduct to the south. It is therefore not surprising that English Heritage has expressed a preference for the alternative site to the Deptford Church street site, as there would then be less impact on heritage assets in our area.
The effects of the disruption to traffic patterns would be numerous, and the disruption would cause congestion and danger. The proposal involves closing the two northbound lanes of Deptford Church street; the two southbound lanes would provide one lane in each direction. Again, no detailed traffic modelling has been provided. There could even be emergency vehicle access restrictions associated with the traffic management measures along the proposed construction vehicle routes. Bus lanes in both north and southbound directions would be temporarily suspended, yet the width of the southbound carriageway is insufficient to accommodate heavy goods vehicles and buses in a two-way traffic scheme, particularly as Deptford Church street is on the borough’s oversized vehicle route.
There can be no doubt that the proposed works will impact on existing businesses along Crossfield street, particularly given that access, both vehicle and pedestrian, could be disrupted and restricted. The construction vehicle movements would have a highway safety impact in Coffey street, particularly for those accessing St Paul’s church, and when the movements coincide with St Joseph’s school’s arrival and departure times. Narrowing Crossfield street would have an impact on the commercial units on Crossfield street, particularly in relation to deliveries and servicing. A further raft of transport concerns have been raised by Lewisham council in its formal objections to Thames Water, but they are too numerous for me to go into now.
Dame Joan Ruddock
I am most grateful to my right hon. Friend for that intervention. I will now slow down, as I know that he is desperate to be able to speak in the debate.
Overlying all the concerns that I have outlined is an aspect of Deptford that has been completely neglected. Planning consents have already been given for the construction of thousands of new homes in the immediate vicinity of the Deptford Church street site. Work is already under way and the nearby Convoys site, which has a footfall—this is quite amazing—equivalent to the whole of the south bank, is expected to be redeveloped over precisely the same period as the Thames tunnel. This is a prescription for chaos. It is particularly unfortunate because Deptford has enjoyed a prolonged period of regeneration led by Lewisham council, financially underpinned by the Labour Government and supported by a number of private sector partnerships.
Lewisham is the 12th most densely populated local authority in the UK, and my constituency the most dense of all. As a consequence, every small piece of open space is greatly valued and provides essential green lungs for the city. The Crossfield amenity green will be made unavailable and inaccessible for at least four years in an area of very limited open space.
Lewisham borough’s core strategy emphasises the importance of improving connectivity throughout the area for pedestrians and cyclists. The recently completed links project from Deptford high street through to Margaret McMillan park, as well as the work on Giffin square, the Deptford Lounge, Tidemill academy and Wavelengths, demonstrate the implementation of the council’s strategic aspirations for the area.
The completion of the Thames tunnel site works is not expected until 2021, resulting in an unacceptable delay to the delivery of the council’s strategic objectives for links to and connections through the area. Furthermore, Deptford high street is classified as a site of nature conservation importance in the adopted unitary development plan. If the borough were the local planning authority for this application, it would either refuse permission that had adverse impacts on nature conservation or, if development were considered essential, it would require an environmental appraisal that included methods of mitigation and proposals for compensation.
I appreciate the need for the Thames tunnel, so I would not be objecting to this site if I thought this was a case of simple nimbyism. It is not. There is so much at stake that we have to make the loudest and clearest objections on the grounds that I have outlined. Already 1,300 people, in an area where there is not a great deal of activism, have signed a petition opposing the use of the Crossfields amenity green. I support the measures in the Bill that will enable Thames Water to undertake a much needed improvement on behalf of all Londoners, but I| believe that it can provide the necessary shafts elsewhere with less damage than that which would result in my constituency. My plea to Thames Water is, in the words of the local campaign, “Don’t dump on Deptford.”
Mr Matthew Offord (Hendon) (Con)
I rise to support the Bill, as I have much experience of both South West Water and Thames Water, However, I must say that my perceptions of the two companies differ widely. They appear to operate at different ends of the spectrum: South West Water levies one of the highest surcharges in the UK and has the lowest number of consumers, while Thames Water levies one of the lowest surcharges and has the highest number of consumers.
The Bill is about a decade overdue. The shadow Secretary of State said that many of the problems are the result of privatisation, but that is an erroneous assertion. If we look at the value of the water companies before privatisation, we will see that Anglian Water was worth £357 million, North West Water £458 million, Severn Trent £476 million and Thames Water £558 million, but South West Water was worth a lowly £106 million. In general terms, at the time of privatisation South West Water had the lowest amount of assets per property, and since privatisation the company has invested about £2 billion, in 2007 prices, to bring its infrastructure to the same level as that elsewhere in England and Wales.
At privatisation, South West Water’s bills were about £50 higher than the national average. This disparity was exacerbated by the impact of the bathing water directive and, of course, the urban waste water treatment directive. As the Public Accounts Committee and the National Audit Office recognised in 1992, privatisation of the water industry was an unprecedented task, with 10 utility monopolies floated on the stock market at the same time after years of restricted investment and an obligation then to spend more than £24 billion in a decade in order to catch up. Any perception of failure now can be attributed only to the lack of governmental interest in the industry 10 years after privatisation and, in the case of South West Water, in the 19 years its consumers have had to wait for the Walker review.
If greater interest had been shown, one industry practice that is causing problems across the country would have been identified: the use of combined sewer overflows. CSOs are intended to act as release valves at times of higher operational use. When Sir Joseph Bazalgette first planned the sewers for London, he gave every person a sewage production allowance and decided the diameter of pipe needed to remove it. He then doubled that diameter. We should all be grateful that he did so; had he not, the smaller size of the sewers would have ensured that they overflowed in the 1960s.
However, the Metropolitan Board of Works said that the cost of Bazalgette’s plans was too high, so he proposed and installed the combined sewer overflow system. This ensured that when it rained the accumulation of rain water that enters the sewerage system can be released through the CSOs, taking the sewage with it. London’s current population is estimated to be about 8 million and rising. In a typical year, 39 million tonnes of untreated sewage is discharged into the River Thames with as little as 2 mm of rainfall. To put that in perspective, that is enough to fill the Royal Albert hall 450 times, and the discharges occur about once a week on average.
The emerging effluent contains not only sewage and storm water, but biochemical oxygen demand material, pathogens, nutrients, heavy metals, pesticides, oils and suspended solids. In short, London’s Victorian sewers can no longer cope, which is why London desperately needs the super-sewer, or Thames tunnel. The CSOs discharge into the river not only chemical and biological contaminants, but nearly 10,000 tonnes of litter every year, including toilet paper, wipes, sanitary towels, condoms, cotton buds and other flushable items. I know that the hon. Member for Hammersmith (Mr Slaughter) accompanied Thames Water on a trip, as I did, where he saw for himself the problems at the pumping station at Fulham. The hidden dangers of the effluent that goes into the river include pathogens, viruses and bacteria, such as E. coli, hepatitis A and faecal streptococci.
Due to the ebb and flow of the tide, it can take up to three months for sewage that has entered the uppermost reaches of the Thames to reach the sea. That is a problem in itself, but the persistence of infection is a real problem. Around 50% of typhoid bacteria are destroyed in an aquatic environment in one to three days, and 90% is destroyed in three to 13 days, but the most resistant can remain for weeks and retain their power of infection, which has an impact on not only the people who use the river, but those who live around it.
Mr Slaughter
The hon. Gentleman is making a powerful case, and he is right to say that I visited a pumping station, although it was the Hammersmith one. When most people think about pumping stations, they think that some form of treatment is going on there. On the contrary: a structure that is probably half the size of this Chamber fills up with raw sewage, which is then pumped straight into the Thames, and that happens on at least a weekly basis. Does he agree that it is highly irresponsible to say that we should clean up the Thames so that it is so clean that salmon can thrive and prosper in it? We need to clean it up because it is an essential health matter.
Mr Offord
I thank the hon. Gentleman for his intervention. I am probably aware who he is citing, and, having had conversations with the former leader of Hammersmith and Fulham council, I can assure the hon. Gentleman that we do not agree on this subject, though we may agree on many others.
The super-sewer in London is essential to ensure that the UK complies with European environmental standards and, most particularly, the urban waste water treatment directive. All British taxpayers are at risk of having to fund hefty EU fines if the UK is confirmed to be in breach of that directive.
It is not just London and Thames Water that need to take action, however. All water companies have a contract with their consumers not only to provide them with clean water, but to remove their sewage and to treat it responsibly, but that is not happening. The water quality of Britain’s beaches is being jeopardised by thousands of unregulated overflow pipes that dump raw sewage into coastal waters and rivers. It has been estimated that 3,500 pipes operated by water companies pump unlimited amounts of raw sewage into more than 80 rivers and along sections of our coastline. That comprises more than 60 operated by South West Water, including pipes on the River Torridge, which flows to a popular Devon beach; more than 250 outlets operated by Yorkshire Water, including sewage flowing into the North sea; sewage overflows on the River Don, where thousands of fish were killed by sewage pollution in 2006; and an overflow, operated by United Utilities near Manchester, which was blamed for polluting a fishery in 2005.
Dan Rogerson
The hon. Gentleman is making a powerful case for the need to be mindful at all times of how outdated sewerage systems can cause problems. People may be more accepting of occasional discharges during periods of very high rainfall, but he knows north Cornwall well, and if he considers the area of Trevone he may wish to look again at South West Water’s record on delivering its promises, because in that area discharges have been occurring several times a month, and the company has yet to take action. I have raised that issue with South West Water, and we hope to address it soon, but he is absolutely right that there is a problem not just here in London, but throughout the country.
Mr Speaker
Order. There is a worrying pattern developing whereby the erudition of interventions is equalled only by their length.
Mr Offord
I take it from that only that you would like me to talk for even longer, Mr Speaker.
I absolutely agree with the hon. Gentleman, however, and having had some experience as a lifeguard in Cornwall I have seen at first hand the problems that South West Water has caused. I intend to go on to address the points that he raises.
From my experience in Cornwall and elsewhere, I am aware also that there are 500 regulated sewer overflows on Britain’s beaches that, as the hon. Gentleman rightly says, are supposed to operate only after heavy rain. However, swimmers and surfers often complain, even to me, that the overflows operate more regularly to relieve pressure on sewerage systems that are said to be “at bursting point” by the various water companies.
Despite a £10 billion investment programme by water companies since privatisation, about one in four beaches still fails to qualify for the European Union’s top category. The investment has ensured that 96% now meet the lower mandatory standard, but this still means that a swimmer, surfer or scuba diver has a 14% chance of contracting a bacterial or viral infection, and that is simply not acceptable.
Every year the water companies factor into their operating costs the insignificant fines, ranging from a couple of thousand pounds to tens of thousands of pounds, that can be levied on them, and they know that it is cheaper to pay them than to ensure that their infrastructure performs within the terms of their licences. Water companies are labelled repeat offenders, as year on year they are fined for impacting the environment with unlicensed discharges of untreated sewage. Only last Friday South West Water was ordered to pay almost £40,000 in fines and costs for allowing sewage to escape into the River Dart near Galmpton in south Devon, after effluent entered the river last May and caused the closure of a shellfishery.
The 1976 EU bathing water directive is not designed to identify effectively the impacts on the environment from combined sewer overflows. It is useful in giving an indication of water quality over the bathing water season, but all that it really tells us is the water quality during 20 short periods over 140 days, and only in the most popular bathing zones, not at the points where water is most likely to be polluted, such as the mouth of a river or the nearest CSO on the beach.
The revised bathing water directive, which will come into force in 2015, will mean four years’ consecutive data being examined and water being measured against tougher standards. However, there will still be 20 samples, and many pollution incidents will fall between the gaps. I remain concerned that many CSOs are deemed not to have an impact on bathing waters, and so are licensed for even more frequent discharges—the licences do not contain a set figure.
The CSOs also discharge when a predetermined volume of water is being passed forward within the sewerage system. When that volume is reached, the CSO can be employed to release pressure from the system, resulting in raw sewage on beaches and in rivers more than 100 times a year, equal to the frequency in London. Those CSO discharges can also have an impact on the coastal environment. Our over-reliance on CSOs has resulted in the European Commission taking the UK to court over a breach of the EU urban waste water directive of 1991. The case has been heard, but we are still waiting for the judgment.
I support the Thames tunnel, the super-sewer or whatever we want to call it, for the environmental and economic benefits that it will achieve in London. The project is expected to add £70 to £80 to the average Thames Water waste water charge, which has been among the lowest in the country, and I recognise the problems that that would cause some people. Even with the Thames tunnel, however, Thames Water’s bill would rise only to the national average. The additional resources from the Government should allay some of the fears of the people whom colleagues have mentioned.
I also welcome the reduction for South West Water customers, but according to one estimate highlighted by the company itself, the cost of removing or further reducing the impact of CSOs in its region’s network would be about £500 million, which could add as much as £40 a year to the average bill in the region. If the Government propose to subsidise each South West Water customer by £50, the company should by its own evidence be able to afford to undertake that work from its current resources. I should like that to happen, particularly given the introduction of the new bathing water directive. Until that occurs, it is anathema for any Government to claim that we have bathing water of a high standard in this country. My experience, and that of other Members, has been that that is simply not the case.
Mr Ben Bradshaw (Exeter) (Lab)
I wholeheartedly associate myself with the final comments of the hon. Member for Hendon (Mr Offord).
I welcome the Bill, and I thank the Minister and the Secretary of State for introducing it. As my hon. Friend the shadow Secretary of State said, it goes a small way towards righting the terrible injustice that was done as a result of how the water industry was privatised, particularly in the south-west, in 1989.
As other Members have said, other people deserve credit, too. I thank the excellent public servant Anna Walker, whose year-long review in 2008-09 made recommendations, some of which the Government are now implementing. I also thank my right hon. Friend the Member for Leeds Central (Hilary Benn), who was the Secretary of State who commissioned the Walker review.
I also thank somebody else who has been named by a number of Members today—my colleague the former Member for Plymouth Sutton, Linda Gilroy. Linda worked tirelessly as a leading member of the all-party water group during her 13 years in this place. She was like a terrier with a bone on the issue—I remember seeing two Prime Ministers and several other Ministers scurrying away from her whenever they saw her approaching them in the Division Lobby, because they knew she would pin them against the wall to talk about water prices. She brought not just great persistence but huge expertise to the subject, and she helped to change minds. It is no exaggeration to say that without Linda Gilroy’s contribution, the Walker review would never have happened. We might have got there in the end, but we would have been much less far down the road. It is gratifying that Members in all parts of the House have paid tribute to her, because she is no longer in this place to smile on her legacy.
I would be grateful if the Minister could answer a couple of questions. What will happen at the end of the next comprehensive spending review period? Will further legislation be needed if the £50 rebate is to be extended beyond the next CSR period; and if so, how will the legislative mechanism be put in place to do that? Given that when the Labour Government considered this issue in the past there was a problem with European state aid rules, is he satisfied that there will not be such a problem with what the Government are doing?
Why are the Government implementing only part of the Walker review? Will the Minister assure us that the other bits will be implemented when the Government bring an all-singing, all-dancing water Bill to this House? I am a little disappointed that we will apparently not get such a Bill in the forthcoming Queen’s Speech, but I hope that we will during this Parliament. That is absolutely vital because, as the hon. Member for St Ives (Andrew George) said very clearly and convincingly, there is a desperate need for root-and-branch reform of the water industry.
The £50 cut in bills in the south-west is extremely welcome, but our bills will still be the highest in the country, and the cut will already have been wiped out by the time we get it owing to the increases in the current and forthcoming financial years, with a 5.7% increase in April.
Anne Marie Morris (Newton Abbot) (Con)
Does the right hon. Gentleman agree that despite the fact that the £50 cut will be impacted by high inflationary rises, those rises apply across the country, so one cannot say that we are worse off in the south-west, because we are still better off by that £50?
Mr Bradshaw
That is absolutely right. I am afraid that water customers across the country are paying the price for this Government losing control of inflation. The reason we are all facing these massive increases in the current financial year and the next is that inflation is out of control. We in the south-west are suffering like everybody else. However welcome the £50 cut is, it will already have been wiped out by the time we get it. People will not notice it because their bills will be no lower than they were before, as a result of the two years of increases that they will suffer this year and the next.
We must stop the culture of annual increases, and I hope that the Government will do that when they bring forward their full water Bill. The hon. Member for St Ives is absolutely right about this. We always talk about the water industry as though it were the same as the gas industry, the electricity industry and the other privatised utilities, but it is not—it is a monopoly private provider. Customers in the south-west cannot choose where they get their water from. Admittedly there is also a problem in the energy industry, but people do have a limited choice of provider for their gas and electricity.
The other reason it is completely wrong to put water in the same category as the other privatised utilities is that water is plentiful. We live in a wet country; it rains. If it stops raining, we might as well all pack up go home, but that is not going to happen—we hope. Water is not like gas, electricity or oil, where the resources are finite. The Government must challenge the assumption that water prices should always rise. Given the advances in modern technology, there are strong arguments for water bills coming down rather than going up. I ask the Minister to look carefully at the structure of the industry and the strength of the regulator. For the reasons that the hon. Member for St Ives and I have mentioned, there is a very good argument for the water regulator being much stronger than the regulators of the other privatised utilities.
The Prime Minister is fond of making speeches about crony capitalism; well, he can show us his mettle by dealing with an industry that is a private monopoly where customers have no choice. The industry has its hands round their necks, they cannot go anywhere else, they are fed up, and they do not understand the inevitability of year-on-year increases.
Of course we have to improve our outdated infrastructure, and a lot of work has been done on that. However, when I hear industry spokespeople and Ministers saying that we are about to face a terrible drought, worse than that in 1976, I wonder why the industry and the Government have not looked more carefully at the idea of water trading, which I think has been mentioned by a Government Member. Why do we not pipe water from the Severn catchment area, where it is plentiful, to the Thames catchment area? That could be done quite cheaply. It is not hugely expensive or terrible for climate change, as the Secretary of State said in her opening remarks. A similar thing could be done across the country. My right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) mentioned reservoir capacity.
There is no reason why in this country, which has a cool, temperate climate with plenty of rain, we should pay such high prices for our water. We should not accept inexorable rises year on year, particularly when families are feeling the pinch. I share the admiration of the hon. Member for St Ives for the current management of South West Water. However, in the increases that that company and the rest of the industry have asked for in this financial year and the next, they have not shown the sensitivity that they might have shown to the state of household finances.
Richard Benyon
I urge the right hon. Gentleman to read our water White Paper, which addressed many of the points that he is making. It was long overdue in doing so. It is important that water companies talk to each other about bulk trading, moving water and the connectivity between water company areas. That is precisely what the White Paper sought to achieve. It addressed a long-standing problem.
Mr Bradshaw
I look forward to the recommendations in the White Paper being implemented in legislation. I hope that that will happen in the next Session and that we will not have to wait another year or more, but there is talk of the legislative process being clogged up by House of Lords reform. We need this legislation as soon as possible to address the problem once and for all.
I will end my remarks on this point. The Bill is a welcome development, as far as it goes. Of course the £50 cut is welcome, regardless of the fact that it will be wiped out by the big increases in water bills this year and next. However, it is only a temporary solution to the problem in the south-west and nationally. Although it will assuage the public anger in the south-west over the cost of water bills temporarily, if those bill continue to go up every year, this bit of help will be but a distant memory in a few years’ time. I address my final remark as much to those on the Opposition Front Bench as to the Government. Whoever is in power has to grasp this nettle once and for all and reform this industry properly, so that it operates for the benefit of the consumer and the customer.
Anne Marie Morris (Newton Abbot) (Con)
I congratulate the Government, because they have done an extremely fine job. Frankly, I find the comments about the £50 reduction being cheeseparing a bit sad.
I was interested to hear the comments of the right hon. Member for Exeter (Mr Bradshaw) and I agreed with him on many points. He said that he is concerned that the £50 will be wiped out by price rises. As I said, there will be price rises across the country. Is he saying that the Opposition would have provided more money to give a greater subsidy? If so, how would they have funded that? I will leave him to ponder that.
Gavin Shuker (Luton South) (Lab/Co-op)
The hon. Lady asked about Opposition policy. We support the £50 payments in the south-west, but are looking for further action on water affordability across the piece, which this Bill does not provide.
Anne Marie Morris
Like the hon. Gentleman, we are all looking at how we can deal with the affordability issue. However, the Bill is intended purely as an academic piece of legislation to allow the £50 reduction, not to address the whole gamut of water issues, which is substantial. I welcome the £50 reduction and think that the 710,000 householders who will benefit from it will be absolutely delighted.
I will raise some technical points, because this is a technical Bill. I will not talk about the big picture of water issues. I will be grateful if the Minister considers the points that I raise in his winding-up speech, whether that be today or on another occasion. My concern is that the £50 is aimed at the domestic user as opposed to the non-domestic, commercial user. I understand why the Government are trying to be careful with their resources, but I emphasise that including the non-domestic, commercial user would mean an extra £3.5 million, which falls within the £40 million ceiling. I recognise the Government’s concerns, but there is a potential issue with domestic households that pay through commercial intermediaries.
For example, park homes cover a significant number of residents throughout the south-west, and the rates are effectively levied against the park home owner. I am therefore concerned that those living on park home estates will not receive the benefit. There is a similar problem with sheltered housing. I am worried that subsection (7) of proposed new section 154A in clause 1 does not fully address that. I would be grateful if the Minister considered that because I cannot believe that anybody feels that those individuals should be excluded from the benefit.
My second technical concern relates to the debate about WaterSure and support for those who cannot afford to pay their water bills. I will not go into the debate because it is something for the water Bill. My concern is technical because, if the Government decide to support the Consumer Council for Water’s view that WaterSure should be nationally funded, I am not sure whether subsection (2) of proposed new section 154A would enable them to take that position. I would therefore be grateful if that were reviewed.
Otherwise, I think I will make history by making the shortest speech of the afternoon and simply say, “Well done Government—huge benefit! £40 million should not be sniffed at.”
Alison Seabeck (Plymouth, Moor View) (Lab)
It is a great irony for us in the south-west, surrounded by water as we are, that we have the highest water bills in the country. I represent a coastal city that sits on three rivers, and the injustice of the expense of water bills in Plymouth aggravates almost everyone I know in my constituency and the wider region.
Water bills in the south-west are, on average, 43% higher than in the rest of the country and we have 200,000 households under water stress—paying, as we have heard several times, more than 3% of their income towards their bills. A Government Member said that there were more people in his region to which that applies, and that is true, but we have the highest percentage of people in that position. Those people are pensioners and families with high and essential water needs. They are often supported through WaterSure, but only about a third of those eligible get that help.
People have been paying through the nose for a basic commodity. I accept that it needs to be valued because, with climate change and other pressures, it could become more scarce. If we do not prepare well for the decades and century ahead how we manage the future costs of the necessary work and, from my perspective, prevent a repeat of the mistakes that were made when water was privatised and the south-west paid a disproportionately high price, we will all fail water bill payers. The Bill clearly tries to set out some ground rules in that regard.
The high cost of water is not a new problem, but it has dominated concerns in Plymouth throughout my time in Parliament and for many years before that. It has posed problems for Governments of all political persuasions and it will clearly continue to exercise the current Minister in the months and years ahead.
As we have heard, for many years, I and other south-west Members have campaigned to address the higher bills left us by privatisation. The detailed Walker review did, to Anna Walker’s credit, much of the groundwork for the announcements that followed, including the Chancellor’s announcement of the £50 refund for households in the south-west, and ultimately led to the Bill.
Through parliamentary questions, Adjournment debates and the work of the all-party parliamentary water group, which was initially chaired by Linda Gilroy, who has rightly been lauded in the Chamber today, then by the hon. Member for Thirsk and Malton (Miss McIntosh), and then by the hon. Member for St Ives (Andrew George), Members of all parties have sought to keep the issue high on the agenda.
At a time of soaring utility bills, high inflation and stagnant wages, action on water bills is welcome. However, it needs to be meaningful and lasting to make water bills more affordable in the long term. The continuing upward pressure on the south-west, despite the refund, will mean that many families dip below the poverty line. It is not acceptable to increase the number of children and pensioners in poverty. Although I welcome any help that the Government are able to give—it would be churlish not to welcome the £50—it is small relief from ever-rising bills. This is not the end of the debate and the problem extends beyond the south-west.
That said, all of us who live in and represent constituencies in the south-west—I should declare an interest as a South West Water bill payer—have a duty to ask whether the Bill will effect meaningful and lasting changes. Sadly, my conclusion is that it will not. There is a strong view that this gain will be temporary, and that even with the changes, water bills in the south-west will be back at their current levels within two or three years, for the reasons I have set out, with wages stagnant and inflation high.
Will the Minister look at the issue of water companies overcharging for surface water drainage, which affects water bill payers specifically in the south-west, but also more generally? Very many households do not connect their waste water into the sewerage system and water companies do not have complete data on where those properties are—I have been out in my patch trying to identify them. In Plymouth, no council data exist for the 1950s from the plans, and it is believed that later plans are inaccurate in terms of the connection of mains sewers to properties. It is wrong that the default position is to assume that people are connected and charge them. As a result, the onus is on the bill payer or house owner to understand exactly where their water goes and whether they have a direct connection into the mains sewer. That adds further unfairness to the system, and I ask the Minister to address it at some point.
I wholly support the comments of the hon. Member for Newton Abbot (Anne Marie Morris) on park home owners. Many people in Glenholt park in the north of my constituency are anxious about how the proposals will play out for them, and I am afraid that not all park home owners are responsible or willing to be generous with the people on their sites.
A number of related issues, including the adoption of private sewers, will impact on the cost of water nationally, and they need to be understood with regard to the Bill. I note that the explanatory notes state that the Bill gives the Secretary of State
“a power to give financial assistance”
with regard to the
“construction of…sewerage infrastructure”.
I assume that that is partly designed to reassure Thames Water bill payers on the linked new ring main sewer. However, civic schemes are not mentioned in the Bill, so when the Minister winds up, will he tell the House whether assistance could be applied for by a water company that finds it has a much more extensive private sewer commitment than it believed it had inherited? The Minister will know—we have written to each other on the subject—that we are unclear what the burden is likely to be for some water companies in that respect.
The Government need to introduce measures to tackle long-term water affordability, not just in the south-west but nationally, and they should consider the feasibility of a national social tariff. We have heard that from other hon. Members and I hope the Government will consider the proposal.
Anna Walker, who dedicated a whole chapter to the injustice felt and experienced in the south-west, set out a number of main challenges nationally, including the cost that other bill payers incur as a result of bad debt—it is around £15 per person, as we have heard. She looked at the implications of metering and considered how future costs should be met, acknowledging some of the issues that we have debated. She was also clear that it was appropriate for water customers to pay for improvements to the quality of water and the disposal of sewage, because they ultimately benefit from such improvements, but she was also clear that customers should be fully consulted before the Government agree to such changes to avoid the accusation of imposing a stealth tax. I believe that the proposals of my hon. Friend the Member for Wakefield (Mary Creagh), the shadow Secretary of State, on parliamentary oversight of specific schemes, should be debated seriously in Committee on the Floor of the House.
The Bill will be a waste of time if, within a short period, the problem of affordability comes back on to the agenda, not just in the south-west but nationally, and if customers feel that they have not had input into the reasons for the higher bills that they pay. The Government will do them no favours if they simply appease us in the south-west who have kicked off over the years and made a lot of noise about our bills, and they will miss an opportunity not only to consider water affordability in a more strategic and inclusive way but obviously to tackle the historical injustice in our region.
Whatever the new regime, basic standards must apply, but that is not entirely clear from the Bill, and it needs the appropriate regulation, which also is not entirely clear. As has been said, the House must be able to consider every proposal on its merits, but that is not in the Bill either. So more work needs to be done. Given the expertise and experience of Members across the Chamber, I hope for further and more detailed debate in the short Committee stage because it would be of benefit to the Bill.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I am grateful for the opportunity to take part in the debate and to follow the hon. Member for Plymouth, Moor View (Alison Seabeck), who rightly concentrated on matters in the south-west.
May I say, as I have said in other policy areas, that as a London MP I fully support the Government’s proposal, derived from a Liberal Democrat election commitment, to assist people in the south-west? Over the years, I have campaigned with colleagues to improve water quality in the south-west and to clean up sewage on its beaches—I and my hon. Friend the Member for St Ives (Andrew George) helped with the Surfers Against Sewage campaign. I am also clear that there is a collective responsibility for Members across the UK to legislate to end disparities in water prices. As a London MP, therefore, I do not resent our legislating to assist colleagues in a beautiful part of the country where bills have been disproportionate compared with ability to pay and the justice of the case.
Sheryll Murray
Does the right hon. Gentleman agree that, from a south-west perspective, this is truly a cross-party initiative? I cannot think of another example where every major political party has campaigned on the water issue.
Simon Hughes
I absolutely accept that. I was not disputing the cross-party nature of the campaign. I was trying to support my hon. Friend and colleagues across the House by saying that those of us who do not come from the south-west have supported them too.
A pledge made by the Liberal Democrats bas been honoured, and a pledge made by the coalition Government has also been honoured—generally, then, this is a good proposal.
The second part of the Bill is the one that preoccupies those of us with London constituencies and constituencies served by Thames Water. It is the largest water company in the country and covers a significant number of colleagues with constituencies in the Thames valley as well as in the capital. That relates to clause 2. I support the general proposal that the Government should be able to assist major infrastructure projects, and I am aware that last year and the year before, the Chancellor rightly identified a set of infrastructure projects around the country to get people back into work. Good, long-term, viable infrastructure projects are a good thing, and we should support them.
There is always a danger, however, that infrastructure projects start with one price tag but end up with another. When the Thames tunnel scheme to deal with sewage in the Thames—the system built in the Victorian era by Bazalgette is no longer fit for purpose—was first proposed, the general cost was said to be between £1 billion and £2 billion, but everybody now accepts that, at 2011 prices, the Thames tunnel would cost £4.1 billion or more. That excludes financing costs, as the notes to the Bill explain, but includes £900 million for risk and optimism bias. So this is a big project that will cost a lot of money.
In 2006, the water regulator warned potential buyers of Thames Water that it would not allow them to saddle the company with high debt levels and pass financial risk on to the customers. I want to concentrate my remarks on the financing, and the financing structure, but I also want to place on the record my position on the project. I have supported the general position that we need to deal with the infractions on air quality and water quality in London that have brought us before the European authorities. That is what we are facing in relation to water and air quality; therefore, we need to act.
I have started from the proposition that the Thames tunnel, as proposed by Thames Water, is the right answer. When it was endorsed by the last Government it had my support, but I am increasingly troubled that it looks as if it may not be the answer that everybody once thought it was. Therefore, when I recently made a full submission as part of the consultation process, I asked—I am also about to write to the Secretary of State to ask this question, after this debate and after a meeting on Monday—whether, at least between now and the point in the normal timetable when Thames Water might be in a position to make an application, there could be a final independent review of the viability of the current project.
Those driving the project have an interest—Thames Water has an interest, and there are others with an interest. It is important not just to have a battle between those with an interest in favour and local authorities such as mine—[Interruption]—and that of the hon. Member for Hammersmith (Mr Slaughter), who is about to intervene on me—which, because of the effect on their constituents, have become opposed. At the moment we have a dialogue of two different interested groups, and I think we need to get some people involved who do not have a vested interest. There are people in the European Commission who do not have a vested interest, there are people in international environment agencies who do not have a vested interest, and there are also people who do not have a price interest. Before they commit their support to a project that is rapidly increasing in cost—I will say why that is a danger for the Government, as well as for everybody else—I think the Government would be wise to commit themselves to one last review. I hope I can persuade colleagues over the next few weeks that this can be done in a way that is compatible with the timetable in general terms.
Mr Slaughter
The right hon. Gentleman took part in a Westminster Hall debate last September—less than six months ago—at which I think I was also present, when he said:
“The Thames tunnel is the best direction.”—[Official Report, 14 September 2011; Vol. 532, c. 316WH.]
Is he saying that he has changed his mind since then? If he is saying that he has reservations about cost or individual sites, I would say that I probably share them—if I get a chance to speak, I will probably address them. Is he, however, saying that he has now changed his mind about the project as a whole?
Simon Hughes
The answer is that there is a proposal on the table for what is called “the full tunnel”. I am not as certain now that what is called the full tunnel is the right solution. There is already the tunnel being built in the east—that is well under way—and there is an argument for a smaller tunnel and other measures. I just think we need to satisfy ourselves before we go for the full tunnel that that is the right solution. There are also site issues, of course, but I regard those as secondary, although in my constituency, as in the hon. Gentleman’s, they are hugely important to our constituents, not least with a major site being planned in the middle of my constituency affecting thousands of people, thousands of homes and two or three major schools.
Mr Slaughter
The right hon. Gentleman is being very generous. When he says “not the full tunnel”, I should point out that the context of his remarks last September was his objection to the wholly inadequate Selborne report, which proposes a partial tunnel—a disastrous tunnel—in west London. I hope he is not saying that he supports that.
Simon Hughes
Rather than have a long dialogue, I will let the hon. Gentleman have a copy of my submission to Thames Water later, so he can read my full views. However, let me summarise, as I did in my submission:
“I am now clear that, since the end of the first round of consultations in 2011, the arguments for a review of the full tunnel proposal and possible alternatives have substantially increased. There has been a growing amount of opposition against the full tunnel from my constituents and other constituents in greater London.”
I go on to say that we should therefore give that argument greater weight.
Let me turn to the substance of the financial issues, which are dealt with in this part of the Bill. Back in 2007, a memorandum was submitted to the Treasury Committee by a Mr Martin Blaiklock—consultant, infrastructure and energy project finance—on the subject of Thames Water specifically, but also on equity-type investment generally. He said:
“Over the last 12 months I have be keeping a particularly close watch on the activities of Thames Water, not least because I am a Thames Water customer, but also because it is one example,—and a good example,—of Private Equity involvement with public services. The case of Thames is significant as it is the UK’s largest privatised water utility, serving the Capital and 13 million customers, and also a monopoly service provider...Thames Water Utilities Limited…is the utility licensed by OFWAT. However, Thames Water Utilities Limited is 5 or 6 times removed from the controlling investor group…of whom a number are based offshore in Luxemburg…Is this the ‘transparent’ corporate structure expected of a UK monopoly public service provider?”
I cannot put this on the record, but there is a helpful graph in that memorandum to the Treasury Committee showing Thames Water Utilities Ltd at the bottom. Above it are lots of holding companies, including Thames Water plc, Thames Water Holdings plc, Kemble Water Ltd and Kemble Water Holdings Ltd, and intermediate holding companies. The list goes right up to non-Macquarie investors and then to Macquarie, and shows the purchase of part of the company by the Chinese state finance organisation and others. That shows an organisation that does not do transparent finance. We therefore need certain safeguards to be put in place to protect any taxpayer investment and Government support.
The company also has considerable activity in the Cayman Islands. I am not sure whether that is the most appropriate way for a major utility company to spend its money. The tax arrangements of Thames Water, having been bought by Kemble, have involved setting up a subsidiary financing branch in the Cayman Islands, based at Ugland House, which has 18,856 other businesses registered at it. There is a real question of transparency for Thames Water, and the Government need to have a public debate on it. We need to look at this matter in Committee and on Report to determine exactly how the financing arrangements are arrived at. There is at the moment no proposal from Thames Water as to how it will raise the £4.1 billion to finance the project, and I am concerned that the cost might ultimately be borne by the Thames Water ratepayer, which might not provide the best value for money for our constituents who pay their bills.
Mr Blaiklock concluded:
“There is no doubt that the introduction of Private Equity-type investment into the privatised UK public services has sharpened up the financial management of such enterprises. However, such Private Equity investment has also
(a) introduced a lack of transparency in the control, governance and, therefore, the accounts of such utilities. Some utilities, such as Thames Water, are effectively owned and controlled offshore, possibly by companies with limited liability and domiciled in tax havens. Corporate information is, not surprisingly, hard to come by for such Private Equity investments! Hence, in the event of operational failure by such utilities…it is quite possible that the controlling company and its directors cannot be called to account, notwithstanding OFWAT’s Conditions P and F licensing requirements…
(b) increased the leverage and, thereby, decreased the financial strength of such utilities, at the expense of customers and the security of service; and
(c) introduced corporate uncertainty. The investment horizon for Private Equity is traditionally three to five years, which is short for public service utilities, which require long-term capital and financial stability. The only balancing feature has been the increased intervention, as direct investors, by pension funds and life insurance companies—as principals, not clients—albeit some are offshore owned and controlled. Such investors have longer time horizons and are ideal investors for such public service utilities.”
The other activity that is certainly questionable is the way in which Thames Water has managed its affairs in recent years. Extremely high dividend payments have been made over the past years, representing a direct transfer of income and capital out of Thames Water to private investors. At the financial year end in 2011, Thames Water made £225.2 million in profits, but it distributed £271.4 million in dividends. This high dividend policy is a recent development, but it is not limited to last year. In 2010, the unadjusted common dividend payout ratio, in percentage terms, was 141.5%—that is, nearly half as much again, on top of profits, was paid out. The figure for 2009 was 126.7%—a quarter as much paid out again as was made in profits, and in 2008, 61.3% was paid out. That contrasts with Anglian Water’s dividend ratio of 81.%, Southern Water’s 58.7% and South East Water’s 48.4%. The policy of paying higher returns to investors started immediately after the company was purchased by the consortium behind Kemble Holdings in 2007. The company paid out £535 million in dividends in 2007, and £233 million in 2008.
All this has happened while the company has vastly increased its debt position. In the financial report of 2008, the change in the amount of debt held by Thames Water was more than £1.5 billion. Ofwat warned the bidding companies to keep a good debt ratio, advising that 45% would be appropriate. The ratio is now at 80%. We—Parliament—and the Government need to ask why Thames Water has increased its debt holding by so much when it is known that it has an extremely large capital project coming up, which will need a substantial amount of borrowing.
My question to my right hon. Friend the Secretary of State is whether the Government have investigated whether Thames Water would have been able to make a greater contribution to any scheme from its own funds if it had not spent the last few years borrowing money in order to pay itself. Both the financial policy and the tax arrangements of Thames Water seem to me to be appropriate for us to debate.
My conclusion is that we might need to insert conditions into the Bill regarding any financial arrangements whereby the Government underwrite the borrowing by Thames Water, making it clear that they should be transparent, ethical and accountable so that Thames Water users, those of us who represent people in the Thames Water area and everybody else in the country can understand that there has been some pretty strange organisational finance going on in the last five years. We must make sure that the objectives do not feather the nests of the equity investors rather than benefit Thames Water users, so we must ensure that we have the right financial vehicles if we are to go ahead with infrastructure projects like this one. We will have plenty of opportunity to debate the project itself on other occasions, but I hope that the Secretary of State will be sensitive, as I know the Treasury is sensitive, to these real concerns about how Thames Water runs its financial affairs.
Alex Cunningham (Stockton North) (Lab)
I would like to talk about the Bill’s impact on people in north-east England and to outline some of the responsibilities that water companies, which make billions of pounds of profit between them, might need to be compelled to fulfil, although I acknowledge that some do the right thing—part of the time, at least.
I would also like to take the opportunity to invite those who want a consistent and high-quality water supply to come to the north-east—industrialists, manufacturers, green revolution companies, call centres, breweries and individual people would all be made welcome in the region. My message to allcomers is clear: “You need water; we’ve got it”—and I would encourage anyone needing water for their businesses to get in touch with Tees Valley Unlimited, and we will work with them to develop their business without fear of ever having to do without their water supply.
What of domestic supplies and customers? About 370,000 people in the north-east spend more than 3% of their income on water, which is why I am glad that the Opposition will introduce a new clause to enable the introduction of national minimum standards for water company social tariffs. Such tariffs will ensure that financial assistance is provided to those most in need across the country—not just to those in the south-west, about whom we have heard so much. It is worth noting that the south-west has almost exactly the same number of households paying a disproportionately large part of their income for water supplies.
Some Members have talked about water meters, and I would encourage all individuals and families to explore using them. My personal saving in my home came to about 60%, so people should look at this option to solve some of their financial issues. However, I recognise that that is more difficult for families than for a couple living in a larger house.
There has been a lot of consensus around the place today, but it saddens me to say that the Government are taking a similar approach to that being taken to the big six energy companies. The Government seem incapable of taking on the powerful vested interests of the large water companies and are set to miss the opportunity to make a real difference with a more comprehensive Bill that would put pressure on companies to deliver for our communities the services they deserve at a reasonable and fair cost. From April, water bills will rise by an average of 5.7%, which is a huge amount, given that for many ordinary families pay freezes and job losses are the name of the game. Such a hands-off approach from the Government is truly shameful and it is even more appalling when people are already contending with a 20% increase in energy bills over the past year.
More important than that, however, is the following question: did we really hand over or sell our water assets to allow companies to make huge profits, borrow on the back of those assets to pay dividends and still fail to provide enough water for people in the south to water their gardens if they choose to do so? I am particularly concerned and surprised about the proposals in clause 1 to allow the Secretary of State to provide financial assistance—taxpayers’ money—at the stroke of a pen if she
“considers it desirable to do so”
to a privately owned water or sewerage company that may be failing in its basic duty to deliver an adequate water supply all year round in parts of our country. I do not know how much cash the Secretary of State will have to splash around, but providing a blank cheque at taxpayers’ expense and at a whim to any water company she likes, whenever she likes, is absolutely not what is needed to ensure that ordinary people get a fair deal on their water.
That issue is all the more pressing given that huge areas of the south and east of England are suffering their worst drought in almost 35 years. One recently proposed solution is shown in the decision by a utility company to draw up plans for a £2.6 billion pipeline to send water from the north to the drought-hit south. United Utilities has revealed plans for the pipeline, but I must question whether it is really the answer. It would be incredibly expensive to transport water from north to south, and I know who will end up meeting the cost.
The Environment Agency last looked at the idea of a pipeline in 2006 and estimated that it would cost up to eight times more than developing the existing infrastructure. Water is heavy—1 cubic metre of water, which is what one person uses a week on average, weighs a full metric tonne—so the energy required for the construction, development and operation of large-scale water transfer systems also adds further to carbon emissions, which lead to climate change.
The north-east of England has significant infrastructure for industrial and domestic water supply. One of Europe’s largest man-made lakes, Kielder water in Northumberland, was created to supply water to the industry of north-east England, much of it on Teesside, in and around my constituency. Sadly, the growth of some of the industries, such as steel, that are heavily water intensive did not materialise. As we have seen, the north-east economy has been rebalanced in recent times, with different industries and a wider range of jobs. That was done under the previous Government and, of course, the work was led by the now defunct One North East regional development agency.
In recent years, Kielder water has come into its own, with underground springs ensuring that it always remains at a high level, regardless of the prevailing climate. That means that while the south of England is often forced to implement drought strategies and hosepipe bans, north-east England enjoys plentiful water supplies. People in the north-east have, of course, had to pay the price for an abundant water supply, which is now managed by Northumbrian Water. Unlike other companies, it has pegged its price rise to inflation this year. Over the years, however, consumers in the region have paid higher bills to finance this reservoir, and given such an abundance of water there are surely no excuses for a hike in prices when there is no need for investment in reservoir infrastructure. Northumbrian Water does do the right thing; it does invest in works and it works hard for its communities. We all like the idea of reduced bills, but we also need investment and the constant water supply that we have in the north-east. Indeed, with such an abundance of water, instead of transferring large amounts of water to the overcrowded and drought-ridden south, would it not make both environmental and economic sense for industry to move to the north-east? I have already issued the invitation: “Come north, we have all the water anyone needs.”
If we are going to go down the north-south route, I want to know what the benefits will be for people in north-east England. They have paid for the investment—will they get a dividend through reduced bills when their water is moved elsewhere, if that ever happens?
On a different matter, is it not an absolute disgrace that in England and Wales leakage rates, at about 25%, are higher than a decade ago? Some private companies, now exporting their profits to their shareholders overseas, are failing in their duty to create 21st century services for our people. Water companies might have done well on investment, but they have done so at the expense of consumers.
What action will the Secretary of State take, for example, to cut Thames Water’s obscene leakage rates? The company loses 30% of the water it puts into the mains—200 litres a day for every customer—yet it has posted profits, in what could be considered a bad year, of £208.5 million. That money could go a long way towards investing in improvements and helping the company to move towards the record of Paris and New York, which lose only 10% in leakage, or perhaps, one day, to equal Singapore, where the leakage rate is about 5%.
I have already personally dismissed the idea of the water-rich north sending our supply south, but water companies in the south could help themselves, each other and consumers. Last December, the Environment Agency told Ministers that the myriad small water companies in south-east England could save £500 million by 2035 if they shared supplies. Instead, the companies were planning to saddle customers with a bill of £760 billion for unnecessary new reservoirs. What will the Government do about that? Will they introduce legislation to deal with some of those matters?
Will the Government make any moves to force the private water companies to take the right action, stop the leaks, share supplies around the country where necessary and deliver for consumers? I do not think the Bill demonstrates that the Government have a long-term vision for affordable water supplies or the industry as a whole, and I only hope Ministers will take action to sort it out. My message tonight is: “If you want water and you’re an industrialist, come to the north-east.”
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
It is a delight and a pleasure to participate in this debate, particularly as I come from a city that has Burrator reservoir, which was built by Sir Francis Drake and is in the Torridge and West Devon constituency. I also want to thank hon. Members for the tone of the debate. It has most certainly been a cross-party debate and we have been able to support what is being proposed. I thank the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon), who came to Plymouth earlier this week to support south-west Devon and to visit Plymouth Marine Laboratory, a premier marine scientific research organisation. He was able to talk about how the cost on top of the water rates is £15 for those people, because of bad debts.
I am aware that the issue of water rates has been very important, particularly in my constituency. I pay tribute, oddly enough, to my predecessor, who was the Labour Member of Parliament for Plymouth, Sutton and campaigned very effectively along with the hon. Member for Plymouth, Moor View (Alison Seabeck) to ensure that this message was heard. I have become aware in the course of today’s debate that we have all worked together to achieve this, but that it is this Government who have delivered the ability to ensure the £50 provision. We have all worked together as Members of Parliament and, more importantly, we have made sure that 90% of the Members of Parliament in the south-west have been sending a clear message, too.
There has been an enormous amount of regeneration in my constituency, but in 1997 St Peter’s ward was one of the poorest wards in the whole country. People in the ward have been challenged to ensure that they can meet their water bills. The £50 reduction is welcome, and I thank my hon. Friends for the hard work that they have done, but the 4% increase—
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Delegated legislation
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BUSINESS OF THE HOUSE (5 March)
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BUSINESS OF THE HOUSE (6 March)
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Private Hire and Hackney Carriage Vehicles
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Richard Fuller (Bedford) (Con)
I was prompted to call this debate to discuss the safety of private hire and taxi drivers and their passengers as a result of recent events in my constituency—the death of a constituent who was a private hire driver and an assault on another driver. More broadly, I want to encourage the Minister to make it his priority to transform the perception, and too often the reality, that private hire and taxi drivers are given second-class status in our public transport system when it comes to their safety. I also wish to highlight to the Minister some of the impediments to the safety of passengers that have been highlighted to me by Am I Safe?, a developer of applications to help passengers to verify at the point of hire that a vehicle is legitimately licensed. Those impediments arise from the complex regulatory structures, differing rules, and inconsistent interpretation of access to information rights that arise from the various licensing authorities.
Private hire and taxi drivers are a vital part of our public transport system, and when it comes to their physical safety and the safety of their property, they deserve to be afforded the same protection as our bus drivers, airline staff and railway employees, but they are not. In many towns such as Bedford, if a person has been out for the evening with their friends, private hire vehicles and taxis are often the only answer to the question, “Who will take me home tonight?”, yet drivers routinely have to deal with people who can be abusive, and may be under the influence of alcohol, drugs or both. A journey may end with someone vomiting in the vehicle or running off without paying. Private hire and taxi drivers run those risks—not routinely, of course, but much more frequently than many of the public would appreciate.
Let me turn to recent incidents in Bedford. As Adam Thompson of the Bedfordshire on Sunday newspaper reported,
“Fayaz Alhaq…who runs AGS Cars in St Peter’s Street, Bedford, says his employees are ‘running a gauntlet’ every weekend and have a job ‘as dangerous as the police’. His words come after 61-year-old grandfather Mehar Dhariwal of…Kempston…died…having been assaulted the week before while working.”
Mr Thompson’s report went on:
“Only last month Bedfordshire on Sunday reported how 24/7 private hire driver Turbez Ahmed…was attacked…by a gang of eight who wouldn’t pay their fare up front.”
Efforts by Bedfordshire police to bring to justice the assailants in those two horrific and sad cases go on. I do not want to obscure those efforts by talking further about those instances, but although they are specific cases, sadly they are not isolated examples.
A freedom of information request to Bedfordshire police showed that there had been 93 assaults in the preceding 12 months on private hire and taxi drivers, including 35 cases of aggravated bodily harm and 30 common assaults. My local authority estimates that that amounts to 2% of drivers being assaulted each year. Very few jobs have such a high rate of unprovoked violence.
I have spoken with the National Private Hire Association, the Licensed Private Hire Car Association, and Private Hire News, and I am indebted to them for their engagement and assistance with my preparation for the debate. They all, without exception, talked openly and depressingly about the widespread nature of violence towards drivers, and said, even more worryingly, that the level of violence continues to increase.
The National Private Hire Association sent me news reports of attacks on drivers with knives; guns, fake and real; baseball bats; a hammer; a fire extinguisher; and even a wheelie bin. Drivers have been set on fire and run over by their own vehicles. I have not found any nationally collated statistics on assaults and murders of private hire and hackney carriage drivers. Perhaps the Minister can tell me whether those statistics are collated. If not, that in itself indicates that the issue of safety is not receiving the attention that it should. The GMB union kept a record of attacks between April 2007 and February 2008; it listed that nine drivers were killed and 45 suffered serious physical assaults while doing their job. The Department for Transport conducted research on personal security issues in 2008 and found that, on average, three drivers a year are unlawfully killed—evidence from across the country that our private hire and taxi drivers are at risk. I would argue that we have not made sufficient progress in mitigating those risks.
My hon. Friend the Member for Northampton South (Mr Binley) raised the issue in a debate on 24 June 2009. That debate was interesting because of a number of points that he raised, but also because he noted the extent of the private hire and taxi sector. He said that
“we are talking about an industry that employs 340,000 people…The industry makes about 700 million taxi journeys a year, which means an average of roughly 11 journeys for each member of the population. About £3 billion is spent on fares each year. We are therefore talking about a sizeable industry that plays a major role in our public transportation.”—[Official Report, 24 June 2009; Vol. 494, c. 912.]
The Minister responding that day, the right hon. Member for Tooting (Sadiq Khan), was alert to the issue of driver safety and made some useful suggestions, but underlying that debate and much of the industry commentary is a sort of shrug-of-the-shoulders view that the issue is just too tough to tackle, and in some sense that it is the cost of doing business. What strikes me is not the fair and sometimes compelling explanations of the complexities of implementing changes that will tackle these widespread instances of assault, but that given these horrific attacks at such high incidence rates for so many years in a single sector of the economy, we have allowed the complexities to thwart our action for so long.
In the search for remedies, I turn first to the perception of the industry. Department for Transport research in 2008 found that
“a strong belief held by many drivers, controllers and others representing the trade is that the root cause of many of the problems is a lack of respect from the public for taxi and private hire drivers.”
That lack of respect can make the transition to abuse or to violence a much easier step to take. It is a sad fact also that this lack of respect too often descends into racial abuse.
I understand that a similar issue confronted the door security sector—I am not sure whether we can call them bouncers these days. The violence against bouncers was seen as part of that job, but a focused effort on changing that perception, together with other initiatives, has had a positive impact, reducing the incidence of attacks on door security staff at our pubs and clubs. What, in practical terms, has the Department for Transport done since 2008 to tackle the public perception of the industry, and what steps would the Minister consider undertaking? Perhaps it would be appropriate for the Transport Committee to assist in this effort.
Also in 2008 under the previous Government, the Sentencing Guidelines Council included taxi and private hire drivers in that category of workers where longer sentences would result from a crime. What assessment has the Department made of the impact of those changes in sentencing guidelines? Does the Minister believe that further action to strengthen the guidelines is warranted?
The national associations and the GMB raised with me the issue of the introduction of CCTV and/or driver shields. I will be interested to hear the Minister’s thoughts on those, as I understand that there are differing opinions about the desirability of each of those options, but he will be aware of the initiatives by some local authorities to investigate or roll out CCTV solutions. They have been considered for Brighton, Braintree, Oxford, Manchester and other locations. He will be equally aware of the very high cost of some of these solutions. It is unfair to expect drivers to bear the full cost of the equipment, particularly if the market price continues to be hundreds of pounds.
Jim Shannon (Strangford) (DUP)
There has recently been a change to legislation in Northern Ireland to increase safety for taxi drivers and passengers and to regulate the sector. That resulted from attacks on both parties. Does the hon. Gentleman think that where there is good practice somewhere in the United Kingdom—in this case, in Northern Ireland—that could be used as an example to produce better regulation for taxi drivers on the mainland?
Richard Fuller
The hon. Gentleman makes an excellent point, which highlights the fact that so many authorities are responsible for licensing, and the complexity of various initiatives taking place. I understand that the Law Commission will examine certain aspects of regulation, but he makes an excellent point about the need for best practice to be applied across the country. I shall be interested to hear the Minister’s response and his thoughts on the balance between localism and trying to tackle a national concern.
My view is that it would be unfair to expect drivers to bear the cost of CCTV, particularly if the price of the equipment remains in the hundreds of pounds. I do not expect public money to be made available in these straitened times, but I do know that in 2006 Bedford borough council worked with Bedfordshire police to use some of the proceeds of crime moneys to implement CCTV in a pilot scheme at low or no cost to drivers. In Leicester, funds from the tackling knives action programme have been used. In other local authorities, advertising on cabs has been enabled to fund the cost of CCTV. I ask the Minister to consider the possibility of the more widespread use of proceeds of crime moneys for this purpose.
I mentioned the lack of statistics on crime. I always think that if we do not track something, we will find it hard to make improvements. Therefore, will the Minister work with the Home Office to track more formally the statistics on criminal attacks on private hire drivers, including aggravated racial abuse? Will he also comment on whether he will seek opinions from the private hire and taxi trade as input to the Prime Minister’s alcohol strategy? Unfortunately, so many of these incidents of crime correlate with alcohol and drug misuse.
Jonathan Lord (Woking) (Con)
I commend the work of Woking street angels in my constituency, and similar street angels across the country, and also pay tribute to the licensed taxi drivers who have an arrangement with the street angels to take drunk and incapacitated passengers safely home, unless they are potentially violent, in which case the police are called. The drivers sometimes do that at no cost to the passengers. Is that something that my hon. Friend would like to see in more parts of the country?
Richard Fuller
My hon. Friend makes a good point. There are many excellent initiatives in towns across the country. They have recognised the problem of growing levels of alcohol abuse and the late night trade generally. We see organisations such as street angels working with the police, local authorities and taxi companies to ensure that towns do not suffer as a result of people staying out too long and that they get home safely. That relates to the point the hon. Member for Strangford (Jim Shannon) made about the importance of local initiatives being given a national profile so that we can make changes all the way across.
My hon. Friend the Member for Woking (Jonathan Lord) enables me to segue over to talk about the safety of passengers. It is a sad reflection on the taxi industry that, despite the significant efforts made by local authorities, which he mentioned, any cursory review of local newspapers will readily identify cases of assault—frequently sexual assault—of passengers by taxi drivers. That is the flipside of the issue of vulnerability. There is the vulnerability of drivers who are on their own, perhaps with cash, and the vulnerability of people being driven home on their own. In 2002, the Metropolitan police estimated that in London alone 214 women had been raped or sexually assaulted in such circumstances in the preceding year. The figure fell to 93 by 2009 but has recently increased.
There is a range of initiatives that national Government and local authorities are taking to reduce risks to passengers. I will not dwell on those in too much detail, but a particular issue I want to highlight for the Minister is the limitations and availability of publicly held data that might be useful in reducing offences against passengers. There are currently 384 licensing authorities in the UK, each of which will have its own policies on the collection of data on drivers, such as their Criminal Records Bureau checks, and on their vehicles, and each authority will have its own rules about sharing that information. As we know, information is power, and that power ought to be available to passengers, should they wish to have it, when they hire a cab. It would provide reassurance to know that the vehicle and the driver are properly licensed.
Am I safe? is a service that currently operates in more than 50 towns and covers 10% of the UK population, but it reports that local authority information gathering is patchy and that the timeliness of updates varies. I do not know whether that application is the best, but I believe that it makes sense to make this regulated information more accessible and more accurate. Therefore, I ask the Minister for his views on the value of a national registration database of private hire drivers and licensed vehicles and, more broadly, his comments on the need for rigour in data collection and CRB checks.
Often, in towns and villages throughout our country, the only public transport option for getting back home after a night out is a cab—a private hire vehicle or hackney carriage. It is time for the Government, notwithstanding the Law Commission’s review of legislation, to come forward with some initiatives that will make our private hire and taxi sectors a respected part of our transport system—a status that they and we, the public, deserve.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I thank my hon. Friend the Member for Bedford (Richard Fuller) for raising this important subject of taxi and private hire vehicle safety, and for securing the time to allow us to debate the issues. This debate comes at a time when there have been a number of very serious alleged assaults on and by taxi drivers, and that is a matter of great concern.
Licensing authorities will do their best, I am sure, but the unfortunate fact remains that taxis and private hire vehicles can never be perfectly safe. They are often hired from isolated places at night; drivers carry cash; and, self-evidently, taking a taxi or private hire vehicle generally involves getting into a car with a stranger. That combination of factors makes drivers and passengers particularly vulnerable to violence, and it is important that we take what steps we can to minimise the risks.
In looking at safety, we normally focus on the passenger’s perspective, but my hon. Friend quite rightly refers to the dangers that exist for drivers as well. A report from the Department in 2007 found that on average three drivers a year are killed unlawfully. Each crime is of course unacceptable, but it is worth putting into context the fact that journeys in taxis and private hire vehicles account for just over 1% of all journeys per person per year, and that is 700 million journeys or 3.5 billion miles per year. That, of course, is of no comfort to those who are subject to the unwarranted and unprovoked attacks to which my hon. Friend referred.
Let me look at how we might make the experience safer for the passenger and driver, starting with the passenger. First, local authorities, as licensing authorities, are obliged to ensure that only those who are “fit and proper”—the term in law—should be licensed as taxi or private hire vehicle drivers, and it falls to individual councils to ensure that that is the case.
The Criminal Records Bureau check is a central element of that assessment process. A number of organisations have raised with me their concerns that some taxi drivers have only a standard criminal record check because the law does not allow for all of them to have enhanced checks. Enhanced criminal record checks include any relevant local police information, in addition to a record of previous criminal convictions, cautions and warnings, but those checks have, in law, been restricted to drivers who work regularly with vulnerable adults or with children.
I agree that licensing authorities should be able to see enhanced criminal record checks in respect of all taxi and private hire vehicle driver licence applicants, regardless of the type of work that they intend to undertake once licensed, and I have been working closely with colleagues in the Home Office and, in particular, with my hon. Friend the Minister for Equalities, who announced in January that all taxi and private hire vehicle drivers will be entitled to enhanced criminal record checks. The necessary legislative change has now been made by the Home Office, and today I can confirm that it will come into force on 26 March.
The Minister for Equalities also announced that licensing authorities will be entitled to check whether any applicant is barred from working with children or with vulnerable adults under the Safeguarding Vulnerable Groups Act 2006. That is a good example of the Government listening to the experts and acting accordingly. Licensing officers have told us that they need to be able to see enhanced criminal record checks in order to make a proper assessment of applicants’ suitability, and we are responding by providing them with the tools that they need to carry out that vital task.
There is also a growing need for information about licensed vehicles, a point that my hon. Friend helpfully made in his lucid comments. That information enables the public to verify immediately whether a given vehicle is licensed, and it helps with the “traceability” trail. There is a difficulty when it involves personal information relating to individuals, but that is a matter for local authorities to weigh up against their wider obligations and considerations, including, under the Data Protection Act 1998, the protection of personal information.
