House of Commons
Prayers
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Oral Answers to Questions
Matthew Hancock (West Suffolk) (Con)
2. What steps he is taking to promote apprenticeships; and if he will make a statement.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
The Government have prioritised apprenticeships. As a consequence, final figures show that in the full 2010-11 academic year there were 457,200 apprenticeship starts, an increase of 63.5% over the previous year. Over the past two years, the number of apprenticeships for 16 to 18-year-olds has increased by a third and that for 19 to 24- year-olds has increased by two thirds.
Matthew Hancock
May I commend the Secretary of State most warmly for what he and his Department have done on apprenticeships? In particular, may I shower praise on the absent Minister for Further Education, Skills and Lifelong Learning, who has driven this programme forward? The number of apprenticeships in my constituency has increased by almost two thirds in the past year, so will the Secretary of State ensure that some of the pre-work training—for instance, at the British Racing School, where I joined an apprenticeship scheme on the gallops—can continue under the new scheme being set up?
Vince Cable
I am happy to be showered with praise by the hon. Gentleman, and I entirely share his appreciation of the work done by the absent skills Minister. Indeed, there has been praise from a more independent source than either of us: I believe that the Chairman of the Public Accounts Committee has, rather unusually, acknowledged the considerable contribution we make through our apprenticeship programme. I am not aware of the anomaly that the hon. Member for West Suffolk (Matthew Hancock) points out, but it is an important one and I promise to investigate it.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Secretary of State knows that Labour Members like apprenticeships and welcome anything that expands genuine, good apprenticeships. But the fact is that if we are to end this inter-generational worklessness in our country, we need a new culture where nobody expects to go into unemployment at least until they are 25—that is the way to go. To change the culture, people need to be in training, education or work—no alternative.
Vince Cable
The hon. Gentleman is absolutely right and I do not disagree with a word he says. The culture is changing; there is a great appetite in business to take on apprentices and among young people to apply for apprenticeships. I am sure that everybody in the House agrees that apprenticeships are important—we are actually doing something about them.
Robert Halfon (Harlow) (Con)
Is my right hon. Friend aware that the number of apprenticeships in Harlow has increased in the past year by 76%? Is he also aware that we have a very strong bid for a university technical school in Harlow? Does he not agree that university technical schools will put young people on the conveyor belt to apprenticeships?
Vince Cable
Yes, I do agree, and we need to acknowledge the contribution that Lord Baker has made. He worked on this idea for a long time before it became fashionable, and it is now being implemented. It is extremely popular with young people and with employers, and the Government are getting behind it with financial support.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I recently visited a number of apprentices in my constituency in apprenticeship week, and I commend the work of Hackney community college in this respect. Interestingly, the apprentices were doing training courses, but a lot of them had no real prospect of a job at the end of their apprenticeship. What can the Secretary of State say about the Government’s plans to convert apprenticeships into long-term employment for these young people?
Vince Cable
The whole point about apprenticeships is that they are training for people in work, which is why they are attractive to employers and to people who apply for them. The normal practice is that people are in work, they upgrade their skills and they proceed. The overall economic benefit to the economy was recently spelt out by the National Audit Office: for every £1 of taxpayers’ money that goes in, the overall economy derives a benefit of at least £18.
Peter Aldous (Waveney) (Con)
3. What steps he is taking to enable small and medium-sized companies to offer high-quality apprenticeships to young adults.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
We are making it easier and quicker for small and medium-sized companies to take on an apprentice by simplifying and speeding up the process for employers. Additionally, we are making available up to 40,000 incentive payments of £1,500 to help small employers recruit their first 16 to 24-year-old apprentice. A small and medium-sized enterprise review is under way to identify further ways of engaging SMEs in high-quality apprenticeships.
Peter Aldous
Although the apprenticeship grant for employers initiative is welcome in my constituency, where there are many SMEs, does the Secretary of State agree that the scheme would have even more impact if the rule prohibiting the participation of companies that have taken on apprentices in the past three years was relaxed?
Vince Cable
I understand the frustration of employers who have a good record on apprenticeships and feel that they are penalised in such a way. If we had unlimited money, we would meet the hon. Gentleman’s expectations, but the scheme that I have described is restricted to new companies that are taking on apprentices for the first time. It has to be that way for financial reasons, but I would have hoped that companies with a good record in apprenticeships will have seen the benefit of them and will offer them for good commercial reasons.
Derek Twigg (Halton) (Lab)
Terrible youth unemployment figures were released from my constituency yesterday. Companies continue to tell me that they cannot get banks to lend them money. What representations has the Secretary of State made to his colleague, the Chancellor? He promises to ensure that more money is available for small businesses, but what representations is he making to ensure that more money is available so that such businesses can take on more apprentices?
Vince Cable
The Chancellor and I discuss this problem constantly because it is a real issue for SMEs. As a result of the Merlin agreement last year, there was a significant increase in lending to small-scale enterprises beyond what they would otherwise have had. I recognise that it is a continuing issue and I am sure the Chancellor will have some ideas in the Budget about how to extend it further.
Andrew Gwynne (Denton and Reddish) (Lab)
4. What assessment he has made of the level of applications to English universities for courses commencing in September 2012.
The Minister for Universities and Science (Mr David Willetts)
With permission, Mr Speaker, I shall answer this question with Question 17.
Mr Speaker
Order. The Minister will not do so, notwithstanding his extremely good intentions, as the grouping is broken for the very good reason that the hon. Gentleman in question has withdrawn his question. Nevertheless, we look forward to hearing the Minister’s mellifluous tones.
Mr Willetts
In that case, Mr Speaker, I shall reserve my answer to the question before us.
The latest UCAS figures show that 30.6% of UK school leavers applied to university, down from 31.4% the year before but still the second highest on record. This will still be a competitive year for access to university, like any other, as people continue to understand that university remains a good long-term investment in their future.
Andrew Gwynne
I am grateful to the Minister for that reply, but what measures are the Government taking to ensure that the supply of places in 2013 and beyond matches the demand for places at English universities given the drop in applications for the 2012 entry and the confusion over student number controls for 2013 and beyond?
Mr Willetts
We will continue to offer a large number of places at university and they will continue to be very well funded. Indeed, the latest figures from the Higher Education Funding Council for England show that the funding for university teaching will go up from £8.9 billion this year to £9.1 billion next year and £9.6 billion the year after. That money is coming through in fees and loans—not fees that students have to pay up front—to ensure that we have strong, effective universities that can continue to educate many students.
Duncan Hames (Chippenham) (LD)
That is welcome news, but from what my constituents have said one would not judge that from what is said at university open days. Institutions seem still to be seeking to attract students on the basis of their existing facilities, be they educational or otherwise, rather than providing information about value for money for the cost of their tuition. What is the Minister doing to encourage universities to publish data such as drop-out rates, teaching time, contact time with students and student satisfaction rates?
Mr Willetts
My hon. Friend is absolutely right that students need to have access to such information. That is why we have identified the 17 key sources of information to which students attach most importance, and that should be available on Government websites before the start of the next round of university applications.
Mr Ben Bradshaw (Exeter) (Lab)
Is the Minister aware of the double whammy faced by universities such as Plymouth that are losing hundreds of students because of a combination of two of his policies, which are to redistribute 9% of their students to cheaper universities while allowing the elite universities to have unlimited numbers of students who get two As and a B. Will he look again at that policy, which will have a serious impact on the south-west economy?
Mr Willetts
Our policy of saying that universities are free to recruit students with AAB or better without number controls puts more power and choice in the hands of students, which is one of the key propositions of our White Paper. We need to strengthen students in the system to get universities to focus on high-quality teaching and we intend to go further with that proposal.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
The Minister caused unacceptable confusion and uncertainty for students making applications and to higher education institutions last year through his introduction of the core and margin model. Will he take this opportunity to agree with us and to heed calls from across the sector that there should be no further changes to core and margin in the next academic year?
Mr Willetts
We are considering this in the light of the experience that universities are having, but we have made it absolutely clear that the direction in which we want to go is for more choice for students and more flexibility for universities. The timings will depend on the experience of universities.
Stuart Andrew (Pudsey) (Con)
5. What recent progress he has made in increasing inward investment.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
In December 2011 the Office for National Statistics reported a record stock of foreign direct investment in the UK at £731 billion. The Government are determined to continue to improve the UK business environment to make us a global investment location of choice. The recent major automotive investment by Nissan and the expansion of Jaguar Land Rover are very good examples of that.
Stuart Andrew
I am grateful to the Secretary of State for that answer. Attracting inward investment is going to be a key element of aiding our economic recovery. Will he inform the House of any figures he might have showing how the United Kingdom is doing in this area compared with the rest of Europe?
Vince Cable
Britain is the third-best attractor in the world of direct foreign investment and the leading country in Europe. That remains the case; indeed, the position has been strengthened by the decisions we have taken over the past 18 months.
Mr Geoffrey Robinson (Coventry North West) (Lab)
I draw attention to my entry in the Register of Members’ Financial Interests. The Secretary of State knows that this news is very welcome throughout the House and that we are delighted to see new jobs and production coming to the UK. I gather that JLR is doing that at Halewood, as well as Nissan, which is great news. Is there a danger, however, that the money for the investments being supported by the Government could be coming from the regional growth fund? If that is the case, will he confirm that there will be enough funds in it? Is there a danger of the smaller companies that are applying being crowded out? It is a challenge fund, as he knows, and on those grounds even very good and worthwhile projects could be rejected.
Vince Cable
The hon. Gentleman is absolutely right that the regional growth fund played an important part in key decisions such as Nissan’s decision to expand its operation in the UK. There is, of course, a limited amount of money; it is a challenge fund. It is because we recognise that the regional growth fund is a very valuable source of funding that we have extended it by a further £1 billion, and there is currently a new process of application taking place.
Alok Sharma (Reading West) (Con)
We are rightly hearing a lot about the special and essential relationship between the UK and the US this week, but one of the other special and essential relationships the UK has is with India. Does the Secretary of State agree that growing inward investment into the UK from countries such as India clearly demonstrates the success of UK Trade & Investment’s inward investment strategy?
Vince Cable
Indeed, and I am flying out to India tonight to pursue this issue—I think it will be my third visit since I became Secretary of State. I shall be making exactly that point—that Indian investment in the UK is extremely welcome. We are attracting more such investment and leading Indian companies such as Tata and Sahavirya Steel Industries are absolutely valuable to our economic recovery.
Mr Andrew Love (Edmonton) (Lab/Co-op)
But it is not just about increasing inward investment; it is about retaining it. I welcome the Secretary of State’s statement about the automotive industry and the increased inward investment, but there are persistent rumours that there might well be reductions in inward investment in parts of the automotive industry. What actions is the Secretary of State taking to retain that investment and to retain jobs in this country?
Vince Cable
The hon. Gentleman’s starting point was a positive one and a right one. I understand that production in the automotive industry has increased by 20% over the past year, and a lot of that is due to inward investors. If he is referring to uncertainties about the future, I am of course well aware of the problems surrounding General Motors. Within the Government, I am working very closely with the Minister of State, Department for Business, Innovation and Skills, my colleague the Member for Hertford and Stortford (Mr Prisk). I was in the United States two weeks ago talking to the chairman and chief executive about that. I have to say that the Government, the trade unions and the British management have put forward an extremely powerful case not just for staying in the UK but for expanding.
Mr Rob Wilson (Reading East) (Con)
6. What steps he has taken to encourage universities to publish data about the employment of their graduates.
The Minister for Universities and Science (Mr David Willetts)
Improving student information on employment to support informed choice is at the heart of our university reforms. From this September, the new key information set will provide the information that students say they want, including on graduate salaries and employment. Going to university improves job prospects overall, with 84% of graduates in employment compared with 67% of non-graduates.
Mr Wilson
I thank the Minister for his answer. Speaking as a history graduate who went on to be an entrepreneur, I should like to know whether he has a view on why only 3.5% of graduates set up their own business in the first six months after leaving university. What can we do to increase that figure?
Mr Willetts
My hon. Friend is absolutely right that we ought to be doing better on this, and that was one of the tasks that we set Sir Tim Wilson, who has just produced his excellent report. We are doubling the number of enterprise societies to which students have access and we want every university and college in the country to have an enterprise society that helps students know how to do what my hon. Friend did.
Kelvin Hopkins (Luton North) (Lab)
While visiting an engineering company in Luton this week, I was told yet again that companies are finding it hard to recruit British engineering graduates and are having to take graduates from overseas. Are the universities simply not producing enough engineering graduates, or are graduates going to other jobs and working overseas?
Mr Willetts
We are seeing an increase in the number of engineering places in universities, which is very important because it is just what the British economy needs as it rebalances. There is also a challenge on where engineering graduates go, and we of course hope that more of them will work in industry. As we see manufacturing in Britain strengthening, as it is under the coalition’s policies, I am sure that more recruits will go into industry.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
7. What assessment he has made of the ability of other Departments to encourage business growth.
Nick Smith (Blaenau Gwent) (Lab)
18. What assessment he has made of the ability of other Departments to encourage business growth.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
With your permission, Mr Speaker, and assuming that both Members are present, I will answer Questions 7 and 18 together.
All Departments are assessing how they can remove barriers to growth through the growth reviews. That has led to more than 300 actions being identified, and the Cabinet has met twice in the past month to ensure that delivery of these actions is on track.
Mark Lazarowicz
The Minister and the Secretary of State might recall that over a number of months I have called for the headquarters of the Green investment bank to be located in Edinburgh, so it is only right that I record my welcome for the decision to do just that. The Minister’s Department might be supporting the green economy, but other Departments do not always seem to see its value in supporting growth. Will he have a word with the Chancellor to emphasise the importance of supporting the green economy, particularly in the light of some of his recent statements on the matter?
Mr Prisk
I am pleased that the hon. Gentleman is pleased that the headquarters of the Green investment bank will be located in Edinburgh, which is important so that we can get a genuine centre and cluster of green finance expertise, although there was a “but” at the end of his question. I can say to him that the entire Government are committed to ensuring that we develop renewables. Whether in relation to finance or technology, we are committed to making real progress, and in the past 12 months we have done precisely that.
Nick Smith
The Public Accounts Committee has found that small and medium-sized defence contracts, such as those for new armoured vehicles, are being squeezed out by big-ticket items that are over budget, such as aircraft carriers. Will the Minister ensure that the Ministry of Defence backs prime contractors and supply chains, such as General Dynamics UK in south Wales, so that British business can deliver the best equipment and the jobs that we need?
Mr Prisk
Absolutely. Defence Ministers and I regularly discuss that. There is a clear White Paper and a strategy. The hon. Gentleman is right that we need to look at not only prime contractors, but the UK-based supply chain, on which we are making good progress, but we are alert to the danger that larger contracts can sometimes block out some of the smaller opportunities for indigenous UK businesses.
Alun Cairns (Vale of Glamorgan) (Con)
The Department currently administers 48 different business support schemes, many of which have further sub-schemes that run from them, all rightly aiming at supporting and assisting business, and other Departments also run such support schemes. Does the Minister accept that there could well be a need to rationalise some of those schemes in order to simplify the process and take out some of the inefficient bureaucracy behind them?
Mr Prisk
My hon. Friend is right. Two things need to be done: first, we have to cull the schemes that have not worked, a good number of which we inherited, I am sorry to say; and, secondly, we have to ensure that the schemes are easier for businesses to use. We have created a finance finder so that businesses, rather than having to look at which scheme to use—an equity investment, export or loan support scheme—can secure finance with a number of simple questions. We will be developing and launching that app so that every business, small or large, can apply and get the answers they need quickly.
Gavin Williamson (South Staffordshire) (Con)
The International Monetary Fund recently published a report stating that it expects the British economy to grow faster than those of France and Germany. Is not that down to the fact that this Government are cutting corporation tax, reducing regulation and encouraging businesses, such as Jaguar Land Rover in my constituency, to invest? We are making the difference, unlike the Labour party.
Mr Prisk
That was a tricky question. My hon. Friend is absolutely right and is a fantastic supporter of industry. I think that the Labour party, beyond the jokes, needs to remember that 1.7 million people lost their jobs in manufacturing over the 13 years it was in government.
Mr Iain Wright (Hartlepool) (Lab)
The Secretary of State, in his leaked letter last week, wrote that “a connecting thread” in the failure to provide a “compelling vision” or economic growth is
“the need for strategic and long term thinking about supply chains and the role played in them by public procurement decisions,”
but that there is
“no connected approach across Government.”
That is presumably the objective of the advanced manufacturing supply chain initiative, which was launched in December. Almost five months after the launch, however, will the Minister of State confirm that no firms have yet received help because not a jot of progress has been made? In the light of missed opportunities throughout Whitehall, whether in green technologies, feed-in tariffs, trains, Royal Navy tankers or nuclear technology, how on earth does Ministers’ dawdling help British businesses grow and win contracts? No firms helped—yes or no?
Mr Prisk
The point—to answer the hon. Gentleman’s question, if he would like to have an answer—is very simple: we are making good progress on skills, innovation and the supply chain. But is it not right for a Secretary of State to look at progress over 10, 15 and 20 years? Is that not what Governments should do? The Opposition need to bear it in mind, because, if the Labour party in government had looked 10 or 20 years ahead, this country would not be in the mess that we are having to clear up.
Damian Hinds (East Hampshire) (Con)
8. What steps he is taking to ensure universal access to independent and professional careers advice and guidance.
The Minister for Universities and Science (Mr David Willetts)
I congratulate my hon. Friend on his work as chair of the all-party group on social mobility. Social mobility is at the heart of our plans for careers guidance, and I am pleased to confirm that we will publish a document, alongside the launch of the national careers service in April, setting out everything that the Government are doing to ensure that young people and adults have access to information and advice on learning and work, and receive support to move forwards in their lives.
Damian Hinds
I thank my right hon. Friend very much for that answer. It is absolutely true that good information, advice and guidance are essential for social mobility. Will he place a particular focus on disadvantaged youngsters to ensure that their ambitions are not limited, bearing in mind that often the best advice is to “Keep your options open”?
Mr Willetts
That is absolutely correct, and often even the most disadvantaged young people have high ambitions, but they do not know the route to achieve them. That is one of the crucial things that information, advice and guidance can secure, including advice and guidance on the key A-levels that will be needed if they wish to study at university.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I thank the Government for the work done so far. May I encourage Ministers to keep pressing so that all youngsters at school have guaranteed face-to-face careers advice and guidance, and all school leavers and older people have access to careers advice and guidance in their local colleges? The Association of Colleges is very keen on schools and colleges being a place where such information can be provided to all in the community, of all ages.
Mr Willetts
I thank my right hon. Friend for his very important work in that area. The Department for Education will publish statutory guidance for schools very soon, and it will make it clear that schools cannot discharge their duty simply by relying on in-house support or by signposting to a website. My right hon. Friend is absolutely right as well about the importance of face-to-face guidance.
Stephen Timms (East Ham) (Lab)
9. What recent assessment he has made of the UK’s science base.
The Minister for Universities and Science (Mr David Willetts)
Britain’s research base is the most productive among the G8, and the Government are committed to maintaining that world-leading position. That is why funding for science and research programmes has been protected with a flat-cash, ring-fenced settlement of £4.6 billion. On top of the £1.9 billion capital funding announced as part of the spending review, we have since announced a further £495 million of capital investment in science.
Stephen Timms
It is national science and engineering week, and the Minister and I are both taking part in a mathematics event today. Does he agree with his right hon. Friend the Secretary of State, however, in the letter to the Prime Minister that was reported last week, that the Government’s science policy is “piecemeal” and:
“The Technology Strategy Board…is operating on a shrinking core budget and thereby missing valuable opportunities”?
Do we not need a long-term strategy, such as the one that was set out in 2004?
Mr Willetts
The Technology Strategy Board does an excellent job and has a crucial role, and if the right hon. Gentleman looks at the board’s core funding, together with the funding that is available for its new technology and innovation centres, he will see that its funding has increased.
Stephen Mosley (City of Chester) (Con)
The Minister will be aware that Britain produces tens of thousands of enthusiastic and bright science graduates every year, yet the majority of them go into non-STEM—science, technology, engineering and maths—jobs. What can the Government do to ensure that more of these skilled science graduates go into manufacturing and engineering?
Mr Willetts
Ultimately, of course, these decisions must be made by individuals, but we want to make it absolutely clear that students have the opportunity to understand the options available; that is why there is going to be an enterprise society in every university. It is also very important that in the recruitment milk round during the months up until taking their final degrees, students have the opportunity to learn about work in SMEs and work in manufacturing, alongside work in the other classic recruitment areas.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Research undertaken by the House of Commons Library this week shows that our science investment is being cut by 14% by this Government, while Germany and China are increasing theirs. Moreover, it says that the UK is becoming an innovation follower, as one of only a handful of countries in Europe to cut its science investment—and the Secretary of State would appear to agree. In this science and engineering week, will the Minister finally explain why he is damaging our science and engineering base?
Mr Willetts
Given that we had to sort out the mess in the public finances that we inherited from the previous Government, the cash protection for our science budget is evidence of the coalition’s commitment to science. We can be proud of the fact that with only 1% of the world’s population we produce 14% of the world’s most important science articles. We are increasing investment in capital. It is a great pity that the hon. Lady did down what is still the world’s finest science base.
Roger Williams (Brecon and Radnorshire) (LD)
The Government’s investment in the new technology and innovation centres will allow the excellence of UK science to be used to develop commercial technologies. Will the Minister give us a short update on the setting up of these important institutions?
Mr Willetts
My hon. Friend is absolutely right. We will be setting up seven such centres, which will tackle the long-standing problem that we have excellent science in Britain but do not always make the connection between research and its commercial applications. These new centres, all across the UK, will bridge that gap and strengthen our economy as a result.
Nia Griffith (Llanelli) (Lab)
10. What representations he has received on the potential effects of his proposed reform of employment protection law.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
I receive a wide variety of different representations on employment law reform, including from business groups and trade unions that I meet on a regular basis. The reforms aim to give business greater confidence to take on staff, while protecting fairness for employees.
Nia Griffith
Will the Secretary of State confirm that his consultation on no-fault dismissal has been delayed because, as one Lib Dem put it, “Conference delegates will go mental”? If even his own party members are against it, why does he not stand up to Downing street and reject this despicable policy?
Jacob Rees-Mogg (North East Somerset) (Con)
Does my right hon. Friend agree that countries with flexible labour laws have the best growth and those with inflexible labour laws have the highest unemployment; that the more we can do to ease employment by reducing regulation the better; and that this should be done as a matter of urgency, especially in the context of Europe?
Vince Cable
My hon. Friend’s basic premise is correct. I am sure that he has read the recent report by the Organisation for Economic Co-operation and Development, which said that Britain has the second most flexible labour market in the OECD, and that is what we want to retain.
Ian Murray (Edinburgh South) (Lab)
First, I congratulate the new Minister for employment law, the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for North Norfolk (Norman Lamb). I am disappointed that he is not answering this question, but let me put it on record that he has been courteous and constructive in his role so far, and I wish him at least a modicum of success. [Interruption.] That is as far as my generosity goes, I am afraid.
With no plan for growth and consumer confidence at its lowest in decades, the Government are trying to make it easier to fire, rather than hire, people. There is an ongoing pitched battle between the Department for Business, Innovation and Skills and Downing street, with the Secretary of State being dragged kicking and screaming to a no-fault dismissal consultation on which, indeed, a written statement was issued only 10 minutes ago. The new Minister said in October:
“I think it would be madness to throw away all employment protection in the way that’s proposed, and it could be very damaging to consumer confidence”,
and suggested that it was crazy. Does the Secretary of State agree with his new Minister?
Vince Cable
The interesting thing about this controversy is that we are being attacked with such vehemence from the left and the right, which suggests that we are just about in the right place.
Lorely Burt (Solihull) (LD)
We welcome the publication of the Beecroft report today. Leaks reported in the media suggest that something of a fire-at-will culture will be instilled. Does my right hon. Friend agree that, at a time when many employees are suffering an uncertain future and feel vulnerable, that would do nothing for good employment relations or, indeed, for productivity?
Vince Cable
The so-called Beecroft report had a series of recommendations, most of which were sensible and unobjectionable, and are being implemented. Indeed, we are championing some of the recommendations, for example those on visas, in Government. So far, there is one area of disagreement, which relates to the no-fault dismissal issue. We want to strike a balance between making it easier for micro-companies, which have genuine difficulties with staff management because of their small scale, and the danger of creating general insecurity in the labour force. I will proceed on the basis not of ideology or vested interests, but of evidence. That is why we are calling for evidence today.
Sajid Javid (Bromsgrove) (Con)
11. What steps he is taking to promote the status of traditional craft industries.
The Minister of State, Department for Business, Innovation and Skills (Greg Clark)
Our craft industries contribute £3 billion a year to the British economy and are an important source of new apprenticeships. As they have been neglected in the past, the Government have formed the craft skills advisory board to ensure that practitioners have a voice in Government, and have established the craft awards to give our craftsmen and women the national recognition that they deserve.
Sajid Javid
In his absence, may I commend the Minister for Further Education, Skills and Lifelong Learning for the passion that he has shown for our traditional crafts? May I also thank His Royal Highness the Prince of Wales for the interest that he has shown in this area? Does the Minister agree that we should do all we can to encourage more young people to work with their hands as well as their brains, which will not only allow them to earn a decent income, but build their self-esteem?
Greg Clark
My hon. Friend is absolutely right. On the subject of traditional craft skills, the enthusiasm and support of my hon. Friend the Minister for Further Education, Skills and Lifelong Learning are matched only by His Royal Highness the Prince of Wales. Indeed, I understand that the Minister for Further Education, Skills and Lifelong Learning granted an audience to the Prince and that the main topic of their conversation was the importance of traditional craft skills for the future. On that, I think there is complete agreement.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
13. When he proposes to bring in the Groceries Code Adjudicator Bill.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb)
I hope to introduce the Groceries Code Adjudicator Bill into Parliament as soon as parliamentary time allows. The Leader of the House confirmed on 15 December last year that it was a strong candidate for the second Session of this Parliament.
Mr Bailey
Given that the Select Committee on Business, Innovation and Skills was asked to carry out pre-legislative scrutiny on the draft Bill before the summer recess last year, and that over the past six months we have had the lightest legislative programme that I can remember, what reassurance can the Minister give to suppliers that the Government are still committed to introducing the Bill, in line with their manifesto commitments?
Norman Lamb
I can give absolute reassurance to the hon. Gentleman that the Government remain completely committed to implementing the Bill, and that we will do so as soon as parliamentary time allows.
Miss Anne McIntosh (Thirsk and Malton) (Con)
The Select Committee on Environment, Food and Rural Affairs has taken some compelling evidence from growers who have virtually no protection from month to month in their agreements with supermarkets. Will the Minister assure the House that the adjudicator will have powers of investigation and the power to levy fines on those who do not obey the code?
Norman Lamb
The adjudicator will have powers of investigation. On the question of fines, there will be a reserve power in the Bill. However, the Government take the view that the other powers, particularly the power to name and shame supermarkets, should be sufficient to have a significant effect on behaviour. If they do not have that effect, there will be the reserve power to introduce fines.
Mark Durkan (Foyle) (SDLP)
Will the Minister ensure that when the Bill emerges, it has the necessary legislative consent motion from the Northern Ireland Assembly, so that it can apply across the jurisdiction?
Angela Smith (Penistone and Stocksbridge) (Lab)
14. Whether his Department plans to develop an industrial strategy; and if he will make a statement. [R]
The Secretary of State for Business, Innovation and Skills (Vince Cable)
Yes, I am developing an industrial policy, and I will continue to work closely with my ministerial colleagues on that important work. In speeches on 27 February and 6 March, I set out what that policy should be and where our future industrial capabilities should lie.
Angela Smith
In his leaked letter last week, the Secretary of State said:
“Where we know big investment decisions are going to be made…we need to put in place a strategy actively to plan how we will strengthen the supply chain”.
Does he therefore agree that a good start would be to work towards ensuring that the new Ministry of Defence tankers are built in Britain, not in Korea, and that our new nuclear reactors are made in Sheffield, not in France?
Vince Cable
A great deal of progress is being made in developing British supply chains that were whittled away to a disastrous extent with the decline of manufacturing under the last Government. If the hon. Lady looks at what is happening in the car and aerospace industries, for example, she will find that a lot of supply chains are coming back to the UK. As for her last point, on the nuclear industry, I think she is aware that the company that she represents is a regional growth fund recipient.
Tony Lloyd (Manchester Central) (Lab)
19. The Secretary of State will not know this, but a high-tech company in my constituency that spawned out of Manchester university was told by its would-be venture capitalists that unless it moved from Manchester to within the golden triangle of Oxbridge and London, it would not obtain finance. Will he look into that financial gap, which has been around for a long time and prevents the dynamic growth of industry, particularly in the northern regions?
Vince Cable
As it happens, I was in the hon. Gentleman’s constituency yesterday, and I met groups of businesses with similar concerns. He is right that there is a long-standing financing gap, particularly for small and medium-sized companies looking for risk capital. The business growth fund, which is a private sector initiative rather than Government money, is already beginning to fill that gap. It is headquartered in Birmingham but, I think, has substantial outreach into Manchester.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
15. What his policy is on the retention of post offices in villages.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb)
Government funding of £1.34 billion is in place to modernise and maintain a national post office network of at least 11,500 branches, with particular regard to retaining village post offices in recognition of their important social and economic role in the communities that they serve.
Michael Connarty
The Minister will recall that we went over this in some detail on Tuesday, relating to the closure of the sub-post office in Torphichen village. Can he assure me that he will contact Paula Vennells, the chief executive, and her counterpart in Scotland, Sally Buchanan, and make it quite plain that when they intend to close a post office or change the service to a Post Office Local, they must have the courage to meet the public and discuss with them what they intend to do within a month of any change becoming apparent? It appears that at the moment they are hiding from my constituents.
Norman Lamb
First, may I say that I appreciated the kind words of welcome from the shadow Minister, the hon. Member for Edinburgh South (Ian Murray)? I guess that wishing me a modicum of success is about as good as it will get, so I thank him for that.
I appreciated the chance to debate the issue of post office closures, and particularly the temporary closure, because of the sudden resignation of the sub-postmaster, in the village of Torphichen in the constituency of the hon. Member for Linlithgow and East Falkirk (Michael Connarty). I absolutely confirm that Post Office Ltd will always abide by the code of practice to ensure that action is taken quickly to restore post office services wherever possible. In his village community, everything is being done to restore those services.
Jo Swinson (East Dunbartonshire) (LD)
I welcome my hon. Friend to his new position.
Under the last Government, post offices closed in my constituency in Courthill, Auchinairn, Westerton, Killermont and elsewhere, so I very much welcome the Government’s £1.3 billion of investment in the post office network. Will the Minister outline what the next steps will be in modernising the network so that we can all be certain that it will have a secure and sustainable future in all our constituencies?
Norman Lamb
I thank my hon. Friend. I am proud of the fact that the Government are investing £1.34 billion in ensuring that we retain the post office network, in marked contrast to the Labour party, which spent public money on closing down great chunks of the network. There is a lot of work to be done, and we particularly need to ensure that the post office becomes the front office of both local and national Government services. Post Office Ltd has already had significant success in that regard.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
16. What steps he is taking to promote observance of section 172 of the Companies Act 2006.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb)
Directors’ duties were codified in the Companies Act 2006, providing legal clarity for directors and raising awareness of their duty to have regard to long-term factors in promoting the success of the company. A variety of guidance is available to directors to help them observe their legal duties.
Alun Michael
I thank the Minister for that reply. He spells out the need for directors to make judgments that look after the long-term interests of the company in accordance with section 172. Will he take this opportunity to confirm that specific regulatory requirements, which are very often referred to as tick-box requirements, in no way trump, or have to be regarded as superior to, the responsibility of directors to make the sort of judgments referred to section 172, to which he referred in his reply?
Norman Lamb
I can confirm that the duty in section 172 is absolutely clear. The evidence of surveys shows that the duty is well understood, and it is important that directors abide by it.
Mr William Bain (Glasgow North East) (Lab)
20. What steps he plans to take to improve access to finance for small businesses.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
The Government are providing a comprehensive package of finance support, whether it be debt or equity funding, financial support for exports, or indeed a Business Angel co-investment fund. Next week, the Chancellor will launch the national loan guarantee scheme.
Mr Bain
With just 136 net business start-ups in Glasgow North East in the last year, and with net bank lending having fallen in every quarter of 2011, when will firms in my constituency benefit from credit easing? It is more than five months since the Chancellor first announced it.
Paul Blomfield (Sheffield Central) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
My Department has a key role in supporting the rebalancing of the economy and business to deliver growth while increasing skills and learning.
Paul Blomfield
As the Government have stumbled from the tuition fees debacle, through the uncertainty caused by core and margin and AAB, the reputational damage of international student visa policy, and the failure to develop policy on postgraduate education, will the Secretary of State admit—he has rightly identified this in other areas of Government policy—that the Government lack a compelling vision for UK higher education, and that that is behind today’s fall in our international reputational rankings?
The Minister for Universities and Science (Mr David Willetts)
We set out our approach to higher education in our White Paper. It shows how, even when public expenditure has to be reduced, we have been able to ensure that our universities remain well financed. It ensures that we still have more young people applying for university than in any year of the previous Labour Government. We are backing our universities.
Peter Aldous (Waveney) (Con)
T2. Given that we now know that the new Offshore Renewable Energy Catapult centre will be in Glasgow, with a base in Blythe but with no regional hubs around the country as originally envisaged, will the Minister outline how the considerable expertise and resources found on the East Anglia coast can be best utilised?
Mr Willetts
The Government recognise the strong energy and offshore renewable sector in East Anglia. It is the intention that the Offshore Renewable Energy Catapult will provide a national capability that will be available fully to companies from all the English regions.
Mr Chuka Umunna (Streatham) (Lab)
May I congratulate the Secretary of State on his leaked letter to the Prime Minister? I know he had some choice words to say about the Opposition, but the letter describes the Government’s action to promote growth as “frankly rather piecemeal”. I could not have put it better myself. When that was put to the Prime Minister last Wednesday, he said that the Secretary of State was wrong. I think it is grossly unfair that the Prime Minister should have the last word on this, so will the Secretary of State explain why the Prime Minister is mistaken?
Vince Cable
I am delighted the hon. Gentleman is focusing on that issue. As far as the leak is concerned, I am sure he is aware that it emerged from a Government Department—not mine—and was given to the Labour party, which gave it excellent publicity. If he ever finds himself out of a job, he is welcome to apply to be a press officer in my Department.
The letter had many choice words on Labour’s record in government, but it makes a strong case, which my colleagues in the Government share, and which I have set out in more detail in a couple of long speeches, for the need to get behind successful British companies and sectors, as we are doing through our training, our innovation policy and our support for supply chains. That will happen to a growing degree as we proceed.
Mr Umunna
Well, let us look at the support. The national loan guarantee scheme, also referred to as credit easing, has already been mentioned. Last October, Ministers said that they would urgently implement the scheme, yet they only submitted it to the EU Commission for approval on 10 February—more than four months after it had been announced. At our small and medium-sized enterprise lending summit in the House yesterday, RBS told us that the scheme would make little difference, that the benefits in the main would not be felt by SMEs and that the promised reduction in the cost of borrowing would be insignificant. If this is what the country’s largest bank is saying about the scheme, why should we believe it will make a blind bit of difference?
Vince Cable
The hon. Gentleman needs to wait until the Chancellor announces the scheme. It is a very, very large scheme, far exceeding other forms of Government support. The detail clearly needs to be got right, and we clearly need EU state aid approval, but I believe, as does the Chancellor, that it will make a significant difference to the terms on which small companies can borrow. He should be a little patient and wait for the Budget next week.
Fiona Bruce (Congleton) (Con)
T4. There are almost 4,000 small businesses in my constituency, in towns such as Alsager, Congleton, Sandbach and Middlewich, and many of them are micro-businesses. What are the Government doing to support micro-businesses and to enable them, when they want to, to develop and grow?
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
Alongside helping with things such as bank lending and the new equity schemes, I would point most obviously to the business angel co-investment fund, which is crucial to plug that equity gap for micro-businesses—not the larger equity businesses but the ones looking for funding of between £200,000 and £2 million. It is a £50 million package, and I commend it to my hon. Friend.
Valerie Vaz (Walsall South) (Lab)
T3. Recent evidence has shown that those from a lower socio-economic background make up only 14% of those applying for medicine and dentistry, whereas the figure is 29% to 30% across other courses. Will the Minister say what steps he is taking to ensure that those from a lower socio-economic background are not priced out of the courses where, as Professor Sir Les Ebdon has said, they are needed most?
Mr Willetts
It is important that we have true meritocracy in access to our universities, including to medical courses. I am a great admirer, for example, of a programme run at King’s College London, linked to Guy’s and St Thomas’, that provides an extra foundation year for young people who have an aptitude for medicine but not the necessary A-levels. That is a good example of how access funding can be used to improve social mobility.
Gavin Williamson (South Staffordshire) (Con)
T5. Many people in South Staffordshire are concerned when they see the directors of large public limited companies awarding themselves large pay increases despite the fact that the companies are not performing. Will my right hon. Friend assure my constituents that the voice and votes of shareholders will be listened to when it comes to remuneration packages?
Vince Cable
Yes, that is absolutely the direction in which the Government are going. Following the Prime Minister’s announcement that we intend to proceed on binding votes, I announced a set of detailed proposals that will give shareholders a significantly enhanced role in the setting of pay and which will, I hope, have the moderating effect that the hon. Gentleman described.
Andrew Gwynne (Denton and Reddish) (Lab)
T6. I am still receiving numerous complaints from small businesses across Denton and Reddish facing problems accessing finance for their viable business propositions. Given that the economic forecasts are continually being revised downward and the quarter 4 gross domestic product figures are showing a contraction, will the Secretary of State now act and get the banks lending to viable small businesses in my constituency?
Mr Prisk
Although two thirds of businesses seeking a loan get it, I fully understand, having run a business myself, that for those who do not it is immensely frustrating. That is why we have extended the enterprise finance guarantee and saw a 13% improvement in bank lending under Merlin. But is there more to do? Yes. The Chancellor will deal with that next week.
Guy Opperman (Hexham) (Con)
T7. Does the Minister agree that Newcastle upon Tyne, with its great industrial heritage, will be the ideal location for a university technical college, which will provide exactly the sort of technical education that can cure youth unemployment and help meet the needs of modern manufacturing and engineering employers?
Mr Willetts
The coalition is keen to see more of these university technical colleges. They are an excellent way of linking universities and schools, and I am sure that his eloquent bid will have been noted.
Ann McKechin (Glasgow North) (Lab)
Given that UK companies are sitting on some of the highest levels of cash reserves of any western nation, what steps will the Secretary of State’s Department take to release those funds for the much-needed investment in British industry?
Vince Cable
Perhaps I should say that because of the problem of large piles of liquidity in the big corporates—this is not a new problem: it has been building up over the last decade—I asked Tim Breedon, who was formerly the chief executive of Legal and General, to look at practical ways of dealing with it, such as building up supply chain finance and new forms of trade credit. It is a serious problem, but we need business to invest, and the cash is there in many companies.
Stephen Mosley (City of Chester) (Con)
T8. I was reassured earlier to hear my right hon. Friend the Secretary of State describe the work that he is putting in with GM to help protect the future of Vauxhall at Ellesmere Port. In his discussions with GM, will he remind the company that Ellesmere Port is one of its most productive plants in Europe and ideally placed to build its next-generation cars, such as the all-electric Ampera?
Vince Cable
My hon. Friend touches on the core argument. We are talking about a very productive plant, which reflects well on the management, and also on the labour force, who have been consistently co-operative. Currently the plant does not operate at full capacity; the issue for the company is how to use that production in a way that minimises excess capacity. We are confident that the UK has a strong case in ensuring that existing production—but also new models, as he said—is secured in Ellesmere Port.
Huw Irranca-Davies (Ogmore) (Lab)
The Business Secretary has just described himself as being under attack from left and right on his proposals to weaken employment protection laws. Where on that spectrum would he put Fiona Dawson, the managing director of Mars UK, who has said:
“I would like to see something that makes it easier for the workforce but it’s got to be fair. So I would not support employees’ rights being removed. I think we’ve got to make sure that it is fair, not just for businesses but for employees as well”?
How does he respond to that?
Vince Cable
It is precisely for that reason that we are having a call for evidence, and the company that the hon. Gentleman has mentioned and others can contribute to it.
George Eustice (Camborne and Redruth) (Con)
There is currently complete inequality between the bargaining position of small businesses and that of their banks. Many small businesses find themselves threatened with receivership unless they concede to higher interest rates or new charges. What can the Government do to rebalance the law in favour of enterprise?
Mr Prisk
We can do what good Conservatives do, which is to introduce competition. That is why we are ensuring that we get new entrants into the market, so that the four or five that take the view that they have an opportunity to dominate the market are unable to do so. Let us get the new entrants in. I am proud that, as a coalition Government, that is precisely what we are doing.
Diana Johnson (Kingston upon Hull North) (Lab)
The most successful defence-exporting countries procure and buy from their own home-grown industries. How will the approach that the Ministry of Defence is now taking—buying off the shelf in open competition, without any regard for British firms—help us to export more to the rest of the world?
Mr Prisk
We need to ensure that we get the very best value for money on behalf of the taxpayer, but do we need to ensure that procurement contracts reflect good indigenous British businesses? Yes, and that is exactly what is reflected in the White Paper. That is the approach we want to take.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
Does the Minister agree that when a company goes into administration, wages owed to its staff should be the top priority? Will he take steps to ensure that redundant Thamesteel workers in my constituency take priority over all other creditors?
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb)
I certainly agree that the interests of workers should absolutely take priority, and I would be happy to look into the case that my hon. Friend has raised.
Fiona Mactaggart (Slough) (Lab)
I was very disappointed that despite an invitation, no Minister from the Department was on the Treasury Bench when I moved a motion to introduce the Eradication of Slavery (UK Company Supply Chains) Bill. Will one of the Ministers in the Department meet me to discuss the Bill’s ambition to eradicate slavery from the supply chains of large UK companies, following legislation in other countries?
Margot James (Stourbridge) (Con)
I welcome this week’s report by Cranfield School of Management, which shows an increase in the number of women on company boards. Does my hon. Friend agree that this shows both how success can be achieved without imposing quotas and how much further there is to go before British industry can access the much-increased pool of talent that including women will reveal?
Norman Lamb
The initiative taken by the noble Lord Davies has been remarkably successful. Some 26% of appointments to directorships of FTSE 100 companies over the last year have been women. That is a dramatic improvement on the previous position, and we have every confidence that it will have a continuing improving effect in the boardrooms in this country.
Mr David Lammy (Tottenham) (Lab)
Given that the Higher Education Funding Council for England is predicting more mergers and turmoil in the higher education sector, and that Asian universities are overtaking UK universities for the first time in our history, will the Minister come to the Dispatch Box and reassure the sector that it has a future?
Mr Willetts
I have absolute confidence in the future of our universities. Indeed, the Higher Education Funding Council has produced a report in the last few days that confirms that our universities are in a very healthy financial position. The extra income that they will receive through fees and loans should also increase in the years ahead. We inherited from the previous Government plans for a reduction in university science funding but, fortunately, those plans have not had to be implemented.
Mr David Nuttall (Bury North) (Con)
Does the Minister agree that, regardless of the success of the one-in, one-out policy, the fact that European Union regulations are not included in it means that the overall burden of regulation on businesses is likely to increase?
Paul Flynn (Newport West) (Lab)
An inquest is taking place this morning into the tragic death of 22-month-old Joshua Wakeham, who died after becoming entangled in a looped curtain cord. Sadly, such events are not rare; there were three in one month recently, and 360 in America in a 15-year period. Joshua’s mother has fairly asked why no one warned her of the danger. A campaign has been mounted by my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks) and other Members to expose the danger of those cords. Will the Minister agree to meet Joshua’s family, so that we can discuss the dangers and the need for an advertising campaign so that everyone knows about the 250 million such cords in this country?
Mr Speaker
Order. It sounds as though that matter is strictly sub judice. The hon. Gentleman has been felicitous in the way he has worded his question, but I know that, in response, the Minister will want to focus on the broad issue, and possibly on a meeting, rather than on the details of a sub judice case.
Andrew Bridgen (North West Leicestershire) (Con)
I applauded the Secretary of State’s announcement, back in 2010, that the Government would cease the practice of gold-plating European Union regulations, but the vast majority of businesses in this country would like to see him take a more backward-looking stance and review the 13 years of gold-plating that took place under the previous Administration. Can the business community rely on the support of the Secretary of State in that regard?
Mr Geoffrey Robinson (Coventry North West) (Lab)
The Government will be aware that this is national science week, and that the Big Bang Fair is taking place at the national exhibition centre in Birmingham. I am sure that the Minister will be pleased to hear, as I was, the good news that Coventry schools have more finalists in those events than any other schools in the country. Will he find time to join me at the national exhibition centre, where we hope Coventry will win some of the prizes in the finals when those decisions are taken?
Mr Willetts
On this occasion, I can confirm that I should be delighted to accept the hon. Gentleman’s invitation. I plan to be at the science festival in Birmingham on Friday, and I look forward to meeting him there. It will be a celebration of the strength and excellence of science in Britain.
Andrew Jones (Harrogate and Knaresborough) (Con)
Small and medium-sized enterprises in Harrogate and Knaresborough have been telling me about the charges they face for late payments. This is a broader, national issue as well. Will the Minister please update the House on what he is doing to tackle the issue?
Mr Prisk
As we have learned, the Labour Government introduced legislation on this, but it is not working. We want to do more. We want to ensure that the Government lead by example, and we are working with business on that. We also need to reflect on the fact that half of all business transactions are entered into without any prepayment agreements. There is therefore a fundamental problem with how business is transacted. I want to look at that, rather than simply reaching for the legislative button at the first opportunity.
Business of the House
(12 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ms Angela Eagle (Wallasey) (Lab)
Will the Leader of the House give us next week’s business?
The Leader of the House of Commons (Sir George Young)
The business for the week commencing 19 March will be:
Monday 19 March—Consideration of Lords amendments to the Protection of Freedoms Bill, followed by a debate on a motion relating to the waste water national policy statement.
Tuesday 20 March—Consideration of Lords amendments to the Health and Social Care Bill.
It may be helpful if I remind colleagues of your statement, Mr Speaker, in which you set out the arrangements for Tuesday 20 March. The House will meet for prayers at 9.45 am and the sitting will then be suspended until 2.30 pm in order to facilitate the attendance of the two Houses on Her Majesty in Westminster Hall for the presentation of Humble Addresses.
Wednesday 21 March—My right hon. Friend the Chancellor of the Exchequer will open his Budget statement.
Thursday 22 March—Continuation of the Budget debate.
Friday 23 March—Continuation of the Budget debate.
The provisional business for the week commencing 26 March will include:
Monday 26 March—Conclusion of the Budget debate.
Tuesday 27 March—Motion relating to assisted suicide. The subject for this debate has been nominated by the Backbench Business Committee.
Colleagues will be aware that the House will meet at 11.30 am on Tuesday 27 March.
The provisional business for the week commencing 16 April will include:
Monday 16 April—Second Reading of the Finance (No. 4) Bill.
I should also like to inform the House that the business in Westminster Hall will be:
Thursday 19 April—Debate on regeneration.
Ms Angela Eagle
Last weekend, the Liberal Democrat spring conference voted against the health Bill. This week, Liberal Democrats in Parliament voted for the health Bill. It could not be clearer: the Liberal Democrat leader now takes his instructions only from the Prime Minister. Would the Leader of the House join me in congratulating the five Liberal Democrats who defied their leadership and voted against the health Bill? Does he not agree that when the legislation returns to this House next week, the Government must publish the transition risk register, as they have been ordered to by the Information Commissioner? Much better still, the Government should just drop the Bill.
This week at the Leveson inquiry we learned further details about how the deputy Mayor for Policing in London put pressure on the Metropolitan police to drop their investigation into phone hacking. The Met say that they had to remind him that the police are operationally independent of politicians and that operational decisions are taken by police officers, not the Mayor’s political appointees. It is especially worrying when it is a Conservative deputy Mayor pressurising the police on an investigation that involved one of the Prime Minister’s senior aides, Andy Coulson. Will the Leader of the House therefore arrange for the Home Secretary to make an urgent statement about how such inappropriate interference by the Mayor’s political staff can be stopped?
We now know that the Prime Minister is fond of going horse riding with his old school friends—when they are free. As it is the Cheltenham festival at the moment, may I suggest some horses that Government Members might want to back? As the Prime Minister is conveniently out of the country when unemployment reaches another high, he could back American Spin in the 2.40 today. With the Health Secretary’s career in terminal decline after his disastrous mismanagement of the NHS, his horse is clearly Final Approach. The Education Secretary, who is doing everything he can to undermine the Leveson inquiry, will no doubt want to put his money on Time for Rupert. And the only possible horse for the Deputy Prime Minister is running today in the 2.05: Palace Jester.
The Deputy Prime Minister has been keeping himself busy floating various suggestions for the Budget in the media. Clearly bored with hearing from him, the Chancellor decided to follow Steve Hilton to America. As his economic strategy has unravelled, the Chancellor, rather like the Prime Minister, has been increasingly reluctant to come to the House. Could the Leader of the House confirm that he is actually planning to turn up for the Budget?
I raised last week the Chancellor’s proposals to cut child benefit. The Leader of the House said that the Government’s view was clear. He said the Government’s view was clear three times, but by some strange oversight, he forgot to tell us what the Government’s view actually was. Perhaps the Leader of the House could clear up this issue. Is it fair that a household in which one parent works and earns £43,000 a year will lose child benefit, while a household in which both parents work and take home £84,000 will not? Will the Leader of the House find time for a debate on fairness before the Budget? The debate on the Budget within the Government has been a shambles.
Are the Government in favour of a mansion tax or not? The Business Secretary thinks it is a good idea; the Local Government Secretary thinks it is a terrible idea. Conservative Back Benchers want a tax cut for the top 1%; meanwhile, Liberal Democrat Cabinet Ministers and Back Benchers wander around claiming that while the Tories favour tax cuts only for the rich, they themselves do not. The truth is, however, that every member of the Government has voted for Budgets that take the most money from those who have the least.
Can the Leader of the House find time for a debate on families? It is families who have been hardest hit by the Government’s Budgets, and what families want from this Budget is not Government in-fighting, but real help now to reduce the squeeze on their living standards and get the economy moving again.
Perhaps, while he is in the United States, the Chancellor might ask why the economy there is growing and unemployment is falling, while in Britain the economy is flatlining and unemployment is rising. The Government's economic strategy is failing, and the Cabinet cannot agree on what to do next. No wonder the Business Secretary thinks that the coalition lacks a “compelling” case, and no wonder the Prime Minister decided that he was better off out of the country on the ides of March, as far away as possible from the Mayor of London.
The right hon. Member for Yeovil (Mr Laws) has taken to warning about Government paralysis. His heart may still be in the coalition, but there is only one horse for Liberal Democrat Back Benchers now. It is running in the 2.05 this afternoon, and it is called Get Me Out Of Here.
Sir George Young
We welcome the new career that the hon. Member for Wallasey (Ms Eagle) is developing as a tipster. It will be interesting to see how well the horses that she has commended to the House actually perform.
The hon. Lady raised—yet again—the subject of the Health and Social Care Bill. It is interesting: we have had three Opposition day debates on the Bill, and I still have not the faintest idea what the Opposition’s policy is on health. Nor, apparently, does the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). He turned up the other day to support the amendment tabled by a Back-Bench Liberal Democrat, but disappeared when the time came to vote on the Labour party’s own motion. Perhaps he had not realised that the negotiations with the Liberal Democrats had ended, some two years ago, in failure. Perhaps he, and indeed the hon. Lady, should heed the wise words of his former Transport Secretary Lord Adonis, who wrote today:
“Labour will get back into government by having a better plan for the future, not by opposing changes which are working well.”
[Interruption.] Lord Adonis clearly thinks that they are working well.
The hon. Lady asked about the risk register. As she knows, we are awaiting the detailed judgment of the tribunal before deciding what further action the Government might take.
The police are operationally independent of politicians, and rightly so. The Home Secretary will be at the Dispatch Box on Monday, when she will be happy to answer questions.
As the hon. Lady may have noticed, the Chancellor will be making a Budget statement on Wednesday. I think that the best thing to do is to put to one side the speculation in the papers about what he may or may not do, and then come along on Wednesday and listen to the real thing.
The hon. Lady mentioned child benefit. Is it fair for someone earning £20,000 a year to pay, through his or her taxes, for the child benefit of someone earning five times as much? That is the question that she needs to address. As for growth, she will be aware that the International Monetary Fund has pointed out that growth in this country this year is three times that in France and twice that in Germany.
Finally, the hon. Lady always obsesses about the relationship between the Conservatives and the Liberal Democrats, but when even The Guardian reports, as it does today, that Labour is in “turmoil”, we know something must be going very badly wrong with the Opposition, and when another report uncovers that morale at Labour HQ is
“even worse than the dark days under Brown”,
we have to wonder how bad it has to get before the hon. Lady stops worrying about the coalition and starts to focus more on the chaos in her own party.
Mr Greg Knight (East Yorkshire) (Con)
May we have a debate on avoiding false economies? Has the Leader of the House seen the report released this week that states that at the current rate of progress it will take local authorities some 11 years to complete the backlog of road repairs? Is he aware—he ought to be—that potholes are dangerous for cyclists and damage car suspension systems? What more can the Government do to ensure that local authorities complete roadworks diligently and speedily?
Sir George Young
As a cyclist, I am all too aware when there is a pothole on my route into the House of Commons. My right hon. Friend may have seen a recent statement by one of the Transport Ministers that said that, following last year’s severe winter, additional resources were made available to local authorities to address the pothole issue, and I think I am right in saying that the resources for local authorities over the next three years are higher than in the preceding three years before we took office. I shall, of course, pass on my right hon. Friend’s concern to the Secretary of State for Transport in order to see what can be done to make my right hon. Friend’s ride around his constituency more comfortable than it clearly is at present.
Natascha Engel (North East Derbyshire) (Lab)
On Monday, 186 Members voted against all-House elections to the Backbench Business Committee. Of those, 119 were payroll Members. Without those Front-Bench votes, Back Benchers would have secured all-House elections by 38 votes. We all saw the pain on the face of the Leader of the House on Monday night. Can he explain the tortuous logic by which he squares the coalition’s promise to give more powers to Back Benchers with Monday’s Front-Bench intervention?
Sir George Young
My hon. Friend the Deputy Leader of the House set out in his speech on Monday the reasons why he and I believed the House should support the amendment in question. As the hon. Lady knows, all we have done is bring the Backbench Business Committee into line with all the other Select Committees and ensured that, for example, the Conservative party cannot choose which Labour Members serve on her Committee. That would be an abuse, and the House agreed, through a Division in the normal way, with the proposals put forward by my hon. Friend—and supported by the hon. Lady’s Front-Bench party colleagues. We have had that debate, and the time has come to move on.
Jo Swinson (East Dunbartonshire) (LD)
Two years ago, the Speaker’s Conference recommended that we should have a review of sitting hours, and one year ago the Procedure Committee launched an inquiry into that. It has been very thorough, with both written and oral evidence having been taken, and there was then a further consultation exercise, which closed three months ago. When does the Leader of the House think we will have the chance to vote on options for reform?
Sir George Young
There is a missing ingredient in the equation, in that we have to wait for the report from the Procedure Committee. I understand from the Chair of that Committee, my right hon. Friend the Member for East Yorkshire (Mr Knight), that good progress is being made. I have given evidence on this topic, and I am sure my hon. Friend has, too. When the report is placed before the House—I do not know whether that will be before the end of the Session—it will be important to find time so that the House can reach a decision on whether to stay with the existing sitting hours or to make changes. In the first instance, however, my hon. Friend’s question should, I think, be addressed more to the Chair of the Procedure Committee than to the Leader of the House.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
Even at this late stage, will the Leader of the House use his good offices, and his significant influence with the Chancellor, to make a special plea to him to reflect again on the proposed 10% increase in air passenger duty? I fully accept that that duty was introduced by the last Labour Government, but it has risen significantly, and is now the highest in the world. If this tax goes ahead, we will be totally uncompetitive in relation to our European partners, and there will be job losses and impacts on tourism, especially in Scotland. I therefore ask the Leader of the House to speak to the Chancellor about this important issue.
Sir George Young
The hon. Gentleman makes a last-minute submission to my right hon. Friend the Chancellor as he puts the finishing touches to his Budget, and he will understand that I cannot give any undertaking whatsoever. However, there will be a number of days in which to debate the Budget measures, when the hon. Gentleman may have an opportunity to develop his case at greater length.
Mark Lancaster (Milton Keynes North) (Con)
May we have a debate on local government finance? Wolverton and Greenleys town council has applied for grant funding under the Portas pilot project but has been told that if—and, we hope, when—it is successful, it is not deemed to be a suitable authority to handle the money. Given the Government’s commitment to localism and the fact that the local town council is deemed competent to raise the precept, is this situation not slightly odd?
Sir George Young
My hon. Friend may know that section 31 of the Local Government Act 2003 says that a Minister can make a grant to a local authority, but the definition of “local authority” excludes the body to which he has referred—the town council. If the bid is successful, I see no reason why the money should not be “laundered”, if I may use that word, through the district council, which would be an intermediary between the Government and the town council. That may offer a way through.
Kelvin Hopkins (Luton North) (Lab)
Equity member Michael Sheldon recently provided a reference for a passport application for his daughter’s boyfriend, but the application was turned down because the passport office apparently said that acting was “not a proper job.” Will the Leader of the House make time for a debate on the massive contribution to our economy, and to the world of culture and entertainment, made by the many fine and great actors produced by Britain?
Sir George Young
Acting is a proper job, and many Members in the House prove that on a day-to-day basis. I will draw the hon. Gentleman’s concern to the attention of the Home Secretary, who will be at this Dispatch Box on Monday. I pay tribute to the acting profession, which is an important invisible earner of foreign exchange. This country leads the world in providing high-quality actors, and, indeed, some of them have been Members of this House.
Mr Christopher Chope (Christchurch) (Con)
May we have an early debate on the Government’s perverse and bizarre definition of equality? Why are they saying that same-sex partners should be able to have access to marriage while denying the opportunity for heterosexuals to have access to civil partnerships?
Sir George Young
As my hon. Friend knows, we have just published a consultation document with the proposition that access to marriage should be available to same-sex couples. We have already made some changes to civil partnerships; there is now access to services in church. During the course of the consultation on that document, my hon. Friend will be able to develop his argument for extending the opportunities in the way that he has just outlined, but the debate has just been launched by the consultation document and the written ministerial statement published a few moments ago.
Mr Ben Bradshaw (Exeter) (Lab)
May we have a debate or a statement from the Education Secretary on the implementation of the Government’s academy schools policy, following revelations that the first school in Exeter to apply for academy status pays its head £10,000 more than the Prime Minister and employs the head’s wife as the deputy head, as well as allegations about a company car and trips abroad on school expenses? Does that not show that there is real risk and a real accountability problem with the Government’s academy policy?
Sir George Young
The right hon. Gentleman says that it is the Government’s academy policy, but it is actually his own party’s academy policy which we are building on and strengthening. The regime for academies was developed by his party and, if I may say so, we are building on one of the successes of the previous Administration.
Mr David Amess (Southend West) (Con)
May we have a debate on why Southend-on-Sea, the finest seaside resort in the country, was not granted city status yesterday? The word on the street is that we were robbed, and I agree.
Sir George Young
I would hope that my hon. Friend will be broad-minded about this, in that there was success for Essex—
Sir George Young
I do not want to get drawn into a battle between the various tribes in Essex. I understand the sadness in Southend, but this is not a matter for the Leader of the House. I just join in commending the towns that were successful on their graduation to city status.
Jim Shannon (Strangford) (DUP)
Will the Leader of the House arrange for a statement or a debate in this House on the control of raptors—birds of prey? In parts of the United Kingdom, the number of birds of prey has increased, to the detriment of songbirds, as the statistics show. Will such a statement address a review of the occasional licences to control raptors, as in parts of the UK the control of raptors is urgently needed?
Sir George Young
I understand the concern that the hon. Gentleman raises, and I will share it with my right hon. Friend the Secretary of State in the Department for Environment, Food and Rural Affairs, where responsibility for that rests, to see whether we should review the current legislation in view of the damage—the extinguishing of songbirds—to which the hon. Gentleman has referred.
Brandon Lewis (Great Yarmouth) (Con)
The figures published this week show a growth in private sector employment, and the enterprise zones, which promise even further employment and growth in the private sector, will start in April. I am thinking, in particular, of new enterprise zones such as New Anglia’s in Great Yarmouth, which really is the best seaside town, because we have leisure and business in one place. With these zones coming into force in April, may I ask that we have a statement from the relevant Minister to reinforce and reaffirm the excellent opportunities that they offer?
Sir George Young
My hon. Friend reminds the House that 24 enterprise zones will be providing real opportunities for inward investment and fresh jobs in those particular areas. The Budget debate will provide an opportunity to develop this further. He also reminds the House that the figures that came out yesterday show that the increase in private sector employment more than outweighed the decrease in public sector employment, and we all hope that trend will continue.
Keith Vaz (Leicester East) (Lab)
May we have an urgent debate or statement about the shortage of branded prescription drugs in pharmacies? Early-day motion 2801 states:
[That this House is deeply concerned that prescription drugs intended for UK patients are being sold abroad; notes that a recent survey of pharmacists found that 85% were very concerned that patients were being adversely affected by shortages of such drugs; further notes with alarm research that found 40% of pharmacists had seen patients hospitalised because of the problem; and calls on the Government to hold urgent discussions on what can be done to combat this immoral activity with devastating consequences.]
Given that figure of 40%, could we please have an urgent debate on the subject?
Sir George Young
There will be an opportunity to discuss that on Tuesday week, when my right hon. Friend the Secretary of State for Health will be at the Dispatch Box answering questions. In the meantime, I will draw his attention to the shortage of certain branded prescription drugs and the very unfortunate consequences to which the right hon. Gentleman has referred, to see whether there is any action that the Government can take to ensure that supplies are available where they are needed.
Mr Marcus Jones (Nuneaton) (Con)
I welcome the introduction of neighbourhood planning, which will allow local communities to help shape a vision for their future. May we have a debate to encourage the take-up of neighbourhood plans, as councils such as Labour-controlled Nuneaton and Bedworth borough council have failed, thus far, to engage in empowering eager constituents of mine who want to embrace neighbourhood planning?
Sir George Young
I hope that many parish councils, town councils and, indeed, neighbourhoods will take up the opportunity to which my hon. Friend referred and draw up neighbourhood plans, which will ensure that the views of local people are taken on board as the local authority then produces its district plan. We are committed to publishing our response to the national planning policy framework consultation exercise shortly, and there may be an opportunity subsequently to have a broader debate about the planning regime.
David Wright (Telford) (Lab)
Unemployment continues to rise, and it now stands at 7.2% in Telford. May we have a debate entitled “Unemployment: the Government’s strategy and how it is failing”? Perhaps the Prime Minister could lead the debate and he could tell us about what is happening in the United States.
Sir George Young
Again, there will be an opportunity in the context of the Budget debate to talk about such issues. However, it is worth putting on the record the fact that employment is also up. Women’s employment was up by 10,000 in the past quarter, long-term unemployment was down by 12,000 and the number of vacancies was up by 15,000. It is important to put things in context, and to remind the hon. Gentleman of the measures the Government are taking to develop sustainable growth and ensure that unemployment comes down.
Christopher Pincher (Tamworth) (Con)
The Range leisure outlet, which began life in Plymouth in 1980 on a market stall, is about to open an outlet in Tamworth, creating scores of new private sector jobs. That is the sort of entrepreneurial spirit we need to see more of, so could the Leader of the House grant a debate on how the Government can help entrepreneurs to grow their businesses, create more private sector jobs and rebalance the economy?
Sir George Young
I am delighted to hear what is happening in my hon. Friend’s constituency. I can grant such a debate—indeed, I have announced such a debate for four days of next week when we can explain that we are encouraging the enterprise to which my hon. Friend has referred, by cutting corporation tax, extending the small business rate relief holiday to small and medium-sized enterprises and making it harder to make vexatious claims for unfair dismissal. We want to encourage yet more firms to set up shop in my hon. Friend’s constituency.
Mr Nigel Dodds (Belfast North) (DUP)
This Saturday, the Royal Irish Regiment and the Irish Guards will be holding a number of St Patrick’s day parades in Northern Ireland. Following on from the excellent news that the city of Armagh will be awarded a lord mayoralty in this diamond jubilee year, can we look forward to the statement that St Patrick’s day will become an official public holiday in the United Kingdom?
Sir George Young
Speaking from memory, I believe that I have seen a response from my right hon. Friend the Secretary of State for Northern Ireland, if not to the right hon. Gentleman then to one of his colleagues, that explains the issues that surround the declaration of new public holidays. I think it is best if I draw the right hon. Gentleman’s attention to that letter, which is somewhere in the system.
Robert Halfon (Harlow) (Con)
May we have a debate on supporting local newspapers? In my area in recent years, we have gone from having three local newspapers to having one, so will my right hon. Friend lobby the Department for Transport to ensure that they continue to push for transport notices to be published in local newspapers, to ensure that people who do not use the internet can see the adverts and to create a level playing field?
Sir George Young
I am surprised that there is any space in the Harlow Star for anything other than reports on my hon. Friend’s activities in the House of Commons. We are consulting on proposals that would devolve to local authorities responsibility for deciding how to reach their target audience, and I am sure that my hon. Friend’s local authority will bear in mind the importance of a vibrant local newspaper when it decides how to place advertisements in the future.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I remind the Leader of the House that at no time in the history of this country have power, influence, employment and wealth been more dominated by London and the south-east. Is it not about time—or is it too late—to influence next week’s Budget so that we can start to redistribute some of the wealth and power to the northern and midland regions that make this country what it is?
Sir George Young
I hope that the hon. Gentleman will recognise some of the steps that we have introduced, such as the regional growth fund and the exemption from national insurance employers’ contributions for those outside the key areas to which he has referred and the launch of enterprise zones. I am sure that my right hon. Friend the Chancellor is alert to the importance of bridging the north-south divide to do more to help areas with high unemployment. The hon. Gentleman should await my right hon. Friend’s Budget statement.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
Following the tragic news from Afghanistan about the loss of those brave soldiers’ lives and the murder of many civilians by an American soldier, and the discussions coming out of the United States about the future of Afghanistan, will the Leader of the House look in the forward programme and find time for a full debate in the House on our strategy in Afghanistan, both in the military and in development, and on the long-term future for Afghanistan?
Sir George Young
We are committed to making regular quarterly statements on the position in Afghanistan. I think I am right in saying that one of those quarterly statements is due quite soon and there will then be an opportunity to ask my right hon. Friend the Secretary of State about those issues. I agree on the broader question and I hope that, if not in the immediate future then at some point in the new Session, we can have a broader debate about foreign policy in Afghanistan—and in Iraq, Syria and other places.
Phil Wilson (Sedgefield) (Lab)
May we have a debate or a statement on the state of public transport in Country Durham, which even the Minister responsible for employment has called poor? Things are now so bad that the Jobcentre Plus in Newton Aycliffe is considering purchasing bicycles so that people can get to work. Is it now the Government’s policy to purchase bicycles so that people can get to work rather than providing public transport?
Sir George Young
I think I am right in saying that the previous Government introduced a scheme whereby employers could make bicycles available on preferential terms to their employees, so there is a precedent. I understand the hon. Gentleman’s concern about the poor quality of public transport in his constituency, and I shall raise it with my right hon. Friend the Secretary of State for Transport to see whether she can take any action to relieve that problem.
Neil Carmichael (Stroud) (Con)
With more than 300,000 school governors in this country, may we have a debate to celebrate the work they do for their schools and communities and, secondly, to highlight the need to change and adapt their role to respond to the welcome changes in our school policy, particularly on academies?
Sir George Young
That would be an excellent subject for a Westminster Hall debate; I commend my hon. Friend on his work in setting up an all-party parliamentary group on education, governance and leadership. He is right that as the school system develops and we have more academies, it is even more important that there is good local leadership and that we recruit good-quality governors to remove unnecessary burdens and distractions for schools. We need to get the right people in the right position with the appropriate skills, abilities and experience, and I think that a debate in Westminster Hall would do exactly what my hon. Friend has recommended.
Diana Johnson (Kingston upon Hull North) (Lab)
May we have a debate about the mixed messages from the Government, who are telling people from the north to move to the south for jobs and people from the south to move to the north for housing? How will that help rebalance the economy?
Sir George Young
That is a travesty of the Government’s policy. We want to grow more jobs in the north, where people are, and the news that Nissan is creating 2,000 new jobs in the north-east is something that I hope the hon. Lady would welcome.
Dan Byles (North Warwickshire) (Con)
Coal continues to play a key role in our energy mix, accounting for a third of our electricity generation. May we have an early debate on the importance of domestic UK coal production in energy security, particularly in the light of yesterday’s worrying news that the Daw Mill colliery, which borders my constituency and that of my hon. Friend the Member for Nuneaton (Mr Jones), might shortly close, with a devastating impact on the 800 men and women who work there, resulting in an increase in coal imports to the UK?
Sir George Young
My hon. Friend is right that we need a balanced energy policy, and there is a role for coal. We have put resources on one side to promote clean coal technology, and if we can overcome the environmental problems associated with the traditional coal-fired power stations, I am sure that coal can play an important role in the future supply of this country’s energy.
Kevin Brennan (Cardiff West) (Lab)
To mark the re-establishment of the all-party group on folk arts, following the sad death of Alan Keen MP—I was elected chair, by the way, and the vice-chair is the be-knighted Member for the town of Colchester—may we have a debate on the importance of folk arts to the economy, and in particular on the Government’s position on representing the folk traditions of the nations and regions of these islands in the Olympics opening ceremony?
Sir George Young
The hon. Gentleman makes an important point, and I am sorry if I misconstrued the same point when it was made a fortnight ago by my hon. Friend the Member for Colchester (Sir Bob Russell). I congratulate the hon. Member for Cardiff West (Kevin Brennan) on his election to the chair of that important group; I am sure it was done by secret ballot of Members from all parties and I commend the group for its work. It is important that the opening ceremony for the Olympics is taken as an opportunity to portray all that is good about the United Kingdom, and I agree that the elements the hon. Gentleman has identified should be part of that ceremony.
Sir Bob Russell (Colchester) (LD)
The population of England is 52 million and the combined population of the other three countries in the UK is 10 million. Over the part 12 years, 11 places have been granted city status but only four have been English towns. May we have a debate on this discrimination against England and the extraordinary criteria used by the committee that came up with the conclusions, bearing in mind that in Wales, with only two applicants, a town with a population of 130,000 was deemed not appropriate to become a city of the 21st century whereas a small community with a population of 3,500 was? Where is the logic and sanity behind that decision?
Sir George Young
There are some questions that the Leader of the House is totally unable to begin to answer, and the turf war that has broken out in Essex is something that I do not want to venture into. I understand my hon. Friend’s disappointment that his town was not recognised, but I am sure that his town is proud that he now has a knighthood.
Mr Iain Wright (Hartlepool) (Lab)
Let me follow up the question asked by my namesake, my hon. Friend the Member for Telford (David Wright). The Leader of the House might recall that two or three weeks ago I asked for a debate on unemployment in the north-east, but he was somewhat dismissive, in his usual courteous and gracious way, about the impact of Government policies on jobless totals in my region. Given yesterday’s publication of figures showing that 4,678 people in Hartlepool are unemployed—a rise of nearly 10% year on year—and that the north-east is still the worst region in the country for unemployment, will he rethink his position, and may we have an urgent debate on unemployment in Hartlepool and the north-east?
Sir George Young
I commend the way in which the hon. Gentleman fights for more jobs in his constituency, and I am sure that no discourtesy was intended when I last replied to his question. However, I think the answer is the same as I gave to his hon. Friend. We are going to have a Budget in a few days’ time, the Government have made it clear that we want growth to be a key part of our agenda, and I can only suggest that the hon. Gentleman should wait for the Budget and take part in the Budget debate. I very much hope there will be something in the Budget that he is able to welcome and that will help his constituency.
Karen Bradley (Staffordshire Moorlands) (Con)
One thousand schoolchildren in Biddulph in my constituency have each designed a unique footprint to mark the “Take a Step for Fairtrade” campaign. Will the Leader of the House find time for a debate on the important subject of Fairtrade and other initiatives that help to support those in the greatest poverty in developing countries?
Sir George Young
I commend what the schoolchildren in my hon. Friend’s constituency have done to mark Fairtrade fortnight. This issue would be an appropriate subject for a debate in Westminster Hall. Through the Department for International Development, we are a committed Fairtrade partner, and DFID provides support to Fairtrade International—some £12 million over four years—helping to strengthen the Fairtrade certification scheme, broaden its scope and deepen its impact. I commend what is happening in her constituency.
Paul Flynn (Newport West) (Lab)
The recent terrible events in Afghanistan have convinced 73% of the public that our troops should be brought home immediately. Similar public opinion in the Netherlands and Canada convinced those countries to bring their troops out of that combat two years ago and one year ago respectively. Should we not reflect public opinion and have a debate and a vote in this House so that we can say what the public are saying—that our brave troops should not be asked to continue a mission impossible and risk their lives for a single day longer than necessary?
Sir George Young
The hon. Gentleman has put this view forward consistently over a period of time and I commend him for his persistence. Such a matter would be for the Backbench Business Committee to find time to debate, but he might have seen in reports from my right hon. Friend the Prime Minister’s visit to America about the timetable for withdrawal that we will have withdrawn from the combat role by the end of 2014. Also, there will be regular statements on a quarterly basis updating Members on the position in Afghanistan; he might want to ask a question in response to one of those statements.
Guto Bebb (Aberconwy) (Con)
A report in last week’s Sunday Telegraph highlighted the mis-selling of complex interest rate swap products to small businesses, such as a hotel in my constituency owned by Mr Colin Jones. Those businesses clearly did not have the financial expertise to understand the risks to which they were being subjected as a result of signing the forms. The cases that have been highlighted are merely the tip of the iceberg, so may we have a debate about this issue and about the reluctance of the Financial Services Authority and the Financial Ombudsman Service to get involved in this mis-selling and protect the businesses in question?
Sir George Young
There might be an opportunity for my hon. Friend to raise this issue when the Financial Services Bill returns to the Floor of the House having completed its Committee stage. In the meantime I shall raise it with my hon. Friends at the Treasury. I would say, however, that anyone who is thinking of investing in such products should take independent professional advice before signing any contract.
Nick Smith (Blaenau Gwent) (Lab)
Driver and Vehicle Licensing Agency figures show that requests from private car park operators for vehicle registration data have increased dramatically—by more than 300%—in recent years. Those data are used to issue fines to motorists, and more than 1 million motorists have received fines in the past year. Transport Ministers say that new measures coming on stream will tackle this problem, but they will not. Motorists deserve a fair deal, so may I press the Leader of the House again for a debate on car parking management?
Sir George Young
I understand the issue that the hon. Gentleman raises, and I shall touch base with my right hon. Friend the Transport Secretary on this, but he will know that we are banning cowboy clampers. I hope that will bring some consolation to the motorists to whom he refers.
Gavin Barwell (Croydon Central) (Con)
Given the interest on both sides of the House, may we have a debate on the labour market? As the Leader of the House has acknowledged, the statistics published this week show, beneath the headline figures, a fall in long-term unemployment. They also show that while there has been a 380,000 reduction in public sector employment since the general election, the private sector has created more than 630,000 jobs.
Sir George Young
As my hon. Friend says, we are seeking to rebalance the economy so that there is less cost in the public sector, which is being downsized, with that being compensated for by growth in the private sector. The figures he has mentioned outline the progress we are making in that regard. He also underlines a point that was made in earlier exchanges about having a well-educated work force. The investment we are making in apprenticeships is part of the process of giving people the skills they need to find work in the private sector as it grows.
Nia Griffith (Llanelli) (Lab)
Given the very belated statement we had last week on Remploy factory closures and the point-blank refusal of the disability Minister, the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller), to take up the offer of the Welsh Government to take over responsibility for Remploy factories in Wales and put in expertise to improve their viability, may we have an urgent debate on the Floor of the House about strategies for making Remploy factories viable?
Sir George Young
My hon. Friend the disability Minister made a statement to the House on this last week, and then answered questions. I point out that the party of the hon. Member for Llanelli (Nia Griffith) closed 28 Remploy factories, and that there is a change in the way we are helping disabled people. There is more and more emphasis on finding work in mainstream employment for those with a disability, and less reliance on places of employment such as Remploy, which is sometimes referred to as being segregated. The money saved by the closure of Remploy factories is being diverted into giving more personal help to people with a disability to find work in mainstream employment. We are not saving any money at all; indeed, we are putting £15 million more into the access to employment scheme within that budget. I would welcome a debate on the future of Remploy, but I honestly believe that the policy on which we are embarked is in the best long-term interests of those with a disability, and it has been supported by most disability organisations.
James Morris (Halesowen and Rowley Regis) (Con)
Conservative-led Dudley council has launched a £1 million new business loan fund. Given the figures that were published yesterday showing that 60,000 more people were in work in the west midlands than at the time of the election, could we have a debate on how local initiatives can help to drive jobs and business growth?
Sir George Young
We can indeed have such a debate: on Wednesday, Thursday, Friday and—[Hon. Members: “Saturday?”] No, not Saturday—on Monday. We are doing everything we can to support businesses through this difficult time, and I was interested to hear about what is happening in Dudley. We also have the business growth fund of £2.5 billion—a bank-led investment scheme without any Government money—investing in businesses across the country in return for a 10% equity stake. My hon. Friend might like to promote that scheme in his constituency.
Ian Paisley (North Antrim) (DUP)
Can the Leader of the House arrange for a statement or debate about the appointment of an independent oversight team to watch over current live police investigations? Does the Leader of the House not find it peculiar that one of the members of the team is a political appointee and a Member of the other place? Should not the Secretary of State for Northern Ireland make a statement about this matter, especially as it has national security implications because some of the murders involve key witnesses in national security cases?
Sir George Young
I understand the sensitivity of this matter and its importance in Northern Ireland. I will relay to my right hon. Friend the Secretary of State the concerns that the hon. Gentleman has expressed and will ask him to write to the hon. Gentleman responding to these serious issues.
Andrew Stephenson (Pendle) (Con)
In April last year Conservative councillors on Pendle borough council created a business start-up grant scheme, which over the past year has supported 76 small businesses, created 21 jobs and brought four vacant premises back into use. Given that other Government initiatives have helped to create more than half a million new jobs in the private sector since the general election, may we have a debate on the role that local initiatives can play in supporting the Government’s initiatives on job creation?
Sir George Young
I am delighted to hear about what has been happening in my hon. Friend’s constituency. Local enterprise partnerships have a key role to play in delivering this policy and helping to grow jobs in particular areas. This is part of the process, to which other hon. Members have drawn attention, of creating extra jobs in the private sector to compensate for the necessary decisions we have taken to downsize the public sector. I am delighted to hear about the rebalancing taking place in his constituency.
Mr Wayne David (Caerphilly) (Lab)
May we have a debate on the fact that the chief constable of Gwent police has embarked on a programme of draconian spending cuts at the behest of the Home Office without any consultation whatsoever with elected representatives, the police authority or, indeed, members of the public?
Sir George Young
There will be an opportunity to raise the matter on Monday, when the Home Secretary will be at the Dispatch Box. Many police authorities, certainly in England, have been able to manage with the reduced budget available to them and ensure that front-line services remain unaffected. They have secured the necessary economies through joint purchasing and by pooling resources and moving people from back offices to the front line. My right hon. Friend the Home Secretary is now forewarned that the hon. Gentleman is on the war path.
Harriett Baldwin (West Worcestershire) (Con)
In the light of yesterday’s welcome news that there has been a 70% increase in job vacancies in West Worcestershire, and a 22% increase in the west midlands as a whole, may we have a debate on the wonderful role played by our network of jobcentres, which are working so hard with local private businesses to add vacancies to the database?
Sir George Young
I agree entirely with my hon. Friend and know that colleagues on both sides of the House regularly visit their jobcentres to see at first hand the heroic work being done to find suitable jobs for those currently out of work. She reminds the House that jobcentres are notified of around 10,000 new vacancies every day, and over the past 12 months Jobcentre Plus has received more than 4 million vacancies. The figures released yesterday show that the number of vacancies is up, so jobcentres have an important role to play in ensuring that those vacancies are taken up by people currently out of work.
Alun Cairns (Vale of Glamorgan) (Con)
The UK’s triple A credit rating is essential to our economic recovery. Will the Leader of the House agree to a debate on the logic or otherwise of the argument, presented by some Members, that the way to get out of a debt crisis is simply to borrow more money, and on the implications that would have on employment prospects?
Sir George Young
I entirely agree with my hon. Friend, who might like to catch your eye, Mr Speaker, during the Budget debate. It is important that we maintain our triple A status. A 1% increase in interest rates would cost the average family with the average mortgage £1,000 more a year, which is the last thing they want at the moment, and it reminds us of the importance of sticking to the deficit reduction strategy.
Bob Blackman (Harrow East) (Con)
May we have an urgent statement on the operation of London transport during the London Olympics and Paralympics? All tube workers have been offered an £850 bonus because they will be required to work at short notice and possibly for longer hours, but members of the Unite union have rejected this and are calling for a no-strings-attached bonus just for turning up for work. May we have a debate so that we can expose this intransigence?
Sir George Young
It is important that the Olympics are a great success, as I am sure they will be, but it is equally important that the presence of the Olympics is not used to make wholly unreasonable demands. I think that I am right in saying that the issue my hon. Friend raises is more a matter for the Mayor of London than for the Government, and I am sure that Boris will have listened to what he has said. I hope that there will be a sensible resolution of the dispute between Unite and Transport for London so that we can get ahead and everyone can enjoy the Olympics and get there and back on public transport.
Nick de Bois (Enfield North) (Con)
This morning The Times carried an encouraging report that there might be some movement on the extradition arrangements between the US and the UK. Given this, and the presence of the Scott Baker report, will the Leader of the House require a statement from the Home Secretary on when the House will hear the Government’s conclusions and recommendations?
Sir George Young
As I mentioned a few moments ago, the Home Secretary will be at the Dispatch Box on Monday, and I am sure that she will respond to my hon. Friend during topical questions. The Scott Baker report was published in October and my right hon. Friend the Home Secretary is reflecting on it, together with the debates that have taken place. My hon. Friend refers to the statement issued after the US President and the Prime Minister met yesterday, which indicated that their teams will now get together and look at how the extradition arrangements are operating. The Prime Minister has made it clear that he would prefer more cases to be tried in the UK, rather than in America. I hope that the Home Secretary will be able to give a more authoritative reply on Monday than I have done.
Andrew Bridgen (North West Leicestershire) (Con)
May we have an urgent debate on the state of the construction industry? The industry is not only of huge importance to the UK economy, but of particular importance to my constituency, where we have some of the largest brick factories in the country, and many companies involved in the supply of building materials. I am sure that Members on both sides of the House will be heartened to hear that growth in the construction sector is at an 11-month high, and I hope that they would all agree that that is something we need to build on.
Sir George Young
I am grateful to my hon. Friend. He reminds the House that under Labour, house building fell to its lowest peacetime rate since the 1920s. He will have seen the announcement by the Minister for Housing and Local Government on Monday about the NewBuy scheme, which will give new purchasers the opportunity to buy their first home without having to find a huge deposit. I hope that this will help to kick-start the building industry, and that builders will buy lots of bricks manufactured in his constituency.
Damian Hinds (East Hampshire) (Con)
A Westminster Hall debate this week debunked a whole string of myths about the Government’s work experience programme. May we have a debate in Government time on how we can move on, grow that programme, get more employers on board and, crucially, give Opposition Members an opportunity to break the Labour party’s eerie silence and express their support for helping young people on the road to work?
Sir George Young
I agree with every word my hon. Friend has said. It is worth remembering that some 50% of those who do work experience then find a job. We all have a role to play in our own constituencies by encouraging more employers to offer work experience to constituents who are looking for jobs, and I welcome the fact that more and more employers are offering work experience. I would welcome a debate, which might take place in the context of the Budget and would provide Opposition Members with an opportunity to show their hand and, on reflection, hopefully support the initiatives that the Government have introduced.
Mr David Nuttall (Bury North) (Con)
May we please have a statement on how the one-in, one-out policy on regulation applies to private Bills? This week the London Local Authorities and Transport for London (No. 2) Bill received its Third Reading, and there are two further private Bills in the pipeline, all of which will add more to the mountain of regulation.
Sir George Young
Repealing regulation might require a Bill to be introduced, so it would be somewhat perverse if a Bill that introduced deregulation counted as more regulation, but I take my hon. Friend’s point, which he has developed—at some length—during debates on private business. We are determined to reduce the burden of regulation. He mentioned the one-in, one-out policy. There has been a review of regulation, and I hope that we can announce more progress on relieving businesses of the burden of red tape in due course.
Andrew Jones (Harrogate and Knaresborough) (Con)
We learned this week that the trade deficit for January was better than expected, one of the factors being strong exports of cars to the United States and to Brazil, Russia, India and China—the BRIC countries. We have also learned some further encouraging news from the automotive sector, with increases in production for Land Rover and Nissan, and data published this morning suggest a sector-wide production increase of almost 20% year on year. Of course, the vast majority of cars made in this country are exported. May we please have a debate on the progress we are making on rebalancing our economy towards manufacturing and exports?
Sir George Young
My hon. Friend reminds the House of the encouraging news about the motor industry, particularly our success in export markets. We had the good news about Nissan and about Land Rover providing more jobs in Merseyside. I hope that in the Budget debate he will be able at greater length to give examples of success in regenerating the manufacturing sector and getting a more healthy balance, with less reliance on financial services and more reliance on manufacturing, engineering and industries of that nature.
Mr Speaker
I am grateful to the Leader of the House and to colleagues, whose succinctness enabled 44 Back Benchers to question the Leader of the House in 43 minutes of exclusively Back-Bench time.
Speaker’s Statement
Mr Speaker
I have received a report from the Tellers in the Aye Lobby for the Division at 4.21 pm yesterday on the Question that amendment 2 be made to the Water Industry (Financial Assistance) Bill. The hon. Members for Midlothian (Mr Hamilton) and for Rochford and Southend East (James Duddridge) have informed me that the number of Aye votes was erroneously reported as 231 rather than 222. I will direct the Clerk to correct the numbers in the Journal accordingly. The Ayes were 222 and the Noes were 300.
Points of Order
(12 years, 1 month ago)
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Mr Chuka Umunna (Streatham) (Lab)
On a point of order, Mr Speaker. Two written ministerial statements have been issued in the past two hours. One is the Government’s announcement on proposals for the reform of our competition regime, and it was sent to the Vote Office at 10.10 am, 20 minutes before Business, Innovation and Skills questions. The other relates to a consultation on no-fault dismissal, which the Vote Office received at 10.30 am, when Business questions started. Clearly, those are both matters of huge national importance.
First, the deadline for applying to you for an urgent question is 9.30 am, Mr Speaker, so the timing of the publication and appearance of the statements meant that we were not able to make such an application on those statements. Secondly, we were not given any time to prepare in a way that would have enabled us to raise during Business questions any issues to which the statements related.
Were you, Sir, given any notice of the statements in advance? Have you—[Interruption.] Have you been given any notification that we can expect oral statements on those matters of national importance—
The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)
This is outrageous.
Mr Speaker
I am grateful to the hon. Gentleman for his point of order. I received no advance notification of the Government’s intentions beyond that which was on offer to, and could be seen by, Members of the House as a whole. The Government did give notice of their intentions on the Order Paper today.
I note, however, the hon. Gentleman’s further inquiry, namely whether I have had any indication of any Government intention to make an oral statement on either or both matters to which he refers, and my answer to that is no.
The wider response to the hon. Gentleman is that nothing disorderly has occurred. It is helpful to the House to have the maximum possible notice, and I can understand his disappointment that some of those matters appeared in the Vote Office, in the form of documentation, only at the time when Business, Innovation and Skills questions were taking place. He may think that that is unseemly or disappointing, and it may be something that he would not himself be inclined to do, I do not know, but nothing disorderly has taken place.
Mr Christopher Chope (Christchurch) (Con)
On a point of order, Mr Speaker. The Leader of the House, in responding to my question about the Government’s definition of equality, said that the issue of extending civil partnerships to heterosexual couples was part of the consultation being launched today, but I refer you to paragraph 1.5 of the consultation document’s executive summary, which states:
“The consultation therefore, does not look at reforms to civil partnerships, for example opening up civil partnerships to opposite-sex couples.”
May we have a statement from the Government either adopting the policy endorsed by my right hon. Friend on the Front Bench, for which I would be very grateful, or putting him right so that he has to correct the record?
This is a very important issue, because you will recall, Mr Speaker, that when people served on the Standing Committee on the Civil Partnerships Bill, some of us, particularly myself, moved amendments stating that civil partnerships should be available to heterosexual couples, and we were told then that civil partnerships were the exclusive domain of same-sex couples because there was no such thing as gay marriage. Now the situation seems to be changing, but there needs to be some equality-consistency on the part of the Government.
Mr Speaker
My response to the hon. Gentleman is as follows. First, he has a beady eye and is a keen student of detail, and I am not in any way surprised that he is familiar with the detail of the consultation document and has studied the various numbered paragraphs. He has made his point, and it is open to the Leader of the House to respond if he wishes, and perhaps to accept that on that factual point the hon. Gentleman is correct.
Secondly, the hon. Gentleman refers to the Standing Committee on the Civil Partnerships Bill and suggests that I might remember that experience. That experience is etched upon my mind and is likely to remain so permanently, because I remember serving on the said Standing Committee with the hon. Gentleman, and it was—shall we say?—an immensely stimulating and, some might think, a protracted experience.
I feel sure that the hon. Gentleman will find further opportunities to develop his points—on that issue, on the issue as a whole and on particular points that are of concern to him today—in the weeks and months ahead, in the Chamber and possibly elsewhere. If the Leader of the House wants to respond, he can—[Interruption.] But he does not wish to do so.
Sir Roger Gale (North Thanet) (Con)
Further to that point of order, Mr Speaker. Just as a matter of information, you will recall that I had the great privilege of chairing the Civil Partnerships Bill Committee, and the memory of my hon. Friend the Member for Christchurch (Mr Chope) and, I believe, your own is absolutely correct.
Mr Speaker
I am grateful to the hon. Gentleman for confirming the memory of the hon. Member for Christchurch (Mr Chope) and my own. I just mention in dispatches that of course I remember the chairmanship of the Committee by the hon. Member for North Thanet (Sir Roger Gale), which was frankly unrivalled in its brilliance and in its tolerance—characteristic tolerance, of course. We will leave it there.
Backbench Business
Charging for Access to Parliament
(12 years, 1 month ago)
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Mr Speaker
Just before I call the hon. Member for Harlow (Robert Halfon) to move the motion, I should say, for the benefit of the House, that I have selected the amendment in the name of the Chairman of the Finance and Services Committee, the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), and that of the hon. Member for Dunfermline and West Fife (Thomas Docherty).
Robert Halfon (Harlow) (Con)
I beg to move,
That this House accepts the need to make financial savings, but considers that the fundamental principle that the House of Commons is a people’s Parliament should not be put at risk; and concludes that since British citizens pay for Parliament, they should be free to visit it without paying, including the Big Ben Clock Tower.
I am very grateful to the hon. Member for North East Derbyshire (Natascha Engel), the Chair of the Backbench Business Committee. I had problems with the proposals that were debated on Monday evening, but I am glad to say that I shall still vote for her if she decides to stand for a second term. I had to appear before the Committee only twice this time, as opposed to three times last time, but nevertheless I am very grateful.
I thank also the hon. Member for Bolton South East (Yasmin Qureshi) and my hon. Friend the Member for Lincoln (Karl MᶜCartney), who went with me to the Committee, and my Tellers today, my hon. Friends the Members for Cleethorpes (Martin Vickers) and for North West Leicestershire (Andrew Bridgen).
Above all, I must thank the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), the Chairman of the House of Commons Commission, because on any problem that I have had in dealing with this issue he has at all times been courteous and, I would say, outstanding. Although I may have disagreements with him, I believe that he is an outstanding Chairman, and I wish I had the chance to vote for him—were the Commission democratically elected.
I have three points to make in this debate about the planned charges for access to the Big Ben Clock Tower. First, the decision is unprecedented but nevertheless creates a dangerous precedent; secondly, it has been decided in a somewhat undemocratic manner; and thirdly, it is unnecessary and unaffordable. I shall deal with those points in turn.
It is true that the House of Commons charges for tours when Parliament is not sitting, but this is the first time that it has chosen to charge for tours during parliamentary hours and, particularly, for tours organised by Members. Those who support the charges argue that Big Ben is not part of our democracy but simply an adornment—a luxury, if you like. That is patently not true. Big Ben is not only the most recognisable British icon in the world, but the most recognisably parliamentary icon.
Thomas Docherty (Dunfermline and West Fife) (Lab)
Surely Her Majesty the Queen is the most recognisable icon in the world.
Robert Halfon
I am delighted to see that Labour Members have suddenly become monarchists after all these years.
Brandon Lewis (Great Yarmouth) (Con)
A couple of weeks ago, I was at a primary school in Great Yarmouth where people were asking about coming down to the House to Commons for a tour. The young children, who were five and six, were talking specifically about Big Ben. The head teacher said that they would love to come here but coming all the way from that part of Norfolk is expensive enough as it is. Does my hon. Friend agree that adding a charge for Big Ben—the very thing that some of those children want to come and see—would put it beyond the reach of people in areas such as Great Yarmouth?
Robert Halfon
As so often, my hon. Friend speaks for the common man. He is absolutely right. He will see from some of my later remarks that I completely agree with him.
Charlie Elphicke (Dover) (Con)
My hon. Friend—our mutual hon. Friend—the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) has the unenviable task of having to balance the budget for the Administration Committee. Is it not better to treat the Houses of Parliament in the same way as museums, with free access as a principle, rather than balancing it off the back of the Administration Committee?
Robert Halfon
My hon. Friend, as always, makes a very good point. I will talk about those issues later.
The history books tell us that the bells of the Great Clock of Westminster rang across London for the first time on 31 May 1859, and Parliament had a special sitting to decide on a suitable name for the great hour bell. Many suggestions were made during the course of the debate. It is alleged that the Chief Lord of the Woods and Forests, Sir Benjamin Hall—a large and ponderous man known affectionately in the House as Big Ben—rose and gave an impressively long speech on the subject. A wag in the Chamber shouted out, “Why not call him Big Ben and have done with it?” The House erupted in laughter, and Big Ben had been named. There are many other stories about why Big Ben is called Big Ben, but I use that as an illustration of its importance: when the bell was brought to Parliament, there was a parliamentary debate to show how central it is to our parliamentary democracy.
Kevin Brennan (Cardiff West) (Lab)
If I may disagree gently with the hon. Member for Dover (Charlie Elphicke), this place is not a museum but a democratic institution and Members should be able to arrange for their constituents to visit every part of it free of charge. I congratulate the hon. Member for Harlow (Robert Halfon) on the debate. He is right that this could set a precedent. If we start hiring this place out to corporate bodies, massive banks and so on, there is a danger that we will lose the essence of this democratic House.
Robert Halfon
The hon. Gentleman has hit the nail on the head. In my conclusion, I will repeat some of the things that he said. He points to a very great danger as regards what our Parliament may become.
Mr David Burrowes (Enfield, Southgate) (Con)
My hon. Friend rightly talks about the different suggestions as to why Big Ben is called Big Ben. I do not want him to lose sight of part of the argument, which is that Big Ben is not just for Parliament but for the wider populace, and part of popular culture. Indeed, many say that Big Ben was called Big Ben because of Benjamin Caunt, a prize fighter who had a rather large stomach. That shows its attraction to the public and why we must make it as accessible as possible.
Robert Halfon
My hon. Friend, who has been a friend for many years, is absolutely right. It is clearly not true to say that Big Ben is an adornment and is not part of our democracy. Moreover, those who claim that it is not part of our democracy and then say that we do not charge for tours elsewhere might ask themselves why we charge for tours during the summer and at weekends.
As I said, the proposal is unprecedented but creates a dangerous precedent. Now that this has been suggested., what will happen in a few years’ time when it is proposed to charge to go through Westminster Hall or to see the Royal Gallery? The hon. Member for Caithness, Sutherland and Easter Ross, the Leader of the House, the Speaker and so on will say that of course nothing like that would ever happen. I agree with them, in the sense that they are benign individuals, but who is to say that in future years there will not be such benign individuals and that these decisions will not be made?
Dr Andrew Murrison (South West Wiltshire) (Con)
Does my hon. Friend accept that there is a clear distinction between viewing democracy in action here in the Chamber from the Gallery, and in Committee Rooms, and touring Big Ben? The tour is fascinating—one can see the mechanism of the clock and the little room in which MPs were incarcerated—but in no way is it central to our democracy, unlike viewing, and being able to be part of in some small way, what goes on in this Chamber and in Committee Rooms. There is clearly a distinction between the two.
Robert Halfon
That is where I have a fundamental disagreement with my hon. Friend and with people who believe that we should charge for visiting Big Ben. I believe that Big Ben is central to the whole of Parliament, and the symbol of Parliament. If one asks anybody what is the one symbol of Parliament in the United Kingdom and across the world, they will say it is Big Ben. It is completely wrong to say that it is just a separate tourist thing.
Mr Nigel Dodds (Belfast North) (DUP)
I congratulate the hon. Gentleman on bringing this motion to the House. He is absolutely right to say that Big Ben is integral to the fabric of democracy and the institution here at Westminster. I know from personal experience that one of the first things that visitors coming from Northern Ireland say is, “Is it possible to visit Big Ben and go up the tower?” It would be outrageous to charge people to do that who have come all the way from Northern Ireland and paid their air fares; it would put them off coming to Westminster.
Robert Halfon
The right hon. Gentleman is right. People in Northern Ireland have been victims of terrorism, and they will know that the bells of Big Ben rang through the blitz and have a central part in everything good about being British.
This is an undemocratic decision because it has been made by the House of Commons Commission. The decision opens a can of worms. Yes, there have been consultations, chats, discussions and e-mails with MPs, but surely we in this House should have a say over major decisions about the costing and planning of expenditure at Westminster. The Commission says that we have to cut 17% from Parliament’s budget. I recognise, as does everybody else, that we have to make cuts. The 17% figure might be the right one, but it might be the wrong one—perhaps it should be 20% or 15%—but we in this House and in this Chamber have had no say in it, and that is wrong. The Commission should come to the House and present a list of the savings it is making, and then MPs should have the right to say whether they agree or disagree and answer to our constituents as to whether we are giving the taxpayer value for money.
The plans to charge for Big Ben raise much wider issues about the remit of the House of Commons Commission and whether Members should be elected to it.
Kate Hoey (Vauxhall) (Lab)
I fully support the hon. Gentleman’s motion. He is talking about savings in the House, but very much of what the Commission does is totally undemocratic. We never get asked about it and suddenly find out things from other people who work in this House. Does he agree that over the past five or six years what happens in the House has become incredibly top-heavy, with managers who are managing everything and have no understanding of what is going on at the bottom here in the House of Commons?
Robert Halfon
I do agree. Sadly, that is true of the whole public sector, not just Parliament, but the hon. Lady makes a very powerful point.
My next argument is that the decision is unnecessary. The Commission states that Clock Tower tours cost roughly £93,000, which will go up to about £111,000 over the next year or so. I would question that. Now that we are going to bring in charges, I suspect that not as many people will be able to afford to come here. I know from an e-mail that I have received that up to 200 people have e-mailed to ask for Clock Tower tours as soon as possible to try to avoid the cut-off date.
As I said, Parliament needs time to debate where these savings could be made. We need to think first in generalities, but I will offer some specific savings for Members to consider. We could look at the cost of publications and press cuttings. As regards the dining rooms, on Mondays they are barely used at lunchtime, so one of them could be closed at those times, saving a fair bit of money. Then there are the properties owned by the House of Commons. I am particularly disturbed about the waste of food in this place, which is absolutely obscene. I therefore welcome the ten-minute rule Bill on the subject of food waste that was introduced by the hon. Member for Bristol East (Kerry McCarthy) yesterday. The other day, when I went to the Members Dining Room, I asked the staff, who are wonderful and hard-working, “How many people have been in here today?”, and they said “About three.” This was a Monday lunchtime, and there was a huge banquet of food, as there always is. I asked what happened to the food, and they said, “It has to be thrown away.” I replied, “Well, why can’t it be given to charity or why can’t less food be made?” The answer on the charity point was that they might be sued if the food was contaminated and somebody got food poisoning.
I tabled a written question to ask the House of Commons Commission how much food was thrown away in the last year. The answer was the shocking figure of £100,000-worth. That cannot continue. When we are looking for savings, we should look at that issue seriously. Again, MPs should have a chance to debate this matter.
Sir Roger Gale (North Thanet) (Con)
On the issue of savings, my hon. Friend said that the cost of the Clock Tower tours is about £100,000 a year. Given that the tours are likely to diminish in number as a result of charging, has anybody told him what the cost will be of employing the person to administer the charging scheme, and does he know how much the administration of the project will cost in total? I suspect that it will be more than £100,000.
Robert Halfon
My hon. Friend, as so often, has come up with a very good question, which I hope the Chairman of the Commission or the Leader of the House will answer.
We cannot talk just in generalities, so I will propose some real savings to the Commission.
Mrs Anne Main (St Albans) (Con)
I will expand on this point in my contribution, should I catch the eye of Mr Deputy Speaker, but I have discovered through questioning that there are additional ongoing costs of £1.5 million simply for Parliament to come back for two weeks and then be off for another two weeks in September. If we compressed that time and did not have a break for party conferences, which are for political purposes after all, we could save £1.5 million.
