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Oral Answers to Questions
(11 years, 1 month ago)
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Fiona Mactaggart (Slough) (Lab)
1. What assessment he has made of the value of the work done by women’s centres with women offenders; and if he will make a statement.
The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)
Women’s centres are a key element in our approach to women in the criminal justice system. Since April 2012, we have been monitoring referrals made by probation trusts to the 31 women’s centres funded by the National Offender Management Service. Feedback indicates that users, staff and magistrates see the centres as a valuable resource.
Fiona Mactaggart
May I first declare an interest as chair of Commonweal, a charity that established the Re-Unite programme, which helps women offenders to reunite with their children when they come out of prison? The programme is run by many women’s centres and those we have been working with are anxious about their future funding and about the lack of strategy from the Ministry for women offenders and women in the criminal justice system. Will the Minister meet me, together with representatives from the women’s centres, to reassure them about future funding for the wonderful programmes they run?
Mrs Grant
I am happy to meet the hon. Lady, and I hope to reassure her. During the last few weeks, I have been visiting women’s centres around the country, in Gloucester, Reading and London, and I have been very impressed by what I have seen. Overall, I want to see more provision for women in areas where it does not exist at the moment. I also want existing provision in the centres deepened and strengthened further. Funding may be readjusted for some services; there has to be redistribution and some centres may have to do a little more with less, but I assure the hon. Lady that funding is continuing and we are increasing it by £300,000 for this financial year.
Dr Julian Huppert (Cambridge) (LD)
I visited the excellent Dawn projects in Cambridge and Peterborough, where they do a huge amount of work with female ex-offenders and save the state far more than they cost to run. They are both concerned about the future of their funding. The Minister has given some reassurance, but can she give further reassurance that the Dawn project will continue to get the support it needs?
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
These excellent centres are facing problems financially, as the Minister appreciates. She will also appreciate that on a cost-benefit analysis, short-term expenditure will pay dividends; it will keep women out of the prison estate, without further costs for children in care and so on. Ultimately it is a great investment.
Mr Robert Buckland (South Swindon) (Con)
2. What progress he has made on improving special educational needs provision within the youth custodial estate.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
The House will know of my hon. Friend’s interest and expertise in the subject, and he will know that a significant proportion of young offenders have some level of special educational needs, which might only be identified once they enter custody. Young people have an educational assessment on entry to custody, and anyone who shows signs of a learning difficulty or disability will be screened so that they can be directed for further assessment and can receive the provision they need. Through our consultation paper “Transforming Youth Custody,” we seek to improve further what we do in that area.
Mr Buckland
As my hon. Friend knows, the Children and Families Bill is currently making its way through the House, but it has no provision relating to young people in custody. Will he work closely with the Department for Education to ensure that there will be a co-ordinated approach to help young people in custody with SEN?
Jeremy Wright
Yes, we certainly will do that; indeed we are doing it. My hon. Friend will be conscious of the fact that there are specific arrangements, whether educational or otherwise, that cannot be taken with the young person into a custodial environment, but that does not mean that we do not need to work hard to make sure that the transition into, and out of, a custodial setting is managed appropriately for young people.
Andy McDonald (Middlesbrough) (Lab)
Does the Minister agree that, given the incidence of special educational needs in our custodial system and the incidence of acquired brain injury there, a lot of young people who are in custody should not be there? Does he agree that there ought to be earlier intervention at an earlier screening, long before they get into custody?
Jeremy Wright
I agree substantially with what the hon. Gentleman has said, and we need to work harder, together with our colleagues in the Department of Health and elsewhere, to ensure that such young people are diverted away from the criminal justice system earlier. However, it is also right to say that we have a responsibility to ensure that provision is appropriate for those young people who do need to be in custody, and that a large proportion of those, as he says, have special educational needs and other issues.
Peter Aldous (Waveney) (Con)
3. What progress he has made on introducing payment by results for the rehabilitation of offenders.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
We want to introduce payment by results to incentivise providers to reduce reoffending. It makes sense as a way of improving effectiveness and getting a good deal for the taxpayer.
Our “Transforming Rehabilitation” consultation closed on 22 February 2013. We will respond to it and bring forward detailed plans in due course.
Peter Aldous
I am grateful to the Secretary of State for that answer. There is, however, a concern that a payment-by-results approach can favour larger national companies. What measures are being put in place to ensure that local voluntary and charitable organisations, which often have a proven track record built up over many years, will not be squeezed out?
Chris Grayling
I agree with my hon. Friend. Within the voluntary sector, we find very many of the mentoring skills that I am so keen to harness in preventing reoffending. That is why we have a team in the Cabinet Office working with the voluntary sector to ensure that they are as well prepared as possible for this exercise, and why I am making it absolutely clear that I do not believe that winning contracts can take place without a contribution from the mentoring skills to be found in the sector.
Keith Vaz (Leicester East) (Lab)
How does he intend to deal with the issue of payment by results in drugs rehabilitation? He will know that the Home Affairs Committee recommended the mandatory testing of prisoners on entry and exit from prisons. Will he look at that proposal, because it is the best way of ensuring that we break the devastating cycle of drug dependency?
Chris Grayling
I do not underestimate the drug challenge that we face. The right hon. Gentleman is well aware, from the work he has done on his Select Committee, how big a part drug addiction plays in the crime and disorder problems we face in this country. We are working closely with the Department of Health. He will be aware that we have many localised drug treatment pilots using payment by results. It is my clear objective to ensure that what we deliver in the Ministry of Justice synchronises carefully with the work that is being done with the Department of Health.
Glyn Davies (Montgomeryshire) (Con)
18. A key objective of Government policy must always be to reduce the number of prisoners, and there is no better way to do that than through rehabilitation, which prevents reoffending. What steps is my right hon. Friend taking to target rehabilitation at those who are serving less than 12 months, where it would be most effective?
Chris Grayling
My hon. Friend is absolutely right. One of the things that I have found most surprising about the system that we currently operate is that we do not currently provide all-round support for those who get sentences of less than 12 months. A central part of our reforms is to change that. It is this group who have the highest propensity to reoffend. It is simply not acceptable that we continue not to provide them with the same level of support as longer-sentenced prisoners when they leave jail.
Mr Andy Slaughter (Hammersmith) (Lab)
I do not know whether the Secretary of State has looked at the National Audit Office’s response to his consultation. It says that, in the Work programme, the majority of providers were big private companies. It also says that it is likely that the most difficult, prolific offenders will not be picked and that there will be cherry-picking. So despite his warm words, does he not think that this is going the same way as his failed Work programme? Is he intending to have moved on before this fails as well?
Chris Grayling
I hate to disappoint the hon. Gentleman, but the Work programme is succeeding in getting very large numbers of people into work, and is delivering much better value for the taxpayer than the programmes that we inherited from the previous Government. The truth is that the National Audit Office has contributed some valuable thoughts to our preparations for this exercise. I have listened to its contributions, as I will listen to all contributions, and we will deliver the most sensible, rounded package, particularly one that ensures that no one is left at the fringes of the system and that we provide rehabilitation and support to all offenders.
Andy Sawford (Corby) (Lab/Co-op)
4. What recent assessment he has made of reoffending rates; and if he will make a statement.
The Minister for Policing and Criminal Justice (Damian Green)
Reoffending has been too high for too long; 47.2% of those released from custody in the year to March 2011 reoffended within a year.
We want to reduce reoffending and extend rehabilitation services to those who need it. Our recent consultation on reforming the way offenders are rehabilitated in the community set out our plans for this area.
Andy Sawford
Northamptonshire probation trust has a great record of reducing reoffending, and local probation workers are shocked that the Government intend to put its core work out to tender. Will the Minister confirm whether, if the trust sets up a special purpose vehicle to bid, that will be ultra vires as the National Offender Management Service has suggested, and whether the staff involved would have to resign first?
Damian Green
I am happy to reassure the hon. Gentleman that not only would that not be disallowed, the Cabinet Office is providing advice for probation trusts that want to do that.
Mr David Nuttall (Bury North) (Con)
Does the Minister agree that long prison sentences are more successful in deterring reoffending than short sentences?
Damian Green
Those who are sentenced to less than 12 months certainly have a higher propensity to reoffend—57% as opposed to 47%—but the length of a sentence is dictated by the seriousness of the offence. A failure in the current system, which the scheme that we are introducing will address, is that those who come out after a shorter sentence have no rehabilitation. We will provide that under the new system, and we hope and expect that that will bring down the reoffending rate among precisely the group he complains about.
Kate Green (Stretford and Urmston) (Lab)
Will the Minister acknowledge that preventing reoffending among women requires the provision of specialist and specifically targeted and designed services to meet their holistic needs within the context of the criminal justice system? What steps will Ministers take to ensure that the payment-by-results model will protect that specialist provision for women?
Damian Green
The precise point of the payment-by-results system and of bringing new people into the system will be to allow providers with specialist skills—for example, in dealing with women offenders—to bring those abilities, skills and experience to bear so that we have much more targeted and tailored rehabilitation than in the past. Specific groups, including obviously women offenders, will be rehabilitated more effectively in the future.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Seven out of 10 young people released from prison go on to reoffend within 12 months. Despite all the best efforts of those involved in the current system, it is obvious that it is failing. What does the Minister intend to do to improve the situation?
Damian Green
As my right hon. Friend the Secretary of State explained, we completely agree with my hon. Friend’s analysis that the current system is not good enough. Reoffending rates have been broadly flat for the last 10 years, despite an enormous increase in public spending in that area. We want to introduce payment by results, new ideas, new people and new providers not just so that more people are rehabilitated after they leave prison, but so that the rehabilitation system is better and more targeted.
Steve Brine (Winchester) (Con)
5. What plans he has to prevent young people from entering the criminal justice system.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
Preventing young people from entering the criminal justice system in the first place is vital, and we have made considerable progress in reducing the number of first-time entrants to the system. Police and crime commissioners will provide strong local leadership in preventing and reducing crime and reoffending and addressing community safety needs. Youth offending teams also play a key role, as do cross-Government initiatives such as the troubled families initiative, the liaison and diversion programme and the ending gangs and youth violence programme.
Steve Brine
The aforementioned “Transforming Youth Custody” Green Paper brings together the Justice Secretary and the Education Secretary, which rightly recognises that it is not just criminal justice issues that are involved. Does the Minister plan to deepen the work with the Department for Education to reach pre-primary and primary schools following the lead of, for example, Hampshire county council, which has just employed an army of speech and language therapists to work with children with identified communication needs to stop the spiral of poor behaviour starting in the first place.
Jeremy Wright
Yes, and what my hon. Friend says about the importance of early intervention is entirely right. I take this opportunity to thank him and his colleagues on the Select Committee on Justice for the report that they produced last week. It was extremely welcome and we will look at it in detail and respond in due course. What he says about early intervention is important, and we will certainly work with colleagues across Government to ensure that that continues.
Dr William McCrea (South Antrim) (DUP)
What part does the Minister believe that parental responsibility and a stable family unit play in preventing young people from entering the criminal justice system?
Jeremy Wright
The hon. Gentleman is right. Early intervention is crucial and we want to make sure that it looks not just at criminal justice, but at family structures, education and health care. A whole range of different interests across Government must be represented in this exercise if we are truly to get to the bottom of the many problems and often chaotic background that some young people come from.
Simon Hughes (Bermondsey and Old Southwark) (LD)
May I commend to Ministers paragraph 21 of the youth justice report that has just been referred to and the proposal that the Government might legislate as soon as possible to erase out-of-court disposals and convictions from the record of very early, minor and non-persistent offenders at the age of 18? I have constituency cases in which people’s careers have been blighted by a minor infraction for which they got a telling off, but which appears on their criminal record.
Jeremy Wright
I have a good deal of sympathy for what the right hon. Gentleman says and we are considering the matter carefully for precisely the reasons he has given. We will look carefully at the issue of cautions in the round—not only how they are administered, but how long they last and in what circumstances—and report back.
Robert Flello (Stoke-on-Trent South) (Lab)
Around 7% of the youth offending team’s budget has been transferred to police and crime commissioners as part of the community safety grant. As there is no increase in the PCC budget, that money has effectively disappeared. With budget cuts totalling 16% and cuts to local authorities and police, how are youth offending teams to prevent young people from entering the criminal justice system, when sleight of hand deprives them of funding of hundreds of thousands of pounds?
Jeremy Wright
Well, there is no sleight of hand here, and it is right to point out that police and crime commissioners can increase the precept if they think it appropriate to do so and bring more money into their budgets, but the hon. Gentleman’s point is about the importance of prevention. We should recognise that youth offending teams are already doing good work in that regard and having considerable success, bringing down the number of people who come into the criminal justice system in the first place. We hope that that progress will continue, but prevention is a key part of what youth offending teams do and it will continue to be so.
Naomi Long (Belfast East) (Alliance)
6. What discussions he has had with the devolved Administrations on the proposed opt-out from the EU third-pillar arrangements.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
Before the Home Secretary’s announcement, on 15 October last year, of our current thinking, my officials were in regular contact with colleagues in the devolved Administrations to inform the initial analysis of the measures subject to the 2014 decision. Those discussions have continued, and I was in Belfast in February meeting the hon. Lady’s colleague, the Justice Minister, David Ford, to discuss that very issue.
Naomi Long
I thank the Minister for his answer, but he will be aware that, as Northern Ireland is the only part of the UK with a land border, moves to opt out of the third pillar could affect the effective operation of the European arrest warrant system between Northern Ireland and the Republic of Ireland. Will he assure the House that the Northern Ireland Executive and the Justice Minister will be fully engaged in the issue, given its importance?
Chris Grayling
I can absolutely give the hon. Lady that assurance. I very much recognise the issue that she mentions, which was discussed at my meeting with David Ford. I can reassure her that we are mindful of the situation in Northern Ireland and giving it due consideration as we reach our decision.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Why are Ministers not engaging properly with the House on those opt-in decisions, given that the five memorandums promised for mid-February have not yet been produced and the Government appear to be discussing with the Commission important opt-ins without having discussed them with important Committees of the House?
Chris Grayling
I can give my right hon. Friend, and indeed the House, a clear assurance that this Government will go further than any Government in ensuring that the House is involved in the decisions that are taken, and that as we reach agreement within the coalition on the way forward, we will need fully to engage Parliament, his Committee and, indeed, all the Committees with a vested interest in the matter, so that they are able to express a proper view on it.
Simon Danczuk (Rochdale) (Lab)
7. What his Department’s policy is on victims of crime.
The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)
For many years now, victims have felt completely overlooked and unsupported by the criminal justice system. As victims Minister, I am determined to put that right. That is why we are implementing a range of reforms that will put victims at the very heart of the criminal justice system, which is where they belong.
Simon Danczuk
Two weeks ago, The Sunday Times revealed that investigations of sexual abuse in Rochdale are faltering because police are failing to win the trust of victims. Does the Minister believe that a higher conviction rate would be achieved against the predators if Greater Manchester police had more officers with better skills for supporting vulnerable victims?
Mrs Grant
I cannot comment on individual cases, especially those that are at a sensitive point in the investigation, but I can assure the House and the hon. Gentleman that the Government are committed to bringing forward changes that will help to support victims of sexual abuse at every stage of the criminal investigation.
Priti Patel (Witham) (Con)
Reports by the organisation Support After Murder and Manslaughter Abroad consistently highlight the fact that more support is required for bereaved families—those who have lost loved ones through murder and manslaughter abroad. What steps is my hon. Friend the Minister taking to address those shortcomings?
Mrs Grant
We do a considerable amount of work, and we provide funding for families of homicide victims. I attended a conference run by a gentleman called Frank Mullane to discuss what he does for families who go through that appalling difficulty. I am happy to talk further with my hon. Friend about what measures are being taken and what else we are doing on those issues.
Sadiq Khan (Tooting) (Lab)
I have to tell you, Mr Speaker, that this Government have failed to implement the main recommendation made by the last victims’ commissioner, Louise Casey, before she left her post 18 months ago, which was to implement a victims’ law. The Government have also slashed the compensation available to victims of crime. During the last Justice questions, we heard that the Justice Secretary believes that it is the fault of the victims of rape that so many men receive cautions for rape. Does the Minister believe that it is possible to have a criminal justice system that is on the side of victims while her party is in government? If so, when will it happen?
Mrs Grant
The Government are absolutely committed to looking after victims and witnesses of crime. As the right hon. Gentleman knows, we currently spend £66 million on victim services. Not content with that, we want to raise even more money for victims—up to £50 million—through the victims’ surcharge. We are also raising money through the Prisoners’ Earnings Act 1996, giving victims a louder voice through the appointment of Baroness Newlove as victims’ commissioner and clarifying victims’ entitlements through reform of the victims’ code, on which we will consult in due course.
Rehman Chishti (Gillingham and Rainham) (Con)
On the victim surcharge, what is being done to ensure that all the fines are being collected so that they can be used to support victims?
Mrs Grant
The victims surcharge is potentially a large amount of money that will be raised for victims and witnesses. As Minister with responsibility for courts as well as for victims, I assure my hon. Friend that Her Majesty’s Courts and Tribunals Service will continue to prioritise collection of financial penalties, including the surcharge.
Mark Pawsey (Rugby) (Con)
8. What representations he has received from the voluntary and charitable sector on his proposals to introduce payment by results for the rehabilitation of offenders.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
We want to open up rehabilitation services to a more diverse market and harness the expertise of the voluntary sector in dealing with the complex difficulties that repeat offenders face. We received more than 500 written responses to our recent consultation, including from the voluntary and charitable sector. We are considering them carefully and will introduce detailed plans in due course.
Mark Pawsey
Charities and the voluntary sector can play a big part in the rehabilitation of offenders. What information will be made available to bodies in the sector so that they have an opportunity to introduce effective strategies?
Chris Grayling
In April we will launch a justice data lab, which will allow all kinds of organisations involved in the issue to access data on reoffending so that they can be clear about the effectiveness of their work. We will do everything that we can to help them identify that impact in a way that encourages them in the role that they intend to play.
Richard Fuller (Bedford) (Con)
17. One consequence of payment by results is that it creates working capital problems for many charitable and voluntary organisations. Social impact finance is one solution to bridging that working capital gap. What conversations has the Secretary of State had with Big Society Capital and others about promoting social impact finance in that area?
Chris Grayling
I have met personally with representatives of Big Society Capital and other organisations in the social finance sector. I believe that this is an enormous opportunity for the sector, and I want it to be involved in the work that we are doing. Combining the skills of the voluntary sector with the social finance sector could play a powerful part in what we are trying to achieve.
Gavin Williamson (South Staffordshire) (Con)
9. What powers there are to confiscate unauthorised property found in prisoners’ possession.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
Prison governors or directors have the power under prison rules to confiscate any unauthorised item found in the possession of a prisoner or elsewhere within a prison. In addition, following the excellent stewardship of my hon. Friend the Member for Pudsey (Stuart Andrew), the Prisons (Property) Act 2013, which received Royal Assent on 28 February, will, when commenced, provide prison governors and directors with a statutory power to destroy or otherwise dispose of unauthorised property confiscated from a prisoner.
Gavin Williamson
Many of my constituents in South Staffordshire believe that many prisoners have far too many home comforts in their cells, and that there is far too much contraband in the prison system. What action has my hon. Friend taken to make sure that we run a spartan regime, and not a holiday camp?
Jeremy Wright
My hon. Friend can reassure his constituents that prisoners will no longer watch Sky subscription television channels, and they will no longer watch 18-rated DVDs. As my hon. Friend knows, we are looking comprehensively at the incentives and earned privileges scheme in prisons to make sure that prisoners earn any incentives and privileges that they receive.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
10. What the Government’s policy is on membership of the European convention on human rights.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
As a coalition Government, we remain committed to the European convention on human rights, and we are also closely involved in the process to reform the Strasbourg Court. Individual political parties will choose what approach to take at the next general election.
Debbie Abrahams
The Home Secretary wants to leave the European convention on human rights; the Justice Secretary has said that he is not too sure, but he wants to abolish the Human Rights Act. Apart from being another omnishambles, does that reflect their lack of commitment to human rights, the fact that they want to leave the European Union, or both?
Chris Grayling
What I think is far more shameful is the complete resistance by the Labour party to any measures designed to stop a situation in which terrorist suspects with a clear goal of doing damage to the citizens of this country can use human rights law to try to defend their right to stay in this country.
Chris Bryant (Rhondda) (Lab)
This is ludicrous equivocation from the Government on the ECHR, which was written by a Conservative Home Secretary in the 1940s and 1950s. How can we possibly say to countries such as Turkey and Russia, where British citizens need to have their rights protected, that they should adhere to the ECHR when the Justice Secretary cannot even stand up for justice?
Chris Grayling
When I was younger I was a human rights campaigner, and my idea of human rights is not providing artificial insemination to prisoners in our jails. It is up to the Labour party if it wants to defend that. I am going to carry on arguing for change, and I hope that when we are a majority Government we will deliver it.
Jeremy Corbyn (Islington North) (Lab)
Does the Secretary of State not recognise that the ECHR has done a great deal to improve the lot of people who were discriminated against and abused in many countries across Europe. It is an important statement of intent by a large number of countries. Can he not just get behind the principle that human rights are universal? The universal declaration is important, and the European convention was a major landmark in improving human rights around the world?
Chris Grayling
The issue is not about the original convention, which contains a sensible balance of rights and responsibilities. The issue is about how far we have moved over 60 years from the original intentions of those who wrote the convention. That is why a change is desperately needed.
Pat Glass (North West Durham) (Lab)
11. What plans he has for the future of the probation service; and if he will make a statement.
Paul Blomfield (Sheffield Central) (Lab)
12. What plans he has for the future of the probation service; and if he will make a statement.
Jeremy Wright
The transforming rehabilitation consultation closed on 22 February 2013. Our proposed reforms will help reduce reoffending by opening up the provision of probation services to a wider range of providers and by extending rehabilitative provision to those serving less than 12 months in prison. We will respond to the consultation and bring forward detailed plans in due course.
Jeremy Wright
As I said, we will provide the detail of the proposals when we have had a chance to look in detail at the responses to the consultation, but we expect a progressive year-on-year reduction in reoffending as a result of the improvements that we want to make.
Paul Blomfield
My probation trust in south Yorkshire is not alone in being concerned about the proposal to split responsibility for offenders between public and private providers, depending on the level of risk, as that introduces a dangerous artificial divide that fails to take account of the way in which risk fluctuates. Will the Minister tell the House how many offenders on licence saw their risk level change between medium and high over the past 12 months, and how many of them committed serious offences in that period?
Jeremy Wright
The hon. Gentleman is right that one of the major issues that has arisen through this process is the dynamic nature of risk, and we fully appreciate that that is an important subject. None the less, it is important to look at the need to make the best use of the skills of the probation service. There are considerable skills within the probation service in managing the risk of serious harm, which is why we propose that those offenders who pose the highest risk should be managed directly. We also think that it would be good to bring in new ideas from those who work in the voluntary and private sectors to manage the reoffending rates of medium and low-risk offenders. As to the point he makes, it will be clearly crucial for good relationships to exist between the public sector probation service and those providing work for medium and lower-risk offenders, and we will build into the system those safeguards.
Mr Crispin Blunt (Reigate) (Con)
The Government’s proposals for the reform of probation offer the prospect for probation officers to be able to deliver rehabilitation in a much more effective, creative and positive way. However, they will be working for a multitude of different organisations, which will mean that all the things that bind the probation service together will have to be strengthened. What proposals does the Minister have in mind for that, if he can say anything before he announces the response to the consultation?
Jeremy Wright
My hon. Friend is right to say that there will be a variety of different organisations providing rehabilitation services for which those currently employed by the probation service might end up working, and I hope very much that we will retain the skills within the system. He is also right that the proposals present the opportunity for increasing the professionalisation of the probation service of which he is a great champion, and we want to ensure that those proposals are not overlooked in the consultation process and beyond.
Mr Philip Hollobone (Kettering) (Con)
I commend to my hon. Friend the Minister the response to the consultation from the Northamptonshire Probation Trust, which has an excellent reputation. Although it is supportive in principle of the concept of payment by results, it, like my hon. Friend the Member for Waveney (Peter Aldous), has concerns that large and remote contracts—if the Department goes down that route—will not place sufficient emphasis on the joined-up local delivery of effective probation services.
Jeremy Wright
Again, that is a realistic concern and one that we will address. It is important that we maintain those crucial local partnerships, and we will expect anyone taking on this work to do that. We will also want to ensure that not only the design of the contracts but the management of those contracts and the relationships with smaller and local organisations, particularly in the voluntary sector, are maintained and nurtured. We will look carefully at all bids to ensure that they do that.
Jenny Chapman (Darlington) (Lab)
I hope that Ministers are listening to the concern that is coming from Members on both sides of the Chamber about the proposals. Last year, 17,000 offenders were recalled to prison by their probation officer, so that is 17,000 crimes that were prevented and victims spared because of decisions made by probation officers. Am I right in saying that in the future private providers of probation services will lose payments for supervising an offender if that offender is recalled to prison?
Jeremy Wright
The clue is in the title. If, under payment by results, a provider gets the right result, they will get a payment; if they do not, they will not get a payment. Let me make it clear to the hon. Lady that under the proposed system, the decisions on recall will be made by public sector probation officers and not by providers, so the responsibility for that decision remains in the public sector where we believe it belongs.
Alec Shelbrooke (Elmet and Rothwell) (Con)
13. What the cost is of putting a child through (a) a young offender’s institution and (b) other forms of youth detention.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
In the current financial year, the average cost of a place in a young offender institution is £65,000 a year; the average cost of a place in a secure training centre is £178,000 a year, and the average cost of a place in a secure children’s home is £212,000 a year.
Alec Shelbrooke
East Garforth primary school in my constituency has recently shown me the benefits of play therapy and early intervention at key stage 1. Has my hon. Friend’s Department, in conjunction with the Department for Education, made any assessments of their own as to the benefits of this early intervention as a tool to reduce youth offending?
Jeremy Wright
I am not aware of any specific research on that particular programme. However, what I can say is that I agree entirely with my hon. Friend that early intervention is crucial, and, as I said a moment ago, it is important that we work across Government with the Education Department and others to ensure that that happens. That is a good way of ensuring that we prevent young people from entering the criminal justice system in the first place, which is clearly preferable than trying to deal with them when they are there.
Bill Esterson (Sefton Central) (Lab)
One way to reduce the cost of putting children in prison is to ensure that care leavers have proper support. Some care leavers see crime as the only way to survive, so what discussions has the Minister had with ministerial colleagues in other Departments to ensure that children do not return to crime when they leave care?
Jeremy Wright
The hon. Gentleman is right to focus on care leavers. He may be aware, if he has had a chance to look at the matter, that the Select Committee on Justice report contains a section on the criminalisation of those who are in care and on what is fairly described in many cases as an over-reaction to incidents that would not have resulted in the intervention of criminal justice agencies had they happened outside the care system. As I said, that is something that we will want to look at more carefully and respond to properly.
Philip Davies (Shipley) (Con)
14. How many people convicted of robbery were not sent to prison in each of the last three years.
The Minister for Policing and Criminal Justice (Damian Green)
In 2009, 3,509 people were not given an immediate custodial sentence for robbery. In 2010, that figure was 3,568 and, in 2011, 3,710. The majority of those were young offenders. However, in the same period, nearly 16,000 offenders were sent to custody for robbery. Robbery is a serious crime carrying a maximum penalty of life imprisonment. Armed robbery is on the list of offences which can attract a “two strikes” mandatory life sentence.
Philip Davies
Recently, John Calvert was convicted of mugging a woman student in Bradford city centre. At the time of his offence, he was on a 12-month intensive community order for robbing a 13-year-old girl of her mobile phone. Is the Minister proud of presiding over a criminal justice system that allows dangerous offenders committing those kinds of street robberies to walk free from prison and to go out and commit other crimes across the Bradford district?
Damian Green
My hon. Friend would not expect me to comment on individual cases. I am happy to reassure him that the sentencing guideline on robbery states that the offence will usually merit a custodial sentence but that exceptional circumstances may justify a non-custodial penalty for an adult or, more frequently, for a young offender. However, sentencing in individual cases is a matter for the courts. I hope that he will join me in welcoming the fact that it is a matter for the courts, rather than for politicians.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
May I press the Minister on this matter? We know that serial burglars are not locked up but is it right that Vicky Pryce and Chris Huhne should be imprisoned when it would have been much better if they had been given a community sentence and were working in the community?
Damian Green
The hon. Gentleman is slightly suggesting that politicians should set sentences. I am happy to reassure him that the average sentence for burglary is going up—if he wishes that to happen, I can assure him that it is happening. The adult custodial rate for robbery in 2011, the last year for which figures are available, was 84.3%, so the vast majority of people who commit robbery do end up in jail.
Mr Gregory Campbell (East Londonderry) (DUP)
According to the figures that the Minister has just given, 100 more people in each of the last three years were not sentenced to prison as a result of a conviction for robbery. What steps is he taking to reassure people throughout the UK that that figure will be reduced in the next three years?
Damian Green
As I say, the average sentence is going up. One of the things that has been discussed a lot in Question Time today is how more effective rehabilitation is dealing with some of the most prolific offenders. As has been said, a lot of robberies are committed by reoffenders, so getting rehabilitation right earlier in the system, so fewer people commit such crimes, is the best defence we have against more of these prolific offenders being out on the streets committing offences.
Diana Johnson (Kingston upon Hull North) (Lab)
15. What his sentencing policy is for the most serious and violent offenders.
The Minister for Policing and Criminal Justice (Damian Green)
Serious and violent offenders deserve to go to prison. That is why we introduced mandatory life sentences for anyone convicted for a second time of a very serious sexual or violent offence, and tough extended determinate sentences for other dangerous offenders. The new regime restores clarity, coherence and common sense to sentencing.
Diana Johnson
In Hull last year, the clear-up rate for actual bodily harm was 41%, but for sexual offences it was only 28%, and we know that 7,000 fewer violent crimes were solved nationally. Mandatory life sentences are available only for second offences of a very serious sexual and violent nature, and many offenders are not convicted in the first place. With indeterminate sentences having been abolished for that particular group, is the Minister satisfied that the public are protected from these very dangerous offenders?
Damian Green
I hope the hon. Lady is reassured by, for instance, the new extended determinate sentence, under which the offender receives a custodial sentence plus a further long extended period of licence set by the court. Offenders receiving that sentence will serve at least two thirds of the custodial term, which is higher than has been the practice in recent years, showing that the system is not just more coherent, but, for these kinds of serious offences, tougher than before.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Does my right hon. Friend agree that in north Yorkshire one of the difficulties with sentencing and bringing people to trial is the lack of a sexual assault and rape centre? What plans do the Government have to bring one forward?
Damian Green
My hon. Friend will have heard the victims Minister, my hon. Friend the Member for Maidstone and The Weald (Mrs Grant), set out the much good work she is promoting in terms of victims’ centres, and in particular rape victim centres. I assure my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) that Ministers are taking that issue very seriously in all parts of the country, and particularly in north Yorkshire.
Mr Henry Bellingham (North West Norfolk) (Con)
16. What plans he has to ensure that high net worth defendants do not receive legal aid.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
The Ministry of Justice is considering ways in which high net worth defendants can be obliged to pay the costs of their defence privately, without receiving legal aid first. We have also announced measures to strengthen Crown court means-testing to help ensure that defendants who can pay towards their legal aid costs at the Crown court are made to do so. Last night, of course, there were additional provisions to the Crime and Courts Bill, which received its Third Reading in this House.
Mr Bellingham
I am grateful to the Lord Chancellor for that encouraging reply, and I thank him for the work he is doing in this area, but does he agree that for far too long these rich defendants have had their cases financed through legal aid by the taxpayer, which is completely unacceptable at a time when he has had to make changes to the legal aid budget? Does he agree that more can still be done to access wealth from frozen accounts?
Chris Grayling
I very much agree with that, and, of course, the measures in the Crime and Courts Bill open the door to our doing that for the first time. I wish to see us recover funds from those who can afford to pay for their own defence.
Grahame M. Morris (Easington) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
Last week I launched the “legal services on the international stage” action plan. It sets out the immense contribution Britain’s legal services sector can make both to reinvigorate our economy and to ensure that Britain remains ahead in the global race. Legal services employ 340,000 people nationwide, and contribute over £20 billion to the UK economy. Beyond London, the north-west, Scotland and Wales are also emerging as centres of excellence. The Government want to encourage and export Britain’s leadership in this industry. The action plan we have published sets out how we intend to do that. It requires opening up legal markets abroad and selling the benefits of British law firms and the English legal system, as well as championing our offer to overseas legal students. I am sure the House will want to back our industry and the efforts both my Department and UK Trade & Investment are making to help our businesses spread our footprint around the world.
Grahame M. Morris
I thank the Justice Secretary for his reply, but may I draw his attention to the Public Accounts Committee’s damning report on the Ministry of Justice’s handling of the court translators contract? Again it is a case of being penny wise and pound foolish. Two hundred cases in England and Wales had to be cancelled, costing the public purse millions of pounds. Experienced and trained translators are still refusing to work with Capita, which was awarded the contract. Will the Minister, as part of his action plan, rescue our justice service and abandon this failed contract?
The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)
I hear what the hon. Gentleman says, but we are working very closely with Capita. Our success rate is good, but it can, of course, improve, and it will improve. The British taxpayer will save some £15 million per annum as a result of this contract, and I am fully convinced that the new contract will be more accountable, transparent and effective than the old one.
Peter Aldous (Waveney) (Con)
T3. Has the Secretary of State considered increasing the maximum sentences available to magistrates from six to 12 months, so that justice can be delivered more efficiently, fairly and quickly by magistrates who live in, and have a good understanding of, the communities they serve?
The Minister for Policing and Criminal Justice (Damian Green)
We are considering the case for increasing magistrates’ custodial sentencing powers in the way that my hon. Friend and, indeed, the Magistrates Association has suggested. I agree that magistrates have a very important role to play in our society and we should be thankful for the work they put in. We are exploring other ways to make use of the skills and expertise they bring.
Sadiq Khan (Tooting) (Lab)
I am sure the Justice Secretary agrees that we need not only to ensure that people do not become victims of crime in the first place, but that those responsible for crime are caught and dealt with appropriately by the criminal justice system. Burglary can have a devastating impact on the victims of crime and leave families traumatised. What are the Justice Secretary’s views on those accused of burglary being given a caution?
Chris Grayling
I regard burglary as an extremely serious crime. As I have said publicly, I also have reservations about the way cautions are currently being used, and I have been clear that we are looking at this as a matter of priority. I can reassure the shadow Justice Secretary that in fact, the length of time burglars spend behind bars is increasing, not decreasing.
Sadiq Khan
The right hon. Gentleman may therefore be interested to know that last year, 3,359 cautions were given for burglary, and in 2010 the figure was 3,484. There is concern that the use of more out-of-court disposals such as on-the-spot fines and cautions is cheapening our justice system. Although that may be desirable for the Treasury, it is not what law-abiding victims of crime want. The use of cautions and on-the-spot fines can lead to the public losing confidence in our criminal justice system. Does he agree and what is he going to do about it?
Chris Grayling
Actually, I do agree. I have reservations about the number of cautions being used. Of course, one has to remember that the current culture of the use of out-of-court settlements dates back to when the last Government were in power, and the use of cautions was much higher three or four years ago than it is today. I am very clear that we have to look again at the way cautions are used, and I have reservations about the way they are used for some serious offences. It is work we are currently doing.
Pauline Latham (Mid Derbyshire) (Con)
T5. What progress has been made on the Secretary of State’s plans to introduce a greater emphasis on education into the youth custodial estate?
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
My hon. Friend will know that we are consulting on the idea that we should provide more education for those in youth custody than is currently provided. We are looking for good ideas—from wherever they may come—on how that might be done better, but she is entirely right: education needs to form more of a part of what we do. We have a responsibility to educate these young people, and doing so more effectively will assist in reducing reoffending.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
T2. May I push the Secretary of State on the question of victims, particularly the families of victims of murder? Just over 10 years ago, eight members of a family in my constituency were murdered, five of whom were children. One of the two men who were found guilty has been released by the Parole Board, which is considering releasing the other one. What sort of justice is it when this decision is not communicated to the family of the eight people who died?
Chris Grayling
I am absolutely clear that it is not acceptable for people who have been the victims of horrible crimes to discover, without their knowing anything about it, that those who committed those crimes, having served an appropriate sentence, are on the streets again. I intend to ask the new victims commissioner to look into this as a matter of urgency. Tragically, she has direct experience of how this can affect families, and I believe there is nobody better qualified to fulfil that role. I absolutely understand the point the hon. Gentleman is making.
David Mowat (Warrington South) (Con)
T6. A continuing issue is convicted criminals who hide their wealth or in other ways refuse to abide by financial assessment orders. Is there more we can do in this area?
Damian Green
As my hon. Friend knows, the Government recently published details of measures to strengthen the Crown court means-testing scheme. They include steps to ensure that if a defendant fails to co-operate with the new legal aid agency, and if it believes they have sufficient means to pay, they may be pursued for all their outstanding legal aid costs following conviction. From July, the Government will also introduce motor vehicle order regulations so that the agency can seize a defendant’s vehicle if they refuse to pay their contribution towards their costs. Significant action is being taken in this area.
Nick Smith (Blaenau Gwent) (Lab)
T4. The failed contract with ALS/Capita is a year old. Does the Minister agree that her claims of massive savings cannot be demonstrated, given that the Ministry refuses to publish details of how much is spent off-contract to purchase interpreting services?
Mrs Grant
I think that I have made the position clear, but I will repeat it. The contract is operating at a very good success rate, but further improvements can be made. Having worked as a solicitor in the old regime, I can say that it certainly was not perfect. I am satisfied that the new regime will not only save the taxpayer a considerable amount of money, but be more effective, transparent and accountable than the old regime.
Charles Hendry (Wealden) (Con)
Far too many young people are essentially illiterate and innumerate when they start custodial sentences. Even worse, they still are when they finish them. What assessment has the Minister made of the extent to which the costs of providing educational services would be offset by savings through a reduction in reoffending rates?
Jeremy Wright
My hon. Friend makes a good point. We are already obliged to provide education for such young people, whether they are in custody or not. He is right that literacy and numeracy are a huge issue. That is partly because there are very high rates of exclusion from school among young people who eventually end up in custody. We need to do more to take advantage of the period of stability, which for many young people is unusual, that they have while in custody. We must do more to educate them in custody and to ensure that that education continues when they leave it.
Pat Glass (North West Durham) (Lab)
T7. What is the minimum percentage that the Justice Secretary thinks needs to be in a contract for it to be considered a payment-by-results scheme?
Chris Grayling
I have been very clear that I find it profoundly unsatisfactory that people who get sentences of less than 12 months are not provided with supervision post-prison. The changes that we have put in place will include that group and people who receive community sentences. We must remember that 80% of those who end up in our prisons have completed a community sentence, so that part of our system is not working either.
Duncan Hames (Chippenham) (LD)
The risk posed by offenders can change, as was illustrated all too vividly by news reports from Chippenham last week. Under his proposals, how will the Secretary of State ensure that medium-risk offenders are assessed to enable them to receive attention from skilled and experienced probation officers should they become a higher risk to members of the public?
Chris Grayling
We are very clear that there has to be a simple mechanism for offenders whose risk profile is changing to be reassessed by a public probation officer. As a result of our consultation, we are working through the details of how that process should work. I am very clear that the responsibility for protecting the public from the risk of harm should and will remain with the public sector.
Paul Goggins (Wythenshawe and Sale East) (Lab)
T8. During the Report stage of the Crime and Courts Bill, there was unfortunately insufficient time for Ministers to speak to Government amendment 110, which provided for statutory guidance on the use of restorative justice. Will the Minister take this opportunity, given that there was extensive discussion in Committee and outside on this issue, to explain to the House how that amendment will extend and strengthen the use of restorative justice in the criminal justice system?
Damian Green
First, I thank the right hon. Gentleman for his kind remarks on Third Reading of the Crime and Courts Bill last night. The Bill gives judges explicit powers to defer sentencing to allow restorative justice to take place between a victim and an offender. The amendment provides that restorative justice practitioners must
“have regard to any guidance that is issued”
by the Secretary of State, with a view to “encouraging good practice” in the delivery of pre-sentence restorative justice. That is a significant step forward for restorative justice and I know that the right hon. Gentleman will welcome it.
Andrew Selous (South West Bedfordshire) (Con)
Will the Government aim to ensure that no prisoner leaves prison without being able to read and write as that would further reduce reoffending and give prisoners a chance of finding work when they leave?
Jeremy Wright
Yes, we will make every effort to ensure that prisoners learn to read and write if they cannot do so when they arrive. A good deal of the excellent work to achieve that is done by volunteers, mentors and charities. That foreshadows what we hope we can achieve with the wider transforming rehabilitation agenda. My hon. Friend is right to focus on this issue because literacy skills mean that somebody has a greater likelihood of getting and holding on to a job, which helps to reduce reoffending.
Natascha Engel (North East Derbyshire) (Lab)
T9. After 1 April, the courts will be full of people defending themselves because they cannot afford professional advice and no longer have access to legal aid. What is the Department doing to ensure that everybody gets access to justice, not only those who can afford it?
Chris Grayling
Opposition Members must realise that they left behind not only the biggest deficit in our peacetime history, but also the most expensive legal aid system in the developed world. We must take tough decisions and have a system that is realistic, given our financial constraints. I believe we have achieved that with the reforms we have put forward. We will monitor the impact of those reforms and ensure that we adjust anything that needs to be adjusted. Opposition Members should not believe that there are alternatives to what we are doing.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Felmores approved premises in my constituency is located near a school, a nursery, a playground and a densely populated housing estate. Does my right hon. Friend agree that although the provision of such premises is essential, a location such as the one I have described is inappropriate? Will he encourage probation trusts to work with the local community to find alternative locations?
Chris Grayling
I have a lot of sympathy with my hon. Friend and I will ask the Minister responsible for prisons and probation whether he will work with him to look at the situation described. Clearly, it is not sensible to locate such facilities in highly sensitive locations, although my hon. Friend will agree that their provision in the community is vital.
Meg Munn (Sheffield, Heeley) (Lab/Co-op)
The Government have proposed to move personal injury cases below a certain level into the small claims court, which will mean more people representing themselves in person. That is likely to mean that a lot more time will be needed for those cases, as well as a lot of negotiation, which will lead to more costs. How does the Minister think that such a move will save the public money?
Chris Grayling
I am not sure whether the hon. Lady has experience of the small claims court, but this plays to the point raised by her hon. Friend the Member for North East Derbyshire (Natascha Engel). The small claims court is more of a mediation environment than a combative legal environment, and that is a better way of dealing with many of the smaller claims that people need to bring.
Mr Philip Hollobone (Kettering) (Con)
Jamaican and Nigerian nationals make up a big proportion of the foreign nationals in our jails. What progress is being made on negotiating compulsory prisoner transfer agreements with Jamaica and Nigeria so that we can send those people back?
Jeremy Wright
As my hon. Friend rightly says, Nigeria is a significant country in that respect, and he will know that one obstacle to negotiating such an agreement concerns the constitutional restrictions in potential receiving countries. My hon. Friend will be pleased to know that the Nigerian legislature has now passed legislation that makes such an agreement feasible, so we are making considerable progress with Nigeria.
Mrs Madeleine Moon (Bridgend) (Lab)
Schedule 2 of the Armed Forces Act 2006 means that a commanding officer does not automatically have to refer to the service prosecution authority incidents of sexual assault, voyeurism and exposure. Will the Minister talk to his equivalent in the Ministry of Defence to ensure that victims, whether in the civil service or the military, have access to the same justice as in the civil justice and military systems?
Chris Grayling
Access to justice is obviously important for everyone, but the matters to which the hon. Lady refers are for my colleagues at the Ministry of Defence. I am sure that they will note her comments in Hansard and be aware of what she has said.
Dr Julian Huppert (Cambridge) (LD)
The Defamation Bill is a key piece of legislation, helping people to protect their reputations and supporting free speech. It was held up in the other place, but what progress is now being made and does it have a target date for Royal Assent?
Chris Grayling
I very much hope that now that cross-party issues on Leveson have been dealt with, there will be no obstacles to bringing forward the Defamation Bill in its original form, without the Lords amendments.
Mr Nigel Dodds (Belfast North) (DUP)
On compensation for people with pleural plaques, will the Minister look at what has happened in Northern Ireland, which has overturned the House of Lords ruling and restored the right of people to sue in the civil courts for compensation for that condition?
Mrs Grant
Yes, I am happy to look at that, but the law does not prevent a person with pleural plaques who goes on to develop any recognised asbestos-related disease from bringing a claim in relation to that disease. Obviously, England and Wales have a different legal system from those in Scotland and Northern Ireland.
Human Rights in India
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
I have a petition signed by many people in the west midlands and across the country, who ask the House of Commons to urge the Government to appeal to India to take immediate action to stop the human rights abuses facing minorities in India; that India should sign and ratify the Rome statute of the International Criminal Court and the UN charter against torture and other cruel, inhumane or degrading treatment or punishment, which encompasses the death penalty; and thus India should abolish the death penalty.
And the Petitioners remain, etc.
Following is the full text of the petition:
[The Petition of residents of the United Kingdom,
Declares that the Petitioners believe that the UK Government, together with the UN and EU, should encourage the Indian Union to take immediate action to stop human rights abuses facing minorities in India and that India should sign and ratify the Rome Statute of the International Criminal Court and the UN Charter against torture and other cruel, inhumane or degrading treatment or punishment which encompasses the death penalty and thus India should abolish the death penalty as it is a cruel, inhumane or degrading form of punishment; further declares that the UK Government should campaign to stop Balwant Singh Rajoana's death sentence and have him released from jail as he has served 17 years in custody and that the Indian Union should release all prisoners facing the same situation and those who have been imprisoned without trial.
The Petitioners therefore request that the House of Commons urges the Government to appeal to India for the above actions to be taken, and request that the Government bring these issues to light in the European Union and United Nations.
And the Petitioners remain, etc.]
[P001164]
European Council
(11 years, 1 month 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.
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Mr William Cash (Stone) (Con)
(Urgent Question): To ask the Minister of State for Foreign and Commonwealth Affairs if he, on this occasion only, will make a statement on the European Council on 14 and 15 March, and its conclusions of 15 March.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
With permission, Mr Speaker, I would like to make a statement on the European Council meeting held in Brussels—
Mr Speaker
Order. I think I need to explain this for the benefit, clearly, of the Minister of State, and of the House. The Minister is not “with permission” making a statement; he has toddled into the Chamber to respond to an urgent question application from the hon. Member for Stone (Mr Cash), which I have granted. The Minister has not volunteered a statement; he is responding to a requirement to come to the Chamber. That is the position.
Mr Swire
Thank you, Mr Speaker. It gives me very great pleasure to respond to the question from my hon. Friend the Member for Stone (Mr Cash) on my right hon. Friend the Prime Minister’s attendance at the summit in Brussels on 14 and 15 March.
Discussions focused on economic issues and growth, and in particular on the European semester process. The Council also covered the deteriorating situation in Syria and the EU-Russia relationship. The Prime Minister took the opportunity to offer the Council an update on key issues to be covered in the UK G8 summit in Lough Erne in Northern Ireland in June, which include tax, transparency, trade and terrorism.
The Prime Minister pushed for reforms to make the EU more competitive. Working with our European partners, including Chancellor Merkel, he set out practical steps that need to be taken to boost European economies and create jobs and growth, including reducing the red tape that continues to constrain our businesses, especially small and medium-sized enterprises. The European Council agreed that the European Commission will set out proposals on how to reduce burdens on small and medium-sized enterprises and, in autumn 2013, a list of unnecessary EU rules to be scrapped.
On Syria, my right hon. Friend the Prime Minister and President Hollande of France argued that, with 70,000 dead, and with more than 1 million refugees destabilising the region, it was important for the EU to be able to respond to the pace of events and the deterioration of the situation on the ground. The Prime Minister and President Hollande secured agreement from European partners that, ahead of the deadline for renewing, amending or ending the EU arms embargo at the end of the May, EU Foreign Ministers should consider further changes to broaden support for the National Coalition.
The Council also discussed EU-Russia relations. The Prime Minister made the case for working together for prosperity and security while being honest about matters on which we disagree with one another.
Mr Cash
Given that there are 11 pages of European conclusions, who decided to report to the House on the European Council for the first time by way of written ministerial statement, and why? Why did the Prime Minister not make the statement on the EU Council, as announced by the Leader of the House last Thursday? Does the Minister agree that, as the Prime Minister negotiated at the European Council, he should also make the statement and answer all questions?
The conclusions astonishingly state that much has been accomplished in the EU in recent years. Given the dysfunctional nature of the EU, the eurozone crisis and low growth, and the state of affairs in Greece and Italy, and now in Cyprus and Spain, how can such a statement be justified?
What specific steps are being taken to help small and medium-sized businesses, given that, despite all the protestations and initiatives, and 20 summits in 20 months, there is zero growth in the EU? Why is that? How does the Minister believe the single market can be a key driver for the UK’s growth and jobs when our trade deficit with the 27 EU member states is £48 billion, whereas we have a surplus of £20 billion with the rest of the world? Given past hopeless performance, what reason is there to believe that the burden of European regulation on small and medium-sized businesses, and other businesses, will ever be reduced?
Finally, what are the specific legislative proposals for the single resolution mechanism, and how will the level playing field be achieved for the City of London given the current state of play?
Mr Swire
I sometimes hope that my hon. Friend will see something good in the EU, but that might take a lifetime. It is to the credit of my right hon. Friend the Prime Minister that he takes his responsibilities extremely seriously. Since he took office, he has given 15 oral statements and two written statements following European Councils. He issued a written ministerial statement this morning, and I understand that my hon. Friend had a discussion with him on this subject yesterday.
Had my hon. Friend been with us at the debate earlier today on UK Trade & Investment, he would have recognised the feeling across the House—in fact, not right across the House, because there was nobody there from the Opposition. [Interruption.] Well, the Opposition spokesman was there, the Democratic Unionist party was there, but the Labour party was not there because it does not seem to be interested in small and medium-sized businesses. If my hon. Friend had been there this morning, he would have recognised the feeling that while SMEs are the way forward, they are over-regulated. Small and medium-sized enterprises provided 85% of new jobs in the EU in the past decade. As a result of the Council, we now have concrete measures to reduce regulations, including the top 10 most burdensome EU regulations, by June. The measures include rules on chemicals, product safety and customs. We believe the single market is the way forward and that EU trade agreements are vital. That is our vision of Europe, and one that I hope my hon. Friend shares.
Emma Reynolds (Wolverhampton North East) (Lab)
I recognise the importance of yesterday’s events, but I seek reassurance from the Minister that the Prime Minister will continue to make oral statements to the House after European Council meetings.
The Council conclusions call for member states to introduce short-term, targeted measures to boost growth and prioritise growth-friendly investment. Will the Minister tell us how the Government will put the measures he signed up to in Brussels into practice here in the UK, given that our economy is still flatlining? Specifically, what will the Government do to implement the youth guarantee mentioned in the Council conclusions signed up to by the Government in February?
On Syria, the crisis, killing and violence continue unabated. An estimated 70,000 people have lost their lives and there are more than 1 million refugees. There are major concerns about moves to lift the EU arms embargo. Once an arms embargo is lifted, it is close to impossible to guarantee in whose hands weapons will end up. That presents dangers, both now and after the conflict. How do we ensure that the lifting of the arms embargo does not simply lead to a further influx of weapons to the Assad regime, or spill over into other countries in the region? Finally, would the lifting of the arms embargo heighten or diminish the prospect of political transition in Syria? The primary aim of the Minister and the Government should be to ensure a reduction, rather than an intensification, of violence.
Mr Swire
The hon. Lady raises a number of issues. First, there is a precedent for a post-Council statement to be made by a written ministerial statement, if it is not possible for an oral statement to be made on the next sitting day. For example, the Prime Minister gave a written ministerial statement on 11 October, following the European Council on 16 Sept 2010. Yesterday, we were rather busy deliberating on Leveson.
We have secured exemptions and lighter regimes for small and medium-sized enterprises in 17 areas in the past year. We recognise that, with our European partners, we need to do a lot more to reduce the burden of regulation. As the hon. Lady acknowledges—it is acknowledged right across the House—SMEs are the growth engines and the wealth generators of tomorrow. We therefore have to drive this forward and ensure that we do not just talk about cutting red tape to SMEs, but deliver.
The situation in Syria is extraordinarily important. I do not want us to get ahead of ourselves. I made a statement a week or so ago, before the Foreign Secretary made a statement, on the change in the embargo regime for Syria. The hon. Lady will be aware that the situation in Syria deteriorates by the hour. She quite properly alluded to regional instability and spill over into countries such as Jordan, which is very worrying. We have taken a decision, with our European partners, to see what more we can do. The French are keen on not necessarily waiting until May-June, but on reviewing the situation on a regular basis. I think that that is the right thing to do. We should watch the situation as it develops and see how better we can respond to help those who are afflicted by this appalling tragedy. The bottom line is that Assad has to go and we have to do everything we can to support a credible opposition in order to bring some kind of peace and then some kind of democratic accountability to any replacement Government, and we will work with our European partners to that end.
The United Kingdom should be very proud of the role it is playing in alleviating the hardship by providing money and finance to refugees. Charities, NGOs, the Department for International Development and other organisations are stepping up to the plate, and it would be good if other countries followed our lead. It is an horrific and appalling situation that we see on the news every night, so it is right that we do everything we can and examine every avenue available to bring it to a speedy end.
Sir Menzies Campbell (North East Fife) (LD)
No ones disputes that the situation in Syria is appalling, but does my right hon. Friend understand that some Members have grave reservations about the apparent move by Britain and France towards the supply of arms to the opposition—reservations, because it is a principle of intervention that we should intervene only when satisfied that we would make things better? Secondly, what does he say about the prospect of a proxy war between permanent members of the UN Security Council being fought out in Syria?
Mr Swire
The right hon. and learned Gentleman, of all people, will be aware of the situation—as I have said, 70,000 people are dead and there is a huge refugee and humanitarian crisis. The bottom line is that Assad is still in place and is being strongly supplied and strengthened by others. I am not going to talk, however, about our arming anyone, as it might never happen. We have made our position perfectly clear. There are Members on both sides of the House who, for understandable reasons, are extremely nervous about getting dragged further into this appalling situation, but I stress that we are not, at this point, discussing arming anyone. Were that to occur in due course, and were our European partners to take that decision, clearly it would need to be properly debated in this House. There is no change in our position, however, as was stated very clearly in the last statement.
Chris Bryant (Rhondda) (Lab)
It is just tawdry to pretend that the Prime Minister could not have given an oral statement. He could perfectly easily have done so today, and he should have done so. We do not do EU scrutiny well in this House, and are doing it even worse as a result of today.
May I ask the Minister specifically about relations with Russia? One year ago, the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North East Bedfordshire (Alistair Burt), stood up in the Chamber and accepted a resolution, unanimously agreed by the House, that we would ban people involved in the death and murder of Sergei Magnitsky coming to this country. He said that we would wait to see what the Americans did. The Americans have now passed legislation to ban those people going to the US. When will the Government do the same?
Mr Swire
On the hon. Gentleman’s remarks about the Prime Minister, I can do no better than repeat what the Prime Minister said to my hon. Friend the Member for Stone (Mr Cash) yesterday:
“We now have more European Councils than sometimes is altogether healthy, and certainly more than there have been in the past. There are almost always oral statements, but I think that on this occasion, when it was very much a take-note European Council rather than one packed with exciting things, a written ministerial statement will probably suffice.”—[Official Report, 18 March 2013; Vol. 560, c. 680.]
I have nothing to add to that.
The hon. Gentleman will be aware that the Russian Foreign Secretary was in London last week and had extensive discussions with my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs.
Mr Swire
Will the hon. Gentleman allow me to finish? Russia is a major player in the world. We continue to have extraordinarily important discussions with it about Syria and about the Democratic People’s Republic of Korea and other issues, and we continue to review—and raise when appropriate—the situation there regarding human rights.
Mr John Redwood (Wokingham) (Con)
Given the importance of low-energy prices to industrial recovery and jobs, did the Prime Minister take advantage of the summit to ask the Germans how they were managing to run their coal stations for much longer, under EU rules, and to have cheaper energy, and did he give notice that Britain needed to do the same?
Mr David Winnick (Walsall North) (Lab)
With respect to the right hon. Gentleman, no matter how many times the Prime Minister has made statements on the European Council, it is still the Prime Minister’s responsibility to come to the House and make such a statement whenever the Council has met.
On Syria, is the Minister aware that no one in the House disputes for one moment the sheer brutality of the Syrian regime or its total indifference to human suffering? At the same time, however, I believe that there should be a test of feeling in the House—a vote, perhaps—on the issue of arming the other side. Far from helping the situation, it could escalate the violence, the suffering and the crimes against humanity that we see on our television screens. I praise the humanitarian work that the Government are doing, with our support, for the children and the rest. That is absolutely essential.
Mr Swire
I agree with the hon. Gentleman’s second point; he is absolutely right. His first point was somewhat hypothetical. Of course there is understandable concern among Members on both sides of the House about the direction in which Syria is going, and about what might or might not happen, but there is no change in our position today. I have come to the House to explain what was discussed at the summit, and it is absolutely right that we keep all options under review. I think he would agree that what has been done to date has not worked very well, as we continue to see a greater deterioration in the country and greater humanitarian suffering. It is therefore quite right that we keep all our options open.
Mr James Clappison (Hertsmere) (Con)
May I say gently to my right hon. Friend that he is much more likely to persuade my hon. Friend the Member for Stone (Mr Cash) to become an evangelist for the European Union than to persuade the European Union to desist from creating burdensome regulations? Is it not deep within the DNA of the European Commission and the European Parliament to go on producing regulations, day in, day out, that impose burdens on our business? Is it not in our national interest to be outside the legal structures of the European Union as much as possible, and does not that illustrate the many merits of my right hon. Friend the Prime Minister’s policy of renegotiating our relationship with the European Union and having a referendum on that issue?
Mr Swire
It is worth saying that we secured agreement from the Commission at the Council to come up with plans to reduce the top 10 most burdensome EU regulations by June—including rules on chemicals, product safety and customs—and to produce proposals by the autumn on the unnecessary European rules that need to be reversed and removed from the statute book. We also secured agreement on action to improve the implementation of single market legislation, including the services directive. I hope that my hon. Friend will agree that, if implemented directly, those will be welcome steps that will enable businesses in his constituency and in mine to grow.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
First we abolished pre-Council discussions; now we are doing away with post-Council statements. Is it the policy of Her Majesty’s Government that the Prime Minister will talk about Europe only when he thinks that the meeting was “exciting”, and that we are otherwise to be kept informed only in writing or through a junior Minister who has been forced to come here?
Mr Swire
The hon. Lady is making the great mistake of imagining that I was forced to do anything. I came here very willingly, as the Speaker has pointed out, to respond to the urgent question from my hon. Friend the Member for Stone (Mr Cash). I have stated the Prime Minister’s position and, thanks to the indulgence of the Speaker in allowing me to repeat verbatim what the Prime Minister said on this subject to my hon. Friend the Member for Stone yesterday, I have nothing further to add.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Will my right hon. Friend commend the Prime Minister for setting out the need for a new relationship with our European partners? Is not that need underlined by the fact that, despite vetoing the fiscal union treaty last year, the presidency conclusions contain four new pieces of legislation on economic consolidation that apply to the UK? They include a national fiscal policy making framework, strengthening the surveillance of national fiscal and structural economic policies, an accelerated procedure for dealing with member states with an excessive deficit and a new procedure for monitoring the build-up and correction of macro-economic balances. Why does that apply to us at all, given that we are not going to join the euro?
Mr Swire
The hon. Gentleman should also acknowledge what was discussed, particularly in the Council, and the emphasis that was placed on the single market and on cutting red tape for small businesses. The Prime Minister is setting out what will be discussed at the G8 at Lough Erne, when we will be talking about issues such as tax, transparency and getting businesses going. Those are the things that we want to concentrate on. I agree with my hon. Friend that those other things are not so relevant.
Kate Hoey (Vauxhall) (Lab)
Did the Prime Minister have any discussions on the fringes of the European Council meeting about Zimbabwe, and about the fact that, after this weekend, the European Union will lift many more of its restrictive sanctions? Does the Minister realise that there is concern about that? There is still a problem in Zimbabwe. There are huge human rights issues, and it is important that the European Union should give the matter careful thought before lifting those sanctions in the lead-up to the elections in July.
Mr Swire
The hon. Lady makes some extraordinarily good points on the sanctions against Zimbabwe. I was not aware that the matter was not on the European Council agenda. I was not privy to any private conversations that might have taken place, but she has made some extremely pertinent points.
Mr Peter Bone (Wellingborough) (Con)
At business questions last Thursday, the Leader of the House started by saying that, on Monday 18 March,
“I expect my right hon. Friend the Prime Minister to make a statement following the European Council.”—[Official Report, 14 March 2013; Vol. 560, c. 494.]
We know that the Prime Minister was here on Monday, and it is absolutely unacceptable that he has not come to the House to report on the European Council. Will the Minister at least confirm to the House that he himself was present at the Council?
Mr Swire
I can confirm that the Prime Minister was there, that he took a lead, and that he has come back. I am now reporting back on what was decided at the European Council. The hon. Member for Wellingborough (Mr Bone) makes the point again about whether the Prime Minister should have come to the House, but he might have noticed that we did have Leveson this week. No doubt his points will have been heard by those who organise the House’s business, however.
Kelvin Hopkins (Luton North) (Lab)
Was there any discussion about the continuing fragility of European banks, especially in the weaker eurozone member states? In the light of the raid on Cyprus’s bank accounts, can we now expect depositors to start withdrawing cash from their accounts in those weaker banks, resulting in the serious risk of bank runs?
Mr Swire
No, I do not think we can. Cyprus was not on the agenda but, if you will allow me, Mr Speaker, I will make this point. This question was answered extensively by the Financial Secretary to the Treasury, my right hon. Friend the Member for Tunbridge Wells (Greg Clark) —yesterday, I think—and everything is being done to protect British servicemen and those working for the diplomatic service who are exposed to what is going on in Cyprus. The fact that it is happening in Cyprus, however, does not necessarily mean that it is going to happen elsewhere. Indeed, we very much hope that it will not.
Martin Horwood (Cheltenham) (LD)
European Ministers have rightly considered broadening support for the Syrian National Coalition, given that it is opposed to the murderous Assad regime and to the equally undesirable alternative of a jihadi state, but is it not Russia to whom the Syrian National Coalition needs urgently to speak? Will the Minister update us on any progress that we have made on promoting dialogue between the Syrian National Coalition and Russia, which is, after all, arming the regime very freely?
Mr Swire
My hon. Friend makes a good point. Like Russia, we want to see an end to the violence, to create space for discussions on a Syrian-led, inclusive political transition. We encourage Russia to persuade the Assad regime, which is still in place, to enter into discussions with the Syrian opposition to bring forward political transition. Russia has a key role to play.
Mr Nigel Dodds (Belfast North) (DUP)
The Minister said that there was a precedent for having a written statement following a European Council when there had not been time to make an oral statement. However, there was an opportunity to make an oral statement on Monday and today so, with the greatest respect to the Minister, will he personally take back to the Prime Minister the strength of feeling on both sides of this House that, in future, he should come and give a report on the outcome of European Council meetings?
Mr Swire
I am sure that people are hearing this loud and clear, but I would say to my right hon. Friend that there is a precedent for a post-Council written ministerial statement if it is not possible for an oral statement to be made on the next sitting day. The Prime Minister gave a written ministerial statement on 11 October 2010, following the European Council on 16 September 2010.
Mr Andrew Turner (Isle of Wight) (Con)
It is becoming more and more likely that we, and especially the military, will be dragged into a war in Syria. My constituents do not want the former Prime Minister, Tony Blair, advising us or the Government on what to do following Mr Hollande’s views. Does the Minister agree that some silence from the former Prime Minister would be appropriate?
Barry Gardiner (Brent North) (Lab)
Does the Minister understand that it is the trajectory that worries Members? First, we lift the arms embargo, then we supply arms, then we supply military advisers, then personnel and then those very arms are used against the personnel. The best way to put a fire out is not to put more fuel on it.
Mr Swire
The best way to put a fire out is not to light it in the first place, which is something President Assad would have done well to adhere to. As I said, there is understandable nervousness on both sides of the House about where this is leading, but we are living in a fool’s paradise if we think that the spillover—the knock-on effects from what is going on in Syria—will not affect us. It is unsettling countries in the region—I mentioned Jordan and others—and creating a humanitarian problem with appalling political consequences that we cannot stand by and ignore. I say again, publicly, to all those who continue to support the brutal regime of President Assad that they must stop. Like us, they must engage with the official opposition in Syria to bring about a transition to peace and a democratically elected Government. That will take time, but in the meantime we should leave everything on the table to make sure that we look after those who are exposed—the women, the children and the elderly—to the most horrible of situations.
Mr Philip Hollobone (Kettering) (Con)
If our membership of the European Union is going so well, how come we are running a £48 billion trade deficit with our European partners, in contrast to a £20 billion surplus with the rest of the world?
Mr Swire
Again, I regret that my hon. Friend was not with us at our debate this morning in Westminster Hall where we stressed the importance of trading—[Hon. Members: “He chaired it.”] If my hon. Friend had heard me correctly, he will know that I said that it was unfortunate that he was not able to take part in the debate in Westminster Hall that he so ably chaired. Having listened to all sides of the argument this morning, he will be aware that we see our future both within Europe as well as outside Europe. We want to ensure that the single market is there, and we want many more EU trade agreements with America and other parts of the world. This allows me to put on record again how ably my hon. Friend chaired this morning’s deliberations.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
The precedent for the written statement was not really a precedent at all, was it? On that occasion, the European Council was followed by 25 days of recess, so it was hardly surprising; an oral statement would not have had the same immediacy when it was eventually made to the House. On the meeting itself, the Minister told us that it was a take-note meeting where nothing much happened. Given the discussions about Syria, it seems to have been quite a major meeting, but if it was a take-note meeting where nothing much happened should not the Prime Minister have been making things happen? Should he not have been trying to do something to get Europe to follow a much more effective growth strategy, which is what we all need?
Mr Swire
I was purely quoting the Prime Minister, and I quote him again. He said that
“it was very much a take-note European Council rather than one packed with exciting things.”—[Official Report, 18 March 2013; Vol. 560, c. 680.]
There were things, which we have gone through during the last 30 minutes or so, to kick-start the European economy, make it more competitive and cut regulation so that we can make sure that European companies are in a good position to help trade out of the appalling deficit in which we all find ourselves.
Mr Crispin Blunt (Reigate) (Con)
I hope it is of some comfort to my right hon. Friend that I think that the Government’s response on the European Council through a ministerial statement was entirely correct, particularly having read the conclusions. It also gave us the opportunity to hear my right hon. Friend answering the urgent question, and that is a benefit of the process.
On the substantive point about Syria, I am delighted that my right hon. Friend was able to tell the House that there has been no change in the policy on Britain’s position since the Foreign Secretary’s last statement on Syria. Given that it was spun that the Prime Minister was supporting the President of France in trying to obtain more flexibility about changes to the arms embargo, there was a possibility that we might be in the same position as the French on the merits of lifting it. Plainly, we are not and I hope my right hon. Friend will take note of the concern about the issue that has been expressed on both sides of the House.
Mr Swire
My hon. Friend knows the area as well as anyone in the House, so he will be aware of all the things I said about the regional instability created by the continuing problem in Syria. It is not something we can let alone. We are working extraordinarily closely with the French. That is the case. Today, I have nothing further to add about our position, because it has not changed, but I say again that we need to keep the ever-changing situation in Syria under constant review. Unfortunately, it is an ever-changing situation that deteriorates hour by hour, with appalling humanitarian effects. We take nothing off the table, but at the moment we continue as I outlined in the statement a couple of weeks ago.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
Did the Prime Minister urge French and German Ministers to proscribe Hezbollah, considering its role in killing civilians in Syria and murdering Israeli tourists and a Bulgarian national in Bulgaria?
Mr Swire
The whole point of bringing some assistance to the Syrian official opposition, and bolstering them and allowing them to present themselves as a credible alternative to the Assad regime, is so that all the other organisations, backed by Hezbollah or whoever, do not get traction in Syria. The hon. Lady would have to agree with the action the Government have taken to date in bolstering the Syrian opposition, which we see as the only credible long-term alternative to the current regime in Damascus.
Mr Henry Bellingham (North West Norfolk) (Con)
Was Mali discussed at the Council, and the EU’s policy towards the Sahel? Can the Minister of State give the House a quick update on the progress of the EU training mission?
Jim Shannon (Strangford) (DUP)
The impact of the war in Syria on the Christian community there is causing great concern to many people in this country and elsewhere. At the EU summit, was there any discussion of the displaced Christian community who are caught between President Assad’s regime and the anti-Government forces?
Mr Swire
I am not aware that there was specific discussion of the Christian community in Syria, but as a Government we take it extremely seriously not just in Syria but elsewhere in the world when Christians find themselves under unprecedented levels of attack. I pay tribute to the continuing work of my noble friend Baroness Warsi, who takes her duties as Minister for faith extremely seriously, including the protection of Christians.
Mr David Nuttall (Bury North) (Con)
British businesses want to see action not just words on reducing the burden of EU regulation, so may I urge the Minister to encourage the EU to adopt our one in, two out policy on new regulations, which will show whether it really is serious about cutting the burden of red tape?
Mr Swire
I see nothing to disagree with in that statement. It seems to me that our companies still suffer from over-regulation. All of us in the House are guilty of talking about cutting red tape; at the next election, let us not be judged by the electorate as guilty of having not cut red tape. Of course, my hon. Friend is right; we need to free our businesses from red tape, particularly the smaller ones that we need to grow. There were concrete moves towards that in the recent Brussels Council.
Rehman Chishti (Gillingham and Rainham) (Con)
Is the Syrian opposition led by Mr Khatib fully united in supporting the new transitional Government in Syria presiding over rebel opposition-held areas?
Mr Swire
We continue to discuss everything with the Syrian opposition Government. We continue to support them and we continue to believe that they are the only viable alternative to Assad for the reasons that I outlined to the hon. Member for Liverpool, Riverside (Mrs Ellman).
Bob Stewart (Beckenham) (Con)
We have reached the 10th anniversary of the second Iraq war. It was perhaps with good reason that we involved ourselves in Iraq, Afghanistan and Libya, but it cost us a lot and people now in power blame us quite a lot. Did the European Council consider what more the Arab world can do, rather than just asking us again to help out?
Mr Swire
This is something not just to be discussed at a European Council; we believe, particularly on the humanitarian side, that there is plenty more that the Arab world can do. Also, we would urge all countries in that part of the world to look very closely at where they are putting their support. We believe that the official Syrian opposition is best placed to provide a transitional Government to replace the brutal dictatorship of Assad.
My hon. and gallant Friend is showing a certain nervousness about what is going on in Syria, understandably, but I hope he would agree that as of today we are in the right place on this. I believe the Government are not getting ahead of themselves. But we do have a very serious situation, which is deteriorating by the minute, and it is only right that we should be flexible in our approach to how we help bring it to a speedy and long-overdue end.
Chris Heaton-Harris (Daventry) (Con)
Does my hon. Friend agree that it is strange that Cyprus was not discussed, especially in the context of conclusion 13, where the directive for deposit guarantee schemes was discussed and there was awareness of trying to protect taxpayers in the context of banking crises? As this was within hours of a depositor haircut happening in Cyprus, would this not have been worth noting at that point?
Mr Swire
At least the right hon. Gentleman was paying attention. I was not even there; we have got that straight, anyway.
My hon. Friend the Member for Daventry (Chris Heaton-Harris) is right. What we are concentrating on now, in this country, is ensuring that those of our servicemen or diplomatic service, and so on, who are in Cyprus are not adversely affected; as he would expect, discussions are going on to that end.
Hinkley Point
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
With permission, I would like to make a statement.
I am today publishing a development consent order which authorises the construction of a 3,260 MW nuclear power station at Hinkley Point, known as Hinkley Point C. The order will allow, from a planning point of view, NNB Generation Company Limited, a subsidiary of EDF Energy, to construct two European pressurised reactors, each of a capacity of 1,630 MW. It will also enable the company to construct associated development, such as freight handling and road improvements, and to carry out the necessary work to obtain land and rights over land, by compulsory acquisition if necessary.
My decision to grant consent comes after a long process of consultation and analysis, first on the policy that underpins the decision. As set out in the national policy statements that were approved by this House in July 2011, a new generation of nuclear power stations are a key part of our future low-carbon energy mix, tackling climate change and helping to diversify our supply, contributing to the UK’s energy security. Low-carbon energy projects will also bring major investment, supporting jobs and driving growth.
Secondly, on the proposals for Hinkley Point C itself, these were considered, with full public engagement, by a panel of five experienced planning inspectors from the Planning Inspectorate, whose conclusions and recommendations I have followed very closely. I am grateful to them for all their work, and to all those who engaged in that process, which was completed within the statutory time scale of six months. Copies of my decision, together with the panel’s report and other supporting documents, have been placed in the Library.
In recommending that development consent be granted, the panel concluded that the benefits of the proposed Hinkley Point C station outweighed the impacts, including those on the local communities, particularly when taking into account proposed mitigation measures. These include the provision of a bypass around Cannington; enhanced landscaping and access for amenity purposes; and ensuring that the work force do not cause any additional burden on local services such as health, education and housing. In making my decision, I also took into account representations made too late to be considered by the panel and not therefore included in its report. My consideration of these late representations is set out in my decision.
I expect the wide range of mitigations and controls provided for in the order and elsewhere to be effective in reducing the impact of the construction work on local people, but I also recognise that as these works are carried out, those who live in the area may well have their daily lives disrupted in one way or another. This disruption is, in my view, outweighed in the final analysis by the benefits that the project would bring. Chief among these is the very significant contribution it would make to the achievement of energy and climate change policy objectives. The energy national policy statements make it clear that the construction of new low-carbon electricity generation infrastructure is of crucial national importance. There is also significant potential for local benefits including new jobs, with a work force of up to 5,600 during construction, and contract opportunities for the supply chain including local businesses.
I said that the order authorises construction from a planning point of view. There has of course been an entirely separate process scrutinising the nuclear safety aspects of the project, with decisions taken by independent regulators in the Office for Nuclear Regulation and the Environment Agency, including the issuing of a nuclear site licence.
Some further regulatory approvals remain to be taken, including the Marine Management Organisation’s marine licence and site-specific aspects of generic design assessment from the Office of Nuclear Regulation, but the decision I am announcing today, together with those already taken by the nuclear regulators and a number of other permits issued last week by the Environment Agency, means that NNB Generation Company Limited now has the majority of the consents it needs to build and operate the plant.
That, of course, is not the end of the story. Decisions remain to be made on the funded decommissioning programme and strike price. Discussions on both these subjects are ongoing and intense, but I expect them to be concluded shortly. As confirmed in my January statement to Parliament, the Government are committed to their existing policy on long-term disposal of nuclear waste and are pressing ahead with plans to identify a geological disposal facility in order to put in place a permanent facility for disposal of radioactive waste from both new and existing plants.
Affordable new nuclear will play a critical role in a secure, diverse electricity supply for Britain and make a significant contribution to the transition to the low-carbon economy needed to tackle climate change. Therefore this decision on planning aspects of the first new nuclear power station in a generation represents an important milestone in that process to decarbonise our electricity supply and economy. I commend the statement to the House.
Caroline Flint (Don Valley) (Lab)
I thank the Secretary of State for early sight of his statement. When we last debated nuclear power on 7 February, I was clear that we strongly support and are absolutely committed to facilitating new nuclear build in Britain at a fair price, and I very much welcome the Secretary of State’s strong support for nuclear power in the House today.
We believe that nuclear power will have an important role to play as part of a more balanced, secure and, importantly, low-carbon energy supply for the future. That is why we have supported the Government’s efforts to attract investment in new nuclear, which began under my noble Friend Lord Hutton and my right hon. Friend the Leader of the Opposition, as well as ensuring the establishment of a statutory Office for Nuclear Regulation. I also commend the role of the local MP, the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger), whose ancestor, Queen Victoria, oversaw during her reign an industrial revolution. He is playing a small part in the new, clean, low-carbon industrial revolution for the 21st century.
Today’s announcement granting planning permission for new nuclear reactors at Hinkley builds on the progress in recent months which has seen the ONR approve the reactor design and the Environment Agency granting the necessary environmental permits, all of which we welcome.
On the specific point about planning consent, let me ask the Secretary of State three questions. First, as we know, new nuclear build has the potential to contribute to economic growth and job creation. Hinkley Point C alone could require as many as 500 new construction apprentices and 200 operations apprentices. Last year, the Prime Minister signed an agreement with France on nuclear energy, but what specific steps is the Secretary of State taking to ensure that the UK supply chain and the local work force are able to benefit as much as possible from this development? Many of the people we hope will be building and operating this power station are probably still in school, so we have got to equip them with the skills they need.
We must also be mindful, however, that any development of this magnitude, if not properly dealt with, could have a detrimental impact on the local area. Secondly, therefore, will the Secretary of State tell the House in more detail what measures will be put in place as part of the planning agreement to ensure that any mitigation measures needed to reduce or eliminate this impact are implemented?
Thirdly, nuclear power stations are national assets, but we should also recognise the contribution of the communities that host them on our behalf. Last year, the Government launched consultation on the community benefit of onshore wind. Will the Secretary of State tell us what community benefit package, beyond what he has already mentioned, the Government believe is right for new nuclear developments? Will he also provide a little more detail about how any package would be split between West Somerset council, which covers Hinkley Point, and other local authorities, such as Sedgemoor district council, which will also be affected by the development?
Given that EDF is still in negotiation with the Government to agree a strike price for the power it generates at Hinkley Point, it is difficult to debate today’s announcement on planning consent without some reference—the Secretary of State has already mentioned this—to the financing that will determine whether the development goes ahead. I understand that details of those discussions are commercially sensitive, but there has been much speculation in recent weeks that a deal is imminent.
The Secretary of State will know that the length of the contracts, as well as the price, will face scrutiny whenever a deal is reached, but can he provide an update on those negotiations and on when he hopes to reach agreement? He knows that we believe that the process for agreeing contracts for difference could be improved to make it more robust and transparent and to ensure that it delivers value for money for consumers. Will he tell us what, if any, further consideration he has given to our proposals in respect of the Energy Bill, which include ensuring that agreed investment contracts are laid before Parliament within three days of being entered into, provisions to ensure that any change to the contracts are published and subject to proper scrutiny, and greater protection for bill payers in the event that construction costs are lower than projected?
Today’s announcement is an important milestone in the development of new nuclear build in the UK. There is no doubt about that. On behalf of the Opposition, I am pleased to welcome it and to reiterate our support for nuclear power alongside an expansion of renewable energy and investment in carbon capture and storage as part of a clean, secure and affordable energy supply for the future.
Mr Davey
I pay tribute to the right hon. Lady and the Labour party for their support and welcome today. Their support and indeed the work by the previous Government in their last few years have allowed investors and nuclear operators to see that there is cross-party support, which gives people confidence—[Interruption.] I hear some coughs from my party’s Benches and they remind me that it has hon. Members who do not support the proposal. However, we have coalition agreement that helps that cross-party approach.
The right hon. Lady was right to pay tribute to my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger), and I hope that we will hear from him shortly. He has played a leading role in his community, working with local councils there, and we should also pay tribute to those in all authorities, but particularly local authorities, who have worked so hard on the matter.
The right hon. Lady asked me some questions, including on planning, and I hope to give her the reply she wants. She rightly talked about the importance of the local supply chain. Already, a huge amount of work has been done on that, primarily by local councils and others. Bridgwater college is at the centre of trying to ensure that young people and the wider work force in the area benefit from the work that will be created directly and indirectly. She may be aware that my Department has been working with my right hon. Friend the Secretary of State for Business, Innovation and Skills on an industrial strategy for the nuclear supply chain, and we will publish it in due course. Whether at Hinkley Point C or any future nuclear power stations, we want to ensure significant British content—British firms and British workers—in the nuclear supply chain.
The right hon. Lady asked about work in the local area and conditions in the development consent order to make sure that local people’s lives are not disrupted. My decision letter, which I will place in the Library, includes a whole range of issues, most of which follow on from the independent panel—the examining authority. I have made one or two changes to its proposals, particularly concerning Combwich wharf to try to ensure that more freight can come by sea. Our proposal will further reduce traffic in Cannington. We have made decisions to protect local residents.
On community benefits, which the right hon. Lady rightly raised again, I confirm that there will be a package of such benefits, which will be announced in due course. I cannot say any more about that, but the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), is working on that.
The right hon. Lady closed with a request for an update on the negotiations. She will be aware that I have steadfastly refused the temptation to give right hon. and hon. Members a running update because the negotiations are commercial and it would be improper to do so. However, as we have said on several occasions, when the deal has been concluded, we will be completely transparent about its terms, including the strike price, the duration and other key terms and conditions.
The right hon. Lady was right to say that we will need state aid clearance in the usual way, and that will also enhance transparency. Finally, she referred to the issues that the Opposition have raised fairly and reasonably during discussion of the Energy Bill. We will respond to many of those issues on Report.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
This is a very good day for Britain and a phenomenally good day for Bridgwater and West Somerset. I thank not only the Front-Bench team, which has been phenomenally important in that, but the Opposition, and especially the Leader of the Opposition, who signed this off when he was Minister of State. I am incredibly grateful to the House, and my constituents are more than grateful to everyone here who has played such an important part.
The importance of the announcement is that we can now kick-start the civil nuclear programme in the United Kingdom, and that is crucial. The innovation, jobs and input from across the industry are staggering. The Nuclear Industry Association is holding its conference across the road from here at the Queen Elizabeth centre, and it is like a cat on a hot tin roof, ready to go. We are Hinkley-ready, and we will be on time and on schedule.
Will the Secretary of State continue to wax lyrical, if I may tempt him, on what the decision will mean for Sedgemoor council, West Somerset council and Somerset county council areas? Those in Sedgemoor will feel the pain, especially in Bridgwater, because they will facilitate the plant, although it will be in West Somerset, as the right hon. Member for Don Valley (Caroline Flint) said. It will be important for education, innovation, industry and local people. I would be grateful if the Secretary of State continued to wax as lyrical as he has done so far, and I thank the House.
Mr Davey
I have already paid tribute to my hon. Friend, and what he has just said shows why that tribute was appropriate. Much of his work and that of local councils, my Department and others has been aimed at maximising the economic benefit for the area, and indeed the whole country. He will be aware of the nuclear skills academy, which is based at Bridgwater college, and that Sedgemoor and other councils have attracted new investment to the area for additional construction, as well as support for schools in the area. He will also know that even before we unveil the community benefits project, the decision provides significant benefits to the local area.
My hon. Friend is right in saying that there will be some pain for some local people in the local community during the long construction phase, but I hope that they and he believe that the panel’s recommendations and my decisions will mitigate that as much as possible.
Paul Flynn (Newport West) (Lab)
Does the Minister agree with himself, as the Lib Dem spokesman, that nuclear power is possible only with a vast—that was his word—taxpayers’ subsidy or a rigged market? Does he also agree with himself, as a supporter of the coalition agreement, which said that there would be no subsidy for nuclear power? Can he now deny the claims that the strike price, which was originally £50 per megawatt-hour, is being negotiated at £97, and that we will be giving to a near-bankrupt French company a short-term subsidy of £30 billion that could turn out to be £150 billion in 35 years?
Mr Davey
The hon. Gentleman is right to say that my concerns on nuclear power for some time have related to the price, because the history of nuclear power in this country and elsewhere is that it has turned out to be expensive. That is why this coalition Government —and, indeed, the previous Labour Government—have gone about the third generation of nuclear power stations very differently from how Government’s went about things in the past to ensure that the consumer, business and the taxpayer are protected. That is why the coalition agreement says that there will be no public subsidy. I have to say to him that I simply do not recognise the figures he quoted.
Dr Liam Fox (North Somerset) (Con)
I congratulate the Government on finally getting our civil nuclear programme moving after too long a period of paralysis in this country. It is vital for our energy security and our low-carbon generation. The Secretary of State will be well aware that the transmission from Hinkley will be through 450 kV cables as opposed to the current 132 kV. That will require electricity pylons more than twice the height of those we have now. Where is the overall green gain if we get green generation, but the transmission results in a blight on our environment in some of the prettiest parts of the country, and what can the Government do about that?
Mr Davey
I am grateful for the right hon. Gentleman’s welcome for the statement. I should make it clear for him and the House that today’s decision is about planning. We still have a number of issues to resolve, but we are in intense negotiations.
The right hon. Gentleman makes the point about the infrastructure and pylons. He and I met to discuss the matter recently. I will repeat part of what I said then: every bit of green infrastructure has to be considered case by case; National Grid, under statute, is responsible for examining those cases; and, when planning issues result, the Secretary of State clearly cannot comment on them, as it would be improper to do so. When we met, I undertook to look into the issue. We are looking at it with my hon. Friend the Minister of State, who is energy Minister.
Mr Jamie Reed (Copeland) (Lab)
I commend the Secretary of State on his statement. In making this decision, he has clearly listened to many people in all parts of the House over many years, and I particularly commend him on his intellectual honesty in reaching this position.
It goes almost without saying that I, my constituents and my community will continue to assist the Secretary of State and his Department with the solutions required for radioactive waste management in this country, but will he now, in addition to introducing clarity on the strike price, undertake to bring forward a clear critical path for all the sites identified for new nuclear development so that we can further remove the uncertainty surrounding their development?
Mr Davey
I am grateful for the hon. Gentleman’s comments. He has been a real champion for the nuclear industry, both for his constituents and more widely. I cannot say much more today on the strike price. I hope he understands that. He is right to say that we remain focused on finding a solution on the waste issue. I look forward to continuing to work with him and others on it.
Martin Horwood (Cheltenham) (LD)
Will the Secretary of State—my right hon. Friend—confirm that this planning decision does not represent a decision to go ahead with Hinkley C, in which respect it pales into insignificance beside the strike price negotiation? If he will accept my figures, which are hypothetical, and if the maths adds up, £97 per MWh for 35 years would guarantee an uncompetitive French nationalised energy company nearly £90 billion over time from British bill payers.
Mr Davey
My hon. Friend is right to say that today’s decision is purely about planning. We have read, studied and listened to the detailed report from the independent Planning Inspectorate and the examining authority that looked into this matter over some time, and we have had a small team of planning officials looking at it in the Department, separate from the policy officials. The decision is completely separate from the issue around the strike price.
Again, I do not recognise the figures that my hon. Friend uses. I hope he realises that I shall not comment on the negotiations on the strike price.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I congratulate the Secretary of State on his work on the matter and welcome the Liberal Democrats to supporting new nuclear power stations. May I press him to say more about the skills base and what steps the Government will take to ensure that we have enough civil engineers and nuclear physicists going forward?
Mr Davey
That is an important issue and the hon. Gentleman is right to raise it. I mentioned what is being done locally with the nuclear skills academy and EDF working with Bridgwater college and others. When we introduce the nuclear supply chain strategy with the Department for Business, Innovation and Skills, we will say more on that matter. Already, work is under way with higher education institutions and others, and he will be aware that the chief scientific adviser has made the point that the issue needs to be tackled. Work is under way.
Charles Hendry (Wealden) (Con)
May I say how delighted I am that the Secretary of State, as a Liberal Democrat, has now consented to more new nuclear capacity than any Minister since Tony Benn? Does he agree that that shows that the new planning system is working as intended, with tens of thousands of pages considered and agreed within about a year? Will he join me in paying tribute to officials in the Planning Inspectorate, the Department of Energy and Climate Change and the other parties involved for all their resolve in bringing a nuclear renaissance in the UK one big step closer?
Mr Davey
I am grateful to my hon. Friend for his comments. I certainly will pay tribute to the officials in my Department and elsewhere who have been critical to bringing the decision forward and, indeed, taking forward the new nuclear programme. I also pay tribute to him. He was an excellent Minister and he played a significant role in the new nuclear renaissance under this Government. There are Liberal Democrats who will not necessarily agree with not so much the decision today, but the overall new nuclear building programme. However, many Liberal Democrats in the local area and in the national party believe that we need to focus on climate change as a real and present danger to our country and the planet. Difficult decisions are required if we are to tackle climate change.
Caroline Lucas (Brighton, Pavilion) (Green)
There are much faster, cheaper and more affordable ways to tackle climate change than nuclear, but my question to the Secretary of State is about the only two nuclear power stations under construction in Europe today. They are billions of pounds over budget and delayed by an ever increasing number of years. Italy, Switzerland, Belgium, Holland, Spain, Germany, Sweden and Denmark are all rejecting new nuclear. Even France is aiming to reduce its reliance by 25%. What do all those countries know that we do not? Why is the Secretary of State locking UK consumers into artificially high energy prices for years to come—to the benefit of the French Government, not the UK taxpayer?
Mr Davey
The hon. Lady has pushed her views for some time, and I have respect for them, but tackling climate change means that we need every form of low-carbon generation possible. The risk and the challenge are so great that it is wrong for people who are worried about climate change to turn their back on the issue. She points to other countries, but around the world many countries are looking again at new nuclear. She is right that the two new nuclear power stations that are being built are over budget and out of their original time schedule. That is why we are being extremely careful in our approach to those negotiations and to the new nuclear programme, learning the lessons of the past and from other countries so that we do not repeat those mistakes.
