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Ann McKechin (Glasgow North) (Lab)
1. What her policy is on tackling youth unemployment in Northern Ireland.
The Minister of State, Northern Ireland Office (Mike Penning)
Specific measures to tackle youth unemployment in Northern Ireland are the responsibility of the Northern Ireland Executive. The Government’s efforts to reduce the largest structural deficit in our peacetime history and set the country back on the path of sustainable economic recovery will attract growth and help young people throughout the United Kingdom.
Ann McKechin
Given that almost one in five young people in Northern Ireland are currently unemployed, is it not time for the Minister to consider a national insurance break for small employers, which are predominant in the private economy in Northern Ireland, to allow them to take on young people and get them back to work?
Mike Penning
There will be a statement, believe it or not, later in the day in which the Chancellor sets out our economic measures—the autumn statement. I know that the hon. Lady speaks in good faith and cares about this problem, but it is not something that suddenly happened when the coalition Government came into power, or when the Northern Ireland Executive came into power; youth unemployment started to rise quite quickly in 2004 when her Government were in power, and that was in a time of boom before it went bust under the last Administration.
Ms Margaret Ritchie (South Down) (SDLP)
Will the Minister say what discussions have taken place with Ministers in the Northern Ireland Executive, apart from the talks about corporation tax, about greater devolution of economic levers to give the Northern Ireland Executive greater authority in dealing with youth unemployment, which currently stands at one in 20 of the population?
Mike Penning
I meet Ministers in the Northern Ireland Executive regularly to talk about a range of issues. They have not requested the devolution of specific powers in this area, but if they do, we will listen to them.
Mr Gregory Campbell (East Londonderry) (DUP)
Youth unemployment is an escalating problem in Northern Ireland. Last week, I hosted an event with Invest Northern Ireland to give young people the skills that they need to get into employment. Does the Minister agree that young people who are unemployed and marginalised, particularly those in areas of deprivation, can fall prey to unacceptable activity? Will he join me in condemning the major and reprehensible decisions of two councils in Northern Ireland last week—Newry and Mourne, and Belfast—that could worsen the situation and send us down into a cycle of unemployment and deprivation, rather than lift us out of it?
Mike Penning
As you can imagine, Mr Speaker, I will not be drawn into comments on individual decisions taken by local authorities in Northern Ireland. However, it is not all bad news. There are in excess of 11,000 youngsters in apprenticeships in Northern Ireland on more than 100 apprenticeship schemes. That is good news for them and we should not denigrate the good work that they are doing.
Vernon Coaker (Gedling) (Lab)
First, will the Minister join me in condemning the violence in Belfast on Monday evening, which was wrong, unacceptable and without justification?
Does the Minister agree that young people will be the force behind further progress in Northern Ireland? What specific measures have he and the Northern Ireland Office asked the Chancellor to include in the autumn statement to tackle youth unemployment in Northern Ireland?
Mike Penning
The shadow Secretary of State is trying to draw me into territory that is way above my pay grade. Like the rest of the House and the country, I will wait to hear the autumn statement.
I join the shadow Secretary of State and shadow Minister in saying that what happened the other night was fundamentally wrong. Police and security officers were assaulted and battered while just doing their job. People may not have liked what was said and done in the council chamber, but it was done in a democratic way.
Vernon Coaker
From what the Minister has said, it appears that the Northern Ireland Office has asked the Chancellor to include absolutely nothing in the autumn statement to tackle youth unemployment in Northern Ireland. The Minister and the Secretary of State have to realise that the Government have a duty to young people in Northern Ireland that must be met. More than one in five young people in Northern Ireland are out of work. Westminster has a responsibility to act. There has been no action from the Government to date; are we to get nothing in the autumn statement later today? When will the Minister and the Government get a grip, not only on the economy in the rest of the UK, but on youth unemployment in Northern Ireland?
Mike Penning
The hon. Gentleman, who is a friend of mine, needs to get a grip on his comments and wait for the autumn statement. He will then find out whether we have done nothing or something. The autumn statement will clearly show what we have asked for and how much success we have had. Wait and see.
Fiona Bruce (Congleton) (Con)
2. What recent discussions she has had with the Northern Ireland Executive on attracting inward investment.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
Responsibility for inward investment is largely a devolved matter, but the Government have assured Executive Ministers that we will work closely with them and make every effort to help rebalance the Northern Ireland economy and secure inward investment.
Fiona Bruce
The “Lonely Planet” guide has rated Londonderry/Derry the fourth best city in the world to visit in 2013—the only UK destination in its top 10. Does my right hon. Friend agree that this could help boost tourism and investment in Northern Ireland and support the Londonderry-Derry 2013 UK city of culture programme?
Mrs Villiers
I am very grateful to my hon. Friend for that question. Derry/Londonderry will have a great year next year, with its UK city of culture designation enabling it to project on the world stage what a brilliant city it is. It is also hosting the Fleadh. Such events demonstrate that Northern Ireland is forward-looking, and a great place in which to invest. I was in Derry/Londonderry last week and I was particularly interested in the plans for Digital Derry and the boost that the chamber of commerce wants to give the local economy.
Dr William McCrea (South Antrim) (DUP)
One of the main tools used to attract business into the United Kingdom is regional aid. On future regional aid guidelines, will the Secretary of State support our efforts to have all of Northern Ireland eligible for regional aid, just as we support the UK Government’s efforts to allow support to continue for larger companies?
Mrs Villiers
I believe that it is important that Northern Ireland continues to be able to offer regional aid, given the history of its economy. I have met Arlene Foster to discuss how I can help the Northern Ireland Executive’s efforts to persuade the Commission, when it makes decisions on assisted area status, that the interests of Northern Ireland and its economy should be properly defended.
Mr Laurence Robertson (Tewkesbury) (Con)
Has the Secretary of State had a chance to look at the Northern Ireland Affairs Committee report, published last week, which identified air passenger duty as a stumbling block on the road to economic recovery in Northern Ireland? Will she consider accepting our central recommendation and discussing with the Treasury and the Northern Ireland Assembly the prospects of reducing air passenger duty on flights to and from Northern Ireland from Great Britain, or, preferably, removing that tax altogether?
Mrs Villiers
My hon. Friend’s report is strong and he is right to consider the importance of transport links. The Government moved swiftly when the Northern Ireland Executive requested devolution of long-haul air passenger duty. The possibility of reducing short-haul air passenger duty in future is made difficult, of course, by the record deficit that we inherited from Labour. However, the Chancellor is very much aware of the concerns about air passenger duty, and I have discussed the matter with Treasury Ministers on several occasions.
Mark Durkan (Foyle) (SDLP)
Coming back to the wonderful city of Derry or Londonderry, one of the best examples of inward investment is the Invista, formerly DuPont, plant in my constituency. It won that investment to be the only lycra-producing plant in Europe in worldwide internal competition within the company. Its ability to win future such investment could be compromised by proposed changes in the EU’s REACH—registration, evaluation, authorisation and restriction of chemical substances—legislation. Will the Secretary of State use her position to influence her ministerial colleagues here to ensure that, at the Member State Committee meeting next week, the UK resists those changes?
Mrs Villiers
I am happy to work with ministerial colleagues to ensure that we get the right outcome on REACH. I understand the hon. Gentleman’s concerns. Although the underlying purpose of that directive—to ensure that chemicals are handled safely—is laudable, it would be counter-productive if it destroyed jobs and enterprise and simply exported them outside the European Union. I will therefore press my colleagues to ensure that we get a sensible outcome on REACH, which will not have the damaging impact that the hon. Gentleman fears.
Lady Hermon (North Down) (Ind)
This is an unusual request, but I shall make it anyway. As part of the inward investment power of the G8 summit in Fermanagh next June, will the Secretary of State kindly meet my constituent, Mr Peter Meanley, who is a very distinguished craftsman and wishes to make beautifully glazed Toby jug replicas of all eight Heads of Government and State? It is an usual request, but will the Secretary of State please my constituent and the North Down MP by granting it?
Mrs Villiers
I would be happy to meet the hon. Lady’s constituent. It sounds as though he has an excellent project. Over the coming months, the Government will work hard to ensure that Northern Ireland gets the maximum possible benefits from the G8, which is an opportunity to showcase Fermanagh and the whole of Northern Ireland as a brilliant place to visit as a tourist and a brilliant place in which to invest.
Gareth Johnson (Dartford) (Con)
3. What recent assessment she has made of the security situation in Northern Ireland; and if she will make a statement.
David Rutley (Macclesfield) (Con)
6. What recent assessment she has made of the security situation in Northern Ireland; and if she will make a statement.
Mel Stride (Central Devon) (Con)
10. What recent assessment she has made of the security situation in Northern Ireland; and if she will make a statement.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
The Government are committed to doing all we can to keep people in Northern Ireland safe. The threat level in Northern Ireland remains “severe” but the Police Service of Northern Ireland and its partners are working with dedication and determination in their efforts to frustrate the attacks planned by terrorists.
Gareth Johnson
Northern Ireland is as much a part of the United Kingdom as Dartford, so does the Secretary of State share my deep disappointment that the Union flag will not fly continuously over Belfast city hall, and does she agree with the principle that no law should prevent the Union flag from flying anywhere in the United Kingdom?
Mrs Villiers
I fully appreciate the strength of feeling on the flying of flags, but nothing could possibly justify the scenes of disorder witnessed outside city hall in Belfast earlier this week. Yes, there are serious and significant sensitivities about flag flying, but these decisions must be taken on the basis of sound, reasoned discussions and democratic votes, and not as a result of mobs seeking to beat down the door of city hall.
David Rutley
Given the upcoming G8 summit at the Lough Erne hotel near Enniskillen, which will be important for the whole country and not just Northern Ireland, will my right hon. Friend assure the House that security plans are being drawn up to ensure that the summit is the success it truly deserves to be?
Mrs Villiers
I can give my hon. Friend that assurance. Planning is already very much under way. The Government are committed to working closely with the PSNI and its partners to ensure that the policing and security operations around the G8 are a success.
Mel Stride
As we have heard, Londonderry will be the city of culture next year. Will my right hon. Friend join me in congratulating the divisional commander of the PSNI, Mr Stephen Martin, on the exemplary way in which he and his officers have countered the terrorist threat locally so that we can look forward to a full cultural programme next year in that city?
Mrs Villiers
I certainly join my hon. Friend in that. I met PSNI officers from Derry/Londonderry just a week or so ago. They do an incredibly good job in very difficult circumstances with great bravery and dedication. They are determined to continue community policing close to the community. They will not compromise on that, but delivering it in the face of a continuing terrorist threat, and continuing attempts to target and attack officers, is extremely difficult. I am only too happy to join him in congratulating the police in Derry/Londonderry on the job they do.
Mr Nigel Dodds (Belfast North) (DUP)
The Secretary of State will agree that there can be absolutely no justification at any time for attacks on police officers or anyone, or for threats to elected representatives. Those of us who have been the subject of threats, assassination attempts and bombs in our constituency offices and homes know that very well indeed—and we have no time for it whatever.
Further to a previous question, does the Secretary of State agree that naming a playground after an IRA gunman, as Newry and Mourne district council did the other day, and tearing down the national flag at civic buildings in Belfast, do nothing for community relations and are deeply destabilising?
Mrs Villiers
As I have said, the flying of flags outside city hall is a matter for Belfast city council to decide. It is important that it is allowed to make that decision free from any kind of intimidation, including riots outside. I entirely join the right hon. Gentleman in condemning any attempts made to intimidate elected representatives or politicians from whichever party.
As to the decisions local authorities make on naming playgrounds, I do not think it would be sensible or wise for me to interfere in that discussion. We need to move towards a genuinely shared future in Northern Ireland, where such sensitive decisions can be taken on the basis of reason and mutual respect for the points of view of different parts of the community.
Mr Dodds
I welcomed recently the Secretary of State’s statement that she was not neutral on the Union. People in Northern Ireland will be disappointed that she cannot bring herself to condemn a decision to name a playground after an IRA gunman. A clear message needs to be sent out by the Secretary of State and the House that such behaviour and gestures are deeply destabilising and very damaging to community relations, especially with respect to those parents who will now not take their children to a playground where they feel intimidated.
Mrs Villiers
I entirely respect the right hon. Gentleman’s point of view, but I also totally respect the devolution settlement, whereby a whole range of decisions are now made locally in Northern Ireland. It is not for the Secretary of State to seek to interfere in those decisions, and I have no intention of doing so.
Paul Goggins (Wythenshawe and Sale East) (Lab)
Once again this year disputed parades have led to community tension and serious disorder. Has the Secretary of State recently held discussions with the First Minister and the Deputy First Minister about plans to devolve the legal framework for parading in line with the agreement that they reached at Hillsborough castle in 2010?
Mrs Villiers
Parading has been one of the issues I have discussed with the First Minister, the Deputy First Minister and other politicians in Northern Ireland. As the right hon. Gentleman points out, it was discussed as part of the devolution settlement. The Government remain entirely open to a devolved solution on parading, if the political parties in Northern Ireland can build a consensus to deliver it.
David Simpson (Upper Bann) (DUP)
4. What practical support she can give to the families from Northern Ireland of those (a) serving in and (b) who have returned from Afghanistan.
The Minister of State, Northern Ireland Office (Mike Penning)
I pay tribute to our brave armed forces who have served with such distinction in Afghanistan and other parts of the world. The MOD Service Personnel and Veterans Agency and many other service charities provide support and services to our 900,000-strong armed forces community and to their families.
David Simpson
I thank the Minister for his comments. Will he agree to meet a group of families in my constituency who have loved ones serving in Afghanistan, so that they can raise some of the practical issues themselves?
Mike Penning
It will be a pleasure and an honour to meet the families in the hon. Gentleman’s constituency. We are working very closely with the brigadier and his staff at 38 (Irish) Brigade to ensure that concerns are addressed.
Stephen Pound (Ealing North) (Lab)
Members on both sides of the House welcome the community covenant, which is a long-overdue recognition of the heroic sacrifice of our armed forces. Have the Secretary of State or the Minister given thought to naming an individual contact point for returning veterans—perhaps a community covenant champion, bearing it in mind that the Minister of State already has rather a busy job?
Mike Penning
I thank the hon. Gentleman, and my friend, for his comments. I have a very busy and a very important job, but correctly looking after those who have served their country, which the military covenant was designed to do, is exactly what I intend to do. I sit on the Prime Minister’s military covenant committee. When I was asked that question in the military covenant debate, I committed to having a round-table discussion on how we better help our servicemen and women when they leave the armed forces in Northern Ireland.
Mr Speaker
I have known the Minister of State for 20 years, and I have never regarded him as softly spoken. May I exhort him to speak up a bit?
Jim Shannon (Strangford) (DUP)
5. What discussions she has had with the Chancellor of the Exchequer on the likely positive effects on families in Northern Ireland of introducing a transferable allowance for married couples.
Mike Penning
Well then, Mr Speaker! We are committed to finding ways, which were in the manifesto—[Interruption.] You’ve got me going now, Mr Speaker. Treasury Ministers have undertaken to consider a range of options, some of which we might hear later, and make proposals to support marriage.
Jim Shannon
I thank the Minister for his response. My party and that of the Minister of State support a transferrable tax allowance. Marriage in Northern Ireland has risen by 15% since 2001, which reinforces its importance and relevance in today’s society. Does the Minister agree that that must be reflected in the introduction of a transferable tax allowance to allow family units to obtain the benefit, rather than be penalised?
Mike Penning
There are many ways in which we can support marriage within a tax allowance, and my hon. Friend will have to wait a little longer to hear exactly what is in the autumn statement—you never know, but we will wait and see.
Jack Lopresti (Filton and Bradley Stoke) (Con)
7. What recent assessment she has made of the level of cross-border security co-operation between the Police Service of Northern Ireland and An Garda Siochana; and if she will make a statement.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
Co-operation between the PSNI and An Garda Siochana has never been stronger. It has made a real difference in tackling terrorism and other forms of criminal activity. I have no doubt that it has saved lives.
Jack Lopresti
I thank my right hon. Friend for her answer. Will she assure the House that co-operation between the PSNI and the Garda covers not only terrorism, but other activities, such as organised crime, that help to finance terrorism? With that in mind, will she tell us what recent discussions she has had with counterparts in Dublin as part of our joint efforts to combat terrorism?
Mrs Villiers
I have had discussions with the Irish Justice Minister, Alan Shatter, the Garda Commissioner, Martin Callinan, and the Taoiseach about the importance of cross-border co-operation. As I said in my opening answer, that co-operation has never been stronger, and we are always open to options for deepening that co-operation in our joint fight against terrorism and criminality.
Ian Paisley (North Antrim) (DUP)
After congratulating my right hon. the Member for Lagan Valley (Mr Donaldson) on reaching his 50th birthday, will the Secretary of State tell us when she intends next to meet representatives from Her Majesty’s Revenue and Customs to discuss how they will tackle fuel and cigarette smuggling on a cross-party basis? It is depriving her Government of billions of pounds in lost tax revenue.
Mrs Villiers
I am happy to join the hon. Gentleman in wishing the right hon. Member for Lagan Valley (Mr Donaldson) a happy birthday. I have met Treasury Ministers on many occasions, and my colleague, the Minister of State, has recently met representatives from HMRC and will be meeting them again soon. I am happy to do that as well. The Government are strongly committed to cracking down on tax evasion in all forms. We have devoted £917 million, and—who knows?—further announcements on cracking down on tax evasion might be made later this afternoon.
Valerie Vaz (Walsall South) (Lab)
8. What representations she has received from the Finucane family in advance of the scheduled publication of the de Silva report on 12 December 2012.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
I have not received any representations from the Finucane family since taking office, but my officials are in touch with the family’s legal advisers on the arrangements for publication of the de Silva review next week.
Valerie Vaz
I thank the Secretary of State for her answer. It seems that we take a long time to bring justice to grieving families, and I am surprised that the Government have been involved in checking the de Silva report. How does she intend to bring justice for the death of Pat Finucane, given that the family have not been involved in the review?
Mrs Villiers
I strongly believe that the de Silva review will reveal the truth. It has been a very serious exercise. One reason the Prime Minister and my predecessor chose the review process, as opposed to a public inquiry, was the experience of public inquiries taking many years. It would not have been right to wait that long or for the family to have to wait another 12 years to get to the truth. The truth is what counts, and I am sure that the de Silva review will reveal it next week.
Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)
I thank the Secretary of State for her premature, but nevertheless welcome, birthday wishes.
The Secretary of State takes a great interest in the Finucane case, but will she cast her mind to the families of the 10 people murdered at Kingsmill in south Armagh, and will she note that one of the guns was found in possession of Raymond McCreesh, after whom a play park in Newry has now been named—shamefully—by the Social Democratic and Labour party and others? Will she cast her mind to those innocent victims who today are hurt by the decisions of Newry and Mourne district council, which frankly are a disgrace?
Mrs Villiers
It is important, both today in the House and next week when the de Silva review is published, to remember all the victims of the troubles. There were far too many despicable murders and tragedies, and the focus on individual cases should not blind us to the gravity of the suffering imposed on so many people across so many years. We will be emphasising that next week when we look at the Finucane case. [Interruption.]
Mr Speaker
Order. I remind the House that we are discussing extremely serious matters of life and death, and it would be appreciated if the House would respond accordingly.
Dr Alasdair McDonnell (Belfast South) (SDLP)
Does the Secretary of State agree that the Finucane case is not just about truth but about justice, and that there is a need to follow through and obtain justice, as much as truth, for the Finucane family?
Mrs Villiers
Of course, the review is about finding the truth and obtaining justice, but whether prosecutions follow will, of course, be a matter for the prosecution authorities, not the Government. [Interruption.]
Bob Stewart (Beckenham) (Con)
9. What recent assessment she has made of the activities of dissident republican groups.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
Attack planning by these terrorist groupings continues. The level of threat in Northern Ireland remains at “severe”. These groups possess lethal intent and we remain vigilant. The Police Service of Northern Ireland and its partners are working strategically to tackle the threat, to keep the people of Northern Ireland safe and secure.
Bob Stewart
In view of the continuing activities of the IRA under a new guise—the “new IRA”, and indeed the Continuity IRA—can my right hon. Friend assure me that she has done as much as humanly possible to identify long-term hides of weapons?
Mrs Villiers
The PSNI and its partners, including the Garda Siochana, are focused on suppressing terrorist activity. They are absolutely determined to keep people in Northern Ireland safe and secure. That means combating the efforts the terrorists are making to access weaponry, whether by seeking to import them, steal them or access hides from the past. This is an important priority for the PSNI, and it has the full support of Her Majesty’s Government in the brilliant work it does on these matters.
Naomi Long (Belfast East) (Alliance)
Dissident groups have been responsible for bomb attacks on my party headquarters and party members. I thank the Secretary of State for the attention she gives to that issue. However, the most recent attacks on my party colleagues and our party offices—our constituency offices and our staff—with threats and intimidation, have come from loyalist sources. Will she confirm that all threats of politically motivated violence will be treated with the same vigour as dissident republican attacks?
Mrs Villiers
I was discussing this matter with David Ford, the Minister of Justice, this morning. It is unacceptable if elected representatives or their staff are intimidated in any way. I know that the Minister of Justice and the PSNI will continue to defend robustly the ability of politicians in Northern Ireland to carry out their duties without intimidation.
Dr Julian Lewis (New Forest East) (Con)
Q1. What his strategy is to deal with any re-emergence of al-Qaeda in Afghanistan after 2014.
The Prime Minister
Before I answer my hon. Friend’s question, I am sure the whole House would wish to join me in congratulating the Duke and Duchess of Cambridge on the wonderful news that they are expecting their first child. This is the perfect piece of news to end what has been an extraordinary jubilee year.
Turning to my hon. Friend’s question on Afghanistan, the threat to global security from the al-Qaeda presence in Afghanistan has been significantly reduced. This is in large part the result of the brave work of UK, international security assistance force and Afghan armed forces. We remain committed to Afghanistan for the long term, and we will continue to support the development of the Afghan national security forces after 2014 through continued funding and involvement in training. Our continued contribution to aid and the political process, combined with our armed forces’ efforts, underpin a state that is capable of policing its own lands. It is by this path that al-Qaeda will, I believe, be unable to re-establish itself in Afghanistan.
The Prime Minister
The most important sanction for everyone to bear in mind is the fact that the Afghan national security forces are already at a level of 335,000 and are increasingly capable and increasingly able to police and secure their own country, but of course we will continue to be involved, not least through the officer training academy we will establish. The Americans will have a strong relationship—as we will have a strong relationship—with the Government of Afghanistan, and we will obviously want to help them in all the ways we can to ensure that Afghanistan never again becomes a haven of international terror.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Q2. If he will list his official engagements for Wednesday 5 December.
The Prime Minister
This morning I had meetings with ministerial colleagues and others. In addition to duties in my house—[Interruption]—I am sorry, in this House. [Laughter.] You would have thought I’d got used to it by now. In addition to my duties in this House I shall have further meetings later today.
Seema Malhotra
I visited my critically ill constituent Mrs Swaran Kaur Mudhar in hospital last week. There were only two nurses on a ward of 30 very ill patients. She has asked me to ask the Prime Minister why he has cut the number of nurses.
The Prime Minister
The number of clinical staff in our NHS since this Government came to power has gone up, and the number of managers is significantly down, but as my right hon. Friend the Health Secretary has said, we are not the slightest bit complacent. There are parts of our NHS where standards of care and standards of nursing are not acceptable. That is why we are introducing things like the friends and family test to ensure that all hospitals come up to the highest standards of the best.
Angie Bray (Ealing Central and Acton) (Con)
Following the publication of the Leveson report last week, does my right hon. Friend agree that what we need is a strong, independent regulator, preferably without statutory underpinning?
The Prime Minister
I think this is a moment when we should try to maximise the amount of consensus in this House and in the country about what is required. Everyone agrees that we need strong, independent regulation along the lines that Leveson suggests. Everyone agrees that we need million-pound fines. Everyone agrees that we need prominent apologies and independently handled complaints. This is absolutely vital, and I have been encouraged by the meetings I have had with the editors of national newspapers that they will put in place that Leveson-compliant regulation. We should continue the cross-party talks and make sure that we can deliver a regulatory system of which this House, this country and, above all, the victims can be proud.
Edward Miliband (Doncaster North) (Lab)
Let me join the Prime Minister in congratulating the Duke and Duchess of Cambridge on their very happy news. They have the best wishes not just of this House but of the whole country.
The Conservative party manifesto, published in April 2010, said that
“we will increase health spending in real terms every year.”
However, the head of the UK Statistics Authority says clearly and unequivocally that this has not happened. So what is today’s excuse?
The Prime Minister
This Government are putting £12.6 billion extra into the NHS. Let me quote the right hon. Gentleman the figures directly from the head of the Office for National Statistics. In real terms, spending in 2010 was £104.2 billion. In 2011, it was £104.3 billion in real terms. That is a real-terms increase, and I can tell the right hon. Gentleman that there will be further real-terms increases in 2012, in 2013 and in 2014, whereas there would be cuts under Labour.
Edward Miliband
Let me just say to the Prime Minister that, even by his standards, that was the most slippery answer we could possibly imagine. He is unbelievable. He has come to this House 26 times since he became Prime Minister and boasted about how he is increasing health spending every year of this Parliament—[Hon. Members: “Hear, hear!”] Government Members are cheering, but he has failed to meet that promise. This is not an argument between me and him; we have a ruling from the chair of the independent UK Statistics Authority who says that that has not happened. I would be grateful if the Department of Health could clarify the statements made. Instead of his usual bluster, why does he not just correct the record?
The Prime Minister
It is a very simple point. The spending figures for 2010 were set by the last Labour Government. Those are the figures we inherited. All the right hon. Gentleman is doing is proving that his Government were planning for an NHS cut. We have taken that figure in 2010, we have increased it in 2011 and we will increase it again in every year of this Parliament. People do not have to look at manifestos for a contrast; they can look at what Labour is doing in Wales. The Labour party is in charge in Wales, and it has cut the NHS in Wales by 8%. As a result, waiting times are up, waiting lists are down, quality is down. That is what you get with Labour and the NHS.
Edward Miliband
The Prime Minister knows the reality, which is that he made a promise about every—
Edward Miliband
There is no point in him shaking his head and getting annoyed. He made a promise that he would keep the NHS budget rising in real terms in every year of this Parliament. Labour’s plan, which we set out at the election, was to increase the health budget in 2010-11, and he cut the budget. He knows the reality. Let me give him one more opportunity. He made a solemn promise to the British people of year-on-year increases in the health budget, including in 2010-11. He failed to meet the promise. Come on, why don’t you just admit it?
The Prime Minister
I do not know whether I need to remind the right hon. Gentleman that the general election was after the 2010 year had begun. This was Labour’s plan, and what we have done is increase the budget every year. If he does not believe that, perhaps he will listen to the Labour shadow Health Secretary, who gave an interview in the New Statesman, when he said, about the Tories:
“They’re not ring-fencing it. They’re increasing it.”
He went on:
“Cameron’s been saying it every week in the Commons: ‘Oh, the shadow health secretary wants to spend less on health than us.’”
The question was asked:
“Which is true, isn’t it?”
He said:
“Yes, it is true…that’s my point.”
There we have it, confirmed: it is official—Labour wants to cut our NHS. It would never be safe with them again.
Edward Miliband
No, the reality is that my right hon. Friend the Member for Leigh (Andy Burnham) left a rising health budget and this Prime Minister cut it—that is the reality.
Now, let me try the Prime Minister on another fact, which I am sure he will be able to give to the House. Can he tell us how big an income tax cut he is giving next April to people earning over £1 million a year as a result of the reduction in the top rate of tax?
The Prime Minister
I am not surprised the right hon. Gentleman wants to get off health. That was the biggest own goal I think I have ever seen.
On the issue of the top rate of tax, when the right hon. Gentleman’s Government put it up to 50p, what it actually meant was that many fewer millionaires paid it, as a result of which the tax take suffered by £7 billion. I remind him that under this Government the top rate of tax will be higher in every year than any year when he was working in the Treasury.
Edward Miliband
I will give the right hon. Gentleman the answer, because of course he did not give it to us. Next April, everyone earning over £1 million will have a tax cut of £107,000 a year—£107,000 a year! [Interruption.] It is no good the Deputy Prime Minister shouting from a sedentary position: he went along with it—the party of Lloyd George!
The Prime Minister has not kept his promise on us all being in it together. Let us ask him about his central promise. Two years ago, he said that by 2015
“we will have balanced the books.”
Can he explain why he is so badly failing to keep that promise?
The Prime Minister
First, let me give the right hon. Gentleman the figures on the top rate of tax because it is important. In 2009-10, 16,000 people were earning more than £1 million, with a tax liability of £13 billion. In 2010-11, when the rate went up, this plummeted to 6,000 people with a tax liability of £6.5 billion. Therefore, his 50p election gambit cost the country £7 billion. When is he going to realise that setting tax rates is about raising money, not about punishing success? That is what Labour needs to understand.
In terms of the deficit, we have cut the Budget deficit by 25%, and the right hon. Gentleman will be getting an update on progress from the Chancellor in a minute, but let me ask the right hon. Gentleman this: how on earth can you deal with a borrowing problem by pledging to borrow more?
Edward Miliband
Let us be clear about the Prime Minister’s answer on the 50p rate. His answer to the problem of tax avoidance is to give the people doing it a tax cut. That is the answer he gave—give them another big giveaway. The reality that the Prime Minister could not get away from is that the deficit is going up, not down, on his watch. We all remember the posters, with his airbrushed face, saying,
“I’ll cut the deficit, not the NHS.”
The facts speak for themselves: he has cut the NHS and he is not cutting the deficit.
The Prime Minister
The right hon. Gentleman is 100% wrong: we are increasing spending on the NHS and we are cutting the deficit. Yes, we have cut the deficit by 25%, there are a million more private sector jobs, businesses are starting up at a higher rate than at any time in our history, this economy is on the right track, we are equipping Britain for the global race and, unlike the Labour party, we are on the side of people who work hard and want to do the right thing. And what is the right hon. Gentleman’s answer? More borrowing, more spending, more of the things that got us into the mess in the first place.
Mr Richard Bacon (South Norfolk) (Con)
Q3. Three years ago, the NHS spent £500 million on Tamiflu without having seen all the data on effectiveness or safety. Given that, far from that being an isolated case, it is normal for the drugs industry to have almost complete control over the evidence base on which crucial public decisions are made, will the Prime Minister ask Roche to make available the full clinical study reports on Tamiflu, so that doctors, patients and taxpayers are not misled?
The Prime Minister
My hon. Friend does excellent work on behalf of the taxpayer, partly through all the good questions that he asks. He has raised an important issue, involving not only the cost to the taxpayer but the possible overstatement of benefits to patients. There needs to be more transparency in clinical trials data, and we are committed to ensuring that that happens. The European Medicine Agency’s work in this regard is supported, and from next year there will be a legal requirement to publish summary reports from clinical trials.
Lindsay Roy (Glenrothes) (Lab)
Q4. This week we learned that, despite assurances that exhaustive checks were taking place, the UK Border Agency had made minimal attempts to trace 124,000 asylum seekers and migrants, and that 150 boxes of mail had been left unopened. Does that not demonstrate that the 20% cut in the agency’s budget has put our efforts to secure our borders at risk?
The Prime Minister
I think that this is a week in which to recognise that we said that we would cut immigration, and that, under this Government, net immigration is down by 25%. However, I want us to do far better in chasing up illegal overstayers and illegal migrants. Good work is being done in that respect, which also involves private sector organisations finding these people and getting them to leave. Of course we had to make reductions in the UKBA budget, as we have had to make them in all budgets, but the hon. Gentleman should have noticed by now that government these days is about getting more for less.
Caroline Dinenage (Gosport) (Con)
Q5. The Prime Minister will be aware that Portsmouth has been the home of the Royal Navy and a working dockyard for more than 500 years. Given that the Business Secretary appears to have prejudged the findings of a study of the future of shipbuilding, what reassurance can the Prime Minister give me—and 1,500 shipbuilders—that Portsmouth will remain integral to the building and export of warships, and will continue to be the base port for our future surface fleet?
The Prime Minister
My hon. Friend quite rightly speaks up for Portsmouth, which is and will continue to be an excellent home for the Royal Navy. The Navy is fully committed to Portsmouth, and, whatever decision is made on the future of shipbuilding, the Navy will remain a major employer in the city, not least once the new carriers arrive in Portsmouth in a few years’ time. I am sure that my hon. Friend will also welcome the recently announced enterprise zone on the Gosport peninsula, a £25 million package which could create up to 1,200 jobs.
Margaret Beckett (Derby South) (Lab)
Q6. In June 2010, the Prime Minister said that despite the Government’s deficit reduction plan, he would ensure that there was “ no increase in child poverty.”—[Official Report, 23 June 2010; Vol. 512, c. 294.]Does he still stand by that assurance?
The Prime Minister
We are doing everything that we can to tackle child poverty, and according to some estimates it has come down. What we have specifically done is increase the element of child tax credit that goes to the poorest families.
Paul Burstow (Sutton and Cheam) (LD)
In the wake of the criminal convictions of staff who repeatedly abused people living at Winterbourne View hospital, is it not time that those who take the fees, employ the staff and then supervise those staff were themselves held to account through the creation of a new offence of corporate neglect?
The Prime Minister
I have listened very carefully to what my right hon. Friend has said. There have indeed been some appalling instances of completely unacceptable levels of care. Of course people working in such organisations are fully subject to the law, as they should be, and if the law has been broken, the proper consequences should follow.
Jim Shannon (Strangford) (DUP)
Q7. One of the main industrial issues in my constituency, and indeed throughout the United Kingdom of Great Britain and Northern Ireland, is the price of electricity. What action is the Prime Minister taking to mitigate spiralling costs, especially in Northern Ireland?
The Prime Minister
For consumers, we have announced our plan to ensure that companies put people on the lowest available tariff, which I think has been warmly welcomed throughout the House and throughout the country. For business, given that there is an issue with the energy-intensive industries, the Government have announced their intention to exempt such industries from contract-for-difference costs under electricity market reform. That is subject to state aid clearance and further consultation, but I think it shows that the Government are working hard to help those industries and ensure that they continue to compete and succeed in Britain.
Mrs Eleanor Laing (Epping Forest) (Con)
Q8. The whole House does indeed join the Prime Minister in congratulating the Duke and Duchess of Cambridge on their excellent good news. Will the Prime Minister please confirm to the House that the Commonwealth has at last agreed—after many of us have been asking for this for years—to change the rules on royal succession? Will the Prime Minister undertake to bring a Bill before the House very soon, so that if this baby is a girl she can follow in the footsteps of her much-loved great-grandmother and become our Queen?
The Prime Minister
I am very grateful to my hon. Friend for her question. I think I can answer positively on all the points she made. At the Perth Commonwealth conference, I chaired a meeting of the Prime Ministers of all the different realms and we agreed we should bring forward legislation to deal with this issue. All the realms have now agreed to do that. We will introduce legislation into this House very shortly. It will write down in law what we agreed back in 2011: that if the Duke and Duchess of Cambridge’s first child is a girl, she can one day be our Queen. That is the key point. But it is important to explain that the changes will apply to a child born after the date of the Perth announcement of last year even if the birth is before the legislation is passed. I hope it will not take long—certainly not nine months—to pass this legislation, but, just in case, there would not be a problem.
Margaret Hodge (Barking) (Lab)
Q9. I welcome the Government’s commitment to increasing their efforts to tackle tax avoidance. Starbucks has now caved in to public pressure and announced that it will review its tax arrangements in the UK, so naming and shaming clearly works. Surely it is time to stop companies engaged in tax avoidance hiding behind taxpayer confidentiality. Will the Prime Minister now commit to publishing the names of the companies found by Her Majesty’s Revenue and Customs to have avoided paying their fair share of tax?
The Prime Minister
I very much welcome the right hon. Lady’s initiative on this and her Committee’s work, and I thank her for her warm words of support for what the Government have done thus far. We have recovered £29 billion of additional revenues from large businesses in the last six years, including £4 billion in the last four years from transfer pricing inquiries alone, which is one of the issues the press has covered in detail. I am certainly committed to doing everything we can to look at all the options to make sure that companies pay their taxes properly, and I agree with what the right hon. Lady said about public, and even some political, pressure. On some occasions I myself have made one or two remarks on this subject that were seen as rather controversial. It is important that people feel that companies meet their responsibilities and pay their taxes.
Mr Robert Buckland (South Swindon) (Con)
Q10. Will my right hon. Friend do everything he can to ensure that education, health and social services work together to commission services jointly, in order to ensure that the very welcome reforms in the forthcoming children and families Bill will be workable on the ground?
The Prime Minister
My hon. Friend makes a very important point. We need to get away from the idea of Government—or, indeed, local government—operating in silos with different budgets and different departments not working together. My hon. Friend represents a Swindon constituency, and I know that Swindon borough council has taken huge steps in bringing the various agencies together, particularly in the area of problem families, and I commend them for the work they do.
Sheila Gilmore (Edinburgh East) (Lab)
Q11. Whatever announcements the Chancellor makes on pension tax relief shortly, is it not a fact that when this Government came to power, they made changes to pension tax relief that gave a tax cut of £1.6 billion to people earning more than £150,000? [Interruption.] I see that the Chancellor has to give the Prime Minister his crib sheet.
The Prime Minister
I am afraid the hon. Lady is wrong. We inherited a plan to raise £4 billion in taxes from the wealthiest people, and we raised that further. My right hon. Friend the Chancellor will make some further announcements in a moment.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
The north-east of Scotland makes a major contribution to the UK economy through the offshore oil and gas industry. Will the Prime Minister commit to maximise investment in the industry so we get the maximum number of jobs and the maximum energy security and taxation for the future of this country?
The Prime Minister
My hon. Friend rightly speaks up for the North sea industry and for everyone who works in it in Scotland. I have been incredibly impressed when I have visited Aberdeen to see the health of, and the wealth generated by, that industry. What we have done, on decommissioning and on new field allowances, has helped to bring some certainty, and we should keep working on that to make sure that we recover as much oil and gas from the North sea as possible and make the most of this precious national asset.
Nic Dakin (Scunthorpe) (Lab)
Q12. Some 7,000 fewer nurses, longer waits in accident and emergency, and hospitals full to bursting, according to Dr Foster—the Prime Minister is cutting the NHS while the deficit rises. Will he put that on his posters for the next general election?
The Prime Minister
I think the hon. Gentleman was describing the situation in Wales, where Labour has put in place an 8% cut. Let me tell him what is actually happening in the NHS in England: we have got 1,350 extra clinical staff; we have taken down the number of managers by 6,700; mixed-sex accommodation is right down; the cancer drugs fund is making sure that many more people get access to those drugs; waiting times are down; the number of people waiting a long time is down; and the number of people waiting longer than 52 weeks to start treatment is at its lowest level since records began. He should be supporting this Government for their health policy and telling his Front Benchers to stop cutting the NHS.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Does my right hon. Friend recall receiving a visit at No. 10 from the pupils of Market Field special school, which had been nicknamed “shed city” as there were so many demountables on its site? Does he share my delight that Essex county council has allocated £8.4 million to build a new school, and may I thank him for his support for that campaign?
The Prime Minister
I am very grateful to my hon. Friend for his question. I am a very big supporter of Britain’s special schools; I think they provide an absolutely vital service for parents and for children who have those special and sometimes quite acute needs. I am proud of the fact that this Government have invested in special schools and they are doing such a good job, including in his constituency.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Q13. Following the Government’s new funding formula for universities this year, student admissions dropped by more than 50,000. Despite meeting its target, the university of Wolverhampton—my local university—suffered a cut in its core allocation and has been told that there will be another cut next year. What guarantees can the Prime Minister give that universities such as Wolverhampton’s will not suffer year-on-year reductions in student numbers as a result of this new formula?
The Prime Minister
The whole point is that this Government took difficult decisions to make sure we could maintain the number of people going to our universities, and the question really goes right back to the Labour party: if you don’t support a proper system of student contributions, how on earth are you going to pay for our universities? We have set out our plans, and they are actually working well. You don’t start paying back money until you earn £21,000, and you don’t start paying back in full until you earn £35,000. We have a method for making sure we invest in our universities; the Labour party has not got a clue.
John Glen (Salisbury) (Con)
Q14. Naomi House children’s hospice, which serves my constituency, receives just 10% of its funding from the Department of Health, whereas adult hospices receive rather more. This is especially difficult because, as private institutions, hospices have to pay for all prescriptions. Will the Prime Minister look again at the reasons for the different treatment of children’s and adult hospices, and meet me and Professor Aziz to discuss the different funding levels that they attract?
The Prime Minister
I am very happy to discuss this issue with my hon. Friend. For many years, my family used a children’s hospice in Oxford that got absolutely no state support at all. What this Government have done is continue with the £10 million going annually to support children’s hospices, and this year we have added an extra £720,000. However, what we want to put in place, and what we are discussing with the providers of both adult and children’s hospices, is a per-patient funding system that would be for all hospices. I think that would bring a greater logic and consistency to how we support this absolutely essential part of both our health service and, I would argue, our big society.
Anas Sarwar (Glasgow Central) (Lab)
Q15. Is the Prime Minister aware that Amazon, a global company, turned over £3.3 billion in the UK this year, paid not a single penny in corporation tax and yet was rewarded with a £10 million grant from the Scottish National party Government in Scotland? Does that not demonstrate that both our Prime Minister and our First Minister stand up for the wrong people? When will this Government move away from punishing the poorest in society and focus on those who avoid and evade?
The Prime Minister
The point I would make to the hon. Gentleman is that there is common ground between us, which is that we want those large multinational companies to pay proper taxes here in the UK. We believe that you do that by having low tax rates—and we have reduced the rate of corporation tax—and ensuring that they declare their income properly. On the specific issue of transfer payments, some companies have been pursuing rather strange practices to pretend that their revenues are not delivered here in the UK to run down their tax bills. As I have said, in the past four years we have recovered £4 billion in tax revenue in that way, but the Treasury and the HMRC very much know that there is more we can do.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Residents of Suffolk Coastal were very excited when the Energy Bill was published last week, because it gives a potential green light to the building of Sizewell C nuclear power station and many jobs. Will the Prime Minister commit to continuing to invest in apprenticeships and skills training so that Suffolk people can get the jobs that will be created?
The Prime Minister
My hon. Friend is absolutely right. The presentation of the Energy Bill to Parliament means that we can get out there and sell to all the energy companies the clear and stable framework that the UK has for offshore wind, nuclear, renewables and gas. It is a very positive development and there is a huge amount of potential pent-up investment, and we need to ensure that that results in British jobs and British apprenticeships. The Government are fully committed to making that happen.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
The Prime Minister obviously believes that within the Leveson report there lurks something that is bonkers. Given that, how would he characterise the views of his Planning Minister—the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles)—who has just said that over the coming months and years tens of thousands of new homes will have to be built on greenfield sites?
The Prime Minister
Let me deal with the question about the Planning Minister first. It is absolutely clear that yes, we should build on brownfield land and try to deal with the problem of empty homes, but we need a frank conversation about the need to build more flats and houses so that we do not have the situation we currently have, whereby if people do not have help from the bank of mum and dad they are in their mid-30s before they buy their first home or flat. I do not think that is acceptable in our country, so all credit to the Planning Minister for trying to fix the problem.
On the question of Leveson, I think there is a wide agreement about what a new regulatory system ought to look like. It is set out there in black and white in Leveson, and we need to challenge the press to introduce it. If they do not, we will obviously have to take further action.
Mr Brooks Newmark (Braintree) (Con)
With more men in work than ever before, more women in work than ever before, a deficit that has been cut by 25% and interest rates at historic lows, does my right hon. Friend agree that the Opposition’s plan B—code for more debt—would jeopardise all those achievements?
The Prime Minister
My hon. Friend is entirely right; we are making progress. Of course it is tough when there are so many economic headwinds against us, but with 1 million more private sector jobs, the deficit down by 25% and a record number of businesses starting up last year, we are on the right track. It is quite clear that plan B stands for bankruptcy—that is what Labour would give us.
Ann Clwyd (Cynon Valley) (Lab)
A universal health care system free at the point of delivery is what the overwhelming majority of the British people want and is something to which I remain firmly committed. However, there are increasing complaints about nurses who fail to show care and compassion to their patients. What exactly will the Prime Minister do about that?
The Prime Minister
The right hon. Lady speaks for the whole House and the whole country in raising this issue. I know how painful what she witnessed in her own life and her own family must have been. I am, as she is, a massive fan of our national health service and an enormous fan of the fact that it is free at the point of use and that we do not produce a credit card when we go to hospital. My family has had extraordinary care from our NHS, but we do not do our NHS or our nurses any favours if we do not point out that there are some very real problems in parts of our health and care system.
As a constituency MP, I see quite a few letters—particularly from elderly people and their relatives—who are not getting the sort of care that is appropriate in hospitals. I set up a nursing care quality forum that I have attended myself to discuss these issues with nurses and nurse leaders. There is no silver bullet and no magic wand, but some simple steps, such as asking every hospital to carry out a friends and family test, asking the patients and the staff whether they would be happy for their family or friends to be treated in that hospital, can make a real difference. So can hourly rounding, which is not something to do with statistics but the idea that the nurse should be there by the bedside of elderly patients once an hour checking that they have had water and something to eat, that they do not have bedsores and that they are properly looked after. We should not have to dictate those things, but a proper conversation with our nurses—who are angels to a vast degree—can get the situation sorted out for all our relatives.
Families Against Suicide Today
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Ms Margaret Ritchie (South Down) (SDLP)
I wish to present a petition of 2,079 signatures on behalf of the members of Families Against Suicide Today. I should like to note that Burren is near Warrenpoint in County Down in the constituency of South Down.
The petition states:
The Petition of Members of FAST (Families Against Suicide Today),
Declares that FAST was brought together by Patti Boyle whose son Kevin left home at 12.30pm on 12 October 2011 after telling her he was going to work and that 101 days later his remains were found in a local area known as ‘Happy Valley’; further that Kevin had purchased an online suicide kit to complete his death from a website which described death as ‘Deliverance’; further that the Petitioners marched on 30 August 2012 from Kevin’s grave in Burren, Co. Down to Westminster to highlight Article 2 of the Human Rights Act 1998 the ‘Right to Life’.
The Petitioners therefore request that the House of Commons urges the Government to close down websites assisting suicide and to prosecute those who commit the crime of aiding and abetting suicide.
And the Petitioners remain, etc.
[P001142]
Film ‘Innocence of Muslims’
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Stewart Jackson (Peterborough) (Con)
This petition is from in excess of 4,000 Muslims in the City of Peterborough.
The petition states:
The Petition of Muslims of the City of Peterborough,
Declares that the Petitioners feel hurt and shocked by the film ‘Innocence of Muslims’; further that the Petitioners believe that it represents a defamation of Islamic sacred values and is an insult to the Prophet Muhammad and that the Petitioners believe that this defamation of the Prophet Muhammad, or indeed any other Prophet, is unacceptable; further that the Petitioners do not accept the claim that insults to religious institutions, their prophets or their values fall within the scope of freedom of speech and that whilst the Petitioners support freedom of speech they wish to remind people that it carries with it the role of responsibility and care not to hurt and humiliate the feelings of other people; further that the Petitioners believe this kind of film, along with derogatory sketches and cartoons about the Prophet Muhammad is blasphemous and tortuous to Muslims all over the world; further that the Petitioners wish to dissociate themselves from the small minority of people who misbehaved during the protest marches throughout the world against this film and that the Petitioners believe that those actions were against the teachings of our beloved prophet.
The Petitioners therefore request that the House of Commons urge the Government to ban the film ‘Innocence of Muslims’ from being shown, consider new legislation to make it a criminal offence to create films or cartoons of a blasphemous nature and support moves to recognise the responsibility attached to freedom of speech and ensure such derogatory material is not encouraged.
And the Petitioners remain, etc.
[P001144]
Autumn Statement
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Mr George Osborne)
It is taking time, but the British economy is healing. After the biggest financial crash of our lifetimes, people know that we face deep-seated problems at home and abroad. At home, we live with the decade of debt and the failure to equip Britain to compete in the modern world, and we face a multitude of problems from abroad—the US fiscal cliff, the slowing growth in China, and above all the eurozone, now in recession.
People know that there are no quick fixes to these problems but they want to know that we are making progress, and the message from today’s autumn statement is that we are making progress. It is a hard road, but we are getting there. [Interruption.] Britain is on the right track—[Interruption.]
Mr Speaker
Order. I ask the Chancellor to resume his seat. Let us be clear about this. Each side should be heard with courtesy. The House knows well enough by now that I will afford a very full opportunity for questioning of the Chancellor, but the more interruption and the greater the noise, the longer the session will take, and that cannot be right. So I appeal to Members please to give the Chancellor a courteous hearing, as indeed, if it becomes necessary, I will appeal to Government Back Benchers to afford a fair hearing to the shadow Chancellor. That is how it should be.
Mr Osborne
Britain is on the right track and turning back now would be a disaster. We have much more to do. The deficit has fallen by a quarter in just two years, and today’s figures show that it is forecast to continue to fall. Exports of goods to the major emerging economies, which were pitifully low, have doubled since 2009. Since this coalition Government came to office, 1.2 million new jobs have been created in the private sector. In a world economy where bond investors are fleeing countries that they regard as risky, investment is flowing into UK gilts, instead of flying from them. We have to keep it that way.
Two years ago, Britain was in the danger zone. Now we are seen as one of the safe havens, able to borrow money at lower interest rates than at any time in our history. Today’s forecast shows a £33 billion saving on the debt interest payments that it was predicted we would have to pay two years ago. That is as much as the entire defence budget. That is why in this autumn statement, we show that this coalition Government are confronting the country’s problems, instead of ducking them.
Today we reaffirm our commitment to reducing the deficit, setting out the details of our spending plans for 2015-16 and rolling forward an outline framework into 2017-18. We show our determination to do this fairly, with further savings from bureaucracy, the benefit bills and the better-off. We go on equipping Britain to succeed in the global race by switching from current spending to capital investment in science, roads and education. We offer new support for business and enterprise, so they can create the jobs we need. In everything we do, we will show today that we are on the side of those who want to work hard and get on.
The Office for Budget Responsibility has today produced its latest economic forecast and it is a measure of the constitutional achievement that it is taken for granted that our country’s forecast is now produced independently of the Treasury, free from the political interference of the past. I want to thank Robert Chote, his fellow members of the Budget Responsibility Committee, Steve Nickell and Graham Parker, and all their staff at the OBR for their rigorous approach.
One of the advantages of the creation of the OBR is that we get not only independent forecasts, but an independent explanation for why the forecasts are as they are. For example, if lower growth was the result of the Government’s fiscal policy, it would say so. But it does not. It says that the economy has “performed less strongly” than expected and forecasts growth this year of minus 0.1%, but in its view
“the weaker than expected growth can be more than accounted for by over-optimism regarding net trade”.
The OBR had previously assumed that the eurozone would begin to recover in the second half of this year. Instead, of course, it has continued to contract, which has hit our exports to those markets and the net trade numbers. The eurozone crisis has also, it says, spilled over into “tighter credit conditions” and
“elevated UK bank funding costs”.
In its words, those problems will
“constrain growth for several years to come”.
There are also domestic problems that the OBR refers to. In the report today the contraction in 2008-2009 is now assessed to be deeper than previously thought, with GDP shrinking by a staggering 6.3%, the largest shock to our economy since the second world war. In the OBR’s view, the aftermath of that shock continues to weigh on the productivity of the UK economy, with credit rationing and impaired financial markets potentially impeding the expansion of successful firms. It says:
“GDP growth is now expected to be lower in every year of the forecast period, as credit conditions take longer to normalise and global growth remains weaker than previously expected”.
As a result, the OBR forecasts that the economy will grow by 1.2% next year, 2.0% in 2014, 2.3% in 2015, 2.7% in 2016 and 2.8% in 2017.
So the economy is recovering, and it is recovering more quickly than many of our neighbours. The International Monetary Fund estimates that next year the UK will grow more strongly than either France or Germany. Our credible fiscal policy allows for supportive monetary policy and, with the Bank of England, we are directly addressing the problems of tight credit through the £70 billion funding for lending scheme. In the OBR’s view, that has reduced UK bank funding costs, lowered interest rates in the real economy and will add to the level of real GDP.
One area where the British economy has done much better than forecast is in creating jobs. Since early 2010, the private sector has created 1.2 million new jobs—600,000 more than predicted—and youth unemployment has been falling. The OBR now expects unemployment to peak at 8.3%, instead of 8.7%. That is at a time when the unemployment rate in Spain is 26%, in France it is 11% and across the whole eurozone it is almost 12%. Employment, which is already at a record high, is set to go on rising each year of the forecast. For every one job less in the public sector, two new jobs are expected to be created in the private sector. Britain now has a greater proportion of its people in work than either the eurozone or the United States of America. More jobs means that the impact of the weaker than forecast GDP on the public finances has been less than some might have expected.
There have been three developments that have each had a significant one-off impact on the public finances, and the report we are publishing today shows clearly and transparently the impact of all three. First, there is the transfer of the Royal Mail pension fund to the public sector as part of its privatisation. That produces a one-off reduction in the deficit of £28 billion this year, but it will add to the deficit in the years after.
Secondly, the previous Government had classified Bradford & Bingley and Northern Rock Asset Management as off balance sheet. Today, they are brought on balance sheet, in line with the judgment of the Office for National Statistics. That adds around £70 billion to our national debt and reminds us of the price the country is still paying for the failures of the past.
Thirdly, the Government have decided, with the agreement of the Bank of England, to transfer excess cash held in the asset purchase facility to the Exchequer. This is sensible cash management, and it is in line with the approach of the Bank of Japan and the US Federal Reserve. I welcome the OBR’s verdict that this is, in its words, “more transparent” than the previous approach. I want to make sure that its impact on the figures is also completely transparent, so we have today published the forecasts for the public finances with and without the impact of the APF decision.
When we came to office, the deficit stood at 11.2%—the highest in our peacetime history. It was forecast to be the largest of any major economy in the world. In the past two years, the deficit has fallen by a quarter. Today’s figures show that with or without the APF coupons, the deficit is forecast to fall this year as well, and cash borrowing is forecast to fall too. Last year, the deficit was 7.9%. This year, with the APF coupons, it is forecast to be 6.9%, but that excludes the impact of the Royal Mail pension assets. It is falling and it will continue to fall each and every year, to 6.1% next year, 5.2% the year after, 4.2% in 2015-16, then 2.6%, before reaching 1.6% in 2017-18.
In 2009-10, the country was borrowing £159 billion. This year, we are borrowing £108 billion. That is forecast to fall to £99 billion next year, £88 billion the year after, then £73 billion in 2015-16, and £49 billion and £31 billion in the two years after that. These are the central forecasts published by the OBR, with the asset purchase facility cash transfer included. When the transfer is excluded, as we show in the document, the deficit also falls, from 7.9% last year to 7.7% this year, then 6.9% next year, and it falls in every single year after that—and cash borrowing falls in every year as well.
There are those who have been saying that the deficit was going up this year—indeed, I think I heard it in Prime Minister’s questions—but any way you present these figures, this is not what the OBR forecasts show today. It says that the deficit is coming down—coming down this year and every year of this Parliament. Yes, the deficit is still far too high for comfort—we cannot relax our efforts to make our economy safe—but Britain is heading in the right direction. The road is hard but we are making progress.
Unlike the previous Government’s golden rule, the regime we have set up means that the Chancellor is no longer judge and jury of their own fiscal rules, and today the OBR has assessed us against those rules. First, the fiscal mandate: this is the commitment that we will balance the cyclically adjusted current budget over the coming five years. I can tell the House that the OBR has assessed that we are, in its words, “on course” to meet our fiscal mandate. In other words, we have a better than 50% chance of eliminating the structural current deficit in five years’ time—that part of our borrowing that does not recover automatically as the economy grows. This is true, again, with or without the transfer of the coupons, so we will meet our fiscal mandate. But the OBR assesses in its central forecast that we do not meet the supplementary objective that aims to have debt falling by 2015-16. The point at which debt starts to fall has been delayed by one year, to 2016-17, and the OBR’s central forecast is that net debt will be 74.7% this year, then 76.8% next year, 79% in 2014-15, and 79.9% in 2015-16, before falling to 79.2% in 2016-17 and 77.3% in 2017-18.
In short, the tougher economic conditions mean that while our deficit is forecast to go on falling, instead of taking three years to get our debt falling, it is going to take four. Confronted with this news, some say we should abandon our deficit plan and try to borrow more. They think that by borrowing more, we can borrow less. That would risk higher interest rates, more debt interest payments, and a complete loss of Britain’s fiscal credibility. We are not taking that road to ruin.
Then there are those who say that despite all that has happened in the world this year, we should cut even more now to hit the debt target. That would require £17 billion of extra cuts a year. Let me explain why I have decided not to take this course.
We have always argued that we should let the automatic stabilisers work. We have not argued that we should chase down a cyclical or temporary deterioration in the economy, particularly one that our own independent body says is largely driven by problems abroad. That is also the judgment of the International Monetary Fund, the OECD and the Governor of the Bank of England.
Our aim is to reduce the structural deficit—the permanent hole in our public finances that will not be repaired as the economy recovers. And we are—we have cut the structural deficit by 3 percentage points in the past two years, more than any other G7 country, and it is set to go on being cut at a similar rate in the years ahead. This lower deficit is delivered by our public spending plans and we are going to stick with those plans. Overall, we are not going faster or slower with those plans; the measures I will announce in this autumn statement are fiscally neutral across this Parliament. There is no net rise in taxes today—any taxes increased are offset by taxes cut.
In last year’s autumn statement, we committed the Government to maintain the same pace of consolidation for two further years beyond the end of the current spending review, into 2015 and 2016-17. In this year’s autumn statement, we extend the consolidation for one further year, into 2017-18. The OBR projects that, as a result, the share of national income spent by the state will fall from almost 48% of GDP in 2009-10 to 39.5% by 2017-18. The document shows that total managed expenditure will continue to fall, and will now be £4.6 billion lower in 2017-18 than if it had been held flat in real terms. No decision to cut spending is ever easy, but those who object must explain whether instead they would have higher taxes, higher borrowing or both.
I also provide further detail of the consolidation plans for 2015-16, the last year of this Parliament. I said two years ago that the correct balance for our fiscal consolidation between spending and tax should be 80:20. I can confirm that by the end of 2015-16, the decisions we announce today mean that we will almost exactly deliver on that 80:20 mix. Total spending will fall in the final year of this Parliament at the same rate as through the current spending review.
I can confirm today that the overall envelope for total managed expenditure will be set at £745 billion. We start with the working assumption that departmental resource totals will continue on the same trajectory as over the current spending review. The detail of departmental spending plans for 2015-16 will be set at a spending review, which will be announced during the first half of next year. What we are doing today is taking steps now to help deliver those spending plans and to go on reducing the deficit in a way that is fair.
This Government have shown that it is possible to restore sanity to the public finances while improving the quality of our public services—crime has fallen, hospital waiting lists are down, school standards are up—and this is with a civil service that is today smaller than at any time since the second world war.
We are today publishing the reports we commissioned from the pay review bodies on market-facing pay. We commit to implementing these reports. This means continuing with national pay arrangements in the NHS and Prison Service, and we will not make changes to the civil service arrangements, either; but the School Teachers Review Body recommends much greater freedom to individual schools to set pay in line with performance, and my right hon. Friend the Education Secretary will set out how that will be implemented.
Through the efforts of individual Government Departments and the support of the Chief Secretary and my right hon. Friend the Minister for the Cabinet Office, we have already generated £12 billion of efficiency savings in Whitehall, but we believe there is room to do even more. If all Departments reduced their spending on administration in line with the best-performing Departments, such as Education and Communities and Local Government, another £1 billion could be saved. If all Departments made greater provision of digital services, rationalised their property estates, as some have done, a further £1 billion could be saved. Today, therefore, we are reducing departmental resource budgets by 1% next year and 2% in the year after.
We will continue to seek efficiency savings in the NHS and in our schools, but that money will be recycled to protect spending in these priority areas. Local government budgets are already being held down next year to deliver the freeze in council tax, so we will not seek the additional 1% savings next year, but we will look for the 2% saving the year after. Although the Ministry of Defence is included in these measures, it will be given flexibility on its multi-year budget to ensure that this will not lead to reductions in military manpower or the core defence equipment programme over the Parliament.
A mark of our values as a society is our commitment to the world’s poorest. We made a promise as a country that we would spend 0.7% of our gross national income on international development and I am proud to be part of the first British Government in history who will honour that commitment and honour it as promised next year. We will not, however, spend more than 0.7% so, as we did last year, we will adjust the Department for International Development’s budget to reflect the latest economic forecasts.
In the medium term these savings across Whitehall will help Departments maintain the right trajectory for the years that follow the spending review and help us to pay off the deficit in future. In the short term, I am switching these current savings into capital—all the money saved in the first two years will be reinvested as part of a £5 billion capital investment in the infrastructure of our country. Despite the fiscal challenges we face, public investment as a share of GDP will be higher on average in this Parliament than it was under the last Labour Government. It is exactly what a Government equipping Britain to compete in the modern global economy should be doing.
We are committing an extra £1 billion to roads, which includes four major new schemes: to upgrade key sections of the Al, bringing the route from London to Newcastle up to motorway standard; to link the A5 with the Ml; to dual the A30 in Cornwall; and to upgrade the M25, which will support the biggest port developments in Europe. I pay tribute to my hon. Friend the Member for Thurrock (Jackie Doyle-Price) for campaigning to achieve this.
We have already set out plans this autumn for a huge investment in rail, and my right hon. Friend the Transport Secretary will set out in the new year plans to take High Speed 2 to the north-west and west Yorkshire. I can today confirm a £1 billion loan and a guarantee to extend the Northern line to Battersea power station and support a new development on a similar scale to the Olympic park.
We are confirming funding and reforms to assist construction of up to 120,000 new homes and delivering on flood defence schemes in more cities. On top of broadband expansion for our countryside and our larger cities, we are funding ultrafast broadband in 12 smaller cities: Brighton and Hove, Cambridge, Coventry, Derby, Oxford, Portsmouth, Salford, York, Newport, Aberdeen, Perth and Derry/Londonderry. In addition to the third of a billion announced this autumn for British science, we are today announcing £600 million more for the UK’s scientific research infrastructure.
Since improving our education system is the best investment in a competitive economy, I am today committing £270 million to fund improvements in further education colleges and £1 billion to expand good schools and build 100 new free schools and academies. Scotland, Wales and Northern Ireland will get their Barnett share of additional capital spending put at the disposal of their devolved Administrations.
On top of the £5 billion of new capital spending in infrastructure and support for business, we are ready to provide guarantees for up to £40 billion more. Today I can announce that projects worth £10 billion have already pre-qualified. We are offering £10 billion-worth of guarantees for housing, too. Our country’s pension funds will launch their new independent infrastructure investment platform next year as well, and we have today published full details of the replacement for the discredited private finance initiative. Since we can all see now that the public sector was sharing the risk, we will now ensure that we also share in the reward, and I commend my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) for his work in this area.
Taken together, this is a revolution in the sources of finance for upgrading Britain’s infrastructure and equipping Britain to win in the global race. Annual average infrastructure investment, which was £29 billion under the last Labour Government, is now £33 billion.
Savings from Whitehall are not enough by themselves to tackle our debts. We need to find other savings, and we need to do so in a way that is fair. Those with the most should contribute the most, and they will, but fairness is also about being fair to the person who leaves home every morning to go out to work and sees that their neighbour is still asleep, living a life on benefits. As well as a tax system where the richest pay their fair share, we have to have a welfare system that is fair to the working people who pay for it.
Let me start with tax. The vast majority of people, rich or otherwise, pay their taxes and make their contribution. However, there are still too many who illegally evade their taxes or use aggressive tax avoidance in order not to pay their fair share. This Government have taken more action against those people than any before us. Prosecutions for tax evasion are up 80%. We will collect £7 billion more a year in tax that is due than the last Government. We are increasing by about 2,500 the number of tax inspectors going after evaders and avoiders. Next year, we will introduce the first ever general anti-abuse rule—something that never happened in the 13 years before we came into office.
Next year, for the first time in our history, money will be flowing from bank accounts in Switzerland to Britain, instead of the other way around. Because of the treaty that we have signed, we expect to receive £5 billion over the next six years from the undisclosed Swiss bank accounts of UK residents. That is the largest tax evasion settlement in British history.
We are taking further steps today. Hundreds of millions of pounds of tax loopholes are being closed with immediate effect, and we are investigating the abusive use of partnerships. HMRC will not have its budget cut over the next two years, unlike other departments. Instead, we will spend £77 million more on fighting tax avoidance, and not just for wealthy individuals.
We want to have the most competitive corporate tax system of any major economy in the world, but we expect those corporate taxes to be paid. We are therefore confirming today that we will put more resources into ensuring that multinational companies pay their proper share of taxes. We are leading the international effort to prevent artificial transfers of profits to tax havens. With Germany and now France, we have asked the OECD to take that work forward and we will make it an important priority of our G8 presidency next year. In total, we expect the action that we are announcing today to increase the amount of money collected from tax evasion and avoidance by a further £2 billion a year.
Fair and necessary as that is, it is not enough by itself to close the deficit. We need to ask more from the better-off. Punitive tax rates do nothing to raise money, and simply discourage enterprise and investment into Britain. Other countries on our doorstep are trying that approach and paying the price. We are not making that mistake. HMRC data reveal that in the first year of the 50% tax rate, tax revenues from the rich fell by £7 billion and the number of people declaring incomes of over £1 million fell by a half. A tax raid on the rich that raises almost no money is a tax con. We are going to have a top rate of tax that supports enterprise and we are going to raise more money from the rich. Here is a simple fact: the richest will pay a greater share of income tax revenues in every single year of the coalition Government than in any one of the 13 years of the last Labour Government.
However, to make sure that the deficit reduction remains fair, we need to raise more. We have already raised stamp duty on multi-million pound homes and next week we will publish the legislation to stop the richest avoiding stamp duty. But we will not introduce a new tax on property. That would require the revaluation of hundreds of thousands of homes. In my view, it would be intrusive, it would be expensive to levy, it would raise little and the temptation for future Chancellors to bring ever more homes into its net would be irresistible, so we are not having a new homes tax.
In this Parliament, we have already reduced the amount of tax relief that we give to the very largest pension pots. From 2014-15, I will further reduce the lifetime allowance from £1.5 million to £1.25 million, and reduce the annual allowance from £50,000 to £40,000. That will reduce the cost of tax relief to the public purse by an extra £1 billion a year by 2016-17. Ninety-eight per cent. of the people currently approaching retirement have a pension pot worth less than £1.25 million. Indeed, the median pot for such people is just £55,000. Ninety-nine per cent. of pension savers make annual contributions to their pensions of less than £40,000. The average contribution to a pension is just £6,000 a year.
I know that these tax measures will not be welcomed by all—ways to reduce the deficit never are—but we must demonstrate that we are all in this together. When looking for savings, I think that it is fair to look at the tax relief that we give to the top 1%.
I want to help the great majority of savers. That is why we are introducing a generous new single-tier pension, so that people know it always pays to save. That is why I will uprate next April the overall individual savings account limit to £11,520. We will also consult on allowing investments in equity markets for small and medium-sized enterprises, such as the alternative investment market, to be held directly in stocks and shares ISAs to encourage investment in growing businesses.
I have also listened to the concerns from pensioners about draw-down limits. I am today announcing that the Government will raise the capped draw-down limit from 100% to 120%, giving pensioners with such arrangements the option of increasing their incomes.
It is also fair to look at the way in which we uprate benefits and some tax thresholds. The basic state pension has this year gone up by the largest cash amount in its history. Next year, thanks to our triple lock, I confirm that it will rise by 2.5%, which is higher than either earnings or inflation. That takes the level of the full basic state pension to £110.15 a week.
When it comes to working-age welfare, we have already made substantial reforms. We have cut £18 billion a year from the welfare bill. Benefits are being capped for the first time, so families out of work will not get more than the average family gets for being in work. We have increased efforts to fight welfare fraud. Today, we announce further measures and checks to save more than £1 billion in the next four years by reducing fraud, error and debt in the tax credit system. Next year, my right hon. Friend the Secretary of State for Work and Pensions will introduce the new universal credit so that it always pays to work. Today, we are setting the key parameters, such as the levels of earning disregards.
We have to acknowledge that over the last five years, those on out-of-work benefits have seen their incomes rise twice as fast as those in work. With pay restraint in businesses and Government, average earnings have risen by about 10% since 2007. Out-of-work benefits have gone up by about 20%. That is not fair to working people who pay the taxes that fund them. Those working in the public services, who have seen their basic pay frozen, will now see it rise by an average of 1%. A similar approach of a 1% rise should apply to those in receipt of benefits. That is fair and it will ensure that we have a welfare system that Britain can afford. We will support the vulnerable, so carers’ benefits and disability benefits, including disability elements of tax credits, will be increased in line with inflation, and we are extending the support for mortgage interest for two more years.
However, most working-age benefits, including jobseeker’s allowance, employment and support allowance and income support, will be uprated by 1% for the next three years. We will also uprate elements of child tax credit and working tax credit by 1% for the next three years, although previously planned freezes will go ahead. Local housing allowance rates, which are a central component of housing benefit, will be uprated in line with the existing policy next April and we will then cap increases at 1% in the two years after that. For that measure, 30% of the savings will be used to exempt from the new cap those areas with the highest rent increases. The earning disregards for universal credit will also be uprated by 1% for two years from April 2014. Child benefit is currently frozen. It, too, will now rise by 1% for two years from April 2014.
Let me be clear: uprating benefits at 1% means that people get more cash, but less than the rate of inflation. Taken together, we will save £3.7 billion in 2015-16 and deliver permanent savings each and every year from our country’s welfare bill. To bring all those decisions on many benefits over many years together, we will introduce primary legislation in Parliament in the welfare uprating Bill. I hope that it will command support from both sides of the House.
We will apply a similar approach to uprating some of our tax thresholds to that that we are applying to welfare. The higher rate threshold will be increased by 1% in the tax years 2014-15 and 2015-16. So the income at which people start paying the 40% rate will go up from £41,450 to £41,865 and then to £42,285. I want to be completely clear with people: this is an increase; in fact, it is the first cash increase in the higher rate threshold in this Parliament, but it is not an increase in line with inflation, so it will raise £1 billion of revenue by 2015-16. Again, there are no easy ways to reduce the deficit, but from year to year, no one will pay a penny more in income tax.
In the same way, the capital gains tax annual exempt amount will be increased by 1% over the same period, reaching £11,100. The inheritance tax nil-band rate, which has been frozen since 2009 at £325,000, will be increased by 1% in 2015-16 to £329,000. Taken with the welfare uprating decisions, that is a fair approach to paying off Britain’s debts.
However, dealing with those debts is only one part of making Britain fit to compete in the global race. Countries like ours risk being out-smarted, outworked and out-competed by the new emerging economies. We asked Michael Heseltine to report on how to make the Government work better for business and enterprise. I think that it is fair to say that his answer has captured the imagination of all political parties.
We will respond formally in the spring, but here is what we will do now. First, Government spending should be aligned with the priorities of the local business community. We will provide new money to support the local enterprise partnerships, and from April 2015, the Government will place more of the funding that currently goes to local transport, housing, skills and getting people back to work into a single pot that LEPs can bid for. Details will be set out in the spending review. Before then, we are putting more money into the regional growth fund, which is helping businesses create half a million new jobs.
Secondly, as Lord Heseltine also recommends, we will support industries and technologies where Britain has a clear advantage. With the support of my right hon. Friend the Business Secretary, we will extend our global lead in aerospace and support the supply chains of advanced manufacturing. We are also taking big steps today to support British companies that export to new emerging markets in Asia, Africa and the Americas. I am increasing the funding for UK Trade & Investment by more than 25% a year, so that it can help more firms build the capacity of overseas British chambers and maintain our country’s position as the No. 1 destination in Europe for foreign investment. We are also launching a new £1.5 billion export finance facility to support the purchase of British exports.
Thirdly, we are addressing credit problems for companies. We are creating a new business bank, and today we have confirmed that we are providing it with £1 billion of extra capital, which will lever in private lending to help small and medium-sized firms and bring together existing schemes.
Fourthly, we are going to cut business taxes still further. Let me explain how. The temporary doubling of the small business rate relief scheme helps more than half a million small firms, with 350,000 paying no rates at all. The previous Government were going to end it in September 2011; we have already extended it to next April, and, today, I extend it by a further year, to April 2014. We also confirm today the tax relief for our employee shareholder scheme.
The Energy Bill provides certainty and support for billions of pounds of investment in renewable energy. Today, we publish our gas strategy to ensure that we make the best use of lower-cost gas power, including new sources of gas under the land. We are consulting on new tax incentives for shale gas and announcing the creation of a single office so that regulation is safe but simple. We do not want British families and businesses to be left behind as gas prices tumble on the other side of the Atlantic.
We are going to help our construction industry, too. The previous Government abolished empty property relief, and, as excellent work done by my hon. Friends the Members for York Outer (Julian Sturdy) and for Wolverhampton South West (Paul Uppal) and others shows, that has blighted development in our towns and cities. The proposal from my colleagues that we create a long grace period before newly completed buildings have to pay empty property rates is sensible, and we will introduce it next October.
The previous Government also planned to increase the small companies tax rate to 22%. We have cut it to 20%. However, I would like to help small and medium-sized firms more, and I thank my hon. Friends the Members for Burnley (Gordon Birtwistle) and for Pendle (Andrew Stephenson) for their thoughts on that matter. Starting on 1 January, and for the next two years, I will increase tenfold the annual investment allowance in plant and machinery. Instead of £25,000-worth of investment being eligible for 100% relief, £250,000-worth of investment will now qualify. That capital allowance will cover the total annual investment undertaken by 99% of all the business in Britain. It is a huge boost to all those who run a business and who aspire to grow, expand and create jobs.
I want Britain to have the most competitive business tax regime of any major economy in the world. I have already cut the main core rate of corporation tax from 28% to 24%, and it is set to fall further to 22%. That has helped British companies and frankly left other countries scrambling to keep up. They will have to try harder, for I am today cutting the main corporation tax rate again by a further 1%. In America, the rate is 40%; in France, it is 33%; in Germany, it is 29%. From April 2014, the corporation tax rate in Britain will stand at 21%. That is the lowest rate of any major western economy. It is an advert for our country that says, “Come here; invest here; create jobs here; Britain is open for business.”
We will not pass the benefit of that reduced rate on to banks, and to ensure that we meet our revenue commitments, the bank levy rate will be increased to 0.130% next year. Making banks contribute more is part of our major reforms to the banking system.
We also have to be on the side of those who want to work hard and get on. I know how difficult many families have found the cost of living. In dealing with the deficit, we have had to save money. However, whenever we have been able to help, we have. We have helped councils freeze council tax for two years running, and we are helping them freeze it again next year. We have put a cap on rail fare rises for the next two years, so commuters are not punished for travelling to work. We are forcing energy companies to move families on to the lowest tariffs for their gas and electricity bills.
We have also helped motorists with the cost of petrol. We have cancelled the last Government’s escalator, and I am moving inflation-only rises to September. Fuel is 10p per litre cheaper than it would have been if we had stuck to Labour’s tax plans, and I want to keep it that way, as I know do my colleagues, like my hon. Friend the Member for Harlow (Robert Halfon). There is a 3p per litre rise planned for this January. Now, some have suggested that we delay it until April. I disagree. I suggest we cancel it altogether. There will be no 3p fuel tax rise this January. That is real help with the cost of living for families as they fill up their cars across the country, and it will help businesses, too. It means that, under this Government, we will have had no increase in petrol taxes for nearly two and a half years. In fact, they have been cut.
We have also helped working people by increasing the amount that they can earn before paying any income tax. When the coalition Government came to office, the personal tax allowance stood at just £6,475; next April, it is set to rise to £9,205.
Twenty-four million taxpayers have seen their income tax cut; 2 million of the lowest-paid have been taken out of tax altogether. Because of the difficult decisions we have taken today, we can go even further. From next April, the personal allowance will rise by a further £235. That means a total increase next year of £1,335—the highest cash increase ever. People will be able to earn £9,440 before paying any income tax at all. This is a direct boost to the incomes of people working hard to provide for their families. It is £47 extra in cash next year. In total, it is a £267 cash increase next year. People working full time on the minimum wage will have seen their income tax bill cut in half, and we are within touching distance of the £10,000 personal allowance. And at this time, I propose to extend the benefits of this further increase to higher rate taxpayers. That decision will stand alongside the decision I have had to take on uprating, meaning that, in real terms, a typical higher rate taxpayer will be better off next year and no worse off in total by the year after.
Today we have helped working people, but I do not want to distract from the tough economic situation we face in the world. The public know there are no miracle cures; just the hard work of dealing with our deficit and ensuring Britain wins the global race. That work is under way. The deficit is down. Borrowing is down. Jobs are being created. It is a hard road, but we are making progress, and in everything we do, we are helping those who want to work hard and get on.
Ed Balls (Morley and Outwood) (Lab/Co-op)
Today, after two and a half years, we can see, and people can feel in the country, the true scale of this Government’s economic failure. The economy this year is contracting. The Chancellor has confirmed that Government borrowing is revised up this year, next year and every year. The national deficit is not rising—[Interruption.] I will say it again. Our economy is contracting this year; Government borrowing and the deficit are revised up this year, next year and every year; and the national debt is rising, not falling. It is people who are already struggling to make ends meet, middle and lower-income families and pensioners, who are paying the price, while millionaires get a tax cut—a £3 billion welfare handout to the people who need it least.
Let me spell out the full facts to the House—[Interruption.] Government Members should listen. They might learn something. In June 2010, the Office for Budget Responsibility forecast that our economy would grow by 2.8% this year. In March this year, it said there would still be growth, but revised it down to just 0.8%. Today, we learn that the Chancellor has not managed even that. Growth has not only been downgraded yet again, but he has confirmed, following the double-dip recession, that our economy is now forecast to actually contract inside this year, by 0.1%.
Let me remind the House what the Chancellor promised over two years ago in the June Budget. He said:
“We have provided the foundations for economic recovery in all parts of our nation”.
He said:
“We have set the course for a balanced budget and falling national debt by the end of this Parliament.”
And he said:
“The richest paying the most and the”
most
“vulnerable protected”.—[Official Report, 22 June 2010; Vol. 512, c. 180.]
That was the promise, but far from the Chancellor securing our recovery, our economy has flatlined since the spending review in 2010. Over the past two years, he was expecting 4.6% growth, but he has actually achieved 0.6% growth, which compares with 1.7% in France, 3.6% in Germany and 4.1% in America. We are falling behind in the global race. We learn today that growth is being downgraded this year, next year, the year after, the year after, and the year after that too—the longest double-dip recession since the second world war now followed by the slowest recovery in the past 100 years.
The result of this stagnation—rising long-term unemployment and long-term damage to our economy, falling behind now as other countries move ahead—is that the Chancellor’s fiscal strategy has been completely derailed. The defining purpose of the Government, the cornerstone of the coalition, the one test they set themselves: to balance the books and get the debt falling by 2015, is now in tatters.
What we have learned today is that Government borrowing has been revised up this year, next year and the year after that. We now know that, compared with the Chancellor’s forecast two years ago, borrowing is now forecast to be well above the £150 billion of extra borrowing that he was forecasting in March—[Interruption.] Government Members should listen to this. The Chancellor has confirmed that the Prime Minister’s pledge to balance the books in 2015 is not met in 2015, it is not met in 2016 and it is not met in 2017. The fact is that there is more borrowing this year, next year and the year after.
The Opposition will look at the detail when we get the figures—it was disappointing that the Chancellor failed to give us the cash figures adjusted for borrowing this year, next year and the year after. The unusual thing is that, just a few weeks ago, the independent forecasters were saying that borrowing would be £6 billion higher this year. We will examine the detail of those figures to see whether there has been any dodgy dealing. We will find out in the coming hours. [Interruption.] I do not know because I have not seen the figures, but I do know that there is more borrowing this year, more borrowing next year and more borrowing the year after.
The result is that the OBR shows more borrowing and higher deficits means higher national debt. The national debt—[Interruption.] The Prime Minister should listen to this, even if it might be rather shocking to find out. National debt will be higher at the end of this Parliament than the level inherited; it will be higher at the end of this Parliament than forecast in the plans he inherited; and it is no longer falling as a percentage of GDP in 2015. It is rising in 2015 and rising again in 2016, breaking the fiscal rule for falling debt upon which the Chancellor said his entire credibility depended. In last year’s Budget, the Chancellor said,
“our deficit reduction plan is on course…we will not waiver”.—[Official Report, 21 March 2012; Vol. 542, c. 795.]
On course? Not waivering? He is not waivering, he is drowning.
The Chancellor is now trying to claim that his failure on growth, his failure on borrowing and the debt, and breaking his own fiscal rule, are not his fault—that no one could have foreseen it. What nonsense; he was warned. He was warned that a tough medium-term plan to cut the deficit, tax rises, spending cuts and pay restraint, which every country had to put in place, could work only if the Government first put in place a plan for jobs and growth. He was warned that it was a huge gamble to go too far, too fast, and to rely on exports to bail him out. He was warned that there was a hurricane brewing in the eurozone, and that it was not the time to rip out the foundations of the house here in Britain. Once again, the Chancellor is trying to blame high oil prices and the eurozone crisis for negative growth this year, but they affected all countries, so why, over the last—[Interruption.]
Mr Speaker
Order. I apologise for interrupting. Members must calm themselves. Mr Byles, I thought you were normally a model of restraint and civility. Good heavens man! I do not know what has come over you. Calm yourself—take a pill if necessary, but keep calm. Take up yoga.
Ed Balls
Growth down, borrowing up, debt up—they don’t like it, Mr Speaker, do they? They don’t like it at all.
Once again, the Chancellor is trying to blame high oil prices and the eurozone crisis, so let me ask him: why, over the past two years, has Britain grown at just one tenth of the average growth rate of the G20 countries? Why has growth here in Britain been even slower than in the eurozone? It is not the rest of the world’s fault—it is his policies that have failed. He claimed that rising VAT alongside accelerated spending cuts would boost confidence, secure recovery and get the deficit down, but they depressed confidence, choked off our recovery and borrowing has been revised up. Let me ask the Chancellor: whatever happened to his Treasury view—his theory of expansionary fiscal contraction? Expansionary fiscal contraction? It is the economy that has contracted and the borrowing and the debt that have expanded. That is the truth.
When the latest figures show business confidence falling, when the world economy is slowing, when the eurozone is in such chronic difficulty, and when on current plans the Chancellor’s fiscal straitjacket tightens further next year, it is simply reckless and deeply irresponsible of this Chancellor to plough on with a fiscal plan that we all know is failing on the terms he set. That is the truth.
What a wasted opportunity this statement was. Can the Chancellor confirm that the independent OBR looked at the measures he has announced today, and that its verdict is that growth is revised down this year, next year and the year after?
Let me congratulate the Chancellor on taking our advice and stopping January’s fuel duty rise, even though Government Members all voted against it just a month ago. We welcome the U-turns on flood defences, in part, on regional pay bargaining in the NHS, and on capital allowances. After churches, charities, pasties, skips, fuel and caravans, I think this U-turning is catching on, but whatever happened to the plans for the business investment bank? As for yesterday’s announcement on infrastructure spending, the extra money for schools is just a fraction of the cut from the cancellation of Building Schools for the Future.
We have been here before. A year ago, the Prime Minister boasted of a national infrastructure plan; 12 months on, not a single road scheme has even started. Why cannot he see that he will not get the deficit down without a plan for jobs and growth? Why is he not using the 4G money to get 100,000 new homes built? Why is he not offering a national insurance holiday for small firms? Why not have a temporary tax cut for families? Even the Mayor supports that. Why is the Chancellor not repeating the bank bonus tax? The Chancellor says he cannot do any of that because it would lead to higher borrowing. Even his political attacks are backfiring, because this Chancellor’s failed plan has given us more welfare spending, higher borrowing and higher debt too. That is the reality. The truth is that the Chancellor has failed on growth and the deficit, but what is his answer? More of the same.
Let me remind the Chancellor what he told the House in the Budget of 2011. He said that
“we have already asked the British people for what is needed, and…we do not need to ask for more.”—[Official Report, 23 March 2011; Vol. 525, c. 951.]
But 18 months on the Chancellor has come back for more, and who does he think should pay? Not the 8,000 millionaires set to get more than £100,000 each in April. I have to ask the Liberal Democrats: whatever happened to the mansion tax? Do they not realise that, even with the changes in the personal allowance, as a result of the other things they have supported the average family with children on £20,000 is worse off—and that is before the VAT rise?
The Chancellor claims that his decision to restrict pension tax relief will make the tax system fairer at the top. Can he confirm that the £1 billion he is raising is less than the £1.6 billion that he gave back in pension tax relief in June 2010? And it is just a fraction of the top-rate tax cut—a £3 billion top-rate tax cut at the same time as the Chancellor is cutting tax credits for working families, cutting child benefit for middle-income families, raising taxes on pensioners in April and cutting benefits for the unemployed.
We do need to reform and modernise our welfare state and reduce its cost. Those who can work should work—no ifs or buts. We support a benefit cap, done fairly, with a higher level in London, but let us be clear. The Chancellor claimed he would cut the welfare bill, but higher inflation and long-term unemployment mean that the benefits bill is forecast to be billions higher in this Parliament than he boasted. Let me help him: welfare to work—the clue is in the name. We cannot have a successful welfare to work programme without work, and we know that the Work programme has totally failed, with only two people in 100 going into permanent jobs.
We should require every young and long-term unemployed person to take a job—and make sure there is one there. Let me ask the Chancellor about a nurse, one of the thousands cut from the NHS in the past two years, who is now struggling to find a new job. For that nurse, he has announced today that he is cutting her jobseeker’s allowance for the next three years. How can that be fair when he is cutting the top rate of tax? How can it be fair when someone earning £228,000 a year will get a top-rate tax cut of £75 a week in April, which is more than the £71 the nurse gets to live on through JSA?
We learned today that the Chancellor is not just hitting those looking for work. The majority of people who lose from his cuts to tax credits are people in work—millions of families striving hard to do the right thing. What kind of Government believe that you can only make low-paid working people work harder by cutting their tax credits, but you only make millionaires work harder by cutting their taxes, Mr Speaker? I tell you: certainly not a one nation Government.
The Government must really believe that if taxes are cut at the top the wealth will trickle down. Let me remind the House what the Chancellor told the Conservative party conference in October 2009. He said that
“we could not even think of abolishing the 50p rate on the rich while at the same time I am asking many of our public sector workers to accept a pay freeze to protect their jobs.”
Those were the Chancellor’s words. He continued:
“I think we can all agree that would be grossly unfair.”
What has changed? Nothing has changed. It was all a con and the mask has slipped. We now know that this Chancellor cannot say, “We’re all in this together” without a smirk on his face. They wanted us to think they were compassionate Conservatives. Now we find out that they are the same old Conservatives, and the Liberal Democrats have gone along with all of it yet again.
What a pity it is not to see the hon. Member for Mid Bedfordshire (Nadine Dorries) in her place, back from the jungle. She may not have succeeded in talking for the nation on many things but she did speak for the nation when she called the Prime Minister and the Chancellor
“two arrogant posh boys who don’t know the price of milk.”
It is no wonder the Prime Minister keeps losing his temper, because his worst nightmare is coming true—not snakes and spiders in the jungle, but the Government’s fiscal rule broken, their economic credibility in tatters, exposed as incompetent and unfair. Yes, he’s the Chancellor; can’t someone get him out of here? Growth down, borrowing revised up and the fiscal rules broken: on every target they have set themselves, they are failing, failing, failing. They are cutting the NHS, not the deficit; they are borrowing more than £212 billion more than they promised two years ago; and they are cutting taxes for the rich, while struggling families and pensioners pay the price—unfair, incompetent and completely out of touch.
Mr Osborne
There is only one person in the Chamber who is drowning, and it is the shadow Chancellor. That was the worst reply to an autumn statement I have ever heard in this House. If one thing changes as a result of this statement, it might be a shadow Cabinet reshuffle.
The shadow Chancellor said one thing that was true. He said it right at the beginning—he said that the national deficit was not rising. It was a Freudian slip, but it betrayed the fact that he had written his response before he heard my autumn statement and before he looked at the OBR forecast. Let me tell him that we do not fiddle the numbers in the Treasury any more—that is what happened when he was there. We have an independent Office for Budgetary Responsibility, and that is the problem he has. His whole policy was about complaining that borrowing and the deficit were going up, but that is not what the OBR forecasts show. Indeed, his prescription is to borrow even more. He complains about debt, but he wants to put it up. It is completely hopeless.
The shadow Chancellor talked about the substance of policies. Here are some simple questions that the Labour party will have to answer. If it is against the cut in the income tax rate from 50p to 45p, will it reverse it? It is the simplest possible question. [Interruption.] The Leader of the Opposition says it has not come in yet. It is coming in—it has been legislated for—so, if he is so against it and thinks it a moral outrage, will he commit to reverse it? Yes or no? That is hopeless position No. 1.
The shadow Chancellor railed at welfare benefits. I have another simple question. Will the Opposition support us or vote against a welfare uprating Bill? What are they going to do? Will they vote for or against the Bill? It is a simple question. For the first time, we have spending plans for 2015-16. He said nothing about whether he supported those plans, even though he hopes to be Chancellor that year. Does he support those spending plans? He talked about 3G. [Interruption.] They are shouting at me.
Mr Osborne
The 4G licence, yes. We are using the 4G licence. [Interruption.] May I say something about the 4G licence? The shadow Chancellor had 20 minutes to make his points, but he did not make any at all. We are using the 4G money, in part, for new capital spending, including building further education colleges, one of which is called the Leeds city college, in a town called Morley in west Yorkshire. I am not sure what the local MP would make of the shadow Chancellor’s decision that that is not the best use of the money, but he can look at himself in the mirror and ask that question.