I am happy to say, however, that I am aware of Transport for London’s vehicle-checker facility, which enables the public to input a vehicle registration plate and discover whether the vehicle is actually licensed as a private hire vehicle. That is a helpful facility, and I for one cannot see why licensing authorities should hold back on providing such information. As I was aware that my hon. Friend might raise that matter, I spoke to a leading national licensing organisation just yesterday and said that I thought it ought to respond positively to requests for vehicle licensing information, if not proactively put it on its website. It agreed, and said that it would disseminate that message to its member authorities.
I move on to the hugely important issue of drivers’ personal safety. I was very sorry to learn of the incidents in my hon. Friend’s constituency. I extend my sympathies and those of the Government to those who have been subject to serious assaults there and elsewhere, and perhaps particularly to the family of the 61-year-old grandfather to whom he referred. I was particularly horrified by my hon. Friend’s description of the range of weapons that are sometimes used against drivers who are simply going about their lawful business. It is intolerable that they should be subject to attacks such as he described. The lack of respect to which he referred is clearly an important factor to be taken into account.
I turn to the questions that my hon. Friend asked. I agree with him that there is a problem of perception. We will examine the parallel position of doormen, to which he referred, to see whether there are lessons that might be sensibly transferred across.
My hon. Friend asked about statistics. Because licensing is largely a local function—it has been since 1847 or before—there is not the depth of national statistics that he or I might like. However, we will talk to the statisticians to see what is available, and I will write to him to let him know. We will also consider whether the statistics that are available in different places might be accumulated to give us a better picture of what is happening. Of course, local authorities may hold information, and I will ask my officials to talk to the national body of licensing officers to see whether it has information that might throw a light on the matter and what else might usefully be done. If there is information such as he mentioned, I will happily share it with the Prime Minister’s team that is examining the alcohol strategy and with the Home Office more generally in respect of the crime statistics that it collects. I certainly agree that it might be useful to track criminal attacks on private hire vehicle and taxi drivers more formally.
I am familiar with the Proceeds of Crime Act 2002, because I was on the Bill Committee when it was taken through Parliament. It was a useful Act. I am not aware that it has been applied directly in cases such as we are discussing, but I am happy to ensure that my colleagues at the Home Office are made aware of my hon. Friend’s comments and concerns on that matter and others affecting them. I will write to the relevant Minister to make him or her aware of the contents of today’s debate and my hon. Friend’s comments, including those relating to the Act.
My hon. Friend mentioned CCTV. Any decision to install it in cabs or elsewhere must of course involve clarity about the purpose of doing so. It is important to consider carefully its potential contribution towards achieving that purpose, the costs and whether the intrusion into individual privacy is appropriate and proportionate. CCTV in taxis and private hire vehicles is by its nature intrusive, putting law-abiding people under surveillance and recording their movements, although it might be argued that individuals accept that by flagging down a taxi or booking a private hire vehicle.
CCTV can be effective in both preventing and detecting crime and antisocial behaviour, and owners and drivers of vehicles understandably often want to install security measures to protect the driver. However, there is a balance to be struck, not least given the Data Protection Act’s provisions on the processing of personal data. Nevertheless, the personal security of taxi and private hire vehicle drivers and staff clearly needs to be considered as well.
The Crime and Disorder Act 1998 requires local authorities and others to consider crime and disorder reduction while exercising all their duties. The Department’s best practice guidance suggests that the installation and use of appropriate safety measures is best left to the judgment of the owners and drivers themselves, but we would encourage licensing authorities to look sympathetically on, or actively encourage, measures that protect drivers.
As my hon. Friend will be aware, the Protection of Freedoms Bill is being considered in another place. The Bill includes provisions further to regulate CCTV and other surveillance camera systems. Those provisions include the introduction of a statutory surveillance camera systems code of practice and the appointment of a surveillance camera commissioner to encourage compliance, provide advice and information, and monitor the code’s effectiveness. I will maintain an interest in the development of the code to ensure that CCTV associated with public transport, including taxis, is addressed appropriately.
Drivers can use a range of other security measures to improve their personal safety, including conflict avoidance training. The Department has issued guidance for taxi and PHV drivers about how best to protect themselves, and that is on the Department’s website.
Clearly, enforcement is a hot topic. I commend Transport for London’s Safer Travel at Night campaign, which aims to reduce the number of cab-related sexual offences by raising awareness of the dangers of using unbooked minicabs, also known as touts, and illegal cabs. It also involves targeted police and enforcement activity to identify, disrupt and deter illegal cab activity. Transport for London has, through a sustained effort, made great strides in reducing cab-related sexual offences and instances of touting, although I accept that there remains an outstanding concern relating to pedicabs, which are outwith the PHV and taxi licensing system.
More generally, I am pleased that, as my hon. Friend said, the Law Commission has agreed to undertake a comprehensive review of the law governing taxis and PHVs. The fact that taxis outside London are licensed under an Act of 1847, and those inside London under an Act dating from 1869, speaks volumes. The Law Commission is a body dedicated to, and expert in, unravelling complex and archaic legislation and replacing it with modern, simplified legislation, and I hope that it will take on board issues relating to safety as part of its work. The commission embarked on the review in July 2011, it will be consulting in the spring, and it will provide us with a report and draft Bill in November 2013.
I hope that that is helpful in taking forward the genuine and proper concerns that my hon. Friend has raised.
Question put and agreed to.
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Trade Union Funding
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Fiona Bruce (Congleton) (Con)
It is a pleasure to speak under your chairmanship, Mr Owen, and a privilege to introduce this debate. In doing so, may I, as someone who comes from a northern mill town, where my grandmother started weaving in the cotton mill as a young girl and lost much of her education as a result, acknowledge the historic role that trade unions have played in our country throughout the past century in improving and defending workers’ rights? They are worthy of our respect. I acknowledge too the important role that they still play today as a valuable part of our civic society in supporting and advocating workers’ rights and representation.
The debate is not about criticising the work to which I have referred, but about the promotion of transparency, accountability and fairness in the way in which such work is fulfilled—things that I hope we would all agree it is right to promote in public and civic life. It is about ensuring that the right balance is found between effective representation of trade union members and value for money for the taxpayer. Many of us believe that, at the moment, the balance disproportionately disadvantages the taxpayer.
Mr Gerry Sutcliffe (Bradford South) (Lab)
On that point, will the hon. Lady give way?
Fiona Bruce
I will give way and I am happy to take interventions, but perhaps, in the interests of transparency, the hon. Gentleman will first say which trade union he is a member of and how much money that union has given to his constituency Labour party in the past three years.
Mr Sutcliffe
You would not allow me to do that, Mr Owen, on the basis that interventions must be brief, but I will write to the hon. Lady with all the information that she has requested, because I am proud to be a member of a number of trade unions. In the calculation that she has made in relation to transparency and the balance being wrong, how much weight has she put on the amount of work that unions do to help employers to have good industrial relations?
Fiona Bruce
I have already recognised the positive work that trade unions do. We are simply saying that it is unfair that taxpayers should have to shoulder the burden of the cost of that work to the degree that they do, particularly when so many of those taxpayers and council tax payers have no connection with the work of those unions.
John Healey (Wentworth and Dearne) (Lab)
On that point, will the hon. Lady give way?
John Healey
Will the hon. Lady not accept that the facts show that where a trade union is involved with an employer, fewer days are lost through illness and injury and there are fewer employment tribunal cases and that there are, therefore, cost savings to the human resources function and the organisation, which are clearly benefits to the employer? If that is the case, is it not right to accept that the employer should bear some of the cost of the work that union representatives do for their work colleagues and for their employer and their organisation?
Fiona Bruce
We are saying that the cost is wholly disproportionate. Millions of pounds a year of taxpayers’ money are being used to fund this activity. I have said that much of the activity is worth while, but much of it veers towards being, if not is, political. During the past 13 years of the—
Fiona Bruce
No. [Interruption.] May I please give my speech, Mr Owen? [Interruption.]
Fiona Bruce
Thank you, Mr Owen. During the 13 years of the Labour Government, the Government were funded to the tune of £10 million a year by the unions in political work. We think that that is wrong.
Fiona Bruce
I shall continue, if I may, because I have hardly embarked on my speech and I know that many other hon. Members wish to contribute to the debate.
I have acknowledged the good work that trade unions do. My concerns about union funding and financial support stem from my time as a councillor in Warrington. In 2006, when Labour lost control of the council and a joint Conservative and Liberal administration took over, I was allocated a portfolio with the title “Value for Money”, later augmented to the finance portfolio as a whole. One action that I undertook was to review all the property assets of the council to see where efficiency savings could be made and where, at a time of increasing pressure on our services, better value for money could be delivered for our council tax payers. I am talking about money being allocated to front-line services. We analysed every building and piece of land that the council owned—that had never been done before—and drew up plans to ensure that their use and value was in the best interests of residents. The use of some buildings was increased. For some buildings, joint use was the way forward. Rents were reviewed where appropriate. Some properties were repaired. Others were released for sale, so that the funds on disposal could be utilised more effectively for the benefit of residents.
To my surprise, I discovered that one of the authority’s most prestigious properties, part of a wing of the town hall itself—undoubtedly the most prestigious listed building in the town, in the prime commercial letting area—was occupied rent free, and with services free, by local union representatives, at considerable cost to local council tax payers.
Fiona Bruce
No, I shall continue with my speech, if I may. In the interests of transparency, which I mentioned earlier, I would have liked to obtain the definitive figures for that cost, but I was never able to do so. I did, on a number of occasions, ask that use of the asset be reviewed, but I could never get council officers even to consider reviewing the use of that asset in the same way as the use of every other property asset in the town was being reviewed, while all the time local community groups, charities, small business owners and others were seeing their charges for and use of property reviewed. The fact that property used by trade union representatives was exempt from that process struck me as simply unjust.
The value of the use of that asset—prime commercial property—when multiplied over many years, must have amounted to thousands of pounds. That money could have been used to keep down the costs of renting local community halls by youth groups, guides and scouts and mum and tots, and for other front-line services in a town where many residents are by no means affluent. I am sure that few, if any, council tax payers in Warrington knew that their money was being spent in that way, and that had they known and had they realised the amounts involved, they would have been as surprised as I was. It is interesting to note that if I, as Member of Parliament for Congleton, wanted to hold my surgery in the town hall, I would be required to pay a charge.
Therefore, when I heard about the Trade Union Reform Campaign, which was founded to reform the laws and funding arrangements relating to trade unions and so to create a more level playing field, I was pleased to support it and become a council member, together with many other hon. Members who are here today and will speak after me to raise concerns in addition to the one that I have highlighted—the use of council facilities. In supporting the campaign, I am pleased to note that we are in good company. My right hon. Friend the Prime Minister himself is backing the campaign and wrote in November—[Interruption.] He wrote in November to its chairman, my hon. Friend the Member for Cannock Chase (Mr Burley), to whom I pay tribute for standing up and spearheading this campaign. The Prime Minister wrote:
“I am pleased that you have decided to establish the Trade Union Reform Campaign…as I strongly believe the current level of public subsidy to the trade unions cannot be sustained, either morally or economically…at a time when across the private and public sectors people are having to take very difficult decisions in order to save money, it is difficult to justify some people in the public sector being paid not to do the job they are employed for, but instead to undertake full time trade union activities—much of which should be funded by the unions themselves. We need to question why the public is paying for so much, and whether this is sustainable going forward.”
That is what we are doing today. Hard-working taxpayers, particularly in these challenging economic times, deserve to see Government, at local and national level, stewarding people’s money responsibly and doing all that they can to maximise its use, so that as much as possible can go to the front line, for those most in need. I am talking about stewarding people’s money responsibly and ensuring transparency, accountability and fairness.
I do not want to pre-empt what others will say, but I do want to draw attention to the excellent contribution my hon. Friend the Member for Cannock Chase made in his Adjournment debate on 26 October 2011, when he gave many clear examples and staggering figures. He drew the attention of the House to the issue and to the need for reform based on the principle that the activities that people undertake on behalf of trade unions should be funded by those trade unions and not by the taxpayer. Why should taxpayers pay for that work?
People pay council tax to have their bins emptied and their streets cleaned. Councils across the country are making every effort to keep council tax frozen, and the Government are making every effort to pay off Labour’s deficit. At this time, more than ever, it is right that we ask the questions I have posed.
I applaud Swindon council, which has recently taken steps to review the issue. It has removed the shared job of two union representatives as part of a £15 million reduction. Councillors who met to finalise the council’s budget said they should not have to pay their staff to do union work in the current economic climate.
Colleagues who follow me will have many questions for the Minister, but I would be grateful if he would give us guidance on how town halls up and down the country can challenge union representatives’ use of facilities that would be better utilised for the benefit of the community. In the light of the excellent contribution my hon. Friend the Member for Cannock Chase made in his earlier debate, will the Minister also update us on the progress of Government action to deal with the concerns my hon. Friend raised? I had intended to repeat them, but I will not, because so many other Members want to speak.
Mr Frank Doran (Aberdeen North) (Lab)
I am proud to answer the question from the hon. Member for Congleton (Fiona Bruce): I am a member of the GMB union, and, yes, it has helped to fund my election campaigns. I hope it will do the same in the future, just as the businesses the hon. Lady supports are likely to support her directly or through some other medium.
The hon. Lady’s comments emphasised one of the major problems in our political system. When a party is elected, it rips up what the previous party did, and we can see the consequences of that in all sorts of areas. One section of the Tory party—it is much larger than it used to be—is focusing particularly on trade union rights. It thinks the only way we will sort out our economic and political system is by removing workers’ rights to health and safety protection at work because such things are all red tape. That is why the Tories have formed their Trade Union Reform Campaign, in the same way they formed the TaxPayers Alliance as a front and a seemingly independent organisation to get over their message and alter the debate on public finances.
I want to focus a little on how things should be. When we look at our economic competitors, it is clear that we are not at the races. Our manufacturing industry has virtually disappeared, although that is the fault of both the Labour and the Conservative parties, and I am not laying political blame. However, there are fundamental weaknesses in the way we approach industrial relations.
I was a Parliamentary Private Secretary—the lowest of the low—in the Department for Trade and Industry when Labour was elected in 1997, after 18 years out of office. One of the key issues on which we had manifesto commitments and which we wanted to tackle was the industrial relations system. Rather than taking the approach of the hon. Lady and most of her colleagues in the Conservative party, we decided to trust the trade unions and management. We asked the CBI and the TUC to go away and look at what we proposed in our manifesto programme, and then to go beyond it and look at a range of issues that we felt were a serious problem in our industrial relations system. There was not a lot of confidence that they would come back with a workable programme, but we were quite explicit: we told them to come back and tell us what they could agree about, what they did not agree about, but thought they could sort out, and what they positively disagreed about.
I remember sitting in the office of the Secretary of State, my right hon. Friend the Member for Derby South (Margaret Beckett), when the TUC and the CBI came back to report on what they had worked out. We were all astonished, because they had gone much further than we had anticipated. Both sides knew the industrial landscape and the workplace, and they knew how the system worked. They came back with a formula that eventually became the Employment Relations Act 1999. The focus of that Act was not, as the hon. Lady might suggest, about Labour buying off its union funders: it was a serious attempt to change the industrial landscape. One of the key issues was to try to get the courts out of industrial relations, and I think we succeeded enormously in that respect. I am very proud of what we did in that area.
One of the key areas of conflict was recognition. We introduced a process that enabled recognition to be properly worked through in the workplace or with support from ACAS. That meant that we had a rational debate, rather than both sides following their first instinct and rushing to the courts to try to force things through.
Within a few months of the Act—in fact, the process started before it was enacted—we had more than 1,000 new workplace agreements. Management decided to sit down with their workplace unions for the first time, and they started to enter agreements. There have been virtually no disputes since, although there have been one or two high-profile ones. In the main, however, the whole issue of industrial disputes over recognition has disappeared.
Sadly, we now have a new Government. Just this week, I met a group of trade union officials who represent the trade unions at QinetiQ, where the managing director, who has no experience of the defence industry or science, has decided that recognition will be removed from the workplace. That will be an area of conflict, and it is completely unnecessary. There was no proper consultation with unions: in fact, in that case, unions at the national level feel they have been deceived and lied to, and such comments are not made lightly in an industrial context.
Bob Stewart (Beckenham) (Con)
I am totally in support of having unions, and it is a statutory right for unions to carry out their business unpaid in work time. However, I am worried, and I wonder whether the hon. Gentleman agrees in principle with union members being paid out of taxpayers’ money. That is the crux of the worry many people have.
Mr Doran
A whole phalanx of my colleagues will come in on that issue, but I want to focus on the issue I have outlined. To answer the hon. Gentleman’s question, however, I see this arrangement as a facility for management. In my constituency, which does not have a Labour council at the moment, staff are paid to do this work because it is a door for management to knock on when there is a problem. Whenever there is a difficulty, the two sides can quickly get together, and the people who represent the work force can talk with some authority; they do not have to work at the coal face in another job and then have to be briefed on an issue that has come up somewhere in another department. These things happen in the private sector as much as in the public sector because they are good for management—they oil the wheels.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
Does that point not sum up the fundamental flaw in the contributions of the hon. Members for Congleton (Fiona Bruce) and for Beckenham (Bob Stewart)? This is not about trade union facilities, but about the time given to fulfil industrial relation duties. The time used by trade union representatives is, in fact, tiny in relation to their own particular work, and the vast majority is used to ensure that the workplace works smoothly. That is where Tory Members are getting this very wrong.
Mr Doran
My hon. Friend speaks with a lot of experience. He has worked with local authorities across Scotland, and I bow to his knowledge. It is easy to count the cost of wages. The Secretary of State for Communities and Local Government, who has an axe to grind, has all the resources to get the figures together; but there is no assessment of the benefit to management. That is the fundamental weakness in the case.
The pendulum is swinging. I have described how we approached industrial relations, and the figures for time lost at work through strike action in the past 15 years show a dramatic improvement, but that graph is likely to change substantially. I am deeply concerned about the approach of any Government who think that the only way to resolve problems in the workplace is to reduce workers’ rights and remove their health and safety rights. That is a particular issue for me. I was a very young Member of Parliament when the Piper Alpha disaster happened. It was a time of light regulation in the offshore oil industry, because the imperative was to get the oil ashore and recover the taxes that it paid the Exchequer. One hundred and sixty-seven men were killed, and I have spent a lot of my political life still in contact with the relatives and survivors. It is not something I want repeated. I have a simple rule: one man’s red tape is another man’s essential safety system.
The Conservative party was not always the way it is now. A week or so ago I read an obituary of Robert Carr, who died recently. Lord Carr had the onerous responsibility of taking the Industrial Relations Act 1971 through Parliament. That was flawed, and he made it clear later in life that much of it was not easily understood; I think that was how he put it. He had practical experience of manufacturing industry. His family had owned a metal works, which apparently provided metal for the airframes for, I think, the Wellington bomber, during the war. It was a quite substantial company. After his spell as Secretary of State he said that because of his time on the shop floor in his fathers’ factory he understood the importance of trade unions. That breed of Tory—people with practical experience of the workplace—seems to have gone. He understood the importance of trade union rights and was genuinely liberal about them.
There are more important issues involved. The way we deal with the workplace is extremely important. As I have said, we have virtually lost our manufacturing base. We have the car industry and a few other significant areas, but perhaps we should look at what happens in other countries—particularly Germany. After the war Germany recognised the importance of good relations between the work force and management. It established a system that German trade unions tell me is almost as revered as the NHS. The key thing is that the work force has a voice at every level.
I lost my seat in 1992 and at that time—another confession for the hon. Member for Congleton—I worked for the trade union movement. I was responsible for organising some conferences for what is now a part of Unite, but was then the Transport and General Workers Union. One conference was about the automotive industry, and I had the task of asking the head of BMW in the UK to speak at the conference. I had a meeting with him and he asked me what I wanted him to say—an unusual situation for me; usually it is a case of being told what someone wants to say. I just said, “Be union-friendly.” He said, “I can be very union-friendly. I strongly believe that no major company can now operate without the strong support of its work force and trade unions.” He was a member of the main board of BMW in Germany at the time.
That philosophy seems totally alien in our political system. The debates on trade unions that we have had in this House—the last one was on a ten-minute rule Bill on facilities for trade union members—are marked by two things: ignorance and anger. There is polarisation on both sides. That is bad for us, politics and the country.
Albert Owen (in the Chair)
Before I call Robert Halfon, I want to make an announcement on time limits. Because of the number of hon. Members who want to speak, including those who have given advance notice, I am, with the authority of the Chairman of Ways and Means, imposing a time limit of four minutes on Back-Bench speeches. The rules are exactly as in the House. Each of the first two interventions accepted will stop the clock and give the hon. Member who gives way an extra minute. We do not, as the Chamber does, have the mechanisms that enable hon. Members to know the time on the clock, so with the assistance of the Clerk we will ring the bell when there is a minute to go. An intervention made in the last minute entitles an hon. Member to added time.
Robert Halfon (Harlow) (Con)
I congratulate my hon. Friend the Member for Congleton (Fiona Bruce) on obtaining the debate. I am a member of Prospect trade union, and it does not give me any money for political campaigning, but I am publishing a pamphlet with Demos in the next couple of weeks, on relations between the unions and the Conservative party, and am deeply interested in the issue.
I want to make three points. First, I believe that it is wrong to lump all trade unions together. Secondly, as the hon. Member for Aberdeen North (Mr Doran) said, the Conservative party has a long history of co-operation with unions, on which we should build. Thirdly, we should do more to support the moderate majority of trade union members, most of whom are not political activists.
It is true that some trade unions get subsidies from the Government, as do banks. Yet many unions are, we should acknowledge, capitalist institutions, offering services that are intended directly to replace state provision, such as private health care. The market comparison website privatemedicalinsurance.co.uk shows that the Labour-affiliated union Unison has recently encouraged its members to join private health care schemes such as Medicash.
There are other examples. In 2001, The Daily Telegraph reported that 3.5 million trade unionists—more than half the TUC membership—now have some form of private health cover. That was 10 years ago. Since then the trade union movement has considerably professionalised and strengthened its private health care offer and other services, such as legal insurance. I suggest to my hon. Friends that we need to look at the reality of trade unions, not just the rhetoric of extreme militants.
Unions are still the largest membership associations in Britain. They are hugely more popular in membership terms than all the political parties combined.
James Morris (Halesowen and Rowley Regis) (Con)
My hon. Friend is making important points. The Conservative party has had a positive relationship with the trade unions, but is not transparency of funding and understanding what trade unions do the most important thing?
Robert Halfon
Yes, I accept exactly what my hon. Friend says; I am all in favour of transparency. However, TUC membership now stands at 58 unions, representing 6.5 million people—more than the population of Scotland. Of those 58 unions, just 15 are affiliated to Labour, leaving 43 that are non-affiliated. In addition, there are huge numbers of small staff associations. My point is that those 6.5 million are a complex network of people, and the vast majority of them will be moderate Britons, in all sectors of the economy, from all walks of life, and not militant activists.
I am proud that our party has a long history of co-operation with the trade unions, beginning in 1867, before the Labour party even existed. It was the Conservative Prime Minister the Earl of Derby who first sought to legalise trade unions in 1867. He said in the House of Lords at the time that
“the voices of Manchester, of Birmingham, of Leeds, and of all the other important centres of manufacturing industry were absolutely unheard.”—[Official Report, House of Lords, 22 July 1867; Vol. 188, c. 1775.]
He praised a trade union march in London, insisting to a hostile Liberal Opposition that the process was entirely legal.
I say these things not because I am not a proud Conservative: I come from the Thatcherite wing of the party, but even Mrs Thatcher was an active trade unionist. In 1950, she was elected president of the Dartford branch of one of the first organisations that she ever joined, the Conservative Trade Unionists. One of her first engagements as Leader of the Opposition was to address the CTU. She told them in 1975—it is well worth hearing this quotation—that
“the law should not only permit, but…it should assist, the trades unions to carry out their legitimate function of protecting their members.”
We all remember Mrs Thatcher for the wars against Arthur Scargill and so on, but she was supportive of trade union members and grass roots, although she was against militants. I am a firm Thatcherite on trade union reform.
Alec Shelbrooke (Elmet and Rothwell) (Con)
To add to my hon. Friend’s comments about Mrs Thatcher, I remember that Norman Tebbit was very much a trade unionist within the aircraft industry and, indeed, led strikes.
Robert Halfon
My hon. Friend proves my point. In 1979, during the general election, trade union members held a mass rally at Wembley stadium under the banner “Trade unions for a Conservative victory”. That is the kind of future that I hope our Government will aspire to.
My conclusion is that we need to support the moderate majority of trade union members, most of whom are not political activists. In politics, language is everything. We should not be afraid to support grass-roots trade union members, to encourage people to join trade unions and—dare I say it?—to have, perhaps, the occasional beer and sandwich. We often discuss facility time, and, yes, we need to crack down where it is abused and say that it should not be used for party political activity. Nevertheless, some facility time is good. A local employer in my constituency, the bus company Arriva, says that facility time is incredibly beneficial. The politically neutral First Division Association, which has 20,000 members, uses facility time to relocate the families of civil servants who are serving overseas. While we crack down on the abuses, we should recognise that not all facility time is bad.
Whatever reform is pursued, our focus must be on what is right for union members. It may be worth returning to the original opt-in position for political levies, which was the status quo until 1945.
Finally, I will quote Richard Balfe, the former Labour MEP who came over to the Conservatives. He said:
“British politics has changed enormously in recent years. Labour has become a rich persons’ party and the Conservatives are reaching out to groups that in the past would not have been natural allies. We do not expect to convert the leadership of the trade union movement, but we do offer respect for the achievements of the movement and the possibility of a mutually beneficial dialogue.”
I say to the Government and my hon. Friends that, despite the rhetoric, let us not walk into the elephant trap set for us by Len McCluskey, Bob Crow and others.
Mr David Anderson (Blaydon) (Lab)
It is a pleasure, Mr Owen, to serve under your chairmanship.
Can we just think about the people that we are talking about? They are public servants who represent millions of public servants, whose only role in life is to deliver quality services for the people we are fortunate to represent. These people are not the enemy within.
I agree with what the hon. Member for Harlow (Robert Halfon) said about the Tory party’s track record not being anti-union. The Tory party supported Solidarnosc in the early 1980s, but it did not support the shipyard workers in Sunderland when it destroyed the Sunderland shipyards. The Tories supported the Union of Democratic Mineworkers, but they did not support it while they were destroying the British coal industry. The Tories then forgot about them and put them on the dole along with the other 200,000 miners who lost their jobs because of the Tories’ policies. Only last week the Prime Minister had some trade unions into No. 10 to talk about the health reforms. The one thing those three examples have in common is that the Tories liked those groups as long as they were doing their bidding. When the unions are doing the bidding of their members, somehow they are no longer friends of the Tory party.
I am proud to have been a member of a trade union for 43 years. I have been at the sharp end. Unlike most people here, I have not just read about this. I was an elected lay official for my union, released from work for 15 years by Newcastle city council to represent a membership of 7,000 and a work force of 16,000. My hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann), who spoke earlier about industrial relations, has got it absolutely right: we have lost sight of what industrial relations means. It is about developing a relationship with people and between management and the unions. Most of the time is spent avoiding problems. It is about building relationships, so that we can say, “Look, we need to go and see these people, because if we do not see them, things will go off the rails.”
There are huge examples. I spent many hours with home care workers, encouraging them to take redundancies or to take ill health retirement. That was a huge step for them, but they put their faith in me and that helped my authority in being able to respond to the cuts being imposed on them. I did thousands of disciplinaries and grievances. I was involved in appeals, social security appeals and industrial tribunals. If I had not been there doing that, those people would have been unrepresented. It is somehow being argued that taxpayers should not be doing this and that the unions should fund it all. If the unions fund it all, as the Tory party knows, no union in the world could have sub levels high enough to do that. It would also lose the hands-on experience of people who were working on the ground and at the coal face—I literally worked at the coal face—who try to make things better for the people they employ and the people they represent.
Where has this debate come from? We all know that this debate has not come from the employers, because I work closely with the public sector employers in Gateshead, such as the council, the college and the hospital—I see the chief executive on a regular basis—and not one of them has said to me, “Let’s get rid of facility time.” We have some strong, hard relationships. As we sit here today, the unions in Gateshead council are sitting with the management trying to work out how they make 350 people redundant with as little damage to the people and the service as possible.
It would appear that the truth is that the hon. Member for Congleton (Fiona Bruce), who led this debate, was not strong enough to control her officers, because her officers have control of whether members have time off. If the council and the officers do not agree that the trade unions have time off, it does not happen. If she was not strong enough to control her officers, that is a fault with her and her administration, not with those who represent the people on the ground.
We know where this has come from: it has come from the storm-troopers of the TaxPayers Alliance. If we are talking about storm-troopers, we all know what Hitler’s attitude was to trade unions: get them out of the way, lock them up and destroy them. I am sure that no Member would support anything that Hitler or the people he represented did, but that is the slippery slope that we are on with this debate.
Priti Patel (Witham) (Con)
The context of this debate is the reform of trade union funding. In the four minutes that I have, I want to touch on the areas of facility time, direct payments to unions and the political levy.
The Minister will be aware that I welcome the current review of facility time. At a time when public bodies are being asked to publish all spending over £500, it is shocking how little information is being made available about the tens of millions going to the trade union movement in various forms. As part of the Government’s review, I urge the Minister and the Government to introduce measures requiring public sector employers to publish in full detail the use of facility time in their organisation, the amount of time and, importantly for transparency, its purpose. It is essential, because we need to see why facility time is five times more prevalent in the civil service and three to four times more prevalent in the wider public sector than it is in the private sector. That is a stark difference.
Both the public and private sectors are bound by the same laws on facility time and both sectors have to grant paid time off for trade union activities, such as negotiating pay conditions, meeting employers and supporting members at disciplinary hearings. Important though those are—I think that we would all agree about that—why do trade union members in the public sector seem to receive so much more paid time off than their private sector equivalents? That has to be looked into and is where the point about transparency comes into play.
I will give an example. Unison has boasted recently in various documents that securing paid facility time for trade union activities, such as attending conferences and campaign meetings, is a vital part of its organising strategy. Its community service group guidance note on facility time states that
“a key task for you in negotiating a facility time agreement will be to get as many activities as possible covered by your paid facility time allowance. In other words, although you’re entitled to unpaid time off…why not try to get those activities covered by your paid time off?”
That comes back to the point on transparency.
I want to touch quickly on direct payments. We have already touched on local authorities and the amount of time for paid equivalents, full-time equivalents and part-time equivalents and how—I think the hon. Member for Blaydon (Mr Anderson) said this—that was down to the local authority. It is worth looking into the extent to which this is taking place across the country. Some weeks ago, I mentioned Camden council, which seemed to be giving a lot of resource to securing union facility time and putting its payment as a priority, while cutting front-line services. That is a major area.
Direct payments are another way the public purse supports trade union activity. The Union Learning Fund costs the taxpayer something like £22 million a year and supports the employment of about 170 trade union employees. More transparency is definitely required in relation to direct payments.
Priti Patel
I will not give way, as I have to wrap up quickly. Regarding the political levy, it is worth noting that the membership forms for both the GMB and the Public and Commercial Services Union make no mention at all of the fact that their membership fee includes a contribution to a political party’s political funds. That is another area that requires more transparency. Those who sign up to join those unions should be informed that included in the price, they are signing up to give their money away to a political party.
I hope that the Minister will take these comments on board and let us know whether the Government can fast-track proposals in the report by Sir Christopher Kelly on party political finances to address these matters and empower union members to decide explicitly whether or not to opt in and pay their political levy, rather than having it taken from them without their knowledge.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
Thank you, Mr Owen, for calling me to speak.
It is normal practice to congratulate the hon. Member who secures a debate in Westminster Hall. On this occasion I shall resist that temptation, because there is no doubt whatsoever that this is a politically driven debate, with the dark hand of the TaxPayers Alliance behind it—an organisation about which little is known, including how it is funded, so we know where it is coming from. It is also rather interesting that the Conservative MPs in Westminster Hall today are all from the new intake of the party’s MPs, which gives us an idea of where the new Conservative party is going.
I must say that I have not had one single constituent complain to me about trade union funding—not one—in the 10 years that I have been in Parliament. In terms of employment rights, we already have the most business-friendly employment rights in the whole of Europe. That is undisputed, and if people do not believe me let me quote Richard Lambert, the director general of the CBI in 2009, who said in a foreword:
“In today’s difficult economic climate, it is more important than ever that all resources available to the workplace are well deployed. Union reps constitute a major resource: there are approximately 200,000 workers who act as lay union representatives. We believe that modern representatives have a lot to give their fellow employees and to the organisations that employ them.”
Mr Gregory Campbell (East Londonderry) (DUP)
Does the hon. Gentleman agree that, however he would analyse or describe the business-friendliness of the current Government, being business-friendly does not necessarily mean the opposite of being in favour of workers’ rights?
Jim Sheridan
The hon. Gentleman is absolutely right and I am glad that he made that intervention.
There are some members of the Conservative party who live in the real world, none more so than the Minister for Further Education, Skills and Lifelong Learning, the hon. Member for South Holland and The Deepings (Mr Hayes), who said:
“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 suggests that there are some Conservatives—apart from those in Westminster Hall today—who live in the real world.
For my sins, I have been a member of the Transport and General Workers Union and I am still a proud member of the Unite union. I am also proud to be the chair of the Unite parliamentary group, which meets regularly and takes up issues with whatever Government are in power. Before anyone asks about my funding, there is absolute transparency about my funding, including my funding from the trade union movement; it is all recorded in the books and is there for everyone to see.
In the short time that is left for me to speak today, I will focus on one of the major issues that trade unions are involved with, which is health and safety in the workplace. For my sins, I am also chair of the all-party group on health and safety, which deals with occupational health. We have just released a report that highlights the dangers from asbestos to children, teachers and other people who work in schools. There is not one single business in this country that would raise the issue of people dying of asbestos-related diseases, especially children who go to school and who are in danger of being contaminated by asbestos and suffering from such diseases. As a former shipyard worker, I have seen people die of mesothelioma, which is the most horrible death that anyone could ever see, yet employers are still churning out asbestos to the third world because it has been banned in this country. That is what trade unions are about; that is what their job is about. It is to ensure that people go to work safely and come home safely. It is unfortunate that the hon. Member for Beckenham (Bob Stewart) is no longer in the Chamber, because he is a former member of the armed forces and it is a little known fact that more people are killed in the workplace in the UK than British service personnel are killed in armed conflict.
I am conscious of the time, Mr Owen, and all I want to say in conclusion is that I have worked for many good companies, none more so than Thales, which is a very successful and progressive business. It sees every benefit in having trade unions in the workplace. In fact, it goes out of its way to ensure that people have the opportunity to join a trade union. The rhetoric from Conservative MPs today is different from what is happening in the real world and it is really disappointing to see that the Conservative party, which has some decent people in it, has been dragged down by the young Turks.
Nigel Adams (Selby and Ainsty) (Con)
I will thank my hon. Friend the Member for Congleton (Fiona Bruce) for securing this debate.
I wanted to speak today because I am supportive of what trade unions do in representing the interests of their members, giving them a voice and standing up for their rights. Although the traditional view of the relationship between employers and trade unions has been that it is one of confrontation, that view is misleading; in most cases, employers and union representatives have a very constructive relationship.
Indeed, from the point of view of the employer many benefits come from unions. For example, trade unions can be a supportive and welcome presence in assisting with significant changes within a business and they also provide a forum for negotiation that often saves time and cost compared to dealing with employees on an individual level.
On a personal level, I am hopefully about to be elected as the new president of Conservatives at Work, which was formerly Conservative Trade Unionists. I pay tribute to Lord Taylor of Holbeach for all the work that he has done as the previous president. My colleague, my hon. Friend the Member for Harlow (Robert Halfon), is also very much involved with Conservatives at Work.
Conservatives at Work has played an important part in guiding the Conservative party in its work with trade unions, so I am involved in that and I have always remained supportive of the aims of trade unions. That said, I am uncomfortable with the idea of taxpayers’ money being used to fund union officials who are working in public sector roles, as was revealed in my own part of the world in June last year when it emerged that taxpayers are paying almost £200,000 towards the salaries of union officials at North Yorkshire county council while important local services were under threat, and indeed continue to be under threat.
On a wider level, it has been revealed that in 2010-11 public sector bodies spent £113 million on staff working on trade union activities.
Nigel Adams
I will push on, as I only have a couple of minutes to speak.
To clarify, £113 million of taxpayers’ money was spent. Broken down, an estimated £80 million was spent on paid staff time, with £33 million in direct payments, which was £7 million more in direct payments than in 2009-10. At a time when there is a lot of protest about cuts—due to the catastrophic financial position left by Labour, a party that I understand receives 90% of its funding from trade unions, although I stand to be corrected on that—it is not right that we have public sector workers who are being paid not to do the front-line service that they were employed to do. As the taxpayer is picking up the bill, the subscriptions that the unions raise from their members, which the man on the street would assume were being used to fund the union, can then be spent on other activities, such as campaigning or potentially keeping the Labour party afloat.
All of us on this side of the fence were thrilled at the Prime Minister’s recent public support for the campaign on union funding. He described the use of taxpayer funding to pay for trade union activity as unsustainable, both morally and economically, and I am pleased that we have the weight of the Government behind us.
I accept that under the Trade Union and Labour Relations (Consolidation) Act 1992, union officials have the statutory right to “reasonable time” off work, with pay, to attend to specified trade union duties, but let me say that again—it should be “reasonable time” off work.
Mr Gerry Sutcliffe (Bradford South) (Lab)
I congratulate the hon. Member for Congleton (Fiona Bruce) on securing this debate. I thank her for saying that trade unions are a force for good, and that has also been mentioned in the speeches overall.
I am a member of Unite and of Unison. Unite has contributed to my election funding for many years, and I hope that that continues for many years to come. If it was not for the trade union movement, I would not be here as a Member of Parliament. I was brought up as a trade unionist and my politics came from involvement in trade unions. We need to consider the history of how political development took place, particularly in the Labour party and its relationship with trade unions.
Since becoming a Member of Parliament and being involved in trade union activity, I have also had the dubious pleasure of being the Minister with responsibility for employment and employment rights for three years. For me, the debate hits home. Had the debate been entitled “Review of facility time”, I might have understood the need for a discussion about the issues that affect our local authorities, although I would not have agreed with the need for a review. If we agree with the argument for doing away with facility time for public union officials, what do we do about human resources teams in local authorities? Do we get rid of them next? In reality, these people, from all sides, contribute to making sure that democracy and diplomacy in employment relations goes on.
In my view, there is no case for looking at political levies. The political levy ballot was first introduced in 1980 by the Thatcher Government. The hon. Member for Witham (Priti Patel)) let the cat out of the bag when she talked about the political levy and the transparency of the Union Learning Fund. Most employers—perhaps the hon. Lady would like to check—would agree that that fund is one of the finest things that we did in Government, because it provided the opportunity for working class people to engage in training and develop through higher education and beyond. It was welcomed by most employers, particularly the CBI.
So what is the motivation for today’s debate? I do not think it is about facility time. I think it is about that core issue in the minds of some Conservatives who believe that the relationship with the trade unions and the Labour party is too close, and they want to undo it. That should not be the driving force. We know that the figure of £113 million has come from the TaxPayers Alliance. It states that £80 million was for paid staff time and £33 million was in direct payments, which equates to staff costs of 2,840 full-time equivalent staff. However, those figures do not calculate the savings made by individual staff in the work that they do. A modern country should be looking for good industrial relation patterns.
When I was the Minister with responsibility for employment, I saw the need to ensure that we had genuine co-operation in the workplace, whether it was in the private or public sector, and to ensure that we could get productivity and develop as a competing nation in the world. There will always be difficulties and different aspirations between employers and employees, and that is why we need good human resources departments and good, strong trade union bargaining. I hope that Government Members will reflect on this and not make it a politically motivated campaign. I hope that they heed the words of the hon. Member for Harlow (Robert Halfon), because we need a constructive dialogue with trade unions. If there are issues and problems with buildings and suchlike, it is better to deal with them in a positive way rather than wage a political campaign that will undo the good relationship that exists between employers and employees.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Thank you for calling me in this debate, Mr Owen. I congratulate my hon. Friend the Member for Congleton (Fiona Bruce) on securing it. May I make it clear at the beginning that I am not proposing to end up getting into trade union bashing, because I recognise that the unions play an important role in industrial relations and in making sure that everybody works together. May I also correct a possible misinterpretation? I understand that the term “pilgrim” refers to a trade union official who goes out and campaigns. In Plymouth, being a Pilgrim means being a supporter of Plymouth Argyle football club. I am delighted to say that I was there to see them draw 0-0 against Dagenham & Redbridge at the weekend.
It is important to recognise that in my city in my constituency, 38% of people work in the public sector, so there is a great deal of interest in employment rights and how the trade unions work not only with the city council, but with a whole series of different organisations. They work with the health service, for instance, and with Babcock, which is a significant employer in helping to ensure that our Navy continues to operate properly.
From my perspective, I find it difficult to go out on the doorsteps and explain to people that, at a time when we are making cuts to front-line public services and when the local authority is making sure that it empties the dustbins and that the potholes in the roads are filled in, the trade unions should end up being treated as a special case. I hope that the Government will ensure that there is significantly more transparency in how the trade unions operate. Perhaps the local authority should make a decision once a year about whether it wants to continue to make the facilities available.
I think that the trade unions have done a significant job, and they have a significant part to play. Indeed, during the discussions on Post Office privatisation, I met with trade unions and I encouraged them to get involved in trying to sort out the problems inside the Post Office, and I encouraged them to make sure that they were able to buy shares in that service. That is something that we may need to look at.
My final point—I am aware that lots of people wish to speak—is that we need to look at the trade union levy and ensure that people can opt in rather than having to opt out. It has to be a positive choice that people make. If it is that way round, we can have a level playing field for everyone to operate in.
Ian Lavery (Wansbeck) (Lab)
In the brief time that I have, I want to say that I believe that this is a callous attempt to attack the trade unions and trade union members in the workplace. Many of them are ordinary men and women simply seeking to do a valuable job. My hon. Friend the Member for Blaydon (Mr Anderson) —my very good friend and former mining colleague—said that he is not sure that anyone here has ulterior political motives: I am sorry to disagree, but I believe that that is the case.
Ian Lavery
I will not give way. It has been mentioned before that we want more transparency. Since the Tory Government took office, they have introduced a certification officer. We now have more legislation than any other democracy in the western world, and our trade unions are more restricted than anywhere else. My view is quite simple—there is a concerted attack on ordinary men and women. However, we should not be surprised. When any Government Member gets up and says, “My auntie used to work here, and my father was a miner”, we know that something is coming in the following sentence: kick the trade unions.
I disagree with several things that have been said. On 30 November, the day of the public sector strikes, the Prime Minister clearly stated in the House that he would review the facility time for trade unions. That was his reaction—to kick the trade unions for daring to have the audacity to speak up for their membership. However, it had been mentioned beforehand.
David Morris (Morecambe and Lunesdale) (Con)
Will the hon. Gentleman give way?
Ian Lavery
I will not give way. It had been mentioned at the Tory party conference by officials and Ministers who were proud to be trade union bashers and trade union kickers. That is why a lot of the new Tory MPs are thinking that this is the way to get a job in the party. They think, “Let’s start kicking the trade unions. That’s what we should be doing.”
I have been a trade union representative since the age of 16 or 17. I have been involved in both the private and public sector. By the way, the private sector represents about 40% of facility time, so it is not only public sector representatives who are paid for by taxpayers for facility time.
About the money that has been suggested is being paid by the taxpayer, in my experience, if I had any time off for facility time, I would have just received the wages that I would have received had I been at work. That is not even a saving. No one was put in my place, so there was no saving. It is misleading to suggest that there can be a huge saving in facility time, because, in the main, people are not replaced when they are doing facility time, and that is important.
I represented people in the mining industry. My facility time was about health and safety. What is more important than health and safety in the workplace? I visited people who had lost their husbands underground. They did not want to see the colliery manager or anyone from the management. They would ring up and say, “Mr Lavery, can you go and speak”—
Mr Aidan Burley (Cannock Chase) (Con)
It is a pleasure to serve under your chairmanship today, Mr Owen.
I, too, start by congratulating my hon. Friend the Member for Congleton (Fiona Bruce) on securing this important debate. The level of taxpayer funding of trade unions has clearly become a major political issue. As sunlight is the best disinfectant, it is important that such issues are debated honestly and openly in Parliament.
I am amazed at the churlish comments made by some Opposition Members in not congratulating my hon. Friend on securing the debate. The trade unions, over this Parliament, under a Conservative-led Government, will still receive more than £500 million of taxpayers’ money. I cannot think of any other issue that MPs feel should not be debated at all. We can argue about reforms to the national health service and the police, but when it comes to trade union funding, Opposition Members feel that it is somehow beyond the pale to even debate or discuss it. I can only think that they worry that when the public realise how much of their taxes go on funding the trade unions and not on front-line services, there will be a huge public outcry. They fear that the momentum for reform would be unstoppable.
Mr Burley
No, I will not.
We, on the Government side of the House, feel that the public have a right to know where their taxes are going. That is why my hon. Friend the Member for Congleton has done such an important job this morning in securing the debate on behalf of hard-pressed British taxpayers.
As my hon. Friend said, there is now widespread public and parliamentary concern about paid time off for trade union activities and duties, an issue that has been acknowledged by the Minister for the Cabinet Office and the Minister for Local Government. They are both looking at reforming that practice, known as public sector facility time.
I understand that the Cabinet Office is about to launch a consultation into the extent—indeed abuse, as pointed out by my hon. Friend the Member for Witham (Priti Patel)—of so-called facility time. I would be grateful to the Minister if he could update us on when the consultation will take place, what its parameters will be, when it will be likely to conclude, and what the recommendations for reform might be.
The issue this morning is one of basic principle: is it appropriate for the taxpayer to subsidise trade unions at all, and if so, to what extent? In the brief time I have this morning, I want to deal with the issue of principle, because as far as I can tell, it has never been properly explained or defended in public.
I listened carefully to the response of the right hon. Member for Wentworth and Dearne (John Healey) to the ten-minute rule Bill tabled by my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) on the issue. It was notable that in his response, at no point did the respected former Minister—I am sorry to see that he is no longer in the Chamber—defend or explain the principle of a public subsidy to trade unions. He opened his response by saying:
“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.”—[Official Report, 11 January 2012; Vol. 538, c. 201.]
That rather missed the point, because we have no problem with colleagues who are prepared to volunteer as trade union representatives, just with colleagues who think they should be paid by the taxpayer to be trade union representatives. In fact, if I was a volunteer trade union rep, doing a worthy job for a few hours a week because I believed in helping colleagues, I would be rather annoyed to think that whereas I worked for free, other colleagues felt that they needed to be paid to do it; in fact, some feel that they need to be paid full-time to do it. Where is the fairness in that? Why do some trade union reps need to be paid while others do not?
Huw Irranca-Davies (Ogmore) (Lab)
Perhaps I could defend that by pointing to Germany. Not only does Germany have the most productive manufacturing and industrial sector, it has one of the highest levels of public subsidy, recognising that productivity, health and safety and the competitive nature of its industry benefit from having active union-work force engagement. There is the defence. How would the hon. Gentleman respond to that?
Mr Burley
I am grateful for the hon. Gentleman’s intervention; at least he has had a go. I find it utterly counter-intuitive to claim that higher public services can somehow be delivered with public sector staff working for the union rather than in their jobs. There may be case studies of union reps doing valuable work, but equally, there are case studies of union reps working against the public interest, as has been exposed by MPs and the media, so I do not think the hon. Gentleman’s point holds.
In the minute that I have left, I want to point out a new statistic. The campaign that we formed, the Trade Union Reform Campaign, has pointed out that the TUC now receives three quarters of its funding from the public purse, runs a surplus of £40 million a year and is sitting on top of £1 billion of assets. The last time public sector organisations operated at that sort of profit was in the ’90s in the privatised utilities, which were struck with a windfall tax by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in ’97. We have to question now whether the trade unions should be subject to a similar windfall tax. They received £113 million last year and £80 million in paid time for staff. As I have said, under the Conservative-led Government, they will still get more than £500 million. It is right that we ask whether that money could be better spent on the front line. That sum buys a hell of a lot of nurses, doctors, teachers and police officers.
It is unfair for taxpayers to shoulder the burden. Trade unions should pay for representation in the public sector themselves, using their subscription income. An hon. Member said that that would somehow end trade unions. It will not; they can clearly afford to represent themselves, as we have seen with the huge sums that Unison has. Taxpayers should no longer be expected to fund the army of trade union representatives.
Alec Shelbrooke (Elmet and Rothwell) (Con)
It is a pleasure to serve under your chairmanship, Mr Owen. I congratulate my hon. Friend the Member for Congleton (Fiona Bruce) on securing the debate. It is important that things are debated. However passionate the arguments on each side are, there is nothing wrong with having this debate.
I have been disillusioned this morning. I am certainly not speaking in the debate to bash the unions. I do not believe that my hon. Friend the Member for Selby and Ainsty (Nigel Adams) wanted to bash the unions either.
Fiona Bruce
Will my hon. Friend confirm that not one single Member on this side of the Chamber has said anything other than to acknowledge the good work of the unions?
Alec Shelbrooke
When people look back through Hansard, they will see that much praise has been given to the trade unions.
I was a member of Unite for 11 years. My money ended up being spent against my hon. Friend the Member for Pudsey (Stuart Andrew), but there we go. I cannot say that I was ever funded by Unite. I believed in the trade unions, and one of the most important things about them comes down to the shop stewards. I have seen some good shop stewards—members of the Labour party and elected councillors. I was a Conservative councillor, and the shop steward in the university where I worked was a Labour councillor, but we were able to work together. A lot of it comes down to the shop steward on the floor, and I have seen progress being made.
I am not here to bash the work of the unions at all. The problem I think we have—I put this challenge to Opposition Members—is that if at the next general election, Royal Bank of Scotland turned up and said, “We have decided to give £10 million to the Tory party to campaign,” there would be outcry from the Opposition Benches.
Alec Shelbrooke
Yes, probably from ours as well; we would not be happy with it. That is an important point. There is some perception that we are union-bashing, but that is not true. I remember listening to the speech made by the leader of the Labour party at conference, just after he had been elected. He spoke about the dinner ladies who were told that they had to buy their uniforms and aprons. The trade unions got involved and made sure that they did not have to do that. That is important work by trade unions.
Everyone here likes to mouth off. We are the people who stand up and front up. We will stand up, debate and have an argument, but 95% of the people out there would sweat with fear at having to stand up right now to make arguments. That is why we need healthy, working trade unions.
However, there are some problems, and there is an easy way to overcome some of the perceptions about the funding between trade unions and the Labour party. It is simple: instead of having an opt-out of the political levy, let us have an opt-in. Someone would have to opt in each year, which then has to be audited. Where the pot of money from the opted-in political levy is spent can be decided by the trade union.
Alec Shelbrooke
Absolutely. The hon. Gentleman asks whether shareholders would be able to do it. Why not? We are trying to empower shareholders.
Mr McCann
Does the hon. Gentleman not concede that it has already been tried? The Conservatives introduced the Trade Union Reform and Employment Rights Act 1993, which forced trade union members to re-sign up to their trade unions every three years—a further attack. Does he also concede that while he may believe in trade unions, the contributions from the hon. Members for Cannock Chase (Mr Burley) and for Witham (Priti Patel) demonstrate that they are on a completely different planet from the one he is on?
Alec Shelbrooke
I would not say that my hon. Friends are on a different planet from me; their arguments just have a different emphasis. Many Government Members believe in trade unions, and find it demeaning to be compared to the Third Reich. It demeans the hon. Member for Blaydon (Mr Anderson), who said that we were going the same way as Hitler by trying to remove the trade unions. That devalues the debate today, which is about where the funding comes from.
Mr Stewart Jackson (Peterborough) (Con)
Is my hon. Friend aware of the Warwick I and Warwick II agreements? To get the policies that they wanted from a Labour Government, the trade unions dictated the policies to be enacted by a Labour Government in return for union funding.
Alec Shelbrooke
There are indeed many stories, but I want to return to the specific—
Jim Sheridan
On a point of order, Mr Owen. That statement is completely untrue. Trade unions do not dictate Labour party policies. The hon. Gentleman should withdraw that remark right now—
Alec Shelbrooke
Thank you very much Mr Owen. We have seen in the past couple of minutes where my frustration has lain, with people saying, “Unions do this” or “Union bashing”. That is not what the debate is about; it is about funding and how public sector money is used. Politics is about perception, and if there is a perception that public money given to the unions is then given to the Labour party, the best way to solve that problem is to tinker with the rules and have an opt-in, so that people can say where they want the money to go. Then the unions can say, “We have this many people opted in and this pot of cash, and we have decided to give it to the Labour party.” No one would argue with that. We cannot argue with that.
There may need to be some reform. The balance needs to be redrawn for some of the public sector workers working full-time purely on union business, but that is a different debate. Please do not make this an argument about union bashing. That is offensive to many Conservative Members who believe in the work of trade unions. I am not here to speak for everybody on the Government Benches, but I know that a great many of my hon. Friends very much believe in the work of the trade unions. A great number of us have been members of trade unions and have worked in places where we have seen their work, but that does not mean that the situation is completely okay; there are aspects that need reform, but debate is the best way to examine that.
Ian Lavery
The hon. Gentleman is being very conciliatory in his contribution. The political levy is covered in the Trade Union and Labour Relations (Consolidation) Act 1992. Union members must be balloted, whether or not they pay a political contribution.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I congratulate the hon. Member for Congleton (Fiona Bruce) on securing the debate. She said that trade unions are a valuable part of our civic society and that they do hugely important work on behalf of many of their members, and I very much agree with that comment. She went on to make a series of other points from which she drew conclusions with which I am afraid I cannot agree.
I am slightly surprised that she and some Conservative Members should so obviously want to attack the interests of hard-working people—the home help, the teacher, the nurse, the learning assistant, the dustman, the cleaner. Those and many others who work in the private and, in particular given today’s debate, the public sectors are not paid huge salaries. They are part of the squeezed middle and are seeing their finances hit hard by the Government’s VAT rise, for example, and by high energy bills, which Ministers will not act on. Many of them are extremely worried about whether they will have a job in six months’ or a year’s time.
If the hon. Lady and some of her colleagues have their way, the right of such people to be properly represented will be taken away. Thousands of hard-working families will lose that most basic of rights—the right to be properly represented when they need it most. That point was made by my hon. Friends the Members for Blaydon (Mr Anderson) and for Wansbeck (Ian Lavery).
Virtually all the staff who would be affected most by the hon. Lady’s proposals do not earn huge salaries, yet they still demonstrate considerable commitment and hard work in delivering some of our most basic and important public services. The Prime Minister once spoke of compassionate conservatism. I ask the hon. Lady and her colleagues, how is it compassionate to take away from often low-paid, hard-working employees the opportunity to be properly and professionally represented when they need it most?
David Morris
The hon. Gentleman referred to hard-working families. Does he not think that it is appalling that hard-working families’ taxes are funding people who should be working, but rather than doing their actual jobs, the taxpayer is paying them to be union officials pro rata?
Mr Thomas
With all due respect to the hon. Gentleman, I think that he has got completely the wrong end of the stick, as I will explain.
If an employee is facing sexual harassment, worried about safety in the workplace, about to lose their job or have their pay cut, and does not know where to turn when they have problems at work, trade union representatives—independent of their employers—offer a crucial place to turn. They are trained and experienced in handling such issues and in liaising with employers to resolve disputes and workplace problems before they escalate. They help to reduce the cost to the immediate employer and the social and human cost for the individuals concerned. They reduce costs to the employer and ultimately help to reduce the cost to the taxpayer, a point made by my hon. Friend the Member for Aberdeen North (Mr Doran).
Even if one accepts the figures in the TaxPayers Alliance report, which seems to have provided the context for the debate, union representatives amount to only 0.05% of the public sector work force, and, it must be said, they carry out a significant proportion of union duties in their own time. They have attracted a vast amount of Conservative MPs’ time. It is reasonable to wonder whether spending so much time on that issue is the best use of the House’s time. The national health service is in crisis, we have record levels of joblessness, the economy is in free fall, welfare to work schemes are falling apart, many charities and community groups are in a desperate search for funding and there are huge cuts to our armed forces. When all those issues deserve the attention of the House, it is a little surprising that Conservative Members want to focus on 0.05% of the work force.
As my hon. Friend the Member for Paisley and Renfrewshire North (Jim Sheridan) pointed out, interestingly, union representatives continue to enjoy the support of many business people, so much so that the former director general of the CBI, Sir Richard Lambert, described them as having
“a lot to give their fellow employees and the organisations that employ them.”
If such a senior figure from the business world was moved to endorse the role of union representatives, maybe Conservative Members should pause and consider whether the performance of organisations in the public sector benefits from union representatives paid for by the public sector, as my right hon. Friend the Member for Wentworth and Dearne (John Healey) and my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) said.
Research by the University of Hertfordshire examining the benefits of funding trade union facility time in the public sector suggests that the work of union representatives saves between £260 million and £701 million per annum. For every £1 spent on union facility time in the public sector therefore, between £2 and £5 is returned in accrued benefits. Many City institutions would be proud of that rate of return. I gently ask why the hon. Member for Congleton and her hon. Friends think that Britain can afford to waste such sums of money, because that is what would happen if her proposals were accepted.
The organisation that appears to have created the context for the debate, and indeed for other such debates, is the TaxPayers Alliance. Its report does not seem to be terribly well researched. It is certainly not up there with research from the Institute for Fiscal Studies or Barnardo’s and it certainly contains misunderstandings about how the Union Learning Fund works. When I was preparing for the debate, I was interested that the slightly calmer voice of the Minister for Further Education, Skills and Lifelong Learning praised the work of Unionlearn. The report refers to unions that do not exist and to organisations that are not unions, including School Leaders Scotland, the Retired Officers’ Association and, I am told, a credit union.
Mr Thomas
Not now, no.
Trade unions are heavily regulated, a point made by my hon. Friend the Member for Wansbeck. The right of employees in the public sector to be represented properly is a measure that not even Margaret Thatcher in her wildest moments wanted to abolish. I recognise that TaxPayers Alliance reports are to Conservative MPs what sweets are to little children: a temptation, a must-have, something to cry and shout about. Older heads, wiser heads—I hope Ministers—need to recognise that behind the sound and fury, trade unions play a quiet, useful and important role in helping our public services to run more smoothly. In the worst of times, when employees feel vulnerable and on their own, a trained and professional representative, a trade union representative, can play an important role in supporting them.
Albert Owen (in the Chair)
I am grateful to hon. Members for adhering to the time limit. I call on the Minister to reply.
The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)
I am grateful to the hon. Member for Paisley and Renfrewshire North (Jim Sheridan) for recognising that my friend and colleague, the Minister for Further Education, Skills and Lifelong Learning, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), lives in the real world. Some have doubted that in the past, so it was very helpful of the hon. Member for Paisley and Renfrewshire North to confirm that truth. However, he was entirely wrong to not congratulate my hon. Friend the Member for Congleton (Fiona Bruce) on securing the debate. I do so, and congratulate her also on how she presented her concerns. She always speaks with a great deal of personal conviction that is often rooted in real experience, and she did so again today.
I was disappointed that so many Labour MPs appeared to come here to frame the debate as the Tories bashing the unions. That is not the language I heard at all. Hon. Member after hon. Member stood up to recognise the valuable role of the unions, as I do too. No one in the Chamber needs a lecture about the value of good industrial relations, or the cost of bad industrial relations, and various Opposition Members spoke powerfully about that. For the avoidance of any doubt, the Government are not proposing any change in statutory entitlement to paid time off to carry out union duties. I am grateful to my hon. Friend the Member for Harlow (Robert Halfon) for pointing out that that goes with the grain of Lady Thatcher’s position.
In the context of the public sector, there is legitimate concern about the level of contribution from the taxpayer, about the issue of balance, which was raised by my hon. Friend the Member for Congleton, and—critically—the issue of transparency, on which my hon. Friends the Members for Witham (Priti Patel), for Plymouth, Sutton and Devonport (Oliver Colvile) and for Selby and Ainsty (Nigel Adams) spoke strongly. That is what we are debating this morning.