Robert Halfon
With that point, my hon. Friend augments my argument that we should be able to debate savings on the Floor of the House, and not just through consultations or by filling out surveys, which people rarely notice among their e-mails.
I am grateful to the director of the savings programme and the Secretary of the Commission for providing me with a lot of detail about the important work that the Commission is doing to save money. I recognise that a lot of savings are being made. However, let me add a few ideas. We could cut corporate initiatives by an additional 10%, which would save £150,000 a year and leave 80% of the original budget. We could trim overseas trips and delegations by just another 10%, which would save £125,000 a year and leave 80% of the original budget. We could streamline parliamentary outreach by just another 10% in both the House of Commons and the House of Lords, which would save £194,000 a year and leave 80% of the original budget. The total savings from those things would be £469,000 a year. Hon. Members may have other ideas, but we have never had the chance to debate properly on the Floor of the House what savings there should and should not be. That is why the decision that has been made is fundamentally wrong.
I have also said that this decision is unaffordable. We received an e-mail late on a Friday afternoon a couple of weeks ago, saying that individuals would be charged £15 a head. A family of four would therefore have to pay £60. For people on average earnings of just £20,000-odd, that is unaffordable. It will therefore discourage people from coming to Parliament and coming to see Big Ben. To return to the precedent argument, even if that figure was reduced—I accept that the Chairman of the Commission has said that it will consider that—it would be likely to increase in future years. First it will be £15. In two years’ time it might be £20, then £30, and then £40 or £50. Where does it stop?
Andrew Bridgen (North West Leicestershire) (Con)
Does my hon. Friend agree that one of the most important pillars of our democracy is transparency, and that part of that transparency is that this Palace is open to the public? We should encourage the public to visit their Parliament—it is not just our Parliament—and should not put them off with petty charges.
Robert Halfon
My hon. Friend makes an important point. My view is that the House of Commons Commission has come up with the easy option. Money needs to be saved, so why not target members of the public, who cannot really fight back, by slapping on a charge? That is the easy option, which is why I believe the decision is so wrong.
A leaflet that is sold in most of the tourism shops around Westminster states:
“Who owns Big Ben? You do! If you are a citizen of the UK, and if you pay taxes, you are one of the owners of Big Ben. In fact, you own the whole clock tower and the Houses of Parliament too!”
That is something that the British people believe. That is why it is so wrong suddenly to institute charges for people to come to see their heritage. In essence, it imposes double taxation because people pay for Parliament anyway.
Chris Heaton-Harris (Daventry) (Con)
I am interested to hear my hon. Friend’s comments. He mentioned that this is about British taxpayers. As no foreigner is currently allowed up Big Ben, so we have obviously managed to twist the rules on how we treat these dodgy foreigners. Should we not stitch them up, as we do in the summer, and charge them to go up the Clock Tower?
Robert Halfon
I can always rely on my hon. Friend to ask such a question. I have no objection to people who are not British citizens paying to come into Parliament.
Mrs Main
Perhaps I can be helpful, because I have looked into that very point. The reason given is that it takes two weeks to provide security clearance and to do passport checks before people are allowed to go up Big Ben. That might not be possible for visitors, foreign or otherwise. That might be the answer.
Robert Halfon
I am grateful to my hon. Friend for that information. I hope that these points are brought out in discussion.
In conclusion, I have a romantic belief in Parliament. I still genuinely believe that this is the best Parliament in the world, even with all the problems that we face as a country. I came here as a small boy when I was 10 years old, and from that day on, I wanted to sit in this place. We have to make our Parliament a special place and encourage people to come here. The hon. Member for Cardiff West (Kevin Brennan) made an important point a moment ago. I worry hugely that, rather than being a Parliament for the people, this place is becoming—
Robert Halfon
As my hon. Friend says, it is becoming a theme park. It is advertising itself for weddings, bar mitzvahs, engagement parties and big corporate entertainment shows. I have no problem with businesses coming here and having dinners at which particular issues are discussed. However, this is not a theme park. We should not be selling ourselves short to businesses and hiring ourselves out to them when ordinary people cannot come here. Businesses will inevitably be privileged over ordinary people. I am reminded of the parable of the moneylenders at the temple. Let us not become a place of moneylenders and be just about money, money, money; let us be the Parliament of the people, by the people, for the people.
Dr Murrison
On that rather churchy theme, does my hon. Friend not accept that people who want to pray in our great cathedrals do so, of course, free of charge, but that people who visit them as sightseers are invited to pay a fee? In a similar way, people who wish to participate in democracy here can view the proceedings, but if they want to be sightseers in the tower, they should perhaps be invited to contribute.
Robert Halfon
I have two points in answer to that. First, Parliament is part of our democracy and so is slightly different. Secondly, people who go to churches do not already pay for local churches through their taxes. We already pay for Parliament through taxation, so why should we be taxed again?
Finally, perhaps the House of Commons Commission could set up a foundation to look at the heritage of Big Ben and to keep Big Ben tours free. In the interests of that, I will make a pledge to the Chairman of the House of Commons Commission. Some Members will know that I have difficulties with my legs. I pledge to walk up Big Ben to raise money so that we can keep our Parliament free for all our citizens and to ensure that many people can come to see our greatest landmark for many years to come.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I have to bring in a time limit of six minutes owing to the number of Members who wish to speak. The arguments have already been well rehearsed and I am sure that people will only want to add to them.
John Thurso (Caithness, Sutherland and Easter Ross) (LD)
I beg to move an amendment, to leave out from ‘risk’ to end and add
‘and invites the Commission to reconsider its current proposal to charge for Clock Tower tours.’.
I begin by congratulating my hon. Friend the Member for Harlow (Robert Halfon) on securing the debate and on speaking to his proposition so passionately and eloquently. May I first correct one or two small points of fact? I am not actually the Chairman of the Commission, and Members of the House did vote for him, because it is ex officio the Speaker. He is always the Chairman of the Commission. I am merely its representative, tasked with speaking on occasions such as this and answering my hon. Friend’s many very good questions.
I should like, if I may, to divide my hon. Friend’s motion into two parts. I shall speak initially to the first part of it, with which I entirely agree, and then to the second part, with which I have some difficulties. I will then suggest to him that he and other hon. Members might like to accept my amendment, which I hope is a gracious way forward that will enable the Commission to take on board all the points made in the debate, reconsider the matter and see how best to accommodate what has been said.
May I pick up on a couple of points that have been made? My hon. Friend spoke about the waste of food. I am a qualified caterer—it was what I used to do for a living, and I am a fellow of a variety of professional bodies. Food wastage here is below the average for professional caterers. At the end of the day, there are always things left over on a plate, and they get thrown away. There is always a degree of food wastage, but the wastage here is at a much lower level than in many commercial companies and the House works extremely hard to keep it down.
Thomas Docherty
Perhaps the hon. Gentleman will also note that there has been more wastage in the evenings, because there are fewer Members here owing to the Government having no business and therefore constantly running a one-line Whip.
John Thurso
The hon. Gentleman might say that; I think I will move rapidly on.
On the first part of the motion, I thank my hon. Friend for succeeding, in one debate, in giving more publicity among Members to the savings programme than I have managed to do in the past 18 months. In fact, the process began shortly after the election and continued through 2010. I have carried out a number of consultations and had the honour of speaking to various party groups. I have twice been honoured to appear in front of the 1922 committee. All the points that have been set out in the current savings programme were contained in the consultation documents that were put out, as they were in e-mails, reminders and a number of surgeries for which I made myself available. The Commission and the management have tried very hard to consult Members on all aspects of what is proposed.
John Thurso
I cannot update the hon. Lady on that point at this particular moment.
At a time of national austerity, when we are seeking to reduce the cost of public services to the taxpayer, it is absolutely right that Parliament and parliamentarians are in the vanguard. Indeed, it would be absolutely wrong to exempt ourselves from that process.
Sir Bob Russell (Colchester) (LD)
I appreciate that my hon. Friend is trying to gain consensus, but I fear he is failing. I was on the Administration Committee, and I was bored to tears and managed to escape. May I ask him when the House agreed to the total savings programme that his Commission is forcing through?
John Thurso
The Commission put forward the overall figure of 17% savings in real terms during the summer of 2010. That figure informed all the documentation that has come out since, and it is the target. I actually hope that we can go further than that, because the process has demonstrated that many of the ways in which we do things have remained unchanged for many years, decades even. When they have been properly examined and re-engineered, it has been found that there are real and considerable savings to be made, not only monetary savings but increases in the efficiency of our work patterns.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. May I remind the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) that he is up against the clock, and that when he gives way he is not getting any extra time?
Jake Berry
How can we be talking about charging people for tours of Big Ben when we still have people who work in the House occupying grace and favour mansions at the taxpayer’s expense?
John Thurso
I accept the hon. Gentleman’s point, but you have just reminded me, Mr Deputy Speaker, that I have substantial progress to make in a very short time, so I will move on.
In 2004-05, the estimate—our total cost—was £189 million. In 2009-10, it was £278 million. Even taking out the one-offs and exceptionals, that was an increase in excess of 25% in the cost of this place in five years, more than twice the rate of inflation. This year, the out-turn is expected to be in the order of £205 million to £206 million, which is a substantial saving. The programme has been undertaken by the Management Board, and I think it has done an excellent job of examining very professionally what is going on. I see that the hon. Member for Vauxhall (Kate Hoey) is leaving her place, but before she does so, may I say to her that I do not believe there are too many managers here or that they are distant from those at the bottom? The board is well constructed and does its very best to ensure that it is in full touch with both the staff and Members’ needs.
There is no question, nor has there ever been, that access to the Palace and the parliamentary process will be charged for at any time. However, I put it to hon. Members that we get more than £1.5 million in income from tours. We have been charging for summer tours for 10 years, and we are piloting art tours for which we charge £15. I say in parenthesis that the other place charges £30 for its tours—I do not know whether the art is better. We have a long history over the past 10 to 15 years of opening up the parts of this place that are not available to the public for a variety of reasons, and recovering the specific costs of doing so. I put it to my hon. Friend the Member for Harlow that what we are proposing for the Clock Tower is very much in line with that principle.
I invite my hon. Friend to accept my amendment, which would allow the Commission and the Finance and Services Committee, which I chair, to consider the points that he has made, take them on board and return with an appropriate proposal. I ask him and other hon. Members to accept that as a better way forward. The answers to all his other questions will have to wait for another day.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I support the amendment in my name and that of the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso). The approach to the subject is bipartisan, and I note that there are Members on both sides of the House speaking for the amendment or the motion.
I am a member of the Administration Committee, which is a far duller Committee since the hon. Member for Colchester (Sir Bob Russell) is no longer a member. The Committee was consulted by our colleagues on the Finance and Services Committee prior to the proposal going to the Commission. I accept that the workings of the Administration Committee are not the most exciting, but we have been appointed by our peers, so to speak, in this place. I remind the House that the Members who represent their parties on the Commission have to be agreed to in a motion in the remaining Orders of the Day. However, I accept the point made by the hon. Member for Harlow (Robert Halfon) that it is not the most transparent process.
Kevin Brennan
Is not the difference in principle between the summer tours, which the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) mentioned, and the Clock Tower that while the paid-for summer tours are going on, Members can still have their constituents in and take them around for free? That is not the proposal for the Clock Tower. It is a completely different matter.
Thomas Docherty
That is entirely why the hon. Member for Caithness, Sutherland and Easter Ross and I propose that the Commission be asked to look at the detail. It occurs to me that a more pragmatic way forward is to take away the privilege that only Members of Parliament can decide who goes on the tour. If we genuinely want to open up Big Ben, we could take Members out of the equation and give all members of the public that opportunity. That might be the way forward. I hope in that spirit that the hon. Member for Harlow will support the amendment.
I do not wish to be political, but many of my constituents would look with some surprise on some of the arguments being proposed not by the hon. Member for Harlow, but by other hon. Members who might speak in the debate from the Government Benches. They would be surprised that, at a time of cuts to benefits, and cuts to support for our armed forces and front-line workers, hon. Members think that Clock Tower access is a priority for public spending. Many of my constituents would find that wrong.
Sir Roger Gale
As the representative of the Commission did not have the time to answer this question, perhaps the hon. Gentleman can answer it. Will the administration and the person hired to administer the scheme cost more than the amount saved?
Thomas Docherty
I can absolutely assure the hon. Gentleman that that will not be the case. It is important, however, that we take the opportunity to look carefully at the best way of administering access. My view is that it should be administered in the same way as central tours.
Charlie Elphicke
As the hon. Gentleman has made a political point on deficit reduction measures, how can he justify the continuation of grace and favour apartments? How can he justify the parliamentary outreach programme? Surely we should have a parliamentary in-reach programme to encourage people to come and see the great work done here. It is not a museum, but the working heart of our democracy.
Thomas Docherty
I am most grateful to the hon. Gentleman for making that point and I entirely agree with him. As you know, Mr Deputy Speaker, I have repeatedly raised in the House at business questions the issue of grace of favour apartments, because those arrangements need to be looked at.
Thomas Docherty
I need to make progress.
On accessibility, the hon. Member for Dover (Charlie Elphicke) may wish to know that only seven of his constituents have taken the opportunity during his term of office to come and see the Big Ben Tower. If we are to find money for transparency, it would be better to take Parliament to places more far-flung than central London.
Jake Berry
I intervened during the previous speech on the issue of grace and favour apartments. Will the hon. Gentleman confirm whether any discussions have taken place with the Chairman of his Commission as to whether his grace and favour apartment should be surrendered?
Thomas Docherty
I was not aware that the right hon. Member for Saffron Walden (Sir Alan Haselhurst) has a grace and favour apartment. Perhaps the hon. Member for Rossendale and Darwen (Jake Berry) knows something I do not—the right hon. Member for Saffron Walden, who is in his place, is the Chairman of the Administration Committee, of which I am a member.
I should make progress on the point I was making. The hon. Member for Harlow made a point about the 17% saving, but I should point out that that is the Government’s figure—
Jake Berry
On a point of order, Mr Deputy Speaker. Could you give me some guidance as to a remedy? The hon. Gentleman did not hear what I said. I referred to the Chairman of the Commission.
Mr Deputy Speaker (Mr Lindsay Hoyle)
That is a point of clarification and it has been well made.
Thomas Docherty
I am most grateful for that point of clarification. I thought the hon. Member for Rossendale and Darwen (Jake Berry) had referred to the Administration Committee, so I apologise to him for that. The right hon. Member for Saffron Walden will also be most relieved that that has been cleared up.
The coalition Government said that 17% should be the average saving across public spending. That is why the Commission—rightly or wrongly—set that target. You, Mr Deputy Speaker, know that my view is that it is wrong, but if we are to meet that target, some difficult decisions have to be made.
Let us also be clear that the proposals are not about profiteering. This is not about making money, but simply about recouping the costs of running the tours.
Robert Halfon
Is the hon. Gentleman aware that roughly 60 of my constituents have come on Big Ben tours? Tomorrow, 15 people from the Prince’s Trust are coming and I will meet them all. How can we justify telling those people that they have to pay £15 a head to come and see Big Ben?
Thomas Docherty
The hon. Gentleman is absolutely right that there is a difficult choice, but the reality is that we must make cost savings. He knows that there are difficult decisions to make. I see the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns), chuntering away next to him. He knows more than anybody that the real-terms cuts—they have been made in his Department—are difficult, yet he does not say that we should not make them. [Interruption.] Real-terms cuts have been made.
We are not all in this together. Members on both sides of the House do not recognise that the House needs to show fiscal responsibility.
Thomas Docherty
No. I have given way enough and the hon. Lady is on the list of speakers.
We must make fiscally responsible decisions. Those are not choices that any of us wish to make, and I agree with the hon. Member for Harlow that we should look carefully at whether or not we proceed and how the proposal is implemented, but I hope he therefore graciously accepts the amendment. We can then look at the fine detail.
We must accept, however, that some difficult choices must be made. We should not for a second interfere with the rights of our constituents to come and see how the democratic process works—that should be an absolute red line, and hon. Members on both sides would not allow those rights ever to be compromised. However, I say again that if we are to be taken seriously and show the public that we mean what we say about the need for fiscal responsibility, that must begin at home.
The Leader of the House of Commons (Sir George Young)
For the purpose of this speech, Mr Deputy Speaker, I propose to regard myself as a Back Bencher and to stick very strictly to the six-minute limit. That is appropriate, because I speak as a member of the Commission. This is not a Government issue, but very much a matter for the House.
I commend my hon. Friend the Member for Harlow (Robert Halfon) for his energy in pursuing this matter and for finding time for a debate. There is a genuine risk in unpicking a budget that has been put together and taking one item out without knowing what the consequences will be. That is why I am in favour of the amendment, which invites the Commission to have a look at the proposal in the light of the very strong views that have been expressed in the debate and to come up with alternative proposals. That would be a responsible way forward, rather than taking that particular item out and then obliging the Commission to find some other measure, which for all I know might be even less acceptable to the House than the one that is before it.
I agree that the House needs to accept the same discipline to make economies that has been imposed on other public bodies, and I support the commitment to reduce the annual costs by 17% by 2014-15. We are having to make exactly the same difficult decisions as public bodies in our constituencies. There is no easy way out of this.
The proposal to charge for visiting the Clock Tower was included in a package of proposed initial savings back in November 2010. From memory, there was no violent reaction when that was floated some 18 months ago. I should say to my hon. Friend that there is a distinction between the public having free access to lobby their MPs, to see the Chamber, and to view the work of Public Bill Committees and Select Committees, and access to the Palace as a visitors attraction. That principle has been conceded: visitors already pay to visit the Palace of Westminster for tours on a Saturday. That has already been accepted by the House.
Kevin Brennan
But at the same time as those paid visits take place, hon. Members can bring along their constituents for free. It is therefore not the same.
Sir George Young
One advantage of the amendment is that we could look at whether visits to the Clock Tower should be free if the Member of Parliament accompanies visitors, in the same way that we can take people around the House.
We could look at that option if that would meet the point that the hon. Gentleman makes, but the ability to climb the Clock Tower is not essential to the enhancement of our democracy or an insight into how the political system works. There is a difference between access to the Clock Tower and access to the Chamber.
Sir Roger Gale
I am very grateful to my right hon. Friend. If the Clock Tower is not important to the democratic process, and if it is not the symbol of the United Kingdom democracy, why did Hitler spend so much time trying to bomb it out of existence?
Sir George Young
No one is suggesting that we should pay to look at Big Ben. The Clock Tower would remain as a visible icon. My hon. Friend would be free to look at it and we are not debating that—we are looking at the option of charging for going up it.
My hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) has done something that no one else who has held his position has done. He has come to the Back Bench committee of my party twice and answered questions about economies. I suspect that he has also been to parliamentary Labour party meetings. The process of consultation about the measures necessary has been very wide, and I commend what he has done.
I hope that my hon. Friend the Member for Harlow is minded to accept the amendment, which is the responsible way forward, so that the Commission can revisit the decisions in the light of the strong views that have been expressed. That would allow us to think again and come forward with some alternatives. I hope that on reflection, having listened to the debate, he will feel able to accept the amendment so ably moved by my hon. Friend the Member for Caithness, Sutherland and Easter Ross.
Ms Angela Eagle (Wallasey) (Lab)
I congratulate the hon. Member for Harlow (Robert Halfon) on his persistence in getting this debate and on his passionate advocacy of the position that he has taken. However, I hope that the House will accept the amendment moved by the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) for the Commission to have another look at the issue.
My hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) made the profoundly true observation that we, and all our constituents, are struggling with how to prioritise difficult decisions in tough times, and this is one such example. We are not in an ideal world where perhaps all access to this building could be free, but we have to make the savings that—at the beginning of this Parliament—Mr Speaker, in his role as head of the House of Commons Commission, committed us to making.
It is also important to remember that this issue is about the Clock Tower, not about access to this building in its working sense as a Parliament. Our constituents will still have free access to see their Members of Parliament and to watch proceedings in the Chamber from the Public Gallery, as well as to visit Committees. I for one would not support the amendment if I thought that there would be any slippage in that very important principle. We need to separate the two issues, although I do understand the worries that people have.
Mr Stewart Jackson (Peterborough) (Con)
I agree with some of the hon. Lady’s basic tenets, but is it not true that as a result of the opaque and antediluvian nature of the Commission and the Management Board, we are effectively held accountable for decisions over which we have had no real, effective or demonstrable say?
Ms Eagle
That is a very timely intervention from the hon. Gentleman as I was about to deal with that point, especially as I am a very new member of the House of Commons Commission. I have been in the House for 20 years and always thought that the way in which the House was managed was rather antediluvian and opaque, to put it kindly. I expected when I was given this job that I would dash into the Commission and everything would be revealed. I thought that I would see how the House and all of its domestic Committees worked. I have to confess that after a few months I am still rather of the hon. Gentleman’s view, and light, transparency and more debate about such matters should be organised. We need to think as a Parliament about how we can bring that about.
We are all busy. Doubtless everybody read the e-mails that were sent in 2010 about this issue, but perhaps they did not fully take them in. I therefore have much sympathy with the hon. Gentleman’s point, and we should consider how we might ventilate the serious issues that the Management Board has to deal with so that hon. Members on both sides of the House become aware of them in a more timely way. E-mails go out, but we cannot force Members to notice them or read them in detail. The system is antediluvian and lacks transparency, and we might want to think about more modern approaches.
Mr Kevan Jones (North Durham) (Lab)
One of the points made by the hon. Member for Peterborough (Mr Jackson) is very important. We have the Administration Committee, which I sit on and which has made various recommendations to the Commission that have been overruled without any justification. Surely that is not a transparent or fair system, especially when we are considering cost savings.
Ms Eagle
I have considerable sympathy with that point, and perhaps we can all thank the hon. Member for Harlow for bringing this issue to the attention of the House so that we can consider how we might manage the House in a more modern way that brings people along at an earlier stage in the process and ventilates some of the darker, cobwebby areas of the old management systems.
Kate Hoey
My hon. Friend talks about Members not necessarily being involved. Does she agree that what seems to be happening more recently is that long-serving and dedicated staff of the Palace—especially at the lower paid level, such as cleaners and others—feel very much that they are taken for granted? They have lost the feeling of being part of a community: they are now part of a tick-box management mentality.
Ms Eagle
It is really important that, as these substantial attempts to save large amounts of money happen, we ensure that the pain is felt as much at the top of the structures as it is at the bottom. The only way we can have a savings process with any legitimacy is if everybody involved is affected equally and the pain is not visited most on those at the bottom or those least able to bear it.
Charlie Elphicke
I completely agree with the hon. Lady. Does she agree that we need to look again at the issue of grace and favour apartments, which do seem outdated in the modern age? Does she also agree that we should look at parliamentary outreach and perhaps talk more about parliamentary in-reach? Parliamentary outreach is perhaps better left to the Electoral Commission.
Ms Eagle
The House should always modernise the way in which it looks at things. I would be happy to see the Commission look at all of the grace and favour apartments and see what they cost. I assume that the information is available, and it should be ventilated. The House should also think about that issue so that we can have a zero-based look at everything that is done. The way that things have been done in the past is not necessarily the way that they have to be done in the future, especially if they can be done more cheaply, but without taking away our special and important position as a House of Commons, given the job we have to do in holding the Government to account and our independence in doing so. We must facilitate the effectiveness of that work so that we do not have false economies.
I congratulate the hon. Member for Harlow on obtaining the debate. I do not feel as strongly about charging for tours of Big Ben as he does, and I hope that the House will support the amendment—so ably moved by the hon. Member for Caithness, Sutherland and Easter Ross—so that the Commission can have another look at the issue.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I have to reduce the speaking limit to five minutes.
Mrs Anne Main (St Albans) (Con)
It is a delight to support my hon. Friend the Member for Harlow (Robert Halfon) in this very valuable debate. I accept completely the surprise expressed by the hon. Member for Dunfermline and West Fife (Thomas Docherty) at the fact that we are focusing on costings when there are so many savings to be made, but then I am surprised that the Commission is focusing on this issue. I wrote and elicited the response that it is costing us £1.5 million every year to have a break for two weeks just because we all choose to go off to party conferences. Surely in this day and age we can make that work. If we saved £1.5 million there, it would give us some spare money to keep the Clock Tower free and open to those who choose to go up it. The number of people who can go up the Clock Tower will always be limited to those able and fit enough to walk up the 344 steps—I have not done it yet—and because we need the clearances put on it.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
Will the hon. Lady give way?
Mrs Main
I will not give way, because I only have five minutes and many other colleagues wish to speak. I am sure that the hon. Gentleman was going to be helpful though.
There are so many other things that we can look at. I have asked various questions about costings here, and was amazed to find out that £750,000 was spent developing a crèche that is hardly ever used. Early-day motions cost Parliament £1 million. When EDMs started out, they were relatively few and far between. In 2009-10, they cost £87,000 but £776,000 to print. That is £1 million. Since then, we have developed online petitions, so there are other ways of flagging up issues of importance to members of the public. EDMs are an outmoded way of doing so. We could scrap them and save another £1 million. There are plenty of ways to save money in this place.
The savings to be made—or not made, if the figures drop off—from charging a mum, a dad and a couple of youngsters £60 to walk up the Clock Tower will be paltry. Potentially, it will cost that family even more if, as a consequence, fewer people go, because the administration costs will remain the same and therefore they will have to ratchet up the prices. It will become something that only wealthy people can do. Many people come here because they want to see inside this place. With great respect to hon. Members and interesting though many of our debates are, many people also come here because of Big Ben. It is in all the London guides that it is free to come in this place. It is one of the few places students can visit for free—the Crown Estate parks are another example of that.
If we are to save money, which I completely agree we have to do, do not let us pick on a relatively small saving in an area that delivers so much pleasure. Even those people, like me, who have not gone up the Clock Tower always believed that at least we could if we wished. That opportunity is there for visitors who might wish to watch a debate and look around the House, but who might also wish to say, “I went up Big Ben.” This is important. What happens once we start picking off little bits of the estate and saying, “We’re charging for this, and we’re charging for that”?
There is some confusion about the fact that we already charge for tours in the summer recess. I say to hon. Members who raised this point, however, that constituents can visit for free on only three mornings a week unless accompanied by their Member of Parliament, in which case it is free with the tour. For most of the summer, then, constituents could be in the barmy position of having to pay to come into the House of Commons, because their MP is not there to accompany them, but then being able to go up the Clock Tower for free. There are daft anomalies in this place, but I do not think that we should be picking on a very small saving when we could be looking at so many other low-hanging fruits which would save a lot of money.
Unfortunately, we are sending the message that this iconic part of our British heritage is closed for business unless someone can afford to pay. That is a bad message to give, and I hope that the House votes for the motion. We do not want to send this back to the Commission. It could have tackled many other bigger issues but it picked this one. It was the wrong one to pick, and the House should be the decider of that.
Kevin Brennan (Cardiff West) (Lab)
I do not normally involve myself in these sorts of debates—like a lot of hon. Members who do not read the relevant e-mails and so on—simply because I trusted in those who take responsibility to do the right thing for us. This might be a lesson to me: perhaps we should take more interest. The issue concerns the principles by which we should go about the fiscal discipline that the House has undertaken. I believe that, because of all the troubles and what has gone wrong in recent years, the House of Commons has decided to beat itself up significantly in all sorts of ways, and this is symbolic of the end product of that.
The principle being breached in this proposal is that hon. Members, when approached by their constituents, should always be able to arrange for them to tour this place, their Parliament, free of charge, accompanied either by their MP or a passholder on their behalf. The Commission should consider that important principle, regardless of whether the motion or the amendment is passed—although I do not know whether that can have the effect of directing the Commission to do anything, to be quite honest.
Sir Bob Russell
I am a long-serving Member of the House. When I arrived here in 1997 representing the premier borough in Essex, which I still do, visitors on tours were charged, but the House authorities dropped it because the administration costs were so great compared with the income.
Kevin Brennan
That is an interesting point. The arrangement that I am suggesting is more practical, which is in addition to the principle that Members should be able to help their constituents tour this place.
We have heard about other things that could be looked at if we are to stick to this 70% real-terms cut over the next few years, including the grace-and-favour apartments. Sometimes in this place, when a stone is lifted, one is staggered to find what is underneath. How many members of the public are aware that there are grace and favour apartments still lived in by Officers of the House? It is astonishing in the 21st century. There is little transparency or ventilation of such matters until something like this makes people prod further under the stone. The Commission should consider very seriously what Members have said about such arrangements.
It is important that people can come here, listen to our debates and see the House operating. It is also important that our constituents, particularly our younger constituents, can come here and understand the history of the constitution of this United Kingdom as expressed through these buildings. This is a modern, purposefully designed Parliament, albeit designed as a modern Parliament for the 1840s and 1850s. However, it was so designed to express our constitution, and I have found that the young people whom I show around this building have understood much better how our constitution works and what our democracy is all about. The very design of this place is a physical expression of the British constitution, and we should remember that. It is very important that our constituents can come here, free of charge, and have an opportunity to understand that.
This proposal is taking us in a dangerous direction. The Commission will see this as a fairly innocuous proposal to raise a bit of revenue, but my fear is that in a few years we will see the supreme irony in this place of huge corporate events and dinners for the bankers—the very people who put us in the mess that necessitates all this fiscal cutting. They will be the only people in here, having their swanky champagne parties and dinners in Westminster Hall or on the Terrace, while our constituents are charged simply for the privilege of looking around their own Parliament. That is where all this is headed. Whether we accept the amendment or the motion, the Commission needs to listen to the voices of people in the House and think again.
Nadine Dorries (Mid Bedfordshire) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on bringing this debate to the House. He seems to have developed a trend and penchant for securing debates that get everybody very excited and hit right on the nerve the issues we want to talk about.
Everybody has said what needs to be said, so I will make only a couple of short, substantive points. I visited years 3 and 4 in a school in my constituency recently. A teacher asked the pupils to prepare questions for when I spoke to the class and to draw pictures of what they thought was my job as an MP. Almost every single picture contained Big Ben, and almost all the pupils thought I worked in Big Ben—that was my job. This charge will affect schoolchildren. Any barrier that we put in the way of schoolchildren coming to the House of Commons to learn about what we do and about democracy and to visit Big Ben is a mistake. We should not be doing anything to prohibit school parties and schoolchildren from coming here.
My hon. Friend the Member for Harlow said that he always wanted to be an MP. Anyone who has known him for many years, as I have, will know that that is true. Since he got here, he has never stopped talking about how he always wanted to be an MP. This place inspires schoolchildren.
Duncan Hames (Chippenham) (LD)
Is the hon. Lady aware that last year 950,000 people visited the Houses of Parliament without taking part in a Clock Tower tour? Clearly none of them was deterred from visiting Parliament by not taking part in a tour.
Nadine Dorries
I take the hon. Gentleman’s point, but I want to keep to the substantive points, as we are down to a five-minute limit.
As everybody has said, Big Ben is owned by the people—the taxpayers. It is their Big Ben, not ours. It is not ours to make such a decision. Richard Branson owns Virgin. No one says to him, “You have to pay to get on your planes”—I should mention, for all the twitterers, that I have received that comment from Twitter. The people own Big Ben, and they should not be charged to visit it. Just as they own the House of Commons, they should not be prohibited from seeing their MPs working in their Committees. People should be not be barred from going up into the Public Gallery, or charged for doing so, to watch what takes place in the Chamber; nor should they be charged to visit Big Ben, because it is all the same. There is the option—I am sure that there must be a way round—of saying that UK taxpayers should not be charged to visit Big Ben. There must be a way of pre-booking tours from overseas where a charge would apply. That would be perfectly reasonable. There must be a way of administering that.
Let me turn to waste in general, which many Members have mentioned. In my previous life, before I became a Member of Parliament, I worked for organisations such as SmithKline Beecham, Pfizer, Shell and Coca Cola-Schweppes. All those organisations, along with many other big corporations, had subsidised canteens and restaurants. The reason they were subsidised was that the overhead costs of the building had been met, so there were no losses from food sales. We have a captive audience in this place for meals in the restaurant from 8 o’clock in the morning, sometimes to midnight, with no overhead or infrastructural charges. Why do the restaurants in this place not make a profit, when they have a captive audience, very long hours and no overhead charges? It must be due to labour costs being too expensive, management being overburdened by costs and inefficiency. If there is inefficiency and money being wasted in this place, it is down to the managers, the Commission and others who are paid to do this work to find out where that waste is. We should not be saying, “Let’s plug the gap by charging people to go up Big Ben,” but then throwing good money after bad; rather, it is about finding out where there is waste at the moment, and there is indeed gross inefficiency and waste.
Those are the only points that I wanted to make. There is huge waste, and we should not be charging British taxpayers to go up what is their own property.
Jim Shannon (Strangford) (DUP)
I rise to support the motion moved by the hon. Member for Harlow (Robert Halfon), and I congratulate him on bringing this matter to the House. I have received a fair bit of e-mail correspondence on this issue, and it is also one that people have spoken to me about personally.
Two years ago or thereabouts, I was privileged to become a new Member of this House. People might say that that was a natural progression from being a councillor for some 26 years and a Member of the Northern Ireland Assembly for 12 years. The reason I mention that is that when I became mayor of Newtownards council, I made it my business as mayor that year to invite as many people as possible from the borough to visit the council offices and see some of the history. I was also one of those people who would drive by the bottom of the Parliament buildings at Stormont, look up at the building on the hill and say, “I wonder what it’s like up there.” When I was elected to the Northern Ireland Assembly and had the opportunity to serve there, I followed the same principle that I had followed at the council. I made it my business to send invitations out to all the people and all the schools, irrespective of whether they were Protestant, Roman Catholic, integrated or whatever. They all got an opportunity to come and look round, along with many other organisations, because it is important to do that. Therefore, when I had the opportunity to come to this place, I felt it was important that my constituents from Strangford should have the opportunity to come and visit Westminster, including the Clock Tower.
Thomas Docherty
I am looking at the figures for how many tours each Member has sponsored, and the hon. Gentleman has not sponsored a single tour of Big Ben in the two years since the general election.
Jim Shannon
With great respect, that is not the point; the point is that those who wish to visit should have the opportunity.
Let me turn to the reasons why some of my constituents are unable to attend—it is important to reiterate this point. The first thing that I should mention about Northern Ireland is that, with the political progress that we made and the stability that came off the back of that, we had the opportunity to open the Parliament buildings at Stormont in Belfast. Every Mayday there is an open day, and tens of thousands come to visit, because it is accessible, which is important. That shows the natural direction in which we are going. All traditions come to visit, from all across the community, because all the political parties are represented there. Yes, people have to pay for their lunch and tea, but the tour is free. It is good if people’s own Members are there, but if they are not, tours can still go ahead.
The reply to one of the questions asked to some of those on the Commission said that a take-up of 90% had been assumed. If people are charged £15 a head, I would question whether that is achievable. I would say that it was not.
The distance from my constituency to this place means that the journey to get here, from when I get up in the morning, takes four to four and a half hours, plus the flight. We can use Flybe and perhaps get a cheaper flight, or British Airways or British Midland, or we can go by train and ferry. The cost to get here—by return flight, or whatever it may be—will be from £100 to perhaps £500. That perhaps puts into perspective the situation for those from my constituency—who, by the way, have come here, including people from a number of schools. Everything is arranged through our main office, so my name might not be on the paper as the sponsor, but I was the person who took them round, and I was quite happy to do so. We should not be imposing a £15 charge on a visit when people should have the opportunity to visit the Clock Tower free, just as they have the opportunity to make a similar visit—although not as magnificent a visit, I have to say—in Northern Ireland.
It would be great to be able to walk up those 334 steps; other Members have said that they have not done it yet, and neither have I, but I intend to make it my business to do so. I have talked to some of my colleagues who have done it. They told me that it was one of the most emotional experiences that they have had in this House, because when they got up there, they saw how high up they were, and the clock struck, and so on. All those things make the day special.
Just a few weeks ago a group came here from Glastry college in my constituency. There were 26 young people who wanted to look round as part of their citizenship studies; they do that work in their schools, but they also come to Westminster to see how Parliament works, whenever the opportunity arises, as well as to Stormont. If those 26 young people had been subject to a charge of £15 a head, their visit to this place would have cost them another £390. How is that fair to young people who want to come along and enjoy the occasion of a visit to Westminster, including a visit to the Clock Tower? Those are things that have to be part of a visit. Those young people visited Westminster abbey on the day—again, it was a wonderful occasion and a lovely visit. It cost them £16 or £17 a head to go there. They did not mind paying that, but there has to be a limit to how much a young person—a student, or a person attending school—pays, and also a limit to how much the teachers who take them there pay.
The comparison is this. We are all committed to democracy. We are privileged and honoured to be here and to represent our people. A visit to the Clock Tower, along with a visit to Westminster, is so important. It is important for citizenship and for people to see the democratic process. The hon. Member for Cardiff West (Kevin Brennan) mentioned the impact of a visit on young people. Let me say this in conclusion. A visit does indeed have an impact on young people: it gives them an idea of how Parliament and the democratic process work. It also gives them a chance to see the fantastic history in this place. Let us support that; let us not have a £15 charge.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Before I call the next speaker, let me say that there are six Members who want to speak. I was aiming to finish at about 2.15 pm, so if people can try not to intervene, that would be helpful.
Mr Stewart Jackson (Peterborough) (Con)
It is a pleasure to follow the hon. Member for Strangford (Jim Shannon).
I first visited this great Palace of Westminster in the summer of 1976, at the age of 11. It was part of a school visit. My parents were not particularly well off; we could not afford a foreign trip, so we came and visited all the London sights, one of which was the Palace of Westminster. The Palace of Westminster, including Big Ben, has been intrinsic to our national Parliament—some may call it the mother of Parliaments—for 150 years. It was Sir Giles Gilbert Scott who said:
“We shape our buildings and afterwards our buildings shape us.”
Ever since William Rufus built the great hall in 1099, a Parliament has existed on this site. In 2008 Big Ben was voted the most popular UK landmark, and this debate is very much about that. This is not an administrative housekeeping issue; this is about setting a precedent. I believe that the public, who have already paid their taxes—as people have done over the hundreds of years there has been a Parliament here—should not be charged twice to visit a place that is theirs. The influence, power and discretion that we exercise here is done on the basis of a leasehold in the name of the people we represent. They ultimately own these buildings, and we are responsible and accountable to them.
That leads me on to the discussion that we have had today—thanks to my hon. Friend the Member for Harlow (Robert Halfon), who secured this debate—on the antediluvian, opaque nature of the governance of this place, and on the Commission and the Management Board in particular. I was never consulted on the closure of Bellamy’s bar in order to create a crèche, or on the closure of Annie’s bar. I have not been consulted on the alternative proposals on sitting days, on early-day motions or on the duplication of administration and paperwork in the House, all of which should be presented to us. We really need to have a proper debate on all that.
Are the House of Commons and the House of Lords really to become a kind of glorified Harry Potter-esque theme park? In this, the 200th year since Dickens’s birth, are we really so focused on taking a Dickensian, “Mr Gradgrind” approach that we must destroy the basic tenet that the people of this country who pay taxes should have free access to all the public parts of the precincts of the Palace of Westminster?
Mr Jackson
I will not give way, if the hon. Gentleman will forgive me.
We must keep that access free, because it sends an important message. If we do not, we could find that only the wealthy, the well connected and businesses will have access to the mother of Parliaments. That would be a sad day, and a tragedy for democracy. It would further undermine people’s faith and trust in us. Let us imagine that a husband and wife and their two children get on the train in my constituency of Peterborough and pay £90 return each to come to London. Why should they have to pay £15 each to visit the Clock Tower? Why should we charge them an extra tax to visit part of the political and historical heritage of this country, one of the most famous buildings in the world? I do not believe that that would be right.
We need to explore the governance that has led to this proposal, because it has not involved ordinary elected Members. This feels like the script for “The Da Vinci Code”, because it is not open and transparent; far from it. I also reject the amendment tabled by the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso). His remarks have been erudite and eloquent, as ever, but I nevertheless smell an establishment stitch-up.
John Thurso
May I tell the hon. Gentleman that on this occasion his sense of smell is a touch out? What he should be smelling is a desperate attempt—if I can put it like that—by those of us who are in charge of these things to seek to accommodate the views being expressed. I put it to him, to the hon. Member for Harlow (Robert Halfon) and to his other hon. Friends that I really am seeking to arrive at where they want to go.
Mr Jackson
I take on board the hon. Gentleman’s comments, but one of the points of the Backbench Business Committee, if it is not to become the nobbled shih tzu of the Executive, is to ensure that the emphatic will and opinion of the House is sought on certain matters. We voted on such matters on Monday. Today we are looking at the thin end of a wedge; a precedent could be set that would result in our constituents being effectively excluded from part of the precincts of the Palace of Westminster. If the House divides on the motion, we must be emphatic in making it clear that we are not minded to enter into any kind of long-drawn-out scenario of kicking this matter into the long grass, and that we need to make a decision now. We need to set our own precedent. This is the people’s Parliament; they have paid for it through their taxes and they should have free rein here. We represent them, and we should be mindful of their opinions. We should keep the status quo.
Mr David Burrowes (Enfield, Southgate) (Con)
I pay tribute to my hon. Friend the Member for Harlow (Robert Halfon), and I can confirm, having known him since the age of 10, that he has always wanted to be here. He made his case as a 10-year-old, and he does so now with great passion and verve. I rise to support his motion.
No one disputes that Big Ben is iconic; it has featured in our culture on many occasions. Hon. Members will recall “The Thirty-Nine Steps”, in which Richard Hannay was hanging off the second hand. They will recall it featuring in the James Bond film, “Thunderball”. They will remember the extra chime. They might also recall, as my children do, Doctor Who watching the Clock Tower being blown up, and more besides. The sounds of Big Ben also have iconic value. The chimes are broadcast worldwide by the BBC, and “News at Ten” gives us the image.
No one disputes that that is all of great value, and we should not understate that value and importance. Many Members have described speaking to primary school children about Parliament. We talk to them about what happens in this Chamber and in the House of Lords, and soon their eyes start to glaze over. As soon as we mention Big Ben, however, they wake up and come alive. They see it as an important part of Parliament.
Nick de Bois (Enfield North) (Con)
Many years ago, when I was 10 years old, I was able to walk up to the front door of No. 10, and I was duly inspired. We have lost the ability to do that, because of the daily threat of terrorism that we face, but surely we do not want to lose the opportunity to visit Big Ben as a result of the accountants.
Mr Burrowes
Absolutely not. It is excellent to hear what inspired and motivated my hon. Friend as a 10-year-old, and we can help to inspire others.
This is not just about primary school children attending this place as a tourist attraction, however. I recently hosted a tour of students from Burma. They were unable to access Big Ben, but they were nevertheless amazed at the direct access that the public have to their Members of Parliament. Obviously, that does not happen in Burma. I want to see that access maintained for primary school children and others. It is important to maintain that relationship, and part of that involves the access to Big Ben that Members of Parliament and Officers can provide. That access would be lost under this proposal.
We also need to recognise that this is not just about MPs acting as tour guides; it is about us opening up the doors of our democracy. That involves not only the working part of our Parliament but access to Big Ben. It is part of our heritage, and people having access to Parliament helps them to understand where we have come from as a democracy and where we want to go. Big Ben is very much part of our heritage, and we need to ensure that it is as accessible as possible.
The hon. Member for Chippenham (Duncan Hames), who is no longer in his place, gave the House some statistics, including the number of people who visit Parliament but do not take the tour of the Clock Tower. My view is that not enough people know about the tour. Those who do know about it grab the opportunity to do it, and we need to make it more accessible, not less.
There are hidden gems that we discover only when we climb those 344 steps inside the Clock Tower. I commend my hon. Friend the Member for Harlow for attempting the climb; it has defeated many others. Anyone who goes up the Clock Tower is reminded of our heritage, including our Christian heritage and the relationship between Church and state. Among the hidden gems are the chimes alongside Big Ben, near to which are written these words:
“All through this hour
Lord, be my guide
And by Thy power
No foot shall slide”.
Those who go up there can see those words, near to the chimes that are broadcast worldwide by the BBC each day. They illustrate our recognition of our Christian heritage, which is an important part of our democracy. We would lose that under the proposal, and I hope that our feet here will not slide into the realms of the accountants and others. Let us keep the Clock Tower open so that many more feet can go up and down it, and so that people can recognise our democracy for what it is.
Mr David Nuttall (Bury North) (Con)
It is always a great pleasure to follow my hon. Friend the Member for Enfield, Southgate (Mr Burrowes). I hope that I shall not be viewed as some kind of establishment stooge this afternoon, as I rise to put forward a different view on the issue of charging.
The motion, which is supported by many hon. Members and hon. Friends with whom I am usually in agreement, is one that I cannot agree with on this occasion. I take the different view that there is no such thing as a free lunch. Generally speaking, I believe that the principle that the user pays should be adopted, and I see no reason to change it for the Clock Tower. I think it is preferable that those who use a service should be those who pay for it. In 2011 only 9,319 people used this service and went up the Clock Tower, so it is easy to see that over the course of an average lifetime, at least 99% of the population will be completely unaffected by whatever is decided on this issue.
I believe that the current system whereby everybody effectively pays for the benefit of very few people is wrong. I submit, too, that the current policy is likely to favour those who live closer to London, who find it easier to visit the Palace of Westminster. I do not know the statistics on how many of my constituents have been up the Clock Tower—I know of a few, but not very many. I submit that having paid to come down here, many visitors would not be surprised to find that they were being asked to contribute £15 towards the cost of that service. It is a once-in-a-lifetime visit, and I think it entirely reasonable for a small charge to be made to cover the cost of providing that tour.
Mel Stride (Central Devon) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing this debate. I start by declaring an interest in that, as a hobby, I am a qualified blue badge tourist guide, so I have some experience of some of our more important sites. I am qualified to guide in the British Museum, Westminster Abbey, St Paul’s Cathedral, the Tower of London, the castle at Windsor and many other places. I am not qualified to be a guide here: for that, I would have to do a one-day familiarisation course, which could be quite valuable in my case. There is no doubt, however, that of all the places I know something about in this country, none is more important than our Parliament.
Although I respect the fact that we are going through an age of austerity, access to the Clock Tower is something I believe should be kept open and free. It is not that I fail to recognise that the House of Commons Commission has made considerable progress in advancing the cause of cutting costs. We have heard about a 17% reduction and that £2 million should be saved by putting official papers in electronic form on the internet; I strongly encourage and welcome those things. For certain goods and services—and indeed accesses—I would go so far as to say that we have a moral duty to ensure that they are provided free of charge. I would include access to NHS services, for example, which should be free at the point of delivery and universally available irrespective of the ability to pay. I would apply the same principle to museums and to libraries, from which my children regularly benefit when I take them to the local one every couple of weeks. I believe that if we can apply that particular approach to those places, we should certainly apply it here in the Palace of Westminster.
Some will say that the Clock Tower is not the same as the Chamber, where real democracy is transacted. Physically, that is a true statement, but in my opinion nobody can disentangle the two. As we have heard from many speakers this afternoon, if we ask people from overseas for their favourite image of British democracy, the chances are that they will cite the Clock Tower.
Let us look at the arguments in the House of Commons Commission’s statement, to which I do think anyone has referred this afternoon and a number of which I believe to be erroneous. First, the fact that we already charge for tours in certain parts of the Palace of Westminster does not mean that we should be able to charge to see the Clock Tower. That is erroneous because the fact that there are charges for some tours does not mean that there cannot be free tours in the same area, as, for example, with the Clock Tower.
The Commission says that only a small number of people—9,000 to 10,000—are affected, but I would say that a principle is at stake here and that whether we are talking about 10,000 or only half a dozen people, it is the principle that matters in this case. We are told that many savings are to be made and that it is only the cost of the tours that the charges cover. Once again, however, the principle of free access is fundamental here. Whether we are covering just our costs, more than our costs or only half our costs, I still believe it is fundamentally wrong to go down this route.
I know that other Members want to contribute, so I will conclude by re-emphasising that this issue is about a very important principle. This place—one of history, democracy and debate, perhaps one of the pursuit of truth—is not “our” Parliament; it is the people’s Parliament, and it is the Parliament for all the people.
Jake Berry (Rossendale and Darwen) (Con)
May I say what a privilege it is to follow my hon. Friend the Member for Central Devon (Mel Stride)? I was not originally intending to speak in today’s debate because I felt that charging people £15 to go up the Westminster Clock Tower might seem remote to the people of Rossendale and Darwen—from where it costs nearly £100 to get here on a train. I changed my mind because on my most recent leaflet, “Rossendale and Darwen Matters”—delivered free to the door by the MP—I included a line about Parliament belonging to the people, saying that it was always open for them to visit me here. I have been overwhelmed by the response of so many Lancashire people saying that they want to visit this great building.
As MPs, I believe we should look at how to save money within Parliament, and I commend the 17% target. I read in a newspaper recently about proposals to turn Parliament into a theme park, including the idea of charging people £2,000 to use the Terrace, £20,000 to use Westminster Hall, and now £15 to go up the Clock Tower. I believe that we Members should resist that. We should stand by the principle that this is a place that our constituents pay for; it belongs to them and it should be free for them to visit.
I will not support the amendment, because I believe that more can be done than simply looking at the issue again. When we look to save money, we should look to our own first of all. That is why I draw the House’s attention to what I believe is the scandal of the grace and favour apartments enjoyed by people who work in this place. When the last Clerk of the House retired, there was a great opportunity to remove the grace and favour apartment attached to the job. However, we did not take the opportunity. I think that as long as we provide such facilities to people who work here, we should not charge our constituents for going up the Clock Tower.
We should definitely not charge our constituents in what is an Olympic year, as this building will be at the front and centre when people visit our country. In this Olympic year, there is great interest in finding London hotels for people to stay in. I made an inquiry of the Ritz to find out how much its most expensive suite was, and I did the same for the Dorchester and all the posh places where I could never afford to stay. These suites cost thousands of pounds—some as much as £7,000 a night. What an opportunity for we Members to make these grace and favour apartments available all day to save the taxpayer some money. Why do people choose to pay thousands of pounds to stay at the Ritz and the Dorchester? It is clearly location, location, location—and security. That is what these grace and favour apartments have—location and security.
Thomas Docherty
The hon. Gentleman is making a compelling argument. I wonder whether he is aware that there are some other grace and favour places down the road in No. 10, 11 and 12 Downing street. Perhaps the Patronage Secretary could make his place available to his constituents.
Jake Berry
But that is completely different. Government is for 365 days a year and 24/7; Parliament is having an early recess to enable Members to avoid the Olympics, so surely those who work in Parliament will not be here.
We are not talking about a Big Brother-style eviction; we are simply talking about the possibility of those with grace and favour apartments, including the Chairman of the Commission, the Speaker of the House of Commons, giving them up for the period of the Olympics. Speaker’s House would, of course, command the biggest premium. I suggest that we could charge £20,000 a night for it, perhaps more, and that simply making it available during the Olympics could save half a million pounds.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I think we are in danger of losing out on the Clock Tower by discussing the renting of the Speaker’s apartments. We are getting a little wide of the mark.
Laura Sandys (South Thanet) (Con)
Does my hon. Friend think that the price would be enhanced if the Deputy Speakers were present to attend the visitors?
Jake Berry
All joking aside, it is true that we must save money, but I suspect that charging our constituents to go up the Clock Tower is in the easy pile. When we start talking about the things that are in the difficult pile—such as Speaker’s House, the grace and favour apartments of the Clerk and the Serjeant at Arms, and the crèche—we do not hear so many voices.
It is important for us to establish what we are here for. I think that we are here to speak up for our constituents, and to ensure that they continue to have free access to this building that they lease to us for five years at a time. If we want to save money, let us look at ourselves. Let us look in the difficult pile. Let us work out where the money can be saved without our charging people for access to Big Ben.
Jacob Rees-Mogg (North East Somerset) (Con)
I much enjoyed hearing from my hon. Friend the Member for Rossendale and Darwen (Jake Berry) an impassioned plea for the House to be turned into a glorified hotel with a free clock tower attached. I am not entirely convinced that that is the right order of priorities. It seems to me that the House is united in feeling that savings must be made, but that whenever a specific saving is suggested, everyone is against it.
I wish to defend the Commission against the charge that it never consults people. It does, as one will see if one reads one’s e-mails. I replied to one which dealt with the question of whether or not the bound copies of Hansard should continue to be available. I actually like re-reading my own speeches—somebody has to—and I therefore wish to receive the bound copies, but I quite understand that a very expensive process is involved. It might be appropriate for Members to keep their old copies together or to make a contribution if they want to continue to receive bound copies.
I believe that there are two clear principles when it comes to cost savings in the House. The first is that we, and our electorate, can hold the Government to account, and that anything that enables us to hold the Government to account should not be cut. That includes most of the papers that are produced for us, such as the daily Hansards, the Order Papers, and the lists of early-day motions. All the things that enable us to hold the Government to account ought to be retained, even if they are expensive; and all the things that allow our constituents to hold us to account—their freedom to visit the Galleries, to attend Committee meetings, and to exercise their important right to come to the front desk and ask to lobby us and to see us—should also be free, and not subject to any cuts.
The second principle is that we must be able to serve our constituents and meet their requirements when they have problems, and that, too, should not be subject to any cuts. It is important for Members of Parliament to have the staff they need and the facilities they need—the writing paper and the postage stamps—to deal with matters that affect their constituents’ lives.
Not a penny should be saved in those areas, and all Members of Parliament should be united in defending us against any such cuts; but—and it is a very big but—there are some things that are not essential to holding the Government to account and do not provide an essential service for our constituents. In those instances, even if the savings are small, it is important to make them. We are not only doing this in the context of Parliament’s £200 million budget; we are doing it symbolically, to show that we are not just imposing costs and cuts on our constituents, but tightening our own belts. Let me put this question to Members who do not want to charge people for going up the Clock Tower. How can we say to our constituents who are on £43,000-and-a-bit a year that they will not receive their child benefit, when we are not willing to accept even a modest charge for a visit to the Clock Tower?
Robert Halfon
My hon. Friend says that we must tighten our own belts. It is not our belts that we will be tightening, but the belts of our constituents who want to come and see Big Ben. I am not one of those who say that the House of Commons does not need to make savings. Indeed, I suggested a series of savings that the House could make in my opening remarks.
Jacob Rees-Mogg
As I mentioned in my own opening remarks, everyone is in favour of savings, but if we can make an additional saving, we should be pleased about it. I hope that the Commission has heard all my hon. Friend’s recommendations for savings and the recommendations of others who have spoken, because they all ought to be considered. However, it is difficult to accept that going to look at a clockwork mechanism and a large bell, however great and however splendid, is essential to the democracy of this country which has served us so well for hundreds of years. It is a curiosity, it is something of interest to do, it is a delight and a pleasure, but it is not at the heart of how we scrutinise the Government or how we serve our constituents.
We know that times are hard. If I wished to be party political, I could say that our friends on the other side had maxed out the credit card; but whether it is due to that or to bankers, the fact is that the country needs to make savings, and a charging £15 each to 9,000 people a year who want to see a clockwork machine strikes me as not unreasonable.
I seem to be in the same position as my hon. Friend the Member for Bury North (Mr Nuttall). I seem to be more establishment than the establishment itself. I understand that, as we have been debating the matter, a compromise has been agreed, and I am sorry about that, because I think that this would have been a right and proper thing to do.
Martin Vickers (Cleethorpes) (Con)
It is a pleasure to sum up the motion proposed by my hon. Friend the Member for Harlow (Robert Halfon). One thing that can certainly be said of my hon. Friend is that he has his finger on the pulse of public opinion.
John Thurso
I have listened carefully to the debate, and I have talked to the Commissioners who are present. We have agreed that were the hon. Member for Harlow to accept my amendment, the Commission would ensure that there was no charge for entry to the Clock Tower during the current Parliament. We cannot, of course, bind successor Parliaments. As written, however, the motion is such that it might affect other parts of the important savings programme to which the hon. Member for North East Somerset (Jacob Rees-Mogg) referred, and we should therefore prefer to listen to the will of the House on this occasion in order to preserve the greater good of the programme.
Martin Vickers
I thank the hon. Gentleman for his comments. I am sure that my hon. Friend the Member for Harlow and I will agree to support the amendment, but one thing I have learned in my short time in the House is that, when I am on my feet, the fact that I might repeat something that has been said, or the fact that the outcome is inevitable, should not stop me saying what I intended to say. I shall therefore take advantage of my moment in the sun to make a couple of comments, if I may.
As has just been pointed out by my hon. Friend the Member for Harlow, those of us who support his motion recognise that savings must be made. A number of important issues have emerged from the debate, most notably the urgent need to consider other possible areas of savings. Grace and favour accommodation seems to be at the top of most people’s hit lists, and that may well be one of the areas that should be considered.
My hon. Friend the Member for Mid Bedfordshire (Nadine Dorries) spoke of schoolchildren imagining her working in Big Ben, and, in a rather strange way, it is a symbol of our democracy. I remember coming up from Cleethorpes on my first visit to London at the age of eight, and one of the photographs in my album shows me with the Clock Tower in the background. The Clock Tower is capable of sparking people’s interest in the whole democratic process. That is something extremely valuable, and something that we should not lose.
Bearing in mind the offer that has been made, I shall cut my remarks short. I was going to urge the House not to support what I had described in my notes as a “Sir Humphrey amendment,” but, of course, Sir Humphrey has ways of achieving his ends in the end. My hon. Friend the Member for Harlow and I are prepared to accept the amendment, with the on-the-record statement that no charges will be made, at least for the period of this Parliament.
Amendment agreed to.
Main Question, as amended, put and agreed to.
Resolved,
That this House accepts the need to make financial savings, but considers that the fundamental principle that the House of Commons is a people’s Parliament should not be put at risk; and invites the Commission to reconsider its current proposal to charge for Clock Tower tours.
Mrs Main
On a point of order, Mr Deputy Speaker. I am delighted that the hon. Members for Dunfermline and West Fife (Thomas Docherty) and for Caithness, Sutherland and Easter Ross (John Thurso) have put it on the record that they will look at this matter again. If decisions are made that do not accord with what has been stated in this debate, however, what recourse might we have to bring the matter back before Parliament?
Mr Deputy Speaker (Mr Lindsay Hoyle)
I think the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) has given his word, and I am sure that he is a man of his word and that we do not need to bring that into question today.
Robert Halfon
Further to that point of order, Mr Deputy Speaker. I should have said in my opening remarks that I am a member of the British Horological Institute, but I also want to put on record my gratitude to the representative of the Commission, the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), for listening to Members and agreeing to drop the Big Ben charges.
Mr Deputy Speaker
I think the hon. Gentleman made the first point in the debate, and the second point is not a point of order.
Common Fisheries Policy
(12 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Miss Anne McIntosh (Thirsk and Malton) (Con)
I beg to move,
That this House considers that the Common Fisheries Policy has failed to conserve fish stocks and failed fishermen and consumers; welcomes the Environment, Food and Rural Affairs Committee’s report, EU proposals for reform of the Common Fisheries Policy; and calls on the Government to use the current round of Common Fisheries Policy reform to argue for a reduction in micro-management from Brussels, greater devolution of fishing policy to Member States, the introduction of greater regional ecosystem-based management and more scientific research to underpin decision-making in order to secure the future of coastal communities and the health of the marine ecosystem.
It gives me great pleasure to have the opportunity to move this motion. I thank the Backbench Business Committee for allowing us to debate the issue, and I thank my fellow Environment, Food and Rural Affairs Committee members—from all parties—for the excellent work they did in drafting the report on this topic. I also thank the witnesses, both those who appeared before us and gave so generously of their time and those who submitted written evidence.
In my local area, I visited the coble fishermen in Filey, who are some of the heroes of the smaller—under-10 metre—fishing fleet in this country. The Committee visited Hastings, accompanied by my hon. Friend the Member for Hastings and Rye (Amber Rudd), and we were very warmly received. It was a highly productive visit—once we had negotiated the London tube network—and I thank everyone who shared that day with us for the warm welcome we received and the evidence they shared with us.
It was a particular pleasure for me to take the Committee to Denmark and to meet the Danish President of the Council of Ministers, the Danish Minister for fisheries, farming and food. We also met the local fishermen in Gilleleje. I have to confess that I had not visited that little fishing port for some 15 or 20 years, but we were impressed by the work and co-operation of its fishermen, and persuaded by the science we saw there. We were allowed to partake in a non-live auction mart, buying and selling some of the fish, which expanded our knowledge of the live internet auction mart that they use. We were interested to see the selective gear those Danish fishermen use, a detail that is particularly relevant to the motion.
This debate is timely. The Danish presidency is expected to reach a political decision in the European Council in June—in the well-known coastal resort of Luxembourg! Seriously however, Luxembourg does have a genuine interest in freshwater fish and aquaculture—the Minister can correct that term, if it is wrong. We are expecting a political decision in the EC in June. For the first time, it will be a co-decision. The European Parliament is seeking to reach an agreement on the financial regulation in January 2013, and we will have co-decision on all the fisheries reforms. A final agreement is not expected until June 2013.
I commend the motion. I think we can all confirm that the common fisheries policy—particularly the last round of reform—has failed everybody. It has failed to conserve fish stocks, and to help fishermen or consumers. I want to dwell for a moment on what I believe is the most exciting part of the motion and of our report, and I am grateful to the very senior lawyers in this place and elsewhere who have advised us on the report. We have a once-in-a-decade opportunity. We have a one-off opportunity to end the centralised micro-management by Brussels, which I think we can all agree has failed to deliver. We want to support the commissioner, who agrees that, as an essential first step, we must look at the possibility of handing power back to member states to enable them to work together to find a local solution.
I applaud the openness of the commissioner, and the immediate past chairman of the Brussels Committee on fisheries, Carmen Fraga, who is a personal friend of mine and who is affectionately known in the European Parliament as “madam fish.” The commissioner was especially open in the meeting we had in Brussels, during our evidence session of some 18 months ago, and more especially when the commissioner gave evidence on the record. I am delighted that there is now a picture on the commissioner’s website of the commissioner and me handing over the report we are debating this afternoon.
I believe we have given the Department, the Commission and the European Union the opportunity—which we were all looking for—to drive decision making down to the most local and regional level. Our proposals are truly groundbreaking. I believe the fault has been that there has been too much micro-management from Brussels and a lack of overarching objectives, which we would like the Commission to remain in charge of.
The Commission should have a strategic high-reaching overview, but the day-to-day decisions on how fisheries are managed in local waters should be decided among the various coastal states on the basis of scientific evidence, which is missing at present, and through working much more closely with the fishermen. We will talk shortly about giving the advisory councils more power.
Mr John Redwood (Wokingham) (Con)
I support the motion, but will my hon. Friend make this point clear to me: presumably, she would want the British Government to be able to get rid of the much-hated and stupid discards policy and be free to decide ourselves how to conserve stock?
Miss McIntosh
I am going to be very methodical and discuss discards later, as we have some interesting things to say about them and I hope that hon. Members from all parts of the House will elaborate on the matter.
On the treaty base, I hope that the Minister has now had the opportunity to analyse what we are proposing. This is the first time anyone has identified what is staring us in the face—that all we have to do is amend the regulations, which form the whole context of this round of the common fisheries policy reform. The feedback we have had from the fishermen we have consulted, as well as from the Danes and others, has been very positive.
It is important to recognise that the little fish do not swim around with a Union Jack on them. Much as I would like to say that the fish outside Filey have a Yorkshire flag on them and the fish in the Scottish waters have the saltire on them, they do not; they swim across the various waters. So it is absolutely right that the Commission should retain some competence in this area, and I, for one, do not wish to reopen the treaty base that gives exclusive competence on the resources to the Commission. By allowing the coastal states that neighbour the individual fisheries to take the day-to-day management decisions, we will save a lot of the Minister’s time every December, as things will be managed on a more regular basis. The approach will be much more local, it will be based on science and it will be about working more closely with the fishermen.
Mr Redwood
Nor do the fish swim around with an EU flag on them. We should accept that it is our fishing resource if it is in our wider waters—we have to pay the bills, so we should be responsible for it.
Miss McIntosh
My right hon. Friend has put his finger, possibly inadvertently, on the nub of the issue. This is a shared resource and we need to conserve it. The Committee has gone through things and we have identified many ways in which we believe we can do that.
Amber Rudd (Hastings and Rye) (Con)
Does my hon. Friend agree that the best outcome for our country’s relationship with the common fisheries policy would be what was described to us as a “toolbox”? We would operate our own toolbox, given our certain allocation, and that would perhaps give us the best option in terms of the European balance and the UK fishing balance.
Miss McIntosh
I am most grateful to my hon. Friend for putting it so eloquently and so well. This approach would, indeed, be part of the toolbox, and it would give the Department for Environment, Food and Rural Affairs, negotiating for the UK, a much greater say and devolve decision making right down to the regional level, with a tremendous positive impact on fishermen and on coastal communities.
Jim Shannon (Strangford) (DUP)
The hon. Lady has outlined the need for regionalisation, and that is the approach I would seek for Northern Ireland on this issue. Does she feel that regionalisation would mean that the days at sea, which have been reduced, would be increased to reflect the number of fish in the sea? Would the cod in the Irish sea be included in such an arrangement? Would the quotas also reflect that? What would happen with the discards? Does she agree that the approach to discards should be following the direction of the fisherman’s initiative? Does she agree that it should not be about bureaucrats in Europe, but about local people making decisions?
Miss McIntosh
Yes, and I will discuss discards momentarily. Our approach has to be taken on the basis of science, and that is what is missing at the moment. We need to set clear boundaries and give direction to the role of the Commission, and we have to give member states the power to act not only independently, but together in each of the individual fisheries. We will, thus, give them genuine freedom and responsibility.
Dr Sarah Wollaston (Totnes) (Con)
Does my hon. Friend agree that extending the limit to 12 miles is crucial? People in Brixham, in the area I represent, have done a great deal to conserve stocks, but they see Dutch vessels coming in to fish inside the 12-mile limit and that causes great resentment.
Miss McIntosh
I am sure that the Minister will be more knowledgeable than I am on matters relating to the high water mark and the 12-mile limit. What I hope we can achieve, in principle, is agreement on each fishery—those in the Baltic sea and the North sea, as well as the Irish fisheries. These are a shared resource, and I hope that they can genuinely be determined by those coastal member states.
Sheryll Murray (South East Cornwall) (Con)
Will my hon. Friend explain how, under a system of qualified majority voting, and given that the basic regulation contains the principle of equal access to a common resource, she is going to be able to achieve what she wants? A lot of member states, albeit that they have a blocking minority, will oppose her proposals, so how will she get them through the Council of Ministers?
Miss McIntosh
Happily for me, I will not be arguing the case, and I hope that today’s debate will convince the Minister. I am pleased that the European Parliament has reached out to the national Parliaments and I hope that ours is the first leading report in that regard. We should amend the regulations—we should not accept them. My hon. Friend the Member for South East Cornwall (Sheryll Murray) looks baffled, but it is blindingly obvious that that is where we have gone wrong in the past. We should grasp the bull by its horns and amend the regulations for the duration of the piece, recognising them as a shared resource. That is key.
The television campaign against discards by Hugh Fearnley-Whittingstall captured the public imagination last year. Discards are deeply unpopular and unsustainable and they are failing to conserve our fish. The conclusion we reached was that we agree there should be a discard ban, but it is very clear that there is no scientific evidence on the survival rates for each species for which the ban is proposed. We believe that we should proceed with caution on the basis of the scientific evidence. Rather than having an end date of 2014 or 2015, we should start gradually. We do not want a discard at sea being substituted by a discard on land, with the fish going to landfill. That would not meet the wishes of the great British public.
Fiona O'Donnell (East Lothian) (Lab)
First, let me apologise profusely to the hon. Lady for not being in my seat when she began her speech. Does she agree that part of the problem with discards is that in mixed fisheries fishermen do not have a quota for catch that they cannot avoid catching, which they then have no alternative but to discard at sea?
Miss McIntosh
I shall share the comments I made earlier with the hon. Lady, but we do have a recommendation along those lines on mixed fisheries. There is simply insufficient information. When we launched our report, The Guardian had a website that entirely distorted our proposals so, for the sake of clarity, we are saying that there should be a ban on discards but we need to proceed on the basis of scientific evidence. If that is available in 2014, we will be the first to welcome it and to proceed on that basis. I believe that it would put my hon. Friend the Minister, who would be negotiating such a ban, in a very difficult position if we were just to substitute a discard ban. We believe that it should switch to catch, but it should do so gradually. Let us have an end date of 2020 but proceed with caution on the basis of scientific evidence.
Jim Shannon
The Minister is aware of this issue, because we spoke about it last November and he has followed through on it. Scientific evidence for the Irish sea shows that the stocks of cod and whitefish are increasing. The hon. Lady is saying, I think, that we need to have time for the scientific evidence to be in place. If that is the case, it will be too late for our whitefish fleet in Northern Ireland, as the crews have already been cut dramatically. Does she not feel that there are perhaps occasions—this is one of them—when urgency is of the utmost importance and that we must respond immediately to the scientific evidence that shows that there are more cod and more whitefish in the Irish sea than there have ever been before? That would sustain the cod and whitefish industry in Northern Ireland.
Miss McIntosh
I hope that if we can amend the regulations on how we will proceed, the reformed common fisheries policy will go forward. I understand the hon. Gentleman’s sense of urgency and I am sure that my hon. Friend the Minister, who takes part in the annual negotiations, will see this as welcome relief, but it will happen after the regulations are amended.
The Committee was persuaded that there are other means of conserving fish stocks—the tools in the box, as my hon. Friend the Member for Hastings and Rye said. We were hugely impressed by the work on selective gear being done by the Danish fishermen and by the agreement that the Danish and Swedish fishermen and their Governments had reached about fishing in their waters. We believe that that model could be used.
We applaud the work done under successive Governments off the Devon coast to reduce discards. We want to hear more of it and to see such schemes rolled out. As we said in our earlier domestic fisheries report, we believe there is a role for celebrity chefs and supermarkets to persuade the public to eat species that are not widely eaten at the moment. That would also help to conserve fish stocks going forward.
The Commission mandated member states to introduce a system of long-term fishing rights; it is looking to introduce transferable fishing concessions. In our earlier report on domestic fisheries, which we reported to the House on 3 June 2011, we highlighted the problem of slipper skippers and those who trade fishing quotas who are not actively involved in fishing. My local fishermen are absolutely convinced that there are football clubs trading in this way. We have not established that as a fact, but equally no one has denied it, which makes me believe that it is probably happening. May I challenge the Minister on this? We asked for a register to be introduced and I would like him to report where we are with that when he sums up. Local fishermen in Filey and across the Yorkshire area would warmly welcome that.
Sheryll Murray
Did my hon. Friend establish that a fishing quota can be attached only to a vessel that is held by a fish producer organisation? So either a dummy vessel that has been invented in a producer organisation or a real vessel has to be owned by a football club before a quota can be attached to it.
Miss McIntosh
We have not always established whether football clubs or others are involved, but my hon. Friend raises a very telling point. We believe that transferable fishing concessions would make the situation worse and would not necessarily reduce over-capacity. What we propose is a siphon mechanism to reallocate fishing rights away from potential slipper skippers. I hope this addresses her point. Under our proposal, if an operator chooses to lease his fishing rights, a percentage of that allocation would be returned to the national envelope. That could then be reallocated to active fishermen so as to maintain traditional fishing activities in coastal communities. We urge the Minister to recognise the role of active fishermen, who are the lifeblood of coastal communities such as those in Filey, Hastings and elsewhere. We also emphasise the need to protect small-scale fishermen, such as those in our under-10 metre fleets, by keeping them outside any market-based system of fishing rights.
Fiona O'Donnell
The hon. Lady makes a very interesting suggestion. Does she agree that that envelope could be used to incentivise sustainable fishing?
Miss McIntosh
The whole thrust of the motion is very much about sustainable fishing. We mention in particular
“the introduction of greater regional ecosystem-based management and more scientific research to underpin decision-making”.
The whole thrust is about how we define what is sustainable; we clearly do not have sustainable fishing at the moment. I hope the Minister will go down the path of avoiding excessive fleet consolidation and I make a personal plea that we could give more quota to our inshore fishermen. I ask the Minister please not to go near a quota for shellfish for inshore fishermen.
Dr Wollaston
Does my hon. Friend agree that there is a great discrepancy in the way that the EU and the UK define these vessels, with the EU using the under-12 metre definition and the UK using the under-10 metre definition? Would we not be better using a definition based on the extent to which vessels are high catching? There is sometimes an assumption that all under-10 metre vessels have to be low-catching, sustainable vessels, whereas some of them catch large amounts of fish.
Miss McIntosh
My hon. Friend reminds me of the evidence we took in Hastings. I thought we should perhaps pursue an amendment along the under-10 metre/under-12 metre line, but this is more about the fact that such vessels do not have access to the quota under the current system and that they could be disadvantaged if there is over-consolidation—a point that was raised earlier. We were not persuaded that the under-10/under-12 issue was so significant.
I urge the Minister and his Department, when negotiating for the whole of the United Kingdom and all its constituent parts, which are well represented in the Chamber this afternoon, to press for an additional general objective for the common fisheries policy: contributing to the socio-economic development of coastal communities. By all means let us look at the new European maritime and fisheries fund to see how that can be done, particularly to help fishermen purchase and use more selective gear. I reiterate our desire to see more scientific research underpin decision making. I underline the fact that the Commission proposes a general objective of restoring stocks to levels above those that can produce maximum sustainable yield by 2015, which we believe will be extremely difficult to achieve. We suggest that the marine strategy framework directive, which aims to restore commercial stocks to within safe biological limits by 2020, is a more realistic and achievable aim.
In conclusion, we greatly welcome this opportunity and urge the Minister to grasp it and to get to Brussels or Luxemburg to make friends and use his charm to persuade our allies to introduce this groundbreaking change. We applaud his efforts and are 100% behind him in that regard.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am going to have to introduce a time limit of 11 minutes, due to the number of Members who wish to speak.
Mr Frank Doran (Aberdeen North) (Lab)
I congratulate the hon. Member for Thirsk and Malton (Miss McIntosh) on securing the debate and on the good work the Environment, Food and Rural Affairs Committee has done. I managed to secure a debate in November through the good offices of the Backbench Business Committee in November and in my capacity as secretary of the all-party group on fisheries. The message we tried to get across in that debate, which came across strongly, was that we are all in this together—it is one area where we are—and pushing in the same direction, and I think that the Committee’s report is an extremely valuable addition to the material we have at our disposal. Like the hon. Lady, I want the Minister to go to the Fisheries Council and make sure that these points are hammered home after he has built alliances and got the votes needed to make Britain’s position secure.
It would be foolish of me to try to mention all the points covered in the Committee’s report. I think that it comprehensively covers my concerns and those of the fishing industry and makes a number of useful comments. We need to continue to make the point about discards. We are all opposed to discards, but there are no easy solutions to the problem. It is a very complex issue, particularly in our mixed fisheries. I know from people in the industry that they felt that in publishing its proposals the Commission handled the problem of discards in a way that was more like issuing a press release to get them out of a spot than it was about providing a strategy. The problem needs an awful lot of careful consideration, clear rules, technical improvements, which are being made all the time, a process of consultation and, crucially, a buy-in from the industry.
The Committee highlighted the weakness of the science. That area needs to be worked on, but that cannot be done by the UK alone. Around 60% of our fish species are not properly recorded, and other nations with an interest in fishing are in an even worse position, so effort is needed at Government level and at Commission level. Overcapacity is an important problem, and there have been many attempts to deal with it over the years, most of which have failed. I was interested in the concept of transferable fishing concessions. The hon. Lady rightly pointed to what we have at the moment, which strikes me as a transferable fishing concession system, because quotas are freely available, which I think causes a number of problems for the industry. I was interested to hear the hon. Lady talk about the impact of transferrable concessions on our coastal communities, because they are being damaged already. When the quota system was introduced, following the Commission’s introduction of total allowable catches, or TACs, a market in transferrable fishing concessions was effectively created in our country.
Sheryll Murray
Does the hon. Gentleman not agree that the problem with transferrable quotas was exacerbated from 1 January 1999, when his—Labour—Minister agreed to introduce fixed-quota allocations? Before that we had a rolling track record, but in 1999 his Minister agreed to fix the track record of every vessel to the historical average between 1993 and 1996. That is where we had the problem.
Mr Doran
We have always had a problem with quotas. I agree with the hon. Lady to a certain extent, but all Governments since 1973 have had problems and made mistakes in that area.
We have a system in which quotas are bought and sold, and many are held by individuals and companies that once operated fishing vessels which have since been decommissioned. Quotas are often leased out, and sometimes at eye-watering prices. I shall not cite any because I have not seen the details, but the figures that I have been given are staggering, and that has a perverse effect on the industry, because the lower the TAC in any one year, the higher the quota price, distorting the industry quite seriously.
When we have ever-more expensive fishing vessels, fuel, insurance, labour and other costs as we do now, we have a market in quotas which distorts the industry. I strongly support the point, made by the hon. Member for Thirsk and Malton, that the register of who owns quotas should be published. That area is in complete darkness, and the system should be looked at seriously.
Jim Shannon
Does the hon. Gentleman feel that any transferrable quotas should go to those registered boats that are active fishing boats only, not to football clubs or to whoever else seems to have control over quotas?
Mr Doran
There are many ways in which we could resolve the problem, but the starting point is to shed a little light on the system and to see what is happening. That is extremely important.
One area that the report does not cover, but which I should like to say a word or two about, is black fishing. I have had brief conservations with the Minister about it, and I have mentioned to him twice now, once on the Floor of the House and once in private, that I want to have a meeting with him and will write to him, and I am in the process of gathering material for our discussion.
We are working on the assumption that the whole issue of black fish is not a problem any more, but I am not sure that that is correct. Everyone in the Chamber will be aware that there have been some serious criminal cases—they were not trials, because everyone pleaded guilty—in the Scottish courts in which a number of fishermen and fish processors have been found guilty of serious offences.
We are talking about tens of millions of pounds, and everyone I know in the fishing industry, no matter at what level they are, knows that the figures that have been quoted, and which were prominent in the individual trials, are just the tip of the iceberg. It was a much more serious issue. I shall not say much more than that, because, although a number of cases been dealt with, one more has still to be dealt with and will be in court later this month.
From the information that we have so far on the way in which the system operated, it is apparent that a very sophisticated process was under way. Skippers falsified their log books as they landed their catches, lying about how much fish was on board. Weighing scales at the factory were rigged. I am told that at a factory at the centre of one case there were two computer systems—one computer, recording a false weight, was visible to the regulators, and the other one was in the loft recording the true weight. There was separate pumping equipment on the quay, with the legitimate fish to be declared sent through one system and the black fish sent through another. I am talking about pelagic fish; I should have emphasised that. Exactly the same thing has been happening in the white fish industry.
The situation has not yet been dealt with, and it might not be, because the trials may have been just for effect, to try to focus on the problem and make sure that it was properly killed. A police officer who made a statement at one of the trials said that there is an assumption that nobody is a victim in these cases except our fish stocks. In fact, there have been a large number of victims, most of whom are in the fish processing industry.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
I do not know much about what the hon. Gentleman is talking about as regards white fish, but could there be a difference in the case of the pelagic stocks, given that any black fish in a white fish area could be non-discarded fish that people are planning to land rather than dump?
Andrew George (St Ives) (LD)
The hon. Gentleman referred to the view that there are no victims in these cases. The sustainable mackerel hand-line fishery in Cornwall has one hundredth of the catch of the pelagic quota that is available to the purse seine industry in Scotland, and as a result of over-fishing in Scotland, people are losing quota in Cornwall.
Mr Doran
The hon. Gentleman is absolutely right. There are victims everywhere, and that is just another example.
Over the past few years, I have been involved in taking a large number of statements from people involved in the industry, and I will read out a selection of their comments. There are no police inquiries relating to this material. One fish processor with many years of experience told me:
“The system would work on a basis that a skipper would telephone the agent and declare his real catch, whilst at sea. If it was 1,000 boxes, the agent may find a buyer for 500 boxes and tell the skipper to fill in the log for 500 boxes after he had landed at the market. Before the market the 500 boxes would be unloaded from the vessel and transported to the buyer’s premises.”
In other words, the boxes would not go through the system. He continued:
“The agent would record the sale at the true value and alter the species if required to show the ‘black’ fish as non-pressurised stock. At the end of the quota year he would advise the skipper on which species to show in his catch records to ensure he retains his quota.”
So it is not just about volume but species. If coley were being landed, it might, in order to retain the quota, be recorded as some other fish—haddock was the most popular—and haddock might be shown as whiting. A fish merchant said:
“The situation with black fish started to get silly and I am aware that on one occasion a local fish merchant had 4000 boxes of fish in his yard—all black fish which had been transported from the boats to his yard. Meanwhile there were only 1900 boxes of fish in the market at Peterhead and about 1400 boxes in the market at Aberdeen.”
This wide-scale corruption of the system is a direct product of the introduction of the CFP and total allowable catch—and, I have to say, of the failure of Government and Government agencies properly to monitor the system. I want to discuss that with the Minister at length when we manage to get our evidence together.
To finish, I repeat that the Select Committee report is extremely important. I hope that the Minister will take note of the points that were made in the debate in November, which I know will be made again today, and the points that have been made by the hon. Member for Thirsk and Malton and her Committee, and take the argument to Brussels.
Sheryll Murray (South East Cornwall) (Con)
In just over a week’s time, it will be a year since the best husband and father in the world was snatched from me in a sudden and cruel manner. I would like to make one final tribute to Neil. I have been able to steer a relatively straight course, navigating the various hitches on the chart, such as anniversaries, birthdays, the accident report and the inquest, because of the kindness and support that this House has given me. I would just like to convey a simple message: thank you.
I thank the Backbench Business Committee and my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) for securing this important debate. The opportunity to get some sort of reform of the disgraceful common fisheries policy comes once a decade. This time, we have to secure positive results for the fish stocks and for British fishermen.
Last Thursday I secured an Adjournment debate on the external arm of the CFP, which I am aware that the report does not cover. That arm of the CFP is often forgotten, but it, too, has been a disaster. As I said, that was highlighted clearly in the report by my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) following his visit to Mauritania last year.
However, it does not follow that third-country agreements are always completely wrong. Pieter Tesch, now of the fishing company, Industrie de Peche & Representation, who joined and funded the Mauritanian delegation of four, confirmed that the agreement with Mauritania has the potential to provide alternative opportunities for responsible pelagic vessels, which are currently struggling to stay viable in the north-east Atlantic fishery. He also confirmed that it could assist with the development of processing facilities in Mauritania. I am pleased that the Minister will raise those issues in the Council of Ministers.
The CFP is very complicated. I consider it to be the greatest maritime disaster of the past four decades. The Environment, Food and Rural Affairs Committee report raises many issues. I will look at three that concern my constituency of South East Cornwall.
The first issue relates to under-10 metre vessels and the quota available to them. As I have mentioned in the past, under-10 metre vessels were done an injustice by the inaction of the previous Government. It is wrong that about 76% of the UK fleet is allocated about 3% of the available quota for white fish.
On 6 March the hon. Member for East Lothian (Fiona O’Donnell), the shadow Minister, visited Plymouth and told the Plymouth Herald:
“The inshore fleet plays an important role in the local economy and provides sustainable local products for customers in Plymouth and the surrounding areas”.
She continued:
“It is clear that the current management system for the small scale fleet—under ten metres—is not working.”
Finally, she said:
“I want to see a more profitable, sustainable fishing industry in the South West. Politicians need to listen to the voice of the industry.”
Does the hon. Lady realise that her Government’s inaction over 13 years and the introduction of fixed quota allocations from 1 January 1999 worsened the problem considerably? Given her words to the local press in Plymouth, perhaps when she speaks she would like to apologise and acknowledge that fact. I was the chairman of a fish producers’ organisation when those allocations were introduced, so I know exactly what happened.
Ian Paisley (North Antrim) (DUP)
The hon. Lady’s poignant remarks will have touched the heart-strings of everyone here.
In Northern Ireland we have come to an interesting and amicable way of resolving the issue of the under-10 metre fleet. The Minister saw that when he came to Portavogie. I wonder whether he has shared that experience, so that English fleets will not have to face the pariah status that has been placed upon them.
Sheryll Murray
One problem is that when fixed quota allocations were introduced there was no quota restriction for under-10 metre vessels. The Ministry of Agriculture, Fisheries and Food secured an agreement with the European Commission to estimate the catches of the under-10 metre fleet, and, sadly, they were grossly underestimated. A few years later, the registration of buyers and sellers was introduced. Sales notes had to be submitted to the European Commission for every fish landed, so the flaw in the estimates of the under-10 metre vessel catch was there for everybody to see.
Amber Rudd
Does my hon. Friend agree that it seems extraordinary that when the register of buyers and sellers was assessed and it became evident to everybody that there had been a huge mismatch in the numbers, something was not done to address it? Instead, our fishing industries were left with the damaging consequences.
Sheryll Murray
I was at a meeting in Plymouth at the time, with DEFRA officials at the highest level. The Department was thrown into disarray and had no idea how to address the problem. On top of that, when the fixed quota allocations were introduced, a figure was put in place to underpin the catch of under-10 metre vessels. If the quota available to them in December fell below a certain level, those vessels were guaranteed to be able to catch that set amount. Again, however, it was set far too low. That was how the problem arose.
Because of the last Government’s inaction, our current Minister has been left in a complicated situation. I know that he is doing his best to sort things out. Evidence given to the Environment, Food and Rural Affairs Committee by the South West Fish Producers Organisation described the absence of a separate management system for small vessels as “lamentable”. I thank the Minister for at least looking for a solution to the under-10 metre quota, and I ask him to consider the economic implication of leasing quota for those small vessels. We do not want economic strain to compromise safety.
The second matter that I wish to raise is the 12-mile limit. Article 6, paragraph 2 of the new proposal states that the current access, which includes equal access to common resource as well as access to the area between the six and 12-mile limits, will continue. In a previous speech I have told the House how the UK is disadvantaged, with other member states having 28 rights of access to UK waters compared with just three for the UK in reciprocation. Members need only to have watched “The Fisherman’s Apprentice”, with Monty Halls, last night on BBC 2 to have seen the evidence.
Andrew George
The hon. Lady is making a very strong case. She will be aware that the historic entitlements between the six and 12-mile limits are often used by boats from France and other places that are not the ones that originally had those entitlements.
Sheryll Murray
That is my point precisely. That agreement was made based on historic rights 40 years ago, and none of the boats that were fishing then are now accessing the six to 12-mile limit area. There is a strong case for our Minister to go and argue that those entitlements should end. I know that some of the member states that have acceded in subsequent years do not have other member states’ vessels accessing their 12-mile limit, so I urge my hon. Friend the Minister to go and make that case very strongly.
Marine protected areas are different from the special areas of conservation introduced under the Natura 2000 programme. The latter cannot take account of socio-economic aspects to protect our coastal communities, but the former can, and indeed must, do so. Will my hon. Friend the Minister consider providing lifetime rights if a fishing method is excluded from a marine protected area? Those rights would be for the duration that the vessel was fishing or the skipper was operating, but it would allow fishermen to continue to earn a living using the very expensive gear in which they have invested.
I know my hon. Friend fully understands my closeness to the industry, which I have worked with for more than 20 years, and that he has fishermen’s interests in mind. Fishermen work hard in the most dangerous conditions, and I am sure the House will agree that they deserve the utmost respect for earning a living in such a precarious way. They keep Britain eating fish.
Austin Mitchell (Great Grimsby) (Lab)
It is a pleasure to follow the hon. Member for South East Cornwall (Sheryll Murray), with whom I agree almost totally. We should express our gratitude to the Backbench Business Committee for allowing this debate, and to the Environment, Food and Rural Affairs Committee for its excellent report. It is the best report on fishing since the report of the old Agriculture Committee, which I chaired. That was 20 years ago, and that long space goes to show how much importance such Committees attach to fishing.
I was sorry that the hon. Member for Thirsk and Malton (Miss McIntosh), the Chair of the Environment, Food and Rural Affairs Committee, eschewed the use of the slogan “Yorkshire Fish for Yorkshire Chip Oils”, because it would be a winning slogan in any campaign in Yorkshire. I shall certainly use it—not in Grimsby, but in Yorkshire—come the election.
The report is good, but the one quarrel I have with it is a substantial one. It says that the principle of relative stability should be looked at, which is a dangerous precedent. Just because fish that normally swim off the coast of Spain migrate north because of global warming does not mean that we should allow Spanish fishermen to disturb the principle of relative stability, which excludes them from our waters.
The debate is important because crunch time for the common fisheries policy is approaching. It is a very centralised policy—it is Gosplan, Soviet Union-style planning for fishing. It applies one-size-fits-all regulations for varied waters and fleets, and dictates to fishermen instead of working with them. It is also very political. There are increases in quota for political reasons, and when that leads to over-fishing, cuts are made by stopping fishermen fishing, either by limiting the number of days at sea or by reducing the catch. That is an insane way to carry on.
The common fisheries policy remains a folly that will not work, cannot be made to work and should be ended. The one thing I cheered when the Conservatives won the election—there was only one thing—was that they promised to repatriate powers from Europe. That, presumably, has been diluted by the coalition with the Liberal Democrats, who will probably smuggle those powers back across the channel in the boots of their cars. That promise was a good sign, because this is the time to repatriate powers, and power over fisheries is the power we should repatriate.
Austin Mitchell
I do not want to get into Liberal by-paths on this issue. Just because I get up and speak the European truth does not allow the Liberal party to interfere with my speech in the way that it interferes with the Government’s policy.
Having asserted the position and said what I would like to see, I will put my “moderate but non-new Labour” suit on. To deal with the situation as it is, we must take the approach of accepting the Committee’s recommendations. The preliminary proposals from the Commission, which are expanded in the so-called non-papers—a good European term—telling us what the Commission’s decision means, are unacceptable. They are particularly unacceptable on handing powers down to the regions, because we want regionalised decision making in fishing. That is essential, but the Commission proposes the bare minimum it could get away with—
Jim Shannon
I am not a Liberal, so the hon. Gentleman is allowing me to say a few words. Does he agree that the potential for a genuine regional approach is immense, as it would involve the community and the fishing industry? Regionalisation would make the fishing industry sustainable for the future, and it is the way forward.
Austin Mitchell
It is certainly the way forward, as I shall argue. We need the 10-year approach and the regional basis that the hon. Gentleman suggests. We probably have to accept that the Commission will set the standards and objectives up there in the stratosphere in Brussels, but we must hand management—including the technical measures, the timetables and implementation of the decisions taken in Brussels, and what kind of quotas are used—to the regional advisory councils, which are far better at handling it and can do so in consultation with fishermen—the stakeholders in the industry. The regional advisory councils can also work with the scientists, bringing them together with the fishermen. That is the basis of management, and that is what the Minister has to fight for. Bringing all the stakeholders in is effectively what the Committee recommends.
Decision making on these matters should be brought down from Brussels. Unfortunately, the Commission is proposing not only to maintain the old control system, but that it should have co-decision-making powers with the Parliament, which is potentially disastrous.
Mr MacNeil
Is not one of the problems that the template of the common fisheries policy will continue? Rather than the fishermen feeling contempt towards Europe, they will feel contempt towards the regional bodies. What we need to do is look at other jurisdictions, such as the Faroe Islands, that have days at sea and area closures, accompanied by a zero discard policy because fishing has been moved out of an area. The template needs to change.
Austin Mitchell
I agree with the hon. Gentleman—that is what we have to do and what we could operate regionally if we got the powers to do so. That is the way that we have to go, but if co-decision making is handed to the European Parliament, politics will be involved again. I can imagine the Spanish MEPs will fight vigorously for their industry in a way that the English MEPs are not conditioned to do.
I imagine, too, that the conservationists will have a much louder voice than the fishermen, because there are no fishermen in the European Parliament but there are lots of conservationists. Although some of my best friends are conservationists, their interests are not necessarily those of the commercial fishing industry. Conservationists are also over-alarmist about stocks, and on the basis of panic about stocks, they propose measures that will never work. It is vital that we separate policy and implementation. Implementation should go down to the RACs and policy stay in Brussels.
Ian Paisley
On the hon. Gentleman’s point about discards and conservationists—as a parliamentarian, he will be interested in the nuances of this—the hon. Member for Bristol East (Kerry McCarthy) yesterday introduced a very useful ten-minute rule Bill on food waste. She said that surplus should be donated and redistributed in preference to disposal. We can apply the same food waste policy to fish. We should not be throwing it back in the sea: we should be landing it and redistributing it.
Austin Mitchell
The hon. Gentleman will have the opportunity to make his own speech—or discard it, as the case may be—and I shall come to that point in a moment.
The second failure in the Commission’s proposals is the failure to deal with over-capacity. They say that decommissioning has failed to reduce capacity, which is just not true. It has certainly reduced the impact of fishing on North sea stocks, especially cod, plaice, sole and round fish. Instead of proposing a European decommissioning system, financed by Europe and not by the national Governments, the proposals would throw the problem back to the nations through the transferable fishing concessions. They are an improvement on football clubs owning quotas, which was very odd, and, as the Committee suggested, they could give preference to coastal fishing communities, which certainly should be done. However, we have to phase them in much more slowly than the Commission envisages. The Danish transferable fishing concessions were successful only because they followed several rounds of decommissioning of Danish vessels. It is wrong, therefore, to impose this as mandatory on all states.
On discards, the Commission has jumped on the populist bandwagon and passed the odium back to the member states. Its proposal is that discarding should be stopped between 2014 and 2016. That ignores the fact that most discards are due to CFP measures. If we set quotas and total allowable catches in mixed fisheries, we inevitably get discards because fishermen cannot land anything outside their quota. The proposal also takes no account of the fact that the Commission’s cod plan led to more discards—the cod catch did not increase as the cod stocks grew, so cod was being caught and chucked back. That was a failure to adjust the policy quickly enough.
These proposals also ignore the fact that the industry has already reduced discards by 50% over 10 years. That is the way we have to go. The industry has to do it by technical measures. Square-mesh panels, for example, were a great innovation and helped to reduce discards. Let us work from that path and to a longer timetable, as the report suggests, and not to the too-intense, too-tight timetable in the Commission’s proposals.
The same goes for the maximum sustainable yields. It is a good idea to identify the mortality level that will maintain high yields, but it is crazy to propose that the most vulnerable stock should determine the limits of exploitation for all other species in that area. That is folly. It will place limits on all catches in areas where one stock is threatened. Once again, that decision needs leaving to the regions to develop an approach that is suitable to their areas.
I will briefly mention common fisheries efforts to buy quotas and fishing rights in foreign jurisdictions at our expense—we pay for it. They are usually taken by the Spanish. They have about 400 vessels doing that, whereas we have about nine—so there is nothing in it for us. If the industry wants to buy quotas overseas—it has taken a fairly aggressive approach towards the small fishing fleets of poor nations—it must buy them itself and not use money from our contributions.
I shall wind my speech to a conclusion. These proposals in the so-called non-papers are not what we envisaged. The Minister has to fight against them along the lines recommended by the Committee. I shall conclude with one interesting fact in the representations from the National Federation of Fishermen’s Organisations. The approach to resource management is on YouTube, so I refer all Members to YouTube for the rest of my speech. It has a presentation by Elinor Ostrom pointing out that when we manage resources, we need the involvement of stakeholders, polycentric governance, which is what we are suggesting on the regional advisory council, and solutions tailored to the specific needs of the area, and the centre should provide oversight only. I recommend that everybody now exit the Chamber and turn to YouTube.
Amber Rudd (Hastings and Rye) (Con)
It is a pleasure to follow the hon. Member for Great Grimsby (Austin Mitchell) and to hear his support for our report.
The common fisheries policy is friendless—I think we will hear more about that from hon. Members this afternoon. However, it is not just we who say that: it is the fishermen, the environmentalists, to whom it has not been the solution they expected, and—let us face it—now the population at large, to whose attention the issue of discards has been brought. Discards are the very manifestation of the failure of the CFP. However, we have to be careful, as my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) said in opening the debate, to ensure that we do not wish for the end of discards without explaining how to get there. We all want to see the end of discards, but the current system, with the mixed quota and a mixed fishery, does not allow for it. We therefore have to proceed in a measured, step-by-step way that will allow for what we all ultimately want: the end of discards.
I cannot overstate the mess and confusion that the industry faces. If Mephistopheles himself had tried to design a system intended to confuse and inhibit people, and to get the worst possible outcome for all the stakeholders, he just might have come up with the current system.
Jim Shannon
Just to step back to the issue of discards for one second, the hon. Lady will be aware of the progressive steps that local fishing organisations have taken to try to address it—through net sizes and so on. Does she feel that those steps—put forward by fishing organisations and coming straight from the industry itself—should be taken on board as a way of addressing the issue of discards directly?
Amber Rudd
I agree entirely. Local organisations and local communities are coming up with their own solutions, which is absolutely to be recommended. It also points the way even more to what we have been hearing this afternoon, which is that we should have regional solutions, so that although we will allow a common fisheries policy to exercise overall control, we want regional solutions, selected within Governments.
Mr MacNeil
I am sure that the hon. Lady is aware that there is a zero-discard fishery quite close to UK waters, off the Faroe Islands. The boats go and fish, the area is closed, and they move on. The common fisheries policy is a manifestation of the obtuseness of European policy. Europe cannot move quickly to a working solution that is already being used off the north-west of the UK. A discard is only a bureaucratic label for a fish that cannot be landed, owing to other problems created by that very mechanism. The way out is already in existence. However, I have been in this place for seven years and I have attended many of these debates, and we face the same problem all the time. We cannot move the obtuse juggernaut that is the common fisheries policy—end of story. We are stuck.
Amber Rudd
I am not really familiar with the context of fishing off the Faroe Islands, but I am sure that the Minister is and that he will throw some light on the issue.
I return, however, to the main issue I have with discards, which is that that they are, I believe, down to the quota system being allocated for particular fish stocks, rather than for what we actually have, which is mixed fisheries. In part, that is an indication that we have a major problem with the fishing industry. I am entirely sympathetic—I know that many other Members here are too, as are those on our Committee—when it comes to the difficult pass that the Minister has been given. He has to find a difficult balance between the different interests in the fishing industry.
Sheryll Murray
Does my hon. Friend agree that part of the problem with a mixed fishery is that different sized nets are needed for different species of fish? Some fish, such as cephalopods—squid or octopus—grow a lot more quickly than other species. That is why we have such a big problem, and there is no simple solution.
Amber Rudd
My hon. Friend is well known for being incredibly knowledgeable about these issues, and she refers to one tool of the trade—changing the mesh size—that could be used to limit the quota and the type of fish stocks landed. She is also absolutely right in her final point. This is indeed a complicated issue, and there is no simple solution. Indeed, looking back on it, it seems that every time a Government or a Minister has tried to make a change for the better, the law of unintended consequences applies—we move a little bit this way and something happens on the other side. At the moment, the Minister is caught between trying to manage the divergent interests of the larger fishermen, in the POs, and those of the smaller fishing communities, in the under-10-metre fleet.
Andrew George
The hon. Lady says that there is no simple solution. As the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) suggested, either the quota system, which is a blunt instrument, could carry on in its present form, or we could get rid of it and base fishing policy on effort control. The problem with getting rid of it is that quota is marketable and has great value, and I do not think that any Government would want to compensate all those people who have valuable fishing—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Can we have shorter interventions? A lot of Members still want to speak, and I would say to anyone who tries to make a speech by means of an intervention that it is not going to happen.
Amber Rudd
The hon. Gentleman makes an interesting and quite radical suggestion, which brings me to my next point. Perhaps the Minister should consider an independent review of some sort. There are so many different interests involved, and so many ways of trying to move the goalposts and achieve one outcome or another, that I am not sure it is possible for one Minister to act as referee. Perhaps he should consider appointing an arbitrator to conduct an independent review, in order to achieve an outcome on which all the stakeholders could agree.
One proposal on common fisheries policy reform that our report has looked at involves transferrable fishing concessions. My concern, and that of other Members, is reflected in the report. It is that such concessions would not be good for the under-10 metre community. The evidence from other countries is that they have worked against smaller communities, and that the under-10s tend to suffer under them. Those communities tend to lose out in the initial allocation of quota, there is no route for new entrants, and the environmental and social performance is not taken into consideration. Under the present proposals, there is 5% of potential quota allocation for environmental and social performance. I would propose—this is not in the report—that, if we had such a system, there should be a far greater amount allocated to social and environmental performance, which is incredibly important. That would also help to stimulate the under-10 metre communities, which tend to do a lot of social and environmental work locally
The nub of the matter is the question why can we not have a fisheries policy that supports fishing communities? Our current policy has failed—the evidence of that is in our report. Communities find themselves diminished, and the discards continue. We need a new impetus, a new effort and new ideas. Under the new Government, we definitely got the new effort. We began well, by introducing a measure that the smaller, under-10-metre communities had been seeking for a while—namely, a one-off re-allocation of the quota. Obviously, as someone who comes from such a community, I would say that that was not enough, and that it was too conservative, but the Minister will have found, when he embarked on the re-allocation, that he had entered a swamp of divisiveness and infighting between the different interests. The previous Government tried to work with the under-10-metre communities, but they ended up suffering from fishing reform fatigue and gave up on their effort to help. Another great advantage of having a Conservative coalition Government is that we have a new impetus and a new effort. I say to the Minister: keep up the energy and the enthusiasm, so that we can get the reforms that this country so badly needs.
I want to reiterate my concerns about the transferrable fishing concessions. We must not allow them to cement what should be a public resource as a private commodity. When the Committee went down to Hastings and held discussions with both sectors, they acknowledged the need for decommissioning. As hon. Members have said, however, there have been problems with that in the past, even though it was supported by Government money. The hon. Member for Aberdeen North (Mr Doran) mentioned that the process had had limited success.