Damian Collins (Folkestone and Hythe) (Con)
I welcome the Secretary of State’s statement, which gives a huge boost to the confidence of everybody involved in the UK civil nuclear industry. Is not the statement also a statement of hope for other communities, such as Dungeness in my constituency, which aspire to be part of the revolution in the British nuclear industry?
Mr Davey
I agree with my hon. Friend. Many people—not only in the nuclear industry, but in the low-carbon energy sector generally—will see the statement as a key moment and welcome the boost to confidence more broadly. He has been a doughty champion for Dungeness. He and I have already met formally and talked about the work that he wishes to do locally, and I encourage him to keep going.
Barry Gardiner (Brent North) (Lab)
I welcome the Secretary of State’s announcement. I visited Hinkley in November as part of the Select Committee visit and was most impressed by the arguments for community benefit, of which he has spoken. However, he rightly said that this is not the end. I do not wish to press him on the strike price—I understand that those matters are commercial—but will he at least acknowledge two principles? First, the strike price will be based on the construction costs. Therefore, will he incorporate a clawback into the formula, should those costs be overestimated? Secondly, does he accept that Jean-Paul Chanteguet, Chairman of the Select Committee in the French Parliament, has said that Flamanville, on which Hinkley is based, will be producing at €72 per MW, and that that must, in anybody’s account, form the baseline for assessment of the negotiations in which the Secretary of State is engaged?
Mr Davey
I pay tribute to the hon. Gentleman and the other Select Committee members who have not only grilled me on this and other issues but made inquiries into the matter and been generally supportive. On the details of negotiations, clawbacks and the actual price, I am afraid that I must disappoint him; I will not be drawn on those. We are determined to get a price that represents value for money, that is fair and affordable and that bears scrutiny.
Mr Philip Hollobone (Kettering) (Con)
When does the Secretary of State expect the first regular stream of electricity to start flowing from the plant?
Mr Davey
Assuming that we can conclude the negotiations with EDF on the funded decommissioning plan and the strike price, and assuming that one or two of the remaining regulatory approvals are granted and that construction can therefore begin later this year or early next year, EDF believes that it can start generating power by the end of this decade or early in the next decade. Of course, one should not be held to clear timetables in these matters, as we all know the dangers of overrun, but when I have discussed it with officials and EDF, I have been impressed by the amount of careful pre-planning done to ensure that the delays seen in Flamanville, in Finland and elsewhere are not repeated here.
Ms Margaret Ritchie (South Down) (SDLP)
I thank the Secretary of State for his statement. He referred to the fact that the Government are still pressing ahead with plans to identify a geological disposal facility. Taking on board the legacy going back 25 years with Nirex and the failure to find a facility—I hasten to add that I am not in favour of such a facility—can he indicate what sites are being explored? Does he agree that it is necessary to take into account the geological rock structures and framework of substrata in any such discussions?
Mr Davey
The strategy to locate a site for a geological disposal facility was set out under the last Government, and we are following their policy. Some of the issues identified by the hon. Lady would need to be considered as it is developed. We have made it clear that we are sticking to the voluntarist approach set out by the last Government. We think that it is important that a geological disposal facility is not imposed on an area but is willingly accepted.
The recent Cumbria vote was interesting. The district councils of Copeland and Allerdale voted heavily in favour, and only Cumbria county council, with councillors representing areas a significant distance from the proposed sites, vetoed it. I believe that we will be able to find a site for a geological disposal facility using the voluntarist approach.
Andrew George (St Ives) (LD)
Half my right hon. Friend’s Department’s budget is already spoken for to pay for the nuclear clean-up, and the coalition has adopted a policy of no public subsidy. I have listened to what he says about not discussing individual figures, but anything other than a free market commercial strike price for that product would surely represent public subsidy. What can he say to reassure me and the House that the settlement will not be tantamount to a public subsidy for new nuclear power?
Mr Davey
May I correct my hon. Friend? This year, 69% of my Department’s budget is being spent on decommissioning past nuclear power stations. That is why I, probably more than anyone else in the House, am determined that we do not make the mistakes of the past. Any strike price negotiated will take into account the costs of decommissioning and of waste disposal. It is absolutely critical that when we agree a deal with EDF or any future nuclear operator, it must do the clean-up and the decommissioning. That must be part of the agreement. The costs must be integrated, not left alone as they have been in the past.
Kerry McCarthy (Bristol East) (Lab)
I, too, visited Hinkley Point a year or so ago in response to concerns raised with me in Bristol, mostly about safety, which I accept is a separate process, but also about the impact on biodiversity and marine life in the area. When is the marine licence likely to be granted, and is anything specific holding it up?
Mr Davey
I am grateful for the hon. Lady’s question. When she reads the decision letter, she will notice that the panel and I have spent some time on those issues. Section 4 of the decision letter discusses the habitats regulations assessment, and section 5 considers the environmental impact assessment. She is right that a regulation approval from the Marine Management Organisation is outstanding, but she will also understand that it is an independent regulatory body. I believe and am told that its examination of the issue is well under way, but I cannot hold the MMO to a timetable.
Mr Mike Weir (Angus) (SNP)
The strike price at Hinkley Point will send an important message to other potential nuclear developers. When the chief executive of EDF appeared before the Energy Bill Committee, he said that he was anxious for transparency on the strike price. The Minister has said that he will publish the contract, but will he also publish enough information for everybody to see how that strike price was arrived at and that there was no public subsidy behind it?
Mr Davey
The hon. Gentleman is right that we will be transparent about the process, but of course some cost information will be commercial in confidence. We have never undertaken to publish every single document relating to the negotiation, but the key terms and conditions will be published.
Joan Walley (Stoke-on-Trent North) (Lab)
Given that the announcement today is about planning, what discussions has the Secretary of State had with the European Commission on whether the proposed financing will contravene state aid rules? It comes down to whether or not it is public subsidy.
Parish and Town Council Precepts (Referendums)
Kris Hopkins (Keighley) (Con)
I beg to move,
That leave be given to bring in a Bill to give effect to Schedule 5 of the Localism Act 2011; to amend section 52ZC of the Government Finance Act 1992 (inserted by that Schedule) to require parish and town councils to conduct local referendums in the event that they choose to increase their precept by 2% or more in the following financial year; and for connected purposes.
Before I came to the House, I had the great privilege of serving as a district councillor for the Worth Valley ward in Keighley. During my 13 years as a councillor, I got to know and respect many of my colleagues from across the political spectrum. I also had a good relationship with many colleagues on town and parish councils across the metropolitan district. Many individuals in the first tier of local government have given decades of public service, and I put on record my thanks for their unpaid and tireless efforts to do good in their communities with the aim of making them better places.
As Members will know, responsibility at parish and town council level is limited. Although they undertake an enormous amount of additional work, they have sole statutory responsibility only for allotments. However, with the support of district councils and other partners, parish councils have often taken on other responsibilities. One example is the excellent work undertaken by Keighley town council, which has taken over Keighley’s cenotaph and town hall square and done a tremendous job. I also cite the excellent consultation undertaken by Oxenhope and Addingham parish councils, which have done extensive, first-rate, highly competent work on planning and potential housing numbers. Finally, Silsden town council has a youth council that has been making a contribution to youth provision in the town, driven by motivated, thoughtful and determined young people doing their bit for where they live.
However, there is a “but”. While I fully support all this work and commend it to others, I question the actions of a few councils. Hawarth, Cross Roads and Stanbury council, and Keighley town council, have raised their precept in recent weeks by 60% and 73% respectively. In the case of Hawarth, Cross Roads and Stanbury council, the argument in favour of such a rise appears to be that the Secretary of State might cap such a rise next year, so it has decided to bank it this year. There are no firm spending intentions, but the council has taken the money without holding a meaningful debate with residents. I acknowledge that it has good ideas in the pipeline, which may merit future increases in the precept, but residents have been taxed for ideas, and I think that residents should pay for services.
Keighley town council has interpreted localism as an opportunity to empire-build. Bearing in mind the fact that its sole responsibility under statute is for allotments, it has taken it upon itself to purchase the old police station in Keighley and offer the town a new civic centre at a cost of £1 million, despite the fact that the town already has a town hall and a brand new community centre within 400 yards of the civic centre. Sadly, the business plan does not service the debt that has been incurred, so residents have to pay a 72.6% increase in the precept. This is a shambles, and it is of the council’s own making. Rather than sting local residents, it should look at its overheads, and address staffing levels and its transport bill, rather than impose an extra burden on hard-pressed families.
Kris Hopkins
No.
I want to touch on the false assertion that these are only small amounts of money, and are not important. My hon. Friend the Member for Harlow (Robert Halfon) has fought an effective campaign on a 1p increase on a litre of petrol. There are 2,494 pennies in the council precept in Keighley. Parish and town councils do not have an accountable body, so we have a duty to ensure that the public have a say in any rise in the precept, and a clear understanding of why that rise has been introduced. Many people are struggling, and we should make every effort, however small individually, to reduce the demands on the household purse. I urge the House to support the Bill and give a clear voice to residents who face a rise of more than 2% in their council tax.
Question put and agreed to.
Ordered,
That Kris Hopkins, Dr Thérèse Coffey, Stuart Andrew, Alec Shelbrooke, Craig Whittaker, Simon Reevell and Julian Smith present the Bill.
Kris Hopkins accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 26 April, and to be printed (Bill 151).
Jobseekers (Back to Work Schemes) Bill (Amendments, etc.)
Ordered,
That, in respect of the Jobseekers (Back to Work Schemes) Bill, notices of Amendments, new Clauses and new Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time.—(Mr Lansley.)
Jobseekers (Back to Work Schemes) Bill (Allocation of Time)
(11 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
I beg to move,
That the following provisions shall apply to the proceedings on the Jobseekers (Back to Work Schemes) Bill—
Timetable
1.–(1) Proceedings on Second Reading, in Committee, on consideration and on Third Reading shall be completed at this day’s sitting.
(2) Proceedings on Second Reading shall be brought to a conclusion (so far as not previously concluded) four hours after the commencement of proceedings on this Motion.
(3) Proceedings in Committee, on consideration and on Third Reading shall be brought to a conclusion (so far as not previously concluded) six hours after the commencement of proceedings on this Motion.
Timing of proceedings and Questions to be put
2. When the Bill has been read a second time—
(a) it shall, despite Standing Order No. 63 (Committal of Bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;
(b) the Speaker shall leave the Chair whether or not notice of an Instruction has been given.
3.–(1) On the conclusion of proceedings in Committee, the Chairman shall report the Bill to the House without putting any Question.
(2) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.
4. For the purpose of bringing any proceedings to a conclusion in accordance with paragraph 1, the Chairman or Speaker shall forthwith put the following Questions (but no others) in the same order as they would fall to be put if this Order did not apply—
(a) any Question already proposed from the Chair;
(b) any Question necessary to bring to a decision a Question so proposed;
(c) the Question on any amendment moved or Motion made by a Minister of the Crown;
(d) any other Question necessary for the disposal of the business to be concluded.
5. On a Motion so made for a new Clause or a new Schedule, the Chairman or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
6. If two or more Questions would fall to be put under paragraph 4(c) on successive amendments moved or Motions made by a Minister of the Crown, the Chairman or Speaker shall instead put a single Question in relation to those amendments or Motions.
7. If two or more Questions would fall to be put under paragraph 4(d) in relation to successive provisions of the Bill, the Chairman shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.
Consideration of Lords Amendments
8.–(1) Any Lords Amendments to the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(2) Proceedings on consideration of Lords Amendments shall be brought to a conclusion, if not previously concluded, one hour after their commencement; and any proceedings suspended under sub-paragraph (1) shall thereupon be resumed.
9.–(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 8.
(2) The Speaker shall first put forthwith any Question already proposed from the Chair.
(3) If that Question is for the amendment of a Lords Amendment the Speaker shall then put forthwith—
(a) a single Question on any further Amendments to the Lords Amendment moved by a Minister of the Crown, and
(b) the Question on any Motion made by a Minister of the Crown that this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.
(4) The Speaker shall then put forthwith—
(a) a single Question on any Amendments moved by a Minister of the Crown to a Lords Amendment, and
(b) the Question on any Motion made by a Minister of the Crown that this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.
(5) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown that this House disagrees to a Lords Amendment.
(6) The Speaker shall then put forthwith the Question that this House agrees to all the remaining Lords Amendments.
(7) As soon as the House has—
(a) agreed or disagreed to a Lords Amendment; or
(b) disposed of an Amendment relevant to a Lords Amendment which has been disagreed to, the Speaker shall put forthwith a single Question on any Amendments moved by a Minister of the Crown and relevant to the Lords Amendment.
Subsequent stages
10.–(1) Any further Message from the Lords on the Bill shall be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(2) Proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (1) shall thereupon be resumed.
11.–(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 10.
(2) The Speaker shall first put forthwith any Question which has been proposed from the Chair.
(3) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown which is related to the Question already proposed from the Chair.
(4) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown on or relevant to any of the remaining items in the Lords Message.
(5) The Speaker shall then put forthwith the Question that this House agrees with the Lords in all the remaining Lords Proposals.
Reasons Committee
12.–(1) The Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the appointment, nomination and quorum of a Committee to draw up Reasons and the appointment of its Chair.
(2) A Committee appointed to draw up Reasons shall report before the conclusion of the sitting at which it is appointed.
(3) Proceedings in the Committee shall (so far as not previously concluded) be brought to a conclusion 30 minutes after their commencement.
(4) For the purpose of bringing any proceedings to a conclusion in accordance with sub-paragraph (3), the Chair shall—
(a) first put forthwith any Question which has been proposed from the Chair but not yet decided, and
(b) then put forthwith successively Questions on motions which may be made by a Minister of the Crown for assigning a Reason for disagreeing with the Lords in any of their Amendments.
(5) The proceedings of the Committee shall be reported without any further Question being put.
Miscellaneous
13.–Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply so far as necessary for the purposes of this Order.
14.–(1) The proceedings on any Motion made by a Minister of the Crown for varying or supplementing the provisions of this Order shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.
(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to those proceedings.
15. Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.
16.–(1) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken or to recommit the Bill.
(2) The Question on any such Motion shall be put forthwith.
17.–(1) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.
(2) The Question on any such Motion shall be put forthwith.
18. The Speaker may not arrange for a debate to be held in accordance with Standing Order No. 24 (Emergency debates) on a day on which the Bill has been set down to be taken as an Order of the Day before the conclusion of any proceedings to which this Order applies.
19.–(1) This paragraph applies if the House is adjourned, or the sitting is suspended, before the conclusion of any proceedings to which this Order applies.
(2) No notice shall be required of a Motion made at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order.
20. Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.
21.–(1) Any private business which has been set down for consideration at 7.00 pm, 4.00 pm or 2.00 pm (as the case may be) on a day on which the Bill has been set down to be taken as an Order of the Day shall, instead of being considered as provided by Standing Orders, be considered at the conclusion of the proceedings on the Bill on that day.
(2) Standing Order No. 15(1) (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before the moment of interruption, for a period equal to the time elapsing between 7.00 pm, 4.00 pm or 2.00 pm (as the case may be) and the conclusion of those proceedings.
I do not wish to detain the House long, because I am sure that we want to spend as much time as possible discussing the Bill. We seek the approval of the House to consider all stages of this important Bill in a single day. The motion allows for a total of six hours of debate, with up to four hours on Second Reading, with the balance of time spent in Committee and on Third Reading. With the co-operation of the House, the Bill will ensure that the taxpayer does not have to repay previous benefit sanctions to claimants who have failed to participate in certain employment programmes, and it ensures that we can properly impose sanctions for such failures. Without this Bill, the cost to the taxpayer would be up to £130 million.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Is it not the case that test case law from 2012 refutes the argument that the Government are making in terms of the requirement for sanctioned benefits to be recouped?
Mr Hoban
The hon. Lady makes a helpful point, but the legal position is as follows. If the Supreme Court does not give us leave to appeal, the regulations will be quashed, and we would have to repay sanctions to claimants who had not participated in schemes to help them back into work. The Bill is therefore needed. Hon. Members may have received briefings from third parties saying that that was not the case, but I can assure her and others that it is.
The Department has applied for permission for leave to appeal to the Supreme Court, but there is no guarantee that that will be granted. We therefore need to expedite the Bill so that we are not in a position where we have to repay benefit sanctions to people who have neither participated nor accepted the help that we have offered them.
Mr Speaker
I take it that the Minister has concluded his remarks. He cannot be accused of doing so with a fanfare of trumpets, but we are grateful to him for moving the motion.
Stephen Timms (East Ham) (Lab)
We find ourselves in a deeply unsatisfactory situation with the Bill and, indeed, the programme motion. We do not quite know what happened between the court case and the decision that prompted the measure. My right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) and I were told about the problem a couple of weeks ago; there was a three-week gap when we did not know what was happening. The House of Lords Constitution Committee will, I believe, opine on the measure tomorrow, but equally we do not want to risk an additional £130 million cut to benefit spending over the period ahead, particularly not on a day on which it has emerged that the Government want to cut £2.5 billion from spending across Government, some of it doubtless from the budget of the Minister and his right hon. Friend the Secretary of State. Nor do we want to be in a position in which people who were sanctioned months ago—in many cases, well over a year ago—have to be refunded because of the appalling mess that the Government have got themselves into.
The way forward proposed by the Bill and the programme motion is deeply unsatisfactory, but it is less bad than the alternatives, and for that reason I shall not urge my hon. Friends to oppose it.
Mr Speaker
If no one else wishes to contribute, the debate has been pithily concluded.
Question put and agreed to.
Jobseekers (Back to Work Schemes) Bill
(11 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:57 - The House divided: - Ayes: 277 / Noes: 57 - Question accordingly agreed to.
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
I beg to move, That the Bill be now read a Second time.
I hope that I conduct this debate in a workman-like way, as I did the debate on the allocation of time motion. The Bill will ensure that following the recent Court of Appeal judgment in the case of Wilson and Reilly v. the Secretary of State for Work and Pensions, the taxpayer will not have to repay to claimants the benefits lost because of their failure to take part in mandatory back-to-work programmes. It will also enable the Government to impose benefit sanctions on those who fail to participate in a mandatory programme where a decision has been put on hold because of the Wilson and Reilly case.
Caroline Lucas (Brighton, Pavilion) (Green)
Is it not the reality that this is a multi-billion pound failed flagship scheme, which was condemned by the Public Affairs Committee as extremely poor? Having lost a case and fearing that they will lose the appeal, the Government, instead of respecting our justice system, are abusing our emergency procedures to fix the consequences of losing? Does that show not a shocking disrespect both for our courts and for the principle that workers should be paid the minimum wage?
Mr Hoban
The hon. Lady clearly has a press release that she wants to set out this afternoon. [Interruption.] From a sedentary position, she says that it is a good press release. I wish it were an accurate one. The reality is that our schemes are helping to get people back into work. It is vital that people who are looking for work are given help to get into work, and we are offering that. Up to the end of September, 200,000 people found work as a consequence of the Work programme. If she thinks that that is a failure, she is insulting the people who have got work through the Work programme. She should recognise the benefits that such schemes bring. To allow people not to take part in them is breaking a contract between us and the unemployed. We give them the support that they need to get back into work and we expect them to take up that offer of support. If they do not take up that offer, it is right that they are penalised.
Dr Julian Lewis (New Forest East) (Con)
Will the Minister tell the House how our employment rate compares with that of eurozone countries and even with that of the United States?
Mr Hoban
My hon. Friend makes a good point. The unemployment rate in the UK is below the average of the eurozone and the European Union. We are seeing one of the fastest rates of job creation in the developed world and we have record numbers of people in work, and record numbers of women in work. Our policies to help people into work are effective. On the whole, jobseekers welcome them and it is important that they continue to take advantage of the schemes that are on offer.
John McDonnell (Hayes and Harlington) (Lab)
Is it not true that the Office for National Statistics has confirmed that the Government have included in their employment figures those who are not being paid for their work?
Mr Hoban
If the hon. Gentleman looks at the detail of the Office for National Statistics labour force survey, he will see that there are people who are on schemes who say that they are in employment, but that was the case under the previous Government. I have raised that issue with the ONS, because I agree that they should not be included in the numbers who are employed, but it rejected the argument on the grounds of international consistency. We cannot ignore the fact that, excluding those schemes and any reclassification, we have seen more than 1 million net new jobs created in the private sector since May 2010. Perhaps the hon. Gentleman should congratulate us on achieving that.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Is it not the case that the employment rate now is lower than the rate—not the absolute numbers—in 2008?
Mr Hoban
The hon. Lady must recognise that we are in a very different economic climate from the one in 2008, when we saw a debt-fuelled boom that undermined the strength of the British economy. The economy is going through a healing process at the moment, and since May 2010 we have actually seen the private sector creating an extra 1 million new jobs. She should welcome that, because it has given people across the country an opportunity to get into work. We have seen the effectiveness of our welfare reforms—230,000 fewer people are claiming out-of-work benefits than they were in May 2010—and they have contributed to an increase in the numbers of people in work. People are coming into the labour market and finding jobs, and I would have thought that the hon. Lady would welcome that.
Before I go into the detail of the Bill and the background to the Court of Appeal judgment, let me outline why the Government believe that, in certain circumstances, jobseeker’s allowance claimants should be mandated to take part in employment programmes. and that when they fail to participate without good reason, they should face a benefit sanction.
First, this is a policy that is supported not only by Members from all parts of the House, but by the vast majority of the British public. According to the British social attitudes survey, 85% of the public believe that someone who is unemployed and on benefits should be required to do some unpaid work in the community while keeping their benefits. Sir Stanley Burnton, one of the Appeal Court judges in the Wilson and Reilly judgment, said:
“Parliament is entitled to authorise the creation and administration of schemes that are designed to assist the unemployed to obtain employment...it is not easy to see what objection there could be to them. Parliament is equally entitled to encourage participation in such schemes by imposing sanctions, in terms of loss of jobseekers’ allowance, on those who without good cause refuse to participate in a suitable scheme.”
Fiona Mactaggart (Slough) (Lab)
Is not the issue the fact that sanctions can work if people know the consequences of failure to action? Did not the court rule that the information that was sent to people who were sanctioned did not comply with the regulations passed by this House?
Mr Hoban
A clear message was sent that people who failed to participate in schemes could lose their benefit for up to 26 weeks. That is the maximum they could lose. What the Court of Appeal said, and what the High Court said previously, was that we should make reference to the fact that if someone had committed a first offence, as it were, we should give details of the amount of benefit they would lose the first time they did not participate in a scheme. In fact, we have changed the notices as a consequence of the High Court judgment. The notice that we sent out said that people would face a loss of up to 26 weeks benefit if they did not take part in the scheme. What the High Court wanted was details of the lower levels of sanctions that could apply in that situation.
There is a broad consensus that mandatory back-to-work schemes are a necessary part of the approach that we take to get people back to work. When a person signs on to receive jobseeker’s allowance, they accept that they have certain responsibilities. It could be called a contract between the jobseeker and the taxpayer. We will offer a huge amount of support to jobseekers, including help to search for jobs, work experience and jobseeker’s allowance. That is our part of the deal. The jobseekers’ part of the contract is to take up the help that we offer. While the vast majority of jobseekers live up to their part of the contract, there are a small minority who are reluctant to do everything they can reasonably be expected to do to get back into work.
Mr Hoban
In a moment. For that group of people, it is right that we have the power to mandate them on to different back-to-work schemes, which we think will help them improve their chances of finding work. I am sure that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) supports that sentiment.
Mr Byrne
A couple of years ago now, the Secretary of State gave an assurance to the House that individual jobcentres or jobcentre districts did not have targets for sanctioning jobseekers and that there were not any kind of league tables that ranked jobcentres or districts for sanctions. Will the Minister confirm that that is still his Department’s policy?
Mr Hoban
Absolutely. There are no league tables in place. We do not set targets for sanctions; I have made that point in previous discussions with, I think, the right hon. Member for East Ham (Stephen Timms). The decisions that need to be made are the right ones. They need to be based on whether people have breached the agreements they have set out with the jobcentre, and there are no targets in place.
Let me set out in a bit more detail the programmes that exist. The programmes might vary from a training course that the Government have paid for so that the claimant gains some essential skills that will increase their chances of finding work, or they might involve a community work placement, whereby claimants can pick up the basic disciplines, such as turning up on time, that every reasonable employer will expect.
We also know that those schemes work. Recent research on our mandatory work activity scheme found that nine in 10 participants said that they better recognised the benefits of a working routine, and around three quarters said that their confidence and ability to work as a team had improved. More than half said that they felt more positive about work than they did before attending.
Sheila Gilmore (Edinburgh East) (Lab)
Is it not the case that the research on the mandatory work schemes found that, afterwards, people were as likely to be on benefit as they were before?
Mr Hoban
The scheme is used particularly for those who are some distance from the labour market. We know that we need to make a range of interventions to get people to move closer and closer to the labour market. The scheme changes people’s attitude to work. Those on the scheme can put that work on their CV and demonstrate to employers that they are ready for work. That makes a contribution to moving them closer to work. As the evaluation that the hon. Lady referred to pointed out, people themselves feel the benefits of taking part in the scheme. It is therefore right that when claimants refuse to take up the support that is available, and then fail without good reason to attend these mandatory programmes, they face the consequences of their actions—a benefit sanction.
Mr Hoban
I want to make some more progress. We have four hours, and I am sure that the right hon. Gentleman will have time to make a contribution.
On 12 February, the Jobseeker's Allowance (Employment, Skills and Enterprise Scheme) Regulations 2011 were found to be ultra vires by the Court of Appeal on the ground that the programmes covered by the regulations were not described in the regulations in sufficient detail. Those are the regulations that provide for most of the mandatory back-to-work schemes, such as the Work programme and the day one trailblazers, which we are running at the moment.
The Court of Appeal also held that the notices sent to claimants advising them that they were required to take part in a programme within the ESE scheme did not comply with the requirements of regulation 4 of the ESE regulations. It is important to remind all Members that the Court of Appeal has ruled that there was no breach of article 4(2) of the European convention on human rights, meaning that these schemes cannot be equated with slave labour. As I have already stated, the judgment was supportive of the principle and policy of our employment schemes.
Mr Howarth
Will the Minister confirm that he intends to appoint an independent person to produce a report on this matter? The intention is that they will report within 12 months and the Secretary of State will consider that report for some unspecified period. I know that it is a complex issue, but does the Minister agree that that could be done much more quickly, and the issue could be resolved much more quickly, if that process were shortened, rather than the period being 12 months and then as long as it takes to consider the report?
Mr Hoban
I will touch on this in a bit more detail later, but we will appoint an independent reviewer to look at the way in which the sanctions regime works under the Bill and to report to Parliament; that is dealt with in new clause 1, which we will discuss later. The Secretary of State will lay the report before Parliament. The operation of the sanctions regime will be looked at within a 12-month period. If it could be looked at more quickly, that would be a good thing. That is one of the helpful products of the discussion between the two Front-Bench teams over the past couple of weeks. I hope that that gives Members reassurance on the nature of the review. I will come back later to the new clause, which will provide further reassurance.
In response to the judgment of 12 February, the Department laid new regulations, which came into force with immediate effect, so that we could continue seamlessly to mandate claimants to these vital back-to-work schemes. We have also written to everyone already taking part in the schemes to ensure their continued participation in schemes designed to help them to get back into work.
Derek Twigg (Halton) (Lab)
Could the Minister clear something up? Does he believe that the Court’s judgment is basically about a technicality, or was there a serious oversight by the Department? Many of my constituents think that there was a serious oversight.
Mr Hoban
No, there was not a serious oversight; the judgment was about a technicality. The High Court agreed that the regulations were satisfactory. It did not have a problem with the amount of detail in the regulations, whereas the Appeal Court did. I therefore believe that the judgment was about a technicality; it was about the amount of detail in the regulations. The Appeal Court thought that there should be more detail about the schemes. We felt, for reasons of efficiency and responding quickly to identify schemes that would help people to get back into work, that it was helpful to have some detail in the regulations but not as much as the Appeal Court wanted. To ensure that we could respond flexibly to the changing labour market and the changing needs of the unemployed, we designed the regulations in the way we did. We are seeking leave to appeal to the Supreme Court to continue to press that point about the amount of detail that should be in the regulations.
Mr Russell Brown (Dumfries and Galloway) (Lab)
On the very points that the Minister is making, of course it is right that those involved in the system—those seeking employment and training—should have as much information as possible. Does he recognise that the wider public need to be confident that the system—what is happening out there to find employment and training for those in need—should be robust and stand up to scrutiny, including scrutiny by the courts?
Mr Hoban
I think that the system is robust and that it does stand up to scrutiny by the courts. That is why the High Court accepted the amount of detail in the regulations. The Appeal Court disagreed with that and we are seeking leave to appeal to the Supreme Court to argue that point. It is not unusual for there to be a limited amount of detail in regulations and much more information to be supplied in guidance or notices provided not just by the DWP but by other Departments.
Mr Hoban
I have given way already to the hon. Lady. I want to make some progress.
As I have made clear, the Department fundamentally disagrees with the Appeal Court’s verdict, which is why it has applied for leave to appeal to the Supreme Court in respect of both grounds. We believe it is right that the regulations should allow for flexibility, so that we can respond rapidly to improve jobseekers' chances of finding work, such as trialling new approaches in Derbyshire and London to help young people get vital experience to bolster their CV. A more prescriptive approach—the one proposed by the Appeal Court—to the content of the regulations would create inflexibilities that would ultimately hinder the jobseeker's chance of finding work.
Those are the arguments that we will make before the Supreme Court, if we are granted permission. Those arguments will not be affected by the Bill. We are hopeful that we will obtain permission and that we will win our appeal. There is, however, no guarantee that we will be granted permission to appeal, or that we would win the appeal. Were that to happen, claimants who have been subject to a sanction for failing to take part in the schemes would be entitled to a refund of that sanction. It would also mean that we had no power to impose sanctions in relation to failures under the ESE regulations, in cases where no sanction decision has yet been taken—the so-called stockpiled cases. If that were to happen, the cost to the taxpayer would be up to £130 million.
It is vital that, in the present economic climate, the public purse be protected from such claims. The Bill will ensure that the taxpayer does not have to repay benefits lost by claimants who have failed to participate in employment programmes, and can properly impose sanctions for such failures. It would be unacceptable for claimants who have failed to take all reasonable steps to increase their chances of finding work to receive an undeserved windfall payment. The Bill will prevent that by providing that any decision to reduce jobseeker's allowance under the ESE regulations cannot be challenged on the grounds that the ESE regulations were invalid or the notices given under them inadequate. It makes similar provision in relation to the mandatory work activity regulations in respect of notices given under those regulations.
Paul Goggins (Wythenshawe and Sale East) (Lab)
Following on from the intervention by my hon. Friend the Member for Halton (Derek Twigg), who pressed the Minister on whether the judgment was about a technicality or not, may I draw the Minister’s attention to the comments of Lord Justice Pill? He said:
“Claimants must be made aware of their obligations and of the circumstances in which, and the manner in which, sanctions will be applied.”
I do not think that he regarded it as a technicality, but if it is, next time the Department makes a mess, will the Minister come and seek a further retrospective Bill, in the way he has done today?
Mr Hoban
The High Court upheld the steps that we took in setting out the detail in the regulations. As I said earlier, the letter that we sent to claimants who were required to participate in the schemes set out the fact that they could be subject to sanctions of up to 26 weeks’ worth of benefits. That is not the only communication we have with jobseekers. The jobseekers who come into Jobcentre Plus will have discussed the requirements with their personal adviser, so there is a range of ways in which we will communicate to jobseekers their obligations under the schemes. That is vital. It is important that people are aware of those obligations. We believe that the notices and regulations provide sufficient detail, and that will be backed up by the conversations and other communication that jobseekers have with personal advisers.
Mr Hoban
I want to make some more progress.
The Bill will ensure that the Government will not have to refund sanctions on the basis of the Court of Appeal’s judgment and will be able to make a decision in cases where no sanction decision has yet been made.
As I have previously stated, the Government have applied for leave to appeal to the Supreme Court. However, to ensure that we are not faced with having to repay benefit sanctions, we have had to press ahead with this fast-track legislation.
I would like to put it on record that I am grateful for the constructive way in which the right hon. Members for Birmingham, Hodge Hill and for East Ham have approached this topic. In supporting the Bill, they have allowed us to expedite its progress, thus safeguarding taxpayers’ money.
Following discussions last week with the shadow Secretary of State, the right hon. Member for Birmingham, Hodge Hill, we will be proposing two Government amendments in Committee. The first will reiterate in the Bill that a claimant’s appeal rights against a sanction decision remain unchanged in all matters, apart from those covered by the High Court and Court of Appeal judgments. For example, when a claimant felt that they had good cause for not participating in one of these schemes, they would still be able to appeal to the first tier tribunal on the basis of good cause. That is a helpful reconfirmation of the right of claimants to appeal. Similarly, the Bill will not overturn appeals that have succeeded on the basis of good cause. I hope that our amendment on that provides the clarification that the right hon. Gentleman seeks.
Mr Byrne
Will the Minister now confirm that the grounds of good cause in respect of appeals will remain undisturbed and will include the grounds covered in DWP guidance, which says that good cause can include an unsuitable course, full-time study, health and caring reasons, travel time that is inappropriately long, religious belief, bereavement, attending court and other emergencies? Will he also confirm that, ultimately, the timetable for lodging appeals will remain at 13 months?
Mr Hoban
We have been very clear in this amendment. We are confirming the right to appeal, and appeals can proceed on the grounds that are usually available in these situations, which the right hon. Gentleman has listed. The Bill does not change people’s right to appeal, save for appeals based on High Court or Supreme Court judgments.
The second Government amendment that we will bring forward in Committee will require the Secretary of State to appoint an independent person to carry out a review of the operation of the sanctions validated by this legislation during the first 12 months after Royal Assent. That review will report as soon as possible after the 12-month period, and the report will be laid before Parliament. I hope that these assurances are satisfactory.
To conclude, this Bill is necessary to ensure that the taxpayer does not have to repay up to £130 million in benefits lost through the failure of claimants to take up the Government’s offer of support. It is vital that scarce public resources are targeted at those who need and deserve them most. It would be unacceptable for claimants who have failed to take all reasonable steps to increase their chances of finding work to obtain an undeserved windfall payment. This Bill will prevent that, and I commend it to the House.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
This is a very dark day for the once-proud DWP, and it beggars belief that this once-proud Department has found itself in this position under the Secretary of State’s leadership. The organisation of back-to-work schemes is now in a state of total chaos. Once upon a time, back in 2010, the Secretary of State boasted that the Work programme would be the
“most comprehensive, integrated work programme in existence, certainly, since the war”.—[Official Report, 22 November 2010; Vol. 519, c. 17.]
What do we have instead? We have a Work programme that is literally worse than doing nothing. Just 2.3% of people referred on to the programme have found sustained jobs. As has been said, the Public Accounts Committee stated—
Mr Byrne
The hon. Lady will want to reflect on this. The Public Accounts Committee said this about the Work programme:
“Actual performance was even below the Department’s assessment of the non-intervention rate—the number of people that would have found sustained work had the Work programme not been running.”
Maybe the hon. Lady can tell me whether she is proud of that.
Jane Ellison
I am grateful to the right hon. Gentleman for giving way, but I was going to tell him that this morning the Work and Pensions Committee was at Willesden Jobcentre Plus. I asked the staff running the programme there, helping people get back to work, how they felt about their efforts being described as worse than nothing. They said it was deeply demoralising and incredibly insulting to their efforts on behalf of the unemployed.
Mr Byrne
The truth is that jobcentre staff have so little confidence in the Work programme that they are not referring people to Work programme contactors at anywhere near the rate the Department has estimated. That is the reality of how jobcentre staff feel.
We have had universal credit now beginning its descent into universal chaos, and now we have the news that the regulations designed to encourage jobseekers to take work were so badly drafted that the Court of Appeal struck them down and the Department may as a result be on the hook to repay £130 million in sanctions. The judges could not have been more unequivocal. Here is what they had to say:
“The 2011 Regulations must be quashed.”
I therefore put it to the Secretary of State that this is a day of shame for his Department. The House of Commons Library cannot find an instance of DWP legislation being struck down in this fashion since 1996, under the last Conservative Government. If the Secretary of State had delusions of adequacy, they have been swept away by today’s proposed legislation.
Pete Wishart (Perth and North Perthshire) (SNP)
Will the right hon. Gentleman therefore explain to claimants, trade unions and everybody who has looked at this Bill why the Labour party will be abstaining today? If this Work programme is no better than no work programme at all, why on earth is the Labour party sitting on its hands?
Mr Byrne
I will address that point directly, as the answer is very simple: because this Bill restores the general legal power of the DWP to issue sanctions. It is a broad sui generis power that has been in place since 1911. I will be interested to hear later the hon. Gentleman’s argument on why he thinks the power to issue sanctions, which has been in place since 1911, should now be struck down for the period in question.
The worst aspect of all this is that the Secretary of State was warned that he was heading for a failure not simply in this House, not simply by commentators opposed to his plans, and not simply by people who had a profound disagreement with him, but by the very specialist Committee he set up to advise him on these questions. This is what the Social Security Advisory Committee said about the 2011 regulations:
“SSAC ask why the Department did not opt to narrow the scope of the original regulations”,
Indeed, it was, of course, their broad and unspecified content that the Court of Appeal objected to.
Mr Russell Brown
I want to take my right hon. Friend back to the recent intervention of the hon. Member for Perth and North Perthshire (Pete Wishart), from the Scottish National party Benches. Has my right hon. Friend picked up from those comments that the SNP is totally opposed to sanctions of any kind?
Mr Byrne
My hon. Friend is absolutely right. I am afraid that no other conclusion can be drawn from that intervention.
The Secretary of State said to us in the House a couple of weeks ago:
“That advice came to us; it was checked and it said that the regulations were fine.”—[Official Report, 11 March 2013; Vol. 560, c. 19.]
Well, either the lawyers are bad or the Secretary of State made the wrong judgment. The only conclusion that can be drawn is that there are a huge number of questions that the Secretary of State must now answer.
If this were the only recent example of such incompetence by a Government Department, we might look on it more sympathetically, but all of us clearly remember the west coast main line debacle that cost taxpayers so much money and all of us remember that the Department for Transport responded by appointing an independent reviewer to get to the bottom of exactly what went wrong and how so much public money was put at risk. That is the response we must see now from the DWP. There must be an independent inquiry into how the Department got this so badly wrong.
Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)
May I bring the right hon. Gentleman back to the Bill? Does he agree with its impact assessment, which states that a retrospective transfer of £130 million of
“public money to this group of claimants would represent poor value to the taxpayer and will not help those unemployed enter employment”?
Surely, in the current climate he should welcome the swift action taken by the Government. Listening to his interventions and his speech, I am not sure that he or Labour are ready to be custodians of this country’s public finances.
Mr Byrne
Right—so a Member of a Government who have just put at risk £130 million of public money says that we would not be safe custodians of public money.
The Secretary of State was given the judgment by the Court of Appeal on 12 February. Weeks later, there was the request for urgent legislation, please. That is highly unsatisfactory. Tests for retrospective legislation have been repeatedly set out in this House and the other place. Tomorrow, the Lords’ Constitution Committee will opine on this Bill. I suspect it will have harsh things to say about its rushed nature which, because it is retrospective and set to a fast timetable, represents the worst of all worlds.
The Secretary of State will be aware, like me, of the principles set down by the Constitution Committee in its 15th report, where it opines on fast-track legislation. There is a need to maintain clear, transparent parliamentary scrutiny, and to maintain “good law”. The right of interested parties to put forward views must be observed. There is a need to ensure that legislation is a proportionate, justified and appropriate response, and is set out so that fundamental constitutional rights are not jeopardised. Crucially, the policy-making process within Government should be transparent. I look forward to hearing how any one of those principles is honoured by the process before us. The test is all the sharper, in that the Secretary of State is in this pickle because he rushed the legislation, against the recommendation of his advisers.
The test for fast-tracked retrospective legislation is the toughest of all. It was a principle the Lords set down in their report on criminal evidence legislation in 2008, which said:
“Legislation to make lawful an action that was done without legal authority…needs to be scrutinised carefully.”
My concern is that this timetable does not deliver that.
At the heart of this debate is the question whether the programmes the Government have in place, which rest on the power the Secretary of State is seeking from us, are in any way effective.
Caroline Lucas
Does the right hon. Gentleman not recognise that many people in this country will be shocked to learn that the official Opposition want to vote for this Bill precisely because they want to impose sanctions on people on workfare? Let me give him the example of a 58-year-old constituent of mine who has been unemployed for seven months. She was told that she had to travel miles to work in a Scope charity shop in Worthing or lose benefits. She could not afford to get to Worthing, so she offered to work in the Scope shop in Brighton, but the jobcentre would not allow it. Should she be sanctioned?
Mr Byrne
The hon. Lady raises an extremely important point, and that is why we have sought to ensure that the Bill includes our safeguards, which preserve the right to appeal with good cause, and the 13-month appeal window during which people can lodge objections to the sanctions regime. To answer the hon. Lady directly, I do believe that the DWP should be equipped with the power to issue sanctions. That general foundation has been in the hands of Ministers for more than a century. The new deal programmes and the future jobs fund that Labour put in place had sanctions attached to them—indeed, they were tightened by the Welfare Reform Act 2009—and I do not believe that those powers should be empty ones. However, nor do I believe they should be in the ether—in the hands of Ministers who have no obligation to put in place genuine back-to-work programmes that are better than doing nothing, unlike today’s Work programme.
Derek Twigg
Is there not evidence in our constituencies of people being taken off benefits for no good reason? For example, a constituent who was attending the funeral of a close relative had her benefits stopped. People with mental health issues, particularly young men, are kicked off benefit for no good reason.
Mr Byrne
My hon. Friend is absolutely right to flag that up. He will know that the DWP’s own guidance says that “good cause” for appealing against a sanction decision includes bereavement where the claimant was arranging or attending a funeral of a close relative or friend. That is why it is vital that we seek to protect these appeal rights in the Bill.
The ultimate test of whether a back-to-work programme is working is perhaps the one the Secretary of State set out when he spoke in Easterhouse all those years ago. He said that
“we need a jobs revolution. Every working-age adult capable of earning a decent living for themselves and their dependants must be helped to have the opportunity to do so”.
Since he took office, unemployment has increased in three quarters of the estates with the worst unemployment levels in Britain. It has not got better; it has got worse.
Nick de Bois (Enfield North) (Con)
More than half the first cohort on the Work programme are in work. Why does the right hon. Gentleman describe that as a failure?
Mr Byrne
The hon. Gentleman would do well to pay attention to the DWP’s own statistics and to the judgment of the Public Accounts Committee. They are categorical; they do not hem and haw or hedge their words; they make it clear that the Work programme today is worse than doing nothing. On the estates where unemployment is worst, the situation has got worse, not better since the Secretary of State took office. By any measure, that must be a failure.
That is why we say there has to be a different macro-economic policy. Unemployment is high because there are not enough jobs to go round. My constituency has the highest youth unemployment of any constituency in the country. There are 30 people chasing every single job. There are not enough jobs to go round, and we need a different plan for growth and jobs—an argument that my right hon. Friend the shadow Chancellor has set out with some power. We also need a different plan at the DWP. It is now Labour authorities and the Labour party nationally that are setting out the way forward for this Government. We have said that it would be wise to put a tax on bankers’ bonuses because we know we could use that money to get more than 100,000 young people back into work quickly. That is decisive action, which we hope to see from the Chancellor tomorrow. If anybody rejects an offer of a real job with real wages and real training, sure, perhaps they should face sanctions. But let us be clear: young people today deserve a real choice of a real job with real wages, but that is being denied them by this Government.
Mr Byrne
That is cold comfort to a constituency with the highest youth unemployment in Britain. Does the hon. Gentleman know what people at my local jobcentre say when I visit it? Can he guess? They say, “I wish this Government would bring back the future jobs fund because it was the best programme we ever ran.” What a shame his party cancelled it, and that is why we propose its restoration.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Will the right hon. Gentleman give way?
Mr Byrne
I will in a moment, if the Secretary of State will allow me.
When we look around the country, we now see Labour councils leading the charge to get young people back into work. In Sheffield, they are looking at how to intervene better in schools to help prevent young people from becoming unemployed. In Wakefield, they are bringing together colleges and businesses in a new way to get people back to work. In Leeds, there are new programmes to help get young people back into work. In Manchester, there is now a UCAS-style clearing house to get people back into apprenticeships. In Bradford, there are now industrial centres of excellence that bring the council, colleges and young people together. In Glasgow, the Labour council is guaranteeing a job for any young person out of work for too long. In Wales, they are making the same kind of commitment. In Birmingham, the Labour council—my own authority—has brought together a coalition of the willing to make progress on youth unemployment. In Liverpool, there is now an apprenticeship training agency, set up by the council and a local college. In Sandwell, Newham and Cardiff, Labour councils, local colleges and business communities have set up job brokerages. That is the kind of decisive action the Secretary of State can learn from. Perhaps he will give a commitment to go and look at what I have seen first hand and incorporate it into his policy.
Mr Duncan Smith
I am grateful to the right hon. Gentleman for giving way. Youth unemployment is lower than when the previous Government left office and there are more people in work than ever before. He is extolling the virtues of our localisation agenda, and I congratulate him on that.
I want to ask the right hon. Gentleman about a simple point. He has laid out for the hon. Member for Perth and North Perthshire (Pete Wishart) and others why his party will, by and large, not vote against the Bill. In doing so, he has said constantly how much he opposes emergency legislation and how terrible it is. Will he confirm that under Labour, there were 12 cases of emergency legislation being brought through this House in a hurry? Is he not crying crocodile tears on that point?
Mr Byrne
No. The Secretary of State should set out the detailed individual circumstances of every piece of legislation that he has referred to. He knows as well as I do what underpinned them. The point, as well he knows, is that he is making retrospective, fast-track legislation that touches on rights of appeal and property rights, all because of the mistake that he and his Ministers made in 2011 in bodging the regulations so badly that the Court of Appeal has struck them down.
To conclude, the assurances that we have heard from the Minister this afternoon are extremely important. The safeguards for appeal rights that have been set out are vital to ensure that people who are hit by sanctions have a wide-ranging set of good causes that can trigger an appeal.
Mr Byrne
In a moment.
First, ensuring that the appeal window of 13 months is preserved is crucial for people who are hit by sanctions. Secondly, as has been referred to by my hon. Friends, it is vital that there is an independent review of the sanctions regime. My right hon. Friend the Member for East Ham (Stephen Timms) will set out the questions that we believe need to be answered.
I have heard the Minister’s assurances this afternoon that there is no series of targets and that there are no league tables. We will hear further evidence on that point over the course of the debates in this House. I hope that the assurances that we have heard this afternoon withstand those tests.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Is it not the case that it is not only the low-paid, but the non-paid that Labour are not backing? By sitting on their hands, Labour Members are helping the Government to ensure that the people who are already being affected by the bedroom tax get no further support. It is worse than two bald men fighting over a comb.
Mr Byrne
It was the Labour party that opposed the bedroom tax when the Welfare Reform Bill went through this House, it is the Labour party that has consistently voted in opposition to the bedroom tax, and it is the Labour party that has forced the concessions out of the Government to protect foster parents and armed forces families.
In conclusion, it beggars belief that the Secretary of State has had to come before the House to fast-track retrospective legislation to fix a problem that he created when he got things wrong all those months and years ago. That is why it is so important that there is an independent Laidlaw-style review to get to the bottom of what went wrong. We need answers on how the Secretary of State has landed himself in this position. We need those answers to come before this House so that we can come to a judgment about whether he is still fit to be Secretary of State for Work and Pensions.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I would like to put on the record once again my belief that anyone who can work should work. For that to happen, we first need to have good quality jobs. As I suggested in my intervention, the percentage of such jobs that are available is getting worse, not better.
Mr MacNeil
The hon. Lady says that those who can work should work. Does she agree that they should be paid for that work, and that they deserve the support of MPs to be paid for their work?
Debbie Abrahams
I was about to make the point that schemes such as work experience, when they are co-determined, can be valuable tools in enabling people who are yet to find a permanent, full-time job to find one.
The Bill is a new low for the Government. It is the result of an abuse of power and incompetence, mixed with an ideological drive to run down our welfare state. I, for one, do not support it.
The recent court ruling that the Bill seeks to overturn quashed the 2011 jobseeker’s regulations, which failed to describe the specifics of the employment schemes and the requirements to participate in those schemes, including the time that must be spent on them. The Secretary of State had empowered himself to make regulations, but the form that he had chosen was judged to be unlawful. The regulations did little more than name the scheme.
The second part of the judgment related to the sanctions that were applied to claimants. DWP letters failed to explain what they were required to do. The ruling stated:
“the answer to my mind is plainly that there could be no question of sanctions being validly imposed if no proper notice of the sanction consequences was given.”
Again, I support the principle of a sanctions regime. If somebody consistently fails to turn up for work experience or a Work programme scheme, sanctions should be applied. However, I believe that sanctions are being applied indiscriminately. For example, one of my constituents was a beneficiary of employment and support allowance after they had retired on grounds of ill health as a result of a heart problem. He was required to attend a work capability assessment with Atos. During the assessment, he was told that he was having a heart attack and the nurse said that she had to stop the assessment. He got a letter a couple of weeks later saying that he had withdrawn from the assessment and, as such, was being sanctioned. That beggars belief. I have other examples, as I am sure do colleagues.
I welcome the opportunity for a review of the sanctions regime, which my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) has proposed, and the provisions on the appeals process. As he suggested, there is an indiscriminate approach to sanctioning. I was contacted by a Jobcentre Plus employee who was concerned that he was being forced to sanction people inappropriately. I hope that more whistleblowers will come forward during the review to describe the issues with the schemes.
The Government say that the Bill is needed so that they do not have to pay back the sanctioned benefits. That is absolute nonsense, as was suggested earlier. There is test case law from 2012 that disputes that argument.
Not only are the Government trying to push through retrospective legislation that undermines the judiciary and the rule of law, with all the appalling implications that that has; I believe that the Bill is part of the divide-and-rule narrative that underpins the Government’s ideology. They are again pointing the finger at the undeserving poor. They are emaciating our hard-fought-for welfare system on the convenient back of austerity. I believe in our country and our people. I believe that in good times and bad the welfare system is there to protect them. There will always be a few who abuse that system and we need to have measures in place to prevent that. However, the Bill goes beyond the pale and I, for one, will fight this emaciation of our welfare system.
Ian Lavery (Wansbeck) (Lab)
In the Reilly and Wilson v. Secretary of State for Work and Pensions court case on 12 February 2013, the applicants challenged the Jobseeker’s Allowance (Employment, Skills and Enterprise Scheme) Regulations 2011 on four grounds. The first was that the scheme named in the 2011 regulations was beyond the powers of section 17A of the Jobseekers Act 1995. In other words, the regulations did not comply with the requirements of the Act. Secondly, the regulations could not be enforced in the absence of a published policy. Thirdly, notices to individuals mandated to take part in such schemes were inadequate. The fourth part, which was set aside, was the suggestion that the regulations conflict with article 4(2) of the European convention on human rights, which provides, subject to exceptions, that
“no one shall be required to perform forced or compulsory labour.”
Many organisations totally oppose this Bill for a wide and varied range of reasons, and it is unfair to claimants to legalise retroactively penalties that the Court has judged unlawful. Contrary to Government claims, it is not obvious that the DWP would have to repay sanctioned benefits to all claimants, so the stated £130 million potential loss is inaccurate. The Government already have anti-test case law rules that would prevent them from having to repay anything for sanctions served prior to 6 August 2012, and more information on that point would be extremely helpful when the Minister responds to the debate.
It is of constitutional concern if the DWP undermines the judiciary and the rule of law by using retroactive legislation to avoid accountability for its own errors, and to negate any further appeal judgment by the Supreme Court that upholds the Court of Appeal judgment. Legal representatives who were in court for the Reilly and Wilson case stated categorically their belief that:
“The emergency Bill is a repugnant attempt by the Secretary of State for Work and Pensions to avoid his legal obligation to repay the thousands of jobseekers who…have been unlawfully and unfairly stripped of their subsistence benefits…The use of retrospective legislation, which is being fast-tracked through Parliament, smacks of desperation.”
I believe that is polite in the extreme. They went on:
“It undermines the rule of law and means that Iain Duncan Smith is once again seeking to avoid proper parliamentary scrutiny of his actions…It is time for his Department to admit that maladministration and injustice costs.”
Other civil liberty groups and human rights campaigners have today explained to the press—it has just been released on the BBC—that they believe this type of retrospective legislation is a typical component of oppressive regimes. They could not have put it any stronger than that. The measure has been described by some organisations as “almost unbelievably disgusting”, and they said that the DWP
“broke the law, now they want to retroactively change the law so that they didn’t break the law in order to keep £130m out of the pockets of some of the poorest people in the country…The High Court found workfare unlawful precisely because people had no way of knowing the rules that applied. It shows an incredible level of arrogance and disregard for the poorest to now attempt to backdate laws to challenge this ruling.”
It has been correctly argued that the Bill would set a dangerous legal precedent if passed, and send a message that when citizens defeat the Government in court, the Government can overturn the Court ruling retrospectively with primary legislation—effectively making the Government, and the DWP, above the law. Who is in charge?
If this Bill is enacted, it is not clear what would happen in the cases of those who have successfully appealed against decisions to impose sanctions. It appears that there have already been successful appeals against sanction decisions at first-tier tribunals, following the Court of Appeal judgment. The Government’s argument is that the Bill will protect taxpayers by saving them a bill of £130 million. May I dare to suggest that that is denying those claimants their legal entitlement? Taxpayers will be better served if back-to-work schemes are properly scrutinised to ensure efficacy and that taxpayers are receiving value for money. That is a separate argument and has been stated well from both sides of the House this afternoon.
We can see from the poor performance of the Work programme so far, with only 3.5% of people referred to the programme finding a long-term job, that people are more likely to get a job without that scheme than with it. Is there a £130 million liability that would have to be repaid? The Government argue that legislation is necessary to protect the public purse from having to repay £130 million of sanctions that have been imposed. As I said earlier, however, significant anti-test case provisions already within the social security system mean it is highly unlikely that the Government would be required to repay all the sanctions. Section 27 of the Social Security Act 1998 allows the DWP not to change decisions that were only shown to be wrong by a decision of a court. It means that the DWP could probably resist repayment in all cases where the sanction was imposed and served before the High Court decision of 6 August 2012, as well as decisions after that date where no appeal is sought.
When researching for my contribution to this debate I looked at the explanatory notes and the impact assessment published with the Bill, and a number of issues really stuck out. Paragraph 9 states:
“The Bill has been introduced to avoid the need to repay claimants who have been sanctioned for failure to comply with requirements under the ESE Regulations and to be able to impose sanctions where decisions have been put on hold since the decision of the High Court or Court of Appeal. If this were to happen, the cost to the taxpayer is estimated to be up to £130 million.”
The Bill is being introduced to save the taxpayer up to £130 million, yet it deprives the most vulnerable people who have been on workfare and are looking to better themselves in employment. It has been introduced to deny £130 million compensation to 300,000 people who would like decent employment with decent wages, terms and conditions. The Government have introduced emergency legislation to prevent those people from getting only what the Court of Appeal says they deserve. That is an absolute outrage.
The explanatory notes state:
“The effect of the Bill will be that any decision to sanction a claimant for failures to comply with the ESE Regulations cannot be challenged on the grounds that the ESE Regulations were invalid or the notices given under them inadequate, notwithstanding the Court of Appeal’s judgment. This is to ensure that the Government is not faced with the situation whereby jobseekers previously sanctioned (or to be sanctioned) for non-compliance under the ESE Regulations can receive an unfair advantage over compliant claimants.”
Again, that is an outrageous statement. The notes continue:
“The Bill also addresses the risk that previous notifications to claimants made under the MWA Regulations—”
mandatory work activity regulations—
“which contain the same notification provisions as the ESE Regulations, may also be open to challenge on the basis of the Court of Appeal’s judgement.”
The explanatory notes state:
“The impact upon individuals is that JSA claimants who have not complied with requirements under the ESE Regulations will not be repaid sanctioned benefits as they might expect following the judgment or may have a sanction imposed. The Bill effectively restores the status quo to a situation before the High Court and Court of Appeal judgments. Once the Bill is enacted, claimants who might have appealed against previous sanction decisions on the grounds upheld by the Judicial Review will be unable to do so. Sanctions imposed under the…legislation can continue and sanctions decisions currently stayed can be made in accordance with the original intent of the legislation. This is to ensure that the Government is not faced with the situation whereby jobseekers who failed to comply with their requirements and were sanctioned under the quashed ESE Regulations can receive an advantage over claimants who have complied with their requirements and is necessary to safeguard the economic interests of the state.”
I wonder whether denying ordinary and mainly poor people what they have been granted in a Court of Appeal hearing is in the best interests of the country and the economy.
Ian Lavery
I am certain that the 300,000 people the Court says have a claim because of the illegal actions of the Minister’s Department should receive it—there is no doubt about it. The Bill is being introduced by the DWP and the Government to deprive many hard-working people, and many people who want to be hard-working, of any finance whatever. Is that in the best interests of the economy? It is an absolute disgrace. Those people will spend money in the economy. They might get £50, £100 or £72 a week, but they will spend it, because it is the only money they have. The Minister should not seek to deprive those people and leave them with no finances whatever.
Ian Lavery
I have not disagreed with anyone up until now other than the Government, because they wish to deny ordinary, hard-working people—people who wish to get on in life—what the Court of Appeal says they should have.
Dr Julian Lewis
I am grateful to the hon. Gentleman for giving way and am sincerely impressed with the passion with which he makes his case. However, if I were in his shoes, I would be determined to vote against the Bill. Perhaps I have misunderstood something. My understanding is that Opposition Front Benchers are proposing not to vote against the Bill. If so, why not?
Ian Lavery
I am not sure whether the hon. Gentleman has misunderstood the situation, but perhaps when the vote takes place, he will be much better informed.
The Bill turns my stomach. The impact assessment states:
“A retrospective transfer of public money to this group of claimants would represent poor value to the taxpayer”.
What a disgrace to say such a thing in Government documents with reference to the people I have mentioned 10, 15 or 20 times previously. That will not give them self-esteem. They are doing their very best.
Justin Tomlinson (North Swindon) (Con)
Jobless households trebled under Labour and increasingly became the norm for the next generation. Surely we owe it to those children to assist their parents to get their first foot in the door of a job. Specifically, I recently spoke to one parent who said that her children were full of pride when she got an opportunity. Why deny that to others?
Ian Lavery
Members of Parliament discuss with constituents, and often people away from the constituency, the merits and otherwise of policies. I often meet people with a very different view from the people the hon. Gentleman has met. That is not to say that that has not been said, but the people I meet want decent jobs. They want the opportunity to get up in the morning and go to work for a decent wage. They would accept the minimum wage even though, at this point in time, it is not high enough. Where I live, 25 people are after every single job in the jobcentre. That means that 24 are not getting employment for every single opportunity. People want to work for the best intentions and the right reasons. They want self-esteem and finances. People where I live want to work—I am sure that extends throughout the country.
Saying that paying claimants the money that the Court says they should be paid—the result of the ruling means that the £130 million can be paid—does not represent good value for the taxpayer is an absolute disgrace. It is not the type of language we would expect from any Government. It is not right to talk about people as, “This group of claimants.” They are ordinary people with feelings, and many of them want to get on in life.
Ian Lavery
People have received sanctions for a range of reasons. The Government should not overrule a Court of Appeal ruling and introduce retrospective legislation against people just because they have received sanctions. I am sure the Minister is not suggesting that people who have, for whatever reason, received a sanction, should under no circumstances claim some sort of subsistence, even if the courts have agreed in a ruling that they should receive it.
Mr Jim Cunningham (Coventry South) (Lab)
I do not know whether my hon. Friend has come across such cases, but I have come across a number of people who have gone for a number of jobs, and been told, when they go back to claim JSA, that they are not trying hard enough. What an attitude in the 21st century!
Ian Lavery
I fully understand my hon. Friend’s point. As I have said to the hon. Member for North Swindon (Justin Tomlinson), every MP has received many representations with regard to the wide and various workfare schemes.
The impact assessment states:
“If the Department cannot make these retrospective changes, then further reductions in benefits might be required in order to find the money to repay the sanctions.”
That is blackmail of the highest order—I make no apology for the strength of my feeling on that. If people are due finances, they should get them, particularly following a court ruling, but the Government are saying, “If we pay these people, we might have to cut benefits for other people as a result because that is where we have to find the money.” That is emotional blackmail. It is totally and utterly bang out of order. They are trying to set people who are looking for work and on benefits against each other. That is absolutely unacceptable.
To conclude, I have some questions for the Minister to answer in his winding-up speech. Is it right that claimants face financial penalties for failing to participate in schemes when the possibility of those penalties had not been properly explained to them? Is it right that the Government can flout the will of Parliament, which had clearly expressed its wish to have some oversight of the schemes, especially given that the schemes that were designed and imposed on claimants without an opportunity for parliamentary scrutiny do not appear to be working?
Is it true that the DWP continued to issue letters to claimants that did not explain things properly even after the High Court had stated that the letters were inadequate?
Ian Lavery
From a sedentary position, the Minister says that that is not true, but I hope he will clarify that.
Ian Lavery
That is debatable.
Finally, what is the Department’s understanding on whether section 27 of the 1998 Act protects people from having to repay some of these sanctions? Some 300,000 people will be denied their legal rights if the Bill is passed. This is just another ideological attack on the unemployed and the less well-off, despite a High Court judgment. Why does the Minister not just accept the court of law? Give these people what they are entitled to. It is the Minister’s mess. Why should they suffer?
Mr Russell Brown (Dumfries and Galloway) (Lab)
It is an honour and pleasure to follow my hon. Friend the Member for Wansbeck (Ian Lavery). My contribution might pale into insignificance compared with his comments of the past 20 minutes or so. He has probably saved me some time, because he has obviously taken to heart what the Child Poverty Action Group has been telling us all about the inequity of workfare schemes in the past couple of years. However, my starting point will be some 15 or 16 years ago.
I want to compliment Department for Work and Pensions staff. We sometimes forget the job of work that people do in their day-to-day life, and how difficult it can be. I only have to look back to when I came into this place in 1997. At that time, DWP staff were doing excellent work and were up for the challenge, keeping in mind that unemployment levels were excessively high when we came into government. They took on board the task of delivering for the then Labour Government the whole concept of new deal: new deal for long-term unemployed, new deal for young people, new deal for lone parents and new deal for disabled people. It made a vast difference to the lives not only of individuals, but of families and communities the length and breadth of the country.
It is therefore disappointing when things go wrong and DWP staff get castigated—it is grossly unfair. In recent weeks, I have held a couple of welfare reform summits, with some 30 or 40 different organisations attending. A member of DWP staff attended, explaining fully the changes that are about to hit many families across the country. As I said to people at the meetings, “Do not shoot the messenger.” The member of DWP staff explained what would be happening. The fault does not lie at the door of DWP staff; it lies at the door of the Department and the Ministers who are pushing the policies that everyone is faced with on a day-to-day basis.
One worrying aspect of the Bill is that this is emergency legislation. The point has been made about the number of times the previous Labour Government pushed through emergency legislation, but my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) knows full well what that emergency legislation was about. I have to tell the House that it was not in the realm of what we are seeing today. The retrospective element of the Bill is galling. My right hon. Friend knows that yesterday I had certain difficulties with the Bill. I still do—I have to be honest with the House. However, I recognise that he has worked hard to secure concessions from the Government to make the pill just that little bit less bitter than it would have been had he not made any such attempt.
The element of sanction is important. There are sanctions in all walks of life. We live in the real world, not the ideal world. If we lived in the ideal world, we would not have to have sanctions at any time, anywhere. The fact of the matter is that not everyone co-operates and not everyone plays by the rules, and so there are times when people have to be taken to one side and told where they are going wrong. However, that is no excuse for what has gone wrong here. Lord Justice Pill stated:
“Claimants must be made aware of their obligations and of the circumstances in which, and the manner in which, sanctions will be applied.”
I am not saying that that has not happened in every case. I am sure there are cases where staff have made it abundantly clear to claimants exactly where they stand. However, when we talk about the best part of 300,000 people, I have some anxiety about how many did not know.
Steve McCabe (Birmingham, Selly Oak) (Lab)
In the case of one of my constituents, it took three months to determine whether he should be sanctioned, as it was not clear whether the responsibility rested with the manager of the placement or the jobcentre. At one stage I wrote to the Minister, and I cannot say that his letter made the matter any clearer. In that case, is it right that the sanction is maintained against my constituent? It is perfectly obvious that not only did he not know the conditions relating to the sanction, but neither did the manager of the placement nor the staff at the jobcentre. Surely the Minister is simply covering up an error, if he is allowed to do that.
Mr Brown
I thank my hon. Friend for that intervention. It is abundantly clear that the system is not robust. I made the point earlier that it is not only those who are out there actively seeking work or training who need to know the rules of the game. Every one of us in this House needs to know the rules, and the wider public need to know what is going on out there in their communities. When they see in their local press half a dozen vacancies and potentially 40, 50, 60 or maybe even 100 people applying for jobs, they need to know that systems are robust. They depend on good government to ensure that the legislation is correct.
Alison McGovern (Wirral South) (Lab)
Does my hon. Friend agree that what this tells us is that we need root and branch reform of how DWP communicates with the public? It is bitter when constituents of mine go to the jobcentre or take part in the Work programme already feeling bad and communication by DWP makes them feel so much worse. That has got to come to an end.
Mr Brown
I agree with my hon. Friend. I also want to come back to the point I made at the beginning. Staff are under so much pressure. I can tell both Ministers here that there will for ever be a question mark over targets. Let me assure them and the Secretary of State that if evidence ever comes my way that clearly indicates that there are targets that have been denied by Ministers, I will make the House fully aware. I hope that hon. Members on both sides would do likewise. If that evidence is to be found, if that is happening, then it is only right that we expose it.
Katy Clark (North Ayrshire and Arran) (Lab)
We all support high quality training and work experience, but the court case to which the Bill relates was about someone working at Poundland for an extended period. Does my hon. Friend agree that most ordinary people watching this debate will feel that it is outrageous that people are being asked to do such jobs without being paid?
Mr Brown
I can only wholeheartedly agree with my hon. Friend. Members of the public expect better from the shops, facilities and services we use. We expect people to be paid, and that point has been made this afternoon. All we are asking is for a real choice of a real job with a real wage. That is the decent thing to do, and there can be no doubt whatever about that.
Mr Jim Cunningham
Some of the newer Members might not realise this, but under the last Conservative Government, people in Coventry were being paid £1 an hour. I remember raising the matter with Ministers at the time. We are going back to those days.
Mr Brown
My hon. Friend and I are of an age to remember when people were being paid pitifully poor wages, but thankfully—I will come to this in a minute—we introduced the national minimum wage when in government.
The hon. Member for Brighton, Pavilion (Caroline Lucas), who has left the Chamber, was absolutely correct to make the point that the sanctions being imposed were wholly unfair, verging on the criminal. A number of us heard yesterday about someone who was asked to report to the jobcentre and sign on as unemployed at 9.30 on a Tuesday morning. At the same time, they were asked to turn up at a new training organisation at 9.30. They went to the jobcentre and said, “Look, I can’t come at 9:30 on Tuesday morning. I’m reporting to a new trainer,” but was told, “No, you need to come here, otherwise you’ll face sanctions. You’ll need to get a letter from your new trainer.” When they went to the trainer and said, “You’ll need to provide me with a letter that allows me to avoid signing on,” they were told, “We don’t provide letters.” So individuals are being trapped and end up being sanctioned. There is no fairness in that sort of system.
I want to touch on the £130 million that my hon. Friend the Member for Wansbeck spoke about. This is the bit that really concerns me. Tomorrow, we will hear more from the Chancellor, and I am sure that Labour’s play will be for growth. As my hon. Friend pointed out, when we give money to the poorest, they go out and spend it, and it flows into and washes about in the local economy.
Andy McDonald (Middlesbrough) (Lab)
Does my hon. Friend agree that the only consequence of this judgment will be to put claimants in the position they would have been in had the Government not broken the law? Is it not deplorable that they now seek to use the House to change history and make their illegal actions legal? The Government broke the law and are now using the House to avoid the consequences.
Mr Brown
My hon. Friend is correct. It is as if time has stood still for all these people. The only thing they have felt all this time is pain and hardship.
I told my hon. Friend the Member for Coventry South (Mr Cunningham) that I would mention the national minimum wage. When we introduced it, the assessment showed that for every £1 million that we gave to poorer people and which went into the economy, we created 40 jobs. Even if every £1 million now created only 10 new jobs, that £130 million would create more than 1,000 jobs.
Mr Brown
In life, when things regrettably go wrong, we have to face the consequences. I firmly believe that the Government should be facing the consequences in respect of this £130 million penalty. Can the Minister tell me exactly how many of these people were, like Reilly and Wilson, innocent? I think that a fair number of those 300,000 should have had their money repaid to them.
I know that other colleagues want to contribute, so I shall finish by saying that this is a tough decision for all of us in opposition. We still believe in sanctions—in government, we recognised that we needed them—but the Government have got it horribly wrong. On behalf of both the Ministers, I am disappointed that, up until now at least, we have not heard any attempt from Government Back Benchers to defend what is happening.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
It is a pleasure to follow the thoughtful contribution from the hon. Member for Dumfries and Galloway (Mr Brown).
A very simple principle underpins my remarks: if somebody works a shift for an employer, they deserve a fair day’s pay for their time and effort. I cannot think of any circumstances in which it is okay not to pay employees or to pay them a derisory sum below the legal minimum wage for the work they undertake. I am sure that a number of us feel that the Government’s back-to-work schemes have fallen short of that principle, but the critical point is that the courts have found aspects of the regulations and sanctions regime attached to the schemes to be unlawful. At stake here is whether it is acceptable to use retrospective legislation to clean up the mess left in the wake of these court rulings. I do not think it is. Instead, I think the Government should accept that they made mistakes with the original legislation, take responsibility for the consequences and use the opportunity to rethink their approach and find more effective ways of creating job opportunities for people entering or returning to the labour market.
Given that aspects of the existing scheme have been judged unlawful and that penalties have therefore been imposed on some claimants unlawfully, it would be wholly wrong to legislate retrospectively as the Government propose to do. That, frankly, undermines the judicial process and the rule of law. We might as well rename this Bill “Jobseekers (Make It Up As You Go Along Schemes) Bill”. Whether or not we agree with the approach of the schemes in question—I have made it clear that I do not—the key issue is whether backdating legislation is the right approach to deal with this. I do not think it is. One of the main reasons why the courts found against the Government concerned the information provided to claimants and the description of the scheme in regulations. As legislators, we have a duty to scrutinise these regulations, and if we go down this retrospective “policy on the hoof” route, that aspect of our role is compromised, and that gives me great concern not only in a general sense, but in relation to the particulars of this issue, because to my mind the use of unpaid labour by businesses requires careful scrutiny and proper accountability.
I am quite sceptical about the value of such schemes, not just because if the jobs are there, they should be properly paid—at the very least at the minimum wage—but because I have seen very little evidence that they work. I am sure that many jobseekers will welcome every opportunity that comes their way, and some might even be able to use them effectively in the future, but there remain serious questions, mentioned by other hon. Members, about the practical outcomes of these programmes. I want to raise concerns about their long-term sustainability while the wider economy remains stagnant. There are real fears that schemes such as these actually inhibit recovery. Jobseekers might not be getting the skills that they need, but in the meantime they are depriving someone else, or even themselves, of a proper paid job opportunity. Also, while they are working for free, they cannot be out there looking for work that is appropriate to their skills and experience. Many will find themselves stuck in a sector that is wholly inappropriate and unsuitable.
To my mind, the schemes represent a poor use of our human capital. For example, they require graduates to stack shelves, yet we have invested thousands of pounds in those people’s education. They often have the confidence, skills and qualifications to enter the labour market, but if they are compelled to undertake low-paid, low-skilled work instead of looking for more suitable opportunities, what hope will that give to people who do not have high-level qualifications and who are trying to access a competitive labour market?
One question that has been raised today is: where is the money coming from? It is important to point out that that could well be a worst-case scenario. Other Members, particularly the hon. Member for Wansbeck (Ian Lavery), have mentioned section 27 of the Social Security Act 1998, and suggested that only some of those who have been sanctioned under the unlawful sanctions would have a case. Also, claimants would need to appeal, and there is no guarantee that they would all do so.
In regard to the question of where the money would come from, this is only a tiny proportion of the overall welfare budget. I am sure that there are as many ideas about where the funding could come from as there are Members in the Chamber today. There are lots of other places where the money could be found, according to one’s political priorities. My own personal bête noire is tax avoidance, which, even by the most conservative estimates, costs the UK billions in lost revenues every year. Ironically, some of the large corporations that have faced recent allegations of tax avoidance are the same large corporations that are participating in the unpaid labour schemes. So it is not just that they do not pay tax; some of them are now not paying wages either. I suggest that recouping unpaid tax might be one way of meeting the shortfalls in the budget. That might also bring a rather satisfying element of poetic justice to the proceedings.
The UK has a poor track record on cheap labour schemes, and we should learn from the mistakes of the past. As someone who came of age in the 1980s, I remember all too well the failures of the youth training scheme that afflicted many of my own peer group. It was essentially a cheap labour scheme for employers that exploited the hopes and aspirations of young people desperate for work, and it marched far too many of them up the hill, only to abandon them back on to the dole at the end of the scheme. Some were able to use the scheme as a springboard to something better, but for many, the quality of the training was highly questionable and it did nothing to help them to develop skills that employers wanted.
Steve McCabe
Does the hon. Lady think that the small number of Government Back Benchers present in the Chamber is indicative of the fact that they do not share her concerns about the quality of these schemes and about what happens to these people?
Dr Whiteford
It is very disappointing, but what disappoints me even more is that I suspect that we will be very lonely in the No Lobby tonight when we vote on this question. I urge everyone present who cares about this issue not to sit on their hands this evening but to stand up for people who are being asked to undertake unpaid work when they could be working for a wage in a proper job.
The worst aspect of the youth training scheme was that people were paid off from proper jobs in order to make way for YTS trainees on 20-something quid a week. Even in the 1980s, that was a derisory amount of money. It perpetuated dependency, sucked real jobs out of the economy and created huge resentment, not just among trainees who felt that they were being exploited, but from those who had watched their own wages and job opportunities evaporate.
The reality, then and now, was that people started getting jobs in significant numbers when, and only when, the economy started picking up again. Castigating the unemployed for being out of work entirely misses the point, and simply passes the buck away from those of us who have more responsibility for the state of the economy. The point about the state of the economy is as relevant today as it was in the 1980s, and it is particularly relevant with regard to the availability of work for people who do not have much work experience, or who face hurdles because of their health, because they lack skills or because they face other barriers to employment.
For several years now, I have taken an active interest in the programmes run by the Prince’s Trust in my constituency, which help young people who are some distance from the labour market to build the skills, the experience and, above all, the confidence and self-belief to find work and derive the many benefits that come with it. A work experience placement is an integral aspect of the Prince’s Trust programme, but as the economic recession has dragged on, it has become harder for staff to find placements, and significantly harder for the young people taking part to secure employment subsequently.
Alison McGovern
Does the hon. Lady agree that one of the most awful aspects of the Work programme is the way in which some of the really brilliant and committed charitable organisations have been locked out of taking part in it?
Dr Whiteford
I could not agree more. The schemes that are run by experienced voluntary organisations are often the most successful in overcoming the real attitudinal, confidence and self-esteem issues that many young people have when they are finding it difficult to get a job and to find the dignity that comes from work, and when they feel that society is telling them that they do not have a contribution to make.
Almost all the young people in the first Prince’s Trust team I met had secured a job by the end of their programme: either their placement had led to a job offer or they used their experience to get a similar job elsewhere, or they had gone to a positive destination in college or a training programme. Recent teams of young people have struggled; they did well in their placements, but there is not sufficient demand in the economy to generate the entry-level jobs they were working towards. When I say that about Aberdeenshire, one of the most economically buoyant parts of the UK, I am left pondering how much harder it must be in areas of high and persistent unemployment in other parts of these islands.
The only workable solution is to drive growth and create demand in the economy. That is the way to create jobs and get people into work, but it is something that the Government have conspicuously failed to do over the last three years and is one of the reasons why we need the power to make economic and policy decisions in Scotland. When the Government brought in their workfare scheme, they made mistakes. They should acknowledge their mistakes and take this chance to rethink the entire scheme, refocusing their efforts on creating real jobs for those who can work. Above all, the Government should step back from legislating retrospectively to penalise those they unlawfully sanctioned. That was a completely unacceptable move and my colleagues and I will oppose it.
Fiona Mactaggart (Slough) (Lab)
Over recent months, I have asked the Minister of State a number of questions about the sanctions regime. It has proved hard for him to answer questions such as how many people for whom English is a second language have been sanctioned and how many disabled people have been sanctioned. In my view, he does not have the evidence to state in the impact assessment that protected groups will not be disproportionately affected by the Bill. They may or may not be affected, because my efforts to find that information have failed, but I believe they are. When I see constituents who have been sanctioned, they are disproportionately people who are easily confused or who do not have good English.
However, that is not the reason why I shall go into the No Lobby on Second Reading. I oppose the Bill because I do not believe that Parliament should give the Government an alibi for confiscating from more than 200,000 people sums of between £340 and £810. They have illegally kept those sums from them. Let us be clear. That is what we are being asked to do by this retrospective legislation.
The Government have broken the law in a way that impacts on individual citizens. They have disrespected the rights of individual citizens and they are now asking Parliament to say, “Carry on doing it.” I do not believe that Parliament should do that. It is a fundamental issue of civil liberties, human rights and good governance. For that reason, not because of the content, I shall not abstain: I will oppose the legislation.
Ministers say, “Oh, people knew,” but let us be completely clear about what the regulations the Government have been found in breach of say. Regulation 4 says that the notice that people who are sanctioned receive “must specify” that C—the claimant—
“is required to participate in the Scheme…the day on which …participation will start…details of what C is required to do by way of participation in the Scheme…that the requirement to participate in the Scheme will continue until C is given notice by the Secretary of State that C’s participation is no longer required, or C’s award of jobseeker’s allowance terminates, whichever is earlier”
and finally,
“information about the consequences of failing to participate in the Scheme.”
In my view, the Minister has utterly disingenuously—I hope that is not unparliamentary, but I think so—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I think it is, and I am going to rule that it is, so I am sure the hon. Lady will not want to use that word.
Fiona Mactaggart
I withdraw that word, Mr Deputy Speaker.
The Minister suggested that claimants knew the consequences. I refer him to the statements of judges on the matter. Judge Foskett said that
“the words…in the letter received by Mr Wilson were that his benefits ‘may be stopped’, perhaps conveying the impression that sanctions are not necessarily automatic.”
He goes on to say that
“the information given concerning sanctions is unclear and opaque.”
I accept that, since then, the Minister has improved the letters. I think that is right, and I do not oppose the possibility of sanctions; I believe that sanctions can work if people know that they are at risk of being sanctioned.
Mr Hoban
May I point out that, actually, sanctions are not automatic? Sanctions may be applied, because actually we disregard sanctions—sanctions do not apply—if there is good cause not to apply them. So “may” sounds right to me. The problem that the courts had was not specifying the graduated approach to sanctions.
Fiona Mactaggart
As I said, the judge said that
“the information given concerning sanctions is unclear and opaque.”
If the Government want sanctions to work, people need to know the consequences of their actions, and this is a debate about the consequences of actions—the consequences of the Government’s actions in failing to ensure that they complied with regulation 4 of the regulations in every communication with claimants. It seems to me that the Government should bear the consequences, and the consequence in this case is up to £130 million. When the Government do wrong—and let us be clear, the Government have been found to do wrong in this case—it is not just to be overlooked. This is a series of court judgments which say, in respect of individual citizens, that they have been wrongly treated—the Government must give those citizens back their money. It is not the Government’s money; it is their money. The Government have wrongly kept it from them, and it is quite clear that that is what the courts have decided.
If the Government are going to say that a sanctions regime is necessary so that people know the consequences of their actions—an argument that I would support—it seems right to me that the Government themselves should bear the consequences of their wrong actions, and they should not be coming to Parliament to ask us to give them a free pass for breaking the law, because that is what the Bill is doing.
John McDonnell (Hayes and Harlington) (Lab)
I feel proud of a whole range of speeches that have been made. They have been principled and have set out the case very clearly.
The straightforward issue is that the judgment basically said that the Government acted unlawfully. What surprises me is that there has been no word of apology from the Minister—not a single word to say, “We got this wrong, and therefore we apologise to the House.” Let us be clear what the judgment said: that the Secretary of State acted beyond his powers. He failed to provide the details of workfare schemes within the regulations and bypassed Parliament by introducing an umbrella scheme—the employment, skills and enterprise scheme. This is not a technicality. In fact—I quote from the judgment of Lord Justice Stanley Burnton:
“There is a constitutional issue involved. The loss of jobseekers’ allowance may result in considerable personal hardship, and it is not surprising that Parliament should have been careful in making provision for the circumstances in which the sanction may be imposed.”
This is a fundamental constitutional issue. The Government tried to slide through Parliament, without adequate consideration, regulations that would eventually deprive our constituents of significant sums of money. The decision found that the Government have unlawfully required tens of thousands of people to work without pay, and, if they have said no, have stripped them unlawfully of a significant amount of their benefits.
The public interest lawyers who took the case said that there are basic requirements of fairness, and those basic requirements are usually dictated by Parliament. The basic requirements of fairness in relation to anything like these regulations are to provide people with a clear explanation of what they have been asked to do, why they are being asked to do it, and what the consequences are if they fail to do it. That has simply, as a result of this judgment, not been complied with. That is what the debate is all about.
The solicitor who represented the claimants, Tessa Gregory, summed it up very well:
“The case has revealed that the Department for Work and Pensions was going behind Parliament’s back and failing to obtain Parliamentary approval for the various mandatory work schemes that it was introducing.”
There was a lack of transparency and fairness in implementing the scheme, and claimants had no information about what could be required of them under the back-to-work schemes. The Court of Appeal affirmed the basic constitutional principle that everyone has a right to know and understand why sanctions are being threatened and imposed. That is what this is all about.
It is worth referring to the cases that determined the judges’ action, and putting them on the record. It is staggering that the Government even contested them. Jamie Wilson, the lorry driver, said:
“I refused to participate in the Community Action Programme…because I objected to being made to clean furniture for 30 hours a week for 6 months when I knew it wouldn’t help me find employment. I was given next to no information about the programme, I was told simply that I had to do whatever the DWP’s private contractor instructed me to do and that if I didn’t I may lose my benefits. Being without jobseeker’s allowance was very difficult for me but I don’t regret taking a stand”.
The community action programme
“is a poorly thought out and poorly implemented scheme which even according to the DWP’s own statistics is not helping anyone get people back to work.”
He continued—this is enlightening about the nature of the people we are dealing with; they are desperate for work:
“I am now participating in the Work Programme but it doesn’t involve me working for free, I have to meet an advisor every 3 to 4 weeks who helps me look for work. I will continue to attend these sessions with my adviser regardless of whether or not I am required to attend because I want to find a job”.
That is what people want.
In the other case, Cait Reilly said:
“I brought this case because I knew it was wrong when I was prevented from doing my voluntary work in a museum and forced to work in Poundland for free…as part of a scheme known as the sector based work academy. Those two weeks”
I worked at Poundland
“were a complete waste of my time as the experience did not help me get a job, I wasn’t given any training and I was left with no time to do my voluntary work or search for”
a job. That is extraordinary. She continued:
“The only beneficiary was Poundland, a multi-million pound company. Later I found out that I should never have been told the placement was compulsory.”
The Secretary of State has been quoted as saying elsewhere:
“Does Cait Reilly think she is above shelf stacking?”
I hope that is a misquote. If he did say it, he should withdraw it because it is a disgraceful insinuation about someone’s character. Cait Reilly also said:
“I don’t think I am above working in shops like Poundland. I now work part-time in a supermarket. It is just that I expect to get paid for working.”
That is all she asked for. She continued:
“I hope the Government will now take this opportunity to rethink its strategy and do something which actually builds on young unemployed people’s skills and tackles the causes of long-term unemployment. I agree we need to get people back to work but the best way of doing that is by helping them, not punishing them. The Government ought to understand that if they created schemes which actually helped people get back into work then they wouldn’t need to force people to attend.”
That is what the young woman who took the case to court said, and I congratulate her on doing that. If she had not, we would not be in the situation of contesting what the Government are doing.
Let us be clear about the intent of the Bill. The Government have acted unlawfully. They have robbed some of the poorest people in our society of, on average, £500 of benefits, which is a lot to people living on the breadline. Now the Government are using this retrospective device to avoid paying back to those poor people money that they should not have been deprived of in the first place. The argument that paying £130 million back to poor people would damage the economy is derisory and laughable. As my hon. Friend the Member for Wansbeck (Ian Lavery) said, if the £130 million was given to the poor who need to spend the money, it would help to boost the economy. To suggest it is a threat to the economy when the bankers have been bailed out with £1.2 trillion is laughable in any Government logic. The suggestion that if we pay the money back, it must come from other claimants is the Government’s classic strategy of divide and rule in their welfare benefits policy.
As my hon. Friend said, the use of retrospective legislation simply ensures that illegality is made legal and sets an extremely dangerous precedent, but that is nothing to do with the money, taxpayers or the economy. It is about prejudice against the poor, the demonisation of the unemployed and the iron heel of a prejudiced state. It is also about the preservation of a large pool of unpaid labour for large-scale corporations to exploit. It is now estimated that the Government will put through 250,000 people on work experience, 850,000 on work programmes and more than 70,000 on the mandatory work activity. At the last calculation, that is about 60 million hours of free labour to those corporations. That is exploitation; it cannot be termed in any other way.
In the past two decades, we have seen a transformation in how unemployment is considered, discussed and viewed. Governments since the second world war had a commitment to full employment and saw as a responsibility their role to ensure full employment. There have always been sanctions within the system to prevent people from abusing it, but they were about ensuring that people were sanctioned if they refused to go for paid work, never unpaid work. Now, just when unemployment is at its highest and it is the hardest time to find a job, the attitude is that unemployment is not the fault of the system or a failure of Government or of society, but a failure of the individual. The individual is to blame, not the society that has caused the unemployment. Therefore, the logic follows that the individual must be penalised, so what the Government have successfully done in the media and elsewhere by ministerial statements is demonise the unemployed—the unemployed themselves have caused their own poverty, rather than the system that has created the unemployment. The result of that logic is what we see today: the poor and unemployed have to be harassed, pilloried, sanctioned, blamed and made to feel guilty for being unemployed.
Steve Rotheram (Liverpool, Walton) (Lab)
Does my hon. Friend agree not only that the Government have shown no contrition whatever on the issue, which is a mess of their own making, but that they are trying to scapegoat those people who have been sanctioned illegally?
John McDonnell
It is that, but there is also a wider agenda of making people feel guilty just because they are out of work and guilty just because—temporarily, in most instances—they have to depend on some benefits. This is about scapegoating and victimising the poor and people who cannot get a job. It is about harassment and exploitation. At the heart of that is the judgment that Parliament was not properly informed of what those schemes and regulations meant. That is what the judgment said.
I make it clear that I shall vote against the Bill because it is immoral and wrong. Before we vote to render those schemes lawful retrospectively, it is important that Members are aware of what we will be supporting. Boycott Workfare is an organisation that set up— [Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. There seems to be a phone ringing somewhere. Wherever it is, we can certainly hear it.
John McDonnell
Before we vote tonight, it is important we know that we will be voting to support the workfare schemes being introduced by the Government. The Bill will enable the sanctions to be continued and retrospectively made legal, because people refused to go on those schemes—I think justifiably so with regard to many of them. Let us take some examples from the Boycott Workfare website. Tesco is a classic, and one example refers to
“a fifty-six year old man who worked at Tesco for 40 hrs a week for 6 weeks for no pay.”
He was
“given the worst job, constantly filling freezers in the hope he would be taken on. After the 6 weeks were up the manager asked him if he would like to stay on for some extra weeks,”
and the man said,
“‘with pay?’”
The manager said no,
“why would he pay him when he can pick the phone up and get more unemployed people who have to work for nothing”?
That was at Tesco, and the list goes on. Poundland is a classic example of an organisation exploiting unemployed people, time and time again recruiting shelf stackers while laying off other workers. Primark is another example. One young woman who went to Primark said:
“The Jobcentre paid travel money but no lunch. I worked three days a week, 10 am to 4.30 pm or 5 pm with one half-hour break.”
Primark
“don’t pay any money. It was nearly six months, from January to June. When I finished the placement I took my CV and I asked the managers if they had any vacancies. They said, ‘Not yet—we’ll call you when we do.’ I haven’t had a call.”
Jeremy Corbyn (Islington North) (Lab)
Is my hon. Friend aware that there are companies that do the same, but with people who have not come through the jobcentres? People apply for a job, are asked to work for three or four weeks on probation and are then told to go and are replaced by colleagues. There are shops even in the west end using large numbers of totally unpaid staff on a permanent basis.
John McDonnell
The whole point of the exercise, as far as I can see—despite the arguments that it makes people job fit—is the massive exploitation of tens of thousands of people for free labour. I will not go through all the examples, but it is worth looking at the Boycott Workfare website, which gives example after example of people who have been exploited or have worked in unsafe conditions lacking health and safety, have stuck at it to try to get a job and who have never got the job. The job never materialises.