The shadow Chancellor cannot answer these basic questions. He tries to claim that all the problems in Britain began in May 2010 and that they are all the fault of this Government. Literally only the people in the Brownite cabal claim that; there is not a single other person in the Labour party, in any business organisation or in any of the international bodies who believes that. The reason he has to maintain this completely incredible position is that if he admitted that the previous Government were responsible for the problems in our country, he would have to admit that he was responsible for them.
Out of necessity not choice, therefore, the Labour party leader has a shadow Chancellor who is more associated with the economic mismanagement that led to Britain’s problems than anyone else in Britain. He will not let his party move on. He is a man trapped in the past. The one thing the Opposition need to say is: “We’re sorry. We spent too much and we borrowed too much, but we won’t do it again”, but that is the one thing the shadow Chancellor cannot say. Until he does, though, the British public will never trust him or the Labour party with the public finances again.
Mr Andrew Tyrie (Chichester) (Con)
What the business community—the bedrock of economic recovery—needs most of all is stability, and I believe that what we have heard today delivers more stability. Does the Chancellor agree that businesses, particularly small businesses, need banks that lend? With that in mind, will he examine the radical options to achieve that—opening up banks to much more competition from new lenders, as the Treasury Committee has recommended; cleaning up bank balance sheets, as the Bank of England has advocated in the financial stability report; and possibly even breaking up one or more of the state-owned banks to improve their funding and hence lending?
Mr Osborne
My hon. Friend makes a good point: many of the problems in our economy are borne of the credit constraints and the elevated bank funding costs, which I talked about when I mentioned the OBR’s assessment of the economic forecast. There are several responses. The funding for lending scheme has brought bank funding costs down. That scheme, according to the OBR’s assessment, has had an impact, and it is an important part of our macro response. I agree with him that we must do much more to encourage competition in our banking system. We have some new entrants, but we can go further, and we need a much more competitive banking system that is able to serve the public better.
David Miliband (South Shields) (Lab)
This time last year, the Chancellor told me not to worry about youth unemployment on the grounds that his Youth Contract would take care of it. Now we know that 450,000 young people have been unemployed for more than six months and that 179,000 have gone on to the Work programme but only 5,920 have got a job as a result. That is 3% of those going on the Work programme and less than 2% of the long-term youth unemployed. Will he now agree, without point scoring, to look at the level of the wage subsidy to incentivise take-up, at the structure of the Work programme, so that voluntary organisations are not squeezed out, and at the role of a part-time job guarantee to give hope to these young people?
Mr Osborne
The right hon. Gentleman often has interesting and intelligent things to say about welfare to work programmes, and I am happy to consider the points he makes. I read some of his work earlier this year—it was quite a good job application for being shadow Chancellor.
Mr John Redwood (Wokingham) (Con)
Given that we need sensible amounts of new money and credit to fuel the private sector recovery, will the Chancellor update us on when RBS might be in a position to increase its balance sheets again—prudently—in order to make those loans available and when it might start to make a profit for the taxpayer, and will he consider the comments of those of us who think it needs to be split up to have more competitive and sensible banking?
Mr Osborne
I very much respect my right hon. Friend’s observations on the problems in our banking system. There is an aggressive plan to reduce the bad bank elements of RBS, and that plan is on track, but, as I said earlier, I want more to be done. RBS is reducing the size of its investment bank quite considerably. It also recently received advice from the Financial Policy Committee, and I hope it takes that advice into account.
Mr Alistair Darling (Edinburgh South West) (Lab)
If I understood the Chancellor correctly, the profile of rising growth that he announced today looks remarkably similar to the profile that he announced in 2010, but which singularly failed to materialise. That, of course, is one reason why he has missed his debt target. Will he tell us why we should have any more confidence in the next set of figures, which show recovery, albeit postponed for several years? Of all the capital projects that he announced today—which I think many of us would support—how many will start this year?
Mr Osborne
The first thing I would say to the right hon. Gentleman is that the forecasts we produce are independent—they are produced by the Office for Budget Responsibility. This is the OBR’s best estimate of what will happen to GDP over the next few years. As the OBR says, its forecast two years ago was wrong because of three things, which it talks about. One is that the impact of the financial crisis was greater than it had assessed. Secondly, there was an oil price shock in 2011, which hit all oil-consuming economies. Thirdly, there was the impact of the eurozone, which the right hon. Gentleman has spoken about at length. All those things have had an impact, not just on the GDP of this country but on every western democracy in the world. Indeed, they have also had an impact on some of the emerging economies.
The right hon. Gentleman makes a good point about capital investment. He speaks with experience: it is often difficult to get these projects out the door. We are speeding up the delivery of these projects—the road schemes are under way. The capital we have allocated is for the next two years. The road schemes and the like that I announced are due to start—because they have got planning permission—in the next two years.
Michael Fabricant (Lichfield) (Con)
Is the Chancellor aware that since he sat, down the markets—not the Opposition—have given their verdict? The answer is this: the latest 10-year bond rate for Italy is 4.5% and for France it is 2%—just over, in fact—while the rate for British bonds is only 1.8%. It is the markets that count, not the party that caused the problem in the first place.
Mr Osborne
My hon. Friend reminds us that we get a daily verdict on the credibility of our economic policy from bond investors. We are borrowing money more cheaply than anyone who has done my job before us, and there is a real benefit for taxpayers and members of the public in that. We have saved £33 billion in debt interest that we were forecast to have to pay in 2010, which, as I said in my statement, is more than the entire defence budget.
Mr Dennis Skinner (Bolsover) (Lab)
When the cheering has died down on the Budget statement, it will be just as it was on previous occasions, such as in 2010, when the Chancellor made his first statement. When it was stripped bare, it was a totally different story. In 2010, he promised massively to cut the deficit; but here we are, two and a half years later, and he has cut the nurses and the national health service. This posh boy never changes. Now, instead of being a Bullingdon boy who wrecks the hotel rooms, as Chancellor of the Exchequer he wrecks the economy. It is time he went.
Mr Osborne
I am not sure that that personal attack warrants a proper reply.
Mary Macleod (Brentford and Isleworth) (Con)
My right hon. Friend mentioned that 1.2 million jobs had been created in the private sector. Examples include Aker Solutions in Chiswick, in my constituency, which has gone from employing 30 staff to planning to employ 1,300 by 2015. Does he agree that this shows the Government are rebalancing the economy and encouraging inward investment?
Mr Osborne
My hon. Friend is absolutely right: jobs are being created. Of course the economic situation is tough—it is tough in every western economy at the moment—but we are rebalancing our economy. One of the things I have sought to do in today’s statement—it is not the bit that will attract all the newspaper headlines—is expand our export promotion effort and ensure that UK Trade & Investment is better at encouraging exports and investment and ensuring that British overseas chambers of commerce are better equipped in the emerging economies. All these things are so important, because one of the big strategic mistakes we made as a country over the last 15 years was not to expand our market share—in the way that Germany did, for example—in those emerging economies, which have become so important.
Mr John Denham (Southampton, Itchen) (Lab)
I have heard the Chancellor make a number of statements to this House. Is it a fair summary to say that every time he has done so, he has told us that the economy has not grown since the last time he was here, that he is planning to borrow more than the last time he was here, that spending on public services will be cut more than the last time he was here, and that future growth will be less than the last time he was here? In view of that record, should he be looking quite so pleased with himself?
Mr Osborne
This Government came in in May 2010, picking up the pieces of an incredibly difficult economic inheritance. We were recovering from the deepest recession since the second world war—which, as I pointed out in my statement, was a contraction of over 6% in the economy, which puts today’s numbers into some context—and we were dealing with the problems in the banking system, and we have been hit with the problems in the eurozone. Despite all that, we have made progress. We have got credibility in the bond markets, as my hon. Friend the Member for Lichfield (Michael Fabricant) said, the deficit has come down, and jobs are being created. It is a difficult situation, but we are on the right track. Going back, as the right hon. Gentleman would suggest, would be a complete disaster.
Stephen Williams (Bristol West) (LD)
Liberal Democrat priorities for the coalition have been delivering £10,000 of tax-free pay for every working family in the country, effective taxes on the wealthy, and closing down opportunities for tax evasion and tax avoidance. Does the Chancellor agree that today’s very welcome news of a further rise in the personal tax threshold—to £9,440, putting us within touching distance of £10,000—a restriction on tax relief on pension contributions for the very rich, and more resources to tackle tax evasion and tax avoidance effectively show that the coalition Government are committed to tax fairness even in difficult times?
Mr Osborne
I do agree with my hon. Friend. It is worth remembering that we put together these difficult autumn statements and the like in a coalition. We are able to demonstrate to the rest of the world that Britain has strong and decisive government. I am grateful to my Liberal Democrat colleagues who have helped me in this. I hope that Liberal Democrats and Conservatives can celebrate the increase in the personal allowance. There are many Conservatives who also wanted to achieve that, and it was in the Liberal Democrat manifesto too. The fact that we are able to do that shows that we are helping working people even in these difficult times.
Sammy Wilson (East Antrim) (DUP)
I acknowledge some of the positive impacts that this statement will have on Northern Ireland, including saving people from increases in their electricity bills as a result of the exemption from the carbon price floor, lifting 8,000 people out of tax, and an additional £135 million of capital spending. However, given the rocky road that the Chancellor has said lies ahead and given his credibility in the markets, could he not find his way to borrowing more money for infrastructure projects to create jobs, rather than paying to keep people on the dole?
Mr Osborne
I welcome the hon. Gentleman’s support for some of the measures we have taken to help the Northern Irish economy, which I am well aware has particular problems in the banking system that require even more attention. I have always sought to respond to the Executive’s proposals where there is a specific case for Northern Ireland, as we did with transatlantic flights, for example. More generally, we are committing additional money to infrastructure, and I want some of that additional infrastructure to be in Northern Ireland. We are also guaranteeing infrastructure projects across the United Kingdom, and £10 billion of projects have pre-qualified for that under the legislation we took through Parliament this autumn. That scheme is available to people and companies in Northern Ireland, and if the Executive want to talk to the Treasury about what more we can do to encourage take-up in Northern Ireland, I would be happy for those conversations to take place.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
I welcome my right hon. Friend’s proposals, particularly the extension of the expenditure envelope for infrastructure plans, but will he personally ensure that our transport policy is fully integrated? At present, the proposals for HS2 completely ignore any plans we might have to expand our airport capacity. There is little point in building or announcing any extension to the railway if it does not connect adequately to our major international hub airport. Will he personally look into this?
Mr Osborne
Of course I understand why my right hon. Friend speaks on behalf of her constituents who will be affected by the High Speed 2 development, but I think that it is the right infrastructure for our country, and that it will help to change the economic geography of Britain by connecting some of our northern and midland cities with London. I hope she will acknowledge that we have been generous with some of the compensation as well. She asked specific questions about the extension to Heathrow and the design of the route. My right hon. Friend the Transport Secretary would be better placed to answer them, and in the new year he will have more to say about the route to the north-west and to west Yorkshire.
Dame Joan Ruddock (Lewisham, Deptford) (Lab)
Bloomberg New Energy Finance has demonstrated that investment in renewable energy has fallen by a half since this Government came to power. Does the Chancellor not agree that we need to look to the future and to invest in green jobs? To that end, will he stop the veto in the Energy Bill of the 2030 decarbonisation target that has been demanded by 1,500 leading companies in this country and recommended by the Committee on Climate Change?
Mr Osborne
This Government have introduced the UK Green Investment Bank, which is now making investments. I have also introduced a carbon price floor, which is recognised around the world as an effective way of ensuring the decarbonisation of our economy in a market-driven way. We have just published the Energy Bill and a levy control framework that would allow for new investment in renewables through the rest of this decade. The industry has that certainty, alongside the gas strategy. On the decarbonisation target, we are going to take a power in the Bill to set a target, but that will be a decision for after the next carbon budget, which will happen in 2016. That is a perfectly sensible and rational approach to take.
Claire Perry (Devizes) (Con)
I congratulate the Chancellor on a statement that was fair, transparent, business-friendly and pro-growth, and that confirmed that the deficit is not only not rising but falling in every year of this Parliament. With 19 days to Christmas, which of his family-friendly measures—including scrapping the fuel duty increase, freezing council tax and raising the personal allowance next year—does he think will do most to benefit British families?
Mr Osborne
We have had to take some difficult decisions on welfare uprating and on tax threshold uprating, but I have tried to help families where I can with the personal allowance and with fuel duty. I have also tried to help businesses, and the annual investment allowance increase to £250,000 will be extremely welcome.
Mr Michael Meacher (Oldham West and Royton) (Lab)
How can the Chancellor seriously pretend that he is cracking down on tax avoidance when the £7 billion he referred to today will take up to seven years to realise, at a rate of about £1 billion a year, against a rate of tax avoidance of £35 billion a year? The general anti-avoidance rule that he mentioned is far too narrowly drawn to be effective and—[Interruption.] I hope that he will listen to this. At the same time, he is introducing a tax cut from 23% to just 5% for multinationals in tax havens.
Mr Osborne
I do not think that the right hon. Gentleman has the right figures. We are increasing the amount recovered from taxes that should have been paid from £13 billion under the Labour Government to £20 billion. That £7 billion increase, plus the £2 billion that I have announced today, makes a £9 billion increase in the taxes that should have been collected and that we are now collecting. I hope he will welcome and support that. By the way, we have also got rid of the situation that happened when the current Leader of the Opposition and the shadow Chancellor were in the Treasury, in which people in the City were paying lower tax rates than the people who cleaned for them. We have dealt with that problem.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Will the Chancellor note that businesses in the north-east will welcome the announcements that he has made today, including that of the removal of bottlenecks on the A1 south of Newcastle, but that there will be concern that he has not yet announced any progress towards dualling the A1 north of Newcastle, a project that his own party promised in 1992?
Mr Osborne
I am glad that my right hon. Friend welcomes the decision to increase the A1 to motorway standard between the M25 and Newcastle. He makes a powerful point about the A1 north of Newcastle, and I can tell him that the Chief Secretary to the Treasury is also a powerful advocate of that road scheme. It is one of the things that the Department for Transport will look at as well, so it is certainly not off the cards. What I have committed to today is the dualling of the A1 up to motorway standard all the way to Newcastle.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
The Chancellor has re-announced the creation of the business bank and the funding for it, which is welcome in itself. However, there is widespread incomprehension in the business community as to how that will facilitate lending to small and medium-sized enterprises. Will he take this opportunity to explain how the bank will fill in for small businesses in a way that the existing banking structure does not?
Mr Osborne
My right hon. Friend the Business Secretary will set out more detail about the business bank. What I have confirmed today is the £1 billion of additional capital. Our ambition is that this will help to lever in private sector capital as well. Through the business finance partnership, which is not included in this £1 billion, we have already undertaken work to get more non-bank financing to medium-sized companies in particular. We are looking at similar models for the business bank, and my right hon. Friend will make an announcement on that. We are also going to use the opportunity to bring together all the myriad schemes announced by various Governments on business finance, finance for SMEs and the like, which are sometimes confusing, so that the business community has just one place to go to. As I have said, I have announced £1 billion extra for the business bank.
Andrew Selous (South West Bedfordshire) (Con)
I thank the Chancellor profusely for ending the appalling delay in the building of the A5-M1 link, the construction of which was first announced by the previous Government in 2003. That road will contribute massively to the south Bedfordshire economy, enabling us to contribute to the regeneration of UK plc.
Mr Osborne
I thank my hon. Friend for campaigning assiduously for that project. He has made a strong case for how the new link road will open up the prospect of real economic development as well as dealing with traffic congestion. That is exactly the kind of programme that we can undertake—it did not happen under the last Labour Government—because we have made the switch from current spending to capital spending. Again, I congratulate him on the campaign that he has fought, which I think has involved quite a few Adjournment debates in the House.
Mr David Lammy (Tottenham) (Lab)
Given the falling number of nurses in the NHS, does the Chancellor recognise that people will view with scepticism what he has said about protecting the NHS? Will he also acknowledge that passing on a 2% cut to local government will involve cuts to adult social services across the country, affecting the vulnerable, the disabled and the elderly?
Mr Osborne
We have provided billions more for social care—[Interruption.] I just want to make this point to Labour Members. They want to be in government, and they claim that they want to cut the deficit, but what would they cut? They object to the local government settlement, the defence settlement, the NHS budget and the education budget, even though the budgets on the NHS and schools are going up, so what exactly would they do? It was evident from the shadow Chancellor’s response today that they do not actually have anything to say on these matters. If they had a credible deficit plan, we would listen to their questions about the priorities for these plans.
John Stevenson (Carlisle) (Con)
The investment of £270 million in schools and further education colleges is extremely welcome. If schools and colleges in my constituency have plans on the runway that are ready to take off but just need a little additional financial support, will the Chancellor help them to take the leap?
Mr Osborne
I am very happy to look personally at the case that my hon. Friend makes for his local education facilities. These are of course decisions for other Departments, but we have provided the money for further education, for new free schools and academies, and for expanding places, and I am sure that Carlisle should be near the top of the list.
Steve Reed (Croydon North) (Lab)
Is the Chancellor aware that, because of his continuing inadequate level of funding for school building, which today’s statement does not correct, London Councils—a cross-party body—is estimating that, by 2016, one in every 10 primary school-aged child will not have a permanent school place?
Mr Osborne
I should like to take this opportunity to welcome the hon. Gentleman to the House of Commons and to congratulate him on his by-election victory. He rightly wants to speak on behalf of his constituents, but I would point out that the pressure on London school places has existed for some years and was a huge issue when we came to office. We have provided additional capital spending for new school places. We have also announced more than £1 billion today to deal with areas where there is high pressure. He makes a powerful case for Croydon, and I will make sure that my right hon. Friend the Education Secretary hears him.
Julian Smith (Skipton and Ripon) (Con)
More money for the regional growth fund and local enterprise partnerships is great news for Yorkshire. Can the Chancellor give further details of that?
Mr Osborne
There will be more money for the regional growth fund. That has been helpful in securing and creating up to half a million new jobs. I am glad to say that I am sure businesses across Yorkshire will benefit from that. We are also, of course, investing in enterprise zones and LEPs across Yorkshire, and Yorkshire businesses will benefit from the enhanced capital allowance and the increase in the annual investment allowance.
Jack Dromey (Birmingham, Erdington) (Lab)
Seven Government Get Britain Building launches have proved to be false dawns. Housing starts are down; homelessness is up; we have a mortgage market where people cannot get mortgages and rents are at a record high in the private rented sector. Does the Chancellor now accept that his decision to cut £4 billion-worth of investment was directly responsible for a 60% collapse in affordable house building? Will he now accept personal responsibility as the Chancellor of the Exchequer presiding over the biggest housing crisis in a generation?
Mr Osborne
House building was at an all-time low under the Labour Government—the lowest, I think, since the 1920s or 1930s. That is what had happened. Of course, things such as problems in the mortgage market were created by the banking crisis and the financial crisis. The banking crisis happened, by the way, when the right hon. Member for Morley and Outwood (Ed Balls) was the City Minister. The funding for lending scheme is bringing mortgage costs down. The Firstbuy scheme helps with shared equity, and the new buy scheme is helping people who cannot afford their first deposit, so we have those schemes out there, helping to repair problems in the financial markets. We are also committing money for additional affordable homes and we are providing guarantees to social landlords to build not just social homes, but homes for the private rented sector. We are dealing with the problems that occurred when the hon. Gentleman’s party was in office.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
I congratulate my right hon. Friend on his statement, and I would particularly like to welcome the fund that will allow good schools to expand. Can he tell us when that might be in place, as the need is more pressing in some areas than in others, particularly around Basildon, where I would like to see the Lee Chapel primary school expand rapidly?
Mr Osborne
My hon. Friend makes a powerful case for Basildon, its schools and the particular school he mentioned. I will make sure that the Education Secretary hears the argument he makes. The money is available over the next two years.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
What will the Chancellor do to make sure that any Scottish Barnett consequentials from capital projects will be used to create jobs in Scotland, and not in China, which is what we saw the Scottish Government doing in awarding the contract for the Forth road bridge?
Mr Osborne
There will be additional capital spending. We have a devolved arrangement so it will be up to the Scottish Government and the Scottish Parliament to make a decision about how that money is spent. Of course, I expect Scottish Members here and Labour, Conservative and Liberal Democrat Members of the Scottish Parliament to hold the Scottish National party to account for the decisions it takes. More broadly, its independence programme would be a disaster for the Scottish economy.
George Freeman (Mid Norfolk) (Con)
Families and businesses in my constituency will welcome the news that £76 billion-worth of reductions in the cost of government, £18 billion-worth of reductions in welfare and £33 billion-worth of savings in interest payments have allowed a Conservative Chancellor to lower taxes for the poorest and create a million new jobs. Does my right hon. Friend agree with me that plan B is nothing more than a plan for borrowing and bankruptcy?
Mr Osborne
I am not sure that I can add much to that, except to say that I completely agree with my hon. Friend.
Mr Ronnie Campbell (Blyth Valley) (Lab)
I have heard mention of at least a dozen Tory MPs in marginal seats getting a lot of money, but I have not heard much about the north-east getting money. I hope the Chancellor will not come and give us what he gave us last year, when he said that the port of Blyth was going to get an enterprise zone. We have 14 hectares. We have put a fence around it and made it into an allotment garden.
Mr Osborne
I congratulate the hon. Gentleman on his assiduous campaign for an enterprise zone in the port of Blyth. That enterprise zone is going ahead. As a Conservative Chancellor, may I also congratulate him on his campaign, along with many other hon. Members, for the dualling of the A1 all the way to Newcastle? Since I know that Blyth is north of Newcastle, I point out that, as I said to my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), we are looking at further dualling to the Scottish border, but that is for another time.
Gordon Birtwistle (Burnley) (LD)
I congratulate the Chancellor on his decision on capital allowances, which I think will be a major boost for industry. Over the next 20 years, the aerospace industry across the world will invest between $6 trillion and $7 trillion on new aeroplanes. This country is the second biggest aerospace provider in the world, and this is twice the capacity we have now. Does the Chancellor agree that we must continue to invest in advanced manufacturing, particularly in aerospace, and that we should carry on trying to get young people involved?
Mr Osborne
I completely agree with my hon. Friend. I congratulate him on the work he has done to make the case for capital allowances to help small and medium-sized businesses in Lancashire and in his Burnley constituency. He wrote a report, which I thought was compelling, and he put in the work of listening to his local manufacturers. He is completely right about manufacturing. I have been to some very high-tech manufacturing businesses in north Lancashire, which make components for some of the most up-to-date jet engines in the world. We are investing more money in the aerospace supply chain, and as I announced today, we are investing more in the advanced manufacturing supply chain. With the help of my right hon. Friend the Business Secretary, we are determined to make sure that Britain’s premier place in aerospace is maintained.
Ian Austin (Dudley North) (Lab)
If we look at the small print, we see that the only reason why borrowing has fallen this year is that the Government have added in the proceeds of the 4G mobile spectrum auction into this year’s figures, even though Government delays have meant that the auction has not yet taken place. If those figures were not added in for this year and we did not have this £3.5 billion pencilled in for the receipt from that, borrowing would be £2 billion higher this year than it was last year. Is that not the case?
Mr Osborne
The deficit and borrowing are falling any way the public figures are presented. We have done this in a completely transparent way. As I was explaining to the shadow Chancellor, the 4G money has been used to refurbish, for example, the further education college in Morley.
Jane Ellison (Battersea) (Con)
I warmly welcome the announcement of the Government’s support for the Northern line extension in the important Nine Elms-Vauxhall development. Does he agree that it is not just the 16,000 new homes and 25,000 new jobs that are important, but the message that such a high-profile scheme sends out to the world beyond the UK—that Britain and London are open for business—is also crucial?
Mr Osborne
The Battersea power plant development is, as I said in my statement, as big as the Olympic park—it is an enormous project, and I am very pleased that we have our Malaysian partners investing in the site. We have done our bit by providing this loan and this guarantee that will help to pay for the Northern line extension into Battersea power station. I commend my hon. Friend—I have been to the site with her—and I know what an enormous boost this will be, not just for her constituents but for the whole of London and, indeed, Britain.
Mark Durkan (Foyle) (SDLP)
Of course I welcome the Chancellor’s confirmation of ultra-fast broadband for Digital Derry, and the announcements on the carbon price floor and the fuel duty, but I am afraid that on personal taxation and benefits, the Chancellor is becoming something of a fiscal drag artist.
On another tax front, I welcome the fact that he has cut through all the Treasury excusery against the general anti-abuse rule, but surely it needs to be more robust. If it is going to be a meaningful priority of the G8 presidency to co-ordinate members against corporate tax conjuring, the Chancellor surely has to start by revisiting the controlled foreign company rules that he made in the last Budget.
Mr Osborne
First, I thank the hon. Gentleman for his support of our decision to provide ultra-fast broadband to Derry/Londonderry, and I congratulate the city on a very good bid, which competed against other bids across the UK. He is also right to say that we are helping the Northern Ireland energy sector with decisions on the carbon price floor, which I did not have space in my statement to announce, but they are in the book. I am glad that he acknowledges those aspects. More broadly, Northern Ireland and the rest of the UK will benefit when we help people who work hard and want to get on with the personal allowance and when we help small businesses and motorists with the fuel duty. We are doing all these things and are making sure that they apply to Northern Ireland as well.
Mr Brooks Newmark (Braintree) (Con)
Given that income tax has been cut for 25 million people, the income tax of people on the minimum wage has been cut in half and up to 2 million people have been taken out of tax altogether, does my right hon. Friend agree that our Government, and indeed our party, are on the side of ordinary working men and women?
Mr Osborne
I entirely agree with my hon. Friend. We have made difficult decisions on welfare uprating—we have asked the rich to pay more—but, as I have said, we have done that not only to help to deal with the deficit, but to help people who work hard and want to get on. That is precisely what we have done today
Helen Goodman (Bishop Auckland) (Lab)
Further to the answer that the Chancellor gave my right hon. Friend the Member for Morley and Outwood (Ed Balls), will he admit that in 2010 he cut public spending in the north-east by £2.8 billion, that last year he gave us 0.03% of the capital spend, and that this year he gave us 3%? Far from being fair, does that not mark a transfer of resources from the north to the south?
Mr Osborne
Under this Government, the level of capital spending is higher than the level in the plans that we inherited from the last Labour Government—which the hon. Lady supported at the time of the last Labour Budget—and, indeed, we have added to it today. Under this Government, the level of public investment as a proportion of GDP is higher than the average level under the Labour Government. As for investment in the north, there is the investment in the A1, the investment in High Speed 2, and the investment in the northern rail hub. There is a whole load of investment in the transport infrastructure of the north and the north-east because we are helping this country, which suffered so much under the Labour Government, when the gap between the north and the south grew.
Bob Blackman (Harrow East) (Con)
I congratulate my right hon. Friend on announcing the abolition of Labour’s expensive private finance initiative schemes, but may I ask him what the impact will be on schemes on which we have already agreed and which are awaiting approval, such as the one involving a replacement for the Royal National Orthopaedic hospital in my constituency?
Mr Osborne
We do not intend to disrupt existing PFI schemes—although, sadly, there are not many left, because so many dried up at the very end of the last Labour Government’s time in office owing to financing problems—and the new PFI 2 will help to restart private and public investment. The big difference is that from now on, instead of the public sector bearing the risk and getting none of the reward—as has happened, for example, in the case of a hospital project not in my hon. Friend’s part of London but in south-east London—it will share in the upside as well.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Can the Chancellor confirm that the capital spending that he has announced for free schools amounts to less than a third of the cuts in the capital budgets for schools and colleges?
Mr Osborne
Capital spending is higher than the level in the plans that we inherited from the last Labour Government. That is simply the case. We inherited big planned cuts in capital spending, and we have increased capital spending, off those plans. We have that new money for schools, and I would hope that the hon. Lady would welcome that.
Gavin Williamson (South Staffordshire) (Con)
Can my right hon. Friend confirm that someone earning £10,000 who would have paid £1,180 in national insurance contributions and income tax in 2010-11 will pay £380 in 2013-14? Does that not show that Government Members support people and families on low incomes, unlike the Labour party?
Mr Osborne
My hon. Friend speaks very powerfully about the way in which we have helped people. We have helped basic rate taxpayers by increasing the personal allowance, we have taken 2 million of the lowest paid out of work, and we have halved the income tax bill for people on the minimum wage; but, above all, we have helped working families throughout the country with a further income tax cut today.
Caroline Lucas (Brighton, Pavilion) (Green)
One glimmer of good news was the announcement of ultra-fast broadband for Brighton, and I thank the Chancellor for that, but there is plenty of bad news about the dash for gas. Not only will it bust our climate targets, but it simply is not cheap. Deutsche Bank, the CBI and the International Energy Agency all say that gas prices will rise. This is the Government who say that they like to make evidence-based policy, so why will the Chancellor not look at the evidence in this instance?
Mr Osborne
I am glad that the hon. Lady welcomes the announcement of ultra-fast broadband for Brighton and Hove. As for energy, we are increasing investment in renewable energy. We have set a levy control framework for the period up to 2020, which is a longer time frame than has been set by any Government before us, and that will increase the investment in renewable energy that the hon. Lady wants to see. However, I also think that it is fair for Britain to have a mix of energy sources, and for gas to be part of that. Gas is lower in carbon than the coal-fired generation that is being phased out. We want a proper mix, and we want to do what we can to keep bills down while at the same time allowing investment in new energy infrastructure.
David Rutley (Macclesfield) (Con)
It is often said that when a challenge must be faced, two Eds are better than one. Does the Chancellor believe that that applies to economic policy?
Mr Osborne
I am not sure that they will be such close friends today after the shadow Chancellor’s response to my statement. However, we do not need to guess what the economic policy of the Leader of the Opposition and the shadow Chancellor might be, because we have lived through it. They caused the biggest boom and the biggest bust in our history, despite advising the then Chancellor at the time to say that he would abolish boom and bust.
Kevin Brennan (Cardiff West) (Lab)
In the interests of transparency, will the Chancellor confirm that the only reason he was able to say in his statement that borrowing would be less this year was the inclusion of the proceeds from the 4G sale, which has not actually happened yet?
Mr Osborne
As I have said, we have set out the public finance numbers applying to all the different scenarios, and, as I have said, we are spending the 4G money on, for example, the further education college in Morley. We are also using it to increase the annual investment allowance from the beginning of January.
Stephen Gilbert (St Austell and Newquay) (LD)
Hundreds of thousands of firemen, police officers, nurses and council workers throughout the country will be very pleased to learn that my right hon. Friend has ruled out the introduction of regional pay, but teachers may have some concerns. Can my right hon. Friend assure us that none of them will lose out in respect of any move towards greater incentivisation in the profession?
Mr Osborne
We asked the pay review bodies to make reports, and we have adopted their recommendations. My right hon. Friend the Secretary of State for Education will set out more details of the way in which we will implement the recommendations of the teachers’ pay review body, but it does include the uprating of the minimum and maximum bands in line with general public pay policy.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
The announcement of additional investment in transport is very welcome, but can the Chancellor assure us that it really is additional spending, and that it will not be paid for by the postponing of existing programmes now that the size of the Department for Transport has been so drastically reduced?
Mr Osborne
I can confirm that it is additional capital spending, and that it is not a substitute for any other capital spending on transport. Moreover—I did not mention this in my statement, but it is in the document—we are providing money for road schemes that are in the pipeline, to ensure that the development of new road schemes is not squeezed out by the capital that we are giving to existing ones.
Mr Philip Hollobone (Kettering) (Con)
Can my right hon. Friend confirm that since he became Chancellor of the Exchequer, he has abolished Labour’s fuel duty escalator, cut the rate of fuel duty and frozen it at the new levels? As a result, from January the typical motorist in Kettering and throughout the country will pay £5 less every time he fills up at the pump.
Mr Osborne
I suppose we are used to opportunism from the Opposition, but we see no greater opportunism from them than that relating to fuel duty. The fuel duty rises that we have cancelled were not part of some mythical plan; they were voted for by Labour Members of Parliament at the time of the last Labour Budget—including, of course, by the shadow Chancellor. My hon. Friend is absolutely right: fuel is 10p per litre cheaper than it would have been if we had adopted the shadow Chancellor’s Budget plans.
Mr Andrew Love (Edmonton) (Lab/Co-op)
Let me return the House to an answer that the Chancellor gave about PFI. He slipped the new PFI 2 scheme into his statement today, but is it not being criticised on the grounds that it is not good value for money—that value for money will, indeed, fall—that it will cost the taxpayer more, and that most of the projects will still be off the Government’s balance sheet? What has changed?
Mr Osborne
I do not accept that characterisation at all. I talked about this matter in the statement, and, of course, I expect people to look in detail at the document we have published. There are two substantial changes. First, there will be public sector investment alongside private investment. The public sector will have a share in the equity and will have representation on the boards of these projects to make sure both that we share in the upside and that we know what is going on with these projects, instead of the absolute scandal that we saw under the last Government when on many occasions the public sector was ripped off. The hospitals in south-east London are living with the consequences of that.
Secondly, there will be more on balance sheet in future, but there will also be off balance sheet, and we are going to have new off balance sheet totals and controlled totals so that there is more transparency. I will say more in the Budget about how we are going to account for off balance sheet.
Mr Speaker
Order. The statement covers matters that are already the subject of much public interest and comment, so I am keen to accommodate as many colleagues as possible. If I am to do so within any reasonable time frame, however, some pithiness from Back and Front Benches alike is required, and I am sure we will be led in our mission by Mr Andrew Bridgen.
Andrew Bridgen (North West Leicestershire) (Con)
Does my right hon. Friend agree that the Opposition’s plans for £200 billion of extra spending, extra borrowing and extra debt would damage this country’s economic credibility, and ultimately lead to interest rates rising for families and businesses in my constituency and across the whole country?
Mr Osborne
My hon. Friend is absolutely right. That is precisely what the Labour party offers: more borrowing, more debt, and a return to the mess it left this country in. People are not going to trust Labour with the public finances again, and they are particularly not going to trust the shadow Chancellor again.
Ian Lavery (Wansbeck) (Lab)
In my constituency, 15.9% of young people aged between 18 and 24 are unemployed. That is twice the national average. What is in the autumn statement for them?
Mr Osborne
First, of course any young person who cannot get a job is a matter of regret, but youth unemployment has fallen this year. Our welfare to work schemes are helping to get people back to work, and our work experience scheme in particular is doing a great job of getting people into work, so I would ask those young people to go to their jobcentre and see the schemes that are available. As I have said, 1.2 million jobs have been created in the private sector over the past couple of years, in what are very difficult circumstances. I hope that, with the measures we announced today, business will be able to create some more jobs.
Robert Halfon (Harlow) (Con)
On behalf of my colleagues and FairFuelUK, I thank my right hon. Friend for putting fuel back into the fuel tanks of white-van Conservatives across the country. Can he confirm that the scrapping of the 3p petrol rise not only for three months, but permanently, as he has said today, will mean the average Harlow motorist will be better off by £80 to £100 next year?
Mr Osborne
As I said in my statement, I congratulate my hon. Friend on speaking for motorists and families across the country against Labour’s fuel tax rises. He speaks for Harlow man and woman, and I am glad that, as a result of his campaigning and the difficult decisions we have taken elsewhere to control public spending, we have been able to cancel altogether that fuel duty rise due for January.
Paul Goggins (Wythenshawe and Sale East) (Lab)
When the Chancellor describes those on benefits as people who sleep while others work, he does himself no credit whatever. Of course the cheats have to be dealt with, but most of these people are decent people—pensioners and parents who are struggling to make ends meet. Given that they already face cuts to their benefits and public services, how can it be right that they are now to have a real-terms cut to their poverty-level incomes while millionaires keep their handouts?
Mr Osborne
Out-of-work benefits have increased by 20% over the last five years, while average earnings in the public and private sectors have gone up by 10%. We have to make difficult decisions, and I think it is a fair decision to uprate working age benefits by 1%. We are also uprating the higher-rate tax threshold by 1%. This is a fair decision. If the right hon. Gentleman can recommend other ways of taking substantial sums out of the Government’s bill, let him come forward with them—and I still have not heard from a single Labour MP whether they will be voting for or against the welfare uprating Bill.
Mr Peter Bone (Wellingborough) (Con)
One way the Chancellor could produce a lot of money at no expense to the British economy is, of course, by not going ahead with overseas aid at 0.7% of gross national income. How much additional borrowing will be required to meet that commitment?
Mr Osborne
My hon. Friend and I have a genuine disagreement on this matter. I think it is right for this country to honour its obligations to the world’s poorest. I think we should be proud to be a part of, and support, what will be the first Government in British history to reach the 0.7% target. I have had to rebase the aid budget because of the GDP forecast, as I do not want to spend more than 0.7% of national income. As a result, the Department for International Development has had one of the biggest adjustments to its budget of all Departments.
Roberta Blackman-Woods (City of Durham) (Lab)
Last year the Chancellor announced more money for infrastructure, but, as we know, not one single project has been delivered. Why should we believe the additional funding announced today will be any more productive?
Mr Osborne
That claim is simply not true. Road projects are being completed across the country and infrastructure is being deployed. The science infrastructure, for example, has now all been completed, and I have announced £600 million more for science. If the hon. Lady is saying that it takes a long time to get some infrastructure projects going because of the constraints in the planning system, however, she is right. That is why we have also taken steps to streamline the process we inherited so it is easier to get things built by tackling the bureaucracy that has to be dealt with, while at the same time allowing those who have objections to have them fairly heard.
Mark Menzies (Fylde) (Con)
I am pleased the Chancellor has today announced that there will be a shale gas regulator office. Can he assure me that its work will be transparent and will lead to my constituents getting the assurances they need that this important process will be safe?
Mr Osborne
First, let me say that I completely understand why my hon. Friend wants to make sure, on behalf of his constituents in Lancashire, that any development of shale gas or unconventional gas that is undertaken is environmentally safe and safe for local communities. We are absolutely determined to ensure that that is the case. That is why we stopped the exploration that was taking place until we were sure that it was safe, and a decision on that is still pending from the Energy Secretary. As has been demonstrated in the United States, however, local communities often benefit from the jobs and investment shale gas projects bring. My hon. Friend is right that this new single office must make sure that regulation is straightforward and simple while also being rigorous so that local communities are protected.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The north-east is the only UK region with an export surplus, which shows that where there is demand, we rise to the challenge, but it is also the region with the highest unemployment rate, so why is the Chancellor attacking the unemployed as workshy scroungers living a life on benefits and doing nothing to get demand and jobs back in the economy?
Mr Osborne
I have never used that language at all. What I have said is that we have got to make savings in the benefits bill and, in my view, it is very important that we have fairness in our society. One element of fairness is that people on out-of-work benefits should not be earning more on average than the family that goes to work, which is why we have introduced the benefits cap. I could not quite understand what the shadow Chancellor was saying about Labour’s position on the benefits cap. He certainly led all Labour Members through the Division Lobby time and again against the benefits cap, but I think they will want to check exactly what he said in reply to my statement.
Steve Baker (Wycombe) (Con)
This morning City A.M. reported that just 6% of the public appreciate that this Government have been forced to put up the national debt. Will my right hon. Friend confirm that the deficit is coming down, and will he take steps to ensure that discussion in the media is based on the facts, not the incoherence and cruel fairy tales of the Labour party?
Mr Osborne
I will certainly work with my hon. Friend and publications such as City A. M. to make sure that happens. The deficit is how much is added to the debt each year, and we are getting the deficit down. We inherited the highest budget deficit in the world, and we have been able to reduce it by 25%.
Yvonne Fovargue (Makerfield) (Lab)
The Treasury will benefit by £1.1 billion per annum from the high earners’ pension pot cut and by £3.7 billion per annum from benefit claimants. Is this not just an inconvenience for the rich but a catastrophe for the poor?
Mr Osborne
As I say, we have had to make difficult decisions. Are Labour Members against the uprating of welfare benefits by 1%? We will find out when the Bill is before Parliament—at the moment, they are not telling us how they would vote on that measure. We have had to make difficult decisions, but let me repeat what I have said at this Dispatch Box: the rich are paying more as a share of our income tax in every single year of this Government than they did in any one year of the 13 years of the Labour Government. The pensions tax measure is a difficult measure, but we felt it was necessary to take it. We have also increased the amount of money we are getting from dealing with tax avoidance and we have taken decisions such as putting stamp duty up to 7%. We have done all those things, not one of which was done by the Labour party.
Christopher Pincher (Tamworth) (Con)
Half a dozen European Ministers, from within the eurozone and outside it, have stated in terms that they do not believe that growth should be used as a pretext for running up more and more debt. Does my right hon. Friend agree that those Ministers show a degree of foresight and common sense that is sadly lacking in the shadow Chancellor?
Mr Osborne
That powerful point was made by the Finance Ministers of not only Germany and Sweden but some of the Baltic states. One of the tragedies of British economic management under the last Government is that we went into the crisis with a huge structural deficit. The International Monetary Fund has now assessed that Britain carried the largest structural deficit of any major western economy going into the banking crash, yet extraordinarily the shadow Chancellor goes around saying that there was no structural deficit. If we had managed our public finances like Germany, for example, we would be in better shape.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The Treasury-sponsored Silk commission recently recommended the devolution of minor taxes to the Welsh Government and a tax-sharing arrangement for income tax, partially to incentivise the Welsh Government to develop the Welsh economy. When will the Treasury publish a timetable for implementation, as well as the bilateral agreement on borrowing powers?
Mr Osborne
We welcome the work that the Silk commission has done. It asks some big questions about the devolution of fiscal powers to Wales. The Treasury and the Wales Office here in London are sitting down with the Welsh Assembly Government to work through the details of the proposals. I hope that the hon. Gentleman understands and accepts that we have taken a big step forward with the Silk commission and now have a text we can work on. How much we can implement will, of course, be a matter for democratic decisions in this House and in the Welsh Assembly in Cardiff.
Jackie Doyle-Price (Thurrock) (Con)
Businesses across south Essex will welcome the commitment that my right hon. Friend has made to improving the road infrastructure around the M25, which is its biggest constraint on growth and job creation. That illustrates the Government’s real commitment to creating more jobs in this vibrant sector. Does he agree that the Exchequer will benefit hugely from the increased tax receipts that will be generated by those increases in jobs and growth?
Mr Osborne
I congratulate my hon. Friend on the campaign she has fought on behalf of her constituents, and on behalf of jobs in Thurrock and elsewhere. The junction 30 upgrade will help to secure the largest port investment in the whole of northern Europe—it is a fantastic thing for the area, it will create many jobs and she has played a real part in helping to deliver it.
Mr William Bain (Glasgow North East) (Lab)
With the average wage 7.9% lower in real terms than it was when this Chancellor took office, does he not share the sense of real disappointment across the country that he did not announce any new measures on child care, the cost of which is rising at twice the rate of inflation? Does that not constitute a significant barrier to work for as many as 1 million women and mean that for many households work does not pay?
Mr Osborne
We have announced new entitlements on child care, such as the entitlement for two-year-olds from more disadvantaged families to nursery places, which did not exist under the previous Government. We are also working on new proposals on child care, and I hope in the first half of next year to bring those forward.
Alec Shelbrooke (Elmet and Rothwell) (Con)
May I warmly welcome my right hon. Friend’s announcement on personal allowances and say how proud I am to be part of a Government who have halved the income tax on the lowest earners in our society? Which does he think represents the true one nation politician: those who in difficult times have halved the income tax on the lowest earners or those who during the boom times doubled it?
Mr Osborne
I suspect Benjamin Disraeli was considerably better at the Dispatch Box than the shadow Chancellor, too. My hon. Friend is absolutely right to say that we have taken decisions to help the working poor, through taking them out of income tax and through the personal allowance increase for 24 million people. Whether Conservative or Liberal Democrat in this Government, we can be absolutely proud of the decision we have taken on the personal allowance in these very difficult times.
Andy Sawford (Corby) (Lab/Co-op)
Did the Chancellor hear the very loud message coming from the people of Corby and east Northamptonshire that they believe his economic policies are failing? Does he recognise that they will have heard his statement today and believed it to be complacent and wrong? Can he specifically confirm for the people of Corby and east Northamptonshire the real picture on borrowing? If we take out the £3.5 billion that is counted in for the 4G auction, borrowing will actually be higher this year than last. Will he give us the real cash figures?
Mr Osborne
First, may I congratulate the hon. Gentleman on his election in Corby? We were talking earlier about construction projects that had not been started. I saw for myself on an enjoyable visit to Corby, which was ultimately unsuccessful in terms of the by-election, the Corby link road which is being built—I hope he would welcome it. As I say, we have set out the public finance numbers, and we have taken the decision to use the spectrum money to help with further education and to fund the annual investment allowance, which starts in January next year—in this financial year.
Charlie Elphicke (Dover) (Con)
What action is my right hon. Friend taking to close the tax gap and enable British business to complete on a level tax playing field, after the serious failure to modernise or enforce our business tax system over the past decade by the previous Labour Government?
Mr Osborne
My hon. Friend has been a powerful advocate for a more competitive business tax system in this country, and we have reduced again the headline rate of corporation tax. That makes it even more of an advantage for companies to headquarter and pay their taxes here, and it is part of what we are doing to win the global race. I congratulate him on the advice and support he gives in this area.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
It is good to hear a UK Chancellor say that the private finance initiative is discredited—10 to 15 years after the Scottish National party did so. It is good, too, to hear of his belated conversion to some capital expenditure for shovel-ready projects—we wasted a couple of years by not listening to the SNP. We have had lost years of ever-growing debt paying for failure rather than growth, and that is projected to last until 2018. I wonder whether the Chancellor will introduce some competition to his job and perhaps return economic powers to Scotland, so that the Scottish Government can show him how it is done and get us out of the mess a little quicker.
Mr Osborne
The steps we have taken today, for example, to provide additional capital spending in Scotland, show the strengths of Scotland’s being part of a United Kingdom that is able to borrow money on world markets at exceptionally low rates. The SNP has still not answered the most basic questions about currency, about monetary policy management, and about the cost of debt and the like. Until the SNP can answer those fundamental questions about economic management, I do not think anyone is going to trust it with taking over control of that entire economic management through independence.
Dr Julian Huppert (Cambridge) (LD)
One thing I was delighted not to hear in the statement was the Prime Minister’s bizarre idea of scrapping housing benefits for the under-25s. Will the Chancellor tell the House whether it was omitted because he now realises that it would have been a mistake, that not all young people have loving, stable families to live with, and that they need and deserve our support—or was it just that we in the Liberal Democrats would not let him do it?
Mr Osborne
I think that is a slightly sour note from my Liberal Democrat colleagues. We have put together an autumn statement as a coalition Government and we have supported the priorities we both share, which include the personal allowance increase, dealing with fuel duty and investment allowances for businesses. We have collectively taken the difficult decision on welfare uprating; it is the best way, at present, to try to make savings in the welfare bill.
Gloria De Piero (Ashfield) (Lab)
The regional growth fund has not delivered a penny to Ashfield, and local business leaders across the east midlands are saying that the scheme just is not working. So what changes will the Chancellor make to ensure that my constituents benefit from the regional growth fund?
Mr Osborne
I am very happy to look into the specific situation for businesses in Ashfield if the hon. Lady wants to write to me—or we can meet and I will see what I can do to help. Businesses in Ashfield and elsewhere across the east midlands are eligible for the regional growth fund. We have put more money into the fund and made substantial transport improvements in the east and west midlands, which I hope will also benefit businesses in her constituency.
Alun Cairns (Vale of Glamorgan) (Con)
I warmly welcome the Chancellor’s statement and pay particular tribute to the increase in the pension draw-down limit and the increase in the ISA allowance. Will the Chancellor tell the House when he expects them to be implemented?
Mr Osborne
The ISA uprating takes place as normal. The draw-down limit will be in the Finance Bill, which we will introduce next week.
Lucy Powell (Manchester Central) (Lab/Co-op)
Is this Chancellor not presiding over a series of false economies? There is a long list, but let me draw his attention to one of them. Recent analysis has shown that the level of his draconian and unfair cuts to Manchester’s local government budget is the same as the increase to the benefits bill in Manchester since the election. Would it not be better if he invested in our future rather than us all paying the price for his failure?
Mr Osborne
I welcome the hon. Lady to the House of Commons and congratulate her on her by-election victory—[Interruption.] I did not find time to visit Manchester Central during the by-election. We are providing a great deal of investment in Manchester. We have the new enterprise zone and we are working with Manchester city council on the northern hub, which will have an enormous impact—in a good sense—on Manchester. We have listened to and worked with the local authority on that. As someone who represents many of the people who go to work in her constituency, I think that over the past couple of years, in working with the local authorities, we have done a great deal to improve Manchester’s prospects.
Mark Pawsey (Rugby) (Con)
The Chancellor has set out clearly how, in order to avoid the next generation having to pay for this generation, the Government are entirely right to continue to get the deficit down. May I welcome his support for wealth-creating private business and particularly the relief on business rates for new commercial property, which will both stimulate the construction sector and improve the availability of premises for growing businesses?
Mr Osborne
In my statement, I had to choose just a couple of hon. Members who have brought that issue to my attention, but I should put it on record that my hon. Friend was one of those who came to see me to campaign for action on empty property rate relief to mitigate the damage that it has done to some of our cities and towns since its introduction by the previous Labour Government. The 18-month grace period will help the construction of new commercial premises, and I congratulate him on the work he has done on behalf of his constituents to bring that about.
Toby Perkins (Chesterfield) (Lab)
The Chancellor has taken on a ghastly, ghostly, deathly pallor that suggests he knows that he has been rumbled. The money from the 4G mobile auction has not come in yet. When it comes in, he can spend it on whatever he likes, but he cannot offset it against borrowing before it has come in. Why does he not come clean and admit that borrowing has gone up and the rest of it is just a con?
Mr Osborne
I think we have roughly the same pallor, from looking at the hon. Gentleman. We have been completely transparent. We have published the OBR forecasts. They are independent and people will look at them and draw their own conclusion, which is that under Labour borrowing went up and up whereas under this Government the deficit has come down.
Mr Robin Walker (Worcester) (Con)
The claimant count in Worcester today is 500 lower than it was in 2010, when the city had a Labour MP, and youth unemployment is 150 lower. In that context, may I welcome the Chancellor’s early response to the Heseltine review? Extra money for LEPs, the regional growth fund, the increase in capital allowance and investment in infrastructure should mean that that good progress can continue.
Mr Osborne
I am delighted that there has been that good news in my hon. Friend’s constituency and I hope that with the new investment allowance for businesses in his area there will be more jobs. He is right to say that the Heseltine review also asks big questions of us as a Parliament about how we spend money locally and whether we should create a single pot for which LEPs could make bids. I have announced that we want to proceed in that direction and we will have much more to say about it when we have our spending review.
Ann McKechin (Glasgow North) (Lab)
One in 10 people of working age in Scotland is underemployed. Does the Chancellor consider that that figure will increase or decrease in the next three years?
Mr Osborne
Of course our ambition is for employment to increase. That is why we have made further changes to make our businesses more competitive, to help working people and to create a welfare system that encourages those who are in work. I hope she will support that.
Anne Marie Morris (Newton Abbot) (Con)
I congratulate the Chancellor on the good news in his statement for micro-businesses and particularly on what he has done with fuel duty and extending the small business rate tax relief. That is wonderful, but I have a particular concern about rural communities. In the detail, has he considered any further rural rebate for fuel duty in addition to the freeze he has already introduced?
Mr Osborne
I am not sure that this is necessarily the answer my hon. Friend wants, but unfortunately the European Union constrains the rural fuel rebates we can give to very remote island areas. That is why we have been able to introduce rebates in some of the Scottish islands and in the Isles of Scilly, but not in more remote parts of rural England, Scotland, Wales and Northern Ireland. We are pressing the Commission to see whether we can extend the definition of remote rural areas so that remote parts of the south-west, for example, can benefit.
Richard Burden (Birmingham, Northfield) (Lab)
In the interests of transparency when considering available public finances in the west midlands, is the Chancellor aware of the recent BBC investigation into the fate of £107 billion of assets of the former Advantage West Midlands? I know that he was not a fan of regional development agencies, but does he agree that that money should be available to people in the west midlands and that local taxpayers should not be forced to buy those assets twice? Will he insist on transparency to help west midlands MPs try to get to the bottom of what has gone on?
Mr Osborne
I hear what the hon. Gentleman says and I am happy to respond in writing on his specific point about Advantage West Midlands. I will get back to him with the details.
Andrew Jones (Harrogate and Knaresborough) (Con)
The average weekly gross pay in my constituency is £490, which is less than the UK average. The huge increase in personal allowance benefits my constituents significantly as well as people across the country, so may I congratulate my right hon. Friend on his work to take so many people out of tax and urge him to continue his efforts to make work pay?
Mr Osborne
I will certainly continue those efforts to ensure that work pays and that we have a welfare system that encourages work, in which it always pays to work and in which working people in Harrogate, Knaresborough and elsewhere are rewarded for being in work. The personal allowance increase and the cut in fuel duty plans will help the people my hon. Friend so ably represents in this Parliament.
Lilian Greenwood (Nottingham South) (Lab)
In cutting the income tax of those earning more than £1 million a year while cutting the incomes of those people in my constituency who do the right thing by getting up and going out everyday to try to find a job, is the Chancellor not protecting the richest and asking the most vulnerable to pay the most?
Mr Osborne
The richest have paid more income tax in every single year under this Government than in any one of the 13 years for which there was a Labour Government and the shadow Chancellor was the country’s chief economic adviser. If the hon. Lady has a problem with the reduction in the 50p rate to a 45p rate, perhaps she can tell me—her colleagues on the Front Bench certainly will not—whether Labour would reverse that policy if it won the next election.
James Morris (Halesowen and Rowley Regis) (Con)
I welcome the Chancellor’s announcement on capital spending, particularly the new PF2—private finance 2—scheme he announced today. Does he agree that that scheme would be ideal for the new hospital in Sandwell, which has been identified by the Treasury today as a priority project for that scheme and will greatly benefit people in Sandwell and across the black country?
Mr Osborne
We have identified the hospital in Sandwell as a prime candidate for the new PF2. I know that it will help improve facilities for the many people my hon. Friend represents. It is a very good project and I hope that we will be able to proceed with it.
Julie Hilling (Bolton West) (Lab)
The Chancellor did not mention the other banks he has created—food banks. Is he not deeply ashamed that under his policies working people are dependent on food handouts to feed themselves and their families?
Mr Osborne
As I have said, we have increased the personal allowance to increase the income going to working families. Of course, these are difficult economic times. We are having to take difficult decisions but they are decisions that support those who want to work hard and get on.
Graham Evans (Weaver Vale) (Con)
Hard-working strivers in Weaver Vale will welcome my right hon. Friend’s announcement that their personal tax allowance will increase to £9,440. Can he remind the House of the 10p tax fiasco that hit the poorest hardest? Does he agree that it is those on the Government Benches who always make it pay to work?
Mr Osborne
My hon. Friend puts it extremely powerfully on behalf of his Cheshire constituents. We remember the income tax decisions of the previous Government—the abolition of the 10p tax rate that hit the poorest. For 13 years, as I said, the rich were paying less in income tax than they are paying in any one year of this Government.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
May I take the Chancellor back to his statement in 2010, when he said that he wanted to see the richest paying most and the vulnerable protected? To press the point raised by many of my hon. Friends, why is he persisting with the tax cut for millionaires when thousands of people across Wales are increasingly relying on food banks, such as the one I visited this weekend?
Mr Osborne
We have had to take difficult decisions. We have asked the rich to pay more—new stamp duty rates. We have had to take difficult decisions today on pensions tax relief for the largest pension pots. We have done all those things. We have also had to take difficult decisions on welfare. If the hon. Gentleman objects to those things, perhaps he can tell us whether he will vote against the welfare uprating Bill.
Mr Marcus Jones (Nuneaton) (Con)
In Nuneaton since May 2010 unemployment is down, youth unemployment is down, employment is up and we have seen a 22% increase in business start-ups in the past quarter alone. Does my right hon. Friend agree that we cannot be complacent and we need to do more, but that the autumn statement today will show that we are on the right track?
Mr Osborne
My hon. Friend is right that we are on the right track. We are making progress. To turn back would be a complete disaster. I congratulate him on speaking on behalf of the businesses that he represents. He has asked me what we can do on capital allowances for plant and machinery and on business rates for small businesses. I hope he can see in the announcements that we made today that we have been listening to him and to the people in his constituency.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Can the Chancellor confirm not only that growth has been downgraded yet again and the welfare bill is rising, but that child poverty and the number of working families living in poverty is increasing? This is happening at the same time as millionaires are getting their tax cuts. Is this fair? Are we really all in it together?
Mr Osborne
We inherited a desperately difficult economic situation, where the economy had contracted by 6%. The hon. Lady talks about GDP forecasts. The Labour Government presided over a 6% contraction in the economy. We are dealing with those problems. As I say, she and her colleagues would have more force if they could answer two questions. Will they reverse the 50p tax cut? They will not say that. Will they vote against the welfare uprating Bill? Once they give us answers to those two questions, perhaps we will start listening to what they have to say.
Margot James (Stourbridge) (Con)
I warmly welcome the 25% increase in the budget for UK Trade & Investment and the £1.5 billion uplift for export finance facilities, which is much needed by businesses trying to fill orders from abroad. My right hon. Friend also commended the Heseltine review and said that he would respond more fully in the new year. When he does that, may I draw his attention to Lord Heseltine’s recommendations that we increase tactics to improve foreign direct investment by targeting the leading multinational investors more fully and more widely throughout Government?
Mr Osborne
I know my hon. Friend speaks with great knowledge on these subjects and she chairs the all-party group on trade and investment. We have provided a 25% increase in UKTI’s budget. We are seeking to strengthen the capacity of overseas chambers. It is not just about exports from this country; it is also about attracting investment into this country, and we want Britain to remain the No. 1 destination for foreign direct investment in Europe.
Chris Williamson (Derby North) (Lab)
The reality of this Chancellor’s period in office is that poverty is rising, growth is falling and debt is increasing. Why does he not just admit that his ideologically-driven tea party experiment has been a complete and utter failure?
Mr Osborne
I suggest the hon. Gentleman wakes up and smells the coffee of the situation that we inherited. We inherited a country that had just been through the biggest recession and banking crisis in modern history. We have dealt with the question about Britain’s credibility and its ability to pay its way in the world. The deficit has gone down, 1.2 million jobs have been created and he should give us some credit for cleaning up the mess that his party created.
Andrew Percy (Brigg and Goole) (Con)
The people of east Yorkshire and north Lincolnshire will welcome the decision to scrap the 13p per gallon planned rise in fuel.
On the £120 million for flood defences, will my right hon. Friend ensure that rural communities can benefit from that, as well as the cities?
Mr Osborne
I can absolutely confirm that. We are doing everything we can to support businesses in my hon. Friend’s area and to make sure that all parts of the country benefit from the infrastructure investment that we are making. Having been up to his part of the world, I know that we are making those investments and they are bringing real benefits to the area that he represents.
Diana Johnson (Kingston upon Hull North) (Lab)
Can the Chancellor explain to the 1,200 people in and around Hull who are facing private sector job losses announced in the preceding four weeks exactly what is in the autumn statement in terms of jobs and growth for them?
Mr Osborne
Of course we regret any decision made by any company to reduce jobs, but we are creating jobs in the economy. In Humberside we have committed to new enterprise zones. We have reduced the tolls on the Humber bridge. We have introduced today new tax allowances from January next year to help small businesses in the hon. Lady’s area to invest. These will all help create jobs, and I hope the people she represents will also welcome the increase in the personal allowance, which will see a reduction in their income tax bill, and the decision not to go ahead with the Labour party’s 3p fuel duty rise.
Richard Graham (Gloucester) (Con)
My constituents in Gloucester will appreciate the fact that the Chancellor’s statement increases take-home pay for all workers, gets us off the fuel duty escalator, clamps down on multinational tax avoidance and strongly supports investment in manufacturing, which is vital for growth and jobs in our city and county. Can my right hon. Friend say whether his announcement on funding and reforms for more houses includes the Gloucester proposal for social housing regeneration, which was well received by the Homes and Communities Agency and the Department for Communities and Local Government?
Mr Osborne
I will get back to my hon. Friend about the specific point about the bid for new housing in Gloucester. More broadly, we are investing more capital in housing development. We are also standing alongside families trying to buy their first home with our Firstbuy shared equity scheme, and we are also providing guarantees to registered social landlords not only to build social housing, but to build housing for the private rented sector. So in all sorts of ways we are helping the people of Gloucester, and I will look specifically at what more we can do to help.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
The corporation tax take, VAT take, income tax take and growth are all lower than the OBR predicted in March. The Chancellor is forecast to accrue an increase in national debt in five years greater than Labour accrued in 13 years. Moreover, from now till 2013 the International Labour Organisation unemployment rate increases by 0.2%, as is stated on page 86, table B.1, so how are more people predicted to get jobs when the OBR says completely the opposite?
Mr Osborne
I would advise the hon. Gentleman to look at that table on employment. It shows employment going up by 1 million.
Martin Vickers (Cleethorpes) (Con)
Along with the initiatives that the Chancellor mentioned a few moments ago to boost the Humberside economy, I particularly welcome confirmation that the A160 upgrade into Immingham docks is going ahead. It provides access to the enterprise zone that he mentioned. I note that there is an additional £60 million available to enterprise zones. Will he look sympathetically on applications from the Humber enterprise zone?
Mr Osborne
I will certainly look at the application if one is put forward by the Humber enterprise zone. I know that this benefits people across not only east Yorkshire, but north Lincolnshire, which my hon. Friend represents, and I know that the enterprise zones have some exciting ideas. There is, as I say, additional money in the Book which I did not mention in my statement, but it is there for additional infrastructure in the enterprise zones, and I will take a close look at the bid that he makes on behalf of his constituents in relation to the local enterprise zone.
Sheila Gilmore (Edinburgh East) (Lab)
Job creation is vital in order to reduce public spending and increase the tax take. The words the Chancellor used in his statement were very interesting. He said specifically that when counting his 1 million private sector jobs he started from the beginning of 2010. Half of those jobs were created in the first year of that period and arose from the Labour Government’s financial stimulus, so the rate of growth has in fact been decreasing, not increasing. Does he not agree?
Mr Osborne
First, unemployment had gone up under the Labour Government and they, like all Labour Governments in history, left office with unemployment higher than when they came into office. Secondly, if the hon. Lady looks at the employment forecasts she will see that, as I was saying to her hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), 1 million jobs are forecast to be created over the coming period. As I have said, we are in a tough economic situation—I am not trying to disguise that from the House today—but I think that the decisions we have taken to help businesses and working people will be warmly welcomed.
Guy Opperman (Hexham) (Con)
The improvements to the A1 and the freezing of fuel duty, which was raised 10 times under the previous Labour Government, are warmly welcomed by Government Members. However, may I urge the Chancellor to consider the call from the Chair of the Treasury Committee for local community banking to kick-start lending to small and medium-sized enterprises and local banking in local areas?
Mr Osborne
I welcome what my hon. Friend says about the dualling of the A1 up to Newcastle—I hope that in future we can do that as far as the Scottish border—and his comment on fuel duty. He has spoken to me personally about what more we can do to get community banking. There are still many issues to deal with in our banking system. We have to make it more competitive and encourage more entrants, and community banks can be part of the solution.
Naomi Long (Belfast East) (Alliance)
Bombardier recently secured the largest order in its history, with the result that its site in my constituency is now secure for the future, which is a welcome investment and also secures the local supply chain, so I welcome the Chancellor’s intention to support the aerospace industry as well as his announcements on fuel duty, which will have a direct impact on those businesses. Another constraint on economic growth in Northern Ireland is air passenger duty, as I have said frequently. Will the Chancellor at least commit to conducting a proper study of the impact of APD on growth in business and tourism, so that an informed decision on the matter can be taken?
Mr Osborne
I, too, welcome the investment that Bombardier has made in Belfast and hope that some of my announcements today on help for the aerospace industry, particularly the supply chain for advanced manufacturing, will benefit the hon. Lady’s constituents. On APD, we acted swiftly to deal with the specific issue of the transatlantic flight from Belfast to the United States, and I am glad that we were able, with the Northern Ireland Executive, to come to a satisfactory arrangement on that. More broadly, the point she makes about APD has been made by others. We have had to make some difficult decisions, and sticking with the APD rates we inherited from the previous Labour Government was one of them, although we were able, in the very early years of this Government, to do something to ameliorate that by delaying one of the increases.
Julian Sturdy (York Outer) (Con)
I congratulate my right hon. Friend on his statement and thank him for the consideration he has given to our report on empty property rates. The move to give new build commercial properties an exemption from paying empty property rates will be a welcome boost to the economy and will be much welcomed in the industry, but I ask him to keep the wider issue of empty property rates on existing units under consideration.
Mr Osborne
As I said in my statement, the report produced by my hon. Friend and some of his colleagues showed powerfully the impact that the empty property rates that the previous Government introduced have had, hitting development in our towns and cities. It is an expensive measure to get rid of, which is why we have been unable to get rid of it all today, but we have listened to him and his colleagues. There was the idea of providing a grace period for new commercial development, and we are now introducing that 18-month grace period. I congratulate him on making the case for it so powerfully.
Dan Byles (North Warwickshire) (Con)
Thank you, Mr Speaker—I am now in a calm frame of mind.
The average working wage in my constituency of North Warwickshire and Bedworth is less than the national average wage. What does the Chancellor suggest I tell my constituents when they ask me, in bewilderment, how the Labour party can vote against a welfare cap that will prevent people on benefits from taking home a larger disposable income than my constituents who are in work?
Mr Osborne
I think that my hon. Friend’s constituents and many people in the country will be completely bewildered that Labour opposes a cap on benefits that simply means that people who are out of work will not get more than the average family get from being in work. It means that in two and a half years’ time or thereabouts, his constituents will have a choice between continuing to return my hon. Friend to Parliament to ensure that their money is well spent and the unlimited benefits that his Labour opponent will be offering.
Mr Speaker
I thank the Chancellor and all 90 Back Benchers who questioned him. We are blessed.
Internships (Advertising and Regulation)
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Hazel Blears (Salford and Eccles) (Lab)
I beg to move,
That leave be given to bring in a Bill to prohibit the advertising of long-term unpaid internships; to regulate conditions of employment for paid internships; and for connected purposes.
More than 1 million young people in our country are desperately looking for work, seeking that elusive first step on the career ladder that they hope will lead to a better future. In the current economic climate, it is all too easy for unscrupulous employers to exploit the hopes and dreams of young people by offering long-term, unpaid internships that require them to work for free.
Let us take Stacy as an example. She was offered an internship with a financial services company in central London. Even though it was unpaid, she, like thousands of other young people, thought that it would lead to a future career. She worked for four months without pay and ended up with over £5,000 in credit card and payday loan debts just so she could afford the travel from her home into the city. She was forced to leave the company when she had no more money. Far from thanking her for her contribution, the company was outraged that she had left and gave her a poor reference.
Long-term, unpaid internships are a modern-day scandal, and they are rife in the very areas where so many young people are desperate to get a foothold. The worst offenders are employers in media, fashion, finance and, until recently—I am ashamed to say—in politics. Part of the reason why unpaid internships are so unfair is that they are disproportionately located in London, one of the most expensive cities in the world to live in. That immediately freezes out large sections of the country, and I know that very few people from Salford could afford to relocate to London to work full time without getting paid.
The National Union of Journalists, in its submission to the Low Pay Commission, called unpaid internships
“the scourge of the industry”,
with the problem being particularly bad on magazines. I commend the NUJ for bringing legal action in the employment tribunal to obtain backdated national minimum wage payments for unpaid interns. Alan Milburn’s report on fair access to professional careers, which was published in May this year, identified journalism as
“one of the most socially exclusive of professions”
and noted that over half of senior journalists are now educated privately. The report said that
“all too often, unpaid internships are a key entry route into journalism and the media industry more generally.”
He found:
“Unpaid internships clearly disadvantage those from less affluent backgrounds who cannot afford to work for free for any length of time. They are a barrier to fair access and indeed, to better social mobility”.
Of course, there are good employers in all those sectors who do pay their interns, such as the magazines Cosmopolitan and Elle, but too many persist in taking advantage of young people who are desperate to work.
The problem is also widespread in the fashion industry. Carmela spent five months working for a fashion house, sewing dresses that would sell for over £500 each. She was paid nothing at all for her work. She, too, was forced to give up the internship because she simply could not afford to work for free. I cannot claim the following phrase as my own, but it is one of the best I have heard about the fashion industry. It was from a young woman who worked long hours for no pay and for months on end. She said:
“The Devil wears Prada, and the Devil pays nada.”
All of us in this House know that unpaid internships have been offered on a regular basis by all political parties, taking advantage of the drive and commitment of young people who want to work here at Westminster and are desperate to get a foot in the door. The reality is that only those who can afford to work for free and who have housing in London can take up those opportunities, which effectively excludes 95% of young people—they come from all our constituencies up and down the country—from ever having that chance to get involved in politics.
With the support of all three party leaders and incredible support from you, Mr Speaker, I have, together with the hon. Members for East Dunbartonshire (Jo Swinson) and for Lancaster and Fleetwood (Eric Ollerenshaw), tried to address that in Parliament by creating the Speaker’s parliamentary placements scheme. Our programme, which is run in partnership with the brilliant Social Mobility Foundation, gives people from disadvantaged backgrounds the opportunity to come here and work. Every one of them is paid more than the minimum wage and more than the living wage. They are given some support with housing and provided with a structured scheme. They work for MPs for four days a week, and on a Friday they have a personal development programme that is helping them to realise their skills and talents. It is a good start, but much more needs to be done. I am pleased to say that with the brilliant work being carried out by Gus Baker and his colleagues at Interns Aware, Interns Anonymous and Internocracy, as well as the National Union of Students, we now have a mass of young people who are an unstoppable force, and I think we really will start to get change.
The Bill proposes that advertising for unpaid internships should be unlawful. It seems like a small measure, but I believe that it would make a big difference. If people are required to attend work for set hours and carry out specific duties, they are legally a worker under the national minimum wage legislation and entitled to be paid as such. This is the clear legal advice of the Department for Business, Innovation and Skills’ own lawyers. It is therefore completely nonsensical that it remains lawful for employers to advertise positions which are in themselves unlawful. The Bill would send a very clear message to employers that such adverts are unlawful, and it would accelerate the cultural change we need so that all employers adopt the standards of the best by paying their interns at least the national minimum wage.
Some people will say that such a measure might squeeze out the essential work experience placements that we all want to encourage so that young people get a taste of different kinds of work to help them decide on their future careers. Not at all: there is a world of difference between a four-week work experience placement, which can be tremendously valuable, and an advert which, I am ashamed to say, a Member of Parliament issued recently for a 12-month constituency case worker—unpaid!
In France, work experience is limited to eight weeks, after which there is a trigger whereby a person automatically becomes an intern and is paid accordingly. It would be very helpful if we could consider a similar model in this country. To me, eight weeks seems a little too long, but perhaps after four or six weeks there should be an automatic trigger so that people start to get paid properly as interns.
Of course, many companies do offer brilliant paid internship programmes, including Ernst and Young, BP, law firm Clifford Chance, and CH2M Hill, which built the Olympic park and is now setting up a paid internship scheme to attract young people into engineering. Small campaign charities such as People and Plants are also able to pay their interns. We should celebrate them all and try to bring everyone else up to their standards.
Volunteering is important, but we should distinguish it from unpaid internships. Volunteers give up their own time and do so on their own terms—they are not required to carry out set duties at set hours—but obviously, volunteering is a great way to get experience and contribute to the local community.
Concern has been expressed that making internships paid would drive unpaid internships underground or, worse still, stifle opportunities. However, we have to ask ourselves this: are we comfortable with opportunities that mean that people do not get paid for their work, and that are restricted to those who can afford to work for free? I personally am not. I believe that unpaid internships are often exploitative, and are wrong. By outlawing the advertising of unpaid internships, the Government would send a clear message that unpaid internships shut down more opportunities for people than they open up, that the practice is counter-productive to social mobility, and that the principle of asking people to live and work for free is wrong.
This issue is affecting many people’s lives. I will leave the House with a final story about John. John joined French Connection’s e-commerce team as an unpaid intern. After a couple of weeks, there were changes in the workplace and John was given more responsibilities. He was asked if he wanted to take this work on, and he said no, but was still given it. It was terribly confusing for someone who had no experience in a mainstream, paid role. Not only did John feel out of his depth but he felt, and clearly was, exploited. John says that he felt he was drafted in to do a job because there was no one else to do it and he was saving the company money. For his sake, and for the sake of thousands of young people who are in similar circumstances today, whose hopes and dreams have often been dashed because they cannot do an unpaid internship, we must act quickly to ensure that they are treated with respect and given a decent start to their working lives.
Question put and agreed to.
Ordered,
That Hazel Blears, Barbara Keeley, David Miliband, Mr Iain Wright, Ms Gisela Stuart, Meg Hillier, Fiona Mactaggart, Julie Elliott, Dr Julian Huppert, Mike Crockart and Eric Ollerenshaw present the Bill.
Hazel Blears accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 1 February 2013 and to be printed (Bill 102).
Police (Complaints and Conduct) Bill (Allocation of Time)
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Policing and Criminal Justice (Damian Green)
I beg to move,
That the following provisions shall apply to the proceedings on the Police (Complaints and Conduct) Bill—
Timetable
1.–(1) Proceedings on Second Reading, in Committee, on consideration and on Third Reading shall be completed at this day’s sitting.
(2) Proceedings on Second Reading shall be brought to a conclusion (so far as not previously concluded) four hours after the commencement of proceedings on this Motion.
(3) Proceedings in Committee, on consideration and on Third Reading shall be brought to a conclusion (so far as not previously concluded) six hours after the commencement of proceedings on this Motion.
Timing of proceedings and Questions to be put
2. When the Bill has been read a second time—
(a) it shall, despite Standing Order No. 63 (Committal of Bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;
(b) proceedings on the Bill shall stand postponed while the Question is put, in accordance with paragraph (1) of Standing Order No. 52 (Money resolutions and ways and means resolutions in connection with bills), on any financial resolution relating to the Bill;
(c) on the conclusion of proceedings on any financial resolution relating to the Bill, proceedings on the Bill shall be resumed and the Speaker shall leave the Chair whether or not notice of an Instruction has been given.
3.–(1) On the conclusion of proceedings in Committee, the Chairman shall report the Bill to the House without putting any Question.
(2) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.
4. For the purpose of bringing any proceedings to a conclusion in accordance with paragraph 1, the Chairman or Speaker shall forthwith put the following Questions (but no others) in the same order as they would fall to be put if this Order did not apply—
(a) any Question already proposed from the Chair;
(b) any Question necessary to bring to a decision a Question so proposed;
(c) the Question on any amendment moved or Motion made by a Minister of the Crown;
(d) any other Question necessary for the disposal of the business to be concluded.
5. On an Motion so made for a new Clause or a new Schedule, the Chairman or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
6. If two or more Questions would fall to be put under paragraph 4(c) on successive amendments moved or Motions made by a Minister of the Crown, the Chairman or Speaker shall instead put a single Question in relation to those amendments or Motions.
7. If two or more Questions would fall to be put under paragraph 4(d) in relation to successive provisions of the Bill, the Chairman shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.
Consideration of Lords Amendments
8.–(1) Any Lords Amendments to the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(2) Proceedings on consideration of Lords Amendments shall be brought to a conclusion (so far as not previously concluded) one hour after their commencement; and any proceedings suspended under sub-paragraph (1) shall thereupon be resumed.
9.–(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 8.
(2) The Speaker shall first put forthwith any Question already proposed from the Chair.
(3) If that Question is for the amendment of a Lords Amendment the Speaker shall then put forthwith—
(a) a single Question on any further Amendments to the Lords Amendment moved by a Minister of the Crown, and
(b) the Question on any Motion made by a Minister of the Crown that this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.
(4) The Speaker shall then put forthwith—
(a) a single Question on any Amendments moved by a Minister of the Crown to a Lords Amendment, and
(b) the Question on any Motion made by a Minister of the Crown that this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.
(5) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown that this House disagrees to a Lords Amendment.
(6) The Speaker shall then put forthwith the Question that this House agrees to all the remaining Lords Amendments.
(7) As soon as the House has—
(a) agreed or disagreed to a Lords Amendment; or
(b) disposed of an Amendment relevant to a Lords Amendment which has been disagreed to,
the Speaker shall put forthwith a single Question on any Amendments moved by a Minister of the Crown and relevant to the Lords Amendment.
Subsequent stages
10.–(1) Any further Message from the Lords on the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(2) Proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (1) shall thereupon be resumed.
11.–(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 10.
(2) The Speaker shall first put forthwith any Question which has been proposed from the Chair.
(3) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown which is related to the Question already proposed from the Chair.
(4) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown on or relevant to any of the remaining items in the Lords Message.
(5) The Speaker shall then put forthwith the Question that this House agrees with the Lords in all the remaining Lords Proposals.
Reasons Committee
12.–(1) The Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the appointment, nomination and quorum of a Committee to draw up Reasons and the appointment of its Chair.
(2) A Committee appointed to draw up Reasons shall report before the conclusion of the sitting at which it is appointed.
(3) Proceedings in the Committee shall (so far as not previously concluded) be brought to a conclusion 30 minutes after their commencement.
(4) For the purpose of bringing any proceedings to a conclusion in accordance with sub-paragraph (3), the Chair shall—
(a) first put forthwith any Question which has been proposed from the Chair, and
(b) then put forthwith successively Questions on motions which may be made by a Minister of the Crown for assigning a Reason for disagreeing with the Lords in any of their Amendments.
(5) The proceedings of the Committee shall be reported without any further Question being put.
Miscellaneous
13.–Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply so far as necessary for the purposes of this Order.
14.–(1) The proceedings on any Motion made by a Minister of the Crown for varying or supplementing the provisions of this Order shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.
(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to those proceedings.
15. Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.
16.–(1) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken or to recommit the Bill.
(2) The Question on any such Motion shall be put forthwith.
17.–(1) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.
(2) The Question on any such Motion shall be put forthwith.
18. The Speaker may not arrange for a debate to be held in accordance with Standing Order No. 24 (Emergency debates) on a day on which the Bill has been set down to be taken as an Order of the Day before the conclusion of any proceedings to which this Order applies.
19.–(1) This paragraph applies if the House is adjourned, or the sitting is suspended, before the conclusion of any proceedings to which this Order applies.
(2) No notice shall be required of a Motion made at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order.
20. Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.
21.–(1) Any private business which has been set down for consideration at 7.00 pm, 4.00 pm or 2.00 pm (as the case may be) on a day on which the Bill has been set down to be taken as an Order of the Day shall, instead of being considered as provided by Standing Orders, be considered at the conclusion of the proceedings on the Bill on that day.
(2) Standing Order No. 15(1) (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before the moment of interruption, for a period equal to the time elapsing between 7.00 pm, 4.00 pm or 2.00 pm (as the case may be) and the conclusion of those proceedings.
It may assist the House if I say a few words about the allocation of time motion without, of course, debating the substance of the Bill. Clearly, the motion goes to the heart of our case for a fast-track Bill.
As hon. Members will recall, in the debate on 22 October my right hon. Friend the Home Secretary gave a commitment to ensure that the Independent Police Complaints Commission had the powers that it needs to undertake its investigations into Hillsborough thoroughly and exhaustively. The bereaved families and the survivors have waited 23 years for the truth; they should not have to wait years more for justice. The IPCC needs to get on with these investigations as fast as possible, and to do that it needs these additional powers by early in the new year. I fully recognise that today’s timetable is a tight one. None the less, given the very specific issues that the House is being asked to consider, I am satisfied that the House, and in due course the other place, will have sufficient time to scrutinise the Bill properly.
Mr Peter Bone (Wellingborough) (Con)
It is unusual to put a Bill through this place in a day, and the procedure should be used only rarely. Given the lack of Government business in the past few weeks, I wonder why we did not have the Second Reading debate sooner so that we could proceed with the later stages today. What is the reason for the delay between the statement and getting to this point?
Damian Green
The statement was made four or five weeks ago. The IPCC had to look at the matter, and we have had discussions with it about the extra powers that it thought it needed, which the Bill very narrowly addresses. I share what I divine to be my hon. Friend’s instincts about emergency fast-track legislation. When it is needed, as it occasionally is, it should be drafted as narrowly as possible. As for the timetable, we have moved as fast as possible, consonant with consulting the many people involved, inside this House and outside, so that we could get to the point where today we can have a Second Reading debate. We will have four hours to consider the motion itself and for Second Reading. The motion then provides for a further two hours for Committee stage, to take place on the Floor of the House, and for the remaining stages. We therefore have a total of up to six hours to consider the Bill today. I welcome the support from those on the Opposition Front Bench for expediting the Bill; similarly, I welcome the support of the Home Affairs Committee, as set out in its report, which was published this morning. I hope that the House as a whole will understand the need for fast-tracking the Bill and will support the motion.
Mr David Hanson (Delyn) (Lab)
I am grateful to the Minister for outlining the motion. My right hon. Friends the Members for Normanton, Pontefract and Castleford (Yvette Cooper), for Leigh (Andy Burnham), for Garston and Halewood (Maria Eagle) and I have had discussions outside the Chamber with the Minister about the Bill’s contents, and we support the motion. We want to get the Bill on to the statute book as quickly as possible, and the Opposition will not oppose the motion.
Mr Peter Bone (Wellingborough) (Con)
I have no intention of opposing the motion, but the right hon. Member for Delyn (Mr Hanson), who spoke on behalf of the Opposition, has made my point for me somewhat. Obviously, discussions between the two Whips Offices have led to this decision. It may well be that this is such an important issue that everything has to be done in one day. However, as a general rule, although we can allocate four hours for Second Reading and two hours for Committee, one of the reasons we have safeguards in our Standing Orders is that arguments developed on Second Reading may be reflected on and amendments can then be tabled for the Committee stage. I am not saying that this is not one of those Bills that need to be rushed through in a day—I do not know enough about it, although it certainly relates to an important issue.
Mr George Howarth (Knowsley) (Lab)
The hon. Gentleman is, in general terms, making a good point, but he needs to reflect on the fact that this is a short Bill and, as the Minister has said, that it is focused in its intent.
Mr Bone
I thank the right hon. Gentleman for his intervention and I am sure that he is correct. What I am taking this small opportunity to do is to encourage the Government not to follow this practice with other Bills. A House business committee would save us from this problem, because all decisions would then be made transparently rather than as a result of discussions behind the scenes, which is obviously what happened in this case.
Keith Vaz (Leicester East) (Lab)
I, too, rise to support the Government’s motion. The Minister consulted me and the Home Affairs Committee, which, for the convenience of the House, published a report this morning—it is available from the Vote Office—that deals with the Bill and goes a little wider, because we took evidence from the Hillsborough families as well. We have made a number of recommendations that go slightly beyond the Bill itself and hope that the Government will take them into consideration.
It is important that we get on with this. One of the features of the evidence given by Lord Falconer and the families’ representatives was their desire to get a move on after their 23-year campaign. I thank the Minister for the courtesy with which he has conducted the negotiations with the Committee, for consulting us and for giving us an opportunity to submit our views, which, as I have said, are available from the Vote Office.
Stephen Mosley (City of Chester) (Con)
It is also fair to say that the people who have been involved with Hillsborough have been aware of this Bill and have had the opportunity to make suggestions. An amendment has been tabled for the Committee stage as a result of the all-party group on the Hillsborough disaster having time to discuss the issue.
Keith Vaz
The hon. Gentleman is absolutely right. I think we will have plenty of time to discuss this three-clause Bill. Obviously, as the hon. Member for Wellingborough (Mr Bone) has said—he has developed a great expertise in House matters—we do not want today’s process to be the norm. We want it to be exceptional, the Government have said that it is exceptional, and the families, the Opposition and the Home Affairs Committee believe that it is exceptional. I think it is pretty rare to get such agreement, but we agree on the Bill and hope that it will go through quickly.
Damian Green
I am grateful for the remarks that have been made. If it is of any reassurance to my hon. Friend the Member for Wellingborough (Mr Bone), I share his instincts, but I think that everyone understands the importance of speeding up this Bill and the fact that, within the constraints of a tight timetable, the Government have done their best to consult everyone who should be consulted, both inside and outside the House.
Question put and agreed to.
Police (Complaints and Conduct) Bill
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Policing and Criminal Justice (Damian Green)
I beg to move, That the Bill be now read a Second time.
The events of 15 April 1989 were a tragedy. Ninety-six innocent men, women, and children lost their lives. More than 700 people were injured, many seriously. The impact of those events on all those who watched the tragedy unfold, desperate to help, on the survivors, and on the families and friends of the 96 victims, is felt to this day and must never be forgotten.
We have today an opportunity to address what my right hon. Friend the Prime Minister called the “double injustice” that has been suffered, first through the tragedy itself, and then through 23 years of lies and obstruction. That is why we have brought forward this fast-track legislation.
With the publication of the report of the Hillsborough independent panel on 12 September, the truth about the events of that day is finally known. I pay tribute again to the Right Rev. James Jones, the Bishop of Liverpool, and all the panel members for their dedicated and tireless work in producing the report. It has drawn a line under the lies, rumour, innuendo and conjecture that have surrounded the disaster for the past 23 years.
I want to take this opportunity to pay tribute to the right hon. Member for Leigh (Andy Burnham) for his contribution in getting us to this stage. I also pay tribute to the hon. Members for Liverpool, Walton (Steve Rotheram), for Halton (Derek Twigg) and for Garston and Halewood (Maria Eagle), who have worked tirelessly to get to the truth. The whole House is grateful to them. I am also grateful to the shadow Home Secretary, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), and the Chairman of the Home Affairs Committee, the right hon. Member for Leicester East (Keith Vaz), for the constructive discussions that they have had with me and my right hon. Friend the Home Secretary, which have enabled us to introduce the Bill in a spirit of co-operation across the whole House.
I also pay tribute, not least, to the families of the victims. Without their unwavering commitment, we would simply not have reached this important point in the search for justice. I believe that without their dedication, there would have been no independent panel, no report into the Hillsborough disaster, no parliamentary debates and no possibility of exposing the truth and obtaining justice.
Keith Vaz (Leicester East) (Lab)
May I again put on the record the unanimous support of the Select Committee for the Bill? Aspects of our tenth report, which we published this morning, go beyond the scope of clauses 1 and 2. Will the Minister assure the House that he will look at those other points, for example on the creation of a lead investigator, the need for co-ordination by the Home Secretary and the need for her to publish a timetable? Even though those points are not relevant to the Bill, they are very relevant to the future conduct of the investigation.
Damian Green
I am grateful to the Select Committee for producing the report for this debate and for taking parts of it out of its important wider investigation into the Independent Police Complaints Commission. I assure the right hon. Gentleman that all the points that he and the Select Committee have made are under consideration. Clearly, it is in everyone’s interest that the various investigations proceed as fast as possible, consonant with the fact that many of them are being carried out by bodies that are rightly independent of Government.
Mr Jim Cunningham (Coventry South) (Lab)
Will the Minister say what the attitude is of the Police Federation and the Association of Chief Police Officers to the Bill?
Damian Green
The Police Federation and the superintendents have written to express their reservations and I have written back to them. I obviously meet the Police Federation and the supers regularly. I am meeting the Police Federation next week and this matter will be on the agenda. I have not had a formal exchange with ACPO, so it would be unfair for me to express its collective view.
The findings of the independent panel’s report are deeply distressing. The failure of the authorities to protect the fans, the attempts to blame them and the doubt cast on the original coroner’s inquest are particularly troubling findings. It should not have taken 23 years to get to this point, but finally the report gets us to the stage of knowing the truth—a truth that is now accepted by all. The report exposes many attempts that were made by the authorities—those charged with protecting the public and with uncovering the truth of the events—to change official records, obscure the truth and paint a different picture of what happened.
The truth is both shocking and essential, but it is not the end. As the Bishop of Liverpool has said, we now need to move from truth to justice. It is that move that is at the centre of the Bill. As the Home Secretary set out to the House in the debate on 22 October, the Independent Police Complaints Commission has announced an investigation into the panel’s findings. That is an important step on the path to achieving justice for the victims of the disaster.
The IPCC will investigate the conduct of the officers at Hillsborough on that day, and those who were involved in the subsequent investigations. That means that it will investigate both misconduct and criminality, not only of any officers who are still serving in any police force in the UK, but of any officers who have since retired. Normally, the IPCC would pursue retired officers only for matters relating to criminal behaviour. For criminal behaviour, the sanctions are clear: the officer, serving or retired, will face criminal charges. For misconduct matters, sanctions can bite only serving officers, so it is rare to undertake an investigation of retired officers for misconduct. However, in relation to Hillsborough, the IPCC has made it clear that it will investigate retired officers for both criminal behaviour and misconduct because the public interest is compelling.
Steve Rotheram (Liverpool, Walton) (Lab)
I welcome the Government’s proposals, but I wonder whether the right hon. Gentleman, like me, is surprised that page 10 of the Bill research paper states that the IPCC cannot already compel serving police officers simply to attend an interview in connection with any ongoing investigation. Does he believe that there should be clear sanctions against those who refuse to do that?
Damian Green
The hon. Gentleman asked two questions. First, he asked whether I was surprised that the power did not already exist. To some extent, yes I am. Obviously, the IPCC was set up under the Police Reform Act 2002 and given powers then. Perhaps this is the first time that so much focus has been on it—indeed, it has caused the House to agree to emergency legislation to give the IPCC that particular power.
Secondly, I know that sanctions are of particular concern. As has been said, we will debate the matter in detail on an amendment to the relevant clause in Committee later. However, I preview my thoughts on that by pointing out that clear sanctions will be available to chief constables and forces to apply to those who refuse to obey what will be an IPCC instruction, and later a requirement. They will be very powerful.
Dr Julian Huppert (Cambridge) (LD)
The Minister may recall that I wrote to him about retired officers, and I thank him for his response. Will he be clear about whether such former officers would be required to attend any sort of interview? My understanding of the Home Affairs Committee report is that the Bill does not provide for that, and that could hinder the investigation. Will he make it clear whether there is a way of ensuring that people are available to be interviewed?