I start with the law. We recognise clearly that the Government have a role in facilitating the conditions for a positive relationship, including balancing the needs of the employer with those of the employee. That is achieved largely through the Trade Union and Labour Relations (Consolidation) Act 1992. As the title indicates, the Act brought together a variety of legislation that had been introduced and amended during the previous 20 years—a much more turbulent industrial relations climate. The Act covers a wide variety of issues, including recognition of unions in the workplace, the responsibilities of the employer and union representatives and, of course, industrial action. The extent to which the Act addresses trade union funding is in the context of union keeping of financial records, use of membership subscriptions for political purposes and, in the context of this debate, paid time off to carry out essential duties.
Mr Hurd
I will make more progress before taking interventions.
Aside from one or two specific instances, the Act does not distinguish between the public and private sector. The statutory framework recognises that there will be essential business that underpins the union’s formal role and helps to facilitate good industrial relations in the work force. The Act therefore provides for time off to carry out that business. In doing so—this is important to the debate—it distinguishes between duties and activities. Duties are the essential tasks that union reps must carry out. They could include collective bargaining negotiations, formal engagement in statutory consultation on collective redundancies, accompanying an individual to a disciplinary hearing, and can also include health and safety responsibilities. Activities include attending union annual general meetings, executive committees and workplace meetings to discuss the outcome of negotiations.
There is a statutory entitlement to paid time off to carry out union duties, but there is no such entitlement for union activities. However, some employers, including in the public sector, extend paid time off to activities as well. There is no right to time off for trade union activities that consist of industrial action. The amount and frequency of time off, whether paid or unpaid, is for negotiation between the employer and the union and depends on what is reasonable, taking account of all the circumstances. There is no statutory minimum or maximum. That ensures the necessary flexibility to accommodate the wide variety of different work forces and different day-to-day circumstances within those work forces. By that I mean that what is reasonable today may not be reasonable tomorrow if the circumstances have changed.
An ACAS code of conduct underpins the legislation. The code is comprehensive and, among other things, emphasises the importance of clear procedures and record keeping, as well as general considerations in determining what is reasonable. They include the size of the organisation and number of workers, the need to maintain a service to the public, and the need to ensure effective representation and communication with workers with a range of needs.
As I said earlier, at the heart of the framework is the importance of good industrial relations in maintaining an effective organisation. A reasonable amount of paid time off offers value for money for customers of an organisation and users of their services. For example, it can minimise working time lost due to disputes and accidents at work.
Some hon. Members mentioned the union modernisation fund. The latest round of projects is currently winding up and will be completed by early 2012. No further rounds of the UMF are planned, and no further funds will be committed to it. It is important, however, for Government to ensure that public sector employers manage the paid time off they grant their union representatives effectively to deliver the benefits I have mentioned.
I was asked about the proposed consultation in relation to the civil service, which was announced at our party conference. In answer to my hon. Friend the Member for Cannock Chase (Mr Burley), we have already announced that we will be consulting with the civil service trade unions on the following areas: reduction in overall facility time across the civil service; ending or limiting the practice of 100% of civil service employees’ time being spent on trade union duties and activities; ending paid time off for trade union activities, as opposed to duties; and reporting, developing a common system for reporting and monitoring across the civil service. That is the framework of the consultation, which I am assured will start imminently.
We will seek to review and rebalance the amount of paid time off provided to undertake trade union duties. The current level of facilities time offered to trade unions across Departments is very generous, and is certainly significantly more than that allowed in the private sector, or indeed in the wider public sector. While recognising the importance of effective representation in the workplace, we firmly believe that trade union facility time arrangements in the civil service are in urgent need of modernisation to reflect modern working practices. The consultation is focused on the civil service, where my responsibility as a Minister in the Cabinet Office lies, however other colleagues who have responsibility for these matters in the wider public sector have been asked by the Prime Minister to review the position in their sectors.
Renewable Energy
(12 years, 2 months ago)
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Caroline Nokes (Romsey and Southampton North) (Con)
It is a pleasure to serve under your chairmanship, Mr Owen. I am grateful to Mr Speaker for granting this important debate, because we are rapidly approaching 2016—a year that is demanding the Minister’s attention, given that security of energy supply, on which he is something of an expert, is increasing in importance.
I hope that this debate will feed into the wider discussion about the security of supply and be a useful contribution to the thinking on this issue. Given the three important issues that underpin that thinking—keeping the lights on, the diversity of energy sources and increasing the amount of renewable energy—I am pleased that hon. Members are here to listen to the debate.
The debate title is a testament to Britain’s growth in green technology and our status as a world leader in climate change awareness. However, as I will explain, for too long we have trailed behind countries such as Germany in the production of green energy, and we must take decisive action to secure support across the whole sector.
The reality is that attention within the renewables incentive debate has been centred on solar photovoltaic and wind energy. In the short term, river and wave energy may become a new focus. However, too little attention is paid to anaerobic digestion and other energy-from-waste technologies. The decoupling of the two subjects of waste management and energy production in the mind of the general public would be useful in overcoming hostility to the production of energy from waste.
Rehman Chishti (Gillingham and Rainham) (Con)
I pay tribute to the excellent work done by my hon. Friend in this regard. Does she think that we need to expand on the excellent work of companies, such as ACM Environmental plc, which has converted waste into renewable energy in schools in Kent? Waste is converted on-site, rather than outside in other areas, and used to heat water, for example, at those schools.
Caroline Nokes
My hon. Friend makes an excellent point. That is exactly what I shall focus on, albeit in Hampshire rather than Kent.
To date, the main focus of attention on energy from waste appears to have been on large-scale industrial production of waste-sourced energy. Advanced gasification is a key part of securing green energy and decreasing landfill: it is a carbon-lean process involving the efficient, high-temperature conversion of waste to base-load electricity. After the August 2010 announcement that energy from waste can be sold to the national grid, there is now real discussion about how local authorities in particular can secure income sources by selling green energy. For example, Air Products, a leading provider of industrial gases and environmental systems, has been granted permission for a 49 MW advanced gasification plant in Teesside, the building of which will begin next year. That development will create 700 jobs, divert up to 350,000 tonnes of waste from landfill and produce enough predictable, clean power for 50,000 homes. Air Products is precisely the sort of provider of clean energy that we should be encouraging to meet our renewables obligations.
Alec Shelbrooke (Elmet and Rothwell) (Con)
Does my hon. Friend agree that it is vital, in any incineration or gasification process, that the end result comes from harvesting recycled material along the way?
Caroline Nokes
Indeed; my hon. Friend is correct.
I should like to explore a number of issues facing the development of the renewable energy from waste industry outside the large industrial-scale plants that I have mentioned. I want to show how the current incentives are working and how we could adjust them to accelerate awareness and the development of the industry, particularly harnessing the potential for small-scale production, as well as production on an industrial scale.
I have called this debate because incentivising small-scale production could develop valuable employment opportunities, help small businesses and local communities generate their own green energy, grow UK exports and, most importantly, assist the Government to achieve secure, diverse and green energy.
As a country, we continue to produce too much waste and we need to promote better uses for our unwanted produce. Producing more energy from waste is therefore a win-win policy, but it needs to be carefully explained to the general public, as the subject is easy to misunderstand, especially when anaerobic digestion is not well communicated.
Anaerobic digestion is the process whereby biowaste from plant and animal material is converted by micro-organisms in the absence of air into biogas, which can in turn be used to generate green electricity and heat. Anaerobic digestion can help reduce fossil fuel consumption and greenhouse gas emissions—two essential goals in our fight against climate change. Almost any biowaste can be processed in that way, including food waste, energy-producing crops and crop residues, slurry and manure. The process can accept waste from our homes, supermarkets, industry and farms, ensuring that significantly less is sent to landfill.
Jim Shannon (Strangford) (DUP)
I thank the hon. Lady for bringing this important matter to Westminster Hall. Does she feel that, to incentivise the use of waste material from farms, for example, the Government need to consider financial incentives, because although every farmer would wish to do that, financial restrictions might prevent them from doing so?
Caroline Nokes
Not just financial incentives are needed; deregulation and, in some instances, making the planning process a lot simpler for agricultural enterprises are needed, too.
The National Farmers Union is a vociferous advocate of anaerobic digestion and argues that its use on farms reduces emissions of methane from manures and agricultural residues, improves air quality through the control and reduction of odours, such as ammonia, and leads to benefits to water quality from the improved management of nitrogen and other nutrients present in manures.
Another major advantage of anaerobic digestion as a renewable energy source is that the material left over at the end of the process—an odour-free digestate, rich in nutrients—can be used effectively as fertiliser. This could, and really should, become the standard fertiliser on the market. However, many domestic and business users do not understand the benefits derived from buying recycled products. A new petrochemical-derived fertiliser can cost a farmer between £200 and £400 per tonne, but the by-product from a micro-anaerobic digestion site is more likely to be of a consistent chemical and nutritional specification. Currently, the anaerobic digestion industry is struggling to sell recycled fertiliser, produced to resource action programme standards, at £5 to £6 per tonne. I would be grateful to the Minister if he expanded on how we can best explain the benefits of, and incentivise the consumption of, recycled fertiliser in farming and domestic gardening.
Many sites in the UK are producing biowaste. According to the Department for Environment, Food and Rural Affairs, the UK produces approximately 7 million tonnes of food waste and about 90 million tonnes of animal slurry and manure per year. With 23.6 million households and 41,000 farms, it is clear that the potential for green energy production is enormous.
The UK currently has 214 anaerobic digestion plants installed, of which 146 are sewage treatment sites. In comparison, Germany has approximately 9,000 farm-based sites and China has a simple, rural, domestic-scale approach to anaerobic digestion, which benefits millions of people. It is clear that the UK has far greater potential to make use of this technology. In light of Germany’s achievements in this field, the NFU’s commendable vision for 1,000 on-farm anaerobic digestion plants by 2020 seems quite modest.
There are almost unlimited possibilities for anaerobic digestion on a local scale. In my constituency, the patented technology of an innovative micro-anaerobic digestion technology provider, SEaB Energy, based on Southampton university science park, has produced a system that creates and generates power from waste inside a shipping container. Using that technology, the company has proved, both at the university science park and, locally, at Sparsholt agricultural college, that it is possible to implement micro-anaerobic digestion solutions. A number of other food producers, golf clubs and hotels are also exploring the benefits of using such technology across the UK.
All organisations create waste. SeAB is leading the way, through anaerobic digestion, in reducing our dependence on landfill by converting waste into valuable energy. I should welcome the Minister’s visiting and meeting the people who have developed this world-leading technology, so that he can see green energy in production.
There are several different options for anaerobic digestion, depending on the amount of energy required, and each has its own challenges. A centralised anaerobic digestion facility requires large quantities of biowaste to be collected and driven across the country, inevitably generating a strain on the existing road network and increasing the carbon footprint of the technology. It is also capital intensive, and the site-planning process can be lengthy.
By comparison, decentralised sites are arguably simpler to operate, quicker to build and easier to install and manage. Road haulage is largely eliminated and the waste producer benefits directly from using its own waste to generate its own green energy. I would be grateful to the Minister if he commented on how we can incentivise the many small waste producers, such as farmers, food growers, food packers, hotels, hospitals, schools or prisons—the list is almost endless—so that they can benefit from green energy throughout the country. In short, anaerobic digestion reduces the need for landfill, with the exciting possibility of creating sustainable communities with a consistent waste fuel power source.
The NFU is keen to ensure that smaller, farm-based biogas proposals are not disadvantaged by being labelled waste management. If we are to see the necessary growth in on-farm anaerobic digestion plants, it is important that they are subject to simple permits. I will be pleased to hear the Minister’s comments on that and on what work can be done with the Department for Communities and Local Government to ensure that light-touch regulation is encouraged among local planning authorities.
It is important to note that there is tremendous potential for the upgrading of biogas to biomethane for motor vehicle use as a tradeable low-carbon fuel or for direct injection into the natural gas distribution network. I understand that equipment for biogas upgrading is available from Germany, where such pipeline injection is growing, and in our constant search for fresh sources of car fuel, that is an extremely encouraging possibility.
Other sources of renewable fuel can be found in the waste stream, such as the conversion of used cooking oil into biodiesel, which is entirely sustainable and derived from a waste product. That would involve recycling almost 100 million litres of waste cooking oil each year, while helping the Government to exceed their greenhouse gas emission targets in transport by 8%. However, as highlighted by the recent report on environmental taxes by the Environmental Audit Committee, of which I am a member, the removal this March of the 20p per litre duty differential on such fuel will make it prohibitively expensive and high-blend users will have no choice but to return to fossil fuels. That will have a disastrous impact on the UK biodiesel industry, resulting in the loss of green jobs, as well as discouraging further investment in the development of new technologies in the energy-from-waste sector.
Ian Swales (Redcar) (LD)
Does my hon. Friend agree that such fuels should be taxed on their energy content and not on their volume? The tax on volume is one of the problems for the industry in getting going.
Caroline Nokes
My hon. Friend makes an excellent point, and there is much to credit in his argument.
I strongly urge the Minister to continue to speak to his colleagues in the Treasury, because I fear that, without continued support, we will jeopardise the significant steps that have already been taken. The energy-from-waste sector is full of innovative and in many cases ingenious ideas. I am conscious that we need a wide variety of energy generation methods to meet demand. No one form of green energy provides the whole answer, and we need a range of solutions, both large and small.
In summary, there are a number of questions for the Minister. First, does he agree that there is real untapped potential for small-scale energy-from-waste production to contribute to the secure, diverse and green supply of energy? If so, can he outline clearly how the potential for small-scale production can be encouraged and incentivised? Secondly, what changes to legislation and regulation—in particular to that coming from the Treasury—would be a prerequisite for the vision of small-scale energy from waste production to become a reality? Thirdly, what can be done to rebalance the debate, to support the broader market development of sustainable fuels from waste, including micro-anaerobic digestion and to ensure that the necessary incentives are in place for the sector to thrive? I thank the Minister for taking the time to address the issues, and I look forward to hearing his response.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
It is a privilege and a pleasure to serve under your chairmanship, Mr Owen. I thank my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) and congratulate her on securing the debate. She has given us an excellent summary of the benefits that such technologies can bring and a clear understanding of where she sees the barrier to their deployment. I want to go through where we see the opportunities and to say what we are doing to remove the barriers.
My hon. Friend has not been alone in the debate. I welcome the contributions of my hon. Friends the Members for Elmet and Rothwell (Alec Shelbrooke), for Redcar (Ian Swales) and for Gillingham and Rainham (Rehman Chishti) and of the hon. Member for Strangford (Jim Shannon), which all showed the understanding, depth of knowledge and interest in the issue that is present throughout the country.
I have already had the chance for a brief conversation with some of the people involved in SEaB. I am delighted with the opportunity to visit in the future and to see on the ground the work that they are doing in the constituency of my hon. Friend the Member for Romsey and Southampton North, but it is also important to put our discussion in the context of the wider energy debate, and that is how I wish to begin. She is absolutely right, however, to highlight the untapped potential of the sector, and part of our objective as a Government is to realise that potential in the most effective way that we can.
As my hon. Friend outlined, renewable energy has a vital role in our low-carbon future. By the end of the decade we must cut our carbon emissions by 35% on 1990 levels, and by the end of the next decade they must have halved. We also have the EU renewable energy target, which means that we must generate 15% of our energy from renewables by 2020. In order to meet that target, about 30% of our electricity and 12% of our heat will need to come from renewable sources. That is not only about meeting targets, because it is also the right thing to do, and we need to reduce our dependency on imported fossil fuels. Home-grown renewable energy can enhance our energy security and give us a greater degree of energy independence, helping to shield us from global fossil fuel price fluctuation, which seems to be in only one direction at the moment, as we see high prices for oil and gas. She also touched on the immense economic potential in renewable energy, and the sector could provide opportunities for up to 500,000 jobs.
In the Department of Energy and Climate Change, we have been working with the renewables sector to understand more effectively how much renewable energy can be deployed by 2020, and to identify the current constraints that must be addressed.
Rehman Chishti
The Minister knows that 6.7 million tonnes of food waste are being discarded each year. Are there any plans to ban completely food waste going into landfill? If so, what is the time frame?
Charles Hendry
My hon. Friend is aware that what we have been seeking to do is to give local authorities more say in how they should manage their affairs, rather than a top-down, Government approach. For many of us with landfill or land-raise issues in our constituencies, it seems absurd to put food waste into such facilities. At the end of the day, however, we want the local authorities to be the driving force in resolving such issues. In his own case, Kent is a beacon authority in looking at how to manage its waste issues.
Ian Swales
I thank the Minister for investing DECC money into an anaerobic digestion facility at the Centre for Process Innovation in my constituency. He is referring a lot to renewable energy, but does the way in which waste is treated under all our policies throughout the various Departments satisfy the renewable energy criteria and meet the simplicity requirements mentioned by my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes)?
Charles Hendry
My hon. Friend raises an important issue. For the first time, we are now moving towards a clear, cross-Department strategy on waste. That means looking at the hierarchy and at where we reuse and recycle, but also seeing that as part of that process there is residual waste, and getting an energy source from that is better than putting it into landfill and land raise.
Charles Hendry
I will give way briefly to the hon. Gentleman, but then must get on to the comments of my hon. Friend.
Jim Shannon
I recognise the Minister’s passion for the subject. He mentioned a Government strategy: will that include the regions such as Northern Ireland, Scotland and Wales as well, so that it is uniform and UK-wide?
Charles Hendry
We seek to work with the devolved Administrations but, clearly, different rules apply in different parts of the United Kingdom, where the different Governments have responsibility for such matters. If we have central control in Westminster over different aspects, we have the influence, but we obviously wish to work with the devolved Administrations to ensure that the strategy is as holistic as possible. The more that we can remove the barriers and have an integrated and holistic approach, the more effectively we can attract investment into the sector.
We have identified eight technologies that we believe will bring us closest to delivering those 2020 targets cost-effectively and sustainably. They are onshore and offshore wind, marine energy, biomass heat and electricity, ground source and air source heat pumps, and renewable transport. Biomass heat and power includes energy from waste technologies, such as anaerobic digestion, waste combustion and the new, advanced technologies of gasification and pyrolysis. We believe that those eight technologies collectively are capable of delivering more than 90% of the renewable energy we need for 2020.
Instead of just having targets, we are determined to show how we meet our objectives. It is easy for Governments to have targets, but then to leave them to a future Government to explain why they were not met. We are determined to put in place a clear road map that shows what barriers exist, and how we intend to overcome them so that we can be more effectively held to account in the process.
Last year, we published the UK renewable energy road map, which shows where we are now on those eight technologies, how deployment may develop up to 2020, and the actions that will need to be taken now to overcome the barriers to deployment. Although our evidence shows that we can meet our target of 15% renewables by 2020, we are clear that we need a rapid increase in deployment. At the end of 2010, renewable energy accounted for 3.3% of UK energy consumption, so there is a significant way to go.
Renewable electricity and heat technologies are generally more expensive than fossil fuel generation, and require subsidy to boost deployment, just as every previous new energy technology has done. Support is available under the renewables obligation, the feed-in tariffs scheme, the renewable heat incentive, and the renewable transport fuel obligation.
Julian Sturdy (York Outer) (Con)
The Minister talks about eight key technologies and delivering them affordably. I entirely agree with that, but will the road map be flexible enough to change if technologies advance with time? If one technology becomes more prevalent in delivering the green energy that we need, will changes be made to cover that ?
Charles Hendry
My hon. Friend makes a crucial point. We have set out in the road map the high, medium and low trajectories for each technology. A key element that may change is the cost of delivering them. For example, we are working with the industry on offshore wind to bring down the cost by 40% over this decade, and that is critical to the extent of its deployment. If the costs cannot be brought down, we must make choices on behalf of consumers to show that we are trying to deliver those renewable objectives at the least cost to consumers. Flexibility is an integral part of that process.
Despite the undoubted benefits of renewable energy, it must be cost-effective and affordable compared with low carbon alternatives. I acknowledge the valid point that my hon. Friend the Member for Romsey and Southampton North made in her introduction that the renewables industry and investors need stability to plan ahead. Uncertainty is often the greatest enemy of investment. I also appreciate that recent changes, particularly to the support for solar photovoltaic installations under the feed-in tariffs scheme, may have temporarily affected industry and investor confidence, although we are now seeing strong growth again in the number of PV installations. We are committed to delivering our goals in a way that minimises the impact on consumers’ bills.
In our measures to reform the support mechanisms, we have three objectives. They are designed to make the budget go as far as possible, and to maximise the number of people who can benefit from schemes. They will provide greater certainty for the industries concerned on the rates of return that they will receive up to 2020, and they will ensure value for money to consumers who pay the bills.
I understand that the scheduled banding review for the renewables obligation has caused some concern. Banding reviews ensure that as market conditions and innovation within sectors change and evolve—this point is directly in response to that made by my hon. Friend the Member for York Outer (Julian Sturdy)—developers continue to receive the appropriate level of support necessary to maintain investment. We have studied how much subsidy different technologies need. When new technologies need help to reach the market—for example, wave and tidal energy, which are emerging technologies—we have proposed increasing support, but when market costs have come down or will come down, we propose reducing the subsidy accordingly. That proposal will result in a lower impact on consumers’ bills than keeping the existing bandings, and will drive a higher level of deployment. Setting the bands for the period to 2017 also provides the industry with the certainty needed to make investment decisions now. The public consultation on the banding review has closed, and we will issue the Government’s response in the spring, confirming the banding levels moving forward. Legislation setting the new bands in law will come into effect on 1 April 2013.
I have mentioned the eight existing technologies that we have focused on in the UK’s renewable energy road map. Anaerobic digestion has, without doubt, an important role to play in both biomass heat and electricity generation. The United Kingdom produces about 100 million tonnes of food waste, manure, slurry and sewage sludge that is suitable for treatment by anaerobic digestion. When the coalition was formed in 2010, we stated our commitment to developing energy from waste through anaerobic digestion. I assure my hon. Friend the Member for Romsey and Southampton North and other hon. Members who have spoken that we remain absolutely committed to delivering on that commitment.
Last June, the Department for Environment, Food and Rural Affairs and the Department of Energy and Climate Change jointly published the anaerobic digestion strategy and action plan. It sets out our vision for anaerobic digestion, with an estimate of potential that could reach between 3 and 5 TW hours of electricity by 2020. Currently, there are only 172 MW of installed anaerobic digestion capacity in the UK, processing more than 5 million tonnes of material, and generating more than 1 TW hours per year. More is coming through the system. Just last week, Tamar Energy announced plans to develop 40 AD plants in the UK, with an installed capacity of 100 MW. In addition, we know of more than 100 plants that have received planning permission, and a further 80 that are going through the process.
It is clear that momentum is building and support for the technology is growing, but we recognise that significant barriers must be overcome for the sector to reach its potential. The anaerobic digestion strategy and action plan also sets out a joint Government and industry programme of work with 56 actions to tackle the key barriers to deployment. You will be grateful, Mr Owen, that I will not go through all those this morning. However, work is progressing on a range of actions, including disseminating information, particularly on regulatory controls; providing guidance on the costs and benefits of AD and best practice projects; developing skills and training for AD operators; building markets for digestate; and understanding the barriers to the use of biomethane as a transport fuel. Those pick up on most of the issues that my hon. Friend raised. An annual progress report on how we are moving to meet those actions will be published in the summer.
Our commitment to anaerobic digestion is also clear through the financial incentives that we offer. Anaerobic digestion is the only biomass technology supported under the feed-in tariffs scheme, which is aimed at smaller scale projects under 5 MW. Larger-scale projects are eligible for support under the renewables obligation. The renewable heat incentive supports biogas combustion below 200 kW thermal and the injection of biomethane at all scales into the national gas grid.
In addition, a £10 million loan fund is available from the Waste and Resources Action Programme to support the development of new AD capacity to divert 300,000 tonnes of food waste from landfill. WRAP is jointly administering, with the Technology Strategy Board, a fund designed to drive innovation in AD systems to bring down the cost of capital. Waste, including anaerobic digestion, is one sector likely to be eligible for initial intervention by the Green investment bank. In the meantime, a new team within the Department for Business, Innovation and Skills—UK Green Investments—has £100 million to invest in smaller green infrastructure projects, including AD, on a fully commercial basis. I hope that that reassures my hon. Friend that significant support is coming through, and that we have identified the issues.
I share my hon. Friend’s enthusiasm for smaller, more local plants. That is backed up by the study by consultants for the renewables obligation banding review that suggested that anaerobic digestion potential lies in stations with less than 5 MW of capacity. That ties in with our commitment to localism, which was raised during the debate, and is why, as part of the rural economy growth review, the Government have announced that they will promote the development of community-scale renewable energy projects in England through the establishment of a £15 million rural community renewable energy fund.
I also share my hon. Friend’s concern about the difficulties that anaerobic digestion operators experience in trying to sell their digestate as fertiliser. It is a valuable biofertiliser that can be used as a renewable source of critical plant nutrients, such as nitrogen and phosphorus. Although the UK has long-term experience with digested sewage, digestate derived from food wastes and other inputs is often regarded as novel by the market. There is a reluctance to accept it until evidence of its quality and benefits can be provided. The anaerobic digestion action plan contains a number of actions to build confidence, and I hope that my hon. Friend will continue to work with WRAP to ensure that the identified challenges are understood.
Scottish Football (Tax Liabilities)
(12 years, 2 months ago)
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Thomas Docherty (Dunfermline and West Fife) (Lab)
It is a pleasure, Mr Betts, to serve under your chairmanship for the second time during this Session. I have been asked to give the apologies of some hon. Friends who are detained in the Scottish Affairs Committee and the Treasury Committee. I am sure that many of them would otherwise have been here to discuss their take on what has happened in the Scottish game in recent weeks.
Hon. Members need no reminding of the importance that football clubs play in our communities north and south of the border. I am privileged to have two senior football clubs in West Fife. Dunfermline Athletic is in my constituency, and Cowdenbeath is some 800 metres over the border in the constituency of my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), the former Prime Minister. I want to say a little about the role of those clubs, and clubs like them, throughout Scotland and the rest of the United Kingdom.
On Saturday, I was lucky to be taken to Cowdenbeath’s home game against Brechin City football club as the guest of a local law practice, Stenhouse Husband & Irvine. While sitting with the club’s board of directors over lunch, I was able to talk about the state of the Scottish game as a whole, and the way in which clubs operate in the lower divisions. People give up their time and money to support clubs such as Cowdenbeath and Brechin City, and I was struck that they do so not for financial gain, or the glamour, or even the company of Members of Parliament, but because of their deep affection for the clubs in their communities, their love of football, and because they want to give something back to their home towns.
On Saturday afternoon, I had the opportunity to spend some time with the chairman of Cowdenbeath football club, Donald Finlay QC. You may not be familiar with that name, Mr Betts, but he is one of Scotland’s highest profile Queen’s Counsel, a former vice-chairman of Rangers football club, twice rector of the university of St Andrews, and someone who has enjoyed a colourful and entertaining history of involvement with Scottish football. While chatting to him on Saturday afternoon, I asked him why, having been involved with Rangers during their most successful period, highlights of which included narrowly missing out on a European cup, and achieving nine league titles in a row, he provided so much time and energy to support one of the lesser lights of Scottish football. I hope that Mr Finlay does not mind me sharing his answer. He said that he was Cowdenbeath born and bred, and was always proud of his home town. He simply wanted to put back a little into the community that he loves so much.
The second thing that struck me was that clubs in the lower leagues operate with far more fiscal responsibility than some of the clubs in the top two flights of Scottish football. Perhaps it is because those involved in the running of lower league clubs are local business men and lawyers that they have a healthier respect for a balance sheet, and recognise that a club’s expenditure must not exceed its income. It is undoubtedly a source of frustration to many smaller clubs that every month they must account for every penny while the so-called big boys of Scottish football are able to rack up debts of hundreds of thousands, if not millions of pounds, with no obvious means of repayment.
Thirdly, it is worth noting that those who work behind the scenes at our smaller clubs often do so for little or no recompense, and would normally have no expectation of receiving any praise or credit. For example, on Saturday, I discovered that the tannoy announcer at Cowdenbeath FC is Mr Jim Stark, who was editor of the Central Fife Times. Behind the scenes, one of the key cogs in the functioning of a successful match day is Mr Alex Haddow, chairman of the local community council. Without the tireless support of such individuals, and hundreds of other community heroes, clubs such as Cowdenbeath and Brechin City would not function. The strength of feeling in clubs further up the Scottish leagues is equally strong, and due to the full-time nature of their clubs, arguably their roots go even deeper into their local communities.
For the sake of probity, perhaps I should declare an interest at this stage. I am not only a Dunfermline Athletic season ticket holder, but my constituency office is located within the club. Dunfermline Athletic—or the Pars—like many other clubs, has invested heavily in supporting youth and grass-roots football. Indeed, the club offers classes for children from 18 months and through primary school to introduce them to the game, and to build their confidence and interpersonal skills. Those classes, with the support of their parents, help to develop children’s motor skills, and they provide a fun and safe environment so that children can integrate and develop their characters. The emphasis is, rightly, on fun and enjoyment, but it is a crucial role, for which clubs receive no financial recompense, and fills a vital role in society—some might say the big society, which the Minister is so keen on. Beyond primary school, football clubs, like those south of the border, have successful youth academies. Dunfermline’s under-14s and under-15s recently visited the city academy in Manchester, and were able to take part in a contest against players from the likes of Manchester City.
The financial situation in Scottish football clubs in recent years has been dwarfed by their counterparts in the English leagues. I shall provide some context for the finances of Scottish football. The television sponsorship deal in Scotland is only approximately 1% of that south of the border. Outside the old firm, players’ wages in the Scottish premier league are typically only £1,000 to £3,000 a week, which is a fraction of that paid to players in the premiership, the championship, or even league one. To put it simply, the annual wage of a Dunfermline player is less than the weekly salary of a Manchester City, Chelsea, or Manchester United squad player. None the less, clubs such as Dunfermline are expected to compete with the giants of Scottish football.
The recent financial events at Rangers football club cannot be seen in isolation. Before I talk about the impact on other clubs of Rangers going into administration, it is worth recapping the saga at Ibrox. The origins of Rangers’ problems date back over two decades. In 1988, David Murray bought a majority shareholding in the club for approximately £6 million. Mr Murray invested heavily in building a team that could not only dominate the Scottish league, but compete with the best of Europe. Something that is often forgotten is that when Rangers, under Murray and Graeme Souness, were building their successful side, which would go on to win nine league titles in a row, English clubs were banned from competing in Europe, so Rangers were able to attract players from England who, to play in Europe, either had to move to Europe or travel north of the border to play for the old firm. The list of players at Rangers during the late ’80s and early ’90s was a “Who’s Who” of Bobby Robson’s England team. The names will be familiar to every English fan: Chris Woods, Terry Butcher, Trevor Sinclair, Gary Stevens, Trevor Steven, Ray Wilkins and Trevor Francis. They were great players in a great team.
Rangers were able to use their dominance and ongoing success to attract some of Europe’s best players, such as Brian Laudrup and Paul Gascoigne. Unfortunately for the club, their ambitions were never matched by their income, and in 2004 those debts peaked at a staggering £72 million. However, in the next few years, Rangers reduced their debt to some £30 million by the end of the decade, according to their annual accounts. In 2010, Mr Craig Whyte confirmed to the stock exchange that he was in talks with Rangers’ owners about a takeover. In 2011, Mr Whyte formally bought the club for a notional £1, having agreed to take on the club’s debts. He promised Rangers fans that he would be able to service those debts.
Mr Nigel Dodds (Belfast North) (DUP)
I congratulate the hon. Gentleman on securing this debate. He referred to the history and the debts racked up by Rangers, but does he agree that that is commonplace today? Manchester City and Chelsea have massive debts, far in excess of what Rangers ever racked up. The only difference is that they have someone to stand behind those debts. The phenomenon is not new, and sadly it has not gone away, but it is not unique to Rangers.
Thomas Docherty
The right hon. Gentleman is correct. What is appalling about the Rangers situation, and has come to light in recent weeks, is that Mr Whyte did not have the money to service the debt. It has now transpired that in what I would regard as a most disgraceful act, Mr Whyte and cohorts borrowed money from Ticketus on the future sale of season tickets. In effect, Rangers fans paid for Mr Whyte’s ill-fated takeover; they are the losers, and I am sure that disgraceful situation will be recognised across the House.
Mr Gregory Campbell (East Londonderry) (DUP)
I, too, congratulate the hon. Gentleman on securing the debate. He has raised an important issue about Craig Whyte and the apparently underhand way in which he acquired a controlling influence at Rangers football club. Does he agree that if football clubs could allow fans a greater degree of controlling influence, à la the Barcelona model or perhaps in the way alluded to earlier in respect of Cowdenbeath, it might move us away from the insidious controlling influences of multi-billionaires who appear to use football clubs as playthings?
Thomas Docherty
The hon. Gentleman is absolutely right. I see that the hon. Member for Portsmouth North (Penny Mordaunt) is in the Chamber. She has championed that model for Portsmouth FC, so perhaps she will be tempted to contribute to the debate. There are some good examples of that model in Scotland. I referred earlier to Brechin City which, as hon. Members may know, had on its board Mr David Will, the FIFA vice-president for the British Isles, and a local lawyer, steeped in Brechin City. There are successful models of clubs, both large and small, where the shareholders are the fans. I hope that the Treasury will look at ways of trying to ensure that a fit and proper person test means not only that liars such as Mr Whyte are not put in charge of clubs, but that we can all have comfort in club finances for the future.
Penny Mordaunt (Portsmouth North) (Con)
I congratulate the hon. Gentleman on securing the debate, which I am attending as a Pompey supporter, so I share his pain and that of other hon. Members. We too have been badly let down, but I hope that the supporters’ trust will soon have a financial stake in the club.
Does the hon. Gentleman agree that when Her Majesty’s Revenue and Customs deals with clubs in such situations, it is important that it considers the club as a distinct entity, and does not tar it with the sins of the whole football community going back over many years? That has been my experience of the way that HMRC dealt with Portsmouth, and I would like to put on the record my thanks to HMRC staff, and to the Minister for facilitating dialogue. I hope that Rangers and other clubs have similar success.
Thomas Docherty
I am grateful to the hon. Lady for those comments. She has been a staunch champion of Pompey’s interests, and I know that she badgered the Minister on more than one occasion to ensure that the club got a fair hearing. She is right to say that each club needs to be considered on its own merits, and I will perhaps return to that point during my remarks.
Thanks to the Scottish press, which has been assiduous in trying to get to the truth of this sorry affair, it has been particularly disturbing to discover in recent weeks that HMRC has been engaged in a long-standing battle with Rangers over what the Treasury believes, and I believe, is a tax-avoidance scam instigated by David Murray. If Rangers lose this ongoing court case, it has been estimated that the club will owe HMRC somewhere in the region of £45 million in unpaid taxes from over the past decade.
On 9 January 2012, shares in Rangers were suspended from trading on the PLUS stock exchange for failure to submit audited accounts—alarm bells should have rung at that point. Mr Whyte, however, dismissed it as unimportant because he was by then, he argued, the dominant shareholder. On 5 February, Rangers were knocked out of the Scottish cup by Dundee United at Ibrox. On 11 February, Dunfermline hosted Rangers in the Scottish premier league. Finally, after months of speculation, on Monday 13 February, Rangers lodged their intention to enter administration at the Court of Session. Mr Whyte told reporters that, in his estimation, the club’s final tax bill could amount to £75 million—an astonishing amount. The following day, the club appointed Duff and Phelps as administrators. The SPL deducted 10 points from Rangers, which left them 14 points behind Celtic.
Rangers entering administration has not simply changed the dynamic of the title race but has had a devastating impact on three groups of people: first, the staff—both playing and non-playing—of Rangers FC; secondly, the companies that are owed money by Rangers as creditors; and thirdly, the other 11 members of the Scottish premier league, which is the group that I wish to raise with the Minister today.
No one should have anything other than sympathy for those who face losing their jobs at Ibrox, in particular those who work behind the scenes and are not millionaires, and who will not easily find employment in the current economic climate.
There are two distinct yet equally important categories of club. Two clubs in the SPL have claimed that they are owed money by Rangers for ticket sales, and I will explain their situation for the benefit of the House. Under the rules of the Scottish Football Association and the SPL, the total gate receipt for a league game belongs to the home club. It is standard operating practice for the away club to sell tickets for their end of the ground, but under the rules of the league, that money must be paid to the home team within seven days of the fixture taking place, minus any pre-agreed handling fee. The money is not the property of the away team, which is merely the handling agent.
For games in the Scottish cup, however, ticket sales for the whole ground are split equally between the two clubs, minus any operating costs, and the home team get to keep any proceeds from hospitality, refreshments, or programme sales. Under SFA rules, the two teams that have sold tickets do not have any right to count those ticket sales on their balance sheets, as they are merely holding agents and the money is to be put into the pool of gate receipts for the cup tie as a whole. In other words, the two clubs are merely acting as agents; it is not their money.
When Rangers entered administration, the club and its administrators, Duff and Phelps, refused point blank to hand either amount of money to Dundee United or Dunfermline, arguing that it should go into the pot of credited money. Let me be clear and send a message to Rangers’ administrators: that money does not belong—and has never belonged—to Rangers. Holding on to it is not only morally wrong, it is nothing short of theft.
What makes matters worse is that members of the Rangers board of directors were in the directors lounge at East End Park on the Saturday in question. They looked their counterparts in the eye, and told them that on Monday the money would be transferred to Dunfermline Athletic by BACS payment. It is utterly inconceivable that on that Saturday afternoon, the board of directors, which included Mr Ali Russell, did not know that on Monday afternoon they would be filing papers with the Court of Session. For the two clubs involved, despite the support of the SPL and the SFA, it will probably take months to recover the money to which they are legally and morally entitled from Duff and Phelps.
The second category of club involves any club in Scotland—or elsewhere—that has entered into financial transactions with Rangers, for example over the transfer of players. We know that at least one club, Heart of Midlothian, stated that it is owed close to £1 million for the transfer of a player to Rangers. It is in a more complicated situation—one that you will be familiar with, Mr Betts—concerning the rule of football first creditors. As I understand it, Scotland does not have the same rules as England about football first creditors, but that is an issue of ongoing legal dispute between the clubs, HMRC and the creditors.
It is more than likely—in fact, I have been led to believe—that other clubs, which I will not name because they have not asked to be named, are also owed money for various transactions and are in a similar situation to Hearts. As you will see, Mr Betts, these are not insignificant sums, particularly given the parlous state of Scottish football as a whole. Scottish football faces several months of uncertainty and disruption while the financial affairs of Rangers are sorted out.
Before I set out what HMRC should be doing going forward, it is worth reflecting on its role in allowing the situation to occur in the first place. In recent months, every Member of the House will have been visited by the owners of local businesses, asking for assistance in working with HMRC to deal with short-term cash flow challenges. The sums involved are often not large. However, HMRC is not exactly known for adopting a sympathetic or flexible approach to assisting local companies with problems.
Indeed, the Minister will probably recall correspondence between him and me before Christmas about one of my local businesses, which despite many years without a single missed or late payment, had experienced a short-term problem and found HMRC to be unbending and—dare I say it?—uninterested in its problem. People can imagine the surprise felt by those businesses, many of which have contacted me in recent days, when we learned that HMRC had not received any payment from Rangers for pay-as-you-earn or, apparently, VAT since last May and that the sums for PAYE and VAT have now reached, according to the Scottish press, some £15 million.
I am not criticising HMRC per se for the decision not to require payment from Rangers. I do, however, believe that it is wrong that the club has been treated differently from not only any other club in the league, but thousands of small and medium-sized businesses in Scotland. There are serious questions that require proper answers, and I hope that the Minister can provide some of them today.
First, it is inconceivable to everyone, frankly, given the sums and the time period involved, that HMRC allowed this situation to develop unilaterally. Can the Minister confirm to the House whether any UK Ministers were aware of the size and severity of the non-payment by Rangers, and whether any discussions took place among UK Ministers and between Ministers and HMRC about possible courses of action? Will the Minister also confirm whether any representations have been received from the Scottish Government, either before or after Rangers went into administration, on the issue of its tax liabilities?
As I said, I do not criticise the decision of HMRC not to force payment of moneys due. However, I believe that given the knock-on effects on the other 11 clubs and the fact that the integrity of the Scottish premier league season itself is now at risk, HMRC must take proactive steps to support the other 11 clubs. In short, I would like HMRC to carry out the following actions, and I would be grateful for the Minister’s confirmation that HMRC will indeed do so. HMRC should now proactively contact the other 11 clubs to establish what financial liabilities they have as a result of Rangers going into administration. HMRC should then work constructively and sensitively with the clubs and the SPL to ensure that none of the other clubs is unable temporarily to meet their obligations to the taxpayer.
To be clear, I believe that it is right and proper that by the end of the season, all 12 clubs should meet all their financial obligations to HMRC and the taxpayer, but they need to be given the breathing space to sort out the sorry mess created by Mr Craig Whyte. I urge the Government to ensure that all the other 11 clubs pay in full the sums owed to HMRC by the time of the last whistle at the end of the season, but that individual packages of payments can be tailored so that financial penalties are not incurred by them as a result of the actions of another—indeed, the largest—club.
I would be grateful if the Minister could also set out what contact he has had, if any, from the Scottish Government since Rangers went into administration to offer assistance to the clubs or to the SPL to meet their obligations. I would be grateful if the Minister could meet me in the coming days if there are any questions that he feels unable to answer in a public forum, so that we can further discuss the crisis in Scottish football.
Damian Collins (Folkestone and Hythe) (Con)
I just want to make a few comments on this important subject. I will not claim to share other hon. Members’ expertise in Scottish football. No doubt, other hon. Members, particularly from Scotland, will speak with a great deal of insight about the situation at Glasgow Rangers football club. However, I think that the hon. Member for Dunfermline and West Fife (Thomas Docherty), in opening the debate, touched on a number of important points that are relevant to football in Scotland and in England and relate to the financial administration of the game—in particular, the football first creditors rule.
There is no doubt that, in the case of Rangers, the losers are the fans of the club and other clubs and businesses to which it owes money. They are the people who have lost out as a result of what has happened. The failure of a club of its size has an impact in destabilising the structure of the league, so in some ways everyone involved in football in Scotland is affected, whether or not they are directly employed by or associated with Rangers football club. The hon. Gentleman set that out very clearly.
I think that there is a big issue to do with the football creditors rule. The caution that I would express about it in relation to Scotland is that it has had a damaging and destabilising effect on the game in England. It cannot be right that when a club fails and goes into administration, its creditors, if they are not within football, might get a penny in the pound. We might be talking about a local business that prints the club’s programmes or a local builder who had worked on its ground. When Leeds United went into administration, the West Yorkshire ambulance service got pennies in the pound or a penny in the pound. However, footballers who are owed salaries and football clubs in different parts of the country that are owed transfer money get their money in full.
The hon. Gentleman made a very good point about ticket sales—money that is supposed to pass directly from one club to the other. He highlighted that particularly well. It is unfair to other creditors of football clubs—community businesses working alongside a club, perhaps employing fans of that club—that they lose out massively.
It would be a good thing for football if clubs had to take a stronger interest in each other’s financial performance when they entered into financial transactions with each other. A club would really have to think, when it sold a player to another football club, “Can this club afford to pay us?” At the moment, clubs know that that risk is guaranteed by the football first creditors rule, so they are more likely to sell players to clubs that cannot really afford them.
The type of discipline that I have described would be good. It might help to bring about something that is badly needed in football in England and Scotland—some deflationary pressure on players’ salaries and transfer fees. That is where the money is going. There has never been more money in football than there is today, yet there have never been so many football clubs failing financially.
Thomas Docherty
The hon. Gentleman has been a big champion of football reform. Does he not accept, though, that the sums of money in Scotland are very different from those in England? The reality is that two clubs in Scotland hold 90% of the revenue and, in effect, bully the other clubs in Scotland.
Damian Collins
The hon. Gentleman makes a very important point. The failure of Rangers in Scotland has a much bigger market-distorting impact on Scottish football than the failure of Leeds United, Portsmouth or another large club in the English premier league would have, so it is a much more acute problem. That is an area where greater transparency on financial performance and disclosure between clubs would help. However, that is not something that the clubs should be allowed to do on their own. They require help from the governing bodies and, where necessary, from HMRC as well, so that that can be properly policed. I agree that it would be very difficult for smaller clubs in Scottish football to start calling the shots with the old firm. That is a problem, but it is one where the competitions have a role to play.
Where clubs owe money to the taxman, that is a serious matter, as it is for any other business. The hon. Gentleman made that clear in his speech. Businesses in our constituencies—we have all had such experiences in the past year or two—have problems because they are in arrears; HMRC is coming after them for the money; and they ask for help. It is a very difficult situation to be in. Businesses understand that if they owe money to the taxman, it is a serious issue, so how is it that football clubs have been allowed to build up large debts?
When Leeds United went into administration, the taxpayers of the United Kingdom lost £6 million in unpaid taxes. Why was it allowed to get to that stage and to get that bad? HMRC should intervene, but the competition organisers should be keeping an eye on the tax payments and how up to date they are for their clubs. The premier league in England has made some progress with that. It even has a system where clubs can have television money or prize money withheld from them if they owe money to the taxman. That money might go straight to the taxman. The clubs have to understand that they have to pay their bills just like any other business.
It is unfair for the clubs to subsidise spending that they cannot afford by securitising their ticket sales, selling their future gate receipts, borrowing money from their banks until they cannot borrow any more, borrowing money from the local businesses that they engage with and owe money to and borrowing money from the taxman. They cannot keep on borrowing money at every opportunity until there is none left. That has to be stopped, and the tax authorities have a big role in doing so, with the support of the competition organisers. That is one of the reasons why the Culture, Media and Sport Committee, of which I am a member, has recommended that there should be a licensing scheme for football, so that the football authorities can keep an eye on the financial performance of clubs and ensure that they are not getting into too much debt.
There is also the introduction by UEFA of the financial fair play rules. In Scotland, just as in England, there will be many clubs playing in the top division that will have a chance of qualifying for European competitions—certainly the Europa league, if not the champions league—that will want that licence. They will understand that they have to be able to balance their books in the medium term. That will be an incentive to clubs to ensure that their financial performance is better in the long run. We should be putting our own house in order, however, and the competition organisers have a big role to play in ensuring that that happens.
There is a great role for HMRC in ensuring that tax liabilities are paid. There is a role in getting rid of the football first creditors rule.
Thomas Docherty
The hon. Gentleman is making a compelling argument, but perhaps I could tempt him to say something about clarity of ownership as well. Part of the issue with Leeds United in particular was the uncertainty over who owned which assets. Will he speak about that?
Damian Collins
The hon. Gentleman pre-empts the final thing that I wanted to touch on in my remarks and the subject of my ten-minute rule Bill, which I will introduce on 13 March and which is about the ownership of clubs and assets. It is an important area and one where HMRC could be prevailed upon to help. When Leeds United failed, there was uncertainty over who took over the club’s liabilities. It was taken over by a beneficial trust and the investors in that trust were never made known. There were allegations of a relationship perhaps between FSF, which took over control of the club, and some of the club’s other creditors. That was never known, because we never knew the identity of those investors. It would help football a lot if there was transparency over the ownership of clubs and clubs’ major assets, such as training grounds and stadiums, so that we can see who controls them and where the money comes from.
There have been allegations that certain people who represent the brass plaque of the ownership of the club are not the source of finance for the real ownership of the club. I do not understand how the fit and proper person test can be applied to a club’s ownership if no one knows who that person is in the first place. We do not know who owns Coventry City, who currently play in the second tier of English football. Until last summer, we did not know who the owners of Leeds United were either. That cannot be allowed to continue. Certainly, if clubs are failing and the taxman is losing millions of pounds in revenue, businesses and local communities are losing money because the clubs owe them money and the obscurity of the clubs’ ownership causes further concern and a lack of confidence, that needs to be resolved.
The ultimate way to resolve who owns football clubs—again, HMRC may be able to help us on this—is to understand the source of the finance. People might assume ownership or the ownership might be from a fund that is registered in Nevis and operated in Switzerland. Where does the money come from? HMRC has to look at that routinely. HMRC and football clubs’ banks have to be satisfied that football clubs are not being bought or injected with cash that may have come from uncertain or dubious sources, so that needs to be followed.
I feel that HMRC should launch a retrospective investigation to determine what the source of finance was for Leeds United and who owned the club, so that if there was any uncertainty about the club’s ownership and who was involved in putting in money to take it out of administration, that might be pursued. We have a right to know what happened in that case and the tax authorities may be the only body that can pursue that.
Poor administration of football clubs creates a big debt to society, which communities around the country are paying. We should send a lesson out that we want greater transparency over ownership and greater transparency of finances between clubs and a more responsible attitude from clubs in their transactions with each other, to avoid the big impact that we feel at the time and that we see with Rangers currently of the cost of failure. That is the cost to fans, local businesses and the competitions in which they compete.
Pete Wishart (Perth and North Perthshire) (SNP)
I congratulate the hon. Member for Dunfermline and West Fife (Thomas Docherty) on securing this important debate. He will know that I have spent many a fine afternoon on the terraces of East End Park as a native of Dunfermline, supporting the mighty Pars. My affections have now transferred to the mighty Saintees of McDiarmid Park in Perth. I know that it is very much to the hon. Gentleman’s disappointment that almost the entire length of the Scottish premier league separates Dunfermline from St Johnstone just now.
The hon. Gentleman mentioned two other clubs in his contribution. It was a bit remiss of him, when talking about Cowdenbeath, not to give their nickname, which I am sure that you, Mr Betts, are bursting to know. They are known as the Blue Brazil, a nickname that could never be more deserved. I remember when my grandfather used to take me to watch the cup games against Cowdenbeath, being a native and resident of West Fife, where the league support was for Dunfermline. I went to Central Park to watch the cup games when Cowdenbeath were competing. That was a forlorn activity back in the 1970s, because on only a couple of occasions did Cowdenbeath manage to get past the second round. He also mentioned Brechin City, which used to be in my constituency, in north Tayside. What is notable and significant about Brechin City is that it is the only professional football ground with a beech hedge as its border. A lot of Scottish football fans liked to go along. There were the bridies at Forfar Athletic and the beech hedge at Brechin City.
Enough of my tour around the football grounds of Scotland; let us get on to business. I think that everybody here is a football fan, but where on earth are the rest of my Scottish colleagues? There is only the hon. Member for Dunfermline and West Fife. We get so few opportunities to discuss Scottish issues, particularly important Scottish issues about football. We are all proud that we represent football clubs in our constituencies. I have St Johnstone, a fantastic team doing well in the premier league, but where are my Scottish colleagues this afternoon? It is not as if they get loads and loads of Scottish business in this House. Not one of them could be bothered to turn up today to discuss the biggest crisis that is facing our national game. That is a disgrace, which says a lot about my Scottish colleagues when it comes to debating these important issues.
We have never had a crisis like this one. It is totally unprecedented and how it will end is anyone’s guess, but the nature and the face of Scottish football will probably change dynamically because of what is going on.
Thomas Docherty
First, some colleagues have been detained at Select Committees this afternoon. Secondly, does he agree that many colleagues are nervous about discussing what has happened with Rangers, because it is difficult to have a rational, sensible debate about the Scottish game without many of our constituents taking umbrage at us?
Pete Wishart
I do not know that that is true. I know that there is a bit of interest in this debate: one only has to look across the corridor from here. That does not excuse anything, however. This is important and it is unfortunate that there are not more Scottish colleagues here to debate what is probably the biggest crisis that we have seen in our game. This deserves and requires proper debate and it is unfortunate that we will not have that today, because this crisis deserves to be dealt with as sensitively as possible.
I listened carefully and closely to the remarks of the hon. Member for Dunfermline and West Fife. Where I can go along some way with him is that there is a real desire for a solution to this problem. There has to be a solution, because it is almost inconceivable to imagine Scottish football without Glasgow Rangers. They have 130 years of history and tradition. They have huge support—some 50,000 home fans go to watch Glasgow Rangers at a home game every second week in the city of Glasgow. To have that taken out of our game would have a significant and deep impact on the ability of the SPL to continue to produce a platform that will engage and encourage people and ensure their support.
It is not just about ticket receipts. When Rangers come to St Johnstone, it is the biggest weekend that we have in Perth. It is not just the inflated gate that we get by playing one of the old firm; it is also some of the activity spin-offs for Perth. It is not just about the pubs on match day. Glasgow Rangers supporters may choose to take a day either side of the game—the Friday night or the Saturday evening—so our hotels and restaurants are busy. There are also the other activities that go on within the city. To lose that would be to lose a significant amount of income and economic activity, which would be very much missed.
There is also the issue of television rights. As the hon. Member for Dunfermline and West Fife said, they involve a fraction of the sums for television rights in England, but they represent a massive income for the Scottish game. If there were no Rangers, what impact would that have on the television rights sold to ESPN, Sky and the BBC, which play a massive part in the incomes of so many other Scottish football clubs? We would also miss the drama and spectacle of old firm games, which are enjoyed and appreciated not only in Scotland and the rest of the United Kingdom, but throughout the world.
Thomas Docherty
Just for the sake of clarity, it might help to reiterate that if either half of the old firm is not in the SPL, the contract with the TV companies falls. It is therefore in the SPL’s interests to treat Rangers as a special case because of those knock-on effects.
Pete Wishart
I am glad the hon. Gentleman mentioned that. He is absolutely right that that is one possible consequence of losing Rangers. That is why we should do all we can to ensure the ongoing survival of Glasgow Rangers football club.
Damian Collins
Glasgow Rangers is too big to fail, and they will find a way of restructuring their debts and coming back, but does the hon. Gentleman share my concern that the real long-term losers will be small businesses and other football clubs?
Pete Wishart
The hon. Gentleman is spot on. There is, of course, talk and speculation about what happens if Rangers are unable to come out of administration. Indeed, the Scottish press, particularly the sporting press, have a fascination with the old firm, and we read about it almost every day. However, the hon. Gentleman is right that some of the small businesses that are expecting payment from the administrators will suffer a massive loss. That is a real issue, and I am grateful to him for bringing it up.
Football is our national game. All our football clubs play an enormous part in our economic activity and make a real contribution to our communities and constituencies. The Fraser of Allander Institute estimates that the old firm’s economic importance to Glasgow and the rest of the Scottish economy amounts to £190 million. More than 3,000 full-time jobs depend on SPL football, and £200 million is spent on related commercial activities in Glasgow alone. According to the Rangers annual report, the direct economic activity generated by the club is in the region of £56 million.
Most importantly, there is also the issue of what happens to the 331 people directly employed by Rangers. They must be absolutely paramount in our considerations, and I hope some solution is found so that they can continue to serve in their jobs.
This is not, however, just about clubs’ contribution to our economy, important and significant though it is. There is also the value professional clubs have for our communities, and the hon. Member for Dunfermline and West Fife mentioned that. We can all see the infrastructure that exists and the clubs our young people are encouraged to participate in. We know that our football clubs make an immense contribution to our communities. According to the SPL’s 2011 community report, 20,000 people participate in community projects weekly, and SPL clubs spent £8 million on community activity, which is no small sum.
There are also the fans in Scotland. I know the audience for SPL football has diminished, but 3.2 million people still attend SPL games each season, and a further 76 million watch them on ESPN, the BBC or Sky. Football is therefore a big business, which contributes much to our economy and our communities, and we must ensure that we respond to the current crisis with the sensitivity it deserves and requires. Scottish football is in a precarious state, and it remains a fragile product, so it can ill afford to lose one of its major protagonists.
Of course, this is not just about Rangers. Several of our clubs are teetering on the brink of financial collapse and ruin. I just wish they could all be like St Johnstone, which is run so perfectly and effectively by Geoff Brown, its chair. It never gets into debt, it always ensures it looks after its liabilities and it never has a problem with HMRC, but that is not the case with many of the clubs in the SPL. I am thinking not just about Rangers, but I will not mention the other clubs, because we all know which ones are experiencing real difficulties and pressures.
We have seen what happens when clubs cannot meet their responsibilities and liabilities. Dundee and Livingston went into administration. We have also seen one SPL club—Gretna—go to the wall in the past 10 years. It was not a particularly great example, and I doubt whether other clubs would like to replicate its business model.
These are tough times, and gates are falling. We have heard from the hon. Member for Folkestone and Hythe (Damian Collins) about the pressure of football wage inflation and how it must be brought under control. The hon. Member for Dunfermline and West Fife was of course right to mention that SPL football is totally different from the English premier league or first division, and only the wages in the old firm are similar. However, some clubs have tried to replicate what we have seen elsewhere and to buy success by buying expensive players. They have tried to compete with the old firm and they have got into all sorts of difficulties. That is probably one of the reasons why Dundee football club, in particular, experienced the difficulties that led to its going into administration. There is a demand all the time to buy more expensive players, because that is what the market dictates, and clubs are encouraged to fork out money. However, gates are falling, and there is any amount of competition from other activities for the time of constituents, who might otherwise go to watch football games.
We all accept that our football clubs must meet their financial obligations. Everybody in every business must pay their tax—it is as simple as that. They must pay it on time and they must ensure that any business plan is totally predicated on meeting their tax liabilities. However, I am sure I am not the only Member in the Chamber who will have put the case for businesses and individuals in his constituency who have got into trouble over their tax liabilities. I do not know how many letters I have sent to HMRC on behalf of small businesses and people who have got themselves into difficulties. It is absolutely right that people also make representations on behalf of Glasgow Rangers because of its significance to Scottish football and the number of jobs that depend on it, as well as its history and tradition, its success and its value to the SPL.
The club is in a mess. The hon. Gentleman mentioned the current regime, which has been a total disaster—we cannot call it anything other than that. Once Craig Whyte took over its debts, something was always going to happen. He did not have the money to ensure the club could get out of its difficulties. What he did with Ticketus was appalling, and there will now be an SFA investigation into the Ticketus deal. There will also be an investigation to see whether Craig Whyte is a fit and proper person to run a football club, and we will have to see the details. Again, it is the fans who suffer, and the people who work in the club have been the major recipients of all the bad news and all the doom and the gloom.
Right now, the administrator is responsible for running the club. In the next few days, Duff and Phelps expect to announce the first round of job losses, which will first impact on the playing staff. There are outstanding issues of payments to other clubs, and I have heard the representations from Dunfermline football club that it should be paid. The hon. Member for Dunfermline and West Fife is right that money should be paid to clubs that are owed it, and Rangers have no right whatever to retain it. However, the job losses show the real impact that going into administration has on people’s careers and jobs.
The hon. Gentleman talked about the Scottish Government’s role, and they stand ready to offer assistance to anyone affected by job losses. They have said they will do all they can to keep in contact with the administrator and to be available to provide support and assistance if there are job losses. In addition, there is the PACE—partnership action for continuing employment—programme in Glasgow, which has offered to provide any assistance it can if there are job losses. PACE has offered Duff and Phelps assistance almost daily to take things forward, and there have been several conversations to that effect. This is a developing and emerging situation, and Scottish Ministers and PACE are keeping their eye on it.
Thomas Docherty
Perhaps the hon. Gentleman can provide some clarity, because he speaks on sport for the Scottish National party. He will be aware of reports in this morning’s newspapers that the Scottish Government are apparently offering all the assistance they can to the Scottish open, and the assumption is that financial assistance may be forthcoming. Does the hon. Gentleman agree that if the Scottish Government are going to put money into the Scottish open, they should also see what financial assistance they can provide to the SPL?
Pete Wishart
The hon. Gentleman is right, and I am grateful for that assistance for the Scottish open. I am sure that he will be the first to recognise that the input that the Scottish Government have made to Scottish football is significant—the £25 million that was announced towards the national performance centre, for example, the £8 million through CashBack for Communities and the £4 million going into the refreshed youth action plan for the next four years. That shows the Scottish Government’s support for Scottish football and their commitment to ensuring that it will continue to develop in the next few years. That will be welcomed in football throughout Scotland.
I want to mention a couple of initiatives. Unfortunately there was some appalling behaviour two weeks ago at Glasgow Rangers, in the home game against Kilmarnock, which shows that there is still a massive problem with sectarian chanting. I am delighted that for the first time the Scottish Government have put in place legislation to tackle that effectively. It was not supported by the rest of the parties in the Scottish Parliament, but at last something will be done to try to get rid of that curse from the national game.