What happens if people say no or drop out? They are sanctioned. Sanctions have increased dramatically in this country. In 2009, 139,000 jobseeker’s allowance claimants were sanctioned. By 2011, the number had nearly tripled to 500,000, and it has risen again this year. Interestingly, it is private companies that recommend sanctions to the Department for Work and Pensions. The worst are Serco, Seetec, A4e and Working Links. If they do not get their pound of flesh—if they do not feel that they are getting value for money from someone who is unpaid—they recommend to the DWP that the person be sanctioned.
The irony is that despite all the pain, anxiety and suffering inflicted on unemployed people, the schemes are proven not to work, as my right hon. Friend the Member for East Ham (Stephen Timms) said. Time and time again, all the evidence—whether from the Social Security Advisory Committee, the DWP peer review, Ben Goldacre or the National Audit Office—demonstrates that not only do the schemes not work but, as others have said, they undermine wages for people in work and prevent others from getting paid jobs.
Large numbers of people are extremely angry at how they have been treated. I believe that many are now willing to stand up and say, “We’re not going to be treated in this way.” That is why the sanctions system is becoming even more rigorous, and why it is important for the Government to pass the Bill: they want to intimidate more people and force more people into work, done for free, that they do not want to undertake.
It is worth stating that this is about exploiting people. It is about ensuring that young people in particular are intimidated into unpaid work. People who were brave enough to say, “I’m not willing to take unpaid work and be exploited in this way, and if necessary, I’ll be sanctioned because of that,” have now been proven right. They were not informed of what they were getting into, but they were bright enough to understand the level of exploitation involved and they stood up against it. The Bill says to them that now they have won in court, we will try to ensure that they do not get justice. That is what it is about.
I urge Members to vote for justice. The Bill is a disgrace. It is a monument to a combination of incompetence by the Government and brutality to the poor. I look forward to hearing the Labour party consider what we are doing here today. I urge Members to vote against the Bill, because I think that people are looking to the Labour party to defend them again—to stand up for what is right and just, for the people in our society who are exploited and for those at the bottom at the moment: those who are unemployed, unable to get a job, dependent on benefits and desperate for work. Those people do not expect to be harassed and exploited by a Government using sanctions to force them into unpaid work. That is why I shall vote against the Bill, and why I urge all Members to vote against the Bill to demonstrate that someone in the House is standing up for those people.
Sheila Gilmore (Edinburgh East) (Lab)
The Bill is not perhaps what some people think it is, nor perhaps what we would like to debate. It will not end various forms of work experience, whether we think that is a good or a bad idea, because the Government have put in place—and have done so very quickly—regulations to overcome mistakes in previous regulations.
We need a lengthy debate, and we need to think hard about what we do to help people find work, if there is work—often there is no work to find, which is the fundamental failure of many of these programmes. Whatever we call the schemes or however we dress them up, if the jobs are not there, no amount of job readiness and training will get people a job. They might make people readier for a job, which might not be a bad thing in itself, but it is an illusion to assume that if we simply introduce a programme and make people do it, suddenly a job will emerge at the end. It will not, unless there are jobs and demand in the economy.
It is the same for many people doing part-time jobs. We have had many debates in the past few weeks about the bedroom tax, and people have said, “Well, people can go out and get extra hours to pay the tax; it will be easy.” In the course of half an hour on Saturday afternoon knocking on doors in my constituency and asking people about this, I met two people who were working part time. They both wanted extra hours and had gone to their employers to ask whether extra hours were available but were told they were not. Ironically, if firms gave extra hours, that work would be taken away from someone else, giving them fewer hours or no job at all. Hours are short because the jobs are not there. Similarly, many job programmes have failed because, to a large extent, the jobs are not there.
Perhaps we should give more time to this debate, because we need to consider whether we are achieving what we should be achieving. Unfortunately—and I say this to people watching our debate—whatever the result of the vote at the end of today’s debate, it will not stop these programmes. Some people say that this is a vote on whether some of these so-called training programmes continue, but sadly it is not. I hope that we have further votes on the issue in future, because the new regulations, which may still be proved to be not as valid as the previous ones, have been introduced. Anyone out there who thinks that how the House votes today will bring an end to all those programmes will find that, sadly, that is not true.
If this were a situation involving parking regulations—my council introduced parking regulations, which were challenged in court and found to be invalid—and we were asking, in effect, for a sanction on sanctions or, in parking regulation terms, retrospectively forcing people to pay parking penalties which were unlawful at the time they were incurred, the Lib Dem and Tory Benches would be packed with Members saying how unfair that was. Even if we correct the regulations, that would not solve the problem. In the example I gave of my council, it corrected the regulations and issued new ones, and achieved the parking restrictions that it wanted, but it did not seek to go back to people and say to them, “Well, we can impose these penalties, because we will make it right retrospectively.” If it were any other subject, we would not see people sitting on their hands, which is what is happening today. Much attention has been focused on what the Labour party is doing, and rightly so; people are right to ask what we are doing. However, they also must ask what the Government parties are doing, because apart from the Minister, no one has come into the Chamber to speak in favour of what the Government are doing, and that speaks for itself.
A number of things have been said today that are simply not accurate. In one intervention, for example, a Government Back Bencher said that half the people going on the Work programme had got jobs. No one could seriously suggest such a figure. The only time I have heard the Government use the word “half”—[Interruption.] The hon. Member did mention the Work programme, but perhaps he did not intend to do so. The only programme that was mentioned where the word “half” was used was the pilot for the work experience programmes that my hon. Friend the Member for Hayes and Harlington (John McDonnell) has described so thoroughly. I am talking about the research on the pilot programme. Half of those on that pilot programme, which was for 1,300 people, were off benefit in 13 weeks, but being “off benefit” is not necessarily the same as being in a job. After the results of that pilot were published, there were no further figures on those schemes. No one has actually said what the success rate of those schemes has been.
The hon. Member for Battersea (Jane Ellison) referred to a visit that she and I and other members of the Select Committee made to a jobcentre today as part of our inquiry into the Work programme. Yes, some people who are providing the programme did feel that their morale had perhaps been undermined by its results and outcomes and the fact that they had been told that it was worse than doing nothing. However, those outcomes were the ones that the Government themselves set for their own programme; it is not something that someone else invented. It is not those individuals who should feel that they are to blame; it is the set-up of the whole programme that is at fault. It is unfortunate that those people felt that they were being criticised.
If the hon. Lady had stayed to make a speech, perhaps she would have told the House about some of the other things that we heard. Although of course the providers speak up for their programmes, all of them made the point that if they had more resources they would be able to do far more and do far better.
One provider we heard from was putting considerable additional resources into individuals to get them job-ready and hopefully to find them jobs. They were putting some people through programmes that cost £900 a head out of their own resources. If those people get jobs as a result of being part of that Work provider’s programme, no doubt the Government will say, “We managed to do that through the Work programme, and it was the cheapest Work programme ever.” The truth is that it would not be cheap, because those programme providers are supplementing the cost by a considerable amount. They all said that if it were not in fact the cheapest Work programme, it could be doing a lot better. Cheap is not always good; cheap is sometimes extremely shoddy and of poor quality. As we all know, a cheap pair of shoes will not last very long.
Much of what has been said about the quality of the programmes is poor. I want to have the debate about sanctions, because the experience of my constituents is that the sanctions regime has not only been increased in extent but has lost discretion. Discretion has flown out of it all together, so that many people are finding that they are sanctioned for things that they hardly understand. Many people who are deemed to be job-ready are actually suffering from mental illness or a learning disability and they are the people who may be sanctioned. I therefore welcome the new clause that provides for a report on sanctions. The sooner that comes through, the better.
I ask the Government yet again, as I have before, to look at individual cases. I raised one with the Minister at DWP questions. A young man was on the Work programme for a year and a quarter, but there was no real progress. He sourced a training course—a very good training course—to learn construction skills. That would have involved eight weeks of unpaid work, which he was quite prepared to do, as part of a structured scheme, followed by 13 weeks of paid work and the prospect of a job at the end. When I raised that case with the Minister, he simply said, “The reason he is not getting to do that is the Scottish Government’s funding.” I will come back to the Minister on that case because that is not so. The underlying issue is that the Work programme provider could not provide anything like that quality. In a year and a quarter, the provider had never offered that young person that sort of training. That should be the significant point; it should not be a blame-game—“Oh, it’s the fault of the Scottish Government, Jobcentre Plus, or the Work programme provider.” That is the merry-go-round that that person is on; as far as I am aware, unless something has come in today, he is still on it.
I am not against good schemes, good work experience, or sanctions, but I am against poor-quality schemes. The Government are so gung-ho, saying that it does not matter that this measure is retrospective, that they have made mistakes and will go back over it. That is not acceptable, and we must stand up and say that clearly. I am sorry that the Government have not been prepared at any stage to say, “We did get it wrong and we are going not only to alter that bit of regulation but put real effort into improving our employability schemes.”
Grahame M. Morris (Easington) (Lab)
It is not often that, when I rise to oppose a Government Bill, as I do again on this occasion—for the avoidance of doubt, I will be going through the No Lobby—I follow six hon. Members in succession with whom I agree. Perhaps that is an indication that no Government Back Bencher is prepared to stand on their convictions and argue the point. Therefore, this is quite a rare occasion.
I am proud to represent the Easington constituency. This is a matter of social justice for me and I have a number of concerns about the Bill. The issue of retrospection is an important and fundamental one. I suspect that the Government are opening a Pandora’s box here. In the debates on last year's Finance Bill, I heard the same Minister warning of the dangers of retrospective measures to deal with tax avoidance and loopholes, so using this route will have consequences. If he was so confident about the quality and strength of his argument, why did he not challenge the decision in the Supreme Court, rather than using primary legislation? Perhaps he might answer that question in his response.
It is not just an issue of retrospection—the Government's arguments are wrong. They are trying to justify this measure, but they have made the mistake. It is an issue of wording. Nevertheless, the Government have made the mistake and they are seeking to sell their argument to hon. Members on both sides of the House by saying that, if the funds are not recovered from those who were incorrectly sanctioned, they will have to be recovered from elsewhere in the welfare budget. That is outrageous blackmail; I am sorry if that is not parliamentary language, but I find that deeply offensive. It goes against every grain of fairness in Members on both sides of the House. The view I am expressing is the view that has been unanimously expressed to me. I have received numerous e-mails and messages from my constituents over the past 48 hours, all of them asking me to vote against this Bill as it is unfair and unjust.
The Government, and especially Government Back Benchers, have characterised jobseekers who have been sanctioned as workshy and feckless—the sentiment expressed was “Are you really suggesting these people shouldn’t be sanctioned?” Let us have a look at the Work programme, however. It has gone from chaos to farce. We talk about “workshy”, but what about wage-shy employers who exploit the unemployed, with the connivance, approval and funding of the Government?
Many commentators have severely criticised the Work programme as not representing value for money, and so, too, I believe, has the Public Accounts Committee—I am sure the Minister will correct me if I am wrong about that. Indeed, it has been suggested that the programme is worse than doing nothing, and I am certainly aware that major retailers have exploited free labour from the Work programme to meet seasonal demand, rather than, as would otherwise have happened, employing temporary staff or, even, giving existing employees additional hours. The programme has therefore had the perverse effect of blocking real jobs, and I agree with other Opposition Members who feel it should be subjected to a root-and-branch review.
What we have is a £3-million black hole, and it seems to me that the only people profiting from it are the privately contracted organisations—some of whom were mentioned by my hon. Friend the Member for Hayes and Harlington (John McDonnell—who have done well out of the programme. I am therefore surprised that one of the Government’s principal arguments here is about the protection of the national economy, when they are seeking to introduce primary legislation to rewrite history and withhold social security payments that were denied because of unlawful sanctions. We must not beat about the bush. The judgment is clear and specific; my hon. Friend the Member for Slough (Fiona Mactaggart) read it out in her passionate and excellent speech. The Government are at fault here, in how they have implemented things.
I oppose the concept of two nations, as does my party, but what will the consequences of these measures be? The Government are creating two nations. They are seeking to penalise and punish the poor for the mistakes of the rich and powerful, in part of a continuing series of policies that are badged as “austerity”. Those policies are pushing the poorest in society further into poverty.
As my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) said, one of the most galling things is that Ministers have shown absolutely no contrition or understanding of the consequences of their actions. That might be because they do not understand the consequences, because they do not live in the real world where they would rub shoulders with some of the poorest people in society who are suffering hardship. People in my constituency in east Durham ask me, “Why are we suffering for the consequences of this crisis? Was it created in Horden, Shotton, Haswell, Blackhall or even Murton?” No, of course not; the crisis was caused by the mistakes of the banking sector and City speculators. I raise that point not only because I despise the casino bankers for the state they have reduced the economy to, but because there is another avenue that Ministers could pursue to recover the £130 million, which I will return to shortly. In fact, we touched on this issue last year in the Finance Bill Committee. Why on earth do the Government not legislate for a general principle of tax avoidance? Instead of robbing people who have been inappropriately sanctioned, the Government should consider the huge reservoir of unpaid tax that individuals could well afford to contribute to. To my mind, there was a failure by Governments.
Kelvin Hopkins (Luton North) (Lab)
My hon. Friend is making an excellent speech and a very good point about where money could be found. He mentioned the tax gap, which, according to Richard Murphy and others, is some £120 billion a year. We are talking today about £130 million, which is roughly one thousandth of that amount.
Grahame M. Morris
My hon. Friend, who is very knowledgeable and has a background as an economist, has hit the nail on the head. The general public, my constituents and many Opposition Members do not understand why the Government do not address this problem. There is a relatively straightforward way to do so: by legislating for a general principle of tax avoidance. The Government are quite happy to use primary legislation retrospectively to deprive people who have been illegally sanctioned of £130 million, but they will not use the same route to recover moneys properly due to the Exchequer.
There is a contradiction here. Although the Government have been highly critical of what has happened, they continue to push the case for further deregulation. Just yesterday, in a Delegated Legislation Committee the statutory period of notice for compulsory redundancies for employers employing more than 100 people was reduced from 90 days to 45. This Government are still very much pursuing the Beecroft agenda.
John McDonnell
It is worth noting that, according to the Government’s impact assessment of that delegated legislation, employers will gain £290 million and employees will lose £250 million.
Grahame M. Morris
That just goes to show that we are all in this together—or rather, we are not.
I have seen the graphs and the charts showing that the poorest are being hardest hit. We should consider the effect of a 5% cut in their weekly income. Other Members have spoken about the sort of cuts that individuals are going to experience. I do not know whether the Minister, other Front Benchers or even Conservative Back Benchers know what it is like to exist on £71 a week, but it is a real struggle. Taking up to £25 a week from the poorest families, most of whom are in social housing, can mean a choice between eating or having proper heating. How can this be fair, when the Government’s priority is to make millionaires richer, to the tune of £2,000 a week? Such a tax cut is unimaginable for someone who would be sanctioned under the Work programme. In fact, the £2,000 a week tax cut for millionaires that we anticipate tomorrow equates to 28 weeks’ income for somebody on jobseeker’s allowance.
Mr John Redwood (Wokingham) (Con)
Will the hon. Gentleman just remind the House why Labour always had a lower rate of tax for rich people than this Government?
Grahame M. Morris
We need to look at the situation we are in now. This is the wrong thing to do: it is unjust and unfair to give millionaires a £2,000 a week tax cut, at the same time as the right hon. Gentleman’s Government propose to deprive some of the poorest people, who have been illegally sanctioned, of large chunks of their income. It is outrageous, and it is rank hypocrisy for anyone to talk about rights with the emphasis on responsibility when it comes to workfare. If they are willing to undermine the judiciary and the rule of law, and vote for retrospective legislation to cover up the mistakes and failings of the Minister, who is asking that we legislate to place him above the law, that is a dangerous precedent to establish.
I cannot, in all conscience, support this desperate Bill, put forward by a desperate Government who have broken their own laws and now wish to forgo their legal obligations and withhold social security payments of £130 million to some of the poorest people in the country. Why do we not apply that method across the board? If the national emergency is such that it is right to deny access to social security to those who are entitled to it in order to safeguard the national economy, why do we not chase the tax exiles—those powerful individuals who own newspapers and luxury hotels, who pay no corporation tax and who have laid siege to a small Channel Island? I understand that Her Majesty’s Revenue and Customs has already paid out more than £200 million to two such individuals who are now seeking a £1 billion VAT windfall at the taxpayer’s expense. Government Members are silent about such things. As we know, there is one rule for the rich and one rule for the poor, including those who have been illegally sanctioned through the Work programme.
We are in the sorry situation of the Minister blackmailing hon. Members by threatening a collective punishment for all those in receipt of social security and welfare benefits if these changes do not go through, because the Department might have to find the money through further reductions elsewhere in its budget. I thought that it was the Secretary of State for Education and his advisers who were the bullies. It is now obvious that the Department for Work and Pensions has decided to sink to those standards by threatening Members of the House in this way, which is below what we would expect of a responsible Government and a responsible Minister.
I did not come into Parliament to penalise and punish the vulnerable and the poor for the mistakes of the Government. The Department for Work and Pensions seems to be in a state of chaos. It is trying to save money by issuing unlawful sanctions for a Work programme that is not fit for purpose. It is making arbitrary cuts to disability living allowance and employment and support allowance, and is seeking to reduce the case load by 20%. Through the bedroom tax, it is cutting the incomes of disabled people and families with children. The welfare state under this coalition Government in 2013 is failing at every turn.
What we are seeing today is an abuse of power. This is an appalling Bill. I urge the Minister to take responsibility for his actions, even at this late stage, to put a stop to the Bill and to pay those who were unlawfully sanctioned because of his failings. I will vote against the Bill and I urge other hon. Members to do the same.
Simon Hughes (Bermondsey and Old Southwark) (LD)
Thank you very much for calling me, Mr Deputy Speaker. I apologise to you, the House and the Minister that I was not hear for the earlier part of the debate. I was in a Select Committee upstairs and then in a meeting. I wanted to contribute to the debate because the Bill troubles me.
I will start by expressing concern about a couple of matters raised by the hon. Member for Easington (Grahame M. Morris), which are relevant because they are about how we treat the rich as well as the poor. I am not party to what is going to be said tomorrow, but I hope that the Government will go ahead with having a tax system that requires a minimum amount of tax to be paid by everybody. It is planned that that will be in the Finance Bill for the coming year. I share his view that we need a system that does not allow people to escape their tax obligations and that that should be a general principle.
I also share the view of the hon. Member for Easington on who should pay more into the system in times of austerity: it should be those who are better off. As it happens, we disagree about whether the better-off now pay more or less. My right hon. Friend the Member for Wokingham (Mr Redwood) intervened on him to point out the hard truth for a Labour MP that during the whole of the Labour Government, the top rate of tax was lower than it is now and lower than it will be after the change this year. There is no backing away from that. I think that that was regrettable, whatever the explanation. However, I want mainly to talk about the Bill.
I understand why the Government read the judgment from the Court of Appeal and have come to the House. The Court did not overturn the principle that people should do some mandatory work while on benefits, but it found—to put it bluntly—that there was a flaw in the paperwork sent to people requiring them to do that. I would have preferred the Government to go to the Supreme Court and wait for that judgment before seeking parliamentary approval to change the law in relation to a large number of cases. I understand the financing and the logic, but I am always nervous when we do not wait for the courts to adjudicate.
I have not talked about this with the Minister but I assume that the Government are nervous that they will not win in the Supreme Court, which is why they have come before the House now. I am nervous about that, but it is not my principal concern about the Bill. My principal concern is about the system that the Bill will continue, which is—to put it bluntly—bigger than the Bill itself. I am sure that will have been the subject of a speech from those on the Labour Front-Bench, just as I have heard that point in speeches from Labour Members who have already spoken.
Despite difficult economic times, I am happy that over the past few months my constituency, which, as colleagues know, is just over the river, has begun to see a reduction in unemployment, both generally and among young people. It is not a huge reduction—I am not naive about that—and when I checked a minute ago it was still ranked 214th in the country in terms of the percentage of those who are unemployed. We are still in the top half of the table, and 5.9% of the population are still not in work although they would like to be. Nevertheless, the figure has come down from its peak of 6.2% in September and October 2011.
I am concerned that we are still running a system—I would be happy to continue this conversation with colleagues from the Department—that does not work or achieve what the Government wish it to achieve, and I will illustrate that point with four constituency cases from recent months. The first concerns a constituent called Mr RE—I will use initials in all cases because I do not have permission to share the details—who wrote to me in autumn last year. I then wrote to the Jobcentre Plus manager for my constituency, with whom I have a good professional working relationship. Mr RE told me that he wished to dispute a sanction on his JSA claim. He said he had received a letter from Seetec, the providers of mandatory work activity in my constituency, asking him to attend a mandatory work placement in June 2012 at the British Heart Foundation and a charity shop quite near to where I live on the Old Kent road.
On 21 June, the day before Mr RE was due to start, he received a letter from a voluntary organisation for vulnerable adults inviting him for an interview the following Monday—25 June. He told me that he intended to train as a social worker and that a work placement such as the one offered by Sova, the voluntary body, included a requirement to apply for an MA course in social work. He therefore needed to make that interview a priority. He had only a day’s notice, which he needed to spend in preparation and buying appropriate clothing. He telephoned Seetec as soon as possible to advise that he would not be able to start his work placement on 22 June, but said he would be available from 26 June onwards.
Simon Hughes
Let me just finish this example. Mr RE told me that Seetec was unwilling to discuss the matter and that nothing was resolved. He found the telephone staff rude, abrupt and unwilling to hold a sensible discussion. He went for his interview with the voluntary organisation for vulnerable adults and—as he said he would—he attended the mandatory work activity the following day. Three days later he received a letter advising him that as he had not started his placement on the date originally requested—22 June—he was no longer required to attend. He then received a letter informing him that his JSA claim, and that of his partner, would be suspended from 1 August until 30 October last year. I protested that that was a completely inappropriate penalty because it seemed to me that he had good reasons for not attending his placement on 22 June that were directly related to finding work. Furthermore, he had telephoned the provider to explain the reasons, and he attended the work placement as soon as he was able. I stated my view that the system was clearly failing. As it happened, in the end, a review found in his favour. Jobcentre Plus said originally that he did not tell it of the work placement, but it gave in when he queried that. Jobcentre Plus has cancelled the sanction.
That was a satisfactory outcome, but it is not the only complaint that has come my way. The second case is of D.P., who contacted me on 25 January. He told me that three sanctions had been applied to his JSA claim for failure to attend appointments at the jobcentre. For the first two sanctions, he had failed to attend because he had not received the letter in the post. His representative had written to the jobcentre but it did not agree to lift the sanction. He does not understand the reason for the third sanction, which applies from 10 November 2012 to 10 May 2013, and feels he has done all he can to comply with jobcentre requirements but is still being punished. He has received such severe sanctions that, effectively, he is no longer receiving JSA. I have not yet received an answer to my letter.
I wrote about the third case on 4 March. C. McC. says she is currently claiming JSA and has been required to attend a work placement at Divine Rescue in Walworth. However, she tells me there is no work for her to do there; that she spends the day from 10 am to 5 pm unoccupied; that no training is provided; and that there are no computer facilities to allow her to work independently.
The fourth case is of a friend of a constituent. A.S. has an accounting qualification and has worked in finance. He has just finished three months’ work experience as an intern in the financial department of a local company, which was appropriate to his career plan. He is a graduate and has a relevant background. He got the placement not through the jobcentre, but separately. He was asked to attend a CV workshop while doing his internship. With the help of my office, we managed to postpone the workshop so he could complete his internship. He was told he was to do mandatory work activities—he was told he had to go and work in a Red Cross shop elsewhere in south London—with no discussion of his qualifications or experience.
Mr Howarth
The right hon. Gentleman said earlier in his speech—I tried to intervene at the time—that the problem was with the paperwork. To some extent, I accept that he is right, in that the regulations did not conform with the provisions of the Jobseekers Act 1995. However, is he aware that the Court of Appeal went beyond that by stating
“the Regulations conflict with article 4(2) of the European Convention on Human Rights which provides, subject to exceptions, that…‘No one shall be required to perform forced or compulsory labour’”?
That is slightly more than a departure from the right paperwork.
Simon Hughes
I apologise to the right hon. Gentleman for delaying his intervention. My understanding—the Minister could be helpful in this respect in her winding-up speech—is that the Court upheld the general policy principle of the employment programmes and ruled that the general principle of such employment programmes did not breach article 4(2) of the convention. The failures to be specific and to get the paperwork right meant that programmes could breach the convention. I am not disputing what the right hon. Gentleman says, but I understand that mandatory work activity is not illegal under the European convention. We need to be clear about that. Labour Front Benchers accept the principle of mandatory work activity, provided that it is decent, and accept sanctions in the benefits system.
John McDonnell
Lord Justice Burnton made it clear—I think I quoted him before the right hon. Gentleman arrived—that this is a constitutional issue. It is not just a matter of not informing claimants, but of not informing this House.
Simon Hughes
I did hear the hon. Gentleman and I accept what he said.
My fourth constituent was sent to a charity shop. He was required to carry out mundane manual lifting work. He said that he had a problem with a back injury, which meant that the work was inappropriate. He has asthma, and therefore work in a dusty environment was not great. There was a failure to provide sufficient work for people to do, including for other people who had been sent there. There was a clear breach of the rules that state that people are meant to work four weeks for five days a week from Monday to Friday. The person at the work placement said, “You have to work on a Saturday if I say so.” Clearly, that was not in the paperwork. The crude point for the Minister is that I am not sure that a graduate seeking work in finance should be sent to a charity shop to dust shelves and move boxes. This seems to be regular and routine in the current system. The Government are spending taxpayers’ money on providing schemes that should help people back to work. I am not sure, however, that there is any intelligent management of the schemes being offered.
It is entirely reasonable for somebody who has been out of work, and has extremely low qualifications, to do a relatively low-skilled mandatory work activity. It is not reasonable if they are seeking to do something else. The Secretary of State is in his place, and he has always been very courteous and helpful in responding to such issues. I ask him and his team to consider how we can significantly improve the quality of mandatory work activity, monitor it better and ensure that we do not send people to do work that, bluntly, will be of no use to them in enhancing their job prospects. Almost nobody wants to be on benefits all the time. People on benefits struggle to make ends meet and we need to do better.
Mr Russell Brown
Is the right hon. Gentleman saying that to impose a sanction over a menial task on a highly qualified individual who may never use those skills again would be wrong?
Simon Hughes
We could have a complicated and long debate. Should people in this House, if they find themselves later in life to be unemployed and it is deemed appropriate that they are sent on mandatory work activity, be sent to work in a charity shop moving boxes and dusting shelves? One could argue that it would be good for us, and good for everybody—
Mr Duncan Smith
I am listening carefully to what my right hon. Friend has to say. As the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Fareham (Mr Hoban), has made clear and my hon. Friend the Under-Secretary of State will make clear, all of these things are kept constantly under review. We want to improve them and that is what jobcentre staff do. They are brilliant at that, by the way, and they get better and better. My point on mandatory work activity is that it is not just work experience. It is also about changing culture: finding out whether someone is working and not declaring it; and getting people used to the idea of getting out of bed in the morning and attending somewhere where they do what they have been asked to do, because they have so got out of the habit of doing that, that even attending an interview has become a problem for them. This is not just about training; it is about getting people culturally back in line so that they can then be dealt with by advisers.
Simon Hughes
I absolutely understand and agree with that point. That is fine for all people of that type. In the case of my last example, the individual had been doing an internship and getting up, always being on time and being there all the time. If anybody had checked, they would have known that he had had a 100% successful record in the previous three months. There was no history of shirking, not getting up or lying in bed. Therefore, it would have been appropriate for an interview to find out about that work history, and assess and discuss what might have been appropriate.
Another constituent—a friend of mine living in Waterloo—had been out of work and claiming jobseeker’s allowance. He went to the jobcentre and was invited for an interview with Seetec, which he attended. It was about to send him to Tesco to stack shelves, but he persuaded it that there was an opportunity of mandatory work activity in a photography shop in the west end. He has photographic skills, and he persuaded Seetec, once it had spoken to the employer, that it would be a better place for him to go. I am not disputing the Secretary of State’s view that some people need to get into the culture of work, but the system fails those who are competent at work, have worked and are willing to do their bit, but get thrown into the wrong place, often to do highly inappropriate activities.
I hope that I have made it clear that I think there are underlying serious issues. I am grateful that the Secretary of State has tabled amendments and new clauses to ensure that this matter does not disappear, but comes back to us through regular reporting. My message to the House and the Government is that we need a better system, because a lot of people who are on low incomes or not working are not being well served by the system at the moment.
Mr Byrne
With the leave of the House, Mr Deputy Speaker, I shall respond to the debate.
We have heard powerful speeches this afternoon from my hon. Friends the Members for Wansbeck (Ian Lavery), for Dumfries and Galloway (Mr Brown), for Slough (Fiona Mactaggart), for Hayes and Harlington (John McDonnell), for Edinburgh East (Sheila Gilmore) and for Easington (Grahame M. Morris) and good speeches from the hon. Member for Banff and Buchan (Dr Whiteford) and the right hon. Member for Bermondsey and Old Southwark (Simon Hughes). This is a day of acute embarrassment for the Government. They have bodged their regulations so badly that they have been struck down by the Court of Appeal, yet not once this afternoon have we heard a word of apology from the Minister for bringing forward retrospective legislation of this type on a timetable so fast that proper scrutiny is constrained. As my hon. Friend the Member for Easington said, not once have we heard even a word of contrition for the position they have put the House in.
Today’s debate has clarified one important point. The core of the Bill concerns the long-standing foundational power of the Department to issue sanctions. We think that the Department should, indeed, be equipped with such a power, but that is not to say for a moment that we subscribe to, or agree with, the programmes that it has built on those foundations. We heard from the right hon. Member for Bermondsey and Old Southwark that the programmes now in place, not least the mandatory work activity, are seriously flawed, are malfunctioning and are not getting people back to work, especially in those communities where unemployment is at its worst.
We will continue to argue that the Government’s back to work programmes need to be improved. Young people should not simply be confronted with the option of mandatory work activity and very little else. We do not believe that the Work programme is delivering. We believe that a better choice would be a jobs guarantee for young people and the long-term unemployed, and that the country could afford it if the Government had the bottle to introduce a tax on bankers’ bonuses and change the pension perks for the very richest. That would go a long way to delivering the kinds of changes that the right hon. Member for Bermondsey and Old Southwark spoke about.
It is important that on the foundations with which we equip the DWP we build good, strong back to work programmes that get young people and the long-term unemployed back to work. We have heard today from my hon. Friend the Member for Dumfries and Galloway, the right hon. Member for Bermondsey and Old Southwark and other of my hon. Friends, including in interventions from my hon. Friends the Members for Birmingham, Selly Oak (Steve McCabe) and for Wirral South (Alison McGovern), about the clear evidence that the sanctioning regime is malfunctioning. That is why the commitment to an independent review of the regime is so important. As the right hon. Member for Bermondsey and Old Southwark said, the system is clearly failing.
We will continue to argue that the review should be put in place, and when it is up and running, we will be leading the evidence gathering to ensure that the House is fully aware of what is going on. We will ensure that there is a clear and loud argument that the back to work programmes in this country should be better and properly financed, and that those who have the latitude to take part in them should be asked to contribute. We want to ensure that more people get back into jobs; that is why we are in the Labour party. That is the argument that we will take to the Government over the course of the next few days.
As my hon. Friend the Member for Hayes and Harlington said, we will not stand by and watch the demonisation of the poor in this country. We will stand up for vulnerable people and for the things they need, and we will stand against the attacks now being perpetrated against them by this Government.
The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)
I want to thank all Members who have taken part in the debate today, and I will answer in turn all the points that have been raised. I also want to thank the Opposition for taking a measured approach in supporting and expediting this important Bill, which will ensure that we are able to give jobseekers the best possible chance to find employment, as well as holding them to account when they refuse to hold up their side of the bargain. By ensuring that the Government do not have to repay previous benefit sanctions to claimants who have failed to participate in employment programmes, and that we can properly impose sanctions for such failures, the Bill will protect the public purse as well as the fundamental principle that jobseekers have responsibilities as well as rights.
I want to clarify the Court of Appeal judgment, on which many points have been made, not all of them correct. Our main point is that the Court supports the principle and policy of our employment schemes. The hon. Member for Wansbeck (Ian Lavery) asked whether they constituted slavery under article 4 of the European convention on human rights. We are pleased to say that the Court of Appeal agreed that there was no breach of the convention.
Esther McVey
I will make some progress, as I have many questions to get through.
I want to offer clarification to the hon. Member for Easington (Grahame M. Morris). The Court of Appeal ruled against the Government on a technical point and we are seeking permission to appeal to the Supreme Court on that point. Contrary to what the Opposition have suggested, a great deal of thought went into drafting regulations that would be flexible enough to encompass a wide range of programmes to support jobseekers. That is key; this is about flexibility for the individual and for the businesses that are taking people on. We want to get more people into jobs than ever before, and that is what we are doing.
Mr Donohoe
The problem in my constituency is that there are no jobs. People can have all the training they want, but they cannot get a job. That is the problem, and it is down to this Government.
Esther McVey
Obviously, the hon. Gentleman will be pleased to hear that the past 11 consecutive months have seen a rise in the number of people in jobs. Of course education, training and work experience are key, and we are doing all we can to help his constituents.
I want to talk about the scrutiny that the regulations went through. They went through the Joint Committee on Statutory Instruments, the secondary legislation scrutiny Committee, and there have been various opportunities for Members to raise objections. That did not happen, however, and the regulations went through. We are seeking permission to appeal against the judgment by the Court of Appeal. This is about communications with claimants, and our view is that it was clear that the claimant received information not only through communication via letter but through meeting and speaking to their jobcentre adviser.
Esther McVey
I want to progress a little further.
There is one voice that we have not heard here today. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) talked about a failing system, but I want to hear the voice of the people who have been on the mandatory scheme. What have they said about it? It is interesting to note that 75% of them said that they believed they were more attractive to potential employers, and that their personal confidence had been increased by attending the programmes. Some 76% said that their ability to work as part of a team had improved; 89% spoke of the benefits of getting into a working routine; and 81% said that they enjoyed their work placement. We should all be listening to those voices, rather than making political points that are not what those people said.
How about the businesses that take people on? What do they say? Many said that the aim was to help people to get a job. That is key. What has come out goes to the nub of the argument. For some, it might have been their first experience of a work environment. We know that is true, because 1.9 million children live in homes where nobody works, so it is vital that they have the scheme.
Mr Howarth
Could the Minister explain how amendment 1 to clause 1, in the name of her right hon. Friend the Secretary of State, takes us any further than where we are today?
Esther McVey
It is to clarify the right to appeal—I did not actually hear the full question.
Mr Howarth
Can the Minister explain how amendment 1 to clause 1, which is in the name of her right hon. Friend, takes us any further than where we are today?
Esther McVey
The right to appeal remains. That is the answer.
Companies said that the mandatory scheme helped not just them but the local community. The hon. Member for Wansbeck said we did not need a Bill. Actually the Bill is required. Slave labour was mentioned, but that is not an issue. Targets were mentioned. There are no targets whatsoever.
We know that jobseekers should have responsibility to take all reasonable steps to increase their chances of finding work. We therefore cannot be in the position where we have to repay benefit sanctions to jobseekers who fail to take all reasonable steps. For that reason, I commend the Bill to the House.
Question put, That the Bill be now read a Second time.
Jobseekers (Back to Work Schemes) Bill
(11 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:43 - The House divided: - Ayes: 263 / Noes: 52 - Question accordingly agreed to.
Mr Hoban
I beg to move amendment 1, page 3, line 11, at end insert—
‘() Subsection (12) does not affect a person’s ability to apply for a revision or supersession of, or to appeal against, a decision to impose a penalty by reference to other grounds.’.
We tabled the amendment as a result of discussions we had with the right hon. Members for Birmingham, Hodge Hill (Mr Byrne) and for East Ham (Stephen Timms), who expressed concern that existing appeal rights might be brought into doubt. The Bill as introduced to the House is clear in its intent. Its provisions refer solely to the consequences of the Court of Appeal and High Court judgments. The amendment, therefore, will have no effect on the overall purpose or intent of the Bill. However, after constructive discussions with the right hon. Gentlemen, we decided to include something in the Bill to put it beyond doubt that a claimant’s appeal rights against a decision to sanction their benefit will remain unchanged in all other matters.
The clause sets out that any decision to sanction a claimant for failure to comply with the employment support allowance regulations or the mandatory work activity regulations cannot be challenged on the ground that the regulations are invalid or that the notices given under them are inadequate, notwithstanding the Court of Appeal’s judgment. In practice, claimants will retain full appeal rights on matters where a sanction has been imposed but they feel that they had good reason not to comply with the requirements of the scheme—for example, if they failed to attend training because of illness of a family member or one of the other standard reasons set out in either regulation or guidance around good cause. However, claimants will not be able to appeal against a sanction decision on the ground of the High Court or Court of Appeal judgment.
I hope that the amendment meets the concerns of the right hon. Member for East Ham and that there is support for it on both sides of the Committee.
Stephen Timms (East Ham) (Lab)
The Government have got themselves into a terrible mess. As we heard, they ignored the advice of the Social Security Advisory Committee—that appears to be a significant part of what went wrong—but I welcome the amendment, because a straightforward reading of the Bill might, and indeed does, suggest that if one is hit, perhaps in particular by one of those stockpiled sanctions, that will be it.
I am grateful to the Minister and the Secretary of State for tabling the amendment, which helpfully clarifies—puts in the Bill—the fact that normal opportunities for reconsideration and appeal apply, but I want to ask the Minister about two points. I would be grateful for his comments on them during his winding-up speech for what I imagine will be a brief debate.
Some of the stockpiled sanctions, which we read about in the impact assessment, relate to events of quite a long time ago—up to eight months, which could be the beginning of August. I would like to know, because it is not entirely clear to us, whether all the 63,000 people affected by stockpiled sanctions already know that they have a sanction on the way. If, for example, they enter work straight after receiving a sanction that is in the stockpile, and so receive little benefit after the sanction is imposed, presumably the amount to be reclaimed from them will be very small. I ask for clarity. Is the intention, in taking the sanction out of the stockpile and applying it, that people’s benefits will be stopped for the appropriate period, or is it— [Interruption.]
The Temporary Chair (Mr Jim Hood)
Order. I hear ringing. It has now stopped. Carry on, Mr Timms.
Stephen Timms
Is it the Government’s intention to reclaim cash? Clearly, we are in a rather different situation from the one that obtains when somebody is sanctioned in the normal course of events, because the events to which the stockpile sanctions relate could have taken place a considerable time ago. How will the Department explain to those affected what is happening and what the effects will be in cases where a lengthy period has elapsed between the events that gave rise to the sanction and the application of the sanction, following the enactment of the Bill?
Will the Minister give us a little more explanation about one of the points raised on Second Reading, for example by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams)? The advice that we all received from the Child Poverty Action Group made this point:
“Contrary to Government claims, it is not obvious that DWP would have to repay sanctioned benefits to all claimants, so the £130 million potential loss stated is inaccurate: the Government already has anti-test case law rules which would prevent it having to repay anything for sanctions served prior to 6 August 2012.”
Will the Minister clarify the advice that he has received, which I have no doubt is different? If that view had been taken, the Bill would not be necessary.
I can well understand why the Child Poverty Action Group has reached its view. Section 27(3) of the Social Security Act 1998 relates to court decisions like the one reached in the case that gave rise to the Bill, and it reads as follows:
“In so far as the decision relates to a person’s entitlement to a benefit in respect of a period before the date of the relevant determination”—
in this case, the Appeal Court’s determination—
“it shall be made as if the adjudicating authority’s decision had been found by the Commissioner or court not to have been erroneous in point of law.”
A natural and straightforward reading of that paragraph could well lead to the conclusion reached by the Child Poverty Action Group, which is that anti-test case law rules prevent the Department from having to repay anything for sanctions scored before the court determination. I presume, as I said, that the Minister has received contrary advice on that measure, and it would be helpful if he explained what the advice was and therefore why the Bill is before the House.
Mr David Anderson (Blaydon) (Lab)
If the CPAG advice is correct, does my right hon. Friend have any idea by how much the £130 million could be reduced?
Stephen Timms
My hon. Friend asks a good question, and the answer is in the impact assessment that the Government have produced, which distinguishes between the amount that would be incurred because of people who were sanctioned before 6 August 2012 and the amount incurred in respect of people sanctioned since the court case, because those sanctions have been stockpiled.
The part of the impact assessment that contains those figures says that, by the look of it—to take the upper valuation—£24 million out of £130 million relates to sanctions that have been stockpiled. The CPAG view would be that of the £130 million, £106 million or £107 million would not apply, because of the Social Security Act 1998, whereas £24 million—the stockpiled sanctions—would. As I said, I am sure that the Department’s advice is different from the advice given to us by the CPAG, but it would be helpful if the Minister provided clarification so that we know the basis on which the measure has been introduced.
I would say again to the Minister that this is a helpful amendment. I do not think that it changes the position substantively, but it helps to clarify it, and to make it clear that anyone who will be presented with a stockpiled sanction will, as usual, have the opportunity to ask for a reconsideration and perhaps subsequently to appeal. That is a welcome clarification, and I am grateful to the Minister for providing it, but I would be grateful, too, if he commented on the two specific matters that I have raised.
Mr Hoban
The right hon. Gentleman has made a couple of points. In respect of payments where decisions have been stockpiled, when we received the High Court judgment, we did not proceed to make any further sanctions decisions, but claimants who were subject to a stockpiled decision are aware of that: we made it clear at the time, so they know what to expect. However, he asked whether we would recover sanctions from those who are in work now. The answer is no, we would not. That is a policy that we adopt elsewhere. We want to encourage people to do the right thing, and doing the right thing in this case is getting back into work.
The right hon. Gentleman then raised the note circulated to Members of Parliament by the CPAG. I touched on that point in opening the debate. Section 27 of the Social Security Act 1998 applies only when a challenge is brought by way of an appeal to a court or tribunal. The Wilson/Reilly case began with an application for judicial review, and on that basis, section 27 does not apply. With that, I hope that the Committee will approve the amendment.
Amendment 1 agreed to.
Clause 1, as amended, ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
New Clause 1
Report
‘(1) The Secretary of State must appoint an independent person to prepare a report on the operation of the provisions relating to the imposition of a penalty during the period of a year beginning with the day on which this Act comes into force, so far as that operation relates to relevant penalties.
(2) The person must complete the preparation of the report and send it to the Secretary of State as soon as reasonably practicable after the end of the period mentioned in subsection (1).
(3) On receiving the report, the Secretary of State must lay a copy of it before Parliament.
(4) In this section—
“penalty” means a penalty that may be imposed for—
(a) failing to participate in a scheme within section 17A(1) of the Jobseekers Act 1995, or
(b) failing to comply with regulations under section 17 A of that Act;
“relevant penalty” means a penalty that, but for section 1 of this Act, would not be or would not have been lawfully imposed on a person.'.—(Mr Hoban.)
Brought up, and read the First time.
The Temporary Chair (Mr Jim Hood)
With this it will be convenient to consider the following:
Amendment (a), in subsection (1), leave out 'a year' and insert 'six months'.
Amendment (b), in subsection (2), leave out
‘as soon as reasonably practicable'
and insert 'within three months'.
Mr Hoban
The new clause provides for a report on the operation of benefit sanctions affected by the provisions of the Bill. Again, I thank the right hon. Members for East Ham (Stephen Timms) and for Birmingham, Hodge Hill (Mr Byrne) for their constructive approach to the Bill. We discussed this topic with them as we drew up the Bill. After our discussions, we decided to bring forward the new clause to satisfy the concerns of the right hon. Member for East Ham to provide for an independent report on the operation of benefit sanctions subject to the provisions in the Bill.
The new clause requires the Secretary of State to appoint an independent person to prepare a report on the operation of the provisions relating to benefit sanctions during the first year after the Bill has come into force. The report must be prepared as soon as reasonably practicable after the end of that period.
Subsection (3) requires the Secretary of State to lay a copy of the resulting report before Parliament, which meets the right hon. Gentleman’s requests. It is important to say that as a Department, we keep the functioning of sanctions under review. A number of comments on that were made on Second Reading. It is important to ensure that sanctions are applied fairly and consistently across Jobcentre Plus. It is an important part of the regime, so the sanction should be credible, and something that we keep under review.
Let me pre-empt the arguments made by the right hon. Member for Wythenshawe and Sale East (Paul Goggins). I understand the purpose of his two amendments. He is keen to ensure that the review is expedited, and we will try to complete it as quickly as possible. The time period for someone to launch an appeal against the sanction is 13 months. By imposing a six-month deadline, we might miss appeals that are made at a later point. He then requires a report to be laid within three months of the end of the six-month period, so that is nine months. There is a risk that we will miss out on three months’ worth of appeals, so we would not necessarily get a full view of how the sanctions under the Bill have operated. Although I understand his arguments for haste, may I suggest, as a counter argument, that we take things at a slightly more leisurely pace, which will ensure that we get a full year? None the less, I share his view that once we get to the end of that year, we should be moving as quickly as possible to complete the review and to lay the report before Parliament. It is not in any of our interests unduly to delay a measure such as this. I commend new clause 1 to the Committee.
Stephen Timms
I warmly welcome the new clause which, as the Minister has said, was proposed and suggested in the discussions between him and the Secretary of State for Work and Pensions, and me and my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne). It is something genuinely valuable to emerge from this debacle, which has been entirely of the Government’s own making. We do need to know what is going on with sanctions. The independent review, which is required by the new clause to be conducted over the coming year—I will comment in a moment on the further amendments proposed by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins)—could be crucial in getting to the bottom of what is going on. From the standpoint of anyone who is concerned about what is going on in our social security system, as very many people are, this is a valuable initiative.
The scale of the sanctions that are being imposed at the moment is extraordinary. My hon. Friend the Member for Hayes and Harlington (John McDonnell) made that point in the earlier debate. He correctly suggested to the House that the number of sanctions being issued trebled in the two years between the period just before the general election and subsequently to more than half a million per year, and that number is still going up. The impact assessment tells us that the number of sanctions that has been issued under the defective—as we now know them to be—employment, skills and enterprise regulations is “between 221,000 and 259,000”; that those sanctions involved between 136,000 and 159,000 people and that their cumulative value is between £80 million and £99 million.
Bob Stewart (Beckenham) (Con)
I am slightly confused. The right hon. Gentleman said that when people get sanctioned, they have no idea why, but I would have thought the first thing they would do, if they did not get a letter or a warning about this, would be to go straight to Jobcentre Plus and ask, “Why is this happening to me?” Why does that not happen?
Stephen Timms
The hon. Gentleman raises an interesting and telling point. Why, indeed, do people not go to jobcentres to get an explanation? The reason is that it is very difficult for them to get through on the telephone, and if they do go and speak to somebody, they probably do not get a clear explanation.
The Minister said in one of our recent statutory instrument Committees that Jobcentre Plus will now inform people in writing of the reason for their sanction. When the Minister responds, he will, perhaps, give us a little more information. I am not sure whether that has already started or whether it is still due to happen, but it will certainly be a welcome step. The hon. Member for Beckenham (Bob Stewart) will be very familiar with the experience that I have often come across, however, which is that people do receive a letter from Jobcentre Plus, but, frankly, making sense of it is very difficult. I hope that the written explanations people receive will make more sense than some of the other communications they bring to our surgeries, sent to them by jobcentres and the Department.
I want to set out 10 questions that I think the independent review should answer. Other Members may have other questions, of course, but I consider these 10 to be important, and putting them on the record will serve to give some terms of reference from the House for the independent reviewer.
First, we need to know the precise figures. It is not good enough for us to be told that the Department has issued between 221,000 and 259,000 sanctions. We need to know precisely how many have been imposed. We also need to know what exactly they are for. Is it that people are failing to turn up to appointments, or that they are failing to do the work-related activity they are required to do? We need to be given some clear categories of the grounds for sanction, and then to be told how many of the sanctions imposed fall into each of those categories. How tough are those sanctions? How many maximum three-year sanctions for the basic element of jobseeker’s allowance have been imposed so far? In the recent debate on JSA regulations, a colleague rightly reaffirmed our opposition to the three-year sanction introduced by the Government. It would be useful to know how many people have so far been denied benefit for a full three years, which the Government’s legislative change now makes possible.
Secondly, we need to know how many people on whom the sanctions are imposed request reconsiderations —the kind of people who, as the hon. Member for Beckenham suggests, might go along to the jobcentre and ask what the sanction arises from. How many people have asked for reconsideration, and when it has been refused, how many subsequently appealed? What are the outcomes when reconsiderations are requested and appeals made?
Thirdly, we need the independent reviewer’s opinion on whether the reconsideration and appeal process is working correctly and properly. When people have a sanction imposed on them, do they know that they can apply for reconsideration and, if they are not happy with the outcome, submit an appeal? Is that whole process working correctly?
Fourthly, how many of those being sanctioned are on employment and support allowance—and perhaps other benefits as well—rather than JSA? Ministers have given commitments during debates in this House and the other place that they will not normally issue sanctions to somebody on ESA—somebody who is out of work on health grounds, for example—other than after a face-to-face discussion with the applicant and, if necessary, a home visit. We need to know from the independent reviewer whether those assurances are being honoured in practice. It does not require much imagination on the part of Members to realise that it may well be wholly inappropriate to impose a sanction on someone who is on ESA as a result of a serious mental health problem or a fluctuating health problem of the kind we have often debated in the past couple of years, thereby removing their benefit for the potentially very long periods that are now permissible, unless they have had a proper face-to-face discussion with an appropriate Jobcentre Plus official. It would be helpful if the independent reviewer answered that question.
Fifthly, it would be useful to know how many of the large number of sanctions being imposed are being initiated by a Work programme provider rather than Jobcentre Plus. As I understand it, the initial step can be taken by either, or by another kind of provider on one of the other schemes. It would be useful to know what the split is.
I appreciate that it is not going to be easy for the independent reviewer to find the answer to my sixth question—it relates to the point the hon. Member for Beckenham made a few minutes ago—but we need to know it. To what extent do people understand the reasons for the sanctions being imposed on them? As I mentioned earlier, food banks are reporting that people who turn up, having been sanctioned—who therefore do not have any money and cannot buy food for themselves and their families—commonly do not know why the sanction has been imposed. I hope that the independent reviewer can establish how widespread a problem that is. If it is widespread, as anecdotal evidence suggests it may well be, that is a serious difficulty with the system.
The seventh question concerns the extent to which managers are promoting sanctions. In answering an intervention from my right hon. Friend the Member for Birmingham, Hodge Hill on Second Reading, the Minister gave a very clear assurance that there are no targets for sanctions and that Ministers and managers do not require specific targets to be fulfilled.
Paul Goggins
It is a pleasure to follow my right hon. Friend the Member for East Ham (Stephen Timms), and I say to him and other right hon. Friends on the Front Bench that if new clause 1 has emerged from their discussions with DWP Ministers, the Bill has provided at least one bit of good news. I commend them for their efforts.
In listing 10 questions, my right hon. Friend has done the Committee a great service because one thing missing from new clause 1 is any mention of terms of reference—if I had been a bit quicker this afternoon, I might have included that in the amendments standing in my name and those of my hon. Friends. My right hon. Friend’s questions give the work of the independent reviewer a good starting point, and I say to my Front-Bench colleagues and the Minister that I know time is pressing, but if it were possible—perhaps even before deliberations in the other place—to draw up draft terms of reference based on my right hon. Friend’s 10 questions for the other place to consult on when debating the Bill, that would be helpful.
I will not go through each of my right hon. Friend’s 10 points because he spoke eloquently about them, but, of course, the numbers and quality of decisions are important. His question—I think this was point No. 7—about how people are surviving when they have been sanctioned and have no income is relevant and an issue on which Members of Parliament from all sides of the House will increasingly have to focus in the weeks and months ahead.
Let me say at the outset of my short contribution that I am in favour of, and not opposed to, sanctions. If we offer something to young people and others who are out of work, we need effective sanctions to back that up. Unfortunately, however, at the moment we do not have a proper offer for young people and others who are out of work, and that is part of the problem. It is important for sanctions to be fair and lawful, yet we heard in earlier debates this afternoon that the Court found the regulations and notice to be unlawful, which is why the Government have introduced this Bill.
My right hon. Friend mentioned the large numbers of people who are being sanctioned. All hon. Members know from their work in their constituencies of the increasing number of sanctions cases. We take a view on how fair or unfair those sanctions are, but I increasingly question the quality of decisions. A number of my hon. Friends have referred specifically to representations they have made to the Department for Work and Pensions on looking at decisions again because they were plainly unfair. In many cases, the decision is overturned, because any common-sense look at them would tell us that the decision was wrong. There are serious questions to be asked about both the quantity and the quality of sanctions. It is important that the review takes place—it is a welcome concession in the discussions between those on the Front Benches.
Bob Stewart
I have dealt with lots of soldiers in my life, some of whom are not very literate. One thing that always frightened them was letters. I have a feeling that people get sanctioned because they ignore the letter that comes through their letterbox and are frightened to open it because of the consequences of doing so. In one or two cases even in my constituency, which is relatively wealthy, people have ignored letters, and are therefore sanctioned because they are fearful of opening the envelope. When they have nothing, they need to try to get money. Sadly, people might try to get money by turning to crime.
Paul Goggins
Once again, the hon. Gentleman, for all his seniority in his earlier career, demonstrates great sensitivity to his constituents and others and he has done so before in debates in which I have been involved. I put it to him that people will increasingly have to apply for their benefits online, which could involve them utilising skills with which they are unfamiliar. There are difficulties with that. The hon. Gentleman speaks eloquently.
In pre-empting some of my remarks, the Minister was correct that I should like to inject some urgency—I reassure my right hon. Friend that I seek not a slapdash, hasty report, but urgency. I will listen carefully to the Minister when he responds to the debate in deciding whether to press the amendments to a Division. I want urgency from him—he gave one or two encouraging signs but I should like him to go further.
Amendment (a) calls for “six months” rather than “a year”. The Minister pointed out that the number of cases in six months might be limited, but there would be a number of cases of public interest, and they ought to be evaluated. My right hon. Friend suggested an interim report after six months, which might be a reasonable compromise—there would be a full report in a year but an interim report after six months, so that Parliament and the public can see how the inquiry is going, the kind of evidence that comes out and the quality of decisions. The report could then be completed within a year. I am thinking about that, because if we have a compromise, the measure would be urgent but allow sufficient time for the quality of investigation required.
I have a difficulty with new clause 1, which I am seeking to correct in amendment (b). New clause 1 states that the report should be sent
“to the Secretary of State as soon as reasonably practicable”.
All hon. Members have experience both in Parliament and elsewhere of how soon “reasonably practicable” is. With the support of my right hon. Friend the Member for Knowsley (Mr Howarth) and my hon. Friend the Member for Halton (Derek Twigg), I am trying to put a time limit on “reasonably practicable”. I am not saying that the time limit must be three months, but suggesting that it ought to be “within three months”. This is an urgent matter, because decisions are being made that are questionable in many cases and unlawful in others. The Minister has to indicate clearly what
“as soon as reasonably practicable”
means. We have to have a clear end point to this process.
Derek Twigg
New clause 1 presents an opportunity. I congratulate my right hon. Friends on the Opposition Front Bench on getting it agreed with the Government, but of course there are weaknesses and flaws that my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) has outlined.
There are genuine concerns, based on constituency surgeries, telephone calls and e-mails, about people being wrongly or unfairly sanctioned. I quoted a case in which the benefits of a constituent who attended the funeral of a brother were stopped. I contacted the DWP and got that changed, but it should never have happened. There are other cases that cause great concern. People who can work should work, and should be helped to do so. Clearly, it would help if there were more jobs around for people to get into work in the first place. That is an issue in areas such as mine and elsewhere, but if someone persistently, and for no good reason, refuses to take a job or look for one, sanctions should apply. However, in a number of instances sanctions are being operated unfairly.
Mental health is a matter of particular importance. We say a lot on the Floor of the House about how we want to support better those who suffer from mental health problems, and how the system should take the issue more seriously. From the evidence that is presented to me in the surgeries in my constituency, this is one area where the decisions taken to sanction people are particularly hard. Mental health affects a range of people, but particularly young single men. I have concerns about how the system works, and how those with mental health issues are sanctioned and given penalties. It is important that the review process takes this serious matter into consideration, and the Government need to provide some impetus to that.
I visited a food bank in my constituency recently. There are a growing number of single men using the food bank—they are struggling to survive. There are referrals from jobcentre plus for people who need food to be able to continue. It is a concern that people who have no money are receiving penalties. What do the Government think should happen then, particularly for those who have mental health, family or social problems? The hon. Member for Beckenham (Bob Stewart) made a point about illiteracy. In the poorer areas of the country, in constituencies such as mine, there are still significant problems relating to illiteracy, because people have poor reading or writing skills, or perhaps cannot read. That impacts on people’s ability to interact with the system and unfairly works against them. Whether they are former soldiers or other people, it is a problem that has not been properly addressed. I hope that the review will consider that as well.
I am concerned about the time scale, which is why I put my name to the amendments tabled by my right hon. Friend the Member for Wythenshawe and Sale East. I accept what the Minister said—that this has to be done properly—but I see no reason why an interim review could not be carried out. We need to get to the bottom of this, because every day people are being unfairly penalised. We need to look at the system and get it changed as quickly as possible. The terms of reference of the review are also crucial, so I hope that the Minister will bear it in mind, when the Bill goes to the Lords or on another occasion, that we need to see, and have some input into, the terms of reference. I feel strongly that the review will be an important part of our consideration of the whole system.
I hope that the Minister will consider those problems. We are here because the Government got the legislation wrong, as they have got it wrong elsewhere on welfare—for example, we know of disabled children whose families are affected by the bedroom tax, on which the Court of Appeal ruled. The Government are getting these things wrong, and the most vulnerable people in our society are suffering as a result of the mistakes in the Government’s welfare policy. I hope that they will reconsider some of these issues and how they want to proceed.
Andrew Miller (Ellesmere Port and Neston) (Lab)
I want to begin by commenting on the remarks made by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) to the hon. Member for Beckenham (Bob Stewart), whom I have known for 20 years, since he returned from Bosnia with the Cheshire Regiment. People whom he and I know personally are among those described today. The soldiers damaged by the dreadful events that he recorded in his well-known book are real people, and some of them live in my constituency. They are the kinds of people on whom we should try to focus our humanity.
We must admit that there is an enormous lack of clarity in the regulations governing the system. That is the fault of successive Governments and has built up over many years, as things have got more and more complex. Faced with that complexity, someone with a learning difficulty or who is mentally scarred might respond illogically—I think, for example, of the person who leaves the envelope behind the clock in the hope that it will go away. We have to deal with this matter seriously, therefore, and separate those people from the people the Minister is rightly targeting—there is no dispute between the parties on that.
Bob Stewart
I thank the hon. Gentleman, who has been a friend of mine for a long time, for giving way. One problem is that people who are hurt, mentally scarred or not as bright as they might be need a friend to go with them to Jobcentre Plus. They need a neutral umpire to help them. I just wish we could get that a bit better.
Andrew Miller
If we developed this too far, Mr Hood, I would be outwith the scope of the amendment, but the hon. Gentleman is very perceptive and makes the point about people not understanding the documents or conversations they have had.
To move this forward we need to inject a degree of urgency. I understand the points about the time frame, but I nevertheless think we ought to look at this matter carefully.
My right hon. Friend the Member for East Ham (Stephen Timms) has outlined the framework for a set of terms of reference, and I hope we can agree on that and invite the Department to start gathering the necessary statistics and information to respond to some of the basic questions, so that the independent reviewer can be well equipped with solid information when he or she starts the job. That could provide a practical way of producing a review sooner than after the envisaged 12 months.
Having recognised that that might be difficult to achieve, however, we ought to consider a fallback position that gives the framework of the terms of reference an extra dimension, to enable the reviewer to start reporting on the information as and when it becomes clear. If we approach the matter in that way, we will inject some urgency into the situation and get people to realise that there is acceptance across the House that we are trying to separate the genuine cases from those that are less solidly based. Let us ensure that we target the benefits on the people who ought to get them.
I urge the Minister, in considering the amendment tabled by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins)—to which I have belatedly put my name—to think about the arguments that have been presented and to agree to an early set of terms of reference before coming forward with a sensible time frame that will enable us to achieve the goals that Members on both sides of the House want to achieve.
Fiona Mactaggart
I want to follow up on some of the issues that have been raised. I recently asked the Minister how many people had had sanctions imposed on them. He revealed that 540,610 sanctions relating to jobseeker’s allowance had been applied last year. In the same answer, he told me:
“Statistics on how many such people speak English as a second language; and how many such claimants had moved to jobseeker’s allowance from income support or disability-related benefits are not readily available and could be provided only at disproportionate cost.”—[Official Report, 11 March 2013; Vol. 560, c. 103W.]
Those are examples of the vulnerable groups that Members on both sides of the House have been talking about.
I want to support the amendment tabled by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) on the speed of the proceedings, but I also want to add another question for the reviewer to consider. Shortly after I had tabled that question, I asked the Minister about assaults on jobcentre staff. If we compare the period from October 2012 to January 2013 with the period a year earlier from October 2011 to January 2012, we see that the number of assaults on jobcentre staff increased from 76 to 98. The seriousness of the assaults increased as well. In the first period, there were three that resulted in cuts and bruises, and three that resulted in more than cuts and bruises. A year later, 13 had resulted in cuts and bruises, with eight resulting in more.
I fear—although I do not know for certain—that those increases in assaults on jobcentre staff are a product of frustrated claimants who have been sanctioned. It has been pointed out that they do not always know why they have been sanctioned. If the sanctions regime is resulting in this kind of behaviour—as I have said, I do not know whether that is the case—it would be appropriate for a reviewer to consider whether the regime has consequences for the safety of jobcentre staff. If there are consequences for the safety of the people responsible for giving claimants explanations, their explanations might become less clear and they might retreat behind letters rather than actually talking to people.
I should be grateful if the Minister assured the House that such issues will be included in the review. I fear that if they are not, vulnerable claimants will not get the service they need.
Mr Hoban
We have had a helpful debate on the review. I note the comments of the right hon. Member for East Ham (Stephen Timms)—I think he actually asked 11 questions, but I will allow him an extra one. The scope of the review is set out in the new clause. I take the point about the terms of reference, but we have set out the area that the review will cover.
My memory is not bad, and I recollect that the right hon. Member for Wythenshawe and Sale East (Paul Goggins) was a Minister in the previous Government so he should know what “reasonably practicable” might mean; I am sure he has probably used the phrase.
Paul Goggins
It was precisely some of the experience I was reflecting on that caused me to make the comment.
Mr Hoban
The sinner has repented on this occasion.
Let me be clear. I want the review to proceed as quickly as possible. It is in all our interests for it to do so. I am keen that we improve the quality of decision making on sanctions and that we ensure that they are applied consistently. The right hon. Member for East Ham was right to highlight the fact that my right hon. Friend the Secretary of State made it clear that there should be no targets, and that if there was evidence of targets being used at any jobcentre, we would stamp them out. We do not want targets; we want good quality decisions made consistently from jobcentre to jobcentre. I do not think targets have a role to play in that regime. [Interruption.] The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) laughs. Is he saying we should have targets? I suspect not.
Mr Hoban
Given that my right hon. Friend said that he would stop the practice, we would stop it again if it reappeared. We do not want to see it happening.
I want to pick up on some of the points raised in the 10 or 11 questions put by the right hon. Member for East Ham. We have published, and will publish annually, tables setting out the number of sanctions. The data for 2011-12 were published online on 15 August 2012, and we gave a breakdown of sanctions, so it is not correct to say that there is no information. There were 108,000 variable length sanctions for employment-related failures; 378,000 sanctions were of fixed length, which included 58,000 that were for not attending ESE—employment, skills and enterprise—regulation schemes, 55,000 for not complying with training requirements or for not carrying out a jobcentre’s direction or for a failure to participate in mandatory work activity.
The reason there is a range in the impact assessment is that we were trying to be helpful to the Committee. We used a combination of official statistics and an estimate based on management information to give Members an up to date figure of the numbers involved. The final numbers will be available when we publish the next official statistics. Having been a DWP Minister, the right hon. Gentleman will appreciate that we take the validation and verification of statistics seriously. These are official national statistics and they need to be published to appropriate quality. That is the basis for the numbers in the impact assessment.
Communication is really important, and we need to ensure that we get it right. We talked about some of the measures that we set out in the recent regulations to ensure clarity in universal credit. There is a challenge here. We want to ensure that communications between the Department and jobseekers are clear, whether they are oral communications between a personal adviser and a claimant, or items of correspondence. But I think there is a tension here. The hon. Member for Slough (Fiona Mactaggart) said in her Second Reading speech that she felt that the notice we sent out was defective, and the courts said the letter should have contained more detail about the sanctions regime.
Mr Hoban
Absolutely, but the hon. Lady repeated that, and by virtue of the quote I think she was supporting their view. Another hon. Member said that people “may be” sanctioned. I think there is a tension here between clarity and disclosure. The more detail there is in the letter—maybe to comply with what is in the law—the harder it can be for people to understand what is in the letter. It is possible to go into lists, as the right hon. Member for Birmingham, Hodge Hill did—to list a whole set of “good cause” reasons in a letter. One could put in a letter every detail of the graduated sanctions regime. We need to ensure that our communications are very clear and legal; sometimes the two do not go as easily together as we would like them to, but we do need to ensure that there is clarity.
The right hon. Member for East Ham talked about what happens if people are sanctioned, and then immediately answered his question by referring to hardship schemes. He and I have debated the revised sanctions regime and discussed hardship at length, as we did on a previous occasion with the right hon. Member for Stirling (Mrs McGuire). There is a hardship scheme in place for people, and it is right that it is there. We do ask people to look to see whether there are any other ways in which they could find financial resources to live off, and that is very carefully set out in the Bill, but those hardship schemes are available. It would be wrong to give anyone the suggestion that there is no hardship scheme in place, but the rules on access are very tight indeed.
Stephen Timms
I take entirely the Minister’s point about the hardship schemes, but I wonder what he thinks has driven the huge increase in the number of people referred to food banks over the past three years—a tenfold increase between the year just before the general election and the current financial year. I wonder whether he can understand why many of us think that the growth of sanctions must have been a big part of the driver.
Mr Hoban
The practice of the Government the right hon. Gentleman was a part of when he was a Minister in this Department differed from that of the present Government. When the Labour party was in power, it refused to have any material in jobcentres about food banks, to try to deny their existence. It did not refer people to food banks. We decided, when we came into office, to reverse that policy—to ensure that people were aware that food banks were in place.
People do go to food banks. They go for a variety of reasons. It is right for there to be a hardship regime in place for sanctions. If people do not choose to apply for that hardship regime, that is their choice, but people know it is there.
Stephen Timms
The Minister is right about the hardship regime, but he is surely not trying to tell us that the number has gone up from 30,000 to 300,000 because there are some leaflets in jobcentres, is he?
Mr Hoban
Well, actually it is not about leaflets. It is about signposting people to food banks. The right hon. Gentleman and his Opposition colleagues forget the way in which they tried to airbrush food banks out of history when they were in government, and to use them now as political pawns is beneath them.
I hope that the Committee will accept new clause 1. As I said in response to amendments (a) and (b) tabled by the right hon. Member for Wythenshawe and Sale East and his colleagues, we want to ensure that the Bill proceeds as quickly as possible; I do not think there is any interest in spinning it out. But we do need to ensure, as the right hon. Member for East Ham said, that it is properly and thoroughly considered. As a consequence of a measure introduced by the previous Government, we have an independent reviewer of work capability assessments. That is a very thorough process and no corners are cut, neither would we want them to be. It is helpful that there is clarity.
Paul Goggins
I know from other dealings with the Minister that if he says he wants something to happen urgently, he will get on with it—I accept his word in good faith. However, one matter he has not dealt with is the clear commitment to get on with it as a matter of urgency. My amendment proposes six months and my right hon. Friend the Member for East Ham (Mr Timms) suggested an interim report. There seems to be a coalition of ideas, and I press the Minister to indicate that he is prepared at least to consider that seriously.
Mr Hoban
I do not want to end up getting stuck in a laborious process of issuing interim reports when I would much rather let the reviewer get on with the job. As a former Minister, the right hon. Gentleman will know that just getting interim reports out of the door can be time consuming. I would rather let the reviewer focus on good recommendations and good analysis instead of bogging him down in a bureaucratic process that will not benefit any of us. I take on board the right hon. Gentleman’s comments, but in the interests of expedition and speed an interim report would slow the process rather than accelerate it.
The Temporary Chair (Mr Jim Hood)
Mr Goggins, you did not inform the House whether you wanted to move your amendment formally, or withdraw it.
Paul Goggins
I hope that the Minister will continue to give my amendment careful consideration, but I do not want to press it to a vote.
Question put and agreed to.
New clause 1 accordingly read a Second time, and added to the Bill.
The Deputy Speaker resumed the Chair.
Bill, as amended, reported.
Bill, as amended in the Committee, considered.
Third Reading
Mr Hoban
I beg to move, That the Bill be now read the Third time.
We have had short but helpful debates on Second Reading and in Committee. I want to reiterate briefly and in a workman-like way that the Bill is vital to protect the proper functioning of the benefits system and to safeguard the public purse. I thank Opposition Front-Bench Members for the constructive way in which they have engaged with us on the Bill, and I hope that they believe that our amendment and new clause reflect their concern. I commend the Bill to the House.
Stephen Timms
This Bill has been an extraordinary fiasco. It is here because the Government made basic errors in drafting regulations. The danger was highlighted by their own Social Security Advisory Committee, which Ministers ignored. They were wrong to do so, and the consequence is the necessity for this unseemly piece of legislation. The question facing the House this evening is: what do we do? The alternatives to the Government’s proposals are pretty unappealing.
The danger of having to take £130 million from another part of the Department’s budget is that the cost will fall on people whose income is already very low. I was very grateful for what the Minister said a few moments ago to explain the necessity for the Bill and why the so-called test case rules do not apply in this case. The alternative is unappealing for that reason. In addition, if the correction were not made, there would be quite a fundamental breach of the jobseeking system, which was used so effectively by the previous Government to achieve—before the global crisis—the highest rate of employment in the UK since the 1970s. That is a rate of employment we are still some way short of today. That system involves sanctions. As my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) pointed out, the system has done so since 1911, and it is right that it should continue to do so.
I shall certainly not urge my hon. Friends to oppose the Bill, but we have argued for a fundamentally different approach to supporting people into employment from that taken by the Government—one based on job guarantees—but it requires an effective system, which not passing the Bill would put at risk. We think that the guarantees approach is the right one, and the recent evaluation of the future jobs fund has strengthened our convictions in that respect, but we need a proper system in place to be able to introduce that arrangement quickly. Following a general election, it is our intention very quickly so to do, and for that reason I shall not urge my hon. Friends to oppose Third Reading.
Dr Whiteford
I do not intend to detain the House for long, but it is worth reiterating the point I made on Second Reading, which is that people deserve a fair day’s pay for a fair day’s work. Throughout the afternoon, we have heard from a number of hon. Members the shortcomings of the Government’s Work programme and the failings of the rather blunt instrument that is the sanctions regime, but I have consciously refrained from going down the route of discussing those in detail, because the key issue is those sanctions that have already been found by the courts to be unlawful and whether it is right retrospectively to shift the legislative goalposts to penalise people who have been unlawfully sanctioned. I do not think that that is in any way justifiable, and nothing I have heard today has reassured me on that point.
The Government have had an opportunity today to hear concerns from Members on both sides of the House about the problems with unpaid labour in the sanctions regime. Even at this late stage, I urge Ministers to think again and take responsibility for the mistakes that have been made and to step back from a scheme that relies on unpaid labour. It is not helping people to find real jobs, it is actively preventing real job creation and it is undermining efforts from people in the voluntary sector and elsewhere, which are more likely to be effective in helping people who are a long way from the labour market to move into paid employment.
It is never reasonable to insist that people work for no pay. That is not sustainable and it just is not working. Although the debate has been heavily undersubscribed, with fewer than half the Members of the House turning up to vote on Second Reading, it has certainly received a lot of attention out there, and I am sure that I am not the only Member who has received lots of correspondence from constituents who are concerned about the underlying principles and who can see the inherent injustice of the proposition.
I hope that Members who share my conviction that these measures are unworkable, unfair, profoundly regrettable and retrospective will join me and my colleagues in opposing them.
Mr Frank Field (Birkenhead) (Lab)
I would like to congratulate the Government on their incompetence with the Bill. I would like to say that these are measures that a future Labour Government would support, but differently. We would have a human face to our approach, unlike this Administration.
First, let me deal with the point about incompetence. These are fairly simple regulations compared with what the Secretary of State is preparing for the nation with his universal credit. If the Department cannot get these regulations right, what hope for universal credit?
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I am listening to what the right hon. Gentleman has to say, but it sounds a little rich coming from him. From his time in government, he and others well know that sometimes the view of judges is very different from a lot of other legal advice. The reality is that by saying that this is incompetence he must be claiming that his own Government were deeply incompetent throughout their time in office.
Mr Field
Well, if that is true, this Government have learnt nothing from our experience, so it is doubly worrying. Universal credit, which the Government are going to deliver, is an immensely complicated reform and if they feel that— [Interruption.] The Secretary of State says not true. Should the day ever arrive when universal credit began to be delivered, we would all be in a position to judge. However, these are arguments for another day. Let us congratulate the Government on their incompetence and their need to come here and seek out support to rectify the errors made in the Department.
The second issue is important. We are dealing with an attitude of mind whereby there is a feeling that, even without ever making a contribution, a person has a right to benefits and to a pension from other taxpayers. That attitude is now deeply ingrained in our culture, and the Secretary of State’s welfare reforms and universal credit will encourage it. Under his scheme, more people will think they have a right to benefits than do now. Many of us, even those in areas with high unemployment, know that there are people, particularly young people, who feel that unless they will be offered jobs at three times their benefit level, it is not in their interest to work. That is why it is so important to change—[Interruption.] The Secretary of State is making faces, but I am trying to support him in the case that he is making.
We are trying to move from unconditional welfare to welfare that attaches conditions to drawing benefits. The last Government started those important reforms, and we continue to support them. The big divide has been between a welfare state based on contributions, in which people are eligible for benefit only if they have paid the requisite number of contributions, and one in which people think that they should get benefits because they are citizens. The Secretary of State may continue his conversation, but he knows full well that as he tries to limit the entry of Bulgarians and Romanians into our welfare system, the weakness of his hand is that they will be able to claim benefit here, because large numbers of other people do, and we will be discriminating unless we give them benefit on the same terms.
The lesson that I hope we will draw is that the Opposition will go into the election with a clear mandate to move from a means-tested welfare system, in which people think that they have a right to benefits, to one in which people gain entrance to welfare because they have paid contributions. The difference is in job offers and job guarantees. The most crucial welfare reform that the last Labour Government made was the future jobs fund, which was destroyed by this Government when they came into office. If we are to build up a medley of worthwhile alternatives for people who cannot find jobs, we the Opposition and the Government must play some part in creating those opportunities.
There is debate on both sides of the House about the best routes back to full employment, but no certainty about what they are. In the immediate future, therefore, we will have to rely on an even more severely tightened future jobs fund than the Labour Government did. We know from our constituencies that the real test of whether people want to work is to have jobs to offer them. Without those, we are in difficulties. That is not to say that we would not sanction without them. London, for example, has the second highest youth unemployment, but in 10 years of Labour government, 1 million immigrants came to London to work. There is clearly some problem in people’s thinking about what is suitable for them to do versus what is suitable for immigrants.
In my short contribution, first, I congratulate the Government on their incompetence and on having to rely on the House to rescue them from it. Secondly, like them, we are moving away from an unconditional welfare state to one that attaches conditions, but unlike them, we believe firmly that they need to engage actively in trying to build up something like the future jobs fund, so our constituents are offered real opportunities to work. I hope that those of us who have Labour authorities or even decent Tory or Liberal authorities, despite their current budget difficulties, will seek to implement that approach so that over the years, we will be able to offer more people proper, dignified alternatives to sitting on their backsides on the dole.
Katy Clark (North Ayrshire and Arran) (Lab)
Yet again, the Government have clearly shown whose side they are on. Yesterday, a great deal of sympathy was expressed by Members from all parts of the House for Cypriots who may have more than 5%—perhaps up to 10%—taken off their bank savings. I have a huge amount of sympathy for those people, but today, Conservative and Liberal Democrat MPs do not seem to have any sympathy for some people on the lowest incomes in this country.
Those people are entitled to that money—the Court of Appeal has made that clear—but the Government have made it clear today that their political priority is to make sure that they get that money back from those individuals. All of us have constituents who will be affected, and over the coming months they will come to see us. I hope that those who support the legislation can look them in the eye. We know from the court cases that have been described today that many of those people are hard-working individuals who want to work. They genuinely want that opportunity, but they have not been offered the kind of work experience by the Government, whether we call it training or work experience—whatever we call it—that they need. They have not been given the opportunities that will give them what they need if they are to be offered real employment.
In constituencies such as mine, there has been an increase in the number of people suffering long-term unemployment, but there is also a generational problem, as we have not recovered from the industrial decline that took place over many decades. In surgery after surgery in areas such as mine, more and more people are coming to talk about the sanctions imposed on them by the Department for Work and Pensions. That is not just in relation to workfare but in relation to all aspects of benefits. The Department has clearly been given a political lead by Ministers to do everything that it can to make it hard as possible for people to get the benefits to which they are entitled.
In my constituency, and in the constituencies of many hon. Members up and down the country, there are thousands and thousands of people who genuinely want to work. They want opportunities for education, training and work experience that will enable them to improve their lot. What we should be discussing today is what kind of work experience and training will give our country the skills that enable us to compete internationally. It is an absolute disgrace that the Government have introduced this legislation, and are trying to do everything that they can to take money away from some of the poorest communities and individuals in the country.
John McDonnell
I want the last words of the debate to be a thank you to two young people, because if they had not taken the Government to court, we would not have had this debate. I want to thank them for having the courage to say no when they were forced into unpaid work. I want to thank them for their courage in pursuing it through the courts, and I also want to thank them for allowing us at least to have some debate today to expose the regime that the Government have introduced.
I also want to thank the two organisations that have launched a week of action: Boycott Workfare and the Right to Work campaign. They are campaigning around the country to expose what companies are doing to exploit unpaid labour; the threats to benefits; and the harassment that people have endured. They are also coming out with a simple demand on behalf of young people across the country: they just want a job, but they want one with decent pay. I do not think that that is too much to ask in the seventh richest country in the world in 2013. I want to thank all those organisations for enabling us at least to have some form of debate on this issue today.
Question put, That the Bill be now read the Third time.
Parliamentary Standards Act
(11 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Leader of the House of Commons (Mr Andrew Lansley)
I beg to move,
That—
(1) Subject to paragraphs (2) and (3), the following offices of positions are specified for the purposes of section 4A(2) of the Parliamentary Standards Act 2009, with effect from 1 April 2013—
(a) the Chair of a select committee appointed under Standing Order No. 152 (Select Committees related to government departments), the Administration Committee, the Backbench Business Committee, the Environmental Audit Committee, the European Scrutiny Committee, the Finance and Services Committee, the Liaison Committee, the Political and Constitutional Reform Committee, the Select Committee on Procedure, the Committee of Public Accounts, the Select Committee on Public Administration, the Regulatory Reform Committee, the Committee of Selection, the Committee on Standards, the Joint Committee on Human Rights or the Joint Committee on Statutory Instruments; and
(b) a member of the Panel of Chairs appointed under Standing Order No. 4 (Panel of Chairs), other than a member who is the Chair of a committee specified in sub-paragraph (a) or a member who is entitled to an additional salary by virtue of any provision of the Ministerial and other Salaries Act 1975.
(2) If a Member already holds an office or position referred to in paragraph (1)(a), then any other office or position referred to in paragraph (1)(a) is not specified for the purposes of section 4A(2) of the Parliamentary Standards Act 2009 in respect of any period for which that other post or position is held by that Member.
(3) Any office or position referred to in paragraph (1)(a) for the purposes of section 4A(2) of the Parliamentary Standards Act 2009 is not specified for the purposes of that section in respect of any period in which it is held by a Member who is also entitled to an additional salary by virtue of any provision of the Ministerial and other Salaries Act 1975.
(4) Any reference to any committee in paragraph (1)(a) shall, if the name of the committee is changed, be taken to be a reference to the committee by its new name.
This is essentially a technical motion to meet the requirements of the Parliamentary Standards Act 2009. It enables specified Select Committee Chairs and members of the Panel of Chairs to continue to be paid an additional salary when the first determination by the Independent Parliamentary Standards Authority of MPs’ salaries comes into effect on 1 April 2013, and when there are any future determinations thereafter, as set out in the Act.
As Members may recall, under section 4 of the Parliamentary Standards Act 2009, as amended by the Constitutional Reform and Governance Act 2010, IPSA was given responsibility for paying the salaries of Members of the House of Commons. Sections 4 and 4A give IPSA responsibility for determining the amount of Members’ salaries and provide that it may determine higher salaries to be payable to Members holding offices or positions that are specified in a resolution of the House of Commons.
Under the new arrangements from 1 April, the House retains responsibility for determining those offices or positions eligible for the additional salary, but does not, of course, set the level of this additional salary. The motion specifies those positions, but importantly, the House should recognise that it makes no changes to the list of positions already eligible under existing resolutions of the House. Members can see for themselves on the Order Paper the list that the House has agreed to previously. It ensures that the—
Mr Lansley
The motion ensures that the pay settlement that takes effect from 1 April 2013 will apply to the positions listed for the purposes of the payment of additional salaries. The first determination of salaries for Members by IPSA will take effect from 1 April 2013. That determination by IPSA provides for a 1% increase in the salary of Members in April 2013 and a further 1% increase in April 2014. IPSA further determined that the additional salary payable to specified holders will also receive a 1% increase. The motion will ensure that this increase is payable to the specified office holders to whom an additional salary is paid. It will also allow IPSA to make further determinations, without the need for any intervention of the House, although IPSA is required by statute to consult and then to publish its determination.
The motion also makes it clear that no Member may receive two additional salaries for any period of time, whether by virtue of holding two specified positions or because they are paid a ministerial or other salary by virtue of the Ministerial and other Salaries Act 1975.
I hope that explains the purpose of the motion, which I commend to the House.
Ms Angela Eagle (Wallasey) (Lab)
I thank the Leader of the House for explaining the motion before us. As he said, it allows the Independent Parliamentary Standards Authority to continue paying the Panel of Chairs and Chairs of Select Committees an additional amount, on top of their parliamentary salary, on 1 April 2013. Although IPSA has the power to set MPs’ pay, the House retains responsibility for determining which offices or positions are eligible for the higher salary. The motion sets out the positions that will qualify for the extra salary payment. As the Leader of the House noted, it makes no changes from the list of positions already eligible under existing resolutions of the House.
IPSA was given the power to determine MPs’ pay in May 2011 and has recently concluded a consultation on pay rates for the next two years. It concluded, as the Leader of the House said, that MPs’ pay should rise by 1% in 2013 and by a further 1% in 2014. The motion allows that 1% increase to be added to the additional pay given to the members of the Panel of Chairs and the Chairs of Select Committees.
The Opposition agree with the Government that this is a necessary motion, which need not detain the House for long, and we therefore give it our support.
Question put and agreed to.
petition
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
I have a petition signed by many people in the west midlands and across the country, who ask the House of Commons to urge the Government to appeal to India to take immediate action to stop the human rights abuses facing minorities in India; that India should sign and ratify the Rome statute of the International Criminal Court and the UN charter against torture and other cruel, inhumane or degrading treatment or punishment, which encompasses the death penalty; and thus India should abolish the death penalty.
And the Petitioners remain, etc.
Following is the full text of the petition:
[The Petition of residents of the United Kingdom,
Declares that the Petitioners believe that the UK Government, together with the UN and EU, should encourage the Indian Union to take immediate action to stop human rights abuses facing minorities in India and that India should sign and ratify the Rome Statute of the International Criminal Court and the UN Charter against torture and other cruel, inhumane or degrading treatment or punishment which encompasses the death penalty and thus India should abolish the death penalty as it is a cruel, inhumane or degrading form of punishment; further declares that the UK Government should campaign to stop Balwant Singh Rajoana's death sentence and have him released from jail as he has served 17 years in custody and that the Indian Union should release all prisoners facing the same situation and those who have been imprisoned without trial.
The Petitioners therefore request that the House of Commons urges the Government to appeal to India for the above actions to be taken, and request that the Government bring these issues to light in the European Union and United Nations.
And the Petitioners remain, etc.]
[P001164]
Claims Management Companies
(11 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Nic Dakin (Scunthorpe) (Lab)
The claims management industry has grown dramatically in recent years. In 2007, it was estimated that there were 400 claims management companies. There are now more than 3,000. The value of the industry in terms of annual turnover continues to grow and is now estimated to be £774 million, which is up 33% on last year.
Unfortunately, not all claims management companies behave responsibly. Consumer research conducted by the Association of British Insurers found that about four out of five adults in the UK had received unsolicited texts encouraging them to pursue claims for accidents or mis-sold financial products. In just 8% of cases, the individual who was contacted had had an accident or held a policy against which there might be a claim.
A Which? mystery shopping exercise found widespread rule breaches, misleading statements and unfair contract terms by a significant number of claims management companies. If you have received a text message or seen a TV advert telling you that you have thousands of pounds of unclaimed payment protection insurance, Mr Deputy Speaker, you are not alone. The research by Which? shows that 93% of people have.
In 2011-12, the claims management regulator received 10,000 complaints about claims management companies from consumers and firms. The cold calls, high-pressure tactics and misinformation that are used mean that the behaviour of some CMCs is extremely damaging to members of the public, particularly elderly and vulnerable people. Furthermore, the damage to businesses from the tenacity and dishonesty of some CMCs is very concerning. As the Motor Accident Solicitors Society points out, problems with the regulatory structure have allowed such bad practices to flourish. That is why that organisation and others have called consistently for better regulation.
The mis-selling of payment protection insurance by banks was one of the biggest mis-selling scandals ever. The courts have rightly said that those who were mis-sold PPI must be compensated. However, when claims management companies enter into the fray, further injustices occur, as a scandal of mis-selling begets a scandal of misclaiming. The claims management companies wilfully exploit the structures that are in place to protect consumers by submitting countless claims that have little or no merit, with no fear of a financial penalty. They have nothing to lose and everything to gain.
Jim Shannon (Strangford) (DUP)
Every one of us as elected representatives has had complaints from our constituents on this matter. One of my concerns is that when people who are vulnerable financially receive information about such claims, they think that there is nothing to lose and that they will get the money. Does the hon. Gentleman think it is time that these companies were regulated so that they do not raise people’s expectations so that they think they will get the money, when at the end of the day they will not and, indeed, will be out of pocket?
Nic Dakin
The hon. Gentleman makes a good point. A constituent of mine who works for a company told me recently that a member of the public, on the advice of a claims management company, had rung it up and given it the spiel. My constituent said to her, “I’m sorry, but we haven’t been selling PPI for the last 15 years.” The lady on the other end of the phone said, “Oh, I’m really disappointed. I thought I was going to get some money.” The hon. Gentleman is exactly right that such companies raise expectations and exploit vulnerable people at a difficult time. That really should be stopped.
Based on their cold-calling fishing expeditions, claims management companies write numerous letters to businesses simply because a client recalls that they may have had a financial transaction with a company, even though no evidence is provided. The CMC-generated letters always accuse the businesses of mis-selling, citing a stock list of reasons, despite the fact that in many instances no PPI was ever sold. CMCs also buy leads, many of which have been generated by companies that follow up accident whiplash claims and then try to instigate other claims where no client discontent exists.
Ironically, members of the public do not need to use any kind of intermediary to submit a PPI claim. The consumer will be charged about 30% of their compensation if they use a claims management company, but nothing if they submit the claim themselves. The consumer group Which? estimates the average PPI claim to be £2,750, costing the consumer around £835 in CMC fees.
Claims management companies are not just unnecessary, they can be damaging to both consumers and businesses, and an example from my constituency shows how serious that can be. Ian Broadbent’s company, Blue Sky Mortgages, has to respond to a continuous stream of vexatious claims from claims management companies on behalf of clients who have never been sold PPI by his business. In some cases, his business has had no dealings with the claimants whatsoever.
That is more than a mere annoyance. When a company disputes a PPI claim, the Financial Ombudsman Service steps in. However, there are clear problems with the way in which disputed claims are handled. Businesses are charged up to £850 per case, whatever its merits, and although no fees are charged for the first three claims against a company—soon to be extended to the first 25 claims—the rate at which CMCs generate claims, often with the most scant client information, means it is not long before a business has to pay out large sums of money for doing absolutely nothing wrong.
FOS investigations further damage businesses by dragging claims on, and it can take several years for a dispute to be resolved. That can be extremely damaging for businesses, with the uncertainty and unpredictability of FOS investigations adding further pressure to businesses struggling to survive in these austere times. Businesses have no right of appeal against FOS decisions—a right that consumers and claims management companies retain—and that is at odds with some fundamental principles. Claims management companies can file claims with absolute impunity. There are no charges for false claims, and if a claim succeeds, they know the decision is final.
Jackie Doyle-Price (Thurrock) (Con)
I congratulate the hon. Gentleman on securing this important debate on an issue that has concerned our constituents for some time. Does he agree that it is perhaps time that this became a less risk-free business for claims management companies, particularly in the field of PPI where, frankly, reckless profiteering is being carried out by companies with absolutely no risk to them?
