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Oral Answers to Questions
(11 years, 2 months ago)
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Pat Glass (North West Durham) (Lab)
1. What recent assessment he has made of the political situation in Tunisia.
Graham Stringer (Blackley and Broughton) (Lab)
14. What recent assessment he has made of the political situation in Tunisia.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)
We continue to watch events in Tunisia closely. We condemn the assassination of Opposition leader Chokri Belaid. We have watched the peaceful transference of the premiership from Prime Minister Jebali to Prime Minister designate Laarayedh, which has been accompanied by strong statements by those in Tunisia about their adherence to democracy and building democratic institutions.
Alistair Burt
Matters relating to dates and timings of the constitution and everything else remain unclear. We have seen nothing at this stage to suggest that any date should be affected, but a new Government have not yet been formed. The Prime Minister designate has until the end of this week to create a Government. There may be an extension after that, but hopes are high that that Government will be confirmed. It will then be easier to see what dates will follow for the other parts of the democratic process of rebuilding.
Graham Stringer
I do not want to accuse the Minister of being complacent, because I tend to agree with him on Tunisia, but there is no constitution and no set date for the elections. Before the leader of the Opposition was assassinated, he said that anybody criticising the Government would be taken out, in effect, and there is video evidence of direct links between the ruling party and al-Qaeda. Should the Minister not reassess his policy?
Alistair Burt
I am not quite sure what reassessment the hon. Gentleman is asking for. As I have said, we are monitoring events as closely as we can. We are engaged with a variety of projects for democracy building in Tunisia, yet the constitutional processes being undergone are for Tunisians themselves. I spoke to our deputy head of mission just this morning. The streets are calm; people are expecting a Government to be formed at the end of the week. They are well aware of the difficulties of forming the Government and of the pressures between the political parties, but as he said, there are grounds for some optimism. These are obviously difficult days for Tunisia, but the fact that the process has been handled democratically and peacefully to date is much to be welcomed, and we will continue to encourage it.
Richard Ottaway (Croydon South) (Con)
I am sure the Minister can agree that Tunisia has made remarkable progress in its transition to democracy. For quite some time it has led the way in the region, but the inevitable wobble has now happened. Can he say what role the Deauville partnership has in helping the political, social and economic transition to democracy?
Alistair Burt
I very much appreciate what my hon. Friend says. There has been good progress, but we must all be clear that each state is different. These events in the Arab world will take time and there will inevitably be progress, both forwards and backwards. Tunisia is facing its own difficulties, but facing up to them well. The Prime Minister has made it clear that, as part of our responsibilities for the G8, the Deauville partnership will be reinvigorated to ensure that economic support is available to countries in transition. We believe that the G8 process this year will be able to deliver economic benefits to countries in transition such as Tunisia, which will be of enormous help to them.
Mr Gary Streeter (South West Devon) (Con)
Does my hon. Friend agree that building a stable democracy takes a long time? After all, it has taken us 800 years and it is far from perfect. Should not those of us who support the democratic changes in north Africa and the middle east therefore exercise both patience and perseverance?
Alistair Burt
My hon. Friend puts it very well. There is a great risk of trying to see all political developments through the prism of 24-hour news or a rolling news programme. These things will not be settled quickly. I suspect that we will not know the outcome of the Arab spring even by the time most of us have finished our period in Parliament. My hon. Friend is right: this will need patience. Equally, the commitment of those such as the United Kingdom to democracy-building institutions—which we are involved in through the Arab partnership and other partners—is a vital part of the process, if it is to be a success.
Ian Lucas (Wrexham) (Lab)
When President Marzouki came to Britain last autumn, he stressed the vital importance of establishing a broad-based constitution. In view of the difficult atmosphere following the death of Chokri Belaid, what specific actions are the UK Government taking to support the development of democracy, perhaps through Arab Partnership projects? This is an absolutely crucial time for Tunisia.
Alistair Burt
It certainly is. The hon. Gentleman is right to point to our engagement, through Arab Partnership, in various democracy-building processes. We are expecting a number of projects to be developed during the course of this year, at a cost of some £2.5 million, and we will be looking to develop projects on election monitoring, on the support of political parties and on democracy building. We are constantly looking, with the Tunisians, at what they will find most effective. Last year, one of the most effective projects was to help them to move their state broadcasting company into a public broadcasting company. Such efforts to open up democracy to more people are a vital part of the process that we hope will lead to the establishment of a new constitution in the time scale already set out by the Tunisians.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
21. There are 60 British companies currently operating in Tunisia, compared with 1,800 French ones. What steps is my hon. Friend’s Department undertaking with UK Trade & Investment to ensure greater British economic engagement with Tunisia?
Alistair Burt
We continue to encourage more UKTI missions to Tunisia. Through the G8 process, there will be a major investment conference later this year for all those countries involved in transition, at which UK companies will be able to look at the opportunities that are available to them in Tunisia. We want UK companies to be prepared to take more risk. We are sometimes told by nations abroad that they see more of other countries’ companies than our own, but we do not believe that that is necessarily the case. We want to encourage British companies to become involved, and Tunisia presents a series of fine opportunities.
Nia Griffith (Llanelli) (Lab)
2. What recent steps the Government have taken to improve the prospects for a two-state solution to the conflict between Israel and Palestine.
Ian Mearns (Gateshead) (Lab)
5. What recent steps the Government have taken to improve the prospects for a two-state solution to the conflict between Israel and Palestine.
Steve Brine (Winchester) (Con)
6. What recent assessment he has made of prospects for the middle east peace process.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
7. What recent discussions he has had with his Israeli and Palestinian counterparts to encourage the resumption of negotiations.
Chris Williamson (Derby North) (Lab)
13. What recent assessment he has made of the prospects for a two-state solution to the conflict between Israel and Palestine.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
There is a clear need for the United States to lead an effort to revive the peace process. This was top of the agenda of my recent discussions with Secretary Kerry, and I welcome the focus that he has brought to bear on the issue since his appointment. We will make every effort to mobilise European and Arab states behind decisive moves for peace.
Nia Griffith
Does the Secretary of State agree that the starting point for negotiations should be the legal status quo—that is, that the whole of the west bank and east Jerusalem, within the 1967 borders, is Palestinian land, as agreed unanimously by the United Nations Security Council in resolution 242—and not the facts on the ground created by illegal settlement building?
Mr Hague
Across the House, all of us have commented clearly about illegal settlement building on occupied land, but I think the starting point for negotiations has to be a common political will. That needs to be there in Israel, where a new Government are being formed, and among Palestinians, who continue to discuss reconciliation among each other. The true starting point is a common willingness to enter again into negotiations and to develop the middle east peace process, with the leadership of the United States but with the support of us all.
Ian Mearns
The Foreign Secretary seems to expect the Palestinians to have the patience of Job. He might be aware that, in the coming months, Israel is set to demolish hundreds of homes in the Palestinian town of Silwan to make way for a tourist attraction. Is he also aware that that is the single largest proposed demolition of Palestinian homes since 1967? What will he do to try to instil a sense of reality among the Israeli authorities to stop this unlawful theft of Palestinian land, which can only hinder the search for a two-state solution?
Mr Hague
The hon. Gentleman is right to say that such actions hinder the search for a two-state solution. Our condemnation of illegal settlement building and of demolitions on occupied land has been very clear across the House, as I have said. The important thing in the coming months is to move beyond that and to get into successful negotiations. The only answer, in the end, will be an agreed two-state solution, and the time for that is slipping away. The hon. Gentleman rightly mentioned patience. The world has been patient, but the time in which a two-state solution can be agreed is now slipping away, partly because of changing facts on the ground. That demonstrates the urgency, and I believe, in the light of all the discussions I have had with Secretary Kerry so far, that he is fully seized of the importance and urgency of the issue.
Steve Brine
I know that the Foreign Secretary is very much of the view that time is not on our side, and he has just reiterated that this morning. With that in mind, will he update Members on the situation in Lebanon, which I know he visited last week.
Mr Hague
I visited Lebanon the week before last, and it is a country whose stability we want to support. While I was there, I announced additional support for the Lebanese armed forces as well as for the Special Tribunal for Lebanon. We do our best to contribute to the stability of the Lebanese state, but that is often fragile—not least because of what is happening in Syria at the moment. I believe that we have many friends in Lebanon and that our announcements were strongly welcomed there.
Luciana Berger
As the right hon. Gentleman will know, the Israeli Prime Minister has recently given Tzipi Livni Cabinet responsibility for negotiations with the Palestinians. Does the Foreign Secretary agree that the appointment of a known vocal campaigner for a two-state solution is a welcome development? When will he or his Ministers meet Tzipi Livni and her Palestinian counterparts to see how Her Majesty’s Government could extend support for negotiations?
Mr Hague
Of course we should and do welcome the appointment of Mrs Livni, although I stress that the final composition and make-up of the Israeli coalition has not yet been agreed—these things have not been finalised. Mrs Livni has worked hard in the past to try to bring about negotiations on a two-state solution. We are indeed in regular touch with her and have been even when she was out of government. The negotiations, which failed to reach a conclusion by 1 March now have a further 14 days to produce an Israeli Government by 15 March. We hope that, whatever the composition of that Government, they will be committed to serious negotiations and have the same sense of urgency that we in this House have just expressed.
Chris Williamson
Does the Foreign Secretary accept that a freeze on settlement building is not a precondition imposed by the Palestinians, but a requirement imposed by international law?
Mr Hague
From what I have said many times about the illegality of settlement building on occupied land it will be clear to the hon. Gentleman where we stand on matters of international law. Now, however, we have to find a solution to all of this, and that will come only from a successful negotiation between Israelis and Palestinians. I do not know anyone who thinks that there will be any other way of bringing about an end to building on occupied land and peace both for Israelis and Palestinians. That is what we want to promote: settlements are obviously a major issue in any such negotiation.
Sir Menzies Campbell (North East Fife) (LD)
My right hon. Friend said a moment or two ago that the possibility of a two-state solution was slipping away. Does he understand that a large number of people, including well-informed commentators and analysts, believe that that time has now gone. If the position now is that the two-state solution is incapable of achievement, what are the prospects for any stability in Israel in the future?
Mr Hague
If, indeed, that possibility has gone, the prospects for stability in the whole region—for Israel and others—would be greatly worsened. We should be clear about that, as it is part of the argument to Israeli leaders to get them to use the time remaining for a two-state solution to be brought about. On that, I differ from my right hon. and learned Friend in that while I think this may be the last chance for a two-state solution and that the time is slipping away, I do not think that the time for it has yet gone. That is why it was at the top of the agenda in all our discussions with the United States at the beginning of this year. We will do everything we can to support American efforts as President Obama arrives in Israel in three weeks’ time.
Robert Halfon (Harlow) (Con)
When the Israelis unilaterally withdrew from Gaza, the result was 7,000 missiles from Hamas on to Israeli towns and cities. Does my right hon. Friend agree that any negotiation on the administered territory on the west bank should be accompanied by a guarantee from Hamas of an end to its terrorism?
Mr Hague
It is very important that rocket fire comes to an end. I am very concerned at reports of rockets being fired from Gaza into Israel last week, which was the first such incident since the ceasefire agreement in November. We call on all parties to respect in full the November ceasefire. We have consistently condemned the firing of rockets into Israel, which is not, of course, a helpful backdrop to peace negotiations.
Mr Crispin Blunt (Reigate) (Con)
I share the Foreign Secretary’s view that this is the last chance for a decisive move for peace. Is it not time to make it clear to the Israeli authorities that if it does not work on this occasion—if this move for peace ends as all the others have—the flagrant breach of international law that is represented by illegal settlements over 46 years, since 1967, will finally have to be met by some serious consequences, from the European Union and from ourselves?
Mr Hague
It will be important for EU nations, including us, and for Arab nations to give careful and well-calibrated support to the American efforts. I have already been discussing that with Secretary Kerry. We need to allow time and space for this American effort to develop as President Obama visits the region later in the month, but I believe that it will important for us to be able to say in concrete terms, at crucial stages of any negotiations that may develop, what we will do to support the process and to incentivise the parties involved. Of course, it may also be open to us to disincentivise—if I may use that word—those parties at crucial moments.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
In the context of conditions for peace, the right hon. Gentleman may not be aware that last Saturday, in Palestine, I visited the mothers and surviving family members—for some have been killed by the Israelis—of Ayman Ismail, who is being held in administrative detention and has been on hunger strike for 246 days, and of Samer Issawi, who is being held on trumped-up charges after being tried twice, once by a civil court which said that he should be released tomorrow and once by a military court which is holding him for 20 years, He has been on hunger strike for 223 days, and is in a critical condition. Will the right hon. Gentleman make clear to Netanyahu that if these men die, their blood will be on his hands?
Mr Hague
I think we can be absolutely clear that it is important for justice to be properly done and human rights to be observed on all occasions, for a justice system to be properly upheld, and for problems that have arisen in relation to hunger strikes—of which we have seen many in recent times—to be dealt with through successful talks between the Israeli authorities and those concerned whenever possible. We have urged that. There have been such successful talks in the past, and I hope that the same can happen in this case.
Mr James Clappison (Hertsmere) (Con)
3. What recent representations he has received on the activities of Hezbollah.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
On 18 February, the Bulgarian Foreign Minister told European Union Foreign Ministers that the Bulgarian Government took it as a justified assumption that two members of Hezbollah’s military wing had been involved in the terrorist attack in Burgas last July. Since then we have received representations from the United States and Israel about Hezbollah’s activity, and we have called on our European partners to respond robustly to terrorist actions on European soil.
Mr Clappison
I warmly welcome what the Foreign Secretary has said. This was a terrorist attack which cost the lives of six people, tourists innocently going about their business. Is it not high time the European Union acted against Hezbollah and banned it in its entirety? Otherwise, will not the EU be left looking a little bit casual, if not shoddy, in its approach to terrorism?
Mr Hague
As my hon. Friend knows, we are clear about this. The United Kingdom proscribed Hezbollah’s external security organisation back in 2001, and extended that proscription to the military wing in 2008. We are now discussing the issue in the European Union, and we would like to see the EU follow what we have done. We are engaged in active discussion with EU countries. Some are supportive of this, some are awaiting evidence from Bulgaria before making a decision, and some have other concerns. We are seeking to persuade them that those concerns are not warranted, and that the European Union should take a decisive position.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
24. The recent murder of Israeli tourists, together with a Bulgarian national, in Bulgaria is just the latest in a string of terrorist attacks by Hezbollah, from Argentina in 1994 to Cyprus and Turkey in 2011. Just what will it take for Europe to act against this terrorist organisation?
Mr Hague
As the hon. Lady will gather, that is what we are discussing in the European Union. My Bulgarian colleague briefed us on the matter at the last meeting of the Foreign Affairs Council, and we are now having the discussions that I just described. As I say, some countries wish to look at the evidence in more detail, and some have other concerns about the impact on relations with Lebanon. However, I made it clear on my recent visit to Lebanon that we supported the Lebanese authorities’ statement that they would co-operate fully with the investigation and that there is no need for any decision we make about Hezbollah to have a damaging impact on Lebanon’s stability.
Paul Maynard (Blackpool North and Cleveleys) (Con)
Hezbollah makes no distinction between its military activities and its political activities, so why does the EU feel the need to make such a distinction before it reaches a view about sanctions against Hezbollah?
Mr Hague
The United Kingdom made that distinction and we believe that those wings are organisationally distinct, even if they both come under the same overall leadership. It is important to recognise that Hezbollah’s political wing is and will remain an important part of Lebanon’s political scene, and we have to be able to act in the interests of the stability of Lebanon. We do not believe that an EU consensus could be arrived at on the designation of the whole of Hezbollah.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)
I have listened carefully to the answers offered by the Foreign Secretary, and on this matter I sense that there is genuine cross-party agreement across the House. He says that active discussions are under way with European partners on the proscription of Hezbollah’s military wing, but that some countries are looking at further evidence. Given the terms of the report published by the Bulgarians on 5 February and the discussions that the Bulgarian Minister has had with other European colleagues, will the Foreign Secretary tell the House what further discussions he is going to have, particularly with the French and with others? What assurance would they need in order to be able to match the action that, with our support, the British Government have taken?
Mr Hague
Of course, we are in active discussion with other European partners, including France. As I say, some are immediately supportive of designation, as we are, but some want to look in more detail at the evidence, although plenty of evidence is available. Some have concerns about the impact on the stability of Lebanon—concerns that I think are unfounded—on EU relations with Lebanon or on European troops serving in the UN mission in southern Lebanon, the United Nations Interim Force In Lebanon. So there are a variety of reasons for this, which I do not agree with, and it is clear that the right hon. Gentleman does not agree with them either. I shall, thus, quote the strong cross-party support in this House in the Government’s further discussions about this issue.
Sheila Gilmore (Edinburgh East) (Lab)
4. What steps the Government are taking to secure international agreement on a comprehensive arms trade treaty at the UN conference in March 2013.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)
The United Kingdom remains a determined driver towards a robust and effective arms trade treaty, as it has been for many years, particularly in the run-up to the conference in New York later this month. We are actively engaged in lobbying various other states, and we will continue to do that throughout the conference, both in New York and from London.
Sheila Gilmore
Just 10 days ago, in a debate in this House, the Foreign Secretary made a powerful speech on tackling sexual violence in conflicts. One way of turning those warm words into action would be by strengthening the draft text of the arms trade treaty, which calls on states only to “consider taking feasible measures” to avoid arms being used in gender violence. Will the Minister make getting those words strengthened in the treaty a priority?
Alistair Burt
We are looking actively to strengthen the treaty in a variety of places and to close off whatever loopholes we can. Tackling gender violence remains of exceptional importance to the United Kingdom and wherever there is a possibility of strengthening the text in relation to that, we will do so.
Mark Pritchard (The Wrekin) (Con)
I congratulate the Government on campaigning for a universal treaty and on ensuring that national reports are declared openly and transparently. But does the Minister agree that in two or three weeks’ time the draft text of the treaty needs to include all arms and weapons transfers?
Alistair Burt
The key priority for the United Kingdom is to make sure, first, that we do not lose the strength of the text that was almost agreed last July. We also want to ensure that we can clarify and strengthen the text wherever possible, and transfers is indeed one of the priorities that we will be looking at in seeking to improve the text.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
The UK director of Amnesty International has said that there are tighter international controls on the global trade in bananas than there are on arms. Will the Minister confirm that the UK Government will take this opportunity to push very hard for a very effective arms treaty that applies to all weapons and munitions and that ensures proper monitoring and an enhanced end-user certificate system?
Alistair Burt
The inclusion of all small arms and light weapons in the treaty is fundamental for us. I have had regular meetings with the director of Amnesty; I know her views and they are very similar to ours. It is vital that we get the broadest and most effective arms trade treaty out of New York. We will not be able to secure everything we would wish and we will not sign something just because it is a piece of paper. We want to ensure that it is robust and effective for those who use it and for end-users, too.
Duncan Hames (Chippenham) (LD)
It is said that around the world someone dies on average every minute as a result of armed violence, including 50,000 people who will have died last July while the arms trade treaty negotiations stalled. What prospect of American support for an international arms trade treaty did the Minister and the Foreign Secretary discern from their talks with Secretary Kerry during his visit last week?
Alistair Burt
We very much want the United States to be a party to the agreement, but we know—as is well known—that they have issues with some items. The Secretary of State was made well aware by my right hon. Friend the Foreign Secretary of the importance we attach to the arms trade treaty. The United States is, of course, keeping its negotiating position carefully guarded in the run-up to the negotiations, as one would expect. We are very keen that the United States should be able to sign the agreement and, of course, that it should meet our objectives of being robust and effective.
Kerry McCarthy (Bristol East) (Lab)
I was a little disappointed to hear that no Minister from our Department for International Development would be attending the arms trade treaty talks later this month. Given that armed violence is estimated to cost Africa $18 billion a year, will the Minister assure me that tackling poverty and the extent to which arms transfers undermine socio-economic development will be at the top of his list of priorities when he goes to New York?
Alistair Burt
As the hon. Lady rightly says, I am going to New York. It is not possible for a Minister from DFID to go on this occasion, but they went last July. The Minister of State, Department for International Development, has been determined in all his efforts over the course of the past year to pursue our interests in the treaty and will continue to work the phones even while other people are in New York. There is no lack of engagement from DFID and the Government’s determination, supported, we know, by the whole House, will continue throughout the conference.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
8. What recent discussions he has had with his European counterparts on the possibility of an intergovernmental conference on EU treaty change.
The Minister for Europe (Mr David Lidington)
I am in regular contact with my European opposite numbers on a range of issues, including on the reforms being discussed to bring stability to the eurozone and wider changes to the European Union.
Seema Malhotra
Given that the Minister is unable to give any indication of a time scale for any potential intergovernmental conference on EU treaty change, what does he say to businesses in my constituency that have raised their concerns that uncertainty over the relationship with the EU could harm trade with the continent and threaten their viability?
Mr Lidington
I would say to businesses in the hon. Lady’s constituency that I hope that they will warmly welcome the efforts the Government are making to strengthen the single market in Europe, to promote free trade with the rest of the world and to cut the cost of European regulation on businesses of all sizes.
Martin Horwood (Cheltenham) (LD)
Will the Minister embrace collaboration rather than confrontation in Europe and welcome last week’s call for smarter regulation, more cost-efficiency, more free trade agreements and many other European reforms that are possible with or without a treaty issued by the Deputy Prime Minister and Liberals in government in the Netherlands, Germany, Belgium, Finland, Denmark, Sweden, Estonia, Romania and the UK?
Mr Lidington
There was indeed a great deal in that statement with which I, coming from a different political family, would find myself in disagreement—[Interruption.] I mean in complete agreement—although perhaps I disagreed with a few points. It is striking that when I talk to my European counterparts, from whatever political family they come, there is a common sense of the urgency of Europe’s collectively getting to grips with the challenges of global competition and taking the steps on deregulation and the promotion of free markets and free trade that will bring more jobs and prosperity to everyone in this continent.
Emma Reynolds (Wolverhampton North East) (Lab)
Treaty change requires the agreement of all member states. However, the European Council President said last week in London that there was
“not much appetite . . . around the leaders table”
for opening the treaties. The Dutch Foreign Minister said:
“We will do everything to avoid treaty change”.
The French are not keen. The Germans are not keen. Which allies has the Minister found for treaty change?
Mr Lidington
I am sorry if the hon. Lady feels that the treaty of Lisbon is so perfect that it needs no reform at all. In respect of the President of the European Council’s comment, he has said before that he does not think that any treaty change is likely for the next couple of years, and I do not disagree with that opinion, but if the hon. Lady looks again at the report of the four Presidents, if she looks again at President Barroso’s blueprint for European reform, she will find there a proposal for substantial changes to the way the EU operates that would not be possible without changes to the treaties.
Margot James (Stourbridge) (Con)
We are seeing some positive results and progress in areas such as the EU budget, fisheries and the extension of the working time directive. Does my right hon. Friend agree that the ongoing process of negotiation and alliance building is a vital part of realising the reforms needed in the EU and Britain’s relationship with its European partners?
Mr Lidington
I completely agree with what my hon. Friend says. The achievement of the first-ever reduction in a European financial framework, coupled with the agreement on the ban on the obscene practice of discarding fish—something for which this country has fought for many years—is clear evidence not only that this Government are committed to working with our partners in Europe to achieve common objectives, but that we are succeeding in delivering outcomes that should be welcomed right across the House and by everybody in this country.
Sir Bob Russell (Colchester) (LD)
9. What recent discussions he has had with the Government of Israel on illegal settlements in the occupied west bank.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)
We take regular opportunities to talk to the Government of the state of Israel about settlement policy which, as the House heard earlier, we consider to be illegal and an obstacle to peace. My most recent opportunity was a meeting with the Israeli ambassador last Friday.
Sir Bob Russell
Against the worrying echoes of the southern states of the USA 50 years ago and of apartheid South Africa 25 years ago, the Government of Israel introduced segregated buses for Israeli settlers living illegally on the west bank and for the indigenous Palestinian population. Appeasing the racist regime in Israel must stop. Will the Minister, with his European Union colleagues, end our cosy relationship in view of such behaviour?
Alistair Burt
As always, recognising the context of Israel and the occupied Palestinian territories, particularly in relation to some of the hopes expressed by my right hon. Friend the Foreign Secretary earlier, means acknowledging how difficult the circumstances are, but also points to the consequences of there not being a settlement and of actions being pursued that continue to place Israel in a difficult position with world opinion. The longer the status quo is believed to be realistic, the more dangerous things become. We must all lend our efforts to the determination expressed by a number of states that this year must be definitive if we wish to see Palestinians and Israelis live in the sort of peace and harmony that we would all expect to bring an effective settlement to that region.
Mr David Winnick (Walsall North) (Lab)
Further to an earlier question, is not the crux of the matter that the Israeli Government, and previous Israeli Governments, do not believe that there will be any serious consequences as a result of what they do? Can one understand the sheer anger, resentment and frustration of the Palestinians who see no political progress at all? What would we do if we were in the same position as the Palestinians in the occupied territories?
Alistair Burt
The crux of the matter remains the extraordinary distrust and low levels of confidence between Israelis and Palestinians in relation to security matters and the long effects of the occupation, which has been so immensely damaging to both. As my right hon. Friend the Foreign Secretary said, we fear that unless there is effective action this year, the opportunity for a two-state solution is slipping away, the barrier between Israeli and Palestinian that we have all seen growing in our time in the House is getting more and more severe, and the opportunities, therefore, for people to live together in the future are getting more and more remote. The anger is understood. The fear of lack of security on the Israeli side is understood. That is why this year has to be definitive to make serious progress.
Mr Andrew Turner (Isle of Wight) (Con)
20. Is it not the case that in no other country would we allow large numbers of migrants to occupy its land, denying the land to local people? Why is so much energy put into the likes of Syria after two years, when nothing appears to be done about Palestine’s west bank, and in particular East Jerusalem, after 40 years?
Alistair Burt
I cannot accept the premise of the question that nothing is done in relation to this long-standing and deeply divisive issue. The United Kingdom has been a supporter of the Palestinian Authority and of its work towards statehood. We have condemned the possibility of settlements arising in new areas of East Jerusalem, we have condemned settlement building in East Jerusalem, and we continue to take the view that settlements are illegal and an obstruction to peace. As my right hon. Friend the Foreign Secretary has said during the course of these questions, this year must be definitive in making progress on both sides, so that the context of a secure Israel next to a viable Palestinian state becomes a reality before that window is lost and the situation becomes even more grave.
Mr Andy Slaughter (Hammersmith) (Lab)
The Minister rightly condemns illegal settlements, administrative detention and the demolition of Palestinian homes, but it appears that he cannot do very much. What he can do something about is the import of illegal goods from those settlements, which are running at eight times the level of imports from all Palestinians, as a recent report called “Trading Away Peace”, with which I believe he is familiar, by 22 non-governmental organisations, said. Will he now take steps to prevent the import of goods from illegal settlements to the UK?
Alistair Burt
We continue to work with European partners on the possibility of extending voluntary labelling so that people can make their choices. We do not believe in a boycott of goods, but we believe in clear labelling so that people can see where goods have come from. We are certainly keen to ensure that no goods from settlement areas find their way into the European Union by being labelled as Israeli, and we are determined to ensure that that does not happen.
Paul Uppal (Wolverhampton South West) (Con)
10. What assessment he has made of the outcome of the recent summit at Chequers attended by the Presidents of Afghanistan and Pakistan.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
The Chequers summit on 3 and 4 February brought together the political and security leaderships from Afghanistan and Pakistan. Both sides committed themselves to taking all necessary measures to achieve a peace settlement over the next six months, called on the Taliban to open a political office in Doha, and reaffirmed their commitment to a strategic partnership with each other. We will continue to support the two Governments in bringing about peace, taking into account the stability of the whole region.
Paul Uppal
I think that all of us in the House would echo the sentiments of the US ambassador to Pakistan, who said that he wished it to be a stable, prosperous and democratic country. Very much in that vein, given that she is a sizeable and important power in that region, what steps is my right hon. Friend taking to ensure that radical Islamist elements within that country do not destabilise her nuclear role?
Mr Hague
Across the House we are all very strong supporters of a democratic Pakistan. Pakistan is coming to a very important moment with a general election where, for the first time, a democratically elected Government will have served their full term to be succeeded by another democratically elected Government. The United Kingdom, of course, does a great deal to support Pakistan, particularly with the huge programme of the Department for International Development. That in turn is particularly focused on primary education in Pakistan, and we also seek to boost trade and investment.
Derek Twigg (Halton) (Lab)
In view of what the Foreign Secretary has just said, will he give us his assessment of the state of play in terms of what help elements of the Pakistani security force are still giving to the Taliban and insurgents?
Mr Hague
One important aspect of the Chequers summit was that the Pakistani security establishment was there, representing the leadership of the army and the Inter-Services Intelligence. Their clarity and their support for pursuing a peace process, and for working with Afghanistan and with us in order to do so, were abundantly clear. This is therefore now the context in which Pakistan is looking at the Taliban. It wants the Taliban to come into reconciliation and peace.
Mr Speaker
I think that the strength and knee muscles of the hon. Member for Canterbury (Mr Brazier) now deserve recognition.
Mr Julian Brazier (Canterbury) (Con)
Thank you, Mr Speaker; that is an interesting accolade.
I congratulate my right hon. Friend the Foreign Secretary on that extraordinary summit between two powers that were very unlikely to share a room together even a few months ago. I also congratulate our embassy in Kabul on the extraordinary work it is doing to promote the commercial side of Afghanistan, particularly the mining projects, which in the long run are the key to prosperity for the country.
Mr Hague
Both points are very important. The embassy is absolutely working hard on such projects. On relations between Afghanistan and Pakistan, one must never be complacent, and much work remains to be done. The two Governments, with our encouragement, have achieved a bigger improvement in their relations in the past six months than at any time in the previous 10 or 20 years. That gives us something to work on.
Mr William Bain (Glasgow North East) (Lab)
11. What progress he has made in developing proposals to repatriate powers from the EU.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
15. What progress he has made in developing proposals to repatriate powers from the EU.
The Minister for Europe (Mr David Lidington)
The Government have already made progress on securing reforms to the EU, by ending Britain’s obligation to bail out eurozone members, by ensuring that the smallest businesses are exempted from EU regulations, by securing protections on banking union and by achieving a shift in fisheries policy towards local and regional management.
Mr Bain
But did President Van Rompuy not have a good point last week when he said that, rather than prioritising treaty change, the Government should be leading the charge for growth in Europe? With our economy having grown by a dismal 0.2% last year, should the Minister not take that advice rather than trying to weaken the rights of work for millions of employees across Britain?
Mr Lidington
It is this Government’s commitment to growth, jobs and prosperity in Europe that lay behind the achievement of the EU’s free trade agreements with the Republic of Korea and with Singapore, attained during the lifetime of this coalition Government, and it is the firm alliance between our Prime Minister and the German Chancellor that is driving forward, with the Commission, moves in Europe towards an historic transatlantic trade deal. I wish that the Opposition were sometimes a little less grudging.
Shabana Mahmood
Does the Minister agree that seeking to repatriate powers in the areas of employment and social affairs would not be about regaining powers from Europe, but rather about taking away the rights of working people here at home?
Mr Lidington
I sincerely hope that the hon. Lady is not seeking, by means of that question, to suggest that she supports an end to our opt-out from the 48-hour working week under the working time directive. I hope that she is not being complacent about the European Court of Justice judgments that have caused such difficulties for the national health service and for the social care sector, problems that are not unique to the United Kingdom and concerns about which are shared by many other member states.
Mr David Nuttall (Bury North) (Con)
Has the Minister drawn any conclusion from the fact that at last Thursday’s Eastleigh by-election a majority of voters voted for candidates who want to see the United Kingdom repatriate all powers from the European Union?
Mr Lidington
I think that what the voters in every constituency in the country will be looking for is a Government who actually deliver results for the people of the United Kingdom, at both the economic and political level, in Europe and globally.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Does the regionalisation of fisheries waters not show that we can repatriate powers under the present treaty and that that augurs well for the future repatriation of powers to the United Kingdom?
Mr Lidington
I believe that there are many reforms that can be achieved within the current treaty framework and further reforms that, in due course, would be best settled within the framework of treaty amendments.
Mark Hendrick (Preston) (Lab/Co-op)
12. What discussions he has had with the Governments of Mali and France on protection of British civilian and military personnel in Mali.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mark Simmonds)
Force protection for the small UK military team supporting the C-17 operation in Bamako is being provided by the French as part of the wider Mali operation. Protection for the EU training mission, to which the UK has offered both military and civilian personnel, is being provided by French and Czech military personnel. We do not envisage UK personnel fulfilling a force protection role.
Mark Hendrick
I thank the Minister for his answer. What lessons have been learnt from the EU mission in Somalia, which was relatively successful in keeping terrorists out of the security services, as opposed to a rather less successful exercise in Afghanistan in which many allied servicemen lost their lives as a result of terrorists entering the security services?
Mark Simmonds
The hon. Gentleman is correct to say that we learn lessons from EU trading missions where they are taking place. Lessons have been learnt from Somalia. However, there are also differences, one of which is that we are going to infuse into the EU trading mission to Mali some civilian trainers who will focus on the Foreign Secretary’s prevention of sexual violence in conflict initiative to make sure that the Malian army understands the importance of that as well as the importance of humanitarian law and human rights.
Tim Loughton (East Worthing and Shoreham) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
This morning I returned from Mali, where I met its President and Prime Minister to urge early progress on a political process and reconciliation with all communities in their country. I also met and thanked members of our armed forces who have given logistical support to France and are now beginning to form the EU military training mission.
Tim Loughton
May I take the Foreign Secretary to the other side of the world and declare an interest as a member of the Tibet Society? He will be aware that there have now been more than 100 self-immolations in Tibet. He will also be aware of the big crackdown and harsh prison sentences for protestors, including families of the victims. I hope that he is also aware that next Wednesday there will be a big lobby by Tibetans coming to this House. What is he doing to support the growing number of Tibetan refugees, many of whom are escaping across the mountains to Dharamsala? In particular, what help can we give through the British Council to assist in education about and preservation of the Tibetan language and culture, which are being so brutally repressed by China in Tibet?
Mr Hague
In a very short answer, Mr Speaker, we do indeed have serious concerns about the recent wave of self-immolations and urge the Chinese authorities to show restraint towards Tibetan protestors. As my hon. Friend knows, we believe in meaningful dialogue between the Dalai Lama’s representatives and the Chinese authorities as the best way to address and resolve the underlying grievances. There is no change in our policy towards Tibet, which we regard as part of the People’s Republic of China. However, we are always concerned about human rights issues and—in the interests of brevity, Mr Speaker—we will take an additional look at the points that my hon. Friend raises.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)
In the light of the latest round of the P5 plus 1 talks held last week in Kazakhstan, will the Foreign Secretary update the House on progress? In particular, will he share with the House, if he feels able, some of the specific guarantees that the UK Government would be looking to achieve from the Iranians as part of these important discussions, given that being clear about the objectives increases the likelihood of success in the negotiations?
Mr Hague
These discussions took place in Almaty last week, on 26 and 27 February, and they were successful enough for further meetings to be agreed. Meetings of officials will take place in early April, also in Kazakhstan. Of course, it is pleasing that it is worth while having those further meetings. In the E3 plus 3 we have put a revised offer to the Iranians. However, that revised offer would involve both sides taking actions that then build confidence for further negotiations, without our thinking that we can resolve the entire problem in one move—one negotiation. We hope that Iran will continue to take a strong interest and a constructive role in these negotiations. It is too early to tell whether the Iranian position is to do that or to play for time, as has often happened in the past.
Mr Alexander
I note that the Foreign Secretary says that it is too early to tell about these negotiations and that the issue cannot be resolved in one go. I certainly recognise both those points. In recent days there has been quite a lot of speculation about the prospects for bilateral negotiations between the United States and Iran. Will he share the Government’s thinking as to the likelihood of a grander bargain between those two powers taking place in the months ahead?
Mr Hague
The United Kingdom is, of course, open to bilateral discussions, which are difficult in our case because of the unavoidable closure of embassies. Nevertheless, I have from time to time met the Iranian Foreign Minister and we are open to the idea of other members of the E3 plus 3 having bilateral discussions with Iran. Such discussions sometimes take place at the margins of the E3 plus 3 meetings. It is important for Iran to know that we are seeking to settle the nuclear issue—Iran would, of course, have all the rights of a country under the non-proliferation treaty—and that the western world is not embarked on regime change in Iran. That sincerely is what we are trying to do. Any bilateral discussions that make that clear and allow negotiations to proceed more successfully on that basis would, of course, be welcome.
Andrew Stunell (Hazel Grove) (LD)
T3. My constituent Mr Percival is one of many who have been robbed by property fraud in Cyprus following the default of the Alpha bank. Will a Minister meet me to discuss with the Greek and Cypriot authorities what might be done to rectify this disgrace?
The Minister for Europe (Mr David Lidington)
Ministers at the Foreign and Commonwealth Office and our high commissioner in Cyprus regularly raise property issues with the Cypriot authorities. I have made a commitment to meet members of the all-party group on the defence of the interests of British property owners in Cyprus to discuss the particular case to which my right hon. Friend has referred and the broader issues. I would be very happy to talk to him in that context.
Mr Russell Brown (Dumfries and Galloway) (Lab)
T4. The Foreign Secretary advised the House in a written ministerial statement that the Government would consult European Union partners on strengthening EU sanctions. Will he update us on those discussions and on what impact further sanctions would have on the North Korean leadership and the North Korean people?
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
The situation in North Korea following the nuclear test a few weeks ago is extremely serious. I summoned the North Korean ambassador and had subsequent discussions in Seoul in South Korea when I attended the presidential inauguration of President Park. We continue to work with EU partners and the UN in order to introduce a tougher sanctions regime for Pyongyang.
Bob Stewart (Beckenham) (Con)
T5. Twenty-seven years ago, the arrival in Uganda of President Museveni’s regime seemed to herald a new dawn for the country. Last week I was visited by Bishop Zac Niringiye, the assistant bishop of Kampala, who used to be a parish priest at Christ Church, Beckenham. Bishop Niringiye, who was himself arrested three weeks ago, briefed me on the appalling levels of Government corruption now endemic in the country. What can Her Majesty’s Government do to succour the drive to end corruption in Uganda?
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mark Simmonds)
My hon. Friend is absolutely right to highlight the threat that corruption poses both in Uganda and across the African continent. We remain concerned about the situation in Uganda and he may be aware that the Department for International Development temporarily froze all UK aid going through the Ugandan Prime Minister’s office. The UK, along with other donors, is supporting the Government of Uganda’s action plan, which will be reviewed next April.
Pamela Nash (Airdrie and Shotts) (Lab)
T7. Have the Foreign Secretary or the Foreign Office had any recent discussions with the European Commission about Scotland’s membership of the EU should it choose to leave the UK? If so, will he update the House?
Mr Lidington
No, we have not had discussions with the European Commission, but we have made it clear in published documents that the great weight of international legal advice and precedent is that an independent Scotland would have to negotiate its membership of the European Union and other international organisations. In the case of the EU, that would, of course, require the unanimous consent of all member states for every term of that membership.
Sarah Teather (Brent Central) (LD)
T6. I recently visited Gaza as part of a cross-party delegation with Interpal. While there I was alarmed to witness, on three different occasions, the shooting at and intimidation of Palestinian fishing boats that appeared to be clearly inside the six-mile limit agreed by the ceasefire. Earlier, the Secretary of State roundly condemned, as is right and proper, the firing of rockets into Israel, but does he agree that peace depends on both sides sticking to the terms of the ceasefire, including Israeli naval ships?
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)
Yes indeed; the terms of the ceasefire must be adhered to by all. The opportunity for Gaza to get greater economic independence and a resumption of normal trade to and from Gaza will be of huge benefit. That package needs to hold together. Israel needs to have security in its southern area, but Gaza also deserves an important boost to its economy so that matters can move forward. The ceasefire must certainly hold.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
I hope that the Minister sees a continuing important role for the nation state in Europe. Will he do all in his power to protect very small states such as Luxembourg, which has a successful economy, so that they can continue to do things their separate way, without any further loss of sovereign powers in any possible EU treaty change?
Mr Lidington
In my experience, Luxembourg’s Ministers are extremely vigorous and effective in protecting the interests of Luxembourg. However, I would add that the United Kingdom, as one of the biggest member states of the European Union, is usually able to exercise rather greater influence and to mobilise coalitions more effectively than a small country on its own, particularly one that might just have joined the EU.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
T8. May I draw the attention of my right hon. Friend to the Fresh Start manifesto and, in particular, to the section on the budget? Will he confirm that we will insist that MEPs vote on the multi-annual financial framework in public, rather than in private as has been proposed by the European Parliament?
Mr Lidington
Elected representatives, whether in the European Parliament or this place, should be accountable to the people who elect them in the first place. A secret vote is a denial of that democratic accountability. I hope that Labour Members will exercise the maximum possible public pressure on the socialist group in the European Parliament to stand by that principle of political accountability, to which the Conservative party is committed.
Jeremy Corbyn (Islington North) (Lab)
Like the hon. Members for Brent Central (Sarah Teather) and for Kettering (Mr Hollobone), I was on an Interpal delegation to Gaza last week. I would be grateful if the Minister could tell us what is being done to lift the blockade on Gaza so that the terrible water situation can be addressed. Sewage cannot be processed, fresh water is unobtainable because of the pollution of the aquifer, and the material to set up a desalination plant or something like it cannot be brought in to provide a decent standard of living for the people of Gaza.
Alistair Burt
Following the end of the conflict towards the end of last year, there have been renewed efforts to ensure that Gaza progresses towards a normal economic situation and that the resources that are needed to rebuild the infrastructure can go into Gaza. The United Kingdom is clear that unless that happens, the divide between Gaza and Israel will remain. It is essential that that work proceeds and that the UK plays a full part in urging those changes.
David Mowat (Warrington South) (Con)
T9. Twice in the past year, the UK has failed to vote at the UN to support the aspiration of Palestinians for their own state as part of a two-state solution. On each occasion, the reason given was that we did not wish to undermine a future US-led peace process. May we have an update on the time scale for that? When do Ministers think they might be able to vote in a different direction?
Alistair Burt
As my right hon. Friend the Foreign Secretary made clear in response to earlier questions, Secretary of State Kerry will visit Israel and Palestine shortly, as will President Obama. It is clear that there is a re-engagement all round with the issues that will affect the middle east peace process. We remain clear that this is a priority for the region and for the world, and we will give every assistance to that process.
Dr William McCrea (South Antrim) (DUP)
Will the Secretary of State tell the House whether the Government have set out a clear list of powers that the Government desire to repatriate from the EU? In the light of that, are negotiations going on with our EU colleagues about the process that would be necessary to achieve that end?
Mr Lidington
As a coalition Government, we are committed to a programme of significant reform of the European Union, as has been set out in many speeches and public statements by Ministers throughout the Government. The question of a treaty renegotiation will be put to the electorate in the Conservative party’s 2015 manifesto.
Karen Lumley (Redditch) (Con)
Following the arrest this morning of former President Nasheed in the Maldives, will the Minister update the House on the situation in that country?
Alistair Burt
Yes, and I had a report from our high commission in Colombo earlier today. We understand that former President Nasheed was rearrested earlier this morning, and he has access to lawyers. At present we remain puzzled about the turn of events. It was widely believed that an arrangement was in place following former President Nasheed leaving the Indian high commission a couple of weeks ago, in relation to his trial and his part in the forthcoming elections. We are watching the situation carefully and have made it clear to the Maldivian authorities that no harm must be oriented towards the former President.
Ms Margaret Ritchie (South Down) (SDLP)
Given earlier references to the regionalisation of fisheries policy, is the Minister hopeful that we will achieve the objective whereby regional advisory councils can make decisions on fish quota allocations and fisheries management?
Mr Lidington
In the light of the vote in the European Parliament the other week and the more recent decision at the Council of Ministers, the Government are confident but not complacent—I think that is how I would put it. I assure the hon. Lady that the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon), working in close consultation with all three devolved Administrations in the United Kingdom, is determined to do his utmost to deliver the kind of deal that she and I wish to see.
Mr Speaker
Order. I am sorry to disappoint colleagues but even a two-hour session for Foreign Office questions would probably not be sufficient. We must move on.
Romanians and Bulgarians (Benefits)
(11 years, 2 months ago)
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Mr Frank Field (Birkenhead) (Lab)
(Urgent Question): To ask the Secretary of State for Work and Pensions if he will make a statement on what actions the Government are planning to restrict welfare to newcomers from Bulgaria and Romania from 1 January next year.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
May I congratulate the right hon. Gentleman on getting his urgent question on the second time of trying? He is a model of persistence and I, of course, was over the moon about his persistence.
The right hon. Gentleman has raised an important question and I want to deal with some aspects of it. First, however, I will set the scene as to what we are trying to deal with. I understand that Labour Front Benchers now admit that they fundamentally got it wrong on immigration, but the scope to which they got it wrong is why we have this issue. Between 1997 and 2010, net migration to the UK was some 2.2 million people—larger than the city of Birmingham. Interestingly, from 2004 to 2010, 1.1 million European economic area nationals registered to work in the UK. After the prediction of what was likely to happen, the scope of the problem is far greater than anything the Labour party wanted to tell the public. Most of all, I congratulate my right hon. Friend the Home Secretary and her team in the coalition for having begun the process of reducing net migration to Britain for the first time in a long time.
For the benefit of the House and in line with the right hon. Gentleman’s request—I know he particularly wanted me to answer that bit first, so having dealt with it I will get on with the rest of my answer—let me explain the current arrangement. A lot of nonsense is talked about what we are and are not capable of. First, people must pass the habitual residence test, introduced by the previous Government, before being entitled to claim income-related benefits. The current system was put in place in 2004 and has basically two elements—a legal right to reside and an assessment of factual evidence of habitual residence. As we know, EU citizens have the right to live in another member state as long as they are a qualified person, which basically means a worker, self-employed person, jobseeker, self-sufficient person or student. Tax credits have, I am afraid, been open to abuse outside that system from day one because the rules allow anybody from within the European economic area to claim self-employed status and receive full entitlement immediately. The Government are trying to wrestle with that problem, and I will return to it.
We are currently facing—not for the first time—a legal challenge from the European Commission because our habitual residence test states that people must prove they live in the UK habitually before they get access to benefits. It seems strange to me that anyone should be surprised that a habitual residence test requires that a person should live in the UK habitually, but we sometimes live in that George Orwellian political language world, which the Commission seems to foster with great alacrity.
Secondly, on exportability, under the EU co-ordination rules, benefits under the main categories of social security are exportable—that is, payable elsewhere in the European economic area. So that we clear up the confusion, let me say that that includes, notably, child benefit, for example, and has for a while. We therefore pay child benefit to children who live in other EU states when their parents are working here. That causes a lot of concern, and quite legitimately so. When both parents work but in different countries, the EU rules apparently determine who has primary responsibility for paying, but any difference in entitlement is netted off. So, for example, if someone comes from Poland and works over here, the child support that we pay here is netted out against what they might have received had they been paid in Poland, and the net amount is therefore paid across. That is the existing rule. The UK system is obviously more generous, and that is why it pays people in a sense to be here, getting those benefits.
I recognise there are some real issues here. We are in the midst of looking at those issues with other countries as well, and I want to mention which ones are on the schedule. The Government are concerned that, although some protections are in place, they are not enough. That is particularly worrying given the issue, which the right hon. Gentleman raises, of 1 January 2014. So we are trying to look carefully at where the system is falling down at the moment, and I am exploring a series of options. Today, for example, I have called for another meeting of a series of European nations that share our concerns. Some people might have noticed today that Germany has woken up at last to the reality that it might face a large net migration. We are due to meet its representatives and others from around the EU to try to ensure that we deal with this. I do not believe that it is acceptable that we go on with it—I have told the European Commission that—and we will resist it.
Mr Duncan Smith
I am answering the question. To be frank, the real question for the hon. Gentleman is why he sat with a Government who, for over 10 years, made such a shambles and a mess of this.
The reality is that we are trying, for example, to figure out the rules that allow us to prevent individuals from staying in the UK for only a short time before claiming benefits—a rule that existed under the last Government. We are looking at the tests about accommodation and the length of time people spend here. We want to look at things such the leasing arrangements they have for their housing and over what length of time, and even at challenging the narrow and short-term definition of “habitual” used by the European Court of Justice. In other words, we are trying to lock people out from coming here solely for the purpose of claiming benefits.
I have to tell Opposition Members, who were making a noise just a second ago, that one of the big problems is that the last Government did not collect any data on how many migrants actually claimed benefits here. We have changed that. We are now totalling up who is here and who will claim benefits, and we will be on top of those figures.
In conclusion—I know the right hon. Member for Birkenhead (Mr Field) wants to ask some further questions—there are a number of things we need to do. We need to tighten up immediately the rules about habitual residency. We need to tighten up the rules about accommodation and the leasing length of time. We need to tighten up and start the process of arguing hugely with the Commission that it is quite wrong to net out things such as child benefit and pay the higher level to people whose families do not even come with them into the country to work. Finally, many nations in Europe are just as angry as we are about this, and we have been meeting them since last summer and reaching a common purpose to deal with the Commission and force it to recognise that any further changes it wants to make, including by taking us to court over the British residency rules, are not acceptable. We will tighten up. I refuse to accept the Commission’s rules. I will not give way on the habitual residency test, and we will tighten up on net migration.
Mr Field
May I thank the Secretary of State for his answers, but might I now try to pin him down on four issues? Does he accept that, if the word “crisis” is used, it is a crisis that successive Governments have engendered by moving welfare from the basis that people had to make contributions to receive benefits to one where they receive them if their income proves needs? Is not his universal credit just one more move in that direction? When will the House know what further restrictions will be placed on universal credit to prevent it from being claimed immediately by people who arrive in this country? Does he not accept that the current situation—basically, a means-tested welfare state—is inconsistent with our European Union treaty obligations and is against the Prime Minister’s wish that we should be open for trade but not an easy touch? Are the Government now going to rescind the directions issued by primary care commissioning groups as Parliament rose for the summer last year, which instructed doctors that they had to take people on to their books if they had been here for 24 hours, including people here illegally? When will the Government act on that?
Will the Government use the powers they do have to instruct authorities that in allocating social housing, they must pay due attention to the length of time people have been waiting and to their good behaviour; and that they have a duty to publish data—on which the Government will insist—on whether social housing is being allocated to non-British citizens?
Finally, given that there are already 150,000 Romanians and Bulgarians here legally, and that they are arriving here at a rate of 25,000 a month, does he not accept that the answer he has just given us will prove ineffective against the movement that might well come after 1 January 2014? Will he therefore tell the House when he expects to report on what measures the Government will take? Will he ask for a whole day’s debate, so that the House can improve them before we rise for this summer’s recess?
Mr Duncan Smith
I have known the right hon. Gentleman for a considerable time and have huge respect for him that goes beyond party affiliation. I will deal with those four points, but I want to deal with a point he made right at the end.
I absolutely agree with the right hon. Gentleman that this is something of a crisis. For the past two years, I have been fighting a rearguard action against what was left to me by the previous Government. [Interruption.] Opposition Members can moan, but let us put the facts as they are: I inherited a habitual residency test that simply is not fit for purpose. We are trying to tighten that up dramatically and I am being infracted by the European Union for doing so. Before Opposition Members start lecturing us, let us remember what they left. The right hon. Gentleman is, however, absolutely right—I am with him on this—to describe this as a crisis.
The right hon. Gentleman made an important point about the contributory issue on welfare. Tax credits took things faster in that direction, which is why self-employed people coming in to the country are immediately able to claim tax credits even if they are doing only a little bit of work—we talked about The Big Issue sellers and so on. That is one area we have to look at in relation to universal credit, but I take the opposite view from him. Universal credit gives us an opportunity to redefine the nature of that benefit by absorbing the tax credit issue, taking away the right of individuals coming in from overseas to claim on that basis, and redefining it as something much more in line with our obligations, while being able to lock out many migrants who would come and claim immediately. I am happy to discuss that with him further, but I believe we will be able to make that move, which I am looking at at the moment.
The right hon. Gentleman is right to say that GPs and the health service often overstate their responsibilities to migrants. I talked to the Secretary of State for Health about this issue about a week ago, and he is looking carefully at issuing clear instructions that they do not have to do this. It is my view and belief that that is the case, and it is about making it clear that they do not feel they will be challenged. It is a little like health and safety rules—people over-interpret the situation. In fact, things are never as tough as that, and we need to provide strong guidance.
The right hon. Gentleman is also right about being clear to local government. I am working with the Secretary of State for Communities and Local Government to ensure that we publish and are clear about the number of people from overseas who are taking social housing ahead of those who have waited a long time in the queue. This is part of what we are trying to change—I agree and I will do that.
I am very happy to meet the right hon. Gentleman and to work with any colleague, from either side of the House, to make common purpose to tighten up our arrangements so that we do not have a problem when 1 January 2014 arrives. However, a little humility is required from Opposition Front Benchers in recognising that they signed the accession treaty that left us with this problem. It was they who created the habitual residency test that left the door open, and I wish they would apologise and work with us, rather than complain the whole time.
Nicholas Soames (Mid Sussex) (Con)
Does my right hon. Friend agree that the economic benefit to Romanian and Bulgarian families of migrating to the UK is roughly double that to a Polish family, so the scale of his task is huge indeed? When he meets his European colleagues who share the same anxieties, will he see whether they have a different phrase and judgment for the habitual residence rules?
Mr Duncan Smith
I will, and I am at the moment. Since last year, we have been talking to colleagues in various countries, including Germany, about the need to deal with the Commission’s view. In a sense, the Commission is using free movement to enter the realm, I think, of social security, which has never been within its remit, and we have to challenge that. Up until now, Germany has been a little more ambivalent, but interestingly in the past two or three weeks it has suddenly begun to change its tune, and other countries, such as Spain, are coming into the group too. We have asked for urgent meetings immediately with that group—in the next two weeks—and I will raise this matter with it.
Stephen Timms (East Ham) (Lab)
I, too, welcome the urgent question from my right hon. Friend the Member for Birkenhead (Mr Field), but I am sorry that the Secretary of State answered it in such partisan terms.
The benefits system needs to be fair, and to be seen to be fair. Over many decades, people have come to the UK and made a huge contribution to our economy and our society. The Government now need to look at the benefits and services to be provided, given the prospect of future European migration. We need a sensible and serious debate about credible changes, but the Secretary of State seems only to be floating some rather vague ideas without any sense of whether they can be delivered.
The Secretary of State plans to introduce universal credit from October, but roll-out has already been drastically delayed and fundamental questions are now being asked about the deliverability of the IT. If, as he suggested a moment ago, the Government are to change the rules in the system ahead of implementation, they risk making the delivery of universal credit even more chaotic than it is already set to be. Will he explain how the changes he now envisages will fit in with what is supposed to be being introduced already?
Over the weekend, we were tantalised with hints from Ministers that they wanted the system to be more contributory, but the changes they have made so far, as my right hon. Friend pointed out, are making it less contributory. Has the Secretary of State had a change of heart in favour of a more contributory approach? One other suggestion floated is for the introduction of ID cards. Are these the same ID cards that Ministers announced were scrapped straight after the election? Furthermore, will he and his colleagues do a much better job of enforcing the minimum wage? There have been no prosecutions for minimum wage infringements over the past two years, which has been part of the problem. Will he now put that right?
Mr Duncan Smith
The changes are long overdue, and I would like to know why the right hon. Gentleman did not explain why the last Government did nothing about resolving the issue. He says that we should not be partisan, but he just has made a very partisan statement when an apology was all he needed to make. He needed only to say that he was sorry for the mess Labour left us in.
What we are talking about will have no practical effect on the implementation of universal credit, which, by the way, is proceeding exactly in accordance with plans. On the contributory principle—this is the point I wanted to make to the right hon. Member for Birkenhead—there is no magic wand. Let us bear it in mind that if it was a blanket contributory principle, we would end up paying a lot of benefits, such as winter fuel payments—an issue that, as the right hon. Member for East Ham (Stephen Timms) knows, was not resolved by his Government—to lots of people who had long since departed Britain. We are considering the matter, and universal credit will give us an ideal opportunity to embrace tax credits and, through this requirement, to start the process of change so that we can resist the pressure of paying tax credits—because they would no longer exist—to people who come to the UK for the first time and claim to be self-employed. That is the area I am looking at.
We need no lectures from the right hon. Gentleman about prosecutions for minimum wage infringements. The last Government’s record on this was so bad I wonder why the Opposition bother mentioning it at the Dispatch Box. We are trying to change it, and will change it, whereas the last Government gave way on every single issue in Europe from the moment they arrived.
Mr John Redwood (Wokingham) (Con)
Why can the Secretary of State not propose to the House that we legislate to say that no one can get benefits unless they can demonstrate a suitable contribution record or have spent at least 10 years in full-time education in the UK?
Mr Duncan Smith
As I said earlier, that is the direction of travel we are trying to head in. We are trying to change the rules, in order to make the test covering the period someone spends here and the commitment they make to the UK much tougher. We are wrestling with the habitual residence test, but it is weak in parts because it makes no requirements concerning the length of time someone commits to being in the country. That is an area we have to, and will, challenge. I want to change those rules so that the European Court recognises that someone needs to make a commitment to the country they are in before they can start drawing down.
Chris Bryant (Rhondda) (Lab)
I remind the Secretary of State that it was not just the Labour party that supported the accession of Bulgaria and Romania, but every single Member of the House at the time—there was not even a vote—so this is something for us all to engage with. I suggest that it is deeply irresponsible to keep briefing newspapers and providing lots of hints—nudge, nudge, wink, wink—but then not to come to the Chamber with concrete proposals. In the last two years, there has not been a single prosecution for breach of the national minimum wage, even though 13% of those working in care homes in this country are on less than the national minimum wage. Is it not time the Government sorted that out, so that fewer people choose to come here?
Mr Duncan Smith
I just do not agree with the hon. Gentleman. It’s great, isn’t it? In government, they wanted to take the credit for everything, but in opposition they do not want to take the blame when things then go wrong. They negotiated the treaty, so they bear the responsibility. I have to pick up the pieces, and we are going to do that. Under universal credit, we will hugely tighten up on self-employed people, shutting the door to many of those whom he allowed to come in and claim benefits in the first place.
Greg Mulholland (Leeds North West) (LD)
The Secretary of State is right to seek to deal with what is clearly a wholly unsatisfactory and confusing situation, but does he agree that some people are seeking deliberately to misrepresent the current reality and so are fuelling fear, which can lead to prejudice and hatred? Does he agree that we need better information about the situation?
Mr Duncan Smith
I agree with my hon. Friend. I would simply make the point that we have to deal with the reality. Our system does not deal with the problem of people coming here solely to claim benefits. We are always keen for people who have something to add to come to the UK and add their talents and skills to help us build the economy—that has always been the principle—but we do not agree that people should find an open door and a way of coming in just to take money to which they never contributed. That is the key issue. I agree with his point, but responsibility rests with those who used to defend, but now spend their time attacking, the very position they created.
Kate Hoey (Vauxhall) (Lab)
Is not the simple truth that we cannot do anything much about any of these problems? The Secretary of State might come up with one or two little changes, but the only thing that will give us back control of our own borders is leaving the European Union.
Mr Duncan Smith
As the hon. Lady knows, given my track record, I bow to nobody in my scepticism about many of these treaties. Under the Prime Minister, we have made it clear that, should my party get elected into government next time round, a very serious renegotiation will take place, with the option of an in-out referendum. Personally, I think that is exactly the right position. This is one of the key areas over which we want to get back a lot of control, and only my right hon. Friend the Prime Minister has been bold enough to say we will do that, and test ourselves against that.
Mr Edward Leigh (Gainsborough) (Con)
I love the Secretary of State, but frankly his answer was so long and complicated that one would need a degree in social security to understand it—I did not understand it. As a recent by-election showed, the people are hurting and they want a clear answer from the Government. Why do the Government not do as my right hon. Friend the Member for Wokingham (Mr Redwood) and the right hon. Member for Birkenhead (Mr Field) suggested and either move to a contributory system or say, “We will not pay you benefits until you have stayed here for a number of years”? If the European Court sues us, bring it on, and that will make our case for renegotiation.
Mr Duncan Smith
I am always grateful for my hon. Friend’s support in these matters. I recall that he used to be in a Government busy voting for the Maastricht treaty when I was rebelling against it, so, with respect, I will do whatever I can and I do not bow before anybody in my determination to say no to the European Commission.
Mark Hendrick (Preston) (Lab/Co-op)
There has been a huge amount of exaggeration of the scale of the problem. Bulgaria and Romania are a fraction of the size of Poland. Most Romanians are more likely to go to Spain or Italy. Is this not more to do with Conservative voters migrating to UKIP?
Mr Duncan Smith
I am actually a little surprised that the hon. Gentleman makes any reference to the Eastleigh by-election, when the Labour party’s position was an absolute disaster. This is not about that; the reality is simply that we need to ensure that the procedures are tightened up, mostly because of fairness to those who pay their taxes in Britain, who work hard and do not want to see social housing and all these other areas going to people who never made a commitment to this country. This is simply about fairness. We were left a bad position. I am trying to change it, while being infracted by the European Commission and saying no to it at the same time.
James Duddridge (Rochford and Southend East) (Con)
The Secretary of State repeatedly talks of the infraction process, which is surely just a fine. No one has ever paid any of these fines. Please, please, please: just say no, tell the Commission to sod off and do not pay the fine.
Mr Duncan Smith
If my hon. Friend does not mind, I will skip the language and keep to the sentiment.
Mr Speaker
Order. I can say only that I experienced a moment of deafness—partly because somebody else was wittering on at me—but I have the impression that perhaps something rather tasteless was said. I trust that the person concerned will wash his or her mouth out without delay.
Ian Lucas (Wrexham) (Lab)
Will the Secretary of State clarify whether the Government are considering removing rights to NHS treatment for British citizens, in an effort to restrict access to EU migrants? This has been reported over the past few days, as part of his party’s reaction to events last Thursday.
Mr Duncan Smith
My view is that that is not the case. It is a matter for the Secretary of State for Health. I recognise that the hon. Gentleman will have to raise it with him, but I am not aware of any such discussions or any such facts being placed in front of me. I would certainly not be keen for that to happen, but as the hon. Gentleman will be aware—as will the right hon. Member for Birkenhead, whose track record on this is arguably unimpeachable—we have a big problem and we have to face it, not because we are scaring people, but because we have to deal with it.
Mr David Ruffley (Bury St Edmunds) (Con)
I welcome the Secretary of State’s toughening up. I certainly trust him to fight in a tough and effective way in Brussels, but does he understand that many of our constituents find it grotesquely offensive that Brussels officials are telling this Parliament who it can and cannot pay benefits to? In that spirit, will he confirm that this is an area of EU competence that this Government will ask to opt out of?
Mr Duncan Smith
I agree with my hon. Friend that it is invidious that areas that I have always believed were outwith the Commission’s normal competences are being sucked in by using other things—this is to do with the free movement. More could have been done and the issue should have been raised at a much higher level. It is quite good that other nations—mostly northern European nations, but also Spain—are now deeply concerned about the ratchet process. We are meeting them and there are the beginnings of a real resistance to it.
On what will happen in any negotiation, I am clearly not in a position to commit my right hon. Friend the Prime Minister on whatever may happen in future.
Sammy Wilson (East Antrim) (DUP)
I welcome the fact that the Government are now tackling the legacy they were left, as far as benefits for foreigners are concerned, but does the Minister not see the contradiction in the Government’s stance at present? We are talking tough at home while—according to Romanian Ministers—giving assurances that those who come from Romania will be given full access to benefits, on the same basis as UK citizens. Does he not see that as an incentive for Romanians to come here and dip into the financial honeypot that they see?
Mr Duncan Smith
That is exactly what I am trying to deal with, but not just for Romanians. This goes across the board for what anybody in the European economic area can do when they come here. The problem has been in existence for some time, as the right hon. Member for Birkenhead said. I now have to sweep up after the lord mayor’s show and deal with what has been left behind, after the last Government did nothing at all about the problem. I will do it; I am absolutely determined to.
Mr John Baron (Basildon and Billericay) (Con)
This is clearly not a problem of the Secretary of State’s making. Given that the average salary in this country is five to six times what it is in Romania and Bulgaria, will he do what he can to ensure cross-departmental co-operation, so that we do not face the situation we had in 2004, when Departments were simply out of the loop?
Mr Duncan Smith
Absolutely. In fact, we have already had a number of meetings with the Prime Minister and coalition colleagues about tightening up between Departments and understanding where one Department’s position knocks on to another. The first thing is to get rid of the silo mentality that existed and create a pan-Government position. The next thing is not to talk tough here and soft abroad, but to work with the Foreign Office to be as tough over there as we are back here. That is the process that is now being engaged.
Jim Shannon (Strangford) (DUP)
The Minister will be aware that large numbers of migrants are bypassing France, Italy and Germany to get to the United Kingdom, almost in haste. What discussions has he had with other EU countries to find the reason for bypassing other countries? Is it that the benefits system in the United Kingdom is much more generous than those anywhere else in Europe?
Mr Duncan Smith
We have had meetings about this issue with about 17 countries, all at the same time. I would list them all, but they include meetings with officials from Bulgaria, the Czech Republic, Estonia, Ireland, Germany, France and Poland. We have had meetings with all of them. There is no common position for them all, but a sub-set of those most likely to be affected—I understand that Germany and Spain are where most of the Romanians tend to be going at the moment—are very concerned about what may happen. We are discussing with them exactly how to respond. Reality is now striking many and I think the door is open for us to make a serious move on this issue.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I commend the Secretary of State and the Government for addressing this issue, which has never been addressed before. The principle is simple: UK citizens are entitled to the benefits that come with the contribution system we inherit, whereas EU citizens—those from Ireland perhaps are excepted, because of the common travel area—should not expect greater benefits here than UK citizens should expect in other EU countries. If we could get to that position, everybody would understand it and there would be greater justice and far fewer complaints.
Mr Duncan Smith
I agree with my right hon. Friend. The point he makes—it is one I have made before—is that there is not an easy solution to what the Commission wants, which is to try to drive free movement as the sole and most important element in this process. However, it fails to recognise that all the nation states have very different social security systems. Many of those nations are finally beginning to say, with us, that this cannot be driven through like a coach and horses, because we control our social security systems. We have different ways of contributing and we use tax differently, so the argument we are making—I believe we will win it—is that we must be left to make those decisions. Obviously when people want to come and work, we want them to do that; the issue is when they come not to work. I think we have a strong position on changing that.
Jason McCartney (Colne Valley) (Con)
I welcome the significant fall in net migration, which is down a third since the general election. It is important to note that 30% of total migration was from European economic area nationals. We have already talked about Romanians and Bulgarians coming here under self-employed status. Does my right hon. Friend agree that a key issue is those coming here under self-employed status having top-up benefits?
Mr Duncan Smith
It has been a problem for some time—this is the point I am trying to make—that the open door comes through on the tax credit system, whereas self-employed people have been able to make that claim. This is the Big Issue seller question that has been going around—I am very positive about The Big Issue, by the way; this is just about who we pay to do that. The reality is that universal credit opens up an opportunity for us to tighten up those measures, and we will tighten up hugely on access through universal credit for legitimately self-employed people who are unable to declare any kind of income that we might recognise as real.
Stephen Mosley (City of Chester) (Con)
There is always a danger, when we are discussing a problem such as this, that we give the impression that all immigrants are coming to this country for our benefits system. Will my right hon. Friend confirm that the vast majority of eastern European immigrants into the UK are coming here to work and to contribute to our society, and that they should be welcomed?
Mr Duncan Smith
The reality is that most people who come here come here to work. They come here because they think the job prospects are greater; that is the real attraction. The truth is that, in the last 10 years, we simply did not know what was happening because the last Government refused to collect figures on those from other countries who were claiming benefit. We were therefore unable to answer that question. The first thing we did was to change that, and we now collect the data. We are now beginning to know what the facts are.
Mr David Nuttall (Bury North) (Con)
For the sake of taxpayers in my constituency, I sincerely hope that the Secretary of State succeeds in his negotiations to redefine the eligibility rules, but does he agree that if for some reason he inexplicably fails it will only encourage more people to vote to leave the European Union when we have the in/out referendum?
Mr Duncan Smith
My hon. Friend makes a very good point. The reality is that it is issues such as this that drive people away from the concept of the success of the European Union, if that is what they had believed. The more the Commission decides to interfere in areas such as this, the more damage it does to those who are pro-European. I personally have been quite sceptical about the process for a considerable period, but even I can recognise that this damages the concept of a European Union that works for all its members and that is about trade and co-operation and ensuring that the people who live in the European Union get benefits according to what they have contributed.
Christopher Pincher (Tamworth) (Con)
My constituents will be appalled to learn that the last Government failed to collect any data on the benefits being paid to migrants. Will my right hon. Friend give me a rough assessment of the cost to the Exchequer of the benefits being paid out, so that the British taxpayer can have some idea of the costs that were being imposed on them by the last Government?
Mr Duncan Smith
I am dying to do that. We want to know who has actually been claiming benefits, but we really do not know that from the figures. The last Government did not want to know. It was almost a deliberate policy not to have the figures available so that people would not know how many were coming in and claiming benefits. That will change. We are an open Government and we will publish the figures. We will be very clear and we will see the size of the problem that we have to resolve.
Mr Philip Hollobone (Kettering) (Con)
My constituents are absolutely furious that the UK’s borders are being flung open in this way. Do Her Majesty’s Government have any idea at all about how many Romanians and Bulgarians might be coming our way? Do they know and are not telling us, or have they not made an estimate? Have they contacted the Romanian and Bulgarian Governments to find out their estimates of the number of their citizens who will be coming to our shores?
Mr Duncan Smith
As I recall, the last Government put together a set of figures on Polish migration that were fundamentally wrong. The best way to deal with this is to make the systems much tighter and much better focused, so that we can deal with whatever numbers want to come here and ensure that they do not come here to claim benefits. I have said before and I say again that the last Government did not want to know how many of those people were claiming benefits. That is now changing.
Nick de Bois (Enfield North) (Con)
The Secretary of State is to be congratulated on his robust approach in trying to build a coalition of European partners to deal with this matter. How confident is he that he will be able to reach agreement before the end of the year? If such agreement is not forthcoming, will he press ahead robustly with whatever unilateral measures he can?
Mr Duncan Smith
We need to reach an agreement within that time scale, so I really am going to push the accelerator pedal down. I have already called for an urgent meeting with those other countries that have agreed to meet us to discuss the issue. We also need to talk to the Commission. The Minister of State, my hon. Friend the Member for Fareham (Mr Hoban), is hugely responsible for this area, and I will do whatever I can in an arbitrary manner to make sure that nothing else takes place.
Glyn Davies (Montgomeryshire) (Con)
We need a society in which immigration takes place at a level and on the conditions that the people of Britain, with their typical generosity, find acceptable. Does my right hon. Friend agree, however, that unless we develop a firm grip on immigration and pay benefits only according to the rules set by this Parliament, we will not achieve a settled society in Britain?
Mr Duncan Smith
The whole point is that there is a contract between those who pay their taxes and those who need to receive benefits. That is implicit in everything we do in regard to welfare payments in the UK, and it should be implicit in the way the European Commission looks at individual nation states and understands their relationships with their own citizens. That is the issue that I want to take forward. The Commission needs to think carefully about driving hard just on free movement, without recognising that individual countries have very different systems. We need the leeway to implement those systems as necessary while still observing free movement for those who want to become employed.
NHS Commissioning Board
(11 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
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Andy Burnham (Leigh) (Lab)
(Urgent Question): To ask the Secretary of State for Health if he will make a statement on comments by the deputy medical director of the NHS Commissioning Board on the regulations on procurement, patient choice and competition under section 75 of the Health and Social Care Act 2012.
The Minister of State, Department of Health (Norman Lamb)
I know that the right hon. Member for Leigh (Andy Burnham) and others have raised concerns about the effect of the regulations and I would like to address them in my response. First, however, I would like to make it absolutely clear that the regulations must be fully in line with the assurances given to the House during the passage of the Health and Social Care Bill. The former Secretary of State, my right hon. Friend the Member for South Cambridgeshire (Mr Lansley), said to clinical commissioning groups in 2012 that
“commissioners, not the Secretary of State and not the regulators, should decide when and how competition should be used to serve…patients interests”.
That must be the case. I made it clear in Health questions last week that we would review the regulations to ensure that that was the case and that they were not open to any misinterpretation.
The right hon. Member for Leigh himself gave guidance to primary care trusts which made this clear in 2010:
“Where there is only one capable provider for a particular bundle of services or the objective of the procurement is to secure services to meet an immediate interim clinical need there will be a case for Single Tender Action (i.e. uncontested procurement). By definition, an immediate or urgent scenario will be exceptional and likely to only arise on clinical safety grounds or for example, where existing services have been suspended following intervention by the Care Quality Commission.”
The next bit is very important.
“A decision to procure through single tender should always take account of the potential to secure better value by investing in a competitive process, as long as this is justified by the scale and importance of the opportunity (i.e. it has to be worth it).”
[Interruption.] Those were the comments of the right hon. Member for Leigh.
In the Government’s response to the Future Forum report, we committed to ensuring that the regulations would simply continue that approach. However, I fully recognise that the wording of the regulations has inadvertently created confusion and generated significant concerns about their effect. I have therefore listened to people’s concerns and my Department is acting quickly to improve the drafting so that there can be no doubt that the regulations go no further than the set of principles and rules that we inherited from the previous Labour Government. Following our commitment in response to the Future Forum report, the co-operation and competition panel has been transferred to Monitor. That will ensure consistency in the application of the rules.
Concerns have been raised that commissioners would need to tender all services. That is not our intention and we will amend the regulations to remove any doubt and to clarify that the position remains the same as at present and as stated in my right hon. Friend the former Secretary of State’s letter of 2012.
Concerns have been raised that Monitor would use the regulations to force commissioners to tender competitively. However, I recognise that the wording of the regulations has created uncertainty, so we will amend them to put this beyond doubt. Concerns have also been raised that competition would be allowed to trump integration and co-operation. The Future Forum recognised that competition and integration are not mutually exclusive. Competition, as the Government made clear during the passage of the Bill, can only be a means to improve services for patients—not an end in itself. What is important is what is in patients’ best interests. Where there is co-operation and integration, there would be nothing in the regulations to prevent this. Integration is a key tool that commissioners are under a duty to use to improve services for patients. We will amend the regulations to make that point absolutely clear.
Andy Burnham
In less than four weeks’ time, new GP commissioners take control, yet today there is complete confusion about the job they are being asked to do. Following comments by the deputy medical director of the NHS Commissioning Board and the statement we have just heard, coalition policy on competition in the NHS is in utter chaos. It beggars belief that almost three years after the White Paper introduced by the right hon. Member for South Cambridgeshire (Mr Lansley) and after all the upheaval he inflicted on the NHS, there is still no clarity on policy today. They are in this mess because the “doctors will decide” mantra was always a fig leaf for their true ideological purpose of driving competition and privatisation into the heart of the NHS.
We notice that the Secretary of State is not here today, but perhaps the Minister will remind him of the statement his predecessor made to GPs:
“I know many of you may have read that you will be forced to fragment services, or to put services out to tender. This is absolutely not the case.”
I am tempted to ask: if the aim is to revert to the position we held, why on earth bring forward a 300 page Bill to rewrite the entire legal basis of the national health service? The truth is that they have been found out trying to sneak through the back door privatisation proposals that the Minister’s predecessors were forced to rule out to save their discredited Bill. In that light, does the Minister accept that it will not be good enough to bring these proposals back with a few cosmetic changes? Will he give a categorical assurance that there will now be a fundamental rewrite to reflect to the letter commitments given to the House and to the professions?
More broadly, we now need urgent clarification, in a full and detailed statement, of what Government policy on competition actually is. Will the Minister today send the clearest message to clinicians that they will control whether or not to use competitive tenders, and will he fulfil the pledge by his leader to protect the NHS from the full glare of EU competition law? If the Government still want to argue for more private providers in the NHS, is he confident that this will not restrict whistleblowing as it has in other outsourced public services?
Will they also respond today to the research of the Nuffield Trust, which shows that more competition in the NHS has resulted in falling productivity? A quarter of a million people who signed the 38 Degrees petition have forced the Government into yet another humiliating U-turn, but there will be lingering distrust at the fact that they had the audacity even to attempt this. The simple truth is this: the British public have never given them permission to put the NHS up for sale. Until they acknowledge that, we will never tire of reminding them.
Norman Lamb
I sense that the right hon. Gentleman’s speech was written before he heard what I had to say. If he had listened to it, he would know that we recognise concerns about the drafting and whether it absolutely meets the commitments already made. We want to be certain that the commitments made in this place during the passage of the Bill are met. Indeed, when the Secretary of State wrote to clinical commissioning groups in 2012, he made it absolutely clear that those groups would not be forced to go out to tender. We will make sure that that is met. [Interruption.] If Opposition Members had simply listened to what I said, they would have avoided coming up with a set of questions that completely ignored my points.
The right hon. Gentleman referred to the question of quality of care. From my point of view, poor care should be condemned wherever it happens, and he needs to remember that the scandal of Mid Staffordshire hospital happened under his and his party’s watch. The poor quality of care uncovered in that NHS hospital is completely unacceptable—just as unacceptable as poor quality care from any private provider at all. Let us be clear about that.
There will be no privatisation of the NHS under this Government. Furthermore, there will be no special favours for the private sector, which were provided under the right hon. Gentleman’s Government. It was his Government who gave £250 million to private providers of independent sector treatment centres—whether or not they delivered care. There will be no special favours under this Government’s new rules. No clinical commissioning group will be forced into competitive tender. The rules will be absolutely clear, and we shall publish the amended regulations shortly.
Mr Stephen Dorrell (Charnwood) (Con)
Does my hon. Friend agree that the effect of his response to the urgent question this afternoon is to say that this Government are pursuing precisely the same policy as their predecessor on competition for the provision of NHS services? Does he further agree that that demonstrates that the cloud of rhetoric surrounding the passage of the Health and Social Care Act 2012 was so much hot air?
Norman Lamb
I absolutely agree with my right hon. Friend. There has been a lot of cant and hypocrisy in this debate. The guidance given by the previous Government to primary care trusts in 2010 makes absolutely clear their commitment to competition. That shows how crazy this debate has become. We will ensure that the debate is balanced and that the interest of the patient trumps everything else, as it should.
Lilian Greenwood (Nottingham South) (Lab)
My constituents’ view is absolutely clear: they do not want back-door privatisation of our national health service. I am pleased that the Minister is making a U-turn on these regulations, but given the chaos of recent days, how could anyone trust this Government with our NHS?
Norman Lamb
When the hon. Lady talks about back-door privatisation of the NHS, I am not sure of her view of the previous Government’s commitment to spend £250 million on independent sector treatment centres, whether or not they undertook any operations. I am not sure that she agreed with it, but that is what her Government did. There will be no privatisation of the NHS, and the rules we introduce will make it absolutely clear that the power lies with clinical commissioning groups to use the tools available to them—co-operation and integration, but also competition where it drives up standards, just as her Government recommended.
Chris Skidmore (Kingswood) (Con)
Last year, the right hon. Member for Leigh (Andy Burnham) claimed that there were less than 72 hours to save the NHS. Yesterday, when referring on his Twitter feed to the regulations, he claimed that there were two weeks to save the NHS. Does not the Minister believe that in fewer than 140 characters, the right hon. Gentleman has shredded any credibility that he might once have had? [Interruption.]
Helen Jones (Warrington North) (Lab)
Last week, the Leader of the House insisted that the regulations did not—
Mr Speaker
Order. I apologise for interrupting the hon. Lady, but there is too much noisy chuntering from both sides of the House, including from Members whom I have previously told to keep it to themselves. They cannot think that they are different or separate because they feel strongly about something—that way, we get to cacophony. Members should keep the chuntering to themselves, ask a question and listen to others with a degree of courtesy.
Helen Jones
Last week, during business questions, the Leader of the House said that the regulations would not introduce compulsory competitive tendering in the NHS; today the Minister has said that he will have to revise them in case they do. Is it not a fact that the Government actually do not have a clue about what they are doing? If the Minister wishes to disprove that, will he tell us exactly what changes he will make to the regulations—or will this just be like the pause in the Health and Social Care Bill, after which it carried on regardless?
Norman Lamb
The Leader of the House was absolutely correct in stating—[Interruption.] If the hon. Lady will listen to my answer, she may benefit from it. The Leader of the House made it absolutely clear in the House last week that the regulations would not introduce compulsory competitive tendering. We are amending them because there was legitimate and understandable concern about the impact of some of the provisions. We will make the position clear so that the policy intent of the Health and Social Care Act is implemented faithfully in these regulations.
John Pugh (Southport) (LD)
The Labour regulations are not perfect, and neither the regulations introduced by Labour nor those initially proposed by the coalition Government in section 75 will do in any sense. Do we not need regulations that embody the assurances given to peers and to GPs themselves during the passage of the Health and Social Care Bill, and not a charter for privatisation?
Norman Lamb
We will make absolutely sure that the amended regulations meet faithfully the commitments given in the Upper House during the passage of the Bill, and in the letter sent to clinical commissioning groups by the former Secretary of State following the legislation.
Mr Kevin Barron (Rother Valley) (Lab)
During the passage of the Health and Social Care Bill, the Government withdrew clauses that promoted competition and replaced them with clauses that would prevent anti-competitive behaviour. I never understood that at the time. Is it not the case that compulsory competitive tendering is the intention of the regulations and the intention of the original Act?
Norman Lamb
The right hon. Gentleman’s own Government had guidance in place precisely to address anti-competitive behaviour. Let me again reiterate that these regulations will not introduce compulsory competitive tendering. The amendments that we will table will make it absolutely clear that the power rests with clinical commissioning groups, and not with the Government, Monitor or anyone else.
Mr Crispin Blunt (Reigate) (Con)
My hon. Friend will have heard the charge of audacity from the shadow Health Secretary, whose expertise and qualities in this area should be acknowledged to place him in a league of his own. If there is still no clarity on the competitive position, which has not moved on from that of the last Administration, the responsibility lies precisely over there, on the Opposition Benches.
Norman Lamb
I take the point, but I again reiterate that the rules and guidelines for commissioners will remain exactly as they were under the last Government and under the right hon. Member for Leigh as Secretary of State.
Mr Gregory Campbell (East Londonderry) (DUP)
The Minister referred to the amending of regulations. Will he tell us first when that is likely to happen, and secondly how it will ensure that the cloud of uncertainty hanging over the NHS is dispelled?
Norman Lamb
The amended regulations will be published within days. I entirely agree with the hon. Gentleman that it is important for clinical commissioning groups to have absolute clarity, so that they can prepare for the date in April when they take responsibility.
Stephen Mosley (City of Chester) (Con)
What my constituents want is first-class health care, free at the point of delivery. Will the Minister confirm that the Government want that too?
Norman Lamb
I absolutely confirm that the patient’s interest must always trump everything else. Sometimes it is right to challenge existing services which are not providing a good enough service for patients, and we must encourage clinical commissioning groups to do that. Whether poor care is in the public or the private sector, it should always be condemned, and we should always put the interests of the patient first.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
If I understood the Minister correctly, he is withdrawing the regulations in order to rewrite them so that we are back where we were under the Labour Government. Does he now wish, with hindsight, that he had never started this?
Norman Lamb
Absolutely not. The legislation and the regulations will faithfully implement our policy intent, which is to put clinicians at the heart of decision making in the NHS and to make the interests of the patient paramount.
Paul Burstow (Sutton and Cheam) (LD)
I thank the Minister for his statement, and especially for confirming that the regulations will be rewritten to put it beyond doubt that the patient’s interest always trumps competition in these circumstances. Will he also confirm that any tendering arrangements currently operating in the NHS are operating under legislation introduced by the last Labour Government?
Norman Lamb
My right hon. Friend is right on all counts. As he says, the patient’s interest must trump everything else. One of the things that we will reinforce in the amended regulations is the paramount importance of integrated care. We legislated for that for the first time through the Health and Social Care Act, which the Care and Support Bill will reinforce and which, indeed, is reinforced by the mandate of the NHS. The Government’s whole intent is to drive a fundamental shift to integrated care for the benefit of the patient.
Mr Andy Slaughter (Hammersmith) (Lab)
The Minister has been put up by the Secretary of State to explain the Government’s incompetence, which he may be ideally placed to do. Will he tell us what will happen if the four accident and emergency units in west London close and replacement services are taken over by companies, such as Harmoni and Care UK, which are unfit to run them? That can still happen under his redraft. Will he confirm that members of clinical commissioning groups who have financial interests in the private providers that are bidding should not decide what should replace public services when they are inevitably handed over to the private sector?
Norman Lamb
The regulations as currently drafted are absolutely clear about the importance of avoiding the conflicts of interests that the hon. Gentleman has described.
Nick de Bois (Enfield North) (Con)
Does the Minister agree that the mantra that we are hearing from Opposition Members confirms that their party remains obsessed with process and means rather than outcomes for patients, which are what drive this party and our reforms?
Norman Lamb
Indeed. That is precisely the lesson to be learnt from Mid Staffordshire hospital and the Francis report. The last Administration and the top-down culture of targets lost sight of the importance of the quality of care for patients, but the current Government are absolutely intent on always putting the patient first, and that is what this legislation is about.
Kevin Brennan (Cardiff West) (Lab)
The Government seem to be saying, “There is nothing wrong with the regulations that we have laid, so we must amend them as a matter of urgency.” Will the Minister tell us when that decision was made, and why the Secretary of State has not come to make a statement to the House about it rather than the Minister’s having to come here as a result of an Opposition urgent question?
Norman Lamb
I made it clear during Health questions last week that I was anxious to ensure that the regulations faithfully implemented the commitments that had been given in the other place during the passage of the Health and Social Care Bill, and indeed we have worked since then to ensure that the regulations achieve that. I believe that we need to make it absolutely clear that clinical commissioning groups will not be forced into competitive tendering, which is why we are amending the regulations. That is entirely sensible and entirely rational.
Jason McCartney (Colne Valley) (Con)
Will the Minister take no lectures from the Labour party, which oversaw the downgrading of the maternity unit at Huddersfield royal infirmary, and will he reassure my constituents that patient care will always be put first in this universal health service, free at the point of delivery?
Norman Lamb
I congratulate my hon. Friend on getting an issue of local concern into his question. He is entirely right: I will take no lessons from the Opposition, given what happened when they were in government, and patients’ interests must indeed always come first.
Diana Johnson (Kingston upon Hull North) (Lab)
Will the Minister tell me which part of the NHS preferred provider status, which was introduced by the last Labour Government, his Government do not understand?
Norman Lamb
According to my recollection, at the last general election all three parties committed themselves to any willing provider. The degree of hypocrisy that we sometimes encounter beggars belief.
Andrew George (St Ives) (LD)
Because I had feared that the regulations as currently drafted would result in an NHS driven by profit rather than concern for patient care, I welcomed my hon. Friend’s statement. However, he said that he would base the future draft on the principles set out by the last Labour Government, who favoured the private sector over the NHS. Can he reassure me that the redrafted regulations will enable commissioners to encourage collaboration and the integration of health services, and that that will trump competition on many occasions?
Norman Lamb
I am grateful to my hon. Friend for that question. I should make it clear that we have enhanced the position that we inherited by absolutely reinforcing the importance of co-operation and integration for the first time—that was not part of any legislation under the previous Labour Government. Our Government are totally committed to legislating on and then enacting the importance of co-operation and integration, as he rightly says.
Derek Twigg (Halton) (Lab)
On 15 March 2011, the then Minister of State, the right hon. Member for Chelmsford (Mr Burns), said that in the NHS
“UK and EU competition laws will increasingly become applicable.”––[Official Report, Health and Social Care Public Bill Committee, 15 March 2011; c. 718.]
How can this Minister assure us that the amended regulations he intends to introduce will prevent a successful legal challenge from a private provider against a clinical commissioning group’s decision not to put out a service to tender?
Norman Lamb
The regulations will help substantially in ensuring that CCGs maintain control over the judgments they make in the interests of patients. European competition law existed as much under the previous Government as it does under this one, and these regulations will help to protect CCGs against those powers.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his statement. Will he assure us that competition will be at the core of what he is trying to achieve? Will the Government prioritise clinical outcomes, with targets to deliver and an increasing number of patients to be looked after?
Mr Speaker
We wish it to be heard. The hon. Member for Strangford (Jim Shannon) must always be heard when he is on his feet. Let us hear it.
Jim Shannon
Perhaps I should give a lesson in Northern Ireland-speak. Will the Minister assure us that competition will be at the core of what he is trying to achieve and that the Government will prioritise clinical outcomes, with targets to deliver and an increasing number of patients to be looked after?