In Hastings, we also welcome the support for alternative initiatives. We have been lucky enough to receive £1 million of the £8.7 million put aside under a European initiative involving Fisheries Local Action Groups—FLAGs—to help to support fishermen into new initiatives. I urge fellow Members to come and look at the exciting, adventurous work being done on the Stade in Hastings, where our fishing fleet is, to find alternative methods of employing fishermen and to upgrade their kit and provide new tractors. That is a positive way of trying to help our fishermen into the future.
Above all, when we consider how we can help our fishermen, we need to try carefully to find the balance between satisfying the environmentalists, which we all are, the fishermen who need to continue their lives and the needs of the population who will not accept a system that has so many discards. I am fortunate to come from Hastings, where fishing is so important. It is crucial that my residents in Hastings and Rye know that this issue is taken very seriously. I look forward to hearing the Minister’s reply and the remaining comments from other Members.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I begin by congratulating the hon. Member for Thirsk and Malton (Miss McIntosh) on securing the debate and particularly on the work she and her Select Committee have done on the reform process for the common fisheries policy. It is very important for this to get the scrutiny it needs. The CFP is of huge significance for the fishing communities in Banff and Buchan, but coastal communities all around the coastline have a real stake in the outcome of these negotiations.
The successful reform of the common fisheries policy is going to stand or fall on whether or not measures can be put in place to decentralise decision making. That is very much at the heart of the debate, and I welcome the focus that the Chair of the Environment, Food and Rural Affairs Committee placed on that issue in her remarks. I am concerned that, if we do not achieve that decentralisation, we will preside over the further demise of our fishing communities and the destruction of our marine environment.
I suspect that the commitment to decentralisation is shared across this House, and it is widely shared in many other fishing nations in the European Community. The problem is that the Commission’s proposals to date do not set out any workable mechanism for that to happen. There is no framework for regional co-operation among member states. Until we have that framework and that mechanism, I am afraid that our ambitions for decentralising the CFP will remain aspirational.
The part of the Committee’s report that was rightly the focus of its Chair’s remarks—and it has rightly attracted considerable attention outside this Chamber, too—is, of course, the suggestion that the exclusive competence of the Lisbon treaty could be interpreted to allow aspects of fisheries management to be devolved to member states. It goes without saying that I would like that to be the case and I hope that the treaty can be interpreted in that way. I am sure that many lawyers are rubbing their hands in glee at the prospect of a process of legal debate on the wording of the treaty to see whether it can be interpreted in that way.
It would be fair to say that, to date, the Commission has taken quite a restrictive view on how the treaty can be interpreted. In that sense, I do not want to be the party pooper, but I think we need to temper our expectations. I would love to be optimistic, but I want to hear from the Minister whether the Government have taken legal advice on this aspect of the Committee’s report. I would be very keen to know what progress we might be able to make at the European level from the proposals in the report. I look forward to hearing his remarks; I hope his legal advice will give us some cause for optimism. We also need to know from him what progress has been made in building support for decentralisation across the other member states, which will, of course, be crucial.
Decentralisation is also crucial to the sustainable management of our fish stocks and the sustainability of fishing communities and our fishing industry. If we look at the progress made since the introduction of the regional advisory councils and the industry’s involvement in fishing management, we can see that it is much better for the people affected by the decisions to be involved in the decision making. In those circumstances, we get much better outcomes.
What we have seen in Scotland with the conservation credit scheme—with increased use of selective gears, catch quotas and real-time closures—is that all its measures have contributed to significant improvements in sustainability. We have seen dramatic reductions in discards and dramatic increases in the number of stocks certified by the Marine Stewardship Council as being from sustainable sources. Crucially—this is the key point on the issue of discards—it prevented the need to discard fish by avoiding unwanted catches in the first place. That has to be the top priority.
If we are serious about tackling the causes of discarding, we need to do it fishery by fishery, and we need to take on board the challenges of our mixed fisheries. I will not repeat the remarks of the hon. Member for Great Grimsby (Austin Mitchell), but they were extremely salient. We must look in a practical way at how we do this, and be very clear that one size simply will not fit all.
Andrew George
The hon. Lady said that conservation measures had resulted in a drop in discards. A seasonal closure of the Trevose ground off the north Cornish coast has led to an abundance of cod, and as a consequence most fishermen are using their monthly cod quota on the first day of every month. There is a now great deal of discarding.
Dr Whiteford
The hon. Gentleman makes a valid point about what is happening in his constituency, and clearly there are similar stories all along our coastline. That is a prime illustration of the fact that—as I think Members in all parts of the House agree—the present system does not work, and is not fit for purpose.
A deep-seated and long-standing problem is the issue of compliance across the European Union. It is very frustrating for our fishermen to see the rules applied so inconsistently. The fact that quota restrictions are being flouted with impunity in other parts of the EU not only causes great resentment, but undermines confidence in the system and people’s sense of ownership of the system of fisheries management. We know from the experience of recent years that conservation measures that have been developed in co-operation with the fishermen have been the most effective in conserving fish stocks. The current problems are symptomatic of a top-down CFP, and of that lack of a sense of ownership.
Barry Gardiner (Brent North) (Lab)
Having pointed the finger elsewhere in Europe, would the hon. Lady care to comment on a recent case in the United Kingdom—indeed, in Scotland? There was a parallel landing industry, and the Government were taking levies from it.
Dr Whiteford
I am grateful to the hon. Gentleman for giving me the opportunity to take up the comments made by the hon. Member for Aberdeen North (Mr Doran). I know that the hon. Member for Brent North (Barry Gardiner) was not present to hear that speech, but it dealt extensively with such problems.
Obviously I cannot discuss the situation while criminal proceedings are taking place, but the fact that the police launched such a successful investigation into the criminality that was taking place has taught us the lesson that we cannot take our eye off the ball in terms of our own compliance. However, we must ensure that criminality is not also symptomatic of people’s loss of confidence in the system. We should bear in mind that otherwise law-abiding people resort to it because they do not believe that the system is working.
I was glad that the hon. Member for Thirsk and Malton referred to aquaculture. Because of the crisis in the sea fisheries sector, it is often not given the attention that it deserves. I am concerned about by the Commission’s proposal for multiannual national strategic plans, and, buried in there somewhere, the rather bizarre suggestion that there should be a regional advisory council for aquaculture.
I believe that Scotland is the largest producer of Atlantic salmon in the EU, and the third largest producer in the world. In 2010 we produced 154,000 tonnes of salmon, worth more than half a billion pounds at farm gate prices, which represents more than a third of Scotland’s food exports. We also export substantial amounts of shellfish including mussels, oysters and scallops, and other species such as trout and halibut. The rapid growth of the sector at a time when the rest of the economy has been stagnant has been very encouraging. It is a success story for job creation and for economic growth, including growth in remote rural communities that do not have much else going for them. I see no benefit whatsoever in imposing a new layer of European regulation and bureaucracy on that sector, and I expect a great many risks to be posed to it if we go down that road.
I have a particular constituency interest. Although Banff and Buchan is often thought of as being at the heart of the fishing industry, it is also a major centre for fish processing. The factories in the north-east process large amounts of farmed fish, and at a time when the sea fisheries are so unstable and uncertain and can fluctuate so much, the farmed fish sector has a hugely stabilising effect on the viability of the processing sector. An increase in political interference in the aquaculture sector from Brussels—or from anywhere else—would not be in anyone’s interests. We must not try to mend successful businesses that are not broken.
There is no consensus across the UK about transferable quotas—or individual transferable concessions as they are now being called. I welcome the Environment, Food and Rural Affairs Committee’s remarks about the problems the ITCs cause for the under-10 metre fleet. Those problems are not confined to that fleet, however. Other communities will also be affected, including some in my constituency.
The real issue is that most of the fishing industry in Scotland still involves family-owned vessels that maintain a strong link to a local port. They are at the heart of communities, and I do not want those communities to be bought out by large multinational fishing conglomerates.
Mr MacNeil
Does my hon. Friend agree that the ITCs are a gift for speculators and that we would be bemoaning them in five or 10 years’ time?
Dr Whiteford
My hon. Friend is absolutely right.
My real fear is that any safeguards we put in place to protect the economic link between the quota and the community or the member state will not be robust enough to withstand the law. I suspect that they will be open to legal challenge, and that we will quickly find that our fishing communities become tradeable commodities. That would be a death blow to communities that are heavily dependent on fishing, and where there have historically been strong family and community ties at the heart of the industry.
I make this plea to the Minister, therefore: any system of quotas must not be mandatory. I would like an assurance from him on that. We must introduce a workable system that does not make such quotas mandatory.
I want to conclude by talking about the objective of social and economic sustainability. Stating that in the legislation would mark a huge step forward; it would make it clear that we want the sustainable development of our coastal communities. That recommendation in the Committee report is important, and I pay tribute to the hon. Member for Thirsk and Malton for putting it there. That move would change the whole terms of how we discuss fisheries in Europe. It would make it clear that the subject is about not only the fish in the sea, but the people who live in harmony with the ecosystem in our coastal communities, and who have done so for centuries. I urge the Minister to push for that at the European level, and, as always, I wish him well in the ongoing negotiations.
Peter Aldous (Waveney) (Con)
I welcome this debate, and I am grateful to my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) for securing it. It provides an opportunity to review the progress and speed of CFP reform, a subject in which many people across the country, and not just in coastal constituencies, are extremely interested.
My initial thought was to start with an apology for being parochial, as my main objective is to promote the interests of the under-10 metre fleet and local fishermen fishing out of Lowestoft in my constituency. I then thought again, however, and concluded that there is no need for an apology because local fishermen, fishing sustainably, are a very important part of the solution. They are best placed to help manage fisheries sensibly and responsibly and to promote what is an important part of the economy in coastal communities.
CFP reform is long overdue, and it is right that this issue is now centre stage and that there have been a number of debates on it during the first two years of this Parliament. A number of groups and people are responsible for raising the profile of the issue, but I shall single out four. The first is the Minister, who may represent a constituency as far from the coast as one can get, but who has approached his task with determination, sincerity and understanding. The second is Maria Damanaki, whose approach has, in many respects, been a welcome breath of fresh air in the corridors of Brussels. She understands the problems and has come up with proposals, which, although they may need some amendment, provide a foundation stone on which reform can take place. The third is the Select Committee on Environment, Food and Rural Affairs, under the chairmanship of my hon. Friend the Member for Thirsk and Malton (Miss McIntosh)—
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
The exemplary chairmanship.
Peter Aldous
The exemplary chairmanship, indeed. The Committee has now carried out two inquiries and has published two detailed reports setting out the challenges that need to be tackled. My fourth mention goes to the fourth estate, in the form of Hugh Fearnley-Whittingstall. He has brought the scandals and obscenities of the CFP into the nation’s living rooms. He has reached the parts that politicians today cannot reach on their own.
The stage has now been set. It is accepted that the system is broken and that it has failed both fish and fishermen alike. We now need to press ahead with putting a new system in place. That will not be easy, as there are those with vested interests, such as other countries in the EU and those who hold quotas and do not fish, who will resist reform.
As the motion sets out, there is a need to move from a centralised, bureaucratic decision-making system to decentralised arrangements that respond to the needs of local fisheries and local communities. If we go on as we are now, fishing communities around the country, such as the community in my constituency, which is in any case a very pale shadow of its former self—
Sheryll Murray
Does my hon. Friend agree that the port of Lowestoft has probably lost more vessels than any other? I am particularly thinking of the Colne fleet and a lot of the inshore vessels, too.
Peter Aldous
I agree entirely with my hon. Friend. I am conscious of the fact that Samuel Richards, who built a lot of the trawlers over the past century or so, was originally a Cornishman who moved up to Lowestoft where he set up his shipyard. In Lowestoft, people used to be able to walk across the trawl basin, from one trawler to the next, but now we have no more than 15 under-10 metre boats and we cannot do that. It is not just trawlers and the fishermen who go; the whole supply chain is affected, too. Remarkably, despite that utter devastation, the infrastructure is still in place in Lowestoft, and that is what we now need to save.
Bob Stewart (Beckenham) (Con)
I have been listening carefully to my hon. Friend. My constituency is miles from the coast, but it does seem that the CFP is a disaster and that things are going to be really dreadful. A little fisherman—one in the under-10 metre fleet—will have to be illegal or will go out of business, as is clear in Lowestoft. Does he agree with that perception?
Madam Deputy Speaker (Dawn Primarolo)
Order. Before the hon. Member for Waveney (Peter Aldous) starts speaking again, may I remind hon. Members that we have an 11-minute time limit? We are going to overshoot because of interventions, so either the interventions will have to decrease or the time limit will go down. Time has not been docked from the hon. Gentleman, but we will not conclude this debate on time if we do not follow that approach.
Peter Aldous
Thank you, Madam Deputy Speaker. I agree entirely with what my hon. Friend has just said.
We also need to have regard to our fish stocks. Three quarters of the EU fish stocks are over-fished, and only eight of 47 fish stocks in UK waters are in a healthy state. There is a need to protect spawning grounds and to manage fisheries responsibly.
Fisheries from the Mediterranean to the sub-Arctic are so varied that a one-size-fits-all approach cannot continue. There is a need for a range of tailored measures designed to suit the needs of individual fisheries. Maria Damanaki’s vision of the EU as a lighthouse, with member states steering the ship, is the course that we should look to pursue. There is a need to involve local fishermen, such as those in Lowestoft, to make full use of their expertise and knowledge, which has been built up over generations. They should be working alongside scientists, such as those at the Centre for Environment, Fisheries and Aquaculture Science, which is also in Lowestoft.
The European Commission has stated that it wants a scientifically set maximum sustainable yield for all fisheries to be in operation by 2015, while the Environment Food and Rural Affairs Committee has questioned whether that is realistic and whether we should instead be aiming for 2020. I am aware that in reaching that conclusion the Committee has carried out much research and its approach is underpinned by pragmatism, but I am worried about whether the recommendation sends out the right message. Commercial fishing in many of Britain’s coastal communities is in the last-chance saloon and some fish stocks are severely depleted. There is no time to waste. We need to be tackling the problems that we face now, putting in place a more sustainable management regime as quickly as possible.
The campaign to eliminate discards should be stepped up as soon as practically possible. That is what the nation wants and as their representatives we must do all that we can to deliver. There is no single solution; there is a need for a range of measures. We should develop new markets for less valued species. Consumers and retailers have responded positively in this regard in the last year and the Government need to work with them to go a step further. For example, we should be considering clearer labelling so that shoppers can make informed purchasing choices. An extension of the catch quota system that the Minister has piloted should be considered, alongside the adoption of more selective fishing practices as trialled in CEFAS’s Project 50%. Fishermen should also be making full use of modern technology, using the equipment that organisations such as CEFAS are developing.
There is a need to win over the hearts and minds of groups and countries that might see things differently. MEPs have a role to play and, indeed, in the east of England, Geoffrey Van Orden is doing that work in Brussels, while through the media Hugh Fearnley-Whittingstall is taking his campaign on to the international stage in France, Germany and Poland and, some might say, going into the lion’s den in Spain.
An issue about which I feel strongly is quotas, the system through which the domestic industry is managed. The current arrangements are discredited and do not work in a fair and equitable way. The fish in our seas are a public resource yet they seem to have acquired proprietorial rights with companies and organisations, often with no connection to fishing, leasing them out for substantial profit. The under-10 metre boats that make 76% of the domestic fleet have access to only 3% of quota.
Dr Wollaston
Does my hon. Friend accept that Marine Management Organisation statistics reveal that only 33 English vessels caught more than 80% of the monthly catch limits for quotas for more than six months in each of the past four years?
Peter Aldous
My hon. Friend makes a good point. I was going to come on to the fact that when the under-10 metre boats in my area have used up their quota they have been reduced to going to these slipper skippers with a begging bowl to rent quota, so that they can continue to go to sea to earn a living. It is not reasonable to expect people to run a business and invest in it while such a bizarre scenario prevails.
We also have the bizarre situation whereby we do not have a register of who holds quota and do not know what proportion of it is used each year. In the 21st century, no industry should be regulated in such a lazy way with such a lack of transparency. The CFP reforms envisage quota being traded at a national level, and although I can question whether such a rights-based approach is appropriate, I believe that if we are to go down that road, we must wipe the slate clean and start again. Like my hon. Friend the Member for Hastings and Rye (Amber Rudd), I urge the Minister to give full consideration to commissioning a full independent inquiry on the quota system, providing the inquiry team with a brief to make recommendations as to the future form and use of the system which takes account of the needs of the whole national fleet, not just a small part of it. We should not just tinker with a system that was originally devised in the 1970s, when conditions were completely different and the under-10-metre fleet were not as prominent as it is today.
In the past two years, the Minister has achieved a great deal. The proposals coming forward offer the prospect of a new deal for fish and fishermen, although an awful lot of work is still required on the detail of new schemes, both at European and domestic levels. I am concerned about the pace of reform and that vested interests could delay progress. My concern is that we cannot afford to wait. Fishing has been part and parcel of Lowestoft for centuries; if we delay reform, there will not be an industry left.
Barry Gardiner (Brent North) (Lab)
First, I apologise to the House because I was introducing a debate in Westminster Hall at the beginning of the debate and was therefore unable to listen to the remarks of the hon. Member for Thirsk and Malton (Miss McIntosh), who chairs the Select Committee. I pay tribute to her for the report. I also pay tribute to the Minister, who has worked assiduously on these matters. I know that he is trying to get a very reasonable voice heard in Europe, where Commissioner Damanaki is doing a wonderful job, but is meeting rather large obstacles along the way.
Decades of intensive fishing in European waters have led to dramatic declines in once-abundant fish populations. It is estimated that 88% of all the assessed fish stocks are over-exploited and that almost a third of all assessed stocks are being fished beyond safe biological limits, threatening their very future. Of the stocks for which a scientific assessment is available, 60% of north Atlantic stocks and 40% of Mediterranean stocks are currently outside safe biological limits. Continuous over-fishing has resulted in less productive fisheries and a gradual loss of jobs and livelihoods. Words such as overfishing, discarding, habitat destruction, unemployment and subsidy dependence characterise EU fisheries. However, we have a unique opportunity, with the reform of the common fisheries policy, to rectify some of those failures.
At the heart of the motion is the demand that CFP reforms should adopt greater regional ecosystem-based management, but if such management is to succeed, it must recognise and respect the commercial interests of fishing communities. Ecological sustainability must go hand in hand with economic sustainability. The New Economics Foundation recently published a report that concluded that more than €3 billion is lost every year due to over-fishing. That money could support an extra 100,000 jobs in the industry. When fish stocks are mismanaged, fishers, their communities and the whole economy suffer.
Some people misinterpret ecosystem-management as putting the benefit of fish before that of fishers, but without sustainable fish stocks there is no fishing industry. The history of our coastal areas sadly bears witness to that, as fishing communities from Stonehaven to Newcastle and from Grimsby to Cornwall have declined over the past century and a half. It is always comfortable for Members of Parliament to support small fishing communities, particularly those in their constituency, but we should also have the courage to point out that the demise of fishing communities is the result of their parents and grandparents’ over-fishing.
The ecosystem-based approach is fundamental to sustainable environmental management. It establishes a strategy for the management and sustainable use of natural resources by considering them in the context of their role in the entire ecosystem. The current CFP and the EU marine strategy framework directive already commit the EU in principle to that approach. Indeed, the CFP was significantly reformed in 2002 with a view to implementing the principles of ecosystem-based management. The tragedy is that that has not been reflected in practice. True ecosystem-based fisheries management would require systemic reform through the introduction of a regionalised management framework. A regionalised management system within Europe would divide EU fisheries into management regions according to ecosystems rather than nations. Unfortunately, fish do not carry passports and do not know when they are travelling from one nation’s waters into another’s, so we must look at ecosystems and not simply national boundaries.
Mr MacNeil
When the hon. Gentleman talks about ecosystems, is he talking about migratory stocks, non-migratory stocks or straddling stocks? What sorts of stocks does he mean?
Barry Gardiner
Let me give the hon. Gentleman a good example: the Baltic ecosystem and the surrounding countries engaged in its regional management structure. He will know that in recent years east Baltic cod had gone into sharp decline. As a result of the regionally based management structure in the Baltic, those countries agreed, on the advice of the regional fisheries management organisation, to halt the catching of east Baltic cod. After putting that moratorium in place, they then allowed an increase each year of only 15%, which was actually below the fishing maximum sustainable yield; if they had had FMSY the biomass of the stock would actually have recovered less quickly. They put that moratorium in place on a regional basis and in accordance with the ecosystem, and those stocks have now recovered to a level that has far surpassed what they were and what they would have been had those countries opted for FMSY: the stocks have actually achieved biomass MSY.
Mr MacNeil
I am grateful to the hon. Gentleman for giving way again and allowing the debate to continue. Does he not see that one stock’s ecosystem is not the same as another’s? When he moved to ecosystem management he would start to have a geographical impact and to impose geographical limits on that, and very quickly he would go down the slippery slope with the common fisheries policy, which at the moment is an utter mess.
Madam Deputy Speaker (Dawn Primarolo)
Order. Would the hon. Gentleman ensure that he faces the Chair when replying to that intervention? I could not catch everything he said when he responded to the previous one.
Barry Gardiner
Yes, Madam Deputy Speaker.
Of course ecosystems interact with each other, and in so far as the hon. Gentleman makes that point it is absolutely unexceptional. None the less, scientists and fishermen look at those ecosystems. Of course there are migratory stocks, straddling stocks, nurseries where fish spawn and spawning grounds that need to be protected, but the point is to look at this as part of the ecosystem and not simply to divide it up into national countries’ interests. We need a regionalised framework based around significant ecosystems so that we can manage those stocks more effectively.
At present, even detailed technical decisions are taken centrally in Europe. The Lisbon treaty provides that the EU has exclusive competence under the CFP. However, the Environment, Food and Rural Affairs Committee report makes an interesting case for a lawful way of qualifying the EU’s exclusive competence over the conservation of marine resources, thereby creating a framework for genuine regionalisation. It argues that exclusive competence does not apply where the CFP does not apply. Therefore, if the CFP regulations were amended to exclude certain marine conservation policies, the scope of the exclusive competence would be limited to the amended CFP.
The establishment of regional advisory councils is cited as a key success of the 2002 CFP reform because they have served as forums for stakeholders to inform policy implementation at a regional level. The trouble is that they have no decision-making powers. Although the draft basic regulation that sets out the main rules for the CFP would address centralised decision making through a combination of multi-annual plans and regionalisation of decision making, I think that a fully regionalised management system should include the following features: quotas allocated on the basis of ecosystem regions in order to manage fishing pressures according to the necessities of those different ecosystems; regular scientific assessment of all marine species, not just fish stocks, within a given eco-region in order to establish the impact of fishing on the ecosystem as a whole; and quota allocation on the basis of eco-regions with different licences used in different ecosystem regions and with no transfers between those regions.
Certain decision-making powers need to be devolved to regional management bodies in order to tailor the application of central policy objectives for EU fisheries to the specifics of each ecosystem. The main tool for fisheries management is the annual setting of total allowable catches. Currently, the European Commission requests scientific advice for the establishment of fisheries management plans on the basis of sustainability. However, the European Council is under no obligation to adhere to that advice when agreeing total annual quotas for stocks.
The result is that the European Fisheries Council sets total allowable catch limits that are on average 34% higher than scientifically recommended sustainable limits. In the period 1987 to 2011, European Fisheries Ministers set fishing quotas above scientific recommendations in 68% of their decisions. In the case of one hake stock, quotas were set 1,100% higher than scientists advised.
Over-fishing has made the fishing industry economically vulnerable, but over-fishing does not have just economic costs; it has social and environmental ones as well. At the Johannesburg world summit on sustainable development in 2002, the EU committed to achieving MSY—maximum sustainable yield—for all fish stocks by 2015 at the latest, but in 2010 it estimated that 72% of its fisheries remained over-fished, with 20% fished beyond safe biological limits, risking the wholesale collapse of those fisheries.
The zero draft for the forthcoming United Nations sustainable development conference in Rio calls on states to maintain or restore depleted fish stocks to sustainable levels, and further to commit to implementing science-based management plans to rebuild stocks by 2015.
The EU marine strategy framework directive requires that all EU fisheries achieve good environmental status by 2020, including the attainment of sustainable fishing levels for all stocks.
Andrew George
On the primary thesis that the hon. Gentleman seeks to advance, he claims that fishing communities are in decline because of over-fishing, but might it not also be because of inept policy, whereby fishermen have to catch far more fish but most are thrown back dead?
Barry Gardiner
Discards have been widely debated in this Chamber, and I shall try to come on to that issue, but time is limited, so I must press on. I acknowledge the force of the hon. Gentleman’s remarks, however.
MSY is the largest catch that can be sustained over the long term, but there is FMSY and BSMY, fishing maximum sustainable yield and biomass maximum sustainable yield. The argument that I made to the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), who speaks for the Scottish National party, was precisely to that point, because we can go on getting FMSY out of a small stock, but if we want to achieve the largest possible catch we need to build the biomass MSY to ensure that we then get a sustainable yield out of that much larger biomass.
That is why I absolutely urge the Minister to support Commissioner Damanaki in saying that we have to achieve FMSY by 2015, albeit that biomass MSY might not be achieved until sometime after that—I hope as soon as possible, but no later than 2020, as the stocks demand.
Achieving that aim by 2015 will necessitate the following key measures: first, rendering scientific advice binding, thus preventing quotas from exceeding biologically sustainable limits; and, secondly, introducing stock assessments and management plans for all fish and shellfish, including non-commercial species that are currently unmanaged, in order to establish sustainable limits for harvesting. Ensuring that all fish and shellfish are harvested at sustainable levels is an absolute prerequisite of the future profitability and survival of EU fisheries.
But we also need to think about the issue in terms of biomass—something that the Committee’s report does not address. A biomass MSY is the biomass that can support the harvest of that maximum sustainable yield. Achieving MSY as set out in the draft CFP means rebuilding fish populations to a level of biomass maximum sustainable yield in order to support the level of annual catches—and viable fishing communities, their economies and their social needs.
In an effort to limit fishing to sustainable levels, EU regulations under the common fisheries policy prohibit the landing of commercial species above a given annual quota. In practice, however, that often results in the discarding of thousands of tonnes of saleable fish—but just at the point when I am about to answer the question asked by the hon. Member for St Ives (Andrew George), I fear, Madam Deputy Speaker, that you are going to tell me that I have run out of time.
Madam Deputy Speaker (Dawn Primarolo)
Order. Absolutely spot-on. The hon. Gentleman is quite correct.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
I thank my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) for the report and for the way in which she introduced the debate, and I thank the Minister for his support in the past.
I am in a somewhat different situation from other hon. Members in this regard. My hon. Friend the Member for Waveney (Peter Aldous) talked about the cuts in Lowestoft. In Fleetwood, we already have hardly any boats left as over time there has been virtually a complete destruction of the fishing fleet. I remember as a child on holiday in Blackpool, because my father would only take us to Blackpool— [Interruption.] Well, he always used to say that Blackpool has got everything you want—it has got the sand, it has got the sea, and there is always something to do when it rains. On some days, we used to go to Fleetwood to see the fishing boats coming in. For 100 years, that was the core of Fleetwood’s very existence. It has been sad to see, now as its Member of Parliament, the heart almost ripped out of it over the years.
To be fair, that was not just due to the common fisheries policy: it began with the cod war. I thank the hon. Member for Great Grimsby (Austin Mitchell), who is in his place, for giving me an induction lesson in cod war compensation schemes when I first entered the House, as well as teaching me how to deal with fishermen. I thought that dealing with farmers was complex, but dealing with fishermen is certainly so—and, one hopes, rewarding. I have certainly learned a lot.
Every hon. Member has referred to the failure of the CFP. The hon. Member for Brent North (Barry Gardiner) talked about mismanagement of fish stocks by coastal communities, but the mismanagement of this policy has been much worse. Anyone can go to Fleetwood and listen to people’s stories about seeing boat after boat disappear and trying to deal with the quota system, and then the disgrace of the discard system, which has finally come to the fore publicly. The CFP has been an absolute and utter failure that could have resulted in the destruction of the town were it not for the resilience of Mr and Mrs Fleetwood in getting on and doing other things, although they still feel the loss when they see the harbour. I think that we have 27 licensed under-10-metre boats that go out part time. The number of boats that fish full time is probably fewer than the fingers on my hand, and they are usually fishing for shellfish, particularly Dublin Bay prawns. I thank the Minister for ensuring that there were no cuts to the quota for Dublin Bay prawns in the Irish sea in 2012. That was extremely welcome.
Unless there is some chance of bringing home these powers, and therefore some possibility that we might get new Fleetwood people going into fishing, this is, for them, an intellectual debate that they have heard many times before. Perhaps understandably, their distrust of politicians of all persuasions is massive. As the Minister secured the quotas, it would be fantastic if he could come home with some other measures showing that there might be a possibility of British ships and British seamen fishing in British seas. That is what people are after.
We have discussed the worry about regionalisation, which has been mentioned by the National Federation of Fishermen’s Organisations and by the hon. Member for Banff and Buchan (Dr Whiteford), who is not in her seat at the moment. Are we going to end up in a similar situation to that under the cod management plan, with the appearance of regionalisation but still with all the rules set centrally so that all that is left for the region is to try to deal with that while seeing more people go out of business? As a north-west MP, I have to ask what will happen in the north-west if we get proper regionalisation? What will that mean on the ground? Presumably we will still have to deal with the situation in the Irish sea. Perhaps there could be an Irish sea forum between us in the north-west, the devolved Scottish Parliament, the devolved Welsh Assembly, the Isle of Man Government, Northern Ireland and the Republic of Ireland. I am sure that common sense could prevail in terms of what the fishermen of all those countries know and do.
Again, I take issue with the hon. Member for Brent North. Conservation is the sole interest of all the fishermen I have met, because they see it as vital to their future business. They want to do it, but they distrust all the scientific evidence because it has often come from Europe and resulted in scientists telling them to follow the policy of discard and throw back healthy fish that they could have landed. That is what has taken away their belief in any so-called scientific analysis of what is going on.
Barry Gardiner
I do not want to take up time, but does the hon. Gentleman acknowledge that it is the scientists who have been pressing for the discards to be landed so that they can make a proper assessment of the biomass and look at the ecology as a whole?
Eric Ollerenshaw
I do acknowledge that. However, I am trying to explain how a Fleetwood fisherman who now has to fish part time sees a wealth of different evidence and wonders who pulls the strings on the evidence.
I want to introduce another matter—one which I know will delight the Minister. Once he has dealt with the problems of the common fisheries policy, another issue that we face is that of wind farms and wind farm applications in the Irish sea, and the compensation for fisherman resulting from those developments. We have to deal with the Department of Energy and Climate Change on that matter and on new transmission lines, with the Department for Transport on ferry links, and with the Department for Environment, Food and Rural Affairs on the so-called common fisheries policy. This might sound revolutionary, but perhaps we need a Secretary of State for the Seas to bring those issues together so that fishermen can go to one door and find out what is going on.
I do not want to detain the House any longer. As I have said, I feel as though I am in a different position from other Members. To people in Fleetwood and beyond, this is a test case of whether the coalition Government can deliver. They are enthusiastic about much that the Minister has done. I am grateful to him for the extent to which he goes out to meet fishermen. However, this remains a test case of what is possible. People in Fleetwood hope to see the day when one or two more people can at last take up fishing in what they regard as their waters.
Ms Margaret Ritchie (South Down) (SDLP)
I commend the hon. Member for Thirsk and Malton (Miss McIntosh) and the Backbench Business Committee for facilitating this debate. I recently became a member of the Environment, Food and Rural Affairs Committee and I commend it for its report and for the motion.
I pay tribute to the Minister, who visited my constituency some weeks ago. In particular, he visited the fishing port of Kilkeel and saw at first hand the good work that is being undertaken by the fishermen, the fish producers’ organisations and those involved in fish processing. He will also have witnessed and heard about the problems faced by the fishermen and the fish producers’ organisations, such as the cabling in the Irish sea and the potential for wind farms, to which the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw) referred. The fish producers’ organisations are actually working with the Crown Estate to ensure that there is no interference in the fishing effort and that there is a future livelihood for the fishermen of the County Down ports.
Other issues confront the County Down fishermen, such as reduced fishing effort, the closure of the Irish sea at certain times and quota restrictions. Those issues all impact on their livelihood and on the onshore fish processing industries. However, I assure hon. Members that those fishermen and the local fish producers’ organisations possess an indomitable spirit, despite all the problems that they face.
There is a consensus among environmental campaigners, politicians and those who work in our fishing industries that the common fisheries policy is in need of serious and drastic reform. We have an opportunity to make that reform and it is vital that we create a viable, economically productive and sustainable fishing industry in our waters. Nobody disagrees with that, although people’s emphasis may differ. It is clear that the existing Brussels-based regime has severely damaged the industry and has not delivered a sustainable and environmentally sound fisheries market.
At the root of the problems with the common fisheries policy are the single species fishing quotas, which are often rigidly enforced, but are supported by the flimsiest scientific data. It is more than likely that we will find ourselves having the same argument, and probably the same problems, with the concept of the maximum sustainable yield. Fish species do not exist in a vacuum. They inhabit an ecosystem, and surely they should be managed on that basis. We must take into account the fact that most fisheries are mixed, and an approach must be taken of close co-operation with those who work on our waterways and throughout the industry on a daily basis.
It is sometimes suggested or implied that fishermen do not have much regard for sustainability, but of course they do. Nobody has more knowledge of, or as much at stake in, the sustainable management of our waters. Indeed, the Minister was fortunate enough to see that during his recent visit to Kilkeel.
As we have heard, the rigid and inflexible single species quotas that are set on dry land are unresponsive to the requirements of the marine environment and those who earn their living from it. That is most strikingly problematic in the case of Irish sea cod, and I urge the Minister to focus his attention on it. We must seek solutions to the problems that the fishing industry faces with that stock. The current measures rely heavily on the single easily obtainable metric of fish mortality, which has not proved a realistic indicator of overall species levels and mortality. It is essential that the Minister work with the fishing industry, his colleagues in the Northern Ireland Executive and the Irish Government to ensure that we navigate our way out of that problem in the Irish sea.
Many of the problems are said to be related to an over-reliance on particular stock such as cod, but we must realise that the fishing industry partly responds to demand rather than simply creating it. Thankfully, there have been encouraging trends suggesting that consumers and retailers are beginning to respond to sustainability measures, with certified retailers stocking 41% more certified products last year and a corresponding sales increase, according to the Marine Stewardship Council. However, there clearly remains much work to be done to create a broader base of fish species that underpin and drive the market.
I turn to the vexatious issue of discards. Nobody disagrees that we need to reduce and, I suppose, eliminate them, but the question is how we do that. When we do it is also important. A high proportion of discards are what I would call legislative discards—those that are brought about by an inefficient policy regime and inflexible quotas. When the Minister visited Kilkeel, he saw at first hand the progress that the local fish producers’ organisation had made in its attempt to deal with the issue of discards. My constituents have been particularly innovative in trying to address the problem.
Mr MacNeil
I imagine that before there was a common fisheries policy, there were in effect no discards at all. That underlines the hon. Lady’s argument that the problem of discards is a creation of the CFP.
Ms Ritchie
I thank the hon. Gentleman, and I agree that the problems of sustainable yield, discards and the need for regionalisation all derive from the problems presented by the common fisheries policy. All the Members who have spoken have mentioned those problems. Any effective measure must respond to those who fish in our waters, because for a fisherman nothing goes against the grain more than wasting perfectly good fish. We must acknowledge the good work that has already been done.
Andrew George
Although of course I agree with the thrust of the hon. Lady’s argument about quotas and discards, does she accept that it is not possible to distinguish between intended and unintended by-catch?
Ms Ritchie
I suppose I could agree to a certain extent with that assertion. There is no doubt that our fishing industries in Britain and Northern Ireland face many similar problems, one of which is discards. To go back, however, that is one of the problems that is derived directly from the common fisheries policy.
On the need for decentralisation, at a broader level the common fisheries policy needs to be more regionally sensitive. There needs to be more regional input and representation in respect of the reforms and throughout EU fisheries negotiations. We also need meaningful and impactful regionalisation that delivers real change rather than talks about it. At the same time, we should recognise that such regionalisation needs to be enacted in a coherent, not disjointed, manner.
I urge the Minister to work closely with his ministerial counterparts in Dublin and the Northern Ireland Executive to develop an approach that makes the fishing industry economically productive and sustainable across these islands, and one that is operational for us on a north/south basis in Ireland. Measures enacted in the Irish sea have a clear impact on the movement of fish shoals to other areas. Fish do not recognise national identities. We must remember that fish shoals are not static and management of them can be successful only if it is done in a joined-up manner with clear regional input.
In summary and in conclusion, the reform of the common fisheries policy provides the British Government and the Department for Environment, Food and Rural Affairs with an opportunity to work with the EU to provide a framework whereby the fishing industry and the coastal communities that are pivotal to it are safeguarded, and whereby a clear, positive path is provided for the sustainability of the industry, both onshore and offshore. We in Northern Ireland—I represent a constituency that has the two fishing ports of Ardglass and Kilkeel—believe that one of the best approaches is through decentralisation from the common fisheries policy and some degree of control being devolved to the local area.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
I congratulate my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) on securing the debate, and add my tribute to her. I have known her for 30 years since she worked for the European Democratic group in the European Parliament. She has retained her interest, vision and energy in a very big way.
As many hon. Members will be aware, I represent a constituency that has one of the principal fishing ports in the south-west—it is second only to Brixham, which is in the constituency of my hon. Friend the Member for Totnes (Dr Wollaston). The port has been significantly affected by the former and late Prime Minister Edward Heath’s disastrous decision to hand over fishing waters to the Common Market as part of those 1972 negotiations. The arguments at that time were that European fishing waters should not be owned by one country, but be considered as a common European resource. That approach has been far too isolationist and protectionist, and has failed to take fully into account the impact that other parts of the world, and specifically the Antarctic, have on the Atlantic ocean’s fishing grounds.
In just a few days’ time, on 29 March—coincidentally the birthday of the former Conservative Prime Minister, the right hon. John Major—we will commemorate at St Paul’s cathedral the centenary of the deaths of Captain Robert Falcon Scott and his companions on the ice during the ill-fated Terra Nova expedition. Just days earlier, Her Royal Highness the Princess Royal will come to Plymouth, around the corner from where Scott himself lived, to rededicate a memorial that represents courage supported by devotion and crowned by immortality, with fear, death and despair trampled underfoot. That is a very good approach. At the base of the memorial is an inscription from Tennyson’s “Ulysses”:
“To strive, to seek, to find, and not to yield.”
Those are very fine words.
I was delighted that my right hon. Friend the Prime Minister was able to pay a private visit to the Scott memorial when he recently came to Plymouth to meet 3 Commando Brigade. I am very grateful that he has taken such a keen interest in this son of Plymouth.
While until recently Scott was considered by some as a failed British hero who lost a race to the south pole to Amundsen, the Norwegian explorer, he is now recognised by many as the father of maritime and scientific research, and 29 March will be a very proud day for all of us who revere this great British hero. The legacy of his research and that of the British Antarctic Survey, based in Cambridge, shows us very clearly the impact that climate change is having on the world’s seas and fishing stocks.
During a recent visit to the British Antarctic Survey, I learned how it is extracting 800,000 years of ice. Its analysis of the captured air bubbles allows it to estimate the atmospheric composition and the temperature of the planet over those 800,000 years. While for much of this time there has not been much change in the global climate, there has been significant change since industrialisation began some 300 years ago. The BAS explained how plankton—a staple diet for many of our fish and which can be found in the Antarctic—are in much shorter supply and, combined with over-fishing, could have a significant impact on our fishing stocks.
Just last month, my hon. Friend the Minister and I visited Plymouth marine laboratories on the Hoe. Staff there confirmed that climate change is responsible for changes in our fisheries. They noted that European anchovy and sardine—southern, warm-water species—can now be seen in the North and Baltic seas after about 40 years of absence. They believe that the dynamics of the Atlantic’s fishing stocks are strongly affected by the atmospheric conditions of all the seas throughout the world. They confirmed that half of European fishing stocks are in trouble and that there has to be better international co-operation, especially where UK waters overlap with France, Holland and Ireland.
As my hon. Friend the Minister knows, I personally continue to be a strong advocate for bringing the 200-mile UK fishing waters back under UK control, and I would be grateful if he could indicate where this suggestion has got to in his discussions with other European Fisheries Ministers.
Mr MacNeil
The hon. Gentleman need feel no trepidation. It has been acknowledged in common fisheries policy documents that the successful area for a fishery under national control is up to 12 miles. In the event of a possible failure by the Minister to bring back a 200-mile limit as the hon. Gentleman wants, perhaps we should look to extend the 12 miles to 199 miles, thereby leaving the area of the common fisheries policy between 199 miles and 200 miles.
Oliver Colvile
I have total confidence in my hon. Friend to make sure that he negotiates to bring UK fishing waters back under UK control, and I shall carry on reminding him of the need to do so.
In preparing for this debate, I also spoke to Terri Portman who runs Scott Trawlers—coincidentally—which is based in my constituency. She is in the Public Gallery today. She talked to me about some practical measures that the fishing industry is thinking about. She pointed out that since the last time we debated this subject more fisherman have lost their lives. I am reminded of this on a daily basis as I share an office with my hon. Friend the Member for South East Cornwall (Sheryll Murray), who lost her husband just a year ago under very tragic circumstances. Terri argued that our fishermen come under a great deal of pressure and are more inclined to take risks when they find the economic climate so challenging—especially with the rising cost of fuel and the lack of help from banks.
I pay tribute to my hon. Friend the fisheries Minister for all his work in representing my local fishing industry’s views in Europe and for how often he has come down to Plymouth. I would be most grateful if he could tell the House how much discussion his fellow European fisheries Ministers are having on the impact of climate change on our fishing waters and about what work we are doing to ensure that we do not fall behind the United States of America, Canada and Japan, which are researching this matter in a very big way indeed.
Mrs Mary Glindon (North Tyneside) (Lab)
It is an honour to follow the hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile) and to hear about the historical links to modern fishing. I also thank the Backbench Business Committee and the Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), for securing this debate. It is a pleasure to serve under a Chair with so much knowledge of EFRA issues and the huge enthusiasm to match it. It rubs off on all Committee members.
It was extremely useful and informative to take part in the Committee’s visits to Hastings and Denmark, particularly to speak with the fishermen at the heart of the industry. I was truly amazed by their patience, perseverance and resilience in working with the common fisheries policy as it is now. It was a humbling experience to meet those people. My one regret was visiting the fish-gutting factory. As one of the queasiest people on this planet and despite having a heavily perfumed handkerchief, I can smell it in my nostrils to this day.
Mr MacNeil
I hear the hon. Lady’s criticism of the work she had to undertake, but perhaps I could make a suggestion and possibly a criticism. In researching the report, it might have been worth visiting areas and jurisdictions outside the EU perhaps running more successful fisheries policy. Perhaps the Committee could do that if another report is required. It could do some useful work visiting Iceland, the Faroe Islands and Norway, for instance, and produce another report for us next year perhaps.
Mrs Glindon
Discussion of that might fall within the jurisdiction of the Committee at a later date.
I spoke when the House debated the CFP last November. The fish quay at the port of North Shields had a thriving industry when I was a child. Like the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), I, too, have seen the industry diminish slowly over the years, and it is now a shadow of what it once was. In that debate, I raised issues from the point of view of the Northumberland Inshore Fisheries and Conservation Authority. I will now relate those observations to some of the conclusions and recommendations in the Committee’s report.
NIFCA knows, from local experience, that achieving the vision and reform of the CFP has practical limitations, and it is clear that local factors need to be taken into account. The area covered by NIFCA stretches from the Scottish borders down to the Tyne, and is a mixed-fishery area, so achieving maximum sustainable yield by 2015 would be unrealistic. Having a more flexible date would therefore be a great help to our fishing industry. The recommendation in the Committee’s report to adopt the less rigid time scale of 2020 is therefore welcome and supports NIFCA’s view.
NIFCA also feels that achieving maximum sustainable yield would be crucial to determining multi-annual plans, but that the ambitious target date of 2015 could create the danger of unnecessary fishery closures. The emphasis should be on local measures to ensure sustainable and viable fisheries. Some such measures are deployed in our area now.
Like many colleagues in the Chamber today, NIFCA has stressed the need for regionalisation, down to the district level—indeed, as far as IFCAs—to strike the right balance and fully involve stakeholders. The Committee’s identification of a means to interpret the EU’s exclusive competence over certain aspects of fisheries policy—so as to allow member states to act independently to amend the common fisheries policy, albeit without requiring treaty change—gives hope for achieving NIFCA’s vision of regionalisation. DEFRA and the Government should seize on that recommendation and work with other member states to bring it to fruition.
NIFCA is continuing the commitment shown by the former sea fisheries committee to reforming the EU’s policy on discards, but believes that the Government should stress to the Commission both that there must be investment in appropriate infrastructure to enable local fleets to dispose of unwanted catch and that technical advances must also be taken into account. The authority thinks that the Government should play a bigger role in consumer education, to ensure that the extra catch landed can be marketed more effectively, as part of the overall discard reduction strategy. Ultimately, our local fishermen believe that the prospect of a complete end to discards has not been set out in sufficient detail to be viable, and that there needs to be a further debate with the industry on the issue. The recommendation to delay the discard ban until 2020 is therefore justified by those observations.
It is in the Government’s hands to negotiate a fair deal in reforming the common fisheries policy and ensure a sustainable marine environment and a viable future for our fishing communities. To that end, the Government should heed today’s motion and the Committee’s report on the proposals to reform the common fisheries policy.
Richard Drax (South Dorset) (Con)
It is a pleasure to follow the hon. Member for North Tyneside (Mrs Glindon), who sits with me on the Environment, Food and Rural Affairs Committee.
As I think most of the House knows, I have a healthy disregard for anything to do with the EU, and the CFP—which I would describe as a disaster—is no exception. To use “Dad’s Army” lingo, hopefully both the EU as it stands and the CFP are doomed. I entirely concur with my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile). I will not rest until our waters are back under national control and those who want to fish in them are given licences by our country, so that we can control which stocks are taken from our waters. Sadly, however, that is a dream, and I have to deal with reality.
I congratulate the Minister—my good and honourable Friend on the Front Bench—on his valiant and continued efforts to ensure that the CFP is reformed, and reformed it desperately needs to be. He is right that the CFP has failed to maintain healthy fish stocks and deliver a sustainable living for our fishing industry. His demand for genuine reform of what is a broken policy must be supported. Fishing is vital to our coastal communities. I represent the coastal community of South Dorset. Fishermen there are part of our DNA, providing the lifeblood of the coastal settlements, and probably their very origins. Today, like the fish they catch, those fishermen are hopelessly enmeshed—in a net of bureaucracy, struggling against the ever-tightening rules and regulations imposed on them by a distant and unresponsive EU. Designations, quotas, fuel costs, environmental concerns, discard policies, types of tackle to be used—it all adds up to one huge snarl-up, from which they despair of escaping.
Oliver Colvile
Does my hon. Friend agree that as this issue affects the whole of the British isles, including Ireland—as well as the Isle of Man and Scotland, and, of course, the rest of England and Wales—it should therefore be considered by the British-Irish Parliamentary Assembly? I am a member, and I am very willing to take the issue back and encourage the assembly to consider it.
Richard Drax
I thank my hon. Friend for his intervention. I would welcome any means whereby the people of this great United Kingdom could sit down and discuss how we should control our waters—so, yes!
The endless red tape is particularly difficult for fishermen working in the smaller inshore fleet, of whom we have a preponderance in South Dorset. In fact, it is impossible for some of our small fishermen to make a living. The result is a healthy scepticism, and compliance among those with the greatest stake in the process—that is, the fishermen—is perhaps not full as it should be. In constituencies such as mine, we operate small boats, as we have done for generations. Such communities have nurtured, loved and cared for their fishing areas, because to do otherwise would be to destroy their very livelihoods. There is no doubt that there is a high level of distrust between fishermen and those who we in the press used to call the suits.
Sheryll Murray
Does my hon. Friend believe that that is because a lot of the people representing the industry in the past have in fact represented the larger boat owners, and because the small boat owners have always felt that they did not have a voice?
Richard Drax
I entirely concur with my hon. Friend. Let us hope that, through people like us and others, the small fishermen will have a bigger voice in future. It will be important for them to do so.
Among the fishermen I speak to, the environmental lobby—of all kinds and colours—appears to hold sway. That is the perception. I know that my hon. Friend the Minister is aware of that, as I have written to him about this on many occasions. Indeed, he has visited my constituency on more than one occasion, for which we are all grateful. We all know that we should not plunder our seas, but we must go forward working on the basis of fact, not fiction. I am encouraged that the motion mentions the need for
“more scientific research to underpin decision-making”.
Hurrah! I welcome that.
Richard Drax
I am not allowed to; I have given way twice. I hope that my hon. Friend will forgive me if I struggle on, although I can assure him that I am not going to go on for another eight minutes and 44 seconds.
Scientific research is in the interests of all fishermen, whether from the warm Mediterranean or the icy sub-Arctic. If we do not protect our fisheries now, we will not have a fishing industry. That is a fact. Much attention has been paid to the campaign to end the practice of fish discards, in which perfectly good but dead fish are thrown back into the sea in order to meet arbitrary quotas. The rules are endlessly bent, however, because the targets are so unrealistic. I applaud the Minister’s efforts to tackle that problem on a local basis.
I acknowledge, just for once, that the European Commission has recognised the failure of the CFP and set out a series of proposals. However, the Select Committee has pointed out that the Commission is embarking on the journey without a clear plan—nothing new there! I know that the Minister has already fought off proposals that would have damaged our national interests, and I am confident, as are my fishermen, that he will continue to do that. I am also confident that our fishermen respect his work, and it is a tough job to gain the respect of fishermen, but the Minister is operating with his hands tied behind his back. Once again, our national interests are threatened by those of a much bigger entity, which purports to act for us but fails to do so. None of this comes as any surprise to those of us who are familiar with the workings of the European project.
The motion invites us to call on the Government
“to use the current round of Common Fisheries Policy reform to argue for a reduction in micro-management from Brussels”,
and, of course, I agree with that. It must be no secret by now that I would like the Government to extend that goal far, far beyond fishing. I know that the Minister will pass on that message to all the relevant people. I urge him to continue to stand up for our downtrodden fishermen around the country and, of course, those in South Dorset in particular.
Martin Vickers (Cleethorpes) (Con)
I shall not detain the House for long, as the hon. Member for Great Grimsby (Austin Mitchell) speaks for the same fishing community as I do. His constituency takes in about 90% of Grimsby docks, and I am left with the 10% that is now called Grimsby fish dock east. I want to make a few general points but focus, as did my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw), on the impact on the livelihoods of fishing communities. When my hon. Friend spoke about his childhood visits to Blackpool and Fleetwood, it brought back my memories of my childhood, as both my father and my grandfather worked on Grimsby docks, and I can recall visits to famous trawlers such as the Northern Sceptre, the Northern Jewel, the Northern Sun and the famous consolidated fisheries boats that bore the names of Arsenal, Aston Villa and other football teams—most famous of all, of course, the Grimsby Town.
I shall make a couple of comments. The first thing that struck me when I read the Select Committee report was the part of the executive summary that stated:
“They are embarking down a path of reform without a clear plan”.
Well, I am not sure that the EU has ever had a clear plan for anything, but it has still embarked along that road.
On the main issue of the impact on communities, an interesting parallel can be drawn. I was part of the all-party delegation that visited Cairo and Gaza last weekend. Without venturing into broader debates about that part of the world, let me say that one of the most interesting visits we made was at dawn last Monday morning when we went down to the Gaza fish market. We had an opportunity to speak to the fish salesmen and, more notably, the fishermen.
Sheryll Murray
Did my hon. Friend see any similarity between the small boats working out of Cleethorpes and Grimsby and the vessels he saw in Gaza, or were they more like the vessels we see displaced through the European third-country agreement such as the artisanal-type open canoe or open-boat vessels that are described as pirogues?
Martin Vickers
My hon. Friend raises an interesting point. There was a great similarity between the boats of the communities. Their boats were similar to the ones that sail out of Grimsby nowadays, which are unlike the deep-sea trawlers of 20 or 30 years ago.
I was accompanied on the Gaza visit by the hon. Member for Birmingham, Northfield (Richard Burden) and my hon. Friend the Member for Kettering (Mr Hollobone). Sadly, the former fisheries Minister, the right hon. Member for Exeter (Mr Bradshaw) had to leave a day early, so he missed this part of it. What we heard from the fishermen there was the sad tale of their inability to earn a living. There was a further similarity inasmuch as if they venture out beyond the 3-mile limit, they find themselves entering Israeli waters. Needless to say, they receive some hostile treatment. The point is that they cannot venture the normal fishing grounds because of what they see as the intervention of a foreign power. Whether we like it or not, the fishing community I represent regards the EU as a foreign power.
Neil Parish
Does my hon. Friend know whether the Israelis have fish quotas? Are there any restrictions on the amount of fish that can be caught from the seas off Israel? How do the Israelis manage their stock? I know that it is not a vast amount of water, but how is it managed?
Martin Vickers
If I attempted to reply to that, Madam Deputy Speaker, I would be entering into very deep waters! I have not brushed up on my knowledge of the Israeli fishing fleet over the last two or three days, so I will leave my reply for another occasion.
As has been said many times, what we want is the repatriation of powers. Whether it be in Gaza or in Grimsby and Cleethorpes, there is a deep sense of grievance about the restrictions. The report states that
“a more effective system of European fisheries governance could be achieved if high-level objectives only are set centrally by the European institutions”.
As has been pointed out by many other speakers, that would mean leaving the day-to-day management of stocks at regional and local levels, which would be a welcome development.
I am being urged to speak slowly in order to take up the time, but I know that at least one other Member wishes to speak, so I shall make only one more point. We must recognise that we are dealing with communities, and with the livelihoods of people in those communities.
Oliver Colvile
Some European Union countries have a say on the common fisheries policy, but have absolutely no coastline. I am thinking particularly of Hungary and Czechoslovakia.
Martin Vickers
That is a very good point. It stands to reason that those who are involved in the fishing industry and who know how to manage stocks should manage those stocks.
It is interesting to note that all three Members whose constituencies are bounded by the River Humber—the hon. Member for Great Grimsby, my hon. Friend the Member for Brigg and Goole (Andrew Percy), and me—oppose our membership of the EU. The Grimsby-Cleethorpes community has never really recovered from the decline of the fishing industry, which was sacrificed in the original negotiations for entry to what was then the Common Market. The scars run very deep, and I would be failing in my duty if I did not represent those feelings in the House.
Richard Drax
Is not the use of the expression “common resource” disingenuous and misleading? I do not see how the fish in our waters can possibly be a common resource for others to tuck into whenever they want.
Sheryll Murray
In 1976, in response to Iceland’s declaration of a 200-mile limit, other member states did the same, but exclusive competence was handed over to the European Community. That is the origin of the concept of common resource and equal access to that common resource, which is enshrined in article 2 of the current proposal.
Martin Vickers
My hon. Friend has made her point very concisely. I could not have put it better myself.
Let me emphasise again that this is about communities and their livelihoods. Whether in Cairo or Cleethorpes, Gaza or Grimsby, the livelihoods of those local communities is what matters. I do not envy the Minister his role in the Brussels negotiations, but I know that he will perform his duties very well, and that he will go armed with statistics from his officials. Above all, I urge him to consider the livelihoods of the communities that we in the House represent. They have been let down badly by the common fisheries policy, and they urgently need change.
Neil Parish (Tiverton and Honiton) (Con)
It is a great pleasure to be called to speak in this debate on fisheries and the common fisheries policy. I thank my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) for securing it and for chairing the Environment, Food and Rural Affairs Committee. We have heard from several Committee members, including my hon. Friends the Members for South Dorset (Richard Drax) and for Hastings and Rye (Amber Rudd), as well as the hon. Member for North Tyneside (Mrs Glindon)—I was going to say “North Teesside”, but I know that it is somewhere up north—who has great expertise in this topic.
May I also pay tribute to my great friend, my hon. Friend the Member for South East Cornwall (Sheryll Murray)? She has huge knowledge of fishing and the fishing industry—indeed, her knowledge of those areas is probably second to none in this House. She endured a terrible tragedy last year, and all our hearts go out to her. In the circumstances, it is very brave of her to speak about fishing issues as she does.
I also wish to join many other Members in commending the Minister on the very good job he has done battling away in Brussels. We certainly do need to battle away. It is difficult enough trying to manage and organise fishing policy for the seas off the coasts of Cornwall, Devon and the north of England—and even Scotland, if I may dare say so—from here in Westminster.
Sheryll Murray
Does my hon. Friend agree that the situation we are in now is similar to what happened a decade ago? We heard similar promises then, but the end result was not what we anticipated. We should bear that in mind when we send the Minister to Brussels to negotiate.
Neil Parish
We have, of course, a new Minister and a new—coalition—Government, and I have every faith in both this Minister and this Government to deliver what we want.
It is essential that we fight our corner. The European Commission offers great gifts of devolving powers. It offers the tools to achieve that, but when we look into the toolbox we find that it contains very few tools. In the end, the instinct of Brussels is not to give powers away but to grab powers. It has done that for decades. That is why the CFP is in such a mess. I agree with my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) that we should not have just six-mile and 12-mile limits, but should extend that and have a 200-mile limit.
Let us consider what the Norwegians can do. If an area of the Norwegian sea is being over-fished they can shut it down within hours. In the European Union, however, it would take months—if an agreement is ever, in fact, reached. In the EU we have Austria, the Czech Republic and Slovakia all arguing about fishing. They have a few lakes, but they have no coast. The European Commission plays that situation, of course.
Oliver Colvile
Does my hon. Friend agree that such countries can use their CFP votes as leverage to negotiate on other matters that have nothing whatever to do with fisheries? That is wrong.
Neil Parish
My hon. Friend is absolutely right. Austria receives probably the largest amount of rural development money of any EU country. I suspect it has traded many times with the Commission to achieve that situation, by agreeing to go along with what the Commission wants on fishing. We must sort that out.
Not only should we manage our waters in a way that enables us to act quickly from a conservation point of view, but we also need the fishermen to sign up to the regulations. The CFP is a little like communism: there is a lovely warm feeling that we are all going to work together for the greater good, but in reality nobody does that. Our fishermen try to conserve fish by doing all the right things such as reducing the size of their nets and reducing the number of discards, but then they are terrified that the Spanish or others will come in and hoover up the fish whose stocks they have conserved through their actions. That highlights a key problem with the CFP.
Richard Drax
Does my hon. Friend think the Europeans would care one jot if local fishermen such as mine in Dorset disappeared entirely?
Neil Parish
No, I do not think they would. They offer great platitudes to those who go out of fishing, but all they are interested in is having a centralised policy whereby the total amount of fish caught within the EU meets their targets. They are not actually worried how many fishermen there are to do the fishing, even though they will tell people otherwise. This, again, comes back to the problem of managing things from Brussels, so we have to deal with the principles of the CFP.
I suspect that the Minister may well not be able to come back with a 200-mile limit yet, but we have great confidence that over a period of years he will achieve that. I say that because of what we are doing now with this limited resource: we are throwing it into the sea, dead. A lot of those fish actually putrefy on the sea bed. Local fishermen tell me that a lot of sea lice attack the dead fish and that when they catch fresh fish that are alive they often bring up in their nets some of those dead fish, which contaminate the healthy fish. Is this situation logical? Is it right? No, it is absolutely wrong.
Sheryll Murray
Does my hon. Friend agree that rotten fish on the sea bed not only contaminate the catch, but prevent other fish from coming into these areas to swim? This is like having a graveyard on the bed of the sea, and we would not go into a room full of dead bodies, would we?
Neil Parish
We would hope that we would not. As my hon. Friend says, the last thing we would want to do would be to go into a room full of dead bodies. She summed up the situation well, because all those dead fish are being put back into the sea and they are contaminating the other fish that we catch. The dead fish are a health hazard and that needs to be dealt with. We talk a lot about sustainability, but we need to talk about how we manage that particular side of things.
I have spoken directly to the Minister about the particular concerns of a fishing company in my constituency. It has a lot of vessels, it fishes around the whole of the United Kingdom and it has 140 tonnes of cod quota, but of course it is allowed to fish only 35 tonnes of that. This is a mixed fishery; we have been talking about whether fish understand what flags they have on them, but they certainly do not understand that they should conveniently swim along species by species, so that one fisherman can catch cod, another can catch hake and so on. That does not happen, so all those healthy cod are being caught, and because the fishermen do not have the necessary quota, they are then discarding this excellent fish, which people in this country love to eat. The fishermen have every right to go out to sea because they have quota for other species and they are not fishing directly for cod. We have to find some flexibility and a way of ensuring that the fish that are caught are landed.
Another argument is that if we are to know what is being caught in the sea, and what the stocks are, we have to land much more of a given fish to be able to analyse exactly what is being caught and what those stocks are.
Oliver Colvile
The other point I made was that we are finding that anchovies and sardines are coming into our waters now. How easy will it be for the fishing industry to adapt to catching that sort of fish, which have not traditionally been found around the British isles?
Neil Parish
It might well be difficult for our fishermen to catch some of the types of fish that are now coming into our waters, for the simple reason that the type of nets being used may not catch them. Alternatively, those fish, too, may be caught in the nets being put out in a mixed fishery, so we may have an even greater loss, as I suspect that our fishermen will not have quota for those particular species. So the whole situation gets worse and worse, and we want our fishermen to be able to earn a living. That is why our Minister has such a nightmare to sort out.
The next matter is very difficult to deal with, because fishermen and the fishing industry have made big investments in quota and are keen to see it maintained, but our 10-metre fleet and the under 10-metre fleet want to catch more fish sustainably, which has a huge impact on our coastal communities. Even that is complicated, because of the super 10-metre fleet, which has large engines and can catch as much fish as the large boats. It all becomes very complicated—and that is why we have such a marvellous Minister to sort it out.
Sheryll Murray
Not only do some of those 10-metre boats have large engines, but some tow two nets at the same time. I have heard that they are now considering towing three nets, so they are fishing at the same intensity as some of the larger vessels with which we are all familiar.
Neil Parish
My hon. Friend is right, because fishing boats’ engines, the type of satellite, the equipment used for navigation and to see exactly where the fish are, and all the other equipment on those boats, are getting so much more sophisticated that it is almost impossible for the fish to escape. It is not a case of putting one’s finger up and seeing which way the wind is blowing: the fish can be found. We need to find the balance in how we share a limited resource. We must get rid of the discards one way or another, and we need to ensure that fish are shared out between the different fishermen in our waters. We need to manage our waters not just in the six and 12-mile limits but out to the 200-mile limit.
As has been mentioned, what has happened has been a travesty of justice. When we joined the Common Market in 1973 we presented a low figure for the number of fish we caught, whereas other countries, especially France, Belgium and others, inflated their figures. We have suffered from that ever since, and it needs to be put right.
I want to raise one last point, and that is the problem of the slipper skippers—people who, year after year, do not have the boats to catch their fish and are leasing out their quota. I feel that the Minister should impose a siphon—perhaps 10% or 20%—every time they lease out their quota, so that over five or 10 years they will lose their quota. That quota could then go to the smaller fleets and the under 10-metre boats. That would send out the message that when someone is sitting on a sofa and not fishing, it is not right for them to hold quota.
Fiona O'Donnell (East Lothian) (Lab)
It is a pleasure to follow the hon. Member for Tiverton and Honiton (Neil Parish). Let me begin by apologising to you, Madam Deputy Speaker, to the House and especially to the Chair of the Select Committee, the hon. Member for Thirsk and Malton (Miss McIntosh). I am sincerely sorry that I was not in my place when she rose to speak. My mother always said that saying sorry is good for the soul—and, for the benefit of Hansard, that is soul spelled S O U L. If the rest of the hon. Lady’s speech was as informed and clear as the comments I heard, I certainly look forward to reading the transcript in Hansard.
We have had a very good natured debate today and the Minister will be pleased to hear that I am not going to spoil it. I think we have even had some humour. My hon. Friend the Member for North Tyneside (Mrs Glindon) spoke about how squeamish she felt on her visit to the fish gut processing plant. I have no problem with the smell of fish, but when I returned from Plymouth I found some days later that I had left a handkerchief that I had used to wipe my hands in my jacket pocket and the jacket had been near to a radiator, so I may have to revisit the question of whether I have an aversion to the smell of fish at some point in the future. I have also been informed by my hon. Friend the Member for Brent North (Barry Gardiner) that Hansard has been in touch to clarify whether he said “sub-sea” or “subsidy”, so there we are. It has been an afternoon with some serious, thoughtful and well-informed contributions.
I say to the hon. Member for Waveney (Peter Aldous) that no one in the debate should apologise for being parochial or speaking up for their own communities. If there is one thing I have learned in my short time in this shadow role, as I have travelled from the Western Isles of Scotland to Fraserburgh and Peterhead all the way down to Plymouth, it is that there are very distinctive concerns, issues and voices when it comes to fishermen—and at times, they are in direct competition. I know that we should always want to be in government, but I feel that we are placing a lot of pressure on the Minister today and we wish him well in the forthcoming negotiations.
As I have said, I want to be constructive in my remarks. Labour supports reform of the common fisheries policy and the time has come for a radical rethink. In government, Labour Ministers fought for fisheries reform in Europe and I say to the hon. Member for South East Cornwall (Sheryll Murray), who asked about our record in government, that the common fisheries policy has failed everyone under every Government. I pay tribute to one of my predecessors, my hon. Friend the Member for Ogmore (Huw Irranca-Davies), who encouraged the under-10-metre fleets to come together in one association so that they would have a voice that could be heard at the heart of Government and so that there would be a stronger profile for their members’ needs.
Sheryll Murray
I accept what the hon. Lady says, but Europe did not force the previous Government to introduce fixed quota allocations. Until 1998, the quota to which each vessel was entitled was based on a rolling track record of the previous three years. It was not until 1 January 1999 that her predecessors, when they were Ministers, agreed to fix the track record for the period between 1993 and 1996.
Fiona O'Donnell
I think that if the hon. Lady speaks to the under-10-metre fishermen now she will find that they do not necessarily feel that the situation is getting any better under this Government. We should all have the humility to admit that when we leave government we often leave thinking that more could have been done. I expect that Government Members will have that feeling sooner than they think.
I look forward to hearing from the Minister how the EU negotiations are progressing. First, I want to examine some of the Environment, Food and Rural Affairs Committee’s key recommendations. I congratulate the hon. Member for Thirsk and Malton on her work and that of her Committee and on making sure that we have been able to debate this important issue in the House. I will then go on to outline Labour’s main priorities for reform.
As many Members have said, the genuine decentralisation of powers from Brussels towards a system of regionalised management will be key to the success of the reforms. Labour supports greater regionalisation. We think it is important that countries should work together in regional groups to ensure that fisheries are managed more sustainably. It would be helpful if the Minister could tell the House which European member states he is working with to ensure that meaningful regionalisation is delivered. Who are our allies on this issue and what progress is he making? Will he also update us on any discussions he has had about regionalisation with the devolved Administrations?
In the run-up to the EU’s draft proposals published last summer, Commissioner Damanaki spoke of her desire to overhaul the CFP to get away from the micro-management of Brussels and install a bottom-up approach. Concerns have been expressed, however, that the Commission’s proposals are falling short of the mark. The commissioner insists that that is not due to a lack of political will but is the result of the limitations of the Lisbon treaty to devolve powers and says that she has gone as far as she can go. The Committee has put forward an alternative legal framework and asked the Minister to explore that option. That issue was also raised by the hon. Member for Banff and Buchan (Dr Whiteford).
Last year, in a Back-Bench debate on the reform of the CFP in the House, the Minister said that
“currently the proposals lack crucial detail on how regionalisation will work.”—[Official Report, 15 November 2011; Vol. 535, c. 741.]
What discussions has the Minister had with the commissioner on the regionalisation of powers to member states, and has he sought any legal advice on the devolution of powers from Brussels to regional advisory councils?
The Committee gave considerable thought to the implications of introducing maximum sustainable yield deadlines by 2015 and concluded that a target of 2020 is more appropriate. I think that it has benefited the House to have on the record a more reasoned explanation of the targets the Committee recommended than those we have seen in the media lately. With 75% of European stocks now exploited beyond safe levels, compared with 25% for stocks worldwide, it is clear that we need to take urgent action now. MSY has already been achieved for some stocks, but Europe is lagging behind. Labour believes that achieving MSY by 2015 should still be the goal. Does the Minister share that view? The Government must play their part in ensuring that we move towards that goal in line with our international commitments. Will he update the House on what progress is being made to achieve MSY for all commercial UK stocks by 2015?
There has been much to say on discards, which is something the public certainly care deeply about. Members from both sides of the House agree that Europe must get to grips with the problem, because throwing perfectly good fish back into the sea is utterly unacceptable. Labour is clear that we need a specific timeline. I am concerned by reports in The Guardian today that a group of member states, led by France and Spain, are attempting to pass a declaration that includes a clause dismissing the ban as unrealistic and too prescriptive, which could effectively lead to the indefinite continuation of discards. That is simply unacceptable. What discussions has the Minister had with France and Germany on that, and will he reaffirm his commitment to ending discards? Furthermore, will he tell us when and how that should be achieved? We are not asking much of him. The industry, north and south of the border, has demonstrated that using more selective fishing methods is part of the solution. Catch quota trials and Project 50% have been very successful in reducing discards. Does he agree that the scheme should be expanded in the period leading up to a ban on discards?
I would like to set out Labour’s main priorities for reform of the CFP. Overcapacity has led to the destruction of Europe’s fish stocks. The problem is simple: we are over-fishing our seas. I think that the most remarkable comment we heard today was from the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), who harked back to a time when there were no quotas or discards and people simply went out and fished. The reality is that technology has moved on and countries can now fish in areas far from home. The idea that we could pull out of a common framework for managing our fisheries is simply unrealistic. The European fleet has grown too large and is catching too many fish. The current system favours the short-term interests of large-scale, often unsustainable, industrial operators. That has led to the lion’s share of resources and profits becoming concentrated in the hands of a relatively small number of fishing enterprises in Europe.
Dr Whiteford
Does the hon. Lady agree that the Scottish fleet, which has halved in size in the past 10 years, should not have to pay again for the overall European reduction in fleet sizes that is required and that the people who have done more than anyone else to promote sustainability and change the way they work should get the credit for what they have achieved?
Fiona O'Donnell
I think that Members everywhere in the Chamber, apart from where the hon. Lady sits, have the interest of the whole UK fishing industry at heart; that is certainly the case for me. What is certain, however, is that if Scotland became an independent nation, our fishermen would face a very uncertain future.
We have not heard much mention of fishing in external waters. One Member raised the issue, but I certainly do not want to disappoint her by returning to it today.
I congratulate the hon. Member for South East Cornwall on the Westminster Hall debate that she secured and for exposing the actions of trawlers in the waters off Mauritania. European waters have been over-fished, and now we are shipping our problems overseas. The EU fleet takes 25% of its annual catch from outside European waters, and EU taxpayers are subsidising the expansion of some of the biggest and most powerful trawlers in Europe into the waters off the western coast of Africa.
Neither EU member states nor fragile coastal fishing communities in western Africa can afford the reform of the CFP to become a missed opportunity. Reform is a real chance for change in Europe, and it could tackle over-fishing by EU fleets in external waters, so will the Minister update the House on his discussions with other member states about the exploitation of fish stocks in external waters?
Secondly, on the inshore fleet, Labour wants a reformed CFP that rewards those who fish more sustainably and selectively and with less impact on the environment. The UK’s inshore fleet represents more than three quarters of the entire UK fleet and employs 65% of its work force, yet it receives just 4% of the quota allocated to the UK under the CFP.
Labour believes that that imbalance must be addressed, and we want a fairer distribution of quota among the fleet. The draft CFP regulations contain a proposal whereby member states may withhold up to 5% of their national quota to encourage and reward operators that reduce discards and improve environmental performance. Labour thinks that should be increased to 20% to reward fishermen, including small-scale fishermen, who operate in a more environmentally sustainable way and who contribute positively to coastal communities.
Fisheries are a Government-held public resource, so we think it right that Government decide who should be able to access them, but, as the hon. Member for Thirsk and Malton has pointed out, astonishingly the Government do not even know who owns the quota that they hand out. We want to see an entirely transparent register of quotas, and I join the hon. Lady in asking the Minister to update the House on progress in that area.
The New Under Ten Fishermens Association, NUTFA, the organisation that represents the domestic under-10-metre fleet, is calling for root-and-branch reform to create an inshore fleet that is fit for purpose. The Minister has responded with six community quota group pilots, so will he update the House on their progress and on the response to them from the under-10s? May I suggest to him that a crucial part of reform could be the creation of an inshore producer organisation? I have heard the proposal when meeting fishermen from the under-10-metre fleet. Is the Minister willing to consider it?
The rules that govern our fisheries are broken. Ahead of Rio+20, where food security and our oceans will be high on the agenda, it is vital that we put our own house in order. It is not too late to turn the tide. Now is the time for the Government to show renewed determination and leadership, and to pursue truly ambitious reform.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
I thank my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) for securing this important debate in the House, and I commend the excellent report that her Committee has produced. This debate has benefited from some very interesting interventions and speeches by hon. Members on both sides of the House, and I hope to refer to as many of them as possible.
My hon. Friend launched the debate with real knowledge and enthusiasm. Her enthusiasm for and interest in the subject are apparent from how she speaks about it, and they are very welcome. I enjoyed taking part in one of her Committee’s sittings on this subject, and I was impressed by the level of knowledge and interest across the Committee.
In answer to the hon. Member for East Lothian (Fiona O’Donnell) and others, I am happy to report on how we are progressing with our discussions in the European Union. On Monday I am going to Brussels, where I will be discussing, not least, regionalisation, as well as the external dimension, on which we are making some progress, although it has not yet got to where I want it to be. I entirely share the position taken by the hon. Lady and my hon. Friend the Member for South East Cornwall (Sheryll Murray) in abhorring the dreadful practices that we have learned about in recent years regarding the external footprint of fishing vessels that are subsidised by our constituents’ taxes so that they can fish unsustainably in the waters of some of the poorest countries in the world. I am looking forward to putting forward a very robust line on that, and I am impressed by the progress that my officials are making on it.
We will also be talking about discards, which I will discuss later. The hon. Member for Banff and Buchan (Dr Whiteford) will be interested to know that we will deal with the thorny issue of mackerel and the perhaps not-very-sustainable activities of the Government of Iceland and the Faroe Islands. The hon. Member for Na h-Eileanan an Iar (Mr MacNeil), who extolled the virtues of the Faroe Islands, might like to reflect on the fact that that country is not behaving at all properly in this matter.
I know as well as anyone how complex the issues are surrounding the whole area of the common fisheries policy and how difficult it is to unpick the diverse and interlinked problems that we face in reforming this failed policy. The Committee’s inquiry gets to the heart of these issues with a remarkable degree of perspicuity, and it has, as I said, delivered a very impressive report. The Committee’s thinking also reflects the stance that we are taking across a range of important priorities for reform of the CFP. It is crucial that we get past the “one size fits all” mindset that has served European fisheries so badly.
My hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) hosted my visit to the wonderful Plymouth marine laboratory, where we saw the impact of climate change. We saw how the fronts that change the temperatures of our seas in different places are moving, and how fish populations are moving. It is clearly ridiculous to have one constraining system for managing our fisheries that goes from the sub-Arctic waters of the north to the waters of the south Mediterranean. We must have a system that is much more fleet of foot, and we can do that only if it is more locally managed. I will come on to talk about how we are going to try to achieve that.
We are facing a critical stage in the negotiations in the coming months, and I will continue to press for radical reform; as I said, I will do that at the Fisheries Council in Brussels next week. In addition to those discussions on reform, we will have further discussions in April, May and June. The European Parliament is also considering the proposals in its committee stages, and we expect a plenary vote there on the whole package by the autumn.
The Committee’s report rightly highlights the importance of regionalisation. We must find ways to allow member states to work together regionally on the detail of fisheries management—in discussion, of course, with stakeholders—and I agree that we can do that within the bounds of the current treaty. Technical and legal constraints should not overshadow our aims in this regard, and that has been our message to others. I hope that I will discover that the issues of competence are as clear as the Committee suggests. We have been exploring with other member states the types of provision that it has identified in order to build support for potential solutions. I can assure my hon. Friend the Member for Thirsk and Malton that members of her Committee are not the only ones with access to legal opinions. In my experience, there are many and varied legal opinions on the subject, and it is important that they should be robust and able to stand up to the rigours of challenge.
The Commission’s proposals reflect that same concept of empowering member states to take some of their own decisions. However, we are concerned that conferring more delegated powers on the Commission, as the proposals have the potential to do, might end up centralising decisions again.
I made an interesting visit to the constituency of the hon. Member for South Down (Ms Ritchie). I quite understand why she is not in her place, because she informed me that she would have to depart. I was shown a net in which an eliminator panel had been put in precisely the right place to allow cod to escape, but the net was deemed illegal by people who manage fisheries about 1,000 miles away from the fishermen who use it. They insisted that the eliminator panel should be further towards the cod end, even though the fishermen knew that by that stage the fish would be too tired to swim up through it. How crazy is that? What lunacy it is to have a system that does not allow the fishery in a particular area to develop the means to do virtuous things such as excluding discards.
I recognise that what I can achieve will probably never be quite what my hon. Friend the Member for South Dorset (Richard Drax), the hon. Member for Great Grimsby (Austin Mitchell) and others would like, but I will do my best to achieve as much as I can.
The genuine regionalisation that the Government and the Select Committee are calling for will need the robust co-operation of member states on shared fisheries for it to be credible and to win support from others. Empowering member states to take some decisions may form part of the process, but it might not solve the whole problem. As many hon. Members have said, many of our fish stocks are shared with other countries and can best be managed on a regional basis. I believe that a properly devolved system, with close co-operation between member states, operating with an ecosystem-based approach, as the hon. Member for Brent North (Barry Gardiner) mentioned, is the right way forward.
The hon. Member for East Lothian asked if we have friends in Europe on this matter. We do. There are many like-minded states that share my sense of exhaustion over and rhetoric on how appalling this system is, and we are working closely with them. It is mainly, but not exclusively, the northern European states that have a like-minded view. I hope that we will find plenty of allies in the coming weeks.
Dr Whiteford
Does the Minister think that the regional advisory council model is appropriate for aquaculture?
Richard Benyon
I am grateful to the hon. Lady for reminding me of the very good point that she made. I share her view entirely that this is an area where the European Union does not need to tread. We have a successful aquaculture industry in the United Kingdom. We are all aware of the agenda here. Some of the more land-locked countries, which are seeking to access some of the European fisheries money, are interested in developing a competence over aquaculture. I assure her that I am robust in trying to exclude that possibility. How successful I will be remains to be seen.
We remain hopeful that the reformed CFP can build in a robust process to regionalise decision making. That will require agreement not only on issues of legal competence, but on practical processes for co-operation on management decisions with other member states which are transparent and enforceable. We will continue to press for that and will build support with the member states that share our fisheries.
The hon. Member for East Lothian asked when I last met the commissioner. It was just a few weeks ago. I meet her regularly and count her as an ally and a friend. I think she needs friends at the moment. I will be robust in giving our support for what she is trying to do. She needs legal advice as well. There are legal opinions coming from all directions on these matters and we are keen to provide her with ours.
I pay tribute to the hon. Member for Aberdeen North (Mr Doran), who made a thoughtful speech. He addressed a serious problem that goes to the heart of the credibility of an industry for which I have the highest regard. We should not minimise in any way the fact that when black fish are sold on the scale that he described, those fish have been stolen from legitimate fishermen. That is a crime of multi-million-pound proportions, and he was both brave and right to state that.
To achieve what we want to, we will require improvements in how we collect data and develop scientific evidence. A number of Members have referred to that. At the moment, the process can often lack robust data or be too narrowly focused on the short term to be credible with fishermen or to help policy makers. A more grown-up relationship is needed between scientists, fishermen and policy makers so that we can gather more effective data on the impact of fishing on the whole marine environment, and build trust. The fisheries science partnership that we have in the UK will help to pave the way to achieving that.
Nearly every Member who spoke referred to discards. I say to the hon. Member for Na h-Eileanan an Iar—[Interruption.] That pronunciation is the best I can do at this stage of the week, I am afraid. I remind him that more than half the tonnage of discarded fish has absolutely nothing to do with the European Union but is because it is made up of species that we do not eat and for which there is no market. There is a supply chain solution to that if we are imaginative. I am not diminishing the blame that must be apportioned to the system of management that creates the remainder of the discards, and we must not stop trying to deal with that, but more than 50% of discards are because there is no market. Great progress is being made on that, not least by DEFRA, through good projects such as Fishing for the Markets.
I am glad that my hon. Friend the Member for Thirsk and Malton mentioned my evidence to the Environment, Food and Rural Affairs Committee, in which I said how wrong it would be if we created a system that transferred a problem over the horizon at sea to one of landfill. Through a discard ban or an elimination of discards, we need to progress a supply chain solution to creating new markets for fish.
Fiona O'Donnell
Does the Minister also support fishermen in identifying markets overseas? For instance, there is not much of an appetite for cuttlefish at home, but there is in other parts of the world.
Richard Benyon
Those who watched Monty Halls’s programme last night will have seen the export of fantastic-quality spider crabs, which we should be eating in this country. We have to develop more eclectic tastes, but that is a debate in itself and I want to press on.
I agree with the Select Committee that we need to get our measures right and proceed carefully in setting targets. However, that has to be done on a fishery-by-fishery basis. I am also mindful that if we equivocate, we could find a thousand reasons why we should not do anything about discards. I believe that the Commission is right, and there should be an absolutely clear determination to move as near to an elimination of discards as we possibly can. That is why we will not sign up to the French declaration next week and why we must go into the next stage of negotiations on discards as robustly as possible to achieve a solution.
The debate on the CFP objectives raises similar challenges in a variety of areas. On the achievement of maximum sustainable yield, for example, I agree that we have to be guided by the best available scientific advice, particularly about complex mixed fisheries, and do so in a credible way. That is why we want clear objectives that are linked to existing commitments and enable us to get the specifics right for each fishery through multi-annual plans. That requires an intelligent approach to getting scientific data and advice. We have some good examples in the UK of partnership working with the industry, and I agree that member states must be more accountable for delivering the data needed to manage fisheries effectively. I appreciate the words of the hon. Member for Brent North about the need to define what we mean by MSY. FMSY is a different target from others, so we must get that right.
The Select Committee is right to sound caution about the Commission’s proposal for transferrable fishing concessions. My hon. Friend the Member for Hastings and Rye (Amber Rudd) raised that matter with passion. Although I recognise the benefits that a market approach can bring, I want our fishing rights to be managed in an economically rational way, by decisions on the allocation of rights being left to member states. If it were run and organised at that level, we could achieve real results. In certain circumstances, groups of fishermen might invest in an increasing biomass and see the attraction of a transferable fishery concession, which would in turn benefit the marine environment. It is important to look at that, but we should do so with caution, as advised by the Committee’s report.
A number of hon. Members asked who owns quota. I do not want to break with the cross-party consensus of the debate, but I suggest that the hon. Member for East Lothian has a bit of a nerve criticising the Government. We must get a grip on this problem. My Department intends to produce a register of who owns quota. To do that, we are working with producer organisations, which hold much of that information. I am constantly told of celebrities and football clubs that are alleged to own quota, but I have never found evidence of it. As the fishing opportunity should sit with vessels, the situation becomes complicated.
Sheryll Murray
As I pointed out, people who have quota must have a vessel, or a dummy vessel that is held in a producer organisation. Quota can transfer between different producer organisations, but it is impossible for somebody to go out and buy fish quota without having a vessel.
Richard Benyon
The argument centres on who owns various companies, which makes things complicated, but my hon. Friend is, as always, absolutely right. The work we are doing to reform domestic management of English fisheries reflects those principles, but a lot has been said today on what we are trying to achieve. She knows more than anybody how important that is, but many hon. Members represent constituencies where there is a small inshore fleet.
A measure that has been raised in the debate—it is essentially independent from our reform measures—is my decision to give an opportunity to others to catch stocks that have been left unutilised for four consecutive years. I hope all hon. Members agree that where valuable fish quotas have been left unfished for four consecutive years, it is reasonable to look to give others the opportunity to catch them, so that we make the best of our national quota.
The Government’s reform measures are a response to our consultation in 2011. Many fishermen were uneasy at the prospect of the rapid introduction of an allocation system based on fixed quota allocations to the under-10 metre fleet. Therefore, we have since explored other ways in which we can give fishermen in that sector more control over their future fishing activity, and are seeking to establish voluntary pilots to set out the benefits and challenges of a more local approach to management.
To align those pilots as closely as practicable with the measures on which we consulted, in particular the proposed foundation quota, we are temporarily taking from producer organisations a percentage of quota allocations if they were increased at the December Council. That will apply only where vessels in the prospective pilots hold a track record of catching the increased quotas. Producer organisations will still benefit from having greater amounts of quota than last year, but they will have slightly less of an increase than they would otherwise have enjoyed.
There have been rumours regarding the suspension of all leasing and swapping by certain POs to the under-10 metre fleet in reaction to those proposals. I would be very disappointed if any PO looks to penalise other fishermen for circumstances that are not within their control and hurt their members financially. Should such attitudes and behaviours take place, it would not bode well for our wish to impart greater management and responsibility for fisheries to those who fish them. DEFRA officials are in close touch with colleagues at the Marine Management Organisation, who are monitoring the position and will be assessing likely impacts on the profitability of our fishing sectors should those rumours develop.
As I have said, I will be discussing the external dimension of the CFP at the Council meeting next week. I believe that the principles of the sustainable use of marine resources must apply in the same way outside EU waters as within. Proposals for agreements with third countries should be strengthened to ensure better value for money; integration on fisheries development projects; clauses on human rights; greater transparency to ensure appropriate spend of money and science to improve sustainability; and improved fisheries governance to ensure that the benefits of the agreements are delivered in reality. I think we are making progress on this, but there is more work to do.
The Committee questioned the links between Government advice on healthy eating and the sustainability of fish stocks. Current Department of Health advice suggests consuming two portions of fish per week, one of which should be oily. This level of consumption can readily be sustained if we manage our stocks effectively.
I fully support the motion. The failures of the CFP cannot be allowed to continue eroding the livelihoods of our fishermen and blighting the marine environment. This is why the current reform process is so important, and why I am committed to making sure we get the right policy during the discussions this year. That means a policy that allows member states to work together regionally to manage their fisheries more effectively, and a policy underpinned by better scientific knowledge of what is happening in our marine ecosystems.
On a point raised by my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw), I am proud to be the UK fisheries Minister. It is important that I represent a noble industry, one that I wish to see revived, but if I restricted my actions to the management of fisheries, in a myopic, silo way, I would be letting down fishermen and all who care about the marine environment. So my hon. Friend is right: we should take a holistic view in our policies on fisheries, our marine policies and the reform of the common fisheries policy.
Miss McIntosh
We have had an excellent debate, summed up brilliantly by my hon. Friend the Minister. I thank everyone for their kind words and warm welcome, both for the motion and the actual report. I wish to draw the Minister’s attention to the fact that he has a suite of opportunities and a menu on which to draw. It is indeed our first call that he should seek to devolve decision making to the regions, but if that attempt were to fail, it would not be the wish of the Select Committee—or indeed the House—to allow the Commission more discretion in taking delegated powers.
The way is open for DEFRA to persuade the Commission to pursue our recommendation or press it to produce a clear road map for regionalisation—or, at the very least, legally binding regional agreements. We cannot proceed with a situation in which we have reliable scientific advice for only 30% of all EU fish stocks—for just 21 out of 60 in the Mediterranean.
The Committee would love to travel to Iceland, as I am sure would others, so perhaps that is a bid that may be looked on favourably. In any case, it gives me great pleasure to ask the House to support the motion.
Question put and agreed to.
Resolved,
That this House considers that the Common Fisheries Policy has failed to conserve fish stocks and failed fishermen and consumers; welcomes the Environment, Food and Rural Affairs Committee’s report, EU proposals for reform of the Common Fisheries Policy; and calls on the Government to use the current round of Common Fisheries Policy reform to argue for a reduction in micro-management from Brussels, greater devolution of fishing policy to Member States, the introduction of greater regional ecosystem-based management and more scientific research to underpin decision-making in order to secure the future of coastal communities and the health of the marine ecosystem.
Legal Aid
(12 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Karl Turner (Kingston upon Hull East) (Lab)
I am pleased to have secured this very important debate on the effect of the reductions in legal aid on legal aid providers. I refer Members to the Register of Members’ Financial Interests, as I was a practising lawyer before my election to this House. As a criminal lawyer, I relied on the public purse for much of my income.
The Lord Chancellor offered up 23% cuts without any fight and blindly conceded to the Treasury’s demands without looking at the real impact on justice and legal aid providers. The Government’s own impact assessment states:
“The lack of a robust evidence base means that we are unable to draw conclusions as to whether wider economic and social costs are likely to result from the programme of reform or to estimate their size.”
Diana Johnson (Kingston upon Hull North) (Lab)
I congratulate my hon. Friend on securing this important debate. As a fellow Hull MP, he will know the importance of citizens advice bureaux and community legal advice centres in providing legal help and advice and of the genuine concern out there that people will not have access to good-quality legal advice. I am sure that he shares the concerns of many people in Hull.
Karl Turner
Absolutely. My hon. Friend makes an important point. As I understand it, 97% of funding to the—
Karl Turner
Some 97% of funding to Citizens Advice will go as a result of the Government’s plans, so my hon. Friend makes a valid point.
I am not just talking about the for-profit providers. The non-profit providers also provide important legal advice to people in our constituencies. I want to attempt to bust a myth that the Government are perpetuating. There seems to be the suggestion that publicly funded lawyers are fat cat lawyers earning fat cat salaries. In reality, publicly funded lawyers, whether solicitors or barristers, earn very modest incomes if funded by legal aid. The Lord Chancellor says that he does not want to hit women and children, but he does want to target fat cat lawyers. Why, then, is he making 53% cuts to social welfare legal aid?
Keith Vaz (Leicester East) (Lab)
I declare an interest as a non-practising barrister. I worked for a number of years as a solicitor at a law centre. These cuts will affect some very poorly paid solicitors who work in law centres and who were previously doing work such as immigration before that was taken away. The profession will suffer because we will not be able to attract people and give them the expertise to do this kind of work.
Karl Turner
My right hon. Friend makes a very important point and one that solicitors and barristers have raised with me in recent days. There is certainly concern about attracting people into training contracts and even attracting people to study law as a result of the Government’s plans.
As I understand it, £350 million will be removed from legal aid as a result of the Government’s plans. The vast majority of that will be in social welfare law. In an attempt to bust the myth that publicly funded lawyers are fat cat lawyers, I spoke to some legal aid providers in my area today. I spoke with Keith Lomax, the senior managing partner of Davies Gore Lomax, which is based in Leeds. He represents the most vulnerable clients on such issues as housing, debt, welfare benefits and education, particularly special educational needs, and he told me that the Government’s 10% reduction in fees across the board was difficult for his firm to cope with. I was staggered when he told me that his hourly charging rate was £48.24. He charges the Legal Services Commission £3.78 per letter—hardly fat cat lawyers rates. The people who work for him earn very modest incomes—between £18,000 and £24,000 a year for fully qualified solicitors, he tells me.
Tim Durkin, the managing partner of Myer Wolff solicitors in Hull, runs a long-standing firm reliant on legal aid. Mr Durkin estimates that the cuts to his business in relation to child contact and residence applications will amount to about £300,000 per year. He describes that as simply unsustainable.
Max Gold, from the Max Gold partnership in Hull, reports to me that he has not been in a position to pay himself or his solicitors and staff an increase in salary for some six years. He says
“the Government are not living in the real world to describe legally aided lawyers as fat cats”.
In his view, the Labour Government were far from profligate when it came to legal aid. He says that the previous Government were not particularly generous in relation to publicly funded lawyers. However, he says that the previous Government at least understood the requirement to offer legal advice in areas such as social welfare law. Indeed, he also mentions immigration, which is particularly important, given that the other place almost accepted an amendment—it was defeated by, I think, 19 votes—a couple of days ago.
In 2000, there were 10,000 legal providers. There are now 2,000—a reduction of 8,000 firms in the last 12 years. Many closed their doors in the last 12 months. The impact of the cuts on legal aid providers is clear for anybody to see. Many firms that provide help mainly in family and social welfare law will have to withdraw from the market. The Law Society says
“firms already operate on the margins of viability…specialist firms and advice agencies…providing social welfare law services…are likely to be wiped out with catastrophic consequences for people in need”
of legal help. The Law Society says that it
“does not see how many firms can continue to operate in this environment.”
The current changes could reduce firms offering family law by as much as 60%.
The Government’s impact assessment, which accompanies the Green Paper, estimated a 67% decrease in income for law firms in rural areas and a 59% decrease in urban areas. That is simply unsustainable. It will not be economically viable for those firms to continue offering services on such tight margins. The Legal Action Group believes that legal aid will cease to be viable as a nationwide public service, with an overall decrease in civil legal aid to 900 firms, down from 2,000. My concern is about the potential for advice deserts to emerge as a result of those reductions. The impact on access to justice is therefore clear. If no service is available, our constituents will be left to paddle their own canoe. Some 75,000 children and young people are set to lose legal aid. Some 6,000 children under the age of 18 and 69,000 vulnerable young adults aged 18 to 23 will lose access to legal aid in their own right as a result of the Legal Aid, Sentencing and Punishment of Offenders Bill.
The Government claim that advice will be available elsewhere, from places such as the Free Representation Unit, jobcentres and Age UK. That claim has been disputed by the Advice Services Alliance. The Free Representation Unit represents clients in tribunals, but it does not cover the initial advice stages of, say, a welfare claim. The Child Poverty Action Group has stated:
“Unfortunately we do not have the resources to provide direct advice to people who are claiming benefits”.
Age UK has said:
“Our concern is that while it is true that both Age UK nationally and our partners in local Age UKs and Age Concerns do provide some help and advice with welfare benefits it is most often not at a level comparative to that provided through legal aid.”
The Government’s defence until now has been to talk about the telephone advice service. However, that is not the answer to advice deserts. Face-to-face legal advice is crucial. Fortunately, the Government suffered a defeat on this issue in the other place yesterday evening. I would respectfully urge the Government to take that on board. The Ministry of Justice predicts between only 4,000 and 10,000 additional mediation starts, despite withdrawing legal aid from 255,000 cases. It has simply not made a proper assessment.
The impact on for-profit and non-profit providers will be substantial, but it will be most keenly felt by those who rely on their services. The Government’s own impact assessment states that the proposals
“have the potential to disproportionately affect female clients, BAME clients”—
that is, black and minority ethnic clients—
“and ill or disabled people, when compared with the population as a whole”.
Despite that evidence and advice, the Government seem to want to plough on regardless. At a time when unemployment is rising and pressure is increasing on squeezed families, it is wrong for the Government to withdraw support for legal advice.
Opposing the legal aid cuts is not done due to narrow interest or to ensure that lawyers’ bank balances stay buoyant. It is about ensuring that people have not only these important rights but the means with which to exercise them. The Government must listen to the experts and base their cuts on the evidence. The Justice Select Committee, on which I serve, has said that the full cost implications of the Government’s proposals cannot be predicted. I therefore ask the Government to reconsider these cuts and not to take a gamble with justice.
Many eminent judges—not least Lord Hope, Lord Justice Dyson and Lady Hale—have also voiced their concern, along with academics and professionals, telling the Government time and again that there will be an increase in court administration due to the increased number of litigants in person, but that advice has been completely ignored. The Lord Chief Justice has echoed those concerns.
The opposition to the cuts in social welfare legal aid is, for me, about protecting the vulnerable and allowing access to justice. Of course, we are living in a time of austerity, and this must also be about saving money to the taxpayer, but there are alternatives. The early intervention provided for debt, employment, education, housing and family law matters through a mixture of voluntary and private sector organisations offers value for money. I shall not bore the Minister with the statistics produced by Citizens Advice, but it has provided Members with a helpful report that shows, pound for pound, the advantages of providing early advice. Unfortunately, however, the Tory-led Government have ignored crucial advice from, among others, the Lord Chief Justice, the Bar Council of England and Wales, and the Law Society.
The Lord Chief Justice has stated that the proposed reforms of public funding for civil cases will damage access to justice and lead to a huge increase in people fighting their legal battles alone. It is obvious to anyone that litigants in person will delay court time. The hon. Member for South Swindon (Mr Buckland) is in his place. He sits as a recorder in the Crown Court, and he must know from experience the advantage of having a solicitor advocate or a barrister representing a client in court, as opposed to someone representing themselves.
The chairman of the Bar Council, Michael Todd QC, has told me today that
“legal aid barristers, working across a broad range of practice areas, are public servants, overwhelmingly operating in the public interest. Over a number of years, many members of the Bar and the junior Bar in particular, have found it increasingly difficult to sustain a financially viable career on legal aid work, which poses a grave threat to access to justice. Successive fee cuts and now the threatened removal of whole areas of law from the scope of legal aid means that many vulnerable people will be denied effective access to the Courts. It also means that many highly skilled and publicly spirited Barristers will be forced to leave the profession with a particularly heavy impact on female and BAME practitioners. That cannot be in the public interest”.
The Lord Chancellor needs urgently to take on board the defeats that the Government have suffered in the other place, and to look again at the real impact of these legal aid cuts before overturning those amendments in this place.
The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
I declare any interest I may have as a non-practising solicitor. First, let me congratulate the hon. Member for Kingston upon Hull East (Karl Turner) on securing this debate. I recognise that this is a timely and important discussion to have at present.
Let me start by saying that measuring and understanding the effects of the Legal Aid, Sentencing and Punishment of Offenders Bill on the providers of publicly funded legal aid services is something to which the Department of Justice has been committed throughout the policy development process. I invite hon. Members to consider both the impact assessments and the equality impact assessments published alongside the Government’s consultation paper and our response to that consultation. These are extensive in their consideration of the impact of the reforms on legal aid providers, with the equality impact assessment providing very granular detail on the potential for differential impacts in respect of different provider types—whether for solicitors, not-for-profit organisations or barristers.
We recognise that such assessments have their limitations. They use a method analysts refer to as counter-factual assessment. This operates by taking a given set of assumptions—in this instance, a snapshot of income in the legal aid market in a given financial year—and applies a narrow set of changes to this snapshot, which here means the reduction in income implied by the changes in the Bill. What the assessment cannot do is measure things like how providers will respond to those changes in terms of the structure of their firms, the business model they employ, their employment profile or the areas of law covered by their organisations. This is a crucial point for me in this debate. In other words, one cannot say with any real certainty how individual providers will respond to the changes, and that will be major factor in the overall “effect” experienced by the providers of legal aid. However, following the commitment made in our consultation response, we have commissioned a study that we hope will provide a better understanding of the dynamics of legal aid providers.
It should also be recognised that our discussions today are not purely theoretical. I simply do not recognise the picture of a failing environment for providers that the hon. Gentleman portrayed. Almost half the savings being taken from legal aid for the spending review period are derived from the remuneration changes implemented last October, which have now been in operation for up to six months—and there have been no discernible negative impacts on the supply. In fact, there has been strong confirmation that the market is willing to work at the new rates. The most recent Legal Services Commission tenders for family work were conducted using the new reduced rates, and were over-subscribed. This suggests that the rates offered are sustainable, and that providers are able to absorb and respond to the impact of reduced fees.
Returning to the Bill, at the macro level there are, of course, some obvious realities. I have always been very open about these, as the hon. Gentleman will know, both in Parliament and in my extensive engagement with the sector. A contraction in the range of services funded under legal aid will most probably mean a contraction in the number of firms providing such services, as well as a reduction in the numbers of lawyers practising in legal aid. I disagree, however, that this will translate into widespread advice deserts; it is certainly not the case at the moment.
This is a natural corollary of the changes we are making to scope, and I make no apology for that. I agree with the hon. Gentleman that in most, but not all, cases, this is not a debate about so-called “fat-cat lawyers”. The legal aid system is there to provide advice, assistance and representation for those who need it most, not to maintain existing numbers of lawyers—but we do, of course, need a sustainable provider base, because without those who deliver services there would be no legal aid system. To this end, we are finalising our approach to the first round of contracting under the new scheme, which we expect will commence soon after Royal Assent.
There are, of course, two sides to this coin, and sustainability is not something that Government, as the purchasers of services, can or should provide purely on their own. No market is static, nor should it be. The legal aid market has historically shown itself to be adept at responding to changes and seeking out commercial opportunity—and I see no reason why it should not do so again.
If any business is to thrive, it must be flexible and adaptable—that is true of any sector—and the Government are creating the conditions that will allow legal aid providers to flourish. The Legal Services Act 2007, for instance, establishes a new licensing regime, which is now fully operational and which affords more flexibility, innovation and opportunity in terms of the type of business structures and providers that can offer legal services. The significance of that change, and the commercial opportunity that it represents, cannot be overstated.
That is not to suggest that the innovative models made possible by the 2007 Act are the only way in which providers can remain sustainable under the new scheme. The impact assessment figures published alongside the Government response to consultation suggest that even after the reforms have been implemented, approximately £1.7 billion a year will still be spent on publicly funded legal aid services. It is likely that, following the savings, we will still be spending more on legal aid than any other country, and it is undeniable that that level of expenditure represents a viable market. Given the range of services that will still attract funding, it will be open to providers to diversify and seek income across a range of areas of law, although for some providers the most prudent option will be to concentrate on their area of core expertise and expand their market share in that field.
It will also possible to bid for complementary services. The Government have made clear their commitment to alternative dispute resolution. They expect to fund an additional £10 million in mediation services within the new framework, and the Legal Services Commission will be tendering for additional mediation contracts to provide those services. The introduction of the mandatory telephone gateway—which the hon. Gentleman mentioned, and which we intend to reinstate in the Bill—also presents opportunities. Providers will still be able to run telephone-based contracts alongside face-to-face contracts in areas that will continue to attract funding.