Damian Green
The case is different for retired officers because they are essentially members of the public. The police cannot compel a member of the public to attend an interview as a witness. If the police feel that it is necessary to interview someone, they have to arrest them if they are unwilling to help voluntarily. It would be strange to give the IPCC powers that the police do not have. Having said that, my expectation is that—inevitably, in this case—there will be many retired officers, simply because of the length of time since Hillsborough, and that they may have useful evidence to give as witnesses. I hope and expect that many will wish to help.
Stephen Mosley (City of Chester) (Con)
It is 23 years since Hillsborough and more than 20 years since most of the incidents that concern us occurred. Has the Minister any idea of how many officers from that time are still serving, and how many have retired or moved on?
Damian Green
The IPCC is still going through that information. The majority of officers may well have retired by now. This is a large undertaking and represents the biggest single investigation that the IPCC has ever done. It estimates that this will involve it investigating more than 2,400 officers. That is the overall quantum—the actual division is not yet clear. Obviously, many officers may have moved to other forces, and so on.
Steve Rotheram
If the right hon. Gentleman will not put sanctions in the Bill, as seems likely, what confidence does he have that police forces will take the necessary disciplinary action against serving officers who refuse to help the IPCC?
Damian Green
I have very great confidence in that. There are two points to make in response to the hon. Gentleman, the first of which is that similar sanctions under the conduct regulations are not in any other Bill, so it would be anomalous suddenly to pluck out the sanction for this offence and put it in legislation. Secondly, and more importantly in practical terms, given the enormous and understandable public interest in the matter, the relevant chief officers will be extremely keen to ensure that they use their powers to take sanctions—ultimately, officers who break the conduct regulations in that way can be dismissed. The conversations I have had with senior officers in recent days suggest that that is the case.
I said in response to my hon. Friend the Member for City of Chester (Stephen Mosley) that the IPCC has said that the investigation will be the biggest it has ever undertaken. The Government recognise the additional burden that such a large investigation places on it. We have made it clear that we will ensure that the commission has both the powers and the resources it needs to conduct its investigations into Hillsborough. We take that commitment seriously, which is why we have introduced this fast-track Bill.
John Mann (Bassetlaw) (Lab)
The IPCC has accepted two separate complaints, which may or may not overlap. One is in relation to Orgreave in 1984, and the other is in relation to the mystery over the investigation into Norman Bettison for an alleged major theft in August 1987. How will the IPCC be able to look at those two investigations when it has such a heavy burden placed on it, particularly if it finds anything that in any way crosses over because of the individuals involved or anything else?
Damian Green
I should restrict my remarks to Hillsborough, which is the purpose of the Bill; it is deliberately narrowly drawn. It is for the IPCC to decide how to use its resources. The Bill gives a power to the IPCC to consider events previously investigated by its predecessor body, the Police Complaints Authority, but it is for the IPCC to decide whether exceptional circumstances obtain to allow it do so. It is for the IPCC to decide whether to accept individual complaints. On the hon. Gentleman’s other complaints, may I urge Members on both sides of the House not to indulge in debate and speculation about individuals? I would not want anything said on the Floor of the House to jeopardise any live investigations being conducted by either the IPCC or the police.
Since the publication of the panel’s report, my right hon. Friend the Home Secretary and I, and Home Office officials, have liaised closely with the IPCC, which has identified two additional powers it needs urgently in order to take forward its investigations into Hillsborough. Those powers are contained in the Bill.
As many hon. Members will know, discussions with the IPCC regarding its powers have been taking place for some time. I am aware of the calls for wider reform of the IPCC and how police complaints are handled more generally. Let me be clear to the House that those discussions are still taking place. The Home Affairs Committee, to which I gave evidence last week, is coming to the end of an inquiry into the IPCC. Naturally, the Government will want to study the Committee’s conclusions and recommendations before coming to a final view on any wider reforms to the IPCC. If there are other gaps in the IPCC’s powers, we will plug them as soon as is practicable, but the Bill’s focus is on gaps in the commission’s powers that it has identified as preventing it from undertaking a thorough and exhaustive investigation in Hillsborough without delay.
Derek Twigg (Halton) (Lab)
One of the things that emerged clearly from the report was the role of South Yorkshire police federation in putting out the “alternative” view of Hillsborough. I suspect I know the answer, but I want to be clear for the record—that someone cannot argue they were acting in a representative capacity as a police federation representative in order to escape what is being sought under the Bill. In other words, the Bill’s provisions will apply to them even if they were acting as representatives of the police federation and its members, just as they would to police officers generally.
Damian Green
That is a question for the IPCC investigation; it is not for Ministers to act as judges or investigators. I know it is an important point, but it is better addressed to the IPCC.
Dr Huppert
The Minister says he is open to plugging gaps. He knows I have pressed him before about people occupying quasi-police roles. He wrote to me to say he is actively considering the issue. Will he indicate where that consideration has reached?
Damian Green
Short of reading again what I have just said, that is what we are doing. The Select Committee, of which he is a distinguished member, is conducting an investigation. It has not published its final report, but when it does so the Government will look at it and all the matters it raises seriously.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
The Minister says that the IPCC has asked for two powers that are contained in the Bill. What conversations has he had with the IPCC since the Bill was published about anything that is missing? He says he has had conversations with chief officers, specifically on sanctions. What conversations has he had with the IPCC about sanctions?
Damian Green
I have had extensive conversations with the IPCC. I have seen its briefing to Members, which led to the all-party group amendment. I have specifically discussed sanctions with the IPCC. As I have said in more general terms, if there is a need to widen the IPCC’s powers the Government will look at it with an open mind and with a view to legislation, but it is sensible to await the Select Committee report before committing ourselves in any detail. It will be for the IPCC to investigate whether individuals involved on the day should face misconduct or criminal proceedings; we must ensure it has the powers it needs. The IPCC has been clear: that fully to investigate the terrible events of 15 April 1989 it needs to hear the testimony of officers involved on the day and in subsequent investigations.
Alison McGovern (Wirral South) (Lab)
I thank the Minister for the correspondence he gave the all-party group yesterday. He makes absolutely the right case on the powers the IPCC needs for retired officers. Does he agree that, even if there are substantial legislative issues with retired officers, there is an absolutely clear moral case that retired officers should co-operate with the IPCC?
Damian Green
Yes, absolutely. I agree unequivocally, and it is a widely held view in the police service as well. I know that the hon. Lady understands that retired police officers are just members of the public, however, and therefore that giving the IPCC powers that the police do not have to compel witnesses to appear would be anomalous and certainly not something we would want to do through emergency fast-track legislation. Nevertheless, she made the moral case very powerfully.
The IPCC has existing powers to interview officers and former officers who are themselves the subject of an investigation for either a conduct or a criminal matter. The IPCC can already compel a suspect to attend an interview, but it needs to hear from officers not just when they themselves are the subject of the investigation. It also needs to obtain evidence through interviews from those who might have seen the events unfold, when they might have seen or heard of fellow officers amending statements and records—in other words, when they had witnessed key events in relation to Hillsborough.
As I have said, the IPCC can compel officers who are themselves under investigation to attend for interview. Clause 1 extends this power so that serving police officers and police staff can be compelled to attend for interview as witnesses as part of any investigation managed or independently undertaken by the IPCC. The power will apply to officers in Home Office forces and other policing bodies, such as the British Transport police. I am clear that any serving officer who fails to comply with a request to attend such an interview should face disciplinary measures. I emphasise that point once again.
That is consistent with the existing regime that applies when a person who is the subject of an investigation fails to attend for interview. For the sake of clarity, I will repeat that such disciplinary matters may have serious consequences, including— ultimately—dismissal. I have set out that the power granted through clause 1 applies to individuals still serving with the police. The IPCC will not be able to compel a retired officer to attend an interview as a witness through the use of this power.
Several hon. members have asked why the provision should not apply to retired officers, but, as I said, they are in the same position as ordinary members of the public and so are no longer bound legally by the same responsibility as serving officers—although the hon. Member for Wirral South (Alison McGovern) made the point about moral responsibility. To grant the IPCC the power to require a retired officer to give evidence simply as a witness would provide the IPCC with greater powers over the public than those available to the police. I think the House would rightly be uncomfortable about that.
Let me again be clear, however: that does not mean that the IPCC cannot or will not investigate retired officers for misconduct or criminality that they might have committed. The IPCC will do that. We are just not providing the IPCC with the power, at this stage, to compel such retired officers to attend an interview as a witness to events on the day or thereafter. Crucially, the IPCC has not asked for that power in relation to the Hillsborough investigation, so the House does not need to rush its consideration of the matter.
I know that many concerns have been expressed in the House and outside that an officer who wants to avoid the repercussions of their actions can simply retire and avoid all sanction, but that is not the case. The IPCC can and will investigate any individual suspected of criminal behaviour. It has the powers it needs to pursue these individuals and bring them to book. For example, the IPCC already has the power to require an individual, serving or retired, who is suspected of misconduct or criminal behaviour to attend an interview. The IPCC can, in appropriate cases, refer a matter to the Director of Public Prosecutions where there is evidence of criminality in relation to Hillsborough.
If an individual is subsequently convicted of a criminal offence, in connection with their service as a police officer, they could lose the majority of their pension. It will be for the relevant police and crime commissioner to apply for this sanction. That is in addition to any penalty ordered by a court. Let me be clear: charges can be brought regardless of the employment status of the individual concerned.
Steve Rotheram
Just for the record, will the Minister clarify something? Criminal behaviour could lead to someone who is serving or who is retired facing a reduction in their pension. What happens if somebody is found guilty not of criminal behaviour, but of wrongdoing? Does the same sanction still apply?
Damian Green
The sanctions apply if someone is convicted of a criminal offence—I think that is the point the hon. Gentleman wishes to be clarified. If someone has not been convicted of a criminal offence, matters affecting their pension would, not least, engage human rights legislation as well, so things would be much more difficult in those cases.
Mr George Howarth (Knowsley) (Lab)
I understand the Minister’s point that if someone was guilty of a criminal offence, there would be consequences, but what if someone who was serving and was investigated at the time had been found guilty of not carrying out their duties in an appropriate manner? That would have been a disciplinary matter rather than a criminal matter. Is there any sanction that could apply in those circumstances?
Damian Green
I think we are getting into the realms of speculation about individuals. There is a clear distinction, which I am sure the right hon. Gentleman will recognise, between criminality and pure misconduct. It is clearly difficult to take disciplinary action against someone who is no longer an employee. At the most serious end, many of the Hillsborough cases would potentially involve criminal sanctions, but too detailed speculation on these matters might be unhelpful in the long run, not least to the families and others seeking justice as well as truth.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
Where there is a need to gather sufficient evidence to decide whether a retired individual should be the subject of an investigation for misconduct or criminality, does the Bill contain sufficient powers to enable that evidence to be gathered?
Damian Green
The IPCC already has considerable powers to gather evidence, and it is not the only body involved in these investigations. My right hon. and learned Friend the Attorney-General is looking at whether to apply to reopen the inquest, so a coroner may be involved as well. There will therefore be thorough investigation, and I would be surprised and disappointed if any avenue of inquiry fell through the cracks. As much as can be done in the investigation is being done and will be done.
The overall point I would like to reassure the House about is that where individuals are suspected of misconduct or criminality, the IPCC has the powers it needs, so clause 1 is solely about its powers relating to witnesses. The power is essential if the IPCC investigation is to maintain public confidence and show that it has left no stone unturned—precisely the point that the hon. Member for Liverpool, Riverside (Mrs Ellman) made. Information from witnesses will ensure that the IPCC investigation has a broad and thorough evidence base.
As we have discussed, the sanctions carry real weight for serving officers. It would not be appropriate to extend that to retired officers at this time. I should perhaps repeat that I fully expect the vast majority of retired officers called as witnesses to attend willingly. The importance of the matters being considered would cause any decent human being to provide whatever assistance they could. However, we want to ensure that the IPCC has the clear statutory basis to be able, independently and authoritatively, to require serving officers who may have useful information for the purposes of the investigation—because they witnessed events—to attend an interview. This power is needed urgently. The IPCC is currently scoping its investigation, but it wants to make rapid progress, and I know that many people inside and outside the House want that as well. It plans to start calling witnesses early in the new year, so this power needs to be available to it by then if the investigation is not to be held up.
Clause 2 will allow the IPCC to investigate matters that were previously subject to investigation by its predecessor, the Police Complaints Authority. This power will be exercised only when the IPCC is satisfied that the exceptional circumstances of a case justify its use. That is a high threshold. The IPCC has made it clear to me that, without this power, certain key events of the Hillsborough disaster would be out of scope of its investigation, as they have previously been considered by the PCA. In particular, the PCA investigated the decisions to open exit gate C at the Leppings Lane end of the Hillsborough ground and not to close the tunnel. Without this additional power, those matters would be out of scope of the IPCC investigation, although it is clear that those two decisions were critical to the events of the day.
So this power is needed, but it needs to be tightly drawn. We need to avoid the prospect of opening up all previous PCA investigations for review. That is why the power provides the IPCC with the discretion to reopen previously investigated cases when the matter meets the test of “exceptional circumstances”. We are confident that that terminology ensures that investigations relating to Hillsborough can be reopened, while also setting a high enough bar to prevent all PCA cases from being subject to another investigation.
Stephen Mosley
The IPCC states in its briefing note, to which the Minister has referred, that there should be powerful public interest involvement if it is to reopen a case. Does he agree that that should be the case?
Damian Green
I do. As I have said, it is for the IPCC to define “exceptional circumstances”, but clearly a powerful public interest would be one example. New evidence would potentially be another. The circumstances would be of that kind of order. In serious cases, a powerful public interest or the production of new evidence would enable the IPCC to say that the hurdle had been overcome.
Angela Smith (Penistone and Stocksbridge) (Lab)
Does the Minister think that the Orgreave incident represents a case in which these powers might be useful?
Damian Green
It is for the IPCC to decide such questions. The I stands for “Independent”, so it is not for Ministers to stand here and tell the IPCC how to define its role or the powers that we give it. It is for us to give it the powers, but it must define how best to use them. So, if the hon. Lady will permit me, I will leave that to the IPCC to decide. It will decide such questions in that case and in any other, and it is right that the decision should sit with it.
Bill Esterson (Sefton Central) (Lab)
I apologise for missing the start of the debate. The Minister has talked about reopening investigations that have already been looked into by the Police Complaints Authority. Given the number of officers who were persuaded to change their statements and the scale of the cover-up, does he envisage that those issues will be covered by this provision in the Bill?
Damian Green
The previous Government passed a perfectly sensible piece of legislation when setting up the IPCC to prevent it from becoming a body that would investigate every controversial police case that had been investigated by its predecessor body. The reason for including this provision in the Bill is that the IPCC has told the Government very firmly that it needs the power to investigate a case that has already been investigated by the PCA, for the reasons that I have given relating to what happened on that day, and that it wants the high hurdle of “exceptional circumstances” to be set. One element that would enable it to get over that high hurdle would be the arrival of significant new evidence in a public interest case. As the hon. Gentleman says, the fact that there is evidence of statements having been altered on an industrial scale certainly hits the target as far as new evidence is concerned.
John Mann
To clarify, if during the IPCC’s investigations into Hillsborough, it comes across other major events that might not be in the public domain at all yet might give some indication not of what happened at Hillsborough or how it happened, but of why certain things happened, will it be able to look into or pass on relevant information at a future stage? In other words, can the IPCC look at things that are not directly related to Hillsborough but that come out as reasons for actions that are, on the face of it, unrelated but could be worthy of investigation in themselves?
Damian Green
Again, it will be a matter for the IPCC to decide what to do with the evidence it finds. Inevitably, in this kind of investigation, the evidence it finds will be public. I think I can see where the hon. Gentleman is trying to go. As I say, the IPCC has considerable powers of investigation and it could make things public that might enable someone to make a complaint, at which point it would have to decide whether its powers were sufficient or whether its new powers conferred under this Bill could be triggered. The underlying point is that the IPCC is independent: it is for the IPCC to decide what best to do with the evidence it finds during the course of its investigations.
The Bill is narrow in scope, but crucial to the process of achieving justice for the 96 individuals who died as a result of the Hillsborough disaster, for those who were injured and for the families and friends of all involved.
Steve Rotheram
I thank the Minister for his patience again, but I am certain that he must understand the nervousness on Merseyside when this particular issue goes through this House. I know, because I have spoken to him, that the Minister is fully aware of and appreciates the current situation of Anne Williams, whose online e-petition reached over 100,000 signatures some weeks ago. Will he assure us that none of the investigations that will be carried out through the additional powers of the Bill will in any way impact on the time scale of the new inquests? Will he say more about his latest expectations regarding the timing of the application to the High Court to quash the original unsound verdicts?
Damian Green
On the first point, I know that the IPCC is extremely aware of the desire for things not to appear to be unduly delayed. Indeed, that is one reason why we are here today—to put a Bill through all its stages in one day, which shows that the House and the Government are trying to speed the process up as much as we can.
On the application to the High Court, I know that my right hon. and learned Friend the Attorney-General is proceeding as fast as he can, and I think a decision will be made public very shortly. I can go no further than that, but the hon. Gentleman’s wider point is well made, and I absolutely take it. I am very conscious that people want to see that this process, having started after the report, is not unduly delayed at any stage. I am very keen, as I know are many other people who have been involved from the start, that that should happen.
That explains why the House should not today consider the wider reform of the IPCC, although we will examine whether there are other gaps in its powers. We have asked it what tools it needs to progress its investigations into Hillsborough, and this short Bill will ensure that it has the two additional powers for which it asked. The Bill thus represents an important step on the road from truth to justice for Hillsborough. All who support that aim will, I hope, support this Bill. I commend it to the House.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I must now announce the result of the deferred Division on the draft order amending schedule 1 to the Legal Aid, Sentencing and Punishment of Offenders Act 2012. The Ayes were 288 and the Noes were 213, so the Question was agreed to.
I must also announce the result of the deferred Division on the draft Civil Legal Aid (Merits Criteria) Regulations 2012. The Ayes were 287 and the Noes were 213, so the Question was agreed to.
Mr David Hanson (Delyn) (Lab)
Let me begin by thanking the Minister for the discussions in which he has engaged outside the Chamber with Opposition Front Benchers, namely my right hon. Friends the Members for Normanton, Pontefract and Castleford (Yvette Cooper) and for Leigh (Andy Burnham), and me. We have greatly appreciated those discussions, and, like the Minister and, I am sure, many other Members, we welcome the Bill.
The events at Hillsborough 23 years ago were a tragedy of monumental proportions. The lack of justice for the families and friends of the 96 victims sits heavily on all Members of this place, and indeed on the great city of Liverpool, which I am proud to say is the city of my birth. Constituents of mine died at Hillsborough. I know of the problems that the families have experienced since then, and the pain that it has brought them. The campaign for justice has been long fought, over many years. I recall our debate early in 1998, to which many Members who are in the Chamber today contributed. We recognise and pay tribute to the campaign for justice and for the families, and today we will help it to proceed to a conclusion.
Let me again place on record my sincere thanks to the Right Rev. James Jones and the Hillsborough panel, who have done such important work to enable us, by means of the Bill and other measures, to right some of the many wrongs that have been perpetrated over those 23 years. I pay particular tribute to my right hon. Friend the Member for Leigh for leading that process in government, and for not abandoning it in opposition. I think it is telling that every Member representing the city of Liverpool was present for the Minister’s speech today, and that so many Members on both sides of the House representing the north-west and, indeed, other parts of the United Kingdom are present for the debate.
Stephen Mosley
Does the right hon. Gentleman agree that the cross-party nature of what has happened since 2010, when the right hon. Member for Leigh (Andy Burnham) took action to enable the independent panel to sit, has shown the House operating at its absolute best, and that more has been achieved for the victims of Hillsborough since then than was achieved in the preceding 20-odd years?
Mr Hanson
I hope it can be said that death does not bear a party banner, and that the tragedies faced by many of my constituents and those of other Members throughout the House have led us to take action that will achieve the justice that they seek, the justice that they want, and the justice for which they have fought in the face of the lies that have been perpetuated in the community around them for so many years.
We should recognise that the Bill is one step—albeit a small step—towards our achieving justice for the 96 families, their friends, their relatives, and the many people who were injured on that day; but we should also recognise that that journey towards justice is far from over. As we have heard today, the Attorney-General is considering whether there should be a fresh inquest. We certainly want to see the verdicts of the original inquest crushed, and we want the Director of Public Prosecutions to review as a matter of urgency evidence relating to the important matters that occurred that day. The Independent Police Complaints Commission is, of course, already looking into the conduct of police officers.
The Bill is part of the process of securing justice for the relatives, friends and families, but it is only part of that process. Justice will not be achieved until all the matters to which I have referred have been dealt with to the satisfaction of the families, in line with the Hillsborough panel’s recommendations.
Based on the report, the IPCC wants to look into two potential criminal and misconduct issues. First, it wants to examine the conduct of the police on 15 April 1989, addressing the culpability of the individuals and organisations involved and the safety standards, planning and operational decisions of that day that led to the Hillsborough disaster. Secondly, an equally important, but perhaps even worse, series of incidents is being examined: the evidence suggesting a cover-up in the weeks, months and years after the disaster. Of the 164 statements taken by officers on that day, no fewer than 116 were changed in some way, shape or form. That is deceit on a huge scale and we need to get to the bottom of it for the sake not only of the integrity of the police, but of justice for the 96.
I thank the Home Secretary for having listened to the concerns expressed by the shadow Home Secretary, my right hon. Friend the Member for Normanton, Pontefract and Castleford about the powers available to the IPCC. It must have the tools it needs to carry out a thorough investigation into both allegations of criminality and misconduct and the events of the day. The families who have campaigned for that—as well as for the inquest, for the quashing of the verdicts and for the Director of Public Prosecutions to review the evidence—demand no less.
My right hon. Friend called in October for the inquiry to have those powers, because she recognises that it must get to the bottom of why so many police statements were altered. Although the IPCC can pursue officers it believes to have committed crimes, it does not at present have powers to compel serving or former officers to be interviewed as witnesses; nor can it compel civilians to give evidence. Those obstacles must be removed, and the Bill achieves that. What consultations did the Minister have with the families prior to the publication of the Bill, and does he intend to have further discussions with representatives of the families in the next few weeks?
As my right hon. Friend the Member for Leicester East (Keith Vaz) has said, the Home Affairs Committee welcomes the Bill. It has also made some helpful comments, and I hope the Minister will reflect on them. It is clear that the IPCC does not have the powers it needs to meet the objectives it has set itself. Indeed, it has informed the Home Affairs Committee that
“where police officers refuse to attend for interview, IPCC investigators can only seek the information they need through the submission of written questions to officers via their solicitors or other representatives. Not only can this seriously undermine public confidence in IPCC investigations, it can also impact on the overall effectiveness and timeliness of investigations.”
Clause 1 will remedy that, and I welcome it.
There is a separate issue. My right hon. Friend the shadow Home Secretary has rightly asked Lord Stevens to address in his independent review for our party whether there should be a new police standards body and to look at the role of the IPCC going forward. That is a debate for another day, but as the Minister has recognised, in the longer term we will need to put in place a strong body to provide the safeguards and standards required to hold the police to account. That will take time, however, and the friends and families of the victims and the communities of Merseyside, Liverpool, my area of north Wales and beyond demand that we have early action. That is why this Bill is before us today.
Steve Rotheram
On the need for urgency, does my right hon. Friend agree that the Bill does not inhibit our ability to establish a lead investigator to oversee the myriad current investigations, and that that might help Parliament to understand the need for urgency?
Mr Hanson
I am very much on the side of my hon. Friend, and I again want to pay tribute to him and to the impact he has made on these matters since his election in May 2010. He knows the community where he lives and which he represents. He knows that they want to see those matters dealt with urgently, as do all hon. Members; those of us who have bereaved relatives in our constituencies know what that means to them and how they want to see the main important matters that my hon. Friend has brought forward addressed.
Clause 1 will amend the Police Reform Act 2002 to confer witness attendance powers on the Independent Police Complaints Commission. The way in which that will be done is set out in newly published regulations from the Minister, which will adopt a similar approach to that set out in the 2002 Act. Clause 2, on the application of part 2 of the 2002 Act, will deal with questions that the Minister has also mentioned. It will amend the legislation currently preventing the IPCC from investigating any matters previously considered by the Police Complaints Authority. Given that these issues occurred under the PCA’s jurisdiction, it is vital that that bit of the Bill is also put in place.
Later on we will deal with an amendment, but it is important to refer now to the issue at the heart of it. I have pressed the Minister strongly, as have my right hon. Friends the Members for Normanton, Pontefract and Castleford and for Leigh, on the issue of the sanctions in place should an officer fail to attend an interview. Such an officer would indeed be subject to misconduct proceedings, and the Minister has explained to me privately, and has explained to the House today, how he believes those will deal with that issue. I simply say to him that we will be maintaining a strong watching brief, because we may need to revisit the sanctions issue either in Committee or at a later date.
The amendment tabled by the all-party group on the Hillsborough disaster, so ably chaired by my hon. Friend the Member for Wirral South (Alison McGovern), raises that issue. We will have the debate when we deal with the amendment, but it is important that those who refuse to address the needs of the IPCC—if there are such people, and there may not be—face some sanction. The Minister has made it clear to me that that will involve police misconduct proceedings, which could involve dismissal, loss of pension or other issues. The key question is this: is the sanction sufficient? We will test that at a later date.
Discussions also have progressed with my right hon. Friend the shadow Home Secretary and myself on the IPCC’s inability to compel retired officers to attend interviews. The Minister has agreed to look at this matter. He has given an explanation again as to why retired officers should not be eligible to be brought for interview; this was because of the difficulties of legislation and other related matters. In a letter that he sent the shadow Home Secretary on 22 November, which was copied to me, he said:
“As I set out on Monday, we understand the calls to grant a power to compel retired officers to attend interviews, and” —
this is important—
“will consider these in slower time, but do not feel it is appropriate to grant such a wide-ranging power through fast track legislation.”
Will the Minister indicate during this debate what exactly he means by “slower time”? I would like to know with whom he is discussing these issues, when he intends to report back to the House on them, and whether he will explore the issues that we have discussed in respect of human rights legislation and pension confiscation. Will he report back to the House after this fast-track legislation on those matters?
A commitment made by the Minister today—even now, dare I say it—from across the Dispatch Box to report back to this House on those matters would be of great interest. It would be very much welcomed by Members of this House, who are concerned that officers involved in incidents at Hillsborough who have retired will not be subject to criminal proceedings because they are not involved in criminal activity but could give information that is beneficial to a range of other matters relating to the Hillsborough inquiry. I want to know from the Minister, now or later, what he means by “slower time”, because it is important. I would welcome reassurance that those powers are available and will be considered. I will not push him further than that today, but we will revisit the question in due course.
I would also like the Minister to confirm my understanding of the situation with the IPCC’s oversight as it extends to private contractors that provide services to or on behalf of the police. The legislation is put in place for Hillsborough, but also for other events, as my hon. Friend the Member for Bassetlaw (John Mann) mentioned, and for all time until it is changed by future legislation. Will the Minister confirm that police community support officers and those individuals who undertake private contracting for the police force will come under the auspices of the Bill? I know the answer to that question, but I want the Minister to put it on the record in the Chamber before the Bill is passed.
I welcome the fact that the IPCC has suggested that it will be in a position to take witnesses early in the next year. All Members of this House who are involved, both those who represent the city of Sheffield—I am pleased to see my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) in her place—and those who represent constituencies in the north-west would welcome an early conclusion. The Minister has been keen to say that the investigation will be independent, but I would welcome some indication of the time scale within which, once the Bill has been approved, he would expect the IPCC to conclude its consideration of these matters. If he cannot do that today and wants to give it further consideration outside the Chamber, I would welcome it if he could drop a note to Members who speak on the subject on Second Reading. An indication from the IPCC of its intended time scale would certainly be welcome.
I genuinely support the Minister’s Bill, but I would also welcome his comments on correspondence that I have received in the last 24 to 36 hours from bodies representing the police that have considered the Bill post-publication. It worries me, so I ask the Minister to give some consideration to the points it raises. First, I have a letter from the Police Superintendents Association of England and Wales addressed to my right hon. Friend the shadow Home Secretary and copied to me. It is from Chief Superintendent Derek Barnett, the president of the association, and the very first line states:
“It is disappointing that the only notification…of this legislation was a telephone call from an official the day before the Bill was tabled.”
He goes on to say that he shares
“your commitment to ensuring that the Hillsborough case is fully and properly investigated in a manner that is both expeditious and thorough, and with the eventual outcome that the full circumstances of those terrible events are once and for all indentified and that justice can be seen to have been done.”
The police superintendents support elements of the Bill, but I am slightly surprised that they were not consulted about it as a whole apart from by telephone on the day before it was tabled. Between now and the Bill’s consideration in the other place, will the Minister meet the superintendents or contact them and listen to the points they want to make? I support the Bill as it is, but the superintendents want to make some points about it and the lack of consultation is concerning. They will have a role to play on these matters in future and the Minister might find that they support him.
I also have a similar letter from the Police Federation. It is from the deputy general secretary, Stephen Smith, who states on page 2:
“I have to say that I am personally disappointed by the action taken in issuing the Bill, rather than consulting with the sub-committee in the first instance. I believe this course of action demeans the very important work that has been carried out over the last 7 years.”
The sub-committee to which he refers is the Police Advisory Board for England and Wales sub-committee, which is a negotiating body on these matters.
Whatever our view on a range of incidents, the police have an important say on this matter, and the fact that they have not been formally consulted is an oversight. Between now and Second Reading in another place, if the Bill progresses today, as I expect it to do, will the Minister make contact with the Police Federation to give the police an opportunity to have their say?
My final point relates to the scope of the Bill. The Minister knows that he is the Policing Minister for England and Wales, and that potentially, as we discussed outside the Chamber, police officers who in 1989 worked for a force in England and Wales may now work for a force in Scotland or Northern Ireland, outside the Minister’s jurisdiction. We raised the matter in our informal discussions and I do not believe I have had a response from the Minister, unless I missed it. I would welcome an update on the progress that he has had with the devolved Administrations in Northern Ireland and Scotland on ensuring that the terms of the Bill would not encounter any difficulties from those Administrations. They are different Administrations and have different police forces. If somebody is now employed by the Police Service of Northern Ireland or the Scottish police force, that could present difficulties. I would like to see the matter resolved. The Minister has said outside the Chamber that he has discussed it and is coming to a conclusion on it.
I welcome support for the Bill from Liberty, the human rights group, which believes that this is the right course of action. There is cross-community support for the Bill and I wish it fair passage. My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) referred in an intervention to the petition organised by Anne Williams. Perhaps the Minister winding up the debate can give us an update. As we know, Anne Williams has a very difficult and challenging illness and wishes to ensure that her concerns about her family’s loss are resolved before her illness reaches a sad conclusion, as she expects it to do. We should consider an early opportunity to discuss that petition again in the House. May I press the Minister for an early answer from the Department on the earliest possible inquest into the family of Anne Williams?
The Bill has widespread support. There are some issues which I have raised with the Minister today that we want to see explored in detail, but I know as somebody who represents families who lost relatives at Hillsborough, I know from being born and growing up in Liverpool the community that I represent, I know from my support for that football team for my entire life, and I know from the contributions, work and efforts of my right hon. and hon. Friends from across the region and across my area of north Wales that the events of Hillsborough in 1989 caused such challenge, tragedy and concern that we now want justice for the families of those 96 victims and others who were injured.
Through their effort, passion and commitment the families have brought the case to the stage that we are at today, where an inquest is potentially pending, verdicts can be quashed and the Director of Public Prosecutions is going to act on the matter. The Bill gives an opportunity for the Independent Police Complaints Commission to provide answers and take real action on the concerns that have existed for many years. I welcome the Second Reading of the Bill. We will return to issues in due course in Committee, but the Opposition support the Bill here and in another place and look forward to the day when the IPCC’s investigation leads to satisfaction, truth and justice for the families of those who were lost in Sheffield on that day in 1989.
Stephen Mosley (City of Chester) (Con)
I, too, welcome and warmly approve of the Bill. The whole country was shocked by the findings of the Hillsborough independent panel. In subsequent statements and debates in this House, it has become obvious that there is a huge groundswell of parliamentary opinion that swift action needs to be taken to achieve swift justice for the 96.
Outside this debate, the Attorney-General is doing absolutely the right thing by pushing for an early referral to the High Court and for it to make a speedy decision on the validity of the original inquests. The Home Secretary has done absolutely the right thing by calling for the IPCC to investigate both the actions of the police on the day of Hillsborough and their subsequent involvement in any form of cover-up. She promised that the IPCC would be given the powers and resources it needs to pursue that investigation, and that is what the Bill delivers.
I would like to thank the Home Secretary for the speed with which she has brought the Bill forward. The families of the Hillsborough victims and the survivors are understandably looking for swift justice. Given that the IPCC intends to begin calling witnesses to its investigation at the beginning of next year, the sooner it is in possession of the necessary tools, the better.
It is important to say that, as with all the progress that has been made on Hillsborough since 2010, I am delighted that the Bill has cross-party support today. I know that the shadow Home Secretary spoke in favour of fast-track legislation during the Bill’s First Reading a fortnight ago, and Opposition Members have been a great help in advancing the Bill.
Alison McGovern
I agree wholeheartedly with every word the hon. Gentleman has said. Does he agree that if it was possible to dedicate legislation, we would all like to dedicate this legislation to the families of those who lost loved ones on that day?
Stephen Mosley
I agree entirely. I know families of people from Chester who sadly died that day, and 23 years later it still affects them daily. It is up to us in this House to ensure that we achieve a swift resolution for them, and that is what we are trying to do. It is what we have been trying to do since the right hon. Member for Leigh (Andy Burnham) set up the independent panel three years ago. Absolutely everything we do is to ensure that we get justice for all 96 and all survivors.
The Bill, as we have heard, contains two main clauses and performs two main functions. I will look at it backwards and consider clause 2 first. Clause 2 allows the IPCC to launch investigations into incidents that occurred before the commission was established in 2004 and incidents previously investigated by its predecessor, the Police Complaints Authority. The Bill will essentially make it possible for the IPCC to investigate police actions at Hillsborough 23 years ago, which I totally support.
The Bill will also compel serving police officers to attend hearings as witnesses, a power that has not previously been available to the IPCC. It is important to note that, although the Bill has been brought forward specifically because of Hillsborough, most of us would agree that the power to call police officers as witnesses should be a tool that is regularly at the IPCC’s disposal. I am therefore pleased that the Bill is not set to expire and that the powers conferred on the commission will be retained for future IPCC investigations.
I note, as did the shadow Policing Minister, that the Police Federation has expressed some concerns, especially about the clause that will require police officers to attend an interview. Steve Evans, who leads for the Police Federation on professional standards, has raised a valid concern:
“Police officers are going to be treated differently from any other section of society. I am not quite sure what”
the Home Secretary
“is hoping to achieve.”
In response to that point, I think that police officers should indeed be treated differently from other sections of society, by virtue of the fact that they are entrusted to administer the law, must be accountable for their actions and must not be able to shy away from any form of investigation. Mr Evans went on to say:
“I would like to know what the problem is that needs fixing—as well as the evidence which suggests that officers do not comply with the current system.”
The IPCC briefing paper that we received helps us in responding to Mr Evans’ concerns. It says:
“Though we do not keep specific records of instances of non-cooperation, we have readily been able to identify at least 25 cases, involving over 100 police officers, where there has been a refusal to attend for interview. These cases cover such serious matters as death or serious injury, police shootings, road traffic incidents and the use of excessive force.”
Indeed, a recent case in point is that of the shooting of Mark Duggan in Tottenham last year that contributed to the escalation of violence in the area and led eventually to riots across the country. The police marksman who shot Mr Duggan refused to be interviewed by the IPCC as part of its investigation into the incident, as did 30 other officers. Because of the legislation that is currently in place, the commission was unable to insist on attendance. Regardless of the specific need to expedite investigations into Hillsborough, Mr Duggan’s case alone highlights a need for wider change in the legislation.
While I am totally supportive of the Bill and wish it all speed and every success in its passage through Parliament today, there are a couple of areas where questions need to be answered. First, the Bill does not compel ex-police officers or ex-police staff to attend interviews as witnesses. Hillsborough was 23 years ago, and many of the officers involved will no longer be serving. I know that my right hon. Friend the Home Secretary is aware of this problem and has considered it. On 22 October, during the debate on the Hillsborough independent panel’s report, she said:
“The Government are already looking at what additional powers the IPCC will need, which includes proposals to require current and ex-police officers who may be witness to a crime to attend an interview”.—[Official Report, 22 October 2012; Vol. 551, c. 721.]
I, too, would like the IPCC to be given the power to call former officers to give evidence. I appreciate, however, that that may be a difficult provision to enact and that this emergency Bill is probably not the right place in which to include such a power. I note that the IPCC has discussed this and decided that the requirement relating to former officers would be unenforceable and that there would be little value in adding it to the Bill.
However, I would like one aspect to be tightened, and, with other Members on both sides of the House, I have submitted a probing amendment to be discussed in Committee to explore it further. In essence, it is about sanctions for non-attendance at interviews. As the Bill stands, sanctions for non-compliance will be dealt with by the relevant authority tasked with dealing with misconduct against the officer in question. However, the question of whether the non-attendance of the officer is to be determined as misconduct is also left at the discretion of the relevant authority. The IPCC has stated that a refusal to attend an interview should be immediately categorised as misconduct and that appropriate disciplinary action should instantly be triggered. I have a large degree of sympathy with that proposal. I implore the Policing Minister to consider adopting the amendment, which would allow the Home Secretary to ensure that clear, unambiguous and consistent sanctions can be implemented across the country.
This debate is set in the context of an extremely tragic matter, but in my two and a half years as a Member of Parliament the issue of Hillsborough has consistently brought out the very best in this House. For as long as that is necessary, I hope that it continues.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I gave some leeway to the hon. Gentleman in making his speech, but I hope that we will not dwell too much on the amendment, as we will obviously move on to that in Committee.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
A number of hon. Members have already pointed out that it is highly unusual to fast-track an important Bill, but we are dealing with an unusual circumstance and it is essential that this Bill goes through. We are dealing with the aftermath of a terrible tragedy that happened 23 years ago: 96 people died, thousands more were injured or traumatised, there was a cover-up, nobody was brought to book for what happened and, indeed, the victims were blamed for the culpability of others. That cover-up is now unravelling and there is a desire for urgent justice and accountability. That is why we are considering this Bill, but this is only one part of a whole range of actions now being taken speedily and correctly.
The Independent Police Complaints Commission has published its 10-point terms of reference, a number of which demonstrate the relevance of this Bill. The IPCC wants to find out what happened and how 116 witness statements came to be altered in order to remove or lessen the culpability of police and, indeed, others. It wants to consider the validity of the police evidence to the all-important Taylor inquiry. It wants to consider the conduct of the West Yorkshire and South Yorkshire police in relation not just to what happened at the time but to subsequent investigations. It wants to investigate the authorisation given to test the alcohol levels of the victims and to allow access to the police national computer in an attempt to denigrate the victims. The vital issue of what happened on the day and of who took the decision to open the Leppings Lane gate is critical. The culmination of all that was the attempted cover-up—indeed, it was successful—to blame the victims for what happened.
Those are just some of the items specified in the IPCC’s terms of reference. In order for them to be investigated properly, it is essential that the IPCC has adequate powers. It is critical that we discuss the issue and make a decision today so that the new investigation can start quickly. I understand that if we reach an agreement today, the IPCC investigation will be able to start in early 2013.
The Bill addresses two key areas. First, it will enable the IPCC to compel serving officers and their staff to answer its questions as witnesses. The IPCC will be able to consider whether they are guilty of misconduct or, indeed, criminality, but it is also essential that they come forward as witnesses. Secondly—this is also essential—it will allow the IPCC to investigate issues previously investigated by its predecessor, the Police Complaints Authority. Both measures are important.
This debate has already shown that there are question marks over the Bill’s adequacy in respect of those measures. What would happen, for example, if serving officers or their staff did not agree to come forward when requested? Would the disciplinary measures, which have been spelt out this afternoon, be adequate? I do not think that we will know the answer until such an event happens. The issue of calling retired officers or staff is not covered by the Bill, either. There may be other means of doing that, but the situation is extremely unclear. Those are two areas of the Bill that stand out at this stage as either not covered adequately or, in the case of retired officers, not covered at all.
Some of the issues will be addressed when we discuss the amendment in Committee following this Second Reading debate, but it is essential that there is continuing dialogue and that the House is made aware of any progress. We need to know whether the proposals for addressing these matters are valid, and we need an ongoing discussion and up-to-date information, so that if any further steps are required they can be enacted without undue delay.
There is cross-party agreement on what is happening. The Hillsborough independent panel was set up in the last Parliament and its work has been taken forward in this one. There is cross-party agreement on that.
Twenty-three years is a long time to wait for justice. The families deserve no less than truth, justice and accountability. That requires speedy action, but that action must be backed up by sufficient powers to enable the proper information to be considered in a judicial process, if that is what is required. I hope that the Bill will help to achieve that.
It is extremely important that the House is kept informed of progress, including the consequences of this Bill being passed and the question of reopening the inquest—something that will be considered in this place at another time.
Dr Julian Huppert (Cambridge) (LD)
It will not be news to anybody in this House how serious the Hillsborough disaster was. It is still the worst tragedy in British sporting history. The shocking revelations of deception, blame and injustice have resonated with football fans and many others around the world. The 96 people paid an awful price and we are still learning from it today. I hope that Parliament will at last ensure that we learn the harsh lessons of the last 23 years through this vital legislation.
I will not go through the details of what happened because they have been eloquently expressed by many right hon. and hon. Members who have much closer links to these events, and the unacceptable acts of manipulation and self-interest by the police forces involved in the disaster have been covered extensively in the media. It is clear from the Hillsborough independent panel report that the extent of the loss of life can be attributed to multiple failures in the emergency services and other public bodies that were charged with the safety of the public on that occasion.
We have to accept the reality that South Yorkshire and West Midlands police, as well as other emergency services, made “strenuous attempts” to deflect the blame for the crush on to the victims. The report stated clearly that 116 of 164 police statements were
“amended to remove or alter comments unfavourable to”
South Yorkshire police. I know that the whole House would agree that that is clearly unacceptable.
For the victims of the catastrophe who have seen decades pass without justice, it is essential that we act to ensure that the systems put in place to protect the public can no longer place themselves above that duty. It is therefore critical that we reform the IPCC. There are two issues. First, the changes proposed in this Bill, which I support, will, we hope, help the Hillsborough investigation, although I have a couple of concerns that I will raise in a moment.
Secondly, there is a need for broader reform of the IPCC. There is much concern among the public that it does not always act sufficiently independently, that it does not take up enough cases and that it is not able to investigate cases as well as it needs to. I am pleased that the Minister has made it clear that he will consider carefully the work that the Home Affairs Committee is doing to look more broadly at the IPCC. There are a number of points that I hope he will look at. I have already raised the issue of those who operate in quasi-policing roles. The former chair of the IPCC, Nick Hardwick, has said that
“if it looks like a police officer, talks like a police officer, walks like a police officer, the IPCC should investigate it.”
The Minister has said that he will have an open mind in looking at those issues. I hope that he will take action on quasi-policing roles.
The Liberal Democrats support the Bill entirely. We are delighted that it also has the support of organisations such as Liberty, which rightly states that there should be due process for police officers. However, there are a number of issues that are not quite clear and I would be grateful if the Minister could reiterate his position on them. The first is what will happen to police officers who are required to attend an interview but who refuse to answer questions at it. Everybody has the right not to answer questions and not to self-incriminate, but there is a question about whether there is a duty on somebody who is still an employee to answer questions. The Home Affairs Committee report, which we concluded yesterday in time for this debate, states at recommendation 10:
“We note that refusal to attend an interview may result in misconduct or gross misconduct proceedings, but that there is no sanction for refusal to answer questions. We expect that chief constables will indicate to their forces that such uncooperative behaviour would be considered to be at odds with the spirit of professional duty.”
I hope that the Minister will confirm that that is his interpretation, too, and that he will encourage chief constables to make that clear more broadly.
There is still the issue, which I raised with the Minister earlier, of former police officers. He pointed out, and others confirmed it, that they would have a moral obligation to co-operate. That is definitely right—we would like former police officers to take part—but I am not clear what would happen if the unfortunate occurred, and some police officers did not agree to co-operate and that caused a fundamental problem with the investigation. I hope that the Minister will consider what happens if that becomes a problem.
Damian Green
In the middle of that section of his speech, the hon. Gentleman moved from retired police officers to police officers. Did he mean retired police officers?
Dr Huppert
I am sorry; I meant former police officers who do not have to attend an interview and decide not to do so, and that becomes a problem. I hope that the Minister will consider, obviously with much reluctance, whether we need to do anything else to ensure justice. I thank him for correcting me if I misspoke.
I hope that the Bill will be passed quickly, and I look forward to hearing other hon. Members’ comments today.
Angela Smith (Penistone and Stocksbridge) (Lab)
I am pleased to be able take part in this debate, albeit briefly, because the events of that awful day took place in the city that I represent, and I was the Member for Sheffield, Hillsborough before the election.
I welcome the Bill, and not just because it makes the IPCC’s work so much easier—the investigation into what really happened at Hillsborough, and, in the course of establishing the truth, holding to account those who were responsible. I heard what the Minister said about the bar for the use of the powers in the IPCC’s future investigations, but I believe that incidents such as Orgreave will reach the standards that that bar requires, and that the Bill will be applied to them.
I pay tribute to the shadow Home Secretary and to my right hon. Friend the Member for Delyn (Mr Hanson) for their work, and to the Minister. The non-partisan manner in which the matter has been handled is a tribute to the House’s response to Hillsborough and to the Hillsborough independent panel’s report. It has been to Parliament’s credit. We need to continue in that spirit.
I sympathise with the shadow Minister’s views on the need to consider how we can enable the IPCC to require retired police officers to co-operate with the investigation. That is a critical point. If we are trying to make it possible for the IPCC to conduct a thorough and definitive investigation into what happened at Hillsborough, it is vital that no stone is left unturned, to use a cliché. Not to be able to interview retired members of the force would leave a massive hole in the IPCC’s investigations. Somehow, that loophole—that weakness—in the IPCC’s powers needs to be resolved before it completes its investigations.
In the debate in response to the Hillsborough panel’s report, I spoke about the need for the House to recognise that policing in South Yorkshire has changed since 1989. I reiterate that today. Policing has clearly moved on from where it was 23 years ago, not only in South Yorkshire but throughout the country. Nevertheless, that does not mean that things are perfect. The provisions in the Bill are part of the evidence that policing in this country is moving forward. The fact that we are at the point where we are saying that serving police officers and, we hope, retired officers can be required to give evidence to the IPCC is a clear tribute to the progress that we are slowly making towards a position in which policing is as transparent as possible. Only when we get to that position can we truly say that people will once again trust policing in this country.
Mr Hanson
Perhaps the Minister can respond in his winding-up speech to one point I should have made in my contribution but did not. What happens if an officer is under investigation under the powers in the Bill, and subsequently, during the course of the investigation, determines to retire? Perhaps the Minister could clarify on the record what happens in those circumstances.
Angela Smith
I concur with my right hon. Friend that that is one of the key questions we need to discuss in Committee. This is not only about retired officers and serving officers, but about those who do not want, through misguided loyalty, to incriminate people with whom they have worked over the years, and who might be tempted to retire, because they are on the point of retirement, to avoid having to give evidence.
The numbers who will try to do that will be relatively small. I am absolutely confident that the vast majority of South Yorkshire officers, both retired and serving, will be keen for the truth on Hillsborough to be established. Most will be keen to co-operate with the IPCC inquiry. Some of those who were there on the day have been to see me about Hillsborough. It is clear that they want to put on the record their role on the day and the fact that they did nothing wrong. It is in the interests of all those who were serving in the force at that time and who were involved in the events of that day that they are are given the opportunity to put on the record their memories of what happened. That is why the vast majority of officers will be keen to co-operate. The establishment of the whole truth is the only way in which this issue will be resolved once and for all. As my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) said, truth, justice and accountability are the only way forward.
The hon. Member for Cambridge (Dr Huppert) mentioned the possibility of witnesses refusing to co-operate. I know the South Yorkshire force and its leadership reasonably well. Hon. Members can only place our trust in the ability of that leadership to ensure that the clear message goes out to serving and retired officers that full co-operation with the work of the IPCC is required. We have a golden opportunity to lay this issue to rest once and for all. Achieving that goal—once and for all resolving the disaster of April 1989—is primarily in the interests of the families of the bereaved, but it is also in the interests of South Yorkshire police and the people of Sheffield, who have lived with the disaster daily.
It is incumbent on all of us to remember that the provisions in the Bill apply not only to the actions of South Yorkshire police on the day and West Midlands police. We know from the IPCC that other police forces are almost certainly involved. If Orgreave is investigated using the powers in the Bill, the provisions will apply to a number of police forces. In the interests of accountability, transparency and the future of policing in this country, but more than anything in the interests of the families of the 96, the Bill should be given a clear passage through the Commons and speedily taken through the Lords, so that we can get it on to the statute book and the IPCC can get on with its work.
Mr George Howarth (Knowsley) (Lab)
I have been sitting here waiting to be called trying to think of some words with which to introduce my comments. My hon. Friend the Member for Liverpool, Riverside (Mrs Ellman),who I thought was about to leave just as I was going to compliment her, expressed well the strong feelings her constituents and mine have about the independent panel report chaired by the Bishop of Liverpool. I do not seek to add to that, other than to say that she demonstrated that we are almost at the point of exhausting the lexicon of infamy in describing what came out in it.
I want to make only two points, and I will try to be brief. First, with a little indulgence, Mr Deputy Speaker, I would like to say that I know the Attorney-General is close to the end of his deliberations on whether an application should be made to the court on the inquest that took place. As I have said previously, I attended one day of the inquest with some of my constituents and have never witnessed proceedings so designed to offend. I do not want to add to that, but I do not use that description lightly. I hope the Attorney-General will reach a speedy conclusion to his deliberations, that the application will be made to the court quickly and that notice is taken of the online petition referred to by my right hon. Friend the Member for Delyn (Mr Hanson), which was set up by Anne Williams. I hesitate to go much further than that because I am well aware of how the Lord Chief Justice might respond to the interference of politicians in the conduct of the courts, but I hope it will be given prominence in the discussions between the Attorney-General and the Lord Chief Justice. We have the opportunity to talk about serving officers when we discuss the amendment tabled by the hon. Member for City of Chester (Stephen Mosley), myself and others, so I will reserve my comments on that issue until then.
The second issue is whether retired police officers can be compelled to give evidence to the IPCC’s investigation. My hon. Friends the Members for Wirral South (Alison McGovern) and for Penistone and Stocksbridge (Angela Smith) and the hon. Member for City of Chester have rightly called on the good name of the police and said that they hope everyone will do the honourable and honest thing. I echo those calls, but I throw in a note of caution. Some people who are now retired—I will not get into the realms of talking about who they may be or what they may have done—may be culpable of offences. Appeals to their honour, when by giving evidence they risk being put in a position where they are either telling lies or incriminating themselves, will in some cases fall on fairly stony ground.
In the years I have been a Member of this House, and even before that, I have always been a strong supporter of the police. I believe they perform an incredibly important role on behalf of all of us in society. But the truth is—my hon. Friend the Member for Liverpool, Riverside mentioned this difference—we know that serving police officers, either under pressure or voluntarily, altered important statements, and many of them will now be retired. I realise the Minister’s problem, and I am not criticising him for not finding a way of covering those people in the Bill, but the IPCC will have to think about how it can, if not compel, at least make it difficult for those retired officers not to give evidence. Quite how it can do that, at this juncture, is beyond me. I do not offer any suggestions, but it is something that the IPCC needs to give careful thought to.
I wish to bring to the IPCC’s attention one other point that has been referred to already. Often, it is all too easy to find a friendly doctor to say, “This person is not in a fit state to give evidence in such a forum.” Let us be brutally honest. If someone searches for long enough, they will find a doctor who will do that. If what I shall call the Pinochet defence is used in these cases, I hope that the IPCC will not accept it at face value and that, if somebody claims to be unable to give evidence on the grounds of ill health, further inquiries will be made to test the validity of the claim.
Finally, it was remiss of me not to welcome the Bill and the work that the Home Secretary, the Minister and my right hon. and hon. Friends have done to bring us to this pass. With the reservations I have outlined, I am happy to give my strong support to the Bill.
Bill Esterson (Sefton Central) (Lab)
My right hon. Friend the Member for Knowsley (Mr Howarth) mentioned the experience of some of his constituents at the inquests. That is something that has been said to me as well. Family members have told me they felt that they were the criminals, so bad was the atmosphere and the way they were treated by those carrying out the inquest and some of those giving evidence, including police officers, some of whom might be among those who need to be dealt with by the Bill. I welcome the provisions and the attempt to do just that.
The independent panel report, among other things, found evidence of extensive alteration of police records and attempts to impugn the reputations of the deceased. In its response to the report, the IPCC noted that it could not investigate all aspects of the police’s conduct, because when the IPCC took over from the Police Complaints Authority, a transitional provisions order set out that certain old cases could not be investigated under the new framework. The Minister has adequately covered that point.
The Bill will provide two key new powers. The first will require a serving police officer to attend an interview as a witness. This new power will be increased by regulations. The second new power will be to set aside the relevant articles of the transitional provisions order in exceptional circumstances, so that the IPCC can investigate certain old cases, where the PCA had already been involved. I will speak briefly to both points.
In its response to the panel’s report, the IPCC set out the potential misconduct that had been disclosed. The potential criminal and misconduct issues fall into two broad categories: allegations—which go to the heart of what happened at Hillsborough on 15 April 1989—that individuals or institutions may be culpable for the deaths; and allegations about what happened after the disaster, including allegations that evidence was fabricated and misinformation spread in an attempt to avoid blame. The IPCC decision document set out a large number of matters that it proposed to investigate, but noted that it was legally prevented from looking at some matters that had previously been investigated. That is why we are here today.
I will give one example of what is set out in the report: the early lie, by Chief Superintendent Duckenfield, about the gates being forced open, which was corrected by the chief constable that evening. This was investigated by West Midlands police under the supervision of the Police Complaints Authority. As such, although the IPCC deplores such dishonesty, it is legally prevented from investigating the issue further; it will therefore not be investigated. There are many examples of police actions that the PCA had already investigated. That is why this Bill is so important and why it is so important that the IPCC should be given the powers to investigate what happened at Hillsborough.
It is right that action can be taken against retired officers. A number of right hon. and hon. Members have expressed their concerns about exactly how retired officers will be dealt with. The Policing Minister has acknowledged that point, but not yet to the satisfaction of all of us in the Chamber. We all understand the difficulties, which is why they are not addressed by the Bill at this point. However, I repeat that there are dangers, and my right hon. Friend the Member for Knowsley gave the Pinochet example as one potential difficulty.
There were serious failings on the day and an immediate and longer-term cover-up by police officers, yet no one has been convicted for their role in either the deaths of the 96 or the systematic cover-up and the vilification of the dead, their families and the injured. It is to be hoped that the process this Bill is part of will enable that injustice to be rectified. Officers were pressurised to change their statements. This Bill, along with the interest that Members in this House have demonstrated over the last few years, will not only show the strength of our feeling, but reflect the strength of public opinion, which is also represented by the number of people who have signed the latest petition and previous ones. It is now right that officers and former officers come forward to give evidence and tell their story—it certainly should have happened before—knowing that they have public support and that they are not driven by some misguided view that they should protect colleagues or former colleagues, as my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) said. Officers certainly should be coming forward to tell their story. This Bill will ensure that serving officers do that, but it will hopefully encourage former officers to do so as well.
The Minister rightly spoke of the “industrial scale” of the alteration of statements. That is an apt description. He was right, and my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) was right to say that nothing must stand in the way of the application for a new inquest, given that Anne Williams is so seriously ill. Indeed, she spends much of her time in a hospice. Justice for Anne and the other families is the absolute priority. They have campaigned hard for recognition of what happened; they have campaigned for far too long. That has been acknowledged in the independent panel’s report. From what the Attorney-General has said, the application for new inquests is imminent—I am sure that is the case. This Bill provides an opportunity for one of the big injustices—the action of those police officers who broke the law—to be addressed. The Bill should be allowed to proceed as quickly as possible.
Damian Green
With the leave of the House, I should like to respond to the debate. I am grateful to all those who have contributed and helped us to make progress towards ensuring that justice will follow truth. It is important for the House to consider all the issues and questions that the introduction of this Bill has raised. Members of this House have shown great commitment in driving us closer to getting the IPCC investigation under way. The point has been well made by the shadow Policing Minister, the right hon. Member for Delyn (Mr Hanson), and others that people do not want more talk. They simply want to see the changes that will unlock justice.
We have twin responsibilities in this House: we have to ensure that progress is made after such a long wait for the truth, but we also have a parliamentary responsibility to ensure that the Bill that passes through the House is appropriate and fit for purpose. I think that today we will meet both those responsibilities. I am grateful for the support from hon. Members on both sides in getting through all the business in a short time. The Bill will enable the IPCC to conduct a comprehensive, painstaking and, above all, transparent investigation. Transparency has perhaps not been mentioned enough, but it is important that what the IPCC uncovers should be transparent.
Let me address the individual points that have been made today. I shall start with those of the right hon. Member for Delyn. He asked about consultation with the families. My right hon. Friend the Home Secretary met representatives of the Hillsborough family groups on 18 October and, as the right hon. Gentleman would expect, Home Office officials continue to be in regular contact with the groups and will write to them again following today’s debate. The Home Secretary has also asked the Bishop of Liverpool to continue to act as the Government’s adviser on Hillsborough. His close relationship with the families will obviously be very beneficial.
Several hon. Members, including the hon. Member for Liverpool, Walton (Steve Rotheram), asked about a single lead investigator, as did the shadow Minister. There are legal and constitutional constraints that would prevent the appointment of a single investigator to investigate Hillsborough. Each of the bodies involved, and the processes relating to them, are independent under laws passed by this House. However, I am conscious of the need for the various investigatory bodies, independent though they might be, to work closely together. The IPCC and the Director of Public Prosecutions are working closely together, and with others who have responsibility for investigating those who cannot be the subject of IPCC investigations. Discussions are continuing on how to approach any aspects of the investigation that cannot be covered by the IPCC. I was also asked about the time scale. A decision on that will be made very early next year. We are moving ahead with that as fast as possible.
Steve Rotheram
The Minister has mentioned our questions about a lead investigator. According to paragraph 9 on page 3 of the Home Affairs Select Committee report that was published today, the Committee is recommending
“that a single, lead investigator should be identified”.
How much consideration will he give to that report?
Damian Green
As I have said, I can see where the demand is coming from, and I have read the Home Affairs Select Committee report. There are, however, very good reasons for what I have said about this, which I am sure hon. Members will understand. Given the constitutional independence of the Director of Public Prosecutions and the IPCC, there could not be any attempt to direct them, especially the DPP. It would be improper in all senses for a chief investigator, let alone a Home Office Minister, to direct him and tell him what to do. It would certainly be constitutionally improper as well, so there are genuine difficulties involved in going down that route. I assume that the underlying drive behind the request for such an investigator is the need to ensure that people do not go off in different directions or fail to talk to each other, thereby causing unnecessary delay through a lack of coherence among the various strands that hon. Members have talked about. Everyone involved is aware of that; I know they are doing their best to make sure that they proceed as much as possible in parallel.
The right hon. Member for Delyn asked me about engagement with the Police Superintendents Association and the Police Federation. As I said in response to an earlier intervention, I have already had an exchange of correspondence with both bodies; indeed, my officials spoke to them before the Bill was published. I believe the right hon. Gentleman said at one stage that we should have consulted formally, but that would have taken 10 or 12 weeks, so it would clearly have been impossible. Inevitably, there has not been a lot of time between getting the Bill right and publishing it. Of necessity, then, the consultation with the bodies was done relatively shortly before we proceeded. I sensed the House’s pressure to get on with this, and that is what we are doing.
Damian Green
I already have in my diary a meeting with the Police Federation next week, and I would be happy to meet the Police Superintendents Association at any time.
There has been a lot of discussion about retired officers—not least by the shadow policing Minister, but also by my hon. Friend the Member for Cambridge (Dr Huppert), the hon. Members for Liverpool, Riverside (Mrs Ellman) and for Penistone and Stocksbridge (Angela Smith), the right hon. Member for Knowsley (Mr Howarth) and the hon. Member for Sefton Central (Bill Esterson). As I have said, former officers are civilians—not police officers—and they are no longer bound by the duties and regulations that governed their lives as serving officers. The police themselves do not have powers to compel witnesses to attend interviews, so I can only repeat that to grant this power to the IPCC would be unusual in the extreme. However, given the seriousness of the allegations being considered by the IPCC in the Hillsborough case, I repeat that the IPCC has made it clear that it will fully conclude investigations for both criminality and misconduct even when officers have left the service.
This is an unusual step. The IPCC does not normally investigate retired officers for misconduct, but it is clear in this case that there is an enormous and legitimate public demand, reflected by Members of all parties, for that to happen. That is what the IPCC was going to do. During its investigation, the IPPC will no doubt call retired officers to provide evidence. As we all agree, the retired officers will understand the importance of this investigation, and I am sure that the vast majority, if not all of them, will attend willingly.
Finally, the IPCC has been clear that it needs these powers only in respect of serving officers. That is what the Bill provides for. I understand the calls to grant a power to compel retired officers to give evidence, but because it is so unusual and because it would be such a powerful tool, I think it would be inappropriate to do this through fast-track legislation. That should be considered when it comes to the possibility of future legislation.
Mr George Howarth
I understand the Minister’s point that making a change such as this in fast-track legislation might not be appropriate, but can he give a commitment that, should it become apparent later that there is a reluctance on the part of retired officers to come forward, some further action could be taken by this House to bring in an element of compulsion?
Damian Green
What I will say is that we are debating this Bill here today because the IPPC came to the Government and said, “We need extra powers.” We have responded as quickly as possible so as not to delay the move from truth to justice. We are always willing to accept representations from the IPCC and to consider what is the most practical way of allowing it to do its job as efficiently as possible.
The right hon. Member for Delyn asked me about a related subject, namely the retirement of officers during an investigation. The IPCC can continue an investigation into either criminal or misconduct matters even when an officer has chosen to retire in the middle of it. I hope that the right hon. Gentleman is reassured by that. He also asked about private contractors. Contractors working as detention and escort officers already fall under the IPCC’s oversight, and are therefore covered by the Bill. We are considering the need to extend the provision to other kinds of contractor. That is not relevant to events that took place in 1989, because there were no private contractors then, but we will consider the issue in the longer term, along with the IPCC.
I was asked when the IPCC investigation would conclude. I think that everyone recognises that it is a huge, complex, far-reaching investigation, and that it will take time for it to conclude thoroughly. The last thing we want is an investigation that is not carried out thoroughly. The IPCC will set out the scope and projected timings in the new year. As well as meeting my officials, it has been meeting the families and their representatives, and will continue to do so in order to ensure that they are in the loop at all times.
My hon. Friend the Member for City of Chester (Stephen Mosley) and the hon. Member for Liverpool, Riverside (Mrs Ellman) asked about sanctions. As we are about to debate that subject, I shall not intrude on your patience, Mr Deputy Speaker, but I will say that we have not expressly provided for a sanction for failing to comply with a witness attendance requirement because effective sanctions are already available under the Police (Conduct) Regulations 2012. I shall doubtless say more about that shortly, when we discuss amendment 1.
Let me again thank the Opposition, and Members in all parts of the House, who have spoken today and expressed their support for the Bill. I hope that the constructive manner and tone that have characterised the debate will serve as a reassurance, not least to the families of the victims, that the House is working well to try to help them as much as possible. I look forward to the Bill’s remaining stages.
Question put and agreed to.
Bill accordingly read a Second time.
POLICE (COMPLAINTS AND CONDUCT) BILL (Money)
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Police (Complaints And Conduct) Bill
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Stephen Mosley (City of Chester) (Con)
I beg to move amendment 1, page 2, line 4, at end insert—
‘(e) for sanctions to be imposed on serving officers who fail to comply with the interview process.’.
One of the advantages of a Committee stage that directly follows Second Reading is that every Member in the Chamber has heard the preamble. Everyone is aware of the issues, and everyone has heard the Minister’s initial response. That means that my speech can be much briefer than it would otherwise have been: I hope to be able to complete it in two or three minutes.
We have all heard the arguments, and we have all heard the discussions. We have heard the discussion about whether former police officers should be forced to attend hearings, and the discussion about whether officers who attend hearings but refuse to give evidence should be included in the scope of the Bill. I want to concentrate on an issue on which I think we can have an impact: whether sanctions should apply if a police officer refuses to engage in the investigation process. That was mentioned to us by the IPCC itself, and we ought to give further consideration to whether it should be included in the Bill.
One question is whether the Bill should include a requirement on Ministers to draw up sanctions. To that end, I and other members of the all-party group on the Hillsborough disaster have proposed a probing amendment, to encourage the Minister to explain why such a provision is not included in the Bill. I hope my right hon. Friend the Minister will appreciate that it is not designed to obstruct what is an important and necessary emergency Bill, and that he will take the amendment in the spirit in which it is intended, which is to raise a serious question that requires a serious answer.
The Bill compels serving officers to attend interviews in the course of an IPCC investigation, but it does not give an indication of what sanctions can be imposed on a serving officer who fails, or refuses, to attend an interview. As the Bill stands, sanctions for non-compliance will be dealt with by the relevant authority tasked with dealing with the misconduct of the officer in question. However, whether the non-attendance of the officer is to be determined as misconduct is also left to the discretion of the relevant authority.
I agree with the IPCC that a refusal to attend an interview should be immediately categorised as misconduct, and that appropriate disciplinary action should be instantly triggered. The IPCC says in its briefing document:
“The Commission is firmly of the view that if this power is to be effective, a failure to comply with a direction to attend should amount to misconduct. The Bill does not provide for such a sanction and we have expressed some concern about this, as we anticipate that some chief officers would welcome this unambiguous approach. The Commission hopes that Parliament will make clear that it is its express wish that police personnel should co-operate with IPCC investigations.”
By adding the amendment to the Bill we will instantly deal with all of the IPCC’s concerns in this area. Parliament will be giving a clear indication that police personnel should co-operate with IPCC investigations. Parliament will also be offering a clear, unambiguous approach to chief officers across the country as to the disciplinary action that we expect to be taken if a witness fails to comply with an interview request. The IPCC will have the confidence to deliver on its duty, in the full knowledge that Parliament is prepared to support its difficult work in calling police officers to account through an unambiguous legislative framework.
What I am not seeking to do through this amendment is tell the Minister what form any sanctions should take, although the IPCC has made a firm statement that it believes the failure to comply with a direction to attend should amount to misconduct. The amendment merely requires the Minister to make a provision for sanctions to be imposed on a serving officer who fails to comply with the interview process. It is a simple provision that failure to comply would be a breach of the prescribed standards of behaviour as defined by the Police (Conduct) Regulations 2012 and would result in misconduct proceedings. That would satisfy all the issues raised and would be clear and unambiguous to all involved. I therefore encourage my right hon. Friend the Minister to consider agreeing to this amendment.
I began by saying that it was a probing amendment to explore the issues involved in imposing sanctions on serving officers who fail to comply with a direction to attend, but I hope the Minister will send out a clear, unambiguous message about the sanctions that he expects to be imposed on those who fail to comply. I am sure that if he does so, he will get the clear and unambiguous support of all Members of this House.
Alison McGovern (Wirral South) (Lab)
I want to raise a couple of issues. I wholeheartedly agree with the hon. Member for City of Chester (Stephen Mosley) that our Second Reading debate served to provide an eloquent account of the context and importance of the Bill, so I shall not repeat any of those themes, but let me repeat, as I never tire of doing, my personal tribute to the families of the 96. As I said before, they should think of this as their Bill.
Our amendment was designed to be a probing amendment, and again I thank the Minister for his response to my letter yesterday. With your agreement, Mr Evans, I shall just ask a few further questions and I hope the Minister will help the Committee by answering them. He said that effective sanctions are available to deal with those officers who do not wish to attend. The question we seek to ask through this amendment is this: to whom are those sanctions available? From what he has said, I take it that they are available to the officer’s force, but we are trying to push for them to be available to the IPCC. What we are doing here is giving the IPCC sufficient powers to make the necessary investigations, so my question to the Minister is this: how will the Government ensure that the IPCC has effective sanctions to deal with those who do not wish to attend?
Arising from that is my second question: is deferral to the police force in question enough? Does the Minister have any evidence to suggest that that is a sufficient way of approaching this issue? I was helped in my thinking about this amendment, which we tabled in recent days, and here I must thank Sally Lipscombe of the House of Commons Library. She quickly looked up for me the regulations that apply, and it appears to me that there are some questions on which an answer from the Minister would be helpful, not the least of which is the point that I have just made about what evidence there is that such a sanction is enough to compel officers to attend.
Thirdly, what happens once a sanction is applied? How does the interview and the evidence-gathering process then proceed? As my right hon. Friend the Member for Knowsley (Mr Howarth) mentioned, we are concerned here with not only those honourable members of police forces who will be happy and keen to co-operate with the IPCC, but those officers whose evidence is vital but who do not wish to co-operate, for whatever reason—they must understand that for themselves in their own heart. If the force in question does choose to use the sanctions, does the IPCC then have sufficient powers available to ensure that the evidence-gathering interview proceeds properly and informs the investigation?
In essence, I wish to probe the answer to the three questions. How will the Government ensure that the IPCC, de facto as much as de jure, has effective sanction to make sure that people attend and give evidence? Is deferral to the force enough? Do we have any evidence that that is enough? If a sanction is applied, what then happens? How does the IPCC make sure that it has sufficient power for evidence-gathering to proceed?
I will not trouble the Committee any further on the issue of retired officers, except to repeat my earlier words of hope and anticipation that, notwithstanding the fact that many retired officers would want to give evidence freely and happily, all retired officers who may add to this investigation and bring about justice in a speedy fashion will find it in themselves to do so.
In conclusion, I just wish to say that although “Justice delayed is justice denied” is a hackneyed old phrase, it could have been written for this debate. So I anticipate speed, as the Minister has suggested, and I thank all Members of this House, not least those on both Front Benches, for their efforts to date.
Mr David Hanson (Delyn) (Lab)
I want to press the Minister on a couple of points relating to the amendment tabled by the hon. Member for City of Chester (Stephen Mosley), which reflects concerns we have put privately to the Minister outside the Chamber about the powers in the Bill. We had concerns about the sanctions available in the event of officers not participating in discussions with the IPCC when requested according to the provisions in the Bill. The Minister has given me some helpful reassurances—I am sure he will do so again today—on the potential sanctions available to police forces under the current legislation. He recently produced the Police (Complaints and Misconduct) Regulations 2012, which relate to the Bill.
I have two questions for the Minister. Can he point out the elements of the draft statutory instrument on the police in England and Wales that he published yesterday that highlight that the sanctions are available to forces? He has outlined that to me privately and I have no doubt that he will do so again today. My cursory reading of the regulations—I accept that it is cursory—shows no mention of sanctions. I accept that provisions are elsewhere in primary legislation, but it would have been helpful to have put in the regulations the sanction we have discussed that is available to police forces.
I want to test the Minister on where the buck will stop ultimately when it comes to exercising the sanctions under other legislation that he has mentioned in our discussions outside the Chamber. We now have police and crime commissioners and chief constables. Where will the buck finally stop on these issues, which are essentially personnel matters? If an officer did not participate in a discussion on a non-criminal matter at the request of the IPCC and the sanctions that the Minister has outlined to me privately and will no doubt outline to the Committee are available, will they be the sole responsibility of the chief constable or could they be overridden by a police and crime commissioner who took a different view? Are these matters operational or strategic?
Stephen Mosley
Surely one of the advantages of police and crime commissioners is that we will have someone who is democratically accountable to the people. If a police and crime commissioner tried to override the decision, I am sure that they would feel the full wrath of public opinion.
Mr Hanson
I am grateful to the hon. Gentleman for his intervention, but I think he has missed my point, which is about where the buck stops. This is about the employment terms and conditions of individuals who work in the police service, and if the sanction for not participating in action with the IPCC was dismissal of a police officer, removal of pension or something else under the disciplinary proceedings the Minister has mentioned to me privately, would the chief constable exercise that or could the police and crime commissioner? Would the police and crime commissioner stand aside from the decision or would the chief constable take it alone? I am not trying to complicate matters; I simply want clarity, and this is the time for clarity on the Bill.
If a police and crime commissioner took a different view from the chief constable, where would the buck stop? Is the matter operational? Is it protected, or is it not? That is an important point in achieving clarity, because the Bill is not only about the important matters we are debating on Hillsborough but will be in place for future IPCC investigations until it is amended or repealed. Such investigations might be serious, like Hillsborough, or they might be relatively trivial. I want clarity from the Minister about where the responsibility will lie.
Steve Rotheram (Liverpool, Walton) (Lab)
Does my right hon. Friend agree that one of the ways around the point that he raises would be for the Minister to write to individual forces to provide guidance on what he believes would be an appropriate process for forces to follow, should officers refuse to take part in interviews?
Mr Hanson
I am grateful to my hon. Friend for that suggestion. The Bill is about giving powers to the IPCC to compel officers to give evidence. If officers do not give evidence because they choose not to do so—in discussions with us, the Police Federation gave examples of circumstances where officers may not wish to do so—the IPCC will not be able to take forward the investigations as it wishes in relation to Hillsborough, which is my hon. Friend’s main concern at present. However, the legislation is in place for all time, until it is repealed.
If there are no sanctions, an officer could retreat into their shell. The sanctions that the Minister outlined to me privately are available to the force, but who takes the decision on such sanctions? Would it be appropriate for a police and crime commissioner to learn about the case from constituents or through representations from the MP and to take decisions? Or is it solely a chief constable matter? I pose those questions for debate.
I share the wish for a strong examination of the point made by the hon. Member for City of Chester, supported by my right hon. and hon. Friends who signed the amendment, because the question of what happens when an officer says no is critical to the effectiveness of the Bill. The Minister needs to give a strong assurance that that issue will not cause difficulties with the Hillsborough investigation or for future investigations into matters of concern yet to arise, involving a particular force in a particular area.
The Minister for Policing and Criminal Justice (Damian Green)
The amendment seeks to make express provision, on the face of the Bill, for sanctions in relation to a failure to attend an interview. I am grateful to my hon. Friend the Member for City of Chester (Stephen Mosley) and other members of the all-party group for tabling it. As the shadow Police Minister has just said, it airs an important issue. I am happy to assure my hon. Friend and the Committee that such a provision is not needed because the Secretary of State already has the power under the Police Act 1996 to make regulations about misconduct. The effect of the amendment, were it put into law, would be to duplicate a regulation-making power that already exists in the 1996 Act.
I absolutely support the need for an effective sanction for non-attendance. Various suggestions have been made about how we should convey this to those who will have to operate the sanction. I am fairly sure that this discussion will be important in conveying the will of Parliament to those who do that. I must resist the temptation of the suggestion from the hon. Member for Liverpool, Walton (Steve Rotheram) that I should write to chief constables telling them in detail what they should do. That would be the classic interference in operational matters that we seek to avoid, for obvious reasons.
I am satisfied that, in relation to serving officers, an effective sanction for failing to comply with the witness attendance requirement in clause 1 already exists. The Police (Conduct) Regulations 2012 include a provision to the effect that misconduct means a breach of prescribed standards of behaviour. A failure to attend an interview, where required to do so, would be a breach of one or more of the prescribed standards, with the result that the officer should become the subject of misconduct proceedings. Those would be serious misconduct proceedings and could result in the officer’s dismissal.
Bill Esterson (Sefton Central) (Lab)
I am glad that the Minister has explained the procedures. If he will not write to chief constables to tell them what the disciplinary action should be, I take it that they will be made aware of exactly what is intended and what he has just said.
Damian Green
Absolutely. As I have said, I think that chief constables will be following this debate with some interest.
To answer one of the points raised by the right hon. Member for Delyn (Mr Hanson), the draft regulations for the Bill do not include that sanction, because we are clear that it can be imposed under the Police (Conduct) Regulations 2012. Of course, we are in continuing talks with the IPCC about the regulations. To answer his other point, it is right that responsibility for matters relating to discipline and the misconduct of serving officers rests with chief officers. They are the people who should deal with that.
Damian Green
The police and crime commissioner is there to hold the chief officer to account. If they believe that the chief officer is behaving wrongly, they will have a discussion about it, and because the commissioner is elected, as my hon. Friend the Member for City of Chester rightly said, any sensible chief officer would inevitably wish to avoid a public dispute. The point is that the chief officer takes the operational decisions and the police and crime commissioner holds them to account for their effect. His basic question was who was responsible for enforcing the discipline and misconduct regulations, and the answer is the chief officer.
Bill Esterson
I do not want to stray too far into the role of police and crime commissioners, but if a police and crime commissioner has a conversation with a chief constable because they are unhappy about that, or anything else for that matter, what power will the commissioner have to enforce that provision?
Damian Green
Police and crime commissioners have very significant powers in relation to chief constables. Their ultimate power is to dismiss the chief constable if they believe that they are behaving so badly that that ultimate sanction is necessary, so the legislation provides considerable powers.
My main point is that the effect of this change will simply be to replicate powers that are already provided for in statute, but it is also important to note that clause 1 places a witness attendance requirement on different categories of individuals. It applies not only to serving police officers, who are members of police forces and subject to the conduct regulations, but to police staff, who operate under a different conduct regime and are outside the scope of the conduct regulations. As such, it would be neither appropriate nor effective for the Secretary of State to make regulations for a universal sanction applying to those two very different categories of individual.
In clause 1, we have been careful to mirror, as far as possible, the existing provisions in the Police Reform Act 2002 relating to the interview attendance requirement for those who are subject to investigation by the IPCC. As such, the two powers should be similar. The existing provisions in the 2002 Act relating to those under investigation do not include any provision for sanctions. To provide expressly for a sanction in primary legislation in relation to witnesses but not to those who are subject to investigation by the IPCC would be anomalous. Such a provision would suggest that the new power relating to witnesses is somehow of greater importance and should be more robust than the existing power relating to suspects, and that position risks falling into confusion, as the right hon. Member for Delyn rightly warned, when we want clarity. That, I am afraid, would be the effect of the amendment; there would be more confusion than clarity. In any case, the Secretary of State has the power to do that.
Let me address the issues raised by the hon. Member for Wirral South (Alison McGovern). If a serving officer refuses to attend an IPCC interview, they should be subject to sanctions, which are serious and could result in dismissal. If the officer continues to refuse to attend, they can still be investigated by the IPCC and, where appropriate, charges can still be brought regardless of whether they attended an interview or refused to do so. Therefore, failure to attend the interview is not a way of avoiding the decisions of the IPCC. Such a failure would be a breach of prescribed standards of behaviour, and the officer would rightly become the subject of misconduct proceedings.
The final, overarching point in reply to the hon. Lady’s questions is that the IPCC is an investigatory body. It has not asked for the power to impose sanctions, nor is it particularly well-equipped to exercise that power; it is there to investigate. Having said that, I recognise that we are all anxious to ensure that there is clarity on the availability of an effective sanction.
Mr George Howarth (Knowsley) (Lab)
I do not have the information in front of me, but my impression is that the IPCC did ask for sanctions.
Damian Green
I have spoken to the IPPC, and it clearly stated that it did not want sanctions to be included in the Bill for some of the reasons that I have given. While I am certain that there is no need to amend the Bill, I am happy to give the Committee the assurance that I will continue to discuss the matter with the IPCC to see whether it needs any longer-term changes. In making any changes to regulations, we need to take a consistent approach in terms of sanctions on those who fail to attend as a witness or as a suspect.
Alison McGovern
So that we can absolutely clear, and as the Minister is, I am sure, in constant conversation with the IPCC, will he write to me, as chair of the all-party group on the Hillsborough disaster, to confirm that point?
Damian Green
I will be happy to write to the hon. Lady, as indeed I have written to the IPPC. I will send her a copy of that letter so that everyone knows that the position is absolutely clear and that we are all saying the same things in all forums.
If my hon. Friend the Member for City of Chester will agree to withdraw his amendment, I assure him and the Committee that we will continue to examine this question further to ensure that the effectiveness of the procedure is maintained as much as possible.
Stephen Mosley
I thank you, Ms Primarolo, and the previous Chairman for allowing the amendment to be debated. It is about an important issue and it was important that Members across the Committee had an opportunity to discuss it. I thank the Members who supported the amendment, which was, as I said, a probing amendment to allow the Minister to clarify the situation. I think that he has done that, and I look forward to reading his response to the chairman of the all-party group. Having heard his response, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 ordered to stand part of the Bill.
Clauses 2 and 3 ordered to stand part of the Bill.
The Deputy Speaker resumed the Chair.
Bill reported, without amendment.
Third Reading
Damian Green
I beg to move, That the Bill be now read the Third time.
Members will be relieved to know that I do not intend to detain them for long, because they have heard what I need to say. More importantly, there is broad agreement about the Bill’s urgency and importance. I hope that I have answered the questions raised during this good and detailed discussion. There will, of course, be a further opportunity to consider any issues when the other place debates the Bill next Tuesday. We have considered some important matters today, such as those relating to retired officers and the sanctions available should a serving officer fail to comply, and I hope that Members of all parties who are concerned about those issues are now content.
This short Bill raises important questions, because the underlying issues are extremely important. The Government are grateful for the support of the official Opposition and hon. and right hon. Members of all parties for the Bill, which will allow the Independent Police Complaints Commission to get on with its investigations and finally achieve justice for the 96 victims of the disaster, the many injured and all the families and friends affected by the tragedy.
Mr Hanson
I appreciate the Minister’s efforts to take account of a range of views with regard to this important Bill. I hope that, prior to the debate that will be held soon in another place, he will reflect on the comments made on Second Reading and in Committee and on those that might be made on Third Reading. Obviously, we will watch what happens in another place, but I wish the Bill a speedy passage, because ultimately it is one part of a number of measures to give justice to the 96 Hillsborough victims and their families. It is long overdue and I hope that the IPCC’s investigation will be as swift as possible and thorough. I look forward to the Bill giving it the ability to call officers to account for their actions on that dark day in April 1989.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Petitions
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Ms Margaret Ritchie (South Down) (SDLP)
I wish to present a petition of 2,079 signatures on behalf of the members of Families Against Suicide Today. I should like to note that Burren is near Warrenpoint in County Down in the constituency of South Down.
The petition states:
The Petition of Members of FAST (Families Against Suicide Today),
Declares that FAST was brought together by Patti Boyle whose son Kevin left home at 12.30pm on 12 October 2011 after telling her he was going to work and that 101 days later his remains were found in a local area known as ‘Happy Valley’; further that Kevin had purchased an online suicide kit to complete his death from a website which described death as ‘Deliverance’; further that the Petitioners marched on 30 August 2012 from Kevin’s grave in Burren, Co. Down to Westminster to highlight Article 2 of the Human Rights Act 1998 the ‘Right to Life’.
The Petitioners therefore request that the House of Commons urges the Government to close down websites assisting suicide and to prosecute those who commit the crime of aiding and abetting suicide.
And the Petitioners remain, etc.
[P001142]
Mr Stewart Jackson (Peterborough) (Con)
This petition is from in excess of 4,000 Muslims in the City of Peterborough.
The petition states:
The Petition of Muslims of the City of Peterborough,
Declares that the Petitioners feel hurt and shocked by the film ‘Innocence of Muslims’; further that the Petitioners believe that it represents a defamation of Islamic sacred values and is an insult to the Prophet Muhammad and that the Petitioners believe that this defamation of the Prophet Muhammad, or indeed any other Prophet, is unacceptable; further that the Petitioners do not accept the claim that insults to religious institutions, their prophets or their values fall within the scope of freedom of speech and that whilst the Petitioners support freedom of speech they wish to remind people that it carries with it the role of responsibility and care not to hurt and humiliate the feelings of other people; further that the Petitioners believe this kind of film, along with derogatory sketches and cartoons about the Prophet Muhammad is blasphemous and tortuous to Muslims all over the world; further that the Petitioners wish to dissociate themselves from the small minority of people who misbehaved during the protest marches throughout the world against this film and that the Petitioners believe that those actions were against the teachings of our beloved prophet.
The Petitioners therefore request that the House of Commons urge the Government to ban the film ‘Innocence of Muslims’ from being shown, consider new legislation to make it a criminal offence to create films or cartoons of a blasphemous nature and support moves to recognise the responsibility attached to freedom of speech and ensure such derogatory material is not encouraged.
And the Petitioners remain, etc.
[P001144]
Clevedon Community Hospital
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Dr Liam Fox (North Somerset) (Con)
I am pleased to have the opportunity in this short debate to raise some of the issues related to Clevedon community hospital.
There has been a cottage hospital in Clevedon since 1874. The hospital has a fine tradition of providing care for more than 100,000 people living in Clevedon and the surrounding area. The current cottage hospital has 18 in-patient beds, along with limited X-ray, physiotherapy, musculoskeletal and minor injuries facilities. It also hosts a range of out-patient clinics. It is an invaluable service for the local community, especially for the many pensioners who live in my constituency, for whom travelling to Bristol or Weston-super-Mare could take more than an hour on the bus—when the buses come, that is.
The original Victorian building has been tweaked over the years, but it is bursting at the seams and there is open concern among locals and NHS professionals that the building would not confidently pass a Care Quality Commission inspection. Those concerns are not new, so plans have been developed over the past four years for the building of a new community hospital in Clevedon.
I pay tribute to the League of Friends of Clevedon cottage hospital for its unstinting efforts in support of the existing hospital over the past 50 years. Since 2005, it has spent £500,000 on building improvements and endoscopy, ultrasound and other facilities. For the past four years, it has supported the plans for a new hospital and has raised another £200,000 towards further improving health care provision in Clevedon. It is a shining example of the volunteer groups that make such a difference in our local communities, and we should applaud its extraordinary efforts.
Over the past four years, four business cases have been submitted for the building of a new community hospital. The third business case was submitted in 2011 and was given to the consultancy firm PricewaterhouseCoopers for external scrutiny. It confirmed that the plans were affordable within the existing budget and made a number of suggestions to improve a subsequent business case. Those were incorporated in the fourth and final business plan.
During the development of the plans, a preferred bidder for building the hospital was engaged under a private finance initiative arrangement. The plans developed by Amber Solutions for Care were also changed as a result of the consultancy process to bring the PFI annual rental charge down to £858,000 and, therefore, within the amount affordable to North Somerset primary care trust. So by March 2012, building plans had been tailored to be within affordability levels, and an independent consultancy firm had improved and endorsed the business case.
In March, the business case was considered by the cluster board of the Bristol, North Somerset and South Gloucestershire primary care trusts and was recommended to the South of England strategic health authority for its endorsement at a meeting in May. North Somerset PCT issued a press release on 28 March, confirming that plans for the new community hospital were “on track”, and that
“the business case was revised to take into account changes in the NHS locally and to ensure the long term viability of the Hospital. This work has now been completed and has been endorsed by the Cluster Board.”
It ended by saying that
“the projected opening of the new Community Hospital will be in early 2014.”
After years of development, campaigning and fundraising, the many stakeholders and supporters in my constituency were delighted by the news.
However, on 19 July, North Somerset PCT issued a new statement, saying that the business case had been reviewed and that the hospital was
“unaffordable given the economic circumstances”.
It is hard to see what new information came to light between March and July, so it is natural to conclude that either someone in North Somerset PCT got their numbers very wrong at the beginning, or that the U-turn was not actually based on affordability, but on priorities.
I ask the Minister to confirm exactly what new information came to light between March and July. It is scandalous that perfectly reasonable questions from the community and its Member of Parliament were almost completely ignored, and left unanswered. We were all understandably disappointed at such a quick—and seemingly unexplained—reversal.
Research has shown that the North Somerset PCT underspent in 2010-11 and 2011-12 by £1.6 million and £1.06 million respectively. Transfers of £1.8 million were also made from North Somerset PCT to South Gloucestershire PCT last year, and plans exist to make a similar transfer this year.
North Somerset PCT, in its operational plan for 2011-12, notes that, for that year, it was the lowest funded PCT nationally. Being the lowest funded PCT in the country and still underspending seems mightily unfair to my constituents when they perceive that money is being transferred to other, better funded but less frugal PCTs, seemingly to the detriment of capital projects in North Somerset.
The PCT has also expressed concern that financial shortfalls at the general hospital in Weston-super-Mare have forced a changing of priorities, which, again, is to the detriment of capital projects elsewhere in North Somerset. It appears that they are losing out, not on grounds of affordability but because priorities lie elsewhere. If others cannot function competently, that should be their problem, not ours.
Then there is the wasted money. The process of developing the plans, securing planning permission and fees for external consultants, and administering the tendering process has cost around £1.5 million. The same again has been spent on procuring the Millcross site in Clevedon for building the new hospital. The preferred bidder may also be in the process of trying to recover some of the costs it incurred while redesigning the hospital at the PCT’s behest. More than £3 million of taxpayers’ money and more than four years of administrative effort may have been wasted on a hospital that never gets built.
The people of Clevedon and North Somerset want a new hospital, and that is my main aim in the debate. Local reports are that endoscopy examinations have already been transferred out and the gynaecology unit is being transferred to Portishead, and rumour has it that the minor injuries unit is being transferred to the physiotherapy department, raising the question of the future location of the physiotherapists. I also understand that visits by consultants from Bristol are to be scaled back.
I also want to secure the Minister’s assurance that there are no plans for reducing the services currently provided at Clevedon cottage hospital, and that the move of endoscopy and gynaecology services are only temporary measures.
The handover from the North Somerset PCT to the North Somerset clinical commissioning group could be both an opportunity and a threat. I know the CCG has been involved in the decisions taken thus far, but it is important to know whether it has the same view on the need for a cottage or community hospital in Clevedon.