Norman Lamb
Competition should only ever be used to enhance the interests of the patient and to improve patient care; it is not an end in itself, and that must always be the case. These regulations will ensure that that is the case and that other vital factors such as co-operation and integration must be taken into account by CCGs in making their judgments.
Alison McGovern (Wirral South) (Lab)
This top-down reorganisation has, from day one, been a chaotic waste of time, money and effort. Now that the Minister has made a U-turn, will he make things clear, so that I can tell all the professionals and patients in the Wirral what his policy is? Will he say when he will bring to this House a statement of what the Government’s policy is on competition in the NHS?
Norman Lamb
I repeat that we will be publishing amended regulations within days and that the Government’s reforms are about putting the clinician centre stage in decisions about how money is spent, rather than unaccountable bureaucrats, as happened in primary care trusts up and down the country. The reforms are also about ensuring that the patient’s interests and patient care are always uppermost in the minds of everyone making decisions about the use of money in the NHS.
Bill Esterson (Sefton Central) (Lab)
As my constituent Terry Eastham told me, the regulations, as they stand, make privatisation of the NHS swift and inevitable. The Minister says that he is confident that his changes will guarantee that private companies will not be able to challenge CCGs to demand full and open competition. Will he give that assurance now and explain how the changes he is proposing will make absolutely certain of that?
Norman Lamb
It is absolutely not the case that the regulations, as currently drafted, drive the privatisation of the NHS. As the hon. Gentleman will discover in the next few days, the amended regulations will make it abundantly clear that CCGs will be in the driving seat—the letter from the former Secretary of State made that clear back in 2012. They will take into account the importance of co-operation, integration and putting the patient’s interest first.
Barbara Keeley (Worsley and Eccles South) (Lab)
On competition and integration, my hon. Friend the Member for Walsall South (Valerie Vaz) and I spent some time this morning talking to academics from Sweden, who told us how competition and fragmentation were preventing them from moving ahead with integration. The Minister should be concerned about the integration of health care and social care, so will he address that point? We will certainly never make progress on integrating health care and social care if we move ahead with all this privatisation, which will lead to a lot more fragmentation. Leaving that aside, 70 of my constituents also think this is just the wrong way to go.
Norman Lamb
This Government will ensure that there is no unfair competition, such as existed under the previous Government, whereby private providers got handed guaranteed income on a plate, irrespective of whether or not they did the work. I am clear that nothing in our legislation will prevent a real drive towards integrated care, to which the hon. Lady and I share a commitment.
Valerie Vaz (Walsall South) (Lab)
Will the Minister say whether there was a mistake in the instructions given to parliamentary counsel in drafting these regulations? Will he also tell us which Minister signed them off?
Norman Lamb
This comes down to a question of the legal drafting and a legitimate concern that the regulations did not meet the policy objectives set out clearly in the Health and Social Care Act and during the course of the debates on it in Parliament. We simply want to ensure that that objective is faithfully met.
Alex Cunningham (Stockton North) (Lab)
Professor Steve Field, who chaired the NHS Future Forum and is now deputy medical director of the NHS Commissioning Board, has said that the Government must make it clear how the regulations are “consistent with the commitments” they gave him. He said that he was clear that there must be “no backtracking” by the Government on the commitments that they gave the NHS Future Forum. The Minister suggested that he will satisfy those demands, and the demands of commissioners and doctors across the country. Is he really guaranteeing to do that today?
Norman Lamb
I thank the hon. Gentleman for the question. I spoke directly to Steve Field about this yesterday and I am absolutely satisfied that the amended regulations will totally meet the commitments made during the passage of the Bill in the other place.
Army Basing Plan
(11 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Defence (Mr Philip Hammond)
With permission, Mr Speaker, I would like to make a statement on the future basing of the British Army. To assist right hon. and hon. Members in understanding the detail of the changes I shall announce and the effects on their constituencies, I have placed in the Libraries of both Houses, and on the Ministry of Defence website, documents setting them out. I understand that copies of the documents will, with your permission, Mr Speaker, be distributed in the Chamber during the course of this statement.
In 2010, we set out in the strategic defence and security review the configuration of forces that the UK would require to meet the future threats, and we committed to have completed the return of UK troops from Germany by 2020. Last summer, I announced to the House the structure of the Regular Army component of Future Force 2020. Today, I can announce the future pattern of basing of the Regular Army in the UK, so that our servicemen and women, and their families and the communities that host Army units, have clarity about where they will be based in the future and when moves are likely to occur.
As the House will recall, in July 2011 the then Defence Secretary set out our initial plans for the future of the MOD estate, on which we will accommodate, train and prepare our armed forces. Those plans have been significantly refined over the intervening 18 months and reflect the fully developed military advice on the optimum affordable basing lay-down to accommodate the Army in the future strategy. This announcement honours our commitment to bring all our troops home from Germany by 2020, with all but the 4,400 troops of 20 Brigade home by Christmas 2016. It supports the Army 2020 structure, the integrated reserves training model and the generation of the Army’s future military capability. It also delivers a £1.8 billion investment in the UK economy in infrastructure and accommodation, and annual savings of £240 million in reduced costs and in improved efficiency of training and maintenance operations, on top of the £100 million-plus annual saving generated by the previously announced moves from Germany.
The return of the British Army from Germany marks the end of an era and I want to put on record the huge debt of gratitude we owe to the German Government and the German people for the support, both moral and material, they have shown our armed forces over more than six decades.
In fact, that return has already begun. In 2010, 20,000 British service personnel were based in Germany, together with their dependants and civilian staff. Already that number of service personnel has been reduced to fewer than 16,000, with significant force elements having already relocated, such as Headquarters Allied Rapid Reaction Corps, which has moved to Innsworth, Gloucestershire. Planning for completion of the return is well advanced. We are on track to reduce our presence in Germany by more than 70% by 2015 against our SDSR target of 50%. The long-term retention of a small training presence in Germany, utilising NATO training facilities, is under active consideration, but we will be closing all major unit locations.
This is not just about rebasing the Army from Germany. It is about providing a basing plan for Army 2020 in the UK that will allow the Army to generate its military capability in the optimal way. As the plan has developed, two key principles have emerged to inform it. First, the armoured infantry brigades of the reaction force should coalesce around a single location. We have concluded that Salisbury plain training area is the only place in the country where we have the capability to carry out the complex and demanding training exercises that they need to conduct. Having all three brigades located in close proximity around the plain will enable them to train and fight more effectively and will present significant opportunities for efficiency in equipment support and people management. Secondly, the Army should retain a UK-wide footprint, maintaining the vital link to civil society, fostering closer links between reserve units and their partnered regular units and supporting nationwide recruitment and engagement.
Guided by those two principles, the Army has identified the lay-down that represents the best value for money in the utilisation of existing estate and the minimisation of running costs. The focus will be on increasing consolidation around seven centres: at Salisbury plain training area, where we will invest over £800 million; in the north-east of England, centred on Catterick; at Aldershot; around Edinburgh and Leuchars; at Colchester and Swanton Morley in the east of England; in the west midlands around Stafford and Donnington; and in the east midlands, focused on Cottesmore and North Luffenham, where £180 million will be invested. We will do all that while maintaining a regional presence in other parts of the country.
Consolidating around the seven centres will significantly reduce the need for moves, ending the culture of routine UK rotation and giving Army personnel and their families greater certainty about where they will live and work with real benefits in terms of increased stability, access to long-term spousal employment opportunities, continuity in schooling for Army children and the chance to set down roots and access the benefits of home ownership.
The announcement will maintain the broad pattern of Army activity in Scotland, Wales and Northern Ireland. With 45 Commando Royal Marines remaining in Arbroath for the foreseeable future, the measures announced today will see an increase of about 600-plus in total regular armed forces numbers north of the border against the July 2011 baseline, even as the armed forces reduce in size by about 17% overall. In both Wales and Northern Ireland, overall numbers will reduce by approximately 400.
The announcement sets out our firm plans for the lay-down of the British Army, subject of course to gaining the necessary planning, environmental and other regulatory approvals. They are underpinned by a capital investment from the defence budget of £1.8 billion, including £1 billion of investment in new living accommodation to provide 7,800 single living spaces and 1,900 new and refurbished units of family accommodation. The investment will provide a welcome stimulus to the UK construction industry and, taken together with the significant purchasing power currently going into the German economy that will be diverted to the UK, will help to create jobs across the regions and nations of the UK.
The Ministry of Defence plays a major role in the Government’s public land release programme and will be looking to release additional land and surplus service family accommodation where it is no longer needed. Under the plan, the armed forces will be leaving a number of locations. The disposal plans will be subject to further detailed work and will also be subject to the completion of the plans for the reserve estate in due course. However, I can confirm that we plan to dispose of Howe barracks in Canterbury, Claro barracks in Ripon and parts of Copthorne barracks in Shrewsbury. In Scotland, we will be disposing of Craigiehall barracks, as well as elements of Redford barracks and Forthside barracks in Stirling. Kirknewton will not now be developed as an Army base but Dreghorn will remain as one.
The MOD also intends to close Cawdor barracks at Brawdy in Wales, which is no longer fit for purpose, with 14 Signal Regiment relocating to St Athan, not before 2018, as part of a regional consolidation of the defence presence on that site that will also allow commercial development and job creation by the Welsh Assembly Government, with whom we are working collaboratively, in support of the enterprise zone.
The local communities in each of those areas have been hugely supportive of the military presence over many years. The loss of historic ties will be much regretted and, on behalf of the Army, I want to thank those communities for their generous hosting.
As part of our continued scrutiny of the central London estate, we will be pursuing options to vacate Hyde Park barracks and re-provide for the Household Cavalry Mounted Regiment elsewhere within central London, allowing for disposal of that prime development site, provided that the regiment’s requirements can be met and it proves value for money to do so.
Those disposals, and other planned disposals, will bring substantial receipts which have already been factored into the MOD’s future budgets and will significantly reduce the operating costs of the MOD estate.
I have focused on the future basing of the regular Army but I am conscious that many right hon. and hon. Members will also be interested in the reserves and in our plans for reserve basing, as well as the future basing plans for the other services, the training estate and logistics operations. My right hon. Friend the Minister for the Armed Forces will be making announcements shortly concerning other routine changes elsewhere in the MOD estate across the UK and I will update the House before the summer recess on the future basing plans for the reserves.
This announcement represents a costed and funded plan to bring our Army back from Germany, deliver the basing lay-down for Army 2020 and provide the accommodation our troops deserve, fulfilling our commitments to consolidate the Army estate and providing certainty to Army personnel and their families about where they will be based in the future. It is a plan that is driven by the Army’s requirement to generate military capability in the most effective and efficient way as it reconfigures for contingent operations based almost entirely in the UK. It represents a significant step forward towards the achievement of Future Force 2020 and delivers substantial year-on-year savings to defence in the future and a significant boost to the UK economy, and to the construction industry in particular, right now. I commend the statement to the House.
Mr Jim Murphy (East Renfrewshire) (Lab)
I thank the Secretary of State for providing advance sight of his statement earlier today. While the strategic defence review did not survive its first contact with world events, the assumptions within it did not survive contact with the Secretary of State. The country remembers that the Government were elected on a promise of a bigger Army. The SDSR promised five multi-role brigades and cut 7,000 troops. Army 2020 is based on a cut of 20,000 troops and promises seven infantry brigades.
In that context, we welcome a steady, costed withdrawal of UK troops from Germany. Today’s announcement will impact on Army deployability, our ability to meet planning assumptions, service families’ livelihoods and the integration of service personnel with local communities. That is why I want to ask some detailed questions of the Secretary of State about how to make these measures successful.
On Germany, the right hon. Gentleman says the total cost of returning troops from Germany is £1.8 billion. Will he spell out specifically where this money has been found and say whether any cuts to the MOD non-equipment budget are being made as a result? Undisclosed underspends cannot be the gift that keeps on giving for the Secretary of State, and all those in the military who have recently lost their jobs will want to know that today’s announcement has not been funded at their expense. Will he say how much is allocated to each of the RAF bases being converted to make them fit for the Army, and for each of them, when the conversion will be completed? The public will also want specifics on how the £240 million savings will be achieved and in which year they will begin to accrue.
It is vital there is a positive impact on the local communities to which our forces and their dependants will be returning. How many new homes for soldiers and families will be ready by 2016? It is hard to see this being achieved in the time frame set out. Given that MOD figures show there are 7,000 service children currently being educated in Germany, will the Secretary of State say what will happen to those whose new homes will not be built in time? There will be an expectation that the Secretary of State can today guarantee that no one returning will be forced to take on expensive private rented accommodation because the specified new accommodation is not ready.
It is essential that local services can provide for our military families. Will the Secretary of State say what assessment he has made about the local impact of returning military families specifically in the areas surrounding the seven permanent bases referred to today, and what discussions he has had with his counterparts in the Department of Health and the Department for Education, as well as the devolved Administrations? With the grant to local government falling by a third over the current spending review period, which Department will meet the additional costs to local authorities?
Can the Secretary of State confirm that he has had the requisite discussions with German authorities about these plans? What will the cost be of redundancy of the civilian force in Germany? Although there is much less strategic need for our forces to be based in Germany, it can still play an important role in providing training facilities. How does he envisage this function being supplemented if it is no longer available there?
With reference to lay-down, there will be real disappointment at closures across the UK today, from Canterbury, Ripon and Shrewsbury to Brawdy, where historic bonds are being broken. The Secretary of State says that his disposal plans will bring in substantial receipts, which have already been factored into future MOD budgets. After the Government’s 4G debacle, he will forgive the public if they wait for further details before taking that assertion at face value.
The armed forces remain crucial to Scotland’s future but today the Government have reneged on their promise. Although there is positive news about the return of the Royal Scots Dragoon Guards and the Royal Marines staying in Arbroath, a previous pledge of thousands more troops to Scotland has become a plan for just hundreds. This is a real blow to Scotland and will not be forgotten.
UK defence planning assumptions rely on doubling our number of reservists by 2018. Despite this, there is uncertainty over employer engagement, workplace protections and missed recruitment targets. It is disappointing that today we heard little of where reserve units will train or of the fate of existing units. The Army 2020 plan on which today’s announcement is based remains in jeopardy while these issues are unresolved.
In conclusion, UK troops have been stationed in Germany for almost 70 years and we support their return home, but this will, as I know the Secretary of State would expect, be matched by detailed scrutiny. So I hope he will be able to outline further the implications of today’s announcement for personnel and their families, as well as for local communities, which will, I am sure, give our returning troops a warm and patriotic welcome upon their return.
Mr Hammond
I hope the document that has been distributed will answer some of the right hon. Gentleman’s questions, particularly about providing the certainty that personnel and their families will want in terms of where they are going and when they are going to go there. I note that his references at the beginning of his remarks about multi-role brigades and the subsequent evolution of the Army force to match the resources available made no reference whatever to the legacy that we inherited from the previous Government, which has been one of the key drivers in our efforts to deal with the challenges ahead.
Let me try to deal with some of the right hon. Gentleman’s perfectly legitimate questions. He asked me about the £1.8 billion capital spend. Essentially, he sought assurance that this money had not been found at the expense of the budget for employing our forces. It is, of course, a capital budget quite separate from the resource departmental expenditure limit budgets of the Department and it is largely a budget that was in the Defence Infrastructure Organisation’s capital spend programme, supplemented by some of the capital underspend from last year, which we have been allowed to carry forward.
Mr Kevan Jones (North Durham) (Lab)
It will be taken away from Army housing.
Mr Hammond
I have just told the House that we are investing £1 billion in Army housing. That will be alongside the existing programme of refurbishment of Army housing, which will continue.
The right hon. Member for East Renfrewshire (Mr Murphy) asked me about the pattern of investment in RAF bases. There will be very substantial investment in both Leuchars and Cottesmore. I am happy to write to him with the precise estimated figures for both bases, but he will understand that this is subject to contractual negotiations as we develop the detailed plans for those individual bases.
The right hon. Gentleman asked when the £240 million annual savings start to accrue. They reach that full level by 2019 but they start to accrue immediately, within the next year, and they build up steadily to the 2019 figure. [Interruption.] The hon. Member for North Durham (Mr Jones) says they cannot. The savings start to accrue as soon as we start to close down infrastructure in Germany—[Interruption.] The hon. Gentleman has been in government. One would think he would understand the difference between a capital expenditure programme and the accrual of resource savings, which will begin as soon as we start drawing down infrastructure in Germany.
The right hon. Member for East Renfrewshire asked me quite legitimately about the phasing of the development of accommodation, the supporting local infrastructure and the timing of relocation. This, of course, has been a major driver of the programme that is set out in the document circulated. In most cases new accommodation will be provided before units relocate. In some cases, as he will see from the document, it will be necessary for a returning unit to locate temporarily in another facility while the ultimate destination is fully completed, with the infrastructure and the accommodation that it requires. He will notice as well that the most substantial move to the Salisbury plain—20th Armoured Brigade—is the last move to take place, in 2018-19. That reflects the fact that substantial infrastructure investment will be required—£800 million of MOD investment, together with investment by the Department for Communities and Local Government, the Department of Health and the Department for Education to provide the supporting local infrastructure.
The German authorities have been fully informed throughout the process. I spoke to my German counterpart yesterday. He expressed his regret at the decision but he is understanding of it. My right hon. Friend the Minister for the Armed Forces spoke this morning to the Minister-Presidents of the German Länder affected. The right hon. Gentleman asked about training in Germany. As I think I said, we are pursuing the option of taking up a very generous invitation by the German Government to continue using training estate in Germany to train with the Bundeswehr and other NATO allies. The current plan envisages about 100 personnel remaining in Germany as the core of a residual training presence.
Of course I accept that there will be disappointment in the towns and communities where there are to be base closures, but if we are to deliver the armed forces that this country needs within the budgets that are available to support them, we have to deliver that military capability efficiently, and isolated single bases do not allow us to do that. The lay-down that I have set out in these documents is the optimum value-for-money strategy that will allow the military to deliver the capability that we require.
In Scotland, it is indeed good news that the Royal Scots Dragoon Guards will go to Leuchars and that 45 Commando Royal Marines will remain at Arbroath. The right hon. Gentleman mentioned the reference to thousands of additional troops going to Scotland. That was when we were still talking of a 94,000-strong Army. The end result in dealing with the legacy that we inherited from the Labour party was an 82,000-strong Army, which is affordable and sustainable, and can be properly equipped and supported, unlike the forces that the previous Government fielded.
Finally, on the question of reserves, we will be publishing a White Paper shortly, and following that I will make a further statement to the House about the reserve estate.
Dr Liam Fox (North Somerset) (Con)
I congratulate my right hon. Friend on completing a difficult jigsaw puzzle that Labour was never able to manage, and ensuring that the Ministry of Defence spending is boosting economic activity in this country, not on the continent. Does he agree that the ability to spread this force footprint across the United Kingdom and the large sums involved, fatally undermines the case of the Scottish nationalists that Scotland would ever be better off trying to fund its own armed forces?
Mr Hammond
I do agree with my right hon. Friend, and we will no doubt hear in a moment from the representatives of the Scottish National party. I find their posturing on this slightly incredible when their agenda is about taking Scotland out of the United Kingdom, removing our Army, our Air Force, our Navy and our marines completely from Scottish soil.
Jenny Chapman (Darlington) (Lab)
My constituency of Darlington is very close to Catterick garrison and we are proud to help to accommodate and educate Army children in our town, but the right hon. Gentleman will understand that at times that can put pressure on local services. What specific discussions will he have with local authorities near the seven bases that he has referred to to try to make sure that these children are welcomed back from Germany in the way that we would want?
Mr Hammond
We have had discussions with colleagues from the Departments for Education and Communities and Local Government and the Department of Health, and we believe that on the time scales set out here, the additional infrastructure required, which is relatively modest with the exception of the Salisbury plain area that receives more than 4,000 additional troops, will be deliverable over the time scales set out in the document that I have circulated.
Sir Menzies Campbell (North East Fife) (LD)
You know, Mr Speaker, that my interest in these matters is directly related to the fate of Royal Air Force Leuchars in my constituency. You may also be interested to know that I almost need not have attended the statement since full details are contained in this morning’s edition of the Dundee Courier, a daily newspaper circulating in my constituency.
Let us make no mistake and let us be in no doubt, the decision to transfer Typhoons from Leuchars to Lossiemouth is a political decision, and I do not repent of my view that to base air defence aircraft away from centres of population and away from sensitive installations, such as nuclear power stations, is both operationally and strategically inept. I hope that we never have cause to regret doing so.
I assure my right hon. Friend that the local community of Leuchars will go out of its way to establish a warm and co-operative relationship with the Army. But does he also understand that the considerable disappointment there is that the numbers announced today are significantly less than those that were promised before? When will the Army be fully deployed at Leuchars, and will there be any gap between the departure of the Air Force and the arrival of the Army? Today, will he give us, and in particular my constituents, his guarantee that the damaging uncertainty of the last 20 months is now at an end?
Mr Speaker
There are many questions there for the Secretary of State. If he thinks, in attending to them, that he can throw any light upon what appears on the face of the observation of the right hon. and learned Gentleman to be a leak of Government policy, I am sure we shall all be immensely obliged to him.
Mr Hammond
It does indeed appear to be a leak in the Dundee Courier; I have its front page here. It is an inaccurate leak: the headline refers to a tank regiment. Of course, the Royal Scots Dragoon Guards is not a tank regiment.
I assure my right hon. and learned Friend that there will be no gap in the drawdown between RAF personnel and the build-up of Army personnel at Leuchars. This will take place in stages throughout 2015. By the end of 2015, the Army will be fully in place and the RAF will have vacated it.
My right hon. and learned Friend will also be interested to know that the plan provides for the runway at Leuchars to be maintained as an operational runway with a contingent of about 50 RAF personnel remaining on the base. This will operate as a diversionary runway for the Typhoon squadrons at Lossiemouth. That does mean that the air show will go ahead this year and that the runway will be there in future to make flying from Leuchars possible.
Hugh Bayley (York Central) (Lab)
How many military and civilian personnel will move to York as a result of a welcome decision to move Headquarters 1st Division to York? How many will be lost as a result of the decision to move 15 Brigade to Catterick? Will the Secretary of State clarify whether he means York Outer or York Central? For instance, he says that 2 Signal Regiment is currently based in York Outer; in fact it is based at Imphal barracks in York Central. I would like clarification on those points.
Mr Hammond
There are some detailed questions there. I hope that the retention of Imphal barracks in York puts to rest a concern that I know there has been in the city. There will be a marginal increase in the numbers of Army personnel at Imphal as a result of this statement. If the hon. Gentleman will allow me, I will check the figures on the other bases he mentioned in surrounding constituencies and drop him a note later this afternoon.
Mr James Gray (North Wiltshire) (Con)
I very much welcome the extra stability that the announcement will make in the lives of service personnel and their families. The people of Wiltshire will very much welcome the extra 4,000 soldiers to come there and the resulting investment in the infrastructure. Will the Secretary of State take this opportunity to reconfirm that the tri-service technical training base, which is due to move into RAF Lyneham by 2015, will go ahead as planned?
Mr Hammond
I can assure my hon. Friend that it is going ahead as planned. It is under way now. As I said in my statement, my right hon. Friend the Minister for the Armed Forces will be making an announcement in due course about other moves on the technical training estate.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I join the right hon. and learned Member for North East Fife (Sir Menzies Campbell) in saying that the Royal Electrical and Mechanical Engineers and the Royal Scots Dragoons will get a warm Fife welcome when they arrive, but may I press the Secretary of State to say why the decision has been taken not to proceed with MOD Caledonia?
Mr Hammond
As I think the hon. Gentleman is aware, Caledonia will remain as a naval facility without any Army presence. The Army plan has been looked at from the bottom up by the Army. The considerations are particularly around patterns of training activity, so that units that need to train together are located together. Because we are severely capital constrained, we have had to look at how to make the best use of the existing estate infrastructure, which in some cases has meant not going ahead with proposals that would have involved significant new capital investment. But this is an Army-designed, military-led plan that will allow us to generate our military capability at the best value to the taxpayer.
Julian Smith (Skipton and Ripon) (Con)
The closing of Claro barracks in Ripon is an extremely sad day for the city, which since around 1914 has provided to British troops a tremendous support and morale boost at all times, whether they are at conflict or at home. I pay particular tribute to the cathedral in Ripon and to the city council, which has given freedom of the city to a large number of our troops. Will my right hon. Friend meet me in the coming weeks to discuss how we can make the most of the military site in Ripon economically, and to see whether there are areas of military presence that we can retain there?
Mr Hammond
I am very happy to meet my hon. Friend. I should reassure him that despite the closure of Claro barracks, the adjacent defence training estate site, Deverell barracks, and the associated training areas in Laver Banks and Ripon park will not be affected by this announcement.
On the disposal of the Claro barracks site, as with all the sites that are wholly or partially for disposal, the Defence Infrastructure Organisation will engage with local stakeholders and local planning authorities and endeavour to dispose of them in a way that maximises the receipt to defence, but also protects the interests of the local community and maximises the beneficial economic impact of development on those sites.
Angus Robertson (Moray) (SNP)
I thank the Secretary of State for advance sight of his statement, welcome the return of troops from Germany and pay tribute to them for their decades of service there and to the German communities that hosted them, but the statement marks the breaking of a raft of defence promises in relation to Scotland. Will he clarify that the UK Government are not returning 6,500 to 7,000 troops from Germany to Scotland, as promised, that they are not building new barracks at Kirknewton, as promised, that they are not opening a new training area, as promised, and that they are not delivering the Army personnel levels promised for Leuchars, but that they are closing the Sterling headquarters of 51st Infantry Brigade and HQ Scotland? The Ministry of Defence has acknowledged that over the past decade there has been a 28% cut in the number of defence personnel in Scotland, compared with an 11% cut across the UK as a whole. The Army return to Scotland was supposed to offset the loss of the RAF and increase the defence footprint, so will the Secretary of State confirm that across the services, and taking into account the RAF changes, there will in fact be fewer personnel, not more, and certainly fewer than the 15,000 planned for an independent Scotland?
Mr Hammond
We have already discussed the story in The Courier today, “Tank regiment rolls into Leuchars base”, and the story in The Scotsman, “Scotland to keep Royal Marines base at Arbroath”. One would think that the hon. Gentleman might have something positive to say about that. When my right hon. Friend the Member for North Somerset (Dr Fox) made his statement in July 2011, the hon. Gentleman, as he might remember, accused the Government of planning to remove the Royal Marines from Scotland completely and close Fort George, neither of which has happened. It is true that the decision has been taken not to develop Kirknewton, but the balancing factor is the retention of Dreghorn as an Army barracks. The hon. Gentleman’s assertion about personnel numbers in Scotland is incorrect. My right hon. Friend the Member for North Somerset made his statement on 18 July 2011, and I have checked the numbers against that baseline. The total number of armed forces personnel in Scotland will be just over 600 higher than the baseline. I have also made a little calculation of the proportion of our armed forces personnel who will be based in Scotland, compared with the proportion of the population of the United Kingdom in Scotland. By my calculation, 8.39% of the UK population is in Scotland and 8.65% of our armed forces will be in Scotland by the end of this programme.
Penny Mordaunt (Portsmouth North) (Con)
I welcome the certainty that the statement will give regular Army personnel and their families. I hope that the Secretary of State will further enhance his reputation as the champion of good return on investment for the defence budget by confirming that any new building will be good quality and built to provide comfortable homes for decades to come. Historically that has not always been the case.
Mr Hammond
Of course, new build and refurbished accommodation will be to the highest grade 1 standard of military accommodation. With respect to my hon. Friend, I suspect that part of our problem with accommodation is that some of it was originally built to last rather too long, so we are struggling to refurbish and patch up old buildings, some of which are around 100 or 150 years old. Building new building to modern standards is the way forward to provide the kind of accommodation that our troops deserve and that our covenant promises them.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
This is indeed an historic announcement. The British troops and their families will be greatly missed by the German people. My understanding is that the original treaty required two years’ written notice of the intention to withdraw and a commitment to pay for any environmental clean-up. Has the Secretary of State given that written notice, and what calculation has he made of the environmental clean-up costs?
Mr Hammond
I cannot give the hon. Lady a definitive answer on the written notice, but my discussions with the German authorities make it clear that they have been aware of our intentions for many years. They are completely comfortable with what we are doing, although of course they regret the fact that we are leaving Germany. We will of course be responsible for remediation of the barrack sites being handed back to the German federal authorities and work is already ongoing with the German authorities on scoping for exactly what is required, which will be different according to the intended future use of the locations.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
Shrewsbury, the county town of Shropshire, has a long and proud tradition of hosting the Army, so this news comes as a great disappointment to me and to the people of the town. Will the Secretary of State meet me and the leader of the town council, who represents Copthorne, to discuss how the site, which is in the centre of town, can be used to bring maximum prosperity to the people of Shrewsbury? Will he assure me that everything will be done to ensure that there will be provision for Territorial Army reservists at Copthorne barracks?
Mr Hammond
We expect to release part of the Copthorne site for disposal. The final details will be announced once we have completed the reserves basing review. It is possible that part of the site will be required for the Territorial Army’s reserve estate. As with all sites for disposal, the Defence Infrastructure Organisation will engage with local stakeholders. I will be happy to meet my hon. Friend and the leader of his local authority. It is in our interests, as well as those of the local communities, to ensure there is an appropriate future use for the bases that are closing in order to maximise local prosperity and jobs.
Sarah Champion (Rotherham) (Lab)
Will the Secretary of State clarify whether the move from Germany represents a shift in strategy for the UK’s international footprint? If so, what are the implications for the UK personnel based in Cyprus and Northern Ireland?
Mr Hammond
None whatsoever is the simple answer. The withdrawal of our forces from Germany represents the logical conclusion of the ending of the cold war some 20-odd years ago. Keeping a large standing force in Germany is expensive and no longer serves its original strategic purposes. As our Army becomes smaller, the diseconomies of scale of having two separate centres for armoured vehicle training, for example, and consequently two separate centres for armoured vehicle maintenance, become unsupportable. This is a logical final move following the conclusion of the cold war era.
Mr Julian Brazier (Canterbury) (Con)
The closing of Howe barracks is clearly a blow to the local community, as the 5th Battalion the Royal Regiment of Scotland made a huge contribution to the community, and indeed a number of its members have given life and limb. Nevertheless, the logic of my right hon. Friend’s announcement is clear. In looking to part 2 of his statement, which will be made before the summer recess, may I urge him to consider two things? First, it is very important that the TA is based where it has historically recruited and where it can recruit and that that is not distorted by pairing arrangements with regular units, important though they may be. Secondly, it is critical that we keep our training areas going, particularly the smaller ones, because otherwise we will find that the new model will become unviable.
Mr Hammond
First, today’s announcement says nothing about the training estate. If announcements about the training estate need to be made, my right hon. Friend the Minister for the Armed Forces will make them. I recognise the tension my hon. Friend outlines between the need to have reserve accommodation in the areas where we recruit and the need to enable joint training for regulars and reserves, which is at the heart of our new model for the reserve forces. I can assure him that resolving that tension is at the core of the work going on and will inform the reserve basing review, which I will announce to the House before the summer recess.
Dr William McCrea (South Antrim) (DUP)
Northern Ireland has a long history of providing our Army with a lot of recruits. Will the Secretary of State reconsider the reduction of approximately 400 in the overall number of armed personnel in Northern Ireland proposed in the announcement, and recognise Northern Ireland as a part of the consolidation process? Army personnel and their families have found Northern Ireland a great place in which to live and educate their children. We have a lot of capacity, and at a time of financial restraint it is surely wise to use that.
Mr Hammond
I am grateful to the hon. Gentleman for his comments. He will recognise that part of the reductions in the 2020 numbers for armed forces personnel in all four countries of the Union results from the civilianisation of the search and rescue service. When we talk about reductions of 400 personnel in Wales and Northern Ireland, we must recognise that a significant proportion of that number is represented by the transfer of search and rescue services to a civilian contractor.
Sir Bob Russell (Colchester) (LD)
Clearly, I welcome the inclusion of Colchester as one of the seven centres where the Army is to be consolidated. The Secretary of State refers to investing £1 billion in new living accommodation, but the refurbishment of the existing houses has simultaneously been halted. Will he lift that moratorium?
Mr Hammond
Some additional money has been provided by the Chancellor in, I think, the last Budget, and a refurbishment programme is continuing with that finance. The £1 billion is in addition to the baseline programme of Defence Infrastructure Organisation maintenance and upgrading, which has a two-year pause partly ameliorated by the Chancellor’s additional contribution. Those two programmes will run in parallel.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Will the Secretary of State confirm that of the 165 Army units listed in the basing review, only one will be located in Wales? How much of the £1.8 billion MOD relocation fund will be spent in Wales?
Mr Hammond
I do not think that is right; I am conferring with my right hon. Friend the Minister for the Armed Forces. I am happy to write to the hon. Gentleman to confirm to him, as set out in the document, exactly what the lay-down will be in Wales after the completion of this move.
Dr Julian Lewis (New Forest East) (Con)
May I welcome the Defence Secretary’s recent statement to the Treasury that it should stop basing its tanks on the MOD lawn? May I congratulate him on an entry in the basing plan that seems to suggest that Marchwood military port in New Forest East will continue as the military port for the Army for the indefinite future?
Mr Hammond
I would not want to encourage my hon. Friend to draw that conclusion. Marchwood military port is scheduled for disposal, and—this is not part of this announcement, of course—it may well still be used by the Army but under the ownership of a civilian contractor.
Stewart Hosie (Dundee East) (SNP)
The Secretary of State said that the consolidation of the Army bases in Scotland would be around Leuchars and Edinburgh. He also made the welcome announcement that 45 Commando would remain in Arbroath, presumably at RM Condor. He then went on to say that the decisions on the training estate would be announced by the Armed Forces Minister later. May I urge him to ensure that those decisions are taken logically, and gently remind him that the excellent base and range at Barry Buddon in my constituency sits between Leuchars and Condor and ought to remain a very valuable part of the training estate in future?
Mr Hammond
I welcome the hon. Gentleman’s contribution to this debate. I have to say it is a delight to be in a Parliament where Members are arguing for military establishments in their constituencies. Many of my colleagues in NATO and EU countries do not enjoy that same level of parliamentary and public support for the armed forces. I am grateful to all Members of the House for that.
Mr Ben Wallace (Wyre and Preston North) (Con)
I welcome my right hon. Friend’s announcement that once again, Fulwood barracks will be home to a regular unit as the site of 3 Medical Regiment. These new units will need not only housing and barracks but training areas. Is my right hon. Friend looking for further training areas on top of the existing military estate?
Mr Hammond
We do not expect, in overall terms, to be looking for additional training areas. Clearly, the Army and the armed forces are getting smaller, and one would expect us to be consolidating training rather than expanding it. I would therefore not encourage my hon. Friend to think in terms of expansion of training areas.
Sammy Wilson (East Antrim) (DUP)
I am sure the Minister appreciates that the countries representing the fringe of the United Kingdom will feel they have been somewhat abandoned in this announcement. May I ask him about the cost of all this? Given that, as a result of the legacy of Operation Banner in Northern Ireland, there has been substantial investment by the military, especially in family housing and so on, why has he turned his back on some of the investment that is already available in Northern Ireland and not decided to relocate some of the units at Palace barracks or Thiepval barracks?
Mr Hammond
The hon. Gentleman is right that there is some vacant accommodation at Thiepval, and the Army looked very carefully at the possibility of further location at Lisburn. However, the equation is complex. It is about not only utilising existing estate but the operational cost of having troops on that estate—the cost of getting them to the training areas where they need to operate. Overall, the value for money case points to the solution I have set out, even though that means that some vacant accommodation will remain at Thiepval.
Mike Crockart (Edinburgh West) (LD)
In July 2011 I described the plans announced for the Edinburgh estate as “historical vandalism”, so I welcome today’s partial retreat, while still being saddened by the continued closure of Craigiehall in my constituency. Will my right hon. Friend say more about the help to be given to the communities and individuals affected by closures, such as the 100 staff at Craigiehall? Will he now commit to giving proper answers to the 82 parliamentary questions I have asked over the past 20 months to try to see whether this new plan works any better than the last one?
Mr Hammond
I hope the hon. Gentleman is not suggesting that he has 82 unanswered parliamentary questions; if so, I would be extremely interested to hear about it. The closure of Craigiehall results in a reduction of 27 military personnel on the site but, as he rightly says, there will also be some civilians there. As of today, we will engage with the trade unions in the usual way to talk about how we manage the impact of these closures on civilian staff, and we will of course do everything we can to minimise the effects.
John Glen (Salisbury) (Con)
I warmly welcome the Secretary of State’s announcement of £800 million of investment in and around Salisbury plain, which will also be welcomed by my hon. Friend the Member for Devizes (Claire Perry). Will he set out the profile of the spending of that £800 million and assure my constituents and the people of south Wiltshire that there will be a significant dividend in extra civilian jobs over the coming years?
Mr Hammond
The expansion of the military facilities on and around Salisbury plain, and the additional military numbers to be based there, certainly implies an increase in civilian employment as a consequence. I cannot give my hon. Friend an exact profile of the investment in Salisbury at the moment, but I can tell him that the move of 20 Armoured Brigade will take place towards the back end of the programme. That reflects the fact that there is a very big investment programme to be completed. Partly for technical and planning reasons and partly for financing reasons, it will be somewhat slower to get under way than some of the smaller investments we are making elsewhere. It will therefore be towards the second half of the programme that he sees that investment going into the area.
Mr Crispin Blunt (Reigate) (Con)
My right hon. Friend will understand that if, like me, one was born in a British military hospital in Germany, lived there as a child, and then served there as an adult in the British Army of the Rhine, the importance of this statement, certainly in personal terms, can hardly be overestimated. Charting as it does the plan for ending the contribution of the British Army of the Rhine, it is a very profound thing that he has brought to the House today.
May I ask the Secretary of State two things? First, will he ensure that the arrangements made with the German towns that have played host to the British Army for so long are kept under close ministerial oversight and that proper compliments are paid to them? Secondly, and substantively, will he and my right hon. Friend the Minister for the Armed Forces make sure that the plans for the necessary, very substantial investment around the Salisbury area are executed to a scale and a standard that we will be able to look back on with pride in decades to come, rather than future Administrations having to put right a failure of investment over the next few years?
Mr Hammond
Let me deal with the last point first. I am clear that the accommodation we build and the technical facilities we construct must be of a high quality and fit for purpose. I do not, however, intend this £1.8 billion to form a cornucopia for architects.
On the question of Germany, my hon. Friend is absolutely right. We need to plan carefully how we end the relationship with the many German towns that have hosted the British Army. The Army in Germany is very much on the front foot on this. We are aware of the significant impact, particularly in the Bergen-Hohne area, which, by German standards, is relatively less well off. We are looking, where appropriate, at what can be left behind as a physical memorial to the British Army presence in Germany. A series of events will be organised with local communities, and Ministers and senior military personnel will expect to attend them and provide a fitting tribute to the support the German people have given us.
James Morris (Halesowen and Rowley Regis) (Con)
I welcome the Secretary of State’s statement. Will he say a little more about the training implications for British forces coming from Germany, with particular regard to his reference to potentially retaining training facilities in Germany? What sort of time scale does he have in mind for the establishment of training facilities?
Mr Hammond
It is not a question of us retaining training facilities. We definitely will not retain British-run training facilities. However, the Bundeswehr operates NATO training facilities in Germany and we have been offered the use of them. One of the challenges the Army high command faces as part of this process, with the end of our combat operations in Afghanistan, is how to provide a suitably stimulating environment for young recruits coming into the Army. It is clear to us that an element of overseas training has to be part of that equation. We have overseas training facilities in Kenya, Cyprus and Canada and, as I discovered last week, superb Arctic training facilities in Norway, but over the coming months we will consider whether to take up the offer to use the NATO facilities in Germany.
Guy Opperman (Hexham) (Con)
People in Northumberland will be delighted that our long campaign to retain Albemarle barracks has been successful, for which I thank the Secretary of State. We will welcome the 3rd Regiment Royal Horse Artillery as much as we have supported the 39th Regiment Royal Artillery. I visited Albemarle again only three weeks ago. Will the Secretary of State meet me again to ensure that the present troops have the broadband, local transport and mobile facilities they need and that future, post-2015 troops will have the facilities they should enjoy as well?
Mr Hammond
I am sure that my right hon. Friend the Minister for the Armed Forces, who has responsibility for such matters, will be very happy to meet my hon. Friend to talk about those issues.
Mr John Baron (Basildon and Billericay) (Con)
Having served in Germany twice, I know that this is an important announcement. In welcoming the basing plan, I suggest to the Secretary of State that its success will be contingent in part on the ability of 30,000 royal reservists to plug the gap left by the loss of 20,000 regular troops. Given that some of us have concerns about the cost and recruitment assumptions underlying the reservist plan, is it the Secretary of State’s intention to publish or keep the House regularly updated on the costs of implementing it?
Mr Hammond
That is slightly off the beam of the regular Army basing announcement. It is certainly my intention, once the recruiting campaign for reserves gets under way this year, to publish routinely—I think quarterly would be most appropriate—the recruiting data for the reserves. My hon. Friend is right that success in delivering our reserves programme is a crucial part of the Army 2020 plan. I will reflect on his suggestion that the cost of the reserve programme should be published, although I am not so sure it will be that easy to identify and isolate it.
George Freeman (Mid Norfolk) (Con)
I warmly welcome the announcement and congratulate the Secretary of State on the quiet competence he and his team have shown in putting it together, which is in stark contrast to the disgraceful financial planning we inherited from the Labour party. I particularly welcome the announcement that Swanton Morley in my constituency will be the home of the Queen’s Dragoon Guards, whom we will welcome as we did the Light Dragoons, and one of the seven consolidated centres. For some strange reason, that did not appear in the written statement, so will the Secretary of State confirm that I have understood him correctly?
Mr Hammond
I can indeed confirm that the 1st Battalion the Queen’s Dragoon Guards will be going to Swanton Morley and that Swanton Morley, together with Colchester, will form one of the seven hubs.
Alun Cairns (Vale of Glamorgan) (Con)
I thank the Secretary of State for the certainty and security he has given to the St Athan site. Bringing the Royal Signals to St Athan is welcome news, because the community has been on something of a rollercoaster ride in recent years. I also pay tribute to the Armed Forces Minister for the interest he showed when he met community leaders last year and said he would do everything possible. How many armed forces personnel will bringing the Royal Signals to St Athan attract to the site, and how much capital investment is needed?
Mr Hammond
The investment at St Athan will be in excess of £50 million. I cannot give my hon. Friend a more precise figure because of commercial issues relating to negotiations and contracts. The moves I have announced today will bring some 560 additional personnel to the site, taking the total liability on it to about 1,250. I say to my hon. Friend, who has been an ardent campaigner on this issue, that the consolidation of 14 Signal Regiment on the St Athan site represents a very important step in resolving the site’s future. The work we have done with the Welsh Assembly Government sets out a very good route to securing the site in the future, both for military use and for civilian development
Jeremy Lefroy (Stafford) (Con)
I thank my right hon. Friend for his statement. The people of Stafford will warmly welcome the two additional Signals Regiments to be based at MOD Stafford from 2015. Will he assure me that the construction of housing and creation of school places can now go ahead without delay?
Mr Hammond
Yes, I can assure my hon. Friend that the necessary accommodation will be constructed in time for the planned redeployment to Stafford.
Jason McCartney (Colne Valley) (Con)
Having been brought up on RAF bases at home and abroad, including RAF Wildenrath and RAF Rheindahlen, I welcome the certainty that today’s statement brings for forces families. The 1st Battalion of my locally recruited regiment, the Yorkshire Regiment, will remain in Warminster, while the 2nd Battalion will relocate from Münster to Cyprus. Will my right hon. Friend confirm that there will be investment in married quarter and single living accommodation overseas in Cyprus as well as at home?
Mr Hammond
The single living and married quarter accommodation in Cyprus is of a very high quality. My hon. Friend may have been there and may know that substantial investment has been made recently in new single living accommodation blocks, so I am not sure that any further investment is planned to accommodate this rotational battalion at the Cyprus garrison.
Richard Drax (South Dorset) (Con)
May I suggest that the pressure on realistic training facilities overseas will increase as the demand for training in a smaller area in the United Kingdom also increases? Will the Secretary of State reassure me and Her Majesty’s armed forces that there will be no cutbacks on training, particularly overseas, including multi-arms training and live-fire training, so that our armed forces can be given the most realistic training possible in a suitable environment?
Mr Hammond
When billions of pounds are spent annually on equipment and manpower, we are conscious of the importance of ensuring that we hone that equipment and manpower by exercising and training it. It was unfortunate that the previous Government had to cut in-year operational activity in order to balance the books. I hope the measures we have taken and those I have announced today mean that we will never get into that position.
New Member
Mid Staffordshire NHS Foundation Trust
Jeremy Lefroy (Stafford) (Con)
I seek leave to call for a debate on a specific and important matter that I believe should have urgent consideration: the appointment by Monitor of a trust special administrator for the Mid Staffordshire NHS Foundation Trust and the proposed changes to hospital services in Stafford and Cannock. There are four reasons why such a debate is vital.
First, this is the first such appointment to a foundation trust under the Health and Social Care Act 2012. Given the seriousness of the decisions, I urge Monitor to ensure that there is the longest possible period of consultation and that the trust special administrator has the option to consider proposals other than those that have been set out, none of which are acceptable to me or my constituents. I welcome the reassurance that the administrator’s priority is to deliver high-quality services to patients.
Secondly, although some of the reasons for the administration are particular to Mid Staffordshire, the most important reasons are not. The pressure being placed on mid-sized and even large acute trusts by the squeezing of the emergency and acute tariffs since 2009 is huge. Mid Staffs, which had £21 million of extra funding injected into it last year, may be the first trust this has happened to, but if the squeeze continues, it may be the first of many. The House urgently needs the opportunity to debate NHS tariffs for emergency and acute care, the demand for which is rising annually.
Thirdly, the proposed changes to hospital services in the area served by Mid Staffordshire, including Cannock Chase, Stone and south Staffordshire, are not acceptable. They will increase health inequalities, contrary to section 4 of the Health and Social Care Act 2012, by reducing access, especially for those on low incomes and those without access to private transport. The changes will put tens of thousands of my constituents much further away from emergency, acute and maternity services.
Finally, the impact of some of the changes will be felt much further afield. The surrounding hospitals are already operating at or near capacity. The idea that they can take on large numbers of additional patients without it damaging the services for their local populations is highly questionable.
I have always accepted that there need to be changes and that the trust in its present form needs to alter. However, the current proposals, which differ from those made by several reports over the past three years by Professor Sir George Alberti and others, go much too far. The services provided by the trust have improved considerably in the past three years. I urge the people of Stafford, Cannock and the surrounding areas to make full use of them to show the administrator just how indispensable they are.
Mr Speaker
The hon. Gentleman asks leave to propose a debate on a specific and important matter that should have urgent consideration: namely, the proposed appointment of a special administrator for the Mid Staffordshire NHS Foundation Trust. I have listened carefully to his application and conclude that the matter does not, on this occasion, meet the criteria of Standing Order No. 24. I thank him for his contribution.
Points of Order
Angus Robertson (Moray) (SNP)
On a point of order, Mr Speaker. Following a point of order yesterday about the basing review, you told me that ministerial statements of public policy should be made first in the House and asked that if I had compelling evidence of briefing, I should bring it forward. I forwarded to your office this morning four examples of newspapers that had been briefed. That was illustrated by the right hon. and learned Member for North East Fife (Sir Menzies Campbell) in the preceding statement. Given the blatant advanced briefing by the Ministry of Defence about the statement, what are you able to do?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order. I have not yet had the opportunity to study the material in question, for reasons that will be apparent to all. I shall, of course, do so and will revert to him if it proves necessary.
Mr William Cash (Stone) (Con)
On a point of order, Mr Speaker. Further to the rejection of the proposal put forward by my hon. Friend the Member for Stafford (Jeremy Lefroy), there is an important question relating to the Francis report that I have raised repeatedly with the Leader of the House. An urgent debate is needed. If a debate cannot be granted in respect of Mid Staffordshire and Monitor, one is certainly required in the context of the Francis report as a matter of urgency on the Floor of the House and in Government time. Would you agree?
Mr Speaker
I am grateful to the hon. Gentleman. We appreciate his display of a sense of humour in these circumstances. I will say two things to him. First, strictly speaking, points of order do not arise pursuant to refused Standing Order No. 24 applications. I was willing to hear him, as who could be denied that particular privilege? He made his point with his usual force and eloquence, and it will doubtless have been heard very clearly by those on the Treasury Bench. The hon. Gentleman will have been in the House for 29 years in June, so he knows that there are many opportunities to pursue matters; there is rarely just one opportunity. He is as persistent a woodpecker as the hon. Member for New Forest East (Dr Lewis), who also feels impelled to raise a point of order.
Dr Julian Lewis (New Forest East) (Con)
On a point of order, Mr Speaker. On a different subject, I am sure that you will have noticed the unprecedented number of Liberal Democrat right hon. and hon. Members who suddenly appeared in the Chamber, as if by magic, just before the swearing in of the new Member, only to evaporate just as rapidly so that normal service could be resumed as soon as possible. Is there any way within the rules of order that I can place that remarkable phenomenon on the record for the benefit of history?
Mr Speaker
No, but the hon. Gentleman has already done so. If he is going to raise an obviously bogus point of order, he should at least make the effort to contrive an air of solemnity, rather than looking so ostentatiously cheeky.
Property Blight Compensation
Mrs Caroline Spelman (Meriden) (Con)
I beg to move,
That leave be given to bring in a Bill to require the Secretary of State to amend legislation to allow for noise contours to be used as a measure of property blight caused by national infrastructure projects; and for connected purposes.
Having represented a constituency at the heart of the midlands motorway network for almost 16 years, I have seen the impact of successive efforts to improve the national transport infrastructure, often with harsh consequences for local residents. Early in my tenure, I visited a family whose home was just beyond the threshold for compensation on the hard shoulder of the M42, despite the fact that the motorway noise blighted their property as much as their next-door neighbours who got compensation. The M42 has vastly exceeded its intended capacity and the hard shoulder is now used for active traffic management, so the property would now be eligible on simple metreage.
A few years later, the White Paper on aviation proposed a second runway at Birmingham airport, which came as a bolt from the blue for local residents. Immediately, they had difficulty selling their homes, yet no statutory compensation was available.
The airport came up with a proposed voluntary compensation scheme based on noise contours rather than straight metreage from the runway, which gained broad public support. The airport maps the noise contour of every flight, so there is a strong scientific base for estimating noise nuisance and taking account of the prevailing winds. Most recently, the proposal of HS2 has brought a new blight to villages and a council estate in my constituency. Once again, statutory blight laws mean that compensation will not be paid until one year after HS2 opens in 2026, except on the grounds of hardship, which are, of course, discretionary. That adds yet more uncertainty. Although blight is often most severe when uncertainty is at its highest, and when HS2 is built the impact on properties will probably be much less than feared, the blight is now.
Large infrastructure schemes can take a huge amount of time to progress from the initial announcement to completion of the scheme. During that process, the scheme will often change as more information becomes available, although home owners or landowners do not know that at the time. As the Country Land and Business Association points out, farmers and landowners are prevented from making important business decisions, sometimes for a whole generation. That impacts not only on those individuals, but on their suppliers and markets.
Statutory blight and compulsory purchase provisions do not encourage an acquiring authority to conclude compensation negotiations quickly. Although provisions for paying interest on outstanding claims are available, the statutory rate is 0% and the landowner foots the loss at a cost of 5% per annum. Some claims will remain outstanding for 10 years. For example, some landowners have still not been compensated for the building of the M6 toll road.
The Land Compensation Act 1973 makes provision for compensation for the depreciation of property values caused by physical effects such as noise, but such compensation is available only a year after the infrastructure is built. The blight is now, and current metreage-based compensation does not help those who may feel the same physical effects of the scheme as their neighbour, but are a few extra metres away.
I believe compensation should be paid in advance of the railway opening, in anticipation of the nuisance it will cause as modelled by noise contours. If accurate scientific information about the physical effects of the line on properties was made available, it would ensure that residents receive proper compensation, reduce the level of uncertainty about the effect of the line, and therefore reduce blight. We must be clearer about noise data sooner and clear up the fear that causes generalised blight.
The HS2 voluntary compensation scheme is an example of how the rigidity of the metreage approach does not address blight. Homes within 60 metres of the track are safeguarded by compulsory purchase provisions, and those within 120 metres can be purchased on a voluntary basis. However, the eligibility criteria ignore the prevailing wind direction or contours in the land that shield or aggravate noise. My Bill is designed to make the eligibility for compensation fairer and more scientifically based, and create parity between roads, rail and airports. Such a proposal does not detract from the property bond proposed by other pressure groups seeking better terms of compensation for those affected. I am aware of the broad base of support for the property bond compensation scheme that would tackle the root cause of property—the loss in property market confidence.
To give one example from many, my constituents, Mr and Mrs Hickin of Berkswell, live about 500 metres north of the HS2 line past their village. Their interest-only mortgage must be repaid in 2015 and they had planned to downsize to a smaller property and pay off the debt. Despite being on the market for nearly three years and reducing the price of their home by £90,000, they have received no offers and live with the worry that they will not be able to meet their financial obligations. Other constituents whose properties have been on the market for several years have not received any offers, even when dramatically reducing the price. That is not unusual among affected constituencies such as those of my neighbour, my hon. Friend the Member for Kenilworth and Southam (Jeremy Wright) and my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan). On average, properties have lost 20% of their value. The exceptional hardship scheme suffers from a lack of credibility. The Government will be consulting on phase 2 of that, so why not bring it forward and consult on amendments to phase 1?
When Birmingham airport proposed its voluntary compensation scheme, it was designed to support the sale of property within a defined boundary of the noise contour with a bond. The level of noise recognised by the aviation industry to trigger voluntary compensation is 66 dB. The boundary of eligibility was drawn with sensitivity around semi-detached properties where one property might be eligible but the other not, so as to avoid the kind of rigidity I experienced with motorway compensation. The bond was based on an independent valuation of the difference between the base price before the announcement and the reduced price thereafter. An independent commissioner was appointed to review any complaints that compensation had been incorrectly calculated and applied.
I believe that model offers a more scientific basis for eligibility for property bonds and would allow many people now experiencing blight from major national infrastructure projects to receive fair recognition and move on with their lives. Essentially, it would bring forward part 1 payments under the Land Compensation Act.
In conclusion, blight laws must be reviewed and changed to help those who, through no fault of their own, are blighted by decisions made in Westminster. In the long term, HS2 is vital for this country’s economic progression and for the west midlands economy in particular, but we should not balance the books on the backs of home owners and landowners whose property may reduce in value. Adding flexibility to the way blight is measured, removing the strict metreage classification in the current compensation scheme, and recognising the loss in value through a property bond would be a welcome reform for many.
Question put and agreed to.
Ordered,
That Mrs Caroline Spelman, Mr Graham Brady, Andrea Leadsom, Mrs Cheryl Gillan, Dan Byles and Mrs Anne Main present the Bill.
Mrs Caroline Spelman accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 26 April, and to be printed (Bill 144)
Estimates Day
Ministry of justice
Budget and Structure of the Ministry of Justice
(11 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Today is an estimates day and the presence of pound signs and a lot of noughts on the Order Paper tends to frighten Members away, when really it ought to draw them in to see what on earth the Government are doing with very large amounts of taxpayers’ money. Repeated attempts by zealous reformers to make Parliament pay more attention to expenditure have still not, I think, achieved the degree of success that many of us would like. I am pleased to have the opportunity to open this debate on the Ministry of Justice’s supplementary estimate for 2012-13, with particular reference to the report published by the Justice Committee on the budget and structure of the Ministry of Justice.
This is the first debate on the Ministry’s estimates since it was established in 2007, and I gather that the Minister who will respond is one of two in the Department who were formerly members of the Justice Committee—well, three if we count the Minister for Policing and Criminal Justice, the right hon. Member for Ashford (Damian Green). We are infiltrating our Committee members into relevant positions, which I hope will lead to almost all our recommendations being carried out.
The Ministry’s resource departmental expenditure limit for this financial year amounted to £8.2 billion. The supplementary estimate that provides the occasion for this debate adds a net £379 million in programme expenditure to that total, but MOJ spending, if not huge, relates to crucial areas of great public concern and interest: prisons, probation and legal aid. Most of the expenditure that the Ministry is responsible for is incurred in programmes administered by agencies and non-departmental public bodies. The broad figures of the budget show that the National Offender Management Service—prisons and probation—receives £3.4 billion, that the Legal Services Commission, which deals with legal aid, receives just under £2 billion, that the Courts Service receives £1.3 billion, that the Youth Justice Board receives £300 million and that the Criminal Injuries Compensation Authority receives £282 million. Between them, they account for the lion’s share of the Ministry’s budget.
I said that the supplementary estimate added a net £379 million to the main estimate resource expenditure limit. I will write on behalf of the Justice Committee to seek some further information on the components of the increase, as well as on increases in resource annually managed expenditure; but, in the meantime, it would be helpful if the Minister responded with some of the reasons for the £159 million increase for NOMS in the resource departmental expenditure limit, which is mysteriously described in the Ministry’s memorandum as due to “emergency cost pressures”. Last year, £51 million was included in the supplementary estimate under exactly the same heading. What are those pressures? Is that money part of the £1.2 billion funding agreed in 2007 for prison capacity, following the Carter review, and, if so, when was it carried over into the current comprehensive spending review period and what will the money be spent on?
The supplementary estimate includes provision for a net extra £750 million in round terms in resource annually managed expenditure, the largest elements of which are impairments on the court estate, £326 million, and impairments on the prison estate, £252 million. I hope that the Minister can explain why those elements are there.
I shall turn to the main conclusions of my Committee’s wide-ranging report. We took evidence in the first half of last year and reported in August 2012, and the Government responded in October. We visited the Department during our inquiry, and we did so in an innovative way that I commend to other Committees. We simply said, “We don’t want a formalised tour. We wish to enter every part of the Department and, on a second day, NOMS, and all we want is someone who has got the keys to every door in the building.” That is what we did, and we just wandered about every part of the Department, talked to staff and got a clear picture from them—interestingly, it was to the Department’s credit—of their commitment to the transforming justice programme. We just landed on anyone and asked, “What are you doing? What is your role in all this?” That gave us a much better feel than formal presentations sometimes do for how the Department was functioning, and it was to the Department’s benefit.
We have regularly taken evidence and reported on the annual reports produced by the Ministry. On the broader relationship between expenditure and policy, our predecessor Committee in early 2010 produced a seminal report on the case for justice reinvestment—a strategy for the transfer of resources away from custody to the prevention of crime and the reduction of reoffending. It remains my firm belief that the blueprint set out in that report is the only sensible way forward for a long-term criminal justice policy. Some elements of that philosophy are present in Government policy today, but quite a lot more could be included.
Our report focused on managerial and operational matters, but it also covered some important questions of policy, particularly on the commissioning of prison and probation services and payment by results. Our inquiry was the first major examination of the activities of the Ministry and its associated public bodies. We looked at the background to the setting up of the Ministry, its internal governance, budgetary provision, financial management, commissioning and procurement, the relationship with other public bodies, Departments and the judiciary and the prospects for achieving the Ministry’s radical long-term policies of transforming justice at a time of severe public expenditure retrenchment.
Some of the subjects that we covered, such as the Ministry’s financial management and procurement capacity, may seem technical, but when things go wrong with those functions, as happened recently in the shambolic outsourcing of court interpreting services, excoriated by the Public Accounts Committee and by us, the political fallout and the effect on public confidence in the judicial system can be deeply harmful.
We concluded in our report that the Ministry’s structure and performance had improved since its creation and that progress had been made in integrating the Department, but many of the improvements had been from a low starting point and there had been criticisms and failures. The culture in which the focus was on policy creation previously had changed to an increasing recognition of the importance of programme management. The Department had developed a greater understanding of its cost drivers, although it still did not have sufficient management control of its finances.
We noted that the Ministry had sought to bring its sponsored bodies under closer central control and make them more accountable to Ministers and had streamlined senior management structures and reduced the duplication of functions. We called for further structural change to create an integrated system of offender management, involving the commissioning of both prison and probation services in defined geographical areas. In fact, we look like ending up with roughly the opposite: national commissioning of prisons, which is what we already have, and now of probation, as part of the Government’s probation proposals. The Lord Chancellor defended that on the grounds that, at this stage at any rate, the limited available experience needs to be concentrated to carry out that commissioning function, but that seems to us to be entirely the wrong strategy. The commissioning of ways to deal with offenders really needs to be associated with all the other agencies that are situated in an area. The prisons, police and crime commissioners, local authority social services departments and housing authorities need to work together, as they have done in youth offender teams, for example, to achieve the best results locally.
We expressed doubt about whether the Ministry had sufficient skills capacity to implement the radical change of approach, with the greater outsourcing of the delivery of services, and we pointed to a danger that the way payment by results would be commissioned might undermine the work of voluntary sector organisations, which play, and need to play, a vital role in the justice sector. I think that Ministers have got that message. I am less sure whether they can implement it properly. There is certainly considerable anxiety across the voluntary sector, where so much of the skill and commitment that is required to change offenders’ lives is available. We drew attention to the wide range of public, private and voluntary organisations that need to work together if the wider justice system is to operate more effectively and efficiently when resources are so constrained.
It is difficult to think of any part of the Department’s activities that are not affected by the process of transformation, which has been under way and has gathered pace. In particular, the proposals in transforming rehabilitation document will entirely re-fashion the terrain of probation services. There are welcome plans to extend rehabilitation to prisoners serving sentences of under 12 months who currently receive no such provision. We pitch them back into society with no realistic expectation that they will turn away from a life of crime merely because they have spent a limited time in prison.
More controversially, the plans include contracting out to the private and voluntary sectors of the majority of work with offenders in the community currently overseen by probation trusts. This rehabilitation revolution agenda is in addition to a huge amount of change occurring across other parts of the Ministry’s core business: changes in legal aid entitlement and in the status of the Legal Services Commission, which has moved physically into the headquarters building in Petty France and is becoming an executive agency under closer central control. The Ministry is closing a number of magistrates courts. It has announced plans to transform youth custody by introducing secure colleges. In family justice, Children and Family Court Advisory and Support Service will transfer back to MOJ control effectively from the Department for Education.
On prisons and probation policy, I think we all share the same goal of reducing offending and reoffending, which in turn will free resources currently spent on keeping people in prison, to maintain progress and to have a virtuous circle, rather than the vicious cycle that the system now has. But we remain to be persuaded that the Ministry has at its centre the right people to steer through this monumental transformation process. Most importantly, does it have people with the commercial, technical and legal skills necessary to embark upon a huge range of highly complex and sometimes novel commercial projects?
The transformation agenda coincides with a period when the Ministry, like most Departments, is being tasked with making very large savings. By the end of the spending review period—by the end of the 2014-15 financial year—it needs to make annual real-terms savings of more than £2 billion against its spending review baseline. According to the National Audit Office’s departmental overview, the Ministry still has some way to go to meet its cost reduction target. It aims to make front-line savings of around 10% over the spending review period—it has already saved £244 million—and to reduce back-office costs by around a third, which will contribute about £1 billion towards its target.
The Ministry has projected legal aid savings of about £320 million annually by 2014-15 and sentencing savings of £51 million by the same year, from the changes introduced under the Legal Aid, Sentencing and Punishment of Offenders Act 2012. A further statement from the Minister today gives an accelerated timetable for proposals yet to be spelled out in relation to criminal legal add. Obviously, we will be closely interested in what comes out. We have some indications that things such as cost recovery from offenders will form part of that. Of course, there has been more coverage today in reference to the President of the Supreme Court and anxieties in the judiciary—of course, such anxieties are widespread among lawyers and voluntary organisations—about the effect of the legal changes.
I will make a personal comment, which I think is broadly shared by the Committee. It is widely recognised that we cannot go one having the most expensive legal aid system in the common law world with no real prospect of restraining its potential increase. The Government had to do something, and any Government would have had to do something.
Secondly, and this is a view that the Committee expressed strongly in a previous report, the welfare and tribunal systems are part of the problem. The extent of legal advice necessary in much of the tribunal system indicates a weakness in the way services are delivered in the first place, and in the tribunal system. We ought to have a system under which people receive the right benefit to start with, and, if they do not, the tribunal system should obtain directly the information required to judge the matter correctly. Where Departments in particular fail to achieve that objective and generate a lot of failed appeals—failed on the Department’s side—they should contribute to the cost. It should not be the MOJ budget that bears the cost, but the Department that is not doing its job properly. Change is required in this area.
Savings of approximately £50 million per year are expected from changes to criminal injuries compensation criteria, and there will be other, lesser savings from the closure of courts and prisons, and from rationalising the administration of the Ministry itself and its sponsored bodies. Restructuring the NOMS headquarters is expected to save £91 million. At the same time, there are cost implications to changes that the Ministry is making. Is there any costing for the plan to extend rehabilitation to short-sentenced prisoners? That is welcome, but we have not seen any plans for how it will be paid for. How feasible will it be to fund it by introducing competition into probation?
The Ministry has little control of many things that determine its cost, such as the demand for prison places. One has to ask: how would its transformation and cost-cutting agendas be affected by an unforeseen event. Into that category fell the national riots—they are described as national riots, but it may be fairer to describe them as riots in a number of cities—that occurred in 2011 and generated significant expenditure in the court service and in the prison system.
The Ministry is moving forward with its radical plans for transforming rehabilitation. Payment by results, for example, has not yet been tested in the field of criminal justice. There are a number of pilots up and running, but we do not know what their outcome will be. The Secretary of State clearly feels that to wait, probably for many years, for the outcome of the pilots is to wait too long—he is impatient to get on with developing payment by results. One has to ask, however, how can the Ministry know that it is rolling out programmes that will work and not waste money? How can it learn from the programmes that are up and running, even though we are not at the stage to receive final conclusions?
My Committee took evidence from the Secretary of State last week on the transforming rehabilitation proposals, and put some of those questions to him, including the concern that he makes full use of the voluntary sector that has so much to contribute. Since then, there have been some reports in the press of doubts in the Treasury on whether the payments by results programme can achieve its predicted financial outcomes. I think that those reports came out accidentally in a conference or a seminar on related issues, but they indicate that not everybody is confident that the Ministry can achieve that kind of saving from the programme.
Much depends on getting the basics of financial management right, and our report devoted considerable attention to the effectiveness of financial management in the Ministry and its sponsored bodies. The Ministry did not produce its resource accounts for 2009-10 and 2010-11 before the summer recess, and blamed the accounting arrangements of probation trusts. Last year the Department’s accounts were submitted before the recess, but still after the deadline set by the Treasury. The Committee considered that to be unacceptable.
The Committee was also critical of the regular qualification of the Legal Services Commission’s accounts because of error rates in overpayments—£35.7 million in 2011-12—and called for it to establish a clear plan to reduce those rates significantly.
Our final main concern related to the accounts contained in the Her Majesty’s Courts Service trust’s statement. The Comptroller and Auditor General issued a disclaimer of opinion on those accounts, meaning that he could not say whether they gave a true and fair view. Its chief executive explained that the Courts Service’s accounting system was not able to handle the requirement placed on it by the Treasury to produce an auditable report. The Secretary of State said that the £3 million it would cost to put that right would not represent good value for money.
The Committee was highly critical of the lack of financial management competence in the Ministry and its sponsored bodies. We said that there was “unacceptable complacency” and a “defeatist mindset”. That is strong language, but the Committee think it is justified. The Committee thinks that the Ministry is now taking financial management more seriously, including centralisation and standardisation of processes and standardised forms. The LSC is implementing a new IT system. Frankly, we were horrified when the LSC told us that it could not possibly ask all solicitors to submit claims online, in a world where you and I, Mr Deputy Speaker, and most other people have to use online procedures. This is having to change, thank goodness. The Ministry, however, still faces an uphill struggle with IT legacy systems and its estates. In particular, in the courts many IT systems are old and require a great deal of effort and input to work at all. There is a question regarding whether any useful analysis has taken place to determine whether investing in capital projects now would save money in the longer term.
On European-related issues, the Committee said that the maintenance of separate teams in the MOJ and the Home Office to deal with European, international justice and home affairs issues was a duplication of effort, and that they should be merged. The Ministry has not accepted this recommendation, which seems so obvious to us.
The Government, with some fanfare, announced that they would exercise their right, under protocol 36 of the Lisbon treaty, to opt-out en bloc from justice and home affairs measures, and would consult parliamentary Committees, my Committee included, on their proposals regarding which ones they would opt back into. Up until now, negligible information has been forthcoming from the Government on their plans. The Committee, and other Committees, have had nothing on which to carry out any work. I emphasise strongly that my Committee expects to be provided with the time it requires to scrutinise the Government’s opt-out proposals. The same applies to the other affected Committees too, and we have written jointly on that.
The Ministry of Justice has not yet shown itself able to achieve the full savings to which it has committed, despite some tough decisions and some welcome improvements. The Department is trying to achieve major change, a process that always involves front-end costs with the hope of later savings. We should not be wasting taxpayers’ money on ineffective use of the prison system, where half of those released from prison reoffend within a year—for those on short sentences the figure is 60%. We should not lose sight of the long-term objective, which is to cut crime and reduce reoffending to such an extent that much less money has to be spent on the consequences of crime, whether in the criminal justice system or beyond. For that to happen, we need to spend money to ensure that people are not drawn into crime in the first place. The troubled families programme and early-years education are examples of what the Government are doing and need to build on if we are to cut not only the costs of crime, but the misery it brings to those of our constituents who are victims of crime. We are spending their taxes on trying to keep them safe from crime. That money needs to be spent wisely and that is why it is important that we debate it today.
Gareth Johnson (Dartford) (Con)
It is a pleasure to follow the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith). This might not be the most eagerly awaited debate the Chamber has ever seen, but the funding of the Ministry of Justice is an extremely important issue, and although I am a new member of the Justice Committee, in my short time I have seen how daunting is the MOJ’s task of balancing the books.
The MOJ aims at having less reoffending, more rehabilitation and a better court, prisons and probation service, and all with less money. I do not envy the Secretary of State’s position, but I know that in endeavouring to meet the task he will consider all areas for savings. One area being considered is funding work opportunities for inmates in custody. It is right that we provide employment opportunities in prisons. Taking part in work programmes helps offenders to retain or—where it is lacking—adopt a work ethic, increases work-based skills, makes inmates more employable on release and reduces reoffending rates. We must ensure that it does not undercut companies not working with offenders or take jobs away from the law-abiding, but giving prisoners work opportunities in custody could help not just inmates, but victims of crime. If the money earned by prisoners can be shared between rehabilitation and payments to victims, there is a dual gain to be made.
It is not only prison work schemes, however, that provide these opportunities. The National Offender Management Service has been identified as a department that could undergo further restructuring. Managing the rehabilitation of offenders is one of the most crucial aspects of the Ministry’s work, and the MOJ is right that someone is not best placed to help prevent reoffending just because they are employed by it. Very often, private companies or charities can assist with the rehabilitation of offenders, so it is worth considering—and, in suitable cases, adopting—the tendering of work currently carried out by the probation service. If payment by results actually gets results, it is worth pursuing, and giving a financial incentive to those who carry out rehabilitative work can only help to reduce reoffending rates. For the first time, we can say that if offending rates are not reduced, taxpayers’ money will not be spent. That seems right to me.
Jenny Chapman (Darlington) (Lab)
I am sorry, but the hon. Gentleman seems to be suggesting that companies with PBR contracts will not be paid if they do not achieve results. I am sure the Minister will correct me if I am wrong, but that is not going to be the case.
Gareth Johnson
As I understand the system, there will be payment by results. If the results are not achieved, there will be a financial consequence for that company. We will be able to say, “If there are no results, the taxpayer will not have to shoulder the full burden.” To draw an analogy, we would not expect the Ministry of Defence to pay for guns that do not fire, so why should we expect the MOJ to pay when anti-reoffending programmes do not work? We should pay for what works, not for what does not work.
Rehman Chishti (Gillingham and Rainham) (Con)
Does my hon. Friend agree with the MOJ that we should consider other means of resolving disputes, such as mediation, rather than going down the avenue of tribunals and courts, which cost a lot of money?
Gareth Johnson
My hon. Friend makes an important point. There is more scope, particularly in family courts, for the increased use of mediation and perhaps non-judicial disposals. We want to see court processes in appropriate cases, but nevertheless we could consider ways of avoiding them, if it is correct to do so.
I was reassured by the Secretary of State’s comments to the Justice Committee last week, when he confirmed that the probation service could also tender for contracts to work with offenders. That is right. The public want less crime; what is less important to them is who achieves it. Whether it is the probation service, a charity or private company matters little; what is vital is that whoever helps offenders to stay on the straight and narrow is successful in that important quest. Payment by results is potentially groundbreaking for the MOJ, but I concede that the devil will be in the detail. We need to ensure that cherry-picking cannot prevail, for example, and that the system recognises tangible improvements in a repeat offender’s behaviour, rather than progress towards good behaviour.
Successive Governments have tried to tackle the so-called revolving door of reoffending—the tendency to come back into the system time and time again, particularly following short-term custodial sentences. There are two approaches to the problem. We can either curtail short prison terms, letting people off without custodial sentences and not having any short-term prisoners, or we can work with such offenders, both in custody and on release. I support the latter approach. It has not been done in the past, but the commitment now to ensure the supervision of such offenders on release is the right approach and very much to be welcomed. The involvement of charitable and private sector organisations in such work has made it affordable. I believe it will be more successful for their presence.
However, it is not just the work of prisons that we need to review; it is also the courts. I worked in the Court Service and saw a very changing environment. In fact, three of the five courthouses I worked in are no longer courthouses, but restaurants, accommodation and so on—I think one is a Zizzi. They have changed beyond all recognition. Although it is sad to see that happening to old courthouses, it is right for the Department continuously to assess the value for money it provides for the taxpayer. It has a difficult balancing act to perform, between the value for money it provides on one side and the interests of justice on the other. Witnesses cannot be expected to travel long distances to vast super-courts. Justice delivered locally is still an important doctrine.
The virtual courts system has been highlighted as a good way for the Department to save money. However, I would urge caution on this approach. Virtual courts can actually cost more. We therefore need an intelligent and targeted use of the system, rather than a blanket approach. I am probably the only Member of Parliament who has used the virtual courts system—I guess I should declare an interest—and I have seen not only its strengths and weaknesses, but its expense to the Department. I am pleased that the Department is also looking at different ways in which magistrates courts can operate. It makes sense to allow them to keep more cases for themselves. That will enable savings to be made without compromising justice. In limited circumstances, magistrates can already sentence adult offenders to 12 months. If we trust them to give such sentences for some cases, why not for all cases? In some courts, the same magistrates who can sentence a 14-year-old to up to two years cannot give an adult more than six months. That needs to change.
The challenges for the Department are substantial. In playing its part in tackling the country’s debt, it needs to find savings, yet they have to be made without compromising justice or the safety of the public. The first job of every Government is to protect the public. I pay tribute to the Department for the enormous strides it has made of late in doing just that, while at the same time finding significant savings in its budget.
Jenny Chapman (Darlington) (Lab)
It is a pleasure to take part in what has become a rather select gathering, considering the report from the Select Committee on Justice and the estimates for the Ministry of Justice.
It is a pleasure to follow the hon. Member for Dartford (Gareth Johnson). I agreed with a large amount of what he said, although I encourage him to look carefully at PBR. He will find that the reward element, which is the bit companies get should they achieve their targets—we are still not clear what the targets might look like—could be as little as 5% of the value of the contracts. He might find that quite poor or average performance could get 95% of the payment anyway, which is not quite what we are leading people to believe.
It is also a great pleasure to follow the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), who presented his report clearly and fairly, and very politely, given some of the criticisms that he made of the Department. I congratulate him and his Committee on their report on the budget and structure of the Ministry of Justice. I found it an interesting read, but I imagine that it was at times an uncomfortable read for Ministers.
I want to touch on several important subjects: a dysfunctional financial Department, inadequate leadership, evidence-free policy, no progress on improvements for women offenders or for victims of crime, and an overall lack of impact on outcomes in the past three years. In the first paragraph of the report, Members observe that
“this period has been marked by criticism of and, in cases such as the performance of the Legal Services Commission (LSC), failure by, the Department.”
Looking at finance in particular, the Department’s finance team has been performing particularly badly—not that anyone would know it from the Department’s own assessment of its performance, which states that it has
“put a renewed focus on improving financial management across the entire Department.”
The Department has, however, missed the Government’s deadline for submitting accounts for the third year running. If the Ministry were a charity, the Charity Commission would be considering removing its charitable status.
The Government have been reduced to ill-thought-through attempts at random savings through redundancies, and it is striking that the Department’s future budget targets depend on making significant numbers of staff redundant even though the Department does not yet have the necessary resources to fund the redundancy payments. That is chaotic, and one reason for the chaos is the £140 million hole in the Ministry of Justice budget following Ministers’ climb downs on plans to change sentences. I am reminded in particular of the proposed sentence discount for guilty pleas in rape cases, which was abandoned.
The Ministry has to make a massive budget saving, yet it is flailing around attempting to find people to sack. Unfortunately, it risks undermining its ability to do its job. The Chair of the Public Accounts Committee, my right hon. Friend the Member for Barking (Margaret Hodge), said this morning:
“"We are concerned about safety and decency in some prisons…Assaults on staff, self-harm and escapes from contractor escorts have all increased.”
She went on to say:
“We were not reassured that the Agency has done enough to address the risks to safety, decency and standards in prisons and in community services arising from staffing cuts implemented to meet financial targets.”
On offender management in the community, probation trusts, the Probation Association, the National Association of Probation Officers and, significantly, all but a couple of the police and crime commissioners are opposed to the Government’s attempts to squeeze savings out of the Department through the sell-off of probation services by contracting out the supervision of medium and low-risk offenders in the community. I believe that the Ministry of Justice’s proposals in that area are as yet uncosted.
Ministers also have no idea of the extra cost of their plans to supervise offenders serving sentences of less than a year, or whether they will make any difference at all to outcomes. We know from experience that commissioning is not one of the Ministry of Justice’s strengths. The commissioning car crash involving the court interpreters Applied Language Solutions and Capita is something that I am sure officials and Ministers would rather forget, but it illustrates the point that commissioning is not one of the Department’s strengths.
The voluntary sector is likely to get frozen out of rehabilitation services. The Secretary of State has repeatedly said that he wants smaller, voluntary sector and other providers to take on more work relating to the rehabilitation of offenders. There is no argument there, except that the National Audit Office has observed in its response to the Government’s consultation that this desired level playing field is unlikely to materialise. It states:
“Large contracts within the criminal justice system are already held by a few large firms, who could exploit this synergy, compared to smaller or newer players. The Ministry needs to consider whether the size of the contract areas will create barriers to entry for some smaller providers, given the need for greater investment and exposure to risk that these will entail.”
Exactly what is the rationale behind the Government’s proposed 16 areas for probation services, because nobody I speak to seems to know?
The Department has to admit that it has a tendency to favour policy announcements at the expense of delivery. We have had announcements on prisoner working, improved services for victims, revolutionising rehabilitation, mentoring and drug-free prisons. These are all great announcements, and the Government have had no argument from any of us about them, but we are left feeling a little disappointed that the Minister’s hyperbole about a rehabilitation revolution is just that. So far, it is all rhetoric and, I am afraid, no reality. Prisoners are not working more; they are spending longer than ever locked in their cells; and the chief inspector of prisons says he can find no evidence of the rehabilitation revolution—[Interruption.] The Minister says that it is not true, but I have the figures in front of me. If he wants to contradict me in his remarks, I may well wish to intervene on him later.
The justice mandarins are simply not running things properly. The Select Committee says that Ministers need to alter the balance from policy creation to programme implementation, and it is right. Will Ministers tell us how many serving senior officials in the Department meet this criteria and how many of them have experience of managing these projects successfully at a sufficiently senior level? The Department says it wants cultural change through transforming justice, but it is not clear from its own report how many senior managers really have these skills. It believes it will save money by closing older prisons. The Secretary of State says he wants to build a new “supermax” prison, but does he have a budget for it, what is his timetable and where is it going to be?
Perhaps the most important unanswered question is this: at the end of the reforms, what will be happening on the ground that is so different from what happens now? What is the big idea? Where is the evidence to back any of this up? Among all the announcements and statements about restructuring, outsourcing, commissioning, paying by results and reforming, where is the real change that is going to make a difference?
Chris Heaton-Harris (Daventry) (Con)
There is recognition on both sides of the House for the work that National Grid has done on reoffending. It has taken more than 2,000 offenders, given them work, mentored them and found bank accounts for them—the right hon. Member for East Ham (Stephen Timms) is a great proponent of that. That proves that someone does not have to be a senior official in the Ministry of Justice to be able to bring forward a good idea that massively reduces reoffending.
Jenny Chapman
The hon. Gentleman makes a good point. We can all cite anecdotes and examples of very good practice, but anecdotes remain just that. There is no systemic sharing of good practice. These opportunities should be assessed, evaluated and made available for all the offenders who need them, but the truth is that they are not. According to the Public Accounts Committee, senior officials at the MOJ have a poor record of managing commissioning, so I am not sure about trying to transform the service through that method. At the moment, there is not enough evidence of a good track record to be able to put much confidence in their ability to do that. The problem with the reforms is that they are all of structure rather than of practice. The Government are rightly disappointed in reoffending rates of around 50%, but for nearly three years they have done nothing of any substance to improve the situation.
Let me deal now with payment by results. Instead of importing a failed policy from the Department for Work and Pensions to the MOJ, why not take a closer look at what works in preventing reoffending? For all the academic studies and Government data, the truth is that there is precious little understanding of what really makes a difference. Plenty of organisations are prepared to tell us that what they are doing works and are prepared to buy reports to prove it, but there is very little objective analysis of outcomes of programmes and interventions. As a result of scrapping probation service PBR pilots, the Government are failing to use evidence that they should have to help them to decide where to spend their money. When the Secretary of State cancelled the pilots, he said, “Sometimes you just have to go with your beliefs.” There we have it: Chris Grayling, Secretary of State for Justice, our very own mystic Meg.
This simply is not good enough. Interventions in health, for example, are assessed. They are monitored and evaluated before public money is used to provide them, and the same should apply to interventions in criminal justice. The rate of reoffending is stubbornly high, so why are the Government not doing what can be done in health? Why are they not asking for interventions to be evaluated and funded only if they prove to be effective, and then insisting that only what works should be delivered in our prisons and in community sentences? There is too much okay practice, and too little sharing of the very best ideas.
We need to know which are the best interventions, which are the best providers of services, and which are the best prisons. We need a value-added measure for criminal justice. The Government should be investing in ways of assessing the performance of establishments, based on the profile of inmates entering prisons and their future reoffending. Establishments should be accountable for their performance: the best should be given greater freedom to innovate, and the worst should be closed down. Farming out the supervision of medium-risk offenders to private sector providers with no idea whether that will work any better than the current arrangements is reckless, ideologically driven and dangerous, and the Government should think again. They are not showing any interest in practice on the ground, but are preoccupied with structures in the organisations without any evidence that they will make any difference.
The Government’s performance in the management of this Department has been woeful. The Department has failed to submit its accounts on time three years running, it has been subject to withering criticism from the National Audit Office over its ability to commission, it has scrapped PBR pilots—thus losing any evidence that payment by results works—and it has failed to show that its mandarins can manage projects and implement policy.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
Let me start by thanking my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), the Chairman of the Select Committee, for introducing this short but very high-quality and wide-ranging debate. I am also grateful to him for the way in which his Committee drew up the report, and for the scrutiny that it provides of the Department more broadly.
As the House knows, parliamentary scrutiny of Government Departments is crucial to ensuring that they deliver Government policy properly and offer value for money. We have talked about both those things this afternoon. A large number of subjects have been covered, and I shall try to deal with as many as possible. I shall also say a little about the Department’s priorities, which have also been mentioned today.
Last year’s comprehensive report by the Justice Committee on the budget and structure of the Department focused on many of the changes that it has made to bring it closer to the goal of delivering a justice system that is more effective, less costly and more responsive to the public. At a time of continued financial pressure—to which my right hon. Friend rightly referred—finding ways of improving services while delivering even more value for money is, of course, of paramount importance.
There has been a renewed focus on improving financial management throughout the Department, which means that it is set to reduce spending by about £2.5 billion each year over the spending review period. It will achieve that by means of a range of measures to drive down the costs to the taxpayer. On the efficiency side, that has included rationalisation of the Ministry of Justice head office, streamlining our structures and processes, and rationalisation of the court estate. We have also delivered savings through policy reforms, including the reforms of legal aid funding—which have been mentioned—and the criminal injuries compensation scheme. As the Select Committee has acknowledged, the Department has protected front-line services by making the bulk of its savings—some 60%—through ways of working more efficiently. The Department also laid its 2011-12 accounts unqualified, before the summer recess and ahead of the timetable it had originally planned. That demonstrates a significant improvement on previous performance, but there is room for further improvement and the Department is looking to provide that this year.
My right hon. Friend the Member for Berwick-upon-Tweed raised two specific points about the estimates, the first of which related to the explanation for the £159 million extra for the National Offender Management Service. As he will appreciate, a number of pressures that arise during the year were not part of the MOJ baseline used in the spending review negotiations. Such additional cost pressures will include not only inflationary impacts, but funding for voluntary staff exits—he will understand that there has been considerable change on that front in the past 12 months.
My right hon. Friend’s other point related to the impairments to the court and prison estate. As he knows, the Valuation Office Agency carries out regular reviews of that estate, and the recent downturns in the property market mean that that re-evaluation has obviously had an impact on the Department’s budget. The figure of £520 million or so is substantially explained by that change.
Let me talk a little about the justice system we are trying to design. Creating a transformed justice system requires the Department to go beyond improving its financial management. If we are to construct a justice system that punishes the guilty, protects liberties and rehabilitates offenders, the MOJ needs to continue to work at pace to drive an ambitious reform agenda. Despite the determination of those working within the justice system, there is too much litigation, too many people are reoffending and too much money is spent on systems. So by 2015 the Department will provide services in a completely different way. We are committed to transforming rehabilitation to reduce reoffending—I will discuss that in some detail later— to driving down costs across the prison estate to ensure that it delivers maximum value for taxpayers; making sure that the youth justice estate is appropriate and cost-effective; rationalising the court estate and identifying further efficiencies across the criminal justice system; and continuing to drive down the cost of legal aid and ensure it is focused on those cases that require it. That is what transforming justice looks like.
One of my top priorities within that is the transformation of rehabilitation. That has had a good deal of attention in this debate, so let me deal with the points that have been made. As the House knows, we have consulted on proposals that could open up approximately £1 billion of services to a diverse market; give greater scope for providers to innovate, with payment by results acting as an incentive to focus on rehabilitating offenders, as my hon. Friend the Member for Dartford (Gareth Johnson) was explaining; and change how the commissioning of services is managed.
Jenny Chapman
Will the Minister clarify a point for us, because hon. Members who are listening to this debate will not be clear about it? What percentage of the value of the contract will be paid upon the achievement of the targets?
Jeremy Wright
The hon. Lady knows that we are carefully considering the design of the system, so we will need to determine the appropriate percentage. She will also recognise that it is not going to be 100%, because anyone taking on this work will need to implement the orders of the court and to fulfil licence requirements. The fact that it will not be 100% may have some bearing on the discussion we have been having about the accessibility of this new landscape to smaller organisations, particularly those in the voluntary sector. We will settle on the precise figure having listened to those who may be involved in this landscape, and others, to make sure that we get it right.
Let me deal with some of the points made by the Chairman of the Select Committee. He raised the concern that he and his Committee have about having national as opposed to local commissioning, and I appreciate that that represents a change. It is explained simply by the need to ensure that the necessary expertise and abilities to commission on a payment-by-results basis are held by those doing the commissioning. We think it is difficult to see how that can be done on a local basis, but we think it is important, just as he does, that there are local elements in the commissioning process and that local intelligence is included in deciding what needs to be commissioned. We want to design a system—I hope he will see this coming through the process—that enables us to include that local understanding as well as greater expertise on payment by results. He is also right to say that we must design a system that allows voluntary sector organisations to participate actively.
Sir Alan Beith
I am grateful to the Minister for seeking to clarify this point. Let us analyse it a bit further. If the local partnerships that know the local situation best can design what the contract should be about, it is perfectly proper that they should turn to a national body that has expertise in how to include the measurements of results and so on. I would be worried, however, if the national commissioning body was also the body that said, “What you need in Blackburn is this.” That decision should be taken locally, even if the expertise must be drawn on from a central body.