The overall message that I wish to convey is that—while challenging and sometimes traumatic—the changes will not come without opportunity, provided that there is a willingness to engage with them and think constructively about how to respond to them. Although steeped in great tradition, the legal profession has demonstrated resilience and fluidity throughout its history, and I would expect nothing less in response to these changes.
As the hon. Gentleman said, some people outside the private legal profession will be affected. Both he and the hon. Member for Kingston upon Hull North (Diana Johnson) pointed out that the equality impact assessments also consider the likely impact of the proposals on not-for-profit organisations. Such organisations have traditionally had a significant presence in a number of the areas that the Bill removes from scope, and the Government fully recognise the cumulative effect that the changes could have when coupled with local authority reductions in funding for them. However, as I have consistently made clear to the House, the Government also recognise the benefits that early generalist advice can have in a range of contexts. We want to help the sector to continue to deliver such services, but not necessarily in the context of legal aid.
We have already seen the creation of the £107 million transition fund and the £20 million advice services fund to help the sector to deal with the legal aid changes and with what will happen after that. The Chief Secretary to the Treasury has now indicated that additional funding will be available after the current financial year to help the sector further, and it will be announced in the forthcoming Budget statement. That underlines the Government’s commitment to the provision of advice services such as this, and it is expected to ameliorate the effects of other funding reductions.
However, that is not to say that everything will remain the same. Because of our current fiscal situation, savings must be made, and the not-for-profit sector will need to demonstrate the same adaptability and resilience that I have described in respect of the legal profession.
The Government understand, and are sympathetic to, concerns about the scale of the change that the Bill represents, but we stress that it is incumbent upon the providers of services to think constructively and creatively about how they will establish themselves in the new market. Change will, naturally, be a challenge to the sector, not least because the current system has operated for a significant time, and providers will have become accustomed to a particular way of working. However, for the reasons I have given, there will be real opportunities for those who wish to take them, and for those outside the scope of the new scheme additional funding is being made available to provide for the future.
May I conclude by returning to the topic of the—rather technical-sounding—counter-factual assessment, to which I referred at the outset? We must avoid falling into the trap of predicting the future on a basis that does not allow for the very human response of adapting to changing circumstances. There is a future for legal aid providers, and the market can thrive, but the willingness of providers to adapt will be key to achieving that. Given what I have seen to date—not least providers’ response to the fee reductions—I have every confidence that that will be achieved.
Question put and agreed to.
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Laura Sandys (South Thanet) (Con)
I am extremely honoured to be speaking under your chairmanship, Mr Amess. From one seaside town Member to another, I should say that we ought to be on the beach rather than in here. However, some things are far more important for us and our constituents. I thank the Backbench Business Committee for giving us—myself and my friend the hon. Member for Brent North (Barry Gardiner)—the opportunity for this debate.
Although this place has paid little attention to UK Trade and Investment, the Government have put significant focus on the organisation. They announced an extra £45 million of funding in the autumn statement and they have recruited one of the most influential businessmen to be Minister for Trade and Investment. We have a Cabinet Committee that is focused on growth and that has a key input from UKTI. Even this week, we can point to results in which UKTI has been instrumental: Lockheed Martin, Nissan and Jaguar Land Rover investments and reinvestments in the UK. We can point to some very positive things that have materialised from the attention and focus that UKTI has put on our inward investment and trade initiatives.
UKTI has also created a key platform for some additional areas such as the global green growth initiative. I am very excited and keen that we promote that further. UKTI has forged and developed unilateral free trade agreements and last year launched the charter for business. There has also been a focus on high-value opportunities. The three areas of investment announced this week are part of that range of high-value opportunities that we need to secure for our long-term future.
I also hear from large businesses about how welcome Lord Green’s leadership is and about his commitment to the role. However, I am concerned to see the speculation that he might get pinched by the Bank of England. I hope that our Ministers in the Department for Business, Innovation and Skills are securing him—locking him in the office and pinning him down on his chair.
Although things are going well for UKTI, we cannot forget that we are not operating in normal times. As every clichéd politician has said, “We’re all in this together.” However, certain departments are more involved in the job of getting us out of this mess than others. There is probably no more important department involved in that than UKTI. I am therefore very pleased we are having this debate today.
For certain personal and constituency reasons, I am particularly interested in UKTI, not least because, a year ago, Pfizer—one of my largest employers—decided to withdraw many of its staff. It is therefore absolutely crucial for me and my constituency to understand more about how UKTI functions, and what it does to develop and attract inward investment.
On a personal level, I have worked for what was called the Department of Trade and Industry in its inward investment unit. I have also worked in many countries, from countries in the Caucasus to Peru and Argentina. I have seen for myself how people engage when it comes to inward investment and how trade missions work—or, as has frequently been the case, do not work. It is important that we in the House have an opportunity to debate something that has such an impact on our constituencies. Many of us have had experiences of inward investment and trade in our lives before we came into Parliament.
So if everything is going so well, why do we need this debate? Success is not enough if it is only expressed in our own terms. Unlike other departments, UKTI is operating in an aggressive, competitive environment and, in many ways, is not trading in isolation from others. A key national priority for any country—whether it is democratic or not—is domestic prosperity. That means that trade and inward investment for every country, particularly emerging countries, is becoming a very big priority.
If we really believe that, we must believe that, for example, a job from Samsung that goes to Hamburg is a job that has potentially been lost from the UK. If I have to declare this, I will: I happen to be half French—[Interruption.] It is something that I have to bear. I have therefore seen how the French operate globally in both the trade and the inward investment sector. All I can say is that our competitors certainly know how to finish the race sometimes before us.
Julian Smith
Will my hon. Friend give some specific examples of how the French have managed to seal the deal?
Laura Sandys
Some examples are a bit difficult to repeat in public. On a serious note, the French have always had a very clear focus. Since the second world war, both their diplomats and their whole political structure have been focused on understanding economic diplomacy.
Laura Sandys
Absolutely. Even us half-French Members of Parliament try to grab a little of that je ne sais quoi. The French have a philosophy that goes from the top to the bottom of government—whether that is nationally or, interestingly, at a local government level, where inward investment and trade relations are considered a lot more important that we necessarily consider them to be in the UK.
As I say, we are talking about an aggressive environment, so it is worth questioning UKTI. Do we have the right strategy? Do we have the right people in the right places? Sometimes I am concerned about whether we are marketing ourselves effectively enough. In other instances, I have come across bureaucracy. If we are in a fast-selling and aggressive competitive environment, is that bureaucracy holding us back?
I shall start by considering strategy. Much of UKTI’s strategy is great. There is a lot of sectoral focus. Account management has been introduced, so that large investors here have people who are direct relationship managers there. There are client relationships across the board. In many ways, the organisation is like an excellent consultancy, such as the one I used to run. However, what is this well-oiled consultancy really trying to achieve?
My limited exposure to UKTI’s strategy for inward investment did somewhat confuse me. Hon. Members might think that that is only my experience. However, when I spoke to some UKTI officials, they were confused about the relationship between themselves, PA Consulting Group, which has won a tender to work with UKTI, and the local enterprise partnerships. Frankly, there is a lot of confusion about what that relationship looks like, who is in control and how we—constituency Members of Parliament, with assets that have an inward profile and the opportunity to gain inward investment—can gain access to that supply chain of sales leads.
I am not sure that the right structure is in place—one that is understandable and will operate the most effectively to make the inward investment propositions to the important and big companies and sovereign funds that we need to secure to achieve economic revival. Quite a lot of money is being spent through the clearing house that is PA Consulting. Will the Minister look at the money going into the so-called bureaucracy and operational side of the inward investment structure to see whether more of it can go to the localities and organisations that deliver inward investment pitches, in order to improve the inward investment opportunities of such localities?
I am concerned that we have a convoluted sales environment in inward investment, but I might be proved wrong, and I look forward to the Minister illuminating me or giving me a pathway that I and many of my colleagues in Kent would be interested to understand.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
I congratulate my hon. Friend on securing this important debate. I do not think we had a single debate on exports in the whole of the previous Parliament, so this debate is timely and welcome.
We, this coalition Government, quite rightly got rid of the regional development agencies that used to be responsible for co-ordinating inward investment and introduced the LEPs. However, the LEPs do not yet seem to be working well. Are they working in my hon. Friend’s area?
Laura Sandys
I welcome my hon. Friend’s intervention. As yet I am not too sure what an LEP is. I think that they are evolving and creating their own personalities. An interesting thing is that they do not fall into the same category as the RDAs, which were similar in every different region. My area is part of a large LEP, comprising Essex, Kent and east Sussex. In many ways, that creates a different sort of LEP than smaller ones. LEPs are evolving.
I am not concerned about the future of how LEPs operate. We have 18 months to two years of interregnum, in which we need to get our inward investment pitch out. We must put forward the best that we have to offer. The rest of the world is crawling all over business opportunities while we are waiting for structures. I do not have time for structures, particularly in my area, where, as I have said, Pfizer has decided to downsize quite dramatically. Life science jobs based in Sandwich are walking away every day, because the marketplace is an international one. The jobs are not fixed in Sandwich; they are leaving and going to Shanghai, and they are being recruited for around the world. Waiting for structures to be in place is not going to be good enough for some areas where we need to move fast and be nimble and commercial.
Are we sure that we have the right sort of people working in the area? The people are extremely bright, and I have met some of the most intelligent and committed people working at UKTI. However, we need to think about whether they are commercial people. I know that including PA Consulting is an extremely important part of involving the private sector. I put my hands up to say that I used to run a consultancy, and I worry that sometimes consultancies are not the private sector; they become an extension of a client, although it is still important to have that input. We need to be clear who has international experience working at the sharp end.
Perhaps my greatest surprise came when I was talking to someone about the issue in one of our Departments. They said, “We are spending a lot of money on languages. It is fantastic, Laura. We are going out there and ensuring that all our diplomats speak all these wonderful languages in all these emerging economies.” I looked a bit aghast, and they were a little disheartened that I was not excited about that. I said, “Do you know that 220 languages are already spoken in this country? Do you know that we have the opportunity to recruit people whose cousin, uncle, aunt or existing business partner already works and lives in these countries?” With absolutely no disrespect to anyone with a classics degree from Oxford or Cambridge, someone whose grandfather comes from Punjab is possibly a better person to build our relationships and business contacts with those particular countries, in those communities, than someone who is learning Punjabi for the first time.
One of the exciting things about this country is that we are the Commonwealth in minutiae—we are a reflection of our past, which gives us a huge asset for our future. We need to look again at the sort of people whom we are presenting as the face of Britain, and also at who can be effective. I throw a challenge to UKTI: if it recruits a selection of such people to be our face in the emerging markets and says, “Take 100 small businesses with each of you, try to nurture them and help them to have trade relations in particular areas, support them in the first year, ensure that they are not entering into contracts with someone who is a little sharp in the area or who will not deliver, and nurture them through the first year of export or joint partnership”, we will get a much bigger increase in exports and enter into global relationships with small and medium-sized businesses. We have a unique asset, but I am just not sure that we are using it.
Julian Smith
Does my hon. Friend agree that as well as the international face of UKTI, we potentially need to look at the skills that we are presenting to the domestic customer base of UKTI? What types of skill and commercial experience does she feel are required to seek out export-hungry companies throughout Britain?
Laura Sandys
I welcome my hon. Friend’s intervention. I have started two small businesses, both in the middle of recessions. We do not have enough people who have a business focus.
I was quite surprised that 1,000 people work in UKTI in different regions of the United Kingdom, and there may be great value in that. I would like to see a lot more of them in our constituencies, perhaps using the opportunities that Members of Parliament can offer, so that they can understand a particular constituency.
We need a much stronger commercial focus. Small businesses have one language; in a strange way, it is almost a universal language. It can travel even if people do not speak the same language. It is more important to have that business language when people talk to someone else than it is necessarily to have location or certain areas of expertise. We need more commercial people.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
The hon. Lady made an extremely important and valid point about using our multicultural and multinational economy and contacts to attract business to this country. Under the previous Government, the strategic investment fund seized upon that idea. To be fair, the current Government, through UKTI, are trying to do that through an organisation known as Catalyst. However, I am unclear as to how much progress we have made. I thank the hon. Lady for raising the subject, because it is important. Perhaps the Minister, given that advance notice, will be able to give us some information.
Laura Sandys
I reiterate that question to the Minister. Hopefully we will understand more about the issue.
Another point, which arises from the comments of my hon. Friend the Member for Skipton and Ripon (Julian Smith), is about how we help and assist small businesses—I am talking about very small businesses. For example, some of the ways UKTI is approaching trade are positive, but they are for medium-sized companies. There is a strong internet and web-based opportunity, which I have mentioned before in the House. Why are we not translating one or two web pages about small businesses that we know might be of interest to x, y and z markets? That would offer them an opportunity to market online from their office, rather than having to go on expensive trade missions.
The Minister has had his own small business and knows well that it is not actually money that affects small businesses, but time. The idea of spending three or four days speculatively is not really feasible for many businesses, but we could start to amalgamate websites to push certain sectors. For example, in my constituency there is a little brewery called Gadds’. It has five employees and has just made its first sale to Japan on the basis of somebody picking up a quote from a website about microbreweries—I understand that Japan is very excited by microbreweries. Why do we not have a web page in Japanese on our UKTI site that talks about 20 lovely, exciting and interesting microbreweries? Let us try to use what we tell everybody else to use—internet platforms that can save money and time. It is very speculative, but it does not cost anybody anything either.
In conclusion, I would like to ask the Minister some favours. Can we please try to put enterprise zones and areas that have received regional growth fund moneys on the UKTI website? I have been asking for that to happen for months. It is really important as an inward investment platform, but there is no reference to those important coalition initiatives.
Brandon Lewis (Great Yarmouth) (Con)
My hon. Friend mentioned enterprise zones. The New Anglia enterprise zone, which covers my constituency, is predicting 2,000 extra jobs in the next couple of years, going up to 15,000. That is being replicated across the country. Does she agree that it is hugely important to promote enterprise zones and to make sure that people overseas—many zones are trying to attract them—understand fully their opportunities and expectations?
Laura Sandys
Yes. I very much welcome my hon. Friend’s point. We have both been working very closely on enterprise zones, and my hon. Friend chairs the all-party parliamentary group on local growth, local enterprise partnerships and enterprise zones. Promoting them is absolutely crucial and I understand that there are two reasons why it has not happened. One reason is bureaucracy. The other reason—I was told by somebody from UKTI—is that UKTI does not have enough resources to put it on the website. Well, if they ran the website under IPSA regulations, they would find out exactly how much they have to get their hands dirty themselves. We need those front-end promotions.
UKTI should talk much more to Members of Parliament. I welcome the fact that my hon. Friend the Member for Stourbridge (Margot James) is doing a lot of work with MPs and UKTI, but we should not underestimate how much we know about the texture of our constituencies. That is certainly not about trying to sing our praises. The bizarre information and knowledge we receive as MPs is extraordinary and might stimulate some exciting ideas. As well as going through LEPs, which are big and have not really quite formed yet, and talking to chambers of commerce, who see things through one particular prism, I urge the Department to talk to MPs about their constituencies. That will give a little more flavour.
I am very happy to do what I call a speed-dating pitch at the next meeting of international UKTI executives when they come from all parts of the world to the UK. I am very happy to do a pitch on my enterprise zone and my regional growth fund money, and I am sure that there would be a lot of interest from other MPs who would be happy to do the same. We are here to sell. We are also here to look after potential inward investors. I assure them that MPs are not all as unruly as I am; they behave and they stay on message—if they are told what the message is. There are a lot of opportunities for us to be part of UKTI’s sales pitch, and to welcome people in the way that, when I have been abroad, other countries’ MPs have welcomed inward investors. I still feel that this place is kept apart from an important sales job for the UK. We can be a part of it. We can contribute to it. Hopefully, some of our ideas might even be adopted.
Barry Gardiner (Brent North) (Lab)
The hon. Member for The Cotswolds (Geoffrey Clifton-Brown) is absolutely right; there has been no debate on UKTI—not only in this Parliament but in the entire previous Parliament. It is indicative that the hon. Member for South Thanet (Laura Sandys) and I, who have both run businesses, have initiated this debate.
Julian Smith
Can the hon. Gentleman explain to me, as a new MP, why, in the whole period of the previous Parliament, trade and export seemed to get so little coverage and interest from Ministers or Government Back Benchers?
Barry Gardiner
I could, but I would rather refer the hon. Gentleman to the pamphlet that I wrote on the matter following the general election. I fear that if I were to begin on the point now, it might take up more time than we have available.
If the UK is to emerge from its current economic stagnation, it must do so by trade. The opportunities from trade and investment lie not only in our own abilities but in the accurate assessment of the economic opportunities in, and performance of, other countries. We have seen a definite shift in economic power. With the rise of India, China and Brazil, there is a new global dynamic, so there are now new global opportunities. We have seen the eurozone’s problems, as it struggles to pull itself out of recession. In the past 15 years, the United States has adjusted to refocusing its attention more towards the Pacific than the Atlantic. In those circumstances, we have seen the benefits of Indian companies, such as Tata Global, investing in British companies such as Tetley. We have seen the benefits of British companies, such as BAE, expanding overseas and, in doing so, boosting our economy.
It is imperative that we have the skills and institutions that can facilitate such investments. We need an organisation that can identify opportunity overseas and channel UK companies in a co-ordinated supply chain to meet it; one that can source overseas investors and persuade them that UK companies are the perfect fit for their investment to yield above-sector returns for them and for new jobs and growth in the UK. That organisation should be UKTI. The redoubtable hon. Member for South Thanet has illustrated that UKTI is, in its current state, not yet that organisation. It lags behind other countries’ organisations in promoting investment abroad and at home.
Nick de Bois (Enfield North) (Con)
Before the hon. Gentleman advances his idea of what UKTI can do—I agree with everything that he has said so far—should a critical part be not just about where the opportunities are now and in the short-term future? The UKTI must be able to play a strategic role, with the Government, for the so-called N11 countries. We must seize the opportunity to be the first to the field with infrastructure, airline routes and so on.
Barry Gardiner
The hon. Gentleman makes an absolutely perfect point. I am very happy to acknowledge it and support exactly what he says. UKTI should not simply be looking at the present, and it should not simply be looking at the short to medium term. It should have a strategic overview of where the UK’s trade and investment interests lie into the foreseeable future—that is absolutely right.
Geoffrey Clifton-Brown
Does the hon. Gentleman agree that if we get one thing out of this debate, it is that UKTI needs to be encouraged to benchmark itself against the very best similar organisations in the world? With great respect to my hon. Friend the Member for South Thanet (Laura Sandys), let us not benchmark against the French—we will get into the same problems that they have—but go to Asia and look at Singapore and Hong Kong to see what they are doing for their countries.
Barry Gardiner
I think that I should just take interventions and not make my speech, because every one of them is excellent. The hon. Member for The Cotswolds is right. I disagreed with him on his earlier points about RDAs, but on this point I agree: benchmarking and international comparators are essential if we are to see what we are doing. Also, there must be much closer scrutiny, performance management and benchmarking within UKTI to ensure that we are delivering what we promised. I will mention accountability in that sense later.
Mr Bailey
I am just giving my hon. Friend another opportunity.
A relevant point made in my Select Committee’s report last year was that a problem with UKTI is that it has been focused on measuring processes, rather than outcomes. Doing the latter is far more difficult. Does my hon. Friend agree that to assess its effectiveness, we have to find some mechanism by which we can measure UKTI’s impact?
Barry Gardiner
I would that every debate I participated in shed as much light on the subject as this one appears to be doing, without my saying a word. My hon. Friend, who chairs the Business, Innovation and Skills Committee, speaks with great knowledge on the subject and has pinpointed one of the key problems. It is a problem not simply for UKTI but for government as a whole. Government is keen to measure outputs, but reticent about measuring outcomes. That process transformation is required, as my hon. Friend’s Select Committee has pointed out.
While Germany and France bolster their economies with effective trading bodies, UKTI presents itself to those who use it as slack, unfocused, inefficient and even, in some cases, a deterrent to investors. Consider what Dr Wu Kegang, chief China adviser to the British Chambers of Commerce, told the BBC last year. He said that Chinese investors
“have no idea how to enter the British market. They don’t know how to build business channels inside the UK to promote their innovative brands and products”.
Global economic power is shifting from west to east and UKTI is failing to adjust adequately to the new reality. The UK is falling behind in investment in BRIC countries; inward foreign direct investment is dropping; and our global share of trade has slumped. Recently, the news has been dominated by the difficulties that British companies are facing in securing contracts over their foreign competitors. Just last month, BAE lost out to the French company, Dassault Aviation, for a contract with the Indian air force worth £7 billion to the UK economy. We cannot afford to lose, and we should not be losing, such a contract.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I am concerned and want to ensure that we get the facts correct. The preferred bidder has been identified. We have not given up the fight. There is a lot more to do. We need to get that clear. I understand what the hon. Gentleman is saying, but I want to make sure that it is known that we are not yet out of this fight.
Barry Gardiner
I am delighted that I was able to provoke the Minister’s intervention, because that is exactly the fighting talk that I wanted to hear. The hon. Member for South Thanet started by talking about your both being on the beaches, Mr Amess, and clearly the Minister is still fighting on them, so that is good.
This is a time when the UK should be taking every advantage afforded it to it. The difficulties created by recession and the crisis in the eurozone are considerable. That is why we need to expand our horizons, seeking new and innovative ways to attract investment and finding opportunities abroad. UKTI and British industry, generally, possess some remarkable advantages, many of which have been mentioned by the hon. Lady in her opening remarks. We enjoy significant cultural, historic and economic ties with many countries currently experiencing economic growth. London is the world’s financial capital, and we have a long and proud history of manufacturing.
With the right attitude, focus and know-how, UKTI can provide a firm footing for Britain to re-establish economic growth. As it stands, however, it is failing. The UK has lost market share in trade and investment. According to the Office for National Statistics, foreign companies invested £32 billion in the UK in 2010—a decrease of £16 billion from 2009. More significantly, because some people may challenge that on the basis of the recession, that was the lowest value since 2004. In 2010, outward foreign direct investment by UK companies decreased to £23 billion—the lowest FDI outflow in 16 years.
One might claim that recent events in the eurozone and the United States have impacted on such figures, but the statistics for the so-called BRICs are just as unimpressive. The United States remains the biggest recipient of outward UK investment. India, whose economic growth has topped 7% almost annually for the past 10 years, is down in 18th place, while China, the world’s largest economy, is 24th. Between now and 2030, GDP in the BRIC countries as a proportion of world GDP will increase by 40%, yet more than 65% of UK trade is done in north America and Europe. Indeed, British involvement with emerging economies has been waning. The UK dropped from seventh to fourth in the list of India’s largest export markets, but went down to 22nd place for imports from number three and now accounts for just 1% of all imports into India. We are the sixth largest manufacturing economy in the world, yet we represent just 1% of India’s imports. If that is not cause for shame and alarm, it should be.
Nick de Bois
There is a lesson in this and a stark warning. As with many other countries, there is a large diaspora from India in this country. We have a history unique to that part of the world and we share many common languages and traditions, yet we seem—perhaps there is a role for parliamentarians from all parties, as well as Ministers—to be failing to build long-term relationships. Does the hon. Gentleman agree that, in that way, we may be able to play a small part?
Barry Gardiner
The hon. Gentleman is right. Indeed, for precisely those reasons, I set up the all-party parliamentary group on UK-India trade and investment a number of years ago, to take advantage of the constituency links that he and the hon. Member for South Thanet have mentioned. We must capitalise on these things. They are the stuff of which business is made. Business is made not simply by good products and good marketing, but by people and contacts and by people who are able to go out and get business and do the deal. Someone might have the best product in the world, but if they do not have such a relationship, things will not happen. That is the hallmark of successful business.
In my constituency, more than 130 languages are spoken in our schools, and in one school, in a class of 29 children, 21 different first languages are spoken. Coming from such a constituency, I echo the sentiments expressed by the hon. Member for Enfield North (Nick de Bois). It is upon the experience, contacts and family connections of my constituents and, I presume, his that we must build a much stronger trade relationship.
This question must be asked of UKTI: why are emerging markets not at the forefront of British investment now? It should be UKTI’s role to facilitate investment abroad. The statistics reflect UK companies investing where it is easy, not where they can maximise return and not with an eye to future market share. That has a knock-on impact for British trade generally. The UK’s share of global exports has fallen from 5.3% in 2000 to 4.1% in 2010—a long-term trend of decline, I agree, since the 1950s. In the same decade, however, German exports grew from 8.9% to 9.3%. Meanwhile, our goods exports have grown by only 1% per annum, compared with 3% in the US and 5% in Germany.
A report conducted by Ernst and Young for the CBI noted:
“UK outflows are concentrated on the EU and the US, with negligible investment going to high-growth economies.”
The failure properly to engage with emerging markets is, however, not limited to the BRICs. There are no stated bilateral trade targets for Egypt or South Korea, despite both countries being designated as high-growth markets in UKTI’s current five-year strategy. There are also no stated bilateral trade targets for Bangladesh, Indonesia or the Philippines.
Although it is, of course, unfair to blame all those things on UKTI, they serve to underline the organisation’s inefficiencies. UKTI has masked its weaknesses through a lack of accountability. The figures provided in its own reports show little consistency, and there is a great deal of obfuscation regarding the allocation of resources and staff. There is also little or no clear delineation of duties or responsibilities between UKTI, the Foreign Office, the Department for Business, Innovation and Skills and the Treasury. The result is an overlap in what the various Departments do and, I assume, a duplication of effort. That lack of organisational clarity gives way to inefficiencies and a failure properly to undertake functions.
The evidence from business—I stress that it comes from business—is that UKTI is not an unuseful organisation, but it could do much more. In a survey conducted by the National Audit Office, 30% of respondents mentioned receiving some benefit from UKTI, but 40% indicated they had received no benefit at all. In a survey of exporters conducted by the CBI, only 12.8% of respondents described UKTI as excellent, while the verdict of 15.4% of respondents was that it was unsuitable or poor, and many organisations, of course, did not respond at all.
UKTI claims that for every pound invested in it, £22 is returned to the British economy—I am not indulging in flights of fantasy—but in UKTI’s own survey of British exporters working through UKTI, 46% of respondents indicated they would have achieved the same outcome without using UKTI. Let us not come out with silly statistics showing that for every pound that goes into UKTI, £22 comes back to the British economy, when UKTI’s own survey tells us that most people think they would have achieved exactly the same result without using UKTI. We have to be honest with ourselves if we are to make a proper analysis of the organisation and put those defects rights.
There is a dearth of credible financial and structural information available on UKTI. The National Audit Office stated that UKTI cannot measure its effectiveness or account for its expenditures because of a lack of accurate information. Our own National Audit office is saying that. The Government allocated an additional £45 million to UKTI in 2011, and it is most concerning that we are pouring money into a body that, according to the National Audit Office, has no oversight or accountability.
Evidence from within British industries has highlighted the failure of UKTI’s approach. Eight of UKTI’s 10 board members have no background in business, thus undermining the organisation’s ability effectively to identify investment opportunities and support inward and outward investors. Again, I refer to Ernst and Young’s CBI report, which states:
“more could be done to link UKTI and embassy staff to the plethora of trade associations operating in local markets.”
Geoffrey Clifton-Brown
The hon. Gentleman has hit on a vital point. Will he consider the scheme originated by Lord Heseltine to encourage more members of UKTI to go on secondments in industry, and vice versa? In fact, we should do more of that throughout the civil service, so that it has the ethos of trade within it.
Barry Gardiner
I am always happy to listen to a freeman of the city of Liverpool, as I understand the noble Lord now is. Of course secondments and exchanges, such as those that the hon. Gentleman mentions, are sensible and important, but it would be better for people to have real commercial experience in the first place. That goes back to the remark the hon. Member for South Thanet made in opening the debate: however intelligent someone is, a first in classics from Oxbridge does not qualify them to do business or run UKTI. We have some brilliant civil servants, but if they do not have hands-on experience of running a business, filling in VAT forms, hiring and firing people or doing all the things that the Minister, the hon. Lady and I have done, they will find it difficult to get down to enabling others to do them.
The testimony of ADS, which represents the UK aerospace, defence, security and space industries, is particularly telling. Despite UKTI’s defence and security sector being larger than all its other sectors combined, ADS has observed that there needs to be a reorientation towards the BRIC countries and an increase in the number of sector specialists. The City of London corporation raised similar concerns over its UKTI sector. It identified a
“reduced...capacity limiting ability to support the delivery of overseas initiatives”
and commented:
“reduced resources for UKTI are having a detrimental impact on the effectiveness of UKTI in encouraging inward investment”.
Such comments provide valuable feedback from service users; this is not about Her Majesty’s Opposition or Back Benchers quibbling and cavilling. We are simply highlighting what service users are saying, not because we wish to embarrass UKTI, talk down British industry or undermine the Government and the Minister, but because we share the concern that Britain is not punching at the weight that it should be—or, far less, above it.
All institutions, but particularly Government institutions, should be accountable, and the debate has given us a valuable opportunity to highlight UKTI’s role, so I pay tribute to the hon. Member for South Thanet for her inspiration in initiating it. Our intention has been to provide constructive criticism and to create wider awareness in Parliament of UKTI’s role in promoting UK trade and investment. Evidence from industry and recent experience are instructive. It is clear that we must redouble our efforts to attract investment and ensure that UKTI is properly funded, fully accountable and working effectively.
Mr David Amess (in the Chair)
Order. The winding-up speeches will begin at 4.55 pm. Seven or eight colleagues wish to speak, so I hope that everyone will share the time available. If hon. Members speak for 10 or 15 minutes, that will be fair.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
I am delighted to serve under your chairmanship, Mr Amess. I congratulate my hon. Friend the Member for South Thanet (Laura Sandys) on securing the debate. The fact that we have had a debate on trade with India and today’s debate on UKTI—two debates in two years—shows the interest of the coalition Government, and particularly of Conservative Members, in trade.
I also congratulate my hon. Friend the Minister on being here. He and I had Front-Bench roles in opposition, and I regret to say that I am going to shine a light in a few dark places he might not wish me to, but here goes. High levels of exports and foreign direct investment have always been an indicator of the health of an economy. It is vital to promote exports and foreign direct investment. We know from the very recent past that we cannot rely on consumption fuelled by debt, or on Government spending funded by debt, to drive growth. As I said in one of my first speeches after the general election, it is only through exports and FDI that effective growth will come into the country. That is how important they are to the economy. As a result of our history, we boast strong economic and cultural links across the globe. We should capitalise more on the fact that English is the universal language of business.
The effectiveness of the work of UKTI is vital to our economic recovery. A company in my constituency called Renishaw plc, chaired by the excellent David McMurtry, is doing incredibly well. Its revenues for the past six months, ending 31 December 2011, were up by a record 11% —that is £1.47 million—and as a result it is now employing 16,050 staff, with 130 vacancies, including 25 apprenticeships and 30 graduate positions. That is the real importance of exports: the growth of the economy, but also employment prospects—graduate and work placement prospects, which are so vital for youngsters leaving education.
Exports are also important for the companies themselves. It is estimated that between 1996 and 2004—the Minister will know this, because I have used these figures many times—the productivity of firms that export went up by 34%, but that of firms that did not export went down 7% to 8%. Exporting firms tend to have higher productivity. It is estimated that less than a quarter of the 10,000 medium-sized firms in the UK export, and most of them receive help from UKTI. However, the Government have recognised the fact that we must help more companies, and, as my hon. Friend the Member for South Thanet said, in his autumn statement the Chancellor granted UKTI an extra £45 million, to meet the target for the number of small firms exporting, and bring it to more than 50,000. We will need to work hard to achieve that target.
I pay tribute to the Gloucestershire chamber of commerce. I was contacted on Tuesday, by Suzanne Hall-Gibbins, the chief executive, who asked me to pass on in the debate how important she felt the role of chambers of commerce could be, in exporting. I hope that the Minister will say a little more about chambers of trade and of commerce. Along with the local enterprise partnerships, they have a supremely important role, because they can identify a lot of opportunities.
Julian Smith
Does my hon. Friend agree that one opportunity for British Chambers of Commerce would be for them to produce some of the market reports currently produced by UKTI? I think that the BCC believe they can do them quite a lot more cheaply.
Geoffrey Clifton-Brown
My hon. Friend is right, and, as my hon. Friend the Minister will know, we had that debate often in opposition. We could make more of the knowledge, on the ground, of chambers of trade and of commerce, as well as organisations throughout Europe. We could use them more—that is what they are there for.
I want to take up the point made by the hon. Member for Brent North (Barry Gardiner), who is unfortunately not in his place at the moment. In 2010 50% of our exports went to EU member states, and a further 16% went to the USA. The problem with that is that it is estimated that those markets will decline by 30%. On the other hand, by 2030 the BRIC—Brazil, Russia, India and China—countries will have increased by 41% their share of global GDP. In other words we are exporting to the wrong people. We are exporting to the countries it is easy to export to; but we are not encouraging our companies to export to the real high-growth markets. If we carry on as we are, we shall sink further downhill.
The markets in question are not always necessarily difficult to export to. The Minister may know that I recently visited Morocco, as did our trade ambassador Lord Marland. There is huge opportunity there, not only for trade with Morocco itself, but to use it as a hub for exporting into west Africa. We have all been looking east, towards Asia, but some west African countries’ growth is higher than that of Asian countries. Mr Tarab, the excellent CEO of the main phosphate company, which has 60% of the world’s reserves, is an Anglophile and joint chairman of the joint chamber of trade. He said to me that we should use Morocco as a hub to get into west Africa. In particular, our banks should use the opportunities that they have through shareholdings in Morocco to get into some banks in west Africa. West African countries such as Ivory Coast, Senegal, Nigeria, Angola and Ghana have had huge growth rates in the past few years, as a result of their oil and gas reserves and discoveries. We are missing a trick. They are friends, ancient trading partners, and many are members of the Commonwealth. We need to consider that market closely.
The previous Government’s policies on exports and attracting inward investment were incoherent, which prevented UKTI from implementing a rational strategy. One simple reason for that incoherence was a revolving door for trade Ministers, and another one for trade priorities for UKTI. I suggest gently to the Minister that he should set some priorities for UKTI, stick with them and ensure that we achieve them.
UK businesses that export reap significant benefits, but many are reluctant to start exporting, because they do not know where to begin, or they are unaware of the benefits. That is where UKTI comes in, but because it lacks a coherent strategy, as I have mentioned, it has not reached out to small companies well enough. I still think there is a mismatch between what UKTI does around the world, or in London, and what happens on the ground. Ninety per cent. of the companies in this country are small ones, and 4.5 million companies employ fewer than four people; if 1 million of them took on an extra person it would almost solve youth unemployment overnight, so that is a very important area. UKTI, through our embassy network around the world, could be more proactive in identifying the opportunities in those countries and relaying them back to London. Then, through our databases on our websites, we could relay the opportunities to the businesses.
Things tend to happen the other way around. What UKTI does is reactive. It tends to rely on a company approaching it and asking whether there is a market in Nigeria for the valve that it makes, which supports the oil industry. That opportunity should be identified by UKTI long before that happens, and passed back to the relevant companies. That is a change of thinking, and UKTI needs to think about it.
We need to think what incentives we can give to small companies to export. However small a company is, exports should be discussed at every board meeting. It might not want to do anything about them, but they should be on the agenda. We could encourage small firms more with corporation tax breaks. Perhaps we should even skew the national loan guarantee scheme towards companies that export. The Government need to do more to encourage small businesses.
We have not talked enough in the debate about inward investment. Too often we are delighted when big firms come to this country. Then we leave them to fend for themselves. An example is the £1.5 billion development by DP World at the London Gateway port, with investors from the United Arab Emirates. There have been huge planning problems. We should be monitoring and nursing those big investments, with someone senior from UKTI saying, “You have got a planning problem; this is who you need to go and talk to.” We need to get a reputation in this country for really caring, not just about firms bringing their investment to the country but about looking after them afterwards. That brings me on to infrastructure and the prospect of allowing it to fall behind.
Critics of High Speed 2 and Crossrail are wrong: we need the best infrastructure in the world. People need to be able to get about; we need to be up there on a world scale—certainly as good as any of our European competitors.
We need to deploy our UKTI people in the right places. Returning to my visit to Morocco, I found that we had four based in Casablanca, which is fine because that is where most trade is done, but we did not have a single UKTI representative in Rabat, although it is the centre of Government in Morocco, where all the Ministers are. The hon. Member for Brent North (Barry Gardiner) is right, business happens by networking, and we should be asking our UKTI people to network around the world. If they are to seek out the opportunities that I mentioned earlier, they need to network with the right people.
Geoffrey Clifton-Brown
I am spoilt for riches—I give way first to the proposer of the debate.
Laura Sandys
Does my hon. Friend remember the concept of people who lived in a community for years and years but happened to be British becoming so-called honorary consuls? They were in a country permanently, or might be there for 30 years, unlike ambassadors or UKTI people who come and go. We have lost that tradition; they need not replace anyone, and we should be nurturing such people—Brits who live in Morocco, for example.
Geoffrey Clifton-Brown
My hon. Friend makes an extremely interesting point. I have come across one or two honorary consuls, such as a former one in Mexico who is involved in a huge development in that country and knows the whole business community backwards. Other than a few expenses, honorary consuls come for free to the UK Government, so we should appoint more. My hon. Friend is exactly right.
Nick de Bois
I want a copy of Hansard now.
My hon. Friend is right to talk about the need for UKTI to network, but may I be cruder and suggest that we do what the French and Germans do? UKTI should bring contacts from within the countries, put them in front of visiting delegations and make them mix. We need such contacts to sell and they can open doors to help people to sell.
Geoffrey Clifton-Brown
I was coming to that, so I shall do so now. We need to encourage everyone from the top downwards, from the royal family, the Prime Minister or my noble Friend Lord Green, to take trade delegations out to such countries; we have been good at that in the first two years of the Government, but we have not been so good at following it up. The noble Lord Prescott, for all his faults, and he had many, was liked by the Chinese, because he kept going to China—he went three or four times a year. Such hierarchical communities respect people, and friendships must be made in depth. Our business people need to know that as well, because even big business and the FTSE company chairmen make that mistake—they think that they can fly into Beijing or Shanghai, do the deal and get out. What they should do is be in there long before they make the deal, do the deal and then revisit their contacts. The other thing on big companies is that we should use them as ambassadors for smaller companies. The FTSE chairmen that I have talked to about that idea are keen to help, and UKTI should have a role.
I have nearly taken up my allotted time, Mr Amess, so you might call me to order, but I have one or two other bees in my bonnet and then I shall conclude, please.
We must do much more to encourage all Departments to export—every single Department should have a designated Minister not only for procurement but as a trade Minister. With the possible exception of social security, there is no portfolio in the Government that could not have a role in trade. In fact, anyone at any time who goes abroad at the taxpayers’ expense, whether a civil servant, a Member of Parliament or a Minister, should be an ambassador for trade—such people should have an eye out for trade opportunities and, when they return to this country, they should write a note. What did I do? The first thing that I did on my return from Morocco was to write a note to my noble Friend Lord Marland on the opportunities for trade in Morocco. I also had a visiting delegation of parliamentarians from South Korea in my office the other day; I discovered a sniff of a highly important lead on an inward investment in South Korea and I sent an e-mail straight away, that day, to the noble Lord Green, alerting him to such a significant opportunity. That is what we should be doing more.
My hon. Friend the Member for South Thanet is right that every single Member of Parliament should become a trade ambassador, on two counts. First, we visit a lot of companies in our constituencies, and we know what they do as businesses, and their export potential. Secondly, we also know our own constituency, even if it has not got an enterprise zone—which I do not, although I wish I did, as my hon. Friend does. I still know, however, what the opportunities are in my patch, as does my neighbour, my hon. Friend the Member for Stroud (Neil Carmichael), and we link a lot of businesses together. We should all become trade ambassadors.
The Prime Minister was right to veto the European fiscal compact or tax agreement, because we now see Prudential, with a market value of £18.4 billion, considering whether—perhaps threatening, I do not know—to go to Hong Kong or wherever. If that business goes, a significant number of jobs will be lost in the City of London. If we over-regulate the City or business as a whole, we will simply drive that trade elsewhere in the world. We need to say to our European partners—as I said to the German Finance Minister, and got absolutely nowhere—that if we over-regulate in Europe not only will we lose financial services jobs in this country but the whole of Europe will become uncompetitive against faster growing economies in the world. We need to be really careful about that, so the Prime Minister was absolutely right, and the demands to protect the City of London were reasonable. There are three important financial centres in the world, the USA, London and Hong Kong—with Hong Kong very deregulatory and aware of the need to reduce taxes—and, if we are not careful, Hong Kong will overtake London in time to come. That is a real danger.
I return to the point that I made to the hon. Member for Brent North. Everyone has been critical of UKTI today, and it is easy to be so, but it has a difficult job to do and I think that it does a good job—on the whole and in spite of all the criticisms that I have made. That said, it could do the job a lot better. UKTI needs to benchmark itself against the very best globally, to learn lessons from our rivals in Hong Kong, Singapore, India and all around the world. We in the coalition have been slow to insist that UKTI does that, and I suggest to the hon. Member for West Bromwich West (Mr Bailey), the Chairman of the Select Committee on Business, Innovation and Skills, that if UKTI does not do that itself, perhaps the National Audit Office should do a proper value-for-money report. That is not necessarily a criticism—none of us has 100% wisdom, and every single one of us could improve performance. There is some distance to go with UKTI, because the only way we will grow the economy and create jobs is to export more and to encourage more inward investment. After all, we were the leading country in the industrial revolution, and that is what made this country great—the “great” in Great Britain—so for goodness’ sake let us strive to get back there again.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
It is a pleasure, once again, to serve under your chairmanship, Mr Amess. I thank the hon. Member for South Thanet (Laura Sandys) and my hon. Friend the Member for Brent North (Barry Gardiner) for securing the debate, and I congratulate them.
I have served on two Business, Innovation and Skills Committee inquiries covering UKTI, one as a lay member under my Conservative predecessor as Chair, the hon. Member for Mid Worcestershire (Peter Luff), and the other as Chair myself when we took up the issue of foreign trade and investment last year. We are in a rapidly moving world and Select Committees can take part in the process; it is most important that we do not just produce reports, make recommendations, get replies and then put them on the shelf, but that we examine how policies have evolved over time. My Committee will certainly be looking again, in the near future, at the issues raised today.
I have heard a lot of criticism of UKTI today, as well as what might be called faint praise, some of which reflects fairly perceptions of UKTI. Certainly the figures quoted by my hon. Friend the Member for Brent North from the CBI survey by Ernst and Young genuinely reflect the mixed perception of the sort of services that UKTI provides. However, in defence of UKTI, the service has had some problems. The report of the Select Committee on Business, Innovation and Skills states:
“All departments must be made to realise that they have a major role to play to help Britain trade its way out of recession and sustain its long term prosperity.”
That echoes the words of the hon. Member for The Cotswolds (Geoffrey Clifton-Brown), and as a fellow Cotswoldian, I could not agree more. The report continued:
“The Committee found that UKTI is, overall, a successful agency but that it has been subject to too much interference from other parts of government. Its priorities have been changed too often, leading to a lack of clarity. Treasury imposed revenue targets have also forced UKTI to offer businesses services it is able to charge for, rather than providing the services which will most benefit individual companies and the country.”
Those were the conclusions of my predecessor Committee about the previous Government’s policy. The problem is that it has not changed much under the present Government. We should measure UKTI in terms of national policy and in the context of national priorities.
When the Government came to power, they talked about rebalancing the economy, and highlighting the crucial role of export growth within it. I expected UKTI, as the most strategic service capable of delivering that overall policy objective, to be strengthened and to be given greater influence not only over the policy of the Department for Business, Innovation and Skills, but over other departmental policy. Regrettably, a series of delays, confusion and muddle has blunted its effectiveness.
First, there was delay in the appointment of the new head when the previous one left—a four-month delay in a service that is vital to our ability to grow out of recession. Then there was delay in appointing Lord Green as Minister for Trade and Investment. He was appointed in January 2011, about seven months after the Government came to power. Given the point that has been made so many times about the importance of our top ministerial representatives banging the drum for Britain in foreign countries, that delay hampered UKTI’s ability to maximise its role and potential.
There were funding cuts of 17%, leading to a 19% cut in trade advisers. When the Minister appeared before the Select Committee, he conceded that, in the short term at least, the number of companies that could be advised would be reduced. That was remarkable at a time when all public announcements were about the huge importance of exporting our way out of the recession, and the level of commitment needed to do so.
The hon. Member for South Thanet made some important points about the abolition of the regional development agencies, and the appointment of a body to carry out that inward investment process. There were huge delays, and a period of confusion. We all have our opinions about the regional development agencies, but they carried out that function with various degrees of ability.
Laura Sandys
It is interesting that we have a very effective organisation, Locate in Kent, which is very Kent-based. From our perspective, regional development agencies did not understand us, so they were never going to have a function. We need speed and flexibility of action, instead of having to wait for bureaucracy. Whatever the organisation and whatever the structure, we need to act fast, and to be nimble and flexible, instead of institutional.
Mr Bailey
I accept the hon. Lady’s comments. There were different experiences of the RDAs’ work, and they generally seemed to be more highly regarded the further north they were. However, there was undoubtedly a body of expertise embedded in them, which suddenly found itself unwanted. The introduction of local enterprise partnerships may or may not be able to fulfil part of that function, but for a long time there was no clear source of advice, information or propaganda that could be used to make the necessary local connections by any company contemplating inward investment. That may be changing in one or two places, but we have lost a year at least, and the consequences in some areas are serious.
Overall, the problem has been that because of the delays—there was also a five-month delay in publication of the UKTI strategy—the impression has been that, despite all the public pronouncements, the service is not a serious priority. Not only have we lost some of the services that were previously carried out, there has been a lack of direction and focus for a considerable time as a result. I accept that the perception of UKTI has been mixed, but the Government have failed to make it the sort of priority service that it should be—I totally agree with the comments made by the hon. Member for The Cotswolds—and that has not helped it to perform its function.
I welcome a number of recent developments, which may change that situation, and the Select Committee will consider them, including the extra investment of £45 million. The recently signed agreement between UKTI and the European Chamber of Commerce, which has been anxious for that agreement for a long time, could be a model for the integration of our foreign trading practitioners, with UKTI, the Foreign Office and civil servants pledged to make those connections. There is probably huge scope for reproducing that sort of model in other parts of the world.
UKTI has had its efforts blunted by other problems arising from other departmental priorities. The visa regime has certainly not helped its efforts in China and India. That has been a constant source of grievance in those countries, and it has not created the right sort of climate, or the feeling that Britain is open for business, which should underpin UKTI’s efforts there on our behalf .
The Export Credits Guarantee Department was roundly criticised by the British Exporters Association before the Select Committee. To be fair to the Government, they have tried to act on that in a way that the previous Government did not, but the jury is out on how successful their actions will be. The overall problem for small businesses is access to finance to allow them to invest and to take the available opportunities in foreign markets. I know from personal experience in my constituency of a number of companies with export opportunities that have not been able to realise them because they could not lay their hands on the finance required to invest to meet the necessary production targets.
I return to the point about departmental priorities, and the importance of getting the top people in our ministerial hierarchy to go out and beat the drum for Britain. The hon. Member for The Cotswolds made the valid point that going out to sign a trade agreement is only one thing, and I have heard feedback from companies expressing their concerns that while they do the work to get trade agreements ready, the Ministers just go along to sign them and take part in the photo shoot.
In Germany, for example, political leaders are constantly on the phone to work with and promote industry, but we in Britain do not do that in the same way. That is not a criticism of the current Government; it was the same under the previous Government. One problem is our governmental structure. Why does the Prime Minister return to the House every Wednesday to answer questions when he could be out working to get contracts signed that will help British people get British jobs and strengthen our economy? The Government should consider changing some of our constitutional structures and parliamentary procedures to free up our leaders to carry out that ambassadorial role more effectively than they are able to do at the moment. I do not blame individuals because the nature of their job militates against such involvement. However, if we are serious about trying to refocus the whole Government on such a priority, we must look at government in the round.
A number of other Departments have pursued policies that run contrary to our objectives. The abolition of regional development agencies before there was an effective replacement mechanism is one example, as is the Home Office and its visa regime. Such things work against our trade objectives, because our departmental structure does not consider overall priorities that will help us grow our economy. The hon. Member for The Cotswolds made that point, although perhaps in a slightly less critical way.
The fact remains, however, that the structure within our Government does not focus on growth as it should. If UKTI is to be effective, we must give it more investment, monitor the outcomes of its work, and ensure that other departmental priorities work to maximise its potential. If we do that, UKTI may genuinely be able to lead this country towards export-led growth and the position that we were in many years ago, developing our exports and our role in the world economy.
Priti Patel (Witham) (Con)
It is a pleasure to serve under your chairmanship, Mr Amess, and I congratulate my hon. Friend the Member for South Thanet (Laura Sandys) on securing the debate. It is always a privilege to attend debates of this nature and to discuss trade, exports, inward investment and UK plc. Conservative Members feel passionately about those issues and are constantly coming up with ideas. I hope that we will be able to give the Minister some constructive and helpful suggestions about how we can work together to further that agenda.
It is always interesting to follow the Chair of the Business, Innovation and Skills Committee, and although I was taken aback by some of his earlier comments, I agreed with his concluding remarks. I find somewhat ironic and superficial the synthetic lament about UKTI and the fact that there is now a lack of trade advisers. During the good times, a lot of money was spent by central Government, and we must question how it was used and why exports did not increase, given that all those resources were going in.
I agree with many of the points raised during the debate so far, and I will not go over ground that has already been touched on or repeat facts and statistics. I wish to talk about the United Kingdom in relation not only to business, trade and the global economy but to the Commonwealth countries. Statistics demonstrate that we are not doing enough to enhance or strengthen our long-established, traditional, historic and cultural ties with those countries and to do more business with them.
We all know about the economic outlook and the crisis in the eurozone. I feel that the United Kingdom should capitalise on its natural relationship with Commonwealth countries and become an even greater player on the economic stage. We must strive to work better with our friends of old and our friends of new to improve our economy and show that Britain is open for business and to enhance cultural ties and commonalities.
My hon. Friend the Member for Enfield North (Nick de Bois) spoke about the diaspora and the Indian community. I am of Indian origin and I know a little about the Indian community in this country. Central to what one hopes will be UKTI’s enhanced role following today’s debate, perhaps the Government will consider how engagement with other communities—not only in London and the south-east, but across the United Kingdom—can be strengthened. The Commonwealth network provides us with many natural trading partners, but we need to do more to enhance that network. If the UKTI is able to take a more strategic role, I hope that that would be embedded in its sense of direction.
I should like to take up some of the points that have been made and particularly the contribution made by my hon. Friend the Member for South Thanet. Local enterprise partnerships were mentioned. She and I share the largest LEP in the country—your constituency is also part of that, Mr Amess. I have been asking some interesting questions and it has been quite an education; I decided to throw myself into the world of LEPs and rationalise from that local grass-roots position how we can be more outward facing in terms of exports, enhance business relationships in the constituency and make connections overseas.
I feel strongly about the issue because 80% of my constituents are employed by small and medium-sized businesses—a figure that is higher than the national average. Small businesses are key to the local economy, not only in my constituency but in the eastern region and Essex. Every week when I meet local business representatives, whether I am meeting someone for the first time or someone whom I have met frequently over the past four to five years, I always ask about the international dimension. They have never engaged with UKTI—a point worth reflecting on—and partly because of current economic circumstances and constraints, they have not really considered where their business will be in five years’ time in terms of exports or the international footprint.
Through the LEPs network, I decided to engage with the Essex chambers of commerce—you will be familiar with that, Mr Amess—to consider the situation. Interestingly, in two weeks’ time, we will hold a trade event in my constituency. We have successfully invited the Indian Economic Minister and the UK India Business Council, as well as all the relevant businesses that need to engage externally and look east, to facilitate dialogue, connection and engagement. My conclusion, particularly after working with the chambers of commerce and speaking to many local businesses, is that all Members of Parliament have a symbolic and significant role to play. I see myself almost as a broker and someone who is able to facilitate people coming together in the same room.
I am in talks with the Essex chambers of commerce about taking a delegation of Essex businesses to India, probably in the summer around June. I will organise that with the chamber of commerce. With no disrespect to UKTI or central Government, I do not see it as central Government’s role to get involved. We know our businesses and economies best, and we are undoubtedly all ambassadors for our communities and businesses and for UK plc. It is incumbent on all of us to play a stronger role in doing so and in facilitating. Although UKTI has a role to play and will, we hope, take on board many of the comments and representations made here today, I feel that we can do much more on that basis.
I also feel that the Government have a role to play, particularly working alongside MPs, where we have contacts and business links. I have had the tremendous privilege to work in the corporate sector and across a range of sectors. I have worked in the east and the middle east, particularly in Asian countries. I have also had the privilege to work for gulf Governments, helping them attract foreign direct investment. What we learn from such experiences is valuable to the Government, as are our insights into how to do business and attract inward investment and our personal contacts and networks.
Just this week, I have had some interesting offline conversations, to use a business term, with people in the Indian Government about the Government tenders coming out of India. I am an advocate for our great country—I want British businesses to have a tremendous footprint in India—so I am picking up the phone to a company, which will remain nameless for now, that makes great products that have missed out on other international deals, to see where I can facilitate connections.
Off the back of today, we have a tremendous opportunity to sit down with Ministers and their teams to help carve out a strategic route map with certain countries to download our networks and insights, marry them up to British companies and see how we can facilitate greater dialogue, engagement and connections with other Governments, where those connections have not been particularly strong in the past and where central Government might not have a good footprint, a strong blueprint or a personal connection. There are quite a few examples.
I see this debate as a great opportunity to move forward strongly. The previous Government missed many opportunities. The economic backdrop was different then; it is tougher now. We are in a competitive marketplace. I speak of India a lot in debates on this subject. Germany and France are making great inroads there. I want us to be highly competitive and beat them, because we have a natural relationship with India that they do not. I welcome the Minister’s comments later, but I want to give him the message that I should like to sit down with his team and many other colleagues to work out what that strategic route map will be.
Neil Carmichael (Stroud) (Con)
It is an honour and a pleasure to speak in a debate chaired by you, Mr Amess. It is also fantastic to speak in a debate secured by my hon. Friend the Member for South Thanet (Laura Sandys). The subject is critical, as every hon. Member has said and as we will all underline in our speeches.
My hon. Friend the Member for Enfield North (Nick de Bois) is half French. For the record, my family is heading in that direction, as my wife is French, which makes my children half French. I know that the French are incredibly determined, persistent and thorough, which probably accounts for their successes in trade. His experience and mine are obviously useful in such matters. Having said that, I will move on to the key points.
I worked with UKTI in my former life, before being elected as the Member of Parliament for Stroud. I was interested in Poland, which at that point was growing well. I knew that there were great opportunities, because I had taken the time to study economic data and seen that there were areas of growth. That was more than 10 years ago. When I enlisted UKTI to help me, I found the organisation extraordinarily helpful in many ways, including in making contacts and links with firms already in Poland, decision makers and politicians—even members of the Law and Justice party, which was quite an experience. My experience with UKTI was encouraging, but it could have been better, and I will explain one or two reasons why.
I learned two important things during my time looking at Poland. The first was that, despite the fact that Britain went to the rescue of the Poles in 1939 and had good relationships with the Poles culturally and historically, we were not first in terms of investment in Poland. We were not second, third or fourth; we were fifth. Germany had the No. 1 slot, for obvious reasons; France had the No. 2 slot; Italy had the No. 3 slot; the United States had the No. 4 slot. We rolled in at No. 5.
We must do a lot better. We should think not just about the countries with which we have been friendly in the past; it is tomorrow that matters. Although I am fully in favour of developing links with countries in the Commonwealth and beyond, we cannot just make assumptions about the behaviours of those countries; we must be sophisticated, robust and determined in developing the right kinds of opportunity.
The second thing that I noticed in Poland was that the first four countries had identified sectors and did them extraordinarily well. The French identified the hotel sector. One cannot go to a hotel in any part of Poland that is not owned or run by the French. They identified the sector and developed it thoroughly. The Germans did likewise in the automotive sector, the Italians in pharmaceuticals and the Americans in computers.
Laura Sandys
One reason why France and particularly Germany have a strong sectoral focus is that their trade associations have a different function and are a lot more proactive than ours. In many ways, they form a sales and marketing operation for the sector and are front runners, helping medium-sized companies that might not be able to spend the time or effort to go to those countries by representing them, almost like agents. It is a potentially interesting model.
Neil Carmichael
My hon. Friend is exactly right. Not only do they identify and develop sectors, they have a structure to develop relationships that are thorough and long-lasting. That is the first point that I make to the Minister.
We have all celebrated Lord Green, so let us have another go. I think that he is an excellent Minister of Trade. I welcomed his appointment, and I have heard him speak on several occasions. I last heard him speak on China. He delivered a powerful analysis of where China was going, where the markets were and the development of sectors and so forth. That is the attitude that we want within and throughout UKTI. We must understand properly the countries that we are considering in terms of the economic data, the analysis and the prospects that lie therein. The approach exemplified by Lord Green when I heard him speak on China—I have heard him speak on other subjects, but China is a good example—is the kind that we want to see much more of in UKTI.
That leads me to another point, which I made in a different context in this very room last week. It involves the importance of supply chains, which we sometimes underestimate. A lot of the products that we make in Britain are parts of products that are then developed somewhere else and sold on. In my constituency, for example, we make fuel injectors for large diesel engines. We do not make the engines; they are made in Germany, and they become parts of vehicles that are made elsewhere. That is a lengthy supply chain and a valuable one. That is what we must understand in the context of developing trade links. We must be much more interested in developing links, not just between Britain and another country, but within Britain. I am referring to the firms that should be developing the right links elsewhere. That requires more knowledge. It requires a better understanding of the landscape of opportunities. UKTI needs to get a grip on the question of supply chains, and I urge it to do exactly that.
My hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) mentioned Renishaw, and he was absolutely right. Renishaw is also in my constituency. It is a great firm. It is eager to develop markets and has recently done so successfully, because of the quality of its product, its knowledge of the market that it is going into and its sheer determination to get the engineering right. That is another thing that the Germans tend to do. We need to ensure that all our companies have that determination to achieve excellence, and that excellence needs to be promoted. Again, it seems to me that UKTI needs to develop the right kind of relationships for that to happen. It needs to do so in the right place and through the right channels.
In Gloucestershire and in my constituency in particular, we have had some striking successes with UKTI, so I do not want to be over-critical. For example, Green Fuels— a company that I visited before the general election—has developed businesses in Nevada and Mexico. Both those developments took place with the assistance of UKTI, which is great news.
Another firm from my constituency, Tudor Rose International, has obviously been using UKTI successfully. It has stated:
“As an Export Market Management Company we are delighted with the help and assistance UKTI are giving us in developing new and emerging markets.”
It goes on to develop that theme. The interesting point about that quote is that it refers to “new and emerging markets”. We must be ready to look at the new opportunities, define exactly what they are and stick to them.
Brazil is a very good example. Anyone with an understanding of agriculture would have known that, sooner or later, that country would really start growing in that sector. Some companies—for example, Fiat and New Holland; agricultural machinery firms—observed what was happening and now dominate the manufacture of large agricultural equipment there. That is good, but it is something that perhaps we should have been thinking about ourselves.
My constituency, oddly enough, has many firms that are exporting to the oil and gas industry in an emerging market in an emerging country—Brazil. They are doing surprisingly well. I shall just underline the fact. ARC, for example, is producing products that are desperately needed and of a high quality. It understands the market well and has appreciated that it is a market that will develop. In my view, UKTI needs to produce some analysis that can be easily seen—it must not be hidden behind a locked door until someone comes along with a key to prise it open—to give firms a feel of where the opportunities are and where expansion and development can take place.
I shall conclude by ramming home the point that we need more analysis of the opportunities, and it needs to be much more sophisticated and alert to new and emerging markets. That is the first point. Secondly, UKTI needs to be more transparent, a bit more open and a bit more user-friendly. That was my experience when I was looking at things in Poland, and I still detect it from time to time when I am talking to firms that are using UKTI today. Last but not least is a powerful point that my hon. Friend the Member for Witham (Priti Patel) made about developing links. However, UKTI must be thorough. One trip with a bit of glitz will not do. We need something bigger and more sustained. It must be broader and deeper—more meaningful. That is how our competitors have stolen a march on us. It is what we must start doing, and now is a good time to start.
Julian Smith (Skipton and Ripon) (Con)
I am not sure that I have a speech; this will just be a bit of verbal. I would like to add to some of the comments that colleagues have made. I start by paying tribute to my hon. Friend the Minister of State. Many Government Members wish that he was more than a Minister of State. He has a wide portfolio, of which UKTI is just a part. I want to put it on the record that his energy and effort in this area, as well as on deregulation and in other parts of the business agenda, are noted and appreciated.
From last year’s trade White Paper to the work that UKTI has been doing and my right hon. Friend the Prime Minister’s trip to America, as well as his trips to India, Brazil and China, a great deal of work has been done. I disagree totally with the head of the Business, Innovation and Skills Committee, the hon. Member for West Bromwich West (Mr Bailey). The current Government have put trade on the front foot and are investing heavily in it from the highest level. One of the biggest indicators, and perhaps the Minister will confirm that my understanding is correct, is that every Minister who goes abroad now has a ledger on how much trade is being done between Britain and the overseas country. That is a great improvement and allows a focus on trade during every ministerial visit. However, the comments that I make today will focus on UKTI.
I represent a north Yorkshire seat, where the UKTI offer has been very good. There is a very good gentleman sitting in Leeds called Mark Robson. I pay tribute to him and his team. The tie-ups that that part of UKTI has with industry groups in health care and other areas seem to be extremely good. That combination of utilising outside bodies with UKTI employees works well.
However, when I was reading the corporate plan for UKTI, I was shocked to see no mention of people and a people strategy—a human resources strategy. I have been a Member of Parliament for two years, having come from an international business, and I believe that there is a crisis in Whitehall because of the lack of commercial experience. We will see that increasingly across a number of areas, but UKTI is at the forefront of the crisis.
My first question to the Minister is this. Will he give the House his views on UKTI’s HR strategy? What can he do to impress on people the need for an HR strategy? In the short term, where will the 100 or 120 trade advisers who are being recruited come from? What are their backgrounds? How is that recruitment taking place? How much are we paying them? Are we paying them enough? We need to pay a good market rate to get private sector expertise. How do we bring in private sector talent?
That leads me to the question of culture, which hon. Members have discussed. Having read the strategy document and spoken to delegations from UKTI senior management when they visited the House, my biggest concern is the lack of a sales culture in UKTI. We have talked about how we could monitor UKTI better, with better metrics, the National Audit Office and so on, but I am not sure whether things need to be that sophisticated. The things I am interested in that were not in the annual report are simple. How many trade visits were made in, for example, China by UKTI executives? How many corporate plans in Brazilian states and provinces are being tracked? How many hits has the UKTI website had? It is simple stuff, but we need to look at the data in UKTI literature and put some pressure on. There is no net assessment of how many new inward investment projects, businesses and employment opportunities there are versus what goes out. All the talk is about what comes in, with no assessment of what the net numbers are, so my second question is this. How do we improve the sales culture of UKTI?
The issue of sales leads me to communication. The initiative of using Ministers seems to be working really well. It got a bit of stick in the press last year, but I understand that most FTSE 100 companies now have a senior Minister as a relationship manager. However, I am not sure whether the complaints from the retail and financial service sectors have been addressed, because they were missed out of the pilot exercise. I am keen to hear whether those two vital sectors have now been included.
Let us consider how we can expand the pilot scheme to include more companies. The focus on mid-sector companies that was announced last December by Mr Baird looks positive, and I am sure that it will bear a great deal of fruit. As co-chair of the all-party parliamentary group on micro businesses, I believe that we need to communicate better with the smallest companies in our economy. I agree that there is a role for MPs, but it worries me that that should be the only route into such companies. We have another route that we do not use and that is through the Treasury and HMRC. All the bits of paper that companies get from the Government about tax, pay-as-you-earn and other such matters could be used. Advertisements could be printed on the back, sign-posting people to the work of UKTI. I will continue to ask the Chancellor to open up HMRC.
Finally, we need some honesty from UKTI about what it is doing and where the gaps are. A number of my hon. Friends had a meeting with the Chinese ambassador recently, and he said that when he was running a province in China, he was surprised that he never saw a representative from Britain at the local trade fair; there was always one from Germany and sometimes one from France. In China, there are more than 30 provinces. As I understand it, we cover only a fraction of them, and it would be helpful if we, as parliamentarians, could understand where the gaps are so that we could raise questions with Government, such as, “Do we need further investment? How can we get private sector involvement to fund more work?” The annual report did not go into that, so I encourage UKTI to be brutally honest with us.
I urge the excellent Minister of State to press on UKTI my concerns relating to communication, people, culture and brutal honesty.
Nick de Bois (Enfield North) (Con)
It is a delight to serve under your chairmanship, Mr Amess. Although I had not planned to speak, I have been inspired to make a few comments on a subject that is dear to me. I first came into contact with UKTI, or whatever it was called then, in my first six months of starting a business in 1988 or 1989—it was so long ago, I can barely remember. I approached it with some enthusiasm because I wanted to export and I did not know where to go. I am afraid that UKTI is in part responsible for me ending up in politics. [Interruption.] The hon. Member for Hartlepool (Mr Wright) is allowed to groan, but they should not be doing it on the Government Benches.
It was with immense frustration that I realised that what was on offer was inadequate and ill-informed. Despite the attractive rhetoric at the time, the Government—I fully confess it was a Conservative Government—did not have much of a handle on how to help businesses grow and export. I resolved that one day I would be in a position to do something about that. Although I am not in that position, I hope that I can influence thinking.
I am not here to join the list of people who are criticising UKTI; actually the concept of it is sound but the implementation could be better. The CBI report in 2011, which looked back over the previous decade—I will try to resist making any political points—rightly acknowledged that the UKTI had what can only be called the Marmite effect on many businesses. It was a love or hate situation. Some experiences were absolutely marvellous and terrific and others were not. I am sure that organisation and administration had something to do with it, but in the end, as everyone says, it comes down to people and how motivated and how good they are at their jobs.
There are two issues: the short term and the strategic. In a couple of interventions, I touched on the strategic. I am afraid that we have missed the boat on the BRIC nations. Yes, there are short-term opportunities, but we should have been building relationships a long time ago. We could have done that at Government and at business level. I am not sure whether Members are aware that we still do not have a direct route from London to Brasilia. That is not how we should behave if we want to establish ourselves with future growing economies. I hope that a strategy in that area will evolve and that UKTI, along with the Government, will play a leading role in helping us to engage with the N11 countries.
The report “Britain open for business”, which I commend to Members, talks about some of the future target countries. It lists only six of the N11 countries. I am a little bemused by that. There may be good reasons, but why did it pick only those six as future target countries?
For the next 10 years, average growth in the eurozone will be pretty awful. The average growth for Germany is forecast at 1.4%, which does not make it a good place to invest money or to solicit sales. It is natural and right to look elsewhere. We have touched on many of the relationships that we have through diaspora or for historical and strategic reasons. I will be blunt; they love us in Kuwait. We came to its aid 20 years ago when we helped to liberate it from Iraq.
There are reasons why countries have an affection for us and wish to work with us, and they go right back to before the Commonwealth. However, it is not just a question of saying, “Oh, let’s go and work with those countries.” We must look for where the growth is. We have already heard about India’s phenomenal growth and the shocking fact that we have such a small slice of it. Closer to home, we are one of the few countries that is supporting Turkey’s membership of the EU. Turkey’s growth currently stands at 8.9%. The UK is behind Italy and France. As Members will understand, with my name, I am utterly qualified to comment on the French without any fear of kickback. France’s growth stands at 1.6%, Spain’s at 1.9% and Britain’s at 1.2%. It is a ludicrous situation. Government cannot do everything, but they can act as a facilitator.
If we look at areas outside the eurozone, and match them with our historical links, the links that I have raised and where there is growth, we start to see the basis of a strategy through which we could reach out and seek future growth. Indeed, many of the countries that I am talking about are in the Commonwealth. I am not ashamed to admit that. In fact, I can think of no greater legacy in this diamond jubilee year than for the Prime Minister to make a formal, public, demonstrable commitment to boosting trade with the Commonwealth. What greater legacy could Her Majesty the Queen ask for? Let me remind hon. Members that we are talking about a common wealth, which was the foundation of the Commonwealth. There is no reason why we should overlook it now. Forgive me, if that sounds a little traditionalist, but it is probably also practical and something that we should seriously consider as an acknowledged strategy.
Looking well outside the Commonwealth, UKTI could quite reasonably look at the Gulf countries, for example. There was a time, when “Cool Britannia” was all the rage, that we overlooked many of the former colonies, for fear of not being very “Cool Britannia”, but I regret that decision. I was on a trade delegation to Kuwait and Members will be surprised—I do not know for certain, but perhaps Opposition Members will be quite delighted—that 90% of Kuwait’s economy is in state ownership. That is an unsustainable position for Kuwait. There is growth in Kuwait, mainly because of the very high price of oil at the moment, but Kuwaitis know that a programme of privatisation is absolutely essential to their future. Who better than this country, which led the way in turning the heavy hand of state corporations into successful and profitable private organisations, to help Kuwait with that programme? We now have to work hard to rebuild that relationship and position ourselves to be ready to do business with Kuwait, which will help our exports.
Once it has evolved its strategy, UKTI can play a significant role in that process. Let me try to explain why from the point of view of a potential exporter; I was a potential exporter and I am sure that many others in the House were too. Exporting is a journey fraught with difficulties. It makes the Cheltenham Gold Cup hurdle look remarkably easy—if horses go over hurdles at Cheltenham. I am not a horse racer, so I do not know, but it seems a reasonably good analogy. Measuring risk against return in exporting, there is high risk for potentially satisfactory or good return. Patience is a prerequisite, but there are so many hurdles to exporting that many people who start with the right intentions find it all too easy to pull out or fail before they have made any substantive progress. UKTI’s work could be a very effective way of holding the hand of some of those early exporters as they go through the trials and tribulations of exporting. I know, because I failed at exporting. I have no problem admitting it, because that failure eventually led me to learn from those lessons and to succeed, both in north American markets and in some of the markets that we have discussed today; but it was a very difficult journey.
Where UKTI could help to fill the gap is both on a practical level and an advice level, but we need to do more. We have already acknowledged the need to build—on a regular basis—our relationships with Governments, agencies, finance houses and companies themselves. UKTI can help to do that, but it needs to do it with a little more power and oomph to its elbow, taking the companies with it. There is a role for UKTI in that process.
My next point is that we need to ensure that we can work with trade bodies here in the UK, by proactively going to them rather than waiting for them to come to us. First, we must have matched British industries with markets in the growth countries and then put the case to them why they should export to those countries. There is practical help that we can offer British companies via UKTI, and we must persuade them about—indeed, sell them on—the merits of exports.
We must also offer companies practical ways to break down the barriers to exports. Many of those barriers are financial. For example, how does a company even open a bank account in some countries? We can help with that and other things, through to delivering companies the contacts in the first place that will allow them to go on and build a sustainable relationship. The job is as much about selling in Britain as it is about opening doors overseas. It is not rocket science to say that that is what we need to do.
I echo the call of my hon. Friend the Member for Witham (Priti Patel): parliamentarians—I choose that word carefully—can play an active role in that process. Parliamentarians from both Houses can do that; there are skill sets everywhere. Let me for a moment shower praise on Baroness Morris of Bolton, who I joined on a trip to Kuwait. In that part of the Gulf region, a baroness or a baronet—I am afraid that I do not know all the proper titles—is one of the most respected positions. I was walking behind Baroness Morris, having got out of the second car that had picked us up from the airport; the hotel manager and the director met us at the hotel door and I followed them in. I hasten to add at this point that I was carrying my own bags. When I got to the lifts, I was promptly shown into a different lift from the one that Baroness Morris was being escorted into. I had no problem with that, but it taught me a lesson. In different parts of the world, our parliamentarians are respected and valued; sad to say, they may be more respected and valued than they are in parts of this country. We should use their talents, whereby they are consistently able to build relationships, and consistently use—frankly, let us say what it is—the power of office and patronage to help practically in opening the doors and driving our business.Above all else, if we match not only the titles but the talent, skill and expertise of our parliamentarians with the abilities of UKTI, we can make a practical demonstration of effective support from Government to meet the real needs of business.
Mr Iain Wright (Hartlepool) (Lab)
Mr Amess, what a pleasure it is to serve under your chairmanship today, and may I also wish you a very happy 60th birthday in 11 days’ time?
Mr Wright
It is impossible that Mr Amess is 60.
I must however add a sour note, Mr Amess, that is directed at your good self. I attended business questions in the main Chamber today and I heard you say to the Leader of the House that Southend is the best seaside resort in the country, if not the world. I have to correct you and say that Hartlepool and Seaton Carew is actually the best seaside resort anywhere in the country.
This has been a great debate, and an important and interesting one. I congratulate the hon. Member for South Thanet (Laura Sandys) and my hon. Friend the Member for Brent North (Barry Gardiner) on securing such a significant and timely debate.
In many respects, I am very optimistic about Britain’s prospects in the next half-century. We have innovative, dynamic, competitive companies in sectors from which the world wants to buy goods and services, and in which we are world class. We have a tradition of open, fair and global trading, which we need to exploit a lot more, and the world economy will double by the year 2050. The rate of growth throughout the world in the next decade will be about 4% to 5%––much higher than in the last 30 years. We need to exploit that to Britain’s competitive advantage as much as possible.
I mentioned this point in a previous debate, but it is worth repeating; indeed, the hon. Member for South Thanet referred to it earlier: there is a ferociously competitive global economy out there. British firms must be as nimble as possible, but my additional point is that there is a premium for coming first in the 21st-century economy, and we need to ensure that Britain and British companies go first into the new and emerging markets.
Let me quote from the CBI’s excellent report, “Winning overseas”, which says:
“We are not alone in seeking growth through exports – other advanced economies are facing similar constraints and are looking to boost their export performance. We cannot spend another decade simply playing catch-up: we need to be bigger and bolder in our ambitions.”
The report concludes by stating, very starkly:
“We are not being ambitious enough with our choice of markets and our decline in goods exports is unsustainable if we want to lead an export-orientated economic recovery.”
Exporting is incredibly important to the British economy, and not just in the simplistic and obvious sense that it generates revenue for our country, allowing us to pay our way in the world. All the evidence suggests that firms that export and that attract inward investment stimulate better research and development, productivity, innovation and hence competitiveness. The efficiency of our wider economy improves through exposure to new ideas and different ways of doing business. A paper from the Department for Business, Innovation and Skills itself, entitled “International Trade and Investment - the Economic Rationale for Government Support”, states:
“export support is a highly cost effective means of generating additional business R&D, enabling firms to increase internal resources available for such investment, as a by-product of successfully helping them to gain access to new markets.”
It is clear that public money invested in export expansion and support reaps huge dividends for the businesses of this country, and it also improves the ongoing competitiveness and prosperity of our country. The CBI—I quote it again—states quite directly the challenge to us in this House as policy makers:
“Be clear about what the UK is trying to achieve and where its strengths lie in order to help UK business in the global marketplace. The UK must develop a strong brand that our exporters can leverage to their own advantage.”
I think that we would all agree with regard to that.
I am optimistic about the growing alignment between areas of UK competitive advantage and demand from emerging markets in the next decade or so. We have the rise of the global middle class, with about 1.8 billion middle-class people in the world. In the next few years, that is estimated to grow by 5 billion, so we are going to have a huge increase in people with more disposable income wanting to buy British goods and services. That will provide enormous opportunities for the UK in some of our real strengths: premium brand automotives, financial services, IT, pharmaceuticals, chemicals, creative industries and higher education.
I am optimistic, but we face challenges. It has been mentioned that we often have cultural and structural barriers to companies expanding their exports, or even starting to export in the first place. In terms of our cultural barriers, too many of our firms simply do not export. The key task of UKTI is to break down those cultural barriers as much as possible and identify the companies that could make a real success in exporting.
We export to a limited field of slow or no-growth countries. That point has been made by the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) and others. Some 65% to 70% of our exports go to the United States and the European Union. We need to ensure that the strategic focus of UKTI switches to high growth and emerging economies. The hon. Member for Enfield North (Nick de Bois) was firm about making sure that we were at the forefront of N11 economies—the next 11 high growth economies.
There is a cultural barrier. How on earth does a firm in Hartlepool or elsewhere, with no culture or experience in exporting whatever, get into the business of exploiting foreign opportunities? As the CBI states, getting a swimmer to attempt a different stroke is much easier than getting them into the pool in the first place. Firms happen to chance upon exporting opportunities, rather than making a determined effort. We heard about the micro-brewery that the hon. Member for South Thanet mentioned. It is right that the Government have an objective to double trade by 2015 with Brazil, China, Colombia, Egypt, India, Indonesia, Malaysia, Mexico, Qatar, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan, Thailand, Turkey, the UAE and Vietnam. As the CBI says:
“It is clear that the UK needs to re-orientate its trade towards high-growth markets in order to boost its performance.”
Those countries are where the high growth, emerging opportunities will arise.
Geoffrey Clifton-Brown
I am sorry to labour the point, but the list that the hon. Gentleman has just read out did not include a single west African country. Some of the west African countries that I cited will have much higher growth rates than some of the countries that he mentioned. We must not neglect the countries of west Africa. Many of them are members of the Commonwealth. They are friends.
Mr Wright
The hon. Gentleman makes a fair point. UKTI needs to look closely at where those high growth opportunities will be and ensure that, because of possible historical links, we exploit those opportunities first. I tabled a written question about how we are to double trade and what targets are in place. As my hon. Friend the Member for Brent North said—perhaps the Minister will comment on this—there are no stated bilateral trade targets for Egypt, South Korea, Bangladesh, Indonesia or the Philippines. The Minister said that UKTI provides a degree of service for UK companies seeking to do business, but that is not good enough. We need to be much more focused and determined to ensure that British firms can sell their goods and services in the areas that are going to grow the global economy in the next half century. We need a framework in place to allow that to happen.
I became interested in the course of the debate about where UKTI, with finite resources, should be concentrating those resources. The hon. Member for South Thanet and others mentioned the need to focus on small firms and make sure that we get in at the beginning to ensure that we can benefit and help to shape and mould their ambitions for exporting opportunities as they grow. I keep mentioning the CBI, because its report is excellent. The CBI states that UKTI could perhaps be more effective if it focused on mid-sized companies with real potential for high growth. They may already be exporting, but they require assistance to break into new markets.
I am interested in what the Minister has to say about what we need to do to identify, embrace and nurture medium-sized enterprises—those companies with a turnover of about £10 million to £100 million, with up to 500 employees, and, as I said, real potential for high growth.
Julian Smith
I had a micro-enterprise that traded here and had a subsidiary in Singapore. We delivered within two years hundreds of thousands of pounds of tax revenue back to the UK. Please do not underestimate the power of the 4.5 million micro-enterprises to deliver tax revenue as part of the export drive that the Government are undertaking.
Mr Wright
I certainly bow to the hon. Gentleman’s superior experience, but my point is that, with finite and reducing resources, it is absolutely essential—I will come on to this—that today’s debate is about the effectiveness of UKTI. Where do we get the biggest bang for the taxpayers’ buck? Is it from small enterprises or more medium-sized enterprises that have got opportunities for export and growth? Where will we get the best return for the British taxpayer and hence future prosperity and growth?
Laura Sandys
In a strange way, what we need are different strategies for different size companies. That is what it boils down to. It is not an either/or. We might be focusing too much on a certain sort of service to very small companies that is more suitable to a medium-sized company. That is why I proposed looking at translating websites or aggregating certain sectors and being able to present them, which does not cost that small business either time or money.
Mr Wright
That is an important point. I am interested in looking at where we can gain knowledge and experience from other successful exporting nations. I look to Germany, although we cannot replicate Germany in the UK. It would be wrong to suggest that we can. However, a successful ingredient of the German economy, with its emphasis on manufacturing and engineering, on the long term, on worker and management co-operation and on good regional financial opportunities, is the Mittelstand, the medium-sized companies often seen as Germany’s economic backbone. It is interesting to see what they have. They have a relentless focus on export markets, often in global niche markets, allied to close relationships with their supply chains, as the hon. Member for Gloucester (Richard Graham) mentioned, and distribution networks. Will the Minister tell us what steps UKTI has taken to embrace mid-sized companies? How often have mid-sized companies been taken on trade delegations?
Mr Adrian Bailey
One of the points made in the CBI report was that more needed to be done for medium-sized businesses that are exporting at the moment to find a wider range of export opportunities. I hope that the Minister will respond to that as well.
Mr Wright
The Chair of the Select Committee is right.
UKTI is suggesting new products: the “passport to export” for new-to-export companies, and the “gateway to global growth”, aimed at helping established exporters tap into new markets. This seems to be a good approach that has the support of the wider business community, but I want to press the Minister on the benchmarks for success. What are they? What progress has been made and how many companies have benefited from those two new products?
That leads me to the strategic document that UKTI published a year or so ago, “Britain Open for Business”. The strategic approach that it suggests—expanding exports by securing new businesses overseas, especially through increasing exports to high growth and emerging markets—seems appropriate, given what hon. Members have said today. We also welcome the sectors that the strategy identifies in which Britain has a competitive advantage and from which we could derive greater growth in exports in the next few years.
There can be a greater link-up between industrial and trade strategy. “Britain Open for Business” hints tantalisingly at that, but more can be done. The document is light on detail, which in many respects is understandable, given that it is a high-level strategic document. However, it does not set out very clearly what actions UKTI will take and how success based upon outcomes will be measured.
On that basis, may I ask the Minister a few questions about some of the tasks and actions that “Britain Open for Business” pledges? UKTI states that it will bring more private sector expertise into the strategic relationship management of major exporters and inward investors. That important point has been mentioned a number of times by hon. Members. Will the Minister update hon. Members on how that is progressing? Will he specifically outline how private sector expertise with that commercial know-how is being brought into the business?
Similarly, UKTI strategy has stated that a new private sector delivery partner operating in England outside London will be tasked with bringing in high-quality inward investment projects. Will the Minister say what the latest is on that and what progress has been made? UKTI has also pledged to develop new partnerships with key businesses that support SMEs, trying to tap into their networks to raise awareness of the benefits of exports. Time and again today we have heard about the huge importance of the chambers of commerce and about the excellence that sector-led trade associations can provide in batting for British companies outside the UK. What is being done to exploit that great expertise more? How will that be evaluated, and what progress is being made?
UKTI has pledged to create a new online self-help community for UK SME exporters to provide business-to-business support, advice and mentoring. Again, will the Minister update hon. Members on that? With regards to the document, will the Minister tell us about the high value opportunities programme? How successful has that been and can he identify specific export opportunities that have been realised as a direct result of that initiative?
Let me turn to the cuts, which have been mentioned a number of times, not least by the Chair of the Select Committee. UKTI faces a cut of around 17% over the next few years. In contrast, its French equivalent has had an increase in its budget of 14.2% in 2011 to €105 million. Germany Trade and Invest had a budget increase of 10%.
Nick de Bois
I suppose it is inevitable that we must go down that route a bit, but does the hon. Gentleman agree that, considering the funding that was in place before the previous election and the rather dismal figures we have been reviewing during the debate, money is not the answer to everything? It is how that money is used and how effectively one works with other businesses that is important.
Mr Wright
Effectiveness is at the heart of the debate. I made that point in response to the hon. Member for Skipton and Ripon (Julian Smith). I want to see as big a bang for the UK taxpayers’ buck as possible. How we go about doing that is important.
I was coming on to the figures regarding what rate of return we get for taxpayers’ investment. I think that my hon. Friend the Member for Brent North disputes these figures, but they are a good starting point. For every pound that UKTI spends on export promotion, the British economy and firms generate an additional £22 profit. That is an astonishing figure and a huge ratio. It is difficult to think of a comparable direct example in which Government investment and active involvement could produce such a return. When we factor in the law of diminishing returns and state that—plucking something from the air—every pound that UKTI spends will provide half that current return, on my rough calculation and even according to a conservative estimate, based on the UKTI’s current £333 million budget, this country’s businesses stand to lose well over half a billion pounds in additional profit. With the economy flatlining and unemployment rising, is that appropriate? Should we not be trying to invest more in UKTI?
As I tried to say in response to the hon. Member for Enfield North, every pound spent needs to be focused diligently on proactively seeking out firms with great potential for export capability in high-growth areas. As many hon. Members have said, that means being proactive and having a UKTI presence alongside Foreign Office staff in those emerging markets to advise companies of the ways in which to do business in that particular nation.
That does not necessarily solely mean advertising that the UKTI posts on Twitter and Facebook, and that companies have access to online materials. Certainly, the use of online materials—the internet and social media—is important. However, to use them at the expense of the face-to-face establishment of relationships, will not be an effective use of public money. To some extent, I saw that when I was a shadow Education Minister and the Government ended face-to-face careers guidance for young people. Web-based initiatives—the notion that someone says, “There’s a computer there with the internet on it. Just have a look and see what jobs you might be interested in”—are not an effective use of public money. Web-based media may be part of a complementary blend of materials, but they cannot be the full answer. I worry that, in tightening financial circumstances, people will rely on Twitter and Facebook too much.
People have mentioned the scrapping of the RDAs. That abolition of regional government architecture has not helped matters. LEPs are still in their infancy. We hope that they are a success, but we are missing valuable time. The world is moving on and it will not wait for us. We need to ensure that we are at the vanguard of this competitive environment. If structures are altered domestically, we will be penalised internationally.
I want to finish by making a number of points, one of which is about access to finance. Will the Minister update hon. Members on the progress made with the actions outlined in “The Plan for Growth” published almost a year ago? I put that question to the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for North Norfolk (Norman Lamb), in the debate on British exports and trade a week or so ago, but he did not have time to answer it. How many SMEs have been helped as part of UKTI’s passport to export initiative? In “The Plan for Growth” the Government launched the export enterprise finance guarantee, which provides guarantees for lenders to facilitate the provision of short-term finance lines for export. How many firms have taken advantage of that?
The plan produced three new products designed to mitigate the risks for exporters and potential exporters. I understand that the bond support product was operational from April, so we have had almost a year of it. Will the Minister state how successful he thinks that has been in freeing up exporters’ working capital and how many firms have taken advantage of it?
I want to finish on the point about us having a sustained approach to trade investment and political lobbying. “Britain Open for Business” states:
“Government Ministers will also systematically lobby for UK commercial interests on all overseas visits and in meetings with their counterparts in other governments.”
That is welcome, but the point has been made time and again that every single Minister with a red box should be charged with selling Britain overseas. They should be making sure that they are trade ambassadors. To widen that point, we are missing the trick that hon. Members have huge influence in their constituencies. As mentioned, we are missing brokering opportunities overseas.
Geoffrey Clifton-Brown
By far the largest number of people who travel abroad at the taxpayer’s expense are civil servants and local government officials. A diktat should go down to every single one of them that they should be trade ambassadors for this country when they go abroad at the taxpayer’s expense.
Mr Wright
I agree. A lot of the work will be done by civil servants, but politicians and leaders of Government are very important. The CBI report states that improvements have been made with regards to political lobbying, but that we have seen the cancellation of trade delegations at very short notice. In contrast, it mentions France, where around 200 high-level trade missions that are focused on 20 primarily high-growth countries are co-ordinated annually with senior politicians. They are well publicised in advance. As a result, in November 2010, a visit to China led by President Sarkozy secured €15 billion in new deals for France.
I think the Prime Minister is still in America. I have noticed that a lot of the talk has been about Afghanistan, Iraq, extradition and basketball—quite rightly, given the circumstances of the past few days. Trade should also have been an important topic. I had a look at the No. 10 website this morning, where the Prime Minister said:
“Barack and I have agreed to prioritise work ahead of the G8 on liberalising transatlantic trade and investment flows.”
However, did the Prime Minister take our business leaders to the White House in his visit to America? Have we won any new deals in the world’s largest economy as a result of what the Prime Minister has done this week? I certainly think he should have done. If he has not, I would respectfully suggest that he has missed a trick, and it shows the culture that needs to be altered in Whitehall.
David Rutley (Macclesfield) (Con)
The hon. Gentleman may have missed press reports last night that said that there was a banquet at the White House in which Sir Richard Branson and other British business leaders were in attendance. That dimension has, to a large extent, been covered.
Mr Wright
I certainly saw reports about Sir Richard Branson being at the event along with George Clooney. My point is this: when the Prime Minister, the leader of our Government, goes out on state visits, what is he doing to win trade for Britain? What is he going to come back with? It is important that he takes a delegation of business leaders and wins awards and contracts for Britain.
Julian Smith
This Prime Minister has done more on UK trade trips than any other Prime Minister in recent history. He has been to Brazil, China and India, and the Foreign Secretary has been on a trade mission to Australia. This Government’s track record on the matter is exemplary.
Mr Wright
I understand the hon. Gentleman’s point. I know that there was a high-level and high-profile delegation to India just after the Prime Minister assumed office, but one-offs and PR stunts are not going to win business for Britain. The effort needs be sustained, co-ordinated and done at the highest possible level over a long time.
I am excited about the opportunities that British companies—dynamic, innovative and competitive as they are—have in the competitive, 21st-century global economy. We will miss a trick if we do not have a sense of urgency and determination in ensuring that we grow our businesses in the export markets. I hope the Minister will have a greater sense of urgency and determination to ensure that British goods and services are sold around the world, thereby providing us with greater wealth and prosperity.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
Mr Amess, you are managing to overcome a difficult health condition, and we appreciate that. We are delighted to be under your guidance.
This debate has been informed and cosmopolitan. I take it on the basis of constructive criticism; that is how things should be. There has been an element of entente cordiale, certainly between one or two hon. Members present. It is refreshing to have had people who have been in business and who have been part of chambers. My hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) and I worked on the issue in opposition, and he brings his own business experience to the area. My hon. Friend the Member for South Thanet (Laura Sandys), whom I congratulate on securing this debate, also has her own expertise in the field, which was notable in her remarks. I will come on to some of them in a second. A number of other colleagues, to whom I will refer as I try to respond to the points raised, have shown both interest in and knowledge about the subject.
It is rather peculiar, as was highlighted by several hon. Members, that there was no debate at all in the previous Parliament. That is to be regretted. While my diary secretary will perhaps not want me to encourage too many such debates on a regular basis on behalf of the trade Minister, it has been demonstrated that this House has an important and positive contribution to make to an important part of our economy.
I am not the Minister responsible for trade, but I want to respond to a number of key points that have been raised, and I will personally ensure that the chief executive of UKTI will pick up on the specific points raised, and I will have a conversation with the noble Lord Green. I know that he takes such matters seriously, and I want to ensure that, while he is unable to be present, he can pick up the flavour and character of the comments, particularly those regarding the involvement of MPs, which several people have talked about. They are absolutely right, and I will address those points under the heading of the national export challenge. My hon. Friend the Member for Witham (Priti Patel) highlighted the need for MPs to engage positively, to be close to the business community in their area, district and chamber, and to be a good conduit. That is an important point. It alludes, in many ways, to the point that I will come on to about the broader role of chambers, which I know is of special interest to my noble Friend—sorry, my hon. Friend—the Member for The Cotswolds. [Laughter.] It has been a long afternoon. I anticipate such matters. Perhaps I should say “senator” in due course.
The Government have made it clear ever since the election that we have to rebalance the economy. Members have rightly pointed out that we cannot have an effective trade and investment organisation if we do not have the right balance in the economy. We have seen an improvement—20% year on year now—in car production in previous months, which demonstrates that if we get the overall investment and balance of the economy right, it will start to feed through into good trade figures. That is an important aspect. If we are to have sustainable growth, we need to rebalance the economy; it needs to be broader and more resilient. That will draw through on international trade and investment.
As Members have rightly said, we are a nation with a proud heritage of looking outwards to different markets and opportunities. It is vital that we rebuild our export capability and ensure that by improving the business environment here at home, whether through reforming the tax system, getting a skilled work force in, strengthening the role of innovation or cutting red tape, we not only enable our businesses to export but make Britain a far more attractive location for those who are looking for a place to invest. It is a virtuous circle in that regard, and an important one that we need to reflect on.
Hon. Members are right to say that there are good parts in the current situation and there are challenges. Companies in this country have to win new business—I will come on to markets in a moment—and to ensure that we get more businesses engaged in that process. It is worrying how small, compared with the German Mittelstand and other countries, is the proportion of small businesses that engage in export markets. As a number of hon. Members, particularly the hon. Member for Brent North (Barry Gardiner) and my hon. Friend the Member for The Cotswolds, said, we need to start to change the culture. It is not just about going to the traditional markets that we have always gone to in the past 10 or 20 years. We have to go to the fast-growing markets, not just in the east but in the south of the global economy—I can say that from our point on the globe. We have tended to overlook Africa. The Chinese have not been so short-sighted; they have always had a canny process about it. It is therefore important that we think beyond traditional trading partners.
In a sense, that returns me to the point about the use of the diaspora in this country, which was excellently made by the hon. Member for Brent North and my hon. Friend the Member for Enfield North (Nick de Bois). Those communities are here, and it is right to raise the question about how Whitehall, not just UKTI, engages those communities to strengthen our cultural and economic ties abroad, so that we make the best use of all the talent in our country. There is a big issue regarding what Whitehall does and how that works. Certainly, to someone who is a relative newcomer to Whitehall, that is important.
Barry Gardiner
I am grateful to the Minister for the way in which he is taking on board and synthesising the constructive criticisms that have been made.
Does the Minister agree that in taking groups of people out from this country, it is important that we take a complete supply chain to the prospective client country? Instead of simply taking out individual companies, we should look to put together supply chains that can meet the infrastructural, other developmental and business needs of that country, and show that within the UK, we can manage an entire supply chain for it.
Mr Prisk
Absolutely. One of the key elements of the Automotive Council road map we developed is demonstrating the depth, but also the gaps, in the supply chain, and our ability to recruit substantial prime investment. We are all familiar with the good news across the automotive sector. Part of the issue is then about how to strengthen tier 2, tier 3 and so on. That is why, when I go to the Paris motor show or the Berlin air show—as jolly and entertaining as it may sound to those who do not go, it is a very carefully worked programme—I talk to the key tier 2s and tier 3s, making it clear to them that not only do we have good indigenous businesses but we have growing markets for the components they generate, in which they may wish to invest. That supply chain thinking is very important.
Mr Iain Wright
Will the Minister answer the question that I asked him during Business, Innovation and Skills questions this morning? Five months after the launch of the advanced manufacturing supply chain initiative, no firms have been helped because it is not yet fully formed. I talked about a sense of urgency and that is a good example. Can the Minister get a wriggle on, and make sure that firms benefit as quickly as possible?
Mr Prisk
I am not quite sure about the manoeuvre the hon. Gentleman described, or how graceful it would be. What I can say is that there was a discussion on whether Birmingham city council should lead in this field, as part of the LEP. That delayed it by six or eight weeks. We wanted to ensure that we did not just do something from Whitehall and ignore that local expertise. It has now agreed to take on a core of the initiative and will be able to mount something very shortly. There has been a little delay, which I think is rightly because the idea of the supply chain, particularly in the automotive industry, came from Birmingham. I did not want—I suspect that the Chair of the Select Committee, the hon. Member for West Bromwich West (Mr Bailey) would haul me over the coals if I did—to sweep past a really good west midlands proposal just to ensure that we delivered on a set time frame. We are about six to eight weeks behind where I would like us to be, but we will be in a position to develop it shortly. It is part of a bigger picture, which is a broader figure of approximately £125 million. The delivery of the automotive supply chain package is imminent, but the hon. Member for Hartlepool is right to make sure that we keep to a sensible time frame.
I am aware of time, and I must give my hon. Friend the Member for South Thanet time to respond before the debate ends. I will turn to how we measure effectiveness and then go on to some of the specific points that have been raised by right hon. and hon. Members.
It is fair to have balance, and, rightly, criticisms have been raised. That is fine—I take those criticisms as a constructive process. UKTI is a successful and often well regarded agency when compared with its competitors abroad. I use the word “competitors”, because that has to be the mindset of Ministers and Departments. In 2010, UKTI won the prize for the best trade promotion organisation in the developed world. However, as several hon. Members have pointed out, UKTI can only succeed when it works in a leadership role and works with others. That is a really important point that has come out of the debate.
My hon. Friend the Member for The Cotswolds mentioned chambers, which he has rightly championed for a long time. Chambers are a part of a number of private sector consortia that are delivering foreign direct investment. To confirm where and how at this point, they deliver for UKTI in the north-west, the west midlands, the south-west and, soon, in the north-east. The delivery partner that UKTI operates in the east midlands is in fact owned by the local chambers, which I think is good.
My hon. Friend has been a keen supporter of the Council of British Chambers of Commerce in Europe and has seen its work. A memorandum of understanding was signed just last month which will enable it to be part of the service delivery overseas. That is a very good way to move ahead. The idea that somehow the Government are all-seeing and all-powerful, and that any one agency has all the networks that we need to tap into, is mistaken—getting that breadth is important.
On how we measure the fitness or capability of the agency, the danger is that we will get into which survey says what and when it was cast. The hon. Member for Brent North flagged up the National Audit Office report. My understanding was that those were the 2009-10 survey figures. Clearly, we need to move ahead from them, but I understand the point he is making and I do not dismiss it. UKTI has tried to get an independent assessment of the people who use the service. What is their independent view of the quality of that service? Without going into great detail about how the survey is undertaken, the key point is to receive feedback on the satisfaction, or otherwise, of the service. What difference—this is important—has UKTI made to the company? In particular, what added value has it generated?
The figures up to 2011, if I can update the House, from the most recent study—clearly, the 2012 survey is in hand now—demonstrate that 70% of companies report significant business benefits. Some 75% of companies were satisfied or very satisfied with their overall experience with UKTI. I am not putting those figures on the record to say that we do not need to worry about the situation, even though a much smaller proportion, I think 7%, were dissatisfied or very dissatisfied with UKTI. In my book, that is useful and helpful, but we also need to listen to the experiences of real businesses, and today’s contributions have been very helpful. For example, my hon. Friend the Member for Stroud (Neil Carmichael) mentioned a couple of businesses—Tudor Rose was one, if I wrote that down correctly. Those are good stories, but we need to hear from hon. Members when there are weak stories. I am keen to find out where the weaknesses are. Sometimes the business itself might get the wrong end of the stick, but other times we need to make sure that we have that channel. I therefore encourage hon. Members to make sure that that is fed through to UKTI, because it is important.
On what we can do to change the strategy, structure, calibre and so on—good points raised by a number of hon. Members—Lord Green has set out an ambitious programme for increasing the number of small and medium-size enterprises that export. We want to get up to the European average of 25%. The proportion is below the European average, a point raised by several hon. Members. In practice, that means getting an extra 100,000 SMEs exporting by 2020—that is the benchmark. Lord Green and the new chief executive, Nick Baird, who came into office in September, have set about making important changes that respond to some of the specific points raised by a number of hon. Members.
My hon. Friend the Member for South Thanet is absolutely right about SMEs, particularly with regard to her micro argument. In an age when a start-up business on a laptop in a back bedroom has the capability of being a global business from day one—which was certainly not the case when I started my business, like my hon. Friend the Member for Enfield North, in 1989—we need to think about where Government intervention needs to sit in terms of quality, and, frankly, there are a lot of very good commercial services that the Government do not need to duplicate. That thinking is important and that is a good point, which I will flag up with Lord Green myself.
I have said that UKTI is making changes. What are they in practice? First, it is bringing in private sector expertise—this alludes particularly to the point made by my hon. Friend the Member for Skipton and Ripon (Julian Smith)—into the senior leadership of UKTI. As we have already heard, it has already outsourced the inward investment services, creating, through PA Consulting, a coherent investment service right across the English regions outside of London. Those teams have incentives built in to their contracts to bring new projects to our shores. In other words, it is moving towards being outcome based—if not as ideally as we would always have in the private sector, then much closer to that—rather than, necessarily, what I would describe as the conventional salaried model.
I would like to pick up on a couple of points that have been raised on the regional development agencies, UKTI and LEPs. One of my problems with the RDAs was that, when I went to Shanghai, I discovered that UKTI had its own operations running very positively, but there were eight separate independent trade organisations—all fully funded, all competing with each other, and all in Shanghai—from the eight RDAs outside London. To my mind, that was bonkers. There needs to be a clear, co-ordinated UK presence, while making sure that, within the UK, communication is strong. Removing the RDA layer—for many other reasons beyond this one—helps us to co-ordinate or focus the effort on UKTI—a single, clear UK message. Then what is needed is to ensure that there are proper links to the grass roots. That means working with the devolved Administrations and having a proper understanding with the LEPs in England. That is where we are. We have memorandums of understanding in place, which are crucial because they allow a strong UK voice. If Kent or Essex wish to do their own thing, that is fine, but let us co-ordinate and work together. That is an important shift.
Mr Prisk
We have wound them down, although they still operate in technical terms, as the hon. Gentleman knows, until 1 April. We have tried to wind the RDAs down while building the LEPs up. The key point is that, in trade terms, we have made sure that UKTI is in the saddle, rather than having nine horses running consecutively, if I can say that during Cheltenham week. That was the important point, because there was a danger.
A German business in Shanghai told me, “Look, I’m confused. Two agencies have come to me. One says they do wonderful things in Coventry, the other says they do wonderful things in Leicester. Frankly, I can’t spot the difference between the two. Why am I being sold competing bids?” That is a good point. Co-ordination is crucial.