Let me be clear that my constituents are wedded not to any particular piece of ground but simply to the maintenance of community facilities. That is why we need reassurance from the Minister. We have watched plans for the proposed Portishead community hospital disappear, and we watched Orchard View, with its exceptional care facilities, disappear. We will not tolerate community facilities in Clevedon disappearing too. If the Millcross site cannot be built on and is subsequently sold, we must have assurances that the moneys raised from the sale will come back into our health authority, so that they can be reinvested in the Clevedon cottage hospital on its current site.
It is clear that there has been a managerial shambles, so the management should pay the price, not the people of Clevedon and the surrounding area. Responsibility, accountability and transparency are all we seek. Surely that is not too much to ask. This has been a long, costly and frustrating process that has damaged my constituents’ trust in their local PCT. Millions of pounds have been wasted. It is still unclear what changed between March and July. The old cottage hospital is in an ageing building that has previously been deemed not fit for purpose.
If the cottage hospital is to remain in service, it must be invested in so that its future is secure. At the very least, the proceeds from the disposal of Millcross must be reinvested in the current site. I seek an assurance that, if no new hospital is to be built, there will be no reduction in the services offered by Clevedon cottage hospital, and that endoscopy and gynaecology will be returned soon.
We need to know whether there is really no way that a new hospital can be built. The plans are made; the affordability study has been completed; a contractor is secured; planning permission has been received; and public support is firmly in favour. The League of Friends Of Clevedon Hospital has been outstanding in its support for both the old hospital and the development of a new one. Whatever the outcome of this administrative tangle, I hope it will not be deterred from maintaining its fantastic efforts.
We stand as one community to ensure that in the NHS we get fair treatment, a fair hearing and our fair share of the health care that is due to the people of Clevedon.
The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
I congratulate my right hon. Friend the Member for North Somerset (Dr Fox) both on securing the debate and on his strong advocacy for Clevedon community hospital.
Members who represent more rural constituencies know the importance of high-quality community health care facilities, including community and cottage hospitals. They provide important close-to-home care for patients in more rural areas, particularly frail and elderly patients who have long distances to travel to receive health care.
We know the importance of such hospitals in meeting the long-term challenges of the NHS. We need to redesign services and deliver more services closer to home, and prevent inappropriate hospital admissions to big acute hospitals such as those in Bristol or Weston-super-Mare. That means ensuring that we have the right community resources properly to support local people, including those with long-term medical conditions such as asthma, diabetes and dementia. In particular, we need to ensure that we have community-based support for older people—the biggest group with long-term conditions.
We want to move the emphasis of care in this country away from acute crisis management, to which the NHS is accustomed, both to save the NHS money and to provide better care for people in their homes and communities. Community hospitals such as Clevedon are important in delivering such care. They provide invaluable beds for people with long-term conditions to give their carers respite, and important rehabilitation in a setting close to home, family and support networks for people who have broken hips, or who have had strokes or heart attacks. They provide the opportunity for step-up care for people who are not so unwell that they need to be admitted to an acute setting, but who can be better looked after temporarily in an environment that provides the additional care that people need. The Dr Foster report, which was published this week, highlights that 29% of patients did not necessarily need to be in acute hospital beds. If we are to meet the challenge of ensuring that people are better looked after and are not in hospital beds when they do not need to be, it is important that we invest properly in community resources, and Clevedon community hospital is just one of those resources.
I share with my right hon. Friend and the community he represents their frustration with the primary care trust, as I have Hartismere community hospital in my constituency. My predecessor, Lord Framlingham, had considerable struggles with the PCT about the potential closure of an important rural hospital. From what my right hon. Friend says, his constituents and local patients have been having considerable struggles and difficulties with the local PCT in Somerset.
I acknowledge the special role the League of Friends plays in the life of Clevedon community hospital, a point my right hon. Friend made in his speech. It has worked to raise a lot of money for the hospital and to ensure that it is retained as an important community health care resource. It is dismayed and disappointed, as are others in the local community, by the attitude of the PCT. I understand his disappointment, but under the PCT arrangements the provision of local NHS services remains with the local NHS. However, he is concerned that approximately £1.5 million or £1.6 million has been spent on project costs and other costs over a four-to-five-year period, in proposing to develop a new and sustainable community hospital facility in Cleveland. The money has been spent, but there is still no new facility. As physicians, we would rather the money had been spent on a new facility or on community care.
If it is any consolation to my right hon. Friend, I had a conversation with local health care representatives yesterday. They reassured me that even without the new facility at the allocated site, there are no concerns about any loss of services with the transfer from the PCT to the clinical commissioning group that will have responsibility for running community services. I hope it reassures my right hon. Friend to hear that when the new arrangements come into place in April next year services will remain as they are now.
On endoscopy services, as clinicians we know that strict evidence-based clinical standards must be achieved when delivering endoscopy services, which, for patient safety and to maintain high-quality patient care, have to be adhered to. There were concerns that facilities at Clevedon hospital were not able to maintain those high standards. For example, arrangements for the decontamination of endoscopy equipment would have to be substantially improved if the service was to achieve external accreditation by the national joint advisory group for endoscopy, and that would need to be achieved for the service to return to the hospital.
Despite my conversation yesterday with representatives from local health care commissioners, I am alarmed by what my right hon. Friend tells me about the business case to all intents and purposes being approved and then suddenly, between March and June, being disapproved—an extraordinary turn of events. It is inexcusable to raise the expectations of local patient groups, effectively giving a green light suggesting things were going ahead, and then to remove that expectation. I am happy to look into the matter further and to write to my right hon. Friend about it in more detail, because I am concerned about the issues he has raised. When something like £1.5 million has been spent on planning, and various plans and business cases have been brought forward, it is all the more concerning. It is not a satisfactory state of affairs, as far as the local management of NHS resources is concerned, and it is certainly not a satisfactory state of affairs, as far as local patients are concerned. I shall further investigate the matter and write to him on the basis of those investigations.
On future provision, I would like to reassure my right hon. Friend that, according to what local health care commissioners told me yesterday, the services currently provided at the hospital are safe and will still be provided. Even though plans do not appear to be in place, as they once were, to build a new hospital on a new site, it would be relatively easy, I understand, to maintain the buildings and the facilities on the current site in a state that would allow for the safe delivery of high-quality patient care and the ongoing provision of services for patients in the area. I understand that the older building can be improved, if required, to ensure that it can still deliver high-quality patient care.
With those reassurances, I will further investigate why the business case has gone from being approved to disapproved, as my right hon. Friend said. We have been reassured that the services currently provided at the hospital will continue to be provided for the foreseeable future.
Dr Fox
If we are to maintain clinical services on the original site, substantial investment will be required. I am sure that my hon. Friend will be sympathetic to our view. If a business case can be perfectly fine in March but dumped in July, if we, the poorest funded PCT, can give money to other less well-performing PCTs and given that the transfer is being put forward again this year, how can we have much confidence in the local management? Then, when our questions are not answered, as they continue not to be, we feel that there is not only insufficient competence but a lack of transparency. I am grateful for his reassurance that the matter will be looked into, but I would also like him to kick our local PCT in the proverbials to ensure we get the money required from the sale of the Millcross site or from additional investment, so that we can get the facilities that our taxpayers contribute towards but which seem to be getting siphoned off into other areas, whether because of a lack of adequate priorities or competence.
Dr Poulter
My right hon. Friend makes a good case. From what he has outlined, I fully agree that some of the circumstances surrounding the decision seem extraordinary and completely unacceptable. He described it as being far from competent, and I would not wish to disagree, judging from his analysis.
We are interested in delivering high-quality front-line patient care. The challenge for the NHS is delivering that care close to home and close to people’s communities. That is what Clevedon does and what it needs to continue to do. We need to ensure that PCTs, as they are at the moment, and clinical commissioning groups, as they will be in the future, invest in high-quality local health care services in order to meet the challenge of better looking after older people. That is the clear challenge that David Nicholson set for the NHS in 2009 in the quality, innovation, productivity and prevention challenge. It is about the need to redesign services in order to deliver better and more affordable care in the community.
That was also the challenge that Dr Foster outlined for the NHS earlier this week. It is about time that my right hon. Friend’s local health care commissioners acknowledged that challenge, invested in local health care services and made the argument for keeping investment locally, rather than, as he said, siphoning it off elsewhere. I will clarify the matter further by investigating with the PCT what has happened. From our discussions so far, I can reassure my right hon. Friend that the PCT and the clinical commissioning groups reassured me yesterday that they would, they thought, be able to find the investment to continue with the current older buildings, maintaining them as fit for purpose to continue with patient care, and that patient care will continue on the current site, as it does now, in April. Nevertheless, there are clearly questions for the local health care commissioners to answer.
Question put and agreed to.
Deferred Divisions
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
That the draft Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1) Order 2012, which was laid before this House on 29 October, be approved.
The House divided: - Ayes: 288 / Noes: 213 - Question accordingly agreed to.
That the draft Civil Legal Aid (Merits Criteria) Regulations 2012, which were laid before this House on 29 October, be approved.
The House divided: - Ayes: 287 / Noes: 213 - Question accordingly agreed to.
Ministerial Correction
(11 years, 5 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text
Staff
(11 years, 5 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text
Daniel Kawczynski
To ask the Secretary of State for Business, Innovation and Skills how many staff UK Trade and Investment employs in (a) Mauritania, (b) Morocco, (c) Algeria, (d) Tunisia, (e) Libya, (f) Egypt, (g) Israel, (h) Lebanon, (i) Jordan, (j) Iraq, (k) Saudi Arabia, (l) United Arab Emirates, (m) Bahrain, (n) Qatar and (o) Oman.
[Official Report, 26 November 2012, Vol. 554, c. 115-16W.]
Letter of correction from Michael Fallon:
An error has been identified in the written answer given to the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) on 26 November 2012. Due to an administrative error, the figure for full-time equivalent (FTE) UKTI staff working in Israel excluded those working within the investment complement.
The full answer given was as follows:
Michael Fallon
UKTI is not an employer in its own right; for the majority of its human resource requirements it draws on civil service staff employed by one or other of its two parent Departments—the Department for Business, Innovation and Skills (BIS) and the Foreign and Commonwealth Office (FCO)—and staff from its private sector contractors.
The following figures are the full-time equivalent of people working to UKTI objectives in each market, bearing in mind that some staff on the network work across multiple objectives and record the appropriate percentage of their time to each. These figures were compiled after the end of Q2 of this financial year, and are the most up to date currently available. Inevitably there may have been some changes to these figures since they were compiled.
Number | |
|---|---|
(a) Mauritania | 0 |
(b) Morocco | 5.1 |
(c) Algeria | 3.3 |
(d) Tunisia | 2.7 |
(e) Libya | 7.6 |
(f) Egypt | 11.1 |
(g) Israel | 4.3 |
(h) Lebanon | 3.2 |
(i) Jordan | 5.1 |
(j) Iraq | 5.2 |
(k) Saudi Arabia | 24.7 |
(l) UAE | 25.3 |
(m) Bahrain | 4.2 |
(n) Qatar | 8.3 |
(o) Oman | 6.1 |
The correct answer should have been:
Michael Fallon
UKTI is not an employer in its own right; for the majority of its human resource requirements it draws on civil service staff employed by one or other of its two parent Departments—the Department for Business, Innovation and Skills (BIS) and the Foreign and Commonwealth Office (FCO)—and staff from its private sector contractors.
The following figures are the full-time equivalent of people working to UKTI objectives in each market, bearing in mind that some staff on the network work across multiple objectives and record the appropriate percentage of their time to each. These figures were compiled after the end of Q2 of this financial year, and are the most up to date currently available. Inevitably there may have been some changes to these figures since they were compiled.
Number | |
|---|---|
(a) Mauritania | 0 |
(b) Morocco | 5.1 |
(c) Algeria | 3.3 |
(d) Tunisia | 2.7 |
(e) Libya | 7.6 |
(f) Egypt | 11.1 |
(g) Israel | 7.6 |
(h) Lebanon | 3.2 |
(i) Jordan | 5.1 |
(j) Iraq | 5.2 |
(k) Saudi Arabia | 24.7 |
(l) UAE | 25.3 |
(m) Bahrain | 4.2 |
(n) Qatar | 8.3 |
(o) Oman | 6.1 |
Petitions
Innox Riverside development, Trowbridge
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Westminster Hall
(11 years, 5 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Unemployment in Scotland
(11 years, 5 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Ms Dorries.
In West Dunbartonshire and in so many other constituencies in Scotland, unemployment is now a desperately serious challenge. This debate is for the 218,000 people who are out of work in Scotland, but it is also about many more than that, as not just that number are affected. There are 218,000 families, so we can double, treble or possibly quadruple that to get to the real figure of how many men, women and children are blighted by the scar of unemployment and the poverty that it creates. We have not seen the current levels of long-term unemployment among men in Scotland since 1997, and long-term unemployment for women this year is among the highest since data have been available.
People should have the right to work—that is not asking for too much. On Monday it is human rights day, when the UN’s adoption of the universal declaration of human rights is celebrated. It is well worth reflecting on article 23(1) of that declaration, which states:
“Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.”
Unless something changes, all those people will continue to be let down and their right to work will be ignored. Scottish people are being hammered. They are trapped between two ideologies, by two sets of politicians who are too blinkered to lift their eyes and see what is really going on, and too stubborn to put aside their political ambitions to do what is needed.
On one hand, we have the Tory and Liberal Government pursuing ideological cuts to jobs and services, cutting too far and too fast, and if this morning’s reports are correct, it sounds as though the austerity is going to be here with us for years to come. What is the result? Prices are rising faster than wages, our economy has flatlined for two years and long-term unemployment is soaring. Raising taxes and cutting spending too far and too fast is not working, which means that the Government are borrowing more this year, failing the one test that they set themselves. On the other hand, we have a Scottish Government standing on the sidelines, wilfully refusing to use the levers that they have to help people back into jobs. They have, in fact, cut jobs; in the public sector alone, John Swinney has cut more public sector jobs in Scotland than the Chancellor of the Exchequer.
However, I first want to look at what the UK Government are—or are not—doing.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Will the hon. Lady give way?
Gemma Doyle
As the hon. Gentleman has just come into the Chamber, I will make a wee bit of progress.
The UK Government did have a plan to help people back into jobs, but the Work programme is not working. In the great fanfare around its launch, we were promised a revolution in getting people back to work that would transform the way people were supported, reducing the benefits bill and getting people into jobs, while ensuring value for money for the taxpayer. What a joke—instead it has been a comprehensive failure. The 3.8% success rate in Scotland—I am looking at the success rate over 14 months—falls some way behind the Government’s minimum target. The success rate in West Dunbartonshire is 1.7%, which means that less than two of every 100 people on the programme get a job. That is a shocking statistic.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
I welcome the opportunity to debate the Work programme, but it is important that we do so on a factual basis. The hon. Lady is referring to outcomes in relation to the report on the Work programme, but that is not the same as people moving into work or off benefits. Therefore, if we are to have a debate about unemployment, that is what we should be discussing and not outcomes in terms of the Work programme report.
Gemma Doyle
We could have a debate about what outcomes mean, but for my constituents and people in Scotland, they mean getting a job and getting into work.
What is just as shocking is the Government’s estimate that if the Work programme did not even exist, five in every 100 people would be getting a job. In an astonishing act of irony, it is the first back-to-work programme where people are more likely to get a job if they are not on it.
Ann McKechin (Glasgow North) (Lab)
I welcome the fact that my hon. Friend has secured the debate this morning. Does she share my concern that the Scottish Government are refusing to provide training programmes for those who are currently on the Work programme, so people on the programme in Scotland are in a worse position than those south of the border? That is totally unacceptable.
Gemma Doyle
My hon. Friend makes a useful point, and we have seen exactly those problems in my constituency as well.
We have been told that things will get better, but we have heard that one before, and we are already £400 million into this failing project. People do not want to hear that things will get better eventually. They want and need proper help and support now. The truth is that the Government scrapped a successful job creation scheme. Labour’s future jobs fund had real success in helping people off benefits and back into the workplace. It created 10,000 jobs in Scotland and was a proven success, but only weeks after the general election, one of the first things that the Government did was scrap it. Why was it scrapped? Just because the Labour party had set it up—how spiteful.
The report by the Centre for Economic and Social Inclusion on the future jobs fund clearly set out the scheme’s benefits: raising aspirations for work; moving people off long-term benefits; and helping people into jobs. Some 101,000 Scottish young people are out of work and the Government should be investing in programmes that work, not pumping money into programmes that do not.
It was around this time last year that plans for the Youth Contract were first announced. Last month I asked the Employment Minister, the hon. Member for Fareham (Mr Hoban), if the rumours are true that millions of pounds are sitting unallocated and helping no one because the Government cannot get employers on board with the Youth Contract. It is worth bearing in mind that almost 1,000 young people are out of work in West Dunbartonshire. What was the Minister’s response to me? He dismissed my concern and told me that 20 young people in my constituency have had work experience through the Youth Contract. That was 20 out of 1,000, and it was work experience, not a job. The only place that those young people can see employment is in the Minister’s job title, and he should hang his head in shame.
However, it does not matter how many schemes and programmes there are; if there are no jobs for people to go into, it does not make a blind bit of difference. In recent months, as many as 36 people have been chasing every vacancy in West Dunbartonshire. In my constituency, as in many others, the challenge is not getting people ready for work; it is making sure that there are jobs for them to go into. That is why one of the first things that the newly elected Labour council in West Dunbartonshire did earlier this year was to launch an ambitious programme to create 1,000 new jobs and apprenticeships in our area. However, we also need a larger, more robust private sector in West Dunbartonshire. Public service has always been valued in Scotland. We do not subscribe to the Tories’ fixation on “Public, bad; private, good.”, nor do we accept their attempts to divide public and private sector workers by placing a higher value on one group.
Mr MacNeil
The hon. Lady is right that there are plenty of complaints about the Conservative Government in Westminster, but will she put her ambitions in London aside and do what is needed, as she said earlier—and so that the Scottish Government would be less hamstrung by Westminster—and support moves to give more powers to Scotland, and also crucially, support the Scottish National party’s call for funding support for shovel-ready projects?
Gemma Doyle
If the hon. Gentleman bears with me, he will hear that I do not believe that the Scottish Government are using the levers that they already have. If he is patient, I will come on to those issues. West Dunbartonshire was named as the area of the UK least able to weather the Government’s cuts, partly because of our high reliance on public sector jobs. When 40 people are chasing every vacancy in my constituency, as there have been at times during the past two and a half years, we have a responsibility to do everything possible to grow the existing businesses and to attract new ones.
In Aggreko and Polaroid, we have world-leading companies in West Dunbartonshire. We distil and bottle some of the finest whiskies in the world. We have diverse manufacturing companies. Our tourism product is second to none. The Clyde shipyards are a stone’s throw away, and the Clyde naval base is on our doorstop. All of that is sandwiched between the fabulous city of Glasgow and the beautiful Loch Lomond. West Dunbartonshire is a great place to do business, and there are real opportunities to be had, but we need the Government to change course.
There is an alternative to the Government’s cuts agenda. There has to be, because we must jump-start growth, get the economy moving again and create jobs. The real jobs guarantee, which we have proposed and which would be funded by a tax on bankers’ bonuses, would guarantee a job to 110,000 young people. We also want investment in infrastructure projects, a cut in VAT, a one-year national insurance tax break for every small firm that takes on extra workers, a one-year cut in VAT to 5% on home improvements and a properly resourced British investment bank to boost lending to small and medium-sized enterprises.
No one claimed that the path to economic recovery was going to be easy after the collapse, but the Government know and I am sure that the Minister knows that at the time of the 2010 general election, our economy was recovering. Growth was up, and unemployment was going down. We were on the right track, and the worst of it should have been over. From 1997 to 2008, unemployment in West Dunbartonshire more than halved. Yes, the financial crisis meant that it started to go back up, but the action that the previous Labour Government were taking pushed it back into a downward trend.
That is where we were at the start of 2010, but when the current Government took over, they took the wrong path. Their austerity measures have sent our economy and the job prospects of thousands of Scots spiralling downwards. We have seen a double-dip recession and borrowing go up. Is it any wonder that people are wondering whether there is even still a plan to stick to or whether the Government are making it all up on the hoof, as they go along?
We can all hope that the Chancellor will change course later today, but I sincerely doubt that any of us should hold our breath on that. I want to know what the Scotland Office will do about it. It beggars belief that no Scotland Office Minister takes part in any of the key Cabinet Committees on the economy or on welfare reform. The Minister has a duty to ensure that he is at the table and to force his way into those discussions, because Scots expect him to be there and to be making our case.
In Scotland, we thought that we would be protected from the worst of the Tories’ cuts, because one of the Labour Government’s greatest achievements was to establish the Scottish Parliament. It should have protected us from the worst excesses of a Conservative Government, but instead, 15 years on, we have a Scottish Government plagued by inaction, standing by and letting the Tories do their worst.
Gemma Doyle
I think that I shall make a bit of progress.
The truth is that for the past three months, unemployment in Scotland has continued to rise, while it has begun to fall, albeit very slowly and with no guarantees, across the rest of the UK. Unemployment rates in Scotland are up compared with the UK average. I want to know what the Scottish Government will do about that. Instead of using the powers that they have, the nationalist Government are sticking their heads in the sand, kidding themselves that it is all someone else’s fault and leaving the people of Scotland to suffer under the Tories once again.
Mr MacNeil
Would the hon. Lady like to tell us whether the former Labour Government introduced any cuts at all?
Gemma Doyle
I think that the hon. Gentleman will find that we are discussing unemployment in Scotland. I am setting out very clearly what the Scottish Government whom he supports are failing to do. We need to get the economy back on track. There is no black-and-white answer, but the Scottish Government are failing desperately the people of Scotland. If more of the hon. Gentleman’s colleagues were interested, perhaps they would have turned up this morning.
The hon. Gentleman does not have to listen just to me. The Scottish Chambers of Commerce is also very concerned and has called on the Scottish Government to use the levers at their disposal to stimulate business growth, because they clearly are not doing so at the moment.
Anas Sarwar (Glasgow Central) (Lab)
I congratulate my hon. Friend on securing the debate. She is making a very positive and passionate case. On the point made by the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) about the unemployment statistics in Scotland, my hon. Friend is right to say that unemployment has fallen across the UK but risen by 7,000 in the last quarter in Scotland. One reason for that is the number of people who are leaving school and not going into employment or to university or college as a direct result of the thousands of college places cut by the SNP Government.
Gemma Doyle
My hon. Friend is spot-on. I have met 17-year-olds in my constituency who were due to start a college course and thought that they had their future mapped out, but whose course was cut at a day’s notice because of cuts to Clydebank college. My hon. Friend is absolutely right.
My constituents have been particularly badly let down by the Scottish Government. Despite having one of the most challenging job markets in the whole UK, the Scottish Government have chosen to ignore us. In the initial plans to set up enterprise zones in Scotland, West Dunbartonshire did not even merit inclusion in the initial considerations. After snubbing our area, the Finance Secretary refused to meet me and local representatives to discuss his decision. In March this year, when West Dunbartonshire had the highest youth unemployment in Scotland, we were excluded from any support from the Scottish Government’s youth unemployment strategy fund.
There is no logic, no help, no jobs—only politics. The Scottish Government talk only of the limitations of the current constitutional settlement. Let us imagine the position if there were another devolved nation in the UK, one that could lead the way and would grab and use every power that it had to help its young people and wring every drop of help out of the levers of power that it had. It just so happens that, in Wales, Labour’s Welsh Government are doing exactly that through Jobs Growth Wales. That scheme is providing jobs—not work experience or training—for unemployed 16 to 24-year-olds, paying them the national minimum wage for a minimum of 25 hours a week and getting 4,000 young people a year back to work. I am told that most of those jobs are in the private sector. The scheme requires the positions to be new, not replacements—helping Welsh businesses to grow even in this tough economic climate.
If that is good enough for young people in Wales, it should be good enough for young people in Scotland. However, the Scottish Government have one priority, which they are pursuing relentlessly. I wish that it were job creation, and I hope that they will look very carefully at the Welsh scheme. At the moment, however, they are pushing everything else aside to pursue separation, in the hope that the people of Scotland will take a risk and cross their fingers that the grass will be greener on the other side.
Only last week, someone from Scottish civic society told me that their fear is that the Scottish Government are standing back deliberately, letting things get worse and worse, all to boost the fading chances that people will back their flawed plans for separation come 2014. At the heart of the SNP is a mistruth, the often repeated mantra that separating from the rest of the UK will mean that all of Scotland’s problems will be solved.
I want to roll back the years slightly to 1968, when Mick McGahey, the National Union of Mineworkers Scotland Area president, argued at the Scottish Trades Union Congress for a Scottish Parliament but against separation. He said that his members had more in common with the London dockers, the Durham miners and the Sheffield engineers than they had ever had with the “barons and landlord traitors”, as he called them, of Scotland. That is still true today, because someone unemployed in West Dunbartonshire has more in common with someone unemployed in the west midlands than with the speculators who caused the economic collapse, even the Scottish ones.
The workers movement has always been an international one. Constitutional wrangling will do nothing for the 218,000 Scots who want a job. In fact, it may harm business confidence. Last month, Rupert Soames, chief executive officer of Aggreko, which is one of Scotland’s six FTSE 100 companies, the largest temporary power generator company in the world and based in Dumbarton, said that the disadvantages of separation were
“large, serious and…likely to arise”
and would create
“a great deal of business disruption”.
Most worryingly, he said that business leaders were unwilling to speak out because
“over the past couple of years, anyone who has dared open their mouths on the subject with views that are contrary to those of the SNP have brought down on themselves rains of bile and ire, which is really very unpleasant.”
He said that a lot of the language was very intimidatory. What a damning indictment of Scotland’s Government. I am sure that the bile and ire will be raining down on me on Twitter later. In fact, I saw the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) on his phone, so perhaps he has already been at it. We need the voice of business in this debate. We need them to be the job and wealth creators. We need a frank discussion, for the 218,000 families dealing with unemployment and for every person in Scotland.
I am told that during a recent conference, the Deputy First Minister, who walked away from Scotland’s health service to lead the nationalists’ referendum strategy, was asked about plans for welfare provision in a separate Scotland. He reportedly said that it would take four or five years to work out the details. Scots do not button up the back; we are not going to vote for a blank sheet of paper. No answers on welfare, no attempt to drive down unemployment and no real dialogue with business—only an obsession with separation. We should not be in a situation where almost a quarter of a million people are out of work without any proper provision to help them back into jobs. It just is not good enough.
I want us to debate employment, not unemployment, and celebrate our world-leading sectors of energy, food and drink—particularly whisky—tourism, life sciences, electronics, defence and aerospace, and manufacturing. Right now, Scots are caught in a toxic storm of the Tory-led Government’s cuts and the Scottish Government’s refusal to help. It is time for them both to step up to the plate, put aside their obsessions and ideologies, and help the people of Scotland back into work.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I congratulate my hon. Friend the Member for West Dunbartonshire (Gemma Doyle) on a superb speech, full of passion for not only her constituents but the people of Scotland more widely, particularly those facing unemployment.
I want to take a few moments to highlight issues in my constituency, some of which will be familiar to the Minister because I have raised them previously. Jobs and employment is the biggest issue that I hear about when I speak to people on the doorsteps or when they come to see me. There are concerns about the number of young people who are unable to secure a job after they have completed a college course. We have a good local college—Kilmarnock college—working extremely hard to encourage more people to take up training opportunities, notwithstanding the difficulties of the cuts to college funding in Scotland. In the not-too-distant future, it will benefit from a new campus in Kilmarnock. Many young people are supported through college courses and their hopes built up, only to have those hopes dashed once they finish college and cannot find employment in their chosen field.
People coming to my surgeries are increasingly raising concerns at the other end of the spectrum—people in their late 40s or early 50s, who did not expect to have a job for life but certainly expected to be able to use their skills to move from one job to another. They now find it extremely difficult to find work. Many people who have built up skills over time expected to move to another job, only to find when they are unemployed that the job vacancies are simply not there.
The Government have to look at the figures. In response to a parliamentary question, I was told that in October 2012, 355 full-time and 77 part-time vacancies were advertised in the Jobcentre Plus office in my constituency. The claimant count figures for the same period show that 3,432 people were claiming jobseeker’s allowance in Kilmarnock and Loudoun. I also asked about the proportion of people aged 18 to 64 who are not in work or claiming benefits—those I describe as the “hidden unemployed” because they do not show up in the JSA figures. The Office for National Statistics, as part of work undertaken for the annual population survey, estimates that 4,000 people were in that category in Kilmarnock and Loudoun. The Minister is aware that many such estimates are qualified as likely to be imprecise or not reliable enough for what the ONS describes as “practical purposes”. That estimate, however, is one of those “considered acceptable”—to use the ONS’s term.
Those in their late 40s and early 50s are too young to retire. Many have worked hard and built up savings, but will have found themselves using up those savings to keep their heads above water for a year or so and ensure that they are able to get back into the job market. They are now finding difficulties in paying their mortgage, fuel bills and so on. Their savings have gone and the grind of looking for work every day is extremely difficult. We will see many more such people coming to us in the not-too-distant future.
The number of those claiming JSA for more than 12 months in my constituency has gone up from 635 in October 2011 to 1,125 in October 2012. More people are unemployed for longer. The problem is at both ends: the very young, coming out of college and school looking for their first job, and those at the other end of the spectrum.
Just in the past 48 hours we have heard of another blow to jobs in Kilmarnock. I am not sure whether the Minister is aware of it yet, but he knows of my concerns over the MAHLE Group plant in Kilmarnock. To be fair, Ministers responded the last time there were difficulties in the plant. This week, we heard that there are likely to be 82 redundancies, out of a work force of about 400, in the next three months. That is a significant blow to the local economy in Kilmarnock and comes on the back of the inability to replace the lost Diageo jobs.
That may sound like a picture of doom and gloom, but I do not want to sell Kilmarnock and my constituency as all doom and gloom, because it is far from it. There are businesses, many of which I met over the summer, that want to take on more employees, but find that some of the programmes the Government are offering, such as Working Links or the Work programme, do not necessarily deliver what they want as employers. They tell me that schemes such as the national insurance contribution holiday are too difficult to access and are not designed to meet their needs. I have raised that with Ministers before.
My constituency was not considered an area suitable to become an enterprise zone. It is great that North Ayrshire and Arran, the next-door constituency, can benefit from the scheme, but why could not the whole of Ayrshire have been looked at with a sensible, joined-up approach, given the numbers of people who could commute to work within it? The Governments in both Scotland and the UK could do more. At some stage, we have to rise above one person or one Government blaming another for the problem. The people expect us to work together to do something about it.
I was disappointed with another answer to a parliamentary question I received—the Minister might think that all I do is table parliamentary questions. Such answers are important, because they get to the heart of what the Government are doing and are part of how we hold them to account. I tabled a question at the end of November:
“To ask the Secretary of State for Business, Innovation and Skills, when he last met Ministers in the Scottish Government to discuss the Scottish manufacturing and construction sectors; and when he plans next to meet Ministers in the Scottish Government for such discussions.”
I was disappointed to get the response:
“There have been no recent discussions at ministerial level about these specific issues with the Scottish Government, and none are planned”.
What does that tell us, and what signal does that send to the people of Scotland who are out of work and desperately want to work, and to those in the manufacturing sector who want to continue their work and take advantage of export as well as domestic markets? However, the answer also stated that
“BIS officials are in regular contact with officials in the Scottish Government on a wide-range of issues affecting the manufacturing and construction sectors.”—[Official Report, 27 November 2012; Vol. 554, c. 298W.]
May I gently ask the Minister to use his good offices to get people together in a room at ministerial level to start such talks, and to begin to look at what more can be done in Scotland to support the positive initiatives that exist?
The Minister may be aware of the Entrepreneurial Spark—ESpark—initiative, which both UK Ministers and some Scottish Ministers have been keen to champion, which encourages people to start their own businesses. Several very innovative projects have arisen as a result, as I have seen in Ayrshire. Businesses that have been started up ought to be enabled to grow and to take on other employees, so what more can the two Governments do to ensure that?
Ann McKechin
I welcome my hon. Friend’s comments, and she has made some good points. Does she agree that both Governments should concentrate on procurement, because many local businesses find it difficult to work through complex procurement systems? The Work programme system is one, and the Forth road bridge—for which most of the steel will be manufactured in China—is another example of local businesses being unable to compete because of the design of the procurement process.
Cathy Jamieson
My hon. Friend makes an important point. This may come up later in the debate—I am not sure—but the whole issue of the Scottish Government’s intentions on procurement, and those of the UK Government, is important. Will the Minister give us information about how the two Governments are working together to ensure that tendering processes are available to local firms?
David Mundell
On that point, the hon. Lady may be aware that the Secretary of State has announced that there will be a Scottish Employability Forum, which will bring together the Scottish Secretary, the Scottish Government represented by John Swinney, the Convention of Scottish Local Authorities represented by Councillor Harry McGuigan from North Lanarkshire council and a range of other stakeholders. That forum will address exactly the issues highlighted by her and the hon. Member for West Dunbartonshire (Gemma Doyle). It will ensure that the two Governments and local government, which was mentioned by the hon. Member for West Dunbartonshire, actually work together; local government has an extremely important role. I therefore believe that there is significant progress.
Cathy Jamieson
I welcome what the Minister says. However, to pick up the point made by my hon. Friend the Member for West Dunbartonshire, for many people currently out of work, the issue is not employability, because they are employable and are desperate to be employed; the simple problem is that the jobs are not there.
To return to the figures, with some 366 people chasing every vacancy in East Ayrshire, one person gets the job, while the other 365 are employable, want to work and are desperate to get that start. They are desperate either to get their foot in the door by having a first job or to return to work to support their family. That has to be considered, and the question is how firms can be encouraged to take people on and to expand. There is still more that both the Scottish Government and the UK Government could do, and they should look to build on the successful companies that exist and, wherever possible, to maintain and save jobs. In that context, I hope that the Minister will offer his support for ways of helping to retain the jobs currently under threat in my constituency.
I have probably taken up my fair share of time. I welcome the opportunity to speak in this debate. I again make the plea that both Governments should recognise that this issue is about people’s real-life situations; it is not a political football to be battered back and forth.
Cathy Jamieson
That is probably exactly what the hon. Gentleman is about to do; I hope not.
Mr MacNeil
I, too, hope that we find some agreement. Does the hon. Lady agree that it might help if the Scottish Government had capital borrowing powers to enable them to stimulate the economy and create jobs in Scotland?
Cathy Jamieson
The hon. Gentleman always takes an opportunity to have a moan about what the Scottish Government do not have or cannot do, rather than to look at the levers and powers that they have. The important question is: what can the Scottish Government do? They have plenty of powers at their disposal, as do the UK Government. It is for both of them to work together, and that is what I hope comes out of this morning’s debate.
Graeme Morrice (Livingston) (Lab)
It is a pleasure to serve under your chairmanship, Ms Dorries, and it is good to see you back out of the jungle. I welcome the opportunity to speak in this important debate, and I congratulate my hon. Friend the Member for West Dunbartonshire (Gemma Doyle) on securing it.
This debate is being held on the day that the Chancellor of the Exchequer delivers his autumn statement, which will highlight the true scale of his poor performance in the period of high unemployment, weak growth, rising borrowing and declining wages that is gripping the nation. Even the outgoing Governor of the Bank of England has warned that the UK faces a
“rather unappealing combination of a subdued recovery, with inflation remaining above target for a while”.
The latest quarterly inflation report indicates that the UK could be stuck in a low-growth environment, with economic problems in the eurozone and the rest of the world continuing to have an impact.
The Ernst and Young ITEM Club report published on Monday states that Scotland’s overall output decline of 4% over the past four years puts it on a par with the troubled Spanish economy, and that Scotland’s economy is unlikely fully to recover until 2016. This year will be the third out of five in which the Scottish economy has shrunk. The report also predicts growth of just 0.7% next year, which was “well below normal” and lower than the expected UK figure. It estimates that 60,000 jobs will be shed in the Scottish public sector between the start of the 2008 financial crisis and the end of its forecast in 2015.
Lindsay Roy (Glenrothes) (Lab)
It is a pleasure to serve under your chairmanship, Ms Dorries.
Is my hon. Friend aware that the local government in Fife is investing £5 million in creating modern apprenticeships, which is an extension of the jobs fund?
Graeme Morrice
Yes, and I welcome that initiative by Labour-led Fife council. Others that have been mentioned—initiated by Labour-led local authorities in Scotland—are clearly to be welcomed.
The matters I was referring to represent yet more miserable news for Scotland, and underline the need to address business growth and harness the job-creation potential of our small and medium-sized businesses as a top priority. It is a cause of concern that the Scottish unemployment rate is 8.1%, which is higher than that of the UK. Some 218,000 people are now out of work in Scotland. The UK and Scottish Governments must share responsibility for those continually disappointing figures. As a result of their decisions, this is a really bad time for families who are worried about their jobs and their children’s futures, and are struggling with higher food prices and energy bills.
In my constituency, long-term unemployment rose by 380% in the past year, which is the worst figure since the general election. That is truly depressing news for young people and women, and for the 1,700 workers who are losing their jobs at the Hall’s of Broxburn meat processing plant and for the 50 employees at Vion’s headquarters in Livingston. People in Scotland are not only falling victim to the failed policies of this bungling Tory-led and Lib Dem coalition in Westminster, but are suffering from the Scottish National party’s inaction and incompetence in Holyrood. I notice that the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) has just left.
The coalition Government are running out of excuses. Their flagship welfare-to-work programme has failed to get people into proper jobs. Under the Work programme, firms and charities are paid to find jobs for the long-term unemployed, but as my hon. Friend the Member for West Dunbartonshire said, only 3.8%—four in every 100— of Scottish people on the programme succeeded in gaining a job for six months or more, which is well below target.
Jim McGovern (Dundee West) (Lab)
It gives me no pleasure to say that the Dundee city council area has the worst record for creating jobs under the Work programme. The figure currently stands at 1.4%. We obviously have the separatists in power in Edinburgh and in Dundee. When can we expect them to stop saying that the big bad boy in Westminster did it and ran away?
Graeme Morrice
Indeed. I certainly concur with my hon. Friend’s comment. I will be coming to that same point shortly. Let me emphasise again that the Work programme is a miserable failure because the Government are not taking seriously their responsibility to create jobs, and what they have done has been exposed as worse than doing nothing.
The figures show that 101,000 young people are out of work in Scotland and, at 23.5%, the proportion is higher than in the UK. That means that close to half of all unemployed people in Scotland are between the ages of 16 and 24. If we deprive such a substantial number of young people of the benefits of work, we will once again pay the price for many generations to come. They are David Cameron’s lost generation. With such high levels of youth unemployment, education and training are crucial to enhancing young people’s skills and improving their chances of finding a job. Many young people I speak to in my constituency express the view that Government, and decision makers more generally, have abandoned them.
The default position of Alex Salmond and the SNP Government at Holyrood is to blame the situation on the London parties, and that is now wearing thin. It would be a tragedy for Scotland, and for the UK as a whole, if the devastating impact of the economic slump on hard-working people, families and communities is made worse by the unholy trinity of David Cameron, George Osborne and Alex Salmond failing dismally to do anything meaningful on jobs for Scots.
In contrast, Labour has a clear, coherent five-point plan for growth and jobs to help struggling families and support small businesses. Increasing employment will only come from business growth, so both Governments must boost capital investment, and the UK Government must incentivise business lending, to enable firms to create more jobs. The Government can start to address the matter in Scotland, and across the UK, by using the £3 billion windfall generated from the sale of the 4G mobile phone spectrum.
I look forward to hearing what the Minister has to offer at the end of this debate. The Government must take responsibility and come forward with an action plan to tackle unemployment and give Scotland’s people the opportunities that they need to thrive.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I am grateful to my hon. Friend the Member for West Dunbartonshire (Gemma Doyle) for giving Members an opportunity to discuss an issue of such great importance. Like other colleagues, I will concentrate on issues that relate to my constituency. Edinburgh North and Leith does not have the extreme levels of high unemployment that are suffered by some other constituencies. It normally comes somewhere in the middle of the UK figures. As unemployment goes up in the UK, so, too, does it in my constituency, and it stays roughly in the middle range. However, as with all our constituencies, and indeed the country as a whole, the broad picture does not always accurately reflect the position on the ground. It would not surprise many Members in the Chamber to hear that my constituency has areas that are among the richest in not just Scotland but the UK as a whole, and also areas that come near the top of the deprivation and unemployment rates in Edinburgh and, in some cases, in Scotland as a whole.
Youth unemployment has risen sharply in my constituency. A year or so ago, we found that we had the highest rate in Scotland of 16 to 17-year-olds not in education or employment. My constituency has certainly suffered from recent events in line with the rest of the UK. I suspect that we are also experiencing the phenomenon to which my hon. Friend the Member for West Dunbartonshire referred of unemployment not really showing up in the figures. That is perhaps more true in my constituency than in any other. I strongly suspect that underemployment is a major factor, with people who want to work full time finding themselves working part time because there is no alternative.
I am aware that many people in my constituency are self-employed. There are those who were on contracts to work in the financial services sector or who were in some ways linked to it. They are still self-employed, but the amount of work they are getting has dropped dramatically, as has their income. Although this is difficult to work out from the figures, I suspect that that is a particularly severe problem in my constituency.
The house building figures are also low, showing a dramatic lack of activity in my constituency. House building is always a sign of activity in the economy as a whole, and the latest figures from the National House-Building Council show that the number of new home starts in my constituency over the last quarter was just eight, and that is in a constituency and a city where the population is still growing. The population of Edinburgh is now almost half a million; it has grown by almost 20% over the past 10 years and it is projected to grow still further. We certainly would not expect such a low number of new home starts if the economy was going well, and it clearly is not.
We have heard from colleagues about the lack of success of the Work programme. For me, people getting into a job at the end of it is a pretty good indicator of whether the scheme is working. Again, the number of people in my constituency who have found work is not as low as elsewhere—my hon. Friend the Member for West Dunbartonshire referred to a figure of 2%. In my constituency, it is 3% of those over 25. It seems that people who go on the programme are getting work at a lower rate than those who do not, which does not sound like a recipe for success.
Jim McGovern
My own daughter, Jillian McGovern, is one of my hon. Friend’s constituents, and she was made redundant earlier this year. Thankfully, she has managed to find a new job, with no assistance whatever from the Department for Work and Pensions. Does my hon. Friend agree that the DWP Work programme seems to be drastically unsuccessful?
Mark Lazarowicz
The figures clearly speak for themselves. I am glad that my hon. Friend’s daughter has found employment. Of course, one of the tragedies is that many staff in the DWP are working hard to try to make the scheme work, but are unable to do so. We all know that when there is a general backdrop of high unemployment and low economic activity, there is only so much that can be done.
Some things are being done by various levels of Government. I am pleased to say that the Edinburgh city council, through the Edinburgh Guarantee scheme, has been active not just in itself as an authority but in the private sector, encouraging the provision of real jobs and opportunities for young people. In the current year, Edinburgh city council is offering 50 new apprenticeships, 18 new training places and 50 further opportunities with council contractors. It has been encouraging private sector employers to take up that approach as well, with some success. Of course Edinburgh has a Labour-led council, which may have something to do with the success, but it certainly shows what can be done by local government, at city or district level, to respond to the current difficulties.
Clearly, a local authority can only do so much, so what we need is a change in the national picture and the national direction. We need a change of course, such as the one that my hon. Friend the Member for West Dunbartonshire referred to in her opening contribution. We also need action at Scottish level.
One of the ways in which we can provide real jobs and use the current economic downturn to provide a way out and a way forward for the future is, of course, to invest in infrastructure projects. Both the UK Government and the Scottish Government have been slow off the mark in coming up with new infrastructure projects to meet the needs of the time. I have lost count of the number of times that this Government—the UK Government—have announced new infrastructure schemes and projects, and processes and mechanisms to try to bring jobs into the sector. I accept that things are slowly happening. However, it is two and a half years in now, and we have seen hardly any new projects and hardly any new jobs on the ground as a result of the UK Government’s limited measures to promote infrastructure investment.
I also have to say that the Scottish Government have been slow off the mark. Of course, their powers are not as wide as some of their members would like, but there is a lot that they could do with their existing taxation powers and spending programmes to boost jobs and infrastructure in Scotland.
I am pleased that the Scottish Government’s Cabinet Secretary has recently presented the UK Government with a list of “shovel-ready” projects, as he described them. I think that he could have been preparing that list a bit earlier on in the scheme of things, but nevertheless it has now come forward. I know that one of the major schemes on that list is for investment of more than £100 million to develop the port of Leith in my constituency, which will be important not only for Leith—obviously—but for the whole Scottish economy. That is certainly good, and I hope that in his response to the debate the Minister will tell us that he and his colleagues in the Scotland Office—or rather, his colleague, the Secretary of State—are lobbying actively to ensure that Scotland gets its fair share of the infrastructure investments that come forward, and that those investments are put into effect as soon as possible.
That is the key point—we need action now. We do not need promises of infrastructure investment or activity two, three, four years down the line. We do not want people to be promised training places with no jobs to go into at the end of the training period. We need a change of course, and we need the measures that the Government have promised, particularly on infrastructure, to be put into effect as soon as possible, so that we see some urgency from the Government in a way that, frankly, we have not seen in the past two and a half years.
Mr Russell Brown (Dumfries and Galloway) (Lab)
Thank you very much, Ms Dorries. It is a pleasure to serve under you this morning.
I begin by congratulating my hon. Friend the Member for West Dunbartonshire (Gemma Doyle) on securing this debate. I think that many of us had suspected that we would have seen the full ranks of the Scottish National party here in Westminster Hall this morning. Instead, they sent the normal token gesture in—the hon. Member for Na h-Eileanan an Iar (Mr MacNeil)—and he has fled the scene of the crime already. That is no help whatsoever.
All too often we hear from the SNP about “shovel-ready” projects; indeed, they have been mentioned again in Westminster Hall this morning. I can tell everyone here today that there are hundreds of young people in my constituency who would desperately love to get on the end of a shovel and be gainfully employed, because that is the thing that they really want to do and the inability do it causes deep depression in households and communities, which is something that, as a nation, we can ill afford. When I say “a nation”, I do not just mean Scotland; I mean the entire UK. Young people desperately want to be out there being gainfully employed.
In about three hours’ time, we will have heard the bulk of what the Chancellor has had to say today. I do not hold out many hopes, but I am open to persuasion and I am ready to be surprised as he makes his autumn statement. However, my area is a rural area. I will mention figures this morning and I apologise to the Minister before I start mentioning them, because those figures are for Dumfries and Galloway; they are figures not only for my constituency and my backyard but for part of his backyard as well. The reality is that although the unemployment figures in our area are desperately high, he and I both know that our local economy is based around small and medium-sized enterprises, and there are enough SMEs that if all of them took on one extra person we would just about wipe out unemployment in my local area.
The difficulty is that our two largest employers are the local authority and the local health board, and the impact of the cuts that we have seen in the last few years, both under the coalition Government in Westminster and under the SNP Government in Edinburgh, is really breathtaking. It is not a surprise to those of us here in Westminster Hall today, but it may well be to those outwith here, that we actually saw cuts happening in Scotland in our local area in the public sector at least two years before there was any cut in block grant to the Scottish Government. So it was all happening under the guise of this great nationalist Government, and quite frankly it was destroying the base for jobs and any sort of growth in my local area.
In October 2010, there were 2,691 jobseeker’s allowance claimants in Dumfries and Galloway; in October 2011, there were 3,042; and in October 2012 the figure had grown to 3,205. As for the long-term unemployed, there are now just over 900 people who are long-term unemployed in Dumfries and Galloway, which is the highest level since 1999. Those long-term unemployed people, many of whom are young people aged between 18 and 25, find themselves in a desperate plight.
Again, it is unfortunate that the sole SNP Member who was present earlier—the hon. Member for Na h-Eileanan an Iar—has now left, because we even had a situation earlier in the year when one of our local regional list MSPs, a lady by the name of Joan McAlpine, decided to have a jobs summit. [Interruption.] A sharp intake of breath—no further comments please. She decided to hold a jobs summit and she introduced to the local community the Minister responsible for youth unemployment, a lady called Angela Constance. We have heard nothing since. That “summit” was a talking shop and I regret to say that I had to force my way in to see what was actually going on. It was all window dressing, with nothing to show for it.
I know that colleagues have already mentioned the future jobs fund and how some people have said that it was not working. In fact, the Prime Minister himself said that it was
“expensive, badly targeted and did not work.”—[Official Report, 19 January 2011; Vol. 521, c. 832.]
So, at a very early stage of this coalition Government, the decision was made to scrap the future jobs fund. That left many of us somewhat bewildered and confused, because not that many months beforehand officials in the Department for Work and Pensions were saying that it was a good programme and it was working.
I apologise to colleagues if I am about to divulge information that they are already aware of, but only last month the DWP published a document entitled, “Impacts and Costs and Benefits of the Future Jobs Fund”. It said:
“Under the baseline assumptions, the FJF programme is estimated to result in a net benefit to participants.”
That was estimated at approximately £4,000 per participant. In addition, the net benefit to employers was estimated at approximately £6,850 per participant; the net cost to the Exchequer was estimated at approximately £3,100 per participant; and the net benefit to society was estimated at approximately £7,750 per participant. I am no economist—quite frankly, I am not an expert in anything—but I would have thought that those figures showed some sign of a good return for the investment that was being put in.
I visited a number of young people who were working on a future jobs fund programme, along with my hon. Friend the Member for Glasgow North (Ann McKechin) who is sitting beside me now and who was a Minister at the time. We jointly visited a group of young people and they were delighted at the opportunity that they were being given to work. Suddenly, however, the new Government deemed that the future jobs fund was a failure.
I could go on at length, but I will not because I know that there is another colleague, my hon. Friend the Member for Inverclyde (Mr McKenzie), who wants to speak. However, we have seen the cuts in the numbers of nurses and midwives in our areas, and the cut in police support staff in our areas, and quite frankly that is down to a combination of the coalition Government and the SNP. So, if we are talking about crime, they are partners in crime in what has happened in my area.
It is not that Labour does not have an answer. I am sure that my right hon. Friend the Member for Morley and Outwood (Ed Balls), the shadow Chancellor, will make his point this morning, and it is about the 4G mobile spectrum and the £3 billion that can come from that, and it is also about tax on bankers’ bonuses. Those are not just warm words: this money can be used constructively, to do something for our country and for the unemployed. On the back of some of that, we could have 100,000 jobs for young people and bring forward investment.
The country has been here before. When the Labour party came to power in 1997, we gave a commitment to the people of this country that we would use a windfall levy on the privatised utilities to create the new deal; we carried that commitment through, and it worked for the benefit of unemployed people. I just hope the Chancellor will listen a little today to the shadow Chancellor and to some of the views expressed in this debate.
Nadine Dorries (in the Chair)
Order. Mr McKenzie, I will call the Opposition Front-Bench spokesman at 10.40 am, so if you take just 10 minutes, that would be great.
Mr Iain McKenzie (Inverclyde) (Lab)
Thank you, Ms Dorries. It is a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for West Dunbartonshire (Gemma Doyle) on securing this important debate.
I would love to be here debating employment levels in Scotland, but, unfortunately, we are here to debate Scotland’s unemployment figures, which are, quite frankly, a national disgrace. It seems that when the Conservatives get into power, they look on unemployment as a price worth paying, and as something that has to exist to balance employment. We know, however, that it does not have to exist.
The Scottish unemployment rate is above the UK average, and Scotland is a black spot of unemployment on the UK map. What a message that sends to the rest of the UK and beyond, especially when we are trying to attract business and inward investment to Scotland.
Why are these things happening? The UK Government and the Scottish Government are failing the people of Scotland. One is preoccupied with austerity and cuts, while the other is preoccupied with the constitution and a desire to march into a dreamland of independence, although what Scots people have at the moment is a nightmare of unemployment.
Youth unemployment is at crisis levels. What message does that send to our young people, who need work and who want to work? They now find that their only opportunity of finding work is probably to leave Scotland, and our numbers are diminishing across communities.
I want to spend a bit of time contrasting those issues with what has been happening in my constituency. Inverclyde is a speck of light on the dark map of unemployment that is Scotland. Believe it or not, Inverclyde has actually managed to reduce its unemployment numbers. There are several reasons for that, which I will go into later, but it is also thanks to Labour—a Labour MP, a Labour MSP and a Labour-led council—which has focused on, and been delivering, jobs for the people of Inverclyde.
Two years ago, the council took the brave decision to go it alone and fund the future jobs fund, which the Government cut when they came to power. That will be increasingly difficult as the council’s budget is squeezed, and this year’s settlement for local government looks bleak indeed. In the past, Inverclyde was the second-best performer across the UK on the future jobs fund, with a success rate that saw 90% of people going into jobs. In terms of young people not in education, employment or training, we have achieved single figures, and we would hope to achieve zero this year, although, as I said, it looks as though local government funding will, unfortunately, mean that that target is out of our reach.
We hear much about Government contracts with jobs and apprenticeships written into them, but that is nothing new in Inverclyde, where we have had such things for many years. We set ourselves an ambitious school estates reprovision programme, and we wrote into the contracts the need to provide for local labour and a number of apprenticeships if those contracts were to be won, and that was very successful. By 2014, our school-building programme will mean that across Inverclyde all schools will be new or refurbished, and that will bring many jobs.
Just last week, I brought together 40 employers, the jobcentre and unemployed people in Inverclyde at a jobs fair. Our target is to ask employers to give the best possible start to someone in Inverclyde in the new year, by giving them a job.
Along with the local MSP, I have been highlighting our area’s ability to play a part in renewable energy and wind turbine construction. We have the skills and the infrastructure, but, unfortunately, we do not have the backing of the Scottish Government, who have been extremely unhelpful, cutting our regeneration projects to zero next year, which will eliminate any progress on our waterfront development. They have also given only a small amount of support to our schools programme—just £5 million, as opposed to the £80 million we were given when Labour was in power in Scotland, which allowed us to create many jobs and regenerate Inverclyde.
In the 2011 by-election, the First Minister and many others visited Inverclyde, telling us that good times were around the corner and that jobs were there for us—if we just voted a particular way, the jobs would emerge. The First Minister promised us so much, but absolutely nothing has materialised—evidently, we did not vote the way he wished. Two hundred Scots are losing their jobs every day. We are facing an unemployment emergency, and the lack of action by either Government is resulting in increasing unemployment levels, which look to be the worst for many years.
Many of my hon. Friends have mentioned how drastically ineffectual the Work programme is and that it has had no impact whatever on unemployment levels. Its lack of success in my constituency is such that it has placed only 1% of people in employment. Goodness me, I could have done that myself over a weekend and saved the Government a fortune. That was a saving that could have been made.
Labour Members believe we can create jobs using a tax on bankers’ bonuses and a windfall from 4G. We can put people to work and give young people hope again; if the Government really want to create jobs, they can. Our constituents need and want work, and young people need hope for the future. We should not let another generation be sacrificed to unemployment.
Gordon Banks (Ochil and South Perthshire) (Lab)
I welcome you to the Chair, Ms Dorries. It is a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for West Dunbartonshire (Gemma Doyle) on securing the debate and on tackling head-on the vital issue of unemployment in Scotland.
We have heard throughout the debate that the people of Scotland are being failed by two Governments, in Westminster and in Holyrood. The coalition can barely keep itself together, never mind effectively govern the country, and the SNP is entirely consumed by the independence referendum, which means that it is not tackling the real problems Scots face in their everyday lives. With 218,000 Scots unemployed, few issues are more important for both Governments to tackle, or indeed more important for the people of Scotland, but our priority does not, sadly, appear to be the priority of either Government.
The coalition’s ill-fated Work programme, which we have heard about this morning, has got only four out of every 100 Scots back to work. That figure is really startling and lays bare the Government’s complete failure to get to grips with the unemployment crisis. It is also alarming that the Scottish unemployment rate is 8.1%, which is higher than the 7.8% UK average. As a result of the bleak economic outlook, underemployment has also been on the increase. This Government simply cannot get Britain working, and as a result they cannot get its economy growing again.
Youth unemployment is a particular concern. It is another statistic that is higher in Scotland than in the UK as a whole, at 23.5% compared with 21.7%, with nearly half of all unemployed Scots being aged 16 to 24—a tragic proportion, of which the Minister should be ashamed. If action is not taken soon to tackle that, those young people will become, as one of my hon. Friends has said, Cameron’s lost generation, and Scotland will be less able to take full advantage of opportunities that come our way in the future, which would be a total and utter disgrace.
Long-term unemployment also contributes to an ever-increasing welfare spend. Some 38,395 people in Scotland have been claiming jobseeker’s allowance for longer than six months, which is in contrast to fewer than 8,000 in 2008. Even more worryingly, the number of Scots claiming JSA for at least 12 months has grown by 198% since 2008.
Something has gone seriously wrong with the Government’s unemployment strategy, and they plainly have no ideas about how to bring jobs and growth to Scotland. The failure of the Work programme has contributed to an increase in welfare spend of about £20 billion more than expected. The priorities are all wrong, as can be seen in the Chancellor casting 100,000 16 to 24-year-old Scots on to the dole, while giving a tax cut to millionaires.
To try to tackle that £20 billion overspend in the welfare budget, significant changes will come into force shortly, and they will have a devastating impact on Scotland. It has been calculated that, due to the welfare changes, £114.8 million will be removed from the Scottish economy in Glasgow alone, and £6 million will be removed from the economy of Clackmannanshire, which is Scotland’s smallest county and is in my constituency. I have no doubt that that cash grab will affect local economies, and it will, according to the Fraser of Allander Institute, lead to a further 2,000 or so job losses and—guess what?—an even greater demand for welfare.
To kick-start the economy and create jobs, the Government should, as has been said, take on board Labour’s proposal to put revenues from the 4G spectrum auction to good use. Scottish Labour at Holyrood would use any Barnett consequentials from the growth spending on key investment priorities, such as house building, which I feel extremely strongly about. With nearly 40 years’ experience in the construction industry, I am dismayed to see the stagnation from which the industry is suffering, but that is no surprise when the Government are cutting capital investment by 21% by 2014.
The Government seem to be failing to grasp that with every £1 invested in construction the economy benefits by £3—those numbers have been confirmed by independent economic research. The promise of a threefold return should be incentive enough for the Government to invest in the industry. There are few better ways to kick-start economic growth than with a national house-building scheme and support for construction. There are few better ways to deliver skills in great numbers than through investment in the construction industry, and there are few better ways to impact positively on our high streets than through investment in housing and construction.
I want to pick up on some of the points that have been made this morning. That there are no Scotland Office Ministers on key Cabinet Committees that focus on growth, such as the Growth Implementation Committee, is indeed a great worry for Scotland and, I imagine, a great embarrassment to the current residents of the Scotland Office. I share the opinion expressed by my hon. Friends that the scrapping of the future jobs fund, which has been recognised by the Centre for Economic and Social Inclusion for its achievements, was a mistake, and there is a stark contrast between that recognition and the failure of the current programmes.
My hon. Friend the Member for West Dunbartonshire talked about how the Scottish National party has cut more than 30,000 public sector jobs, but I want to take this opportunity to make the Chamber aware of remarks made by Keith Brown, the Transport Minister in the Scottish Parliament, who, when pressed recently in a debate with me on what would happen to UK civil service jobs in an independent Scotland, said:
“I was waiting for the day when someone from Labour came forward with a positive reason for independence and perhaps we’ve just heard it—a reduction in the number of civil servants in Scotland”.
I am afraid that if that lot have their way there will be many more public service job losses in Scotland.
We have heard what Labour is doing where Labour is in power. We have heard about what Labour is doing in West Dunbartonshire, in Fife, in Edinburgh, in Inverclyde and in Wales, and all those efforts are to be applauded. I also want to draw attention to the Glasgow Guarantee made by Scottish Labour in power in Glasgow city council, which has resulted in a 4.4% fall in the number of young people claiming JSA in the past two years. The real point here is to compare that achievement with that of the Minister and his Government colleagues, which is a 6.9% rise over the same period.
My hon. Friend the Member for West Dunbartonshire referred to what I can only liken to attempted bullying by the Scottish Government in respect of separation, and I think we all agree that such activity is reprehensible. Indeed, over the past few days Mr Salmond has been defending the right to free speech in the press while at the same time appearing hellbent on stifling it in the Scottish business world.
Many issues are hitting Scotland hard at this time, with 218,000 people out of work, a Work programme that does not work, a rising welfare bill, welfare cuts that will increase the demands on welfare, a lack of growth in the economy, 16 to 24-year-olds being condemned to a future on the dole, a growth in underemployment, rising energy costs, a fixation in the Scottish Government with separation, and a lack of investment from Holyrood in further education for our young people.
Anas Sarwar
My hon. Friend mentioned the fixation with independence. Is he aware of figures out this week that show that corporation tax in the Republic of Ireland is 12.5%, with unemployment at 15%, and in Northern Ireland the figures are 24% and 8% respectively? Does that not show that the SNP’s policy of cutting corporation tax is incoherent and does not guarantee jobs?
Gordon Banks
I agree wholeheartedly with my hon. Friend. There is a lot that the SNP says in Holyrood that does not bear true when put under the microscope.
The Governments in Holyrood and Westminster are not focusing on policies to address unemployment. They are too distracted with their own agendas of cuts and separation. That is why one in 10 Scots are working fewer hours than they would wish to, which is contributing to a rise in in-work poverty. It is why unemployment has increased by 3.3% since 2008, and it is why 80,000 people in Scotland have been unemployed for more than 12 months. It is also why, in the past year, long-term unemployment has risen by 3% in the UK but by 11% in Scotland, and it is why economic inactivity among disabled people stands at more than 49% in Scotland. That nearly half of all unemployed Scottish workers are aged 16 to 24 is a damning statistic, but neither the coalition nor Alex Salmond seems to be focusing on that as a major issue.
In light of those extremely worrying trends, the Governments in Westminster and Holyrood need to take positive action, and I want to make a brief remark about shovel-ready projects. We are all in favour of moving such projects into job creation, but if we do that in Scotland in the way that the Forth road bridge project was handled, with all the contracts being given to overseas companies, keeping people in work in Spain, Poland, Switzerland and Germany rather than in Scotland, there is something fundamentally wrong with the procurement process, as we have heard this morning.
I urge the Chancellor to get a grip of his welfare policies and to understand their impact on our economy, and to get a work programme that does what it says on the tin. The priorities of both Governments need to change from the narrow agenda of cuts and separation, and to focus on the real tragedies occurring in our cities, towns and villages. It is the Scottish people who can deliver growth into the Scottish economy if the Governments of Holyrood and Westminster provide them with the right tools and opportunities. To do anything less demonstrates that the priorities of the Governments are not those of the Scottish people.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
It is a pleasure to serve under your chairmanship, Ms Dorries. You are certainly the Member of Parliament my constituents most often ask me about, and I am sure they will be delighted to learn that you have chaired the debate today.
I congratulate the hon. Member for West Dunbartonshire (Gemma Doyle) on securing this important debate. Based on what has been said I feel that there might be little that we agree on, but I do agree on the importance of having a debate such as this here at Westminster, to focus on issues that are the responsibility of the UK Government, and also on the importance of Members from Scotland holding the Government to account for their policies and actions in Scotland.
I find it disappointing that the Scottish National party has not sought to contribute to this debate, other than through a few random interventions. I do not want to be in the position that the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) spoke about, of blaming the other Government—the Government in Scotland—for everything that is going wrong, which would be to adopt the reality of Alex Salmond’s “plan McB”: to claim credit for everything that is good and to blame the Westminster Government for everything that is bad.
Opposition Members, other than the hon. Member for Kilmarnock and Loudoun, to be fair, chose to use their contributions to blame both Governments for everything that is happening. As usual—I had no expectation otherwise—they took no responsibility whatever for the catastrophic state in which they left the UK economy when they left office in 2010. Indeed, we may hear once and for all an apology from the shadow Chancellor today for the state of the economy at that time, which would be good.
Mr Russell Brown
I recognise that the Minister and his colleagues are very good at talking about the mess that they were left, but will he share with the Chamber what the black hole was? What was that debt? If we remove from that debt what was provided to support the banks and the UK economy, how big really was that black hole?
David Mundell
There was a black hole because, for a significant period of time, the previous Government were spending more than they brought in. That is the reality, and the hon. Gentleman cannot pretend otherwise. Today we have heard various versions of the plan Labour now has to turn the economy around, but the core of that plan remains more spending, more borrowing and more debt—exactly the same prescription that brought the country to its current state.
Graeme Morrice
Is it not the case that the current Government are borrowing far in excess of what they are spending? Indeed, based on their original projections, they are borrowing substantially more than they anticipated.
Nadine Dorries (in the Chair)
Order. We are getting into a debate on the economy, rather than on unemployment in Scotland. Can we keep to the subject of the debate?
David Mundell
Indeed. I will leave the economy to my colleague the Chancellor, who will no doubt respond to the exact issue raised by the hon. Member for Livingston (Graeme Morrice).
Some important points have been raised, and hon. Members have taken the opportunity to highlight what is being done in their local authority areas. We have to recognise what an important role local government plays in taking forward the jobs agenda.
I am pleased to confirm the work of the Scottish Employability Forum. Although the title includes the word “employability,” the forum actually focuses on all employment issues, because as the hon. Member for Glasgow North (Ann McKechin) made clear in an intervention, things are not working as well as they could be for the Scottish Government in their partnerships with both local government and the UK Government. In fact, people in the Work programme in Scotland are being refused training, which is a great concern to us all.
Cathy Jamieson
I thank the Minister for confirming that the Scottish Employability Forum will consider all aspects of employment. Will he give us further information on any specific actions that that forum will take? When will the forum report, and when will it make recommendations on its outcomes?
David Mundell
The forum will meet for the first time early in the new year, and its prime focus will be to co-ordinate the different interests and to ensure that there is a seamless programme of support for people looking for work, thereby ensuring that they are neither passed around nor a victim of conflicting agendas. The forum has an important role to play, because it is quite clear that we have to bring together more close working.
I am concerned about a couple of issues that were raised.
David Mundell
No, I want to deal with the issue of Jillian McGovern and address the concerns raised by the hon. Member for Dundee West (Jim McGovern) about the Department for Work and Pensions. I would be pleased to hear more about what did not happen in that regard, because I have a high regard for the DWP’s work in Scotland. Every single day in Scotland, the DWP deals with an average of 1,500 new job vacancies; conducts some 7,000 jobcentre adviser interviews; receives more than 82,000 searches for Jobcentre Plus job vacancies; and helps an average of more than 1,000 people move into work. The DWP is playing an important role, and if any Member has examples of that not working for their constituents, we want to know about them.
I have asked for a report on why Dundee city council appears at the very bottom of the report on the Work programme, and it is important to understand that, but I want to try to dispel two myths. The shadow Minister sought to perpetuate the myth that, somehow, the youth unemployment issues are a direct result of this Government’s policies. Youth unemployment is a serious issue about which we should all be concerned. As the right hon. Member for South Shields (David Miliband) has said, youth unemployment started to become a problem in this country in 2004; it is not a product of the current Government. We all have to do more to work with employers to encourage them to take on young people.
David Mundell
No, I want to conclude this point, because it is very important. Youth unemployment is a scourge, and we all have a part to play in dealing with it. There is a serious attitudinal problem among employers about taking on young people. They think that if they take on a young person—this is particularly the case with small and medium-sized businesses—that will create hassle and difficulty for them. We have to feed back to them that taking on a young person is a positive thing. We have to encourage employers to take a more positive attitude to bringing young people into work.
Gemma Doyle
I am conscious that the Minister does not have much time, but I am desperately worried that we are not getting to grips with the issues that have been raised this morning. He has been challenged directly about no Scotland Office Minister being involved in any of the key Cabinet Committees on the economy and welfare reform. Will he respond to that point? Will he give a commitment that he will make representations that a Scotland Office Minister should be involved in those Cabinet Committees?
David Mundell
The hon. Lady’s colleague, the shadow Secretary of State, has already written to the Secretary of State on those issues, and the shadow Secretary of State was given a full reply, which I am sure she will share with the hon. Lady.
I want to use my remaining time to respond to the issues raised about the Work programme. There has been a misrepresentation of it, which I hope is not deliberate—I am sure it is not just for the purposes of the template press releases that have been put out by the Labour party across Scotland. It is simply too early to judge whether the Work programme is succeeding against its objectives, because it is a two-year programme that has been running for just about a year.
“Outcomes” is a defined term in the report on the Work programme, and it means that a work provider has been paid for someone being in work for six months. It does not mean that those are the only people who have gone into work through the Work programme. In fact, the bulk of the people who are in the process are still on the programme, because they have not been able to complete the six-month period. There has been an attempt to distort the figures to decry the Work programme, and I would be disappointed if any Member present took any pleasure in the idea that the Work programme could somehow be described as a failure. It cannot, because it is not a failure. The figures are not available to make the sort of judgment that Opposition Members leapt to today.
Police and Crime Commissioners
(11 years, 5 months ago)
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Mr Graham Allen (Nottingham North) (Lab)
It is nice to be under your chairmanship for the first time, Ms Dorries. I begin this debate on police commissioners’ role in early intervention by congratulating all the police and crime commissioners elected last month. They have an historic role, and they bring a long-overdue democratic element to policing that will strengthen both policing and democracy over time. I hope that by the next police commissioner elections, they will be an even more important and legitimate part of our society, particularly if those elections are held at a sensible time of year with properly resourced freepost election addresses and without the low-level point-scoring that characterised this year’s campaign.
Central to that mission is the clarity and relevance of the vision for police commissioners, and that is what I will address today. My first specific ask for the Minister is to accept my invitation to deliver the keynote address at a House of Commons conference of all police and crime commissioners, discussing how they can help stop crime through early intervention. The conference follows on from the highly successful early intervention and crime conference opened by the Home Secretary last March.
We need our police commissioners to hammer home the two key principles of modern policing: partnership and prevention. Those two principles come together in early intervention. The police have long since realised that they cannot tackle crime on their own. They need effective partnership, and police commissioners are the perfect people to deliver that. One of the smarter breed of top cops, John Carnochan, former head of homicide in Glasgow, says that 1,000 extra police officers would be great, but 1,000 extra health visitors would be clever. He knows that working with health, education, the third sector and other partners to stop crime before it happens—rather than just picking up the pieces afterwards —is the future of policing.
The new police commissioners could be the midwives of a cultural change in policing from late intervention to early and pre-emptive intervention. The police will always have the task of reacting to crime, but sustained crime prevention and reduction requires a strategy that unites the police with all the other agencies, whether public, private, third sector or business, that can help tackle the behaviours and lifestyles that breed antisocial behaviour and crime.
Talk to any experienced police officer, from the local bobby to the chief constable, and they will tell you the same stories about the families that cause trouble and the newborn baby destined to carry on the tradition who will come their way in 12, 14 or 16 years’ time. Many of us—teachers, health workers, councillors and MPs—have the same experience. We all know that if we were not so busy firefighting, the best time to sort out the problem would be in the first few years of life. That has been common sense for many centuries, but it is now confirmed by a robust scientific evidence base.
Bessel van der Kolk, writing in the US Psychiatric Annals, said that according to his research, people with childhood histories of trauma, abuse and neglect make up almost the entire criminal population. More than one third of the 100,000 most hardened criminals in the UK were in care as children, and half have no school qualifications at all. The Centre for Mental Health tells me that six out of 10 child offenders have speech and communication problems. Tim Bull of the Brook Trust reinforces that tackling the trauma of sexual abuse would greatly affect offending behaviour later in life. I also agree strongly with Chief Superintendent Irene Curtis, president-elect of the Police Superintendents Association of England and Wales, who said:
“I see the new role of police and crime commissioners as an opportunity for someone to have an overview of the increasing demands in relation to community safety in its widest sense that face all public sector organisations at a local level and to look for innovative and creative, sustainable solutions.”
If children acquire a bedrock of basic social and emotional skills in the first three years of life, they have a better chance of being successful in the rest of life, achieving at school, in further education and in work, developing good physical and mental health, making good lifestyle choices and, above all, forming relationships that lead to becoming great parents or carers for the next generation. For all those reasons, police commissioners and police officers know that early intervention programmes giving a good start in the first few years of life are the best possible method of preventing future criminal behaviour.
That was the central message of the two reports on early intervention that I wrote for Her Majesty’s Government last year, and it is why I then wrote to all police and crime commissioner candidates challenging them to adopt early intervention policies as the unique selling point in their relationship with the police. Instead of treading on operational toes or seeking populism and publicity, police commissioners could use their skills, their independence and their role to bring a strategic and long-term view to reducing crime, which would be welcomed by police officers, victims and taxpayers.
I have been pleasantly surprised by the positive response that this debate has generated already. The Revolving Doors Agency reminded me that a quarter of young offenders are themselves fathers, perpetuating an intergenerational cycle that must be broken. Andrew Balchin, the communities director in Wakefield, referred to “bobbies and babies” initiatives in which police community support officers help parents keep children from offending. Councillor Maxi Martin of Merton said that “partnership, partnership, partnership” is everything. Guy Mason reminded me of Save the Children’s families and schools together programme, which is supported by Morrisons. Jean Gross talked about the social and emotional aspects of learning, or SEAL, programme used in every primary class in Nottingham between ages five and 11. Marion Bennathan of the Nurture Group Network highlighted the link between absenteeism at school and crime. Effective information sharing between partners was mentioned by Neal Kieran, principal community protection officer in St Albans.
Many other practical points have been made. The Local Government Association and the Children’s Society have taken an interest in this debate, because they see that police commissioners can play a role in getting to the source of crime rather than waiting until 15, 16 or 20 years later to pick up the pieces expensively. That demonstrates to me that massive expertise is available if Government can encourage police commissioners to use it.
Many police commissioners to whom I have spoken are well aware of this agenda. They range across the parties and include Staffordshire’s Matthew Ellis, Nottinghamshire’s Paddy Tipping, Nick Alston of Essex and Winston Roddick of North Wales, to name but a few. Police commissioners are perfectly positioned to explore the role of policy making based on evidence of what works, as well as social finance and payment by results in reducing crime.
We pioneered that approach with the police and other partners in developing Nottingham as the first early intervention city. Enlightened, forward-thinking police officers became the driving force of the new partnership. Alan Given, Shaun Beebe, Peter Moyes and many others were at the forefront of the movement. At one point, local police were prepared to signal their commitment to stopping crime before it started by financially supporting local health visitors. We then brought the family nurse partnership programme to Nottingham, giving more than 100 teen mums and their babies a dedicated health visitor and the social and emotional skills to make a bright future for themselves. It cost the same amount of money as banging up three 16-year-olds in a secure unit for a year, two of whom, incidentally will go on to reoffend. That sort of investment in cutting the supply of dysfunction and criminality is a no-brainer. I ask the police commissioners to join the rest of us in explaining this to the Treasury as the biggest deficit reduction program it could dream of. Billions of pounds that we currently spend on late intervention could be saved by small investments early in life, to prevent people from going wrong.
The police commissioners should follow the words of Sir Robert Peel, who wisely put preventing crime first in the list when creating the Metropolitan police, even ahead of catching offenders. This is going further than police commissioners lobbying to ensure that those on the edges of the justice system or at risk of offending receive support, which they should, from mental health, social care, drug and alcohol and employment services, important as those things are. This deeper step is about pre-emption: stopping crime before it starts. With the right early intervention policies, we can forestall many of the mental and social problems that are factors in generating antisocial behaviour and crime later in life. Cut off the supply. Tackle the causes, not just the symptoms. Yes, swat mosquitoes, but drain the swamp, too.
Early intervention can break the cycle of dysfunction that makes some families nurseries for offending. It can do this much more cheaply and reliably than intervening later and can generate lasting savings for local budgets, and lasting gains in the quality of life for local neighbourhoods.
Police commissioners using early intervention to attack the causes of crime at the source will also unlock, with tiny investments, a huge new stream of money. We are already seeing payback from investment in social and emotional programmes; those involving young offenders are massively reducing costly reoffending. Such programmes —for example, at Peterborough and Doncaster prisons— are also the pioneers of social finance and innovative bond issues.
I was recently in New York, where the deputy mayor made an innovative agreement with Goldman Sachs and a provider of social and emotional development. This reduced recidivism in 16 to 18-year-olds, generated a profit for Goldman and may ultimately result in a money-saving wing or prison closure.
Police commissioners should, in their oversight of policing budgets, work with institutions like the Early Intervention Foundation and others to insist that every police service has, as standard, such long-sighted invest-to-save programmes. That will create an income stream that the police will be pleased to receive year after year, as the savings accumulate.
Doing this locally is difficult. Sharing the costs and the benefits is the key to such innovative investment. If a health visitor can help prevent the expensive costs of policing and criminal justice further down the line, police commissioners should start working with local health services to plan for the spending and saving from prevention and early intervention. Local authorities, which are now taking on new responsibilities for public health, need to join these new collective financial arrangements, to invest a little bit now and redistribute transparently the funds that are generated by stopping crime early. Building effective partnerships with education and health will enable joint spending to take place early on, followed by redistribution of the big savings to all partners later.
My second ask of the Minister is that he encourages examples of early intervention and promotes it by recruiting just 10 of our willing police commissioners and linking them with those who have the expertise to provide evidence-based programmes, the monetisation of outcomes and the sometimes complicated contractual partnership arrangements—let us try to get some standardisation into the programmes to save a lot of money—to help us make such arrangements an everyday feature of policing by the end of the first term of the first police commissioners.
This is not hopeful speculation; this is happening now. Early intervention has proven results. I mentioned attaching health visitors to teenage mothers, as is done in Nottingham. We draw on a 30-year evidence base from the family nurse partnership and see reduced crime, better job prospects and educational achievement. We introduced the family intervention project, which has seen 100% of its clients complying with community sentences while engaged on the programme. These are not just the noisy neighbours; they are the most difficult families in our city. There has been a 56% improvement in children’s attendance at school. There have been big gains. Police commissioners could also link with the new troubled families initiative and make self-financing and, indeed, profit-making deals that could reduce crime as well as harvest dividends for reinvestment in policing.
Again, if the Minister and the Home Office wish to take this further, those of us involved in early intervention would be happy to help with the nuts and bolts.
In a typically British way, this important extension of democracy has had a difficult birth. However, police commissioners should put that behind them. They now have it within their power not only to give voice to ordinary people, but to make a strategic, lasting contribution to making our society a safer and happier place. If they use their position creatively to become champions of early intervention and argue for effective crime-reduction programmes that make us safer and generate a return to the taxpayer, they will demonstrate to all those who did not vote last week that there is a clear reason to do so next time.
The Minister of State, Home Department (Mr Jeremy Browne)
It is a pleasure for all hon. Members to see you safely back in our parliamentary bosom, Ms Dorries.
As always, I congratulate the hon. Member for Nottingham North (Mr Allen), whom for the purposes of this debate I call my hon. Friend, on his sterling and sustained work on early intervention. To summarise what I am going to say in the next 10 to 12 minutes, I agree with him. He is right to give this issue his attention. The evidence is compelling. There are some encouraging long-term crime trends in Britain and other countries in the western world, but those will only be sustained by having a long-term analysis of and understanding about what causes crime, and with solutions to those causes that drive down the figures in future.
The hon. Gentleman mentioned police and crime commissioners. People abbreviate that, calling them police commissioners, and in doing so risk overlooking an important component of the commissioners’ work, which is the “and crime” dimension. They are not just the chairman of the local police force, organising its budgets and recruitment practices. They are also there to take a view about how to reduce crime in the area that they are responsible for, which may mean short-term interventions with immediate crime problems—I hope that they will do that—and about having a broader, longer-term view about the causes of crime and what they can do to bring about positive changes.
I will talk a little bit about police and crime commissioners, but first let me illustrate why early intervention is so important and then talk briefly about some measures that we are already putting place, which could work either with the commissioners or standing on their own, but are nevertheless important in terms of the broader issue that the hon. Gentleman brings to our attention.
On the benefits of early intervention, I want to bring two brief studies to the attention of the House. One was an American study that found that children growing up in violent households had a seven times higher chance of developing alcohol problems than children who did not suffer such adverse experiences at home in their formative years; the chance of developing illicit drug use problems was four and a half times higher, and the chance of committing violence was nearly nine times higher. There are causal links, and the likelihood of children whose first few years are the most difficult having such problems is not just 5% or 10% greater, but hundreds per cent. greater. The second study was done in the United Kingdom, and it showed that children who were identified as being at risk at the age of three had two and a half times more criminal convictions by the time they turned 21 than those not so identified.
The value of what the hon. Gentleman has brought to our attention is obvious, and the benefits are felt sooner than some people might realise in some contexts, such as truanting from school and petty—entry-level, if you like—criminality among relatively young children. We are not necessarily talking about a 20 or even 15-year time lag; there might be a much shorter time lag before the benefits of today’s early intervention can be seen.
The Government have introduced several measures that we hope will have a beneficial impact. We are spending —if the different funds are aggregated—£2.3 billion this year, £2.4 billion next year and £2.5 billion the year after on the early intervention grant. I should not anticipate the autumn statement, which will happen in just over an hour, but I suspect that not every Government budget will receive such year-on-year increases. However, we are keen to sustain funding for the early intervention grant. The Government are also extending entitlement to free early education to two-year-olds from next year, so that more children will be given opportunities at that formative stage. A separate sum of £448 million has been allocated for the troubled families programme, to ensure that we have the right multi-agency hands-on approach for the 120,000 families around the country who have been identified as in the greatest difficulty. I know from first-hand experience, because I have sat in on the meetings, that the Prime Minister takes a direct interest in that initiative, and that it has the support of many Departments. It is hugely important for the life opportunities and prospects of the children of those families that it should succeed; and it is also important in relation to the issue that we are debating—the impact on crime in the future.
The family nurse partnership programme is a scheme to help, particularly, vulnerable teenage mothers who perhaps do not have the support network that they need in their family or community to give their children the best start in life. We are expanding that, and thousands of young women will experience the benefits of the programme in the next three years. That is intended to ensure that children have the right early upbringing—that they are raised well and have the right diet—to stand them in good stead.
There are other schemes being run in different Departments. We hope that many of the changes in the Department for Education will be beneficial for attendance rates and ways of dealing with children who have behavioural problems, and will improve performance and exam attainment. There is a quite close correlation between success at school and likely propensity to criminality either while the child should be at school or later. The link is not an absolute one: some high-achieving children go on to be criminal, and some low-achieving ones do not; but there is a correlation. On the employment side, there is also a link between worklessness and a propensity to a life of criminality, and we are trying to do more to help young people to get apprenticeships, for example. The Government funded 360,000 apprenticeships last year, and have also spent £30 million on the innovation fund, which supports about 17,000 of the most vulnerable young people over a three-year period. I have mentioned those things because I would not want the House to form the impression that the area in question is receiving no attention. Senior and Cabinet-level Ministers, including in the Home Office—the Secretary of State for Work and Pensions is another good example—are trying to do more about the problems that the hon. Gentleman has raised.
The hon. Gentleman discussed police and crime commissioners and I want to spend the last few minutes of my speech on that subject. Their purpose is to give the work of the police greater public accountability, but also to give a sense of leadership, in public communications terms, to policing in each community. I hope that they will become important figureheads and help to give impetus to improvements in their police forces, but also drive a public debate within communities about what can be done to tackle the sorts of crime that MPs hear about every day—lower-level crime, vandalism, antisocial behaviour, late-night noise and graffiti. I hope that they will be interested in all those issues, as well as in more serious crimes such as domestic violence and burglary.
I hope that the commissioners will see—and this is the purpose of the debate—the wider benefits of working with other agencies besides the police. The police in my constituency of Taunton Deane are very responsive in working with schools, voluntary community groups, neighbourhood watch schemes, churches, cadets and scout groups. All those groups can play an important role. Local businesses are also often willing to support initiatives that reduce local crime and help with early intervention. I hope that PCCs will be imaginative about their use of budgets and time, so that as well as working with the police they can encourage the police and others to work together for the benefit of the community.
The hon. Gentleman raised two specific points—two “asks”, I think he said. The first one was easy, when he was good enough to ask me whether I would speak at an event he is arranging with police and crime commissioners. I would be delighted to speak at such an event and hope that by doing so I give force and the Government’s backing to exactly the type of activity that he brings to our attention. Diary permitting, obviously, I say yes, thank you, to that invitation.
The second point was about bringing together a group of police and crime commissioners. I think that the hon. Gentleman suggested a group of 10. I am interested in that, and would like to consider what we could do and how officials might want to organise it. Of course, the Home Office must do a difficult balancing act: we cannot tell police forces that we are letting go and that we want police and crime commissioners with their direct electoral mandate to make decisions about their time and budgets in their area and then, as soon as we have said it, tell them that we are going to organise lots of events where we will tell them how to organise their affairs. We want to get the right balance, and we want them to take the leadership role. However, the Home Office Ministers met all the police and crime commissioners on Monday to talk through some of the programme and the activities that we have in the Home Office, to introduce them to some of the ideas. I see huge virtue in sharing early intervention best practice, particularly with police and crime commissioners who are interested. I am keen to work with the hon. Gentleman on ideas of that type, and on other projects, to make further progress on early intervention.
Regional Newspapers
(11 years, 5 months ago)
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Mr Jim Hood (in the Chair)
Members will have noticed the new clock displays in the Chamber. As before, the top display is the current time and the bottom display, when a speech is not being timed, will show the time it started. If it becomes necessary to introduce a speech limit, the bottom display will change, to show the time remaining to the Member who currently has the Floor. As in the main Chamber, the display can now award an extra minute for the first two interventions in a speech.
The first debate this afternoon is on the future of regional newspapers. I call Andrew Griffiths.
Andrew Griffiths (Burton) (Con)
Thank you, Mr Hood. It is a great pleasure to be serving under your chairmanship today.
I welcome all those colleagues who have taken the time and trouble to take part in this important debate on this busy day. I think that is because we all recognise the importance of our local newspapers in the communities that we represent. We recognise the value and contribution that a daily or weekly newspaper makes to the lives of the people we seek to serve.
The debate is topical because of two important developments in the past few days. First, as colleagues understand, this week the House has been debating the consequences of the Leveson report. None of us can fail to be appalled by the revelations that came out of the phone-hacking inquiries and by the disreputable activities of some members of the journalist profession. It is only right for us to consider the future implications for our free press. What was clear from the report, however, was that the one sector of the media industry that was free from blame was our regional and local newspapers.
Mr Lee Scott (Ilford North) (Con)
I congratulate my hon. Friend on securing the debate. Does he agree that it would be totally wrong for the local press which are not at fault for anything—as acknowledged in the Leveson report—to be punished for the fault of other, far larger newspapers of national consequence? The local press have done nothing wrong whatever.
Andrew Griffiths
I thank my hon. Friend for that important intervention and agree with him wholeheartedly, because it is essential that our regional press, which are under the greatest pressure, should not be burdened with expensive and difficult regulation, and the finger of blame should not be pointed at them. As Justice Leveson points out, the regional press are free from such accusations. I draw attention to what he says in the report:
“In relation to regional and local newspapers, I do not make a specific recommendation but I suggest that the Government should look urgently as what action it might be able take to help safeguard the ongoing viability of this much valued and important part of the British press. It is clear to me that local, high-quality and trusted newspapers are good for our communities, our identity and our democracy and play an important social role.”
He goes on to say, in the executive summary, that many local and regional newspapers
“are no longer financially viable and they are all under enormous pressure as they strive to re-write the business model necessary for survival. Yet their demise would be a huge setback for communities (where they report on local politics, occurrences in the local courts, local events, local sports and the like) and would be a real loss for our democracy.”
That is why it is so important for us to have the debate today and why we agree the importance of the Government focusing on providing a sustainable future for our regional press.
Rehman Chishti (Gillingham and Rainham) (Con)
I congratulate my hon. Friend on securing this important debate. We have touched on the Leveson report and certain comments from it. May I refer to another comment by Lord Justice Leveson? He said that the contribution of regional newspapers to local life is “truly without parallel”. In my constituency, we have the Kent Messenger and the Medway Messenger, with circulation of 370,000 a week and 270,000 hits on the internet site, clearly showing how important their contribution is.
Andrew Griffiths
My hon. Friend wins the prize for being the first Member to mention his local newspaper. For anyone who was having a sweep, we were about five minutes into this important debate at the first name check. However, I agree wholeheartedly with him.
The second development that I draw colleagues’ attention to is the announcement in the past few days of the amalgamation of Local World, a new joint venture that we hope will be part of the solution for the future of our regional newspapers. As colleagues know, it is a joint venture with the Daily Mail group’s Northcliffe Media and includes investment from Trinity Mirror. The new company will contain 100 regional newspapers and 60 websites, which is a massive development in the situation of our regional newspapers. This is the first opportunity for the Minister to put on record his thoughts on the future effect of that and on what more needs to be done in the wake of the announcement.
We have to recognise that our regional newspapers are in a pretty poor state. They are under pressure in a way that national newspapers do not suffer. We all recognise that the print media generally are having a tough time, because of the internet and the change in how people are viewing their media, but regional newspapers are particularly hard hit. Let us look at the figures. Advertising and circulation revenue for regional newspapers in 2004 was £3.113 billion; six years later, in 2010, that figure had fallen to £1.599 billion. The number of regional daily newspapers has fallen from 109 in 2002 to only 84 today. Two hundred regional newspapers, including dailies and weeklies, have been lost in the past decade. We all recognise that the loss of a local newspaper is a loss of an important part of our communities.
We all bemoan the loss of a post office or the local pub—I declare an interest as the chair of the all-party parliamentary beer group—but we should bemoan the loss of our local newspapers in the same way, because they are the key to information within our communities.
Karen Lumley (Redditch) (Con)
I thank my hon. Friend for securing the debate. I obviously have to mention the Redditch Standard and the Redditch Advertiser in my constituency, which employ local journalists with great knowledge of our area. For example, we have a hospital threatened with closure, and local newspapers allow people to have their say. Does he agree that if we are serious about local democracy and keeping it, we must help our local press?