Jeremy Wright
Yes, I understand that entirely. I am saying that it will be important under the system that we are trying to design for local requirements to find their way through the system so that they can be clearly understood. We will try very hard to ensure that that can be done.
Let me return to the voluntary sector organisations, on which we have rightly spent a bit of time in the debate. There are probably two areas in which we need to be careful to ensure that the design of the system is right. The first is in the assessment of the bids that are made for the rehabilitative work that we are discussing. When we consider the bids, we will want to be satisfied not just about their quality and price but about the sustainability of the relationships brought forward as part of the bids. We anticipate that a large number of bids will include more than one organisation and will often include smaller voluntary and community sector organisations. We will want to be persuaded when assessing those bids that the smaller voluntary and community sector organisations will have a sustainable future in the course of the contract. We will want to ensure that the design is right and that we keep our eyes on what is happening in contract management. It is partly about assessing the bids when they come in and partly about assessing how they are implemented over the lifetime of the contract.
Jenny Chapman
I think the phrase the Minister is looking for is “bid candy”. I think he is trying to say that he would like there to be more involvement from not-for-profit, third sector and voluntary organisations, but is it not the truth that he has no idea at all of the number of organisations working with offenders in the criminal justice system? He does not know how many there are or what exactly they are doing, so how will he know whether there is more involvement after his reforms?
Jeremy Wright
The House will note the hon. Lady’s traditional fondness for central control, but we are not a fan of that. She is right that there is an issue about what is likely to be called “bid candy” in this context, but what she is missing is that that is precisely why it is important for us to consider not just the initial cost and attractiveness of the bid but the sustainability of what might be called the supply chain. We want to design that into the system for precisely the reasons she has given.
Let me move on to the issue raised by my right hon. Friend the Member for Berwick-upon-Tweed about prisoners who receive sentences of 12 months or less. There is broad agreement when the subject is raised that it is a good idea to bring within the ambit of rehabilitative services those offenders who receive such sentences, as at the moment very little provision is made for them. He is right to say that it will come at a cost, but it is difficult to be precise about the cost of that provision, which was another point raised by the hon. Member for Darlington (Jenny Chapman). Until we have finished designing a provision, we will not know precisely what it will cost.
Another aspect that needs to be clarified by the design process is the sanctions regime. Part of the cost will be incurred by deciding what to do if someone who is under such a sentence and who will be expected to participate in rehabilitation after that sentence does not comply. We must go through a number of processes in the design of the scheme before we can be more precise about the costs, but we confidently expect the cost of incorporating those 46,000 extra offenders will be covered by the savings we can make by competing rehabilitative services for medium and lower-risk offenders. That is one of the central advantages of taking that course.
My right hon. Friend also made the point that it is important to have in the management of the Department the right people with the rights skills to carry out the work we are asking them to. He is right, of course. He will almost certainly know from his review of the work of the Department that we have set up a capability steering group to consider those issues. One of the major issues for us to address is skills in programme and project management. We are very conscious of the need to make sure not just that we bring in new people with those skills where we need to do that, but that we give those skills to existing staff who will come into contact with programmes of various sizes and shapes.
Nick Smith (Blaenau Gwent) (Lab)
From the Select Committee’s report I thought the emphasis on delivery and implementation was strong. However, I looked at the Government’s response to the Select Committee’s criticisms and, on the issue of project management, it felt very thin. How many of the Department’s senior managers have project management qualifications so that they can introduce this new culture of delivery?
Jeremy Wright
As I said, we recognise the need to make sure not just that we bring in new people who have these skills, but that existing staff gain those skills, so taking a snapshot of how many have a particular qualification at this point may not be the most helpful way of looking at the issue. We are trying to make sure that civil servants who want and need these skills are given them, and that where there are gaps in the Department and particular skills are required, we plug those gaps.
Let me move on to talk about prison costs. We are keen to push down those costs. Across the custodial estate our strategy is to ensure that we have sufficient places to meet the demand of the courts, while securing best value for money for the taxpayer. We are committed to driving down the cost of imprisonment and to closing old and inefficient accommodation, which will contribute significantly to that. I am surprised that the hon. Lady expressed doubts that such an approach would save money. It seems clear that it would do so. The reason—
Jeremy Wright
If the hon. Lady will forgive me, I will explain and then I will give way.
It is a straightforward point that older accommodation is more expensive to run and to maintain. Newer accommodation is much cheaper in both respects. That is one reason why we want to transfer from an older estate to a newer estate. It is not the only reason, but if the hon. Lady wants to intervene, I will give way.
Jenny Chapman
My doubt was based on assertions from the Secretary of State that there is going to be some “supermax” prison, yet there is a lack of information about how much that would cost, when it would be built and where it would be. I would be interested to hear the Minister’s response to those questions. If they cannot be answered, I will keep my doubts.
Jeremy Wright
The hon. Lady is entitled to her doubts but she needs to be fair. We have said that we will look at the feasibility of providing just that sort of prison, although I would not use the language that she used. We are looking for a system of imprisoning offenders that is most efficient for the taxpayer, but not just in financial terms. Also—this is what I was going on to say—newer estate is much more susceptible to providing work in prisons, as my hon. Friend the Member for Dartford (Gareth Johnson) described, and the rehabilitative agenda that we all want to see outside as well as inside the prison gates. I can reassure the hon. Lady that once we have had the chance to have a look at the sites that we might want to pursue for a larger prison and at the economics of doing it, we will give her all the detail she could possibly want, but we are not going to rush into it because, perhaps unlike our predecessors, we do not believe in spending money hand over fist until we get it right. We will make sure that we have got it right first; then we will bring forward our proposals.
Let me move on briefly to youth justice, which was mentioned by the Chairman of the Select Committee. As he said, in February we published our plans for the future of youth custody. Young people who commit serious and persistent offences need to be properly punished and it is right that they are sentenced to custody, but custody is not delivering good enough results. The costs of youth custody are very high, yet 73% of young people leaving custody go on to reoffend within a year. It is not acceptable to spend so much yet get such poor outcomes. That is why we launched our vision for secure colleges that refocus a young person’s time in custody so that it is education with detention, rather than detention with education as an afterthought.
My hon. Friend the Member for Dartford and the Chair of the Select Committee mentioned the court estate, reform of which is key to a transformed justice system. In identifying ways in which it could operate more efficiently, the Ministry has closed 132 courts—84 magistrates courts and 46 county courts. However, we recognise that there is a need to carry on looking at how our estate is most effectively utilised, and we will want to keep in mind the points that were raised on that. Spending money to keep underused and unsuitable courts and tribunals open is not a good use of taxpayers’ money, so we continue to keep the use of our estate under review to ensure that it meets operational requirements.
The Select Committee is also right to emphasise how important co-operation across the criminal justice is for improving outcomes. In July last year, we set out important reforms now under way across the criminal justice system in the “Swift and Sure Justice” White Paper. We are building on those reforms to ensure that victims have a louder voice and that the criminal justice system commands public confidence.
Jenny Chapman
I cannot let that point go without observing that the new victims commissioner will be working 10 hours a month. Is that sufficient to give victims the voice they need?
Jeremy Wright
I do not believe that it is the number of hours spent on the job that matters, but what one does in them. The effectiveness of this particular victims commissioner will become apparent. We think we have an excellent candidate for the job and that she will do a first-class job for victims. I am sure that the hon. Lady will support her in that work as she does it.
We want to make optimum use of the available resources so that the criminal justice system is quicker, less bureaucratic and more efficient. Therefore we are working closely with the Home Secretary and the Attorney-General to ensure that we all look at the whole system to tackle its weaknesses. My right hon. Friend the Member for Berwick-upon-Tweed was right to say that the Ministry of Justice cannot solve all these problems on its own. We are, as he knows, often described as a downstream Department, and we need to work with other Departments, not just those that I have mentioned, to ensure that we all do the right things to bring down offending and reoffending. He will know that we will shortly publish a criminal justice strategy and action plan to set out how we will deliver further change.
Legal aid is a fundamental part of our legal system but, as the Chair of the Select Committee rightly said, resources are not limitless and publicly funded legal support should be reserved for cases where there is genuine need. The Legal Aid Sentencing and Punishment of Offenders Act 2012 contains reforms that focus help on those cases where there is a genuine need of assistance from the state, and those proposals will be implemented in April. We are determined to protect fundamental rights of access to justice, but we must tackle an over-reliance on the courts and legal system at taxpayers’ expense. That involves directing people towards less stressful and less adversarial means of resolving their disputes wherever possible. I was taken with my right hon. Friend’s point, with which I entirely agree, that if we necessitate the use of lawyers in some of these tribunals, and those tribunals are not operating as they should, that was not the intention and it should not be the way in which we proceed in the future.
We are keen that in addition to transforming the services delivered by the Department, it transforms itself so that it has the right skills structures and agility to operate optimally. As my right hon. Friend and the rest of the Select Committee know well, in 2010, the Department reviewed its operating model, which resulted in more streamlined structures and a reduced work force. However, further reform is required if we are to live within our means in future and operate in the most effective and efficient way possible. We have therefore commissioned a review of the business structures and functions across the Ministry of Justice. That includes our agencies and arm’s length bodies. The review will look closely and critically at the ways in which services are commissioned and provided. In doing so, we want the digital-by-default agenda to be put at the heart of the Ministry’s operations, and for creative ways to embody and implement the principles of civil service reform to be found.
I know that the Select Committee has previously recommended that the different parts of the Department be further integrated. My right hon. Friend referred specifically to the European teams today, and I entirely understand his reasons for doing so. A range of different expertise is represented by different people in different departments, so although we will look closely at any opportunities for rationalisation, in this context, as it happens, the opportunities for rationalisation are not as great as they may at first appear. However, the question of greater integration more generally, as well as the delaying of grade and management structures that the JSC has also sought, is firmly within the scope of the review that we are carrying out.
I thank my hon. Friend the Member for Dartford for his remarks. He is entirely right that work in prisons is a fundamental part of improving the services we offer in custody and beyond. He is right that working in a prison context allows offenders to develop not only the hard skills but the soft skills that might make them more employable. The idea of working a standard day or more hours in the week are hugely attractive from that point of view. I can tell the hon. Member for Darlington, who I know was concerned about this, that we are delivering more worked hours by prisoners in the prison estate than we were previously. Of course there is more work to be done, but we are heading in the right direction.
Jenny Chapman
I am grateful to the hon. Gentleman for giving way, because it is important that we understand what is really happening. There is an idea that our prisons are somehow becoming little hives of industry in which prisoners are beavering away, but they are not. In about half the categories of prison in this country prisoners are actually spending more time banged up in their cells and less time doing purposeful activity. Perhaps most worryingly, that includes prisons for young offenders. Officials need to be a little more upfront with the Minister on that issue.
Jeremy Wright
I have made it clear that we do not believe that we have done all we need to do on that front. I think that it is important to link a number of things. We need to ensure that the prison regime is conducive to work and that prisoners are incentivised to work, rather than to be idle. We are looking at both things, but the prison system needs to deliver more hours and a more regularised working day, for reasons the hon. Lady will entirely appreciate. We want to ensure that we get prisoners as close to the normality of the outside world as we can while they serve their sentence so that they have a better chance of being employed after they leave.
Michael Ellis (Northampton North) (Con)
Does my hon. Friend agree that it is a bit rich for the Opposition to talk about investment in the Prison Service? Throughout the Labour Government’s 13 years in office there was minimal investment and deep overcrowding, so we are having to rectify a lot of the damage done by that failure to invest.
Jeremy Wright
I was going to move on a little later to the damage that we are trying to undo, but my hon. Friend is right that we have not inherited a beneficial legacy. I am afraid that there is considerable work to be done with the prison estate, as in so many areas of Government, because of the mess left behind. I will return to that in a moment, because the hon. Member for Darlington made a few comments that I think need to be addressed.
My hon. Friend the Member for Dartford was right to describe the potential of payment by results, which is at the heart of our proposals. We believe that payment by results has a place in the reforms we are making because we think that it is important to pay for outcomes, not simply for processes. He rightly described why we want to ensure that people are rewarded for getting the outcomes we need them to get, and in this context that is a simple outcome to describe, although perhaps not quite so simple to design in the system: a reduction in reoffending. That means fewer victims, less misery for communities and less cost to taxpayers, which are eminently desirable outcomes.
My hon. Friend was right to focus on the challenges we face in designing the system. We need to avoid cherry-picking and “creaming and parking”, which effectively means looking after only those whom it is easiest to turn away from offending. We are conscious of the need to design our system to avoid those perverse incentives and will do so. He is right that payment by results is the way to deliver those better outcomes.
Nick Smith
It is good that payment by results will be introduced into the Prison Service, but surely the Minister must accept that it would have been better if the Secretary of State had piloted the ideas he proposes to introduce to ensure that they and that the principles he talks about work. Payment by results might be effective, but surely pilots would have let us know what works.
Jeremy Wright
It is a myth that no learning is available about payment by results, even from pilots. It is not always necessary to complete a pilot in order to get something from it. A good deal of learning is available to us from the pilots that have been in operation and, indeed, from the operation of payment by results elsewhere in government. We will take that learning with us in designing the scheme that we are attempting to put in place. The truth is that we could pilot for ever. Piloting in this context is an excuse to do nothing, and we do not intend to adopt that approach because we want to take action to drive down high rates of reoffending. We want to see innovation; we want people to come forward with new ideas within this system. If we expected to have to pilot every single one of those new ideas, we could pilot for ever and never make progress. We do not accept that that is the right way to deal with reoffending rates that are far too high.
Let me return to the point raised by the hon. Member for Darlington and my hon. Friend the Member for Northampton North (Michael Ellis). When we listen to the hon. Lady and her colleagues say that there are difficult budgetary pressures, that the Department is having to cut costs, and how regrettable all that is, we should not allow her to forget the reasons we are having to make these difficult decisions. One would think that we had inherited a benign economic legacy involving piles of cash that we stubbornly refuse to spend, but that is simply not the case. We inherited a note on a Treasury letterhead saying, “I’m sorry there’s no more money”, and a pile of debt. We are doing our very best to deal with the mess that her party left.
Jenny Chapman
As I have acknowledged, the Department has a very difficult financial task ahead because of the decisions of the previous Secretary of State. The Minister admits that some of the commitments he has made are uncosted and that he has no idea whether their outcomes will be good value for money. I am trying to help him by pointing that out and steering him in what might be a more sound financial direction.
Jeremy Wright
I am extremely grateful for the hon. Lady’s help, but she is missing the point. The problems that we face with the finances of this Department and the Government more broadly have nothing to do with the previous Conservative Secretary of State for Justice; they are to do with the behaviour of the previous Labour Government. That is why we are in the mess we are in, and we are doing our best to get ourselves and the country out of it.
The hon. Lady mentioned the size of the contract package areas and asked about the proposal for 16 of them. We asked respondents to the consultation that has recently concluded whether they believe that that is the appropriate number, and we will consider what they said. It is a starting point, and we will see whether people believe that it is a sensible one. I am sure that there will be arguments about whether we have drawn the map in the right way, and we will consider all those in deciding whether we have reached the right conclusions. We will need contract package areas that are large enough to enable payment by results to operate effectively while not losing the local partnerships and connections that my right hon. Friend the Member for Berwick-upon-Tweed mentioned.
Proving what works is clearly crucial in the context of payment by results, and the hon. Lady is right to raise that. She will have seen in our proposals that we are interested in the idea of a justice data lab that will enable those providing rehabilitative services to understand exactly the effects and benefits of what they are doing. In the end, the test of what works will be whether the desired outcomes are achieved. As my hon. Friend the Member for Dartford rightly said, if they are not achieved, the full contract value will not be paid. That is at the heart of payment by results, and that is why we believe that it is a productive way to go forward.
The Ministry of Justice has made great strides in delivering a justice system that is more effective, less costly, and more responsive to the public. The ministerial team has a clear vision for continuing to transform the justice system over the remainder of this Parliament and beyond. I believe that we can deliver better rehabilitation of offenders, a smarter system of detaining and educating teenage offenders, a cheaper and better prison system, and a legal aid and criminal justice system that commands public confidence—and that, at the same time, we can bring costs down.
I hope that the many Members who take an interest in the Ministry of Justice’s activities—they have not all participated in this debate—recognise the improvements that have been made to how the Department organises itself and delivers its services. I know that the Department remains committed to building on these improvements and working with Ministers to deliver our vision for a transformed justice system.
Question deferred until tomorrow at Seven o’clock (Standing Order No. 54).
Department for Communities and Local Government
New Housing Supply
Mr Clive Betts (Sheffield South East) (Lab)
It is with pleasure that I speak to the report produced by the Communities and Local Government Committee, “Financing of new housing supply”, which we published last May and to which the Government responded in July. Today provides an opportunity to consider the report’s recommendations and the Government’s response to them. I hope their response today will be more enthusiastic than the written response they gave in July. A new Minister, the Under-Secretary of State for Communities and Local Government, the right hon. Member for Bath (Mr Foster), is now in place, so he might manage to achieve that. We can also consider certain things that have happened since the report was produced about 10 months ago, and see how they may have changed our recommendations or, indeed, strengthened their case.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
If it is of assistance to the Chair of the Committee, I am prepared, in the light of developments over the past 12 months, to place an update of the Department’s response to its report in the Library of the House of Commons later today.
Mr Betts
I thank the Minister for that and we look forward with anticipation to reading what he has to say. We will do so closely, and the Committee might give it further consideration.
The report, which was signed up to by all members of the Committee on a cross-party basis, tried to consider the issues in the longer term. I am pleased to see in the Chamber several members of the Committee, both past and present, whom I hope will be able to catch your eye, Mr Deputy Speaker.
We started off from the basic position that we have not been building enough homes in this country for a long time. The basic requirement is about 250,000 homes a year, based on household formation, plus an increasing number to make up for the backlog of past under-investment. Since the report was published, we have had the figures for housing starts in 2012. There were 115,620 housing completions, up 1% on the previous year, and 98,280 housing starts, an 11% reduction. Therefore, if our recommendations were correct a year ago, they are probably just as correct now.
This is not a short-term problem. The report acknowledges that even at the height of building in the mid-2000s, we were building a maximum of only 170,000 homes a year, which was not sufficient, either. The private house-building industry has never managed to build more than 150,000 homes a year, so the likelihood of being able to rely on it to deliver the extra homes is probably very small indeed.
We also know that historically, the percentage of owner-occupied properties has been falling since about 2002. That represents a change. The number of private rented properties has been rising considerably and is now slightly greater than the number of social rented properties.
We can also see the consequences of the failures over a long period and of the immediate problems of 2008 and beyond, including young people in particular being unable to afford a mortgage and increasing waiting lists for social housing. People with heart-rending stories who ought to be given a house immediately visit our surgeries every week, but they cannot all have priority because there are not enough homes to go round. Rents in the private sector are also rising. I will not say too much about the private rented sector today, because we are in the middle of a further inquiry into it and what we should do. We look forward to having Ministers before us at the end of that inquiry.
While we were conducting the inquiry into new housing supply, the Government produced their housing strategy for England. It contained measures that everyone could support, such as the release of public sector land. It also included the NewBuy scheme, on which we were promised an update after 12 months. I am not sure how much there is to update us on, but the Minister may be able to give us a few figures.
The Committee concluded that we needed a long-term strategy. There is an issue with homes, but there is also the immediate issue of jobs and growth. The National Housing Federation gave us the interesting figures that every affordable home built in this country provides £108,000 in added value to the economy and creates 2.3 jobs. We should bear that in mind. We also concluded that we needed radical changes. Members of the Committee recognised that we needed to be brave and think outside the box in coming to our conclusions.
We made a number of proposals because we recognised that there was no silver bullet, magic solution or switch that could be flicked in Whitehall that would make everything okay the following day.
Mr Stewart Jackson (Peterborough) (Con)
Has the hon. Gentleman given any thought to the problem in the planning system of land banking, whereby many approved planning applications remain unactioned? Local authorities have put significant amounts of money into those sites, for example via supplementary planning documents, but they are now idle. Were they to be actioned, it would go some way towards ameliorating the housing shortage.
Mr Betts
The hon. Gentleman helpfully anticipates my next point.
The Committee concentrated on funding issues because that was the remit of the report. However, we said in passing, as we did in our report on the national planning policy framework, that we did not believe there was evidence that planning was the obstacle to growth. We accepted the point, which the Local Government Association has made again recently, that there are 400,000 planning permissions for new homes that have not been activated. Getting at those is a major challenge that we should talk about. I do not believe that the measures in the Growth and Infrastructure Bill will deal with that problem, although that did not form part of our report because it has been published since our inquiry. The LGA also says that 87% of all the planning applications made last year were given permission. Planning is therefore not the problem.
There is a potential long-term problem, which I have raised with Housing Ministers on a number of occasions, if local plans become the heart of the planning system, as they ought to be. Many local authorities ought to speed up the process of getting those plans in place, because they are a crucial part of the planning system. The problem is what we should do if the housing numbers in the local plans do not add up to a figure that meets the national housing requirements. I asked the previous Minister for Housing that question on a number of occasions and he never seemed to have an answer.
I congratulate the new planning Minister, the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles), who came to the Select Committee a couple of weeks ago with Lord Taylor of Goss Moor, who was reviewing the supplementary planning guidance. At the top of their list of issues that were not addressed properly in the supplementary planning guidance was the need for a consistent measure of housing need that could be incorporated into local plans on a consistent basis. That will be a helpful move. It will take time for it to be effective, but there is a recognition that the abolition of regional spatial strategies and the total reliance on local plans has created a disconnect with the national targets.
Mr Jackson
The hon. Gentleman is being most generous in giving way. Does he agree that when developers have made a value judgment to bank a portfolio of land because the market is failing, there is no fiscal incentive for them to develop that land? We know about housing need, but the Treasury and others are giving no incentives in terms of supply. Perhaps we should consider tax changes as a catalyst for development.
Mr Betts
That is not something the Select Committee looked at. I will pass it over to the Treasury Committee, just as Ministers pass matters over Treasury Ministers.
There is, however, a worse problem in certain areas. I have been advised by Les Sturch, the director of planning at Sheffield council, but this is also happening in other councils. Because of market changes in housing, many developers are saying that although certain sites have—or could get—planning permission because the land is owned for housing in a local plan, they are not developable in economic terms. Local authorities therefore have to revisit their local plans and look for new housing sites in more favourable areas. That is a real problem and will put pressure on green open spaces because developers will say, “These sites are much more attractive to develop in the current climate.” Ministers must address that problem in the planning system, or else Members will be knocking on ministerial doors and saying, “Why do I have to provide lots more housing sites in my constituency when so many sites have not been built on, even though they have planning permission or could get it if developers applied?” That is a longer-term problem.
We recognised that public funding will, of course, be limited for the foreseeable future, so we looked at the private sector and markets to see what was available. There is a long-term problem. Everyone has said that such housing is an obvious form of investment, but sums have traditionally shown that investors believe they can get a 6% return, although they need 8%. There is therefore a gap, and evidence to the Committee suggested that that is why developments have tended not to happen.
However, there is increasing evidence that developments are beginning. The Greater Manchester Pension Fund is working with Greater Manchester council to provide homes, and Aviva pension fund and Derwent Homes are coming forward with schemes. Places for People gave evidence to the Committee.
James Morris (Halesowen and Rowley Regis) (Con)
The hon. Gentleman refers to the scheme in Greater Manchester, but does he agree that there is great scope for local authorities to take on more borrowing capacity and leverage pension funds in order to invest further in houses of different sorts?
Mr Betts
Absolutely, and I was going to welcome the Government’s consultation on relaxing restrictions on local authority pension funds to provide more scope to invest in infrastructure, particularly housing projects. That helpful move forward should be welcomed.
The Committee also considered a bigger deal—a housing investment bank, for example, or an extension of the Green investment bank. Lots of good initiatives scattered around the country are beginning, but small projects often find it difficult to access institutional funds, and small pension funds do not want to get too heavily involved in lending to one particular scheme. A housing investment bank could link up investors who might want to invest—including smaller investors—with borrowers and smaller schemes, and the risk could be spread across those schemes, thereby making the investment more attractive.
Ian Lucas (Wrexham) (Lab)
On speaking to builders in my constituency, it is clear that small-scale construction is supported by individuals buying properties to let, rather than first-time buyers. It seems that considerable numbers of people who want to invest are currently using the buy-to-let market but might be interested in a new type of investment vehicle, provided there was a satisfactory return.
Mr Betts
Yes, and as well as individuals, some potential larger housing providers, which are going to talk to the Committee as part of our private sector inquiry, are anxious to access institutional investment. They want to build properties and manage them in the long term, which is an interesting way forward for the private rented sector. A housing investment bank could provide a significant push in that area.
The Committee visited the Netherlands, which has a similar arrangement. Interestingly, their Government underwrite and guarantee funding that is raised and borrowed by their equivalent of housing associations, but it does not count as Government borrowing. The Government’s response to our proposal on some form of investment bank was that they would keep it under consideration. So, after a year, what has the Minister considered? I am sure that the answer will form an interesting part of his response.
Since then, the Future Homes Commission, which the Royal Institute of British Architects was instrumental in proposing, has had a similar idea: a £10 billion local housing development fund provided by 15 local authority pension funds. The Government told us in response that they would await the Montague report. Of course, Montague said that he did not believe that guarantees were appropriate because they distort the market. The Government have since introduced their £10 billion housing guarantee. They waited for Montague, heard what he said and promptly dismissed it. That is probably an unfair characterisation of the process.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
My hon. Friend makes an interesting point about the guarantee, but is not the most extraordinary thing that the guarantee was announced last summer as a key measure to get shovel-ready schemes going quickly, and here we are, nine months later, and not a single scheme has benefited from the guarantee? It is simply a fig leaf to cover the Government’s embarrassment.
Mr Betts
I am sure that the Minister will have a response on when the guarantee will get the shovels digging. The idea of a guarantee is not a bad one if it works, but perhaps it should be linked to some wider proposal for an investment bank. Something that came out in our recommendations is that, if there is a limited amount of public money, it can sometimes work for the best by assisting to leverage in private funding and by providing some guarantee for that private funding. We can then make the most of the two sources of funding together.
George Hollingbery
Will the hon. Gentleman develop some thoughts on how the enormous social housing assets on the books of housing associations might be leveraged? Perhaps he will reflect for a moment on the potential difficulties of governance structures and on having hybrid public-private bodies that would guarantee the public role of housing associations but allow access to private capital.
Mr Betts
On the second point, I can see the problems. I do not think that we went into that issue in detail. I have been involved in such bodies in the past, and the important thing is to recognise that, yes, there can be issues and to try to resolve them right at the beginning. I will say a little more about housing associations in a second if the hon. Gentleman will allow me.
We looked at real estate investment trusts, which are close to the Minister’s heart—or perhaps not quite so close. We wondered why, after years of having them, no one seemed to be using them, certainly not for housing purposes. We had some challenges about how the Treasury treats investment and trading profits for tax purposes and whether that could be changed. It appears that the Government have gone a bit cold on REITs and do not see them as a solution, but I am sure that we will hear more from the Minister.
On social housing, there was a recognition—we might have different views about its appropriateness—that the Government had cut social housing funding over the comprehensive spending review period by 60%. Effectively, the Government are relying on housing associations in particular to increase rents towards 80% of market values on new properties and perhaps on existing properties to help to fund their balance sheets. Rents are rising to take up the slack from the reduced social housing grant that is available.
The National Housing Federation and housing associations told us clearly that they were concerned that this model would not last much beyond 2015. They did not think that was workable in the long term. They asked for some certainty about what would happen, so that they could enter into borrowing arrangements. The Minister for Housing told us in his response that he accepted that point and that the Government would look at it closely. It would be helpful to know what the Government’s response is now, because it is clearly an issue.
Moody’s has downgraded the credit ratings of 26 housing associations, and we are getting to the tricky issue of direct payments, which the Select Committee considered. The National Housing Federation certainly told us that it thought that a number of associations would end up paying more in borrowing costs because of the associated problem of rising arrears. We welcome the Government’s commitment to the pilots, which are going ahead, and we have had further information during our more recent inquiry into the impact of welfare reform on local authorities. We will reach some further conclusions about the direct payment issue. Clearly, the Government must be aware of the impact on housing associations.
Returning to the point the hon. Member for Meon Valley (George Hollingbery) raised a few moments ago, the Committee recognised that there are a number of ways to get more leverage from housing association assets, and people gave evidence on what they were doing in that regard. It is interesting that only yesterday the G15, the 15 big housing associations in London, made an announcement about a common investment vehicle to raise money to enter the private sector housing market. That is one way in which the solidity of their balance sheets is helping them to raise money for a purpose that should, in the longer term, be self-funding. These are interesting ideas.
The Committee also looked at the housing grant. The so-called grant is sat on the books of housing associations and is counted as a debt. Changing that to a genuine grant or equity could release a lot of funds for investment, and is clearly supported by the housing association movement. We suggested that the Government look at that, because we recognised that there could be problems with overloading some associations in some circumstances with too much debt. Nevertheless, we thought that in principle it was an idea worth considering. We hope Ministers will look at it, because some of the stronger, more robust housing associations might want to pursue it. We have to be cautious, however. What might be right for associations such as the G15 in London, where the private market is buoyant and rents are appropriately high, will not be right in other parts of the country where there is not the same ability to leverage funds. We have to be careful and recognise that a one-size-fits-all solution is not necessarily available.
The Committee looked at the role of local authorities. They have not been great contributors to new house building in recent years, and we ought to change that. We welcome the housing revenue account reforms, because they give local authorities the opportunity to take investment decisions, but why, of all the investments made by local authorities, is housing the only form of investment that is controlled beyond prudential rules? Why is it different? It is a ring-fenced account. It should be in the other direction: it is a safer form of borrowing for authorities. It is not only the Local Government Association, but councils such as Westminster, Kensington and Chelsea and Hammersmith and Fulham that are saying, “Get rid of the artificial cap that has been put on housing revenue account borrowing. Why is it there? Why can we not rely on the prudential rules that are in place for all other forms of local authority borrowing?” Ministers always have fall-back powers under the Local Government Act 2003 if they need them. Why can that not be relaxed to allow more borrowing and building?
Heidi Alexander (Lewisham East) (Lab)
Is my hon. Friend aware that in lifting a cap, local authorities could deliver 600,000 new homes over a five-year period if additional borrowing was available to them? Sorry, that should be 60,000.
Mr Betts
I would be more supportive of the 600,000 figure, but we probably cannot deliver that with the money available. My hon. Friend is absolutely right. She anticipates the “Let’s Get Building” report produced by the National Federation of ALMOs, the LGA and the Chartered Institute of Housing, among others. It makes the point that if the cap was lifted the amount of borrowing local authorities could enter into would rise from £2.8 billion to £7 billion. That would allow the building of 60,000 homes and put a lot of people into work. It just seems to be a simple solution. It does not require the Treasury to go out and find any money to subsidise that borrowing, because it is a ring-fenced account, a trading account, and Ministers need to accept that.
The Committee’s report suggests that some authorities may not want to go ahead, because they do not have a housing need. Why can there not be a swapping or trading of borrowing amounts between local authorities? The Government allow and encourage sharing between local authorities on a whole range of areas, so why not on this too? We raised with them the possibility—we did not say they should definitely do it—of changing Government borrowing rules in respect of the general Government financial deficit. To return to our visit to the Netherlands, the Dutch Government guarantee housing borrowing for housing associations, yet it does not count as Government borrowing. It is a problem in this country that Treasury restrictions weigh heavily on local authority borrowing, particularly in this area.
We welcomed the proposed new models of governance for arm’s length management organisations, which, with more tenant involvement and more co-operative-type structures, could borrow in the private markets, as housing associations do. We also made recommendations concerning the right to buy—about trying to ensure one-for-one replacements and about how the Government could help facilitate that—and giving more freedom to local authorities in terms of discounts in areas of great housing stress and to housing associations that might want to enter the right to buy, where they think it right for their portfolios—that comes back to the point about using portfolios in a way that benefits housing associations. We face the great challenge of moving to a better situation in which we subsidise building, not benefits. That is a long-term problem going back to the 1980s—and even earlier—and the change from subsidising the building of homes to subsidising the high rents of people living in those homes. That is a major challenge for all of us.
George Hollingbery
I am grateful to the hon. Gentleman. He is being very generous with his time. In a discussion on this subject last night, a structural problem in the market was raised: a lot of social housing is leveraged out of market housing, so in a time of much lower market housing production it is more difficult to build social housing. This point was not in his Committee’s report, but does he think that a change is required there?
Mr Betts
There is a problem when market housing is not being built. It is because of the over-reliance on section 106 housing in the past. I know the Government have proposals to encourage, if not force, local authorities to renegotiate the terms of 106 agreements to make market housing more viable. I have reservations about that—it was not something the Select Committee considered in particular—although we recommended that any changes to 106 agreements be left to local discretion. The hon. Gentleman makes a valid point, however, about the comfort of relying on section 106 agreements to provide housing. There are two problems with that: first, when the market collapses, there is not the alternative balance of social housing to replace it in the construction industry, so that element falls at the same time, and secondly social houses are not necessarily needed in exactly the same places as market houses.
Mark Pawsey (Rugby) (Con)
I am sure that the hon. Gentleman will agree that for some time local authorities have had the power to renegotiate their section 106 agreements in order to move away from an arbitrary set figure for social housing. Perhaps the Government should be encouraging local authorities to do that, rather than dictating to them.
Mr Betts
That is absolutely right. I completely agree with the hon. Gentleman. As we know, many local authorities of all political persuasions are doing just that and being sensible about it.
The Committee made a recommendation about self-build—or rather self-contracting, which is what we probably saw at the massive site at in Almere. When I was told, “You’re going to see a self-build”, I expected to see the teacher, the bank manager and the postman in their wellies and overalls on a Sunday morning digging away and laying the bricks, but that was not what we saw. We saw a local authority site on which individuals had bought plots at a given price and with limited restrictions on what they could do—some areas were reserved for bungalows and others had a three-storey height limit, and obviously there was a boundary to the site. These individuals had either contracted a local builder or designed their own homes on the internet, as we saw at one place we visited. In effect, they had contracted their own homes. That seemed a brilliant way forward. I see no reason why we cannot build 50,000 self-build homes in this country, instead of the 10,000 we build at present. That could go a long way to meeting the gap. We found that people were satisfied because they had the homes they wanted with the money they had. They did not have to have something off the shelf that did not really meet their needs. Their homes were being built for only 75% of the cost of a similar home from a volume builder.
There are clearly challenges in getting the whole thing up and running. I welcome the Government’s £30 million of funding to try to encourage such activity. How far have we got? I have not yet been invited to the turning of the first sod on such a site, let alone the first home to be finally built and opened, so I suspect we have not made as much progress as we might have. I think all members of the Committee who went were enthused by self-build and thought it was a good way forward. It needs a push from the Government and local authorities to release land—it might need the Ministry of Defence to release some—but it seemed an excellent way forward. Self-build also helps small builders, who have been hit more by the recession of the last few years than the volume builders have, because they cannot get funding from the banks and face real difficulties. The challenge with self-contracting is to get the building societies and the banks to understand that they can lend money on a house that does not yet exist and—because people have to live in one home while the other is being built—to put bridging arrangements in place. In the end, however, people end up with something that costs only 75% of its market value, so we really ought to push on self-build.
Our report is not a complete solution to all our housing problems. It is not right in every respect, but it contains a number of proposals, and if the Government made a clear commitment to implementing them—not necessarily all of them, but a significant number—that would go a long way towards delivering the 250,000 new homes that this country so badly requires.
George Hollingbery (Meon Valley) (Con)
I have the unenviable task of following the eloquence of the Chairman of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), who spoke without notes and made extremely important points about the report. If he will excuse me, I will not be quite as rigorous or eloquent.
Housing is obviously an incredibly important issue for us all, not just for getting future generations somewhere decent to live, but for this country’s future economic prosperity. Without substantial improvement in our building rates and the production of new housing supply, our economy will struggle to grow, and we need it to grow. The Chartered Institute of Housing released a report just this month that said that home ownership was unachievable for many young people. The report suggested that since 1992 it is down 67% among those aged 25 to 34. That is a pretty stunning statistic. The average age of the first-time buyer is now approaching 40, at 37.5. It now takes 83 months to save the deposit required to buy a house, compared with the 30 months it took 10 years ago.
At present, investors, builders and the market seem reluctant to invest in new housing, despite large waiting lists. Locally, we have 3,000 people on the housing waiting list in Winchester, 2,900 in east Hampshire and 4,500 in Havant. These are prosperous areas of the country, where one might expect the lists to be rather shorter. The current economic cycle has led us to a situation in which lenders are reluctant to lend, builders find it difficult to build and buyers find it difficult to buy.
Mr Stewart Jackson
My hon. Friend is making a powerful point. Does he agree that a key issue is not that lenders do not wish to advance moneys, but that they do not have the appropriate flexible intermediate products to support intermediate housing across the country? Those unable to lay their hands on a 30% deposit, for instance, are therefore in a difficult position and are having to look at social rent or affordable rent, rather than an intermediate product.
George Hollingbery
That is indeed the case; my hon. Friend will forgive me if I come to that in a moment.
Several Government schemes are helping. They have been slow to start, but they are now moving forward. With the exception of areas such as London, uncertainty has also meant that potential buyers have been unwilling to take on what is frankly one of the biggest financial decisions of their lives. If we look rationally at the decision to buy a house at the moment, is this really the time to take on, say, £200,000 of debt? People might not be sure about their job or their future. Can it be an enormous surprise that an awful lot of people are very reluctant to take on such a commitment at this time? Frankly, I do not think so.
Despite low interest rates and a number of Government schemes—such as Firstbuy, NewBuy, “Buy now, build later”, intermediate rent and others—there is an acceptance that more still needs to be done. To date, nearly 3,000 homes have been sold through the NewBuy scheme, but, at a time when we are deleveraging our economy, the financing of new housing is undoubtedly going to continue to be a challenge.
Some reports suggest that up to 50% of new starts being contemplated by certain major house builders are down to NewBuy. The scheme seems to be taking effect, with 60 house builders now offering products through it. The figures for January 2013 show that new housing starts under NewBuy are 30% up on the same time last year. The progress is definitely slow, but there is some encouragement. Given the fact that taking on a debt is a serious commitment at this time, that is not bad going.
An article in the Financial Times today alludes to that point, and to some of the other measures that the coalition plans to introduce, and I shall quote from one or two parts of it:
“The prime minister and his deputy are set to make a joint appearance on the eve of the March 20 Budget to make several announcements, including shared equity schemes, social housing and support for first-time buyers…At the housing launch, Mr Cameron and Mr Clegg will flourish the promise of ‘garden towns’, more flats above shops and an expanded private rented sector. Ministers have discussed the radical option of extending an existing scheme, NewBuy, which allows people to buy homes with a deposit of 5 per cent, from new developments to older homes.”
I would just comment that a couple of those announcements do not seem to be that new, but I hope that when they are made in a couple of weeks’ time, they will be made with a little more commitment and determination than they were before.
George Hollingbery
Indeed.
The coalition has rightly taken a localised approach that incentivises housing policy, and good work is taking place on freeing up public land and opening up new opportunities to increase supply. Changes to the housing revenue account devolve real power and budgets to local councils to deliver housing, although, as the Chairman of the Select Committee pointed out, some freedom in relation to the caps on borrowing requirements would be welcome.
Areas such as Denmead in my constituency have become pilots for the Government’s neighbourhood planning approach, and some are contemplating more housing than has been allocated to them in the local plan. That is to be welcomed. The new homes bonus has also been a welcome incentive to encourage extra housing. To date, Winchester city council has received £1.5 million under that scheme, East Hampshire has had £1.4 million and Havant has had just shy of £500,000. This financial boost, allowing councils to invest directly in new homes, has also benefited the two unitary authorities of Southampton and Portsmouth, which have received £2.5 million and £1.7 million respectively. Those are only a few examples from the package of measures included in the Government’s housing strategy, which is designed to help increase supply. It has to be admitted that the measures have had a slow start, but they are welcome. They are the right idea, and the Government are doing a great deal to try to push the market forward.
What more should the Government do? The report that we are examining today concluded that there is no panacea or silver bullet to solve the problem of our housing deficit. I have no doubt that the Committee’s 33 recommendations will have been looked at more carefully by now, and I look forward to the Minister clarifying which of them he is considering.
At the heart of the report lie two themes: encouraging institutional investment and promoting action from local authorities. The Select Committee’s report is clear on the first theme of encouraging institutional investment, and I shall quote from it at some length:
“Institutions and structures that have traditionally ignored housing should be encouraged to invest. Increased investment from large financial institutions and pension funds may not be a panacea, but could make a significant contribution to the building of new homes in both the private and social rented sectors. Public sector bodies and housing associations should take steps to encourage institutional investment. Vehicles such as Real Estate Investment Trusts should be revamped to encourage investment in housing. The Government should also consider whether the remit of the Green Investment Bank can be expanded to cover housing and, potentially, wider infrastructure projects.”
As we have heard, the local authorities in the Association of Greater Manchester Authorities area are working to leverage their pension funds into investing directly in housing. That is something that their pensioners should welcome. Pension funds need long-term, steady returns and if public moneys can be leveraged to produce more of that in such a creative way, we should all welcome it.
The Select Committee’s report also builds on the good work that organisations such as the Joseph Rowntree Foundation have been doing. The Committee believes that we should be unlocking institutional investment and allowing for real delivery into the sector. It was noted, however, that progress in that area has been slow, and that institutional funds were somewhat difficult to access. The Government recently commissioned the Montague report, which focused in particular on the private rented sector. The report reinforces the concept of push and pull factors that can serve either to incentivise or to discourage investment.
Locally to Meon Valley, Winchester city council and Grainger, which I think is one of the more innovative suppliers in the private sector rented market, have been working on managing these factors while delivering the west of Waterlooville development right in my constituency. I was the chairman responsible for the delivery of the vehicle for this development while a city councillor in Winchester. The council has been looking at section 106 and community infrastructure levy obligations among many other factors to make sure that this development is a success. I know that planning and housing Ministers are looking into this difficult area of policy to try to free up the rules to ensure that the build-to-let market is freed up, allowing more accommodation to be built.
Mr Jackson
My hon. Friend is making a polished contribution, but does he agree that the big hole in the report is the issue of extra care? Given the demographic time bomb, the number of over-85s will double in the next 20-odd years. At the moment, housing associations shoulder the burden for producing appropriate accommodation for elderly people in extra care facilities without any particular tax incentives or assistance from any other agencies, including institutional investors.
George Hollingbery
I am grateful to my hon. Friend for making that point. I chaired a conference in Winchester only six months ago on exactly that issue, and I have made representations to the planning Minister, my hon. Friend the Member for Grantham and Stamford (Nick Boles), saying that at the very least we need some incentives or recommendations in the national planning policy framework for local authorities to examine the need for provision for older people. It seems to me that in the long term that is the way to get the very best out of existing housing stock, let alone to provide good housing stock for older people in the longer term. I agree wholeheartedly with my hon. Friend the Member for Peterborough (Mr Jackson) and believe this area needs to be looked at across government to make sure that we plan more carefully for the needs of older people.
The second theme is the importance of local authorities and how much more can be done by them and by housing associations. In Hampshire, we are starting to see local authorities make a real difference in housing provision. In February, Isle of Wight council introduced a scheme to help first-time buyers, while Southampton has an estate regeneration project that is making great strides. Real differences are emerging in housing starts and in some areas schemes are proving seriously successful—in fact, occasionally, too successful. I have not encountered this personally, but I have recently been told that Wigan council had to close its £1 million scheme to help first-time buyers after only a month because all its funding had been used up. Further afield, the Scottish Government are introducing a £20 million scheme to help people with shared ownership. This is another way of incentivising supply that should not be ignored. The Government need to get behind local authorities and create a repository of knowledge and good practice that can be shared right across the local government community. I have no doubt that the Local Government Association will be involved in work of that sort.
The Select Committee talks about two areas that could make a real difference. It makes suggestions on looking at increasing the borrowing limits for housing revenue accounts, as well as on promoting the right to buy. The Select Committee Chairman has covered the increase in borrowing limits reasonably thoroughly so I shall not go back there, but the latest figures show a slight increase in right-to-buy requests in Southampton, Portsmouth, Fareham and Winchester. Much remains to be done in this area, but we discussed at some length in the Select Committee the need for one-for-one replacement to be guaranteed in certain circumstances, particularly in small rural villages. If we do not replace a social house with another social house—and nowadays, frankly, it might be the only social house in a small village—there will be no social housing left at all, which is an important issue.
Another area of note is provision of housing for older people, but I have covered the issue and as I said it was mentioned in today’s Financial Times article.
Housing has a significant potential to help economic growth. In 2009, the Chartered Institute of Housing wrote a report suggesting that buy-to-let alone contributed £5.2 billion to the economy in just the south-east of England. The importance of housing in respect of the general economy cannot be underestimated. Realising the growth required in the housing supply market is tough, given the economic circumstances we face, but it is vital that we encourage housing associations and local authorities to take action to promote growth.
The Government are making real strides. Lots of schemes are beginning to work, and I welcome them all. The issue is not just about the need for more housing, however, as it is about the future of our economy as a whole. It has to remain absolutely at the heart of Government policy if we are to get our economy back on its feet and if growth is to be achieved. I hope that the announcements mentioned in the Financial Times prior to the Budget genuinely provide a kick-start to the industry. As far as I am concerned, it is very much needed for all of our futures.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
Let me begin by drawing attention to my interest as declared in the Register of Members’ Financial Interests. Let me also congratulate the Chairman of the Select Committee, my hon. Friend the Member for Sheffield South East (Mr Betts), on his excellent introduction to the debate, in which he highlighted a number of issues on which I think there is a large measure of consensus.
It is a pleasure to follow the hon. Member for Meon Valley (George Hollingbery). I did not agree with everything he said, but there was also a large measure of consensus between the views that he expressed and those that I shall express in my own speech. It is curiously frustrating that, at a time when there is such a large measure of consensus between those who have looked seriously at the issue of housing and what needs to be done, the housing position in the country is so lamentable.
Our output level is falling. According to the DCLG’s own statistics, in 2012 we started only 98,000 homes. That is not just massively below the 230,000 level that is generally recognised to be necessary, but 11% down on the inadequate levels achieved in 2011. An already bad situation is getting worse, not better. According to the latest figures from the National House Building Council—I received my copy only yesterday:
“NHBC data show private sector housing starts down 13% in the three months to the end of January, compared with the same period a year earlier.”
We must ask why that is happening. A number of contributory factors have already been identified, but I think that four are fundamentally important. The first, on which the hon. Member for Meon Valley focused, is a lack of confidence in the market. People are very cautious about investing at the moment, which is hardly surprising given the state of the economy and their nervousness about whether they will have a job, and also their nervousness about whether the house that they are thinking of buying will be worth as much in a year or two. Prices in many parts of the country—I do not include inner London, where the circumstances are probably rather exceptional—have been iffy. In some places they have declined and in others they have shown modest growth, but there is little ground for real confidence. I am not advocating a return to the hyper-inflation in house prices that we encountered during the booms of the 1970s, 1980s and the noughties, because they were unsustainable, but at a time when there is no confidence at all, it will be difficult to get the market going because people simply will not invest.
Secondly, when people are prepared to take the risk, they face real difficulties in obtaining mortgage finance. It is a classic instance of our reacting to over-generous lending during the boom years by allowing the pendulum to swing too far in the opposite direction, and to get stuck in a position where it becomes a serious obstacle. Anyone who has looked closely at the figures will have noted that many people who are currently struggling with high rents in the private sector could probably support the cost of a mortgage easily if they were able to get one, but the demands in terms of deposit requirements or the interest rates charged in the case of high loan-to-value mortgages make that impossible.
Yesterday the hon. Member for Rugby (Mark Pawsey) and I attended the launch of that much-respected document “UK Housing Review”. Looking through the rather voluminous set of useful housing data, I spotted the latest figures relating to the current mortgage cost-to-income ratios for first-time buyers. They are at a very low level: 17.6%, one of the lowest levels in the last 30 years. The figure was 24.6% in 2007, at the end of a boom, and 26.9% in 1990, at the end of another boom. It is not that house buyers need a disproportionate level of income to pay a mortgage, if they can get one—as I have said, some are paying rather more in rent than it would cost them to service a mortgage—but that we have to find a means of helping people to obtain a mortgage if they are prevented from getting one.
Thirdly, there has been a drastic fall in public investment. The Chair of the Select Committee highlighted the Government’s decision, as part of the spending review announcement early in their lifetime, to cut spending on social and affordable housing by 60%. Output has, inevitably, plummeted, with housing association starts in the latest 12 months totalling just 19,500, which is 23% down on the equivalent period for 2010-11. Affordable housing is doing worse than the housing market overall, which is obviously a particular concern for all those people who depend on obtaining accommodation at a reasonable rate.
The fourth element in this overall package is the very uncertain planning environment, which is entirely of the Government’s creation. They decided to tear up the previous planning framework and to create a new planning system. Many of us warned before the last election that not only was that likely to cause uncertainty, which would be damaging to development and to confidence, but it would open the door to an awful lot of nimby instincts among people who have, for a variety of reasons, been opposed to new housing development. I am afraid that the evidence clearly shows that that is what has happened. Councils are planning 272,000 fewer homes than would previously have been expected, according to Tetlow King Planning, and the level of new planning consents going through remains massively below the level required to meet the country’s needs. So there is a problem with planning as well as with the other factors that I have identified.
George Hollingbery
I am wondering whether the right hon. Gentleman might reflect a little more on those remarks. The provisions of the national planning policy framework make it clear that if a local council does not have a five-year housing supply, a permission is almost certain to be granted, wherever it is. I have just spent three interesting weeks in Eastleigh, where an application was allowed in the middle of the campaign for exactly that reason. Does he suspect that one reason for the number of planning applications being down is that lots of developers know that they cannot actually build the houses so applying for those permissions is a little futile at the moment? When they do want them, the NPPF’s requirement on having a five-year housing supply is making sure that they happen.
Mr Raynsford
The hon. Gentleman makes a perfectly fair point, but I put it to him that confidence is the crucial element in planning. If developers are to do the very expensive work necessary to put a planning application together, they have to feel confident that they have a reasonable prospect of success. A very uncertain climate has been created by the abolition, or partial abolition, of the regional spatial strategies; the lengthy row about what the NPPF would say; and the subsequent chopping and changing that have taken place, including the ill-considered measures in the ill-named Growth and Infrastructure Bill, which, once again, tinker with the planning procedure only months after it was put in place. That inevitably creates uncertainty, to which we can add the uncertainty about whether councils have got their local plans together in time. There has rightly been a lot of pressure on them to get their plans in place, but some have been less good than others at doing that. There is also clear pressure coming from various sources; the hon. Gentleman will have noticed in the context of the Eastleigh by-election that some members of his party were clearly keen not to agree to the particular planning for the housing scheme to which he referred. In that situation, there will inevitably be less scope for securing planning consent—or less incentive to apply for planning consent—than would otherwise be the case.
George Hollingbery
I ought to point out that I actually spoke against that particular application, although I have not done the same in respect of many applications in my own district. The point remains that Eastleigh borough council has not got an extant local plan; its last one expired and its new one has not yet been approved. It does not have an identified five-year land supply and the NPPF’s provision about having one came into effect immediately, so the council recognised that it had absolutely no option but to grant the permission. So the mechanisms are in place, and most councils will find it difficult to resist such applications now.
Mr Raynsford
I will not prolong this exchange, because we have already discussed the matter at length and I wish to cover other issues. All I say to the hon. Gentleman is that we should watch what happens, but I am not confident that we will see a large upsurge in the number of planning applications and consents.
Mr Raynsford
I am interested by the agreement between the coalition partners but it reinforces my point about the lack of certainty being a deterrent.
Mark Pawsey
The right hon. Gentleman referred earlier to the regional spatial strategies. Does he consider them a success?
Mr Raynsford
When the regional spatial strategies were in place, the housing output was substantially higher than we are seeing now. Government Members sometimes forget that from 2000 to 2007, before the impact of the recession, there was continuing year-on-year growth in the supply of housing. It reached 180,000 new starts in 2007, since when it fell—not because of planning but because of the recession—so that we are now seeing starts of fewer than 100,000. I would not say that the regional spatial strategies were entirely satisfactory, but the output of housing under them was substantially higher than it is today.
I have spent too long, I think, on those issues and I need to move on. Behind the statistics I have talked about are a huge number of human tragedies: all the young families unable to get a home within their means, all the people trapped in hopelessly overcrowded or squalid conditions, the huge numbers languishing on local authority housing waiting lists and the number of homeless households, which has been rising again after many years in the noughties during which the numbers came down.
Quite apart from the human consequences, there are economic consequences, too. As our economy is in difficulty— everyone who has spoken has acknowledged that housing has a critical role to play in helping to boost the economy—we must consider ways of helping to increase the output of housing. What should we do? First, we must ensure that the economic climate is one in which people can feel more confident about investing, in which people are willing to buy homes and in which house builders are willing to invest more in development. That is fundamental. Whatever else we do will make some difference, but it will not make an adequate difference if the economy is not strong. We need to turn around the economy first of all.
Secondly, we must ensure that housing is directly assisted by measures that can ensure that confidence returns and that houses are provided by developers and bought by people who want to get a mortgage. I have talked about the tight restrictions on mortgage availability and the fact that it seems to me that the pendulum has swung too far in the other direction after the boom years when the restrictions were excessively loose. We must send a powerful message that the test should be whether people have the means and the capacity to repay the debt, rather than the loan-to-value percentage that is too often used in a mechanistic way by lenders to determine credit-worthiness. If we focused more on people’s ability to repay, we could relax some of the restrictions that prevent people without the adequate means for a deposit from getting into owner-occupation.
We also need to do a lot more to assist those people who cannot afford outright home ownership but would be happy to buy a share in a property. Over 30-odd years, various schemes for shared ownership, shared equity and low-cost home ownership have had some success, but they have tended to be marginal. Although NewBuy and Firstbuy are perfectly admirable schemes in their way, they are still relatively marginal. The Prime Minister talked about NewBuy helping 100,000 people when it was launched, so when we hear from the hon. Member for Meon Valley that some 3,000 homes have been delivered so far that puts it in context. It is important and significant, but it is relatively marginal.
We must also ensure that there are other options to help people who are not looking for a new home purchase. I am cautious about the idea of extending the NewBuy formula to existing homes. I think about—I am sorry, it is one of the problems of being old—a scheme known as DIYSO, do-it-yourself shared ownership. Those who have long memories of housing will recall it. It was very popular. People liked the idea of being able to go out and select their own home and get a shared-ownership mortgage on that home. It did, however, prove extremely expensive. It also had an element of risk because there was no guarantee that it would be a newly completed home that was subject to the various checks that apply to a new home. In some cases the properties that were being bought under the DIYSO scheme were not suitable. I can hear the attraction of the message. I read it, like the hon. Member for Meon Valley, in today’s Financial Times, but I caution against putting too many eggs in that basket. However, it is important that we renovate existing homes and make them available for people, possibly through shared-ownership/shared-equity means, as well as building new homes.
I shall talk briefly about energy efficiency and housing. This is an area where there has been a great deal of poor information, inadequate information and prejudice. I feel very nervous that the voices that are hostile to improving the energy efficiency of housing are getting in the ascendancy. Some rather pernicious views are being put forward that somehow this is putting an impossible burden on house builders. The example that I will take is a simple one. It is a scheme known as AIMC4, which has been put together with the participation of some of the largest house builders, including Barratt. The purpose was to demonstrate that they could build a code level 4 home under the code for sustainable homes for no more than the cost of a code level 3 home. That scheme has succeeded; they have demonstrated that it is possible.
That is the challenge we should adopt to ensure that our new homes are built to a high standard, that they achieve energy efficiency, that they contribute to our commitments to reducing global warming and that they do so in an economic and cost-effective way. We should not to try to ditch the whole commitment to the greening of our existing housing stock and improving the standard of our new housing. That is a very important message. Also, there is the economic message that this will help the economy, because green investment and the development of some of the industries that will support more energy-efficient housing will be helpful to the UK economy.
I agree very much with the hon. Member for Meon Valley about the importance of housing for older people and providing them with appropriate housing which, in turn, can release homes that are currently under-occupied. There is something rather unfortunate about a Government demonising many tenants in social housing who are occupying one bedroom more than they might need, on some pretty tight definitions of need, when two children of the same sex are expected to share a bedroom right up to the age of 16, and two children of different sexes under the age of 10 are expected to share a single bedroom, so no single bedrooms for children are allowed.
That definition is being used to justify some pretty punitive cuts in benefit while at the same time there is a huge level of under-occupation among older people, particularly in the owner-occupied sector but also in the rented sector, on which no action is being taken. That seems to me to be unfair and it is a policy that will not achieve the effect that it should.
Mr Raynsford
I am afraid the right hon. Gentleman is wrong. Can he tell me whether elderly people are exempt from those rules in the private rented sector? They are not. That is the point that I was making. If this was a serious policy to try to reduce under-occupation, it would apply more widely, as I said, and it would also apply to people over retirement age. The rules being implemented by the Government apply only to people below retirement age, even though the Government know that it is predominantly among older people that under-occupation is a problem. I will be quite open and say that the right policy would have been to consider a deduction, but only if two factors apply. First, there should be an option to move to smaller accommodation, but in many cases there simply is not that option and it is grossly unfair to cut people’s benefit where they have no chance of moving to smaller accommodation. Secondly, it should apply only where people have two bedrooms more than they require because of the tight space and occupancy standards that apply. That should apply to everyone, including those over retirement age. That would be a far more effective policy in achieving the objective of getting better use of our stock than the policy that the Government are pursuing. I make that point in addition to my general point about providing more suitable accommodation for older people in order to free up accommodation that is under-occupied.
I support what the Chair of the Select Committee said about removing the cap on council investment. That is nonsense. When councils have the scope to borrow more under the prudential borrowing regime, when there are safeguards in place through that regime, and when local government debt is at an historically low level, it is absurd to deny the option of creating the means to get further investment in new housing. There should certainly be more support for that and a removal of the cap. There should also be a willingness to engage with housing associations about what happens in the post-2015 world, because they are literally running out of time and running out of scope for continuing development. It will be an utter tragedy if one of the more successful organisations producing housing in this country in recent years simply grind to a halt in terms of their traditional product of social housing because of the absence of a Government programme. There are real needs in terms of the social housing sector as well as the owner-occupied sector.
I come now to the strange beast of the new homes bonus. This is a rather expensive element of Government policy. Already it has cost £1.3 billion. Some of that has been taken from Peter to pay Paul because some of it is recycled from local authorities to other local authorities, but about three quarters of a billion is additional Government money. That £1.3 billion will rise to £3.3 billion because the scheme involves payment over six years. That commitment to £3.3 billion is a lot of money and, at the present rate of growth, the scheme will involve more expenditure than the total Government investment on affordable homes over the lifetime of this Parliament, so it is worth examining how it is operating. I have already referred to the disastrous and declining level of new housing starts, so it is clear that the scheme is not affecting those. The total level of new planning consents last year was 115,000, and in the first three quarters of 2012, 95,000. It seems likely that it might reach a level of about 125,000 when we have the figures for 2012, but that compares with 212,000 in 2007 and 134,000 in 2010. The Government will have been presiding over a lower level of consents for residential planning than ever before, which is extraordinary when they are spending £3.3 billion in supposed incentives to encourage more planning consents.
Mark Pawsey
The right hon. Gentleman and I had an exchange on this at the Chartered Institute of Housing event only yesterday. The fact that my local authority will benefit from the new homes bonus has greatly contributed to local people accepting the principle of a substantial new housing development in the community. That is not included in the right hon. Gentleman’s figures because the application has not yet come in, but it will benefit my community because the local authority will have the funds generated by the new homes bonus to put towards facilities for the community as a whole. That is one reason why it is taking a while; the applications have not yet come in. The right hon. Gentleman needs to be rather more patient than he has been so far.
Mr Raynsford
As I said to the hon. Member for Meon Valley, let us look at that in a year’s time, when we will have more evidence. However, I must say that it is taking a very long time for something that is supposedly, to use the Government’s own phrase, a “powerful incentive” for authorities to give planning consent for new housing. I hear what the hon. Gentleman says about his local authority, but I am afraid that the figures do not support his optimism. For the 17 authorities that have received the largest amount of new homes bonus—this is all based on an answer to a parliamentary question I asked the Housing Minister earlier this year—the level of major residential schemes getting planning consent in 2011-12 was 607, compared with 969 in 2005-06, a 37% reduction and 10% below the previous year, so there was no growth at all. It does not look convincing for a very large outlay of public money. The £3.3 billion, if it were applied to direct investment in new housing, would certainly be likely to achieve far better consequences.
I put it to the Government that if they are keen to stimulate house building and the economy, greater investment in housing will be necessary. What has been put forward by the Select Committee and argued for by Members on both sides of the House this afternoon is a way forward that could get us out of the mess we are in and ensure an increased level of house building. That will meet important social needs and help to revive our economy. The case for it is overwhelming. I sincerely hope that the Government will recognise that the current policy is not the right way forward. We need a change of policy and we need some of the policies we have been talking about today to be put into effect to secure that increase in house building.
Mark Pawsey (Rugby) (Con)
It is a pleasure to follow the right hon. Member for Greenwich and Woolwich (Mr Raynsford), whom I know has spoken on housing in this Chamber for many years. It is also a pleasure to speak as a member of the Communities and Local Government Committee, whose report we are debating. I pay tribute to its Chair, the hon. Member for Sheffield South East (Mr Betts), who brought together Members from both sides of the House in the Committee to produce a report that we were all happy to put our names to. He referred earlier to the report’s key finding, which is that there is no “silver bullet” for removing the housing deficit our country faces. The report goes on to state:
“Many of the measures in the Government’s housing strategy will provide a welcome boost in the short to medium term”.
I hope to demonstrate that the pessimism exhibited by the right hon. Member for Greenwich and Woolwich is misplaced.
We know the serious problems we face. Many Members have referred to the need for some 230,000 new homes every year until 2033 just to cope with the increase in household formation. The other factor we must take into account in our deliberations is the state of the economy that the Government inherited. Of course, there will be many areas relating to the financing of new housing where the Government would wish to spend more to achieve more, but we must recognise that at present that is simply not possible. Housing is important not only for providing homes for our people, but for our economy. The previous Housing Minister reminded us that every 100,000 houses built adds 1% to GDP. We certainly need that growth in our economy. The National Housing Federation, which provided a briefing for the debate, tells us that every affordable home built generates an additional £108,000 in the economy and creates 2.3 jobs.
I will speak about each sector in turn: the Government’s initiative in the private sector, the importance of the private rented sector, and changes the Government are making to the social sector. I make no apology for starting with owner-occupation, because fulfilling people’s aspiration to own their own home is a key principle for Conservative Members. As the Prime Minister said in his party conference speech last year,
“We are the party of home ownership.”
Over the past few years home ownership, which currently stands at 65%, has been falling. Lots of statistics abound. My hon. Friend the Member for Meon Valley (George Hollingbery) said that the average age of a first-time buyer is now about 37. It is therefore entirely appropriate that the Government have brought forward schemes to stimulate owner-occupation, of which three are key: NewBuy, First Buy and Funding for Lending. The Select Committee report suggested that the Government should review NewBuy after its first year of operation. When I talk to house builders, I sense that a degree of momentum is building up behind the scheme. Forty builders and six lenders have signed up to it so far, and in November last year the Home Builders Federation estimated that 2,000 reservations had been made.
Statistics show that there were 6,780 sales in the first 13 months of the First Buy scheme. The Government are committed to increasing the funds available to it: the Chancellor announced in last year’s autumn statement that an additional £280 million will be available on top of the £900 million announced in the 2011 Budget. That should help 16,500 first-time buyers.
There has been evidence in the past couple of days that Funding for Lending is not finding its way into industry as fast as we might like, but it is starting to work its way through to mortgages. The Bank of England’s “Credit Conditions Survey”, published on 3 January, found that lenders were intending to increase their mortgage lending significantly in the first few months of 2013 thanks to the funds they can now borrow under Funding for Lending. On 22 January, the BBC ran a news item pointing out that house loans have risen to their highest level in five years—which suggests loans are easier to come by—quoting Halifax’s chief economist, Martin Ellis, as saying that this is due to the scheme. Mr Ellis says that the benefits of the scheme are now feeding through to the mortgage market. He states:
“I suspect Funding for Lending is having an effect…The scheme has only been in place since last summer, but it’s helping to support, and push up, the level of sales.”
In addition to Government schemes, there are local authority schemes. My hon. Friend the Member for Meon Valley referred to schemes in other parts of the country. I might add that my local authority, Rugby borough council, in conjunction with Lloyds bank, has introduced the Lend a Hand scheme, which lets people borrow with a 5% deposit and puts in a fund of £1 million that will enable 40 buyers to buy their first home.
Much of what people know about house building revolves around anecdotal evidence. Over the past couple of weeks I have picked up two bits of anecdotal evidence in my constituency. The first arose from a visit I made to a volume house builder who told me that since Christmas, inquiries and sales on the development he is marketing have been at their highest level for many years. The second is not so positive. A young man came to see me in my surgery. He has finished his apprenticeship and is on a very good salary of £38,000 working for one of Britain’s best companies. He is at an age and in a position where he is ready to buy his first home, but regrettably he has never borrowed. He bought his car and met all his expenditure out of savings. He is unable to get a mortgage because, not having borrowed, he is unable to demonstrate the ability to pay off a loan. He knows what he needs to do—to take out a loan and repay it on time. This has put back by six months to a year that young man’s aspiration to get started on the housing ladder.
In referring to people’s aspiration and desire to own their own home, it is important to talk about the right to buy. Recent statistics show that the reinvigoration of this Government’s scheme has doubled right-to-buy sales from 1,041 between July and September 2012 to 2,010 between October and December 2012. That means that 3,495 council-owned properties have been sold to tenants since the scheme was launched last April, which is a third more than the whole of the previous year and the highest number of sales since 2007. I know that some in this Chamber will think that that is not a good thing, but I think it is because it enables people to get started.
Mr Andy Slaughter (Hammersmith) (Lab)
I doubt whether anybody in this Chamber thinks that the principle of someone being able to buy their own property is a bad thing, but does the hon. Gentleman agree that what is a bad thing is that a third of right-to-buy properties are now owned by private landlords?
Mark Pawsey
The properties have been sold and that provides for a mix of tenure among that housing. I do not see any difficulty with that. It is a perfectly sensible right.
The hon. Gentleman moves us on to the private rented sector. The Committee’s report says that the Government should focus on helping small private landlords to
“expand their portfolios and invest in new build housing.”
The Chairman of the Committee reminded the House that we have just started our inquiry into the private rented sector, and I look forward to a similar debate on that report in the coming months and years.
It is important to note that the private rented sector should no longer be seen as the poor cousin to home ownership. For many people, renting privately has become a preferred choice, because they want the flexibility the sector can provide. In many instances, private renting is becoming a new norm. More than 8 million people in England now rent from a private landlord, an increase of more than 69% over the past 10 years, as the sector has moved from accounting for 9% of housing to 18%. Interestingly, the Chartered Institute of Housing has suggested in its presentations that that figure could rise to 25%. I accept that, in many instances, renters would prefer to be in other tenure—they would prefer to be an owner-occupier or in social rented accommodation—but private renting has its benefits, particularly for those who want flexibility and do not want the responsibility of maintaining the fabric of a building through owner-occupation.
The Committee looked at institutional investment in the private rented sector, and I am pleased that the Government commissioned the Montague report, which shows their commitment to dealing with housing issues. The report’s key recommendation—it was also a key recommendation of the Committee report—was the need to attract institutional investment into the system.
One of the issues we discovered when taking evidence is that institutions are not keen to invest directly in the residential sector because of the amount of management and administration that looking after residential property entails. It is striking that institutions invest in commercial buildings because of the lower management costs involved. They send out a rent demand once a quarter, for example, and are able to pass on repair obligations to occupiers. A tie-up between housing associations and institutional investors might be possible. Housing associations are very good and have demonstrated over many years a strong track record in managing social rented accommodation. I do not see why they cannot offer their services to institutional investors, whereby the investor owns a stock of private rented accommodation and tells the housing association, “You’ve got the skills and the experience to manage it.” That is a business opportunity for the housing association sector, if it wishes to take it up. I would be interested in hearing any thoughts the Minister may have on that issue.
The Select Committee talked about the need to make it easier for landlords to let homes, and about build-to-let developments built specifically for the private rented sector. Sir Adrian’s report highlighted the potential for investment and said the Government should consider providing incentives to encourage the development of build-to-let business models. I am pleased the Government have made a commitment to that sector. A press release from the Minister for Housing launched a £200 million fund to boost the construction of new homes specifically for private rent.
Any remarks on the social housing sector need to have regard to the changes to the Government’s welfare system, which were referred to by the right hon. Member for Greenwich and Woolwich. I will draw attention to some striking figures. There are currently 2 million households in England on housing waiting lists and 250,000 families living in overcrowded accommodation. Under the last Government, local authority housing waiting lists rose from 1 million in April 1997 to 1.8 million in April 2010. However, nearly a third of working-age social tenants on housing benefits are living in accommodation that is too big for their needs. That equates to nearly 1 million spare rooms that are being paid for by the taxpayer, denying many hundreds of thousands of people the chance to house their family adequately. I am sure we all agree that every family deserves the chance to be housed comfortably. Hard-working taxpayers, many of whom face tough choices of their own, will have a view about these properties.
Mr Slaughter
I will leave it to the hon. Gentleman to resolve for himself the moral certainty with which he blames existing social tenants for the housing crisis. What percentage of the people who are subject to the bedroom tax does he think have been offered smaller accommodation? I will give him a clue: in Hammersmith, the figure is 5%.
Mark Pawsey
I accept that that is a concern. Indeed, the issue arose in the Select Committee’s report on the effect of changes to the welfare system that the stock is not available for people to move to. That point clearly needs to be considered.
I had the opportunity to talk about many of the welfare reform issues when I visited sites in my constituency managed by Orbit, a social housing provider. I was taken around by Elaine Johnson. I congratulate Orbit on the high quality of the leaflet it has prepared on the effects of the changes.
It is not possible to talk about the supply and financing of housing without having regard to the planning system. As all speakers have said, we need to create more supply. The changes the Government made to the planning system in the national planning policy framework have been criticised in this debate. However, the presumption in favour of delay has gone and has been replaced by a presumption in favour of sustainable development. The Select Committee’s view on the final version of the NPPF was interesting.
I was pleased to see the planning Minister, the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles) in his place earlier, but I am disappointed he is not here now, because I regret that the Government have recently been tinkering with the system after the implementation of the NPPF. That has not been particularly helpful. Changes bring a degree of uncertainty and it is important to allow the new planning system to bed in. Some of the Government’s proposals, such as changing the regulations on converting properties from office to residential use, and changing permitted development rights regarding the size of extensions and, more recently, the right to light, are not helpful. I understand what the Government are trying to do; the aim is clearly a further freeing up of the planning system, but I fear that some of the changes may be counter-productive and will not lead to the growth we need in the sector. In fact, they could lead to more uncertainty in planning.
One recent Government development, however, is most welcome. In the autumn statement the Chancellor announced a new £474 million local infrastructure fund to support investment in key local projects and crucial sites. That is of particular interest in my constituency, and I recently met the Housing Minister, the local authority and developers, to consider a site where the development of a new road will be a key part of building 6,200 new homes. Money from that fund will provide additional housing.
In conclusion, I welcome the report by the Communities and Local Government Committee and it is right to say that the problem of housing will not get sorted overnight. I believe, however, that we are already starting to see the benefits of Government policy through the First Buy and NewBuy schemes, funding for lending, and changes in the right to buy. I commend the Government on the measures they have introduced, which show that they view house building as one of the most important factors in getting our country growing again.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Three Members wish to catch my eye and the winding-up speeches will start at half-past 6. If Members constrain their speeches to about 11 minutes everybody will get a fair share of the time remaining.
Mr Andy Slaughter (Hammersmith) (Lab)
I will certainly do that, Mr Deputy Speaker, and I apologise to the Minister if, given that we are going the distance, I have to leave before he speaks because I have a meeting before 7 pm.
I am sitting alongside my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) and the Chairman of the Communities and Local Government Committee, and that is as near as I will come to pretending expertise in my comments. Instead, I will give a consumer’s view of this subject, based on my experience as a constituency MP. My constituency admittedly has some of the highest housing costs in the country and—not unrelated to that—some of the greatest housing stresses and needs, but it is not untypical of London and other high-value areas, particularly in the south of the country.
As someone who has spent 20 years trying to build housing that is affordable to local people, I know that even at the best of times that is not easy because of land prices; subsidy is always difficult, particularly at the moment. Nevertheless, there is currently a development boom in west London, and it is envisaged that in three opportunity area sites in my small borough, 22,000 new properties will be built over the next 10 years or so. Those are the major sites but there are many other similar sites.
Housing policy states that at both regional and local level, 40% of houses built should be affordable, which is right. A third of existing housing stock in my constituency is affordable social housing, owned by the local authority or a housing association. At the same time, however, 11,000 people are on the waiting list because of severe overcrowding, conditions in the private rented sector and homelessness—I said that 11,000 people are on the housing waiting list and they will be for another four weeks until it is abolished on 1 April. Some 1,500 people will then possibly be rehoused at the subjective discretion of the local authority, depending on their individual merits as assessed on things such as community contribution, previous employment and matters not specifically related specifically to need. Other aspects of the Localism Act 2011 are being introduced with alacrity on short-term tenancies, affordable rents and other matters that, for the first time in generations, put at risk the right to a secure, affordable home for many people.
In those circumstances, one would think that using existing resources would be a priority, but in fact the local policy in my constituency says that there should be no new social housing because too much is available. Therefore, when social housing properties become vacant for any reason, they are liable to be sold. Consequently, the stock is not increasing; it is diminishing. When those 10,000 or 11,000 people go from the waiting list, they will not disappear; they will still be there, often living in conditions of severe housing need.
The bedroom tax has been proposed as though it could be an option to build new affordable housing, but, as I said in my earlier intervention, of 824 council households in my borough subject to the bedroom tax only 48 will be helped, according to the council’s figures, and other social landlords have another 1,840 such households. The people who are moving or who are likely to have moved are those who have been subject to the caps on local housing allowance—540 families so far—and those who are likely to be subject to the overall benefit cap when it is introduced, not now in April but later in the year, sometime between April and September. The date is yet to be revealed. Again, the local authority estimates that that will affect another 800 families.
Where will those people move to if they can no longer afford to live in west London? One answer is Peterborough. I saw a headline on the BBC News site two weeks ago: “Plan to move London homeless to Peterborough is ‘social cleansing’ says MP”. I was perhaps not surprised by that—I thought that perhaps the shadow Housing Minister had been using the media effectively, as he often does, or that my hon. Friend the Member for Westminster North (Ms Buck) or someone of that ilk had done so—but the article says:
“Plans to allow a London council to build homes in Peterborough for its tenants have been criticised by an MP as ‘social cleaning’. Peterborough MP”—
it names the hon. Member for Peterborough (Mr Jackson), who was here earlier but is not in his place now—
“said he could see ‘no advantages for the city’. ‘This is about social cleansing in Kensington and Chelsea,’ he said.”
Those of us who have said for many years that this process of social cleansing has been under way in Conservative boroughs, particularly in west London, dating from the Porter era and subsequently, and who were partially vindicated by the Mayor of London’s former pronouncements now have it written in stone from the hon. Member for Peterborough that that is happening.
In other words, people who are in housing need who could be helped in whatever difficulty are becoming the victims of political ideology and the strategy to alter the social and economic make-up of the area in which they or their families have often lived for generations.
Damian Collins (Folkestone and Hythe) (Con)
Many young professional people live in the hon. Gentleman’s constituency. In fact, the first flat that I lived in when I started my working life in London was in Shepherd’s Bush. They will rent in the private sector and not be in receipt of housing benefit. If their circumstances change, they get no protection from market conditions. They have largely no redress on the state if they are still in work. Is he saying that they should be included in his socialised model?
Mr Slaughter
The Conservative party is always levelling down, rather than levelling up. The introduction of a competitive, envious spirit to try to make people compete against someone one rung above or below them on the housing ladder is quite an invidious route to take. Of course, I support young families and young single people. They are working and paying taxes, but so are the majority of people in receipt of housing benefit. People on low incomes simply cannot afford astronomical private sector rents. I am glad that the hon. Gentleman intervened when he did because I was just going on to that point.
If we know who the victims are, we unfortunately know who the beneficiaries are. I was quite shocked to read a feature article in the Daily Mirror this morning. It was about a joint investigation by the Daily Mirror and GMB trade union into private landlords who had bought up council properties. That is the source of the statistic, which I gave earlier, that a third of right-to-buy properties that had been quite properly bought by their former tenants are now in the hands of private landlords. What sort of private landlords? One example given in the article is Charles Gow, the multi-millionaire son of a former Tory Housing Minister who, as the report reveals, owns 40 flats in one south London estate alone. The profiteering of private landlords, who buy up former social flats on council estates and individual council properties at a relatively low cost, is now rife. What does that mean? It means that they are able to charge market rents to tenants placed in those properties by local authorities. Those tenants then have to claim housing benefit—not because they are unemployed, but because they cannot, even on a more than average wage, afford the astronomical rent.
The average rent in my constituency is £335 for a one-bedroom flat, £467 for a two-bedroom flat, £770 for a three-bedroom house, and £934 for a four-bedroom house—per week. Social rents are between 15% and 25% of those levels. There is the obscenity. A social tenant in a secure and assured tenancy pays the rent in full by earning a decent average wage, or even, possibly, a low wage. Living next door is a similar family who have been in temporary accommodation for three or four years, who are paying a rent that is four or five times more to a private landlord, and which is being subsidised by housing benefit. The Government’s answer is, “Let’s evict the family by placing a cap on the benefit.” The Government’s answer should be, “Why are we not providing affordable housing for working families”, as every previous generation did irrespective of which party was in control? That is what lies at the heart of today’s debate.
I cannot fault what my right hon. and hon. Friends have said on policy and in their critique of the Government’s housing policy, but I am afraid it comes down to what I spend every Monday morning doing: trying to console increasingly large numbers of people who have been living for years, sometimes many years, in severely overcrowded and unfit housing conditions. At the end of that long wait, they now face not getting what they would have got even 10 years ago—a secure tenancy at an affordable rent for them to bring up their families, something to which everybody aspires—but the prospect of eviction first into a disgusting and dangerous hostel, and then being moved hundreds of miles away from their family network, schools and jobs to somewhere completely alien. I say that with no disrespect to Peterborough; I am sure it is a lovely place to live. However, if someone’s school, job, home, family and community are near Shepherd’s Bush, why should they be forced to move?
Those are the human issues, as well as the financial issues, that the Government need to address. I hope the Minister has read the report in the Daily Mirror and has seen who is currently benefiting from the Government’s policies. I hope that when he replies he will be able to tell us that there will be some movement.
Damian Collins (Folkestone and Hythe) (Con)
This has been a comprehensive debate, with great expertise from all parts of the House. I join other hon. Members in congratulating the Chair of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), on an excellent report, which is forward-looking and raises many interesting issues. It poses a number of questions to the Government, and we look forward to hearing the Minister’s reply. I will touch on just one or two aspects of the report.
Today’s debate has already dwelt on the Government’s reforms to the housing targets and the important shift away from the regional spatial strategies towards local plans. It is much better to have local authorities with their own clear plans advocating, rather than resisting, development in their areas. Under the regional spatial strategies, local authorities fought housing targets, used every opportunity to resist housing development and stood up to the last Government in doing so. It is much better to have a system under which local authorities are given incentives to allow development in their areas and, instead of fighting development, are forced to make the case for it. I appreciate that people have raised questions about that point and that several local authorities are still finalising their local plans and targets. The plan by my district council, Shepway, in Kent, which is still being finalised, has at its heart a housing figure greater than the previous target under the regional spatial strategy. It is taking a sensible look at the opportunities for community infrastructure that can arise from development. That is the right way to go.
The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles), who has responsibility for planning, was in his place earlier, and I make this point for his benefit—so I hope he will check Hansard—and the Minister’s. I ask them both to consider the impact of infrastructure development in communities and on the local economy and housing. I realise that DCLG is considering the planning application for the expansion of Lydd airport in my constituency, which was approved by the district council three years ago. Since then, there has been a public inquiry and we now await the Minister’s decision, which is eagerly anticipated by me, the district council and many in the Bromley Marsh area and Lydd. It would be an enormous boost to the local economy to allow the controlled expansion of the airport to go ahead. Other transport infrastructure around it could make the area considerably more attractive to inward investment, including in new housing, and help to create new jobs, all of which are needed by the community. I ask the Minister to consider the application carefully, make it a priority, which I know he has done, and give us a timely answer. People desperately need to know where the Government stand on the expansion of Lydd airport.
The other Government reform I wanted to touch on was the liberalisation of planning consent for spaces above shops in town centres. This recognises that our town centres are changing and becoming mixed-use spaces for leisure, retail, work and residence. This could breathe new life back into our town centres. We have a lot of empty office space in many of our town centres, particularly in towns such as Folkestone in my constituency, and I think this would be a good use of space. If we can simplify the planning process and get that empty commercial space being used by residents who need it for residential property, it would be a good thing for residents and town centres.
Some of the specifics in the Select Committee report pose an interesting question concerning social housing and those in the private rented sector who claim housing benefit. Why, despite having a market with no lack of demand and a lot of Government spending underpinning it, do we have an inadequate level of supply? Why do we not have a system where we work with that demand and use it to expand supply? The report hits on interesting ways of doing that. The Committee Chair raised the interesting issue of councils borrowing to fund housing expansion. I would be interested to hear the Minister’s views on that.
Obviously, that exists within the current economic climate, with the country having borrowed too much, so it is right that the Government are concerned and careful about allowing too much further borrowing to take place, but it would be interesting to know what other schemes are available, particularly involving institutions, to invest in housing models. The report made some interesting suggestions for how we could bring together housing associations to manage and build properties, institutional investors with ready funds to lock away in long-term investments and local authorities prepared to work with those two bodies as partners. The funds are probably available from institutional investors and pensions funds that could invest—over not just 30 years, but 60 years—in new housing programmes. Local authorities have no shortage of tenants to fill the spaces. Any private landlord or investor will know that what they want: high levels of occupancy. If the local authority can largely guarantee occupancy of such properties, that will make them an attractive investment. Housing associations can manage such schemes to bring those elements together, so that the institution does not have to put in place a management arm and the local authority gets accommodation.
I know that some models have been put forward. I believe that Barking and Dagenham council in London has looked at putting in place a model—some local authorities in Kent are now looking at this too—whereby the institutional investor effectively builds properties for the council, which supplies the tenants and then gets to keep the housing at the end. There is the question—this was raised in the Committee’s report—of what guaranteed rate of return the institutional investor has to be given. What rental increase does the local authority have to guarantee? Is it inflation or inflation plus a small percentage increase over a 50 or 60-year period? That has to be carefully considered, but given that in such models local authorities would control the housing stock at the end—either to sell to the tenants or manage for the foreseeable future—they may be able to manage the risk of being locked into guaranteeing a certain rate of rent against the value of assets.
These models are very interesting. Indeed, it would be interesting to hear Ministers’ views on such schemes. As they are new, local authorities might need encouragement and advice to enter into such partnerships, but they pass the common-sense test. There are large amounts of cash sitting in institutions, and we have a social housing sector with an enormous need for new capacity and an almost limitless number of tenants to fill the spaces. That suggests that these elements could successfully come together in a tantalising and interesting solution to many of the problems that the report looks at. The Committee’s report also touches on direct borrowing from the markets, through municipal bonds or local government bonds, as it were. That could be a different way, but if we can bring these elements of institutional finance together to meet the enormous need that is out there, that could be an attractive solution.
Finally, I want to touch on investment in the private rented sector. Throughout this debate hon. Members have referenced case work in their constituencies involving people in housing need who live in squalor and poor accommodation in the private rented sector and claim housing benefit to do so. We discussed this issue in a Westminster Hall debate last week. I feel strongly that it is wrong to pay out housing benefit to slum landlords—people who maintain their properties in a poor state. They know that their tenants cannot afford the cost of moving out or a deposit. I had a case in my constituency where the cost of simply moving from one two-bedroom flat in Folkestone to another—the cost of a deposit, added to the letting agent’s fees—could be over £1,000. People simply cannot find that money. Bad landlords know that and they know they can get away with not maintaining their properties to a sufficient standard.
Local authorities have the power to intervene under the Housing Act 2004, which was passed by the last Government, but there are understandably limits to their enforcement capabilities. The one thing we do control, however, is the money supply for the housing benefit paid either directly to tenants or to landlords. If we could turn off the tap to bad landlords who will not take action to improve their properties, we would have an opportunity to put pressure on the private rented sector and those landlords, to ensure that such properties are maintained at least to a standard whereby they do not fall foul of one of the category 1 or category 2 hazards under the 2004 Act—largely, that people are not living in severe damp and severe cold. There should be no excuse for that. Putting this right is probably relatively low-cost for landlords. If they were faced with losing two or three months’ rent, they would find the money to put such properties right pretty quickly. That would do an awful lot to improve their tenants’ quality of life.
There is nothing wrong with private sector landlords offering accommodation to people on social rent or those renting with housing benefit, but they have the right to expect such properties to be maintained properly. I think all Members are far too aware of social housing tenants who are trapped in the system, living in poor quality accommodation. Months if not years can go by before anything is done to put it right. In controlling the money supply, we have the opportunity to do that and, in doing so, to correct some of the market failures in the system—empowering tenants to move around it more freely by making moving costs more affordable—and give them a better standard and decency of accommodation in the first place.
The Committee’s report has thrown up a number of interesting questions. I will certainly be interested to hear whether the Minister will produce an updated Government response to it, which I am sure we would all read with interest.
Heidi Alexander (Lewisham East) (Lab)
It is a pleasure to follow the hon. Member for Folkestone and Hythe (Damian Collins). I did not agree with everything he said, but I certainly agree with his last point that it is just plain wrong that, in the 21st century, we are paying money through housing benefit to slum landlords. I will probably pick up on that theme later.
I congratulate the Chair of the Select Committee, my hon. Friend the Member for Sheffield South East (Mr Betts), on opening the debate. I was a member of the Committee when we conducted the inquiry and the report was written up, and I think it should provide the Government with a lot of food for thought. I will be interested to hear what the Minister has to say in his updated response.
This Friday, I will do my advice surgery in my constituency, and I can guarantee that I will speak to at least five people who have come to talk to me about problems with housing. There could be up to 10 such people on Friday, but I know that during the course of a year, I speak to hundreds of people about their housing circumstances. More often than not, I speak to mums who come with their children and who are living in desperately overcrowded accommodation. I sometimes see whole families who are living in just one room. These people are often working, sometimes with part-time jobs, but they are living in completely unacceptable housing conditions and I believe that Members of this House, and the Government, have a duty to address the appalling conditions that many of my constituents live in.
In the three years that I have been doing my advice surgeries as a Member of Parliament, not once has anyone come to see me about a housing problem who could afford to buy a house in Lewisham. The average cost of a property there is £260,000, but the average salary is in the region of £29,000. Furthermore, the vast majority of people who come to see me at my advice surgeries cannot afford to buy through the part-buy, part-rent arrangements either. Many of the shared ownership schemes that housing associations run in London are completely out of the reach of many of my constituents, because the salary required in order to access the schemes is many times the amount that many of my constituents earn; and yet we have a situation in which people are paying out huge amounts of money in the private rented sector, often to live in very poor conditions.
I want to focus on the need to build social rented housing in London. The reality of what has happened under this Government is that the number of affordable homes being built has collapsed. Nationally, 34,000 fewer affordable homes were started in 2011-12 than in the previous year. That represents a 68% drop. We should not be surprised about that, because one of this Government’s first actions when they came to power was to cut the national affordable house building programme by 60%. They signalled their intentions for the supply of new affordable housing when they made that decision.
Of course, that money also enables other housing to be built. What I mean by that is that some of the grant that goes into developments to deliver social or affordable housing enables a mixed-use scheme with mixed tenures to be created. Last year, when the Prime Minister and the Secretary of State for Communities and Local Government launched their NewBuy scheme, they chose to come to Lewisham. They stood in a development there that had been constructed only because of a £25 million grant from the Homes and Communities Agency. The scheme, which is providing nearly 800 new homes—about 200 of which are affordable—was coming out of the ground only because of the capital grant from that agency.