Nic Dakin
The hon. Lady makes an excellent point. We have a situation in which claims management companies can never lose, however vexatious the claims they pursue, while businesses targeted by those companies always lose. She is right: it is time to balance the risk in a different way.
Kate Green (Stretford and Urmston) (Lab)
I am glad that my hon. Friend has initiated this debate. Does he agree that some of the Government’s policies that will mean people are no longer able to access lawyers—the fast-track small claims procedure, for example—will mean that claims management companies are able to expand their businesses? People will not be able to go it alone, but neither will they be able to access proper legal advice?
Nic Dakin
My hon. Friend draws attention to a very real danger in the current changes.
In his letter to me, Mr Broadbent drew attention to the following unsatisfactory way in which the FOS acted. After downloading the FOS standard PPI claim form, a client completed it. He answered the questions honestly in the form of tick boxes, and stated that he did not recall the sale process. The claim was declined, yet nine months later a CMC made the same complaint on behalf of the same client. In this case all the boxes were ticked, stating that the client had a clear recollection of the sales process and how the product was mis-sold. That was not considered a vexatious complaint and it is being considered by the FOS. It says that it must ignore the original complaint and review it on the basis of the claim submitted by the CMC. That will not strike anyone as a sensible, fair or efficient way to proceed.
The FOS does good work resolving disputes in many areas, but its ability to deal appropriately with PPI disputes is compromised by the sheer volume of complaints it receives. Last year, complaints about PPI made up 60% of all complaints dealt with by the FOS, yet CMCs made no contribution to the running costs of the FOS. Greater control over CMCs, and a system where they will be charged for making unsuccessful claims, would help free up the FOS to deal more effectively with other matters in its inbox.
The Ministry of Justice is to be applauded for making some headway in its control of CMCs, but there is more to do. The ban on referrals in personal injury cases, which is due to come into force in April, will hopefully reduce harassment of members of the public who have been involved in accidents. The flipside of that is that claims management companies may focus more on PPI claims and look to diversify into new areas of vexatious claiming. Indeed, there is already some evidence that they are turning their attention to mortgages.
The Financial Services Authority acknowledges that there has been no wholesale mis-selling of mortgages, yet some claims management companies are already sending template letters to businesses, claiming that mortgages were mis-sold. The letters are easily produced but take a lot of time to answer—sometimes as long as 10 or 12 hours—because of the complexity of the mortgages.
The claims management regulator set up by the Ministry of Justice regularly shuts down CMCs that deliberately submit vexatious claims, but the number of claims companies is too high for the regulator to keep up. The number of companies is rising—it has doubled in the past two years to more than 3,000. The competition between them results in more vexatious claims and ever more aggressive tactics. In the years 2011-12, the regulator undertook only 150 visits and audits of firms, which is fewer than 5% of authorised CMCs.
I would be grateful if the Minister responded to a number of questions in her reply. Does she support the call of Which? for improved regulation of CMCs? Will she take steps to ban cold calling and cold texting? Will she take action to ensure that, in any advertisement, CMCs make clear to the client the benefit of their taking their claim directly, without intermediary, to the FOS? Will she place a duty on CMCs to ensure that the claims they submit contain accurate information? Claims companies should be required to exercise due diligence and must reasonably believe that there is a possibility of a valid claim. They must not be allowed to continue to fish for claims with very little consequence.
CMCs play an influential role in the UK’s compensation and redress regimes. They are responsible for almost half the complaints sent to the FOS, but make no financial contribution to its operating costs of around £107 million. In the light of that, will the Minister explore how CMCs can make a financial contribution to FOS running costs? For example, CMCs could be required to pay the £500 FOS case fee when they have not undertaken adequate checks to ensure there is a policy in place. The FOS dismisses charging for CMCS in “Charging for our work: modernising our case fee arrangements”, saying that charges will be passed on to customers. A simple solution would be to ban the collection of up-front fees and cap the percentage of a claim that a CMC can take. That would prevent their passing on to customers the reasonable charges that I argue should be levied on the industry.
Will the Minister take steps to ensure that CMCs accept leads only from organisations that are also regulated by the claims management regulator, organisations that are exempt introducers, or organisations that are regulated by another body, such as solicitors? There is concern that the FOS is insufficiently independent of the regulator, which is currently the FSA. Can that be scrutinised? Can appropriate action be taken to ensure a clear separation of powers and responsibilities? It seems unreasonable that a business must adhere to the adjudicator’s findings without a right of appeal and with no knowledge of the adjudicator’s qualification for making a decision. Can that be looked at with a view to equalising the playing field?
Finally, can steps be taken to ensure that the Ministry of Justice and the CMR have sufficient powers and capacity properly to regulate the business in a way that is fair to consumers and businesses? After all, we should support businesses such as Mr Broadbent’s. His business lends to other businesses and helps them to expand, fuelling the growth of the economy.
Claims companies are making huge amounts of money and filing huge numbers of claims against whatever businesses they can, regardless of whether they have mis-sold or even sold a PPI. At their worst, CMCs do not help the consumer, and damage businesses and clog up the regulators. Their proliferation must be stopped.
The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)
I congratulate the hon. Member for Scunthorpe (Nic Dakin) on securing this debate on claims management companies, which remain topical. Clearly, there are serious conduct problems among a minority of CMCs, but it is worth remembering that some provide a useful service in identifying consumers who have suffered loss and supporting them in obtaining redress when they would otherwise receive nothing. While we have made good progress since the start of regulation, I acknowledge that there is more that can be done and should be done to improve the conduct of CMCs, and to strengthen consumer protection across the claims management industry. To that end, the Ministry of Justice claims management regulation unit remains committed to providing a stable and robust regulatory system that the public can trust. I am glad that the hon. Gentleman acknowledged the good work that the CMR unit is doing. It is stepping up its approach to improving CMC compliance and strengthening enforcement action through a range of measures.
The CMR unit has established a specialist compliance team to deal with poor practices used by some CMCs when handling claims for mis-sold payment protection insurance. In the past year, the compliance team has conducted more than 100 audits of CMCs assessed as high risk, issued warnings, and taken other forms of enforcement action where problems have been found. This work continues and includes targeting CMCs that are submitting poorly prepared or spurious claims, charging up-front fees and operating call centres, to ensure that sales calls are compliant.
On the problem of nuisance calls and text messages, we fully support the work of the Information Commissioner’s Office in enforcing the legislation that protects individuals from this form of direct marketing. We also recognise the benefits of a joint approach to tackling the problem. Before I go further, however, it is important to point out that spam texts that market claims services are generally not sent by CMCs, but by other organisations that generate leads for other businesses, including CMCs. The CMR unit is working with the ICO to investigate and take enforcement action against CMCs accepting leads or claims from this type of marketing.
Within the personal injury claims sector, most of the issues relate to businesses or organised groups attempting to defraud the insurance industry. The CMR unit contributes valuable intelligence and expertise, and has worked with a range of organisations and agencies to tackle fraud, including the Insurance Fraud Bureau, and police forces on a number of operations throughout the year. Those operations have resulted in arrests, charges and convictions. Much has therefore been achieved at a time when resources are limited. Since regulation began in 2007, the CMR unit has removed the licences of more than 900 CMCs across the sector. More recently, a major crackdown resulted in more than 400 CMCs being warned, suspended or having their licences cancelled. That has been done with no impact on the public purse, as regulation is self-financing.
So far, I have covered the good work that the CMR unit is doing to drive out malpractice. What I want to do now is to look further ahead to the programme of reforms we are introducing this year. Our reform plans give us all huge opportunities to do things better and to ensure that the regulatory framework continues to deliver effectively. This year’s reform agenda includes four main measures. Following a consultation exercise, we are proposing to tighten the conduct rules for CMCs. Most critically, we are proposing that contractual agreements between CMCs and consumers must be signed by clients before any fees can be taken. CMCs will only be permitted to refer to being regulated by the claims management regulator, rather than by the Ministry of Justice. CMCs will have to inform their contracted client of any variation or suspension of their authorisation. We intend to publish our response to the consultation shortly and, subject to the relevant Government clearance processes that can take some time, we expect implementation of the proposed changes to follow this summer.
Last year, we ran a public consultation on imposing a ban on CMCs offering financial rewards, or similar benefits, to potential claimants as an inducement to make a claim. The ban will come into effect from 1 April. Also from 1 April, we are implementing the primary recommendations contained in Lord Justice Jackson’s review of civil litigation costs, including in particular a ban on the payment and receipt of referral fees in personal injury cases and fundamental reform to the no win, no fee conditional fee agreements. That will include, in particular, a ban on the payment and receipt of referral fees in personal injury cases and fundamental reform to the no win, no fee conditional fee agreement.
Kate Green
I am aware of the changes being made to referral fees, but is the Minister aware of the concern that, because they will be brought within the ambit of the conditional free arrangements, CMCs will be able to use those CFAs as a means simply of replacing referral fees?
Mrs Grant
I think that our reforms have looked into these issues carefully and we have anticipated many of the issues to which the hon. Lady is alluding. I was going to touch on this in my speech anyway. We feel that our reforms have been carefully considered and are proportionate, appropriate and balanced, and that we now have to start to attack our compensation culture, which has been building up for many years. Obviously, the reforms will be reviewed within three to four years, and if further changes need to be made in order to create further balance and fairness, of course that can be considered.
Nic Dakin
The Minister is spelling out some of the good work being done through the Ministry of Justice and the CMR, but may I pick up on the point made by the hon. Member for Thurrock (Jackie Doyle-Price) about the balance of risk? The Financial Ombudsman Service places all the risk with businesses, which means that CMCs can act with impunity and without risk. Is the Minister talking to her colleagues across government to ensure that the excellent work being done by the MOJ is met in parallel by the other Departments and so can be reinforced?
Mrs Grant
Again, I am grateful to the hon. Gentleman for acknowledging the good work of the CMR unit in the MOJ. Of course, we are working across government to try to get this right. I hear exactly what he says, but we need to take a balanced approach and to accept that not all CMCs are bad. We want targeted, appropriate and proportionate action against the bad companies, but we also want the good ones to continue.
Lastly, this year we intend to commence powers under the Legal Services Act 2007 to extend the Legal Ombudsman’s restriction in order to provide an independent complaints and redress scheme for clients dissatisfied with the service provided to them by the CMC they have contracted with. Consumers will benefit, because the Legal Ombudsman has wider powers of redress, including the ability to order compensation.
I want to pick up on some of the issues raised by hon. Members. I believe that I have already touched on my attitude to balance and our civil reforms to funding and the costs. I would like to reassure the hon. Member for Scunthorpe that I firmly believe that, notwithstanding the reforms, meritorious claims will still be permitted. It is avoidable and spurious claims that we want to stop.
On the issue of banning cold calling and texting, I should say that nuisance calls and text messaging are a serious problem that can cause considerable annoyance, as clearly it has done in the case of the company in the hon. Gentleman’s constituency. The Information Commissioner’s Office can take enforcement action and has lead responsibility in this area, but we of course work very closely with it, and will continue to do so. The commissioner can impose penalties of up to £500,000 for serious breaches of privacy. Indeed, I was informed a few days ago that for the first time it recently issued fines totally £440,000 to two illegal marketers responsible for distributing millions of spam e-mails.
In our opinion, a blanket ban on cold calling would be disproportionate. Other businesses operating in similar industries such as debt management are not subject to a blanket ban. Next year, CMCs will have to have a signed contract before they can take any up-front fees from an individual, and that will tackle the main detriment resulting from cold calling.
On the issue of charging CMCs, we fear that that could penalise consumers who find the services of CMCs helpful in making complaints. We worry, too, that any fee would be likely to be passed on to the consumer. Also, we do not believe that charging a fee is the correct approach to protecting consumers. Protection will ultimately be achieved by effective regulation.
Jackie Doyle-Price
I hear what the Minister is saying, but I draw her attention to PPI claims, for which the banks have well-established processes that involve only the filling in of a form. The presence of an up-front fee might make consumers think twice about giving their business to a company, and about doing the work themselves instead.
Mrs Grant
I hear what my hon. Friend is saying, but I am afraid that I fundamentally disagree with her on this point.
The hon. Member for Scunthorpe asked who might be the best regulator for these purposes. I believe that the MOJ is in a good position to continue in that role. We can act now, and we are doing so. The CMR unit has a good track record of making a difference using relatively limited resources, and we have had a good response from stakeholders, who are supporting the regulation remaining with us. I also believe that it is not a good idea to transfer responsibility at a time of substantial change.
In conclusion, the CMR unit will step up its approach, and resources will be devoted to tackling the underlying problems that exist in the conduct of some CMCs. I do not believe that institutional reform is necessarily the answer, especially at a time when the industry is undergoing such fundamental change. The industry will of course have its role to play in driving up standards. CMCs must give consumers and defendants more confidence in the system by ensuring that they comply properly, fairly and adequately with the rules.
Question put and agreed to.
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UK Trade & Investment
(11 years, 1 month ago)
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Nick de Bois (Enfield North) (Con)
It is a pleasure to serve under your chairmanship on this fine early morning, Mr Hollobone. I know that hon. Members are rested and have slept well after a long night, so I am sure that the quality of their contributions will not be affected.
I am grateful to the Speaker for selecting today’s debate, which comes at a most pertinent moment. Few would disagree that the Foreign and Commonwealth Office, through its embassies, should be championing Britain and creating a stable, open, global environment in which Britain can succeed. Fewer still would disagree that foreign policy should support jobs, growth and prosperity. Indeed, the greatest threat to our country is actually economic in nature. That is why we are having this debate, which I hope will have a common sense of urgency and purpose. It is only the second debate on trade and investment in the past 12 months, the previous one being called by my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski). I will try not to be too partisan, but it is extremely disappointing that the official Opposition are again not well represented on something that, frankly, is crucial to our country’s future.
James Duddridge (Rochford and Southend East) (Con)
I know that it is an early morning, but my hon. Friend says that the official Opposition are not “well represented.” Will he cast his eye around and do a quick headcount of Labour Back Benchers who have bothered to turn up?
Nick de Bois
My hon. Friend is right to force me to highlight that the shadow Minister, the hon. Member for Wrexham (Ian Lucas), is here unsupported by any Labour Back Benchers.
It is a pleasure to welcome the right hon. Member for Belfast North (Mr Dodds) and the hon. Member for East Londonderry (Mr Campbell) to the debate.
I cannot resist commenting that I am surprised that our coalition partners are not yet here. Perhaps it was the late night and we shall see them later. Let us be generous.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
Does my hon. Friend agree that small and medium-sized enterprises in the many constituencies represented by Labour Members will clearly be disappointed that their Members of Parliament have not turned up to this debate to find out how such companies can work with UK Trade & Investment to help them to export?
Nick de Bois
I am grateful for my hon. Friend’s well-timed intervention. The fact is that trade and investment affects every single constituency. It is the one thing that unites us and the one thing that serves all our constituents, wherever they may work or whatever they may do, because without trade and without business we have no taxes, no hospitals and no infrastructure. Frankly, it is at the heart of our jobs, growth and prosperity.
As a nation, we import some $640 billion—I used dollars deliberately and hon. Members will see why as I refer to other figures—but we export approximately $480 billion only. This is a timely debate. The UK’s share of global exports has declined sharply over the past decade from just over 5% in 2000 to a fraction over 4% in 2010—a 20% drop. We should not pretend that this country is alone in seeing such a drop, but some of our near neighbours have fared much better. Germany, to which I will be making further references during my contribution, managed to grow its share of global exports. Are UK companies slow to react to opportunities? Are there inherent uncompetitive disadvantages? Perhaps more pertinently, have we been tapping into the wrong markets? I will suggest later that that has been the case. Have we failed to reach the high-growth markets as a result, perhaps, of over-dependence on our European neighbours and the US? If one looks beneath the figures, one wonders whether there is a mismatch between the goods and services we currently sell and those demanded by high-growth economies. After all, we are not supplying high-capital goods to the booming markets in the BRIC countries for machinery, tools and equipment. Whatever the diagnosis, the treatment is the same. We have no choice but to increase exports and inward investment.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
Does my hon. Friend agree that there are some bright spots in our export market? In China, for example, our exports were up 19.5% from 2011 to 2012, and UK services exports were four places up in our market importance compared with the previous year, so our exports to China are doing well.
Nick de Bois
My hon. Friend anticipates some comments I will make shortly. Even within that good news story, it is worth remembering that the success of our services exports perhaps masks an underlying problem in our not being successful in selling our capital goods to emerging BRIC countries. He is absolutely right, however, and since 2009 the volume of exports to the rest of the EU has probably risen by some 5%, but exports to the rest of the world have increased by 30%. The trend is definitely the right one. There are encouraging signs, and we should be quick to recognise that and to endorse such efforts.
We are coming together this morning as a constructively critical friend to the work of UKTI and the FCO. Since entering Parliament, I have found an admirable determination in Ministers and officials to deliver on the often quoted target for exports of £1 trillion by 2020. I have no doubt that this is the first Government to put trade and inward investment at the heart of government and, in particular, to make them a cornerstone of the wider economic resurgence of the UK. I count myself lucky, because there are Government Members present today—I welcome such a strong showing—who have witnessed the work of the Government after a career in business and are therefore qualified to fulfil the role of constructive friend. On that note, I remind the House that I spent 25 years in business, actively supporting SMEs and large corporations in their efforts to trade abroad, which involved working in the exhibition and events industry, which in turn involved working with trade associations and UKTI’s predecessor, British Trade International. I remind the House that my wife runs the company that I was involved with, which still works with some trade associations, so I can put on the record both my experience and a declaration of interest.
Today, I want to deal with both the strategic and tactical aspects of UKTI-FCO work, and I am grateful for the support of the CBI, the Federation of Small Businesses and other organisations, not least SMEs and trade associations from whom I have gleaned advice. Let us start with a premise. One in every four SMEs in Europe is an exporter, but the figure in Britain is currently one in five. What is holding back a nation of entrepreneurs that has an enviable track record in trading and a history of unique historical ties with Commonwealth countries, and that is now host to large diasporas from many parts of the world? Many of our competitor countries would envy such a pedigree as a platform for exporting, so what is allowing our neighbours to outperform us?
As my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) said, there are some success stories, which should not be overlooked. Our service sector is buoyant, and that has hidden some of the goods sector’s decline, although we have excelled in pharmaceuticals and chemicals. Sadly, however, manufacturing as a whole has declined.
Even when we are doing well in pharmaceuticals and chemicals, our rate of growth still compares unfavourably with that of Germany, because we have not sold to high-growth economies. However—I speak as a former owner-manager of an SME—where SMEs have the right goods and services for high-growth economies, the reluctance to export is a combination of risk management assessment, operating outside the comfort zone and, of course, fear of failure. That is often fuelled by what seem daunting and in some cases very real barriers to export, but also by a fair share of myths, without necessarily recognising the hidden and transparent benefits of export markets.
Andrew Bingham (High Peak) (Con)
I thank my hon. Friend for securing this important debate. Does he agree that the fears and concerns that he highlights among SMEs are more prevalent with micro-businesses, which, despite their smallness, have a lot to offer and have great potential up and down the land?
Nick de Bois
My hon. Friend is absolutely right that micro-businesses will be more inclined to stay in their comfort sector. When they are successful and they grow, it is hard for them to shed the fear of the unknown and of recognising the extra management time that would go into breaking down the barriers to export. Success as a micro-company often brings with it concerns about entering the export market. However, the answer is staring us in the face: engaging with those that have succeeded and letting them drive those that are inclined to go—or thinking of going—into the export market.
Recently, I went to an exhibition where I spent the day with SMEs exporting to the Gulf—I hasten to add that I went at my own and not the taxpayers’ expense, en route to a delegation. I was hosted by UKTI for the day, and I spent the whole day with SMEs. A number of things came out that I thought were very encouraging, but let me focus on one issue.
When I asked SMEs how they broke down the barriers, why they were successful and what they were achieving, they all had innovative ideas, as we expect from SMEs in this country. They had all used the support of UKTI and the FCO, which, in the Gulf region, is exceptional. However, they all wanted more British companies to be there with the British pavilion, supporting a British presence in the region, because it was as much in their interests to have that greater commercial and intellectual capital in a region in which they were operating. When I asked, “Would you attend forums and speak to contemporaries that are either thinking of, or may not even have considered, going into export markets?”, “Would you come and tell them about your experiences?”, and “Would you help them learn the lessons that you have learnt?”, every single company—these were small to medium-sized enterprises—was willing to do so.
My challenge is that perhaps UKTI should now seek to leverage the good will of the work that SMEs have been doing, where they have been successful, to reach new potential exporters. Why? Despite the success of UKTI, we are still not reaching enough people. I suspect that my hon. Friend the Member for Shrewsbury and Atcham will touch on that point when he talks about how UKTI’s work must expand—I do not wish to anticipate him unfairly, but I have read his report, and he has done some excellent work on the future of UKTI. Therefore, with the companies that want to leverage more activity in a region, it is a win-win, no-cost option for UKTI and the FCO to capitalise on those who are successful in order to breed more success.
During the few parliamentary delegations that I have attended, I have always met local embassies, and local UKTI representatives and staff. Every time I visit, I ask the staff a simple question: “What are the top three UK companies doing business in this region?” I confess that the answer is often mixed. Some do not know, some waffle, while others are extremely well briefed. The picture is mixed, but what all have in common is that although the large exporters may be identified and known to them, very few of the SME companies, which might even be in the same supply chain as the well known prime contractors, are known. That worries me. At delegation level, led by senior Ministers, I cannot recall how often SMEs were included in the teams accompanying Prime Ministers or Foreign Secretaries.
My specific interest is with the “M” in SMEs. Medium-sized businesses will be crucial to driving export growth, because it is not realistic to presume that our export goals can be achieved by securing large, single-group contracts. The critical mass achievable by the vast swathe of medium-sized companies will lead growth and I suggest that UKTI overseas representation is spread more evenly across the company base to reflect that fact.
Geoffrey Clifton-Brown
I promise my hon. Friend that this is my last intervention, because I am really grateful to him for securing the debate. He will be well aware that only 23% of our small and medium-sized companies currently export. Does he not agree that the excellent £1 trillion target that he has mentioned will only be met if we have a large increase in the number of medium-sized companies in particular, but also small companies, that export?
Nick de Bois
My hon. Friend is absolutely right. If only one message is taken away today, it should be that across Government, across UKTI, and across parliamentarians, we have to make, as some in the Chamber have, excellent efforts to engage with medium-sized companies, and that is the only way that we will hit our goal, because of the critical mass, size and number of SMEs. However, let me be positive. My hon. Friend said “only 23%”—well, 23% can multiply that much quicker. The 23% that are active can reach out to those that are not active. It will not be politicians in suits telling people how to export; it will be the businessmen who have got dirty, been down there and done it, and can sell their expertise and encourage others. That would be my key message.
To achieve the critical mass in relation to the SMEs and particularly the medium-sized enterprises, we should start to engage more. I recommend that UKTI and the FCO have more trade delegations where medium-sized enterprises are engaged with, not only as an SME delegation, but as part of larger delegations. They can be integrated into the supply chains of prime contractors, and we can look at the supply chains of the high-growth economies and what they need. We should ensure that we give the political clout that we commit to larger groups.
I still remember, with absolute frustration, a meeting of the all-party group on trade and investment—of which I am lucky enough to be vice-chair, and which is chaired by my hon. Friend the Member for Stourbridge (Margot James)—where I was told of a large hospital construction programme in Saudi Arabia. UKTI had gone out and sought suppliers to the hospital industry for equipment—diagnostic equipment. It was going to take suppliers out—it invited them to go—and the prospectus said that a Minister would be leading it to open the political doors and provide the clout it needed. There was a modest charge, in my opinion, to do it, and then at the last minute, the Minister was not available. How disappointing that was for those SMEs—not because they wanted to rub shoulders with the Minister, however attractive that may be, but because that Minister would have opened doors and allowed them to make the contacts that they needed. We must ensure that we deliver on our promise and spread that political clout beyond the larger groups.
I want to talk now about where we focus our efforts. To reflect the new commercial emphasis, the Government have rightly increased investment in personnel and resources. The debate has been about how we secure business from the so-called emerging—emerged, I think—economies and most notably the so-called BRIC economies. That is understandable and it is reflected in increased investment. We have put, I believe, 50 more staff into China and another 30 into India. There are also more staff in Brazil, Turkey and Mexico. However, those pesky Germans —perhaps that is an inappropriate thing to say with a Foreign Office Minister present; I take full responsibility for that. Those very assiduous Germans have already resourced up to 30% more staff, with a total of 1,700. France is already expanding its efforts into Chile and Argentina.
There is no doubt that the potential growth for UK plc in the BRIC countries will, if developed, provide a much-needed boost to our balance of payments, jobs and prosperity. They are the immediate attraction when it comes to helping us to meet our challenges. It is interesting that in those economies there will now be a shift to a different market. As the infrastructure there changes and consumer demand increases—consumer spending is set to increase by about 12% per annum—we desperately need to be there. Although we are playing catch-up now, I remain optimistic that, particularly with the increase in consumer spending and infrastructure developments, British companies will be able to capitalise on the changes. My concern is that while we are focusing on the battle in those economies to fuel our immediate needs, we are possibly in danger of losing the next war.
Hon. Members may know that the CBI commissioned research that showed the poor penetration of the UK into what are described as the next generation of emerging economies, compared with the efforts of some of our competitors. For the N11—next 11 economies so identified—we will have to do the groundwork now to avoid playing catch-up in the future. That will ensure that we are strategically and politically aligned in such a way that British companies can capitalise on the increased spending by those economies. I argue that it is important for business and policy makers to identify those markets that will provide opportunities to exploit our comparative advantages in the future, so that we can capitalise on the growth dynamism in those regions.
If we plan now, the FCO and UKTI will generate greater diversification of our overall export presence across a series of high-growth markets, rather than our being over-dependent, as we have been in the past, on Europe and the US and potentially on the BRICs. We would not run a business on any other model, so why should we run a country in that way? We need to be ready to exploit the new markets now, even though the payback may come in 10 or even 15 years.
Let us take a snapshot of the next emerging economies. In relation to Bangladesh, which has been identified as one of the growth economies, we import seven times more than we export. We do not feature in the import statistics to Bangladesh, despite the major historical links between the two countries and, if I may say so, our international aid programme. In relation to Turkey, which is set to grow at a rate of about 8% a year and be the fastest-growing economy outside Europe, the UK has only a 1.2% share of the market. Those pesky Germans and, incidentally, the pesky Spanish and the pesky Italians are outperforming us to a great extent.
We have recognised that—I give credit to the FCO and UKTI—but again we are in danger of playing catch-up. We have talked about BRIC. Believe it or not, we now have MIST—Mexico, Indonesia, South Korea and Turkey. Overall, those economies have more than doubled in size in the past decade. That is a warning sign for us. My recommendation and challenge to UKTI and the FCO is to look to run an N11 strategy in parallel with the emerging economies. We should entertain a presence in those countries at both strategic and tactical level to foster and engage with the influencers to ensure that we are positioned to capitalise on the emergence of those economies over the next 10 to 15 years. Let us avoid being a spectator and instead lead the team on to the pitch. That would be to the benefit of future generations.
Would that take more money? Of course it might take some more money, but I would ask for some slightly out-of-the-box thinking and suggest that UKTI go further in making partnerships with professional bodies and trade associations that could help to share the load. After all, that is also in the interests of the companies that are their members. I thought that there were early signs of that. I ask the Minister whether the announcement in February 2012 of a strategic agreement between UKTI and the Council of British Chambers of Commerce in Europe was a taste of things to come—an example of where Government can partner with trade associations and bodies that are experts in their field and, much like the Germans, use those bodies to provide support services and strategic planning in export markets. The House will be interested to know that the network of German chambers of commerce is already established in 80 countries, providing precisely those services. Can the Minister update us on how the strategic agreement reached last year is progressing?
UKTI rightly claims that it gains a £22 return on every £1 of taxpayer funding spent. With that rate of return, it is not unreasonable that although more funds have been allocated, we should consider whether to increase the allocation. Frankly, if someone had offered me those returns in business, I would have seized them, thank you very much.
I shall make just two final points to give other hon. Members a chance to speak. When I was at the exhibition event in the Gulf states, exhibitors said to me, “Look, we can’t compete with the costs in China and India, but we can compete on added value.” That becomes very important. They said, “What we want the Government to do is not to tell us how to run our businesses, but to sell the strategic value, the top-brand message, of what Britain is good at, which will support what we do.” They said, “When you think of Germany, you think of engineering, technology, the motor industry—BMW. That reinforces the idea of quality and advanced engineering, and German companies trade on the back of that image.” Drawing on my previous days in communications, I would say that the message is that in UKTI and the FCO we should be defining brand UK and reflecting that brand. We should remember that the brand supports everything we do, and everything we do supports the brand. Let us give businesses the platform from which they can have an added-value dimension.
Our trade envoys—I am delighted that the trade envoy to Azerbaijan, my hon. Friend the Member for Wealden (Charles Hendry), is present—have a crucial role, and not just in pushing that same message and opening the doors to trade delegations. I believe that they could help to support our efforts to drive new exporters to market. MPs have a role to play. My hon. Friend the Member for Witham (Priti Patel) led her own delegation to the Indian subcontinent. That was absolutely the right thing to do. We all have our part to play. I do not stand here saying that it is up to UKTI, the FCO and business to get on with it. We have our role to play, and that is important.
Finally, on a practical level, can we please see more focus on the ground? Access—getting into and out of markets—is crucial. I think that UKTI and the embassies in particular can do more than just advise. Sometimes they will need to get their hands dirty. Sometimes they will need to lobby and make the case as to why customs is a barrier in some countries and we need to overcome that. Sometimes they will need to take on the challenges of corruption if that is necessary to help to break down the barriers where we have markets.
I want us to take the initiative locally so that we can help our companies to do business on as level a playing field as is reasonably possible. Specifically, for the defence industry, and even beyond, UKTI and the FCO should look at simplifying the export licence application process, which many, including a company in my constituency engaged in large sales overseas, find slow and cumbersome.
In conclusion: much done, much to do. The FCO and UKTI have the full support of the House, but we need to make a realistic assessment of our strategic challenges and ensure that we are delivering the tactical support to meet them, so that my children and grandchildren will have the chance of a wealthy, prosperous life in the future.
Mr Philip Hollobone (in the Chair)
Order. After that excellent start, I shall call Mr Nigel Dodds in a moment. Six Back Benchers hope to speak. I will invite Mr Lucas to speak no later than 10.40 am, which gives us 40 minutes. If hon. Members could limit their remarks to no more than five minutes, we should be able to get everyone in. I know that it is going to be more difficult for some of you than for others, but if we all work together, no one will be disappointed. The batting order after Nigel Dodds will be Daniel Kawczynski, Priti Patel, Charles Hendry, Chris White and Geoffrey Clifton-Brown. For Mr Clifton-Brown’s sake, please keep your remarks to about five minutes.
Mr Nigel Dodds (Belfast North) (DUP)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Enfield North (Nick de Bois) on securing this important debate. We are perhaps now glad that not so many official Opposition Members have turned up, but I am glad that my hon. Friends the Members for East Londonderry (Mr Campbell) and for Strangford (Jim Shannon) are here for the debate.
I shall concentrate on the relationship between UKTI and FCO, and the work of Invest Northern Ireland, with which the Minister will be familiar, given his previous role in the Northern Ireland Office. When he was in that post, he usefully helped with trade delegations and Invest’s work in Northern Ireland, and we appreciated his work.
Northern Ireland has a good story to tell with regard to foreign direct investment. Outside south-east England, Northern Ireland is the top region in the United Kingdom for foreign direct investment. That might be hard for some people to believe, but it is a fact. We have won 7% of UK foreign direct investment, despite having only 3% of the UK population. Invest and the overseas sales teams have done a lot of work over the years to make that happen. We have a good offer, and it is important that UKTI works with Invest to promote opportunities for investment in the Province.
There are areas in which UKTI could do more, working with Invest to attract foreign direct investment and promote trade opportunities. None of the investments that have come to Northern Ireland in the past couple of years were identified or developed through the work of the UKTI network, over and above the work of the Invest teams. To date, there is a lack of project opportunities for Northern Ireland in the UKTI national pipeline of prospective investors, so I ask the Minister to consider, with his colleagues in other Departments, what more can be done. Is it appropriate to set proportionate targets for successful inward investment projects in Northern Ireland? Will he consider setting proportionate targets for inward investment visits to Northern Ireland? Will he commit, with colleagues, to a schedule of regular visits by UKTI overseas staff to Northern Ireland, organised on a sectoral basis, to update UKTI staff on Northern Ireland’s product offering, because that would be significant for providing qualitative feedback?
Mr Gregory Campbell (East Londonderry) (DUP)
Last week, the First Minister and Deputy First Minister of Northern Ireland were in Brazil targeting opportunities for small and medium-sized enterprises. If UKTI is so minded, as I hope it will be, it can assist similar future projects to enable small businesses in Northern Ireland and throughout the UK to target BRIC countries and ensure that investment comes to the UK, and particularly Northern Ireland.
Mr Dodds
My hon. Friend makes an important point. The First Minister and Deputy First Minister have worked with Invest to visit a lot of the BRIC countries. Indeed, I have noticed criticism of their travelling the world recently, but it is important to visit places such as China, India and Brazil to show the opportunities in those countries and Northern Ireland.
I am conscious of your strictures, Mr Hollobone, so I shall deal quickly with a couple of other points. In recent years, the Prime Minister has led a global investment conference event in London for the chief executive officers of top global companies, and Invest provides input to such events. Communication regarding invitations and attendees is not always as it should be, and access to the events and CEOs is often limited. I ask the Minister to consider how UKTI can help Northern Ireland business leaders to gain greater access to the global CEOs attending such conferences. I am sure that that goes for other regions of the UK as well, because presently the concentration seems to be on London. Will he also have a word with the Prime Minister about the G8 summit? It is in Northern Ireland this year, which is very significant and welcome, and we could build on that opportunity. I suggest that the Prime Minister hosts a G8 investment conference in Northern Ireland, because that would be an opportunity further to maximise the spotlight on the Province.
With the Olympics, we had a very successful 2012. A lot of British companies did a lot of good business, which arose out of the games. The feedback has been positive, because of 40 companies in Northern Ireland, 24 have won £53 million of business, which is excellent. There are issues about marketing rights, however. In January 2013, all London 2012 suppliers were offered the opportunity to apply for licences to allow them to publicise the fact that they had supplied London 2012. Greater access to those licences is important so that people can build on the success.
Northern Ireland was originally excluded from UKTI’s GREAT campaign because, as I keep saying in the House, Great Britain does not include Northern Ireland—it is the United Kingdom of Great Britain and Northern Ireland. I am glad that progress has now been made, because Northern Ireland was included on the Prime Minister’s recent visit to India, and the strapline and messages now include Northern Ireland. Northern Ireland must not be excluded from United Kingdom initiatives and measures, as we are part of the United Kingdom. It is easy to fall into a lazy way of describing or promoting the country, and Northern Ireland must be included as an equal part with England, Scotland and Wales.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
There is nothing more important than exports. The House constantly debates and argues over how to slice the cake—there are huge areas of difference between Opposition and Government Members—to provide for all the public services that we want to support, yet exports are about increasing revenue as a whole for the country and making that cake bigger. I am extremely disappointed that no Labour Back Benchers are present for the debate, but that is typical of debates on exports. They also table few written questions on this critical subject, so they clearly are not interested in engaging with it. I hope that the shadow Minister, the hon. Member for Wrexham (Ian Lucas), will take a message to his parliamentary party about the importance of engaging in such debates so that we can work constructively together, across parties, on this critical issue.
My office and I have spent the previous few months interviewing people from hundreds of SMEs from all over the UK, who have come to the House of Commons to give us their experiences—good and bad—of UKTI. We presented our preliminary results at a meeting with the Prime Minister and the Chancellor of the Exchequer. I have repeatedly lobbied the Chancellor on the issue, and I very much hope that some movement, or some additional support for UKTI, will be spoken about on Wednesday.
During my interviews, I have got to know Mr Nick Baird, the chief executive of UKTI, who I think is doing a very good job, and I want to put on record my thanks to him for his professional leadership of the organisation. I am, however, disappointed that a number of companies that I have met have failed to get the support that they require from UKTI, so I have started to take them to Mr Baird to allow him to engage directly with them and provide support. Some of the companies are talking about hundreds of millions of pounds of investment into the United Kingdom, so that is very important.
I shall mention briefly, as I have to be very brief, three key recommendations that I would like the Minister to take on board, with which, by the way, Mr Baird agrees. The first is about the structure of UKTI. At the moment, personnel report into different Departments, including the Foreign and Commonwealth Office and the Department for Business, Innovation and Skills, and sometimes to local ambassadors. What we want in the United Kingdom is one organisation that is fit for purpose, with reporting taking place directly to UKTI’s board and its chief executive. We want an organisation that can hire, fire and reward on the grounds of performance and on a commercial basis. We want to encourage people in UKTI to go the extra mile and strive to do everything possible to help British businesses to export. Regrettably, the support is rather patchy; in some parts of the world it is superb, but in others it is poor. We therefore want a common theme across the world and a common reporting structure.
Daniel Kawczynski
No, I will not. I am sorry, but I do not have time.
My second point is about funding. Only 0.005% of Government spend goes to UKTI, and I am concerned that we will fall behind Scottish Development International, for example. That body receives far more pro rata, given the number of companies in Scotland, so it is able better to support its companies.
There is only a 49% awareness of UKTI among SMEs, and it is important that the body gets more funding from the Chancellor so that the message about what it can do for those companies throughout the world is better understood. My hon. Friend the Member for Enfield North (Nick de Bois) made the superb point that for every £1 spent, UKTI generates £22 of revenue. If I was the Chancellor of the Exchequer, my No. 1 priority would be to give UKTI more money.
My third point is that we need greater parliamentary scrutiny of UKTI. I am having to condense a 25-minute speech into five minutes, and this is only the second debate that has been held on UKTI in the past 12 months. This is a ridiculous way of scrutinising one of our country’s most important bodies. I want ongoing parliamentary scrutiny, and even—dare I say it—a Select Committee that can interact with Ministers and the UKTI chief executive on a daily, weekly, monthly and yearly basis, and hold them to account about specific countries and projects so that we are always scrutinising how taxpayers’ money is spent. When that parliamentary scrutiny takes place, we will be able to say to the Chancellor of the Exchequer, “Look at what UKTI is doing. Look how things are improving. Give it more money,” and I cannot overemphasise the importance of that. I desperately want to work with colleagues to convince the Chancellor and the Prime Minister to give us a Select Committee of the House of Commons to allow those of us who are passionate about exports to work together constructively to hold UKTI to account.
Some 45 UKTI staff work in Brazil, but 52 opportunities are listed on the website. The website is not properly maintained, and no opportunities are listed for a huge number of countries. We might not be surprised that that is the case for some obscure, small countries, such as Cape Verde and Mauritania, but there are many larger countries that have no opportunities listed against them. If we are going to have a website and to communicate with SMEs up and down the country, we need always to be harvesting opportunities across the world and putting them on that site. We must ensure that information is disseminated daily to all nine regions in England, and that those regions then interact with their SMEs to find out which can best be tailored to each opportunity.
Whenever I have travelled abroad, I have noted that the most important thing to remember, as my hon. Friend the Member for Enfield North mentioned, is branding. The British brand is the gold standard. It is the best in the world, so many people across the middle east, and in the rest of the world, yearn to buy British. Give us an opportunity here in the Commons to scrutinise UKTI on an ongoing basis, and give us a Select Committee.
Priti Patel (Witham) (Con)
I commend and congratulate my hon. Friend the Member for Enfield North (Nick de Bois) on securing the debate.
I pay tribute to Conservatives in government who have refocused our foreign policy on prioritising the development of new trading links, the importance of which I cannot emphasise enough. As we have heard, the previous Labour Government had an inward-looking approach that left the UK economy at the mercy of the economic performance of the eurozone. We have lost a decade on trade and investment, and reaching out to the BRIC economies. I declare a significant personal interest in the issue, because before I became a Member of Parliament, I worked internationally across many markets, from the Gulf to Africa, Asia and south America.
Last month, I had the privilege of accompanying the Prime Minister and the Minister on the trade delegation to India, and I saw at first hand the role of UKTI, the Foreign and Commonwealth Office and, in particular, the British high commission and the exemplary team on the ground in identifying opportunities for UK businesses and supporting their endeavours to do business with Indian counterparts. Such trade delegations, under the leadership of the Prime Minister and other Ministers, do tremendous good by boosting the prospects of UK exporters. As my hon. Friends have said, they send out a strong signal that we are in a global race and that the UK is open for business. In addition to our expansion of diplomatic networks, with new embassies, consulates and trade offices being opened, we need to cascade opportunities down to all the UK’s regions and all our constituencies.
I pay tribute to the work of the Essex chamber of commerce in reaching out to SMEs and other businesses in my constituency and the wider eastern region. I pay particular tribute to Lord Green, who has put great emphasis on entrepreneurship, supporting exporters and bringing forward inward investment through schemes such as the global entrepreneur programme. He came to Essex just last month and spent considerable time working with the chamber of commerce and holding out the hand of information and guidance through UKTI to Essex businesses.
It will come as no surprise to you, Mr Hollobone, that I want our businesses in Essex to reach global dizzy heights and to export more. Those are companies such as Crittall Windows, a winner of the Queen’s award for enterprise, which is a world leader in the manufacture of metal windows; businesses such as Wilkin and Sons, which is based in Tiptree and makes the finest jams in the world; and small businesses such as Margaret’s Frozen Luxuries, which makes frozen yoghurts and is based on the border of my constituency. That company recently lost an export order to France because of changes in the value of the pound against the euro, but it still has an opportunity because it is now looking to export to the middle east. That clearly demonstrates that the Government are right to focus their efforts away from the deteriorating situation in the eurozone and Europe, and on to restoring Britain’s status as a great global trading partner by opening up new opportunities.
There are a number of additional opportunities to build on. We have already heard about parliamentary scrutiny, building greater links and strengthening the roles of UKTI and Members of Parliament, and there is also the 2014 international festival for business, which will showcase in Liverpool the best of British brands—the best that we have to offer—on the international stage.
It would be good to hear the Minister outline what further steps UKTI and the FCO are taking to showcase small and medium-sized businesses, and especially small businesses. One thing that I observed during my time in business and my involvement with trade delegations is that we need to increase the representation of small as well as medium-sized businesses, as my hon. Friend the Member for Enfield North said, and get our constituency businesses involved in such showcases.
Finally, I want to highlight the need for UKTI to do more to encourage greater foreign direct investment in the United Kingdom. Companies, as well as sovereign wealth funds, pension funds and other overseas businesses, should all be welcome to the United Kingdom. I particularly want to hear what steps UKTI is taking to bring in foreign investors who could, in effect, invest in not only companies, but the bricks and mortar—the infrastructure—of UK plc, especially in the county of Essex.
Charles Hendry (Wealden) (Con)
I put on record my interests as the Prime Minister’s trade envoy to Azerbaijan, Kazakhstan and Turkmenistan, and as the chairman of the advisory board of the Russo-British chamber of commerce.
I congratulate my hon. Friend the Member for Enfield North (Nick de Bois) on securing the debate. He was absolutely right to say that our future recovery lies not within the eurozone, but outside it. We must focus much more on countries where there are tremendous opportunities that we are often missing. From my experience of visiting them as a Minister and subsequently, such countries want to trade with Britain. The door is open, and the question we are most often asked is, “Why don’t we see more of you?” I am delighted at the work being done by the Foreign Office and UKTI teams to try to ensure that we are in a strong position to do that.
There are very exciting developments in Russia, with which our trade has doubled in the past three years. It has moved from being our 19th biggest trading partner to being as large as our 11th biggest, which is a huge improvement in activity. We want such an approach to be replicated in many other countries.
I welcome the approach taken by the Minister for Trade and Investment, my noble Friend Lord Green, towards developing links with chambers of commerce. They are well established in their countries, where they are well known to their Governments, and they understand those countries well. It is much better to develop those relations than to put in place a new structure.
Chambers of commerce are also well positioned to ensure that we go beyond the few cities that trade delegations usually visit. In Russia, there will be delegations to Moscow and St Petersburg, but there are exciting new opportunities and a real enthusiasm for doing business in Kazan in Tatarstan, and chambers of commerce should be our natural allies in making things happen.
At the end of last year, the Prime Minister appointed seven of us as trade envoys to some of the fast-developing markets, which are exactly the sort of markets that my hon. Friend the Member for Enfield North spoke about. We should recognise the extraordinary personal contribution that the Prime Minister is making in that area, with the success of his trade missions and his determination to get out there and win opportunities for British companies right around the world.
The role of trade envoys is to give an extra level of support, working alongside the FCO and UKTI. It is to focus purely on trade, not politics or diplomacy, and on taking that contact forward to a deeper and broader level of engagement. In the three countries in which I work, there are tens of billions of pounds of British investment in the oil and gas sector, and companies such as Shell, BP and BG have enormous departments that focus on improving such links. My focus therefore needs to be not only on working with them, but on seeing how to secure opportunities for the supply chain and service companies, of which Britain has some of the finest in the world.
Jim Shannon
The effectiveness of businesses is measured by export contracts. Does the hon. Gentleman think that we should do more for our skills and people skills in construction, for instance, so that people are able to go overseas to help companies to build?
Charles Hendry
The hon. Gentleman is absolutely right that we have world-class skills in that sector. I find that people saw what happened in Britain in 2012, when we delivered the most successful Olympic games ever, and know that those involved often have a tremendous amount to offer to countries with big ambitions in such areas.
The Asian games are in Ashgabat in 2017, the European games are in Baku in 2015 and the Expo is in Astana in 2017. In all those areas, we are introducing British architects, engineers and construction companies—working alongside other partners—to ensure that they have the chance to compete. The issue is not only about the big companies, because my hon. Friend the Member for Enfield North is completely right that it is also about SMEs. On the recent mission that I undertook to Turkmenistan, the majority of companies were SMEs with expertise in the sports sector that saw how they could work alongside others and realise the potential of the 2017 games.
We also have opportunities to attract more investment into the United Kingdom. These countries all have significant sovereign wealth funds. We can highlight the opportunities for them to invest in British businesses and infrastructure, and they should become our natural partners as we take that forward.
I believe that what really makes a difference is the relationship between trade envoys, and the Foreign Office and UKTI. We have excellent missions and ambassadors in those countries, but we also have outstanding UKTI representatives who are focused on understanding those markets and realising the opportunities. That means that we host good round tables to bring together a range of companies that are interested in investing here. For companies that are looking for where to export next, but are anxious about going to markets that are distant and new, we can help to make the process much easier.
I very much welcome the debate. Above all, the key message is that countries throughout the world that want to trade with Britain need to see us more. I am delighted that we have such an energetic Minister in post, because I know that he is tireless in taking that forward.
Chris White (Warwick and Leamington) (Con)
I congratulate my hon. Friend the Member for Enfield North (Nick de Bois) on not only securing the debate, but his comprehensive remarks.
The UK remains the ninth largest manufacturer in the world, but over the past few years, our export performance has been poor. In 2000, our share of world goods exports was 4.4% but, unfortunately, that had fallen to 2.8% by 2009, which is quite shocking. Perhaps that is why so few Labour Members are in the Chamber.
Chris White
Unfortunately, I cannot, given the time available.
There are, however, now positive signs of improvement. In contrast to financial services, exports in manufactured goods have risen since the financial crisis. Fortunately, in the period between 2008 and 2011, exports of finished manufactured goods grew by more than 16%.
Ultimately, exports depend on good products and pioneering companies, such as DCA Design International. I will not go through a list, as my hon. Friend the Member for Witham (Priti Patel) did of all the jam makers and so on in her constituency, but my constituency has similar manufacturers.
The Government have a role in supporting businesses to export, and I hope that they will use the upcoming Budget to provide additional resources to UKTI so that it can reach out to even more businesses. The Prime Minister has announced a national challenge for the UK to encourage more small and medium-sized businesses to export, which is essential. As has been mentioned, if the UK exported at the EU average of about 25%, rather than 20%, about £36 billion would be added to the UK economy.
Businesses need support if they are to export, particularly smaller businesses that do not have large teams and resources to enable them to get into such markets. Our competitors in Europe and America see potential growth in the BRIC countries, as has been mentioned, and their Governments seek to provide their companies with every single advantage. That is why collaboration between the Foreign Office and UKTI is so important. The Foreign Secretary has made it clear that he wants British embassies to roll up their sleeves and support British business. We must also ensure that officials have their ear to the ground for new trade opportunities and then feed such information back to UKTI. We need to create a dual hub-and-spoke system, with the UK’s vast diplomatic opportunities feeding back information to UKTI and trade bodies in the UK, while they in turn have their own systems to feed back local information to chambers of commerce and business networks.
The Foreign Secretary has tried to reverse the decline in trade offices in consulates throughout the world, but we need to do more than merely reverse the decline—we need to expand, particularly in the emerging markets I mentioned earlier. Information is crucial in an age in which companies can communicate in minutes and deals can be won or lost through the smallest of delays. In the longer term, we also need to encourage businesses to make personal connections with emerging markets.
As a British Chambers of Commerce survey in 2011 pointed out, contacts are often key for businesses exporting into new markets. Businesses that had employees or directors who had lived abroad were even more successful. However, the most direct way in which we can support British businesses to export is by ensuring that our export products and guarantees are as competitive as possible. The Government should therefore commission a report into the comparative competitiveness of the UK’s export guarantees and credits, and the effectiveness of our institutions such as UKTI, so that we can learn from the success of others, and accordingly improve our own standards and the way in which we work.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
Thank you, Mr Hollobone, for chairing what should, in my view, become an annual debate. I urge the Business, Innovation and Skills Committee to pay more attention to exports and foreign direct investment, and to produce an annual report on the subject as an update of what has happened the year before. I hope that no offence was intended, Mr Hollobone, because I did write to Mr Speaker to ask whether I could speak in the debate.
I welcome the Minister to the debate. The Foreign Office plays a vital role in exports, so I am delighted that he is here. He and my right hon. Friend the Foreign Secretary have been opening embassies around the world, whereas the previous Government closed them. It is important that we have a really good embassy network throughout the world and that we use our contacts and all our strengths. A third of the world speaks English, for goodness’ sake. The British Council is one of the best cultural organisations, and BBC radio is one of the best broadcasters. We should use all those strengths to help our exporting situation.
I also pay tribute to my hon. Friend the Member for Stourbridge (Margot James). Her all-party group on exports, of which I have the privilege to be an officer, does fantastic work, and I urge her to keep doing it.
I congratulate my hon. Friend the Member for Enfield North (Nick de Bois) on securing the debate. He and my hon. Friend the Member for Wealden (Charles Hendry) highlighted high spots in China and Russia but, generally, our balance of payments is still sluggish, which is because the European market, where more than 50% of our exports go, is still in deep trouble. The situation in Cyprus has reminded us of how much trouble the eurozone is in. Barclays Bank has an exposure to Cyprus of £184 million, yet it has an exposure to Spain and Italy of £22 billion and £23 billion respectively, and those countries are still not out of the woods.
We need to concentrate on the BRIC countries. By around 2025, the whole of the eurozone and America will occupy only 40% of the world’s GDP, whereas just four BRIC countries will occupy 41%. There are many additional emerging countries, so we need to concentrate more of our efforts on getting exports around the world in these high-growth markets. As my hon. Friend the Member for Enfield North has said, this is about not only the BRIC countries.
I have very little time in which to speak, so I will concentrate on one or two areas. I am delighted that UKTI has got an extra 25% over the next two years, but I want to see it account for how it spends that money. Although it is now establishing a new regional trade adviser in every region, I still believe that there is a big gap. I was never a friend of the regional development agencies, and I did not think that they did a particularly good job. We abolished the RDAs and put in their place local enterprise partnerships, but their contact with business is still patchy. There is a huge job of work to be done by the regional trade advisers.
Mr James Hurley reported in The Daily Telegraph on 5 December 2012:
“Our research shows that nearly 70% of SME exporters are not aware of UKTI”.
If that is correct, and I query it, it is a shocking statistic that UKTI needs to work rapidly to deal with.
Some 40% of our GDP depends on FDI, so it is absolutely vital that we take all steps necessary to protect that investment. We are still making strategic decisions that are wrong. We are making a strategic decision on where our major hub airport should be on the basis of which party wins which constituency at the next election. Can we not get an all-party agreement on where our hub airport is? It almost does not matter where it is, but let us make a decision. Also, to come up with the HS2 high-speed rail policy in isolation of where the airport will be is not a clever thing to do. At the moment, 70% of Europe’s corporate headquarters are based within 75 miles of Heathrow, but we are losing those corporate headquarters by the day because of an incoherent policy, so we urgently need to do something about the situation.
There are one or two bright spots. The Chancellor is absolutely right to drop the rate of corporation tax and the Prime Minister is absolutely right to use the G8 to make sure that companies pay the appropriate amount of corporation tax. However, there is still a problem with finance for companies that wish to export. The Government have announced a £50 million UK export finance scheme, but it is still not up and running because agreement has not been reached with the banks on how it is to be operated.
A major director of a British FTSE company, who was in my office yesterday, told me that the Canadian equivalent of our Export Credits Guarantee Department had telephoned his firm to ask whether it wanted finance from that Canadian export department. One would never imagine a British export department doing that. I am not criticising the ECGD, but it and the Government need to get their act together and think about how we can help companies.
My hon. Friend the Member for Enfield North was absolutely right to mention the target of 100,000 new companies exporting by the year 2020, which would represent £1 trillion in exports. If we are to meet that target, we will have to connect with many more SMEs. If my figure of 23% currently exporting is correct, that has to grow hugely, which means that awareness in UKTI has to increase hugely. It also means that we all have a role—the Government, the Foreign Office, the Department for Business, Innovation and Skills and Members of Parliament. When I go round the world and visit companies in my own constituency, my brain is always working to see how I can increase opportunities.
I know how difficult it is to export, because I used to be the largest exporter of daffodils in the country—to the Dutch. If one can do that, one can do anything. We need to concentrate more on our exports. It is only through exports—and, above all, only through FDI—that we will grow the economy and get out of the economic problems that we are in.
Ian Lucas (Wrexham) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone.
I commend the hon. Member for Enfield North (Nick de Bois) for initiating this interesting debate and for making a valuable and interesting speech. I was particularly interested in his perception of working with the 11 developing economies, which was a positive suggestion. We are operating in a world economy that is growing in different parts of the world. Unfortunately, our own economy is not, but we are aware that there are opportunities, as we heard often in the debate, in those emerging economies. Looking ahead in the way the hon. Gentleman suggested is important, as is his emphasis—this was a thread throughout the debate—on SMEs. I will return to that theme, because it is crucial to the success of British exporters.
The right hon. Member for Belfast North (Mr Dodds) also made a valuable contribution in which he raised the important issue of devolved institutions and the relationship between UKTI and the devolved nations. More work can be done to ensure that those parties work together, both to promote investment in the UK and to sell the message about Scotland, Northern Ireland and Wales. Also, within England, a more devolved approach within UKTI would increase the links between business and UKTI, which I sense from listening to the debate that many hon. Members feel are lacking.
The contribution made by the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) was interesting, particularly his suggestion, which is certainly worthy of consideration, that there should be a Select Committee to examine these important points. The hon. Member for Witham (Priti Patel) also emphasised the crucial importance of small and medium-sized businesses. We heard about the jam that is made in her constituency, which I am sure is excellent—I would love to experience it at some stage. I was also interested in the contribution by the hon. Member for Wealden (Charles Hendry) and his reference to the Azerbaijan games.
In the debate so far, we have not touched on creative industries. Sport is obviously crucial. Last year was a wonderful year in which we projected Britain—sorry, the United Kingdom—to the world, in addition to our artistic merit. I am sure that it is true for all Members that the potential of the creative industries in our constituencies and the skills of our young people in those industries match the world’s best. When we consider exporting, we need to talk much more about the creative industries than we do now and concentrate on that sector.
I almost got upset with the hon. Member for Warwick and Leamington (Chris White) because of the misrepresentations he made about the previous Labour Government, but I will move on from that. I also learned from the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) about the daffodils that he exported, and as a representative from Wales, I commend him on his choice of flower. All Members who contributed to the debate did so positively.
We are, of course, in a difficult situation because despite the references to business expertise by Conservative Members, the reality is that this country’s economic performance has been very bad since 2010, and far worse than the Government said that it would be in 2010. The Government said that they would base their economic policy on exporting, but I am afraid that that process has not been as successful as we would have liked. We need to up our game. On the eve of the Budget, it is quite clear that we need to do more.
We do have companies that are extremely successful at exporting. I do not want to be the bringer of bad news the whole time, so I will say that only yesterday we had an excellent announcement from Airbus, which has a factory just outside my constituency, that it is selling more than 200 new aircraft to Indonesia, which is one of the economies to which the hon. Member for Enfield North referred. That is an excellent example of the Government and the industry working together. That form of business is very successful, because we are the No. 1 exporting nation in Europe and we can outperform our competitors.
The UK automotive industry is also a successful exporting industry. It is doing extremely well and, again, that is an example of the Government, industry and—dare I say it?—trade unions working extremely closely for the benefit of the economy. That means that we can succeed when we work together, ensure that we reach out to development markets and make real progress.
I turn now to Germany, to which the hon. Member for Enfield North referred, because I found some interesting statistics during my preparation for the debate. I was especially interested to learn that Germany’s export credit agency, Hermes, provided €32 billion of financial support to German exporters in 2010, which is equivalent to 3% of Germany’s exports. The UK equivalent, the Export Credits Guarantee Department, provided only £2.9 billion of support for exporters which, if my maths is correct, is less than one tenth of the support that Germany offers. It would therefore be helpful if the Minister examined that German budget and considered how a country such as Germany can fund such a seismically larger approach to investment abroad.
Geoffrey Clifton-Brown
The hon. Gentleman has made what is perhaps the most important point that could possibly come out of this debate. The banks are still not lending to small businesses, there is still a problem with export finance guarantees and there is still a problem with currency instruments. If we can get ECGD at least to start backing instruments to help small and medium-sized companies to export, I believe that we could have a step change.
Ian Lucas
The hon. Gentleman makes an interesting point. I am a proponent of a much more regional structure in banking than the one that exists in the UK at the moment. The flawed reforms in the 1980s created a very centralised and uncompetitive banking sector that has not fundamentally changed in any way since 2007. The German Sparkassen model has been successful since 2007, and the Leader of the Opposition made a speech only last week in which he talked about introducing the concept of regional banking within the UK to try to link in with those businesses that we need to see expand.
I say that because the businesses that are exporting successfully from the UK at the moment—and, frankly, the businesses that are also using export credit guarantees—are the largest businesses that we have. I do not want that to diminish in any sense, as I speak as someone who represents a constituency that is immediately adjacent to an Airbus factory, which is a vital part of our local economy. However, we also need an expansion of exports by small and medium-sized businesses.
Of course we need to work more closely with UKTI and our embassies abroad, which in my experience do an excellent job of linking in with local economies. We particularly need to look at the developing countries where we ought to be doing better. Of course, there are many examples of the benefits of soft power in the UK. Reference has already been made to the World Service and to the English language, and our universities also develop excellent links with the outside world.
We are, however, sending mixed signals to some developing countries. This issue was raised on the Prime Minister’s recent visit to India because, for example, the changes in our visa regime are sending mixed signals to India. India is an important market for us, so we need to be conscious that we require a pro-business and pro-growth strategy on such issues as visas. It is also true that the World Service is one of our greatest assets. It builds a positive picture of Britain, so we must ask why its budget has been reduced by the Government through their reforms of the BBC. We must always look to the longer term on building our economy and exports.
I am aware that one way in which the Department for Business, Innovation and Skills builds its links to businesses is through the strategic relations team, so I want to ask some questions about that—[Interruption.] I do not know why the Minister is looking at his watch, because he will have exactly the same length of time that I have had to speak in which to wind up the debate.
I want to ask the Minister specific questions about the process whereby specific Ministers are allocated to specific larger businesses. How do those Ministers, who are linked through the UKTI strategic relations team’s list of companies, link in to smaller businesses? How do they liaise with smaller businesses, which we know will drive the expansion in exports in the future? They have close relationships with the larger companies, so how is their performance with those larger companies assessed? Is there a measure of the investment that is brought in?
I would be very grateful if the Minister would consider my points. We all agree that we need to expand exports and that we need to do better. We will support initiatives that will enable that to happen, but we certainly need to up our game, because we do not have the growth that we need in our own economy.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
I congratulate my hon. Friend the Member for Enfield North (Nick de Bois) on securing this important—at least to some hon. Members—debate.
It is vital for the Government to succeed in transforming the UK’s export and inward investment performance. As the Prime Minister has said often, we are in a global race. We have suffered from weak trade performance for decades. As my hon. Friend the Member for Warwick and Leamington (Chris White) rightly said, there was a decline in manufacturing between 2000 and 2009, although there are now signs of a recovery. It is for this reason—the appalling, precarious financial situation we inherited—that my right hon. Friend the Prime Minister and my noble Friend the Minister of State for Trade and Investment, Lord Green, launched the national export challenge, encouraging more small and medium-sized enterprises to export. They set an ambitious target to get another 100,000 companies exporting and to double UK exports to £1 trillion by 2020, as we have heard.
My hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) talked about the rather patchy local enterprise partnerships and said that there is more to do. A number of hon. Members said that we need to better publicise what UKTI can do for mid-sized businesses. In January 2012, BIS formally launched a national campaign to help raise the profile of medium-sized businesses, working with the CBI, The Daily Telegraph, the Institute of Directors and other intermediaries and relevant organisations. UKTI now has some 30 mid-sized business advisers in place, will engage around 400 mid-sized businesses by the end of the year and will deliver engagement with a target of 1,500 MSBs over the three-year life of the programme. There have been specific trade missions for mid-sized businesses; jointly with the CBI, the noble Lord Green has led trade missions to Turkey, Russia, Mexico and Colombia. But of course we can always do much more.
The nation’s trade and investment performance will not be transformed overnight. My hon. Friend the Member for High Peak (Andrew Bingham) spoke about real growth in micro-businesses, which we can grow further, and getting them exporting. The prize is clear. We need to get more SMEs exporting. The more they grow, gain efficiency and create jobs, the more they help the UK to pay its way in the 21st century. I hope that all hon. Members are left in no doubt that we are committed to that transformation. I shall now mention what we have done and what more we will do.
My hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) kindly congratulated Nick Baird and his team. They do a magnificent job. I am not altogether sure that Nick Baird supports all the proposals that my hon. Friend suggested he did. My hon. Friend made some interesting points and we welcome his continuing interest. He is right to take companies to UKTI. All hon. Members should be proactive in doing so. I am doing that myself, to try to get inward investment into my area. Doing that is right.
It is worth saying and fair to say that, organisationally, UKTI has become more entrepreneurial, with 75% of the senior management team now having been recruited from the private sector. The Foreign and Commonwealth Office is injecting commercial thinking into the way we work, with commercial awareness training for staff and private sector secondments for new ambassadors, before they go to post. That close alignment of trade and diplomatic interests is new. That is not only welcome, but necessary.
A number of hon. Members talked about what we are doing in terms of building up capacity and about the capability of British Chambers of Commerce and other potential delivery partners overseas. My noble friend Lord Green has been doing a lot of work on this. UKTI is piloting a scheme to harness British businesses groups and chambers of commerce overseas, to help them develop their networks and capabilities. Increased autumn statement funding of £8 million will allow UKTI to run a pilot project that will focus initially on 20 priority markets, including Brazil, Hong Kong, India, Russia and China.
We will also be working to increase the amount of trade in emerging markets. My hon. Friend the Member for Witham (Priti Patel) went to India recently, in the biggest trade delegation ever to leave British shores. I am glad that the hon. Member for Wrexham (Ian Lucas) has discovered the importance of trade with India. It took the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) 10 years, from the time he was Chancellor to when he was Prime Minister, to go to India. It took my right hon. Friends the Prime Minister and the Chancellor of the Exchequer 10 weeks. I do not think we need any lessons on the importance of existing and emerging markets or about high-level politicians visiting them. Some 100 companies, including more than 30 SMEs representing different sectors, travelled to India on that trade mission. I am travelling there again this evening, in support of a British company that will be revealed in the fullness of time.
Another contrast between this Government and the last is the fact that we are trying to get Ministers to travel much more than the previous one ever did. That is recognised. Ministers have already undertaken 24 trade missions in 2012, to places such as Indonesia, Japan, Malaysia, Mexico, Brazil and Saudi Arabia. I undertook missions to the United Arab Emirates and Burma.
Front-line support for business comes, of course, from our diplomatic staff. It is important to note that we are increasing our presence in the emerging powers. We are strengthening the UK’s diplomatic network, including opening embassies, as my hon. Friend the Member for The Cotswolds said, whereas the previous Government were closing them. By 2015 we will have opened up to 20 new embassies, consulates and trade offices, and deployed 300 extra staff in more than 20 countries, particularly in Asia, Latin America and parts of Africa, linking us to the world’s fastest-growing economies.
To help showcase the many opportunities available in these markets, my right hon. Friend the Prime Minister launched the trade envoy programme, which is specifically designed to help promote trade in emerging and growth markets. So far, 48 separate events have been undertaken by the prime ministerial trade envoys. My hon. Friend the Member for Wealden (Charles Hendry) recently led a trade mission to Turkmenistan, where he met the President and Foreign Minister and signed a memorandum of understanding on major sports infrastructure delivery. That is just one of the many notable successes for him and his colleague as trade envoys. My noble Friend Baroness Morris met the Jordanian Prime Minister, Dr Abdullah Ensour, and Minister for Trade, Hatem al-Halawani, to develop the relationship and expand opportunities in health care, a significant sector for the UK.
We should not forget the excellent work of the business ambassador network and its chair, my noble Friend Lord Marland. That network is a powerful advocate of the UK abroad, promoting the UK’s expertise, economy, business environment and reputation as the trade and investment partner of choice. The hon. Member for Wrexham said that we were not doing enough in the creative industries. A good example of the network’s participation is the Los Angeles creative forum, which was designed to develop relationships between the best forward-looking US and UK companies across the wider creative digital and related technology sectors. The forum was a success, with £50 million of business reported so far. We are doing things in the creative sectors.
The high-value opportunities programme is benefiting from our overseas network. The programme provides UK businesses with intensive support to access opportunities worth billions, as well as significant supply chain opportunities for SMEs. The scheme has helped deliver £4 billion of success for UK business since its inception, but we have increased the target for UK contract wins from £3.5 billion to £10 billion per annum. To meet that, we will strengthen our HVO support by doubling the number of campaigns from 50 to 100, with the top 20 campaigns being led personally by Ministers. There are £14 billion in projects around upcoming global sporting events in South Korea and the £1.3 billion expansion of Hong Kong’s airport. Among the successes are the multi-million pound contracts won for the Sochi winter Olympic games in Russia, the Zhuhai-Macau bridge project in China, and for UK rail companies, which are securing more than £78.5 million of business in Singapore.
However, our work is not all about trade. Foreign capital investment is vital if we are to enable UK infrastructure projects to be delivered. UKTI has a particular focus on major projects and major investors, with extra autumn statement funding available to enhance support in growth markets, such as the UAE, Qatar, Kuwait and Russia.
The right hon. Member for Belfast North (Mr Dodds) talked about the work of Invest Northern Ireland. I testify to its excellent work. Northern Ireland has an excellent story to tell. I take on board the right hon. Gentleman’s point about the G8 meeting, which is a real opportunity for Northern Ireland. I hope that he and colleagues, including Arlene Foster, will see whether there are ways of promoting even further investment in Northern Ireland in connection with that.
We are also working to position the UK as the leading location of choice for European headquarters, elite global entrepreneurs and exceptional talent, with a new dedicated visa route for entrepreneurs brought into the UK. For the first time ever, to answer the question of the hon. Member for Wrexham, we have identified the leading companies in the UK and have allocated to them Ministers responsible—not small companies, but the leading companies, which we want to look after now they are here and to encourage them to grow. We are not trying to do that for small companies. We simply cannot do that; it is unrealistic to expect that.
South West Trains
(11 years, 1 month ago)
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Mr Dominic Raab (Esher and Walton) (Con)
It is a great pleasure to serve under your chairmanship for the first time, Mr Hollobone, especially as you are fresh from your doughty defence of parliamentary prerogatives in the main Chamber yesterday.
My constituency is home to a large number of commuters. Every day, more than 22,000 residents of Elmbridge commute to London for work. That represents roughly 38% of the borough’s work force—no small proportion. Many rely on the rail network, which means travelling with South West Trains. As a commuting MP, I know first hand what the service is really like.
The number of people using the railway has increased sharply in recent years. Reflecting national trends, the number of recorded journeys to and from stations in Elmbridge rose by 78% between 2002 and 2010. The most recent figures from the Office of Rail Regulation reveal that, in the financial year 2010-11, 11.6 million passengers used the various Elmbridge stations.
With that in mind, the quality of the service provided by South West Trains is an important issue for local residents. The latest figures published by the consumer watchdog Passenger Focus are disappointing. In autumn 2012, it received 31,500 responses to its national passenger survey. South West Trains was rated the joint-worst train operating company for providing value for money, with just 37% of respondents expressing satisfaction. By contrast, Merseyrail achieved a 70% rating for value for money, and Grand Central achieved 73%.
There are various reasons why so many passengers do not feel they get value for money. For one, overcrowding has worsened. In 2011, the most recent year for which information is available, the company’s morning services ran at 4.1% over capacity, up from 2.8% in 2008. In the evenings, they ran at 2.4% over capacity, up from 1.7% in 2008.
Some services are much worse. According to Department for Transport data, the South West Trains 7.32 am service from Woking to London Waterloo, which I regularly take, is the second most overcrowded service in the whole country. It normally runs at 64% over capacity, carrying 471 more passengers than it is meant to.
The punctuality of South West Trains services has stayed flat over the past five years. On average, a commuter will experience at least one late train per week, and far more at certain times. On top of that, a spate of signalling problems has caused longer delays. The service is also often unable to cope with what must be described as relatively minor snowfall. Of course, some of that is Network Rail’s responsibility. Unfortunately, Network Rail is pretty hopeless too.
It remains to be seen whether the new alliance between South West Trains and Network Rail—the train company and the infrastructure operator—makes a significant difference in practice. I hope it will. We should bear in mind that, in 2012, 4,232 trains were cancelled, up 39.5% on the previous year.
Damian Hinds (East Hampshire) (Con)
Does my hon. Friend share my hope that the alliance between South West Trains and Network Rail will, among other things, elicit some co-operation on looking in depth at some of the capacity issues, particularly on trains into Waterloo? That might be fundamental to addressing some of the overcrowding and overcapacity issues.
Mr Raab
I thank my hon. Friend for his intervention. He is spot on. Too often, there has been something almost like buck passing on the issue between the train company and infrastructure operator. It is to be hoped that the alliance allows a slightly more coherent, joined-up approach, although I suspect there are limits to what even a more integrated approach can deliver.
The company’s wider performance must be set against a backdrop of sharp increases in fares. Further analysis by the Office of Rail Regulation reveals that season ticket costs for companies operating in London and the south-east rose by 46% between 2004 and 2012, which was just above the national average. Currently, a season ticket between Guildford and London Waterloo costs £3,224 every year. That does not take into account the rising parking charges at stations, an issue that is also the responsibility of South West Trains. Frankly, it is difficult for me to stand on the platform with commuters and residents and to tell them they are getting value for money. I am just not convinced that they are.
Despite rising fares and low customer satisfaction, remuneration at Stagecoach Group, which runs South West Trains, increased between 2010 and 2012 by 8.2% for directors and by 9% for executive directors. The dividends rose by 44% between 2008 and 2012, to 7.8p per ordinary share. That was dwarfed by the one-off dividend issued in 2011, when Stagecoach Group completed a return of value to shareholders of 47p per share. That was worth a grand total of £340 million, including a reported £51 million for the chief executive, Sir Brian Souter.
I appreciate that South West Trains is just one part of Stagecoach Group, but when the performance of South West Trains has been so underwhelming, such figures smack of complacency, if not outright reward for failure. What levers do the Government have under the franchise agreement to press South West Trains to do more to improve the quality of the service and value for money for customers?
Then there is a whole series of questions about the role played by central Government. Under the terms of its franchise agreement, South West Trains pays a premium to the Government for the right to run its services. That was worth 4p per passenger kilometre in 2011-2—the second-highest rate paid by any train operating company to the Treasury. The subsidy paid by South West Trains can be contrasted with the subsidy of 11.4p per passenger kilometre received by ScotRail and the 12p per passenger kilometre subsidy paid to Arriva Trains Wales. Altogether, over the three years to 2011-12, South West Trains paid a whopping £544 million in subsidy to the Treasury— £140 million more than any other train operating company. That is inevitably reflected in fares paid by South West Trains users.
Those figures raise a slew of questions. First, while South West Trains has been the largest net contributor to the Treasury through its premium payments in recent years, other train operating companies in the south-east region were still receiving a Government subsidy. Those included Chiltern Railways and Southeastern. Will the Minister therefore clarify what objective criteria are used to determine which travellers subsidise other lines, how that subsidy is calculated and what can possibly justify the stark discrepancies in the figures?
There is a second range of questions about the regional train companies group, which includes the five train operating companies that received the highest Government subsidy in 2011-12: Arriva Trains Wales, ScotRail, First TransPennine Express, Northern Rail and London Midland. In direct consequence, passengers who use those regional train companies, as classified by the Office of Rail Regulation, have enjoyed below-average increases in the cost of their season tickets.
Let me make a broader point. It is one thing for the Government to seek to control ticket prices in more remote destinations, to prevent them from soaring out of control. However, it is another thing altogether to ask passengers on South West Trains to subsidise below-average season ticket rises in the north, Scotland and Wales, when, as I have made clear, some passengers in the south-east have faced price increases above the national average for their season tickets, in return for crowded carriages and poor service.
That is not just a redistribution of wealth out of general taxation, which understandably and rightly takes place to a degree, but a massive redistribution of wealth from the fares paid by specific commuters using a specific rail service. Can the Minister understand why so many in my constituency, particularly those on low and middling incomes, will find being targeted in such a flagrant manner so unfair?
I suspect most MPs, let alone constituents, have little idea of how their rail services are funded, at least in detail—the mix between user-pays and general taxation—or the criteria being deployed and implemented for each. I wonder what steps the Government are taking to correct that frankly lamentable lack of transparency—which is inherited, I hasten to add—over a vital element of national infrastructure.
Furthermore, it seems reasonable to expect that at least some guarantee can be made that a certain proportion of the premium payments received from busy lines will be reinvested back into those routes. Can the Minister give me any transparency or clarity on that? What assurance can he provide passengers on South West Trains that the premium payments they make are properly reflected in Government investment in the line on which they travel?
Looking at the big picture, the independent review of the rail network by Sir Roy McNulty in 2011 highlighted the extent of the underperformance of the rail network nationwide. Its calculations suggested rail costs in the UK are 20% to 30% higher than they need to be. That is a major cause of concern. The report concluded that up to £1 billion of savings could be made by 2018-19, without any reduction in services. That echoed the analysis of the Office of Rail Regulation in 2010 that revealed Network Rail was up to 40% less efficient than the top European rail infrastructure managers.
I welcome the fact that the Government accepted the McNulty recommendations to end the micro-management of rail operations and give operators greater flexibility to meet passenger demand. I also welcome Ministers’ commitment to achieve the efficiencies McNulty outlined. I would like to ask for an update on the progress made in delivering—not just accepting—the McNulty recommendations. I think a lot of people listening to the debate will not understand why so much is being paid in rising rail fares when such an important element of national infrastructure is lagging behind that in Europe and, to some degree, other developed economies.
I raised the point about the impact on commuters and residents and the sense of value for money. However, there is a broader question about the competitiveness of our economy, in a vital area of infrastructure. There is a huge amount of emphasis and focus on airport capacity and there is some on roads. I fear we are failing to grasp the nettle on this important element of our national infrastructure, with serious knock-on implications for the economy.
Beyond the set of issues that the McNulty Report looked into, does the Minister have any wider views on whether and how more effective competition could be introduced, in order to promote the innovation and value for money that rail users want, and that Britain sorely needs if we are to compete economically in the 21st century, with rising competition from Latin America through to Asia?
To what extent are the changes in systems and the innovation that we want being stymied by militant union leaders such as Bob Crow, who periodically relies on brinkmanship and outdated strike laws to hold the system, and the public, to ransom? I know that Network Rail has quite a broad, serious and substantial programme of reform. I would be interested to hear the Minister’s view on the extent to which that is being held up by the National Union of Rail, Maritime and Transport Workers and other unions.
In conclusion, South West Trains provides vital services in Elmbridge, but also well beyond. I recognise that running a train service across ageing infrastructure in a time of rising demand is not an easy challenge. There is also the compound effect of rising fares on customers, commuters and residents at a time of rising energy prices and the standard of living becoming a real issue, particularly for the squeezed middle. There is not a huge amount of extra money in the pot. In fact, we are trying to be as frugal as we can, given the huge debt problem inherited from the previous Government.
However, it is important that the managers and directors of South West Trains hear the message loud and clear that their passengers demand better value for money. Commuters pay a substantial and rising share of their income to get to work. It is right and understandable that they expect a fair deal in return. That must comprise reasonable fares, trains that run on time and decent travel conditions. Government must also play their part by providing a coherent overarching framework that promotes innovation and productivity, and transparency in relation to the funding arrangements, in particular by ensuring that passengers on South West Trains are not treated—let us talk frankly—like a cash cow to subsidise other parts of the network, without getting a fair deal in return such as investment in the line and the level of fares.
To sum up, it will take a combined effort to ensure that my residents, all those travelling on South West Trains and the country as a whole get the rail network that we need for the 21st century.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I congratulate my hon. Friend the Member for Esher and Walton (Mr Raab) on his contribution, and I will do my best to answer the points he raised.
As hon. Members know, the South West Trains franchise is primarily based on services operating into and out of the nation’s busiest terminal station, London Waterloo, to a wide range of destinations. It includes the provision of one of Europe’s most intensive suburban and commuter networks, servicing more than 200 stations with more than 1,700 trains a day. The route network, which is managed by Network Rail, extends to 643 miles, with 1,375 sets of points and more than 4,000 signals. The network is therefore complicated.
One issue with the railways is that of success. We have seen a fantastic growth in passenger numbers over the past 15 years; across the country, numbers have just about doubled. They are where they were in 1929, on a network that is about the half the size that it was then. That is a huge operating challenge for Network Rail and the train companies, and it means that there is sometimes no longer the space to pick up on problems when they occur. Every train that is late has a knock-on effect on every other train all the way behind it.
I now turn to the operational performance of the South West Trains franchise, as my hon. Friend raised that matter. According to the public performance measure, which is used to record arrival within five minutes of the scheduled time, its current performance is 91.4%. That is a moving annual average. My hon. Friend may be interested to know that, for the latest period, 67% or thereabouts of arrivals were within one minute of the scheduled arrival time.
The company maintains its position as the most punctual railway south of the Thames. It is important to make that point, as it might be of some comfort to my hon. Friend, given his concerns. Its operational performance is better than that of Southeastern, which had a performance figure of 91.2%, while the five-minute performance figure for Southern was 88.3%, and it was 88.7% for First Capital Connect. The company’s joint performance improvement plan target of 92.7% of trains over the course of the year arriving at their destination within five minutes of the published arrival time will unfortunately be missed by around 1%, but that is still a better performance than other train companies in the south-east. However, that is not to say that we are complacent about performance in any way.
My hon. Friend asked what levers we had. In my capacity as Minister for rail performance, I regularly meet train companies and Network Rail not only to go through performance generally across the network, but to pick up individual problems. For example, I had a meeting this morning with East Coast Trains about problems on the line north of King’s Cross. Such meetings take place regularly.
There are, of course, safeguards in the franchise regime. My hon. Friend may have seen that, in the case of London Midland, we exercised our right to invoke penalties—or at least to secure passenger benefits that London Midland had to pay for—as a consequence of its poor performance on the network, which was below acceptable standards.
As and when train companies fall below the specified standard, we will invoke measures to ensure that passengers effectively get some compensation for that poor performance. Ultimately, of course, a franchise can be removed from a train company, although the performance has to be really bad for that nuclear option to be exercised.
The autumn 2012 national passenger survey by Passenger Focus showed that 85% of passengers were satisfied overall with South West Trains, which was a higher figure than that for any other train company south of the River Thames. Another survey was undertaken—I think by Which?—but it was not statistically valid. The Passenger Focus survey is independent and properly validated, so it is the one to which we should pay attention.
My hon. Friend is right to say that we need to do more to drive up performance, which is one of the reasons why we are pursuing the concept of alliancing, which has been piloted in the South West Trains area.
Mr Raab
There is a discrepancy between the passenger surveys that are being quoted, because the autumn 2012 Passenger Focus survey rated South West Trains as the joint worst for providing value for money—I think that is the most recent survey—with a satisfaction rating of 37%, which suggests a slightly worse picture than the Minister indicates. If customers are giving such a poor indictment of the state of the service, despite the punctuality statistics that the Minister has kindly cited, is he suggesting that those customers have got it wrong? Is he suggesting that they are not appreciative enough of the service? I travel on the line every day, and I suspect that those people are right. I suspect that I am among the more than 60% who do not think that we get decent value for money.
Norman Baker
As I understand it, the figure my hon. Friend cites is about value for money. I was talking about overall passenger satisfaction with the network, which takes account of a wide range of factors, including, for example, the information given on station platforms and the cleanliness of trains. A wide range of factors make up Passenger Focus’s overall figure. I will drop him a line to clarify exactly what the various surveys say so that he is familiar with them and able to report back to his constituents with full knowledge of the nuances of the various surveys.
Alliancing was piloted in the South West Trains area, and it was recommended by the rail Command Paper as a key mechanism for aligning incentives in the rail industry and driving out costs. Alliancing was supported by Sir Roy McNulty’s report on rail value for money and by Richard Brown’s review of rail franchising.
With support from the Secretary of State, South West Trains and Network Rail commenced operation of the deep alliance, a commercial arrangement between South West Trains and Network Rail, on 29 April 2012. I make it clear that we as a Government—and therefore the taxpayer—take no downside risk in the alliance, but above a threshold, we receive funds from profits earned through efficiencies.
The alliance has established a day-to-day management relationship between the two core organisations that represents an unprecedented level of co-operation between track and train to improve performance and efficiency on the route. The alliance’s scope includes the operation and maintenance activities of the Network Rail Wessex route and all South West Trains activities other than IT. The alliance does not extend to Network Rail’s capital enhancement or renewals schemes, although incorporating those activities and realising efficiencies from them remains a long-term aim. Initial financial baselines of costs and revenues for both parties have been agreed by the alliance. By reference to those baselines, the parties share the risk and reward for the financial performance of the alliance through a pain-gain sharing arrangement. If the gain is sufficient, the Government also benefit on behalf of the taxpayer.
My hon. Friend mentioned fares, and we are all acutely conscious of the need to try to bring to an end the era of above-inflation rail fare increases, as the Government has clearly set out. We inherited a situation in which the previous Labour Government had driven up rail fares by above inflation under a process that started, I think, in 2003-04. The difference between the previous Government and this Government is that we are investing heavily in the network to try to provide extra capacity to address some of the issues that he rightly raises on behalf of his constituents, whereas fare increases in previous years were simply a measure to provide extra funds to the Treasury for other uncertain purposes. We now have the biggest rail investment programme since Victorian times, and the South West Trains area, like all others, will benefit.
The present fare arrangements, which we seek to bring to an end as the Network Rail efficiency savings kick in, allow regulated fares to rise by 1% above the retail prices index each year. Importantly, the formula is exactly the same as that applied nearly all the way through the previous Labour Government. The formula is applied equally across England, so there is no difference between what we do for the South West Trains franchise and what we do for Northern Rail or TransPennine Express. They all use RPI plus 1, unless there are exceptional circumstances, such as under the previous Government when the Southeastern franchise used RPI plus 3 for a while to pay for the Javelin high-speed train. The subsidies for First ScotRail and Arriva Trains Wales are not a matter for us, as they are entirely determined by, respectively, the Scottish Government and the Welsh Assembly. What they do with their trains and their money is up to them.
Through the franchising process, we also try to ensure that we get the best value for taxpayers’ money, because the more money we get in, the more we are able to invest in addressing the capacity and crowding problems to which my hon. Friend rightly referred. There is a competitive tendering process for each franchise, and I am sure that he accepts that it is in our interest to get the best possible price for each franchise. If that means that we are securing money through a premium from the franchise holder, that is a good outcome for the taxpayer. There are clearly some areas of the country in which the train service will not turn a profit, meaning that a premium is not possible. Under this Government, we have seen a general trend towards ensuring a better balance between the fare payer and the taxpayer. Driving out inefficiencies leads to the opportunity to try to correct some of the imbalances that exist across the network.
Mr Raab
The Minister is most generous with his time. The point I made in my speech was that the subsidy from South West Trains users is 4p per passenger kilometre—that is what fare payers pay back to the Government, presumably for wider investment in rail infrastructure. If we look not just at Scotland and Wales, but at Northern Rail, London Midland and Southeastern, they receive a subsidy from central Government. Will the Minister explain how that is determined? On what possible basis can those discrepancies be justified?
Norman Baker
Obviously, nearly all the franchises were let under the previous Government so, in a sense, we inherited the arrangements that apply to the various franchises across the country, and they cannot be unpicked during the period of a franchise. However, we can try to influence future franchises, and the Secretary of State will make a statement to the House in the near future about how we are taking forward the franchising regime.
Inevitably, some lines are profitable and some lines are not, and that is simply down to market forces. A concentrated commuter network or a highly attractive route—say, from London to Manchester—is more likely to be profitable than a route that serves a large number of small stations, such as between Inverness and Wick and Thurso. It is difficult to envisage how that could ever make a profit, because it is a long, straggly line that few people use. Market forces therefore inevitably apply, but our job is to try to ensure that we secure the maximum return from the private sector to enable us to reinvest in the network for the future.
My hon. Friend mentioned Brian Souter’s salary but, on the other hand, his company is now paying a premium to the taxpayer. In a sense, the private sector system seems to be working. Brian Souter has invested heavily. He is taking the rewards for himself, which he is entitled to do, but he is also paying a premium to the taxpayer that enables us to reinvest. The system seems to be working, and we want to get more train companies paying money to the Government. If we can do that, because efficiencies have been driven in and inefficiencies have been driven out, it is all to the good.
I am afraid that I have not been able to say anything about investment, but there are large investment plans for the South West Trains area. I will happily drop my hon. Friend a line to set out what they are, but they include longer platforms and trains, and in due course steps to improve the situation at Waterloo.
Mr Philip Hollobone (in the Chair)
We have arrived at our destination and I am afraid that our journey terminates here.
Fuel Poverty (Wales)
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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.
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Chris Ruane (Vale of Clwyd) (Lab)
I rise to speak about fuel poverty in Wales. Fuel poverty is defined as when 10% or more of a household income is spent on fuel. Wales has the highest rate of fuel poverty in the whole UK, with 420,000 households, which is 30%, in fuel poverty. To put that in perspective, the figure compares with just 11% in the south-east, so that for Wales is nearly three times higher. The ward in Wales with the highest rate of fuel poverty is Rhyl West, which is in my constituency. The ward with the 10th highest rate is Rhyl South West, where I have many relatives, in which I grew up on a big council estate.
In Rhyl West, 900 hotels and guest houses have been turned over to houses in multiple occupation, and the landlords have made no investment to insulate and improve those homes. They have made money out of misery, charging £85 a week in housing benefit for substandard homes. That is a big problem in my constituency and in Wales.
There is a perfect storm, because disposable income in Wales is going down and fuel bills are going up. Since 2010, the average household fuel bill has gone up by £300 a year. In the past year alone, it has gone up by 7%, and over the next two years, it will rise by a further 7%.
Jessica Morden (Newport East) (Lab)
Does my hon. Friend agree that many of our constituents’ disposable incomes will be hit even harder by the impact of the bedroom tax in April, when people will be forced to choose between heating their homes or cutting down on food in order to pay the extra rent?
Chris Ruane
I agree entirely and will come to that issue shortly. The TUC in Wales reports that Wales has the lowest levels of disposable income, but the highest falls in living standards. The situation is going to get worse, as my hon. Friend rightly said, because council tax for the poorest will be introduced, although the Welsh Government have mitigated the effect of that by setting aside £22 million for the next year to stop the rise hitting the poorest. Owing to the bedroom tax, someone who has lived in their council house for 50 years but does not want to move, because they love their house and community, will have to find an additional £25 a week. The benefits freeze of 1% could result in people on benefits actually freezing. There is also wage stagflation in Wales.
At the same time, the Government and their allies are giving £44,000 a year extra to a person who earns £1 million a year. The total package is worth £3 billion. Imagine what good work could be done if that money were used to employ unemployed people to insulate the homes of the poorest and most vulnerable.
Glyn Davies (Montgomeryshire) (Con)
Does the hon. Gentleman accept that for the whole 13 years of the previous Labour Government, the top rate of tax was 40p? Next year it will be 45p. How on earth can he stand up and say what he just said?
Chris Ruane
I can do it quite easily and I will do it again. Whichever way the hon. Gentleman slices it, the Labour Government introduced a rate of 50%, but the Conservatives and their Liberal allies have taken it down to 45%. That means additional money in the pockets of millionaires and billionaires, and less money in the pockets of the most vulnerable. That is Robin Hood in reverse; it is Robbing Hood—taking money from the poorest and giving it to the richest.