The second change that Mr Baird and the noble Lord Green have made is that, from April, there will be incentivised contracts for the private sector to deliver trade support in the English regions. On the sales culture, which several hon. Members mentioned, those two things—getting private sector into the business and moving towards incentivised contracts —will make a significant difference.
Hon. Members raised a couple of broader issues about how we deal with trade as a Government. That is a good point. Right from the start, the Prime Minister made it clear that there would be a trade Minister, and we have an excellent trade Minister in Stephen Green. All of us must regard our role as part of the trade and investment portfolio. That is why more than 400 separate ministerial engagements have been undertaken by Ministers from all Departments—I have a feeling that that even extends to the Department for Work and Pensions—because it is important that, when we go abroad, we are part of a trade mission. That is my background and, I am happy to say, that of most of my ministerial colleagues.
That is why today, for example, the Prime Minister is in New York, having had his business dinner at the White House yesterday with UK and American businesses, building on those contacts—if that answers the hon. Gentleman’s question. That is why the Foreign Secretary said, right at the beginning of this Government, that we want to put commerce right at the heart of what the Foreign and Commonwealth Office does, in collaboration with BIS and others, including UKTI, because we need to change the culture that says that the diplomatic role does not sully its hands with the process of commerce. That is fundamental. We are, as I said at the beginning, a trading nation. It is in our blood. Therefore, getting that change is important.
On the calibre, selection and recruitment of individuals—I am married to a classicist, so I need to be careful about what I say next—we need to ensure that there is the broadest recruitment possible, which is why the private sector infusion is important. I am a great believer in a greater interplay between private and public, which is why, when I started in my role, I said to the team dealing with small businesses, for example, “Let us spend a working week in a small business.” Obviously, I had done it before professionally, but it was crucial for the civil servants to understand what it was to be in a commercial environment, especially in a small business, which does not only have to get the business, but has to do the business and fill in the VAT form on a Sunday afternoon, as I recall.
Hon. Members mentioned being more French. I put it that way because, as hon. Members have correctly put it, it is about moving away from Ministers only attending events to cut ribbons once the deal is done. If we do that, it is too late. I tried to get the point across during my few months covering this role at the beginning of the Government, before Stephen Green was able to join us—it was worth the wait to get the right calibre of individual—that it is no good Ministers rolling up when the deal is done; we have to be there building the relationship. That is what Business Buddies is all about. Part of my role is ensuring that I have an ongoing strong relationship with many major automotive businesses. That is fundamental. Such relationships are crucial because, as the French have learned and known for many years, the deal comes at the end of building such a relationship, not at the beginning. That is why the process, of which UKTI is a fundamental part, reaches across the whole of Government, ensuring that Ministers, from the Prime Minister downwards, are involved.
Let me wrap up, because the hon. Member for South Thanet needs to respond to the debate; that is the courtesy of this House. The noble Lord Green rightly said at the start—he is wise and right about this—that changing the way our trade balance operates is not a sprint but a marathon. That means, not that we want to ensure that we are going at a good pace but that, if we are to change the industrial strategy and the way we deliver inward investment and the operation and communication of exports, and so on, we must ensure that we get this right. It is true that, although there are strengths in the current system, we have inherited a number of weaknesses and we are trying to iron those out. Personally—this is also the view of my ministerial colleagues—I welcome constructive criticism and ideas and want to ensure that those will be fed through, both to the organisation and to the Minister responsible in the next few days.
Laura Sandys
I thank the Minister for a comprehensive response to many of the points that were made.
Along with my friend the hon. Member for Brent North, I feel that this has been a positive debate, contributing ideas and experience and setting the tone, hopefully, for a closer relationship between Members of Parliament and UKTI into the future. Hon. Members have made many varied points. A big issue mentioned by a lot of Conservative Members is the sales and marketing culture and engaging with UKTI and MPs, with our support. We must also be clear that UKTI cannot deliver economic growth itself: it is a facilitator. It is incumbent on all hon. Members to go back to our constituencies and talk about the opportunities, ensuring that we are making those connections work.
I should like to throw a couple of opportunities—not challenges—to the Minister and to UKTI. Can we make this the start of a dialogue and debate? It would be useful to have a round table that was a little bit more informal, talking about ideas and experiences and, perhaps, identifying certain key people who have had a previous history in certain markets. For me, it would be central Asia and the Caucasus, which does not appear on any list. It might be useful to have an all-party group considering such issues, advancing ideas and doing some comparison with Malaysia, Singapore, France, Germany and others, pulling together data and interrogating where other people are making successes—and celebrating our successes, too.
I hope that hon. Members feel that they have had the opportunity to put ideas on engaging with UKTI to the Minister. We must ensure that this is not the end but merely the start of building a longer-term relationship between this place and our external marketing and trade and inward investment.
Question put and agreed to.
Written Ministerial Statements
(12 years, 1 month ago)
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Employment Law Review
(12 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb)
The Government are today publishing a call for evidence on dealing with dismissal and on the concept of “compensated no-fault dismissal” for micro businesses. We are also publishing an update on the “Employment Law Review” and a refreshed “Employer’s Charter”. Copies of these documents will be laid in the Libraries of both Houses.
Through this call for evidence the Government are seeking to establish a strong evidence base to help inform our understanding of the current dismissal system. This includes gathering information on awareness and use of the Acas code of practice on discipline and grievance. In particular, we want to understand whether the code could be adapted to make it easier to use and more accessible to smaller businesses.
We are also seeking views on the idea of compensated no-fault dismissal for businesses with fewer than 10 employees and evidence on the potential impacts on employers, employees, and on the broader economy. Under such a system the employer would pay a set amount of compensation to the employee in dismissing the employee, but would not be required to go through a formal dismissal procedure.
Our objective is to strike the right balance between providing flexibility for the employer and ensuring protection for the employee. The Government want to hear the different views of employees, business organisations and all other interested parties in order to undertake a full analysis of the available evidence.
The “Employment Law Review” annual update outlines progress on this cross-Government review, and looks ahead at the forward programme. The review aims to reduce the employment law burdens on business to give them greater confidence to take on more staff and grow. The “Employer’s Charter”, first produced in January 2011, has been refreshed with further pointers on sickness absence and recruitment, in response to the recommendation in the independent review of sickness absence by Dame Carol Black and Sir David Frost. It is designed to dispel myths around employment law and, in particular, give clarity to employers about what they can already do to deal with staff issues in the workplace.
Competition Regime Reform
(12 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb)
I am pleased to announce publication later this morning of “Growth, Competition and the Competition Regime: Government Response to Consultation” which will detail the Government’s proposals for reform.
The Proposals
The UK competition regime is highly regarded internationally, but the Government believe that there is scope to improve the effectiveness of competition enforcement and streamline processes. The Government’s policy objectives for reform are to:
Improve the quality of decisions and strengthen the regime.
Support the competition authorities in taking forward the right cases.
Improve speed and predictability for business.
One of the Government’s key proposals is to create a single Competition and Markets Authority (CMA) by transferring the functions of the Competition Commission and the competition functions of the Office of Fair Trading to it. The Government have decided to give the new authority a primary duty to reflect the role the Government see for it in promoting effective competition in markets across the UK economy for the benefit of consumers.
The benefits of this will include:
Greater coherence in competition practice and a more streamlined approach in decision making, through strong oversight of the end-to-end case management process.
More flexibility in resource utilisation to address the most important competition problems of the day and better incentives to use anti-trust and markets tools to deal with competition problems.
Faster, less burdensome processes for business.
A single strong centre of competition expertise, which can provide leadership for the sector regulators on competition enforcement and a single authoritative voice for the UK internationally.
Increased accountability and transparency.
Additionally, the Government recognise and value the close relationship between competition problems and consumer activities in this context. The CMA will therefore have the power to tackle market conditions that make it difficult for consumers to exercise choice in an otherwise competitive market. The full scope of the CMA’s consumer functions will be set out when BIS publishes proposals for reform of the consumer landscape in the near future.
We aim to have the single CMA fully up and running by April 2014.
In addition to the creation of the CMA, the Government are proposing changes to the competition framework. Proposed changes include:
Embedding an enhanced administrative approach to antitrust enforcement, involving improvements to the speed of the process and project management, and the robustness of decision making, while addressing perceptions of confirmation bias.
Strengthening and streamlining the markets and mergers regime by, for example, reducing statutory time limits for market investigations from 24 months to 18 months and, for mergers, introducing statutory time limits and amending the process for undertakings in lieu (UIL) to make it more transparent.
Strengthening the primacy of general competition law, so that the sector regulators are required to consider whether the use of their antitrust powers is more appropriate before using their sectoral powers to promote competition.
The full list of proposals can be found in the consultation document copies of which will be placed in the Libraries of both Houses.
Rationale
The UK’s competition regime enjoys a strong reputation globally and our markets are rightly seen as open and fair. However, in any economy, anti-competitive practices and structures can develop which stifle innovation and growth, and which damage the interests of consumers. Where well-functioning competition exists companies have to become more efficient and innovative and find ways to offer consumers better quality and better value products and services.
Where anti-competitive behaviour exists, timely and effective enforcement is essential to identify and tackle it efficiently and to limit the detrimental effects that consumers may suffer as a result. The Government’s consultation highlighted some significant challenges to how the system in the UK works at present. One of the key issues is the length of time that is taken over cases. In particular, anti-trust enforcement takes too long, imposing very large costs and uncertainty on businesses.
Taken together, the Government’s proposals will deliver benefits both for businesses and consumers. They will support quicker conclusion of cases and faster implementation of remedies where instances of anti-competitive behaviour occur. They will deliver an increased deterrent effect and greater clarity and certainty for business.
In so doing, the proposals will impact positively on UK productivity and growth and contribute to the Government’s drive for more responsible capitalism.
EU Foreign Affairs Council (Trade Formation)
(12 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb)
The Trade Formation of the EU Foreign Affairs Council will meet in Brussels on Friday 16 March 2012. I will represent the UK for all the items on the agenda.
The first two substantive agenda items involve “legislative deliberations”. Following a presentation by the trade commissioner Karel De Gucht, Ministers will discuss the proposal for a regulation establishing transitional arrangements for bilateral investment agreements between member states and third countries. The second legislative deliberation will focus on the proposal for a regulation on the application of the generalised system of tariff preferences (GSP).
On the first legislative proposal, the UK position is to support the effort to reach an early agreement, while ensuring that the regulation is competence neutral. On the proposed GSP regulation, we would support the presidency compromise on the condition that suitable transitional arrangements are put in place for the upper middle income countries to be excluded from the reformed scheme.
There are three substantive “non-legislative” items. The first involve a discussion on the EU free trade agreement with Colombia and Peru, where Ministers will be invited to reach a political agreement on the agreement and its provisional application.
The second substantive non-legislative item is the EU—Singapore FTA negotiation. Here Ministers will discuss the state of play and next steps in the negotiation following a presentation by commissioner De Gucht.
There will then be a point on the Council conclusions on trade, growth and development. The presidency will invite Ministers to adopt the draft Council conclusions. The UK welcomes the conclusions and therefore we will support their adoption by the Council.
There are two AOB items, namely: EU-US trade and economic relations and the Anti-Counterfeiting Trade Agreement (ACTA). The UK is a strong advocate of ambitious trade and investment relations between the EU and the US. We will therefore be taking the lead in the discussion pushing for this objective.
Over lunch, there will be separate discussions on the scoping exercise for an EU-Japan FTA, trade liberalisation and green growth, and the state of play in the EU-India FTA negotiation. The UK strongly supports FTAs with India and Japan and there we will urge the Commission to keep up momentum in relation to these negotiations.
The Government’s main aims will be to:
Support the presidency compromise in relation to the legislative files on bilateral investment treaties and generalised system of preferences, while making sure that our interests are protected.
Support the Council decisions on signature and provisional application of the EU agreement with Colombia and Peru.
Reiterate support for a speedy and an ambitious deal in the EU-Singapore FTA, which includes securing market access for our financial services industry.
Welcome the Council conclusions on trade, growth and development, and support their adoption by the Council.
Reiterate support for strengthening trade and investment relations between the EU and the US.
Express strong support for FTAs with India and Japan and urge the Commission to keep up momentum in relation to these negotiations.
Handling Members’ Correspondence
(12 years, 1 month ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
I am today publishing a report on Departments’ and agencies’ performance on handling Members’ and peers’ correspondence during the calendar year 2011. Details are set out in the table below. Correspondence statistics for 2010 can be found on 28 March 2011, Official Report, 1WS.
Departmental figures are based on substantive replies unless otherwise indicated. The footnotes to the table provide general background information on how the figures have been compiled.
Correspondence from MPs/Peers to Ministers and Agency Chief Executives1 | 2011 | ||
|---|---|---|---|
Department or Agency | Target set for reply (working days) | Number of letter received | % of replies within target |
Attorney General’s Office | 20 | 318 | 92 |
Department for Business, Innovation and Skills | 15 | 14,857 | 82 |
- Companies House | 10 | 134 | 100 |
- Insolvency Service | 10 | 49 | 88 |
- Land Registry2 | 15 | 134 | 36 |
- Met Office | 10 | 14 | 83 |
- Skills Funding Agency | 10 | 240 | 85 |
Cabinet Office | 15 | 3,988 | 63 |
Charity Commission | 153 | 133 | 84 |
Department for Communities and Local Government4 | 10 | 12,680 | 65 |
- Planning Inspectorate | 7 | 399 | 95 |
Crown Prosecution Service | 20 | 411 | 97 |
Department for Culture, Media and Sport5 | 20 | 5,913 | 96 |
- Royal Parks | 10 | 28 | 100 |
Ministry of Defence | 15 | 6,315 | 81 |
- Service Personnel and Veterans Agency6 | 15 | 67 | 93 |
Department for Education7 | 15 | 18,666 | 39 |
Department of Energy and Climate Change | 15 | 7,560 | 82 |
Department for Environment, Food and Rural Affairs | 15 | 12,069 | 80 |
- Animal Health and Veterinary Laboratories Agency | 15 | 174 | 87 |
- Rural Payments Agency | 15 | 222 | 81 |
Food Standards Agency | |||
DH Ministers replies | 20 | 214 | 99 |
FSA Chair/CE replies | 20 | 121 | 89 |
Foreign and Commonwealth Office | 20 | 10,402 | 87 |
Department of Health | 20 | 18,686 | 99 |
- Medicines and Healthcare Products Regulatory Agency | 20 | 422 | 98 |
Home Office8 | 15 | 9,878 | 57 |
- Criminal Records Bureau | 15 | 727 | 97 |
- Identity and Passport Service | 10 | 1,206 | 81 |
- UK Border Agency | 20 | 48,712 | 90 |
Department for International Development | 15 | 3,894 | 97 |
Ministry of Justice | 15 | 8,608 | 70 |
- HM Courts Service and Tribunals Service | 15 | 846 | 86 |
- National Archive | 15 | 11 | 91 |
- National Offender Management Service | 15* 20** | 1,077 342 | 73 83 |
- Office of the Public Guardian | 15 | 198 | 95 |
- Official Solicitor and Public Trustee | 15 | 47 | 100 |
*Where Ministers replied | |||
**Where CEO replied | |||
Northern Ireland Office | 15 | 485 | 86 |
Office for Standards in Education, Children's Services and Schools | 15 | 136 | 90 |
Office of Fair Trading | 15 | 665 | 88 |
Office of Gas and Electricity Markets | 15 | 285 | 67 |
Office of the Leader of the House of Commons | 15 | 171 | 90 |
Office of the Leader of the House of Lords | 15 | 159 | 90 |
Office of Rail Regulation | 20 | 47 | 88 |
OFWAT (Water Services Regulation Authority) | 10 | 93 | 76 |
Scotland Office | 15 | 144 | 84 |
Serious Fraud Office | 20 | 30 | 83 |
Department for Transport | 15 | 11,766 | 519 |
- Driver Vehicle Licensing Agency | 7 | 1,549 | 99 |
- Driving Standards Agency | 10 | 103 | 98 |
- Highways Agency | 15 | 367 | 96 |
- Maritime and Coastguard Agency | 10 | 29 | 83 |
- Vehicle and Operator Services Agency | 10 | 84 | 93 |
HM Treasury | 15 | 14,453 | 62 |
- H M Revenue and Customs10 | 15 | 2,705 | 48 |
- HMRC CEO* | 15 | 7,715 | 36 |
*Cases where the HMRC’s Chief Executive has replied directly, rather than Ministers | |||
Treasury Solicitor's Department | 10 | 17 | 100 |
Wales Office | 15 | 75 | 87 |
Department for Work and Pensions | 20 | 24,883 | 94 |
- Child Maintenance and Enforcement Commission* | 15 | 3,058 | 99 |
- Debt Management* | 15 | 13 | 90 |
- Health and Safety Executive* | 15 | 124 | 93 |
- Jobcentre Plus* | 15 | 2,753 | 94 |
- Pension, Disability and Carers Service* | 15 | 2,133 | 100 |
* Letters sent direct to Chief Executive/Officials | |||
1Departments and Agencies which received 10 MPs/Peers letters or fewer are not shown in this table. Holding or interim replies are not included unless otherwise indicated. The report does not include correspondence considered as Freedom of Information requests. 2Drop in performance was due to significant increase in correspondence from February - April on property fraud, alongside a change in Chief Executive. Performance for the remainder of 2011 rose to 50% with October to December at 63% 3Response target 15 working days with effect from 1 April 2011. 4Response target reduced to 10 working days with effect from May 2010. Performance against 15 working days was 85% 5DCMS also monitor Ministerial correspondence to the following Departmental targets: 2 working days - 41% of responses sent. 10 working days - 79% of responses sent 6Agency wound up with effect from 16 June 2011. 7Between January and June 2011, the Department cleared a substantial backlog of correspondence following a 20% increase in correspondence overall since May 2010. For the January-June period 34% of correspondence was sent within the 15 day target, and 47% within 20 days. The Department has now put in place a new system to improve quality and deal with sustained higher volumes of correspondence. Between July and December 47% of letters were sent within the 15 day target, and 66% of letters were sent within 20 days. The Department expects improvements in performance to continue in 2012. 8Includes the Government Equalities Office. 9This decrease in performance is due to a number of factors - including an overall increase in correspondence volumes of 24%, introduction of a new correspondence handling system, and departmental re-structuring. A number of measures have now been put in place to improve performance, including improved reporting arrangements; process efficiencies and an increased focus on clearance. 10Correspondence often about complex individual tax matters hence delays in replying. Improvements in place to improve performance. |
Ministerial Pensions
(12 years, 1 month ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
In the Spending Review 2010, the Government announced their intention to increase employee contributions in public service pension schemes. This followed on from Lord Hutton’s interim report on public service pensions1, which concluded that there was a clear rationale for public servants to make a greater contribution if their pensions were to remain fair to taxpayers and employees and affordable for the country.
The ministerial pension scheme was not covered by Lord Hutton’s recommendations, but I consider it appropriate that its members face similar changes.
Last year, I consulted on proposals to make increases to member contributions in 2012-13 and this consultation concluded on 13 January. Having given careful consideration to the responses, I have decided to implement these proposals effective from 1 April 2012.
This will mean that:
Secretaries of State, the Leader of the Opposition in the Commons and Speaker in the House of Lords will pay an additional 2.4 percentage points of pay;
Ministers of State, the Government Chief Whip, the Leader of the Opposition in the Lords, the Chairman of Committees of the House of Lords and the Deputy Chairman of Committees of the House of Lords will pay an additional 1.6 percentage points of pay; and
Parliamentary Under-Secretaries, the Government Whips and Opposition Whips will pay an additional one percentage point of pay.
In line with other public service schemes, a further consultation will take place on the contribution increases for members of the ministerial pension scheme in 2013-14 and 2014-15. Before these increases are implemented, I will consider any evidence of opt-outs from the scheme in line with the Government’s commitment given on 20 December by the Chief Secretary to the Treasury.
The increased contributions will deliver an average of 1.7% percentage points of pay for the Ministerial pension scheme’s membership. These additional contributions will mean that the increase in Exchequer contributions expected following the latest valuation of the parliamentary contributory pension fund will be lower than otherwise expected. Further, the Exchequer contribution will be reduced further to reflect increases in 2013-14 and 2014-15, following advice from the Government Actuary.
Ministers in the House of Commons make separate contributions towards their pensions as MPs. Responsibility for the setting of pension provision for MPs is the responsibility of the Independent Parliamentary Standards Authority, which has consulted on proposals to increase MPs’ contribution increases.
The details of the new scheme have been laid before the House, along with a copy of the response to the consultation from the chairman of the parliamentary contributory pension fund trustees and my reply to this response.
1Independent Public Service Pensions Commission: Interim Report 7 October 2010:
http://www.hm-treasury.gov.uk/d/hutton_pensionsinterim_071010.pdf chapter 8.
Local Planning Regulations
(12 years, 1 month ago)
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The Minister of State, Department for Communities and Local Government (Greg Clark)
Today I have laid an updated set of regulations that set out how local councils should prepare and consult on their local plans. The Town and Country Planning (Local Planning) (England) Regulations 2012 will come into force on 6 April. Not only do these regulations consolidate previous changes, but they also simplify the language we use in plan making, for example “local plan” has replaced the term “core strategy”.
The Government are proposing to abolish top-down regional strategies, subject to the voluntary environmental assessment under way. To promote local joint working between public authorities, the Localism Act 2011 has introduced a legal duty to co-operate between local authorities, and the powers to specify in the local planning regulations which bodies are bound by the duty. The powers ensure that bodies bound by the duty have regard to the views of local enterprise partnerships in relation to strategic planning matters.
The Government have started the process of setting up local nature partnerships, announced in last year’s natural environment White Paper. The purpose of local nature partnerships is to protect and improve the natural environment in an area, and the benefits derived from it. The Government believe that they will make a valuable contribution to strategic planning in their areas. As soon as possible after local nature partnerships have been designated in summer 2012, we will amend the local planning regulations to require bodies bound by the duty to also have regard to the views of local nature partnerships on strategic planning matters.
These regulations are a further step in our package of reforms to strengthen localism by putting councils back in control of the preparation and examination of their local plans. Taken together, these measures support a plan-led system, and encourage local councils to have up-to-date local plans in place.
Microgeneration Equipment (Non-domestic Premises)
(12 years, 1 month ago)
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The Minister of State, Department for Communities and Local Government (Greg Clark)
I have laid before Parliament statutory instruments that amend the Town and Country Planning (General Permitted Development) Order 1995. These amendments and this statement fulfil requirements in the Green Energy (Definition and Promotion) Act 2009 to consider amending the 1995 Order to facilitate the installation of equipment for microgeneration on non-domestic land. The new measures will also bring the freedoms for non-domestic premises into line with those for domestic properties.
The measures will provide:
New permitted development rights for installations of solar panels, ground and water source heat pumps, and flues for biomass and combined heat and power systems on non-domestic premises; and
A clarification that structures to house biomass boilers, anaerobic digestion systems and associated waste and fuel stores, and hydro turbines may be installed as permitted development on agricultural and forestry land.
Bringing these measures forward demonstrates the Government’s commitment to the environment and to tackling climate change, by reducing the regulatory burdens that face microgeneration industries. They will also be good for the economy and for job creation.
The rights will mean that small scale microgeneration installations can be installed without a planning application, so it is vital that the potential effects on the area where they will be installed are taken into account. It would undermine our ambitions for green energy production if reforms lead to widespread complaints.
For this reason we have carefully considered consultation responses and have strengthened the requirements to which the permitted development rights will be subject. This includes additional protections for areas of the country which have a special environmental status, such as national parks and areas of outstanding natural beauty.
Consultation was carried out on proposals to introduce permitted development rights for non-domestic installations of wind turbines and air source heat pumps. The Government have committed to review the impact of permitted development rights introduced in 2011 for domestic installations of these technologies to look again at whether the approach to issues such as noise is correct. It would not be appropriate to extend permitted development rights for wind turbines and air source heat pumps further until the outcomes of this review are known.
These measures will come into force on 6 April. We have today published a summary of the responses to the public consultation and a more detailed statement comprising the Government’s response to them. These documents are available from the Department for Communities and Local Government website at:
http://www.communities.gov.uk/publications/planningandbuilding/electricvehicleresponses and http://www.communities.gov.uk/publications/planningandbuilding/electricvehiclegovernment.
Fuel Poverty
(12 years, 1 month ago)
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The Secretary of State for Energy and Climate Change (Mr Edward Davey)
In March 2011, my predecessor commissioned Professor John Hills of the London School of Economics, to undertake a review of the fuel poverty definition and target. As part of this review, he was asked to consider fuel poverty from first principles, including possible formulations for a future definition and forms of target, and the cost effectiveness of different interventions. The aim of commissioning such a review was to consider how we could focus our limited resources in the best and fairest possible way.
Professor Hills published an interim report in October 2011. He argued that fuel poverty was a serious problem, distinct from income poverty. He suggested it was an issue of concern from the perspective of poverty, health and well-being and cutting carbon. He also argued that the Warm Homes and Energy Conservation Act 2000 was correct to describe fuel poverty as a problem affecting people on low incomes who cannot keep warm at reasonable cost. He explained that the current definition of fuel poverty—which calculates the ratio of required fuel expenditure to income—was flawed and did not support effective policy-making and delivery. He proposed a new measurement approach separating the extent of the issue (the number of people affected) from its depth (how badly affected people are).
Professor Hills held a short consultation on the interim report, which showed that a large proportion of stakeholders shared his analysis. The results of the consultation have informed the final report from Professor Hills which is being published at 12.00 today on his website1. We will deposit hard copies of the report in the Libraries of of Houses.
The aim of Professor Hills’ final report, which I have seen, is to provide evidence to increase understanding of the underlying problem of fuel poverty, including who the fuel poor are and how best to help them. The report explains how the impact of Government policies can be assessed against the new measurement approach. It also provides projections of fuel poverty to 2016. Taken together, these show that Government policies are having a positive impact by reducing both the extent and depth of fuel poverty.
I am grateful for the work that Professor Hills and his team have conducted which offers an unparalleled insight into this serious issue. The evidence is overwhelming that improving the way we measure fuel poverty is integral to delivering the right policy outcomes. Without the right measure it will not be possible to focus available resources in the most effective way, proving that measurement matters and is far from a distraction away from action on the ground.
It is important that this opportunity to improve the framework for tackling fuel poverty is seized. Today, I therefore commit myself and the Government to the adoption of a revised approach to measuring fuel poverty by the end of the year. In preparation for this I will be working closely with my colleagues across Government. I am also very keen to hear the views of stakeholders on the final judgment that Professor John Hills has reached. I will therefore publish in the summer a consultation on the new approach I propose to take.
1http://www.decc.gov.uk/en/content/cms/funding/fuel_poverty/hills_review/hills_review.aspx
Snares
(12 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
The DEFRA commissioned report, “Determining the Extent of Use and Humaneness of Snares in England and Wales—WM0315”, will be published today on the DEFRA website at WM0315. While I recognise the importance of snares in wildlife management, the report raises a number of issues. I wish to allow stakeholders time to consider the report’s findings in detail and will discuss possible ways forward with them before making any decisions.
Equal Civil Marriage Consultation
(12 years, 1 month ago)
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The Minister for Equalities (Lynne Featherstone)
The Government are today launching a consultation on how to introduce equal civil marriage.
During a listening exercise conducted in 2010 on allowing civil partnerships to take place on religious premises, we heard representations from many who sought equal access to marriage for same-sex couples. It was argued by some that having two separate provisions for same-sex and opposite-sex couples perpetuates misconceptions and discrimination.
We recognise that the personal commitment made by same-sex couples when they enter into a civil partnership is no different to the commitment made by opposite-sex couples when they enter into a marriage. We do not think that the ban on same-sex couples getting married should continue.
That is why we are, today, launching this consultation to seek the public’s views on how we can remove the ban on same-sex couples getting a civil marriage. We are clear that no changes will be made to how religious organisations define and solemnise religious marriages and we are clear that we will retain civil partnerships for same-sex couples.
Copies of the consultation document are being placed in the House Library.
Independent Review of Police Officer and Staff Renumeration and Conditions
(12 years, 1 month ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
Tom Winsor has today published the final report of his review of remuneration and conditions of service for police officers and staff in England and Wales.
The review began its work on 1 October 2010. The terms of reference asked it to make recommendations on how to:
use remuneration and conditions of service to maximise officer and staff deployment to frontline roles where their powers and skills are required;
provide remuneration and conditions of service that are fair to and reasonable for both the public taxpayer and police officers and staff;
enable modern management practices in line with practices elsewhere in the public sector and the wider economy.
The review was asked to report in two stages. The first report, on short-term improvements, was published on 8 March 2011. I announced on 30 January that I had decided to accept the recommendations made by the police arbitration tribunal and Police Negotiating Board on its proposals. This final report is on longer-term reform.
Tom Winsor has conducted the review with the support of former chief constable Sir Edward Crew and labour market economist Professor Richard Disney. I am very grateful for all their work on both parts of the review and for this report. I will now consider it very carefully.
The final report has been laid before Parliament today and copies are available from the Vote Office. It is also available electronically to the service and the public on the review’s website at: http://review.police.uk/.
Justice and Home Affairs Council
(12 years, 1 month ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
The Justice and Home Affairs (JHA) Council was held on 8 March in Brussels. I attended on behalf of the United Kingdom. The following items were discussed.
The Council began in mixed committee with Norway, Iceland, Liechtenstein and Switzerland (non-EU Schengen states). The presidency opened a debate on illegal immigration by outlining some of the pressures facing member states. The presidency reported that it was working on a roadmap for the April Council grouping current and future measures into a single strategy. The Commission (Malmström) supported the presidency and saw the response as being threefold: member states needed to make full use of existing legislation; the EU Agencies (Frontex and the European Asylum Support Office) needed to work more closely together; and there needed to be further co-operation with countries of origin and transit, with Turkey a priority. Frontex’s update showed that despite a decrease in the flows from Libya and Tunisia, the situation overall was not improving. Ministers were supportive of the presidency roadmap and all agreed that the Greece-Turkey border was a priority. The UK supported the presidency’s work and noted concerns over visa liberalisation. In addition the EU needed to begin to take action to tackle fraud and abuse of free movement rights where third country nationals were using these rights to facilitate their travel across the EU and to circumvent immigration controls. The UK also supported work upstream with partner countries, and suggested that a more concerted EU dialogue with Turkey needed to be initiated.
There followed presentations by the Commission, the European Asylum Support Office (EASO) and Frontex on the situation in Greece in relation to Schengen. The Commission noted there was evidence of progress but it was still uneven, particularly in the area of asylum management. EASO provided an overview of the training support currently underway. Whilst the backlog in asylum decisions was still too big, EASO welcomed the announcement that Greece’s new asylum service would be operational from this September. Frontex reported seeing real progress on border management and once again appealed to member states to increase their deployment of expertise. The presidency suggested developing returns strategies to help the Greek authorities increase their capacity to return failed asylum seekers and illegal migrants, and invited the agencies and Commission to report again in April.
The Council adopted conclusions on strengthening Schengen governance. Ministers from EU and associated states would meet twice a year in mixed committee to discuss the functioning of the Schengen area, including any serious shortcomings highlighted by reports under the Schengen evaluation mechanism. Member states welcomed the Commission’s intention to present regular reports, starting in May, which would cover planned and existing visa liberalisation and its consequences, co-operation with key countries of origin and transit, and the implementation of the Schengen acquis, including at the internal borders.
The presidency introduced its paper on co-operation with third countries in the area of border management and on strengthening internal security during major sporting events. There was little discussion. Updating Ministers on preparations for the Olympics, the Home Secretary underlined that the safety and security of the games were of paramount importance. The UK Government had been planning for years and had recently conducted live exercises, including a simulation of a terrorist attack and a test of the inter-operability of emergency services and other responders. The Home Secretary thanked Schengen states and the Commission for their assurances that requests from games’ family members for transit visas would be expedited and said the UK would disseminate information to participants informing them that they needed to meet any visa requirements of transit countries. Lastly, the Government were working with a number of member states to tackle the few instances of illegal ticket touting.
The presidency reported on the recent conference on innovation border management. Participants had acknowledged the benefits of a biometric EU entry-exit system and registered traveller programme, and agreed on the need to balance data protection considerations with the benefits of access to data for law enforcement agencies.
The presidency emphasised the importance of the second generation Schengen Information System (SIS II) in enabling the Schengen area to remain secure without internal borders. Commissioner Malmström noted they had completed all activities on schedule to date, but issues with the national testing tool could cause the timetable to slip.
Moving into the main Council meeting, the adoption of the A points (the list of items agreed without discussion) confirmed Rob Wainwright’s directorship of Europol for another four years.
Before inviting Ministers to approve the Council conclusions on solidarity, the presidency underlined the importance of having a ‘toolbox’ at member states’ disposal to counter the challenges presented in the field of asylum and managing mixed migration flows. The conclusions provided the framework for increasing mutual trust. The Commission stood ready to undertake their commitments and thought the conclusions should maintain the momentum required to complete the Common European Asylum System negotiations by the end of 2012. EASO presented its own view of the early warning mechanism to be agreed within the Dublin regulation, with EASO analysing member state data to identify trends and push and pull factors; a Commission lead on preparedness with EASO support; and emergency support which was already being provided to Greece. The UK was pleased with the balance of solidarity measures and member state responsibilities and the fact that the conclusions recognised the value of practical co-operation. However, the UK called for caution in striking the right balance between the roles of the institutions in the early warning mechanism. For the UK, EASO should have the leading role, but in close partnership with member states. The UK also supported the view that internal relocation would simply move the problem around Europe, creating pull factors, but noted that the reference in the conclusions was on a voluntary basis.
In the last session of the Council, the presidency gave a brief overview of progress on the asylum package and signalled its intention to move with commitment and energy to complete as much as possible, in view of the 2012 deadline. The Commission was pleased with the progress made, and urged the presidency to maintain momentum.
Opt-in Decision (Parliamentary Scrutiny)
(12 years, 1 month ago)
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The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
In his written ministerial statement on 20 January 2011, Official Report, column 51WS, the Minister for Europe outlined the coalition Government’s commitment to further strengthen parliamentary scrutiny of JHA opt-in decisions. This included a commitment, where there is strong parliamentary interest, to set aside Government time for a debate in both Houses on its proposed approach.
The Government have decided to offer debates in Government time on the following proposals, which it is anticipated will be published in 2012:
Home Office dossiers
A draft directive establishing minimum provisions on the constituent elements of criminal acts and penalties in the field of illicit drug trafficking (with a proposal on information exchange, risk-assessment and control of new psychoactive substances, if published as a part of the package);
A draft regulation to reform Eurojust’s structure; and
Draft directives creating minimum rules for the confiscation of criminal assets and arrangements for the mutual recognition of confiscation orders.
Ministry of Justice dossiers
A draft directive on data protection in policing and criminal justice;
Measure E on the road map on criminal procedural rights—a draft directive on special safeguards in criminal procedures for suspected or accused persons; and
A draft directive proposal on the compensation of crime victims.
Measures may be added to or removed from this list depending on the level of parliamentary interest which is generated by the published proposal. It is also not always possible to predict, ahead of analysis of the final proposal, whether the opt-in will apply. The Commission’s timetable may also change. Parliament will be kept informed of any changes, which will be discussed with the House of Commons European Scrutiny Committee and the House of Lords European Union Committee.
It should be noted that this is a list of proposals that are offered for debate in Government time. It does not rule out the possibility that the House of Commons European Scrutiny Committee or the House of Lords European Union Committee may call for debates on other proposals.
Immigration Rules
(12 years, 1 month ago)
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The Minister for Immigration (Damian Green)
My right hon Friend the Home Secretary is today laying before the House a statement of changes in the immigration rules, which implement the next phase of our reforms to the immigration system.
The student reforms, originally proposed in our student visas consultation which ran from December 2010 to January 2011, were set out in more detail in a statement of intent published by the Home Office on 13 February.
These changes include closing the post-study work route which gave migrant graduates free access to the UK labour market. The Government believe this route is inappropriate when UK national graduates are struggling to find work. However, in keeping with our focus on the brightest and best, I am introducing a new tier 1 route for graduate entrepreneurs and new provisions for graduates who have an offer of a skilled job to switch into tier 2. I am renewing the annual limit for tier 1 (Exceptional Talent) at the same level it was set for the last year, 1,000 places. In order to give more certainty to potential applicants, I propose that this level will remain the same for each of the next two years, and will be reviewed again for April 2014.
I am making changes to the rules for entry clearance and leave to remain under tier 2 which will apply to applications made after April 2012. Temporary leave as a skilled worker will be limited to a maximum stay of six years and will be granted in two blocks of three, rather than the current 3+2. In addition, the changes will mean that 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 that tier.
The changes I am proposing to make to the immigration rules for tier 2 settlement, tier 5 of the points-based system, the visitor rules and the overseas domestic worker routes, give effect to the next phase of our programme of immigration reform, following the public consultation on employment-related settlement, tier 5 and overseas domestic workers which ran from 9 June to 9 September last year. The Home Secretary set out the detail of the changes in her written ministerial statement to the House on 29 February 2012, Official Report, column 33WS. I am today publishing impact assessments of these policy changes and will place these documents in the Library of the House. The rule changes will introduce a new minimum pay threshold for tier 2 migrants eligible for settlement from April 2016, and limit the total amount of time a person may remain in the UK as a tier 2 migrant to six years. They will also implement reforms to the overseas domestic worker routes to return them to their original purpose, to enable visitors and diplomats to bring their overseas household staff with them to the UK for temporary stay. Taken together, these measures will break the link between coming to the UK to work and settling permanently.
Some targeted changes to tier 5 will enhance the focus and flexibility of this tier. Those coming to participate in internships and work experience schemes under the Government Authorised Exchange sub-category will be restricted to one-off stays of a maximum of 12 months, which is sufficient for these purposes. However, the rules for sports persons entering under the creative and sporting sub-category will be amended so that individuals may undertake some guest sports broadcasting work, where this is not filling a permanent position. To introduce further flexibility for those coming to undertake short-term engagements, I will create a new visitor route (“Permitted Paid Engagements”) outside the points-based system for specific fee-paid engagements, which will enable certain professionals, as well as artists, entertainers and sports persons to come for up to one month without the need for formal sponsorship by a UK-based employer.
I am also introducing a premium customer service for those A-rated sponsors who wish to apply and pay for a range of benefits. These will include direct contact into the UK Border Agency, guaranteed access to public enquiry office appointments and swift return of documents for their sponsored workers. This is being introduced in response to requests from business for a higher level of customer service for themselves and their international workers.
Finally, I am making changes to Rule 323A to make curtailment of leave to enter or remain mandatory, rather than discretionary, where a migrant under tiers 2, 4, or 5 of the points-based system is not working or studying with their sponsor. Rule 323A also sets out limited exceptions to mandatory curtailment.
EU Transport Council
(12 years, 1 month ago)
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The Minister of State, Department for Transport (Mrs Theresa Villiers)
I will attend the first Transport Council of the Danish presidency (the presidency) which will take place in Brussels on Thursday 22 March.
The presidency hopes to achieve general approach on the following:
A proposal for a regulation of the European Parliament and of the Council on Union guidelines for the development of the Trans-European Transport Network (TEN-T). Progress to date has been encouraging. The revised text issued by the presidency has gone some way to addressing our concerns, particularly in relation to binding standards and deadlines. And also by recognising the need to take account of member states’ finances and to consider the economic viability of projects. Additionally, I will continue to push for changes on the core network and TEN-T corridors to minimise risks to the UK. I will consider whether the improvements achieved are satisfactory to justify UK support for a general approach.
A proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EEC) No. 3821/85 on recording equipment in road transport and amending Regulation (EC) No. 561/2006 of the European Parliament and the Council. This proposal would amend the specification for tachographs, which measure hours spent at the wheel by commercial lorry and bus drivers. The proposed general approach addresses many of the concerns raised through negotiations, including:
Removing the proposed ban of operators with tachograph workshops from installing or calibrating tachographs in their own vehicles. Member states are left to take appropriate measures to prevent conflicts of interests between workshops and operators.
Removing the proposal to merge the driving licence with the tachograph card.
These represent significant gains for the UK with regard to minimising costs and burdens on industry and the Government.
A proposal for a regulation of the European Parliament and of the Council on ground-handling services at EU airports and repealing Council Directive 96/67/EC (part of the airport package). The proposed regulation has been subject to intense official-level scrutiny by Council working groups and these discussions are ongoing. Progress to date has been encouraging from a UK perspective, and we believe that the resulting regulation could potentially help further open up market access while minimising administrative and financial burdens for industry. However, at this stage, it remains unclear whether or not it will be possible to seek a general approach at the March Council. If it is not possible, there will be an orientation debate instead.
Under any other business, the Commission will provide information on the Costa Concordia accident, the aviation emissions trading system and the Galileo and EGNOS programmes.
House of Lords
Her Majesty The Queen’s Diamond Jubilee
(12 years, 1 month ago)
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Lord Strathclyde
That an humble Address be presented to Her Majesty to congratulate Her Majesty on the occasion of the Sixtieth Anniversary of Her Accession to the Throne.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, I beg to move than an humble Address be presented to Her Majesty the Queen, to congratulate Her Majesty on the 60th anniversary of her accession to the throne, and that the Address be presented by the whole House on Tuesday 20 March in Westminster Hall.
This is a formal occasion for paying tribute to our head of state, but what I know will be evident in our national celebrations is the respect and admiration for the Queen personally felt by so many in this nation. She is not simply owed our respect as head of state, but she inspires our respect as an individual.
The Queen fulfils her role as head of state with grace and with firmness of purpose. At the core of that role is her enduring right to be consulted, to advise and to warn the Government, whether that Government is led by her first Prime Minister, Winston Churchill, or David Cameron, now her 12th Prime Minister.
The Queen has been careful to stand above politics at every turn. We take it for granted that we have no idea what our head of state personally thinks of any of the measures in the Queen’s Speech. Her discretion and impartiality when dealing with the Government are impeccable, and we should pay tribute to them.
The Queen is the fount of authority in this realm. She is the head of the Armed Forces, the judiciary, the Civil Service, the supreme governor of the Church of England. It is she, as monarch and an individual, who holds our state together. As well as that assurance of political independence and neutrality, the Queen provides each of those institutions with a valuable focus for loyalty which endures well beyond the reach of any election campaign. That focus for loyalty has been especially valuable for the Armed Forces in recent years, as they have seen more active service than in previous decades.
The same is true of the union itself. The Queen has been rightly careful not to be an English Queen. Indeed, dare I presume that if the Queen were to have a favourite place, the highlands might be that place? The Queen has regularly visited Northern Ireland throughout her reign—17 times, in fact. We should remember that the Troubles directly touched her family. More happily, she has now paid a welcome and deeply significant state visit to the Republic of Ireland.
The heart of the Queen’s role as head of state is her role in Parliament. It is the monarch who provides the daily authority for our sittings. Without the Mace on the Woolsack, we would not be the House of Lords but a collection of individuals. It is why we bow to the Cloth of Estate behind the Throne and to the Mace as it passes us in procession.
When the Queen is present in person, we have no need of the Mace. Next Tuesday, as the Queen arrives in Westminster Hall, a cloth will gracefully be pulled over the silver gilt of the Mace. Last week, the Queen gave Royal Assent to half a dozen Acts of Parliament—yes, a ceremonial formality, but a public assurance of due process and authority. In a few weeks’ time, the Queen will sit on the Throne in this Parliament Chamber and announce the Government’s new programme of legislation for the 58th time. If anyone has cause to complain about the relentless tide of legislation, it is she.
The scene at State Opening will be readily identifiable, with the Tudor depiction of the same ceremony embossed on one of our Christmas cards last year. That is part of the point. The Queen provides the nation with a reassuring symbol of continuity and stability that many of us value. Political parties and financial markets go up and down; fashions and celebrity wax and wane; but the crowds for royal weddings over the decades and the centuries have been constant.
One of the Queen’s greatest qualities is that she has appeared unchanging while changing very much indeed. The Queen has quite simply kept in touch with our national life throughout her reign. The United Kingdom in 2012 is a world apart from that of 1952, let alone the imperial court in which Her Majesty was raised. It is an achievement of some skill that the Queen remains quite so relevant to our national life and in touch with her subjects. Those of us, and there are a few of us in this House, who are privileged enough to have been Chancellors of the Duchy of Lancaster know from our personal experience the keen interest that the Queen takes in hearing in detail about the Duchy’s affairs, and the pleasure that she gets from it.
The Queen is not simply owed our respect as head of state; she inspires it as an individual. It is a privilege to lead these tributes today, and I am confident that they mark the start of a deservedly happy jubilee. I know that the Lord Speaker will speak eloquently on our behalf next Tuesday. I beg to move this Motion for an humble Address.
Baroness Royall of Blaisdon
My Lords, it is an enormous privilege for me from the Benches of Her Majesty’s Loyal Opposition in your Lordships’ House to support the Motion and add our congratulations to those already offered to Her Majesty the Queen on the occasion of her Diamond Jubilee, the 60th anniversary of her accession to the Throne. The Leader of the House has concentrated on the Queen’s role as head of state, her constitutional role and her role in Parliament, and I concur, of course, with all that he has said.
All those things are central to the monarchy, but equally central is Britain’s relationship with its monarchy and in particular with its Queen. Twenty years ago this year, the Queen had what she herself termed her “annus horribilis”. Twenty years on from that low point, her standing with the people of this country could not be higher.
Republics and republicanism are now dominant around the world, but not here in Britain. Polls show that three-quarters of the British people support the monarch. More than half believe that the Queen is one of Britain’s greatest monarchs. More than half again believe that Britain will still have the monarchy in 50 years’ time. Two-thirds of people across our country believe that in the 60 years of the Queen’s reign the quality of life in Britain has got better.
That support means that, regardless of the political affiliation of the Government in power, the Queen can and does speak for Britain and the British people, as she did so wonderfully last year in her first ever visit to the Republic of Ireland. She is able to carry out that role because she is in touch with all the details of our national life. Every year, the Queen meets tens of thousands of people of this country and touches their lives. Every year, the Queen and her family undertake more than 3,000 engagements across the UK and many others overseas. Every year, the Queen entertains more than 50,000 people at receptions and garden parties. Every year, the Queen gets through a mountain of red boxes, seeing all important government papers, including the minutes of every Cabinet meeting. That has given her a unique and unmatchable perspective on British government, politics and society over a 60-year period—real service, real connection and a real relationship between the Queen and her country.
A constitutional monarchy is one in which the monarch is in name the ruler but does not rule. A constitutional monarch is not the servant of the people but does serve the people, and the Queen’s service, with the loyal and steadfast support of her husband, the Duke of Edinburgh, has been extraordinary. We in this House are used to long service, but 60 years on the Throne, 60 years of unstinting and unswerving service, is an astounding achievement. It is one that this House and the whole country recognise, respect and value, and one for which we are all grateful.
Perhaps I may record a personal point. When I was Leader of your Lordships’ House and Lord President of the Council, I was one of the Ministers who was privileged to meet the Queen regularly. Occasionally the meetings took place in Windsor Castle, where she always gave the impression of being at home. She was unfailingly courteous, knowledgeable and professional, and personally kind to me, for which I am particularly grateful. When my noble friend Lord Mandelson took over that particular privilege, I became Chancellor of the Duchy of Lancaster. One of my treasured memories is of hosting a dinner for the Queen and all former Chancellors of the Duchy who were still living, many of whom are in their places today. It was a very jolly occasion with much laughter. A similar dinner had taken place 10 years before and a photograph had been taken to commemorate the occasion. Naturally, the Queen was in the middle of the front row. Sadly, however, apart from the Queen, everyone else in that front row had died in the intervening years—a testament both to our frailty and to the strength of the Queen.
The public’s view of the Queen is clear: the longer she reigns the better. The Queen is already the United Kingdom’s second longest serving monarch and we look forward to September 2015 when she will, we all hope, outdistance even Queen Victoria. Jubilees such as we are about to see this year are a big punctuation mark in our national life. They give the country the opportunity to pause and to reflect and they tend to prove the naysayers wrong. The Silver Jubilee in 1977 was predicted to be a flop; it was instead a huge success. So was the Golden Jubilee in 2002; and the Diamond Jubilee will also be a triumph. Britain will celebrate the Queen’s 60 years on the Throne and celebrate, too, the sense of community and pride in our country which the Diamond Jubilee will foster. Even in times of austerity the jubilee will bring the country together.
We, on these Benches and across the whole House, look forward to that and to Her Majesty’s address next week to both Houses of Parliament. It is wholly appropriate that the Queen should choose for the formal launch of her jubilee celebrations the Parliament of the people. Rightly, the jubilee will lead to many tributes to the Queen and to many conclusions being promulgated about the state of the nation at this moment. For our part, we will stand by the judgment given by the BBC’s Andrew Marr in his book to mark the Diamond Jubilee, in which he says of the Queen,
“With her, and with her kind of monarchy, most of her people are content”.
We are indeed. In fact, we in this House are more than content.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, I readily associate myself and the Liberal Democrat Benches with these tributes.
The Leader of the House and the Leader of the Opposition have spoken about the Queen’s role as head of state, her service to this country and the immense changes seen in Britain over the past 60 years. It is not only in Britain that we have seen change. When the Queen came to the Throne she still reigned over an empire. The peaceful transition from colonies to a commonwealth of free nations is a legacy in which she has played no small part. From that spine-tingling dedication of self to service by the young Princess Elizabeth in Africa over 60 years ago, to a message to the Commonwealth earlier this week in Westminster Abbey, the Queen has been the inspiration and the personification of the Commonwealth which, in her words this week in the Abbey, can,
“draw us together, stronger and better than before”.
One aspect of Her Majesty’s work of which everyone is aware is the constant round of making and receiving visits. Anyone who has ever done a school prize-giving knows how much time and effort goes into making the day special for those you are meeting and greeting. The ready smile, the handshake, the interested question look all so easy and yet require care and preparation to ensure that those on the receiving end are left with lifetime memories of “the day I met the Queen”.
There is one passion that the Queen shares with me and millions of others. Anyone who has ever seen a photograph of her at a horserace meeting knows that she loves the horses. Last year, the Sun reported with absolute precision that the Queen was going to bet £10 on Carlton House, her horse in the Derby. How they could be so sure of the fact, one can only speculate.
In 2001, we in this House made the faux pas of holding the State Opening of Parliament in Ascot week. Only the fact that the Irish stagecoach broke the speed limit returning down the Mall allowed Her Majesty to be in Ascot in time for the 2.30. This time there is no such clash, and we know that on 2 June she will be at Epsom for the Jubilee Derby. After last year’s disappointment with Carlton House, which came third, I do not think Her Majesty has a runner this year. For the romantics among us, I suggest Imperial Monarch—but I think my noble friend Lord Sassoon should put the Treasury’s money on Camelot.
As the Leader of the Opposition said, any tribute to the Queen should also be associated with Prince Philip, who has been by her side throughout this period. I also say, as a son of the red rose county, what a pleasure it is that both the Leader of the House and the Leader of the Opposition recall their time as Chancellor of the Duchy of Lancaster. My tribute is not only to the Queen but to “the Queen, the Duke of Lancaster”, and I am proud to make it.
Lord Laming
My Lords, the House will know that members of the Cross-Bench group seldom, if ever, speak with one voice. Indeed, they often remind me of their individual independence. However, today is different, because for once, I am in no doubt that each member of the Cross-Bench group is delighted to be associated— in every respect—with the tributes already paid and with the Motion of an humble Address. The citizens of this country, and indeed people throughout the Commonwealth, are most fortunate in having such a remarkable woman as our head of state and head of the Commonwealth. Her Majesty the Queen is rightly held in great affection and she has our deep gratitude, always, for the immense workload she carries on behalf of us all.
The members of the Cross-Bench group bring to this House a wide range of experience and expertise. They have spent many years in the key public services, in industry, the law, the arts, commerce and of course in leading charities. However, in addition, the group includes former Lord Chamberlains and Private Secretaries to Her Majesty. Those officeholders have, more than most, an even clearer appreciation of the volume of work and the range of activities undertaken by the Queen and members of her family, week in and week out—in her case for more than 60 years.
Her Majesty’s workload includes frequent visits to cities and counties throughout the United Kingdom. Many Members of this House will have had direct experience of witnessing the excitement and regard generated during these events. Her Majesty always takes the opportunity to recognise the contributions to society made by individuals and organisations. This is deeply appreciated and of enduring benefit. For example, the media reports of the recent Diamond Jubilee royal visit to Leicester indicate, so clearly, the very great affection that is felt for Her Majesty and her family.
The House will know that the Queen is the patron of more than 600 charities. Her husband, of course, founded the Duke of Edinburgh’s Award scheme for young people and the Prince of Wales’s Prince’s Trust gives purpose and promotes self-respect to hundreds of disadvantaged young people each year. This is just a mere snapshot of the many activities in support of charities undertaken by members of the Royal Family. We must neither underestimate, nor take for granted, the work and importance of the Queen and her family in enriching the quality of life in our society.
On behalf of the Cross-Bench group, I join the rest of the House in supporting this Motion and wishing Her Majesty a splendid Diamond Jubilee. It is a great honour to make this contribution to the remarkable achievements of the Queen and, together, we offer Her Majesty our warmest congratulations and very good wishes.
The Archbishop of Canterbury
My Lords, we often hear questions these days as to what gives this nation its identity. We rightly point to our history, our language and, not least, our long and deep commitment to the rule of law. But as we become more visibly diverse, as we take on board more dimensions of our history, more languages spoken in our schools, more complex discussions of equality before the law, one feature of our national life remains centrally significant. We treasure the fact that, above the shrill debates of our public life, we have in Her Majesty the Queen a personal focus for the loyalty and commitment we know we must feel towards each other as fellow citizens.
Sometimes loyalty to a nation can be a blind prejudice of race; sometimes it can be a dry and rather distant habit of reliance on the rights and privileges that the law guarantees for us. But Her Majesty the Queen has reminded us that it may also be grounded in something like a feeling of plain friendship and relationship within the national community, a feeling that is generated by the example, at the heart of our society, of someone who by her attentive and sympathetic presence in so many diverse settings, here and abroad, creates that sense of friendship. We sometimes joke about how many people appear to have dreams about meeting the Queen. But it is not simply a joke. We imagine ourselves in the neighbourhood of the monarch because we have a deeply ingrained sense of belonging with her as a neighbour, as someone who helps to keep alive the hope that the nation itself might be a neighbourhood.
So in your Lordships’ House, in the judiciary, in the Armed Forces, in the Church of England, and in many other contexts, we promise our allegiance to a person. In so doing we recognise all that Her Majesty has done and continues to do in personalising our loyalty and recalling us to the need constantly to work for that neighbourliness, that directness of relation to each other, that is the lifeblood of a genuinely united society, uniting and knitting together the hearts of this people, as our prayer reminds us daily. A person—and one whose personality plays such a significant role in what she has achieved; a personality warm, shrewd, witty and calm; a personality also deeply committed to the faith of her Church, shaped by a deep and undemonstrative devotion, which she has increasingly come to share in her public utterances and which was wonderfully in evidence in the meeting with faith leaders which we recently had the honour of hosting at Lambeth Palace.
We give thanks to God for this unique ministry over six decades, praying that Her Majesty will long be spared to go on drawing us into this spirit of neighbourly attention and support for one another that makes us still, for all the challenges we face, a lively and a hospitable society.
Lord Wright of Richmond
My Lords, I hope I may be permitted to add a very small point of tribute. The Leader of the House referred to the Civil Service as one of those organisations of which the Queen is supreme governor. I hope I might be permitted to add Her Majesty’s Diplomatic Service, of which I had the privilege to be head for five years and in which I had the immense privilege of very frequent meetings with Her Majesty when I accompanied heads of diplomatic missions to present their credentials to her.
Freedom of Information Act 2000
(12 years, 1 month ago)
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Lord Wills
To ask Her Majesty’s Government whether they plan to amend the Freedom of Information Act 2000.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the Government are already amending the Freedom of Information Act through the Protection of Freedoms Bill, including provisions to extend the Act to more than 100 extra bodies and to introduce new rights in relation to data sets. These are part of a much wider set of measures to enhance transparency. The Freedom of Information Act is also currently the subject of post-legislative scrutiny by the Justice Select Committee.
Lord Wills
My Lords, I very much welcome that Answer from the Minister, and that commitment to transparency. He will be aware of a report in the Guardian last month that civil servants are calling for higher fees for users of that Act in order to discourage them from using it. I am sure he will recall that at one point the previous Government also looked at increasing charges for users of the Act, but they dropped that proposal when they realised the damage that it would do to transparency. Will the Minister now rule out increasing charges for users of the Act?
Lord McNally
My Lords, I like to take pride in having played this by the book, in that I referred the Freedom of Information Act to post-legislative scrutiny, and it is entirely proper that Sir Alan Beith and his committee should look at a whole range of issues and proposals, including that of charging, which other jurisdictions such as Ireland have brought in. However, it is a matter that we will look at when we have heard what the post-legislative scrutiny deliberations bring forward.
Baroness Hamwee
My Lords, clearly much more information is routinely being published and the culture is changing. To be sure that the system works as well as possible for users, and there must be a number of specific categories that can be identified, will the Government consider undertaking research into the changes that users might welcome to make the system more effective, if that is not covered by the Justice Select Committee?
Lord McNally
My Lords, when this House and the other place considered the original Act, they specifically made applications applicant and motive-blind, and for very good reason. We believe that it benefits the public by providing access to information in the public interest, without targeting specific individuals who are asking those questions. The Ministry of Justice publishes quarterly and annual statistics on the volume, timeliness and outcome of information, but I would still be reluctant to move from the principle of it being applicant and motive-blind.
Lord Maxton
My Lords, given that the BBC is an entirely publicly funded body and a very important part of our democratic system, and that it quite rightly suggests that we should all be accountable publicly and openly, is it not right that all aspects of the BBC should now be covered by the Freedom of Information Act?
Lord McNally
That is an interesting prospect, which I suspect Sir Alan Beith may well look into.
Baroness Gardner of Parkes
Will the changes proposed cover such things as leaseholders being quite unable to get information or transparency? There are over 2 million leaseholders, and they are unable to discover whether the insurance company to which they are paying great money is giving a kickback to the superior landlord. Will that sort of thing be covered, or will it require other types of housing or accountancy legislation?
Lord McNally
I am afraid that it would require a different kind of legislation. This is about freedom of information from public bodies.
Baroness Royall of Blaisdon
My Lords, I know that the Minister shares my frustration that the post-legislative scrutiny on this important Act is being undertaken only in the House of Commons, but I would be grateful if he could tell me two things. First, how can we ensure that the committee in the House of Commons takes into consideration the many views, expertise and great experience of this House on the subject? Can he also assure me that the committee will look at the issues relating to the risk register, because people out there simply do not understand why this House is not able to see the risk register while the health legislation is going through this House?
Lord McNally
I am interested in this question about the risk register. Risk registers are protected under the Freedom of Information Act, and the relevant clauses were enthusiastically used by the previous Government. Their enthusiasm for moving away from the protections of the Act seems to have occurred only after May 2010. They may like to tweet that that is true.
On the other matter, I know that there are strong opinions and great expertise in this House on freedom of information. I regret that there was no Joint Committee but, under the rules and arrangements between the two Houses, Sir Alan’s committee had first pick and chose to do it alone. However, I urge all noble Lords to write to the committee with their opinions and to offer to appear before it if Sir Alan so deems.
Lord Cormack
My Lords, has my noble friend drawn to Sir Alan’s attention the excellent debate initiated by the noble Lord, Lord Hennessy, some weeks ago and some of the very real concerns and important points raised during that debate?
Lord McNally
My Lords, yes, I have. It was an extremely useful debate and a number of former public servants expressed their point of view on how the Freedom of Information Act works in their experience. As I said at the time, I do not share all their fears. I am extremely proud that we, as a party, supported the Freedom of Information Act. It has made our system of government much healthier. Frankly, when politicians, the press and the police have all shown that they have something to hide, this is not the time to start pulling down the shutters of secrecy again.
Lord Kinnock
Can the Minister tell us of any measure of the dimensions of the Health and Social Care Bill, with such direct effect on the organisation of a life-and-death service, that has been protected by any Government’s evasion of the responsibility to publish risk registers? This is not a matter of political persuasion but of the fundamental well-being of the people of this country.
Lord McNally
As the noble Lord knows, the risk registers are protected by the Freedom of Information Act. Every piece of legislation passed by the previous Government enjoyed the same privileges. The Opposition changed their opinion only when they went into opposition.
Since there is no time to respond to the noble Baroness, Lady O’Neill, on her concerns about academic freedoms, I draw the attention of the House to the response of my noble friend Lord Henley. I have also passed that response to Sir Alan Beith for his consideration.
Baroness O’Neill of Bengarve
I thank the noble Lord but that is not what I was going to ask.
Railways: Level Crossings
(12 years, 1 month ago)
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Lord Faulkner of Worcester
To ask Her Majesty’s Government what support they are giving to Network Rail’s efforts to improve safety at railway level crossings.
Earl Attlee
My Lords, overall, level crossing safety performance is currently high and an industry safety framework exists to manage risks. The legal duties for safety at level crossings lie with Network Rail as the safety duty holder, while their monitoring and enforcement are the responsibility of the Office of Rail Regulation. We welcome Network Rail’s continuous efforts to reduce risks and improve level crossing safety.
Lord Faulkner of Worcester
My Lords, I take it that the Minister accepts that rail travel is now safer than it has ever been, and that the greatest risk on the railway now comes from user-worked crossings and from motorists and other road users running red lights or weaving around barriers. British Transport Police advises us that last year there were 2,637 cases of people failing to obey traffic signals at level crossings. Can the Minister assure us that shortage of funds will not stop Network Rail installing the latest technology at the 600 riskiest user-worked crossings? Secondly, what are the Government doing to support the trialling and introduction of red light enforcement cameras? Is he aware that the Home Office is taking up to 24 months to test and approve a product for railway level crossings that is already in widespread use on A roads and motorways?
Earl Attlee
My Lords, the noble Lord has asked quite a few questions. User-worked crossings are indeed very hazardous. There are 2,500 of them and they are often used as farm crossings. He also asked about their financing. It can be very difficult to build a good business case because of the low risk of an accident occurring at each individual crossing. He also asked me about the trialling of cameras. I am aware of this problem. Similar problems arise in respect of roadside drug-testing equipment. It is important to recognise that approval of this equipment is an important component of our legal system. I understand that the British Transport Police has not yet submitted a formal application. For my sins I am the Home Office spokesman and I will draw this matter to the attention of my right honourable friend the Home Secretary.
Lord Bradshaw
I am sure my noble friend will agree that level crossings represent the largest risk of a serious rail accident occurring. Will he please give the House an assurance that the Government will look at the procedures for closing level crossings? Such closures are usually opposed by highway authorities down to the Ramblers’ Association and with 100 organisations in between, and yet many could be closed without serious detriment to public convenience. If he would do that I would be very much obliged.
Earl Attlee
My Lords, my noble friend is right to draw attention to this serious risk, which is why Network Rail pays so much attention to it. It is important to understand that we have far and away the best record on this matter in Europe, with the exception of Ireland, which is only slightly better. In this control period Network Rail will close around 556 crossings. I imagine that many of these are footpath or farm crossings. However, providing just a footbridge costs £750,000. It is very hard to construct a robust business case given the very low chance of an accident occurring at any particular crossing. Network Rail is trying to reduce the cost of these bridges. It is important to understand that where the risk is known to be higher, a crossing system with increased protection will already have been installed.
Lord Davies of Oldham
My Lords, after the court judgment against Network Rail in February over deaths that occurred on a level crossing, the executives donated their bonuses to a charity to promote level crossing safety. Is the safety of our railways to be dependent on such quixotic gestures, or should the people responsible for the safety of the railways make sure they do a proper job?
Earl Attlee
My Lords, the biggest problem with level crossing safety is the behaviour of pedestrians, particularly when they get distracted. All four fatalities that occurred last year were behaviour-related and almost exclusively involved a distraction problem. The best thing that Network Rail can do is to educate people, so that sounds like rather a good strategy on its part.
Viscount Tenby
My Lords, is the Minister satisfied that the legislation regarding people who deliberately flout the regulations on level crossings is sufficiently draconian?
Earl Attlee
My Lords, the noble Viscount’s question links in very well with that of the noble Lord, Lord Faulkner. It is of course a very serious motoring offence to zigzag around the barriers, but you need to have the evidence to prosecute. The noble Viscount makes a good point, and that is what we are working on.
Education: Engineering
(12 years, 1 month ago)
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Lord Trefgarne
To ask Her Majesty’s Government whether they will reconsider their decision to downgrade the engineering diploma to one GCSE equivalent.
Lord Trefgarne
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I need to declare an interest: I am the former chairman of SEMTA, previously the Engineering Training Authority.
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)
My Lords, reforms to school performance tables are intended to raise the status of qualifications and not downgrade them. We want a simpler system where qualifications have an equal value and are selected because of their benefit to pupils, rather than their league-table weighting. We are encouraging engineering employers to work with awarding organisations to develop successor qualifications to the diploma. Engineering is extremely important for the future of the British economy. That, of course, is one reason why we are expanding university technical colleges and engineering apprenticeships.
Lord Trefgarne
My Lords, while I understand the arguments put by my noble friend, is he aware that the proposition on the engineering diploma has received the condemnation of providers, regulators and employers alike, and now of the Business Secretary himself? Will the noble Lord therefore please reconsider?
Lord Hill of Oareford
I am aware that this matter has given rise to some strong opinions among those who are committed to the engineering industry. I am afraid that I am not able to give the noble Lord the commitment that he would like, because the overriding objective of trying to simplify the qualifications is to have a consistent approach across different subjects and areas, and the benefit that we think we will derive from simplification is worth striving for. I recognise that there are strong concerns. I am glad that engineering employers are talking to the awarding organisations that want to carry on offering the principal learning element of the engineering diploma, and I hope that that will continue. I urge the noble Lord, with his experience, to help us in those conversations.
Baroness Howe of Idlicote
My Lords, does the Minister agree that whether one GCSE equivalent or more is required to qualify, there is an even greater need to increase the number of girls who apply for this career and make it much more attractive to them, because their skills will clearly be needed much more than in the past?
Lord Hill of Oareford
My Lords, I agree with the noble Baroness about the importance of that, and I know that it is one of the issues that the university technical colleges are grappling with because they are keen to encourage that kind of take-up. The noble Baroness is right to remind us of that, and I hope that we will see the figures increasing.
Baroness Wall of New Barnet
My Lords, does the Minister agree that the comments of the noble Lord, Lord Trefgarne, supported by the noble Baroness, Lady Howe, are crucial? The Government aim to involve more women in science, technology, engineering and manufacturing, yet the diploma encouraged more women to be involved in those subjects than had previously been the case. There is a lack of understanding among employers of why the Government felt the necessity to move away from that. The diploma is recognised and valued, and I urge the Minister—as did the noble Lord, Lord Trefgarne—to rethink the position.
Lord Hill of Oareford
My Lords, there are two separate issues. So far as the diploma generally is concerned, the reason that the Government have taken their decision is that we do not want to favour a particular kind of qualification that then receives additional funding to support its take-up over other qualifications. We want qualifications to be driven by the interests of the children and the awarding organisations. I completely agree with the points made about the importance of making sure that employers are involved with the development of qualifications, and it is my hope and belief that employers will work with the awarding organisations on the replacement of the principal learning element of the engineering diploma, which is the core issue at stake here, and that we will have well regarded and rigorous qualifications that will encourage the take-up of engineering, other technical subjects and vocational qualifications. The route to having more people taking these subjects is to make sure that they are properly valued by employers and everyone else.
Baroness Walmsley
My Lords, does my noble friend agree that the quality of teaching of engineering and other science and technology subjects is important? Perhaps he will he join me in condemning the following practice. A survey was sent out to assess the demand for a 16 to 19 STEM free school, which offered an iPad as a prize for completion, and gave only one option on the question as to whether the school would be the person’s first choice. That answer was yes. What is his department doing to identify such exaggerated demand, and will he specifically ban the offering of incentives and the use of unbalanced questions?
Lord Hill of Oareford
On the first point about the importance of STEM subjects and making sure that there are teachers able to teach them, as my noble friend will know, we are working hard to encourage the supply of those well qualified teachers. On her second point about the free school application, I am grateful to her for bringing it to my attention. It is the first time I have heard of it. I will refer it to the officials who will be carrying out the first sift of the applications, because the important test of evidence of demand must be genuine evidence of demand for a particular school.
The Earl of Listowel
My Lords, does the Minister share my concern that in the latest unemployment figures, 22 per cent of 16 to 24 year-olds are unemployed —the highest percentage since records began? Does that not indicate the great importance of what he said, which is that the curriculum needs to attract and interest children of all kinds, so that they stay in education as far as they can to get the qualifications that will give them hope of a job when they complete their education?
Lord Hill of Oareford
My Lords, I very much agree with the noble Earl. One encouraging point is the increase in the number of young people doing engineering and manufacturing apprenticeships, for example, which has risen by 30 per cent in the past year or so. The work we are doing with studio schools and with UTCs to encourage the take-up of vocational courses is all part of that, but I agree with the noble Earl’s fundamental point that one wants qualifications and courses for children of all ranges of interest, practical or academic. They should have parity of esteem, and the way to have that is through rigorous qualifications, not pumped-up ones.
Baroness Jones of Whitchurch
My Lords, given that the engineering diploma takes approximately 20 hours a week to teach, whereas a traditional GCSE subject takes up to five hours a week, how are teachers expected to persuade young people to take the engineering diploma in future when it is valued at only one GCSE? It takes 20 hours, but all you get is one GCSE. Surely young people who take it will never have the opportunity to accumulate enough GCSEs to go on to higher education. The Government are effectively killing it on the vine by downgrading it.
Lord Hill of Oareford
I do not think that that is true. Without being too technical about it over the Dispatch Box, the particular element at issue is the principal learning element. The diploma is an overall wrapper with a number of elements which add up to seven GCSEs. Those elements are perfectly free to continue. The principal learning element is the one that awarding organisations will discuss with employers to work out how best to continue to develop qualifications. The ultimate point is that, given the support that there is for engineering qualifications from employers, when young people see that there is a chance of progression to a good job with an engineering employer, that will be one of the strongest incentives for them to study engineering and pursue those courses.
Disabled People: Employment
Lord Touhig
To ask Her Majesty’s Government what alternative employment they expect to be available for the disabled Remploy workers who face losing their jobs as a result of the decision to reduce the subsidy to Remploy.
Lord De Mauley
My Lords, the Government are totally committed to increasing the number of disabled people in work. We have made £8 million available to establish a comprehensive support package to support every disabled employee displaced from a Remploy factory with the transition from government-funded sheltered employment into mainstream employment. We are working with employers to ensure that all potential opportunities are identified and accessible to Remploy employees. The Government are working with the Employers’ Forum on Disability to develop plans for employers to offer targeted work opportunities for displaced staff.
Lord Touhig
My Lords, the Welsh Government have said that if the Remploy budget for Wales is handed over to them for the next three years, they will aim to restructure the company, maintain jobs and protect its future. Why have the Government rejected the opportunity to keep disabled people in work, earning wages and paying taxes rather than being unemployed and living on benefits? Will the Government think again on that Welsh government offer?
Lord De Mauley
My Lords, I say, first, that I absolutely understand why the noble Lord is raising this Question. The threat of redundancy is deeply concerning for anyone, and most of all, I am sure, for disabled people. This matter is not devolved to Wales and the funding will not be devolved. Remploy’s employment services have a good record of placing disabled and disadvantaged people in work in Wales, with more than 2,300 people having been helped in the past year, and there are a large number of notified job vacancies—in fact, 110,000—in the local authority areas where the nine Welsh factories are located. Therefore, although I understand the concerns, I think that there are reasons to be optimistic about the prospects of the individuals who will receive tailored individual support.
Lord Walton of Detchant
My Lords, I express particular concern about the proposed closure of the Remploy factory in Spennymoor, County Durham, where I attended the grammar school. This is already an area of high unemployment, with a number of other factories having closed. What employment opportunities for disabled individuals have the Government been able to identify in that area, if and when this factory closes?
Lord De Mauley
I am grateful to the noble Lord for that point. I cannot answer specific questions about geographies but I can say that we are absolutely committed to supporting Remploy employees. I have mentioned the £8 million comprehensive personalised package of support for all those who are affected by these proposals. Any disabled member of staff who is made redundant will receive an offer of individualised support for up to 18 months to help with the transition from government-funded sheltered employment into mainstream employment. This will include access to a personal budget to aid that transition. As I have said, we will also be working with employers and the Employers’ Forum on Disability with a view to offering targeted work opportunities.
Lord Wigley
My Lords, following the point made by the noble Lord, Lord Touhig, does the Minister accept that the responsibilities of the National Assembly for Wales include both disability and aspects of employment, and that, indeed, in the context of the Welfare Reform Act the Government are passing resources to the Assembly to undertake responsibilities on what have been non-devolved subjects? Given that, is it not possible to respond positively to the question put by the noble Lord, Lord Touhig?
Lord De Mauley
My Lords, I am afraid that I have answered that question and I have nothing further to add.
Lord Stoneham of Droxford
My Lords, I am sure the House recognises that the decision to reduce segregated employment for the disabled is difficult but inevitable. Given the importance of support and transitional arrangements for those affected, can the Minister tell us what lessons the Government learnt from the 28 Remploy factories closed under the last Labour Government?
Lord De Mauley
My Lords, quite a lot of lessons, and those lessons have very much been taken into account. As I have said, the Government are absolutely committed to supporting Remploy employees who may be affected by the changes.
Lord McKenzie of Luton
My Lords, we support the Access to Work programme—indeed, we developed it —and we support helping disabled people into mainstream employment. Therefore, we support the focus on these programmes. However, why is this being done at the cost of putting 1,500 disabled people out of work at a time when the Government’s own statistics show that disabled people continue to be disadvantaged in the labour market and when we heard just yesterday that unemployment is at its highest rate since 1995?
Lord De Mauley
My Lords, I do not think it is a question of favouring one group over another; it is a matter of targeting the resources better at the whole disabled population. Remploy takes up one-fifth of the entire budget of employment support for disabled people. We feel, and indeed are advised by the Sayce review and the disabled lobby, that this is a more appropriate way to target the resources.
Baroness Farrington of Ribbleton
My Lords, will the Minister confirm that nothing in the legislation concerning devolution to Wales would prevent the Government doing what the Welsh Assembly wants?
Lord De Mauley
My Lords, I cannot give the noble Baroness an answer to that because I have not studied the devolvement legislation. However, I will write to her with an answer.
Water Industry (Financial Assistance) Bill
House of Lords: Peers’ Car Park
Lord Barnett
To move to resolve that the arrangements in respect of access to Peers’ car park be restored to those in force before 3 January 2012.
Lord Barnett
My Lords, the difficulty with the car park arrangements are well known to Members of your Lordships’ House. I have spoken about them before and have no need to dwell on them, but the House will know that we have never had an opportunity either to debate or to decide on these car park arrangements.
When I raised the issue with the Chairman of Committees, I was told that it was a matter of security. Security? We have had a Black Rod since 1361 and it is very insulting to all of them to be told that they have left us in danger of possible terrorist attacks. The plain fact is that a terrorist would have to be an idiot not to know about the arrangements for coming in and leaving this House. To give “security” as a simple answer is simply not good enough. Black Rod himself has now slightly amended the rules. We did not know about that and we have still not had an opportunity to discuss the issue at any stage. I gather that at long last these new arrangements were put in place yesterday. They are a slight improvement but it still means that disabled Members of your Lordships’ House will be put in huge difficulty.
I said that I would not speak for long and I do not intend to, but the plain fact is that it was done without this House having an opportunity to debate the issue at all. That is why I tabled the Motion on the Order Paper. Members should decide for themselves what they want to do. In those circumstances, I beg to move.
The Chairman of Committees (Lord Brabazon of Tara)
My Lords, following the comments that we have just heard, it might be helpful if I were to say a few words. Following his remarks on 16 February, I wrote to the noble Lord, Lord Barnett, laying out all the details of the decision-making process on the trial in the Peers’ car park and the ways in which this had been communicated to the House. I also pointed out that the Floor of the House is not the appropriate place to discuss matters of security and I therefore regret that this matter has been raised again on the Floor of the House, especially at such short notice.
However, I would like to take a few moments to explain to the House why the Administration and Works Committee has reached the conclusions that it has on this matter. The committee first considered the new arrangements for the Peers’ car park on 29 November 2011 and concluded that they were necessary on the grounds of security. Following that meeting, I made a Written Statement to the House on 8 December, and before the Christmas Recess a display was erected in the Peers’ cloakroom with details about the new arrangements, along with a diagram. Following concerns from Members about the new arrangements in the new year, I made a brief Oral Statement on 16 January, announcing that I had asked Black Rod to produce an interim report on the trial and that the committee would consider this again at its meeting on 7 February. At that meeting, the committee unanimously agreed that there were compelling security reasons for the new arrangements to remain in place.
I understand, of course, that some Members have found the new arrangements problematic, but I am grateful to those who have put forward constructive suggestions for improvements. The committee recognised that there were some practical difficulties with the new arrangements and therefore agreed that further permanent changes should be made to improve the Peers’ car park in the future. These changes will include: creating a specially designated lay-by for taxis, which will allow taxis to drop off and pick up passengers without impeding pedestrian access and without causing congestion; locating the lay-by directly opposite the Peers’ entrance to shorten the distance between the taxi drop-off point and the Peers’ entrance; altering the exit arrangements for leaving the Peers’ car park to speed up exit times; rearranging the street furniture to remove the short section of contraflow traffic; and providing a clearly delineated walkway for pedestrians. It is expected that these changes will be completed by the end of the Summer Recess. I hope that they will address the points which noble Lords have raised.
Following the committee’s agreement to those changes on 7 February, I made a Written Statement on 9 February outlining our conclusions, not yesterday as the noble Lord, Lord Barnett, said. A diagram of the proposed changes is now on display in the Peers’ cloakroom. I would like to point out that the Administration and Works Committee contains representatives of all the major parties and the Cross-Bench Peers, including the Whips and the Convenor, and is the route by which Members of the House are consulted about such matters. My Statement made it clear that both Black Rod and members of the committee were willing to discuss this matter further with other Members in person. I therefore maintain that the committee has conducted its business in a completely open and transparent manner. Furthermore, I believe that the members of the committee have done as much as possible to ensure that Members have been kept informed of the changes to the Peers’ car park, that Members’ feedback has been acted on and that future changes have been communicated to the House.
The changes to the Peers’ car park have been considered in great detail and agreed for good reasons. The parking of cars in the Peers’ car park without a prior vehicle security search has been identified clearly in successive reviews of the security of the parliamentary estate as a significant vulnerability to the Palace of Westminster and to those who work and visit within. The Joint Committee on Security has understood and accepted this.
While there is nothing in our rules to prevent security matters being debated, it is a long-standing convention that security is not discussed in the Chamber, and it is common sense that it would clearly be unhelpful if any discussion of security, which might well expose weaknesses in the House’s security arrangements, was conducted in public. While there can, of course, be a discussion about the detail of the measures that are in place to lessen the vulnerability, which they clearly do, as was affirmed by the Joint Committee on Security earlier this week, the parliamentary security director advises strongly that this discussion should not occur on the Floor of the House. He has advised that,
“such public disclosure of a security issue at Parliament would thereafter need to be included in security risk assessments about the safety of the front of the Palace and arguably would lessen the flexibility for change, and could lead to a requirement for more stringent measures”.
For these reasons, I strongly discourage debate on these matters of security, and I hope the noble Lord, Lord Barnett, will feel able to withdraw his Motion.
Lord Peston
My Lords, I rise reluctantly because everything the Chairman of Committees has said is wrong, and I intend to make that very clear. First, I thank my noble friend Lord Barnett for persisting in his demand that we discuss this matter. In my 25 years here, I have never known any attempt compared with that of the powers that be at present to stop a Member of this House airing his views on a subject of major importance. What the powers that be have been up to is an absolute disgrace, and I would like to hear at least one of them apologise to my noble friend and thank him for bringing this to our attention rather than the contrary.
In connection with that, there is no rule that we cannot discuss security, and there never has been. There is no convention, and there never has been. I say that in terms in case Members have believed what they have just been told. It is not the case. If the powers that be thought that there ought to be such a rule, the proper procedure would be to propose a Motion to this House saying that and saying that in their view that is how we ought to proceed, and then we could discuss whether we want that rule and agree it one way or another. They chose not to do that, which is why I am speaking in such strong and angry terms. I do not know what noble Lords would say if such a Motion were put before them, but how could I know if no one puts that Motion before us?
Let me say in addition that it is my view that what is being proposed does not remotely make your Lordships’ House or, more importantly, the people who come here, including those who work here, more secure; in my judgment, it makes them less secure. I sit on the Joint Committee on Security. Indeed, I am the longest serving member of it. My favourite joke is that when I was first put on it, I was told, “Of course, this is a complete formality. The committee will never meet”. That is what happened for a great many years, but then suddenly it seemed to meet regularly.
The committee met on Monday and these proposals were discussed. I went on record as opposing them. I hasten to add that I was the only person on the committee to do so. I do not mind being a lone voice. As noble Lords know, I am fairly frequently a lone voice in this House on matters of the economy. On this occasion I was rather puzzled because at least two other members of the committee were present who had spoken at earlier meetings and whose very important interventions had very strongly influenced my view about what was being proposed. However, on that occasion they decided to keep their mouths shut.
Let us use a little common sense. There is nothing secret about the new parking arrangements. When they were first proposed, vast numbers of bits of paper were left lying around telling us what they were. Those documents were available to all. Even a terrorist of below-average intelligence could see that we had new ways of going in and out of the car park. The idea that, if we discussed it here, that would be the first time any of these potential terrorists had heard about it is preposterous. I keep using strong language because we are being offered the most ridiculous arguments by the Chairman of Committees.
If these potential terrorists walk by, they can see the cars being searched. It is not news to them that they had better not arrive in a car because it might be searched—they can see them being searched and they know that. That seems to have escaped everyone’s notice, but have the Chairman of Committees and others noticed that large numbers of tourists come to the Palace of Westminster? They all have state-of-the-art cameras. They photograph the Victoria Tower and its environs, including the area in which we park our cars. Even if none of them is a terrorist, I would have thought that your average terrorist might approach them and say, “Can I have a printout of what you have just been filming?”.
The idea that our taking part in any of this discussion is of help to the terrorists is simply absurd. Indeed, the way to deter the terrorists is to let them know that we know what is going on, we know what the threat is, and we are determined to do something about it—not to let it drift along.
Let me give an example—I can give many others, but I do not want to go into detail—of why I believe we are in more danger with this new system than we were with the old. Before, we simply drove in, we wore our badges, we were waved in and we parked our cars. When we were ready to depart, we simply drove out. At no point were we standing still, waiting to get in or out, other than showing our badges for a brief moment. Under the present system—and this is particularly true of our leaving—because of the taxis all appearing just at the exit, very frequently I am sitting in my car for quite a while. When I complained about this, the poor old policeman, who had enough troubles without me moaning at him, said, “Black Rod has told us that we must give taxis priority and you have to wait”. So I wait and I become a target.
When this first came up, I pointed out that in my judgment we were not getting the true story of what is driving it. None of this has been demanded by your Lordships. Sitting as I do on the Joint Committee on Security, at the start the chairman said that the Commons is doing this sort of thing and is demanding that we do. It is not us driving this issue but the other place.
Baroness Royall of Blaisdon
My Lords, I do not think that we should prolong this debate, but I am sure that it is not proper to discuss security issues in relation to this House on the Floor of this House. I also believe that Black Rod has a duty to ensure the security of this House and that we as a House have a duty of safety to our staff as well as to its Members. However, I understand the concerns expressed by my noble friend on behalf of many Members of this House, especially the elderly and disabled Members. I admire the doggedness and determination with which he has pursued this issue.
I regret that the Statement made by the Lord Chairman on 9 February was a Written Statement and not an Oral Statement. I also regret that, having taken into consideration the views of Members of this House such as my noble friend and others on the new arrangements, changes have been made but Members of this House have not properly been made aware of the necessary changes. I do not know why that has taken so long. I certainly accept that it will take some time to implement the new changes. I pay tribute to my noble friend for raising this issue but, as I have said, I do not think that it is proper to discuss security issues on the Floor of the House.
Lord Laming
My Lords, I am a member of the Administration and Works Committee. I hope very much indeed that the House will reject this Motion. The committee has gone into this matter in greater and greater length. As a member of that committee, as well as the Joint Committee on Security—the noble Lord, Lord Peston, has referred to other committees as well—when it met recently, I was not one of the members who remained silent. I pay tribute to the chairman of the Administration and Works Committee and to Black Rod for the thought that has been given to this issue.
In simple terms, if the committee receives a security report which we take seriously, we can do nothing; we could close the Peers’ car park and rob the House of important car parking space; or we could take some action to reduce the risk. This is an iconic building that has appeared on the lists of many apprehended terrorists. It would have been irresponsible of the committee not to have taken action. For very good reasons, it wants to keep the car park and therefore some other arrangement had to be made.
These plans were shown all around the building. The reasons for them have been adequately explained. The arrangements will be improved. There has already been an indication of the way in which they will be improved over the summer. I agree that we have discussed this at enormous length and I hope that the House will reject this Motion.
The Lord Bishop of Exeter
My Lords, I, too, am a member of the committee that made these recommendations. The committee was unanimous and it is important that noble Lords hear a brief contribution from each of the Benches. The committee came to its view only after the most careful deliberation and the very clearest security advice. I, too, regret that this is being taken on the Floor of the House where the advice we were given simply cannot or, at least in my view, should not be discussed.
The committee listened very carefully to the concerns raised by Members of your Lordships’ House. We will continue to do so and will try to be responsive to need, but I believe that we have to be driven by very real security considerations. To provide any support for this Motion would be foolish and culpable in the extreme.
Lord Campbell-Savours
My Lords, I am also a member of the committee and I oppose the Motion moved by my noble friend. I have one very brief thing to say. Like my noble friend on the Front Bench, I have a regret, and my regret is quite simple. It is that my noble friend Lord Barnett, who is a distinguished privy counsellor, was not told on Privy Council terms the real reason why we have introduced the changes. My belief is that if he had been informed on Privy Council terms, he would not be moving the Motion today.
Lord Newton of Braintree
My Lords, I think that someone should say something from this side of the House. As one of the disabled people who has been inconvenienced by these arrangements and who, to be honest, was initially very stroppy about them, I have two things to say. The first is addressed to the noble Lord, Lord Peston. It is not a question of whether we are banned from talking about security: the plain fact is that you can talk about security only if you talk about risks, and not just the risk which might have been headed off with this action but also a lot of other risks which might not have been headed off. By doing that you alert people to all your anxieties—which is one of the general points about risk registers overall, but I will not go down that path. The second point is that after some initially rather tetchy conversations with senior people in Black Rod’s office, I found myself persuaded by the information that was conveyed to me privately. That rather picks up the point that has just been made by the noble Lord, Lord Campbell-Savours. I hope that the noble Lord, Lord Barnett, will not press the Motion. I have a deep affection for him, but I could not vote for him.
Lord Mackay of Clashfern
My Lords, I think that it is absolutely clear that Members of this House would be able to discuss any matter if they wished. On the other hand I believe that Members of this House exercise a wise discretion in not having a public discussion about matters of security, and that the arrangement by which these matters are left to a committee has worked well in the past. It is obviously necessary when making arrangements that seek to eliminate security risks as far as possible to take the convenience of Members of the House into account. Therefore, I think that it was very necessary that the consideration of the noble Lord, Lord Barnett, and the difficulties that he and others faced with the new arrangement should be taken into account. As I understand it these have now been taken into account; whether that has been done to the noble Lord’s complete satisfaction, I am not absolutely certain. Anyway, I hope that that can be done.
These are lessons to be learnt in the way in which the committee may be administered. However, I do not believe that it is at all wise for us to discuss these matters on the Floor of the House, not because we cannot do so but because it is just unwise for us to do so. I hope that all of us may subscribe to that. I have every confidence in the committee and in Black Rod and in those who advise the committee on security matters. However, I do not believe that it would be at all advisable for us discuss these matters here. I hope that the noble Lord—for whom, as he knows, I have the greatest respect and affection—will find it a success that he has brought these matters so far to the attention of the House; that his difficulties will be considered even further if that is necessary; and that he will withdraw this Motion. I believe that that would be a sign of what I know he is: a very great man.
Lord Faulkner of Worcester
My Lords, this intervention will be very brief indeed. I speak as a member of the committee and I endorse totally the view, particularly of the right reverend Prelate, that it would not be appropriate for us to describe here the sort of threat that was described to the committee and which led to this decision being taken. It is important that Members of this House should understand, as others have said, that the committee’s decision was taken unanimously by the Chief Whips of all the three political parties, who were present, by the Convenor of the Cross Benches, by the right reverend Prelate and by the other Back-Bench Members such as my noble friend Lord Campbell-Savours and myself.
I want to refer briefly to one issue that was raised in the committee but which has not been properly referred to today. The committee received representations from staff working in the west front of the building who were concerned about their security. They do not have a voice in this House unless someone here articulates that view for them. However, that point of view is one that we need to take into account as well. I certainly hope that my noble friend will not press his Motion but if he does I shall vote against it.
The Chairman of Committees
My Lords, I am grateful for the short debate that has taken place, and I shall attempt to deal with some of the questions that have been raised. I am very grateful to other members of the Administration and Works Committee: the noble Lord, Lord Laming, the right reverend Prelate the Bishop of Exeter and the noble Lords, Lord Campbell-Savours and Lord Faulkner of Worcester, for their support. As they have all said, it was a unanimous decision, taken after a great deal of consideration by the committee, that this was the way forward.
I am afraid that I cannot say that I agree with very much of what the noble Lord, Lord Peston, said. First of all, I already addressed in my opening remarks the issue that it was not against the rules to talk about security. There was no rule against it, but it was undesirable to do so—and unwise to do so, as the noble and learned Lord, Lord Mackay of Clashfern, and the noble Lord, Lord Newton of Braintree, have said. I could not follow, I am afraid, the remarks of the noble Lord, Lord Peston, about it being no secret that the cars are now searched at Black Rod’s Garden entrance. They are, and anybody can see that. We have no worry with the fact that anybody can see it. The whole point of this is that they were not searched at all before when they came into the car park.
Lord Peston
There are no secrets to be revealed. Why is the noble Lord trying to stop us discussing something if nothing is secret?
The Chairman of Committees
I think that we have already dealt with that problem about the desirability. As the noble Baroness, Lady Royall, said, it really is not a good idea to talk about detailed security matters.
I take the point that the noble Baroness made about whether I should have made an Oral Statement on 9 February. Maybe I should have done, but I did give these details in the Written Statement. Although I know that we have only produced the new plan within the last day or two, the plan only reflects the details that I announced on 9 February. I really think that they will make an improvement to the situation. The taxi drop-off and collection lay-by will be much closer to the front door of your Lordships’ House. In fact, I am told that the distance from the new drop-off point will be almost exactly the same distance as going down one of the Division Lobbies. I noticed yesterday that the noble Lord, Lord Barnett, voted several times in the Division Lobbies; the noble Lord, Lord Peston, has no doubt done so as well. It has been no worse than that.
I take up the point that the noble Lord, Lord Faulkner of Worcester, made. He is absolutely right, as I hinted in my opening remarks, that we have a responsibility to protect not only ourselves but everybody else working on and visiting the parliamentary estate. The remarks made by Members about the new arrangements have not gone unnoticed by staff of the House, who are understandably concerned about this matter. In fact, I understand that when the Lord Speaker attended an all-staff meeting on 13 January, two days after this issue was first raised on the Floor of the House, the very first question she was asked was whether, in light of those comments, the safety of the staff of the House was a priority. I think that from today’s debate we can confirm to the staff that it is indeed a priority. I really do hope that the noble Lord, Lord Barnett, will feel able to withdraw his Motion.
Lord Barnett
My Lords, if there is one thing that this whole debate has told us, it is the ridiculous way in which this whole thing has been handled. Not a single word has been said in reply to the detailed comments made by my noble friend Lord Peston; we are just told that we should not discuss it, as the right reverend Prelate and others have said. However, nobody has answered in detail the points made by my noble friend Lord Peston. Of course we can discuss it. The idea that terrorists are idiots and think that you can get in only by taxi is so absurd that it does not bear contemplation for a moment. On 7 February, when the committee met and reviewed this as I had previously asked, the Chairman of Committees eventually told me that he had answered the point. How did he do it? It had been done in a Written Statement, deliberately to prevent us discussing it. That is why this House has never had an opportunity to debate this issue. We are told now, once again, briefly, that we should not discuss security. Yet nobody has said why we should not discuss security.
Scotland Bill
(12 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wallace of Tankerness
That the House do now resolve itself into Committee.
Lord Forsyth of Drumlean
My Lords, before continuing the Committee stage of the Bill, I should like to ask my noble and learned friend for some information about the progress that has been made on securing the legislative consent of the Scottish Parliament.
I should also like once again to complain about the fact that this Scotland Bill is being considered on a Thursday, when Members of this House who live in Scotland generally travel north. This matter has been raised previously. When I have raised it with my colleagues, I have been told that the Opposition have requested it. It is deeply inconvenient. I know that a number of colleagues have been unable to participate as a result.
I should also like to complain also about the time which has been made available for consideration of the amendments. All the amendments that I have tabled, and I have quite a number, relate to matters which were not considered in the House of Commons. All of them raise relatively serious points. I read on the groupings list that we will sit until the business is completed. I have plenty of stamina, but I would suggest that debating these matters relating to Scotland—we will of course try to expedite them—late on a Thursday evening is very unsatisfactory, especially when we are talking about an important constitutional Bill many of whose issues were not addressed in the other place where the Bill was subject to the usual guillotine procedure.
I return to the main point on which I feel the Committee should be advised, which is where we have got to on the question of the legislative consent Motion from the Scottish Parliament. This is important. Throughout the proceedings in relation to the introduction of new taxes in Scotland, my honourable friend David Gauke, the Treasury Minister, rested on the fact that a legislative consent Motion for the Bill had been passed by the Scottish Parliament, saying that,
“any future devolution must happen with the wholehearted consent of the Scottish Parliament”.—[Official Report, Commons, 14/3/11; col. 70.]
All the consideration of the Bill by the other place was on the basis that it had the support of the Scottish Parliament, but that is no longer the case.
There was a legislative consent Motion passed by the Scottish Parliament in March 2001. That is the legislative consent Motion which was noted on the Bill’s formal entry to this House. Indeed, the Explanatory Notes to the Bill state at paragraph 8:
“A further Legislative Consent Motion on additional amendments will be debated later in the legislative process”.
That referred to amendments to the Bill after consent by the Scottish Parliament. Since then, there has been an election in Scotland and there is a new Administration led by Mr Salmond. The committee of the Scottish Parliament, meeting on 13 December 2011, which was a year and one month after the First Reading of the Bill in the House of Commons, was unable to recommend that the Parliament pass a legislative consent Motion on the Bill until the Bill had been amended in line with the committee’s recommendations. It is of course for Mr Alex Salmond to table a Motion for legislative consent, which he has consistently refused to do.
I think I am entitled to ask my noble and learned friend what is going on here. The other place considers the Bill on the basis of a legislative consent Motion which no longer applies, with a Minister saying that we could not do this without the consent of the Scottish Parliament; at an earlier stage of the Bill, we were assured that negotiations were continuing with the Scottish Parliament and that Ministers had every confidence that they would have legislative consent; and now, today, we are about to embark on considering bringing in revolutionary tax powers for the Scottish Parliament and we still do not know whether we have a legislative consent Motion. What is the status of this and what is the Government’s position? Is the Government’s position as David Gauke told the other place, that any future devolution must happen with the wholehearted consent of the Scottish Parliament, and why are we taking so much time, with the House apparently being prepared to sit until the early hours of the morning if necessary, to deal with a Bill which may not meet the requirements of Alex Salmond and the Scottish Parliament?
Lord Foulkes of Cumnock
I wonder whether I might add a few words at the risk of being classified yet again as one of the terrible toxic twins along with the noble Lord, Lord Forsyth.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
Perhaps I may interrupt the noble Lord. We are speaking on a Motion to go into Committee. Unless the noble Lord has a very different point to make from that of my noble friend, who put it very well, why do we not allow the Minister to respond to that, and then put the Question, go into Committee and deal with the amendments in the normal way? I got the impression from the noble Lord’s first sentence that he was not making a new point but simply supporting my noble friend.
Lord Foulkes of Cumnock
If the noble Lord waited a little longer, he might find out exactly what I was going to say. It is always a good idea to sit and listen, rather than anticipate what someone is going to say and jump up. I used to represent the Leader of the House. I looked after his interests. I made sure that, as a resident of Mauchline, he was well looked after. I hope that he will give me some respect for having looked after his interests for 26 years, a not inconsiderable period of time, and allow me to speak.
I want to add to what the noble Lord, Lord Forsyth, has said. I agree with him in relation to sitting on a Thursday, which is another mischief that seems to have been done. I also want to raise something which the noble Lord, Lord Forsyth, did not raise; that is, the lack of time between Committee stage and Report stage. We have only one weekend between the two. How are we going to be able properly to formulate amendments between Committee stage and Report stage? I am also concerned about the fact that the second day of the Report stage is 28 March. This time, instead of choosing a Thursday, the Government have chosen the day before we go into Recess. It is rather like after the Lord Mayor’s procession when the dust cart comes along to clean up—we are being treated as an afterthought.
The most serious issue concerns the sequence of events for dealing with this legislation as between here and the Scottish Parliament. We are rushing it through and dealing with it quickly in Committee—we shall deal with it even more speedily on Report—and yet the Scotland Bill Committee reported on 13 December 2011 and that report has not even appeared on the agenda of the Scottish Parliament. When will it appear? I have been led to believe that the Government may have had some indication that there will be a legislative consent Motion. The Minister should tell us whether that legislative consent Motion is going to be tabled. If the Government know about it, if they have been given any informal indication that it is going to be tabled, we need to know that. It is ridiculous that we should be left in the dark. My noble friend Lord Barnett was left in the dark on a whole range of issues earlier and I have complete sympathy with him. This seems to happen an awful lot.
I hope the Leader of the House will give the House a little more information and allow it an opportunity and a little more time to discuss matters instead of things being done by a little clique behind the scenes.
Baroness Liddell of Coatdyke
The noble Lord, Lord Forsyth, has raised the issue of the legislative consent Motion and my noble friend Lord Foulkes has raised the issue of the timetable. We have also had within the process a consultation which concluded at the end of last week. At Second Reading we were told that one of the reasons for the truncated consultation process was to allow amendments to be brought forward at Report stage. However, there is a very short period of time between the Committee stage and the Report stage. I echo the points made by the noble Lord, Lord Forsyth, and my noble friend Lord Foulkes about this debate taking place on a Thursday and the final day of the Report stage taking place on the Wednesday before the Easter Recess
The whole process is in a muddle, and that is not the way to deal with a serious constitutional issue. I have the greatest respect for the noble and learned Lord, Lord Wallace of Tankerness, and I know that he would wish to be as straightforward with the House as he can be. I hope, too, that the Leader of the House, as the leader of the whole House, will not see this as some source of mischief but as an attempt to get to the bottom of what is happening.
Lord Browne of Ladyton
My Lords, it is with some reluctance that I rise to speak but I think that my contribution will substantially meet the criteria that the Leader of the House has laid down for this debate.
I addressed the House at some length on the first day in Committee setting out the reasons why I thought it was important that we should conclude our scrutiny of the Bill and present it back to the other place ready to become legislation. That was on 26 January and I do not intend to repeat all the points I made on that occasion. Those who are interested can read for themselves that 45 minute contribution in the Official Report. However, I do wish to make one or two important points.
First, I rebut the suggestion that we are meeting on this Thursday to discuss this part of the Bill at the request of this part of the Opposition. I cannot speak for all of the Opposition, of course, but I have been privy to many conversations, getting uncomfortably close to the usual channels in your Lordships’ House, and never at any time in these discussions did I ask, or was I party to a request from the Opposition, that we should meet on a Thursday.
Noble Lords ought to remind themselves of the somewhat chequered history of the management of the Committee stage in this House. It was the great plan that this day would be devoted to a debate about referendums. It was broadly agreed because the consultation would be over and it was expected that the Government would be able to come to the Dispatch Box and indicate what their response to the consultation would be. There was a degree of consensus that went beyond the Front Benches that it was appropriate to handle the matter in that fashion. However, as has consistently happened with the Committee days of the Bill, we have been subject to other items of business being imposed on them. We have just had the same thing today. In fact, we lost a whole Committee day for this Bill because it was seized from us for ping- pong on the Welfare Reform Bill. I was assured that that would take only a couple of hours—at the time I laughed uproariously at that idea—but it took all day and we lost a whole day in Committee.
There was an attempt, to which I was a party, by those who want to see this matter proceed appropriately to manage the business in such a way that we would conclude it within the appropriate time. However, there was no agreement that we would sit on Thursdays. A lot of what has happened has been imposed on me and other Members of the House by the circumstances of the business of the House. I understand that it has to be managed and I do not want to be part of that process, but any suggestion that the Opposition requested Thursdays is not correct to my knowledge.
Lord Forsyth of Drumlean
I apologise to the noble Lord if I implied that he was responsible for it. I was misinformed.
Lord Browne of Ladyton
I shall savour that apology. I am grateful to the noble Lord for his gracious apology. I shall bank it away because we may get to a point during the course of today when I will need it in order to bargain for others.
I am as interested as any Member of the House in where the discussions between the Government and the Scottish Government are in relation to the legislative consent Motion. However, I have been consistently of the opinion that the Scottish Parliament will pass a legislative consent Motion in relation to this Bill. I am also consistently of the view that we have promised the Scottish people that we will deliver the Bill in such a way that it can be enacted by a legislative consent Motion effectively and that we should keep our word to the Scottish people and to the Scottish political classes.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, picking up on the final point made by the noble Lord, Lord Browne, there was a commitment in the manifestos of all three parties—the Conservative Party, the Labour Party and the Liberal Democrats—at the last general election that we would seek to implement the Calman commission proposals, which this Bill substantially seeks to do.