I cannot overstate the need to build social rented homes in London, yet in the period between April and September 2011, only 56 new homes for rent were started by councils or housing associations. That was 56 in a six-month period in a city of 7 million people. That is not acceptable.
My own local authority, Labour-run Lewisham council, is due to build 250 new homes, but that is a drop in the ocean compared with the number of families on the housing register there. We have talked about ways of getting more finance into building affordable homes, and I support the comments made on the need to lift the borrowing cap placed on local authorities.
I ask the Minister to consider what more the Government could do about the number of overseas buyers purchasing property in London. Roughly 60% of new-build homes in London are being bought by foreign investors, which is ramping up the London housing market, pushing prices even further away from my constituents. If London is seen to be a safe haven for foreign investors in the London property market, we must surely be able to find a way to capture some of that investment in our great capital city to plough back into the delivery of affordable homes.
Ms Karen Buck (Westminster North) (Lab)
Does my hon. Friend share my concern about the scale of the buy-to-let market in ex-social housing in particular? Does she share my shock that there can be two next-door properties, of which one will be in the social rented sector at a rent of, say, £100 a week, while the other will be in the buy-to-let market in social housing with a rent of £500, £600 or in some cases even £700 a week? In what way does that provide any kind of value for money?
Heidi Alexander
I totally agree with my hon. Friend, and our hon. Friend the Member for Hammersmith (Mr Slaughter) made a similar point. We are lining the pockets of private landlords on an industrial scale. There are no two ways about it.
Another suggestion I would put to the Minister relates to public land. The Government often talk about releasing public land to deliver new homes. There is a lot of rhetoric about this, and we do not see a huge amount of progress. In my constituency, we are experiencing the possibility of Lewisham hospital having two thirds of its land and buildings sold off. There are many hospitals in London for which significant land disposals are going to take place. What discussions has the Minister had with his colleagues in the Department of Health? If these disposals are going to happen—let me be clear that I am very much against it for Lewisham—can we secure requirements for 50% of the land to be used for affordable housing, as these are considerable sites of public land?
I would like feedback from the Minister on what he is doing with other public sector bodies to parcel up land to make it available to small and medium-sized builders. When this country was building the amount of housing it needed to meet the demand many decades ago, we saw small and medium-sized builders providing a far greater proportion of the homes built. At the moment, 75% of new homes come from seven of the largest house builders. If we could find a way of parcelling up the public sector land, enabling small and medium-sized builders to get hold of it for building purposes, that could be a win-win situation.
Mr Richard Bacon (South Norfolk) (Con)
I am listening with interest to what the hon. Lady says about finding new ways to parcel up land. Is she aware that local authorities have an obligation—I add that quite a few of them are not aware of it—to measure demand for self-build in their areas, and then to say what they are going to do about it? If we look at the experience of other countries such as the Netherlands, Germany and France, we find that a much higher proportion of total building is done not by large house builders, but by people for themselves, in some cases with the help of local authorities.
Heidi Alexander
One of the recommendations in the Select Committee’s report is that the opportunities for self-build do exist. I will conclude on that note, grateful for having had the opportunity to contribute to the debate.
Jack Dromey (Birmingham, Erdington) (Lab)
The Select Committee’s report was produced on an all-party basis, under the admirable chairmanship of my hon. Friend the Member for Sheffield South East (Mr Betts), and we welcome much of it. As for the Government’s response thus far, it is not all bad and not everything has failed to work, but when it comes to rising to the challenge outlined in the report, the facts speak for themselves.
House building fell by 11% in 2012, the number of housing completions has fallen in both years since the general election, and homelessness is up by a third. We have a mortgage market in which people struggle to obtain mortgages, and a rapidly growing private rented sector in which there are many good landlords but also big problems relating to affordability, security and quality. As was pointed out by the hon. Member for Folkestone and Hythe (Damian Collins), that has serious implications, including for the members of “Generation Rent” and their ability to save to realise their dreams of buying a home.
I am the first to acknowledge that the biggest housing crisis in a generation does not date back to May 2010, but, having said that, I should point out that in 2010 we warned what the consequences of the crisis would be. My hon. Friend the Member for Lewisham East (Heidi Alexander) was absolutely right: the £4 billion cut in affordable housing investment resulted in a 68% collapse in affordable house building and a 97% collapse in council house building, at the worst possible time. That serious mistake, combined with the economic mismanagement of the economy more generally, has created a real problem of public confidence. People must decide whether or not to risk taking out a mortgage, and those who are prepared to do so struggle to obtain one.
As was pointed out by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), the impact of those cuts in public investment has been extremely serious. The number of housing association starts has fallen by 23% to 19,500 in the last year, and the uncertainty created by changes in the planning system has not helped. The planning system was in need of reform, but it is clear that it was never as big a problem as some have pretended. Indeed, the hon. Member for Peterborough (Mr Jackson) made the very good point that, although there is land with existing planning permission capable of sustaining 470,000 homes, those homes are simply not being built.
We understand that, after a succession of initiatives, which I shall say more about shortly, a further Get Britain Building launch may be imminent. We are told that the Prime Minister and the Deputy Prime Minister may well don their wellies and high-visibility jackets to visit a building site. Thus far, however, the facts speak for themselves. Overwhelmingly, the Government’s approach has not worked: it lacks ambition, and it has been ludicrously spun. If we had a house for every press statement issued by the last housing Minister, the right hon. Member for Welwyn Hatfield (Grant Shapps), we would not have a housing crisis. It is downright cheeky, for example, to claim that the proposal to provide 170,000 affordable homes was realised as a consequence of this Government’s actions, when the National Audit Office has made the very good point that 70,000 of those homes were commissioned and paid for by a Labour Government.
Not all the Government’s measures are bad. On the contrary, Firstbuy has been a modest success, and, in principle, the guaranteeing of balance sheets for institutional investment in the private rented sector is a welcome step in the right direction. Although I felt that my right hon. Friend the Member for Greenwich and Woolwich was right to inject a note of realism into the debate by pointing out that there had been painfully little progress so far, we support the measure on a cross-party basis, and believe that it should proceed to its subsequent stages. However, we need to look at what has been trumpeted. When NewBuy was launched it was said that 100,000 homes would be provided, but according to the latest figure just 1,500 have been provided. Had we had the same rate of progress as we saw in the first tranche of figures, it would have taken 200 years to realise that 100,000 homes objective.
My right hon. Friend, in his typically forensic fashion, dissected the original claim about the new homes bonus, which was that
“there will be at least 400,000 additional homes as a direct result of the bonus.”—[Official Report, 4 February 2013; Vol. 558, c. 12.]
Based on the figures thus far, it is not possible to detect a growth in the number of planning permissions or total approvals, the output of new homes or the starts. Indeed, the new homes bonus has other problems: it is both unfair, in terms of transferring public moneys from north to south, and inefficient, in terms of the amount of money that actually gets spent on building homes.
In a difficult situation—I stress again that the facts speak for themselves—there is a real risk that some of the Government’s next stage reforms will make things worse. Let me give two examples of such reforms, the first lot of which are the changes to the planning system. The Select Committee is right to say that the issue of whether or not to vary the requirement in terms of social or affordable house building is best left to the local level, but instead, rejecting localism in favour of Leninism, clause 5 of the Growth and Infrastructure Bill introduces review mechanisms that might rob local authorities of the sensible ability to renegotiate where appropriate. The point was put to me in Plymouth, Exeter and Bristol last week that there is the additional danger of delay, as some developers wait for the new arrangements to kick in.
My second example is the total impact of welfare reform, which I saw in Plymouth in some detail last week. Let us consider the bedroom tax. Not only does it have a human impact—one family whose son has been serving in three tours in Afghanistan, going backwards and forwards, will be hit by the bedroom tax, as will the disabled and the carers—but it will have perverse outcomes. If people are pushed into the private rented sector, there is the potential for rents to be higher, which increases the housing benefit bill and the potential for greater homelessness. In Plymouth alone, the totality of the changes will take £30 million out of the local economy. There is growing and disturbing evidence of the potential of this now to have an impact on new builds—on supply—because of write-offs of bad debt and the burden of cost being imposed on housing associations and local authorities.
The hon. Member for Meon Valley (George Hollingbery), in one of the many thoughtful contributions that have been made by hon. Members from across the Chamber, rightly made the point about the importance of house building to the economy. History tells us that from the depression, through war and the building of modern Britain in the ’50s and ’60s, to the recovery from recession in 2008, a major programme of house building has always been at the heart of economic recovery in our country—public and private—and that it is not possible to have a sustainable economic recovery without a major programme of house building. The CBI rightly makes the point that the 100,000 affordable homes will see 1% added to GDP.
Let me deal with some of the Select Committee’s recommendations. It rightly makes a number of intelligent points about how we finance a major uplift in supply. It is right to argue strongly in favour of post-2015 certainty, including both rent models, making a crucial point about the need to commit grant and investment. It is right to say that we need progressively to shift from what we have at the moment—plenty of public investment in housing but 95p in every pound going on housing benefit—to bricks and mortar. It is right to recognise that, over and above what we commit to by way of grant and investment, we need innovatory forms of funding housing supply and therefore the potential, for example, for institutional funding. I have been involved in some interesting examples in that regard. The hon. Member for Folkestone and Hythe mentioned Barking and Dagenham, to which I would add what Manchester is doing and what I just heard about in Enfield, where local government pension scheme moneys are being used to build 200-plus council homes.
The Select Committee is also right to advance a debate that we badly need to have about the potential for what local authorities can achieve if we set them free and if we have a true localism approach. Earlier, reference was made to the potential for 60,000 homes to be built as a consequence.
The Committee is also right to argue in favour of a debate that we now need to have about a housing investment bank. In the summer of last year, the leader of my party proposed a British investment bank with a focus on manufacturing and housing. The Committee discusses the potential for a housing investment bank, pointing out some of the international experience that shows why that can help.
The Committee is also right when it talks about innovation by housing associations, such as retail bonds, greater leverage of assets and equity sharing with local authorities, as well as when it makes the point that it is important that we have the admirable G15—the big—while realising the potential of the small. I see that in my constituency through the admirable Castle Vale community housing association. My hon. Friend the Member for Lewisham East was also right about the important and neglected role of small and medium-sized builders in providing the capacity to ensure the uplift in supply we need to see.
On land, the Committee is right to advance the argument that we must reduce the up-front costs of building. The notion of build now, pay later therefore has a great deal to recommend it. The Committee is right to refer to Government land, which thus far has been something of a holy grail. Things have not happened quite as has been suggested time and time again, but no doubt the Minister will convince the House that he is determined to put that right.
On innovative forms of supply, the Committee is right to advance the potential of self-build, the interesting experience in Holland and the role of small and medium-sized builders in that process.
The Committee’s next inquiry will be into the private rented sector, a subject that was also referred to in this inquiry. That fact is very welcome given the clear problems of affordability, security and quality in the sector and, as the hon. Member for Folkestone and Hythe said, the clear problems associated with too many rogue landlords and too many rogue letting agents. That is important both in its own right and in the context of a more stable sector enjoying greater security and more affordable rents because of the impact on supply. Let me quote briefly from a startling Scottish Widows report, which is out today:
“The property market is becoming out of reach for many renters. Our latest research found that at people’s current savings rate, a first time buyer will take almost 13 years to save the £27,984 required for the average deposit.
With property ownership seeming like a distant dream, our research suggests that many renters may have given up on property ownership with just 29% actively saving to put a deposit on a home.”
I refer to those figures because I think that the Committee is wise to move on to the issue of a very different model for the private rented sector for the future—the sector undoubtedly has a role to play in meeting housing need, but it must change if it is to do so.
In conclusion, let me return to what was said by my right hon. Friend the Member for Greenwich and Woolwich and many others. All people should have a decent home at a price they can afford to rent or buy, at all tenures, but the crucial point is how we locate it in the context of economic recovery in our country. Sustainable economic recovery will not happen unless we have a major programme of public and private house building.
There are other outcomes in areas such as health and well-being and educational attainment, and an interesting debate took place about housing options for older people, but all roads lead back to housing. We have the biggest housing crisis in a generation and an economy that is bumping along the bottom. The Government badly need to come forward with a serious strategy for getting Britain building, and not yet another false dawn.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
It is a great pleasure, as ever, to follow the hon. Member for Birmingham, Erdington (Jack Dromey). I always enjoy hearing his housing speech. Indeed, I heard it only on Friday, when we were together in Bristol. As ever, he makes some interesting and useful points, as did a number of those on the Opposition Benches. If I do not have an opportunity to respond to all the points that hon. Members on both sides of the House have raised, I will write to them.
The hon. Member for Lewisham East (Heidi Alexander) made some very helpful remarks about the need to look at the bundling of land together. I will of course look into the discussions that we have or have not had with the Department of Health in relation to the land to which she refers. Although from time to time I am critical of much of what the right hon. Member for Greenwich and Woolwich (Mr Raynsford) says, I was delighted to hear him make a robust argument for the great value of further improvements in the energy efficiency of our buildings. Although the hon. Member for Hammersmith (Mr Slaughter), who is no longer in his place, was very critical of right to buy, he raised a number of points that the Government would do well to attend to.
Above all, I pay tribute to the excellent Chairman of the Communities and Local Government Committee, the hon. Member for Sheffield South East (Mr Betts), who opened the debate with what my hon. Friend the Member for Meon Valley (George Hollingbery) described as an eloquent contribution. Indeed it was. It was eloquent in giving just praise to the report that the Select Committee produced more than a year ago. As I said to the hon. Gentleman in an intervention, in the light of the fact that a year has passed since that report, I have made available in the Library an updated response from the Government, which I hope he and members of the Committee will consider and, if necessary, quiz us on further.
As the hon. Member for Sheffield South East said, it is important that we acknowledge, as the hon. Member for Birmingham, Erdington did, that the Government have done a number of things that are supported in all parts of the House. Reference was made, for example, to the reform of the housing revenue account and to the greater flexibility given to the many excellent arm’s length management organisations. The Chairman of the Select Committee even praised the Planning Minister for his willingness to accept the need for an agreed methodology for determining housing need. The hon. Gentleman will be aware that this is being addressed by Lord Taylor in his report, which we hope will be available in the summer.
The Chairman of the Select Committee pointed out that the Montague report said that guarantees distort the market. May I tactfully suggest that the Montague report was referring in that instance to rent guarantees? If he reads the report thoroughly, as I am sure he has, he will know that it strongly supports the guarantees to reduce the cost of borrowing, which is part of the Government’s package.
On that point, the right hon. Member for Greenwich and Woolwich asked what has happened to the £10 billion loan guarantee and where it is. He will be well aware that it takes time to work through the details and to put an offer to the market. We have done all that and I am delighted to tell him that we will make a detailed announcement next month about the appointment of people to run it, so progress is being made. He also challenges us about shovel-ready projects, which he is clearly concerned about. As he knows, because he looks at these matters in great detail, the Get Britain Building fund of £570 million has already signed contracts with 120 projects that will provide us with no fewer than 8,600 homes, and more are on the way. Under this coalition Government, shovels are in the ground. We are delighted that more is still to come.
Like all Members who spoke in the debate, we believe strongly in the importance of building more houses, both to meet the housing need and because of the real economic benefit that that can bring. We agree with so many speakers on all sides who said that there is no single silver bullet to tackle the long-standing under-supply of housing. The Government cannot do it alone and we need to work with others.
The report recognised that a basket of measures is needed, covering all tenures of housing, and we are taking action to deliver that basket of measures: the spending review, the Localism Act 2011, the 2011 housing strategy, the housing and growth package and the autumn statement. But as so many hon. Members have said, a new Budget and a new spending round is due shortly, when I have no doubt that further announcements on housing will be made. I was not meant to say more than that, but my hon. Friend the Member for Meon Valley helped to further the leaks that have appeared in newspapers today on what might be covered. We will just have to wait and see what is around the corner. As the Chair of the Select Committee, the hon. Member for Birmingham, Erdington and others on both sides of the House have said, it is important to recognise that more still needs to be done to take a comprehensive approach, making best use of existing stock, unlocking stalled sites and stimulating new housing supply across all tenures.
I remind my hon. Friends the Members for Meon Valley and for Peterborough (Mr Jackson), who raised the issue of ensuring that within all forms of tenure we take account of older people, that we now have the care and support specialist housing fund of £300 million specifically to develop specialised housing for older and disabled adults.
All Members who have spoken agree that we need more housing, but agree that the politics at the local level can often be difficult. That is why I said that the first thing that we have to do is ensure that we make the best use of the built environment that we already have. That means, for example, tackling empty homes, providing for the change of use from commercial to residential referred to by a number of my hon. Friends, and, as has been debated a number of times in the Chamber, tackling under-occupancy and affordable housing. The new homes bonus gives local authorities not only reward for new homes, but also for bringing empty properties back into use. It is a powerful incentive that is really working. From next month, local authorities will have further flexibility to remove or reduce council tax discounts on empty homes, and in some cases where they have been empty for more than two years, to charge even higher rates.
We have £235 million of direct funding to help local groups to tackle some of the most problematic empty homes that would not otherwise come back into use. I was grateful to my hon. Friend the Member for Folkestone and Hythe (Damian Collins), who spoke about the need specifically to address properties above shops in our high streets, and he will be aware that we are seeking to do that. There will always be a number of homes that are unoccupied for a short period, and we obviously need that for the market to operate, but the House will be pleased to know that the latest data show that only 260,000 have been empty for longer than six months. That is still far too many, but the figure is now 20,000 fewer than last year, so we are making progress.
We are also taking action to free up land. It was rightly said that Governments of all shapes and sizes have long argued for the need to free public sector land. We are determined to take action on that. We hope to release sufficient land for 100,000 homes, and wherever possible we will use the bill now, pay later deferred payment scheme to help get that under way, but a further announcement may or may not be made in a few weeks’ time. I was grateful to the Chair of the Select Committee who said, in relation to those issues, that local authorities do in some cases need to be quicker with their planning applications, and he will be aware that we are dealing with that in the Growth and Infrastructure Bill. We are also consulting on a package of measures that I think will be welcomed on both sides of the House to make the planning appeals process swifter and more transparent to reduce wasted time and expense and, I hope, lead to quicker development.
The Growth and Infrastructure Bill, which was referred to only briefly in the debate, is very important because it will allow developers to review with their local authorities the viability of the affordable housing contribution on proposed sites. As the House will know, we are committed to a further £225 million, and to the loan guarantee scheme, to ensure that we can meet any reduction in the number of affordable houses that might result from those renegotiations. In addition, we have the £475 million local infrastructure fund—we published its prospectus only a few days ago—which will help local areas to deliver much larger-scale developments to meet need. We want to go still further. The House will be aware that there has not been a single new development of more than 13,500 homes in this country since the 1970s, so we intend to promote and support larger scale garden cities where there is clear local support and private sector appetite. We are currently working through the details on that.
As my hon. Friend the Member for Rugby (Mark Pawsey) rightly said, we must support home ownership, and we are doing that with a number of measures. Reference has been made to the Firstbuy scheme. Over 10,000 reservations have now been made towards our target of helping 27,000 first-time buyers into shared equity. Reference has also been made to the NewBuy scheme, which gives prospective buyers the chance to buy a home with a fraction of the deposit normally required. As we have heard, there are already 3,000 reservations and the figure is rising rapidly. As he also said, the Bank of England is crediting our £50 billion funding for lending scheme for increasing mortgage availability and driving down the cost of loans for home owners.
However, I accept the point made by the right hon. Member for Greenwich and Woolwich about the need to look at additions to the offers that are made, either developments of existing ones or additions to the products available, and that is what we are doing. We are also looking at the issues that many Members have raised in relation to the right to buy, but it is pleasing to note that sales between October and December topped 2,000, helping to fund the one-for-one replacement of the homes that have been sold.
Mr Betts
I will be brief, because the Minister need give only a one-word answer. Is he prepared to look again at the cap on borrowing to fund housing at local authority level? Why is housing the only form of borrowing that local authorities cannot enter into simply because of the prudential rules?
Mr Foster
The hon. Gentleman knows part of the answer, because that is the same problem his Government faced, and it is to do with difficulties with the Treasury. Having said that, we are looking at the issues and are willing to look at the possibility of having flexibility in the cap and other ways of moving forward. As he rightly said, the consultation we are conducting on the potential use of local authority pension funds to help with investment is also part of the package we are considering. We are looking at all those measures.
We are doing a number of things to help make land available, to provide the resources for houses to be built, to bring empty properties back into use, to ensure that we can move forward and to develop the economic benefits to this country that new housing will bring, but also to ensure that we can provide the much-needed houses for people in this country, not least more affordable housing, because all Members are aware that under the previous Labour Government the number of affordable homes fell by a staggering 420,000. We must do something to make more affordable homes available. That is why we are committed to having 170,000 new affordable homes by 2015. It is why we have put in additional funds and loan guarantees to help secure that.
We want a housing programme that works for the people of this country and for its economy. We have made real progress. Further progress is still to come and further announcements will be made later this month. I am sure that the House will look forward to what those announcements contain.
Question deferred until tomorrow at Seven o’clock (Standing Order No. 54).
Business without Debate
JG Pears Ltd
(11 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sir Edward Garnier (Harborough) (Con)
I begin by thanking Mr Speaker for the opportunity to raise in this Adjournment debate an issue of acute local concern in Market Harborough, namely the operations of JG Pears Ltd’s animal rendering plant just outside that town. I also thank not only all the many constituents whom I have met or who have contacted me in order to provide me with evidence and information about what is happening to the local environment and how it affects their enjoyment of their properties and their own daily lives, but the environmental health officials at Harborough district council who agreed to meet me, along with my constituent Mary Morgan, at the end of last year. Regrettably, the upshot of that meeting was that there appeared to be little or nothing the district council could do, or was prepared to do, to ameliorate the problem.
I am grateful to be joined by the Minister, who is here to respond for the Government but, in reality, has very little power to influence the issues I am here to raise. It is not for the Minister to tell JG Pears Ltd how to run its business, nor is it for the Government to serve an abatement notice, to prosecute the company for offences under the Environmental Protection Act 1990, or to bring proceedings in the courts for statutory nuisance. I do not think that the Minister can even tell the local authority what to do, and I doubt he has the power to tell the Environment Agency what to do. However, he can tell us what the Government’s attitude is towards companies such as JG Pears that are not good neighbours and appear on the evidence that I have considered to be careless of the rights and interests of the people who live and farm, or work in other ways, close to their premises.
Let me deal with the suggestion, lest it be made outside this House, that my constituents and I are anti-business or think that JG Pears’ plant in Market Harborough should be shut down. We are not anti-business and we do not want the business closed, although I dare say that from time to time some of my constituents must have thought that that would make their lives more tolerable. Perhaps constituents of my hon. Friend the Member for Newark (Patrick Mercer) will occasionally have thought the same, because there is another JG Pears operation in Normanton, Nottinghamshire, whose neighbours appear to be suffering in a similar way to my constituents. My hon. Friend is in his place, and I trust he will be able to catch your eye, Mr Deputy Speaker, before the Minister replies.
In the opinion of my affected constituents, their complaints to the district council have been met, to use their words,
“with a stone wall of complacency”.
The council simply does not seem to think there is a problem. It has provided my constituents with so-called alleged nuisance record sheets. These are essentially diary sheets to record the smells that they experience. They are fascinating documents. At the top, they read as follows:
“In order to assist officers of this department with the investigation of your complaint, you are asked to keep a record of the alleged nuisance that is troubling you. Please keep a note below and, on a separate sheet if necessary, of the dates when the alleged nuisance occurs, the time it starts and finishes and the way in which it affects you. Remember that any action subsequently taken by the Council could end in Court and it is therefore important that accurate records of the specific times when the alleged nuisance affects you are kept.”
There are columns on the sheets to record the date, the weather conditions, the start and end times of the observations, the odour intensity and extent, the type of odour nuisance and its effects, and whether contact was made with the company.
There are five levels of odour intensity, level 1 being “no detectable odour” and level 5 being
“very strong odour (this is when you really wish you were somewhere else)”.
There are also five levels of odour extent, ranging from level 1,
“very impersistent (only detected during brief periods when wind drops or blows)”,
to level 5,
“persistent odour detectable at monitoring location and beyond”.
My constituents have been carefully completing these record sheets since February 2011 and providing the council with them. It has made no difference. They have set up a campaign group and circulated leaflets locally, which read:
“Please help to stop the environmental pollution and nuisance caused by JG Pears factory…this includes foul odour, noise (eg droning, crashing/beeping), black smoke and pollution of adjoining land and watercourses. You may not have realised where the foul odours in your area are coming from. If it smelled like rotting cabbage, dirty bone meal or a nauseating meat broth odour…it is probably JG Pears. These nasty odours are carried on the wind to Great Bowden, Foxton and the Langtons.”
The Langtons are the five separate villages or hamlets of Tur Langton, Church Langton, Thorpe Langton and East and West Langton. The leaflet goes on to say:
“Try driving up Gallow Hill with your car window open and you will probably recognise JG Pears’s foul odour. After years of individual complaints from residents to Harborough District Council…JG Pears’s foul odour and noise continues to torment local residents, day & night, on an almost daily basis.”
The problems continue. On the evening of 2 March, there was a pervasive, nasty stench of meat broth. Shortly before that, on the morning of 15 February, there was a nasty rotting smell. This morning a local councillor, a farmer and his partner, and a reporter from the BBC inspected the watercourses on the farmer’s land adjacent to the site. They found slurry in the ditch which looked like chicken fat. The councillor collected some of this slurry in her gloved hands. It is known in the business as mixed liquor bacterial slurry and is used by JG Pears in the process carried out in the main aeration tank and then sluiced out on to its land, whence it leeches into the nearby watercourses. There is no reference to the proper disposal of this slurry in the company’s licence. Why not?
This site was designed to deal with 1,400 tonnes of material each week. Judging from the huge number of 25-tonne articulated lorries delivering animal products to the site every day, it is not unreasonable to assume that a good deal more than 1,400 tonnes are being processed every week, which may explain why the disposal systems leave a lot to be desired. There seems to be a somewhat haphazard approach to the site’s design and operating methods. There are also doubts about whether some metal chimneys were put up with the necessary planning permission.
Exasperated at the lack of action by the council, my constituents got in touch with me. I contacted the local authority’s environmental health team last October and persuaded them to see me. I also asked them to meet one of my constituents, Mary Morgan, who is a spokesman for the campaigning group, and they reluctantly agreed. Mary Morgan made a compelling and rational case at that meeting. The more I have learned about this matter, the more convinced I have become that the complainants have a case that needs not just to be taken seriously by the council and the company, but acted on.
I appreciate that my hon. Friend the Minister cannot answer these questions, but why does the council not take seriously the years of evidence presented to it and why does it continue to deny that there is a problem? If, as the council contends, the company is operating within the terms of its licence, why does it not look again at the terms of that licence to measure their effectiveness against the evidence of the public nuisance that clearly exists? Why has the council asked residents to go to the trouble of filling out diary sheets if it then says that it cannot rely on the information contained in them because the company’s licence requires the odours and other problems to be witnessed by an environmental health officer? I understand that when the only officer to have been on the site was asked if he understood the company’s processes, he replied that he did not have to. I disagree. He has a professional obligation to know what he is looking at and for. Why are my constituents’ photographs of the billowing black smoke and the contaminated watercourses—available on Facebook, but sadly not reproducible in Hansard—rejected as evidence?
An Environment Agency inspector has identified unacceptably high levels of effluent from the site in watercourses on neighbouring farmland. The company’s licence permits it to spray its effluent fluids on to a small piece of land it owns, but it does not require much imagination to see the consequences of that. The effluent drains from that land straight into the ditches on the next-door farm, as confirmed this morning, and ultimately into the River Welland, which the agency is trying to restore. My constituents have had to suffer smoke, stench and noise—an appalling combination of disturbances that has been allowed to continue for some time. Now, through me, my constituents say they have had enough—enough nuisance and enough inactivity.
I wrote to the company and the district council to let them know that I intended to apply for this debate. The council denies that the complaints I have referred to are made out. It goes as far as to say that there is no evidence to support the claims of odour, noise and water pollution; that the odour problem has been experienced by only a small group of residents; and that only one person has complained. It says that there is no basis for it to take action. I appreciate that the council’s revenue budget is very small and getting smaller, so it is perhaps understandable that it will take no action. However, it should deal with the issue and not try to brush it under the carpet or minimise the problem. The evidence is there and it needs to be acted on.
The company’s operating director was less defensive in his reply, explaining that it strives not to cause problems for its neighbours. It spends considerable sums on its plant and equipment, and does what it can to control odorous emissions. This week, I received a letter from a Manchester firm of planning consultants employed by JG Pears, telling me of its proposal to carry out
“a significant programme of developments”
at the site. I gather that the firm did the same thing in Nottinghamshire and the problems have got worse, not better.
Tomorrow, JG Pears is holding an exhibition to explain its proposed development, which will include
“a new material reception building, a workshop, a replacement water treatment plant, additional parking facilities and a new, safer access off Harborough Road. The proposed works also include a thermal oxidiser. This piece of equipment”,
it explains,
“is the best available means of destroying odorous emissions but at the same time will provide energy to operate the plant. Consequently the proposals include a new chimney.”
If the company needs to do all those things now, it is a pity it did not think about doing them before.
Good businesses should be good neighbours. Good councils are not defensive, but are vigilant to ensure that their residents’ lives are not disturbed improperly. I hope that the Minister, if he can do nothing else, will insert some steel into one or two backbones. My constituents would be pleased if he were to do that.
Patrick Mercer (Newark) (Con)
I thank my hon. and learned Friend the Member for Harborough (Sir Edward Garnier) for the opportunity to speak and for securing the debate.
I must declare an interest because I live just outside the area of contamination, if I may refer to it in that way, from JG Pears, near the village of Normanton on Trent in Newark. I have written to the council a couple of times as a private citizen to express my doubts and concerns about the matter.
I must thank two councillors principally, Councillor Christine Rose and Councillor Bruce Laughton, for their unfailing efforts on this issue. I also thank Judge John Machin, Dr Charlie Clayton and Mrs Sheila Hamilton for leading a very effective campaign in and around the village of Normanton on Trent, which lies directly below JG Pears’ plant, about 10 miles north of Newark.
I will make no further points, because they have all been made splendidly and eloquently by my hon. and learned Friend, other than to say that as well as all the nuisances that blight the lives of his constituents, such as the smell and the flies, we also get a heavy volume of disgustingly smelly traffic moving through the small lanes of Nottinghamshire and, from time to time, some deeply grizzly spillage. That is not only unpleasant but very dangerous.
The very first case that I dealt with when I was elected in 2001 related to JG Pears in Normanton on Trent. For most of the time since then, it has been a very good neighbour. However, its performance varies hugely. Most of the time it adds wealth, most of the time it adds work and most of the time it is a good neighbour, but not all of the time.
It is important to raise this matter because there is planning permission for a further extension of the plant and because it lies on the boundary between Bassetlaw district council and Newark and Sherwood district council. I would not begin to point a finger at either authority, but operations that occur on the boundary between two authorities tend to fall between two stools.
Let me underline the points already made and suggest that the lives of people in Normanton on Trent—a village of more than 1,000 souls—are affected deeply by this nuisance. I appeal to the firm to moderate its operations, bearing in mind that it can live with us in harmony. I fully understand the restrictions on the Minister, but will he do his best to help not just the constituents of my hon. and learned Friend, but my constituents in Nottinghamshire?
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
I am grateful to my hon. and learned Friend the Member for Harborough (Sir Edward Garnier) for the eloquent way in which he raised this case, and to my hon. Friend the Member for Newark (Patrick Mercer) for underlining the concerns felt by his constituents. This debate demonstrates in a particular setting—two settings, in fact—the way in which my Department’s priorities interact. First, however, I first want to say on a purely human level that I have huge sympathy for the constituents of my hon. and learned Friend, and wish to ensure that any business of this kind is a good neighbour.
To set the debate in context, we want the rural economy to grow, and rendering plants provide an important service to the farming and food producing community by taking waste and animal by-products and processing them for further use or disposal. Such plants are strictly regulated by the Animal Health and Veterinary Laboratories Agency to ensure that animal by-products are handled and processed safely and do not present a risk to public or animal health. They contribute importantly to our priority of safeguarding animal health but, like all businesses, they should be good neighbours.
This particular plant takes in low-risk material from abattoirs and cutting plants but does not take in fallen stock. It turns that material into high-quality processed animal protein for the pet food industry. It gets inspected quarterly by the Animal Health and Veterinary Laboratories Agency, and was last inspected on 15 January—I suspect it will be small comfort to the constituents of my hon. and learned Friend, but in that inspection all was found to be satisfactory.
The Department’s priority is clearly to improve the environment, and rendering plants are subject to integrated pollution prevention and control under a European directive of that name. That directive has been recast in a somewhat strengthened form into the industrial emissions directive, which we transposed last month. Under integrated pollution prevention and control, each rendering plant must have a permit from the environmental regulator that contains conditions on any pollutant likely to be emitted in significant quantities. Pollution is defined in the directive to include the emission of anything that may
“result in damage to material property, or impair or interfere with amenities and other legitimate uses of the environment;”.
Odour and noise are plainly covered by that.
In this case the environmental regulator is Harborough district council. In accordance with the secondary legislation that introduced the EU system of integrated pollution prevention and control in England, the council first issued a permit for the rendering plant in May 2003 and updated it in November 2008. That permit is readily available on the web.
The permit requires all emissions to air from the plant to be free from offensive odour as perceived by the local authority inspector outside the plant site boundary. As we have heard, a group of residents consider themselves to be continuously and adversely affected by odour from the plant. Following their complaints, in May 2012 Harborough district council compiled a report to determine the impact of odour from the plant on the local community and whether any breaches of the permit had occurred.
A second report for the same purposes was compiled last month. Between them, the reports show that the council officers undertook a total of 64 visits to the vicinity of the site between January and November 2012, some in the company of the complainants’ representatives. Between January and April 2012, an offensive odour was found on one of the 30 visits. Between September and November, the period covered by the second report, an offensive odour was found on one of the 34 visits. That in no way diminishes the points made by my hon. and learned Friend or my hon. Friend. I entirely take their constituents’ concerns as they stated them.
The council’s reports point out that the Secretary of State’s guidance for the rendering sector, issued in 2008, recognises that occasional escapes of offensive odour may occur from rendering processes. The guidance is that formal enforcement action may not be needed if there are no more than two such instances in a 12-month period, provided remedial action is taken rapidly.
In the first of the two instances of offensive odour found in 2012, further visits were undertaken on the day but no further offensive odours were found. In the second instance, a problem with the abatement technology on site was identified and, I understand, rectified as soon as possible. The council, taking into account that guidance but making its decision in line with its enforcement policy, has therefore determined that no enforcement action is to be taken. That is a matter for the district council as regulator, but I understand that my hon. and learned Friend is concerned about it.
The district council has investigated the residents group’s complaint about noise. The council’s officers deemed noise emissions to be extremely low, of negligible impact and not in breach of the plant’s permit conditions. I can only report that; I am sure that the residents might have a differing view. I understand that the council’s recent offer to the complainant of sound-monitoring equipment to enable further investigation has been declined.
The district council has correctly pointed out to the residents concerned the availability of private action if they remain of the view that odour from the plant is significantly impacting on the use and enjoyment of their premises. The district council has also pointed out to the residents that they can contact the site manager of the plant if they experience odour problems.
The district council has recommended that the company operating the plant explore methods to abate odours likely to be considered offensive. That is where the possibility of progress might be found. I am pleased to note that the company appears to have needed little prompting in that regard. I understand that it is developing proposals for a new raw material reception facility, which my hon. and learned Friend described, a replacement effluent treatment plant and the installation of a thermal oxidiser. I am slightly dismayed to hear my hon. Friend say that such improvements have not addressed the problem, but let us look to the future positively.
According to my Department’s experts, those proposals, if carried through, should lead to an improvement in the environmental performance of the plant, while developing its business. They should deal not only with odour emissions, but with emissions of ammonia to contiguous watercourses. My hon. and learned Friend alluded to an event that the company is holding in Market Harborough between 3 and 7 pm tomorrow, 6 March at which those proposals will be described to local people, enabling them to comment. I hope that the event, which I understand is being publicised in leaflets to local residents, will help to enable the company to move forward in delivering environmental improvements, while not only continuing to make its distinctive contribution to the rural economy and society but, one hopes, being a good or better neighbour to those who live around it. That would be entirely the best solution, and I trust that it will meet the concerns expressed so eloquently by my hon. and learned Friend on behalf of his constituents.
All Members of Parliament have a depressing sense of déjà vu when we come across “neighbours from hell” issues and the path of least resistance is for the agency—whether it is a housing agency, local authority or the police—to require people to keep a log. There is a feeling among too many people that that is a delaying tactic. However, I hope that with the proposed measures we will find a way forward.
Sir Edward Garnier
May I say how grateful I am to my hon. Friend for his measured response to me and my hon. Friend the Member for Newark (Patrick Mercer)? I am puzzled by the suggestion he has gathered from the district council that my constituents declined to make use of sound monitoring devices. That is not my information. I am slightly concerned that the information he has received from the district council confirms the air of complacency I discussed at the beginning of my remarks. That is not the fault or problem of my hon. Friend the Minister. I know that he is simply acting as an unwilling mouthpiece for the district council, and that this is the system in which we have to operate in these sorts of Adjournment debates. However, may I, through him, urge the district council to up its game and not brush this matter under the carpet, and to ensure that these genuine concerns, concerns confirmed by the constituents of my hon. Friend the Member for Newark, are properly taken account of?
Richard Benyon
I entirely accept my hon. and learned Friend’s point. The information I have shared with the House is only as good as that given to my Department by the council. There is clearly a discrepancy between what my hon. and learned Friend has been told and what I have been told. I hope that this will be clarified in the near future and that the changes the company are making will resolve the issue. I recognise his point that this is a matter over which the local authority has control: it has to address the clearly genuine concerns of local people. These are not the kind of vexatious claims that one might hear from an individual who may object to a particular type of business for the wrong reasons. This is a consistent concern for a large proportion of those who live nearby, and is therefore something that the local authority needs to address. He and I are in a business where perceptions are reality. If that is the perception, then it needs to be addressed as a reality by the local authority.
Question put and agreed to.
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Beer Duty Escalator
(11 years, 2 months ago)
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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
Mr Marcus Jones (Nuneaton) (Con)
It is a pleasure to serve under your chairmanship, Mr Caton. I am delighted to have secured this topical and most important debate in the run-up to this year’s Budget. Since I was elected to the House, I have taken part in a number of debates of this kind, and they are usually extremely well attended. Despite the fact that there are huge pressures on parliamentary time this morning, given the plethora of Select Committees, it is good to see how many hon. Friends and Members are here to support this debate. Given the debate title, I intend to keep to the narrow issue of the beer duty escalator, and I urge colleagues to do likewise. Just as none of us would want our beer watered down, I do not want us to temper our arguments by being distracted from the issue of beer duty.
I will set out a simple, clear case for why the beer duty escalator should be scrapped and beer duty should not be increased in the forthcoming Budget. In making that case, I will discuss the impact of the escalator on the beer and pub industry and the negative effect that the escalator is having on our economy and communities across the country. I will also discuss the positive story that our beer and pub industry has to tell and the reasons why that industry should not be compromised by further rises in the already excessive beer duty rate.
In the UK, 30 million adults drink beer each year and 15 million visit the pub each week. From my postbag, I know what an important issue it is for many of my constituents. Campaigns organised by the Campaign for Real Ale, the British Beer and Pub Association, the Society of Independent Brewers, the National Farmers Union, the TaxPayers’ Alliance and The Sun newspaper have captured the spirit—I probably should not use that word in a debate on beer—of public opinion. The campaigns have chimed with the breadth of public opinion on the subject, and the strength of feeling involved has been expressed by the 108,000 people who recently signed an e-petition calling for the beer duty escalator to be scrapped.
From my postbag, I know that popping down the local for a pint is becoming more and more expensive and out of reach for many of my constituents. Incomes have been squeezed over the past five years or so, and the cost of a pint has become more and more unaffordable. Beer is fast heading towards being a luxury item.
On the economic impact of the escalator, the beer and pub sector is vital to our country; nearly 1 million people across the UK work in the industry. Some 46% of those are younger people aged 16 to 24. The beer industry is also a true success story for British manufacturing: 87% of all beer consumed in this country is made in the UK. If only we could do the same for other products that we consume, our economy would be far more balanced. That is one reason why we should encourage the beer and pub industry and the manufacture of great British beer in our country.
Andrew Griffiths (Burton) (Con)
I congratulate my hon. Friend on the speech that he is making. The pub industry is a fantastic way to get young people into work, give them work experience and teach them the business model. Does he not agree that supporting the pub trade is a fantastic way to tackle our problems with youth unemployment and young people not in education, employment or training?
Mr Jones
My hon. Friend is absolutely right. Young people can enter the beer and pub industry at the bottom by pulling pints behind the bar, an extremely important role, and work their way up within companies to become managers or work for pub companies and breweries. It can be an extremely fulfilling and constructive career for many. We should encourage the industry to take on more and more young people.
Andrew Bingham (High Peak) (Con)
I congratulate my hon. Friend on securing this debate, which is important to many of our constituents. He mentioned the manufacturing contribution that beer makes to the economy. Does he agree that it is not just made by the big brewers—the Carlsbergs and Tetleys—but by the microbreweries popping up across the country? In my constituency, I have a brewery in Buxton and the Howard Town brewery in Glossop. They are also part of the local economy, particularly in rural areas such as mine.
Mr Andrew Turner (Isle of Wight) (Con)
Will my hon. Friend refer also to the number of public houses that have closed over the past five or six years?
Mr Jones
I thank my hon. Friend for that extremely pertinent comment. I will come to that.
In my constituency, the sector accounts for 1,441 jobs, employing 431 young people. It also contributes £33.7 million in gross value added to the local economy. Nationally, the sector adds £19 billion to the UK economy, and it currently contributes £10 billion in taxation to the Treasury. Since the previous Chancellor introduced the beer duty escalator in 2008—my right hon. Friend the present Chancellor continued it in May 2010—beer duty has risen by a staggering 42%. If the planned increase is effected in April following the coming Budget, beer duty will have increased by an eye-watering 50% in five years.
Richard Fuller (Bedford) (Con)
I join others in congratulating my hon. Friend on securing this debate. He mentioned that the escalator principle of the beer duty was introduced by the last Labour Government. Does he not agree that there is something profoundly un-Conservative about having a tax that automatically increases year after year? Would it not be a mark of a Conservative Government to scrap that principle on both the fuel duty and the beer duty?
Mr Jones
Absolutely. It is not a Conservative principle to impose taxes such as the escalator year on year without reassessing the effect of such a tax. He is right that it would be an excellent move for a Conservative-led Government to scrap the escalator and freeze beer duty this year. That is in the context of the challenge for hard-pressed UK citizens, who now pay 40% of all Europe’s beer duty despite drinking only 13% of the beer consumed in Europe.
Lilian Greenwood (Nottingham South) (Lab)
I congratulate the hon. Gentleman on securing this debate. Does he agree that one purpose of Government alcohol taxation policy is to drive consumer behaviour, and that reviewing and changing the beer duty escalator could encourage drinkers towards lower-strength British-made drinks such as beer, which I am sure is made in his constituency as it is in mine?
Mr Jones
I thank the hon. Lady for her comments. It is nice and extremely refreshing to be able to agree with comments made by an Opposition Member. She has made an extremely pertinent point. Beer is a lower-strength product, and it is far better for people, if consumed in moderation, than higher-strength drinks, which may well be more damaging to health if consumed in excessive quantities.
The increases in duty are having a disproportionate effect, in particular on our pub industry and if we compare on-sales with off-sales, especially off-sales made in supermarkets. Before the escalator was introduced, drinking in a pub was four times more expensive than drinking at home; now, after a few short years, it is eight times more expensive, which shows the disproportionate effect on the great British pub.
Julian Sturdy (York Outer) (Con)
I join the chorus of MPs who are congratulating my hon. Friend on securing this important debate. Is there not a real danger—a point he touched on—that we are in an ever-increasing downward spiral? Beer sales are falling and pubs closing; consequently, the revenue to the Treasury is going down. Given that, should not the Treasury focus on the overall tax take and the wider benefits to the economy?
Mr Jones
I think that my hon. Friend has probably read my speech; he has made a pertinent point which I completely agree with. Since the escalator was introduced, beer consumption in the UK has fallen by 17% overall and by nearly a quarter in our pubs; almost 6,000 pubs have closed their doors for the last time and more than 60,000 beer-dependent jobs have been lost. As my hon. Friend the Member for Isle of Wight (Mr Turner) mentioned, we are still seeing 18 pubs close per week, which is extremely alarming when we are trying to encourage economic growth and want to get people into work.
I can recount the pubs in my constituency over the past few years that have had to put the towels on for the last time, such as the Fox and Crane, The Graziers Arms or The Boot Inn, not to mention the many social clubs that have also ceased to exist. Notwithstanding the financial benefit of the beer and brewing industry, pub closures are having a detrimental effect on the fabric of our society, due to the high social impact when a pub closes. Our pubs offer a unique leisure experience, are a great addition to the social fabric of our country and are often at the heart of our local communities; they are akin to community centres for their areas. They offer a safe environment in which drinking can be supervised and highly regulated, which is in stark contrast to much of the street drinking and pre-loading culture that has developed since drinking in our pubs has become more expensive.
Pubs are also great places to meet friends and to make new friends. I met my wife in the Chetwynd Arms in my constituency back in 1997. Although 1997 was obviously a dreadful year in many ways—[Hon. Members: “Particularly for your wife.”] Especially for Mrs Jones. The year had one shining light: I met the future Mrs Jones.
Pubs are also a great place to do business. Many small business people such as tradesmen who frequent the local pubs in my constituency often secure new work from going into the local for a pint, by way of word of mouth, with other customers speaking to relatives and so on and so forth.
As my hon. Friend the Member for Burton (Andrew Griffiths) mentioned, local pubs are also a place where many young people get their first taste of work. I had one of my first part-time jobs in my local pub and found it an interesting experience; at the tender age of 16, and very green at the time, I did not realise some of the things that go on in life, although it became absolutely obvious that they do. Not only was it a great learning experience but it taught me how to deal with people. The experience I gained then has stood me in good stead ever since and is extremely important to my work as a Member of Parliament.
Community pubs sustain many positive community activities. Many of our pubs, their licensees and customers contribute towards the funding and running of all sorts of sporting and other activities, such as football, darts, dominoes and cribbage. I could go on with a long list, but a large number of community activities are run because of our pubs. Also, pub customers are extremely generous people; they contribute financially to charities to the tune of £120 million each and every year.
I have set out why our beer and pub industry is so important economically and socially. Finally, I want to start on the road of appealing to the Minister. He is a listening Minister and takes the concerns of Back-Bench Members of this House extremely seriously. I appreciate entirely the Government’s work in reducing the deficit, which has given us far lower interest rates, helping the whole economy and in particular those people who want to frequent our pubs. I appreciate the freeze on council tax for the past three years, which has helped with the cost of living, and the freeze on fuel duty, which has no doubt helped the beer and pub industry because when the fuel duty goes up the price of a pint goes up. I appreciate the other measures that the Minister and his colleagues are taking to reinvigorate the economy as well, but I also urge my hon. Friend to assess the beer duty escalator and beer duty in general to see if the effect is disproportionate. I and many of the industry bodies believe that the negative effect on the industry is disproportionate. Furthermore, as he knows, estimates from the Office for Budget Responsibility expect £100 million less from beer and cider duty in 2013-14, despite the proposed 5.1% duty increase.
My hon. Friend the Minister and my right hon. Friend the Chancellor want to build on the 1 million private sector jobs created under this Government and to keep the momentum. They do not want to see jobs lost unnecessarily as a result of the planned beer duty increase, but the British Beer and Pub Association, as I know from speaking to it, estimates that up to 10,000 jobs could be lost in the industry if something is not done about the tax on beer and the escalator.
I ask the Minister to give our great British beer and pub industry a break by urging the Chancellor to scrap the beer duty escalator and not to increase beer duty this year. If the Chancellor makes the right decision and backs our British pubs, we will hear the clinking of glasses throughout the country on the night of the Budget, and he will be cheered in every pub in the land.
Joan Walley (Stoke-on-Trent North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Caton. I hope that you, the Minister and the hon. Member for Nuneaton (Mr Jones) will understand if I have to disappear for part of the debate to attend a meeting relating to my work on the Environmental Audit Committee, but I hope to be present for the closing speeches.
I congratulate wholeheartedly the hon. Member for Nuneaton on securing this timely debate. Only last week, in relation to a briefing in the Palace of Westminster, many of us sent postcards to the Chancellor, with the support of CAMRA and the Society of Independent Brewers, to say that the time has come for the Government to review the escalator. As the hon. Gentleman set out, the debate is relevant not only to the Chancellor and the Treasury but to the Department for Business, Innovation and Skills, because we are talking about British manufacturing and a sector that is at the core of all our constituencies. During the preparations for the Budget, it is vital that the sector’s contribution to the economy is recognised. In recent years, we have had lots of leaks in advance of the Budget statement, but in this instance I hope there might even be an early celebration of the Government looking again at what needs to be done.
In my constituency, the brewing and pub sector is a historic yet dynamic and vibrant part of the local economy; it creates jobs and is at the centre of the local hospitality industry. It is part of our cultural heritage and the social life of every community. For those reasons alone, the Minister should listen hard.
Andrew Griffiths
I congratulate the hon. Lady on taking part in the all-party beer group’s campaign to get MPs to work behind the bar of their local boozer. I know that she learned a great deal from that. Almost 100 MPs took part in that scheme. Does she agree that that shows how strongly MPs want to support our local pubs and that they value them greatly?
Joan Walley
I am grateful for that intervention. Many hon. Members belong to that all-party group and regularly attend its functions. I do not know, Mr Caton, whether you are one of them, but I know that you have many wonderful pubs in your constituency of Gower.
Members of Parliament join all-party groups not just to go along for half an hour or so, but to represent their constituents. They would not be part of such groups or put postcards into a barrel to send to the Chancellor if hundreds of people had not contacted them by e-mail and letter and through local pubs. I have visited many local pubs in my constituency and, as a Member of Parliament, have become involved in resolving all sorts of issues. If he listens to anyone, the Minister should listen to Members of Parliament who have first-hand experience of how important the issue is.
My constituency has 93 pubs and one brewery, and I want to speak on behalf of that brewery—the Titanic brewery. It has won awards and works alongside local pubs. The total number of jobs in the beer and pub sector in my constituency is 1,290, of which 668 are direct jobs and 327 are direct jobs for 16 to 24-year olds. It is very much part of local business. The total value that it adds to the local economy is a grand £32.1 million with £0.9 million invested in the local economy.
I am particularly proud of Titanic, and of Keith Bott and the employees, who play a leading role in the Society of Independent Brewers and have been at the forefront of campaigning for the Government to consider their industry during this economic recession. Times have changed since the escalator was introduced, and the Minister should tell us what progress he has made on the review since the last debate in Parliament back in October or November. I hope that he will give assurances on that.
Titanic plays an important and vibrant role in the life of my constituency. It is 27 years old and has grown from two to more than 130 employees, including 35 jobs in Stoke-on-Trent North alone. I draw particular attention to the Bulls Head, where anyone who wants to taste good real ale goes, particularly before a good football match.
The majority of that employment has been enabled by investment in pubs. It is worth noting that although the hon. Member for Nuneaton wanted to talk about the escalator, the value of the small breweries relief has made an enormous difference to many small breweries all over the country. If ever there was evidence that investment in a sector can bear fruit, it is that small breweries relief, which has made such a difference since its introduction back in 2002. The Government should now go one step further and examine the escalator.
The current policy of increasing duty above inflation may seem to be one way of raising revenue, but the Treasury’s figures show that that is misguided. They forecast a very small increase in duty revenue from this policy—small enough that no additional revenue is predicted. The policy is changing societal behaviour. An unintended consequence of duty increases—we heard about this during interventions—is that more and more people are choosing to drink at home or on a park bench, unregulated and unsupervised, and they are switching from beer to wine and spirits. Part of my career many years ago was working with homeless alcoholics, and I cannot stress enough the importance of having supervised places where people may drink responsibly. Pubs are such places.
This debate is critical not just for small breweries such as Titanic, but for the beer and pub industry as a whole, and the supply chain that contributes to it. Since the introduction of the beer duty escalator, excise duty has increased by at least 20p a pint. Beer sales in pubs and clubs have fallen by 23% and more than 6,000 pubs have closed. Beer taxation now costs the average pub around £66,000 a year. Instead of that, we should be creating more jobs, employing more people, and creating more wealth locally. That is possible if we do not have excessive taxation, which is simply not working in a time of economic austerity. For those reasons, I hope that the Government will listen to what is being suggested today.
Greg Mulholland (Leeds North West) (LD)
I congratulate my hon. Friend the Member for Nuneaton (Mr Jones) on securing this debate. He is a big supporter of beer and pubs and it is a great pleasure to be working again with him and colleagues from across the House who support our national drink and our community pubs. This seems to be a case of here we are again, and here we go again.
As chair of the all-party save the pub group, it is always a pleasure to discuss these issues, but I hope that this is the last time we have to discuss the beer duty escalator in Parliament, because I hope that in two weeks this ill-conceived tax—it has not done what the Chancellor in the previous Government predicted, but has caused damage and held back our brewing industry—will become a thing of the past and that we need not ever discuss it again.
I am pleased to see the Minister in his place, and I thank him for the way he has engaged in the matter and listened. He is a supporter of beer and pubs, and he has acknowledged the important role of the brewing sector and pubs, and the opportunities for growth and to be part of getting the British economy back on its feet. I warmly welcome that. He has been listening carefully and reflecting, and I hope that that can also be said for the Chancellor and the Chief Secretary to the Treasury. I urge coalition Members particularly to ensure when we bump into them in the Lobbies that they are also listening. However, the listening must be coming to an end, because there has been a lot of it, as well as a lot of reflecting and campaigning. It is now time for action, and the message from this debate is that nothing other than announcing the abolition of the beer duty escalator in the Budget in two weeks will be acceptable. We urge the Minister to ensure that.
I want to emphasise to the Minister, the Chancellor, the Chief Secretary to the Treasury, the Prime Minister and the Deputy Prime Minister that this is a hugely positive opportunity. Too often in debates, MPs say that they want a tax break here and a tax break there, or a favour and a leg-up. That is not what this argument is about. It is simply about two things. From an economic point of view, the tax simply does not add up. It does not make sense. Even the Treasury’s figures have shown that if the predicted rise in beer duty goes ahead in two weeks’ time, the revenues from beer duty will fall, yet we do not need to be geniuses to see what effect the duty is having on brewers, particularly medium-sized brewers. We need to remember that the tax is a producer tax; it is levied on brewers at the point of production, so it directly affects that sector. Taking it away would lead to a change in investment decisions by those companies.
I had a very powerful and stark conversation with Lancaster brewery—it is not in my constituency. The brewery has done incredibly well to get above the level of small breweries relief, to the extent that it is helping either very little or not at all. I heard about how much the brewery would have to pay in duty, and where it would spend that money otherwise. It would spend it on investment, on employment, on increasing production, on taking on more people, and on supplying more beer around the region, and no doubt, around the country.
If the Minister wants clear evidence—I know that he is both a pub lover and a very capable economist—he only has to look at the astonishing effect of small breweries relief since it was introduced in 2002, and I am not churlish enough not to give credit to the previous Government for doing that. I did so at the time, and it has been hugely important. Some people have the idea that small breweries relief is simply something that has helped small breweries—these cuddly microbreweries—to brew beer, and that that is great for beer lovers, but actually, we are talking about incredibly powerful facts.
Figures from the Society of Independent Brewers—SIBA—show that volume sales of locally brewed SIBA beer, against a declining level of sales in the on-trade, were up 6.8% in 2012. Those local brewers already employ nearly 5,000 people, and the really stark figure is that on average, SIBA brewers invested 23% of their turnover back into the business, and into employment, increasing production, and growth. Clearly, there is a direct link between the level of beer duty and the level of investment that brewers are able to make into their business, and that has a huge knock-on effect. As the chairman of the all-party save the pub group, I am deeply concerned about the number of pub closures in this country. It would be wrong to suggest that that is down to one factor, when a number are involved, but clearly the unfair level of beer duty is a factor, and it is time to address it.
The reason why pubs are affected in a powerful way is that supermarkets can absorb any increase in duty that the Treasury throws at them. They have ways of doing that and even now, they are selling alcohol at a price that many people believe is not responsible. The difference between the price of a pint in a supermarket and a pub is now tenfold—it is ten times cheaper to buy alcohol in a supermarket, compared with in the controlled, sociable environment of the British pub, which as we know, provides community value. The Institute of Public Policy Research published an excellent report, which estimated that the wider social value provided per pub was between £20,000 and £120,000, on top of the economic benefits. An interesting fact for the Treasury and BIS about the local pub is that for every pound spent in a pub, compared with a supermarket, twice as much is then circulated and invested in the local economy.
Therefore, it really is a win-win situation. We all know that the Budget has to focus on growth—I look forward to some of the excellent suggestions from Lord Heseltine being included—and here is a simple opportunity to send the message to Britain’s brewers that we want them to invest, to continue to succeed, and not to fall into the trap that we currently have with small breweries relief, where if brewers start to be too successful, they find themselves being penalised.
I also ask the Minister to look carefully at the levels of duty for all drinks, because when it comes to beer, there has been a blind spot that many of us simply do not understand. Beer has been seen as a cash cow for the Treasury, and that must end. However, I also urge the Minister and his colleagues to look at other levels of duty, and particularly to consider the situation with cider. Cider is, of course, another wonderful drink, which is often produced by small producers. There is also a relief for small cider producers, but interestingly, it does not go as far as the relief for beer.
However, I need to bring the Minister’s attention to the situation we have in which huge, mass-produced cider brands—the likes of Magners and Bulmers—pay a fraction of the duty that equivalent large beer brands pay, and that is simply because of the idea that all cider is produced by small producers. I am afraid that there is a lot of dishonesty in the cider market. When it comes to Magners, so-called “Irish cider”, if it really was Irish cider made from Irish apples, every Irish apple would be making something like 20 litres of cider. Some marketing kidology is going on—I say that as someone who used to work in marketing—and there is a profound unfairness.
I want to see a way of helping our wonderful small cider and perry producers. That is absolutely important, and perhaps the relief to them could be extended, but we must also ensure that someone buying a pint of Marston’s Pedigree or Fuller’s London Pride is not paying significantly more—currently more than double the duty—than someone buying a pint of Strongbow, Magners or Bulmers. There is no justification for that, and that inequality must end.
Andrew Griffiths
The hon. Gentleman is making an important and strong case. Does he share my concern about figures that I have recently discovered showing that one of the largest producers of cider in this country imports 77% of the apples that it uses in production? On the argument that we need to support the cider industry with special pleading because of its importance to UK apple production, does he not agree that those figures demonstrate that all we are doing is subsidising apple production overseas?
Greg Mulholland
The hon. Gentleman is absolutely right, and that is what I was alluding to when I mentioned the marketing claim that Magners Irish cider is made with Irish apples, when it clearly cannot possibly be.
A pint serving of beer is subject to 41p of duty, whereas cider is subject to 19p. I want to reiterate that when we are talking about those wonderful, small producers of cider and perry, they should have our support, but we cannot have a situation where the huge producers—as the hon. Gentleman has said, many of which are not using British or Irish apples—are being given the subsidy that they are getting, frankly, from overpriced beer. As well as protecting small producers, we need that issue to be looked at.
We need to remember that the beer duty escalator is not the only issue facing pubs, and I am delighted that the Government have now pledged to deal with the behaviour of large pub companies. I reiterate the message that the Minister must send to the large pub companies, which is that if the Government go ahead, as they must, and get rid of the beer duty escalator, pub companies need to pledge that they will pass on the reduction in duty and cost directly to their lessees on their so-called wholesale and list prices. That is fundamental, or frankly, those pubs will not see any benefit, because the money will simply deal with the debts that the companies have got themselves into. The Minister must put that message out, as well as listening carefully to the figures on investment that have been put in front of him, when considering the effect of his decision.
Richard Fuller
To help our hon. Friend the Minister, we know that money is short and that taking this action will cost the Treasury money, so what suggestions does the hon. Gentleman have on how the Government can make countervailing savings? It is unfair for us to go into a Budget discussion and ask the Government to make a cut in the duty that will be raised without coming up with suggestions on how the shortfall will be made up.
Greg Mulholland
The first point is that this tax does not make economic sense, because it is not bringing in what it is predicted to bring in. That simply is not sensible. A great deal of work has been done—this was a conversation that happened after last year—to show the effect that it will have on investment. In the end, we all agree that taxation is there to encourage. That is really what we would like taxation to do—to encourage positive decisions. What we are saying is, “Get rid of this tax and have fairer beer duty to encourage the sort of investment that has been demonstrated at the smaller end, where people do have lower and slightly fairer beer duty.” The prediction is that 10,000 new jobs would come from doing that. Then there would be the employment tax and the increase in business rates.
At the moment, instead of that, we have declining sales, which means lower duty and lower VAT. We have pub closures, which means a loss of business rates, council tax, employment tax and so on. We must turn this vicious circle into a positive one, and this is an opportunity to start to do that, but the hon. Gentleman is right to say that we must be focused on those economic issues. Let us look at the unfair subsidy provided to the huge producers of mass-produced cider. That would be one way of equalising things. We need to take the opportunity to look at that.
I have had conversations with the Minister about specific ways to assist pubs through the tax system. I hope that he has been looking at that. I hope that he has been trying to find a way, perhaps through rates, to have relief for the community value of a pub. I hope that he will continue to look favourably at anything that can encourage people to consume alcohol responsibly in pubs, as opposed to buying it from supermarkets.
I hope that this is the last time that we need to discuss this issue. It is great to see the faces supporting this campaign around the table, but I genuinely hope that the next time I see them will be with the Minister and that we will all be able to have a pint of excellent, locally produced British beer, knowing that it no longer has been subject, at the point of production, to the unfair, unnecessary and illogical beer duty escalator.
Nigel Mills (Amber Valley) (Con)
It is a pleasure to speak in the debate. I join in the congratulations to my hon. Friend the Member for Nuneaton (Mr Jones) on securing it. We have spent much of the past year working together on beer, as we both took part in the all-party beer group’s inquiry into the smuggling of beer to try to get round the UK duty rules. That issue has not yet been raised much in this debate. One reason why we do not get the increase in revenue that we would expect from the beer duty escalator is the increasing amounts of beer that are brought over in what we could euphemistically call white vans. I suspect that they are actually large trucks, sneaking through our border, so that the beer can be sold round the backs of industrial estates.
It was quite scary, when we took evidence from Her Majesty’s Revenue and Customs, to hear exactly what the scale of the fraud was. It was something like the equivalent of all off-sales outside supermarkets in the UK, which is a seriously large volume. I am not saying that every small shop selling beer is selling non-duty-paid beer; that was just to show the scale of the problem that we have. We have to consider whether, all other things being equal, a policy that just generates extra rewards for people smuggling and avoiding beer duty is sensible when we are trying to encourage the legal trade.
I agree with what everyone else has said. I think that everyone has used the useful statistics that we have for the debate. The idea of increasing beer duty by more than inflation every year was probably wrong when it was introduced four or five years ago. In fact, various members of my party and the Liberal Democrats said at the time that it was wrong. It is a pity that taking on the chains of office means that we change our mind on some of these things.
It was intriguing to see that the present Secretary of State for Health was not happy with the policy when he was in a shadow role five years ago. I hope that that is something that my right hon. Friend has taken with him into the Department of Health and that we can see a reduction in the rather scatter-gun and unfair efforts to stop ordinary, reasonable people having an ordinary small amount of drink every week. It is right that we tackle excessive drinking, but we should not be trying to tackle the ordinary drinker and push the cost up for them.
If we are trying to tackle excessive alcohol consumption, which we clearly should, it is important to point out that the beer duty escalator targets people who drink, in pubs, pints of British-brewed beer. I suspect that that is not the biggest health problem caused by alcohol that this country has. We should be encouraging people to drink a nice, relatively weak pint of beer, rather than sitting at home drinking a litre of spirits or whatever. That is the direction of travel we should be looking at—encouraging the supervised drinking of British-brewed products in pubs and discouraging the drinking of imported cheap spirits.
I am not convinced by the arguments for the health benefits of this policy and I am probably even less convinced of its economic advantages. The forecast in the Red Book last year showed that the expected increases in this Budget would not actually raise any more money. I accept, and I will happily make the argument, that we are pretty desperate for revenue to reduce our deficit, but it seems bizarre that a policy would be introduced that raises no money and actually does damage to a pretty important industry that is a significant employer throughout the country. While I am on that issue, I should join the list of hon. Members praising their small local breweries. I can think of a fair few—Amber Ales, Leadmill, Bottle Brook, Coppice Side and Marlpool. I have to say that I think I have drunk quite a lot of all their beer. I made a special effort to have a barrel of beer from the Marlpool brewery at my engagement party a few weeks ago, which went down very well, so I am happy to say that I will do my bit to support my local brewery trade.
We can see that the number of these breweries is growing every year. Every time we drive round an industrial estate, we find that a new brewery has sneaked up round the corner. We should be supporting this trade. We should be supporting our pubs. They generate employment and they provide a community facility that we value. Therefore, I do not believe that the original case for increasing beer duty by more than inflation holds water any more. We should at the very least be stopping that above-inflation increase. I can see the argument that all other costs go up by inflation, so why should not the duty element? I cannot see the argument for putting it up by RPI plus 2%.
I happily agree with all the other hon. Members who say that beer duty is too high now and it is doing great damage. We have had a 42% increase in beer duty in the past four years. We have had enough. Let us try to support people and freeze it. If the Government cannot quite go that far, let us at least announce in two weeks’ time that we are scrapping the escalator and we will have to deal only with inflationary rises each year. That would at least be a fair situation from which to go forward.
Glyn Davies (Montgomeryshire) (Con)
Thank you for allowing me to speak in the debate, Mr Caton. I feel very much like a new boy: I have been listening to hon. Members who have been involved in this issue for a long time. I came along to the debate today because it is very important to my constituency and I want to add to and perhaps build on points with a local perspective that other hon. Members have raised. Of course, like others, I congratulate my hon. Friend the Member for Nuneaton (Mr Jones) on initiating the debate.
We are talking about the rapidly increasing level of duty, and I want to refer to the impact that the rapid changes in cost have on the social life of my constituency. I join others in appealing to my right hon. Friend the Chancellor of the Exchequer, or to my hon. Friend the Minister who is before us today, to think not just of the economic impact, although that is hugely important, but of the social impact.
In my constituency, there is a social impact to discouraging people from using the local pub, which is still a huge part of the local community. Montgomeryshire is a very rural constituency, and traditionally the social life in small villages is only about the local pub. The situation is not what it was when I was young and the whole of village life centred on the young farmers club and the local pub, but today the pub is still very important, particularly to elderly people. I believe that visiting the pub is a very good way of counteracting the loneliness that often arises because people are living so much longer; the social life associated with a pub can often be helpful in counteracting depression and perhaps even dementia. I believe that social activities do have an impact. That is an important issue for us to consider.
Anne Marie Morris (Newton Abbot) (Con)
I agree with my hon. Friend that in a rural community very small micro-breweries and pubs are very important. My constituents in Devon are great supporters of Teignworthy, Isca, Hunter’s and Red Rock. However, we need to look at something creative. Has my hon. Friend considered looking at the EU rules in this area? We all seem to be saying that pubs need our support and that if beer in pubs was taxed less than the beer in supermarkets or wholesale, the situation would improve. As I understand it, EU legislation does not prohibit that distinction, but it does not make provision—
Glyn Davies
Thank you, Mr Caton. I was enjoying that intervention, although I must admit that I had some initial doubts about the reference to involving the EU and introducing regulations. I have always found myself nervous about encouraging that; we have rather too much of it already. There are instances in which the EU can be useful to us in achieving our objectives, so I will have to consider how that could happen.
A Treasury Minister will respond to the debate today. It could be said that it is an appeal before the Budget—it seeks to influence the Budget. We are talking about a reasonable level of taxation on beer. Most people think that the level of taxation is unreasonable. Due to its negative impact, it does not even produce extra income that might interest the Treasury, because it has risen incredibly quickly.
I felt some association with the comment of my hon. Friend the Member for Bedford (Richard Fuller), who said that the policy was un-Conservative. I do not want to draw a distinction between a Conservative policy and a policy from the other side, but it must be un-Conservative to seek to introduce social change in our country through the escalator’s year on year additional taxation, over and above what might be considered an inflationary increase by the Treasury. It is incredibly un-Conservative and I very much hope that we will see the end of it next week.
A lot of hon. Members have talked about the economic impact. It is a great British industry. Even in my constituency, which has had no tradition of brewing at all— the Eagle Brewery was the last major brewery, and that closed in the 1980s—there are new micro-breweries. They are employing people. One of them has taken over a local pub that was in danger of closing. Monty’s Brewery and the Waen Brewery are the subject of conversation. They are not employing a lot of people, but the potential for micro-breweries across Britain is huge. They are an important part of British industry, and we should not clamp down on them or discourage them.
My last point is that the British beer drinking industry—if I may call it that—is hugely important to the agricultural sector. Not so much in my constituency, where most of the barley grown goes into feedstock, but in England in particular and in some parts of Wales and Scotland, growing malting barley is a massive part of agriculture, and we need to act to protect it. In south-east England, the hops industry is important and a huge number of jobs are involved.
We are used to and accept a reasonable level of taxation, but a 50% increase in five years is not reasonable and not sustainable. It causes huge damage—social damage—across the country and in the end it will cause economic damage to the Government as well. The Minister should sit down with the Chancellor, have a long discussion about this issue as they prepare to deliver the Budget, and bring the beer escalator duty to an end.
Andrew Griffiths (Burton) (Con)
I am grateful to be bringing up the rear in the debate today. I am mindful that time is short; it always frustrates me when I sit in a debate and the Minister has less time to contribute than the others who have spoken, so I will keep my comments brief. Everybody knows that I bang on for Britain about beer.
We are at the culmination of a hard-fought campaign to support British brewing and save the great British pint. I do not think that we can overestimate what a perilous situation our brewers and publicans find themselves in. It is for that reason that so many people have come together in support of the campaign. We all recognise how important it is for the future of British society, as well as being an important part of the economy.
Dan Rogerson (North Cornwall) (LD)
I am grateful to the hon. Gentleman for giving way. I wish him a gool Peran lowen—a happy St Piran’s day. In regard to his point about traditional British culture, does he agree that the British brewing industry is looked at by other parts of the world for its innovation and the diversity of its products? There is a huge export market and we need to encourage the growth of the brewing industry.
Andrew Griffiths
Gool Peran lowen to my hon. Friend. He has been fantastic in supporting the British brewing industry and the all-party beer group. He is right to say that massive innovation is taking place in British brewing. Only this month, a beer innovation summit organised by The Publican’s Morning Advertiser was held in my constituency at St George’s Park. It showed the depth and breadth of new ideas and the potential for the industry to export a great British product overseas. It is interesting that almost 90% of all the beer brewed in this country is drunk in this country. That is because we recognise brilliance and what a great product it is. We can export it overseas and create jobs as a result.
The campaign has brought together the British Beer and Pub Association, the Society of Independent Brewers and the Campaign for Real Ale, and all those we would expect to support the brewing industry, but it has also brought others together. The TaxPayers Alliance has got on board and put together a fantastic campaign—“Mash Beer Tax.” I encourage hon. Members to go online to www.mashbeertax.org. The TaxPayers Alliance has a reputation for standing up for the British taxpayer and has done a great job in getting behind this important campaign.
Hon. Members will have noticed the support we have from The Sun, which has launched its own campaign to scrap the beer duty escalator and save the great British pint. I am sure that the Minister will have noticed the contribution to the debate yesterday, made by Sabine from London on page 3, “News in Briefs.” She railed against the unfairness of the duty that British beer drinkers pay compared with what Spanish beer drinkers pay, and quoted:
“Beer is proof that God loves us and wants us to be happy.”
The Minister could make a great many people across the country happy at the Budget by scraping the hated beer duty escalator.
Let us look at the impact of the beer duty escalator since it was introduced by the previous Government. Sales are down 17% in the off-trade and sales are down 24% in pubs. That equates to 1.5 billion fewer pints sold in pubs across the country. Those are jobs. Every time we do not sell beer, jobs are lost in my constituency and in constituencies across the country.
I notice that we have had a fantastic game of “brewery bingo” today; hon. Members have named the breweries in their constituencies.
Lilian Greenwood
Before the hon. Gentleman goes on to list the many breweries in his constituency, will he say what impact he thinks the 2.5% VAT increase had on sales of the pint down the pub?
Andrew Griffiths
Since the beer duty escalator was introduced by the hon. Lady’s Government, we have seen beer duty increase by 42%, and anybody can work out that that will have a very damaging impact. I am a little disappointed that she is trying to score political points. The debate has been notable for its cross-party support.
Andrew Bingham
My hon. Friend is well known for his support of the industry. If we are going to start playing politics, does he share my delight over the number of coalition Members here compared with Opposition Members?
Andrew Griffiths
This important debate has united the House. Some 151 MPs from all parties have signed my early-day motion on the beer duty escalator, and it has support from across the House. It is notable that when we debated the matter on the Floor of the House, only one Member spoke in favour of the beer duty escalator, and I hope that the Minister will repent and change his mind, because he was isolated in that debate.
In the final quarter of last year, 138 million fewer pints were sold in this country compared with the previous year. That is significant, and that is why we must support the brewing industry.
My hon. Friend the Member for Bedford (Richard Fuller) asked from where the money would come to replace the beer duty escalator. I will say two things: first, it is clear that the beer duty escalator is not raising money, because it impacts on beer sales. Beer sales are plummeting, and the Treasury is not raising the money that it expected from the beer duty escalator. Secondly, let us look at the sectors that are growing: cider is in substantial growth, and vodka, which is the drink of young people now, is in growth. We need to have fairness across the duty system that encourages a great British manufacturing success story.
I will point the Minister to some important facts. In his constituency, 2,370 people are employed in the brewing and pub trades, and 898 16 to 24-year olds in his constituency are employed as a result of brewing and pubs. That could be boosted; the brewing and pub industries could help support growth and employ young people. We all recognise the importance of brewing in our constituencies as an economic driver and employer. We also recognise the cultural importance of the great British pint.
There has been some talk today about the impact of drinking on health and antisocial behaviour. I think that the great British pub is the answer here, not the problem. Drinking in a supervised environment with a landlord who would tell someone, “I am sorry. I think you’ve had too much. I am not serving you any more,” is a far better way for young people to be introduced to alcohol than, as the hon. Member for Stoke-on-Trent North (Joan Walley) mentioned, drinking on a park bench or unsupervised at home when mum and dad are not there.
Drinking a pint of beer in a great British pub is one of life’s simple pleasures. It should be enjoyed by every British man and woman across the country and they should do it more often, but they are being priced out of that simple pleasure.
The point about the beer duty escalator—or any escalator—is that when one reaches the top, it is time to get off. We have seen from the falling revenue and sales and the number of pubs that are closing up and down our country that it is time to get off the beer duty escalator. By scrapping it in the Budget, the Minister will be able to promote growth and jobs and put a smile on the face of British drinkers across the country.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
It is a pleasure to serve under your chairmanship this morning, Mr Caton. I thank the hon. Member for Nuneaton (Mr Jones) for securing this important debate. As a number of hon. Members have suggested, there is a certain sense of déjà vu, given the number of debates that there have been on the issue, but the timing of this debate, ahead of the Budget, is critical.
I stress at the outset that a number of my hon. Friends have let me know that they would have liked to participate in this debate, but they were not able to do so because of other parliamentary business or commitments that they had already made. I hope that we can continue with the generous spirit in which the debate has been conducted, and focus on a number of issues that Members on both sides of the House would like the Minister to answer—although that is not to say that I will not make some reference to the previous Government’s position or press the Minister on some questions that I think all of us would like to be answered.
It is important to recognise, as many hon. Members have, the organisations that have briefed Members and allowed them to make visits and listen to representatives of the industry in their constituencies. Those organisations include the British Beer and Pub Association, the Society of Independent Brewers, the all-party groups on beer and on pubs and the Campaign for Real Ale. I have worked closely with CAMRA in my constituency; I had the joy of judging one of the beer competitions at a local real ale festival, for which I thank the local CAMRA organisation. We also heard about representations made by the TaxPayers Alliance and The Sun.
I always enjoy such debates, because they allow us to have, as one hon. Member suggested, not just a brewery bingo, but a pub bingo. They give us a list of places to visit when we travel around the UK when not involved in parliamentary business.
A number of hon. Members have talked about the importance of the wider brewing industry and of manufacturing. There is also, of course, the bottling sector, from which representations have also been received. We have discussed small and medium-sized enterprises, micro-breweries, the rural economy, and the focus of the pub trade as a base for the local community. The hon. Member for Montgomeryshire (Glyn Davies) recognised the impact on elderly people and the important social role that pubs play in the community. We also heard about the charitable events and the various activities that pub goers regularly get involved in.
In his opening speech, the hon. Member for Nuneaton praised the Minister as a listening Minister. He recognised the need to deal with the deficit and welcomed, as I have, some of the actions taken on fuel duty. He urged the Minister, as other hon. Members did, to assess whether the escalator was disproportionate. I will return to that issue with some specific comments for the Minister to consider.
My hon. Friend the Member for Stoke-on-Trent North (Joan Walley) talked about responsible drinking, which is important. Like her, I spent some time working in the voluntary sector before becoming a Member of Parliament. I have worked in a project that dealt with homeless people with drinking problems. I have also spent some time, when I was a social work student, working at a drinking problems unit in a psychiatric hospital. I have seen the difficulties and problems that emerge when people get involved in problem drinking. One theme that has come out from the discussion is the importance of the pub sector in providing a different ethos, culture and way for people to consume alcohol enjoyably and responsibly. We are all concerned to ensure that that continues.
Whatever regimes are put in place—this is where there is a VAT issue—to support responsible drinking, we all want to ensure that supermarkets are not given an unfair advantage over the pub sector. A number of hon. Members have talked about that. Regarding VAT, I do not think my hon. Friend the Member for Nottingham South (Lilian Greenwood) intended to make a hugely party political point—perhaps a slightly party political point. This important issue needs to be addressed.
The Opposition believe that the Government made a mistake in 2011 in increasing VAT, which had an impact not only on the pub trade, but more widely on families and businesses around the country. That rise, which was equivalent to a 12% increase in tax for the industry, was in the same year that the coalition introduced the biggest ever pence per pint increase in beer duty.
Richard Fuller
We all know that the last Labour Government left a crippling deficit for this coalition Government—I am being slightly party political—who have had to clear up the mess that they left behind. The escalator increases taxes on working people who enjoy a pint. Does the hon. Lady think that it was a mistake in principle for the last Labour Government to introduce that to our taxation system?
Cathy Jamieson
I hear what the hon. Gentleman says about the deficit, but the last Labour Government had a very good reason for doing what they did at the time; the circumstances are now different. Far be it from me to try to defend the Minister or give him a way out of dealing with the difficult issues, but I say gently to hon. Members that, as a responsible Opposition, with a stream of people saying, “You must not raise this, tax that or do anything else,” at the same time as dealing with the deficit, there are hard choices to be made.
In the debate in the Chamber on 1 November, I said that it was right, in the present economic circumstances, for the Government to undertake a review of the economic impact of the escalator. Indeed, I have called on them to do the same on a range of other matters, one of which is air passenger duty, about which many people are making representations. I simply make that point because we must address the wider economic issues.
Andrew Griffiths
The hon. Lady criticises the Government for what she says was the introduction of the biggest ever increase in beer duty. Will she tell us which Chancellor announced that increase?
Cathy Jamieson
The hon. Gentleman knows as well as I do the history of the increase, and I simply say that it was at that stage. This Government have to accept responsibility for the decisions that they have taken: they have not chosen to change the escalator that was introduced by the previous Government.
I am all ears to hear what the Minister will say this morning. I have heard a couple of such debates. In the last one in the Chamber, he was in “listening mode”, as he reassured us several times. He said that
“as an incoming Minister who is new to this portfolio, I plan to keep nothing on the shelf. I will be looking at everything, which includes all duties and taxes for which I have responsibility. That would be a sensible thing for any Minister to do.”—[Official Report, 1 November 2012; Vol. 552, c. 439.]
I agreed with that at the time, because I thought that it gave him the opportunity to introduce changes.
As has been mentioned, The Sun is undertaking a campaign about the increase. In a recent article, a Treasury spokesman was quoted as saying:
“Revenues from alcohol excise duty make an important contribution to reducing the deficit. But where we can take action we have.”
I want to hear from the Minister whether that means that any change has been ruled out or is still being considered. I also want him—I will give him plenty of opportunity to respond—to answer the question asked by the hon. Member for Leeds North West (Greg Mulholland) about the amount of savings and the effect on investment. Is it not now the time for a proper review of the economic impact of the escalator, to give us an evidence base in today’s economic climate? Will the Minister give us his latest assessment of the economic impact of the cancellation of the escalator? Will he simply give us the information that he and his officials have already worked on? Will he address what the impact would be of the Government acceding to our request to cut the rate of VAT temporarily?
Nigel Mills
The hon. Lady has gone back to the topic of VAT. Does she regret that when the previous Government reduced VAT in 2008, they increased the duty on alcohol, so that the VAT cut had no beneficial impact?
Cathy Jamieson
We are at the stage in the parliamentary cycle when the coalition Government must absolutely take responsibility. Hon. Members who are in government have the power at this time. As I have said, the then Chancellor took that decision on the basis of the economic circumstances of the time, as Ministers must do today.
I simply hope to extract some information from the Minister about what assessment he has made and what the current thinking is. I would not expect a Minister to say what will happen in the Budget. It would clearly not be right for him to do that, but he could give us some information about his thinking and perhaps about what he has ruled out, and I look forward to his speech.
I thank all hon. Members who have taken the time to speak in the debate. As I have said, the fact that only a few Opposition Members could take part this morning does not in any way suggest that they do not take the issue seriously. We look forward to hearing from the Minister.
The Economic Secretary to the Treasury (Sajid Javid)
May I say what a pleasure it is to see you in the Chair, Mr Caton?
I thank my hon. Friend the Member for Nuneaton (Mr Jones) for, and congratulate him on, securing this important debate. I note with interest that he is holding this debate only 15 days before the Budget, so I congratulate him on his excellent timing. I thank all hon. Members—I counted seven—who contributed to the debate. I recognise the work done on this subject by institutions outside Parliament, particularly the British Beer and Pub Association, CAMRA and the TaxPayers Alliance. That work adds to the quality of the debate, and that quality is always welcome in our debates in Parliament.
My hon. Friend made some excellent points. One of the most interesting, which I recall from the debate in November, was that he met his future wife in a pub. That shows that pubs really are rich institutions that play an important role in social cohesion, a point that was well made by my hon. Friend the Member for Montgomeryshire (Glyn Davies). His focused point was on how the issue is about not just the economy or the cost of beer but the social contribution of pubs throughout the country, particularly in rural communities—like his and, I might add, mine—in which pubs are a key part of the local community. Pubs and brewers up and down the country should be assured that they have some passionate advocates in Parliament.
In the time available, I will try to respond to all the issues raised today about beer duties, the actions taken by the Government to help pubs and brewers in general, and the Government’s alcohol strategy. In response to the shadow Minister, the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), my hon. Friend the Member for Burton (Andrew Griffiths) said that, understandably, he wanted this to be a cross-party discussion. I think that that is right, so I will not point out that I did not hear the hon. Lady apologise for introducing the escalator in the first place.
I will first focus on beer duties. The Government inherited the current rises in alcohol duties from our predecessors, as has been said. The 2008 Budget announced that alcohol duties would rise by 6% that year, and then by the retail prices index plus 2% in the next four years. The Budget in March 2010 extended those rises for a further two years, until 2014-15. If the Government were to cancel the planned 2 percentage point rises for beer, it would cost the Exchequer £35 million next year and £70 million the following year. Given the current public finances and the sums involved, it would be prudent for the Government to think carefully about the consequences of making any such tax changes. The Government continue to keep all taxes under review and regularly monitor the impact of alcohol duty rates on both the industry and consumers.
At present, our monitoring suggests that the decline in the nation’s beer consumption predates the increases in duty and is a reflection of how consumer tastes have changed. Beer’s share of the total alcohol market has declined by nearly 30 percentage points since the mid-1970s. More than 85% of the beer consumed in the UK is brewed in the UK, which was a point made by my hon. Friend the Member for Nuneaton, and we want to continue to support such business.
Brewers will benefit from a number of actions this Government have taken to support all businesses. The reduction in the rate of corporation tax and the temporary increase in the annual investment allowance, for example, will enable them to invest in new machinery. As my hon. Friend the Member for High Peak (Andrew Bingham) highlighted, the small breweries relief supports microbreweries by reducing their beer duty by up to 50%, and it has contributed to an increase in the number of such breweries. Both consumers and pubs benefit significantly from the diversity of products produced by the 730 microbreweries in the UK, and the Society of Independent Brewers estimates that small breweries relief has increased the number of jobs by 1,000 since it was introduced in 2002.
There are many ways in which the Treasury supports brewers. For example, my right hon. Friend the Chief Secretary to the Treasury recently helped to launch the Ginger Rodent beer at Aviemore brewery. Perhaps that is what my hon. Friend the Member for Nuneaton meant when he mentioned innovation in the industry. We must recognise, too, the contribution made by the right hon. and learned Member for Camberwell and Peckham (Ms Harman) in helping to promote and popularise that product.
Andrew Griffiths
I thank the Minister for giving way and for his support for the industry. He will know that beer and pubs pay £11 billion in tax, and that some brewers are paying 50% of their turnover in tax and duty. If we compare what those brewers are paying with what some UK businesses pay, perhaps he should consider scrapping the beer duty escalator and introducing a coffee tax.
Sajid Javid
My hon. Friend is always full of innovative ideas, but he makes a serious point about tax avoidance, which this Government take very seriously and will continue to do. Clearly, the more we clamp down on tax avoidance and tax evasion, the greater our scope to act more flexibly with measures such as beer duty. May I take this opportunity to thank him for the work that he does in chairing the all-party beer group and my hon. Friend the Member for Leeds North West (Greg Mulholland) for his work in chairing the all-party save the pub group?
The Government recognise the importance of brewers and the contribution that pubs make to our local communities and the wider economy. Unfortunately, the number of pubs has been declining for decades, but that reflects the changes in consumer tastes and in lifestyles. The number of pubs continued to decline in the early 2000s, despite relatively flat alcohol duties in real terms. None the less, we continue to support pubs through our policies. For example, the drop in the small profits rate from 21% to 20% in April 2011 has supported thousands of small businesses such as pubs. About a fifth of pubs currently receive a reduction in the business rates they pay. Small pubs can also benefit from small business rates relief or rural rates relief, and the Government have extended the small business rates relief holiday until March 2014.
The majority of pubs have also benefited from the reform of gaming machine taxation introduced on 1 February, and they have the opportunity to benefit from the Live Music Act 2012, which came into force last October, making it much easier for pubs to put on live music events. On top of that, in January the Government announced plans for a statutory code alongside the independent adjudicator to ensure fair practice between large pub companies and their tenants on issues such as rent and the price publicans pay for their beer. The Government will be consulting on those plans shortly, and I hope that Members present will make pubs and publicans in their communities aware of the proposals.
Let me talk about our wider economic policy, which includes the strategy to reduce the record budget deficit that we inherited. That strategy has led to lower interest rates, which benefit people who have mortgages. If interest rates were just 1 percentage point higher, the average mortgage would go up by almost £900 a year, which is money that could be spent in pubs, and companies up and down the country would pay another £10 billion in interest in servicing their loans. Clearly, low interest rates have been helping companies, especially small and medium-sized companies. Our record increase in personal allowances has also put more money in people’s pockets, which they can use in their local pub. My hon. Friend the Member for Amber Valley (Nigel Mills) mentioned the change in fuel duty, which means that rises that we inherited from the previous Government have not gone ahead, and that again has meant more money in people’s pockets.
I want to say a quick word about our alcohol strategy. Moderate alcohol consumption can be positive for people’s well-being, but the Government are committed to tackling cheap alcohol and irresponsible alcohol consumption. We have therefore reformed beer duty to support responsible drinking. In October 2011, duty was halved on low-strength beer, while duty on high-strength beer increased by 25%. That was warmly welcomed at the time by many hon. Members and by CAMRA.
The Government have also had a consultation on minimum unit pricing, and we will be announcing the results very shortly. My hon. Friend the Member for Burton made some excellent points about responsible drinking.