I do not want to sound too negative, so let me say what could be done. Local authorities need to work with the Department of Energy and Climate Change and the Department for Communities and Local Government, and more widely across the Government, to ensure that they play a full role in encouraging collective switching, because that process can lead to big discounts of £200. DECC needs to promote that more with local authorities, because people are not switching at the rate they should be. There might be many reasons for that. For example, an elderly person may be going blind or have early-onset dementia, while poorer people may be functionally illiterate or have no access to computers. There is a whole swathe of people who should be switching but are not, so local authorities should be co-operating with DECC and other Departments to organise collective switching.
Local authorities should introduce community energy initiatives, perhaps with the encouragement of central Government grants. A lot can be done by local authorities. In my constituency, Denbighshire county council used £35 million of prudential borrowing to upgrade fully its 3,000 council houses with double glazing, gas and insulation—it did a fantastic job. It also co-operated with me and Crispin Jones, the director of Eaga Partnership in Wales, to connect 125 former Ministry of Defence soldiers’ and officers’ houses to the gas grid.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I congratulate the hon. Gentleman on securing this important debate. Before I was a Member, I used to work for Citizens Advice. As part of that role, I was strategic adviser for National Energy Action Cymru, and I also served on the Welsh Government’s fuel poverty advisory group. It was of great interest to us that Wales is a net exporter of electricity, producing nearly twice the amount we need for ourselves, yet we have the highest levels of fuel poverty. Can the hon. Gentleman explain that discrepancy?
Chris Ruane
I will come on to that point, and there is a particular north Wales angle to the debate. I pay tribute to the hon. Gentleman’s work with Citizens Advice and on fuel poverty.
A lot can be done by local government, but more can be done by national Government. The Labour Government introduced the winter fuel allowance and helped pensioners in the middle of winter by giving them £200 or £300 to pay their gas and electricity bills. That Government also reduced VAT to 15%, but the Conservative Government, with their allies, increased it to 20%. In 2001, Labour introduced the home energy efficiency scheme. Over the past 12 years in Wales, £150 million was spent insulating and improving the energy efficiency of 127,000 properties. A property that has been improved can cut its gas and electricity bills by up to 25%.
Roger Williams (Brecon and Radnorshire) (LD)
The hon. Gentleman talks about VAT but, of course, VAT is charged at 5% on energy and, as far as I know, it has stayed at that level during this Parliament.
Chris Ruane
The hon. Gentleman might be right about that, but wider cuts are affecting the disposable income of all families, especially the poorest.
The Prime Minister talks a good talk but he does not walk a good walk. He promised from the Dispatch Box that he would force the energy companies to offer the lowest tariffs to the poorest people, but nothing happened—he did not know the detail. The Government need to do much more. Pressure needs to be put on the energy companies and the big bonuses they are handing out at the same time as they increase prices massively. In the past year, two chief executives have left their energy companies. One was given a £13.5 million golden handshake and the other got £15 million. That is obscene at a time when people will be freezing to death—dying of hypothermia in their own homes.
There needs to be an inquiry into the ups and downs of gas prices. When supply is tight, gas prices shoot up, but when it is loosened, they gently come down. The time lag and price lag need to be fully investigated, because people are being ripped off. If customers are middle class and have a steady income, so they pay by direct debit, they are offered a discount of £100, but if people have to fill their electricity or gas meter with 50p and £1 coins, they are charged the maximum, and that is wrong.
There needs to be certainty and unity within the Government on energy policy. We see the antics of Ministers who are opposed to solar farms in the fens. There are MPs—some from north Wales—who are opposed to offshore wind farms, MPs who are opposed to onshore wind farms, and MPs who are opposed to the feed-in tariff. They know what they are against, but they do not know they are for, and the uncertainty and lack of unity has led to a lack of investment in the renewable energy market in my constituency and throughout the UK.
Chris Ruane
I have given way to the hon. Gentleman once; that is all he is getting from me.
The Government have introduced the energy company obligation, for which I give them credit, and £1.2 billion has been set aside for the whole of the UK—[Interruption.] I urge the Minister—he is yakking away over there—to ensure that Wales gets its fair share of that ECO money.
Susan Elan Jones (Clwyd South) (Lab)
I wonder whether the hon. Member for Brecon and Radnorshire (Roger Williams) was going to point out that the 5% VAT rate for energy came about due to a successful Labour rebellion in the dying days of John Major’s Government. There may be a good analogy there for us in what will hopefully be the dying days of the current Government.
Susan Elan Jones
I am grateful to the hon. Gentleman for his noise.
Does my hon. Friend agree that this matter is one of the most moral issues because it disproportionately affects people on low incomes and pensioners? That is a really important issue right across Wales.
Chris Ruane
Those affected are the most vulnerable and elderly pensioners, and, specifically in Wales, they are also those who are off grid but cannot get connected to gas because of topography, geology or geography. Dyserth is an off-grid town in my constituency. I was successful in getting gas connected to Bodelwyddan, because it was low-lying, but unsuccessful with Dyserth.
As the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) said, Wales is a net exporter of energy. North Wales, in particular, is playing its role in renewable energies, and my constituency will have the biggest array of offshore wind farms in the world. I switched on 30 turbines at North Hoyle some eight years ago, and when he was Secretary of State for Wales, my right hon. Friend the Member for Neath (Mr Hain) switched on another 30 turbines at Rhyl Flats. Behind those, we will have 200 turbines at Gwynt y Môr and the 2,000 wind turbines at the Rhiannon wind farm array. When I was switching on the North Hoyle turbines, the Prime Minister was describing them as “giant bird blenders”, at the same time as sticking a mini turbine on his own roof in Notting Hill. He was looking both ways.
North Wales has in Wrexham the Sharp solar panel factory, which is the biggest producer of solar panels in western Europe. Sharp made its future plans when Labour introduced the feed-in tariff. It cranked up production and got all the workers in place only for the current Government to say that they were going to scrap the tariff. We and companies such as Sharp need certainty.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Will the hon. Gentleman give way?
Chris Ruane
The Minister will have plenty of time to address all these issues later.
North Wales has Wylfa nuclear power station, which will hopefully be replaced shortly. In Dinorwig, we have Electric Mountain, which is a hydroelectric power centre with a lake at the top of the mountain. It can produce electricity in seconds to respond to demand at peak times, such as at the end of “Coronation Street”. My constituency has all these fantastic renewables. Looking to the future, we have the OpTIC centre, which is working on fusion power. In the rest of Wales, we have the possibility of the Severn barrage, which could create 5% of the UK’s electricity needs. There is the Irish interconnector from Dublin to Prestatyn in my constituency, which will allow energy to go from north Wales to Ireland. We also have non-renewables in Wales, as we have the gas terminal in Milford Haven that brings a great deal of gas to the UK, as well as the Connah’s Quay gas-fired power station in north Wales. We create energy in Wales, but we have the highest energy bills in the UK. It is the same with water: we capture water and export it, but we have the highest water bills in the UK.
With 420,000 families living in fuel poverty, Wales already has a higher proportion of households in fuel poverty than any region in England. The problem will only get worse unless the UK Government act. The Welsh Government are doing what they can to improve energy efficiency in Wales and they have an excellent record. However, on the fundamentals of fuel poverty—lower incomes and rising bills—it is the austerity and inaction of the Tory-led Government that are hitting Welsh households hard. The Chancellor has an opportunity in tomorrow’s Budget to ease the strain that his policies are putting on families in Wales. He should adopt Labour’s proposal to force energy companies to pool the power that they generate and make it available to any retailer, as well as the requirement that energy companies put all over-75s on their cheapest tariff. In Wales, that would mean more than 250,000 pensioners being up to £200 better off. That proposal could be part of a Budget that would be much fairer than last year’s, which everybody, including some Government Members, rebelled against, and which asked millions to pay more so that millionaires could pay less.
Roger Williams (Brecon and Radnorshire) (LD)
It is a great pleasure to serve under your chairmanship, Mrs Riordan. I congratulate the hon. Member for Vale of Clwyd (Chris Ruane) on securing this important debate. It is useful to remind ourselves that cold weather means misery for the many people who have to choose between heating their home or finding something to eat. That situation needs to be addressed, and I am sure that the Minister will set out what the coalition Government are doing.
The hon. Gentleman is sometimes known as the hon. Member for Rhyl because of his passion about his constituents there. I have fond memories of Rhyl, because I spent the first holiday that I can remember there, although during that time I unfortunately also had my first tooth extraction, so my memories are mixed. I am sure, however, that the hon. Gentleman would want me to say that Rhyl is a very fine place to have a holiday.
The hon. Gentleman mentioned the scheme in his constituency whereby MOD houses have been joined up to mains gas. One way of remedying fuel poverty is to ensure that as many people as possible have access to mains gas. Many people in my constituency do not have that benefit and suffer as a result. Will the Minister say whether there are any plans for communities in my constituency, such as Coelbren, Abercraf or Llangynidr, to have access to a scheme that would subsidise connection to the mains, because that would make a great deal of difference to those communities?
My second point is about cold weather payments, although this is not directed specifically at the Minister because his Department is not responsible. In their last two years of existence, the Labour Government increased the cold weather payment from £8.50 to £25. That was perhaps seen as a sweetener prior to the general election, but I am pleased that the coalition Government have made that £25 payment permanent, because it makes a real difference to a number of our constituents. However, some of our constituents do not benefit to the extent that they should, as eligibility for the payment is worked out by linking each postcode area to a particular weather station.
That system works reasonably well when an area is linked to a weather station that has the same type of weather and is the same height above sea level. Unfortunately, Coelbren in my constituency is badly served by the process. For a very long time—during my time in this place as well as that of my predecessor—we have campaigned for it not to be associated with a postcode that runs all the way down to the sea at Baglan. Coelbren is linked to the weather station at St Athan, which is almost at sea level as well.
Coelbren, which is 800 feet above sea level, often does not benefit from cold weather payments, whereas Ystradgynlais, which is at an altitude of probably 200 or 300 feet below, does benefit from the payments, because it is linked to Tredegar, believe it or not. While I do not want to do any disservice to Ystradgynlais at all, because I believe its linkage is fair, the linkage of Coelbren to St Athan is undoubtedly unfair. The area of its postcode is very long and thin, and I know that the hon. Member for Swansea East (Mrs James) would agree, because she has local knowledge of it.
I shall be taking a group of constituents from Coelbren to see the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), to see whether an exception can be made for that area, because it has been done a great disservice. It is an old coal-mining area with a lot of local authority housing that has not been brought up to the best standards of heat efficiency. A lot of elderly people living there would benefit from cold weather payments, so we shall make a last-ditch appeal for Coelbren to be served better by cold weather payments, because that would make a lot of difference to those people’s comfort and to whether they are in fuel poverty.
Mrs Linda Riordan (in the Chair)
Order. As allowed by Mr Speaker, I shall now impose a time limit. To give all Members who wish to contribute to the debate the opportunity to do so, I intend to allow each speaker seven minutes. I call Nia Griffith.
Nia Griffith (Llanelli) (Lab)
Thank you very much, Mrs Riordan. The figures for Wales on fuel poverty are very stark indeed because more than a quarter of all households are affected, with a much higher figure in some areas. The housing stock in many areas is fairly old, and we also have a prevalence of coal fires. If people have a coal fire, they need an air flow to keep it going, and consequently we have had many poorly insulated properties. The Welsh Government are doing a good job of trying to remedy the situation through the Arbed and Nest programmes, but the legacy remains, and some homes are very hard to heat and to make energy-efficient.
We also have the major problem that a number of homes are not on mains gas, and they are not only isolated farmhouses, but whole villages. That is often the case because those villages were mining areas in which coal was the predominant fuel, meaning that gas was not seen as a priority.
Jonathan Edwards
The hon. Lady and I represent the area that contains the anthracite coal field, where the gas network was vehemently opposed. We are all dependent on solid fuels in my village of Penygroes, for instance, and throughout the Amman and Gwendraeth valleys, which she represents. Does she agree that it would be really helpful if payment of the winter fuel allowance was brought forward for those who are reliant on oil, gas bottles or coal so that they would be able to buy those fuels in the summer, when they are cheaper?
Nia Griffith
The hon. Gentleman is absolutely right. The November payment is made at exactly the time when solid fuel is at its most expensive, and it would be much better if people had the money earlier so that they could then spend it in preparation for the winter.
There is a particular problem for homes that are not on mains gas, because that limits people’s choice of fuel. They might use solid fuel, more electricity, or bottled gas for cooking. More recently, of course, people have been using liquefied petroleum gas, but some areas face a problem because one supplier of LPG gas has a monopoly. I corresponded with Chris Huhne about that matter when he was Secretary of State for Energy and Climate Change, so I hope that the Minister will be able to continue work to examine LPG competition, particularly when people are trapped into continuing with the same supplier because a whole estate is supplied by one supplier, which creates a difficult situation.
The major problem involving some of the insulation and energy efficiency programmes is a real slap in the face when that is combined with the cuts to the feed-in tariff that the Government brought in. Housing associations, which house some of the most vulnerable people who are often in fuel poverty, were going to roll out a comprehensive solar panelling programme to lower people’s bills and generate additional cash through the feed-in tariff, which would then enable them to improve yet more homes. Following the cut, those programmes are completely gone, which is a real tragedy for those people who would have benefited.
I congratulate the Government on ensuring that cold weather payments keep up with inflation, but Wales rarely experiences seven continuous days with an average temperature of 0º. We are far more likely to see the temperature fluctuate, so the payment is not the answer that we would like to think it is. It is definitely important for emergencies, but it is not something that the Government can be proud of because, at the same time, they have taken £100 off the £400 winter fuel allowance for the over-80s, and £50 off the £250 winter fuel allowance for other pensioners. That has left people over the past two years with an even greater struggle to pay their bills than previously.
It is worrying that the Government have not got a grip on energy companies that are letting prices go up and up. They really need to step in and have a far stronger regulator, which is certainly something that Labour would be doing in government. One thing that has distressed me most is the issue of SWALEC—now SSE—which is a large supplier in south Wales. Because many people tend to be loyal to their original company, they have not switched from their supplier, and that particularly applies to people who are perhaps elderly, or not in a position to make price comparisons on a website. Such people often stick with their original supplier.
The supplier has chosen to impose a standing charge of £100 for people’s electricity, and if they also have gas supplied by the company, they do not get a decrease or a discount—they pay another £100 for the privilege. When I took that up with the supplier, saying that it was absolutely outrageous that the standing charge had rocketed to the extent that the poorest families were paying £200 before they used even 1W of electricity or one therm of gas, I received the answer that the practice was encouraged by the regulator, because it would simplify things. However, it is clear that that is a regressive way of charging people, because those who are trying to scrimp and save—such people are often single pensioners, who make a terrific effort, perhaps by heating only one room and being very careful about what they use—are being hit the hardest.
I am cynical about the motives behind the charge, and one reason why is that I am aware that energy companies know that politicians are trying to suggest that they might offer the lowest tariff to the most vulnerable customers. If the lowest tariff is upped, a buffer is created against politicians doing that. Additionally, bills go up every time energy prices rise. Again, as politicians, we would like to see energy companies decreasing their charges when prices fall, but of course a standing charge will not be decreased. It seems to me that that is an extremely sly ploy to fix a price that will not be hit by the whim of politicians and that will escape such scrutiny. If that is what the regulator is recommending, I ask the Minister to have a serious discussion with it about whether that is the best way forward. I have singled out one company, because it is one in Wales whose actions hit a lot of my constituents.
Chris Ruane
The company that my hon. Friend has singled out, SSE, is the company that spent £15 million on a golden handshake for its chief executive.
Nia Griffith
That is a real inversion of priorities.
Many other companies are carrying out that practice. In fact, there are few that offer tariffs that do not involve a fixed standing charge. However, the one to which I am referring is particularly obnoxious, because a high proportion of the money that a low-income family ends up paying goes on just the standing charge.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
I have a brief question arising from the previous intervention. Will the hon. Lady inform us whether the contracts that resulted in those big pay-offs were entered into under the previous Government?
Nia Griffith
I expect that the hon. Gentleman will answer his own question when he has the chance to speak later, but it is certainly not something that I am going to deal with now.
I want to get back to the families I have been dealing with and the people I see from day to day. I ask the Minister to examine very carefully the ways in which energy companies set their bills and to consider whether there is any way in which he can alleviate some of the desperate fuel poverty that we are seeing in our communities.
Glyn Davies (Montgomeryshire) (Con)
I look forward to speaking under your chairmanship, Mrs Riordan. I thank the hon. Member for Vale of Clwyd (Chris Ruane) —I, too, sometimes think of him as the hon. Member for Rhyl—for bringing forward for debate one of the most important issues that we face as Members of Parliament. I may not have agreed with everything that he said in his presentation of the argument, but there is no doubt at all that fuel poverty—the choice between eating and heating that so many people now face—is one of the biggest challenges that we have to address.
Much of what happens is probably beyond our ability to deal with. I do not want to make a political point, but what we saw between 2004 and 2009 was an absolutely massive increase in fuel poverty. We have seen the Library figures. The number of households in fuel poverty in this country increased from 2.5 million to 5.5 million between 2004 and 2009. The reason why I do not want to make this a political point—I suppose I could do if I wanted—is that I accept that an awful lot of that was probably beyond the ability of the former Government to control.
Chris Ruane
If the hon. Gentleman has the figures with him, will he tell those of us gathered here today what the figures were in 1994—the first figures in the document—in comparison? They were far higher.
Glyn Davies
The first figures are for 1996, but I just made reference to the figures for the period from 2004 to 2009, which saw a massive increase. I simply wanted to draw attention to the fact that even though the Government at the time would have been very committed to protecting people from fuel poverty, there were international conditions that resulted in a massive increase. That is why I congratulate the hon. Gentleman on bringing forward a debate on such an important issue. It is one that faces us all. It is a particularly serious issue in Wales, and there are a number of reasons for that.
Clearly, one reason is that we have less insulated housing stock in Wales. The Welsh Government are seeking to deal with that issue, and here at Westminster we have the drive towards the green deal. Across Britain, we are tackling the issue of home insulation, which is massively important. However, there is one issue that we must always be careful of: all these things add costs to new housing; they make it very difficult to build. One of the worries that we have is that we should be focusing all our attention on making sure that properties are well insulated. That is why I so disagree with the sprinkler system that is being introduced in Wales. That puts a high value on new houses when that value should be coming from making houses more insulated.
The second issue is the higher dependence in Wales on oil, which is more expensive. That is an historical issue. And of course, in Wales—this is a big issue in Rhyl and certainly in the north of my constituency—average wages are lower, which increases the level of fuel poverty.
I commented initially on the huge rise in fuel poverty between 2004 and 2009, much of which was due to the international market, which is outside our control. We are seeing now the pressure that comes from international gas prices—probably the biggest contributor to the increase in energy prices that we have seen—which are outside our control. That means that we must be particularly careful about the additional things, which might not have quite as much impact but are within our control. That is why I want to refer again to an issue that I think my right hon. Friend the Minister will be tired of hearing me talk about: the impact of the environmental taxes that are put on the bottom of our energy bills. We are always told how little a factor that is compared with the international market. We cannot influence the latter, but we can influence the former, and I want to explain why we should reduce that increase.
Mr Mark Williams (Ceredigion) (LD)
I welcome my hon. Friend’s comments. He talks about action that we can take. One thing that we can do on oil prices is actively encourage, particularly in rural areas, the development of oil syndicates. The Department of Energy and Climate Change has taken some action on that. Would he encourage DECC to take more action to encourage the development of oil syndicates and get those prices down, particularly in rural areas that are off-grid and have no other options?
Glyn Davies
I thank the hon. Gentleman for his intervention and I certainly agree with him. I have encouraged DECC to do a number of things recently in relation to energy and oil prices. One thing it should not be doing is building wind farms and destroying the countryside in mid-Wales.
We must consider seriously the issue of shale gas. I know that there are an awful lot of conditions and we must be very careful about how we go forward with shale gas, but as a nation we must take the issue seriously. We have to take it forward and understand whether there is potential there to help us with energy prices.
Nia Griffith
Will the hon. Gentleman accept that in areas such as mine, where we have the Loughor estuary, which is famous for its cockles, the sort of drilling and exploration to which he refers could have devastating effects, both in terms of flooding along the coast and on the industry itself, because of the disturbance of the wildlife?
Glyn Davies
The hon. Lady makes a fair point, which is why I think that we must be incredibly careful. We have to do a great deal of research. It is right that Cuadrilla, the company involved, is making certain that it goes to an awful lot of trouble. If there is somewhere in Britain that is unsuitable, we should not be allowing shale gas drilling there. We can allow it only where the potential for bringing down energy prices is such that we have to go forward with testing and seeing what the potential is.
Most of my objection to onshore wind is due to the impact on not only my constituency but the whole of mid-Wales and, indeed, much of rural Britain—much of the wild land of Britain. There is no doubt at all that the level of subsidy that is paid to the international companies that are going forward with the proposals is obscene. It is the biggest transfer of money from the poor people, very often, to massively rich foreign development companies. This transfer of money is the opposite of what we should be seeing, the like of which I have never seen before. The whole thing is obscene. The Government have reduced the level of subsidy by about 10%—I think the order might have been signed off in the past couple of weeks—but there is much more scope for that.
Other hon. Members have referred to the level of subsidy in relation to solar panels, but the same money will produce an awful lot more solar panels. There was a shock to the system when the new levels were brought in. There was what we hoped was a temporary slowdown in the number of solar developments that went forward. My sense is that that is recovering. I think we are now getting a lot more development for the same money.
The trouble with onshore wind is that it hits people in two ways. One is fuel poverty. Onshore wind hits the poorest people; indeed, it hits everybody. The Government force them to hand over money that is then given to mega foreign companies, which can bribe their way, through community benefit, into the hearts of local people. Well, in mid-Wales, that has not been successful; it is having no impact at all.
The other aspect is that energy prices are driving jobs overseas. More and more companies find that the cost of the energy they need to run their businesses is just too high. We talk about all the jobs that renewable energy and onshore wind will create, but the truth is they will drive jobs and business overseas—not just to Europe, but outside Europe, and that will be devastating.
In general, however, today’s debate is about fuel poverty. I am very supportive of what the hon. Member for Clwyd West—
Glyn Davies
Perhaps we should settle on Rhyl. This is a right issue, and it is hugely important. I congratulate the hon. Gentleman on raising it, and I think we will return to it.
Mrs Siân C. James (Swansea East) (Lab)
Fuel Poverty in Wales has reached an unacceptably high level, and despite much intervention by the UK and Welsh Governments, the problem is not improving; indeed, it is increasing at an alarming rate. We have heard some of the facts and figures, but according to Fuel Poverty Charter in Wales, 33.5% of the population or, in numerical terms, 425,161 Welsh households spend more than 10% of their income on heating bills. That figure grows daily, and Transform UK predicts that more than 9 million households across the UK will be in fuel poverty by 2016. What we really need in Wales is energy-efficient homes, decent incomes and affordable, reasonably priced utility bills. If we address those three issues, we will have a fighting chance of reducing fuel poverty for many of our constituents.
Fuel poverty is nothing new to us, because we have a legacy of poor housing stock. The quality of housing can be improved only if there is investment now to enable public and private landlords to drive up standards and ensure that all housing stock is dry and safe and meets basic needs. It is depressing to hear people in our surgeries talk about living in damp, poorly insulated homes. The excuse they are always given is that the damp is the result of condensation. I am sad when that happens, and it happens with alarming regularity.
Year on year, housing is getting damper and more run-down, and energy is disappearing out of poorly insulated homes and inefficient heating systems, which means that costs are rising. We should seriously consider giving further support to the Energy Bill Revolution campaign, which comprises more than 100 charities, organisations, private businesses and unions that are calling on the Government to use money raised from the carbon tax to fit all houses with effective insulation to stop heat being lost through roofs and walls. The group says a nationwide programme, insulating all homes across the country, could save the average family £310 a year on its fuel bill.
However, improving housing stock alone will not be enough. The Government need to work harder at bringing down the everyday costs of running our homes, cooking our meals and keeping warm. National Energy Action says that, as of March 2012, the average gas and electricity bill for households in Wales was more than a massive £1,250 per year. Many consumers could get better deals if they changed tariffs. Many of my constituents are adept at switching, which they do with a regularity that amazes me, but I am one of those people who rarely changes supplier. I have been with the same energy provider since the day I got married, and, for better or worse, I have stuck it out with that company because I know it. However, even I am seriously thinking about swapping. None the less, that is a big step, and many people cannot comprehend the bewildering number of tariffs and offers available. As I say, switching is often the most difficult step to take.
Mr Mark Williams
I know how much work the hon. Lady does on this important issue in her constituency. Does she accept that we have a particular problem in rural areas? We have no choice of energy sources, and most of my constituency is not gas-enabled, so we still rely on oil companies and suffer from what are sometimes their monopolistic practices.
Mrs James
I will carry on.
Although I welcome the Government’s plan to introduce a scheme in 2014 under which utility companies must automatically swap people on to their cheapest tariff, I am concerned that that will be a price too far for some. Once the scheme is introduced, energy companies will remove the discounted tariffs available to those who can swap at will, and I fear that those people will then pay even more for their energy.
The problem of fuel poverty is exacerbated in Wales because we are also dealing with lower incomes and a higher prevalence of part-time work. Both factors make it difficult for families to pay their bills and have money left over to put food on the table. According to the Office for National Statistics, wages in Wales in 2013 have sunk back to 2003 levels. If the Government put more focus on the economy and created more full-time jobs, they would help my constituents and those of every Member in the room enormously. Only by providing full-time jobs with decent wages can we help ensure that people in Wales can afford to meet their heating costs.
The green deal does not go far enough. It is far from perfect, and it is not doing enough to address the problem of fuel poverty. It might be useful for households to take out a loan to carry out home improvements, but the interest rate is set far too high, at 7%. It is odd to expect a home owner to pay up front for an assessment of their home, typically at a cost of £80 to £150. How does that help someone who is already struggling with their bills? The short answer, of course, is that it does not.
The Welsh Government have set a target of ending fuel poverty by 2018, and they have implemented the Nest scheme. Although I am pleased with the scheme overall, and I am pleased they are investing £100 million in it over five years, there needs to be better reviewing and measurement of fuel poverty in Wales. We need to see the statistics to judge for ourselves whether energy efficiency improvements are successful and result in cheaper bills. As far as I am aware, the last measurement of fuel poverty was carried out as part of the Living in Wales survey in 2008. If any Member knows differently, or knows of more up-to-date information, I would be grateful to receive information from them.
We should not forget that the impact of fuel poverty on a household is enormous and potentially fatal. In winter 2010-11, there were an estimated 1,900 excess winter deaths in Wales and England—an increase on the five-year average of 1,786 excess winter deaths a year. I am sure a number of facts contributed to that increase, but the Hills review estimated that 10% of winter deaths can be attributed to fuel poverty. If the Government had acted sooner, they could have prevented 190 deaths.
Fuel poverty inflicts much misery on too many people in Wales. To use an old pun, it is time to give it the cold shoulder.
Chris Evans (Islwyn) (Lab/Co-op)
As always, it is a pleasure to serve under your chairmanship, Mrs Riordan. I congratulate my hon. Friend the Member for Vale of Clwyd (Chris Ruane) on securing the debate.
This is the third fuel poverty debate I have spoken in since I came to the House. The first was quite early on, and I had not been a Member very long—I was green behind the ears. Constituents who had come to my surgery had told me anecdotes about sitting in front of the television wearing coats because they were cold and about being unable to afford to heat their houses or turn on an extra bar on their fires. I was deeply concerned because constituencies such as mine have large numbers of former miners with chronic obstructive pulmonary disease and other illnesses who need to heat their homes.
Two years before that, I was working for my predecessor, now Lord Touhig. I was doing some research for his speech at the time, and I spoke to the president of the National Old Aged Pensioners Association of Wales and asked him for some examples. He said that many members do not know they are in fuel poverty and simply put on an extra pullover or go to bed early. I was quite struck that the problem was still going on.
The second fuel poverty debate that I spoke in was on the effect on vulnerable people and, in particular, those suffering from cancer. I discovered from Macmillan that 70% of cancer patients lose, on average, 50% of their household income during treatment. One in four cancer sufferers also suffers from fuel poverty. I was disappointed with the response of the Minister at the time. Rather than talking about positive action, he mentioned the example of Her Majesty the Queen being in fuel poverty, because it was being measured wrongly. That is all very well and warm words, but to someone who is suffering and choosing between heating and eating, it does not matter whether the Queen or anyone else who can easily pay their fuel bill is in fuel poverty. When I listen to debates such as this, I am seriously concerned, because every time we come back to the issue and receive promises from the Government, nothing happens.
Fuel poverty hits Wales harder than anywhere else, as it has more people off-grid. As my hon. Friend the Member for Vale of Clwyd mentioned, we have the highest bills in the country, yet we export more electricity than any other region. We have more people on coin-operated meters than anywhere else in the country. More people have to press the button that disconnects them from electricity bills. More than a third of Welsh households are in fuel poverty, which is higher than the UK average and higher than any other UK region. By 2015—the time of the next general election, which is when we will go before our constituents—the average household in Wales will have £1,470 less than in 2010. At the same time, energy bills are going up and up. What are the Government doing?
I am proud that in Wales we have a Labour-led Assembly that has a target of ending fuel poverty by 2018. It is taking action through energy efficiency schemes. The Westminster Government could take that on. The work being done by the Welsh Assembly follows on from that done by the previous Labour Government. It is in vogue and fashionable among Government Members to attack the Labour Government. They say that we should apologise for everything we did, but I am not apologising for winter fuel payments. I am not apologising for central heating programmes, and I am not apologising for energy efficiency commitments that improved the lives of so many people in this country.
What have we seen in comparison? Since Labour left office, it is the shame of this coalition Government that they cut the winter fuel payment. They have overseen rising energy bills and there has been no reduction in the number of households struggling to heat their homes. I have spoken before about the better targeting of support for vulnerable groups. It is all very well targeting it and it is all very well having the winter fuel payment, but it is eaten up by constantly rising energy bills. It is perverse that every time we hear of rising energy bills we also hear of record profits by the same energy companies that are pleading poverty. It is up to us in this House and this Government to stand up to those energy companies. It is no good inviting them round to Downing street for tea and biscuits and begging them, “Please, please will you reduce your energy bills. It is making us look bad.” We need real action and we need a regulator that will fine the companies when it finds that they are colluding to put prices up.
Jonathan Edwards
The hon. Gentleman is making a typically powerful speech. Both he and the hon. Member for Vale of Clwyd (Chris Ruane) alluded to the fact that Wales is a net exporter of electricity, yet we have the highest levels of fuel poverty. Can I take it therefore that the next Labour manifesto will include a promise that Wales gets control of its natural resources?
Chris Evans
If I am ever lucky enough to be involved in writing the Labour party manifesto, I will take that on board.
The point I want to make on energy companies is that energy bills are complicated. There are 100 different tariffs for energy bills and the most basic argument—I have said it before, both here and in the House—is that we do not have luxury energy. People cannot have electricity or gas coming faster to them, like they can with the internet. Someone can go into Currys and say, “I want a luxury LCD or LED television”, and pay the price for whatever they want, but energy is energy; there is no luxury system. My hon. Friend the Member for Llanelli (Nia Griffith) talked about energy companies saying, “You can go on the internet and start switching.” My problem with that is that the vast majority of my constituents are elderly and do not have internet access. They do not know how to use it, so they are not going to go around looking for different prices.
I do not expect the Minister to come up with radical plans for reforming the energy market, even though we need to have that debate. We are approaching a tipping point where rising energy prices, and the need for energy security, will be a way of life. There is no magic bullet to end fuel poverty.
Mark Tami (Alyn and Deeside) (Lab)
Does my hon. Friend share my concern about companies allowing people on very limited incomes to run up bills of £3,000 or even more? I am sure he has had constituents come to see him about that, as I have. Those companies are now demanding that money, without any reference to income level.
Chris Evans
I entirely agree. The hon. Member for Montgomeryshire (Glyn Davies) shouted earlier “Mention Margaret Thatcher”, and I will mention her. When she privatised the energy companies, I bet she did not expect that she would remove one energy company to get just six. She would not have thought that we would be talking about a market that has moved from a monopoly to an oligopoly. I am sure she would be ashamed of that. That would not have been her intention. The problem is that there is no competition in the market.
Chris Ruane
While we are on the Thatcher era, does my hon. Friend remember the Tory Minister who said that pensioners who were freezing to death in their homes should go to a charity shop and buy an extra second-hand cardigan? That was her solution. Let us hope that we are not going back to those dark Tory days.
Chris Evans
I very much remember that, which says a lot about my childhood and my interest in politics. It was a shameful thing to say. We are in a situation where there is a lack of competition and people have nowhere else to go. They have to go to those six energy companies, and that is why we need the debate.
There are a few things that the Government can do. My hon. Friend the Member for Vale of Clwyd has already said that we could ensure that everyone over the age of 75 is on the cheapest tariff and that 250,000 pensioners would be up to £200 better off through that. We could have targeted support through the winter fuel payment for those suffering from cancer and for the disabled and those with conditions such as multiple sclerosis or muscular dystrophy. We need some political will. We cannot afford to sit idly by and watch energy companies pile up profit upon profit. We need to show people that we are on their side. It is no good standing back and allowing people to die. We have a moral obligation to end fuel poverty. James Maxton said that poverty is man-made and therefore open to change. We have a chance to change fuel poverty.
Paul Flynn (Newport West) (Lab)
I am reminded of a debate that took place when I was the Opposition spokesman on pensions—if hon. Members can remember that; it was in the dark age of Thatcherism—in which the then Minister suggested that elderly people should go to jumble sales and buy coats to put on, saying that they would get good value. That was only a few months after Edwina Currie suggested that the elderly should go to bed with bobble hats on—that was the then Government’s Dickensian approach. It was a happy occasion, because a group of Welsh MPs had the only fax machine in the House at that time, because faxes were suspect and not allowed—all that could be attached to a telephone line was a telephone. A group of officials came to inspect the installation of our wood-burning fax machine, which cost an enormous amount and was built like a steam engine. However, that meant that we could ensure that news of the Tories’ answer to fuel poverty—jumble sales—went out to the nation so that people would realise what it was.
I was struck by what the hon. Member for Montgomeryshire (Glyn Davies) said in his speech. I welcome the fact that he is acquiring the same reputation for wisdom and restraint as his predecessor in the House, and we look forward to further improvement. He drew attention to, but did not dwell on, the fact that fuel prices are crucial. Something extraordinary has happened, which nobody forecast: America has had a huge boost to its economy because it has low fuel prices, mainly as the result of fracking.
A new gas-fuelled power station recently opened in my constituency, the gas for which comes from Scandinavia. It is situated precisely on the confluence of the River Usk, through one window, and the River Severn, through the other window. Fuel comes all the way across to Wales, but twice a day a huge cliff of water comes up the Severn and down the Severn, and up the Usk and down the Usk, wasted and unused. The cheapest electricity in the world comes from the tidal power station at La Rance in Brittany, which has been going for 47 years. The capital costs were paid 27 years ago, so the fuel is of course free. The turbines are in pristine condition and it produces electricity regularly and cleanly from a non-carbon, eternal fuel source, and no one takes a cut. There is a similar, slightly bigger, power station in South Korea.
In Wales, the tides washing around our coast 24 hours a day are our North sea oil, but we neglect them. There are serious problems with the barrage—building a wall across the channel—because it is open to so many environmental objections and has a huge cost, but a very acceptable alternative, which would be equally rich in providing power, would be a series of turbines in the water, perhaps in lagoons, linked to a pump storage system such as the one in Dinorwig, meaning that when pulses of energy arrive at 3 am, we can store that, as with a large battery, for use later in the day. That is the cleanest, cheapest, most sophisticated and best way to produce energy.
We have heard about the dearest way to produce energy this afternoon, as we are going ahead with a nuclear power station. While it is not in Wales, a large part of Wales is within a radius from it that is the size of the uninhabitable area around Fukushima. What if there was a disaster? There have been tsunamis in the Severn channel—they were many years ago, but they have taken place. We did not get much information about that from the Secretary of State, who had said, when he was a Liberal Democrat, that nuclear power could come only through either a rigged market or a “vast”—his word—subsidy from the taxpayer, yet he has managed to get both in the proposal. The current negotiations started with a strike price of £50 per megawatt-hour, but The Times and The Daily Telegraph now tell us that the price being negotiated on is £97 per megawatt-hour—nearly double.
Simon Hart
One or two of my constituents who are watching the debate would be interested to know when the hon. Gentleman might make some points about fuel poverty as it affects constituents in Wales.
Paul Flynn
Fuel poverty is about the cost of the fuel. I am sure that there will be great cheers in the main Chamber tomorrow if we hear the expected announcement that the price of petrol and diesel will be frozen—[Interruption.] Hon. Members will be cheering and it will be welcomed. The consequence, however, is that fuel will be cheaper, so there will greater congestion, more pollution and more accidents. The more the price of fuel goes down, the more unnecessary journeys are made. We have less congestion now, fewer accidents and less pollution. Many people—almost half the population—are directly involved in that, but everyone is involved in paying for gas and electricity. They should be the first consideration, but there is no attempt to freeze those prices.
An extraordinary deal is on offer. We have seen fuel prices drop in the US. We are, however, in a position whereby Centrica, E.ON and RWE—all of them—have left the proposed deal, so the only people in the negotiations at the moment are Électricité de France, which has a €33 billion debt. If it was not nationalised, it would be bankrupt. It wishes to do a deal in the short term in which British taxpayers pay it £30 billion in subsidy. According to Tom Burke, an expert in nuclear power, the subsidy will be £150 billion over 35 years, and a Liberal Democrat spokesperson today suggested that it would be £99 billion. That is from a coalition that said that there would be no subsidy on nuclear power. We will be told the result only when it has been negotiated, but the deal will burden those in fuel poverty for 35 years. We are betting for that period. Who will benefit? Not British industry, but French industry, so the advantages will go there.
The Government seem to be hellbent on producing fuel that will be increasingly dear. Fuel poverty will not go away if we irresponsibly decide on the dearest means of producing energy in the world. If hon. Members want another example of that, they can look at the two other Électricité de France new nuclear power stations at Flamanville and in Finland. One is four years late and the other is six years late; one is €5 billion over budget and the other is €7 billion over budget. Who can suggest that the one at Hinkley Point is going to be any different? It will cause anxiety throughout the area, because every 10 years we have a nuclear disaster, and there is likely to be another one, either due to terrorism, an accident or—
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I congratulate my hon. Friend the Member for Vale of Clwyd (Chris Ruane) on not only securing the debate, but his excellent speech on behalf of his constituents and the people of Wales. I extend those congratulations to all hon. Members who have taken part in the debate. It is clear from the contributions of Members of all parties that fuel poverty is a serious problem in Wales and a subject on which many have campaigned on behalf of their constituents. We heard excellent contributions, and I want to use my time to pick up on a few of the themes that have emerged over the course of the past hour.
Despite falling by 1.75 million people under the previous Labour Government, it is clear that fuel poverty in Wales and across the UK is now increasing rapidly. The Hills fuel poverty review, which was commissioned by the Government, estimates that 8.5 million homes will be in fuel poverty by 2016, which is up from the 4.75 million homes that were in fuel poverty in 2010, according to the Department of Energy and Climate Change website. With the average energy bill going up by more than £300 since the coalition came to power and Government help to support the fuel-poor being cut, it is hardly surprising that fewer and fewer households can afford to keep warm.
My hon. Friend the Member for Swansea East (Mrs James) told us the cost of a dual fuel bill, but I am sorry to say that the figure is even worse. I read on Sunday that the average dual electricity and gas bill is now £1,410 a year, although I appreciate that many customers in Wales are off-grid. My hon. Friends the Members for Vale of Clwyd and for Llanelli (Nia Griffith) spoke about the challenges of switching, particularly for vulnerable customers and those who do not have a bank account, or who do not have access to the internet or know how to use it, particularly where there is a digital divide. My hon. Friend the Member for Islwyn (Chris Evans) spoken eloquently and in detail about the particular challenges that people with cancer face in paying their fuel bills.
Although there are many people who are struggling with the impact of rising prices, today’s debate has highlighted that the impact is felt nowhere more severely than in Wales. Many Members referred to the double whammy of rising bills and falling living standards that is hitting households in Wales right now. The hon. Member for Brecon and Radnorshire (Roger Williams) eloquently presented the issue: in 2013, it is a shocking indictment that people have to choose between eating and heating. We are the seventh most industrialised nation in the world, and the Government should urgently consider the fact that 250,000 people in our country have accessed emergency food aid.
As my hon. Friend the Member for Newport East (Jessica Morden) rightly pointed out, not only are Welsh consumers paying the highest energy prices of anyone in the UK, but they are hit disproportionately hard by the Government’s tax and benefit changes. We heard reference to the TUC report published last week, which showed a 7% reduction in household income in Wales since 2010. The effect is clear: higher fuel poverty in Wales. The 2012 DECC annual report on fuel poverty statistics shows that the proportion of households in fuel poverty across the UK is 18.6%, but the figure in Wales is 26.2%—more than a quarter of households. Consumer Focus estimates that about 420,000 households in Wales are in fuel poverty, which is more than a third of the population and a higher proportion than in any region of England.
We heard from my hon. Friend the Member for Islwyn about how the Welsh Labour Government are acting in response to the standard of living crisis. They are providing help for low-income and vulnerable households to reduce their energy bills and heat their homes through something that I learned about recently—the Nest scheme.
My hon. Friend the Member for Llanelli told us that many homes in Wales are not on mains gas, or require urgent improvements to their energy efficiency, and it is Labour in Wales that is investing £100 million over five years through the Nest scheme to improve the energy efficiency of about 4,000 eligible homes each year. It is estimated that the energy improvement packages will deliver annual benefits averaging £550 per household, and 6,700 of them have been installed since April 2011.
The Labour Government in Wales are helping the fuel poor and endeavouring to eradicate fuel poverty, and they have a target that they take very seriously. I am sorry to say that the same cannot be said for the coalition Government here in Westminster. Sadly, the Minister admitted when the Energy Bill was in Committee that we are not going to meet our targets to eradicate fuel poverty.
Unfortunately, as we have already heard, the Government have gutted support for the fuel-poor since coming to power. The Warm Front scheme, which helped more than 2 million households over 10 years to improve their heating and insulation, was scrapped, and lower-cost social tariffs have replaced the warm home discount, offering far less help to far fewer people. We have also seen the end of the carbon emissions reduction target scheme and the community energy saving programme, which together insulated more than 4.2 million lofts and 2.1 million cavity walls across the UK, lowering carbon emissions and reducing energy bills for millions. This is the first time since the 1970s that we do not have a Treasury-funded scheme to tackle fuel poverty across the UK, and according to analysis by National Energy Action, the net result of the Government’s cuts is that funding this year for the fuel-poor and for low-income and vulnerable households will be half what it was last year.
Nia Griffith
Does my hon. Friend share the very real concerns about the green deal? Even for better-off consumers, it does not provide a very attractive deal, and it does absolutely nothing for those who struggle to make ends meet.
Luciana Berger
I am about to get on to the green deal, and if my hon. Friend will wait just one moment, I will make several points about it.
When the Minister gets to his feet, I am sure that he will tell us in great detail what he believes his Government are doing through the introduction of the green deal and the ECO, after scrapping the three schemes I mentioned. Will those new schemes do anything to help the fuel-poor in Wales or anywhere else in the UK?
I ask the Minister to respond directly to the important points about cold weather payments that were made by the hon. Member for Brecon and Radnorshire. I also ask him to listen carefully to his hon. Friend the Member for Montgomeryshire (Glyn Davies), who raised a concern about new homes. We know that the green deal addresses the energy efficiency of existing homes, but the hon. Gentleman was keen to ensure that we have energy-efficient new homes. I hope that the Minister will tell us what he thinks the coalition Government should be doing, specifically regarding their commitment to zero-carbon homes. He will know that Opposition Members have many concerns about the Government’s intention to scrap the zero-carbon homes policy for new homes.
On existing homes and the green deal, I share many of the concerns raised by my hon. Friend the Member for Swansea East, and I want to respond to the intervention made by my hon. Friend the Member for Llanelli. According to the Government’s own predictions, the number of homes getting insulation under the green deal will fall this year. The Department’s impact assessment shows that the number of loft insulations will fall from 900,000 last year to just 150,000 this year—a decrease of 83%—while the number of cavity walls being insulated will also go down from about 700,000 last year to just 400,000 this year—a fall of 43%. We understand that the number of solid wall insulations will stay largely the same.
By the Government’s own admission, the way in which the green deal is designed means that most fuel-poor households will not benefit from it, because they are unlikely to meet the golden rule. They currently under-heat their homes, so a more energy-efficient property would ensure only that they lived in a warm home rather than a cold one. I heard the concerns of my hon. Friend the Member for Llanelli about the cost to households, and we have had many a discussion on the Floor of the House about the interest rate and whether the green deal will present a good deal for households.
Perhaps we can be more hopeful, however, about the ECO. After all, the Minister told me during DECC questions in May 2011 that the ECO
“is going to be much more effective than any measure that the Labour party introduced.”—[Official Report, 19 May 2011; Vol. 528, c. 478.]
However, according to the Government’s own impact assessment, by 2023—in 10 years’ time—the ECO will have reduced the number of homes in fuel poverty by only 250,000. That is fewer than the 300,000 households that were put into fuel poverty this winter alone, and a fraction of the millions of homes that were helped under the CERT programme that the ECO replaces. Again, the Minister’s claims to be supporting fuel-poor households simply do not stack up.
Perhaps the Minister will want to mention the £46 million boost for 132 local energy schemes that was announced by his Department on 15 January. If so, perhaps he will tell us why none of that money, which was designed to help to reduce fuel poverty and boost energy efficiency, was awarded to a project in Wales. That is further evidence of the double whammy I mentioned earlier and the Government’s lack of support for Wales.
I hope that the Minster will tell us why he is cutting support for the fuel-poor in Wales and around the country. Why have his Government halved support for the fuel-poor this year? Why did he reject Labour’s amendments to the Energy Act 2011 that would have targeted the ECO primarily at the fuel-poor? He will have heard many representations about how our energy market is broken, so why will he not accept our proposals for reform and introduce a pool, breaking open the market and ending the regional monopolies that lead to people in Wales paying more for their energy than people in any other part of the UK, despite Wales being a net exporter of energy? Why will he not introduce a real energy regulator with the power to stand up to the big energy giants and insist that energy companies automatically put the over-75s on to the cheapest tariff and help the most vulnerable and disadvantaged in our communities?
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I will try to cover as many points as I can; but with barely 10 minutes left, I apologise to any Member, not least the hon. Member for Vale of Clwyd (Chris Ruane), whose points I do not cover in full. I congratulate him on calling this debate on fuel poverty in Wales. It will not come as a great surprise that I did not agree all with all his points, which were somewhat theatrical, but what was not theatrical was his real passion for the subject, which is shared by other Members from both sides of the House.
I assure the hon. Gentleman that the coalition shares his real determination to end the affront of fuel poverty in 21st-century Britain. The Government are only too aware of the real daily choices that confront too many people—not just in Wales, but across the country—in making decisions about keeping warm, particularly during the winter, and we take that issue extremely seriously. If we are to take it seriously, however, we need a little less party political point scoring.
If we are to address fuel poverty, we need a little less disingenuous analysis and to recognise that every year from 2004 to 2009, with only a slight pause in 2010—every year of the last Parliament—fuel poverty went up in Wales. I do not say that the last Government were entirely to blame, because there is in fact a direct link between the international wholesale gas price and fuel poverty. We can score petty points and selectively choose dates that suit our argument, but the fact is that a bigger issue is at play that has eluded successive Governments, so we need to come together with a much more ambitious, comprehensive and honest way to address the issue.
In Wales, there is a degree of complication in the sense that fuel poverty is largely a devolved issue. Although the Welsh definition of fuel poverty is the same as the English one—namely, 10% of household income, as the hon. Gentleman said—the issue is devolved and is not therefore subject to the Hills review that we commissioned to come up with an accurate definition that will aid our policy making. One reason why we have suffered with ineffectual policies in tackling fuel poverty over successive Governments is the lack of specificity—the fact that our efforts have not been targeted enough on those who really need our help.
I am very glad that my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) recognised that cold weather payments have been made permanent, but he made some sensible and informed criticisms of how they are triggered, particularly to the detriment of some of his constituents. I am very happy to meet him and certainly to hear about his discussions with the Department for Work and Pensions.
The hon. Member for Llanelli (Nia Griffith) highlighted the plight of off-gas grid customers. She particularly raised concern about a liquefied petroleum gas monopoly, which is again a real issue for not only her constituents or Wales, but right across the country. Those who are off the gas grid in rural areas get a raw deal from the market, and we continue to consider that issue. In fact, the coalition Government asked the Office of Fair Trading to look into that very matter, which we are keeping under close scrutiny. She made important points about standing charges, about which we are also concerned. We are looking at their impact, particularly because we are now entering the most radical period of reform of the electricity markets since privatisation in the 1990s.
The hon. Member for Islwyn (Chris Evans) mentioned Mrs Thatcher and asked whether, at the point of privatisation, she anticipated that, far from creating greater competition, she would end up triggering a consolidation. In fact, Margaret Thatcher did not create that consolidation; the big six are the child of new Labour. When Tony Blair came to Downing street in 1997, there were 12 energy companies, and when the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) left Downing street, there were six. That massive consolidation occurred on Labour’s watch, and it now falls to this radical, reforming coalition to take the measures that successive Labour Energy Ministers shirked and to reform the energy system.
We are not only reforming the wholesale market, which will drive competition and open up the market to the new entrants who were squeezed out by Labour’s love-in with big business, but reforming tariffs for the consumer and simplifying bills, which are important consumer issues that will make a real difference.
Several colleagues quite rightly referred to tariffs, so I am pleased to say that, far from doing nothing, as the hon. Member for Vale of Clwyd suggested, the Government are acting on the Prime Minister’s pledge and not only acting on a substantial review, but introducing legislation this year to sweep away the bewildering thicket of tariffs. That will ensure that everyone in the country—the fuel poor, the pensioner, the low-income household—is put on the best, lowest appropriate tariff for them. People do not need a PhD in internetology to get a good deal out of their energy company. That will be welcomed, as will our simplification of bills.
My hon. Friend the Member for Montgomeryshire (Glyn Davies) spoke with genuine compassion and concern about the terrible iniquity of fuel poverty, particularly in Wales. We do not always see eye to eye on issues such as wind, but he is right to say that we must not turn our back on a responsible exploitation of gas, particularly if that delivers greater energy security and brings down or limits energy prices for consumers.
The hon. Member for Swansea East (Mrs James) was quite right to point out that there is a bewildering array of tariffs. She said that she had been on the same supplier every since she married, which I am sure was only yesterday, and I hope that, as a result of the Prime Minister’s reforms, she will be having a change—of energy supplier.
Our reforms will bring in real competition. There may be some adjustment to the lowest tariffs, but we know that the big six energy companies use them to tempt 10% or 15% of us to switch, funding those tariffs at the expense of the 85% of the population that do not. Having much greater simplicity and transparency will make it easier for new entrants, who do not have an existing big customer base to milk, to come into the market and give the big six a run for their money.
The feed-in tariff was mentioned, but I have to say that, far from being dead, the feed-in tariff—particularly for solar technology—is alive and kicking. We now have the extraordinary figure of nearly 1.5 GW of small-scale solar having been installed under the coalition, and we are approaching 2 GW of total solar capacity. In fact, solar represents a very good return and a very good deal. I appeal to Opposition Members to stop talking down the solar industry, to talk to their local suppliers and to get behind solar, because it offers a very good deal and great opportunities for the whole supply chain.
Across the board, the Government are taking action to help the fuel poor. The Hills review will help us to do so more accurately, but we are very proud that, taken in total, our policies mean that more money is being directed in a more targeted way at the fuel poor than at any time in our history. We have a lot more to do and there is absolutely no room for complacency, but we are determined to do more.
Bangladesh (Escalation of Violence)
(11 years, 1 month ago)
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Rushanara Ali (Bethnal Green and Bow) (Lab)
It is a pleasure to serve under your chairwomanship, Mrs Riordan. I am pleased to be able to speak in this debate, which will focus on the recent escalation of violence in Bangladesh and which I know hon. Members from all parties are concerned about. First, I want to take this opportunity to express my deepest condolences to the families of those who have lost their lives in the violence that has taken place over recent weeks, particularly following the International Crimes Tribunal—a domestic court that tries people for alleged international crimes, including the genocide, war crimes and crimes against humanity that were committed during the 1971 war of independence. The war, as many people will be aware, lasted nine months and cost the lives of some 3 million people.
I deplore the escalation of violence and the recent attacks on places of worship and private property in Bangladesh. Recent developments are of great concern not only to people in Bangladesh, but to the British Bangladeshi community and of course to those who have friends in Bangladesh.
Mrs Anne Main (St Albans) (Con)
I congratulate the hon. Lady on securing this debate. As she knows, I am chair of the all-party group on Bangladesh. I have been contacted by numerous Members of Parliament, as well as British Bangladeshis, asking for an emergency debate. Sadly, although the high commissioner is here today, we will not be able to facilitate such a debate with him present, so I am glad he is here to listen to the hon. Lady’s comments today.
Rushanara Ali
I thank the hon. Lady and commend her for her work as the chair of the all-party group. I agree that there should be more focus on what is happening. We must ensure that we in the British Parliament play our part in supporting countries such as Bangladesh, so that early action can be taken. We can apply the appropriate pressure as friends of Bangladesh to try to make sure such situations do not escalate and become more grave. I hope that after the Minister has heard today’s discussions he will make the appropriate representations. I have a series of questions that I will come on to.
Many British Bangladeshis have raised concerns about the escalation of violence. A third of my constituents are of British Bangladeshi origin and 500,000 people here in the UK have Bangladeshi heritage. Many have made representations to me, particularly regarding consular issues. For instance, constituents have contacted me about the safety and security of family members who visit Bangladesh. My hon. Friend the Member for West Ham (Lyn Brown), who is unable to join us today owing to a family funeral, asked me to raise the issue of her constituent. She has been working hard to support her constituent, Sheikh Noor-e-Alom Hamidi—a British national of Bangladeshi origin who unfortunately got caught up in the violence, while attending Friday prayers. He sustained injuries during his arrest and was subsequently taken into custody. There have been particular concerns as Mr Hamidi, the director of a charity, suffers from ill health. Will the Minister update us on the advice and support that his consular department is offering to my hon. Friend’s constituent? There is grave concern across the board for his safety. I want to thank the Minister in advance for any assistance that his officials are providing.
On business and investment, many in the UK Bangladeshi community have business interests. Britain is the top investor in Bangladesh; our economic connections are very strong. If the unrest and instability continues, it will damage business and investment in that country. Many business leaders in my constituency have already made representations to the UK Government and to their counterparts in Bangladesh to convey their concerns and to try to bring the major leaders of the parties towards dialogue, so that they take responsibility and action to bring an end to the unrest.
Rehman Chishti (Gillingham and Rainham) (Con)
I congratulate the hon. Lady on securing a debate on the escalation of violence in Bangladesh. Does she agree that more needs to be done to protect the minorities in Bangladesh—the Hindu and Buddhist communities—who have been affected most by the unrest?
Rushanara Ali
I am coming on to that. The hon. Gentleman is absolutely right. There have been reports of attacks on Hindu temples and other minority groups, including Buddhists, and on businesses and homes. That is completely unacceptable. I will come on to that in a moment and refer to discussions in the other place.
Following the International Crimes Tribunal’s recent rulings, there has been violence, as we are all aware. According to Odhikar—a Bangladeshi human rights watchdog—more than 100 people died between 5 February and 7 March; 67 people were killed after the court delivered its third sentence on 28 February. As the hon. Gentleman has already mentioned, there have also been attacks on minority groups, and they have been highlighted by Lord Avebury in the other place. I hope that the Minister will be able to provide an update on any representations that the UK Government have made about these issues and what action the Bangladesh Government are taking to provide protection to those who feel vulnerable, particularly those in minority communities.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I congratulate my hon. Friend on securing this debate. There was a demonstration outside the Palace of Westminster last Wednesday on behalf of minority groups—Hindus, Buddhists, Christians and others—who put responsibility for the attacks on minority communities directly at the door of the Jamaat-e-Islami party. They claim that it organised the violence as a response to the war crimes tribunal judgments. Has my hon. Friend received similar complaints about Jamaat, and how does she see the role that it is playing in all this? I am sure that the Minister will respond to that in due course.
Rushanara Ali
My hon. Friend will be aware that any attempt to try to understand the deeply complex nature of the politics and political parties of Bangladesh is beyond me. I am concerned that all parties behave responsibly and within the law, whether they are here or in Bangladesh. My job as a constituency MP is to make sure that people behave responsibly and that, whatever their political leanings towards parties in another country, they act peacefully and within the law, whether there or here.
I appeal to those who demonstrate in one of the major parks—Altab Ali park—in my constituency every weekend and every Friday to do so peacefully and to relay their concerns peacefully. In the end, they will be doing no favours to their fellow countrymen and women in Bangladesh if they act irresponsibly. I would say that to all the political parties and to all those who have political leanings, whether towards Jamaat, the Awami League or the Bangladesh Nationalist party. Sadly, too often people get into polarised positions and insist that we, as British parliamentarians, should take sides. I do not think that is the responsible thing to do. What is important is that those people themselves exercise responsibility.
The hon. Member for St Albans (Mrs Main), in her capacity as chair of the all-party group on Bangladesh, has also raised concerns about political violence in Bangladesh, particularly among the youth wings of parties. Political leaders—our appeal is to all the political leaders—should take responsibility and ensure that they set the tone, so that the young, impressionable people who are involved in the youth wings of political parties act in a non-violent, peaceful way to highlight their concerns and their unhappiness about whatever may be happening. In the end, that will be the true test of the maturity of where people in Bangladesh and the British Bangladeshi community have got to. We have a responsibility to ensure that we encourage dialogue across the board in all the parties.
Jim Shannon (Strangford) (DUP)
First, I congratulate the hon. Lady on bringing this matter to the House. My constituency has the largest number of Bangladeshis in Northern Ireland and therefore this issue is very close to my heart. The attacks on religious organisations and religious beliefs—those of Hindu and Christian people in Bangladesh—have resulted in some 89 people being killed in the past year. Does the hon. Lady feel that perhaps more needs to be done to address the issue of the Hindu and Christian people who have been attacked and murdered because of their beliefs?
Rushanara Ali
Bangladesh is a country that was founded on the idea of standing up for the rights of minorities. The majority Muslim population in Bangladesh is all too aware of what it is like to face persecution; they fought a war of independence for that reason. I am a British Bangladeshi, but I was born in Bangladesh, and it is absolutely right that people are constantly reminded of the values and principles on which Bangladesh was founded. In fact, the nation was founded by Muslims and Hindus, by those with faith and those without faith—by people across the board. That is Bangladesh’s great strength as a country. Where there is rising intolerance, that intolerance must be dealt with.
I would emphasise, however, that there are concerns about religious freedoms across the board. Within a liberal framework—I believe that Bangladesh has a strong liberal tradition—the rights of people to peacefully practise their religious beliefs, whatever religion they practise, should be observed, along with their other civil rights. So I totally agree with the hon. Gentleman, but we need to ensure that we encourage the Government of Bangladesh and other political leaders in the country to set the tone and to try to ensure that they stand up not only against any kind of oppression towards any minority group, but for religious freedoms within a peaceful context. The concern is that violence is increasing—some of it sadly through the prism of religion—and that is deeply unhelpful.
Rushanara Ali
I want to make a bit more progress.
There have been reports of police officers losing their lives. However, people have raised their concerns about reports of the disproportionate use of force by law enforcement agencies. Frequent nationwide strikes have caused considerable volatility and led to businesses suffering and to ordinary people being unable to go about their daily lives in safety, or at least without having concerns about their safety even if they are not directly affected by violence. Of course, the country risks reputational damage in the eyes of the international community, not to mention damage to its economy.
As we look forward to the elections that are set to take place in Bangladesh in 2014, there are of course grave concerns about political violence and unrest ahead of them. So I hope that the Minister will be able to provide an update on what assurances the British Government are seeking from the Bangladesh Government, on what representations they are making ahead of the 2014 elections and on any dialogue that he and his Department are having with the main opposition party in Bangladesh, to ensure that the country can move towards, first, security and safety and then free and fair elections next year.
I remind Members of the progress that Bangladesh has made in its 42 years of history. The country started off facing huge challenges, but the growth rate in Bangladesh is now at 6%, according to the World Bank. According to Goldman Sachs, Bangladesh is projected to be one of the next 11 countries that could reach middle-income status. Bangladesh has made considerable attempts to address poverty, to improve girls’ education and to achieve many of the millennium development goals, particularly those on girls’ education.
Those are important achievements, but Bangladesh still faces grinding poverty and it is the second most vulnerable country to climate change. So I hope that we can work together with our friends in Bangladesh to ensure that people focus on the big challenges facing the country. Only when the governance of the country is genuinely focused on the future needs of its population and on the challenges that it faces will Bangladesh be truly able to meet its aspirations of reaching middle-income status and achieving economic and social prosperity.
We all have a vested interest in seeing countries such as Bangladesh progress, and there is no reason why Bangladesh should not progress if the issues that I have outlined are addressed and if we can encourage the major political parties in the country to work towards peace and stability. However, that requires political will and courage from all sides. I hope that the Minister will highlight what his Department is doing to try to encourage dialogue in Bangladesh.
I will end by asking the Minister a few questions; I will be very quick in doing so. First, can he provide an update on the representation that his Department has made about the rising violence in Bangladesh? What efforts are being made to try to bring an end to that rising violence? Can he update the House on whether he has had discussions with the main political parties in Bangladesh and, if so, what progress has been made? What representations have been made and what consular assistance has been provided to UK nationals in Bangladesh, such as Mr Hamidi, who have found themselves caught up in the current difficulties? Finally, has the Minister discussed with his international colleagues, including his European counterparts, what action we can take together to support Bangladesh in this very difficult period? I very much look forward to hearing his response to the debate, and I thank him for taking the time to respond to my questions.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
Mrs Riordan, it is a very great pleasure to follow the hon. Member for Bethnal Green and Bow (Rushanara Ali), whom I congratulate not only on securing this important and timely debate but on approaching what is a difficult matter in such a reasoned and balanced way.
I know that she and other hon. Members, together with their constituents, continue to take a close interest in the situation in Bangladesh. A number of important points have been raised this afternoon, and I hope that I will get round to responding to most of them in the time left to me.
I concur with my hon. Friend the Member for St Albans (Mrs Main), the chairman of the all-party group on Bangladesh, that there is clearly an appetite to debate this matter further, but alas allowing that is not in my gift. However, I am sure that she will make her representations in the usual places, and I hope she will secure a wider debate.
First, I want to make it clear that the United Kingdom and Bangladesh enjoy a strong and long-lasting relationship, which is important to both our countries. As Bangladesh prepares to mark 42 years of independence, we are proud that the UK was the first European country to recognise Bangladesh. Personal ties continue to connect our countries. Nearly 500,000 people of Bangladeshi heritage live in the UK, a good number of them in Bethnal Green and Bow. It is all the more important that we do not shirk our responsibility to highlight our concerns about human rights and respect for the rule of law. Those values are at the heart of British foreign policy, and they are particularly important at a time when Bangladesh is experiencing some of the worst violence it has witnessed in decades. According to human rights organisations, last year there were 15,101 incidents of political violence. That is lower than the 2001 figure of 26,426, but it shows the magnitude of the problem. Indeed, human rights organisations indicate that in January and February alone, there have been approximately 5,000 incidents of political violence.
Since January, the International Crimes Tribunal in Bangladesh has found three men, including two leaders of Jamaat-e-Islami, guilty of crimes committed during the 1971 war between Pakistan and Bangladesh. As a result of the verdicts and the ongoing political tensions, Opposition parties, mainly Jamaat-e-Islami and the Bangladesh Nationalist party, have called approximately 12 enforced strikes, or hartals, as they are known. The latest verdict issued in the case of Jamaat’s vice-president Delwar Hossain Sayeedi on 28 February led to mass protests across Bangladesh, with media reports of more than 70 deaths, many of which were reported to be the result of action by the law enforcement agencies.
We are also concerned about the media reports that 24 Hindu temples, 122 houses and dozens of shops have also been destroyed. The hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) raised similar concerns about attacks on religious minorities. We are concerned about the recent attacks, and in a statement on 13 March, my noble Friend Baroness Warsi said that she deplored the attacks and called on all parties to exercise restraint. The British high commission has met the Government of Bangladesh and Opposition parties, and senior officials in Dhaka have met officials from the Bangladeshi Prime Minister’s office and the Ministry of Foreign Affairs to make clear the importance that we attach to ending the violence and making peaceful political progress. The British Government have been clear in their condemnation of the senseless attacks and their widespread and debilitating impact on families, communities, religious minorities and businesses—as the hon. Member for Bethnal Green and Bow mentioned—in Bangladesh and the UK.
Hon. Members who have followed the situation in Bangladesh over the years will recognise the many personal and historic events that influence the political climate. For Bangladesh to achieve its potential, its politics should be practised primarily in Parliament, not on the streets. The British Government are strong proponents of freedom of expression and the right of all citizens to hold Government to account, including through legitimate and peaceful protests. That is an essential element of any democracy. As my noble Friend Baroness Warsi said during her visit to Bangladesh last month, however, violence and vandalism have no place in legitimate protests. We hope, therefore, that all parties can resolve differences through dialogue and discussion, and that citizens will be able freely to raise their concerns or grievances through peaceful means, without fear of retaliation or attack.
I would also like to reassure the House and members of the British Bangladeshi diaspora community that the British Government have strongly condemned the recent violence, including the attacks on religious minorities. Those concerns were raised with the Prime Minister of Bangladesh, Sheikh Hasina, and with the leader of the Opposition Bangladesh Nationalist party, Khaleda Zia, during my noble Friend Baroness Warsi’s visit to Bangladesh. Last week, she also issued a statement expressing sadness over the senseless loss of life and called on all parties to exercise restraint.
As part of our bilateral relations with Bangladesh, officials at our high commission in Dhaka meet regularly with the Government of Bangladesh and members of the Opposition alliance parties. During the last week, our high commissioner in Dhaka has met Foreign Minister Dipu Moni and other representatives of the main political parties. The high commissioner has urged
“all parties to exercise restraint, moderation and respect for the rule of law”.
We were encouraged by Dipu Moni’s statement that an investigation will be conducted into the recent violence, deaths and any use of excessive force by the police. We have urged the Bangladeshi Government to ensure that any investigation be conducted transparently and swiftly.
The United Kingdom remains committed to promoting human rights across the world and is steadfast in its opposition to the death penalty. As a fellow Commonwealth member, we look to Bangladesh to uphold Commonwealth values, which are clearly set out in the Commonwealth charter signed by Her Majesty the Queen on Commonwealth day, 11 March. Bangladesh is a country with more than 150 million people who are deeply passionate about their politics and political parties.
Jim Fitzpatrick
The Minister has been very reassuring about the role that the high commissioner in Dhaka has played in addressing the Government, the Bangladesh Nationalist party and other political parties. Can the Minister tell us what response the high commissioner received from the parties? Have they all issued statements calling for calm in Bangladesh?
Mr Swire
The hon. Gentleman raises a good point. I am not certain what the parties in Bangladesh have done, but, for our part, we will continue to urge all parties to take part in the elections in a fair and transparent way. We believe that the dialogue belongs in Parliament rather than in protest on the street, which has been so unsettling. With parliamentary elections due by January 2014, the UK is committed to working with all parties in Bangladesh to support the development of a stable, prosperous and democratic society. To achieve that, Bangladesh needs to have strong, independent and accountable institutions and a functioning Parliament at the centre of political debate.
Through the Department for International Development, which the hon. Member for Bethnal Green and Bow shadows, and international partners, our programmes focus not only on poverty reduction and achieving the millennium development goals, but on strengthening political participation and promoting democratic institutions. We are helping civil society to track election-related violence and mitigate it through community engagement. Our programmes aim further to strengthen the skills and systems of the election commission and to support the Parliament of Bangladesh to become more open and effective. I hope that all political parties, the election commission and civil society can work together towards credible elections that are inclusive and transparent.
Once again, I thank the hon. Member for Bethnal Green and Bow for securing the debate. The British Government are committed to Bangladesh’s development and to its ambition of achieving middle-income status within the next decade. We remain the largest bilateral aid donor in Bangladesh, with a programme of £1 billion over four years, which will directly help millions of the poorest people in the country. Of course, we are still as keen as ever on human rights, particularly those of British citizens who return to Bangladesh. The hon. Member for Bethnal Green and Bow raised the issue of Sheikh Noor-e-Alom Hamidi, who was arrested in Dhaka on 22 February, and I reassure her that we are providing consular assistance. Our consular officials visited Mr Hamidi this month, and we continue to monitor his detention closely.
To conclude, I want to send out a clear message that Bangladesh matters to the UK. As a long-standing friend, international partner and fellow Commonwealth member, we hope all political parties and civil society will engage in constructive dialogue. For all those reasons we will continue to monitor the situation in Bangladesh and continue to urge all parties to exercise restraint, moderation and respect for the rule of law.
Police Community Support Officers
(11 years, 1 month ago)
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Ian Lucas (Wrexham) (Lab)
It is a pleasure to speak under your chairmanship, Mrs Riordan.
I am pleased to have the opportunity to talk about police community support officers and their powers. PCSOs are an extremely successful product of the previous Labour Government. As a natural progression from provisions of the Crime and Disorder Act 1998, they are an effective part of community beat teams across England and Wales. I am proud to say that I served on the Standing Committee that scrutinised the Bill that became the Police Reform Act 2002, which introduced PCSOs.
Offa community council in Wrexham—a community council in Wales is the equivalent of a parish council in England— is an active local council that works hard to address local neighbourhood concerns in a part of Wrexham that is partly residential and partly commercial. The council works closely with its local police community beat team and PCSOs. One of the local PCSOs attended a monthly community council meeting last year at which she explained that she attended the local Victoria primary school at key times when parents dropped off their children in the morning and picked them up in the evening. While she was doing that, some of the parents—I emphasise that it was a minority—were parking on zig-zag lines outside the school and on double-yellow lines in the area. That is a problem across the country with which we are all familiar, but in the context of a primary school with young children, it is a big worry that parents and teachers have to deal with.
The PCSO told the community council that she had asked parents who were flouting traffic regulations to move, because they were causing a danger to children. Everyone, of course, would be fearful that an accident might occur and that someone would be seriously injured. Most parents complied with the PCSO’s wishes, but several refused. She heard one of the drivers comment, “There is nothing they can do about it. They are only police community support officers.”
In preparation for this debate, having been fortunate enough that it was drawn in the ballot, I attended the school last Thursday afternoon to see the situation on the ground. The area was very busy, and some cars were parked dangerously. Young children were moving precariously among traffic, as children of primary age do. In such circumstances, the existing law unfortunately says that even though a PCSO may make the judgment that some vehicles are causing a danger to children in the community, they cannot take appropriate legal steps to deal with the situation.
Chief constables can designate PCSOs as having various powers, as specified in part 1 of schedule 4 to the Police Reform Act. However, PCSOs do not currently have the power to prevent dangerous parking or parking that causes an obstruction. As far as I am aware, and I am grateful for the Library’s assistance on this point, primary legislation would be required to allow them to exercise such a power. Such provision would address a community danger that has been identified on the ground by a local PCSO who wants to do her best to resolve the difficulty but, as the law currently stands, cannot do so.
I am pleased that the Minister for Policing and Criminal Justice will be responding to the debate, because I have written to him about the situation. I am sure that his assiduous civil servants will have dug out the file. I was not expecting him to be present, but it is good that he is. I had suggested, at the instigation of the community council, that the Government might consider amending the law to allow PCSOs to deal with such problems by giving them the powers so to do. Unfortunately, the Minister’s reply last November stated:
“the principal role for PCSOs is part of neighbourhood policing teams, connecting and engaging with their local community, as opposed to managing parking restrictions which is a matter for the Local Authority.”
I was very disappointed with that reply, and I was even more disappointed that the local community council and PCSO, both of whom wanted to try to resolve a practical difficulty in their neighbourhood, were being let down by the Government’s response. Such responses give this place, and politicians generally, a bad name.
As I have explained, the case arose from a specific request that was made by an officer on the ground in response to a danger to young children. It is patently clear that the request for an additional power is neither unreasonable nor excessive. In the spirit of localism, I am content for the local chief constable to be granted a power, which he may or may not exercise, to allow PCSOs to issue tickets in such circumstances. At present, the PCSO has no power to issue a fixed penalty notice and has to call in a community beat manager—a police officer—from the town centre to take the necessary action, which is a waste of valuable police time. That deficiency can be easily remedied.
The clerk of the community council, Karen Benfield, reports to me that there is increasing reliance on PCSOs to undertake community policing. In the immediate vicinity of Wrexham, the number of community beat managers, who are police officers, is falling because of the Government’s budget cuts. The area used to have one community beat manager for each of the four wards served by Offa community council, but now there is only one community beat manager in charge of a PCSO team of five.
PCSOs in north Wales are already given the full range of discretionary powers that the chief constable can grant, which include the power to issue fixed penalty notices for disorder, truancy, graffiti, littering and dog fouling, but not for dangerous parking. Additionally, 25% of the cost of PCSOs in Wrexham is paid for by Wrexham county borough council to encourage the police and the local authority to work together to address the needs of the local community. PCSOs are seen to be working closely with the local authority to address all sorts of community issues, and dangerous parking is clearly a community issue that is upsetting the local community council.
The community council does not want PCSOs to take on the role of traffic wardens. It is as anxious as anyone to ensure that PCSOs carry out their role in the community and have a balanced, discretionary approach. Parking is a matter for the local authority, but the community council wants the PCSO to have the power to act when she sees a vehicle parked in the community in a dangerous situation. At present, only police officers can deal with such situations, but that suggestion is entirely reasonable at a time when the number of police officers is being reduced because of budget cuts.
I ask the Minister to consult on allowing PCSOs to have that power, which would not be controversial. The power would be at the discretion of the chief constable, and it has been requested by a PCSO on the ground because she is worried about young children in her community. How can the Minister possibly say no?
The Minister for Policing and Criminal Justice (Damian Green)
I congratulate the hon. Member for Wrexham (Ian Lucas) on securing the debate. I am happy to discuss the powers of police community support officers with him and to deal with some of the issues he raised. He started with the particular and moved out to the general. In the interests of symmetry, I will start with the general and move to the particular, and end by addressing the issues at the school. As the hon. Gentleman said, he and I have corresponded on the matter. In believing that PCSOs do an important job very well, there will be not a jot of difference between us.
I will put the debate in the context of the Government’s wider police reform agenda. On entering office, the Government set the police a challenge: we asked forces to cut crime and at the same time undergo a radical programme of reform. The central objective of the reform is to re-establish the link between the police and the public, reflecting Sir Robert Peel’s principle that the police must answer to the people they serve. The reform of the crime and policing landscape is to ensure that policing is reconnected to the public and is sustainable, stronger and successful in pursuit of its core mission.
We have achieved that in a number of ways. First, we scrapped national targets, as the Government believe that policing must be responsive to local concerns. Priorities are now set by police and crime commissioners in consultation with the public who elect them. That approach is the embodiment of democratic accountability. The hon. Gentleman correctly talked about localism, which that approach embodies in that Whitehall is withdrawing from interfering in matters that should be determined locally.
Secondly, we have provided the public with better information about crime in their area. There is now clear, transparent and accessible information for the public. I am sure the hon. Gentleman has heard of police.uk, which I hope he is an avid user of. That website is a phenomenal success: it has received more than 548 million hits since its launch, equating to a daily average of more than 200,000. That demonstrates the public’s appetite to know what is happening in their communities and on their streets.
Thirdly, we have changed how forces are held to account, through police and crime commissioners. The Government have ensured that the public, not bureaucrats, are the judges of police success. The PCC will be held to account by the public for the delivery of effective policing. Alongside that, new roles for key policing partners have been carved out. In the new landscape we have legislated to make Her Majesty’s inspectorate of constabulary more robustly independent, so that it acts directly in the public interest. The Independent Police Complaints Commission will continue to be responsible for ensuring that complaints against the police are dealt with effectively.
Hon. Members will be aware of the Home Secretary’s commitment to strengthen the IPCC’s ability to investigate serious complaints. That is a complex piece of work involving the transfer of resources from force professional standards units to the IPCC, but it will bolster the public’s confidence in the complaints system.
Lastly, the Government are supporting the professional development of police officers and staff. The College of Policing is independent of the Government and will not focus solely on supporting warranted police officers. Its remit will include setting standards for the professionalisation of all officers and staff.
The reform programme prioritises local communities. It places the public at the heart of policing. Neighbourhood policing is, therefore, a core part of the programme. Every neighbourhood in the country has a local policing team designed to work openly and in partnership with all members of their community. Every Member of this House understands the importance of ensuring that the public have a visible uniformed police presence in their community, working alongside them to identify and tackle the issues that matter to them.
The Government have supported that approach by introducing the locally elected PCCs, by ensuring that the police engage directly with their local communities through regular beat meetings, and by publishing street-level crime and antisocial behaviour information through police.uk. That focus on local accessibility, transparency, accountability and engagement will enable the public to support, and challenge, local police activity.
That brings me specifically to PCSOs. Neighbourhood policing has transformed how communities experience and relate to policing, and PCSOs are a vital component of that approach. They are now key to the public face of policing. I am delighted to hear that the hon. Gentleman served on the Committee that scrutinised the legislation. PCSOs were a good idea and it is now acknowledged on all sides that they are an integral part of the neighbourhood policing landscape that we want to see. They provide a valuable uniformed presence in communities. Their ability to spend time getting to know their local area means that they can understand and identify local priorities, solve local problems and low-level crime, and engage with local communities. They bring key skills, values and diversity to policing.
Jessica Morden (Newport East) (Lab)
My hon. Friend the Member for Wrexham (Ian Lucas) mentioned the powers of PCSOs and it seems that the Minister is moving towards agreement with him. My hon. Friend agrees that it is important that PCSOs are very representative of the communities they serve. Therefore, does the Minister welcome the approach of Gwent police in appointing more part-time PCSOs, allowing more women with child care responsibilities, for example, to work flexibly? That has meant that a different kind of person can become a PCSO.
Damian Green
I welcome that for two reasons. First, I am committed to trying to improve the diversity, not just of warranted police officers but of PCSOs. I think it was the new president of the Police Superintendents Association who made that point; the police have not moved as far as some other institutions in developing diversity and they need to do better. I am extremely supportive of practical steps to make that happen.
Secondly, the kind of local initiative that the hon. Lady describes is precisely what I want to see. I do not want to sit here—nor have any other policing Minister—dictating to different forces around the country what their priorities must be. Initiatives that come from the bottom up through the forces themselves at the behest of the PCCs will be the best way to ensure that each force is responsive to the local needs of its community. I am happy to welcome that initiative of the Gwent police. I had a good visit there a few months ago, seeing what they were doing to engage with the community in Newport. It is clearly an innovative force.
Providing visibility on the streets is also a key strength of the role of PCSOs. According to the results of the recent crime survey for England and Wales, over half of all adults say that they see the police or PCSOs on foot patrol in their local area at least every month. There are some very inspiring stories of what individual PCSOs are doing to engage with and respond to the individual needs of their communities.
In the Isles of Scilly, PCSO Bev Faull has been awarded a citation for her work with migrant workers. For the past three years, she has focused on helping the county’s eastern European migrants, effectively planning and running multi-agency operations to tackle exploitation of workers in west Cornwall.
In Shinfield, near Reading in Berkshire, Suzie Carr was awarded Thames Valley’s PCSO of the year, in recognition of the excellent community relationships she built while launching her “Wrong place, wrong time” youth project. It is interesting to note that the award scheme is by public vote, so she was praised by the local residents of the community in which she patrols for the positive impact of her work.
I have one final example from Solihull. Riccardo Gambino was named the region’s PCSO of the year for setting up 13 neighbourhood watch schemes during 2012. What is interesting about Mr Gambino is that he was a police officer for 11 years but gave up his warrant to become a PCSO because he thought that he could better serve his community as a PCSO, specifically because what was most important to him was the emphasis on engagement.
Those are three very good examples of the work undertaken by PCSOs. As of September 2012, there were nearly 14,500 PCSOs, and I am confident that each of them is taking positive steps to engage with their community, having an impact on people’s lives. It is a back-to-roots role, unique within the police service for its emphasis on accessibility and engagement, acting as a complement to, not a replacement for, the enforcement role of sworn warranted officers. That gets to the heart of the hon. Gentleman’s point, because we are determined to maintain the difference of the role.
Of course, there might well be changes and there have been changes in the past. We believe strongly in delegating local funding decisions, for example, to PCCs, which is why the neighbourhood policing fund, which historically funded such officers, is subsumed into the police main grant from next month. It will then be for police and crime commissioners, in consultation with individual chief constables, to take decisions on resourcing and deployment of PCSOs based on local assessments of need and risk. That is right, and I anticipate that this will make forces even more responsive to local concerns and priorities.
Rehman Chishti (Gillingham and Rainham) (Con)
The Minister says that it will be up to police and crime commissioners to make decisions about the needs of their communities. Will he pay tribute to the Kent police and crime commissioner, Ann Barnes, who is increasing PCSOs by 60 as well as having an extra 20 police constables on the streets of Kent?
Damian Green
As a fellow Kent MP, I am delighted that we will have more PCSOs and police officers on the streets of Kent in the coming years. I am happy to join my hon. Friend in his remarks.
I will now move on to the powers available to PCSOs, which are, as the hon. Member for Wrexham said, set out in the Police Reform Act 2002. All PCSOs are issued with 20 standard powers that enable them to deal with antisocial and nuisance behaviour in neighbourhoods. In addition, there is a list of discretionary powers that can be designated to PCSOs by chief constables in response to local requirements. The discretionary nature of the additional powers is important and goes to the heart of the notion of neighbourhood policing, which, at its core, is to ensure that policing responds to the needs of local communities. Discretionary powers ensure that PCSOs are flexible, as they bestow on chief constables the authority to take the necessary steps to ensure that their PCSOs are suitably empowered to deal with the issues that are of most concern to local residents. The Government believe that these limited and flexible powers are one of the key strengths of PCSOs, providing them with the time and space necessary to get to know their local area and actively to engage and build relationships with communities.
I am happy to assure the hon. Gentleman that the powers available to PCSOs remain under constant review, and we are always willing to look at ideas, but we need to ensure we strike the right balance and do not overburden them. The Government welcome consideration of revisions to the powers where it is clear that they will enhance, rather than undermine, this important role. The draft Anti-Social Behaviour Bill, for example, proposes the introduction of a new dispersal power for PCSOs. That will replace two existing powers and will allow uniformed police officers and PCSOs to direct a person who has committed, or is likely to commit, antisocial behaviour to leave a specified area and not return for a specified period of up to 48 hours.
We must be cautious not to overburden PCSOs with powers that could introduce bureaucracy to the role, taking them away from providing the visible presence on the streets that we want. Extending the scope of existing PCSO powers could introduce to the role an unwelcome element of confrontation that is associated with the power of arrest and is outside the PCSO’s unique role. Many, in fact, see the power of arrest as a last—not a first—resort, preferring instead to focus on being proactive and preventive. Therefore, we need to ensure that we give full consideration to the issues around extending PCSO powers.
That lies at the heart of what might fall between the hon. Member for Wrexham and me. He quoted selectively from part of the letter that I wrote to him last November, so it falls to me to read the rest of it. He is right that I said that
“the principal role for PCSOs is as part of neighbourhood policing teams, connecting and engaging with their local community, as opposed to managing parking restrictions which is a matter for the Local Authority.”
He generously acknowledged that that is indeed the role of the local authority. I continued by saying that extending PCSO powers risks undermining that central role. From the letter he wrote on its behalf, I appreciate that Offa community council would want that power, but I said in my letter that that
“may not be true for all communities and legislating for such a change at a national level would not necessarily be uncontroversial.”
Ian Lucas
I accept that the move would not necessarily be uncontroversial, but I was clear about ensuring that it was a discretionary power that would be given to the chief constable. Will the Minister accept, therefore, that it is entirely appropriate for the Government to consult on whether to do that?
Damian Green
As I said, we published the draft Anti-Social Behaviour Bill. I know that antisocial behaviour is a term of art, but I am sure that parking dangerously outside a school can be regarded, certainly in non-legal terms, as antisocial behaviour, so the community council may want to contribute to the debate on that. The hon. Gentleman has already said that the extension of PCSO powers would require primary legislation, so, by definition, there will be no quick fix. He said that not having national legislation on this matter is the sort of thing that brings politics into disrepute, but I beg to differ. What brings politics into disrepute is insisting that every problem has to have a national legislative solution. This is clearly a local problem, although one that I dare say is replicated in various parts of each of our constituencies. Each local solution will be different.
Nia Griffith (Llanelli) (Lab)
Does the Minister agree that being confronted by someone who has powers and then finding that someone in a similar uniform does not have powers elsewhere is confusing for motorists? That could lead to unpleasant situations with motorists being unnecessarily rude. There is no excuse for rudeness, but it will be more confusing. People should never do the wrong thing in the first place, but we do not want to set up confrontation.
Damian Green
That is a fair point. There is clearly a balance to be struck between national and local powers, but we hold PCSOs in high regard precisely because they might well have different powers in different areas. The hon. Lady is absolutely right that people—motorists in this case—behaving in an antisocial way lies at the root of all this.
Damian Green
Let me make a specific point about the situation that the hon. Member for Wrexham described at the start of the debate, and then conclude with a general point. Pondering it in our interregnum, it occurred to me that of all the parking issues, parking outside schools is probably the easiest to solve. It is overwhelmingly likely to involve parents, so if the PCSO turned up with a traffic warden or police officer and ticketed everyone, they probably would not do it again. If they turned up twice over the course of a couple of weeks, they certainly would not do it again. Therefore, it is a prime example of where we can use the PCSO’s power and detailed local knowledge to bring to bear the forces of law and order in a way that would prevent future crime. As I said, that would be a good example of how to use the specific virtues of PCSOs, with the powers that they have, and also, their ability to relate to local conditions.
We continue to look for opportunities to enable PCSOs to be used to their full potential.
Damian Green
I do not think that I am. The solution that I have just suggested could be operated tomorrow, whereas the hon. Gentleman’s solution is to have primary legislation, which he knows would take months or years, and might well be opposed by many people around the country. There would also be practical issues if, as the hon. Member for Llanelli (Nia Griffith)said, people got violent. A PCSO does not have powers of arrest, so in such a situation, it would not be suitable for a PCSO to become engaged.
Often, we should look for the simplest, most practical solutions, but the overall PCSO role reflects a core aim of the Government’s police reform programme—that of reconnecting policing with the public—and I am confident that the value of PCSOs will continue to be recognised by PCCs, chief constables, and most of all, by the public, because they do an enormously good job in all our local communities.
Question put and agreed to.
Written Ministerial Statements
(11 years, 1 month ago)
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Child Care
(11 years, 1 month ago)
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The Economic Secretary to the Treasury (Sajid Javid)
High-quality, affordable child care is essential in improving children’s life chances and supporting parents back into work. The high cost of child care remains a significant disincentive to work for too many parents.
The Government will therefore introduce a new scheme to offer tax-free child care to working families. Support will ultimately be open to 2.5 million working families with children under 12, around five times as many as benefit from the current system. Support will be provided at 20%—equivalent to the basic rate of tax—of yearly child care costs up to £6,000 per child. This will be worth up to £1,200 per child, and so will save a typical working family with two children under 12 up to £2,400 a year.
To be eligible, families will have all parents in work, with each earning less than £150,000 a year, and will not already receive support through tax credits and later, universal credit.
The new scheme will be phased in from autumn 2015, replacing the existing system of employer-supported child care (ESC) and will build up over time to include all children under 12, with all children under five eligible from the first year of operation.
Tax-free child care will extend support compared to the current system of ESC, which provides a tax exemption for child care vouchers and directly contracted child care. ESC will continue for current members if they want to retain it and new claimants will be able to receive support through the new tax-free offer. ESC recipients who are eligible may choose to move into the new tax-free child care scheme if they wish, but will not be able to receive both. ESC will continue to be open to new joiners until tax-free child care is available. The tax exemption available for workplace nurseries will remain.
The Government will also increase child care support in universal credit to improve work incentives and ensure that it is worthwhile to work up to full-time hours for low and middle-income parents. A total of £200 million of support will be provided within universal credit, which is equivalent to covering 85% of child care costs for households qualifying for the universal credit child care element where the lone parent or both earners in a couple pay income tax. The details of how to provide this support will be determined as part of the consultation on the scheme for tax-free child care, to ensure the two schemes operate effectively together.
The new tax-free offer will be phased in from autumn 2015, partly funded by the phasing out of ESC. The £200 million universal credit offer is planned to be phased in from April 2016 as child care support moves from tax credits into universal credit and will be funded from within social security budgets at the time. Details will be set out in future spending reviews.
This announcement builds on support already announced by the Government, including increasing the free entitlement to 15 hours a week of free early education all three and four-year-olds; extending the free entitlement to around 40% of two-year-olds from 2014-15; and extending child care support in universal credit to parents working fewer than 16 hours.