Andrew Griffiths
I am sure that my hon. Friend appears regularly in her local newspapers because she makes important contributions such as that. She touches on two important points: democracy, which I will come on to later; and employment. Not only do local newspapers employ a number of people in our constituencies, they are also the training or breeding grounds for the national journalists of tomorrow. We can all point to august journalists, people with a fine career in journalism, who have earned their spurs, done their apprenticeship and learned the trade in regional newspapers—covering the parish council, the village fête and the flower show. This is a good training ground to understand grass-roots communities and grass-roots’ politics. We lose that at our perils, although losing it we are. Since January 2002, we have lost 13.2% of our local newspapers, and I do not want to lose any more. My hon. Friend the Member for Redditch (Karen Lumley) referred to democracy. We all recognise the important role that local newspapers play in holding local authorities and public figures to account for their decisions.
One of the key thrusts of the Government’s agenda is localism. We want to devolve power down to the lowest possible level. We want to empower local communities, through local councils, to make decisions that best affect their communities. If we are to hand down that responsibility, and if we are to hand down that power to elected councillors and officials, such as police commissioners, it is even more important that we have the right checks and balances in place to hold them to account. It is even more important that people scrutinise the work of our councils and police commissioners to ensure that local people are properly represented, that they get the government they deserve, and that local money is spent effectively. How can that be done if local reporters do not attend council meetings?
Mr Scott
Does my hon. Friend agree that one of the biggest assets of a local press—I feel duty-bound to mention the Ilford Recorder and the Wanstead and Woodford Guardian in which hon. Members may read my column tomorrow—is that they print facts, not with glamour or spin, but just the facts of what happens, whether a flower show, a council meeting or any other event?
Andrew Griffiths
I will dash to my computer tomorrow morning to find my hon. Friend’s column online. He is absolutely right. Lord Justice Leveson said in his report that although there are sometimes allegations of inaccuracy in local media, they do not have the same political allegiances, and they report both sides of the argument. I am sure that all hon. Members can point to stories that they disagree with, but people cannot hide from their local newspapers, because they have phone numbers and know where people live, and can hold them to account for decisions that affect their readership and our constituents. That is hugely important to us as politicians.
Mr Andrew Turner (Isle of Wight) (Con)
Is my hon. Friend aware of the distinction between local and regional newspapers, and will he say a bit more for my benefit about what is happening at regional level? My local newspaper, the Isle of Wight County Press, is absolutely fine and is widely read in the county, but what is happening with regional newspapers?
Andrew Griffiths
I am sorry to tell my hon. Friend that the picture is the same for local and regional newspapers. They are all suffering loss of revenue, for various reasons. The internet has had an impact on advertising revenue, as has the slow-down in the employment market, the rise in job websites, and the loss of advertising for car sales and estate agents. All that is adding to the severe drop in income for regional newspapers. We must see what we can do to make them more sustainable.
The free weekly newspapers are suffering most, because they are feeling the loss of advertising revenue much more than those that receive a contribution from people who pay for newspapers. There has been some stability in income in recent months, but much of it is because newspapers have been forced to raise their prices. Readership continues to fall, and at the moment newspapers are bridging the gap, but that is not sustainable in the long term, and we must see what we can do to make them sustainable.
Rehman Chishti
Does my hon. Friend agree that some newspapers have diversified, such as the Kent Messenger, which has an internet page that receives 292,000 clicks a month? KMFM radio is also available, and if local newspapers are to survive in the long term, they must diversify and attract different audiences. Some are not doing that.
Mr Jim Hood (in the Chair)
Order. Will hon. Members make their interventions shorter?
Andrew Griffiths
Thank you, Mr Hood, for that advice. My hon. Friend is absolutely right. Newspapers are businesses, and are run by business people. They recognise that they must diversify, and they are looking for alternative income and revenue streams. All our newspapers now have internet sites, and are looking at how to spread their contents on as many platforms as possible. I hope that the Local World venture will help in that objective, but the reality is that advertising revenue through the internet is much lower than what can be expected through the printed medium, and that is disappointing for the many newspapers that have invested heavily in their online presence and advertising. They are competing with a whole host of different bodies, and competing with advertising on Google, Yahoo and other providers. It is difficult for them to compete.
The problem is not a UK phenomenon. The Newspaper Association of America says that industry losses account for some £500 million in a half year, which is offset by only a £20 million increase in online revenue. That shows the position that our newspapers are in. They are trying to be good businesses, and looking for new markets, but those new markets have much smaller margins and revenue income. We must look at what we can do.
I touched briefly on democracy. We all recognise how much more difficult it would be to communicate with our constituents without a local newspaper to get our message across. It is a case of, “If it didn’t exist, we’d have to invent it.” We must look at the implications for us as politicians and as the Government if we lose this important communication tool. I have a hardy band of deliverers in Burton, but my ability to communicate with my constituents would be vastly reduced if I lost my local newspapers, and I would be remiss if I did not mention the Burton Mail. I am lucky to have such a great newspaper. It is a daily newspaper, and run by a fantastic editor, Mr Kevin Booth. I am also lucky to have three weekly newspapers, the Uttoxeter Post and Times, the Uttoxeter Echo and the Uttoxeter Advertiser. Strangely, they all serve Uttoxeter in my constituency.
Those newspapers, particularly the Burton Mail, serve another purpose. They are local campaigning tools. They are the voice for the local community. They do not just transmit information to my constituents; they take up causes on their behalf. The Burton Mail has run a whole host of campaigns on issues such as knife crime, making the town centre safer, and keeping the Margaret Stanhope mental health centre in my constituency open. A plethora of great campaigns have galvanised the community in the way that a Facebook page simply cannot. If we lose our newspapers’ campaigning ability, the voice of our communities will be diminished, and we should care deeply about that if we care about our constituents.
Our local newspapers are the first point of call for people to find information. Although my local councils—East Staffordshire borough council and Staffordshire county council—have fantastic websites, Twitter feeds and Facebook accounts, to try to communicate with the people who pay council tax, those people do not visit the websites daily to look for information, whereas local newspapers are such a repository of information. I said earlier that if we did not have them, we would have to reinvent them.
The Government must realise the importance of our local newspapers in communicating messages to the country. The Government advertising budget is under pressure. We recognise that we must make serious savings, and the Government are looking at communicating through new media, but many of my constituents are older people. Although we have a large number of silver surfers in Burton, many people still do not use the internet, Twitter, or Facebook, and turn to local newspapers for information. If we lose that, it will be to all our detriment.
The Government need to look at what more we can do. I have come up with the phrase “community capital”, and I think there is some community value in what our local newspapers do. In the same way that we support post offices through Government initiatives for the provision of services, and the voluntary sector through the Big Society Bank and investment in voluntary services, we should look at supporting our local newspapers to ensure that that community capital is not lost.
I point to two things. First, I recognise that the Government have taken some steps on tackling the issue of council newspapers. We have all seen the growth of free local council newspapers that go through doors at quite some expense, and my right hon. Friend and chum the Secretary of State for Communities and Local Government has done a great deal to try and rein in the worst excesses of those councils. However, we are still seeing some councils, such as Cardiff city council, spend huge amounts of money. A newspaper is produced there 13 times a year at a cost of some £33 million to the taxpayer. Is that a good use of council tax payers’ money, or should we be looking at what we can do to support our local newspapers?
Secondly, I touch on the issue of Department for Transport notices. A consultation ended earlier this year, as the Minister will know, on the DFT and its use of advertising notices in our local newspapers to ensure that local residents understand properly what is going on with the transport network in our constituencies. Were that important income revenue to be lost to local newspapers, I have absolutely no doubt that it would lead to the loss of journalists and tip some of our weaker local newspapers, which might disappear for ever, over the edge.
I am fast coming to the end of the time that I have to speak.
Andrew Griffiths
I thank the Minister for demanding more, but sadly no one behind me is saying the same.
I know that the Minister is a champion for local newspapers. I have seen the number of times that he has appeared, peering out from the pages of the Wantage and Grove Herald, and I know how he supports his local newspapers. However, although he is responsible for this issue in his Department, we need to look at the wider landscape and what the Government can do to support local newspapers, if we are serious about a sustainable future for them. I urge him to look at what he can do to get a council of war together with other Departments. Let us look at what we can do with the Department for Communities and Local Government and the Cabinet Office, in relation to the big society, and at what we are doing with Departments such as the Department for Transport. Let us get all those Departments together and see how we can maximise the benefit of our local newspapers.
I am a Conservative and I hate to use the word “subsidy”—I do not use that word lightly—but there are ways in which the Government can do more to support, rather than subsidise, our local newspapers. We have to look innovatively at how we can channel Government activity and use our local newspapers to their benefit and that of Government.
Trust is hugely important. As we have seen in recent weeks, although Twitter is a fantastic vehicle for getting information out, it is also hugely unreliable. We have seen the implications that that has had for people who have been thrust into the media spotlight through no fault of their own. Local newspapers are trusted in a way that no other form of information is. We as a Government support the BBC, local television and Channel 4 through various mechanisms, and it is important for us to begin to re-examine how we support our local newspapers to ensure that they continue to hold us as politicians to account, continue to be champions for their local communities, and continue to support our local communities in achieving all that they can.
John McDonnell (Hayes and Harlington) (Lab)
I congratulate the hon. Member for Burton (Andrew Griffiths) on securing the debate and on the way in which he has introduced it. He referred to Leveson, and it is worth repeating that Leveson said that local papers’
“contribution to local life is truly without parallel…their demise would be a huge setback for communities
and
“a real loss for our democracy”.
Their demise has taken place before our eyes—that is the problem.
Let me give the figures from the National Union of Journalists—I am the secretary of the NUJ parliamentary group and my hon. Friend the Member for Great Grimsby (Austin Mitchell) is the chair. We have been engaged in debates such as this for some time and things have got worse, not better. Over the past seven years, since we had one of our earliest debates, 20% of the UK’s local newspapers have closed. We have lost 240 titles and at the moment, we are fighting on a range of fronts. The Press Association has been closing its regional lobby service and making journalists redundant. We have tabled early-day motion 715, which exposes what is happening at the Press Association, and I invite Members to sign it.
At the moment, Johnston Press is trawling for redundancies of more than 50 posts, and the NUJ has been denied collective consultation on the cuts so far. That is not the sort of commitment we were given by some proprietors last year, who said that there would at least be a dialogue with their staff about what was happening in their companies. Trinity Mirror has just announced 75 job cuts, amounting to an 18.75% cut of its editorial work force. Interestingly enough, the company, while it is sacking its own staff, has bought a 20% stake in David Montgomery’s Local World, but it will not be putting its regional or local papers into that operation. The Daily Mail and General Trust has shed about a quarter of its work force of 3,000 since 2010 and it has announced a further 13% cut in regional editorial costs this year. The number of people employed at Northcliffe stood at 2,450 in 2012, compared with 3,130 in October 2010.
The jobs are going. We have been tabling early-day motions and have been engaged in discussions with the Minister and the previous Government about how we tackle the issue. The main concern is that the service is being degraded at a local level. We have done a survey of local NUJ representatives on the ground, and I will quote some of the things that have come back. From the Huddersfield Daily Examiner, the NUJ representative reported:
“Each reporter was supposed to spend half a day on their patch looking for stories. The idea was abandoned two years ago owing to staff shortages.”
The rep from Birmingham Post and Mail said:
“Staff are increasingly going for easy stories—those which can be filed and concluded as quickly and with little fuss as possible, from press releases and announcements”.
That is not the nature of the local press that we have come to admire. The rep from the Coventry Telegraph said:
“Loss of staff photographers and their replacement with freelancers and heavier reliance on reporter-supplied photos and submitted pictures likely to lead to deterioration in quality of pictures. Fewer reporters for all titles will also affect content and quality.”
A survey of NUJ members at Newsquest Essex north found that staff had worked an extra day a fortnight voluntarily. A letter to the management said:
“Editorial staff has been cut by a third in the past three years and the remaining staff have undertaken more work than ever.”
An NUJ rep from the north-west said:
“Reporters are less likely to get out of the office to see contacts and have less time on individual stories, developing and investigating them. Subs have less time to check stories, design pages and have less time spent on proofing pages.”
That is what we have witnessed, and that is the report back from the front about the seriousness of the cuts that have taken place. What is galling for staff is that in addition to the cuts, they have had pay cuts and pay freezes during the past 10 years, but at the same time some of the management wages have been astounding.
Let me give some examples. Paul Davidson, chief executive of the Newsquest newspaper group, received £598,441 in salary last year. The figures, for 2011, show that directors of Newsquest were awarded an additional £881,000 in “share-based payments”. It just goes on. Craig Dubow, head of the US parent company Gannett Company, Inc., resigned in 2011 and walked off with a £23 million golden handshake. It is not that the money is not there. What has happened over a long period is that there has been profiteering in the industry, which has resulted in the cutbacks that we are suffering now. That has put in jeopardy these community assets—that is what they are. The hon. Member for Burton is right about that. I wish they had been so designated so in the Localism Act 2011, because they are community assets that we all value.
Other activities need to be put on the record. There have been tax scams in the industry. A tax tribunal relating to Iliffe News and Media was told how that group had drawn up a tax avoidance scheme by assigning to its parent company the unregistered newspaper mastheads used by its subsidiaries, which were then charged as a lump sum payment, to downplay its successful financial position. That was exposed at a tribunal. The company lost the case. It was exposed that it sought a tax deduction for payments amounting to £51.5 million. That is an absolute scandal. In many ways, the management of the industry has brought about its own demise. That needs to be put on the record and made straight.
We now need to look to the future. Montgomery has bought out Northcliffe Media and Iliffe News and Media in what amounted, I think, to a fire sale of those assets, but the staff of those groups are seeking to ensure that there is a long-term plan for security. Unfortunately, the negotiations on the TUPE transfer are being conducted at the moment at breakneck pace and it is very difficult for the staff to obtain clear answers to the many questions that are being put about contractual terms, long-term security and, in particular, the fate of their pension entitlements. What could be seen as a good initiative could falter because of the failure to engage with other stakeholders and, in particular, with the staff via the NUJ.
We can report similar experiences elsewhere. There is the outsourcing from Media Scotland-Trinity Mirror. Two thousand jobs have gone from the Welsh media industry in the past decade. In Northern Ireland, Johnston Press has made cutbacks overall. That is the bleak picture, but we could have confidence. I share the view expressed by the hon. Member for Burton: this is not about subsidising, but about supporting and investing for the long term.
The Minister has taken a particular interest in this issue in opposition and since he has transferred into the ministerial car. As a result, I think, of one of these debates, he convened a meeting of proprietors and editors to have a discussion on getting a long-term strategy developed. I was really disappointed that only one turned up. That showed disrespect not just to the Government and the Minister but to all the other stakeholders in the industry. I would follow the path recommended by the hon. Member for Burton. I urge us to reconvene the meeting. It can be called a seminar, brainstorming session or whatever. We need to get the proprietors and editors round a table. We would want to ensure that the representatives of the employees—the NUJ—were there, as well as any others who had an interest in the matter. It would be useful to have representatives of other Departments at the table to consider what role they can play in investing in, not subsidising, the industry in the long term. We can tap into the creativity that is out there.
Let us say that we do convene the meeting and it is hosted by the Government. I hope that it would be on a cross-party basis, because that was the nature of the attempts that the previous Government made. That would not just demonstrate seriousness but show that there would be a long-term approach to the issue, whoever is in government. We need to make it clear in the debate today and other sources that if that meeting is convened, we expect the owners and proprietors to attend and to take it seriously. Otherwise, they do not just disrespect Government and the parties in this House, they also let down whole communities that rely on their local newspaper for the reporting of local news and, as the hon. Member for Burton said, for the holding to account of those in power. I therefore urge the Minister to try again. Let us try again on a cross-party basis to get people round a table to develop a longer-term strategy for the industry, which we all desperately want to succeed.
Mr Jim Hood (in the Chair)
Order. I will start calling the Front-Bench speakers at 3.40 pm. I have four hon. Members on my list of speakers. If hon. Members are reasonable with their time, we should be able to manage that. The next speaker is Glyn Davies.
Glyn Davies (Montgomeryshire) (Con)
Thank you for calling me to speak, Mr Hood. I should apologise immediately for being late and not hearing the first seven or eight minutes of the debate. I am therefore very grateful to be called. I was thinking about what I was going to say when you called me. You did so rather earlier than I expected. That probably serves me right for being—
Glyn Davies
What I say is probably always spontaneous.
I wanted to make a contribution because local newspapers are incredibly important in mid-Wales, where I live. The main reason for that is the retraction of the broadcast media; clearly, there has been financial pressure on the BBC in particular. They have withdrawn from the level of coverage in mid-Wales that I think we reasonably deserve. Now, the whole democratic basis, which has been a significant part of this debate, depends on our local newspapers. It depends on the County Times, which is a key weekly paper, the Shropshire Star, the Advertiser and the Cambrian News in the west. Without those newspapers, local issues simply would not be aired at all.
I want to give a couple of examples. The biggest local impact is that of onshore wind farms, whether we agree or disagree with them as individuals. They desecrate the whole area, and without the local newspaper campaign, the issue simply would not have engaged the local community anything like as much as it has. The whole of mid-Wales is part of that massive campaign, and we depend on the local newspapers to help us deliver it.
Last week, there was another issue. The local health trust has suddenly increased the waiting time for elective surgery from 26 weeks—in Wales it is 26 weeks; in England it is 18—to 36 weeks. The local population would not know that if it were not for the local newspaper. Local newspapers are therefore crucial in delivering the information that we need.
A point that I want to make briefly, without developing it, is about the concerns of local newspapers about the impact of our discussions on Lord Justice Leveson’s report. Most of us would agree that it has very little relevance to local newspapers, but there is massive concern about what bureaucracy it might deliver to those organisations. Many local newspapers are close to the brink in their financial liability. We will have to be very careful about any great increase in the bureaucracy that is needed to comply with new rules and regulations that apply to national newspapers. Great damage could be caused in our attempt to do good.
My final point will reinforce one made by my hon. Friend the Member for Burton (Andrew Griffiths), who secured the debate. It is about how we can ensure that local authorities and Government try to channel much of their spend on delivering information, which is right and proper, through local newspapers. Powys county council—I am not being critical of what it is doing—is desperately keen to have everyone know what is happening within the council. That is right and proper, but it seems to me that if it were inventive and channelled that information through the local newspaper, by engaging someone who would almost be a dedicated reporter, would be a cheaper and more effective way of engaging with people. Almost nobody looks at the stuff the council puts out; it is very professional and very good, but it does not actually deliver what people want, and the same may apply to information campaigns by the national Government. We need inventive ways of transferring that spend so that it supports local newspapers.
Julie Elliott (Sunderland Central) (Lab)
I thank the hon. Member for Burton (Andrew Griffiths) for securing a debate on this issue, which is unusual in that there is pretty much a consensus on it across the House—clearly, there is an issue about the ongoing demise of regional and local newspapers.
Members will not be surprised to hear that I am going to start by talking about my local newspaper, the Sunderland Echo, which is one of the oldest in the country, having started in 1873. It is still a daily paper, although it no longer has three editions a day or area editions. That, in itself, is a dramatic change to the way in which the paper has operated, and that has all happened in the past 10 or 15 years.
The paper is, however, still a hugely important part of our life in Sunderland; it is the main communicator of news to the people who live in my city, informing them, keeping them up to date with what is going on and entertaining them. That is particularly true of elderly people. Although, as has been said, some elderly people have engaged with, and embraced, the internet, many have not, and many in my constituency cannot afford the facilities to do so. For those people, particularly if they are housebound, getting the local paper of a night keeps them in touch with what is happening in not only the city, but their local community. That is an important part of what the Sunderland Echo does.
Over the years, the Sunderland Echo has been at the forefront of campaigns to secure things for our city. Ten years ago, it led a campaign to secure funding to provide ongoing support for the Durham miners’ gala. The gala is one of the most famous trade union days in the country, and more than 100,000 people turn up to it in July every year. There is not a mine left in the Durham coalfield, but the gala is about history, tradition and a good day out for the people of the area. More recently, the local paper has led a campaign to secure a children’s hospice, which is now being built in my constituency.
Those are important things, but there are also the much smaller issues, such as appealing for information when there are road traffic accidents or when things go missing. The national newspapers simply would not engage in such communication, but it is important.
Andrew Griffiths
Does the hon. Lady agree that local newspapers are a catalyst in raising millions of pounds every year for good causes and local charities?
Julie Elliott
Yes, absolutely. The children’s hospice I mentioned is funded entirely from donations and is set up as a charity. The work done by local newspapers on such issues is hugely important.
The problems faced by my local paper, however, are massive. As I said, the number of editions has gone down, but we still have a daily paper, which I am keen to keep going. So many dailies have moved to being weeklies, and that is when we lose the real link with local communities, because what a weekly paper provides is very different from what a daily paper provides.
The rise of the internet has been a threat. Although I look at the news on the internet, I like to read a newspaper as well—the two are not mutually exclusive. The loss of advertising revenue has also caused massive problems, as has the loss of readership—people cannot afford to buy newspapers when their price is going up all the time. Those losses have impinged on the quality of newspapers in some areas.
Most recently, the Sunderland Echo has suffered significant job cuts. It is owned by Johnston Press, which is doing its best in difficult and challenging circumstances. However, since the summer, we have lost 13 jobs in sub-editing and design. Significantly, we have also lost the printing press. Our paper was printed in Sunderland until the beginning of November, as it had been for the entire time it had existed. Sadly, the printing has now moved to South Yorkshire, which is two and a half to three hours away by car. People might think, “Well, the paper’s still being printed,” but 83 jobs have gone, and such changes also have an impact on the quality of the newspaper. Previously, the deadline was on the morning the paper was printed, but if it takes three hours to take the paper somewhere, the deadlines go back, and the freshness of the stories declines. I totally understand the economic arguments for that rationalisation, but it undoubtedly has an impact on the paper.
Local papers are some of the most popular printed materials. Some 33 million people read local papers every week, which is a huge number. There are 1,100 regional newspapers, although that is significantly down on where we were even two or three years ago, never mind 10 years ago. Local papers are a large employer, employing 30,000 people, and that is quite apart from the value they add in terms of the people working in newsagents and other things related to newspapers.
As colleagues have said, local newspapers are a good training ground for journalists. Many quite prominent journalists on national papers started their careers in local papers.
Andrew Griffiths
The hon. Lady makes an important point about local newspapers. Most corner shops and newsagents are under pressure, and newsagents get 27% of their income from the sale of newspapers and magazines, but that will be lost if we lose our local newspapers.
Julie Elliott
Absolutely. I could not agree more. I always try to buy my local paper in my local shop, and not in supermarkets, which have a much broader range of products to sustain them.
Sunderland has a university with a large, well-respected media department. When people leave, some go straight into the national media, and we get a lot on to national training programmes, but many like to go into local news, because it is almost an apprenticeship in the art of journalism. People learn how to investigate properly and how to communicate properly with people. If they go to a national, they will get the very small stories, but in a local paper they have the opportunity to pick up anything they hear about living among the people they write for. That will all be lost if the demise of local papers continues.
We must remember that once papers go, they rarely come back, so we must do everything we can to secure what we have. Local papers are too important to our communities to lose. I cannot imagine how people in Sunderland would find the information they need to go about their daily lives if we did not have the local newspaper. We must do all we can to save papers such as the Sunderland Echo and the others that have been mentioned.
I wholeheartedly support what colleagues have said about an initiative to bring Departments together. There are things the Government can do, and statutory notices, which have been mentioned, are a hugely important part of local papers’ funding. There must be other things we and the Government can look at to try to secure the future of local newspapers. I might have a different view on subsidies from the hon. Member for Burton, but in this case, the value of something that is partly a service, rather than just a business, must sometimes be taken into account when looking at imaginative ways of doing the things that central and local government do in any case, to help keep local papers as they are.
Simon Danczuk (Rochdale) (Lab)
I thank the hon. Member for Burton (Andrew Griffiths) for securing this important debate, and I am more than happy to put on record that he made an excellent speech.
I had not intended to speak about my local newspaper, but I cannot help feeling that a precedent has been set. I now feel obliged to talk at some length about the Rochdale Observer and the Manchester Evening News. They are both part of Trinity Mirror group, which I would argue is one of the fairer and more balanced publishers in the United Kingdom.
The reporting on the Rochdale Observer is second to none: community news, local sport, profiling of businesses and events. Its features on the history of Rochdale are fantastic, and the excellent recipes by a local restaurateur, Andrew Nutter, are spot on; I have attempted some of them on occasion and failed miserably. There is a great variety of news, stories and features for people to enjoy, and that must be celebrated. However, the paper also brings national news to local level. It provides a review of regional and sub-regional news, but what it does best, obviously, is provide news for the town—down to district level, whether in Littleborough, Milnrow or Newhey. It provides real focus, even to street level on occasion.
Most importantly, the role that the paper plays in democracy should not be underestimated. We occasionally talk about the editor of the Rochdale Observer, Gerry Sammon, as Rochdale’s answer to Rupert Murdoch, which is a little unfair as he is much more reasonable, amiable and friendly than that—and very fair. The paper provides scrutiny of the council, MPs and other private and public organisations. It is the people’s champion in Rochdale, giving local people a voice. Like my colleagues I buy the paper every week, and always turn first to the letters pages, to see what Rochdalians have to say about the events of the day. The paper also gives support to campaigns. The hon. Member for Burton mentioned charitable work, which is important, and the Rochdale Observer does that; but it runs other campaigns too. One was about shopping locally. It was a fantastic campaign to urge Rochdalians to shop in the town centre and make the most of it.
The paper has also harnessed technology—something that has been touched on in the debate. The newspaper is published twice weekly but the website provides breaking news on an hourly basis. It also provides wider reach to people who might not pick up the newspaper. As to social media the paper has embraced Twitter exceptionally well. I follow Twitter when I am in Parliament; I follow Chris Jones, one of the local government journalists on the paper, who tweets from the full council meeting, so I can find out instantly what is going on there.
Mr Vaizey
I hope that the hon. Gentleman does not mind me intervening on his speech, and I welcome him to the Chamber as a new Member of Parliament. On the subject of digital media and local newspapers, is he aware that when I tried to get a link to him and his campaign priorities the Rochdale website does not take me to the page? Does he agree that he must impress on Rochdale’s Rupert Murdoch the need to maintain links to news stories about the new local MP?
Simon Danczuk
Absolutely. The message will have been received, I have no doubt. I will check Twitter shortly after I sit down to see whether the paper has picked up on that point.
Simon Danczuk
That ministerial instruction is extremely helpful and I appreciate it.
I was talking about the usefulness of being able to follow Twitter and see what is going on in Rochdale council meetings; but I have another example. Deborah Linton, a journalist on the Manchester Evening News is tweeting about the autumn statement to the people of Greater Manchester—taking politics out to people so that they can follow it and see what is going on. While I am talking about journalists I will mention Jennifer Williams, who works for the Manchester Evening News, and the recent Cyril Smith scandal. She has pursued that story and written well about it on several occasions. There is still excellent journalism—even if it is under the cosh, as my hon. Friend the Member for Hayes and Harlington (John McDonnell) pointed out.
I want to mention Leveson briefly. If the national press had followed local press standards there is no doubt that we would not be in the position we are in now. The Rochdale Observer is always quick to make amends if there are inaccuracies in reports. It completely adheres to the requirements of the Press Complaints Commission. It is unfortunate that a small number of national journalists and press organisations have brought the industry into disrepute.
The people of Rochdale are immensely proud of their Rochdale Observer. I know that the Manchester Evening News, the Rochdale Observer and Trinity Mirror are opposed to statutory regulation, but I still feel that we need some statutory stick with which to push the media to behave themselves and get their house in order.
Austin Mitchell (Great Grimsby) (Lab)
I congratulate the hon. Member for Burton (Andrew Griffiths) and agree wholeheartedly not only with what he said but with the solutions that he suggested. It is a question not of subsidy but of support and of channelling effort into local newspapers. The local press is vital to all of us. It is our means of communication with our constituents and our way of finding out what goes on in the world. We cannot have a big enough office staff to tell us everything that is going on in Grimsby or Rochdale. We need the local press, and it is central to local democracy.
It is sad, therefore, the local press being weakened. Three processes are bringing that about. The first is the closure of local newspapers. In the past seven years, 20% have closed down. Another is the fact that many have gone weekly, rather than daily. That happened, for instance, to the Halifax Courier, the Huddersfield Examiner, and the Scunthorpe Telegraph. That has been done, really, as a way of screwing up the rate of return. It is going to be a favourite tactic of David Montgomery and Local World. Journalists are fired and costs are cut, and the rate of profit goes up with a weekly paper.
Thirdly, there is the firing of journalists. It is interesting that the Northcliffe group, which in 2010 employed 3,130 people in its local papers, this year employs only 2,450. That reduction, by hundreds, in the number of journalists all over the country weakens the quality of the local press. That is the inevitable effect, because the senior journalists, who are the best paid, are the ones who are made redundant or pushed out. Juvenile staff—untrained, semi-trained or inadequately trained young journalists—are brought in and paid less. That means that photographs are not taken, and courts, councils and general local affairs are not covered.
Eric Joyce (Falkirk) (Ind)
It occurs to me that some large newspaper organisations, such as the Johnston Press—The Falkirk Herald, the original Johnston Press newspaper, is in my constituency—are getting rid of editors in some cases. Does he agree that that does not seem like a good idea, either?
Austin Mitchell
I agree absolutely. More importantly to us, and to local democracy, what is happening means that there is no inquiry into local power elites, which can be closer and more tightly knit than central power elites, which are the subject of a good deal of inquiry from the national press. Scandals are therefore not unearthed. I remind that House that it was the Bradford Telegraph and Argus in its vigorous and more campaigning younger days that unearthed the Poulson scandal and brought it to national attention—first the attention of Private Eye and then the attention of national newspapers. That was a local newspaper unearthing a local scandal, which would have gone unknown had it not been for its diligent inquiries. Those inquiries are not made any longer. The newspapers have not the staff to do them. Their coverage is all too often in the form of press releases and handouts from interested parties, pressure groups and business, rather than inquiring journalism. That will mean a less adequate democracy, less information and a less informed public. It will also mean the breakdown of training schemes such as the Northcliffe schemes.
We know why all this is happening. Adverts are being diverted on to the internet and their number is down, because of the recession. It is also because the management of the newspapers have been far too greedy. The chief executive of Newsquest is paid more that £500,000 in annual salary, when journalists are paid £21,000 on average. It is scandalous that such highly paid management are firing journalists all over the country to cut costs, which also cuts the quality of local newspapers. Newsquest staff have not had a pay rise for three of the past four years. Executive remuneration at the Johnston Press is £2.5 million, but its losses for 2011 are registered as £144 million—the management are well paid for running a major loss.
My hon. Friend the Member for Hayes and Harlington (John McDonnell) gave the example of Yattendon Holdings, the controlling group of Iliffe News and Media. It was involved in a tax scam, which Her Majesty’s Revenue and Customs eventually closed up. Anthony Morton, the Yattendon Holdings finance director, said frankly in an e-mail to the company’s accountants:
“What we would like to do is to be able to reduce reported profits in the newspaper subsidiaries, since the levels of profit become common knowledge”—
as they should—
“and could lead to union claims.”
That is absolutely scandalous.
The attempt to get a high rate of return has led to the firing of journalists and the deterioration of quality. Nothing sells local papers better than good-quality journalism and good-quality reporting of local issues and local people, but it has been cut back, and the result all over is falling circulation of local newspapers. If Local World is going to make more of its newspapers weekly, it will happen all over the country.
I must of course mention the Grimsby Telegraph—formerly the Grimsby Evening Telegraph—which has done a good job of maintaining quality in the face of the difficulties and the economies that have been forced upon it. It is now printed in Peterborough and has to be hauled to Grimsby, which means it is later with the news than it otherwise would be, but it has still done a good job of maintaining profits and local quality. It is a good example, and I hope that it will not suffer cutbacks under the new group. A more spectacular example is the Cleethorpes Chronicle, which was formed by local journalists, many of them from the Grimsby Telegraph, as a weekly paper in Cleethorpes, Grimsby’s neighbouring town. It is now profitable because it provides good information, good local journalism and good coverage of local issues in Cleethorpes— not Grimsby.
The founding of a local paper is an example of what local initiative can do. If run on a local basis, local papers can still be profitable, and they are profitable. As the hon. Member for Burton said, they are a way to encourage local initiatives and companies, and they can be financed, if necessary, through the regional growth fund as a vital part of local regeneration. We cannot develop a place and support its industries and economy without a local newspaper. I agree with all the other solutions that the hon. Gentleman put forward.
I hope that we will hear from the Minister what can be done. I agree with my hon. Friend the Member for Hayes and Harlington that we must try to reconvene the meeting he mentioned. We need a national meeting of the newspaper chains, with all parties represented, to devise a strategy for local newspapers in the years ahead. Something has to be done. They cannot be allowed to drift downhill in the way they have been.
Helen Goodman (Bishop Auckland) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hood. I extend my congratulations to the hon. Member for Burton (Andrew Griffiths). I know that he has an exceptionally beautiful constituency, because once upon a time I applied to be the Labour candidate there. I am sure that we will take it back from him—notwithstanding the good speech he made this afternoon.
Many hon. Members have pointed to the great importance of local newspapers to local communities. That is partly because such newspapers hold democratic institutions—councils and health authorities—to account and report on courts. If local newspapers are not there, no one will do that vital work. It is also partly about building local identities. Notwithstanding whatever marvellous local newspapers hon. Members have, none could be better than the inestimable Teesdale Mercury. Like The Northern Echo, which has run some extremely successful campaigns—it is running campaigns against the cuts from the Department for Education as we speak—it is a fantastic local newspaper.
We have consensus over the importance and significance of local newspapers, but these are challenging times. Circulation of local newspapers has fallen in every year since 2005 and it is difficult for the newspapers to deal with the secular trends. The move to the web is obviously a major structural challenge, not only in terms of people getting their news from the web, Twitter, social media and so forth, but due to the very significant loss in advertising revenue from people advertising on websites—to my mind somewhat foolishly. If someone has a piano to sell, for example, it is much better to advertise in the local newspaper, because somebody who is near enough to come and collect it might decide to buy it.
There are secular trends and background issues, but, as my hon. Friends the Members for Hayes and Harlington (John McDonnell) and for Great Grimsby (Austin Mitchell) pointed out, the behaviour of some of the large newspaper chains has not helped the situation. One problem has been that they were looking for rates of return that were simply not sustainable. Twenty years ago, some local newspapers were making 30%, so the big international chains, which my hon. Friends mentioned, borrowed money from the banks to buy more newspapers. They promised the banks that those huge returns, which I shall set in context, would continue.
Last year, Johnston Press made a 12% return before tax. In any other area of economic life, 12% would be a fantastic return. Compare it to Tesco, the most successful retailer in Britain—from a profit point of view—which made 6%. The reason the newspaper industry is in a mess is because its business model requires it to keep paying masses of interest to the banks. That is why they are stripping out the assets, stripping out the quality journalism, which my hon. Friends mentioned, and getting rid of the printing presses, as my hon. Friend the Member for Sunderland Central (Julie Elliott) described, all of which reduces the quality.
I support hon. Members who called for a meeting to discuss the issues, because we need to look constructively at financial models that reflect economic realities. The economic reality is that they are making 12% and people want to buy their local newspaper, but the finances have been messed up—to put it as politely as possible.
I shall turn to the proposals in Lord Justice Leveson’s report. The Minister has been involved in recent negotiations between the Prime Minister, the Secretary of State for Culture, Media and Sport and the newspaper editors, so I wish to ask him a couple of questions about how the negotiations are coming along. Across the parties, we are agreed that, after the tragic treatment of the Dowlers and the McCanns and the scandals uncovered by Lord Justice Leveson, we need to move to a new system. We are agreed that we need independent self-regulation, but the Opposition have yet to persuade the Government that that should be underpinned by statute. Lord Justice Leveson has set out how that might be done.
I hope that the Minister will not suggest that the independent self-regulation he wants will be less burdensome than the statutory backing that we are looking for because, if I may say so, that would undermine the Government’s case that the independent self-regulation they are negotiating with newspaper editors will be sufficiently tough. In this discussion, let us not pretend that statutory underpinning would have a significantly different economic impact on regional newspapers. I remind hon. Members, who may not have read all 4,000 pages of the Leveson report—
Helen Goodman
In thousands of pages, Lord Leveson has proposed that when newspapers that have joined the independent body are sued for defamation, they should first go to a simple arbitration system—that would be much less burdensome for people than going to court—and, in such cases, newspapers would have the advantage of lower costs, as would the victims who were seeking redress. Signing up to the system would therefore reduce the cost of fighting defamation cases for newspapers, which is the incentive for them to join it.
The quid pro quo that Lord Leveson has suggested is that, for the new arbitration system to be regarded as valid, the new independent self-regulator must be truly independent and must follow certain criteria. We are agreed that we do not want the new regulator to be particularly bureaucratic or burdensome. As we have heard, although such newspapers as the Teesdale Mercury are owned by individuals, others are part of large chains that have resources. We need to attend to that argument, but it is not a clincher.
It is reasonable to consider whether fines should be proportionate to turnover, rather than the Daily Mail being given the same fine as the Teesdale Mercury, which is plainly not sensible. We should look at that, as we should at having less bureaucracy. We also need to consider the possibility raised in The Observer at the weekend about whether, within the Leveson framework, local newspapers might have a different independent self-regulator. I do not know whether that is a good idea, but it should be explored in the cross-party talks.
Will the Minister agree that independent self-regulation is not a punishment? It is not about punishing people, but about setting up a stable new system that will balance the importance of a free press with the need for a proper system of redress for victims. I hope that he will also confirm that whether or not we have statutory underpinning is irrelevant to how bureaucratic the new system is, and that we are all looking to have as unbureaucratic a system as possible.
Finally, to return to previous discussions about local newspapers, I do not think we have yet heard the Government’s view on traffic notices. I am sure that the Minister will recall that utilities and local authorities are currently required to put notices about digging up the roads into local newspapers, which is a major source of income for some of them. There has been some concern about the suggestion that those notices should move to the web, meaning that that income would fall.
I again congratulate the hon. Member for Burton on securing this debate. I was pleased to hear my hon. Friends’ analysis of the situation, and I look forward to hearing the Minister’s answers to my questions.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
It is a delight to serve under your chairmanship, Mr Hood.
I thank all hon. Members for their participation in this important debate and my hon. Friend the Member for Burton (Andrew Griffiths) for securing it. It encapsulates both the threat to and the opportunity for local newspapers that, as each hon. Member spoke, I was able to visit their local newspaper website to see what they have been up to and the quality of the local newspapers they extolled. For example, I was impressed that the Burton Mail has already reported this debate. It reported my hon. Friend’s remarks on Monday—it is a telepathic, future-gazing newspaper. I do not want to get involved in local newspaper politics, but it seems to leave the Uttoxeter Advertiser in the dust. However, its report of the Christmas lights being turned on—not by my hon. Friend, but by the mayor—recorded my hon. Friend’s attendance in suitably deferential fashion.
I shall move on to what the hon. Member for Hayes and Harlington (John McDonnell) said about cross-party talks on the future of regional newspapers, but I must correct—I do not know how to put this in parliamentary terms, Mr Hood—what was a factual inaccuracy. The hon. Gentleman said that I had moved from Opposition to a ministerial car. I have never had, do not have and will never have a ministerial car, because it is important that Departments save money, and the Department for Culture, Media and Sport has halved its ministerial budget.
My hon. Friend the Member for Montgomeryshire (Glyn Davies) made a suitably spontaneous speech. I am not sure that he praised the Shropshire Star, so let me do so for him. I notice that its editorial backed him strongly on a matter of recent controversy. The hon. Member for Sunderland Central (Julie Elliott) mentioned the Sunderland Echo, which is also a fine newspaper. Even though she has been in the House for only two and a half years, she has already racked up almost 300 entries on its website.
Although I welcomed the hon. Member for Rochdale (Simon Danczuk) to the Chamber, I pointed out that he must engage more closely with the digital strategy of his local paper, the Rochdale Observer. Despite the “page not found” message, I at least picked up that he is making the town centre his priority. I was also pleased, in relation to another part of my brief, that Rochdale is looking to create a cultural quarter. If there is anything I can do to help him with that, I shall.
I would have praised the Grimsby Telegraph were the hon. Member for Great Grimsby (Austin Mitchell) still here—I gather that he has gone to meet his grandchildren, for which he apologised to me before he left—and I would have pressed him on his campaign to save Scartho baths. Finally, I can only endorse and agree with the hon. Member for Bishop Auckland (Helen Goodman) about the quality of the Teesdale Mercury.
Given all that, it will not surprise hon. Members that I will talk about The Wantage and Grove Herald. It is an interesting quality of newspapers—I am sure that all hon. Members have had the same experience—that if I talk to my Conservative activists, they tell me that The Wantage and Grove Herald is run by the Liberal Democrats, and if I talk to the Liberal Democrat activists at civic functions, they tell me that it is run by the Conservative party. The Wantage and Grove Herald is, therefore, clearly doing its job.
I want to make a serious point, as I start the main body of my speech. At a time of economic austerity—we have talked about the perfect storm for local newspapers of facing a recession at the same time that the rise of new technology is completely disrupting their business models—Newsquest, which owns The Wantage and Grove Herald and its sister paper the Oxford Mail, has invested in new plants and machinery, and now prints a range of local papers, not just its own. The editor, Simon O’Neill, who now oversees several local papers, has always been keen to stress to me at our meetings that Newsquest continues to invest in local journalism. The organisation does not have the same number of bodies on the ground that it had when I became a candidate 10 years ago, which is an interesting snapshot of the rapid change that has come upon local newspapers. None the less, it is focused on maintaining the quality of its local journalism.
Let me briefly record some of the issues that the Government as a whole have considered. We have had several debates about local newspapers in the House since I have been the Minister. We also often debate—such debates are always well attended—any threats to local media, including to local newspapers or to BBC local radio, which were on the horizon a few months ago.
One of the first acts of my right hon. Friend the Secretary of State for Communities and Local Government was to revise the local publicity code. Hon. Members will be aware that more than 18 months ago that code was revised by delegated legislation to reduce the number of council free sheets. That was to ensure that the free sheets, which were becoming ever more sophisticated and which were financed by council tax payers, did not compete overtly with local newspapers. I have seen the change where I live in west London, which had a powerful local council newspaper. That now comes within the local newspaper as a free sheet and therefore now supports the local newspaper.
We also changed the local media ownership rules to ensure that there was a possibility of local newspaper groups looking across platforms as technology changed to try to remove the artificial silos that kept radio, television and newspapers apart. At a time of booming media, and without the internet, such controls were perfectly understandable, but when consolidation and the need to compete with the internet became a concern for the industry, it was important to get rid of those controls.
Local television will provide new opportunities for local media coverage. I am delighted to say that we have state aid clearance today—it happened just in time for this debate—which will go up on the Department for Culture Media and Sport website as we speak.
The hon. Member for Bishop Auckland mentioned traffic notices. I note that the Department for Transport consultation closed in April, but it has, in the run-up to this debate, been unable to update us on how it will deal with the thorny issue of, on the one hand, wanting to save councils’ money and, on the other, not wanting to undermine the financial support on which local newspapers depend, because they depend to a certain extent on public notices.
I want to take up the point made by my hon. Friend the Member for Burton—the central thesis of his debate was that Government should co-ordinate more closely in support of local newspapers—and the point made by the hon. Member for Hayes and Harlington in referring to the meeting that we sought to have with local newspaper owners. I will not share the language of the hon. Gentleman, but I did note with interest that only Johnston Press took up the invitation to attend that meeting. More than 50 hon. Members also turned up, so local newspapers and local newspaper owners cannot complain about a lack of interest or support from the House of Commons and Parliament, which is an important point to make.
Some people might not have turned up at the meeting for fear of getting a bit of a bashing; they might have been bashed about their salaries because it would probably have been at chief executive level, or about job cuts. In reality, the meeting was very constructive because it enabled Johnston Press to explain its strategy and how it was accommodating the digital revolution and investing in local websites and how it wanted to continue with a print strategy, and it enabled local Members to express their views. I think, dare I say it in the privacy of this Chamber—obviously no one will be reporting this debate—that local Members of Parliament are very good sources of advice; they know their area and their constituents and they are avid readers of their local newspaper, so it is possible to get feedback.
I will certainly take up the idea of a dual invitation, and consider it over Christmas and the new year. It will bring together Ministers from relevant Departments and local newspaper companies. I will happily discuss with my hon. Friend which Departments he thinks would be worth engaging with. I hasten to say that, having worked for the Secretary of State for Communities and Local Government, his contacts with certain Departments are much better than mine. I am happy to convene that meeting on a cross-party basis. I try to conduct quite a lot of my work in that way because many of these issues go across the parties; we all have an interest in securing the future of local newspapers. It will be important to have a constructive discussion.
Most Members and the proprietors who attend the meeting will start with the basic principles that these are private companies making their own way in the world, but which, at the same time, have a very important role in local communities. It is, therefore, perfectly proper and valid for Ministers and Members of Parliament to come together to discuss their future and see what can be done to make a difference. It is important, though, that the future of local newspapers rests primarily with local newspapers.
My hon. Friend made an important point about Local World. Look at how local radio is adapting to the current world. It remains local but offers advertisers a national deal. A national company goes through one gateway and gets local coverage, but it does not have to deal with 30 different local radio stations. Similarly, it must be right that local newspapers, subject to competition law and other important aspects, are able to come together to make one offer to national companies which can then do a local advertising campaign but on a national basis.
Finally, I come to the issue of the Leveson report. It is certainly in the Leveson report, and echoed by the reaction of all of us to the Leveson report, that regional and local newspapers are different from the national press. My local editor has made that point time and again, saying, “Please do not tar us with the same brush.”
I welcome what the hon. Member for Bishop Auckland said about the Leveson report. It is important that we continue the cross-party talks. She raised the issue of whether fines should be based on turnover, which was an encapsulation of why it is important to have a discussion and to sort out the important details. I was not clear whether she was saying that there should a separate independent regulator for local newspapers, but I certainly echo her point that this regulator is not a punishment but a recognition that the previous system did not work. As the Prime Minister and my hon. Friend the Secretary of State have said time and again, the status quo is not an option. I certainly hear what she says about statutory underpinnings being irrelevant to whether any regulator is bureaucratic.
The Society of Editors was present at the round table meeting that was convened by my right hon. Friend the Secretary of State and attended by the Prime Minister, and it was certainly an important part of the debate. The national press is moving quickly. It has heard the message loud and clear. I can only say, based on reports on The Guardian website—if it is in The Guardian it must be true—that it sounds like the talks at the meeting of national editors this morning were very constructive.
The debate has certainly been timely. I notice in The Burton Mail, which has telepathic powers, that we will have a debate on this matter in the main Chamber at some point, driven by my hon. Friend the Member for Burton. The debate has encapsulated the fact that all hon. Members are passionate about their local papers. They recognise their place in the local community and in our local democracy. We want to work together with local newspapers to explore their future. The Government will consider how they can help, but I hasten to add that there is no prospect of our writing cheques for local newspapers, and that is not something that local newspapers would want in the first place. We also need to consider how local Members can feed back and engage with such newspaper groups about how they are changing and adapting to the digital environment.
BBC (Parliamentary Oversight)
(11 years, 5 months ago)
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David Morris (Morecambe and Lunesdale) (Con)
Thank you, Mr Hood, for calling me to speak. It is a pleasure to speak under your chairmanship.
I am grateful to have this opportunity to bring this debate to the Chamber. It comes at a time when many people up and down the country are thinking and talking about media regulation. It also comes against a backdrop of shocking allegations, first against commercial media outlets and then against our own public service broadcaster. 2012 has been a dire year for the BBC, and the recent child abuse allegations levelled against BBC stars has been described as
“the worst crisis to hit the corporation for 50 years.”
None of us knows the full details of what has happened, and I have no desire to dwell on the allegations, but we do know that the BBC—like many nationalised institutions—lacks accountability to the public. I believe that we, as Members of Parliament, should now force the BBC to become more accountable.
When I was first elected, I wrote a series of parliamentary questions about the BBC and took them to the Table Office, only to learn that we MPs do not have the power to scrutinise the BBC. We have the right to ask about the property portfolio of the Church of England through Church Commissioners questions, but not the right to ask questions about our national state broadcaster. That must change.
I have no problem with the BBC Trust being the governing body of the BBC, but I believe that there must be some oversight by MPs. It has often been said in this House, and in wider public debate, that transparency and accountability improve public services. I believe that applies to the BBC as much as it does to any other state institution. In this debate, therefore, I am calling for several things. The first is that the director-general’s appointment should be confirmed by the House of Commons. Clearly we would have to devise a system to do that. Perhaps it could be done by a vote of the whole House, or through a special panel or committee. I am agnostic about the system, but I think the principle is vital. The director-general is an important public figure who wields huge power in this country, and it must be the duty of Parliament to ensure that the candidate is the right choice for both the BBC and the country, while the BBC has to accept that this appointment is one the most significant public sector appointments, and act accordingly.
Secondly, MPs should have the right to table parliamentary questions to the BBC and the BBC should have a duty to answer them. I do not mind if those answers are only written answers; the important thing is that we can bring in greater openness. Obviously, answering questions would have a cost associated with it, but I believe that that cost is a small price to pay for greater accountability.
Thirdly, the Select Committee on Culture, Media and Sport should have regular insight into the actions of both the BBC and the BBC Trust. That should be formalised into a system, rather than meetings being held on an ad hoc basis. I believe that those three proposals, implemented together, would restore public confidence in the BBC, and as a result the BBC, Parliament and the media environment would all be enhanced.
Let us make no mistake—the BBC is a vital part of British life. Yet how it works seems to be opaque, and its leadership seems to be distant. I would like to see the day when disgruntled members of the public can come to see their MP and feel that their problems can be dealt with when they ask questions about the BBC. Similarly, I want people to understand fully how the BBC works, and for people to feel engaged with the process.
Gareth Johnson (Dartford) (Con)
I congratulate my hon. Friend on securing this important debate. He talks about the need for the BBC to be more accountable. I am currently chairman of the all-party BBC group and I am aware that the BBC, through the director-general and the chairman of the BBC Trust, already frequently appear in front of Select Committees. They also have a monthly drop-in session in Parliament. In addition, the all-party BBC group itself has meetings with the chairman of the BBC Trust, which are open to all MPs and peers to attend. How does my hon. Friend see the current systems marrying in with the systems of accountability that he has mentioned?
David Morris
I thank my hon. Friend for that intervention. I would like to see a meeting that takes place once a month, just to discuss the mechanisms of the BBC itself. I believe that what is already there is helpful but it is not actually accountable, and accountability is what I would like to see. I thank my hon. Friend also for all his hard work as the chairman of the all-party BBC group.
Similarly, I want people to understand fully how the BBC works and to feel engaged with the process. I should say at this stage that my proposals would not put politicians in charge of the BBC; that is the last thing that I want to see. I have no desire for Parliament to be in editorial control. In fact, I have spent a great deal of time thinking of practical measures that would bring openness and oversight without censorship and control.
I also note that my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) introduced a ten-minute rule Bill on 21 November demanding that the BBC publish all spending over £500. That is an excellent idea and I firmly believe that it should be implemented. All local authorities now publish their spending, and the cost of doing that has been minimal. Most local authorities began publishing spending details long before they were forced to by the Government, so why should the BBC wait for legislation on this issue? It should publish this information now. I am sure that if it did so, my hon. Friend would feel not that the BBC had stolen his thunder but rather that it had done the right thing without the need for legislation. Such a move would create greater transparency with little more than the stroke of a pen. Why should the BBC be afraid of the public seeing this information?
I also believe that, as part of disclosure, the BBC should publish all salaries over £100,000, giving the public the ability to debate those salaries and judge whether they represent good value for money. One example is the high salary of Mark Thompson, the former director-general. In his final year of employment with the BBC, he was paid £671,000. We are told that he was paid that amount because his job was a difficult one, and I am sure that it is. But is it five times harder than being Prime Minister, or three times more challenging than being the President of the United States? I am not convinced that it is, but in any case if all these salaries are published the public can decide. After all, this money is not the BBC’s money but taxpayers’ money, and we have a duty to let them know how it is spent.
As I said at the outset, 2012 has been a disaster for the British media. Many terrible allegations have been made. However, let us not just lament those problems; let us move on. This period of public interest is a real opportunity for change. The BBC refers to itself as “Auntie”—a lovable and dependable figure—but its trusted status cannot be boundless.
Alun Cairns (Vale of Glamorgan) (Con)
I pay tribute to my hon. Friend for proposing this debate and I congratulate him on securing it. Does he accept that the BBC has a great opportunity to make itself as open and transparent as so many other public bodies, which would send a strong message of good will and of doing the right thing in very difficult circumstances? Does he also agree that we need not wait either for any legislative changes or for any of the conclusions of the BBC’s internal report? As a strong friend and fan of the BBC, I must say that opening up would simply be doing the right thing.
David Morris
I thank my hon. Friend for expressing those sentiments. Actually, I was right at the end of my speech, and I am thankful to him for making his intervention because I could not have put what he just said more eloquently than he did. I commend him for that.
I think we all agree that the BBC has a position of trust and that it must be managed responsibly. As such, I hope that the BBC will welcome my proposals.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
Thank you, Mr Hood, for calling me to speak. It is an honour to serve under your chairmanship for the second time today.
I congratulate my hon. Friend the Member for Morecambe and Lunesdale (David Morris) on securing this debate, and I thank him for providing the House with an opportunity to discuss—albeit briefly—parliamentary oversight of the BBC. I think that he only came in for the tail-end of the previous debate on local newspapers, in which I also spoke for the Government, so he may not get it when I say that I have not had time to look him up in his local newspaper on my tablet. However, I am sure that he would not miss an opportunity at some point to praise the work of his own local newspaper.
My hon. Friend made a valid and well judged speech, and he made it clear that there is almost universal support for the BBC in the House, and indeed in the country. However, that does not prevent anyone—particularly MPs—from bringing forward their concerns regarding the BBC, particularly about the oversight and scrutiny of the BBC and how it operates.
The BBC is a hugely important global institution, and its value to the UK not only as a content creator of the highest calibre but as a promoter of the UK’s values and culture cannot and should not be underestimated. In the context of recent events, which I will come to in a minute, it would be all too easy to forget the positive impact that the BBC has on a daily basis. For example, the BBC World Service, the world’s largest international broadcaster, provides services in 27 languages to about 180 million people worldwide, and the service’s future has been secured by its funding being incorporated within the BBC’s licence fee settlement.
Alun Cairns
I pay tribute to the Minister’s work in supporting and scrutinising the BBC. He has rightly highlighted the World Service’s excellent work. I see it as a positive step that funding for the service has been transferred from the Foreign Office to the BBC, but does the Minister agree that the situation is now somewhat inequitable, because when the funding was with the Foreign Office the National Audit Office had unrestricted access to the accounts but now the BBC Trust has to agree to the auditing of various elements of the service?
Mr Vaizey
It is important that the BBC World Service has an element of independence from Government, so the move was the right one to make. In addition, savings can be found by combining the budgets for domestic radio and the work of the World Service, for example in relation to the use of equipment and technicians. It was the right move in that it provided an effective settlement for the World Service at a time of economic austerity, but I hear my hon. Friend’s point about the National Audit Office and I will turn to that issue later—it comes up time and again.
I want to make clear this Government’s firm commitment to the long-standing principle, which is of the utmost importance, that the BBC must be independent of Government and of political intervention. The political independence of the media is a live subject both in the House and outside, so it is important to reiterate that principle. The political independence of all media is key to any healthy democracy, and the Government must always ensure that such independence is secured and, where possible, strengthened. Independence, however, does not mean that the BBC, or indeed any broadcaster, should be unaccountable for its actions. Because of the unique way in which it is funded and owned, the BBC should be accountable, and primarily to licence fee payers.
I shall put that remark in context. The BBC is a public corporation established by a royal charter and framework agreement, which sets out the role, responsibilities and governance of the BBC. Within the framework of that charter and agreement, the BBC is editorially and operationally independent of Government and, rightly, there is no provision for the Government to intervene in the BBC’s day-to-day activities.
The current BBC charter gives responsibility for the governance of the BBC to the BBC Trust. The duties of the trust, as enshrined in the charter, include representing licence fee payers, ensuring that the independence of the BBC is maintained and assessing the views of licence fee payers. We believe that those principles, alongside the others set out in the charter and agreement, provide a strong, open and transparent framework of accountability to licence fee payers.
We have recently reinforced the oversight of the BBC. During the last licence fee settlement we introduced new mechanisms to further strengthen the BBC’s financial accountability, and the National Audit Office is now empowered to conduct a value-for-money review of the BBC. We understand the point made by my hon. Friend the Member for Vale of Glamorgan (Alun Cairns). It is important that the National Audit Office works with the BBC, but it does have access to the BBC’s finances.
John McDonnell (Hayes and Harlington) (Lab)
I think that many Members from across the House have welcomed the National Audit Office’s involvement, but there seems to be a disconnect between the audit that goes on at that office and the trust having a role in ensuring that there is some financial accountability. There seems to be a lack of expertise on the trust’s board with which to translate the audit information, or the understanding of it, into action.
I will give a brief example. The National Union of Journalists has, over the past week or two, pointed out that the cuts in the number of journalists and the outsourcing that have taken place have resulted in some of the BBC’s recent failings. In comparison, however, BBC management have collected £3 million in car allowances—even if they do not drive—£2 million in private health care and £4.7 million in golden goodbyes. The information provided by audit does not seem to be translated by the Trust into actions to control management expenditure.
Mr Vaizey
I hear what the hon. Gentleman says about the expertise of the BBC Trust. The way of dodging his point would be to say that that is a matter for the trust. It would not be right for me to interfere or to comment on appointments to the trust. The appointment process is independent and ensures that members of the trust are appointed without political interference. The chairman of the trust is appointed by the Secretary of State and the appointment is approved by the Prime Minister, but the hon. Gentleman should perhaps contact the chairman of the trust to raise his concerns and to explain why he feels that the trust is not doing enough to examine the BBC’s finances.
Dr Matthew Offord (Hendon) (Con)
I worked for the BBC for nine years, so I speak from a position of experience. How does the Minister feel the chairman of the BBC Trust regarded MPs when he most recently stood before them in the Culture, Media and Sport Committee?
Mr Vaizey
I was not aware that my hon. Friend had worked for the BBC before entering the House of Commons. Given the qualifications of the BBC’s new director-general, who worked there and then left for an outside organisation, it seems inevitable that my hon. Friend will one day end up as director-general, once Tony Hall has served his term.
In a sense, the element of parliamentary oversight of the BBC—
Mr Jim Hood (in the Chair)
Order. I am sure that the Minister is just swivelling, but I am seeing too much of his back.
Mr Vaizey
I am so sorry, Mr Hood. I will address you.
On parliamentary accountability, it is true that the chairman of the BBC Trust and the acting director-general appeared before the Select Committee on 27 November. The previous director-general appeared on 23 October, and the director-general before that—that shows how fast things are moving—appeared on 19 June 2012. The BBC Trust appeared before the Public Accounts Committee on 22 November, and other BBC executives appeared before that Committee in July. Also, the BBC has made appearances over the past year or so before the Select Committee on Foreign Affairs, the Lords Communications Committee, the Select Committee on Justice and the Administration Committee.
I think the chairman of the BBC Trust behaved in an appropriate fashion when he appeared before the Culture, Media and Sport Committee and answered its questions. He is a man of deep experience and robust views, and that Select Committee is capable of offering challenging points to him. Having known him for some time, I know he is capable of responding to those challenging points.
In addition to the BBC Trust and the new powers for the National Audit Office—again, those powers being to conduct a value-for-money review of the BBC, which is an important point of progress—the BBC is also subject to the regulatory oversight of Ofcom, which can sanction it for breaches of the broadcasting codes. That is, of course, with the exception of compliance with accuracy and impartiality, which are still matters for the trust.
Returning to parliamentary scrutiny, which is at the heart of the debate, the BBC charter sets out two mechanisms under which the appointment of the director-general can be made. It can be made by the BBC Trust, whereby the director-general shall also operate as chairman of the executive board, or by the chairman of the executive board, if that role is held by a non-executive appointed by the trust. At this time, we see little benefit of either the Government or Parliament having a role, whether through consultation or ratification, in the appointment of the director-general. Indeed, such a proposal has the potential to make the most important appointment at the BBC—a position that, as we know only too well from recent events, crucially includes the role of editor-in-chief—political, which could undermine the principles of an independent BBC.
That is not to say that Parliament should not have overview of a public institution as important as the BBC. Of course, we entirely support the right of Parliament to question the decisions made by the BBC and the trust, including in debates such as this one. In the past three months, senior BBC figures have appeared before at least two parliamentary Committees.
Finally, we recognise that it is necessary to put this debate in the context of recent events at the BBC, and most importantly of how the BBC responds to the significant loss of public confidence. We have been clear that the primary objective of the BBC Trust at this time must be to rebuild the public’s trust in the BBC, and I know that Lord Patten agrees. To that end, we have set out three things we believe the BBC Trust needs to achieve.
First, the immediate task must be to address the failings in the editorial process, particularly at “Newsnight”, in order to restore public confidence. The trust needs to act swiftly to ensure that the management and leadership issues are resolved and that the failings cannot be repeated. It is clear from what the interim director-general has said that the BBC is looking seriously at what went wrong, where responsibility lies and how to address the matter in the long term, and the Government welcome that.
Secondly, the trust must ensure that a strong and stable executive board is in place to manage the BBC. To that end, we welcome the appointment of Tony Hall as director-general of the BBC. He has a strong track record and extensive experience inside and outside the BBC, and it is important that he works hard to maintain public confidence in the corporation.
Thirdly, we must not lose sight of the inquiries into what is at the heart of these events. None of the developments in recent days should overshadow the investigations into the alleged horrendous abuse of children in institutions across our country. It is vital that the BBC responds correctly and decisively to the Pollard inquiry into the decision to drop the “Newsnight” item on Savile, and to the Smith inquiry on Savile’s abuses and the culture and practices of the BBC. We must wait until those investigations have concluded and consideration has been given to their findings. At this time, however, we see no evidence that suggests that greater oversight of the BBC by Parliament would have had any impact on recent events. Even if that case could be made, we must balance any benefits of such oversight against the impact on the BBC’s independence.
I reiterate that the chairman of the BBC Trust, regardless of how hon. Members regard his demeanour before the Culture, Media and Sport Committee, did come to be questioned and examined by that Committee, as did the previous director-general.
We are all rightly proud of what a strong, independent BBC can achieve, and we should take the opportunity to preserve and strengthen those qualities for the good of all licence fee payers.
Work Capability Reassessments
(11 years, 5 months ago)
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Sheila Gilmore (Edinburgh East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hood. Everybody here is probably familiar with some of the issues relating to the employment and support allowance and the work capability assessment. Between the introduction of the assessment in October 2008 and August 2011, 1.15 million new claimants were assessed and 687,000 were declared fit for work. Of those, 102,500 successfully appealed their decision and were awarded ESA. That means that 9% of all ESA assessments have been overturned. When we look at assessments leading to fit-for-work decisions, the figure rises to 15%. Although the proportion of decisions overturned has started to fall, the overall number still remains extremely high.
Those figures do not include all the incapacity benefit claimants currently being migrated to ESA, a process that started last year and is due to be completed in 2014. The figures published recently cover claims only after appeals have been taken into account—they have been published on a different basis—so we have no data on how many claimants in the migration are originally declared fit for work and then appeal, and how many of those appeals are successful. Although that is not precisely the subject of this debate, I hope that the Minister will see to it that we have more comprehensive and comparable data in future.
The number of incorrect assessments and successful appeals is still high. Like many of my colleagues, I have been considering a number of different aspects of the issue. Earlier this year, I secured a debate here in Westminster Hall on the work capability assessment. On that occasion, I focused on the recommendations for new mental, intellectual and cognitive descriptors drawn up by Mencap, Mind and the National Autistic Society. Although the descriptors are certainly not the only issue that needs addressing, they could have gone a long way to improving the assessment process.
Professor Harrington approved and submitted the descriptors to the Department for Work and Pensions in spring 2011. It is frustrating that officials are only now getting down to assessing properly whether the descriptors would improve the WCA, and we will not get the results of that so-called gold standard review until next summer. There will have been more than two years of delay since the proposals were published.
John McDonnell (Hayes and Harlington) (Lab)
I preface my remarks by thanking my hon. Friend for the work that she has done on the issue over a long period. Is her experience the same as mine? The largest number of constituents with whom I deal who have lost their benefits, and those with the most distressing cases, are those with mental health problems and those on the autistic spectrum.
Sheila Gilmore
I thank my hon. Friend for his intervention. That is the case. There is a flaw in how the original test was drawn up if it is not accounting properly for those types of condition. That is why it needs to be examined.
Gloria De Piero (Ashfield) (Lab)
On that point, one of my constituents, a former careers adviser, had a breakdown that led to depression and panic attacks. He was assessed as fit for work—by a physiotherapist.
Sheila Gilmore
I thank my hon. Friend for contributing that example. We must look at such situations carefully.
The process of reviewing the new descriptors is finally under way—although I suspect that we will return to it in due course—so I will concentrate on appeals and the time between assessment and reassessment. One of the most common stories that I hear from constituents is that they are found fit for work, wait several months for an appeal, get ESA and are then called back for a further assessment, sometimes just weeks and often only two or three months later. That is one of the most visible flaws in how the system works.
Nia Griffith (Llanelli) (Lab)
Does my hon. Friend agree that not only is the waste of money enormous, given that so many are granted benefit on appeal, but that given all the cuts to citizens advice bureaux, it is difficult for people to get the right support going into a frightening tribunal situation?
Sheila Gilmore
My hon. Friend raises an important point. There is evidence that people who are represented are more likely to be successful than those who are unable to get representation.
That is the context for the issue of reassessment: the high volume of appeals means that people must wait long periods for a hearing and a decision. In answer to a written question last month, the Under-Secretary of State for Justice, the hon. Member for Maidstone and The Weald (Mrs Grant) said:
“During the period 1 April to 30 June 2012 (the latest period for which data has been published) the average time taken from receipt of an ESA appeal by the SSCS Tribunal to disposal was 19 weeks”.—[Official Report, 19 November 2012; Vol. 553, c. 307W.]
However, that 19 weeks is not the average waiting time for an individual making an appeal but merely the average time it takes the Tribunals Service to process the appeal after it receives the papers. Before it even receives the papers, an appeal must be lodged with the DWP, the relevant decision maker has to perform a series of checks and the Department must prepare and submit its response.
There is no time limit for DWP to prepare its response to an appeal. In a written answer to a question from me in February this year, the then Justice Minister, the hon. Member for Huntingdon (Mr Djanogly), indicated that between June 2010 and May 2011, the average time it took from the submission of an appeal to DWP to receipt of the papers by the Tribunals Service was 8.1 weeks. If we add that to the average of 19 weeks, we are looking at about 27 weeks. Over and above that, individuals will have submitted an application and undergone an assessment. In 2011, they had to wait seven weeks for the result of that assessment, although I know from talking to my colleagues that many people encounter much longer waits.
What does all that mean in practice? I raised an example during Prime Minister’s questions on 2 March last year. A constituent of mine had a young adult son who was severely autistic but had been found fit for work, and who appealed successfully. The process took 10 months, and he was told that he would have to be reassessed in six months. I do not think that the Prime Minister understood the question that I was asking; he gave me an answer about disability living allowance rather than employment and support allowance.
Before the Minister says, “That was then; that was 2011, and we have made so many improvements that it isn’t happening any more,” only two weeks ago, I visited a constituent whom I had not met before who told me a similar story of having applied, being refused and appealing, and who within a relatively short time had to go through another assessment.
Julie Hilling (Bolton West) (Lab)
My hon. Friend is being generous with her time. Does she agree that it seems to be utter nonsense? There is a lack of understanding. If people have progressive illnesses or permanent conditions, they will not be any more fit for work in a few months’ time. It seems to be one of the absolute immoralities of the system that people who cannot ever work continue to be called back for reassessments.
Sheila Gilmore
That leads me neatly into my next point. I followed up with a written question, and the then Minister of State for the Department of Work and Pensions—now Lord Chancellor and Secretary of State for Justice—set out the official line, which is that the period between assessments is known as a prognosis time and is determined by the decision maker at the time when they decide whether someone is fit for work or should be given ESA. The clock starts ticking on the date of the original decision.
My immediate question is why someone found fit for work would be given a prognosis time in the first place. Hon. Members might think that that would not be necessary, because the assumption is that the person will be moving on to jobseeker’s allowance. The only reason that I can envisage for that is that prognosis times are, in effect, a precautionary measure in the event that if a claimant successfully appeals, as so many do, and is awarded ESA, a prognosis time is ready. But if the decision maker’s original determination that the claimant was fit for work is overturned, why should we put any faith in the corresponding determination on what the prognosis time should be? If the decision on a claimant’s being fit for work was wrong, surely one imagines that the decision on the prognosis time would be wrong.
It would make much more sense for those who are declared fit for work to be given no prognosis time and, in the event of a successful appeal, for the judges to be given a responsibility for settling the matter when making their new decision. If that is not thought possible, the prognosis times should only kick in after a successful appeal and should not start from the time of the original decision, because that is putting people on a rapid roundabout.
During the summer, my hopes were raised that the Government might have seen the contradictions in the current arrangements. In an interview for the BBC “Panorama” documentary in July 2011, the then Minister—now Lord Chancellor and Secretary of State for Justice—said,
“It’s been apparent to me in the last few months that we were calling people back too regularly and I’ve instructed the officials that operate the system to actually make sure that we leave a much more sensible gap in between the two.”
Jim Shannon (Strangford) (DUP)
I thank the hon. Lady for being a champion of this cause. I have a staff member who looks after nothing else but ESA and DLA appeals, because of the volume of those coming in. That is one of my great concerns. For descriptors, they ask them, “Can you move the box from here to there?” or “Can you hold the pint of milk?” Those descriptors do not apply to blind people, to people with depression or to those with severe mobility and other issues. Does the hon. Lady feel that the Government could look upon this matter more favourably and ensure that people have a report from a general practitioner, the person who medically knows them best of all?
Sheila Gilmore
Without a doubt, that is one way that it could be done. The flaws of the system include whether people are able to present information, when it is accepted and how it is used.
It seemed that the former Minister at least was prepared to move in respect of people’s being called back too quickly. I put this issue to the new Minister at the Select Committee on Work and Pensions evidence session held on 21 November, but I did not get a particularly helpful response. The Minister said,
“There is the opportunity for the tribunal to make a recommendation”,
which suggests that the tribunal could do that, but he then said,
“When that recommendation is made, it is something that the decision maker should take into account. I think there is also an issue about at what point of time is the tribunal disputing DWP’s decision.”
Should they be looking at
“the point in time the decision was made, which could be nine months earlier…or is it based on what they saw on the day in the tribunal? So there is a lack of clarity there, but I think we should take a fairly clear view about when reassessments should take place, and it is an area that decision makers should work on.”
The Minister used a lot of words, but did not provide clarity about our making progress on this matter. He was far less clear than his predecessor talking on a television programme. That was disappointing. Perhaps the Minister will provide clarification when responding.
Can the judges suggest a different prognosis time? Are they given guidance as to when they should and should not set prognosis times? Do the Government collect statistical analysis of how often judges take up this option? If they are allowed to do so, they appear to exercise that ability rarely. At what point and how are decision makers brought back into the process once a fit-for-work decision has been overturned? If that happens, could a decision maker at that stage, as opposed to at appeal, suggest a new prognosis time, even if the judge has not taken up the option? What guidance is provided to decision makers in this regard and are there any statistics on it?
I shall pre-empt the Minister by acknowledging that in government my party introduced ESA and the work capability assessment. I do not raise these issues to make political points, but in a genuine attempt to get them dealt with. I have repeatedly stated that I came to this place determined to raise these issues, regardless of who won the election. I first came across many of the issues as I was campaigning for election. I was concerned about a politicised response at the last Work and Pensions oral questions, consisting too much of saying, “You introduced it,” which did not get to the crux of these issues.
It would help if the Minister provided clarity on the following points. Do decision makers set prognosis times for claimants found fit for work? If so, why are those not overturned when this happens to corresponding fit-for-work decisions? Can judges set new prognosis times when they overturn decisions? What role do decision makers have with respect to prognosis times following successful appeals?
Finally, I seek an update on the apparent instruction from the former Minister to civil servants that the time between reassessments should be reduced. A central recommendation of Professor Harrington’s first report was that the WCA should be more compassionate and empathetic, and this will only be achieved once Ministers intervene and stop people being called back for reassessments immediately after successful appeals.
The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)
I thank the hon. Member for Edinburgh East (Sheila Gilmore) for calling this debate, and thank all hon. Members who contributed so constructively. The matter is of great importance to the hon. Lady, who has raised the concerns on many occasions.
The Minister for Employment, the lead Minister responsible for the work capability assessment policy, is on Government business in Brussels today and has asked me to pass on his apologies. I will answer questions as fully as I can, but if I do not answer in as much depth as hon. Members would like, a full written response will follow.
I understand the concerns for people who are claiming and who appear to be called back for reassessment soon after a successful appeal. First, I want to make clear why it is important to call people on ESA back for reassessments at appropriate intervals. People are entitled to ESA for as long as they satisfy the entitlement conditions. To ensure that people receive benefit correctly, it is important that they are called for reassessment from time to time, to ensure that they still meet the entitlement conditions. People’s health conditions can change and we need to ensure that they remain in the correct group, for example, the work-related activity group or support group. This is a normal part of receiving ESA and is important to ensure that people continue to receive the right support. This active approach to the benefit is crucial and is having an impact.
Ian Swales (Redcar) (LD)
The Minister talks about the need for reassessments. Can she confirm whether the Government have provided any instructions about whether face-to-face or physical assessments are needed? People being assessed at a distance—the so-called “under scrutiny” method—is a growing problem in my constituency. Can she confirm whether that is a policy, because it is certainly giving rise to a greater number of wrong assessments?
Esther McVey
I will come to that point a little later.
The number of working-age people on ESA and incapacity benefits as of February 2012 was 2.56 million, which is the lowest level since the introduction of IB in 1995. Early estimates to September 2012 suggest that overall the numbers on these benefits are further decreasing and for the first time the data have gone below 2.5 million.
Sheila Gilmore
Is the Minister aware of the research that the DWP carried out for some of the early applicants for ESA, which showed that after a year of being found fit for work, 43% were neither on an out-of-work benefit nor in employment? This fall in the number of people on benefit may be the result of their simply getting nothing and disappearing out of the system. Is she concerned by that?
Esther McVey
Of course, that would concern me; it would be of concern to anyone. Everybody will be followed up and duly represented and given sufficient support. However, we would have to look into those numbers. Those who are on benefit get the support they need, in contrast to previous approaches through which they were abandoned to a lifetime on benefits. Those who have been found fit for work now claim JSA, an active benefit with a proven track record of getting people into work, as the falling unemployment figures have shown.
On the cases raised this evening, it is important to note that if someone appeals against a disallowance decision, the tribunal considers the evidence, the law and the claimant’s circumstances at the time of that decision. If the appeal is upheld and the claimants are awarded ESA, they are quite rightly required to attend a further work capability assessment in the same way as any other ESA claimant—the timing of the reassessment is the issue. It is not true that the time frame set for the work capability assessment remains fixed by the original decision maker when the fit-for-work decision was made. If an appeal has been upheld, the date for the next WCA is decided afresh by a decision maker; re-referral dates chosen can be three, six, 12, 18 or 24 months later, depending on when it is considered most appropriate for claimants to have their next contact with the Department.
Julie Hilling
What concerns me is those people who will always have such a condition or who have a progressive condition, meaning that they will only get worse. What about them? To continue to reassess them and put them through that stress feels absolutely wrong—I cannot think of a better word—
Julie Hilling
Cruel, yes. Why are we doing that to that group of people who will never get better?
Esther McVey
I completely take on board the hon. Lady’s point. Part of the decision maker’s process is that all the available information will be considered, including: any recommendations made by the tribunal; any factors the tribunal took into account in reaching its decision; the health care professional’s advice from the previous assessment; and any medical evidence submitted after the appeal was made. Other considerations will include the type of limited capability for work, whether the limited capability is likely to change for better or worse and how likely any surgery or other significant improvement is.
Jim Shannon
In my earlier intervention, I mentioned the possibility of medical evidence being sought before any decision. Have the Government considered direct contact with the GP so that an assessment of the person can clearly be made on a medical basis?
Esther McVey
As I said, all factors will be taken into account for the individual having an assessment. It is true that a small number of claimants are asked to attend a further work capability assessment as little as three months after a successful appeal, but only after careful consideration of all the available evidence by the decision maker. Our latest data show, however, that that only happens in around 5% of cases. As part of our ongoing commitment to continuous improvement, the process was reviewed, with revised guidance issued to decision makers in February 2011 to ensure that they were actively considering a suitable re-referral date, so that claimants are called back when most appropriate for them.
Following the recommendations from Professor Harrington’s year two review, a regular audit of decision-maker performance is now conducted via the quality assurance framework, whereby checks are made on a sample of ESA and IB reassessment decisions. We also conduct twice yearly calibration exercises at a national level to ensure consistent application of the quality assurance framework. More than 90% of decisions met the required standard each month between February and September 2012. Additionally, due to changes introduced in July 2012, we have improved the process for receiving feedback from the tribunals if the tribunal has overturned the original decision. Judges now have the discretion to include a recommendation of when the next WCA should take place on the tribunal’s decision notice. The decision maker will take account of that recommendation when setting the review date.
I recognise that the number of appeals that the Department receives, as well as the effect on the individuals concerned, is an emotive issue. I also acknowledge that the volume of appeals has increased significantly over recent years, but that, too, is being addressed. I want to ensure that the decision making is right first time around, which was a focus of Professor Harrington’s independent reviews of the WCA. He has made a number of recommendations to support such an approach to decision making. As a result, we have: changed how we communicate with claimants, to explain the process more clearly; put decision makers at the heart of the process; and introduced the quality assessment framework to improve the quality of decisions made. We have also introduced the personalised summary statement and regional mental function champions to improve the quality of face-to-face assessments.
If a claimant disputes a decision, however, we must be able to resolve the dispute within the DWP, whenever possible. If the dispute cannot be resolved within the DWP, we need to ensure that an effective and efficient dispute resolution procedure is in place. The DWP and Her Majesty’s Courts and Tribunals Service are working together to improve the quality of initial decision making to address the high levels of appeals while ensuring that fairness and efficiency are maintained.
Sheila Gilmore
Can the Minister address a specific issue? As recently as July, the former Minister appeared to accept that in spite of the changes mentioned he thought that people were being called back too quickly for reassessment. What has been done since July to deal with that?
Esther McVey
I thought I had dealt with that a little earlier when discussing the decision makers and how there is the right to look at when they feel it is appropriate to call someone back, whether three, six, 12, 18 or 24 months later. That obviously has to be right for all, whether the person assessed or the system as a whole. As the hon. Lady knows, we have reviewed the process not once, not twice, but three times under Professor Harrington. Each time recommendations have come back, and we have implemented them, so significant changes are under way.
As the hon. Lady mentioned at the start of the debate, we inherited the situation—the system was put in place before this Government—but we are trying to get it right, we have brought in changes and we will continue to do so until all parts of the House and, most importantly, those being assessed, feel we have got it right.
In conclusion, I echo Professor Harrington who has made it quite clear that the work capability assessment, designed as the “first positive step” towards work, is the “right concept” for assessing people who need our support. He also recognised, however, that there was a need to improve it, which is why we accepted and have largely implemented more than 40 recommendations made in his first two reviews.
Following our reforms, twice as many people go into the support group now as when ESA was introduced. The proportion of people with mental health conditions being awarded ESA has risen from 33% to 49%. I know the hon. Member for Edinburgh East asked specifically what was happening in that regard, and I hope that she can take some comfort from how clearly we are looking into the matter and at how the numbers have changed.
In response to the hon. Member for Ashfield (Gloria De Piero), who mentioned one of her constituents and a physiotherapist, the assessment looks at the function and not the condition. Physios are experts in this area and have comprehensive training, especially on mental health. They are only approved and allowed to be assessors if they have the necessary skills.
As for the critics, Professor Harrington made it clear in his third review:
“All they call for is a scrapping of the WCA but with no suggestion of what might replace it”,
and
“to recognise that things are beginning to change positively in the best interests of the individual would be helpful.”
Debates such as this improve the situation.
John McDonnell
Will the Minister meet some of those critics, such as Disabled People Against Cuts or Black Triangle, which has been occupying DWP offices and demanding meetings with Ministers?
Esther McVey
I am more than happy to meet them, although they might not wish to as I am not the Minister responsible. I will forward the invitation and I am sure, diaries permitting, that he will do so. I hope that today has been constructive and I thank the hon. Member for Edinburgh East for bringing forward the debate.
Question put and agreed to.
Written Ministerial Statements
(11 years, 5 months ago)
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Customs 2020
(11 years, 5 months ago)
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The Economic Secretary to the Treasury (Sajid Javid)
I wish to inform the House that the Government have opted in to the proposal for a regulation of the European Parliament and of the Council establishing an action programme for customs in the European Union for the period 2014-20 (Customs 2020).
This proposal establishes a customs co-operation programme to support the effective functioning of the internal market and operation of customs procedures within the EU by increasing co-operation between member states. The programme aims to contribute to the Europe 2020 strategy for smart, sustainable and inclusive growth, by strengthening the functioning of the single market and EU customs union.
The UK has benefited from participation in predecessor programmes, in particular through using Customs 2013 activities to reduce administrative burdens for compliant businesses. The programme also funds the maintenance and development of EU communication and information exchange systems. This is an area where spend on research and development can represent good EU added value by providing economies of scale in the development of cross-EU networks.
Finance Bill 2013: Measures with Immediate Effect
(11 years, 5 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
This Government are committed to delivering a progressive tax system that is affordable, fair and encourages growth.
The Government are today announcing measures that will help build a fair tax system and tackle tax avoidance. The legislation for these measures will have effect from today and will be included in Finance Bill 2013.
The protocol on announcements made outside scheduled fiscal events, published at Budget 2011, sets out the criteria the Government will observe when changing legislation with immediate effect. The Government are acting in accordance with the protocol in announcing the following changes to legislation.
Bank Levy—double taxation relief
The Government will introduce legislation to take effect from 1 January 2013 which will put beyond doubt that foreign bank levies are not an allowable deduction for income tax or corporation tax purposes. The legislation will also ensure that where a company makes a claim on or after today’s date for double taxation relief for a foreign bank levy against the charge to the UK Bank Levy, none of that foreign bank levy will be an allowable deduction for income tax or corporation tax purposes.
Tax Mismatch Schemes
The Government are introducing legislation to counter tax avoidance schemes that aim to reduce a company’s liability to corporation tax through asymmetric tax treatment of loans or derivatives (tax mismatch schemes), including, although not limited to, schemes involving companies which are members of a partnership.
Due to the repeated use of partnerships and similar collective structures in tax avoidance schemes, the Government will be considering the area of the taxation of partnerships and similar structures as part of their review of high-risk areas of the tax code.
Property total return swaps
Legislation is also being introduced to block schemes that use property return swaps to convert capital losses within a group into income losses, and that use the legislation to generate capital gains which are not in proportion to those actually arising from the swap contract.
Manufactured payments
The Government are introducing legislation to address schemes involving stock lending arrangements. In these schemes a company lends stock, and instead of receiving a manufactured payment which is taxable, for example as a trade receipt, receives value in some other non-taxable form. The draft legislation provides that the lender will be taxable when value representing a manufactured payment is received in any form.
Payments of patent royalties
Legislation is also being introduced to abolish the income tax relief for non-trade payments of patent royalties in order to counter an avoidance scheme which exploits the relief, and to simplify the tax code. There is understood to be little use of the relief by compliant taxpayers, but anyone who thinks they will be adversely affected by this change is invited to contact HM Revenue and Customs (HMRC).
Further details on the measures listed above are contained in the draft legislation, explanatory notes and “Tax Information and Impact Notes” published on both the HM Treasury and HMRC websites.
Fiscalis 2020
(11 years, 5 months ago)
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The Economic Secretary to the Treasury (Sajid Javid)
I wish to inform the House that the Government have opted in to the proposal for a regulation of the European Parliament and of the Council establishing an action programme for tax in the European Union for the period 2014-20 (Fiscalis 2020).
This proposal establishes a tax co-operation programme to improve the functioning of taxation systems within the EU by increasing co-operation between member states. The programme aims to contribute to the Europe 2020 strategy for smart, sustainable and inclusive growth, by strengthening the functioning of the single market. It also has the objective of driving technical progress and innovation in national tax administrations with the aim of developing e-tax administrations and contributing to the establishment of a digital single market.
The UK has benefited from participation in predecessor programmes, in particular through involvement in multilateral controls which can assist with the detection of tax fraud. The programmes also fund the maintenance and development of EU communication and information exchange systems. This is an area where spend on research and development can represent good EU added value by providing economies of scale in the development of cross-EU networks.
Queen Elizabeth II Conference Centre
(11 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
My hon. Friend the Parliamentary Under-Secretary of State, Department for Communities and Local Government, Baroness Hanham, has made the following written ministerial statement:
Further to the statement made to both Houses on 23 April 2012, a pre-market engagement exercise of the Queen Elizabeth II Conference Centre conference business was undertaken over the summer. This exercise demonstrated that there would be market interest in running the conference business.
Since that exercise was carried out, Parliament has published an initial study into options for the long-term upkeep of the Palace of Westminster. The report highlights a number of options for the restoration and renewal of the palace. These require further study, but may have implications for the future use of the Queen Elizabeth II Conference Centre, should Parliament decide that it needs the centre.
While recognising that Parliament needs to continue to have a full range of options available, the Government have concluded that current arrangements for the management of the centre should be maintained for the present time. This will ensure that bookings can continue to be made and allow the centre to plan future business with greater certainty. Should Parliament indicate that it requires the centre in future, it has been agreed that discussions will take place on time scales which recognise the importance of the centre maintaining a viable business plan, to provide assurance to potential customers.
Advisory Group on Military Medicine
(11 years, 5 months ago)
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The Minister of State, Ministry of Defence (Mr Mark Francois)
I am today announcing the start of the triennial review of the Advisory Group on Military Medicine (AGoMM). Triennial reviews of non-departmental public bodies (NDPBs) are part of the Government’s commitment to ensuring that NDPBs continue to have regular challenge on their remit and governance arrangements.
AGoMM provides independent, specialist advice to the Ministry of Defence, as required, on the policy for medical issues within medical force protection, and for clinical treatments used on operations.
The AGoMM review is to be conducted in accord with Government guidance for reviewing non-departmental public bodies, and will consider the effectiveness of how the functions of AGoMM are currently delivered, whether there is a need for the function and the advisory NDPB to continue, and if so, how the function might best be delivered in future. The review will be led by a member of the Surgeon-General’s senior staff who is not involved with the day-to-day business of the group.
Key stakeholders are being informed of the review and invited to submit views. The aim is to complete the review and announce the outcome by 31 March 2013.
School Teachers' Review Body
(11 years, 5 months ago)
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The Secretary of State for Education (Michael Gove)
The “21st Report of the School Teachers’ Review Body” (STRB) is being published today. Its recommendations cover the issues that were referred to it in February 2012. These were about reforming teachers’ pay in order to raise the status of the profession and contribute to improving the standard of teaching in our schools.
I am grateful for the careful consideration which the STRB has given to these important matters and fully support the guiding principles that it has used as the basis for its recommendations. Copies of the STRB’s 21st report are available in the Vote Office, the Printed Paper Office and the Libraries of both Houses, and online at: http://www.education.gov.uk and http://www.ome.uk.com/.
The STRB has made recommendations on a pay framework that seeks to raise the status of the profession, support professional development, and reward individuals in line with their contribution to improving pupil outcomes, enabling the most successful teachers to progress faster than at present on the basis of annual appraisal. It proposes greater autonomy for schools to set teachers’ pay within that broad national framework, alongside increased accountability for high professional standards and contribution to pupil progress.
I am grateful to the STRB for these recommendations and, subject to the views of consultees, I intend to accept all the key recommendations. I also intend to accept the more detailed recommendations and the consequential recommendations, but wish to give notice that there are some areas to which I will wish to return in a future remit for further consideration by the STRB. This will include the application of a 1% pay uplift for the two years following the end of the pay freeze, as set out by the Chancellor in the 2011 autumn statement. The statutory minima and maxima for classroom teachers’ pay will be uprated by 1% in each year 2013-14 and 2014-15. Schools are free to determine the extent of pay uplifts to teachers within the statutory minima and maxima, and will be able to provide an uplift of 1%, in line with any overall uplift in pay in the public sector, if they so choose.
As regards the recommendations on implementation, I broadly accept these in principle, but will want to consider them further before reaching firm conclusions on whether they represent the most effective and practical way of implementing the key recommendations.
My detailed response contains further information on the matters.
Annex to written ministerial statement
School Teachers’ Review Body’s (STRB’s) recommendations and response from the Secretary of State for Education.
[The following sets out the full set of recommendations from the STRB as published in the 21st report (CM 8487) on 5 December 2012, together with the response from the Secretary of State for Education. The STRB’s recommendations below.]
The Secretary of State for Education (Michael Gove)
The 21st report of the STRB is being published today. It covers matters referred to the STRB in February 2012. Copies are available in the Vote Office, the Printed Paper Office and in the Libraries of both Houses and online at: http://www.education.gov.uk and http://www.ome.uk.com/.
In making its recommendations, the STRB was asked to review the current provisions for teachers’ pay and consider;
how the pay framework for teachers should best be made more market facing in local areas;
how the pay scales, including the main and upper pay scales, should be reformed to more effectively link pay and performance, including arrangements for progression;
what other reforms should be made to teachers’ pay and conditions in order to raise the status of the profession and best support the recruitment and retention of high-quality teachers in all schools.
I am grateful for the careful consideration which the STRB has given to these important matters. I am inviting comments on the STRB’s report and my response to its recommendations by 4 January 2013.
The STRB has recommended:
Replacement of increments based on length of service by differentiated progression through the main pay scale to reward excellence and performance improvement.
Extension to all teachers of pay progression linked to annual appraisal (which is already established for more senior teachers). Appraisal should be against a single set of teaching standards, and individual objectives, with a strong emphasis on professional development.