In the interests of time, I shall conclude my remarks. I am glad that we have had the opportunity to discuss beer duty, brewers, pubs and the alcohol strategy, and we have had, I think, a constructive debate. I hope that I have reassured hon. Members that the Government fully support pubs and brewers. As I have shown in some of the examples that I have cited, the Government have already taken action in that regard, and, despite our tight fiscal situation, I am keen for them to go further. Hon. Members will understand that I cannot make any specific commitments on action; we have to leave that for the Budget. None the less, as one of my hon. Friends mentioned, I like to be seen as a listening Minister, so please be reassured that I take the matter seriously, and that today’s debate has served to underline its importance.
Social Care (Bradford East)
(11 years, 2 months ago)
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Mr David Ward (Bradford East) (LD)
Thank you very much, Mr Caton, for calling me to speak. It is good to appear before you today and to have my hon. Friend and colleague, the Minister of State, Department of Health, responding to this debate.
The Secretary of State for Health said in his statement to the House of Commons on this issue that
“these reforms herald an historic change in the way in which care and support are funded.”—[Official Report, 11 February 2013; Vol. 558, c. 594.]
Indeed they do, and the Minister is not only obliged to see these measures through—he has a duty to do so—but is actually quite privileged to be part of what I believe will be seen in the future as incredibly important legislation. As the Secretary of State said, the reforms that we are planning are “historic”. I think that the Minister like me, would want to thank on the record his predecessor as Minister, our right hon. Friend the Member for Sutton and Cheam (Paul Burstow), for the work that he did in introducing the Health and Social Care Act 2012 and for his commitment over a long period of time to this crucial area.
I believe that how we deal with social care, and how we fund it, is one of the biggest challenges that the Government face. To provide a local context, Bradford has 79,000 people over the age of 65, and that number will increase during the next 10 years to 85,000. The cost of caring for people over 65 in Bradford will increase by £30 million by 2025, on demographics alone; that does not take into account the increasing level and scale of need that people over 65 will have. Across the Bradford district, it is estimated that 5,500 people have dementia, but only 52% of those people are currently diagnosed.
We felt that this issue was so important that we could not ignore it. We not only needed to find out what the local perspective was but beyond that we needed to give an opportunity to people across Bradford, and not just to people within my constituency, to contribute to legislation. We carried out a survey; 35,000 survey forms were distributed. We also carried out interviews with carers, users and stakeholders, and we held a summit in January, which was attended by Baroness Barker, to report back on our findings. I want to put on record my thanks to Bradford council, Bradford Alliance on Community Care, Age UK Bradford and District, Alzheimer’s Society Bradford, Ideal Care Homes, the Bradford and District Disabled People’s Forum, the Consortia of Ethnic Minority Organisations and the Carers’ Resource, whose help and support were received during the production of the report; indeed, without their support we could not have compiled the report, which we have already submitted to the Minister. We have also received research and case studies from Scope, and we thank it for that.
I must say that, although I may refer to one particular case study today, reading the case studies that were submitted to us and that we collected was the most disturbing aspect of the work we carried out. We can look at statistics, figures, trends and analysis, but when we look at how the care system treats individuals—I have to say that very often such care is not very good—the importance of this issue really comes home to us.
We made a range of findings. Of course, funding is a crucial issue. We can look at the background. Yes, we can say that it is for local authorities to make priority decisions within their own areas, but that is happening against a background of a reduction in funding to local authorities. Many of the remedies that we came across required local solutions, but the context is that there has been a 16% reduction in spending on social care in Bradford in the past two years, and there is a proposed further reduction of £7 million for 2013-14.
We found that enormous contributions are made by family, and often also by friends, towards paying for the costs of care. In Bradford, 65% of the residential homes charge top-up fees, and 21% of the contributions to pay for those fees come from family and friends. I must say that the Dilnot proposals and principles received widespread support from the people we contacted. In particular, it was interesting to note that when we talked about the funding of social care, although the average age of respondents was over 65, many of them regarded the funding of social care from universal benefits to wealthier older people as being their favoured way forward in order to address the funding gap. The average house price in Bradford is £94,000, so people can immediately see the benefit to a place such as Bradford of having a £123,000 threshold by 2017. However, we worry about a national cap because it represents a greater share of wealth in a place such as Bradford, where there is much deprivation and lower incomes than elsewhere, but the general principles are applauded.
We have some problems in Bradford with self-funders, who pay more than local authority-funded care users. I think that there are provisions in the Health and Social Care Act 2012 to look at finding a greater role for the local authority in brokering services on behalf of self-funders, which people welcomed.
There was an issue that cropped up time and time again, and not only in our research; when I was a councillor, I held a hearing to try to get the views of the elderly across the constituency and it cropped up then. It is the issue of isolation and loneliness for the elderly, and it has become an issue of the utmost importance. Age UK believes that 10% of over-65s are either lonely or very lonely. Of course, there is not only the impact of loneliness on how a particular person feels there and then but the impact on their long-term health. Indeed, there are indications that isolation and loneliness may, in certain cases, lead to premature death. In our survey, 95% of respondents believed that the loneliness and isolation that I have referred to would have long-term health repercussions for those affected.
To provide more local context, some cultural barriers to ethnic minority communities’ acceptance of residential care were identified. We believe that that issue needs to reviewed on a national basis, to see whether any generalisation can be made from the particular experience of Bradford.
The issue of access to information was considered very important by respondents to our survey, and people’s increased dependence on online access to information was not accepted as being the best way forward. There is still a desperate need for face-to-face contact, so that information can be transmitted to those who are often in a vulnerable position and who are entering a world they have not been in before. For many people it will be a completely different world, either as a receiver or user of care. It will involve jargon, including technical terms, with which they are simply not familiar and which requires a personal input.
The issue of fair access to care services—FACS—threshold is crucial in Bradford. The idea of setting a national minimum standard, as contained in the 2012 Act, is good, but the fear expressed by many of our respondents was that that national minimum standard would result in a levelling-down, not a levelling-up, of provision. That is because the Lib Dem group in Bradford has fought hard to ensure that “moderate” levels of need are supported, as opposed to “substantial” levels. Scope has told us that in 2005 50% of local authorities were operating on the basis of a “moderate” threshold, but by 2012 84% of local authorities had transferred to using a “substantial” criteria threshold.
The effect of that change in Bradford would mean that 800 18 to 64-year-olds and 1,300 over-65s would lose the support they receive. It may not sound like a serious loss of support, because after all we are talking about “moderate” levels of need. However, it pays for the cooking, the cleaning and the support for learning opportunities. Such opportunities encourage engagement and reduce isolation, and therefore the loneliness that often accompanies old age. The long-term impact of reducing loneliness means that it is a false economy in the long run to save on things such as adaptations, which I will come on to in a moment, and preventive support, which is how we regard the support for people in “moderate” levels of need. It is a false economy given the later costs that will be incurred by individuals, and indeed by the state, in supporting those we have not dealt with at an earlier stage of need.
The issue of adaptations came through time and again. There were some distressing case studies of people requiring special attention who were let down by the system. I will mention one, although the report contains more. I recently visited a gentleman who had had an occupational injury. He was tetraplegic and after receiving fantastic intensive support in Pinderfields, including occupational therapy, he was returned to his own home, to another world. He received some support—four times a day he was visited to help him get out of bed with a hoist—but the rest was left up to him. He had no idea. His wife was in despair, unsure about what financial support would be available in future and how long the support they were receiving would last. In addition, a ramp—a simple thing, some might have thought—was taking months to arrive. The disparity between the first-rate service in the NHS and the level of support received once the gentleman returned home was stark and depressing.
Approval for the ramp was given, but its delivery and implementation was simply dumped on the man’s wife, for her to sort out herself. A temporary ramp was installed that the ambulance service refused, for health and safety reasons, to use. That was the only ramp that she could use to get him out of the door, and she had to do that on her own because none of the services, for health and safety reasons, would use it. That is not care; it is careless.
The final part of the statement by the Secretary of State was about the ultimate aim: where we would like to get to by the end. We want a good place to grow old in, but that will not be achieved on the cheap. It is to the credit of the Government that they have not waited until better times but have identified the burning need to address the issue of the funding and quality of social care. However, we must address the problem of how this is funded. The measures have been proposed, and we will see how the legislation proceeds.
We also need to understand the additional contribution that is being made day in, day out, voluntarily, by people who do not have the training or the background, and often do not have the financial resources available, to supplement an inadequate level of funding.
Mine is unashamedly a Bradford perspective, but as with all research the key is to look at the generalisations that stem from it. I hope that my hon. Friend the Minister will take on board some areas that we have identified in considering the national situation and carry out further research on regional caps, adaptations, the FACS threshold, the contribution that changing the threshold will have on isolation and loneliness, and the subsequent increased costs to individuals or the state of the failure to deal with what should be preventive measures. I hope that my hon. Friend the Minister will respond to those points either today or later.
The Minister of State, Department of Health (Norman Lamb)
It is a pleasure to serve under your chairmanship for the first time, Mr Caton. I congratulate my hon. Friend the Member for Bradford East (Mr Ward) on securing the debate and on a brilliant piece of work—not just the report, which is fantastic, but the degree of discussion, debate and engagement with ordinary people and all the organisations that he listed, to get an understanding of what is going on in his community. That is immensely impressive. He has gone further than anyone else in understanding what is going on, on the ground. I thank him for his work. He is right to say that although the report looks in depth at a particular community and its needs, wider lessons can be learned from it. The report makes a useful contribution.
Like my hon. Friend, the coalition Government know how important it is to reform the current system of care and support. The voices of the people of Bradford reflect what we have heard from care users, their carers and voluntary organisations across the country, regardless of who they are or where they come from. They say that care and support needs to change. We have to move from an old-fashioned paternalistic system, where the council or the NHS knows best, to a personal system where we give real power to individuals to determine what their priorities are, what works for them and what makes them happy and contented in later life, despite sometimes having acute care needs.
My hon. Friend rightly highlights the significant demographic challenge facing us in years to come. About 14%—more than 71,000 people—of Bradford’s total population is aged 65 and over. Bradford’s local joint strategic needs assessment for 2012 predicts that by 2033 the number of local people over 90 will triple from 2,800 to 8,700. We should celebrate that. It is great that people are living to be older and often enjoying great quality of life for more years, but also many people live for years with more than one acute condition, which presents a challenge for them, but also a cost to society. Such a demographic shift will always be an immense challenge. Only if the care and support system changes and adapts can it meet the new demands and expectations of an ageing population in modern Britain.
The organisations that my hon. Friend mentioned are vital partners. This is not something that Government or local government can do on their own. The care and support White Paper, published in July last year, is an important step towards addressing these challenges. Our reforms will focus more attention on people’s well-being and independence throughout their lives, instead of waiting for them to reach a crisis point. They will also put people in control, giving them a far bigger say in their own care and support, and ensure that services are designed around their needs, rather than the needs of an institution.
The White Paper, together with the draft Care and Support Bill, will shape the care sector for years to come. The draft Bill, which my hon. Friend knows has been subject to pre-legislative scrutiny, sets out how we will put the plans into law. For the first time, we will create a single, modern statute, bringing everything together for adult care and support. It is good that that is written in plain English—English that people can actually understand without being a lawyer—which is quite useful. That statute will be clearer, fairer, and built around people, not processes, and around individuals, not institutions. It will empower people in Bradford and across the country to take control.
My hon. Friend highlighted the importance of the reforms to funding recommended by Andrew Dilnot. Last month, the Secretary of State for Health announced groundbreaking proposals to cap the costs of long-term care. That issue has been in the long grass for far too long. Successive Governments have put it in the “too hard to solve” category and just left it. As a result, ever more people have suffered catastrophic loss, losing everything that they have worked for. There is an acute unfairness in how the system almost penalises people for having been prudent and careful throughout their working life.
Individuals currently have little or no protection against the cost of care in older age. In Bradford, for example, some 5,000 people a year turn 65, and around 500 of those people each year could face significant care costs under the current system. Our reforms will ensure that everyone gets the care they need. We are ending the unfairness of, and fear caused by, unlimited care costs, while making sure that most support goes to those in greatest need. People will be protected from having to sell their home during their lifetime to pay for care.
The Government have committed to a £75,000 cap on care costs across England in 2017. I note my hon. Friend’s concerns about the cap’s geographical impact, and he proposes a regional cap as an alternative. The cap provides the same financial protection for people of equivalent wealth from different regions, and everyone will benefit from more peace of mind. However, I would say to my hon. Friend that, in some parts of the country, the costs of care are higher, so people reach the cap more quickly because they have to spend more of their own money. In a way, it is swings and roundabouts.
The other thing I would stress—my hon. Friend was right to point this out—is the significant increase in the range of means-tested support. At the moment, if people have more than £23,250, they get no help at all; they are on their own. That limit will be extended to £123,000. My hon. Friend said the average house price in Bradford is £94,000, so a substantial number of people there will get contributions towards their care costs.
In the spending review, we made clear our strong and ongoing commitment to adult social care by prioritising an additional £7.2 billion over four years—my hon. Friend raised concerns about tight social care budgets. Independent research by the King’s Fund supported our view that that should be enough for councils to maintain services, provided they make sure those services are delivered efficiently. Since that announcement of £7.2 billion, we have added another £500 million. In the context of a challenging local government settlement, that means that local authorities should be able to protect access to care. Ultimately, however, it is for local people and local authorities to determine their care spending priorities.
We cannot improve care and support simply by shovelling ever more money into the system. My hon. Friend was right to say that we must do things differently and work more efficiently to achieve better outcomes. Critically, that will be about a partnership between statutory authorities and the voluntary sector, including the organisations he spoke warmly of, which can really make a difference.
People have told us that the process of determining who is eligible for care and support is confusing and unfair. Decisions are not transparent, and they vary across the country. The result is that people are left without the support they need. The draft Bill provides for the national threshold my hon. Friend talked about. I understand his concern to protect the moderate threshold that Bradford has managed to maintain, and I applaud it for doing that. However, even if the threshold is set at a higher level—it has not been determined yet—Bradford will still be able to maintain a more generous system, if that is what it chooses.
My hon. Friend rightly focused on prevention as one of the key themes running through our reforms. We want a care and support system that is proactive and preventive, rather than reactive—repairing things when they have gone wrong. Such a system helps people to stay healthy and independent in the first place. We need to help people to maintain their health throughout their lives so that they do not, we hope, have to go into acute hospitals when everything goes wrong.
My hon. Friend might be aware that I recently announced a £300 million fund for specialist housing. Bradford already has seven extra care housing schemes, and it has submitted a bid to the specialist housing fund to develop further schemes. I applaud it on the work it has done locally to secure those schemes.
At the end of last year, the Government made available an additional £40 million across the country for aids and adaptations, and my hon. Friend referred to that. Bradford council will receive an extra £336,000. In total, £785 million will be provided over the four years to 2015. That will enable people to remain independent for longer.
My hon. Friend talked movingly about the problems of loneliness and isolation, and it is critical that we challenge them. If people are on their own, with no human contact, their mental and physical health will deteriorate. That is dreadful for them, but it is also costly for the system. We need to be much more effective at maintaining contact and using the voluntary sector—good neighbour schemes and so forth—to maintain human contact and friendship.
I want to say a word about integration. The White Paper sets out our ambition for health, care and support to be organised around the individual’s needs, rather than focusing on organisations and services. My hon. Friend mentioned the case study involving the ridiculously long wait for a ramp, which demonstrates how dysfunctional the system can be. It is crazy that someone returning home needs that little adaptation to maintain their independence, but it does not arrive for so long. That puts them at risk of a fall, which would result in their returning to hospital. That is a dysfunctional system. The Government’s absolute focus on encouraging and incentivising areas to integrate services across health and social care, and mental and physical health, is critical to providing better care and support for individuals.
Mr Ward
The absurd thing about this tragic case is that the gentleman was in Pinderfields for five months, and people knew throughout that time that he would go back to his own home. Yet, when he arrived, it was as if they thought, “What a surprise. He’ll need a ramp.” As I said, the gentleman is tetraplegic.
Norman Lamb
That is unbelievably stupid. All the preparation could have been done before he returned home so that everything was ready for him when he came back.
The draft Bill will significantly benefit those with caring responsibilities. It will simplify the process of assessments and, for the first time, place a duty on councils to meet a carer’s eligible needs for support. There will be a new resource of £175 million to ensure that that is implemented.
The Government’s independent advisory body—the standing commission on carers—visited Bradford in 2011 as part of a series of fact-finding visits. It had the opportunity to see first hand some of the valuable initiatives, including the carers information service and the emergency planning service, that have been commissioned by Bradford council from the carers resource.
Let me say a word about personal care. One of the best ways we can improve the quality of care is by getting people to exercise choice and control over how their needs are met. The draft Care and Support Bill will place personal budgets on a legislative footing for the first time. Local authorities should be working to meet the objective set out in the vision for adult social care and provide personal budgets for everyone eligible for ongoing social care. Preferably, that should take the form of a direct payment to individuals, so that they can determine exactly how they want the money to be spent. That should apply from April 2013.
My hon. Friend mentioned the importance of information and knowledge. He said that online information is not always accessible to all. IT and providing information online can be transformational in getting vastly more information out to people who need it, but we must always recognise that some people cannot access it in that way, and we must ensure that it is available in other ways.
Let me reiterate the fact that the White Paper, the draft Care and Support Bill and the Government’s decision to reform the funding of care and support represent a radical transformation of the way we meet the needs of individuals, families and communities. That transformation will require close collaboration and genuine cultural change, involving the Government, local authorities, the NHS, care providers, voluntary organisations, care workers, care users and their families, and communities.
I am therefore really encouraged by the brilliant work that has been undertaken in Bradford and by the local engagement and insight clearly evidenced in my hon. Friend’s report. Again, I congratulate him on the dedication and commitment he and his team have shown on one of the most important issues we face as a country. As our society ages, we face enormous challenges, but there is a message of hope, because these reforms will start to prepare us for the challenges of an ageing society.
Crossrail 2
(11 years, 2 months ago)
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Mr David Lammy (Tottenham) (Lab)
I am grateful for the opportunity to introduce this debate.
No debate on London can start without an assessment of where the capital city finds itself. Without doubt, London is the world’s greatest city. No other metropolis can claim to be so vibrant or so beautiful. London is a magnet for the world’s greatest talents, and it is the birthplace of some of the world’s most successful businesses and the adopted home of countless others. This city has been the inspiration to so many of our musicians, authors and artists.
There are thousands of reasons, including London’s great multi-culturalism, that make this a modern city that outfaces the world, but peel away the veneer of the capital’s dramatic skyline, scratch away at the patina of the city’s bustling shopping streets, and we will see one of them—the tube is the engine room that has propelled London’s success story for 150 years.
The Metropolitan line shooting off from Baker Street up towards Harrow and into Hertfordshire and Buckinghamshire began to make commuting to London possible. The City and South London railway, to be rechristened the Northern line, first tunnelled deep under the Thames so that people in Clapham no longer had to ride the omnibus to get to Bank or Euston, and in the middle of the great depression it was the Piccadilly line extension north to Finsbury Park on the edge of my constituency that drove growth and jobs to places such as Finsbury Park, Wood Green and Enfield. Yet that history of infrastructure has slowly been squandered by inertia, chronic underinvestment and a cowardly lack of ambition.
There has been relatively little investment since the Victoria line opened in 1967. The opening of the Fleet line, or the Jubilee line as we now know it, was, for the most part, a rebranding of an existing branch of the Metropolitan line. Although the subsequent extension to Stratford was impressive, it was also horrifically over-budget and over-deadline.
Small extensions to the docklands light railway and the construction of the Croydon tramlink have made differences in some quarters, but it is still fair to say that the overall reach of London’s transport network has barely changed for almost 50 years. Sadly, the signs of decay are there for all to see.
Despite the illusion created by Harry Beck’s distorted London underground map that coverage is almost universal, huge pockets of London are actually islands of isolation. Even in 2013, my constituents in the Northumberland Park ward of Tottenham, which has among the highest unemployment rates in London, are served by just one train an hour on weekdays and no trains at all at weekends.
Dalston Junction is just 3½ miles from Tottenham Court Road, but the journey on public transport takes more than half an hour. Huge swathes of south London rely on consistently inconsistent suburban rail services that are plagued by delays, cancellations and overcrowding. [Interruption.] I see my hon. Friend the Member for Lewisham East (Heidi Alexander) nodding her head, because she has waited for those trains on many occasions.
That those areas have the highest rates of unemployment, the highest levels of child poverty and the lowest levels of attainment is no coincidence. Without vital transport links, they are starved of investment, bled of ambition and left marooned from the city’s throbbing economic heart. In areas where services are frequent and extensive, users find themselves on some of the most overcrowded and expensive journeys in Europe.
Emily Thornberry (Islington South and Finsbury) (Lab)
On my right hon. Friend’s point about overcrowding, the section of the underground that goes up to Finsbury Park runs through my constituency. Does he agree that, although in 2007 we had more than four people per square metre in my part of the underground, even after 2021, when more investment is proposed, there will still be more than four people per square metre? That is why I put on record my complete support for Crossrail 2.
Mr Lammy
My hon. Friend is absolutely right. In the morning rush hour more than four people stand per square metre on rail services in her constituency and across London. More than four people stand per square metre on all peak-time District line trains from Putney Bridge to Earl’s Court. The same is true for Victoria line trains from Finsbury Park to Victoria, for all Piccadilly line trains from Finsbury Park to Holborn, for Bank branch Northern line trains from Clapham Common to Euston and for Central line trains from Stratford to Holborn.
In this country it is illegal to transport cattle if there is more than one cow per square metre, to transport pigs if there are more than two pigs per square metre or to transport sheep if there are more than three sheep per square metre. Yet each rush hour in our capital city, more than four human beings cram into every square metre available just to go to and from work. At present, Londoners can only dream of being herded like cattle as they commute to work.
London’s viability as a global centre is already being undermined by a failure to resolve questions over its airport capacity, but the unspoken fact is that we are soon to lose out to our competitors because of what happens to those passengers the minute they leave the terminal building, wherever the new airport capacity is located. As Tony Travers puts it:
“London survives despite, rather than because of, its transport infrastructure planning and implementation”.
There are some who dismiss those concerns. They say that London’s congestion will be relieved once tube upgrades are completed and the long-awaited Crossrail 1 opens at the end of this decade. There will be some relief, of course, but such an attitude ignores the enduring lesson of the past century that, even if the economy stops, London does not. The capital is about to be hit by a demographic tsunami that, worse still, has taken policy makers by complete surprise.
The Mayor’s London plan forecast that the capital’s population would break 8.5 million in 2027. Data from the 2011 census suggest that that will now be exceeded in 2016 or earlier. By 2031, there will be almost 10 million people living in London, more than 1.5 million more than are living here today. An extra 700,000 jobs are expected to accompany that growth over the next 20 years, which means 700,000 extra daily commutes.
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate the right hon. Gentleman on securing this debate. In addition to population growth and jobs, does he agree that, as London tries to develop beyond the Olympics in attracting visitors, the last thing inward investors and tourists on short holidays want is a massively overcrowded underground as they go to see the attractions?
Mr Lammy
The hon. Gentleman makes a good point, and he will know that there are great cities with great histories such as Athens that have been plagued by a sense that they do not work, that they are polluted and that they are not the great cities that many would like. The Olympics made a difference, but, of course, there are big economic problems in Greece. Nevertheless, cities can establish reputations. Before Mayor Giuliani, New York had a reputation for crime and congestion, and the horribleness of getting on the subway there undermined the attempts being made to promote it as a world city.
The hon. Gentleman will also know that we have good plans, which we must get on with, to bring High Speed 2 to our country. That will increase the number of morning arrivals at Euston station by 30%. What capacity gains are made by Crossrail 1, the tube updates or the Thameslink programme are set to be wiped out by 2030. By 2031, overcrowding on network rail routes into London and London underground lines will be at the same utterly unacceptable levels as today. On the main north-south lines—the Northern, Victoria and Piccadilly lines—they will be even worse.
The Chancellor is fond of saying that Britain is open for business. Is it open for business if it takes the average worker more than an hour to commute? Is it open for business if we ask our business men and women to travel to and from work in conditions unfit for livestock? Is it open for business if the underground interchanges at the main line termini in our capital city—Victoria, Euston, King’s Cross and Waterloo—must close during rush hour due to dangerous overcrowding? Members will have found themselves in such shutdowns while attempting to get into or out of Victoria station as they commute in this city. What use is High Speed 2 if we must wait an hour and a half to leave Euston station?
As long as London keeps growing, the Government and this Mayor must ensure that our infrastructure is one step ahead, not two steps behind, yet if they pursue the same course that they have trodden during the first half of this Parliament, they will condemn London to some degree of failure. After all, they almost cancelled Crossrail 1 on entering office, the Thameslink programme is beset by delays, they cancelled the third runway at Heathrow and kicked the search for an alternative into the long grass and they cancelled the four-tracking of the west Anglia line, which would finally have provided a decent train service to some of the poorest neighbourhoods in the capital.
The only ambition that this Government presently have for the capital—the only vignette of a solution to the challenge that they face—is the two-station spur of the Northern line to Battersea power station, an extension that will make its Malaysian owners incredibly rich but do little for the businesses in Lambeth and Wandsworth that are being asked to foot the bill.
London needs a game-changer. We need a wholly new project to alleviate congestion, drive growth and improve journey times for Londoners. The Minister will have seen the report, published last month by Lord Adonis and London First, detailing the case for a new line, dubbed Crossrail 2, linking south-west with north-east London. He will also notice the breadth of support for Crossrail 2. It commands the support of London’s businesses: 69% of members of the London Chamber of Commerce and Industry say that Crossrail 2 is vital to London, and a ComRes poll showed that 95% of London businesses believe that any cut to transport investment will damage the capital’s businesses in the long term. It commands the support of the major transport unions, and of successive Mayors of London.
The reason why Crossrail 2 unites so many frequent foes is that the case for it is utterly compelling. As Lord Adonis and his colleagues made clear, it is the only way that London will be able to cope with the challenges that it will face over the next 20 years and handle the 700,000 extra commuters who will be working in central London by 2031, and it is certainly the only way to deal with the extra burdens that High Speed 2 will put on congestion in the capital.
Better still, the report sets out the case for a regional and suburban route that will deliver immense benefits to London and beyond. It will finally bring tube stations to Mare street in Hackney, and it will double train frequency to places such as Kingston and Twickenham. It will also free track for South West Trains to increase the number of trains from Portsmouth, Basingstoke, Southampton and Farnham to London Waterloo that serve stations throughout Hampshire and Berkshire. Most importantly, it will provide a reliable train service and huge economic benefits to some of the most isolated and deprived areas of the Upper Lea valley, which includes my constituency.
The line can also be developed from Cheshunt through to Stansted airport, providing a stopping service on new tracks to complement a more frequent and faster Stansted express service. Not only could that mean better use of the excess capacity at Stansted airport, it would mean that communities with some of the highest unemployment rates in the country could benefit economically from having an airport on their doorstep and a new line connecting areas such as Northumberland Park, Edmonton, Tottenham, Dalston, Hackney and Wood Green to central London, Clapham, Wimbledon and Stansted station. It would clearly leverage investment from businesses and developers, create jobs each year after it had been completed and open up the Upper Lea valley as a growth area for the capital.
Zac Goldsmith (Richmond Park) (Con)
The right hon. Gentleman is making an excellent speech, and I am grateful to him for allowing me to intervene. Does he agree that London is already well served in its number of runways and its total airport capacity? I think it has more than any other city in Europe, with the exception of Paris, which has one more runway. The problem in London is that we do not make good use of the capacity that we have. The point that he has just made, which is exactly right, is that by extending Crossrail to Stansted, for which the current Mayor of London has been pushing hard, at a stroke we would transform Stansted, which is only half used at the moment, into a natural destination for business travellers, which would in turn relieve pressure on Heathrow. To me, it seems like a no-brainer solution to our airport capacity problem. What does the right hon. Gentleman think?
Mr Lammy
The hon. Gentleman knows that I tend to agree with much that he says, even though he belongs to another party. He makes his point incredibly well. Stansted is key to London’s development. It is extraordinary that the line currently running from Stansted to Liverpool Street is as chaotic, delay-prone and slow as it is. Clearly, efforts must be made to improve that service. He is absolutely right: a lot of attention has been paid to airport capacity. That is not the subject of this debate, but it is clear that investment in our train capacity, so that people can move around the city, will take a fine eye and focus. I hope that it will command the attention not just of the Mayor, as he rightly pointed out, but of the Government.
Yes, Crossrail 2 is ambitious. Its ambition comes with a price tag, but the central question is: what price doing nothing? What is the price of leaving communities cut off from central London, letting travel across London become more arduous than it is and causing major businesses to leave our capital for more mobile and modern competitors in Asia, Europe and America?
Some will still say that this is all too sudden and that more time is needed to consider and contemplate before the Government can decide, presumably, to consider and contemplate a bit more. I have sat where the Minister is sitting, as a Minister in different Departments, and I know the business of kicking things slightly into the long grass as one negotiates hard with the Treasury, but let us not forget that Crossrail 2 is quite long in the tooth. Part of the route was originally conceived as early as 1901, only to be dropped five years later. After the second world war, the idea of a Chelsea to Hackney line peppered almost every London rail study. In the early 1990s a route was finally safeguarded, and mutations of it have slowly been making their way between Whitehall in-trays ever since. Successive Governments have already had time to contemplate and consider the plan. It is now time for leadership and action.
As I outlined, London’s congestion problems will come to a head during the next period. The line needs to be open in the early 2030s, which means breaking ground in the early 2020s. We therefore need a hybrid Bill sooner rather than later and, because this project will no doubt be completed, owned and amended by successive Governments, it is critical that we establish cross-party support now, before the parliamentary cycle begins to gear up for the 2015 general election. In that spirit, I invite the Minister to address the inaugural meeting of the all-party group on Crossrail 2 that I am hoping to set up with colleagues here and in the other place over the coming weeks. Most importantly, will he detail exactly when he expects the review of the safeguarded route to begin, with an outline of the process involved, and when he expects it to be complete?
The Government’s role is not only to take leadership on this issue but to empower others to do the same. The most recent comprehensive spending review outlined funding for the Department for Transport only up until 2014-15, scrapping the long-term funding guarantee in previous spending reviews that provided a 10-year forecast of budgets. In December 2012, therefore, we had the ludicrous scenario of Transport for London publishing a 10-year business plan that could only outline funding until 2014-15. If that practice continues in the second spending review later this year, TfL will still have no certainty over its funding settlement after the 2015-16 financial year. It is clear that we need a proper funding settlement and that that need is great. Does the Minister agree that the best way to ensure the delivery of transport investment projects such as Crossrail 2 is to provide the bodies tasked with delivering them with clear indications of their future funding settlement over the long term?
Furthermore, I am sure that all of us who are keen to see more transport investment are concerned at the enduring silence of the Secretary of State for Transport while his Cabinet colleagues are peacocking across television studios to try to spare their Departments from further cuts. I invite the Minister to put all our minds at rest when he responds. Will he announce his membership of the national union of Ministers and will he put on record that he would like to see Crossrail 2 explicitly included in the comprehensive spending review in the same manner in which Crossrail 1 was included in the spending reviews of 2004, 2007 and 2010?
Will the Minister ensure that he does his best to get us into position to have a hybrid Bill shortly, with cross-party support and with some certainty that the dates will hold? Although 2030 or 2031 is still some distance away, we want to be sure of getting there so that we can begin the work now and not delay it until after a general election kicks the project into the long grass, in which case we will not see Crossrail 2 come to fruition during the lifetime of anyone in the Chamber.
Iain Stewart (Milton Keynes South) (Con)
It is a pleasure to serve under your chairmanship, Mr Weir.
I congratulate the right hon. Member for Tottenham (Mr Lammy) on securing the debate and on his powerful and eloquent support for Crossrail 2. I am not a London Member of Parliament, but a large proportion of my constituents travel into London daily, while a growing number of Londoners travel out to businesses in Milton Keynes. That is exemplified by the new Network Rail headquarters, which is based in the centre of Milton Keynes. I want to make a short contribution to the debate for two reasons: first, to talk about the improved connectivity that a scheme such as Crossrail 2 could deliver; and, secondly, wearing my Transport Committee hat, to pick up on a couple of the points that the right hon. Gentleman made about High Speed 2 and, once it has been developed, the capacity at Euston.
I know the commuting line to and from Milton Keynes well, and the volume of passengers into and out of Euston at the morning and evening peaks is growing. Getting on a Victoria or Northern line tube train is an art at times; it is not uncommon to let two, three or four trains go through before being able to board one. The upgrade to the Victoria line with the new stock has improved the situation, but I suspect that it has merely bought time and that in a few years the line will be as congested as ever. Having a line such as Crossrail 2 going through Euston, therefore, would be a major benefit to arriving commuter passengers. It would improve connectivity with different parts of London, make public transport more attractive and encourage a modal shift, with all the environmental benefits that that would gain. It would be a win-win for Londoners and for people in the northern home counties and beyond travelling into London. To strike a slightly confrontational note with the Minister, given that he represents Wimbledon, I note that the line would connect Wimbledon to Euston, so it might allow AFC Wimbledon fans to travel to see MK Dons, were the two teams to play each other regularly in future.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
There may or may not be outstanding benefits from Crossrail 2, but that would certainly be a disbenefit.
Iain Stewart
The Minister and I agree on many things, but we will disagree in our football team allegiance.
On whether the proposed scheme for Crossrail 2 is the optimal one, I have an open mind. It might be, but a slightly different one could be used, linking with the North London line to Willesden and elsewhere and with extra branches. I have an open mind, but I am happy to support the principle of Crossrail 2.
My second point is in the context of High Speed 2. If HS2 goes ahead with its planned route into Euston, that will deliver a huge increase in the number of passengers into and out of the station. For the reasons I mentioned, I fear that the existing tube network will not be able to cope. Yes, some passengers will get off at Old Oak Common and come into central London via Crossrail 1, but not all will. I suspect that a comparatively small percentage of the arrivals will want Euston as their destination; they will want to travel on to other parts of London. If they are faced with enormous congestion at Euston, the attractiveness of HS2 will be diminished and its business case undermined; however, Crossrail 2 feeding in more people to use HS2 from Euston would augment the business case, about which there has been controversy lately.
The purpose of my contribution was briefly to make those two points. I am supportive of the principle of Crossrail 2 and happy to look in further detail at specific schemes. I am also happy to join the all-party group, once it is up and running. I will not make any comments on the funding, although I agree with the point made by the right hon. Member for Tottenham that the cost of doing nothing might be far too high. I congratulate him once more on securing this important debate.
Heidi Alexander (Lewisham East) (Lab)
I congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on securing the debate. I represent a south-east London constituency. My constituents would not necessarily benefit directly from new stations on a Crossrail 2 project. Nevertheless, they would benefit from improved transport links in London more generally, so it is important that we are having the debate today.
I want to discuss another strategic transport project in London—some might call it Crossrail 3—that would bring huge benefits to our capital city. It would improve capacity on transport links between south-east and north-west London, as opposed to Crossrail 2, which improves the links between south-west and north-east London. I urge the Minister, when considering Crossrail 2, to think more strategically about the transport needs of London as a whole. For my constituents, one of the most important issues in public transport is extension of the Bakerloo line from Elephant and Castle, where it currently stops, through Southwark to Lewisham and then to join the Hayes line. That would provide huge benefits in relieving congestion on existing transport routes to London, and would support growth in south-east London and Canary Wharf.
I want to take a couple of minutes to share with hon. Members some of the reasons why that transport route is equally important to the strength of London’s economy. At the moment, my constituents rely heavily on overland trains, as my right hon. Friend the Member for Tottenham said. The recent census figures show that one in five of the working population in Lewisham uses trains to get to work, and the number in Bromley is similar. At the moment, south-east London benefits from the East London line, which runs through Honor Oak and Forest Hill to Crystal Palace, but that skirts the western border of south-east London, and the tube network does not extend into south-east London, although we are fortunate in having the docklands light railway.
Overcrowding on overland trains to London Bridge and Cannon Street is unbearable for my constituents. I regularly take the train to London Bridge and it is unpleasant to be stuck in the armpit of a stranger. Overcrowding during the rush hour is intense and there is a desperate need to relieve that congestion. The benefit of bringing the tube network to south-east London would be felt not just in people’s quality of life, but in the planned regeneration projects in south-east London.
Southwark and Lewisham are two of the fastest growing boroughs in London, and it is projected that by 2030 Lewisham’s population will be 346,000, which is 70,000 more than at the moment. The rise in Southwark’s population will be similar. We have a terrifically young population who want to access job opportunities in central London. Those huge population increases in south-east London mean that we must find a way to transport people around. Lewisham plans to build 18,000 homes by 2026, and when new developments go up in our town centres my constituents come to me to ask how people will get on trains because they are already full. There is a desperate need in south-east London to address capacity on public transport.
The links from Lewisham in particular to Canary Wharf are strategically important. Canary Wharf as a commercial and business centre has grown very quickly. I understand that its working population is about 100,000, and I am told that by 2025 it will have doubled to 200,000. We have read about the problems in the financial sector, but there will be huge growth in that part of London. Linking the population of south-east London to those opportunities by extending the Bakerloo line, through a connection to the DLR, is terrifically important. The centre of economic activity in London is shifting eastwards, so when this and future Governments consider how to address strategic transport needs they should look at London as a whole.
Will the Minister tell me and other hon. Members what discussions he has had with the Mayor of London and Transport for London about the possibility of extending the Bakerloo line? I am aware that upgrade work will be done on that line within the next 10 years and it would be good to hear whether that work can be done in a way that allows a later extension to the Bakerloo line. It would be good to know what vision he and TfL have for addressing those transport needs in south-east London.
I was recently speaking to a good friend who is a transport planner. She told me that in London we need to find a way of addressing the next century’s transport needs. The Victorian era left us with a fantastic underground network, and we now need to ask what the 21st century’s legacy will be. Whether it is Crossrail 2 or Crossrail 3, London is a fantastic world city that will continue to grow, and we must find a way of moving people around and getting them from their homes to their jobs so that they can enjoy the most this incredible city has to offer. I hope that the Minister will be able to provide some reassurance that he is on the case and considering how to tackle those transport needs in the next few decades.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on securing the debate, and apologise for the fact that I was not here at the beginning. His battle for Tottenham is akin to the one we fought and, to some degree, won in Hackney. We had poor transport links, and we now have new links that have transformed the borough. For his sake and that of my constituents, I hope that we will see a change.
I want to pick up on the point made by my hon. Friend the Member for Lewisham East (Heidi Alexander) about the need to absorb growth. It takes me back to when I was mayor of Islington in the late 1990s. Angel station was revamped from a grotty little station to a brand new one with platforms so wide that you could park a car on them. That station is already overcrowded. Canary Wharf just about manages to cope with the crowds as does, arguably, Westminster, but it will not be long—perhaps a decade—before there will be too much growth.
When we set up the mayoral system in 2000, there was a decision on the first Mayor’s desk. His job was to develop transport and planning strategies for London. After much thought and discussion, the then Mayor, Ken Livingstone, decided that we would absorb population growth in London instead of having another wave of new-town building with new towns such as Milton Keynes. London was set to grow from then until 2015—we are still part of the way through that growth—by the equivalent of a city the size of Leeds. All the experience that hon. Members have outlined about the difficulty of squeezing on to tubes, whether travelling from Milton Keynes or Hackney, demonstrates that growth. Whenever I cannot get on the tube, I think back to those discussions when I was a member of the London assembly with my right hon. Friend the Member for Tottenham back in 2000. We are now seeing the impact of that.
Part of that strategy was to have a transport hierarchy. We encouraged people to change their transport habits so that those who travelled by tube would get on the bus, and the then Mayor greatly improved the buses. We then wanted people who travelled by bus to walk and cycle. Cycling increased massively after the 7/7 bombings, when the tragedy made people think about their transport and get into the habit of cycling. I represent the borough that has the highest number of cyclists of any borough in London, and perhaps anywhere in England. The history of it is long-standing, and it has grown with population growth.
The then Mayor invested massively in bus transport, and bus ridership rose 7% during the first two terms of the London assembly and Transport for London. I am sure that the Minister is aware that Transport for London is a model for a good transport authority. Sadly, there is a slight reversal with the stealth cuts in bus services. The frequency of the 242 bus in my constituency has fallen from 10 an hour to around seven an hour. It is the only bus serving the Clapton Park and Nye Bevan estates to and from Homerton hospital, and with six bus stops on those estates the cut in service is a big one for my constituents. When I raised the issue with Transport for London, it argued that the East London line, which I will mention in a moment, solved the problems. Well, that is not the case for someone who lives on the Clapton Park estate and who has to walk up the hill every morning, or for older ladies or men who have to wait for the bus so they can take their shopping home.
The 38 bus has recently seen a similar reduction, with every other off-peak bus turning at Hackney Central. That is fine for people who want to get off there or anywhere between there and Victoria, but not for those who live anywhere between Hackney Central and Clapton pond, as many of my constituents do. I therefore urge the Minister to look back at the glory days of London bus travel and to bear these issues in mind when he looks at budgets and policy for buses. Unless the bus service is good, the transport hierarchy will not work. People will not get off the train and on to the bus, because they will not be sure the bus will get them where they want to go on time. Once we lose that reliability, things could start going backwards from the huge achievement we saw in London.
To return to the issue of my constituency and borough, London was to absorb the huge growth I mentioned. My hon. Friend the Member for Lewisham East described what has happened in her neck of the woods. Similarly, Hackney grew by 30,000 people between the last two censuses. Those are mostly under-fives, and I confess I have contributed to that, having given birth in the past few years. There are also a lot of young people in their 20s and early 30s. Another 30,000 people will be born in Hackney by 2020, so there will be exponential growth. A lot of that has been boosted by some of the new private and public sector housing developments.
That is putting public transport under great pressure, and we need to look at how we change travel routes. Boosting the North London line was a great move by Transport for London, and we all applauded the fact that it took over the route. We had a disciplined campaign in support of the East London line, which serves stations from Dalston Junction, slightly north of my constituency —it was in my constituency when it was built, but we then had a boundary change—right down to New Cross. The line has been hugely successful—it is impossible to get a seat in the morning—and that has made a big difference.
We can all learns lessons from the East London line campaign as we campaign for the much-needed benefits of Crossrail 2. It was a disciplined campaign. We were all urged to ask not for lots of whizzy things to make our stations even more beautiful, but for basic stations and basic rolling stock to ensure that we had the service running. Of course, we were fortunate that there was an existing rail line. There were regular meetings between local authorities, officers and elected Members from across the board. Every time a problem came up, we discussed how we would deal with it as a group, rather than striking out alone to argue that Hackney should have something better than Tottenham, or that Tottenham should have something better than Hackney, much as we might have felt like doing that. We realised it was better to focus on discipline and to achieve the ultimate end. The East London line opened in 2010, and it has been a huge success.
I hope the same discipline can be applied to the new all-party group on Crossrail 2. I would certainly join it and support my right hon. Friend the Member for Tottenham. The line would link Dalston Junction to Tottenham Court Road and mean an 11-minute journey; it will change things phenomenally. [Interruption.] If only I had time to go shopping in Tottenham Court road. I am thinking more of jobs for constituents who could work in the area.
When I was on the London Assembly, I also represented Waltham Forest. The council had a good plan at the time—this was between 2000 and 2004—to get people into jobs at Stansted airport. The transport links were there to make that easy. Hackney, which is virtually the same distance away, but which did not have the transport links, did not have the same jobs programme. The difference was phenomenal, and that has been one of the things driving my support for these new transport links. I saw the stark difference transport links made when I represented the boroughs of Waltham Forest and Hackney.
When we build railway lines, there are also issues about homes. There has been a housing boom along the East London line. That is quite a good thing. If we are to change travel habits and travel patterns, we need people not to go through the centre of London, so it is good to boost our suburban and outer-London areas. However, there is also the issue of prices and rents going up, which has a huge impact on many of my constituents. I am delighted that, among other developments, Peabody is building a number of affordable housing units at Pembury Circus, with a mix of properties for rent, sale, social rent, part-buy and so on. After a long campaign by me and many residents of the Kingsland and Haggerston West estates, London and Quadrant Housing Association is finally building there. Those changes are happening close to the rail links, and that will make a difference.
Let me say in passing, although it is important, that Hackney is very much against the Government’s proposal to allow offices to be easily converted into homes under a light-touch planning rules. That would be disastrous for my borough, where there are jobs, and where office space is used properly by a range of creative businesses. Those businesses are an engine room for the British economy. I hope bits of the Government are having a word with the Secretary of State for Communities and Local Government about the folly of his race to build inappropriate homes in the wrong places. The occupants of No. 10 and No. 11 regularly appear in Shoreditch, which the Prime Minister calls “Tech City”, although it is still known as Shoreditch to the people who live and work there, while someone else’s Department is saying that we should turn vacant offices into homes. That would be a mistake. Those properties would be chichi loft apartments for certain strata of people, not homes for local families who live in overcrowded conditions in my area. Although I want travel links to spur the building of homes—again, building homes near transport links fits into the hierarchy of transport because people have to travel less if they live near stations—I do not want that to happen at the expense of our valuable office space.
Generally, I support Crossrail 2 and Transport for London taking on more rail. I congratulate the Minister on his openness in talking to Members early about plans to pass more rail lines to the Mayor of London and Transport for London. Whoever the Mayor is, I support Londoners, through their Mayor and Transport for London, being more in control of the lines that serve them and help them get to their jobs. That is a good step. I hope we will see a similar openness and engagement from the Minister on Crossrail 2. I know he is not in a position to wave a magic wand or, more importantly, a cheque book at the moment, or to give us absolute deadlines, but I hope that, in the spirit of openness he has shown on other issues, we can have a similar dialogue. We can help him argue our case in the heart of Government for Crossrail 2, which will make a huge and beneficial difference to my constituency if we do it right and get cracking.
To pick up on the point made by my hon. Friend the Member for Lewisham East about Crossrail 3, if we do not get Crossrail 2, Crossrail 3 will be a pipe dream. However, we need to start now, and we need to lay the framework. We need to be disciplined about the planning, and we need to make sure all the ducks are lined up.
The Minister has here the nub of a body of people, from inside and outside London, who are willing to argue the case for Crossrail 2, and others would have liked to be here today but could not be. We will do anything we can to make this case stack up. We can always argue for the best and most wonderful railway line, but, above all, we want a railway line, and we can compromise if that is what it takes to get it delivered. However, we really want and need this line in my constituency and in London.
Yvonne Fovargue (Makerfield) (Lab)
I congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on securing the debate. I also congratulate Members who have spoken on their knowledgeable and passionate speeches about their constituencies and the links they need.
There is little doubt that the taskforce’s final report set out a strong case for Crossrail 2. Credit should be given to Andrew Adonis, a former Labour Transport Secretary, and London First. The report is well researched, and it good to see a growing consensus, particularly on the line of the route. That is a tribute to the knowledge and hard work of all those involved.
The case for a new rail line between Hertfordshire and parts of Surrey and Middlesex, via a new tunnel between Tottenham and Wimbledon, is based on the increasing congestion that will accompany the projected rise in population and employment in London over the coming decades. As the report says—my right hon. Friend touched on this—employment in London is expected to grow by 700,000 in the next 20 years, with the population overall rising by 1.5 million. Increased congestion is expected to be particularly severe on an alignment running south-east to north-west, and that will not be significantly alleviated by Crossrail 1 or Thameslink.
Crossrail 2 has the potential substantially to increase capacity, relieving congestion on some crowded sections of the underground, particularly on the Victoria, Northern and Piccadilly lines. That could take great pressure off some major termini interchange stations, such as Euston, King’s Cross, Waterloo and Victoria. Beneficiaries would include commuters coming from as far afield as Southampton and Portsmouth.
This is clearly a persuasive document—almost as persuasive as the passionate speech by my right hon. Friend the Member for Tottenham—but there are questions to be answered. Crossrail 2 is an expensive project. The report costs it at about £12 billion. How will it be paid for? What relationship does it have to HS2, which was recently given the go-ahead by the Government, at a cost of £34 billion?
There is growing consensus that the completion of the second phase of HS2 will have significant consequences for the London transport system. Again, the report makes that clear. Even without HS2, passenger arrivals at Euston in the morning peak period are set to rise by 30% by 2031, and HS2 would perhaps double the number of people arriving at that time. That would seem to make the Crossrail 2 interchange at Euston essential. If HS2 and Crossrail 2 are interdependent schemes, surely their planning and funding must be looked at together.
I repeat my question, however: where is the money to come from? It has been suggested that the funding stream from Crossrail 1 could be redirected to Crossrail 2, but has not that money already been allocated to HS2? Obviously HS2 and Crossrail 2 cannot be funded at the same time with the same moneys. Could businesses make a contribution? After all, they will undoubtedly gain, as well as commuters. At the time of Crossrail 1 the then Labour Government gave the Mayor the power to introduce a business rate supplement. Could that happen with Crossrail 2? Has the Minister had any discussions with the Mayor or with businesses about contributing to the cost?
Indeed, what discussions have been taking place at all? I should like to know how much preparatory work the Government have already undertaken on the project. In particular, what analysis have Ministers made of the impact on London’s transport system of HS2 without Crossrail 2? That is the crucial question.
Transport systems are naturally interlinked. One part affects the others. Crossrail 2 is about London, of course, but it connects to other parts of the country. Our transport policy needs to be nationwide. How does the Minister think Crossrail 2 fits in with the bigger transport picture? It is vital that essential transport projects in other parts of the country should not be adversely affected by the concentration of funding in one geographical area, despite that area’s undoubted importance.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
I congratulate the right hon. Member for Tottenham (Mr Lammy) on securing the debate and on his eloquent and intelligent speech. His opening remarks rightly stressed the history, from which, of course, we can learn. He is right: here we are celebrating 150 years of London Underground. London has long relied on transport for its prosperity. The first underground trains, in the 19th century, brought prosperity to London and the suburbs, as the right hon. Gentleman said, but that process has continued through the extension of the bus network in the 20th century, and today’s concentration on other aspects of travel, such as bikes.
The future of London’s economy will depend on transport systems, and the right hon. Gentleman is right to say we must think about what London needs in the long term to meet the demands of the economy, as well as of the people who live here. A modern, customer-focused transport system should meet that rising demand. Several hon. Members have referred to the demand forecast that shows that, without additional investment, crowding, on which we have made some progress, will return to unacceptable levels. There have been several comments on the growth of this great city, and it is right to think about the challenges that will arise as we try to meet demand for 2030 and beyond. The debate about Crossrail 2 is an opportunity to consider how to meet some of the challenges.
I welcome the work that has been done by Transport for London and London First. The hon. Member for Makerfield (Yvonne Fovargue) was right to praise the work that Andrew Adonis did. The proposal was also supported by the Mayor. I understand that it would provide a north-east to south-west transport link that would complement the current Crossrail project, and that it would complement and work alongside the tube upgrade project. It would also have the potential to support increased journeys right across the capital. As several hon. Members have pointed out, it would also, of course, help to create jobs, both directly, in construction, and indirectly, in communities. The right hon. Member for Tottenham spoke about what it could do for his constituency, and it would also have an effect in Hackney and the Lea Valley. Perhaps I should declare an interest, because I hope that it will bring jobs to Wimbledon too.
My hon. Friend the Member for Richmond Park (Zac Goldsmith), in an intervention, talked about extending the proposed line northwards to Stansted. That should be an option for both TfL and the Mayor to think about in the planning stages. I hope that they will do so, and that they will work in conjunction with Network Rail. Several hon. Members pointed out the interconnectivity and linkages of the systems. It would be inappropriate for the Mayor to think about connecting the line to Stansted without making sure that he was working in conjunction with Network Rail.
Mr Lammy
Does the Minister recognise the fact that the Maidenhead connection off Crossrail 1 is at the same distance as the Stansted connection would be for Crossrail 2? If we have achieved that connection into what might be called the south-east/London shires, for Crossrail 1, a Mayor should be able to do it for Crossrail 2.
Stephen Hammond
I recognise that fact about distance. I was agreeing with the point about linkages and interconnectivities in planning, development and, hopefully, later construction; I think that the right hon. Gentleman was agreeing with me. Something particularly worth considering is what the work has spared—not only at Maidenhead, but some of the works further out at Reading. That is all as a result of work on Crossrail. The linkages with Network Rail are hugely important.
The case has been made, this afternoon, that Crossrail 2 will offer essential congestion relief and help to meet demand on the underground and at London termini. Also, as the right hon. Member for Tottenham and the hon. Member for Hackney South and Shoreditch (Meg Hillier) said, it will offer essential access and opportunity to areas of London that are less well provided with public transport at the moment, as well as suburban connectivity.
It is right to say that, as with Crossrail 1, the genesis of the idea was not the report; it has been around a long time. The idea of a Chelsea-Hackney line has been around in one form or another for many years; some people can trace it back to before 1920, I think. The proposals for Crossrail 2 have similarly generated wide support, and they would benefit London, without question.
The issues for the Mayor and TfL to consider carefully include the scheme engineering design and technical design, the consultation process and the views of those who will benefit, and the route alleviation procedures. They will also need to consider how the route will be funded. Those are clearly some of the challenges. For my part I reaffirm that the Government will work with TfL to safeguard the route for Crossrail 2, which is scheduled to start later this year. It is essential that we do so, because we have agreed with TfL that the previous safeguarding, which was last updated in 2008, would leave several areas uncovered. I was asked about that, and my understanding is that the safeguarding process for the new route will start in April.
Mr Lammy
I am grateful for that assurance. There is some urgency about the matter, which I hope the Minister recognises, and I am concerned about a hybrid Bill—something that must come from the Government. I hear what he said about the Mayor, and that is obviously right, but, as Crossrail 1 comes to an end in about 2018, we want a transfer of engineers, project managers and others on to Crossrail 2. I suspect that that will be part of the Mayor’s thinking, and I hope that the Government would support that approach, and understand why it is sensible.
Stephen Hammond
I understand entirely the right hon. Gentleman’s point. That is why, in terms of the next stages, the challenge for TfL—I could have gone into it in greater depth, but he understood the point that I was making about why it is important for TfL to lead—is to go from the London First report into schematic detail and engineering detail. Those sorts of issues can be thought about and a business case properly developed only once the initial work is done. Clearly, one challenge for the Mayor and the Department—the Department wants the Mayor to undertake the challenge—is to look at building a comprehensive business case in the near future.
The right hon. Gentleman challenged me, saying that he had sat in my place and that he knew some of the tricks about discussions with the Treasury, and pushing things into the long grass. I also sat in his place and made exactly the same challenge to Ministers. He will know, as the hon. Member for Hackney South and Shoreditch said, that I do not have a cheque book in my back pocket and I will not be wielding it this afternoon. I can, however, give this commitment: before the next spending review, the onus is clearly on the Government to give serious consideration to Crossrail 2, its business case and the options for funding, and we will do so. The challenge, therefore, is for the Mayor to come forward with a proposition—a business case—that could be delivered in time for this spending review, and if not, it potentially looks to be a post-election issue. We can commit to giving the issue serious consideration, but the Mayor needs to develop that business case.
The Government’s record on making those commitments has been good. We have protected capital spending in spending round 10. We are determined to invest in essential infrastructure to support the economic recovery, both in London and nationally. We want to prioritise the schemes that offer best value for the taxpayers’ pound and the best growth potential. The business case must be developed and it is essential, therefore, that the Mayor and TfL show that the efficiency of the spending that they are using in this spending round, and in this spending review period, can be continued. The Mayor needs to ensure that there is the same rigour as has been seen—we would like to see more rigour—in terms of the efficiency of how he is spending the taxpayers’ pound when he develops the business case. For instance, it is also clear that in central Government we have borne down on administrative costs in that area. Administrative costs across Whitehall in this spending review have gone down by 33%, which is important. It is important to show that where we are spending the taxpayers’ pound, we are spending it efficiently.
The right hon. Member for Tottenham was slightly unkind to the Government—I would expect nothing less—in terms of the picture that he gave about investment in London. It was certainly not a picture that I recognised. A massive amount of transport investment is going into London. The Government have clearly, and rightly, recognised that London is the economic engine of the UK economy. In the last spending review, we provided TfL and the Mayor with a settlement, despite the tough economic environment, that allowed progress on the tube upgrade, Thameslink, and Crossrail. They have had certainty through this spending round, and another settlement and spending round will allow them to make their case.
Spending review 10 provided a multi-billion pound funding package for Crossrail, and we can think of the package coming through: for instance, there is £4.5 billion for the tube upgrade programme. The Jubilee upgrade that was completed last year has increased capacity by 33%. The Victoria line upgrade that was completed in January this year gave another 21% capacity. Delays on the underground have been reduced by more than 40% since 2007. That is not to be complacent. This is exactly the challenge. We have done these things to catch up. This is the 150-year celebration, and both the previous Government and this Government have made that investment to catch up. The potential for Crossrail 2 is the future.
Meg Hillier
The Minister rightly describes London as an economic powerhouse. I am pleased that the Government recognise that, and it has led to some investment. Will he illuminate for us the internal discussions in Government about whether his Department, obviously buying into that agenda through the investment in transport, has had any conversations with the Department for Communities and Local Government about its policy to convert offices into homes? It is the crack cocaine of developers and a quick buck for the owner of the property, but it means devastation for the economic powerhouse for which he professes Government support.
Stephen Hammond
I am here to talk about what my Department is doing for transport to ensure that London remains an economic powerhouse, and I wish to continue on that line. I am sure that the hon. Lady will want to make that point to my colleagues—I am sure that they have heard it before. None the less, I do not think she would wish to stop all office development, or all offices with the potential for conversion being developed. It may or may not be the crack cocaine in certain areas, but it is providing essential housing in other parts of the capital. I have seen a number of social housing schemes being developed from old office blocks in south London as well, so one needs to be a careful about over-generalising.
The point I was making a moment ago is that the Government are, and have been, spending a huge amount of money on the tube upgrade system and the tube upgrade plan. The Mayor of London and the Secretary of State for Transport opened the Clapham Junction to Surrey Quays link of the London Overground, completing the overground orbital network, which allows people from south London to commute to the City and Canary Wharf without travelling through central London.
I know that will be of some benefit to the constituency of the hon. Member for Lewisham East (Heidi Alexander). I hear her points about the Bakerloo line. I say to her again that, as she will recognise, transport in London is a devolved issue, and it would be for the Mayor to come forward with proposals to the Government. Any proposal for London Underground to extend the Bakerloo line further in south-east London is a matter for the Mayor and TfL. They would have to come up with a plan, and potentially, if they seek to fund it in sponsorship with the Department, come to the Department. It is not for the Department to impose the proposal on TfL or the Mayor.
Heidi Alexander
I hear what the Minister has said, but he will have heard my case about the population increase in south-east London and the existing problems with overcrowding on the overland rail network. Would he undertake to discuss the Mayor’s current thinking on the Bakerloo line extension with him?
Stephen Hammond
Whenever I meet the Mayor, I discuss many things with him. I promise that when I next meet him—in one of our regular meetings—I will make sure that that is on the agenda. I hope that the hon. Lady will recognise that any proposal to extend the underground is a matter for the Mayor and TfL.
The Government are committed to extending the Northern line into Battersea. The funding agreement with TfL has enabled Crossrail to go ahead. The Government are making a contribution of some £5 billion over the lifetime of the project. That will transform the south-east, delivering faster journey times, and it is likely to generate 14,000 jobs during the peak construction period. It will have a major impact on London’s economy, and I therefore accept the potential for Crossrail 2 to have a similar impact.
Mr Lammy
On the Northern line extension, the Minister will recognise that it involves two stations. There has been quite some coverage of the Malaysians who now come to own Battersea power station and of the very luxurious flats that attract a lot of money. There is some disquiet, particularly in the London borough of Lambeth, that local people are being asked to pick up a tab for effectively two stations; the stations are, of course, important to London’s development, but there are other transport options around. I want some clarification on the funding formula for the Northern line extension, because Crossrail 2 could benefit the area greatly, and I am slightly worried that Londoners will be saddled with a bill that could overrun into billions, as the Jubilee line extension did.
Stephen Hammond
I hear that point. I shall say two things to the right hon. Gentleman, if I may. He will recognise that although the Northern line extension involves only two stations, it has the potential to achieve a transformational impact in terms of housing development, job creation and journey times to the City and the west end—further job creation. He has asked me about the funding package. Because I am not clear on some of the elements of commercial confidentiality, I will, if I may, write to him and set out what is in the public domain or what I am allowed to tell him. I do not want to be injudicious and I hope that he will accept that as my response.
In opening the debate, the right hon. Gentleman showed that Crossrail 2 could have huge potential for his constituency. The Government have supported his constituency through the London enterprise fund, aimed solely at Tottenham and Croydon. There is further potential to regenerate London directly through some of the aspects of the Localism Act 2011 that are going to the Mayor. None the less, it is clear that the key thing is to ensure that the transport system is fit for the development and the regeneration of London, not only for our generation, our children’s generation and our grandchildren’s generation, but for the generation of Members of Parliament who will be sitting here in 100 years’ time saying that this was a new Victorian age.
The Government are clearly committed to supporting transport in London. Of course, it should not be the default position that the Government fund everything. In a world of constrained public sector resources, it has been recognised, rightly, that there is a role for alternative financing mechanisms, such as tax increment financing and the community infrastructure levy. I have no doubt that in formulating the business case for Crossrail 2, the Mayor will be considering those as well. We want TfL, London boroughs and the Mayor to share in the profits of London’s growth, giving them a much greater incentive to invest in business-friendly measures and to work with business to develop the measures that will ensure the regeneration and continued growth of this great city. That is one reason why some of those important changes took place in local government finance.
The Government will continue to support London, continue to support transport and continue to support infrastructure, not just today but tomorrow and through the next spending review. I welcome this debate on Crossrail 2. It has been an excellent debate. It has highlighted the potential for Crossrail 2 and what it might deliver for London. I note the invitation to address the all-party group’s inaugural meeting; I would be delighted to accept. The key challenge now is for the business case to be developed, so that it can be properly assessed and the project can move forward.
Erdington Walk-in Centre
(11 years, 2 months ago)
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Jack Dromey (Birmingham, Erdington) (Lab)
It is a pleasure to serve under your chairmanship, Mr Weir.
Today I bring a simple message from my constituents—“Save our walk-in centre.” Over recent months I have led, together with the user group and the local community, a campaign to save Erdington walk-in centre—a centre at the heart of our local community and considered one of the best of its kind. It is being threatened with closure as a consequence of a review by the Birmingham and Solihull national health service of all walk-in centres in the city. The threat is not just to the centre on Erdington High street but to the one in Kingstanding, which is also in my constituency and in one of the poorest wards in Britain.
My constituents may not agree with one another on every issue, but if there is one thing on which there is unanimity of opinion, it is that they know a good thing when they see it, and they have rallied behind their walk-in centre. I was proud to see just a few weeks ago hundreds of local residents turning out on a freezing Saturday to protest on the High street in support of their much-loved and much-used walk-in centre.
The Erdington walk-in centre offers a general practitioner-led service to walk-in patients from 8 am to 8 pm, seven days a week, including bank holidays. In 2012, an average of 76 patients a day were seen in the centre. The centre participates in accident and emergency diversion when necessary and accepts some category C ambulance referrals. It has close links with two other units in the same building—the New Attitudes sexual health team on the floor above and the Health Exchange team on the floor below—and houses some community clinics, for example for drug workers and users.
The centre has served to support the local population in accessing quality GP-led health care through extended opening hours that are convenient for patients, including those who are registered with a GP but have difficulty accessing services during normal opening hours. The centre also provides an important service to vulnerable local people, including those who are unregistered or homeless. The service means that they have access to high-quality medical care.
I know first hand how the centre matters—I have used it myself. Indeed, I have used both the Erdington and Kingstanding walk-in centres. Much more importantly, I know, from talking to literally hundreds of local people, just how important the centre is to the local community, providing accessible and high-quality health care in the heart of our High street. The closure of the much-used and much-loved facility would be a devastating blow. In the words of one of my constituents, Nathalie Lynch:
“Anyone with children knows how essential it is to have quick access to medical help. My doctor’s surgery is so oversubscribed that I can’t get an appointment. The walk-in centre has been a lifeline. On three separate occasions, my son has received nebulisers for his breathing and then been sent on to hospital. What would he do without this service, I dread to think.”
Currently, the nearest alternative providers of urgent care services are the accident and emergency departments at Heartlands and Good Hope hospitals. If we lose the walk-in centre, not only will the health of local people suffer but, if local people are desperate, they will go to those A and E departments, in turn costing the taxpayer more.
Although the decision to close the walk-in centre—if that decision is made—lies with the health service, the true responsibility lies with the Prime Minister and the Government. As cuts to health care start to hit the front line—almost 7,000 nursing posts have already been lost since the general election—NHS bosses have been put in an impossible position by the downward pressure created by the top-down reorganisation of the NHS.
Despite the Prime Minister’s pledge to protect the NHS, health care bosses in Birmingham are struggling with a £76 million cut, forced on them by the Government. That is a direct result of the Government’s top-down reorganisation of the NHS, which is threatening the vital services we rely on most while costing the taxpayer £3.5 billion—all that from a Conservative party that pledged before the general election that there would be
“no more top-down re-organisation of the NHS”.
In the party’s manifesto for the 2010 general election, it pledged that
“every patient can access a GP in their area”
and not have to travel miles to meet their urgent care needs. It is wrong that local Tories who pledged all those things before the general election are now trying to wash their hands of responsibility for what their Government are doing and for that which they said should never happen.
It is vital that Ministers know the impact that their decisions will have on local communities and people. What happens when local walk-in centres are closed? People like my constituent Paul Flynn, whose 19-month-old twin girls had both caught viruses that became chest infections on a Sunday, when his doctor’s surgery was closed, would be forced to go to A and E. However, because Paul was able to take his daughters to the walk-in centre on Erdington High street, they were immediately put on nebulisers to alleviate their breathing difficulties. In his words:
“We do not know what we would have done without the walk-in centre.”
Or take Audrey Smith, a local teacher, who would be forced to take time off work if she wanted to see her GP, particularly at a time of discomfort or pain, because her surgery has restricted hours from Monday to Friday. Without vital facilities that provide accessible urgent care services, many people like her would be forced to choose between taking time off work and attending A and E.
Just last night, I received a heartfelt e-mail from a constituent, Peter McDonald, who had had a heart attack just a few yards from the walk-in centre on Erdington High street. Peter managed to walk in and see a doctor within minutes, who gave him a GTN spray before he was taken to hospital. In his words:
“I owe my life to the doctors at the centre. If the walk-in centre wasn’t there, it might have been a different outcome. This centre must stay open.”
Sadly, walk-in centres are closing. We are seeing the results, as A and E waiting times are going up, with 47,000 more people waiting more than four hours since September compared with last year. More than 100,000 extra patients have now waited longer than four hours for treatment in A and E since the start of 2012-13.
What is more, A and E departments are themselves being closed. Before the 2010 general election, the Prime Minister toured marginal seats, promising to save accident and emergency facilities in a cynical attempt to win votes. He promised a “bare-knuckle fight”—those were his words at the time—to save accident and emergency services at 29 hospitals, but 12 of them have now been closed or downgraded.
Two and a half years into this Parliament, we have seen broken promise after broken promise from the Prime Minister on the national health service. Not only has he cut NHS spending in real terms but his Government’s reckless approach to top-down reorganisation is creating increasing pressures and consequently casualties, which might include the walk-in centres on Erdington High street and in Kingstanding in my constituency. The message before the election was one that valued those walk-in centres; the message after the election has been very different, with more and more services being closed.
What has been the response of the Government thus far to the closure of 54 walk-in centres nationally since 2010? They have made the local NHS responsible for NHS walk-in centres. It is true that the last Labour Government realised that local people best know what is in their interest, so allowing health and well-being decisions to be taken locally, including through primary care trusts. Given what is now happening, however, I have to say to the Minister that if he dams the river at its source, he should not be surprised if the water runs dry downstream.
In conclusion, the Erdington and Kingstanding walk-in centres both provide accessible high-quality medical care to thousands of local people. I again stress that the Kingstanding one is located in one of the poorest wards in the whole of Britain. There is no alternative service within the immediate locality. If the vital centres on Erdington High street and in Kingstanding close, the hard work of the dedicated staff that has gone into the development of the walk-in centres will be wasted, as will the considerable investment that has gone into them, and local people will again have to travel miles for their urgent care needs.
The closure of the much-loved and much-used facility would be a devastating blow. That is why, with the user group and the local community, I have led a campaign against closure for the past five months, and that is why I bring this unmistakable message from the community I represent to Parliament today. I am grateful to the Minister for agreeing to meet representatives of the patient and user group. It is right that the case for the walk-in centre be heard on the Floor of the House, and that the voice of those in the community who love, use and value their walk-in centre should also be heard.
The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
It is a pleasure to serve under your chairmanship, I believe for the second time, Mr Weir, and to reply to the hon. Member for Birmingham, Erdington (Jack Dromey), whom I congratulate on securing this debate. I acknowledge his hard work on behalf of his constituents in campaigning for the retention of Erdington walk-in centre, and the strength of feeling locally, which he eloquently outlined.
Before I move to the local context, it would be remiss of me not to pick up the issues of national consequence raised by the hon. Gentleman. This Government will have invested £12.5 billion more in the NHS between the last election and the one in 2015, which is providing some, albeit small, real-terms growth in the NHS budget. Even though we are in difficult economic times, the Government have made a clear commitment that the NHS is a special case that needs further investment, which we are providing. It might be worth the hon. Gentleman taking that up with one of his Front-Bench colleagues, the right hon. Member for Leigh (Andy Burnham), who in contrast said that such investment was irresponsible. Indeed, the Labour party running the NHS in Wales intends to make an 8% real-terms cut in its budget. It is worth reflecting on the reality of the situation before getting drawn into any political rhetoric.
The hon. Member for Birmingham, Erdington is right to raise the specific pressures on A and E. We know that A and Es are being accessed by increasing numbers of patients, and we know from history that one key driver of that was the previous Government’s decision to contract out-of-hours GP care away from local GPs. One direct consequence of that has been additional pressures on accident and emergency departments. In many ways, that pulls against what he spoke about and what I believe in, which is the need to deliver more and higher quality care in the community. That cannot be nine-to-five or nine-to-six care in the community; it has to be all-day, 24/7 care, which is what integrated good health care looks like. I believe that the decision was bad. I saw its consequences when I worked as a casualty doctor in A and E. We have lived to regret it, and it has been badly to the detriment of patients.
The report on the Mid Staffordshire NHS Foundation Trust graphically outlined the fact that targets have often got in the way of front-line patient care. That is why this Government, when they came to power, relaxed the 98% target for the four-hour wait in A and E and set it at 95%, which doctors, nurses and my fellow health care professionals said was in the best interests of patients. Too often the four-hour target meant that a patient who perhaps had a broken toe was given priority ahead of a patient with potentially life-threatening chest pain. That was not good medicine or patient care, but showed targets getting in the way of looking after patients effectively, a lesson that was graphically depicted in the Francis report on the Mid Staffordshire trust. We must learn such lessons and acknowledge that although targets can have a place in health care, we have to trust and listen to front-line health care professionals if we are to deliver high-quality care for patients.
On the national context of urgent care and accident and emergency care, the Government are committed to developing a more coherent 24/7 urgent care service in every part of England. That will provide universal access to high-quality 24/7 urgent care services, so that whatever people’s needs or location, they will get the best care from the best person in the best place and at the right time.
The NHS has always had to respond to patients’ changing expectations and advances in medical technology. As lifestyles, society and medicine continue to change, the NHS will also need to change. The reconfiguration of urgent care services is therefore about modernising the delivery of care and facilities to improve patient outcomes, develop services closer to home and, most importantly, save lives. We are clear that, as the hon. Gentleman outlined, the reconfiguration of front-line services is a matter for the local NHS. That was the previous Government’s policy and is this Government’s policy.
Services should be tailored to meet the needs of the local population. We expect proposals for service changes to meet four tests: to demonstrate a clear clinical evidence base underpinning any proposals, focusing on improved outcomes for patients—in other words, to save lives—and to show clear support from GPs as the commissioners of local health-care services, strengthened arrangements for public engagement and support for patient choice. Even when all those tests are met, if the responsible local authority is concerned about a decision, it will have the option to refer such a decision to the Secretary of State.
Our vision for urgent care is to replace the ad hoc, unco-ordinated system that has developed over the past few years—characterised by poor quality and too much variation in care throughout the country—with a more consistent system that delivers improvements in patient care. The Government are committed to putting GPs in charge of commissioning urgent care services. We believe that empowering GPs and other health professionals will achieve better and more patient-focused services.
It would be wrong not to talk about the winter pressures faced by the NHS. In response to those pressures, we have put about £330 million of additional money into the NHS to deal with them. I am aware that local hospitals in the Birmingham area recently issued a statement advising patients to attend A and E only for matters requiring urgent attention, because of the pressures of demand experienced by emergency departments. There is always more pressure on the NHS during winter months, with more demand on urgent and emergency care services, and this year is not different. During October and November 2012, NHS Midlands and East scrutinised winter plans, escalation triggers and protocols across its health economies, and it is monitoring pressure on health services during the winter across the whole of the strategic health authority area to ensure that patients continue to have access to high quality NHS care in Birmingham and elsewhere.
I turn to the local context, which is obviously of importance to the hon. Gentleman and his constituents. He is a tremendous advocate for his constituents, and has eloquently outlined some of the local concerns, which relate to an NHS review of urgent care provision in Birmingham and Solihull. The clinical commissioning groups in the area are developing an urgent care strategy to improve access to and integration of services for people with urgent health care needs, to make the system simpler to navigate and to avoid duplication.
I understand that local commissioners have engaged stakeholders in the process, and they include clinicians, patient groups, providers and health overview and scrutiny committees. The local NHS has collected evidence from local people to understand the usage of current urgent care services, such as walk-in centres.
The hon. Gentleman will be aware that the local NHS is now developing a draft strategy outlining some initial options. However, it is important to make it clear that as yet no decisions have been made. That is for local determination, and it would not be appropriate for me to comment further on the detail of the urgent care review.
I am assured by the local NHS that engagement with local people and other stakeholders will continue over the coming months to ensure their input in the final proposals ahead of the formal consultation later in the year. Of course I expect any proposals to meet, where appropriate, the four tests for service change.
I understand that the hon. Gentleman met representatives of Birmingham CrossCity CCG in December 2012 to discuss the review, and I encourage him to continue engaging with local NHS staff on the matter.
Jack Dromey
It is certainly true that we had a meeting in December and that it was clear beyond any doubt that there was a real threat to both the walk-in centres. A commitment was given that by the end of January there would be a route map of the next stages of process and engagement, but here we are in the first week of March and it has yet to be produced. The suggestion now is that it might not be with us until mid-April at the earliest. Although I understand what the Minister is saying in good faith about the importance of proper engagement with the community, I have to say that those responsible in the national health service in Birmingham have been dragging their heels.
Dr Poulter
The hon. Gentleman is right to say that when there is talk of service change, effective engagement is important and must be dealt with in an expedient manner. There must be an awareness that the prospect of any change can lead to understandable concerns among both staff and patients. A time of change is always potentially unsettling. I know that he, like me, will want to encourage the CCGs to come to the table and address this matter more effectively than they have done. I will endeavour to ensure that there are representatives from the CCGs at the meeting that we have later in the month, as that will be an effective way of helping to facilitate matters and bring them to a more speedy resolution.
In conclusion, I encourage local people in Birmingham and Solihull and their elected representatives, including the hon. Gentleman, to participate in the engagement process and subsequent consultation to ensure that their views are taken into account. I look forward to meeting the hon. Gentleman later this month to ensure that we do all we can to facilitate a speedy resolution of the matter and to ease these times of uncertainty that are faced by his constituents.
IT Recycling
(11 years, 2 months ago)
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Mr Aidan Burley (Cannock Chase) (Con)
Thank you, Mr Weir, for calling me to speak. It is an absolute pleasure to serve under your chairmanship this afternoon. I also thank the Minister for turning up. Our last encounter in an Adjournment debate was on the rather more controversial issue of trade union reform. I can assure him that although this afternoon’s debate may be slightly less spicy, the topic that we are discussing will nevertheless be just as important.
I was prompted to apply for this debate after recently attending the opening of a new IT recycling facility in my constituency by a company called PRM Green Technologies. As a declaration of interest, I am delighted to say that several of the company’s directors have travelled down from Cannock to Westminster to be here for this debate this afternoon. I am very happy to see Richard Manning, Paul Mallet and Tim Hawkins sitting in the Gallery. If I get any of the IT detail wrong, no doubt they will intervene on me from a sedentary position.
Mr Burley
Well, perhaps not.
What I learned from my recent visit to PRM Green Technologies was very interesting. Here was a local firm exhibiting strong and sustained growth, and providing much-needed jobs for local people; in fact, it recruited especially from the disadvantaged and long-term unemployed. Yet it appears to be deliberately operating at a competitive disadvantage, because it has long been the IT recycling industry’s standard to charge end users and organisations, including public bodies such as schools and hospitals, to dispose of all their old, unwanted and end-of-life IT equipment. However, PRM offers that service for free while remaining a profitable business.
Whenever an organisation has finished using its IT equipment—whether that equipment is computers, laptops or other hardware—and wants to get rid of it securely, which is an important issue that I will come on to in a minute, the accepted practice is to pay a firm to collect the equipment and take it away. There are sensible reasons for doing so, because a company is paying not only for its items of IT equipment to be collected as people might pay to have household waste collected but for a service whereby the data left on them will be wiped and they will be securely recycled. That is especially important if there is sensitive material on the equipment, as might be the case if the computer had been used in a hospital to store medical files, by the police for criminal records or by a school or care home to store data on vulnerable children. The last thing that we want is British police computer data ending up for sale on second-hand computers in Iraq, as has happened recently.
However, PRM Green Technologies in Cannock offers all those services—the collection, the secure recycling and the data wiping—for free, and does so at a national level. Its business model does not charge the service user a single penny to recycle their redundant and end-of-life or damaged IT equipment. As I learned on my visit, the company already has more than 4,000 customers, who enjoy a service that is completely—100%—free of charge.
Why is all this important, and why have I secured the debate? Well, I have a simple question this afternoon: if this service is available for free, to nationally agreed standards of data cleansing, why would any organisation—public or private—pay for the same service? If we think about it, this process has the potential to be incredibly important for the public sector as a whole, which, as we know, is already struggling to deal with budget reductions in this age of austerity. If a school spends money on paying to have its old IT equipment recycled, that money cannot be spent on teachers, sports facilities or a new playground. If an NHS trust spends money on paying to have its old IT equipment recycled, that money cannot be spent on doctors, nurses or medicine, and if a council spends money on paying to have its old IT equipment recycled, that money cannot be spent on libraries, leisure facilities or resurfacing roads, which are services that we know all our constituents rely on and prioritise.
Let me give just one example. Many of PRM’s customers are education providers, such as schools, colleges and universities. The company calculates that it alone has saved the education sector in excess of £5 million, which is the same amount of money that could have employed a total of 237 teachers. Just imagine what that could mean if the system were rolled out nationally? If a small company from Cannock, with 28 employees, can effectively pay the salaries of 237 teachers, how many more teachers could be provided nationally if school budgets were better managed? This one firm also has 17 local authorities on its books, as well as three NHS health care trusts. Again, think of how many council staff or medical professionals could be employed if all the other local authorities or health care trusts in the UK did not waste their budgets on paying to have their old IT equipment recycled.
I have a number of questions for the Minister. First, what can the Government do to make public bodies aware that there are companies—not just PRM in my constituency but other companies—that will absorb all the costs of recycling all of their old IT equipment? Secondly, what can we do to ensure that public bodies do not waste their budgets on IT recycling and instead spend every penny on the front line? Thirdly, will he start the process with his own Department and write to me to say whether the Cabinet Office spends any of its departmental budget on disposing of its old computers? Finally, will his Department write to the other Whitehall Departments to ask similar questions of them?
I ask those questions now because if so many organisations, bodies and individuals can already see the benefit of using PRM—not only once, but time and again—why are more sections of society, industry and Government not waking up to the fact that, even in these austere times, there are companies run by individuals such as those sitting in the Gallery today that will charge nothing for IT recycling? If they did wake up to that fact, they could—indeed, would—make a difference to their organisation’s ability to serve the public.
Having said that, we need to go slightly further. We must ask ourselves what challenges, real or perceived, prevent Departments or larger parts of the civil service from availing themselves of such a service provision for no cost whatever, and therefore from providing far greater value for money for the taxpayer?
After talking to PRM when I visited its facility, I learned that the biggest issue regarding Government assets would appear to be security. The feedback that PRM receives is that the possibility of events such as data being lost, assets going untracked and personnel entering sites without the correct checks being in place presents great concerns.
People might ask, “Are companies that perform this service for free actually capable of providing the level of data security required, and yet still maintaining zero costs?” To do so, all of a company’s staff would need to be vetted to BS7858 standards. Its premises would need to protected by several layers of physical security, including two external rings of steel, 24-hour security guards, CCTV monitoring 24 hours a day, monitored alarm systems, internal access control and interior steel cages that are protected 24 hours a day. All that security is needed to ensure that the data remain secure once they have been collected from an organisation and before they are deleted and wiped. A company would need to destroy data assets using Government-approved software and devices, as well as special shredding techniques. Its vehicles would need to be fully liveried, satellite-tracked and have CCTV on board, to further protect the assets that the company carries on behalf of its service users. Surely a company cannot do all of that without charging its customers. Well, companies can and do. PRM does all that, and other companies around the country do it too. Quite simply, there is no catch. And if PRM and other companies can do that, concerns about data security need not be valid and need not be a reason to continue with existing paid-for IT collection contracts.
How does PRM manage to offer such a service? It does so because it extracts every little bit of residual value from every kilogram of every item that it collects and processes, and because it has chosen to model its business in this way it ensures that it extracts maximum value from IT equipment, therefore guaranteeing minimum waste and landfill. If a company has to absorb its own collection costs, not least the petrol and the vans, let alone the infrastructure that I have described, it makes sure that it extracts every bit of residual value from every kilogram of every item of IT equipment it collects, because it has to.
However, here is the depressing bit. Although companies such as PRM Green Technologies can offer that service, increasingly Departments and the NHS are unable to respond to its unique offer. In initial contacts, PRM often talks directly to the responsible IT department or the finance department, but often it finds that current contracts blanket-cover all aspects of a service, otherwise known as the dreaded outsourcing, or facilities management. By way of a total tangent, these are the same sort of all-inclusive outsourced contracts that led to the TV chef, James Martin, discovering that Welsh hospitals could not buy Welsh lamb to serve to their patients, because their outsourced contractor bought all its lamb from New Zealand, even though lambs were literally grazing on fields outside the hospital and local farmers could charge almost 50% less than the New Zealand imports. I digress, and that is a debate for another time, but the point is valid. Even if a Department wanted to be involved, it is often tied into a cost-making exercise.
Senior people in a Department or buyers in councils are often surprised that this free service even exists. What should be most shocking of all to the Minister is that often, their tendering model cannot cope with assessing tenders that have a negative or zero value in the calculation. Perhaps the Minister will think about that for a second: because councils cannot conceive of not paying for the service, the computer says no. That being so, we must examine the charges that are incurred across every part of Government and question the structure of contracts. Those charges appear to be part of much larger and more complex contracts of service provision, which we need to investigate to render them more transparent for the public good.
What can be done to ensure better procurement of goods and services throughout the public sector, allowing schools, hospitals, police forces and councils to avail themselves of a free IT recycling service? Perhaps we as a society need to rethink our negative attitudes to people who offer something for nothing. In this instance, that should not apply, because as I have already explained there is always residual value in IT equipment, which all providers need to ensure that their commercial model is viable. In short, even companies that are paid to collect unwanted computer equipment still need to be able to sell them on or break them down for parts to be a viable, profitable business. The difference is that some companies, such as PRM, have the social conscience not to skim extra cream off the top.
All that the organisations need to know, whether police forces, councils, hospitals, or businesses, is one thing: where are their assets going to end up? It makes more business sense for IT recycling providers to ensure that they can extract maximum value from assets without charge to the service user. If they get paid only for what they can repair, refurbish and resell, or recycle in full, it cannot be in their interest to dump or dispose of these items incorrectly, as they will not get a penny for any item dealt with in such a manner. With asset-tracking and reporting systems in place, the customer can be further reassured of their good intentions.
There is no inherent greater security in a firm that charges to pick up IT equipment, and then recycles it and sells it on, than in a firm that picks it up for free before recycling it and selling it on. In fact, the reverse may be true. If a company is making a margin on picking up the goods, they arguably have less incentive to securely recycle them and squeeze out every penny of margin, as they already have some cash in the bank simply from collecting the items.
Perhaps the greatest problem presents itself when the very people tasked with ensuring that assets are disposed of correctly are poorly equipped, through no fault of their own, to make an informed decision about how to deal with that problem. For example, the head teacher of a primary school, who deals with the school’s entire IT assets and support, may receive little direction on how to approach the challenges of safe and correct disposal of IT equipment while ensuring value for money for their school. To that head teacher, paying for such a service might seem a sensible, industry-accepted practice, not least because they might never have heard of alternatives that could mean that they could pay for a new classroom extension, playground, or even computer room.
I do not know how to change those perceptions, but I know that the Minister, wearing his other hat, has responsibility for communicating the not entirely straightforward concept of the big society. In responding, perhaps he will draw on his communications experience, and the power, leverage and tentacles of his Department, in saying how we can change people’s perceptions. Once the benefits are fully realised, many further positives can flow, with public money being better directed to the front line rather than wasted in unnecessary ways.
Even though the waste electrical and electronic equipment directive, the European Community directive that requires all our electrical items to be registered and recycled safely, has placed the onus of the cost of recycling on the producers and importers of these items, that has not filtered down to many of the organisations previously mentioned. Despite computer companies having to adopt membership of approved compliance schemes and having to pay to offset the large tonnages of equipment that they place on the market every year, there are still just as many companies in existence that charge for the service that they provide.
Every electrical item has some degree of residual value, and with modern recycling techniques there is no reason why that value should not be returned in some measure. If a service provider, such as PRM, is prepared to speculate that the residual value in any goods collected will be greater than the overall costs of collecting and processing them, surely that must be to everybody’s advantage.
There is a moral case for public sector organisations to spend as many pennies as possible on their front line, rather than paying for redundant IT equipment to be taken away, and a financial case for spending more money on teachers, nurses, doctors and policemen, and less on IT waste recycling.
How do we make the decision makers in these organisations more accessible to the providers of these free services? How do we make them more aware of the alternative, cheaper options that exist? Should we compel them, by law if necessary, to use free providers, rather than pay for the equivalent service? What can we do about the outsourced contracts that I mentioned, which tie big organisations such as NHS trusts into schemes they cannot opt out of even when they see a better alternative? What can the Government do to help the public sector help itself in respect of bearing the costs of recycling old IT equipment?
Those are the questions for the Minister, who has a huge opportunity to make massive savings across the public sector at no cost to jobs by ensuring that no one spends a single penny to recycle their redundant and end-of-life or damaged IT equipment, and that people instead use firms such as PRM Green Technologies, which is a great example of a private sector firm acting in the best interests of the public sector, taxpayers and society as a whole.
The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)
Mr Weir, I am delighted that I did turn up, not least to serve again under your chairmanship, and to listen to a crackingly good speech by my hon. Friend the Member for Cannock Chase (Mr Burley). He is right. This debate is a lot calmer than the previous one he initiated on trade union reform, although not so well attended. However less spicy, he is entirely right. We are debating the fundamental question of how committed the Government are to getting best value for the taxpayer, because every £1 we save by driving greater efficiency in the procurement of goods and services is £1 we do not have to cut from something else and £1 we can invest in the front-line services that our constituents care about. That matters enormously.
I congratulate my hon. Friend both on securing this debate and on the way he made his case. As an excellent local MP, he is a great champion of local businesses. I extend my welcome to the directors of PRM Green Technologies, which seems to offer an excellent service, as is substantiated by its 4,000 clients and counting. The company is clearly working, and it is an example of a good British business that is coming up with new solutions and offering real value at a time when we need to challenge the system, which spends so many billions of pounds of our money, to be more efficient and effective.
As a Cabinet Office Minister, I felt genuine shock when I saw the attitude that we inherited to public money. We embarked on a process of doing straightforward, simple things to make Government procurement more efficient, and it is genuinely shocking that we are already delivering billions of pounds a year in savings to the taxpayer. That should not be possible, but it is, due to the previous Government’s attitude to public money.