At the same time, the Government are taking action to drive up the quality of child care and give more flexibility to professionals: improving qualifications through introducing early years teachers; increasing Ofsted’s focus on weaker provision, to drive up quality; and reducing bureaucracy for providers. Alongside improving standards in the early years, this will help ensure that parents’ money goes further.
The Government will shortly consult on the detail of the new tax-free child care scheme, including on how employers could continue to play a role in supporting their employees with child care costs within the new scheme.
Agriculture and Fisheries Council
(11 years, 1 month ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson)
The next Agriculture and Fisheries Council is on Monday 18 and Tuesday 19 March in Brussels. I will be representing the UK. Richard Lochhead MSP, Alun Davies AM and Michelle O’Neill MLA will also attend.
The two-day meeting will concentrate on the CAP reform package. Negotiations will centre on the four regulations that make up the package. The Irish presidency is seeking to agree a mandate on the CAP reform package at this Council to enable it to start negotiations with the European Parliament. If this can be achieved it will pave the way for a full political agreement in June.
There is one item under any other business regarding a Dutch request to discuss EU trade in plants with Russia.
Foreign Affairs and General Affairs Councils
(11 years, 1 month ago)
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The Minister for Europe (Mr David Lidington)
My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs attended the Foreign Affairs Council (FAC) and I attended the General Affairs Council (GAC) in Brussels on 11 March. The FAC was chaired by the High Representative of the European Union for Foreign Affairs and Security Policy, Baroness Ashton of Upholland. Commissioners Piebalgs (development), Georgieva (international co-operation, humanitarian aid and crisis response) and Fule (enlargement) were in attendance for some of the discussions. The United Nations and the League of Arab States Joint Special Representative for Syria, Lakhdar Brahimi, attended lunch with the Foreign Ministers.
The GAC was chaired by the Irish presidency, namely the Foreign Minister for Ireland, Eamon Gilmore.
Foreign Affairs Council
A provisional report of the meeting and conclusions adopted can be found at: http://www.consilium.europa. eu/uedocs/cms_data/docs/pressdata/EN/foraff/136004.pdf.
Introduction
Baroness Ashton began the FAC by briefing on her activities on a range of issues. She started with an update on the Serbia-Kosovo dialogue and her clear message to the parties on the need for timely progress. Baroness Ashton then outlined the state of discussions with Iran following the February E3+3 (UK, France, Germany, China, Russia, US) talks with Iran in Almaty, Kazakhstan. Baroness Ashton updated on the situation on Mali, emphasising the importance of the political road map and elections as well as development assistance, on which the EU would host a donors’ conference in May. The Foreign Secretary briefed his colleagues on his visit to Mali earlier this month. Baroness Ashton briefly mentioned the elections in Kenya, stating that the process had been largely peaceful so far. She had noted Kenyatta’s statement in which he promised to work with international institutions.
Russia
Ministers discussed the EU-Russia relationship. While Russia was an important trading partner for the EU, and co-operated well with the EU on a number of international issues, there were worrying trends regarding human rights and democratic standards. The Foreign Secretary underlined the importance of the EU’s strategic relationship with Russia and the importance of Russia fulfilling WTO commitments and addressing human rights concerns. There was agreement that the EU position was stronger when it acted in unison.
Japan
Ministers discussed priorities for the EU-Japan summit on 25 March in Tokyo. Negotiations on the free trade agreement would be launched at the summit, which would help develop stronger economic and trade relations. Ministers also argued for broader political dialogue and collaboration on security and other international issues.
Iraq
Ministers expressed their concern about the impact of the conflict in Syria upon Iraq. Ministers discussed the importance of the EU increasing its engagement, in close collaboration with the UN, US and other partners, and developing greater longer-term co-operation, including through the partnership and co-operation agreement currently being ratified.
Southern neighbourhood
Ministers discussed the EU response to the Arab spring, and the importance of the EU continuing to engage with countries in transition. The Foreign Secretary argued that EU support must remain consistent with its policy on conditionality, based on a credible assessment of partners’ progress on reforms. Baroness Ashton outlined EU efforts in Egypt, including recent visits by EU Special Representative for the Southern Mediterranean Bernardino Leon and the EEAS Deputy Secretary-General Helga Schmid. Ministers agreed on the importance of continuing to engage with Egypt, including on inclusive political dialogue, human rights and economic reform.
Ministers welcomed the recent formation of a new Tunisian Government, and noted ongoing socio-economic challenges facing the country. Baroness Ashton emphasised that the EU had committed significant programme funding in Libya and was progressing deployment of a civilian common security and defence policy (CSDP) mission on integrated border management. Commissioner Fule reported on how his recent visit to Lebanon had highlighted the difficulties posed by the continuing influx of Syrian refugees.
Syria
The UN/Arab League Joint Special Representative Brahimi attended lunch with Ministers. In the course of an extensive review of the situation, encompassing security, diplomatic, humanitarian and regional dimensions of the crisis. Ministers were reminded of the seriousness of the situation, and the need to bring the conflict to an end. Brahimi stressed that consistent and cohesive efforts by the international community were needed in support of conflict resolution.
Any other business
Moldova
Romania briefed Ministers on the “Friends of Moldova” meeting held earlier that morning, which Moldovan Foreign Minister Iurie Leanca attended. The meeting had emphasised the importance of a swift return to political stability.
Democratic People’s Republic of Korea
Germany raised the DPRK, urging the EU to implement the UN Security Council sanctions as rapidly as possible and to explore further autonomous EU measures, given the recent extremely worrying developments, including the increased rhetoric. Baroness Ashton agreed on the importance of addressing this issue, and said that the EEAS was already looking at further options.
Other business
Ministers agreed without discussion a number of others measures, including:
The Council authorised the Commission to negotiate the arms trade treaty in the framework of the United Nations on those matters coming under the exclusive competence of the Union;
The Council adopted the annual update of the EU’s common military list, which defines the items subject to EU common rules on the control of exports of military technology and equipment;
The Council extended and reinforced the EU sanctions against Iran that were imposed in view of serious human rights violations;
The Council adopted conclusions on Pakistan;
The Council took note of the first common civilian-military annual CSDP lessons learned and best practices report for 2011 as well as of the lessons of CSDP support to security sector reform.
General Affairs Council
A provisional report of the meeting and conclusions adopted can be found at: http://www.consilium.europa. eu/uedocs/cms_data/docs/pressdata/EN/genaff/136013.pdf.
The GAC focused on preparation for the 14-15 March European Council, which was due to cover economic policy and relations with Russia within the context of the ongoing discussion on the EU’s strategic partners.
The plenary session of the GAC was followed by a meeting with President of the European Council, Herman van Rompuy, which continued the discussion on preparing the European Council.
14-15 March European Council Preparation
The Irish presidency presented the latest version of the draft conclusions. This text focused on competitiveness, jobs and growth, and highlighted the need for smart fiscal consolidation. Much of this was positive in encouraging member states to implement the necessary measures to put Europe on a path to recovery. However, I argued for more emphasis to be placed on the two areas with the greatest potential to unlock growth: trade and reducing unnecessary regulation.
The draft conclusions include language related to a discussion planned for the European Council on the European semester, the annual cycle of economic policy co-ordination in the EU. The March European Council will set growth and structural reform priorities for the EU and the member states for the year ahead. It will also take stock of member states’ progress in implementing reform commitments under the 2012 country-specific recommendations and will provide broad guidance to member states on the 2013 stability and convergence programmes and national reform programmes. Despite the weight given to the European semester in the European Council conclusions, most of the discussion at the GAC focused on more forward-looking elements of economic policy.
I argued that Europe faced a debt crisis and a crisis of competitiveness and that we needed to focus on these challenges. Reducing the burden of regulation could, for instance, realise immediate benefits to businesses promoting growth, but these benefits could also improve the long-term competitiveness of the EU.
The European Commission published its small and medium-sized enterprises scoreboard on 7 March. We discussed this useful publication and I argued for more concrete measures to follow up on this work. Specifically, I pressed for clear deadlines and progress on the work identifying the “Top 10” most burdensome pieces of EU legislation and tackling these burdens.
I argued that trade was also an area where EU collective action brought real value through our combined negotiating power, but we needed to realise these benefits by pursuing trade agreements with greater energy and determination. I underlined the significance of the US President’s State of the Union address, which gave momentum to the proposed EU-US transatlantic trade and investment partnership. I also emphasised that we needed to give impetus to an EU-India trade agreement.
EU Council
(11 years, 1 month ago)
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The Prime Minister (Mr David Cameron)
I attended the European Council meeting held in Brussels on 14 and 15 March. The discussions focused on economic issues and growth and the situation in Syria. I also set out the three key economic issues of tax, transparency and trade; and the issues around terrorism that the UK will be pursuing at the G8 summit at Lough Erne in Northern Ireland in June.
Economic Issues and Growth
I have made the case at successive European Councils, alongside Chancellor Merkel and other like-minded leaders, for practical steps to strip away the red tape and EU directives that hamstring our businesses, especially small and medium-sized businesses—which have provided 85% of new jobs in the EU over the last decade. A fundamental principle for a reformed European Union has to be competitiveness. We cannot hope to succeed in the global race unless we tackle the self-inflicted weakness of excessive regulation and complex rules that stifle business.
In response, this European Council agreed that by June 2013, the Commission will set out proposals for how to reduce burdens on small and medium-sized enterprises including, for example, on rules on chemicals, product safety and customs. It also agreed that by the autumn of 2013, the Commission will produce a list of unnecessary EU rules to be reversed and removed from the statute book.
Syria
Britain and France have argued for several months that we need to amend the EU arms embargo to give us more flexibility to respond to events on the ground and to support the Syrian National Coalition. Last month, the Foreign Secretary secured agreement to amend the arms embargo so that we can provide non-lethal equipment; and technical assistance, advice and training to the National Coalition.
However, given the pace of events and the risk of deterioration on the ground, it is important to move now to create the option to go further if the National Security Council decides urgent action is necessary. President Hollande and I therefore secured agreement that, ahead of the deadline for renewing, amending or ending the embargo at the end of May, EU Foreign Ministers should consider further changes to the arms embargo to broaden support for the National Coalition.
Copies of the Council conclusions are available in the Libraries of both Houses.
Contingencies Fund Advance
(11 years, 1 month ago)
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The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
The Ministry of Justice requires an advance to discharge its commitments which are set out in its supplementary estimate 2012-13, published on 13 February 2013 as HC 894 (CG supply estimates, supplementary estimates).
Parliamentary approval for additional resources of £1,157 million for existing services has been sought in a supplementary estimate for the Ministry of Justice. Pending that approval, urgent expenditure estimated at £70,000,000 will be met by repayable cash advances from the Contingencies Fund.
Transport Safety
(11 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
On 15 April 2011 a major fire below the M1 motorway caused significant disruption to the road network for several days. The safety of all who use our transport networks is paramount and the Department for Transport takes the potential risk of fire very seriously. Therefore, following the fire, the Department for Transport asked the Highways Agency and Network Rail to carry out a comprehensive audit of potential sources of fire risk from third party activities at locations beneath, or adjacent to their networks and report back.
The reports were sent to the Department in May 2011 and set out:
details of the audits and inspections carried out by the Highways Agency and Network Rail;
recommendations for further action to reduce the likelihood of similar incidents happening again.
The reports contained specific information about vulnerable locations, which is not being released because of the potentially sensitive nature of these sites. However, both the Highways Agency and Network Rail are today publishing redacted versions of the reports on their respective websites. Copies will be also placed in the Libraries of both Houses.
The reports concluded that significant incidents of fire under or adjacent to both Highways Agency and Network Rail networks are infrequent, with structural damage arising from such fire extremely rare.
As a result of the review the number of vulnerable sites identified by the Highways Agency has nearly halved. The Highways Agency has been working closely with landowners and tenants to eliminate the small number of remaining sites that are deemed to present a possible fire risk. The agency will continue to review all of the sites identified as part of the ongoing monitoring of the network. This will mitigate the future risk of major fire events and ensure road users are kept as safe as possible.
Network Rail continues to work with tenants operating potentially higher risk businesses close to the rail network. It has a robust management regime in place to reduce fire risk and we are grateful to them and the Highways Agency for carrying out this important work.
State Pension Reform
(11 years, 1 month ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
My noble Friend, the Minister for Welfare Reform, Lord Freud, tabled a written statement in the House of Lords yesterday because events prevented the Department from making an oral statement in the House of Commons as planned.
I am pleased to announce the Government will be able to launch the new single-tier state pension in April 2016, in keeping with the original timetable.
Our 2011 Green Paper “A state pension for the 21st century” set out the Government’s vision for a simpler state pension, which would reward retirement saving and be fairer for those who have historically had poorer state pension outcomes, such as women, the low-paid, the self-employed and those with caring responsibilities.
The work undertaken that resulted in our White Paper “The single-tier pension: a simple foundation for saving” took longer than anticipated, mainly because the existing system is so complicated, containing 60 years of modifications and tinkering, and the road to fundamental reform is not straightforward when we also need to recognise what people have built up under the existing system. Consequently, a start from 2017 reflected the additional 12 months it took to complete our plans.
However, given the positive response to our White Paper, we looked again to see if it would be possible to return to our original timetable and to deliver reform as soon as possible, to support the roll-out of automatic enrolment into workplace pensions and provide certainty for both individuals and their pension schemes at the earliest opportunity.
Therefore, I can confirm today that, from April 2016, those reaching state pension age will do so in the single-tier system. The individualised pension will reflect the lives and working patterns of today’s working-age population, and recognise the vital social contribution of those caring for children, elderly relatives or disabled people through crediting arrangements. The single tier will also mean that, for the first time in around 40 years, self-employed people will be treated the same as employees for the purposes of state pension entitlement.
Reform in April 2016 will mean that around 400,000 more people will reach state pension age under single tier, including every woman affected by the acceleration of the state pension age equalisation process in the Pensions Act 2011.
Arrangements will also remain in place to enable people to pay voluntary national insurance contributions and Her Majesty’s Revenue and Customs is reviewing the time limits for those who will receive a single-tier state pension so that, if they delay paying voluntary contributions until a pension statement based on the single-tier pension qualifying conditions is available, they will not lose out.
As the single tier is a flat-rate pension, a consequence of its introduction is the closure of the state second pension scheme and, with it, the ability to contract out of this element of the system. Those people who were contracted out will see their national insurance contributions equalise to the same rate as the rest of the population, but will also build up access to the same flat-rate state pension, set above the level of the basic means test. I can also confirm that 90% of affected individuals reaching state pension age in the first 20 years of the single tier will receive more state pension than the additional national insurance they pay.
As stated previously, this will result in additional national insurance revenue for the Exchequer. About £3.3 billion is employer national insurance contributions from the public sector and so in effect a transfer within the public sector. Of the rest of the revenue, around £0.6 billion is employer national insurance contributions from private sector, £1.4 billion is employee national insurance contributions from public sector and £0.2 billion is employee national insurance contributions from private sector—this money will not be used for net revenue raising. As per standard practice, the detail of these fiscal impacts will be accounted for in the Budget on Wednesday.
Grand Committee
The Deputy Chairman of Committees (Baroness Andrews)
If there is a Division in the House, the Committee will adjourn for 10 minutes.
Official Statistics Order 2013
(11 years, 1 month ago)
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Lord Wallace of Saltaire
That the Grand Committee do report to the House that it has considered the Official Statistics Order 2013.
Relevant document: 22nd Report from the Joint Committee on Statutory Instruments.
Lord Wallace of Saltaire
My Lords, all Members of the Committee will be aware of the important work being done by the UK Statistics Authority. This body was created in 2008 with a statutory responsibility to,
“promote and safeguard the production and publication of official statistics”,
which includes monitoring of and reporting on official statistics.
Under the Statistics and Registration Service Act 2007, statistics produced by the Office for National Statistics, government departments, the devolved Administrations and other Crown bodies are automatically deemed to be official statistics. The Act also makes provision for identifying other organisations as producers of official statistics. This is important, as it enables their work to fall within the remit of the authority and the public to have added confidence in their statistics. The purpose of this order, which is subject to affirmative resolution, is to specify these organisations.
The UK Statistics Authority has been consulted in preparing this order, in accordance with the Statistics and Registration Service Act, and is content for it to be laid. The Cabinet Office has laid this order on behalf of government departments, in preference to each department laying an order for the bodies for which it is responsible. This approach saves considerable parliamentary time.
This is the fourth use of this order-making power by a Minister of the Crown, and revokes and replaces the one that came into force on 3 December 2010. The previous order contained 57 bodies. The 2010 order was amended by Article 17 of the Education Act 2011 (Consequential Amendments to Subordinate Legislation) Order 2012. This omitted entries relating to the Qualifications and Curriculum Development Agency and the Training and Development Agency for Schools, which were abolished by the Education Act 2011. It will also be amended by the Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013, which will come into effect on 1 April. This will reflect the change in name of the Financial Services Authority to the Financial Conduct Authority, which comes into effect on the same day.
In arriving at the current order, 21 bodies have been removed from the previous order and five new bodies have been added. Much of the reduction in the number of bodies is due to the recent reforms to public bodies. As noble Lords will recall, in 2010 the Government announced plans to reform 481 quangos to help reinvigorate the public’s trust in democracy; to ensure that the Government operate in a more efficient and businesslike way; and to radically increase the transparency and accountability of all public services. A number of these changes will come into effect on 1 April this year. It is important that these reforms extend to areas such as official statistics. Therefore, some of the changes have led to the streamlining of some statistics but those most important to public life have been preserved. The longer-than-usual hiatus between this order and the previous one has been to ensure that the new order fully captured these reforms.
In summary, this order reduces the number of bodies that are subject to the UK Statistics Authority’s oversight; those bodies listed on the order will have to work to the new code of practice for official statistics; and their statistics will have the potential to be nominated for formal assessment by the authority to be national statistics. I reassure the noble Baroness that I have discovered the difference between an official statistic and a national statistic, even though it took me some time. This House agreeing the order is a vital part of enhancing public confidence in official and national statistics, and I beg to move.
Baroness Smith of Basildon
My Lords, I thank the noble Lord for his introduction and explanation of this order. Perhaps the only point he missed was to stress the importance of always having accurate statistics, and indeed that is implicit in bringing forward the order today. It is a sign of the times that public confidence is higher and trust is greater in statistics if they are seen to be produced independent of government, and I think we should put on the record our praise of the UK Statistics Authority and of the Office for National Statistics, which is part of the executive wing, as it were, of the Statistics Authority. In many ways, the authority acts as a check and balance on some of the important areas of the economy. It is helpful that the Statistics Authority can look at statements and figures so that the policies of all political parties can be held to account. We can ask the Statistics Authority to check the accuracy of any statement that is made.
However, this is not just about the face value of statistics, but how they are used and how they can be misinterpreted either accidentally or deliberately. We have seen that recently. The Minister may be aware that the Statistics Authority had to write to MPs. Any of us can make a mistake, and in this case it was made in a Conservative Party political broadcast on 23 January. It got into a muddle between debt and deficit, and that had to be put right. My understanding is that the broadcast said that it had gone down, but information from the UK Statistics Authority showed that net public sector debt in June 2010, the end of the second quarter, was £811 billion, which represents 55.3% of gross domestic product, and that by the end of the fourth quarter 2012 it had risen to £1,011 billion. We should thank the Statistics Authority because it is able to make corrections to statements made by politicians of any party because it has the confidence of the public behind it.
I know that the noble Lord has worked through the order and looked at the different definitions. As a former Minister who was in the same position that he is in now, perhaps I should not have been puzzled by this, but I want to ask about the Statistics Board. The order refers to consultation with the board and it is referred to in the legislation, but it is actually the UK Statistics Authority and the ONS. The only reference I can find to a board is to the Board of the UK Statistics Authority, whose membership includes people from the ONS—the chief executive, the National Statistician and the Director General. I am slightly puzzled about why the order refers to the board when the entity is in fact the authority, but I hope I am correct in assuming that the board he is referring to is the board of the authority. It would be helpful if he could confirm that.
The board was consulted and I assume that the response to the changes being made was positive. It would be helpful to have the complete list in the schedule, but 21 organisations were removed. If I understood the Minister correctly, he has already answered part of my question in his opening. Part of that arises from the Public Bodies Act, about which he will understand we have mixed views, in particular with regard to the changes being made. If those organisations are no longer able to produce official statistics, does that mean that there is now a lack of available statistical information, or has the work of those 21 organisations which are no longer on the approved list been allocated to other organisations? Are we still able to get the kind of information that was being produced? Further, is the Minister able to provide a list of the 21 organisations? It would be helpful if he could write to me.
The explanatory note also said that the charities being included as producing official statistics will have no official burden placed on them. Does that imply that they have previously produced statistics of use to government and held in public regard, but that have not been regarded as official? If the Minister can say something about that, it would be helpful.
I was puzzled to find that two organisations were not on the list. As I mentioned to the Minister, later on today we will have a debate on crime statistics. It is helpful to have this debate today to help inform that debate later on. In my reading for that debate, it was clear that the UK Statistics Authority says that there are two sources of official figures for crime statistics: one is police records from individual police forces and the other is the British Crime Survey. Individual police forces are obviously not on here, I assume because they feed information to the Home Office which then issues that information. If I am wrong about that, I would be happy to be corrected. But the British Crime Survey is not here. It is interesting if the UK Statistics Authority recognises the British Crime Survey statistics as being very useful, if not “official”—because that is a legal term. If it uses those statistics, I wonder if it would be appropriate for the survey to be on the list. Why is it not?
My final point is on another organisation that I doubt has been missed: the Office for Budget Responsibility. When they came into power, the coalition Government were clear that they wanted to see independent figures and assessment of the economy, and set up the Office for Budget Responsibility in response to that. That was widely welcomed. Yet it is not included in the list. Clearly, it is highly regarded—as is what it produces. Like the UK Statistics Authority, it is a check and balance. The Prime Minister said in a speech on the economy:
“As the independent Office for Budget Responsibility has made clear, growth has been depressed by the financial crisis, by the problems in the eurozone and by a 60% rise in oil prices between”,
and he gave the dates.
“They are absolutely clear, and they are absolutely independent. They are absolutely clear that the deficit reduction plan is not responsible; in fact, quite the opposite”.
The head of the Office for Budget Responsibility then had to write to the Prime Minister to make clear that that was not the case. He said:
“I think it is important to point out that every forecast published by the OBR since the June 2010 Budget has incorporated the widely held assumption that tax increases and spending cuts reduce economic growth in the short term”.
Clearly the OBR has the authority and credibility to write to the Prime Minister when he gets something wrong in talking about statistics and the economy, but it is not listed as an official statistic-producing body. It would be useful were the Minister able to help me understand the reason for that.
Those are the only questions I have. Clearly, it is helpful to have the list and we are obviously supportive of the order. It would be helpful to have the responses to the questions I have asked.
Lord Wallace of Saltaire
My Lords, I thank the noble Baroness for her constructive speech. Of course, I should have said that this is very much an all-party set of issues. The last Government introducing this new system of greater independence for statistics was a very valuable contribution to more informed debate. I am in some ways a great admirer of the Daily Mail and its uses of statistics, and the wonderful way it manages to imply that statistics mean something entirely different from what most of us understand them to mean. Usually you have to read down to the tenth paragraph on the second page to discover that actually the story is not as good as it seems. In politics, we want an independent body that can point out that statistics cannot be twisted in that way. That is what this current system most attempts to do.
Baroness Smith of Basildon
Just as an aside, I owe the noble Lord an apology. In the last debate we had, I accused him of being a Guardian reader. I now appreciate that he is in fact a Daily Mail reader.
Lord Wallace of Saltaire
I do my best to skim through several newspapers of one sort or another.
The Explanatory Memorandum for this order lists the 21 bodies that are disappearing. I know that the noble Baroness will be deeply familiar with a number of them, such as the British Educational Communications and Technology Agency, the National College for Leadership of Schools and Children’s Services Limited, the National Patient Safety Agency, the National Policing Improvement Agency and so on. In almost all respects, the functions of those bodies have now been transferred to other executive agencies and the statistics which they were responsible for producing will thus be provided by the new agencies. However, I will check to see whether there are any holes in that and will, of course, write to the noble Baroness.
My understanding is that the Office for Budget Responsibility—again, I will check this and write to her to confirm it—rather like the National Audit Office, is an independent body and is thus responsible for its own quality assessment rather than being a government agency which has to be checked by the UK Statistics Authority. Similarly, the Bank of England’s statistics are not checked by the UK Statistics Authority because the Bank is an independent body which is responsible for its own statistics and their quality. That is my understanding on the OBR, but again I will check on that.
I will have to check which agency is now responsible for providing the crime survey. I suspect that it is under the Home Office, which will therefore be responsible for it.
Baroness Smith of Basildon
I am grateful to the noble Lord for looking into this. As regards the 21 that were off the list, if he can write to me to clarify any gaps, that would be helpful.
I think the noble Lord will find that the British Crime Survey does not come from the Home Office. I drew a distinction between the police force figures, which I think may be produced by the Home Office, and the separate, more independent British Crime Survey. If the figures are used by the statistics authority, I wonder why they are not included in the list. I am very happy for the noble Lord to write to me on that.
Lord Wallace of Saltaire
I will check on that. It is absolutely right that we should use a case like this as a chance to check that reliable statistics on important matters are coming from agencies which we all respect.
Having answered those questions, I thank the noble Baroness for her comments and very much hope that the Committee will be willing to accept the Motion.
Electoral Registration (Disclosure of Electoral Registers) Regulations 2013
(11 years, 1 month ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wallace of Saltaire
That the Grand Committee do report to the House that it has considered the Electoral Registration (Disclosure of Electoral Registers) Regulations 2013.
Relevant document: 21st Report from the Joint Committee on Statutory Instruments.
Lord Wallace of Saltaire
My Lords, in moving the Electoral Registration (Disclosure of Electoral Registers) Regulations 2013, I wish to speak also to the Electoral Registration (Postponement of 2013 Annual Canvass) Order 2013. The Electoral Registration and Administration Act 2013 received Royal Assent on 31 January. It marks the first legislative step towards fulfilment of the coalition Government’s commitment to speed up the implementation of individual electoral registration (IER) so that it takes place in 2014-15, a commitment reaffirmed recently in the Government’s mid-term review.
The principle of IER has won cross-party support. Indeed, the change to individual registration was introduced into the Political Parties and Elections Act 2009 in your Lordships’ House with cross-party support. In passing the ERA Act earlier this year, Parliament showed its intention to see the implementation done using a different plan and a different timetable. The transition to IER will begin in the summer of 2014 and the Government are planning that it will end with the publication of the first IER-only register in December 2015. I know that this is familiar to all those present as we spent a great deal of time debating all these issues. The legislation was altered in your Lordships’ House so that the end may come in either 2015 or 2016, with an order laid by the Secretary of State of the day required to conclude transition. I reaffirm the Government’s commitment to concluding the transition in 2015 in accordance with the implementation plan already published.
The two statutory instruments before the Committee today are key components of the transition to IER in preparing for the confirmation data-matching process. It is one of the important changes from the transition envisaged by the PPE Act 2009.
In their official response to pre-legislative scrutiny on IER, the Government announced that part of the transition would be a data-matching stage whereby all electoral registers in Britain would be matched against trusted public datasets. Where a positive match is made between an entry on the register and information in the dataset, that person may be “confirmed” as having an IER entry on the register because the electoral registration officer can have confidence that they exist and reside at that address. These people will not have to supply their personal identifiers—their national insurance number and date of birth—unless they move house and apply to register at their new address.
Preliminary findings from pilots of this data-matching system have been published on the gov.uk website, and suggest that approximately 70% of existing electors will be confirmed on the register through data-matching. This is slightly higher than the results of previous pilots, with results suggesting that we can be confident in the accuracy of the matching, both of which auger well for the success of data-matching in the transition to IER. Both instruments being considered today support that data-matching element of the transition in very important and practical ways.
Regulation 2 of the draft Electoral Registration (Disclosure of Electoral Registers) Regulations 2013, if approved, will allow EROs, working with the Government, to carry out a dry run of confirmation data-matching, so that we can be even more confident that the new system will work when it goes live in the summer of 2014. The regulations would enable the Lord President of the Council to require electoral registration officers to disclose the information on their electoral registers to him through a conduit specified in writing for the purposes set out in paragraph 1A of Schedule 2 to the Representation of the People Act 1983.
The conduit will be the IER digital service, which is currently being developed and will be able to carry out the secure transfers of data required for IER, including the confirmation data match. The service is not identified specifically in the regulations in order to allow for flexibility to handle risks around this data transfer, whereby any problem that arose in using the digital service could be dealt with by using a different conduit for data transfer without the need for changes to the regulations. The Information Commissioner’s Office has advised us that this is the best way to legislate for this kind of digital data-transfer system.
Regulation 2 also provides for the sharing of the information on the registers with the Department for Work and Pensions, where it may be compared against certain data held there and matched against the names, addresses and dates of birth. Date of birth is included because this is held by EROs in relation to attainers—those under 18 who will become electors during the life of the current register.
The personal identifiers that will be used as part of the verification process for IER—the national insurance number and date of birth—will not be disclosed under these regulations because they do not appear on the electoral register, with the exception of attainers’ dates of birth. This is also true of the full confirmation process in 2014, meaning that considerably fewer items of sensitive personal information will be transferred through the IER digital service and matched with DWP data than would be the case if confirmation data-matching was not being used as part of the transition to IER. Once the information has been matched at DWP, a match result will be sent back to the ERO. In the full confirmation process in 2014, this result will assist the ERO in deciding whether the person can be confirmed on the register, or if they should be invited to make an IER application.
In the dry run later this year, however, there will be no contact with electors. Instead, the EROs will have an indication of what their overall match rate for their local authority area will be in 2014, and therefore the extent to which they are likely to need to invite and process IER applications. They may also find that certain areas in their zone have lower match rates than elsewhere. In this case, they may, for example, feel that they can focus resources in areas with low match scores during the canvass period to ensure that the information on the register for those areas is up to date for the 2014 confirmation data match.
In order that this dry run and the 2014 confirmation data match can take place, these regulations would also allow local authorities to build up their IT resources and connect to the secure IER digital service in order that they can disclose their registers in the format and through the conduit specified by the Lord President, as they will be required to do Regulation 2(3). By setting up this IT infrastructure and having a dry run of the process this year, we can be confident that all the component parts are in place and all EROs are securely connected to it before the transition to IER and the full confirmation data-match in summer 2014.
Under the Electoral Registration Data Schemes (No. 2) Order 2012, this connectivity is already being set up in 22 local authorities in which pilots are being conducted. That work, under that order, will cease at the end of 31 March this year, though, and these regulations will enable it to continue in those authorities and to be rolled out to the rest of Great Britain. It is vital that this work is continued uninterrupted in the pilot areas and begins as soon as possible elsewhere, with these regulations in force from 1 April 2013.
Having described the context for the draft regulations at length, I now turn to the draft Electoral Registration (Postponement of 2013 Annual Canvass) Order 2013. The postponement of the annual canvass was also outlined in the Government’s response to pre-legislative scrutiny in February 2012. The purpose is to ensure that confirmation data-matching in summer 2014 is done using registers that are as complete and accurate as possible. We know that the completeness and accuracy of registers deteriorates over time at a rate of around 1% per month, so reducing the gap between the compilation of the register and the point at which the data are matched should improve match rates.
We announced that the canvass due to take place in autumn 2013 would be postponed so that the revised register would be published in early 2014, rather than December 2013. The draft order sets out the specific dates for the canvass and the publication, with canvass activity beginning from 1 October 2013 and the revised register being published on 17 February 2014 in England and on 10 March 2014 in Scotland and Wales. These publication dates represent the best balance between the benefits of delaying the canvass to improve the match scores and the need for electoral administrators and political parties to have the revised register published prior to local elections and European Parliamentary elections, due to take place in 2014.
The different dates for England and for Scotland and Wales reflect this point. As there are local elections due to take place in England on 1 May, the register will be published earlier there, whereas there are no such elections in Scotland and Wales so the register can be published later, as long as they are available in time to prepare for the European Parliament elections.
It is worth noting that, while 1 October is given as the date from which canvass activity may begin, this does not mean that registration officers must begin on that date. Indeed, many may feel that a shorter period, beginning in late October or early November would be more suitable for their district. By setting 1 October as the date after which canvass activity may take place, we are allowing EROs to be flexible in planning for their district. The October to February and March time frame is akin to the longest period in which we are aware of EROs carrying out canvass activity at present, from July to late November.
As set out in the Explanatory Memoranda for these instruments, formal consultation has been conducted with the Electoral Commission on both instruments, and with the Information Commissioner’s Office on the regulations. This is in addition to informal and ongoing consultation on these instruments and other delegated legislation with these organisations, as well as with the Association of Electoral Administrators, the Scottish Assessors’ Association, and the major political parties and other stakeholders.
These two statutory instruments, if approved, will play an integral part in preparing for the transition to individual electoral registration in 2014. Between them, they would set up the IT infrastructure for confirmation data-matching in summer 2014, enable a dry run of the process to be conducted in advance, and ensure that the registers used for the 2014 data-match are as complete and accurate as possible.
We have been through much of this in previous debates and, while passing, working through the ERA Act. I hope that Members of the Committee will recognise that the Government are continuing to work as well as possible, and as actively as possible, to make sure that we end up with as complete and as accurate an individual electoral register as possible, as we move through this transition.
Lord Tyler
My Lords, I have only a very small contribution to make, but with one practical improvement, which I hope the Minister will take back to those responsible, my contribution might be even more succinct and brief.
I am a member of the informal cross-party group of parliamentarians which advises the Electoral Commission and therefore very aware of the concerns the commission has had during this process. The Minister may know that both here, in Grand Committee, and in the Chamber I have been living with IER even longer than he has and it is beginning to wear me down. I hope that we are not going to have too many more of these splendidly erudite occasions.
My problem is the way in which consultation is undertaken. The Minister referred to the consultation with the Electoral Commission and this is referred to in the explanatory notes on the statutory instrument referring to disclosure of electoral registers in paragraph 8(1), where it reads:
“The Commission has recommended that it should be under an express duty to evaluate the confirmation trials, with a power to require those concerned to provide relevant information. The Cabinet Office and the Commission have discussed this point and have subsequently agreed that the general power to require a report, set out in primary legislation, is sufficient”.
Neither the explanatory note nor the document to which I am about to refer from the commission itself is dated; we do not know which comes before which. If that was the conclusion of the consultation with the Electoral Commission, it is therefore surprising that in the last few days those of us who are interested in these matters received directly from the Electoral Commission a document saying the following:
“We have asked the Government to confirm that it will request the Electoral Commission to evaluate the confirmation trials … in the debate on this Order in the House of Commons on 11 March, the Government did not give such assurances. The Commission cannot undertake the necessary evaluation without a direction from the Government. The Government should confirm that it intends to require the Commission to prepare a report under Section 53(6) of the Representation of the People Act 1983 on the operation of the confirmation process trials under these Regulations”.
My noble friend has laid great stress on the importance of these confirmation trials; I entirely agree with him and endorse everything he said. Who though will judge the validity of those trials if it is not the commission? As I understand it, from this brief from the commission, which as I say is not dated either, I do not know which comes before which. Was there a happy and successful conclusion to the discussions between my noble friend’s colleagues and the commission or was there not?
I am afraid the same problem arises under the other draft statutory instrument that we have before us, although perhaps on a more minor point. This is the very important question of what flexibility is given to the EROs to decide the gap between making their canvass in the autumn of 2013 and the new register in February 2014. The undated Explanatory Memorandum from my noble friend’s department says:
“The Commission recommended … the Order should be amended to specify that canvass activity should not begin before 1st November 2013, so reducing the period between the start of the canvass and the July 2014 confirmation exercise while still allowing meaningful canvass activity to start before Christmas 2013”.
That is at variance, again, with the advice given in the undated advice from the Electoral Commission in the last few days, where it still sticks to the point that it thinks the gap may well be too long and that giving flexibility to the ERO may actually cause the eventual result statistically to be less accurate and less effective.
My speech could have been cut into a quarter if these two documents had been properly dated. We are always asking for documents put before your Lordships’ House to be properly dated. It would seem to be the most basic and simple administrative convenience for Members of your Lordships’ House to know which document comes before which. I make that plea again and I hope that my noble friend, who is amazingly effective in getting civil servants to do what we expect of them—to be as efficient and effective as they usually are—will be more successful on this occasion than previously.
Baroness Hayter of Kentish Town
My Lords, I have to say that if the noble Lord, Lord Tyler, has really been worn down by all these debates on IER, he is showing no sign of it whatever.
I thank the Minister for introducing these measures. I turn first to the disclosure regulations. The Committee will recall that we welcomed all the efforts made to locate and contact eligible voters absent from the register, and to confirm those already on the household list. We therefore fully support this dry run, which will assist EROs to compare their data against datasets kept by DWP and to test the confirmation exercises.
Noble Lords will not be surprised that I have a number of questions. I had hoped that if the exercise had revealed the names and addresses of people not on the current list, the ERO would then be able to write and invite them to register. The Minister said that there would be no contact, but I do not know whether that means that even if an ERO finds from DWP material someone who is not on the register, the ERO will be unable to approach that person. Perhaps the Minister can clarify that.
We know that the Minister in another place confirmed the Government’s confidence that everything, including the resources, is sufficiently in place for this work to happen within the required timescale. Perhaps he can repeat that assurance for the benefit of the Committee, together with any comfort that he has received from the Electoral Commission.
The other issue that I had intended to raise was that mentioned by the noble Lord, Lord Tyler—to ask Minister to confirm that the Electoral Commission will be required to evaluate these pilots and therefore to report back to the House.
Will the Minister also confirm that the regulations will give the necessary authority for all the relevant parties to release the data necessary for this work? Perhaps he can also assure the Committee that all the relevant parties involved will be clear about their duties and responsibilities under the Data Protection Act before any data-sharing begins. Perhaps he can set out what safeguards are in place to protect individuals’ data security. We noted in previous discussions on individual registration that some people, including those in your Lordships’ House, tend to register their vote at one address but use another address for correspondence. That will clearly be a major issue when using the DWP material. Perhaps the Minister can outline how this is to be dealt with in the pilots.
I turn to the second measure, on the postponement of the 2013 household canvass, which is now to be published in England in February 2014, and in March in Scotland and Wales. The Minister will recall my sadly unsuccessful attempt to remove from the then ERA Bill the ability of the Secretary of State to abolish the canvass. That is an indication of how important we see this tool in seeking out and registering all citizens with an entitlement to vote. Clearly, this will be even more important in the move to IER, which will fully replace the household register only in 2016. I ask the Minister to confirm that he is confident that the Government’s plans will ensure that by 2016 we will have a better register than we have at present, and that the Government remain clear that there will be no dropping of the household register before 2016.
We are very content that the Government push ahead with locating non-registered but eligible electors, so that by 2016 we have the maximum possible number of individually registered electors by a variety of means and no one is inadvertently denied their vote in 2016. But we seek assurance that any such work is not with the idea of bringing forward sole reliance on the individual rather than household-registered electorate. In the mean time, however, while we remain with household lists, as the Minister has said that registers decline in accuracy by about 1% a month, we are content with the canvass taking place slightly later—provided that the information is then made available to political parties as soon as possible thereafter, so that their work on the lists can begin, as he mentioned. This is key. The Committee knows that much of the business of alerting voters to the fact that they are or are not on the electoral roll is done by political parties, as the voting cards tend to go out only a short time before an election. It will be more and more important, with the gradual shift to IER, for parties to have early and easy access to the new registers so that they can undertake their canvass work and so that anyone left off can be identified in time to rectify that absence. We also need, as early as possible after the delayed canvass, publication, perhaps monthly, of a rolling register, showing IER flags.
We know that the ERA allows for transfer to IER to be completed by the end of December 2016, which is a sensible date. The Committee will understand that we remain a little nervous. The Act retains a power to hurry it through earlier than that, but we hope that the Government are not trying to do that, given the risk of losing eligible voters. We would also query—and this was another point raised by the noble Lord, Lord Tyler—whether there is a satisfactory way in which to judge whether the 2016 date is appropriate to complete the transition. We would like to know what criteria would be applied and what would be the role of the Electoral Commission in such a process. Under the Labour Government’s legislation on IER, the Electoral Commission had a pivotal role in deciding whether progress had been sufficient to create safe conditions for the final move to be made. This Government removed that role, but surely the commission must have a duty to press the “Go” button, if that decision is to clearly non-political and based on solid data.
Perhaps I could use this opportunity to ask the Minister two questions.
Baroness Hayter of Kentish Town
Yes, but I once asked the noble Lord 16.
First, are the Government committed to the December 2016 timetable? Secondly, will they await a commission pronouncement on whether the conditions are right before making the final transition to IER? We assume that a core criterion for assessing those conditions is whether, as the Minister says, the electoral register is at least as accurate as the current register, but we need that to be judged by an independent body, which surely can only be the Electoral Commission.
Finally, we return to the point of which we were reminded by the noble Lord, Lord Tyler, that the Electoral Commission remains concerned about an October rather than November start date. I noticed that, in introducing this, the Minister seemed to say that a later date might be more suitable. Perhaps he could clarify whether that reflects discussions with the Electoral Commission.
Lord Wallace of Saltaire
I thank the noble Lord and the noble Baroness for their contributions. I should say to the noble Lord, Lord Tyler, that this may not be the last SI on this subject and it is important, since this is such a key element, that we make sure that we have all-party confidence in the process as we go through. We are dealing with data-sharing in some sensitive areas, so we need to make sure that everyone is carried along.
Lord Wallace of Saltaire
My Lords, some of the questions raised are familiar to us from previous debates and will no doubt be repeated in further debates. Let me summarise: of course we want to ensure that, as we go through this important transition, we carry all parties and stakeholders with us, that confidentiality of data in terms of data-sharing is maintained, and that the Electoral Commission is fully engaged throughout the process.
On the flexibility of electoral registration officers in deciding on the canvass, as I said in my speech, some will decide not to start until November. I am tempted to say to those who live in the lush south, such as my noble friend Lord Tyler, that “it’s grim up north”. Canvassing in north Yorkshire in January and February is not always easy. My mother-in-law, when she lived in Upper Wharfedale, was usually snowed in for at least six weeks during that period. It will differ from area to area and this is why we are allowing EROs a certain amount of flexibility.
I say to the noble Baroness, Lady Hayter, that this is a dry run. It is not intended to involve contact with electors. It is a confirmation test of how far we can get matching data with the DWP database and others so that we have a better indication of the scale of the remaining chunk of the electorate who need to be visited or contacted one way or another. That is the whole purpose of this activity. I repeat the assurance that we are on track. We are confident that we will be able to carry through this process by our preferred date of December 2015 rather than delaying until 2016. However, as the noble Baroness is well aware, we will be monitoring this as we carry it through. If we discover that there are delays along the way, there is the potential in the Act for that delay.
I have confidence in the Government’s digital service in terms of data sharing. I have spoken to staff in that service on a number of occasions and am very impressed by what they are doing. There are some larger questions here about data privacy, data sharing and data use. The Cabinet Office is in the process of setting up a briefing for Peers on the digital revolution. One of the issues that we will cover for that will be precisely data privacy and data protection. I hope that we will get a good audience for that because there are some much broader issues here than simply this Act which I think it will be useful to explore.
I was asked whether the new register will be better than the present one. Given everything I have seen about the long-term deterioration of the current register’s accuracy, I say cautiously that our aim is that the new register will be at least as good as the one we have now, and we will end the long-term process of deterioration from which the register has been suffering. The Government are thus confident that we will come through this process with as accurate and complete a register as possible.
The suggestion of flagging the status of the register on a monthly update is one that we will take away and consider further. On the question of annual canvasses, I reassure the noble Baroness that we have no plans to abolish the annual register to identify potentially eligible electors and invite them to register. However, as we have discussed on previous occasions, the process of doing the annual canvass is becoming more difficult over a long-term period. It is also getting more difficult to recruit people to do the annual canvass. That is something we need to bear in mind as part of a much longer-term transition of how we manage a process which was, after all, set up in the early 20th century and may not be entirely suited to the sort of built environment which we have in many areas of Britain. The resources are in place. The Government are committed to concluding the transition by the end of 2015, if all is in place. That will, of course, be subject to everyone with a stake in the process having confidence that this has been completed, certainly including the Electoral Commission, which has been closely involved so far and will rightly continue to monitor and comment as we carry through the process. I hope that I have answered all the questions. I will write to those who have contributed if there are any further questions that I have not answered. I commend the regulations.
Electoral Registration (Postponement of 2013 Annual Canvass) Order 2013
(11 years, 1 month ago)
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Lord Wallace of Saltaire
That the Grand Committee do report to the House that it has considered the Electoral Registration (Postponement of 2013 Annual Canvass) Order 2013.
Relevant document: 21st Report from the Joint Committee on Statutory Instruments.
The Deputy Chairman of Committees (Baroness Andrews)
My Lords, we will adjourn for five minutes to give the noble Lord, Lord Hunt, a chance to get here for the next debate. There has been a long Division, so he is possibly stuck somewhere. We will resume at 4.35 pm.
Children: Developmental Care and Autism
(11 years, 1 month ago)
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Lord Maginnis of Drumglass
To ask Her Majesty’s Government whether they have made any recent evaluation of the efficiency of administrative health units with regard to the provision, assessment and diagnosis of developmental care for children with special needs, particularly in relation to Autism Spectrum Disorder.
Lord Maginnis of Drumglass
My Lords, I appreciate the opportunity to raise the albeit touchy issue of government and administration—from my perspective, perhaps I should say government versus administration—particularly in so far as it impacts on the delivery of health services. Despite having been married to a nurse for the past 52 years, my analysis will not presume to deal with matters clinical but will very much deal with delivery, especially concerning early intervention and diagnosis relating to children with special needs.
Autism spectrum disorder—ASD—is an area that increasingly confronted me as a Member of Parliament in days gone by, when parents would come to me in desperation. Despite Kanner having defined the condition as long ago as 1943, I was unfamiliar with it even though I trained as a schoolteacher 15 years after that. I realised that there was virtually no departmental provision of any consequence. Therefore, when the Northern Ireland Assembly eventually got going and I was fortunate enough to have a colleague, Michael McGimpsey, as Minister of Health, I prevailed on him to such an extent to carry out an independent review of autism services that he asked me to chair it.
In response to a Parliamentary Question during direct rule, I had been told that in Northern Ireland there were 686 children waiting up to 35 months for assessment and diagnosis. That meant that children were virtually in school before they had the benefit of any meaningful interventions. Three years, often more, were lost—developmental years that could never be retrieved. I want to put on record my gratitude to Angela McLarnon, who at that time headed up the Northern Ireland cohort of around 600 health visitors; she was the one who made things happen. As a result of the review we carried out, we now have uptrained all our health visitors. No child waits more than 13 weeks before assessment and diagnosis, and every child gets a home visit for general developmental assessment at two years old.
I want to say two things at this point. The ratio of health visitors to the birth rate in Northern Ireland is roughly 40:1, while here in England it is 83:1. I know there is an idea that the number of health visitors will be increased by roughly 50% here in England but I contend that this country needs to be aiming at something like a 100% increase in health visitors if it is to have the same service as we have in Northern Ireland. We all know the lifelong importance of early intervention in special needs cases. Before anyone dismisses that idea on the basis that England is more urban than Northern Ireland, I will partly concede that point—but only partly. I calculate that the planned increase is at best 50% too little and that assumes that there is a comparable and specific ASD uptraining in place for all health visitors. Is that the case? I am sorry to bore everyone with statistics, but the situation and outcome needs to be assessed on the following basis. Health visitors in England should, on top of their other responsibilities, aim to make one general developmental assessment home visit per working week. This requires a maximum ratio in terms of annual live births to health visitors of 45:1; it should be no greater than that. I am talking about 16,000 health visitors, not the proposed 12,000 and certainly not the current, unacceptable 8,000 plus.
That is not the whole story, however. Given that 1.2% of live births will be children on the autism spectrum, English health services will cater for roughly 8,700 children with that condition every year. Extrapolate that to school age and each health visitor is being asked to monitor five children with ASD on an ongoing basis, which is twice the number we in Northern Ireland consider practical and acceptable. As a schoolmaster, I believe there should be an overlap between health and education, which does not properly exist today, particularly in this specific area. We should be talking about a monitoring process up to the age of eight. I do not expect the Minister to give me a detailed answer, but I hope that she will at least be able to reassure me that her department will take note of something that in my experience will help to meet our responsibility to those with ASD.
One final thought. Just like the rest of us, those on the spectrum fall within the normal bell-shaped curve; 7.5% brilliant, 7.5% significantly disabled and 85% who can live very normal lives. I am sorry to put it as crudely as that, but it is the challenge facing us today. The two year-old general development assessment is the key, not only to autism, but to a multitude of other conditions. I will not go through them all but they are conditions such as dyspraxia and dyslexia, which are often classified under the term “comorbidity”. Sadly, we no longer have answerable and responsible government as I once knew it. Over the past 20 years we have a mere delegating procedure and this is the challenge I ask the Minister to address today. Where among the disparate layers of the arm’s-length administration can we address this issue on a co-ordinated and cohesive nationwide basis? Is it among 10 strategic massive health authorities or among 151 primary care organisations that vary in population from less than 100,000 to more than 1 million?
I will conclude. If it is not the Government who are going to preside over and be answerable and accountable among this mish-mash of administrative units, are we condemned to another postcode lottery? The Minister knows that I am not targeting her personally, but if we are to have effective, early-life healthcare her department needs to face up to the real challenge of there being too many managers and not enough workers and to feel the accountability that pervades most of society today, not least our health service.
Lord Addington
My Lords, the noble Lord, Lord Maginnis, returns to a subject different facets of which I have heard him talk about before. Primarily, it is based on the self-evident fact that if you identify a problem early you stand a better chance of reaching a better outcome. So much for the rocket science involved in this, but it is quite obvious when you are doing that.
How do we do this? There is an assessment at about the age of two. The briefing I received referred to classical autism: those with certain patterns and conditions such as low IQ and behaviour that occurs. You are able to spot that by about the age of two. That probably fits more neatly into what the noble Lord was saying than anything else we will get across. Then, as the noble Lord again pointed out—he can feel free to shoot my foxes as there will always be another one coming along—that will not apply to everyone throughout the process, so assessing until the age of eight is another good idea. If somebody does not fit neatly into that classical band, it is not very obvious that they have a problem. For instance, if that person does not get much pre-school training, education et cetera, their problems may only manifest to a noticeable degree later on. Also, the level of training of the person observing them has to be fairly exact. As you go through the educational process, many people in the higher-functioning part of the autism or Asperger’s spectrum have problems that a teacher will observe not in the classroom but in the playground because that person will not socialise normally.
There has recently been a little splurge of information about autism in the papers. Some of it was accurate and some of it was not. Even a little test in the Times asked how far on the spectrum you were. If you got to 15 on this test, it said “Don’t worry, you are still quite normal”. I, in a dark moment on a train, took the test thinking, “I wonder how strange I will come out”. I only got 12, thought that was a bit low, went back and discovered that I should have marked myself at 10: it is one problem I do not have. But if we are going to do this, we need a way of assessing at various points where that intervention comes in. One of the classic ways for adults to be discovered on the Asperger’s spectrum is when they develop mental health problems: people who cannot cope with a normal environment.
Effectively, there are huge savings here for government. I thought all Governments were interested in savings, or should be. Let us face it, this Government will be more interested than most. That is not a position I particularly relish but it is the fact of the matter. If you get in reasonably early, you stand a better chance of being able to maintain the person throughout their education and working life. Indeed, there is a better chance of them being able to handle the bumps and bangs of relationships later on. Will my noble friend give us a rough guide as to what the level of intervention will be beyond that initial assessment at age two? If we just concentrate on autism, because other conditions will come in, exactly how much training will be required at the various stages of the education process? How much assessment is going on?
The National Autistic Society suggests that at least the SENCO in every school should have specific training in how to spot autism. Autism may not be the highest-occurring hidden condition, but it will certainly be there regularly throughout a teacher’s career. There should be better basic training so they are able to spot a condition and refer on—we do not want to create experts. They must also understand when they are given advice. Parliament is one of those places where occasionally, from a standing start, we are told, “Go and make yourself an expert”. Every person who has stood on their hind legs in this Palace has had that experience with something they had not come across. We all know that it takes time to get your head around a new problem or way of thinking. Unless that is instilled throughout the education and health services, with a basic level of understanding where one knows where to refer back to and where to refer on, you will not be able to do this. It would help if my noble friend could give us an idea of where we are on this and where we are going. This should not be a party political point or football. It should be a point of basic principle because unless you have just enough knowledge to be able to access and call in the help, you will miss this and do it late, causing secondary damage to that person’s life and costs to society.
Lord Hunt of Kings Heath
My Lords, I, too, thank the noble Lord, Lord Maginnis, for allowing us to have this important debate. He made some important points in his opening speech and I, too, should like to focus on early intervention. Both noble Lords made it clear that they regard it to be of importance. I agree.
I should also be interested in the Minister’s response to the point made by the noble Lord, Lord Addington, about the need for regular assessment after the initial early intervention. I was particularly taken with his remark that if you can have early intervention and regular assessment, your chances of helping people to have much better life outcomes is good not only for them, their families and loved ones but in terms of the likely demands on the state over the years. There must be a persuasive economic case for up-front investment. Perhaps the noble Baroness can respond to that.
As to the experience with health visitors in Northern Ireland and the comparison with England, it was extremely interesting to hear the ratios mentioned by the noble Lord, Lord Maginnis. I suppose that it raised a bit of prejudice about the funding that goes to Northern Ireland, but I shall desist from making further comments on that. Does the noble Baroness recognise those ratios because, on the face of it, your chances in Northern Ireland of having health visitor support is clearly much greater and more intense than in England? I do not know if the noble Lord knows the answer to this but, given the importance of speech and language therapy, I wonder if there is a similar issue about the number of those important professionals who can make a huge difference to people affected by this condition.
Lord Maginnis of Drumglass
I cannot help the noble Lord with figures, but we are certainly able to concentrate the demand for those interventions. They may relate to sensory issues, speech or all sorts of things. Those interventions can often be carried out in the home or school environment; they do not always require a medical practitioner—although, on occasions, they do.
Lord Hunt of Kings Heath
I am grateful to the noble Lord. One of the powerful points he is making is on the number of professions there are. It is also a question of organisation, and I should like to come back to that issue because I think he is suggesting that in Northern Ireland the stability of the organisation of health and social care enables a much more co-ordinated response to be given.
I want to come back to the English situation, which is worse than he stated because of the changes that are to take place from 1 April and are apposite to his comments. We have been given a very good research paper by the Library in anticipation of this debate. The briefing note refers to the report from Brian Lamb commissioned by the previous Government, the follow-on in this Government’s initiatives, and the identification in March 2011 of some of the problems—particularly of,
“parents having to battle to get the support their child needs … SEN statements not joining up education, health and care support … multiple layers of paperwork and bureaucracy”,
and,
“a confusing and adversarial assessment process”.
Clearly, it is very important that all these issues are tackled. We welcome the prospect of legislation and the publication of draft clauses, as well as the work done in Parliament to comment and reflect on those draft clauses.
I want to express some concerns, particularly in education. The Government have clearly identified gaps in services between different sectors, education, health and care support. My concern is with the demise of local education authorities as significant players in education in England. I remember when we debated the new Government’s first children Bill that there was particular concern about provision of SEN under the new structures. Does the Minister think—and how does she think—co-ordination of SEN in local authority areas is now happening with the reduction in authority of LEAs and the freedom of academies and free schools to plough their own furrow? I know that academies operate in accordance with the individual funding agreement and obligations are imposed on them, but it would help the Committee to know that the Government believe there is machinery at local level to ensure that there is proper co-ordination between schools, linking into the health service. I point out to the noble Baroness the recent Ofsted reports on the first tranche of free schools is not exactly encouraging about their performance. Could she help me in relation to whether Ofsted was able to comment on those schools’ responsibilities in relation to SEN?
It is clear, too, that the health service has much to do, and I fully accept that. Co-ordination between health, education and social care services is very important indeed. The noble Lord, Lord Maginnis, referred to the English situation as of now and to the 10 strategic health authorities and 190 or so primary care trusts. He referred to that as being a bit of a mess—but if we were coping only with the current structure. The fact is that from 1 April we are losing strategic health authorities and primary care trusts and replacing them with clinical commissioning groups, which are untried and untested. We are losing the essential leadership role of strategic health authorities, which are being replaced by local area offices of the NHS Commissioning Board. All the signs are that those local area offices neither want to nor have the capacity to give the kind of leadership that is required. So at the local level, within each local authority area, we have a worrying picture of, on the one hand, local education authorities losing a lot of the levers that they used to have, and, on the other, of a health service being broken up between lots of new and different organisations. It is very worrying in terms of the co-ordination required. Will the Minister reflect either now or in writing on how she thinks one can achieve a co-ordinated approach in relation to SEN, particularly in relation to the group that the noble Lord is mostly concerned with, in the new structures? That is the only way in which to get early intervention and the continuous assessments, which noble Lords believe should be produced.
Baroness Northover
My Lords, I am very grateful to the noble Lord, Lord Maginnis, for raising this issue and for introducing it so effectively. The noble Lord is right to emphasise the importance of this disorder, and he and my noble friend Lord Addington, as well as the noble Lord, Lord Hunt, are all absolutely right to stress the importance of picking it up early and supporting people from the earliest stages. As my noble friend Lord Addington points out, it is important to pick it up later and monitor the progress of a child.
I want to place special emphasis on the role that the new commissioning bodies will have in ensuring that children with special needs, including autism, receive the care that they need. I hope that I can reassure the noble Lord, Lord Hunt, in this regard. We know that there is a need to improve the early identification and assessment of special educational needs and thus remove the duplication and frustration which many families have encountered in securing an assessment. That is absolutely vital. We have already made progress in delivering the necessary improvements. For example, we have introduced an early years progress check for children at the age of two in order to pick up problems early and tackle them. Several noble Lords have mentioned this assessment. It is extremely important in terms of the early identification of autism. We recognise the importance of a key universal service for improving the health and well-being of all children through health and development reviews, immunisation programmes and so on. Between the age of two and two and a half, a child will have a full health and development review at which parents will have the opportunity to raise any concerns, ask questions, and prepare for the next stage of their child’s development. This can trigger the need for a formal SEN assessment which must include doctors, educational psychologists and paediatricians if that seems to be necessary.
Lord Maginnis of Drumglass
Before the Minister moves on, can she clarify one point? Is this a procedure whereby parents will be aware that they can shop, if I can put it like that, for this sort of support or is it something that every single two year-old will be given as a matter of course?
Baroness Northover
It is planned that every two year-old will have that kind of assessment. It is extremely important not only in terms of autism, but for picking up other problems.
The noble Lord, Lord Maginnis, asked about the availability of health visitors. To support the delivery of the Healthy Child programme, we are committed to expanding the number of health visitors—he is quite right about their importance—by a further 4,200 full-time equivalents by 2015 and to develop health visiting services in order to improve health outcomes and reduce inequalities.
We recognise the pressing need for a new system of commissioning special educational needs provision, so I hope that noble Lords will be pleased to hear that the Children and Families Bill will introduce this. The provisions of the Bill will build on the new approach to commissioning introduced by the Health and Social Care Act 2012. They will introduce an integrated approach to meeting the needs of children and young people with special educational needs, requiring CCGs and local authorities to make joint commissioning arrangements and focusing on a single, co-ordinated assessment involving a range of professionals. Moreover, these arrangements can include people up to the age of 25. It is extremely important that they should go beyond the transition points that others have found to be problematic. The assessment process will result in an individual education, health and care plan. I hope that noble Lords are pleased to hear about this because it will bring together the health and education sides. The process will be focused on improving outcomes for the child. The commissioners, working together, must agree their relevant contributions to delivering the plan, and they will have to work out who is going to be responsible for the different elements.
These plans will not be developed in isolation, of course. The boards and the CCGs will co-operate with relevant local authorities and participate in their health and well-being boards. Each board will provide a forum for the effective assessment of local need, and special educational needs will be part of that so as to ensure the translation of those commissioning plans and arrangements into something that is effective. Health and well-being boards will undertake a joint strategic needs assessment and a joint health and well-being strategy for the local authority area. The CCG will draw on this in developing its annual commissioning plans. Moreover, health and well-being boards will help to ensure the accountability of CCGs by giving their opinion on the extent to which the commissioning plans take account of the local strategy and how the CCG has contributed to its delivery. Noble Lords need to bear in mind that special educational needs are in there, and they have to assess what is being provided against that.
The new arrangements will be introduced in 2014, depending on the passage of the Bill, but a number of pathfinder local authorities are working with local children and their families in piloting new approaches. As the noble Lord, Lord Hunt, will be aware, the mandate for the NHS for the next two years has indicated the particular need for improvement, working in partnership across different services in supporting children and young people with special educational needs and disabilities. In particular, it gives the NHS Commissioning Board the objective of ensuring that children have access to the services identified in the agreed care plan. I hope that that will reassure the noble Lords, Lord Maginnis and Lord Hunt.
We are also amending the Children and Families Bill to place a duty on CCGs to secure the necessary health services in an education, health and care plan. This is a significant step, and highlights how much importance we attach to ensuring that the NHS delivers the right service for children with special educational needs.
We want to ensure that CCGs and local authorities, as commissioners, and the health and care professionals who provide assessments and diagnoses are supported, particularly in relation to their education and training. The noble Lord, Lord Maginnis, is absolutely right to stress the need to link up health and education.
For the past two years, the Department for Education has been funding the Autism Education Trust to develop tiered training materials for schools, as well as national standards for provision for children with autism and a competency framework for those who work with children with autism. These are relevant points for the noble Lord, Lord Maginnis, and my noble friend Lord Addington.
The new qualified teacher standards came into effect in September 2012. These have sharpened the focus on meeting the needs of children with SEN and disabilities. The Government have also strengthened initial teacher training and continuing professional development provision through the publication of additional online training materials for teachers of pupils with the most common and complex special educational needs, including autism.
We have also highlighted the importance of having good quality data that measure the outcomes which are most important to children and young people and their families. The work of the Children and Young People’s Health Outcomes Forum has informed actions across the health and care sectors to identify the best indicators of outcomes for this group, particularly in relation to the time taken from first presentation to diagnosis. The noble Lord, Lord Maginnis, highlighted this as being a problem, particularly in the past, which we certainly do not want to have repeated; we want to address that. One element of this is ensuring the effectiveness of transition at different life stages, particularly from children’s to adults’ services.
The recent University of York report into transitions for young people with autism highlighted that we need to do much more to support young people in planning for leaving school, gaining employment and living independently, while maintaining good health. The NHS Outcomes Framework for 2013-14 includes the forum’s proposal that all data should be presented in five-year bands up to the age of 25 to enable the effective monitoring of that transition. That is quite a significant change. Here, too, I want to reassure my noble friend Lord Addington in relation to those children whose need for support does not become apparent until they are well established in school. The Government’s approach is to strengthen awareness in schools through staff training; for example, extended placements in special schools for trainee teachers. We want to ensure that needs are detected as early as possible, but I emphasise that at any point the school can request an assessment by the local authority. The education, health and care plan approach provides a basis for taking an all-round view of the children’s needs across different sectors. Of course, schools are providing additional support for many children through teaching assistants.
Lord Addington
My Lords, teaching assistants have rather a patchy record when it comes to implementing the current statementing system. For instance, there is a nasty tendency for them to become a babysitter for a child who is having trouble within the class. I suggest the Government should look at this because it is something that has been going on for years. Unless you get that person trained to at least implement the strategy across all disabilities, it will not deliver the required outcome but may simply keep the child out of the way of the teacher.
Baroness Northover
The teaching assistant may be assisting with other children while the main teacher focuses on those with particular needs. My noble friend is absolutely right that it is extremely important that the right and appropriate support is given according to what a child needs, which is why those plans I mentioned are so important.
Partnership working will be the key to making a difference. We want to work closely with partner organisations, such as the Council for Disabled Children and the National Autistic Society. However, the most significant partners, if you can call them such, will be the patients and their families. The joint arrangements for assessment will be built around the individual; it is a bespoke plan tailored to the needs of the individual and agreed with them and their family.
I am afraid I am running out of time and I will write on any points that I have not picked up. I want to emphasise, however, that clinical commissioning is built upon patient involvement particularly for this group, whose needs have not always been well met in the past. This will perhaps be the most important factor in ensuring they get the care and support that makes the difference to them.
Police: Performance Indicator Management
(11 years, 1 month ago)
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The Earl of Lytton
To ask Her Majesty’s Government what is their assessment of the response of United Kingdom police forces to performance indicator management with particular reference to the reliability of published United Kingdom crime figures.
The Earl of Lytton
My Lords, I am very grateful for the opportunity to debate this issue and to those noble Lords who have added their names to speak. My interest in policing is a parliamentary one; the police interest in me, I hope, is no more than my firearms and shotgun licences. However, were it not for the work of the late Lord Corbett of Castle Vale, to whom I pay tribute, I doubt if I would be speaking on this subject today.
We have heard a great deal about the police recently but I would not wish to appear anti-police. I am certain that the vast majority of serving officers are diligent and honest. Rather, my Question is about the organisational environment in which they operate. Many corporations use performance management but the public service often lacks suitable external benchmarks. Dr Barry Loveday, professor of criminal studies at the University of Portsmouth, in a 2008 article in Policing magazine, described performance management as,
“commitment not to an organisational vision but to conformity in both running and delivering services … The primary emphasis here is directed to the effective management of targets rather than on qualities of leadership”.
He goes on to say,
“‘Gaming’ techniques now characterise the operation of most public service managers … the primary purpose is not … to demonstrate leadership … but to ensure conformity to the target culture by ‘managing’ such data in order to reach targets set”.
However, it is also the collectivisation of risk, anonymity, abrogation of individual responsibility and denial of leadership. The police are not alone; large parts of the public sector, especially in areas of health and education, are affected. Under the Police Reform Act 2002, the Secretary of State sets National Policing Plan objectives and priorities but there is no benchmark equivalent to the hospital standardised mortality ratio.
“Gaming” is academic speak for numerical, definitional or behavioural means of presenting figures to suit outcomes and its use in police recording of crime is the specialist research subject of Dr Rodger Patrick, a former detective chief inspector in the West Midlands force. I have seen his doctoral thesis, his evidence to parliamentary committees, noted the coherence of his analysis and the absence of contradiction by others. His referees testified to his credibility. I therefore invited him to address interested Peers last month and have placed in the Library my note of his talk with its links to further information.
He identified four categories of “Gaming”. There is “cuffing”, so called after the magician’s act of making things disappear up the sleeve; in other words, making crime figures disappear altogether by, for instance, not recording some types at all. In “nodding” figures are enhanced, notably by getting offenders to admit by a nod to other offences to be taken into consideration, or TICs. “Stitching” is coercing suspects to confess to guilt under threats or perhaps promises of more lenient treatment. “Skewing” involves applying resources solely to whatever targets are being measured to the exclusion of others; it is the principle of “what does not get measured does not matter”.
Such issues were brought to the attention of HM Inspector of Constabulary as long ago as 1998, but little if anything has altered since. In its 1999 report, HMIC repeats the police viewpoint that:
“Any bending of the rules is ... seen as ... not being for personal gain but to protect society, and therefore not at the worst end of corruption”.
It rejected this justification but recognised the problem.
Dr Patrick has attempted to quantify the effects of gaming. His conclusion that it is an endemic organisational phenomenon rather than the activities of a few officers makes for uncomfortable reading. The Office for National Statistics thought that cuffing alone might cause a 16% underrecording of crime; Dr Patrick considers that it is likely to be far higher. The truth is that we do not know and the change from an evidential to a prima facie basis of crime recording further confuses the issue.
Unsurprisingly, last January’s ONS national crime survey was received with disbelief by criminologists and it was subsequently admitted that the recorded figures might be defective. But the ONS relies on police figures and the appearance of a decline in crime fits the purposes of many others. Did Her Majesty’s Inspectorate of Constabulary advise Home Office officials about the extent of a problem going back many years? If so, why has so little changed? Can we be sure that the figures form an adequate basis for analysis? If they are not founded on fact, truth and logic, how can Ministers and Parliament rely on them? Furthermore, what is the role of Home Office officials and statisticians in the oversight of police recorded crime, given the ONS admission? Is it true that cross-checks on police recording, formerly part of the British Crime Survey process, have been discontinued, and if so, why? If the figures are in doubt, what else may be in question?
The list of high profile cases reads like a roll call: Hillsborough; North Wales care homes; the Bradford sex trade; the theft of child identities; the retention of body parts without consent and falsification of evidence; the sale of confidential information to the media; and the cases of Michael Atherton, Andrew Mitchell, Jimmy Savile and Lynette White. All identify procedural, evidential and investigative failure and have attracted public criticism. In the Daily Telegraph of 22 December last year, Andrew Gilligan pointed to seven police forces where sackings, forced resignations, suspensions and criminal investigations of chief constables had occurred, with almost as many more deputies and assistants under a cloud. He put the level of “infection”, if I can call it that, at 20% of police forces. I am hoping that other Lords will pick up on the issue of informal cautions, local criminal records and non-sanction detections. I would simply ask Her Majesty’s Government: what data do police hold on people and what independent oversight exists? Have things improved since 2007 when the matter was raised with the Information Commissioner?
Even if the position has been exaggerated, it adds up to a very disturbing picture with significant implications for the taxpayer, national policy, the maintenance of law and order and, last but not least, public confidence. On regulation and oversight, I note that the Home Affairs Select Committee recently described the Independent Police Complaints Commission as,
“woefully underequipped and hamstrung in achieving its original objectives. It has neither the powers nor the resources that it needs to get to the truth when the integrity of the police is in doubt”.
While the Home Secretary moved with what I can only describe as commendable speed to strengthen the commission, I must question whether she went far enough to address all the issues.
As to HMIC, its report of a review into allegations about intelligence concerning the Jimmy Savile case highlighted failings in the quality of investigations and sharing of information. However, it has repeatedly expressed concerns on similar matters since the late 1990s. What is this? Is it a resource issue? In July 2011, it was asked to review police integrity. Can the Minister tell us where that review has got to? I believe it is too early to expect the police and crime commissioners to have taken significant action, but I hope they will be reading this debate carefully and that these matters do indeed lie within their remit. We learnt only last week of some close relationships between health service employees and allied business and procurement services that might be a conflict of interest. Are the Government satisfied that this is not also a factor in the police?
I now refer to the Association of Chief Police Officers. It is more than just the senior policeman’s trade association and, until recently anyway, has been in receipt of substantial public funding. It makes strategic policing decisions, guides policy and issues procedural guidance. It is immensely influential on police force co-ordination and in international crime. In some respects its work is akin to that of a government agency and its relationship with government should be open. Even now, as its direct funding is reduced, I learn that it is asking police forces for a large increase in its subscriptions. But this is still taxpayers’ money and requires full accountability.
I am led to believe that fees for security checks and the like end up in an ACPO unit or subsidiary, that there are several operating under its umbrella and that significant sums of money are involved. I am also told of persistent resistance to Freedom of Information Act requests. It is time for full disclosure of ACPO’s affairs, its companies, subsidiaries, directorships, accounts and activities—everything that either involves taxpayers’ money or is as a result of a public or quasi-public activity. Can I have the Minister’s assurance that this will be done?
I do not have a problem with commercial activities offsetting costs to the public purse but I take issue with the involuntary merchandising of personal information other than in the clearest overriding public interest. I take exception when the process lacks transparency.
The Earl of Lytton
My Lords, continuing where I left off, I was talking about the commercial activities and how I took some exception to the fact that the process lacks transparency and oversight. I also point to the secretive nature of some of these activities, which suggests something to hide.
Many other issues have come to my attention, including: tow-away, vehicle recovery and storage contracts; insurance industry concerns; and a degree of partiality, particularly as evidenced in the BBC programme “You’ve Been Trumped”, where police simply failed to protect residents from the most serious bullying and harassment by golf course developers.
If the Home Secretary’s statement on police integrity was intended to draw a line in the sand, I hope that the Government realise that nobody is fooled and there is very much more to be done. If the police are not straight with us on the crime figures, how on earth do we know what is going on? Secrecy has no benign purpose here. We need transparency, good professional practice as the norm, compete legality and accurate recording as a basis for policy decisions, and we need it now.
Lord Whitty
My Lords, I will make one or two of the same points as the noble Earl, Lord Lytton. Unlike some other Members who are going to speak today, I do not have great experience or expertise in this field. With one or two exceptions, my relationship with the police has been generally okay. I am merely a concerned citizen here, in that I really want to know what is happening to crime in this country. Politically, both this and the previous Government congratulated themselves on a falling level of crime. I did not seriously query this claim until recently.
Of course, government and police claims of crime reduction have always been treated with a degree of cynicism by the general public. Public perception of crime rates in all neighbourhoods tends to exaggerate the degree of actual crime. Of course, there are horrendous crimes, which receive massive publicity. Although harrowing to those immediately concerned, as I know, these are probably not typical. There is a general public perception that the level of particularly low-level crime is higher than the police and the Government claim.
Sometimes the police go over the top. I am told that the South Wales Police notepaper says that crime is the lowest for the past 30 years. I doubt that anybody in south Wales actually believes that—nor would people in Dorset or the City of Westminster. There is a credibility issue underlying this, and some of it has a good statistical basis because of the way in which the police record crime as against, for example, the crime survey and the way that victims see their complaints. So there are some rational explanations for it.
However, I was quite alarmed to see that the ONS itself was seriously querying the degree of crime reduction. That is probably where I am. I probably logically accept, despite the psychology of it, that there has been some reduction, but it is the degree. There was quite a significant difference between the police figures and the other figures to which the ONS referred. The ONS gave a number of quite good reasons for this but at the same time I became aware of the work of Dr Rodger Patrick, to whom the noble Earl, Lord Lytton, has already referred.
According to Dr Patrick’s analysis, some crimes are no longer recorded on the basis of reporting by victims or the public but on the evidential assessment of police officers and on the balance of probability. That was always the case with third party reporting but used not to be the case where victims themselves reported. Other cases are lumped together and given the same crime number to appear only once in the statistics. Minor crimes can go unreported altogether: some are on a local crime data list; some are subject to informal caution and are cleared, one way or another, and do not get into the national statistics.
Meanwhile, on the detection side, issues such as “take into consideration cases”, to which the noble Earl, Lord Lytton, referred, are sometimes lumped together as solved or cleared as a result of a deal with a defendant or prisoner, without real conviction and due process. I have read parts of Dr Patrick’s analysis, and I have no way in which to assess the validity of all this or how widespread it is. But it is also true—and this is in the title of the debate—that with some crimes under the last Government there was a drastic fall, following the introduction of targets and performance management criteria. That might mean different things: it might suggest that the target culture was instantly incredibly successful in increasing overall efficiency against targets; it might suggest that the priorities and resources were, as in other public services, concentrated on those areas that were measured and defined as targets while other areas were left underresourced; or it might mean—and this is something that we regrettably know about in bits of the NHS—that figures were reclassified or manipulated to exaggerate performance improvement.
What we need to know from the Minister tonight is two-fold. Does he recognise the figures on descriptions of malpractices in individual police forces to which the noble Earl referred? What arrangements for quality control and challenge of statistics coming from individual police forces are there in England and Wales? Secondly, I recognise that the Home Office and the ONS give guidance to the police on how to record crime, but who checks the compliance? Is it the police authority, the new police commissioners or the Inspectorate of Constabulary? What is the role of the Police Support Unit—or is it the ACPO high command, or the Home Office itself? How does it work and, in particular, how far is it guided, checked and quality controlled by non-police bodies, or is the guidance and advice from ACPO to chief officers dominant? Like the noble Earl, I have some concerns about the role of ACPO in this area.
There are also reports that those who query the current system, whether from within the police force, from community bodies or even from the Home Office, suffer repercussions—they have been victimised or moved to other duties. Is the Minister aware of such allegations, and what would he instruct the Home Office to do about such allegations? I have to phrase this in the form of questions, partly because of the difficulty of proof and partly, frankly, because of the litigiousness of some of those who defend their position. But these are questions that the Ministers in the Home Office and, perhaps, the Ministry of Justice, need to ask.
The present Secretary of State has made two key decisions in relation to crime statistics and performance. First, she transferred responsibility for oversight and reporting of crime statistics after 2011 from the Home Office to the ONS. That is a very sensible move, which will probably pay off in the long run. However, the ONS analysis is only as good as the statistics that come in. Unless we can improve the accuracy and integrity of all sources of information and eliminate natural bias and contrived distortions, the ONS and Ministers will still be working on flawed systems of statistical records, and hence a flawed evidence base. Secondly, the Home Secretary determined that the police service should move away from target-based performance indicators and, in the light of experience, we would probably think that was the right move as well. But local commissioners will still need authentic, undistorted statistics on which to make their decisions. If not, we are going to end up in the worst of possible worlds, where there are no performance targets, but the police go on recording the same statistics in the same way.
It is time that we had a proper analysis of this—the review by the ONS goes just so far. But as the noble Earl said, unless we are confident in the statistics that we receive, bad statistics will distort the basis for operational decisions by chief officers and strategic decisions by police commissioners and distort the very basis on which Home Office Ministers and officials make national policy in England and Wales. We need a new, expert review, probably judge-led, without an axe to grind, distinct and separate from the police force itself, and we need it soon.
Earl Attlee
Can the noble Lord conclude his remarks very soon, because he is completely out of time?
Lord Whitty
If I am completely out of time, I shall just say that a push for such an outcome needs to start from the proceedings here today.
Baroness Harris of Richmond
My Lords, I thank the noble Earl, Lord Lytton, for bringing forward this important debate this afternoon. Before I begin, I remind your Lordships of my former interests in policing matters. I have been involved in policing for over 30 years and a member of my police authority for 20 years, chairing it for eight of those. I was a deputy chair of the Association of Police Authorities, a member of the Police Negotiating Board and the Service Authority for the National Crime Squad and I sit on the Independent Police Commission. Of course, I speak here in a personal capacity only.
The Home Office ostensibly set only one policing target when the current Government came into power: to cut crime. The previous Government did much the same: to improve confidence in policing. Yet under both these seemingly simple and unbureaucratic targets lay a plethora of indicators, with more targets, measures, priorities and the like. Police authorities were bewildered by their complexity but had to comply with them through their policing plans for their local communities.
Then, about a year ago, the Home Office handed all responsibility for analysing crime statistics to the office of the National Statistician, the ONS. The idea was to make the collection and analysis of data more transparent and at a stroke reduce public scepticism about crime statistics. We must not kid ourselves that the Home Office does not continue to collect large amounts of performance and crime data. It needs to, to inform the collation of performance statistics nationally. Some of these data are used to support the crime mapping tool on www.police.uk that enables local people to check crime in their area. That is a very good thing. The data inform the national performance monitoring functions of Her Majesty’s Inspectorate of Constabulary—HMIC. There is also the Crime Survey for England and Wales—formerly the British Crime Survey—which is carried out independently.
Historically—certainly during my years working in the policing environment—there have always been problems with the way in which crimes are recorded in different forces. The former Audit Commission and more recently HMIC noted significant variations in practice and an unacceptable level of mistakes, as we have heard. Commenting on the analysis of variation in crime trends published by the ONS in January this year, the Association of Chief Police Officers—ACPO—recognised possible reasons why the variations existed. It cited,
“potential over-zealous recording practices in the early years of the national standard in crime recording being introduced as well as the move to neighbourhood policing teams resulting in more low-level crimes being dealt with informally and outside the formal crime recording system”.
Be that as it may, the general public need to be assured that crime figures accurately reflect what they see happening on the ground. It would appear that there is a great deal more work to be done to convince people that the police are performing at a consistently high professional level. In some parts of the country, that clearly is not happening. We know from the many recent press reports that concerns are being widely expressed about significant underreporting of crimes such as rape and violence against women, about 101 calls not being answered in a timely and professional fashion and about complaints about police corruption not resulting in any prosecutions, et cetera.
The flurry of media reports of bad policing up and down the country—more in the past two years than I can ever remember during the whole of my time on a police authority—truly grieves me. It is shocking to read of the bad behaviour of some police officers, possible corrupt practices and abuse of the very special powers of a constable. These people have no place in today’s police service and should be rooted out quickly so that the vast majority of utterly professional and dedicated police officers—who, incidentally, deplore this behaviour but seem powerless to stop it—can do the job that they are asked to.
Which forces are using these methods and what will the Government do to get to the heart of these allegations? Will the Government conduct an assessment of the policing and crime plans due to be published imminently to see whether there are any patterns, commonalities or significant areas of difference emerging, especially in those forces where problems may have arisen? Can the Minister say what has been done to encourage other government departments to promote the duty to co-operate with the police and crime commissioners among partner organisations? My feeling is that they will need to be able to develop a coherent range of cross-sector services, matched to the needs of their local communities. It should also help working with other agencies to try to answer some of the concerns that have been expressed here this afternoon.
If it is a matter of culture change—how often have I heard that expression over my years in policing?—the College of Policing must begin to address this as a matter of critical importance. Will the Minister ensure that, where actions need to be taken in regard to forces within which rogue officers are found, they are undertaken as a matter of urgency, and will he seek the help of HMIC to consider undertaking thematic inspections of those forces where these problems appear to be arising?
Lord Maginnis of Drumglass
My Lords, I am grateful to the noble Earl for raising an issue that, however one dresses it up, amounts to a system that encourages carelessness, misrepresentation and possibly even corruption among today’s police service. I come here with more than 50 years of policing experience. I first donned a police uniform when I left college in 1958 and I served until 1965. Then, as a commissioned Army officer from 1970 for almost 12 years I liaised daily with the RUC and, when I came to Parliament, I acted as its parliamentary adviser. My natural instinct is pro-police.
I spoke during the previous debate about how arm’s length government has now become, and how remote and ineffective are the multiple layers of delegated accountability so that most of us no longer believe that the Home Office is in control. Certainly the elected commissioner aberration, rather than representing better management, is but another waste of resources, as the electorate have made very clear.
I want to give a practical example of how command responsibility has been eroded to a point where accountability has become little more than a paper exercise and, bluntly, of how this is leading to carelessness, mistakes and, ultimately, corruption. I am not even talking about a Hillsborough or a Savile. I want to talk about a conman called Mark Heslehurst, who has been able to use the Cleveland Police for nigh on a year in order to persecute a local councillor, Councillor Joan McTigue, because she, although initially sympathetic to his story that his son has been abducted to Cambodia, eventually saw through his intrigue and challenged his attempts to extract money from a sympathetic community.
Quite independently of Councillor McTigue, I met Heslehurst, made a few simple inquiries and came to a similar conclusion. I do not have time today to go into his cover story in detail. My complaint is that Cleveland Police have, on behalf of Heslehurst, exclusively concentrated their inquiries to the point of harassing a local councillor, a lady who worked in education and is now semi-retired. Yet Heslehurst, using various aliases—for example, Ian Blagg, who by coincidence tweets with exactly the same grammatical and punctuation errors as Heslehurst—is allowed free rein to publish outrageous claims against this lady and against me.
Community compassion has enabled Heslehurst to travel to the United States and to stand for the Middlesbrough parliamentary seat after the death of our late friend, Stuart Bell, an individual who, like Councillor McTigue and me, was badmouthed by Heslehurst because he was too astute to fall for this conman. Enough about Heslehurst—I am running out of time, but I can provide the Minister with literally reams of evidential material.
What I must ask is why Cleveland’s Sergeant Copley seems to concentrate only on the actions of Councillor McTigue, to the extent that he has seized and held this lady’s computer for the past four months, but has found no reason to do likewise with Heslehurst’s, despite the fact that she and I are blackguarded on an almost daily basis. When I spoke about this to Inspector Wrintmore, he told me that the matter was awaiting a decision from the north-east Crown Prosecutor’s office and that it had asked for more information. However, that is not true. Let me read from two letters that I received from the CPS. On 19 February the deputy CCP wrote to me saying:
“I confirm that the CPS has now given the police early investigative advice … I appreciate your concern regarding the impact of the case on Cllr McTigue … the matter now rests with Cleveland Police”.
Just a few days ago, on 14 March, he wrote again, saying:
“As the only offences under consideration are triable in the magistrates’ courts, the decision as to whether someone should be charged falls to the police”.
After months of aggravation, this was very useful in terms of police statistics but of absolutely no public benefit.
If I had time, I could tell a similar story about an 83 year-old lady in the North Yorkshire Police area, where police have conspired to ensure that she is kept out of her home and where those who have tried to help her, particularly a Tim Hicks, have been threatened with arrest, only to find out when he came on an errand from Luxembourg to face that charge that it was merely an intimidating bluff.
In conclusion, I had similar personal experiences with the Met and the PSNI when I was threatened with arrest due to totally unsubstantiated complaints of assault. Do I look like I would assault anyone? I shall leave that. Once in a Committee Room here, it was alleged that I assaulted someone and that there were more than 45 witnesses, but not one turned up. It also happened once after I gently reprimanded a road hog. That is two more non-offences solved. I rest my case.
Lord Condon
My Lords, I am not sure how I follow that, but I will do my best.
I thank the noble Earl, Lord Lytton, for raising this important issue and I am sure that he will not be surprised if I do not buy entirely into his rather pejorative view of modern policing. Even though I am 13 years into retirement, I still believe passionately that the vast majority of police officers are honest, decent people doing a very good job. I declare my registered interest in policing and as a former police commissioner.
Performance management is vital in the public and private sectors, both of which I have worked in for the past 40 years. Performance management drives improvement, can provide transparency and comparability, and ultimately assists accountability. However, I agree with others that for too long reported crime figures have been overrelied upon as the most important police performance measure, despite their fragility as a true reflection of crime levels and their vulnerability to manipulation and massaging by rogue police officers. Others have spoken about that.
Many years ago, as a young and new Chief Constable of Kent Police, I tried to broaden the basket of police performance measures beyond the traditional crime figures. After wide consultation with the public in Kent, three additional measures were regularly published by my force: first, on the police response to emergency calls; secondly, on visible and reassuring police presence and availability on the streets; and, thirdly, on overall public satisfaction with Kent Police. That force became the first and only police service to be awarded a Citizen’s Charter for its overall service to the public, and I think that that was partly because we did not overrely on crime statistics.
Reported crime in recent years, however, has fallen throughout the developed world. Despite wide variations in police resources, methods and accountability, there has been a relentless fall in reported crime in all the major developed countries. Why has crime fallen? Policy, police and government issues have clearly helped, but I firmly believe that the main reason is the significant advances in technology and product development that have dramatically changed the volume and patterns of theft. For example, new cars are now very difficult, if not almost impossible, to steal. Pin numbers and other anti-theft characteristics have dramatically reduced the motivation to steal electronic goods. If you cannot use or sell an item you have stolen, what is the point of stealing it? The volume crime of theft has dropped dramatically throughout the developed world.
Similarly, and even slightly frivolously, there is scientific speculation that the removal of tetraethyl lead from petrol and the consequential reduction of harmful pollution to babies has led 20 years later to reductions in violent crime levels in developed countries such as the United States, the United Kingdom, Canada, Australia, New Zealand, France and West Germany. There are very strong correlations between improvements by not using lead in petrol and dramatic reductions in violent crime.
Moving on to police manipulation, the perhaps understandable but flawed overreliance on crime figures has also led to the manipulation and massaging of crime figures by some rogue police officers. During my first few weeks as Chief Constable of Kent, I had to deal with a major discipline case involving Kent detectives who had been visiting convicted burglars in prison. Through various inducements such as taking them out for the day, letting them meet their girlfriends and extra cigarettes, the detectives got them to admit to crimes they had not committed, thus fraudulently improving the Kent crime detection figures.
There is an overreliance on crime figures with not enough being done to prevent fraudulent behaviour. What should be done to improve the situation? I think that the Government have already taken some important steps, including the transfer of responsibility for the independent reporting of national crime statistics to the Office for National Statistics. That is vitally important. Improvements have been announced to the British Crime Survey. Transparency through making changes to the collection of crime statistics is, as I say, very important. I also welcome the statement by the Minister for Policing and Criminal Justice earlier this month about changes to police recording practices and how crime will be recorded. Some of those changes will come into effect from April of this year, with others to follow in April next year.
In conclusion, it is vitally important for all stakeholders in this arena to acknowledge the strengths, limitations and frailties of recorded crime statistics. Crime figures must not be the only significant proxy for police efficiency. Of course good policing and intelligence-led policing help to reduce crime, while equally, bad policing and confused priorities allow crime to flourish. However, reported crime is only a part, albeit a vital part, of measuring police performance. It does, has not, and will never provide the full picture. ACPO, the inspectorate, the Home Office and now the new police and crime commissioners must accept the limitations of crime figures, and they must give clear and unambiguous signals that only the highest ethical standards are acceptable in recording crime and detection figures. They must be ruthless in dealing with malpractice by rogue police officers, whatever the motivation for corrupting crime figures. It is wrong, however they try to justify it, such as by using the euphemism of “noble cause corruption”. These abuses must be exposed and dealt with.
I am confident that the Minister will be able to reaffirm the Government’s commitment to improving standards in this area and that, with the support of the police service, further improvements will be made. This is a vital area which impacts on public confidence in policing.
Lord Laird
My Lords, I, too, thank the noble Earl, Lord Lytton, for securing today’s debate. It is a good opportunity to express some opinions that a lot of us feel strongly about.