Thomas Docherty
I regret the fact that at the end of a good speech the hon. Gentleman is trying to bring in party politics. I went to the Dunfermline and Rangers game as a guest of the police, early in the season; the procurator fiscal was there. The PF, the clubs and the police were clear about the fact that that legislation, which no one else in the Scottish Parliament supported, was unnecessary, and unworkable.
Pete Wishart
It is the police who have been telling the Scottish Government that the legislation is required. We have had that debate in the Scottish Parliament, and thank goodness that behaviour will at last be challenged effectively. I welcome the fact that the SNP Scottish Government are deciding to take on the issue head on, and trying to get that appalling scourge out of the Scottish game.
There are other issues in Scottish football, but the one that we are debating is the big one—the thing that we need to get tackled and sorted out. I hope that HMRC will work sensitively with the administrator, and that we will get a solution that will ensure that it will be paid what it is owed. The main thing is that HMRC should secure the outstanding liabilities that Glasgow Rangers has towards it. Let us hope that we get a solution that will allow Glasgow Rangers to come out of administration—a solution that will mean that as much as possible will be done to retain the staff who work on its behalf; that we will have a Scottish premier league worthy of that title and enjoyed by its supporters; and that we can go on ensuring that that product can be developed, and made entertaining and exciting for people not just in Scotland but worldwide.
Owen Smith (Pontypridd) (Lab)
I congratulate my hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) on securing an important debate, which has touched on a much wider set of issues than just Scottish football. It covered the importance of football, and football and sporting clubs, as cultural institutions within communities—institutions that help bind communities together. I thought that my hon. Friend’s remarks about Dunfermline, and in particular Cowdenbeath, were deeply informative. I confess I was not aware that Cowdenbeath were known as the Blue Brazil. I assume that that is to do with the shirts, and not the temperature in which they play north of the border; but it could be either, I guess.
Two broad sets of remarks have been made in the debate, and I want to frame mine against that context. I have already mentioned one of the areas covered: the importance of football clubs as cultural and community institutions that are integral parts of communities—aspects of communities that inspire pride, loyalty, aspiration and ambition in individuals, but which also act as standard bearers for those communities in the wider world. I do not think that anyone could deny that Rangers, Celtic—their great rival—and all the great clubs of Scotland have been standard bearers for Scotland in the world of sport and beyond.
Rangers, of course, are a great Scottish club, and the one that prompted today’s debate. We heard a bit of their 140-year history, and about the nine great championships that they won on the trot in Scotland, equalling, I believe, the Celtic record. I was not aware, until I started looking at this subject, that they are also the club that has won more national championships than any club in any national football league in the world. That is a measure of the club’s success. However, what we cannot understand by looking at the names inscribed on trophies and trophy walls in such clubs is the wider, deeper, historical, cultural and sporting significance of the club. Anyone who has been to Ibrox, as I have, as a great sports fan—though a Welshman, of course—knows the importance that the community attaches to it. It is right that we should be discussing the issue today, and framing our remarks in that context.
The other broad set of remarks on the sporting front was about the role of money in sport, and football in particular, as well as about ownership, the transparency of football club financing, and the sustainability of clubs in a world where money seems to be the prime driver, despite all those other—in many respects far more important— cultural, historical and community values associated with the role of the club. That is something that I, as a Welshman and a sports fan, feel is significant for a different code of football—rugby football. We have similar issues with the game in Wales. I agree with the hon. Member for Folkestone and Hythe (Damian Collins), who made some remarks about the necessity for greater transparency about finances. He also said some things, to which I hope the Minister will pay attention, about the role of HMRC and the Government in seeking greater transparency in finances, ownership structure and the potential pitfalls and difficulties that clubs may encounter, in rugby and of course football. Clubs are businesses, yes; but they are more than just businesses.
However, in that context of clubs as businesses the role of HMRC is simple. Its job is to collect the taxes that are due in the appropriate volume and at the appropriate time. It is not often that I or other hon. Members quote judges; perhaps judges would feel that we do not do so approvingly. However, Lord Justice Mummery, in a recent tax case at the Court of Appeal, said rather appositely that
“tax is a contribution towards the costs of providing community and other benefits for the purposes of life in a civil society”.
That is a phrase that would have fallen, perhaps not as eloquently, but certainly as easily, from my lips. Tax is important to the wider community just as those football clubs are.
It is in those two contexts that I place my remarks. Individuals and businesses, however humble or, in the case of Rangers, mighty they are, need to pay their taxes. Therefore it is a matter of great regret to me that Rangers have not paid the £9 million in taxes that HMRC has said is outstanding for PAYE and VAT. That is why Rangers have gone into administration, which we deeply regret. As I understand things, HMRC is also looking at whether there may have been instances of tax avoidance. I am sure that the Minister will take great care over that, given his and my deep and continuing concern about tax avoidance. I know, in particular, that HMRC is interested, in the Rangers context, in the use of employee benefit trusts. There are several investigations in progress about EBTs, and, as I understand the matter, their use for payment of individuals working for Rangers, including players, plays a part in the non-transparency of the financial affairs. I will not go into further detail because I cannot: we do not have the detail that would make further comment possible. However, I should like assurances that the Minister is making himself certain that he understands, to the extent that he can, given the arm’s length nature of HMRC, the detail and complexity of the issues involved. I also ask him to consider the wider cultural set of understandings and sensitivities that HMRC needs to bring to bear in this case.
One of the other issues that has clearly come out of this debate is the importance of local knowledge and local understanding—the rootedness of Rangers in the local community. Under the current Government, in particular, and under the last Government, there has been a reduction in numbers of local HMRC staff. That reduction is being sped up under the current Government, with 10,000 more HMRC staff due to go before the end of the spending period; it was announced in January that 4,000 or so staff would go. Given that reduction and the potential loss of local knowledge, is the Minister certain that those people in HMRC who are dealing with Rangers in Scotland will understand the cultural context and have the requisite sensitivity to appreciate both the financial nexus locally—the interconnectedness of clubs and businesses that surround Rangers, and of course the connection between Rangers and the wider Scottish professional football league, which, as we have heard from hon. Members, is a crucial connection—and the cultural significance of Rangers for the local community?
Given the Minister’s slightly arm’s-length relationship with Revenue and Customs, has he been briefed in detail about Rangers, to the extent that he can be briefed about the issue? Does he feel that he is fully on top of the issue? Does he understand—I am sure he must—the importance of Rangers to the wider community and the wider sporting fraternity in Scotland? Is he certain that the HMRC people dealing with Rangers have the requisite expertise?
In closing, I will say a few things about the issue that I think is at the root of many of the problems that we have in football; there may be particularities around Rangers connected with the takeover of the club by Craig Whyte and the way that the club’s business has been managed since May 2011, but Rangers are not a unique case. The root cause of the problems that football clubs, rugby clubs and other sporting institutions across the length and breadth of this land are facing is to do with the role of money and the commercialisation—the commodification—of sport, whereby players and clubs are bought, sold and traded in a global marketplace that Governments in this country and elsewhere seem to have little control over, and perhaps they also have too little insight into the financial machinations and the rationale for the changes that happen. But if those changes come about, especially if they come about as dramatically as they have done with Rangers, and if they lead to the potential loss of great institutions that are of such cultural and financial importance to their local communities, Governments need to think about the extent to which they must improve their insight into those sporting institutions and those businesses, and consider their particularities. I hope that the Minister will comment on that issue too.
Finally, I will make what is perhaps a personal point. I echo the plea made by the hon. Member for Folkestone and Hythe that we should look at alternative models of ownership for football clubs and that the Government should also become engaged in a discussion about those alternative models. In my capacity as a constituency MP, I have been working with Pontypridd rugby football club and other Welsh rugby clubs to look at FC United of Manchester, which is a fan-owned football club with extremely transparent structures and financial arrangements. Those sorts of arrangements may provide the key for the Government when they think about how to frame policy, not only at HMRC but more widely across government, that will help to ensure there is a greater degree of transparency in ownership, management and—crucially—sustainability for institutions that are not simply sporting institutions or businesses but, of course, a vital part of their local community.
Damian Collins
I am grateful to the hon. Gentleman for picking up on something that I said. I wanted to clarify that although there is a role for HMRC, before HMRC becomes involved there is a role for the competition organisers to act as whistleblowers and bring in the relevant authorities if they think there is a problem. The competition organisers should be the first port of call and then there should be recourse to a higher authority if they cannot sort out the problem themselves.
Owen Smith
Again, I agree with the hon. Gentleman on that point. Clearly, there is a role not only for the authorities but for the clubs themselves—indeed, for the sport itself—to think about both the sport’s sustainability in the long term and the extent to which money is quite often eroding the ability of local clubs to represent a local community, whether that community is in Leeds, Pontypridd or, as in the case of Rangers, Glasgow. These clubs were not created for professional or financial benefit; they were created as part of community representation.
HMRC needs to reflect on that point when it deals reasonably, sensibly and even-handedly with those clubs, as it professes to do with all of the individuals and institutions with which it works. We have all encountered instances of individuals feeling that HMRC is not dealing with them even-handedly. I am sure that the Minister will want to assure us in a moment that HMRC always deals even-handedly with institutions and individuals. However, in this instance—a case in the public eye that is of such enormous importance, not only to Glasgow but to Scottish life in general and indeed to the representation of the UK on a wider, even global stage—I am also sure that he will want to make certain that HMRC painstakingly looks at the wider financial and cultural disbenefits of Rangers ever collapsing, and ensure that in collecting the tax, as it must indeed do, it understands that it must also make sure that that situation does not happen.
The Exchequer Secretary to the Treasury (Mr David Gauke)
Thank you, Mr Betts, for calling me to speak. It is a very great pleasure to serve under your chairmanship this afternoon.
I congratulate the hon. Member for Dunfermline and West Fife (Thomas Docherty) on securing the debate. It has not been heavily attended, but it has been of good quality. It has also been wide ranging; we have heard a little about the history of Scottish football and we have had a bit of a geographical tour of a number of Scottish football clubs. We have heard about a number of issues relating to football in Scotland and we have also heard from my hon. Friends the Members for Portsmouth North (Penny Mordaunt) and for Folkestone and Hythe (Damian Collins) about issues relating to football in England.
There is no doubt that the issue brought into focus by the administration of Glasgow Rangers is a significant one. That administration is clearly crucial to football in Scotland and, as we have heard, football in Scotland is crucial to Scotland much more broadly, including to the various communities in which football clubs exist.
The importance of football to a local community is self-evident, first because it provides jobs and stimulus to that community. We have heard about the impact when Rangers play against St Johnstone in Perth and we all know how football can contribute to the feel-good factor if a team is successful. Any football supporter can testify to that, as well as testifying—to be fair—to the feel-bad factor when a side does badly. I speak as an Ipswich Town supporter who has experience of both the feel-good and the feel-bad factors.
Secondly, the football industry in the UK contributes significant sums to the Exchequer by way of PAYE, national insurance and VAT. The debate about football and taxation obviously tends to focus on sums that have not been paid, but it is worth pointing out that last year the contribution to the Exchequer from football amounted to well over £1 billion, and clearly that money is vital to the provision of public services.
Of course, football is always in the spotlight. Recently, there seem to have been as many column inches about football clubs in the business pages as on the back pages, and I am acutely aware of the wider impact that the administration of Glasgow Rangers football club will have on other football clubs and businesses. However, the difficulties of one business cannot mask the significant support that the Government and HMRC have provided to help and support businesses across the country, including football clubs, to grow and to meet their tax obligations, even when they encounter temporary difficulties.
Of course, the debate has demonstrated the particular and intense passion that is involved with the business of football, but I hope that the hon. Member for Dunfermline and West Fife will appreciate that, due to confidentiality obligations, I cannot share specific information about Rangers with him. I know that he will be disappointed with the constraints that exist for all of us, but it is important that HMRC protects customer confidentiality. However, I can comment on the importance that the Government place on supporting businesses, whatever their size or fame, and on the position of football debt generally, and particularly at this time, on the importance of ensuring that where public revenues are due, they are paid on time and in full.
Thomas Docherty
While I appreciate the fact that the Minister cannot talk about the specific tax structure of Rangers, can he confirm whether UK Ministers, of whatever Department, were aware that Rangers had not paid since last May?
Mr Gauke
There are a couple of assumptions in the hon. Gentleman’s question. I was going to deal with those points later, but I will do so now. First, there is an assumption in his question that, as has been reported, Rangers has not paid PAYE since May. There is taxpayer confidentiality and there are limits to what can be said to Ministers, as well as what can be said publicly. All I can say is that HMRC has assured me that in cases of this kind, it gives debts very close attention at all times. I would therefore be very surprised indeed if there had been no ongoing discussions or action by HMRC to secure payment over that time period.
On the hon. Gentleman’s question about ministerial involvement—in his speech he raised the point about the involvement of Scottish Ministers as well—Ministers were kept informed of significant developments such as the timing of court proceedings, but HMRC did not seek or take advice from Ministers on how to handle matters that were entirely within HMRC’s responsibility. Equally, with regard to the Scottish Government, there were discussions. HMRC was entitled to inform the Scottish Minister, because there were issues relating to devolved powers, and it was right that the Scottish First Minister was informed. At his request, HMRC explained its general policy for customers who were having difficulties paying their tax debt, and it gave him an idea of the likely time scale of its initiating administration proceedings if tax debts were not paid. Although HMRC listened to representations that he wished to make, it neither sought nor took advice from him or other Scottish Ministers. I hope that provides some clarity.
Thomas Docherty
I am grateful to the Minister; he has been quite candid. He will probably be aware that the First Minister does not normally wait to be asked to give advice, so can he tell us what advice the First Minister offered without being asked?
Mr Gauke
I do not know what advice the Scottish First Minister provided, if indeed he provided any. I know that there were discussions informing him of the issues, as was appropriate; for example, whether there were going to be any public order issues that could be related to progress on this particular matter. There was nothing in any way improper about a discussion with the First Minister in broad terms. Similarly, I assume that the discussions with Ministers of the UK Government were not about specific tax information, but in the broadest of terms.
Owen Smith
I appreciate what the Minister has said about the limited nature of the advice that he has been given by HMRC, given the nature of his relationship with HMRC. Can he tell us whether he in turn has impressed on HMRC that it needs to think of the wider financial nexus around Rangers, and of course the cultural significance of the club? It is a business, but it is not just a business.
Mr Gauke
HMRC is well aware of the significance of Rangers football club and its importance in Scotland. I have no doubt that HMRC is aware of that sensitivity. I am sure the hon. Gentleman is not suggesting that Rangers should receive special treatment, but HMRC is aware of the importance of Rangers to Glasgow and to Scotland, and indeed to the UK more widely. I have no doubt about that.
I return to the issue of the support that businesses receive from HMRC, both generally and in respect of football. Of course, facing tough conditions, many businesses can stumble upon difficult times. That is why HMRC invests so much time and energy to support those businesses, whether they are start-ups or established large businesses, when they encounter difficulties.
I will focus on the support that is provided for the many thousands of businesses, large and small, through the time to pay arrangements, which allow them to spread the payment of their liabilities beyond the due date. That facility took on a more prominent role in November 2008 when the Business Payment Support Service was launched. Its purpose is to provide speedy access to quick decisions from HMRC for businesses facing short-term financial difficulties and who wish to discuss time to pay arrangements.
Many hundreds of thousands of businesses have accessed the service since its launch. The time to pay arrangements have helped hundreds of thousands of individual taxpayers and businesses suffering short-term financial difficulties. This has been particularly helpful during the past four years, given the economic challenges that the UK has faced. HMRC will continue to offer that support service where it is appropriate to do so, although I make it clear that the facility is not there to prop up an insolvent business whose existence is dependent on not paying the taxes for which it is liable. That is why HMRC will probe deeper when a business comes back repeatedly to seek time to pay. Such repeat requests can indicate a more deep-rooted financial difficulty, which can mean a time to pay arrangement is unlikely to be the appropriate outcome.
At a time when the public finances are as they are, it is crucial that businesses and individuals pay the tax that is due. That is a point that every speaker has made this afternoon. Businesses and individuals who do not pay their taxes are restricting growth and getting an unfair advantage over those who follow the rules. The Government are committed to levelling the playing field for the compliant majority. Even as HMRC puts in place services to support businesses, small and large, to realise that ambition, it also expects all businesses, be they football clubs or not, to be run effectively from a tax management point of view.
As reported in the media, it is true that in recent years some football clubs have had poor compliance records for the payment of tax liabilities. I am not talking about the payment of tax on profits; I am referring to the PAYE and national insurance that the clubs have deducted from their players and other employees and the VAT that they have charged their customers. Too often some football clubs have used those moneys, which were never theirs, to fund their business, because they have overstretched themselves in other areas. Many hon. Members will doubtless have views on why that situation has arisen, and why clubs so often apparently spend more than they can afford. I think all hon. Members will agree that it would not be right for taxpayers to fund such shortfalls.
However, things have begun to change. One practical way was when the previous chairman of the English football league, Lord Mawhinney, approached HMRC to explore how they—the football league authorities and HMRC—could work together to reduce the levels of tax debts in the football league.
From those initial discussions emerged a working arrangement that remains in place today. All English football league clubs consented to HMRC sharing information with the football league on their payment compliance in respect of PAYE and national insurance. Not only does any club that withholds those taxes face decisive action by HMRC, it will also encounter sanctions from the football league.
However, the issue is not always about sticks. The carrot is that eventually, all clubs will compete on an even basis. No club should benefit over another simply because it retains taxpayers’ money to fund its operation. That is an absurd proposition, with which I know hon. Members will disagree.
The decisive action taken by HMRC and collaboration with the football league authority has paid dividends. Similar arrangements are now in place with the Irish Football Association and the football conference, which is the tier immediately below the football league.
In addition, some months ago HMRC met the Scottish premier league and the Scottish football league authorities to explore whether similar arrangements could be put in place for the top four divisions of football in Scotland. Further discussions are scheduled soon on that proposal. HMRC will meet the Scottish leagues next week to monitor the payment of taxes, which addresses one of the specific points raised by the hon. Member for Dunfermline and West Fife.
Thomas Docherty
That was hugely informative and I am sure that it will be welcomed. If only we had heard it before now.
I have two specific questions. Will the Minister confirm that HMRC will contact all 11 other clubs to see what assistance they require as a result of the situation with Rangers? Also, can I tempt him to say a little about the potential introduction of a bond, which I know the Treasury has previously considered, to protect HMRC, so that if a club finds itself in administration, HMRC will have a guarantee that it will get some of its money back?
Mr Gauke
I will deal with the hon. Gentleman’s second point first, which he is absolutely right to raise. From April 2012, HMRC will be able to seek securities where PAYE is at risk. That mirrors existing powers for VAT, which are already in place. If a taxpayer does not pay the security, they will commit a criminal offence. There are, of course, safeguards to ensure that the power is not abused by HMRC—it is not to be used widely—but where there is concern about repeated failure, that is an additional tool available to HMRC. That, in itself, will have a deterrent effect, which I hope will be helpful in such circumstances.
Pete Wishart
The Minister has mentioned some of the sticks available to HMRC to secure its liabilities, but what about the carrots? What about incentivising the clubs that meet HMRC requirements on time? I mentioned the example of my football club, St Johnstone, which has never gone into the red. Does HMRC want clubs to behave and be able to balance their books on that basis?
Mr Gauke
There would be a problem with HMRC rewarding clubs for paying their taxes; after all, it should be taken as a given that businesses pay their taxes. I return to my point on the work that is being done with the football league in England, with Lord Mawhinney, where football gets to grip with the issue, and works in conjunction with HMRC to ensure that clubs would face difficulties within the leagues if they fail to comply with their obligations. I would look at it that way.
The first point made by the hon. Member for Dunfermline and West Fife in his intervention was about whether HMRC will proactively contact the 11 other clubs in the Scottish premier league. Rangers going into administration is a huge event, not just for Rangers, but for all the other clubs in the Scottish premier league and some other clubs as well. HMRC is conscious of that and will—I am assured—listen sympathetically to any approach where that event causes serious short-term financial difficulties. The onus is on other clubs to get in contact with HMRC if they have a difficulty. The debt lines are open seven days a week, and there is no reason to delay discussions with HMRC, which I know will be happy to engage with clubs if they have particular issues. It is for the clubs to contact HMRC, rather than for HMRC to initiate communications. I hope that I have adequately addressed the issues about HMRC’s involvement, within the constraints that I and HMRC have in relation to taxpayer confidentiality, and about what communications there have been between Ministers of the UK and Scottish Governments.
Regarding HMRC’s capability in terms of the local issues, I am assured and confident that it is deploying the right skills and the right amount of urgency to the investigation of avoidance schemes. I am also confident that HMRC has the right skills to understand fully local factors. The hon. Member for Pontypridd raised a point about reductions of local staff in HMRC, which he described as having increased and accelerated under this Government. We have debated that point once or twice in recent days, including in television studios. In 2005, the number of HMRC staff, following the merger, was around 96,000. When this Government came into office, it was 66,000. By the end of the spending review, it is likely to be around 56,000. It is difficult to argue that there has been an acceleration in job reduction under this Government, and I will happily debate how and why we have been making changes in employment on another occasion. We are strengthening the capability for tackling evasion.
Owen Smith
I want to confirm that the Minister is saying that there will be 10,000 further jobs going under this Government over the spending period, as well as the 4,000 job losses announced in January.
Mr Gauke
The working assumption is as I have said, and as is in the public domain. The hon. Gentleman will be aware that there is redeployment within that, so that there are additional staff dealing with tax evasion. There is capability to reduce the number of staff working in processing, where the use of new technology can substantially reduce the need for manual work.
I cannot comment on the case of Rangers specifically, but I assure the hon. Member for Dunfermline and West Fife that HMRC is working with the administrators, alongside other creditors, to reach the best solution for the public purse and the club. We have heard how Rangers going out of business would be a disaster for Scottish football. The purpose of administration is to save the club and to ensure that creditors get as much as possible.
Damian Collins
On a point of principle, does my hon. Friend agree that it is wrong, when a football club goes into administration, for HMRC and other creditors to get paid only after all football debts have been settled?
Mr Gauke
As we have heard in the debate, that is a matter more for the English arrangement. There is currently a court case on the issue. I have a lot of sympathy with my hon. Friend’s view. There seems to be unfairness, and as I said, there is litigation on the matter.
The debate has been valuable, and I thank the hon. Member for Dunfermline and West Fife for securing it and raising the issues. There are constraints on what I can say, both publicly and privately, although I will always be happy to have a discussion with the hon. Gentleman. However, the constraints of taxpayer confidentially apply to me as much as anyone else, so I am not given all the information. The debate has been useful, and I thank the House for allowing us to hold it.
Daniel Morgan
(12 years, 2 months ago)
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Mr Tom Watson (West Bromwich East) (Lab)
It is nearly 25 years—10 March 1987—since the son of Isabel and the brother of Alastair, Daniel Morgan, was brutally killed by five blows of an axe to the head. The last blow was probably struck when he was on the ground, because the hilt was embedded in his skull. Alastair is here today representing his family to hear the Minister’s response to the family’s call for a judge-led inquiry into the five failed investigations into Daniel’s murder. All they ask is justice for Daniel.
The five failed inquiries have cost the taxpayer nearly £30 million. I believe that had the murder been investigated adequately a quarter of a century ago, Daniel’s killer would have been brought to justice. John Yates said:
“This case is one of the most deplorable episodes in the entire history of the Metropolitan Police Service.”
He went on to say that Daniel’s family had “been treated disgracefully.” I suspect that the Minister will not be able to grant a judge-led inquiry today, but I hope that he will at least keep an open mind, as the Home Secretary has not yet decided whether to grant such an inquiry, which my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) has also been campaigning for on behalf of her constituents.
I ask the Minister for one thing: please agree to ask his officials and the Metropolitan police a number of searching questions before he and the Home Secretary make their decision. I will put those questions to him at the end of my contribution. Daniel’s family categorically do not want another investigation by the Metropolitan police—they have lost trust. Before I raise specific questions for the Minister, I will run through the events that have led to the five failed investigations.
Investigation No. 1 was severely compromised by police corruption. For 20 years the Met failed to admit that, despite the repeated pleas of the Morgan family. Indeed, it was not until 2005 that the Met’s then commissioner, Sir Ian Blair, admitted that the first inquiry involving Detective Superintendent Sidney Fillery had been compromised. If that admission had come earlier, the subsequent inquiries might not also have failed.
As part of the first investigation, it is now known that DS Sid Fillery—a member of the original murder squad—failed to reveal to his superiors that he had very close links with Jonathan Rees when he became part of the inquiry. I am told that Fillery took a statement from Rees, but it did not include details that both he and Rees had met Daniel at the Golden Lion pub the night before the murder, nor did it include details of a robbery of Belmont Car Auctions a year earlier. Had those details emerged at the time, they would have revealed that those incidents brought both men into direct conflict with Daniel.
The Belmont Car Auctions story was significant because Jonathan Rees and Daniel had previously agreed that they would not deal with cash-in-transit work. Daniel is known to have been angry when Jonathan Rees took on the job of looking after the takings from the auctions, saying it would, “backfire on them.” Rees, who was contracted to carry cash to the bank after a series of auctions, alleged that the bank night-safe had been interfered with, and therefore took the money to his home in March 1986. He alleges that he was attacked outside his house by two masked men who took the £18,000 from him. Belmont Car Auctions then sued Southern Investigations, which resulted in Daniel having to raise £10,000 very quickly for security to the court.
We know that two days before the murder Daniel told a witness, Brian Crush, that he believed that Rees and Fillery had set up the robbery and taken the money themselves. Daniel also told a witness that he was dealing with police corruption and that he did not know whom in the Met he could trust with the information.
It is important that the Minister understands at the outset why the omissions of the meeting at the Golden Lion pub and the auction robbery were so critical to the first investigation being compromised. My source has told me that omissions in the statement gathered by Fillery initially prevented attention being drawn towards Jonathan Rees and, indeed, Fillery himself. Alastair Morgan, Daniel’s brother, has also told me how he raised his own suspicions with Fillery about Rees’s possible involvement with the Belmont Car Auctions robbery as a possible motive for the murder. Alastair had not known that Fillery had actually recommended Rees to the auction company at the time.
Alastair now believes that it was a mistake to trust Fillery. He tells me that, for example, his information to Fillery later led to a phone call to his sister-in-law in which the family were told directly by Fillery that Alastair should get out of London because he was interfering in the investigation. When Fillery was removed from the team, the investigation quickly focused on those whom the Met believed to be responsible. Fillery, Rees, the two Vian brothers and two other police officers who were closely associated with Southern Investigations were arrested. However, no charges were brought and all six men were released.
At the inquest in April 1998, Kevin Lennon, who worked as a bookkeeper at Southern Investigations, gave evidence that implicated Rees in Daniel’s murder. The Guardian newspaper reported that, in evidence to the hearing, Kevin Lennon said Rees wanted Morgan dead after a row. Lennon said:
“John Rees explained that, when or after Daniel Morgan had been killed, he would be replaced by a friend of his who was a serving policeman, Detective Sergeant Sid Fillery.”
Lennon also told the inquest that Rees had said to him:
“I’ve got the perfect solution for Daniel’s murder. My mates at Catford nick are going to arrange it.”
Lennon added:
“He (Rees) went on to explain to me that if they didn’t do it themselves the police would arrange for some person over whom they had some criminal charge pending to carry out Daniel’s murder”.
In the weeks before his murder, Daniel Morgan had repeatedly expressed concerns over corrupt police officers in south London. The Morgan family also believe that Daniel was about to reveal evidence of corruption.
In the aftermath of the murder and just as predicted by the evidence of Kevin Lennon seven months before at the inquest in 1988, Fillery took early retirement with an enhanced sick pension. Alastair Morgan has also told me how, at the inquest, members of the Met disputed the fact he had ever spoken with Fillery directly as part of the investigation. He believes that they were trying to cover up for Fillery.
Investigation No. 2—an outside inquiry—ordered by the then commissioner, Sir Peter Imbert, following a complaint by the family, was carried out by Hampshire police. It made no attempt whatsoever to address the allegations that Fillery had tried to get Daniel’s brother, Alastair, out of London after he had pointed to Rees as a prime suspect in the murder. Had the inquiry done so, it might have found that what Alastair said tallied with the allegations previously made by Kevin Lennon at the inquest in 1988. The inquiry’s terms of reference were to investigate
“all aspects of police involvement arising from the death of Daniel Morgan”.
Unknown to Daniel’s family, the remit of the inquiry was secretly changed at a high-level meeting at Scotland Yard in December 1988. The family further believe that the second investigation did not address the statements made at the inquest by serving police officers in which they denied that Alastair Morgan had ever raised his suspicions about Rees with Fillery, directly, as part of investigation No. 1.
In addition, Mr Morgan is frustrated that he offered to provide Hampshire police with a statement after an initial interview, but they refused it—indeed, no further statement was taken until 2000. The inquiry later reported to the Police Complaints Authority that there was
“no evidence whatsoever of police involvement in the murder”
and that the original inquiry had been good.
Understandably, the Morgan family kept up their campaign for justice. In November 1997, they met Sir Paul Condon who promised to review the case—nothing happened until late 1998 when, under the leadership of John Stevens and Roy Clark, the Met launched a third investigation into the murder. That was done without the knowledge of the Morgan family and in secrecy—not including the family was a mistake and the secrecy of the inquiry has deeply troubled them. The secrecy today is still a major issue for the family with the Met. I hope that the Minister understands that he must ask why the family were not kept informed.
As part of investigation No. 3, a covert bug was placed in the office of Southern Investigations. I will return to that later. Yet investigation No. 3 arguably missed its chance to use trigger events to gather further evidence on the murder. After Rees went to jail, the Morgan family had another meeting with Roy Clark. Clark initially said that they would do another investigation. The family ruled that out, as they wanted disclosure of the Hampshire report first. First Clark and then Andy Hayman refused to disclose the report to the family. It was not until the family were forced to go to the High Court that they succeeded. The Morgans should not have had to do that.
In the interim, the Met conducted a fourth inquiry, led by Detective Chief Superintendent David Cook. However, the fourth investigation, which the family described as the first honest investigation into the murder, gathered insufficient evidence to prosecute Rees, Fillery and three other men for the murder. My right hon. Friend the Member for Salford and Eccles (Hazel Blears) then refused the family’s request for a judicial inquiry.
In 2006, a fifth investigation began under Assistant Commissioner John Yates. That happened out of the blue after Alastair Morgan had initially approached the Metropolitan Police Authority chairman, Len Duvall. He had ordered the commissioner to present his own report on the case before that. The family were initially deeply sceptical of the new Yates investigation. Devastatingly, after five years, the case collapsed last year. The Morgan family’s solicitors have said that this was
“under the weight of previous corruption”.
The accused, Jonathan Rees, Fillery and the Vian brothers were ultimately acquitted because the defence would not have had access to all the documents in the case. The Metropolitan police repeatedly mislaid crates of evidence, owing to the sheer number of documents the case had generated. Mr Justice Maddison also ruled that the supergrass witnesses had been mishandled.
I now turn to the situation that the family find themselves in now. Since the collapse of the prosecution, the Met has publicly admitted corruption in the first inquiry. The family believe this corruption had an impact on the second, third, fourth and fifth inquiries. However, what the family did not know during any of the five investigations is the extent to which the relationship between News International, private investigators and the police had an impact on the conduct of the inquiry.
Jonathan Rees and Sid Fillery were at the corrupt nexus of private investigators, police officers and journalists at News of the World. Through the hacking scandal, we now know that Southern Investigations became the hub of a web of police and media contacts involving the illegal theft and disclosure of information obtained through Rees and Fillery’s corrupted contacts. Southern Investigations sold information to many newspapers during the 1990s, but we think exclusively to News International after Rees was released from jail in 2005.
The main conduit at News International was Alex Marunchak, chief crime reporter for the News of the World and later the paper’s Irish editor. I want to focus the Minister’s attention on Marunchak in particular. Rees and Marunchak had a relationship that was so close that they both registered companies at the same address in Thornton Heath. Abbeycover, established by Rees and his colleague from News International, Greg Miskiw, was registered at the same address as Southern Investigations, run by Rees and Fillery. Rees’s confirmed links with Marunchak take the murder of Daniel Morgan to a new level.
It is important to remember that, in the days before the murder, Daniel’s family believe that he was on the verge of exposing huge police corruption. That was confirmed by Brian Madagan, Daniel’s former employer, in a statement in May 1987, in which he said that he believed Daniel was about to sell a story to a newspaper. In a second, later statement, Madagan said he believed that paper to be the News of the World and the contact to be Alex Marunchak who, until recently, still worked for the paper. BBC Radio 4’s “Report” programme also confirmed that it has seen evidence suggesting that, a week before the murder, Daniel was about to take a story exposing police corruption to Mr Marunchak and was promised a payment of £40,000. We also know, from the investigative reporting of Nick Davies at The Guardian, that Southern Investigations paid the debts of Alex Marunchak.
As part of the third failed investigation, Operation Nigeria was launched. It included the surveillance of Southern Investigations between May and September 1999 and was run by the Metropolitan police’s anti-corruption squad, CIB3. It placed a bug in the offices of Southern Investigations that yielded evidence that convicted Rees for a serious and unrelated crime. Police surveillance shows frequent contact between Rees and Marunchak. I understand that the tapes made by the recording by the bug have not all been transcribed; if they were, they would yield more collusion, perhaps criminal in nature, between News International and Jonathan Rees. I hope the Minister will ask the police if that process is under way.
When Rees came out of jail, he was re-hired by the News of the World, then edited by Andy Coulson. Rees also founded a company called Pure Energy, in which Marunchak was involved. The police hold evidence to suggest that Rees discussed the use of Trojan devices with his associate, Sid Fillery. He was an associate of Philip Campbell Smith, who received a custodial sentence on Monday for a crime related to blagging. Campbell Smith is a former Army intelligence officer. I will say no more on Campbell Smith, because I do not want to prejudice the Operation Tuleta inquiry. However, I hope that I have demonstrated to the Minister a close association between Rees and Marunchak.
This is why I think that the Metropolitan police cannot be used in any further investigations: yesterday, the Leveson inquiry heard a startling revelation that Alex Marunchak—a close business associate of Jonathan Rees, then the prime suspect in a murder case—chose to put DCI David Cook and his family under close covert surveillance. The person who was investigating a murder was put under close surveillance by a close business associate of the man he was investigating. That was raised with Rebekah Brooks in 2002, the then editor of the News of the World. I would like the Minister to imagine what his response would have been to that information. A journalist employee tried to undermine the murder investigation of his close associate. Rupert Murdoch claims that News International takes a zero-tolerance approach to wrongdoing. However, far from launching a wide-scale inquiry to investigate wrongdoing, Rebekah Brooks promoted Alex Marunchak to the editor’s job at the News of the World in Ireland.
It gets worse. Last year, Mr Cook’s then wife, Jacqui Hames, discovered that her records appeared in the evidence file of Glenn Mulcaire. The records show information that she believes could only have been obtained from her private police records. While DCI Cook was investigating a murder, his colleagues in another part of the Met were in receipt of evidence that a close associate of his suspect was illegally targeting him. Did Andy Hayman, the then head of the hacking inquiry, who also happened to be in charge of the fourth investigation into Daniel’s murder, ensure that his colleague was informed about this? No. When Andy Hayman retired early from the Met, he became a paid contributor for News International—that is not right. For months, Scotland Yard took no action. Why not? Why was it not willing to pursue what appears to be a clear attempt to interfere with the murder inquiry of Daniel Morgan? The Guardian has reported that the reason why no action was taken by Scotland Yard was not to embarrass the Met with newspapers.
It gets worse. I would like the Minster to request to see all the intelligence reports submitted about Alex Marunchak. I believe the Met is sitting on an intelligence report from late 2002 that claims a police contact overheard Marunchak claim he was paying the relatives of police officers in Cambridgeshire for information about the Soham murders. As far as we know, those allegations have not been investigated. I do not know whether the intelligence reports are accurate, but I do know that Alex Marunchak was involved in writing stories about how the Manchester United tops of those young girls were found. I also believe that at least one of the Soham parents appears in the evidence file of Glenn Mulcaire. The Met police failed to investigate both leads when reported in 2002 and 2006. I think that Rupert Murdoch owes the Morgan family an apology, and I do not think that he has made his last apology to the grieving parents of murdered children.
Daniel’s family will never see his murderer brought to justice—corruption at the Metropolitan police has ensured that—but the Minister has it in his power to see that they get an explanation of the failure. He can only do that if the next investigation has their confidence. They seek a judge-led inquiry into the police’s handling of the murder, because they have lost confidence in the police. In the circumstances, wouldn’t anyone?
The Minister for Policing and Criminal Justice (Nick Herbert)
I congratulate the hon. Member for West Bromwich East (Mr Watson) on securing this debate. I am aware of his interest in this matter and the interest of other hon. Members, including the hon. Member for Islington South and Finsbury (Emily Thornberry).
The Home Secretary and the Government believe that this is a matter of the utmost seriousness, concerning an horrific murder exacerbated by a failure to see those responsible held to account. The Home Secretary is taking a personal and active interest in this issue. She met Daniel Morgan’s family and representatives in December last year and listened carefully to what the family had to say to her. She committed to reflect on what she had heard at that meeting and to look into the matters further. At the time, she also made it clear that we do not rule out anything when considering the next steps. She has since spoken to Bernard Hogan-Howe, the Metropolitan Police Commissioner.
There is no doubt that the case of the murder of Daniel Morgan has not been handled properly by the authorities over the years. Although no murder investigation is ever really closed without the perpetrators being brought to justice, the fact is that 25 years on Daniel’s murderer remains unconvicted. There has been a failed trial and justice has not been done, or seen to be done. Tim Godwin, as acting commissioner at the time, has apologised for the repeated failure by the Metropolitan Police Service and accepted that
“corruption had played such a significant part in failing to bring those responsible to justice.”
I am sure that hon. Members will agree that none of us can ever begin to comprehend the suffering that the Morgan family has endured over the past years. Our sympathies are with them.
Whatever happens now, the Government, the police and the authorities must do all we can, not just to bring the murderers of Daniel Morgan to justice, if at all possible, but—crucially—to ensure that the wider issues to do with police corruption are identified and addressed. The Metropolitan Police Commissioner has given his personal assurance to the Home Secretary that he is committed to achieving these ends. That is why he has appointed Assistant Commissioner Cressida Dick personally to oversee all aspects of the Morgan case. She is, as hon. Members will be aware, a senior police officer who is currently the assistant commissioner of specialist operations, and she comes to the case and the issues it raises with fresh eyes. It is important to note that she has no previous involvement with the case.
The MPS has also started looking at a full forensic review, which, as hon. Members will recall, was an important factor in the successful prosecutions in the Stephen Lawrence case. The MPS is considering seeking advice from independent counsel on what options are available to it to enable successful prosecutions, in light of the failed trial last year.
Ongoing investigations are relevant, including Operation Weeting and Operation Tuleta, being led by Deputy Assistant Commissioner Sue Akers of the MPS, who, following her evidence to the Home Affairs Committee in July last year, again gave a clear account to the Leveson inquiry earlier this week. Both Operation Weeting, which is looking at the interception of mobile phone messages by journalists and their associates, and Operation Tuleta, which is considering the numerous historical operations that have some bearing on this matter, are ongoing. We must let those investigations run their course, as they have a bearing on the issues raised in the Morgan case. For example, Deputy Assistant Commissioner Akers will be looking at the circumstances surrounding the surveillance by News of the World journalists of David Cook, the former senior investigating officer in the murder inquiry. I take seriously these allegations, repeated in the evidence of Jacqui Hames to the Leveson inquiry yesterday.
I appreciate the concerns of Daniel Morgan’s family about further investigation by the police. However, I do not believe that the police service is incapable of investigating itself. The investigations led by DAC Akers have led to the arrests of police officers. There are many examples of corrupt and criminal officers having been removed from their force and brought to justice. In addition, the Independent Police Complaints Commission is a robust, independent body that can always oversee on referral or call in any such investigation. So there are strong checks and balances over the police in such matters, too.
Hon. Members will note that the Home Secretary has recently appointed Dame Anne Owers as the new chair of the IPCC. Dame Anne, former chief inspector of prisons, has a formidable public reputation, not only as an expert in criminal justice matters, but for her integrity and independence from the Government.
The MPS and the Crown Prosecution Service are jointly reviewing the reasons for the collapse of last year’s trial of five suspects relating to this case. This review is focusing specifically on the methodology, decisions and tactics adopted by the prosecution team, including any omissions in relation to disclosure and the use of the assisting offender provisions in the Serious Organised Crime and Police Act 2005. I realise that this review will not answer all the issues that might be raised in a judicial inquiry, which remains the Morgan family’s preferred outcome. However, it might have a bearing on how we could frame any judicial inquiry, should that be the way forward. It would also help the MPS and the CPS consider what options would be available to them, were they to look to prosecute those responsible in future. This report has been much delayed, partly because the MPS and the CPS have been considering the forensics aspects, but I understand that it will be completed shortly. The MPS has offered to brief the family and their representatives on the findings.
Jacqui Hames’s evidence to the Leveson inquiry has brought these issues into even sharper focus this week. That inquiry has now turned from considering press practices alone to focusing on the relationship between the press and the police, whether those relations were inappropriate or indeed corrupt, and what bearing they might have on how the police conducted their investigations into phone hacking.
The detailed investigation of specific cases, such as the Morgan case, might be considered to be more a matter for this second part of the inquiry, although it is clearly a matter for Lord Justice Leveson himself to decide how far he wants to investigate specific cases, such as this part of the inquiry.
Given all this ongoing work, it is important to consider what options are now available to identify and address police corruption and bring those responsible for Daniel’s murder to justice. As I have mentioned, the Morgan family has called for a judicial inquiry and this call has been endorsed by the Metropolitan Police Authority. However, such an inquiry is unlikely to be quick—a key concern for Daniel Morgan’s mother—and it cannot directly lead to prosecutions. Any such prosecutions based on what the inquiry may unearth would need to follow further police investigations. I recognise that this would satisfy the Morgan family’s demands and we are considering carefully whether this is the right way forward. The Home Secretary and I have not ruled out ordering a judicial inquiry at this stage. The Home Secretary wrote to the Morgan family’s solicitors yesterday and will do so again shortly with her decision on the way forward.
Any decision will need to take into account whether the MPS might invite another police force to conduct a police investigation, particularly focusing on the allegations of corruption in this case. There may yet be value in this course, involving officers with no connection to the MPS investigating allegations of police corruption, because even now aspects of the alleged corruption have not been properly investigated. The MPS has not ruled out this option.
Were such an investigation to proceed, any judicial inquiry would be limited in what work it could do alongside these investigations. An alternative might be for the Government to ask a Queen’s counsel to supervise the investigation of the corruption aspects of the Morgan case, again by an outside force, involving police officers with no connection to the MPS. This option would most likely be quicker, with a QC providing the integrity and independence required.
In conclusion, I reiterate the Government’s commitment to seeing that all that can be done is done to bring justice for Daniel Morgan and his family. Similarly, the MPS is also fully committed to seeing that justice is done. The Home Secretary continues to take a personal and active interest in this matter. The hon. Gentleman asked that we remain open-minded about this matter. I assure him that we do. I am committed, as he is, to making sure that we get to the bottom of this matter, in one way or another.
South West Marine Energy Park
(12 years, 2 months ago)
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George Eustice (Camborne and Redruth) (Con)
It is a pleasure to serve under your chairmanship for this debate, Mr Betts.
Looking back through some of my notes, I was reminded that a little more than a year ago, on 15 February 2011, we were last in this Chamber to discuss marine energy in the south-west, in particular in Cornwall. I am pleased that quite a lot of progress has been made over the past 12 months. In my speech last year, I referred to the renewable obligations certificate and how in Cornwall we needed to be given five ROCs, as Scotland has, and I am delighted that the Government have made some strong moves in that direction. We talked about the importance of focusing on and joining up the infrastructure in the south-west, and the decision to have a marine energy park in the south-west brings some of those ambitions to fruition. We talked about the importance of funding to bridge the risk and potential for wave-power projects, and a number of device developers have benefited from some Government support to establish their devices.
A great deal has been achieved, therefore, although I was reminded that it has happened not only in the past 12 months. In the summer of 2009, we talked about the potential for a marine energy park in Cornwall, when the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), then the shadow Minister, first came down to Cornwall, to the Tremough university campus. I was talking to someone in Cornwall recently who said, “Are you doing this then? When you said that, we thought it was only a story. We didn’t think it was actually going to be done.” So it is good to see that, in this Parliament, the Minister is delivering what he said, and we welcome that.
My constituency is home to the Wave Hub project, which is the central element of the new marine energy park. It is the first test facility of its type in the world, and it enables us to test commercial-scale arrays of marine energy devices. The smaller FaBTest project in Falmouth bay is linked, and the two facilities are at the heart of the marine energy park, so I have a direct interest in seeing it work. The facilities are supported by a strong supply chain in Devon and Cornwall, a strong university at Plymouth, which does a lot on marine biology, and the academics at the university of Exeter and the Camborne school of mines down at Tremough, which is doing a tremendous amount of work on researching moorings and other issues.
Since our debate a year ago, two device developers have signed agreements to plug into the Wave Hub facility off Hayle: Ocean Power Technologies, with Government support, is developing a device that we hope will deploy next year; and later this year a new entrant, Ocean Energy, hopes to deploy its device.
Before I move on to the main thrust of my comments, I want to talk about the marine renewables deployment fund and its importance. The Minister has already suggested that he anticipates that about half the £20 million set aside by the Department to encourage green energy will go to wave power. In response to a recent question that I asked, he said that he expected a significant sum to come down towards my part of the world, which I welcome. I understand the reluctance to commit in a rigid way, because the Department wants to keep its options open. With a number of people asking what the marine energy park delivers, however, an important principle to establish is that projects in such a park should at least be given some priority treatment in attracting funds to develop the deployment of marine devices. Wave Hub still has two berths left on its device, and we are anxious to attract additional device developers.
Another area that will be equally if not more important to the success of the marine energy park is removing some of the barriers that currently confront developers. That has always been one of the key issues that we wanted to see dealt with in a marine energy park. How can we simplify the consenting process? How can we make consultation less onerous than, frankly, it is? In doing so, we need to consult closely with the Minister’s colleagues in the Department for Environment, Food and Rural Affairs, because a lot of the decision making is by the Marine Management Organisation. The Crown Estate also has quite a big role to play. I want to argue that we should learn lessons from other countries in the world—in particular, Norway, which has a fantastic track record in adopting a pragmatic approach to device developers and not standing in their way. A few comparisons of what we do for marine device developers in the UK and the approach in Norway might be useful.
First, on the application process, in the UK a developer has to apply to the MMO for all construction, all alteration or any improvement of any works affecting the sea bed. That includes all renewable energy projects, unless they are huge and much larger than what we would be talking about in marine energy at this stage. Compare that with Norway, where simply the local municipal authority or, in some cases, the regional coastal authority makes such decisions.
On leases, in the UK developers need to get a lease for the sea bed for any fixed structures, including any anchors, even before they can deploy a test device. Leases are always needed from the Crown Estate, and they are negotiated on commercial terms. Compare that with Norway, which has no specific need for a sea bed lease—in particular, for small test devices—and a much more pragmatic approach is taken. Devices with temporary anchorage or deployment are deemed to have a low-risk impact, so there is no need for a sea bed lease, which is a considerable cost saving.
Dr Sarah Wollaston (Totnes) (Con)
Does my hon. Friend accept the importance of the marine energy park to companies in our west country constituencies, certainly in my constituency? The Searaser device, invented by Alvin Smith who lives in Dartmouth, is being developed locally, so there are huge implications for him. He is pleased to have a marine energy park that he can use for sea trials.
George Eustice
I certainly agree. I hope to achieve in the debate some progress on what we want the marine energy park to deliver. My hon. Friend is right that such marine energy developers are taking considerable risks. They are pioneers of the industry and are expected to invest large sums of money in development. The least that the Government and their agencies can do is to get on and make things as easy as possible for them as they develop those pioneering ideas. I completely agree with her point.
Jim Shannon (Strangford) (DUP)
I thank the hon. Gentleman for bringing the matter before the House today. In my constituency of Strangford—in particular, with SeaGen at Portaferry—there have been successful trials of harnessing wave and tidal movement at the narrows of Strangford lough. Does he agree that there could be an exchange of information from different regions in the United Kingdom? In this case, what we have learned in Northern Ireland might be of advantage to those in England.
George Eustice
Indeed. The more we join up such academic research, the better. I know that EMEC—the European Marine Energy Centre—in Scotland worked closely with our academics at Tremough. I would be delighted to see us also working with academics in Northern Ireland, to ensure that we learn the lessons that they have learned.
Another area in which there is a big difference between Norway and the United Kingdom is consultation, which is onerous in the UK. The process in the UK is clearly defined, first a pre-screening consultation with the MMO and then a formal environmental assessment, which is the screening and scoping element. After that there is all the documentation preparation, with a series of environmental statements, and only then the formal application, which is followed by a whole bout of consultation, feedback and mediations to adjust things. Only then can there be a licence determination, after which there is a wait for the licence to be issued, which may cause problems and take time. Then, there are management returns and monitoring reports, and finally the process of decommissioning and proving compliance. The consultation procedure is very complicated.
Let us compare the procedure with that in Norway, which takes a much more pragmatic approach. The handling authority may choose to consult with other bodies, such as fisheries organisations or harbour authorities, but the consultation is loose, pragmatic and sensible. Typically, it takes no more than four weeks. On the environmental assessment here, the MMO must decide in every case whether there should be an assessment, whereas in Norway there are formal environmental assessments only for pre-defined and designated environmentally sensitive areas. In all other cases, self-assessment is generally the guiding principle. Here, the Crown Estate frequently insists on onerous requirements for insurance for decommissioning, but there are no such formal requirements in Norway. There are no application fees in Norway, where the process is completely free because it has maintained a light-touch system.
What happens here in the United Kingdom? Two hours of free pre-application advice is the most that is available, and after that advice is charged at £80 a hour to device developers. An application typically costs from £7,200, which is a huge additional cost. There is also a time implication. In the UK, an application to deploy might typically take nine months, compared with just one month, or three months at the outside, in Norway.
We can learn a lot from Norway. Clearly, we have different structures here. We have the MMO, with which we must work. I want to spend a few minutes reflecting on how to incorporate into our approach some of the lessons from Norway. First, could we not require the test facility operator to be responsible for deploying test devices within its test facility? The important point is that there is a lot of duplication. Wave Hub and FaBTest have had to go through the onerous screening, scoping and consultation processes. If someone wants to deploy a device on that test facility, they must go through the same process again. There is a lot of duplication, and giving authority to test facility operators would be the equivalent in Norway of giving harbourmasters greater control.
Secondly, can we simplify the consultation process within the test areas, given that they have been through huge amounts of consultation and screening? Let us remove the need for the screening and scoping stage because, again, it duplicates work that has already been done. The estimates suggest that, if just that element were removed, three months would be chopped off the application time. If the Norwegian authorities can agree the deployment of these devices in just a month, or three months at the outside, let us set a more stretching and challenging time scale for the MMO. Let us not allow it to sit on projects, letting them stew for months on end, and allowing matters to drag on for nine months. Let us tell it that we expect it to deliver within a month or two months.
Finally, we must enable the MMO to exercise more judgment, particularly on minor alterations to deployment. Sometimes, when a device developer is ready to deploy, it may decide that it needs to change a small aspect of its deployment. At the moment, it must go back to square one and go through the complicated consultation procedure again. The MMO must then consult with other people again, even when that is unnecessary because the suggested change is quite small. The ability to close out consent conditions would be more sensible, and the MMO could exercise judgment without necessarily having to return to the statutory consultees over and again.
Those are technical points, but if we are to make the marine energy park work, a key component is dismantling the barriers that stand in the way of marine energy developers. They take tremendous risks to pioneer an industry. Sometimes, they invest tens of millions of pounds to develop the technology. The very least that the Government can do is to make sure that Government-controlled agencies get off people’s backs and allow them to get ahead and to make a success of the industry.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I congratulate my hon. Friend the Member for Camborne and Redruth (George Eustice) on yet again securing a debate. He is an extraordinary champion of marine power in the south-west. It is no discourtesy to any of his colleagues in the region to say that he has undoubtedly been the most tenacious champion over a number years, and preceding his time in the House, in encouraging the formation of marine energy parks, and driving in the Conservative party an ambitious transformational approach to harnessing the power of the sea. He previously secured a Westminster Hall debate on funding for wave power, and his constituency is home to the ground-breaking Wave Hub testing facility for wave energy devices, which remains an important vital component of the South West Marine Energy Park.
I commend my hon. Friend the Member for Totnes (Dr Wollaston) for her comments and interest, and the real and growing interest in her constituency. I also commend the hon. Member for Strangford (Jim Shannon) for his comments; I look forward to visiting Northern Ireland to see for myself the huge potential for marine energy, and some of the exciting developments there.
Jim Shannon
The Assembly in Northern Ireland, which has devolved responsibility for this matter, has just concluded legislation on marine technology, so it might be possible to take advantage of that, because people will be eager to tell the Minister what we have done.
Gregory Barker
I look forward to opening the post. During the next few minutes I will endeavour to answer in detail the points that my hon. Friend the Member for Camborne and Redruth made. He gave a serious critique of the progress we are making, and the progress that we could make if we improved further the marine energy park and the processes underlying it. If I am unable to give an immediate response, I will write to him, and I will study and reflect on his important points and examples. He is an important voice on this agenda, and I assure him that we take it seriously.
Alongside the other UK marine energy testing facilities at EMEC in the Orkneys, and the marine drive train testing facility that is opening in the spring at the National Renewable Energy Centre—NaREC—in the north-east of England, Wave Hub helps to give Britain a unique offer to this emerging sector not just in the British Isles, but globally. Here in the UK, we continue to be a global focus for an important long-term global industry. It is vital to maintain that competitive advantage, given the significant and increasing interest in other parts of the world. I am constantly looking at how to push forward that agenda in partnership with the industry.
Combining the world-beating testing infrastructure that we have in the UK, particularly in the south-west, with world-class academic expertise, and the funding stream for marine energy, which I will talk about briefly, the coalition has created in the UK the most attractive environment for developing marine energy. It is still a nascent industry, but we believe that it is now the most encouraging environment anywhere in the world, and I am very proud of that.
Before I say anything about today’s topic, let me use this opportunity to welcome the report from the Select Committee on Energy and Climate Change on “The Future of Marine Renewables in the UK”, which was published last week. It underlines the great potential benefits that development of a thriving marine energy sector can bring to the UK, and recognises the coalition’s work to support development of the sector. When I spoke to the Committee last year, I underlined the Government’s determination to grow a thriving marine sector, building on Britain’s wealth of experience and expertise. We will carefully review the report and respond to its recommendations in due course.
I appreciate the concerns voiced by my hon. Friend. He has been a champion of this agenda in the past and it is right to listen to his concerns and take them seriously. I assure him that the Government are fully committed to maximising the benefits that the wave and tidal sectors can deliver. That commitment is explicitly underlined in the coalition agreement, and I am committed to ensuring that it is delivered.
I want to know if there are inefficiencies in the system, and I always look with interest at other models from abroad, or at best practice wherever it is found, to see how that can help to improve the design of our emerging marine economy. That is why I established the marine energy programme board, which brings together the Government, regulators and the marine energy sector. The programme is a vehicle to drive through ambitious changes that will enable marine energy to prosper, including by streamlining the leasing and licensing processes. The network of marine energy parks that we are creating around the UK will be another vital tool for driving home success on the ground.
Last month, I was delighted to be invited to visit the south-west and launch the first marine energy park, which received widespread positive coverage in the press. As hon. Members may know, marine energy parks are central to the Government’s goal to transform prospects for the sector, and they are something that I championed both in government and opposition.
Although wave and tidal technologies are very different, the clustering of activities through marine energy parks can help to drive the required innovation and growth in the sector, in a way that is not dissimilar to what clustering in silicon valley did, and continues to do, for the IT industry. Last year, I challenged the south-west to develop the UK’s first marine energy park. The expertise in the south-west, and the region’s commitment to developing wave and tidal energy, meant that it was among the first to successfully create such a park. I commend the south-west, and in particular its MPs who have been driving the agenda, on the dedication and willingness that has been shown in delivering this outstanding work, and on everything that has been done to turn the vision into reality. It is gratifying to see that the south-west is already using the marine energy park as a way of fostering co-operation and collaboration between sector players in a co-ordinated action to maximise opportunities open to the region, whether by encouraging investment or by maximising access to funds at Westminster or even European level.
I touched earlier on the marine energy programme. Working with key industry and Government stakeholders on the programme board, we can focus on the real issues facing the sector and show the leadership that is needed to tackle the barriers that impede development, and drive the sector forward. I am not complacent about the need to remove more barriers and create a glide path to deployment, which is why I take my hon. Friend’s points so seriously.
One of the first major tasks to which the marine energy programme board contributed was the review of the renewables obligation banding. The evidence that members of the board fed into the review through the board’s finance working group was invaluable, and led to the consultation proposal for enhanced levels of revenue support for wave and tidal stream to five renewables obligation certificates per megawatt, subject to a 30MW project cap.
The consultation on the proposed banding is now closed, and although I am obviously unable to prejudge the final outcome of the review, the work will stand us in good stead when reaching the right decision about the level of ROCs needed to take the sector through to early commercial-scale deployment. The Government’s response to the consultation will be published in spring.
Our work with the sector through the programme board has demonstrated that as well as revenue support, the sector needs capital investment if it is to move towards commercialisation. I therefore announced last June that following the success of the £22 million marine renewables proving fund, the Department of Energy and Climate Change has also allocated up to £20 million for the development of pre-commercial wave and tidal arrays. I remind hon. Members that that funding represents a significant proportion of the overall DECC innovation funding allocated for the spending period at a time of severe retrenchment and austerity, so it is a good outcome for the sector.
My officials have been working with the sector on designing the marine energy array demonstrator fund, or MEAD. The overall framework of the scheme is nearing completion, and we envisage that it will be open for applications this spring. More recently, there has been a welcome announcement of additional funding from the Scottish Government. It is important, however, that that funding complements the support already put in place by DECC, the Energy Technologies Institute, the Technology Strategy Board and others, as well as the opportunities presented by the EU new entrants reserve. My officials are working with their Scottish Government counterparts to ensure that funding is complementary, used effectively, and offers best value for money. However, the success of the industry does not rest solely on financial support.
We have also made progress on planning and consents—a point close to my hon. Friend’s heart. In particular, DECC completed the offshore energy strategic environmental assessment for wave and tidal energy in English and Welsh waters last year. The SEA complements the existing work for Scotland, Northern Ireland and the Severn estuary, and opens up suitable sites across the UK for consideration concerning the potential deployment of marine energy devices.
My hon. Friend raised concerns about the Crown Estate, and I will take them on board when I further consider his remarks. We should not, however, overlook the work that the Crown Estate is doing with the sector to enable commercial-scale deployment. At the end of last year, the Crown Estate launched a tidal stream leasing round in Northern Ireland, which followed the success of the world’s first commercial-scale wave and tidal leasing round, in which the Crown Estate leased 11 sites in Scotland’s Pentland firth and Orkney waters, which could extend to 1.6 GW of capacity.
Work is already under way to consider how the practicalities of sea-bed leasing can be best approached. Later this year, the Crown Estate plans to run a consultation with industry on future wave and tidal leasing, which will be informed by work that it is undertaking to clarify the size and distribution of wave and tidal energy resources across the UK. Leasing for small test deployments is currently dealt with case by case through a newly set up fast-track process. Such deployments should not be subjected to the same complexity of process as larger, commercial-scale deployment, and I would be keen to hear whether that is the experience of stakeholders.
On licensing and planning, we need to build on the work that has already started in Scotland to ensure that a coherent and efficient system of planning and consenting is adopted across the UK. I have asked the Marine Management Organisation, and Marine Scotland, to work with the sector to look at ways of ensuring that the licensing process is as efficient as possible, while maintaining the necessary level of protection for the environment.