The debate draws out the system’s attitude to risk and how good people are at buying things. Too often, and we are trying to break down this frustration, procurement seems to be too much about process and not enough about what we are buying and how we can get best value. There is too much risk aversion and too much emphasis on box-ticking. People are not asking, “What are we really buying? Do we really need to spend this money? Isn’t there a smarter way of doing this?” If there was ever a time to break down that culture, it is now, because of the pressure to be more efficient in how we use taxpayers’ money. That matters, because every £1 we save is £1 we can put to more productive use for the benefit of the people we serve.
The debate is also about the need to create the conditions to open up the system to smaller, more entrepreneurial, more creative and more dynamic organisations. There are such companies across the spectrum, in both the for-profit sector and the not-for-profit sector. There is a similar complaint about the difficulty of getting into a system that is geared to buy from the big, the safe and the very expensive, which we must try to break down.
I have several assurances to offer my hon. Friend. The first may sound a bit motherhood and apple pie, but I assure him that the Government support recycling IT equipment for both financial and sustainability benefits. I would expand on that if I had more time, but it is a point of principle that is worth asserting. Recycling IT equipment matters to us.
We are aware of the value of surplus and redundant IT equipment. Through proper recycling, the Government may not only dispose of redundant equipment at no cost but profit from the sale and reuse of the scarce and valuable resources that it contains. We are voracious in trying to get better value for the taxpayer, and we are working to ensure that as much of that value as possible is extracted and returned to Government.
I refer my hon. Friend to the “Greening Government: ICT Strategy,” which was published in October 2011—I am sure he keeps a copy by his bed—which sets out how Government information and communications technology, including its end-of-life reuse and recycling, will be made green. The strategy includes the adoption of a clear waste hierarchy in which surplus equipment is reused or refurbished to avoid the unnecessary procurement of new equipment, thus saving money and reducing waste. The strategy also includes the donation of surplus equipment to benefit big society initiatives—I am grateful to him for mentioning the big society—and the recycling and reuse of ICT equipment components and materials. The strategy clearly articulates the value of recycling redundant ICT equipment, and metrics are being introduced to ensure that it is done effectively across all Departments.
My hon. Friend asked what we were doing to ensure that public bodies did not waste their budgets on IT recycling but instead spent them on the front line. The Government Procurement Service offers public bodies a method for recycling ICT assets under the supported factories and businesses framework agreement, RM722. The agreement ensures that equipment is recycled responsibly and maximises the cash return from the extraction of valuable components and materials, which has seen limited but growing take-up since launch. In the financial year 2011-12, and in the current financial year to date, the agreement has been used by at least 33 bodies, including schools, councils, agencies and Departments, so it has made a decent start.
Mr Burley
I am grateful to the Minister for his bedtime reading recommendation.
IT recycling is an opportunity that will only get bigger as more IT equipment is bought and new ways of working progress into all parts of the public sector. He may be aware that some councils now have a policy that, when an employee leaves and a new employee takes on their role, the old employee’s laptop is not given to the new employee. The policy is that the old machine must be destroyed and that the new employee, even if they are doing the same job, must have a completely new laptop or desktop. The problem, therefore, is only going to get bigger, and the opportunity for saving the cost of recycling will be ever greater.
Mr Hurd
If we are ever to break down that culture, now is the time, because there is no organisation in the public sector, or arguably in the private sector, that is not thinking about how it can be more efficient and reduce unnecessary costs.
There is an awareness of the importance of IT recycling, and there is a public strategy to which we can be held accountable—the “Greening Government: ICT Strategy.” The GPS offers a support mechanism to public bodies that is beginning to be taken up.
The Cabinet Office is keen to show a lead—I will write to my hon. Friend on this—but our ICT services are provided by the Treasury under the public sector flex framework agreement as part of a fully managed shared ICT service. I am using this debate to poke at the issue and at the leadership we might be able to show.
If there was ever a time when we have an opportunity to change the culture and to instil much more efficiency and creativity, it is now, because of the financial pressures upon us. We also have a friend in the process, which is the Government’s commitment to much greater transparency on how public money is spent. Down to the last £500, the public and companies such as PRM will know and will be much freer to challenge the spending of local authorities. As we see leadership, and as we see more public sector organisations showing initiative in doing things better, there will be more information available about those that are not doing so. We in this place, and people outside, will therefore be much freer to challenge inefficiency and say, “You can do this more intelligently. Look, they have done it over there.” We have not had such information, and we are only just beginning to get proper information about the cost of IT recycling across Government. That is our inheritance, because previous Administrations did not care enough about the cost of IT recycling, and they did not care about efficiency. We are genuinely committed to changing all that.
Question put and agreed to.
Written Ministerial Statements
(11 years, 2 months ago)
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UK Statistics Authority (Contingencies Fund)
(11 years, 2 months ago)
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The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)
The Cabinet Office wishes to report that a cash advance from the Contingencies Fund has been sought for the UK Statistics Authority (referred to as the Statistics Board in the Statistics and Registration Service Act 2007). The advance is needed to meet an urgent cash requirement on existing services pending parliamentary approval of the 2012-13 supplementary estimate. The supplementary estimate seeks an increase in net cash requirement in order to settle material liabilities recognised in the prior year. Parliamentary approval for additional cash of £16 million will be sought in a supplementary estimate for the UK Statistics Authority. Pending that approval, urgent expenditure estimated at £6 million will be met by repayable cash advances from the Contingencies Fund.
The advance will be repaid upon Royal Assent of the Supply and Appropriation Bill.
A copy of the final evidence will be placed in the Library of the House and will be available at: www.gov.uk.
ECOFIN
(11 years, 2 months ago)
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The Chancellor of the Exchequer (Mr George Osborne)
A meeting of the Economic and Financial Affairs Council will be held in Brussels on 5 March 2013. We expect the following items to be on the agenda and discussed:
Revised capital requirements rules (CRDIV)
The presidency will seek Ministers’ political endorsement of a revised CRDIV package.
VAT fraud: quick reaction mechanism (VAT QRM)
Ministers will discuss political guidelines. The UK will continue to stress the importance of decisions on tax matters being made by the Council and being subject to unanimity.
Economic governance “two pack”
The presidency will update Ministers on the agreement reached with the European Parliament.
Current legislative proposals
The presidency will update Council on revised rules for markets in financial instruments (MiFID), the proposed single supervisory mechanism (SSM), the bank recovery and resolution directive (RRD) and the mortgage credit directive.
European semester: discussion of certain thematic issues—report on quality of public expenditure
Ministers will hold an exchange of views and will seek to agree Council conclusions.
Closer EMU: response to President of the European Council
Ministers will hold an exchange of views in order to prepare a contribution to the European Council’s discussions on closer EMU integration, expected in June.
Follow-up to G20 meeting of Finance Ministers and governors in Moscow, 15-16 February 2013
The presidency and the Commission will update Ministers.
Reducing Preventable Mortality
(11 years, 2 months ago)
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The Secretary of State for Health (Mr Jeremy Hunt)
Today, I am publishing “Living Well for Longer: A call to action to reduce avoidable premature mortality”. This document focuses attention on premature mortality and challenges the health and care system to do something about it.
Despite the great strides that have been made in improving the health of the nation in recent decades, far too many people are dying too young from diseases that are largely preventable. We want England to be among the best in Europe when it comes to tackling the leading causes of early death, starting with the five big killer diseases—cancer, heart, stroke, respiratory and liver disease. If everyone had access to the best diagnosis and treatment that is already available, we could avoid an extra 30,000 deaths per year by 2020.
Our ambition to reduce our rates of premature mortality to the level of our European peers is ambitious and challenging. Government will play their part but cannot do this alone. It will take concerted action across the health and care system locally and nationally. The call to action therefore poses some challenging questions and is designed to generate open and honest debate, leading to action, to see what more we collectively can do to reduce premature mortality. If we as a country are to tackle the challenge we face, we need to make improvements across the spectrum of prevention, early diagnosis and treatment.
“Living Well for Longer” also sets out actions to drive transparency and accountability. I want every locality in the new system to understand how it compares for health outcomes with similar areas in England and how England compares across Europe. Knowing how well we are doing is critical to driving improvement.
My Department has worked closely with partners across the health and care system, including the statutory and third sector, in developing this call to action. We will bring these partners together over the coming months and years to see how well we are doing in reducing premature mortality, and to see what more we can do together.
We are also publishing today a “Cardiovascular Disease Outcomes Strategy”. This strategy will contribute to delivery of improved mortality rates by providing advice to local authority and NHS commissioners and providers about actions in relation to cardiovascular disease that can help deliver our ambition.
Copies of “Living Well for Longer: A call to action to reduce avoidable premature mortality” and of the “Cardiovascular Disease Outcomes Strategy” have been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
The documents are also available at: www.dh.gov.uk/health/2013/03/mortality.
Crime Outcomes Recording Framework
(11 years, 2 months ago)
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The Minister for Policing and Criminal Justice (Damian Green)
As part of the Government’s commitment to increasing democratic accountability and reducing bureaucratic accountability, we have consulted on proposals to broaden the current “sanction detections” framework to better reflect all of the work that the police do to solve and resolve crime in national statistics.
A revised framework for recorded crime outcomes will support police officers to use their professional judgment to ensure a just and timely outcome which reflects the harm to the victim, the seriousness of the behaviour, the impact on the community, and which deters future offending. Furthermore, it will also give the public more detailed information about the work their police forces are doing and so further empower local communities to hold their chief officer and police and crime commissioner to account for tackling crime locally.
The consultation closed on 7 December 2012, and we received 65 responses. Responses were overwhelmingly supportive of the new proposals, and provided valuable insight into their potential impact.
In response to the consultation the Government will:
Replace the term “sanction detections” with “crime outcomes” (April 2013).
Introduce “community resolution” as a formal outcome category (April 2013).
Broaden the existing “no further action” category following further consultation (April 2014).
The Government will be publishing their detailed response to the consultation on 5 March 2013 and copies of this document will be placed in the House Library and on the Home Office website at: http://www.homeoffice.gov.uk/about-us/consultations/.
Prison Service Pay Review Body
(11 years, 2 months ago)
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The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
I am pleased to announce that the Prime Minister has appointed Jan Parkinson, Esmond Lindop, Karen Heaton and Peter Maddison, and re-appointed Professor John Beath as members of the Prison Service Pay Review Body, all for three years and commencing March 2013. The appointments have been conducted in accordance with the Commissioner for Public Appointments’ code of practice on appointments to public bodies.
Legal Aid Reform
(11 years, 2 months ago)
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The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
The Chancellor’s autumn statement made it clear that further savings must be found from all areas of public expenditure.
Through the Legal Aid, Sentencing and Punishment of Offenders Act 2012 we have already reduced what we spend on legal aid for civil cases by targeting resources to those most in need. Criminal defence represents by far the largest element of our remaining legal aid spend, where we are still spending over a billion pounds a year. We are committed to ensuring that the criminal legal aid scheme of the future continues to protect people’s fundamental right to a defence. However, against a background of continuing financial challenge, we need to ensure we target our resources in that area too.
We are working to improve the efficiency of the criminal justice system as a whole, to move towards swifter resolution of cases before the courts.
We also need to look again at ensuring that defendants who can afford to contribute to their legal costs do so and that the legal aid system commands the confidence of the public. We are already taking steps in this regard to strengthen the effectiveness of the Crown court means-testing scheme which, from July 2013, will include powers to seize and if necessary sell a defendant’s motor vehicle if subsequently convicted. This is one of a raft of measures we are announcing today to help ensure that defendants contribute towards the cost of their otherwise taxpayer-funded defence.
In addition, we must consider how to achieve best value for money in the way we procure legal aid. We have already made clear our intention to introduce price competition in the criminal legal aid market, as the best way to ensure long-term sustainability and value for money. In a written ministerial statement laid on 1 December 2011, Official Report, column 74WS, we set out our intention to consult on proposals for competitive tendering in autumn 2013. Given the need to achieve savings as quickly as possible, we have decided to accelerate that timetable.
We therefore intend to publish an eight-week consultation on further reforms to legal aid in April 2013, which will include proposals to both improve the credibility of the legal aid scheme and reduce its cost to the taxpayer—one of these being price competition in criminal legal aid.
The revised indicative timetable for the development and implementation of our competition strategy is, subject to the outcome of consultation, as follows:
Consultation paper published—April 2013
Tender opens in competition areas—autumn 2013
First contracts go live—autumn 2014
The new contracts that we anticipate will be awarded in autumn 2014 will require contract holders to work digitally as part of the move to a digital criminal justice system.
House of Lords
EU: Subsidiarity Scrutiny
(11 years, 2 months ago)
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Lord Kakkar
To ask Her Majesty’s Government what assessment they have made of the working of the European Union subsidiarity test procedure under the Lisbon treaty in view of the two recent reasoned opinions submitted by this House to the European Union institutions.
Lord Wallace of Saltaire
My Lords, the power of national Parliaments to issue a reasoned opinion that an EU proposal does not uphold subsidiarity has been exercised many times since 2010, including five times by your Lordships’ House. Only once, on the Monti II proposals on the right to collective action across borders, have enough Parliaments done so to trigger what is called a yellow card. However, the views of national Parliaments have been influential on a wide range of issues and the continuing use of this procedure should give them an increasing role.
Lord Kakkar
My Lords, I declare my interest as a member of your Lordships’ European Union Committee, Sub-Committee B. Under the current test procedure, this Parliament can only challenge the Commission on the basis of subsidiarity, as the Minister has said, if at least eight other Parliaments also raise concerns. What obligations does the Lisbon treaty place on national Parliaments to participate actively in the scrutiny of directives, because without such scrutiny and participation, the subsidiarity test cannot possibly work? Under what circumstances would the Government consider using the red card in the test procedure, to seek judicial review by the European Court of Justice, where this Parliament, through its scrutiny, has raised substantial concerns about subsidiarity and where other Parliaments may not have participated in the process?
Lord Wallace of Saltaire
My Lords, in the nature of events, red cards are to be used in an emergency situation, not as part of the normal procedure. Perhaps it would help the House if I point out that last year, the Swedish Parliament issued 20 reasoned opinions; the Luxembourg Chamber of Deputies issued seven in 2011 and a larger number in 2012; the French Senate issued seven last year; and the House of Lords issued five. It is not the case that we are the only Parliament to be active in this regard.
Lord Elton
My Lords, under what circumstances would my noble friend consider that Her Majesty's Government should exercise themselves through the diplomatic network to engage the interest of other Parliaments in matters that concern us and appear not to have reached their attention?
Lord Wallace of Saltaire
My Lords, Her Majesty's Government do operate a diplomatic network in precisely that area. I hope that scrutiny committees through COSAC—the Conference of Parliamentary Committees for Union Affairs of Parliaments of the European Union—also now operate actively in this regard. I am told that it has become a much more effective body since I used to attend COSAC meetings many years ago when I was the chairman of a sub-committee. There is now a set of offices in Brussels of national Parliaments which provides a network where national scrutiny committees can get together. I hope that the Lisbon treaty arrangements will allow that network to become more and more active.
Lord Pearson of Rannoch
My Lords, remembering that for the past 33 years all British Governments have promised not to allow enactment of proposed EU legislation which is still being scrutinised by our Select Committees here and in the other place, will the Minister confirm Written Answers which reveal that this scrutiny reserve was broken no fewer than 403 times between January 2010 and June 2012? Does that not make 403 pieces of EU legislation that Parliament has not agreed but which have been steamrollered through by the juggernaut anyway?
Lord Wallace of Saltaire
My Lords, the noble Lord uses his characteristically robust and colourful language. There is always a tension between the time that national Parliaments wish to take for scrutiny and the pressures that national Governments, including our own, may wish to give to taking decisions. There are those in national Parliaments who regard the eight-week limit for taking a scrutiny decision as unfortunate, but I am informed by those who know the Brussels situation better than I do that the earlier national Parliaments submit reasoned opinions in the process of negotiation, the greater effect they have.
Reasoned opinions in the form of reports issued by the European Committee of this House are widely respected throughout the European Union in other national Parliaments and elsewhere. I recall with delight a Member of the European Parliament being appointed to head a committee in the European Parliament. He was asked by his clerk to start by reading three documents, two of which were reports from the House of Lords EU Committee.
Lord Hannay of Chiswick
My Lords, would the Minister not agree that in the short period of time that the yellow-card system has existed, the main lesson to draw is that we have to get better at enlisting other national Parliaments when we use the yellow card because that is the shortfall? Will he confirm that on the one occasion when it was used, the Commission withdrew its proposal—the Monti II proposal? Will he also confirm that the right to take action in the Court is one for this House, not the Government under the Lisbon treaty?
Lord Wallace of Saltaire
I can confirm all of those matters. On the Monti II proposals, some of the reasoned opinions submitted by national Parliaments were much more about the principle of the proposal rather than the subsidiarity issue. Her Majesty's Government did not suggest that we should submit a reasoned opinion on subsidiarity issues because they objected to the principle of the proposal.
Lord Spicer
My Lords, is not one of the ironies of subsidiarity that it requires greater centralisation to determine with whom the subsidiarity should remain?
Lord Wallace of Saltaire
I am not entirely sure that I follow the logic of that. We are in an increasingly globalised economy. That economy requires increasing international regulation of one sort or another. We are in a constant situation of tension between international regulators—not just the European Union but many other international bodies as well—wishing to extend the process of regulation and national Governments, national Parliaments, local groups and other lobbies wishing to resist it.
The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford)
My Lords, we have already had two questions from Cross-Benchers, so it is the turn of the Liberal Democrats.
Baroness Falkner of Margravine
My Lords, does my noble friend agree with the European Union Scrutiny Committee when it took evidence from Professor Dashwood who, in respect of arguing before the European Court of Justice, said that,
“the subsidiarity principle was most useful in the state of law-making rather than at adjudication, at which point it was ‘largely inoperable’”?
In other words, as the noble Lord, Lord Hannay of Chiswick, has said, we need to build alliances in good time rather than wait to go to court.
Lord Wallace of Saltaire
My Lords, the principle of subsidiarity is in many ways a difficult concept to get hold of, and of course it is highly political. There are those here who think that a number of things should be dealt with in Wales and Scotland and not at the national level, while I wish that the principle of subsidiarity was better applied in England than it is at present. This is part of the way we play politics between different levels of government.
Lord Wigley
My Lords, can the Minister clarify how this procedure works in practice, bearing in mind the comments made by the noble Lord with regard to the power being with the Chambers and not with the Government themselves? As the UK has two votes on the basis of being a bicameral system, one of which is allocated to this Chamber, what would be the outcome if there was a difference of opinion between the House of Commons and this Chamber? Would we have to defer to the House of Commons as it is the elected Chamber?
Lord Wallace of Saltaire
My Lords, no, we would not. It would be interesting if, for example, the House of Lords decided on one side while the House of Commons decided on the other. I think it is unlikely, but I should say that there have been occasions on which some national Parliaments have issued reasoned opinions objecting to particular proposals while one or two others have issued opinions that are strongly supportive.
Probation Service: Community-sentenced Offenders
(11 years, 2 months ago)
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Lord Ramsbotham
To ask Her Majesty’s Government whether the management of community-sentenced offenders will remain the responsibility of the Probation Service.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the Transforming Rehabilitation consultation by my department closed on 22 February and we are now considering our response. We have proposed opening up the market for rehabilitation services to a more diverse range of providers, but the public sector will retain ultimate responsibility for public protection and will manage directly those offenders who pose the highest risk of serious harm to the public.
Lord Ramsbotham
My Lords, I thank the Minister for that reply. Last week, the Justice Secretary appeared before the Justice Select Committee in another place and said that we have a duty to supervise offenders in a consistent way and that he wanted to make the probation world more independent of Government and the big bureaucratic documents that tell them how to do their job. For 100 years until recently dissolved by its subordination to prisons, the probation service, in partnership with the police and the courts, was responsible for the consistent supervision of community-sentenced offenders independent of such interference. Can the Minister tell the House how the Justice Secretary’s proposed division of responsibility for the supervision of different types of offender between probation and an unknown number of untried private and voluntary sector organisations will better honour his duty of consistency?
Lord McNally
I hear the growl from the Benches opposite, but it is interesting that we are using the 2007 Act to carry through these reforms of probation, so they are not exactly being original in terms of how we should develop these matters. I do not take fully the point made by the noble Lord about going into the unknown. The fact is, as those noble Lords opposite who have had dealings with these matters will know, that the voluntary and the private sectors have been involved in offender management for a very long time. We are trying, within a very tight budget, to see whether we can reform the probation service and dealings with offenders in order to bring in the best of what works outside. It has been interesting to learn that good ideas on offender management are not constrained simply to the probation service. As I said in my original reply, the public sector has ultimate responsibility for public protection, but we think we can deliver a reorganisation that also makes use of the wide variety of experience and expertise that exists in this area.
Baroness Smith of Basildon
My Lords, I have listened carefully to the answers given by the Minister. He will be aware that one of the most important things for the probation service is that there is public confidence in the work that it does. Part of that public confidence comes from the transparency of having information about the work that it does, and understanding what works and what is most effective. In his Answer, he said that the public sector has the ultimate responsibility. Does that mean that all services, even those outsourced to private companies by the Government, will still be subject to freedom of information?
Lord McNally
That is one from left field. I will have to check on that and write to the noble Baroness. However, as she knows, my inclinations are that, as far as possible, freedom of information should extend to all work that is conducted by the private sector, or is covered by the contractual agreement between the public and private sectors, which would allow access to information. I understand the point she makes, and will write and make the letter available to the House.
Baroness Hamwee
My Lords, the probation service is widely admired for its professionalism and general excellence. What ideas do the Government have to make sure that we not only do not lose those but indeed capitalise on them?
Lord McNally
My Lords, at no stage—either at this Dispatch Box, in private meetings or in any other meetings elsewhere—have I ever said anything other than that I am in awe of the work that our probation officers do. It will remain a matter of concern that we get the balance right between our public probation service and the new ideas, initiatives and ways of doing things that we hope this rehabilitation revolution will bring about. I personally hope that one of the outcomes of this rehabilitation revolution will be a probation service that is enhanced in public respect and public confidence. Indeed, I would look to the day when we have a chartered institute for probation, with the same kind of professional status as other professions.
Lord Elystan-Morgan
My Lords, the Minister speaks of a new way of doing things. Is it not the case that when legislation was passing through Parliament, we were told that certain bonuses of a financial nature would be paid to those supervising the system, based on success? Will there be an aliquot penalty in the case of failure? In the case of success, what will be the indices of performance in respect of which success will be judged and at what level?
Lord McNally
My Lords, part of the exercise is what is roughly called “payment by results” for those that take on these undertakings if they manage to achieve a rehabilitation, which means people not reoffending within a specific time. Part of the problem we face is that nearly half of offenders leaving prison reoffend within one year. We hope that the system will incentivise those providing services to think creatively about rehabilitation. The worst thing for victims and the taxpayer is this revolving door, which successive Administrations are faced with and which, I believe, the rehabilitation proposals we are bringing in give us a real chance of breaking into.
Referendums
(11 years, 2 months ago)
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Baroness Quin
To ask Her Majesty’s Government whether they are considering further legislation concerning the holding of referendums in the United Kingdom.
Lord Wallace of Saltaire
My Lords, the Government believe that the legislative framework set out in the Political Parties, Elections and Referendums Act 2000 has worked well. We have no immediate plans to amend this framework. Each referendum held under the Act, however, requires its own separate primary legislation to set the date and question, and to make any other necessary technical changes.
Baroness Quin
My Lords, as many with long memories will know, the first national referendum on Europe in 1975 had quite a lot to do with tackling internal divisions on Europe within the Labour Party. Now it seems that we are to have a referendum on Europe principally for party management reasons as the Prime Minister seeks to appease his party critics. Does the Minister think that this is a satisfactory way of deciding on referendums? If not, will he heed the report of the Constitution Committee of this House, which advised Governments against holding referendums for ad hoc tactical reasons and advised building up a wider political consensus about when and if they should be used?
Lord Wallace of Saltaire
My Lords, I had indeed reread that section of the Constitution Committee’s report, which said, as the noble Baroness has remarked,
“we regret the ad hoc manner in which referendums have been used, often as a tactical device, by the government of the day … Where possible, cross-party agreement should be sought as to the circumstances in which it is appropriate for referendums to be used”.
Let us hope that we can reach cross-party agreement on such matters in the future.
Lord Tyler
My Lords, given the precedent of the Scottish independence referendum next year, is it now the Government’s position that any future national referendum with long-term consequences should extend the franchise to 16 and 17 year-olds?
Lord Wallace of Saltaire
My Lords, we have debated this before and I do not want to go too far down this road. The Scots have decided that for this one referendum they would like to extend the vote to 16 and 17 year- olds. No doubt we will discuss time and again how much further that should be extended.
Lord Foulkes of Cumnock
My Lords, has the Minister read the article by our friend, the noble Lord, Lord Hennessy, in the Tablet? In it he reveals that the Cabinet has taken two decisions: first, a wise decision not to have any pre-negotiations with the Scottish Government in advance of the referendum; and secondly, what is in my view an unwise decision not to have any contingency plans to deal with the situation in all our areas of concern if the referendum gives a yes vote. Will he ask his colleagues in the Cabinet to reconsider this? We will all be fighting to ensure that there is a no vote, but in the unlikely but unfortunate event of a yes vote, we have to be ready to deal with the consequences.
Lord Wallace of Saltaire
My Lords, I congratulate the noble Lord on the catholicity of his tastes in reading. I had indeed read that article because the noble Lord, Lord Hennessy, was kind enough to give it to me.
Lord Hamilton of Epsom
My Lords, as it was a Liberal Democrat commitment to have a referendum on Europe, surely there should not be too much difficulty for the coalition partners in agreeing that this is the way forward?
Lord Wallace of Saltaire
My Lords, we will wait to see what is in the manifestos of all the parties for the coming election. The proposal by the Prime Minister in his capacity as Conservative Party leader is to hold a referendum, after some considerable further renegotiation, in the mid-point of the next Parliament.
Lord Tomlinson
Does the noble Lord recall that we spent a long time a couple of years ago debating the extension of referenda to transfers of power to Brussels? Does he agree with my understanding that the fact that we have had no such referendum called indicates that Brussels is not always acquisitive of our powers?
Lord Wallace of Saltaire
My Lords, I vaguely remember some discussions on the subject. The question of whether we are heading towards treaty change is not primarily a matter for Brussels; it is much more a matter for different national Governments. The opinions of the French, German and Polish Governments and others weigh very heavily in this.
Lord Taverne
My Lords, will the Minister recommend to his colleagues in the Government the address of Edmund Burke to the electors of Bristol, its comments on the role of Members of Parliament and its relevance to the current addiction to referendums?
Lord Wallace of Saltaire
My Lords, I am surprised that the noble Lord has not also called in aid Mrs Thatcher’s comment in the mid-1970s on the dangers of sliding from parliamentary democracy to plebiscitary democracy. Our political system depends on the principle of parliamentary sovereignty and that is something that we have to cling to.
Lord Pearson of Rannoch
My Lords, further to the supplementary question of the noble Baroness, Lady Quin, does the Minister agree that opinion polls consistently show that more than 80% of the British people want a referendum on our membership of the European Union? Perhaps that should be of some significance even to our present political establishment.
Lord Wallace of Saltaire
I am glad that the noble Lord is such a man of the people in all these respects. I recall that, three months before the 1975 referendum, opinion polls were overwhelmingly in favour of leaving, but that, in the course of the campaign, opinion was informed and thus altered.
Lord Grocott
While we are reflecting on the wisdom of the British people, would the Minister like to reflect on some very successful referendums that have been held in the past two or three years: first, on the good sense of the public in rejecting any notion of a fancy new electoral system for Westminster parliamentary elections; and secondly, on nine out of 10 British cities rejecting fancy directly elected mayors? On the basis of this, might it be a good idea to hold just one more referendum, on deciding whether the elections to the European Parliament next year should be on the basis of first past the post?
Lord Wallace of Saltaire
My Lords, the noble Lord, as always, demonstrates what a splendid conservative he is on all matters of constitutional reform.
EU: Eurozone Financial Transaction Tax
(11 years, 2 months ago)
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Lord Willoughby de Broke
To ask Her Majesty’s Government what assessment they have made of the effect on the United Kingdom financial services industry of the Eurozone financial transaction tax recently proposed by the European Commission.
Lord Newby
My Lords, on 14 February, the European Commission published a proposal for the implementation of a financial transaction tax through enhanced co-operation. The UK has the largest financial sector in the EU. The Government oppose the European Commission’s initial proposal for an EU-wide financial transaction tax and the UK will not be participating in an FTT introduced through enhanced co-operation by a group of member states. We are currently studying the draft proposal carefully to understand its impacts and will continue to engage fully in discussions going forward.
Lord Willoughby de Broke
My Lords, I am grateful to the Minister for that Answer as far as it goes, but, reading the newspapers and the Commission’s proposals, I believe that the United Kingdom will be affected. Can the Minister confirm that UK tax policy is made in Parliament and not by the European Commission and a gaggle of member states which are jealous of the City’s pre-eminence in financial services? What actions will the Government take to protect our special interests in this matter?
Lord Newby
My Lords, as I said in my original Answer, we are fully engaged in discussions going forward. If the FTT is introduced, it will have a number of impacts on the UK. The Government are in the process of assessing what those impacts might be.
Lord Forsyth of Drumlean
My Lords, can my noble friend tell us how much the European Commission expects the tax to raise? Will it not be pensioners and consumers who have to pay it?
Lord Newby
My Lords, the estimate that the Commission has produced is that the tax would raise €35 billion. It would not be raised from all financial institutions across the EU; it would be raised only from those established in countries which levy the tax. A tax such as this, which covers things like shares, trickles down through multifarious channels but, obviously, at the end of the day, a very large number of people end up paying a small amount towards it.
Lord Barnett
If the treaty eventually proposes a tax that would affect this country, will the Minister make it clear that we would veto it?
Lord Newby
My Lords, the noble Lord needs to understand the difference between a tax which we would levy, where there is a veto, and a tax which we would help collect, of which there are a number of existing examples in EU law and this would be another.
Baroness Wheatcroft
My Lords, does my noble friend agree that a tax which was to some extent a deterrent on frequent trading—for instance, algorithmic trading—might not be such a bad thing if it encouraged long-term investment in shares?
Lord Newby
My Lords, I am sure that many noble Lords share that aim. The question is whether such a tax would have that impact, and the academic work on it is ambiguous at best.
Lord Eatwell
Will the noble Lord explain why the Government are so allergic to the financial transaction tax, which is to be levied at less than 1% of the value of transactions and by many countries, whereas we are quite happy to have stamp duty levied on transactions at 5%, which is effective only here in the UK?
Lord Newby
My Lords, we have some examples of where this kind of thing has been done in the past. In 1989, Sweden introduced its version of an FTT and in the first week the volume of bond trading fell by 85%, even though the tax rate was only 0.003%. The volume of futures trading fell by 98% and the options trading market disappeared. Not surprisingly, Sweden is not now supporting the idea of a Europe-wide FTT.
Baroness Kramer
My Lords, the original concept of the financial transaction tax was that it would be global and that the funds would be used to assist the developing world. Have the British Government considered that, as many politicians on all sides support those concepts, they might take leadership in this global role, which might strengthen their hand in these much more parochial negotiations with the European Union?
Lord Newby
My Lords, the noble Baroness will recall that in 2011 the French Government proposed such a tax at a global level in G20 and there was widespread opposition to it from, among others, the US, China, Australia and Canada. Sadly, there is nowhere near a global consensus on whether such a tax is a good idea, and, equally, there is no consensus, even within the EU, about where the money should go. The French were, and are, keen that at least part of the proceeds should go to development aid, but the Germans, for example, propose that any receipts from the FTT should simply go into the central tax pot.
Lord Lea of Crondall
Given the behavioural crisis in many of the financial institutions in recent years, would the Government not be well advised to discuss the merits of such taxation around Europe, rather than reacting like Pavlov’s dog to anything just because it comes from Brussels?
Lord Newby
My Lords, we are engaged in discussions on this tax as it could have significant impacts not just on the City but across the EU. While the Government are not opposed in principle to a global FTT, with the lack of consensus on such a thing and faced with a proposal which we think could be damaging not just to the UK but to Europe as a whole, we are rather sceptical about it.
Lord Pearson of Rannoch
How do New York and other financial centres react to the international reach of this particular piece of EU lunacy?
Lord Newby
My Lords, as far as I am aware, New York has not yet responded to the most recent Commission proposals.
Health and Social Care Act
(11 years, 2 months ago)
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The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, I shall now repeat as a Statement the answer to an Urgent Question given in another place by my honourable friend the Minister for care services earlier today on the National Health Service (Procurement, Patient Choice and Competition) Regulations 2013. The Statement is as follows:
“I know that the right honourable gentleman and others have raised concerns about the effect of the regulations, and I would like to address these. First, however, I would like to make it absolutely clear that the regulations must be fully in line with the assurances given to this House during the passage of the Health and Social Care Bill.
The former Secretary of State said to clinical commissioning groups in 2012 that,
‘commissioners, and not the secretary of state, and not the regulators, should decide when and how competition should be used to serve patient interests’.
This absolutely must be the case. I made it clear in health Questions last week that we would review the regulations to ensure that this is the case and that they are not open to any misinterpretation.
The right honourable gentleman himself gave guidance to primary care trusts, which made it clear, in 2010—and again I quote:
‘Where there is only one capable provider for a particular bundle of services or the objective of the procurement is to secure services to meet an immediate interim clinical need there will be a case for Single Tender Action (ie uncontested procurement). By definition, an immediate’—
or urgent—
‘scenario will be exceptional and likely to only … arise on clinical safety grounds or, for example, where existing services have been suspended following intervention by the Care Quality Commission’.
The next bit is very important:
‘A decision to procure through a single tender action should always take account of the potential to secure better value by investing in a competitive process, as long as this is justified by the scale and importance of the opportunity (ie it has to be worth it)’.
As we committed in the Government’s response to the Future Forum report, we want to ensure that the regulations simply continue this approach. However, I fully recognise that the wording of the regulations has inadvertently created confusion and generated significant concerns about their effect. I have therefore listened to people’s concerns and my department is acting quickly to improve the drafting so that there can be no doubt that the regulations go no further than the previous set of Principles and Rules, inherited from the previous Labour Government. As we also committed in response to the Future Forum’s report, the Co-operation and Competition Panel has been transferred to Monitor and this will ensure consistency in the application of the rules.
Concerns have been raised that commissioners would need to tender all services. This is not our intention and we will amend the regulations to remove any doubt that this is the case and to clarify that the position remains the same as at present—and as stated in the former Secretary of State’s letters in 2012. Concerns have been raised that Monitor would use the regulations to force commissioners to competitively tender. However, I recognise that the wording of the regulations has created uncertainty and we will therefore amend them to put this beyond doubt.
Concerns have also been raised that competition would be allowed to trump integration and co-operation. The Future Forum recognised that competition and integration are not mutually exclusive. Competition, as the Government made clear during the passage of the Bill, can only be a means to improving services for patients, not an end in itself. What is important is what is in patients’ best interests. Where this is co-operation and integration there would be nothing in the regulations to prevent this. Integration is a key tool that commissioners are under a duty to use to improve services for patients. We will amend the regulations to make this point absolutely clear”.
My Lords, that concludes the Statement.
Baroness Wheeler
My Lords, I thank the Minister for reading out the response to the Urgent Question in another place. While we welcome the climbdown on the regulations, can he appreciate the sheer disbelief and consternation across the House at the regulations, coming as they do after the recent SI on local Healthwatch that even the Government’s own supporters described as complex, draconian and muddled? These regulations flew directly in the face of lengthy and repeated government assurances about Healthwatch’s independence and right to campaign. Now we have a repeat of the story with the Section 75 regulations, which again made a mockery of the assurances by both Commons and Lords Ministers during the passage of the Health and Social Care Act. In the words of the Minister, GP commissioning would be,
“under no legal obligation to create new markets, particularly where competition would not be effective in driving high standards and value for patients”.—[Official Report, 6/3/12; col.1691.]
As the Francis report made clear, GPs must exploit their new role as commissioners to the full to ensure that their patients get safe and effective care. How will care be safe and effective if the coalition’s competition policy on the NHS is in chaos? Despite all the upheavals inflicted on the NHS, there is still no clarity in policy. The Government’s U-turn is clearly a response to Labour’s fatal Motion. The writing is on the wall for their plans to marketise the NHS. Why did it take this Motion to make the Government think again?
Finally, can the Minister outline to the House the sequence of events going forward? Can he confirm that the Government cannot in fact withdraw the current regulations but must lay additional regulations to annul or amend the mess we are now in? When will the new regulations be laid and when will the House have a chance to consider them?
Earl Howe
My Lords, first, I understand perfectly the anxiety that has been voiced about the way the regulations are worded. This is a problem centring in almost every respect on legal drafting. Our intention and our instructions have been as they always have: to create a set of regulations—as expected under the terms of the Act, as the noble Baroness knows—which reflect in every way the assurances given by Ministers during the passage of the Health and Social Care Act, no more and no less.
However, to the lay reader, certain parts of the regulations which, in legal terms, do as they were intended appear not to do so. We took very seriously the fact that perception differed from reality—perceptions matter—and therefore, early last week, I put in train a programme of work to revise the regulations. However, we also determined that we could not come to Parliament with half a story and that we would have to present our fully formed response to the concerns by tabling a set of revised regulations. We were not in a position to do that until this week. It was therefore not the case that the Opposition’s Motion forced us into this position. I was well aware that we had to respond to the concerns voiced not only in this House but in the wider healthcare community.
The noble Baroness said that she thought our competition policy lacked clarity. Our competition policy is based on competition law as it now appears and as it was during the previous Administration. There is no question of our changing that. The idea that we are trying to marketise the NHS is, as the noble Baroness knows, not true. In the Health and Social Care Act, we included a specific provision which prevents the Secretary of State or anyone else preferring independent sector providers over the NHS. That was something which the previous Government did not see fit to do.
The noble Baroness asked me what the programme ahead looked like. We intend to revoke the current regulations and substitute regulations with amended wording within a few days.
Baroness Jolly
My Lords, I thank my noble friend for meeting Members from these Benches on this issue nearly two weeks ago. Will he confirm for the House that, in line with assurances given during the course of the Bill last year, the regulations will promote integration of services in the best interest of patients?
Earl Howe
I think that everybody was agreed during the passage of the Health and Social Care Bill that we wish to encourage integration in the way that services are commissioned. Integration in this context should be taken as a term that reflects the experience of the patient. The patient has to feel that he or she is on a seamless pathway of care. That care may be provided by a number of agencies, if necessary, whether in the NHS or social care, but the patient’s experience should not be disjointed. Therefore, as my noble friend will remember, numerous provisions were inserted into what is now the Act to ensure that commissioning should be on that basis. Nothing in these regulations interferes with that, but it is very much in our minds to make it crystal clear that integration of services is one of the main factors which commissioners should take into account.
Baroness Morgan of Drefelin
My Lords, can the Minister reassure the House that the new draft regulations are consulted on before they are tabled—very swiftly, I am sure—to safeguard against misinterpretation again by lay audiences? Perhaps a very swift consultation programme could be developed with stakeholder organisations, royal colleges, patient groups, and so on, so that we can avoid the misunderstanding to which the noble Earl refers.
Earl Howe
I intend to meet some of the royal colleges, and I have met one already. I do not feel that a full-scale consultation is appropriate because the Government’s policy has not changed. It is the wording of the regulations that has given rise to anxiety. I therefore think that, having taken on board, as I hope I have, all the concerns that have been raised, a clarification of the regulations is all that is necessary and there is no need to consult on the policy yet again.
Lord Harris of Haringey
My Lords, is it not the case that the Government have form on producing regulations that are virtually incomprehensible as far as the lay reader is concerned, particularly in respect of these health service changes? We had the incident with Healthwatch only a few weeks ago. Even though there is a short timescale, is it therefore not imperative that there is proper consultation to make sure that whatever emerges reflects the very fine and helpful words that the Minister has given us this afternoon? Will he also tell us whether Ministers ever read these draft regulations before they are laid before the House?
Earl Howe
My Lords, it is my intention to issue an invitation to noble Lords to join me in a meeting so that we can discuss these matters. I am very happy to do that over the coming days. The answer to the second question is yes. We read these regulations in conjunction with the Explanatory Memorandum and the line-by-line interpretation that we have also published in this case which make it crystal clear that these regulations do no more and no less than reflect the law and the Government’s policy. However, others have chosen to misinterpret the regulations, and that was something that I could not predict.
Lord Warner
The Minister may know that I do not always see totally eye to eye with all my colleagues on these Benches on the subject of competition. Will he say how much discussion there has been with the voluntary sector and social entrepreneurs on these regulations? In my experience they have always struggled to make their presence felt when contracts are available within the NHS.
Earl Howe
My Lords, the department consulted on its proposals for these regulations between August and October last year on the basis of the commitments that had previously been given. All sectors had an opportunity to feed in their comments. Our proposals for the regulations did not give rise to any anxieties at that time.
Lord Whitty
My Lords, the Minister should have been made aware of the concern I expressed the other night in relation to the reference to Monitor in the Enterprise and Regulatory Reform Bill and to its supervision by the proposed Competition and Markets Authority which seems to some of us to introduce by the back door a situation where the CMA would override Monitor, making, in effect, competition trump integration and co-operation. Will he now advise the noble Viscount, Lord Younger, to delete the reference to Monitor in that Bill?
Earl Howe
My Lords, I took the opportunity to read the noble Lord’s comments a few days ago, and I am grateful to him for them. He will be receiving a communication in a few days’ time to clarify this issue. I thank him for raising it. The short answer to his question is that it is not our intention for competition to trump integration.
Damages-Based Agreements Regulations 2013
(11 years, 2 months ago)
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Lord McNally
That the draft regulations and orders laid before the House on 14 and 21 January be approved.
Relevant documents: 16th and 17th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 26 February.
Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) (Amendment) (England) Order 2013
Baroness Hanham
That the draft orders and regulations laid before the House on 14 and 22 January be approved.
Relevant documents: 16th and 17th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 28 February.
Presumption of Death Bill
(11 years, 2 months ago)
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Lord Wallace of Saltaire
My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Presumption of Death Bill, has consented to place her interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Mobile Homes Bill
Armed Forces: Army Basing Plan
(11 years, 2 months ago)
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The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, with the leave of the House I will now repeat a Statement made in the other place.
“With permission, Mr Speaker, I would like to make a Statement on the future basing of the British Army. To assist honourable and right honourable Members in understanding the detail of the changes I shall announce and the effects on their constituencies, I have placed in the Libraries of both Houses and on the MoD website documents setting them out. Copies are, with your permission Mr Speaker, being distributed in the Chamber.
In 2010, we set out in the strategic defence and security review the configuration of forces that the UK would require to meet future threats and we committed to have completed the return of UK troops from Germany by 2020. Last summer, I announced to the House the structure of the Regular Army component of Future Force 2020. Today, I can announce the future pattern of basing of the Regular Army in the UK so that our service men and women, their families and the communities that host Army units have clarity about where they will be based in the future and when moves are likely to occur.
As the House will recall, in July 2011 the then Defence Secretary set out our initial plans for the future of the MoD estate on which we will accommodate, train and prepare our Armed Forces. Those plans have been significantly refined over the intervening 18 months and reflect the fully developed military advice on the optimum affordable basing lay down to accommodate the Army in its future structure.
This announcement honours our commitment to bring all our troops home from Germany by 2020, with all but 4,400 of 20 Brigade home by Christmas 2016. It supports the Army 2020 structure, the integrated reserves training model and the generation of the Army’s future military capability. It delivers a £1.8 billion investment in the UK economy in infrastructure and accommodation and annual savings of £240 million in reduced costs and improved efficiency of training and maintenance operations, on top of the £100 million-plus annual saving generated by the previously announced moves from Germany.
The return of the British Army from Germany marks the end of an era and I want to put on record the huge debt of gratitude we owe to the German Government and the German people for the support, both moral and material, they have shown our Armed Forces over more than six decades. In fact, that return has already begun. In 2010, there were 20,000 British service personnel based in Germany together with their dependants and civilian staff. Already, that figure has been reduced to less than 16,000, with significant force elements having already relocated, such as the Headquarters Allied Rapid Reaction Corps, which has moved to Innsworth, Gloucestershire.
Planning for completion of the return is well advanced. We are on track to reduce our presence in Germany by more than 70% by 2015, against our SDSR target of 50%. The long-term retention of a small training presence in Germany, utilising NATO training facilities, is under consideration, but we will be closing all major unit locations. But this is not just about rebasing the Army from Germany. It is about providing a basing plan for Army 2020 in the UK, which will allow the Army to generate its military capability in the optimal way.
As the plan has developed, two key principles have emerged to inform it. First, the armoured infantry brigades of the reaction force should coalesce around a single location. We have concluded that Salisbury Plain Training Area is the only place in the country where we have the capability to carry out the complex and demanding training exercises they need to conduct. Having all three brigades located in close proximity around the plain will enable them to train and fight more effectively, and will present significant opportunities for efficiency in equipment support and people management. Secondly, the Army should retain a UK-wide footprint, maintaining the vital link to civil society, fostering closer links between reserve units and their partnered regular units and supporting nationwide recruitment and engagement.
Guided by these two principles, the Army has identified the laydown that represents the best value for money, both in terms of utilisation of existing estate and in terms of minimisation of running costs. The focus will be on increasing consolidation around seven centres at: Salisbury Plain Training Area, where we will invest over £800 million; north-east England, centred on Catterick; Aldershot; Edinburgh and Leuchars; Colchester and Swanton Morley; Stafford and Donnington; and, in the east Midlands, focused on Cottesmore and North Luffenham, where £180 million will be invested—all while maintaining a regional presence in other parts of the country. Consolidating around these seven centres will significantly reduce the need for moves, giving Army personnel and their families greater certainty about where they will live and work, with real benefits in terms of increased stability, access to long-term spousal employment opportunities, continuity in schooling and the chance to set down roots and access the benefits of home ownership.
This announcement will maintain the broad pattern of Army activity in Scotland, Wales and Northern Ireland. With 45 Commando Royal Marines remaining in Arbroath for the foreseeable future, the measures announced today will see an increase of about 600-plus in total regular Armed Forces numbers north of the border as against the July 2011 baseline, even as the Armed Forces reduce in size by about 17% overall. In both Wales and Northern Ireland, overall numbers will reduce by approximately 400.
This announcement sets out our firm plans for the laydown of the British Army, subject of course to gaining the necessary planning, environmental and other regulatory approvals. They are underpinned by a capital investment from the defence budget of £1.8 billion, including £1 billion of investment in new living accommodation to provide 7,800 single living spaces and 1,900 new and refurbished units of family accommodation. This investment will provide a welcome stimulus to the UK construction industry and, taken together with significant purchasing power currently going into the German economy that will be diverted to the UK, will help create jobs across the regions and nations of the UK.
The MoD plays a major role in the Government’s public land release programme and will be looking to release additional land and surplus service family accommodation where it is no longer needed. Under this plan, the Armed Forces will leave a number of locations. The disposal plans will be subject to further detailed work and will be subject to the completion of the plans for the reserve estate in due course. However, I can confirm that we plan to dispose of Howe Barracks in Canterbury, Claro Barracks in Ripon and parts of Copthorne Barracks in Shrewsbury. In Scotland, we will be disposing of Craigiehall Barracks, as well as elements of Redford Barracks and Forthside Barracks, Stirling. Kirknewton will not now be developed as an Army base but Dreghorn will remain as one.
The MoD intends to close Cawdor Barracks at Brawdy in Wales, which is no longer fit for purpose, with 14 Signal Regiment relocating to St Athan, not before 2018, as part of a regional consolidation of the defence presence on that site that will also allow commercial development and job creation by the Welsh Assembly Government, with whom we are working collaboratively in support of the enterprise zone. The local communities in each of these areas have been hugely supportive of the military presence over many years. The loss of historic ties will be much regretted and, on behalf of the Army, I want to thank those communities for their generous hosting.
As part of our continued scrutiny of the central London estate, we will be pursuing options to vacate Hyde Park Barracks and reprovide for the Household Cavalry Mounted Regiment elsewhere within central London, allowing for disposal of this prime development site, provided that the regiment’s requirements can be met and that it proves value for money to do so. These disposals, and other planned disposals, will bring substantial receipts which have already been factored into the MoD’s future budgets and will significantly reduce the operating costs of the MoD estate.
I have focused today on the future basing of the Regular Army, but I am conscious that many honourable and right honourable Members will also be interested in the reserves and in our plans for reserve basing, as well as the future basing plans for the other services, the training estate and logistics operations. My right honourable friend the Minister for the Armed Forces will be making announcements shortly concerning other routine changes elsewhere in the MoD estate across the UK, and I will update the House before the Summer Recess on the future basing plans for the reserves.
This announcement represents a costed and funded plan to bring our Army back from Germany, deliver the basing laydown for Army 2020 and provide the accommodation our troops deserve, fulfilling our commitments to consolidate the Army estate and providing certainty to Army personnel and their families about where they will be based in the future. It is a plan that is driven by the Army’s requirement to generate military capability in the most effective and efficient way as it reconfigures for contingent operations based almost entirely in the UK. It represents a significant step towards the achievement of Future Force 2020, delivers substantial savings to defence in the future and a significant boost to the UK economy, and to the construction industry in particular, right now.
I commend this Statement to the House”.
My Lords, that concludes the Statement.
Lord Rosser
My Lords, I thank the Minister for repeating the Statement made earlier in the other place by the Secretary of State on the next, but hardly controversial, stage of one half of the coalition Government’s withdrawal of troops from Europe. We welcome a steady, costed withdrawal of UK troops from Germany. Today’s announcement will impact on Army deployability, our ability to meet planning assumptions, service families’ livelihoods, and the integration of service personnel with local communities.
Before asking some detailed questions on how to make these measures successful, I will refer to previous Statements on the basing plan. The 2010 Strategic Defence and Security Review referred to the redeployment back to the United Kingdom of British Forces personnel currently based in Germany. It also referred to reconfiguring the Army into five multirole brigades. Approximately half of the then 20,000 personnel serving in Germany were expected to be relocated back to the United Kingdom by 2015, and the remainder by 2020.
Following the SDSR, the Ministry of Defence undertook a basing review, the conclusions of which were announced by the Secretary of State in July 2011. Under the plans announced then, RAF Kinloss would be transferred to the Army, with some of the personnel returning from Germany being based at Kinloss from 2014-15. RAF Leuchars was also to be transferred to the Army, with two major units and a formation HQ being redeployed to that site from Germany. The HQ was expected to move to Leuchars before 2015, followed by the two units between 2015 and 2017. RAF Cottesmore was to be vacated by the RAF, with the Army expected to start moving in in 2013.
The five multirole brigades envisaged under the strategic defence and security review were to be located in and around Catterick and Salisbury, in eastern England largely at the former RAF base at Cottesmore, and in Scotland, largely in Kirknewton, south-west of Edinburgh. The multirole brigades in eastern England and Scotland were to be largely formed from units returning from Germany. According to the July 2011 Statement, it was expected that approximately 6,500 to 7,000 Army personnel currently in Germany would be based in Scotland. It was also expected that units returning from Germany would move into bases in Aldergrove in 2015, and that further units returning from Germany would relocate to Pirbright barracks during the course of this year.
In November 2011, the Ministry of Defence announced the first tranche of moves that would take place in 2012 and the first half of 2013 as part of the defence rebasing programme, with the first tranche including 1,800 personnel returning from Germany. I mention all that because I want the Minister to clarify the extent to which the proposed moves and timescales announced today are in line with previous announcements and Statements on the basing review and on the redeployment back to the United Kingdom of British forces personnel currently based in Germany. Where there have been any changes, will he explain what those changes are, including changes in timing, and the reasons for them, as that is not entirely clear from the Statement made in the other place by the Secretary of State for Defence?
The Secretary of State in the other place also said, and, indeed, repeated in the Statement, that the total cost of returning troops from Germany is £1.8 billion. Will the Minister spell out specifically where this money has been found and say whether any cuts to the Ministry of Defence non-equipment budget are being made as a result of having to find this money? All those in the military who have recently lost their jobs will want to know that today’s announcement has not been funded at their expense. Likewise, will the Minister say how much is allocated for each RAF base being converted to make them fit for the Army, and in each case when the conversion will be completed?
I would like to refer to the Armed Forces Covenant Annual Report 2012 because it contained the following observations by external members of the covenant reference group. It stated:
“Notwithstanding the fact that work on the New Employment Model (which will include accommodation) is on-going, we urge the Government to produce a transparent assessment of the impact of the freeze both on the condition of accommodation and on how the needs of Armed Forces personnel and their families are being met, particularly given the imminent relocation of our Forces from Germany”.
It is also worth reminding ourselves of the comments by the Armed Forces Pay Review Body in its 2012 report. It stated:
“Against the background of wider changes and uncertainty, accommodation remains high on the list of concerns for Service personnel and their families. We hear repeated concerns during our visits and from the Service Families’ Federations, ranging from practical issues about the lack of choice in allocations and variable maintenance performance in different locations to policy issues on the definition of the family. … On our visits Service personnel and their families often commented on the allocations process for Service Family Accommodation (SFA). Lack of information and choice ahead of moving to a new unit were often mentioned as issues of concern”.
The pay review body went on to express concern at receiving,
“poorly evidenced proposals from MOD to address its perception that the ‘subsidy’ to Service families has become too high”.
The pay review body went on to comment:
“The evidence we received from MOD was driven by the perceived need to reduce the difference between MOD’s spending on Service accommodation and its rental receipts. It did not give sufficient consideration to the human aspect of housing or the role of accommodation in the overall package for personnel”.
In the light of those comments from the pay review body and the Armed Forces Covenant Annual Report, including observations by the external members of the Covenant Reference Group, in relation to accommodation, rents and the apparent gap between income and expenditure, can the Minister say whether Armed Forces personnel and their families returning from Germany will be faced with attempts by the Ministry of Defence to secure significant increases in rents for accommodation provided for them in this country? What steps are being taken to address the other concerns on accommodation, to which I have referred and have been highlighted by the pay review body, in the light of the moves back from Germany? Clearly, accommodation is a significant issue for Armed Forces personnel. The quotes that I have mentioned are not mine but are contained in the Armed Forces Covenant Annual Report 2012 and the pay review body report for 2012. It would be helpful to have the Government’s response, bearing in mind that a significant part of the success of the moves back from Germany will be dependent on the quality, extent, variety and cost of accommodation provided for our Armed Forces personnel who are moving back.
What efforts will the Ministry of Defence be making to give personnel returning from Germany the opportunity to purchase their own homes, which I know is an objective of the MoD? It would be helpful if the Minister could say a little more on that score. Can we also be assured that the accommodation provided in the UK will be of comparable size to the accommodation in Germany? I know that this might sound like a detail but, to the families, that would not be the case if it went wrong. If the accommodation is not of comparable size, there could be logistical issues such as existing furniture not being able to fit into the new accommodation. I am sure that some warm words—I hope more than warm words—of clarification on that point would be extremely helpful.
Most of my comments are directed towards the moves back from Germany. Can the Minister give a guarantee that no one returning will be forced to take expensive private rented accommodation? What are the anticipated costs of education and healthcare provision for Armed Forces personnel and their families returning to this country, bearing in mind that they are likely to be concentrated, as I understand from the Statement, in a relatively small number of locations? Will the cost of education and healthcare fall on the defence budget or education and health departmental budgets, and those of the devolved Administrations? I ask that particularly in relation to the reductions in the amount of money that local authorities have. Bearing in mind that those returning are moving back to a relatively small number of locations, what will be the impact on existing schools? If new schools are required, will they be local authority schools, academies or free schools, and who will make such decisions?
Will the decisions on where to base personnel—the biggest group that we are talking about is coming back from Germany—lead to an even greater concentration of our Armed Forces in a limited number of locations, largely in the south of England? Given that that appears to be the case, subject to what the Minister says in reply, will that have any adverse impact on recruitment into our Armed Forces from other parts of the country, particularly when the economy picks up and those seeking employment have a wider choice of job opportunities?
Will it also be the case that, with the withdrawal of our Armed Forces from Germany, the expenditure on the costs of such a move will have to be financed well in advance of any savings or other financial benefits being realised? The noble Lord referred to costs and he also referred to savings, but he did not refer to timescales. If it is the case that the costs have to be borne well before the savings are achieved, what would be the cash-flow implications for the Ministry of Defence budget? May I also ask that, in withdrawing from Germany—
Lord Rosser
Are we faced with any penalty or other payments as a result or are we able to withdraw from the accommodation sites we currently occupy in Germany at any time we choose without incurring any penalty or other charges?
I am sure from the comments that have just been made that your Lordships will appreciate the fact that I am about to conclude. UK troops have been stationed in Germany for almost 70 years. We support their return home, but this will be matched, on our part, by detailed scrutiny. I hope the Minister will be able further to outline the implications of today’s announcement for personnel and their families as well as for local communities which, I am sure, will give our returning troops a warm and patriotic welcome.
Lord Astor of Hever
My Lords, I am grateful for the noble Lord’s welcome for a steady, costed withdrawal from Germany. I wrote as fast as I could, but I am afraid that I could not keep up with all of the noble Lord’s questions. I will do my best to answer as many as I can, but I undertake to write to him as soon as possible.
The noble Lord referred to previous Statements, particularly the July 2011 Statement. As the Defence Secretary said, today’s announcement presents an updated plan for the British Army which is built on where necessary, just as the plan announced in 2011. The further work we have carried out in the interim has refined the Army’s requirements and further identified value-for-money in our planning. It has sought out incremental savings and operational synergies in the way the Army operates.
The noble Lord particularly mentioned Scotland and the previous Secretary of State’s announcement in July 2011. The plans set out two years ago were on the basis of the Army operating a multirole brigade structure, but under Army 2020, published last year, the Army announced a significant change in its structure based on two key elements: reaction force brigades, centred on Salisbury Plain, and adaptable force brigades, based on regional headquarters. We will have an adaptable force brigade in Scotland, but it would not make sense to split the reactive force brigades between Salisbury Plain and Scotland, especially as we would need to purchase an additional training area in Scotland. Nevertheless, today’s announcement strengthens the Army’s presence in Scotland and implies an increase in the number of Armed Forces personnel based there of roughly 600 above the levels at the time of Dr Fox’s July 2011 announcement. This is a visible sign of our commitment to Scotland and to Scotland’s continual vital contribution and role in the United Kingdom’s defence.
The noble Lord asked me about the £1.8 billion expenditure and where it comes from. I can confirm that it comes from the capital budget and will not be at the expense of any redundancies. The point to remember is that it will deliver substantial savings from 2015 onwards.
The noble Lord asked me about RAF bases. We will be spending a lot of money both at former RAF Cottesmore and at RAF Leuchars. I do not have all the information at hand, and anyway, we are subject to contractual agreements, so I would not be able to give the noble Lord the figures. I will write to him in the best possible way that I can.
The noble Lord referred to the Armed Forces covenant and the pay body report. The Army has always looked to minimise effects on families of unit moves by ensuring that, where possible, any necessary moves are timed to allow personnel the ability to manage issues such as schooling and healthcare as easily as possible. While moving a great many Army families initially, this basing plan will give our personnel and their families greater long-term stability where they are based. This will allow them to integrate into the local community, their spouses to find long-term jobs and their children to have continuity in their education. Following the complete delivery of the plan, it is envisaged that the majority of units will not need to move again in the near future. The noble Lord asked me whether we are encouraging members of the Army and the Armed Forces to buy their properties. We are certainly doing that.
I can give the noble Lord confirmation that to the best of my knowledge no members of the Army will have to go into private rented accommodation. We are taking a great deal of trouble in working this out. Those members of the Army coming back from Germany will have suitable, adequate accommodation to move into with their families. We will consult the relevant government departments, local authorities and devolved Administrations about education and health. While the department recognises that the increase in personnel in some areas will increase demand on local services, many of the changes—for instance, Salisbury Plain—will not take place until the second half of the decade, which will allow time for resources to be appropriately redirected. Obviously, the education and health costs will fall on these local authorities but it is my understanding that they very much welcome these units moving into their areas.
The noble Lord mentioned Germany. We are very sad to be leaving Germany. I add to what the Secretary of State said in thanking the authorities there very much for all that they have done over the past six decades. I can confirm that the Secretary of State spoke yesterday to his German counterpart who, while being very sad, quite understands the reasons for us moving.
I think that that addresses most of the noble Lord’s questions. I know that there are a lot of unanswered ones and I undertake to write to him.
Viscount Slim
The Minister made mention of training areas. To train an army properly with its ground-air support, great dedication must be given to the hours of darkness and night training. This always causes consternation among local government, various bodies and nearby inhabitants. What are the Government doing to ensure that night training is not sanctioned in any way in its most modern form today so that our military can consider and take part in proper night training within the United Kingdom? If we do not allow constant night training of our Regular Forces and Reserve Forces of all three services, we will not have much of an Army.
Lord Astor of Hever
My Lords, it is my understanding that a good deal of night training takes place in different training areas, such as Salisbury Plain, Otterburn in Northumberland and in Wales. We hope to keep the NATO training area in Germany after we move the rest of the Army out. Troops go to Alberta, Canada, for night training and to other countries, of which the noble Viscount is aware, including jungle training in Brunei.
Lord Palmer of Childs Hill
My Lords, last year in your Lordships’ House, as regards housing for the Army, I said:
“The bad news is that there will be a three-year pause in the improvements programme from April 2013”.—[Official Report, 23/4/12; col. GC 278.]
That related to the report of the Armed Forces pay review body. We owe it to our soldiers to provide good and decent accommodation. Will the Minister confirm that we are doing that and how it fits into the earlier statement about having a pause in improvements in April 2013? Can he also say whether the £1 billion funding for housing in the Statement will not lead to calls for further cuts in welfare benefits?
Lord Astor of Hever
My Lords, I quite agree with my noble friend that we owe members of our Armed Forces decent accommodation, and we are going to considerable lengths to ensure that that happens. As I said in the Statement, we are spending £1 billion to provide some 1,900 new service family accommodation units and some 7,800 single living accommodation bed spaces. The intention is that the living conditions of those returning will be comparable to those of UK troops based in Britain and that the return of units from Germany to the UK will provide greater stability for the soldiers and the families involved.
I am afraid that I have forgotten the second part of my noble friend’s question, but this money is pretty much ring-fenced for accommodation. It will not be at the expense of other areas.
Lord Moonie
My Lords, the Minister will be well aware that any development such as this is a compromise between the need to save money and the need to maintain the footprint of the Armed Forces throughout the United Kingdom. What account has been taken of the difficulties that we appear to be experiencing in recruiting, particularly to the Reserve Forces, when Scotland, for example, is one of the major areas that we would hope to be recruiting from? This could be seen as a disappointment in that the footprint in Scotland will not be expanded as greatly as was originally thought.
I hope the Minister will forgive me a parochial point. Have the Government taken into account the availability of the Barry Buddon training area just across the estuary from Leuchars in deciding which units would be based there?
Lord Astor of Hever
My Lords, I cannot answer the noble Lord’s last question. I am sure that it was looked into but I will check. We are aware of the recruiting issue, particularly for the reserves. As the noble Lord knows, we have done a lot of work on the reserves and trying to build up recruiting. There will be a White Paper on recruiting for the reserves and I hope to make a Statement on that issue before the Summer Recess.
The Lord Bishop of Ripon and Leeds
My Lords, the Minister will recognise that those of us who come from Yorkshire will have mixed feelings about the Statement and since both Catterick and Ripon are in my patch, I share those feelings. On the one hand, so far as my experience at Catterick is concerned, I very much welcome the emphasis in the Statement on spousal opportunities for work, home ownership and continuity of schooling. Will the Minister reaffirm that individual soldiers and their families will be spending longer periods of time at a single base? That is what is necessary. It is not simply that they will return from Germany, but that they will spend a significant amount of time at one base in this country, which has often not been the case in the past.
On the other hand, the damage to Ripon of the closure of Claro barracks will be substantial in terms of the economic effect, friendships and the pride of the city. I have no doubt that that will be the same for other places where barracks are being closed. What support will be available to local communities, especially in comparatively small places such as Ripon, in order that those effects may be mitigated for the whole community in which those barracks are set?
Lord Astor of Hever
My Lords, I can confirm to the right reverend Prelate that our objective is to have units based in similar locations for a much longer period of time so that wives can be encouraged to get jobs and children will have continuity of education. We have set out in this basic plan, which I hope noble Lords have with copies of the Statement, all the different places where the units coming back from Germany are going to. I accept that there is a lot to digest in this and I am organising a briefing in the Ministry of Defence on 19 March. All the members of the Armed Forces and the civil servants who have been working on the plan will be there to explain everything to noble Lords. Indeed, noble Lords who do not normally come into the MoD are welcome to come along, and I would very much welcome the right reverend Prelate. We will be able to discuss the support that we are planning to give to all the local communities, in particular the smaller ones.
Lord Dannatt
My Lords, I welcome the Statement that the Minister has just repeated about the future basing of the Army and the answer he gave earlier that the money involved, the capital investment, will be ring-fenced. I assume that the Minister meant that the £1.8 billion should be ring-fenced, which I very much welcome. Army basing is one of the areas of doubt that now may well have been clarified. Of course, doubt is what reduces morale in the Armed Forces, but redundancy is another issue hanging over many members of the Army at present. While I accept that the basing policy now brings more clarity to where the Army is going to live, can the Minister tell us when the new employment model will be made known to members of the Army so that they know how they are going to live?
Lord Astor of Hever
My Lords, I was referring to the £1 billion which my noble friend asked me about; that is being spent on accommodation. The noble Lord mentioned morale and I quite agree about how important accommodation is to the morale of the members of our Armed Forces. I spend quite a lot of time looking at the accommodation for the three services and I do all I can to ensure that it is being upgraded. Likewise, the noble Lord mentioned basing. We are doing everything possible to pass messages on to members of the Armed Forces and their families so that they know exactly where they stand. The feedback I have been given suggests that it has been very well received by the Army.
Lord Selkirk of Douglas
Can my noble friend give an estimate of how long the transitional arrangements will take in respect of RAF Leuchars? Also, can he give an assurance that the runway will be kept operational in the mean time?
Lord Astor of Hever
My Lords, I can confirm for my noble friend that the runway at Leuchars will be kept in operation. I think that a university air squadron is based there and will continue to use it. Once the Typhoons have moved up to RAF Lossiemouth, we would want it as a failsafe runway for Lossiemouth.
Lord Davies of Stamford
My Lords, it is the wrong decision to bring back the Army from Germany at present, and to do so at very considerable cost. The Minister mentioned the figure of £1.8 billion. That would have been enough to have kept Nimrod going, to have maintained a Harrier strike force and to have bought all 22 Chinooks. The Government have demonstrated a very perverse order of priorities in this decision. It also deprives the Army of the training opportunities available in Germany which are much more extensive than Salisbury Plain, as the Minister knows very well, and of course of the opportunity for close collaboration in Germany with the Bundeswehr and the American army units stationed there, so it was the wrong decision. However, perhaps I may ask the Minister for a figure that he has not given. What is the estimate of the incremental costs in the future of flying our troops for training in Germany, Canada or in other places where they need more extensive training grounds—a need that would not have arisen had we maintained our position in Germany?
Lord Astor of Hever
My Lords, I am sorry that the noble Lord always finds something wrong with the announcements I make, but he forgets the very difficult financial situation that we inherited. I would point out that although we are spending a certain amount of money on bringing our troops back from Germany, huge savings of at least £240 million a year will be made from there on. I would much rather see the money spent in this country than in Germany.
Lord Burnett
My Lords, the Statement confirms that 45 Commando Royal Marines will remain at RM Condor in Arbroath. The marines of 45 Commando are this country’s specialists in mountain and arctic warfare. Arbroath has swift access to training areas in the Cairngorm mountains and is close to NATO’s northern flank. Since the war, 45 Commando has deployed with great distinction these important specialist skills on operations in the Troodos mountains in Cyprus, the Radfan mountains in Aden, and more recently in Afghanistan. Does my noble friend agree that this decision will be good for the Royal Marines and their families, for our defence capabilities—including recruitment —and also for Scotland?
Lord Astor of Hever
My Lords, I agree with everything that my noble friend says about the Royal Marines. The Secretary of State was telling me last night how impressed he was when he visited them on winter training in Norway earlier this week. I agree with my noble friend that remaining in Arbroath will be good for the Royal Marines and for their families. As I said earlier, 45 Commando Royal Marines will remain in Arbroath for the foreseeable future. We investigated the feasibility of the move to the south-west but that option did not, at this stage, represent value for money and Arbroath is not needed for Army basing in Scotland. It is my understanding, as my noble friend said, that 45 Commando is very happy with this decision.
Lord Hamilton of Epsom
My Lords, I noticed that the Statement includes a proposal to sell off Hyde Park barracks, presumably because it is so incredibly valuable. Does my noble friend have any idea where the Household Cavalry would go if that was done?
Lord Astor of Hever
My Lords, that is a difficult question for me to answer. Of course, if the Household Cavalry Mounted Regiment was ordered to leave, it would have to go. However, as the Statement made clear, a lot of research needs to be done before it can move out. Suitable barracks would need to be found within the centre of London for it to move to, with all the costing worked out. It would be very complicated, but we would be irresponsible not to look into it.
Baroness Dean of Thornton-le-Fylde
I thank the Minister for the Statement, particularly for covering the continual running sore—as the Armed Forces Pay Review Body report this year confirms yet again—of accommodation. Is he confident that the new and refurbished housing will be ready for our troops and their families when they come home, knowing that this will have to go through the public procurement process—I presume—and knowing about the delay after delay that such processes in the MoD seem to attract? What processes have been set up to consult with the services families organisations? Accommodation is a problem but there is also the linked problem of an influx of young families requiring more school places, to go on lists for local doctors and dentists, and hospital accommodation, which was not mentioned in the Statement. What processes are in place to deal with that and to ensure that when these families come back, those facilities are there for them? Finally, how does this impact on the covenant, which we have all welcomed and which is important in the life of servicepeople?
Lord Astor of Hever
My Lords, we are of course well aware of the covenant and do everything we possibly can to stick by it. When I was in opposition, I went with the noble Baroness to visit quite a lot of accommodation. In the last two years we have done a lot of work on accommodation, as did the previous Government at the end, and it is hugely different now to three years ago. The level of Army accommodation is catching up with the Navy’s and the Air Force’s and, on the whole, is really good. I am very much looking forward to going down to Salisbury Plain, I hope next month, to see what has been done there recently and what the plans are. We are in discussion with Wiltshire Council about the very issues that the noble Baroness raises—hospitals, schools and all the others. These are issues that we have to deal with, but all the local authorities and the devolved Governments that we have been in touch with very much welcome the Army moving into their area.
The Earl of Erroll
Perhaps I might ask the Minister, in a slightly light-hearted way: if Scotland becomes independent will those troops stationed north of the border become part of the “Scottish Army”? If it does not, what does that do to his pronouncements about long-term stability and how they will not all get moved around?
Lord Astor of Hever
My Lords, the noble Earl asks a very good question. The creation of independent Scottish armed forces would not be as simple as transferring existing Scottish-recruited or Scotland-based units. The UK Armed Forces are a totally integrated, pan-UK organisation and parts cannot simply be broken off like bits of a chocolate bar. Individual members of the UK Armed Forces could not simply be co-opted. They would have to be given a choice and it is far from clear that Scots in the UK Armed Forces, or members of units recruited or based in Scotland, would automatically choose to join the armed forces of an independent Scotland. The prospect of being part of smaller, less globally active armed forces might be seen as less rewarding for some.
Lord Dannatt
With the indulgence of the House and an eye on the clock, perhaps I may ask the Minister a second question, given that my earlier question about the new employment model still hangs. I raised the issue of morale a moment or two ago. The capability of the Army is obviously very critical and its future capability is based on the integration of the Reserve Forces with the Regular Forces, about which this basing report is concerned today. When will we know the Reserve Forces basing plan? Clearly, successful delivery of our Reserve Forces is absolutely critical to the future capability of the Army, given that the Regular Army is being cut by 20%, which is unprecedented in recent times.
Lord Astor of Hever
My Lords, I can confirm to the noble Lord that there is a lot of work going on at the moment on the Reserve Forces basing plan and how that ties in with the Regular Army. As I said earlier, there will be a White Paper quite soon and I hope very much to give a Statement on this very important subject before the Summer Recess.
Welfare Benefits Up-rating Bill
(11 years, 2 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
“Duty on the Secretary of State
Before enactment, the Secretary of State shall lay before both Houses of Parliament a report which states—(a) his assessment of the adequacy of the social security benefits listed in Schedule 1;(b) the principles upon which the future up-rating of all benefits and tax credits covered by this Act will be based.”
Baroness Lister of Burtersett
My Lords, Amendment 11 is in part inspired by the speech made by the right reverend Prelate the Bishop of Leicester at Second Reading. He suggested that this was an occasion for considering,
“the moral responsibility of this House”,
and warned that this Bill,
“looks like part of an ideologically motivated attempt to alter the very nature of the welfare state”.—[Official Report, 11/2/13; col. 469.]
He voiced his fear that we are heading towards a US-style system, where pensions are protected,
“but working-age provision is less generous and more stigmatised, barely providing enough for people to live on without relying on charitable handouts”,
and asked:
“Is this really the kind of society that we want to live in?”.—[Official Report, 11/2/13; col. 471.]
It certainly is not the kind of society in which I want to live.
The purpose of this amendment is to facilitate a debate on that fundamental question of the generosity of benefits for working-age people and their children. The first part addresses the question of whether the social security benefits affected by this nasty Bill are adequate in the first place, and the second the principles that should govern the uprating of benefits in the future once the Bill’s provisions have ceased to have effect. Of course, the two questions are related because the current level of benefit reflects uprating policies over the years.
As the House of Commons Library briefing notes:
“It is a misconception that benefit rates in the UK are based on some regular, systematic estimate of minimum needs”.
In fact, they are not even based on an irregular systemic estimate, for as the briefing points out,
“no government has … attempted any official empirical study of adequacy”,
since a covert study undertaken by the National Assistance Board back in the 1960s, despite countless fundamental reviews of social security, which some of us have lived through to tell the tale.
There are various indicators that we can use to assess benefits’ adequacy. The most basic is whether they are sufficient to keep people out of poverty and, patently, they are not, as so many people living on benefits are in poverty if one uses the relative income and material deprivation measures. The income support received by, for example, a couple with two children or a lone parent with one child is around 30% below the poverty line. Briefings from children’s charities underline the hardship that families already experience as a result. For instance, research undertaken by Barnardo’s among its service users found that two-thirds were cutting back on fuel and half were borrowing money. Three-quarters reported that food poverty was impacting on their children’s health and well-being. Similarly, a Children’s Society survey of teachers found that nearly half of those surveyed are seeing children coming into school hungry. Recent peer research undertaken by five Gingerbread community researchers in partnership with the Poverty Alliance found many lone parents skipping meals to feed their children. As one said, “Occasionally, I’ll miss meals and things like that just to make sure that they get wee bits and pieces. It makes me feel better about them having than me having”. This is an example of a common phenomenon, where mothers deprive themselves of basics to try to protect their children against the worst impact of poverty, as they act as the shock-absorbers of poverty. It is an example, too, of a point made by the noble Baroness, Lady Howe of Idlicote, on our first day in Committee about how women are disproportionately affected by the Bill.
The most sophisticated benchmark of adequacy is the minimum income standard developed by the Joseph Rowntree Foundation. It represents what members of the public through group discussion have arrived at as the minimum acceptable standard of living: what you need in order to have the opportunities and choices necessary to participate in society. I emphasise that it is about needs, as socially determined, rather than about wants.
The latest calculations indicate that a couple with two children, or a lone parent with one child living on the basic safety net benefit of income support, receive only three-fifths of the income needed to meet the minimum income standard. A single working-age person receives only two-fifths. The researchers, who are colleagues of mine at the Centre for Research in Social Policy at Loughborough University, observe that, because increases in costs have not been adequately captured by the consumer prices index, out-of-work benefits fall even further short, providing a lower minimum income living standard for non-pensioners than they did in 2008 when the MIS was first calculated. They concluded, even before this Bill was proposed, that the gap between the incomes and needs of the worst-off households is widening, especially for families with children. While the JRF is not suggesting that benefits should be raised to the level of the MIS, the sheer scale of the shortfall is indicative of how far they fall below the decency benchmark established by members of the public.
Policy has been more successful in ensuring that pensioners can achieve minimum income standards, which is of course a good thing, but according to Professor Jonathan Bradshaw, the decision to uprate pensions by 2.5% and working-age benefits by 1% for three years is going to exacerbate further the absurd differentials in benefit rates that have developed over time. In 1948, a single pensioner received only 10p more than a single person on national assistance. Now, a single female receives £71 per week in jobseeker’s allowance. When they are eligible, they get £142.70 on pension credit. A lone mother with one child gets only £133.21 a week. These differentials, Professor Bradshaw says, clearly have nothing to do with need.
That brings us to the second half of the amendment, on the principles underlying uprating policies. The significance of these policies was underlined in an earlier JRF study. It pointed out that uprating policies have big effects over time. They are among the most significant decisions taken by Chancellors. Their gradual effects seem imperceptible on a year-to-year basis yet they carry immense implications for the future. This year’s decisions will certainly be perceptible, and the implications for the future are even more immense, because, whatever decision is taken by future uprating policies, they will be uprating benefits that have been significantly depressed in real terms over a three-year period.
The report called for a more open debate about this often hidden area of public policy, so that decisions that prevent the poorest members of society keeping up with rising living standards would not be taken in the dark. Unknown to most people, uprating policies have resulted in a significant erosion of relative living standards among benefit recipients over most of the past three decades. Recently, this has been exacerbated by the use of CPI rather than RPI as the measure of inflation, particularly during the period when prices of necessities that represent a disproportionate share of spending among benefit recipients have risen faster than prices generally—a point that we made on the first day in Committee. As Donald Hirsch of the Centre for Research in Social Policy comments, in this context, the index used to uprate benefits has become a highly imperfect mechanism for preserving their real value and a rather arbitrary means of raising benefits by an amount that politicians feel that the country can afford rather than of protecting living standards.
Of course, assessments of affordability cannot be ignored. They can also be contested, as we are doing in relation to this Bill, but looking to the future I agree with Donald Hirsch that there is a need to establish principles linking benefit uprating to some stable concept of what is fair, rather than just ad hoc decisions about what can be afforded. He suggested that, as a start, this might involve reasserting the principle of human decency whereby the real value of benefits is genuinely protected and that, in the longer term, if prosperity starts to grow again, we need to consider how those in greatest need can share in such growth.
I suggest that a report to Parliament that addresses these fundamental questions is the least that we can ask of a Secretary of State willing to preside over a deliberate reduction in the living standards of the most deprived members of our community. I beg to move.
The Lord Bishop of Ripon and Leeds
My Lords, I have put down my name in support of the amendment and am very grateful to the noble Baroness, Lady Lister, for her tabling of it and for her powerful advocacy of it. I have done so because I am repeatedly told by citizens advice bureaux and the like of the uncertainty which is being introduced by this Bill. It is ironic that we have talked so much of certainty in setting the rates for the years up to 2015-16, when those on benefit and providing advice feel uncertain as to its short and long-term effects.
So long as benefits have been uprated by inflation, it has been possible to budget taking them into account. But this cap on uprating is a major and apparently long-term change to the whole principle of our benefit system. Recipients and those who work with them are owed an explanation. I am not looking for commitments from either Front Bench beyond 2015, but I would be very grateful for comment from both of them on whether this is to be seen as a temporary reduction with the aim of restoring benefit values after 2016 so that we ensure a decent living standard for those on benefit—the requirement that has been so ably put by the noble Baroness, Lady Lister. Or is this actually a permanent reduction to a lower level, which will then be stabilised in real terms after 2016, or a continuation of a gradual reduction expected to continue after 2016? None of those options is desirable, but they are very different in the effect that they will have, and a sense of purpose and direction from the Government and Opposition is important in all this. It is important to know just where benefits are anticipated to be going in future, both from the opposition and the government Front Bench. I hope that they can supply that in the debate on this amendment.
Lord Kirkwood of Kirkhope
My Lords, I will make just a short intervention on this amendment so ably moved by the noble Baroness, Lady Lister. I entirely concur with her view and analysis. I want to add, however, the fact that I am now very frightened about what is happening in the short term. There is a complacent view held among policymakers generally that the Work Programme and universal credit are all that need be done. I support both, and will not cast any aspersions on any Governments or make any party political points, but both these important reforms will take at least 10 years to go into steady state and be of assistance to our most hard-pressed, low-income households in the United Kingdom.
If I am right about that, and about the prognosis for the United Kingdom’s level of economy over that period, we face a really difficult period of activity where we cannot rely safely on the Work Programme and universal credit to provide the social protection that this country needs and expects. We need to do something in the short term that seeks to understand what is going on. More than anything else, this is a plea for really rigorous and urgent monitoring of everything going on: every bit of evidence from every constituent part of the United Kingdom. We need to watch carefully what is happening. The noble Baroness is quite right: malnutrition of children will result over the next five to 10 years if we are not extremely careful.
Now, this is no one’s fault. I understand perfectly well the need to get austerity and deficit reduction properly balanced in the nation’s future policy at a financial and fiscal level. But nobody could have foreseen the difficulties or longevity of the recession, or the lack of growth that this country will have to deal with in the short term of five to 10 years. That does not seem like a long time and I do not take anything away from the long-term need to get universal credit and the Work Programme put together and rolled out, but nobody is paying enough attention to what is going on in the short term.
If you refer to the sensible policy professionals who look at this, the Joseph Rowntree Foundation is first among them and there is the work by Loughborough University, Professor Jonathan Bradshaw, and all these experts. We have better professionals in the United Kingdom than any other European country. I say that because I have worked with most of them for the best part of 25 years. The noble Baroness is one of them— she nodded at that point. This is a serious point: we have internationally recognised experts on this yet we are deaf to what they say to us. A growing body of opinion says that something different and more than what has been put in the policy framework to date needs to be done to be sure that we do not face levels of financial adversity with which the public will not be comfortable.
I know that there is a view that people are against welfare spend and we have had discussions over the Welfare Reform Act and this Bill about the language used nationally in the public discourse on this important area of public policy. It is important because £200,000 million a year is spent and it is still creating problems. We need to face up to that. We need to have a much more adult discussion about what is going on.
Certainly, concepts such as the minimum income standards need to be part of that discussion. We need to look at the cumulative effect of everything that has happened since 2010 that has made the circumstances dramatically worse. People know that I am a professional, paid-up pessimist—I accept that—but we have to be very careful about how we assess the evidence.
I want to make a couple of quick suggestions about how we might deal with that in conjunction with looking at the principles in the long and short term and how we perform the monitoring and evaluation. What is happening in the devolved legislatures of the United Kingdom is very important. There are positive responses in Wales, and in Scotland, which I know best, where the need is recognised. We must first promote the need to do things differently. That may mean financing food banks—that is not something that I want, but if the alternative is malnutrition in children, we cannot ignore that. It is easier in smaller countries which have shorter lines of communication and a smaller scale. They can move more flexibly and faster. Working with the legislatures in Cardiff and Edinburgh, I think that there are some quick wins that central Government could help to promote. I hope that we will do that and keep the channels of communication between London and the constituent legislatures throughout the rest of the United Kingdom open and dialogue promoted urgently.
As the second part of that, working with local authorities will be so important. The evidence coming back from housing authorities, particularly in local authorities, presents variable geometry—we are getting different messages from different parts of the country. There is a spatial dimension to some of these issues which we should not ignore. In the past, we have always safely relied on a centralised, unified United Kingdom social security process as the right thing to do. I have less confidence about that working in the next five to 10 years. We need to look much more carefully at how housing and labour markets are aligned in some regions of our United Kingdom and be sensitive to changes happening in those fields.
I think that we need a short-term anti-poverty strategy. The principles covered by the amendment of the noble Baroness are important and must be kept in mind for the longer term, but all my instincts tell me that the next three, five or seven years will be difficult in a way that nobody has previously been able to get a grip on. If we do not respond to that by looking at some of the ideas contained in the amendment, we will pay a heavy price in terms of child poverty, in particular. We have an important amendment coming up next on that subject, and I hope that we will think carefully about that as well.
In strongly supporting the concept behind the amendment, I would like the Committee to consider not just the longer and medium term but some of the emergency state provisions that we as a country will be forced to face over the next five to 10 years.
Baroness Sherlock
My Lords, this has been an interesting brief debate, introduced by my noble friend Lady Lister with her now characteristic blend of expertise and passion. I am sure that we are all grateful to her for opening up the question so well. The quotes that she shared with the Committee about children arriving hungry at school and mothers missing meals and going without themselves to protect their children from the effects of poverty were, on one level, not a surprise to any of us, but they are still shocking. They should be profoundly shocking.
I found the point made by the right reverend Prelate very interesting and I understand why he would like those assurances from both sides of the Committee. My noble friend Lord McKenzie of Luton made Labour’s position clear at the beginning of our first day in Committee. It is this: if we were in government right now, we would be uprating benefits in line with inflation. However, we cannot make a commitment at this stage for the next Parliament. My view is that that is not a good idea anyway. We are fundamentally opposed to the whole principle in the Bill of fixing the levels of uprating for a period. We have perfectly good mechanisms for uprating benefits annually in line with inflation in the light of prevailing economic circumstances. To be honest, I would not want to be tempted into anything other than maintaining that position, but I fully understand why the right reverend Prelate is pressing the concerns that he is pressing.
I also found the comments made by the noble Lord, Lord Kirkwood of Kirkhope, very interesting. He drew in the spatial dimensions of poverty and the wide-ranging regional issues. That is something that we may come back to. I particularly agreed with his point about the need to monitor what is going on. The next amendment that I shall move encourages the Government to look specifically at the impact on child poverty. I also support the noble Lord’s point about the need for a cumulative assessment of all the changes between 2010 and now—a point made very strongly by my noble friend Lady Hollis at earlier stages of debate.
Since the Bill cannot help but drive down standards of living for families, what assessment have the Government made of the likely impact on the well-being of the poorest adults and children of what is effectively a real-terms cut in benefits and tax credits, not just over the year ahead, but over the three years covered by the first uprating and the two years of this Bill? It would be very helpful to the Committee to understand what assessment the Government have made. At a time when three new food banks are opening every week and even families in work are finding it a struggle to make ends meet, the state needs to take particular care to demonstrate that resources are gathered and distributed in a way that is fair to everyone. In the light of that, I shall be very interested to hear what the Minister has to say.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Baroness, Lady Lister, for moving this amendment and explaining her thinking. Of course, I recognise the serious issues that she and other noble Lords have raised during the course of this debate. I would not claim first-hand experience of living on benefits, so I do not bring to this debate any presumption about those on benefits finding what we are doing anything other than difficult, but is an inescapable fact that when setting benefit levels successive Governments have sought to strike a balance between the needs of claimants, maintaining work incentives and affordability.
Indeed, the current uprating legislation recognises this explicitly. The Social Security Administration Act 1992 requires the Secretary of State to make his annual review of benefit levels based on the increase in prices. He is then given discretion as to how to uprate certain benefits, having regard to the national economic situation and any other matters that he considers relevant. Parliament therefore requires the Secretary of State to take certain issues into account when considering the level at which the benefits in question are set. In bringing forward this Bill, we have considered these issues carefully and struck a balance between providing a cash increase, protecting certain key benefits and making necessary savings.
Benefit levels also have a significant bearing on work incentives. The complexity of the current system largely arises from successive Governments’ attempts to balance benefit income against work incentives. That is why universal credit is such an important measure as it applies a single set of rules focused on maintaining the incentive to take up work or more work. In response to some of the points made in this debate, I shall say something that I know is shared around the Committee. This Government believe that work is the best route out of poverty, and that is why we are focused on making sure that work pays.
Baroness Hollis of Heigham
Would the Minister agree that the last increase she mentioned has come about by increasing the additional cuts that people will have to face as a result of the bedroom tax?
Baroness Sherlock
I am sure the Minister is aware that the IFS analysed the distributional impact of tax and benefit changes between January 2010 and April 2015 as if universal credit were fully in place. It modelled the real-terms changes in household income at today’s prices with all the measures announced and UC fully implemented. It suggests that a one-earner couple with children will be £64 a week worse off. How does that equate to what she is saying?
Baroness Stowell of Beeston
I have laid out for the Committee the measures that are there and have been put forward by the Treasury. The noble Baroness wants to put forward some alternative statistics. Let me get back to the point I was making about the arrangements that are being put in place to ensure that, when we move into the implementation phase, support is available for those who need it, if there are any people who are not properly covered by the changes that we are making.