On the issue of sitting days, I readily recognise the concerns. Indeed, I was told that the House would sit to debate the Scotland Bill on a Thursday and I have turned up today with my noble friend Lord Sassoon to respond to the amendments. The noble Lord, Lord Browne, indicated some of the issues that we have had to address. There was one day—Tuesday, 14 February—when, because of the time taken by the Welfare Reform Bill, we did not manage to debate anything. The decision was taken late in the day that it would not be proper to start our debates after 9.30 pm, and there was general agreement that that was the right decision. Our previous debate in Committee was on a Tuesday. Next week we will be in Committee on Wednesday.
On the point made by the noble Baroness, Lady Liddell, it was not on Second Reading but when we moved into Committee in January that the Government announced, as a result of representations they had received, quite properly, from my noble friend Lord Forsyth, that there would be a consultation. There were amendments on the Marshalled List to the effect that we would not deal with referendums until after the consultation period had closed. I indicated at the time that we would hope to deal with them in the week beginning 12 March, and today was originally identified as the date for doing so. However, as has been indicated, as we lost a day because of the ping-pong on the Welfare Reform Bill, we were not able to make as much progress on the last occasion as we had hoped. These debates will now take place next Wednesday, when there will be an opportunity to address the issues around referendums.
It is perfectly reasonable for my noble friend to ask where we have got to with the legislative consent Motion. A Motion was passed in the Scottish Parliament in March last year, which I suspect is the one that our honourable friend Mr Gauke was talking about. I have no doubt that the noble Lord, Lord Foulkes, voted for it, as he was still a Member of the Scottish Parliament at the time. It is also worth pointing out that on the final vote, Mr Alex Salmond voted for it, too, as did many people who are currently members of the Scottish Government. That legislative consent Motion stands until any subsequent Motion is tabled that updates it.
The Government intend to secure a legislative consent Motion from the Scottish Parliament in favour of the Bill—
Lord Forsyth of Drumlean
My noble and learned friend says that the legislative consent Motion stands. However, will he deal with the view of the committee—which is the latest consideration by the new Parliament, where there is now an SNP majority rather than a minority—that it was unable to recommend that the Parliament pass a further legislative consent Motion on the Bill until it had been amended in line with the committee’s recommendations? As we discussed before, there are 45 recommendations, which effectively deliver devo-max.
Lord Wallace of Tankerness
That is perfectly fair and I will come on to address that. I was simply making the observation that there is, currently, an outstanding legislative consent Motion, which was actually supported by many members of the current Scottish Government. It is certainly our intention that we should have a legislative consent Motion from the Scottish Parliament in favour of the Scotland Bill, and I and my ministerial colleagues have been working very hard to secure the support of the Scottish Parliament for such a Motion. I am sure the Scottish Government would acknowledge the same.
We have been working together to consider and to assess the request for amendments to the Bill. It would be wrong to speculate on the outcome of the work being undertaken with the Scottish Government, but the key point is that I can assure the House that we are working hard to ensure that the Scottish Parliament will vote in favour of a legislative consent Motion for the Bill. It would not be appropriate to get ahead of discussions between Ministers—as noble Lords have highlighted, it is for the Scottish Government to propose a legislative consent Motion and we must allow the interministerial discussions to continue and not get ahead of them. However, I know that my right honourable friend the Secretary of State had conversations yesterday with the Scottish Government. Indeed, before coming to your Lordships’ House today, I was engaged in discussions about moving forward, to get into a position where we can get an agreement.
The Sewel convention is about respecting the devolved areas for which the Scottish Parliament is accountable. It provides that the United Kingdom Parliament will not normally legislate on devolved matters without the Scottish Parliament’s consent. I believe we have gone further than with any other Bill in considering and taking on board the view of the Scottish Government and Parliament, and we will continue to work to reach agreement. The Secretary of State has made clear, in letters, phone calls and meetings with Scottish Government Ministers, that we will properly consider all their requests for changes to the Bill. I understand and readily recognise that noble Lords are keen to hear the outcome of the discussions with the Government, but I urge noble Lords to continue with their thorough scrutiny of the Bill, alongside our work to agree a legislative consent Motion. I hope that by the time we come to Report, it will have been possible to update your Lordships on the intergovernmental discussion.
Lord Foulkes of Cumnock
It would be helpful to be updated at that stage and to set a target, in our plan, for an update to take place on the ministerial discussions. Given the upcoming recesses and the fact that the Bill will have to have Royal Assent before the final Dissolution of Parliament ahead of the Queen’s Speech, we do not have much time. It is important to plan the sequence of events. Can the Minister indicate what his target date is for the legislative consent Motion to go to the Scottish Parliament? Is it between Report and Third Reading, which would seem to be the logical time?
Lord Wallace of Tankerness
I agree with much of what the noble Lord says. He is right to point out that prorogation is sooner rather than later and that it is necessary to get Royal Assent before that. As has been acknowledged, it is not for United Kingdom government Ministers to table the legislative consent Motion, but the Scottish Government are well aware of the proposed timings and of the stages when any amendments would have to be laid so that your Lordships’ House would have adequate opportunity to discuss them.
Before I gave way to the noble Lord, I was about to indicate that I hoped it would be possible to update your Lordships before Report on intergovernmental discussions. It would not be helpful—and no doubt many of your Lordships present have engaged in such negotiations—for negotiations to take place by telegraphing from one parliamentary Chamber to another. That would be counterproductive. However, I reassure your Lordships that serious efforts are being made to reach agreement. Given the point made by my noble friend Lord Forsyth about the important issues we have to debate today, I hope we can agree to move into Committee so that we can get on and debate them.
Lord Grocott
Perhaps I may ask about a matter of significance to this Parliament. Will the Minister clarify whether there will be just five or six days between Committee and Report on the Bill? The noble Lord, Lord Strathclyde, is in his place, and he will know that the Leader’s report, which he commissioned, recommended very strongly that the minimum intervals between stages of Bills should be respected. As the House will remember, they were abused at the time of the Parliamentary Voting System and Constituencies Bill, and I would be troubled—as the House should be—if they are being abused again now.
Lord Wallace of Tankerness
My Lords, I hope that I can reassure the noble Lord, Lord Grocott, that this is not an abuse. The matter was agreed because we were meeting a legitimate concern and expectation, expressed by a number of your Lordships across the House, that we should defer some sittings of the Committee until such time as the United Kingdom Government’s consultation had concluded. That was welcomed at the time; and because of that, the timescales inevitably had to be short.
Lord Foulkes of Cumnock
With respect to the Minister, all that was agreed was that the discussion of the referendum should be taken in Committee. There was never any discussion about Report across the Floor of the House.
Lord Wallace of Tankerness
There was an expectation across the Floor of the House that we should defer Committee discussion until the end of the consultation. It was agreed between the usual channels that if we did that, it would necessitate a shortened period between Committee and Report—if only for the obvious reason of being able to get to Royal Assent, as the noble Lord pointed out.
Lord Forsyth of Drumlean
My Lords, I very respectfully remind my noble and learned friend that the Bill is before Parliament. In his remarks about legislative consent, he indicated that the Government might have to bring forward some amendments as a result of the negotiations that are being carried out by Ministers. Ministers cannot just presume the consent of Parliament. It strikes me as extremely odd that we should be half way through the Committee stage on a Bill that was introduced more than a year ago, and these negotiations are still continuing. I do not know if my noble friend is a fisherman. I am. If you want to land a salmon, you play it for a long time. In this case, the Salmond seems to be playing the Minister. He is deciding the timetable and what amendments may be put before us. We are being told that we can only consider them at the last minute, against a deadline. This is a ridiculous position for us to be in.
I have two specific questions for the Minister. Is he saying that, in the absence of a legislative consent Motion, the Bill will not go ahead? Or is he saying that he is in negotiation and will bring forward reasonable amendments, but that the Bill will go ahead? That is the crucial thing that he needs to tell the House now.
Lord Wallace of Tankerness
My Lords, there are a number of possible options if the legislative consent Motion is not forthcoming, but every effort is being made to achieve it. Obviously, my noble friend is absolutely right that anything in any amendment that is brought forward will be subject to Parliament. As we well know, it is quite proper and consistent with our procedures for your Lordships to vote on anything they wish to. It will be for Parliament to decide the final shape of the Bill.
Lord Forsyth of Drumlean
My noble and learned friend said that Parliament will decide the final shape of the Bill, but there is a thing called a timetable. We know that the House will get up for the Queen’s Speech. We are against a time constraint, and if negotiations are continuing as the Bill proceeds, the opportunity for the House to do that will be limited. When my noble and learned friend says that a number of options are open to the Government in the absence of a legislative consent Motion, could he share them with the House? We are entitled to know whether the Bill that we are discussing will go ahead if we do not have a legislative consent Motion. That is a perfectly reasonable question, and the Minister cannot respond by saying that there are a number of options. There is only one option—yes or no.
Lord Wallace of Tankerness
That is two options, for a start, and a third option could be to pass it and park it. We are seeking to reach agreement, and my noble friend has repeated the truism that it will be for Parliament to determine the final shape of the Bill. If Parliament does not wish to agree, that may determine the reaction of the Scottish Parliament to a legislative consent Motion. But I emphasise that, as things stand, much effort is being made and considerable progress is also being made with regard to achieving a satisfactory outcome. As I said to the noble Lord, Lord Foulkes, we hope that we will be able to update your Lordships before the House considers the Bill on Report.
The Earl of Caithness
I apologise to my noble and learned friend for not being here when the debate started, but I was in a committee upstairs and may therefore have missed this point. If there are amendments as a result of further negotiations, will the House go back into Committee so that we can speak more than once on them?
Lord Wallace of Tankerness
The convention and the devolution guidance notes that update it state that we seek a legislative consent Motion before the last opportunity for amending. In your Lordships’ House, that would be Third Reading. Therefore, it was always anticipated that it would not be necessary to go back into Committee. I hope that after discussing the important point made by my noble friend Lord Forsyth we can go ahead and debate the important issues around the financial provisions in the Bill.
Lord Forsyth of Drumlean
“(9) This section is subject to section (Referendum about Scottish rate of income tax).”
Lord Forsyth of Drumlean
My Lords, this is an important amendment, which provides for a referendum if the sections of the Bill that introduce for the first time a Scottish income tax are enacted by the Scottish Parliament in such a way that Scottish taxpayers end up paying a higher rate of income tax than people in the rest of the United Kingdom.
I should point out that the order of consideration of amendments that has been circulated to the Members of the House is not actually the order that I have in front of me now. I do not know whether it is possible for further documentation to be provided so that we are all on the same page, as my amendments are now grouped with those from the noble Lord, Lord Foulkes.
The original provisions in the Scotland Act, which provided for a Scottish variable rate of income tax, gave the Scottish Parliament the power to raise income tax by 3p in the £1 on the basic rate alone. It did not apply to either of the other rates of income tax and was limited to 3p. As Secretary of State I well remember campaigning long and hard on the tartan tax, which is a much better name than the Scottish variable rate. The Bill seeks to abolish the 3p variable rate, although it was something that the Scottish Parliament voted for in a referendum. It was something that people campaigned for and against; it was subject to argument.
It seems extraordinary to get rid of something done by referendum without having a referendum to endorse that. I am no fan of the Scottish variable rate; I thought that having the power to set a higher rate of income tax in Scotland would result in great disadvantage to Scotland if it was ever used—and I am delighted to say that it never was used. Many people enjoy jobs and prosperity they would not otherwise have enjoyed had those powers been used, so I welcome the fact that the Bill abolishes the tartan tax and gets rid of the variable rate. This is great progress, but unfortunately it goes on to create a new power for the Scottish Parliament not just to set the basic rate of tax within a limit of 3p but to set any rate of tax that it chooses that will affect the basic and higher rates of income tax. That is a huge change, way beyond anything that was set out in the Scotland Act and way beyond what was put to the Scottish people in a referendum.
The amendment would give the Scottish people the right to decide whether these sweeping powers, which will inevitably make Scotland the highest-taxed part of the United Kingdom, are appropriate and desirable. In our consideration of the Bill at earlier stages, it has become apparent that in respect of many of the tax powers there is perhaps not widespread knowledge of this in this House or the other place. The extent to which people in Scotland are aware of the potential impact of the power is limited. I simply cite evidence the recent discussions in Scotland about more powers for the Scottish Parliament, which clearly show that many people advocating those powers do not realise that they are already in the Bill and, in some respects, beyond what they desire.
It is important, too, that this provision should be subject to a referendum not just on the principle that the previous Labour Administration, who took office in 1997, thought it appropriate to have a referendum but because so many of the details about the operation and implementation of the tax, and its extent and the scope, are not actually provided in the Bill. For example, as the Bill stands, people with income from savings or dividends will not pay the Scottish income tax, but people with income from pensions will. Why is that? How is that going to distort the relative desirability of pension and savings investments of a more conventional kind? The Bill does not give the Scottish Parliament the ability to change the thresholds for income tax purposes or the ability to increase the rates by differential amounts, so it would be impossible for the Scottish Parliament to set a higher rate of tax while keeping the basic rate at the same level. Why is that? Should those matters not be subject to debate and consideration?
The effect of implementing this power in the Bill would be that any higher income tax in Scotland would be a disproportionately heavy burden on the lowest paid compared with the highest paid, which strikes me as a rather extraordinary thing to do. Of course, in the Bill the amount of grant that is being reduced is the equivalent to 10p on income tax, which is a curious position. Why not have all the revenue from the income tax? Why have the 10p? These matters are being debated in Scotland now.
I hesitate to mention the late lamented poll tax, or community charge, but one of the problems with the poll tax was that it raised a relatively small part of local government revenue. The same was true of the rates, and therefore in order to make an increase in expenditure that fell for its burden upon the poll tax or the rates, you required a disproportionately large increase in the amount. One of the issues here is how this income tax power would operate. The Minister gave figures earlier in our deliberations and, as I understand them, 1p on income tax would raise £420 million. That is a relatively small sum when one thinks that the Scottish Parliament is having to reduce its funding by £3 billion to meet the deficit reduction requirements. Allowing for a reduction in yield, that is the equivalent of allowing for 8p on the basic rate of income tax. On my calculations, that is a 40 per cent increase, whereas 8p on the 50p rate of income tax would be a very much smaller percentage increase.
A number of issues about the operation of this income tax, both in its scope and in the limitations on the powers of the Scottish Parliament, have not been debated or considered at all in Scotland but ought to be, and almost certainly would be debated or considered if there was a requirement to have a referendum before these powers could be implemented. The most important thing about taxation—the very nature of the other place—is in ensuring that taxes are not levied without consent, and that those raising the taxes are subject to the accountability of the people. This is a huge change. It is not one that I welcome but I acknowledge that I am in a minority, in this House and in the other place, in forming that view.
The people of Scotland should have an opportunity to have an explanation of what is being suggested, and the chance to give their verdict on it. This amendment attempts to do that, and in doing so it merely reflects the view of all parties when they campaigned for devolution in the first place, which was that there should be a referendum on the tax-raising powers.
Lord Foulkes of Cumnock
I wonder whether everyone in the House is absolutely clear, because I am slightly confused about it, that we have now degrouped from my amendments the amendments tabled by the noble Lord, Lord Forsyth, on the referendum on taxation powers, so we are just dealing with Amendments 53, 55, 56 and 57.
Lord Wallace of Tankerness
It is certainly my understanding, and I think it is the understanding of my noble friend, that the amendments tabled by the noble Lord, Lord Foulkes, Amendments 66 to 69 and Amendments 75, 76, 84 and 86, are now grouped with the amendments to which my noble friend has just spoken. We are at the moment trying to get a fresh piece of paper that sets them out. It is my understanding that they are on much the same subject.
Lord Foulkes of Cumnock
We are very confused, because I got a draft that said that, but the paper from the government Whips’ Office with today’s lists for your Lordships’ House lists the Questions that were tabled, my noble friend Lord Barnett’s Motion and, as the main business, this Bill and the target for today. It then has the grouping for amendments. Everyone picked this up on the way in, and I have assumed that that is the basis on which we are debating.
Lord Forsyth of Drumlean
I have the same problem. I have a revised list that I got from the Whips’ Office and it would be really helpful if the revised groupings could be made available. It is of course not for me to give the noble Lord advice. He can insist on degrouping his amendments, but as they are about referenda it would make sense for them to be grouped together.
Lord Foulkes of Cumnock
I specifically asked in an e-mail, which got a response from the clerks’ office, for my amendments to be degrouped from those tabled by the noble Lord, Lord Forsyth. It is not that I want to be disassociated from him completely, but because although I have tabled the appropriate amendments to allow a referendum, the basis on which I will argue for that—and I hope to argue for it later, which is why I wanted to clarify this now—is entirely different from the basis on which the noble Lord, Lord Forsyth, is arguing for it. I actually want the Scottish Parliament to be given full fiscal responsibility and to have all these additional taxation powers, but only if they are approved by the Scottish people in a referendum. That is an entirely different basis of argument, and why I wanted it separated. Can I assume from the list that I have that we are dealing just with Amendments 53, 55, 56 and 57 now, and that my Amendments 66 to 69 will be dealt with after Amendment 65, tabled by my noble friend Lord Barnett? Is that agreed?
Lord Lyell
My Lords, I was delighted to see my noble friend Lord Attlee here, because I was about to follow some of his grandfather’s advice: that a period of silence from me had been welcome until now. Today, however, I shall break my duck regarding income, in strong support of my noble friend Lord Forsyth. This is a preliminary strike about dividend income and pensions income.
I am sure that my noble and learned friend will be able to give advice at an early stage, but on page 25 of the Bill we come to Clause 31, headed, “Income tax for Scottish taxpayers”. At lines 34 and 35 in Clause 31(3), new subsection (3C) refers to Section 16, which I presume to be that of the Income Tax Act 2007. It says that it,
“has effect for determining which part of a Scottish taxpayer’s income consists of savings income”.
As a non-practising member of the Institute of Chartered Accountants of Scotland, but very much as a consumer who takes advice, I seem to recall that until 10 years ago one’s income tax was classified as earned and unearned income. Indeed, my colleagues with whom I worked then have confirmed that. However, we now have this completely different concept of savings income, earned income and other income being applied to Scottish taxpayers. It would be different from any other United Kingdom definition of what savings income or other income will be. Perhaps my noble and learned friend will be able to take note of that and cover it at some stage. However, I support most strongly what my noble friend Lord Forsyth has said at this stage. I am happy to let your Lordships know that this will be the first of one or two efforts from the mouse that roared, as I call myself—that is, the accountant in the backwoods of Angus.
The Earl of Mar and Kellie
My Lords, my noble friend Lord Forsyth is suggesting that we need another referendum on the use of tax powers. It is my memory that, 12 years ago, the second question in the referendum was along the lines of, “This Parliament should/should not have tax-varying powers”. Do tax-varying powers not strike a lot wider than the Scottish variable rate, which was enacted? Consent has already been given for any form of variation in existing taxes.
Lord Sewel
My Lords, I refer to the earlier discussion about groupings. Do I take it that the authoritative groupings list that we are working to is the one that is still being distributed by the Printed Paper Office?
Lord Wallace of Tankerness
I hope I can be helpful. My understanding is that my noble friend Lord Forsyth has spoken to a grouping of Amendments 53, 55, 56 and 57. He indicates that that is right. If there is some confusion it is because it was thought that the amendments in the name of the noble Lord, Lord Foulkes, which start with Amendment 66, had been regrouped. However, he indicated that that was not the case and that he will speak to them when we come to them. Therefore, the groupings of the amendments on referendums that we have here are definitive.
Lord Browne of Ladyton
My Lords, I thank the noble Lord, Lord Forsyth, for his amendments and for opening this debate. I also thank him for the opportunity to make a speech that will, I hope, over the hours that we will spend on debating these and related issues, be considered to be multipurpose.
I had expected—and anticipated in preparing my speaking notes—the amendments of my noble friend Lord Foulkes to have been regrouped, for maybe the second time, with those of the noble Lord, Lord Forsyth. Therefore, I wrote a note to myself to apologise to both noble Lords for giving a generic response, rather than addressing all the subtleties of the individual effects of their amendments. I do so because this is, ultimately, an issue of principle. I do not devalue all the detailed points that underpin the argument that the noble Lord, Lord Forsyth, put forward about the interesting debates that we could have in Scotland on the referendum and the detail of these specific taxation powers. However, whether we have a referendum on them is an issue of principle, and there are principles that we ought to apply. I will deal with that. I am sure that we will then get to the detail through the revised groupings, or re-revised groupings, of amendments that I have in front of me. The noble Lord, Lord Forsyth, has indicated that the details are exercising him.
My second point is one that I have made before. I deeply regret that timetabling prevented the other place dealing with the detail of these very important issues. The last time that we convened this Committee, we had a very interesting debate on Clause 28— probably for the first time anywhere in the United Kingdom, unfortunately. It is a matter of deep regret that our elected representatives in this Parliament were denied the opportunity for debate by timetabling, thereby denying us a quarry of their position that we could mine to inform our debate. Therefore, when we draw on what we believe is the will of the Scottish people, as expressed by their elected representatives, we draw on information that unfortunately cannot be in the public domain, such as conversations and observations. Some of us have expertise that we have built up over time from watching what is happening in Scotland and knowing, from the conduct of politicians, what the people they represent are telling them. That is deeply unfortunate but it is where we are. There is a bigger issue at stake in the politics of Scotland, but I will come to that strongly later in the debate. We should keep our eye on the prize, which at this time is the union of the United Kingdom. There is a political imperative at the moment that should dominate everything that we do. I regret that we are sometimes forced into undermining that by the way in which this has been handled, which has been deeply inefficient.
I turn to the principle of referendum. I do not believe that there is any constitutional imperative to hold a referendum on the devolution of financial powers to Scotland, as provided for by Part 3 of the Bill, for the following reasons. First, the conclusion of the Select Committee on the Constitution in its 2010 report, Referendums in the United Kingdom, was:
“We do not believe that it is possible to provide a precise definition of what constitutes a ‘fundamental constitutional issue’”.
It is a fascinating publication for the reasons that I am about to explain to your Lordships’ House. The committee did not look specifically at the example of the devolution of financial powers, although it could have because it was in the air. Therefore, noble Lords are entitled to look beyond such a conclusion to test whether what has been described by government Ministers as the largest transfer of financial power from London since the creation of the United Kingdom would be a likely candidate for a referendum.
In looking beyond the committee’s conclusions, we should look at the evidence that was heard, which is deeply instructive. If noble Lords will excuse me, I will go into this in some detail because it is interesting. Before I rehearse some of the evidence, I am prepared to concede that people who listen to this debate may think, on the basis of the expert testimony to the committee, that there is a legitimate view that that evidence tends towards the view that the devolution of financial powers would commonly be considered a candidate for referendum, given that the definitions posited included the following. I will share a number of them with noble Lords.
In giving evidence, Professor Gallagher referred to,
“fundamental questions concerning sovereignty or a major constitutional settlement, especially if they concern steps that would be completely or virtually irreversible once enacted”.
The Institute of Welsh Affairs, in its evidence on page 126, referred to,
“truly major issues of democratic principle—change that alters fundamentally the nature of the state”.
Caroline Morris, who is an expert, gave two definitions:
“Topics ... which directly affect the constitutional make-up and powers of a state”,
and,
“changes to the sovereign powers of a state”.
My noble friend Lady Kennedy of the Shaws gave the following definition:
“Anything that changed the power balances within our democratic system ... anything that in any way redistributed power in a significant sense”.
Professor Bogdanor cited:
“Legislative proposals which provide for a radical alteration in the machinery by which the laws are made”.
Professor Saward referred to,
“significant, encompassing and lasting change in the formal and general rules and rights which locate political authority”.
Professor Graham Smith mentioned,
“anything that changes the dynamic and the relationship between the people and those who are elected”.
All these definitions, which are not mutually consistent, could support the argument of the noble Lord, Lord Forsyth. However, they must all be considered against the backdrop of historic precedent. As the Constitution Committee noted in its analysis, no definition of principle can be extracted from historic precedent.
Lord Forsyth of Drumlean
I agree that all those definitions could be advanced and are open to argument, but what about something that has been approved by referendum but which you propose to reverse?
Lord Browne of Ladyton
I am grateful to the noble Lord for his intervention. I think that the somewhat delayed intervention by the noble Earl, Lord Mar and Kellie, on the noble Lord’s speech—it occurred long after the noble Lord had stopped speaking, but it was in the nature of an intervention—answered that point, but I will come to that in a moment. I think that I can answer that question.
Although it could be said that matters of significant constitutional change ought to be put to a referendum, many are not. Indeed, there was never a referendum on the Human Rights Act 1998—some people may regret that—the Fixed-term Parliaments Act, the Constitutional Reform Act 2005 or, indeed, if I anticipate the outcome of the debate that is presently taking place, on the future of your Lordships’ House. The House of Lords Reform Bill does not anticipate a referendum on that matter in the next Parliament. Therefore, although there appear to be certain broad principles on which academics and others can give evidence, which indicate what is a good candidate for a referendum, ultimately it seems that it comes down to a political judgment. We appear consistently to have exercised this power on the basis of political judgment. It is for this reason that I do not think we can discuss the noble Lord’s amendments—I anticipate my noble friend’s amendments—in a vacuum from the political environment. We have to defer to the political circumstances that face us during our consideration of this Bill. That is what I invite noble Lords to do.
I suggest that to require a referendum on the devolution of financial powers before the commencement of Part 3 of this Bill would be irrelevant in the present political context. Indeed, I go further—I think it would be irresponsible for the reason that the single fundamental question being posed to the people of Scotland at this time concerns the issue of secession. An additional referendum in this context would only confuse such a debate and distract from the single important question at hand. I understand that the circumstances have changed but we are discussing this matter now and not when we had expected that we would when this Bill was conceived as it emerged out of the Calman commission.
It is important to note that with the exception—it is an impressive exception—of the noble Lord, Lord Forsyth, and his shaky alliance with my noble friend Lord Foulkes, there is no political movement at all for any such referendum. There is no clamour for such a referendum in Scotland. I know that the noble Lord, Lord Forsyth, will say that is because many people in Scotland do not understand the implications of this piece of legislation.
Lord Forsyth of Drumlean
I hope I may interrupt the noble Lord again. His speeches are always carefully crafted and well thought through and I am enjoying listening to him. However, when he says that there is no demand for such a referendum in Scotland—I absolutely agree with him that the key issue is whether or not we are going to break up the United Kingdom—I had the impression that the First Minister, the Scotsman, Scotland on Sunday and every newspaper in Scotland were all campaigning that people should have an opportunity to have a referendum on devo-max. To my mind what is in this Bill is devo-max. Indeed, my noble and learned friend the Minister says that in my mind in some ways it goes beyond that. However, there are within the Bill the powers to deliver devo-max. Therefore, when the noble Lord says there is no demand for this in Scotland, I think there is a demand for a referendum on extra powers which are already being delivered by this Parliament, and which people are completely unaware of.
Lord Browne of Ladyton
I hope the noble Lord will not be surprised to hear that I anticipated this very point about devo-max. I intend to cover it very specifically. However, I am driven in these arguments by the political imperative of concentrating most of my political firepower on the arguments for retaining the union of the United Kingdom. I have tested every contribution that I have made to this debate against whether or not it makes that retention more or less likely. I ask noble Lords to join me in concentrating their minds on that issue, to look at this matter in the context of the political circumstances that face us at the moment and to make priority choices. In other circumstances I might well have supported the amendment of the noble Lord, Lord Forsyth, but in these circumstances I do not. I am trying to lay out the arguments.
As I was saying, there is no political movement for such a referendum. There is remarkably complete coherence between the parties in Scotland on the view that there is no necessity to seek a further mandate from the electorate as regards a referendum on these powers. Further, as the Calman commission noted, and the noble Earl, Lord Mar and Kellie, has reminded the House, there is an argument contrary to the argument put forward by the noble Lord, Lord Forsyth, that such a mandate has already at least partially been granted by the 1997 referendum on Scottish devolution in which 63.5 per cent of the Scottish electorate agreed with the statement,
“I agree that a Scottish Parliament should have tax-varying powers”.
That was the question, not plus or minus 3p, or what the consequences would be if this power was or was not used—we know the history of that—but whether the Scottish electorate agreed with the statement,
“I agree that a Scottish Parliament should have tax-varying powers”.
In a recent report on a referendum on Scottish independence, the Select Committee on the Constitution agreed with the UK Government’s position—this comes to the point the noble Lord raised about devo-max—that whereas independence is a Scottish question, devolution-max is not solely a Scottish question and proposals for a significant change to the devolution settlement considered under this title must be addressed only once the issue of secession has been clearly and decisively addressed by a referendum of the Scottish people. Therefore, we need to deal with these things in series and we need to keep our eye on the ball as regards the issue which is foremost in Scottish and UK politics at the moment in terms of the constitution. It is within this public and political discourse that we need to consider the priority of a referendum on the devolution of financial powers. I argue that the conclusions of the Select Committee are of precise relevance to this question. A referendum on the devolution of financial powers as proposed by Calman, and elaborated in this Bill, would in my view be politically misguided and publicly rejected prior to a referendum on devolution.
These are powers which I have said repeatedly the Scottish people want. There is significant evidence of that. I regret that I am not able to refer noble Lords to detailed debates in the other place to advance that argument but I know from extensive consultation with Scottish parliamentarians and Scottish people that the Scottish people want these powers. Much more importantly, they want these powers now because they want them to address issues which are important to the Scottish people now and were made obvious as a priority to them by yet another performance of the Scottish economy that has reversed the previous trend of devolution over the past few years in that we are now behind the rest of the United Kingdom in unemployment and growth. For almost all the period of devolution in Scotland the opposite situation applied. It is only since the SNP has taken control of government in Scotland that we have got into a situation whereby we are falling behind the rest of the United Kingdom as regards unemployment and comparative growth of GDP. Therefore, these powers are needed now.
The future development of the devolution settlement, be that full fiscal autonomy or whatever—there are all sorts of titles—may well ultimately be a question for a referendum, but it is a question that needs to follow the broader one of Scotland’s future membership of the union. In my view it cannot coherently be proposed before that. Consequently, these Benches cannot support the noble Lord’s proposed amendment of the Bill. I apologise to my noble friend Lord Foulkes far more in advance than I would normally have to do as we will not support his call for a referendum, no matter what the motivation for it is, when we come to that part of our debate in Committee.
Lord O'Neill of Clackmannan
I should like to follow my noble friend and say that I do not support the amendment. I had the privilege of being a neighbour of the noble Lord, Lord Forsyth, for many years. I have seen him exercise political skill across a broad spectrum, but on many occasions not without a degree of cynicism. I have to say that his amendment today is just a cynical opportunity to attack the principle of taxation. The idea that referenda have anything of any substance to do with this is just a bit of a smokescreen. The fact of the matter is that a referendum agreed that a Scottish Parliament would have tax-raising powers. The powers have never been exercised. Do we therefore need a referendum to take away powers that we have never used? I do not think so. There is a case, which has been made quite well by the noble Lord, regarding the clumsiness of the manner in which this taxation will be imposed. Were it to be imposed in its present form, it would probably be grossly unfair to too many of the poorest people within Scotland. That is the issue.
Let us not bother about the referendum question. Let us just question whether or not taxation in the form that is being suggested is the most appropriate way of trying to develop a sense of fiscal responsibility in a Scottish Parliament—whether it is separate or devo- maxed, or even with its present fumbling, incompetent and profligate way of expenditure.
Lord Wallace of Tankerness
My Lords, the amendments we are discussing relate to whether there should be a referendum on the provisions contained within the Bill’s specific reference to the changes to income tax and Scottish income tax. There will, of course, be opportunities at the next sitting of the Committee to debate amendments relating to an independence referendum. Indeed, later today there will be an opportunity to consider the details of the income tax proposals. I have no doubt that my noble friends Lord Forsyth and Lord Lyell will contribute to that, and my noble friend Lord Sassoon will be very pleased to respond.
I should make a point of clarification to my noble friend Lord Lyell, who raised a question about the Income Tax Act 2007. I can advise him that that Act sets out, as part of the tax law rewrite programme, how an individual’s income should be taxed and the distinction between savings and non-savings income. It is right that the Bill follows that approach.
The Government have a clear mandate to implement the Calman commission’s conclusions, as we seek to do in the Bill. There were pledges to do that in not only the manifestos of the two coalition parties but in the manifesto of the Official Opposition, the Labour Party. It is fair to say that these proposals were worked out after consultation by the Calman commission. I do not think that anyone can fault the level of consultation. There was considerable public discussion after the publication of that commission’s report. There was a White Paper by the previous Labour Government. There was a Command Paper by this Administration. These matters have been pretty well aired and the noble Lord, Lord Browne, said that these are powers that people want. The Scottish Social Attitudes Survey 2010 showed that 57 per cent of people wanted the Scottish Parliament to have powers of taxation and, significantly, only 37 per cent wanted Westminster to have tax powers. There has been considerable discussion of this, and I am not aware, with some respectable and respected noble exceptions, of any great clamour to have a referendum on these matters.
The proposal would be to have a referendum prior to the implementation of the finance provisions. These provisions will give the Scottish Parliament increased powers to take decisions on how to raise money as well as how to spend it. The crucial point was the final one made by the noble Lord, Lord O’Neill—the Bill will give the Parliament increased accountability and fiscal responsibility. While these reforms are significant and substantial new powers, they fall very much within the framework of the original Act.
The noble Lord, Lord Browne, reminded us that the question on tax powers was answered overwhelmingly in the affirmative in the 1997 referendum. In it, the Scottish electorate endorsed the establishment of a Parliament with the ability to exercise tax-varying powers, and therefore have a degree of financial accountability for taxation and spending decisions. As has been pointed out, these powers have not been used, but it is clear that there is demand for increased financial accountability, and that call was regularly made to the Calman commission—the Parliament should be not only responsible for how it spends money but have some greater accountability and responsibility for how it raises money. That has widespread support. It was also within the existing framework of the Scotland Act to vary the powers of the Scottish Parliament and its Ministers by order-making powers, such as those in Sections 30 and 63 of that Act. Here, of course, we are doing that by primary legislation.
Lord Forsyth of Drumlean
My Lords, I hesitate to go back over old ground and reopen old wounds, but as I recall, I was the person who was pressing the Labour Party to have a referendum on the tax-varying powers. The shadow Secretary of State—now the noble Lord, Lord Robertson of Port Ellen—was dead set against a referendum but he was sat upon by Tony Blair, the then leader of the Opposition, and forced to agree to one. I think that I can claim a track record on getting the referendum that was initially opposed by the then Labour Opposition. But quite rightly, and to their credit, they followed through on it.
Lord Wallace of Tankerness
I am probably going to compound matters by saying that it was opposed by the Scottish Liberal Democrats at that time. It was not right to say that all parties called for a referendum, but we all campaigned in it.
Lord Forsyth of Drumlean
That absolutely illustrates my view. The noble Lord, Lord Browne, says that people’s attitudes to referendums are a matter of political judgment. I tend to find that people are in favour of referendums if they think that they can win them but against them if they think they might lose.
Lord Wallace of Tankerness
My Lords, I did not have any doubt that we would win a referendum, I just did not think it was necessary—and I did take the legislation through on the referendum for the alternative vote. The point, as the noble Lord, Lord Browne, said, is that there is no political movement for a referendum on these measures. He is also absolutely right to say that all of us who share the goal of keeping Scotland within the United Kingdom should have our eye fixed on the one referendum, in which we will seek to ensure that Scotland remains a full member and plays a full part in the United Kingdom. Any other referendum in the interim would be a distraction and could undermine the case, because it would obviously take up time and resources when we should in fact be focusing on exposing the weaknesses of the case for independence and proclaiming the case for a Scotland within the United Kingdom. In those circumstances, I very much hope that my noble friend will not press his amendments.
Lord Forsyth of Drumlean
My Lords, we have had an interesting debate and I am grateful to everyone who has spoken. I seem to be somewhat isolated on this issue. I worry about the idea that the tax-raising powers in the Bill will increase the accountability of the Scottish Parliament. As I am sure my noble and learned friend will confirm, had those powers been in place and exercised since 1998 when the Scottish Parliament was established, the block grant which the Scottish Parliament had available to it would have been reduced by many billions. The exercise involves substituting a slice of the Barnett funding with funding that comes from the tax base. If public expenditure is growing faster than the tax base, the result is that far less revenue is available.
Tempted as I am to support the proposals because they would have had the effect of squeezing public expenditure in Scotland substantially and, I suggest, avoided considerable waste and the policies which have resisted reform of the public services, the notion that they would increase accountability needs to be looked at very carefully. It will squeeze the resources available to the Scottish Government over time and, in doing so, put pressure on them to use the tax powers, which by the nature of the gearing effect will result inevitably in Scotland becoming the highest taxed part of the United Kingdom. I venture to suggest that at that point, many people will say: “Why weren't we told this? Why didn't we know about it?”. If I am still around, I will take great pleasure in saying: “I suggested that there should be a referendum so that people had a chance to consider these arguments and know what they were being committed to”.
I entirely accept that the political classes and the political establishment have got together in the worthy cause of stopping the Scottish nationalists getting control of the Scottish Parliament and taking us towards independence, but I have my doubts about how it will increase accountability. I suggest that my noble and learned friend think about this again. If a referendum was held—I assume that those on both Front Benches are confident that the Scottish people would vote yes to these tax-raising powers, although I suspect that their opposition to the referendum may lie in their doubt that they would—there would be clear consent for the exercise of the powers.
The noble Lord, Lord Browne, and the noble Earl, Lord Mar and Kellie, suggested that a mandate was granted by the referendum on the original Scotland Bill. The noble Lord is quite right to say that the question was:
“I agree that the Scottish Parliament should have tax-varying powers”,
but those tax-varying powers were defined in the referendum campaign as being limited solely to 3p on the basic rate. This is far more than tax-varying powers. This is the introduction for the first time of a new Scottish rate of income tax. We are not talking about tax-varying powers here, we are talking about the ability to set a new rate of income tax that the Scottish Parliament chooses.
My noble and learned friend talks about opinion polls and surveys. I venture to suggest that if you go out and say, “Do you think the Scottish Parliament should have more powers?”, that is a bit like saying, “Do you love your mother?”. Of course people are going to say yes, the Scottish Parliament should have more powers. If you ask them, “Do you think that Scotland should be able to be made the highest taxed part of the United Kingdom?”, I think they might have a different view. If you ask them, “Do you think that the Scottish Parliament should be able to take money out of your pay packet?”, you might get a different answer.
Lord Browne of Ladyton
It is an important part of the noble Lord’s argument that there is an inevitability of Scotland becoming the most heavily taxed part of the United Kingdom and that that will be done against the wishes of the Scottish people, who will never be consulted about it. We intend to have general elections in Scotland for the Scottish Parliament. This issue will come to the fore when we get to the next group of amendments, but the issue of the rate of tax will be decided in general elections by the Scottish people through manifestos put before them, just as it is for the rest of the United Kingdom.
Lord Forsyth of Drumlean
I venture to suggest that I cannot think of any way in which any politician of any party, with the setup as it is in respect of the taxation powers and the way that the block grant will be calculated—subject to later review, but even assuming that Barnett survives—and given the levels of public expenditure and the position we are in, would be able honestly to do other than to tell the voters that income tax will have to go up. The numbers simply do not add up.
Let us just take the promises being made by the First Minister. On the whole, if you promise people free health care, free prescriptions, free bus travel, free nursery care and free this, that and the other and you do not have the money to pay for it, whoever comes in will find it very difficult to reverse that. Those are all very expensive requirements. If a Chancellor of the Exchequer gives the First Minister in an election year a bisque so that he does not have to cut public expenditure to meet the budget deficit requirements and the cuts have to be made in the subsequent year, you are building up very substantial gaps. I said that the gap on the budget deficit was about £3 billion. A tax-varying power where one penny on income tax raises merely £400 million will not get you very far in that respect. It is a delusion. If anyone in this House believes that the power will be used to reduce taxation, I think they are misguided.
I entirely agree with the noble Lord that we must be careful to focus on the issue of independence. He is absolutely right about that. Where I believe that the Bill is playing into the hands of the nationalists is that they are saying: “Look, you cannot play golf with one club. You cannot run an economy simply by having limited tax-varying powers that relate to one part of the income tax yield. You need corporation tax powers so that you can get growth so that the yield goes up”. That argument has a certain degree of logic to it—if not, altogether, a degree of fantasy.
Some of us remember that the First Minister interrupted my noble friend Lord Lawson’s Budget, scandalised the House of Commons and was thrown out of the House. We are told now by the nats that that was done to protest about the poll tax. Of course, he interrupted to say, “That is an absolute outrage” when the Chancellor, my noble friend Lord Lawson, announced a reduction in corporation tax and income tax to the same rate of 25 per cent. So there is a fantasy here. We should be absolutely clear what we are doing here. We are committing Scotland to a position where it will have a higher rate of income tax. I am prepared to challenge anybody. Once these powers are in place and are being used—after 2015—I will be astonished if I am wrong about that, in the way that the noble Lord, Lord Robertson of Port Ellen, was wrong when he said that the Scotland Act would kill nationalism stone dead.
Lord Foulkes of Cumnock
I wonder whether the memory of the noble Lord, Lord Forsyth, goes back to the time when the Tories were very powerful in Scotland.
Lord Foulkes of Cumnock
They were, quite a long time ago. I remember it. This goes against the noble Lord’s theory that no one argues that taxes should be reduced. I remember what happened in Edinburgh when local councils raised about 50 per cent of their income themselves through the rates and got the rest through rate support grant. The Conservatives on Edinburgh council—they called themselves Progressives at the time but they were Conservatives—used to propose reductions in the rates and Labour proposed increases, with increased services. The Conservatives made quite a lot of headway by proposing rate reductions, with people having to pay less, and a lot of middle-class people around Morningside and Corstorphine—I live in Corstorphine, so I had better be careful—went with the Conservatives on that. Has the noble Lord given up all hope of arguing the case for tax reductions along the lines of his predecessors?
Lord Forsyth of Drumlean
Not at all. I do not remember those days but then the noble Lord is a little older than me. However, he is absolutely right. His key point was that 50 per cent of the revenue was raised on the rates. However, the Government are using this dodgy figure of 30 per cent, which excludes capital expenditure from the base line. If one were making a reasonable assumption of how much would be raised in taxation, the figure would be nearer to 15 per cent than 30 per cent, but it is only a small part. Of course, in those days Edinburgh council was run reasonably well. My point is that here we have a whole load of post-dated cheques and expenditure that cannot be afforded. It will fall on Scottish income tax and that will have a catastrophic effect on the Scottish economy in terms of both growth and the living standards of the people of Scotland. That is why I am saying that, if you are going to do this, at the very least make sure that you can blame it on the electorate who voted for it, rather than people stumbling into it without being aware of the consequences.
I do not like playing the part of Cassandra but the numbers are there for all to see, and they do not come only from partisan, political people such as me. Professor Bell at Stirling University has done a lot of work on this, and the numbers simply do not add up. I say to the noble Lord, Lord Browne, that Alex Salmond and the nationalists will use the fact that the numbers do not add up and that income tax will go up to blame Westminster, and we will get into the same old argument about the size of the grant and so on. If the noble Lord’s argument is, “Let’s not have the distraction of a referendum on Scottish income tax because it will mean that people do not focus on maintaining the union”, then it is an argument for which I have some sympathy. It is the most powerful argument that I can think of for dropping the Bill altogether and coming back to it after we have resolved that position. On the same basis, the noble Lord argues that it will be a distraction. Of course, whether it becomes a distraction will ultimately depend on whether Alex Salmond deigns to give us permission to pass it on for Royal Assent, and we wait with bated breath to hear his latest thinking on that.
We have had a good debate. I do not propose to press this to a vote but I urge my noble and learned friend and Members of the House to look at the arithmetic in relation to how this tax is going to work and what it is supposed to cover. I beg leave to withdraw the amendment.
Lord Forsyth of Drumlean
“( ) If the application of the Scottish Rate would result in a Scottish taxpayer paying a higher rate of tax on non-savings income than an equivalent taxpayer in the rest of the United Kingdom, the Scottish Parliament shall consult interested parties before passing such a resolution.”
Lord Forsyth of Drumlean
My Lords, I do not propose to rehearse all the arguments that we have just had, although I am being encouraged to do so by the Front Bench opposite. However, I shall resist the temptation.
This amendment would require the Scottish Parliament to consult before setting the Scottish rate of income tax if it was intended that the rate should be higher than that of the rest of the UK. This seems to be a perfectly reasonable request. Some people may argue that the Chancellor does not consult before he sets a rate of income tax, but we are not talking about setting a rate of income tax here; we are talking about setting a differential rate of income tax within the United Kingdom, and that will have a profound effect. We are talking about setting a differential rate of income tax which applies to only certain types of income.
Following consideration of these matters in the other place, there are still a lot of uncertainties about what the impact will be. I am not clear about that and perhaps my noble friend will be able to enlighten us. For example, what is the position on tax reliefs with a higher rate of Scottish income tax? Will tax reliefs on charitable contributions apply at the higher rate? Will all allowances based on gross income apply against the Scottish rate or the English rate if there is a differential? If the Scottish Parliament sets a higher rate, I think it is very important that representatives from business, charities, pension funds and other institutions are given an opportunity to be consulted on the likely impact and incidence of the tax.
Lord Lyell
I strongly support my noble friend on this amendment. I hope that I have brought with me the correct route plan for the groupings, because there are several other amendments that I should like to refer to, if I may. I find that with Amendment 53A are grouped Amendments 54A, 54B, 54C and 54D. Am I right?
Lord Forsyth of Drumlean
Perhaps I should have made it clear that these amendments are being degrouped, so we are just discussing Amendment 53A.
Lord Lyell
Shall I be able to refer to them at a later stage? I assume that they will be called and that I shall not lose my chance to speak to them. With regard to Amendment 53A, I strongly congratulate my noble friend. I received a very kind and satisfactory answer from my noble and learned friend about non-savings income but Amendment 53A seems to apply particularly to what I call the ritual dance over whether the Scottish Parliament may or may not do something. I may be enlightened about that when we come to the other amendments that were in this group, and I assure your Lordships that I shall not desist when we come to Amendments 54A, 54B, 54C and 54D. I see my noble friend on the Front Bench giving some form of assent, so I give him warning that I shall raise the matter when we come to those amendments. However, I strongly support what my noble friend Lord Forsyth has said on Amendment 53A.
Lord Davidson of Glen Clova
Perhaps I may add some further Angusian support for the amendment, recognising that Angus is well represented in relation to this particular amendment. It has already been observed by a number of noble Lords that the underlying purpose of the Scottish rate of income tax is to bring real accountability to the Scottish Parliament on behalf of the Scottish taxpayer. As the noble Lord, Lord Forsyth of Drumlean, says, decisions on this tax will have a profound effect and will of course be extremely important for the Scottish Parliament. Therefore, we on this side agree that there should be an obligation to consult interested parties, such as business, charities and pension funds.
The only point that I would raise is that such an obligation to consult might also be useful were a lower rate of tax to arise. I immediately appreciate that this amendment comes from a quarter that does not envisage such a possibility but, perhaps on a logical basis, there may be a reason for both higher and lower outcomes requiring consultation.
Lord Forsyth of Drumlean
I completely agree. I think that if the proposal were to lower the rate of income tax, something so out of order would be going on that it would certainly be desirable to consult.
Lord Davidson of Glen Clova
If such an event came about, any retractions that might be required from any quarter could also be added into the consultation. We support the amendment.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, as my noble friend Lord Forsyth of Drumlean has explained, Amendment 53A would require the Scottish Parliament to consult interested parties prior to passing a resolution that would see a Scottish taxpayer paying a higher rate of tax on non-savings income than the equivalent UK taxpayer. Of course, my noble friend has also explained in passing that there is no such requirement on the UK Government to consult interested parties when they make similar decisions.
There are two reasons why the Government do not see merit in my noble friend’s amendment. First, the underlying purpose of the Bill is after all to provide for greater financial accountability of the Scottish Parliament to its electorate and give the Scottish Parliament a real stake in Scottish economic performance. I hear, and heard in our previous sitting, my noble friend’s doubts about that, but that is the purpose of the Bill. Devolving the right to set a Scottish rate of income tax to the Scottish Parliament is absolutely key and central to that, which clearly my noble friend accepts. In devolving that key power, I do not believe that it is right for the Government to impose conditions on how the power is used. Ultimately, as the noble Lord, Lord Browne of Ladyton, pointed out in the previous discussion, the Scottish Parliament is and will continue to be subject to regular elections. My noble friend seems to be blithely suggesting that somehow the income tax rate will go up and up in Scotland without reference to the fact that it might not be an election-winning strategy. The Scottish Parliament should not be fettered in the consultation processes through the legislation.
Lord Sassoon
I shall, if I may, continue and complete the two legs of this argument. If the setting of the Scottish rate becomes part of the existing budget process of the Scottish Government, my noble friend’s amendment will be unnecessary because currently the draft Scottish budget is published in September or October, following which the public and Scottish parliamentary committees are consulted on its proposals. A budget Bill is then typically passed in the spring and, if the Scottish rate is announced as part of the draft budget and the resolution is passed as part of the Bill, the Scottish Government’s existing processes will already include the type of consultation that my noble friend envisages, irrespective of whether it is an increase in the rate or not.
Lord Forsyth of Drumlean
That is very helpful, but on the previous point that it would be wrong to constrain the Scottish Parliament and that this is about accountability, the Bill is bristling with provisions that require the consent of the Treasury before the powers can be enacted. Is it not a bit strange to argue that it would be wrong to constrain the Scottish Parliament in consulting the people in a Bill that requires and constrains it to consult the Treasury?
Lord Sassoon
No, I do not accept the logic of that. We can debate as we go through which powers require what sorts of consents, but the central nub of the Bill is to devolve income tax rate-setting to the Scottish Parliament. That is what is envisaged. As I say, I believe that it should be done in a clean and clear way and it is then for the Scottish Parliament and the Scottish Government to decide what consultation there is. As I pointed out, the Scottish Government at the moment consult in a very sensible and open way for their budget Bill. There is no reason to doubt that they would do something sensible and proportionate with the new power.
To answer my noble friend’s question about allowances of one kind and another in the context of a higher Scottish rate, the position is that the Government are consulting with representatives from the pension industry, charities—which he specifically mentioned—and other interested parties through the Scotland Bill technical groups. There will be a technical note setting out proposals in these areas after the Bill receives Royal Assent, so it is very much work in progress. My noble friend identifies important issues but, on the basis of my explanation, I ask him to withdraw his amendment.
Lord Forsyth of Drumlean
My Lords, I know that I am beginning to sound like a broken record.
Lord Forsyth of Drumlean
The noble Lord is unkind. I asked a question about the position of charities and charitable contributions in respect of this Scottish income tax regime. It strikes me as a bit strange that by this stage of the Bill—after all, we are talking about a Bill that has been around this place for more than a year—the various groups that have been consulting and the technical groups that have been grinding on have not reached a conclusion. To be told that this will happen after Royal Assent means that we are being asked to buy a pig in a poke. We are being told to go along with this and, “By the way, after the Bill is law we will tell you what its effect will be”. That is the opposite of what parliamentary scrutiny is supposed to be about. In my day as a Minister, first of all you had to get your policy right; you then had to get your drafting right; then you had to go through the legislative committee. If you turned up and could not answer all the questions, dot all the “i”s and cross all the “t”s, you went back to the bottom of the queue and lost your place in the Queen’s Speech.
Here we are, more than a year on. I am not making a difficult point; it was made by honourable Members on both sides during the passage of the Bill in the other place—almost a year ago. At that time, the answer was the same as that given by my noble friend now—that it will be dealt with by the technical committees, and that the Government hope to report shortly. I will withdraw the amendment on the basis that I will table it again because at the next stage of the Bill my noble friend ought to be able to answer those questions. People in Scotland who are running charities will want to know this. If we are asked what will be the impact of the tax, is the answer, “We are not sure but we will tell you after the legislation has been passed”? If the answer is that, for example, for people paying the Scottish rate of income tax—if it is higher—on the amount that is given to the charities, only the English element will be allowable, and we discover that only after Royal Assent, just think what the nationalists would make of that as an argument and how aggrieved the charities would be.
Lord Lyell
Before my noble friend comes to an excellent conclusion, I say that he is most optimistic about this group. I understand that it is called the high-level group—that is what the Institute of Chartered Accountants of Scotland told me. My noble friend says that we have just spent a year on this. I say with humble duty to the Committee: you ain’t seen nothing yet. When we come to Clause 30 stand part, I shall refer back to 1998. I think that my noble friend and the Committee will be interested to see what was said then. When we see what was said then, what is in the Bill today and the discussions that went on in another place, the word “snail” comes to mind—and makes this look like Concorde. I support what my noble friend has said and look forward to the next amendments, when we come to them under the guidance of my noble friend on the Front Bench.
Lord Forsyth of Drumlean
I think that is mildly critical of my noble friend. However, I accept that the procedures that are adopted for the consideration of the Budget may very well cover the point, and I certainly would like to study them. I beg leave to withdraw the amendment.
Lord Forsyth of Drumlean
“80CA Referendum on increasing Scottish rate of income tax
(1) This subsection applies if the motion tabled by a member of the Scottish Government for a Scottish rate resolution proposes that the basic, higher or additional rate of income tax for a tax year for Scottish taxpayers is to be above the rates set for taxpayers in the rest of the United Kingdom as determined under section 6(2) of the Income Tax Act 2007.
(2) If subsection (1) applies Her Majesty must by Order in Council cause a referendum to be held throughout Scotland about whether the basic, higher or additional rate (as the case may be) of income tax for the relevant tax year for Scottish taxpayers should be set as proposed in the motion.
(3) If the majority of the voters in a referendum held by virtue of subsection (2) vote in favour of the proposed rate or rates of income tax the Scottish Parliament may consider the motion for a Scottish rate resolution under section 80C.
(4) But if they do not, the Income Tax Acts have effect for that year in respect of the rate of income tax that was the subject of the referendum.
(5) For further provision about referendums held by virtue of this section see Schedule (Referendums on commencement of sections 30 to 32 or increasing Scottish rate of income tax).”
Lord Forsyth of Drumlean
My Lords, I shall speak to Amendment 54A which goes in the revised grouping with Amendment 54E. Again, the matter was considered and raised in the other place, I think by the opposition spokesman. I have put down an amendment that clarifies the position on the liability of members of the armed services to pay Scottish income tax. During consideration in the other place, people repeatedly asked for clarification on how Scottish income tax would apply to members of the armed services. My concern is, if someone is stationed in Scotland and is living in barracks, are they liable to pay Scottish income tax? Ministers promised—
Baroness Verma
My Lords, may I press the noble Lord for a little clarity? Is he speaking to Amendment 54 or to Amendment 54A?
Baroness Verma
Does the noble Lord wish to move Amendment 54? It needs to be taken before Amendment 54A.
The Deputy Chairman of Committees (Baroness Pitkeathley)
It may be of assistance to the Committee if I point out that Amendment 54A comes after Amendment 54ZA, which in turn follows Amendment 54, which is the amendment that I thought the noble Lord was speaking to.
Lord Lyell
Will the noble Baroness confirm that? I have the grouping list. Perhaps somebody will be kind enough to give me a new grouping list because what I have on my grouping list contradicts what the noble Baroness said. It shows Amendments 53A, 54A and 54 separately.
Lord Forsyth of Drumlean
I apologise. I just say to my noble friend that it really is impossible if we have one piece of paper that is different from the rest. I raised this privately and was told that the Whips’ Office is not prepared to issue another piece of paper. I am reasonably involved in these amendments, and I am finding it very difficult. I was looking at the other list of amendments as opposed to the revised, revised list of amendments. That is why I was moving Amendment 54A, and I apologise. The noble Baroness wants me to move Amendment 54. We have debated that; it was in the first group.
The Duke of Montrose
The Duke of Montrose
My Lords, this is a paving amendment, and I shall address my remarks also to Amendment 54BA and the other amendments in the group. Amendment 54BA will remove the close connection condition for the purposes of identifying a Scottish taxpayer. This is an effort to remove the complications that come from trying to prove a close association, which is a concept that raises many questions of definition and interpretation. The argument is that the best way to define a Scottish taxpayer is without reference to residence in Scotland. Instead, the definition should be based on being a UK citizen and spending more time in Scotland than in other parts of the United Kingdom. This argument has been put to me by the Law Society of Scotland, and I think it has weight.
Perhaps the definition I have just pointed out goes some way to answering the call of the Institute of Chartered Accountants of Scotland for a definition in statute of what constitutes a Scottish taxpayer. At present, new Section 80D defines a Scottish taxpayer as,
“an individual … who is resident in the UK for income tax purposes, and ... who, for that year, meets condition A, B or C”.
These conditions are that the taxpayer,
“has a close connection with Scotland … does not have a close connection with any part of the UK other than Scotland … and … spends more days of that year in Scotland”,
or is an elected parliamentary representative for Scotland.
The residence qualification is typical of the sort of issue that has raised controversy in recent legal cases. I mention Gaines-Cooper v Her Majesty’s Revenue and Customs and Tuczka v Her Majesty’s Revenue and Customs. New Section 80D, when combined with new Sections 80E and 80F, presents problems for those who move between jurisdictions within the United Kingdom inasmuch as they create uncertainty, difficulties of interpretation and potential problems regarding compliance. In particular, the definition of “close connection” contained in new Section 80E creates a difficulty of interpretation—and what does “place of residence” mean? It appears to be different from residence as understood in other areas of tax law, such as capital gains tax. Does “place of residence” imply ownership when juxtaposed with “main place of residence” in paragraphs (b) and (c) of new Section 80E(3)? “Place of residence” and “main place of residence” are not defined in new Section 80E, and therefore create potential problems of interpretation for those who may live in Scotland yet work in England, or vice versa, including those living on the Scottish-English border.
Lord Maxton
There are, of course, people who live in Scotland, who even work in Scotland, but who are paid from England or elsewhere in the United Kingdom. They, too, create a problem because, as far as I am aware, the PAYE system does not depend on where you live but where you work or who you are employed by.
The Duke of Montrose
My Lords, this is the type of complication that we are talking about. In fact, the way the Bill is at the moment, it will practically be a question of where you spend the night. There are commuters from Glasgow or Edinburgh to London, and a variety of public office holders, who may have a place of residence in Scotland yet work for considerable periods in England or Wales, such as Members of the House of Lords, who are not included in new Section 80D(4), or Supreme Court judges. If a clause such as this remains, should the Bill not contain an obligation for each individual to state what he regards as his main place of residence?
New Section 80E also highlights the issue of split-year residences. Unfortunately I just missed the debate immediately preceding this, but I thought that my noble friend Lord Forsyth would cover the point. Her Majesty’s Revenue and Customs currently applies, in extra-statutory concession A11, split-year treatment to individuals who spend only part of the tax year resident in the United Kingdom. The concession means that, for example, an employee who comes to the UK for a secondment beginning on 1 June would be regarded as a non-UK resident and therefore non-taxable in the UK on his or her general earnings from the same employment for the period from 6 April to 31 May in that year.
The Law Society of Scotland questions whether setting up the provisions of new Sections 80D, 80E and 80F will require the creation of a similar extra-statutory concession. It would seem more sensible to create a robust system that does not rely on extra-statutory concessions in order for it to work—one whose fundamental architecture takes account of movement of people within the United Kingdom, and therefore within different tax zones, in one tax year.
Lord Lyell
I strongly support my noble friend and I hope that I might save some time. There was plenty that I was going to say on Clause 30 stand part, but thanks to the excellent and wonderful briefing that my noble friend the Duke of Montrose had from the Law Society of Scotland, I do not need to. I, too, have had a considerable briefing from the Institute of Chartered Accountants of Scotland.
When we discussed this at an earlier stage, I took a dig from my noble and learned friend the Advocate-General about the great singer Mr Andy Stewart. Mr Stewart used to sing, “Take me back”—and perhaps I can take your Lordships back to the Scotland Act 1998. On page 35, Section 75(6) says:
“In this section ‘place’ includes a place on board a vessel or other means of transport”.
I direct the Committee’s attention to page 24 of the Bill before us. New Section 80E(4) says just the same:
“In this section ‘place’ includes a place on board a vessel or other means of transport”.
Both in 1998 and at Second Reading I raised the question of people who are employed on a means of transport—for example, lorry drivers—or at sea on a vessel. In 1998 the government spokesman, the noble Baroness, Lady Ramsay of Cartvale, referred to houseboats. That is absolutely fine. My noble friend has just spoken about people on oil rigs. I made inquiries and I understand that nothing has changed in 14 years, that “on board a vessel”, as in this Bill and Section 75 of the Scotland Act, includes people on ferries. Perhaps I can direct my noble friend the tax specialist’s attention to the ferries at Cairnryan or Stranraer.
Perhaps noble Lords who are experts in the law will be able to advise me, but I am given to understand that if a UK taxpayer—at Cairnryan or Stranraer it would be a Northern Ireland taxpayer—is on board that vessel, either when the clock strikes midnight or at a relevant time, he or she is deemed to be a Scottish taxpayer. Then you have to calculate how many days you are on board that vessel. You have to do some sums and we still do not know—it is rather like O-level algebra—what will be the proportion of the days you spend in Scotland or elsewhere in the United Kingdom. You have to deduct from that days you have spent outside the United Kingdom. That will come into the mix as well.
When we discussed this in 1998, my late noble friend Lord Mackay of Ardbrecknish said that to classify UK taxpayers from Northern Ireland or elsewhere outside Scotland as being Scottish taxpayers because they were on board a ferry as part of their work would be “plain daft”. He put it much better than I do, and I rest my case.
Lady Saltoun of Abernethy
My Lords, following on from the noble Lord, Lord Lyell, what about people who are either travelling on or employed on the night sleeper?
Lord Foulkes of Cumnock
My Lords, the noble Duke has raised a very important issue. I had indicated my intention to oppose Clause 30 stand part, and this is grouped with the noble Duke’s amendments.
The noble Duke has raised one or two of the anomalies. My noble friend Lord Maxton intervened with another. I hope that the Minister will listen carefully to this because this whole issue is bristling with anomalies. There are all sorts of difficulties that could happen. When we got an informal briefing from the Minister and some of his staff, I raised the question of students—postgraduate and undergraduate students, researchers. There are all sorts of people who would be difficult to identify as Scottish taxpayers or not. There are diplomats and civil servants who move up and down regularly who might be difficult to identify. We have heard about people on the ferries and the sleepers. There are fishermen who could be classified in this way. There are all sorts of difficulties that arise.
There are some people in Scotland who may have a residence in England, Wales or Northern Ireland, but also a third residence overseas. How do the days resident overseas come into the calculation? This question was raised when we used to have residence qualifications for Peers’ allowances and I recall that it created tremendous problems, which was one of the many reasons why we moved to the arrangement we now have. This is an absolute minefield of anomalies.
If the theory of the noble Lord, Lord Forsyth, is right—he has been arguing it very carefully—that Scotland is inevitably going to be a much more highly taxed area than England, imagine the situation that could arise on the border. The noble Lord, Lord Steel, might look at this; it might be a way of regenerating the borders. More and more people could live just over the border, living in England to pay English tax but coming into Scotland to take advantage of the better services in Scotland. There are all sorts of difficulties that could arise.
We were most grateful to the noble and learned Lord, Lord Wallace, and the noble Lord, Lord Sassoon, for organising the seminar. I do not know about other people who went to it, but I came away with more questions at the end than I had at the beginning. Again, the noble Lord, Lord Forsyth, raised a lot of the questions in that seminar. In his reply, perhaps the noble Lord, Lord Sassoon, can tell us whether, following that seminar and the genuine points of concern that were raised, some further consideration has been given to trying to make a simpler system for identifying who Scottish taxpayers are. The arrangement in the Bill is far too complicated to implement effectively.
Lord Steel of Aikwood
The noble Lord, Lord Foulkes, may not know that there are already people living just south of the border who take advantage of the services in the borders. I refer particularly to people from the Berwick-upon-Tweed area who make good use of the Borders General Hospital because it is a very good facility. I have a simple question for the Minister. How does Section 80F operate? It is about the number of days that people spend in Scotland or the rest of the UK. If we do not have any border controls we do not know who is coming in and out. I am assuming that we are not having that even under Mr Salmond’s proposals. Therefore, I simply do not see how it will work. Perhaps the Minister will enlighten us.
Lord Maxton
My Lords, quite properly everyone has been raising the issue of those people who live and work across borders, work on ships and trains, or are lorry drivers. My concern to some extent is those people—I could be one of them—who live in Scotland but whose sole income is a pension from the other place, and whose tax office is Cardiff and not East Kilbride or anywhere in Scotland. I am still not quite clear how that tax office will know that I am a resident in Scotland. As far as I know, it does not have to know my home address. I would accept that if this debate was back in the 1990s. Of course, technology has moved on and it may be that we now have a database that allows the Inland Revenue to know exactly where you live. I rather doubt whether it has ever bothered to update the records and keep them up to date. What happens to someone who lives in Scotland and should be paying tax in Scotland but whose sole source of income and tax office are outside Scotland? How does that person know what tax they should pay in Scotland?
The Duke of Montrose
I wonder whether the noble Lord remembers getting a demand for taxes from the Inland Revenue which, presumably, was sent to his house because it knows where his house is.
Lord Maxton
Oddly enough, I am in the unfortunate position at one level but fortunate in another that about five years ago, if not longer, I got my last letter from the Inland Revenue. It said, “Please do not send us any more tax returns because we know what your income is. It has been the same for the last 10 years so don’t bother any more”. If I moved house, I am not sure that anyone would know where I had gone. I assume that you have to tell the Inland Revenue but the fact is that there is this problem. As far as I am aware, PAYE is paid on the basis of where you are employed, who employs you and the income that you are paid. That can come from a variety of sources and is taxed at source. I am never quite clear whether one’s residence is an important part of that issue.
Lord Campbell of Alloway
My Lords, I support what has been said by and large for this amendment in the name of my noble friend the Duke of Montrose. This is a highly complex problem and very difficult to understand. The question is whether it falls within devolution or not. It is understood that an arrangement has been made for members of the Privy Council to consider, if a question such as this arises, whether it is within or without the concept of devolution. This matter is so complicated that I am only grateful for having been able to listen to what was said about it. I hope that it may be satisfactorily resolved.
Lord Kilclooney
My Lords, the people of Northern Ireland are increasingly concerned that Scotland is heading towards a higher taxation system—be it devolution or potentially independence. There needs to be clarification to the people of Northern Ireland since the Larne and Belfast ferries to Cairnryan and Stranraer are some of the busiest within the United Kingdom. The people in Northern Ireland on those ferries will remain United Kingdom taxpayers until they land in Scotland.
Lord Forsyth of Drumlean
My Lords, having managed to get my amendments in a row, I should like to contribute briefly to this debate. I have only one question for my noble friend. There was a definition in the Scotland Act of a Scottish taxpayer, which was required in order to implement the variable rate, to which we were told that the Scottish people had given their consent. Will he tell us specifically what was wrong with that definition that requires all these clauses in this Bill?
Lord Davidson of Glen Clova
My Lords, it might clearly be seen that this group raises significant issues. The Scottish rate of income tax is plainly a major innovation in the structure of UK tax. Where one has a major innovation in taxation issues, usually simplicity is regarded as a virtue. I suggest that simplicity and clarity would be very clear virtues here. The questions that have arisen include definitions. I should like to raise certain of these points. The definition currently being suggested—unlike the bygone definition under the variable rate—is by reference to,
“an individual who is resident in the UK for income tax purposes”.
There is no statutory definition of UK residency for tax purposes but, helpfully, there are 86 pages of guidance which are subject to frequent revision by HMRC. In seeking clarity, will there be a way in which the Government will give some guidance as to how specifically the taxpayer for Scotland will be defined and how residence will be defined?
The Chartered Institute of Taxation has suggested that there should be a statutory residence test for the UK. It would be very interesting to hear from the Minister whether steps are being taken to put in place such a test. The chartered institute is not alone. As the noble Lord, Lord Lyell, indicates, the Institute of Chartered Accountants of Scotland has raised this question, as has the Federation of Small Businesses and CBI Scotland. They all seek to see a concrete definition of residence for this tax. What are Her Majesty's Government doing to address these concerns from the professional experts in the area?
The noble Duke, the Duke of Montrose, raised the question of close connection and the test being employed. Oil workers living in England but commuting to a Scottish oil rig will not have a close connection but the Scottish resident who works in England, returning to Scotland at weekends and holidays, will, apparently, be defined as a Scottish taxpayer. It will be interesting to hear the Minister’s answer to the question of how the Government will deal with mobile workers. They may find it impossible to know where they might be until a day count is carried out at the end of the year.
Concerns have also been raised that there may be unfairnesses that, through a loose definition of Scottish residence, may permit wealthy individuals to arrange their affairs to avoid a higher rate of tax. Plainly, if this is lawful, it is lawful, but it may raise questions as to the extent of avoidance that might take place. It will be interesting to hear whether that has been considered.
It is inevitable that there will be disputes in relation to the definition of residence. Are mechanisms to be put in place to deal with disputes in relation to the application of the rules? Will there be a tribunal system with a right of appeal or will it simply be left to the courts? Where will we stand on this?
I turn to questions of non-UK residents, which tend to excite from time to time. Do the Government agree that a non-UK resident working in Scotland is liable to pay tax in Scotland? Should this be at the Scottish rate? The Bill currently provides that, for example, company directors, sportsmen and entertainers undertaking duties wholly in Scotland would pay UK income tax on income earned entirely in Scotland. Does that seem to be the correct way forward with a Scottish income tax? Employees inevitably will go to their employers in order to seek information on their tax status. They are more likely to do that than to go to the call lines of HMRC. What are the Government doing to support employers, particularly small and medium-sized enterprises, so that they in turn can support their employees in their inquiries?
More broadly, concerns have been expressed by many, including the Chartered Institute of Taxation, that there will be a need to staff up properly to meet an expected flow of difficulties and questions in respect of Scottish income tax. The approach that HMRC adopts towards staffing is one of considerable importance because taxation is perhaps one of the most complicated areas of legislation. While the Scottish Parliament may be able to create new taxes, the questions that will arise are likely to be highly complicated and require a considerable amount of professional input in order to permit clarity to be seen by the Scottish taxpayer.
Another question has been raised which I think might be the subject of a separate amendment but, like the noble Lord, Lord Forsyth, I am not entirely clear on what the running order is at the moment. It concerns the split year. Currently no account is taken of split years where someone may be a Scottish taxpayer for one part of the year and a taxpayer somewhere else in the rest of the United Kingdom for the other parts. The problem is that if one is defined as a Scottish taxpayer at the beginning of the year, it appears that one remains a Scottish taxpayer for the entire year. That may not seem entirely fair or satisfactory. It is perhaps a little unfair to the individual who moves to another part of the United Kingdom, and it creates difficulties for Scottish employers or indeed UK employers who may find themselves having to deal with Scottish rates of income tax in respect of employees who are far away from Scotland. It is a curiosity and seems to be slightly cumbersome. One would be given some kind of confidence that this is going to work well if the Government could indicate how these types of issues will be dealt with. Other changes might be required in relation to pension deduction rules. Should such rule changes be effected through primary legislation by the Scottish Parliament or should they simply be done by subsidiary legislation? It is plain that the former would avoid the lack of clarity that secondary legislation can sometimes create.
One further area of avoidance on which some assistance might be helpful is how Her Majesty’s Government propose to deal with avoidance of Scottish income tax rates by the use of the personal service company. Such a company registered in England would presumably permit the taxpayer to draw dividends from an English company. Those do not appear to fall within the Scottish rate of income tax. Again, this might seem slightly curious.
In relation to the self-employed, it would be useful to know whether the Government have particular proposals that they wish to put in place on how self-assessment tax returns will proceed. Are they to be altered or will they remain the same? In relation to benefits, inevitably there will be an impact on how they operate in the context of the Scottish rate of income tax. Benefits are assessed on after-tax income. If the Scottish rate is higher, and there is a view that it will always be higher, that will have an impact on benefits because presumably the benefit recipient will be entitled to a higher rate of benefit. How are Her Majesty’s Government going to deal with this rather complex problem? If taxation is one of the most complicated areas of our legislation, benefits can certainly give it a pretty good run as the second most complicated area. If, of course, the Scottish tax rate were lower—I accept that this is a possibility—mechanisms may be required to deal with the benefit by reducing it. How is that going to be dealt with?
I accept that I have bombarded the Minister with a range of questions for which I do not seek immediate clear answers. It would be wholly unfair to do so.
Lord Forsyth of Drumlean
When the noble and learned Lord says that he does not expect immediate answers, I would point out that we are at the final stages in the final weeks of this Bill, and he has raised a number of very important points, if I may say so—not least one that I had not thought of, which is that everyone can get around this by setting up a company in England and paying themselves in dividends. Since I had not thought of it, I would like to have an answer to that and to the other questions. If there are loopholes of this kind, they need to be plugged before the Bill reaches Royal Assent.
Lord Davidson of Glen Clova
I am guided by the noble Lord, Lord Forsyth, as to how one should approach the Minister. I note what he has said and I hope that I have at least given the noble Lord some useful advice that will allow him to look at certain issues. However, I will await the answers from the Minister.
There is one further point that I should raise with the Minister, which to an extent echoes what the noble Lord, Lord Kilclooney, said. We are in a position where devolution seems to be taking us to where we may have a separate tax system in Scotland, in Northern Ireland, possibly in Wales and in England. Under the coalition Government there is a new Office of Tax Simplification. It would be helpful to know whether some guidance might be sought as to how simplification might be assisted. I do not mean that entirely frivolously because it is plain that this is an area of great complexity. It would be useful at least to recognise that there may be a step away from a unitary tax system to something that is more complicated, so guidance on simplification from every quarter might be useful. In relation to the various amendments, it will be detected that we are broadly in support of seeking clarity.
Lord Sassoon
I am grateful to the noble and learned Lord, Lord Davidson of Glen Clova, for his measured and reasonable approach. I think that I have had 57 varieties of questions and counting. Some of the questions are very technical and possibly do not go to the heart of the clause, but I will make sure that a letter sweeping up as many of the points as possible is written ahead of the Report stage so that all noble Lords have their queries addressed in good time.
There are one or two questions that I had anticipated which we did not get to, such as the tax position of Scottish astronauts. I am sure that we could have found one or two other cases. The serious starting point of all this is that, as the noble and learned Lord, Lord Davidson of Glen Clova, points out, there is huge complexity already in the UK system on residence matters. We do not want to add unnecessary complexity in this Bill. Quite a number of the issues that have been identified in this interesting discussion already arise under UK tests, and are not particular to Scotland. Others are very much issues particular to Scotland. I believe that they have all been given consideration, but I certainly do not pretend that any of this will be simple.
Lord Forsyth of Drumlean
As my noble friend is dealing with these issues now, it might be in the interests of saving a little time if he addressed the position of members of the Armed Forces.
Lord Sassoon
I am very happy to address the position of the Armed Forces, but, if my noble friend will allow, we should perhaps deal with that when his amendment on that subject—if he wants to move it—comes up a little later.
Lord O'Neill of Clackmannan
The Minister has not addressed the interface of tax and benefit. Tax credits perhaps give rise to some of the most complicated questions. Speaking as a former Member of Parliament, I am aware of the issues that arise when there is the slightest adjustment to the income of some of the poorest people in our community. It would be remiss of us not to address that aspect of taxation being imposed at different rates on different sides of the border.
Lord Sassoon
I will come back to that point because the question of credits is very important. I am happy to talk to that but let me answer one or two of the other questions that have already arisen. I shall pass over some of the detailed questions that are largely in the same category as some that I have already addressed.
On the question of safeguards and appeals, the appeals process will apply as it does to appeals and disputes with HMRC across the rest of the UK. That is clear and straightforward and, in general, applies to a number of the concerns of the noble and learned Lord, Lord Davidson of Glen Clova.
Let me address the issue of personal service companies as that has been somewhat topical recently. The Calman commission recognised that the changes would need to apply the Scottish rate of income tax to income from savings and dividends. The changes needed to apply the changes to savings and dividends would be prohibitive and so, as noble Lords know, savings and dividends are not within the scope of the Scottish rate of income tax. However, HMRC’s compliance work, including that relating to IR35, will continue to ensure that all taxpayers pay the correct amount of tax and national insurance contributions, including those who are liable at the Scottish rate. As is evident, all noble Lords who are here today are expert in these matters and I hardly need remind them that the aim of IR35 is to eliminate the avoidance of tax and national insurance contributions through the use of intermediaries such as personal service companies or partnerships. The noble and learned Lord is right to be concerned about this but the matter has been considered by HMRC in the construct that we are talking about today.
Lord Forsyth of Drumlean
Could the Minister elaborate on that? Setting up a bogus company in order to avoid tax is clearly black and white, but where someone living in Scotland who meets the test has multiple sources of income, perhaps through being on several boards and so on, surely they could legitimately set things up so that their only income was paid as dividend income and therefore avoid, quite legitimately and within the rules, the Scottish tax. Or is he saying that there will be some additional anti-avoidance measures?
Lord Sassoon
My Lords, depending on the nature of the scheme, it may or may not be caught by the anti-avoidance rules that already exist. Clearly HMRC, in its compliance role, will have to ensure that the issue of avoidance is fully addressed. These are complex areas and perhaps my noble friend will permit me to consider whether there is anything I can do to help where we see new areas of avoidance, if any, potentially being opened up, and what the technical thinking is about how these might be closed down. Some of the areas referred to by my noble friend sound as though they are getting precious close to artificial schemes that would be covered at present. However, let me take the matter away.
Let me address a couple of more points. On the broader question of the noble Lord, Lord Foulkes of Cumnock, of what had changed since the workshop, yes, I appreciate that the workshop raised a number of issues and I wrote to all noble Lords who were there answering the questions that arose. There have not been any changes proposed as a result of the issues that came up but it was a useful session. As noble Lords who were there will know, HMRC was there and listening hard. All the issues raised were already being thought about and, of course, this will be reflected in the guidance. It was a useful session because it will inform the drafting of the guidance. As the noble and learned Lord, Lord Davidson of Glen Clova, said, there will need to be clear guidance around this issue and therefore the more questions that are raised generally—but, please, not immediately—will help HMRC with the drafting of the guidance that will be needed.
Finally, I want to come back to this question of benefits and the universal credit, which is a very important area. The clause does not address it directly but it would be wrong to dismiss it at this point. The universal credit forms the background against which we must look at this. As noble Lords know, the universal credit is going to deliver a dramatically improved, simpler benefits system that smoothes the transition into work and improves work incentives. By 2016, when the Scottish rate of income tax is proposed to come into effect, the transition to universal credit will almost be complete, as that will be finished by April 2017. Universal credit is expected to be awarded on the basis of income net of tax, as existing income-related benefits are now. If the Scottish rate and the UK rates differ, then net incomes may of course differ depending on the amount of income tax paid, so that it is possible that there would be a difference to an individual’s universal credit entitlement as a result of the Scottish rate.
However, it is worth bearing in mind that many factors determine an individual’s net income and that a range of local factors could determine their universal credit award, such as housing or childcare costs. The Scottish rate would be another factor to be taken into the calculation. The extent of any divergence of entitlement would depend on a number of factors, including the prevailing rates in the United Kingdom, the rate set by the Scottish Government and whether an individual’s income is subject to income tax at all. I hope that gives the noble Lord some reassurance that the linkage with universal credit has been carefully considered.
Lord O'Neill of Clackmannan
I am grateful to the Minister for seeking to respond to this very complex issue. The kind of people who are likely to be affected by this may well be those who are currently employed in the public sector and whose wages are being considered for possibly no longer having a national rate. We could have the anomalous position of someone working for a local authority in Berwickshire being paid the same rate as someone in Northumberland—which is probably less than some other parts of the county—but ending up, because of the universal credit, getting paid more through benefit compensation than people south of the border in Cumbria or Northumberland, because they are being charged a higher rate of tax in Scotland. This kind of anomaly is going to create all kinds of difficulties. This form of taxation may not be the cause of it, but it will certainly be an exacerbating factor and have social consequences of quite a dire character.
Lord Forsyth of Drumlean
My Lords, I was going to follow up on the noble Lord’s point by saying that one of the consequences of this will be that the Scottish rate of income tax is higher in order to fund the Parliament’s additional commitments, but the English taxpayer is going to have to foot the Bill for the increased benefits payments that arise. Will my noble friend make arrangements so that the additional cost of the benefits that arise, because of the increased taxation being levied on benefit recipients, is taken from the Scottish block grant?
Lord Sassoon
My Lords, as I have tried to explain—and we can talk about the block grant at another point—the key point for these clauses and the interaction with the benefit system, which is very relevant, is that there will be a range of factors that will already be taken into account in calculating net income for the purposes of universal credit. I do not think that is conceptually any different for somebody who is working on one side of the border and living on the other. As we have been discussing during this really useful and important debate, the main-residence test will be the key driver here for most people. That will underpin all these considerations. In a sense, the points that the noble Lord has raised in relation to benefits are actually income tax points, which I have tried to cover by explaining that we are keeping this as simple as we can.
Lord Forsyth of Drumlean
I appreciate that my noble friend may not have had briefing or thought about the question of benefits, and I must say that I had not thought about it until the noble and learned Lord, Lord Davidson of Glen Clova, and the noble Lord, Lord O’Neill, raised it. But it is an important point because of how very small changes in income make a huge difference to the benefits that people are entitled to, because of the nature of the taper. So there is the effect on the individuals of the use of these powers by the Scottish Parliament; they will not be dealing with the Scottish Parliament or Scottish Government but with the Department for Work and Pensions.
There is a serious point here, because if the Scottish Parliament substantially raised income tax so that net incomes were lower there could be very significant increases in benefit costs arising from that action. My noble friend finished his speech by saying that this was all about increasing accountability of the Scottish Parliament for its decisions, but how can it be increasing accountability if the result of its decisions was to send a bigger Bill to my right honourable friend Iain Duncan Smith in his department and perhaps, thereby, create pressure on payment on benefits in England because of the unexpected consequences of this provision? So this is a transfer payment.
Before we get to the next stage, could my noble friend have a word with his colleagues whose responsibilities lie in this area and write a letter to those of us taking part in these proceedings, indicating how the circle will be squared?
Lord Gilbert
I distinctly heard a few minutes ago the noble Lord, Lord Forsyth, refer to bogus companies. This is a new concept to me, but the phrase did not seem to throw the Minister at all. Will he tell us what he thought the noble Lord referred to when he mentioned bogus companies?
Lord Sassoon
My Lords, if the noble Lord had heard the richness of this debate he might have understood the context in which all this was raised. I was pointing out that quite a lot of what my noble friend raised, if it relates to bogus companies and other things, will already be under the microscope of HMRC, which will deal with it as part of its normal UK responsibilities.
Lord Lyell
I commend my noble friend and express my enormous gratitude for the huge patience he has shown. He has promised to write to me, but could he please also ask his colleagues to look at col. 250 of our Second Reading debate on 6 September of last year? If he and his colleagues are able to look at it they will find that it is very much at variance with everything that he has said, and with what his colleague down the corridor has said, about lorry drivers. They said that there would be “very few” of those drivers. However, 360 of them drove for this company, as the noble and learned Lord knows well, because it is eight miles from his home and one mile from mine in Kirriemuir. Of those 360 drivers, they had identified 26 straight off as Scottish taxpayers. They had not had the indication, but they thought that 75 would be caught by this legislation. My noble friend and his colleague down the corridor might think that the figure was small, but it was 20 per cent, and that was just one tiny company in Scotland. Will my noble friend consider all the trucks crossing the border transporting food and 20 per cent of the drivers being caught? That is a little more than a few.
The Duke of Montrose
My Lords, this has been a very far-reaching and complicated debate and I must thank all those who participated in it. I must also apologise to your Lordships for starting off in such a rushed manner. I had gone out of the Chamber to see if I could find out what on earth the order was that we were trying to follow. Outside, I could find no evidence of what the order was, which was what brought me back in again—luckily, I was just in time.
Most of my amendments in this group were consequential with the exception of the last one, Amendment 54FB, which the Minister very kindly answered even though I had not spoken to it. It was about the definition of a day. The idea of saying that a day,
“means a period of twenty-four hours terminating at midnight”,
was to couple it on to subsection (1)(a) of proposed new Section 80F, which refers to,
“the number of days in the year on which T is in Scotland at the end of the day”.
The Minister seems perfectly happy to leave this as a vague definition, but to some of us it is hard to know whether,
“the end of the day”,
is the end of the working day or when you finally get home for your supper, or when you go to bed. Apparently in tax terms it is perfectly natural and normal to leave it completely undefined, which is certainly an interesting explanation.
I was interested when the noble and learned Lord, Lord Davidson of Glen Clova, raised the definition of a residence. It is reassuring to hear that the Government are already on to the case and are hoping to define a residence in statute. Although that is obviously a little further down the line, it will presumably be in place before the measures of this Bill come into effect. There is still the question of how HMRC will have a way of determining the total number of days that somebody has spent in Scotland for those who require this definition, in order to know whether they are taxpayers. I thought that the Minister was not quite correct to say that the object was to simplify the definition, because what I presented in my amendments is by far the simplest form of definition. The Minister seems to think—he might be right; I could not say until I look into it some more—that by bringing out a slightly more complicated definition he is making it simpler in application, which perhaps has much to recommend it.
The noble Lord said that nobody had raised the question of what would happen to Scots who were astronauts. However, if the Scottish Government start playing rather extraordinary games and the Bill does not pass in its present form, the Minister might have to address what will happen to a Scotsman living in Antarctica. In the mean time, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Lord Geddes)
Given the remarks of the noble Duke, it may be of assistance to the Committee if I explain where we are regarding grouping and degrouping. To the best of my knowledge, the following amendments will be addressed separately: Amendments 54A, 54B, 54C and 54D. Amendment 54E will be grouped with Amendment 54A, and Amendments 54F, 54G, 54H and 54J will be dealt with separately. I trust that that is correct.
Amendment 54A
Lord Forsyth of Drumlean
Lord Forsyth of Drumlean
I am most grateful for that guidance and I apologise for having spoken too early to this amendment. We have had quite a long debate about the incidence of liability for Scottish income tax. I thought that I might be able not to move this amendment, which is why I interrupted my noble friend and asked him to say something about the Armed Forces. I am very concerned about the position of people serving in the Armed Forces who may be stationed in Scotland, and whether they will be liable for the Scottish income tax. This is an important point which touches on a later amendment—which the noble and learned Lord, Lord Davidson of Glen Clova, mentioned—to do with the period to which Scottish income tax relates. Regardless of whether the test is no longer met, this could create an anomalous position in respect of servicemen.
During consideration of the Bill in the other place, the Government promised to bring forward a definition that dealt with servicemen. I have included one in the amendment—which is probing and not meant to be the answer—in the hope that I might provoke my noble friend into providing an answer that makes the system simpler. Judging by his remarks about the very concise definition in the 1998 Act and the definition in the Bill, that may mean that it looks more complex. However, at the moment, it seems that the position of people in the Armed Forces who perhaps live in rented or service accommodation is not clear. I beg to move.
Lord Sassoon
My Lords, Amendments 54A and 54E would add this new condition—condition D—to the definition of a Scottish taxpayer. If I understand rightly, my noble friend’s intention here is that a serving full-time member of the Armed Forces should be a Scottish taxpayer only if their main place of residence for any part of the year is in Scotland and that residence is a property that they own rather than one provided by their employer.
The Government have given careful consideration to the treatment of serving members of the Armed Forces in relation to the Scottish rate of income tax. We have consulted with the Scottish Government and following that consultation the Government have decided that members of the Armed Forces who meet the close-connection test should be liable to pay income tax at the Scottish rate. Prior to the introduction of the Scottish rate, HMRC will work with the Ministry of Defence to ensure that guidance is available to service men and women on their particular circumstances.
My noble friend raises a perfectly reasonable question about whether there is or should be an alternative test. At present, however, members of the Armed Forces will be Scottish taxpayers if they meet the close-connection test. It is difficult to see any justification for distinguishing between those who rent and those who own property, or the extent to which members of the Armed Forces do or do not rent property from the Ministry of Defence rather than having their own. Therefore, we believe it is appropriate to keep the basic test also for members of the Armed Forces. On that basis, I hope that my noble friend will withdraw the amendment.
Lord Browne of Ladyton
It would be helpful if the noble Lord could clarify the following matter. If in any set of circumstances a serving member of the Armed Forces who is ordered to serve and live in Scotland is thereby made liable to a higher rate of income tax, will the service of which he is a member compensate him for that difference?
Lord Lyell
Before my noble friend replies on that point, perhaps I may say that I also had it in mind. Indeed, 18 miles from my home, and not far from the place of birth of my noble friend Lord Forsyth, is 45 Commando at Arbroath. I took the trouble to ring the electoral office in Angus. I was told that servicemen can vote in Westminster general elections—not Scottish elections—when they nominate their place of residence. Is my noble friend saying that the Government have consulted him, the Treasury and the Scottish Government and are laying down a new law whereby servicemen will be taxable even though they cannot vote in Scotland? Of course, the Scottish Government would like to get more tax from servicemen, even if the latter are not getting a vote there. Will my noble friend please check that?
Lord Sassoon
My Lords, in answer to the first question, there are lots of situations where employers may move people around as a requirement of their employment contract. That is not by any means confined to the Ministry of Defence. People in a number of professions and occupations are moved around from one tax jurisdiction to another. Differential tax rates comprise a factor that needs to be taken into account in the total benefit package. The Armed Forces build that into the packages of servicemen working here or elsewhere.
As regards voting, I am getting into difficult philosophical discussions concerning tax without representation that could keep us going deep into the night. However, my understanding is that we are talking about a very specific matter to do with a rate of income tax which is quite separate from the law that relates to where people can vote.
In answer to the question from the noble Lord, Lord Browne of Ladyton, I have made the general point that employers need to consider total packages. However, I can give him specific reassurance that in the event that Scottish and UK rates differ at any point in the future, the Ministry of Defence will do what I suggested any employer has to do, which is to explore options to mitigate the effects of different rates of tax by using processes which are currently used for personnel serving abroad. I am glad to confirm that it will do what I rather expected it would.
Lord Kilclooney
My Lords, as I said earlier, there is a general impression in Northern Ireland that as Scotland moves towards greater devolution, perhaps even independence, there will be a higher level of taxation in Scotland than in the rest of the United Kingdom. That is the fear in Northern Ireland, because we have particularly close connections with Scotland, and we do not like the idea of paying more tax. Many people from Northern Ireland are in Scottish regiments and are based in Scotland. Are they going to have to pay higher taxation because they are in Scottish regiments, or, because their homes are still in Northern Ireland, will they still be paying United Kingdom taxation?
Lord Sassoon
My Lords, they will pay the Scottish rate of tax only if they meet the close-connection test that is at the heart of the clauses we debated in the previous group of amendments. It therefore entirely depends on the close-connection test, and particularly where their main place of residence is.
Lord Forsyth of Drumlean
Further to that point, this is a circular argument. My amendment chose to alter the provisions in the Bill because the test of close connection does not deal with the circumstances that the noble Lord just mentioned. On my reading of new Section 80E, which defines close connection,
“where T has 2 or more places of residence”,
a soldier may have one residence in the family home in Northern Ireland and the other may be barrack accommodation in Edinburgh or some other part of Scotland. As I understand it—the Minister can tell me if I am wrong—under that definition the soldier would be liable to pay Scottish income tax. That is clearly and absolutely not fair. He might be in Afghanistan or Scotland. No one expects him to pay Afghan tax.
I tabled my amendment to suggest a possible remedy, although it may not be ideal—perhaps my noble friend can comment further. I may be wrong but my recollection is that during consideration of this matter in the other place Ministers said that they would come forward with a view. My noble friend seems to be saying, “Well actually, soldiers are the same as everyone else”. They clearly are not the same as everyone else, and are not in the same position as someone who works for the Royal Bank of Scotland who gets posted from London to Edinburgh. I do not want to prolong the debate by talking about the military covenant and so on, but these service men and women are paid very poorly for the job they do, and therefore the burden of increased taxation could be significant.
What my noble friend said was very welcome if it was that where such soldiers are caught by Scottish taxation they will be compensated by having their gross salary increased so that their net position remains the same. That would be fantastic, but can we have that as an undertaking from the Government and perhaps have it written into the Bill at a later stage? Perhaps my noble friend will come forward with an amendment to achieve that purpose. Could we then also work out a system similar to the transfer payment that we mentioned when we talked about the impact of a higher tax rate on welfare payments that would be made in Scotland? Such a system would involve a transfer payment from the MoD budget to compensate for the increased revenue that was being raised from tax in Scotland. The MoD therefore would need to be compensated for that by a reduction in the Scottish block grant.
Lord Maxton
I am rather confused by this. After listening to the question of the noble Lord from Northern Ireland, I can see a situation arising in which a soldier could be posted to, say, Edinburgh, and could rightly show that his family, wife and children live elsewhere in the United Kingdom—in Northern Ireland—whereas a single soldier in the next room would be resident in Scotland, and therefore on a different rate of pay.
Lord Forsyth of Drumlean
I agree with the noble Lord, which is why my amendment proposes that if they are in military rented accommodation, they should not have to pay. Another way to deal with it would be to give them the choice of where they pay their tax. As it stands, their position is anomalous. I must say to my noble friend that if I were a member of the armed services listening to him saying that there are a number of options that the MoD will look at, I would not be very satisfied. We need clarity, particularly because so many Scots serve in the armed services and so many bases to which members of the forces are deployed are in Scotland. On the argument about accountability, as my noble friend said, many of them will not have had the opportunity to vote in the Scottish parliamentary elections on the taxes that will be imposed on them.
The military are a special case, and my noble friend ought to say that he will take this away and come back with a government amendment to deal with it, either in the terms that he suggested—that the MoD would provide compensation—or some other terms. Simply saying that the Bill provides for it and it is just about applying the test of close connection will not do.
Lord Sassoon
My Lords, at the risk of repeating myself, the Government undertook to come back, having looked at this again. We have; we consulted the Scottish Government; and we consider that there are lots of individual situations that can be called anomalous, but that there are just lots of individual circumstances related to Armed Forces personnel and a lot of other categories of people who should be taken into account when considering how the Bill will operate. On reflection and after consultation, it was decided that the basic test of close connection should apply to the armed services, as it will to everybody else. I accept that how it works out will depend on an individual’s circumstances.
As I explained as clearly as possible, not only will guidance be given so that individual members of the armed services know how to interpret the test, but—I repeat again—in the event that Scottish and UK rates differ at any point in future, the Ministry of Defence will consider exploring options to mitigate the effects of different rates of tax by using existing processes used for personnel serving abroad. The metric is already there for service personnel sent abroad.
In answer to my noble friend’s further point, I do not believe that that should be written into the Bill. It is something that the Ministry of Defence does in the normal course of events—it looks at the anomalies, in his terms.
Lord West of Spithead
My Lords, I apologise to the House because I have not been here for the whole debate. Indeed, I only came in because I suddenly became aware of this point. This is an issue that could easily be resolved, but the position we have got ourselves into stands against reason. It will not go down well with people. Perhaps the Government could take it away to think about it. If it gets someone like me dragged out of my office when I am working because I suddenly become aware of it, my goodness, I can tell noble Lords what effect it will have on the military across the board. I beg the Minister to think about making some concessions along the lines suggested by the noble Lord, Lord Forsyth.
Lord Kilclooney
My Lords, I come back to the position in Northern Ireland. It is all very well to say that if there are higher taxes in Scotland, a serviceman serving in a Scottish regiment in Northern Ireland, who at the moment pays a standard United Kingdom tax rate, will be judged as living in the place with which he is most closely identified. It should be remembered that many soldiers stationed in Scotland do not like to register their address in Northern Ireland for obvious security reasons. Therefore, they could well be looked on as being Scottish taxpayers and have to pay the higher taxation that we fear will apply in Scotland.
Lord Forsyth of Drumlean
My Lords, I shall try once more with my noble friend. Perhaps he could translate the language that he used, which I recognise as coming straight out of the script of “Yes Minister”. I know that this is fed to him from elsewhere and we are not supposed to notice but, when he said that the MoD would use its usual procedures and look at all the options, did that mean that the MoD would pay the tax if soldiers stationed in Scotland were subject to a higher rate of income tax? If that is clearly and absolutely understood, I am less concerned about the definition. However, his language was a bit fuzzy and he did not really seem to make that absolutely clear. If he is giving an undertaking on behalf of the Treasury and the Government that servicemen stationed in Scotland will not lose out as a result of the incidence of Scottish income tax, I shall be very happy to withdraw my amendment.
Lord Sassoon
The words were carefully considered. I have put them on the record twice and my noble friend knows perfectly well that I am not going to go any further, whether I have a script or not. The Ministry of Defence will do just what I said it will do in these circumstances, if and when they arise.
Lord Sewel
My Lords, I think we all appreciate that the Minister cannot go further today than he has gone. However, we have Report stage. Is he prepared to come forward with something more specific on Report—or does that remain at least a possibility?
Lord Sassoon
I am not sure what it is that the noble Lord wants me to come forward with. There are two things here: the basic test, where the Government’s position is that the close-connection test should apply; and the question of what the compensation arrangements might be in the hypothetical circumstances, which are quite possible, of a higher rate of Scottish tax being imposed. I cannot give a commitment to come back with anything more on either point, although I am taken in particular with the very practical points that might arise if, for example, there are security reasons for not disclosing the address of a main residence. These are the sorts of important and practical issues that need to be taken account of in the guidance which serving personnel clearly need to be given, as and when they have to apply the test.
The Duke of Montrose
My Lords, it is probably not my role to get the Minister off the hook in any way but we are, quite rightly, taking the sober and, one might say, realistic view that Scottish tax might go up. We are obviously missing what one might consider to be the almost messianic view of Alex Salmond that everything is going to be paid for by North Sea oil, renewable energy, and marine and wind energy, and that tax rates might go down.
Lord Forsyth of Drumlean
Picking up the last point made by my noble friend the Duke of Montrose, the Bill does not provide for North Sea oil, wind energy or any of those things, and that is why the tax will go up. If Alex Salmond were here, that is what he would say and it is what he will say. He will say that the Scottish rate of tax has to go up because Scotland does not have the power to deal with all these other things. I can write the script; it is not very difficult. The tax is going to go up.
I thank everyone who has participated in the debate. I think that my noble friend should be very influenced by the words of the noble Lord, Lord West, who knows a bit about the military. He should also be very influenced by the position in Ulster that has been spelt out. It is simply not fair to expect members of the Armed Forces who are deployed and living in barracks in Scotland to pay a higher rate of tax. When my noble friend says, “We consulted the Scottish Parliament and it was happy to leave it as it is”, of course it was happy to leave it as it is; it wants the money. It is in its interests to have as many people as possible paying. My noble friend shakes his head. Why is it not in its interests?
Lord Sassoon
It is simply that it is a matter of principle how tests should apply to different categories of people. It is not a numbers game as to how many will necessarily fall into what categories. It is a matter of principle as to how members of the Armed Forces should be treated. The Scottish Government—not the Scottish Parliament, to correct my noble friend—believe that the proper principle here is that the close-connection test should apply.
Lord Forsyth of Drumlean
I stand corrected. If my noble friend followed any Scottish business, he would realise that the Scottish Parliament and the Scottish Government are treated as the same thing by the First Minister.
I am so pleased that my noble friend has made this point. It is a matter of principle that members of the armed services who are deployed to Scotland, living in barrack accommodation, who have no choice in the matter, being under military discipline, should not be required to pay the additional tax. If the Government take the view that the additional tax should fall on them because it is administratively convenient for them, they should get a clear and absolute undertaking that the Ministry of Defence will meet the costs of that. The costs should fall not on the English taxpayer but should be rebated back by the Scottish Parliament. Otherwise it is a transfer of money from the MoD to the Scottish Government because they have put taxes on members of the armed services who are stationed in Scotland.
I will happily withdraw the amendment but we will come back to this at a later stage in the Bill. I advise my noble friend to discuss with his colleagues how he can improve the position. I do not believe that it is sustainable. It is an extremely unfair position, and for us to be doing it at this moment—of all moments—when the whole country is very conscious of how much we owe the armed services, would be a mistake. I beg leave to withdraw the amendment.
Lord Forsyth of Drumlean
“(1A) If the activity which allows T to meet conditions A, B, C or D is undertaken for some but not all of the tax year then T shall be a Scottish taxpayer only for that period of the year and a UK taxpayer for the remainder of it.”
Lord Forsyth of Drumlean
My Lords, I want to touch on this briefly. It was a point alluded to by the noble and learned Lord, Lord Davidson of Glen Clova. This is about fairness and I hope that my noble friend the Minister is not going to tell me that there is a principle involved here. I see a principle, which is that you should not be taxed for something that you have not received.
As drafted, the Bill provides that if at any time in the tax year someone is defined as a Scottish taxpayer but then changes his status, my noble friend says that he will have to pay the tax. Perhaps he is one of those members of the armed services, who is stationed in Edinburgh from April to May and then goes somewhere else for the rest of the year. He will have to pay the Scottish rate of income tax for the full year, not only for the period when he was defined as a Scottish taxpayer. That cannot be right. I can see why it is administratively convenient for the Revenue and the Treasury. They have thought up the idea of having different tax rates in the United Kingdom but I do not see why taxpayers should have to bear the burden. It is unfair and my amendment provides that liability to pay the Scottish tax should arise only for the time when someone is getting the benefits of the services and political representation that the Scottish Parliament provides. I hope that my noble friend will accept this as a matter of principle and on grounds of fairness. I beg to move.