The Department for Environment, Food and Rural Affairs is reviewing the implementation of the birds and habitats directives, which are important environmental directives that affect the renewable energy sector. The views of the offshore renewables sector are being fed into the review, so that the right balance between efficient deployment of marine energy and the safeguarding of our marine habitat can be struck. I will, however, take on board my hon. Friend’s comments about Norway.
George Eustice
At the start of my speech I noted that the issue also involves DEFRA. Would the Minister be willing to meet the chief executive of Wave Hub, the Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon) and me to thrash out the detail of some of these problems, which he could then feed into the programme board?
Gregory Barker
That sounds like an excellent idea. Obviously, I cannot commit my hon. Friend the Under-Secretary of State to that, but he is an amenable chap and I am sure that, subject to our diaries, we can work something out.
We have achieved a lot since our last debate on wave energy, but I recognise that there is much more to be done and we do not intend to rest on our laurels. Over the coming months, the Government will continue to work on a number of priority areas. It is important to ensure a place for marine energy within electricity market reform proposals, and the next meeting of the marine energy programme board will be in Scotland in the summer. There is a lot more to do, but the Government have a lot of ambition. I am grateful to my hon. Friend for his continued enthusiasm and support for this exciting agenda.
Question put and agreed to.
Written Ministerial Statements
(12 years, 2 months ago)
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English for Speakers of Other Languages
(12 years, 2 months ago)
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The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)
Together with my hon. Friend the Under-Secretary of State for Communities and Local Government, the Member for Hazel Grove (Andrew Stunell), I would like to update the House following my statement I made on 18 July 2011, Official Report, columns 59-60WS, on the provision of English for Speakers of Other Languages (ESOL) training.
The written statement of 18 July 2011 stated that the Department for Business, Innovation and Skills would work with the Department for Communities and Local Government to consider additional ESOL provision for learners with no, or extremely poor, levels of spoken English, who are not in or currently actively seeking employment, and are unable to afford course fees.
We are therefore pleased that the Secretary of State for Communities and Local Government will make available up to £10 million in the 2011-12 academic year to support this additional English language training. Funding is now being offered to further education colleges and training providers in areas facing significant integration challenges to support the delivery of English language training.
As set out in “Creating the Conditions for Integration”, published on 21 February, we believe that being able to communicate in English is vital for an individual’s personal advancement, and central to creating strong and integrated communities.
Police and Guarding Agency
(12 years, 2 months ago)
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The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)
As part of the programme of work associated with defence reform within the Ministry of Defence, the Ministry of Defence Police and Guarding Agency (MDPGA) will cease to have the status of an Executive agency from 1 April 2012.
The Ministry of Defence police (MDP) has been an agency under the then Government’s “Next Steps” regime since 1996. The MDP were subsequently combined with the MGS to become the MDPGA in April 2004.
The separate elements of the MDP and the MGS will continue within MOD’s organisational structure, albeit collocated and under the command of Chief Constable MDP.
The change in operating status will have no impact on the MDPGA’s customers, and will contribute some £140,000 towards MOD and National Audit Office accounts and administration savings.
Electoral Registration (Annual Canvass 2012)
(12 years, 2 months ago)
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The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
Elections for Police and Crime Commissioners (PCC) and potentially for elected mayors in the larger English cities will take place on 15 November this year. These will fall in the period in which the annual canvass of electors normally takes place and, as such, raise a number of issues including concerns about the quality of the register available for the elections and the increased burden on electoral administrators of conducting a canvass at the same time as preparing for an election. The Government have worked closely with the Association of Electoral Administrators, the Electoral Commission and others to consider the options for addressing these concerns.
To better accommodate these elections, I am directing Electoral Registration Officers (EROs) to commence and conclude this year’s canvass earlier than would normally be the case in the areas where PCC elections are taking place (England and Wales excluding London). Following a positive recommendation from the Electoral Commission on 21 February under section 8(1) of the Political Parties, Elections and Referendums Act 2000, I am issuing a direction today to all relevant EROs pursuant to section 52(1) of the Representation of the People Act 1983.
This will be a one-off approach for this year and the canvass in Scotland and in London will be unaffected. This is the best option available to provide for consistency for the PCC elections and certainty for all involved.
The Government’s clear aim is to ensure well-run elections and a successful annual canvass. Requiring the canvass to start earlier will ensure that there is sufficient time for EROs to carry out the full range of canvassing activities, consistent with their statutory duty to take all necessary steps to maintain complete and accurate registers. The Electoral Commission has developed specific guidance for electoral administrators on the practical implementation of the direction to supplement its existing good practice guidance on the annual canvass process.
I am placing a copy of the direction in the Libraries of both Houses.
Hong Kong (Sino-British Declaration)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
The latest report on the implementation of the Sino-British Joint Declaration on Hong Kong has been laid before Parliament and will be published today. A copy of the report is also available on the Foreign and Commonwealth Office website (www.fco.gov.uk). The report covers the period from 1 July to 31 December 2011. I commend the report to the House.
Winterbourne View
(12 years, 2 months ago)
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The Minister of State, Department of Health (Paul Burstow)
I promised to update the House about ongoing activity in relation to Winterbourne View private hospital and other services for people with learning disabilities.
The House will wish to note that 11 people employed at Winterbourne View appeared in Bristol Crown court on 9 February. Three people have pleaded guilty and have been referred for sentencing reports. A further eight people are due back in court on 16 March.
The Care Quality Commission (CQC) has now completed their focussed inspections of 150 services for people with learning disabilities. The reports from these inspections are being published in batches and a further 20 reports are being published today. They can be found at: www.cqc.org.uk/LDReports?latest.
67 inspection reports have been published so far. These reports have found poor practice in some of the units and some major concerns.
Where the CQC has identified concerns, the provider is required to inform CQC when its improvement actions have been completed. CQC will follow up to check that the improvements have been made, including further inspections where necessary.
We have written to NHS and local authority chief executives to ensure that they are continuing to take action required to address any concerns raised; and review their own commissioning, care planning and oversight arrangements to support improvements.
We will continue to look for ways to drive up standards across health and care for people with learning disabilities.
The results of the CQC inspections programme will feed into the wider departmental review of Winterbourne View, together with the reports from the serious case review and the NHS serious untoward incident review, and evidence from other investigations and reports.
The departmental review is continuing to engage with people with learning disabilities or autism and challenging behaviour and their families about how services can be improved. Ministers will report findings from the departmental review to Parliament and determine what further action is necessary.
I will continue to update the House as things develop.
Immigration
(12 years, 2 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
In June last year, I published a consultation document on employment-related settlement, tier 5 of the points-based system and overseas domestic workers. That document set out proposals to break the automatic link between coming to the UK and settling here permanently, and to reform the other routes. Today, I am setting out our plans following the consultation.
Until now, settlement has been a virtually automatic consequence of five years’ residence in the UK as a skilled worker. Those who have settled have tended to be less well paid and lower-skilled than those who have not. And the volumes of migrant workers settling have reached record levels in recent years. In 1997, there were fewer than 10,000 migrant workers and their dependants were granted settlement, but by 2010 this had risen to 84,000. So in future, we will exercise control to ensure that only the brightest and best remain permanently.
Following advice commissioned from the independent Migration Advisory Committee, we will apply a minimum pay threshold to skilled workers in the tier 2 (General) and tier 2 (Sportsperson) routes who want to settle. The threshold will be £35,000 per annum. In order to settle, a worker must be paid at that threshold or at the appropriate rate for the job as specified in codes of practice published by the UK Border Agency, whichever is higher. The £35,000 figure reflects the median pay of UK workers in tier 2 level jobs.
To provide flexibility where there are skills shortages in the domestic labour market, we will waive the £35,000 threshold for migrants who are being sponsored to do jobs which are on the shortage occupation list, or have appeared on the shortage occupation list at a time while the migrant has been sponsored to do that job. Similarly, to help maintain the UK’s position as a hub for the world’s best scientists and researchers, we will not apply the threshold to those scientists and researchers, who are in specified “PhD level” jobs. However, as now, these settlement applicants will need to be paid the appropriate rate for their job, as set out in the UK Border Agency codes of practice.
We will apply the new settlement pay threshold to tier 2 migrants applying for settlement from April 2016. To provide certainty for migrants and employers, we will hold the threshold at £35,000 until April 2018. We will confirm the threshold for 2018-19 next year and review it annually thereafter.
Tier 2 is intended to provide a solution to temporary skills gaps in the domestic labour market. So in future, temporary leave as a skilled worker will be limited to a maximum stay of six years and tier 2 migrants who leave the UK will need to wait 12 months after the expiry of their leave before they may reapply to return under tier 2. At a time of high unemployment, we owe it to British workers to ensure that our migration system does not perpetuate reliance on migrant labour.
We intend to leave the settlement rules for tier 1 migrants unchanged. These arrangements, for investors, entrepreneurs and those of exceptional talent, were put in place as recently as 2011 and are consistent with welcoming the high value individuals the UK needs to drive economic growth.
The predominant message from the consultation was that employers wanted a settlement system that provided certainty, simplicity and flexibility. These measures will deliver that.
Turning to the overseas domestic worker (ODW) routes, we will introduce changes to align these categories with our wider migration policy. At a time when we are reserving settlement for the brightest and best and moving towards a more selective system in general, it is not right that domestic worker routes should lead to settlement in the UK. In 2011, 16,430 visas were issued to ODWs in private households, including dependants, and 1,280 grants of settlement were made to ODWs and their dependants. So we shall reform the rules as follows.
ODWs in private households will only be permitted to accompany and work for visitors. They must leave the UK with the visitor, after a maximum of six months. They may not extend their stay, switch employer, sponsor dependants or settle here. ODWs in diplomatic households will be able to remain for the diplomat’s duration of stay, up to a maximum of five years. They may not switch employer or settle but may be accompanied by their dependants.
We recognise that the ODW routes can at times result in the import of abusive employer/employee relationships to the UK. It is important that those who use these routes to bring their staff here understand what is and is not acceptable. So we will be strengthening pre-entry measures to ensure that domestic workers and their employers understand their respective rights and responsibilities. Key to this will be written terms and conditions of employment that are agreed by both employee and employer. But the biggest protection for these workers will be delivered by limiting access to the UK through these routes. We are restoring them to their original purpose—to allow visitors and diplomats to be accompanied by their domestic staff—not to provide permanent access to the UK for unskilled workers.
Tier 5 of the points-based system caters for people coming to the UK for temporary, primarily non-economic purposes. The consultation revealed that the routes in tier 5 are too diverse to adopt blanket rules, for example on length of leave, ability to sponsor dependants and skills requirements. However, there will be some tightening of the current provisions. Internships and work experience type schemes within the Government authorised exchange scheme sub-category will be restricted to one-off stays of a maximum of 12 months, as this is sufficient time to obtain the necessary experience. From the autumn, leave for contractual service suppliers and independent professionals using the international agreement sub-category will be restricted to six months in 12, in line with our commitments under the general agreement on trade in services (GATS) and other free trade agreements.
We shall also make some deregulatory changes. In response to feedback that sponsorship requirements in the PBS can be unduly onerous and inflexible in some circumstances, we intend to create a new route outside the points-based system for certain fee-paid activities. Visitors in this new category (“permitted paid engagements”) will be able to undertake specific fee paid activities for up to one month without the need for formal sponsorship by a UK-based employer. Those who will be able to benefit will include certain professionals, for example visiting lecturers and examiners, artists exhibiting works, authors undertaking book signings, entertainers giving one-off or a very short series of performances and sportspeople undertaking broadcasting work. They will have to demonstrate they intend to leave the UK after a month.
We have already overhauled much of the immigration system since May 2010. We have closed the old tier 1 general route that allowed migrants to come here without a job and replaced it with reformed routes for entrepreneurs and investors and a new route for those of exceptional talent—the people the UK really needs. We have limited the number of skilled workers who can enter through tier 2 to fill specific vacancies; tightened the skills and language requirements and introduced new rules on intra-company transfers. We have refocused the student visa system so that only high-quality, genuine students can come to the UK and we continue to tighten the rules. A statement of intent published on 13 February sets out how changes to the student rules, which were announced to the House last March and which are due to come into effect from April, will operate. We have a clear goal: to reduce net migration to sustainable levels and to build an immigration system that is smarter, more selective and more responsive.
The changes already made are starting to deliver results. The policies described in this statement represent the next phase in our programme of immigration reform. Taken together, they form a balanced package of measures that will contribute to reducing net migration and delivering a sustainable, selective immigration system. They will break the link between coming to work and settling permanently helping to ensure that we remain in control of who comes and who stays.
Today, I shall publish a statement of intent on the Home Office and UKBA websites setting out in more detail the measures that I have announced to the House today. Two further documents which I shall make available on the departmental websites are a summary of the responses to the public consultation and an analysis by the UK Border Agency of the salary and occupations of a sample of skilled workers who settled in 2011. Copies of these documents will be placed in the House Library.
We will lay the necessary changes to the immigration rules before Parliament in mid-March, to come into effect from 6 April. The exception is the changes to the tier 5 international agreement sub-category, where we shall bring forward rules changes in the autumn.
With the exception of the tier 2 settlement rules changes, the rules changes laid in mid-March will apply to those submitting applications on or after 6 April 2012. As previously notified, the new tier 2 settlement rules will affect those who entered the points-based system under the rules in force from 6 April 2011 and who will be eligible to apply for settlement from April 2016. Further details are provided in the statement of intent.
House of Lords
(12 years, 2 months ago)
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Health: Mesothelioma
(12 years, 2 months ago)
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Lord Alton of Liverpool
To ask Her Majesty’s Government what has been the cost to the Exchequer of mesothelioma cases heard in British courts in the past five years.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, based on the data available to us, it appears that the vast majority of mesothelioma claims against the state settle rather than proceed to the courts. While we do not collect centrally data relating to costs in individual categories of cases, there is no evidence to indicate that these cases differ markedly from other personal injury cases, either in cost to the Exchequer or in the costs of bringing them.
Lord Alton of Liverpool
I am grateful to the Minister. Will he demolish two myths? The first is that these cases are legally aided, which they are not, and, secondly, that they are part of a compensation culture, which they are not—given that there have been 30,000 deaths from mesothelioma. Would it be possible in any circumstances to fake such a disease? Instead of confiscating, as the Government intend to do, some 25 per cent of the modest compensation awarded to a terminally ill victim, why not consider other ways, such as fixing success fees—as has been done for industrial disease claims—without using asbestos victims as a rod to discipline solicitors or to aid and support the insurance industry?
Lord McNally
My Lords, the noble Lord uses strong words. Of course I do not believe that victims of this dreadful disease are in any way part of a compensation culture. He is quite right to say that legal aid for these kinds of cases was removed by the previous Administration in 2000. However, his strictures on what we are trying to do on this are too harsh. First of all, there is no compulsion on solicitors to charge any success fee, let alone 25 per cent, which is the maximum they can charge. The reforms that we are proposing upgrade the costs awarded by 10 per cent and protect a large amount of that compensation for future care. It is therefore not fair to term our reforms in the way that the noble Lord described, but I am pleased to make the clarifications that he asked for.
Lord Bach
My Lords, will the Minister confirm that the Government’s civil justice proposals mean that mesothelioma sufferers may have to pay 25 per cent of their general damages, plus their special damages for past loss, which, because of the length of these cases, can be very significant? Given that these sufferers may die in a short period of time, why will the Government not back the principle that hard-working people who have done nothing wrong should receive their full damages and not a penny less?
Lord McNally
The noble Lord keeps on picking these cases to support. The fact is that the previous Government removed legal aid from these cases, as was pointed out—not many cheers for that. As to the package that we have put together, as I said before there is no compulsion on solicitors to demand a 25 per cent success fee from these people. Solicitors still get their full fee; we are talking about the maximum success fee that they can get. We are putting in place a system that deals with a real abuse in the costs of these cases that crept in after the reforms that the noble Lord’s party introduced in 1999. We are simply returning to the system as originally brought in by the previous Government. We think that that worked well and will work well again.
Lord Avebury
My Lords, it is clear from their response to the Jackson committee report on civil litigation that the Government’s main objective is to save money. Does my noble friend acknowledge that in the case of mesothelioma sufferers, they do that by deterring people from making genuine claims? Does he also accept the estimate in the London Economics report on the fiscal impact of the Jackson proposals in the area of employers’ liability that the net loss to the Exchequer of the proposals is £70.2 million a year? If not, can he place a note in the Library of the figures that the Government would substitute for those in the Jackson committee report?
Lord McNally
My Lords, we are in no way deterring people from making claims for this terrible disease. We fully acknowledge that a large number of people have been diagnosed as sufferers. Even more tragically, the estimate is that many more will be diagnosed over the next 30 years. That is the terrible nature of this affliction. We have been trying to lower the bar to litigation. As I said, most cases, certainly against government bodies, are settled before they get to court. The Department for Work and Pensions has undertaken various initiatives to make it easier for claimants to trace their employer's insurers. Discussions are being held with stakeholders to determine what more can be done for sufferers. The High Court is introducing a fast-track procedure so that these cases can be dealt with more easily.
I understand why noble Lords are campaigning on this, but I do not think that the charge that we are trying to victimise the sufferers in some way really sticks.
The Lord Bishop of Liverpool
My Lords, is the Minister aware of the landmark judgment won in the Supreme Court recently by the president of the Liverpool Law Society about compensation for this disease? Is he further aware that Mr Jones commented afterwards that, had it lost the case, his firm would face bankruptcy? Will not the Minister reconsider the policy in the light of that experience?
Lord McNally
My Lords, the Supreme Court has removed some of the hurdles for sufferers of respiratory diseases in bringing claims, and that is all to the good. We are also progressing with the primary legislation brought forward under the Compensation Act 2006. As I said, Senior Master Whitaker, who oversees these cases in the High Court, has helped to introduce a fast-track procedure, which has been incorporated into a practice direction, ensuring that claims are dealt with as quickly as possible. These are terrible cases. It is right that noble Lords and others, such as the Daily Mirror, campaign for sufferers, but I reject the claim that we are in any way penalising or victimising them by what we propose.
Lord McFall of Alcluith
My Lords, as one who represented many hundreds of mesothelioma sufferers from local shipyards in Scotland, I give the noble Lord some examples of what happened there. Given that court cases were taking two years and the average life of sufferers was 18 months, the Lord President was approached and he decided to designate a judge to look at those cases in particular, thereby cutting down the waiting time in courts. Also, the Scottish Parliament passed the Rights of Relatives to Damages (Mesothelioma) (Scotland) Bill, which took away the iniquitous choice of either sufferers claiming while they were living or their relatives waiting until they died before making a claim. By adopting these two measures, the Government could, at a stroke, save themselves money, save court time and produce a more humane way of treating the sufferers of this terrible disease.
Lord McNally
I fully appreciate the noble Lord’s concern arising from his experience as a Member in the other place. One thing that we have been trying to do—the previous Administration also initiated this—is to speed up these cases. As I mentioned before, perhaps taking the lead from the Scottish example, Senior Master Whitaker oversees these cases in the High Court and brings his expertise to the whole matter. However, perhaps I may give one example of misinformation. The Daily Mirror suggested that up-front insurance of £2,300 would have to be paid. The reforms that we are bringing in remove that burden on sufferers. Therefore, I think that a proper, balanced look at our reforms would make some of the accusations made today seem very unfair indeed.
Caribbean Nations
(12 years, 2 months ago)
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Baroness Benjamin
To ask Her Majesty’s Government what steps they are taking to maintain and secure the United Kingdom’s long-standing friendships with Caribbean nations.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, the Government are committed to maintaining and strengthening our excellent relationship with the Caribbean. The Foreign and Commonwealth Secretary led a strong delegation of Ministers, senior officials and businessmen to the UK-Caribbean Ministerial Forum in Grenada in January. At that forum an action plan was agreed with the Caribbean nations that will benefit both the region and the United Kingdom. This plan focuses on security, economic resilience and sustainable development.
Baroness Benjamin
I thank my noble friend for that encouraging Answer. However, I am sure he is aware that the Caribbean nations are feeling very vulnerable at the moment, partly due to the unfair air passenger duty and the crippling EU banana and sugar agreements. Also, an increase in drug trafficking is corrupting the area. Can my noble friend tell the House when the fine words that came out of the UK-Caribbean forum will be put into action to avoid Caribbean nations having perhaps to turn to untested friendships for support?
Lord Howell of Guildford
I assure my noble friend that the decisions reached at the forum will lead to action. A new strategic partnership has been agreed with the forum and we have undertaken to engage the Caribbean nations before every G20 and OECD to see that their interests are at the fore. As my noble friend knows, there is a large DfID programme. We want to make the European economic partnership agreement really work and we will press our EU colleagues on that front. As for the APD issue, I agree that this is contentious and difficult. It was agreed at the forum to continue the dialogue on APD-related issues and we are open to further discussion. For the time being, it has been decided to retain the existing banding but, as I said, this matter is very much in our minds.
Lord Tomlinson
Is the noble Lord aware that this year is the 50th anniversary of Jamaican independence? In view of the large number of Jamaicans forming a diaspora in this country, can he say whether Her Majesty’s Government have any plans to celebrate that anniversary and what form it will take?
Lord Howell of Guildford
This is obviously a celebration in which we wish to participate. To mark the Diamond Jubilee this year—which of course is not the same as the anniversary to which the noble Lord has referred—Prince Harry will visit Jamaica and the Earl and Countess of Wessex will visit a whole range of other islands in the Caribbean. I think that that is all I can tell the noble Lord about the matter at the moment but it is very much in our minds.
Lord Boswell of Aynho
My Lords, does the Minister consider it important that there should be a continuing and visible Royal Navy presence in the area?
Lord Howell of Guildford
Yes, we agree that there should be. A Royal Fleet Auxiliary Ship is there all the year round. It has a royal naval presence on it for six months of the year, and it has had some success. The noble Lord is absolutely right.
Lord Harrison
Will the Minister report on the levels of trade between the United Kingdom and the Caribbean and whether it is on an upward or a downward trend? Can he further report whether he has confidence in the Commonwealth Business Council to promote that trade?
Lord Howell of Guildford
On the second point, we have both confidence and hope: the Commonwealth Business Council has gatherings in the Caribbean and is very much on an upward trend as an organisation. As the noble Lord will know, down at the Heads of Government Meeting in Perth, which was attended by most of the Caribbean nations, there was a vast concourse and an enormous deal-flow generated by the Commonwealth Business Council. So I think that it can certainly help. As for direct bilateral trade between this country and the Caribbean region, it is the biggest chunk of trade of the whole area, taken for Caricom as a whole. It is, I think, on a steady upward trend, and it is one that we certainly intend to encourage.
Lord Phillips of Sudbury
Can my noble friend tell the House whether there are plans to renegotiate any of the tax arrangements between this country and those Caribbean countries that are tax havens?
Lord Howell of Guildford
I cannot give a specific answer, but these matters are always under review.
Lord Morris of Handsworth
My Lords, I note the Minister’s reply that Prince Harry intends to visit Jamaica as part of the 50th anniversary celebrations. Would it not be more economical if the newly elected Prime Minister of Jamaica, the right honourable Portia Simpson-Miller, were invited to visit the United Kingdom?
Lord Howell of Guildford
The more exchange of invitations and the more visits on both sides—which would certainly be very welcome—the better. I cannot give a specific response to the noble Lord’s suggestion, but the more we travel between our regions and the more we understand dialogue together the better the future will be for both the UK and the whole Caribbean region.
Health: Pneumoconiosis
(12 years, 2 months ago)
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Lord Wigley
To ask Her Majesty’s Government how many payments of compensation were made, in the most recent year for which figures are available, under the provisions of the Pneumoconiosis Etc. (Workers’ Compensation) Act 1979, and how many of these were made to former slate quarrymen.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
In the year from April 2010 to March 2011, 2,820 payments were made in total under the Pneumoconiosis Etc. (Workers’ Compensation) Act 1979. We are not able to identify how many payments were made specifically in respect of former slate quarrymen.
Lord Wigley
My Lords, the Minister will clearly be aware that, while the 1979 pneumoconiosis Act was primarily triggered by the plight of slate quarrymen who were unable otherwise to secure compensation for industrial lung diseases they suffered, most of the beneficiaries have, quite fairly, been from other industries. Is he aware that while some coal-miners suffering emphysema and chronic bronchitis have secured compensation under the 1979 Act, former slate quarrymen suffering emphysema and chronic bronchitis—which are equally endemic in slate quarrying as in coal-mining—cannot be compensated under the Act? Will he discuss this with fellow Ministers so that this small but long-suffering group of slate quarrymen can achieve the justice to which they are equally entitled?
Lord Freud
My Lords, I was not aware of this discrepancy, so I will go back and have a look at exactly what is behind it, because I just do not know.
Lord Roberts of Conwy
My Lords, as many of us will know, many of the sufferers from pneumoconiosis were victimised by avaricious lawyers and lost a substantial portion of their compensation awards. Was that money ever recovered and returned to the proper beneficiaries?
Lord Freud
Again, my Lords, I am regrettably not an expert in that matter. As far as I am aware, there was not any movement to restore it, but I will have a look and write to the noble Lord on that matter.
Lord Morris of Aberavon
My Lords, I am encouraged by the statement of the Minister that he will look to see if there is a gap in the legislation that needs to be covered. The Act was one of the proud achievements of the Labour Government of 1974 to 1979. Its intention was to apply generally where there was a problem. In particular, the question of the quarrymen had been raised and pushed forward very strongly. We take pride in having passed the Act and the Minister has encouraged me by saying that he would look for any gaps in it.
Lord Freud
My Lords, I will look at the Act. The 2008 Act and the 1979 Act were intended to help people with this set of diseases. We are very conscious that some people miss out because they cannot trace claims. That is another matter that we are looking at very actively.
Lord Roberts of Llandudno
My Lords, I am grateful for the Act, and of course some who advocated it are present in the Chamber this afternoon. At its height, the Welsh quarrying industry employed some 17,000 quarrymen. As the years have gone by, the numbers suffering from pneumoconiosis and silicosis have fallen. How many people now have been diagnosed with these two diseases, which the Act was introduced to cover?
Lord Freud
As noble Lords may imagine, when I was asked this Question I tried to get more fine detail, but it simply is not available. There is a division between those suffering from mesothelioma and those suffering from other diseases; that is the only breakdown that we have. I cannot provide the information that the noble Lord requested.
Lord Morgan
My Lords, perhaps in common with other noble Lords I have members of my family who worked in the slate quarries and died as a result of their employment. When the Act was passed by the Callaghan Government in 1979, Members of the Commons were assured that there would be an equality of authority for workers in the slate quarrying industry—a small, fragmented, rural industry—and those in more powerful and numerous groups working in, let us say, the coal-mining and textile industries. In view of the figures given by the noble Lord, Lord Wigley, can we be sure that those assurances have been met?
Lord Freud
My Lords, the 1979 and 2008 Acts were drawn very precisely to cover certain diseases. I am sure that noble Lords know that these range from asbestosis through mesothelioma, relevant silicosis and other illnesses contracted from cotton, clay, and so forth. The Acts that cover these diseases are very precise. Other industrial diseases are covered by the Industrial Injuries Advisory Council, and industrial benefits are based on those diseases.
Lord Cormack
My Lords, while strongly supporting the pleas made by noble Lords who come from Wales, could I, who represented many thousands of coal-miners in England, emphasise to my noble friend that the problem is by no means confined to the Principality, and that there are people in Staffordshire, Yorkshire and all over England who will want to hear what he says and who will hope for a positive result?
Lord Freud
My Lords, if there are discrepancies between miners and quarrymen, I will go back and look at them. I was not aware that there were such discrepancies. I will look at them and take whatever measures are required.
Lord McKenzie of Luton
My Lords, as we know, one of the challenges of long-latency diseases is the tracing of old employer liability insurance policies. The noble Lord referred to that a moment ago. Will he be more specific about progress on the Employers’ Liability Tracing Office, and in particular whether it is now accepted that there should be back-filling of policies to November 1999—the start of the code—rather than applying it only to future policies? Will the Minister also say whether there has been progress on ELIB, the bureau of last resort when employer liability policies cannot be traced?
Lord Freud
My Lords, although there has been silence since the document came out in May 2010, I assure the noble Lord that there has been a lot of activity behind the scenes. I am holding discussions with all the relevant parties and I hope that I am making progress on the matter of tracing. Noble Lords will be aware that when a company disappears some claimants simply cannot find their insurance. That matter is under active discussion.
Employment: Work Programme
(12 years, 2 months ago)
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Lord McKenzie of Luton
To ask Her Majesty’s Government what progress is being made by the Work Programme in assisting benefit claimants to find employment.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, the Work Programme provides personalised support for the long-term unemployed and those at risk of long-term unemployment. By the end of October 2011, 332,000 people were already receiving this support. We will publish the first statistics on job outcomes in the autumn.
Lord McKenzie of Luton
My Lords, I thank the Minister for his reply. As the recent NAO report made clear, the Work Programme has been bedevilled by the speed of its introduction, which included a lack of piloting, going live before the IT was in place, and compiling the business case after the decision to proceed. Perhaps this is why the Government are a little coy about releasing data, although such relevant data as we have show that benefit off-flow rates are down, not up; that referrals to the Work Programme include only a trickle of the hardest to help; and the haemorrhaging of voluntary and community sector providers. Will the Government now at least permit providers to publish their own performance data and, under the Government’s own data work programme, arrange for the publication of user satisfaction information?
Lord Freud
My Lords, I must point out that the NAO acknowledged that the Work Programme addressed significant weaknesses of previous programmes; that key elements within it improved affordability and drove value for money; and that it was a significant achievement to introduce it in a year. It is expected to help more people more effectively and for less money than previous programmes. As for information, ERSA has put out some information about what happened to the first cohort. It said that people got into jobs at a rate of between 18 per cent and 23 per cent, which was more or less in line with the expectations of the industry.
Lord German
My Lords, up and down the country there are third sector and charitable organisations supporting the Government in delivering this Work Programme as subcontractors. However, the National Audit Office report shows that many of these subcontractors are concerned about the way they are being treated by the prime contractors, and recommends that the Government should institute a programme of spot checks to ensure that they are fulfilling the standards which I know the Government have put in place. Can my noble friend tell me whether these spot checks have taken place yet, and if not, when are they likely to take place, and will he report to the House?
Lord Freud
My Lords, we monitor very closely what is happening within each of the prime provider contracts, and we have introduced—I think for the first time by any Government, in this country certainly—a process where the prime providers look after their supply chains, which we call the Merlin Standard. That is the main protection for subcontractors to make sure they are treated appropriately.
Baroness Sherlock
My Lords, when travelling the country with the Riots Communities and Victims Panel, a frequent complaint was that the Work Programme did not have any subregional targets. For example, if you had a couple of wards with very bad unemployment, which could potentially be a reason for future disturbances, a contractor could actually meet all its targets by cherry picking people from other areas who were easier to move into work, and leaving that area untouched. Can the Minister tell the House what the Government are doing about that?
Lord Freud
My Lords, the way that we are trying to reduce the cherry picking, which has been natural in all of the programmes that have been introduced, is to try to fine-tune the financing so that providers are incentivised to help the hardest to help. That is why providers can earn up to £14,000 to help the very hardest to help. If we see problems developing, in that we have not priced accurately, we will need to look at pricing structures, because that is the way to solve the problem.
Lord Knight of Weymouth
My Lords, the Department for Work and Pensions says that, of those referred on to the Work Programme—those unemployed for more than 12 months—30 per cent would get a job anyway, regardless of any intervention. I gather that the minimum contract performance on the Work Programme is to get 33 per cent into work. Therefore, for a difference of only 3 per cent, they can start making a profit. Is it not therefore vital that there is full disclosure region by region or contractor by contractor in real time—that is what is wanted from employers for universal credit—so that we can make sure that those contractors are doing a lot better than a paltry 3 per cent?
Lord Freud
My Lords, this is designed so that people are investing their own money, which they will get back when they start making a return above what would have happened anyway—that is, in the jargon, above the dead weight. We will produce statistics to national statistics standards. Clearly, we can do that only once we can see some results. This is a long-term programme in the sense that you start getting rewards, even your first reward, possibly only after six months of that person being in work. Then you start getting further rewarded as you keep the people in work. The first time we think that it is sensible to have national statistics is around the autumn. That is what that process has come up with. I assure the noble Lord that I am looking forward a lot to showing noble Lords what those figures say. From what I am hearing anecdotally, I think that I shall be feeling very smug at that point.
Lord McKenzie of Luton
My Lords, perhaps I may ask the Minister to answer the question I posed. Will the Government now permit providers to publish their own performance data?
Lord Freud
My Lords, I thought that I had made that clear. Some performance data have been put out by ERSA. We are discussing with ERSA what kind of performance data it can put out. Clearly, we have to be careful that the information that goes out from the providers cannot undermine what the national statistics will say. That is the issue.
Trusts (Capital and Income) Bill [HL]
(12 years, 2 months ago)
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Deputy Chairman of Committees
(12 years, 2 months ago)
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The Chairman of Committees
That Baroness Andrews be appointed a member of the panel of Deputy Chairmen of Committees, in place of Baroness Gould of Potternewton.
Legal Aid, Sentencing and Punishment of Offenders Bill
(12 years, 2 months ago)
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Lord McNally
That the amendments for the Report stage be marshalled and considered in the following order:
Clauses 1 to 8, Schedule 1, Clauses 9 to 23, Schedule 2, Clauses 24 to 30, Schedule 3, Clauses 31 to 37, Schedule 4, Clause 38, Schedule 5, Clause 39, Schedule 6, Clauses 40 to 59, Schedules 7 and 8, Clauses 60 to 65, Schedule 9, Clauses 66 to 83, Schedule 10, Clause 84, Schedule 11, Clauses 85 to 99, Schedule 12, Clauses 100 to 104, Schedule 13, Clause 105, Schedule 14, Clauses 106 to 114, Schedule 15, Clause 115, Schedules 16 and 17, Clauses 116 and 117, Schedules 18 and 19, Clause 118, Schedule 20, Clause 119, Schedule 21, Clauses 120 to 124, Schedule 22, Clauses 125 to 127, Schedule 23, Clauses 128 to 133, Schedule 24, Clause 134, Schedule 25, Clause 135, Schedule 26, Clauses 136 to 143.
Jobseeker’s Allowance (Domestic Violence) (Amendment) Regulations 2012
(12 years, 2 months ago)
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Lord Freud
That the draft regulations and orders laid before the House on 19 and 30 January be approved.
Relevant documents: 39th and 40th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 27 February.
Domestic Violence, Crime and Victims (Amendment) Bill
(12 years, 2 months ago)
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Health and Social Care Bill
(12 years, 2 months ago)
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17:24 - Division on Amendment 76 - Ayes: 185 / Noes: 282 - Amendment 76 disagreed.
“( ) For the purposes of this section a failure to discharge a function properly includes a failure to discharge it consistently with what the Secretary of State considers to be the interests of the health service.”
Lord Marks of Henley-on-Thames
My Lords, all the amendments in this group have a single theme, although Amendments 294 and 295, to which I shall turn later, are in a slightly different category from the rest, and except for those two amendments all these amendments are supported by my noble friend the Minister. These amendments are intended to put in place a robust failure regime to permit the Secretary of State, or the board where it is the intervening body, to intervene in the operations of bodies within the NHS in the event of a significant failure by such bodies properly to exercise their functions. The purpose of the amendments is to ensure that it is for the Secretary of State to decide whether a body is failing or has failed to discharge its functions in a way that he considers is consistent with the interests of the health service. If he so decides, his intervention powers will be triggered and an intervention will be justified.
However, there is a proviso. The failure must be significant so that the Secretary of State cannot intervene in the case of an insignificant failure, but in practice he will be the judge of significance. Although strictly speaking his view of the significance of a failure could be challenged, in my view such a challenge would be hard to maintain in normal circumstances. I would add that in cases in which it is for the board to intervene in the functions of a clinical commissioning group, it is correspondingly the view of the board that will count.
Without wishing to go into detail about these amendments, perhaps I may canter quickly through the intervention powers with which they are concerned. Amendment 71 is the Secretary of State’s power under new Section 13Z1 of the 2006 Act to intervene in the event of failure by the board. The Secretary of State may then step in to give a direction to the board as to the discharge of its functions, and if the board fails to comply with such a direction he may step in and exercise them himself or delegate them to another. Amendment 113 is concerned with the power of the board to require information and documents from clinical commissioning groups or to require an explanation from clinical commissioning groups under new Sections 14Z15 and 14Z16 in the event of failure by those groups to discharge their functions. Amendment 114 concerns the board’s very wide powers of intervention to give directions to clinical commissioning groups, to change their accountable officer, to vary their constitution, to dissolve a group or to take over its functions if a direction is not complied with.
Amendment 176 concerns the Secretary of State’s power under Clause 69 to intervene by giving directions to perform functions or to perform them in a specified manner in the event of a failure by Monitor. Amendment 258 concerns the Secretary of State’s power under Clause 244 to intervene by giving similar directions in the event of failure by NICE. Amendment 291 concerns his power under Clause 268 to intervene by giving similar directions in the event of failure by the Information Centre, and Amendment 296 concerns his power, amended by Clause 290, to intervene by giving directions in the event of failure by the Care Quality Commission under Section 82 of the Health and Social Care Act 2008.
When debating and then discussing the Secretary of State’s role and overarching duties under Clause 1, coupled with his duty to promote autonomy under Clause 4, your Lordships will remember how quickly it became clear that the new structure brought with it a considerable difficulty. Gone will be the Secretary of State’s direct duty to provide. In its place, the provision of services will now be the responsibility of clinical commissioning groups under Clause 12. It follows that the new substitute duty on the Secretary of State could be a duty to exercise his functions only so as to ensure that services are provided in accordance with the Act.
To achieve that in a way that was consistent with the Secretary of State retaining ministerial responsibility effectively for the health service, it was essential to ensure that the functions accorded to him by the legislation were up to the task, and that really is the point of these amendments. It means that the Secretary of State has to be given effective powers to intervene. Such powers to intervene would not be effective if he could intervene only in the event of a body’s failure to discharge its functions altogether. A power to intervene in the event of a failure to discharge them “properly” would not be up to the task either if it was going to be open to the body concerned to argue that it was discharging its functions properly whatever the Secretary of State might think, even if he took a contrary view.
Such a body might then have been able to say to the Secretary of State, “You may disagree with the way we choose to exercise our functions, but we disagree and it is up to us”. The Secretary of State might in those circumstances have been left to return to Parliament with the lame and ineffectual excuse that there was nothing he could do because he could not show clearly that the body was not exercising its functions properly, whatever he thought of its conduct.
Lord Hunt of Kings Heath
My Lords, as this is a government-supported amendment, perhaps I may seek clarification from the noble Lord. In the past three months the Secretary of State has intervened in the health service any number of times: for example, on issues arising from primary care trusts massaging figures on waiting times and on the way in which A&E departments work. If an issue was raised in Parliament, would the Secretary of State be able to intervene without any question or worry about whether it meets the terms for failure set out in the amendment? It is important to clear that up.
Lord Marks of Henley-on-Thames
It is indeed important to clear that up, and the answer is yes. If the Secretary of State considers that the body with which he proposes to intervene is acting in a way that is not consistent with the interests of the health service, then, for the purpose of these amendments, it is not acting properly and the Secretary of State’s powers of intervention are triggered. That was the point of our amendment in Committee and it is the point of these amendments, which have now been accepted, as the noble Lord points out, by the Government. So the answer to his question is indeed yes.
A similar test applies in the case of the board’s powers to intervene in the conduct of clinical commissioning groups, where a parallel test is applied. It is, then, the board’s view of the interests of the health service that counts, just as, where it is for the Secretary of State to intervene, it is his view that counts.
As my answer to the noble Lord’s intervention makes clear, the amendment puts the Secretary of State right back in the driving seat. He has of course to have regard to autonomy, and a failure has to be sufficiently significant for him to take the view that an intervention is warranted, but, subject to those two points, if he takes that view, he may intervene in the ways prescribed by the Bill, and his ministerial responsibility and his answerability to Parliament are assured.
I am grateful to my noble friend the Minister for his support and to those in his department who have helped with these amendments. I am grateful also to all those who spoke in Committee on the intervention and failure regime and who took part in the quite involved discussions about it that we had privately. By going carefully through the Bill to pick up all the relevant powers of intervention, and by then applying a consistent trigger within the control of the Secretary of State, we have developed a coherent and effective way of ensuring that the failure regime is workable.
Amendments 294 and 295, in my name and the names of my noble friends Lady Tyler and Lady Barker and the noble Baroness, Lady Murphy, are designed to rectify a small but not insignificant failure in the arrangements in the Bill as it stands. Clause 287 deals with the consequences of a failure to co-operate, a duty imposed by the Bill on Monitor, the Care Quality Commission, the board, NICE, the NHS Information Centre and strategic health authorities. If the Secretary of State is of the opinion that there is a breach, or the risk of a breach, of one of the specified duties to co-operate, he may under the Bill as it stands give a notice setting out the opinion that it is in breach to each relevant body, and he must publish the notice. If the breach continues and it is detrimental to the performance of the health service, he may then prohibit each body from exercising specified functions until the other body with which it is not co-operating agrees in writing what the first body may do. The Secretary of State’s prohibition may last for a year in the first instance but can be extended year on year. In default of agreement by the bodies concerned there is a long-stop power to go to arbitration.
Quite apart from the utter complexity of these provisions, there is an Alice in Wonderland feel of unreality about them. With all this activity, there is a serious danger that nothing will get done. The power of the Secretary of State arises only in the event that there is a breach of duty to co-operate—and then it is only a power to stop anything being done. The first problem is that the parties can, honestly and in good faith, co-operate with each other so that there is no breach of the duty, but nevertheless fail to reach agreement so that a conflict persists. The trigger for intervention should not be a mere breach of a duty to co-operate but the existence of an actual or potential conflict. That is the point of Amendment 294.
The second problem is that the power should not be simply a power to stop all action but should instead be a power to act in such a way as to resolve the conflict. In respect of the intervention powers that we have already considered with the other amendments in this group, the power has generally been to direct that the body concerned exercises functions or exercises them in a specified manner. Why is that not an appropriate power here? I suggest that it is and that Amendment 295 would give the Secretary of State a power to give such a direction, thus effectively resolving any conflict.
The power in our amendment is an additional power. If a stop order of the kind proposed in the clause at present is considered likely to be effective in resolving a failure to co-operate or an outright conflict, then let that power be exercised. However, there must be some power accorded to the Secretary of State to step in and resolve a stalemate. That power is not currently in the clause and there is a risk that not only the bodies concerned but the health service, patients and the standing of the Secretary of State may suffer in consequence. I beg to move.
Baroness Murphy
My Lords, I will very briefly say that I added my name to two of these amendments because I have, in practice, come across occasions when organisations such as the former Monitor and CQC had difficulties in their relationships, which had to be sorted out with some difficulty. It seems that they could be in the very position that the noble Lord, Lord Marks of Henley-on-Thames, has described so eloquently, and that we need some way of resolving these conflicts to the benefit of patients so that decisions are made quickly. I support these amendments.
Lord Hunt of Kings Heath
My Lords, this is an important debate. I want the noble Earl, Lord Howe, to make it absolutely clear in relation to Amendment 71 that the intervention of the Secretary of State will follow if the Secretary of State considers it to be in the interests of the health service when one of these bodies is failing to discharge a function properly. The wording of this amendment means, in effect, that if issues are raised in Parliament about NHS performance on which the Secretary of State, quite naturally and properly, wished to intervene, the Secretary of State can indeed do that. In the end, only the Secretary of State can, in those circumstances, consider what is in the interests of the health service. It is absolutely right and proper for the Secretary of State to be in that position.
The second set of amendments starts with Amendment 294. The noble Baroness, Lady Murphy, is absolutely right to point out the problem of conflict between the CQC and Monitor, which is almost built in intentionally. The second report of the Francis inquiry into the Mid-Staffordshire trust may have some points to make about that. However, we are also adding to the architecture of the national Commissioning Board, and there is inevitably going to be tension between those three bodies. For instance, the national Commissioning Board and Monitor are to be given roles relating to the tariff, and it is clear that there is confusion over the roles in respect of quality issues. Monitor is now involved in making some inquiries of foundation trusts relating to quality, which is no doubt a defensive reaction to the criticism that will flow from the Francis inquiry. The national Commissioning Board is so powerful in the new structure that there are bound to be some issues about its relationship with the quality and economic regulators. We would like to hear from the noble Earl, Lord Howe, that the Secretary of State will not hesitate to intervene and knock heads together if the natural—and probably useful—tension goes beyond that and becomes a problem.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, this group consists of amendments to the Secretary of State and the Commissioning Board’s powers of intervention over health bodies and to the Secretary of State’s powers in the case of breaches of duty to co-operate. First, I should like to discuss the amendments relating to the powers of intervention. In doing so, I thank my noble friend Lord Marks for tabling the amendments and presenting them to the House so ably. He committed a great deal of time and effort to developing these amendments and I believe that they will make this a better Bill.
As noble Lords will be aware, the amendments sit within the package of amendments relating to ministerial accountability that was agreed through a process of cross-party negotiation and consensus-building. They address concerns from several Peers that, in the words of my noble friend Lord Marks,
“the bar may be set too high against the Secretary of State’s intervention”.—[Official Report, 11/10/11; col. 1572.]
I hope they provide reassurance to the House that this will not be the case. I support the amendments and hope that other noble Lords will follow me in doing so.
In answer to the noble Lord, Lord Hunt, my noble friend’s amendments clarify that the Secretary of State can intervene where he considers that a national body is failing to discharge its functions consistently with what he considers to be the interests of the health service, provided that he considers that the failure is significant. They also clarify the same point for the Commissioning Board’s intervention powers over CCGs and, in addition, where a national body may have functions beyond the remit of the health service, these amendments clarify that the Secretary of State can intervene where the body significantly fails to exercise the function consistently with the purpose for which it was conferred. I hope that that explains fully the point of the amendments and answers the noble Lord’s question.
Lord Marks of Henley-on-Thames
My noble friend the Minister has certainly persuaded me not to press those amendments. I never had any intention that they should go to the vote. However, I still express some concern about the point made by the noble Lord, Lord Hunt, as to whether the stop power can actually involve the Secretary of State in having the power to knock heads together in the way that he describes. Of course, I entirely accept that the intervention powers under the other amendments go a great deal of the way to improving the position, but if he would like to give it further thought that would be very helpful.
Lord Hunt of Kings Heath
I thought that there was a question to the Minister as to whether he would consider the matter between now and Third Reading. Am I not right?
Lord Hunt of Kings Heath
Does that mean that the matter can be brought back at Third Reading? I think that is the point here.
“section 13LA,”
“( ) The Board must exercise its functions under this Chapter so as to ensure that every person resident in England has access to all services provided by a clinical commissioning group.”
Baroness Williams of Crosby
In replying to the last group of amendments the Minister referred to the fact that concern was expressed in many parts of the House about those issues. I am pleased to say that exactly the same is true of this group. Voices from the Cross Benches and from Labour as well as from the Conservative Party have been raised to address the need to ensure that CCGs always cover every resident individual so that we can ensure that the services of clinical commissioning groups are available to all the residents of the United Kingdom—or more precisely of England, although one could extend it to the United Kingdom.
One concern which has been expressed in the House on several occasions is whether, for example, people who are homeless or belong to Travelling groups, such as Gypsies or Didicois, would strictly be covered by the clinical commissioning groups given that there is not total coterminosity as there was in the old National Health Service. The purpose of Amendment 75, in particular, and the related Amendment 94 is specifically to ensure that nobody resident in the United Kingdom is simply left out of the new machinery. It is very important that this should be so as the people likely to be left out tend to be the most vulnerable members of society—the ones who slip through the cracks, if I can use that phrase. I am delighted to see that the noble Lord, Lord Laming, seems to share that view.
Lord Mawhinney
Can the noble Baroness tell us whether this amendment would also encompass illegal immigrants?
Baroness Williams of Crosby
The phrase used, which I think is also used in other parts of the Bill, is “resident in England”. It is not for me but for others, particularly the immigration tribunal, to judge whether somebody who is an immigrant to this country counts as a resident, but I would assume that if he was an illegal immigrant he would not be. If he or she were here except as an asylum seeker then clearly they would be covered by the amendment, which does not purport to set out a new set of immigration regulations. It would be inappropriate for the health service to do that. Therefore, let me turn back for a moment to Amendment 94 as well.
Lord Patel
Surely, my Lords, if they are illegal immigrants who happen to be sick or seriously ill we would treat them, would we not?
Baroness Williams of Crosby
Let us hope so. I simply wanted to suggest that there is nothing about the status of illegal immigrants in this amendment. Of course I share the view, which is accepted, that people who need treatment—and later we will discuss the amendment on HIV—should have access to emergency care, for example. That has always been true. However, this amendment relates precisely to clinical commissioning groups and therefore attempts to set their responsibility in terms of normal residency in the United Kingdom—not nationality, but residency. That seems appropriate.
Amendment 94 tries to do its very best to ensure that this is an absolutely total requirement. Together, Amendments 75 and 94 relate responsibilities not just to the clinical commissioning groups but, crucially, to the national Commissioning Board itself. Ultimately, it will be for the national Commissioning Board to ensure that anybody who is “resident in England” will be covered by all the services available to a clinical commissioning group. The crucial point of principle is that we are not talking here, as we might in some other countries, about emergency care only as a last resort. We are talking about all the services that clinical commissioning groups provide, and we are indicating that that should cover all residents of England. So this is an important group of amendments.
I will not move on to talk about some of the other amendments in this group, which concern themselves with the structure of governing bodies or CCGs. I am sure that the noble Lord, Lord Hunt, or the noble Baroness, Lady Thornton, will address those issues. In some ways they are slightly different; it is rather surprising that they are in the same group, because they address very different issues.
Because time is always shorter than we need for discussions on the Bill, I will not say a great deal more about this. I think that the whole House will agree that it is right and appropriate that there should be an ultimate duty on the board to ensure that every clinical commissioning group makes available the services that it provides to those who are members of it for everyone who is resident in the area, and that the board ensures that that happens across the whole of the nation. I beg to move.
Baroness Cumberlege
My Lords, my two amendments have also been grouped with this one. In our debate on 13 December, I explained why I felt so strongly that the evidence from patients gained by the work of local healthwatch and HealthWatch England should inform local commissioning. I have since had two very helpful meetings with my noble friends Lord Howe and Lady Northover about local healthwatch and its role. I think that we are moving in the right direction, although there seem to be some outstanding concerns.
Among my serious concerns, and the reason why I brought this amendment back, is that I feel we are not making commissioning robust enough. The process must be founded on evidence. Local healthwatch offers independent local evidence gathered through the unique statutory function of enter and view. This is evidence straight from the experience of patients lying in wards or sitting in mental health units, as well as those who can fill in surveys. Surveys are useful but do not necessarily reflect the views of the most vulnerable, people who may not be able to fill them in due to frailty, language difficulties or other reasons.
The amendment also relates to the experience from HealthWatch England. If the local healthwatch has not done work on a particular provider but those in other areas have, that intelligence will be available to a CCG commissioner who is considering giving the contract to a new provider. It has been pointed out to me that Clause 182(6) already requires CCGs to have regard to those reports and recommendations, and that is very valuable. However, this means only that if local healthwatch produces relevant reports and recommendations, the CCG will have to have regard to them.
It could be that those reports and recommendations arrive at the wrong point in the commissioning cycle or do not arrive at all. Then the CCG will not have an opportunity to have due regard to them. They will be commissioning from providers without evidence from patients of their actual experience, which can come only from local healthwatch, with its responsibilities to enter and view. The amendment was laid to ensure that that could not happen. It was redrafted in response to my noble friend Lady Northover’s characterisation in Committee that if local healthwatch had an obligation to feed in such evidence, it would be too burdensome for a small organisation composed of volunteers. I am now suggesting that the responsibility should be with the CCG to take evidence from local healthwatch. It would be helpful if my noble friend could give assurances that CCGs will be guided to seek out from their local healthwatch evidence of the patient experience to inform their commissioning to the standard set out in new Clause 14Q.
We know that local healthwatch will have a seat on health and well-being boards, and that will ensure that the knowledge that local healthwatch has will influence commissioning. Again, I welcome the membership of a lay member. This will have an input into the strategic role of those boards, but how can it give them a say in commissioning when the health and well-being board does not actually commission health services? The board’s function is to explore opportunities to integrate services, and this is not the same as deciding whether the outcome of a good patient experience with provider A is better than with provider B. These decisions rest with the CCG under Clauses 140 to 145.
Baroness Finlay of Llandaff
My Lords, I also have an amendment in this group. For the convenience of the House, I have left it there because it concerns the clinical commissioning group’s function. On 27 February, the Minister rejected the amendment that I had tabled, which provided that the Commissioning Board must ascertain that clinical commissioning groups commission for less common conditions and that they collaborate.
Today is Rare Disease Day and my amendment specifically addresses rare diseases. In responding to me on 27 February, the Minister cited sources of advice that are available to patients, healthcare professionals and carers, specifically NHS Choices and NHS Evidence. I have been to their websites to find out how they inform commissioning for some of these rarer diseases. They are very helpful websites and they are a resource, but they are enormously complex. Trying to read across from one condition to another to put together a cohesive package for commissioning is very difficult. I am concerned that replicating this in lots of small clinical commissioning groups all around the country will be, in effect, a duplication of effort.
For some of these conditions there is no NICE guidance at all as yet. NICE does a fantastic job by producing the guidance that it does but it is not there for everything. The European Union’s recommendation of an action in the field of rare diseases has been published. The Minister informed us that there will shortly be a consultation on the Government’s response to that.
What are these conditions? They range across 5,000 to 8,000 different diseases, which occur at an incidence of less than five cases per 10,000 of the population. However, most of these people suffer from diseases that are so rare that they affect less than one person in 100,000 of the population.
The European Union recommends that member states should have plans and strategies in this field and adequate definition, codification and inventories of these diseases and research into them. It also recommends that member states should establish centres of expertise with a European reference network, gather expertise and empower patient organisations. These objectives are compatible with the amendments in the name of the noble Baroness, Lady Cumberlege. The European guidance also states that these services should be sustainable. However, given that the prevalence of these diseases is so low, it would not be cost-effective routinely to commission services in populations of fewer than 250,000.
These amendments are supported by more than 98 patient organisations, 70 of which are members of the Neurological Alliance. There is concern about the application of the appropriateness test to clinical commissioning groups. The biggest area in this context often relates to rehabilitation and aftercare and comprises people with severe anorexia and those who are rehabilitating after a severe head injury or major trauma or stroke and quadriplegia. An increasing number of survivors are coming back from our theatres of war who would previously have died of their injuries. They require complex rehabilitation. Sadly, there are already instances where some of these soldiers are not able to obtain the prosthetic support that they require and are having to raise funds themselves to obtain their prostheses, and some are going to the United States for this provision.
Some people may think that stroke is a common occurrence and therefore does not come into this category. However, some types of stroke are complex and occur infrequently in the population. Stroke comprises a very broad spectrum of diseases. Some of the rehabilitation and services required fall to local authorities to provide. There is concern about the extent to which the appropriateness test will be applied and where discretion will lie as regards these conditions. As I said, the clinical commissioning groups cover relatively small population areas and therefore it is not cost-effective for them to commission services for less common conditions. I am concerned that they will have no duty to collaborate with other clinical commissioning groups in commissioning services. One hopes that they will but there does not seem to be a requirement that they should. If commissioners lack adequate guidance on best practice in commissioning comprehensive and equitable services, they risk commissioning services which do not provide value for money and do not meet the needs of people with these less common conditions. The National Audit Office report on services for people with neurological conditions showed that there is a great need for improvement in service provision for this population, with significant variation in access to services and variation in quality in different areas. Even where there are localised examples of good practice, sometimes leadership is lacking on the outcomes analysis so these bodies are not able to disseminate their good practice for wider implementation.
The Bill certainly provides opportunities for collaboration between clinical commissioning groups, but not encouragement or incentives to do so, and these groups are left to determine when to co-operate. This amendment would provide an important indicator for clinical commissioning groups and would bridge the strategic gap between the commissioning that will be done centrally by the Commissioning Board and that which will be done at a local level. I give a very simple example of a neurology service involving someone with motor neurone disease who requires non-invasive ventilation. That service should be provided in patients’ homes or somewhere nearby. If it is not provided to a high standard, patients have a much higher chance of ending up as emergency admissions—in fact, this is almost inevitable—and the cost of that provision is three times that of providing adequate NIV services. It therefore becomes very cost-effective to ensure that there is appropriate commissioning for this group across the piece. The risk is that the disparity in service provision and outcomes will widen. I stress that the difficulty comes because these patients sit in the spectrum between what will be commissioned centrally by the Commissioning Board, what will fall to the clinical commissioning groups and, when patients get into long-term care and rehabilitation and being sustained at home, what will fall to the local authority—and that has not been made clear.
I will listen very carefully to the Minister’s response because this matter is so important that we may need to test the opinion of the House. I am hoping that I will get satisfactory answers from him and that these discrepancies will be clarified. If not, I ask him, if he is unable to provide adequate answers, to consider these issues at Third Reading.
Lord Newton of Braintree
My Lords, perhaps I may briefly intervene, although not in any way to differ from my noble friend Lady Williams of Crosby; I am much too diffident to dare to do that. In fact, I want to raise a few nitpicking points that occur to someone who has had a bit of ministerial experience over a fairly long period. They occur in relation to several of these amendments. First, it is far from clear, in light of the exchange with my noble friend Lord Mawhinney, just what “resident” means in this context. Someone needs to answer that clearly before we go down the path of the amendment. Secondly, on a related matter, does the proposal mean—whatever “resident” means—that people would be entitled to free NHS services, regardless of their status? Under existing law, a lot of people living in this country are liable to be charged for NHS services. That is not clear in some of these amendments.
In particular, it is not clear whether illegal immigrants are liable to be charged. I do not know the answer to that, and I probably ought to. If, however, they are liable, it is another factor to be taken into account when looking at what all this means. If we really mean that clinical commissioning groups must provide services—and I shall come back in a moment to the term “provide”, which also occurs in another of the amendments—to everyone resident in their area, how are the CCGs to establish that? Illegal immigrants, along with a number of other people, go to great lengths to stay beyond the radar. They will not be on the electoral register. They will not be registered with doctors. They will be trying to make sure that no one knows they are there. Do CCGs have to set up an immigrant police investigation team to find out who is resident in their area? These may sound like nitpicking points but they would be real issues if an amendment along these lines were passed, even though I am sympathetic to the aim. Parliamentary draftsmen would need to do some work.
What does “provided by” mean? Clinical commissioning groups will not provide many services; they are essentially commissioning groups. Do we mean “any services commissioned by” commissioning groups, many of which will involve secondary services—certainly—tertiary hospitals, and a whole range of other people? The amendment and several others in the group, however worthy their purpose, require a lot of careful drafting before we can accept them as amendments to an actual piece of legislation. My noble friend may care to comment on that.
Lastly, this rather curious group also includes the amendments of my noble friend Lady Cumberlege relating to HealthWatch England. I cannot see any problem with them. I support her entirely. It seems to be a no-brainer that if we are to set up a healthwatch system, people should have to take account of what their local healthwatches have to say.
The Earl of Sandwich
My Lords, before the noble Lord sits down, may I correct him on the question of illegal immigrants? There is no question of illegal immigrants having access to the health service. Certain vulnerable categories, such as mothers and children and so forth, are given access, but it is quite wrong to suggest that that is what is generally happening.
Lord Harris of Haringey
My Lords, the intervention we have just heard raises a particular point about the position of illegal immigrants. There is a problem here. The number of people who are not here legally varies in different areas. There are concentrations in particular areas where the impact on local health services will be disproportionately high. A simple assumption that this could be lost in the wash does not work. That issue needs to be addressed.
This is a pot-pourri of amendments. Amendment 75 raises an extremely important point, which I hope that we can include in the Bill in some form. The very important Amendment 96, in the name of the noble Baroness, Lady Finlay, raises a completely different set of points.
I want to pick up on Amendments 95 and 111 in the name of the noble Baroness, Lady Cumberlege, and, in particular, the points she made about why she introduced the amendments in this form on the basis of conversations that she had with the government Front Bench and, in particular, the noble Baroness, Lady Northover. She had been led to believe that this would be too burdensome a task for local healthwatch organisations and that they would be too small to carry out the functions that she talked about.