Abolition of mandatory pay points within the pay scales for classroom teachers, to enable individual pay decisions, but with retention at present of points for reference only in the main pay scale, to guide career expectations for entrants to the profession.
Retention of a broad national framework, including the higher pay bands for London and fringe areas and an upper pay scale as a career path for experienced teachers who make a wider contribution to the school.
Replacement of the unnecessarily detailed threshold test for progression from the main to the upper pay scale, with simple criteria based on one set of teacher standards. This will create a consistent progression path from graduate entry to the top of the upper pay scale and allow schools to promote the best teachers more rapidly.
Local flexibility for schools to create posts paying salaries above the upper pay scale, enabling some of the very best teachers to remain in the classroom and lead the improvement of teaching skills.
More discretion for schools in the use of allowances for recruitment and retention and freedom to pay fixed-term responsibility allowances of up to £2,500 a year for time-limited projects.
Reinforcement of the responsibility of head teachers to manage staff and resources and of governing bodies to hold school leaders to account for managing and rewarding the performance of teachers in the interests of pupils.
On the basis of the above, a much simplified “School Teachers’ Pay and Conditions” document, including a brief guide to the national framework and the flexibilities open to schools.
I am grateful to the STRB for its consideration of the issues and, subject to consultees’ views, I intend to accept all these key recommendations in full. I regard these recommendations as providing the framework to move towards a more flexible and simpler system, where the emphasis is on pay progression related to performance and greater autonomy for schools in deciding how to reward their teachers. I particularly support the aim of enabling the best teachers to be promoted more quickly than is currently the case and rewarded accordingly. I note the STRB’s comments about these recommendations representing a first stage of reform and that they would welcome an opportunity to consider other issues, including leadership pay and teachers’ conditions, in a subsequent remit. I intend to issue a further remit to the STRB next year to ask for their advice about how to implement the 1% pay uplift for the two years following the end of the pay freeze. The statutory minima and maxima for classroom teachers’ pay will be uprated by 1% in each year 2013-14 and 2014-15. Schools are free to determine the extent of pay uplifts to teachers within the statutory minima and maxima, and will be able to provide an uplift of 1%, in line with any overall uplift in pay in the public sector, if they so choose.
The STRB has also further recommended:
The retention, for now, of the four geographical pay bands as the starting point for recognising broad labour market differences which bear widely on recruitment and retention.
Differentiated performance-based progression on the main pay scale to enable teachers to progress at different speeds, with higher rewards and more rapid progression for the most able teachers.
More flexible performance-based progression to and within the upper pay scale, assessed against substantially simplified criteria, enabling abolition of the bureaucratic post threshold standards.
Local discretion to pay a higher salary to the most successful teachers (akin to AST) if such a post is required and meets simple yet demanding criteria on leading improvement of teaching skills.
No change to the core TLR provisions already in the STPCD.
Fixed-term TLRs for time-limited projects, with non-safeguarded payments in a range between £500 and £2,500 per annum.
Removal of the three-year time limit for recruitment and retention, subject to a formal review by the school of all awards on a regular basis.
The Department communicate clearly to schools the scope for them to make greater use of existing discretionary recruitment and retention payments available under paragraph 50 of the STPCD to respond to local market needs, including case-study examples of good practice.
The Department prepare a much simpler document for publication in autumn 2013.
In addition, the STRB has made a number of consequential recommendations:
No obligation for schools when recruiting to match a teacher’s existing salary on either the main or the upper pay scales.
The requirement for two consecutive successful appraisals for progression purposes on the upper pay scale be discontinued.
The existing post-threshold, AST and ET standards be abolished.
The AST pay spine and ET pay range be discontinued.
Again, subject to consultees’ views, I intend to accept all these detailed and consequential recommendations. I believe that these represent a significant step in the process of reform and provide the scope for further flexibility at a later stage. For instance, I welcome the recommendations in respect of teaching and learning responsibility payments and recruitment and retention allowances, but would want to ask the STRB to revisit the whole area of allowances in a future remit.
Finally, the STRB has made a number of recommendations about implementation. It has recommended:
The existing points on the main pay scale should become purely reference points.
The Department consider how to give effect to the detailed recommendations on implementation, including:
A clear expectation of progression to the maximum of the main pay scale, subject to good performance;
An option for no progression without the automatic implication of capability proceedings;
Progression to reference point M2 for NQTs on successful completion of the induction period;
All pay progression to be dependent on a written recommendation based on timely completion of an annual performance appraisal in line with the pay policy of a school.
The Department develop guidance or a tool-kit to help schools develop systematic and transparent local approaches to pay progression.
A basic eligibility requirement for teachers applying for the upper pay scale, who must be highly competent classroom teachers who have already progressed substantially towards the maximum of the main scale.
Criteria for access to the upper pay scale requiring candidates to have demonstrated:
Substantial and sustained achievement of objectives, appropriate skills and competence in all elements of the teachers’ standards; and
Potential and commitment to undertake professional duties which make a wider contribution (which involves working with adults) beyond their own classroom.
On the upper pay scale, the amount and timing of any progression recommendations should be at the school’s discretion, reflecting individuals’ differential contributions to the school.
School discretion to create a post for a teacher whose primary purpose is the modelling and leading improvement of teaching skills. Such posts should have a salary range fixed within the range between £37,461 and £56,950 (nationally), taking account of the challenge of the post and of internal pay relativities, with progression increases entirely dependent upon performance.
Discretion for schools to set salaries within the unqualified teachers’ scale without reference points and with performance based progression.
I broadly accept these recommendations in principle. I am however clear that the Department will need to consider further how best to implement the STRB’s key recommendations and that it would be helpful to discuss the details with other parties before reaching firm conclusions that the STRB’s proposals represent the most effective approach. For instance, we may wish to give further consideration to the appropriate criteria for eligibility to the upper pay scale. A requirement to have made substantial progress towards the maximum of the main scale could perhaps seem an unnecessary barrier if we are seeking to enable the best teachers to progress more rapidly. We will also need to ensure that we consider equalities issues as part of the process of implementing the recommendations and I will want to seek consultees’ views on these issues as well.
Gas Generation Strategy
(11 years, 5 months ago)
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The Secretary of State for Energy and Climate Change (Mr Edward Davey)
I am laying today before Parliament the Government’s gas generation strategy. Last week I set out in the annual energy statement the objectives of our overarching energy policy—to keep the lights on, to keep energy bills affordable and to cut greenhouse gas emissions. This needs to be delivered in a way that maximises benefits to the economy in terms of jobs, growth and investment. I also published details of our approach for reforming the electricity market which will be implemented through the Energy Bill.
These reforms will deliver investment in a range of new generating plant such as offshore wind, nuclear power stations and carbon, capture and storage equipped generation plant. Gas-fired power stations will also be essential to provide flexibility to complement the less flexible output from wind and nuclear plants. We have already set out our strategies for delivering increases in investment in low carbon technologies—renewables, nuclear and carbon, capture and storage. This strategy sets out the role we see for gas in electricity generation.
The strategy reaffirms the Government’s expectation that gas will continue to play a major role in our electricity mix over the coming decades, alongside low-carbon technologies as we decarbonise our electricity system.
Gas currently forms an integral part of the UK’s generation mix, accounting for nearly 40% of all generation in 2011. As a reliable, flexible form of generation, gas is able to provide a range of services to support the efficient functioning of our electricity network and help guarantee the security of electricity supply that is vital to our homes and our businesses. Gas, which emits half the CO2 of coal, has also helped the UK cut our carbon emissions.
However, the need to decarbonise the UK’s electricity system will significantly impact the role of gas and we need to provide clarity to investors about the future role of gas to enable the new plant we need to get built.
The role gas plays will be determined by the market, while keeping emissions within the limits set by the carbon budgets and consistent with a least-cost approach to the UK’s binding 2050 carbon reduction target. Both now and in the future we need a diverse generation mix that balances risks and uncertainties of different technology options, including uncertainty on future gas prices. However, we are likely to need significant investment in new gas plant.
Modelling by DECC suggests that up to 26 GW of new gas plant could be required by 2030, in part to replace older coal, gas and nuclear plant as it retires from the system. It also indicates that, in 2030, we could need more overall gas capacity than we have today, although operating at lower load factors. The modelling shows that gas could play a more extensive role, with higher load factors, should the fourth carbon budget be revised upwards.
A significant volume of new gas CCGT capacity is in the planning pipeline. There is currently around 15 GW of gas plant with consent and a further 2 GW is under consideration. However, only a small amount of that capacity is currently progressing to the construction stage.
Given the importance of gas to our energy mix, the Government issued a call for evidence on 2 May 2012 on the role of gas in the electricity market, to identify whether there are any barriers to bringing forward that investment in gas generation in the UK, and if so, what we can do to remove them. Respondents to that call for evidence identified a number of different barriers to investment.
The objective of the gas generation strategy published today is to reduce the uncertainty around gas generation for investors. Government recognise that support for other forms of generation could undermine certainty for investors in both low-carbon energy sources and gas. To this end, the Government are setting a sustainable and affordable cap on the levy control framework out to 2020. We are also reiterating that our approach to decarbonisation trajectories will continue to stay in step with other EU countries throughout the 2020s and consistent with a least-cost approach to our legally-binding 2050 decarbonisation objective and the fourth carbon budget.
In addition, and in response to the call for evidence, the strategy also provides clarity on electricity market reform including that the Government are legislating for the introduction of a capacity market. We are also introducing backstop powers in the Energy Bill that will enable Government to act in order to improve wholesale liquidity if necessary. In addition, we have brought forward proposals to improve the planning regime in each part of Great Britain by introducing greater flexibility for existing consents and have committed to consider improvements to front-loading requirements and provide more clarity on flexibility available for new applications under the Planning Act.
To ensure the security of our gas supply we support Ofgem’s intention to work with industry to consider the case for interventions to enhance gas supply security through improving the operation of the market, via increased transparency and measures to promote the standardisation of interruptible contracts, and their investigation into the price responsiveness of interconnector flows. The Government will consider whether there is a case for further measures to encourage gas storage, and will publish our findings in spring 2013.
To ensure we make the best use of our natural resources, DECC will establish an Office for Unconventional Gas and Oil that, working with DEFRA and other Government Departments, will join up responsibilities across Government, provide a single point of contact for investors and ensure a simplified and streamlined regulatory process. We will also be consulting on the terms and durations of licences, and on an updated strategic environmental assessment with a view to further onshore licensing.
My right hon. Friend the Chancellor of the Exchequer also announced plans to consult on an appropriate fiscal regime for shale exploration.
The strategy further outlines the Government’s commitment to supporting the development and commercialisation of carbon capture and storage technology, which will potentially enable both gas and coal to have a significant role in the future electricity market as a low-carbon technology.
NHS Pay Review Body/Senior Salaries Review Body
(11 years, 5 months ago)
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The Secretary of State for Health (Mr Jeremy Hunt)
I am responding on behalf of my right hon. Friend the Prime Minister to the reports of the NHS Pay Review Body (NHS PRB) and the Senior Salaries Review Body (SSRB) on market facing pay for their respective remit groups, which have been laid before Parliament (CM 8501 and Cm 8507). I am grateful to the chairs and members of the review bodies for producing these reports.
The Chancellor of the Exchequer on 7 December 2011 and I on 23 December 2011 asked the NHS PRB to consider how to make pay more market facing in local areas for NHS Agenda for Change (AfC) staff. The remit was for England only.
The NHS PRB found that the AfC pay system already has more extensive market facing features than in many other pay systems in large, national employers, in both the public and private sectors, to respond effectively to local labour markets. Additional freedoms are also available to foundation trusts introduced in legislation by the previous Government.
The NHS PRB found that there was not the firm evidence which would be essential to justify further top-down investment in additional market-facing pay in the NHS at this time. They do not recommend the introduction of centrally designed pay zones this year. Instead, the NHS PRB recommended a fundamental review of high-cost area supplements (HCAS), appropriate use of local recruitment and retention premia and regular review of AfC, including its flexibilities, with any negotiations brought to a conclusion at a reasonable pace. The NHS PRB agreed that should any market-facing approaches emerge from these developments they should be introduced incrementally to take account of affordability.
The Government welcome and accept all of the recommendations of the NHS PRB, including a review of HCAS and will take this work forward in partnership with NHS trade unions and the NHS Employers organisation. The priority is to continue to develop the AfC system and ensure that national terms and conditions are fit for purpose and support the recruitment and retention of good quality staff in the most cost-effective and efficient way.
The Chancellor and I wrote in similar terms to the chair of the SSRB. However, the Department of Health’s evidence noted that from 1 April 2013, the only NHS staff within the remit of the SSRB will be those relatively few very senior managers (VSMs) employed by the Department’s special health authorities and executive non-departmental public bodies, together with a small number in ambulance trusts that have not yet become foundation trusts. All other NHS organisations are free to determine their own pay and terms and conditions for their VSMs.
The SSRB recommended that no additional locality pay measures be added to the new VSMs’ national pay framework as the evidence pointed clearly to the market for VSMs being national rather than local. They observed that the new pay framework already has some flexibility, with safeguards, which should enable the NHS to recruit and retain sufficient numbers of suitable VSMs.
The SSRB also recommended that all NHS VSMs should be assimilated into and paid according to the new pay framework, on the basis of job weight, once the current NHS reforms have been fully implemented. Our view is that, to avoid increasing pay and costs unnecessarily, the new framework should apply to all new appointments. Existing VSMs should normally remain on their existing terms and conditions unless adjustments are required to comply with equal pay legislation.
The Government welcome and accept the recommendations of the SSRB, apart from the recommendation to assimilate all VSMs on to the new pay framework.
Justice and Home Affairs Council
(11 years, 5 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
The Justice and Home Affairs (JHA) Council is due to be held on 6 and 7 December in Brussels. My right hon. Friend the Secretary of State for Justice and I will attend on behalf of the United Kingdom. As the provisional agenda stands, the following items will be discussed.
The Council will begin in mixed committee with Norway, Iceland, Liechtenstein and Switzerland (non-EU Schengen states) where there will be an update on the second generation Schengen information system (SIS II). The UK will continue to reiterate its support for the continuation of the current SIS II project. The Commission has committed to deliver the central element of SIS II in early 2013.
The Commission will present its second biannual report on the functioning of Schengen co-operation and the application of the Schengen acquis. The report will form the basis for a political and strategic discussion.
There will be a report by the presidency on obstacles to effective information exchange, with a particular focus on the use of the Swedish initiative (on police information) and on Prüm (on DNA, vehicle registration and fingerprint data). More widely the Commission is undertaking a piece of work on information exchange and intends to publish a communication on the European information exchange model (EIXM). The UK believes that this piece of work should be incorporated into the EIXM to give an overall picture of the tools that are available to member states on information sharing.
Under AOB the Irish delegation will provide the Council with a presentation on its presidency programme, which is due to start on 1 January.
Over lunch there will be a discussion on EU visa policy based on the recent package of Commission documents on visas and growth, local Schengen co-operation, on reciprocity with third countries and the proposal on the common visa list regulation.
The main Council will start with a “state of play” discussion on the common European asylum system (CEAS), on which the presidency is keen to make as much progress as possible by the end of the year. The UK has opted in to the Dublin (III) and Eurodac (II) proposals. Negotiations on these dossiers are progressing well and both are now close to agreement. The UK participates in these measures but has not opted in to the three other directives which make up the CEAS.
The Council will discuss the annual report on the implementation of the EU counter-terrorism (CT) strategy. Member states have been asked to reflect on EU achievements on counter-terrorism over the last six months and consider where efforts should be prioritised over the next six months. This discussion provides a useful opportunity for the UK to set out its priorities and help shape the EU CT agenda. There will also be a presentation of Council conclusions on aviation security. This proposal to extend the threat-risk assessment methodology, developed to underpin the EU in-bound cargo regime, to other areas of EU-led aviation security is welcome. The UK was influential in establishing the EU in-bound cargo regime, which has raised the security bar for all air cargo entering the EU, and supports its wider application.
There will be a joint Justice and Home Affairs session on Thursday afternoon which will start with a mid-term review of the Stockholm programme. The presidency will present its own assessment of progress under the Stockholm programme, the EU’s five-year Justice and Home Affairs work programme, which was agreed in 2009. The presidency’s paper will be used as a basis for discussion, providing an opportunity to take stock of JHA work completed in the last three years and discuss priorities for work to be taken forward until the end of the programme in 2014. While the Government do not agree with the programme in its entirety, the UK supports stronger action against abuse of free movement rights, closer practical co-operation on migration and asylum, and attaches importance to agreeing the passenger name records directive.
This will be followed by items on the data protection framework. There will be an orientation debate on the regulation and a state of play update provided on the directive. The UK is participating in both these measures having decided not to exercise the opt out under the Schengen protocol in relation to the proposed directive.
The justice day will begin with the presidency aiming to agree a general approach on the proposal for a directive on the confiscation of criminal assets. The confiscation directive will create minimum standards for laws on the freezing and confiscation of instrumentalities and the proceeds of crime. The UK is still seeking changes to the text, particularly with regard to the non-conviction-based confiscation measure, which creates risks for our domestic civil recovery regime. The UK has not opted in to this directive.
Dependent on the status of related files progressing through the Economic and Financial Affairs Council the presidency will seek to gain a general approach on criminal sanctions for insider dealing and market manipulation. The proposal aims to establish minimum EU rules concerning the definition of criminal offences for market abuse. The UK has not opted in to this directive.
The presidency will be providing a state of play update on the proposed directive on the protection of the financial interests of the EU by criminal law (“the PFI directive”). The draft directive would repeal and replace the existing EU convention and protocols on protection of financial interests (PFI). The Commission presented the proposed directive at the October Council.
There will be an orientation debate on the proposals on matrimonial property regimes and the property consequences of registered partnerships. The proposals lay down the rules by which it is decided which courts have jurisdiction to resolve disputes on such matters, the law that should be applied and the mechanism by which decisions from one country are recognised and enforced in another. The UK has not opted in to these proposed regulations, and has no plans to opt in post-adoption.
The presidency will also seek to gain a general approach on the proposed regulation on mutual recognition of protection measures in civil matters, which was discussed at the October Council. The instrument aims to establish an effective recognition and enforcement process of protective/preventative orders among member states and complements the directive on the European protection order in criminal matters. The UK supports the overall policy aim of the proposal and has opted in to it. The proposal has yet to clear scrutiny in either House.
There will then be an orientation debate on the proposed regulation for the European account preservation order. This proposal aims to establish a self-standing European procedure to freeze the bank accounts of debtors in cross-border civil cases with cross-border implications to prevent assets being taken beyond the reach of the courts. The UK did not opt in to this proposal, but is playing a full part in the negotiations with a view to a possible post-adoption opt in.
Under non-legislative activities, the EU drugs strategy (2013-20) will be discussed. The strategy aims to reduce significantly the demand for and supply of drugs, to promote international co-operation, research, information and evaluation.
The presidency will also provide a state of play update on the accession of the European Union to the European convention on human rights. The accession by the EU will mean that the EU and its institutions are directly bound by the convention. The Government are keen to ensure that the accession agreement is workable and meets the needs of the EU and its member states as well as the needs of Members of the Council of Europe. The UK welcomes the presidency’s conclusion that binding internal rules on how accession will work in practice must be agreed before the accession agreement can be finalised.
There will then be a discussion on e-justice and the work achieved during the second semester of 2012. The aim of European e-justice is to provide a mechanism to make it easier for national authorities, citizens and businesses to access justice information and services from different member states using electronic means.
The Irish delegation will then provide the Council with a presentation on their programme for the presidency, which is due to start in January.
Over lunch, there will be a ministerial discussion on “Three years after the Lisbon
treaty in the criminal justice area”.
Prison Service Pay Review Body
(11 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
The Prison Service Pay Review Body (PSPRB) report on local pay 2012 (Cm 8488) has been laid before Parliament today. The PSPRB makes recommendations on remuneration for governing governors and other operational managers, prison officers and unified support grades within its remit in the England and Wales Prison Service.
This report is in response to the Chancellor of the Exchequer’s request for the PSPRB to consider how to make pay more market-facing in local areas for staff within its remit group. Copies of the report have been placed in the Vote Office, the Printed Paper Office and the Libraries of both Houses. I am grateful to the chair and members of the PSPRB for their hard work in producing this report.
The PSPRB recommendation on local market-facing pay is as follows:
The reforms as set out in “Fair and Sustainable” should be implemented in full before consideration of any additional local pay flexibilities.
The Government have accepted the review body’s recommendation, which is consistent with Government proposals, that the new pay arrangements in “Fair and Sustainable” should be given time to “bed in” before consideration of any further local pay flexibilities.
Employment, Social Policy, Health and Consumer Affairs Council (EPSCO)
(11 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
The Employment, Social Policy, Health and Consumer Affairs Council will be held on 6 December 2012 in Brussels.
There will be discussion on the posting of workers enforcement directive and Europe 2020. On the discussion on the posting of workers enforcement directive, the UK will clarify that any new enforcement measures must be proportionate and not impact on the single market. On Europe 2020 discussion, the UK supports the priority given in the annual growth survey to encourage growth and tackle unemployment. The Council will also be updated on the proposal for a Council directive on implementing the principle of equal treatment between persons irrespective of religion or belief, disability, age or sexual orientation and proposal for a regulation of the European Parliament and of the Council on the European globalisation adjustment fund (2014-20).
The presidency will report on the state of play on the proposal for a regulation of the European Parliament and of the Council on the European Union programme for social change and innovation.
Ministers will consider Council conclusions on combating violence against women and the provision of support services for victims of domestic violence. They will also adopt a Council declaration on European year 2012 on active ageing and solidarity between generations.
Under any other business, the presidency will provide updates on supplementary pension rights and the EU fund for the most deprived. The presidency will provide information on conferences held during the Cyprus presidency. Finally, the Irish delegation will outline the work programme of their forthcoming presidency.
Grand Committee
(11 years, 5 months ago)
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Enterprise and Regulatory Reform Bill
(11 years, 5 months ago)
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The Deputy Chairman of Committees (Baroness Fookes)
My Lords, I remind Members of the Committee of the usual rule that if there is a Division in the Chamber, we adjourn immediately for 10 minutes.
Clause 7 : Conciliation before institution of proceedings
Amendment 16A
Baroness Donaghy
“( ) Prior to the commencement of this section, the Secretary of State shall carry out an impact assessment into the effect of the introduction of proposed fees for the employment tribunal system and the impact this will have on the effectiveness of ACAS conciliation proceedings.”
Baroness Donaghy
Having sat through the first day of the Committee stage listening to a debate on a subject about which I know nothing, I have found out two things: first, that I was none the wiser at the end of the Committee but, more importantly, that the Minister conducts business at a brisk pace. I shall try to match that spirit.
This amendment is a potentially good new story for ACAS. I was chair of ACAS for seven years, and still feel part of the ACAS family, so my interest is obvious. I hope that the Minister does not think, therefore, that I am looking a gift horse in the mouth, but I do not want this to be a gift that keeps on taking.
The Government are building on something which already exists in voluntary form as a pre-claim conciliation, or PCC, and intend to make it compulsory as early conciliation, or EC. The ACAS voluntary system has been running since 2009; last year, in 2011-12, there were 23,777 cases, an increase of 34% over the previous year. Three out of four cases did not go to tribunal, saving cost and stress for employers and employees. Recent independent research found that if you include staff time and legal costs, employers save on average £3,700 compared with the costs involved once the tribunal claim is made.
If ACAS is given the necessary extra resources—and it cannot be done without them—we need clarity from the Government about how this is to be achieved. In the Government’s response to the consultation Resolving Workplace Disputes, they recognised that,
“there will be an increased burden on Acas that will require sufficient resourcing. This requirement will be met through the savings that will accrue to the Exchequer as a result of fewer cases requiring determination at ET”.
I think that ET means employment tribunal.
I must admit that that statement filled me with terror. ACAS and the Tribunals Service come under two separate departments—an unfortunate move in my view. What will the process be to identify the savings given the different timelines of the two systems—conciliation first and employment tribunals later? What will the framework among departments be? After all, we are talking about the Treasury, BIS and the MoJ. What precise impacts have already been identified? In another place, it was argued that consultation was unnecessary as the Government had already consulted on the appropriate charging points and fee levels for tribunals in December 2011. The Minister in the other House indicated that consultation had also taken place on the possible impact of fees as part of their assessment which accompanied the announcement in November 2011 of the introduction of early conciliation. I do not see very much about the impact of ACAS on either of those two assessments.
As ACAS put into its submission to the Government:
“The proposal to introduce fees into Employment Tribunals will mean a very significant change to the system which is likely to have an impact on how disputes are resolved in future”.
Clearly, we do not know how this will manifest itself until it is introduced. I am not asking the Minister to produce a crystal ball, which is why I will be moving an amendment later about a review after one year of implementation. I will also say something about unintended consequences in that amendment.
I believe that the impact of the changes will not just be on the process of resolving disputes and the resolving or otherwise of them, but that it will spread beyond the issues covered in the success criteria into much broader workplace matters. Will the extra ACAS resources be provided upfront and how will the criteria for success be measured? Will they be confined simply to a drop in tribunal cases? This is particularly important as a number of cases at employment tribunal are usually determined by the state of the economy or by how many multiple cases are under consideration. The statistics quoted are too often cases of double-counting, with the employment tribunal tail wagging the employment relations dog.
If insufficient attention is given to resourcing ACAS, I am concerned about the impact on other services. The helpline takes more than 1 million calls a year and in itself helps to prevent dispute by providing crucial information impartially to both employer and employee. It is a trusted brand and the continuing development of the website, collective conciliation and promoting good employment relations are all vital elements of ACAS’s work.
I do not need to remind the Minister that most people at work are not in a trade union. The introduction of employment tribunal fees will hold no fears for trade union members. No doubt the Minister will raise one cheer for being a recruitment sergeant for the trade union movement, maybe even two. It will not hold too many fears for reasonably well paid employees either, but it is the job of the ACAS council to be mindful of all employers and employees. There have been some extremely distinguished members of that council over the years: John Cridland of the CBI served for 10 years and the noble Lords, Lord Monks and Lord Morris of Handsworth, are also former council members.
By acknowledging the importance of ACAS and by giving it this new role, the Minister has got it right and I pay my compliments to him. Resourcing ACAS is a good thing in itself, not just as a forerunner to employment tribunals—but even as that it has an exemplary record. The ET system would have collapsed years ago if it had not been for the proportion of pre-hearing settlements reached. I hope the Minister can give me the assurances about resourcing that I seek and the information I ask for.
Lord Monks
I support my noble friend’s amendment. As she mentioned, I was a member of the council for a good, long time. In fact, I think I am the record holder at about 15 years. One of the pleasures of being a council member was that mostly when you have been associated with large organisations, you are very aware of complaints and people who are dissatisfied about the way the organisation works. That was extremely rare with ACAS. Its record of people, employers and workers alike, being respectful and grateful for the role that it played in sorting out particular disputes was very pleasing and satisfying. The evidence that has been gathered over the years of ACAS’s life shows that good value has been delivered for the public money that has gone into it. ACAS has been a well regarded body all around the country and in all parts of the community. I am pleased to see it getting some support and recognition, and an expanded role, in this Bill.
However, I have two concerns, which partly overlap with those already expressed. I hope the Minister will be able to allay some of those concerns. As all the changes in this Bill go through in this area, particularly in relation to unfair dismissal, will he agree that employees are going to be in a slightly worse position, at least, than they are at present? Is there not a tilt in the law, particularly on unfair dismissal, towards the employer? I will pick out one thing: the increased risk of an applicant having to put down a deposit to take their case through to a tribunal. Is that not going to make them more reluctant to take that risk? They are probably already in a most uncomfortable position, having been fired and now facing the possible ignominy of taking their case against an employer to a tribunal. I am concerned about that generally, but in particular that this is going to lead to a very long queue at ACAS. Will there not be increased demand for its services, with people more insistent that the conciliation stage delivers a result than perhaps they are at present, so that they then avoid the rather hazardous steeplechase course that leads to a tribunal?
I underline the point that the noble Baroness, Lady Donaghy, made about resources. This is not a cost-free exercise. ACAS is already a pretty busy organisation with a lot of people looking to it for help, very often in fairly desperate personal circumstances. If the Minister believes that the maxim for this part of the Bill is, “Blessed are the peacemakers”, then I hope very much that the peacemakers get some money to make sure they can do their job.
Lord Morris of Handsworth
My Lords, I, too, take the opportunity to give my support to the amendment before the Committee. I do so not just on the basis of my own past membership of ACAS but of the contribution that the organisation makes in the overall sphere of industrial relations. We have an institution with two special qualities: trust and confidence. That is what ACAS brings to the whole arena and the debate about industrial relations. It is respected on all sides of the argument; indeed, many overseas industrial relations forums look to ACAS for guidance and support. At a time when we are seeking to expand the economy, looking for growth and looking to develop new areas of economic activity, it seems we should be giving strength and support to the institutions that would enable stability in the workplace.
What is in the Bill so far represents a start but needs to go much further. I genuinely hope that in the course of this Committee’s deliberations, the overall value of what ACAS represents, brings to the table and can offer for the future will be strengthened much more than we have experienced; and that we do not see ACAS become part of what I call the “industrial football”, being kicked from one side of industrial ideology to another.
I hope that when the Bill has passed through its stages here, it will provide for ACAS the support structure for a new and invigorated form of industrial relations, strong and able to take its rightful place in the resolution of disputes. We will always have disputes, irrespective of how meaningfully we conduct our workplace relationships. On that basis, I support the amendment before the Grand Committee.
Baroness Brinton
My Lords, the terms under which ACAS is strengthened are very important, but first I want to reiterate a point I made at Second Reading and to which the noble Baroness, Lady Donaghy, has already referred: it is important to ensure that resources are available right from the start, not just post fees starting to trickle in. When I was a senior county councillor some years ago, I recall that we always believed in the principle of good housekeeping. If the funding of this is based on reducing the costs involved in employment tribunals over the longer run, there is clearly a cash flow problem in business terms before any savings can be made. It is vital that ACAS is staffed and resourced appropriately, so that it is able to pick up the ball and run with it.
I turn to the point made by the noble Lord, Lord Morris. I believe that ACAS is in exactly the right position. One of the great strengths of this Bill is that it recognises that going to mediation before the long wait—I have been involved in EATs both as an employer and as an employee in the past—is the better course. It can sometimes take up to two years for a case to be heard, and that is not good for either side. Early mediation is a good way of resolving this. My knowledge of ACAS over the years leads me to believe that it is in a perfect position to do this.
While I have sympathy with the amendment, I am not sure that it needs to be written into the Bill, but I would hope that the Secretary of State would automatically want to review something like this to ensure that it is actually providing the resources that are needed.
Lord Young of Norwood Green
My Lords, I support the amendment. I am still trying to get my head around the vision of the noble Lord, Lord Marland, as a recruiting sergeant, and I look forward to seeing him at the next factory gates recruitment session. More seriously, this is an appropriate amendment given the background against which the further involvement of ACAS is taking place. Let us be clear on the principle of what the Government are doing. We are at one with the principle of involving ACAS in mediation and conciliation. There is no argument against that. But, as a number of my noble friends have said, if the Government want the ends, they have to will the means. That is the real concern behind the amendment.
As my noble friend Lord Monks said, it is being introduced against the backdrop of a number of other changes being made to workers’ rights, such as the extension of unfair dismissal to two years and the introduction of fees. A lot is going on in this area. We are not opposed to the principle, but we are concerned about whether there will be enough resources. Although the noble Baroness, Lady Brinton, talked about a review, we are actually talking about the anticipation of an impact assessment. We agree about the need for a review, but that will take place in another amendment. I would be interested if the Minister could tell us what the effect of introducing conciliation right across the board will be. Has the situation already been assessed?
It could be said that to a certain extent this is a probing amendment, but we regard it as a serious one. Our concern is that if you want the involvement of ACAS and if it is going to function in a way that will enable it to carry out a conciliation and mediation role, we all need to be assured that the service has the necessary means to do it.
I look forward to hearing from the Minister as to whether the Government have assessed the impact of this issue, including on other areas such as fees. What do they see as the necessary resource requirements of ACAS in its new situation?
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Marland)
My Lords, I thank the noble Baroness, Lady Donaghy, for the amendment. It is, quite rightly, an interesting area to probe. I also compliment her on her work as chair of ACAS and the work of its board.
In summary, this is a nice problem to have. We all agree that ACAS is a terrific institution. It probably sounds rare for this Government to say that they thought it was a very good institution, but we believe strongly in it as an important place to resolve difficulties. That is why we intend to put much more in the way of resources into it, and it will become a fundamental block for early resolution of a lot of disputes. We know it acts fairly and properly, it has a good track record, and we are keen to support it.
I know that many noble Lords have read our recently published impact assessment on resolving workplace disputes, which helps to answer a number of issues that have been raised. We will produce in the new year a further impact assessment on how this process will work and whether the funding should be upfront, which the noble Baroness asked for. We are working to determine the extent of the funding and how best it is to be provided. I hope that by the time we get to the Report stage in the Chamber, quite a lot of the questions will have been answered.
It is important that we get it right and that we listen to the words of the chairman, who said, in front of the House of Commons Committee, that he was confident that ACAS would be adequately funded for its new task. Do not, therefore, take it from us; take it from him that he is confident he will get the right funding. We are working closely with him and the organisation to make sure that we do that. I totally accept and agree, as do the Government, that it is critical that ACAS is properly funded, and we will be able, in the normal course of its annual report, to see how that funding is operating. Noble Lords will be able to judge for themselves annually how that is improving and, through the normal avenues, determine that the progress we hope for on all sides of the House is being made as satisfactorily as possible.
I thank the noble Baroness for this probing amendment. It gives me an opportunity to lay out clearly how we are going to proceed. On that basis, I hope that she will withdraw the amendment and look to see how this develops in the next month or so.
Baroness Donaghy
I thank noble Lords who took part in the debate, and particularly the Minister for his response. As he said, it is a good problem to have, and I am glad that he has again publicly acknowledged the work of ACAS and the need to produce substantial funding. I asked four or five questions, and I understand that he is not in a position to answer them today. I note what he said about producing the impact assessment on the process, which is still being worked out. It may well be that by Report stage we will all be gloriously happy. Would it be helpful if I dropped him a note to remind him of those questions, or is he satisfied that they will appear in Hansard?
Lord Marland
Naturally, I have noted the questions and I will save the noble Baroness time because I have excellent officials working on this. We take her questions seriously, and I hope that as the assessment continues we will go skipping as lambs in the new year when we have seen the outcome.
Baroness Donaghy
I thank the Minister for that answer. We will be monitoring the situation closely and are keen to have answers about resourcing. In that context, I beg leave to withdraw the amendment.
Baroness Turner of Camden
“( ) Should the intervention of the conciliation officer not result in an agreed settlement, the claimant may proceed immediately to an employment tribunal.”
Baroness Turner of Camden
My Lords, in moving Amendment 17, I shall speak also to Amendments 18, 19 and 20, with which it is grouped. I put down these amendments to oppose this section of the Bill following the contribution I made at Second Reading because I feel that in many respects the Bill represents an attack on employment rights. My amendments are intended to enforce what I then said.
I have a great deal of respect for ACAS. As we know, Clauses 6 and 9 introduce early ACAS conciliation with regard to workplace problems. I do not oppose early ACAS attempted conciliation, but the Bill includes further steps before there can be a tribunal hearing. I think that these steps are intended to make it as difficult as possible for an employee to proceed further. That is why I propose an amendment which allows an employee, if ACAS intervention fails, to proceed immediately to a tribunal.
If the skilled intervention of ACAS does not produce a settlement, it is unlikely that further stages with different individuals will do so. This is particularly the case where it has to deal with the most difficult of disputes—those concerned with unfair dismissal. I gather that the Government are currently looking at a system of rapid resolution via ACAS for straightforward money-based claims such as alleged underpayment, perhaps, or failure to pay the minimum wage, and that sort of issue which could be dealt with very swiftly and easily by ACAS. I have no objection to that sort of procedure and neither, as I understand from its briefing, has the TUC.
However, unfair dismissal is a much more complicated issue. Failure to maintain oneself in employment can be life threatening for some people, and for many people to lose a job is a disaster, which often results in domestic upheaval and breakdown. It has occasionally resulted in suicide. Certainly, it leads to a lot of disturbance and heartache for the individual. It is a very life-changing situation for many people. For that reason it has to be treated differently from the kind of straightforward money issues that we have been talking about. Therefore, it is very important that if there has been an attempt by ACAS which has failed in a situation of that kind and the conciliation officer has not produced an agreed settlement, it should be possible for the claimant to be able to proceed immediately to an employment tribunal, as my amendment says. This is a special kind of case; it requires that sort of treatment and the individual should not feel that masses of other steps are in the way before he gets before a tribunal and gets his case heard.
For that reason I hope that the Government will be prepared to look at this amendment sympathetically because we are talking about individuals who are often very much at the end of their tether if they have been dismissed, perhaps after a long period of work for a particular company with no future alternative employment available. This is a very dire situation for many people and I do not think that a further set of steps should be placed in the way of them getting a tribunal hearing. I beg to move.
Lord Monks
I intervene again, although I will not make a habit of doing so. In my earlier remarks I referred to a steeplechase that the applicant needs to negotiate to reach the employment tribunal. The tribunal is not a sort of holy grail by any means. The average compensation payments are pretty low when you get there, although there are some spectacular exceptions, and often do not compensate for the loss of employment.
To all the points already introduced into the debate this afternoon, such as needing to be in a job for two years and having to go through the ACAS procedure, the Bill adds the issuing of a rather formal certificate, which the noble Baroness, Lady Turner, is concentrating on. You may then have to pay a deposit for some, or all, of your case and then you arrive in front of the tribunal, which does not have lay members—people who have direct experience a bit like yours—to give you a bit of reassurance.
It is a daunting prospect and, while I can guess some logic behind the need for an ACAS certificate at the end of the conciliation service, it raises a number of points. First, why is it necessary? It is not necessary now and I am not aware of there ever having been any state of confusion. If the two parties have not agreed, the case continues. Anyway, ACAS has to issue a certificate. How long it will take will depend on its case load and whether it is another bureaucratic stage. I know that the time clock does not start running until after the certificate is issued, but it seems that there is scope for some legal problems.
I would be interested in an explanation, if it is possible to get one today, on the reasoning behind this particular stage being put in. Is there some doubt about whether conciliation has failed? Is there a need to signal that conciliation has failed and that you cannot consider it any further informally in some way? Often, conciliation goes on right up to the tribunal itself, even maybe during the tribunal. However, if you have signed the certificate concluding that process rather formally, the informal scope for conciliation is reduced. I wonder if the Minister could explain a little more about this provision.
Lord Young of Norwood Green
My Lords, this is again a legitimate probing amendment. I, too, would be interested in getting some reassurance from the Minister about the process of conciliation. We hope that the conciliation process will work but there are going to be cases—I guess a significant number—where it does not. I suppose that the aim is to ensure that we do not insert any more delay than is necessary. The point about a certificate has already been raised. It would be useful if the Minister could confirm that the clock does not start running again until after the certificate has been issued.
Lord Marland
I am very grateful for this probing amendment—well I am sort of grateful, as much as one can be for an amendment. I recognise the noble Baroness’s direction of travel—time is crucial for someone who has lost their job. The whole point is to be able to get a quick resolution so they can go back and find another job or sort out the problems between them. We all agreed in an earlier amendment that ACAS is in an unrivalled position to do that and that is why we are very keen to support this direction of travel.
Having been quite a significant employer myself—and employee, as I thought in my own mind—and on one rare occasion been associated indirectly with a tribunal and seen how it was operated, I have deep concerns for both the employee and the employee about the terrible time it takes to go through a tribunal. It can be months before a decision is made and hours can be spent often on quite simple things. Both employee and employer are hung out to dry for months on end, not knowing what the cost is going to be, what the result is going to be and whether they will be able to go back to employment. It therefore seems to me that this is a simple process putting firmly in the domain of ACAS the opportunity to resolve an issue before going to the tribunal. It does not stop a party going to the tribunal, of course—it is well within their rights to do so. There is every opportunity to do so.
I emphasise that the Government are open to listening to other alternatives, if a better alternative is found, but I think that most of us here think that ACAS is the right place to go and that if we can have a speedy resolution to our problem, we should do so. I know that other noble Lords have had experience in this area. We would be open to suggestions from the noble Baroness about alternatives.
I am not sure that I can deal with the specific point that the noble Lord, Lord Monks, mentioned because he knows far more about it than I do. I would like to consider the question and drop him a note on it. It is something I want to get my head around. He has probably set me a huge elephant trap that I will stumble into unbeknownst.
I hope that I have given the noble Baroness a clear line of travel and—
Lord Young of Norwood Green
I want to be clear what the Minister is going to clarify. I asked about when the clock starts. Is it after the certificate has been issued? I would be grateful if that could be clarified.
Lord Marland
I can clarify that. The certificate is necessary to demonstrate compliance with the obligation. It would have to be issued within that framework.
Baroness Brinton
It would be very helpful for other Members of the Grand Committee to be able to see the Minister’s letter to the noble Lord, Lord Monks, and any other replies that are circulated.
Lord Brooke of Sutton Mandeville
My Lords, before the noble Baroness rises to make her final decision, I intervene to make the point that there is sympathy around the Grand Committee for the case that she has been putting forward. I have only once been involved in legal proceedings. It was an industrial tribunal. I was advised that once the person who was taking us to the industrial tribunal had instituted proceedings, I should not be involved in giving her advice, against the possibility of misunderstanding, but I was very strongly of the view that she was making a mistake. Our barrister was the noble and learned Lord, Lord Irvine of Lairg, before he ascended to that role, and his pupil, who accompanied him, was the future Prime Minister. They were effective in arguing our case, and the tribunal found that there was no proper cause for compensation to be offered. The irony of the whole thing was that the fees of the noble and learned Lord, Lord Irvine of Lairg, and whatever he provided to the former Prime Minister exactly equalled the money that we had been prepared to give her before she instituted the proceedings against us.
Lord Marland
My officials have suggested that I clarify as I was not perhaps as clear as the noble Lord wanted. They have passed me a note saying that the clock stops when the claim is received by ACAS and starts again when the certificate is received by the claimant. Is that as clear as mud?
Baroness Turner of Camden
I thank the Minister for the very sympathetic response he made to the amendment. I welcome his statement that the Government would also welcome a speedy resolution of these issues. I shall consider very carefully what he said. It seems to me that we could perhaps work towards a form of wording so that in the kind of cases that I have been particularly concerned with, a speedy resolution would be possible. That is terribly important in this kind of case, in particular. I will withdraw the amendment now, but will probably come back on Report with a different form of wording. I beg leave to withdraw the amendment.
Baroness Donaghy
“(3) The Secretary of State must within 12 months of the coming into force of this Act, and afterwards annually, prepare and lay before both Houses of Parliament a report on the workings and implementation of this section.”
Baroness Donaghy
In moving Amendment 20A, I recognise that the new procedures will be implemented. The importance of an early review is to find out not only the impact that they are having on the process and the working relationship between tribunals and ACAS, but also whether there is a wider impact on employment relations, as I mentioned in speaking to an earlier amendment. A review will help to assess the issue of adequate resourcing—I have said most of what I want to on that subject—and to identify any unintended consequences of the new procedures.
First, I welcome the statement in the Explanatory Notes that an ACAS conciliator will be able to continue to try to achieve a settlement after the prescribed period has expired. This is important, as there are various stages before an employee and the employer come to terms with a reality check. Experience shows that there is a high proportion of successful conciliation and settlement in the first two to three weeks of an application being submitted—about a third of the total. Then there is a lull and another flurry of settlements when the tribunal date is announced. Finally, some settlements are reached at the door of the tribunal. Conciliation officers see themselves as part of that whole process and it would be counterproductive to put an end-stop on their involvement.
Secondly, it is important to see how the issuing of certificates by ACAS is working—some of that discussion took place when we were considering previous amendments. If it is carried out in the context of an underfunded organisation with inadequate staffing levels, it will simply be an additional administrative process for both parties. It will not reduce the number of cases to tribunal; in fact, the system could collapse under the weight of applications.
Thirdly, it is essential that as few deadlines as possible are set within the process. Keeping it simple will avoid confusion and maximise the potential for successful conciliation. An early review of the legislation will help to tease out whether the process is unnecessarily rigid and therefore counterproductive. It will also help to see whether the system is well balanced. Looking at the possible extreme outcomes, you could have unsuccessful conciliation because an employer holds out in the hope that an employee cannot afford to pay the tribunal fee. At the other extreme, an employee who has taken the decision to pay the fee to the tribunal will be psychologically unprepared for conciliation.
Then there is the issue of no-win no-fee lawyers, who might see a vacuum in the market. For a small fee, they might promise an assessment of the case and then pick the more promising cases to tribunal for a fixed or percentage fee that covers the cost of the tribunal fee. Far from reducing the number of ET cases, it could provide a welcome commercial opportunity for some and flood the employment tribunal service.
The ACAS conciliation process depends for its success on examining the strengths and weaknesses of each party’s case and having the opportunity to challenge perceptions of the merits of each side’s case to encourage consideration of different perspectives. If that process is curtailed in any way—not intentionally, of course—the Government will not succeed in their objective.
Citizens advice bureaux also provide advice and sometimes representation to some applicants. Some 250,000 people, I think, went to a CAB last year on employment-related problems and 1,900 were represented by the CAB at an employment tribunal. With the reductions in funding it is facing, it is likely that more people will be at risk of falling into the hands of those whose motivation is making money rather than good employment relations. It is against that background that I am asking the Minister for an assurance that a review will take place as early as practicable, just to make sure that the Government have the balance right. I beg to move.
Lord Young of Norwood Green
My Lords, this is an eminently sensible proposal and I am sure that the Government are going to review the workings of ACAS in the light of the new procedures. My noble friend has set out in graphic detail the likely impact of what is taking place. We need to ensure that we get this right, because if we do not, we are likely to see the law of unintended consequences take effect. I shall be interested to hear from the Minister what review process the Government have planned, and what the timescale is.
Lord Marland
I can give noble Lords a very simple answer because both the Government and the people observing us will want to make sure that there is a review of how ACAS is performing. As the noble Baroness will know better than I, having been the chair of ACAS, it has to report annually to the Secretary of State, and we will insist on that. For those who are interested, it is set out in Section 253 of the Trade Union and Labour Relations (Consolidation) Act 1992. I can tell the noble Baroness that early conciliation will form part of that report, so in our view there is no need to have a separate report from what is embraced in the annual report. I hope that satisfies the noble Baroness, but I want to say that it is fundamental that this is reviewed and that the whole thing is taken seriously. The report is published and will be available in the Library of the House, so everyone has an opportunity to read it and make sure that everything is progressing in the way we all hope it will.
Baroness Donaghy
I thank my noble friend Lord Young for his contribution and the Minister for his answer. I am afraid that I am not entirely satisfied, mainly because the ACAS council report has to be essentially apolitical and must not comment on government policy, so the likelihood is that the judgment will be made on the efficiency of its organisation and the effectiveness as it sees it of the new procedure. It would not take account of the things I mentioned on an earlier amendment, including the wider impact on employment relations; that is, elements that might be said to be more political, with a small “p”. It also does not take account of an independent assessment of the adequacy of funding or of the impact at employment tribunals because it would not be proper for ACAS to comment on how the tribunals run their business. There are concerns, perhaps more particularly around the certificate. ACAS might have its own judgment about how effective it is as a process, while an independent assessment might make a different judgment. I am not saying that that would happen, but just relying on the annual report of the ACAS council may not provide the information we are looking for.
In agreeing to withdraw the amendment, I hope that the Minister will take account of the points I have made.
“(6E) The Secretary of State and the Lord Chancellor acting jointly, shall consult on—
(a) the level of professional attainment required by legal officers to carry out provisions in subsection (6D);(b) the appropriate remit of proceedings that an appointed legal officer could determine; and(c) the appropriate mechanism for appeal,with regards to the provisions of subsection (6D).”
Lord Young of Norwood Green
My Lords, I remind Members of the Committee that all employment disputes are currently determined by full employment tribunals or by an employment judge sitting alone. Legal officers can be appointed under the Employment Tribunals Act but can determine cases only where the parties have agreed the terms of determination or the case has been withdrawn.
To date, no legal officers have been appointed in the employment tribunals system. Clause 10 states that legal officers should be able to determine specified types of claims where both the employee and employer have consented in writing. We welcome that aspect. However, while we support the principle of rapid resolution of disputes, we have some concerns about the proposal to permit legal officers to determine employment disputes. Legal officers currently do not receive the equivalent training to that of employment judges and may not be employment law specialists, but decisions made by a legal officer would have the same status as an employment tribunal decision. If legal officers are to determine some basic cases, it is essential that any decision can be reviewed by an employment judge or through an appeal to an employment tribunal.
The amendment therefore requires the Secretary of State and the Lord Chancellor to consult on the level of professional attainment, and the remit and mechanism for appeal, of legal officers empowered to make determinations and decisions. We see this as an important area. Although some of these cases may appear to be basic, there can indeed be complex problems underlying them. Therefore, the training and remit of legal officers are fundamentally important. I should welcome a response from the Minister. I beg to move.
Baroness Donaghy
I was having second thoughts on whether I should speak to this amendment because I would not really be doing so with my former ACAS hat on. However, that should not prevent me commenting.
The proposal for legal officers has been dusted down off the filing cabinet many times. I was a member of industrial tribunals, as they were then called, from 1974 to 1989, and therefore have had a long involvement on both sides of the fence on this. I am sure that the idea of legal officers was discussed in the 1970s, 1980s, 1990s and the noughties. In fact, the idea must be so old that it must be growing hairs like gooseberries. I congratulate the Minister on again bringing out this item from the filing cabinet. However, I should point out that that does not make it an antique worth buying.
This is intended to be a cheap way of obtaining legal services, and I suspect that the legal profession will wake up to this one quickly. I suspect that it will be disliked by employment judges; equally, there is a danger that it could second-guess the conciliation process at ACAS. Even more equally, in a time of austerity when the Government are seeking to cut the number of public servants, I should have thought that it was fairly unlikely that a whole platoon or army of these, dare I say, young law graduates or whoever will be employed by any department to do this job. And, if so, which department would it be? Will they be part of the Employment Tribunals Service, or will they be direct employees of BIS or another adjunct of the Ministry of Justice?
I am sorry that in this case I cannot be very enthusiastic but I support the amendment because I think that it may at least give some idea of government thinking on this matter. However, I give a warning that, even though this measure has been recommended many times, the devil is in the detail and the practicalities usually overcome any action on this.
Baroness Turner of Camden
My Lords, I originally intended to delete from the Bill any reference to this form of officer. However, I must point out that the Law Society, which has also briefed me along with the TUC and many other bodies, has already expressed some concern about this provision. It says:
“The Bill provides a new power for Legal Officers to make determinations in some (to be specified) Employment Tribunal Claims. The Society recognises the potential for Legal Officers to perform some duties, but stresses that they must be suitably qualified”.
It is clearly concerned that we will have people who are not suitably qualified making decisions on some of these highly complex potential arbitration cases. Therefore, I echo what my noble friend Lady Donaghy has said: the Government have to be rather careful about this. Given that specialist advice warning, I hope that they will look at it very carefully.
Lord Marland
Members on the Benches opposite make some very timely comments on this amendment because at the moment the Government are reviewing the response to the consultation. One of the elements of that review is rapid resolution, which involves legal officers, so we will obviously consider the points that the noble Baronesses and the noble Lord, Lord Young, have made. As I say, they are timely.
I say in response to the noble Lord, Lord Young, that decisions of a legal officer would be reviewed by a judge, so there is someone looking over their shoulder, and any decision by a legal officer could be reviewed or, indeed, reversed within the existing provisions in the employment tribunal rules. I think we have a level of comfort there but, as I said, this is a timely amendment. It is not something on which we have resolved our position. Noble Lords have identified a number of areas of concern. As we are in the middle of a consultation process, we will obviously take those into account. We will, I hope, have come to our conclusion by Report, when we can talk further and explain what is going on. On the basis of those comments, I hope that the noble Lord will withdraw his amendment.
Lord Young of Norwood Green
I thank the Minister for the assurance that he will give us a more detailed answer prior to Report, pending the results of the consultation. We have stressed the importance of ensuring that the individuals have the right training. We have also stressed the importance of establishing,
“the appropriate remit of proceedings that an appointed legal officer could determine”.
Given the assurances that I have received from the Minister, I will withdraw the amendment. However, if we do not get a satisfactory response, we may return to it on Report. I beg leave to withdraw the amendment.
Lord Young of Norwood Green
This is another important area of the Bill about which we have concerns. It seems to us that in the desire to reduce costs there is a real danger that the whole nature of employment tribunals will fundamentally change. We need to remind ourselves that historically these tribunals have had lay representation on them. That was the very foundation of what were previously called industrial tribunals. All our information and evidence is that the participation of lay representatives is much appreciated and is an integral part of the proceedings that ensures that justice is seen to be done. It gives an essential level of knowledge, experience and expertise and ensures a diversity of views.
Lord Monks
I support this amendment. Clause 7 is one of the key clauses in this part of this rather complex Bill, and I object to it. It rips up, rather contemptuously, several decades of history in the employment field.
There is general agreement that worker and employer representatives on tribunals do a good job. The original idea was from the Conservative Party, way back in the 1960s. From my experience over many years, I know that presidents of the Employment Appeal Tribunal have often said that the views of lay members were crucial. Lay members had a sense of what was going on and a feeling for the issues in the workplace from which judges would inevitably be rather distant. Often, judges followed the view of the lay members. They made sure it complied with the law, checked that there was nothing wrong and would adjudicate if there was a disagreement between the two, which often there was not. Very often, there was consensus between the employer representative and the worker representative. They were not a marginal presence sitting on the edge of the legal proceedings; they were right in the middle of them and central to them.
I acknowledge that times have moved on and tribunals and the Employment Appeal Tribunal have become more legalistic than we hoped. We hoped there would not be eminent QCs and eminent juniors on the kind of case that the noble Lord, Lord Brooke, referred to, that these things would be sorted out more cheaply and informally before a tribunal and that we would see everything done in a much less legalistic and more cost-effective way. However, over many years, the legal profession has colonised the tribunal system to a regrettable extent.
The lay members on the employment tribunals, originally, and on the Employment Appeal Tribunal have tried to push that back a little, keep its feet firmly on the ground and keep the costs of the whole exercise down. Clause 11 says that we are giving up on that and that the legal profession can have the lot, at least the ones that manage to get round the Grand National course and actually get their case there without falling at several Becher’s Brooks on the way. Inevitably, when they do get there, the whole thing will be more legalistic. That is not a criticism of the judges—I have seen some very fine ones in the Employment Appeal Tribunal, and elsewhere—but the whole experience of the EAT will be much changed and made much weaker than needs to be the case.
I have been thinking about how judges might operate this, because the Minister would say, “Well, if he wants one, the judge can have a couple of wing people—even four, we are expanding it”. It could look like the Nuremberg war crimes tribunal. “Why do we need an extra two?”. I do not know where that came from, as we have never felt that one from each side was not enough. I would be interested to know where it did come from.
I can see the first judge who comes forward after this Bill goes through saying, “I think I need two lay helpers for this particular case”. I do not think that many judges will feel comfortable doing that. Such judges would be regarded as a wimp by their peers, who will ask, “Why do they need a couple of people holding their hand when dealing with these cases? What effect is this going to have on the budget, if we have to pay some expenses for the lay members? Is this not all about cost savings, economies and making sure that the cuts work effectively in this area?”.
I am interested in the Minister’s reply to these points. I hope that the Government will pause before they go further down this road. They have already done it, in a way, to employment tribunals. The same provision is already there and I suppose it will be argued that this is a logical continuation. However, it is the continuation of a bad practice; and it is in the peak body this time, which makes it qualitatively different.
Baroness Turner of Camden
My Lords, we have got on to talking about Clause 11, which I opposed at Second Reading on the basis that it was quite unnecessary. I did not really understand why the Government decided to proceed along these lines because the tripartite system that we have works extremely well. The lay people who serve in it are highly respected and in no way put off by the somewhat legalistic environment. They are quite well able to look after the whole situation as concerns workplace arrangements—they know about workplaces, which is why they are appointed to serve on the tribunal.
I still do not really understand why the Government believe that a judge sitting alone on unfair dismissal cases is likely to be more competent. Do they expect him to find more ways to go against the employee? Have they decided that they want a judge sitting alone because the decisions are more likely to be the kind that the Government would like? We know that they are not very keen on tribunal hearings anyway. I want to know why the Government think that this is a good idea.
In the document that the Government have already issued, they have indicated that the points at issue would be legal points, which is why it would be a good idea to have a judge sitting on his own. However, I remind the Government that they have already introduced LASPO, which means that there is no access to legal aid in employment cases. In fact, the individual who is not represented by someone he can afford to appoint to look after him, if he does not have a union to support him, will be entirely on his own and will have no access to any form of legal aid because LASPO has decided against it, as far as employment cases are concerned. An unfortunate individual such as this would have only himself to rely on before a judge sitting on his own. That is not a good idea. It would be far better to have lay people still operating, and I very much hope that the Government will reconsider their position here because it is not fair. It means that individuals will very often, if they are taking up their case themself, be left without anyone to represent them. That is not a good idea if they are going before a judge sitting on his own who is guided simply by legal principles, not by what happens in a normal workplace.
Baroness Brinton
I have slightly different concerns about Clause 11, but they stem from the same starting point. They are about why the Bill proposes to give the judge much more power to decide on whether a panel should sit with him or her to hear an appeal.
Given that the practice is already there, evidence shows that lay people are brought in to assist a judge, usually on a controversial decision that requires expertise from both the employer and the workforce background. As has been mentioned by other noble Lords, lay members of these appeal panels frequently are respected by both parties. That balance has been an absolute strength of the appeal panel. I am struggling to see why it should become automatic that the judge would sit on his or her own.
I rather pointedly said “his or her own” because I also want to raise the issue of the diversity of an appeal panel when a judge is sitting on his own—it is usually “his” own—and diversity has, ironically, been provided by the lay members. Can the Minister give us some indication of the action the Secretary of State would require to ensure that there was diversity—essential in employment hearings—in appeal proceedings if this process becomes commonplace?
I come back to my initial point: I do not understand why the balance has been tipped from the current situation, in which when a difficult decision has to be made, judges are absolutely clear that they should bring in people, to a proposal in the Bill that presumes that the judges are likely to want to work on their own initially.
Lord Marland
When I was being taught how to speak—a long time ago and I have obviously not improved much—I was always told, “Paint a picture of somewhere and everyone will listen to your every word”. It is very hard not to hang on to every word of the noble Lord, Lord Monks. One moment he is at the Grand National; the next moment he is at the Nuremberg trials.
These matters are part of our history, and the words that I was most struck by were that we have to move on. This part of the legislation is about moving on. I am afraid that it is a simple fact that these cases are decided on a point of law. The rule of law defines these cases, and you therefore have to have a lawyer to decide the case. As an employer or an employee— I have been both—I would want to know that I was being supported by the rule of law, which is a fundamental part of this country. Therefore, the judge is the only person I would want to hear from in either of those situations, because the case is decided only on a point of law, not on any extenuating circumstances that may come in.
Lord Morris of Handsworth
It is accepted that ultimately the decision is on a point of law, but the law is guided by the facts of the case. Therefore, it is important to recognise that facts guide law. On the basis of what has been said so far, it seems to me that we are turning the argument on its head in thinking that it is only law and not fact.
Baroness Brinton
Does the Minister agree that appeals on employment law are set firmly in the context of employment practice? Concepts such as the range of reasonable response depend on a good understanding of how a reasonable employer would in practice handle a dismissal. Therefore there is a value to having lay members assisting the judge in that decision.
Lord Marland
Employment judges know as much about these things as we in this Room do. They have been doing case after case. We are presupposing that judges know nothing and that they are incapable of making decisions based on the rule of law on a subject that is determined by what the law says, not by: “Oh by the way, you must understand that there are extraneous circumstances that may affect the lay person, who quite rightly is sympathetic to them”.
Ultimately, the rule of law prevails. It is the interpretation of the law that prevails, and therefore it is a judge who is qualified to interpret the law, so I do not agree that there is a huge import in having lay members. Of course, as the noble Lord, Lord Monks, who knows so much about this subject, quite rightly says, the judge has the opportunity to choose a panel, and we can get into arm-to-arm combat on whether it is two or four people. Whatever one says, you are damned, in a sense. The judge has the opportunity to have lay members if he thinks there are circumstances he does not understand or working practices with which he is not familiar. Ultimately, these people are being judged on what the law says by someone who can interpret the law, not by people who may or may not understand the law in some circumstances. I am afraid I am not persuaded in this instance—by people who have great knowledge in this subject—that it is in the interests of either party to have lay people, except on cases where the judge himself decides he needs that support.
Baroness Turner of Camden
Does the noble Lord not recall that his Government introduced a law, which we now call LASPO, which denies any kind of legal aid rights to anybody in employment cases? Individuals, unless they are represented by a union or can afford legal representation themselves, have no representation because LASPO forbids it.
Lord Marland
I note what the noble Baroness says, but I do not think that it has any relevance to this amendment. This amendment is about who is going to decide, who is going to interpret the law in this particular case. Therefore, with great respect, I hope the noble Lord, Lord Young, hears what I have to say because it is actually what people will want.
Baroness Donaghy
I want to emphasise that I think that the noble Baroness, Lady Brinton, had it spot on about the reasonableness issue. I know a great number of judges who sit on employment tribunals, and their background is not always in employment relations. They are interchangeable. They go on to the High Court in many cases. I think that they value very much an area of law which is a much more vague part of our legal system in the sense that it is about the workplace and the different power structures of a workplace.
It is important to the judges that they have people with experience of the employment relations world—not employment law, but the employment relations world. That comes back to what I said earlier. I accept that, as the Minister said, this is about whether the case was carried out properly, but it is in a context where the employment situation has to be taken into consideration. We are not talking about equals in a power struggle; we are talking about a very different level of perception. This is about perception: it is important that people see that, up there, there is an employer and an employee sitting in judgment. I think that the applicant and the respondent would be much more likely to respond to a result—as I said, perception is important in the employment world—than they would if a judge, possibly a brand-new judge who had not sat on the case before, were sitting alone. This issue is important, and we would like the Minister to reconsider it.
Lord Marland
I am not denying the issues that the noble Baroness refers to. No one is. We completely understand those issues. As I referenced earlier—the noble Lord, Lord Monks, referenced it, too—the judge can turn to external advice to support them in a case if they need to. There are complicated circumstances but, in relation to this amendment, the reality is that they are being invited to make a judgment based on the law. It is not about the extenuating circumstances; it is not a question of asking, “Should we give them more money?”. It is about the law and the interpretation of the law in coming to a judgment. Other aspects are involved, which is why the ACAS system is so good because it is conciliatory between two parties. In this instance, however, where you are being asked to interpret the law, we believe that the judge is the person to do that. We totally understand all the permutations around employment disputes, but at the end of the day it is the judge who will determine it. An employer or an employee should want their case to be found within the law by someone who can interpret it.
Lord Young of Norwood Green
My Lords, having heard what the Minister said, I admit that I find his response deeply unsatisfactory. He said that that is what an employer or an employee should want because it is only a point of law. Although this debate has touched on other amendments, what we are saying through this amendment is that if things are as clear-cut as the Minister has said, having the consent of both parties for the judge to sit alone should not be a problem. I do not think that it is as clear-cut, for all the reasons given. The noble Baroness, Lady Brinton, pointed out the importance of diversity, which is what lay members bring. A range of other points have been raised. My noble friend Lady Donaghy said that the employment context needs to be taken into account, not just the law. That is what lay members bring to the legal analysis at the Employment Appeal Tribunal. We are in Grand Committee, so we will withdraw the amendment, but we make it absolutely clear that we will return to this on Report, because the Minister’s response does not deal with the genuine concerns that have been expressed on both sides of the Committee.
Lord Young of Norwood Green
I shall speak also to Amendment 20FA. These amendments are designed to probe the Government’s intentions behind granting the Lord Chancellor additional powers over the composition of certain employment appeal tribunals. Subsections 6 and 7 grant the Lord Chancellor discretion in certain cases to determine as he sees fit the number of employer representatives and worker representatives that may serve on that tribunal. The intention of Amendments 20D and 20FA is to ensure that the Lord Chancellor does not exercise that power in a way that may unfairly disadvantage the worker.
Amendment 20D clarifies that the Lord Chancellor may not use this power to set the number of lay members at zero and therefore prohibit, in certain cases, the judge deciding to sit with lay members, even if he thinks it appropriate. Is it the Government’s intention that the Lord Chancellor should be able to use this power to prevent judges calling lay members to sit on the Employment Appeal Tribunal? Amendment 20F would ensure that the Lord Chancellor cannot exercise this power so that one group is represented by greater numbers than the other. It is about balance on any tribunal. It surely cannot be fair to have a situation where there are lay members sitting on the EAT with experience from the point of view of the employer, but none with experience from the other side.
It may be that the Minister feels that we are being a bit paranoid at this point but, as somebody once said, just because you are paranoid, it does not mean that they are not trying to get you. I would welcome clarification on that and on all the issues I have raised. If the Government will not accept this principle, will the Minister tell the Committee in what circumstances they believe it would be appropriate and fair for a judge to sit on the EAT with an employer-representative lay member and without a worker representative or, indeed, vice versa? I beg to move.
Baroness Whitaker
My Lords, I apologise for not being able to take part in the proceedings on this Bill earlier, but as a former employment tribunal member, I would like to reiterate arguments made earlier that the whole point of employment tribunals and the EAT is experience of the workplace from relevant and, in fact, instrumental perspectives of justice. That refers to points of law as well as to facts because the law is interpreted in a context, as the noble Baroness, Lady Brinton, said earlier. It is not a just process—that is, interpreting and applying the law. As well as not being objective, it is not informed by both these perspectives as of right. The risk with the Bill as it stands is that you could have a representative of the employer or the employee but not necessarily both. That is going to make a travesty of the tribunal concept.
Lord Brooke of Sutton Mandeville
My Lords, I have listened with great care to everything that was said by the Official Opposition in this context. I do not understand why the Lord Chancellor should feel in any way moved to make use of this clause if he was not going to add appointed members to the proceedings. It states that it is for a particular kind of case, but why would he do it if he had no intention of making use of the opportunity to provide the extra advice?
Baroness Brinton
Might it not be helpful to consider which proceedings ought to have a panel rather than a judge sitting alone? Picking up the point I made earlier about diversity, particularly where there is a claim of discrimination or of inequality of pay, it seems to be an obvious example of where diversity on a panel might provide sage advice as well as reassurance to both parties that diversity is being taken into account.
Lord Marland
My Lords, as far as Amendment 20FA is concerned, FA is probably quite appropriate because I am as slightly confused as noble Lords were. I have therefore invited my officials to have a look at this and to bring something forward before Report that clarifies the position because I am not as clear as I should be. I hope that satisfies the noble Lord, Lord Young. It is a victory for him. It is not our intention to use the Lord Chancellor’s power to prevent judges sitting with members where that judge considers it appropriate. The devil will be in the detail, and I think we should reword the detail. I concede that.
The point made by the noble Baroness, Lady Brinton, on diversity was very important. We take it very seriously. It needs to be considered at all times, not just in this particular field. We take that point on board. With that, I hope the noble Lord, Lord Young, will withdraw his amendment.
Lord Young of Norwood Green
I thank the Minister for his constructive response. I reassure the noble Lord, Lord Brooke, that these are in the nature of probing amendments. We were seeking to elicit the kind of response that we received. I welcome the assurance that clarification will be provided prior to Report. With that in mind, I beg leave to withdraw the amendment.
“(7A) The Secretary of State must—
(a) prepare guidance for the purpose of assisting judges in deciding when it may be appropriate for proceedings to be heard by a judge alone; and(b) publish and lay before Parliament guidance given under paragraph (a).”
Lord Young of Norwood Green
My Lords, this again could be seen as a probing amendment but it would constitute useful, practical advice or guidance for judges. It is a simple amendment which seeks to place a duty on the Secretary of State to prepare guidance for judges regarding situations where it is appropriate for them to sit alone. It would be helpful to define those criteria. Such a definition could take into account the points that have already been made about the need for diversity and the need to have an injection, as it were, of lay experience and wisdom. I think that is fairly straightforward.
I wish to speak also to Amendment 20F which would impose an additional duty on judges to have regard to the Secretary of State’s guidance under the terms of Amendment 20E and, if it is decided that a judge should sit alone, would require that a statement be published explaining the reasons for that decision. That would provide reassurance to those appearing before the tribunal. It would probably also establish some useful precedents in these cases regarding when such a measure is appropriate.
Amendments 20E and 20F are both probing amendments but are reasonably practical examples of how we think that this clause could be suitably amended if we are going to go down this road. I beg to move.
Lord Marland
My Lords, I am afraid that I have a slightly different philosophical view on this matter from that of the noble Lord, Lord Young, although I recognise that this is a probing amendment. I do not think that it is for the Secretary of State or, for that matter, government to intervene in the judiciary. The judiciary should be set aside from government and particularly from some, if not all, Secretaries of State. Whereas I understand the accountability aspect, I do not think this is the right form in which to set it out. Clearly, Parliament sets the framework for these tribunals and how they are managed but I do not think that it is for the Secretary of State or the Government to interfere in this. I am sure that the noble Lord, Lord Young, having been in government himself, and with all his wisdom and experience in these areas, will recognise that that does not strengthen the situation. However, we will doubtless debate this matter further and other ideas will come forward. We are always open to ideas, as we should be, but I hope that with those comments he will withdraw his amendment.
Lord Young of Norwood Green
The noble Lord did not really address Amendment 20F, which talks about imposing an additional duty on judges. Even if he does not like the idea of the Secretary of State providing guidance, part of the amendment refers to publishing a statement explaining the reasons for a decision if it is decided that a judge should sit alone. I would welcome a response on that.
Lord Marland
I apologise; I should have responded on that. I was more interested in the overall scheme of the thing. Our view is that this measure would interfere with the discretion given to judges and that it is up to the judges to decide whether they should sit on a panel or not. I do not think that they necessarily need to justify that because we have empowered the judges to take the action if they so wish.
Lord Young of Norwood Green
I cannot say that I am particularly happy with that answer. As I have said previously, while we recognise that we are in Grand Committee and therefore we will withdraw the amendment, we will certainly return to these points at the Report stage.
Baroness Turner of Camden
My Lords, my noble friend has indicated that we do not care for Clause 11. I do not intend to proceed any further with the arguments because we have been over the ground quite substantially and of course I shall not press the debate because we are in Grand Committee. However, we shall have to look at all this again when we reach the Report stage. Perhaps some of the remarks that the Minister has made in response to the comments made by a number of us will cause us to use a different form of wording at the next stage. In the mean time, I am not pressing that Clause 11 should not stand part of the Bill.
(a) a trade union official;(b) a workplace representative; or(c) a legal representative.”
Lord Young of Norwood Green
My Lords, this clause gives us real concerns. The concept of a settlement agreement whereby an employee waives their right to go to a tribunal is something that we find unacceptable. It undermines some basic principles. In the circumstances, Amendment 20G is quite appropriate in that it would ensure that the employee could request union, workplace or legal representation at the settlement negotiations. The whole idea of an employer being able, for any reason whatever, to pick on a particular employee and enter into the kind of negotiations that are recommended in the Bill is totally unacceptable because it could open the door to all kinds of discrimination. For those reasons, we believe that if there is to be any possible settlement, although we are opposed to the concept as it is currently defined in the Bill, the employee ought to be entitled to be accompanied by a union, workplace or legal representative. I beg to move.
Lord Monks
I want to support this amendment. Clause 12 generally complicates a situation which is reasonably clear at present. It will make life a little more complicated for workers and probably not that uncomplicated for employers. Essentially, it seeks to make it easier for an employer to end the employment relationship by offering an individual money in exchange for a compensation agreement—the title is changed in Clause 18. Let me explain the situation. At present, where there is a dispute, the terms of an offer cannot be reported to a tribunal. It is called a “without prejudice rule”; in other words, what has gone on before is kept away from tribunal cases. Clause 12 will change that and extend the without prejudice rule so that employers can offer an employee money and an agreement where there is no pre-existing dispute and no application has been made. The worker does not even know that there is a dispute, and the employer says, “Here’s some money, get lost”. This is giving the signal that you can fire staff for an arbitrary reason without following any dismissal procedure.
It was not just this side of the House—I remember some wise remarks by the noble Baroness, Lady Brinton, at Second Reading—that welcomed the dismissal by the Secretary of State for Business, Innovation and Skills of the report from Adrian Beecroft, chief executive of Wonga, the payday loans company. He introduced the concept of no-fault dismissal, which was roundly dismissed by the Secretary of State. I very much welcome what he said about it.
However, this provision in Clause 12 is not that far away from that. It is quite similar. It is expressed differently and rather technically, and is not that easy to follow, but essentially the key thing is that there is no unfair dismissal provision. You have not been warned and do not know anything, but the employer can say, “Here is X amount, get lost. Sign here”. You can no doubt go through the tribunal if you wish, but the provisions legalise that signal. I hope that this is not Beecroft through the back door, or “Beecroft-lite” as some people have been calling it, and that we can persuade the Government to take another look at this and recognise that, although it is in different clothing, it is rather similar to what this well known venture capitalist came up with—a measure that he thinks will create jobs and I think will increase unfairness.
Baroness Donaghy
I support this amendment because the improvement of employment relations should be the dog, not the termination of employment the tail. The emphasis throughout this clause is on avoiding proper procedures, not on following and adopting them. An employer can go to the ACAS website and get one side of A4 on decent procedure on discipline and grievance. Such procedure does not have to be long or complicated. I know that in the public sector it is usually 60 pages long, and nobody ever reads it, but you can do it on one side of A4 and it will be a perfectly proper procedure for dealing with employee relations.
All this provision does is encourage employers, with a nod and a wink, to forget about employment procedures such as those on discipline and grievance. Instead, they can just have a nice quiet chat, especially when the employee is feeling a bit low, and say, “Surely you’d be better off out of here. Times are going to get worse and it’s going to be even harder for you. Let’s have an amicable departure”. It is still quite easy to get rid of people from an employment situation in this country if it is dealt with properly. However, employers are very often terrified of dealing with these procedures because they are unfamiliar with them, cannot be bothered or feel, as an employer, that they are doing a good job by employing people and therefore have the right to get rid of them as and when required. A good employer will recognise that to get the best out of an employee, the employee needs to know where they stand, to know what the procedures are in their situation, to have a letter saying how much they are getting paid and what their conditions of service are, to have a little bit of an idea what their future is, and to understand their part in the scheme of things and what their role is. It can be a job description, but what an employee is looking for is to know what their role is.
To me, this just sums up the attitude of a bad employer rather than a good one. I urge the Government to reconsider. If an employer has a decent discipline and grievance procedure, it is perfectly possible to talk to an employee without prejudice about what is expected of them. If that employee fails to meet those expectations within a reasonable time limit, stated in writing if necessary, it is perfectly possible to see that employee out of the building without any danger of going to a tribunal.
The Government are emphasising the wrong end of the stick on employment relations and concentrating too much on reassuring bad employers that they can get rid of employees without any comeback. That is the wrong way round and, long-term, the Government will live to regret it.
Lord Brooke of Sutton Mandeville
My Lords, this intervention is not intended to be unhelpful or mischievous, but I cannot help remarking that in earlier amendments there has been heavy concentration on there being equal representation on both sides. I notice that there is the possibility of a legal representative in the procedure recommended by the amendment. However, I am not sure what powers that that gives the employer if the employer wants to have a legal representative there as well.
I realise that there are two answers to this. One is that of course the employer would be entitled to have a legal representative there because he was the employer. Alternatively, to go back to what the noble Lord, Lord Monks, said about the introduction of silks into the case—about which I am in no way sensitive—there seems to be a feeling on the part of those who have propounded the amendment that if there is going to be a legal representative for the employee, they totally understand that the employer will have one too. However, the absence of those words might otherwise be used against the interests of the employer in the discussion that was taking place.
Lord Deben
My Lords, I declare an interest as an employer. I make the point that these discussions are much better done on the relevance of the facts and the nature of the argument. I really could not listen to the comments about Mr Beecroft without suggesting that the idea that we should discuss this as if it were “Beecroft-lite”—I think that was the phrase—rather than as a proposition to be properly discussed for its nature is rather a sad thing. If people are talking about “Beecroft-lite”, I must not be moving in the right circles; I have heard no one use such a phrase.
The real issue is: do we have the right balance at the moment? Is it sensible or not to allow employers, in circumstances where this seems to be a better answer, to offer, not impose, an arrangement that includes a payment of this sum? It seems a perfectly reasonable suggestion, and we should not be arguing about it because someone we do not like did not suggest it but suggested something else, and now a Government we do not like are actually bringing forward something different and it might be rather close to that. Frankly, that is not a very good argument. We have to have an argument about the facts; and the facts seem to be that this is a moderate change that would in many circumstances be very convenient for both workers and employers.
Lord Phillips of Sudbury
My Lords, I hesitate to intervene, but I read Amendment 20G as having a different impact from the one that its mover has suggested. It may be that my legal wits are failing me, but surely new Section 111A(2), which it intends to amend, merely defines what the pre-termination negotiations are in subsection 12(1). It states that,
“‘pre-determination negotiations’ means any offer made or discussions held … with a view to”,
there being agreement between the employer and the employee. I do not see where the amendment comes into that. It is irrelevant in terms of who may assist the employee in arriving at that agreement, be it a trade union official, a workplace representative or a legal representative. The way that the amendment has been moved is not consistent with its potential impact on the clause concerned.
Baroness Brinton
My Lords, I want to make it clear that I do not consider Clause 12 to be “Beecroft-lite”, whether that term is acceptable or not to my noble friend. I hope that there might be some information from the Minister to confirm that, but that was certainly not how I read it.
I want to raise a particular question and I apologise for not having given notice of it; I am more than happy to receive a written answer. I understand that an offer of a settlement agreement could not be used as evidence in an unfair dismissal claim but could be used as evidence in a discrimination claim. It is not unheard of at tribunals to hear both at the same time; therefore, which would take priority?
Lord Young of Norwood Green
My Lords, I want to respond to a couple of points that have been made. I am happy to delete “Beecroft-lite”, if that is causing the noble Lord, Lord Deben, to break out in a rash. The plain fact is that as a result of the introduction of this clause, an employee can be called to a meeting without advance notice of the topic or a formal grievance between the employer and employee, and be presented with a proposal for them to leave their employment for a small payment and after signing a confidential settlement agreement.
I hesitate even more to dispute or cross swords with the noble Lord, Lord Phillips, because in some ways I do not feel qualified to do so. However, it is quite relevant that you should be accompanied by someone if you are going to be called to such a meeting. Perhaps we do not have the wording absolutely right and we will take that into account, but I am merely describing the situation that the amendment was intended to react to, and I apologise if it is not exactly right. However, I agree with my noble friend Lord Monks that this fundamentally changes the nature of employment. As my noble friend Lady Donaghy said, if we really want to give employers some helpful advice on employment relationships, this is not the route that we should going down or the advice we should be giving them. It represents all the negatives.
I am fascinated that termination of employment is the most important thing to focus on as the answer to our current employment problems. When the Chartered Management Institute tells me that only one in five managers receives any training at all these days, I consider that to be a far more important area for us to focus on. I do not make any apologies for the amendment, even though it may not be precisely right. The clause fundamentally changes the nature of the employment situation. In answer to the noble Lord, Lord Brooke, on whether the amendment is unbalanced, we do not think it is. The clause as currently drafted is unbalanced because the employer has the right to call you in without any prior notice and for no apparent reason, and suggest that your employment should be terminated. If only employers could get their contracts of employment, their training and their appraisal procedures right. From my experience of dealing with employers, that is the sort of advice that we should be giving them.
Lord Marland
I note the legal brain of the noble Lord, Lord Phillips of Sudbury, and I am grateful to him for pointing out some of the weaknesses in this amendment. I was also struck by the words of my noble friend Lord Deben. This is a mild change. Listening to the Benches opposite, you would think that we had torn up the law. Scenes from “Oliver!” kept coming back to me while noble Lords were speaking. We are not going to make progress if on the mildest proposal we start bandying words like “Beecroft” and warn of terrible things. All this is doing is mildly redressing the balance that exists, which noble Lords opposite may not agree with because they have taken a position on it. People on this side agree with it. I am grateful to the noble Baroness, Lady Greengross, because she made a very good point at Second Reading that we have to get the balance right so that employers are given the confidence to start employing again. That is all we are trying to do here. We are not seeking to tear up the rulebook, as has been suggested. Indeed, my noble friend Lord Brooke of Sutton Mandeville came right to the point: the claimant has to have legal advice before agreeing a settlement. Nothing will change that and we are not tearing it away; he has to have legal advice. So far as we are concerned, he can get it from any suitable or qualified individual and, obviously, even from trade unions.
It is fundamental that we ensure the safeguards for both the employer and the employee. It is fundamental that an offer is made and that the claimant is properly guided through the process and understands its extent. But as the noble Lord, Lord Brooke, pointed out, the claimant is the only person who is legally able to take advice because the employer is not. On that basis, something of a mountain has been made out of a molehill and I hope the noble Lord will withdraw his amendment.
The noble Baroness, Lady Brinton, again turned to the subject of discrimination. I am told by my officials— I am happy to amplify if my response now is not adequate—that a tribunal would take into account a discussion of the settlement for discrimination element of a claim, but would disregard that information when deciding the unfair dismissal element. I hope that that clarifies the point, but if not, of course I and my officials are at the disposal of the noble Baroness at any time.
Baroness Dean of Thornton-le-Fylde
My Lords, having had some experience of industrial negotiations, I find it unacceptable for the Minister to imply that this is a very mild clause. This is the only part of the Bill where the confidentiality clause appears. Perhaps it requires a clause in its own right, which is something that my colleagues are seeking. New Section 111A(2) refers to,
“any offer made or discussions held”.
Anyone who has been involved in industrial relations knows that in 99 out of 100 cases, an employer will have taken legal advice before speaking to an employee and implying that that employee is not wanted in the company any longer. This assumes that the employer has not taken advice before calling in the employee.
Let us imagination the situation here. With all due respect, we are talking about the workplace, not lawyers’ offices. We are talking about someone at work who is asked to go and see the employer. When they get into the employer’s office, the employer makes them an offer. It might be the first time that the employee has any inkling that the employer wants them out of the company and the psychological impact of that can be substantial. We are talking about someone’s job and livelihood, and getting another job may be quite difficult. This is not a mild amendment. It is trying to keep that balance. It is more than likely that an employer will have taken legal advice and will probably have even got the lawyer to write the letter suggesting that the employee leave the company. If the employee wants to have a representative in that meeting, they should. I think this is a mild amendment; I do not think it is a mild clause as it currently stands.
Lord Young of Norwood Green
I could not have put it any better than my noble friend Lady Dean. It is unfortunate that the Minister chose to dismiss the Government’s proposal as just a mild change. It is not a mild change. It is fundamental for the reasons that my noble friend Lady Dean and others have described. It is pointing employers in totally the wrong direction. If we are going to talk about something as serious as dismissal, it is perfectly reasonable to request that somebody should be accompanied by a representative. I do not think that is unbalanced. It is justice and fairness. We are in Committee, so, again, I shall reluctantly withdraw the amendment, but I advise the Minister that we will be returning to this on Report.
Lord Young of Norwood Green
My Lords, I do not want to go over the core arguments about why we are opposed to the direction of travel, to borrow a phrase that the Minister has been using today, but we are. We think it is the wrong direction. We want to undermine the confidentiality. We think it is unfair, unbalanced and inappropriate. Amendment 20H clarifies that settlement negotiations should still be admissible as evidence in a constructive dismissal claim. I shall be interested to hear the Minister’s response. I beg to move.
Lord Brooke of Sutton Mandeville
My Lords, on this occasion, I have considerable sympathy with the amendment moved by the Official Opposition. I do not know whether there are particularly reasons why the words “or constructively” are unacceptable to the Government. No doubt they will emerge, but I can understand that there might be circumstances to which this clause would be relevant where unfairness and constructiveness were mutually exclusive. Something might not qualify as being unfair, but could be interpreted as being constructive dismissal, so I have sympathy for why this amendment has been put down.
Lord Marland
Of course we all have sympathy with this issue, but we are seeking to ensure that the balance is rebalanced so that the employer has some protection and unfair dismissal is not one-sided, as we and the bulk of employers believe it currently is. We are going over quite a lot of ground that has already been covered.
In response to the noble Baroness, Lady Dean, there is a very clear safeguard for employees. There is a very clear procedure that protects them. She made out that a poor person comes into the room and is told for the first time in his or her life that he or she is going to be put out of work, or that there was potential for that, because you cannot do it the first time. It is three strikes, as the Committee knows. The fact of the matter is that often there is justification. The employee is no longer fulfilling their role, and the employer has come to the conclusion that they cannot carry on fulfilling the task that they were employed to carry out. We have to understand that there has to a balance or the employer is not going to carry on employing.
I have been a significant employer and have seen huge—and correct—changes in the balance in favour of the employee and that there has not been indiscriminate behaviour from the employer. I note that the noble Baroness, Lady Donaghy, was more concerned, not about the big companies to which the noble Baroness, Lady Dean, referred—big companies that can prepare the way and will have had all the legal advice before they call that employee in—but the smaller companies that do not have that advice. They are the ones which do not consult and do not handle the whole programme properly. They are the ones we are all concerned about. Indeed, they themselves should be concerned because they have not prepared in the decent and proper way employers should in handling this very important issue in someone’s livelihood.
As such, we must get the balance right. We must understand that we have to be balanced in our rhetoric and that there are two sides to this, as fundamentally we all do, because all of us in this Room want people to employ more people, do it decently and create livelihoods. All we are trying to do here is establish a slightly better balance. With that understanding I hope the noble Lord will withdraw his amendment.
Lord Phillips of Sudbury
Am I not right in thinking that the proposal to add the words “or constructively” is superfluous as an unfair dismissal includes a constructive dismissal?
Lord Young of Norwood Green
My Lords, I really want to respond to the point about restoring the balance. An employer now has two years to decide whether an employee is suitable. That is two years where you have the opportunity to appraise them, train them and find that they are not responding to that. It really harks back to the point made previously by my noble friend Lady Donaghy that the procedures are there and that if an employer acts in a proper manner they can dismiss employees. I would not demur from that. There are employees who do not measure up. What we do not support, and indeed oppose, is the idea that you can carry out this process and somehow the evidence of settlement and negotiations is not there and is not admissible in any dismissal claim. I will withdraw the “constructive and unfair dismissal” claim because I realise that that offends the legal precision.
We are quite clear that the idea that confidentiality should be used in these circumstances is not just a question of rebalancing. It is not, in our view, in any way helping the prospects for future employment. If we really believed that that was the case then maybe we would consider it, but I doubt it because it seems to us that it is both unfair and unjust. This is a perfectly reasonable amendment and it will be another reluctant withdrawal. We will return to it on Report.
“(3A) The employer will provide to the employee a written statement, setting out the reasons for any offer made under subsection (2), and subsection (1) will not apply in relation to such statement.”
Lord Young of Norwood Green
I do not need to detain noble Lords too long in this case. We believe that it would be appropriate and necessary for balance, fairness and justice for the employer to provide an individual with a written statement on reasons for any settlement offer that ought to be admissible as evidence in any unfair dismissal case. To use the phrase about restoring balance again, we believe that, if we were to go down this road, this amendment is necessary to restore balance and provide justice for an employee who is facing the prospect of dismissal and the difficulty of finding future employment. I beg to move.
Lord Marland
I do not want to delay the noble Baroness, Lady Turner, any longer so will just very quickly say that the Government believe that this amendment undermines the purpose of the clause. However, we have been in consultation on this. That consultation closed on 23 November, and we are considering the responses at the moment. We will obviously publish those responses before Report and will have something more to get our teeth into, although we will doubtless disappoint the Opposition with what we come up with. On the basis of what I have said, I hope the noble Lord will withdraw his amendment.
Baroness Turner of Camden
I understand that the TUC refers to Clause 12 as “Beecroft-lite”, and I think my noble friend Lord Monks has already referred to it in that light. It will be recalled that the Beecroft recommendations were intended to make it easier for employers to hire and fire workers without having to justify or explain the decisions. The recommendations were widely condemned, even by employers’ organisations such as the EEF. Clause 12 enables employers to offer employees a sum of money and a compromise agreement in return for leaving their employment, as we have heard during these discussions. The conversations will remain confidential and cannot be admitted as evidence in unfair dismissal cases.
The TUC opposes the proposals in this clause since it believes that it will send out a clear signal to employers that it is acceptable for them to sack staff for an arbitrary reason without having to follow a dismissal procedure. The provisions in this clause are very complex and likely to lead to possibly costly legal wrangles.
Another point that occurred to me is that nowhere in the Government’s wording is there any reference to trade union representation, although my noble friend Lord Young attempted to introduce it in Amendment 20G. Quite obviously, the right to trade union representation in these circumstances is very necessary. At the same time, as I have already indicated, the proposals are so unsatisfactory that even with the reservations that have been expressed—which may, I hope, cause the Government to look again at these provisions—I still think that this clause should be opposed. That is what the TUC would like us to do, and I certainly believe that there are strong reasons for doing so.
Lord Stevenson of Balmacara
My Lords, I am very grateful to my noble friend Lady Turner for raising this particular debate because it is when one looks at the whole clause that one is able to reflect a little on the debate so far. We have learnt quite a lot, I think, about the way that the Government wish to approach this area, but we have not understood very much.
Many of the clauses we are discussing in this section of the Bill, and this clause in particular, strike at the heart of the way in which we want our society to be run. I had always understood that it was commonly agreed among the parties represented in your Lordships’ House, and more widely, that there was a case for government to regulate properly the way in which employers and employees went about their business. It should not be obstructive or didactic, but it must bring to bear fairness and other aspects of the good society we all wish to live in.