Lord Sewel
My Lords, I do not want to keep on going back to 1997-98, but this was the sort of problem that arose then. I shall take the argument slightly further forward, because we now hear that the Welsh Assembly wants to have tax-varying powers. That is very understandable. If the same test is applied in Wales as has been applied in Scotland, it would be possible for a person to be a national taxpayer in Scotland and a national taxpayer in Wales for the whole of a tax year.
Lord Sassoon
My Lords, my noble friend’s amendment would introduce the concept of split-year treatment for those who move between the UK and Scotland during the tax year. I quite accept that a more accurate split of tax payments based on the time an individual spends in Scotland and the rest of the UK might in theory be desirable, but it would add very considerable cost and complexity to the system. As I took pains to point out in the previous discussion, in the Bill, we have been trying to keep the overlay of the application of the Scottish rate as simple as possible. My noble friend continually postulates circumstances in which there is a higher rate of income tax in Scotland and he puts the case of somebody who is disadvantaged by spending a relatively small amount of the year in Scotland but being caught by the definition for the whole year. I could equally well give cases that might apply the other way round. I accept that, in theory, the system should more closely be related to the amount of time an individual actually spends in Scotland. Theoretically, one cannot argue about that, but it would introduce cost and complexity into the system without the advantage or disadvantage going in one particular direction. What should rule here when we come to the practical application—
Lord Myners
I listened carefully to the Minister’s response to the previous amendment and to this amendment. I see a policy unravelling here. I see the Treasury having to bring the objectives of this Bill into line with practical implementation and finding it extremely difficult to do so. The Minister has just told us that there is a practical difficulty in addressing the amendment proposed by the noble Lord, Lord Forsyth. Can he explain why that practical difficulty does not also arise with people who are able to change their non-domicile status in the middle of a tax year and, indeed, change twice during a tax year? If that can be managed for the super-rich, why can it not be managed in this situation?
Lord Sassoon
First, if the noble Lord, Lord Myners, had actually been here for the substantive discussion of the enabling clauses of the Scottish income tax rates, he would know we discussed residency questions at length, including people who are part resident here or overseas. I think he has come in for the wrong part of the Bill, but I appreciate that he is a very busy man. We are sorry that we did not have him enrich the debate. We are sorry that he did not come and discuss the clauses where the basic residence test was—
Lord Myners
That is language of asperity. If the Minister does not withdraw, I will move a Motion that the House vote on that. I have made a perfectly reasonable contribution. We are in Committee, so I am perfectly entitled to do that. The fact that the Minister is struggling to answer the question is not a justification for personal rudeness and language of asperity, on which the rules of the House are very clear.
Lord Foulkes of Cumnock
I was here for the paving debate and the Minister did not deal with the specific point that my noble friend Lord Myners has just raised.
Lord Sassoon
This is all very good theatre, but we discussed the basic question of UK residence earlier this afternoon. As I said, I am very sorry that the noble Lord, Lord Myners, was not able to be here to enrich that discussion, but that it not what we are talking about in this debate. We are talking about different matters, which are important and the ones that we should concentrate on.
Lord Myners
I am sorry, but I have asked the Minister a very simple question. He has told us that for practical reasons it is not possible to accept this amendment. I am arguing that exactly the same practical issues arise with non-domiciles and it is possible for them to change their status more than once in a year. Can the Minister explain what practical reason frustrates the amendment moved by the noble Lord, Lord Forsyth, but permits non-domiciles to do this? It is a very simple question.
Lord Sassoon
I repeat that if the noble Lord, Lord Myners, had been able to be here for the earlier discussion, the key question about the residence test in this Bill is that it builds on UK residence; you have to be a UK taxpayer before the question of the Scottish status applies. We discussed that at some length earlier, and the whole concept is to keep it as simple as possible for the basic overlay of the Scottish status on the UK status. Exactly the same thing applies in respect of this proposed amendment—which goes directly to his challenge—which is that theoretically we could find more perfect concepts but we have to live in the real world. We want to make this fair but we want to make the tests workable for both the individual and, of course, HMRC, but particularly for the individual.
Lord Sassoon
Perhaps I can come back to my noble friend’s point before he jumps in again. He gave an example to make a particular point, but I should have drawn his attention to the fact that the example he gave of residency of two months—April and May—in Scotland of course does not make that individual a Scottish taxpayer. The basic test, as we have discussed at some length, is if your sole or main place of residence is in Scotland for the majority of the tax year. We need to be very careful about what examples we give.
Lord Forsyth of Drumlean
That is definitely a point to the noble Lord. I was thinking on my feet and of course he is quite right. If he wants, I can spend the next 10 minutes giving him examples where it does apply but I suspect he would rather I did not.
Following up on the point made by the noble Lord, Lord Myners, it is the case that for wealthy people who are non-doms, the Revenue can accommodate them. My noble friend said—I thought very unfairly—that the noble Lord, Lord Myners, had not been here for the bit of the debate where he dealt with these issues. I have been here since the beginning and nothing he has said addresses this point.
Lord Sassoon
My Lords, I am sorry, but we discussed at some length the fact that the Government are working to introduce a statutory residence test that deals with these things. Forgive me, but that goes absolutely to the heart of the point that the noble Lord, Lord Myners, is raising. I suggest that we have actually gone to this point very directly this afternoon.
Lord Forsyth of Drumlean
I think that my noble friend is missing the point that is being made; namely, that the Revenue is able to deal with people who are flitting in and out of being liable for UK tax. It has nothing to do with the test of residency. In this case, it is about fairness and whether you are liable for the tax arising from whether you are a Scottish taxpayer or an English taxpayer. The noble Lord was simply making a parallel case and asking why the Revenue can accommodate some people. I suspect the reason is that there are a few of them and they pay a lot in tax. The Inland Revenue might look at this and say, “Oh well, we could have a lot of people who might be moving and it will be difficult”. I thought that the whole argument for this was based on it being terribly simple because it simply means changing someone’s tax code. Tax codes are changed all the time. What is so difficult about changing someone’s tax code when they have moved from Scotland to somewhere else or to change their liability for Scottish income tax during the course of the tax year?
Lord Sassoon
My Lords, let me have a go again. I think that my noble friend has answered the key part of the question. As we have been discussing for a long time today, we want to make this construct as simple as possible for the great majority of people. That is why the test is the close-connection test, which comes back essentially to where the main residence is for the majority of the year. It is as simple a test as there can be.
As my noble friend rightly points out, these questions about non-residents, non-doms and all that refer to a comparatively tiny number of people with complex tax affairs. Suggesting that the Revenue can deal with individuals with complex affairs and usually high incomes is quite a different matter from requiring the majority of the Scottish population, for example, to have to deal with a complex test of coming in and out of Scottish tax treatment.
Lord Forsyth of Drumlean
My Lords, we have had a very useful debate. I am most grateful to the noble Lord, Lord Myners, for his contribution, which woke us all up a bit. I am not persuaded by my noble friend’s argument, at the end of which I think we got to the bottom of the matter—it simply is going to be too much trouble and, as regards these people whose tax status changes during a year, there might be rather a lot of them and we are not too bothered about it.
I venture to suggest that for those people the difference between perhaps paying Scottish tax and English tax might be significant. When my noble friend says, “Well you would be dealing with the whole of the Scottish population”, I do not think that the whole Scottish population will change their tax status in any one year. The Revenue is quite capable of dealing with changes in circumstances in a variety of ways. When my noble friend says that he wants to keep it as simple as possible, perhaps I may suggest that the way in which to do that is to drop this whole idea of having a separate Scottish income tax.
This is the Government’s idea and if they are going to change the tax system, they should be able to make sure that it is workable and treats people fairly, and that the answers to our questions are delivered. For the life of me, I cannot see how it can be right that someone who moves from Scotland to England continues to have to pay Scottish tax. Of course, at the other end of this building, none of this was discussed because it was guillotined and there was no opportunity. But I would not like to be a Member of Parliament living in England who receives a letter from a constituent asking why they are having to pay Scottish income tax when they are now living in England. I do not know the answer. If we sent a standard reply from the Treasury saying, “Well, it is administratively simple to make it this way”, that would be a vote lost and a very unhappy constituent.
Lord Maxton
When the noble Lord talks about voting, someone moving from Scotland to England would be able to move their vote. They would not be able to move their tax apparently, but they would be able to take themselves off the register in one place and put themselves on the register somewhere else.
Lord Forsyth of Drumlean
I would guess that that must be because electoral registration offices have far more staff than HMRC, so it is probably easier for them to cope with these matters. This is an important principle. The idea is that it is just too difficult and too complicated. When we raise the issue of how employers are going to deal with a payroll where people are constantly changing from being liable for Scottish or English tax, we are told by Ministers and the Treasury, “It is very simple. It is just a matter of changing the tax code, so it is not a problem”. But when it comes to the Treasury having to take account of liability, if it is about collecting the tax, then it is far too difficult and complicated. I think we are getting a bit of doublespeak here. I do not say that that applies to the Minister—
Lord Sewel
Before the noble Lord reaches his peroration, as I am sure he will shortly, does he not accept the point I tried to illustrate somewhat earlier that although it may be unfair for a person to move from Scotland to England and still pay a Scottish tax, it would be totally iniquitous for a person to move from Scotland to Wales, if Wales gets tax-raising powers, and finish up paying two lots of extra tax?
Lord Forsyth of Drumlean
I have considerable respect for the noble Lord, who of course was the architect of the whole devolution thing and of the Scotland Act.
Lord Forsyth of Drumlean
I was about to go on to say that I am not sure that this problem would have arisen under the definition which applied in the 1998 Act. When I asked my noble friend why he had abandoned the definition in that Act, he told me that he had done so in order to achieve clarity and to make it simpler. It is not simpler, as the amendment we are discussing illustrates. If the noble Lord says that the anomaly he speaks of would not arise under his definition, which was certainly shorter, perhaps we should go back to the drawing board. However, my noble friend does not look as if he wants to do that.
We have had a good debate on this—
Lord Myners
Before the noble Lord, Lord Forsyth, concludes, I should like to say that I agree with just about everything he has said, except that he said in respect of non-domiciles that the probable reason why the Government can handle all this in terms of processing is because there are very few of them and they pay a lot of tax. In fact, there are far more of them than is customarily imagined and they pay very little tax.
Lord Forsyth of Drumlean
I must take the noble Lord’s word for it because he moves in those circles and I do not.
I return to the amendment. We have had a good debate, but I have to say to my noble friend that I will table it again and we will come back to it at a later stage of the Bill. I hope that he will consider this issue because I think that there is some feeling about it in the House. Indeed, he himself has acknowledged that it is not fair but administratively convenient. I beg leave to withdraw the amendment.
Lord Forsyth of Drumlean
The Deputy Chairman of Committees (Lord Skelmersdale)
My Lords, I have to tell the Committee that if Amendment 54C is agreed to, I cannot call Amendment 54D.
Lord Forsyth of Drumlean
This amendment would delete the listing of elected Members as being caught by the Scottish tax, but it is not because I seek special privileges for elected Members or that I wish to prevent them having to pay what I believe will be the higher Scottish tax. Throughout our debates today, the Minister has been at great pains to point out that he wants to have a simple scheme, one that is easy to understand and under which everyone would be able to identify whether they were liable for Scottish tax. What I do not understand is why it is necessary to set out in the Bill that Members of Parliament for constituencies in Scotland, Members of the European Parliament for Scotland and Members of the Scottish Parliament are all Scottish taxpayers. Why can the criteria not be applied by them in the same way as everyone else? We will come on to this at a later point, but some of us who live in Scotland and are Members of this House are slightly puzzled and bewildered as to why Peers with a Scottish connection have been left out; I will come on to that in a later amendment.
Lord Lyell
I congratulate my noble friend Lord Forsyth. I want to call him Lord “Bazooka” Forsyth because he aimed at those who do not pay tax. I am sure that he and my noble friend on the Front Bench will be aware that Members of the House of Lords are the only people in the United Kingdom who get their expenses between their home and their place of work—if you call this a place of work, especially on a day like this—paid, yet are not liable for tax. If you are a government Minister, you are liable for tax. I am curious as to why no fewer than seven of our government Front Bench are not paid. Perhaps my noble friend would take care about who is paying tax, and have a look around us. In the words of the good book, “Let he who is without sin cast the first stone”.
Lord Forsyth of Drumlean
Actually, I am not a tax expert. I think that my noble friend is taking us down a diversion, because Members of the House of Lords are not paid, they are reimbursed for their expenses. It is not a taxable benefit. My beef with the Bill is that it singles out elected Members for particular, special tax treatment. It does not really matter whether it is to their advantage or disadvantage. I was not raising a general point about the taxation of travel by Members of Parliament or Members of the House of Lords.
Lord Sassoon
Well, my Lords, let me give it a go. My noble friend is not easy to satisfy on these things, but I argue that it is entirely consistent with my arguments for the rest of this afternoon to say that this provision, as drafted, gives simple and clear guidance for a category of individuals, namely Members of any of the three parliaments, that they do, for the avoidance of doubt, have a close connection with Scotland and should therefore fall into the “Scottish taxpayer” definition. It is as simple as that. Once one accepts, which I am not sure that my noble friend does, that the close-connection test should be at the heart of this, I suggest that this is a simple follow-on from that, an avoidance-of-doubt provision which is entirely appropriate. We have spoken today about members of the Armed Forces who may not have a choice about where they serve, but it is right that a Member of any Parliament who has chosen to serve a Scottish constituency is for the avoidance of doubt treated as a Scottish taxpayer. They have a clear connection to Scotland which should be recognised and which is consistent with the basic provisions of the test that we are talking about.
Lord Foulkes of Cumnock
However, will the Minister confirm that not all Members of this Parliament are treated as British taxpayers and are not resident in Britain for the purposes of tax?
Lord Sassoon
My Lords, I would like to keep this debate to discussion about Scottish taxpayers. As my noble friend has already said, discussion about the status of Members of this House is something of a diversion whose relevance to this clause I do not see.
Lord Foulkes of Cumnock
With respect, throughout the previous debate, the Minister said that the definition of Scottish residents and Scottish taxpayers was based on British residence. He had used the British example as the template in coming to a conclusion in relation to Scottish residents and Scottish taxpayers, so this matter must be relevant.
Lord Sassoon
Forgive me, my Lords, I thought that we were straying into questions about tax status and Members of this House. We are talking about Members of another place with a constituency in Parliament, Members of the European Parliament and Members of the Scottish Parliament. Most Scottish parliamentarians will already meet conditions A and B in new Section 80D, but there may be circumstances where this may not apply. For example, a Member may have gained or lost a seat at a recent election—it could have happened when an election was held early in the tax year—and decided to move elsewhere in the UK. The test here is that there should be clarity. If the person has been a Member of one of these Parliaments for a Scottish seat for some part of the year and has chosen to be so, they should be Scottish taxpayers for the year, but I appreciate that, depending on whether they come in or go out at different points of the year, the situation could be different. However, this is consistent with what I have been saying today: that the basic test is a close-connection test and that it should be simple and clear. Members of both Houses of the UK Parliament are deemed to be UK-resident for tax purposes if they are a Member for any part of the tax year. If the noble Lord, Lord Foulkes, wants to draw a parallel between the two Houses of this Parliament and what we are applying through the Bill as it stands, I say to him that the situation would be entirely lined up. If you are a Member of either House of the UK Parliament for any part of the year, you are deemed to be UK-resident for tax purposes. That is completely consistent with what is proposed in the Bill for Members who sit for Scottish constituencies. That is how the Bill should stand.
Lord Steel of Aikwood
My Lords, I suspect that there is nobody listed in the category in the Bill who does not live in Scotland, but the Minister is right in one respect: it was not always so. My predecessor as MP for Roxburgh, Selkirk and Peebles lived in London—I do not say that critically; that was a fact. He did not come from Scotland but he had a Scottish constituency. He came to visit the constituency dutifully from time to time, but he certainly would not have been regarded as having a close connection with Scotland, nor would he have spent the majority of days in Scotland. So, although I cannot think of anyone who would be excluded by taking this out, as my noble friend Lord Forsyth suggests, it could happen.
It reminds me of a story that Jo Grimond used to tell about coming across one of the knights of the shires at King’s Cross station at the start of the Summer Recess. He was putting his trunk into the guard’s van on the train and he was in a very bad mood. Jo Grimond said to him, “Why are you so upset?”. He said, “It is not the thought that I am going to my constituency; it is the thought that I shall have to go next year as well”. Fortunately those days have gone and I do not think that that would apply now. None the less, it is a reasonable safeguard to have this clause in the Bill.
Lord Kerr of Kinlochard
The noble Lord, Lord Forsyth, has drawn attention to a point of principle here. Creating special categories is, by definition, undesirable. It is probably the case that every single person who meets the three categories listed here would qualify as having a close connection under the other tests of what a close connection is. It is very unlikely that any of them would not meet the test of residence and the number of days resident, so why create this special category? I cannot see a practical argument for it but I see an argument of principle against it.
Lord Forsyth of Drumlean
My Lords, I do not think the Minister made the case for having this in the Bill when he was trying to give an example of someone who might be caught, notwithstanding the reminiscences of former Liberal MPs for Scotland, or whichever party they were from. This does not exist nowadays. If you were an elected Member and there was an idea that you were avoiding Scottish income tax, the practicalities would be death and destruction. The measure is completely unnecessary. As the noble Lord, Lord Kerr of Kinlochard, who was advertised on the annunciator as the noble Lord, Lord Norton of Louth—I say this in case Hansard gets it wrong—said, this is a bad principle.
On the earlier amendment, I referred to there being a real injustice in respect of the armed services and I was arguing for a specific provision for them. My noble friend responded by saying, “We think that the existing tests cover it and therefore I am not going to do it”. I cannot reconcile these two competing bits of logic. If his position is that the criteria provide a clear view as to whether or not you are caught, why single out Members of Parliaments? I suspect its origins can be found back in the debates about the impact of a Scottish income tax and whether Scottish MPs would be caught, and that has been written into the Bill.
The provision is completely unnecessary and I hope that my noble friend will think about taking it out. Apart from anything else, it would reduce the number of column inches of legislation which a Government committed to it would produce. I beg leave to withdraw the amendment.
Lord Forsyth of Drumlean
“(d) a judge, peer or civil servant with responsibilities for, or a close connection with, Scotland (see section 80E)”
Lord Forsyth of Drumlean
My Lords, having just argued for that measure to be removed from the Bill, and having listened carefully to my noble friend’s arguments, which I do not believe are sufficient to justify maintaining it there, and given that he is going down the track of listing in the Bill people about whom there might be some doubt but who ought to be caught by the income tax, it seems to me that we should extend this beyond elected Members of Parliaments to include others. I am thinking of Appeal Court judges, Peers and, of course, civil servants who have a close connection to Scotland. Amendment 54D starts a list, to which others are welcome to contribute, to add to those Members of Parliaments who have been singled out as being liable for the Scottish tax.
I am not seriously putting this forward—it is a probing amendment to try to illustrate the absurdity of the position. However, if my noble friend persists with his view that Members of Parliament are included, I would certainly be tempted to come back to it. I do not see why constituency Members of the other place should be automatically deemed to pay income tax, whereas, say, without being personal, a member of the Supreme Court or a civil servant who perhaps comes down to work in the Scotland Office is not treated in the same way. I am longing to hear what my noble friend has to say on this apparent dichotomy in their treatment under the Bill.
Lord Kerr of Kinlochard
My Lords, I follow exactly what the noble Lord, Lord Forsyth, is doing but it gets worse and worse. The best answer would be to remove these special categories altogether. Other countries have gone down the road of having special treatment for the public sector nomenklatura and singling it out in legislation. It is not a good road to go down.
Lord Davidson of Glen Clova
My Lords, might I also perhaps encourage the noble Lord, Lord Forsyth of Drumlean, to consider the position of judges. One of the great strengths of the United Kingdom is that Scotland has access to the whole Supreme Court, and therefore some of the finest minds and judiciary in the world. All those members of the Supreme Court have responsibilities for Scotland and it would perhaps be unfortunate if all 12 members of the court were to suddenly find themselves subject to the Scottish rate of income tax. I know he is looking for suggestions for his list, but possibly that one should be removed.
Lord Sassoon
My Lords, I see a clear distinction between the previous category of people and parliamentarians, who are different in a number of respects, not least because they are specifically tied, in a very clear way that we well understand, to the electorate and a constituency in Scotland. However, the extent to which a judge, a Peer or a civil servant could be said to have responsibilities for Scotland will vary enormously from case to case. My noble friend has said that this is a probing amendment and that he is not serious about it, so it would be wrong to criticise the amendment for the flaws in its drafting, but goodness knows how one would go about defining what “responsibilities” means in this context and how the test would apply in practice. It would be very difficult.
I certainly agree with the sentiment that we do not want to go down the slippery slope that the noble Lord, Lord Kerr of Kinlochard, identifies of putting lots of people into some special category. Obviously, many judges, civil servants and, dare I say it, Peers will have a close connection with Scotland and will therefore be caught or encompassed by the definition of “Scottish taxpayer” as defined in the draft Bill. I am with the noble Lord, Lord Kerr, in that I do not think we should go further down this route other than in the specific case of the parliamentarians, where the considerations are different in a number of respects, not least because they are very specifically tied to Scotland in a way that this other, looser, category would not be. It is right that the individuals identified in Amendment 54D should have the conditions A and B applied in the same way as all other taxpayers. On that basis, I would yet again ask my noble friend to withdraw his amendment.
Lord Forsyth of Drumlean
Well, I am absolutely persuaded by my noble friend’s argument that it would be wholly inappropriate to list these people in the Bill, but I am not persuaded by his suggestion that Members are in some special category that requires them to be defined in that way. Indeed, the only example that my noble friend could come up with was the example of someone who had lost their seat and had moved to England. I certainly lost my seat, but I did not move to England. That is really stretching it, because presumably if they have lost their seat it no longer applies, but he was arguing that they should pay tax for the part of the year when they were not actually liable for tax, which related to one of my previous amendments. We are really therefore in Humpty Dumpty territory here: when I say something means something, it means what I say. There is an anomalous position here, which the amendment highlights.
I do not agree on the point about judges. The last thing I want to do is to increase the taxes of someone for whom I have considerable regard, such as the noble and learned Lord, Lord Hope of Craighead, who lives in Edinburgh and sits in the Supreme Court. I do not know whether it is formal or informal, but in the Supreme Court we have always had an outstanding judge. Sadly, one of the Scottish judges, Lord Rodger, passed away. Clearly, those judges have a connection to Scotland, and I could make as strong a case as my noble friend makes for Members of Parliament, but I would not dream of doing so because I think that it is rubbish. I do not think that the arguments apply.
It is a very bad principle to use legislation as a chalkboard to write political statements. It could very well backfire. There is not the slightest possibility that there will be a reduction in income tax as a result of the power being available to the Scottish Parliament, unless a Government come in who are both mad and committed to slashing public services in a big way. However, if it worked the other way round and, of all the Members of Parliament sitting in the Chamber, those from Scotland paid a lower rate of tax because it was written into statute, that would be a tricky thing to defend, not because they were liable for the lower rate but because it had been written into statute that their status applied in that way.
These are not trivial points. It has been a useful debate, if only to illustrate that this has not been properly thought through. We will return to it at a later stage. I beg leave to withdraw the amendment.
Lord Forsyth of Drumlean
“(6) Any organisation collecting, or administrating the collection of, income tax from Scottish taxpayers shall consider appeals against its decisions and formal complaints from individuals by operating a system which includes—
(a) a two stage appeal process within the body,(b) independent review by The Adjudicator’s Office, and(c) final review by the Parliamentary Ombudsman.(7) Appeals against the decision that an individual has met a condition to be a Scottish taxpayer will be considered under the process set out in subsection (6).”
Lord Forsyth of Drumlean
My noble friend the Minister dealt with this matter in our discussions.
Lord Forsyth of Drumlean
“(3A) Before exercising any power under subsection (1) or (2), the Treasury must consult Scottish Ministers, the Scottish Parliament and other interested parties.”
Lord Forsyth of Drumlean
This amendment requires the Treasury to consult before altering reliefs, disapplying or nullifying enactments. In an earlier debate when I suggested that the Scottish Parliament should have to consult before raising a higher rate of income tax, my noble friend said that the whole point of the legislation was to create accountability for the Scottish Government and that they should be free to carry out their powers without any specific requirements to consult. The Treasury using these powers to alter reliefs could have a significant effect on the baseline revenue of the Scottish Parliament. We touched earlier on the position of charities, for example, which remains unclear. It therefore seems to me that at the very least, the Treasury should be required to consult before using these extensive powers. I beg to move.
Lord Davidson of Glen Clova
My Lords, I support the noble Lord, Lord Forsyth, in seeking further areas of consultation. How true it is that the Scottish Parliament, under improved devolution, will have greater powers. None the less, it remains part of the United Kingdom and therefore it would be very important that consultation on areas which could have a significant effect throughout the United Kingdom should be put in place by the Treasury.
Lord Sassoon
My Lords, Amendment 54G would indeed require the Treasury to consult interested parties, specifically including the Scottish Government and Parliament, on its plans. It may be helpful to explain the Treasury’s new approach to tax policy-making, which was published with the 2010 Budget, because that sets out the Government’s commitment to consult on tax changes in legislation. Secondary legislation made under the power in proposed new Section 80G would be treated no differently, so we already have a commitment to consultation through the Government’s general approach to consultation on tax changes. Indeed, in the context of the Bill and through its technical groups, the Government are already consulting on further changes needed as a result of the Scottish rate. The Scottish Government have been involved in these discussions, so I have absolutely no difficulty with the underlying concern that my noble friend seeks to address here. I simply point him to the fact that since 2010, under the new framework which the coalition Government have put in place, we are doing all these things already on a UK-wide basis under the policy that we announced.
It is important to recognise, nevertheless, that any changes which are made as a consequence of the introduction of the Scottish rate will still need to fit within the wider UK income tax system. I believe it is correct that while the Government are committed to consulting with the Scottish Government, Ministers and Parliament, and with others as part of our general approach, the Government should nevertheless have the final say on how these matters are handled, just as they do on how matters are handled across the UK tax system. On that basis, I again ask my noble friend to withdraw his amendment.
Lord Forsyth of Drumlean
I thank my noble friend for that answer. I have noticed that there is quite a lot of consultation going on these days on tax policy, in the run-up to the Budget. I accept that the Government have made strides in this respect and that my amendment may indeed be redundant. I beg leave to withdraw it.
Lord Forsyth of Drumlean
Lord Forsyth of Drumlean
My Lords, this amendment would delete subsection (4) of proposed new Section 80G, which provides for the Treasury to make changes to tax retrospectively. The whole basis of the Bill is that the Scottish Parliament will raise a proportion of its own money and should plan its budgets accordingly. If the Treasury were to use this power to change the tax base retrospectively, it could have a very dramatic impact on the provision of services and the financial position of the Scottish Parliament. Therefore, the amendment seeks to tease out from the Minister exactly how it is intended to use this power since there are obvious dangers in having a retrospective ability to change the rules of the game well into the financial year. It could cause great trouble for an Administration in Edinburgh and might even be used in a highly undesirable political way. I beg to move.
Lord Sassoon
My Lords, as my noble friend said, Amendment 54H would remove the retrospective element of the power to make supplementary changes. It gives me the opportunity to reassure the House—which I hope is what my noble friend seeks—that the Treasury does not seek a general power to impose retrospective legislation. This is a very limited power to make any changes retrospective to the start of the tax year. Because of the timing of the budget cycle, most finance Bills receive Royal Assent after the start of the tax year and so contain proposals that come into effect before Royal Assent. It is therefore important that, where necessary, any consequential change made using the order-making power can also take effect from the start of the tax year. The power is identical to that in Section 79(4) of the Scotland Act 1998 for the Scottish variable rate. I hope that my noble friend is reassured that this is just a necessary provision to take account of when Royal Assent is given to finance Bills and that, yet again, he will be prepared to withdraw his amendment.
Lord Forsyth of Drumlean
My Lords, on the basis of that very helpful response, I am pleased to withdraw my amendment.
Lord Forsyth of Drumlean
“(4A) Before exercising any power under this section, the Treasury must—
(a) consult widely on its plans, and(b) obtain the consent of the Scottish Parliament.”
Lord Forsyth of Drumlean
Amendment 54J requires the Treasury to consult and obtain the consent of the Scottish Parliament before using its powers to change tax rules by order. This relates to the point that I made previously: the Treasury could knock out the financial planning of an Administration in the Scottish Parliament. If it proposes to do this, it should have to obtain the consent of the Scottish Parliament. I beg to move.
Lord Davidson of Glen Clova
My Lords, we offer our support to the noble Lord, Lord Forsyth, for the intention that lies underneath this amendment. There is clear utility in there being coherence within the UK tax structure. I stress “coherence” rather than “unity”, given the intention to devolve these powers to Scotland, and say nothing further.
Lord Sassoon
As my noble friend said, this point is very similar to the issue that came up on Amendment 54G. I suggest again that the coalition Government’s new approach to the transparency of policy-making, and our commitment to consulting in advance on tax changes and legislation, means that not only the Scottish Government but any other interested party will have an opportunity, under the normal framework that we now apply, to see what is going on. It will be transparent to the Scottish Parliament as well.
I think that this is consistent with what the noble and learned Lord, Lord Davidson of Glen Clova, said. If I interpret coherence as opposed to unity in the correct way, I believe that the process is achievable through the approach that we now adopt to consultation. However, as I said in relation to the previous amendment, we can achieve that while not fettering the hand of the Government in how they go about consulting on and consenting to taxation changes that may impact on the wider UK tax landscape any more than it is fettered in respect of other aspects of UK taxation.
Lord Forsyth of Drumlean
I am afraid that I am not as convinced by the response to this amendment as I was by the response to the previous amendment, as this one is rather more far-reaching in its possible impact. Given what my noble friend said, and the Government’s view of the Scottish Parliament, I have no doubt that they might well be inclined to do this anyway. However, Governments come and go; it is important that the rules of the game should be clear.
One aspect of the Bill that is very striking is the number of powers that are given to the Treasury to bring forward regulations and changes that are not specified, are not clear and which in the other place were subject to comments from Ministers to the effect that there was a working group looking at this and something would be published in due course. I am not absolutely persuaded on the matter. I have every faith in my noble friend ensuring that there is consultation, but he did not quite deal with the question of why the consent of the Scottish Parliament should not be sought before using the powers. I hope that he will respond to that.
Lord Sassoon
I am not sure how much more I can do to help my noble friend on this point other than to repeat that we need to see that any changes that are made as a consequence of the introduction of the Scottish rate will fit within the wider UK income tax system. Therefore, in my view and that of the Government, this blanket provision goes a step too far. We are in favour of consultation but this provision would fetter the hand of the UK Government on matters that would impact on the wider tax architecture. Therefore, I believe that obtaining the consent of the Scottish Parliament is a step too far, although I completely accept the need to consult broadly.
Lord Forsyth of Drumlean
Perhaps I can help my noble friend. Perhaps I misunderstand the position but he speaks from the point of view of adjusting the rest of the tax system in the event of the impact of a Scottish tax. But what would happen if this was done the other way round? What would happen if the Treasury proposed to change the tax system in a way that would adversely affect the revenue base of the Scottish Parliament? As I understand it, as the Bill stands, there would be no requirement either to compensate it or to seek leave to do so. Perhaps I misunderstand what these powers enable the Treasury to do but that is my understanding. If so, surely it would be appropriate to seek the consent of the Scottish Parliament. Perhaps my noble friend is suggesting that that consultation would involve asking the Parliament and allowing the ability to ignore it. I can see a difficulty here. For example, suppose some new rule were to be introduced to provide substantial tax relief for particular categories—charities, pensions or some other relief. That could greatly reduce the tax base for the Scottish Parliament and, as far as I can see, there is no provision in the Bill to compensate it for that. There ought to be some basis on which the Parliament’s consent is sought.
I feel as if I have become a sort of advocate for devo-max on this, because I am making a case that might be made by one of the enthusiasts for devolution. However, I am doing that from the point of view that, if we are going to go down this track, we have to make it workable, and I am not sure that it is.
Lord Sassoon
Perhaps the difficulty here is that there is a broader principle underlying the matter raised by my noble friend that is completely fair but is not directly addressed by this technical provision. Ministers and Scottish government Ministers have agreed that there should be an underlying principle of no detriment. Now that I understand the matter, I can confirm to my noble friend that if there is a UK decision on income tax that impacts on receipts for the Scottish Government, they will be compensated. If that has teased out the important underlying point, I am happy to give that confirmation. My noble friend’s amendment, which would have a wider and different effect, is not the way to tackle this issue. However, I can reassure him that there is an agreement between Ministers and the Scottish Government that the no-detriment principle will apply, as it should do, along the lines he suggested.
Lord Forsyth of Drumlean
I am alarmed by that because my noble friend tells me that there is a no-detriment agreement, but there is nothing in the Bill that tells us that. Does it mean, for example, that if the Chancellor of the Exchequer were able to achieve his youthful ambitions and introduce a flat tax in the United Kingdom at, say, 25 per cent, the Scottish Parliament would be compensated for the loss of revenue that would arise? I do not understand what this no-detriment agreement means. Does it mean that if any change in the tax system resulted in a reduction of revenue in England, the Scottish Parliament would be compensated by sending it a cheque for the equivalent amount?
Lord Sassoon
My Lords, this is not something that has come out of the blue from my mention of it now. It has been quite clear from the start—in the Command Paper—that that principle should apply. I am merely articulating something that has been in the construct all along.
Lord Forsyth of Drumlean
It is reassuring to hear that, but can the Minister answer my point? Does it mean what I have just said?
Lord Sassoon
Perhaps it would help if I write to the noble Lord to make clear exactly how the principle is intended to operate before we get to the next stage of consideration of the Bill.
Lord Forsyth of Drumlean
I do not want to press my noble friend; I am happy for him to elucidate what the position is; but throughout this afternoon, his speeches have been peppered with the word “accountability” and how this is making the Scottish Parliament accountable. If the suggestion is that the Scottish Parliament get compensated for the effects of changes in the tax base in England by the English taxpayer, that is not accountability; that is subsidy. It is about maintaining the status quo.
My noble friend shakes his head. Perhaps I have got it wrong. I thought he was saying that if changes are made to the tax system in England which have the result of narrowing the tax base, the Scottish Parliament will be compensated by being sent a cheque. Is that not what he is saying?
Lord Sassoon
What I am saying, and why I disagree with my noble friend’s analysis, is that this is all about getting decisions about a certain part of the tax system to be made by the Scottish Government and the Scottish Parliament, and for the Scottish Government to be accountable to the Scottish Parliament and the Scottish people for a part of the tax system to have a clearer linkage between tax and spending in Scotland for the electorate and for the performance of the Scottish economy. Beyond that, there are certain areas where we want to ensure, as is only right and proper, that Scotland is not at risk of detriment because of decisions taken in interlinked parts of the tax system which disadvantage it.
Lord Forsyth of Drumlean
I hesitate to press this at this hour but, to give a real example, suppose that it is 2015. We are all enjoying paying these high Scottish taxes. There is a lower tax in England and the Government decide that they are going to introduce a far more generous scheme of tax relief on contributions to charity. Let us say that they make them wholly allowable and the result is that there is a reduction in the overall revenue available to the Scottish Parliament from the tax base on the Scottish income tax, because people are eligible for that. Of course, we are not yet clear whether that would apply to Scotland, but this power would enable the Treasury to implement a policy without any agreement of the Scottish Parliament and it would have a detrimental effect.
My noble friend appears to be saying that the answer to that is that they would be compensated for that, but there would be a transfer of resource from England to Scotland to compensate them for that change in the tax policy. Why would that be appropriate?
Lord Sassoon
My Lords, it has been a fundamental principle of devolution from the start that if a decision of one Administration impacts on another, the other Administration should be compensated. We are not doing anything different from the principle under which devolution has existed from the start. Yes, the tax base is shared, so if the UK changes allowances and thresholds, it is quite right that the effect of that should not fall to the detriment of the Scottish Government. As I said, that follows the general principle that applies across devolution spending, as it has from the start.
Lord Foulkes of Cumnock
I am not sure exactly where we are, but as my noble friend Lord Maxton drew my attention to the fact that there is this very interesting dialogue taking place, I was listening carefully to it. I am grateful to the noble Lord, Lord Steel, for his immediate understanding.
I am slightly disturbed because all along we have been talking about giving the Scottish Parliament greater accountability. That is why I am in favour of full fiscal autonomy, as I shall be arguing later. However, even if Scotland has full fiscal autonomy, if at any point it then goes, Oliver Twist-like, back to the Treasury and says, “I want some more”, then that will not be full fiscal autonomy.
With these proposals in the Bill we are halfway towards full fiscal autonomy. I do not know whether the Treasury Minister, the noble Lord, Lord Sassoon, has seen that Alex Salmond has now come up with a list of what he calls shovel-ready projects—an awful-sounding term—that he wants the Treasury to provide huge amounts of money for. This is his technique. I am not sure whether I have got to the nub of the point that the noble Lord, Lord Forsyth, is making but at least it has given him an opportunity to sit down and think for a while. I was enjoying the Forsyth saga—that was inevitable—but I question whether it has revealed a flaw, in that we are not going to get the kind of autonomy that we want.
Lord Sassoon
No, my Lords, I do not believe that it has exposed a flaw. The decisions which under the Bill, if and when enacted, would be for the Scottish Government are quite clear and the Scottish Government will bear the fiscal consequences of those decisions. What I have described is made quite clear at greater length in the November 2010 Command Paper, Strengthening Scotland’s Future. If parts of the UK tax system are not devolved but remain the responsibility of the UK Administration, then, if something changes to the detriment of Scotland, the no-detriment principle will kick in, the block grant will be adjusted and, as set out in the Command Paper, the Office for Budget Responsibility will work out all the numbers and establish the fiscal impact. Of course, the adjustment would not necessarily go one way—it would depend on the nature of the change. We have talked this afternoon as though everything is always going to go in one direction. However, this could conceivably be a two-way detriment that had to be adjusted through the block grant.
The Earl of Caithness
My Lords, can my noble friend give us an example of the two-way process? If he cannot do so now, perhaps he can include it in the letter that he is going to send us.
Lord Sassoon
My Lords, one example is personal allowances, which have a potential impact on tax receipts, and that example is highlighted in the command document.
Lord Foulkes of Cumnock
I want to test this with one other example. Does the Minister recall when, under a previous Labour Government, the Scottish Executive introduced free personal care for the elderly? As a result of that, the old people who had free personal care no longer got the benefits that they had previously received. Malcolm Chisholm, the then Minister, sought a grant of hundreds of millions of pounds, which he claimed the UK Government had saved because they were no longer paying benefits to the people who were now getting free personal care. Would not that kind of situation arise in a number of areas under the scenario that the Minister is describing?
Lord Sassoon
My Lords, that was not a tax issue, and I do not know the detail of that case, but we are talking about changes to the structure of the UK income tax system, which is something that is done by the UK Government. We are talking about circumstances that are rather far away from a Scottish spending matter that the noble Lord described.
Lord Kerr of Kinlochard
I am lost. I fear that I do not understand this no-detriment principle. I may be showing my ignorance coming late to this subject. I thought that I understood the rationale for the Scottish rate: the UK system would remain the same but there would be this variable—take 10 per cent off and top it up. I assume that the allowances, thresholds and system would be the same over the UK. If, for example, a Government believed that more growth could be obtained by going for a lower rate of tax, or higher allowances, and thus lower revenue, that would be the case across the United Kingdom, including in Scotland. The only thing that would move would be the variable rate if the Scots chose to move it. What is this detriment? Are we saying that the Scots could enjoy the advantages of the greater growth in the United Kingdom but that the detriment to their revenue would be compensated through a block grant system? That would be winning twice. That cannot be what is intended. Will the Minister explain how the no-detriment principle works?
Lord Sassoon
The noble Lord has explained the construct absolutely correctly, so I have no problem with that at all. However, if the UK Government decide to raise personal allowances to take more people out of tax, that will flow through to a reduction in the receipts to the Scottish Government under the construct that he has described. The UK will compensate the Scottish budget through the block grant for such a reduction of the tax base for Scotland, based on forecasts by the independent Office for Budget Responsibility.
Lord Kerr of Kinlochard
That is marvellous news. I do not have a house in Scotland now but I need to get up there fast and get a close connection. If, on the Minister’s example, the allowances improve, that will suit me personally, but the Scottish Government and the First Minister will have more cash through compensation to make sure that the services I draw on in Scotland are in no way diminished.
Lord Sassoon
I would not want to get the hopes of the noble Lord or anyone else up too high. It will just bring Scotland back to where it was before we started this. It is not that Scotland will gain; it will just make sure that Scotland is brought back to where it was going to be before the change.
Lord Kerr of Kinlochard
May I ask the noble Lord about the economic benefits of the change and the reduction in the tax take, and to confirm that it would not suffer a reduction in its tax take?
Lord Sassoon
That is correct, and so it should be. If the UK Government decided to rebalance the taxes in some fundamental way, of course it would be wrong to take away the expected income tax take for Scotland that itself is reflected in all the calculations of the block grant. Again, I can attempt to see whether I can put down a worked example to show how the money flows will go, but this is not intended to give Scotland some great bonanza. It is a two-way balancing mechanism to make sure that neither Scotland nor the rest of the UK is disadvantaged by the way in which the effect of personal allowance changes will flow through the system.
Lord Stewartby
For information, is the no-detriment principle embodied anywhere in statute within the devolution area?
Lord Sassoon
I will correct this if I am wrong, but I believe that it is set out not in statute but, along with a lot of other critical issues relating to the financial arrangements, in the financial accords with lots of other things that support the way in which money flows through to Scotland.
Lord Forsyth of Drumlean
My Lords, this has been a very illuminating debate. I have to say to my noble friend that this principle is bonkers. It says that if a Government take people out of tax by raising the threshold because they think that will help with welfare policy and encourage people to go to work because of the effects of the why-work taper, they follow the example that was given by the noble Lord, Lord Kerr, or they cut the top rate of tax—would that they would in order to generate growth and get the economy moving again—Scotland gets a cheque and gets the benefit. So a Treasury Minister trying to find the money to raise thresholds does not just have to find the money to compensate for the loss of receipts but has to send a cheque to Scotland to compensate it. It makes “We’re all in this together” rather strange because we are not all in this together. There is a different rule.
It shows the paradox of this whole Scotland Bill. If anything, it almost makes me become a devo-max person. It almost makes me think that we should go for fiscal autonomy, because it is absolutely bonkers. It is saying that this is not about giving the Scottish Parliament tax-raising powers and accountability for what it does but about taking the block grant and pretending that it is a tax-raising power and, when the tax-raising power does not quite work because of changes in the tax system, topping it up. This is just about recreating the block grant, calling it a tax-raising power and dressing it up as accountability. That is what this principle means. I have studied this quite carefully, and I think that if this principle is to be applied, it is quite shocking that it is not in the Bill, because it is fundamental. It changes the whole architecture. Not many people follow this subject, but I do not believe that among them there is an understanding that changes in the position in England will be compensated for by expenditure north of the border, if, indeed, that is the position.
I would like to give an example from ancient times when I was in the Scottish Office. In England, water was privatised; in Scotland, it was not. The result was that there was no expenditure on water services because they were provided by private companies in England. The result was that the Barnett consequences did not come to Scotland. Under the ancien regime, we did not get an extra grant from the Treasury to compensate us for not doing what would have been the sensible thing, which was to privatise water services in Scotland. This is wholly new, although perhaps I am wrong.
Lord Browne of Ladyton
I enter this fantastic debate, as it develops, with some trepidation. It has perhaps been less illuminating than it could have been because, with respect to the noble Lord, people are using terms very carelessly. This is not a comparison between taxation in England and in Scotland; it is a comparison between decisions that are made for the UK and the consequences of this provision being devolved to Scotland.
I am not going to go any further because if I try to extemporise I am in danger of confusing this debate even more. It may be better if noble Lords wait to see whether the Government write to show how this will work, as they intend to. It is far from the case that those who understand how this works are surprised by this no-detriment policy. This no-detriment policy is actually at the heart of what we are doing because it is about accountability for an element of the tax-raising power, and that has to be sustained. Therefore, decisions made by the UK Government for all of the UK that undermine that accountability have to be compensated for in a balancing mechanism.
I go no further than that. I keep it very general. However, many of these examples that have been used to try to explain what is going on here are very far off the mark because they are comparing apples and pears. This is about what the UK Government do and the effect of that on the principle that we are trying to establish in this Bill.
Lord Forsyth of Drumlean
I am most grateful for that very helpful intervention. I am glad that the noble Lord has a clear understanding of how this principle will be applied. However, I do not buy the argument that it is about the UK. Of course it is about the UK, but we still elect Members to the House of Commons from Scotland who are responsible for tax policy in the United Kingdom as a whole. If they support a Government who decide to cut taxes to create growth, they are accountable at the ballot box.
Let us take one of the recommendations of my tax reform commission—it has been abducted by the Liberal Democrat party—to raise the threshold for basic rate taxpayers. That is an example of something that would be compensated for. That is an example of a policy that is being applied across the United Kingdom. The threshold is being raised and it is very expensive. There is a substantial cost to it, and in order to achieve it other services are going to be less generously dealt with than they would otherwise be. Members of Parliament standing at a general election for the House of Commons are accountable for that. However, it is very odd indeed if it is argued that the Member for Stirling in the House of Commons is accountable for the policy that cuts the taxes, whereas the MSP for Stirling is not accountable because a cheque is sent north of the border to compensate for the consequences of this.
Lord Sassoon
Perhaps I might try again here. I do not think that my noble friend portrays it as it is going to be, and I am very grateful for the intervention of the noble Lord, Lord Browne of Ladyton. I am sorry that my noble friend portrays this as a great surprise. This was all discussed at length in the November 2010 Command Paper.
Lord Sassoon
It does not make it right, but what we are discussing this afternoon is nothing new. This has been on the table for 15 months or however long it is, a good long length of time. The essential point that we have to understand is that there is going to be a permanent adjustment, as my noble friend knows, to the block grant for the move of the Scottish income tax to Scotland. The compensation that we are talking about is merely that if the basis on which the carve-out of income tax changes so that the relationship between the adjusted block grant and the income tax that Scotland expects to raise changes because of a subsequent decision, in effect we are saying that the permanent deduction needs to be adjusted because we have changed the income base from what it was expected to be, which seems entirely reasonable.
This is not the blank cheque that my noble friend is portraying it as: that the UK Government will be prepared to write whenever the income tax changes. The deal with Scotland is that there will be a one-off change to be worked on, as my noble friend knows. If the basis of that is subsequently changed because the UK Government change the base on which income tax is raised, it is perfectly right and proper that a compensating adjustment is made. It is as simple as that. It is not that there is a double whammy for the UK.
Lord Forsyth of Drumlean
It may seem simple to my noble friend and it may have been discussed for 15 months, but I have to tell him that I am not a supporter of this Bill. I thought I made clear at Second Reading why I am not. I am somewhat surprised at the argument that my noble friend has put. The noble Lord, Lord Kerr of Kinlochard, put it quite clearly. I do not disagree about the impact of the policy but what is being said is that, if there is a change in the tax regime that results in the tax base being made narrower and from which people in Scotland will benefit, in addition people will benefit in Scotland by the cost of that change being added to the block grant. To me, that is double benefit and I do not see how that has anything to do with the accountability of the Scottish Parliament.
It arises because the Scottish Parliament is not solely responsible for tax policy, which would be an argument for fiscal autonomy that no doubt the noble Lord, Lord Foulkes, will put to us. However, the scheme in this Bill is a kind of charade whereby the Scottish block is always topped up regardless of the benefits that accrue to Scotland from the changes in the tax base, which cannot be right. I defy my noble friend to explain why, say, the Scots would get the benefit. Let us say that thresholds were raised to £10,000 so that no one earning less than that would pay income tax. That would have a dramatic effect on the Scottish block. I guess that it would be many hundreds of millions of pounds—perhaps £600 million or something of that order. My noble friend is saying that the Scottish Government would be compensated by being given that money, but the people living in Scotland would have benefited from the fact that they are not paying tax on the first £10,000. That cannot be right.
When my noble friend says, “Well, we have all known this for 15 months”, I had not appreciated that the situation was as stark as this. I thought that it might be a one-off thing at the start, but the idea that this should be a continuing matter is not about accountability; it is about giving people a guaranteed budget.
Lord Maxton
As the noble Lord understands it, would the reverse be true? If, say, Mr Alex Salmond decides that he has a project that he knows the Scottish people will support and he puts up the income tax to pay for it—for example, a free new hospital or something like that, on which he knows that the Scottish people will support him—will the block grant be cut accordingly to compensate for the fact that more money is now being raised in Scotland?
Lord Forsyth of Drumlean
I think the answer to that is no. As has been made clear, we are talking here about the Scottish block being compensated for changes in United Kingdom taxation policy. My difficulty with this concept is that the people in Scotland are within the United Kingdom. They benefit from those changes and then a compensating payment is made to the block grant to compensate for that, which cannot be right.
Lord Kerr of Kinlochard
My Lords, I thank the noble Lord for trying to cast light into my ignorance, but it is getting worse; the fog is getting thicker. Does the no-detriment principle have a reciprocal? If not, why not? Should there not be a reciprocal? Let us suppose there was a tax change that widened the tax base. Would that be no detriment just to the Scots, or no detriment to the UK? Before the Minister responds, perhaps I may make a second point. I see two little gleams of light from the lighthouse in the fog. One was the suggestion made by the noble Lord, Lord Browne, that it might be good if one could set out on paper how this is to work. I should have got there long ago, but I had not realised it. That is central to the issue of accountability, but I had not quite got it. I turn now to the noble Lord, Lord Stewartby, for the second light. Since it is so central to the issue of accountability, should it not be on the face of the Bill?
Lord Sassoon
First, I shall repeat what I believe I said earlier. This adjustment would go two ways. We have talked about so many things as being a form of one-way traffic this afternoon, but that is not the case. However, we want to make sure that the Scottish Government are accountable for what they are responsible for under the construct in this Bill, which is the effects of their powers to set a Scottish rate of income tax. They are not accountable either for a windfall gain or a windfall loss—if you can have a windfall loss—resulting from things that are done by the UK Government subsequent to the setting of the block grant adjustment. If we set out a worked example of how this will operate, I would like to think that it will be made clearer.
Lord Forsyth of Drumlean
My Lords, that is probably a very sensible suggestion. We have had a useful debate, if for no other reason than that it has persuaded me that there is a stronger argument for fiscal autonomy than I had thought, although it is not one that I accept. I beg leave to withdraw the amendment.
Lord Foulkes of Cumnock
I indicated in my remarks earlier that I had intended to oppose these clauses standing part of the Bill, but because we have had such a full debate on all of their aspects, I do not think that it is necessary.
Lord Forsyth of Drumlean
“(3) The tax may only be charged by the Scottish Government.
(4) The tax shall be set at a uniform rate across Scotland.”
Lord Forsyth of Drumlean
My Lords, by way of explanation, I felt that we had done to death compensation for the Scottish Parliament, which is why I did not move the amendment which would require the bill for costs of collecting Scottish income tax to be sent to the Scottish Parliament. We can return to that later in the context of a debate to which we have yet to come.
Amendment 58A is similar in its impact to Amendment 58C. It would simply ensure that if the Scottish Parliament decides to set different rates of tax as part of the development land tax powers that are set out in the Bill under Clause 33, they should be applied uniformly throughout Scotland. They cannot be used to create different tax levels in different local authority areas. I do not know whether the Government were thinking that that might be the case, and that is why it is not made clear in the Bill that the rate should be applied uniformly, or whether the Government think that it is desirable. The purpose of the amendment is to tease out the Government’s view on this. I beg to move.
Lord Sassoon
My Lords, I will speak to both Amendments 58A and 58C, which have similar effects—namely that they would require the Scottish Parliament to set uniform rates across Scotland for taxes on land transactions and on disposals to landfill. My noble friend’s amendments would be an inappropriate restriction on the power of the Scottish Parliament in this area. The purpose of devolving tax powers is to transfer some of the responsibility for public funding services in Scotland to the Scottish Government. My noble friend says that he has been converted to devo-max, whatever that may be, and that he wants more of it. Here is a good example of where we are suggesting in the Bill more devolution than the noble Lord would like through his amendment.
Accepting as I do that we should wholeheartedly support improvements in the accountability of the Scottish Parliament to the people of Scotland, the devolution of stamp duty, land tax and landfill tax is very important. The Calman report estimated that these could yield the Scottish Government over £600 million a year, so it goes to the heart of the accountability issue. Also, a key premise of the Calman report is for the Scottish Parliament to be fully accountable for its devolved taxes, a principle which the Government support. To achieve this, the Scottish Parliament must be allowed the full power to vary the rate of the devolved taxes. It is for the Scottish Government and its Parliament to take decisions over the design of the taxes through consulting the Scottish people and passing its own legislation. Scottish Ministers may well decide to set uniform rates of tax on land transactions, or on disposals to landfill, across Scotland, but I suggest that that decision is for them and not for this House or this Parliament. I cannot see a strong argument—any argument—as to why we should interfere with the Scottish Parliament’s freedom to set its own taxes across Scotland as it sees fit, once there has been an agreement that a particular tax should be devolved. For that reason, I urge my noble friend to withdraw his amendment.
Lord Forsyth of Drumlean
When my noble friend says that the Scottish Parliament should not have to apply it uniformly throughout Scotland and thatit could be used in different areas, does he mean the Scottish Parliament, or does he mean local authorities?
Lord Sassoon
To be clear, my noble friend talked about different areas. I do not know how a rate may be changed, but it would not necessarily be changed on a geographical basis. There could be changes of rate based on other parameters which would not necessarily be geographic. The policy and the ability to deal with these taxes are entirely devolved to the Scottish Parliament and the Scottish Government. It is for them, on a national basis, to decide how they design the taxes from thereon.
Lord Forsyth of Drumlean
My Lords, I can see how the Calman commission had to scrape around to find taxes that the Scottish Parliament could be allowed to levy. As my noble friend has touched on the amendment which deals with landfill, I shall, if I may, speak to that issue at the same time to save the time of the House.
I do not really have a problem if the Scottish Parliament wants to set the tax on landfill or on development land. I do have a slight problem with my noble friend’s suggestion that it could be different in different parts of Scotland, which he is enunciating as a principle, without it being clear who would set it in different parts of Scotland and who would get the money. If it is proposed that it should be possible for the tax-raising power to be devolved still further to local government so that we could have differences in different areas, the Bill should spell that out and make clear who is responsible for collecting it and who gets the money.
I can see how the development land tax could be used to make it more difficult to develop particular areas; I can see how it could be used positively—perhaps by not having the tax at all—to encourage development in particular areas. However, on the landfill tax—and I am all for competition in taxes—the idea that you should combine raising the revenue with creating some kind of competition between local authorities is a little worrying, because, on the whole, people do not like having landfill sites next to them and local authorities like having sources of revenue. I would have thought that if one was planning where the landfill sites were going, and wanted to have a sensible allocation and availability of landfill sites, how and where the taxes were levied would be rather important. I would feel much more comfortable if this power was being exercised by the Scottish Parliament on a uniform basis. If that is not so, the Bill should indicate how it would operate and who would do it. Just by devolving the power and leaving it to the Scottish Parliament, we may be creating difficulties caused by the desirability of the revenue over the proper planning of landfill and development activity throughout Scotland. Perish the thought that political and other considerations might fall into this, but I am very nervous about the laissez-faire attitude that my noble friend is taking towards this tax.
Lord Sassoon
Laissez-faire can be a good thing or a bad thing. I suggest to my noble friend and to the Committee that we must treat Scotland more respectfully than this. As Calman recommended, these are two taxes that should be devolved. If it is right to devolve them, as the Government believe, in line with the Calman recommendations, my noble friend should not suggest that it is inappropriate for the Scottish Government and the Scottish Parliament to determine—whether on a regional or any other basis—how they levy them. I am sure that all the considerations about the design of the taxes which my noble friend mentions, which are perfectly proper and important, will be taken into account by the Scottish Government and the Scottish Parliament. In our proposing the devolution of these taxes, that is precisely what is intended.
Lord Forsyth of Drumlean
Perhaps I may ask my noble friend just one more question. Does he think that it might be a good idea to devolve both these taxes to local authorities in England?
Lord Sassoon
I am sure that my noble friend is not proposing that the Scottish Parliament should somehow devolve the taxes on to England. I merely say that it is a decision for the Scottish Parliament and the Scottish Government, just as the UK Government decide how the taxes should be handled in the UK. The Scottish Government and Parliament may decide that the design of these two taxes should be much as it is now—I do not know. It will be for them. If they have a good reason for doing it differently in the circumstances of Scotland, that is what devolution is all about. It is their responsibility; their accountability.
Lord Forsyth of Drumlean
That is all very well and fine in theory, but I suspect that the answer to my question is that if the Minister goes back and says to his colleagues, “I have got this bright idea of devolving development land tax and landfill tax to local authorities in Scotland”, he will get about 10 boxes full of reasons why this would not be desirable—not least because it would introduce different rates of tax all over the country for people who are involved in housing and other commercial developments. It is hardly in line with the Government’s declared policy of simplification of taxation and less onerous regulation.
If I were to table a Question and ask what the Government’s policy is on this and why, I am sure that they would come up with a whole load of reasons. My noble friend has said, “Oh well, it is for the Scottish Parliament to decide”. No, it is not. At the moment this a uniform tax throughout the United Kingdom, as I understand it, and the Government have decided to devolve it to Scotland. In devolving it to Scotland, whether or not it will be circumscribed by a requirement to apply it uniformly is an important point. In considering what the impact might be on Scotland, my noble friend seems far more relaxed than in considering what the impact might be on England. If he says that that is central to the whole devolution idea and that we must trust the Scottish Parliament to use this power in this way, I just say to him that if, as I suspect will happen, the Scottish Parliament does devolve it but does not let the local authorities keep the money, he will find quite a number of English local authorities knocking on his door citing the precedent—and especially so if they decide to allow the local authorities to keep the money.
Rather than just saying, “Oh well, it is Scotland and devolution and so it must be a good thing to let them decide”, my noble friend might like to think about whether it would sensible to circumscribe this in some way. However, having discussed the matter, I am happy to withdraw my amendment.
Lord Forsyth of Drumlean
“Air passenger duty
(1) In Part 4A of the 1998 Act (as inserted by section 28), after Chapter 4 (inserted by section 35) insert—
“CHAPTER 5Air passenger duty80L Air passenger duty
(1) A duty of excise which is levied on the carriage, from a Scottish airport, of chargeable passengers on chargeable aircraft, is a devolved tax.
(2) In this section—
“chargeable passenger” refers, subject to sections 31 and 32 of the Finance Act 1994, to every passenger on an aircraft if their flight begins at an airport in Scotland;
“chargeable aircraft” refers, subject to section 29 of the Finance Act 1994, to every aircraft designed or adapted to carry persons in addition to the flight crew.”
Lord Forsyth of Drumlean
My Lords, the effect of the amendment is to increase the tax-raising powers of the Scottish Parliament to include air passenger duty as part of its revenue. It is a probing amendment. I do not want to go back over earlier debates which provided for an order-making power for Ministers to designate new taxes as devolved taxes, which is a thoroughly undesirable innovation. It is dangerous because it is so open-ended in its commitment—notwithstanding the procedure, which is also undesirable.
In responding to the question of why there should be a general power for Ministers to allow the Scottish Parliament to introduce completely new taxes, my noble friend said that Calman said that there should be a general power to provide for specified taxes. Of course, in the Bill, that has been turned into any tax anybody can think of. I would like to see the Bill amended to bring it back to specified taxes. My noble friend will have spent longer reading all the consultation documents and the other material that has been produced than I have, but it seems that the aggregates levy and air passenger duty are two taxes that were specified by Calman but are not implemented. I thought it might help the Minister to include air passenger duty and the aggregates levy. There would then be no need to have the power to deal with the specified taxes, because they would already be in the Bill and we would have an opportunity to consider their merits.
I look forward to hearing the reasons why the Minister thinks that air passenger duty should not be devolved to the Scottish Parliament and provided for in the Bill. This is an example of where the Scottish Parliament might cut rather than increase taxes. It is a tax in a country that is highly dependent on tourism and on people who commute from Scotland to London—I suppose I ought to declare an interest here. It may very well make sense to get rid of air passenger duty, or not to tax aeroplanes rather than passengers, which has resulted in us all paying huge fares and being crammed into planes that are packed to the gunnels. The number of flights to Scotland is being cut, the fares are now astronomical—more than £500—and the air passenger duty is going up. I have been going to the car park at Edinburgh airport and observing it for the past 29 to 30 years. They have expanded it but I now see lots of spaces where there were none before. Air passenger duty has an economic impact not only on the business community but also on tourism and so on.
This is exactly the kind of tax that the Scottish Parliament might cut or reduce for economic benefit, although these are obviously arguments for the Scottish Parliament. I hope my noble friend will forgive me if I embarrass him, but I observed him answering a Question on the impact of air passenger duty on international flights, when he had to justify the way that tax bands operate in terms of countries and distance. It was one of those occasions when the Minister has a brief that will not stand up to scrutiny because clearly a mistake has been made somewhere along the line.
The Government seem to be very concerned about this, but if the Scottish Parliament was given these powers, it would also help—I note the noble Lord, Lord Foulkes, is not in his place—to change the position that we have at the moment where there is excessive dependence on a section of a narrow part of the tax base: the 10p on income tax. At every stage of this Bill, both the noble and learned Lord, Lord Wallace, and my noble friend have repeatedly told us that they are implementing the Calman recommendations—and that doing so was a manifesto commitment. This was a Calman recommendation and was consulted on. For all these reasons, I am longing to hear from the Minister on why it is not in the Bill.
I can see arguments against it. Indeed, someone sent me an e-mail from Newcastle asking me what I thought the effect would be on Newcastle airport. That is an important point. If the Scottish Parliament gets control of air passenger duty, I think that it will cut it and perhaps Newcastle airport will be able to persuade the Government that, worthy as the green agenda may be, this kind of tax is hugely damaging to our economy and to tourist interests. But that is a debate from another day. I beg to move.
Lord Kerr of Kinlochard
My position is diametrically opposed to that of the noble Lord, Lord Forsyth, on the general power. I agree with him that it would be good not to have the accountability element so heavily dependent simply on the extra tranche of income tax. However, it is up to the Scots to decide how or if they wish to move further, and on which taxes. The general power seems wholly reasonable, and for us to pick and choose air passengers or whatever seems a rather bad idea.
Mine is not a complete laissez-faire position. As I said in my debate with the noble Lord, Lord Sewel, on a previous day in Committee, a counterpart to a general power is a mechanism for neutralising the macroeconomic effect. You would be very rash to start to recreate the situation that we have seen in the eurozone with Greece and Germany. That is why I am very nervous about having devo-max or devo-plus, unless and until the monetary or borrowing consequences of greater fiscal autonomy are spelt out. When we come to the borrowing bit of the Bill, I will have something to say.
I do not know what the right rate is for air passenger duty, and I consider it irrelevant to the debate on the Bill. I doubt very much that Mr Salmond, with his green credentials, would follow the noble Lord, Lord Forsyth, in thinking that a lower rate would be the right one. There are many taxes other than this one that he might prefer to lower. But it is up to them, following the procedure that would require consultation with us. The lead should come from them.
Lord Forsyth of Drumlean
The noble Lord says that it is up to them. They want this power and Calman recommended it, and it is not in the Bill because the Government have not included it, even though they have been telling us that the Bill will implement the Calman recommendations. The legislative consent Motion that was considered by the committee of the Scottish Parliament specifically requests that it should be a condition of Scottish consent to the Bill that the air passenger tax should be included.
Lord Kerr of Kinlochard
As always, the noble Lord, Lord Forsyth, follows precisely the recommendations of the Scottish Parliament committee.
Lord Kilclooney
When discussing what should happen with Scotland, we should always also take into account not just England but Wales and Northern Ireland. In Scotland at the moment, as I understand it, there is already a variation in air passenger duty. Quite a few of the airports in the islands are already excluded, so the idea of having a different air passenger duty in Scotland is, in principle, accepted. If the power was devolved to a Scottish Parliament, would that lead to a reduction in the block grant to the Scottish Exchequer from the central Exchequer? Is there not something of a contradiction in government policy on the issue of air passenger duty, in that the Secretary of State for Northern Ireland is already recommending that air passenger duty should be transferred to the Stormont Executive?
Lord Davidson of Glen Clova
My Lords, we on these Benches oppose the amendment at this juncture. While true it is that the Calman commission recommended that this tax be devolved—and true it is also that Labour’s White Paper said that tax should be devolved—if there is any thought that this is a sudden volte-face on the part of Labour, I am afraid that that is not the case.
Her Majesty’s Government said in the Command Paper that air passenger duty was under review. There is a question on whether a tax per plane might be discussed. We consider that it is not appropriate at this stage to devolve this tax until the issue is resolved; I think that we agree with the Government on this. However, the noble Lord, Lord Forsyth, might be relieved to hear that there is a power to create new taxes, which I think he might be aware of. In due course, under new Section 80B, were the air passenger tax to be devolved, this option would be open.
Lord Forsyth of Drumlean
The noble and learned Lord has not been listening to my speech. Frankly, I do not blame him—but I did say that one reason that I tabled this and the other amendment was to get rid of that general power, which I regard as highly undesirable. Perhaps he could help me; why is the fact that the UK Government are reviewing what they want to do about air passenger duty an argument against giving the responsibility to the Scottish Parliament? If it is decided that they are going to abolish or double air passenger duty, or whatever, the revenue may halve or double. We have already been told in a long debate that there is compensation for this, so why on earth would the Government not put it in the Bill now? The fact that they are reviewing it is surely irrelevant.
Lord Davidson of Glen Clova
It is not for me to answer for the Government. Doubtless that will be done in due course but, accepting the kind invitation for the moment, it is plainly desirable to have a coherent starting point. Simply to say, “This can now be devolved and the Scottish Government can set off on their own way, without any regard to what is happening in the rest of the UK”, might be unhelpful not only to the rest of the UK but to Scotland.
I apologise if I did not pick up on his enthusiasm for advancing this in order to reduce the power to create new taxes. I understand his concern about the extent of that power. However, it might be interesting to note that the Holyrood Scotland Bill Committee has accepted that once the future of this tax has been decided, it should be considered for devolution then. Therefore, it would appear that while the noble Lord, Lord Forsyth, is in advance of the Scottish Government in their demands for ever greater powers, at least in Holyrood there has been an indication that they are prepared to wait.
The Earl of Caithness
My Lords, I did not find the argument of the noble and learned Lord, Lord Davidson, at all convincing. Does it mean that the UK Government are now not allowed to look at any taxes which they are proposing to transfer to Scotland? If they are looking at air duty and saying, “No, you cannot give it to Scotland as the UK Government are looking at it”, and given that there is a Budget coming up, presumably, to follow the noble and learned Lord’s argument, we should not devolve anything to Scotland.
Lord Davidson of Glen Clova
My Lords, it is always a danger to generalise from the particular. In this instance, one sees that we on this side are content that the tax be devolved in due course—but where the people in Scotland, as expressed through their Bill Committee, seem to see virtue in waiting, we would agree with them.
Lord Sewel
My noble and learned friend talks about being content for the tax to be devolved in due course. That would be the route that the noble Lord, Lord Forsyth, identified, in which the only parliamentary control is an order. Will my noble and learned friend tell me where he draws the line between those taxes that should be devolved through primary legislation and those that should be devolved through secondary legislation?
Lord Davidson of Glen Clova
I am obliged to my noble friend. There is considerable difficulty in identifying where that line should be drawn. However, where there is a significant tax, the view from this side is certainly that there would be virtue in its being found in primary legislation. If one were using a power under new Section 80B, it would be primary legislation in the context of the Scottish Parliament. I hope that helps.
Lord Sassoon
My Lords, I think I should allow the noble and learned Lord, Lord Davidson of Glen Clova, to continue; he seems to have made the points in a way that I could not hope to match. I suppose I should do more than say that I agree with everything that he said and sit down.
I do not want to reopen all the discussions that we had in the previous Committee session but it is important to recognise that, as the noble and learned Lord said, there is an appropriate series of checks on both sides before any power could be devolved under Clause 28. I remind my noble friend that a similar power exists under Section 30 of the Scotland Act. I see the noble Lord, Lord Sewel, nodding. A power already exists for the Scottish Government to request new powers, including on taxation, under Section 30 of the Scotland Act. Perhaps I should not have gone into this territory, but it provides important background to this matter.
My other point is that Scottish Ministers referred to the Section 30 power when seeking legislative responsibility for a whole range of things, from firearms to consumer protection. As noble Lords will know, in each case the Government rejected the requests made by the Scottish Government. As background to this discussion about air passenger duty, it is important to remind ourselves that there are proportionate powers under Clause 28.
Lord Forsyth of Drumlean
I have the Explanatory Notes to the Scotland Act here. They state:
“Section 30 … permits certain alterations to be made to the legislative competence of the Scottish Parliament but only with the agreement of both Parliaments”.
As I am sure my noble friend will agree, tax has always been dealt with entirely differently, not least in the exclusion of this House from consideration of tax matters since the 1911 Act. Tax is dealt with by a procedure under the Finance Act and is subject to a proper Committee stage on the Floor of the House of Commons. I believe that that is still the case. To suggest moving to a situation in which taxes can be introduced and imposed by orders—which are not amendable and which, traditionally, we do not vote against in this House—is to stretch the elastic to breaking point.
Lord Sassoon
I merely refer my noble friend to the arguments that I made on this point in our previous Committee session two weeks ago. I will not repeat them because it would take up too much of the Committee’s time to refute those points. It is important, as other noble Lords, including my noble friend, have said, to remind ourselves of the context in which specific taxes are referred to in the Bill. I certainly agree that, as the noble and learned Lord, Lord Davidson of Glen Clova, said, the reason not to take the issue of air passenger duty further at this time rests partly on the existence of the powers in Clause 28.
Lord Sewel
I thank the noble Lord for giving way. I have had a reply to my question from my noble and learned friend on the Front Bench; perhaps the Minister could also reply. Where does he draw the line between those taxes that can be transferred or created through primary legislation and those that should be created or transferred through orders?
Lord Sassoon
I think that the line is drawn as the Bill stands in its present form, as we debated at considerable length on a previous Committee day.
Lord Sewel
Will the Minister outline the principled argument on which the division is based?
Lord Sassoon
No, my Lords; I do not propose to repeat the arguments and debates—interesting, important and lengthy though they were—because we should turn to the specifics of air passenger duty, which is the subject of the proposed new clause. Air passenger duty is an important issue on its own account, but it is not an easy one, for reasons to which my noble friend and others have referred. It is precisely because air passenger duty is so important that the Government have specifically sought views on the merits of devolution from a UK and a devolved perspective in their recent consultation. The responses provided arguments both for and against. Several respondents argued that devolution was necessary to reflect the distinct economic and social conditions in Scotland, and the impact that this has on flights to and from Scotland, in support of the Calman recommendations. Others opposed any devolution of air passenger duty, arguing that it would complicate the APD system and create potential distortions in the market for flights. There was no clear view either way. The Government’s response to the consultation was published on 6 December 2011.
The Duke of Montrose
I hope that the Minister will forgive my ignorance on this matter, but he put forward in support of his argument the power under Section 30 of the Scotland Act. My noble friend Lord Forsyth was looking at that, as am I. Section 30(4) states:
“An Order in Council under this section may also make such modifications of—
(a) any enactment or prerogative instrument (including any enactment comprised in or made under this Act), or
(b) any other instrument or document”.
Does that cover tax?
Lord Sassoon
My Lords, I think my noble friend will find that taxation is set out in Schedule 5 to that Act, if memory serves. Section 30 can amend Schedule 5, so tax—
Lord Wallace of Saltaire
My Lords, it would be appropriate to allow the Minister to finish answering one point before the next one is made.
Lord Sassoon
I hope that I may finish. I merely wanted to remind noble Lords, as a background to this discussion of whether it is appropriate for this tax to be in the Bill at this time, that there is a power, which we debated extensively, that would enable air passenger duty to be devolved in due course, if appropriate. I also remind noble Lords that there are similar powers in Section 30 of the Scotland Act. Of course they are not exactly the same; they work in different ways. However, we are not going into uncharted territory. This is territory in which the Government have been requested to devolve powers—not tax powers, although they could have been requested, but powers in other important areas. The Government have consistently said no because they do not believe that the arguments for that have been made.
Lord Forsyth of Drumlean
Section 30 clearly does not provide for tax powers. But if my noble friend is correct and it does, then why does he need the powers contained in the Bill to implement the taxes?
Lord Sassoon
My Lords, I think that we will have to differ on the construction of powers under the 1998 Act. However, I am quite clear on it. Now, instead of an Act with a construct providing for a general power for the Scottish Government to make requests to the UK Government, and for the UK Government to accede to those or not, and because we are now getting to a very significant devolution of tax powers, it is entirely appropriate, as I hope my noble friend will agree, that if such devolution is to go ahead as the Government wish, the full structure should be set out as it is in this Bill although not in the 1998 Act. I hope that that explains that one. Perhaps I should carry on with air passenger duty, which is the narrow but important subject of these amendments.
Lord O'Neill of Clackmannan
If the Minister is discussing air passenger duty then it is surely incumbent on him to try to put it in another context apart from the rather narrow one of revenue-raising, namely its impact on the provision of transport. Transport is a devolved responsibility, but sometimes that devolved responsibility seems a moveable feast. We talk about a high-speed train and claims are made that it should start in either Edinburgh or Glasgow, or at least finish in one, but there is no clear indication of who will fund it. But let us face the fact that regardless of whether the funding comes out of a block grant or a form of increased air passenger duty, a fast train would largely eliminate the need for Edinburgh-to-London or Glasgow-to-London air journeys. However, that would be the case only within the United Kingdom. The paradox is that were we to have the power to reduce airport duty, we might well have a situation in which transatlantic travel from Edinburgh or Glasgow is a more attractive option than travelling from Manchester and London, which are currently the main—almost oligopolistic—providers of transport across the Atlantic.
It is therefore incumbent on the Minister to get away from this narrow tax-raising, shopkeeper approach. This is a matter of greater significance to Scotland, given the devolved powers. The Government must consider this issue rather more seriously than their current, somewhat blinkered approach would suggest. Although I realise that the noble Lord, Lord Forsyth, has framed the issue in the context of taxation, it has implications which make taxation itself not a sufficient context in which to consider it. It has to be done on a broader basis. I would therefore be grateful if the Minister considered it in his response.
Lord Sassoon
Before this stream of questions and interventions I made precisely the point that, in response to the consultation, arguments were raised pro and against the devolution of APD on grounds relating to distinct economic and social conditions—indeed, those were the points that I was addressing rather than revenue-raising points. I am slightly surprised at the noble Lord’s intervention on this. I completely agree with him that APD has all these potential effects. Some of the effects that he suggested go very wide, but I agree that this is complicated and the economic and social issues are relevant.
Lord Sassoon
Forgive me if I do not give way to the noble Lord immediately. His last intervention was rather long and I had already covered the point. May I carry on with the argument?
Lord O'Neill of Clackmannan
We have spent 30 minutes on this amendment, and that is not unduly long.
Lord Sassoon
I would suggest that it is really very long for this amendment. The previous intervention from the noble Lord asked me to address points that I had precisely addressed: the non-tax-raising issues indeed include important issues related to APD. Those were the issues that, among others, came up in response to the consultation. That is why, in the response to the consultation published last December, we continued to explore the feasibility and likely effects of devolution of APD to Scotland—for the very reasons, among others, that the noble Lord sets out. That is what we will do.
I should like to think that not only the noble Lord, Lord O’Neill, but other noble Lords would recognise that it would be inappropriate for the Government to devolve APD until we have considered the impact of the proposals fully from both the Scottish and the UK perspectives. In this connection, I say to the noble Lord, Lord Kilclooney, that a particular consideration applies in Northern Ireland because of the land connection in Ireland and competition on flights of a different nature, which is why a particular stance was taken on Northern Ireland.
Lord Kilclooney
I certainly accept that point, but my question particularly related to Scotland. There are people in Scotland and Northern Ireland who increasingly want tax-raising powers devolved to Edinburgh and Stormont. They seem to think that they can then reduce taxes in Scotland and Northern Ireland without any implications. If the Scottish Government has air passenger duty devolved to Edinburgh and reduces the duty in Scotland, will it or will it not mean a reduction in the block grant to the Scottish Government?
Lord Sassoon
I thought that the noble Lord, Lord Kilclooney, asked me two questions. I answered one; I was coming on to answer the second; although I know that he asked them in the other order. It is completely clear that there will indeed be a permanent adjustment to the block grant for any devolved tax, including, if it came about, APD. That is unequivocal.
We need to consider the full impact. The Bill contains powers in Clause 28 which would enable the Government and Parliament to devolve APD should they decide to in future. Although I fully agree with my noble friend about the importance of the recommendation for APD, I agree on this point with the noble and learned Lord, Lord Davidson of Glen Clova, that now is not the time to amend the Bill. APD can be looked at on its merits under the framework of the Bill in due time. I therefore again urge my noble friend to withdraw his amendment.
Lord Forsyth of Drumlean
My Lords, the St Augustine approach to the Calman commission is upon us. We have heard repeatedly that the Bill is to implement the Calman recommendations, which included devolving air passenger duty. Now we are being told by both Front Benches that the time is not right: “Oh Lord, make us have air passenger duty, but not yet”. The reason that the time is not right is that the Government are reviewing air passenger duty. We learnt from the noble Lord, Lord Kilclooney, that the Government are prepared to devolve it to Northern Ireland and that the Secretary of State is prepared to give it to Northern Ireland. We are told that it would be difficult to include it in the Bill because there could be all kinds of implications because of changes to air passenger duty. We already have differences between Scotland and England. My noble and learned friend Lord Wallace will know the answer to this question, but I am pretty certain that highlands and islands airports are exempt from air passenger duty.
Lord Forsyth of Drumlean
Only one way. One-way tickets. Perhaps I may suggest that this is a possible area for the Office of Tax Simplification to consider. You can just see how a committee has sat down and said, “Which way is it? If you’re leaving Inverness there’s no air passenger duty, but if you’re arriving there is”. I am told that it applies in both directions for Inverness.
Lord Wallace of Tankerness
From memory, it applies both ways for Inverness but the relief is available only one way for airports in the islands and Wick. For the life of me I cannot remember in which direction. I think it is when travelling from the islands and Wick but I would have to check.
Lord Forsyth of Drumlean
So it is a policy that encourages emigration from the highlands and islands. The very fact that there is this degree of complexity torpedoes any suggestion that it would be possible to give this power to the Scottish Parliament now. Of course, if the regime changed then the revenue would change, and we have already heard at great length how this would be compensated for under the principle of “heads you win, tails you win”, which is apparently central to the Bill.
I entirely take on board the noble Lord’s chastisement. He was absolutely right. I tried to talk about the economic benefits but he is right to focus on the fact that this is not about tax. Actually, the tax revenue is not hugely significant but I believe that the impact of the tax could be, and he gave an example. I remember all the battles that we used to have in the late Lord Younger’s day about saving Prestwick, and I am aware of the stress and pressure on these islands services. I hope that I will not embarrass my noble and learned friend Lord Wallace but this is highly political to the extent that I think the Scottish Government leant on an airline—Loganair—to withdraw an invitation to him to address its 50th anniversary dinner. That is a disgraceful example of the poisonous way in which members of the SNP-led Government behave. Therefore, this is very political and very important to the islands, and I am disappointed that my noble friend is maintaining this St Augustine position, saying that he favours it but the time is not right.
The Earl of Caithness
For Wick and the islands, the duty is relieved on the way out, not the way in.
Lord Forsyth of Drumlean
So my noble and learned friend was right. That is odd, as it encourages people to leave and not to arrive. It is very strange, although I am sure there is an explanation for it.
Perhaps I may put it to my noble friend that it is entirely possible that the Bill will be amended at a later stage to remove this general power to create new taxes by order. It is a very important constitutional development which goes way beyond the importance of air passenger duty and the aggregates levy. It seems that my noble friend’s assumption that we can always just use this general power and not have the tedium of primary legislation may not survive the passage of the Bill through this House. What will he do then in order to give the Scottish Parliament the opportunity to benefit from air passenger duty? If the position of the opposition Front Bench is one of “not yet but this is something that we can do in due course”, I have to say that I think the chances of getting primary legislation to amend the Scotland Act to provide for air passenger duty in the absence of this order-making power are pretty limited. However, being a reasonable sort of chap, I have a compromise to propose to my noble friend. Many of us in this House do not like the general order-making power for introducing new taxes. This is being justified on the basis that we might want to introduce air passenger duty at a later date, or introduce an aggregates tax at a later date—I do not think that we have heard about any others.
Why not bring forward a government amendment to amend that order-making power in line with the Calman recommendations so that it is for specified taxes and not generally open? In that way, everyone will be happy, constitutional propriety will be fulfilled, and the Government will meet their commitment set out in the manifesto in respect of Calman. On that basis, I beg leave to withdraw my amendment.
Lord Forsyth of Drumlean
“Aggregates levy
(1) In Part 4A of the 1998 Act (as inserted by section 28), after Chapter 6 (inserted by section 36C) insert—
“CHAPTER 7Aggregates Levy80N Aggregates Levy
(1) A levy charged on aggregate subjected to commercial exploitation is a devolved tax.
(2) In this section “aggregate” means (subject to subsections 4 and 5 below)—
(a) any rock, gravel or sand, together with whatever substances are for the time being incorporated in the rock, gravel or sand or naturally occur mixed with it, and(b) the spoil, waste, off-cuts and other by-products resulting from the application of any exempt process to any aggregate;but does not mean anything else resulting from the application of exempt process to any aggregate.(3) In this section any quantity of aggregate is, in relation to any occasion on which it is subjected to commercial exploitation, a quantity of taxable aggregate except to the extent that—
(a) it is exempt under subsections 4 and 5;(b) it has previously been used for construction purposes (whether before or after the commencement date);(c) it is, or derives from, any aggregate that has already been subjected to a charge to aggregates levy in the United Kingdom;(d) it is aggregate that on the commencement date is on a site other than—(i) its originating site, or(ii) a site that is required to be registered under the name of a person who is the operator, or one of the operators, of that originating site.(4) Aggregate is exempt under this section if—
(a) it consists wholly of aggregate won by being removed from the ground on the site of any building or proposed building in the course of excavations lawfully carried out—(i) in connection with the modification or erection of the building; and(ii) exclusively for the purpose of laying foundations or of laying any pipe or cable;(b) it consists wholly of aggregate won—(i) by being removed from the bed of any river, canal or watercourse (whether natural or artificial) or of any channel in or approach to any port or harbour (whether natural or artificial); and(ii) in the course of the carrying out of any dredging undertaken exclusively for the purpose of creating, restoring, improving or maintaining that river, canal, watercourse, channel or approach;(c) it consists wholly of aggregate won by being removed from the ground along the line or proposed line of any highway or proposed highway and in the course of excavations carried out—(i) for the purpose of improving or maintaining the highway or of constructing the proposed highway; and(ii) not for the purpose of extracting that aggregate;(d) it consists wholly of aggregate won by being removed from the ground along the line or proposed line of any railway, tramway or monorail or proposed railway, tramway or monorail and in the course of excavations carried out—(i) for the purpose of improving or maintaining the railway, tramway or monorail or of constructing the proposed railway, tramway or monorail; and(ii) not for the purpose of extracting that aggregate;(e) it consists wholly of the spoil, waste or other by-products, not including the overburden, resulting from the extraction or other separation from any quantity of aggregate of any china clay or ball clay; or(f) it consists wholly of the spoil from any process by which—(i) coal, lignite, slate or shale, or(ii) a substance listed in subsection 5(b) below,has been separated from other rock after being extracted or won with that other rock.(5) For the purposes of this Part a quantity of any aggregate shall be taken to be a quantity of aggregate that is exempt under this section if it consists wholly or mainly of any one or more of the following, or is part of anything so consisting, namely—
(a) coal, lignite, slate or shale;(b) the spoil or waste from, or other by-products of—(i) any industrial combustion process, or(ii) the smelting or refining of metal; (c) the drill-cuttings resulting from any operations carried out in accordance with a licence granted under the Petroleum Act 1998;(d) anything resulting from works carried out in exercise of powers which are required to be exercised in accordance with, or are conferred by, provision made by or under the New Roads and Street Works Act 1991; or(e) clay, soil or vegetable or other organic matter.(6) For the purposes of subsection (3)(c) aggregate subjected to exploitation in Scotland is aggregate that has already been subjected to a charge to aggregates levy if, and only if—
(a) there has been a previous occasion on which a charge to aggregates levy on that aggregate has arisen; and(b) at least some of the aggregates levy previously charged on that aggregate is either—(i) levy in respect of which there is or was no entitlement to a tax credit; or(ii) levy in respect of which any entitlement to a tax credit is or was an entitlement to a tax credit of an amount less than the amount of the levy charged on it.(7) For the purposes of subsection (5)(b) above, any credit the entitlement to which arises in a case which—
(a) falls within section 30(1)(c) or 30A of the Finance Act 2001, and(b) is prescribed for the purposes of this subsection,shall be disregarded.(8) In this section—
“coal” has the same meaning as in the Coal Industry Act 1994;
“highway” includes any road within the meaning of the Roads (Scotland) Act 1984;
“exempt process” means—
(a) the cutting of any rock to produce (stone with one or more flat surfaces);(b) any process by which a relevant substance is extracted or otherwise separated (whether as part of the process of winning it from any land or otherwise) from any aggregate;(c) any process for the production of lime or cement from limestone or from limestone and (anything else); and“relevant substance” means any of the following—
(a) anhydrite;(b) ball clay;(c) barytes;(d) china clay;(e) feldspar;(f) fireclay;(g) fluorspar;(h) fuller’s earth;(i) gems and semi-precious stones;(j) gypsum;(k) any metal or the ore of any metal;(l) muscovite;(m) perlite;(n) potash;(o) pumice;(p) rock phosphates;(q) sodium chloride;(r) talc; or(s) vermiculite.(9) The Treasury may by order made by statutory instrument—
(a) modify the list of relevant substances in subsection (8) above by adding any substance to that list or by removing any substance from it; and (b) make any such transitional provision in connection with the modification of that list under this subsection as they may think fit.(10) The Treasury shall not make an order under subsection (9) above by virtue of which any substance ceases to be a relevant substance unless a draft of the order has been laid before Parliament and approved by a resolution of the House of Commons.
(11) A statutory instrument containing an order under subsection (9) above that has not had to be approved in draft for the purposes of subsection (10) above shall be subject to annulment in pursuance of a resolution of the House of Commons.”
(2) Duty may not be charged in accordance with the provision inserted by this section if the exploitation occurs before the date appointed under section (Disapplication of United Kingdom Aggregates Levy)(4).”
Lord Forsyth of Drumlean
This feels like Groundhog Day.
I thought that the committee of the Scottish Parliament that looked at the latest Bill just before Christmas last year had wanted to include air passenger duty in it, but I am told that that is not the case and that the committee was prepared to wait. It is certainly not prepared to wait on the aggregates levy. As noble Lords will see, it takes three pages of legislation to provide for the power to obtain the revenue from the aggregates levy. Here, once again, we have a case of St Augustine: “We are in favour of this, but we don’t actually want to do it now”.
The argument being put against including this in the Bill is that it would be subject to legal challenge—the power might be put in the Bill but the result might be that no revenue for the Scottish Parliament arises from it. That is not an argument for not putting it in the Bill. Primary legislation is difficult to achieve, and it is even more difficult to achieve in a decent time in Westminster. I think that my noble friend should accept my amendment—which is probably technically deficient—and extend the range of tax powers available to the Scottish Parliament, if for no other reason than to mitigate the effects which we have talked about at length today of having a narrower income tax base. I beg to move.
Lord Foulkes of Cumnock
While the noble Lord, Lord Forsyth, has been talking, and now that he is talking about aggregates tax, I have been aggregating the time that we have taken to deal with half a dozen or so groups of amendments. I see that we have about twice as many groups still to deal with before we reach the target that the Government have set themselves. We have taken six and three-quarter hours to deal with these half a dozen or so groups of amendments, and at the rate we are going it will take until about 7 o’clock tomorrow morning to deal with the rest.
Although I am prepared to stay here, I think that it really is unfair on all the staff—on Hansard, on the catering staff, the doorkeepers, the civil servants and the clerks of course—who do such a wonderful job on our behalf. It is incumbent on the Minister and the noble Baroness the Whip to start thinking about how the Government will deal with this. We lost one whole day of our Committee stage because the Welfare Reform Bill took it up. We all sat round for a whole day but eventually the Government said, “We are not having it today. You can all go home”. That was a wasted day for many people. We are having a detailed debate on this Bill. I have not participated in much of it but I have been listening to all of it—and yes, as a noble Baroness says, I nodded off on one occasion as well.
It is incumbent on the Government to give an indication to the staff—to everyone around the House—of what will happen. How late will we go tonight and what is the target? They should also give us more time to deal properly with this very important constitutional Bill. It was not dealt with properly in the other place, but it is our responsibility to deal with it properly. There is plenty of time after Easter for Report. We could continue the Committee stage in the two days that are allocated for Report and deal with it properly then. I hope that the Government will give that serious consideration. Otherwise, we will not be treating dedicated staff as we should if we are to be a good employer.
Lord Sassoon
First, on my count of the progress that we are making, I have ticked off 19 groups and we have 10 to go, given the breaking up of groups and regrouping. My understanding is that the usual channels agreed that we should target and complete Amendment 87A. It was made quite clear in everything that I have read that there was that expectation. I very much appreciate all those who support us in keeping the House going, but I know that their expectation and our expectation over the past few days is regrettably that we will rise considerably later than normal today. Rather than spending too much time confirming what the usual channels have agreed, I think we should press on.
Lord Foulkes of Cumnock
Perhaps the Minister’s count is more accurate than mine—I would split the difference—but it is still going to take a long time. We have important issues to deal with such as the Barnett formula, the referendum, the Scottish Consolidated Fund, the Civil Service in Scotland, surcharges, financial privileges, legislative consent Motions and the delay in legislation on a referendum. If we are going to deal with all these things properly, we cannot deal with them now. We have all been sitting here for six and a quarter hours already. It really is important that we consider the staff in this. I hope the usual channels will have another look at this.
Lord Sassoon
Right. I had quite forgotten that we are on the aggregates levy. Let me answer my noble friend’s points. Yes, the Calman commission recommended the devolution of the aggregates levy and, as my noble friend knows, the Government agree with that recommendation. We are committed to devolving the aggregates levy to the Scottish Parliament but, to confirm what he said, we believe that that can and should be done only once the complex legal challenges against it in the European and UK courts have been fully resolved. The Government were clear about their position in the Command Paper for the Scotland Bill, and we remain firmly committed to it.
The position is still moving on the court challenge. The European General Court delivered its judgment in the case of British Aggregates Association v the Commission on 7 March this year. The judgment does not conclusively resolve the legal challenges. Appeals can still be brought against the judgment to the European General Court. Once the action in the European General Court has concluded, action in the UK Court of Appeal will resume. As we have discussed at considerable length, the Bill enables the Government to devolve taxes in future, and it means that devolving the aggregates levy after full resolution of the legal challenges can be achieved quickly. I am happy to say that my noble friend’s very extensive amendment technically broadly works. He is too modest. There would be one or two things to look at, but that is not the issue.
To make sure that things continue and we do not lose momentum on this, as a practical and necessary step to prepare for devolving the levy the independent Office for Budget Responsibility will start to provide forecasts of Scottish aggregates levy receipts from April 2012. The Treasury will also notionally assign these forecast receipts to the Scottish budget. Together with the tax powers in the Scotland Bill, this will allow for the speedy devolution of the levy when the legal challenges have been fully concluded. At that time, the order can be drawn up to reflect the position post the completion of the challenges.
I hope I have made it clear that the Government’s desire to devolve the levy as soon as is feasible continues. It is not feasible to do it while the legal challenges are ongoing. The Bill gives adequate powers for that devolution in future. I thank my noble friend for putting forward a carefully thought through amendment, but I ask him to withdraw it.
Lord Forsyth of Drumlean
My Lords, I am very puzzled by this. The Minister says that the amendment is competent. The Minister says that it was included in Calman. The Minister says that the Bill is about implementing the Calman proposals. The levy is certainly subject to a legal challenge. He did not explain why the fact that it is subject to a legal challenge precludes accepting my amendment and putting it in the Bill, and making that a devolved tax for the Scottish Parliament.
Lord Sassoon
I tried to make it clear that while we could draw up—as he has had a shot at drawing up—a technical solution within the framework of the levy as it exists now, and put through something in the form that he has proposed or a government amendment to do it, until we know whether it is premised on a legally sound basis it would be a waste of time to do so. We need to have a firm legal basis on which the levy exists before we can be sure of the proper basis to devolve it to Scotland. It is as simple as that.
I am surprised that he expresses such puzzlement. As I said, in the mean time we are doing all the practical things we can to make sure that when we have the legal green light, the devolution powers can be progressed as speedily as is appropriate.
Lord Forsyth of Drumlean
I am still a bit puzzled. Perhaps I do not understand it. Are the Government still collecting this levy?
Lord Forsyth of Drumlean
An argument that says, “We cannot put it in the Bill because we are not sure about the legality but we are still taking in the money” is a bit thin. I can give way to my noble friend and he can explain why it is not at all thin—it seems pretty thin to me. If the Government think that the legal basis is uncertain, why are they collecting the cash and spending it? As we know, their spending is way beyond their income. It is a very curious argument that says, “We are still collecting the tax but we cannot put this in the Bill”—which is subject, by the way, to commencement provisions that give the Treasury pretty considerable powers as to when it is enacted. The legal position is going to be sorted out one way or the other. If it means a change, there are already powers in the Bill to enable the Government to deal with that. I am at a loss to understand the logic of the Minister’s position.
Lord Sassoon
Let me make one last attempt at trying to help my noble friend as to why particularly the legal challenge means that it would be foolish and unsafe to try to draft an appropriate devolution mechanism now. As he may know, a central aspect of the challenges has been allegations of tax discrimination across borders. We do not know where it will come out and what the constraints may be, but since we might be doing something where borders would be relevant, we need to understand the legal ruling before we can construct a robust, devolved approach to this. It would be a ridiculous waste of our time and would make no sense to put up something if we thought that it would be immediately knocked down and that we would have to rewrite it in a year’s time.
Lord Forsyth of Drumlean
I have to say to my noble friend that at 7 pm on a Thursday night, after six hours of this Bill, to use an argument about wasting time is grave to say the least. The whole process that we are going through is in order to work out an appropriate Bill in terms of the Calman recommendations. If he is saying that if we make aggregates tax a devolved tax, although it might change as a result of changes arising from the legal challenge, I can just about get there, but when he says that it is about cross-border issues, presumably that refers to such issues between countries in the European Union and not within countries in the European Union. If we are now starting to say that we cannot devolve measures because of cross-border issues within the United Kingdom, are we not ceding a very important principle? He surely is not talking about the Scottish border in this context.
Lord Sassoon
I simply do not know where the courts will come out, but there are some constraints. As regards some of the amendments that my noble friend did not speak to, alcohol duties are one area where we are constrained by Europe, which says that there should be a uniform rate nationally. Therefore, there are other areas, although my noble friend might not like it. Alcohol duty is one area where there are precisely those constraints.
This illustrates why I do not think that it would be productive—there is a challenge, which is still not resolved and final—to base new legislation on an insecure foundation. In the mean time, as I have explained, we are operating the levy on a shadow basis, with the help of the Office for Budget Responsibility, so that we know what is attributable to Scotland from April 2012.
Lord Forsyth of Drumlean
That is to concede the point. If my noble friend is saying that the legal challenge might result in the Scottish Parliament not being able to have a higher or lower duty, should there have to be a uniform duty throughout the United Kingdom because of EU rules, that is not an argument for allowing the Scottish Parliament to have the revenue that arises from the aggregates levy. It is not just about setting the rate; it is also about having the revenue and broadening the tax base.
Perhaps the noble Lord is right. Who knows what the EU is capable of? The fact that we may end up with a uniform application, as in the case of alcohol duty, is not in itself a reason for not providing for this power in the Bill. If my noble friend’s concern is that the nature or the application of the tax may vary as a result of the legal case, and if he says to me, “Withdraw your amendment and I will come forward with a government amendment that provides for the aggregate levy but gives us the flexibility”, and my goodness, this Bill is bristling with examples, “for the Treasury to provide for it in secondary legislation”, that would be a much more desirable position—I know my noble friend hates it when we go back to this—than the general power to invent new taxes that is being justified on the basis of the Government’s inability, which I do not understand, to include in the Bill provisions that would allow for the aggregates levy and for air passenger duty. Can he help me with that?
Lord Sassoon
No, my Lords, I am afraid that I will not be able to help my noble friend. There is one subsidiary point on which perhaps I can do so. To be clear, I have said that it is a case against the Commission. For the avoidance of doubt, it is not that the UK is continuing to collect this levy on some inappropriate basis; it is just that the Commission is facing a case that may mean that the whole basis on which the levy system operates may have to change. I am afraid that I cannot give him any comfort on that. We shall draft the provisions as and when we have a safe basis on which to bring them forward.
Lord Forsyth of Drumlean
When my noble friend says that we will draft them when there is a safe basis on which they can come forward, I hope that by the time this Bill is given Royal Assent there will not be an open-ended power for him to come along and, by order, invent taxes that have not been subject to proper scrutiny as this aggregates tax would be, if he were to accept the amendment, by the House of Commons using the established procedures that we have always had for the consideration of tax.
There is one other question I want to ask my noble friend. Given the very strong line that he has taken on this matter—that it would be impossible to do so because of the legal challenge—and on the previous matter, the development land tax, which we have been told that it is not possible to put into the Bill, can I assume that this is no part of the negotiations that are going on with the Scottish Parliament to get legislative consent? I hope that the Government are not saying one thing to this House and another thing privately. Can he confirm that we are not going to be faced with this being delivered as the result of some deal, because of course that could not be done given the very firm line that my noble friend has taken on the impossibility of including those taxes in the Bill?
Lord Sassoon
My noble friend may have misunderstood me because I am sure that it would not be out of mischief, but I have never said that any of this is impossible. This Parliament can do whatever it wants in this area, but I have explained the practical and other reasons why it would be inappropriate at this time. I certainly do not want him to go away with the suggestion that any of this is impossible. It would just be wrong in the case of both of these taxes to proceed at this time for the reasons that I have set out at greater length than I thought I would have to, but I am happy to have had this debate.
Lord Forsyth of Drumlean
I am sorry that my noble friend is getting bored with this, but he has not actually answered my question. Let me put it in another way. Is he saying that if this House were minded to see the inclusion in the Bill of both these taxes—let us stick to the one we are on at the moment, the aggregates tax, although the development land tax had the support of those on both Benches—that whatever the strength of the arguments that are put, or even if this House were perhaps to vote in that direction, although that does not look particularly likely, he would resist it, but that it could be conceded as part of a negotiation with the Scottish Parliament in order to get its legislative consent, which is not required by statute? If he is saying that, that gives us considerable cause for concern, because what that says—and my noble friend talks about wasting time—is that it does not really matter what we say or do, or what arguments we advance.
In the end, what goes into the legislation will be determined by a backroom deal between Ministers and the First Minister on the basis of a legislative consent Motion that, right at the beginning of our debate, my noble friend refused to say would allow the Bill to go forward if it was accepted. It is a very simple question: will the line that my noble friend has given be held in the negotiations with the Scottish Parliament? It is a relevant question, because the committee that has looked at this wants it included in the Bill.
Lord Sassoon
I am struggling to see where this is going. The Government have said all along that we intend to devolve the aggregates levy. I think there was a slip somewhere, and perhaps I misheard, but the aggregates levy and the APD are the two taxes that we are talking about, for which it is inappropriate to bring forward measures at the moment. On the aggregates levy, we have been completely clear all along, so there is no question of any negotiation on this.
Lord Forsyth of Drumlean
Right. Well, on the basis of that undertaking, I am happy to beg leave to withdraw my amendment.
Lord Davidson of Glen Clova
My Lords, this is a very, if I may put it this way, gentle, probing amendment. It looks at Clause 37 and, in particular, subsection (3). The reason that one is advancing this is that one understands from the Command Paper, Strengthening Scotland’s Future, that there would be a current borrowing capacity for Scottish Ministers of up to £500 million. In the terms of subsection (3) that seems to be designed to cover, putting it broadly, a temporary shortfall in receipts.
When one looks at Clause 37, one sees that, in terms of capital expenditure borrowing, if Scottish Ministers wish to use that power they are required to obtain the approval of the Treasury. In subsection (5) there is reference also to the Secretary of State making an order pursuant to,
“the consent of the Treasury”.
What one is endeavouring to ascertain by the amendment is the thinking of the Government in relation to how temporary shortfalls may be met by borrowing, and what control there would be over that. Plainly, at least in Scotland but certainly in other jurisdictions, temporary shortfalls have a way of becoming fairly permanent. Borrowing by subsidiary jurisdictions can occasionally get out of hand, which requires being brought back under the control of central government. One is simply endeavouring to find for what reason no consent order or other order was put specifically on this power in the Bill.
I can perhaps put it better. One sees that there is a power here. It is going to be controlled, we are told in the Command Paper. Why is it not being controlled in the Bill, given that it is the very nature of borrowing that it might run out of control?
Lord Sassoon
My Lords, the short answer to the noble and learned Lord, Lord Davidson of Glen Clova, is that the additional safeguard proposed in his amendment does not need to be written into the Bill in this way because the limit and sources of borrowing are already controlled in the legislation and the Command Paper. I could leave it at that, but I feel that I should say a little more, because I understand what the noble and learned Lord and the noble Lord, Lord Browne, are driving at in their amendment. I agree that control over the borrowing powers needs to be careful and considered. They have given us an important opportunity to look at this matter and to confirm what I believe to be the case; namely, that sufficient controls exist.