Baroness Cumberlege
That was not in a private conversation; it came out in Committee and was open to everyone who attended that sitting.
Lord Harris of Haringey
That does not alter the point I was about to make, which is that, on the basis of those remarks, it is important to recognise in the Bill that that is the expectation on local healthwatch organisations. That reflects the growing concern of people outside that, despite the Government’s best intentions for how healthwatch will be organised, those organisations will not be anything like as effective as your Lordships would hope. We hear, for example, that there is widespread concern that the Government will remove the statutory nature of local healthwatch organisations—we will no doubt come to that in due course. We are told that the Government are indifferent to the consequence of not ring-fencing their finances. The concerns expressed by the noble Baroness, Lady Northover, in Committee, that those organisations may be too small and unable to cope with some of these loads are real. Therefore, it is all the more important not only that we provide a framework which enables healthwatch organisations to be effective but that we make clear in the rest of the legislation the importance of giving a clear statutory role to healthwatch organisations—in particular, in the vital role of commissioning local services.
Lord Walton of Detchant
My Lords, this is a disparate group of amendments. I shall speak in particular to Amendment 96, which has been so ably proposed by my noble friend Lady Finlay. I do not propose to redeploy the arguments that I expressed when a similar amendment was discussed recently. One thing that is beginning to emerge as the Bill continues its progress through your Lordships’ House is that the size and, perhaps, quality of the clinical commissioning groups will be extraordinarily variable. Some will be large and contain a large number of GPs, and so on; therefore, with the secondary care individuals who will become members of the group, and others, some will deploy a wide range of expertise.
However, it is perfectly clear that in some parts of the country the clinical commissioning groups are going to be very much smaller. The range of issues in highly specialised services will be very limited and the smaller clinical commissioning groups will lack the knowledge and expertise to handle those areas well. For that reason, it is crucial that the national Commissioning Board should have the major responsibility for commissioning highly specialised services, in which I include not only the neurological services, about which I spoke in some detail last week, but cardiological services, cardiothoracic services and many other specialties.
On Rare Disease Day, the point that my noble friend Lady Finlay made about rare diseases is very important. There are thousands of rare diseases affecting a very small number of patients throughout the UK. The Rare Disease UK consortium, chaired by Dr Alastair Kent, the former chairman of the Genetic Interest Group, is deeply concerned, as is the Neurological Alliance, about the mechanism by which these diseases will be given attention in this legislation and proper understanding, control and attention by the national Commissioning Board. As my noble friend said, there are several thousand rare diseases, some affecting very small numbers and some larger numbers.
I spoke in detail last week about muscular dystrophy. As an example, last week I was asked by a former medical colleague in Newcastle to see, with him, a patient—not as a consultation but to look at the problem posed by a condition called haemolytic uraemic syndrome. This is due to a genetically determined disorder of the complement system. It is a disease that affects the kidneys, is steadily progressive and is ultimately fatal. However, recent research has identified and produced a licensed medicine which is effective and which in the patient whom I met, with her husband, has proved to be virtually life-saving. The problem is that there are only 200 patients in the UK with this disease and the cost of the medicine for that patient is £250,000 a year. At the moment, it is paid for by the drug company, which is carrying out trials.
That is one example but there is a huge number of genetically determined rare diseases for which new drugs are coming on stream. There are many cases where the causal, abnormal or missing gene product has been identified and where, slowly but surely, drugs which are beginning to have a beneficial effect on these progressive, disabling or ultimately fatal diseases are beginning to emerge. These are called orphan or ultra-orphan drugs. Whatever happens in the future with the National Health Service, the possibility—the probability—of having a special mechanism to deal with the needs of people with these rare diseases, as well as the needs relating to the orphan and ultra-orphan drugs, is going to be a massive problem. It is crucial that there is a very clear indication in the Bill that rare diseases deserve special consideration. For that reason, I warmly support Amendment 96, which has been proposed so ably by my noble friend Lady Finlay.
Lord Newton of Braintree
Perhaps the noble Lord could comment on one specific point. In my experience, the biggest problem in respect of these rare diseases is not providing the services—although that can be a problem—but the fact that they are not identified in the first place because no doctor has ever seen one before. Identification is at least as big a problem as treatment but that is not addressed in this amendment.
Baroness Murphy
My Lords, I quake to disagree with my noble friends Lord Walton and Lady Finlay about Amendment 96 but I do so as someone who has been the chief executive of a very large health commissioning organisation. It is utterly crucial that rare conditions are considered individually and that the level at which they are commissioned is decided by the national Commissioning Board coming together with the clinical senates and the clinicians involved in the area. They are best placed to decide on the best level of commissioning based on epidemiology and public health expertise. In fact, this amendment would achieve the very opposite of what the noble Baroness, Lady Finlay, wanted: to highlight some of these very important rare conditions which we do not want to forget. It is not helpful, however, to have rare conditions identified in this form in the Bill. We must leave it to the clinicians to make a judgment about how they are commissioned in groups. That will protect patients better, in my view, than any statutory guidance of this kind. I hope she will reconsider and not press this amendment.
Lord Harris of Haringey
The noble Baroness is not only disagreeing with the noble Baroness, Lady Finlay, and the noble Lord, Lord Walton, but disagreeing with all the organisations associated with these particular rare diseases. They think that the way forward is in the amendment of the noble Baroness, Lady Finlay.
Baroness Murphy
I will respond briefly to that. We all have tremendous sympathy with the fact that very many rare conditions are not currently commissioned to the standard that we would wish. It is also true, by the way, that many ordinary conditions are not commissioned to the standard of service across health and social care which we think would be best for the patients. That is undoubtedly true, but we would not necessarily fix that by having a special focus on the way we say where it is going to be commissioned. What we need are specialists in each of those rare conditions’ groups to be consulted, to ask patients and their relatives about how they should be commissioned, and some professional advice about the epidemiology of it.
Noble Lords should remember that the national Commissioning Board has the ability in this Bill to use, for example, the good offices of their local offices that will regionally be able to ensure that clinical commissioning groups can come together to commission properly for rare conditions. That is already happening around the country, and that is more likely to be a way forward than this particular statutory amendment. I am not saying that those rare conditions do not need some focus and better commissioning: they certainly do.
Lord Patel
My Lords, my name is on Amendment 96. I feel we might be running the risk of missing the important point in a rush to say whether this amendment should be tested. I would very much like the Minister to accept that there is an issue to be addressed here: it is on how the commissioning would be carried out for patients with less common conditions and rare diseases. The Bill is not clear, hence this debate and the amendments put forward by my noble friend Lady Finlay, previously in relation to commissioning boards and now in relation to commissioning groups.
This amendment alludes to the duties of the commissioning group,
“to ensure the provision of services for patients with less common conditions”.
Small commissioning groups may not be able to ensure the provision and may well have to co-operate with other commissioning groups. The direction may well actually have to come from the national Commissioning Board.
The noble Lord, Lord Walton of Detchant, referred to the funding issue. There has to be some pool funding from the national funding pool because the commissioning group may not be able to afford the large amount of money required for treating those people. I am familiar with that, because I was involved in setting up the process for handling it in Scotland. I ask the Minister to accept that there is a lacuna here of how commissioning for rare diseases would be done. He needs to reassure us that it will be robustly done, with clear leadership and responsibility. I hope that he will be able to do that.
The Earl of Listowel
My Lords, I support the amendment of my noble friend Lady Finlay of Llandaff. I noted what my noble friend Lady Murphy said. The Minister is aware that I have a long-standing concern about less-than-mainstream services for children and families, particularly in the mental health area. It became apparent several years ago when considering legislation around safeguarding children that there was a great shortage of appropriate interventions for children who sexually harmed other children. The approach was very piecemeal across the country. I became aware of a service working in London with these children. A team with a psychiatrist, a couple of clinical psychologists and a couple of social workers helped children who sexually harmed other children. Its interventions prevented those children going on to become adults who sexually harmed children. A large proportion of children who are sexually harmed are harmed by other children.
This is a very important service, and what I have heard again and again over the years was how the service had struggled to find funding. It appealed to its primary care trust, which simply did not recognise the importance and value of what it did. My concern is that, in a climate where there is such a shortage of resources, the national Commissioning Board may be too far away from these very small services in local areas. Therefore, it is important to do all that can be done to ensure that clinical commissioning groups have the expertise to recognise the value of these niche services and do what they can to support them. I look forward to the Minister's response and hope that he will comfort me.
Baroness Tyler of Enfield
My Lords, I rise briefly to support Amendments 75 and 94, tabled and spoken to so clearly by my noble friend Lady Williams of Crosby, which are very important. The nub of the amendments is that they are designed to address the problem that we know still exists of a limited number of people who are not on GPs’ lists and who, as has been said, fall through the cracks and often—inappropriately—turn up in accident and emergency units. I can verify this because on a recent weekend I spent 12 hours in accident and emergency with two of my relatives. During that time, time after time people came in with needs that were real but which it was not for A&E to meet. Problems with access lead to some of the inequalities in health outcomes about which we on all sides of the House are very concerned.
When considering the Bill recently, the Minister agreed to new duties to ensure that CCGs and the national Commissioning Board include in their annual report details of how they have met their health inequalities duties. I very much welcome these changes to the Bill, but I am not convinced that this reporting after the event is going to be sufficient to tackle some of these very deep-seated inequalities, which often lead directly from difficulties in access to NHS provision.
Will my noble friend the Minister consider giving some very real teeth to the absolute imperative, as I see it, of universal provision—an absolute founding principle of the NHS, which I know is supported across the House—and see whether these duties could be extended in some way so that CCGs and the board also need to include health inequalities and issues of access in their commissioning plans and in the board’s performance assessment of CCGs? I would be very grateful if the Minister could reflect on this in his concluding remarks.
Baroness Masham of Ilton
My Lords, I have added my name to Amendment 96. These patients can have very complex and varied needs. Will the Minister give an assurance that they will not fall through the net between the Commissioning Board and the CCGs? There will be a great need to have excellent communication between the Commissioning Board and the CCGs. There is concern, as has been shown here today—and if there is concern here, my goodness, what will be the problem outside when funds have to be found for these patients? I implore the Minister to sort this out.
Baroness Howarth of Breckland
My Lords, I wish to add my voice to the need for clarification, as raised by the noble Baroness, Lady Finlay, between the services provided by the national and regional boards for rare diseases and conditions. I declare an interest as a patron and trustee of an organisation that deals with children with hypoplastic left heart syndrome and some similar conditions of right heart defects.
As the Minister will know, a recent Safe and Sustainable review has been looking at how those services should be delivered. Obviously the complex surgical procedures need to be carried out in specialist hospitals, but the aftercare very often takes place locally. The Safe and Sustainable review having stalled during the discussion about this Bill, parents are extraordinarily concerned about how that will be taken forward. I say this as an example but it is true of all families who have children or adult relatives with rare conditions that they want to be absolutely assured that the right service is commissioned at the right level, and need to know how that assessment is going to be made. At the moment it is extraordinarily unclear and I think that is why the noble Baroness, Lady Finlay, has tabled her amendment and the other issues have been raised.
All I am seeking is that clarification, partly because I have got to go and tell the parents this weekend at their AGM.
Baroness Hollins
My Lords, I have been reflecting on the amendment tabled by my noble friend Lady Finlay. I declare an interest as one of my daughters has one of the conditions that she mentioned in her speech.
This lacuna must be addressed because the discretionary powers of clinical commissioning groups to apply the appropriateness test provide no assurance for those with these rare diseases. Today’s debate shows that it is essential that this is addressed in the Bill. I hope that the Minister will be able to suggest a way in which perhaps a government amendment might be able to address this lacuna.
Lord Hunt of Kings Heath
My Lords, this is a very interesting group of amendments. They do not entirely fit together but all of them raise important points.
I very much support the noble Baroness, Lady Cumberlege, in her comments about HealthWatch. This is my mea culpa moment about the demise of community health councils. It is clear that having a statutory body with the right to be heard and listened to is very important at local level. Of course, I would link the noble Baroness’s amendment with the desire for HealthWatch England to be wholly independent of CQC, which is another important ingredient in ensuring that the patient voice is heard as effectively as possible.
We support Amendment 96. There has been a persuasive argument about the need to ensure that services for patients with less common conditions are commissioned effectively. We debated these issues on Monday. We know that primary care trusts have often found it difficult to give proper attention to these services. With clinical commissioning groups, this will become even more problematic. I hope that the noble Baroness will be able to pursue that.
I entirely support the noble Baroness, Lady Williams, on Amendment 75. This is a very important statement of principle. I understand the points made by the noble Lords, Lord Mawhinney and Lord Newton. I am sure that this matter will be put to the vote. The whole point about Third Reading is that it can be used for parliamentary counsel to tidy up the wording of such amendments. I do not think that we should let minor technical difficulties get in the way of passing an amendment which has a very important principle. It may be that the noble Earl, Lord Howe, will agree to it. Let us hope so.
My amendments relate to the corporate governance of clinical commissioning groups. On Monday, I developed my arguments when we discussed conflict of interest issues. I do not want to go over the same ground again, save to say that clinical commissioning groups will have a crucial role to play in the new system. They are to be handed billions of pounds by the NHS Commissioning Board to commission services. Essentially, a clinical commissioning group is not an NHS board as we know it. It is a group of small business people—GPs—who will be able to benefit financially from the decisions of that board. I cannot conceive that the Government could be going down this route if they did not want more resource spent in primary care. That must be one of the end results of the Bill. The Government want to spend more money in primary care and to reduce expenditure in acute hospital services, which is a very fair aim. But that means that the board of clinical commissioning groups will be spending public money and placing it in the hands of GPs who also sit round the board of the clinical commissioning group.
The conflict of interest amendment in the name of the noble Baroness, Lady Barker, which the noble Earl accepted, was very weak and does not provide the kind of assurance that we require. I have to say to him that there will be trouble in the future with clinical commissioning groups in this area. The proper safeguard would be for clinical commissioning groups to have a proper board. Proper boards in the public sector usually ensure that there are a majority of non-executives, people who are appointed independently, who can make sure that the public interest is protected. We have the extraordinary proposal that we are guaranteed only two non-executives on the board of clinical commissioning groups. We are not even guaranteed that one of them will be the chair of that clinical commissioning group. Looking over all the corporate governance difficulties in this country in the past 20 years, can noble Lords imagine that any of those inquiries would endorse the kind of governance arrangements that the Government are putting forward for clinical commissioning groups? I say to the noble Earl, Lord Howe, that I just wonder how long it will be before the first group of members is prosecuted for corruption. This is an open invitation for corrupt action. The Government show no signs of understanding or realising what difficulties they will put the whole service in by these proposals.
I have put forward a number of amendments to put in place proper corporate governance protection. I also believe that the constitution of clinical commissioning groups should be subject to approval by your Lordships’ House. In relation to primary care trusts, orders go through. I do not see why the same thing should not happen to clinical commissioning groups. I also endorse everything said by the noble Lord, Lord Patel, about quality payments. It is absolutely abominable that quality payments could be made to clinical commissioning groups where those payments end up in the pockets of individual GPs. That money ought to go into the commissioning of services. Again we see the conflict of interest. There is so much potential for conflict of interest between commissioning decisions in the public interest and commissioning decisions which are to the financial advantage of the members of the clinical commissioning group.
Finally, Amendment 118 would remove the quality premiums altogether. This is very much a probing amendment. I am content to support the noble Lord, Lord Patel, in his argument that, if quality payments are to be made, they should simply be put back into the commissioning pot.
Earl Howe
My Lords, if there is a common theme to these amendments, I suggest it might be the fear of falling through the cracks, and I hope I can demonstrate that there are no cracks to fall through. However, there is a lot to cover and I apologise in advance if I speak for longer than normal.
First, perhaps I may say how wholeheartedly I agree with my noble friend Lady Williams as to the crucial role that CCGs will play in meeting the health needs of their entire population. In preparation for today’s debate I reacquainted myself with the requirements in the Bill to ensure that this happens. The requirements are robust and I can confirm that CCGs must exercise their responsibilities so that services are commissioned to meet the reasonable requirements of all their patients. My noble friend Lady Williams can be absolutely assured that every person registered with a GP practice or usually resident in England—that is the term—will be the responsibility of a CCG and the board must ensure that the whole of England is covered. This means that Amendments 75 and 94 are unnecessary.
I was asked by my noble friend Lord Newton about charges for patients. Noble Lords need to understand that as regards issues of entitlement to access to the NHS, the Bill does not change the status quo. I listened with care to my noble friend Lady Tyler, and I would like to thank her for spotting the inconsistencies in the Commissioning Board and CCG duties. As she quite rightly says, the inequality duties, if the government amendments on the annual reports are agreed, would be in the unusual position of being specifically referred to in the annual report provisions but with no similar reference in the provisions on the annual plans of CCG performance assessments. I therefore undertake to bring forward amendments at Third Reading to rectify that.
Amendments 95, 108 and 111, which are similar in effect, would require CCGs to have regard to the advice of local healthwatch and HealthWatch England, or in the case of Amendment 111 would require local healthwatch’s involvement in developing or revising commissioning plans. HealthWatch England will not advise CCGs directly. Instead its advice will inform the board’s commissioning guidance for CCGs. Certainly at the local level, we would expect CCGs to be taking account of local healthwatch; and, to reassure my noble friend, under Clause 182 CCGs already have to have regard to the views made known by local healthwatch when exercising functions relating to healthcare services. As my noble friend said, local healthwatch will also have a key role to play via the health and wellbeing board in assessing local population need—preparing the joint strategy and influencing the commissioning plans of CCGs. Taken together, this represents a robust set of arrangements for the views of patients and the public to feed into local commissioning.
The noble Lord, Lord Hunt, painted a doomsday-like picture of what he sees as the consequences of the arrangements that we have set out in respect of CCG governance. The noble Lord suggests that by not having the more traditional arrangements, as per his amendments, the CCGs will be more likely to run into financial distress, not properly meet their statutory duties, commit fraud or even commission unsafe care. Simply put, I cannot agree with that gloomy outlook, because it overlooks completely the arrangements that are already in place and what would happen if a CCG was to face the risk of running into any of these difficulties.
Let us take financial management, which he focused on. A CCG must have an accountable officer who is responsible for ensuring that the CCG meets all its financial obligations. The appointment must be agreed with the NHS Commissioning Board. A CCG must keep and publish proper accounts, which must be audited in accordance with the Audit Commission Act 1998 and must be sent to the NHS Commissioning Board by a date specified by the board. If the board requests specific information relating to a CCG’s accounts, or to its income, expenditure or use of resources, the CCG must provide it. Each CCG must have a constitution that sets out the CCG’s arrangements for decision-making. Each CCG must have a governing body, which must meet in public, except when it feels that it is a confidential matter and so not in the public interest.
The governing body must have an audit committee chaired by a lay person who must have the skills, knowledge and experience to assess and confirm that the CCG has appropriate arrangements for all aspects of governance, including financial and risk management. The governing body must ensure that the CCG adheres to such generally accepted principles of good governance as the Nolan principles, which are foremost among these—indeed, the Commissioning Board Authority has been clear that it expects CCGs to adhere to them. Furthermore, if the CCG is at risk of failing, is failing or has failed to exercise its functions, including those in relation to financial management, the board can intervene with a range of powers, from directing remedial action to be taken, removing the accountable officer, to dissolution—although we would expect that to be very much a last resort.
I absolutely agree with the noble Lord that it is essential for CCGs to have strong governance—there is no difference between us on that. This is a topic on which we listened to the Future Forum and made a number of significant amendments last year. We remain open to suggestions that would improve the Bill in this regard, I hasten to say, but I cannot agree that the noble Lord has suggested the right mechanism to achieve that end. To agree to either of his Amendments 76 or 77 would not only fail to meet his stated objective of improving a CCG’s governance but would risk introducing additional bureaucracy and confusion with the wide range of existing ways that CCGs are held to a high standard of good governance.
Given the role of the board in scrutinising arrangements and ensuring that governing bodies are effective, I do not accept the need for an additional centralised process of independent appointments to governing bodies, as proposed by Amendment 76, or for asking both Houses of Parliament to approve each CCG constitution. It cannot be reasonable or proportionate to require both Houses of Parliament to scrutinise the constitutions of several hundred local bodies. The board can publish guidance on the form and content of constitutions, and take a view of local circumstances, which Parliament, with the greatest respect, could not do.
Amendment 77 would require a majority of non-GPs on the governing body. This overlooks some important points about CCGs: that they are rooted in general practice and build on the central relationship between GPs and patients. It is GPs who look at patients’ needs in the round, making sure that they have access to the services that will best meet their needs and keep them healthy. Our rationale for having governing bodies with non-GP membership was not to put GPs in the minority but to make sure that there are other voices and perspectives alongside those of GPs so that decisions are made in an open, accountable and transparent way. The NHS Future Forum supported that vision. Requiring non-GP members to outnumber the GP membership on a CCG’s governing body would not make that governing body any more effective in ensuring adherence to principles of good governance, or in ensuring that the CCG was effective, efficient and economical. As we discussed on Monday, there is extensive provision for managing conflicts of interest.
On the quality payment, the debate today, as in Committee, centred on two questions: what the quality premium should reward and what the premium should be spent on. The payment would incentivise and reward improvements in quality and outcomes and reductions in health inequalities. It is not there to encourage a focus on financial management, and it is not—to answer a question posed by the noble Lord, Lord Hunt, in Committee—a way to reward demand management.
Our intention is that the quality premium will reward performance against the commissioning outcomes framework. The starting point would be the five domains of the overall outcomes framework and could contain measures such as reductions in mortality rates for cardiovascular disease, cancer survival rates, the management of diabetes, stroke and mental health and reductions in the number of cases of healthcare-associated infections. Those are only a few examples. If CCGs commission services in such a way that they achieve excellent outcomes in areas such as those, it is only right that the NHS Commissioning Board should be able to reward them for doing so.
The noble Lord, Lord Patel, has put across a persuasive case that the payment should be restricted to being spent on improving services. I have given that proposal significant thought but on this occasion I am unable to agree with the noble Lord’s amendment. We all want to see quality and outcomes improving and inequalities falling, and we are aware of the scale of the challenge. I want the quality premium to be as an effective incentive as it can be in order to best drive those improvements.
Indeed, I was pleased to see last week that this view was shared by Age UK and the National Osteoporosis Society in their report on falls and fracture services, which called for a greater role for financial incentives in the commissioning and provision of services. The report said that,
“the introduction of a Quality Premium payment for commissioners in return for improving health and wellbeing outcomes among patients could reduce falls and fracture rates”.
That is a very good example.
There are any number of ways in which a CCG may wish to use such payments. It might wish to spend the money on a new service for patients; to reward provider organisations that have played a major part in helping achieve the improvements; and, yes, it might wish to reward GP practices that are members of the CCG if they have played an instrumental part in improving quality of services and outcomes—for instance, through their work on service redesign. It would be wrong in principle to rule out any one of those options in the Bill.
However, I hope to reassure the noble Lord on his central concern. I agree that great care needs to be taken in designing the mechanics of the payment. We will use secondary legislation to make detailed provisions as to how CCGs can use these payments, including the circumstances in which they may be able to distribute the whole or part of a payment to individual member practices. That is very important and provides flexibility to adapt any rules or principles governing payments in the light of experience.
We have started discussing the potential contents of these regulations with stakeholders and I can confirm that we will extend these discussions to include a broad spectrum of views, including the NHS, patient groups and professional bodies. I hope I have reassured noble Lords sufficiently to enable them to not press their amendments.
Amendment 96 relates to an area with myriad terms that have a slightly different meaning, and I shall set out the crucial differences. Very rare conditions, which often require highly specialised services, will be commissioned by the NHS Commissioning Board. Rare or less common conditions will by and large be commissioned by CCGs, but they will be supported in doing so by the board, clinical senates, networks and the ability of CCGs to work together to pool skills and expertise.
Baroness Finlay of Llandaff
Can the noble Lord clarify whether the guidance will also cover the commissioning of services that are currently going to fall within the responsibility of a local authority, at the interface between health and social care, for the long-term maintenance of patients with very severe disability?
I accept the Minister’s comments on this amendment and the onus on clinical commissioning groups, and those made by my noble friend Lady Murphy, that the commissioning board may be the central focal point, as was outlined in the amendment that was not accepted, Amendment 63A. However, my second question is whether the Minister would be prepared to meet me to see whether there is a need for a review of the wording to clarify completely that there are no gaps for these patients, who may be large in number but very disparate and heterogeneous, with a very broad range of views. In that event, perhaps we could return to the matter at the last point, at Third Reading.
There are two distinct questions there on which I would appreciate clarification.
Earl Howe
On the first question from the noble Baroness, we fully anticipate that NICE will provide quality standards and guidance on services commissioned by CCGs and local authorities jointly. Typically, those are the kinds of service that the noble Baroness has spoken of, some of them in relation to less common and more complex conditions. Therefore, the commissioning guidance would reflect the NICE advice, and I hope that I can reassure her on that point.
Of course, I am willing to meet the noble Baroness between now and Third Reading, although I am not necessarily giving her the green light to bring this amendment back at Third Reading. I have explained that the Bill adequately covers the points of concern. Furthermore, I think that the amendment is flawed. We can achieve what she seeks through provisions already in the Bill and those that are not in the Bill that I have described.
Baroness Williams of Crosby
In moving the amendment, I asked the Minister for an unqualified assurance that all people resident in England would be covered by a clinical commissioning group, and I have to say that I think he gave me that assurance. However, I simply ask that between now and Third Reading, if any Member of this House comes forward with evidence of the exclusion from clinical commissioning groups of anyone resident in England, the Minister will give that careful consideration. I am sure he will. He has won the trust of this House and I take the assurance on the basis of that trust, but if there is a dispute over whether there is any exclusion I hope he will permit me to suggest that his door might be as ever open if any Member of this House wants reassurance on the basis of evidence brought before him. I beg leave to withdraw the amendment.
Lord Hunt of Kings Heath
“( ) provide for the chair and non-executive members of each governing body to be appointed using an independent process, the details of which are to be laid out in regulations;”
Lord Hunt of Kings Heath
The Minister thought that I was projecting a doomsday view of corporate governance within clinical commissioning groups. It is not doomsday but a warning that if you give enormous power to professionals who can take advantage financially from their decisions, you need strong corporate governance safeguards. The best safeguard is to have independent appointment of non-execs, who should be in a majority on a board. That is such a well known process and a safeguard in all public bodies. I beg to test the opinion of the House.
Baroness Barker
“14NA Registers of interests and management of conflicts of interest
(1) Each clinical commissioning group must maintain one or more registers of the interests of—
(a) the members of the group,(b) the members of its governing body,(c) the members of its committees or sub-committees or of committees or sub-committees of its governing body, and(d) its employees.(2) Each clinical commissioning group must publish the registers maintained under subsection (1) or make arrangements to ensure that members of the public have access to the registers on request.
(3) Each clinical commissioning group must make arrangements to ensure—
(a) that a person mentioned in subsection (1) declares any conflict or potential conflict of interest that the person has in relation to a decision to be made in the exercise of the commissioning functions of the group,(b) that any such declaration is made as soon as practicable after the person becomes aware of the conflict or potential conflict and, in any event, within 28 days, and(c) that any such declaration is included in the registers maintained under subsection (1).(4) Each clinical commissioning group must make arrangements for managing conflicts and potential conflicts of interest in such a way as to ensure that they do not, and do not appear to, affect the integrity of the group’s decision-making processes.
(5) The Board must publish guidance for clinical commissioning groups on the discharge of their functions under this section.
(6) Each clinical commissioning group must have regard to guidance published under subsection (5).
(7) For the purposes of this section, the commissioning functions of a clinical commissioning group are the functions of the group in arranging for the provision of services as part of the health service.”
Baroness Barker
Baroness Barker
“( ) The constitution must specify the arrangements made by the clinical commissioning group for discharging its duties under section 14NA(1) to (4).”
“Seal and evidence(1) The application of a clinical commissioning group’s seal must be authenticated by the signature of any person who has been authorised (generally or specially) for that purpose.
(2) Any instrument which, if executed by an individual, would not need to be under seal may be executed on behalf of a clinical commissioning group by any person who has been authorised (generally or specially) for that purpose.
(3) A document purporting to be duly executed under a clinical commissioning group’s seal or to be signed on its behalf must be received in evidence and, unless the contrary is proven, taken to be so executed or signed.”
(a) the prevention or diagnosis of illness in the patients, or(b) their care or treatment.”
“14XA Duty as to promoting education and training
Each clinical commissioning group must, in exercising its functions, have regard to the need to promote education and training for the persons mentioned in section 1E(1) so as assist the Secretary of State in the discharge of the duty under that section.”
The Earl of Sandwich
“14YA Duty as to addiction to benzodiazepines, selective serotonin reuptake inhibitors and Z-drugs
(1) Each clinical commissioning group shall have a duty to provide services to those suffering from addiction to and withdrawal from benzodiazepines, selective serotonin reuptake inhibitors and Z-drugs.
(2) In fulfilling this duty, clinical commissioning groups must co-operate with and take account of the good practice of specialised agencies in this field.”
The Earl of Sandwich
My Lords, this is a non-political amendment. However, by the end of our discussion, it may become more political; it depends on what happens in this short debate.
I am very grateful for the support and encouragement I have received from my noble friends and noble Lords on all sides of the House in raising this issue now and on previous occasions; that is, prescribed drugs such as sleeping pills and antidepressants. I moved a similar amendment after midnight on 30 November. In that debate the noble Lord, Lord Alderdice, said:
“I hope my noble friend the Minister will be able to give some reassurance that this is regarded seriously as an iatrogenic disorder that the health service is in some cases responsible for bringing into play through absence of proper monitoring and, in some cases, errant prescribing”.—[Official Report, 30/11/11; col. 372.]
If the health service does carry responsibility for iatrogenic disorder—as I believe it does—surely this makes it imperative that it moves faster on the issue than it otherwise would, even during a recession. The Minister did not respond to that point on that occasion. I would be grateful if he could acknowledge it today, if he can.
It may be helpful to remind the House that the singer, Whitney Houston, may have been under the influence of Xanax, which is a popular benzodiazepine, when she died. Without it, she may have survived. She had also taken Ativan and valium—drugs which I am sure are familiar to all noble Lords. Amy Winehouse took Librium. I mention them as two prominent recent examples of what is happening. Many thousands of people—not drug addicts but ordinary, mainly young, people living ordinary lives—are suffering from a diet of benzodiazepines, selective serotonin reuptake inhibitors called SSRIs, and z-drugs that all may initially have been prescribed for very good reasons and for a limited period of between two and four weeks as standard, but now blight their lives to the point of dark despair.
The Centers for Disease Control and Prevention in the US reported 37,485 deaths from prescribed medication in one year, 2009. It is recognised as a leading cause of death, in front of deaths from road traffic accidents, from firearms and from all illegal drugs put together. This information came only in the past few days, and we now hear from the British Medical Journal that sleeping pills, even taken lightly, can treble the risk of an early death.
Baroness Masham of Ilton
My Lords, I support my noble friend's amendment. Only yesterday, there were headlines in the press about the American study in the BMJ Open which found that sleeping pills were linked to increased death risks. It was found that death risk among users was about four times higher than among non-users. UK guidelines for NHS staff state that hypnotic drugs should be used for only short periods of time, because of tolerance to the drug and the risk of dependency, but they make no mention of an associated death risk, despite other studies having already reported that potential risk.
Many of your Lordships will know that doctors often do not review their patients’ drugs enough. Patients can have repeat prescriptions for years, putting them at great risk. Addiction to prescribed and over-the-counter drugs is an enormous problem. Groups which give support to the unfortunate people who become addicted themselves need support. Will CCGs be able to do that? Does the Minister think that that serious problem will get worse? My noble friend’s amendment is an effort to make that worrying situation better. I hope that the Minister will accept the amendment.
Lord Williamson of Horton
My Lords, the amendment deals with the distressing and serious problem of addiction to certain prescription drugs and, as is specified in the text, the problem of withdrawal from those drugs, because when such efforts are made, on many occasions they unfortunately fail and result in other difficulties for the patient in question.
Without going into detail about what may happen to the amendment, I hope that the Minister will be able to confirm that there should be an appropriate priority for the services available to treat that distressing problem. I do not press the point more than that, but it would be useful if we could have that sort of assurance from the Dispatch Box. In particular, whether the Minister agrees with this or not, some of us believe that in the past the issue has been allowed to fall into the shadows. That is what has happened in practice. It has been neglected and people have suffered in consequence. Perhaps we are improving but we could improve more, and I hope that the Minister will give an encouraging reply about the appropriate priority that ought to be given to the problem.
Baroness Finlay of Llandaff
My Lords, this is a clear example of an iatrogenic condition, very often originating in primary care. When patients have presented with insomnia, instead of being taken through the more complex and time-consuming aspects of sleep hygiene and possibly talking therapies to discover the cause of their insomnia, a prescription has been given all too quickly and readily. If we are looking at responsibility falling back to clinicians in primary care, it seems inordinately sensible that the clinical commissioning group should consider its responsibility to provide support to patients who end up with an iatrogenic problem.
I can see that the Government may feel that this is a very specific amendment targeted at a very specific area, but the guidance that needs to go out to clinical commissioning groups on their responsibility for the behaviour of all those prescribing on their patch may well deal with some of the principles behind this amendment and ensure that the necessary services are provided to patients who, completely inadvertently, fall foul of taking the drugs that they were prescribed and as they were told to take them.
Baroness Hollins
My Lords, I pay tribute to the work of my noble friend Lord Sandwich, who has done so much to raise awareness of the often unmet needs of people whose addiction originated in a legal prescription. There is some progress in training doctors—for example, in undergraduate medical education with a new national curriculum on substance misuse. This guidance provides learning objectives on rational prescribing and iatrogenic addiction. The fact that such a curriculum is only just being introduced shows the need for the attention of clinical commissioning groups to be brought to this issue.
There seems to be a special responsibility on the National Health Service to provide better care for people affected by medical prescribing practice, and I hope that the Minister will be able to suggest how such a responsibility could be emphasised in the Bill.
Baroness Thornton
My Lords, I intend to make only two remarks. We have a great deal to get through tonight, so I shall exercise great self-discipline. I think that I will come in at under a minute and a half.
The noble Earl needs to be commended for his determination and hard work in this area. We think that it is an important issue. This is a growing problem and the noble Earl makes very reasonable requests, for which he has widespread support. I agree with the noble Baroness, Lady Masham, in that I fear this problem may get worse before it gets better, but I hope that the Minister will have good news for us about it.
Earl Howe
My Lords, we return to an issue of enormous significance for the individuals and families affected. I refer of course to those suffering from addiction, or withdrawal from addiction, to certain prescribed drugs. I am grateful to the noble Earl, Lord Sandwich, for his amendment, which would put in primary legislation a requirement for clinical commissioning groups to provide a specific service and, in so doing, to co-operate with and take account of the good practice of specialised agencies.
I think that the desire for good practice and for improving practice is common ground between us. The noble Earl will know that local areas are currently responsible for the design and provision of treatment and support services. We think that that is right. Having said that, it is clear that we need to do all we can to prevent dependence occurring in the first place. I am fully with him on that. For those who do develop dependence, it is important that they have access to the services they need to help them to recover, rebuild their lives and contribute productively to society. By placing the funding and responsibility for commissioning services to support people to recover from dependence with the local authorities, the Bill will provide local areas with opportunities to improve integration of commissioning and provide more effective joined-up services to meet local needs.
The Earl of Sandwich
My Lords, as the noble Baroness, Lady Thornton, implied, we are moving to the fast-track of this Bill, and I do not want to hang around for too long. I thank my noble friend Lady Masham for bringing to our attention the issue of early death, and my noble friend Lord Williamson, who has a lot of experience, for his support. My noble friend Lady Finlay made the important point that the responsibility falls within primary care, and I am encouraged by what she said about guidance. However, the Minister did not even pick that up. One might have thought that he could have just said, “Yes, we are going to do something in the guidance”, but I do not know whether he actually heard the point.
Earl Howe
I am happy to pick that up, because it was a point that arose in connection with an intervention from the noble Baroness, Lady Finlay, in the previous group of amendments. Of course, we will be relying on the NHS Commissioning Board to issue guidance in a number of clinical areas. Again, when the noble Earl and I meet, I will update him to the extent that I am able to on the thinking in that regard. The point of such guidance—which will relate to numerous areas of care and services—is that it should inform joined-up commissioning in local services, so that we really do get a step change in the quality of commissioning in local areas.
The Earl of Sandwich
It is quite true that the CCGs are going to be overwhelmed with guidance from all directions, but I maintain that this is an important aspect.
I thank my noble friend Lady Hollins for the very important point that she made. I did not even talk about prescribing today but I hope to come back and talk about it later—the whole question of training and what young doctors are being told. “Rational prescribing” is a phrase that I will now be able to repeat.
I know that the Minister accepts the arguments, and of course there are many things that we have in common—good practice and the use of the voluntary sector. I take the point about the duty that falls on local authorities, but I still maintain that we have to separate this out from the mainstream of drug addiction and alcohol treatment. It is the kind of treatment that only the very careful, experienced volunteers can describe. I do not think that I can begin to describe the actual treatment. However, the NHS will soon get to grips with what is happening. I welcome the chance of having a meeting. I will of course come to talk, and I hear that there is to be a range of experts. I feel that the Minister has given a little bit of a Civil Service answer, because there are only but one or two people who follow this subject in the department. I do not mind talking only to two people—it will be a very good opportunity to take this further. Meanwhile, I beg leave perhaps to consider this again at a later stage of the Bill, and to withdraw the amendment.
“( ) For the purposes of this section—
(a) a failure to discharge a function includes a failure to discharge it properly, and(b) a failure to discharge a function properly includes a failure to discharge it consistently with what the Board considers to be the interests of the health service.”
“( ) For the purposes of this section—
(a) a failure to discharge a function includes a failure to discharge it properly, and(b) a failure to discharge a function properly includes a failure to discharge it consistently with what the Board considers to be the interests of the health service.”
“section 14XA,”
Baroness Northover
Baroness Northover
My Lords, in Committee we had a number of excellent debates about the role of local authorities in public health. A number of noble Lords raised concerns, and I hope that this debate will show that the Government listened very carefully. As a result, we propose to make a number of important changes.
I will begin with Amendments 120, 127 and 129, which are minor and technical amendments to Clauses 29, 30 and 31. These contain lists of local authority functions, including references to,
“functions by virtue of section 6C of the NHS Act 2006”.
The amendments change the reference to functions by virtue of Section 6C(1) and 6C(3). The reference to Section 6C(2) is unnecessary as it provides a power to impose requirements for how local authorities should exercise their functions, rather than a power to confer those functions. I look forward to an interesting debate on the other, more fundamental amendments in the group. I beg to move.
Lord Patel
My Lords, I will speak to Amendments 121, 122, 123, 125 and 126 in my name. I will also comment on the Government’s Amendment 124.
Amendment 121 covers the appointment of a public health specialist. It states:
“The individual so appointed must be a registered public health specialist who has a broad range of professional expertise in public health”.
When we debated this in Committee I made it clear that doctors—public health specialists who are trained in medicine—not only do medical training at undergraduate level but do several more years of training in public health before they are given a certificate of completion of training that allows them to be registered on a GMC register of public health specialists. The situation is similar for public health dentists; they go through similar training.
The problem is that non-medical public health specialists—of whom there are many—do not go through any specific training. Registration is voluntary. We will come to registration issues at a later date. The amendment states that those appointed must be registered public health specialists with a broad range of professional expertise in public health, which they must demonstrate at the time of appointment. I hope that the noble Baroness, Lady Northover, will comment on that.
The noble Baroness was absolutely right to say in her opening speech that the Government had listened. I am grateful to both the noble Earl and the noble Baroness for the time they took to meet me, and to meet representatives of the Faculty of Public Health. I declare an interest as an honorary fellow of that faculty. As a result, the Government have brought forward amendments and produced a document, which I will refer to at a later stage, that is very helpful in identifying the role of public health doctors in a local authority.
Amendment 125 is linked to this issue. It concerns the appointment of directors of public health. It states:
“Any registered public health specialist or other person who is employed in the exercise of public health functions by a local authority or is an executive agency of the Department of Health shall be employed on terms and conditions of service no less favourable than those of persons in equivalent employment in the National Health Service”.
If we are to appoint directors and consultants of public health in local authorities and attract high-calibre individuals, we will have to make sure that they are not disadvantaged by taking a job in a local authority. The amendment merely alludes to that. Currently all specialists in the NHS, be they physicians, surgeons, obstetricians, paediatricians or other specialists, are appointed by an advisory appointments committee. The constitution of that committee is statutorily determined. The committee includes a representative from the appropriate college faculty. In this case it would be the Faculty of Public Health.
Lord Brooke of Sutton Mandeville
My Lords, I shall speak to my Amendment 122A. The aim of this amendment is to probe the intended scope of local authorities’ public health obligations, with particular reference to areas that are primarily business in character. It does so by seeking to make clear that the directors of public health to be appointed by local authorities and the Secretary of State under this clause will have health responsibilities for those working in their authorities’ areas as well as for residents. It may come as no surprise to your Lordships that I have in mind the constituency which I represented in the other place for 24 years, and particularly the eastern portion of it comprising the City of London.
The Bill, through an amendment to the National Health Service Act 2006, envisages that county councils, unitary authorities in the rest of England and London local authorities will be given an additional function: improvement of the health of their communities. In the words of subsection (1) of new Section 2B of the 2006 Act, inserted by the Bill:
“Each local authority—
the authorities I have just referred to—
“must take such steps as it considers appropriate for improving the health of the people in its area”.
As to the discharge of that function, Clause 29 inserts a new Section 73A into the 2006 Act. That will require the local authorities in question, acting with the Secretary of State, to appoint a director of public health.
If I may paraphrase the statutory language for a moment to describe the practical consequences of these provisions, the director of public health will be responsible for securing improvement in the health of the people in the local authority’s area in accordance with the policies that are adopted by the local authority or otherwise apply there as the result of national health policies.
The scope of the function conferred on local authorities, and through them the responsibility on directors of public health, will of course depend on who is taken to be included in the description of “people in the local authority’s area”. I am taking the liberty of assuming that this may be taken to include the people who actually live there, but of course there are people other than residents there too. My amendment aims to recognise the fact that the resident population in an area of an authority may be matched or even dwarfed by a non-resident population.
As I have already indicated, the example I have in mind is the City of London, where, as your Lordships are aware, the resident population is very small in comparison with the daytime business population. An indicator of relativity is provided by the current parliamentary register of electors, which records around 6,500, against an estimated daytime business population of 360,000, according to the Office for National Statistics in September 2011. My erstwhile constituency mailbag bore witness to that army.
While my focus is on daytime business populations, I acknowledge that other areas may also experience wide variations in what might be described as their permanent residential populations and their temporary ones. The western portion of my former parliamentary constituency, the southern part of the City of Westminster, has a substantial business component but also many tourists and daytime visitors. At an election, if I spoke to someone at random in the street, I had a one in 15 chance of speaking to an actual elector of my own. Seaside resorts have large temporary populations in the summer. The tourist and daytime visitor populations are, of course, more transitory than daytime business populations made up of people who come during the day, week by week, to the same location, and are not simply transitory. Nevertheless, even visitor and tourist populations would seem likely to generate some public health issues, which may prompt similar questions of scope of the public health functions to the one I am raising here.
Lord Turnberg
My Lords, my name is attached to Amendments 121, 122 and 126. I will not repeat the wise and reasonable words of the noble Lord, Lord Patel, who presented the case for these amendments very well. As an honorary fellow of the faculty, I am privy to all its innumerable e-mails and newsletters which set out many of its concerns—and it has many, as I am sure the noble Baroness is aware. These amendments will go a little way to assuage some of those difficulties and they fit very well with the Government’s intentions.
The publication of the Department of Health’s document, Public Health in Local Government, on the role of the director of public health sets out well the intentions of the Government. They may not be strong enough but they are certainly entirely appropriate. Amendments 121 and 122 go some way to putting in the Bill the emphasis that the Government intend from their own document. I hope that the noble Baroness will see fit to accept these amendments.
Amendment 126 deals with the tricky business of disease outbreaks and the role of the director of public health. Again, the noble Lord, Lord Patel, emphasised with examples the sort of problems that can arise in a situation where responsibility for public health is with local authorities but is also with the health service. I am a former chairman of the Public Health Laboratory Service, which dealt with outbreaks of infections around the country and had a very strong co-ordinating role. For example, leaving aside the two examples mentioned by the noble Lord, Lord Patel, if you have an outbreak of food poisoning in two separate parts of the country, you do not know whether they are connected unless you are able to do the special tests—the special serology—that is done centrally and in a co-ordinated way between directors of public health.
What is unclear—Amendment 126 goes some way to help this—is that, in emphasising the need for the director of public health to work closely with Public Health England, the documents that have been produced are a little silent on the relationship that the directors of public health will have with Public Health England. That is a key interrelationship that has to be fostered. It should be much clearer. Perhaps this amendment does not do it far enough but at least it leads us in that direction.
Two other areas are not talked about in the document. There is a rather weak statement about the role of the local authority in ensuring continuing professional development and training and education. We have covered training and education in other amendments and the Government have been very helpful in that regard. Here we have a slightly different situation with the local authorities being responsible for the contracts for directors of public health and their staff. There is a role in education and training for them. How that will be achieved is not entirely clear; nor is it entirely clear how the local authorities will be encouraged to ensure that the directors of public health can undertake research, which is an important element.
The documents that the Government have produced make great play of words such as “innovation”, “leading the field” and “keeping ahead”. We cannot do that without research, so it is important that research comes in here somewhere. I hope that the Government will listen to this.
Baroness Finlay of Llandaff
My Lords, my name is attached to Amendments 121 and 126. I will not repeat the arguments that have already been laid out so clearly by my noble friend Lord Patel. However, as regards Amendment 126, in an emergency clear lines of communication are absolutely essential and must be worked out. Indeed, they must be tested before the event.
We do not need to think only about infections. We need to think about toxins, accidental or deliberate releases of all kinds of chemical substances, and all kinds of contamination that can be a threat to public health. When an emergency arises, the problem is that it is too late to work out those clear paths of communication and access to essential resources. Provision has to be made in national planning.
Baroness Jolly
My Lords, I support Amendments 124, 128 and 152, which are all on issues on which I spoke in Committee. They refer to guidance and I welcome the commitment of the Government to supply guidance to local authorities in these areas. Clearly, we have councils already setting up their shadow health and well-being boards. Local public health directors are already moving into place in the local authorities. In some cases, they are already there because they were a joint appointment with PCTs.
Given that Amendment 124 states:
“A local authority must have regard to any guidance given by the Secretary of State in relation to its director of public health”,
organisations which are setting up need to be clear about what is expected. Early guidance would be very welcome on the roles and responsibilities of the DPH in the new world. Is my noble friend able to give any indication when this guidance might be available?
Lord Walton of Detchant
My Lords, the case for supporting these amendments has been put very clearly by my noble friend Lord Patel and the noble Lord, Lord Turnberg. I do not wish to repeat those arguments but I should like to mention a point or two about history. My reasons for doing so I hope will become clear in a moment or two. When I was a young doctor, medical officers of health in major centres of population were very notable specialists in public health. Indeed, when I was a particularly young houseman, the medical officer of health in Newcastle upon Tyne was John Charles, who later became Sir John Charles and the Government’s Chief Medical Officer. He was succeeded in Newcastle by Professor WS Walton—I can assure noble Lords that he was no relation—who later became a very distinguished professor of public health in London.
As the years went by and the National Health Service matured, physicians in public health began to argue that they were actual physicians who, unlike physicians looking after groups of individual patients, were looking after communities. The situation developed until they were no longer directors of public health or medical officers of health. Instead they were transferred into the National Health Service as physicians in community medicine. They became individuals holding consultant appointments, and that was true of doctors and dentists working in community medicine. Eventually the faculty in the Royal College of Physicians grew into the Faculty of Community Medicine. Later it became clear that there were widespread public health functions which were not fully covered by that arrangement and therefore the title reverted to “public health”.
The questions I want particularly to ask relate to Amendment 125 about the:
“Appointment of directors of public health”.
This amendment seeks to ensure that public health specialists employed,
“by a local authority or in an executive agency of the Department of Health shall be employed on terms and conditions of service no less favourable than those of persons in equivalent employment in the National Health Service”.
First, could the Minister go a little further in confirming that medically and dentally qualified directors of public health who are transferred to work in local authorities will retain honorary consultant status in the National Health Service? It is crucial that they should have a formal arrangement whereby they have full access to all the NHS facilities necessary in relation to issues such as the control of epidemics and a whole range of other activities where access to those facilities will be needed.
My other question is one that I have raised before but to which I have not had a satisfactory answer. What is the position of young doctors and dentists who at present are training in the NHS as specialist registrars seeking to become qualified in public health? What is going to be their future? Where will they be employed and how will they continue to undertake a formal training programme if the directors of public health have been transferred into local authorities? This is an important issue that needs to be resolved. Finally, the regulation of non medically or dentally qualified specialists in public health is an issue that also has yet to be resolved.
Baroness Masham of Ilton
My Lords, in supporting these amendments, I want just to say that many demands are made on local authorities. If the Bill becomes law, they will have added responsibilities for public health. The control of infectious diseases is vital. We have increasing levels of drug resistance in conditions such as tuberculosis and sexually transmitted infections. We have the problems of alcohol and drug abuse. Food poisoning is always a risk. One never knows what new infection is around the corner—one has only to look at the recent very worrying virus in lambs. We need senior officers of public health because they are the important link between health and local authorities. They need to be in senior positions and to have a clear voice.
Lord Warner
My Lords, I have added my name to Amendment 125, and I had intended to add my name to Amendment 123, but somehow that did not work out. I speak in support of the excellent presentation by the noble Lord, Lord Patel. I am still concerned about whether we will end up in a situation where, in pay and in terms and conditions of service, public health staff at senior levels start to lag behind their counterparts in the NHS. It is a real risk and I am not completely convinced that the way the Government have gone about this is adequate to tackle it.
I also share the view expressed very well by the noble Lord, Lord Patel, that the Secretary of State should give his consent to the dismissal of any director of public health. These posts are exposed when the temperature rises in a particular area over a serious incident, so these directors deserve a bit more in the way of safeguards than are provided in the Government’s proposals.
I accept that the Government have moved on this, but I am a little concerned about how government Amendment 128 has been framed. I always get a bit wobbly when I see “may” used in guidance, and I wonder whether that could not be strengthened a little. I accept that Amendment 124 goes a long way towards giving an assurance that local authorities will be required to pay attention to the guidance but, as I read it, there is no guarantee that it will necessarily cover all the areas in the kind of detail that noble Lords have expressed their concerns about in this debate. A bit of strengthening of Amendment 128 would not go amiss unless the Minister can assure us that “may” really does mean that all these topics will be covered in the guidance.
Baroness Cumberlege
My Lords, I have added my name to Amendments 121 to 125, 128 and 152. Noble Lords will be grateful to learn that I am only going to speak to two of those amendments. I want to reinforce the views that are being expressed, and I too pay tribute to the noble Lord, Lord Patel, on the way he has introduced all these amendments in such a comprehensive fashion—but not the government amendments, of course—and other noble Lords who have spoken. I am interested in the situation of the status and accountability of directors of public health. They are going to be very important people. They have access to elected members and senior officers in a new way in terms of recent history. I shall go into that history a little later in my remarks.
Their responsibility is to consult and advise the members and senior officers directly on a range of issues from emergency preparedness to concerns around access to local health services and many other activities, some of which have been mentioned. Acting as the lead officer for health in a local authority and being the champion of health across the whole of an authority’s business is very responsible work, along with the day-to-day management of the ring-fenced public health budget, which is going to be delegated to them by the chief executive. They are also statutory members of the health and well-being boards. It is their direct accountability to the chief executive of the local authority and head of the paid Civil Service that I am concerned about.
This is a good measure to be putting forward. I have read the new Public Health England’s Operating Model published by the Department of Health, particularly the fact-sheet covering the role of the director of public health. It states that,
“we would expect there to be direct accountability between the Director of Public Health and the local authority Chief Executive for the exercise of the local authority’s public health responsibilities and that they will have direct access to elected members”.
So far, so good, but I am not sure that that is actually happening. On this occasion I should like to declare an interest, as I often do, as the executive director of Cumberlege Connections, which is a training organisation. Recently we have been working in an area with a shadow CCG. I had a lot of correspondence after the workshop we ran, particularly from the director of public health. He said:
“It is apparent to me that, especially with organisational development plans in … Council, as in other councils, it is intended to reduce the number of ‘senior’ directors at the top table … in many such instances the director of public health will not be a member of the most senior management team nor report to the chief executive, but report to another director. This is not necessarily the likely model everywhere”.
Here he mentions another authority, and says that,
“the City Council chief executive is currently proposing that the DPH report directly to him and should be part of the most senior management team. It thus seems likely that there will be different models in different local authorities”.
We of course accept that in terms of localism, but there should be some basic principles that all local authorities adhere to, which I believe is the Government’s intention. He goes on to say:
“It is also apparent that a number of medically qualified consultants and directors of public health consider that the likely change of status in becoming a local government officer and being made to leave the NHS … is not what they want”.
I can think of at least three directors of public health who have already quit their jobs to return to general practice, to take up a medical director post in the PCT cluster—that seems to be a rather short-term career move, but there we go—or to take very early retirement. The Government need to put out some very strong messages about this and we need a monitoring system to ensure that their intentions are being carried out.
A point has been made about the termination of employment of directors of public health. In Committee, we discussed quite fully the position that used to be the medical officer of health—it certainly existed in my council when I was a local councillor. They would be a person of huge character and have great clout within the council and the whole geographical area. One of the reasons for their being able to be so robust and to say how they really saw the health situation within a geographical area was that the only person who could terminate their employment was the Secretary of State for Health—in those days, he was called the Minister for Health. That was a very good safeguard. I know that the Government are keen to involve the Secretary of State, but I would like to know to what degree, and that it is not just consultation via e-mail or a piece of paper but something that is real and is going to make a difference.
Let us suppose that in an area where childhood obesity is presenting a real problem a fast-food company wants to build a restaurant in close proximity to a school. That could clearly conflict with the director of public health’s work to reduce childhood obesity. Local authorities, which will have some strong local interests, will be tempted to influence, with local councillors, situations that may go against the professional view of the director of public health. I hope that my noble friend Lady Northover will be able to give me some comfort on these issues.
Lord Rea
My Lords, I apologise to the noble Lord, Lord Patel, for not being here when he spoke to his amendment and for wanting to ask the Minister a question that may already have been covered in the debate. It is on the relationship of directors of public health, who are going to be situated in local authorities, with the clinical commissioning groups, which are going to cover very much the same area—although we still do not know exactly what it is going to be. At the moment, directors of public health work closely with primary care trusts. I imagine they will be largely the same people who move to local authorities.
However, many of the activities of PCTs concern directors of public health. I am not sure that we have yet agreed on whether the local authority director of public health will have a seat on the board of the clinical commissioning groups in the same area. We still do not know whether they are going to be precisely contiguous and/or whether there will be several CCGs in one authority boundary. I would be grateful if the Minister could clarify the relationship between local authority directors of public health and the local CCGs.
Lord Beecham
My Lords, two shows in the West End have taken the theatre-loving population of London by storm in the past year. One of them was “Noises Off”, a farce that might be thought of as an apt metaphor for some of the relations on the government Benches; the other was “One Man, Two Guvnors”, which is perhaps relevant to the position of directors of public health. I am very glad, therefore, that the amendments proposed by the noble Lord, Lord Patel, and some of those which the noble Baroness will propose, reinforce the position and status of directors of public health. It is crucial that they are independent and are employed on conditions that are comparable to those of fellow clinicians in other parts of the health service. Therefore, the Opposition support the amendments of the noble Lord, Lord Patel, particularly in relation to Clause 30 and disease control.
I perhaps have reservations about the requirement for the Secretary of State to consent to the dismissal of a director; it is right that it should be in the form of consultation. It would be a foolhardy authority that ignored the strong views expressed by the Secretary of State. Given the relationship between central and local government, it is right that it should be a question of consultation rather than consent.
I endorse the views of the noble Lord, Lord Turnberg, about the relationship with Public Health England, which is another example of that dual relationship which directors must have. I equally endorse the observations of the noble Lord, Lord Brooke, who seeks to ensure that the responsibilities cover the entire population, resident or working, of the appropriate area.
The Government have moved significantly on some of their amendments. We are on the right track. I hope that they will look sympathetically at the amendments of the noble Lord, Lord Patel, and strengthen further that crucially independent role of the director, who should certainly be a chief officer of an authority and be accountable to the chief executive. It is an important safeguard, which I commend to the Government.
Baroness Murphy
I strongly support the stance that the noble Lord, Lord Beecham, has taken on the amendments of the noble Lord, Lord Patel, but I was expecting him to speak to Amendment 163A. I am very disappointed that he has not because it is such a brilliant idea and I was hoping that the Government might listen to it.
Lord Beecham
I am grateful to the noble Baroness for reminding me that I wanted to say a word about that. I was anxious that we should make progress but perhaps a little overanxious. I shall not detain your Lordships' House long on this matter, but the financial side of the arrangements for public health is extremely problematic. At the moment, some £5.2 billion is allocated to public health expenditure out of some £92 billion of NHS expenditure as a whole, of which about £2 billion is directed towards local government. The allocation is based on the existing pattern of primary care trust expenditure, which bears little or no relation to any discernible logic or needs—we heard that at a meeting with the Minister just today.
In addition, there is the new concept of the health premium, which is supposed to be subject to consultation, which has not gone very far and which carries with it a distinct danger that resources will be allocated to areas that can demonstrate an improvement in rather easier circumstances than areas with, for example, a higher instance of poverty, unemployment or other factors that militate against an easy improvement. For example, Easington in the north-east would be a very different proposition from Eastbourne in the south.
The purpose of the amendment, which is a probing amendment, is to try to ensure that the system of developing health premiums should be based on principles that are outlined in the amendment and should be subject to adequate discussion before a new system is put in place.
Baroness Northover
My Lords, I thank the noble Lord, Lord Patel, and other noble Lords for their contributions. No doubt I shall do so again in a minute.
Lord Wolfson of Sunningdale
My Lords, the noble Lord, Lord Beecham, said that the wording used in Amendment 125 was that rewards and salaries should be “comparable”. In fact the actual wording is “no less favourable”. The two are entirely different: which wording is being proposed?
Lord Beecham
I shall go along with the amendment. I do not see a distinction of the kind to which the noble Lord refers.
Baroness Northover
I once again thank the noble Lord, Lord Patel, and other noble Lords for their extremely constructive engagement in this important area. I further thank the noble Lord, Lord Patel, for expressing his gratitude to the Government for the changes that have been brought forward.
Noble Lords have welcomed the moving of public health to a more centre stage. The Government have listened hard and have worked to address a number of the issues that have been raised about how this would work. We have brought forward a number of proposals, and I hope that noble Lords will be reassured that the objectives they seek can be achieved by these means.
We agree completely with the noble Lord, Lord Patel, about the need for high-quality, appropriately qualified public health staff, and it remains the case that appointments of directors of public health must be made jointly with the Secretary of State, who will be able to veto unsuitable candidates. To build on that, the Chief Medical Officer and the Local Government Association have written to local authorities on this issue and given advice covering the run-up to April 2013. This advice makes clear that external professional involvement in the recruitment process is the best way of assuring the necessary professional skills and that it should remain a central component of senior public health appointments.
My noble friend Lady Jolly raised questions about guidance, and she and other noble Lords may find the recent letter from the Department of Health and the Local Government Association reassuring. If they read through that letter they will see that on appointing to vacant posts it states:
“External professional assessment and advice provided by the Faculty of Public Health is a central component of senior public health appointments”.
It further states:
“The Faculty of Public Health provides essential advice on the draft job description, draft advert and person specification and we recommend you”—
local authorities—
“contact them at an early stage to benefit from this”.
There are a number of other points in the letter which I hope noble Lords will find reassuring.