The noble Lord, Lord Kirkwood, referred to local authorities when he was talking about this. The local authorities and the Scottish and Welsh Governments would get £178 million to deliver new local welfare provision. They will develop local schemes to help those facing a crisis or short-term unavailable need. On the arrangements for people moving from weekly receipt of payments to monthly receipt, a whole range of different programmes is being put in place to support people in budgeting and making sure that they have the support that they need to manage the changes that are being brought about—changes that we believe will have the right effect in ensuring that this is a much simpler and more effective welfare system.
The noble Lord, Lord Kirkwood, and the noble Baroness, Lady Sherlock, also referred in this context to food banks. I point out to noble Lords that one reason why there has been an increase in the use of food banks is because the Government were clear that we wanted Jobcentre Plus advisers to be able to signpost their availability to claimants. For reasons that noble Lords on the other side of the House will presumably be able to explain, this was not possible before. The Trussell Trust director has said that he thinks that there has been a need there for a while, but the growth in the number of volunteers and the awareness that you can get this help if you need it explains the growth in this area.
Lord Martin of Springburn
Is it not a sad day when a government Minister has to stand up and say that food banks will be made available? Our children should not have to depend on food banks in this day and age.
Baroness Stowell of Beeston
It is a sad fact that people should have to rely on food banks; I absolutely acknowledge that point and do not dispute it at all. The point I am making to the Committee is that Jobcentre Plus staff are now permitted to signpost the fact that they are available, whereas previously they were not permitted to do so. I am not suggesting that the fact that they exist is to be applauded at all, but it would be wrong for Jobcentre Plus staff not to be able to say that they are there to people who might be able to take some advantage of them just because we do not want to make that facility known.
Baroness Farrington of Ribbleton
The Minister is speaking as though the only people using food banks are those who go to the jobcentres. Surely, from my experience and that of other noble Lords, many of the people who are now using food banks are actually in employment. As things like the bedroom tax bite, more people in employment will lose out on what benefits were available to them.
Baroness Hollis of Heigham
My Lords, to add to my noble friend’s point, my obviously localised and limited experience of food banks has been that before about 2010, in so far as they were in play, food banks were mostly drawn upon by young people. These were very often young men aged under 25 who were getting the shared rate for housing benefit in the private rented sector and found, as Shelter and others have told us over the years, that it did not match the rent they were required to pay; it was a very discrete group. They, in my localised experience, often had to turn to food banks to cope. Now the Government have extended that limitation on housing benefit from 25 to 35, while producing additional pressures right across the benefits spectrum, as my noble friend Lady Farrington has said. It is a disgraceful aspect of the fifth-richest nation in the world that so many of our people have to make recourse to food banks because our benefit system does not sustain them in the way it should.
Baroness Stowell of Beeston
My Lords, I do not for one moment suggest that food banks are something on which anybody would want to have to rely. I completely agree with the noble Baroness in that regard. My point is simply that the fact they exist—
Lord Martin of Springburn
I suggest to the Minister that we should be ashamed that this is happening. I was brought up in the 1950s in a family of the poorest of the poor, and my parents would not have dreamt of going to a food bank. All these years later, we are talking of parents and children having to go to a food bank. If this so-called facility exists, the Government should do something to eradicate the need for food banks.
Baroness Stowell of Beeston
My Lords, food banks have existed for a long time. They have not been introduced in recent times—that was the point I tried to make by quoting the director of the Trussell Trust. I am not trying to make any point about this whatever. I do not for one moment suggest that anybody in this House should feel anything other than great disappointment that anybody should have to use a food bank. I am making a simple point. All noble Lords have been clear about their views, and certainly I am not here to disagree with the arguments they made. Let me move on.
The noble Baroness, Lady Lister, while accepting the need to strike a balance, argued none the less that a report into the adequacy of benefit levels would be useful, as it would help people better understand where benefit incomes sit in relation to the rest of society, and so would help inform the debate. This approach relies on the idea that we could produce figures that would concretely situate benefit incomes in relation to an objective adequate level. The desire to draw conclusions on the adequacy of benefit levels has always been fraught with technical difficulties. In 1985, the then Government looked at this issue and concluded that,
“it is doubtful whether an attempt to establish an objective standard of adequacy would be fruitful … all such assessments would themselves include judgements on the standards to be achieved”.
This view was echoed in the previous Labour Government’s consultation exercise on measuring child poverty, which concluded that,
“despite a wide range of research into budget standards, there is no simple answer to the question of what level of income is adequate … Different research methods tend to make different assumptions that are essentially subjective”.
Similarly, during her time as Minister at the Department for Work and Pensions, the right honourable Margaret Hodge said, when asked what assessment the Government had made of the minimum income a household needed to live on:
“Our concerns about research on minimum income standards have been well documented. What people need to live on varies greatly depending on their needs and a range of factors. Different research methods tend to make different assumptions and generate a range of estimates”.—[Official Report, Commons, 7/2/06; col. 1163W.]
The noble Baroness, Lady Lister, also raised the issue of minimum income standards, and suggested that this metric could be used as a measure of benefit adequacy. We will continue to take note and look carefully at the evidence from research on minimum income standards. However, I do not believe that minimum income standards provide an appropriate comparator when considering the adequacy of benefit rates.
The Joseph Rowntree Foundation’s minimum income standard is a relatively new metric—the first report was in 2008—and there is no international consensus on how this should relate to setting benefit standards. Minimum income standards are informed by public perception so can change even if prices do not. For example, the rate for a couple with two children increased by a third between 2008 and last year—more than twice the rate of inflation. Moreover, it is important to remember that most working-age benefits are intended to provide temporary support during periods of interruption to employment, whereas the minimum income standard is focused on more long-term living standards. The Bill does not, of course, affect long-term benefits, such as those paid to pensioners or those relating to additional needs arising from disability.
Baroness Hollis of Heigham
My Lords, the Minister seems to imply throughout her speeches that there is a distinction between those receiving benefits and those who are in work, and that you have to maintain that gap to produce work incentives. That seems to be her argument. However, she knows that two-thirds of the current expenditure on housing benefit and tax credits goes to people in work on the minimum wage to make that wage adequate to enable them and their families to survive. Therefore, will she please refrain from talking about the need to maintain work incentives when the only way that there is an incentive to work is when it is underpinned by benefits?
Baroness Stowell of Beeston
With the introduction of universal credit, we will make sure that that is always the case. Therefore, I do not disagree with the noble Baroness at all.
The noble Baroness, Lady Lister, referred to the Government’s decision to move from RPI to CPI as the appropriate index of inflation. The Government believe that CPI is a more appropriate measure than RPI when considering the impact of inflation on benefits and pensions. It is worth saying that the judicial review of the switch from RPI to CPI found in the Government’s favour and we continue to believe that CPI is a more appropriate index. As an example of the costs involved, uprating the benefits and payments in this Bill by earnings would reduce the savings by £1.8 billion of the total of £1.9 billion in 2015-16 and, if we did so by RPI, would wipe out all the savings and cost an additional £700 million in 2015-16.
As regards paragraph (b) of the amendment, while I cannot predict the decisions that will be made by future Governments, once the provisions in the current Bill cease to have effect, the default position will be for uprating decisions to be made in line with pre-existing legislation.
In referring noble Lords to the comments made by the noble Lord, Lord McKenzie, during last week’s debate, I was going to mention his reluctance to say what his party would do if it was in government. Indeed, he was even more than reluctant; he refused to say what it would do. However, the noble Baroness, Lady Sherlock, has commented on that point today.
For social security benefits and statutory payments, the default position will be for uprating decisions to be made under Section 150 of the Social Security Administration Act 1992, meaning that the Secretary of State will make an annual review of benefit levels to see whether they have kept pace with the increase in the general level of prices. If prices have increased, he will then make a decision about how he should uprate the benefits covered by the Bill, based on the national economic situation and other factors he considers relevant. For tax credits, the default position is that the Treasury is required under Section 41 of the Tax Credits Act 2002 to review the amounts of certain elements of tax credits each year to determine whether they have retained their value in relation to the general level of prices.
Before I conclude, I refer to the question put by the noble Baroness, Lady Sherlock, about an assessment of the changes that we are making via this Bill on the well-being of adults and children. In response—and it was a point that I made in Committee last week—this Government publish cumulative impacts of government policy at every major fiscal event. We did so at the time of the Autumn Statement last year. Those assessments include the effects of any changes in welfare and ensure that the other positive measures being introduced in relation to tax rates and so on are taken into account. That represents an increase in transparency when compared with what was in place hitherto. The assessments are publicly available on the Treasury’s website.
This has clearly been a serious debate and I am grateful for the opportunity to respond. I hope that in future debates I am able to expand a little further on some of my comments because I am concerned that in some of my points I was not as clear as I intended to be. I will ensure that when I speak in later debates I am much clearer about the importance we place on ensuring that proper consideration and monitoring are taking place in the implementation of all these changes. If any additional measures are required to support people who are affected in a way that goes beyond that which we are expecting, we will make sure that they have the support they need.
The Lord Bishop of Ripon and Leeds
My Lords, following the Minister’s final comments, can I check that the default position after 2015-16 will be that there would be CPI increases based on the lower level that benefits will have reached by then?
Baroness Stowell of Beeston
It will be based on the benefits that exist at that time.
Baroness Lister of Burtersett
I start by thanking the right reverend Prelate the Bishop of Ripon and Leeds for supporting the amendment so powerfully. He asked for a sense of direction. I fear that we have a sense of direction but it is not one that either the right reverend Prelate or I feel happy about. I thank the noble Lord, Lord Kirkwood, who, as ever, has brought important issues to light. I also thank my noble friend Lady Sherlock who again made a powerful speech. I also thank the Minister, whose attempt to deal with the issues raised by the amendment I acknowledge and appreciate. She was given rather a hard time but I am sure that she will understand because people feel strongly about the implications of the Bill and the effect it will have on benefits. I should like to address a number of her points.
First, my noble friend Lady Hollis picked the Minister up on this mantra that work is the best route out of poverty. Of course we all agree with that, except that work is not always the best route out of poverty because some people are going to work and are in poverty. As well as the point made by my noble friend, there seems to be an assumption that if we depress benefit levels we are somehow making it more likely that we will push people into paid work. I always remember work on lone-parent families carried out by another poverty guru, Alan Marsh of the Policy Studies Institute. He pointed to evidence that,
“a malign spiral of hardship, poor health and low morale … builds up its own barriers to work”.
He found that those in severe hardship were three to four times more likely to suffer low morale, compared with those who were not in hardship. He very wisely commented:
“It is quite hard to contemplate work if you are that demoralised and hard up”.
That is why we must not assume that keeping benefits low is necessarily going to improve work incentives.
The Minister made a point that I found quite chilling. She said: “It has never been the intention to alleviate poverty through benefit payment”. That is not my understanding: I thought that the whole point of benefits was to try to alleviate poverty. I am dismayed by that statement.
Baroness Stowell of Beeston
What I said was that we believed it was misguided to try to lift people over the 60%-of-median-income line through benefit increases alone, because this would not change their lives or their children’s since it would not tackle the reason they found themselves in poverty in the first place.
Baroness Lister of Burtersett
I accept that, but I wrote down what the noble Baroness said. She said: “It has never been the intention to alleviate poverty through benefit payment”. I wrote it down. If she wants to retract that statement, I would be delighted.
Baroness Hollis of Heigham
I think it was at the point when the Minister said that unemployment benefits were only intended to be temporary while people were in between work, and that therefore they were never expected to address poverty as such. That is the problem that we are worried about.
Baroness Stowell of Beeston
This is a debate about the adequacy of benefit rates, not about benefits in a package of what people receive. The difference here is that if somebody is in receipt of a combination of different benefits—housing benefit, jobseeker’s allowance and so on—I can absolutely see the point that the noble Baroness is making. What I am saying in the context of a debate about how to set the rate of a benefit is that benefits alone do not alleviate poverty.
Baroness Lister of Burtersett
I thank the Minister for her clarification. I think I can take it that it is not the Government’s position that benefits are not there to alleviate poverty; I hope that is right. The noble Baroness must remember that not everybody can take the route into paid work: there are some people of working age who will be on benefits for a considerable length of time and we cannot just say, “Oh well, they don’t matter”.
There was quite a lot of discussion about food banks. It just so happened that I chaired a meeting the other week for a group called Just Fair, where the director of the Trussell Trust was speaking. He pointed out the exponential increase in the number of food banks over recent years. The increase is huge. That meeting was addressed by the UN rapporteur on the right to food. He made it very clear that he did not see food banks as any kind of solution to the problem of food poverty. I accept that the Minister was not saying that she was happy about the spread of food banks, but I think she was, perhaps, underplaying the extent to which they have spread recently. I do not think it is simply because Jobcentre Plus is now acting as a signpost.
I was disappointed that the noble Baroness was referring back to quotes from 1985 about the difficulties of establishing the adequacy of benefits. Research has become a lot more sophisticated since then and there is a growing consensus—although clearly not on those Benches—around the work done on minimum income standards. When my noble friend Lady Sherlock asked about impact, I do not think she was asking for the same kind of impact statement that we have been talking about—the numbers and so forth. She was asking for an impact on well-being. Local authorities are now supposed to address the well-being of everyone in their areas. What impact is this Bill—together with all the other things that are happening—going to have on the well-being of children and their parents? This goes back to what the noble Lord, Lord Kirkwood, was saying about monitoring. Monitoring is not simply about numbers: it is about what it is going to mean to the lives of some of the most deprived members of our community.
I am disappointed that the Minister is not prepared to accept an amendment which is not about spending money; it is about trying to let us better understand the principles that should govern our social security system when times are easier. However, I beg leave to withdraw the amendment.
Baroness Sherlock
“Assessment of impact on child poverty
The Secretary of State shall, in making the orders referred to in sections 1(1) and 2(1), publish and lay before Parliament a report assessing the impact of the order on the number of children living in—(a) relative low income;(b) combined low income and material deprivation;(c) absolute low income;(d) persistent poverty;as defined in the Child Poverty Act 2010.”
Baroness Sherlock
My Lords, Amendment 12 is in my name and that of my noble friend Lord McKenzie of Luton. This amendment would require the Secretary of State to publish and lay before Parliament a report assessing the impact of the order on the number of children living in the four measures of child poverty set out in the Child Poverty Act; namely, relative low income, combined low income and material deprivation, absolute low income, and persistent poverty. The aim is very simple. It is to force the Government to face up to the consequences of their actions and to come clean about the impact of these measures on child poverty.
I am sure that the Minister is closely familiar with the coalition agreement. I know that I read it regularly, so I expect no less of him. My favourite bit is paragraph 14, the first bullet point of which reads:
“We will maintain the goal of ending child poverty in the UK by 2020”.
That is rather lovely and has a beauty in its simplicity. I will repeat it:
“We will maintain the goal of ending child poverty in the UK by 2020”.
In keeping with that commitment, the Government have previously published the effect on child poverty of Budgets, spending reviews and Autumn Statements. But in the last Autumn Statement we did not get the kind of detail that we were expecting. Why could that be? We got a hint in a Written Answer in another place from the honourable Esther McVey when she said:
“We estimate that the uprating measures in 2013-14, 2014-15 and 2015-16 will result in around an extra 200,000 children being deemed by this measure to be in relative income poverty compared to uprating benefits by CPI”.—[Official Report, 15/1/13; col. 716W.]
It probably is important to look at the backdrop to this. Since the goal of ending child poverty by 2020 was first announced in 1999, the UK has made real progress. Some 1.1 million children were taken out of relative child poverty between 1998-99 and 2010-11, and 2.1 million children were taken out of absolute child poverty between 1998-99 and 2010-11. But now we are going into reverse. The rise in child poverty likely to be caused by these measures is on top of a net rise in child poverty of 400,000 by 2015 and 800,000 by 2020, resulting from the Government’s current fiscal policies, as seen in the IFS analysis of 2011.
If that is right—the Institute for Fiscal Studies has a pretty good record on these things—that means a rise in child poverty of at least 1 million children under the relative low-income measure is now likely by 2020. However, the relative low-income measure is just one of the four poverty measures in the Child Poverty Act. I should like to ask the Government why Ministers have not given any figures on the number of children who will be pushed into absolute poverty by the Bill, despite the fact that the Government have the same capacity to produce an estimate on that measure as on the relative low-income measure. I look forward to hearing the answer because, as the Minister will realise, the Government have a statutory duty to reduce absolute child poverty under the Child Poverty Act. Therefore, they presumably must be able to measure it to know if they have fulfilled that statutory duty.
Similarly, the Government have given no assessment of the likely impact of the Bill on material deprivation, despite again having a statutory duty to reduce material deprivation under the Child Poverty Act. Even if Ministers did not feel able to produce a numerical estimate, I cannot see any reason why they could not produce a narrative assessment, a point made repeatedly by the Child Poverty Action Group. Finally, and at the risk of being repetitive, we have seen no assessment, not even a narrative one, of the impact of the Bill on persistent poverty, despite the fact that yet again the Government have a statutory duty to reduce persistent child poverty under the Child Poverty Act.
This really is a disgrace after all the careful progress that has been made. The reason the previous Government took child poverty so seriously was that it had risen so dramatically under the previous Conservative Government. The researcher, Jonathan Bradshaw, who has already been mentioned today, found that child poverty increased nearly threefold in the 1980s alone and that the well-being of British children compared unfavourably with that of children in most developed nations. That was the reason the Labour Government acted. It was also the reason why, by the time of the last election, there was apparently cross-party support for that goal of tackling child poverty in Britain. We are now in the position of having to ask what it means for the Government to say that they will maintain the goal of ending child poverty in the UK by 2020.
This is perhaps a philosophical point, but what does it mean to have a goal if one takes no steps towards it? I may say that I have a goal of being a concert pianist, but if I do not take lessons to learn to play the piano and I never practise, no matter how many times I say it, the odds of my becoming a concert pianist must be seen to be slim. In that case, on what basis can Ministers say they are committed to eradicating child poverty in the UK if they keep bringing forward Bills that drive it ever higher? It may be time for them to come forward and say that they do not in fact have any intention of eradicating child poverty and perhaps never did.
The amendment really is for the Government’s own good. If they are committed to the goal of ending child poverty by 2020, they need to understand the impact of their policies on child poverty. Otherwise, they cannot possibly achieve that. If they are not committed to that goal, the nation has a right to know that and still to understand what the impact of these measures would be. That is all the amendment does. It requires the Secretary of State to tell Parliament and the nation what the effect would be of these measures before he implements them. What could be more reasonable than that? I beg to move.
Lord Kirkwood of Kirkhope
My Lords, I hope to make an even shorter contribution to this important debate. I agree that the amendment relating to child poverty is apposite and important. I want to confine myself to seeking further clarification from the Minister, if she has the information to hand. It would be to the Committee’s advantage if we knew more about what we can expect from the Social Mobility and Child Poverty Commission, because it relates directly to the substance of this amendment.
I was pleased that there was a recent change to the membership of the commission and that our very own noble Baroness, Lady Shephard of Northwold, has joined it. I am pleased about that because she is an experienced hand and I trust her judgment. I look forward to seeing the fruits of her work within that commission. It is important to us all. However, I was disappointed to learn recently that the first annual report of the Social Mobility and Child Poverty Commission is not now to be with us before 26 September this year. We were expecting it in May. I make that observation because it is a sign of drift, potentially. If I am wrong about that, I hope that I will be put right.
I was very uneasy about adding social mobility to child poverty. The original terms of reference of the 2010 Bill as put forward by the noble Lord, Lord McKenzie, were the correct ones. The Deputy Prime Minister, of whom I am a great fan, as I am sure people understand, was wrong. Social mobility is a different subject altogether. It is much longer term and in the short term, we are dealing with a situation that is more of an emergency than the aspiration of social mobility, which of course we all accept. We really need to understand what contribution to child poverty this commission will make. If the Front Bench can tell us anything about that in the course of this amendment, that would be very useful.
My second point is that of course we know that there is a consultation on child poverty measurement. I am taxing my memory here, but I think we were expecting the end of the consultation to be earlier this year—some time in February. If that is the case and my memory is correct, I hope we can be told that the Government’s contribution to the further development of child poverty measurement will be vouchsafed to us sometime soon. It will certainly be important to get hold of this around the time of the Budget, if we can. Some of the Office for Budget Responsibility’s assessments of future policy in terms of the Budget should be seen against the background of the Government’s view about how they will treat child poverty measurement in the future.
I am slightly nervous about some of the things that I have been hearing are being factored into the measurement of child poverty in the future. It may be that I am misreading signals but I hope that we do not lose focus on the fact that, at the end of the day, child poverty can be addressed only with money. Regarding any attempt to dress that up and expand the measurements too widely, while I am in favour of having all the data and metrics that we can access, for the reasons I explained on the last amendment we are facing an emergency situation the extent of which I did not anticipate.
The difficulties are mounting up, as we heard earlier. The decisions to be taken by the Government in the near future on measuring the data on child poverty are very important. If the Minister can help us to understand when we might expect information of that kind, it would help the Committee’s consideration of this Bill not just today but over the rest of its proceedings.
Baroness Lister of Burtersett
My Lords, I am pleased to support my noble friends on this important amendment, which has been moved so ably. The Government have still not explained why they did not include the impact on child poverty in the impact assessment for the Bill, as they promised. A Written Answer in the Commons as late as 30 January wrongly stated that the impact assessment sets out the estimated child and adult poverty effects, but it does not. As it is, the shameful figures had to be dragged out of the Government by a Written Question, as my noble friend said. Nor have the Government explained to the Committee how the anticipated increase in the number of children living in poverty thereby revealed is compatible with their obligations under the Child Poverty Act 2010, to which my noble friend referred. I asked this question during Second Reading, but answer came there none.
Instead, the Minister deflected the question with the Government’s usual line that the child poverty measurement indicators are somehow not fit for purpose —picking up on the point made by the noble Lord, Lord Kirkwood. That was followed by a brief discussion about the importance of education, debt and paid work in tackling poverty, but nothing was said about how by enacting this legislation and knowingly adding 200,000 children to the poverty rolls, the Government are fulfilling their obligations under the Act. Those obligations are in addition to the increase in child poverty estimated by the Institute for Fiscal Studies, to which my noble friend referred. I would be grateful if today the Minister could answer the question I asked at Second Reading. What does this mean for the Government’s statutory obligations under the Act? Whatever the Government think about the measures of poverty enshrined in the Act, unless they plan to amend it—perhaps the Minister could tell us if they do—they must face up to their legal obligations as set out in it. What countervailing measures will they take against the increase of 200,000 children living in poverty?
I agree with the Minister that education, debt and work are important factors in any anti-poverty strategy, but it is unclear how reducing real incomes will help with any of them. How, for instance, will making life harder for low-income families enhance the educational chances of their children? Hungry children do not make good learners. Anxious and stressed parents are less able to support their children’s education. Adequate incomes are important to educational chances. Paul Gregg has estimated that around 50% of educational inequalities or attainment gaps between the rich and the poor in the UK stem from differences in income. Similarly, as the Minister said, debt is a major problem for poor families, but I fail to see how reducing their weekly income will reduce that problem. All the children’s charities are predicting an increase in debt as a consequence of this Bill, and a Bill that depresses the incomes of low-income workers is hardly conducive to promoting work as the best route out of poverty. I made the point earlier about what Alan Marsh said: people who are demoralised do not make very effective jobseekers.
As the Government consistently attempt to deflect questions about the impact of the Bill on child poverty by dismissing the measures in the Child Poverty Act 2010 as inadequate I should like to say a few words, if the Committee will indulge me, about their recent consultation on those measures. Noble Lords might have read a letter recently in the Guardian from eight fellows of the British Academy, myself included. The letter argued that the Government’s proposals to measure child poverty in a new way,
“are confused and would meet neither the government’s objectives nor international standards”.
While accepting that,
“it is helpful to track what is happening to the factors that lead to poverty and the barriers to children’s life chances”,
the letter advises that,
“it does not make sense to combine all of these into a single measure. To do so would open up the government to the accusation that it aims to dilute the importance of income in monitoring the extent of ‘poverty’ at precisely the time that its policies will be reducing the real incomes of poor families”.
Lord Bates
My Lords, I rise with trepidation following the noble Baroness, who has immense expertise in this area. Even if I had not intended to speak on the technical aspects of this amendment, the claim by the noble Baroness, Lady Sherlock, whose approach is always sharp and pointed in proposing such matters, that this Government is not serious about tackling child poverty would demand a response. Not only is it there for us to read repeatedly in government statements that this Government, as with their predecessor, are committed to the eradication of child poverty, but when we are tempted to get a little too high and mighty about that, one might look at the targets which the previous Government set in respect of halving child poverty by 2010 and how they performed against that measure—they did not tackle it. The commitment is real and is what is driving the whole argument towards universal credit, the raising of tax thresholds, the freeing up of the economy to create 1 million new jobs—which is a pathway out of poverty—the troubled families programme and the pupil premium. This is an immense drive across all departments within government to tackle what we accept is a shame on a country which is still the seventh-richest nation on earth—that 2.3 million children should be in poverty. I just make that point initially.
Baroness Hollis of Heigham
Given the Minister’s very welcome and obviously understandable sympathies and sensitivities towards the issue of child poverty, does that mean that we can expect the noble Lord to table an amendment at Report stage to protect child benefits, including the child benefits within tax credits, from this Bill altogether?
Lord Bates
I will come to that point in a minute because it is an interesting one about the effectiveness of the cash measure alone in eradicating child poverty. The previous Government failed to meet their target of reducing child poverty by the level they set themselves, despite spending £171 billion between 2003 and 2010. Here, in a sense, is something that almost makes the case for the Opposition, were they to take it. Those of us on the government Benches could stand here and point to the fact that, in 2010-11, 300,000 children were taken out of relative poverty. We could say that, but of course we realise that that is not actually happening on the ground. We recognise that those immense pressures are there. I do not dispute the quotes that the noble Baroness has used in introducing this but the Institute for Fiscal Studies, in its helpful analysis, points to the fact that all that happened with that 300,000 was that you had private sector incomes—predominantly—being repressed or flat-lining. I am trying to follow the gestures of the noble Baroness but being a man I can do only one thing at a time. Private sector incomes increased by 10% over the years 2007 to 2012 while benefit levels increased by 20%. That is one of the arguments that is put. Because it is pitched at median income, you then find that, as the Institute for Fiscal Studies shows in its graph, the measure comes down, the benefits go up and effectively you say, almost like a card trick, “We have reduced child poverty by 300,000”. In fact, you have done nothing of the sort. All that has happened is that, during a recession, private sector incomes have fallen and therefore, as the IFS says:
“If earnings fall relative to benefit levels, then being in work becomes less financially attractive”.
Those are the IFS’s words, not mine.
Baroness Farrington of Ribbleton
My Lords, I apologise to the Committee. I was unable to be present for the beginning and I have obviously missed the explanation of a phrase that I cannot understand. The noble Lord has just repeated that the answer to child poverty is not money. I do not know the explanation for the Government’s view that you do not eradicate child poverty by providing money. I wonder whether the noble Lord could refresh my memory.
Secondly, the noble Lord comes from a different northern region from mine. The biggest problem that people face is poverty when they are struggling to go to work. They are struggling to get extra hours, which the Government are insisting that people have to try to do, when their employers will not give them extra hours; when the only extra hours they can get may be two hours further away from their home and the cost of travel there is impossible. I think that noble Lords opposite are not living in the same world as I am. My only reassurance is that the right reverend Prelate appears to be living in my world.
Baroness Hollis of Heigham
My Lords, perhaps I may add to my noble friend’s comments. The noble Lord perfectly accurately described what was happening to the 300,000 children who were lifted out of poverty because the median income line fell by virtue of the recession and the downward pressure on incomes. Of course, he is completely right, but the other way of stating that was that as a result of what the previous Government did, the incomes of those children—the poorest of the poor—were protected against the effects of the recession, for which most of us are grateful and appreciative, including the noble Lord, I am sure.
Lord Bates
I accept that point. On the first point made by the noble Baroness, Lady Farrington, of course I am not saying that child poverty has got nothing to do with money. It is vastly to do with money, but is that the only thing that impacts on child poverty? If we want to impact on child poverty, do not the quality of housing, the quality of education and the opportunity to work have some bearing on the fact? Does the fact that the parents are in debt or are drug-dependent or alcohol-dependent have any bearing on it? Does living in a one-parent family or with two parents make any difference to the life chances of the child in poverty? One would probably have to say: yes, to a degree. I am simply saying that there is more to this.
That fact is borne out by international comparisons. I found a report card of child well-being, which was produced while the previous Government were in power. It was undertaken by UNICEF and it is an international comparison. Yes, it looks at cash, although interestingly it looks at 50% of the median, not 60%; it also looks at health and safety, educational opportunities, work opportunities, family and peer relationships, behaviours and risks, and subjective well-being—a broad range of indicators in a basket of trying to assess international child well-being. By the way, if the party opposite is interested, it actually came last: 18.2 was that Government’s average ranking position out of the most advanced countries in the world, but that is not my point.
My point is that we must come back to the median income. The median income is worth looking at in itself because that is the test that we are using to measure all benefits. It relates to a level of income—not an average income but a median income, the most frequent across the distribution. The latest figures I could find on the ONS website showed that median incomes vary quite substantially across the United Kingdom—nothing unusual there; you would expect that to happen. For example, in London the median gross wage is £651.80 per week, but in the north-east the figure is £451.80 per week. These are the latest figures; I accept that there might be a shift slightly in one direction—well, upwards only.
There is a difference of 44% across the range. Therefore, when we are applying a national target of 60% of the median, we need to examine whether that is giving us an accurate reflection of child poverty levels in all parts of the country. It might be that we are understating it in parts of the north, Wales and the south-west; it may be that we are overstating it in London—I do not know. None the less, using that as the sole measure to test median income across a national rating by which we actually assess those in child poverty is worth taking a more careful look at.
Lord McKenzie of Luton
Does the noble Lord accept that the Child Poverty Act was not looking at just the metrics of the targets? Section 9(2)(b) talks about ensuring that,
“as far as possible that children in the United Kingdom do not experience socio-economic disadvantage”.
We had big debates about that. The Act requires strategies for,
“the promotion and facilitation of the employment of parents or of the development of the skills of parents … the provision of financial support for children and parents … the provision of information, advice and assistance to parents and the promotion of parenting skills … physical and mental health, education, childcare and social services, and … housing, the built or natural environment”.
It was not looking at just those targets; there is a whole range of strategies that this Government should be adopting if they are signing up to this Act.
Lord Bates
That is a more reflective point; it is just not exactly what the amendment before us today actually refers to. It refers to the financial measures of “absolute low income”. Is that the one that is based on 1998-99 and uprated for inflation in a direct line?
My point is that there is an absolute crying need, of which we are all absolutely aware. There is child poverty out there and we need to strain every sinew to ensure that we tackle it. Also, we have no doubt that on the current measure there is no question that it is going to increase. The Office for Budget Responsibility’s figures forecast that as the recovery gets under way, private sector earnings will increase by 4.6% per annum. It does not take a great mathematical mind—which is fortunate for me—to figure out that with what we are dealing with today, as well as the likely increase in private sector incomes, we are going to see the gap rising and almost an inversion of what has happened over the past few years happening in the future. But there are more indicators that need to be examined to give us a holistic picture and to ensure that we target scarce resources where they are needed most.
Lord Newby
My Lords, this proposed new clause would require the Secretary of State to lay a report in each of the years in question, assessing the impact of that year’s uprating order on child poverty based on the different measures contained in the Child Poverty Act. I absolutely understand noble Lords’ concern to ensure that we are tracking progress and impacts on child poverty. However, I do not believe that this new clause is necessary to do that.
The Government already publish child poverty figures every year using the households below average income series, which is usually published in May or June and includes details on the areas listed in the amendment: namely, the number of children,
“living in relative low income … combined low income and material deprivation … absolute low income … persistent poverty”.
Moreover, later this year, we will see the first of what will become an annual report from the Social Mobility and Child Poverty Commission, chaired by Alan Milburn. It will report on the Government’s progress towards reducing child poverty, in particular meeting the targets in the Act and implementing the most recent UK strategy.
The noble Lord, Lord Kirkwood, asked a number of questions about that commission. He asked where it had got to and what it was going to say. The answer is that the Government do not know what it is going to say because it is an independent commission. We await its report eagerly, but we are not attempting to pull it up by the roots to find out what it is going say as it is in the process of undertaking its work. I can reassure my noble friend that there is no drift in the work of the commission. It is a very substantive piece of work and it is therefore not surprising that it cannot do it very quickly. We expect that its report will be available in the late summer. It will report to Parliament and I am sure that we will give considerable scrutiny to it in your Lordships’ House when the time comes—we are already looking forward to it on these Benches, I can tell you.
I strongly believe that it is only through such comprehensive reporting, looking at poverty issues in the round, that we can have a meaningful debate about child poverty. As noble Lords have mentioned, we published in response to a Parliamentary Question in another place the expected impacts on child poverty of the uprating measures that we have announced. An additional 200,000 children will be in that category by the end of the period covered by the Bill as a result of the measures in it.
The noble Baroness, Lady Sherlock, asked whether we would publish other impacts of the measure. We do not think that it is possible to derive estimates of all the measures in the Bill. For example, impacts cannot be modelled for the persistent low income poverty measure because impact assessments are based on cross-sectional data rather than longitudinal data. In addition, measures based on an estimate of material deprivation are technically complex to model because material deprivation relies on more factors than just income, so impacts have not been modelled for these measures. The noble Baroness asked also about the absolute poverty figure. If she will forgive me, I shall write to her on that separately.
As we have said previously, we believe that we need to be cautious about setting too much store by such individual assessments of impact. These are not predictions of how the child poverty figures will change in the future, as they do not take into account all the other variables which exist. For example, our estimates will change as forecasts of economic growth and average earnings change, and they do not take account of policies which cause child poverty figures to move in the other direction such as universal credit. Universal credit, which has not played much of a part in our debate today, is of course expected to lift up to 250,000 children out of poverty depending on the effect of the minimum income floor. I believe that we can have a meaningful debate about poverty, as we have started to do in the latter part of this debate, only when we accept that poverty goes wider than the measures contained within the Child Poverty Act.
The noble Baroness, Lady Lister, asked a number of questions about the work that we are doing on defining poverty and on the consultation. The consultation is finished. She is quite right that a number of people have been very critical of what the Government are proposing and we are now considering how we respond to those criticisms. It is not the case that the Government have made up their mind about the outcome and are going to ignore everything that has been said—that would be ridiculous. I can give the noble Baroness an assurance that we are analysing all the submissions, of which there have been a number, and we will produce our response to the consultation in the summer.
Baroness Lister of Burtersett
I am sure that the Minister is about to say this, but the assurance that I was seeking was that all the responses would be published on the web. I do not question the fact that the Government are analysing them all—I am sure that they would not ignore any of them—but the public need to know what people were saying about it.
Lord Newby
I am happy, I think, to give that assurance. I say “I think” only because I have not talked to officials. That is the standard practice and, unless somebody for a reason that I cannot immediately think of has said that they do not want their comments to be published, I would expect the department to publish all the comments and representations that we have received.
I want to clarify a few matters that have been put to us on several occasions by noble Lords. First, the Government are committed to the Child Poverty Act; secondly, we are committed to eradicating child poverty; and, thirdly, we strongly believe that income matters and will remain a central part of any new measures of child poverty. Our discussion is about what else one needs to do both to measure and deal with child poverty so that all children have a better opportunity when they are living on very modest means.
A number of noble Lords have cited figures from the IFS and the Child Poverty Action Group which suggested that child poverty levels would rise by between 800,000 and 1 million by 2020. I really would caution against setting too much store by those figures. First, child poverty forecasts are an inexact science. For example, the numbers that the IFS produces do not account for future changes to government policy. It is measuring change at a time of immense fiscal challenge for the Government but cannot know what government policy will look like in four or five years. The IFS core numbers also do not take fully into account the dynamic and behavioural changes that will result from the Government’s reforms. Moreover, even in the short term, child poverty forecasting has proven difficult to get right. The IFS, which I accept is a leader in this area, made predictions in October 2011 of a fall of 100,000 in the figure for relative child poverty for the year 2010-11. In reality, the figure fell by 300,000. It is therefore an inexact science and it is very easy for numbers produced by it to be spectacularly wrong. This does not of course detract from the importance of taking action to reduce the level of child poverty, but it serves as a reminder that we should proceed with caution in making forecasts of child poverty, whether based on measures in isolation or changes over the longer term.
It is important to remember that many figures on poverty are based entirely on tax and benefit changes feeding entirely into the relative income measure of poverty. This measure does not capture the full range of issues that poverty involves. It captures a lot, but it does not capture them all. It will not tell us how many children’s lives will have been changed by 2020 but only how many children have circulated around the poverty line. One way of tackling child poverty is to focus on this line, pushing up benefit incomes to lift people from just below it to just above it. We already know that focusing on the relative income line alone yields perverse results, and people have referred in this debate and earlier debates to the fact that, in 2010, 300,000 fewer children were set to be in poverty because the recession had caused median incomes to drop. Children were set to be pulled out of poverty not because anything had changed in their lives but because the rest of society got poorer.
The alternative path that we are trying to follow in government focuses on the interventions that transform lives. That is why we have protected spending on the education budget; that is why we have invested £2.5 billion in the pupil premium for disadvantaged pupils; that is why we are spending £1.2 billion on capital investment in schools; and that is why we are investing in making work pay through the universal credit, sending out a clear signal that we believe that work is the best route out of poverty for parents and their children. As part of the universal credit, we are spending an extra £200 million to support families with childcare costs and, for the first time, this support will be made available to families who work fewer than 16 hours a week. This will mean that 100,000 working families will be helped with their childcare costs.
As I have said, the Government are currently analysing responses to their consultation on new measures of child poverty, measures which will attempt to capture the wider reality of poverty in the UK today. The Government already produce a number of detailed reports on poverty. I hope that this will reassure the Committee that we will continue to publish vital information around child poverty and to take our obligations around child poverty seriously. This proposed new clause would therefore be an unnecessary addition to the Bill.
Baroness Sherlock
My Lords, I thank all noble Lords who have spoken in this debate, which may be an interesting precursor to the kind of debate we may have when the commission finally reports. I am particularly and genuinely pleased to hear the Minister say two things—first, that the Government remain committed to eradicating child poverty and, secondly, that income matters. They are both important statements, and I welcome them and am very pleased to have them on the record. I thank the Minister for making them so clearly.
The noble Lord, Lord Bates, with whom it is always a pleasure to do battle, took me to task for saying that I did not somehow accept that the Government made clear their commitment to eradicating child poverty. What I was challenging was not that commitment but whether or not the actions were being taken that would make it a reality. That was the point that I was trying to make, and I apologise if that was not clear. My question was really about what one does to make a difference.
A lot has been said about the nature of the measure. I have never thought that the well-being of children was about only money. However, the reason why this amendment is about money is because the Bill is about money; the amendment is about the impact of the Bill, and the Bill is solely about what happens to the tax credits and benefits that go out to people—in this case, children. So it makes no sense for it to be any broader than that.
The second thing that is worth saying is that I made it clear that the relative income measure was, deliberately, only one of four income measures in the Child Poverty Act, and that was for a reason. The Government of the day recognised that we had to take a 3D approach to understanding what poverty was, and no single measure alone would be able to give us all we needed. However, those four points of perspective between them give a pretty good idea of what is happening to incomes across the UK. That is something that we need to understand.
The noble Lord, Lord Bates, commented on the regional variation of median income. That is true, but the cost of living also varies. As he and I both know, the cost of living in Durham is significantly different from the cost of living in London. So although wages may be different, so too is income—and the measure relates to median incomes.
It is also worth reminding ourselves that the Child Poverty Act does not—
Lord Bates
That is quite an interesting point, if the noble Baroness is prepared to expand on it on the record. I think that she accepts that it is true in Durham, a city that we both love greatly, that median incomes—or, rather, average incomes—are significantly lower, by 44% according to my figures, and that the cost of living is different and lower. So in those circumstances —putting the two together by using a national measure and putting 60% of median income—you would perhaps overstate the level of child poverty in Durham. Does she accept that?
Baroness Sherlock
It might be worth the noble Lord and me sitting down together with the Child Poverty Act. He might find that many answers to his questions are in there. As well as giving the Secretary of State a specific duty to address income measures, because tax and benefits are in the gift of central not local government, with the exception—reprehensible in my view—of the recent move to localising council tax support, the strategy places a duty on local authorities and other players to engage in issues around child poverty, specifically because they have competence in those areas. So if the noble Lord goes back to read it, he will find that there is an awful lot more in it than he perhaps remembers. We may have to come back to that.
It is also worth coming back to the idea that it is not just about money—but it is also not not about money, a point made very clearly by my noble friend Lady Farrington. The noble Lord, Lord Bates, said that the fact that the Labour Government did not meet their target for child poverty reduction means that the measure does not work. I do not think that it means that at all. I pick up again a point that the Minister made. I fully accept that no forecast is a precise measure and no measure is precise, but one reason for keeping a long-term target of 2020 is that what really matters is direction of travel. Over time, how does the income of the poorest relate to the income of the country as a whole? On that, I am proud that our Government lifted 1.1 million children out of poverty. If I had to stand up and say that we had pushed 1 million children into poverty, I would be ashamed of that, and I am very glad that I am not in that position.
If the Government come forward with other measures, we will happily debate them. I am always open to any conversation that focuses the attention of this House and the nation on the well-being of the poorest families, and I am very happy to have the conversation when the commission reports about what that means and what the best means is to assess the impact of policies on that. However, at the moment, the Child Poverty Act is law, and it puts an obligation on the Government—a statutory duty—to address child poverty in all these areas. Unless they measure that, I simply do not see how it is possible to satisfy themselves that they have done it.
The Government’s defence has also partly been that the measure is meaningless. It may be worth reminding ourselves even of the relative income measure. The Child Poverty Action Group reminds us that a relative low-income poverty line is, typically, around £12 per family member per day for all spending needs after housing costs. It notes that many families in poverty will be far below that—because that is where the line is, and many families are way below the line. The point of having four measures is to try to understand the impact of policies such as this on all those measures. I accept that other measures are going on. I accept the point that the noble Lord, Lord Bates, made—and he has engaged with the arguments from this side of the Committee most comprehensibly—that other measures are happening and that there are time lags. However, it is impossible to ignore the fact that a Bill that sets out deliberately to cut in real terms the incomes of poor and middle-income families will do anything other than increase child poverty in real terms. That is a real increase—it is not a statistical anomaly.
I do not want to delay the Committee much more, but I remind noble Lords that the amendment simply invites the Government to report before they enact this Bill on what the impact will be on child poverty, using measures already in statute to reflect a duty that the Government already have in statute. That is all that it does; it could hardly be less radical. However, as I am interested in returning to this at a later stage, I beg leave to withdraw the amendment.
The Lord Bishop of Ripon and Leeds
My Lords, the three amendments in this group have two specific aims, and both concern the treatment of children under the Bill, which we have discussed under Amendment 12.
Amendment 14 seeks to remove child benefit from the Bill and Amendment 19 does the same for child tax credit, while Amendment 17 concerns the child additions within universal credit. I shall return to Amendment 17 later with regard to children with disabilities.
Amendment 14 concerns child benefit. Time and again in these debates on welfare reform, we face the challenge that our reforms have a disproportionate effect on children. Overall, some 30% of households are affected by this Bill. Of those with dependent children, 87% are affected; of lone-parent households, 95% are affected. For example, a single nurse on average earnings for her profession of £530 a week would lose nothing at all as a result of the Bill. If she had two children, she would lose £424 a year in 2015-16. Families with lower incomes are those who end up being the worst affected, whether by reductions in housing benefit or the freeze on child benefit, and so on.
I do not for one moment believe that it is the Government’s intention to target children, but it is the result of much that we do in welfare reform, and that is a matter of choice. The most powerful speech at Second Reading was that of the noble Baroness, Lady Hollis, when she spoke of the way in which she and I and the vast majority of Members of this House were not affected by the responses that we make to our fiscal challenges. We could be: my personal allowance, winter fuel allowance or bus pass benefits could be withdrawn or taxed if we took a different line. In this Parliament, £9 billion has been spent on the increases to personal allowances and £4.7 billion on fuel duty—an effective cut by not increasing fuel duty.
When we discuss matters here, I am always deeply impressed by the expertise brought on health matters by doctors and NHS trust chairs, on higher education by university professors and academics, and on defence by senior military officials. When we wrestle with issues of poverty, there is no one experiencing deprivation to tell us what it feels like. Many of us know, because of other people whom we talk to, of the pressures, especially on those in work with low incomes, but we do not experience that deprivation for ourselves.
The extension of the threshold for the personal tax allowance in 2013-14 leaves basic rate taxpayers £47 better off. If you do not pay tax, that clearly has no effect. If you are a working family eligible for both housing and council tax benefit, you will lose benefit so that your net gain is not £47 but £7 in 2013-14. There are alternatives to the pressure on the most deprived families.
I am particularly concerned about the continued chipping away at the value of child benefit. This has been frozen for three years and is now to be capped at 1% for two further years. That is a total increase of 2% compared with an estimated 16% in CPI. Again, the issue is the cumulative effect of the reductions. This is in addition to the cuts in other benefits experienced by those on low incomes. The impact assessment shows that some 60% of the savings from this Bill come from the poorest third of households, with 3% from the wealthiest third. These three amendments would mean a substantial decrease in the 200,000 children pushed into poverty by the below-inflation increases in children’s benefits and tax credits in this Bill.
I wonder whether we realise, and get hold of well enough, the considerable extent to which child benefit in particular is regarded in most families as being specifically for the children concerned. My experience in West Yorkshire is of families on low pay struggling to make ends meet but quite clear that child benefit is to be used not for the general household expenses but by the mother to help her children. The points made persistently in debates on this Bill and on the Welfare Reform Act by the noble Baroness, Lady Howe of Idlicote, speak of the way in which it is women—often mothers—who are most disadvantaged by the measures we are taking because they are concerned particularly with the specific help of their children. Child benefit reduction fails to take account of the cultural and social support for children that this benefit provides, in addition to its financial obligations.
Reduction in child benefit specifically is also a disincentive to seeking work, so it is a direct challenge to the Government’s own desire, put forward powerfully by the Minister, to encourage people to return to work. Child benefit, rightly, is disregarded both from household income and in calculating the applicable amount before housing and council tax benefit are reduced. The result is that a low-income working family living in rented accommodation loses both the £4.80 a week in child benefit and a further estimated £4.10 a week because of the disregard rules. A loss of some £9 a week is a serious blow to working families, and that child benefit reduction in particular works against the Government’s aim to get people back into work.
Lord Low of Dalston
My Lords, the amendments would remove the benefits paid on behalf of children from the scope of the Bill because that disproportionately hits children and families. That is why I have added my name to them. Where 30% of all households are affected by the Bill, nearly nine out of 10 families with children are affected, including 19 out of 20 lone-parent families.
In total, the Children’s Society has estimated that about 11.5 million children are affected by the Bill. As the right reverend Prelate explained, Amendments 14 and 19 would together remove child benefit and child tax credit from the scope of the Bill. That is made particularly necessary by the fact that child benefit has already been frozen for three years before the measures contained in the Bill take effect. That means that child benefit will increase by only 2% over the course of half a decade. Over the same period, prices as measured by CPI will have risen by more than 16%. I say that that justifies the removal of child benefit from the scope of the Bill but, in truth, it would be unjustifiable not to remove it.
These benefits are paid to working families from all walks of life, as well as non-working families. The Children’s Society’s benefits uprating cap impact calculator shows that a couple with two children with one earner working as a primary school teacher and earning £600 a week would lose £424 a year by 2015. A couple with three children and one earner, a corporal in the Army, say, earning £619 a week, would lose £552 a year by 2015, so we can see the impact of having extra children.
As we have heard, Amendment 17 would remove the 1% uprating cap from the lower child disability addition under universal credit. That is particularly justified by the fact that rates of support for children in that group are already intended to be halved under universal credit. At present, families with a disabled child for whom they are in receipt of some level of disability living allowance, may be entitled to receive support through the disability element of child tax credit, currently worth £57 a week. Under universal credit, that support is to be provided through disability additions within household benefit entitlements, but it is proposed to cut that support in half to just £28 a week. That change will affect all families with a disabled child unless the child is receiving the higher rate of care component of disability living allowance or is registered blind.
The review of the noble Baroness, Lady Grey-Thompson, Holes in the Safety Net, of the impact of universal credit on disabled people and their families surveyed 1,400 families with disabled children about changes to support under universal credit. The evidence received suggested that, for those likely to be affected by the cut, the impact could be disastrous. Two-thirds of those likely to be affected said that if they received £30 a week less in benefits for their disabled child, they would have to cut back on food. At this point, I cannot resist asking: if the Minister shares other noble Lords’ disappointment at the greater resort to food banks, what does that say about her view of the government policy that she is supposed to be defending, as it is government policy that is leading to people’s greater resort to food banks?
Returning to the review of the noble Baroness, Lady Grey-Thompson, more than half of those surveyed said that the changes would lead to them getting into debt, more than one in 10 that they might even need to move home. One parent told the inquiry:
“My child would have little quality of life and would lose much of the social interaction he needs. It would be like a prison sentence”.
Another simply expressed their desperation, saying:
“This would have such a huge impact on us I really don’t know what we would do”.
The Bill will further compound that cut. For a family with one disabled child, the impact of the change in uprating would be about £42 a year. It should be noted that that impact is on top of changes to the uprating of other benefits received by the family.
The Children’s Society estimates that the cost of uprating the lower child disability addition would be only £2.4 million in 2014-15 and £4.2 million in 2015-16. All this hardship for such a paltry saving. The disproportionate impact of the Bill on children cannot be overstated or justified. It is not the first time that austerity measures have had a disproportionate impact on children and families. In fact, as the noble Baroness, Lady Sherlock, told us, the Institute for Fiscal Studies found last year that, even with universal credit fully in place, taking together all the tax and benefit measures introduced or to be introduced between the beginning of 2011 and April 2014, families with children will lose a higher proportion of their income than either pensioner households or working-age households without children across the whole income distribution.
We have heard a lot this afternoon about the measurement of child poverty, but the IFS estimate of a growth in the number of children living in poverty of 400,000 between 2011 and 2015 and 800,000 by 2020, has been referred to more than once. The noble Lord, Lord Newby, said that we cannot set too much store by such predictions because we do not know what direction government policy may take. All I know is that the last time I heard, the Government intended to take a further £10 billion out of welfare. The Bill can only serve to increase the level of child poverty. Indeed, as the noble Lord, Lord Newby, acknowledged, it will add 200,000 to the number of children in poverty; 100,000 of them will be in working households.
Children do not have a vote. If they did, it is impossible to believe that they would be voting for the Bill as it stands.
Baroness Grey-Thompson
My Lords, my name is also attached to all three amendments in this group. I thank the right reverend Prelate the Bishop of Ripon and Leeds for explaining the amendments.
First, I will cover Amendments 14 and 19 together. Households with children are much more likely to be affected by the Bill than households without children. Many families with children will be affected even when someone is working full time. A single person or couple with children obviously have much greater costs than those without dependent children. For this period of their life, the income they need to meet the basic living costs of their household is clearly greater. That means that the amount someone can be earning and still need extra financial support from benefits and tax credits stretches much higher up the income scale than for those without children.
The level of childcare costs and of rents—especially in the private rented sector— combined with the lack of a living wage means that people who can only find work at or near the minimum wage cannot escape from needing that extra financial support, for however much time they work. If they work more hours, they need more help with childcare. Many are already struggling to manage.
For example in a local paper in the north-east of England, where I live, Pauline Chambers, chief executive of Sedgefield and District citizens advice bureau in County Durham, said that the team had encountered levels of hardship not seen for 21 years. Telephone inquiries have increased by 100 per cent in the last two months, with many people struggling to pay for basic food and utilities. That view is repeated up and down the country. Julia Cornelius, manager of Luton CAB was quoted in a different paper. She said:
“Every day we see people who are struggling to keep a roof over their heads or put food on the table as wage squeezes, price rises and benefit cuts wreak havoc on household budgets”.
Those in work and on benefits gain little from their earnings increasing. A single person earning £250 a week who receives a £2.50 rise in their earnings will keep about £1.70 of the increase after deductions for tax and national insurance. If they have children, and so need to rely on benefits and tax credits, they will reduce as their income rises, so they will be left with a net gain of 10p from a rise in earnings of £2.50.
Lord Touhig
My Lords, these amendments, to which I have added my name, are essential to protect the basic well-being of the very poorest children. Those seeking to justify restrictions to our social security system have continually argued two things: first, that we must fairly distribute the burden of national economic hardship, and secondly, that we must take tough decisions in order to ensure a sustainable future. Yet driving down the value of child-related benefits achieves neither of those objectives. Instead, it unjustly shifts the burden onto the most vulnerable section of our society and damages the future prospects of hundreds of thousands of young people.
The Government’s own impact assessment highlights that the Bill as it stands will disproportionately affect families, with lone parents experiencing the most significant real-term cut to their income of £5 per week. Noble Lords might think that £5 is not much, so let us put that figure into context: it is the equivalent of half an average weekly heating bill or two lunches for a child. The loss of it is a significant challenge to the increasing number of parents currently struggling to cover utility costs or turning to local food banks for their children’s meals. In practice, the actual shortfall is likely to be larger still owing to above-inflation rises in the cost of necessities such as groceries, fuel and gas and electricity. The net result will inevitably be more child poverty and greater family suffering, making a mockery of any notion that this is a fair or just mechanism for securing cost savings.
As Helen O’Brien, the chief executive of Caritas Social Action Network, said recently,
“it is absurd to suggest that a child going to school hungry or coming home to a cold house is shouldering their fair share of austerity measures; rather they are being deprived of a basic standard of living to which all children are entitled”.
Removing child-related benefits from the scope of the Bill will not completely prevent or reverse this hardship, as low-paid and unemployed families will still face a rapidly widening gap between their outgoings and their core benefit income. However, specific parts of the safety net designed to cover essential costs of caring for their sons and daughters will be crucially safeguarded if these amendments are agreed.
This is particularly important given that the relentless squeeze on the support available for poor families has already left considerable numbers of children not only without the facets of a good childhood but growing up in simply unacceptable living conditions. Reflecting on cuts to local housing allowance and the pending introduction of the household benefit cap, Alison Gelder, chief executive of Housing Justice, recently noted that,
“across the country we are seeing increasing numbers of children suffering from a life in sub-standard housing and being forced into overcrowded accommodation”.
Taken in conjunction with this April’s intended ending of council tax benefit and the imposition of social housing underoccupancy penalties on approximately 220,000 families with children, these measures are putting the income levels of the poorest parents under unprecedented strain. On top of this, child benefit is already subject to a three-year freeze, which stands to create a further annual real-term loss of £130 by 2014.
More than ever the most vulnerable families require protected child-related benefits in order to mitigate the most damaging effects of this rapid and extensive cut to their income. At the very least, the Government should allow sufficient time for the impact of recent and pending benefit changes to be properly examined in relation to child poverty. The result of committing to another three years of real-term cuts before many key restrictions have even come into force will be disastrous for children whose parents are struggling to keep a roof over their heads and food on their table.
Ultimately, increased levels of child poverty are not only devastating for individuals and families but stand to have a profoundly negative effect our society. One of the most significant risks is to children’s education, an issue previously recognised in the DWP’s impact assessment on restrictions to housing benefits. It stated that overcrowding resulting from the cuts could hamper children’s ability to do homework and affect educational attainment. Last year, more than half of teachers surveyed reported that financial hardship among families had resulted in children arriving at their classes hungry, with significant consequences for concentration and behaviour. A report from the Children’s Food Trust last week reinforces the picture of children going to school hungry. Of 250 staff surveyed, 84% said they had seen children without enough to eat and 68% said they had seen an increase in this over the past two years. If child-related income is driven down further this is only likely to worsen, jeopardising the potential of even more young people and undermining the prospects of the next generation.
When parents struggle to afford basic necessities for children, there is also the very real risk of running into long-term personal debt. The shocking findings by the magazine Which? last year showed that payday loan companies now spend over half a million pounds targeting cash-strapped mothers and fathers by putting their adverts on television during children’s programmes. This is indicative of the increasingly desperate situation that so many families now face. A growing number of parents are turning to these lenders, while some 25% now use credit cards to meet everyday living costs. The abolition of community care grants and crisis loans in April only stands to deepen this problem by closing the door to interest-free emergency funds.
It is difficult to see how pushing even more parents into debt by slashing the value of child-related benefits will contribute in any way to our future economic recovery; yet increased levels of debt are precisely what will result from this Bill. Children still need healthy meals, warm houses, winter clothes and new shoes. When parents are faced with a real-term cut in child benefit and tax credits, alongside above-inflation rises in the prices of these goods, they will have to turn somewhere to make up the shortfall. It is as simple as that.
These amendments are not only right, but imperative. Capping up-rating of child-related benefits at 1% for the next three years will exacerbate the already unsustainable pressure that parents are under. It will cause serious damage to our communities in the long run and, most critically, it will drive down the living standards of millions of children. Protecting the basic level of income required to meet young people’s most intrinsic needs is a fundamental test of our society and one that we cannot afford to fail.
At the general election, the leader of the Opposition, Mr Cameron, now the Prime Minister, said that we lived in broken Britain. I paid little attention to him at the time because I believed he was wrong. However, after two and a half years, we live in a Britain where multi-millionaires are about to receive thousands of pounds a week in tax cuts; we live in a Britain where corrupt bankers who fiddled the LIBOR rate are rewarded with pay-offs when they should have gone to prison; we live in a Britain where those who operate our transport system cannot run the trains on time but get big bonuses; we live in a Britain where energy companies have more than trebled their profits yet require pensioners to pay an extra 6% for gas and electricity; and we live in a Britain where hard-working low-income couples with children will now see their weekly income slashed, the unemployed and poor will have their benefits cut and disabled people will see what help they get now cut or taken away altogether. Now, in 2013, I have started to understand what Mr Cameron meant by broken Britain.
Baroness Massey of Darwen
My Lords, I want to make some very brief comments on the amendments, mainly to follow up some things I said at Second Reading. As my noble friend Lord Touhig just said, these amendments are imperative, crucial and brilliant, and I congratulate the movers on putting them so powerfully. Any amendments that will mitigate against benefits having a negative impact on children are very forceful and follow very well from earlier, powerful speeches about child poverty.
I suggested at Second Reading that anything that might increase child poverty should be removed from the Bill. I say that again and support these amendments. The Government should really think about listening very carefully to the organisations and experts who work closely with children and families and who understand child poverty. These organisations and experts have pointed out the negative implications of this Bill. Surely their analyses should be taken very seriously.
The Government have already announced that the Bill will directly increase relative-income child poverty by 200,000 children, of which 100,000 will be in families in work. Nearly all the highly vulnerable children that Barnardo’s works with are receiving in-work or out-of-work benefits. This Bill will impose a real-term cut to their income. One in 10 families will be affected by this Bill, the poorest families most.
Baroness Sherlock
My Lords, we have heard yet again some very powerful and persuasive speeches and it is a very interesting argument. I commend the right reverend Prelate the Bishop of Ripon and Leeds for provoking such a good debate on so important an issue. As we have heard, this amendment would remove child benefit, child tax credit, and the child addition to universal credit from the scope of the Bill. Since we on these Benches would like to remove all benefits and tax credits from the scope of this Bill, we are pleased to support it
As we have heard from the right reverend Prelate, the noble Baroness, Lady Grey-Thompson, and others, the Bill has a disproportionate impact on children and families. The Government’s own impact assessment shows that two-thirds of affected households are families with children. As the noble Lord, Lord Low, noted in a very powerful speech, the Children’s Society says that while 30% of all households are affected, 87% of families with children are hit.
On one level this is because families with children receive more in state support—of course they do. As the noble Baroness, Lady Grey-Thompson, pointed out, a household without children is rather cheaper to run than one with children; not to mention a great deal quieter. However, while most parents rightly bear the lion’s share of the cost of raising their children, the state has always contributed—not just in extreme cases to try to protect children from the misfortunes that befall their parents but also because, in general, it is always recognised that children are a public as well as a private good. We all have a stake in seeing the next generation thrive.
Many noble Lords have rehearsed—and I will not repeat them—the concerns expressed to all of us about the impact of these measures on families with children. We have all had briefings from Save the Children, the Child Poverty Action Group, the Children’s Society and others making those points. These are very difficult times to be raising children, as my noble friend Lord Touhig noted in a very powerful speech. As the costs of food and energy have soared, more and more parents are struggling to make ends meet as they spend more of their money on these basic costs.
The right reverend Prelate made a telling point, I thought, when he reminded us that, unlike other areas, we do not have people in here with direct expertise of the matters under consideration. To that end, I liked the quote from Rosemary Keenan, the chief executive of Catholic Children’s Society (Westminster), when she said:
“It is hard for many of us to imagine what it is like for a mother to only have £1 left and know she still has to feed her children before the next payday. Families facing in-work poverty rely upon Working Tax Credits and other benefits to help make ends meet, and will face serious hardship as a result of these restrictions”.
Indeed they will. As we have heard from a number of noble Lords, the Bill comes on top of a series of cuts in the value of other tax credits and benefits. As well as the headline cuts, there have been a series of hidden cuts affecting, for example, tax credits for families with children by changes to taper rates, the treatment of income and the freezing of allowances, all of which sound technical but have in fact saved billions. However, it is not of course money that has been saved, but money that has been taken way from low-income families with children.
I seem to recall that the Government suggested at earlier stages that one of the reasons that so many families are affected is that tax credits go too high up the income scale. The implication, I suppose, is that people would not miss the money. However, the noble Baroness, Lady Grey-Thompson, described some figures from Citizens Advice. It has given us case studies showing that a couple with two children, where one parent is working full-time on just over minimum wage—getting £13,000 a year—will gain just 76 pence from the personal allowance. As a result, however, they will lose £3.46 a week net. By April 2015, that family on £13,000 a year with two kids will be £12.79 a week worse off. Even if we go nearer to average earnings, Citizens Advice suggests that a family earning £26,000 in similar circumstances will be over £12 a week worse off by April 2015. The sums may not sound like a lot, but they are significant to families on those kinds of incomes.
The Bill, as we have heard, will affect primarily working families with children. I was pleased to hear my noble friend Lady Massey of Darwen reiterate the impact of the Bill on child poverty, although I hope to hear something specific about this. I feel that I have probably done it to death, so I shall stop saying it now.
To come back to our core concerns, the Bill is a completely inappropriate way to address the up-rating of state support for families. We have perfectly good mechanisms in place to do that on an annual basis in the light of prevailing economic conditions. To come to the specifics, in trying to circumvent those annual mechanisms, the Government have left me slightly confused. I therefore have two questions for the Minister. First, can he tell the Committee what plans are in place for the up-rating of those benefits, tax credits and allowances which are not included within the scope of the Bill? This was raised at an earlier stage, but I do not think that we got a full answer; if we did, I apologise and will look it up. If the Minister does not know, would he mind writing to me before Report stage?
Secondly, other than those mentioned in the schedule and the universal credit work allowance mentioned in the Autumn Statement, are there any other benefits or allowances which the Government intend to up-rate by 1%? Those two questions together sound quite boring but, in fact, their answers will enable us to understand the parameters of the Bill’s impact. Unless we can get that detail, the Committee cannot properly understand its consequences.
Coming back to our core objections, these are poor choices for the Government to be making. The families who will be hit are not responsible for the economic situation, for the banking crisis or for the failure of the Government to get the economy growing again. They are just doing their best to manage in difficult times. Yet the Government are planning to cut the value of the help they get from the state in order to fund a tax cut for nearly 13,000 people earning £1 million a year. We should not be doing this and are pleased to support the amendment.
Lord Newby
My Lords, I absolutely understand and appreciate the desire of the right reverend Prelate and other noble Lords who have spoken on these amendments to protect and support children; of course, we all want to do that. However, our view is that supporting children is not just about increasing benefit levels. One of the most important things that we as a country can do to support children is to tackle the deficit and restore economic growth. In doing so, we create a future of prosperity, opportunity and jobs for the parents of those children in the short-term and for those children as they grow up. Taking benefits out of the Bill, as proposed by the right reverend Prelate, would take away some of what we consider to be the vital savings required to do this.
The amendments which we are debating now would remove from the Bill the child element of tax credit, child benefit and the lower rate of disabled child addition in universal credit. I assume that the right reverend Prelate’s intention in removing those elements is that they would be up-rated with prices, as was the case previously. If that were the case, I need to remind the House that the savings delivered by the Bill would be reduced by nearly £1 billion. In our view, those savings simply have to be found. If we did not do it through the Bill, they would have to be found from somewhere.
I was extremely grateful to the right reverend Prelate for the fact that, unlike the Opposition, he at least set out how he would raise the money. It was a long and credible list. However, it is not a list with which the Government agree. The Government’s view is that tax credits and child benefit account for over 40% of working-age welfare expenditure. It is not realistic to think that they can be excluded from the need to make savings.
We are attempting to prioritise resources into reforms which can help children in a variety of ways. To repeat some of the points which I made in my earlier speech, I hope not too tediously, we have since September 2010 entitled all three and four year-olds to 15 hours per week of free early education. This is being delivered flexibly to meet parents’ needs. It will be extended to 260,000 disadvantaged two year-olds from September 2013. We are also helping 100,000 more working families with their childcare costs by spending an extra £200 million in universal credit.
To deal with a point made by the noble Lord, Lord Touhig, we are taking action to deal with exorbitant practices by payday loan companies and loan sharks. One thing that we are grappling with, with which any Government would grapple, is that many families on low incomes have got very high levels of personal debt. This is not new. When I was Treasury spokesman for the Liberal Democrats about seven or eight years ago I appeared, somewhat implausibly, on the steps of the Treasury with my right honourable friend Vince Cable, bearing an outsized cheque at the point when personal debt in the country reached £1 trillion. Most of this, I accept, was mortgage debt; it is not the debt that we are talking about today. However, some of the biggest increases in personal debt over the past decade have been among people on low incomes. This growth in personal debt was not effectively recognised or tackled in the past. Indeed, our appearance bearing this cheque just guaranteed a huge amount of ridicule for Vince Cable and myself, rather than anybody, including the previous Government, taking the slightest notice of it, which was deeply distressing—or, more importantly, taking the slightest action to deal with the culture with which we are now grappling.
However, both in terms of loan sharks and payday lenders, I hope that we are taking more effective measures, not least through the amendments during the passage of the Financial Services Act, to ensure that people requiring access to short-term loans can, at the very least, do so with companies which will treat them half-decently. The other area which we protected, which is vital to families and benefits those at the poorer end at least as much as those at the upper end, is the support they get through the schools system and the NHS, where the budgets are protected.
The right reverend Prelate spoke about child benefit, which he is anxious to protect. I remind the House that, even after the changes that have been made to child benefit, nine out of 10 households are still covered by it. We are taking the entitlement away only right at the top end. Child benefit continues to be paid to many households which are by no means on low income.
Baroness Hollis of Heigham
My Lords, two sentences ago the Minister said that one of the reasons for bringing the rate of £57 down to £28 was in order not only to align it with the adult rate but to increase simplicity. Will he explain why halving the amount increases simplicity, as opposed to hardship?
Lord Newby
My Lords, that was not the point I made. I was talking about aligning the uprating of the adult and child rates, not the halving of the amount. I was making a different point.
The noble Baroness, Lady Sherlock, asked about plans to uprate benefits. Benefits not covered by this Bill are subject to existing legislation, so the Secretary of State will review social security benefits annually, after publication of the relevant price figures. He will therefore decide what uprating will take place when he has that information in the normal way. I will write to the noble Baroness with the details of other benefits that are to be uprated by 1%.
As I have said before, the welfare system provides vital support for many families with children. However, government support for children must be about more than benefits. Securing the economic recovery matters to every household in the country, and only by doing that can we create a stable and thriving future for our children. I hope that I have also been able to provide some reassurance to the Committee that this Government are continuing to take action to support families—action that will change the lives of families with children.
The Lord Bishop of Ripon and Leeds
My Lords, I am very grateful to all noble Lords who have taken part in this debate, and not least to the Minister for his response. I am disappointed that he was not able to respond more to Amendment 17, because it is not an expensive proposal. It will help a significant number of children—real children with real disabilities. I know that money is being provided for disabled people in the greatest need, but the disabilities that are felt and known by those who would benefit from Amendment 17 are real. To accept the amendment would provide real support for a large number of children who could thereby have been enabled to play a greater part in our society, both for their benefit and for the benefit of the rest of us.
I accept that together, the amendments in this group would cost a significant amount of money at £0.9 billion. However, it is not fair to argue that welfare benefits cannot be excluded from the work that we have been doing in order to respond to our fiscal crisis. Welfare benefits have been tackled extensively through the whole welfare reform process. This comes over to me as twisting a knife in a wound. I regret that the Government have felt that this is the area where they have to find that £0.9 billion. I will not repeat the argument that there are other areas where we could have found it.
I am very grateful to all noble Lords who contributed examples of a wide range of people: the corporal in the Army with three children, who will lose £520 a year, the primary school teacher, the nurse, and so on. They showed that a wide range of people will be affected and damaged by the Bill. I am grateful to the noble Baroness, Lady Massey, for stressing the organisations that support children. It is good to have all the statistics produced, but however many of them there are, the reality comes home to me, not when I read the Children’s Society’s statistics, but when I go to see its work in Leeds and its projects with children who are hungry, who have to cut back on food, as the noble Lord, Lord Low, said, and whose future prospects are being damaged, as the noble Lord, Lord Touhig, said. We need to do something to look at the ways in which we disadvantage children in practice by so much of the work we are doing.
I hope that we will come back to this issue on Report to see whether there is not something we can do to set down a marker and make a real contribution to the lives and vitality of children in our society. However, for the moment, I beg leave to withdraw the amendment.
Baroness Sherlock
Baroness Sherlock
My Lords, this amendment is in my name and that of my noble friend Lord McKenzie of Luton.
The Telegraph online ran a story on 6 December 2012 headed “Autumn Statement: Osborne Attacked over ‘Mummy Tax’”. The article stated:
“Hundreds of thousands of new mothers will be almost £240 worse off after George Osborne announced cuts to maternity pay”.
A similar story was run in the Mail in January under the headline “True Cost of ‘Mummy tax’”. It is fair to say that the inclusion of statutory maternity pay in the scope of this Bill has not been universally well received. The Telegraph story quoted the founder of Mumsnet and I think it is fair to say that she was pretty unhappy with it. Why are the Government including statutory maternity pay in the Bill? The Telegraph had an explanation. It said:
“The Prime Minister’s official spokesman said it was ‘a personal choice’ for parents to decide whether to return to work after having a child or to stay at home”.
So there you have it—it is a personal choice; at least, presumably it is if you can afford it. But surely it is slightly more than that. Do we not all have an interest in making sure that people have a real choice when they have a baby? Is not one of the reasons the state pays statutory maternity pay that it is seen to be good for babies to have their mothers at home, breastfeeding them where possible and bonding with the child? Therefore, is there not a genuine public policy interest in making sure that we do not unnecessarily make it any harder for women who want to stay at home when they have a new baby?
The growing concern about this and other cuts affecting new mothers prompted this amendment, which seeks simply to remove statutory maternity pay from the scope of the Bill. It is worth rehearsing very briefly how SMP works. SMP is payable only to women who have just had or adopted a baby, or who will do so shortly. They must be in paid work. Indeed, they must have been continuously employed by an employer liable to pay national insurance contributions for them for six months before the 15th week before their expected date of confinement. They must have had average gross weekly earnings at least at the level of the lower earnings limit for national insurance and they must have stopped work in order to have or care for the baby. In other words, this is a contributory benefit paid to working women who have stopped work only to give birth or to care for a new baby. SMP gives them 90% of their average weekly earnings for the first six weeks and then, at the current rate, £135.45 a week for the next 33 weeks.
According to a Written Answer from the right honourable Maria Miller in another place on 30 April 2012, at col. WA 1322, the Government estimate that some 232,000 families will claim SMP in 2012-13. Those families could find themselves being seriously short-changed. Using the Government’s own inflation forecasts, the Children’s Society calculates that in 2015-16, SMP will be £145.15, if inflated by CPI. However, the impact assessment indicates that the likely rate is just £139.58—a difference of £5.57 per week. To put that in context, if a woman were on maternity leave now with her first child and had her second child in 2015, she would find that she got about £184 less in real terms during her next maternity leave than she would during this maternity leave. If her earnings were below the flat rate level for SMP, that figure rises to £217.
The period after a birth is a particularly tough time for parents. The Money Advice Service estimates the average cost of essentials for a new baby as some £3,700 over their first year. Of course, just as costs rise, income falls because of maternity leave, and parents are time-poor as well. The £200 may not be much to some people but it is enough to buy a cot and bedding and 17 value packs of newborn nappies.
This amendment focuses on SMP for two reasons. First, I simply do not think we can allow this Bill to go through the House without noting all the impacts on mums of new babies that have happened since 2010. Just since 2010, the Government have done the following: abolished the health in pregnancy grant; abolished the Sure Start maternity grant for all but the first child; abolished the baby element of child tax credit; cancelled the planned toddler element of child tax credit; abolished the Government’s contribution to the Child Trust Fund; frozen child benefit for three years and removed it from higher rate taxpayers; cut the percentage of childcare costs parents can get back through working tax credit; and legislated to introduce hefty charges for using the CSA. Some of those cuts are very severe. House of Commons Library research shows that low-paid new mums are losing £1,300 during pregnancy and the baby’s first year just from cuts to maternity pay, pregnancy support and tax credits, and are losing more from child benefit.
The second reason for tabling this amendment is that during the Second Reading debate, I raised the issue of SMP. I did it specifically to try to find out how that fitted with the Chancellor’s claim that the reason this Bill is needed is to ensure the welfare state is fair to working people, not, you may recall, to those who lie in bed with their blinds down, sleeping off a life on benefit, while others go out to work. However, on the face of it, it is hard to see how targeting a payment made to someone who has just had a baby after being in continuous employment for the requisite period at a level which triggers national insurance contributions fits with that narrative. Indeed, I am sure that the Government have a good reason, and I hope it is better than simply saying, “It’s a choice”. However, given that we are in Committee and this amendment is about SMP only, I look forward to hearing the Minister share that reason with us. I beg to move.
Baroness Stowell of Beeston
My Lords, I start by making it absolutely clear that, contrary to what the noble Baroness, Lady Sherlock, has just said, the United Kingdom has a strong and effective maternity and parental regime. The UK is significantly more generous than the requirements of the EU pregnant workers directive. The directive says that a woman should benefit from 14 weeks’ paid maternity leave; we provide 39 weeks. It also says that a woman should receive at least the amount that would be paid for sickness; our standard rate of maternity pay and maternity allowance is £135.45. This compares very favourably with the current statutory sick pay rate of £85.85 per week.
In addition, the latest available data from the OECD from the previous financial year show that the proportion of our GDP spent on maternity and parental pay is higher than in Germany or France. Moreover, in the past decade, the standard rates of statutory maternity pay and maternity allowance, which is the allowance that is paid to women who are not in work who have children, or who were not in work prior to the birth of their child, have increased by more than 35%, from £100 a week in 2003 to £135.45 currently. So while I accept that the decisions we have taken on statutory maternity pay will mean a slightly smaller increase for people over the next few years, the UK’s strong and effective maternity architecture will remain firmly in place.
The noble Baroness, Lady Sherlock, referred to what she described as a mummy tax and to media reports on it. I am slightly surprised that she referred to Mumsnet because when her honourable colleague Rachel Reeves published an article on Mumsnet on what she described as a mummy tax back in December last year, the blog attracted a lot of comment. It is worth highlighting some of the points that were made. Most of the contributors were at pains to say that they were not supporters of, or spokesmen for, the Government, or supporters of either of the two parties in government. One contributor said:
“I despise this latest Labour ‘Mummy Tax’ campaign. For one, the name ‘Mummy tax’ is hugely patronising and sexist for people in a relationship as my husband benefits from maternity pay just as much as me as all our household income is pooled. And let’s be clear although there is a real terms cut due to the rate of inflation, this change is not a tax”.
The comments continued and attracted quite a lot of support. Another contributor responding to the post on Rachel Reeves said:
“I’ve had no pay rise for the last 3 years and we are getting nothing this year and told to expect the same for the next 2-3 years—is that a tax? No, it’s just the real world and I have to get on with it. I’ve had a child during that time and we had to work around what we could afford with regard to length of maternity leave and to be honest £180 would have made no difference whatsoever. I despise the term ‘mummy tax’—it’s a patronising media friendly sound bite, which creates a hugely distracting perception of the middle class having to cut back on cappuccinos whilst on maternity leave which removes debate from the real issue. I would like to see the labour party setting out what it would do in power and challenging the government instead of wheeling yet more spin and inaccurate bluster”.
Baroness Lister of Burtersett
I am sorry to interrupt the noble Baroness. I accept that that must have been said on Mumsnet and I have to admit that I do not particularly like the term “mummy tax” either, but does she accept that while it is the case that the mother who posted on Mumsnet pooled her income, research that I and others have carried out shows that for many women having a benefit in their own right is important to them psychologically? They receive money over which they have control, whether or not they then pool it in the household. Not all households pool their incomes. Some do and some do not.
Baroness Stowell of Beeston
That is a fair point. The people who were posting on the internet at that time were responding to the comments of Rachel Reeves about the proposals having a disproportionate impact on women, and only women.
Away from the debate on Mumsnet, the Government are committed to make this architecture for women stronger. The provisions in the Children and Families Bill, which had its Second Reading in another place last week, will allow working parents to choose which parent takes parental leave and pay to care for their child in the early years. This will give mothers real choice over when and whether they return to work. This is helpful in two big ways—where the woman is the higher earner and in starting to chip away at the inequality that some women face at work just because it is assumed that they and only they will take a break in their careers to have children. Our proposals will start to make a big difference.
It is also important to remember that the Government have introduced other reforms that will help to offset the impacts of these changes. For example, a woman working full time at national minimum wage for six months of the tax year, who then receives statutory maternity pay for the next six months, will still be better off overall as a result of changes to the income tax personal allowance. The introduction of universal credit will also provide a big boost for many mothers and lone parents, with 2.6 million women and 700,000 lone parents expected to gain through increased take-up and improved financial incentives to work. In addition, as part of the introduction of universal credit, £200 million extra is being spent to support families with childcare costs. For the first time, this support will be made available for families who work less than 16 hours a week. This will mean that 100,000 more working families will be helped with their childcare costs. That is important, because it means that even if someone is able to take on only a small amount of work, they will get that support for childcare costs to which they previously would not have had access. In another move that will be helpful to mothers and parents, as my noble friend Lord Newby mentioned, we have committed to introduce 15 hours a week of early education for 40% of two year-olds, starting with the most disadvantaged.
The Government will also continue to make extra support available for mothers on low incomes to buy the basic goods that they need. We have a programme called Healthy Start, and the Sure Start maternity grant—a lump sum payment of £500—is available to help parents with the costs of having a new child. I know that the noble Baroness, Lady Sherlock, said that this is now available only to parents who have a child and no other child under the age of 16. However, this support is additional to the money that parents receive through their statutory maternity pay. Bear in mind that if there is another child in the home, some of the initial substantial expenses of having a family often are not repeated if they have a second child.
The amendment would reduce savings from the Bill by around £50 million in 2015-16. None of the decisions contained in the Bill are easy. I recognise that the noble Baroness, Lady Sherlock, would prefer that we did not include statutory maternity pay in the Bill. I would like that, too. I would love it if we could say, “Let’s exclude this or that”. However, as my noble friend said in our previous debates, every time we say that we will not include something in the Bill, we have to look somewhere else for the money. That £50 million is not a small sum and is equivalent to more than 20,000 part-time nursery places for three to four year-olds. This is money that will cover substantial support that rightly we provide to mothers and families in other ways.
I hope that I have been able to demonstrate that there is a strong architecture to support women when they have children. I therefore hope that the noble Baroness feels able to withdraw her amendment.
Baroness Hollis of Heigham
My Lords, the Minister regularly makes the point that if we do not have these savings the money must come from somewhere else, such as nurses’ salaries, teachers, the NHS, schools or whatever. I hope that she appreciates that most of us on this side believe that the Government are making a political policy choice. It does not have to fall on children, disabled children or statutory maternity pay. As some of us argued at Second Reading—there were different shopping lists—we are spending £32 billion on tax relief for private pensions, of which £8 billion goes to subsidise the tax relief that higher-rate taxpayers currently enjoy. To continue that is a political policy choice. The money would pay for most of these cuts twice over.
Baroness Stowell of Beeston
As I have said on several occasions, these cuts are necessary because of the financial situation that we found ourselves in. They are not something that we want to have to do, but we believe that these are the right cuts to make because we have made sure that we have, wherever possible, protected those who are least able to increase their income by different means. While these are not cuts that we want to introduce at all, we think that we have done so sensibly and by addressing people in the right way, as anybody would expect us to do. That is the situation that we have found ourselves in and the decision that we have made.
Baroness Hollis of Heigham
My Lords, I do not think that anyone doubts the Minister’s good will, integrity or concern about these issues. That is not the issue. All that I am saying—and she has not answered this—is that those cuts could fall elsewhere, and she, on behalf of the Government, is choosing for them not to fall elsewhere on people who could afford to pay for them.
Baroness Stowell of Beeston
I would say to the noble Baroness that while she and the right reverend Prelate are willing to put forward their alternatives on where they would target cuts if they were in a position to make those decisions—and I respect them for doing that—her colleagues on her own Front Bench have so far refused to do so. We have made these decisions in this area. We have done so in a way whereby we have protected those who are most vulnerable. We would much rather not have to do this but we believe that it is necessary because of the economic situation that we find ourselves in and because we think that this is, in the end, the right thing to do to secure a strong economy for the future.
Baroness Sherlock
My Lords, I thank the Minister for her reply and my noble friend Lady Hollis for her telling interventions. I cannot help noticing that the Minister did not answer one of my two main charges. She began to answer the first charge, where I had listed a whole series of benefits and payments—specifically for mothers of children—that had been cut. I was grateful to her for at least recognising that offering up in her defence a benefit that the Government have decided to withdraw for second or subsequent children was at least slightly less effective than it might otherwise have been.
I am more concerned that she simply has not addressed my second charge at all. One reason why I put this amendment down was because of the words from the Chancellor of the Exchequer when he introduced the Autumn Statement, explaining specifically why this Bill was needed. I read them out at Second Reading but to remind noble Lords, he said that the Bill mattered because,
“we have to have a welfare system that is fair to the working people who pay for it”.—[Official Report, Commons, 5/12/2012; col. 877.]
According to the Guardian, he told the “Today” programme:
“It is unfair that people listening to this programme going out to work see the neighbour next door with their blinds down because they are on benefits”.
It is clear that the Bill was intended to penalise those out of work to be fair to working people. Why, then, is there included in the scope of the Bill a benefit that is payable only to women who have given up work to have a child or look after a child? The Government do not have an answer to that. I suspect that the noble Baroness would not have expressed it in those terms and therefore is not in a position to defend it.
Finally, in relation to the charge being thrown back at us, I was trying to avoid rehearsing the whole Second Reading, but we have made it very clear that we simply would not have made the choices that the Government have made. We would not have set out to give a tax cut to people earning £150,000 a year or more, which will be worth £100,000 to those who earn more than £1 million a year in order to be able to ensure that they benefited, and to cut benefits to the poorest families to do that. I fully accept and understand that she takes a different view. However, it is not reasonable to say that we have not explained where the money would come from. We have clearly made our case; these are not the choices that we would have made. I very much hope the Government will think again, specifically in relation to statutory maternity pay. In the light of those comments, I beg leave to withdraw the amendment.
Baroness Lister of Burtersett
My Lords, in opposing the question that the Schedule be agreed, I do not wish to reopen the debates we have already had about the damaging impact it will have on some of the most deprived members of our community. I hope I can take it as read that I oppose this schedule in the same way that I have opposed the clauses. Instead, on the helpful advice of the Public Bill Office, I wish to use this debate as an opportunity to draw attention to the needs of an even more deprived and vulnerable group who cannot even count on a miserable 1% increase in benefits, and that is asylum-seeking families reliant on asylum support.
The right reverend Prelate the Bishop of Ripon and Leeds and I raised this issue briefly during Second Reading. The Minister responded, correctly, that asylum seeker benefit rates are a matter for the Home Office and are not within the scope of the Bill. He kindly said he would draw our remarks to the attention of colleagues in the Home Office. We are, of course, aware that asylum seeker benefit rates are not within the scope of the Bill; that is the very reason why we raise the question. They should be part of its scope and treated in the same way as other social security benefits when it comes to uprating policy. As I have given the Minister’s office notice that I planned to raise this issue in this context, I hope that the Minister will be able to address the substance of our remarks when she comes to respond.
The right reverend Prelate and I, together with the noble Lord, Lord Avebury, remember the all-party parliamentary inquiry into asylum support for children and young people, set up by the Children’s Society. I would like to put on record my thanks to the Children’s Society for all the work it has done on this important issue and for its briefing for today’s debate. That briefing draws on the findings of our inquiry. We found that the current asylum support system is forcing thousands of children and young people seeking safety in the UK into severe poverty. We were shocked to hear of instances where children were left destitute and homeless, entirely without institutional support, and forced to rely on food parcels or charitable donations. This cannot be right.
It is estimated that there are 10,000 children living on asylum support. The panel heard powerful evidence of the reality for those living on as little as £5 a day, whose parents are forced to skip meals to feed their children and are unable to buy warm clothing in the winter. Some families find current levels of support particularly difficult, including pregnant women and lone mothers with young children—and families of a disabled child, because asylum support does not offer families any standard additional support when a family member has a disability. With regard to pregnant women, one particularly shocking example brought to our attention was a mother having to walk home from hospital in the snow with her newborn baby in her arms because she had no money.
Just last week, Maternity Action and the Refugee Council published a report which gave more examples of the problems faced by pregnant and nursing women who had insufficient money to meet their most basic needs. Most asylum-seeking parents are not allowed to work, leaving families totally reliant on state support; paid work is not a route out of poverty for them. Asylum support levels differ significantly from income support and other mainstream benefit levels. Until 1999, asylum support was set at 90% of income support, after which levels of support were reduced to 70%, with the justification that asylum seekers in accommodation no longer had to pay utility bills. There is currently no statutory provision to make an annual uprating of levels of asylum support in line with increasing costs of living. I acknowledge that the previous Government did not set a good precedent on the uprating of asylum support. I therefore hope that my own party will at least be open to rethinking our policy on this.
Asylum support rates have not been raised in 2012-13, so they have effectively been frozen without any announcement to justify this. When I asked a Written Question about this, the Answer was that there was not only no statutory obligation to carry out an annual review but no obligation even to make an announcement. There should be, in both cases. As it is, I was told:
“There are no current plans to change asylum support rates”,
although the Government,
“will continue to keep them under review”.—[Official Report, 15/1/13; col. WA 121.]
If the rates are frozen for a second year in succession, that will mean a cut of 6.2% in relation to income support payments over the last two years, making it even more difficult for families to survive. Can the Minister please explain which factors are taken into account when keeping asylum support rates under review? What is the actual process for deciding how and when they will be uprated?
The inquiry recommended that asylum support for families also provided with accommodation should be aligned with mainstream benefit rates paid for living expenses. Where accommodation includes utilities, which would normally be expected to be paid from living expenses, it is appropriate to make a deduction. However, such a deduction must be reasonable. The inquiry argued that the rates of support should never fall below 70% of income support. As it is, asylum support now bears no relation to income support.
The inquiry was particularly concerned about the situation of families on Section 4 support, which may be provided if a child is born after an asylum claim had been refused but where the family are, for some reason, unable to leave the UK. Almost 800 children are being supported under Section 4, some for many years. Under Section 4, the amount provided is even lower and the use of a cashless system—the azure card, as it is called—can be degrading and wasteful because it can be used only in certain designated shops. The inquiry recommended that this particularly inhumane form of asylum support be abolished entirely and replaced with a single cash-based support system for all children and their families who need asylum support while they are in the UK.
Given that asylum support rates were not increased in 2012-13, they should be raised as a matter of urgency for the 2013-14 financial year and thereafter increased annually, at the very least in line with income support, along with other benefits in the schedule. I would be grateful if the Minister could explain the rationale for treating asylum support differently from mainstream social security benefits when it comes to annual upratings. Ministers frequently refer to the Government’s ongoing review of asylum support when questioned on these issues, including recently in response to a Written Question from the noble Lord, Lord Hylton, which referred to our all-party inquiry. In his Written Answer, the noble Lord, Lord Taylor of Holbeach, said that the Government would consider our findings as part of this ongoing review. Will the Minister please tell us whether the Government will respond to the all-party inquiry’s report? How long will this ongoing review go on, and when can we expect an outcome?