The extended current borrowing facility proposed will provide Scottish Ministers with a lever to deal with the deviation between forecast and actual outturn receipts from devolved taxes. It will also enable them to deal with the volatility in revenue flows from taxes as they enter the Consolidated Fund at different times over the tax year and beyond. The current borrowing power will come into operation when the taxes are devolved, up to a limit of £500 million. I do not think that the noble and learned Lord is suggesting that there is anything inappropriate about that—he is confirming that he does not challenge the logic of that. In addition to the current borrowing facility, Scottish Ministers will have the power also to borrow to fund capital expenditure to a limit of up to 10 per cent of the Scottish capital budget in any year, with the overall stock of debt for capital purposes not exceeding £2.2 billion.
Such borrowing will need to be self-financed through increased revenue from taxation in Scotland or a reduction in public spending. So there are controls in place on the levels of borrowing, as there must be. On that basis, the Bill allows Scottish Ministers to access the most competitive source of lending, which is the National Loans Fund.
All other things being equal, Scottish borrowing will increase UK borrowing and debt. The limits in the Bill and the controls set out in the Command Paper will ensure that the Scottish debt is affordable from within the UK fiscal position.
While I support the intention behind the noble and learned Lord’s amendment, which is that borrowing by Scottish Ministers must not risk the UK’s fiscal position, I believe that the borrowing limits reflect a judgment of what is affordable and do not put that position at risk. The limits on borrowing for capital expenditure were judged by my right honourable friend the Chancellor of the Exchequer to represent an acceptable level of risk that he was willing to place on the UK’s public finances. The limits on borrowing for revenue expenditure were based on an assessment of the size of forecast errors in income tax in normal times. Unlike capital expenditure, where a stock may build up, borrowing for revenue expenditure is related to a technical assessment of forecast errors and the timing implication.
The protections already in place in the Bill are sufficient to ensure that the UK’s fiscal position is fully protected. I again thank the noble and learned Lord for stimulating this short discussion, but ask him to withdraw his amendment.
Lord Davidson of Glen Clova
I am obliged to the Minister for his careful clarification of the position. There is much content in what he has said and I shall reflect on it. Meanwhile, I beg leave to withdraw the amendment.
Lord Forsyth of Drumlean
“Allocation of public funds to Scotland
(1) The allocation of public funds to Scotland shall be based on a needs assessment, rather than the population basis of the Barnett formula.
(2) The Chancellor of the Exchequer shall, by order, establish a commission—
(a) to agree a methodology for assessing Scotland’s needs; and(b) periodically to review the allocation of public funds to Scotland in the light of its needs.(3) The first review by the commission must be completed no later than 1 April 2015.”
Lord Forsyth of Drumlean
My Lords, the noble Lord, Lord Barnett, left me a note saying that unfortunately he had been detained and would not be here to move his amendment, and asking me whether I might find the time to do so. As I have added my name to it, I will do so with pleasure. I know that the noble Lord was keen to discuss the issue in Committee.
We had a good preparatory discussion for the amendment when we heard from the Minister how any reduction in the tax base would be compensated for by an addition to the block grant. The fundamental flaw in the Bill is that it is presented as being about accountability, but the accountability is limited. This is partly because of the limited nature of the taxes being devolved and partly because of the compensation for changes in policy in the tax base, to which I have just referred. However, the accountability is limited mainly because the bulk of the funding in the block grant is still based on the world as it existed in the 1970s, as amended and altered by subsequent Governments, including those of which I was a member. I plead guilty to using some of the techniques to enhance the effects of the Barnett formula and to reduce the squeeze that otherwise would have occurred on Scotland’s budget.
A Scottish Parliament has to be accountable when it pursues its different policies, whether they are on health, free care for the elderly, free tuition fees, free bus travel, extra nursery care provision or free prescriptions on the NHS—all of which are no doubt popular. Indeed, I venture to suggest that one reason why Mr Salmond did so well in the elections was because he was able to make such promises. I am not sure he will be able to keep them, but he certainly benefits from the fact that Scotland is more generously funded relative to need than the rest of the United Kingdom. That is historically the position and I do not apologise for it. When I was in office I did everything that I could to keep it that way.
However, we are going to move to a Parliament which has its own tax-raising powers. It was interesting that at the start of our discussions people tried to maintain the idea that the tax-raising powers might be used to lower taxes. That finally fell over and the debate swung toward the consequences of higher taxes. One can imagine what the consequences would be of lowering taxes while providing additional services and being funded at a rate of 20 per cent more per head—perhaps a little less—as a result of the impact of the Bill and the 10p tax-raising power. Over time it would cause great resentment and great difficulty in other parts of the United Kingdom. As the noble Lord, Lord Browne, pointed out, we should always focus our attention on what the consequences are for the United Kingdom and the union as a whole.
The noble Lord, Lord Barnett, has a habit of landing me in it on this subject. He had several goes on the Floor of the House, as he did today on the car park—and if it is in order to give advice to Black Rod, I would urge him to give in gracefully, because the noble Lord is a terrier. He tried and tried to get the House to set up a special Select Committee to look at the Barnett formula. I served on that committee, along with my noble friend Lord Lang and a number of distinguished Members of this House. We laboured long and hard, took lots of evidence and were absolutely unanimous that the funding for Scotland needed to move to a system based on need. Various arguments have been put against that. The one put by the Government is perhaps the weakest—that the time is not right and that they are concentrating on reducing the deficit. Both of those reasons seem to be difficult to understand and illogical. Surely, the right time to address this is when you are seeking to set out hugely innovative constitutional change.
Lord O'Neill of Clackmannan
Will the noble Lord not concede that this is probably the wrong time to change the Barnett formula, given the failure of the nationalist Administration’s economic policy in Scotland, where unemployment is rising at a faster rate and the economy is growing even more slowly than in the rest of the United Kingdom? Sadly, we need the Barnett formula to keep the show going in Scotland. I admit that there are areas of expenditure that we may well dispute—I am not happy about the priorities of the nationalist Administration—but nevertheless, the money is required to try to keep our economy limping along at this very difficult time.
Lord Forsyth of Drumlean
The noble Lord may be surprised to hear that I agree with him. I am deeply concerned about what is going to happen to jobs and public services in Scotland as a result of the impact of the Bill. If he is saying that this is the wrong time to fiddle around with the Barnett formula, I would say that this is absolutely the wrong time to introduce tax-raising powers in Scotland that are limited in scope, with an Administration that appear to spend money without any idea of where the resources will come from. The Scottish budget is very stretched—the promises that have been made are on a very large scale and the revenue that can be raised from the income tax provisions is very limited. Despite that, the damage that will be done will be considerable.
Earlier in our proceedings, people said that I seemed to think that politicians were just going to keep putting up taxes, even though they have to get elected. However, it is not just about tax but about preserving our public services: our schools and so on. It is a fact that spending per head on health and education is very much higher in Scotland than in England and in Wales, but that spending has not produced the same levels of productivity. The noble Lord is absolutely right that despite all the bluster, the Brigadoon economics and the Braveheart talk, the nationalist Administration have singularly failed to deliver on any of the outputs that they promised. Among the real concerns are the rising levels of unemployment and youth unemployment. The noble Lord may be surprised that I agree with him on this. I personally would take this Bill, put it on the shelf and get on with deciding whether Scotland wishes to remain part of the United Kingdom—and then have a proper look at the consequences that follow from the Bill.
This Bill is from another time. Its genesis or midwife was an attempt by the unionist parties to avoid the nationalists getting a majority. It failed, and the world has moved on; the senior civil servant in the Scottish Office writes blog posts to his colleagues saying that it is lost in the mists of time and is irrelevant. No one who spent even a quarter of an hour listening to our proceedings this afternoon—whichever side of the argument they were on—could say that the Bill is not a huge constitutional change. It is taken for granted and people do not know what is happening. If we are going to go down this track—and I certainly would not want to—and if the idea is to make the Scottish Parliament accountable, the basis on which it is funded from Westminster should be one that is fair and is seen to be fair by the rest of the United Kingdom.
Lord Foulkes of Cumnock
My Lords, very briefly, I cannot support this amendment. It will not achieve what the noble Lord, Lord Forsyth, thinks it will in terms of fiscal responsibility. I understand why he is suggesting a change from the present arrangement to a needs-based arrangement. That is perfectly valid and he has argued the case very well. However, for as long as we still have mixed funding for the Scottish Parliament—powers to raise taxes and the block grant—there could always be a situation in which the Scottish Government hold the UK Government to ransom and say, “We are not going to raise more taxes. We want more money from the United Kingdom Parliament”.
That is why I think the noble Lord, Lord Forsyth, was coming round in his logic earlier, and will ultimately come round, to full fiscal responsibility. The Scottish Parliament should be given a basket of tax-raising powers, which is what I think Calman recommended, to raise money not just for part of its expenditure but for all of it. Until we get to the stage where the Scottish Government are responsible for making not just spending decisions but revenue-raising decisions, they will not have full fiscal responsibility. I know why the noble Lord is putting this forward but his amendment would still leave an Oliver Twist situation, whereby a First Minister such as the one we have now keeps pressing the UK Government for more and continues to blame them.
Lord Forsyth of Drumlean
Could the noble Lord just explain to me how that would work? What basket of taxes could meet the bill, given that there is a gap between the taxes that are raised and expenditure? How would that work?
Lord Foulkes of Cumnock
That is the conundrum that needs to be resolved, but it can be resolved by giving the Scottish Parliament a full range of tax-raising powers. I know that the argument is that Scotland does not have a big enough tax base to enable it to raise money to fund its domestic services. That cannot be the case if it has tax-raising powers, or you concede the argument that there is a major transfer of resources from England to Scotland to keep services going in Scotland. The First Minister of Scotland says that that is not the case. He says that Scotland is a wealthy country that can manage on its own. Therefore, you should take that as a challenge.
Lord Forsyth of Drumlean
I am most grateful to the noble Lord. However, the First Minister also says that Scotland could join an “arc of prosperity” with Iceland, Ireland and the rest. What the First Minister says and what the facts are are not the same thing. There is a gap; if there was not, we would not be arguing about the nature of the Barnett formula. Of course we spend more per head and of course we do not raise more taxes per head. Therefore, by definition, there is a gap—that is the point. My worry is that the road we are going down will narrow the gap and we will end up with less money and higher taxes in Scotland. That is the challenge. I live in Scotland and I want to die in Scotland. I worry about how services will be funded if we go down this road.
Lord Foulkes of Cumnock
I hope the noble Lord will continue to live in Scotland for a long time and that his life will not end too soon. From what he said earlier, I gathered that he wanted, in his heart, to move towards full fiscal responsibility. He said that in an earlier intervention. How can he not see the point that I am making? I may not have the right solution, but does he not see my point in relation to the continuation of a dual function? If the Scottish Government have the power to raise money and can still get a substantial amount of their expenditure from the United Kingdom Government, the incentive will be not to raise taxes—we have seen that with plus or minus 3p in the pound—but to ask the UK Government for more. That is why mixed funding would create tremendous problems.
The Earl of Caithness
My Lords, I would like to join in the discussion on this almost Second Reading series of amendments. Twenty minutes to introduce an amendment seems to me a little long.
I support the premise made by the noble Lord, Lord Foulkes. To my mind it is utterly ridiculous for any Government or Executive to have responsibility for 60 per cent of the expenditure but for raising only 4 per cent of the income. That is a certain way in which to upset every other member within the union. If one looks at that 4 per cent, it is quite staggeringly low. When countries such as Germany raise closer to 30 per cent of taxes locally, it seems that a huge amount of leeway can be given to Scotland. It is only by giving Scotland tax-raising powers that one will get accountability. You cannot get it any other way.
The so-called Barnett formula never started off as a formula; it was a device, as the noble Lord, Lord Barnett, has admitted. It has become a formula, and a political formula at that. All that it does at the moment is transfer to Scotland the equivalent of the oil revenues that Scotland is due. It is interesting to note that the needs spending gap in Scotland derived through the Barnett formula over the past 24 years totals about £128 billion in real terms yet the amount of revenue from North Sea oil that Scotland would have been due is about £134 billion. The great advantage that the Barnett formula has given to Scotland is that it has evened out the funds. If Scotland had had to rely on the oil revenue alone, given price fluctuations it would have had much greater difficulty in balancing the books than has been the case.
Therefore, in principle I agree with my noble friend Lord Forsyth that we should amend the Barnett formula. However, in doing so, I follow the noble Lord, Lord Foulkes, in saying that we should give the Scottish Government the responsibility for raising a lot more revenue and thereby make it more accountable.
Lord Lyell
My noble friend, who has far more experience of finance than I ever will have, mentioned Germany; I used to call it the Federal Republic of Germany. In 1983 I took a course in German at the Berlitz language school. I was given excellent advice on how to pay tax. Your Lordships may have heard me refer to this matter on Second Reading. I will quickly go through it again. For every €100 you paid in tax, the local tax office took €15 of that. For the noble and learned Lord, Lord Davidson, and me, the local tax office would probably be in Forfar or Dundee. The balance of €85 was split, with 50 per cent going to the state, which might be Baden-Wurttemberg, Bavaria or North Rhein-Westphalia, and 42.5 per cent going to the federal budget. My noble friend mentioned 30 per cent. I do not know how much of that would go to his Gemeinde—his local area—how much would go to the state, say Baden-Wurttemberg, and how much would go to the federal system. That is one example of how taxes are distributed.
My noble friend and the noble Lord, Lord Foulkes, are right to suggest giving the Scottish Parliament the power to raise taxes. However, the whole system should be looked at. As my noble friend Lord Forsyth has pointed out, we are planning what I call an asymmetric federal system. I am delighted to warn my noble friend on the Front Bench that we have hardly started to have a proper dig into the matter of who is a Scottish taxpayer. It is rather like a sort of dance that he goes on about; he talks about a close connection as if one is dancing with someone. When we consider who is a Scottish taxpayer, we should be aware that that will affect masses of English people, but we will come to that matter another day. In replying to my noble friend Lord Forsyth, will my noble friend the Minister take on board his idea that this Bill may go through but at least we can look at having a better tax system than that which is planned—certainly in the Bill before us—possibly on the lines of what happens in the Federal Republic of Germany or Switzerland? You can look at how this is done elsewhere, but what is proposed in the Bill is a mishmash that will provide eternal difficulty, eternal grounds for gripe, and screams of, “We are not satisfied”. There will be all this and more. There is a problem, and I hope that when the Minister winds up he can give me some reassurance and take on board the point made by my noble friend Lord Forsyth.
Lord Maclennan of Rogart
My Lords, I have listened to this debate with fascination and I agree with the basic view of the noble Lord, Lord Barnett, and my noble friend Lord Forsyth about the injustice and unfairness of the Barnett formula. The aspect of the amendment that I appreciate and support most is the notion of establishing a commission, but it should go wider than one that is charged with the task of looking at only Scottish needs—it should look at the needs of the United Kingdom as a whole. The amendment, in so far as it suggests that the first report should be completed by April 2015, is also sensible.
The general view is that the Barnett formula is unjust. This is becoming the backdrop to consideration of devolution in other parts of the United Kingdom. There is a serious risk that this will turn a large part of our population into a very angry opposition to devolution or any advance in self-government or self-taxation. This is not the right time to decide precisely how far these matters should go. Since the Calman commission reported, there has been a considerable widening of the debate due to the success of the Scottish National Party in the previous Scottish election. It may well be that many who would not have taken seriously what is now called devo-max will now take it more seriously. However these things need to be looked at in the round and I would not go down that line at this time.
What is given out by public funds to all parts of the United Kingdom is a matter for the United Kingdom Government, and they do not need specifically to be empowered in the Bill to base their decisions on a needs assessment. As I understand it, the Barnett formula is not based in statute, and it would be perfectly possible for the Government of the day to advance a change. I say yes to a commission to enable us to make a decision, if appropriate, at the right time. When I say that the decision should be made by us, I mean the Government of the United Kingdom. The postponement of consideration of ways and means—the process for changing the allocation of public funds—has been delayed for too long. We have had all kinds of academic input into this discussion. The committee on which my noble friend Lord Forsyth served was absolutely clear on this, and there has been too much delay in taking this issue seriously and getting down to the small print. Only when we have that nexus of information are we going to be able to make a judgment—against the backdrop of what has been decided about tax—as to what would be the appropriate way to deal with the Scottish question.
Lord O'Neill of Clackmannan
My Lords, I am opposed to the amendment on the basis of the rather feeble argument of the doctrine of unripe time, which is always a favourite for people to hide behind. I say so because, as I said in my intervention on the noble Lord, Lord Forsyth, I do not think that the Scottish economy is sufficiently robust at the moment to have a dramatic ground shift in financing. We have to be far sharper and more accurate in our criticisms and attacks on the Salmond Administration and the consequences of their failure to protect Scotland from the worst aspects of the economic crisis that we are going through.
Secondly, on the suggestion in the amendment that we set up a commission, a considerable part of the speech of the noble Lord, Lord Forsyth, if not half, was certainly taken up by a paean of praise not only for the noble Lord, Lord Barnett, but for the Select Committee which the noble Lord set up here. I am not sure whether the commission will come up with anything very much different by way of information regarding the Barnett issue. In the first instance, to start talking about ending the Barnett formula is a bit premature; in the second instance, I do not really see that a commission is going to do much more than the Select Committee of which the noble Lord was a distinguished member.
The Barnett formula is not set in stone. Some of us are old enough to remember the Goschen formula, which was the predecessor of Barnett and which was a lot simpler to understand. As I recall, 11-80ths was the ratio and there was a needs resources element. The formula of the noble Lord, Lord Barnett, was probably too clever by half at the time and it certainly requires review 30-odd years on from its conception.
Even allowing for that, I think it is foolhardy at this stage to lay out a stall for devo-max. Discussion of devo-max is something that happens after a referendum on the question of separatism. Once the separatist cause has been defeated in a referendum, we can look the options and what Scotland actually wants. At the moment, there is an assumption that if we do not move quickly we will get hammered in a referendum and that the result could be anything up to 65:35. Personally, I think that if we had a referendum, we would have a very close run thing one way or the other. I would desperately hope that the unity of the kingdom was sustained, and would hope to play a small part in achieving that result. Let us not forget that less than half of the Scottish electorate voted in the elections last year, and 45 per cent of them voted nationalist. So we are talking about a separatist party enjoying 23 to 24 per cent of the votes of the Scottish electorate as a whole. I know that Governments get elected on low turnouts and less than 50 per cent shares, but for us to start developing a complete political construct to accommodate what might be a negotiating position once the fundamental question has been resolved one way or the other is a bit of a waste of time.
In a number of respects, the noble Lord, Lord Forsyth, and I are not that far away, but the implication of his remarks is that the commission would transform Barnett fairly quickly. I think that we must focus our attention on the inadequacies of the Salmond Administration and make sure that the money currently available to the Scottish Government is used more effectively for the Scottish people. Therefore, I do not think that we need to look at the formula in the way that he is suggesting, and we certainly do not need another talking shop. We have had one already and, no matter how distinguished the personnel involved in it were and no matter how good the information and evidence they produced, it did not have a great deal of effect. At present, it would be far more sensible for us to carry on with this muddled legislation—which nobody really likes but not many folk want to get rid of—and try to get it finished, not necessarily this evening but in the fullness of time.
Lord Sassoon
My Lords, first, it is a pity that the noble Lord, Lord Barnett, has not been able to join us this evening to discuss his eponymous formula. Nevertheless, we have had an interesting debate. I am afraid that, in the words of the noble Lord, Lord O’Neill of Clackmannan, I am probably going to take the feeble-argument way out of this, although he has given it a degree of respectability. I fully share the concerns about the formula that have been expressed in this House and in another place, but I think that this is the wrong time and place to be dealing with it. Perhaps I may explain a little more fully why I say that.
What is the Bill about? It is about increasing the accountability of the Scottish Parliament to its people by devolving fiscal powers from Whitehall to Holyrood. In this debate we have heard a number of Peers say that they would like much more to be devolved. I suppose that at the extreme end the noble Lord, Lord Foulkes of Cumnock, my noble friend Lord Caithness and others have pointed out the limits to the amount of devolution of tax powers and accountability that can take place. Nevertheless, I still contend that an important and significant step in the right direction is contained in the Bill and we should not minimise that.
Future decisions taken by Scottish Ministers will affect the overall level of funding for Scotland’s public services as they decide whether to increase or decrease devolved taxes relative to the UK. That happens whether or not there are any changes to the Barnett formula in the future. I think it is quite appropriate to link considerations of the Barnett formula with what we are discussing in the Bill. On the other hand, I argue that it is not necessary to reform the Barnett formula for the Bill that we are discussing to have real impact. I would not go as far as saying that reforming the Barnett formula is an entirely separate issue but I do not think that it is necessary in order to let the Bill have full effect. Incidentally, the Calman commission remarked on the Barnett formula but it made no recommendations in relation to it.
Lord Forsyth of Drumlean
I have been listening quite carefully to my noble friend’s argument and I see the logic of where he is coming from. It is this wretched Augustinian argument—the time is not right. My noble friend may not want to say this but if he thinks that the Barnett formula is unfair and will need to be dealt with at some stage in the future, would it not be much harder to deal with it then? At the moment, if you dealt with Barnett you could phase in the reduction in the grant that would follow. In circumstances when the Scottish Parliament has the power to raise income tax to make up the gap, it would be politically very much more difficult to deal with Barnett because people would be able to translate the reduction in Barnett into huge and geared increases in income tax. I wonder whether my noble friend will think about that and indicate whether he thinks that that may be a reason why it is better to proceed with funding and tax-varying powers in parallel.
Lord Sassoon
My Lords, I do not know whether it was an Augustinian argument but I was going to start by saying that the pace is not right rather than that the time is not right. However, we might come on to the time as well. I appreciate that the two things are much of a muchness. Let me continue with the reasoning.
First, as my noble friend knows full well, the current formula is an administrative procedure. It does not appear in legislation so it is not itself something that requires to be dealt with in legislation. More importantly —something that has been alluded to by one or two noble Lords—we need to have in the centre of our thinking that it is not specific to Scotland; it is a mechanism for allocating funding across all four countries of the UK. It would not be appropriate to legislate to alter the formula—a formula that is not in legislation anyway. If we were to legislate for something else, we could not do it in isolation for Scotland.
To reiterate, the Government understand the concerns that have been expressed in both Houses about the devolved funding arrangements. I say that loud and clear, I hope, to my noble friend Lord Lyell in particular. He gave examples of how other countries do it and sought reassurance that we have the matter under consideration. I certainly believe that it is a matter that will not and should not go away. My noble friend Lord Maclennan of Rogart also stressed the importance of this. Unlike some other noble Lords, he made the point that this is a United Kingdom and four-country matter. I agree with the noble Lord, Lord O’Neill of Clackmannan, that while we recognise the difficulties, the Government’s position—Augustinian or otherwise—is that at this time the priority has to be to reduce the deficit. I hear my noble friend loud and clear, and he would not expect to hear anything else from me. Any change to the current system and to the formula must await the stabilisation of the public finances.
Let us remember that the Bill does nothing to rule out or rule in reform of the formula in future, so we are doing nothing through this Bill to make it any more difficult to do it. I understand the logic of much of what my noble friend says but, as he would expect, I conclude that the Barnett formula is not the purpose of this Bill. It would not be appropriate to legislate for it in this more targeted piece of legislation, so I ask my noble friend to withdraw the amendment in his name and that of the noble Lord, Lord Barnett.
Lord O'Neill of Clackmannan
I am a wee bit suspicious of Conservative government Ministers when they tell me that they agree with me. I want to make it perfectly clear that I do not criticise the Barnett formula in respect of any aspect of deficit reduction, because I consider that we have reduced too much too fast. I would be in favour of the reallocation of resource within the United Kingdom and the reallocation of resource within Scotland, because the priorities of the Scottish Government are wrong at this time. I may agree with the Minister on this Augustinian position, but not on any other aspect of his analysis of the economic situation.
Lord Sassoon
I am very glad that we have that clearly on the record. I did think at one point at the beginning of the remarks by the noble Lords, Lord O’Neill and Lord Foulkes, that I would be able to say that I agreed with everything they said. I agree with their conclusion that this amendment should be opposed or, I hope, withdrawn, but I certainly accept that we are probably not in full agreement.
While I am on my feet, it gives me the opportunity to say that the Calman report said that the Barnett formula should continue to be used as the basis for calculating the block grant so, for the avoidance of doubt, when I said there were no recommendations, there were no recommendations to deal with it along the lines proposed in the amendment. The report went on to say quite a lot of things because this was only recommendation 3.4, but perhaps I can end by asking my noble friend to withdraw his amendment.
Lord Forsyth of Drumlean
I am most grateful to my noble friend. The only sadness I have about this debate is that we did not have the noble Lord, Lord Barnett. We will clearly have to have another go at this when he can attend at a later stage in the Bill. My noble and learned friend Lord Wallace has lost his sense of humour—I was joking.
As I said, it is a shame that the noble Lord, Lord Barnett, was not here. We have had some interesting speeches. I have to say that I am not an authority on Calman. The report certainly says that, but I think it goes on to say that it should be reviewed. I think it was important to have this debate. I entirely accept that it does not have to be included in the Bill, but given that the Government are bringing forward this Bill, it was an opportunity to raise the important question of Barnett and the consequences of not addressing the issue now.
I thought that what my noble friend Lord Maclennan had to say was entirely sensible both because this is a United Kingdom issue, not a Scottish issue, and because there should be a commission. I think it was the noble Lord, Lord O’Neill—or was it someone else? I cannot remember—who said that there are endless commissions, that we had the Barnett commission that did not make much difference and that commissions come and go.
I think there is a misunderstanding. The Select Committee on Barnett recommended that a statutory commission along the lines of that in Australia should be set up with the job of working out the formula on a fair basis for the United Kingdom as a whole. I do not know, because he is not here, but I suspect that that is what the noble Lord, Lord Barnett, is referring to in his amendment. I agree with my noble friend Lord Maclennan that it would be sensible to get that work under way because the tax-raising powers are not going to happen until 2015.
I also agree with the noble Lord, Lord O’Neill, that this is probably not the moment to start unwinding the Barnett formula, but we would need to have a commission of that kind in order to move to a fairer system, and that work will take four or five years. The Select Committee of this House on the Barnett formula recommended that any changes, and they would be considerable, should be phased in over a very long period of 10 to 12 years. My anxiety is that as we move down this track and as it generates heat and anxiety in parts of the United Kingdom, it may be very much more difficult to do this in an orderly way that produces the minimum stress for the union and for our public services in Scotland. That is where I am coming from on this issue.
I have to say to my noble friend Lord Caithness, who seems to have joined the devo-max party of the noble Lord, Lord Foulkes, and wants to have more taxes, I have not seen his name on any of the amendments that have argued for an extension of the tax-raising powers of the Scottish Parliament: the aggregates levy, the air passenger duty and so on. Of course, this whole Bill as it is currently constituted in respect of the income tax powers is very narrow. It is only the product of 10p.
The noble Lord, Lord Foulkes, is trying to get me into his camp because I said that I was beginning to see the merits of the argument for fiscal autonomy. However, that was only in the context of what my noble friend was saying, which was that the Scottish Parliament will be compensated for any changes that are made in the tax base south of the border.
Lord Maxton
The noble Lord said “late lamented”—Wendy is still very much alive.
Lord Forsyth of Drumlean
She may still be alive but she is no longer leading the Labour Party in Scotland. I do not want to ruin what career she may have ahead of her, but in any discussions I had with her I found her to be exceptionally able and far-seeing, looking beyond the immediate prospect of events and what is in today’s newspapers.
I am not enthusiastic about this whole devo train that we have got on. I believed from the beginning that it would lead to the nationalists dominating the Parliament and that it could lead to the break-up of the United Kingdom. I am not particularly smart for thinking that. Enoch Powell was arguing that years ago. All I am saying is if we are going to go down this track, we should anticipate some of the problems and that Barnett is going to be one of them.
I sense that the House probably does not want to discuss this at any more length, so I beg leave to withdraw the amendment in my name and that of the noble Lord, Lord Barnett. I look forward to receiving some criticism by him for not making all the points that he would have made, and for not making them as eloquently as I am sure he would have done.
Lord Foulkes of Cumnock
“Referendum about further devolution of taxationReferendum about further devolution of taxation
In section 30 of the 1998 Act (legislative competence: supplementary) insert—“(5) Her Majesty may not by Order in Council amend Schedule 5 or make any other provision which removes any tax or excise duty from being a reserved matter (“the proposed devolution of taxation competence”) unless subsection (6) is satisfied.
(6) This subsection is satisfied if a referendum has been held throughout Scotland about whether the proposed devolution of taxation competence should take place and the majority of voters in the referendum vote in favour of the proposed devolution.
(7) Her Majesty may by Order in Council cause the referendum to be held.
(8) The Order in Council shall contain the question that is to appear on the ballot paper.
(9) An Order in Council under subsection (7) may not be made unless a draft of the statutory instrument containing the Order has been laid before, and approved by a resolution of, each House of Parliament.
(10) For further provision about a referendum held by virtue of this section, Schedule (Referendums under this Act) to the Scotland Act 2011 applies.””
Lord Foulkes of Cumnock
Hours ago, when we started this Committee, we got into a terrible fankle over which amendments we were dealing with, the groupings and how one amendment related to another. As we go on through these amendments, that problem will manifest itself even more. There is a lot of overlap and interrelationship, and I am not sure of the groupings. That is probably my fault as well as other Members, as much as it is of the clerks or anyone else. Nor am I sure that the groupings are as sensible as they might be.
However, this group is fairly sensible. The confusion is not in terms of the grouping. The confusion, which is in here to some extent but outside to a greater extent, is when we talk about referenda. That is because we are talking about different referenda. I accept what my noble friend Lord Browne said about this earlier. He is absolutely right and probably we would get unanimity in this House. The crucial referenda is the yes/no on separation. That is absolutely essential and vital. We will discuss that later in Committee. We will all focus on that and will have a really important debate.
I know where I stand on that and I have put down a number of amendments. One amendment deals with a yes/no vote and then moves on—I say a month or so later but it might not need to be later—to looking at how we deal with the situation post that referendum, assuming that we have rejected separation, as I hope that we will. Rightly, there is discussion in advance of the referendum as to whether the parties—the unionists, the devolutionists and the federalists: I keep reminding the Liberal Democrats that they are federalists—all of us, should have a common understanding of how we move forward in relation to the situation post that major referendum. It does not have to be a totally agreed position, which might be difficult.
I was going to move this amendment without reservation until I heard my noble friend Lord Browne earlier. I know that he wonders sometimes whether I listen to him but I listen very carefully to him. I was going to argue that we had a two-question referendum in 1997. The second question was:
“I agree … OR … I do not agree that the Scottish Parliament should have tax varying powers”.
Some 63.5 per cent of the electorate agreed and 36.5 per cent disagreed. A very substantial number were in favour of a tax-varying power.
In his intervention earlier, my noble friend said that, as far as the Official Opposition is concerned, that gives us a mandate not just for the plus or minus 3 pence but a mandate effectively for any tax-raising powers for the Scottish Parliament. That was my understanding of what my noble friend Lord Browne said. If I am wrong, I am sure that he would intervene.
If that is the case, there is an argument that we do not need a further referendum on tax-raising powers. We have effectively the mandate with the second question of the 1997 referendum. That now appears to be the view of the Official Opposition. Before we come to whether this amendment is voted on, withdrawn or whatever, is that also the view of Her Majesty's coalition Government? Do they believe that the vote on the second question in the 1997 referendum gives a mandate for this Parliament to give, without a referendum, the Scottish Parliament any tax-raising powers—and I mean any powers, not just income tax? My belief that we needed another referendum was based on the fact that there was an implicit understanding that it was going to be plus or minus a percentage of income tax. That would be the limit of the tax powers that were going to be devolved. That was my understanding, but I would accept correction. If that is the mandate, I would welcome it.
I was going to quote at length from an interesting article in Scottish Affairs, written in the winter of 1998 by Charles Pattie, David Denver, James Mitchell and Hugh Bochel, but because of the hour I will shorten it. It is an analysis of the results of the 1997 Scottish referendum. I want only to quote one part, and this is really in tribute to the noble Lord, Lord Forsyth:
“In 1995, however, Labour came under serious attack on the issue from the Scottish Conservatives when Michael Forsyth became Scottish Secretary. Forsyth focused on the tax varying powers in Labour’s proposals, the ‘tartan tax’ as he called it. Labour struggled to find an effective response and there was a fear that New Labour’s carefully constructed image as a low tax party might be tarnished. In the face of considerable controversy within Scotland, therefore, the Labour leader, Tony Blair, announced in 1996 that a referendum would be held consisting of two questions, one on the principle of devolution and the other on tax varying powers”.
So we have the noble Lord, Lord Forsyth, to thank for the fact that our Prime Minister took what I think was the correct decision—under pressure, according to this article, from the Scottish Conservatives and particularly from Michael Forsyth, as he was then—to include the second question.
That second question having been included and having had such a substantial majority, my noble friend Lord Browne having given us an assurance that the next Labour Government will accept this as a mandate and the current Opposition accepting it as a mandate to introduce any taxation, the question remains: what is the position of Her Majesty’s Government? Assuming that it is the same position, I would argue that this Parliament can then legislate for what the noble Earl, Lord Caithness, and I agree is the best way forward, which is full fiscal responsibility. Some people call it full fiscal autonomy, but it is important to have the word “responsibility” in it. The noble Earl put it very well indeed when he said that it is the responsibility for raising money as well as for spending money.
Lord Forsyth of Drumlean
It may be that the lateness of the hour and the number of amendments we have dealt with have addled my brain, but I do not really understand what the noble Lord is arguing. I thought that this amendment was about providing for a referendum, but he appears to be saying that the power in the Bill which allows for the imposition of new taxes by order before both Houses should be used to deliver complete fiscal autonomy. Can that be true?
Lord Foulkes of Cumnock
I have been listening carefully to the debate, but my brain might be addled as well. When did we start? I believe it was at 3.30 this afternoon—I am sorry, we started at 12.30 pm, so we have been debating for eight and a half hours. Perhaps I did not explain myself properly. I said earlier that I would move this amendment, but that before we introduce full fiscal responsibility we need a referendum. That is because if we had a referendum for plus or minus 3 pence on income tax, this will go a great deal further than that and therefore we need a referendum to give the authority to introduce that extra tax-raising power. However, my noble friend Lord Browne said earlier that the referendum result in 1997 gives us the necessary mandate to introduce full fiscal responsibility. No doubt he will repeat that when he comes to speak. What I want to know is what the Government think about it.
When I talk about full fiscal responsibility, that is not what some people talk about as devo-max. There are two things. One is the fiscal devolution, the tax-raising powers. The other is the spending powers, or the powers over services being devolved. We have effectively gone far enough in relation to that. Some people would argue that devo-max should include devolution of welfare, pensions or other aspects that are currently part of the United Kingdom responsibility. I would counter and argue very strongly against that. Donald Dewar, my noble friend Lord Sewel and others worked very hard on this to make sure that we gave maximum devolution of functions. We did that. Where we did not do it was to give the responsibility for raising the money to pay for exercising those functions. That is what I am arguing today.
Lord Sewel
My Lords, it is inevitable that this bit of our proceedings will be dominated by an argument not so much about a referendum but about fiscal autonomy and fiscal responsibility. I follow my noble friend only in the sense that I speak after him, not in the sense of following his arguments. He is a great and genuine supporter and exponent of fiscal autonomy. I am afraid that I am a total opponent of fiscal autonomy. A unitary system like ours has the great benefit of being able to move resources—public expenditure—around from richer areas to poorer areas. It so happens that that is a political objective, a political process that I am more than happy with. That is what we ought to be about: reducing inequalities.
The difficulty with fiscal autonomy is, in fact, that you lose that ability. It is not so much that you freeze inequalities; you are most likely going to make them worse. The rich areas will have a strong tax base, a relatively high tax take and very few deep-seated problems to deal with. The reverse will be the case for poorer areas. Their tax base will be fragile and they will have a low tax take, but they are faced with enormous social and economic problems. Only through a unitary system does—let us say it—the state have the power to move resources around to enable those inequalities to be lessened. That is an agenda that I wish to support. Fiscal autonomy leads us in completely the opposite direction.
Lord Maclennan of Rogart
My Lords, I thought that I was going to agree with the noble Lord, Lord Sewel, but I find that I take a third and different position from those advocated by the two noble Lords who preceded me. Like the noble Lord, Lord Foulkes of Cumnock, I am a federalist and I do not believe that federalism is to be identified with the unitary model that the noble Lord, Lord Sewel, recommended. However, we should look at different levels of taxation and at giving greater fiscal responsibility for the matters that have been devolved.
I hope, however, that we will not confuse the issue at this stage, before the federal option has been properly explored and ways of dividing tax-raising powers between the different levels of government adequately set out, so that people not only in Scotland but in Wales, Northern Ireland and England can grasp what this is about. We should include in our explanation details of the provision for the redistribution of the wealth of the United Kingdom to its constituent parts—not only to the four nations but to some of the regions of England, which seem to be doing rather badly out of the Barnett formula.
The timing of the referendum seems inappropriate. It turns not only on whether the earlier referendum gave the mandate to Parliament that the noble Lord, Lord Foulkes, has come round to thinking that it did. It seems to me that at the time—and I am basing my remarks entirely on memory—we were thinking about varying the rates of income tax and not about extending taxation. I was interested to listen to what the noble Lord, Lord Browne of Ladyton, said on that, and I dare say that he has done more historical research on the point than I have. It will be interesting to hear from the Minister, who I am sure will answer these questions, whether the noble Lord, Lord Browne, was right, and I hope that we can accept that there are more than two ways of imparting the responsibility for fiscal tax-raising. There is also a federal way. We should explore that, because it operates more fairly throughout the United Kingdom and will take care of the other countries, whose needs also need to be thought of in this context.
Lord Forsyth of Drumlean
My Lords, given the journey that we have embarked on, I suspect that the noble Lord may get his wish if we do not see the fragmentation of the United Kingdom. I have an abiding image in my head of the noble Lord, Lord Foulkes, sitting at 3 am in his underpants responding to these cybernats.
Lord Foulkes of Cumnock
As my noble friend Lord Sewel said, that would not be a pretty sight, I can assure you. The cybernats deal with these things at 3 am; I can assure the noble Lord, Lord Forsyth, that I do not—I do it at very sensible hours in a careful, co-ordinated way. I urge him to remove that picture from his mind, otherwise it might corrupt him.
Lord Forsyth of Drumlean
I am doing my best. I am very worried, because I am also tempted to divide the Committee, if only for the pleasure of seeing the noble Lord vote against his own amendment. He started off making the case for his amendment and then seemed to argue that it was not appropriate.
The noble Lord, Lord Browne, was right to warn us that the world has moved on and that referenda are dangerous in the context of taking our eye away from the main issue, which is independence. All this chat about devo-max and additional powers puts us exactly where the separatists want us to be. The last thing they want us to discuss is what the consequences of independence will be for Scotland. My party leader contributed to that by suggesting that we could look at that after the referendum. Others have said the same, and I am sure that the right focus is to do that.
However, the Bill has been caught out by the passage of events and it does not seem unreasonable for the considerable tax powers to be subject to a referendum. I was therefore attracted to the noble Lord’s amendment. However, I do not for the life of me understand his argument that that question, given its limited scope, gives permission to go down the road of fiscal autonomy. At the very least I would like the opportunity to see some numbers. The speech of the noble Lord, Lord Sewel, was right on the button. It went to the heart of the difficulties being created by people embracing concepts and policies without looking at the numbers, the arithmetic and the fiscal and financial consequences, which are subject to assumptions.
The other day, someone in my party—an accomplished policy wonk—was challenged with the notion that the Scotland Bill and the move towards taxation would inevitably result in discussion of the Barnett formula. He said: “Oh, there is no way that people will ever take that money away from Scotland. We are safe”. We must not make these assumptions. These are deep waters. I am not with the speech of the noble Lord, Lord Foulkes, in support of his amendment, but I think that the amendment is reasonably sensible. We should be guided very much by the pertinent point made by the midwife of this whole exercise, who must feel like someone whose child has turned into a delinquent adolescent. We have to find a way of gripping the issue. Whether it is a federal or some other solution I know not, but I am sure that we should not distract attention from the referendum on the future of the union.
Lord Browne of Ladyton
My Lords, almost everyone who is in the House now will recollect that when I last spoke at any length in Committee it was on the group led by Amendment 53. As I had expected that that group would be much bigger and would include my noble friend’s amendments, I told the Committee that it was my intention to address those in anticipation. I had intended to restrict my remarks to referring your Lordships and my noble friend, in particular, to the speech I made earlier, but he has drawn so much support for his greater agenda from one part of that speech that I think I should pause for a few moments and remind him of what I said and the context in which I said it. It will then be open to him, of course, to draw any conclusions he chooses. I feel like a government Minister at this point, repeating words.
I remember the shock when I said, in making a broader argument about the political circumstances that informed the decision that we needed to make on ordering our priorities in terms of a referendum—no doubt the Official Report will correct me if I am wrong —that, as the Calman commission noted, a mandate had at least partially been granted by the 1997 referendum on Scottish devolution. It was a partial mandate, in one part of a broader argument.
I have probably gone further in explanation and beyond my prepared script than any Minister has in this House today. Perhaps I was unwise to do that. However, my noble friend is well able to read the rest of the context of that shortened quotation. If that gives him the comfort that he seeks—should there be any future Labour Government within a timescale that would allow him to resurrect his ambition for full fiscal autonomy—then I would be surprised.
Lord Wallace of Tankerness
My Lords, we return to the issue of the referendum. In the group of amendments to which the noble Lord, Lord Foulkes of Cumnock, has spoken, there is an amendment that would require a referendum to be held before further taxation powers can be devolved and a referendum that would be required before Part 3 of the Bill would come into force. Somewhat curiously, Amendment 75 would ensure that the finance provisions in Part 3 of the Bill—other than the consequential amendments related to the Scottish rate of income tax and the powers in Clause 37—and the clause related to Antarctica in Clause 14 would come into force only two months after a referendum in which the majority of participants had voted in favour of Parts 1, 2 and 3 of the Act. We have an opportunity for many referenda—or referendums. I am a supporter of referendums in the grammatical sense—not in the sense of holding them—but we are not going down that route at the moment.
As the noble Lord, Lord Browne indicated, the debate quickly moved on to devo-max and other variations on that. I do not intend to follow that, as I think that the amendments are about whether we should hold a series of referendums. On that issue, I remind the Committee what the Calman commission said in paragraph 3.91 of its report:
“Tax devolution can provide accountability. We concluded in our First Report that the devolution of all taxes to the Scottish Parliament would not be consistent with the maintenance of the Union, and this remains our view”.
That was a view that the noble Lord, Lord Sewel, was expressing. I am biased, because I was a member of the commission, but in much of the analysis that it did in trying to devise the balance of taxation between the United Kingdom Parliament and the Scottish Parliament the commission looked at the implications of any proposal for social and economic union. That echoes the speech of my noble friend Lord Maclennan of Rogart. I refer to a social union not only of constituent countries of the United Kingdom but of the many regions within Scotland, Wales, Northern Ireland and England.
The noble Lord, Lord Foulkes, asked about the 1997 referendum and the noble Lord, Lord Browne, has indicated his interpretation. It is difficult, 14 and a half years after the event, to be too prescriptive about what interpretation you may make of it, but it is clear in 1997 that the Scottish electorate gave a clear mandate for a Scottish Parliament with tax-varying powers. Some 63.5 per cent declared in favour in terms of tax-varying powers and 10 per cent more than that on the idea of having a Scottish Parliament. We have to recognise that the debate leading up to the referendum was around a specific proposal for tax-varying powers, plus or minus 3 pence. Equally, many argued that it was an argument on the ability of the Parliament to assume a degree of financial accountability for taxation and spending decisions. It was an important principle, and a mandate flows from the 1997 referendum that the Parliament should have a degree of financial accountability for taxation and spending decisions.
Lord Foulkes of Cumnock
The Minister used the word mandate, but my noble friend Lord Browne of Ladyton used the phrase “partial mandate”, which is a new legal concept. I know that the noble and learned Lord and my noble friend are both distinguished lawyers, but I do not understand the concept of a partial mandate. What does the Minister mean exactly by the 1997 Act giving a mandate? Is it a mandate for any tax powers or for income tax-varying powers alone?
Lord Wallace of Tankerness
The noble Lord did not quite hear what I said. Many people argued that the Scottish Parliament should have a degree of accountability for taxation and spending decisions. As I said, there was a clear mandate that there should be that responsibility or accountability for taxation. That was why I qualified it, because we should not run away from the fact that it was in the context of a campaign that was very much focused on the plus or minus 3 pence. That was why I was not going to read more into it than that Scottish people clearly wanted a Parliament back in 1997 that had accountability for taxation as well as for spending. Nothing since then has suggested that that has in any way changed. Indeed, it is clear that the idea of increased financial accountability for the Scottish Parliament continues to have widespread support in Scotland. It was certainly the thrust of most of the representations made to the Calman commission that there should be increased accountability. My noble friend Lord Steel of Aikwood said in a Donald Dewar memorial lecture that it was not sustainable for a Parliament to exist on a 100 per cent grant voted from another Parliament and that there was a need for greater financial accountability. That is what we seek to deliver in this Bill and we believe that the scheme laid out in the Bill is significant. It offers new powers to the Parliament to match spending powers with responsibility and accountability and does so very much within the broad framework of the 1997 Act. I do not believe that the additional referendums that the noble Lord, Lord Foulkes, proposes are necessary for the powers contained in this.
The noble Lord asked about the mandate. I indicated in response to the amendment moved earlier by my noble friend Lord Forsyth that the manifestos of the Conservative, Labour and Liberal Democrat parties at the 2010 election contained the commitment to implement the proposals of the Calman commission. The fact that these were widely supported, not just in Scotland but in other parts of the United Kingdom, provides a mandate for the provisions within this Bill.
My final comment, echoing what my noble friend Lord Forsyth and others said, is that the main referendum we have to focus on is the one which will secure Scotland's future in the United Kingdom. That would not be assisted by having the plethora of other referendums which would perhaps be the consequence of the amendment in the name of the noble Lord, Lord Foulkes.
Lord Foulkes of Cumnock
My Lords, as I said at the start, the purpose of my amendment was to have a debate on it. There are a number of amendments, as the Minister rightly said, but I am not sure that the one on Antarctica has anything to do with me. I cannot remember tabling one about Antarctica, but I certainly tabled one in relation to Calman or further fiscal responsibility. I will come back to the Minister’s point on that, because there is an inconsistency in what he says. That is the main point that needs to be made.
First, I totally understand what my noble friend Lord Sewel said. He is absolutely right about redistribution, whether it be redistribution within the whole United Kingdom, within England or within Europe. I am sure that my noble friend, who is a distinguished member of the Council of Europe delegation—
Lord Foulkes of Cumnock
He is a member of the NATO delegation, but he understands the European issues and I am sure that he will know that redistribution within Europe to the poorer areas is as important as within the United Kingdom. I am not suggesting that there should not be some kind of arrangement or formula for that kind of redistribution. There is no reason why it could not be done, and I am sure that the noble Lord, Lord Lyell, who has extensive knowledge of Germany, will be able to indicate that there are arrangements within Germany to make sure that some of the poorer Länder are helped by some of the richer Länder.
That can be done in a federal context as well, which brings me to the noble Lord, Lord Maclennan. He and I ultimately favour a federal system; that is the one stable system that is desirable. We had a unitary system which created tremendous problems and inequalities. In Scotland, it created problems through a lack of political accountability. At the other end is total separation with the break-up of the United Kingdom, which would be disastrous. A federal system has all the advantages of working together but with local autonomy. What we have at the moment is a quasi-federal system, and we need to move towards a proper federal system. I know that he and I agree on that.
The noble Lord, Lord Forsyth, said that he was unsure whether the 1997 referendum gives us a mandate. This is the crucial thing; he thinks that it does not, as I did not when I tabled these amendments. The noble Lord, Lord Forsyth, is laughing but he has spent almost all of today trying to persuade the Minister to concede, to change his mind and to listen to argument. Both Ministers have of course refused to consider any of his arguments but when I take account of what other people say, he laughs and says that I am inconsistent or doing a U-turn. I am just trying to go through the arguments as to whether a further referendum on a major extension of tax-raising powers for the Scottish Parliament would be necessary.
What I understand the Minister to have said is that although his recollection is much the same as mine, when we got that big majority for tax-raising powers in the 1997 referendum, the understanding in the surrounding debate was that it was for plus or minus 3p.
However, he extrapolates, using the new legal concept that my noble friend Lord Browne has devised, that it gives the Government a partial mandate to introduce the new tax-raising powers in Calman. These go a long way, as the noble Lord, Lord Forsyth, pointed out. However, he has reservations and does not think it is enough of a mandate to go for full fiscal responsibility. I find that strange. It is very difficult to understand why, if the referendum was a mandate in the context of plus or minus 3p and is a mandate for Calman, which goes half way towards full fiscal responsibility, it is not a mandate for full fiscal responsibility. Does it go a quarter of the way? I presume that it does if it goes half way. Does it go three-quarters of the way? We do not know. It is a very difficult concept and we really need to think about this.
Lord Lyell
The noble Lord has been very kind in referring to me. He made a passionate comment but he was very much on to something, as was my noble friend Lord Forsyth. I have heard some encouraging noises from the Minister about looking at a federal tax-raising system. I definitely take the initials CB to stand not necessarily for Companion of the Bath but for “cynical something else”. I worry that we will complete our discussions on the Bill and all its mechanisms but, at some stage, this discussion will be kicked into the long grass. It is very much on the side, along with my noble friend Lord Forsyth and the noble Lord, Lord Foulkes, of looking at a federal tax system that will be fair and agreeable and will work. I am worried that, when we finish the Bill, we will have come up with a system that is asymmetric and will not work.
Lord Forsyth of Drumlean
“Scottish Consolidated Fund
(1) The 1998 Act is amended as follows.
(2) In section 64 (Scottish Consolidated Fund), for subsections (6) and (7) substitute—
“(6) Scottish Ministers may retain in the Scottish Consolidated Fund any amount not paid out under section 65, and may carry forward such surpluses from one financial year to the next.””
Lord Forsyth of Drumlean
My Lords, I am very disappointed that the noble Lord, Lord Foulkes, thinks that I have spent the past nine hours speaking but that my noble friends on the Front Bench have not listened to a word I have said.
Lord Foulkes of Cumnock
I am sure that they have been listening but they have not conceded anything. They have not moved to take account of the very sensible arguments that the noble Lord, Lord Forsyth, has brought forward from time to time.
Lord Forsyth of Drumlean
I was going to say that I was once given the advice, which I believe is part of the Whips’ Office mantra among all parties: namely, that whatever you do, you should not listen to the debate because it might make you inclined not to take the Whip. The great thing about this House is that that does not work in quite this way here, so one carries on in the hope that the arguments move Ministers a little. However, my complete failure to persuade the Minister that it is necessary to change speed limits to cover HGV vehicles as well as cars makes me think that perhaps one is trying to push water uphill. Nevertheless, I will have another go on this amendment, which I think is rather important.
The amendment would help Scottish Ministers in the Scottish Parliament to carry over expenditure which they have not spent in any financial year. I could keep going for about half an hour with stories of local authorities that rush out and buy street furniture in February and sleeping policemen in March. We are all familiar with that practice. It is an old saw. Anybody who has been a Member of Parliament can recount endless examples of constituents who have pointed out how ridiculous it is. I believe that this amendment would be welcomed by Ministers in the Scottish Parliament. The arguments are well understood so I will not dwell on them. I live in hope that my noble friend might be listening and might offer me some comfort that on this occasion he can see the sense in allowing surpluses to be carried forward from one financial year to the next. That seems to me to encourage good planning, good use of resources and proper stewardship of public money. I beg to move.
Lord Sassoon
As I say, we might get through this one tonight. I well understand what my noble friend wants to achieve with this amendment. There are two aspects to this question: first, whether the amendment would achieve what he wants it to achieve; and, secondly, whether it would be a good thing to achieve it. If the intention is to allow the Scottish Government to carry forward unspent funds and spend them in the next year, this is not the mechanism with which to do it. The amendment would accumulate funds in the Scottish Consolidated Fund but would not permit the expenditure of those funds since they are controlled by departmental expenditure limits which would remain controlled as they are now. Therefore, the amendment would not achieve that objective. Furthermore, it would deprive the Exchequer of revenue. The direct cost to the Exchequer of this proposal is around £100 million per annum. If the principle was extended to the other devolved Administrations, it would cost a lot more.
I shall not debate the effect of the amendment further, unless my noble friend would like me to. However, I suggest that, whatever the merits of the case, this amendment would not achieve them because it does not get round the expenditure controls which are agreed on a departmental basis. It would merely lock up funds and worsen the borrowing and fiscal position of the UK, which I know my noble friend thinks we are probably too lax about already. Therefore, I ask him to withdraw the amendment.
Lord Forsyth of Drumlean
My Lords, I am perfectly content to accept that the amendment may not have been perfectly drafted, but I am not content with that response, because I was clearly advancing the principle that the Scottish Parliament should be able to carry forward surpluses. If my noble friend can perhaps deal with the issue of whether it is able to do that, and whether he favours it in principle, I should be very grateful.
Lord Sassoon
My Lords, we need to make sure that UK expenditure, including Scottish expenditure, continues to be controlled in a way that imposes appropriate disciplines. The purpose of the Bill is of course to give the Scottish Government more responsibility for a proportion of their tax-raising powers, and that is linked to the expenditure. However, the expenditure having been agreed, it is appropriate that money from taxation should continue to flow as it does now into the Consolidated Fund, subject to the current regime under the Scotland Act 1998, which permits the Treasury, after consultation with Scottish Ministers, to designate receipts that go to the Consolidated Fund.
The devolved Administration in Scotland is currently required to surrender receipts from fines, forfeitures, fixed penalties, dividends on public dividend capital and most interest collected by Scottish Ministers. So there is currently a provision to recognise the flow of funds between Scotland and the UK Consolidated Fund. At the moment, the vast majority of the income in question is derived from fines and fixed penalties, which the Office for National Statistics defines as analogous to taxes. That arrangement is consistent with the Government’s view that taxes that are not devolved should be collected centrally and then redistributed across the UK. We continue to believe that, with the exception of what is explicitly devolved, the revenue should flow into the Consolidated Fund and that expenditure controls should otherwise continue to be exercised on the current basis.
There are much wider questions to be asked about end-year flexibility in individual departmental expenditure in the rest of the UK, and there is certainly a debate to be had—it is well outside the scope of the Bill—on the appropriateness for all government departments across the UK to carry forward expenditure from one year to another. The Treasury rules on this have changed over the years. I cannot remember in which year it was, but health expenditure got out of hand in the latter stages of the previous Government. I cannot remember if it was when the noble Lord, Lord Browne, was Chief Secretary. The noble Lord is indicating that it was, so he will know very well the difficulties of any regime under which expenditure is carried forward.
I do not want to be dismissive of my noble friend’s point, because there is a real issue here.
Lord Browne of Ladyton
For the purposes of clarity, my recollection is that the problem arose before I became Chief Secretary to the Treasury. However, it was brought under control when I was Chief Secretary.
Lord Sassoon
If my memory serves me, it was got under control by ending the system of end-year flexibility for departments to carry forward expenditure. There is an important debate to be had about this, but locking up funds in the Scottish Consolidated Fund, as a sort of back-door way of addressing the question of what should or should not be carried forward, which applies to the whole United Kingdom, is not the appropriate way to deal with this. However, I recognise that there is a broader issue here which the Treasury has wrestled with over a number of years.
Lord Forsyth of Drumlean
Again, I struggle to see the logic of the Government’s position. Throughout the course of today, we have heard how this is about increasing accountability and ensuring that the Scottish Government raise more of the resources that they need for the financial commitments they make.
I find it odd to compare the position of the Scottish Government after the Bill is fully implemented with a government department. We are not talking about a government department, although the Treasury appears to be treating them as if they were. If the Scottish Government decide to increase income tax by 5 per cent to fulfil some commitment to increase nursery education, or whatever, and if at the end of the financial year they find that they have been able to implement that policy in an efficient and effective way, I do not see why the Treasury should be able to claw back some of that money and why they should not be able to carry it forward to use in subsequent years. Why does the Treasury need to keep control of that matter? It already has control over the general macroeconomic position. It is controlling the borrowing. I do not see the issue. I can see how the high priests in the Treasury have brought down their tablets of stone and said, “We have always done it this way. Therefore we have to do that”, but it is the Minister and his colleagues who are proposing that revolutionary change to the financing of the Scottish Parliament.
My noble friend is absolutely right: the Treasury has thought about this and resisted it for years. That is why every year we see money being squandered and wasted at the end of the financial year to spend the budget because it gets clawed back otherwise. I fully accept that my amendment may not be the best way to achieve the right result, but I ask my noble friend to consider bringing forward his own amendment, which would be technically effective and allow for carryover from one financial year to another. I do not really understand why that should be a problem, given the model and how he has described the responsibilities of the Scottish Parliament.
There is a separate issue, which relates to revenues which go into the Consolidated Fund in Scotland and the issue of assigned revenues for particular things such as fines. It is too late to start a debate on that, but my noble friend has given me some ideas for later stages of the Bill. It does not seem such a foolish idea to me, if the purpose of the exercise is to make the Scottish Parliament more accountable for its actions by making more of its revenue arise from its policies in Scotland, to assign some of those revenues and reduce the block grant accordingly.
I can see that there might be difficulties. It might encourage people to impose fines more enthusiastically than would otherwise be the case, but in terms of the general philosophy—I am trying to tune into the Government's approach to devolution—it seems a bit of a contradiction that my noble friend is so resistant to provision for carryover. Entirely accepting that my amendment may not be well drafted, is my noble friend prepared to bring forward his own amendment allowing for some carryover by the Scottish Government if they wish it? That would encourage proper fiscal behaviour, which I should have thought that the Treasury would welcome.
Of course, what the Treasury cannot bear is losing control. You can see that throughout the Bill. The rhetoric is all about how we are making them accountable, but everywhere we read, “You cannot do this until the Treasury has agreed this, that and the other”. I appreciate that when he goes back to his department, my noble friend will be surrounded by the high priests of the orthodoxy of the Treasury telling him that this could not happen, but this is a great opportunity to set a new style of government in Scotland, and I should have thought that carryover would be widely welcomed. This practice certainly leads to the most common complaint made about all public bodies, not just in Scotland but throughout the United Kingdom, so perhaps I could have one more go at asking my noble friend whether he will go away and think about this. If nothing else, it would be an amusing discussion for him to have back in his department.
Lord Sassoon
As I have already explained to my noble friend, the Treasury—we have one former Chief Secretary here—has looked at and experimented with giving flexibility to departments and devolved Administrations, so it is a topic that comes and goes and will continue to be live. However, I cannot give my noble friend any particular cause for hope that some new orthodoxy will be handed down in relation to this Bill. Even if it were, as I said, I do not think that the mechanism that he suggests of tying up cash in a Scottish Consolidated Fund is the right one. It is a broader question about the flexibility that the Treasury allows departments. The Treasury is not closed in its thinking, because it has allowed carry-forwards on different conditions in the past and will continue to think about that.
Lord Forsyth of Drumlean
I shall not pursue this matter ad nauseam but I have to say to my noble friend, very politely, that Ministers are there to instruct their departments, not to reflect what their departments think and say. If my noble friend thinks that carryover for the Scottish Parliament is a bad idea, that is fair enough, but one would like to know why it is a bad idea and how it does not fit into the Government’s overall view of their approach to devolution. We have heard the argument that the Treasury has been innovative and has allowed this and that, but this Bill is supposed to be about freeing people from those constraints and making them accountable to their voters. I am a bit disappointed that my noble friend is simply telling me what the Treasury thinks. I want him to go back and change the thinking in the Treasury in order to ensure that I, as a taxpayer living in Scotland, now and in the future get better value from my money which is spent by the Scottish Parliament.
I can see that if I press on with this, my noble friend will just get up and say, “As I have already told you”. Therefore, if I may, I shall return to this at a later stage with an amendment that is more carefully drafted. I beg leave to withdraw the amendment.
“Convention rights and EU law: role of Advocate General in relation to criminal proceedings
(1) The Criminal Procedure (Scotland) Act 1995 is amended as follows.
(2) For the italic heading before section 288A substitute “Convention rights and EU law compatibility issues, and devolution issues”.
(3) After that heading insert—
“288ZA Right of Advocate General to take part in proceedings
(1) The Advocate General for Scotland may take part as a party in criminal proceedings so far as they relate to a compatibility issue.
(2) In this section “compatibility issue” means a question whether a public authority has acted (or proposes to act)—
(a) in a way which is made unlawful by section 6(1) of the Human Rights Act 1998, or(b) in a way which is incompatible with EU law.(3) In subsection (2)—
(a) “public authority” has the same meaning as in section 6 of the Human Rights Act 1998;(b) references to acting include failing to act;(c) “EU law” has the meaning given by section 126(9) of the Scotland Act 1998.”(4) Section 288A (rights of appeal for Advocate General: devolution issues) is amended as follows.
(5) In the heading, before “devolution issues” insert “compatibility issues and”.
(6) In subsection (1) omit “in pursuance of paragraph 6 of Schedule 6 to the Scotland Act 1998 (devolution issues)”.
(7) For subsection (2) substitute—
“(2) Where the Advocate General for Scotland was a party in pursuance of paragraph 6 of Schedule 6 to the Scotland Act 1998 (devolution issues), the Advocate General may refer to the High Court for their opinion any devolution issue which has arisen in the proceedings.
(2A) Where the Advocate General for Scotland was a party in pursuance of section 288ZA, the Advocate General may refer to the High Court for their opinion any compatibility issue (within the meaning of that section) which has arisen in the proceedings.
(2B) If a reference is made under subsection (2) or (2A) the Clerk of Justiciary shall send to the person acquitted or convicted and to any solicitor who acted for that person at the trial a copy of the reference and intimation of the date fixed by the Court for a hearing.”
(8) In subsection (6) after “(2)” insert “or (2A)”.”
“Convention rights and EU law: criminal appeals to the Supreme Court
(1) The 1998 Act is amended as follows.
(2) In section 57(3) (EU law and Convention rights: excepted acts of the Lord Advocate) omit the words after paragraph (b).
(3) In paragraph 1 of Schedule 6 (devolution issues), after sub-paragraph (f) insert—
“But a question arising in criminal proceedings in Scotland is not a devolution issue if it is a compatibility issue within the meaning of section 288ZA of the Criminal Procedure (Scotland) Act 1995 (right of Advocate General to take part in proceedings).”(4) The Criminal Procedure (Scotland) Act 1995 is amended as follows.
(5) After section 288A insert—
“288AA Appeals to the Supreme Court: compatibility issues
(1) For the purpose of determining any compatibility issue an appeal lies to the Supreme Court against a determination in criminal proceedings by a court of two or more judges of the High Court.
(2) On an appeal under this section—
(a) the powers of the Supreme Court are exercisable only for the purpose of determining the compatibility issue;(b) for that purpose the Court may make any change in the formulation of that issue that it thinks necessary in the interests of justice.(3) When it has determined the compatibility issue the Supreme Court must remit the proceedings to the High Court.
(4) In this section “compatibility issue” has the same meaning as in section 288ZA.
(5) An appeal under this section against a determination lies only with the permission of the court that made the determination or, failing that permission, with the permission of the Supreme Court.
(6) An application to the High Court for permission under subsection (5) must be made—
(a) within 28 days of the date of the final determination of the proceedings or, as the case may be, the date of the determination on the reference under section 288A(2A), or(b) within such longer period as the High Court considers equitable having regard to all the circumstances.(7) An application to the Supreme Court for permission under subsection (5) must be made—
(a) within 28 days of the date on which the High Court refused permission under that subsection, or(b) within such longer period as the Supreme Court considers equitable having regard to all the circumstances.”(6) Section 288B (appeals to the Supreme Court) is amended as follows.
(7) For the heading substitute “Appeals to the Supreme Court: general”.
(8) In subsection (1)—
(a) after “under” insert “section 288AA of this Act or”;(b) omit “of a devolution issue”.(9) In sections 112(6), 121(5)(a), 121A(5), 122(4) and (5) and 177(8), after “under” insert “section 288AA of this Act or”.
(10) In section 124(2)—
(a) after “Part XA” insert “and section 288AA”;(b) after “appeal under” insert “section 288AA of this Act or”.”
Lord Foulkes of Cumnock
“The civil service in Scotland
(1) The 1998 Act is amended as follows.
(2) In section 51 (the civil service) after subsection (4) insert—
“(4A) The Constitutional Reform and Governance Act 2010 is amended as follows.
(4B) In section 5, after subsection (2), insert—
“(2A) Any code of conduct covering civil servants who serve the Devolved Scottish Government must make clear that advice given to Scottish Ministers by civil servants in Scotland should be limited to devolved matters and should not concern reserved matters.”””
Lord Foulkes of Cumnock
My Lords, this amendment deals with the Civil Service in Scotland. It says:
“Any code of conduct covering civil servants who serve the Devolved Scottish Government must make clear that advice given to Scottish Ministers by civil servants in Scotland should be limited to devolved matters and should not concern reserved matters”.
That might be a bit draconian, and obviously some account needs to be taken of where reserved and devolved matters overlap to enable civil servants to advise Ministers on that. However, the amendment arises—and I say this in particular to those who are not from Scotland—from a real controversy. A huge furore has arisen in Scotland over the way in which two successive senior civil servants—the Permanent Secretaries Sir John Elvidge and now Sir Peter Housden—have effectively gone native and are advising the SNP Government on how they can achieve their policy to break up Britain.
I do not see that it is any function of members of the British Civil Service—they remain members of the British Civil Service—to advise a devolved Government on how to achieve their political aim of breaking up Britain. They are there to advise and make sure that the education service is as efficient as possible, that social work is carried out effectively, that the NHS works as well as possible and that the legal system is properly administered. That is a huge responsibility for the head of the Scottish Civil Service. That is what he should be doing—getting on with that and advising Ministers responsible for education and Ministers for health on those responsibilities. Instead they seem to be accepting the SNP notion that the Scottish Government are not just a devolved Government but effectively already a quasi-independent Government. Just as the First Minister assumes a great deal about the Scottish Government and implies that they can and should operate like an independent Government, they have been advising them in relation to that.
To give a brief indication of the kind of furore that has arisen, and I shall be brief, I will quote from one or two of the Scottish newspapers. First, Sir John Elvidge retired last year as Permanent Secretary. The Scottish Express stated:
“The row over alleged political bias in the Scottish civil service deepened yesterday, after the country’s former top mandarin claimed that his work behind the scenes contributed to the SNP’s election win”.
He claims that as a result of his work as a supposedly unbiased civil servant—after all, that is supposed to be the ethos of the Civil Service—he helped the SNP to win the election.
Sir John Elvidge, who stood down as Permanent Secretary last year, wrote a glowing article in praise of the nationalists. Is that non-political? Is it carrying out a non-political role to suggest that he helped Alex Salmond to stay in power, contributing to his political success? Sir John Elvidge out of his own mouth condemns himself by claiming part of the SNP’s and Alex Salmond’s successes.
Lord Forsyth of Drumlean
My Lords, I have considerable sympathy for this amendment. When I was in the Scottish Office, I was not exactly remiss in trying to push forward my agenda. I suspect that most of the civil servants did not fully share that agenda, but in all the time I was there I was hugely impressed by the professionalism that was shown.
It is a pity that the noble Lord, Lord Robertson, is not with us this evening. He once complained about me for politicising the Civil Service because I had issued a press release that contained the phrase “tartan tax”. When the press release was done—and it was drafted by an official, the head of the communications department, Liz Drummond—and it came to me, I said, “We cannot say ‘tartan tax’ in an official press release”. She said, “No, it is fine”. I asked her to check with the Permanent Secretary, who thought it was fine. The press release went out. George Robertson as he then was complained to the Cabinet Secretary, now the noble Lord, Lord Butler, and a Member of this House. The Cabinet Secretary came to the conclusion that it was political and should not have been put in the press release, and I was given a wigging.
The conventions then were that if the Cabinet Secretary or the Permanent Secretary took the view that something was political and not ministerial, you obeyed that view. That is very precious. I have to say that under Labour the information departments were a bit politicised. In the end that was very damaging to government. When I was in the Scottish Office, if the Government said something, the Scottish media—who were not my biggest fan club, I have to say—would believe it if it came from the Scottish information office, but if it came from me they thought that might have some gloss, spin or angle on it, or that some kind of plot was afoot.
The moment you allow that line to be crossed, which appears to be happening in the Scottish Government, where the Civil Service is not seen to be, like Caesar’s wife, beyond reproach and impartial, ultimately that is very damaging to the process of government. Although it may be attractive in the short term for Mr Salmond and his colleagues to use the Civil Service in this way, in the end it will damage them. The best civil servants are those who turn up at meetings and say, “You can’t do this for these reasons”. They will argue the case, accept a robust argument and give good, impartial advice.
I am horrified by some of these stories, although my experience of the Scottish press is that you cannot always take as gospel everything that you read. However, there certainly have been enough examples. The blog which the Permanent Secretary has been running in the Scotland Office is truly extraordinary. One of his blogs advised his civil servants to see a play about an English army occupation in medieval Scotland, which he said speaks to us of our present condition. I do not know what is going on inside his department. Nothing about the condition in Scotland today is equivalent to that. That the Permanent Secretary should be doing that is, as I have said, quite extraordinary and a world apart from the Civil Service as I remember it.
It is a very sad thing that the Prime Minister has allowed the head of the Civil Service to be separated from the role of Cabinet Secretary. Having a strong head of the Civil Service as Cabinet Secretary whose job it is to maintain the integrity of the Civil Service system and to resist the inevitable pressures that come from Ministers to push the machine to the limits of what is appropriate, given their political agenda, is an important part of our system and one that is clearly being undermined.
As we have seen through the First Minister’s conduct towards the judges, he has little respect for conventions. If any of my Ministers had attacked a judge in public—my goodness me, I am sorry that the noble and learned Lord, Lord McCluskey, is not in his place but he gave me plenty of cause to respond at times—we took the view that you do not attack judges and you certainly do not attack them in very strident terms, as the First Minister did. Something is going very wrong with the guidance that has been given to Ministers on how they should conduct themselves in office and the guidance that has been given to senior civil servants. That is important.
Whether we end up with an independent Scotland or not, an independent Scotland should maintain that separation. It is absolutely vital to the good governance of Scotland and to the operation of our democratic system. I think that—I nearly said my noble friend—the noble Lord, Lord Foulkes, in moving this amendment is drawing attention to something very important. I hope that my noble friend will consider if not adopting this amendment then putting some provisions in the Bill, which after all deals with the powers and responsibilities of the Scottish Parliament, to enable some kind of redress if what we have seen happening in Scotland continues to happen and is not put back on the straight and narrow to ensure that the conduct of the Civil Service is appropriate to its role.
Lord Sewel
My Lords, normal service has roughly been resumed. Having spoken against the proposition put by my noble friend on the last amendment, I am now right with him. His contribution touches on two issues. One is the actual behaviour of civil servants in aligning themselves with a particular political agenda, and the other is the more nuanced issue of how civil servants should behave in a devolved structure. They are slightly different. On the first one, I would have thought it preferable that a civil servant, certainly a senior civil servant, should say nothing in public on any contentious political issue at all. They should say and do nothing that would make it impossible for that person to work with an incoming Administration. If we get that polarisation of politicians and civil servants divided on one side or the other, we would be moving towards an American system, which I think is to be avoided at all costs.
I want to say more about the role of civil servants in a devolved system. Of course one says immediately that their role is to support Ministers, engage in policy development and do all those things that, on the whole, we know they do extremely well. But devolution brings a unique and arcane issue to the fore. We have not faced it before because we have had a United Kingdom Government, but now with devolution the issue that comes into play is that of vires. The question is this: to what extent and how should any civil servant advise a Minister on a policy area that is outwith the vires that he enjoys? That is an important and sensitive issue to try to tease out.
I do not think that the amendment as it stands can work because the 1998 Act clearly indicates that there is a mechanism by which reserved powers can be devolved to the Scottish Parliament, and in that circumstance there would have to be discussions between Scottish Ministers and civil servants on a devolved matter, so it is not quite as simple as I and my noble friend thought initially. However, in Schedule 5 to the 1998 Act we find that the constitution is a reserved matter, as is,
“the Union of the Kingdoms of Scotland and England”.
It would seem that the senior civil servant in Scotland is giving policy advice and dealing with policy development in that area. So if it is good for that, is it good for other areas of the devolved agenda? I turn to just one, that of defence. The Act states:
“The following are reserved matters … international headquarters and defence organisations”.
One of the defence organisations is NATO. Would it be right and proper for a civil servant in Scotland to advise SNP Scottish Ministers on how they could secure their policy objective of Scotland no longer being a member of NATO? That is a question which I think ought to be asked, and for a whole number of other major issues in the reserved areas it has to be asked whether it is proper in any sense for a civil servant to give advice on how the policy of the Government and the Parliament that properly have responsibility in that area should be thwarted. Just think of what would happen the other way around. If it became known that civil servants in Whitehall departments were advising their Ministers on how they could undermine Ministers in Scotland, it would be a constitutional outrage.
I recognise that this is a difficult and sensitive subject, but it is one that we will have to face up to and, it is hoped, we will be able to secure a resolution that proper discussion should take place, but not something that is aimed at absolutely undermining the devolution settlement itself.
Lord O'Neill of Clackmannan
My Lords, I congratulate my noble friend on his amendment. Even if it is defective, it is important that this issue gets raised. I do not have experience of ministerial office, but for 10 years—and some years before that, even—I chaired a Select Committee in which we had civil servants being asked leading questions, difficult questions and sometimes very uncomfortable ones. By and large, however, we never had any attempt to hide behind some kind of political obfuscation. We at no time felt that they had assumed a role which involved the defence of their Minister beyond reasonable bounds or with a degree of loyalty that, frankly, the individual politicians did not merit.
Equally importantly, they were able to make quite clear that they represented continuity in government, which the viscidities of political change left in a number of respects unaltered. By that, I do not mean that they were standing in the way of change, but in the period after a Government are elected, when Minsters are finding their feet, or when new Ministers are appointed, it is to the decency and honesty of the Civil Service that you look for that degree of party-free continuity. If that is going to be endangered at a time of political uncertainty in Scotland, then, to my mind, it has to be spoken about.
We tend in this country not to hang civil servants out to dry in the way that my noble friend has done this evening, or repeat the stories which have appeared in the press. While I would not always necessarily regard the sources which my noble friend relied upon this evening as the most accurate, the fact is that there are remedies if misrepresentation is taking place. None of these remedies would appear to have been exercised, so we have to say that, to all intents and purposes, what has been said here this evening is true. Therefore, it raises quite serious problems. At the moment in Scotland, there is a sense in which we have a Civil Service which is apparently almost craven at the top, at least in part, in its willingness to assist the separatists in their enterprise. Not only that, but I am very sad that the composition of the Select Committees in the Scottish Parliament, which reflects the distribution of votes and seats—as is perfectly correct—seems to regard loyalty to the Government as more important than loyalty to the facts. So we are getting a succession of reports which reflect the political bias of the individuals rather than the weight of evidence which the committees have had presented before them. You get a degree of difficulty with the positions being adopted by senior civil servants, and at the same time a lack of effective criticism from the organs of Parliament which are supposed to be keeping them in line.
In the other place, we have a reasonably effective Parliamentary Question system. It has to be said that there is a lot of grandstanding and theatre about it. If you want to rigorously interrogate Ministers or anybody else involved in the political system of our country, the Select Committee is far and away the most effective means of doing so.
In Scotland at the moment, we have a transition from a unified system of public service to one which is, to an extent at least, split off from the rest of the UK. I am not saying that, in technical terms, the wages, the conditions and the career opportunities are not still there, but it is fair to say that, prior to devolution, there were career development avenues which individual civil servants could take advantage of. They could have periods in the Treasury or in English, or sometimes British, departments where they were able to compare and contrast the manner of working. I am not certain that that is given quite the weight in the Scottish Executive that it once enjoyed in the old-style Civil Service. If it is not, as I suspect, it is creating a mood within Scotland whereby it does not need to think outside the Scottish box, either for solutions or for Civil Service priorities.
This debate is an opportunity to issue a wake-up call to the Scottish Civil Service and say, “You are still part of a United Kingdom. The leadership of your organisation should be thinking not just about what is happening within Scotland and the areas of responsibility”. There are areas of overlap, but that does not necessarily mean that the Scottish Civil Service has to say that what happens outside of Scotland does not matter. We have to give some weight to the degree of overlap, but no less weight to those areas of sensitivity. I have spoken previously about the apparent contradiction of having an energy policy for the United Kingdom which in Scotland precludes the prospect of nuclear power. If a Minister was to refuse a planning application, I presume that it would be on the basis of Civil Service advice—or perhaps it would not; we do not know. At the moment, I would be a wee bit worried about the balance of the evidence presented before the Minister if Scotland was so hell-bent on preventing nuclear weapons. Equally, on the further stages of the independent deterrent, if we are to have within the United Kingdom the capacity for the nuclear submarines to be docked in the west of Scotland, these facilities will need upgrading, planning changes and the like. If that is going to happen, can we be sure that the message that gets through is that the planning applications stand up quite clearly? That is if they do—if they do not, it is equally the obligation of the civil servant to be straight about it. But if we were to have the frustration of areas of national defence on the basis of spurious advice relating to planning applications and the like, we would have serious grounds for concern.
We might have seen fit this evening—or tonight, because we are nearly at 10 pm and there seems no enthusiasm to finish the proceedings, so I will continue for a minute or two more—to have counted the House, and the Government might have lost everything that they have got so far. While some of us have been talking and responding in dialogue with people on other sides of the Chamber, the power was in our hands if we had wanted to use it to have screwed up the whole proceedings. People seem to forget that in the rather cavalier manner in which they have allowed this evening’s proceedings to go on beyond reasonable bounds.
I return to the point that I want finally to make. The strength of our Civil Service has been in its independence and its continuity. Its independence from political interference on the one side and its reluctance to get involved in politics on the other have meant that, in times of political and constitutional uncertainty, the Civil Service, by and large, has been able to sustain continuity. Nearly two years ago, when we had that brief interregnum between the previous Labour Government and the coalition, it was to the civil servants that people looked for advice; it was to the Executive that the politicians looked for guidance and support. In a constitutional crisis of the kind that could arise in Scotland, either as a consequence of a referendum or a change of Government, I am not sure that there would necessarily be a seamless transition from one set of conditions to another that political change of a radical kind might bring about. Many of us are uncertain about that and about the quality of the advice that would be made available to politicians of all political parties in Scotland given the present irresponsible attitude that is being adopted by people who should know better and whose training should have provided them with an understanding of the sensitivities that they sadly seem to have ignored at this stage.
Lord Browne of Ladyton
My Lords, I did not expect to be on my feet at 10 o’clock at night contributing to the debate on this amendment. The issue that has raised its head in our discussions in this Committee over the course of the day is the apparent failure to organise its affairs in a way that is at least predictable if nothing else. I will not report all the conversations that I have had because apparently it would be a breach of the protocol of the usual channels. I am not part of the usual channels, although I have been dragged into them repeatedly.
I have tried to get a predictable order into the way in which these matters are dealt with so that people could have that communicated to them. Over the course of the day—as, indeed, over the course of this Committee—I have had clear understandings that matters would be dealt with in a particular way only for them to be changed, sometimes within minutes, sometimes within hours. There was a flurry of activity just before 10 o’clock, which was far too little too late, in an endeavour to manage the timing of affairs in such a way that would be respectful not only to the contributions that needed to be made but to those who serve and support this House and your Lordships and that would allow them to make sense of the way in which this work is being done.
I have now given up, by and large, trying to reach any kind of agreement on how matters can be dealt with, and I am extremely disappointed that my best endeavours have not been able to introduce some sort of sense into the proceedings. It was my experience in another place that if there were agreements and people stuck to them, and they were communicated throughout the House, then, by and large, we could control the business. I am defeated by the way in which business is organised in this House. I have tried to achieve that repeatedly and it has been a great disappointment to me.
Turning quickly to the amendment because of the time—and, because of the rules of the House, I understand that this time of itself generates another momentum in this House that is unwelcome—I am grateful to my noble friend Lord Forsyth for his comments and for the amendment.
Lord Forsyth of Drumlean
It is in the name of your noble friend Lord Foulkes.
Lord Browne of Ladyton
I am sorry; it is. I have been here too long now; I am too tired and that is it. It is an indication of where we all are. It is probably why we should not debate matters as important as this after the hours we have been on our feet, deprived of food, in here.
In any event, my noble friend has done us a favour: he has exposed an issue that is of importance to the people of Scotland. With all due respect, it is important not because it is an issue of controversy—many issues of controversy are not important—but because it is important to the people of Scotland. It is important for this reason: good governance in our constitution depends on the impartiality of the Civil Service. Those who have had the privilege and experience of serving in the Executive know—we all know—that the Civil Service is there to serve the Government.
Of course, as the noble Lord, Lord Forsyth, identifies, on some occasions that leads to accusations of politicisation. That is inevitable and I can think of many such accusations during the time when we were last in government. They were always rebuffed and arguments were always made that the Civil Service was simply doing its job. However, there was always a sense that when these issues got to a certain pitch, the Civil Service itself ensured continued impartiality. The nature of the Civil Service’s relationship to the constitution requires, in a sense, that the service polices itself. A number of distinguished former civil servants, including former Cabinet Secretaries, are Members of your Lordships’ House. It is a great pity that none of them is here to contribute to this debate and to explain to those of us who have not been civil servants how these issues ought to be dealt with in the Civil Service codes; and whether the experience in Scotland, and the apparent failure of the Civil Service to be able to respond to these concerns in a way that reassures people that this impartiality is being protected, has been run properly or not.
Lord Forsyth of Drumlean
I agree with the noble Lord that it would have been marvellous to have contributions from the noble Lords, Lord Butler and Lord Armstrong, but I should think they are probably making their cocoa and going to bed. The reason that we are not able to devote attention to these things is because we seem to be engaged in this sort of endurance exercise. I must say that carrying out this business, at this time of night, in this way, is the most persuasive argument I have heard for devolution since we started discussing the Bill.
Lord Browne of Belmont
I have no idea where distinguished Members of this House might be at this time of night—but, certainly, those who have sense are not here. My point is that this matter needs to be dealt with within the existing structures, in which we have had confidence for many years and which have been proof to these sorts of challenges in the past. Consequently—and I do not think that on this occasion my noble friend Lord Foulkes will be disappointed in me—I cannot support his amendment. However, the nature of the short debate that we have had has revealed the need for some broader discussion than we get in some newspapers in Scotland and some reassurance from the Civil Service itself that it will be able robustly to address these issues, or at least to explain in a persuasive way that the impartiality of the Civil Service has not been undermined.
Finally, I remind my noble friend Lord Foulkes of Cumnock of the debate on his Amendment 51, which sought to amend Clause 27 by constraining discussions between representatives of the devolved Administration —the Scottish Parliament and Scottish Government—and foreign Governments. He was, on that occasion, persuaded that the strictures that he was seeking to impose on the representatives of the Scottish Government could not have been policed and would not have been realistic. I suspect that if we had time to go over the criticisms of his current amendment, he would have come to that conclusion again. I just remind him of how he was persuaded by my noble and learned friend Lord Boyd on that occasion and trust he will get back into that state of mind when it comes to responding to this short debate.
Lord Wallace of Tankerness
Picking up where the noble Lord, Lord Browne, left off, to be fair the noble Lord, Lord Foulkes, did say in moving his amendment that perhaps it was not necessarily one that he would wish to push. He recognised too that there would be some occasions when it would be appropriate for civil servants in the Scottish Government to engage in issues that were reserved. Indeed, the noble Lord, Lord Sewel, highlighted the fact that with Section 30 orders—one of the early ones was on railways—that sort of engagement would not be unreasonable on that basis.
Nevertheless, the noble Lord, Lord Foulkes, has generated a debate which I am sure will be noted beyond the walls of this Chamber. I echo what was said by the noble Lord, Lord Browne, and my noble friend Lord Forsyth, about the very high quality of the Civil Service, which I have experienced as a Minister in the Scottish and United Kingdom Governments. We now have a position whereby a statutory basis for management of the Civil Service was set out in the Constitutional Reform and Governance Act 2010, an important measure. Civil servants working for the Scottish Government and the Welsh Assembly Government are all part of the United Kingdom Civil Service, and, crucially, the Civil Service Code forms part of civil servants’ terms and conditions of service. The code sets out the core values of integrity, honesty, objectivity and impartiality, and the standards of behaviour expected of civil servants. As the noble Lord, Lord O’Neill, observed, the continuity that civil servants have been able to bring, not least in times of uncertainty following the election in 2010, has been quite remarkable, and one pays tribute to them for that.
It is the job of civil servants to support the elected Government of the day, and the Civil Service Code recognises the fact that civil servants working for the Scottish Government and the Welsh Assembly Government are required to support those Governments. As the noble Lord, Lord Sewel, said, in the area of devolution tensions are inevitable. Likewise, civil servants working for the United Kingdom Government are able to advise their Ministers on matters which are the responsibility of other Governments. It is important that civil servants recognise their obligations under the code and support their Ministers to the best of their ability, even in politically sensitive areas, when Administrations have different policies and different priorities. They must ensure that they remain politically neutral and avoid public advocacy of political views.
In the points made by the noble Lord, Lord Sewel, he grasped the sensitivity of this issue and raised some important points that will not be resolved in this debate or this Bill but are important and have to be considered. I was thinking of an example whereby the Scottish Government have executive devolution responsibilities for renewable energy. Likewise, matters of transmission charges are a responsibility for the UK Government. But it would be very awkward if not impossible for the Scottish Government to make decisions on renewable energy without having some advice and support from their civil servants about implications for transmission charges, so it is not always easy to disentangle respective responsibilities.
Comment has been made on various issues that have been highlighted publicly. The noble Lord, Lord O’Neill, asked about the present Cabinet Secretary, who has been fully cited on these issues and has recently visited Scotland. I am advised that he reiterated that it was appropriate for United Kingdom civil servants to work to support their Ministers in pursuing their objectives, even though that may mean in an era of devolution the pursuit of a different policy aim when Administrations have different objectives. It is important to reiterate once again that one great strength of the Civil Service, which has come through in this debate, is that both of these things—objective support for Ministers and political impartiality—should be taken seriously.
I do not intend to comment on the specific wording used by Sir Peter in his recent communications to staff. Whether or not a particular civil servant has acted in accordance with the code is not ultimately a matter for Ministers to determine; it is an internal issue for the Civil Service, and it would be improper for me to go over that line. What is essential is that civil servants support their Ministers firmly within the parameters set by the Civil Service Code.
Lord Maclennan of Rogart
Will the Minister consider whether the mode of investigation of alleged breaches of these codes of impartiality and independence could be improved? This is a continuing and growing anxiety across a wide spectrum of those involved in public affairs. Other professionals have modes of inquiry which enable the cases to be argued and a decision to be made. I think for example of the General Medical Council, which will decide whether or not there has been an impropriety. A purely hierarchical approach to the Civil Service on matters of this kind is not entirely adequate. We need to discuss, perhaps with the First Division Association, whether it would be encouraged to feel that its service would be greatly strengthened by there being such a procedure for looking at complaints which are made by affected members or the public generally.
Lord Wallace of Tankerness
My Lords, my noble friend raises an important point which goes beyond Scotland. It is a fundamental one and I cannot give him the full response that a profound question such as that demands, but clearly he has put an issue on the table and I am sure he may wish to raise it further.
Lord Foulkes of Cumnock
My Lords, I am grateful to everyone who has participated in this very good debate. It underlines what a number of us have said increasingly, as time goes on: it is a pity that we are debating things of such importance so late on a Thursday night. If we had had it at some other, more appropriate time people such as former heads of the Civil Service could have participated and advised us.
Lord Forsyth of Drumlean
If the noble Lord does not divide the Committee, he could put an amendment down and we could talk about it again at a decent hour at a later stage of considering the Bill.
Lord Foulkes of Cumnock
My Lords, what a very helpful suggestion indeed. I will immediately investigate it. I agree with the noble Lord, Lord Forsyth, absolutely: when I was a Minister in both DfID and the Scotland Office, he will not be surprised that from time to time my civil servants came to me and said, “Minister, I think you are being a little political in what you are suggesting here. I cannot put out a statement on your behalf saying this. You will have to get your party to put it out”. They are absolutely right to do that and we all respected it. That is why it is deeply disappointing that that is not what seems to be happening in the Scottish Government.
I say to my noble friend Lord O’Neill that I did not want to hang civil servants out to dry. In fact, both of the civil servants who I mentioned had really hung themselves out to dry in what they said and put on record. Although I do not normally quote the Daily Mail, the Telegraph and the Daily Express—I take everything I read in those newspapers with a pinch of salt—they were quoting directly from some of the things that Sir Peter Housden had said and put into his blog, so it was something that you could believe.
I take again the advice of my noble friend Lord Browne of Ladyton in relation to this, as I did with my noble and learned friend Lord Boyd on a previous amendment. The wording of the amendment is defective, as the Minister pointed out.
Lord Foulkes of Cumnock
It is an order, and I accept the fact that it should be looked at again. The noble Lord, Lord Forsyth, suggested that we might take another look at it, and it might be that we could think about what the noble Lord Maclennan said. If some kind of objective look at serious complaints about the Civil Service’s lack of impartiality could be undertaken, Scotland might be a good place to start. That was a very good suggestion.
The only thing in the Minister’s reply that I was a little worried about—most of what he said was very good—was when he said, referring to the head of the Civil Service in Scotland, that it was okay for civil servants in Scotland to advise the devolved Government on different policy areas where the two Governments have different objectives. That needs to be looked at more carefully. In a reserved area such as the constitution, it raises some very serious issues if there are policy objectives that are not just different but totally contradictory and conflicting.
Before I withdraw the amendment, which I will, I just ask the Minister to consider taking the initiative to draw this debate directly to the attention of Sir Jeremy Heywood, who is now the Cabinet Secretary. I have the highest regard for him and think he might carefully consider some of the points that have been made and what action might be appropriate. I beg leave to withdraw the amendment.
Lord Forsyth of Drumlean
“Imposition of surcharges
The Secretary of State shall, by statutory instrument, make regulations requiring any Scottish Minister or member of the Scottish Parliament to pay a surcharge in the event of that person spending or causing to be spent public funds in excess of the amount that person is entitled to spend or cause to be spent by statute.”
Lord Forsyth of Drumlean
My Lords, some months ago I tabled Amendment 74, which would provide for some kind of sanction should Ministers in the Scottish Parliament act in a manner that is ultra vires. I was concerned that, following the considerable election victory by Mr Alex Salmond, there seemed to be something in the rhetoric to suggest that, because he had won an election, he had a mandate to do what he liked in the context of, for example, holding a referendum; and that if a referendum on independence was not within the powers of the Scottish Parliament, he had a mandate from the Scottish people. As I have reported before in this House, I understand that it was suggested to my right honourable friend the Chancellor of the Exchequer that if a referendum was properly conducted and held under the legislative provisions of Westminster, the First Minister would boycott it and instruct his officials to do so accordingly.
This seemed to highlight the fact that checks and balances on the behaviour of Ministers and Members of the Scottish Parliament might be lacking. Certainly, I know that the former Prime Minister Mr Tony Blair got into trouble for comparing the Scottish Parliament to local government. However, as Shirley Porter discovered to her considerable discomfort in Westminster, very serious sanctions apply in local government if elected members operate beyond their powers. I have tabled this amendment to tease out whether Ministers think that some kind of sanction or control would be appropriate.
I am sure that that applies to civil servants who are accounting officers and can be held to account by the Public Accounts Committee. It could be said that this does not apply to Ministers of the Crown, but there are sanctions that can be applied to them. I think we have lost the noble Lord, Lord Sewel. I may be mistaken but I do not think that the original Scotland Act provides for any sanction. I would be most grateful if my noble and learned friend could point me in the direction of some sanction, if indeed there is one.
This measure is not a means of achieving political control: rather, it follows on from the debate that we have just had. It is meant to ensure that what have been long-standing and well regarded conventions are accepted and operated, and that there is a sanction if that is not the case. I beg to move.
Lord Browne of Ladyton
My Lords, initially I had no sympathy at all with this amendment. I think that is a consequence of political conditioning because I am old enough to be of that generation in politics for whom the imposition of surcharges has a certain resonance that makes one react against them. I do not intend to go into all the reasons for that but those who are old enough to remember surcharges, or the threat of surcharges in the politics of Scotland, particularly in local government at one stage, may well remember why that is the case.
Secondly, I instinctively believe that the combination of audit and a PAC according to the Westminster model of government is the appropriate way to deal with these issues. Interestingly, today the Public Accounts Committee, under the leadership of Margaret Hodge, appeared to challenge elements of parliamentary accountability and called for powers to be developed that reflected the changed way in which we deliver services. Margaret Hodge made a very interesting speech today about that issue, which arose out of the controversy associated with the evidence given by civil servants in HMRC about tax deals.
For those two reasons I was instinctively opposed to this amendment because I think we have a very valued and flexible constitution in this country that can adjust to circumstances. Indeed, I have faith that the Auditor-General in Scotland and Scotland’s own accounts committee should be able to handle these issues, and that the appropriate sanction will be available. The appropriate sanction is the exposure, principally to the electorate, of what those in charge of public spending do with that spending. That is the traditional method by which we redress these issues.
I am told by my noble and learned friend that there may be ways of imposing financial penalties on members of the Executive who behave in certain ways, but I do not know the detail of that and I do not wish to speculate on it at the Dispatch Box. I listened to the noble Lord argue for his amendment in a measured way, anticipating that we would probably be able to resolve the example he gave of an improper use of funding for a matter that was outwith the vires of the Scottish Government. It is almost certain that we will find a way of transferring the power—even if temporarily—to the Scottish Government to run the referendum. I would like them to do that more quickly than they plan to do, but I am happy to respect their electoral mandate to administer and run that referendum, provided it is run in an impartial and fair way. I do not think, therefore, that the concern that immediately generated the amendment is likely to persist.
To the extent that the noble Lord raises an issue that will continue beyond devolution in Scotland, this is a matter to which I would like to hear the Minister’s response. Whether I veer towards support for some form of statutory regulation of behaviour, with consequences in the longer term, will be a function not just of the reasonableness of the noble Lord’s argument for the amendment but the response that I hear from the noble and learned Lord.
Lord Wallace of Tankerness
My Lords, I listened with interest to the contributions of my noble friend Lord Forsyth and the noble Lord, Lord Browne. We believe that the amendment is unnecessary because there is already a comprehensive code of legislation that makes detailed provision for the Scottish public finance regime. Safeguards and scrutiny are built into that legislation without the need for further provision to engage the Secretary of State, as proposed in my noble friend’s amendment.
Before I outline the relevant legislation, it is worth noting that, as a general principle—I think there is consensus on this—public expenditure must be authorised by statute or be reasonably incidental to that authorised by statute. This principle has been recognised and applied by the courts over many years. As the noble Lord, Lord Browne, said, the Westminster audit and Public Accounts Committee system had functioned well in keeping the Government up to the mark on their expenditure.
The Scottish Government and Parliament are creatures of statute, and expenditure out of the Scottish Consolidated Fund is regulated by the financial provisions in Part 3 of the Scotland Act 1998. This includes Section 65 of that Act, which provides that payments from the Scottish Consolidated Fund must be for the purposes of meeting expenditure of the Scottish Administration—that is, lawful expenditure of the Scottish Administration—or meeting expenditure payable under any enactment. Part 3 of the Scotland Act also paved the way for the more detailed public finance legislation set out in the Public Finance and Accountability (Scotland) Act 2000.
Section 1(1) of the 2000 Act provides that the use of resources by the Scottish Administration and other public bodies or officeholders whose expenditure is payable out of the Scottish Consolidated Fund for any purpose in any financial year must be authorised for that year by the Budget Act and not exceed any amount so authorised in relation to that purpose. This means that any use of resources by the Scottish Government must be for lawful purposes and also have its basis in and be authorised by the Budget Acts that are passed by the Scottish Parliament annually, much in the same way as Finance Acts operate here at Westminster.
In addition, Section 5 of the 2000 Act provides that sums may be paid out of the Scottish Consolidated Fund only in accordance with a credit granted by the Auditor-General for Scotland, and the Auditor-General must not grant such a credit if the proposed payment would not comply with Section 65(1) and (2) of the Scotland Act—that is, if the proposed payment is not for the purposes of meeting the expenditure of the Scottish Administration or meeting expenditure payable under any enactment.
Part 2 of the 2000 Act goes on to make detailed provision in relation to accountability and audit, and gives the Auditor-General for Scotland key functions in relation to auditing the accounts of Scottish public bodies, including directorates of the Scottish Government, and examining the economy, efficiency and effectiveness of these public bodies. Reports produced by the Auditor-General for Scotland in pursuance of these functions are laid before the Scottish Parliament and considered by its Public Audit Committee. The Auditor-General for Scotland is assisted and supported by Audit Scotland in the exercise of his functions in this regard.
I have given that brief description to illustrate the existing comprehensive statutory framework that is in place. The Scotland Act 1998 laid the foundations for that framework and anticipated that the Scottish Parliament would flesh out further detail in legislation, which it subsequently did in what became the 2000 Act. It would be inconsistent with the current scheme of devolution for the Secretary of State to be given a separate regulation-making power along the lines suggested.
My noble friend raised the issue of surcharging, which was also referred to by the noble Lord, Lord Browne. It is true that a system of surcharging was in place in local government regulation until the early years of this century. In Scotland, it was repealed by the Ethical Standards in Public Life etc. (Scotland) Act 2000. It was subsequently repealed in England following criticism in the Nolan committee's report on standards of conduct in local government. Although in theory it was intended to be a means of restitution, it did not achieve that purpose in practice and there were great difficulties in calculating the relevant sums. Therefore I do not believe that it would be an appropriate mechanism to graft on to the robust legislative code that is in place for checking spending by Scottish Ministers.
Both my noble friend and the noble Lord, Lord Browne, mentioned the issue of the referendum. The purpose of the Government’s offer under Section 30 orders is to ensure that a referendum can proceed on a proper legal basis and that the power for the work that needs to be undertaken by the Scottish Government in connection with a referendum would also be on such a basis.
I ask my noble friend to withdraw the amendment before I lose my voice.
Lord Forsyth of Drumlean
My noble and learned friend is losing his voice; Members of the House are losing their stamina; we are dwindling.
Lord Forsyth of Drumlean
Indeed, but I think it might be helpful if my noble and learned friend would indicate how much longer he proposes to go on with this, because the utility of the debate seems somewhat limited as we lose people one by one.
That was a very helpful explanation. It shows how out of date I am that I had not realised that the local government surcharge provisions had been withdrawn. I accept his point. If the Whip is suggesting that we adjourn shortly, I do not wish to interrupt that conversation.
I have one question for my noble and learned friend, which relates to the point on the referendum. I realise that that is a sensitive subject. If, for the sake of argument, the First Minister had decided to go ahead with the referendum without having the relevant legal powers and had spent £10 million on it, what sanction would be applied, and by what mechanism? In other words, can my noble and learned friend translate what he has just read out into what it would mean in practical terms?
Lord Wallace of Tankerness
My Lords, my noble friend indicated that this is sensitive ground. If he cares to read the lecture that I delivered at Glasgow University on 23 January, he will note what I said about the importance of the rule of law and Governments operating within it. Ultimately, if Governments choose to step outside the rule of law in a significant way, as the late Lord Denning said, no matter how high you are, the law is still above you. There would be a question over whether the expenditure would ever be made. Even at Westminster, there have been cases where action has been taken. If my memory serves me correctly, in the Pergau dam case a challenge to expenditure was brought in the courts and a finding made that that expenditure was not justified. I am not aware that any recovery was made from the Ministers who originally authorised the expenditure, but any further expenditure did not proceed.
Lord Forsyth of Drumlean
I am most grateful to my noble and learned friend. Of course I understand that there is an opportunity in the courts for outside parties to apply for a judicial review or to challenge Ministers who were acting ultra vires. In the context of a referendum being held illegally by the Scottish Parliament, that would be completely disastrous, especially as it would disrupt the whole process and would make it difficult for us to get a resolution on this question one way or the other.
Part of me—perhaps the cynical, less charitable part—thinks that the First Minister would not be particularly disappointed by such an outcome because it would avoid the inevitable result which I believe the Scottish people, with their good sense, will give in a referendum. I understand that. My question really related to whether the Members of the Scottish Parliament who had voted for this or the Ministers who had done it would be subject to any sanction. Is there any process for this? How would it operate?
Lord Wallace of Tankerness
My Lords, I am reluctant to speculate on that, other than to say that I think we will come back to the issue of referendums in our debates next week. The important point at the moment is to concentrate on the positive, which is ensuring that agreement is reached so that the referendum can proceed on a proper legal basis.
Lord Forsyth of Drumlean
I am most grateful to my noble and learned friend for dealing with this issue so carefully. I shall not press him on the referendum because I appreciate that it is an extremely sensitive matter. I understand the points that he made, which seem to cover the issue behind my amendment.
Perhaps I may say to my noble friend and to my noble and learned friend how much I appreciate the care with which they have dealt with the amendments during this session, which so far has run for 10 hours and more. I am sure they will also appreciate that those of us who tabled amendments for debate have used the time carefully to try to tease out a number of issues. I am looking forward to reading the Official Report over the weekend so that I can study some of the points that were made. On the basis of what my noble and learned friend said, I beg leave to withdraw the amendment.