Amendment 124 states that a local authority must have regard to any guidance given by the Secretary of State in relation to its director of public health, including guidance on appointment, termination of appointment and terms and conditions of management. The Local Government Association agrees that there should be a direct line of accountability between a director of public health and the chief executive. This issue was of extreme importance to noble Lords, who flagged it up in Committee, and we are taking it forward. It was also mentioned that the director should have access to elected members. We intend to produce guidance that reflects that, and it has already been spelt out in the letter to which I have referred.
In response to the concerns raised here, the Government have announced their intention to require non-medical public health specialists to be subject to regulation by the Health Professions Council. We will discuss the implementation timetable with interested parties and expect that the necessary changes will be made under the powers in Section 60 of the Health Act 1999.
During the helpful debates in Committee on the role of the director of public health we discussed how to ensure that directors have appropriately senior status. This is a vital new role—it provides local leadership on health improvement and protection as well as advising the local NHS on public health—and, in reaction to concerns raised, we have brought forward Amendment 152 to add directors of public health to the list of statutory chief officers in the Local Government and Housing Act 1989. This, combined with statutory guidance, aligns them with other chief officers, including directors of adult social services and children services. We hope that that reassures noble Lords and is what they were seeking. Furthermore, Amendment 128 is intended to give the Secretary of State the power to issue guidance on other local authority public health staff. I hope that that will further reassure my noble friend Lady Cumberlege.
The issue of appointment panels was raised and I can confirm that Public Health England, on behalf of the Secretary of State, will be represented on all appointment panels. Further guidance will be issued on the matter but, again, if noble Lords look at the letter to which I have referred I trust they will find it reassuring.
The noble Lord, Lord Patel, and others raised the issue of the requirements for dismissing a director of public health, and I welcome what the noble Lord, Lord Beecham, said about the need for the right balance of responsibilities. Directors will, of course, have the protection of employment law, and local authorities must consult the Secretary of State before dismissal. This will encourage them to ensure that their case is solid and to deter impulsive action. The Secretary of State will now also be able to issue guidance, to which local authorities must have regard, on how the dismissal process works.
Ultimately, of course, it cannot be in anyone’s interest for the local authority to be required to continue employing an individual if it believes that it has good grounds for dismissal. The Secretary of State can express his views clearly and robustly, but it is the authority that has the employment relationship with the director and that therefore must make the final decision. However, having regard to what the Secretary of State has to say is obviously an extremely important safeguard. The local authority will need to have very strong evidence to demonstrate why they wish to dismiss a director if they are to carry through their duty properly.
I was asked an important point about an external person on the appointments panel and I have referred to the involvement of the Faculty of Public Health generally. We are actively pursuing the idea of an external person and obviously we will be extremely happy to continue to work with the faculty over this and other issues.
The noble Lord, Lord Patel, and other noble Lords raised the issue of emergency planning and whether there would be an improvement on what exists now. Certainly, in our view, the new arrangements will be a significant improvement on the current ones. For example, in a new pandemic, joint plans will be in place between Public Health England and the NHS Commissioning Board for the important testing and data-gathering that is essential to understand the nature of a new disease in the early stages. The noble Baroness, Lady Finlay, is absolutely right that lines of communication need to be extremely clear and that working out exactly how this is to be done is extremely important. The department is well aware of that and the matter is being taken forward.
The NHS, Public Health England and local authorities will have joint plans in place to establish anti-viral collection points, for example, if needed. Public Health England, as an executive agency, will be able to provide scientific and technical advice and the NHS will have clearly understood mobilisation plans to respond to additional pressures on hospitals and primary care services. Throughout an emergency, the Chief Medical Officer, with Public Health England, will provide the Secretary of State with consolidated scientific advice to inform response and resolution. I trust noble Lords will be reassured by that.
Lord Patel
I am not actually that reassured. The point I was trying to make is that the current arrangements, as specified in the document so far, are flawed. They do not identify a lead person with the local authority who will respond to Public Health England’s advice and who also has plans in place not just for a pandemic or national emergency but for a local emergency. I gave two examples. The main problem is the lack of a lead person in charge locally. It might not be solved today but I hope the noble Baroness accepts that there is an issue here.
Baroness Northover
The director of public health has responsibility for what happens locally. One of the important issues here is the nature of the epidemic. The response to deal with that will be determined at the appropriate level—that is the key element in this. However, if the noble Lord and the Faculty of Public Health would like to engage further in discussions on this, I am extremely happy to offer that, knowing full well that my noble friend the Minister always has his door open. We look forward to further discussions to make sure that, where we feel it is working well but noble Lords need reassurance, we can address their concerns.
The noble Lord, Lord Walton, brought me back to my history of medicine when he spoke about the history of public health. He emphasised the importance of training and the noble Lord, Lord Turnberg, emphasised education, training and research. I assure noble Lords that all training contracts will be honoured. We are exploring at the moment how public health trainee contracts will be managed in future and are engaging with those who are concerned in these areas. We will set up a stakeholder group of professional bodies, Department of Health policy groups, deaneries, employers and trade unions to develop a framework for supporting public health trainees. I trust that will reassure noble Lords.
I completely agree with the noble Lord that the question of whether directors of public health will hold honorary NHS consultant status is very important and one that we are well aware of. We will shortly publish for consultation a public health workforce strategy to inform decisions on matters such as this.
The noble Lord, Lord Turnberg, asked how directors of public health and Public Health England would work together. Public Health England will have local units to encourage collaboration that will be partners in local planning for public health and will help to join up the system. Public Health England will directly support the public health directors with evidence, guidance and best practice.
I have addressed the senior status of public health directors and the manner of appointments, potential dismissals and emergencies. The noble Lord, Lord Beecham, includes the health premium in his amendment. I realise that he wanted to be extremely brief, so I will be extremely brief in reply and emphasise to him that we intend this premium to support the narrowing of health inequalities. I know—or at least assume—that his amendment is to probe and to find out how we view this. There will be a number of indicators to try to narrow those health inequalities.
We do not want to see anyone disadvantaged by our proposals for conditions of service, and employment law will apply to staff who transfer. Last November, in partnership with employers and unions, we published best practice guidance for staff transfers, followed by further guidance agreed with the Local Government Association. Shortly, we will publish a wider workforce strategy for consultation.
Lord Patel
I thank the noble Baroness, Lady Northover, and the noble Earl the Minister, not only for today but for having met me and the faculty in the past. We have come a long way from where we started with public health issues and our long debates in Committee. I think the Government have acknowledged and responded to the need, and I thank them for it. Only two minor issues are left now. She has already alluded to one, about the statutory registration of public health specialists, which it also looks as though we will solve. That leaves one other issue, which we will come to later, about Public Health England, on which I hope the Government’s response will be as positive.
“( ) A local authority must have regard to any guidance given by the Secretary of State in relation to its director of public health, including guidance as to appointment and termination of appointment, terms and conditions and management.”
“( ) A document published under subsection (1), and guidance given under subsection (3), may include guidance as to the appointment of officers of the local authority to discharge any functions mentioned in subsection (2), and as to their terms and conditions, management and dismissal.”
Lord Hunt of Kings Heath
“(8) That the funds to meet the running costs of fluoridation schemes covered by legal agreements entered into before 1 April 2013 shall be—
(a) met from the identified fluoridation funds within the ring-fenced public health grants to be made by the Department of Health to local authorities with effect from 1 April 2013;(b) held by Public Health England on behalf of the responsible local authorities in order to meet the costs incurred by water companies in operating those fluoridation schemes;(c) accounted for by Public Health England to the responsible local authorities in annual reports on the expenditure incurred on behalf of those authorities.(9) That the funds required to meet the running costs of new fluoridation schemes covered by legal agreements entered into after 1 April 2013 shall be—
(a) met from additional ring-fenced public health grants allocated by the Department of Health to the local authorities requesting fluoridation of all or part of their areas following a public consultation held under the provisions of this Act and its associated regulations;(b) held by Public Health England on behalf of the responsible local authorities in order to meet the costs incurred by water companies in operating those fluoridation schemes;(c) accounted for by Public Health England to the responsible local authorities in annual reports on the expenditure incurred on behalf of those authorities.
Lord Hunt of Kings Heath
My Lords, I shall be brief. I was very grateful to the Minister for a meeting with her and her officials a week ago. I have two concerns about fluoridation schemes. The first is to make sure that where there are current fluoridation schemes, the amount of money being spent on their running costs will transfer to local authorities and that it will be recognised in terms of the allocation that is given. I think the noble Baroness will be able to reassure me on that.
The other question I want to put relates to where new schemes come into being. The proposed system seems rather convoluted, with various bodies involved, including Public Health England at a national level but also many local authorities. I just want some assurance that if a local authority or a combination of local authorities decide to go for a fluoridation scheme, the system of financing will be as smooth and easy as possible and that resources will be available to enable those schemes to go ahead. I beg to move.
Lord Colwyn
My Lords, I support everything that the noble Lord, Lord Hunt, has said and declare an interest as vice-president of the British Fluoridation Society. I believe in the efficacy of the fluoride ion, and during my own dental career have seen the beneficial results of this public health measure.
I do not want to repeat what the noble Lord, Lord Hunt, has said, but the Government envisage that, in future, local authorities will be the bodies that consult on fluoridation and decide whether to introduce and maintain a scheme. The issue is about funding for existing schemes and for possible future schemes. The Bill as it stands would mean that on 1 April 2013 the money currently spent by the NHS on existing schemes would pass to local authorities, which would then have to pass it on to the Secretary of State via the new organisation, Public Health England, to pay the bills presented by water companies. This would be a complex, bureaucratic process. If, for example, the money got stuck somewhere, the water company affected would quickly get fed up and stop fluoridating. How much smoother and quicker it would be if the money that the NHS is currently spending went directly on 1 April 2013 to the Secretary of State and Public Health England. This would mean that the organisation that will actually pay the bills will have the money in its account and not be reliant on local authorities transferring it.
The Bill as it stands also means that if any of the new schemes are ever voted for by local authorities when they take charge of consultations on fluoridation, the Secretary of State will look to them to pay for those schemes. Yet local authorities are not responsible for dentistry and have no dental budget. So where would they get the money from? In all probability they would not get it and, as a result, no new schemes would ever be implemented. This amendment means that, although the local authorities will be the decision-making bodies in future, the money for any fluoridation schemes that they support will come from the dental health services budget of the NHS Commissioning Board, the body that stands to benefit from the reduced treatment costs that would follow. The NHS Commissioning Board would transfer funds to the Secretary of State, who would pay the bills submitted by the water companies. I may have got this wrong, but I would be delighted to hear what my noble friend the Minister has to say.
Baroness Gardner of Parkes
Everything that needs to be said has been said; I thoroughly approve of this amendment and ask the Minister to note my support as a former dentist.
Baroness Northover
I thank noble Lords for that extremely brief and consensual approach to this issue. We debated this in detail in Committee, and I commend all noble Lords for their work in this area.
We certainly agree that the rates of tooth decay in children and adults is an important public health measure. I point noble Lords to the public health outcomes framework, which my noble friend Lord Colwyn might like to have a look at, which is a document to which local authorities will have to have regard.
The noble Lord, Lord Hunt, asked whether, in terms of the public health funding allocation to local authorities, if a local authority has a fluoridation scheme, whether it will be covered within the budget. I can assure him, as I did in the meeting that we had earlier, that indeed it will be covered in the budget, which will look at the public health needs of the area—and that will be reflected in the grant. Those are the current schemes. The noble Lord asked about future schemes. Public health funding is ring-fenced, and the Government look at the needs of the area. However, local authorities will be deciding how they prioritise various issues, so it would not be appropriate for us to say that they must address this issue through a fluoridation scheme. They might be looking at all sorts of other public health issues and seeking to address their responsibilities in terms of dental health in some other way. However, I point out something that I did not know before—and I do not think that the noble Lord knew before—which is that just about all fluoridation schemes currently in place have been initiated by local authorities over their history.
I recognise the commitment of noble Lords to dental health. I appreciate it and realise that noble Lords want to speed it along. I hope that reassurances about the level of funding for current schemes will reassure the noble Lord, Lord Hunt, so that he feels able to withdraw his amendment. We continue to be very keen to engage in this area.
Lord Hunt of Kings Heath
My Lords, I should have declared in moving my amendment that I am president of the British Fluoridation Society. The noble Baroness, Lady Gardner, reminded me by making her own declaration. I am most grateful to the Minister and beg leave to withdraw my amendment.
“( ) The duty in subsection (3) does not apply in relation to the proposal if the Secretary of State so directs by an instrument in writing.”
“( ) The duty in subsection (2) does not apply in relation to the proposal if the Secretary of State so directs by an instrument in writing.”
“( ) The duty in subsection (2) does not apply in relation to the proposal if the Secretary of State so directs by an instrument in writing.”
Lord Patel of Bradford
“Aftercare
(1) Section 117 of the Mental Health Act 1983 (aftercare) is amended as follows.
(2) In subsection (2)—
(a) after “duty of the” insert “clinical commissioning group or”,(b) omit “Primary Care Trust or” in each place it appears,(c) for “such time as the” substitute “such time as (in relation to England) the clinical commissioning group or”.(3) After subsection (2C) insert—
“(2D) Subsection (2), in its application to the clinical commissioning group, has effect as if for “to provide” there were substituted “to arrange for the provision of”.
(2E) The Secretary of State may by regulations provide that the duty imposed on the clinical commissioning group by subsection (2) is, in the circumstances or to the extent prescribed by the regulations, to be imposed instead on another clinical commissioning group or the National Health Service Commissioning Board.
(2F) Where regulations under subsection (2E) provide that the duty imposed by subsection (2) is to be imposed on the National Health Service Commissioning Board, subsections (2D) and (2E) have effect as if references to the clinical commissioning group were references to the National Health Service Commissioning Board.
(2G) Section 272(7) and (8) of the National Health Service Act 2006 applies to the power to make regulations under subsection (2E) as it applies to a power to make regulations under that Act.”
(4) In subsection (3)—
(a) after “section “the” insert “clinical commissioning group or”,(b) omit “Primary Care Trust or” in each place it appears, and(c) after “means the”, in the first place it appears, insert “clinical commissioning group or”.(5) In consequence of the repeals made by subsections (2)(b) and (5)(b), omit paragraph 47 of Schedule 2 to the National Health Service Reform and Health Care Professions Act 2002.”
Lord Patel of Bradford
My Lords, it is with a heavy heart that I find myself speaking here again on this amendment, which attempts to make changes to Clause 39. This amendment is not about politics and is not in opposition to this troubled Bill; it is about the protection of the vulnerable and those in greatest need. I set out in some detail in Committee the reasons and purpose for my amendment, which had the support of not only many Members of this House from all sides but also many leading mental health organisations in this country, such as Mind, Rethink, the Mental Health Foundation, the Centre for Mental Health, the Law Society and the Royal College of Psychiatrists. These are not agencies with vested interests; they do not gain anything from fulfilling their core purpose, which is to advocate on behalf of those who are less able to speak for themselves as a consequence of severe mental illness. We are talking about people who have suffered from severe illness—those who have been so ill and at such risk that the full powers of the Mental Health Act 1983 were used to detain them and keep them in hospital.
These are not lifestyle problems; these are not people who could have chosen a different path. They did not choose to be detained in hospital, sometimes for very long periods of time. No—these are people whom the state, in making use of its considerable powers under the Mental Health Act, has a very clear obligation and duty to protect. That protection must go beyond the time spent in hospital to include their aftercare under Section 117 of the 1983 Act. One crucial thing about that section is that it requires primary care trusts and local authority social services to work jointly together in providing aftercare. This could include a variety of necessary things such as visits from a community psychiatric nurse, attending a day centre, administering medication and providing counselling services—or, most importantly, providing supported accommodation within the community.
Under the current law, a mental health patient can expect that their PCT and local authority provide the aftercare package in an appropriate way, including sorting out the funding between themselves. These vital services cannot be taken away until the PCT or local authority are satisfied that the person no longer needs them. I am not suggesting that Clause 39 would stop the provision of aftercare. What I am saying, and what many other experts in mental health and the law are saying is that that will have profound effects on how that aftercare is delivered and paid for, effects that fall down like dominoes with insidious and devastating impacts. For example, the clause removes the duty of co-operation in delivering aftercare services between the health service, the local authority and the voluntary sector, which makes what is a freestanding duty into a gateway provision. As a consequence, it provides a backdoor route by which aftercare services for detained patients will become chargeable.
I am grateful to the noble Baroness and the noble Earl for making time to meet the noble Lord, Lord Adebowale, and me to discuss our concerns. Unfortunately, this has been to little avail since, as your Lordships can see, there is no change to this clause. With the greatest of respect, I have to say that the Minister and indeed the officials in the Department of Health do not understand the full import of the changes that will be brought about by this clause. At least, I hope it is a misunderstanding because I am at a complete loss as to why our concerns have not been addressed.
Let me briefly give some examples of why I believe this clause will be so damaging. I take these from the Local Government Ombudsman, who became involved following several complaints about the application of the current law. I will explain why this is important in a moment, but let me first give your Lordships some of the detail of these cases. The first concerns a woman, Mrs Wilson, who, following a period of detention under the Mental Health Act, required care in a residential home as part of her jointly agreed aftercare. Yet despite the clear meaning of Section 117 of the Mental Health Act she was charged by the local authority for this care, resulting in the loss of her home. She was also discharged from a Section 117 agreement without her or her mother Mrs Walton, who was her main carer, being either involved or consulted in the decision, which was yet another breach of the clear meaning of the Act. The ombudsman found that the local authority had failed in its duty to provide aftercare, and in its duty to consult the patient and their carer.
The exact same issue—a failure to involve people in decisions, and inappropriate and illegal charging for services—arose in several other cases, such as with Mr Hughes’s sister, who was placed in a care home after being discharged from hospital, again under a Section 117 agreement. She, too, was charged for the costs of her social care and lost her home as a result. Despite clear advice from the Department of Health about Section 117 services being free, the council continued to apply charges. The ombudsman decided that,
“the Council’s delay in changing its policy amounted to maladministration, and that there was no reason why, with reasonable diligence, the policy could not have been changed some two years earlier than in fact it was. And this was a case where such diligence was required”.
It most certainly is required. I could go on and give many examples. The lady in question was being charged £256 a week for her aftercare, even after the legal advisers at the time said that this should have been free. At the time of the ombudsman’s decision, Mr Hughes’s sister had in fact paid costs amounting to £60,000.
Why are these cases so important? It is because they illustrate, even with the protection of the freestanding duty, that local authorities sought to break their agreements without consultation and did everything in their power to charge the people in their care for services that should most certainly have been free. That is the key to the issue in this argument. If this is how local authorities are applying the current law, what can we expect when they are freed from the duty of this care as Clause 39 seeks to do? They did that in a time of plenty, so what shall we see in the current challenging economic climate? What then for the vulnerable people who are coming out of hospital after having been detained under the Mental Health Act?
My amendment is about ensuring that this does not happen, and that even though it is not perfect we keep the joint duty, so that aftercare can be recognised and responded to in ways that are appropriate and necessary. The Minister has argued that this is about tidying up and aligning the legislation. It is exactly that alignment—that so-called tidying up—that causes the problems. I am reliably informed by legal advisers that introducing reference to the 2006 NHS Act in the way that this clause does will import into Section 117 the power to charge for aftercare services whenever the 2006 Act allows for it. I am in agreement with the noble Baroness, Lady Murphy, who asked in Committee, “What is wrong with the current situation? Why change what are clearly essential arrangements without some serious reasons for the change”?. This does not mean just a tidying up.
My amendment is simple. It retains a clear and unambiguous responsibility on clinical commissioning groups and local authorities to provide appropriate aftercare services. It will retain these duties on the basis that CCGs and social services authorities must act together jointly. It would also ensure that CCGs continue to arrange for the provision of aftercare services under Section 117, in co-operation with the relevant voluntary agencies. Most importantly, it preserves the judgment of the Law Lords of this House in the Stennett case that this is a freestanding duty, and as such cannot be used for the charging of aftercare services under Section 117.
As I said at the start, I move this amendment with a heavy heart because we should never have come to this point on this clause. I am not making trouble and this is not about making political points, but the Government make their case for this Bill so much harder by refusing to listen to those who perhaps know something more about the impact on people's lives, especially those who are marginalised and at serious risk. The current joint duty is essential, because it means that the patient is more likely to get access to the right kind of integrated health and social care services which they need and, most importantly, that the patient has an enforceable right to those services.
Aftercare under Section 117 is free of charge because the people who need these services are incredibly vulnerable and face a very real risk of relapse or self-harm, and of becoming more isolated and vulnerable as a result of not being adequately housed in an environment that offers them the protection they so desperately need. I will not retreat from this. My duty to those who are in such critical need of our support and my conscience will not let me retreat from this. I move this amendment in good faith and I hope that the Minister, whether it is the noble Earl or the noble Baroness who replies to this debate, will accept it.
Lord Adebowale
My Lords, I support the amendment moved by the noble Lord, Lord Patel. I am grateful to the noble Earl for the time that he generously gave to me and the noble Lord to meet him and the civil servants. However, I was disappointed by the letter that we received following the meeting. I thought that we had driven home the point and had some sympathy from the noble Earl. I understand the need to tidy up legislation, which is an important thing to do, but I find it faintly disgusting that we are going to mess up people's lives. The legislation might be neater but lives will be made much messier.
I have just come from Manchester—from Turning Point’s offices there; and I declare my interest as the chief executive of an organisation that will be directly affected by the Bill—where we have a case of an elderly lady who has been with us for 14 months, at a cost of well over £100,000. We cannot get the NHS to pay it because it claims that it is the responsibility of the local authority, whereas the local authority claims that it is the responsibility of the NHS. That is the reality under the current legislation, even with, as the noble Lord pointed out, the provisions of Section 117.
We are told that, in tidying up, the proposed provisions will allow people who are discharged from mental health institutions to seek a judicial review if they are refused aftercare arrangements in co-operation with health and social services. I was astonished to read that in the letter. I do not know what planet the writer of the letter is on but I would welcome them to join my planet and actually visit and speak to people who are discharged from these institutions, and to talk to their families and friends, and then to come back and tell me whether they are in a fit state to seek judicial reviews against local authorities and the NHS. We must be real when discussing legislation that will affect the lives of real people who may not sit in this Chamber but who will cost us a fortune if we do not get this right.
It is with a very heavy heart that I support the noble Lord, Lord Patel, in his amendment. I hope that, at this late stage, the Government will see the obvious logic. Even in their responses to previous amendments they said that they wished to support the joined-up provision of health and social care. What better example is there of such provision than Section 117 of the Mental Health Act? It is as obvious as gravity. So we must insist—not to make a political point or reference to the Bill, but on behalf of people not in this Chamber who will cost the country dearly if we do not get it right—that the Government accept the logic of the amendment and just say yes.
Baroness Tyler of Enfield
My Lords, I support this important amendment. The whole basis of the Health and Social Care Bill is to place great emphasis on delivering integrated care as part of the needed reforms, and I am sure that we all support that. As the noble Lord, Lord Adebowale, has just said, though, Clause 36 in its current form will remove one of the few examples of genuinely joined-up service provision between local health and social services. A joint duty on aftercare services for these people, some of the most vulnerable in society, is crucial if they are not to have further lapses and become more and more marginalised. We talked earlier about people falling between the cracks, and that is the danger that we are in.
Baroness Northover
My Lords, I realise that noble Lords want to move on to other debates, so it might be opportune if I intervene now. We have always expressed sympathy for what the noble Lord intended in his original amendment. We listened carefully to the points put by the noble Lords when they came to see us, even if it seemed that we were not very responsive to what they were saying. We note the considerable emphasis that they place on retaining the duty of co-operation with the voluntary sector that is set out in Section 117. We realise that the clause removes the duty that is currently there, and that is clearly causing concern.
We do not feel that there is anything in the clauses that will bring in charging for any NHS or social care services that are currently provided free under Section 117, and the Government have no plans to bring in measures that would change the position on charging for Section 117 services. However, sometimes tidying up causes concerns. We are all used to dealing with the section as it currently stands and could continue to do so. We are nothing if not a listening team. The Government have therefore decided, and I hope that the noble Lord, Lord Patel, will be pleased, that we will not oppose his amendment. In the light of this, if your Lordships’ House agrees and wishes to accept his amendment, the Government will need to bring forward a few technical amendments at Third Reading to make a few consequential changes to the Bill to ensure that the amendment works properly in the amended 1983 Act. I hope that the noble Lord will be pleased that indeed we heard what he and his noble friend were saying.
Lord Patel of Bradford
But a hug is probably more appropriate. That is really good news; I am pleased that the Minister and the noble Earl, who I knew was sincere in all the discussions that we had, have accepted this important amendment. Of course I shall formally withdraw the amendment—
Lord Patel of Bradford
Sorry, I have lost my flow completely. I meant that I shall formally move my amendment. However, I would like to reserve the ability to see those technical changes and come back if they do not quite achieve what we want.
“( ) Subsection (1) does not apply to any function of the Secretary of State of making an order or regulations.”
“( ) Subsection (1) does not apply to any function of the Secretary of State of making an order or regulations.”
“( ) Subsection (1) does not apply to any function of the Secretary of State of making an order or regulations.”
“( ) Subsection (1) does not apply to any function of the Secretary of State of making an order or regulations.”
Welfare Reform Bill
(12 years, 2 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
That this House do not insist on its Amendments 3B and 26B to which the Commons have disagreed.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, I am sure that all noble Lords will agree that we have debated this measure comprehensively over the passage of the Bill through this House. Perhaps, though, your Lordships will allow me to take some of our time this evening to explain again why we believe that this change is necessary.
We have been open about the fact that this measure is essential to curb housing benefit expenditure. Left unchecked, expenditure on housing benefit would reach £26 billion by 2014-15. That is unsustainable and unjustifiable, not least because of the current economic climate. As I have said before during our earlier debates on this subject, we do not think that it is reasonable to expect the taxpayer to fund the cost of somewhere approaching 1 million spare bedrooms. At £500 million a year the cost is substantial, and there is no realistic possibility of finding that money elsewhere.
Some in this House, and indeed in the other place, have suggested that we should perhaps abandon this measure altogether as it will not deliver savings if substantial numbers of tenants move into the private sector. I assure noble Lords that if that really were the case, we would not be implementing this change. It is important to look at the bigger picture. If there were movement into the private rented sector, that would free up accommodation in the social rented sector, enabling it to be let to others who may otherwise have been renting privately. Alternatively, it could be offered to people who are currently placed in often expensive temporary accommodation. So, while I can understand how some may conclude that this measure would result in an increase in housing benefit expenditure, I firmly believe that it will achieve precisely the opposite as the effects ripple outward.
During this final stage of the Bill’s passage, the noble Lord, Lord Best, has offered amendments to protect some social sector tenants, all of which would reduce the expected savings from this measure. I pay tribute to him for the manner in which he has pursued his amendments and the wealth of knowledge that he brings to bear on this issue. I do not doubt for one moment that these were anything other than well intentioned but the Government have been unable to accept them. Aside from the financial implications, there is an important issue of fairness. We have talked about that a lot in the context of these changes but we must make sure that we recognise the need to be fair to tenants living in the private sector in receipt of housing benefit.
On the face of it, what has been suggested through earlier amendments is an approach that protects claimants in social housing but not those in the private sector. I do not believe that there is a clear rationale to pay claimants in the social sector to keep a spare bedroom but not those renting from a private landlord. The Government’s clear view is that we do not fund spare bedrooms in the social sector or the private sector. The cost to the taxpayer would be excessive and totally unjustifiable.
Although we have had to take a tough decision to press ahead with these changes, that does not mean we will not protect people in vulnerable situations. As noble Lords know, we are adding £30 million a year of extra help to the discretionary housing payments fund from 2013-14 for disabled people living in significantly adapted accommodation and for foster carers. Local authorities will of course still be able to consider discretionary housing payments for other groups. I realise that the noble Lord, Lord Best, and others would prefer the certainty of specific exemptions for these groups. We understand the arguments for that but do not believe that a blanket exemption is the most effective or affordable approach. Any exemptions would also add complexity to the system, which we want to avoid.
We also have special rules to provide protection for groups such as the recently bereaved, so that they do not see an immediate reduction in their housing benefit. I know that the noble Baroness, Lady Hollis, who I do not see in her place tonight, is concerned about the impact of these changes on those who need care. Therefore, I reassure her once more that we will allow an extra bedroom for those requiring overnight care from a non-resident carer, in the same way as we do for claimants in the private sector.
We have more than a year before these changes are due to come in and we recognise how important it is to prepare for them. It is essential that all those affected by this measure, whether directly or indirectly, understand how the change will affect them so that they can take action well before April 2013. Therefore, we will use this lead-in time as effectively as possible to support local authorities, customers, landlords and others to plan for these changes. I beg to move.
Motion A1 (as an amendment to Motion A)
“(3A) The Secretary of State shall commission an independent review (“the review”) of the impact of the provisions of sections 11 and 68 of this Act.
(3B) The review shall assess the impact of those provisions on—
(a) families; (b) the incidence of poverty;(c) the incidence of homelessness;(d) levels of underoccupancy;(e) local authority resources;(f) rent arrears; and(g) any other consequences of sections 11 and 68 of this Act which the Secretary of State or the reviewer consider should be covered by the review.(3C) The review will commence six months after sections 11 and 68 of this Act come into force (or, if the provisions of sections 11 and 68 comes into force on different dates, six months after the latter of those provisions comes into force).
(3D) The review will conclude with the making of a report within six months of the review commencing; and shall be repeated one year after it commenced.
(3E) Reports made under subsection (3D) shall be laid before both Houses of Parliament.”
Lord Best
My Lords, in response to the Minister’s defence of the inclusion in the Bill of this underoccupation penalty, perhaps I could briefly spell out the position that we have reached this evening.
Before Christmas, this House asked the other place to reconsider the idea of requiring several hundred thousand tenants in council housing or housing association homes to move out or pay a fine if they were deemed to have a spare room. The amendment that we sent to the other place would have meant that although the requirement to move out or pay up would still stand for all these households, it would not take effect unless a suitable smaller home to which they could go was available. This would have removed the injustice of penalising people through a reduction in their housing benefit, which they would have to make up from the rest of their extremely low income, when they had no option but to stay put. The fine, or bedroom tax, of an average of £14 per week would have to come out of the tenant’s other income—for example, from a single person’s income from jobseeker’s allowance of just £68 per week—even where they had no chance of escaping this significant reduction in their living standards. Of course, rent arrears will follow, which means evictions and more cost. Long-standing residents in council housing, not least in rural areas, would have to move away over considerable distances to avoid the financial penalties of staying in their own homes.
Despite support from your Lordships on all sides, in the other place this amendment was rejected on financial grounds since the measure was expected to cut the deficit by some £470 million per annum. I put forward a modified amendment, which your Lordships again accepted. Under it, the delay in imposing the penalty charge until an alternative smaller home could be offered would not apply to all the households hit by the underoccupation rule, but only to the most vulnerable, such as disabled people, war widows, those caring for severely disabled people or children under one year-old and others not required or expected to seek work.
On the issue of caring for a disabled relative, perhaps I could elaborate a little on the Minister’s comment that a spare room would be allowed for a carer looking after an older relative. This will apply only to a non-family member who is a carer and lives there all the time, exercising their caring duties. However, that spare room is often for the daughter who comes on a temporary basis when her mother comes out of hospital or to look after another member of the family. Having that bit of space can save the National Health Service money as well. Strong speeches were made in favour of the amendment in the other place, including from the Conservative Benches. For example, the particularly acute position in Northern Ireland was highlighted. There was recognition that disabled children often need their own bedroom, as do adults when one of a couple is disabled, and older people for whom an extra room for a family carer who just visits from time to time can be so important. These arguments have fallen on stony ground and the Bill is now back with us.
So that there are no threads still to be untangled, perhaps I could pick up on a couple more of the points that the Minister made in defence of this measure. He very fairly made the point that an additional £30 million in discretionary housing payments has been found to give the extra benefit back where there are foster children in the home—that is very welcome—or where the property has been adapted and it would be foolish to move people out to somewhere smaller and have to adapt that property, possibly with the adaptations to the previous property going to waste. However, the £30 million that has been found to increase discretionary housing payments in those cases has come from increasing the fine for everyone of £13 per week—the original average figure that we heard in Committee—by an extra £1 per week for everyone who is not exempt. Although the £14 that we now face means that the extra funding will help as many as 40,000 households—I am pleased that it will—the remaining 670,000 households will all pay another £1 a week, which is where that funding has come from.
I turn to the amendment that has now come back to this House. I must say that I was tempted to bring forward an amendment that would lessen the cost to the Government since it is clearly the level of expenditure that has inhibited the Government from going anywhere near my amendments so far. However, frankly, to modify the earlier amendments by taking out yet another group of those trapped by the penalty would become invidious as we try to choose between different categories of highly vulnerable people, and select some but not others for the already limited protection that the earlier amendments would have afforded.
Instead—and I apologise to those who hoped that this House could save the day but will now be deeply disappointed—the amendment that I have brought before your Lordships takes a different tack. It would rely on high-quality research to show the consequences of this measure. The amendment places an obligation on the Government to review the impact of the underoccupation penalty on the families concerned and on levels of poverty and homelessness; to calculate the cost to local authorities and housing associations; to look at whether levels of underoccupancy actually fall; and to consider other foreseeable and unforeseeable consequences. The exercise would begin six months after implementation of the provisions in the Bill. It would be completed within a year and repeated a year after that. My hope is that the Government would prove willing to make some in-flight corrections and to take mitigating action if the evidence shows clearly that the consequences of this measure are dire.
In response to a Motion that I moved on the regulations that introduced earlier housing benefit cuts, the Minister put in hand a thoroughgoing research project on the impact of those changes. I have been delighted by the extent and quality of this research project and I remain very grateful to the Minister for that initiative. I know that he fully understands the value of high-quality research and hope that he feels able to go forward with this amendment. After the long journey we have all taken in pursuit of this matter, that would at least mean that a modest outcome would result from all our deliberations.
Baroness Lister of Burtersett
My Lords, I support Motion A1 as the best outcome we could possibly hope for in the current circumstances. However, I would like to suggest another area that the review should look at in terms of a foreseeable consequence, which is the impact of this measure on social support networks. I was an adviser to a Joseph Rowntree Foundation-funded project carried out by some of the people involved in the review instigated as a result of the noble Lord’s earlier intervention: namely, Sheffield Hallam University, which has been looking at the relationship between poverty and place over a three-year period. It produced a report last year which considered these research findings and set them against various explicit and implicit assumptions in government policy. One of the points made in the report was that if forthcoming social housing and housing benefit reforms obliged low-income households to relocate, this might most affect those with the strongest connection to their existing neighbourhood. Surely this goes against so much of government policy. These reforms will make it harder for people to find work because social networks are very important in helping low-income people find work. They will make it harder for those with children to enter or sustain work because social networks are so important in terms of help with childcare. The reforms will undermine the big society. Social networks are the capillaries of the big society. The report suggests that the reforms will reduce people’s feelings of security, safety and sense of belonging. I am sure that this is not what we want. I do not know whether the Minister will respond positively to my suggestion. However, if he does respond positively, as he did with regard to the suggestion of the noble Lord, Lord Best, for a review, I hope that he will take on board the impact of this change on social support networks.
Lord German
My Lords, I commend the thrust of this amendment. However, as has been demonstrated, the way in which it is drafted may mean that it does not include everything that we would wish it to include. I would expect the Minister to comment about the way in which a review should be conducted. I do not wish to sound like a well-worn record but I have a long-standing view about the way in which major shifts and changes should be reviewed. It is absolutely essential that any part of the Bill which has profound implications for change should be reviewed in a proper manner. I wish to use two analogies—a route map and a set of milestones. We use a route map to get a sense of direction, find out where we can turn off a route and make diversions, whereas a milestone signifies the distance that we have travelled. Reviews which rely solely on milestones do not necessarily fulfil the point to which the noble Lord, Lord Best, referred: namely, to make changes on route. That is one of the key issues for any form of review of major change.
The Government’s principal success in this field was their appointment of Professor Harrington to undertake a series of milestone reports. One of his reports was colloquially referred to as his report number one and a half. He continually places on record what he sees as being the changes which are necessary. He has followed different routes and different avenues in looking at the whole issue of the WCA and the way in which it is adopted. That has enabled the Government to make changes as they are going along. I commend the suggestion to the Government that they should think carefully about appointing independent people to conduct a continuous evaluation so that we not only have the milestones when formal reports have to be submitted but changes can be made as the need for them arises. Such a process gives flexibility to the people who are conducting the evaluation to address problems as they emerge.
I make no apologies for returning to the issue of foster carers. I raised it in Committee, on Report and I raise it again today. As we have just heard, the sum of £30 million is intended to support 40,000 households which contain disabled people or foster carers. What analysis has been done of the adequacy of that sum or of whether 40,000 households is the correct figure to cover people who fall into both those categories? I refer specifically to foster carers. We have a distinct shortage of foster carers in our country. Only 65 per cent of children in care are in foster care, which means that many thousands of children who could benefit from this provision if appropriate foster homes could be found for them are missing out. However, it is natural and reasonable that social services departments and fostering services place increasing emphasis on the importance of finding a good match vis-à-vis a child and a foster carer. That has inevitably led to a longer time span in appointing foster carers. Did the Government take that extended time span and the increased demand for foster carers into account when calculating the support that they would make available to the groups I have mentioned? We do not know how many of the 40,000 households include disabled people and how many include foster carers. I should be grateful to my noble friend if he could respond to those points.
In conclusion, I commend to the Minister the review process proposed in the amendment. As has already been pointed out, some noble Lords may think that the amendment should include other matters. Its proposed new subsection (3B)(g) would allow other matters to be taken into account. One might want to refer to the problems caused by disrupted education. I believe that noble Lords have referred to that in previous debates on the Bill. It seems to me that the amendment may not have the right wording but its sense of direction is very appropriate. I hope that my noble friend the Minister will be able to accommodate its main thrust.
The Lord Bishop of Ripon and Leeds
My Lords, I too thank the noble Lord, Lord Best, for the amendment and for his persistence on this issue. He has continually sought to get us to think of ways in which we can provide support for those who may be in need as a result of the Bill’s provisions. Therefore, I support Motion A1.
There has been much debate about what effect the Bill will have in practice when it becomes an Act. Some believe that it will result in a very positive change of culture which will be of benefit to all. Others believe that we still massively underestimate the Bill’s effect in terms of the number of people whose lives will be damaged and who will be made homeless as a result of it. A tremendous variety of assessments have been made regarding how many people will suffer as a result of the Bill, not least the number of children who will suffer.
I spent this morning with staff of a charity called Streetlights, which seeks to support those who are unemployed in the City of Westminster. It is based just round the corner from here in Great Peter Street. It provides food for those who are homeless and at the same time, in seeking to provide holistic support, points individuals and families towards legal and mental health support. Streetlights is backed by the Church Urban Fund, and I was there this morning, partly because of the fund’s promotion of today, 29 February, as a “spare day” to encourage volunteering for places such as those run by Streetlights. I was therefore able to talk both to those who run Streetlights and their clients about the effects of homelessness in general and the particular effects that those in charge there envisage as a result of Clauses 11 and 68. They are convinced that homelessness will increase significantly as a result of the bedroom tax proposals and other measures in the Bill. We cannot know whether they are right or not, but it is a real concern among charities that are seeking to find volunteers who will be able to provide necessary support and are pretty unclear as to whether they will be able to do so.
I therefore support very firmly the idea of a review, so that when there is some evidence that we can talk about, we can look at the ways in which we can support and help those in most need. I was very grateful indeed in our earlier discussions on the Bill for the Minister’s promise of a review of the impact of the benefit cap as it comes into effect so that we can find out what is actually happening as a result. I very much hope that he will be able to repeat that sort of assurance and promise now. I support the amendment.
Lord Kirkwood of Kirkhope
My Lords, I should like to encourage my noble friend to support at least the thrust of the amendment moved by the noble Lord, Lord Best, as it gives us some reassurance that we will be able to track the changes that will happen as a result of these provisions. I profoundly hope that my noble friend is right to say that rent levels will reduce as a result of the Bill. I fear he is wrong but I will big enough to admit that I was wrong if what he has said turns out to be the case. However, the stakes are quite high. Whether he is right or I am right the Bill will produce effects on the housing of households at the lower income levels in a way that could be dramatic. However, time will tell what the effects will be. I hope that he is right and I am wrong.
I endorse the comments made by others about the persistence of the noble Lord, Lord Best, and the advantage that we have had of his expertise. We owe him a great debt, no matter which side of the argument we are on. I urge him to maintain his persistence because although the review he is suggesting is important, it will come in after the event. Before that we will have a process of regulations to implement some of these provisions. I would encourage the noble Lord to continue with his persistence through those regulations because some in-flight corrections may be possible within the envelope that my noble friend on the Front Bench has available to him. If the noble Lord, Lord Best, is prepared to continue his interest and my noble friend on the Front Bench continues the open-door access policy that he has demonstrated to everyone’s satisfaction —certainly mine—constructive tic-tac might be achieved before the review is implemented and that would have a positive effect. I would be happy to contribute to any continuing discussions of that kind during the regulations process.
The only other thing I want to say is that I am now convinced that as a result of the housing aspects of the Bill we are dealing with symptoms. We need a fundamental look at housing policy. We cannot do housing benefit like this. We are imposing consequences on an unlucky few who happen to be in the wrong place through no fault of their own. That is very difficult to justify. Of course there is deficit reduction and we cannot wait for housing policy to change. A housing policy change that embraced some of the fundamental core issues facing our nation, as opposed to symptoms, would take a long time, but the journey has to start somewhere. The experience that the Minister has had from this debate puts him in a strong position to go to his colleagues across government to develop housing policy in the social rented sector with rents that people can afford. It will take time and will involve winners and losers. It will also be a tough policy, but at least if it were consistent and done against a background of a wider housing policy, it would be fairer in the long run. If it is the view that we are spending too much on housing support—£20,000 million a year is a lot of money—we must be very careful when addressing the question in the round. I seriously encourage my noble friend, as a result of the consequences of the Bill, urgently to adopt that position within government and with his ministerial colleagues in order to address this issue as soon as possible.
Lord Boswell of Aynho
My Lords, having listened to this debate and many of the discussions in Committee on the Bill, I commend the amendment of the noble Lord, Lord Best. I hope that the Minister will accept it, first, because the noble Lord has performed a considerable service in bringing his expertise to bear on the issue. I need not go on about that, other than to say that as someone who has no claim to expertise in housing policy I have increasingly come to the view that in many areas of social policy and social advance housing policy is cardinally important because it impacts on all the other areas. Therefore, by extension, the review that the noble Lord proposes will begin to consider some of the ripple effects of these changes on other situations or aspects.
Secondly, perhaps the most relevant analogy that I can make is that we never quite know when we embark on a major element of social change how it will end up. We all have political positions, we ground them in advance, and we then have to sit back and wait for the consequences. Generally, it is unwise to go for the big bang, although Ministers have to do that. I give as an example the changes made in industrial relations policy unsuccessfully in the 1970s. They were then brought in successfully and seriatim in the 1980s rather than in one big advance. We are not in that situation today and I can understand where the Minister finds himself.
We need a process and I shall pick up just two points from the debate. One is from my noble friend Lord German who stressed in his very happy analogy of the Harrington report the importance of independence. The amendment specifically states as a rubric that the review should be independent. As a government supporter, I am entirely relaxed about that; we should follow where the argument goes, look at the consequences and amend them.
I also pick up a point made by my noble friend Lord Kirkwood. He talks about in-flight corrections. We have two stages to this process—the regulations to come, which might be called pre-take-off corrections, and the review following the experience of the initial running of the system, which we should look at carefully. The Minister should do that with a measure of flexibility. We know that resources are very limited. The noble Lord conceded that when moving his amendment, but we should be ready. It is very much in the spirit of the discussion that we have had throughout this long saga, in which the Minister and other noble Lords have played a commendable part. We have done our best in limited circumstances. We sort of launch in hope without certain knowledge of where we will go but, given the noble Lord’s amendment, with a determination to keep our eyes open as to what is happening and to make such corrections as may be appropriate and just.
Baroness Sherlock
My Lords, I shall say just a brief word. Barristers always say that you should never ask a question in open court unless you know what the answer will be. I fear that Ministers often take a similar attitude to research: do not ask a question unless you know what the answer will be and you know that you will like it. I commend the Minister, because I have had the impression throughout the passage of the Bill that he is not that kind of Minister but is genuinely interested in information. Because of that, I hope that he will feel able to give a generous response to the encouragement of many Members of the House to look for information.
I have two things for the Minister to think about. One is to follow up the point made by the noble Lord, Lord Kirkwood, which is that if the Minister is right and rents change as a result, we will all be interested to learn that. If they do not, we will have learnt something about the market. If that is the case, that creates a question rather than just answering one: what is happening with the state of the housing market and what other levers are available to the state? It would be extraordinarily helpful to the country as a whole if the Minister would use his position in government to commend that set of questions to his colleagues, rather than stopping at that point.
My second point is in response to the comments made by the right reverend Prelate the Bishop of Ripon and Leeds, which concerned the broader effects, particularly on families with children. Many noble Lords will be aware that when the United States engaged in significant welfare reform, one fear expressed at the time was that many people would simply disappear from the system altogether. Research was undertaken and that proved to be the case. I have expressed concern at different points during the Bill's passage about what happens to vulnerable children, in particular, and, more broadly, to vulnerable families. Perhaps the Minister can take this opportunity to reassure the House that the Government will do all that they can to track what is happening to individuals so that they do not fall out of the notice of the authorities.
Baroness Grey-Thompson
My Lords, briefly, I commend the noble Lord, Lord Best, on his determination with the amendment and offer him my support. I will not repeat the words of the noble Lord, Lord Kirkwood of Kirkhope, but he is absolutely right when he talks about reassurance. It is so unfortunate at this stage of the Bill that many people who may find themselves in really difficult situations, perhaps through being in the wrong place, will be extremely disappointed that we cannot take this further. As we have read in the press yet again today, many disabled people are being portrayed as benefit scroungers. That causes me great concern as we make some of these changes. The review is vital if we are to ensure that our worst fears are not realised.
Lord McKenzie of Luton
My Lords, we support the Motion proposed by the noble Lord, Lord Best, and I, like others, thank him for the persistence, diligence, precision and passion with which he has pursued this subject from the start of our proceedings. I very much agree with the noble Lord, Lord Kirkwood, who said that this is no way to go about tackling issues of underoccupation; a much broader, more sophisticated approach is needed. It is a pity that we are stuck at this stage with, basically, having to live with what is in the Bill, subject to the review.
We have been told again that the amendment that we sent to the other place is an infringement of its financial privilege. It disdainfully clings to that financial privilege, which it could waive, without regard to the consequences for hundreds of thousands of households who will bear the financial burden of these cuts, in the same dismissive way that the Prime Minister today announced that the Bill would complete its parliamentary passage before noble Lords had even convened to consider it further. They brush aside our amendment, with its protection for families, notwithstanding that for some there are no smaller properties for them to move to; regardless of the fact that, for some, their disability involves them in additional costs which will be more difficult for them to meet and given their housing benefit reductions; and ignoring that many do not have a route to work to mitigate loss of benefit. The noble Lord, Lord Best, was absolutely right not to water down the amendment further and try to pick and choose which of those categories of individual is more deserving of escaping this iniquitous provision than the others.
Throughout the various stages of the Bill, we have sought to press on the Government the innate unfairness of the provisions concerning underoccupation. As we have heard, the arguments advanced have variously included the following. There is the appropriateness of adopting the CLG definition of underoccupation—a measure which provides sensible flexibility for households as family arrangements wax and wane, health conditions change, and young children grow older. There is the acceptance that only if there is suitable alternative smaller accommodation should families be expected to move, notwithstanding that that may be totally disruptive to their lives, and that meeting a housing benefit shortfall by getting a job or working more hours should not be insisted on where claimants are simply not able to work.
The losses in housing benefit a week, whether of £12, £13 or £14, cannot be borne without driving more households closer to or into poverty. Most are not sitting on substantial savings to cushion the loss of benefit; if they were, they would be ineligible for housing benefit in the first place. Moving to the private sector is likely to lead to increases in housing benefit costs for the Government rather than reductions. Taking in lodgers to contribute to the housing benefit shortfall will simply not be possible or desirable in many family circumstances. It is a false economy to force disabled people to move from a property which has been substantially adapted. To make it more difficult for those involved in foster caring makes no sense on many levels.
Your Lordships have supported those arguments, but they have been rejected by the Government in Committee, at Report and, now, at ping-pong. The only acknowledgement of the havoc, despair and poverty they will create is a £30 million annual top-up to discretionary housing benefit. Even that, as we heard from the noble Lord, Lord Best, is funded by an increase in the housing benefit reductions for all.
The Government know full well that these clauses will not solve the problem of underoccupation of social housing. They cynically do not want to solve it, otherwise their intended savings will simply not materialise. The offer they make is to move further afield, away from your community, support network, friends and jobs—not a sensible proposition, as we heard from my noble friend Lady Lister—to take a lodger, to use your savings or to earn more money. That is essentially a bogus offer, because most will simply not be able to take it up.
If we cannot persuade the Government, the least we can do is to have arrangements which will confront them with the consequences of what they implement. That is why we support the Motion tabled by the noble Lord, Lord Best, which requires an independent review of the consequences of Clauses 11 and 68. Of course, it will not be just that review which explains what is going on. Local authorities, councillors, MPs, and voluntary and community organisations—and, indeed, the courts—will get the blast from this in little over a year from now, as the cuts begin to bite.
We do not deny the need to tackle the deficit, nor that that means some hard choices, but it is genuinely difficult to understand why this contribution is sought in this way to this extent from this group of people. The alleged cost of our previous amendment, £100 million, is, when we think about it, just 20 per cent of one company’s tax avoidance schemes.
However, that is what both partners in government have chosen to do, and we have not been able to persuade them otherwise. We hope that an independent review will reinforce the points that we have made and still persuade the Government to a different view. If the review concludes otherwise, we can have no complaint.
This is not the end of the matter; it remains work in progress; but this debate marks the conclusion of our deliberations on the Bill, a Bill that we have been able to improve in some respects, but which, in too many ways, imposes unacceptable burdens on the most vulnerable. They are entitled to better from their Government.
Lord Freud
My Lords, let me start with two points. The first is that we plan to move ahead with these changes. The second is that I pick up the point made by my noble friend Lord Kirkwood. I heard very clearly what he said about housing strategy. On this measure, of the 3.3 million tenants living in the social rented sector and receiving housing benefit, only about one in five is expected to be affected by this change. Some will move to more suitably sized accommodation and will get support to do so. However, if social sector tenants choose to stay where they are and meet the shortfall through employment, we will offer them help in doing that. As noble Lords know, this measure applies only to working-age people. The substantial investment that we are making in the work programme and in universal credit will ensure that people are supported to find work and that work really will pay.
Lord Best
I am extremely grateful to all noble Lords who have spoken from all sides of the House, including the Bishops’ Benches. I thank the noble Baroness, Lady Lister, who made the point that breaking up social networks by requiring people to move or face a penalty that they find very difficult is disruptive. Once it is known that a Member of your Lordships’ House is involved in these things, we of course get targeted. One of the most moving e-mails that I received was from a woman who, with her husband, has two rooms and will, I am afraid to say, face a charge of £25 per week. Her husband is partially disabled and they live on a very meagre income. Her mother is a neighbour, living not very far away, and this lady provides a full caring service for her. She has looked into the possibility of moving elsewhere and she can move some miles away. However, she is not going to be able to get back to see her mother twice or three times a day. She cannot afford that £25 a week and is going to have to do something. These are the kinds of social network issues that are raised by this measure.
I am very grateful to the noble Lord, Lord German, who spelt out the need for milestones when one brings in new legislation of this kind. To the categories that we ought to look at, he added the disruption of education. Moving children to a different area and taking them out of school can set them back, and that can have life consequences.
I am grateful to the right reverend Prelate the Bishop of Ripon and Leeds, who has talked on children’s issues eloquently throughout the Bill. From the intelligence on the ground, he is worried that the level of homelessness will increase, and that is certainly an issue that research would look at carefully.
The noble Lord, Lord Kirkwood, who has throughout on this and other aspects of the Bill been absolutely tireless, makes the point that rents may not go down, as the Government hope. I hope that the Minister does not get the blame when the housing benefit bill does not fall. For example, I received some new figures just this week which show how the number of claimants of housing benefit has gone up recently because of the effects on the economy, with more unemployment and more people having to claim housing benefit. That is not the Minister’s fault and I hope that the Treasury does not hold it against him. The housing benefit bill is very hard to curb. The noble Lord, Lord Kirkwood, draws attention to these knock-on effects of everything that one does and calls for a much wider review, which sounds entirely sensible.
The noble Lord, Lord Boswell, to whom I am grateful, stressed the importance of housing more generally and the value of an independent evaluation of the kind that is proposed in this amendment.
The noble Baroness, Lady Sherlock, raised a point to which the Minister responded. I believe that he is genuinely interested in the outcome of an independent review, upon which good policy can be based.
The noble Baroness, Lady Grey-Thompson, highlighted—quite rightly, as it probably has not had quite enough attention in this debate tonight—the fact that very many disabled people are in the accommodation that we are talking about, with fixed incomes and no opportunity to go out to work. They will be particularly badly hit and we must look carefully at that.
The noble Lord, Lord McKenzie, having followed this every inch of the way and to whom I am extremely grateful for his support, made the point that the long list of potential escape routes, such as taking in a lodger or using up one’s savings, are not really viable alternatives to having to move or pay out. He concluded that this was going to place unacceptable burdens on the most vulnerable.
I am extremely grateful to the Minister for accepting the necessity for an evaluation and for committing himself to bringing forward full-scale proposals when the regulations come to us. The noble Lord, Lord Kirkwood, made the point that when regulations come before us, we have another chance to look at these matters; we even have a chance to vote on them, and we are able to hold the Minister to account on this. I think we will be pleased with what is brought forward, not least because he also committed himself to full consultation on this research project with the stakeholders concerned; to consulting, discussing and working with the stakeholders, including myself, the subsequent action—the strategy and the guidance—that follows from this.
Therefore, I must be satisfied with the Minister’s response. He will, he said, be keeping under review the very key ingredient: the level of discretionary housing payments with which local authorities are provided to top up and help people who are in difficult circumstances. I do not think local authorities are going to be very keen to bail out the Government on this one and make up the deficit themselves, but if the Treasury finds, as a result of the research that we do, that there are sufficient hard-luck stories where one cannot really resist having to pay out more housing benefit, the discretionary housing benefit will be one lifeline which could be substantially influenced by research, when it comes along.
At the end of what seems to have been a very long innings on all of this, I thank the Minister for his response and for the courtesy and good humour with which he has approached all aspects of this Bill; I am grateful to him in all those respects. I beg leave to withdraw the amendment.
Health and Social Care Bill
(12 years, 2 months ago)
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Baroness Cumberlege
Baroness Cumberlege
My Lords, this is a very simple and non-controversial amendment. Under Clause 51, the Secretary of State has a duty to keep under review the effectiveness of key bodies in the NHS. This is a crucial part of the Secretary of State’s responsibilities in ensuring that he or she can exercise ministerial accountability for the health service. As this is a new body, through the Secretary of State, we will want to ensure that it is to carry out its functions effectively. Healthwatch England has to undertake certain tasks—for example, making annual reports to be laid before Parliament. Other reports will be at its discretion. These activities will be easy to monitor, but it will be much more difficult to assess the quality and the appropriateness of the advice and information or other assistance it chooses to give.
In her letter to noble Lords on 21 December, my noble friend Lady Northover told us that she did not expect Healthwatch England to give the CQC, the NHS Commissioning Board or other bodies an easy ride. She went on to state:
“We fully expect HealthWatch England to raise what at times may be awkward, difficult questions with respect to health … and to be able to do this publicly”.
It is the Government's intention to create not a patsy organisation but one that will be a champion of health and, on occasions, a difficult and awkward companion, focused on improving the quality of care in both health and social services. If it does not, it will not fully represent the voice of patients and service users.
The Care Quality Commission is one body listed in the clause. As the Bill stands, HealthWatch England will be a committee of the CQC. However, as we have discussed in many debates on the Bill—and I believe that more are to come when we come to debate the amendment of the noble Lord, Lord Patel—there will be a need for it to remain operationally independent of the Care Quality Commission. Therefore, I suggest that a review of the Care Quality Commission may not be an appropriate way of fully scrutinising the role of HealthWatch England, and that such scrutiny should be included in its own right in the clause.
That is why I tabled an amendment to add HealthWatch England to the list of bodies that the Secretary of State must keep under review. It would make it clear that HealthWatch England is independently accountable for how effectively it goes about its work, and cannot be overshadowed by—or hide behind—the review of the role of the CQC. I hope that my noble friend will look kindly on this simple and not very earth-shattering amendment. I beg to move.
Lord Harris of Haringey
My Lords, I seek clarification on the amendment. I am sure that the noble Baroness, Lady Cumberlege, means well, but I note that the formulation she used was,
“and its Healthwatch England committee”.
I am sure that it would have been possible to draft the amendment so that it referred simply to HealthWatch England, which would have avoided raising the question that we will come to at a later stage of whether HealthWatch England should be part of the CQC or any other august structure of the NHS. It is an important technical point; I hope that the amendment does not pre-empt any later discussions.
The motivation that the noble Baroness ascribed to the amendment—to demonstrate that HealthWatch England is independently accountable—is extremely important. It is entirely proper that HealthWatch England should be seen to be accountable to the Secretary of State. Certainly it should not exercise that accountability through another body, particularly one which it might on occasions wish to criticise, or about which it might want to raise important concerns or say that it has not done what it might have. Therefore, to demonstrate that HealthWatch England is independently accountable is an important objective. My concern is that the amendment may solidify something that at the moment comes later in the Bill, but which I trust will not remain there by the time we have finished Report: namely, the requirement that HealthWatch England is simply a committee of the CQC.
There is also a question about how accountability will work with respect to the Secretary of State. I suspect that the quotation from the noble Baroness, Lady Northover, to which the noble Baroness, Lady Cumberlege, so approvingly referred, about how difficult and painful would be some of the discussions with HealthWatch England, will sometimes apply also to the Secretary of State. When I was for a number of years director of the Association of Community Health Councils, I collected personal denunciations that I had received from successive Secretaries of State. They came from both parties: indeed, the most vehement denunciation was from a Secretary of State from my own party, who perhaps expected more from me than the criticisms that I had raised.
The point is that this will not be an easy relationship. Even the accountability that is envisaged by the reference to “keeping under review” will, I suspect, lead to tensions. However, I do not believe that one can have a body of this nature that is not accountable in some way to the Secretary of State. I simply look forward to the maturity of future Secretaries of State, of whatever party, who will recognise that a body such as HealthWatch England, and local healthwatch organisations, are intended sometimes to be irritants.
Baroness Wheeler
My Lords, I would have liked to debate this amendment in the light of next week’s debate on the status, powers and functions of HealthWatch England under Clause 180, when we will fully air once again the serious and continuing concerns across the House about the proposed relationship between HealthWatch England and the CQC, and hear from the Minister how the Government intend to address these concerns as they flesh out their proposals for healthwatch, and as the CQC comes under closer scrutiny. However, we support this amendment requiring the Secretary of State to include HealthWatch England in the organisations specified in the Bill that he or she must keep under review. Obviously we do this in the context of the separate independence of HealthWatch and not as a committee of the CQC.
However, it is also important to make it clear that we do not think that the measure in itself, or combined with other government proposals, for example, on the HealthWatch board membership, will be anywhere near enough to provide the independence that HealthWatch England needs if it is to be the robust and trusted patients’ watchdog that is needed—and I emphasise trusted by the public.
The Minister must appreciate that the concerns across the House over the CQC’s relationship are not addressed by referring to the close synergies between the two organisations or to the powers and influence of the CQC rubbing off on HealthWatch. In this context it is difficult not to dwell on the recent developments in the commission and the Department of Health performance and capability review of the commission. I say this as a genuine supporter of the CQC and its work—for example, last year’s excellent special review of stroke services, and the one of residential care—but the department’s major findings that the CQC needs to be more strategic, that accountabilities within the CQC are unclear, as well as the strong concern over the blurring of boundaries between the CQC board and executive team, do not augur well for the future relationship between the CQC and HealthWatch.