I would argue that a review of the treatment of one of the most deprived groups in our community should be treated with a little more urgency. It is shameful that we are willing to allow children and their parents who are seeking asylum in a rich country such as ours to continue to suffer in this way.
Lord Avebury
My Lords, I agree with the noble Baroness that the payments made to people who have applied for asylum should be treated in the same way as any other benefits and should be subject to review by your Lordships. Instead, as the noble Baroness explained, there is no obligation to uprate the benefits or even to make a statement, nor, in particular, for the Government to explain whether they believe that the payments made to asylum seekers should bear any relationship to those on income support, or whether the two calculations are to be performed on an entirely different basis. If so, what is the underlying rationale behind the amounts paid to people on asylum support?
As the noble Baroness has already said, with her I was a member of the cross-party parliamentary inquiry organised by the Children’s Society into asylum support for children and young people, under the very able chairmanship of my honourable friend Sarah Teather, the former Minister for Children. I join the noble Baroness, Lady Lister, in expressing the concern and dismay that we all felt when listening to the stories of suffering and destitution of asylum seekers. The worst-off were those supported under Section 4 of the Immigration and Asylum Act 1999, many of whom were failed asylum seekers who could not be returned to their country of origin because it would not accept them. Under that provision, people have to live in housing and accommodation provided by private agencies, the standard of which often is grossly deficient and lacking in ordinary facilities.
I could not help noticing the contrast with the Statement made earlier today about the arrangements being made for our forces returning from Germany. Quite rightly, £1 billion is being spent on 1,900 new houses for those families, when nothing whatever is spent on the accommodation of people who have applied for asylum.
Section 4 provides support in the form of vouchers which can be redeemed only at certain shops. The value of the azure card, which is intended to provide for all essential living needs, is £70.78 a week, compared with income support for a couple with children of £123.35. Because they have no cash, as the noble Baroness has explained, the recipients cannot do many ordinary things, such as buying stamps, taking a bus or making a telephone call. She gave a particularly lurid example of evidence that we heard about a mother who had to undertake all sorts of physical arrangements with her small child as regards apparatus that was needed. My noble friend Lord Taylor of Holbeach said, in his brief answer to a question on asylum support on 24 January, that he was surprised to find that there were two levels of benefit within the asylum system. Indeed, one cannot imagine the motive for building this level of complexity into it.
The Lord Bishop of Ripon and Leeds
I simply want to express my support for the arguments put forward by the noble Baroness, Lady Lister, and the noble Lord, Lord Avebury. Being part of that inquiry was indeed a harrowing experience, although nothing like as harrowing as it is for those who have been on asylum support for two, four or six years and who cannot return to the countries from which they have come. The Government accept that they cannot return to those countries, so the argument that asylum support has to be kept very low in order to discourage people from staying here did not appear to have any weight at all in terms of the evidence that was presented to us.
I was grateful to the noble Lord, Lord Newby, for his promise at Second Reading to pass on the concerns about asylum child support to the Home Office. Have the Government received any response to that request to the Home Office and do they agree that we need to have some idea of what is happening to support the 10,000 children who are on asylum support?
I was grateful, too, to the noble Lord, Lord Taylor of Holbeach, for the expression of his own surprise at the bizarre nature of the provisions being made for that support. The noble Lord, Lord Newby, likes simplicity. I do not know whether you could find anything more bizarre than the provisions under Sections 4 and 95 of the Immigration and Asylum Act 1999. If we could simply move to some way of linking that support to the benefits that the Government believe are rightly paid to those in need, that would be a major act of concern for those who are in the most need of all within our society.
Lord McKenzie of Luton
My Lords, I thank my noble friend Lady Lister for displaying yet again her knowledge of and passion for a very important subject and I pay tribute to all noble Lords who have spoken in this debate for their work on the cross-party inquiry. Some important issues have been raised, such as that of asylum seekers not being able to access paid work as a route to dealing with the circumstances they find themselves in, worrying reports about 10,000 children and extra costs that are imposed on public services such as the NHS, which were identified by the noble Lord, Lord Avebury. Clearly, that report is a telling report but it is a report currently for Government. However, we, too, will have to reflect on it as well.
The principle here is that we must be able to provide support to those in genuine need but must do so in a way that minimises incentives to economic migrants who could undermine public support for genuine refugees. There is an issue here that we need to be frank about. There is a balance between dealing with the issue of benefit tourism and separating that out from the needs of genuine asylum seekers. It complicates the picture. An important issue has been raised today and an important report has been prepared. It is currently for the Government to give their views on it, but we will have to reflect on its contents.
Baroness Stowell of Beeston
My Lords, the purpose of this schedule is to set out benefits, payments and tax credits to which the Bill provisions apply. Paragraph 1 refers to sums of social security benefits, payments and child benefit covered by Clause 1. Paragraph 2 of the schedule sets out the relevant amounts of tax credits covered by Clause 2.
The debate has of course been about asylum seeker benefits. As the noble Baroness, Lady Lister, acknowledged in her opening remarks, asylum seeker benefits fall under the remit of the Home Office and the UK Border Agency and are not part of this Bill. As has been said, there is an ongoing review of our approach to asylum support. In response to a question as to when this will conclude, we expect to finish conducting our inquiries before the end of the financial year. As the review is ongoing, there are some questions that I will not be able to answer, but I am none the less grateful for this opportunity to lay out how support for asylum seekers is provided.
As noble Lords have acknowledged, there are two types of support. First, there is support provided to those people who have made an application for asylum that has not yet been decided. That is provided under Section 95 of the Immigration and Asylum Act. People in that context are usually described as people under Section 95. Secondly, there are people who have been found by the UK Border Agency and by the courts not to need protection in the UK, but who cannot return home due to a temporary problem. They are provided for under Section 4 of the Immigration and Asylum Act. That is the Section 4 to which several noble Lords have referred today.
As noble Lords are aware, the support provided is expressly intended to meet people’s essential needs. By that we mean their food, toiletries and clothing. As an example, a family of four receiving Section 95 support while the decision on their application is pending is given £178 per week to cover these essential costs. The same family receiving Section 4 support is given £151 per week. The levels of support provide for the fact that asylum seekers have, as has been acknowledged by noble Lords, fully-furnished, rent-free accommodation with household equipment, utilities and council tax included. This support is temporary in its nature. It is true to say that the allowance is less than income support equivalents but that is because the recipients do not have to pay for other things such as utility bills or other costs associated with running a household.
Likewise, new mothers receiving asylum support do not have to buy a cot or things of that kind because sterilising equipment and such things are provided. They are given a grant to help pay for a pram and clothing. Healthcare and schooling are also provided. In addition to the weekly subsistence rates, families receive the following benefits. A single one-off payment of £300 may be provided to asylum seekers to help with the costs arising from the birth of a new baby. This is different from the maternity grant provided by DWP as recipients will not need to cover the costs of a new cot, stair gates and sterilising equipment. Pregnant women and young children aged between one and three each receive an additional £3 per week, and babies under one receive an additional £5 per week. Assistance with travel costs to medical appointments is available on application.
For those receiving Section 95 support, children receive between 80% and 90% of the equivalent mainstream benefits. Children on Section 4 support, which is intended to be temporary while their parents arrange travel home, receive over 60% of equivalent mainstream benefits.
Lord Avebury
This is the third or fourth time that my noble friend has mentioned that the arrangements under Section 4 are temporary, but will she acknowledge that some people remain on them for many years? In one case that we were told about, I think it was seven years.
Baroness Stowell of Beeston
I was going to refer to the complaints that have been made about delays in dealing with Section 4 cases. These problems have been acknowledged by the department. Efforts have been made to address the causes behind those delays and there have been some improvements.
The noble Baroness, Lady Lister, said that disabled people receive no additional support. If asylum seekers have higher needs, they are supported by their local authority under an old Act, the National Assistance Act 1948. My noble friend Lord Avebury asked whether disabled children would receive higher value support. Again, that is a matter for individual local authorities, which will have considered the needs of the child and conducted a relevant assessment. My noble friend also asked whether these arrangements are compatible with the UN Convention on the Rights of the Child, and the answer to that is yes. The UK Border Agency is bound by its Section 55 duty to consider the best interests of children. As I have said, fully furnished free accommodation, education and healthcare are provided, plus an allowance to meet the need for food, clothes and other essential items.
Although I acknowledge the strength of feeling that has been expressed by noble Lords about the difficulties that inevitably are faced by people who come to this country seeking asylum, when comparing asylum support rates across Europe, our research shows that the UK is comparatively generous in family cases, providing more to an asylum-seeking family of four than countries like Sweden or Denmark. Further, as I have mentioned, there is an ongoing review of our approach to asylum seeker support and we expect to finish conducting our inquiries shortly. We are taking account of the views of partners, including the recommendations of the Children’s Society. We will want to ensure coherence with the mainstream benefit system and the financial constraints being faced. The noble Baroness, Lady Lister, asked for further details about the evidence that is being considered in the course of the review. I shall see whether I can write to her with further details on that.
It is worth saying that there is no statutory obligation to carry out an annual review of asylum support rates. Instead, Parliament has set a clear benchmark that the support provided must meet the “essential living needs” of recipients of Section 95 support and that it must provide “accommodation” to recipients of Section 4 support. It would be wrong to raise expectations in this area given the current constraints on the funding available, but we are committed to an approach to asylum support that is fair, reasonable and balanced. No one who has sought our protection need be destitute while waiting for an application to be decided, but if the application is refused and the decision is upheld by the courts, we expect people to return home. Perhaps I may add that if someone is granted asylum, if they are in need of benefits they will transfer on to the domestic regime, which ensures that they receive the same benefits as anyone else in this country under the normal rules that apply.
If I have failed to address all of the detailed questions put by my noble friend Lord Avebury and, indeed, if there are any others, I will follow them up in writing. I am grateful to the noble Baroness, Lady Lister, for the opportunity to set out the support that is provided and I hope that I have been able to reassure her and other noble Lords that the Government continue to take this matter very seriously. I hope that she will withdraw her objection to the schedule.
Baroness Lister of Burtersett
My Lords, I thank the noble Lord, Lord Avebury, and the right reverend Prelate for their powerful support in this debate, and I thank my noble friend Lord McKenzie for accepting that perhaps our side will have to reflect on the findings of the inquiry. That was very welcome. I also thank the Minister for her full reply and for the good news that the review is expected to conclude by the end of this financial year. That is one good piece of news. When she writes to noble Lords, perhaps she will also say whether the review will be published so that we can read the full results.
I want to make only one point because I am conscious that noble Lords are waiting for the next debate. I turn to the question of “temporary”, which was picked up by the noble Lord, Lord Avebury. I would point out that a Written Answer in the other place last week stated that the average time spent on Section 95—not Section 4—was 525 days. That is a long time to be living on such a low income.
It has been useful to have this debate. Although I cannot welcome everything the Minister has said, I do welcome her acknowledgment of the importance of these issues and the fact that the review is about to conclude. I do not intend to oppose the schedule.
Strengthened Statutory Procedures for the Scrutiny of Delegated Legislation: DPRRC Report
(11 years, 2 months ago)
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Baroness Thomas of Winchester
That this House takes note of the Report of the Delegated Powers and Regulatory Reform Committee on Strengthened Statutory Procedures for the Scrutiny of Delegated Legislation (3rd Report, HL Paper 19).
Baroness Thomas of Winchester
My Lords, first, I want to put on the record my thanks for and admiration of the work of the Delegated Powers and Regulatory Reform Committee secretariat in carrying out the research which enabled my committee to produce the report that we are about to debate. I thank in particular Kate Lawrence, our clerk until the end of last year who is now on a two-year sabbatical, and Peter Milledge, our invaluable counsel. I hope that the House will be as impressed as I am by the magnificent Table 1 on page 8 which sets out clearly the variations in strengthened scrutiny procedures that are at the heart of our report. I shall come back to those variations in a moment.
As a committee, we have been increasingly concerned in the past few years at the proliferation of procedures in legislation designed to give Parliament more control over delegated powers. This may sound counterintuitive: surely it is nothing but a good thing for Parliament to have an increased role in scrutinising all powers proposed by the Executive, particularly in the field of secondary legislation, which has always been the Cinderella in the legislative landscape, if I may mix my metaphors a bit. We agreed that enhanced and rigorous scrutiny is a good thing but needed to say to the Government, “Please don’t invent yet another variation on a strengthened statutory procedure without examining existing procedures first, otherwise the complexity you are in danger of creating may lead to confusion and muddle rather than enhanced scrutiny”. We even suggested that the House might consider the case for rationalisation of all these variations by legislation.
Then there is consistency of language. In seven of the scrutiny procedures, the Government have a legal duty to “take account of”, “have regard to” and “consider” a relevant committee’s recommendations. We wondered whether there are subtle differences in these expressions.
Before going any further, perhaps I should put our report in context by quickly sketching out how our committee came into existence, what has led to these new procedures and what they are. The Delegated Powers Committee was set up only in 1992—very recently by House of Lords standards—because of real disquiet over the way successive Governments were increasingly using order-making powers in Bills, some of which were little more than skeletal. This practice enabled Ministers to be vague about the all-important detail and future secondary legislation as the Bill made its way through Parliament. In justifying this lack of detail, Ministers could always cite flexibility for changing circumstances and, of course, precedent, but the House made it clear that leaving so much important detail to unamendable instruments was no longer acceptable. In many cases the detailed policy had simply not been worked out. The upshot was the Jellicoe report, which recommended the setting up of the Delegated Powers Committee to examine whether the delegation of legislative power in new Bills was appropriate. Eleven years later, the Merits of Statutory Instruments Committee was also set up to look at existing statutory instruments. Both committees have different names now to reflect their additional duties. They have certainly given a higher profile to delegated legislation and have, I believe, over the course of their existence, proved their worth. Governments have always taken the DPRR Committee’s reports seriously, very often acquiescing in its recommendations as Bills go through the House.
It may be worth noting that the other place does not have committees carrying out the same function; indeed, my committee is often asked to comment on draft Bills before a Joint Committee of both Houses. However, the other place does set up a scrutiny committee, under the super-affirmative procedure, if necessary, which issues a report, as does my committee. This might therefore be the right place to question whether having this duplication really makes sense. I gather it is fiendishly difficult to set up Joint Committees for both Houses but should this process not be made easier, and certainly speedier for this purpose, if not for any other?
Our report starts by setting out the different types of statutory instrument before concentrating on those orders which attract some kind of enhanced scrutiny procedure. These orders are all Henry VIII powers, which enable Ministers to amend Acts of Parliament by secondary legislation. Who would have thought that Henry VIII’s name would still be immortalised in quite this way? My late colleague Lord Russell said that the very first time King Henry used this power was to vary the price of wine. Although many Henry VIII powers are limited, there are many others which are much more significant. Nearly all Henry VIII powers are exercised by ordinary, familiar affirmative instruments, which have to come before the House before they can be made. However, there are now order-making powers in certain Bills which are subject to the super-affirmative or enhanced affirmative procedure, by which these orders receive much more detailed scrutiny, with many variations, than an ordinary affirmative order. Our report details all the order-making powers in Acts which attract a strengthened scrutiny procedure, and exactly what that procedure is in each case. Perhaps the best example is the Legislative and Regulatory Reform Act 2006, once dubbed the “Abolition of Parliament Bill”, because of the scope and significance of its delegated powers. This Act ticks all the requirement boxes in Table 1. All this may seem quite an undertaking but these safeguards were the price that the then Government had to pay for enabling a Minister to reduce or remove a burden imposed by primary legislation.
At the beginning of my remarks, I said that our report asked the Government not to invent a new variation on a strengthened statutory procedure without examining existing procedures first. The second major point we needed to make to the Government was, “Please make it clear whether legislative reform orders are to be used even if the proposed changes are highly controversial and if proceeding with them is not recommended by the relevant scrutiny committee in one or both Houses”. Just to be clear, the previous Government said that they would not proceed with proposed changes under these circumstances.
Since our report was published, the Government have responded to several of our questions but only to one of those two main points. We now know which committees are to scrutinise which orders. We also know that the Government will use the existing model, if possible, when proposing a strengthened scrutiny procedure in future; if not, they will explain the reasons for inventing a new procedure. They have also undertaken to lay supporting documents setting out the detail of and rationale for any proposed order under Section 19 of the Localism Act 2011.
Several of our concerns have been addressed but we still do not know whether LROs will be used for highly controversial changes and whether the Government will respect the relevant scrutiny committee’s power of veto. Before further legislation is drawn up, it is vital that the House knows the answer to those two crucial matters. For example, we know that the Government are contemplating a deregulatory Bill in which it is quite possible that new rules will be introduced to change the super- or enhanced affirmative procedure by cutting down or cutting out consultation.
The right honourable Oliver Letwin made it clear in his evidence to the Secondary Legislation Scrutiny Committee that some legislative requirements might change so as to,
“reflect the principle of proportionality”.
I am probably not the only person to worry about that word “proportionality”. Governments skip a proper consultative process at their peril. A good example is the lack of consultation on a crucial part of the recent Social Security (Personal Independence Payment) Regulations, which were changed by the DWP at the last minute. To say that the change put the cat among the pigeons is putting it mildly, and at least the Minister apologised for inadequate consultation on that occasion.
At the end of our report is a paragraph headed “New opportunities”, which I shall now turn to. The question arises that if a strengthened procedure is considered proper for some Henry VIII powers in certain Acts, why do we put up with such a comparatively crude way of considering some very important affirmative instruments that are not Henry VIII orders? What I mean by this is the “take it or leave it” procedure that the House has for considering affirmative instruments. They can either be agreed to or disagreed to, full stop. Non-fatal amendments or regret Motions to the approval Motion, whether agreed to or not, are in effect neither here nor there.
Our report is concerned with delegated legislation that is subject to enhanced procedure by statute, but it is high time that the Procedure Committee turned its mind to considering a non-statutory procedure for consideration of certain important instruments. This might attract, say, two bites of the cherry, by which I mean that noble Lords could be given a chance to have a preliminary debate before the instrument is taken through the House. The Government could be encouraged to table a proposal for an instrument which might then attract one or more suggested amendments on which votes could take place. Even if the Government decided to take no notice of any successful suggested amendments when the instrument was going through the House, at least there would have been the possibility of change, because any amendments would have been suggested before it was too late.
A recent candidate for such a procedure would have been the draft PIP regulations that I just mentioned. We know that the Government were running seriously out of time for them, and I well understand that DWP orders may have that problem, but it might have been a better instrument if the House had been able to have two bites of that particular cherry. In the event, the Government have published amending regulations to take account of the many representations made.
This begs the question of whether the House really has the scrutiny of ordinary affirmative SIs right. All my committee and the Secondary Legislation Committee can do is to recommend and warn. It is up to the House what then happens. Should the House be more robust in voting down instruments? In spite of the recommendation of the committee of the noble Lord, Lord Goodlad, on the House’s working practices, I am not particularly attracted to that course of action because I think it is a bit unrealistic and confrontational. The noble Lord, Lord Filkin, may disagree with me when we hear what he has to say later on; I am very pleased he is to speak. I would prefer the House to allow a genuine draft of the instrument to be debated and voted on, with suggested amendments before the instrument was agreed to.
I am very aware that many Peers believe that there should be a way of amending statutory instruments, but the whole point of delegated legislation is that it is just that: it delegates a power to a Minister to bring in some policy the House has agreed to in principle, and the whole point of my committee is to see that that delegation is not inappropriate. However, there is no reason why the House should not devise some way of improving the scrutiny of important statutory instruments without upsetting the whole legislative apple cart. I very much look forward to the rest of the debate. I beg to move.
Lord Mayhew of Twysden
My Lords, I warmly endorse the tribute that my noble friend has just made to the quality of our staff in the committee of which I hold the honour to be a member. I also warmly endorse the comments with which she concluded her remarks.
I suspect that all Ministers would in their heart of hearts prefer to legislate for as much of their policy as possible by means of an order, rather than undergo the rather more exciting—in Duke of Plaza-Toro terms—of having to succeed by the primary provisions of a Bill. That can be difficult and it can certainly be embarrassing when, for example, on judicial review, an exercise of discretionary power conferred on them is overturned by the courts and you have to come back with a Bill trying to put matters right.
Far preferable for them, therefore, to be able to remedy the setback by exercising a discretionary enabling power deriving from the Bill itself, especially since debate, as we have just been reminded, on the chosen order will be strictly time-limited and the order will not be amendable even if it contains a Henry VIII provision repealing a statute.
Seen from Ministers’ point of view, this is entirely understandable, but from the public’s and Parliament’s point of view, its defective character speaks for itself, and so strongly that it seems extraordinary that it was not until 1992 that the committee whose report we are discussing was set up. It is remarkable that the other place has yet to establish any such committee.
Here, I declare, I suppose, something of an interest, as I am now well into my third stint as a member of the committee, chaired in my first experience by Lord Alexander of Weedon QC and now, delightfully and extremely skilfully as we might expect, by my noble friend Lady Thomas of Winchester. I think that we can claim that the decision to establish the committee was well founded all those years ago. It is important to note that the merits or demerits of policies are outside our remit—that is not for us. We can only make recommendations, whether as to the appropriateness of the order in question for delegated legislation or as to the degree of supplementary scrutiny it should receive. However, year after year, it has proved extremely unusual, as my noble friend has mentioned, for our recommendations to be rejected or, at any rate, not to be accepted by the Government. When that happens, they have to account for it and can expect to receive some criticism in the Chamber.
I suggest that the first point that stands out about the special report that we are discussing is that it relates to a parliamentary success story, and a House of Lords story in particular. It is a story beginning with the recognition of an increasing curtailment by government of the parliamentary right, and duty, to scrutinise proposed ministerial legislation, an increase causing—to quote a 1992 report—“considerable disquiet”. A remedy was then proposed. That report stated that a delegated powers scrutiny committee would,
“be well suited to the revising function of the House”.
The story culminates in the establishment of your Lordships’ committee, in the sensible limitation of its remit and in the general recognition that the committee is there to address an important need—and that, with the advantage of some 20 years’ experience, the committee generally addresses it well.
The report also demonstrates that the originating problem is ongoing. Rather like a virus, it mutates. Unlike a virus, however, there are already antidotes, which in this report your Lordships’ committee endeavours to prescribe. I must be selective, given the list of speakers whom your Lordships will wish to hear. Let me select the important statement that the report makes that it is the practice of the committee to try to take a consistent approach in its judgments as to whether a strengthened power proposed in a Bill is appropriate to be delegated by Parliament to Ministers at all and whether, if it is, it will be subject to an appropriate level of parliamentary scrutiny, not merely by means of the familiar negative procedure or the affirmative procedure but by the super-affirmative procedure or whatever variant may be proposed. Consistency on the committee’s part is obviously desirable and necessary.
The trouble is that Bills come forward with “marked differences” in their provision for strengthened parliamentary scrutiny, as my noble friend has already said. As the report states, it is that variation that has led our committee to undertake the analysis at its heart. Here I agree with what my noble friend says about Table 1—and I would add Appendix 2—of our report. The contents fully justify that reaction. The detail certainly illustrates the outstanding service that we receive from our clerks. They have led the committee to recommend that—here I paraphrase—when proposing a strengthened scrutiny procedure, the Government should normally use an existing model. I shall explain the basis for that decision. I am personally very glad that the Government have effectively accepted this. It would be helpful to the House if it is brought into practice. That would be highly desirable and helpful to the public.
The Government have so far been less accommodating —my noble friend referred to this, too, so I can be brief about it—about adopting undertakings given by the previous Government, made during the passage of Clauses 12 to 19 of the Legislative and Regulatory Reform Bill in 2006. These are discussed at paragraphs 21 and 22 of our report, and they are of such a character that they would, if generally adopted, have an effective impact on future attempts to legislate in this way. That is a very important matter to consider. I hope that the Government can be induced to agree to adopt the undertakings given in 2006 legislation. It was a little disappointing to find from their report that they are considering this and will report in due course. Our report was published in July and the response is, I would respectfully suggest, rather overdue. I hope that it will be favourable.
I want to end without striking a churlish note. This report and the history leading to it serve to remind us that effective parliamentary scrutiny of delegated power, although it needs nurturing, is now strongly embedded in our governance. Accordingly, those inclined to perceive an irresistible progression of executive power can take heart from this afresh.
Baroness Andrews
My Lords, it gives me great pleasure to participate in this debate and I congratulate the noble Baroness on having secured it. I support what she said about the excellence of our report and thank her for the comprehensive way in which she set out the background to the report. It is a pleasure to serve under her wise, inclusive and very firm leadership. I must ask the forgiveness of the House if I cannot stay for part of the debate, but I shall be here for the end. The business of the House has gone slightly awry this evening.
Like the noble Baroness, I shall say a few words about the context of statutory instruments and their role in policy. In terms of parliamentary architecture, it is obvious that the DPRRC was a hugely important innovation in the bastion of parliamentary scrutiny. It is a model of scrupulous attention and is unique. It concentrates the minds of Ministers and departments very well. I remember, as a departmental Minister, the collective groan that would go up in the department if the DPRRC recommended that we change a negative to an affirmative instrument. We were always very conscious of the tightrope we trod. We listened, and for good reason, because essentially what impacts upon people’s lives in terms of legislation is not primary legislation but the statutory instruments. I once saw a statistic—I cannot stand it up but others may be able to—that 80% of the laws as they impact on individuals are transported through statutory instruments, whether that is welfare benefits, food safety, planning requirements or competition across the NHS. The trouble is that few people outside Parliament are au fait with the way that statutory instruments work or are debated. We should try to address that obscurity.
Secondary legislation serves government well. It served Henry VIII well and consolidated his powers of dictatorship. It serves his successors well, too. Sometimes, there is no mistaking the Government’s intention. There are those of us who still clearly remember the Public Bodies Bill, where the Henry VIII powers were used so blatantly and deliberately that they shocked the entire cast of the DPRRC to its core. The committee and this House brought the Government to book on that.
More often, Ministers argue rightly that secondary legislation is simply a practical solution to implementing change in an uncertain world. It enables flexibility and reflects a willingness to respond to changing circumstances. There is the impossibility of loading all the detail, implementation and enforcement into primary legislation. Yet that is a secondary weakness. In the interval as we waited for this debate to start, I added up the number of SIs that have been and will be before the House between 27 February and 19 March. There are 38 sets of regulations in that short period, with six yesterday in the Moses Room.
The irony is that while much of the effort goes into writing and rewriting Bills, not least in response to egregious errors, secondary legislation, which requires enormous care and attention to detail, tends to suffer from the lack of both. It is also a victim of time. We have lost count of the number of times we have desperately needed regulations before this House before the Report stage of a Bill, only to be told that we could not have them because they were in draft and officials were working hard but could not produce them.
It is for this reason that I am a firm supporter of the recommendations made by the Goodlad committee, on which I had the honour to serve, to improve the way we make legislation, train Bill teams and discuss the issues with draftsmen. Our task in the committee is to determine whether the level of delegation is right. As the noble and learned Lord, Lord Mayhew, said, tempting though it is to trespass into policy, we are always brought firmly back to the point that that is not our business. But we should ask the following questions. Have Ministers taken too many powers unto themselves? Is that deliberate or accidental? Is the level of delegation appropriate? Have the officials really thought about the alternatives?
Most of the time, as we find, delegation is appropriate. However, given the various scrutiny procedures and the variations they impose, as documented in the report, it is not surprising that this House, let alone Bill officials and draftsmen, gets confused. Sometimes, the Explanatory Memoranda that come before us are disingenuous in terms of the arguments about the level of delegation proposed. Sometimes, for example, departments misunderstand, wilfully or not, the role of precedence. Sometimes it seems that the subtle difference between negative and affirmative regulations, or the justification for the most severe of regulatory structures—the super-affirmative—have not been sufficiently on the departmental radar. No wonder that our report calls this a,
“complex patchwork of procedures”.
While reflecting on that, we have been provoked by more recent and specific changes that have introduced yet more variations and at the highest levels of the Henry VIII procedures. The noble and learned Lord, Lord Mayhew, said that we must not be churlish. I do not want to be churlish because we welcome any enhanced role for Parliament. However, the new variations are simply, and as we describe them, frankly, unhelpful. They confuse an already confused picture. The report lists the variations in terms of primary legislation, the multiplication of different models, the variation of procedures and the delegated weight, and the inconsistency in requiring whether supporting documents should be laid before Parliament. Equally frustratingly, an uncertain vocabulary adds another layer to that bank of rolling fog. We have super-affirmative versus enhanced and varying terms for the responses that are required to committee recommendations.
At least the Government agree with us that the muddle must stop. Like the noble Baroness, Lady Thomas, I am grateful that the Government see the need to stop improvising, to resist the temptation of making any more new variations to an existing and strengthened procedure, and to introduce consistency by undertaking to lay supporting documents setting out the detail of and rationale for any proposed orders under Section 19 of the Localism Act 2011.
However, that sensible response is, for me, overshadowed by the fact that, as noble Lords have said, there is genuine uncertainty about the future use of LROs—the most draconian of all forms of delegated legislation. The previous Government established the convention that LRO procedures would not be used to force through controversial legislation or when a scrutiny committee of either House had opposed the proposition. Why have the Government apparently refused to honour this? Why are they so silent on that point? What is so difficult about that aspect of accountability and good government? That is bound to raise suspicion, perhaps for the wrong reason.
I am bound to say that my fears have been compounded by the evidence that the Government are trying to reduce consultation procedures. Where does this sit with Mr Francis Maude’s commitment to greater transparency and open government? When will the Government learn that, in the long run, it is infinitely better to take people with you than to press on regardless of how those who are affected by the legislation see it and will have to implement it? I hope that the Minister can give us some reassurances today.
Finally, under “any other business”, I want to support what the noble Baroness, Lady Thomas, said about the way in which Parliament deals as a whole with affirmative resolutions. There is no doubt that the present situation is deeply unsatisfactory for everybody. The choice between a debate on unsatisfactory regulations where not even the most perverse consequences can be ironed out, challenged, or removed, and the cliff edge of a fatal Motion which wrecks the entire process, the good bits and all, serves no one. It does not serve the Government, who may have to retrieve their mistakes months later; it does not serve the credibility of Parliament, whose job it is to help get legislation right; it does not serve the purposes of this House; nor does it allow us to undertake our specific responsibility to make government think again and think carefully. That is what we do. It certainly does not serve people in the community who have to live with the consequences. We need a third way: an opportunity to nudge government without humiliating Ministers; an interim stage to consider regulations on the understanding that the Minister can take them away to rethink them. It might be a counsel of perfection in some cases—some regulations one would not want to see ever again—but, nevertheless, it would make for better law and, often, more humane solutions.
I hope that the Procedure Committee will listen very hard to what is said in the Chamber and act on it. I conclude by congratulating the committee on a good piece of work. I thank our clerk again for initiating it and I look forward to the Minister’s response.
Lord Marks of Henley-on-Thames
My Lords, I join my noble and learned friend Lord Mayhew and the noble Baroness, Lady Andrews in paying tribute to the chairmanship of the Delegated Powers and Regulatory Reform Committee of my noble friend Lady Thomas of Winchester. She consistently chairs meetings of our committee with a combination of efficiency, understanding and charm that enables even the driest of our debates to be enjoyable and interesting and, generally, to lead to conclusions in which we all have confidence.
As has been said, the committee performs a valuable function and performs it well, but there is considerable force in the central thrust of our special report. That is that the burgeoning range of arrangements for parliamentary scrutiny tends to deprive Members of this House of the ability quickly and simply to assess whether Ministers’ exercise of delegated powers will be adequately or appropriately supervised and controlled.
It is, of course, gratifying that, in general, the recommendations of the committee are accepted by Ministers, so that the work of the committee is, to that extent, effective. However, there are occasions when the committee rightly feels that the level of scrutiny should be a matter to be considered by the whole House. This is particularly true when strengthened scrutiny procedures are being considered. On such occasions, it would be helpful for Members of this House if the possibilities were generally limited to a few well understood procedures. That recommendation is at the heart of our report. The Government have promised to move in that direction, and this House should be astute to monitor how serious and disciplined the approach of the Government is in future.
I shall follow up the suggestion that my noble friend Lady Thomas made towards the end of her speech, which was supported by the noble Baroness, Lady Andrews, that there should be a better, more effective and more detailed specific way of scrutinising delegated legislation that is subject to the affirmative resolution procedure. The regret Motion, which is a familiar procedure in this House, is a blunt instrument indeed. Fatal Motions are even blunter and the House is understandably reluctant to entertain or to resort to them. If passed, a regret Motion gives the Government an opportunity to think again, but it does not compel them to do so. As a procedure, the regret Motion has two important flaws: first, it is entirely non-specific and while it is common that the Motion sets out in general terms the basis for criticism, it does not enable the House to consider and express a view on particular flaws in the instrument proposed nor does it give the House the opportunity to suggest alternatives or amendments that might make for better or more effective secondary legislation. Secondly, the regret Motion is generally ineffective in practice, even if it is successful. Generally, it is an instrument not of constructive scrutiny, which is the proper role of this House, but of outright opposition, which may be out of place, particularly given that, ex hypothesi, the enabling legislation has already passed through both Houses.
The two-stage process suggested by my noble friend would answer those criticisms. I fully appreciate and agree with her that delegated legislation is of its nature a matter for Ministers, subject to the appropriate level of parliamentary scrutiny. It is therefore not appropriate for us to introduce a fully fledged procedure for amending delegated legislation. That would be contrary to principle and the whole point of such legislation. However, I suggest that there might be many ways of achieving the objective of enabling the House to have a more directed and specific way of looking at draft instruments. My noble friend’s suggestion is certainly one which offers that prospect. On the first occasion that a draft instrument came before the House, the House would be in a position to suggest amendments that might improve it and to invite the Government to consider them. The Government would then have the opportunity to do so, knowing that if the will of the House were ignored, they would run the risk of being defeated when the draft was brought back to the House unamended. If, on the other hand, the Government wished to amend the draft, they could do so and bring the amended draft back to the House for approval.
I am not suggesting that this procedure would or should be invoked in every case, but it would be sensible for it to be considered and tested. I suspect that its introduction would probably not require any formal change of procedure. The House, the usual channels and the Government could then determine when such a procedure should be used and monitor whether such a new procedure added to the effectiveness of the House in scrutinising secondary legislation. I suggest that it almost certainly would.
Baroness O'Loan
My Lords, it is a great pleasure to participate in the debate this evening. In common with my fellow members of the committee, I want to express my appreciation to the chairman, the noble Baroness, Lady Thomas of Winchester, for the way in which she conducts the meetings and the business of the committee.
We are discussing specific issues tonight but they arise in the context of the volume and complexity of legislation passing through these Houses, which has grown so much over the years. We have only to look at the most recent public legislation figures for the last Session. In 2010-12 some 80 Bills came before the House; 10,000 amendments were tabled in the two Houses and, of these, 25% were accepted. In the same period, 9,432 measures of delegated legislative instruments were passed. That is a huge volume of new law cascading forth to be understood and applied. It is vitally important in cases that require scrutiny that it is properly carried out so that Parliament may achieve and carry out its functions. There is significant interest in the delegated legislative scrutiny processes, and studies are presently being carried out.
Many of the measures which issue as delegated legislation quite simply do not come for approval before any committee. About 2,500 of the 10,000 actually came to the Secondary Legislation Scrutiny Committee. Many of them are simply passed into law and the Delegated Powers and Regulatory Reform Committee has no power of scrutiny over delegated legislation introduced after the passing of an Act. Such scrutiny as does occur is the responsibility of others. However, questions may rightly be asked about whether there is sufficient scrutiny of the huge volume of delegated legislation, currently running at about 10 measures every day.
The committee examines each occasion on which power is delegated. For example, most recently, the committee was satisfied that it was appropriate for the orders prescribing rates of welfare benefits to be subject to no parliamentary control. The Bill leaves the Secretary of State and the Treasury with very little discretion so there is very little control that the House could usefully exercise. The role of the committee in that context is necessarily limited but it will consider whether any Bill contains delegated legislative power that is inappropriate and examine each occasion on which there is a delegation in any Bill.
For the general public there will be no requirement or even will to examine many of these measures, but there may be occasions when they need to know the law. They must find their way through a huge quantity of legislation and then interpret the measures, which frequently refer to a range of other measures, in order to apply the law. Such is the volume of legislation that the limit on available parliamentary time, together with the complexity of particular measures, means that legislative power is more frequently delegated to Ministers and others.
The chairman of the committee, the noble Baroness, Lady Thomas of Winchester, has explained the role of the Delegated Powers Committee in scrutinising Bills to assess the appropriateness of each occasion and the manner in which the exercise of the delegation of the legislative function occurs.
The Government decide which measures should be placed in scrutiny. Perhaps the most potentially sensitive measures are those that seek to amend primary legislation through the use of secondary legislation—Henry VIII powers. We devote particular attention to such measures, although in many cases the content of the measure is not contentious. However, the essence of what we do is to determine whether there is any inappropriate delegation and whether legislative power is delegated subject to an appropriate level of parliamentary scrutiny.
The committee is watchful. We ensure that we do not consider matters that are ultra vires the committee, no matter how tempting that may be on occasion, and it is tempting. We are also cautious, ensuring that when we advise the House we do not act hastily or inappropriately. Thus in 2010-12 we made only 55 recommendations to government, 48 of which were accepted. In this Session we have made 28 recommendations, of which 23 were accepted.
Noble Lords have described the variety of mechanisms through which delegated legislation can be scrutinised. The language in which we describe these procedures may be historic and can probably be improved. As a House I think we are very reluctant to refuse to affirm legislation or to challenge it. It could be otherwise. The committee has developed an almost invariable practice of recommending the affirmative procedure where there is no upper limit to maximum civil or criminal penalties in a delegated power to make orders or regulations. We have developed a series of standards which we apply.
The recent development of a number of super-affirmative or enhanced affirmative procedures, 11 in all under particular Acts such as the Northern Ireland Act 1998 and the Localism Act 2011, are examples of that. However, as the committee has made clear in the past, the insertion of a super-affirmative procedure cannot by itself bring a misconceived delegated power within the bounds of acceptability. While accepting, indeed admiring, the ability of my noble colleagues to find their way around the myriad conventions and procedure governing the passing of legislation, I am fairly sure that there are not many Members who could state the powers attaching to the exercise of each of the different enhanced scrutiny procedures. They are laid out in Appendix 1 of the fifth report, including powers such as that to require the laying of supporting materials; the requirement of consultation; and the power for the relevant committee to veto an order.
Such is the complexity of the current possibilities that the committee has recommended that the Government should not normally use new, enhanced security procedures, but rather one of the existing models. This recommendation has been accepted by the Government, as has the accompanying recommendation that if the Government propose the creation of yet another procedure, they should explain the reasons why.
There is such a variety of models now in use, each with its own requirements, that it should be most exceptional for any new type of procedure to be introduced. The committee has yet to receive a response from the Government as to whether they will confirm the undertakings given by the previous Government, which have been referred to by noble colleagues tonight, under the Legislative and Regulatory Reform Act 2006, the Localism Act 2011, and so on.
The Companion to the Standing Orders and Guide to the Proceedings of the House of Lords states that there is no set time limit for government responses to reports from the Delegated Powers and Regulatory Reform Committee, as these need to be made, and amendments tabled, to the Bill in question. However, this recommendation affects potential draft orders to be made under legislation passed in 2004, 2006 and 2011. It is clearly desirable that the Government respond rapidly and positively to the statement made by the committee in paragraph 21 of the report. Similarly, the Government were asked by the committee to put proposals to the Procedure Committee for how the House will scrutinise draft orders under six other Acts. It is welcome that the Government have agreed that those measures should be scrutinised by the committee.
Scrutiny in all its forms is a vital part of the legislative process. That part of the scrutiny which is carried out by the Delegated Powers and Regulatory Reform Committee is vital, as it goes to the heart of the exercise of the democratic mandate which Governments have by virtue of election. Where the Government seek to legislate to confer a power to delegate matters which are properly the prerogative of Parliament, then the committee must exercise its powers by applying standards to determine that this has happened, as occurred during the highly controversial passage of the Public Bodies Act 2011. The committee stated that if the House could find no overriding reason or exceptional circumstances which justified the inclusion of Clause 11 and Schedule 7—those powers which allowed the Minister to add any of 150 bodies or offices listed in Schedule 7 to any of Schedules 1 to 6, and hence to make them subject to abolition and other changes without further parliamentary intervention—the committee would recommend that they should be removed from the Bill. The clause and the schedule were both removed from the Bill.
This report is designed to ensure that no further complexity is introduced into our scrutiny procedures. It is modest in its requests. It should serve as a useful tool for those who seek to understand the processes which currently exist. The work of the House is complex and demanding. New, wider procedures for the scrutiny of delegated legislative instruments would possibly be beneficial to the quality of the legislation passed. For the present, however, I look forward to hearing the Minister’s response to the proposals.
Lord Haskel
My Lords, to most people outside Parliament, and to many inside Parliament, “delegated powers” is an arcane topic best left to specialists— something rather technical and dull. They are wrong. They are wrong because, as the noble Baroness, Lady O’Loan, reminded us just now, delegated powers are central to our democracy. I am grateful to the noble Baroness, Lady Thomas, for leading this debate, and for the skill with which she has led our committee.
The noble and learned Lord, Lord Mayhew, reminded us that Ministers cannot do everything, so they delegate some of their powers. In a democracy it is essential to see whether legislative power is delegated inappropriately, and to ensure that this scrutiny is carried out to an appropriate degree. The noble Baroness, Lady Thomas, reminded us that because of this the House became concerned about the unlimited discretion which some legislation gave Ministers in delegating powers by order or by secondary legislation, and so it formed a committee to scrutinise this aspect—and quite right too. That is entirely in keeping with the revising function of this House.
When legislation is proposed, the method of scrutinising delegated powers should be contained in that legislation. Some legislation makes no reference at all to scrutiny by Parliament. Some can be laid before Parliament and will be subject to no further debate but generally there is an affirmative or negative procedure, or a super-affirmative procedure, for scrutiny. However, in recent years many variations have been introduced; many Bills introduce their own form of scrutiny, which are listed by our report. As the noble Baroness, Lady Thomas, explained, the real purpose of the special report is to draw the attention of your Lordships to these variations of procedure and to make the point that they are helpful neither to Parliament nor to the public’s understanding of our work. I join the noble Lord, Lord Marks, in hoping that the outcome of this debate will be to arrive at some form of consistency and to rationalise the range of variations.
Not only your Lordships’ committee is concerned about this. When he was Lord Chief Justice, the appropriately named Lord Justice Judge said that his deepest concern related to the proliferation of so-called Henry VIII clauses that gave Ministers power to amend or repeal legislation by means of secondary legislation. He said that this would have the consequence of,
“increasing yet further the authority of the executive over the legislature”.
This is a warning of which your Lordships must take note.
It is, therefore, part of our duty to hold the Executive to account, and relative to this is the huge number of orders and regulations that come before your Lordships. All have to be scrutinised for delegated powers, and I cannot let this moment pass without thanking and congratulating the clerks and staff who run the Committee Office. They work under a lot of pressure so that the committee’s report on each item is published in time for your Lordships’ consideration. There are many tricky legal points, which our legal advisers, Peter Milledge and Allan Roberts, have to take into account. Their memory of precedent is quite phenomenal, and so are their tact and patience—all of which enable us to be consistent. I put my thanks on record together with the thanks of other noble Lords. Peter has been promoted, and so I welcome Nick Beach, who has moved up to Peter’s old place.
As I said, the proposals in this report are designed to improve the effectiveness of scrutiny in your Lordships’ House. One proposal regarding legislation is to standardise the procedures. We must also get an explanation of why the normal procedure will not work. However, what about orders and regulations? Most require Ministers to undertake consultation or lay supporting documents so that scrutiny can be thorough. Again, there has been a variation in the timing and requirements, and this, too, requires rationalisation. Some of the variations are contained in the original Bill.
Different Bills and Acts require orders to be scrutinised by different committees. However, as our report points out in paragraph 28, for six of the procedures the House has been unable to nominate a committee to undertake scrutiny of draft orders when they come along. It became urgent for the Leader of the House and the Procedure Committee to decide how the House would scrutinise draft orders under these Bills. The Bills are listed in our report. I am pleased to say that the Government have now indicated a response to this. I hope that your Lordships will accept these recommendations in the report as they will facilitate scrutiny.
When preparing for this debate, I learnt that at the height of the banking crisis, the Banking (Special Provisions) Act 2008 gave the Treasury the power to repeal any relevant statute bearing on the Act or any rule of law. Of course, this went through at a time of crisis. None the less, it is alarming because this is exactly what Henry VIII had in mind when he introduced his Statute of Proclamations in 1539. The recommendations in the report will help to ensure that this does not happen again in any future crisis.
Lord Butler of Brockwell
My Lords, I endorse the tributes which have been paid to the committee’s staff, advisers and chairman. They are well deserved.
It is indeed gratifying that the Government have accepted the majority of the committee’s recommendations. However, as has been pointed out, they have not responded to the committee’s recommendation made last July that they should clarify whether they will confirm undertakings that, in respect of draft legislative reform orders under the Legislative and Regulatory Reform Act 2006, they will not use those procedures for highly controversial changes and will not pursue such orders in the face of opposition from scrutiny committees in either House. Nor have they confirmed whether they will give similar undertakings in respect of draft orders under Section 5 of the Fire and Rescue Services Act and Sections 7 and 11 of the Localism Act 2011. It really cannot have taken since last July for the Government to decide whether they are willing to give such undertakings. I hope that tonight the Minister will give the Government’s response to those recommendations.
As the noble Lord, Lord Haskel, said, these procedures may seem technical, even arid, but they are important for this House’s role in scrutinising the Government’s legislation—a role for which the House has a deservedly high reputation. So much of the detail of the Executive’s lawmaking is done these days through delegated legislation that it is important that the House scrutinises that delegated legislation as effectively as we do primary legislation. In that context, I support the proposal of the noble Baroness, Lady Thomas of Winchester, that the House should consider rationalising the committee structure for the consideration of statutory instruments and should seek to work more closely with the other place through Joint Committees. Unlike primary legislation, which the two Houses consider sequentially, we frequently consider many statutory instruments simultaneously. In those circumstances, it would make more sense for the Houses to work together more closely through Joint Committees.
The noble Baroness, Lady Thomas, supported by others, suggested that in the case of controversial orders this House should be given two bites of the cherry—specifically, that there should be a debate some time in advance of the occasion of the House having to decide on an order so that the Government can take account of views expressed before bringing the order for the House’s decision.
I refer to the recommendations which the noble Baroness, Lady Thomas, described as more confrontational —that is, those made in respect of the scrutiny of delegated legislation by the Goodlad committee, on which I served. That committee pointed out that, despite a 1994 resolution by your Lordships’ House that it has,
“unfettered freedom to vote on any subordinate legislation”,
it has used its power to vote down secondary legislation very rarely indeed. This produces a strange unevenness between the House’s scrutiny of primary legislation and that of secondary legislation. The House does not hesitate to vote on, and often defeat, the Government on primary legislation, thus giving the Government the opportunity to think again. Why are we so reluctant to vote on secondary legislation?
The noble Lord, Lord Roper, whom I see in his place, pointed out to me that there is a difference between primary and secondary legislation. With primary legislation the Government can always resort to the Parliament Acts; however, that is of course the nuclear option. What normally happens is that when the Government are defeated in this House on legislation, they consider the matter further and either accept this House’s view or reverse it in another place. Similarly, if the Government were defeated in this House on secondary legislation, it is not beyond the wit of the Executive to bring back legislation if, having considered the matter, they wish to follow the same course in a form similar to that which they presented before.
I therefore hope that the Government and the House will give serious consideration to the Goodlad committee’s proposal for an alternative way of achieving the objective of getting the Government to think again. The proposal was that the House should pass a resolution reaffirming its freedom to vote down delegated legislation but assert that, when it does so, its purpose is to give the Government the chance to think again and that if the Government relaid a substantially similar instrument, and the Commons passed it, the Lords would not vote against it for a second time. That would be an alternative way of achieving the objective that the noble Baroness, Lady Thomas, has described—namely, giving the Government an opportunity to take account of the House’s views before passing secondary legislation. That would be in line with the House’s procedures on primary legislation.
This is one—just one—of the recommendations of the Goodlad committee on which the Government have so far remained studiedly silent. I know that if the noble Lord, Lord Goodlad, had been able to stay and take part in this debate, he would have asked the Minister when we could expect the Government to give some response to that recommendation. I hope that he will be able to provide some indication in his reply.
Lord Soley
I join everyone else in thanking the staff of the committee and I congratulate the noble Baroness, Lady Thomas, on the way that she chairs it and on producing the report. It has been very helpful.
For many years, I have had a concern that crosses over Governments: we have been increasing the amount of legislation by too much and, I am afraid, seeing it being increasingly badly drafted. I know that there are many reasons for that but the net result is that we end up with delegated powers that fill me with growing concern. As several noble Lords have said, if you read the words, “Delegated Powers and Regulatory Reform Select Committee”, you would think that a soporific way of starting the day. In fact, it is not just dry, it is arid at times, but—and this is a most important “but”—it is extremely important because it is about the way in which Parliament can control the Executive and what the Government are doing. If you use statutory instruments and other delegated powers excessively, unless you are very cautious about it, you will find that Governments have unexpected powers.
If people outside this House think that the subject is dry, they would be less inclined to think so when they consider the number of times that the committee has looked at a delegated power that would, if we had not had it changed, have allowed a Minister to increase fines to an unlimited level without an affirmative resolution of this House. Indeed, a quick look at tomorrow morning’s business in the Delegated Powers Committee tells me that there is another one on the Groceries Code Adjudicator Bill. If we do not get it changed, the ability of a Minister to fine by delegated power will have an unlimited price put on it. If people in the street knew that, they might quite rightly be a little alarmed.
I think strongly that Parliament has got to get better at dealing with scrutiny. I have held this view for many years. This House is very good at it but, having said that, with the increase in legislation, every time we pass more—and I am realistic enough to know that we cannot go back many years to when you could have far less legislation, because we live in a much more complex society—we have to think about the extra powers that government is taking, how we scrutinise them and how we hold them to account. That is really the context of this debate and it is very important.
I am glad that the Government have accepted a number of the proposals in this report. I do not wish to repeat them; I strongly agree with the proposals for improvement made by the noble Baroness, Lady Thomas, and echoed by the noble Lord, Lord Butler, a moment ago. The other key one, of course, which the Government have accepted is that they should not keep expanding the variety of orders that are made, which is increasingly confusing to members of the committee, never mind Members of the House. Heaven alone knows what would happen if someone outside this House tried to make sense of it.
At times like this, I often reflect that we used to make the assumption—if we go back a very long time in our history—that we could expect British citizens to know what was expected of them in law, and that they would know if they were in danger of breaking the law. It would be very difficult for anyone to know that now, including a qualified lawyer. This is why it is getting so much more important in our more complex society. I also hope that the Government will fully accept the recommendation to give reasons when they vary one of the existing orders. That is important.
We asked the Government—this has been mentioned a couple of times, but I want to repeat it—to confirm undertakings by the previous Government in respect of draft orders laid under Section 14 of the Legislative and Regulatory Reform Act 2006, the Fire and Rescue Services Act 2004 and the Localism Act 2011. I have looked again at the letter of the noble Lord, Lord Strathclyde—the former Leader of the House—written in November in response to our report, which was published in July last year. The final sentence of that letter says:
“Further consideration is being given to this point, and I will write to provide a full response in due course”.
Having had a long career in politics, when I hear a Minister use the phrase “in due course” I know that due course really means a long meandering river through the countryside that would make the Amazon look like a local village stream. It takes forever. It is frankly absurd that an answer to this question could not have been given earlier. If there is one thing I would ask the Minister to do clearly tonight, it is to give an undertaking that the Government will answer that question fairly soon. By fairly soon, I do not mean “in due course”; I mean, I hope, in the next month or so. It is unreasonable not to do so.
The committee also suggested that strengthened scrutiny should take place in respect of powers that were not actually Henry VIII powers, but very close to being such powers. That is important; we need to find a way of doing that. While I do not wish to elaborate on what has already been said about such powers, as a committee we clearly have to be attentive not only to Henry VIII powers but to those which are not quite Henry VIII powers but nevertheless give Ministers considerable powers. We need additional powers on that.
I do not know how many members of the committee or others would share my view, but I am in favour of the suggestion in paragraph 25 of the report:
“The House may wish to consider whether it might be more appropriate to take the bolder course of rationalising the entire range of current variations by legislation”.
We need to do that. I appreciate that that would need legislation and that it could not be quick. However, it would enable us to think much more strategically about how we approach this and to deal with the point rightly raised by the noble Lord, Lord Butler, with which I agree, that a number of these issues should be dealt with by a committee of both Houses. Put simply, at times both Houses are looking at the same things without knowing that the other House is considering them. I am tempted by that paragraph to say that we should go much further on this.
It has been pointed out already, and I do not wish to labour it, that the House does not always nominate a committee to undertake scrutiny of draft orders. At the moment, there are about six draft orders before the House which are not nominated to any committee. That again makes the suggestion of having a more strategic look at this problem quite attractive. The variety of these orders, the way in which they are being changed, the fact that some are not looked at at all and the fact that both Houses often look at some of these things simultaneously makes me think that a more strategic view would be better. It also could focus on how the two Houses emphasise the fact that Parliament must be able to control the Executive. That underlying principle is always there. If we could take a more strategic view, it might make a lot of sense.
It would also enable us to look again at some of the language we use. Saying to a person outside this House that something is a draft affirmative order or a super-affirmative order is more confusing than it needs to be. I sometimes think that the Henry VIII phrase is quite useful, because it implies authoritarian government, but it is not really meaningful to many people outside. Although I recognise the importance of having legal terms that at times have to be defined in legal or parliamentary drafting language, we should always bear in mind that unless we want everyone to have legal aid and to be able to see a solicitor, it would be a good aim for Bills to be able to be read and understood by an average member of the public. I know that that is a bit far-fetched but we should never lose sight of this: we are legislating for the public. It is the public who have to obey the laws, rules and regulations that are passed by delegated powers. We really have a duty to make legislation understood by them.
From an e-mail I received today, I understand that the Hansard Society is conducting a fairly detailed review of this whole area, which I very much welcome. I simply say to the Minister that perhaps he could take away the suggestion that that area is messy and not well understood. There is therefore a case for the House to find a way of reviewing it and seeing if we should not approach it by a form of legislation, as suggested in the opening lines of paragraph 25 of the report. Once again, I thank the staff and members of the committee, as well as the chair. Despite its title and, occasionally, its topic this can be a very interesting committee, where we do very important work which perhaps should be widely recognised.
Baroness Gardner of Parkes
I have been on the Delegated Powers and Regulatory Reform Committee for quite a number of years and I have served under a number of different chairman. We are very fortunate now in having the noble Baroness, Lady Thomas, and I congratulate her on securing this debate today. Tribute was paid to the various supporters and advisers we have had. In particular, Peter Milledge, who is now in charge of providing our legal advice, was mentioned. I should like also to acknowledge Allan Roberts and all that he did. During the early years when I was on the committee, he was the number 1. They worked very well together and clearly the committee continues to work well. The other point that has been raised many times about two bites of the cherry in selective cases is very valuable. However, I think that selective cases is right. You certainly would not want to turn it into something more general.
I was fascinated to read Hansard of 14 February 1990. Although I got my title in 1981, I had no idea of anything about this committee or even that it was being considered. As an Australian, and knowing nothing about Australian law, I was fascinated to see that Lord Rippon of Hexham—the person who introduced all this debate—referred to a report from Senator Rosemary Crowley and talked about this idea coming from Australia. Apparently Australia had it ahead of us here. He went on to say:
“She pointed out how zealous they are in Australia in dealing with Henry VIII clauses, how they can call upon the Minister to justify the powers which he seeks and the way in which they report to the legislature which can then decide whether or not the regulation or order-making power is appropriate”.
That is more or less what we do. He continued:
“Therefore, the Australian Parliament is enabled to legislate with open eyes. I wish we could say with complete conviction that we are doing the same in this country today”.—[Official Report, 14/2/90; col. 1410.]
The fact that we have this committee has made a tremendous difference. But when I was first appointed, I had no idea what all these terms meant. In fact, as time has gone by, they keep changing the terminology and it is pretty hard to keep up to date with it. It is desirable to have this debate for other Members of the House, who might never come to one of our meetings but often read the reports. People working on Bills are usually very careful to follow the recommendations that we put forward. For ordinary Members of the House to get some idea of what we do is very valuable indeed.
There were other contributions. I will never forget Lord Diamond. He evidently nationalised gas and he was determined to avoid it being privatised. He kept us here night after night, all night, while he argued on every single point. We got fed up with it, but nobody could do anything to stop him. He said that,
“we tend to deceive ourselves about the powers we have concerning delegated legislation. For example, where a Bill says that a proposal has to be approved by what we call for short the affirmative resolution, we tend to believe that that means something. It does not. It means nothing. It means that your Lordships can discuss the matter, full stop”.—[Official Report, 14/2/90; col. 1414.]
You can see that he had views of his own on these things.
Lord Beloff, who came in on the same list as I did in 1981 was a very famous historian and professor who set up the University of Buckingham and was a great character. He said that,
“there is also the fact that the volume of legislation which Ministers are persuaded or persuade themselves they need to introduce is of poor quality because little time is given to serious preparation”.
He went on to refer to Lloyd George setting up the welfare state and then said,
“how infinitely larger was the amount of parliamentary time given to a single Bill; how much wider in the country were the consultation and debate. We have debased the legislative procedure for the sake of haste”.—[Official Report, 14/2/90; col. 1421.]
All I can say is that that does not apply any longer. We now spend more and more time. If Lord Beloff was alive he would probably say that we were spending too much time on some of the things that we are debating here for hours.
It is interesting to see the comments from these people. Of course Earl Russell intervened: he had something to say on absolutely everything and was a fascinating character. He said:
“I warmly support the proposal for a committee”.—[Official Report, 14/2/90; col. 1425.]
To get that strength of feeling from him on that was really something.
I always thought that Lord Mishcon was the Peer with the golden words. I think I even said that somewhere in Hansard. He had been on the Greater London Council as the Labour Chief Whip. He had a great reputation there and was a very eminent solicitor. He could put anything into interesting words. He quoted something that had first been uttered some 58 years ago. He said:
“Your Lordships may feel that the price of slightly longer Bills is well worth paying if subordinate legislation is to be reduced”.—[Official Report, 14/2/90; col. 1427.]
That is exactly the opposite of what has happened in the world now. Subordinate legislation is growing and growing. Indeed, many people say that that is one of the problems. We are all very busy governing with subordinate legislation instead of primary legislation. He went on say:
“It has been said so often by Ministers that in this House noble Lords have the right to debate an affirmative resolution and to pray against a negative resolution … There is a tradition of reluctance to press disagreement to a division in the Lords”.—[Official Report, 14/2/90; col. 1427.]
That is still half true, but I would not say that it is entirely true. The noble Lord, Lord Marks, mentioned the defects in the Act, as have many others, and the opportunity that the noble Baroness, Lady Thomas, has suggested.
In October 1994 the fourth report of the Select Committee took up the fact that in 1992, as a result, presumably, of the 1990 debate, the Committee on the Procedure of the House,
“proposed that a Delegated Powers Scrutiny Committee should be established, ‘on a limited and experimental scale in the first instance’”.
Evidently it was so highly regarded, thought of, or effective—I am not sure which—that it was decided in 1994 that it should become a formal, permanent committee. I think that that was a very valuable thing to do.
My own contribution to the committee is limited because all I can do is look at things and try to exercise a bit of common sense. The only thing I can really claim to have had an input into was the very first ever regulatory reform order that we worked on. It was about pub licensing hours and referred to what I think were “minor variations” in pub licences. The order said that a variation need not be advertised in the local press or anywhere else. It could go through because the pubs would look after everyone and make sure that everything was fine, so there would be no problem. I went to a hearing in the borough where my daughter lives and discovered that it is quite a different thing if you live next door to a pub with a beer garden that wants to stay open until two in the morning because the noise spreads around all the nearby houses. I thought that it would be wrong for us to agree to it, even though the policy on regulatory reform was to simplify life and do away with a lot of bureaucracy and red tape. I agree with all that, but suddenly you found that you had fought your corner well at a licensing hearing, but the pub had gone back with what it described as a minor variation and, without you having any idea that it was even under consideration, it would suddenly be in place. I said that I thought it was not right and that we should have a consultation on it. The proposal then went out to all the local authorities and licensing authorities, and the response was really quite extraordinary. People felt very strongly about it. When it came for a decision by the committee, it was agreed that pubs would at least have to post a notice in the window of the premises so that local people, those who would be most affected, could see what was going to happen and would be given a certain period in which to exercise their right to object. I believe that that was the first ever regulatory reform change we made. It also set quite a good precedent for the committee in terms of assessing what really is and is not relevant and what is worth looking at.
It is a very serious committee and the volume of documents it deals with is pretty daunting. You have to read all the papers or you will miss out on what is important. Cases are presented thoroughly at our meetings. All the members speak and different views are expressed on many subjects, all of which is extremely healthy. I think that it is a marvellous committee which is greatly respected. It also works in with other committees such as the Constitution Committee. A lot of the Select Committee reports go with one another in order to make a complete whole. That is very important. This is a valuable debate because it might explain to Members of the House what we are doing and why we believe that it is important to carry on with our work.
Lord Filkin
My Lords, along with others, I thank the noble Baroness, Lady Thomas, on the one hand, for initiating this debate, but on the other regret that she invited me to take part in it, although that is perhaps churlish. I speak with respect for, but not much knowledge of, the Delegated Powers Committee and with too many years serving before the mast as chairman of what was then called the Merits of Statutory Instruments Committee. Having been there, I have an abiding interest in and commitment to the importance of this place’s scrutiny of secondary legislation, which is of course what we are debating tonight. I essentially want to ask the House whether those two committees, although they have undoubtedly improved the House’s procedures, have improved legislation. I do not think it obvious that the merits committee, at least, has, although I cannot speak for the Delegated Powers Committee.
I will advance the argument as to why. I start by reflecting on how government works. Many of us know how government works, either from the outside or the inside. Governments, quite rightly, are in power to do things. They have a manifesto—or even a modern version of it in the coalition agreement—and are massively busy and challenged, and are committed to delivering on what they think is either their manifesto or coalition programme and, they hope, getting another innings after the next election. Legislation is a necessary evil. It is a distraction from what Ministers really want to do but is necessary because that is how our constitution works. By and large, they want to get their legislation through the House as quickly, and with as little damage to it, as possible.
Ministers also believe they are right. Civil servants believe they are right, by and large, because they are usually more expert on a subject than most parliamentarians. Ministers believe they are right because they have to, otherwise they would not have the confidence to sustain doing a difficult job. That sense of confidence as a Minister or as an official does not make you sufficiently persuadable to change your mind, particularly when you have got to the position where you have committed your Government to legislation, in either primary or secondary form. It is not obvious that the processes of the House themselves will naturally lead Ministers to change their minds. Why should we expect that they will do so?
We know how we change their minds on primary legislation but let us consider, as my good friend the noble Lord, Lord Butler, has spelled out, what happens on secondary legislation. We cannot amend it, and it is quite right that we cannot amend it, for good technical reasons which I will not go into. We decide, although we are able to reject it, that we will not do so. By our own self-denying ordinances, we can neither amend nor reject an instrument: so why do we assume that that is going to change anything? The only thing that shifts Ministers and shifts policy is either the fear or reality of adverse publicity, or a defeat. That is a statement, for most of us, of the blindingly obvious. We get zero publicity on primary legislation, except when there is a defeat, and we get even less publicity—if you can have a negative—on secondary instruments, for pretty obvious reasons. It is hardly the stuff of the Dog and Duck. On that argument, we have a situation where it is not the media that will change Ministers’ minds but only defeats. However, we have said that we will never defeat the Government, for reasons that I struggle to understand.
The consequence of this—this is my central argument—is that the legislation that comes in through one door, in all its hundreds of pieces, exits the other door in all those hundreds totally unchanged. So what have we done in this processing factory to affect that legislation? I am open to persuasion that in some way the feel or quality of the aura of the legislation is better but the words are exactly the same. So what are we doing? Where is the evidence we are improving secondary legislation by our processes? I struggle to understand it. If noble Lords accept my argument—from too many years, probably, serving on the merits committee—that the processes are superb but that what the Chamber itself does is fundamentally flawed because it will not do anything about it when it thinks it is wrong, what should we do about it?
I will not waste your Lordships’ time on considering the alternative mechanisms. Wakeham made a very sensible recommendation, which was perfectly possible and came from a totally eminent committee. It was a very sane and sensible proposal. I thought that Goodlad, as explained by the noble Lord, Lord Butler, made an equally sensible one. These recommendations are significantly less frightening than our convention on primary legislation.
We defeat primary legislation up hill and down dale whenever we do not like the policy. It would be completely improper to defeat a secondary instrument when we did not like the policy because that would be to frustrate the will of Parliament, which had put that policy into practice in the primary legislation. So the only way that this House can legitimately reject a secondary instrument is because it is fundamentally flawed in some way, either in its execution or its policy design, or it does not actually reflect the instrument. In such cases, if the House thinks it is flawed, it ought to have the guts to do something about it and reject it.
Why do we get so excited about that? I do not understand it. As the noble Lord, Lord Butler, said so clearly, you probably could not bring an SI back next week but you could certainly bring an SI back in a month’s time with a better Explanatory Memorandum explaining why you thought the House was wrong and therefore you relaid the same order, or substantially the same order; or you said you had listened to the House and you thought it could be improved, in which case you would lay down a secondary order. The Government would lose a month or two on their processes; they might lose a bit of face—I do not think they would lose much face as not many people are watching—but as a consequence the House would have added something to the process.
Unless we are prepared to do something like that, with the greatest courtesy to my good friends on the committee, we are largely open to the charge of wasting time by debating these things, because debates by themselves change nothing. Unless we are prepared to reject bad secondary legislation, we would be better doing other things with our lives.
Lord Curry of Kirkharle
My Lords, I welcome the fact that the noble Baroness, Lady Thomas, has tabled this debate this evening, and I also welcome the committee’s special report. I recognise the crucial role that the committee plays in ensuring the adequate scrutiny of proposals put forward by Ministers in the other place.
It is encouraging that the report recognises that the existing scrutiny procedures around the Legislative and Regulatory Reform Act 2006 are robust. I declare an interest in my capacity as the non-executive chair of the Better Regulation Executive. I compliment the previous Government on taking the 2006 Act through Parliament.
Legislative reform orders are an important deregulatory tool at the current time to reduce burdens on business, but they are used only where there is no other legislative vehicle available. This has meant that only 18 have been made since 2006. Currently there are eight draft orders going through the process. More are likely to emerge from the Red Tape Challenge implementation but, again, only where no alternative vehicle can be found to progress these changes quickly.
The undertakings made by the previous Government have been referred to a number of times this evening. I understand that these were made when we did not know how the changes to the Act would be used in practice. I have looked at how the Act has been operating since 2006, and while I recognise some of the points made by noble Lords—I may be alone in making this comment—I am not entirely persuaded that it is necessary for this Government to renew the undertakings.
It is encouraging that the scrutiny process has been working well. The Act introduced a key safeguard with an effective power of veto for the committee. Any resolution to reject a veto commendation is taken on the Floor of the House without any time limit. As far as I am aware, neither scrutiny committee has felt the need to exercise its veto when considering draft orders.
I do not believe that the undertakings affect the ability of this House to debate important matters. The committee chooses the level of parliamentary scrutiny. Any legislative reform order that is more than just technical in nature will be debated, either in Grand Committee or the Chamber, and has to be approved in the Chamber. Noble Lords may disagree, but it strikes me that the level of scrutiny of proposals that come before the committee is at least as thorough as that of some Bills that pass through this House.
The 2006 Act is due for post-legislative scrutiny in 2014. I propose that this would be the time to review in detail the effects of the legislation. That is when we can establish whether the intended policy objectives have been met and, if so, how effectively.
Baroness Smith of Basildon
My Lords, I join other noble Lords in thanking the noble Baroness, Lady Thomas of Winchester, and her committee for the work that they have done in providing this report and securing the debate. I found the debate really interesting and highly relevant, which is something of an achievement when you think that we have harked back to 1539 and Henry VIII on numerous occasions.
I spent 13 years in the other place, where there is no such committee and not the same opportunity to have a report on delegated legislation. Despite the view of many that this matter is irrelevant and a bit technical, we have heard from a number of noble Lords about the huge impact that delegated legislation has on life. Since I have been in your Lordships’ House, I have found such reports to be invaluable.
It is a clear principle of our political system that the Executive have a right to implement their legislative programme—other noble Lords, including the noble Baroness, Lady Andrews, have made that point—but Parliament has an obligation to ensure that the laws passed are of the highest possible quality. Good scrutiny makes for good legislation and good government.
Most people outside Parliament, if they think about these matters at all, would be generally of the view that all legislation is debated in full by both Houses. I suspect that many would be surprised if they were aware of the volume and content of delegated legislation. Yet as the committee rightly points out, the context for the report is,
“the increasing practice of delegating significant legislative powers to Ministers, and the House’s continuing desire to ensure that appropriately robust scrutiny processes are put in place”.
It is clear that your Lordships’ House fulfils its role as a scrutiny Chamber, but it has to be recognised that the scope for scrutiny of delegated legislation is limited. The noble Baroness, Lady Thomas of Winchester, made it clear that it is appropriate to have delegated powers if they are used appropriately. I think that we all recognise that we can only accept or reject delegated legislation. For reasons of constitutional sensitivity, the latter happens rarely in the House of Lords, as the noble Lord, Lord Filkin, observed in his powerful comments. Acceptance or rejection is not a substitute for good line-by-line scrutiny, debate and possible amendment, but it is none the less beholden on us to do the best job that we can with such legislation.
Having sat in both Houses, I have no doubt that the scrutiny undertaken by your Lordships’ House is superior in this regard, and that role of scrutiny is taken very seriously and is fulfilled. As I have said, there is no equivalent committee in the Commons. The Procedure Committee in the other place has considered the idea, but it has never really got off the ground. It could be argued that its failure to have a similar delegated powers committee reinforces our role as a scrutiny Chamber, with the Commons perhaps accepting that as being our role and saying, “We'll leave it to the Lords to do this worthy, very technical work for all of us”. That is quite an imbalance and recognising the different roles of both Houses could be seen as a division of labour, but it also makes the scrutiny of delegated legislation here an even more important responsibility and one that we have to take very seriously.
The true value of scrutiny is in the capacity to revise and reject when required. Legislation of this kind cannot be amended and only withdrawn by government and retabled in another form, which is rare—although, coincidentally, it happened today on the health regulations. All this makes scrutiny of delegated legislation a bit of a blunt instrument and, as the noble Lord, Lord Marks of Henley-on-Thames, said, sometimes an inadequate instrument as well. That is why we should be concerned about the overreliance of Governments on this type of legislation. The report is very helpful in that regard.
The power to reject is available in rare cases. The powers that this House has in that respect were reaffirmed by the Cunningham committee in 2006. Its report on the relationship between the two Houses, which was accepted unanimously, said:
“There are situations in which it is consistent both with the Lords’ role in Parliament as a revising chamber, and with Parliament’s role in relation to delegated legislation, for the Lords to threaten to defeat an SI”.
That is in paragraph 229 of that report. On that point, the noble Lord, Lord Strathclyde, who was then Leader, said in communication with the Merits Committee:
“The Government welcomes the Committee’s conclusion that the opposition parties should not reject an SI simply because they disagree with it”.
The bar for rejecting delegated legislation—an SI—is set pretty high and is rarely used. It is all the more powerful because of that. Although your Lordships’ House can debate and, at times, vote on delegated legislation, it rarely uses that power, as we have heard. Yet tomorrow evening we have a vote on the Agricultural Wages Board. That is because an SI being heard in the Moses Room was negatived and now has to come before your Lordships’ House to be voted on. So there are occasions when this takes place.
Any significant increase in delegated legislation impacts on the ability of your Lordships’ House to effectively scrutinise it. The references to Table 1 in the report have been very helpful tonight. My noble friends Lord Haskel and Lord Soley, and others, pointed out the variations in the way delegated legislation had been scrutinised. That is not helpful to the work we do. More importantly, it is not helpful to the understanding of the work we do, both outside your Lordships’ House and with other noble Lords. The committee’s table is very helpful and makes it clear that there is a wide range of enhanced scrutiny mechanisms. Moves to simplify this array are extremely helpful, as is the committee’s recommendation that any additional procedures suggested in future should be accompanied by justification and explanation by the Government of the day.
The committee expressed concern as to whether the current procedures and the complexity in procedures are adequate given the increased use of delegated legislation. Given that increase, the Government should not think that this is an easy way to get legislation through. The comments made by my noble friend Lord Filkin were particularly relevant. Any Government must consider carefully in any piece of legislation that they bring forward whether it is appropriate to delegate order-making powers to Ministers. We have heard from many noble Lords—my noble friend Lady Andrews made this point—that clearly in many cases it is essential and reasonable to do so and we accept that. But as the committee notes, we may also want to look at why there has been such an increase.
First, there has been an increase in legislation generally. The noble Baroness, Lady O’Loan, gave some examples of how big that increase has been. There is also an issue of Bills coming to Parliament before they are truly ready—or “oven ready” as I have described them. I can think of two such Bills that I specifically worked on from the Front Bench. One was the Energy Bill in the last Session of Parliament. More than 50 pieces of secondary legislation will come from that Bill. That seems a huge amount and we have to question whether, if the Bill had come to us a bit later, some of those pieces of secondary legislation would not have been more appropriate in primary legislation.
One of the crucial parts of the Crime and Courts Bill—another Bill yet to come back to this House—is setting up a national crime agency, to be established through a framework document. That framework document was not available to your Lordships’ House even at Report stage, though it had been promised to us earlier. Given that that framework document will describe everything that the NCA is supposed to do and how it will do it, and so will be crucial to the establishment of the new agency, it would have been appropriate to have that before your Lordships’ House as part of the primary legislation. Instead it will be brought forward by order that will be unamendable and will not have same the degree of discussion and scrutiny. To my mind, it is an integral and essential part of that Bill. Again, it would have been better if that Bill had taken a little longer to come to your Lordships’ House and not been one of the first Bills off the blocks, so that that information was available to noble Lords.
The Welfare Reform Bill is almost entirely framework legislation. We are seeing so many regulations for the Health and Social Care Bill and for LASPO. All the Bills that I have mentioned were totemic pieces of legislation, highly political but with much of the meat left to delegated legislation. What opportunity has there been for Parliament properly to scrutinise the Government’s intentions and for this House to play its role in assisting the Government by looking at whether legislation can be improved?
When such a significant part of legislation is coming forward as delegated legislation, we need to delve deeper into the question of whether the Bill was really ready, whether it was oven-ready, before coming to your Lordships’ House. It is not appropriate for the delegated procedure to be used when it would have been entirely reasonable to expect that part of legislation —the NCA is probably the best example that I have used—to be in the Bill. A further question to ask is whether it is appropriate for the issue. I cite the report:
“One principle underpinning our work is that no level of parliamentary scrutiny can in itself make appropriate a power which it is inappropriate to delegate to secondary legislation”.
Finally, I turn to the other recommendations in the report. Comments were made on the existing models of scrutiny. I am really pleased that that was addressed by the committee, because good scrutiny requires good understanding of procedures. I entirely agree with the committee that variation leads to increased and unhelpful complexity. That has grown up and it is right to address it at this stage.
On the issue of supporting documents, specifically under Section 19 of the Localism Act, I share the committee’s bemusement. I cannot imagine why the Government would not want to publish supporting evidence and information to assist your Lordships’ House in considering legislation. It seems to me to be helpful to your Lordships’ House and to the Government. I would be interested to hear the noble Lord’s explanation on whether the Government accept the moderate recommendations of the committee. The Localism Act does not include a requirement for supporting documentation; but neither does it include a requirement that Ministers should give a reason why there is no supporting documentation. My interest is not just in the specific point on that but why the Government think that it is appropriate to move away from the principle of having supporting information. I cannot recall a precedent. I am not making a party political point, because there may well be precedents under the Government of whom I was a member, but I am genuinely puzzled and an explanation would be helpful.
Perhaps I may refer to the point eloquently made by my noble friend Lady Andrews about the undertaking given by the previous Labour Government, which is referenced in the report. It was made by Jim Murphy during the Second Reading of the Legislative and Regulatory Reform Bill. He said:
“I am giving a clear undertaking today that orders will not be used to implement highly controversial reforms, that they will not be forced through in the face of opposition from the Committees of this House and that the Committees’ views on what is appropriate for delivery by order will be final”.—[Official Report, Commons, 9/2/06; col. 1058-9.]
I agree with my noble friend Lady Andrews that it is disappointing that the Government have not yet endorsed that approach, but I notice that the House is to debate on Thursday an amendment to Standing Order 72, which refers to those matters under the Localism Act 2011 and Section 5E of the Fire and Rescue Services Act 2004. That is also mentioned by the committee in its report. The committee asks that the Government be very clear about whether they intend to give those same undertakings specifically in respect of those sections of those Acts.
Having read what the Government have put before the House for Thursday 7 March, I am not sure that it fulfils the function that the committee is asking for. It is a limited improvement. Unless I am mistaken—I read it quite hurriedly—it does not go as far as the committee would have liked. It merely states that it should go to the Merits Committee or the Delegated Legislation Committee. If the noble Lord could comment on that, that would be helpful.
In conclusion, it would be helpful if the noble Lord could clarify the Government’s position. All Ministers are aware that legislation benefits from scrutiny. I admit that it is sometimes uncomfortable at the time for Ministers to be scrutinised, to lose a vote or to lose part of a Bill that a Minister considers to be important, but it is often that legislation is proved and problems are prevented further down the road. The debate we have had today illustrates yet again that these responsibilities on scrutiny and revision are taken very seriously.
Suggestions and recommendations were made in the report and by speakers in the debate. It would be helpful if the Minister, in the spirit of your Lordships’ House doing the job that it is required to do as effectively as possible, could respond to those comments. I agree with the comments made by the noble Lord, Lord Butler, about the delay in the Government’s response. I understand that it happens—it has happened under all Governments—but when we are talking about such crucial matters as, in a sense, how effective your Lordships’ House can be in scrutinising legislation and, increasingly, delegated legislation, any guidance the Minister can give on the Government’s thinking would be extremely helpful.
Lord Wallace of Saltaire
My Lords, I approached this debate with considerable trepidation. When I first came into this House, I was told by several people that, after the Clerk of the Parliaments, the greatest expert on all matters of procedure was the then head of the Liberal Democrat Whips’ Office, Celia Thomas, who is now my noble friend Lady Thomas of Winchester. When I started to read into this subject, I discovered how little I understood about the processes of scrutinising secondary legislation and, indeed, about the difference between a remedial order and a legislative reform order. I now understand, and I hope I still will in a week’s time, but it has been a journey of exploration.
This has been a very useful debate, and I start by agreeing with the noble and learned Lord, Lord Mayhew, that this is a success story. What we have seen in this Chamber over the past 20 or 30 years is a gradual rise in its effective ability to give scrutiny. As a young academic, I was an adviser to Lords and Commons committees and I discovered that Lords committees were much more serious in many ways than Commons committees and much less partisan. Members had read their papers, they came and they asked about paragraph (15) and what precisely the Government thought they meant by it. That is, as the noble Baroness, Lady Smith of Basildon, said, a different function from that of the Commons, but it is a very useful function. We should be very proud of it and cling to it.
Much of the best work this House does is done in its committees, and I hope that will continue to be the case. There is a necessary tension between the Executive and the legislature and listening to this debate I was thinking that much of the press comment on British government is a matter of seeing a conflict between the Government and the Opposition, but there is also a very positive, necessary tension between the Executive and the Legislature, whatever that may be. We play our role—the Cross-Benchers and others in this House—by providing the detailed scrutiny that does not get on to the front page of the Daily Mail but does improve the quality of legislation. For that reason, I have more sympathy for the suggestion from my noble friend Lady Thomas of Winchester that we should move towards looking at draft SIs than for the Goodlad proposal that the House should assert its right to vote down. As the noble Baroness, Lady Smith, said, that should be regarded as the reserve option, the exceptional circumstance. Greater dialogue with the Government about progress on SIs is a much more effective way to influence.
When I first came into the House of Lords, I was asked what I thought the power of the Lords was. After a bit, I said, “I think it’s the power to embarrass”. That is quite an effective power in the dialogue we have with Ministers. The power to publish and to whisper to a visiting journalist that this Minister has not really got it right yet are quietly effective in the corridors of Whitehall, and that is the way this Chamber should operate.
A number of noble Lords suggested that the number of SIs and the area of subordinate legislation are growing. I am pleased to say that, from looking at the statistics, that is no longer the case. In the legislative year 2007, nearly 1,200 SIs went through. In 2011, there were some 750. Cynics might suggest that the longer Governments are in power, the more they are likely to resort to SIs. If that should be the case and this Government stays in power for long, I trust that Members of this House will point that out and keep Ministers up to the mark.
I have some sympathy with those who say that slower government is better government and that less legislation is better legislation. The problem, which we all recognise, is that in an era of 24/7 media and of lobbies insisting that Ministers should take on everything they are lobbying for, it is very difficult for Ministers to resist those outside pressures. It is thus up to Parliament to keep pushing back and saying, “Think about proportionality. Think about whether this is necessary. Think about whether this is desirable”.
I am fascinated—I now at last understand this aspect of Henry VIII powers. I thought when I first heard about Henry VIII powers that they were a way of keeping numbers in the House of Lords under control. I have sometimes wished that they might be reintroduced as a means of keeping the numbers down and allowing new blood to come in, so to speak. Henry VIII powers are clearly something we always wish to question. The question of how clear Governments should be about the implications when they put new legislation through is something we can accept as desirable in terms of good legislation. The Government accept all those criticisms and the House of Lords will, I hope, maintain its effort to keep the Government, of whatever variety, up to the mark.
The noble Baroness, Lady Andrews, incidentally, suggested that 80% of legislation consisted of SIs. I am not sure where that statistic comes from. If the noble Lord, Lord Pearson of Rannoch, was here he would say, of course, that 80% of legislation was forced on us by the European Union. I suspect these statistics are both a little—
Baroness Andrews
My Lords, I was saying that it has been calculated that 80% of the impact on people comes via SIs, not that 80% of legislation is made through SIs. That is why I find it difficult to source. I will try to find a source for the Minister.
Lord Wallace of Saltaire
I understand. This was an extremely valuable report, in particular for pointing out that we have wandered into a situation where there is considerable diversity—indeed, almost a confusion—of different sorts of arrangements under secondary legislation. I can imagine how these will have grown up with Ministers from different departments making specific concessions on different Bills. The committee is quite right to say that we should exert pressure to bring things back to as common a model as possible.
The former Leader of the House, my noble friend Lord Strathclyde, wrote to my noble friend Lady Thomas last November, accepting the committee’s conclusion that, wherever possible, existing procedures for enhanced scrutiny should be used. In his response, which I have deposited in the Library, my noble friend noted that there may be exceptions where existing procedures are not suitable, but where the Government sought to create a new procedure they would clearly set out the case for doing so.
The committee’s report also invited the Government either to set out the case for not requiring supporting documents to be laid with draft orders under Section 19 of the Localism Act 2011—to which a number of noble Lords have referred—or to give an undertaking to lay supporting documents when laying any draft order under that section. I can confirm that the Government have given an undertaking to produce material setting out the detail of, and the rationale for, any proposed order under Section 19 of the Localism Act 2011, and to provide relevant background to support the parliamentary process.
The committee’s report also looked at orders made under Section 14 of the Legislative and Regulatory Reform Act 2006. We welcome the recognition that the existing scrutiny procedures for 2006 Act are robust. The committees scrutinising such orders can choose which scrutiny process should be used. They also have the power effectively to oppose any highly controversial measures. Ministers are obliged to consider the committees’ recommendations and cannot easily set them aside. They would need to persuade the whole House to overturn any recommendation by a committee to reject an order.
In practice, any legislative reform order that has been identified as highly controversial during the consultation stage has been withdrawn. Some measures have returned with increased scrutiny in a Bill. Neither committee has ever felt the need to exercise its veto when considering draft orders. This is why the Government have not felt the need to renew the undertakings given by the previous Administration. This is not a change of policy. The undertaking was given by the previous Government in 2006, at a time when it was not clear how the powers in the Act would be used. It is now clear that the process of bringing forward draft orders and the scrutiny process has worked well. However, I recognise that some noble Lords have strong views on this issue, so we are willing to take it away and consider it further.
The Government believe that legislative reform orders are important tools to reduce burdens on business, taking forward deregulatory measures that do not fit into other legislative vehicles. The report also touched upon orders made under Section 85 of the Northern Ireland Act 1998, Section 102 of the Local Transport Act 2008 and various orders made under sections of the Local Government Acts 1999, 2000 and 2003. Some of these have been rarely, or never, used. Section 85 of the Northern Ireland Act has been infrequently used and, following the devolution of policing and justice in 2010, its use is likely to decline further. No orders have been made under the powers in the three Local Government Acts. In relation to the Local Transport Act 2008, the committee’s report on the original Bill at the time noted:
“We consider both the delegation and the level of scrutiny proposed for the powers”,
in these clauses “to be appropriate”.
The noble Baroness, Lady Thomas, touched on the mechanism by which we debate and approve secondary legislation, particularly the system of consultation and the time allowed for it. Any changes would of course be a matter for the Procedure Committee. I would not wish to pre-empt its discussions, but I acknowledge the importance of the process of consultation and of having a process which commands public confidence. Again, I will take that back to the Cabinet Office.
There is of course a great variety in the significance of secondary legislation laid before the House. It is worth remembering that Parliament itself delegates powers to Ministers and, advised by the DPRRC, decides which form of scrutiny—negative, affirmative or super-affirmative—is appropriate for any particular delegation. In addition, a significant proportion of secondary legislation is already published in draft, with the consultation process beginning long before instruments are laid.
The noble Lord, Lord Butler, suggested rationalisation of the committee structure and greater use of Joint Committees. I think a number of us would want to take that away and think about it further. I am more persuaded by the arguments of the noble Baroness, Lady Smith, about the different functions of the two Houses. My limited experience of serving on one Joint Committee suggested that the two Houses do not always blend terribly well. A great deal depends on the subject. To the credit of this House, we tend to approach things in a less partisan and more detailed manner. Perhaps there is an argument that maintaining a degree of duality may therefore be functional.
Lord Soley
I understand that. I have some concerns about the idea of making it totally Joint Committees; they are difficult. However, that does not rule out looking at the way in which the two Houses are examining the same bit of legislation at the same time, without being aware of each others’ views. In a way, it is also about harmonisation.
Lord Wallace of Saltaire
I take all those points on board. This is the sort of question that we would naturally want to continue discussing.
I very much hope that the quantity of secondary legislation will continue to decline. The general power of competence for local authorities, for example, reduces the necessity of detailed secondary legislation on a range of issues.
Baroness O'Loan
Perhaps I may ask the Minister to check that the quantity of secondary legislation is declining. It is possible that the number of statutory instruments is declining while the amount of secondary legislation is increasing.
Lord Wallace of Saltaire
My Lords, I will get the Cabinet Office to check and will write to the noble Baroness and others if my figures are way out, but I am hopeful that we have seen a reduction in the past three years. I also hope that the efforts that the Government are now making to decentralise within England and to give a power of general competence to local authorities will result in a further reduction in the number of secondary legislative measures.
This has been a very useful and constructive debate. It is the sort of thing that the House needs to do from time to time. I add my thanks to the noble Baroness, Lady Thomas of Winchester. I continue to learn from her about the procedures of this House, and I hope that I will continue to learn from her, as many others will, for many years to come.
Baroness Thomas of Winchester
My Lords, I thank all noble Lords who spoke tonight in this most fascinating debate. I am very grateful for the kind but quite unmerited remarks about me. I should put on record our great thanks to Allan Roberts, who was our principal counsel for many years. He did not have a hand in this report, but I am very pleased that he was mentioned, because his contribution to the work of the committee has been outstanding.
I will not make another speech, because the hour is late. It is extremely tempting to do so, because there are so many matters that I would like to take up. I loved the trip down memory lane taken by the noble Baroness, Lady Gardner, and I was very pleased that the noble Lord, Lord Filkin, was so trenchant in his remarks. My suggestion would not mean that the Government would not face the prospect of the House voting against such an instrument; it would simply mean that they would have early warning of it so that they had the possibility to make changes. However, I will not say any more at this point except to thank everyone for taking part.