Lord Deben
My Lords, may I intervene for a moment? I was very impressed by that last speech and thought that it was presented exactly in a proper way—although I do not entirely agree with it, as it is not a charter for bad employers that is being placed in this clause. Let me give the Committee an example of when this clause would be very helpful. It is a real example but, for obvious reasons, I am putting it in a way that could not be traced back to an individual. Somebody had been working for a company for some years but was increasingly unable to cope with the work that they were given. Had that person gone to a tribunal, the details of that lack of ability would have had to be discussed at length because that would be necessary. The employer concerned was a good employer. He sought to give that individual the recompense which they might have got in a tribunal while avoiding the tribunal, which would have been particularly difficult. Under the law as it stands, that was very difficult to do.
All this measure does is to give an opportunity for employers to look for the best way to solve many of these problems. I can think of many occasions on which a perfectly legitimate and reasonable solution could be brought about in this way. After all, it is not a compulsion; it is perfectly possible for people to say, “I want to go to a tribunal”. Therefore, I do not understand why we feel that people are unable to make that choice, or why employers should be refused the possibility of offering that choice.
It seems to me that the Minister is right in saying that this is a very small change but I can think of a number of occasions on which good employers would be able to choose it very effectively. My one concern about this discussion is that we seem to be moving back to a concept whereby somehow or other any flexibility in the law is advantageous only to bad employers. The truth is that the law at the moment makes it more difficult for good employers to do the best thing. As somebody who has to deal with these matters, I believe that most employers in this country are good and that they seek to do things properly. This change will make it easier for good employers to behave properly in circumstances where the necessary paraphernalia of the law would be best avoided in the interests of the employee.
Lord Young of Norwood Green
I do not want anecdotally to try to assess whether the majority of employers are good, bad or indifferent. They occupy a spectrum. Many are good and others are not so good. I say to the noble Lord, Lord Deben, that settlements are currently made outside the tribunal. We do not need to go down this road. I am sorry but the only interpretation we can put on this is that it encourages bad employers. Where does it encourage proper appraisal procedures or proper training procedures? If we really thought that this was about restoring balance, encouraging good practices and good behaviour and encouraging extra employment opportunities, as my noble friend Lord Stevenson of Balmacara said, then of course we would support it. However, in our view it does none of those things, which is why we strenuously oppose it.
Lord Marland
The noble Lord, Lord Young, has just explained why the Benches opposite have got this wrong. All they have talked about is the employee. At no point have they said, “What about the employer? Does this measure in any way improve things for the employer?”. The employer is the person who will employ people, provide jobs and create new jobs. My noble friend Lord Deben made the case beautifully; I need say little because he put it so well. This is exaggerated rhetoric and nonsense. The measure is a mild change but all we are getting is exaggerated rhetoric as if we are all going back to the workplace run by bad employers with bullying and all this sort of thing.
We know that bad employers go out of business—they go out of business fast because people do not want to work for them. They are not good employers, so they go bust. Good employers, who are the larger proportion of people, exist. Very strong rules and regulations have been improved over time—rightly so—and this Government are not saying under any circumstances that they should not be improved, or that they should not have been improved in the past.
We are trying to speed up the process and give people legitimate rights and clear interpretation of the law; then both parties will benefit. Employers will employ more employees, bad employers will go out of business, and bad employees will no longer be employed. At no point has anyone said “What about the bad employees? How do we get rid of the bad employees, who are a burden on good businesses and stop them surviving?”.
Lord Marland
I am not giving way, because we have had enough on this. We have heard everything that the noble Lord has had to say on it. This is a matter of debate, and we will doubtless say more.
Ultimately, we are all coming from the same place. We want good employers and good employees. We want them both to be properly represented and to have the opportunity. As my noble friend Lord Deben says, this simply puts a mild balance back. What employers would like to see happen is just as important as what employees want.
Lord Young of Norwood Green
I wish to put the record straight on one point. I specifically mentioned that there was a proper way to deal with—to use the Minister’s phrase—“bad employees”, or employees who fail to live up to the mark. If the appraisal system is done properly, then there is a route to dismissal.
Baroness Turner of Camden
My Lords, I am still in opposition to this clause. Of course, we know that we cannot press it in Committee. We will take away what has been said during this debate, which has been very interesting and useful, and see what we come up with on Report.
Certainly, I am not at all happy with what has been said. I do not believe that this helps the good employer—quite the reverse. It helps the bad employer who seeks to get rid of employees as easily as possible, which was what Beecroft was all about; we opposed that, as did a lot of other people. We cannot press this now, and it is not our intention to do so, but we shall have a close look at what has been said before we come back again on Report. There are aspects of this clause that I do not like, and which I would like to pursue further.
“(2A) Before the commencement of this section, the Secretary of State shall consult on the appropriate amount to be specified under subsection (2).
(2B) The Secretary of State must lay a copy of the results of any consultation undertaken under subsection (2A) before Parliament.”
Lord Young of Norwood Green
My Lords, the amendment is designed to probe the Government’s rationale behind their plans to cap compensation at 12 months’ pay. Clause 13 grants the Secretary of State the power to limit compensatory awards, which this Government have announced they plan to cap at 12 months’ pay, subject to an overall cap of between one and three times median annual earnings.
The Government have justified the cap on the basis of correcting a misalignment arising from inflation-busting increases over the years, in particular in 1999, when the cap was increased from £12,000 to £50,000. However, it is totally misleading to imply that this was an inflation-busting boost. The year 1999 was a one-off uprating, designed to correct levels that had lagged behind average wages. When the cap was introduced in 1971, it was calculated at 104 weeks’ pay, or £4,160. There has been no requirement to review the cap annually, although it has been increased. Had it increased in line with average earnings—and I stress that—since 1971, the cap would have amounted to £52,800 in 1999.
The Government’s comparison between the increase in the cap between 1999 and 2011—it was 503%, which includes the one-off uprating and the increase in median earnings at 47%—is therefore totally misleading. Were the Government to compare the 47% increase on the figure of £52,800, as it would have been in 1999, had it risen in line with median wages previously, it would be £73,500, which aligns well with the current cap level of £72,000. The Government claim that lowering the cap to 12 months’ wages would give employees and employers a more realistic expectation about the level of tribunal awards, based on the fact that the median unfair dismissal award, including basic and compensatory elements, was £4,560 in 2011-12, or just nine weeks’ average pay. If the Government are really committed to this logic, they would set the cap at substantially less than even the median wage, as it is difficult to see how setting up an expectation of recovering 5.7 times the average award is much better than one of recovering 15.8 times. If the Government want to increase awareness of the average award level, surely it would be better to encourage external services such as ACAS and Citizens Advice to make this clearer when giving advice and guidance.
The reality is that this cap will affect no more than around 150 cases a year out of some 50,000—just 0.3% of all unfair dismissal claims. However, among those 150 individuals who will be denied full compensation, such as a substantial loss of pension rights, are people in the squeezed middle who were previously on above average wages but perhaps are close to retirement and therefore have fewer prospects of finding new employment. That is a daunting prospect given today’s high unemployment rates. Almost half of unemployed workers aged over 50 now face being out of work for more than a year, while there has been a 41% increase unemployment among older women in the past year alone. The link with annual salaries will also mean that low-paid and part-time workers are severely disadvantaged. These workers are more vulnerable in today’s dismal economic climate. I beg to move.
Lord Monks
I support my noble friend in this amendment. He gave the statistics for the current situation and pointed out that the median award is just £4,500. Set against the mean annual salary or average salary, that is very low indeed. This is just a mechanism for transferring the costs of dismissal away from the employer and reducing the employer’s potential liability. I disagree with it and again it is the wrong signal to send. It is not a huge signal—I do not want to be accused by the Minister of gross exaggeration, as might have been the case once or twice earlier in our debates—but it is clearly the duty of the Committee to indicate that this is a transfer, a potential loss for the employee and a potential gain for the employer.
While I am on my feet, if at some point in the subsequent proceedings the Minister can explain the difference between the no-fault dismissal provisions of Mr Beecroft and the provisions in Clause 12, I shall be very interested to hear it. In practical terms, they are very similar.
Lord Marland
I am not going to get into that for the moment, but I am sure we will pick it up later. The Government take the matter of this cap seriously and that is why we are consulting on it. The consultation closed on 23 November and we will publish the response before we reach the Report stage, so we will be able to have a good debate on it. I thought that the noble Lords, Lord Young and Lord Monks, made some very poignant remarks, and we share their concerns. We also acknowledge the keen detail of the facts that have been presented. There are very few cases which get to the limit, but they are important. The average award is £5,000, of course, and the cap is £72,300. We recognise that, we understand it; we know that we have got to get it right. We are obviously sympathetic to a number of the cases that the noble Lord, Lord Young, has mentioned and, with that, I hope that we can revisit this in the spirit of co-operation because I think it is important, and that we can be conjugated—conjugare, which means to bind together in the same outcome—in time to come.
Lord Young of Norwood Green
I would not say that it is peace in our time but it is not a bad offer. I genuinely thank the Minister for his response. In the circumstances, I beg leave to withdraw the amendment and I look forward to the further consideration as a result of the consultation.
Baroness Turner of Camden
I want briefly to speak in opposition to Clause 13 and to say that, according to my briefing from the TUC, it is also opposed to the proposals to reduce the cap for compensatory awards in unfair dismissal and other cases. The Government are proposing to reduce the statutory limit for compensatory awards. They claim that reducing the statutory cap would help to reduce employees’ expectations in unfair dismissal claims. However, there is concern that the main effect of these proposals will be to make it cheaper for employers to sack staff unlawfully. Clause 13(2) gives the Government a power to cap the compensatory awards. It is not just the TUC that is concerned about this. The Law Society says in its briefing:
“The Government is seeking a power to vary the compensatory award in line with annual average earnings. The Society queries the arbitrary nature of this limit, which will prevent a substantial number of claimants who have been unfairly dismissed from recovering their full losses”.
Older workers, who are more likely to have accrued higher occupational pension and other entitlements, may find it more difficult to get new employment and will be disproportionately affected. Recent unemployment figures show that nearly half of unemployed workers over the age of 50 have now been out of work for a year or more. Obviously, they find it very difficult to get alternative work. The link with annual salaries could mean also that low-paid and part-time workers could lose out. For all these reasons it is suggested that this clause should not be proceeded with. I am therefore raising my objection to Clause 13.
Lord Young of Norwood Green
I will be very brief. I think my noble friend Lady Turner has expressed our concerns quite clearly. I await with interest the Government’s assurances that they want to get this right. As it stands, we will obviously be returning to this clause on Report.
Baroness Brinton
I am sorry, I am trying to stand up but I am not very fast. I want to add to the comments made by the noble Baroness, Lady Turner of Camden, about matters other than straight salary. The pension pot is one of them, but there are others that need to be taken into account, and I wonder if this has been overlooked or if it is intentional. If it is intentional, I would have real concerns, particularly about some of the pension issues.
Lord Brooke of Sutton Mandeville
My Lords, I hope the Minister will regard this as a late contribution to his consultation, but since the academic research on which it is based is 50 years old, and I have no idea whether it has been updated, he does not need to take it very seriously. I recall that when I set out in business 51 years ago, some very detailed academic research had been done in the context of executives—I am not necessarily talking about the shop floor—which found that each employee had a particular gradient for the ascent of their salary. If they went above a figure, whatever the figure was on the line, they were highly likely to fail. If they went below it, they were highly likely to seek another job. The research was sufficiently comprehensive to be an interesting observation and contribution to the process.
Lord Deben
My Lords, I will make a simple statement. We have to get an atmosphere in Britain in which employers are less frightened of taking on more staff. I have to say to the Opposition that, if you are an employer, for a long time now there has been a general feeling that you are better off not increasing the number of people you employ. Some of us have fought against that and employed more and more people, but it is not a general trend. I think the Opposition, and particularly the Trades Union Congress have got to come to terms with this psychological fact. It is important for employers to feel that the problems that may open up for them if they make a mistake in employing someone are at least reasonably limited. That is why the Government’s approach in this Bill is absolutely right—it simply, delicately and very slightly seeks to shift the balance so that employers begin to feel that there is a real reason for them no longer to be afraid.
The trouble is that, in this whole discussion, there are 200 years of accumulated dislike of the concept of employers. I find that very hard to understand. The noble Baroness, Lady Turner, speaking from the TUC brief and from a long history as a negotiator, could hardly hide from us the feeling that people ought to employ people and that they will do it automatically. The truth is that we have found, over the past few years, an increasing reluctance to employ, although we ought to have a society in which we restrain our use of material resources and extend our use of human resources. That is what sustainability actually means. However, to do that you must have a format within which people are not so worried that they do not employ.
The very moderate steps being taken here are essential if we are to see an increasing number of people in employment. The unemployment figures are much better than many thought they would be, and I think this Bill will help. If it helps, then it will do more good for the working people of Britain than anything else. I am very unhappy that the Opposition are suggesting that the Bill is in some way anti the workers in factories and businesses; it is not. It is a mechanism to get more people into jobs by removing the feeling that employment is too dangerous an activity to step further into than you really have to. That is the change we have to make and we need to make it now.
Baroness Donaghy
I do not want to prolong things as I realise that we are winding up. We had this debate when we were discussing the regulations on employment tribunals and the noble Lord, Lord De Mauley, was in the lead. The very same remarks as those made by the noble Lord, Lord Deben, were uttered then by the noble Lord, Lord Jones of Birmingham. This is not a new debate. The only thing that I would say is that some of us come from a climate—I will remind the Committee that I was chair of ACAS—where we support employers as well as employees. We want to create good employment relations because we believe that that is good for growth in Britain.
We know that companies fail because they are sometimes badly managed and sometimes undercapitalised. I do not know of many companies that failed simply because an employer could not get to grips with getting rid of a bad employee. I have been a manager myself and have dismissed people, and I fully accept that there are poor employees. However, what we need in this country are decent skills and a good vocational education system, and I think the Government are trying to tackle that. We also need good management—something that I do not believe has been sufficiently emphasised in this discussion—and we need to be able to explain to employees where they fit in in the scheme of things so that they understand that and feel involved. Those are the points that I wish to make. This is not a new debate.
Lord Monks
I shall not detain the Committee for very long. I was disappointed to hear the noble Lord, Lord Deben, make the points in the way that he did. Not only is this not a new debate; it is an old debate. It was debated in this Parliament in Victorian times in relation to intolerable factory conditions. It is a debate about sending children up chimneys. Noble Lords can wince at that but the debate is an old one. I recognise it and have heard it in many employer circles. I recall that over the 10 years from 1997 to 2007—I am not making a party-political point here—we added a million jobs in this country. The employment market boomed. As noble Lords will know, a large number of those jobs went to migrant staff—although that is another issue for another day—but the fact is that there was an incredible expansion of jobs at that time.
Lord Deben
The noble Lord must remember that almost every one of those jobs was created by the Government and paid for by the taxpayer, and that has been a significant burden for Britain. We are now creating proper jobs which make money for the nation. It is a wholly different situation. I can create a million jobs if I pay for them out of taxpayers’ money. That really is not an argument that can be put forward.
Lord Monks
That is not a constructive suggestion. Many of those million jobs were in the private sector. Unfortunately, far too many of them were in the south-east of England and not in the poorer regions. I accept that the noble Lord has a point in that the public sector was the major driver of the economy and of the regeneration of our cities in the north of England and in Scotland and south Wales. A large number of jobs were created. There have been some exaggerated claims about the possible effects of the national minimum wage and so on but that is probably another debate for another day and well beyond the scope of this clause. However, in the OECD league tables, the British labour market is ranked number three for flexibility. This country is the third easiest when it comes to employers being able to sack people. I wish that employers would stop moaning about this, look at some of the evidence from abroad and get on with seeking to help to increase employment by looking at what they can do themselves and at the changes that the Government can make, possibly in relation to national insurance and so on. That would boost employment opportunities far more than giving a licence to some employers—I think that they are a minority but they are not very good employers—who would take advantage of these kinds of provisions.
Lord Marland
My Lords, if we are to make any progress on this Bill, we have to take a more conciliatory position between ourselves. I believe that underlying all this is a conciliatory position, because ultimately we all want more jobs and more people employing others. We all feel passionately about that. We cannot always come at this from the polarised position of the TUC. Indeed, we as government are not coming at this by saying, “Beecroft says this, so we must do it”. In fact, as a department, we rejected quite a few things that Beecroft said because we did not think that they were in the interests of employees. Therefore, we are not taking a polarised position based upon part of the argument. In the end, we are all interdependent. Without the employer, we do not have employees, and without employees, we do not have a return to prosperity.
It was a pleasure to negotiate with unions in the north. Sellafield was my area of responsibility. I much admired the way in which they came to the table and to understand that they had to improve their working terms and conditions for Britain to become competitive again. It is to their eternal credit that after two rounds, three pinfalls and one submission, we got to a very amicable and successful direct contact where there was mutual respect. As an employer, the first company with which I was involved in setting up, the majority of people who worked there were shareholders. We believed that that community spirit was the best way forward.
I have already conceded on this matter and we do not really need to debate it, but we have a roaming brief on this issue. I think that all parties agree that we need to have a cap on awards but we need to make sure that we get it right and that it is fair. It should not be in favour of the employee or the employee: it should be fair and balanced. This House is good at being fair and balanced.
I am grateful for the contributions, which have been fair and balanced at times. When they have been fair and balanced, we have started to make progress. I think that in our hearts we all want the same thing. At the end of all this, we will have the same thing. It will leave this place a better Bill. It will have been challenged. It will not have been challenged by taking unreasonable, polarised positions. If we did, we would not end up with something reasonable at the end.
After all this, I hope that the noble Baroness will support this clause.
Baroness Turner of Camden
I thank the Minister for his fairly sympathetic response. I also thank noble Lords who have contributed to the debate, particularly my noble friend Lord Monks who set out what has happened over the years in relation to employment rights, which have been the fruit of the struggle of many of us over the years. Workers in their unions, and workers not always in unions, have struggled very hard to maintain rights in employment, which did not come easily to them.
Eventually, we succeeded in getting quite a lot of employment rights. My former noble friend, Lord Wedderburn of Charlton, who I am sorry is no longer with us, was very instrumental in changing the law in this country. He did it as a result of pressure from unions on behalf of the workers who, at that time and in the past 200 years, have been through most appalling conditions. Through organisation and struggle, they managed to change that and we now have a set of employment rights which many of us are now fighting to maintain.
A good employer does not dispute that workers have entitlement to rights. Usually, they are quite willing to honour those rights. It is the poor employer who does not and who wishes that they can regard their employees as disposable. We do not regard employees as disposable. We want to ensure that employment rights are suitably maintained. We shall continue with this when the legislation now before us reaches Report stage. We take on board what the Government have said but I think that we shall come back with different wording and we shall argue for it. That will not be for this evening but perhaps for another time.
Lord Gardiner of Kimble
My Lords, this may be a convenient moment for the Committee to adjourn until Monday next at 3.30 pm.
House of Lords
(11 years, 5 months ago)
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Autism
(11 years, 5 months ago)
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Lord Touhig
To ask Her Majesty’s Government what will be the scope of the review of the national adult autism strategy, due to take place in 2013.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, we are currently considering how to deliver the 2013 review of the adult autism strategy and, in particular, a range of options about how best to secure the views of service users and carers. The review, which will take place from April to October next year, is an opportunity for the Government to take stock and consider where future action is required to realise the vision of fulfilled and rewarding lives for people with autism.
Lord Touhig
My Lords, the National Audit Office report on the adult autism strategy said that the health service needed to improve the training of key professionals who make decisions about a person’s eligibility for benefits and services. Can the Minister confirm that the review will ensure that all government departments will implement the strategy in full, so that autistic adults around the country can access the support services that they need?
Earl Howe
My Lords, this matter runs across government departments. While central government can set the framework, and while it can work to remove barriers and increase awareness, which is very important, the real work—the delivery of lasting change—is for professionals, providers, voluntary organisations and, indeed, service users working together in collaboration. That effort needs to take place at a local level, which is why there is statutory guidance to prompt that action.
Lord Wigley
My Lords, I declare an interest as patron of Autism Wales. Will the Minister confirm that he is aware of the national strategy on autism that was introduced in Wales in 2008, which is being looked at in Scotland as a model to be followed? Of course, Northern Ireland has its Autism Act 2011. Will the Minister undertake to look at the experiences of the Celtic countries in developing the policy for England?
Earl Howe
My Lords, I am grateful to the noble Lord and I am quite sure that we in England can learn from what is going on in both Wales and Scotland in this area. However, we can take some encouragement from the National Audit Office memorandum earlier this year, which stated that considerable progress had been made in the two years since the strategy in England was published. Twenty-four of the 56 commitments had been implemented, and action was under way in response to the remainder.
Baroness Browning
My Lords, does my noble friend agree that if we are really going to achieve equality for the autistic community, we need to start looking now at the sort of services that they require when they become much older and frailer? It would be a tragedy if we improved services for children and adults but, when they become old and frail and are no longer able to maintain independent living, even with support, they are then segregated from the rest of society.
Earl Howe
My noble friend is right, which is why the existing statutory guidance extends not only to local authorities but to the NHS; it is unique in that regard. The strategy is about integrating care across the NHS, social care and all other local authority services, and its focus must be on putting people with autism at the centre of any plans to improve their own lives.
Lord Maginnis of Drumglass
My Lords, I declare an interest as I chaired the independent review of autism services in Northern Ireland. Would it be inappropriate if I asked the Minister if he was aware that it does not matter how good one’s intentions are or whether you have an Act of Parliament; if you do not have the geographical structure that enables you to implement the measures that are required for early assessment and diagnosis, there is nothing that will naturally follow? Will he consider consulting the Northern Ireland authorities and those in Wales and Scotland, where possibly we have made more progress?
Earl Howe
My Lords, I shall gladly take that idea away with me. The noble Lord is right about the structures for delivery. Local authorities in England are responsible for the delivery of services and support for people with autism, and the NHS is the body that we are relying upon to identify those with autism and diagnose their needs. The two must work together.
Lord Addington
My Lords, will the Minister tell us a little more about the problems of being the lead department and trying to relate to other sections of government? How good, for instance, are the links with various stages of education in order to allow not only for people with the most acute forms of autism but for those at the higher-functioning end of the spectrum, such as those with Asperger’s? How is that developing and have we done any work in that field?
Earl Howe
Yes, my Lords, the autism strategy is a cross-government strategy and is already having an impact in areas such as employment and education. It includes activity to help adults with autism into work. The mandate to the NHS Commissioning Board particularly mentions those with learning disabilities and autism and their need to receive safe, appropriate and high-quality care. From 2014, when necessary, young people up to the age of 25 with special educational needs, which would include autism, will have an education, health and care plan. I assure my noble friend that work is going on across government in this area.
Baroness Pitkeathley
My Lords, last week on Carers Rights Day I spoke to a great many parents who raised the same matter as the noble Baroness, Lady Browning—the transition period for young people with autism. Does the Minister consider that it is a problem that parent carers are not yet referred to in the draft Care and Support Bill, which we are about to start scrutinising? What role does he think local Healthwatch and local well-being boards can have in this regard?
Earl Howe
My Lords, local health and well-being boards and local Healthwatch will be instrumental in ensuring the improvement of the quality of services for people with autism. As regards the transition from childhood to adulthood, the Department for Education is working with my own department to make the transition recommendations in the strategy the success that we all want them to be. A project funded by both departments and led by the University of York will report before the end of the year and will inform good practice in service at the point of transition.
Employment: Rural Employment
(11 years, 5 months ago)
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Lord Knight of Weymouth
To ask Her Majesty’s Government what measures they have introduced to boost rural employment in the United Kingdom.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)
My Lords, employment will be boosted in all areas by national initiatives to promote economic growth. Support for apprenticeships will provide the skills that employers need, while welfare reforms will help people into work. In England, a £165 million package to stimulate rural growth includes five pilot rural growth networks and funding to transform rural business performers. Investment and action to improve rural broadband and network services will support rural economic growth and employment opportunities. I declare an interest as the owner of a farm, and therefore involved in rural businesses.
Lord Knight of Weymouth
My Lords, I am grateful to the Minister for that response, as far as it goes. There was no mention of rural employment in today’s Autumn Statement. The Chancellor referred to the interesting report of the noble Lord, Lord Heseltine, on growth, yet the only mention of rural issues was a passing reference to European funds and to the paltry £15 million being spent on the five rural growth network pilots that the Minister mentioned. However, my question to the Minister is on those five networks. The first job created by Labour’s Future Jobs Fund was for a young farm worker in Wiltshire. Will the Minister tell me how many rural jobs the rural growth network has generated to date?
Lord De Mauley
My Lords, I cannot give the noble Lord a specific answer on that, but I will try to give him an answer that is of interest to the south-west of England. The South-West Skills Programme offers vocational and technical training opportunities for farmers, foresters and agrifeed businesses. The programme has provided training for a total of 9,497 trainees.
Lord Vinson
My Lords, for many years I was lucky enough to be chairman of the Rural Development Commission. One key policy that we recognised was the cost of getting to work. Today the Chancellor, by reducing, or rather holding, fuel duty, has enabled many more rural people to be able to afford to run a car. That is a key component of rural employment, and I congratulate him.
Lord De Mauley
Yes, my Lords. I will give more examples of how the Autumn Statement will benefit rural growth. We will extend small business rates relief for a further 12 months from 1 April 2013, benefiting more than 500,000 small businesses. We will devolve a greater proportion of growth-related spending to local areas from April 2015. We will provide further support to businesses and motorists, which my noble friend referred to, by cancelling the fuel duty increase that was planned for 1 January 2013, and we will defer the 2013-14 increase to 1 September 2013. We will ensure that businesses—particularly small businesses—can access finance and support.
Lord Harrison
Given that 98% of rural employment is not related to farming, will the Minister outline the strategy for encouraging small businesses in our towns, villages and hamlets by increasing broadband coverage and better transport links? In addition, has he thought of the idea of business advocates for the countryside to encourage the formation of small businesses?
Lord De Mauley
The noble Lord raises a very good point about broadband. I absolutely agree with him on that. The rollout of superfast broadband infrastructure is vital to boosting sustainable economic growth and creating jobs in rural areas. Online business, whether rural or urban, grow four to eight times faster than their offline counterparts. Broadband is a key government priority. We are working to deliver the best superfast broadband in Europe by 2015, backed by a £530 million government investment to support rural areas.
Lord Palmer
My Lords, what estimates does the Minister have in his department for the exploration of shale gas in the countryside of the United Kingdom?
Lord De Mauley
My Lords, I think that that is a bit wide of the Question, but more will become clear shortly.
Lord Lee of Trafford
My Lords, tourism turnover in the rural economy is nearly three times that of agriculture. Yesterday at Westminster, the Cut Tourism VAT campaign was launched, supported by the whole of the industry. Compared with our 20% rate, accommodation VAT is 10% in Italy, 8% in Spain and 7% in France and Germany. As a former Treasury Minister, does my noble friend appreciate that independent reports indicate that a cut in VAT on accommodation would boost Exchequer revenues, boost tourism and thus boost employment in the rural economy?
Lord De Mauley
My noble friend has rather overpromoted me. However, in answer to his question, the Government recognise the importance of tourism to rural employment. I do not think that we can go as far as he asked, but the Rural Economy Growth Review showed that tourism is a significant contributor to the rural economy, with potential for significant further growth. Before the Autumn Statement, the Government announced a £25 million initiative to promote rural tourism and to support rural tourism businesses.
Baroness Liddell of Coatdyke
My Lords, further to that response, which is very important for the tourism industry, does the Minister agree that in view of that importance of tourism to the rural economy, his department should join with other departments in putting pressure on the Home Office to address the issue of visas to Chinese visitors, who are a vital component of inbound trade? Does he agree that that action needs to be taken urgently?
Lord De Mauley
That is an interesting question from the noble Baroness. I think that it goes a bit beyond the original Question. The departments co-operate closely, particularly on rural tourism.
Lord Mayhew of Twysden
My Lords, is it not the case that in rural areas village shops provide a valuable social good for many people, especially those without motor cars? Perhaps we may hope for recognition that the supermarkets, more distant but very powerful as they are, simply cannot hope to provide that sort of service. May we hope that the Government’s policies for rural areas will reflect the special value of village shops?
Lord De Mauley
Yes, I agree wholeheartedly with my noble and learned friend. We recognise the importance of rural service outlets such as village shops, post offices and pubs in sustaining strong and thriving rural communities. New community rights are being introduced that will allow local assets such as village shops to be put on the local asset register, giving communities first option to bid for them if they are under threat. In rural settlements with a population of less than 3,000 where there is only one retail outlet, it will receive rural rate relief. Consumer Focus is identifying rural issues as part of its help with the Post Office Local model. In 2012, Defra supported a number of community shops through the RDPE programme.
Banking: National Savings & Investments
(11 years, 5 months ago)
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Baroness Ford
To ask Her Majesty’s Government whether there are any plans to extend or improve the range of retail savings products offered by National Savings & Investments.
Baroness Ford
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare an interest as a customer of National Savings.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, National Savings & Investments reviews its product range on a regular basis in light of its role to provide cost-effective retail debt finance to government. In doing so, it follows a policy of balancing the interests of its savers, the taxpayer and the wider stability of the financial services market.
Baroness Ford
I thank the Minister for that—albeit disappointing—reply. National Savings is probably one of the most trusted financial services brands left in the United Kingdom. The Minister knows well that all its recent issues have been massively and very quickly oversubscribed. Are the Government not missing a huge opportunity to extend the reach of National Savings to help savers and pensioners whose incomes have been absolutely hammered in the past five years due to the combination of record low interest rates and the disastrous effects of quantitative easing on annuity levels?
Lord Sassoon
My Lords, the Government are very well aware of the needs of savers. Those who have done the right thing in the good times should not be penalised in these difficult times and the Government understand that. Specifically on National Savings & Investments, as I said, it keeps its product range under regular review so, of course, it looks to see when it is appropriate to bring products back in. However, it has to balance the need to deliver finance to the Government at rates that represent value for money for the taxpayer and the need not to compete unfairly in the savings market by offering products that compete with other providers in the market. The noble Baroness may look askance at that but I assure her that I get constant complaints from the retail savings market if it thinks that NS&I is using its power unfairly in the market.
Lord Forsyth of Drumlean
My Lords, will my noble friend accept my warmest congratulations on the announcement by the Chancellor today that he will consult on allowing AIM shares to be included in ISAs, following the persistent representations of my noble friend Lord Lee of Trafford?
Lord Sassoon
I am very happy to accept what my noble friend has said. I have probably answered more questions on AIM shares and ISAs than on practically any other topic. It is also worth saying that it has been announced in today’s Statement that the ISA limit will go up in line with inflation in April 2013—so, by another £240, to £11,520—enabling 24 million people to continue to benefit.
Lord May of Oxford
My Lords, why is NS&I no longer issuing tax-free, index-linked savings certificates? They are an extraordinarily effective instrument for some who wish just to preserve the real value of their savings, free of greed. Thus, it seems to me a particularly meritorious and efficacious instrument. Why is it no longer issuing new issues?
Lord Sassoon
My Lords, NS&I takes index-linked and fixed-interest savings certificates on and off sale. When they were last on offer, during 2011, demand reached completely unprecedented levels. It meant that the sales volumes far exceeded what was anticipated and what represented value for money in terms of the target that the Treasury set for NS&I.
Lord Peston
My Lords, I nearly forgot my question. The Minister referred to looking askance at his answer. I must say that I associate myself with my noble friend. Is he not aware that a more positive response would have been to say, “Yes, it is an extremely good idea to improve the range of savings products out of fairness to small savers. It will raise the propensity to save and increase the flow of funds to the Treasury”. In the light of the most ludicrous Autumn Statement in living memory, I would have thought that the Treasury would like to have all the help that it can possibly get.
Lord Sassoon
My Lords, there are 26 million savers with NS&I. We take their interests very seriously. They have over £100 billion invested. It is one of the largest savings organisations in the country, and that will continue.
Baroness Kramer
My Lords, I would like to challenge the Minister’s comments on NS&I. Funding for Lending is a taxpayer-driven programme which has created the collateral damage of allowing banks to cut the interest rate that they offer on savings products, and NS&I has had to follow by cutting its interest rates on savings products. At this time, when savers are under such pressure, could the Minister consider lifting the best-buy restriction so that NS&I could start leading the industry back into paying decent savings returns rather than following the industry on a downward spiral?
Lord Sassoon
My Lords, this raises many complex issues. I would simply say that a critical part of NS&I’s remit is to raise money for the Government on value-for-money terms. Secondly, I can assure the House that the Government are certainly not going to get into, in any way, unfairly competing in the savings market, which needs to be a vibrant, fair and free competitive market.
Lord Davies of Oldham
My Lords, the Minister has now indicated the conflict through two answers. He has just said that the role of NS&I is to raise money for the Government, and we all know its excellent reputation—but he also said earlier that it is there to look after the interests of savers, who are consistently getting a rate of return below the rate of inflation. How can that be fair?
Lord Sassoon
My Lords, what is fair is that the Government have very considerable concern about savers. I have mentioned the ISA annual limit going up by inflation in April; consulting on whether AIM shares should be eligible to be in ISAs; introducing simple financial products; setting up the Money Advice Service; having a generous new single-tier pension; and raising the cap today on pension draw-downs from 100% to 120%. The Government take the interests of savers very seriously.
National Planning Policy Statement
(11 years, 5 months ago)
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Lord Greaves
To ask Her Majesty’s Government whether it is their policy that the proportion of England that is built upon should rise from 9% to 12%; and whether that aim is in line with the National Planning Policy Statement.
Lord Greaves
My Lords, in asking the Question standing in my name on the Order Paper, I remind the House of my active membership of my local planning authority.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, the Government’s policy, as set out in the National Planning Policy Framework, is that councils should have plans in place that meet their housing and development needs. These will vary across the country, depending on local circumstances and demands.
Lord Greaves
My Lords, I congratulate the Minister on not answering my Question at all. The first half of my Question is to ask the Government whether the statement by the Planning Minister, Mr Boles, in recent days that the amount of countryside that will need to be built on is such as to increase the amount of built-up area in England by one-third. Was he giving his own opinion or was he speaking as a Minister and giving government policy?
Baroness Hanham
My Lords, my honourable friend the Minister for Planning was drawing attention to the fact that this country is going to require an enormous amount of new building of houses if it is to meet anything like the demand that exists. I think that he would be the first to say that he does not know whether that will require 2% or 3% more land, but he was saying that more land will be needed to build the houses that we require.
Lord McKenzie of Luton
My Lords, a couple of weeks ago the Telegraph newspaper claimed that it had established that more than 9,000 acres of land—an area the size of the city of Gloucester—is to be removed from the green belt by local authorities following the coalition’s planning reforms, and that at least 40% of councils with green belt land in their areas have already redrawn or planned to alter the boundaries of the protected areas in an attempt to meet demand for housing and development. Is that correct, and does it have the Government’s support?
Baroness Hanham
My Lords, we have made it clear all along and all through the discussions on the National Planning Policy Framework that we support the retention of the green belt, which lies between and separates out major conurbations so that there is not one continuous string of developments. It will be up to local authorities to decide whether they need and have support to develop into any of their green belt, but by and large the Government’s policy is to retain the green belt, as it is a very important aspect.
Lord Cormack
My Lords, a few weeks ago Mr John Hayes earned great praise by saying that although he could not build Jerusalem he wanted to defend England’s green and pleasant land. Would it not be a good idea if Mr Boles studied that remark and its implications and realised that that is the policy that we support, which ties in with the Government’s policy announced last year, and which would not result in east and west bank settlements all over our land?
Baroness Hanham
My Lords, that is a little bit unfair, if I may say so. We all recognise that we need more housing and that there are different parts of the country where housing will be needed. We all recognise that there are different sorts of land that will be required to meet the housing needs in any particular area. But we still maintain that the green belt should be retained; it is a very important part of ensuring that our countryside remains open. My honourable friend was drawing our attention not only to the amount of land that is needed but to the need to ensure that we have decently designed houses with a little bit more space than at the moment.
Baroness Ford
To avoid building on greenfield land, do the Government now regret their initial decisions to abandon the sequential test for brownfield land and all the targets for building on brownfield land that were rejected in 2010?
Baroness Hanham
My Lords, the first priority in the National Planning Policy Framework is for brownfield land to be developed. Not all brownfield land is appropriate for housing; not all brownfield land is cheap for development and housing. Nevertheless, it remains a priority for local authorities to look at what brownfield land they have and develop it. However, brownfield land is primarily in city centres and, as noble Lords have often pointed out in this House, there are requirements for housing in rural areas as well.
Lord Tope
My Lords, does the Minister agree that, even when land is available and planning consent has been given, the houses still need to be built? Does she agree that lifting the cap on local authorities’ ability to borrow against their housing stock would go a very significant way towards enabling such houses to be built? Is she aware that London Councils has calculated that if that cap was lifted, 54,000 new homes could be provided in London alone? Are the Government going to act on this?
Baroness Hanham
My Lords, it is a matter for the Chancellor whether the cap is lifted on local authority borrowing. It is not something that I can enter into at the moment. Local authorities know their limitations as far as prudential borrowing is concerned at present.
Lord Best
My Lords, does the Minister agree that a very good way of minimising the take of land, while maximising the number of people who are housed, is by building retirement apartments? The people who move into those retirement apartments—which are much better for them—often vacate three-bedroom or four-bedroom houses. Did she note the statistic in the report by the All-Party Parliamentary Group on Housing and Care for Older People last week that 85,000 homes for older people would actually lead to 400,000 people being housed because of the homes that they vacate?
Baroness Hanham
My Lords, first, I congratulate the noble Lord, Lord Best, on the HAPPI 2 report, which introduced these figures. Yes, of course, it would be ideal for older people to have housing that is absolutely suitable to their needs and built especially for them. It would remove the possibility that they are living in family housing that is too big for them and hard to cope with. It is right that those statistics mean that there would be more housing for families under those circumstances.
Public Service Pensions Bill
(11 years, 5 months ago)
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Financial Restrictions (Iran) Order 2012
(11 years, 5 months ago)
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Financial Services Bill
(11 years, 5 months ago)
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Lord Sassoon
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, in most cases the legislation places duties, powers and obligations on the Bank as an institution. The Court of Directors is responsible for managing the Bank’s affairs. In practice, the Court of Directors, in a similar way to other governing bodies, delegates the vast majority of the Bank’s day-to-day decisions to the executive, with the court itself taking only the most important strategic decisions. There are, however, some instances in the legislation where the duties, powers and obligations are placed directly on the court. For example, the court is responsible for determining the Bank’s strategy, including its financial stability strategy, and it also has the power to delegate additional functions to the FPC.
On Report, the noble Lord, Lord Eatwell, and I discussed whether the court would take the decision whether or not to withhold from publication a report of the oversight committee. I stated clearly that I would expect a decision of this importance to be taken by the court rather than to be delegated to the executive. However, in the light of that debate, I asked my officials to look right through the Bill again to see whether there were other key decisions for which responsibility should lie unequivocally with the court. This group of amendments is the result.
Amendments 4, 5, 6 and 7 confirm that the court will decide whether oversight committee reviews should be withheld from publication in order to protect the public interest.
Amendments 1, 12 and 26 to 31 make the same change to confer a number of other responsibilities directly on the court. These are the power to delegate additional functions to the oversight committee, responsibility for being consulted on the PRA’s strategy, and the power to appoint non-executive members to the PRA board.
Amendment 25 puts beyond all doubt that the court may not delegate any functions that are explicitly given to it in legislation. I should make it clear that this does not mean that all functions that the legislation confers on the Bank will automatically be undertaken by the executive. The court will of course retain discretion either to delegate these roles to the executive or to reserve those decisions for itself. However, I believe that these amendments provide important clarity by identifying those roles within the legislation that will be the responsibility of the court in all cases. I beg to move.
Lord Eatwell
My Lords, I am very grateful to the noble Lord for having clarified some obscurities in the Bill that arose from the use of the generic term “the Bank” to refer sometimes to the court and sometimes to the executive. However, the noble Lord has just said something which has disturbed me. He said that, for clarification, when the term “Bank” is used, this does not necessarily mean the executive; it may mean the court. It seemed to me that he was acknowledging that an uncertainty remained. Perhaps I misheard. I should be very happy if I did, because the sort of clarification that he has set out is very welcome.
Lord Flight
My Lords, there is one area in this territory on which I would appreciate some clarity. The principle of returning the oversight of banks to the central Bank, which I think has been widely supported, has, to my mind, always been about the concept that the central Bank ought to be in regular contact with banks, that it ought to know what is going on and that it ought to be able to head off practices that are clearly potentially damaging to the banking system. However, I am not clear how the staff of the Bank and the staff of the PRA will interact. One would have thought that quite often it would be the staff of the Bank who were having regular dialogue with banks and learning what was going on and what might be going wrong, but it is the PRA—to some extent a sort of cuckoo plopped into the middle of the Bank of England—that essentially has the legal tasks. Therefore, we have clarification of the definitions of “Bank” and “court” but below what I call the executive level I am still not entirely clear where the staff of the Bank or the staff of the PRA will be carrying out supervisory activities.
Lord Sassoon
My Lords, in response to the question raised by the noble Lord, Lord Eatwell, as I said at the beginning of my remarks, the Court of Directors is the governing body of the Bank, so ultimately it is for the court to decide who takes what decisions and which decisions should be for the Bank. In the legislation, “the Bank” certainly does not mean the Bank executive; it means the Bank of England. Therefore, it is always for the Court of Directors, just as it is for the governing body of any corporate institution, to decide who takes what decisions and, if the governing body does not delegate them, it takes them itself. We are making clear through these amendments that there is a certain small category of decisions—one of which was identified by the noble Lord, Lord Eatwell—that is of such importance that it is appropriate to put down for the avoidance of doubt in the legislation that it is the court not the executive that takes those decisions. That is what those amendments do.
Lord Eatwell
Just for clarity, the noble Lord said that it is the responsibility of the directors—that is, the court—to decide who takes the various decisions. I presume what he has said does not apply to the Monetary Policy Committee?
Lord Sassoon
Indeed. I should say that it is subject to what is laid down in statute about the Monetary Policy Committee and the Financial Policy Committee and so on. If they are decisions of the Monetary Policy Committee, then they are the decisions of the Monetary Policy Committee. If they are the decisions of the Bank, the court will decide how they are taken. As for the question from my noble friend Lord Flight, of course it will be the PRA staff who will supervise and lead on the direct relationships with the banks or insurance companies, for example, that are being supervised. Technically, the PRA staff will be seconded from the Bank. There will be a close working relationship, which is part of the benefit of bringing it all together under the one umbrella.
Lord Barnett
I hope I did not misunderstand, but the Minister seemed to say that all decisions of the Bank are made by the court. Does that mean that when the Governor of the Bank of England makes a policy decision, it is not his decision, but a decision of the court?
Lord Sassoon
No, my Lords, that is not what I said. I said that the court is the governing body of the Bank. So unless specified in some other way, it is ultimately the decision of the court as to whether it takes a decision or delegates it. When it comes to policy decisions of the sort that the noble Lord is describing, they are of course delegated ones. All we are trying to do in this amendment is make it clear what decisions should be taken by the court and only by the court.
Lord Newby
Lord Newby
My Lords, this is a group of minor technical amendments which simply remedy some drafting glitches in a number of cross-references in the Bill and address minor drafting inconsistencies. I do not propose to go through each amendment, but will answer any questions that noble Lords might have on them.
Lord Sassoon
Lord Newby
Lord Newby
My Lords, in response to an amendment at Report put forward by my noble friends Lady Noakes, Lady Wheatcroft and Lady Kramer, we committed to come back with amendments to rebalance the FPC’s membership. These amendments are intended to do just that. They will remove the executive director responsible for market analysis from the FPC. This will shift the FPC’s balance so that it includes five Bank executives and five non-Bank executives, including four independent members. Crucially, this will retain the Bank’s majority on the FPC, as the committee’s chair will have a casting vote. As we have said previously, we believe that it is vital that the Bank remains in the majority on the FPC if we are to hold the Bank accountable for its performance. Amendments 23 and 24 reduce the FPC’s quorum from seven to six, to compensate for the smaller membership. Noble Lords will note, however, that we have retained the requirement that at least one of the external members be present in order for the committee to be quorate. These amendments again demonstrate that the Government have listened to the House and responded accordingly. When this change was discussed at Report, it was widely welcomed and in that spirit, I hope the House will support these amendments. I beg to move.
Lord Sassoon
“(2) The member appointed under subsection (1)(d) is to be a person who has executive responsibility within the Bank for the analysis of threats to financial stability.”
Lord Barnett
Lord Barnett
My Lords, the amendment relates to something originally in the Bank of England Act 1998 which should not have been there in the first place. My noble friend Lord Peston and I tried very hard for it not to be put in but failed at the time. I hope that we will be more successful today.
The words “subject to that” should never have been there in the first place. All they mean is that the Governor of the Bank of England—and we will have a new one next July—will have his hands tied fast. He must first get stability—that is, control inflation—and only then can he look at the Government’s economic policy. Frankly, I would prefer that he looked at someone else’s economic policy than that of the present Government because I am not very happy with it. However, that is how it should be: the governor should look at the Government’s economic policy—and given what we heard in the Autumn Statement, someone else certainly needs to look at the situation and at this Government’s economic policy.
The new governor may be as good as everyone says—I hope he is—but I think what he can do with the economy has been massively overstated because that is primarily the responsibility of the Chancellor of the Exchequer. Sadly, the present Chancellor—whose first line in the Autumn Statement should have been an apology—has said everything is marvellous. It is hard to believe that anyone could do that, but the Chancellor did it.
It would help if the new governor had at least a responsibility to look at the economy to see whether he can help the Chancellor. It would be helpful to the Government to have the words deleted and that is all I am seeking to do. I shall not take up any more of the House’s time. I beg to move.
Lord Peston
My Lords, I wish to add two or three remarks to what my noble friend Lord Barnett has said.
On any logical grounds, “equal weight” is precisely what the Government would want to see in this part of the Bill. One feels that somehow the computer got jammed and “subject to that” got stuck in all over the place for no good reason. I would be surprised if the Minister is not sympathetic to the amendment.
I wish to make two remarks in regard to the prospective governor. First, I know that he felt it was right for him to appear before the Treasury Select Committee in the other place in order that its members should know who he was. Bearing in mind the vast amount of work that noble Lords have put in to this Bill, which is devoted overwhelmingly to the Bank of England, and given that, with much regret, we will be dealing some day with a Bill about the Bank of England without the Minister being the lead figure, I would like to go on record as saying that it would be a good idea if the prospective Governor of the Bank of England appeared before your Lordships’ Economic Affairs Committee so that he could become known to us as well as to the other place.
My second remark is in favour of the prospective governor. Eyebrows have been raised that he is being paid approximately £600,000 for this job, which is a lot of money—certainly to an impoverished ex-professor. None the less, given that the prospective governor could earn between £10 million and £15 million per annum—most of which, I would guess, would end up being tax-free—someone ought to reassure him that, if anything, we are getting a bargain and he is doing us a favour rather than us doing him a favour by appointing him.
Lord Sharkey
My Lords, I support some of the sentiments, but not the amendment, of the noble Lords, Lord Barnett and Lord Peston. Like them, I believe it would be a good thing if Mr Carney were to appear before the Lords Economic Affairs Committee as well as the Commons Treasury Committee. Mr Carney is entirely used to dealing with bicameral legislatures with separate committees. On 30 October this year, he appeared before the Canadian House of Commons Standing Committee on Finance to discuss the October monetary policy report. The following day, he appeared before the Canadian Senate Standing Committee on Banking, Trade, and Commerce to discuss the same report.
However, since this is a suggestion from the noble Lords, Lord Barnett and Lord Peston, I know they would prefer me to use the word “must” rather than “may”, but it may be better to suggest to the Minister not that Mr Carney must appear before our Economic Affairs Committee but that he may want to appear. The Minister may want to suggest this to him.
Lord Sassoon
My Lords, I will make sure that the suggestion to Mr Carney is passed on, but of course it is breaking radical new ground that a prospective governor should appear before the Treasury Select Committee, and I do not know whether we want to be too radical at this juncture, but the point is taken.
Turning to the matter in hand, first, I have to admire the persistence, consistency and eternal optimism of the noble Lords, Lord Barnett and Lord Peston, on this matter. I am sorry to disappoint the noble Lord, Lord Peston, but on this occasion the Treasury’s word processor did not slip a few words. There is a very important issue here, which is why the two noble Lords raise this matter on a regular basis. We debated very similar amendments to this one in Committee and on Report, although I recall that on Report the amendment was moved by the noble Lord, Lord Eatwell, on behalf of the noble Lords, with, let us say, a degree of enthusiasm.
The House will be unsurprised to learn that my position on this point is unchanged on the back of what I have heard this afternoon. The FPC’s primary objective must be financial stability. Financial stability is the FPC’s reason for being, its primary purpose. The aim of the committee will be to secure a safe and stable financial system, which will help create the conditions necessary for stable and sustainable economic growth. I should not rise to every bit of bait but I have to say that my right honourable friend the Chancellor of the Exchequer has done an outstanding job in extremely difficult economic circumstances, as we will discuss later this afternoon. While he is always grateful for any additional advice, we should have the FPC stick to its main task as its primary objective.
The legislation makes clear that, subject to achieving its primary objective for financial stability, the FPC should act to support the Government’s economic objectives. This structure strikes the right balance, by giving the FPC a clear and positive mandate to support economic growth, but without prejudicing its primary responsibility to protect and enhance financial stability. It is clear already, from the way that the shadow FPC is operating, that it has this mandate well on board.
The primary flaw with the structure proposed in Amendment 10—namely, to give the FPC dual, equally weighted objectives—is that this would allow the FPC to take action that would damage financial stability with the aim of encouraging growth. This would take the FPC outside its remit and expertise, and directly frustrate its primary purpose, which is financial stability. I simply do not believe that the model proposed by the noble Lords is appropriate or workable and I ask the noble Lord to withdraw his amendment.
Lord Barnett
I am never surprised by the noble Lord and I am certainly not surprised today. I think I heard him say that the model produced by my noble friend Lord Peston and me—we do not normally produce models, but I am very happy to do so on this occasion—would prejudice the Government’s policy. I do not know what policy of the Government needs prejudicing. At the moment, everything is going well, according to the Chancellor, and instead of apologising, as he should have done, in the first line of his Statement he said that everything is healing. Now we are told that we should give the brilliant new governor an opportunity to comment to the Chancellor on the economy—he certainly needs someone to tell him something about his policy.
How can the Minister say that the FPC would prejudice financial stability because it might go for economic growth? I have heard some arguments against what my noble friend and I have suggested for a long time, but to suggest that that is the answer that the Treasury is using is quite incredible. I wish I had heard him differently. I am very sorry indeed that that was his reply, and I simply do not accept it.
Lord Newby
“( ) The purpose of a review is—
(a) in the case of a direction, to consider whether the direction ought to be revoked, and(b) in the case of a recommendation, to consider whether the recommendation ought to be withdrawn.”
Lord Newby
My Lords, Amendment 11 responds directly to a request made by the noble Lord, Lord Eatwell, on Report. On hearing my noble friend Lord Sassoon’s explanation of the underlying purpose of the FPC’s reviews of its live actions—namely, to consider whether they are still necessary and whether they should be removed or revoked—the noble Lord, Lord Eatwell, responded,
“if that is what the new section meant, why did it not say so?”.—[Official Report, 6/11/12; col. 978.]
I believe that the purpose of the reviews could have been derived implicitly from the clause as it was originally drafted. However, I accept that this could be made more explicit in the clause, and Amendment 11 seeks to do exactly that. This is a straightforward amendment, which responds directly to concerns raised in this House about the clarity of the drafting. I hope that noble Lords can support it. I beg to move.
Lord Eatwell
My Lords, I am grateful to the Government for having taken on board the fact that there was some infelicity in the drafting at this point. I am delighted to support the amendment.
Lord Sassoon
Lord Sassoon
“(5A) The FCA may refuse an application under subsection (5) if it appears to it that it is desirable to do so in order to advance any of its operational objectives.”
“(5A) The PRA may refuse an application under subsection (5) if it appears to it that it is desirable to do so in order to advance any of its objectives.”
Lord Sassoon
“137BA FCA general rules: cost of credit and duration of credit agreements
(1) The power of the FCA to make general rules includes power to make rules prohibiting authorised persons from—
(a) entering into a regulated credit agreement that provides for—(i) the payment by the borrower of charges of a specified description, or(ii) the payment by the borrower over the duration of the agreement of charges that, taken with the charges paid under one or more other agreements which are treated by the rules as being connected with it, exceed, or are capable of exceeding, a specified amount;(b) imposing charges of a specified description or exceeding a specified amount on a person who is the borrower under a regulated credit agreement;(c) entering into a regulated credit agreement that—(i) is capable of remaining in force after the end of a specified period, (ii) when taken with one or more other regulated credit agreements which are treated by the rules as being connected with it, would be capable of remaining in force after the end of a specified period, or(iii) is treated by the rules as being connected with a number of previous regulated credit agreements that exceeds a specified maximum;(d) exercising the rights of the lender under a regulated credit agreement (as a person for the time being entitled to exercise them) in a way that enables the agreement to remain in force after the end of a specified period or enables the imposition on the borrower of charges within paragraph (a)(i) or (ii).(2) “Charges” means charges payable, by way of interest or otherwise, in connection with the provision of credit under the regulated credit agreement, whether or not the agreement itself makes provision for them and whether or not the person to whom they are payable is a party to the regulated credit agreement or an authorised person.
(3) “The borrower” includes—
(a) any person providing a guarantee or indemnity under the regulated credit agreement, and(b) a person to whom the rights and duties of the borrower under the regulated credit agreement or a person falling within paragraph (a) have passed by assignment or operation of law.(4) In relation to an agreement entered into or obligation imposed in contravention of the rules, the rules may—
(a) provide for the agreement or obligation to be unenforceable against any person or specified person;(b) provide for the recovery of any money or other property paid or transferred under the agreement or other obligation by any person or specified person;(c) provide for the payment of compensation for any loss sustained by any person or specified person as a result of paying or transferring any money or other property under the agreement or obligation.(5) The provision that may be made as a result of subsection (4) includes provision corresponding to that made by section 30 (enforceability of agreements resulting from unlawful communications).
(6) A credit agreement is a contract of the kind mentioned in paragraph 23 of Schedule 2, other than one under which the obligation of the borrower to repay is secured on land: and a credit agreement is a “regulated credit agreement” if any of the following is a regulated activity—
(a) entering into or administering the agreement;(b) exercising or being able to exercise the rights of the lender under the agreement.(7) In this section—
(a) “specified amount” means an amount specified in or determined in accordance with the rules;(b) “specified period” means a period of a duration specified in or determined in accordance with the rules;(c) “specified person” means a person of a description specified in the rules;(d) subject to that, “specified” means specified in the rules.”
Lord Sassoon
My Lords, on Report I committed to bring forward a government amendment to give the FCA an effective power to make rules capping the cost and the duration of a regulated credit agreement. I am grateful to the noble Lord, Lord Mitchell, for raising this on Report and to noble Lords on all sides of the House who spoke in support of the need for action against sharp practices in the payday lending industry. The Government warmly welcome the cross-party consensus that emerged on this important issue.
As I said on Report last week, the Government were fully in agreement with the intent behind the noble Lord’s amendment but felt that there were weaknesses in the way it was framed. We have made use of the time between Report and tabling this amendment at Third Reading to get this power right and ensure that it is watertight. Moreover, I also committed to going further than the noble Lord, Lord Mitchell, proposed, by making additional consumer protections integral to the power.
The Government’s amendment spells out in detail the kind of rules that the FCA may make to prevent lenders from imposing excessive interest rates or associated charges on borrowers, and clarifies that the FCA would be able to specify the level of the cap in rules and also to define which charges, in addition to interest, should be captured. The amendment also allows the FCA to impose limits on the duration of the agreement, and to specify the detail of the cap and other restrictions in its rules.
Those who have compared the Government’s amendment tabled yesterday with the amendment of the noble Lord, Lord Mitchell, will have noted that the Government’s version is significantly longer and more comprehensive in its detail. I said last week that we would take care to frame the power to prevent unscrupulous firms exploiting loopholes and to ensure that consumers were properly protected. The Government specifically ensured that this power covers associated charges to avoid unscrupulous firms “gaming” the restrictions by, for example, reducing the interest rate but introducing exorbitant fees for related services such as setting up the loan. It also specifically captures the practice of rollovers, which we have seen abused by some players in the payday loans industry. Under the amendment the FCA will have a specific power to impose a limit on the overall duration of the rolled-over agreement and a limit on the number of rollovers that are permitted.
The government amendment has also built in robust protections for consumers who fall victim to lenders’ excessive charges. First, the FCA can provide that the lender cannot enforce the agreement and the borrower is not obliged to repay the loan. Secondly, it can provide that any money or property transferred under the agreement—an item that has been pawned, say—must be returned. Thirdly, it can provide that compensation must be paid to the consumer.
Before moving on I will address briefly one provision in the amendment of the noble Lord, Lord Mitchell, that we omitted in tabling the Government’s version: namely, a specific reference to consumer detriment or consumer protection. That is because the FCA will already be prompted to respond when it detects consumer detriment. Under Section 137A of FiSMA the FCA may make general rules only for the purposes of advancing one or more of its operational objectives. These are: securing protection for consumers, protecting and enhancing the integrity of the financial system, and promoting effective competition. As such the consumer protection objective will provide the strong underpinning mandate for the FCA to make rules under the new power that we are discussing. It is not therefore necessary to spell it out further in the Bill.
While I am confident that our amendment clarifies the FCA’s role in this important area, we must be careful not to regard this power as a silver bullet that will fix all the problems in the payday lending sector. As the OFT’s recent report into the high-cost credit market showed, it is clear that regulation of the payday lending market as a whole needs to improve. Compared to the current regulatory regime under the OFT, the FCA will have a broader and more effective toolkit to monitor and tackle developments in the market and supervise practice among firms.
Capping the cost of credit and the number of times that the loan can be rolled over is a major market intervention, and I expect the FCA to contemplate the use of this power in a responsible and measured way. I discussed the mixed picture from international evidence on Report. We must avoid at all costs any such cap resulting in catastrophically unintended consequences, such as driving vulnerable consumers to illegal loan sharks. However, as I said on Report, we need to ensure that the FCA grasps the nettle when it comes to payday lending. This amendment grants the FCA the powers to deliver effectively on its consumer-protection objective and tackle consumer detriment. It is a power that I hope all sides of the House will wish to support. I beg to move.
Lord Mitchell
My Lords, never in my wildest dreams did I ever expect that I would be standing here at the opposition Dispatch Box with my name on an amendment alongside a government Treasury Minister. It is some achievement and could occur only in your Lordships' House and not in the other place. I thank the noble Lords, Lord Sassoon and Lord Newby, for the very constructive way in which they responded to the amendment we put forward. They listened to what we had to say, took our comments away and came back with an amendment that is entirely acceptable to us. However, I would not like them to think that this is a complete love fest—normal service will resume at some other time.
It is worth recounting that the Government told us in Committee that the points which we wanted were already in the Bill. We tried hard to find the location of those points—and no doubt they are buried somewhere. However, with an issue like this one, which is so important, it is dangerous to have implied rules which have to be inferred. Many of these payday loan companies have very successful lawyers and access to some of the best brains in the country in this area. The provision would have been a complete dog's breakfast, to be honest.
We tried again at Report, and I admit that I came in here today ready for battle. However, I was astonished and delighted at the complete turnaround that the noble Lord, Lord Sassoon, has offered. He promised us a better amendment and that is what we have been given. The new amendment is stronger, tighter and more effective, and most of all, it offers complete clarity. I would not be human if I did not savour the moment just a jot. It probably will not happen again, but it is good that it has happened today.
I have been asked why the Government conceded and no doubt at some stage, over a gin and tonic, I will find out. However, I feel that it was due to two reasons —the political argument, and the moral argument. As for the political basis, the Government knew that they would be defeated last Wednesday on Report. It had been a bad couple of weeks for the Government and another defeat was something that they could do without. The moral argument, however, was more important. I was fortunate because the noble Baronesses, Lady Howe of Idlicote and Lady Grey-Thompson, and the right reverend Prelate the Bishop of Durham added a non-political independent gravitas to what we were trying to do. I thank them from the bottom of my heart. I also thank all noble Lords who contributed to the debate.
The media also took up this cause with a vengeance. Every article and television programme that I read or saw seemed to back our position. They were against the payday lending companies. Indeed, I am sure that the man in the street in this country was also in favour of regulation. Everybody seemed to be in favour of it except for the payday loan companies themselves—and I was nobbled in the most unlikely of locations by them or their representatives telling me how wrong we were. However, the Government conceded because the political and moral arguments were absolutely against them. They did concede and I am grateful to them for the positive way in which they have dealt with this issue.
I had two questions to ask about consumer detriment and time and duration but the Minister has addressed them in his speech. He said that there was no silver bullet for this and I absolutely agree. As we go forward perhaps we should look at what is happening in other countries. I spoke at Report about the experience in Florida, which has had an amazing result. I repeat that anyone who takes out a payday loan in that state has to register it as a charge. They have to pay for it and it goes on to a database. It is known that they have a payday loan. That absolutely prevents any individual having more than one payday loan on any one occasion. That is something that we should look at for the future.
This provision will go forward and become a new law but I believe that it will also become a statement of intent. This amendment is simple, symbolic and now stands alone. This industry is going to be controlled. For many people out there, the world is now a slightly better place.
The Lord Bishop of Guildford
My Lords, those of you who were present for prayers earlier this afternoon will have perhaps noted the irony with which this Prelate quoted from Psalm 15, which speaks about taking money upon usury. In rabbinic and Jewish interpretation that is interpreted as “not unreasonable” usury.
I have to express my gratitude to the Government and the Minister for this excellent amendment. I do so on behalf of the Bench that I sit upon and especially on behalf of the right reverend Prelate the Bishop of Durham, who has had unfortunately to go home for urgent diocesan business, otherwise he would have been making some of the comments that I have been making. I will not go into the detail but I will make one final comment—on the way that your Lordships’ House conducts its business when we are at our best. This seems to me to be a very good example of that. We had an amendment and then rational discussion in debate at various levels—Cross-Bench, opposition, government—and then we had an excellent amendment. For that I thank the Government and all who have taken part in this important debate.
Lord Peston
My Lords, I start by congratulating my noble friend Lord Mitchell and the noble Lord, Lord Sassoon, on a very great achievement. However, as everybody seems to understand the amendment in every way except for me, I have three questions in case I have misunderstood what the noble Lord said.
I read the amendment as saying that it gives the FCA the power to do all the things that we want it to do. However, I was not very clear whether he was then saying that, under its consumer protection mandate, it follows immediately that it must exercise that power. This is our favourite “may” and “must” question. You can give someone power but they may not use it. However, am I right in understanding that this amendment, coupled with the whole of the rest of the remit for the FCA, essentially means that it will now have to go into this field and deal with it in the way suggested, or is it still up to it whether it bothers with it? I would like the answer to that question.
The second question we had—if we recall our little debate on this last week—was on the concept of transparency. The great reason why this is a racket is of course that the average consumer/borrower who is not an expert in this field does not know until he has signed up what he is signing up for. Am I right in assuming that this amendment will make sure that the one thing that would happen as a result of this—do not let us worry for the moment about bankruptcy and all that for these firms—is that consumers will definitely know what they are letting themselves in for? Certainly my attempt to look up at least one site on this showed that you do not get to what you are letting yourself in for until you are virtually locked in. Am I right that this amendment is both transparent in general and also transparent with regard to what you have let yourself in for?
I do not say this in a negative way in terms of saying we do not want this; this is a tremendous achievement. I am looking for a bit of enlightenment to make sure that I understand what it means.
Lord Barnett
My Lords, perhaps I may add to what my noble friend Lord Peston has said. I will not repeat the may/must argument; it has been well enough made, and I hope that we will get a reply from the noble Lord, Lord Sassoon. Incidentally, in congratulating my noble friend Lord Mitchell, perhaps it is right that I should also congratulate the noble Lord, Lord Sassoon. This may be our last exchange before he retires.
The noble Lord, Lord Sassoon, mentioned the assumption that the FCA will now have the powers to deal with these unscrupulous people regarding payday loan schemes. As my noble friend Lord Mitchell said, they will have lots of good lawyers because when people have many profits to defend, as they do, they tend to use lots of lawyers. While I am not a lawyer, I hope that the noble Lord’s lawyers have indeed drafted this correctly. I know that these things can never be done tightly enough and that once lawyers get involved it finishes up in the courts for somebody else to decide. That is bound to happen and I am not blaming the noble Lord, Lord Sassoon, or his legal advisers for it. In my experience, when court actions involve lawyers on two sides in major cases, both advise their clients that they are right and that they should go to court about it. That becomes very expensive and they eventually resolve it only in the court.
As the noble Lord, Lord Sassoon, said, although he is confident about this provision, it is nevertheless not a silver bullet. Does he think that the advice he has been given will result over the next few months or weeks in the lawyers worrying about it? At the end of the day, will we require secondary legislation to deal with this? I hope not—I hope that the lawyers have it absolutely right this time. However, as the noble Lord said, one of the worries is the law of unintended consequences.
This is such a complex area but I like the point that my noble friend Lord Mitchell made about what happens in, I think, Canada.
Lord Barnett
In Florida, they have to register this. If it was in Canada, the new Governor of the Bank of England would have a still better idea. It may be that he still does because he seems a very bright fellow and he will know what happens in Florida. Perhaps, some time in the not too distant future, we will have something like what my noble friend Lord Mitchell quoted because that seems to me, as a non-lawyer, to be a sensible way forward. I hope that we can move that way in future. For now, it only remains for me, too, to congratulate all concerned in this matter and wish the new amendment well in the future.
Lord McFall of Alcluith
My Lords, I congratulate the noble Lord, Lord Mitchell, the Government and others in the House on passing this Act because in terms of consumer protection in Acts, the wheels turn very slowly. The Consumer Credit Act 1974 was only superseded because of a lot of effort by quite a number of us in the other place in getting another Consumer Credit Act in 2006, 32 years later. At a time when we have the internet and technology has increased enormously, that means that the imbalance between the consumer and the industry gets even steeper, so I welcome this amendment today and the efforts that have been put into it.
In particular, I congratulate the Minister, the noble Lord, Lord Sassoon, as he departs the Front Bench. He deserves our hearty congratulations because for years we have listened to the plea, “Let the market work”. What happens when we let the market work, to be euphemistic, is that innovation takes over and innovation, as the Minister says, equates to sharp practices. Once we pass this in the House today, it will be going out into the cold light of day and I can tell everyone in the House that innovation will take place and we therefore have to be on our guard.
This is but a first step but it is a huge first step. In line with the comments made by other Peers, I ask the Minister for clarification on these points. First, will the new clause cover all costs and charges levied by payday lenders or borrowers? Secondly, when will it come into force? A number of us are worried that we could be waiting for a long time before it is brought in and that, in the interim, the sharp practices will continue. Lastly, how do the Government envisage the cap being set and does the Minister have in mind at what level he expects that cap to be set? It is important to give some direction to the FCA in today’s debate. My last word to the Minister is to offer my congratulations as a new life beckons in front of him, which I hope is just as prosperous.
Baroness Howe of Idlicote
My Lords, I had not intended to say anything today, because I was pleased with the amendment. The more I listened to the explanation, however, the more enthusiastic I became about it. So I wanted to add my thanks to the noble Lord, Lord Mitchell, for all that he has done here, as well as to the noble Lord, Lord Sassoon, and everybody else who has been involved in the redrafting. I am sure it will not solve all the problems. I would also like to ask when it will come into force; I imagine that it will not be all that far ahead. Nevertheless, as has been said, it is an extremely important and valuable step in the right direction.
Lord Sassoon
My Lords, I am grateful for all those contributions. I will briefly respond to some of the specific questions. First, the noble Lord, Lord Peston, asked whether this means that the FCA has to go into this field. Absolutely it does; it would have to anyway. Putting all this in the Bill will concentrate the FCA’s mind wonderfully. However, as the noble Lord knows, it is an enabling power; the FCA may make these rules, but this does not say that it must make them.
On the noble Lord’s other questions about whether consumers know what they are letting themselves in for, this is one of the other areas that clearly needs attention, as I indicated in my opening remarks. Whether this is addressed under the consumer credit directive or the consumer protection regulations, it is another parallel area. I stress again that we are getting to the heart of the issue in this amendment, but this is not the sum total of it.
There were also questions about when the rules might come in. The rules will come in when the FCA gets round to making them. There is nothing to stop the OFT moving ahead. The next thing we are expecting is the academic report, which refers in some detail to the international evidence about the pros and cons of caps. That will be part of the evidence base that will be used, building up to any rules that may or may not be put in place. However, I can assure the noble Lord, Lord Barnett, that there is no question of secondary legislation here. We are giving the FCA a clear rule-making power; its rule-making procedures will then go for consultation, but this does not need to come back through the channel of secondary legislation.
Lastly, I turn to the questions from the noble Lord, Lord McFall of Alcluith. In parenthesis, I would argue that there have certainly been financial innovations that have been beneficial, but perhaps we will leave that debate for another day. The noble Lord asked whether all costs and charges would be covered. Yes, they will—all of them. He asked when this comes into force. This specific power comes into force in April 2014, when credit becomes a regulated activity under the FCA. Of course, that will not stop the Government and the OFT looking at what may need to be done before then, but we are talking about a Bill that relates in this instance to the powers of the FCA when they are transferred over. As far as what the cap should be, that will be a matter for the FCA. It is a very difficult question that will need careful thought. As I have already indicated, the Bristol study, which is coming out very soon, will be an important contribution to that thinking. We are putting an important building block in place today, but it is not the only building block in this area.
Lord McFall of Alcluith
My Lords, I do not want to push my luck too much with the Minister, but he says that the rules will come in as and when the FCA decides, and that is 2014. We have a bit of time before then. Given that there is urgency regarding the adoption of this clause and all-party agreement about it, it would be good if he could elaborate on those comments so that he sends a message from here today to the industry and the regulators that this is a matter of urgency and that Parliament wishes to see early action on this matter. We do not want to wait until mid-2014. Just to add icing to the cake, will he please elaborate?
Lord Sassoon
My Lords, I am sure that the industry has got the message loud and clear from this House that more needs to be done. Of course, it need not wait until April 2014; there are plenty of other things that can be done in the mean time if appropriate.
Lord Sassoon
“(a) rules made by the FCA under section 137BA, or”
Lord Newby
Lord Newby
My Lords, last week on Report my noble friend Lord Sassoon signalled that the Government were minded to bring forward amendments at Third Reading to address some of the concerns that have been raised by the industry regarding the proposal to confer on the Bank of England an additional power of direction over clearing houses. This group of amendments reflects those concerns.
First, the amendments will require the Bank to be satisfied that any direction made under the power is necessary, having regard to the specified public interest criteria, rather than simply desirable. Secondly, they will put it beyond doubt that this additional power of direction will not be available in instances where the desired direction could be given under the Bank’s existing power of direction under Section 296 of FiSMA. Thirdly, the Bank, in instances where it gives a direction under this power without giving the recipient prior notice, will be required to explain to the recipient after the direction has been given why the direction was given, and why no prior notice of it was given. I should also make it clear that any justification given pursuant to this requirement will be given to the clearing house directly, will not be published and will not divulge sensitive information that might harm the public interest. Fourthly, these amendments will give effect to the assurance that we have already given the House that the additional power of direction could not be used to compel a clearing house to accept the business of a competitor. The amendments will provide greater certainty to clearing houses regarding the circumstances in which the additional power of direction could be used.
To alleviate any remaining doubts from industry, I repeat the assurance that my noble friend has previously given the House: the power of direction relates only to the recognised clearing house itself. The Bank of England cannot use the power of direction to require shareholders, members or clients to recapitalise or otherwise fund a failing recognised clearing house, with one exception: where the UK clearing house already has recapitalisation arrangements and agreements in place with its shareholders. In this instance the Bank of England could use the power to direct the clearing house to enforce those arrangements, provided that the necessary conditions and safeguards were met. Furthermore, this power cannot be used retrospectively.
The Bank of England also expects to publish a supervisory approach document in the coming weeks. This will give further information on how powers of direction will fit within its wider supervisory powers over recognised clearing houses. I beg to move.
Baroness Cohen of Pimlico
I, too, am supporting a government amendment, though one that is not nearly as dramatic as that secured by my noble friend Lord Mitchell, whom I congratulate very much not only on doing it but on the thoroughness of his research. He actually took out a loan with one of these companies, an act of true heroism that I hope will not result in his being deluged with peculiar financial products for the rest of his life.
In welcoming this amendment, I remind the House once again that I am a non-executive director of the London Stock Exchange. I very much welcome the Government’s amendments to the powers of direction and the spirit of engagement that HM Treasury and the Bank have offered in dialogue on these matters, and which I know the industry will look to continue. The amendments provide useful further context for the use of the power. They put it mostly outside the scope of a day-to-day power, and reassure us that it will be used only when it is reasonably necessary to do so.
That said, it would be very helpful if the Minister were able to offer any further thinking on the circumstances in which it is envisaged that this power would be used, and took this opportunity to give us his vision for co-operation between HM Treasury, the FCA and the PRA in advising on the powers. All relevant authorities, particularly the Financial Conduct Authority as the market regulator, will need to consider the wider market impact of any proposed direction by the Bank.
Finally, the announcement that the Bank will be consulting on its supervisory approach before the end of the year is very good news. That will be an excellent opportunity for it to explain the intended circumstances under which the Section 296A power would be used, and more generally, I hope, to give an account of the Bank’s approach to capital requirements for clearing houses.
Baroness Kramer
My Lords, I rise with a question for clarification for the Minister. Is the net effect of this amendment to make it clear that the owners of the platform that is clearing derivatives—one of the central clearing platforms—are exposed only to the extent of the loss allocation that is defined in their membership agreement; and that, beyond that, the Government will not, in case of a failing platform, force other platforms to take on open, out-of-the-money contracts? If that is so, is the Minister in effect saying that the backstop for the collapse of an exchange is effectively the taxpayer? I ask that not in criticism, but for the sake of absolute clarity.
Lord Fraser of Carmyllie
My Lords, I declare an interest as a director of ICE Clear Europe, and I warmly welcome this extremely valuable amendment. It seems to go wider; noble Lords may think that it is a narrow amendment, but they have no idea what a sense of confidence it has given to the City at this time. I regard that as very important.
During the 1970s, we generally regarded the Foreign and Commonwealth Office as having the function of managing orderly retreat. Now we have absolute confidence that within the Treasury there is a very clear understanding that it will look after the best interests of the City of London and the pre-eminence of the City. It is a difficult task and I do not underestimate how important that is. The amendment is to be warmly welcomed. Noble Lords may think that it is minor, but it does a great deal more than simply to change the position of the clearing house and the direction.
I have one simple question, and I will not be worried in the least if the Minister slaps me down. Amendment 20 says,
“to accept a transfer of property, rights or liabilities of another clearing house”.
Does that refer only to a clearing house that still operates as a going concern? Frankly, I would regard that as unlikely. It is much more likely that the Bank of England would want to intervene at a point when it was in administration or in the process of liquidation. If I am told that that line encompasses all those particular circumstances, I will be more than happy to be told to shut up.
Lord Eatwell
My Lords, perhaps I may simply elaborate a little on the question posed by the noble Baroness, Lady Kramer. Given that there is not to be a transfer of obligations between platforms, and given that the collapse of a platform could impose significant systemic risk on the economy with a large number of unclear positions, are we to understand that the lender of last resort will be required to stand behind a collapsed platform?
Lord Myners
Perhaps I may also ask a question following that of the noble Baroness, Lady Kramer. The concept of interoperability is very important in the clearing of derivatives, so that corporates in particular can offset a position with one platform where they have a credit with another platform where they have a deficit. Will the Minister clarify that that involves a degree of mutualisation in the event of a failure of a platform because the failure of that platform will transfer to other platforms?
Lord Newby
My Lords, I am extremely grateful for the warm welcome that these amendments have received from across the House. I will deal with some of the specific questions that have been raised. The noble Baroness, Lady Cohen, asked about my vision for the way in which this provision would be used and how I saw the co-operation between the Bank, HM Treasury, the FCA and the PRA.
It may be marginally less than a vision but the situation would be that there is no requirement for the Bank to consult HMT or the other regulators before using the additional power of direction. This is because the additional power of direction is a supervisory tool and, as such, should not require the express permission of HMT before it is used. As I am sure noble Lords would agree, it is not necessary for regulators to consult with HMT before acting on day-to-day supervisory measures. It is also consistent with the similarly broad powers that the FSA currently has to vary permissions in the banking sector.
As for how the Bank intends to use its powers, as I said in my speech, it expects to publish a supervisory approach document in the coming week. Its purpose will be to give further information on how the powers of direction will fit within its wider supervisory powers over recognised clearing houses.
My noble friend Lady Kramer asked a number of questions about where the liabilities would lie and she set out her understanding of where they were. I can confirm that her view of where the powers lie is correct. As a final question, she asked about a backstop power and whether public funds were the backstop. That, of course, is the de facto position today. With this provision, we are seeking to put in place arrangements and resolution arrangements that would greatly reduce the likelihood of public funds being called upon by demonstrating in advance how these issues would be dealt with. I realise that that is a contentious statement because a number of noble Lords will no doubt think that it is extremely difficult to achieve that. Whether it is easy or difficult, that is what we are seeking to achieve by these powers and what the Bank will be trying to achieve.
The noble and learned Lord, Lord Fraser of Carmyllie, asked about going concerns or not-going concerns. The clause refers to a clearing house. It does not matter if the clearing house is no longer a regulated going concern, as I suspect he expected me to say.
The noble Lord, Lord Eatwell, followed up on what the noble Baroness, Lady Kramer, said. Perhaps the only additional comment I should make is that these powers now go beyond any resolution powers of which we are aware elsewhere in the EU, and they are part of our drive to ensure that London is the safest place—in the EU, at least, if not globally—to do financial services business.
The noble Lord, Lord Myners, asked me an extremely interesting question, which was also extremely technical. I hope he will not mind if I write to him about it. I beg to move.
Lord Sassoon
“(2A) The direction may not require the clearing house—
(a) to take any steps for the purpose of securing its compliance with—(i) the recognition requirements, or(ii) any obligation of a kind mentioned in section 296(1)(b) or (1A), or(b) to accept a transfer of property, rights or liabilities of another clearing house.(2B) If the direction is given in reliance on section 298(7) the Bank must, within a reasonable time of giving the direction, give the clearing house a statement of its reasons—
(a) for giving the direction, and(b) for relying on section 298(7).”
Lord Sassoon
Lord Sassoon
Lord Sassoon
“( ) In paragraph 11—
(a) the existing provision becomes sub-paragraph (1),(b) in sub-paragraph (1)(b), for “servant” substitute “employee”,(c) in sub-paragraph (1)(c)(ii), for “servants” substitute “employees”, and(d) after sub-paragraph (1) insert—“(2) The duties and powers that may be delegated under this paragraph do not include duties and powers that are by any enactment expressly imposed or conferred on the court of directors.””
Lord Sassoon
Lord Sassoon
“(b) after subsection (5) insert—“(5A) “The appropriate regulator”—(a) in relation to a controlled function which is of a description specified in rules made by the FCA, means the FCA, and (b) in relation to a controlled function which is of a description specified in rules made by the PRA, means the PRA.”, and(c) in subsection (6), after “Any” insert “other”.”
Lord Sassoon
(d) a decision under section 391(1)(c) to publish information about the matter to which a warning notice relates.”
Lord Sassoon
My Lords, Amendments 33 and 34 concern the new power provided for by this Bill for the regulators to disclose the fact that a disciplinary warning notice has been issued. We have of course already discussed this new power and the safeguards to which it should be subject in quite some detail. I am speaking to these two amendments again only because, as a result of being erroneously assigned on the day’s Order Paper, they were not moved on Report on 26 November. I am grateful to the noble Baroness, Lady Hayter of Kentish Town, for being the first to spot this. So to be absolutely clear, these are simply Amendments 97ZA and 97ZB—as they were—retabled from the Report stage.
To remind your Lordships briefly, Amendment 33 brings the decision to disclose the fact that a disciplinary warning notice has been issued into the list of matters subject to the procedures set out in Section 395 of FiSMA. Amendment 34 sets out the criteria with which the process for deciding to disclose a warning notice must comply, noting that the decision must be taken either by a person other than the person by whom the decision was first proposed, or by two or more persons not including the person by whom the decision was first proposed.
The amendments secure the involvement of the Regulatory Decisions Committee, or an equivalent body for decisions, to disclose the fact that warning notices have been issued. It is a proposal that the House supported and endorsed when we debated it last week.
This group of amendments may be the penultimate time that I will speak on the Bill during its passage through this House. With this in mind, perhaps noble Lords will permit me to conclude this debate by reflecting a little on the past months since our lively Second Reading debate on 11 June. It was so long ago that the England football team was still in the European Championship and preparing to play France as we were kicking off our consideration of the Bill. Of one thing we can be certain: the performance of this House on this Bill was rather better, I regret to say, than the performance of the England football team.
I believe that the Bill that we are sending back to another place is greatly improved from the Bill that we debated at Second Reading in June. That is due to the very constructive contributions and engagement from noble Lords right across the House, not least from the Bishops’ Benches, and I pay tribute to all who have contributed to those debates. No other legislative house in the world could have brought to bear such expertise in financial services and their regulation as this House has on this Financial Services Bill.
As I need to keep my closing remarks brief, I can only apologise for not naming individually the many noble Lords who have made important contributions to our debates. However, I would like to thank the opposition Front Bench—too many of them to name—led so ably by the noble Lord, Lord Eatwell, and the noble Baroness, Lady Hayter of Kentish Town. They have shown real tenacity and skill in their contributions. We have not always agreed with the points that they have made, but I have always valued those points and would like to thank them for their constructive and thoughtful approach throughout.
I thank, too, my noble friends Lord Newby and Lord De Mauley for the support they have given me, not least in calming down the House when it seems to have got rather excited by some of my contributions. This has been a long Bill, and it would not have been possible to provide the level of response that the House has rightly demanded without the able assistance of my noble friends.
I should also mention and thank the Bill team, which has worked continuously to provide support to the House throughout the stages of this Bill. It has done an outstanding job, which has been widely and rightly acknowledged. The excellent work of the parliamentary counsel in drafting the Bill and the subsequent many amendments to it deserves special praise.
I believe that we have significantly improved this important Bill in key areas. We have enhanced the governance of the Bank of England; given economic growth a higher priority in the new regime, for the FPC, FCA and PRA; significantly improved the robustness of the UK financial system by bringing investment firms, recognised clearing houses and holding companies within the special resolution regime; responded to industry concerns, in particular over the new warning notice power; offered consumers better protection, particularly in relation to payday loans; and, in the LIBOR clauses, moved swiftly to tackle the shameful behaviour of some in the industry.
The Government have listened carefully to the views of noble Lords and the amended Bill reflects many of the concerns of this House. The Bill will be an important addition to the statute book, and one that has been greatly improved thanks to your Lordships’ expertise. I beg to move.
Lord Eatwell
My Lords, I rise not with respect to the amendment but to reflect on the latter comments of the noble Lord, Lord Sassoon. As he said, the Bill began its somewhat laborious journey with its First Reading back in May. The process has been extraordinarily laborious considering that it was a politically non-contentious Bill. We should perhaps learn some lessons from this. The main lesson is that, if there is pre-legislative scrutiny, a valuable process that we introduced, more notice should be taken of the conclusions of that scrutiny than is evident in the Bill before us. I refer particularly to the advice from the Treasury Select Committee that a new Bill be drafted rather than that we rely on the complex structure of amendments to prior legislation that we have had to wade through over the past several months.
Given the weighty nature of the work that we have had to deal with, it is appropriate to thank those who have been involved with the Bill. I add my thanks to those of the noble Lord, Lord Sassoon, to my noble friends Lady Hayter, Lord Davies, Lord Stevenson and Lord Tunnicliffe. I also thank Mr Whiting and the Bill team, who have been helpful and courteous throughout, and the noble Lord, Lord Sassoon, for dealing with often complex matters and, occasionally, defending the indefensible with his usual good humour. Finally, in thanking individuals, I must thank Miss Jessica Levy, our talented and all-knowing researcher.
Effective regulation at the macro and micro level of systemic risks and the risks associated with individual firms is in the interests of households and industry and is essential for the success of the UK financial services industry. Therefore, we on this side wish this Bill well. I hope that the measures over which we have laboured will prove a success.
Lord Barnett
My Lords, I cannot let the Bill pass without saying a few words. I described the Bill as “shambolic” and was told by an old friend—a normally good friend who happens to be a former Conservative Cabinet Minister—that he was surprised that I was so political in using that unusual expression. I apologise to the noble Lord, Lord Sassoon, and the House. I could not think of a better word to describe what was in the Bill and what had happened.
My main concern with the Bill is the very principle of giving such huge powers to the Bank of England—and they remain. It is the principle that worries me. We have given huge powers to the Bank of England. We have added to the Bank of England Act, as I mentioned earlier today. We have given the Bank powers over the OFT, FCA, FSA and PRA, and over changes in FiSMA—so many different initials that one forgets precisely what we did do. We amended a lot because there was a lot to amend, because unfortunately these days, under both Governments, the House of Commons guillotines so much that very little gets done properly. Legislation comes to this House for amendment and we amend it well, I am happy to say, as we did on this occasion.
My worry is that we started off with an unusually large Bill: two volumes of clauses and schedules. It was so big and it has become even bigger because we put in provisions dealing with the LIBOR scandal. This should have been a Bill on its own. We on this side of the House rightly agreed with the changes resulting from the Government’s acceptance of the Wheatley report. These provisions dealt with it properly and the Opposition accepted them, but they did not just come forward in a Bill; they came forward scattered in amendments throughout the Bill. I hope that it deals with the LIBOR scandal but it is difficult to tell if it really did, because on top of all this we are now told that there will be secondary legislation as well. I regret to say that we do not understand what we have passed here, because we still do not know what is going to happen.
I hope that we have done the right thing and that everything is going to work out, but the plain fact is that, with the LIBOR scandal, there were some in the Bank of England, the FSA and many other bodies whose main concern was primarily with interest rates. They knew nothing whatever about what the noble Lord, Lord Sassoon—I nearly said “my noble friend Lord Sassoon”; I feel he is that—was talking about. He described this LIBOR scandal as a global one, affecting some $300 trillion. It affected all that, but nobody in the Bank of England or the FSA or anybody else knew the slightest thing that was going on in the LIBOR scandal. Therefore, I would like to finish by asking the noble Lord, Lord Sassoon, a question.
Lord Barnett
I understand that I must not do that, so I will mention the question that I would have asked him. There are going to be investigations into the LIBOR scandal. Will they include looking in detail at whether there is anybody else liable or culpable in this regard? It clearly is a scandal of its own to say that nobody knew anything about it. I will leave it at that. I hope that the Government will produce sensible secondary legislation in the way we hope when we pass this Bill.
Lord Peston
My Lords, I will make a brief personal remark to the noble Lord, Lord Sassoon, who I believe is about to retire as a Minister after the passage of the Bill. My words are those that David Ricardo wrote to Thomas Malthus in the very last letter he wrote to him:
“And now, my dear Malthus, I have done. Like other disputants, after much discussion we each retain our own opinions. These discussions, however, never influence our friendship; I should not like you more than I do if you agreed in opinion with me”.
I hope that he will accept that message.
Lord Newby
(a) a decision falling within any of paragraphs (a) to (c) of subsection (1) is taken—(i) by a person not directly involved in establishing the evidence on which the decision is based, or(ii) by 2 or more persons who include a person not directly involved in establishing that evidence,(b) a decision falling within paragraph (d) of subsection (1) is taken— (i) by a person other than the person by whom the decision was first proposed, or(ii) by 2 or more persons not including the person by whom the decision was first proposed, and(c) a decision falling within paragraph (d) of subsection (1) is taken in accordance with a procedure which is, as far as possible, the same as that applicable to a decision which gives rise to an obligation to give a warning notice and which falls within paragraph (b) or (c) of subsection (1).””
Lord Newby
Lord Newby
Lord Newby
Autumn Statement
(11 years, 5 months ago)
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The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, your Lordships still have me here for a little longer; I am not retiring yet. I refer the House to the Autumn Statement made earlier in another place by my right honourable friend the Chancellor of the Exchequer, copies of which have been made available in the Printed Paper Office and the text of which will be printed in full in the Official Report. I commend my right honourable friend’s Statement to this House.
Lord Eatwell
My Lords, I thank the noble Lord, Lord Sassoon, for formally introducing the Statement. In a way, it is a pity that our new convention does not involve repetition of the Statement for there is no doubt that the Chancellor is to be congratulated on the positive morsels that he managed to identify in a very frugal, even miserly, meal.
Three central facts are revealed in this Autumn Statement and the accompanying OBR report. First, the OBR assesses growth this year to be at minus 0.1%. It had expected plus 0.8%, so it is a reduction of about one percentage point. For next year, 2013, it has downgraded its growth forecast from 2% to 1.2%. I fear that next March the ever overly optimistic OBR will be downgrading its forecast once again. Therefore, the growth outlook is rather bleak.
I wish to refer for a moment to paragraph 1.14 of the Autumn Statement, dealing with the sectoral composition of growth in the UK economy. It argues that, if we leave out the financial sector and the North Sea oil and gas sector, the rest of the economy has done comparatively rather well. That is rather like saying that, if we leave out the bowlers, the batting average of the team tends to go up. This is a disreputable piece of analysis and I hope that we will never see its like again.
The second fact revealed in the Autumn Statement is that, compared with the forecast made just last March, the deficit is up in every year of the forecast. Noble Lords may be rather surprised by that assertion because, if they listened to the Chancellor’s Statement, they will know that he seemed to claim the opposite. How can I claim that the deficit is up? I can quote the OBR, which says that,
“policy decisions by the Government and reclassifications have reduced [public sector net borrowing] this year by £16 billion, more than offsetting forecast changes which overall have pushed borrowing up £4 billion”.
I repeat: policy decisions and reclassifications—in other words, fiddling the figures.