I have become increasingly worried about the build-up of resentment over actual or perceived corruption among police forces the length of this country. Corruption, where it exists, affects only a tiny part of the police service. Thankfully, this point has already been made. The majority of police are honest and decent, and it is for that majority that I would like to know from the Minister if he will set up a whistleblowing scheme for officers, preferably independent from the police service.
I have been made aware that some South Wales Police officers have contacted non-Welsh Members in the other place with their concerns over the improper actions of supervising officers or undue pressure to undertake actions that conflict with their oath to Her Majesty the Queen or their professional judgment. These actions have done much to damage the image of the police.
I am told that the police nationally now adopt a process of informal cautions. This apparently allows them to hold a database of information as a local criminal record. Does this enable them to circumvent the DNA issue and to hold such material indefinitely? Such local data are not accessible via the police national computer and do not necessarily show up on a standard Criminal Records Bureau check or on enhanced disclosure or subject access requests. Persons entered on these databases usually have no idea what is logged or why, and cannot challenge the accuracy of something that could easily affect their personal finances, employment or later be dragged up in court proceedings or other activities.
This practice has apparently been going on since 1997 and was raised in correspondence in early 2007 between Ken Jones, ACPO’s president, and Richard Thomas, the Information Commissioner. I gather that even a fixed penalty notice or a police warning letter is sufficient to trigger a “non-sanction detection” and resultant entry on a computer. Needless to say, the Information Commissioner was most concerned and I would like to know if this issue has been addressed. Does the Home Office know how many such databases are operated by police forces or associates, what they are used for and how they are authorised, and will it ensure from today that all data are disclosed to those whose names are so held? Further, is it going to regulate the activity and insist on a formal register?
I now turn to south Wales and a matter that I last raised on 15 May 2012 in a debate on the Queen’s Speech. It would appear that little attention was paid by the Home Office to my comments, nor did it take steps to use the powers it already has or, if necessary, to seek new regulations. South Wales, its police force and the independence and governance of its commissioner concern me. It seems that the chief constable, Peter Vaughan, was part of the selection panel for the deputy and assistant commissioners, the deputy being a political appointment. I do not feel comfortable with this, or with the appointment of his former ACC, David Francis, as assistant commissioner. Surely this process should have been free of cronyism? I thought that the idea was to introduce independence and new ideas.
What I previously called systemic corruption by a small number of that force’s officers seems to have been endemic in the area for many decades, and now appears to have been compounded. I wrote to Assistant Chief Constable Matt Jukes on 17 July 2012 and in that letter I included a number of FOI requests, which he neither answered nor acknowledged receipt of in his reply of 10 September 2012. I therefore submitted a complaint to the Information Commissioner for him to pursue answers in full. The answers to the FOI requests appear to have been blocked by the sector inspector for east Cardiff, Inspector Nicky Flower, whose actions and management they concern.
An appalling case happened in south Wales that was very similar to the type of case that the noble Lord, Lord Condon, was referring to in Kent. A young person was taken out of the prison in Bridgend and treated in the sort of way mentioned by the noble Lord, Lord Condon, except that he was plied with four cans of cider and then asked to agree to a considerable number of “taken into consideration” dwelling burglaries that he had not committed. Unfortunately for the police officers doing the questioning, the young chap was actually in police custody on the days concerned. The two detectives received written warnings only as a result of the IPCC investigation; the chief constable would have exposed himself if he had committed the officers to trial. Why am I not surprised? How long do we have to wait for a criminal judge or judges to be appointed by the Home Office to carry out a root-and-branch investigation of that force?
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, I begin by thanking the noble Earl, Lord Lytton, for tabling this Question.
Lord Taylor of Holbeach
My Lords, I began my few words before the Division by thanking the noble Earl, Lord Lytton, for tabling this debate. It has proved to be really interesting, quite hard-hitting and in many ways quite outspoken, but not any the worse for that. It is good that we have been able to air these issues in such a frank way. It says a lot for this House that we can do so. I hope I will be able to reassure noble Lords that what is on the agenda at the Home Office is what all noble Lords have indicated as being the direction of travel that they believe policing in this country must go in.
A lot of points have been raised. I doubt that I will cover everything but I will write a general commentary on the debate and circulate it to all Peers who have spoken so that everybody can see the responses to those matters to which I do not know the answer or have not had time to provide an answer.
I start from the position of being very proud of our police officers. Every day they put themselves in harm’s way to protect the public. Thanks to their hard work and the reforms that the Government have brought forward in the police service, the police are succeeding in their core mission to cut crime. I do not think there is any dispute about that achievement. They are also coping with a difficult financial situation. All public services—and, indeed, business as a whole—are having to cope with the economic situation and the need for deficit reduction.
Before going into the detail, it might help to place the importance of the integrity of crime recording within a wider context. As noble Lords know, this Government have undertaken a radical programme of police reforms that have placed local crime concerns and priorities at the very heart of policing. Our reforms have put an end to Whitehall interference and bureaucratic accountability and introduced a new era of democratic accountability based on locality. We have scrapped national targets. I think most noble Lords recognise that that has probably been a great stimulus to adopting a more local focus and a more straightforward approach to these issues. We want the police to respond to local concerns. We have given the public better information about crime in their area and we have changed how forces are held to account. As noble Lords will know, the website means that people are now aware of crimes in their community.
In order to empower communities to hold their local forces to account, we must strive for greater transparency. The public must have a clear and accurate picture of the issues that affect their community and what is being done about them. The noble Lord, Lord Condon, with his professional experience in this area, made a very thoughtful speech. I reassure him that we have already announced that we are replacing detections with a wider framework of outcomes, because outcomes matter, removing the incentives to manipulate those figures to meet locally maintained targets.
I say to the noble Baroness, Lady Smith, that informal disposals are included in the crime figures. The crime maps, to which I have already referred, enable people to compare their area with other areas. I think all noble Lords are aware what a great hit this has been. Crime data have never been more transparent to the public. People can see where crimes have been committed, not only in the area in which they live but in the areas in which they shop and work. Therefore, the integrity of crime recording and the overall integrity of the police service are interlinked, particularly in the eyes of the public. Recording crime properly is essential to maintaining public trust in policing and ensuring that victims of crime get the best possible service.
This Government take crime recording very seriously and we are committed to improving transparency and building public trust in the figures. That is why we transferred the publication of crime statistics to the independent Office for National Statistics. The Government also agreed to the establishment of an independent advisory committee to scrutinise the statistics and advise Her Majesty’s Inspectorate of Constabulary on issues that need further examination. The new committee will examine the statistics and advise on areas that HMIC should be auditing. That is a new development, which will put increasing pressure on accuracy. As the noble Baroness, Lady Smith, knows, the ONS is independent of government and has an independent role in informing government and the electorate of the accuracy of figures.
The HMIC review of crime recording found that the majority of forces perform to a reasonable standard, and the ONS has recognised that the quality of crime recording by the police remains among the best in the world. The noble Lord, Lord Whitty, was anxious about the figures that we have talked about with regard to a fall in crime, and the noble Earl, Lord Lytton, was also concerned that we made sure that the figures were accurate. Crime is down according to both measures that we use; according to the Crime Survey for England and Wales, it is down by 8%, while police-recorded crime is down by 7%; the Office for National Statistics, too, has recognised that crime is falling. UK crime recording is recognised, in an international context, as being among the best in the world, as I have said.
Every police officer has a duty to record crime accurately, which is made clear in the guidance and regulations that cover their conduct. Police officers are required to report colleagues whose behaviour breaches the standards of professional behaviour. I reassure my noble friend Lady Harris of Richmond that when crimes recorded by the police do not reflect local crime experiences, we expect the police and crime commissioners to hold their forces to account on those issues. We continue to work with HMIC to improve the quality of crime recording and build public trust in national crime statistics.
Every organisation has bad apples, and the police are no different. Noble Lords have cited some examples today. But it is important to remember that the vast majority of police officers serve and protect the public with honour, bravery and integrity. Noble Lords have mentioned a few specific cases, such as those in south Wales and Kent. These are all historic examples of where those concerned have been dealt with and lessons have indeed been learnt. I hope that noble Lords understand that the purpose of all investigations and inspections is to help to maintain high standards. Recent reports by Lord Justice Leveson and Her Majesty’s Inspectorate of Constabulary have found no evidence that corruption is endemic in the police. However, with every accusation of corruption or that forces are gaming or manipulating their crime figures, public trust in the police is eroded. So I recognise the seriousness of this issue. The Home Secretary retains powers to commission HMIC to undertake urgent work if there are pressing systemic or serious issues, which, as noble Lords will know, she has recently used in the Savile case. These powers exist and are indeed being used by the Home Secretary.
Policing integrity is at the heart of public trust and confidence in the police. Without it, the police cannot do their job effectively or legitimately. If the public were to lose trust and confidence in the police, they would take years to recover. A significant minority of the public do worry about police corruption, and we must do more to tackle it. When police corruption and misconduct occur, that lets down victims, it lets down the honest majority of police officers, and it undermines public confidence in the police.
We heard from the noble Lord, Lord Maginnis of Drumglass, of his concerns, and I am very happy to talk to him about the cases to which he drew our attention. I hope that he will take advantage of that. Perhaps I may say that the charging responsibility for summary offences such as those to which he referred in his own circumstances rests with the police. However, all these matters can be dealt with through the IPCC, which has the power to investigate. Therefore, opportunities to challenge decisions are in fact available to the noble Lord and to all members of the public.
The Government have achieved considerable reforms of the police. Elected police and crime commissioners are now in place and the police are more accountable to their communities. There is a new College of Policing to professionalise the police and drive up standards, and a strengthened, more independent HMIC, led for the first time by a non-policing figure. However, we must do more to improve standards. That is why last month the Home Secretary announced a comprehensive package of measures to root out corruption and misconduct from the police.
There are a number of issues that I have not been able to address in the time available but I hope that noble Lords will accept that the measures the Government are taking will make the police much more transparent, with clearer rules on how officers should conduct themselves and stronger systems to investigate and punish officers who do wrong. The measures will also ensure that the organisations we ask to police the police, such as the IPCC, are equipped to do the job.
I hope I can say with confidence that this Government can look back with pride on what has been a time of fundamental reform of policing in this country. Thankfully, police corruption and misconduct are rare and we should not let them detract from the success of the honest majority who work so hard to protect us. I thank all noble Lords and I am sorry if I have not covered all the points. I will be writing.
Health: Diabetes
(11 years, 1 month ago)
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Lord Morris of Aberavon
To ask Her Majesty’s Government what is their assessment of the cost to the United Kingdom of type 1 diabetes; and what plans they have to improve treatment of that disease.
Lord Morris of Aberavon
My Lords, the question for this debate on diabetes follows on from the debate on diabetes initiated by my noble friend Lord Harrison on 29 November, when the House had a caring, helpful and painstaking reply from the Minister—who of course is responsible for health only in England. However, since the preponderance of contributions then were on type 2, it was not surprising that the Minister’s reply on diabetes type 1 could be measured in half a column of Hansard.
I shall particularise again on type 1, about which I have already declared a family interest. In sheer numbers, the lion’s share of the diabetes problem is type 2, where some individual action can be taken by those who suffer. Not a great deal can be done for type 1 except a great effort to mitigate the problem by management of the disease, including the use of insulin pump therapy where appropriate. I make three points. First, 400,000 people are currently affected by type 1, of which 29,000 are children, and incidence is growing at 4% a year. Secondly, lifestyle intervention will not prevent the increase in the number: obesity is not the problem. Thirdly, only research will find a cure for type 1. It is at present incurable and can strike at an early age. My aim in raising the subject is to seek once again to disaggregate the cost of diabetes type 1 from type 2, both in the cost of treatment and the provision of funds for research to find a cure. I have so far failed. The Department of Health does not currently calculate the cost in the way I would hope. Why can it not do so in future? That is my first question. Specifically, what are the obstacles?
We have estimates. The direct and indirect cost of treating type 1 is said to be of the order of £1.9 billion. With the projected increase of sufferers, the cost will be even more astronomical. Until the department is able to tell us what, in its view, is the order of expenditure, we cannot hope to make good decisions as to what expenditure is appropriate. We now have the opportunity of the shortly-to-be-born National Health Service Commissioning Board to look afresh at the two different types of disease. Aggregation of expenditure under the general figure of diabetes will not help the boards, as the Minister said, to,
“guide local commissioners to improve outcomes for people with the condition”.—[Official Report, 29/11/12; col. 333.]
I rely on those words. I am advised that representations were made to the Department of Health that type 1 sufferers are a small group—though not so small at 400,000 people—with the need for highly specialised support. However, the request that type 1 sufferers be commissioned separately or at least differently has not been approved. How is that decision justified? That is my second question. Since this is the second time that I have raised this matter in debate, perhaps the Minister could expand his reply tonight by writing to me with the department’s detailed reasoning. I would like that.
It can be of enormous material help to type 1 sufferers to provide insulin pump therapy and its monitoring as an option. There is immense international variation in the provision of pumps. In this country, as with the management of diabetes type 1 care there was a postcode lottery in the past. I was encouraged by the Minister’s reply that 8% now had pumps here in this country. He went on that,
“we still need to go further to achieve the 12% to 15% advised by NICE”.—[Official Report, 29/11/12; col. 336.]
I welcome what he said.
Specifically, what are the obstacles to enable this and why have we been so slow? It is estimated that the savings to the National Health Service that could be achieved by reaching the NICE benchmark would be £30 million and £60 million a year. We are talking about big sums of money. I am told that in the United States, probably 40% use the subcutaneous infusion. Norway, Austria, Germany and Sweden have higher figures of use than us, while of course other countries have lower ones. I have already questioned why the then health Minister, Mr Paul Burstow, was able to write to me on 25 April last year saying, “that we were generally in line with the United States”. That was a significant reply which took a great deal of wind out of my sails as I had relied on anecdotal accounts of disparity. It was a crucial response. How could the department have advised him to write as he did? Given the evidence that has emerged, that is now my third specific question for the Minister.
I come now to research. In addition to government funding, a great deal of work is done by charities, and I welcome the work of the Juvenile Diabetes Research Fund. I understand that the Wellcome Trust is also active in Cambridge, Oxford, UCL, Leeds and Hanover in Germany. Since the last debate, I have been to Oxford to discuss with Professor Paul RV Johnson, the director of the Oxford pancreatic islet transplantation team, its work on an artificial pancreas. JDRF believes that research into closed loop glucose control stands on the cusp of a breakthrough that will represent the first step towards improving the lives of millions of people with type 1 diabetes. They will be provided with an artificial pancreas. This is where we are and that is what they believe.
Progress can be achieved by a partnership between experts in various disciplines and industry for development, along with the regulatory agencies to ensure safe management. The need for disaggregation is exemplified by the fact that in 2009 the government spending bodies committed £51 million to fund research into diabetes, but of this only £6 million was applied to type 1 diabetes. I was encouraged by the progress being made at Oxford and the successes achieved with adults so far. I am sure I shall be further encouraged when I visit Cambridge and discuss the matter with the team led by Dr Roman Hovorka. While both the Government and the charities have to exercise care in the funding of projects, I hope that the Minister will himself examine whether there are any bureaucratic problems over the supervision of the spending of research funds, both public and private. It would be a pity if researchers had to spend an undue amount of time meeting overprescriptive requirements regarding the minutiae of how money is spent.
I made this point in the last debate, but I shall repeat it. There has never been a real budget for type 1 diabetes services. They have been developed on the back of academic interest and the clinical recognition of need. What has been done so far is a great tribute to the professionals. I earnestly hope that the commissioning boards will not miss the opportunity properly to recognise that type 1 diabetes is a disease with many different causes and characteristics from those of type 2 diabetes. We should ensure that the good research work now in hand is encouraged and adequately funded so that fresh hope is brought to the 400,000 sufferers of type 1 diabetes—and their number is growing each year.
Lord Harrison
My Lords, it is a great pleasure to follow the noble and learned Lord, Lord Morris, who is a distinguished member of the All-Party Parliamentary Group for Diabetes, so admirably led by our colleague in the Commons, Adrian Sanders.
The noble and learned Lord highlighted the amount of money being spent on type 1 and type 2 diabetes, which is familiarly known as some £10 billion a year, but evidence from a European study that I am going to quote in a minute suggests that it could be nearer £14 billion a year. This illustrates the theme of the noble and learned Lord, Lord Morris, that there is a large degree of uncertainty about the knowledge and facts that we have in this field and it is something we need to repair, which I will turn to shortly.
Having said that, we should have an update on the debates we have had in the past with regard to the treatment of diabetes. It is an odd circumstance that as diabetes becomes an epidemic in this country it has been largely neglected. Much more concentration has been on the repair of cancer or the attack on heart diseases and so on. I do not know whether the Minister has a reply to that but it is something that we need to turn our attention to.
I am very grateful that the Government have reiterated their desire to maintain the same levels of health spending as in the past. Nevertheless, cutbacks are beginning to happen. One of the most worrying themes, which I hope the Minister will address, is the decline in the cover of diabetics. We are beginning to lose the annual check-up, which is typical of what we have had. There is a tilting over to relying on the patient to bring to the attention of the GP a problem for the GP to refer on. The problem with that is that it is the middle-class, knowledgeable patient who understands that—so often at the cost of neglecting those who do need the annual check-ups and the variety of check-ups that were put in place by the previous Labour Government.
I encourage the Government to spend wisely. For instance, I have made this plea before about the DAFNE programme, which provides structured educational courses for type 1 diabetics. It is claimed, and I believe it may be true, that it pays for itself in four to five years, but it is not generally applied throughout the United Kingdom and that is a bad thing.
The general rush to do away with bureaucracy sometimes has a fatal element to it. I saw one of my many health advisers on Monday and at the end of the consultation she looked at the screen and said, “We no longer have the appointments done elsewhere and a paper notification for you”. She has to do it. It took her about six minutes, typing away. Of course, she is taking on administrative duties that take away from her skills at the coal face. I hope that the noble Earl, Lord Howe, will ensure that we leave the bureaucracy to the bureaucrats and that the health specialists have the opportunity to do what they do best.
I want to turn to a study by LSE Health at the London School of Economics, Diabetes Expenditure, Burden of Disease and Management in 5 EU Countries, which was published last year. It makes very informative reading. Noble Lords will know that I am a passionate pro-European. One reason for that is the ability to compare and contrast the practice of the 27 countries of the European Union. This is a study of the five biggest countries, but it offers us insights that we can adopt and adapt here, or which they can adopt and adapt in their countries.
I was surprised to note that the study firmly declared that blood glucose monitoring is a cheap and hugely effective way of ensuring the health of diabetics. The Minister will recall arguments we have had in the past over testing strips, for instance. He will remember that he responded to a debate in which I tried to highlight diabetic foot care, which I have always thought was quite expensive. I am clad in shoes which are appropriate for my very strange feet as they give protection which enables me to continue to do the kind of stuff I am doing, as is the case with thousands of other diabetics throughout the United Kingdom. I know that the noble Earl is familiar with these debates. I sometimes think that he has been answering them since the time of Galen.
The study looks at Germany, the UK, France, Italy and Spain and quantifies evidence and data. It notes:
“There is increasing concern amongst government officials and public health agencies about diabetes care in Europe. Both diabetes prevalence and spending appear to be increasing. … Diabetes prevalence has been increasing steadily over the past two decades, along with an aging European population, increasing, high obesity prevalence and changing ethnic make-up. This study estimates that Germany has the highest diabetes prevalence at 8.9%, followed by Spain (8.1%), France (6.4%), the UK (6.1%) and Italy (4.8%)”.
It is interesting to ask why these differences arise. The study continues:
“Only three countries have national diabetes programmes”.
I am glad to say that that includes the United Kingdom, along with Italy and Spain. The study notes that France’s programme,
“has not been operational since 2005”.
It continues:
“Germany has Diabetes Disease Management Programmes (D-DMP), however, not all patients with diabetes are registered. None of these strategies have hard targets to achieve ideal diabetes management”.
It would be interesting to learn more about that. In 2009, the United Kingdom introduced screening for high-risk patients. We have done well in regard to screening for retinopathy. It is imperative to maintain that momentum.
The study states:
“All countries have care guidelines, the UK’s being the most prolific, but none have guidelines written for patients”.
That is interesting. I wonder whether we can elaborate on that as I am not sure that that has been adequately dealt with. I have mentioned the DAFNE and DESMOND training protocols. The study continues:
“None of the governments collect diabetes spending accurately”.
There is no doubt about the difficulty of doing that because it is such a complicated matter. The study estimates that,
“in 2010, the direct cost burden of people with diabetes was highest in Germany … at €43.2 billion, followed by the UK (€20.2 [£13.8] billion), France (€12.9 billion), Italy (€7.9 billion) and Spain (€5.4 billion)”.
There are some strange discrepancies there which might be worth looking at.
I would like to draw your Lordships’ attention to other facts and figures but we need improved diabetes data so that we can construct more useful policy initiatives. The study has very little information on the indirect costs of diabetes. Can the Minister provide information on that?
I am coming to a close and should say that only France, Italy and the UK regularly collect and publish monitoring data. France did so intermittently, in 2001 and 2007. Thankfully, Italy and the UK do so annually but that is apparently not the case in Germany. Other elements in the collection of data are missing or overlooked and ought to be repaired. My general plea is—to embellish what the noble and learned Lord, Lord Morris, has said about spending—let us look and learn from our neighbours and improve what we can, but there has to be a fundamental drive towards better knowledge and data on type 1 and type 2 diabetes; otherwise, we will fail and misdirect the funds available to us in battling a disease that has become of epidemic proportions.
Lord Hoyle
I am pleased to join in this debate. Like the noble Lord who has just spoken, I have had diabetes that has responded to treatment. It is possible to treat diabetes, and I thank my noble and learned friend for bringing about this debate. I have supported him in previous debates and am pleased to support him on this important matter because there are some 300,000 people with type 1 diabetes in this country and no one is sure what causes it. My noble and learned friend is right to say that more research is needed and the Minister, when he replies, can perhaps give us some assurances on that.
Most type 1 diabetes occurs in people before they are 40 but I am extremely concerned about the rate at which it is increasing in children. That in itself is causing problems because people whose children have diabetes very often find that they have to give up their job in order to attend school. I hope that the Minister will come in on this: there surely ought to be more collaboration between the health service and education. I tabled a Question to the Education Minister and I must say that the reply did not provide any more information. He said, “Yes, there ought to be programmes”, but there must be more collaboration because unless that happens, help will not be available to people with children.
We have said this because the cost of types 1 and 2 diabetes to the NHS amounts to £10 billion every year; and the direct patient costs of type 1 alone is £1 billion. Indeed, care for the illnesses induced by diabetes that make it necessary for people to take time off work if they are not treated properly—all sorts of things occur to them—costs £0.9 billion. We ought to be doing a lot of things about diabetes, and that is why it is important to have debates such as this which attract attention to the issue and raise its profile. As my noble friend said, there is no reason why people who are well treated cannot live healthy lives. Not enough of them are getting direct help and care. As I have said before, that often affects their work and their careers. They need a little more help from the health service.
How many people are receiving the nine tests that are available to them? In particular, how many children are receiving their annual tests? These tests should be given annually. Why is that not occurring? I say again that this matter should be given the priority that is needed. There is no doubt that if people are given the special care that should be available to them they can continue to hold down a job and have a career and a healthy life.
The other big concern that I have is with some of the side effects that occur from diabetes. There is no doubt that people are not receiving the education that they need; it is very patchy in relation to how many get it, but if they do get the education programmes, it helps them enormously. The 2009 data that I have seen show that of 6,500 people diagnosed with diabetes—the Minister may dispute my figures—only 180 received offers of help with education, and only 30% of those diagnosed attended a course. Surely we can do better than that—I should think so.
I would like to refer to the mental health side, because the figures show that people with diabetes are more likely to suffer from depression. Poor mental health has a very negative effect on people, as we know, and it is likely to need more care and attention from the NHS. Surely, we could offer people psychological care as well. That is a very important part of the treatment, and I do not know whether the Minister has any figures to show how many people are receiving that, or not. Like other noble Lords, I am disturbed by the idea that diabetes may be pushed further down and may not be receiving the attention that it should receive in the NHS. I was interested to see that there has been a new appointment of a national clinical director for obesity and diabetes. I welcome that appointment, but I hope that it is not only going to be about obesity, which is very important—but so is diabetes. I would like an assurance from the Minister that this new director will be concerned equally with diabetes as he is with obesity. Having said that, I welcome and look forward to the Minister’s reply.
Lord Collins of Highbury
My Lords, I have no doubt that my contribution will be interrupted very shortly. I, too, thank my noble and learned friend Lord Morris for initiating this important debate. As a type 2 diabetic, I am acutely aware of the possible causes of my condition and how lifestyle changes can improve matters. That is not the case with type 1 diabetes, which is a chronic, life-threatening condition with a lifelong impact on those diagnosed and their families. It cannot be prevented and there is no cure. No one is quite sure what causes it; possibly it is triggered by an auto-immune disease. It does not involve lifestyle factors such as poor diet or lack of exercise, as my noble and learned friend has said.
Although the major increase is in type 2 diabetes, type 1 is also rising. As my noble and learned friend said, estimates suggest that between 300,000 and 400,000 people living with type 1 diabetes in the UK, which accounts for around 10% of all people with diabetes. People with type 1 diabetes are at greater risk of dying younger. The first ever report into mortality from the National Diabetes Audit was published just over 18 months ago, and I referred to it in the previous debate. It found that up to 24,000 people with diabetes are dying in England each year from causes that could be avoided through better management of their condition. About three-quarters of those are aged 65 and over. However, the gap in the death rate between those who have and who do not have diabetes becomes more extreme when comparing younger people. It is truly shocking to learn that so many young people are dying from diabetes. Type 1 is a particularly difficult condition to live with, as my noble and learned friend pointed out. We need to raise awareness and campaign to help to prevent and detect diabetes, as my noble friend Lord Hoyle said. I am therefore sorry that the Government decided not to accept the Public Accounts Committee recommendation on this particular aspect of its report about mounting public campaigns.
According to the 2012 Impact Diabetes report, the current cost of direct patient care for those living with type 1 diabetes is estimated at £1 billion, along with indirect costs of just under £1 billion related to increased death rates and illness, work loss and the need for informal care. Last year’s Public Accounts Committee report also recognised that while the department had improved information on diabetes, it was not being used effectively by the NHS to assess quality and improve care. It recommended that the department should work with the NHS to ensure that the costs of diabetes are fully captured and understood in order to promote appropriate services and better outcomes for patients. In their recent response, the Government agreed with the committee’s recommendation. I would therefore like to ask the noble Earl what progress has been made in implementing it, especially on the further work required to improve the underlying financial information collected at both the local and national level, and how quickly this will be made available to commissioners.
As we have heard, people with type 1 diabetes can live long, healthy lives if their condition is well managed. However, too many are not getting the help and care they need, leading to devastating complications, avoidable deaths and greater costs to the NHS. Everyone with diabetes should receive the nine agreed care processes recommended by NICE as part of their annual review. However, two-thirds of those with type 1 diabetes do not receive all nine. Can the noble Earl give more detail on how the target of 80% coverage by 2018 given by the department in the PAC response will be met? The concern is that the disbanding of NHS Diabetes may result in a number of established work programmes either not continuing or being suspended. It is really important that these programmes continue. They include integrated care supporting self-management, clinical safety, paediatric care and education, specialist foot care, older person’s care, inpatient care and, as we have heard from my noble and learned friend, insulin pump networks. Will the noble Earl support further development of these work programmes with the input of clinicians and patients to drive quality improvement?
Data from the National Paediatric Diabetes Audit show that only 6% of children and young people whose checks are being recorded are getting all of the recommended diabetes care, services and support that they are entitled to. Over 85% of children and young people over the age of 12 have blood glucose levels higher than the recommended targets. As many noble Lords here will know, on 13 March, Diabetes UK launched its type 1 essentials for children and young people campaign. In seeking to help end the variation in levels of diabetes care, the organisation wants to see specific diabetes leadership and a diabetes service improvement function in the new NHS improvement body. Assuring the effective commissioning of integrated models of diabetes care across primary and specialist services by working closely with clinicians and patients is vital.
Despite the fact that type 1 diabetes is a condition which people have to live with every day of their lives, my noble friend Lord Hoyle pointed out that education for people with diabetes is not universal or guaranteed. NICE guidance recommends that people with type 1 and type 2 diabetes should be offered patient education programmes to help them understand more about their condition and develop the skills needed effectively to self-manage their diabetes. An economic analysis performed by the York Health Economics Consortium, referred to by my noble friend Lord Harrison, revealed that DAFNE, a structured education course for people with type 1 diabetes, would pay for itself within four to five years due to the reduced complication rate expected from improved management of an individual’s diabetes.
As my noble friend Lord Hoyle said, the National Diabetes Audit has been collecting data on structured education in England and Wales since 2005. However, the completeness of the data is limited and therefore has not previously been reported nationally. The 2009 data show that of the 6,444 people who were diagnosed with type 1 diabetes during that year, just 180 recorded offers of education. In Diabetes UK’s 2009 membership survey, only 36% of people had attended a course to help them manage their diabetes since diagnosis. All people with diabetes, whether recently diagnosed or those with pre-existing diabetes, should receive access to the education and support they need to enable them to manage their condition. It should be available in their local area and be accessible and flexible enough to meet their individual needs. Like other noble Lords today, and like Diabetes UK, I welcome the appointment of Dr Jonathan Valabhji as the National Clinical Director for obesity and diabetes for England. However, I would seek from the Minister an assurance that type 1 diabetes will not be forgotten and that it will remain a core part of the new director’s responsibilities. I have completed my speech without interruption.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, I congratulate the noble and learned Lord, Lord Morris of Aberavon, on securing this debate and on his authoritative speech and major contribution to raising the profile of diabetes, especially type 1. Diabetes is a major challenge for this country and that is why it is a key priority in the mandate for the NHS Commissioning Board. We are clear about the need to improve diabetes outcomes through better care, and we regard diabetes as a key marker of improvement in the NHS as a whole.
We are helped by having strong advocacy, as has been mentioned. I would like to commend the work of Diabetes UK in raising awareness of the early signs of diabetes in children, and support its new Ten out of Ten campaign: Type 1 essentials for children and young people.
Earl Howe
Type 1 diabetes is an autoimmune condition that causes failure of insulin production. It cannot be prevented or cured. Individuals usually develop the condition in childhood or early adulthood and require lifelong insulin treatment.
I therefore commend the Juvenile Diabetes Research Foundation for funding international studies in type 1 diabetes, having spent over £1 billion on research that seeks a cure or better treatment. It is a mark of the international standing of diabetes research in the UK that JDRF spends a relatively high proportion of its funding on type 1 diabetes research in this country.
We know that diabetes has a significant cost to society. The current payment systems in the NHS do not differentiate between the costs associated with type 1 and type 2 diabetes. The National Audit Office estimates that the NHS spends at least £3.9 billion a year on diabetes as a whole and its complications.
The noble and learned Lord asked what the obstacles were to counting the costs of type 1 diabetes separately. It is simply current accounting practice that prevents this. There will be new opportunities, with the NHS Commissioning Board and CCGs taking responsibility. I understand that as we speak work is under way that looks at the coding of diabetes care in primary care and how this is collected via computer systems.
The noble Lord, Lord Harrison, mentioned the indirect costs of diabetes. We know very well what those indirect costs look like in personal terms. One in 20 people with diabetes require support from social services. People with diabetes are twice as likely to be admitted to hospital than those without it. Complications increase the cost of NHS care fivefold. People can lose a leg, or their vision. Their kidneys can fail, they are vulnerable to infection, and their hearts can fail. These are serious complications. Diabetes is also a major factor in premature mortality.
We need more proactive management of the condition and its complications, starting with prompt diagnosis. Once diagnosed, people must have access to the best care and support in living with and managing this long-term condition. We need to make sure that management is in line with the latest clinical guidelines. To that end, the department has taken a number of steps to improve diagnosis and management of type 1 diabetes. We have collaborated with NHS Choices so that its website now has clear advice for parents on identifying the signs of diabetes and the actions required.
The NHS has clear statements of good-quality care for people with type 1 diabetes. These include the NICE quality standard and NICE clinical guidelines for all ages, which are being updated. The NHS is expected to follow NICE guidance as part of its general duty to secure continuous improvement in quality.
From April 2013, the best practice tariff for paediatric diabetes will ensure that the NHS offers all children and young people with diabetes appropriate education, support and management. All paediatric diabetes centres must belong to regional paediatric diabetes networks. Those paediatric networks will continue to function.
Like all pupils, children and young people with diabetes deserve full educational opportunities unhindered by their condition and their daily medical care. It is worrying that so many pupils experience preventable problems at school because of their diabetes, whether through barriers to insulin administration or even being banned from school trips. I am glad to hear that the honourable member for Yeovil and my honourable friend for Central Suffolk and North Ipswich have considered this in the context of early years and the minimum health offer in schools.
From April 2013 we will also introduce a best practice tariff to ensure good specialist care for severe insulin lack, called diabetic ketoacidosis, and for insulin excess or hypoglycaemia. These are potentially fatal crises if you have diabetes and can usually be avoided.
The Quality and Outcomes Framework, or QOF, rewards general practitioners for providing the nine care processes for people with diabetes. Since 2003-04, QOF has encouraged steady improvements in these annual checks. At the same time, the percentage of people diagnosed with diabetes has more than doubled. We want this improvement to go faster. For this reason, NICE has been asked to review the Quality and Outcomes Framework and diabetes indicators within it, and we await its response.
Last year, the National Audit Office published its review of the management of adult diabetes services in the NHS. While this report acknowledged the progress made over the past 10 years, in particular in the information we have about diabetes, it also highlighted the extent of variation in services across the NHS and the significant challenges that we face over the next 10 years. The Public Accounts Committee subsequently made a number of recommendations. The Government accepted all but one. We also set clear objectives for the NHS.
For the last few years, this work has been led by Dr Rowan Hillson as national clinical director for diabetes. Since her appointment in 2008, Dr Hillson has made enormous strides to improve the care and management of all those with diabetes. She retires at the end of this month from this role and I take this opportunity to pay tribute to her and thank her for all she has done, which is a very great deal. From April, Dr Jonathan Valabhji will take up the challenge on behalf of the NHS Commissioning Board as the new national clinical director for obesity and diabetes. I wish him every success in his new role. I can tell the noble Lord, Lord Hoyle, that Dr Valabhji is a consultant diabetologist and fully aware of the needs of people with diabetes. He will give them appropriate attention in the balance of his work.
I also thank the NHS Diabetes team for all their hard work. NHS Diabetes has made a major contribution to improving diabetes care nationally. The team will be absorbed into NHS Improving Quality in the NHS Commissioning Board next month. It is good that the excellent work of the National Diabetes Information Service will continue in Public Health England. The prime objective of the NHS Commissioning Board will be to drive improvement in the quality of NHS services. The board will be held to account through the NHS mandate. Diabetes is relevant to all parts of the NHS outcomes framework, through which we will track progress. In the NHS, diabetes is everybody’s business.
I agree with the noble Lord, Lord Collins, that structured diabetes education is essential. NICE has specified this and I support its guidance. The noble and learned Lord, Lord Morris, asked what we were doing to increase the use of insulin pumps. The national clinical director chairs the Insulin Pump Working Group, which met today. It exists to increase pump use and provided the insulin pump audit showing that 8% of adults and children in the UK have pumps. Within that figure, it is 6% of adults and 19% of children, but the work of that group continues. I am happy to write with a full and detailed response, as the noble and learned Lord asked.
The noble and learned Lord also quoted from a letter he had received from my honourable friend Paul Burstow, which indicated that we in this country were in line with the United States. I confess that I am puzzled by that, as he is. The figures that I have are that the United States has around 30% coverage. That compares to Spain, Finland and Portugal at around 5%. We are, as I say, at 8%. I will look further into that situation and write to him as appropriate.
The noble Lord, Lord Harrison, referred to blood glucose monitoring, which is, of course, essential to managing type 1 diabetes safely and well. The national clinical director and the chief pharmaceutical officer wrote to all doctors to remind them of that this year. Dr Hillson recently wrote to the NHS on behalf of the Minister for Public Health, highlighting the Minister’s concerns, and reminded the NHS of the importance of appropriate prescribing and management.
The noble Lord, Lord Harrison, also asked about guidelines for type 1 patients. NICE produces patient-friendly summaries which I believe are very helpful, while NHS Choices includes information about type 1 diabetes. The National Clinical Director for Diabetes has worked with Diabetes UK to produce its guidance and we support the organisation’s 15 healthcare essentials checklist. He also asked why everyone with diabetes does not get an annual check. In the Government’s response to the Public Accounts Committee we set clear objectives for the NHS Commissioning Board and we will monitor them closely.
The subject of research was raised by the noble and learned Lord and the noble Lord, Lord Hoyle. Recently, the Government announced that £775 million would be invested over five years through the National Institute for Health Research to drive innovation focused on major diseases, including diabetes. The department is currently supporting more than 60 studies into type 1 diabetes through the Diabetes Research Network. Diabetes research in the UK punches well above its weight and the results are seen prominently in international diabetes meetings. The noble and learned Lord also asked why type 1 is not included in specialised commissioning. I will write to him with an explanation on that point.
I would like to support very strongly the remarks made by the noble Lord, Lord Hoyle, about children with diabetes. Children with the condition should have equal opportunities in schools. Collaboration between children’s diabetes services, children’s carers and education services is absolutely key to allow children to achieve their full potential. All local authorities and schools should be encouraged to read the Managing Medicines in Schools and Early Years Settings booklet. He asked how many people are getting the nine care processes. The answer is 54% of adults, but I regret to say that it is fewer than 10% of children. However, as I mentioned, we now have the Paediatric Diabetes Best Practice Tariff, which demands better care in regional paediatric diabetes networks.
My time is up. I have more to say and I will write to those noble Lords whose questions I have not answered. There is good and bad here. We have vast amounts of data for this condition. We know what needs to be done and where. The challenge is for clinicians and commissioners to ensure that everyone with diabetes has good care.
House of Lords
UK: Ageing Population
(11 years, 1 month ago)
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Lord Filkin
To ask Her Majesty’s Government whether they will publish their assessment of the implications of the ageing of the United Kingdom’s population and their response to those implications; and, if so, when.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
We welcome the committee’s report on the ageing population that was published last week. We will consider its recommendations carefully and respond in due course. Effective reform of public services is critical if we are to meet the needs of an ageing population and ensure long-term sustainability. We have put in place an ambitious programme of reform across a wide range of government policy areas, including pensions, health, social care, housing and employment.
Lord Filkin
I thank the Minister for his reply. As the House may know, the committee found that our society and Government were woefully underprepared for this major social change. To focus the supplementary question on health, out of courtesy to my colleague, the report found a massive increase in demand and cost driven by the increase in long-term conditions. In the committee’s view, this posed perhaps the biggest challenge the NHS has ever had to face. Will the Secretary of State set out his assessment of these challenges and what he proposes to do about them?
Earl Howe
My Lords, we know that to adapt and respond to future need, the health and care system needs to change. The conclusions of the noble Lord’s report correlated in many ways with our own analysis in this respect. The challenges that the report sets out create an opportunity for the NHS and local authorities to innovate and explore new ways of working together to meet the needs of their local populations better and to optimise the use of resources, which is of course critical. We think the NHS and local authorities are best placed to understand the opportunities that exist in their areas, and we are committed to supporting them in that regard.
Lord Mawhinney
My Lords, will my noble friend undertake to intercede with the usual channels so that your Lordships’ House can have an early and full debate on the report from the Select Committee on Public Service and Demographic Change, given the highly significant consequences that would flow if the committee, of which I was a member, even got it half right?
Earl Howe
My Lords, I can say to my noble friend that I will certainly do that, because this is a very important report. I thank not only the noble Lord, Lord Filkin, but all members of the committee, who worked extremely hard to prepare a very well thought out set of conclusions.
Baroness Greengross
My Lords, does the noble Earl agree that social care has been the poor relation for so many years and that we need integration as soon as possible with health and housing? To achieve that, would he commit to the Government mandating integration and earmark sufficient funds so that this care can be a reality as soon as possible for older people with chronic conditions?
Earl Howe
My Lords, I very much agree with the noble Baroness. It is our ambition that people should receive high-quality, integrated, person-centred services that deliver the best outcomes to the service user. Making the service as a whole more efficient is the other benefit of integrating service. There is no single definitive model of integration. Some localities are further advanced than others in thinking about new ways of delivering it. We are developing the concept of pioneers to support the rapid dissemination and uptake of lessons learnt across the country, but we want to encourage local experimentation as much as we can to allow local areas to provide integrated care at scale and pace.
Baroness Jolly
My Lords, there are several common themes between the report from the noble Lord, Lord Filkin, and his group, and that of the scrutiny committee of the draft Care and Support Bill, which was published today. One of those themes is the funding of personal care, which has to be shared between the individual and the state. As recommended by the Dilnot commission, will the Government invest in an awareness campaign to inform people of this situation and the importance of planning ahead?
Earl Howe
I am sure my noble friend is right that there is a job of work to do to inform people about the new arrangements that we are bringing in to implement the Dilnot recommendations. My right honourable friend the Chancellor’s announcement at the weekend confirms that we will introduce a cap on care costs and extend the means test upper capital threshold at the earlier date than previously announced, namely on April 2016. The reason for the change in date is to bring it into line with changes to single-tier pensions. We will need to disseminate this information sooner than we would otherwise have done.
Baroness Bakewell
My Lords, when I was appointed the voice of older people in 2009, these issues were already well appreciated. It is now 2013. This is an excellent report from the House committee, which everyone recognises, but I am afraid that it joins many other reports on my shelf that have been published since 2009. Will the noble Earl please tell me why he thinks change is so slow?
Earl Howe
My Lords, change is an increasing imperative, at least in my judgment, at local level. I talk not only to professionals in the health service but to local authorities, which will very soon be charged with looking in the round at the needs of patients and service users in their area. They know that with the financial constraints that are upon us, services need to change in order to remain sustainable and affordable. That will be a very strong driver to ensure that some of these very good recommendations are driven forward at pace.
Lord Hunt of Kings Heath
My Lords, the Opposition warmly welcome the report. I am sure that it will be influential in the way we develop policies in the future. I was interested in the noble Earl’s response when he talked about public sector reform. Does he agree that the overwhelming message of the report is the need for a fully integrated health and social care system? Is he not as worried as I am that the changes in the NHS that he is introducing on 1 April will in fact lead to a disintegrated system in which, instead of co-operation and integration, competition will become the name of the game?
Earl Howe
No, I do not agree with that. We have always said that competition is but one tool in the armoury of commissioners. It is not a panacea by any means. As for disaggregation, I see the opposite at local level. Health and social care, public health and patient organisations are getting together for the first time to break down silo barriers and the traditional divisions that have existed.
Homeopathy
(11 years, 1 month ago)
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Lord Taverne
To ask Her Majesty’s Government why the Department of Health removed from the NHS Choices website the advice that there was no good quality evidence to show that homeopathy was more successful than placebo.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, NHS Choices consults the Department of Health as necessary to ensure the consistency of its information with government policy. A recent review of the homeopathy web pages led to a change in the way the evidence was presented. Following concerns that the changes were unclear, NHS Choices has further clarified this information.
Lord Taverne
My Lords, I am delighted to hear that the passage has been restored. However, it is disturbing that inquiries made under the Freedom of Information Act revealed that officials deleted the passage as it stood in response to lobbying by a charity founded by the Prince of Wales. They seemed to be more concerned not to offend that formidable lobbyist than to listen to the advice of their Chief Medical Officer, who declared in a recent statement to a House of Commons Select Committee:
“I am perpetually surprised that homeopathy is available on the NHS”.
I have only recently learnt that a BBC South West programme found that Prince Charles’s favourite pharmacy has been selling sugar pills as vaccines against some serious diseases. I am sure that my noble friend, to whom I could not give notice of this point, will look into the matter. Will he assure the House that the policy of the Department of Health is to promote evidence-based medicine and not treatment based on nothing but water?
Earl Howe
My Lords, I shall certainly look into the particular matter raised by my noble friend. The change in the way the information was presented on NHS Choices was as a result of a formal review, which happens automatically to all NHS Choices pages every 24 months. The page on homeopathy reached the formal 24-month review point in January 2011. The policy of NHS Choices is to provide objective and trustworthy information and guidance on all aspects of health and healthcare, and the page on homeopathy does exactly that.
Lord Walton of Detchant
My Lords, more than 10 years ago I chaired an inquiry conducted by your Lordships’ Select Committee on Science and Technology into the field of complementary and alternative medicine. We examined the evidence in favour of homeopathy, accepting that certain well qualified doctors believed in its use. However, at the time we did not discover any convincing research evidence to suggest that it was better than placebos. Over the centuries, many medicines have been used that have been shown to be no better than placebos. Therefore, has the time not come when it is appropriate for the Government to recognise that, in the light of recent research, there is no evidence whatever to support the continued use of homeopathy in the NHS?
Earl Howe
My Lords, we have been consistently clear that no treatments should be arbitrarily rationed on cost grounds. The NHS constitution sets out that patients have a right to expect local decisions on the funding of drugs and treatments to be made rationally following a proper consideration of the evidence. More importantly in this context, it is the responsibility of the NHS to make decisions about commissioning and funding of healthcare treatments and not for Ministers to second-guess that process.
Lord Winston
My Lords, perhaps I may be permitted to help the Minister. Many years ago, there was a very interesting study in Wales of a placebo-controlled trial that showed that, whatever was given, the best chance of a treatment working, placebo or not, was whether the doctor who was giving the medicine actually believed in it. Does the same apply for homeopathy and the Secretary of State?
Earl Howe
My Lords, the best way I can answer the noble Lord is to refer him to the page on NHS Choices that explicitly refers to the placebo effect. As he will know, the 2010 House of Commons Science and Technology Committee report on homeopathy said that homeopathic remedies perform no better than placebos. It is important to emphasise that message. On the other hand, many people have found benefit from homeopathic medicines and, in a way, that is their privilege and right.
Baroness Gardner of Parkes
My Lords, is the Minister aware that homeopathy started at a time when the one treatment they gave people was to bleed them? It was effective because they did not bleed them and allowed them to recover normally; I was on the board of the Royal London Homeopathic Hospital for a good many years, where I learnt that. Does the Minister not think that, faced with a situation where antibiotics have been used too casually, it is time to look at what we should not be taking? Does he think it important that patients should have the right to whatever treatment they choose provided that homeopathy does not allow them to escape proper diagnosis for cancer or some other tragic condition, which could be overlooked if it is not combined with ordinary medicine?
Earl Howe
My noble friend makes an important point. We are clear in recommending that patients should talk to their GPs before stopping any treatment that has been prescribed by a doctor in favour of homeopathy and before they start taking homeopathic remedies. It is important that people understand that homeopathy may not be effective in many situations.
Baroness Corston
My Lords, given that many GPs ask for training in homeopathy and become homeopaths using both conventional and homeopathic medicine, and speaking as someone who personally uses homeopathic remedies, will the Minister ensure that the views of people such as the noble Lord, Lord Taverne, with which we are all familiar, are not given such credence within the National Health Service that those who wish to use homeopathic remedies do not have that choice?
Earl Howe
My Lords, I take the noble Baroness’s point. Again, we have consistently said, in this and in other areas, that clinical responsibility for an individual’s health condition rests with their GP, who must therefore be able to justify clinically any treatment to which he or she refers someone. As she said, there are GPs who have a speciality in homeopathy. We recommend that a patient who is interested in homeopathic treatment should go to such a GP.
Visas: Chinese Visitors
(11 years, 1 month ago)
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Lord Lee of Trafford
To ask Her Majesty’s Government what is their assessment of the effect of current visa restrictions on visitors from China to the United Kingdom for tourism and commerce.
Lord Lee of Trafford
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as chairman of the Association of Leading Visitor Attractions.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
There has been continued and significant growth in Chinese visitors coming to the UK, demonstrating that we support growth through the visa system. In 2012, UKBA processed almost 300,000 visa applications from Chinese nationals, and the number of visas issued to Chinese nationals increased by 7% in the year to December 2012.
Lord Lee of Trafford
The reality is that between 2004 and 2011, while the United States saw a growth in Chinese visitors of over 400%, we managed just over 50%. Overall, the United Kingdom’s share of Chinese tourism has declined by one-third during the past 10 years.
Turning to non-tourism activities, is the Minister aware that, for example in our superyacht-building sector, the chief executive of the British Marine Federation said recently:
“Chinese tourist restrictions are a straitjacket on the UK marine industry which is harming businesses, sapping the economy, and costing local jobs”.
The president of Sunseeker said:
“Sunseeker’s Chinese clients and potential buyers are having extreme difficulty in obtaining a visa to visit the UK, being laborious at best and often declined”.
When is the Home Office going to get real and stop disadvantaging UK tourism and UK commerce?
Lord Taylor of Holbeach
My Lords, my noble friend is quite right to exhort us to greater effort, but he should be well aware of the work that is being done through our network of BritAgents throughout China and indeed our partnership with British Airways, which is opening a new route from Chengdu to London this year. This partnership and the way in which we are building our relationship with Chinese visitors are proving successful. Indeed, the most recent International Passenger Survey data revealed a 24% increase in the number of Chinese visitors in 2012 compared with 2011.
Baroness Liddell of Coatdyke
My Lords, is the Minister aware that the most recent World Economic Forum analysis of tourism competitiveness showed that Britain’s visa regime has gone from 22nd to 46th? Not only that, we are 139th out of 140 for the charges at our airports and on tickets because of our old friend air passenger duty. Last week, we had the debacle around Brazilian visas added to the current difficulties with Chinese visas. There are people out there desperate to come to Britain. They spent £18.7 billion in Britain last year, 4% more than the year before. Why are we making it so difficult for them?
Lord Taylor of Holbeach
I am afraid that I cannot agree with the noble Baroness. She paints a pretty dismal picture, but I do not recognise that from the reality. Of the applicants for visas, 97% are processed within 15 days and of those, 96% are successful. Having sought the opinion of Chinese visitors, 90% are very satisfied with the service provided by the visa service.
Lord Tanlaw
My Lords, I have just completed an extended tour of Singapore, Taiwan, Hong Kong and China, where I have a manufacturing interest. Is the Minister not aware that there is a lot of resentment and disappointment with this country because of the difficulty with visas? It is also affecting inward investment to this country. Is he aware of that? It is affecting the number of students who are coming here. Students are going to Australia and America instead. This thing is real, as the noble Lord, Lord Lee of Trafford, has said. Will something be done about it?
Lord Taylor of Holbeach
We are trying to make the visa application process as customer-friendly as we can. The form itself is available in Chinese so that applicants can complete it in Chinese and online. We are dealing with a real issue. Either we have visa controls or we do not. I am sure that this House would not suggest to Her Majesty’s Government that we drop visa controls. Indeed, we review visa controls, but for China we require them. The most important thing is that we have a system in place that reflects the interests of this country in protecting its borders and the interests of those who want to come here. They will be welcome for business, tourism and indeed for study.
Lord Geddes
In his first Answer to my noble friend Lord Lee, the Minister gave statistics for the number of visas issued. To what extent was that split between those from Hong Kong and those from mainland China?
Baroness Smith of Basildon
My Lords, I am disappointed that the Minister sounds extraordinarily complacent on this issue. He has heard from all sides of the House that there is a serious problem, and it is not the case that people are saying there should be no visas. It seems that we are making matters extraordinarily difficult for people from China and, as we have heard, from Brazil who would contribute to the economy of this country. Does the Home Office or any other part of government undertake an economic assessment of the impact these visa regulations are having?
Lord Taylor of Holbeach
My Lords, there are no visas for Brazil, and there is no plan to introduce them. That decision was made last week, and an announcement was made to that effect.
I am not complacent about this issue. I see the enormous potential of tourism and commercial links with China. I think it is a very important area of activity. However, as I explained in my answers to noble Lords, we need to maintain a visa system for our own border security. Having decided that we need to put one into place, and I am very pleased to hear that the noble Baroness, Lady Smith, agrees with that decision, the task is to try to make sure that the processing is as straightforward and easy as possible.
I have given illustrations of the figures. We should talk in figures and not in speculation. I have given the figures that 97% of visa applications are processed within 15 days and that our charge of £81 compares with the £126 it costs a UK citizen for a visa to go to China. We try to keep our service as competitive as possible, and it is right to do so.
Bank of England: Monetary Policy
(11 years, 1 month ago)
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Lord Barnett
To ask Her Majesty’s Government whether they intend to give more powers over monetary policy to the Bank of England.
Lord Newby
My Lords, the Bank of England Act 1998 already gives powers of operational responsibility for monetary policy to the independent Monetary Policy Committee of the Bank of England. The Act requires the Treasury to specify the objectives of the MPC at least once every 12 months. The Chancellor set the remit for the MPC at Budget 2012 to target inflation of 2%, as measured by the 12-month increase in the consumer prices index.
Lord Barnett
My Lords, there have been widespread reports that the Chancellor was looking at that remit with the possibility of changing it. I appreciate that it may have been only a Lib Dem Budget leak but is it true and, if so, what does he propose to do about that kind of leak? Does the Chancellor, as has been said, believe in a looser monetary policy, and has he told the new Bank governor that that is what he wants him to do?
Lord Newby
My Lords, as the noble Lord will be aware, it is Budget Day tomorrow. That is the day on which the Chancellor will re-express the remit for the Monetary Policy Committee. I am afraid the noble Lord will have to wait for 24 hours.
Lord Higgins
Does my noble friend agree that there is sometimes confusion between interest rate policy and monetary policy? Can he say what the Government’s policy is in relation to their own actions and those of the Bank of England as far as the quantity of money is concerned?
Lord Newby
My Lords, as I said in my original Answer, operational responsibility for monetary policy is a matter for the independent Monetary Policy Committee of the Bank of England, not for the Treasury.
Lord Peston
My Lords, bearing in mind that Section 19 of the Bank of England Act 1998 gives reserve powers to the Treasury to give directions to the Bank of England, am I right that those powers have never been used? I am pretty sure that I am right. Does it not follow that the failure—despite the fact that the Act says that this is the MPC’s objective—to hit the inflation target for three years without the slightest sign that it will be hit for the next two years, coupled with monetary easing, is down to the MPC?
Lord Newby
My Lords, inflation has been higher than the 2% target for a number of years. The MPC has taken the view that the target would be met in the medium term and that, because the principal reasons for inflation did not include excessive domestic demand and are therefore less capable of being moderated by increases in our own interest rates, it was wiser to “see through” the temporary increase in inflation above 2% but to work, as the MPC has, on the basis that, in the medium term, inflation would indeed come down to 2%.
Baroness Kramer
My Lords, Paul Tucker has floated the notion that the Bank of England could charge banks for holding reserves at the Bank as an incentive to get them to lend to the real economy. Is that an issue that has been actively discussed with the Treasury and what is the Government’s view?
Lord Newby
My Lords, again, that is a matter for the Bank of England. To the extent that the Chancellor—and the Treasury—wishes to change the way in which the Bank of England operates, he will have an opportunity tomorrow to set out what any changes might be.
Lord Eatwell
My Lords, from what the noble Lord has said, the Treasury has clearly been content with the policy pursued by the Monetary Policy Committee over the past three years. Is the noble Lord also content with the impact of that policy on pensioners’ annuities?
Lord Newby
My Lords, the Government’s view is that it is in the long-term interests of everybody, including pensioners and families, that we deal with the deficit and get growth going on a sustainable basis. In the short term, the Bank has taken the view that to keep within the inflation target and, subject to that, to support the economic policy of the Government, including their objectives for growth and employment, it should keep interest rates low.
Lord Vinson
My Lords, does the noble Lord agree that many people increasingly feel that the brief given to the American Fed, which is rather wider than the brief given to our Monetary Policy Committee, would be advantageous? Instead of looking solely at inflation, it would enable the Monetary Policy Committee to examine the effect of high interest rates on the rate of exchange. The pound has been kept higher than its purchasing power parity for years and, as a result, we have a huge trading deficit. A trading nation really ought to look seriously at its rate of exchange, which ought to be one of the factors that a new remit should cover.
Lord Newby
My Lords, when the previous Government established the independent Monetary Policy Committee, they decided not to follow the remit given to the Fed. No Chancellor since 1997 has decided to change that remit.
Lord Hughes of Woodside
My Lords, has the Minister noticed that the Deputy Governor of the Bank of England has floated the idea that banks should be entitled to charge negative interest on savings? Even the new Governor of the Bank of England, when he was in Canada, was apparently within days of allowing such a policy. This would be immensely damaging to savers. Will he put this to rest, immediately and unequivocally, and say that there is no possibility of the Government sanctioning any such idea?
Lord Newby
My Lords, an awful lot of ideas have been floated recently but the key remit for the Bank of England is set by the Chancellor. Within that, the Bank has operational independence on how it follows that remit. The remit has not changed but the Bank of England, with or without a new governor, always looks at questions in the general area of monetary activism.
Representation of the People (Election Expenses Exclusion) Order 2013
(11 years, 1 month ago)
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Lord Wallace of Saltaire
That the draft order laid before the House on 30 January be approved.
Relevant document: 19th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 12 March.
Welfare Benefits Up-rating Bill
(11 years, 1 month ago)
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16:14 - Division on Amendment 1 - Ayes: 206 / Noes: 275 - Amendment 1 disagreed.
17:20 - Division on Amendment 2 - Ayes: 221 / Noes: 261 - Amendment 2 disagreed.
18:12 - Division on Amendment 3 - Ayes: 198 / Noes: 253 - Amendment 3 disagreed.
19:17 - Division on Amendment 4 - Ayes: 173 / Noes: 220 - Amendment 4 disagreed.
Lord McKenzie of Luton
Lord McKenzie of Luton
My Lords, I will also speak to Amendments 5, 7 and 10 in this group. These amendments stand in my name and in those of my noble friend Lady Sherlock, the noble Lord, Lord Low of Dalston, and the right reverend Prelate the Bishop of Leicester. I say at the start that we view the amendments as consequential on Amendment 1, and we are advised that should these amendments be carried, they do not pre-empt a discussion on the subsequent amendments on the Marshalled List.
Amendments 1 and 7 would remove the reference to 1% in Clauses 1 and 2, and hence would remove the 1% cap on the uprating of the relevant sums and amounts. Amendments 5 and 10 would delete the prohibition on uprating such sums and amounts under the annual uprating of benefits and tax credits. As we explained in Committee, we fully intend these amendments to negate the fundamental purpose of this Bill, which is to lock in real-terms cuts to a range of benefits for the two years to March 2016. This follows on from the equivalent cut for next year, which has been implemented by statutory instrument.
The uprating of benefits and tax credits should proceed in accordance with the existing statutory framework, whereby the Secretary of State is required each year to review the rates of various benefits and tax credit components to see whether they have retained their value in relation to the general level of prices. There is no general requirement to fully uprate, but there is an obligation to assess on the basis of up to date information on the cost of living.
On these grounds alone, the Bill is completely unnecessary. If the Government are intent on three years of cuts by 1% uprated, they can use existing mechanisms, just as they have for 2013-14. They would then at least retain some flexibility to revisit the policy, especially if inflation were to surge above currently expected levels. If the Bill stands, there is no certainty about the level of real cuts that have been imposed on some of the most vulnerable people in our country.
The government assertion that committing these cuts to primary legislation is crucial to giving confidence to the markets has no credibility. It is frankly untenable to suggest that by locking into legislation these estimated benefit savings, which amount to less than 0.1% of government spending, the markets will be assured and comforted. It does not seem to have cut any ice with the rating agencies.
Let me reiterate Labour’s position. We will make no commitment now on spending or tax for the next Parliament, and we will set out our spending plans at the time of the next election. However, right now, we would uprate in line with inflation. I will come in a moment to how the Government can plug the hole in their increasingly fragile finances.
This Bill is misdirected on several other counts. We are told by the Secretary of State that cutting benefits and tax credits is necessary in advance of universal credit, as a contribution to fiscal consolidation. However, it does nothing for the deficit or borrowing. Indeed, by withdrawing real resources from low-income families, which of necessity have the highest marginal consumption rates, it is damaging demand. It ignores the IMF warning that the fiscal stabilisers should be allowed to operate. Just last week, the FT joined an increasing chorus of those pointing out that fiscal tightening could raise the debt ratio in the short term, as fiscal gains are partly wiped out by the decline in output.
We also had the spectacle of the Prime Minister being rebuked by the OBR for asserting that the Government’s debt-reduction programme had not affected growth. Its justification is supposed to be that there needs to be some correction for the fact that benefits have been uprated at a faster rate than earnings over the past five years: essentially, that those out of work have done better than those in work. It is perverse, therefore, that some two-thirds of those hurt by the 1% restriction are those who are actually in work.
Looking at percentages rather than cash amounts is misleading. One per cent of a small number is a very small number. Indeed, specifically included among the cuts are in-work support such as working tax credits, SSP, SPL and maternity pay, as well as in and out of work benefits such as housing benefit: the very support that enables individuals to sustain employment and manage work and family responsibilities. We are told that the Government are committed to eradicating child poverty, and of course we would accept that child poverty is not only about income levels, but improving income and relative income is an essential component of tackling poverty, and matters are being made worse by this Bill, with another 200,000 children being drawn into poverty. Compared with CPI uprating, this Bill and the 2013-14 order mean that 30% of all families are affected, losing on average £156 a year.
Lord Low of Dalston
My Lords, I have put my name to this amendment and will briefly signify my support. There is not a lot that I can add to the comprehensive account given by the noble Lord, Lord McKenzie. The only point I would stress was made by somebody on television last night—that we now live in an environment where inflation is considerably higher than we were used to in the first decade of this century. We understand that the new Governor of the Bank of England advocates that the inflation target should be allowed to float free. We are in an environment where inflation is set to hover around 3.5% or higher with no prospect of it reducing. In these circumstances, to cap the increase in benefits at 1% is simply unjustifiable. I support the amendment moved so comprehensively by the noble Lord.
Lord Forsyth of Drumlean
My Lords, there is no one in this Chamber who would not like to see support for those on low incomes and families to be increased. What was striking when the noble Lord proposed this amendment was that, apart from a vague suggestion that it might be possible to find the money by pursuing tax evaders, there was no indication of where the £3 billion needed to provide uprating in line with inflation—assuming the Government’s forecasts are correct—could be found. That is deeply irresponsible and it is particularly irresponsible of an Opposition who will not say what they would do in government. In other words, while it is not their responsibility, their line is “You should spend the money”, but when it might be their responsibility, they are not prepared to say what they would do. That is completely dishonest politics.
We have a dangerous position in our country, partly caused by the present Government constantly harping on about how they have reduced the deficit by a quarter. According to a poll carried out by ITN and a separate poll by the Centre for Policy Studies, which may not be quite so objective, when asked the question, “Do you think by the end of this Parliament the national debt will have gone up by £600 billion, be just the same, or will have gone down by £600 billion?” only 6% got the answer correct: that it will have gone up by £600 billion. So here we are, living in a country where we have to make difficult decisions—this Bill is an example of having to make difficult decisions—and where the vast majority of people believe that the Government are cutting debt, when in fact all the Government are doing is reducing the amount by which the debt is increasing. I will wager that when we have a debate at the end of this Parliament and come the next election, the Opposition will pursue the same kind of irresponsible tactics which we see in this amendment. They will say, “The Government were elected to reduce the debt, but the debt has gone up by 50%. If we had been in government, it would have been different”. That is the politics of it.
Let us look at it from the point of view of people on low incomes—working or non-working—faced with inflation. If we follow the prescriptions contained in this amendment, the consequence will be that the pound will sink still further. The consequence of the pound sinking still further is that the energy and fuel costs that the noble Lord, Lord McKenzie, spoke of will go up. So how does it help people who are struggling to say “Your benefits will go up by inflation” if at the same time you pursue policies which will result in higher inflation and higher debt and leave an even bigger problem to solve at the end of the day, which will be solved on the backs of the poor?
The noble Lord said that the Government are handing out a tax-free benefit to the very rich. I remind him that when his party were in government, people on very high incomes were paying less in marginal rates of tax than they are now. I also remind him that the effect of cutting the top rate of tax from 50% to 45% will be, as has been proved over and over again in countries around the globe, that the revenue to the Treasury will go up. Although the noble Lord and his party quite rightly point to the excesses in the City arising from bonuses, and so on, they seem to forget that 52% of those obscene bonuses come back in tax and national insurance. Actually, it is more, because there is an employers’ contribution of 12%, so 64% of those bonuses come back to the Treasury in revenues.
The name of the game here is to increase revenues to the Treasury. Then we will be in a position to do something about welfare. We are now in this difficult position and my noble friend is having to take this painful legislation through the House. The Opposition should recognise that that is a consequence of their period in government. The noble Baroness shakes her head. While they were in government, welfare benefits went up by 60% in real terms.
Lord Forsyth of Drumlean
Yes, the noble Baroness, Lady Hollis, makes the point that a large percentage went to pensioners, but I do not hear from the opposition Front Bench a cry that we should cut the benefits to pensioners to avoid this position. The very fact that she says that from a sedentary position indicates that she accepts that.
Whatever the merits of how the money was distributed, it went up by 60%. One pound in every £4 which this Government are spending—by the way, that is money which we have not got because we are having to borrow £150 billion every year to make that expenditure—is going to welfare. To argue that it is not necessary to constrain welfare expenditure in those circumstances is, frankly, totally irresponsible. It is the worst kind of politics.
The noble Lord seeks to present people on this side of the House as uncaring and unconcerned about the poor whereas, actually, if you are concerned about people who are hard up, you want to make sure that the costs of living for them and the stoppages in their pay packet are reduced to as low a level as possible. If we follow those prescriptions of continuing to spend money we have not got, of continuing to pay more in welfare than people are gaining in increased incomes in the private sector, that is the road to Carey Street and to undermining our whole welfare system of support.
The truth is that while Labour was in office, it was paying tax credits to people on up to £50,000 a year. It was a policy deliberately designed to create a client state, and it was a policy funded on the back of a bubble created by holding down interest rates. It was irresponsible economics and it was irresponsible public expenditure. A responsible Government, faced with the windfall tax revenues that they had, would have put some aside for a rainy day. Now we find ourselves with a huge, exploded welfare budget and difficult decisions that need to be taken.
I hope that the House will reject the amendment which, while we all appreciate the sentiment, would actually do down those who are hardest up in our society and having the most difficulty. The noble Baroness shakes her head. It is the consequence of spending money which we did not have.
Lord Harris of Haringey
My Lords, I hesitate to give the noble Lord a lesson in economics, but the problem that the Government currently face is a complete absence of growth. Further cuts in welfare benefits will make that worse. One thing that you can say for certain is that the people on the lowest incomes will spend that money and that that money will then feed into the economy, therefore doing something about the growth problem that the Government have exacerbated by what they have done in the past few years.
Lord Forsyth of Drumlean
I do not think that was a lesson in economics but a lesson in magic. If that is the case, why do we not just double welfare benefits? People will spend even more, the economy will grow and everything will be fine. The noble Lord nods his head in agreement. As an individual or as a household, you cannot continue to spend more than you earn without getting into the kind of problems that we have seen among people who have taken out payday loans.
This is the payday loan approach to government. You have a big debt, so you take out another one. You pay a higher rate of interest on it but you hope that somehow you will be able to pay it back. In the end you are able to pay only the interest. At the moment the Government are printing money to fund their expenditure requirements. That is quantitative easing. In 1997 the Bank of England held no government bonds. Now it holds 27% of the entire bonds in issue. When interest rates rise, those bonds will fall in value. How will the difference in value be made up? That will be a cost for the taxpayer. Our level of borrowing now, which will have gone up by 50% by the end of this Parliament, will have to be financed and that will come out of the future welfare budget.
The noble Lord is describing a way of robbing our children of their living standards and creating a bigger problem for the next generation to meet the needs of those who are most vulnerable. This is a way of making it more expensive to create the safety net that we all support. This is not a lesson in economics but in the kind of fantasy approach to politics that got us into this position in the first place. That is why the Government are right to persevere with this legislation. Indeed, they have been very reasonable in their approach. They have tried to protect the most vulnerable and have agreed to increase welfare payments by 1%. This is extraordinary, given that we have an economy that is not growing at all.
Lord Forsyth of Drumlean
The noble Lord seems to think that the reason why the economy is not growing is that the state is not large enough. How big does he want to the state to be? It is already taking nearly 50% of everything created by the Government and spending it, and that is not enough because they have to borrow on top of that.
If levels of taxation are high, which they are, and levels of regulation are high, we will not get the growth that is required. We need to constrain public expenditure to make room for the private sector to create wealth. Once we have a bigger cake, everyone can have a bigger slice, but if we try to proceed in this way we will end up with a smaller cake and those dependent on welfare benefits will be cruelly cheated. They will find their living standards destroyed by inflation, higher costs and the inability of the Government to finance the kind of programmes that Members opposite are prepared to say now that they would support, although they are not prepared to say so at a general election.
Lord King of Bridgwater
My Lords, I agree with a particular point that my noble friend has made and would like to add that the Bill has come forward on an especially interesting day. I refer to Cyprus. The warning is on the packet. There has been a certain amount of calm around, as though we had come through all our problems and were moving steadily forward into calm waters, and as though the eurozone was secure. The financial markets, with the euro increasing in value, may have had that illusion. However, it has all been blown away. I have not heard any recent news; I do not know whether there has been a decision yet about what Cyprus will do. We should remember that, at the moment, there is a very real risk. Clearly, people have been caught in Cyprus. If Portugal, Spain and Italy decide that this will be the European practice, people there may find that their savings and funds in their banks are not as secure as they had been assured they were. After all, everyone thought that there was a clear undertaking that below a certain level, around €100,000, their own bank accounts were at no risk. If that changes, we face a very serious situation.
There is complacency around, as I picked up from an article today by the chief economist of HSBC, as though with just a bit of going forward and a bit more luck we will be back on the old growth train and in the business that we were in before. What has been exposed is that over many years we have been living on borrowed money, on a construction boom in the financial services area and on public expenditure. Now that those have to be constrained, suddenly people are turning around and saying, “How, as a country, are we going to earn our living in future?”. We are finding that we have slipped in the leagues. In one of our most successful areas of overseas earnings, defence expenditure, we have now slipped a place and China has overtaken us. China is now taking away a number of the markets that our manufacturers used to serve extremely well. It is said that we hope to sell Typhoon to Oman, the UAE and one or two other countries, but the point has been made that its successor will be made in America, and that will be the end of one of our most successful overseas earnings. When you see where we earn our living in the world, we are not in a happy place.
That is why I very much agree with my noble friend Lord Forsyth. All of us in this House would like to say, “Let’s increase benefits. Let’s deal with all the hard cases and see how we can give people more money”. Look at the situation in Ireland, where benefits have been cut by, I think, 10%. There has been talk of cuts today but in fact we are taking about how big an increase the Government should impose, not an absolute cut in the amount. Other countries in Europe are cutting by 6%, 10% or 12% the actual amount that people are getting—what hardship that must represent.
This is not a pleasant speech to make. It is much more popular to say, “Let’s have some more benefit”. I say this against a background of a new situation that has suddenly come upon us: if this House—the unelected House of Lords—decides today to cut right through one of the decisions made as part of the prudent financial planning to find our way out of the problems that we are in, and if that triggers a loss of credibility in our national approach and the Government’s approach to tackling those serious problems, it will really be a problem for people on benefits if there is a run and we then find that the low interest rates that the Government have enjoyed for their substantial borrowing no longer apply.
I agree with my noble friend on this point. There is an illusion that somehow we are reducing our debt. We are not; we are reducing the rate at which the debt is increasing. One of the blessings that we have had is that at least we have been able to borrow at an extremely low rate because we had some credibility. If the House of Lords today kicks away one of the planks that help to shore up the credibility of a Government who have a plan to try to deal with our problems, and if those international interest rates are then demanded of the Government and the country when we try to borrow money, the problems that we will incur for all our people could be vastly greater. Look at the tragedies that exist now, such as the unemployment rates in Spain, which is 50% in certain age groups.
We have held things together so that we have a lower unemployment rate than the eurozone countries. There is so much that we have to hang on to. This is a dangerous time. I say seriously to your Lordships: do not tamper at this stage with this very difficult situation, at a time when we are least able to face it and when it could quite seriously endanger our whole economic structure. I do not think that people understand what a mess the world is in at present. There is a huge amount of complacency around. We are not by any means out of the woods yet, and it is our duty to ensure that we hold firm.
I intend to support my right honourable friend Iain Duncan Smith, whose commitment to this area I think we all admire enormously. He is doing the best that he can. He is agreeing to an increase in benefits for the most deserving people in this country, but not as large an increase as they might have hoped to see. That is the only realistic approach that can be taken at this time.
The Lord Bishop of Leicester
My Lords, I have lent my name in support of this amendment, and I am happy to speak in support of it.
This debate is about who should bear the greatest weight of the burden imposed by the Government’s need to reduce debt. I hope that the noble Lords, Lord King and Lord Forsyth, might consider accepting an invitation from me to come to the city of Leicester to explain to our local Child Poverty Commission why it is in the interests of children in poverty that they should become poorer at the moment because that will serve the national interest regarding debt, and that this House is working in their interests by reducing the uprating of their income to 1%, however much inflation rises. They might accept an invitation to explain that also to the unemployed and to voluntary associations in Leicester, which anticipate a tsunami of difficulties such as homelessness and dependence on food banks. They can come to listen to the response to this Bill from those who are dependent on benefits through no choice of their own, who can explain what that is like and how much harder it will get in the years ahead.
If the purpose of this Bill is to control welfare costs, this is not the right way to go about it. The key to reducing the benefit bill is to change the circumstances that lead many people to need benefits, such as the absence of job opportunities, too much short-term, low-paid work, the shortage of affordable housing, and expensive, patchy childcare. We should be focusing on those issues, not cutting benefits in real terms, which simply creates hardship without addressing the underlying issues.
This Bill is both unnecessary and ill conceived. It will harm the most vulnerable in our society and do nothing to promote work incentives. I have heard nothing at Second Reading, in Committee or today to make me change my view that this Bill ideologically shrinks the welfare state regardless of desperate need. Nor does it change my view that we are heading for a US-style welfare system that is dependent on food banks and hostels. We know that we can do better than this, we must do better than this, and we should amend the Bill.
Lord Deben
My Lords, I do not think that anyone could claim that I was other than at the wet end of the Conservative Party. I am perfectly prepared to say that. However, I have to speak after the right reverend Prelate because he has expressed exactly what the problem with Britain is: we are to spend money that we do not have on people who are in need, at a rate we cannot afford. That is not at all a Christian comment. In the end, we have to live within our means. For those of us who were brought up in the difficulties of a poorly paid Anglican parsonage, the first lesson that we learnt was to spend within our means.
I disagree with my noble friend Lord Forsyth, who said that the previous Government were not responsible. They are responsible, because they spent the money that was there and which could now be available for what we need. We were put in this position by the party opposite because it had the best inheritance of any Government, but it spent it and borrowed on top of it. I cannot find a single speech from any right reverend Prelate from that time that warns the Government of the dangers of spending money that they did not have, borrowed in a way that could not be repaid.
Lord German
My Lords, in his speech moving the amendment, the noble Lord, Lord McKenzie, made it perfectly clear that it would break the Government’s policy proposal. There was no indication given of how much the benefit bill should rise, though the noble Lord, Lord McKenzie, indicated his preference. However, that is not what is in front of the House. If the amendment were to be passed there would be no proposal as to how much it should rise: 0.5%, 1.5%, 2%, 3% or whatever. Neither does the amendment offer any solutions: it does not offer any ameliorations, it does not seek any exemptions. However, Her Majesty’s Opposition say no to a 1% cap on working-age benefits, yet support a 1% cap on public sector workers’ pay. It is quite strange. I sometimes wonder whether we are living in a parallel universe where the economy is healthy, where there have not been any fundamental economic shocks and where Cypriots can get all their money out of their banks.
However, it is not like that and the Bill is not set in the sort of financial vacuum that some Members seem to think it is. I accept that borrowing is higher than it ought to be, though I wish it were less. I know that we have had to borrow in order to maintain the essence of our welfare state and I agree that growth is critical. However, in these tough times the Government have to take difficult decisions. These decisions are, no doubt, uncomfortable but it could have been worse. As I said at Second Reading, there were lots of things on the table for discussion which could have made this a much tougher prospect for us. As it stands, this is our biggest budget—the budget where we spend £1 in every £4 of government money—and, despite all previous efforts, it is still growing as a proportion of total government spend. Therefore, no matter what we may think, this budget has to make its contribution to helping to put our finances back on a sound footing.
Yesterday, there was a debate in the Moses Room in which the Government proposed a £2.545 billion reduction in the overall welfare spend for 2013-14. Her Majesty’s Opposition rejected this as “vicious” and “contemptible”. Today, we have before us in this Bill a budget proposal of £3.7 billion for the two years following, and that is also rejected by Her Majesty’s Opposition. Therefore, £6.245 billion of savings have been rejected in two days. Yesterday—I have not heard it yet today—I heard a vague assertion about tax avoidance, but it is my understanding that this Government are spending far more on tax avoidance than the previous Government did and putting far more effort into it. When she replies, perhaps the Minister can tell us how much success the Government have had compared with the previous Government.
However, we are talking about £6.245 billion of savings and, in return, the Opposition are offering a tax rise. I refer to the issue of the 50% or 45% rate, which at Second Reading the Minister stated the OBR said would raise £100 million. If you slice that £100 million per annum off the total in cuts which have been rejected over the past two days, that means that there is still £6 billion to find, just to round up the figures. Therefore, we should reject these amendments because they offer no solutions beyond borrowing even more, raising taxes significantly or making deep cuts elsewhere in government expenditure, putting the burden of raising the money to repay it on my children and grandchildren.
This Bill would, in the end, save more than £3 billion a year. In their final year, the previous Government were spending £4 for every £3 they raised from the people of this country in tax. In comparison, this Bill saves £3 billion, but that should be compared with the last year of the Labour Government, when they were borrowing £3 billion a week. This is not a comfortable position in which we find ourselves and I would prefer it not to be happening. I share the aspiration for growth and I want to see our country back on track again. However, as the International Monetary Fund said in its World Economic Outlook last October, Governments need to create the right conditions for growth. It said:
“To anchor market expectations, policymakers need to specify adequately detailed medium-term plans for lowering debt ratios, which must be backed by binding legislation”.
That is what the Bill proposes today and that is what the amendment just does not do. As we cannot get an answer to whether higher taxes, lower spending or borrowing alternatives—or a combination of the three—is being proposed, I have no hesitation whatever in recommending to my noble friends on the Liberal Democrat Benches that these amendments, should the Opposition put them to a vote, should be rejected.
Lord Bates
My Lords, the noble Lord, Lord German, referred to the Opposition’s support for the cap on salary increases at 1%. I rise because I came across an interview that the shadow Chancellor, Ed Balls, gave when that policy was announced. This policy will impact on people with a salary above £21,000, below the benefit cap. When pressed on the “Today” programme about how he could justify limiting salary increases in the public sector to 1%, he said:
“And if people expect the Labour Party to say ‘We’ll just oppose’, we can’t do that. [It] would be irresponsible because the priority has got to be getting people into jobs rather than people being paid more”.
That is quite an interesting statement for the shadow Chancellor to make because, in my view, it very much reflects the purpose of this Bill and this amendment.
I do not think that my noble friends on the Front Bench have made life easy for themselves by making this a stand-alone Bill. It certainly should not be viewed that way. It needs to be viewed in the context of the introduction of universal credit, which will bring about benefits of £168 a month to 3 million families. That, because of the wage incentives and the attractiveness of work, will lead to an estimated 300,000 more people finding their way into employment. We need to be very clear that, in all of these measures, whether it be raising tax thresholds, universal credit or this Bill today, we are saying that the best route out of poverty is undoubtedly work.
The scale of the challenge we have in doing that is quite immense. Prior to the recession, unemployment in this country was around 1.62 million. It rose very sharply and when the party opposite left office the rate was 2.49 million. It continued on a trajectory up to 2.68 million. However, it has started to fall and has been coming down quite steadily for a few months and is now down to 2.5 million. The figures show that there are 1 million extra private sector jobs, and that is to be welcomed. Benefit changes that encourage growth and help people find their way into employment are surely things we ought to support.
It would also be nice to ask some of those who supported this amendment where they were last year when benefits were increased by 5.2% and salaries for the lowest paid went up by 1.7%. Where were their voices then? What is so compassionate about paying child benefit to people earning more than £50,000 or letting people earning up to £70,000 receive tax credits? We need to change the configuration so it is always in the interests of people to work and then we need to work to ensure that the jobs are there.
How do we create the jobs for that to happen? Clearly we need to get public spending under control so we can raise tax thresholds for individual workers and reduce corporation tax thresholds. We know that that creates employment the world over. That is why unemployment in this country is falling while in so many other countries it is rising. I understand the points that have been made quite seriously and the concerns that have been raised, but they are looking at this in isolation and, placed in context, this is undoubtedly a measure that in the years to come will reduce the levels of poverty in this country.
Baroness Stowell of Beeston
My Lords, there have been some very powerful speeches in this debate. I am very grateful to all my noble friends for their contributions and for laying out so clearly and eloquently the economic case for this Bill and for what we seek to achieve. As they have been so clear, I will not repeat much of what they have said. However, I will start by making clear to your Lordships’ House that the amendments before us would, in simple terms, remove the commitment to a 1% uprating from the Bill. The noble Lord, Lord McKenzie, said in Committee:
“We fully intend these amendments to undermine and negate the purpose of the Bill”.—[Official Report, 25/2/13; col. 855.]
My noble friend Lord Newby said in reply that these are the sort of amendments that equate to,
“a vote against the Bill at Second Reading”.—[Official Report, 25/2/13; col. 866.].
It is important that we understand what these amendments seek to do.
As has been made clear by my noble friends, these are not decisions that we take lightly. I do not deny that they will have impacts on those who receive the benefits in question or that those impacts will not be easy. However, we have made a conscious decision to protect those benefits which reflect the additional costs that disabled people face, while also protecting pensioners through our commitment to the triple lock.
The right reverend Prelate the Bishop of Leicester is right to highlight those in need and I am glad that he does. It is important that we all remember and are conscious of the people affected by some of these changes. However, I ask him and all noble Lords not to forget that, as part of the Government’s wider reforms, we are prioritising resources towards measures and reforms that support families and help to change lives.
Let me name just a few of those measures. We are expanding early-years education to ensure that children have access to early education and to support parents in work. We are attaching additional funding to disadvantaged pupils through the pupil premium, which will rise to £2.5 billion a year by 2014-15. We have protected the schools and NHS budgets to ensure that these vital services continue to support families. More than £1 billion of investment will go into schools. We are introducing universal credit—a new, radically simpler benefit payment designed to ensure that work pays.
As my noble friend Lord Bates already has acknowledged, this last change is about transforming our welfare system. It will significantly increase the incentive that people have to work. Indeed, we estimate that it will lead to up to 300,000 more people moving into work. It is important that we focus on that point for a moment. As my noble friends have already indicated in their speeches, we must not look at the changes that we are discussing today in isolation; we must see them in the wider context of the changes that the Government are making. They reflect the fact that this Government’s focus is on how to help people off benefits and into work.
We need to be aware of the level of support that people can receive while they are on out-of-work benefits. For many, this is supposed to be a temporary state—an interruption between periods of work. By making the system simpler, by reducing the risks from people moving into work and by making work pay, we can reinforce that temporary nature and ensure that more and more people are moving into work. That is what we are seeking to achieve through universal credit and, as I have said, I ask noble Lords to bear these wider changes in mind when considering this Bill and all the amendments that we will debate today.
This Bill is a short-term change, made at a desperately difficult time, as we seek to rebalance the public finances. However, in our other reforms we have made a huge commitment to the long term, a commitment to changing lives through helping people back to work. Although we still have challenges in the labour market, the fact is that more people are moving into work already. Unemployment is falling. Private sector employment is up by more than 1 million since the election and the number of people employed is at its highest level ever.
We are continuing to provide for a 1% increase in these benefit rates. As my noble friends have said, this will mean that the value falls in real terms, which is not a decision that we take lightly, but it is an increase and we must compare this, as some of my noble friends already have, with what is happening elsewhere. Ireland has cut unemployment benefit by 4% a year for two years since 2010. Portugal has cut unemployment benefit by 6%. Spain has cut payments to people who are unemployed for more than six months by 10%. Let me remind noble Lords that the UK’s deficit in 2010 was larger—I repeat, larger—than the latter two countries. I am not saying that that justifies the measures we are discussing today; they are justified by the need to rebalance the public finances. However, it is, I hope, a reminder that these are very difficult times. The actions this Government have taken and continue to take to reduce the deficit are helping to secure economic recovery, but there are still tough decisions to make.
While this group of amendments seeks in simple terms to remove the 1% figure from the Bill, as many of my noble friends have already pointed out, it does not suggest an alternative. It should be noted that if the amendments before us were to pass, they would make it possible for the Government to increase benefits by any amount that they wanted in the years in question, without reference to prices or any specified factors, including uprating by less than 1%. Let us assume that the intention would be to upgrade in line with CPI. That would mean that the £3 billion in savings from the Bill would not be delivered. I appreciate that the decisions we have made in the Bill are not easy. We never claimed that they were. However, they are absolutely necessary. This was made clear by my noble friends, who made contributions that were much more powerful than I could have made.
Let us not forget that the central purpose of the Bill is to set out clear plans on uprating that deliver significant and vital savings that will help us on the road to economic recovery, along which we simply must travel if we are to preserve for the future the kinds of things that we value and from which we will all benefit: a stable economy, a growing labour market and opportunities for the next generation.
When the noble Lord, Lord McKenzie, moved the amendment, he said that all the amendments in the group were linked and were consequential one on another. Perhaps it is premature for me to make this point, but I will make it clear that in the Government’s view the amendments are not consequential one on another. If Amendment 1 is agreed, the Government will not oppose Amendment 5. However, we will oppose Amendment 7. It is important to make that clear.
I have made the case for seeing these changes in a wider context, and my noble friends have made powerful contributions about the wider economic context. It is clear that the changes, while painful, are necessary. Therefore I urge the noble Lord to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I start by thanking the noble Lord, Lord Low, for his support for the amendments in this group. He made the very important point that we are potentially moving into a period of greater inflation. This point was made last week by the FT, which talked about the risks of stagflation in this country. I also thank the right reverend Prelate the Bishop of Leicester for his support. He posed the key question: how will making these people poorer help the national interest? What we heard from noble Lords who oppose the amendment did not help us on that point.
I say to the Minister and to the noble Lord, Lord Bates, who prayed in aid universal credit, that it would be good to know that universal credit is on track because from everything we hear it is not. Even with universal credit as proposed, we know that something like 1.8 million people will have their benefits from work reduced in comparison to their current position.
I stress that the amendment challenges the locking-in over a three-year period of the restrictions on uprating. Uprating by less than the rate of inflation is a real-terms cut. We should recognise that it is a cut in people’s benefits. The fundamental proposition in the amendment is that these things should be looked at in the normal way on an annual basis by reference to what is happening to prices.
The noble Lord, Lord King, and the Minister said that other countries are cutting benefits. Benefits have been cut in this country, too. Council tax benefit, housing benefit, DLA, ESA and tax credits have been cut by something like £18 billion to date.
Lord Newby
Will the noble Lord confirm that no benefits in this country have been cut in cash terms, as they have widely been in the rest of Europe?
Lord McKenzie of Luton
Housing benefit is one such benefit. Council tax benefit has been dumped on local authorities with a 10% restriction on funding, which means that people’s support will be cut in cash terms. That is absolutely happening.
I say to the noble Lords, Lord King and Lord Forsyth, that it seemed that the mention of Cyprus was meant to lead us to a conclusion that bears no relation to reality. We are not dealing with a situation here that would take us anywhere close to the situation in Cyprus. We are talking about restrictions on uprating which, on the Government’s own figures, would amount to something like £1.9 billion.
Lord King of Bridgwater
The Government’s ability even to pay this level of benefit will partly depend on our ability to borrow enough money at low enough rates to continue the policy. Is the noble Lord not aware that there is a big shiver going through the eurozone about the financial situation? It has suddenly come back into the headlines. If it was thought at this moment that the Government were going to deviate from their previously planned approach—if it was voted down by your Lordships’ House—it would have a serious effect. Then the problems faced by some young people and people in poverty at the present time, as spoken to by the right reverend Prelate, could be seriously aggravated. Our job is to try to make the best we can of a very difficult situation.
Lord McKenzie of Luton
My Lords, of course we are aware of what is going on in Europe, and I shall come on to issues of borrowing in a moment. We are talking here about an amount that is less than 0.1% of total government expenditure. The noble Lord cannot seriously be arguing that taking our position rather than that of the Government would bring the whole edifice crashing down. That simply does not reflect reality.
The problem that the Government have is that because they have failed to deliver growth in the economy there is a real risk—this is what is happening—that their austerity programme is making debt worse. This was again a point made in a very powerful article last week in the FT.
We have heard a great deal about the Labour Government’s record. When the Labour Government left office the economy was growing again and it was the austerity measures which choked off that growth. As to the Labour Government’s record on debt, before the international crisis hit, our debt levels were the second lowest in the G7, lower than when we came into office in 1997, I believe.
Lord Forsyth of Drumlean
I am following the noble Lord’s argument very carefully. If he is saying that we can get growth again by spending money uprating benefits in line with inflation, why will he not therefore make the commitment that a Labour Government would do that?
Lord McKenzie of Luton
My Lords, I make the commitment that we should review on the usual basis at each uprating period. No Government or Opposition immediately prior to a general election are going to pre-empt the programme they would have. The noble Lord knows that full well. He is making a silly political point.