Of course, we will come to these matters in detail when we have the full debate on HealthWatch and local healthwatch organisations. I hope that at that stage the Minister will address these ongoing concerns, particularly about the clash of cultures between HealthWatch and the CQC, about public faith and trust in HealthWatch if it is to be formally linked to the CQC, and the lack of confidence in the new arrangements on the part of the overwhelming number of LINks organisations and NALM. As the letter from NALM in the Guardian earlier this week underlined:
“Healthwatch will only be considered the true voice of the public, if it is seen to be independent of those it monitors”.
I look forward to next week’s debate.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, the Secretary of State has a duty to keep under review the effectiveness of the exercise of health service functions by certain national bodies. These bodies are listed at new Clause 247C, inserted by Clause 51 of the Bill.
As it is currently drafted, the Bill requires the Secretary of State to keep the effectiveness of the Care Quality Commission under review in so far as it is exercising functions in relation to the health service. However, it does not make explicit reference to the HealthWatch England committee. Yet, while HealthWatch England will be established as a committee of the Care Quality Commission, it will have its own statutory functions that it must exercise outside of the CQC’s other functions.
This is, therefore, a helpful and welcome amendment from my noble friends Lady Cumberlege and Lady Jolly. It helpfully clarifies the distinction, in terms of the Secretary of State’s accountability, between the exercise of functions by HealthWatch England and that of the CQC.
The amendment would add HealthWatch England to the list of bodies the Secretary of State must keep under review in respect of how effectively it exercises its functions in relation to the health service in England. Importantly, it would emphasise that HealthWatch England itself is responsible for exercising the statutory functions of HealthWatch England.
I have reflected on this and I will be supporting this amendment. I hope that other noble Lords will join me in doing so.
Baroness Cumberlege
My Lords, I think we are on a roll. I am very excited that we have had another amendment accepted. I very much thank my noble friend.
I appreciate some of the other points that have been made in this debate, but I think we will be debating them next week and perhaps we could hold our fire until then. Indeed, we have debated them previously and noble Lords will know that I am in favour of the present proposal in the Bill that HealthWatch England should be a committee of the CQC, and that is why I have chosen those particular words.
I am very grateful to my noble friend. I think this is the first time ever this has happened to me and I feel very pleased about it. Thank you.
“( ) The report must include the Secretary of State’s assessment of the effectiveness of the discharge of the duties under sections 1A and 1B.”
“( ) after paragraph (e) insert—“(ea) paragraph 11 of Schedule A1,(eb) paragraph 14 of Schedule 1A,”.”
Earl Howe
My Lords, in moving Amendment 145, I shall speak also to the other amendments in this group: Amendments 146, 147, 148, 148A, 151, 153, 154, 155, 156, 159, 160, 222 and 223.
The amendments in this group make a number of changes to some of the Bill’s schedules of consequential amendments. These include, for example, consequential amendments to the Charities Act 2011 and the Health and Safety at Work etc. Act 1974, as well as a number of amendments consequential to the abolition of PCTs, SHAs and NHS trusts.
I am happy to explain any of these amendments, if noble Lords wish, but I hope that noble Lords will take it from me that these are minor, technical or consequential amendments. I beg to move.
Baroness Thornton
My Lords, I have a question on Amendment 148A, which does not look small or minor to me. It concerns “Support functions of the Secretary of State”. Why is it there? Why is it necessary? What does it aim to do?
Earl Howe
My Lords, with the changes to the Secretary of State’s powers under the Bill, it has recently become clear that it would be better to make express provision for the Secretary of State’s powers to provide the support functions referred to in the amendment rather than rely on Section 2 of the NHS Act 2006 and risk any legal doubt. The amendment would maintain the current position under the Act and enable the Secretary of State to continue to carry out the activities concerned. The context of this is that Section 2 of the Act gives the Secretary of State a general power to,
“do anything else which is calculated to facilitate, or is conducive or incidental to, the discharge of”,
his duties in the Act.
The kinds of thing that come under that heading are support facilities and other assistance to the NHS—for example, the department purchases some medicines centrally for the NHS or provides advice to NHS bodies in carrying out procurement activity. It is also involved in arrangements known as NHS shared business services. It provides accounting, payroll and e-procurement services for all types of NHS organisation. There are benefits to the health service in ensuring that the Secretary of State remains able to co-ordinate activity centrally—for example, in certain cases it is likely to be financially beneficial to purchase services centrally.
Perhaps I may make it clear that Amendment 148A does not allow the Secretary of State to commission or provide health services. As noble Lords will be aware, the Bill requires the Secretary of State to exercise his functions to ensure that services are provided but removes the Secretary of State’s specific powers to provide or commission NHS services directly. This amendment does not change that.
“( ) In subsection (9), for “section 224 or 226” substitute “section 225”.”
“( ) In the heading to the section, omit “Strategic Health Authorities and”.”
“( ) In the heading to the section, omit “Strategic Health Authorities and”.”
“After section 254 insert—
“Support functions of the Secretary of State254A Support functions of the Secretary of State
(1) The Secretary of State may, for the purpose of assisting any person exercising functions in relation to the health service or providing services for its purposes—
(a) provide (or otherwise make available) to the person goods, materials or other facilities;(b) facilitate the recruitment and management of the person’s staff;(c) develop or operate information or communication systems; (d) do such other things to facilitate or support the carrying out of the person’s functions or other activities as the Secretary of State considers appropriate;(e) arrange for any other person to do anything mentioned in paragraphs (a) to (d) or to assist the Secretary of State in doing any such thing.(2) The power conferred by subsection (1)(a) includes power to purchase goods and materials for the purpose of providing them or making them available.
(3) The Secretary of State may, in connection with anything done under subsection (1), make available the services of any person employed by the Secretary of State.
(4) The powers conferred by this section may be exercised on such terms, including terms as to the making of payments to or by the Secretary of State, as may be agreed.
(5) In this section, “the health service” does not include that part of the health service that is provided in pursuance of the public health functions of the Secretary of State or local authorities.””
Baroness Murphy
“( ) After subsection (5) insert—
“(5A) The Secretary of State may by directions to the Board specify the minimum amount which the Board must spend in a financial year in making payments under—
(a) this section;(b) subsection (1) of this section;(c) subsection (3) of this section.(5B) The Secretary of State may by directions to the Board specify—
(a) a body or description of bodies to whom payments under subsection (1) or (3), or under either or both of those subsections, must be made by the Board in a financial year;(b) functions or activities, or descriptions of functions or activities, in respect of which such payments must be made by the Board in a financial year;(c) the minimum amount that the Board must spend in a financial year in making such payments—(i) to a body or description of bodies specified in relation to the year under paragraph (a);(ii) in respect of functions or activities, or descriptions of functions or activities, specified in relation to the year under paragraph (b);(iii) to a body or description of bodies specified in relation to the year under paragraph (a) in respect of functions or activities or descriptions of functions or activities so specified under paragraph (b).””
Baroness Murphy
My Lords, the noble Baroness, Lady Cumberlege, expressed what we psychiatrists call a transient situational emotion of delight.
Baroness Murphy
Just as she was delighted at having her amendment accepted, I too am delighted that the Minister has expressed the fact that the Government will accept this amendment. I beg to move.
(b) before paragraph (a) insert—“(za) section 14A(1),”.”
“( ) After the entry for “LPS scheme” insert—
“NHS Constitution | Section 1AA(2)”.” |
“Health and Safety at Work etc. Act 1974 (c. 37)(1) Section 60 of the Health and Safety at Work etc. Act 1974 (supplementary provision about the Employment Medical Advisory Service) is amended as follows.
(2) In subsection (1) for “each Primary Care Trust and Local Health Board” substitute “the National Health Service Commissioning Board or each clinical commissioning group (in relation to England) and each Local Health Board (in relation to Wales)”.
(3) In subsection (2)—
(a) omit “for one of their”, and(b) for ““each” to “its”” substitute ““the National” to “arranges””.”
“Local Government and Housing Act 1989 (c. 42)In section 2 of the Local Government and Housing Act 1989 (politically restricted posts), in subsection (6), after paragraph (za) insert—
“(zb) the director of public health appointed under section 73A(1) of the National Health Service Act 2006;”.”
“( ) in that paragraph, after “or” (in the first place it occurs) insert “a”,( ) in the words after paragraph (b) in that subsection, omit “authority or”,”
( ) in the words after that paragraph, omit “Trust, Authority or.”
“( ) The Licensing Act 2003 is amended as follows.
( ) In section 5(3) (statement of licensing policy)—
(a) in paragraph (ba) omit “Primary Care Trust or”, and(b) after that paragraph insert—“(bb) each local authority in England whose public health functions within the meaning of the National Health Service Act 2006 are exercisable in respect of an area any part of which is in the licensing authority’s area,”.( ) In section 13(4) (authorised persons, interested parties and responsible authorities)—
(a) in paragraph (ba) omit “Primary Care Trust or”, and(b) after that paragraph insert— “(bb) the local authority in England whose public health functions within the meaning of the National Health Service Act 2006 are exercisable in respect of any area in which the premises are situated,”.”
“( ) In section 69(4) (authorised persons, interested parties and responsible authorities)—
(a) in paragraph (ba) omit “Primary Care Trust or”, and(b) after that paragraph insert—“(bb) the local authority in England whose public health functions within the meaning of the National Health Service Act 2006 are exercisable in respect of any area in which the premises are situated,”.( ) In section 172B(4) (procedural requirements for early morning alcohol restriction order)—
(a) in paragraph (d) omit “Primary Care Trust or”, and(b) after that paragraph insert—“(da) the local authority in England whose public health functions within the meaning of the National Health Service Act 2006 are exercisable in respect of an area any part of which is in the area specified in the order,”.”
“Charities Act 2011 (c. 25)In section 149 of the Charities Act 2011 (audit or examination of English NHS charity accounts), in subsection (7)—
(a) omit paragraph (a),(b) omit paragraph (b),(c) before paragraph (c) insert—“(ba) the National Health Service Commissioning Board,(bb) a clinical commissioning group,(bc) trustees for the National Health Service Commissioning Board appointed in pursuance of paragraph 11 of Schedule A1 to the National Health Service Act 2006, or(bd) trustees for a clinical commissioning group appointed in pursuance of paragraph 14 of Schedule 1A to that Act,”, and(d) omit paragraph (f).”
“( ) The amendment made by section 20(6) does not affect—
(a) the validity of any direction made by an instrument in writing which continues to have effect by virtue of sub-paragraph (2),(b) any power to vary such a direction otherwise than for the purpose of directing the Special Health Authority concerned to exercise an additional function, or(c) any power to revoke such a direction.”
Lord Fowler
“Charges to overseas visitors
(1) The National Health Service (Charges to Overseas Visitors) Regulations 2011 (S.I. 2011/1556) is amended as follows.
(2) In regulation 6 (services exempted from charges) for paragraph (e) substitute—
“(e) the diagnostic test for evidence of infection with the Human Immunodeficiency Virus (HIV) and counselling associated with that test and its results;(ea) all other services for the treatment of HIV provided to an overseas visitor who has been present in the United Kingdom for a period of not less than six months preceding the time when services are provided;(eb) treatment for sexually transmitted infections other than HIV;”.”
Lord Fowler
My Lords, I have the slightly unusual advantage in proposing this amendment in that not only do I find that the arguments I will be using have already been set out in the press, but also that we are told how the Government intend to respond. I am extremely grateful to the Daily Telegraph for the information, and I only hope that it is correct. I also hope, as my noble friend Lady Cumberlege so rightly put it, that at the moment the Government are on a roll so far as these things are concerned. The background to the amendment is clear: it is about promoting better public health. That was also the message of the recent Lords Select Committee report on HIV/AIDS in the UK. I was chairman of the committee, and three of its members have added their names to this amendment, which reflects one of the proposals made in the report.
The general position is that more than 100,000 people in this country are now living with HIV. The number of patients has trebled in the past 10 years, but, just as serious, around a quarter of those who are infected do not know their condition. So we have 25,000 people in the community who are ignorant of their condition and who by definition are not taking the treatment that is available. They are risking their own health and lives and, above all from the public health perspective, they risk passing on and spreading the infection further. If this is put into financial terms, every extra person who is infected in that way will, over his lifetime, cost around £300,000 in medical treatment. We should remember that the National Health Service is already spending over three-quarters of a billion pounds a year on drugs alone for the treatment of HIV. So from every point of view, personal and financial, a new emphasis needs to be placed on prevention. I underline that the whole intent here is to prevent the further spread of HIV in England, which I believe would be much to the public benefit.
The amendment concentrates on one important, albeit limited, area where we can make progress. For conditions such as TB and hepatitis, treatment on the National Health Service is already given absolutely free for anyone in the country whatever their residence status, whether they live here permanently or are in this country for some other reason. The public interest is that the infection should be contained, and the same is true of all the sexually transmitted infections, including HIV, with the following exception. There is a group of patients where treatment is not free and where instead the National Health Service tries to make a charge. This group includes, for example, the young student from overseas with HIV who happens to be here for a short stay, or the failed asylum seeker who has been allowed temporarily to stay in the country because his own country may be too dangerous, or the undocumented worker. They are exceptions and, here, a charge is attempted. I say “attempted” because, in the vast majority of cases, these people have no resources in any event—some are virtually destitute. So we get the worst of both worlds. The National Health Service never gets any money, but the story nevertheless goes out that those suffering from HIV will have to pay, which obviously deters people coming forward for treatment and does the exact opposite of what we want in public health terms. There is now very strong clinical evidence that treatment reduces onward transmission and, according to the surveys that have been done, late diagnosis is far greater among people who are liable to charging.
So why do we have this self-defeating policy? The answer seems to be a fear that if we were to say that treatment was free there would be a sudden influx of HIV sufferers from abroad—health tourism, in other words. There are at least three reasons why this is not the case. The first is the position in Scotland and Wales, where treatment is totally free and there has been no sudden increase in overseas visitors to Edinburgh, Cardiff and other such cities. Secondly, my amendment makes it quite clear that there is no prospect of sudden treatment for someone who just flies in. It applies to people who have been in the United Kingdom,
“for a period of not less than six months preceding the time when services are provided”.
That condition can doubtless be met in different ways, although the principle is very much the same. We are not in the business of providing HIV treatment for health tourists—that position is, I think, common to us all. That is not the effect of the amendment and it will not be the result of it.
Thirdly, the whole idea that you can suddenly arrive, pick up three months’ supply of antiretroviral drugs and then fly out is utterly misjudged. The acknowledged experts in the treatment area in this country are the clinicians of the British HIV Association. I asked its chair, Professor Jane Anderson, what the treatment position would be. She gave me a number of possible situations of which I shall take just one. A patient arrives at an HIV service and sees a doctor or nurse and says that he has the HIV infection. He would be fully assessed medically and his background circumstances explored. Reasons for being inside the United Kingdom would be clarified at that stage. Health and social care needs would be reviewed and previous treatment centres identified and documented, and so it goes on. The net result of that is that it is very unlikely that anyone will be given three months’ supply of antiretroviral drugs until the completion of three or six months.
I note two things about what Professor Anderson says there. First, the hospital would for clear reasons check on the immigration status in the UK of the person and seek to clarify it. Secondly, there is no prospect either of someone with HIV getting an instant supply of drugs.
Basically, and very shortly, that is the case. It is not, I stress, opening the floodgates or adding vast extra expense to the National Health Service. Indeed, the cost of the present policy to the National Health Service of every extra individual who is infected—£300,000 over a lifetime—needs to be recognised. We should also remember the considerable additional cost of people being deterred from coming forward who then have to be dealt with as an emergency in an intensive care ward, again at extremely high cost. The amendment makes not only humane sense but financial sense as well.
My point remains. If we are serious about public health and preventing new infections, the amendment should be supported. On the last occasion when we debated this issue the Government were encouraging in their response. I hope that tonight we will hear of action that will be to the benefit of the public in this country. I beg to move.
Baroness Masham of Ilton
My Lords, the noble Lord, Lord Fowler, was chairman of the House of Lords Select Committee on HIV and AIDS. Other members included the noble Baronesses, Lady Tonge and Lady Gould of Potternewton, and me, all of whom are in their places tonight to support the amendment. There is support across the House.
We found that there was a serious problem with people who became HIV positive and were living in England but did not qualify for free medicines. As the noble Lord, Lord Fowler, said, this is a public health problem. If people are HIV positive but do not know it, they can be a danger to others, by infecting them, and to themselves, as late diagnosis is a big problem and very expensive.
Infections are going up but someone on medication is less infectious. HIV/AIDS is an infectious disease. Other people with infectious conditions are given medication, and it is only right and wise that people who are infected with HIV and are living here should receive free medicines. HIV has not gone away—it is still increasing—and I hope that what we hear tonight will be confirmation of what we have heard in the press.
Baroness Gould of Potternewton
My Lords, I had a long speech prepared but I have decided to reject it on the grounds that what we will hear tonight will be sound common sense. At the end of my speech on Second Reading I said that we would expect sound common sense, and all the indications are that this will happen. I sincerely hope that that is the case. I am going to make a very short contribution tonight—possibly the shortest I have ever made in your Lordships’ House —and make two specific comments. I have argued and campaigned for this change for many years and, as I say, I hope that I will be able to say thank you.
Not only is this a health issue that will protect the public and bring HIV treatment in line with other infectious diseases—it will save valuable NHS resources in the long term. Principally, however, it is absolutely wrong to discriminate against any section of the community, as has been happening since this rule was first brought in in 2004. There is no question but that universal access, which this regulation will introduce, will be very important in ultimately reducing the cost to the NHS and in making it easier to have early diagnosis, thereby reducing onward transmission and guaranteeing hospital treatment if that is required. No deterrent should be put in the way of reducing transmission and treatment. I hope that that will now cease.
I hope, finally, that the concept of HIV tourism has been accepted as the myth that I have always believed it to be. I hope I am right in saying that I can genuinely thank the Government for a change to this rule. I dread the thought that the Minister is going to stand up and say the wrong thing now—I hope that that is not the case. I also want to thank those HIV organisations that, along with me and others, have campaigned for this change for many years. It has been a long and hard battle trying to persuade people that what we are asking for is, in many ways, not a big issue, although it is for those who are affected by it. Again, I can only say thank you, given that we are perhaps going to get regulations that will change that.
Baroness Finlay of Llandaff
My Lords, I did have a speech prepared in support of this amendment, based on the Welsh experience. However, after being woken by the “Today” programme telling me about a debate that we had not had—or that I thought I might have perhaps slept through—and announcing how the Government had responded in a way that I could not recall, I decided simply to bin my speech and live in hope. That is how we all are at the moment. We await the Government’s response to the amendments.
Baroness Thornton
My Lords, perhaps I may just say that when I was a Minister this was one of the few battles that I had and lost in the department. I shall be very glad if the noble Earl has had the battle and won—congratulations. I also say well done to all those who have been campaigning on this issue, particularly my noble friend Lady Gould.
Baroness Northover
My Lords, I am the lucky one who has drawn the long straw on this issue and I am very grateful to my noble friend Lord Howe for allowing me to have that long—rather than a short—straw. I am especially grateful to my noble friend Lord Fowler for bringing back this important issue. Again, I pay tribute to his enormous commitment in improving HIV services for all and, of course, to the outstanding work he did to protect the public from infection.
As I advised in Committee, the Department of Health has now concluded its review of the current policy, under which some overseas visitors are excluded from free HIV treatment. The review considered many issues, including the public health and economic arguments for providing free treatment. We also noted the recommendation and findings on this in the No Vaccine, no Cure report, published last year by the House of Lords Select Committee on HIV and AIDS in the United Kingdom, chaired by my noble friend Lord Fowler.
Since the debate in Committee we have also taken account of the views of other government departments with an interest in this issue and I am pleased to report that the Government have agreed to support the change that this amendment proposes. The evidence on the public health benefits of HIV treatment is compelling. Research published last year, and subsequently reviewed and endorsed by our own Chief Medical Officer’s expert group, shows that treatment reduces infectivity and onward transmission by up to 96 per cent. Reducing transmission will reduce the risk of new infections in the wider UK population and, as noble Lords have said, reduce the NHS costs associated with treating late diagnosis of HIV. Around half of new HIV diagnoses in the UK are diagnosed late; that is, after HIV treatment is clinically recommended. As the noble Baroness, Lady Masham, said, late diagnosis results in increased mortality and morbidity and more expensive treatment.
As my noble friend Lord Fowler said, it is estimated that there are 91,000 people living with HIV in the UK, of which one-quarter are unaware they are infected, which means they can continue to transmit HIV to others. Without access to treatment upon diagnosis there are no or few incentives for testing. Amending these regulations will remove this barrier. It is also worth noting that the knock-on effect of improved public health protection for HIV is that reduced onward transmission will itself reduce the number of new cases within the overall population. The noble Baroness, Lady Gould, made reference to the importance of all of this. Earlier diagnosis, resulting from the testing of those previously put off by the prospect of charges, will reduce the number of late cases with more complex emergency healthcare needs. Together these benefits should reduce overall NHS costs significantly over the longer term.
Therefore, we agree that where clinically necessary we must provide HIV treatment, free of charge, to all who are present in the country, irrespective of their residency status. In doing so, this actually does no more than to bring HIV treatment in line, as others have said, with that for all other major communicable diseases, such as TB and hepatitis, and for all other sexually transmitted infections for which treatment is free without a qualification period. However, my noble friend’s amendment as drafted proposes to include a residency qualification period of six months for HIV treatment. I understand why he put that provision in. Our view is that such a limitation could compromise our primary public health objective and that therefore there should be no such exclusion. However, I recognise that my noble friend had included this limitation to address wider concerns about attracting others to come here for treatment. We share those concerns.
The NHS is, and must remain, a national not an international health service. While it should also provide for the emergency and humanitarian needs of others, we are clear that in implementing this change we must avoid creating an incentive for people to travel to the UK solely for the purpose of free HIV treatment. In fact, they should not have to; there has been huge progress globally on increasing access to free or subsidised HIV treatment. Some African countries have achieved universal treatment coverage. Average treatment coverage in Africa has increased to almost 50 per cent, with even higher treatment coverage in eastern and southern African. While the different models of healthcare systems in other countries make direct comparisons difficult, research suggests that free HIV treatment is available, regardless of a person’s residency status, in France, Spain, Holland, Italy and Portugal. The noble Lord mentioned the situation in the rest of the United Kingdom.
The Department of Health is already in the process of drafting, with HIV clinicians and others, new clinical guidance to support implementation in a fair and consistent manner. This will limit the extent of immediate access to drugs after a person is diagnosed and allow for continued review of the duration of any drug supplies before another visit is required. So it simply will not be the case that tourists can get off the plane and access immediate long-term supplies of drugs. If clinicians identify a person who is in the country just to receive free treatment, the NHS will not provide it unless there are exceptional circumstances, such as extreme infectiousness or pregnancy. Treatment for any conditions other than HIV itself remains chargeable.
Furthermore, we will continue to monitor any change in new HIV diagnoses in the UK of HIV infections acquired abroad. We will strengthen our current monitoring and collect additional anonymised data on residency status that will help to identify any abuse. In addition, we will maintain existing stringent procedures to check for fraudulent registrations at GUM clinics. It will also remain the case that receiving HIV treatment will not be sufficient to overturn an immigration requirement to leave the country and there are no provisions under the Immigration Rules for a person to travel into the UK in order to access the NHS.
To conclude, I am very grateful for the opportunity to discuss this important issue again and I am very grateful to noble Lords around the House for all their work over a number of years. I pay tribute also to the noble Baroness, Lady Thornton. This is a very sensitive issue and I appreciate the constructive way that people have dealt with it. There is a compelling public health case in support of this amendment which we cannot ignore. However, while safeguarding our overriding responsibility for public health, we are clear that the change this amendment proposes should not be seen as an incentive for travel to the UK for the purposes of obtaining free HIV treatment. We will therefore be introducing strong safeguards in our front-line procedures in clinics to address this.
Having said that, the Government support the change that this amendment proposes but I am asking my noble friend to withdraw it for now, for three reasons. First, on a technical point, the proposed change is to secondary regulations. It is not normal procedure to amend such regulations through a primary Act. Secondly, as I have indicated, the amendment includes a six-month exclusion period that we do not support. Thirdly, the department needs some time to finalise the clinical procedural safeguards and monitoring processes that I have set out.
However, in seeking withdrawal, I offer on behalf of the Government an absolute commitment that the department will introduce a statutory instrument to amend the current exemption, so that the exemption from charges for treatment of sexually transmitted infections will include HIV. The change would be effective from October this year, and we would anticipate laying the amending SI before the Summer Recess to achieve that effective date. As my noble friend Lord Fowler said, this makes economic and human sense. I hope that my noble friend will understand and agree to the process that I have proposed as the most effective way of delivering the mutually desired outcome of his amendment, for which he and others have long campaigned.
Lord Fowler
My Lords, let me say first and foremost that I am extraordinarily grateful, as I think all who have signed this amendment are, for that reply and the way in which my noble friend gave it. We are grateful for the absolute commitment that she has given. I have had commitments before; I do not think I have ever had an absolute commitment, but I do not think that there is any prospect of withdrawal from it and I am grateful for that. I thank the Ministers for all that they have done. Perhaps I might also thank the public health officials, who I know have worked extremely hard to get a sensible outcome on this. We do not often thank the officials in this House, but in this case I will.
I thank the noble Baronesses, Lady Masham and Lady Finlay, both of whom spoke, and of course I thank the noble Baroness, Lady Gould, who has long campaigned on this issue. As she said, there are very important organisations which have campaigned and put forward proposals over the years. The National AIDS Trust has taken a lead, as has the Terrence Higgins Trust and the British HIV Association. All of them have spoken with the same voice and their campaign has gone on not just for a few months but for six, seven or eight years. This is an extraordinarily good culmination to all those efforts. I congratulate again the Government. It reflects great credit on them and on the Department of Health that they have accepted the case and that common sense, frankly, has triumphed.
I would just add this to my noble friend. I notice that the Terrence Higgins Trust produced a document called HIV and Sexual Health: 12 things the Government can do. They have done one of them now with an absolute commitment. It would be wrong for me to say that they still have 11 to go, as I think they have done some of those as well, but there are other things to do in this area. It is an important area of public health. It does not get the public attention that it deserves but in my view it is absolutely crucial. I congratulate the Government and thank them for their reply. I beg leave to withdraw my amendment.
Baroness Cumberlege
“Public Health England
(1) Public Health England shall be an executive agency engaged in the exercise of public health functions accountable to the Secretary of State.
(2) Public Health England shall have a board chaired by an independent chair.
(3) The board shall have a majority of independent non-executive directors appointed by the Secretary of State.
(4) Any appointment of the independent chair or independent non-executive directors of Public Health England shall be made by the Secretary of State after consultation with the Faculty of Public Health and such other bodies as the Secretary of State considers appropriate.
(5) Public Health England shall be able to—
(a) undertake independent research;(b) bid for funding for research from research councils, charities and national and international funding agencies;(c) publish research findings;(d) tender for contracts, including research for work related to the functions of The Agency.”
Baroness Cumberlege
My Lords, this amendment refers to the setting up of an executive agency, Public Health England. I thank noble Lords who have put their names to this new clause. I sense that there is a spirit of generosity on the Front Bench tonight and I hope that it will not evaporate before we conclude this debate.
Nowhere in the Bill is Public Health England mentioned. The information comes to us not through the Bill or its schedules but through the White Paper Healthy Lives, Healthy People. It therefore has no legitimacy in primary legislation but we know that it is the intention of the Government. We are told that Public Health England will have a mission across the whole of public health: protecting the public from health threats; improving the healthy life expectancy and well-being of the population; and improving the health of the poorest, fastest. Public Health England is to be an advisory service with a civil servant as the chief executive—there is no mention of a board, just the chief executive. I find this extraordinary. As the noble Lord, Lord Warner, mentioned in Committee, this model flies in the face of the UK’s corporate governance code, which states:
“There should be a clear division of responsibilities at the head of the company between the running of the board and the executive responsibility for the running of the company’s business”.
If that is important for the corporate world, how much more important is it for safeguarding and improving the nation’s health?
What is being proposed has no division between the board and the executive, because there is no board. How strange. No, not strange—not right and not good enough. The role of the board is essentially to challenge the executive, to ask awkward questions, to be independent and to provide oversight, leadership and vision. This poor executive is an orphan; he or she is operating without a parent. In the model proposed, Public Health England is in the cosy embrace of the department, with a civil servant directly accountable to the Secretary of State. It is a model that produces a fire blanket to extinguish any spark of innovation or risk-taking.
Despite recent revelations I am a huge admirer of the Civil Service, but I think that your Lordships will agree that the people who enter it are not the world’s greatest entrepreneurs or risk-takers. If they were, we would be in trouble; that is not their role. That is recognised in the department’s operating model and endorsed by my noble friend Lady Northover in her letter to us dated 21 December, where we learn that there are to be three non-executive members—note, non-executive—not directors. Theirs is not to direct, unlike the new Commissioning Board, or indeed NICE or other government agencies, but to provide independent advice and support. Support is comforting and advice can be ignored; neither element has clout. However, these members are to be trusted, since one will chair the agency’s audit and risk committee.
I suggest to my noble friend that here is an opportunity to make the non-executive members directors and to appoint one as the independent chairman of the agency board. I hope that my noble friend will consider this and meet us, along with other Ministers, in order to discuss this further—there is an opportunity before Third Reading—so that we can see what progress we can make.
The essence of public health contains the basic principle of social justice. It is to ensure that people have access to the essentials for a healthy and satisfying life. To achieve that often involves conflict with Government. As the Secretary of State states in his foreword to the White Paper, we need,
“a radical shift in the way we tackle public health challenges. We have to be bold because so many of the lifestyle-driven health problems we see today are already at alarming levels. Britain is … the most obese nation in Europe. We have among the worst rates of sexually transmitted infections recorded, a relatively large population of problem drug users and rising levels of harm from alcohol”,
and he goes on. Nobody can challenge the Secretary State’s ambition or commitment to public health; it is quite remarkable. He goes on to say:
“The dilemma for government is this: it is simply not possible to promote healthier lifestyles through Whitehall diktat and nannying about the way people should live”.
He is 100 per cent right. That is why we need an independent board that can give unpopular messages straight to the public—a board that can check the veracity of research, unfettered by political pressures. It is a matter of trust—the public’s trust that they are not being manipulated by politicians of any colour; the trust of would-be research funders that their funds are safeguarded by an independent organisation; and trust that Public Health England has the well-being and safety of the public at heart.
BSE demonstrated the importance of scientific advice being seen to be impartial and free from political influence. The episode had a lasting impact on public trust. Independent experts and the medical professions are far more likely to be trusted, and their advice acted on, than any Government. A recent Ipsos MORI poll found that 93 per cent of the public felt that it was important to have an independent organisation providing advice on protecting people from new diseases and environmental hazards, and helping health services to prepare for and respond to emergencies. That is an incredibly high level of trust, especially when it is compared to trust in politicians. Only 14 per cent of the public think politicians tell the truth and I am sorry to say that only 17 per cent trust government Ministers. Our present Ministers on the Front Bench are excluded from this.
I am very grateful to noble Lords who have put their names to the amendment, which seeks to ensure that Public Health England, as an executive agency, is accountable to the Secretary of State. It will have a board with an independent chair and non-executive directors appointed by the Secretary of State after consultation with the Faculty of Public Health and such other bodies as he considers appropriate. It will undertake independent research and will be able to bid for funding from research councils, charities and national and international funding agencies. It will publish its findings and tender for contracts, including research contracts, for its related functions.
In Committee, the noble Lords, Lord Turnberg and Lord Patel, among others, expressed concern at the abolition of the Health Protection Agency. It is a much admired, non-departmental public body, which is soon to be abolished. The noble Lords expressed deep concern about the future funding of Public Health England and its ability to finance and carry out world-class research.
In her letter, my noble friend Lady Northover states that,
“the funding rules of intergovernmental organisations such as the European Union may limit the capacity of an Executive Agency to apply directly to them for research funds”.
The position is not clear and the Government are in the process of clarifying it. I ask my noble friend: has the situation been clarified? This is critical, as the HPA currently derives more than half its annual operating costs from external sources. It cannot attract and retain world-class researchers without the necessary resources and taxpayers will not be forgiving if more is demanded of them to fill the void. Therefore, I urge my noble friends and the Secretary of State to agree to the proposed new clause.
The Secretary of State has suggested to me that the Chief Medical Officer should chair the board but that is not a solution. The CMO already has two important jobs—those of being CMO and chairing the NIHR. Nor does that solve the problem of independence. Therefore, I hope my noble friends will reconsider and put forward an acceptable proposition for noble Lords to consider. I beg to move.
Lord Beecham
Lord Beecham
My Lords, as the noble Baroness might have said, but did not quite, Public Health England has been conjured out of the ether rather than having been approached in the way one might normally have expected as regards a subject to be included in the Bill. The body constitutes a significant change of policy and direction which ought to have brought before us by the Government and not left to the noble Baroness and others to raise as a consequence of their failure to do so.
It is instructive to look at the comparison between the executive agency model which the Government have chosen to adopt and the special health authority model to which my amendment refers. I say immediately that I agree entirely with the noble Baroness’s analysis of the situation as it will obtain under the Government’s proposals—not legislative proposals—in terms of the independence of the organisation. I share many of her doubts about other aspects, including the impact on the income which is currently derived—to the extent of, I think, £150 million a year—by the existing organisation: namely, the Public Health Agency.
The critical definition of the role of Public Health England was provided in a debate in the House of Commons by the Minister of State, Paul Burstow, who said:
“In legal terms, Public Health England and the Secretary of State are the same thing, and Public Health England will not be provided for in primary legislation”.—[Official Report, Commons, 7/9/11; col. 412.]
That set the tone of what has subsequently emerged as the Government’s policy. There are Cabinet Office guidelines on the attributes of executive agencies. They are effectively threefold. The first is that an executive agency is independently accountable within the government department. Secondly, an executive agency has to be financially viable. Thirdly, and critically, executive agencies should be,
“clearly designated units … which are responsible for undertaking the executive functions of that department, as distinct from giving policy advice”.
One would imagine that the giving of policy advice in the area of public health would be a prime function of the body charged with the responsibilities that we anticipate will fall to Public Health England. As an executive agency, it would not be in a position to offer that critical element which is so indispensable to a proper development of policy and monitoring of policy in this arena.
As to the structure of the organisation, the noble Baroness has rightly referred to the curious proposal that the chief executive will establish an advisory board. Public Health England’s Operating Model states:
“The Chief Executive will establish an advisory board to provide external challenge and expertise”.
I stress “external”. The most recent document, with the snappy title Building a People Transition Policy for Public Health England, states in terms that:
“Staff in Public Health England will be civil servants whose conduct will be governed by the Civil Service Management Code”.
It goes on to say, as the other document indicated, that there would be,
“an advisory board to provide external challenge”,
and the,
“current intention is that the chief executive will chair the board, which will”,
as the noble Baroness indicated,
“include at least three non-executive members”.
That is the model that the Government seem to prefer. However Public Health England will have a huge role. Its incorporation within the department will virtually triple the size of the department. It will have enormous responsibilities, ranging from managing disease outbreaks to running specialist reference laboratories and regional laboratories, and providing—critically—information and intelligence support in respect of, for example, cancer registries and public health observatories. These are massive responsibilities and there will be no legal or constitutional separation from ministerial control.
In this arena, as we debated and determined when we were talking about the position of directors of public health within local government, there is a critical need for independence. I am grateful to the Government for reinforcing this—it is to be seen in the arrangements made for local government. However, what is good for local government in this respect does not appear to be good for central government because that independence is patently lacking. I will allude to the position of staff as civil servants a little later.
Contrast that model of the executive agency with the position of special health authorities. They are defined as,
“health authorities that provide a health service to the whole of England”.
They are exemplified by the National Blood Authority, and,
“are independent, but can be subject to ministerial direction”.
There are 10 such bodies at the moment, including the Health Research Authority, the National Treatment Agency and the NHS Litigation Authority. Ironically, they will include the NHS Commissioning Board when it is formally constituted. The employees are public servants, not civil servants, and are not therefore subject to the Civil Service Code. That has some interesting implications.
I must refer to the recent case of Professor John Ashton of Cumbria—a distinguished director of public health who had the temerity to join 400 of his professional colleagues in writing a letter, under the auspices of the Faculty of Public Health, critical of the Government’s proposals in this area. He received a rebuke from the primary care trust that employs him. I do not know whether or not he is right, but he believes that it may have been instigated by the department. I know that the Secretary of State has indicated that he had no role in it, and the noble Earl seems also to be indicating that the department had no role. I accept that of course, if that is what is being said. However, it is interesting that the primary care trust nevertheless felt obliged to take the step of rebuking Professor Ashton and calling him to a meeting. If that is indicative of how a serving, distinguished and leading public servant in the realm of public health is treated under the present dispensation, one wonders what would happen under the regime that is being established, which will be even less accepting of the independent nature of the role of its chief officers.
The question of independence remains very much at issue. I concur with the questions raised by the noble Baroness in Committee about income-raising. We received some rather broad assurances that all would be well. Half of the Health Protection Agency’s income is raised externally—as I said, in the region of £150 million. The Government said that they would set up a mechanism to ensure that income-generation activities of the Health Protection Agency can be maintained. When the Minister replies, perhaps she can tell us how far the Government have got in developing proposals to establish that mechanism.
Finally, when we were debating this in Committee, the argument was advanced—it has also appeared in other places—that because the function is not limited to England, because there are implications for disease control and the like which cannot be confined within the national borders and potentially reach to the territories of the devolved Administrations, somehow we cannot establish it as a special health authority. That seems to me to be hardly an insuperable obstacle. Have any approaches been made to the devolved Administrations to see whether they would have any objection to there being a special health authority? I should have thought that they might prefer a special health authority, given that it would not be, as Mr Burstow, described it, simply a manifestation of the English Secretary of State. I may be wrong, but I wonder whether the Government have taken any steps to ascertain the views of the devolved Administrations. If it were not unacceptable to them, I can see no objection to creating a special health authority for that purpose.
Although I warmly endorse the thrust of the amendment moved by the noble Baroness in having an independent chair, I would go a step further to have a completely independent special health authority in place of what the Government propose. She clearly wants to discuss matters further. I hope that the Minister can give an assurance that she will take the matter away to consider it. I apprehend that it is unlikely that the noble Baroness will seek to take the opinion of a fairly empty House tonight, but there might be an opportunity at Third Reading. This is too important a matter to be left in abeyance for a decision to be reached by default.
I commend the amendment moved by the noble Baroness, but seek to extend it in the way that my amendment describes. I beg to move.
The Deputy Speaker (Baroness Pitkeathley)
It may be for the convenience of the House if I point out that, as Amendments 162A and 162B are amendments to Amendment 162, we have to dispose of them first and then come back to Amendment 162.
Baroness Masham of Ilton
My Lords, I support Amendment 162, moved by the noble Baroness, Lady Cumberlege. It is vital. The Health Protection Agency is admired across the world. It does vital work and important research. We cannot afford to lose something which is so effective. I see no reason why it should not have an independent chairman. It is also a very interesting idea to have a special health authority. When we were taking evidence on the Select Committee on HIV, the Health Protection Agency said that there were many concerned people not just in England but across the world, because they depend on our advice. That is why independence is so important. We cannot lose something so good.
Lord Patel
My Lords, I wish to speak to the amendment in the name of the noble Baroness, Lady Cumberlege. Of course, the amendment of the noble Lord, Lord Beecham, is attractive. It would give Public Health England independence as a special health authority. However, the Government are obviously not ready to accept that, otherwise why would they have abolished the HPA? We would be recreating the HPA if it were a special health authority.
However, I commend the Government on giving public health a high profile, indicating that they want Public Health England to be closely associated with, and be accountable to, the Secretary of State. Public Health England needs to be a body that is nationally and internationally recognised for the authoritative work that it does, as the HPA does now, for the advice that it can give and for attracting high-profile public health specialists. For that, it needs high-calibre leadership. An executive agency that does not have an independent chair or non-executives who will support a high-calibre chief executive will not be recognised or gain people’s confidence.
I have wondered where the model comes from and I think that I now know. I wonder whether the Secretary of State has made a trip to Atlanta, because the model is exactly like that of the CDC. The Centers for Disease Control is a federal executive agency. It has a board but it does not call itself that; it calls itself a committee of advisers. It has a high-profile chairman, and the other non-executives are also high profile. However, it is an independent body. It is able to give policy advice and is not restricted in doing so. However, that model does not quite fit in for England because, apart from being different, our system is different when it comes to having an independent chair with non-executives. Its function is advisory because it belongs to an executive agency and not a special health authority; otherwise its function would be different. That does not preclude Public Health England from having an independent chair, and I should like to hear why the department thinks that it does. I do not see that the accountability changes at all. Public Health England, being an executive agency, will still be accountable to the Secretary of State. In fact, that would strengthen it.
I agree with the noble Lord, Lord Beecham, that executive agencies are constitutionally part of their parent body, and those employed within them are governed by the Civil Service code of conduct. This includes rules and restrictions on what they may say in public, including before Select Committees, about government policy. I think that an independent chair helps to mitigate this. Because of the critical role that Public Health England will have, this will be important. If it is to be an executive agency, it is vital, for the sake of public trust and confidence, that the Government ensure that the arrangements for the new body provide it with a sufficient guarantee of its independence. Only through being perceived to be independent of government will Public Health England establish a reputation for independent, evidence-based and, above all, trusted expertise.
The model of a single independent organisation employing a large number of public health specialists is an attractive one—one which has worked to great effect, as in the case of the Health Protection Agency. We have an agency that is partly independent: the MHRA. The MHRA has an independent chair, it is accountable to the Secretary of State and it gives policy advice. Perhaps the mechanisms for delivering that policy are different, so that it can be managed without breaking any rules. I do not agree that there are EU rules that forbid it to bid for external funds. I would like to hear which EU rules those are. There are mechanisms for getting external funds through a different arrangement, but that does not forbid it to access external funds.
The HPA has built up an international reputation. Its expertise in carrying out contract research is such that it attracts half its current budget from external funding. Are we going to allow a system based on somebody’s whim to end all that? If we are, we will have to ask ourselves a question. Do we want a structure that seems closer to the Civil Service and to politicians but that weakens an internationally recognised body which is powerful and able to deliver the high-profile agenda which the Government have set for Public Health England? We need to examine that. I feel that there is room for discussion so we can arrive at a compromise solution that will achieve all this.
The amendment addresses other issues to which the noble Baroness has already referred, including independent research, published researched findings et cetera, all of which should be possible for Public Health England, as an agency of the department, to accomplish. I hope that the Ministers and the noble Baroness will consider these suggestions. Let us give this serious thought. Let us not reject it out of hand simply because, at half past 10 at night, we do not have time.
Lord Warner
My Lords, I rise because I have added my name to the amendment of the noble Baroness, Lady Cumberlege. I did so because there is a part of me which actually wants to save the Health Secretary from himself. He is going down a path—for good reasons, in some ways—by which he wants to be accountable, through the department, for public health in this country. I understand that, and I understand some of the arguments that the Government have put forward about ministerial responsibility and accountability which were at the heart of some of the thinking behind the Public Bodies Bill. I can understand why that will happen. However, this is an area where science is of the essence. The Secretary of State and the Department of Health’s management and credibility in public health would be seriously damaged if the scientific underpinning of it were not sound.
The CDC in America—and I have been to the CDC in my visits to America—is an executive agency but it is a very special executive agency. It has a route into Congress to secure its funding. That makes it very different from executive agencies in this country. It has that route into Congress because it has a very strong scientific reputation. It is the credibility of its scientific reputation that enables it to be both independent and a part of the federal Government.
We cannot create that quite as easily with an executive agency here. I believe that the Government made a mistake, almost in a casual way, by abolishing the Health Protection Agency without being sure that they had another model to put in its place that would preserve that scientific independence and the kind of funding that the HPA was able to raise. We do not live in such splendid financial circumstances that we can casually toss away £150 million a year—which is the danger that we are in. I have not yet heard assurances from the Government about how they will protect access to that funding, and how they will protect the ability of people working in Public Health England to undertake independent research and be sure that their findings will be published without being censored in any way. We need absolute guarantees on that, and they should be in the Bill. That is why the amendment of the noble Baroness, Lady Cumberlege, is so convincing. I would prefer to have a special health authority, if we thought we could get one. We have compromised by going for an executive agency. However, the agency must have the kind of dimensions that are set out in Amendment 162.
I will say a few words about the issue of the chair. I heard the story that the noble Baroness, Lady Cumberlege, mentioned—namely, that the Secretary of State would be interested in the Chief Medical Officer being the chair of the committee overseeing the work of Public Health England. I am a member of the Science and Technology Committee. In two inquiries we came up against the issue that in the Department of Health, uniquely across Whitehall, we have a Chief Medical Officer who is also the Chief Scientific Adviser to the Government. Both jobs seem capable of keeping someone gainfully and happily occupied full-time for most weeks of most years. Adding the chairmanship of Public Health England would be an incredible proposition. There are already concerns in the Science and Technology Committee about combining the posts of CMO and Chief Scientific Adviser. There is an unresolved issue about how we will proceed on that. However talented Dame Sally Davies is, we do not want to muddy the waters further by asking her to take on the chairmanship of Public Health England.
We need to get to the bottom of the guarantees that are required to preserve the integrity, scientific independence and public credibility of Public Health England. If we are to have an executive agency, we need something very like what is proposed in the amendment of the noble Baroness, Lady Cumberlege. I hope that the Government will accept it and give us some certainty that the money that the HPA has raised in the past will be guaranteed as something that the new executive agency, Public Health England, will also be able to secure.
Baroness Jolly
My Lords, I will speak very briefly, because a lot has been said on this amendment, to which I was happy to add my name. I welcomed the amendment and the structure that it laid out. I am sure that my noble friend Lady Cumberlege will address the amendments to the amendment.
The issue is one of culture. The culture proposed by the Government does not achieve the desired vision for Public Health England. An executive agency is proposed that will be independent, able to speak out without check and research as it thinks necessary, with an independent chair and non-executive directors. At the beginning of Committee, I met the president of the Faculty of Public Health. In advance of this debate, I rang her this week and we spoke again. She expressed her anxiety about the structure proposed by the Bill.
The role of Public Health England should be to implement the policy made by the department. It should also have the opportunity to influence that policy. Clearly, the Government’s structure does not allow for that. I would really welcome an explanation from my noble friend about the rationale for favouring an organisation that is lacking in independence and that therefore will also lack in public and professional trust.
Lord Turnberg
My Lords, I am afraid that my name is not attached to the amendment moved by the noble Baroness, Lady Cumberlege. I was not quick enough to get in the queue of people who wanted to get their names on this, but I have been banging on a little about the disappearance of the HPA and the need for an independent body just as is described in this amendment—and even better in the other amendments seeking a special health authority. I suppose we are not likely to get that this evening but we may be able to get somewhere with Amendment 162.
What I find very difficult to understand is why the Secretary of State would want to take this on. Having chaired the PHLS and then the HPA and now Public Health England, which is an even bigger body with even more responsibilities and a whole host of practical activities—scientific, laboratory, epidemiological—why would a government department want to take that on? Is it that it did not trust the HPA? Is it to save money? Did the HPA in some way fail? What is the rationale for the Secretary of State to want to take it inside the department and lose that level of independence, that ability to look outside and that facility to take advice from independent chairmen and members of the board?
If the department wants this job done—and I do not doubt that it wants this job done very well indeed—it cannot expect to do it as well within the department as an agency that was directly responsible and directly answerable to the Secretary of State but had that degree of independence that would give confidence to the public and the profession that it was doing a good job. I find it difficult to imagine why that cannot be done, and I do not understand the reasons why not.
Baroness Finlay of Llandaff
My Lords, I also did not put my name on this amendment because there was not enough space for more than four names.
I have a concern that the Health Protection Agency itself may have been a bit like a prophet in its own land and that it was not recognised fully until now, when we see its disappearance, just how important the work is that it has been doing, both nationally and internationally. Apart from already earning money for the UK, its potential to carry on doing so in the emerging large economies in other parts of the world and expanding its scientific input is enormous. It has the role not only of public health but of anticipating what threats may emerge in the future, particularly in the range of toxins that it looks at and studies.
These amendments seem to solve a problem that we have all heard about. We have all been at meetings; we have all met with the relevant people. I really hope that we will not just get told that this cannot happen for a variety of reasons. The amendments seem to be solving a problem that has only been created as a result of these changes. I cannot see that there is anything to lose, except that if the amendments are not accepted we might lose the capacity to earn international research funds in the future.
Baroness Northover
My Lords, noble Lords have raised a number of issues regarding Public Health England, many of which we discussed in Committee. Both then and today, we heard serious points very cogently argued, which we greatly appreciate. We have considered all these issues very carefully. Since Committee stage, the department has published more detail on the new public health system, including its operating model for Public Health England. The views expressed in Committee influenced the tone of those documents, and I hope that I can now reassure noble Lords that our proposals will give the agency the operational independence that it needs to become the leading organisation of its kind in the world.
The first point I want to stress is that Public Health England will function openly and transparently. Its operational freedom will be formalised in a clear and published framework agreement between it and the department. My noble friend’s amendment proposes that the PHE board must have a non-executive chair and a majority of non-executive members. We have considered this at length and understand what the amendment aims to achieve, but we do not agree that this is the best option.
The Public Body Review was clear that Ministers should take more responsibility for arm’s-length bodies. Cabinet Office guidance is also clear that nothing should undermine the direct accountability of an agency chief executive to the relevant Minister. We believe that there are sound and pragmatic reasons underlying that position, which could be put at risk by a governance structure dominated by non-executive representatives.
The public will look to the Secretary of State for leadership and accountability in protecting the nation from threats to health and they will be right to do so. The buck must be seen to stop with him. In the past, public health has too often been pushed to the fringe, which has been recognised by noble Lords. This arrangement brings public health centre stage. Instead of the NHS simply being a treatment service, public health in its widest sense will be central to the new arrangements.
Lord Hunt of Kings Heath
Does the noble Baroness not recall the reason why the Food Standards Agency was set up? The agency was given complete independence because the public had lost confidence in the role of Defra in relation to food safety. On public health issues, surely she can see that when she simply says that it should be a Minister who responds, the risk is that people will lose their faith in the fact that public health advice will not be impartial and independent. The Government are really putting at risk the integrity of the public health advice that is received.
Baroness Northover
I have heard what the noble Lord and other noble Lords have said in that regard. There have been very interesting debates over the role of the Secretary of State in the whole of the NHS. Public health is one part of that. It is interesting to see that in some areas noble Lords would like the Secretary of State to be closer.
Lord Hunt of Kings Heath
Perhaps I may come back on that. Surely, it is very different. In relation to the National Health Service, we have been arguing that because of the need for parliamentary accountability, it is absolutely right that the Secretary of State should have the responsibilities that are now in Clause 1. But here we are talking about critical issues around public health where the need for independence is very important. Having professional advice on issues such as public health is very different from there being direction over the operation of the NHS.
Baroness Northover
As I have outlined, there is independence. It is key to the changes that we hope to put in place in terms of public health that it moves to the centre stage and that the Secretary of State has a much more direct line of sight in terms of promoting public health and the protection of the public. The Secretary of State will lead and have direct accountability for public health, which many people have welcomed.
Inserting an independent chair and board between him and the individual charge for the day-to-day running of Public Health England could blur those clear lines of accountability and undermine the chief executive without enhancing the agency’s flexibility, responsiveness and effectiveness in dealing with threats. This is not to say that the chief executive should not face independent challenge from the board. On the contrary, the board will include at least four independent—
Baroness Northover
This is the Report stage so I hope that the noble Lord has a simple question for clarification.
Lord Warner
My query is a point of fact. The Minister is putting great emphasis on the role of the chief executive. Could she tell the House whether the chief executive has a scientific background which is relevant to public health?
Baroness Northover
Since the chief executive has not been appointed yet, I cannot give the noble Lord an answer. Perhaps I might be able to continue, especially as it is almost 10.30.
As I have said, the board will include at least four independent non-executive members of the highest calibre, bringing experience of public health, local government, the voluntary sector and business. The challenge they provide will be real and impossible to ignore. Public Health England will also have scientific committees set up to provide rigorous and impartial advice. Executive agencies are normally established administratively, without legislation, and that remains our intention in this case. I realise that my noble friend Lady Cumberlege may want to fix Public Health England’s status in legislation to protect it from undue interference. Of course this is a valid objective, but I hope she will accept that the openness with which Public Health England will operate, and the nature of the Secretary of State’s duty to protect health, would deter him from clipping Public Health England’s wings. He would simply be limiting his own ability to fulfil his statutory duties. I also hope that my noble friend will consider whether the model that her amendment suggests is really in the best interests of public health. A significant advantage of the agency option is its flexibility, allowing Public Health England to adapt and stay fit for purpose without amending primary legislation.
The second part of the amendment focuses on research, to which a number of noble Lords have referred. We recognise the value of the research that the Health Protection Agency undertakes now, and the importance of it continuing. The Bill as drafted provides for the Secretary of State to conduct and commission research and Public Health England will exercise those powers. Noble Lords have expressed concern over Public Health England’s ability to secure health protection research funding. We are satisfied that there is no point of principle preventing Public Health England applying for health protection research funding from external national and international partners, including charities and income generation from commercial contracts. I hope that I can reassure the noble Lord, Lord Patel, that Public Health England can also bid for EU funding, subject to Treasury rules. I hope also that I can reassure other noble Lords that there is no reason why these changes should jeopardise the outstanding reputation that the HPA has had in research.
More specifically, I am happy to be able to confirm that funding from the National Institute for Health Research for research into health protection will continue at its current level and that this autumn we will launch a NIHR research call to be awarded to Public Health England and academic institutions in partnership. Publishing public health research will be not only possible under the Bill as drafted but critical, as noble Lords have indicated, in ensuring that the public health community as a whole learns and progresses. It is also worth mentioning that we expect Public Health England’s published data to be subject to the relevant code of practice on official statistics, which imposes strict limits on Ministers’ access to certain information before it is released.
I am afraid that the amendments tabled by the noble Lord, Lord Beecham, while seeking to enhance Public Health England’s independence, would blur the lines of accountability still further. Executive agency status, we believe, provides by far the most appropriate blend of operational independence and clear accountability. When we debated the special health authority model during the Committee stage, I did indeed, as the noble Lord said, refer to its impracticality. Special health authorities are established to exercise functions in relation to the health service in England, whereas Public Health England needs to exercise functions, such as radiological protection functions, in respect of Scotland, Wales and Northern Ireland. I should also point out that the NHS Commissioning Board will not, in the future, be a special health authority.
Lord Beecham
My Lords, I thank the noble Baroness for her reply to my amendment. The noble Baroness, Lady Cumberlege, will no doubt speak in relation to hers. I am afraid that I do not find the response convincing in a number of respects. In the first place, on the status of Public Health England as an executive agency, she did not really deal with the Cabinet Office guidelines, which I remind your Lordships state that an executive agency should be a clearly designated unit responsible for undertaking executive functions of the department that established it as distinct from giving policy advice. If, as I apprehend, it is the intention that Public Health England should give policy advice, it should not be an executive agency. If on the other hand the Government’s position is that it should not give policy advice, it is a significant departure from what we have hitherto understood the role of Public Health England to be and certainly from the current arrangements. That would not be acceptable to this side and, I suspect, to other Members of your Lordships’ House.
In anticipation of the Minister’s reply, I raised the question of income. She referred to the possibility of raising income but did not set out in any detail the proposals which we had anticipated being forthcoming in light of the Government’s previous statement that they would explain clearly how the income-raising capacity of the organisation would be maintained.
Baroness Northover
I thought that I had said clearly that there is no point of principle preventing Public Health England applying for research funding from external national and international partners, including charities, commercial companies, the EU, DH, UK research councils et cetera. There is no reason why this new organisation should not be as eligible as the previous one to apply for that research funding.
Lord Beecham
That evades the question of why the Government said they would be bringing forward proposals in that respect. If it was axiomatic that revenues could be raised in that way, presumably that would have been stated at the outset.
In any event, the further point I anticipated the noble Baroness would raise relates to the devolved Administrations. She referred to the 2006 Act as if that were immutable—which, of course, it is not. If it was thought that the position of the devolved Administrations was in some way a barrier to creating the agency because of the provisions of the 2006 Act, then this legislation could have amended that Act. Again there has been no indication in response to my question about whether this issue has been discussed with the devolved Administrations. As I say, I cannot imagine there would be any disadvantage to them in establishing Public Health England as a special health authority.
I regret that the thrust of my amendment has not adequately been dealt with. In the circumstances, I cannot do more than withdraw my amendment to the noble Baroness’s amendment. I do not know whether she is content with the offer of talks. If I were in her position, I would be asking for a little more than only an offer of talks: I would be asking for some assurance that the Minister will take the matter away and consider it with a view to something happening at Third Reading. Without that assurance I fear that we will get no further forward than we are now—and that is not a satisfactory position for outside organisations such as the Faculty of Public Health, others in the professions or many Members of your Lordships’ House. However, in the circumstances, I beg leave to withdraw Amendment 162A.
Baroness Cumberlege
My Lords, I thank all noble Lords who have taken part in the debate. I have not detected any demurring or a feeling that this was not a useful proposition to put forward; it is extremely important in the nation’s health and should be pursued further.
I thank the noble Lord, Lord Beecham, for his suggestion of a special health authority. I can understand why that is quite appealing but, on the other hand, I am pragmatic. He said that he wanted to take my amendment a step further; I fear that that would be a step too far. I was trying to build on the concession that we had already been given of having three non-executive members. It is a compromise but I believe that politics is about the art of the possible and I thought this suggestion might appeal to the Government.
I thank the noble Lords, Lord Patel, Lord Warner and Lord Turnberg, and the noble Baronesses, Lady Masham, Lady Jolly and Lady Finlay, for staying until this late hour.
Lord Hunt of Kings Heath
My Lords, I declare an interest as president of the Royal Society of Public Health, which I should have done in my earlier intervention. Can the noble Baroness—briefly but taking a little time—say whether she thinks from what she has heard from the Minister that she can now bring this issue back on Third Reading? I was not absolutely sure what the implications of the offer of talks meant in terms of our being able to debate it on Third Reading. I hope she takes it as an acceptance that the matter could come back on Third Reading.
Baroness Cumberlege
Perhaps I may address that in one minute’s time.
I appreciate the commitment of my noble friend Lady Northover to this matter. I understand that the Government are anxious to build on public health, as the noble Lord, Lord Patel, said, and that they take this area with all due seriousness.
Baroness Northover
I assure my noble friend that we do indeed take this area very seriously. We are looking forward to the discussions that will happen with the Secretary of State, my noble friend and others.
Baroness Cumberlege
I thank my noble friend for that. I must say I am not reassured. What noble Lords were saying about credibility in the public mind is very important. There is a perception, whether we like it or not, that departments within Government tend to be closed—not secretive perhaps, but not very accessible to the general public. They have an image, and that perception is a reality in the public mind. Although there is an intention that they should be open and transparent, I am not sure the public see it like that.
On the question of trust, it was interesting that the Office for National Statistics at one time lacked a degree of credibility. People did not trust the figures that were coming out and so the Government of the day reconstituted it with the UK Statistics Authority and set it up in very much the way that we are trying to set up Public Health England. There is another model there. The Food Standards Agency, NICE and a lot of the new organisations—indeed the NHS Commissioning Board—are all being set up with non-executives and independent chairs. It seems really strange that here we have one of the most important new ideas coming forward with the establishment of Public Health England, trying to do something totally different.
I have never taken an amendment to Third Reading, nor have I tested the opinion of the House against the wishes of the Government whom I support. However, I have to say that I feel so strongly about this issue. I very much welcome the talks that have been promised but that does not rule out the possibility—I hope it will not become a reality—of taking this to Third Reading. I hope, if we meet the Secretary of State and our House of Lords Ministers as has been promised, that we will come to some accommodation. This is just too important to be left as it is and we need to take it further. I very much want to reach agreement in the future. It would not be a good idea to test the opinion of the House right now, because we would have a very small vote, but I do want to give notice that I feel strongly and will bring it back at Third Reading. However, as we cannot reach an accommodation at this time, I beg leave to withdraw the amendment.