What does this fiddle consist of? The main component in padding the numbers is the asset purchase facility transfer of £11.5 billion from the Bank of England to the Treasury. In principle, this seems okay—after all, we are told that the Japanese and the Americans do it too—but what is striking is that no allowance has been made for the requirement expressed in the letter from the governor agreeing to this transfer that, if and when interest differentials change, the Treasury must pay the money back. Will the noble Lord tell us what contingency has been made by the Treasury for transfers back to the Bank in the next five years and what impact this contingency might have on the deficit?
The third fact that is clear in this Autumn Statement is that the end of austerity has been postponed for another year. The noble Lord, Lord Sassoon, has referred us before to his belief that the deficit programme is a five-year rolling programme. So every year the end of austerity is always five years ahead. Like middle age, it retreats before you. Now it has been extended from 2017 to 2018. Under this rolling programme which always extends, austerity will always be with us and it is clear why. We are travelling in the wrong direction, away from growth and away from debt reduction. Surely now is the time to ask why. Why are the British people being subjected to this unending economic misery that is not only cutting living standards now, but as the OBR points out, will cut living standards in the future as productive potential is undermined by low investment and the corrosive impact of unemployment?
In the realms of economic policy there are two entirely different approaches to cutting public indebtedness. The Government’s approach is based on the belief that eliminating the deficit is necessary to produce growth: austerity is the necessary precursor to recovery. Noble Lords will remember that there was even a new expression coined for this approach, “expansionary fiscal consolidation”—a term that seems to have been dropped from government usage in the past year or so. The idea was that cutting the deficit, aligned with a supportive monetary policy—that is, low interest rates—would restore business and consumer confidence, stimulate spending and set the economy on the road to recovery. For the past two and a half years, the UK economy has been the guinea pig on which this theory has been tested. The result: interest rates in a no-growth economy are predictably roughly zero in real terms, but ever looser monetary policy is producing ever less discernible results. Indeed, there is now no discernible result.
Has business confidence returned? The OBR says:
“Lack of confidence regarding the outlook for global and domestic demand is leading firms to postpone investment decisions”.
Has household confidence returned? The OBR states:
“Our forecast for real household disposable income growth is weaker than in March”
It adds that this,
“is expected to constrain household spending”.
So if households are not spending and businesses have no confidence and are not spending, where is the recovery to come from? Net trade has a negative impact on the economy as markets overseas stagnate and the Government are cutting net spending, so making things yet worse. The experiment has failed and the British people are paying the price of the failure. The plans to spend something on infrastructure are welcome after the savage cuts of the past two years, but notice that government investment was down 20% last year and another 9% cut is forecast for this year. The infrastructure plans are a drop in the ocean. Even their impact on demand is offset by the fact that they are to be funded by cuts elsewhere.
On top of all this, the Funding for Lending scheme is not working and the Work Programme is not working. No wonder that in summing up the whole impact on growth of the policy measures in this Autumn Statement, the OBR says they have,
“a limited impact on our economic forecast”.
All the Chancellor’s rhetoric about growth signifies nothing. The Chancellor indicated in the Statement that he intends to make significant cuts in benefits for those out of work, on top of cuts to welfare expenditure announced earlier this year in the Budget. Unfortunately the data supplied in the Autumn Statement do not include the analysis of the distributional impact of policy measures as do Budget documents. Could the noble Lord tell us what is the net impact of the measures announced today on the lowest decile of income recipients?
The most extraordinary aspect of this Autumn Statement is that the Chancellor has implicitly recognised that his policy has failed but is continuing with it none the less. If the policy was working, if expansionary fiscal consolidation had a shred of credibility left, instead of extending austerity to 2018 he would be doing more of it now—let us get on with it, get it done and put us on the road to recovery—but he has lost the courage of his convictions and not found the courage to admit the failure of his policy. There is another way, another approach to cutting the deficit, and that is by stimulating growth that cuts the deficit, not cutting the deficit and hoping that growth appears.
However, growth depends on confidence in growing demand. It requires a substantial infrastructure programme; investment in education and research; substantial reform of the banking industry to deal with the difficulties identified the other day by the governor; and a British investment bank to lead the way in funding the investment that demand would stimulate.
The dreadful growth figures and the slowness of the recovery comprise the worst economic performance of our economy in attempting to come out of recession for more than 100 years. We cannot go on like this. The Government must recognise that their core policy has failed and have the courage to face that fact.
Lord Sassoon
My Lords, as my right honourable friend the Chancellor of the Exchequer said earlier in another place, the British economy is healing. We are on the right track and turning back now would be a disaster. The deficit has already been cut by a quarter and is forecast to continue falling every year of the Parliament. I find it extraordinary that the noble Lord, Lord Eatwell, questions the OBR’s explanation of this by saying that policy decisions are in some way fiddling the books. It is precisely because of the policy decisions that we took in the Budget and are taking again today that that deficit reduction continues to be on track at the same pace.
Since this Government took office, more than 1 million private sector jobs have been created and exports to emerging markets have doubled. In a tough global economic climate we are making progress. The noble Lord, Lord Eatwell, referred to the growth forecast. The OBR’s growth forecast for the UK next year is that the economy will grow faster than, for example, that of France or Germany.
Let me remind your Lordships of a few examples of how the Government are protecting the economy, supporting growth and ensuring fairness, and of the measures that have been welcomed today. The Government have confirmed an extra £5.5 billion of additional infrastructure investment and support for businesses. That is in addition to the similar £5 billion switch from current to capital expenditure last year. The noble Lord may talk about drops in the ocean but the position now is that public and private infrastructure investment in this country is running at £33 billion a year. Under the previous Government, total average annual infrastructure spending was £29 billion. It is very important that we invest in the future of our infrastructure.
There will be a further 1% cut in the main rate of corporation tax from April 2014 to 21%, bringing it down to its lowest level—far lower than that of our most direct competitors and one of the lowest in the G20—and from this coming April the personal allowance will rise by a further £235 on top of the rise previously announced, making it the highest cash increase ever.
I shall now answer one or two of the other points made by the noble Lord, Lord Eatwell, on quantitative easing. First, the numbers are set out scrupulously transparently to show the effects before and after the transfer of cash on the income side from the APF to the Treasury. The numbers are completely clear. On his question about the contingency, the contingent liability on QE has been set out, and will continue to be set out in the notes to the whole of the Government’s accounts, as it should be. The OBR, in its document, points out, the effect of QE on its central case when it unwinds as being a significant reduction in debt.
Finally, the noble Lord, Lord Eatwell, asks about the distributional effects of all of this. This is an important question, because he asks about transparency and the way we disclose the numbers. The previous Government never set out the distributional effects of their Budgets or Autumn Statements in their pre-Budget reports. We have published today on the Treasury website an 18-page document that goes further than even this Government have gone before in their distributional analysis, with several new tables that I warmly commend to the noble Lord, Lord Eatwell. These confirm, as at every stage in this Government’s deficit reduction plan, that those with the broadest shoulders bear the largest brunt. That is there in the document “Impact on households”.
So, as my right honourable friend the Chancellor of the Exchequer said, the deficit is down, borrowing is down and jobs are being created. It is a hard road, but we are making progress and, in everything we do, we are helping those who want to work hard and get on.
Baroness Garden of Frognal
My Lords, perhaps I may remind noble Lords that Statements are a time for brief comments and questions. The briefer the questions the greater the number of noble Lords who will be able to contribute, so I urge everybody to be considerate.
Baroness Kramer
My Lords, this may be my only opportunity to pay tribute to My noble Friend Lord Sassoon before he steps down from the Front Bench, so let me do so. As any Minister, he will have expected fire from across the Chamber, but he has also had fire from over his right shoulder on occasion, and he has dealt with it extremely graciously. For many of us, the test of a Minister is how he and his team deal with Back-Benchers. Based on that test, he has been a superb Minister and we will miss him.
The Statement that the Chancellor presented to us today meets the test of being both tough and fair. It is remarkable that, despite the economic conditions that we face, the deficit is still reducing, which will have surprised many of the pundits but I am sure will have pleased this entire House.
As a Liberal Democrat I am most pleased about the decision by the Government to lift the threshold of the starting rate of tax one more time to £9,440. It was utterly unexpected. When this Government came in, that threshold was £6,475. To its credit, the coalition committed to raising it to £10,000. We are only half way through a Parliament, but it is at this point only £560 below its target. The impact is something like £600 more in the pocket of ordinary working people and more than 2 million people taken out of income tax altogether. In this time of economic stress, that is a phenomenal achievement. The Government should be congratulated.
I was pleased that the welfare cuts were well below those that were anticipated; I can see I am being asked to move to a question very quickly, so I will ask one in this way. Growth, as we all know, is now the holy grail that we attempt to achieve for this economy. Does the Minister agree that it now utterly depends on access to credit for the businesses that make up our economy? Will he commit to making sure, when he talks to his Treasury team, that the restructuring of the banks allows a new competitive environment with new entrants and new players that can deliver the kind of credit we need to the small businesses that are the backbone of our economy?
Lord Sassoon
My Lords, I am very grateful to my noble friend for her generous remarks and for her support since she has been her party’s spokesperson on the economy. The two parties are joined at the hip when it comes to the key economic work and all the other work of the Government. Importantly, she reminds us of a critical part of the Autumn Statement: raising the tax threshold to the benefit of 25 million people. That is very important.
On credit and access to credit, I draw the attention of the House and my noble friend to the comments of the OBR today. Its judgment is that the funding for lending scheme will lower rates for credit but increase availability. I very much share my noble friend’s concern to see a more competitive banking landscape emerge. In that context, it is interesting to note that the funding for lending facility is being taken up and having a disproportionate effect on some of the new challenger banks. I hope that that continues and that they continue to be able to increase their lending responsibly off the back of that scheme.
Lord Myners
My Lords, perhaps I may add my personal congratulations to the Minister. He has always brought great skill, tact, humour and optimism to his role on the Front Bench. It is a shame that that optimism has not seen the prize delivered because today’s economic Statement is a lamentable one. Against the two principal, navigating stars that the Chancellor of the Exchequer set—the fiscal mandate and a supplementary objective—he has missed, and missed by a country mile. On the first, he has been required to push austerity even further into the next Parliament and, on the second one, he makes only a modest reduction in debt as a percentage of GDP in the year 2017-18, but it is still 3% higher than in the current year. The policy of austerity-led expansion is clearly not working. An extra 1% of GDP growth during the lifetime of this Parliament would have reduced by five percentage points the proportion of debt to GDP. Growth is the key to reducing the deficit.
There are things in the Chancellor’s Statement that I find very commendable, particularly the extension of the dual carriageway of the A30 in my beloved Cornwall. Whether the right honourable Michael Gove will appreciate the use of the word “dualling” as a verb in the Chancellor’s Statement is questionable and I wonder whether Mr Gove would appreciate the arithmetic error in the Chancellor’s Statement on the increase in the inheritance tax nil band.
The Chancellor makes some very good points about attacking tax havens. So my question relates to suggesting to the Minister that, when we chair the G8, we should seriously consider saying that no G8 bank can operate in an offshore centre with a subsidiary or a branch. If, in the future, the banks of the Channel Islands—Guernsey and Jersey—were domestic banks rather than branches of subsidiaries of the world’s leading banks, most of the attraction of using despicable offshore tax havens would fall away.
Lord Sassoon
My Lords, that seemed to be a speech rather than a question. However, I am grateful for some of what the noble Lord, Lord Myners, had to say and I shall miss sparring with him. I remain an optimist. In less than three years since the previous election, the private sector in this country has created 1.8 million new jobs, which is twice what the OBR projected, and the OBR’s projection today for the period up to 2018 is that 2.4 million further new private sector jobs will be created at a time when it estimates that public sector employment will be reduced by 1.1 million. Times are difficult, but I remain optimistic about the underlying strength and vibrancy of the private sector in this economy.
As to the observations of the noble Lord, Lord Myners, about offshore centres, some of the issues that he raises are certainly on the agenda, but it is inappropriate to talk about offshore centres and others. The key thing is to make sure that the so-called offshore centres are brought up to the standards of the best. Some of them have made huge strides; others need to. I take his points.
Lord Forsyth of Drumlean
My Lords, does my noble friend not think it remarkable that the Official Opposition have no proposals for reducing the deficit by cutting public expenditure, and that there does not appear to be a scintilla of humility for the fact that they were running a deficit of some £70 billion at the height of the boom times? It was their irresponsible conduct over the economy that has got us into this mess. Should the Chancellor not be congratulated on not being more outraged at the response that he has had from the Opposition, in which former spokesmen are reduced to criticising the grammar of the Statement rather than its content? The truth is that they have nothing to offer the country to get us out of the mess that they created.
Lord Sassoon
My Lords, I am very grateful to my noble friend and agree with every word that he uttered.
Lord Empey
My Lords, I thank the Minister for his personal courtesies to me since I have been a Member of your Lordships’ House.
I welcome the increased allowances for small businesses and the reductions in corporation tax. Will the further reductions in corporation tax dissuade the Minister’s right honourable friend the Prime Minister from considering devolving corporation tax-setting powers to the Northern Ireland Assembly? Secondly, will he consider once more a reduction of VAT to encourage the retrofitting of buildings so that they can not only be improved from an energy-efficiency point of view but benefit from a tax holiday on VAT for a small period of time, which would have limited dead-weight potential but would stimulate the construction sector? Will he give further consideration to those two points?
Lord Sassoon
My Lords, the question of corporation tax in Northern Ireland continues to be considered. The key thing is that we are making the United Kingdom as a whole a more competitive place and in corporate tax terms the most competitive place to do business among our major competitors. Of course, the position in Northern Ireland will continue to be debated.
As far as the reduction in VAT is concerned, this is a case that is made regularly. We believe that what we have announced today—the two-year increase in the investment allowance—is a better way of targeting the limited resources that we have, in addition to what we have done on the basic rate of corporation tax.
Baroness Wheatcroft
My Lords, I add my congratulations to my noble friend on what he has achieved in his time in the House. I wish him well in whatever he chooses to do next. I agree that it is depressing that he has to leave us on the back of a Statement that shows the growth forecast having to be lowered.
It is worth noting that in the Blue Book the GDP fall in 2008-09 has been revisited and has come down by a massive 6.3%. Given that background, it is hardly surprising that the efforts to rebuild the economy are proving difficult. Nevertheless, in this Statement there are several things that will make a major contribution to improving the economy, and I congratulate my right honourable friend the Chancellor on the things he is doing to encourage investment and infrastructure investment.
Does my noble friend share my concerns and those that were voiced recently by Sir Mervyn King, the current Governor of the Bank of England, that one thing that is going to hold back growth in the economy is if the banks do not acknowledge the real state of their balance sheets and take the hits that they should?
Lord Sassoon
Again, I am grateful to my noble friend for her kind words. It is also important that the House recognises that the damage done by the fall in GDP as a consequence of the structural position and the mess left behind by the previous Government, combined with the financial crisis, continues to be assessed as worse and worse. As my noble friend said, it is now estimated to be a fall in GDP of an extraordinary 6.3%.
I also agree with my noble friend that it is important that the banks are realistic about the state of their balance sheets. Linking back to the debate on the Financial Services Bill that we had earlier this afternoon, it is important that the new Financial Policy Committee—up and running now for a period in shadow form—is beginning to get to grips with these issues. These sorts of things were never debated and put on the table by the authorities in the past, when the punchbowl should have been taken away. So my noble friend is completely right.
Lord Wigley
My Lords, I also wish the Minister well for the future and add my concern to that expressed already about whether this mini-Budget will trigger the necessary growth. Specifically, with regard to the commitment in the Autumn Statement of £5.5 billion in additional infrastructure investment and the consequential £227 million additional capital funding available to the Welsh Government, will he confirm that that spending can be allocated as desired by the Welsh Government and does not need to follow the pattern of the £5.5 billion that has generated it? Will he also confirm that in the discussions that have taken place between the Treasury and the Welsh Government over recent weeks with regard to the enhanced capital allowance in enterprise zones, that is not assumed to be coming out of that money?
Lord Sassoon
I believe that I can confirm both points. The allocation will be for the Welsh Administration in the normal way. I believe that the noble Lord’s understanding on the second point is correct. If it is not, I will correct that understanding.
Lord Flight
My Lords, I add my own appreciation of the Minister’s work and success. He has always shown patience, attention to detail, wit and great courtesy and I, too, wish him success and fulfilment in whatever he does next.
The national plan has identified £200 billion of infrastructure investment in transport and communications and about another £200 billion for the energy sector. The financing of that is fairly readily available. For the sovereign wealth funds of the world, it is an attractive investment. I was amazed to find that even the Agricultural Bank of China is setting up in London and is dead keen to put up loan finance. Indeed, it is putting up the loan finance for the improvements to the main road between Edinburgh and Glasgow.
There are also pension funds—who wants to buy gilts at present yields when you might get 4%, 5% or 6% on an infrastructure project? The funding is there, but when I asked the Financial Secretary to the Treasury how much was likely to happen over the next three years, he could not give an answer. There are still delays caused by the way that the planning system works and because of environmental requirements. Now is just the time when this country needs to make those infrastructure investments and get a move on with them. Will the Government look at further measures that they can take to delay these bureaucratic constraints on the infrastructure investment getting going?
Lord Sassoon
I could spend the rest of the three minutes and a lot longer on this but I will be brief. Again, I am grateful to my noble friend for his remarks.
On how the infrastructure is funded, there is still a need for a large debt component in many of the projects, and the debt markets continue to be very difficult. My noble friend is completely right about the appetite of the sovereign wealth funds and I will be going to the Gulf again to visit a number of them next week. But the debt component remains difficult.
As to whether the investment is flowing through, total private and public investment in infrastructure is now running at £33 billion per year compared to an average of £29 billion per year under the previous Government—even with all the investment in social infrastructure that went on. While there is more to be done, that is an important number.
There are other areas, yes, where we need to make more progress. I draw my noble friend’s attention to the policy decisions on energy over the last week, which should now enable the energy markets and investors to invest in a broad sweep of nuclear, renewable and gas assets.
Lord Hollick
My Lords, I add my congratulations to the Minister. Optimistic he may be, but what remarkable chutzpah he and the Chancellor have shown on a day when they have missed all their key targets.
I wonder if he could help me with just a couple of points in the blizzard of information that we have had today. Is there any increasing demand as a result of the measures announced? As the Minister knows, demand is absolutely essential if we are to have growth and it would appear that the OBR has taken into account all the measures but has still downgraded significantly the growth over the next five years.
Secondly, in Annex B.1 of the Treasury document, the suggestion is that the bottom three deciles of the population will bear about three-quarters of the burden of the fiscal consolidation. In 2015-16, 96% of the reduction will be borne by cuts in welfare and public spending; only 4% will come from tax increases. That is rather different from the 80:20 the Chancellor talked about.
Finally, on the question of interesting accounting, the Autumn Statement includes receipt in the current financial year of £3.5 billion from the auction of the 4G spectrum, which is yet to take place. This receipt is apparently used in the current year to reduce the debt, but appears then to be used in the following financial year to finance spending plans. How can that be?
Lord Sassoon
My Lords, first, the test of increase in demand will ultimately be the growth numbers. The OBR has set out its forecast of growth numbers and—I can only repeat—it is forecasting higher growth next year for the UK compared to countries such as France and Germany.
On the question of the distribution, I draw the attention of the noble Lord, Lord Hollick, to the new chart on the overall level of benefit and public spending receipts in the supplementary document, which shows that, contrary to what the noble Lord is saying, the overall result is significantly progressive across the quintiles.
The deficit reduction plan will continue to be on a 80:20 basis; in other words, with 80% of the deficit consolidation coming from spending reductions and only 20% from tax—just as it was before today. That has not changed. As far as the spectrum auction is concerned, the £3.5 billion has been certified by the OBR as its central estimate of the money that will be coming in this tax year.
Police and Criminal Evidence Act 1984 (Armed Forces) (Amendment) Order 2012
(11 years, 5 months ago)
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Lord Scott of Foscote
That this House regrets that the Police and Criminal Evidence Act 1984 (Armed Forces) (Amendment) Order 2012 (SI 2012/2505) fails to comply with the judgment given on 4 December 2008 in S and Marper v United Kingdom and further regrets that the failure of the Secretary of State to exercise the power under Section 120(1) of the Protection of Freedoms Act 2012 to bring into force Chapter 1 of Part 1 of that Act perpetuates the likelihood of breaches of human rights under Article 8 of the European Convention on Human Rights.
Lord Scott of Foscote
My Lords, the Motion of Regret that stands against my name on the Order Paper is prompted by the hope that it will induce the Government to bring into effect Sections 1 to 25—that is, Chapter 1 of Part 1—of the Protection of Freedoms Act 2012. That Act received Royal Assent in May this year but there is no indication of a firm date for bringing Sections 1 to 25—the relevant sections—into effect.
The background to the importance of those sections is that they correct the present statutory powers of the police to retain on their database, potentially indefinitely, fingerprints and DNA material taken from individuals suspected of a relatively serious crime, notwithstanding that those individuals may never have been convicted, may have been acquitted, may not have been prosecuted or tried, for whatever reason, or in some cases may not even have been charged. However, if they were suspected of a crime, the police had the power to take this highly personal material from them—fingerprints and DNA samples, leading to a DNA profile—and to retain it on the database that they maintain to assist them in prosecuting and investigating crime.
Nobody doubts the huge value to the police of an extensive database of the sort that I have mentioned being compiled and kept. Yet the individuals who have never been convicted, and can therefore hold themselves out as being innocent of the crimes of which they were at one time suspected, naturally object to the retention of their details on the police file. The right of the police to do this is at the moment to be found in Section 64(1A) of the Police and Criminal Evidence Act 1984, which says in terms that the police may take and retain the fingerprints and DNA material of persons suspected of relatively serious offences. Individuals have objected to that and two cases have gone to the highest courts in the land.
The first of these two cases, S and Marper, went to the Appellate Committee of the House of Lords, as it then was. I do not have to declare an interest because I was not a member of the Appellate Committee that sat on that case. The Law Lords who did decided unanimously that the retention of the material of the two individuals, one of whom had been acquitted and the other never prosecuted at trial, was justified by the 1984 Act, as amended, because they had been suspected. The individuals took their complaint about this retention of those highly personal data about themselves to Strasbourg, saying that it was a breach of their right to respect for their private lives under Article 8 of the convention. The Strasbourg court agreed with them, disagreeing with the Law Lords.
The Strasbourg court held that the retention of this material, in circumstances where the individuals had never been convicted, was an interference with their right to respect for their private lives, and that something should be done about it. The court did not give them any remedy other than to find in their favour on that issue, and to indicate that within a reasonable time the United Kingdom should amend its law so as to avoid the possible repetition of similar breaches. That Strasbourg judgment was given in December 2008, which was of course in the time when the Labour Party formed the Government of the country. The Labour Party set about formulating revised guidelines for the exercise of the discretion in the 1984 Act’s provision. Those formulated guidelines were embodied in the Crime and Security Act 2010. However, the relevant provisions in that Act were never brought into effect because they were overtaken by the general election and the emergence of the coalition Government.
In the Queen’s Speech of 2010—I think it was in May—the coalition Government announced that they would look again at the guidelines in question and would formulate their own revised guidelines, which would be incorporated into their proposed Protection of Freedoms Bill. That was done and the guidelines, which are in Sections 1 to 25 of what became the Protection of Freedoms Act, were subject to being brought into effect by a statutory instrument to be made by the Secretary of State. Notwithstanding that Sections 1 to 25 contained elaborate and complex details governing the permitted use of material relating to people who had never been convicted, the guidelines were not brought into effect and no firm date for the making of the statutory instrument has, until very recently, been announced.
Lord Goodlad
My Lords, very briefly, I share the concerns of the noble and learned Lord, Lord Scott, about the order, which was commented on by the Select Committee on secondary legislation. This area of the law was thoroughly looked into some years ago by your Lordships’ Constitution Committee. The recommendations of the committee, contained in the second report of the 2008-09 Session entitled Surveillance: Citizens and the State, were broadly welcomed. Since that report Parliament has passed the Crime and Security Act 2010 and the Protection of Freedoms Act 2012. The provisions of the latter, dealing with the retention of DNA, have not yet been brought into effect, as the noble and learned Lord pointed out. However, the intentions of the Government and of Parliament have been made clear beyond peradventure.
It seems strange, therefore, that the Government have brought forward an order which has the effect of lengthening the period during which DNA may be retained by the police service, in circumstances which will no longer be lawful when orders under Part 1 of the Protection of Freedoms Act have been passed by Parliament. I hope, therefore, that the Minister will be able to give the House the assurances so precisely defined and advocated by the noble and learned Lord, Lord Scott.
Lord Palmer of Childs Hill
My Lords, I welcome the thrust of the Motion of Regret from the noble and learned Lord, Lord Scott. It comes from someone who contributed five times during what became the Protection of Freedoms Act, so it is not a flash in the pan. I also look forward to the Minister’s detailed reply for the Government. I should like to make a point that to some extent has already been made: the point of substance in the noble and learned Lord’s Motion is to respect the rights of the citizen when considering DNA or fingerprint records, and I emphasise that.
Prior to the Minister’s comment, which the noble and learned Lord apparently welcomes, I would like to say that the Government have taken a big step forward in enacting the Protection of Freedoms Act 2012, which sets in place a system of deletion and destruction consistent with the Marper judgment, which has been referred to, and human rights obligations. It is clear to anyone who looks at how DNA records are apparently kept, though, that absolute care must be taken when dealing with the material. It is both highly personal to the individual from whom it is taken and an important tool in the detection of crime.
Time is needed, of course, to put in place the policies and procedures to give accurate effect to the legislation passed by Parliament. The DNA evidence from those who have been responsible for crimes and those who have not needs to be sorted, and I gather that that evidence is voluminous and there is a time element. I am happy, and I hope that the noble and learned Lord will be too, that the Government will, we hope, indicate that they will have the long-term position resolved by mid-2013, as I understand it—perhaps even sooner; that the updated Armed Forces policing regulations will follow; and that both will be delivered according to the timetable. I welcome the clarification that this Motion will, I hope, produce.
Lord Rosser
My Lords, unlike the noble and learned Lord, Lord Scott of Foscote, I do not have the advantage of knowing what the Minister is going to say in reply. Indeed, I did not even expect that the noble Lord, Lord Taylor of Holbeach, would be the Minister replying; I was under the impression that this was a defence issue.
The order that we are covering came into force on 30 October this year, just one month ago. It amends the Police and Criminal Evidence Act 1984 (Armed Forces) Order 2009 by providing that biometric data taken from someone being investigated for a service offence by service police can be retained for up to four years but no longer, unless within that period the person is convicted of the service offence. The Protection of Freedoms Act 2012 amended the Police and Criminal Evidence Act 1984 and introduced different rules and requirements for the retention of biometric data taken from arrested people. However, the Armed Forces are not covered by the Protection of Freedoms Act.
PACE also only applied to criminal investigations being conducted by the civilian police. However, under Section 113 of the 1984 Act the Secretary of State can by order apply certain provisions of the 1984 Act to investigations conducted by the service police. This was done in relation to the taking and retention of biometric data by way of the Police and Criminal Evidence Act 1984 (Armed Forces) Order 2009, which has since been amended by the Police and Criminal Evidence Act 1984 (Armed Forces) (Amendment) Order 2011, and again by the 2012 order, which we are discussing now.
The 2011 order amended the 2009 order by increasing from two years to three the time limits that apply under that order to the retention of fingerprints, samples and impressions of footwear, and the 2012 order amends the 2009 order to allow material taken on or after 31 October 2009 to be retained for up to four years from the date on which it was taken, unless during that period the person is convicted. For material taken before 31 October 2009, the four-year period runs from that date.
It seems that the Government regard this 2012 order as a holding measure, as the intention apparently is to introduce a new order once the relevant provisions of the Protection of Freedoms Act 2012 have been brought into effect, and that that new order will broadly replicate for service personnel the 2012 Act’s provisions on retention of biometric data for civilians.
As the report from the Secondary Legislation Scrutiny Committee sets out, the changes that have been made and are still to be made to the Police and Criminal Evidence Act 1984 arose from a ruling in 2008 by the European Court of Human Rights that the relevant provisions in Part 5 of PACE were in breach of Article 8 of the European Convention on Human Rights. Those provisions in Part 5 allowed for the indefinite retention of fingerprints and DNA samples when there had been no conviction. As a result, Part 5 of the 1984 Act was amended by the provisions in Chapter 1 of Part 1 of the Protection of Freedoms Act 2012. However, those provisions in the 2012 Act are not expected to be commenced before mid-2013.
The purpose of the 2009 order, and subsequent amending orders in 2011 and now 2012, was, we are told by the Ministry of Defence, to make interim provision that would be compliant with the European Court of Human Rights ruling and allow the service police to retain material until Part 5 of PACE was amended. The Secondary Legislation Scrutiny Committee has commented that the practical effect of continuing to bring forward these orders, extending the period for which data can be held, is potentially to enable the material to be retained indefinitely. The order that we are now discussing means that the interim provisions will be in place for at least five years after the European court gave its judgment, and even longer if there is further delay in commencing the relevant provisions of the 2012 Act. The committee has also questioned whether successive statutory instruments with the practical effect of potentially allowing the indefinite retention of material taken by service police can be considered compliant with the European court’s judgment.
These are all points which deserve a considered response from the Minister. When he replies, perhaps he could also say why the relevant provisions of the Protection of Freedoms Act 2012 are not coming into force until at least the middle of next year. In Committee on the Protection of Freedoms Bill, the then Home Office Minister rejected our amendments providing for the retention of DNA and fingerprint profiles for six years, a longer period than that proposed by the Government and now incorporated in the terms of the Protection of Freedoms Act. We were told that there was a need for balance between public protection and individual freedoms, and that the Government considered that they had got the balance right and we had got it wrong. One would have thought that after that the Government would have made every effort to bring into effect the relevant provisions of the Protection of Freedoms Act as soon as possible, not to find themselves in a position where they are putting forward an order that specifically provides for the retention of biometric data for a longer time than the Government said struck the appropriate balance and rather nearer the time in years that we were arguing was appropriate.
Why was it not felt right to make provision within the Protection of Freedoms Act 2012 for matters relating to the investigation of service offences, at least in relation to the taking and retention of biometric data if not to other areas, to be brought within the terms of Part 5 of the Police and Criminal Evidence Act 1984? Presumably, the situation at the moment is that if a member of the Armed Forces is being investigated by the civilian police, the provisions of the 1984 Act apply to the investigation directly, but that if that same member of the Armed Forces is being investigated by the service police then the 2009 order—as amended by the 2011 and 2012 orders—applies. Is there any reason why it is essential that this distinction continues to apply in all instances?
We understand the reasons why the noble and learned Lord, Lord Scott of Foscote, has drawn this order to the attention of the House. Whether or not one believes that the Government’s decision on what specific action to take to meet the ruling of the European Court of Human Rights was appropriately balanced, it is still relevant to ask why it will be at least just over three years after taking office, and five years after the ruling, before the Government implement their decision on how to comply with a judgment with which they are not in disagreement.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, I thank all noble Lords who have spoken. It is not often that a Minister thanks a Member of this House for drawing the House’s attention to a statutory instrument by means of a Motion of Regret, but I do indeed thank the noble and learned Lord, Lord Scott of Foscote, for bringing this matter to the attention of the House. It gives me an opportunity to update the House on this important issue.
I am sure that the noble Lord, Lord Rosser, will know that I would not intend any discourtesy. I understood that the usual channels were informing the Opposition that I would take this Motion, as I am the Home Office Minister responsible for DNA.
Lord Rosser
I assure the Minister that I do not regard it as a discourtesy. I had not picked it up—perhaps I did not listen as hard as I should have—but I am very pleased to see the noble Lord at the Dispatch Box.
Lord Taylor of Holbeach
I thank the noble Lord.
Perhaps I may begin by saying that the Government are deeply committed to protecting the privacy and human rights of its citizens. At the same time, they are committed to maintaining an effective and powerful database that protects the public and reduces crime. To this end, as noble Lords have pointed out, they introduced the Protection of Freedoms Act to ensure that innocent people’s DNA and fingerprints are no longer held on databases.
As my noble friend Lord Palmer of Childs Hill pointed out, this is a complex matter, and so to get it right involves quite a lot of technical application and detail. I have been much engaged, in my short time in the Home Office, in trying to make sure that this is all in place. I am pleased to be able to say that the preparatory work required before implementing the Act is substantially complete. I have now received advice on the timelines of the implementation of the Act, and will announce the full details of this to the House within the next few days by way of a Written Ministerial Statement. However, it may help the House if I give some indication of the detail involved.
We anticipate that the elimination of the estimated 6 million DNA samples covered by the provisions of the Protection of Freedoms Act will begin this month, and will be completed by the end of May 2013. All other material covered by these provisions will be destroyed by the end of September 2013. As I say, I will be able to give fuller details of schedules to noble Lords in a Written Ministerial Statement which I expect will be made in the next few days.
There has been some confusion because this interim statutory instrument, laid by my noble friend and tabled through the Ministry of Defence, appears to contradict the thrust of government policy by extending the period of DNA retention. However, this is an interim measure, and I hope to be able to reassure my noble friend Lord Goodlad, whose work in scrutinising this legislation has perhaps prompted the noble and learned Lord, Lord Scott, to bring this Motion to the House. I hope to be able to assure him that a further statutory instrument in consequence of the commencement of these provisions will be tabled by the Ministry of Defence to bring its police powers in line with civil police powers.
I hope that noble Lords can see that this particular debate occurs at a critical point in the process. Over the next few months we will see the Government’s commitment translated into action by the destruction of this material, which is held on innocent people and should not be in the hands of government. With that, I hope that the noble and learned Lord will be able to withdraw his Motion.
Lord Scott of Foscote
My Lords, I am grateful to the Minister, to the noble Lord, Lord Rosser, and to noble Lords who have spoken on this Motion.
One matter that I should have mentioned, and forgot to mention when I addressed the House a few moments ago, was that following the decision of the Strasbourg court in 2008, the then Labour Administration reacted, as a preliminary, by ordering the destruction of all data held relating to children under 10. That reaction was immediate, and the White Paper was produced shortly after that, indicating the reformulation of the guidelines to the use of the power contained in the 1984 Act, as amended.
In view of the statement made by the Minister, the purpose of my Motion has—as far as I am concerned—been achieved, and so I ask the leave of the House to withdraw it.
EUC Report: EU Freshwater Policy
(11 years, 5 months ago)
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Lord Carter of Coles
That this House takes note of the Report of the European Union Committee on An Indispensable Resource: EU Freshwater Policy (33rd Report, Session 2010–12, HL Paper 296).
Lord Carter of Coles
My Lords, some have suggested that our report into water policy had the powers of a rain dance, for no sooner had we concluded the inquiry in April, which highlighted water shortage, than the heavens opened and we had one of the wettest summers on record. Even as we come to debate our report, much of the country seems to be under water. Yet, although ground-water levels in the UK have been topped up, we must not be complacent, as long-term trends that we face are very clear, and we face some difficult choices going forward.
The European Environment Agency observed that the number of countries affected by drought per decade rose from 13 in the period 1971 to 1980 to 24 in the period 2001 to 2011. The analysis showed that the drought occurrence not only increased in the central and southern areas of the EU but, significantly, also in the northern and eastern parts of the EU, in countries such as the UK and Sweden. The reasons for this are clear: intensification of agriculture; urbanisation; climate change; and, of course, a rising population.
Looking forward to 2050, we can expect a world population of some 9 billion, and so we will need to provide 70% more food and 80% more primary energy, and, of course, a significantly greater amount of water. Given that the supply of water is finite, this is a critical, if not urgent, matter, and we need to understand what our water policy should be in order to mitigate future crises. That is not easy. There is a great deal of uncertainty, particularly relating to climate change. However, one of our witnesses, Professor Alan Jenkins, put it very well. He said:
“Uncertainty is no reason for not doing anything”.
In 2010 we published a report on adapting EU agriculture and forestry to climate change. It is fair to say that the increasing water scarcity was a particular theme that came out of our inquiry. Subsequently we undertook an inquiry into innovation in EU agriculture, in which a key concept was sustainable intensification; that is, producing more from less, including, of course, less water.
It therefore seemed appropriate to us, given the increasing focus on water policy in the EU, to build on that previous work and to offer thoughts, some of which we hoped would be of assistance to the Government in developing their policy and to the Commission in preparing its blueprint for the future of EU water policy. Fortunately, that blueprint was published two weeks ago, and so, if I may, I will set out our conclusions and what the blueprint had to say about them.
We have to accept that the cost of water will have to rise. But before we can even think about that, we have to have a more fundamental consideration of how we value water. It is interesting to note that water is a scarce resource; yet, it has taken 20 years for the price of water to rise by 40%. When you look at the other scarce resource, energy, the price of gas has taken only five years to reach the same level.
The water framework agreement places an obligation on member states to do two things. One is to ensure that by 2010 water pricing policies provide adequate incentives for consumers to use water more efficiently. The second is to ensure an adequate contribution of the different users disaggregated into industry, agriculture and households. The object of that is to ensure that each pays an appropriate share of the cost of water services. That needs to take into account environmental and resource costs.
What surprised us was that during this inquiry, the UK’s regulator, Ofwat, told us that there is no real price placed on water in the UK. The Commission was critical in the blueprint of cost recovery in the UK. It appeared to us and to the Commission that water services were too narrowly defined and did not reflect environmental and resource costs, including self-abstraction by agriculture. Cost recovery is not transparently presented for all relevant user groups. Therefore, I ask the Minister to respond to that criticism and to answer how the UK will ensure as a matter of urgency that it is in a position to value water effectively.
Abstraction becomes important because it was regarded as not being effectively cost recovered. The Commission observed that the second most common pressure on ecological status right across the European Union stems from abstraction. In our report we urge the Government to accelerate their timetable for reform of the UK’s abstraction regime, a position that I know is shared by the EFRA Committee in the other place.
While we accept the Government’s position that the reform of the abstraction regime is a major piece of work, which should be evidence-based and carefully considered—that is, go slowly—is it not the case that changes made by this Government in other areas, including health and education, have been significant? We would welcome an application of a similar urgency and political impetus to tackle overabstraction, given the clear direction in the blueprint.
As regards water efficiency, scarcity can, in part, be addressed by efficiency. I have already mentioned abstraction but more must be done to tackle the scandalous levels of leakage and to encourage personal water efficiency. During our inquiry we were shocked to learn of the levels of leakage from water infrastructure. Why is it that in Germany the so called “sustainable economic leakage level” is 7% while in the UK it is 25%? In certain other countries in the European Union, it is as high as 50%. One way to encourage personal efficiency in water use is through metering. In our view, a greater use of metering needs to be considered. The Commission, quite rightly, describes metering as,
“a pre-condition for any incentive pricing policy”.
Does the Minister share that view?
Another example of innovation in water efficiency is water foot-printing. It has been calculated that, as a global average, it takes 70 litres of water to produce one apple and 15,000 litres to produce one kilo of beef. I do not know whether this is the experience of others but sometimes I have sat at a long lunch with rather dull company and hoped that some of that water could reform itself into a tidal wave and sweep away some of the clutter that we were facing. None the less, looking at the assessment of the amounts of water embodied in products and how the value of that water can be taken into account can make a real change to the way in which consumers make their choices. I am pleased to note that the Commission is very supportive of that concept.
A further area of efficiency is that of water reuse. One of the new legislative initiatives suggested by the Commission in its blueprint relates to water efficiency around this area. Many noble Lords may be aware of grey water use in Europe. This is lower-grade water which is used for irrigation. The Commission has identified that the use of this water faces certain obstacles because there are no standards. Because there are no standards, this leads to restrictions in the export and movement of agricultural products around the European Union. Therefore, it is suggesting that standards could help to alleviate this situation. Do the Minister and the Government have a view on the Commission’s analysis and are the Government planning to introduce such standards unilaterally?
Agriculture is a very large user of water. In our report, we urge member states to make use of rural development funds to support water management and water efficiency in agriculture. We were interested to note the Commission’s view that there is a lack of clear strategy in the UK defining the basic measures that all farmers should adhere to and what additional supplementary measures can be financed. Clearly, we do not want to pay for what we should expect as the norm.
The Government have indicated that a strategic framework for agriculture and water is being worked on across Defra. I should be grateful if the Minister could say more about that framework, including timing, and whether the Government consider that they will tackle the issues highlighted by the European Commission.
I now turn to urban diffuse pollution. This is a major issue as, within the European Union, most of us live in urban areas. During our inquiry, we were concerned that a recognition of the impact of agriculture on the water environment had in many ways diverted attention from the impact on urban diffuse pollution. We recognise that Defra is doing work on this and has published a consultation on its strategy for combating it. While we are supportive, I think that the proposal, rightly, is for a lot of this responsibility to be pushed to local communities. We are very supportive of local engagement. But is the Minister confident that communities will have the necessary tools at their disposal coherently to tackle key issues, such road run-off? Perhaps the Government might usefully draw on the experience of Danish colleagues, following the example of Copenhagen, as set out in Box 4 of our report.
We concluded that further research is required into urban diffuse pollution, particularly on run-off, sediment and waste water treatment. The pressure on costly urban systems could be reduced if the discharge or discard of chemicals into the sewerage system were to be reduced. In that context, we welcome the Commission’s commitment, in the blueprint, to present a report on pharmaceuticals and the environment.
It is particularly interesting that one chemical, EE2, which is present in oral contraceptives, makes its way into the sewerage systems across Europe. To give noble Lords some idea of the extent of this, it is estimated that over the next 20 years, we will have to spend £27 billion to clean this up. That gives a sense of the scale of the challenge that we are facing.
Some solutions may be found in the European Innovation Partnership on Water, to which we drew attention in our report. The essence of this is networking between researchers, companies, public authorities and consumers. How this trickles down involves those at the local level and taking it forward is one of the key challenges that we face. Again, it would be useful to have confirmation that the Government are actively engaging with practitioners and stakeholders to bring this fledgling initiative to their attention so that, locally, people know that they can become engaged from the beginning.
Perhaps I may say a few words on governance. Engagement with stakeholders takes me to a core conclusion of our report and a significant shortcoming that we see in the blueprint. We were extremely impressed by the evidence we received about the work that is taking place organically at catchment level—that is, the sub river basin level—to manage fresh water in the UK and Australia. We heard some extremely good evidence from the south-west of England and some extremely good evidence about what is going on in Australia. The essence is to engage local communities in the appreciation of their rivers so that they get to understand all the consequences of actions and the benefits arising from them. However, none of these local initiatives will work without leadership, technical support and financial resources. Where one of these is missing, success is impossible. Can the Minister reaffirm the Government’s commitment to sharing their experience of catchment management with others as an example of best practice? Spreading this is very important.
So far I have said very little about our views on implementation of the water framework directive, which is, after all, the core of the EU’s freshwater policy. On first experience of implementation, our conclusion was that it has been a great force for good. Yes, implementation is proving challenging, yet the very aspiration of seeking to achieve good status is clearly helpful. Based on the very strong view that we received from witnesses, we emphasised the need for a more nuanced approach to reporting progress in improving the quality of water courses, going beyond the changes in status. As the Government wrote in their response:
“Achieving good status is a long term goal and it needs to be recognised that preventing deterioration and making progress towards achieving good status are … achievements”.
We firmly agree with that. However, I would welcome comments from the Government as to how they consider that such recognition can be introduced into UK reporting procedures.
Lord Gilbert
I have been listening with great care to my noble friend’s very instructive and lucid remarks. I declare an interest as a director of an American company that is engaged in purification of water involving the fracking process. I did not hear my noble friend say anything about fracking. The amounts of water that are going to be involved in the United States are stupendous. Perhaps he could enlighten us as to whether his report took account of the possibility of fracking spreading to this country at anything like the scale it is proposed to extend to in the United States.
Lord Carter of Coles
I will deal with that now. We did not look at fracking, but we are looking at it in the context of our inquiry into energy, which will be very critical. We hope to report on that in the spring of next year.
One issue that concerned us greatly in this inquiry—as in a number of others that we have conducted—was the consistency of monitoring and enforcement across the EU. Time and again we conduct inquiries and find that we in this country have monitored and enforced effectively, only to look across at other countries in the Union and find a somewhat less than enthusiastic attitude to monitoring and enforcement. Therefore it is very comforting that, in the case of water, both the Government and the Commission accept the need to strengthen monitoring and enforcement. The Government make a series of commitments in this regard in their response, including working on harmonising monitoring programmes, reporting procedures, and sampling and analytical methods. These commitments are very welcome. However, given our concerns, can the Minister please tell us how the Government plan to take these ambitions forward? We see this as a critical area.
I have spoken today on behalf of my committee, many of whose members are present here, and I pay particular tribute to those members whose engagement and insight really brought energy to the inquiry. I also thank the committee’s specialist advisers—in this case, Professor Robert Harris of the University of Sheffield and Dr Jonathan Wentworth of the Parliamentary Office of Science and Technology; their support was of great value. In the months since the report was published, we have seen the commission's blueprint, and we have seen progress with the pilot catchment management and the draft UK consultation on urban diffuse pollution. Those are all very important steps forward, but we are looking to see more action.
To conclude, I return to where I started. Notwithstanding the recent weather, there is a need for urgency. We believe that the water framework directive is a force for good, but we believe that more must be done quickly to operationalise the policy and the aspirations. We need action on pricing, on abstraction and on diffuse pollution, and we need it quickly. Some 250 years ago, Benjamin Franklin noted that when the well is dry, we know the value of water. Looking across the EU, from Cyprus to Estonia to Essex, the wells are beginning to run dry and we need to do something about this rather quickly. Securing fresh water for future generations in the UK and Europe is a fundamental responsibility. We need to recognise that we will have to pay for it and we need to take the long-term view, as I suggest our forebears did when they made the great 19th century investments in water and sewerage, for which we have been grateful for more than 100 years. I beg to move.
Baroness Miller of Chilthorne Domer
My Lords, I was a member of Sub-Committee D for two terms and very much enjoyed my time on it. During the first term we looked at the water framework directive and its introduction; during the second term we did a quick follow-up inquiry. So I am particularly grateful to have the opportunity today to listen to the introduction by the noble Lord, Lord Carter of Coles. I am also grateful to other members of the committee who will contribute today, and for the opportunity to make a few brief points myself.
This debate on water issues should be the first of many that we will have. As the noble Lord, Lord Carter, said, the recent floods and the drought that we had earlier in the year are an indication of how severe things are likely to get with the more extreme weather that climate change is predicted to bring. Even before that, water policy has been seen as more and more crucial over the past 20 years. I believe that it was President Gorbachev who founded Water for Life and Peace because he saw it as one of the areas that would give rise to conflict in the 21st century. There is no doubt that we cannot afford to be complacent in any way about water from any point of view of security, whether actual security or food security, and so on.
Today I will limit myself to talking about priority substances, governance in terms of the water framework directive, and measurement of successful quality improvement of water bodies. First, I will talk about the priority substances explained on pages 13 and 14 of the report. A great many were listed by the water framework directive the first time around. There was an indicative list of main pollutants, of which some of the most worrying were those that possessed carcinogenic or mutagenic properties, or properties that can affect the reproductive and hormonal functions of creatures, including ourselves, of course. Then there are the persistent hydrocarbons and bio-accumulable organic toxic substances, which are all worrying, and that list is now to be added to.
The fact is that since we talked about this the first time, I do not think that we have got anywhere near tackling the substances on the current list. They have been placed in the “too difficult” box, or are too expensive to tackle. As the noble Lord, Lord Carter of Coles, has said, the estimate at the moment is that they will cost £27 billion to clean up. However, we have known for more than a decade, for example, that the endocrine disruptors are affecting the ability of dog whelks to breed. Before anyone thinks, “Well, who cares about dog whelks?”, the same effect is likely to spread to fish. Then there is the news today, which is very topical given this debate, of the much lower sperm counts in France. Maybe we are busy wiping ourselves out as a species, through our water. In any case, it is a form of pollution that must be tackled as a priority.
Paragraph 48 of the report suggests that we need “more knowledge” before tackling existing and new pharmaceuticals. However, given the science that we are already beginning to see and examples such as those I have just mentioned, we cannot afford to wait for another decade before we take action. Effluent-containing substances, such as endocrine disruptors and other things that could affect the ability of the whole gamut of animals to breed, will require waste water treatment when such things are flushed. As long as we persist in flushing such drugs out of our body, down the lavatory and into the rivers, we are going to have a very dangerous problem.
The report does not mention—at least I did not spot it—nano-substances. This is another very worrying development. The development of nanosilver is under way as an effective way of cleaning clothes in a virtually water-free way, but will those substances end up in our waste water, too? I think that the report is right to mention the worries, but it does not put over urgently enough the need to deal with them.
As the report says, governance is a key issue; linking communities back into their rivers and catchment is the way to affect behaviour change in our use of water and valuing of ecosystems. Some very good work has been done by the Wildlife Trust, for example, giving examples of how our water use can lower river levels until they cease to be viable ecosystems.
In paragraph 200, however, the report is plainly wrong, when it says that,
“novel governance approaches are despite, rather than because of, EU policy”.
Actually, it was quite the opposite. The original water framework directive really encouraged public involvement under Article 14, which was quite a long article—I shall not read it all out now. It was basically about public information and consultation and it said:
“Member States shall encourage the active involvement of all interested parties in the implementation of this Directive”.
It went on to specify a number of ways in which that would happen. Here in the UK, the attempt the first time round was, with a few notable exceptions, pretty poor.
I should declare an interest at this moment, because my husband was chairman of the Wessex Regional Flood Defence Committee and chaired one of the pilot catchment areas. We had debates on record in this Chamber; the noble Baroness, Lady Young of Old Scone, took part in them when she was at the Environment Agency. The agency was at that time unwilling to involve the public as much as the spirit of the water framework directive encouraged. Water companies were caught up in issues such as pricing and what comes out of the tap rather than whole-cycle costings. So at the time we wasted the opportunity for the public to be involved, and it is not because Europe got it wrong but because we did not interpret the water framework directive correctly.
There is also a problem of size. The designated size of the river basins means that the public will never relate to those, and I accept that the Government do not expect them to. Catchment areas or even subsets of those are what communities relate to. The smaller the geographical unit, the more likely you are to get real public involvement.
The recommendation in paragraph 201 is right in saying that one key is local authority energy and engagement with the water framework directive, and it goes on to suggest that some sort of duty could be put on water companies and local authorities to co-operate with each other. That is a constructive and helpful suggestion, because we need to kick-start that co-operation to get a far more engaged basis for this sort of work. The best results to date of catchment management plans have been exactly as a result of this approach, where local authorities have really got stuck in with their water companies and changed the way in which many things happen.
Finally, on measurement of water body status, I am very pleased that the report concentrates on the fact that status categories are too blunt. Paragraph 180 talks about “mapping of ecosystem services” informing choices of,
“technological solutions to be applied”,
moving away from the,
“‘one size fits all’ approach”.
The evidence from the Westcountry Rivers Trust is that,
“water quality objectives at present are only quasi-ecological”,
and are based on,
“point source pollution but not diffuse acute pollution”.
The trust mentions,
“biotic indices for macro-invertebrates”.
The point is that the initial water framework directive was a first attempt, and most member states had, and still have, big problems, as the noble Lord pointed out, with measuring water body quality in an outcome-related fashion. Nevertheless, refining measurements should be an absolutely key priority for us in the UK for this next phase, which ties in with governance.
I expect that your Lordships remember how the public imagination was caught by fish returning to the Thames as a sign that it was getting much cleaner. Fishermen and birdwatchers, who observe the top of the river food chain, have a good idea of the health of the river. Of course, the absence of creatures at the top of the chain might be due to other causes, as was the case with otters. However, the presence of creatures at the top of the food chain in numbers that you might expect, whether they are kingfishers, cormorants, otters, water voles, salmon or trout, means that things are likely to be healthy at the bottom of the chain, too. The Environment Agency’s website has a map you can interrogate on local river quality—and that is a very good start. It shows chemical quality and nutrient quality, but biological quality usually seems to be left blank. Is that because the mapping has not been done, which is what the report hints at?
I congratulate the committee again on a very helpful report, which will push us in the right direction.
Lord Cameron of Dillington
My Lords, there is no doubt that water is a valuable commodity. Sadly, we cannot yet control the amount that falls from the sky. Speaking as a farmer in the south-west of England in 2012, I can only say, “I wish!”. But, even after so much rain, we still do not value our water enough in this country.
I believe that we have now reached the stage where the UK needs to introduce compulsory metering. I realise that in some old blocks of flats it is difficult to achieve, but it is not impossible, even if special support funding might be required to disentangle the pipes in all the nooks and crannies, in some instances. But until everyone is on a meter, not everyone will value the water they use. In the UK, we currently use 160 litres per head per day, whereas in Germany, where they have universal metering, they use only 110 litres per head per day.
To go to the other extreme, in India, where until recently the belief was that water should always be provided free by the state, the result was that in some villages you could only get water from a tap for eight minutes per day. However, now they are charging for water, and the service has begun to improve. The Indian Government have at last understood that it is the poor who suffer most from cheap water. The rich can afford private bore-holes or other independent schemes. But the Government have now realised that it is best to put the right price on water and introduce other social measures where help is needed. The lesson learnt was that using water, one of the heaviest commodities around, to transfer wealth, did not make sense.
Back in the UK, although the circumstances are obviously very different, there are parallels with India. If, as at present in the UK, you have voluntary metering, only those who reckon to pay less will apply for a meter. Thus the rest end up sharing a greater overall cost to be averaged out between them. Often this means, as in India, that the poor end up paying more for the water they use than they should do. If we were to introduce metering we could perhaps even go one step further and apply the increasing block tariff method. This is a scheme that is counter to normal economic practice, whereby the more you buy, the more you pay per unit. China, Singapore and several countries in the Middle East and even in the EU now use this method. It is particularly effective for industry, especially for the electricity-generating industry, which can be a huge user of water unless the right capital investment is made. This scheme encourages the right capital investment. The trick is to get the charges and the percentage increase at the right level to encourage good practice without being overly punitive.
Going back to India for a moment, one of the major ongoing problems there is the established right of farmers to take water from the aquifers largely for free, without much control over the quantity. As a result, India removes nearly 100 cubic kilometres of water more from its aquifers than the recharge rate every year. I realise that in the UK, agricultural abstractions amount to only about 2% of all usage, but nevertheless, if we could develop a more flexible system of abstraction licences that looks to future needs, it could be beneficial to industrialists, generators, farmers, environmentalists and domestic consumers alike.
That brings us to Australia, where they are solving the considerable problems in the Murray-Darling river basin by changing or transferring from riparian or historical abstraction rights to tradable rights. It is a sort of water quota system that gives both long- and short-term flexibility to all parties: you can sell or buy, as well as lease, the right you have or need. This, incidentally, includes the Government, who buy entitlements to give to the environment. It means, for example, that in a drought, when water suddenly becomes expensive, rice growers reduce their irrigation or even their total production that year, but survive by selling or leasing their entitlements which, of course, are very expensive that year. Often it is agriculture that sells to mining or electricity-generating interests. Some farmers have actually sold their total allocation but survive on annual licences as and when needed. Municipalities buy excess entitlements and when they have enough for safety, they can rent some back to farmers on a flexible basis. Of course, it is important that the market is properly controlled and regulated, and above all, what is needed is a water trading system for the future, not the past. That means it must allow for the possibility of reducing rains and therefore the ability to reduce the total licensed abstractions.
Of course, the key to success of any system of sharing out this precious commodity called water is overall catchment management, as several noble Lords have already mentioned. Catchment management is about ecosystem services: not only the supply of clean water and the treatment of sewage but landscapes, habitats, irrigation, food, sport, central heating, cooling systems and protection from flooding, among many others. People probably value these services—being the results of water management—more than the water itself. That applies particularly when our population has to face its three biggest worries: drought, flooding and pollution.
Wherever problems exist, the most important thing is to manage our rivers as whole catchments. We are beginning to understand that if problems are caused by the many different activities of too many humans, then the solutions can only be found in the way these activities occur: the way we farm, the way we live, the way we manufacture and consume and the way we plan our urban and rural communities. They can all provide solutions to our water-based problems. We need to understand better how a catchment-based approach can be adopted and how to build the respective capabilities to operate it. Integrated catchment management is in contrast to a piecemeal approach that artificially separates land management from water management. They are inseparable; we rely on the health of both for many of the things we value. Experience shows that considering this locally will help engage communities to take ownership and act.
Catchment management requires leadership to ensure that we get the essential co-ordination covering the many different aspects of land and water management: agriculture, water supply, wastewater, waste management, highway and urban storm runoff, stream corridor restoration and development and, particularly, planning. Working practices are needed that work top-down with standards and guidelines and yet facilitate local partnership arrangements and appropriate delegation, creating local ownership within local catchments. That is the basis of Elinor Ostrom’s famous polycentric system of water governance. It is to be hoped that the revised EU water framework directive will greatly encourage such governance both here and on the continent. When I say “continent” in the context of this debate, of course I mean Europe, but my aspiration is that we might eventually stimulate similar practices and improve water management where it really matters: on the continent of Africa.
The Earl of Caithness
My Lords, I declare my interest as a member of Sub-Committee B and thank the noble Lord, Lord Carter, for introducing our report so well. Like him, I thank those who helped us with the report and all those who gave evidence to us.
Water has been cast as the bloodstream of the biosphere; it is therefore absolutely critical that we get it right. However, the Minister should understand that water is a much bigger and more complex problem than the Government’s White Paper, Water for Life, suggested. An increasing number of individuals, companies, organisations and agencies are involved, some of which are area specific. They all need to work together within the same framework and the same integrated policy, looking at the big picture.
In paragraph 201, we welcomed the requirement of the National Planning Policy Framework to take into account water management issues. That is only a start. As the noble Lord, Lord Carter of Coles, said, there ought to be much more integration among the water companies. Moreover, something that has not been mentioned yet is the vast amount of water involved in the production of energy. That, again, is a different government department. I hope my noble friend will consider the idea of having an overarching group to look at all these problems with a view to getting a sustainable water policy and water security by 2025. The Institute of Civil Engineers suggested the establishment of a water security task force. That proposal attracts me greatly because this is such a complicated area, covering so many government departments, that it needs a more holistic approach than is being taken at the moment.
One conclusion we reached was that the cost of water was going to rise. Even with the present cost of water, a lot of people are not paying the full amount. Can my noble friend tell me what percentage of households are not paying their full water bills at the moment? I think that it is quite a large percentage, but if water prices have to rise, it is going to be an even greater percentage unless we can link water bills to greater water efficiency.
On the cost of water, the Government replied to us in their summary that they were currently revising their social and environmental guidance to Ofwat ahead of the next price review in 2014. Having looked at that guidance, I think that it is horribly overprescriptive. That takes me to our recommendation in paragraph 215, which relates to water catchment areas. These will vary hugely across the country, depending on where the water is and the type of water that is within the particular catchment. The guidance to Ofwat is going to have to be a lot more flexible than that proposed by the Government in order for it to have the effect that we want of allowing the catchment areas to become the starting process for a better infrastructure for water.
The water framework directive is slightly odd, as we discovered as we continued our discussions and debates. It has a pretty good objective but in most circumstances its goals are unobtainable. It is slightly odd to welcome a directive where the goals are unobtainable and the Commission can take infraction proceedings against member states, but I agree with our report that it has driven member states forward in trying to improve the quality of water. Can my noble friend tell me what the Commission’s policy is with regard to taking action against member states?
Page 4 of the Government’s reply on this matter, concerning paragraph 188 of the report, states:
“Achieving good status”—
that is, under the water framework directive—
“is a long term goal”.
That is a misleading statement and I am sorry that the Government made it. Actually, the water framework directive requires that all inland, estuarial and coastal waters within RBPs must reach at least good status by 2015. That is not a long-term goal; it is only just over two years away. It is true that the water framework directive goes on to 2027, but it will start clicking in at a very early stage and there is no way that countries in Europe are ever going to meet the requisite criteria.
With regard to river basin management plans, which have been key to the water framework directive, can my noble friend tell me where we are with the four renegade countries—Belgium, Greece, Portugal and Spain—that did not submit plans in time? I find it slightly odd that the Commission produced a report based on river management plans when a sixth of the EU did not even submit them.
I turn, as did my noble friend Lady Miller of Chilthorne Domer, to the subject of priority substances. I take a different view from the one that she takes. From the evidence that we got, I am not certain that the Commission has been given the right advice about the seriousness of these pollutants. It is very easy for it to say that it needs to prescribe more substances, and indeed on 31 January this year it put forward a directive to add another 15 substances to the priority substances list. However, as the noble Lord, Lord Carter of Coles, identified, adding only one substance will cost £27 billion. These are huge amounts of money, and it will cost considerably more than £27 billion to deal with these problems. It is absolutely right that they should be dealt with if there is proper scientific evidence to back that up, but our evidence indicated that the Commission’s evidence for making decisions is not as good or as detailed as it should be.
I turn to our recommendation in paragraph 200 about governance. This relates to catchment management, which I have already touched on, but the government response also mentions the Environment Agency. We did not get written evidence from the Environment Agency, and I consider that to be one of the real downsides of our report. It is appalling that the agency did not write to us, although it gave us oral evidence. When it comes to catchment management, is not the Environment Agency now just too big an organisation to look at water on such a local level? It is the biggest agency in Europe, if not the world, and it is unwieldy and inflexible. Like Defra, handling anything that is not centralised is anathema to it. As long as a body such as the Environment Agency works in a centralised way, I do not see catchment areas working as we would hope. For them to work, substantial institutional, social and political changes will be required, but the present policy does not allow for that.
Paragraph 205 concerns payments to landowners. In their reply, the Government mention the work of the Forestry Commission. Can my noble friend update me on the current state of play there?
Paragraph 213 deals with the “polluter pays” principle. It is interesting that Blueprint for Water recently heavily criticised the Government in its assessment of where government work on water had got to over the past four or five years. The “polluter pays” principle is highlighted as one of the areas where not enough has been done. Of course, some polluters are easy targets—particularly farmers and landowners. They are easy to identify and it is on their land that a lot of the rain falls. However, to my mind it is not so much a question of tackling landowners and farmers; I consider urban waste water to be a far more serious problem, with chemicals being washed into the sewerage system. Individuals in urban areas have no understanding of the complications that they cause in relation to downstream clear-up. Not only should the polluter pay but the provider of services should be paid. The Government say in their response that they are going to publish an action plan with regard to expanding schemes. Can my noble friend tell me when that will be available? The government response indicated that it would be available later this year. This year is now almost over and we are approaching the next year, so can my noble friend update me on that?
Virtual water is a hugely interesting area and it will undoubtedly become much more topical in the not too distant future. What is interesting here is the amount of water that it takes to produce goods. If one looks at water on that basis rather than on a purely domestic basis, one finds that more than three-quarters of the water that we use in this country is imported, with less than a quarter coming from our own resources. It is also interesting to note that in the 20 years up to 2007 western Europe was the world’s largest importer of water, calculated on a virtual-water basis. The Commission is telling us how to conserve our water supply while we are taking water from the rest of the world, which in many cases has many more problems than we have, as the noble Lord, Lord Cameron, said.
I go back to where I started; we should have an overarching body to look into the whole subject of water and guide the Government in getting a sustainable policy for water security in the years to come. The noble Lord, Lord Carter of Coles, referred to the report we are currently undertaking on energy. Germany’s dash for coal and the increase in coal-fired power stations have come in the recent past, subsequent to the Commission publishing its papers. What the Germans propose totally distorts anything that has been agreed, and it will be the same in this country. However we tackle the energy crisis, it will require a huge amount of water. That needs to be taken account of when planning how to use water throughout the country. I do not believe that the Government have got their head around this. They have two different departments dealing with the same substance. I hope that my noble friend will have something positive for me on that.
Lord Giddens
My Lords, I congratulate my colleagues on Sub-Committee D for producing this report, especially those in the background who actually wrote most of it. I also thank my noble friend Lord Carter of Coles for—if I can put it this way—his robust chairmanship. The title of the report is An Indispensable Resource, but like so many other environmental goods, water is often treated as though there is an indefinite amount to go round. As climate change advances, it is likely to become a very scarce resource indeed, especially on a global level, although at some times and in some areas there will be too much of it as well. In other words, a mixture of droughts and floods—as other noble Lords have said—is a vision of our future.
In the UK over the past several years, we have seen just such a mixture. The same is also true at a somewhat more violent level on the continent, for example prolonged droughts interspersed with violent storms and flooding in the Mediterranean area. There was also an unprecedented flash flood in Copenhagen in July 2011, which completely paralysed the city. A recent daunting report on these issues was produced by the European Environment Agency only about a week ago. This showed that the past 10 years were the warmest on record in Europe—again the shape of things to come. I have four questions for the Minister. I shall make some comments and ask for his responses on the report, the Government’s response and the Commission’s blueprint.
First, as elsewhere, climate change will have a differential impact in the UK affecting different areas in opposing ways. Some areas will not have enough water and, as I said before, others will have too much. Water will have to be shipped around the country and new flood defences built. My question for the Minister is how can a national programme be developed, given the level of the industry’s privatisation in England and Wales? As the report makes clear, the English system is more or less unique in the EU in terms of the level of privatisation. Can that be reconciled with adequate overall planning for the future? Secondly, the Government’s response on water savings seems rather thin and inadequate. The report quotes figures of 20% of water wasted across the EU due to inefficiencies. New infrastructure will be needed, but we have to consider other strategic initiatives too. One is inducing culture change in the use of water by business and consumers. As someone who has worked on the many aspects of the field of reducing carbon emissions, it has proved difficult to change people’s everyday habits. Does the Minister think this can be achieved in the area of water efficiency, whether by metering or other means? I have to say that in other areas we have been notably unsuccessful in producing such behaviour change.
Thirdly, we will need some radical advances in technology. The report mentions rainwater harvesting as one area, but there are many others too. Do the Government see the European Innovation Partnership on water as likely to be of any value? What in substance does the Minister see it potentially delivering? Finally, picking out the point touched on by the noble Earl, virtual water is an important notion in this, especially for the future. It is an issue which is important internally in the EU because a lot of water is used invisibly, as it were, in manufacturing and service industries. As the noble Earl mentioned, it is also important in the UK and EU more generally in terms of the embodied water in imports. In this sense, it is similar to CO2 levels, where the EU has, on the face of things, been reducing emissions since 1990. However if you include CO2 emissions produced by transferring manufacture to China and other developing countries the picture looks very different. Does the Minister think that virtual water can effectively be measured and can we base practical policy on it? It is an intrinsically important aspect of the total mix when we try to produce a rational policy on water management. In conclusion, though, the Government’s response was pleasingly detailed, interesting and certainly took the work we did with due seriousness.
Lord Berkeley
My Lords, I am grateful for the opportunity to comment briefly on this report. I congratulate my noble friend Lord Carter of Coles on chairing the committee. It emphasises the serious issue of water resource shortage in certain parts of Europe. I propose to concentrate my remarks on London, where there is a growing shortage of water, as we all know. First, as my noble friend said, there are large volumes of leaks, which do not help the situation. However, if the current plans for the Thames tunnel are implemented, the Government are losing a great opportunity to deal with water shortage and the water quality of the Thames as one policy, rather than disjointed plans for dealing with the Thames, the tideway tunnel and dabbling in water conservation. I was grateful for the meeting with the Minister last week to discuss this issue and no doubt it will continue.
The tunnel from Hammersmith to somewhere near Becton will cost £4.2 billion, which will apparently put £80 on each Thames Water customer’s bill. Originally I heard this would be for 30 years, but recently I have heard it will be for much longer. Thames Water originally said this was needed to deal with 39 million tonnes of water a year, but last week, apparently, it revised its estimates down to 18 million tonnes a year. This is quite a surprising reduction. I hope the capital costs and annual bills will not be subject to 100% variation. It is a worry. My concern is that the problem with most of the demand for this tunnel is the high peaks of rain run-off during heavy rainfall. Even with a tunnel, overflows will still occur, so to me the obvious solution is to collect the rainfall and store it individually or collectively, rather than allow it to go into the sewers in the first place. I am told this is done very effectively in Philadelphia in the United States. I know that some people are coming across from there next week to demonstrate what they have done—there are many similarities between here and Philadelphia.
The system is called SUDS and the idea is to store the heavy rainfall in pervious surfaces, such as asphalt, water butts or lots of small things, which they say works even in an urban environment such as London. The water will then either drain more slowly into the sewers or, even better, be collected and treated for reuse as fresh water—so one is almost killing two birds with one stone. It works, and I believe that it would work in London. It would certainly obviate the need for the Thames tunnel and the horrible idea of £80 a year on our bills.
The report provides a challenge and an opportunity for the Government to follow the recommendations, as the noble Lord, Lord Cameron, said, to create integrated catchment management as the key.
I know that all Ministers of all parties love big projects because they think that in future years they will cut the ribbons when those projects open. The “future year” for the Thames tunnel is 2023, I am told, which is probably beyond the lifespan of any Minister in their present job. However, in this case, before committing to £4.2 billion of expenditure, the Government ought to follow the committee’s recommendation and investigate the alternatives to bring together water conservation, treatment and waste water as a coherent whole before it is too late.
Baroness Byford
My Lords, I am grateful to noble Lords for allowing me to speak in the gap. I apologise to the noble Lord, Lord Carter of Coles, for missing his opening two minutes. I could not get down quick enough and I apologise. I am afraid that my speech will be very staccato.
We held an important review of resource which, whether it concerns drought, flooding or pollution, is crucial to us all. One issue that came across in one or two of the contributions that we received was the lack of urgency, particularly among the water companies. That certainly worried me enormously, and so I might name them. The way we monitor, enforce and bring together differing standards was another common denominator, as other noble Lords have said.
One issue that has not been touched on in the debate—unless it was mentioned before I came into the Chamber—was the question of how we take water samples. The noble Lord, Lord Lewis, when he was with us, was very critical of this. He questioned what water samples were taken, at what time of day and, therefore, what the results were.
Noble Lords have already covered local catchment areas and some of the good practices that are taking place in that area. Public engagement in that is also hugely important and the sharing of best practice cannot be underestimated.
The committee looked at the “one out, all out” approach and felt that it was a very blunt instrument. However, within that, we recognised that progress had been achieved. If we had not had that approach, perhaps we would not have progressed as much. Perhaps the Minister will comment on whether there has been any different thinking in that area.
Jumping ahead to rural development and, particularly, the agricultural programme, £21.5 million has been allocated this year to consider diffuse pollution from agriculture. I wonder how much of that money has been used, in how many projects and whether any that has not been used can be carried forward for another year.
Other noble Lords have referred to leaks. In our report, we considered the question of allowing water prices to increase. However, before we do that, I hope that we will hold the water companies and others providing water to account. It seems to be the wrong way round. We should encourage the water companies to rectify the situation rather than allow them to put up their prices. I look forward to hearing the responses of other people but I, too, would like to pick up on a comment that was made and say that the Government’s response has been encouraging, but there is a lot of work to be done.
I ask the Minister to respond on the issue of virtual water. It is our responsibility in this country to use our water as best we can. As my noble friend Lord Cameron of Dillington inferred, many countries in the world do not have that option. It would be irresponsible of us not to make use of what we have to the best of our ability. In doing that, and in food production particularly—I remind the House of my family’s farming interest—we have a great responsibility which we cannot afford to dodge.
I thank the noble Lord, Lord Carter, and the team who looked after us so well. I again apologise to the House for being two minutes late and, therefore, for a worthwhile speech being useless.
Lord Grantchester
My Lords, I am sure that the noble Baroness’s speeches are never useless or worthless. We have enjoyed her contribution.
Clean water is a fundamental element of life. Traditionally, we have enjoyed it without thought at the turn of a tap, and have used and discarded it without thought. With climate change bringing huge volatility between droughts and floods, we are all now fully aware that water must be managed effectively. I declare my interest as a farmer in Cheshire.
The report by Sub-Committee D is very timely. I thank my noble friend Lord Carter of Coles, the committee chairman, for his excellent introduction and his committee for its coherent analysis and recommendations. It has produced its views at a time when the Commission, member states and interested agencies and groups have been in discussion on fresh-water policy before publication of the blueprint. The water framework directive has generally been accepted as a force for good. It has put the element of water into all environmental analyses from many diverse organisations and has had the added value of fostering co-operation between member states, most of which have now undertaken river basin management plans.
As each element in the transition to better management of water resources develops, it is imperative to take stock, assess and share best practice. The report informs a fitness check necessary to underpin the blueprint. There is general agreement that the implementation of river basin management plans has been challenging, but very instructive and informative. It has highlighted the challenge of costs, the challenge of the realities of gathering information and conducting assessments, and the need for innovation and an inclusive approach, not least because of the unforeseen problems that have been discovered.
The report has been welcomed by the Government and the EU Commission. Both will share in the assessment and challenges as policy develops. In general, the Government responses reveal that they largely understand many elements of the just short of 40 recommendations, are aware of the issues and are planning to provide answers to the challenges. The recently published blueprint will build in and on the common implementation strategy to continue to provide a positive role to bring about the framework’s directional objective—namely, to make water use in the EU more sustainable.
The blueprint outlines a three-tier approach: first, improving implementation of current water policy via the water framework directive; secondly, increasing the integration and recognition of water policy objectives into all relevant policy areas; and, thirdly, responding to lessons learnt and gaps in the current framework. It will undertake these elements by issuing guidance and developing existing measures, largely avoiding new legislative proposals.
That brings me to tonight’s debate and the issues highlighted by noble Lords. I draw attention to the cost of water—nearly all noble Lords highlighted this, including the noble Lords, Lord Carter and Lord Cameron, the noble Earl, Lord Caithness, and the noble Baroness, Lady Byford—and how we have to steer a course towards the right price and the right pricing policies. I agree with the noble Lord, Lord Cameron, that these need to be correct for the resource and that measures such as the social tariff—which we look forward to seeing from the Government—can be introduced where needed to reduce pressures.
The noble Lords, Lord Carter and Lord Cameron, raised the issue of reform of the abstraction regime and highlighted the urgency with which this must now be brought forward, even though there are significant challenges ahead. The third issue to find commonality in the debate is that of agriculture and its share of the problems vis-à-vis the urban perspective.
I go along with other noble Lords, especially the noble Baroness, Lady Miller, in their understanding of how we must pay attention to priority substances that will arise in future, such that we have our eyes on how we can effect changes and improvements in that regard before they become a growing problem.
Other noble Lords were also eloquent in highlighting the core of the report, especially the importance of capture management, strategic planning, and decisions being made within an effective system that takes account of more than one level of governance. The co-operation between companies will be vital. The noble Lord, Lord Giddens, highlighted the problem of how to effect this on a national basis.
Lastly, I will share with the noble Lord, Lord Carter, the highlighting of water footprints for the future, and ask the Minister how much attention is being given by the Government to water reuse? Also, in what areas does HMG consider that they can be most effective? Following on from that, I will also ask the Minister about future plans for carbon disclosure reports and water disclosure reports, which I understand Defra is co-funding. Which government department is taking the lead on this and how is Defra co-ordinating its policies with that department?
In conclusion, the debate has highlighted the vital issue of water management. In future its importance can only increase.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)
My Lords, I start by thanking the noble Lord, Lord Carter of Coles, for initiating this debate, and his committee for its report, An Indispensable Resource: EU Freshwater Policy. We are also debating the recent publication of the European Commission’s communication, A Blueprint to Safeguard Europe’s Water Resources.
Like the noble Lord, Lord Granchester, I declare an interest as the owner of a farm, through which a tributary of the Thames flows. I am also the proud possessor of a bore-hole.
As our recent weather has shown, in many parts of the United Kingdom we currently have too much water, but noble Lords will recall—and several have referred to—the position we were in last winter, heading into spring with parts of the country facing severe drought. As the noble Lord, Lord Carter, said, how quickly the rain came, and that position changed. While we cannot, as the noble Lord, Lord Cameron, said, change the weather, we can ensure that we are in the best position to deal with its implications and plan appropriately for those times when there is too much or too little of this essential resource available for both humanity and the environment.
The Government welcome the European Union committee inquiry into the blueprint and its recommendations as a helpful contribution to the debate. The Government are committed to improving the quality of our waters and we welcome the committee’s conclusion that the water framework directive has been a force for good. We are committed to implementing the directive, not merely from a legal point of view but because we believe we have a clear moral imperative, and an economic one. Many of the committee’s recommendations have also found their way, in some form, into the recently published blueprint communication.
A Blueprint to Safeguard Europe’s Water Resources outlines a three-tier strategic approach: first, improving implementation of current EU water policy by making full use of the opportunities provided by the current laws; secondly, increasing the integration of water policy objectives into other relevant policy areas; and thirdly, filling the gaps of the current framework, particularly in relation to the tools needed to increase water efficiency.
The UK Government have welcomed the communication and are pleased that, by and large, new regulatory tools are not proposed as the method for filling in the gaps. We strongly believe that the right framework is in place and efforts must be made to make that work, rather than automatically turning to the regulatory toolbox to provide the magic wand to solve a particular problem.
The majority of the blueprint actions are voluntary measures, such as new guidance documents to be developed with other member states. Other actions involve calling for the integration of EU water policy into other EU policies and improving the enforcement of EU legislation. There is only one possible legislative proposal on developing standards for water reuse. While we would prefer not to assume that regulation is the most appropriate vehicle for achieving this, we can understand the potential benefits for doing so, particularly with regard to meeting commercial and food production requirements on ensuring food safety.
In responding to the committee’s recommendations, I would like to highlight the following developments. We have committed to delivering improvements to our aquatic environment through a catchment-based approach, to which the noble Lord, Lord Carter of Coles, referred. We have established 66 pilots with a range of hosts, including charities, private water companies, established partnerships, and of course the Environment Agency and Natural England. These hosts are engaging with interested parties, and planning water improvement actions at the local level. The evaluation of these pilots will inform the approach for wider national adoption from April next year.
Water catchment plans will help target and share delivery of the measures we need to tackle both urban and agricultural diffuse sources of pollution. This will make a very real difference and up our game in improving the environmental status of our waters. We have recently published a consultation on how to address urban sources of diffuse pollution.
In the rural sector we now have various options available under agri-environment schemes to protect water quality. We will also have invested over £70 million within this spending review period, giving practical advice and grants for water quality improvements to farmers, through the catchment-sensitive farming project.
Last year we published the water White Paper setting out our vision for a resilient water industry that can meet future demands, and we are well on our way to achieving our goals through measures to tackle water efficiency, leakage, pollution, unsustainable abstraction and more. The draft water Bill published in July is another of the tools we are using to help us deliver the water White Paper’s vision for an efficient, resilient water sector that can attract long-term investment. The Bill will reform the water market and remove barriers to competition.
Our reform package will drive forward both innovation and efficiency by bringing in new players and new ways of thinking and by using market forces to keep down customer costs. This will not only benefit customers and stimulate growth, but will also contribute to our future resilience, and the environment.
As regards abstraction, which the noble Lord, Lord Carter, and others spoke about, we know that damaging over-abstraction is happening. We are reforming the abstraction regime to ensure that it is fit to meet the challenges of climate change and increasing demand. These are complex long-term issues. We need to make sure that we get this right. We will be consulting on proposals next year. It is worth saying that the Environment Agency’s “Restoring Sustainable Abstraction” programme is returning around 55 billion litres of water per year to the environment in England and Wales, which represents the domestic water use of a city the size of Leeds. We are also working with Ofwat and the Environment Agency to develop better tools and incentives to help water companies manage their abstractions sustainably.
Noble Lords have raised a large number of questions. I will do my best to address them. The noble Lords, Lord Carter and Lord Grantchester, raised the question of reuse. At this stage the Commission is considering developing a regulatory instrument setting EU standards for reuse of water for irrigation and industrial purposes. This could help remove obstacles to the free movement of agricultural produce irrigated with reused water, encourage reuse, and reduce pressure on water resources. No proposal is likely before 2015. There is not enough information available on the Commission’s thinking to form a view, but any initiative to reduce pressure on increasingly scarce water resources is worth consideration.
The noble Lords, Lord Carter, Lord Cameron and Lord Giddens, all asked about our attitude to metering. Metering can have advantages for some customers, cutting their bills and encouraging efficiency. Although many customers would see reduced bills if they were on a meter, others, especially large families in properties with low rateable values, would see their bills rise. For some, water might seem cheap and for them metering could have a perverse impact; they may say, “I am paying for it, so I shall use as much as I like”. Metering is not a solution in itself; it needs to be supported by good information and help to drive down water use. In view of those complexities, the Government do not propose to put in place a blanket approach to universal metering across the country. Water companies are best placed to find the appropriate local solution in discussion with their customers. They need to consider it as an option in water-stressed areas. As the climate changes and the population grows, the case for universal metering may change, but our view is that it will do so at different times in different areas.
The noble Lord, Lord Carter, asked how we would take forward our plans to deal with enforcement. The Environment Agency and the Rural Payments Agency, where appropriate, enforce the existing suite of regulations that are in place to protect our aquatic environment. In regard to abstraction, we are using a power in the Water Act 2003 to enable licences causing serious damage to our rivers to be removed or altered without compensation.
The noble Lord, Lord Carter, asked about the pricing of water. The independent regulator, Ofwat, sets price limits for water and sewerage companies every five years through a price review. The Government are not involved in price setting, although the Secretary of State uses a strategic policy statement and social environmental guidance to Ofwat to inform the price review process. That sets out policy objectives that Ofwat must have regard to in the performance of its functions. Currently, the Government are consulting on their guidance to Ofwat ahead of the next price review in 2014. That will reflect the Government’s policy objectives set out in the natural environment White Paper and the water White Paper. He also asked how we are making water pricing more transparent. As part of Ofwat’s price review, stakeholders, including the Consumer Council for Water, are working with water companies as part of customer challenge panels with the aim of improving the transparency of water bills.
The noble Lord, Lord Carter, asked about reporting. Domestically, the Environment Agency will improve reporting procedures by publicising the number of chemical and ecological components that show an improvement in status each year. That information will better reveal the level of progress that is often hidden by the aggregated description of overall status. Work is already under way to develop a statistically robust system for reporting the number of improved individual components. At EU level, the water framework directive sets out what has to be reported to the Commission and current reporting information systems are structured accordingly, reflecting the method for assessing the state of the water environment. Updates of the river basin management plans will contain an assessment of progress towards the achievement of environmental objectives and the European Environment Agency is publishing data that show the individual components of good status. Changes to the formal reporting system would require amendments to the directive and restructuring of the information systems, so that may not be achievable in the short term.
The noble Lord, Lord Carter, and my noble friend Lord Caithness asked about urban diffused pollution. We have just published a consultation on how to address pollution from urban areas. A strategy will be developed in 2013 in light of feedback from the consultation and of the views of and report by the committee. There is a wide range of issues in the urban environment and it would be key to work with local authorities to develop solutions to them.
The noble Lord, Lord Carter, asked about sharing experience between catchments. My department and the Environment Agency have put in place processes to foster the sharing of best practice and the things that have not gone so well between catchments. We also promote the work of the catchment-based approach at the European level through the various fora that exist.
My noble friend Lady Miller of Chilthorne Domer asked about public participation in implementing the water framework directive. The UK was complimented by the Commission on the steps that it took to engage people in the first river basin management plans. However, we recognise that we could do more and the development of the catchment-based approach is one step towards engaging more interested people at a more local level.
My noble friends Lady Miller and Lord Caithness asked about control at source of pharmaceuticals. The control of sources is generally more cost effective and better for the environment than trying to clean up after the event. However, current EU pharmaceuticals legislation does not allow for authorisation of a human medicine to be withheld on environmental grounds. DG SANCO is drafting a report into the effect of pharmaceuticals on the environment, which is expected to be published mid-2013. We expect that report to contain recommendations for possible amendments to the current regulatory framework for medicines.
The noble Lords, Lord Cameron and Lord Berkeley, spoke about integrated river basin management. The water framework directive, and its delivery through river basin management plans, essentially forms the basis of adopting an integrated river basin management approach. However, the Government recognised, after the publication of the first set of river basin management plans in December 2009, that we needed to adopt a more local-level approach to water management that brings together quantity and quality issues as well as flooding. That is why we are currently piloting the catchment-based approach to see whether that could form a stronger basis on which to bring together the various parts of the water cycle and to consider issues in a more integrated way.
My noble friend Lord Caithness asked about the Commission’s policy on taking action against member states which do not meet their obligations. The Commission has commenced proceedings against some member states in regard to non-conformity with the water framework directive, such as those that did not publish their river basin management plans by the deadline of 22 November 2009. My noble friend also asked whether we will have a water security task force, as the whole area of water covers so many government departments. We do not propose to have a water security task force, but a cross-government network already exists to deal with water security issues and it was called upon most recently, this year, to deal with our drought problems.
The noble Lord, Lord Giddens, asked about our attitude to the European innovation partnership. We aim to use the participatory process of the catchment-based approach to ensure that those working at practitioner level have the opportunity to engage with the European innovation partnership on water. The Water Sector Innovation Leadership Group will also consider ways in which practitioners and other stakeholders can make the most of the opportunities offered by the water EIP. He also asked about innovation. We are in the process of refreshing the Water Sector Innovation Leadership Group. That comprises representatives from my department, Ofwat, the Environment Agency and the water sector and provides leadership and direction to drive innovation to meet future challenges. It will meet in January 2013. We have provided £1 million towards a water security competition, run by the Technology Strategy Board.
The noble Lord, Lord Giddens, asked how we can develop a national programme despite privatisation. Privatisation does not stop our aim to meet our future resource requirements. We are considering the possibility of water trading between companies and look forward to working with other member states and the Commission to consider how we could use that mechanism. He asked how we can measure virtual water, and several noble Lords spoke about that. My department has commissioned a research project to evaluate the resources that are available to businesses to assess and understand the impacts of their water use. It will be published very soon. We are developing new guidance for businesses on how to measure and report environmental impacts. That will encourage organisations to consider their water use, including along the supply chain and to report against that. He also asked how we can change people’s behaviour to increase efficiency. That is an important point. A number of campaigns have been undertaken by water companies, the Consumer Council for Water, the Environment Agency and others to increase efficiency in water use by the public and by industries.
The noble Lord, Lord Berkeley, raised the issue of the Thames tunnel. He mentioned that we had a meeting recently. It is unacceptable on environmental and health grounds that about 20 million tonnes of untreated waste water currently enter the Thames in London when we receive as little as 2 millimetres of rain. Thames Water’s Thames tideway tunnel project offers the most cost-effective, comprehensive and timely solution compared with all the other solutions that we have seen. We are working with Ofwat, Infrastructure UK and Her Majesty’s Treasury to ensure that the financing and delivery costs of this large and complex project provide value for money for Thames Water customers and UK taxpayers. We are conscious of the impact on local communities and we welcome Thames Water’s two public consultations, which were an opportunity to hear from those affected. Thames Water’s planning application to the Planning Inspectorate is expected to be made in early 2013 and local communities will continue to be able to voice concerns on the proposals within the 18-month process.
Lord De Mauley
My Lords, I am sorry but I am running out of time and I have a number of questions still to get through. I am sure that the noble Lord, Lord Berkeley, and I will have further discussions on this subject.
My noble friend Lady Byford asked for an update on the chemical status of water samples. Across the EU, the Commission is focusing work under the common implementation strategy in regard to chemical monitoring and reporting for the next phase, commencing next year. This is an area where there is wide variability across the EU. The UK is in a stronger position than a number of other member states, but we recognise that we have more work to do in this regard. That is why the Environment Agency has made reducing uncertainty in classifications a priority in the first half of this river basin planning period. More than 12,500 investigations will be completed by the end of this financial year, which will improve significantly our understanding of the aquatic environment and provide the building blocks for taking decisions and developing the next set of river basin management plans.
My noble friend asked what the Government are doing to improve the “one out, all out” principle. The Government believe that this is essentially a sound way of assessing the state of the water environment. Domestically, the Environment Agency will improve reporting procedures by publicising the number of chemical and ecological components that show an improvement in status each year. This information will show the level of progress that is often hidden by the aggregated description of overall status. Work is already under way to develop a statistically robust system for reporting the number of improved individual components.
My noble friend asked about the £21.5 million available this year from the RDPE. This contributes to the Catchment Sensitive Farming project, which offers practical advice and capital grants to the farming community to make changes on-farm. The majority of this funding goes into the small capital grant scheme to make actual on-farm changes. The farmer also contributes 50% of the payment. This year the £7.9 million that Defra invested in the Catchment Sensitive Farming project has brought in £22 million per annum from European funds and £20.5 million from farmers.
Noble Lords have asked a large number of questions. I have done my best to answer as many as I can. I am trespassing upon the Companion already and I hope that noble Lords will allow me to write in response to any questions that I have not so far answered. I thank again the noble Lord, Lord Carter of Coles, and all noble Lords who have spoken. I will take away the words that they have given me today and think carefully about them.
Lord Carter of Coles
My Lords, I thank all noble Lords for their contributions. This evening we have been debating an important issue and what we have heard from all contributors has served to underline that.
A number of themes have emerged during this debate. Importantly, there was the issue of governance and local involvement, a point made by the noble Baroness, Lady Miller of Chilthorne Dormer, who was supported in that by the noble Lord, Lord Cameron of Dillington. We discussed the tools that are available to drive these changes, such as metering, which the noble Lord, Lord Cameron, mentioned, and trading in water rights. Virtual water was a theme from the noble Earl, Lord Caithness, supported by the noble Lord, Lord Giddens.
The dominant theme of the evening has been urgency. We are grateful to the Minister for picking up that sense of urgency, which we feel is needed in this important area.
I thank the noble Lord, Lord de Mauley, for setting out the views of the Government. We look forward to seeing how they take these messages forward for debate and discussion on their own domestic water policy and, more importantly, how they take it forward in discussions with the EU as a result of the blueprint and the common agricultural policy.
In my opening remarks I referred to Benjamin Franklin’s words of wisdom about the worth of water. At the same time, another commentator, Thomas Fuller, said that we never know the worth of water until the well is dry. Let us not wait until all the wells of Europe are dry before facing up to the true value of water. Of the messages that have come out tonight, the one that I would choose to flow through this debate is that we should look to the value and at how to spend it wisely.