There is a real risk that by cutting back you make the debt situation worse. It depends upon the multiplier. There have been some recent studies which suggest that it is made worse because the multiplier effect would mean that if you did not cut back you could create growth greater than the saving you are seeking to make. We shall hear from the Chancellor tomorrow about his view on borrowing for capital spend, for example. The relative merits of that depend upon the multiplier effect.
Ultimately, the argument in favour of the Government’s Bill as it stands is that it is locking in an unknown. You cannot know in year two or indeed the next year what the rate of inflation will be and you cannot know, therefore, the extent of the cut you are visiting on the poorest people in our country. That is what we object to in this Bill.
We could go on for ever in an economic debate, but I think it is time to test the opinion of the House.
The Lord Bishop of Ripon and Leeds
My Lords, I will also speak to the other amendments in this group. Amendments 2 and 8 are paving amendments for a new clause to protect child benefits and child tax credits from the effects of this Bill. The substantive amendment to which they refer is Amendment 11. This follows extensive discussion in Committee, and is designed to halt the disproportionately negative effects of the Bill on children and their welfare. Amendments 13, 14 and 15 are consequential, and no doubt the noble Baroness, Lady Meacher, will speak to her Amendment 14A.
The Bill affects 30% of all households. Of those with dependent children, it affects 87%. Of lone-parent households, it affects 95%. Conspicuously, 11.5 million children suffer as a result of this Bill. This is in addition to the effects that our austerity measures have already had on children. In 2012, the Institute for Fiscal Studies estimated that there would indeed be a reduction of 0.9% in real-terms income for all households from 2010 to 2016. For a couple with two children, that fall will already, without this Bill, be 4.2%: equivalent to a fall of £215 per year for a couple without children, or £1,250 for a couple with two children. This Bill adds to that discrepancy, and it is that which cannot be fair.
It is true that we need particular concern for those in or on the verge of poverty. This Bill fails that test, too. For the poorest 20% of households, the IFS estimates to which I have referred suggest that the reduction in income is 7% from 2010 to 2016. In addition, 60% of the Bill’s savings come from those in the poorest third of our population, and 3% from those in the richest third. This will mean that, on the Government’s estimates, 200,000 more children will be in poverty, half of them in working families.
That in itself must make us pause to see what other ways there are to make the £0.9 billion savings which the child-related parts of this Bill are designed to produce in 2015-16. It is not for us today to declare what those alternatives should be. However, they do exist. Whether through reducing tax reliefs on pension contributions for the wealthy, or through introducing national insurance contributions on employer pension contributions, there are a number of different ways in which we could explore raising this money, which would not affect children in the ways in which this Bill does. We need to find a way for the burden of our fiscal challenges, so well described in the previous debate, to fall on those who, like me and many Members of this House, can afford to meet it, rather on than those who cannot. The noble Lord, Lord Newby, spoke in Committee of the importance of reviving the economy for the benefit of the future. That is absolutely right, but not at the expense of children’s needs now.
The major thrust of these amendments is to defend the nine out of 10 children in this country who are affected by the Bill. This effect is cumulative; it comes on top of the reductions already made. It has been argued that since many people are currently seeing wage increases of only 1%, benefits should also rise by only 1%. However, this Bill is an additional blow for those with children whose wages have increased by only 1%. Not only are their wages declining but, by this Bill, provision for their children will decline, too. These benefits affect those in work just as much as those who are not in work. None of the benefits referred to in these amendments is an out-of-work benefit. This is a transfer of the burden from all of us to those with children, and that increased burden on children cannot be right.
I continue to be particularly concerned at the continued gradual erosion of child benefit. The 1% cap comes after three years of the freezing of child benefit, so it is a cap on a figure that has already been reduced. From 2011 to 2015, the increase in child benefit will be 2%, rather than the estimated 16% of CPI over that period. Therefore, a couple with three children with one earner, such as a corporal in the Army, will lose £552 a year by 2015. A couple—one a childminder, let us say, earning £240 a week and the other a postal worker on £395 a week—with two children will lose £3.51 a week by 2015.
Child benefit has long been a crucial part of the support for families in our culture. That is particularly so for those on low wages. For very many families, child benefit is explicitly set aside to provide for children. Parents will struggle by making savings on their own lifestyle, sometimes even by going without meals themselves, but they will ensure that the child benefit that they receive is spent on their children. We owe it to the next generation to ensure that this element of our society, our children, is not disadvantaged, and certainly not disadvantaged by so much more than households without children.
In addition, child benefit plays a particular role in support of those in work because it acts as an earnings disregard in the calculation of housing and council tax benefits. Any reduction in child benefit is therefore a disincentive to returning to work. For a two-child family in work, on a low income and living in rented accommodation, the cut between 2010 and 2015 is not only the £4.80 a week in child benefit but an extra £4.10 in lost benefits. This working family on a low income therefore loses almost £9 a week.
I need to refer briefly to the third element in this package, that of the lower disability addition of universal credit. That is already being reduced from its current £57 a week to £28 a week under universal credit. Now it will be reduced further by this Bill. It seems extraordinary to reduce a benefit before it has even come into effect, especially when it provides for the needs of disabled children and their extra financial demands. These children need our support so they can live full and creative lives, and therefore benefit not just themselves but all of us. Children already contribute more than their fair share to our austerity burden. This Bill adds to their burden. I hope that we shall at least remove this extra pressure on them by accepting this amendment. I beg to move.
Baroness Sherlock
My Lords, I thank the right reverend Prelate the Bishop of Ripon and Leeds for introducing this amendment. I also congratulate him on continuing to press his concerns in this area after failing to receive any comfort at earlier stages of the Bill. I congratulate the Lords spiritual in general for being willing to stand up for what they believe, despite the inevitable volley of artillery that came their way the moment they dared to raise their heads above the cathedral parapet. It may be that we have them to thank for the extended interest in welfare benefits, which is much more than we see normally. I am delighted to see it.
As we have heard, this amendment would remove a number of children’s benefits and credits from the scope of the Bill. Since we on these Benches wish to remove all benefits and tax credits from the scope of the Bill, we are pleased to support it. We have heard at different points in the passage of this Bill that it has a disproportionate impact on families and children. The Government’s impact assessment shows that two-thirds of households affected are families with children. We also know that the Bill will have a direct effect on child poverty in Britain. Ministers have previously announced—as the right reverend Prelate noted—that this Bill alone will put a further 200,000 children into relative poverty.
In Committee, I asked the Minister to tell the Committee what the impact would be on the three other poverty measures in the Child Poverty Act. I got nothing back at all. Now the Child Poverty Action Group has dragged some information from the Government by means of the Freedom of Information Act—although it should not have had to use a FOI request to get it. I would have hoped the Minister could have told us the information when I asked for it in Committee. The Government have not yet offered a narrative assessment even of measures, for example, of material deprivation. However, they were forced to admit what would happen to the number of children in absolute poverty. In response to that FOI request, the DWP admitted for the first time that it estimates that around 200,000 more children in Britain will be pushed into absolute poverty by this uprating policy.
This is a shocking figure, which reveals the depth of what is wrong with this policy. It also removes the Government’s defence that the problem is with the relative poverty measure, rather than with the impact on children themselves. On the back of those figures, some new analysis for the Child Poverty Action Group by Landman Economics found that an increase of 600,000 children in absolute poverty is likely between 2010 and 2015, and that is net of any improvements as a result of universal credit.
As we have heard at many stages of this Bill, too many parents go without to ensure that they can heat their homes and feed and clothe their children. As the costs of food and energy have soared, more parents spend more of their money on these basic costs. Yet vital support that they depend upon is being cut in real terms in order to hand a tax cut to the very richest. It is not only the Church of England that has come out against these priorities; Archbishop Peter Smith, vice-president of the Catholic Bishops’ Conference of England and Wales stated:
“It is unjustifiable that the poorest children, who often have no other safety net, will be left bearing the brunt of economic difficulties as a result of significant real-term cuts to social security”.
The archbishop noted something that many of us know: that like many other charities across the country, Catholic agencies supporting parents find themselves ever more confronted with parents unable to afford even basic essentials, such as healthy meals or warm clothes for their children. That would be exacerbated by this Bill.
The real shame is that so many of those families have no alternative way of reducing that problem. Most victims of this Bill are working families. The parents are already doing the right thing; they are out working. One of the real disappointments about the debates we have had is the failure to acknowledge that, far from this being something that penalises only people who are not working, it is in fact the very same people who have had below-inflation or no pay increases and who have struggled repeatedly to get out, get work and get hours, who are hit by these cuts to tax and benefit support.
The Bill is a completely inappropriate way to address the uprating of essential state support for families. We already have perfectly good mechanisms to uprate annually in the light of inflation and prevailing economic conditions. These are poor choices for the Government to be making. The families who will be hit are not responsible for the failure of the Government to get the economy growing again. They are just doing their best to manage in difficult times, but the Government are planning to cut the value of the help that they get from the state to fund a tax cut for people earning £1 million a year. We should not be doing this, and we on these Benches are pleased and proud to support the amendment.
Lord Forsyth of Drumlean
My Lords, this amendment is simply a variation on the previous amendment. In the previous debate, we went through the arguments for why it is economically impossible to sustain inflation-related increases. I do not propose to repeat the arguments, but this amendment would result in exactly the same position, given that the exceptions proposed by the right reverend Prelate constitute a large part of the Bill. It is just a way of saying that, if one was going to make the same savings, one would have to make bigger reductions in the increases for everyone else, or else one would have to find the money. Once again, the right reverend Prelate did not tell us where the money would come from.
Lord Forsyth of Drumlean
I am happy to give way to him if he wants to explain where the money would come from, but I suspect not. A large part of his flock of the clergy will be recipients of benefits because of the wages that they are paid by the Church of England. Everyone is in the same boat here. The noble Baroness, Lady Sherlock, argues that somehow it is possible to find money which we have not got and that she is proud to support the amendment because of the reduction in the top rate of tax paid by those who she describes as millionaires. I remind her that those people are paying 5% more in tax than they did under her Government. I also remind her that the effect of cutting those high rates of tax has been to increase revenue and therefore to make it possible to do more in that respect.
Surely, by now, we have learnt that lesson. It is a cheap political argument to say that it is possible to create money out of thin air and that this Government want to protect the rich at the expense of the poor. If we want to help the poor, we have to get the economy growing again. The noble Baroness says that the economy is not growing because of this Government. The economy is not growing because of the burden of debt which she and her fellow members of the Labour Party ran up.
Lord McKenzie of Luton
The noble Lord keeps going on about debt. Is it not right that, because of the failures of the noble Lord’s Government, the lack of growth has meant that borrowing is now about £200 billion more than they planned when they came into being?
Lord Forsyth of Drumlean
I am utterly amazed by the noble Lord. He is now criticising us for spending £200 billion more than we planned, when part of that money is being used to provide the 1% uplift in benefits. Talk about wanting to have it both ways. On the one hand, he is criticising the Government for not borrowing enough, but now he is criticising the Government for borrowing more than we planned. The reason why we are having to borrow more than we planned is because of all the commitments made by the previous Government without a clue as to how they would fund them. That includes commitments on welfare. Welfare spending accounts for £1 in every £4 that the Government spend.
On the basis of the noble Lord’s criticism that we are spending £200 billion more, that would mean that £50 billion is going on welfare. In all the time that I have been involved in both Houses of Parliament, I have never seen a more irresponsible Opposition. It is not good enough for the right reverend Prelate to come to tell us that we need to do more to help working families with young children without explaining from where the money is to come or addressing the main problem.
Lord Griffiths of Burry Port
My Lords, I have taken no part in this debate so far. Has the noble Lord not suggested somewhere where the money can come from; namely, that people like us could pay it? If children would benefit I am prepared to pay it. Is he and are we?
Lord Forsyth of Drumlean
My Lords, I am grateful to the noble Lord, Lord Griffiths of Burry Port. I did not think that he was a bishop and I was addressing my remarks to the Bishops’ Bench, but I say to him that the burden of tax has gone up substantially, and the reductions in government expenditure have so far been quite limited. We are discussing not a cut in government expenditure but limiting the increase in government expenditure to 1%.
I have had several goes at persuading the right reverend Prelate to indicate where the money for his proposal might come from. One possibility might be for people to put wages up. If the Church of England were to put up its clergy’s wages, less would be claimed in benefits and more would be available for others, but that is not a practical proposition for the church because the church, like the Government, is faced with a financial crisis and has to live within its means. What is good for the church is good for the Government and is good for particular families.
The most irresponsible part of the arguments that have come from the Bishops’ Bench this afternoon is about what happens if inflation is allowed to let rip. I fear that that may be about to happen as we continue to print money and borrow. As the noble Lord, Lord McKenzie, pointed out, we are borrowing far more than we planned to meet our commitments and to be fair to the most vulnerable. What happens when inflation takes off? I remember the 1970s, when inflation was running at very high levels, at 20% and more, and interest rates were at 15% and more. Who suffered? Children, the poorest and families suffered. There is nothing Governments can do to protect them once inflation takes off.
We do not want to go back to that kind of society. It tried to cope with inflation by protecting people through indexation, but it was unable to keep up with it and the result was, as the then Labour Prime Minister put it so eloquently:
“Inflation is the father and mother of unemployment”.
Jim Callaghan said:
“We used to think that you could spend your way out of a recession, and now we know that you cannot”.
Those words were said as the Labour Government left in 1979, leaving another Tory Government to clean up the mess, just as we are doing now.
The right reverend Prelate’s amendment of course carries great emotional impact. We would all like to see working families with children have a higher standard of living, but the way to do that is to create the wealth that enables us to support those families and enables them to get the levels of income and employment that they need. You do not do it by shaving the edges of the currency, allowing inflation to take off and committing those families’ children as adults to a debt burden that, frankly, will be impossible to pay off. They would be paying the interest for the rest of their lives, and that would disadvantage their children. In rejecting this amendment, as I hope she will, my noble friend is speaking not just for our children but for our grandchildren, who are entitled to expect responsible government in these straitened times.
Lord Bates
My Lords, I support what my noble friend Lord Forsyth said. When the right reverend Prelate comes to respond to the debate, I would be grateful if he would comment on the following point. He made great play, and I do not underestimate this, of the effect and impact of limiting the uprating of child benefit and child benefits generally to 1%. According to Appendix 3 of the helpful Library note on the Bill, regarding the child tax credit element, in 2011-12 the child element of child tax credit increased by 11.1%, a significant sum. That followed significant increases of 13% in 2008-09 and 12.5% in 2004-05. If one is to argue that limiting that increase now to 1% would have a significant effect, if you take it as a snapshot, that may be the case, but if one looks over time, one has to factor in those significantly higher-than-inflation increases that have occurred in the child tax credit element in the past.
One of the problems with trading figures with regard to child poverty is that you get some curious results. One of the most notable is that in 2010 there were 300,000 fewer people in poverty because the recession had caused the median income to drop—in other words, children were said to have been pulled out of poverty not because anything had changed in their lives but because the rest of society had got poorer. We have to be clear about what we are arguing for when we talk about the interests of children, which of course should be paramount.
I turn again to a theme in the debate on the previous amendment: one cannot just take this in isolation. One needs to look at what the Prime Minister has announced today on childcare, for example, which will make a significant difference to people by enabling them to move into employment. One needs to look at the pupil premium or the raising of tax thresholds, which means that someone on the minimum wage has seen their tax bill halved under this Government. One has to look at these things in the round. Unlike the Opposition, we have ring-fenced the budget for the National Health Service, on which people significantly depend. Again, in the round, we need to get this absolutely correct.
I will react to the charge that somehow there is an easy pot at the other end of the income scale to be tapped into. As a result of this Government’s actions, the richest pay more tax on capital gains, more stamp duty on their homes and more tax on their pensions and are less able to evade tax than was the case before. These factors need to be borne in mind in the broad reach of these changes that I know when taken in cold, clinical isolation, one year at a time, without reference to trends over time, may allow one to draw one conclusion but should be placed in the proper context. I seem to recall from my youth the good theological concept of placing individual verses in context in order to understand their meaning, and one might think it was a good idea to place this one measure in the broader context in order to understand what the Government are doing to bring people out of child poverty, which we accept is significant. Other measures, such as limiting the proposed increases in fuel duty—another factor that has a big impact on the poorest in society, particularly those with families—and caps on rail fares and on council tax, all seek to address the issues.
We also need to recognise that child poverty has a wider set of causes than cash payment alone, and in many ways, we are focusing here on cash payment on its own. We need to place in context the fact that the children’s opportunities and their likelihood of being in poverty are affected primarily by the extent to which they live in a workless household. Therefore, all our efforts to get people into work should be welcome.
Lord Newby
My Lords, the whole House can agree on one thing. We all want to support families with children and ensure that children in this country have the opportunity to fulfil their potential. We have been discussing how we attempt to achieve that in the extremely difficult economic times in which we live.
I will spare noble Lords my speaking notes on the economic context, as we have already had a full debate on that. The only point I make in passing, in respect of the Opposition’s policies on deficit reduction, is that they passed legislation saying that by the forthcoming financial year it would be illegal not to have halved the deficit. It is therefore particularly surprising that they seem to have had no plan at the time to do it and have given no indication since of how they might have done it.
However, I must remind noble Lords again of the baseline from which these savings are being made. Tax credit expenditure increased by 340% under the previous Government compared to the benefits they replaced. Eligibility for tax credits was extended to nine out of 10 families with children and tax credits and child benefit accounted for £42 billion this year, which is over 40% of working-age welfare expenditure.
I will give noble Lords one other piece of context. The latest OECD figures show that of all the developed countries the UK, along with Ireland, spends the highest proportion of its national income on family benefits. We are not a country that takes these things lightly or a country that has not given very high priority to supporting families. We believe that that is absolutely a right priority and we support families with children as much as we can in the circumstances. Child benefit and tax credits exist to do that. However, as we have said, we have to focus resources where they are needed most.
A number of noble Lords, including the right reverend Prelate the Bishop of Leicester and the noble Lord, Lord Bates, have mentioned that this Bill is only one of a large number of measures that the Government are taking which affect families with children, in particular poor families with children. The noble Lord, Lord Bates, referred to the pupil premium, which will cost the Government £2.5 billion by next year. This will be worth £900 per disadvantaged child—and that is £900 in hard times. We are extending flexible support for early education. Since 2010, all three and four year-olds have been entitled to 15 hours of free childcare and we are extending this to 260,000 disadvantaged two year-olds from this year. This is immensely important to these families and it will be worth around £2,900 a year for the poorest families who benefit—£2,900 extra per family. We have found these hugely significant sums of money by making reductions elsewhere, because we place such a large priority on the poorest families.
As the noble Lord, Lord Bates, said, we protected the schools budget and the NHS budget. We are spending £1.2 billion on capital expenditure in schools. However, as the noble Lord, Lord Forsyth, has said, one of the most important things we have to do is leave our children and grandchildren with a lack of deficit or a deficit that they can manage. The savings in the Bill attempt to begin to do that.
The first group of amendments would remove child benefit, child tax credit and the lower rate of disabled child addition in universal credit from the Bill. This would remove nearly half the savings from the Bill, which is around £900 million in 2015-16. I should like to make a further point on universal credit, although it has not been the subject of much debate in this group of amendments. I am sure we will be dealing with this important issue in more detail when we debate Amendment 3, to which my noble friend Lady Stowell will respond. Suffice it to say that part of the principle underlying the decisions we have taken on disability and universal credit is the need for simplicity and our desire to target support to the most severely disabled children.
The right reverend Prelate the Bishop of Ripon and Leeds referred to child benefit and expressed his concern that it had been frozen or taken away from the highest earners. What he did not say was that the Government have increased child tax credit by £180—more than inflation—to more than cover, in the first few years, the reduction in child benefit. Taking child benefit and child tax credit together, we have tilted the expenditure away from affluent families and put more of the cash into poorer ones. I think that is a sensible priority and I am surprised that he appears not to agree.
A number of noble Lords have talked about the impact of the Bill on child poverty. As has been pointed out, the Bill is forecast to increase the number of children in absolute poverty by 200,000 and the number in relative poverty by 200,000. For the avoidance of doubt and in answer to the point made by the noble Baroness, Lady Sherlock, my noble friend Lady Stowell wrote to the noble Lord, Lord McKenzie, copied to other noble Lords, on 13 March. Her letter contained the figure about absolute poverty so, far from seeking to avoid mentioning it, we chose to circulate it. I am not saying that absolute poverty is not something we should be extremely concerned about but the term does not mean what most people think of as absolute poverty. The definition of absolute poverty is 60% of the median income in 2010-11 uprated to take account of inflation. The 200,000 children mentioned in respect of absolute poverty are very largely the same as the 200,000 who are mentioned in terms of relative poverty. You certainly cannot add those two numbers together.
At previous stages of the Bill, we have discussed the definition of child poverty and the importance of tackling child poverty. We know that if we focus on the relative income line we get some very odd results. We have pointed out previously that in 2010 300,000 fewer children were said to have moved out of poverty, not because anything changed in their lives but because the rest of society got poorer. The estimate on the impact of this Bill does not take account of policies which would cause child poverty figures to move in the other direction, such as universal credit which is expected to lift up to 250,000 children out of poverty, depending on the effect of the minimum income floor. We take the issues of cash and poverty, as currently defined, very seriously, but we also think that we need a broader definition of child poverty. That is why the Government are currently consulting on a wider definition. As I set out two weeks ago, and repeat today, this Government remain committed to eradicating child poverty. We believe that income will remain an important part of any new measure on child poverty, but focusing our resources on benefits alone is not enough. We have to take action to tackle the root causes of poverty, some of which I have described today.
I also take this opportunity to mention, as an example of what the Government are doing to support children and families in work with children, the announcement made today by the Prime Minister and Deputy Prime Minister concerning increasing eligibility for support to five times as many families as is currently the case through a new tax-free childcare scheme. Families where the parents are in work will be able to claim 20% of their childcare costs—equal to the basic rate of income tax—up to £6,000. The scheme will be phased in from the autumn of 2015. More than 2.5 million hard-working families will be eligible to benefit from these new proposals, compared with existing schemes offered by fewer than 5% of employers. Families on tax credits will be eligible to receive support for 70% of their childcare costs, and we have already committed an additional £200 million in universal credit, helping 100,000 more working families.
Today’s announcement of that further £200 million of additional support in universal credit will provide working families with the equivalent of 85% of their childcare costs where the lone parent or both parents pay income tax. That additional support will improve incentives to work and ensure that it is worth while for low and middle-income parents to work up to full-time hours. It will be phased in from April 2016 when childcare support moves from tax credits to universal credit. Together, these proposals will help to ensure that working families are not held back by the costs of childcare. They will remove disincentives to work for many mothers and provide flexibility and support for businesses to generate employment.
I hope I have been able to provide some reassurance that, although we are taking difficult decisions on welfare, they are necessary decisions. We are prioritising limited resources so that they go to measures that help families with children as well as those who aspire to work hard and get on. I therefore ask the right reverend Prelate to withdraw his amendment.
The Lord Bishop of Ripon and Leeds
My Lords, I am grateful to all those who have taken part in this debate and, indeed, to the Minister for his extended response to the discussion. I am grateful to the noble Baroness, Lady Sherlock, for her support and for the information that 200,000 children will be in absolute poverty as a result of the Bill. We have also recently had information from the Trussell Trust about the number of children who are now being fed through food banks.
I thank the noble Lord, Lord Forsyth, for his contribution, but this is not simply a variation on the previous amendment. For one thing, it would cost only half as much at £0.9 billion, rather than the £2 billion to £3 billion which has been mentioned in relation to the whole Bill.
There have been a number of suggestions—not just from me but from a collection of other people—as to how this money could be raised. At an earlier stage in our discussions on the Bill, I made suggestions and the noble Lord, Lord Newby, responded that they were indeed possibilities but not ones that fitted in with the Government’s current priorities. That is a perfectly fair response but it is not fair to say that taxing the winter fuel allowance or dealing differently with things such as free television licences, tax relief on pension contributions, national insurance contributions or employer pension costs and so on are not possible. They are possibilities. I was not quite sure what—
Lord Forsyth of Drumlean
I am most grateful to the right reverend Prelate. My criticism was that he did not say which of these he wanted to do. If the church’s position is that it wants to tax winter fuel benefits, please say so and say that the money from that could be used for this purpose. As for increasing taxes on pension contributions, he may not have noticed but the Government have already done that.
Baroness Hollis of Heigham
My Lords, I would have thought that the right reverend Prelate’s point was that we are facing political choices, not ones of financial necessity. We can make choices here and we are choosing instead to go after poor children.
The Lord Bishop of Ripon and Leeds
I thank the noble Lord and the noble Baroness for the answers they have given each other on this. It really is not my duty, as a Prelate in this House, to give the church’s view on exactly how the money should be raised. It is a task to say that there are alternatives and, indeed, to make suggestions as to how the money might be raised. There is no policy on exactly how it should be and I do not think that it would be for me to try to produce the solution to what we are doing. There are alternatives. I do not believe that they should be placed on children.
Lord Deben
I wonder whether the right reverend Prelate will understand this point. He is making specific remarks as to how we should spend the money. Is it not reasonable to say that he should take the responsibility for making specific suggestions as to how we should save the money?
The Lord Bishop of Ripon and Leeds
My Lords, I have made a number of specific suggestions as to ways in which this money could be provided from elsewhere. My basic point continues to be that it should not be raised by putting the pressure on children and their families. I am grateful to the Government—and to the noble Lord, Lord Bates, for raising the matter—for the child tax credit increase of £180 in 2011. It has to be said that that was, at the time, only the first of two announced upratings. The second, of £110, never happened because of the economic state in which we find ourselves. That above-inflation increase in child tax credit did something to ameliorate the pressure put on those in most difficulty, particularly children, by various other provisions made over the past few years.
I am grateful, too, for the announcements that the Minister has made this afternoon. However, one could say that if 20% of childcare is to be covered, that still means that those receiving that childcare need to find the other 80% in order to get the 20%. I absolutely agree with the Minister when he speaks of the need to tackle root causes and to make sure that more people are in work. I commend any efforts of any Government which lead in that direction.
However, these amendments are about children and we have moved much more widely in our discussion of them. I am still stuck with the statistic that the decrease in income for a couple without children will be 0.9% over the five years, but for a couple with two children it will be 4.2%. It is the differential between those two figures that we need to tackle. I recognise that attempts have been made to tackle them but they have been stubbornly unsuccessful so far. In view of the various things that the Government do for children—I certainly accept that they have a concern for children—I am sorry that they cannot accept the amendment. In the light of that, I wish to test the opinion of the House.
Lord Low of Dalston
“(1A) Any mandatory 1% up-rating stipulated in subsection (1) shall not apply—
(a) to any components of the employment and support allowance (including personal allowances);(b) to sums specified in regulations under section 10(3) of the Welfare Reform Act 2012 in respect of an amount to be included under section 10(2) of that Act.”
Lord Low of Dalston
My Lords, Amendment 3 would remove from the 1% uprating cap all aspects of the employment and support allowance, including the personal allowance component, the support group component for those in the support group and the work-related activity group component for those placed in the work-related activity group, which I may shorten to the WRAG as “the work-related activity group” is a bit of a mouthful and I do not wish to take up too much of your Lordships’ time—no more time, at any rate, than I need to. Paragraph (b) of the amendment would also remove the child disability addition under universal credit from the cap.
The Government have given the impression that disabled people are protected from the restriction of benefit increases to 1%, but this is not the case. Some disability benefits are protected—notably disability living allowance—but that does not mean that disabled people are protected from the restrictions introduced by the Bill as a whole. The only disabled people who are protected are those who receive no benefits other than the disability living allowance. The impact assessment makes clear that households where someone describes themselves as disabled are more likely to be affected than those where there is not a person who describes themselves as disabled: 34% of households as against 27%.
Even some benefits specifically targeted at disabled people are not protected. This applies particularly to employment and support allowance. ESA is paid at two different levels according to whether claimants are placed in the support group, meaning that their impairment or condition is such that they are not expected to look for work, or the WRAG. Both groups receive a personal allowance of £71 a week but those in the support group receive a support group component which is paid at a higher rate than the comparable component paid to those in the WRAG.
The Government have given the impression that those in the support group are protected from the 1% uprating cap but, in truth, only their support group component of £34 a week is protected: rather less than one-third of their benefit. This means overall that disabled people in the support group will see their ESA payments rise by only 1.4% rather than by inflation, not a lot better than if increases in the whole of their benefit were capped at 1%. As a result, a disabled person in the support group will be £62.76 a year worse off. Capping increases in their benefit at 1% will mean that households receiving ESA in the work-related activity group will be £87.65 a year worse off.
However, it is worse than this. Although some disability benefits and some disability elements and components may be protected, disabled people may lose out overall because of the complex interaction of different benefits and components. Disabled people do not only receive disability benefits; they have children and rent houses, and so they are not immune from restrictions in the uprating of children’s benefits, housing benefit and so on.
If a claimant in the support group does not have any other income, they are also likely to be entitled to housing benefit and council tax benefit. If they have children, they will also be entitled to child benefit and child tax credit. It can be seen that protecting the support group component protects only a small proportion of their overall benefit. For example, a lone parent who is in the support group and has two children will have lost £18 a week or almost £1,000 per year by 2015 compared with their position in 2011, simply due to uprating changes.
The amendment is essential if the Government are to fulfil their pledge to protect disabled people from the 1% uprating cap. A third of disabled people in the UK were found to be living in poverty before the global economic crisis. Disabled people routinely experience higher living costs associated with their disability, on things such as equipment, personal assistance and special diets, for example. In Committee, the Minister said that ESA for those in the WRAG group is intended to be a short-term benefit:
“Those who are placed in the work-related activity group are there because they have been found able to prepare for work”.—[Official Report, 25/2/13; col. 881.]
However, that does not make sense in terms of work incentives. People’s impairments often make it very difficult for them to work. Where this is not the case or the difficulties can be overcome, discriminatory attitudes in the workplace can present insurmountable barriers. In the current state of the economy, there just are not the jobs.
Finally, as we know, the work programme, by which the Government set such store, is just not working. In Committee, the Minister questioned the rationale for including the personal allowance in the amendment and for not subjecting it to the 1% cap. She said that treating the personal allowance differently from that in other parts of the benefit system would add an element of complexity and undermine the coherence of the system as a whole. That strikes me as a comparatively technical objection. If that is her principal concern, I ask her to look at the position again with me before Third Reading to see if we cannot find a way of achieving the purpose of the amendment without giving rise to the technical difficulties to which the Minister pointed.
The second limb of the amendment would remove the 1% uprating cap from the lower child disability addition under universal credit. The right reverend Prelate also spoke about that. This part of the amendment is particularly necessary given that rates of support for children in this 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 this support in half to just £28 a week. This change will affect all families with a disabled child unless the child is receiving the high-rate care component of the DLA or is registered blind.
In Committee, I spoke about the evidence in the Holes in the Safety Net review from the noble Baroness, Lady Grey-Thompson, of the impact of universal credit on disabled people and their families. I will not repeat the detail now but, in a word, it was that the effects would be disastrous. The Institute for Fiscal Studies estimates a growth in the number of children living in poverty of 400,000 between 2011 and 2015 and 800,000 by 2020. The Minister said in Committee that we cannot set too much store by such predictions because we do not know what direction government policy will take. But government policy seems to follow only a one-way direction of travel in this regard. We do know that the Government intend to take a further £10 billion out of welfare. The upshot of that can be only one thing: more child poverty. This measure can only serve to increase that; indeed, the Government have acknowledged that it will add 200,000 to the numbers of children in poverty—100,000 of them in working households.
The Children’s Society estimates that the cost of removing child disability addition from the cap would be just £2.4 million in 2014-15 and £4.2 million in 2015-16. In the scale of public expenditure, that is a trifling sum and I really hope that the Government see their way to thinking again on this aspect of my amendment at least.
The case for the amendment is compelling. It seeks to do no more than the Government already claim to have done by exempting from the cap a particularly vulnerable group among those who receive benefits—disabled people—and I hope that the House will support it. I beg to move.
Lord Brooke of Sutton Mandeville
My Lords, my noble friend Lord Deben is not in the Chamber, although I had a word with him outside. I am not sure that he was fair in asking the right reverend Prelate the Bishop of Ripon where he would find the money on the previous amendment. However, when we get into the guts of this amendment, it would be reasonable to expect the Official Opposition at that stage to explain where they would find it.
My memory goes back to Grand Committee on a couple of Bills in the final two years of the previous Government. They were held in the Moses Room; one was on housing and the other was on planning. I recall that the second one occurred in the very first week of the then Governor of the Bank of England—who is still the governor—who expressed anxiety that a recession was now becoming a real possibility. I asked why the Government, in their explanation of the text of the respective Bills on housing and planning, thought that future conditions would be like conditions in the past. I was told by both the Minister and knowledgeable government Back-Benchers in Grand Committee that I was not to worry my head about these things. There was no acceptance that the economic ice was beginning to thin and, specifically, I was told that the recession had not yet happened.
It was only later that I recalled a new year message in the 1950s or 1960s in the Observer by its essayist Paul Jennings in his weekly article. He explained that the new year had come in over a weekend and he had therefore had the opportunity to use the weekend to explore in his diary what the publishers thought he needed to know in the coming year, which they had not supplied in the previous one. It transpired that the answer was the thickness of ice. He explained that he was now in a position to tell the Observer’s readers that you required half an inch of ice to sustain a duck and an inch of ice to sustain an infant, going up in a series of categories until you reached 16 inches for a County-class locomotive and 24 inches for a regiment of foot. It was on reaching the statistic for a regiment of foot that Mr Jennings began to wonder how they knew. He imagined a scene in the Crimea when not much else was happening. The same young Mr Hemmings who took part in the film “The Charge of the Light Brigade” was riding up to Lord Raglan with the news that they had just lost another battalion of the Grenadiers.
If I move from that analogy to the departure of the previous Government, I recall that Mr Byrne, the Chief Secretary to the Treasury, left a note for his successor saying that there was no more money. As a message, that seems to me as daunting for a new Chief Secretary as the news to Lord Raglan that he had lost a battalion of the Grenadiers during what must have been the Crimean War. It is therefore reasonable to ask the Official Opposition where they would find the money for their support for this amendment. Indeed, perhaps the Official Opposition might express some regret for their mistakes in government and explain to the Bench of Bishops what went wrong in their economic policies.
In the same context as the intervention by the noble Lord, Lord Griffiths, I shall personally look forward in the hope that we will be able to come back to that subject on a future amendment, in which I would much enjoy joining with him.
Lord McKenzie of Luton
My Lords, we have added our names to this amendment moved so comprehensively by the noble Lord, Lord Low. It requires that all the components of ESA—the personal allowance and the additional component for those in the work-related activity group, as well as those in the support group—are taken outside the 1% cap on uprating. As we have heard, the amendment rightly includes provision for children to be made under universal credit, although it remains to be seen how much progress the faltering universal credit will have made by the time the Bill is spent.
As we have argued on previous amendments, it is the vulnerable who are most affected by the Bill. This is particularly so for those on ESA for two specific reasons. They are much less able to increase their income through work and their living costs are generally higher. This is particularly so for those in the support group, who are furthest from the labour market, but also for those in the WRAG. It is worth remembering that there is a rigorous testing process for people who are unable to work due to ill health or disability. We know that the gateway to this benefit is tough. Although the process involving Atos has been improved, there are still many who end up on ESA only after a successful appeal.
Although individuals in the WRAG are closer to the labour market through their conditionality or otherwise, the route to paid work is not easy, as the noble Lord, Lord Low, said. We know that the Work Programme has not covered itself in glory in this regard. As things currently stand, individuals in the WRAG will lose something like £191 a year by 2015 as a result of this Bill. Those in the support group will fare little better in terms of income, being some £138 a year worse off by that date.
Macmillan has specifically drawn our attention to how these measures will affect people with cancer. Its estimate is that in excess of 40,000 cancer patients will be claiming ESA by 2015 with the presumption that they will be placed in the support group. Macmillan particularly stresses the impact of rising energy bills on this group. Like the noble Lord, Lord Low, I remind the Secretary of State that he should fulfil his commitment to make sure that people on ESA are being fully protected.
The noble Lord, Lord Brooke, challenged me to say where we think the money should come from. I thought I made it clear in the first debate that we think the Government should not proceed with the tax cut that is proposed for those earning £150,000 a year. The proposed tax cut from 50% to 45% would be a source of revenue. The Government say that this will not produce very much, but that assumes that people can get away with planning their income to defeat the thrust of that change. If the Government are alert to that, they could garner that revenue and we believe they should.
There is a wider argument about the extent of debt that can be sustained. The point I come back to is that the greater the failure of the Government in their economic policy—the greater the paucity or lack of growth in the economy—the more it will be necessary for the Government to borrow. If the Government can get growth back into the economy, that begins to ease the debt burden. There is another source there.
I also remind the noble Lord that these amendments take ESA out of the fixed uprating—the collar that this Bill puts around them—so a judgment would have to be made for each uprating period. Traditionally and rightly that has been an increase by the rate of inflation of one sort of another. That is what these amendments are doing. They are not technically, of themselves, proposing a different rate, although I made it clear that we support uprating by inflation for the year that we are about to enter.
It is clear from that combination of reasons that this proposal can and should be supported. It is not constrained by the economic position of the Government. It is the Government that have got themselves into a bind because they have failed to generate growth in the economy.
Lord King of Bridgwater
As the noble Lord understands some of the complexities of this matter which many others may find more difficult, what does he assess the cost of this amendment would be over the next few years?
Lord McKenzie of Luton
The total cost is certainly less than that proposed for the totality of the arrangements in the Bill. It would be a portion of that. The number of people in the support group is something like 200,000 and there are around 300,000 in the WRAG. If you assumed you were looking at a difference between uprating by inflation and uprating by 1%, that would be the calculation. I stress that this amendment is saying that you simply take ESA out of the 1% collar, and it leaves open the question of whether uprating next year and the year after should be by whatever inflation is then. However, this amendment does not put a figure on it.
Lord King of Bridgwater
The noble Lord is a signatory to this amendment. He is speaking for the Official Opposition and it obviously represents a cost. I wonder what that cost is. I do not see how the House can vote if it is not clear what extra costs are envisaged. If he is suggesting that there is no extra cost at all, I do not imagine the Government will find great difficulty with the amendment. Presumably there is a cost; I wonder if he knows the figure.
Lord McKenzie of Luton
It depends on what the alternative proposition would be. I have tried to stress that this amendment takes ESA outside this 1% fixed uprating—outside that collar—so we would have to judge the impact at each uprating period thereafter. A judgment would have to be made in the light of inflation and general economic circumstances at that point in time. That seems a very clear proposition, is it not? It is certainly a basis on which we are very happy to support this amendment.
Baroness Stowell of Beeston
My Lords, all of us want to protect those who are furthest from the labour market or who have additional costs because of disability, and I think that all of us who have contributed to this debate so far and all of us in the Chamber today share that view. There is no disagreement among us on that.
That is what the Government are doing. We have not included key disability benefits, including disability living allowance and attendance allowance in the 1% annual uprating decision in the Bill. Nor have we included the disability premiums in working age benefits or the disability elements of tax credits in the Bill. We have also excluded the support group component of employment and support allowance and the higher of the universal credit disabled child additions. All these benefits will continue to be uprated by CPI. We have protected them because they help support those who are furthest from the labour market or who have additional costs because of disability.
In one of the exchanges that has just taken place, the noble Lord, Lord McKenzie, referred to cancer sufferers and made the point that we want to make sure that we provide them with the support that they need. It is worth reminding noble Lords that earlier this year, in January in fact, we introduced changes that will mean that more people with cancer will now qualify for the support group, which is protected, whereas before they might have been placed in the work-related activity group. We have taken on board the concerns in that area. They were valid concerns, and we were glad to be able to act on them.
Lord Low of Dalston
I am grateful to all those who have spoken and to the Minister for her full reply. A fair amount of the discussion has been taken up with where we are going to get the money. It is certainly not my job to answer for the Opposition as to where they would get the money from, but I would say here that without wanting to open up a general discussion again on the management of the economy, especially at this stage of the debate, I do take the view that you can borrow your way out of a recession. This is a paradox, of course, and it is not clear how it is the case at first blush. However, running a national economy, where one person’s expenditure cut is a cut in someone else’s income, is different from running a domestic economy.
There is a clear difference of view here with those on the Benches to my left. I am not an economist but I would ask people to accept that there is a very respectable and quite populous strand of opinion that supports the proposition that I have just enunciated. It is not so self-evidently barmy, as was suggested earlier in the debate, to say that the Government would be able to meet the cost of these amendments by borrowing more. There is respectable opinion to support that. To those who say that the Government are already more in debt and borrowing more than they would like to be, I simply say that there is no reason why they should not borrow a bit more. If the amount of extra borrowing that they are engaging in is still not achieving lift-off for the economy, they just have to borrow a bit more until they do. I know that that will not commend itself to this side of the House, but it is a respectable point of view and it is the position that I take.
We have been asked about the cost of the amendment. As the noble Lord, Lord McKenzie, has said quite clearly, that obviously depends on a range of factors. One of those factors is certainly the rate of inflation. Therefore, it cannot be precisely quantified. In any case, the question about what we would do to get the extra money is answered by what I have already said in response to the Minister. A more pertinent question than how one would find the money is when one would find the money. The answer of the noble Lord, Lord McKenzie—a year at a time—is perfectly reasonable. Labour is prepared to say that it would uprate at the rate of inflation in the first year that we are talking about.
The only other thing I want to say in response to the Minister is that the Government have essentially been peddling a myth when they say that they are protecting disabled people in this Welfare Benefits Up-rating Bill. They are only partially doing so. The Government ought to be straight with the British people. I repeat: they are only partially protecting disabled people. It is because I believe that the Government should deliver on their pledge to fully protect disabled people with this benefits uprating measure that I have brought this amendment to the House. It is also why I ask the House to support it, and why I would like to test the opinion of the House.
Lord Kirkwood of Kirkhope
“( ) Subsection (1) does not apply in relation to a tax year if, on the review in that tax year under section 150(1) of the Social Security Administration Act 1992, the Secretary of State determines that the general level of prices, measured by the Consumer Price Index, for Great Britain has increased by 3% or more over the period under review.”
Lord Kirkwood of Kirkhope
My Lords, my Amendments 4 and 9 in this group take us into much lighter territory. I hope that the noble Lord, Lord Forsyth of Drumlean, will understand and relax, because the purpose of the amendments is not to attack the savings which it is the principal purpose of the Bill to achieve but only to protect the position of benefit recipients should the Office for Budget Responsibility’s estimates for inflation be exceeded by 3%, which is the figure that I have chosen for the purposes of the amendments.
The amendments are different from those which have gone before because, apart from anything else, they are much less susceptible to attack on grounds of financial privilege. A problem that I had with some of the earlier amendments, and I share some of the analysis, was that they were prone to attack on those grounds. I think that those of us who participated in consideration during the passage of the Welfare Reform Act last year felt that financial privilege was being used rather rashly in the other place, but the purpose of this House is to persuade the House of Commons perhaps to think again about some of the legislation that comes to us.
Amendment 4 would simply disapply the 1% limit on benefit uprating in the event of inflation reaching 3%. I would be interested in the view on this of the noble Lord, Lord Forsyth, because he knows a lot more about it than do. Judging where inflation will come out in September 2013 and September 2014 is an inexact science. We will learn tomorrow what the Office for Budget Responsibility and the Chancellor think about the situation, but the two years covered in the Bill, September 2013-14 and September 2014-15, are considered to be facing inflation increases of 2.6% and 2.2% respectively. The purpose of the amendment is to ask what happens if those estimates are wrong. They are forecasts; they are not scientifically worked through. We have therefore to ask ourselves what we do as a legislature if inflation reaches 3%.
Change in the real-terms value of benefits is very sensitive to inflationary increases. I have said that the Office for Budget Responsibility’s baseline is 2.6% for September 2013 and 2.2% for September 2014. That reduces the real value of benefits by 4% and produces a saving of £3 billion; that is already agreed and is in the Bill. However, checking Library figures, I am advised that if inflation exceeds Office for Budget Responsibility estimates by 1% in the two years covered by the Bill, it will reduce the real value of benefits in the hands of claimants by 6% and result in a windfall saving to the Treasury not of £3 billion, which is what the deficit reduction programme is looking for, but of £5.1 billion. You can multiply the figures. If the OBR baseline is exceeded by 2%, that reduces the real value of benefits by 8% and produces a windfall saving for the Treasury of £7.2 billion. I have no way of knowing whether any of that will happen. All I seek with this amendment is to ask what the Government will do if it does.
The financial context is slightly worrying and has been getting worse since the coalition Government promulgated this policy some months ago. We will learn more about this in the Budget tomorrow. The Budget may well be—and some of us will argue that it should be—looking to promote growth and loosen some of the constraints on inflation that the Bank of England’s Monetary Policy Committee is required to oversee. However, we have a Bank Governor-designate in Mr Mark Carney, who comes with a reputation of being prepared to live with higher levels of inflation. If that happens, then the 3% figure in the amendment may well be breached sooner rather than later. In some of the earlier debates the noble Lord, Lord McKenzie, rightly adverted to the fact that the markets are already pricing in higher inflation in the short term over the two years that the Bill covers.
As a legislature, we now face an increasing risk of inflation for these two financial years; I put it no higher than that. We very much need to take that into account. The CPI calculation of inflation is a national figure, worked out with average figures on a statistical basis, but someone said to me the other day that childcare costs have gone up 6%, as anybody who has studied the incidence of rising costs on low-income families will know. That is a long way in excess of the general CPI rates that we face, as with food prices, rents and energy prices, particularly for the low-income families that I am concerned about.
I am grateful to my noble friend for the considerable discussion that we had about this. He was generous in considering what I said, but it would be helpful if the House knew what the Government would do if the 3% inflation figure was breached. I am reasonably content that there are overriding powers in the Social Security Acts, but I do not think there are in the Tax Credits Acts; I might be wrong about that. What happens if something untoward happens to inflation and we end up in the 2014 and 2015 fiscal years with something unexpected suddenly coming over the horizon? Surely some of these reductions in the value of benefits that I have alluded to would be quite unconscionable as a windfall increase to the Treasury’s coffers in a way that is not intended, as I understand it, but may well happen by mistake?
Lord Forsyth of Drumlean
I have looked carefully at my noble friend’s amendment and listened to his speech with care, but he does not provide the remedy in the amendment. It simply says that the uprating limited to 1% is cancelled if inflation reaches 3%. Would he indicate why he chose 3% and what the remedy would be? If he specifies a remedy, then we are back into the argument about cost.
Lord Kirkwood of Kirkhope
The remedy would simply be that if 3% was breached, then the clauses in the Bill fall and there would be the default position of an annual uprating process. It would be at the Secretary of State’s discretion with the usual provisions of Section 150 of the Social Security Administration Act 1992. It would be taken year by year and would say that inflation was forging ahead in an unforeseen way. For myself, I would listen to an argument that said that we should stick to 1% on costs shown in those circumstances, but if 3% was breached we would go back to the status quo. That does not have a cost at all.
The noble Lord, Lord Forsyth, and I have been doing government uprating statements for 30 years together and I have never known a Government not get an uprating statement that they wanted if they had a majority. That is what I think would happen in these circumstances. However, the Secretary of State would be obliged to come back and say to both Houses that the circumstances were not what he had anticipated or what the Office of Budget Responsibility had calculated and that therefore there would be a chance for reconsideration. That is all I ask.
In fact, Clause 1(5) and Clause 2(4) of the Bill give the Treasury power to protect itself from the downside. These clauses say that if inflation falls below 1% it will not admit the full 1% uprating and will reserve the right to adjust it. Yet there is no limit to which the Treasury will allow inflation to increase before it comes back and argues its case in Parliament one way or the other. There is a 50:50 chance of this happening. I believe in my heart of hearts that the Government would respond to that. I do not believe it would be at all conscionable to leave 3.5% or 4% inflation with these 1% caps for the two years in this Bill.
We need more than that. We need some inflation-proofing and protection for recipients of benefits in the two years covered by the Bill if inflation races ahead. That is the burden of the argument. It is no more and no less than that. I do not think that it would be attacked on the grounds of financial privilege. It has no direct effect, as I see it, on deficit reduction. I am content that the Government get £3 billion in savings, but not content that they get £5 billion or £7 billion, because that is not what the Bill is designed to do. I argue in this amendment that there is no protection in particular for low-income families. I hope that my noble friend will give me some reassurance about what the Government will do in these eventualities. If he is not prepared to accept this amendment, I may well be tempted to test the opinion of the House. I beg to move.
Baroness Morgan of Drefelin
My Lords, I am not an economist. I declare an interest as chief executive of a cancer research charity. My concerns are similar to those voiced by the noble Lord, Lord Kirkwood. The Bill locks in the 1% and does not contain a very important review provision. I am sure that my amendment is so anodyne that the Minister will say either that it is unnecessary or that he will accept it.
For that reason, I will be brief. It is important once more to challenge the myth that disabled people will be protected from the measures in the Bill when that is so clearly not the case. Let us remember that, by 2015, in excess of 40,000 cancer patients will be claiming ESA. It is the main benefit claimed by cancer patients, as we have already heard. For those cancer patients in the support group, only a proportion, the support component, of what they receive, will be protected, while their core payment will rise by only 1%, as my noble friend Lord Low mentioned.
Overall, cancer patients in the support group will see their ESA payments rise by only 1.4%, rather than by inflation, and Macmillan Cancer Support has estimated that, by 2015, cancer patients will be £138 worse off each year than if they had received the 2.2% rise which could have been expected with the CPI level as was in September 2012. I cite the £138 figure, but I am conscious that we do not yet know the true effect of the Bill. That figure shows how far ESA will fall behind inflation if the consumer prices index were to remain at the September 2012 level of 2.2%. However, it has now risen to 2.7%. If, as we have heard, inflation were to rise to 3% over the next three years, the loss to cancer patients and others in the ESA support group would be even greater. The actual impact on cancer patients and others supported by those payments is just as uncertain as the level of inflation itself.
In its current form, the Bill leaves no flexibility to protect vulnerable groups such as cancer patients if there is a significant rise in inflation over the next three years. For that reason, I support the amendment moved by the noble Lord, Lord Kirkwood. I fully expect the Minister to say that he will accept my amendment or that it is unnecessary because it is a matter of course that there will be a review by the Social Security Advisory Committee if we have such a rise in inflation. I very much look forward to hearing the Minister’s remarks about how the Government aim to continue to protect cancer patients as much as possible.
Lord King of Bridgwater
I should have asked my noble Lord friend Lord Kirkwood, this; he is an expert on uprating. The noble Baroness said that this is an anodyne amendment. I am not an expert on how uprating works, but does her amendment provide that if inflation is above 3%, the Bill does not apply and it will then be up to the Secretary of State to decide what increase he tries to get through both Houses of Parliament, which could in fact be 1%, if the economic situation is as it is? So it does not automatically provide that the current rate of inflation has to be included. Have I got that right?
Baroness Morgan of Drefelin
That is correct. As normal, the House would receive an annual uprating SI, there would be a debate in the normal way and, if the Government of the day wanted to propose a particular uprating, there would be the normal impact assessment. The noble Lord, Lord Kirkwood, may want to clarify his amendment, but my amendment states that if we have a significant increase in inflation, we need the experts to conduct a review to say what will be the impact on benefit recipients.
Baroness Masham of Ilton
My Lords, I have my name to Amendment 12. I support what my noble friend Lady Morgan of Drefelin said.
The Bill could see vulnerable cancer patients and other seriously ill patients losing out on almost £500 per year if inflation rises. That is a great deal of money for people who are not working and who are ill. I hope that the Minister will give some hope that those vulnerable people will not suffer and that he will support this helpful amendment.
Lord Forsyth of Drumlean
The noble Lord, Lord Foulkes, normally cheers when I get up to speak, but not on this occasion, perhaps because we have found something to disagree on.
I must congratulate my noble friend Lord Kirkwood on this very ingenious amendment. I suspect that he started from a position opposed to the Government’s proposals, knowing his long and distinguished record in supporting people on low incomes. I am sure that he would have preferred that the status quo had a rival—
Lord Kirkwood of Kirkhope
Since the noble Lord asked, let me tell him. I am looking him straight in the eye. I have voted for the Government all through this afternoon against my better judgment, but I say this to him: if any further cuts are introduced by the coalition Government for the rest of this Parliament, he can forget any support coming from my direction for the next two years.
Lord Forsyth of Drumlean
The noble Lord and I both have our crosses to bear in the coalition. I am grateful for his confirmation that he does not support the principle. This is just a very clever device to try to get us back to where we started from without making a commitment to spend money. The amendment states that the provisions in the Bill which limit the benefit increases to 1% can be set aside if inflation reaches 3%. That is for very good reasons. The noble Lord argues the case about people on low incomes and the effects of inflation. The noble Baronesses, Lady Morgan and Lady Masham, in their amendment, have highlighted the desperate impact that inflation has on cancer patients who are not working.
The best way to protect those people is to ensure that inflation does not rise to 3%. The idea that it is inevitable that inflation will rise to 3% is deeply damaging.
If the noble Lord, Lord Foulkes, wishes to interrupt, I will be happy to give way, but otherwise I would be grateful if he did not make remarks from a sedentary position, which is distracting me from my argument—which of course, was his intention.
The best way to protect people is not to have inflation. One thing that sets inflation running uncontrollably is people’s expectations of inflation. When the noble Lord makes a speech saying, “I think that inflation is going to be more than 3%”, people hear that and think, in their wage negotiations, “Lord Kirkwood says that it will be more than 3%; the Government say that it will be two and a bit per cent”. Expectations drive the inflation rate, and inflation is devastating for the poorest in our society and for people on fixed incomes.
Therefore, we need to follow a policy that will limit the possibility of large increases in inflation. That is where we have a problem. To do that, we must show that we have control of public expenditure and have plans in place that can be relied on.
If the amendment were accepted, anyone looking at the Government’s plans for financial responsibility over the next two years would say, “They have marked down that social security and benefit payments will be this, but, of course, because of Lord Kirkwood’s amendment we cannot rely on that because if inflation is above that figure, the Secretary of State will need to take a decision”. They will note that he will be taking a decision in the run-up to an election and will therefore draw conclusions about what the pressures on the Secretary of State might be.
The amendment drives a coach and horses through the Government’s finances for anyone looking at whether they can rely on the Government delivering.
Baroness Hollis of Heigham
Can the noble Lord help me? Is he arguing that the best way to protect people against inflation is to have no protection against inflation?
Lord Forsyth of Drumlean
Yes, got it in one. The one thing that we learnt in the 1970s was that indexation, like other palliatives, is absolutely disastrous, because it sets the ball rolling, which gets faster and faster with people chasing inflation. Of course that is exactly what I am arguing.
Baroness Hollis of Heigham
If the noble Lord follows that argument through, is he therefore saying that, should inflation happen, that is just tough luck, and the poor cannot not have the possibility of any protection from the Secretary of State doing what he would now do, which is to consider all the options in the circumstances?
Lord Forsyth of Drumlean
I have the highest regard and respect for the noble Baroness, Lady Hollis. She knows more about social security and understands the issues better than anyone else. I wish that she was on the Front Bench. If she was, she would be putting forward alternative proposals that might be more attractive and meet some of the points that are being considered, but she is not on the Front Bench and there are no alternative proposals.
We have to contain public expenditure not to within our means, because we are spending more than our means; the noble Lord, Lord McKenzie, pointed out that the Government are already borrowing and spending £200 billion more than was planned. I am simply arguing that if we continue like this the pound will continue to sink. The cost of energy, which, as the noble Lord, Lord Kirkwood pointed out, is a major cost for families, will go up. He supports windmills and other forms of energy generation that are the most expensive known to the planet and which are put on people’s bills without their knowledge as a tax and add to the pressure on these families. That is another example of where, if he is worried about poor households, he should abandon his attachment to windmills and other things that are raising energy costs and adding to inflation. The name of the game is to contain inflation by not having daft policies such as windmills and other energy policies. It is to act in a responsible way so that people will not decide that they do not wish to buy government debt, which is already a problem, and will not result in further pressure on the exchange rates.
I am sympathetic to the points that the noble Lord, Lord Kirkwood, has made and with which the noble Baronesses, Lady Morgan and Lady Masham, are concerned in respect of the people who are affected. The problem is that the remedy that they propose would make things much worse. It is not a good place to be. We would prefer not to have started from here, but it was Mr Gordon Brown who put us in this position, ably assisted by the noble Baroness, and we must sort this mess out. Clever as it is, this amendment is a smart attempt to get round the basic purpose of the Bill, which is fundamental to protecting people on low incomes.
Lord Bates
I support the noble Lord, Lord Forsyth, but I want to go one step further. He has dealt incredibly effectively with the measured arguments put forward by my noble friend Lord Kirkwood in Amendment 9, but it does not quite hit the interesting amendment in the names of the noble Baronesses, Lady Morgan and Lady Masham. I want to make a couple of points drawn from the Office for Budget Responsibility report looking at this Bill and the impact assessment.
Front and foremost are two things. The first is the control of inflation and the second is the creation of employment. They will help the poor more than anything else. If we fail to tackle the debt, the cost of borrowing will rise, as my noble friend Lord Forsyth has said. If the cost of borrowing rises, inflation will rise on the back of it. Therefore it follows that tackling the deficit is the best thing that can be done to help the poor. In table 2 on page 6 of its forecast, the OBR estimates that inflation will be: 2.6% in 2013-14; 2.2% in 2014-15; 2% in 2015-16; and 2% in 2016-17 and thereafter. It is clearly assessing that the culmination of the effect of these and other measures being taken is to move us towards a situation in which inflation is on a steadily downward course. That is the OBR’s assessment, which was used as the basis of the 2012 Autumn Budget Statement. As noble Lords have said, we will find out tomorrow where we stand vis-à-vis that.
Other elements need to be taken into account. We have the Low Pay Commission’s report coming up shortly. The Low Pay Commission provides a report that influences the minimum wage. The report was submitted at the end of February. I do not know whether my noble friends on the Front Bench have had sight of that recommendation, but it, too, provides a lock. Despite in previous incarnations being against the minimum wage, the Government have said that they support the minimum wage and have always accepted the recommendations of the Low Pay Commission to increase income as a result. Taking that together with the changes to universal credit that are deemed to be providing additional benefits to people estimated at £168 a month for 3 million families and the likely increase in tax thresholds and their impact on the salaries and incomes of the poorest in our society, it seems fair and reasonable, as the noble Baronesses, Lady Morgan and Lady Masham, have suggested, periodically to undertake a review. Post-implementation reviews normally take place three to five years after implementation.
We are talking about some of the most vulnerable. I believe that the position affecting the poorest in our society will not be as great as some people anticipate and that the situation with the combination of policies that I have outlined will lead to an increase, but as we are not having the annual uprating review, some periodic review of how this is working against projections of inflation and of the impact on the poorest in society would be sensible. I encourage my noble friends on the Front Bench to support it if possible. Should such a review take place, it should not need focus on the one narrow measure that has been the theme of this debate but should assess the wider impact on the poorest in society, taking into account the other measures—the pupil premium, NHS, the lid on fuel increases, the increase in personal allowances, the increase in the national minimum wage et cetera—which we are talking about. With that, I support the noble Baroness, but I am afraid not my noble friend Lord Kirkwood.
Lord McKenzie of Luton
My Lords, let me make it clear that we support each of these amendments. The request in the amendment in the name of the noble Baronesses, Lady Morgan of Drefelin and Lady Masham of Ilton, that there should be a review seems modest and straightforward. If the Government should seek to resist that, or a reasonable and clear alternative, I would be amazed.
The case is the same with the amendment of the noble Lord, Lord Kirkwood. As I understand the proposition, he is saying that should in any year the current expectations of inflation be in excess of 3%, which we currently expect to be the case, the 1% automatic uprating would not apply and there has to be an annual assessment, as happens at the moment. That assessment might lead to a 1% uprating, or to some other form of uprating, but there would not be the automatic application of 1%. Who knows what will happen to inflation? I do not predict that there will be a surge in inflation but, if there were to be, is any level of real cut in the standard of living of poor people acceptable to the Government? Is that what they are saying? They would be if they rejected this amendment.
Lord Forsyth of Drumlean
Would the noble Lord apply the same principle to pay in the public sector?
Lord McKenzie of Luton
We are talking about specific provisions in the Bill about the uprating of benefits. The noble Lord has worked quite hard to differentiate himself from the noble Lord, Lord Kirkwood, and his amendments. The suggestion that somehow having this provision in the Bill will fuel wage inflation across the land, fuel expectations up and down the country and bring the economy to a halt is, frankly, frivolous and a nonsense. The noble Lord knows that full well. He is an experienced parliamentarian and an able debater, but I do not believe that he did himself justice in the way he sought to pick away at the noble Lord’s amendment.
Lord Forsyth of Drumlean
I was asking the noble Lord a straightforward question. He is enunciating the principle that if inflation were at 3% or more, it would be necessary to abandon a position that held the increase in benefits to 1%. I am simply saying that if that is the Opposition’s view, is it also their view in respect of public sector pay? If inflation turned out to be much higher, would the same apply to people working in the public sector? If not, why not?
Lord McKenzie of Luton
My Lords, we are debating a different Bill. If the noble Lord wants to debate a proposition about public sector pay, let us have some propositions and we can consider that. The noble Lord knows full well that he is trying to lead the Opposition in a particular direction.
I come back to the point that the amendment of the noble Lord, Lord Kirkwood, is very straightforward. It just says that an automatic 1% uprating would not apply automatically if inflation reached a certain level. That seems entirely unobjectionable and I cannot see why the Government cannot accept it. If the Government do not accept it, they have to say what level of inflation, what level of real decrease in people’s circumstances, they would find acceptable, because that would be the consequence of rejecting the amendment. This is a very modest proposition. I really am surprised at the trouble that the Government are having with accepting it. I would hope at least that the noble Lord’s colleagues would stick with him on this issue as the arguments that we have heard against it are quite spurious.
Lord Newby
My Lords, the first amendment in this group in the name of my noble friend Lord Kirkwood would mean that the Bill would apply only if inflation was below 3% for the purposes of uprating in that year.
I shall provide a reminder of what the official inflation forecasts currently show. While inflation is forecast to be above target—that is, 2% in the near term—it will fall back towards the target in the medium term. In the final year of the Bill, the current forecasts show that inflation for the purposes of uprating in that year will be 2.2%. That was the view of the Office for Budget Responsibility at the time of the Autumn Statement. The OBR produces independent and authoritative forecasts for the economy and public finances and we take decisions based on them.
However, the OBR is not alone in forecasting that inflation will fall back to target in the medium term. That is also the view of other major economic forecasters. I refer to the IMF, the OECD and the Bank of England. Indeed, the latest assessment of independent forecasters in February was that UK inflation would be 2.2% in the 12 months to quarter 1 of 2014 and in the 12 months to quarter 1 of 2015. That is an average assessment of people who make their living by doing this job.
The noble Lord, Lord Kirkwood, said that he thought there was a 50% chance of inflation being over 3% in the period covered by the Bill. I remind the House that that means a 50% chance that inflation will be over 3% by September 2014, because that is the last point at which the Bill has an effect in terms of benefit uprating. All I can say to my noble friend, for whom I have the greatest regard, is that his view is just not shared by any reputable international or national body that is making forecasts about inflation.
Baroness Hollis of Heigham
In that case, why do the Government have any problem in accepting this amendment?
Lord Newby
I am coming on to that. In fact, I will deal with it now. It is relevant to the point that was made by my noble friend Lord Forsyth. The purpose of the Bill, as we have debated about 20 times since Second Reading, is to give some certainty to the Government’s fiscal plans. The reason we are doing that is that a number of international bodies and rating agencies have said that this has a specific and significant impact on the way that they view the UK’s prospects. Entrenching something in a Bill has the effect of giving a degree of certainty, which is immensely useful with regard to the markets.
As my noble friend Lord Forsyth has said, there seems to be a sense that the markets think that we in the UK are in a very good position and that a little tweak here and there in terms of borrowing will make no difference. That is not the way the markets work. It starts off with a little tweak and then the markets feel that something is going wrong. Once that feeling takes hold, the markets can move very quickly.
As we have debated many times in your Lordships’ House, it does not need much of an increase in inflation to make a huge difference to the Government’s finances and the lives of ordinary people.
Lord McKenzie of Luton
Can the noble Lord tell me how the markets have moved in response to the Government borrowing £200 billion more than originally planned?
Lord Newby
The reason why they have not moved is that the Government have not changed our underlying policy.
The effect of a 1% increase in inflation on someone with a £100,000 mortgage is £1,000. These are big differences and a 1% increase in the interest rate is by no means out of line with the interest rates being paid by a raft of European countries whose borrowing as a percentage of GDP is significantly less than ours. The risk in terms of interest rates is real and present. It is not some airy-fairy possibility that would come into play only if the Government were suddenly to go mad and spend huge amounts of money. It can happen with a relatively small change.
The Government remain committed to low and stable inflation. As we have said umpteen times, it is good for individuals and for business and is a prerequisite for economic prosperity. That is why the Government set the remit for the independent Monetary Policy Committee to target inflation. The Chancellor will set the remit at Budget tomorrow, as usual. I do not know what the remit will be but I know it will not be, to quote my noble friend Lord Kirkwood, to loosen the constraints so that inflation rips. I am confident that the Government’s commitment to low inflation will remain.
My noble friend Lord Kirkwood and the noble Lord, Lord McKenzie, said, “What happens if, contrary to what the Government have said, inflation does rip? Suppose we have a circumstance that we don’t believe is going to happen”. If Governments legislated for every circumstance that they did not believe was going to happen, we would have Bills thousands of pages long. The Government can legislate and act only on the basis of a central assumption of what the future, in respect of the particular area of public policy they are dealing with, is going to be like, and that is what we have done here.
I turn to the issue that many people have faced and in many cases continue to face—real-terms reductions in pay. Inflation risk is something that everyone has to face in everyday life. We have been taking about public servants but let us just talk about them a bit more. Public servants have seen their pay frozen and then increased by 1%. When inflation rose to 5.2% in September 2011, many public servants were in the middle of a pay freeze. The Opposition supported that policy and there was no inflation guarantee within it. This includes, for example, many hard-pressed personal advisers in jobcentres who are on modest incomes and are having to see restraint in their pay in these very tough times. That is the right policy. However, the consequences have been that many out-of-work benefit recipients have seen higher cash—yes, cash—increases in their benefits payments over the past three years than many Jobcentre Plus personal advisers have seen in their salaries.
These are difficult but necessary decisions. We must remember the tough circumstances that many people in work have faced and continue to face across the country as we deal with the effects of the economic crisis. As I have said, we believe that this Bill is necessary to set out a clear and credible plan to make savings from welfare, help reduce the deficit and restore economic recovery. We are taking the tough decisions because it is necessary to give confidence to the markets. Adding to the Bill conditions such as those proposed by my noble friend Lord Kirkwood would diminish the confidence that we require.
I now turn to Amendment 12, in the name of the noble Baroness, Lady Morgan of Drefelin. This amendment would place a duty on the Secretary of State to instruct the Social Security Advisory Committee to commence a review of the level of uprating if inflation reaches 3.2% in any of the relevant periods as defined in the amendment. I hope that during this and previous debates both I and my noble friend Lady Stowell have been able to convey to the House that we understand and share noble Lords’ concerns about measuring the impacts of the Bill and all our reforms on individuals. However, as the noble Baroness slightly suggested in her speech, we believe that the amendment is unnecessary.
Noble Lords will be aware that we already have comprehensive arrangements in place to report on the impacts of government policy. First, we have already published a full account of the impacts of this Bill based on the forecast set out by the OBR. Again, these forecasts are broadly shared by the other main economic forecasters. Noble Lords will be aware that we have also published the child poverty impacts of the Bill. The Government already have a suite of ongoing reporting mechanisms in place and report on the levels of poverty every year in the households below average income series. It is only by looking at poverty issues in the round that we can have a meaningful debate about poverty. Noble Lords will be aware that the Government are currently analysing responses to their consultation on new measures of child poverty, measures that will attempt to capture the wider reality of poverty in the UK today.
Later this year we shall see the first of what will become an annual report from the Social Mobility and Child Poverty Commission, which 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. This commission, chaired by Alan Milburn, will report to Parliament and will enable detailed scrutiny of the Government’s work to eradicate child poverty.
Finally, the Government regularly produce an analysis of the cumulative impact of changes on households across the income distribution. This information is published by the Treasury at every Budget and other major fiscal events. This analysis will use updated inflation projections. We believe that it is a better approach than that in the amendment as it looks at the cumulative impacts of all changes rather than artificially isolating just one policy. The publication of cumulative impacts is a coalition initiative and was not produced by the previous Administration.
The Government have taken unprecedented steps to increase transparency and enable effective scrutiny of policy-making by publishing detailed distributional analysis of the impacts of their reforms on households. Our published distributional analysis goes further than that of any previous Government. Having these mechanisms in place means that we are confident that the Government will be able to scrutinise the effects of this Bill and of our whole suite of welfare reforms. I therefore ask the noble Baroness to withdraw her amendment.
Lord Kirkwood of Kirkhope
I think it is me, in fact, but let that pass. I am grateful to my noble friend. He and I had a good private discussion about this. I understand the Government’s position and he understands my position as well. I plead not guilty to his charge of being clever. All I am trying to do here is to get an insurance policy to protect people who are on benefits who may well need it. I hope I am wrong. He knows more about inflation than I do, but there is a real risk that in the demeanour of the coalition Government’s policy, which I would support, to try to attract higher levels of growth, it may be a price worth paying—not to let inflation rip, as my noble friend said, but to allow it to rise reasonably in expectation that growth would follow as a result of that. The shift in the policy changes that.
When the Bill was drafted we were in a different position. We are now—we will see tomorrow whether that is correct or not—in a position of the proposals of the noble Lord, Lord Heseltine, for growth, much of which I support. I must say to the noble Lord, Lord Forsyth, that I pay attention to what he says as Britain is a poorer place. These are huge sums of money and we need to work out collectively how we make provision for social protection in future. However, I say to my noble friend—I am looking him straight in the eye—that I cannot accept that this is a safe position to leave the House in. I want the protection—
Lord King of Bridgwater
Is not the key point here that the Government have to be able to convey credibility to those around the world who may lend us money? The noble Lord, Lord McKenzie, has made the point very well. We have to borrow a lot of money or there will be nothing like the present level of benefits if we find, as the Minister has made clear, that we are out on the market trying to borrow from countries and lenders who say, “I thought they had a clear plan. Now they’re qualifying it, they may not follow through”. I make this simple point. The noble Lord quite rightly talks about the risk of inflation rising. The risk that he is prepared to accept is that we lose our rating and then we will be in a very much worse state.
Lord Kirkwood of Kirkhope
I thought that we had lost our rating. I have now lost my drift.
This is very simple. This is a one-way bet for the Chancellor. If the Government end up with a windfall of £1 billion or £2 billion over and above the saving that I am supporting here, that is completely unconscionable. I am moving this amendment only to try to get an element of inflation protection for benefit claimants. I am grateful to everybody who has taken part in the debate, even the noble Lord, Lord Forsyth. I am sorry to do this to my noble friend, but I want to test the opinion of the House.
Ethical and Sustainable Fashion
(11 years, 1 month ago)
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Baroness Young of Hornsey
To ask Her Majesty’s Government what support they will give to the promotion of ethical and sustainable fashion.
Baroness Young of Hornsey
My Lords, I am pleased to open this second debate on ethics and sustainability in fashion, especially as there is a full-page account of a round-table discussion on the subject in today’s Guardian. I am particularly grateful to colleagues on the All-Party Parliamentary Group on Ethics and Sustainability in Fashion for their hard work and to the Centre for Sustainable Fashion for providing a secretariat alongside MADE-BY. Special thanks go to Dilys Williams, the head of the CSF, for bringing me up to date on key developments.
Fashion is about so much more than the clothes we wear. It may be an expression of our professional and personal identities, an expression of where and how we see ourselves in relation to our peer group, our cultures, our families and communities, and an expression of our creativity and our sense of fun. However consciously or otherwise we do it, as we dress, so we make a statement, even if the statement is, “I don’t care or think about what I wear”.
In spite of its importance in so many people’s lives, the perception persists that fashion is frivolous and inherently ephemeral. However, better than most, the Minister will be aware of the size of the UK fashion industry and of its contribution to the economy. The estimated amount spent on clothing in the UK in 2011 was £43.9 billion. Despite the high level of garment manufacture carried out overseas, the estimated value of UK-manufactured clothing and textiles in the UK was £8.1 billion in 2011, and the overall estimated export value of UK clothing and textiles was £7.3 billion.
If we take the volume of clothing sales and look at the global nature of the supply chain, and then start to unpack what that means in terms of the relationship between the environment and consumption, a worrying picture emerges. The Waste and Resources Action Programme, known as WRAP, reported in Valuing Our Clothes that we have stashed away in our wardrobes some £30 billion-worth of clothes, unused for at least a year. About a third of the clothing we no longer need ends up in landfill—that is, around 350,000 tonnes or an estimated £140 million-worth of used clothes. On average, the global water footprint of a UK household’s clothing exceeds 200,000 litres a year—enough to fill more than 1,000 bathtubs to capacity.
We have to work much harder and be more creative and inventive about how we tackle these problems. Not enough of us make connections between “fast fashion” and climate change, environmental degradation, labour issues in developing countries and resource scarcity. This is not to suggest that nothing is being done. On the contrary, parts of the fashion sector supply chain and increasingly aware consumers, campaigners and legislators have embraced a range of measures, instruments and strategies to mitigate the damage caused by our current practices and processes.
Last month, I was in Copenhagen, where I gave a presentation to Danish MPs on the APPG on Ethics and Sustainability in Fashion, which I chair. Jonas Eder-Hansen, the director of NICE, the Nordic countries’ umbrella group promoting sustainable fashion, and Michael Schragger of the Sustainable Fashion Academy work with Ministers and MPs from Sweden and Denmark, as well as representatives from the industry, to develop and deliver sustainable business models and other strategies to take us forward.
Here in the UK, the work of Defra and WRAP in promoting the Sustainable Clothing Action Plan, known as SCAP, is seen as a model of good practice and held in high esteem internationally. Indeed, WRAP and Defra were presented with the Global Leadership Award in Sustainable Apparel by the Swedish Sustainable Fashion Academy in Stockholm last month. At the event, I found a strong appetite for collaborating internationally with politicians and the sector. All of us are aware that in our contemporary, globalised world, pollution and unsavoury labour practices are no respecters of national boundaries.
Industrial dyes are a case in point. For a start, fabrics are dipped or washed in dyes that are made using copious amounts of precious water. In spite of regulations intended to ensure that the excess, dye-laden water is treated before being disposed of, it is cheaper to dump the dye effluent than to clean and reuse it. The Wall Street Journal’s report on an instance of severe pollution in China where a river literally ran red makes chilling reading. Of course, by not treating water, costs are kept low, as demanded by large retailers wanting to sell cheap clothes to their customers in the USA and Europe.
Consumers need to make the links between their desire for cheap clothing and the loss of livelihoods through depleted, polluted fishing stocks and ever diminishing food and water resources. Add to that the fact that more than 400 people have died in fires in Bangladesh and Pakistan in the past six months, with at least one of the factories involved producing garments for a British retailer, and we have to acknowledge that our current mode of “enjoying” fast, cheap fashion makes no sense whatever.
Fashion today is both global and local, and even much of the produce of many of our high-profile “heritage” British brands, such as Burberry, Aquascutum and Crombie, is often all or mostly made outside the UK. The global nature of the fashion industry means that it is imperative that we work with colleagues internationally to secure more effective international standards on, for example, sophisticated factory inspection measures, labelling countries of origin, instituting traceability mechanisms and so on. Thanks to the horsemeat scandal, the general public is becoming acquainted with the unforeseen complications brought about by globalised processing and trading practices. The longer and more dispersed the supply chain, the more difficult it is to ensure transparency and accountability.
One equivalent to the horsemeat issue, if I may put it that way, in clothing terms is cotton. There are many people who would not wish to wear garments made from cotton harvested by children forced to work in the cotton fields of Uzbekistan instead of attending school—I should declare an interest here as a patron of Anti-Slavery International, which has worked ceaselessly to try to persuade Governments and the EU to work harder to stop this practice—but it is impossible to know the source of your shirt, skirt or trousers. Yet some of our largest fashion retailers will not undertake to demand that the companies in their supply chain stop using cotton gathered by state-sponsored forced labour.
Businesses and consumers alike can be powerful agents of change, and it is clear that education and awareness-raising have a crucial role to play. However, there is also a need for leadership from government in hosting platforms for initiatives, supporting change-makers and investigating the risks of not thinking through the consequences for environmental sustainability. This leadership role should also be concerned with working in partnership to educate consumers and skill up young people on manufacturing and other skills, as well as investing in sustainable fashion SMEs and other projects focused on a sustainable future still infused with excitement, individuality and style.
We have all the incentives we need to act and to act quickly, and we have the individuals and organisations with the talent, so what more can government and politicians do to enhance the effectiveness and reach of these people? Clear, vocal leadership is important, and government Ministers and their officials can fulfil a useful role in supporting initiatives across the spectrum of departments with a stake in finding solutions to the problems we have created. The Sustainable Clothing Action Plan is a good example of government leadership, with an NGO and industry working together to find solutions to complex problems.
I cannot mention all the different departments that could have some sort of purchase on this issue. Some time ago, DfID, for example, introduced the Responsible and Accountable Garment Sector Challenge Fund. Fashion, of course, lies within the DCMS’s remit. It is also within the BIS agenda because of the manufacturing element and also because of the potential of the Green Investment Bank. In fact, in November last year, Business Secretary Vince Cable promised government support to breathe new life into UK textile manufacturing as a study revealed that the cost gap with Asia is narrowing. Can the Minister tell the House how far such plans have gone and the extent to which sustainability and ethics in fashion is a priority consideration? Other departments, such as the MoD or the Department of Health, can support sustainable clothing via the purchase of uniforms and so on through ethical procurement procedures.
Will the Minister undertake to set up a meeting with me and other Members of both Houses on the APPG to discuss how we can best help to support the development of this part of the fashion sector? We need to get a commitment to develop practical, effective strategies across the different departments for realising the potential of rethinking how we “do” fashion. Because of its experience with the Sustainable Clothing Action Plan, Defra is perfectly placed to broker and animate the necessary discussions.
To end on a positive note, technological innovation is crucial. I look forward to the day when waterless production techniques, air-purifying textiles, as being developed by Professor Helen Storey and Professor Kate Storey, and closed-loop technologies, in which the garment is manufactured, sold and eventually reformed so it can go back into the manufacturing process, will be the norm. Then we will know we are getting somewhere. However, we should also acknowledge that there is no single magic potion that can cure our environmental excesses. We need multiple strategies and to work collaboratively and internationally to effect sustainable change.
At the British Fashion Council’s Esthetica Showcase at London Fashion Week last month, a young designer showed the collection with which she won a competition for fashion designers. The material she had to work with was the discarded clothing and waste materials of Veolia, whose employees collect our rubbish and sweep our roads. It just goes to show that with support, creativity, vision, skill and invention, even the fluorescent strips from a refuse collector’s jacket can be turned into a garment of true beauty.
Baroness Northover
I remind noble Lords that this is a time-limited debate and, if my maths is right, we have no spare capacity. When the Clock shows four, noble Lords have had their four minutes.
Lord Young of Norwood Green
My Lords, with that fresh in my mind I will endeavour to proceed without hesitation, repetition or deviation, as they say. If every Member in the Chamber could examine the labels in their clothing, it would reveal the global nature of high-street supply chains. I am not suggesting we do it as it might cause embarrassment for some. However, I checked my jacket—not that I pretend to be anything to do with fashion—and I noticed that it came from Morocco.
I want to focus on the ethical aspect of this debate. I declare an interest as the vice-chair of the Ethical Trading Initiative, a groundbreaking alliance of companies, trade unions and NGOs. The company members include a large number of high street fashion retailers, supermarkets and department stores, with a combined turnover of £166 billion. The trade unions represent 160 million workers around the world and a wide range of NGOs, large and small, is involved.
Every member is committed to the implementation of the ETI base code, which is founded on the ILO conventions. In brief, they state: employment is to be freely chosen, with no forced, bonded or involuntary prison labour; there should be freedom of association with the right to collective bargaining; working conditions should be safe and hygienic; child labour should not be used; living wages should be paid; working hours should not be excessive; there should be no discrimination; regular employment should be provided; and no harsh or inhumane treatment should be allowed. As you can see from the list, all the companies that are members of the Ethical Trading Initiative are on a journey in trying to ensure that workers throughout their supply chain benefit from these conditions.
If noble Lords think about some of the stories in the news, only too often unfortunately, such as workers being exploited and denied basic rights, and incidences of child labour, which have been uncovered in many of the supply chains of our high street companies, it shows how difficult it is to ensure that workers get a fair deal. These are workers whose lives are put at risk, as we saw recently in clothing factories in Bangladesh, where fire exits were locked. It shows what a long way we have to go. All of us in the Ethical Trading Initiative have embarked on a huge task in trying to open the minds of companies and consumers to the fact that clothes do not just arrive through a UK-based manufacturing process.
Many ETI brands and retailers which sell garments to UK consumers are engaged in activities that attempt to integrate respect for human rights and labour rights throughout their global supply chains. Working with sourcing states and civil society, UK retailers are at the forefront of focusing on the UN guiding principles on human rights. On that point, I know that the UK Government support the UN business and human rights agenda and that we are awaiting a document on the human rights and democracy programme from the Foreign and Commonwealth Office, which is co-ordinating the policies of 12 government departments. I wish it luck in this. Can the Minister tell us when the document is likely to be published?
Baroness Parminter
My Lords, on entering this House in 2010 I wore fur-free “non-ermine ermine”. However, I am not just passionate about cruelty-free fashion, so I thank the noble Baroness, Lady Young, for securing this debate and for chairing with such pizzazz the All-Party Parliamentary Group on Ethics and Sustainability in Fashion, of which I am proud to be an officer.
Sustainability, green, eco, organic and ethical are increasingly a part of the fashion conversation. That is to be welcomed although I am not sure everyone has the same view of sustainable fashion. Is it a timeless, classic handbag I can pass on to my daughter—the opposite of the cheap, disposal fashion epitomised by Primark? Is it a dress made from locally sourced materials, with limited transport and a light carbon footprint, or is it a Fairtrade cotton T-shirt produced in a factory where the needs of employees are taken into account?
The London College of Fashion defines “sustainable” as,
“harnessing resources ethically and responsibly without destroying social and ecological balance”.
I like that definition; it does not go so far as to pin it down but allows the creativity of individuals to flourish as they interpret what it could mean for their business. As the impacts of climate change hit harder, with resource constraints and more severe weather, we need the clothing industry to develop the necessary resilience to satisfy the colossal appetite for clothing sustainably. The commitments from the Business Secretary in support of the UK textile manufacturing industry are very welcome but more needs to be done to future-proof the industry and to support sustainable and ethical fashion.
Sadly, 20 years after the first child labour and labour standards scandals in our high street fashion chains, we still face the same problems. Clearly, current audit approaches are failing. They rely too much on cheap, bribable inspectors. It is analogous with food supply chain issues, reflecting huge pressures to reduce costs combined with an “unlikely to be found out so don’t worry” mentality. Some companies are trying hard to address these issues. One is BBC Worldwide, which refuses to rely on third-party certification and makes its own unannounced checks of its suppliers, has credible and enforced sanctions and promotes its speak-up line to managers and workers in supplying factories.
However, spot checks alone will not address all issues. The fires in a number of Bangladesh factories just before Christmas highlight a problem of ethical culture. During the audits the fire doors were open but when the fires happened they were locked. We need companies such as the GoodCorporation, which argues powerfully to encourage debate about ethics and culture in factories, to move away from blame, to push managers and to take more responsibility for standards.
We also need more opportunities to showcase best practice, such as the Estethica at London Fashion Week and the RSPCA’s Good Business Awards, which have supported the development of animal-friendly clothing policies. Can the Minister say what plans the Government have to address this and to help give companies advice and support as they develop the standards to take on the ethical and sustainability issues, and to provide more platforms to share best practice?
We need also to focus on clothing, from creation right through to disposal. With around £140 million-worth of used clothing going to landfill each year, we urgently need to address the issue of reuse, exchange and disposal of clothes. I was therefore very pleased to see that the Government’s consultation on waste prevention, launched last week, identifies clothing as one of the priority areas for action. We have come a long way with compassionate fashion, largely thanks to powerful campaigning by organisations such as PETA. Opinion polls show that 95% of Britons would never wear real fur and top designers including Vivienne Westwood, Ralph Lauren and Stella McCartney leave fur out of their designs. Even on the high street, icons such as Topshop, H&M and New Look are fur and exotic-free.
Green is not the new black; it is not just another trend to come in and go out with the seasons. I applaud the work of the all-party group with partners in industry and government to develop a new space for fashion which respects the need for social and ecological balance and can help create more British jobs.
Lord Patten
My Lords, the more alert of your Lordships may notice that I seem to be the only member of the Tory party Back-Bench fashionista tendency rising this evening. I do that for a number of reasons. One is that I admire what the British fashion industry produces. The noble Baroness referred to that in her introductory speech, and I will not repeat it. I also admire very much the creativity of the British fashion industry. About a month ago, I was very glad to be at my first ever London Fashion Week show, the Matthew Williamson show. I sat in rapt attention on the edge of the seat: indeed, the seats seem to have been designed to ensure that you sat in rapt attention during the whole show watching the models sashay past. It is no wonder to me that the British fashion industry is growing and is contributing so much. Certainly, it is one of the top 20 productive sectors in this country, which has to be a very good thing. The imagination of the British fashion industry is also good. We can see a Matthew Williamson or a Stella McCartney dress being paired with something from Primark or Topshop. That has gone all over the globe, which is much to the credit of those involved.
However, I agree that the ethical issues must be addressed, and I have four points that I wish to make. My first point is the only one which I believe is unique to the fashion industry; namely, that the fashion industry has done a bit, but not enough, to discourage the image of the thin, verging on anorexic, and therefore ill, model in its shows and photographs and the casting agencies which cast these models. Occasionally, there is a bit of breast-beating about it, but I do not think that there is a continuing programme to discourage 13 and 14 year-old girls and boys who want to be models one day. Its message should be to eat responsibly, just as the drink industry should tell people to drink responsibly. I urge the noble Baroness, with her influence in the fashion industry, to press this hard.
My second point is that I do not think there is anything peculiar or unique to the fashion industry in the need to manage the supply chain properly and responsibly. It is not just in fashion that we see these problems; it is in the use of children in other parts of the world in manufacturing carpets and toys, as well as in the use of young people who are not very well paid in putting chips into hand-held telephones. A responsible corporation monitors the supply chain and makes sure that it treats those who work in it properly. Much more needs to be done by good corporations in this area.
Thirdly, a very good tool is to hand in the condign punishments available under the UK’s Bribery Act and bribery legislation. UK companies which permit their supply chains to bribe and act in a corrupt way are those which do not treat their workforces very well. We should ensure that the Bribery Act provisions are implemented the whole way down the line. That would add to health and safety, and to better pay and conditions.
Fourthly and lastly, ethical and good companies are very appealing to customers, investors and the young of all sorts who go into the shops to buy those goods. Good corporations have the very highest ethical standards. The Prime Minister’s presently absentee guru, Steve Hilton—I believe that he is now in the west of the United States—used to run Good Business. It was founded on the highest ethical standards. I look forward to welcoming Steve Hilton back when he comes to re-guru for the Prime Minister next year.
Baroness Prosser
My Lords, I, too, thank the noble Baroness, Lady Young of Hornsey, for securing this debate. As has been mentioned, the all-party group has a very wide agenda. Included under the heading of ethics is, of course, the treatment of people engaged in the production, transportation and sale of textiles and clothing. Shortage of time requires me to concentrate my remarks on just one of those areas, and I will focus on those engaged in production.
Let me start with raw materials, in particular, cotton. One of the most disturbing and difficult examples is that of cotton picking in Uzbekistan, which has already been flagged up by the noble Baroness, Lady Young. Uzbek cotton accounts for 10% of the world’s harvest, ranking third in the world. It is, of course, a very important product for the country, making up 20% of its GDP and approximately 40% of its hard currency export earnings. The legacy of Uzbek’s history with the old USSR, with its continued command economy, does not provide a happy situation either for the farmers or the cotton pickers.
A production quota system is forced upon farmers and that, together with the government-set price, means that farmers cannot cover their expenses. Lack of profit leaves no money for investment in machinery, which leads to a continuing heavy reliance on cheap labour. Incidences of minimal payment or no pay at all means that many adults go elsewhere to find work, often to neighbouring countries. The Uzbek Government then step in with a system of forced labour, mostly, but not entirely, made up of children. Some schools in the cotton-growing areas are forced to close between September and November for the picking season so that children, some as young as 10 years old, can be sent to the fields to pick cotton for seven days a week. Children in rural areas are required to carry out weeding of the cotton fields during May and June. The children who pick the cotton have a quota to reach which varies, depending on the local circumstances, between 60 pounds and 110 pounds of raw cotton per day.
This is by any other name slave labour and it is not confined to children. The Government of Uzbekistan also forcibly mobilise teachers, public servants and employees of private businesses to harvest the annual crop manually. Failure to comply can mean the loss of employment and/or pension rights. The Cotton Campaign has a list of demands for Governments and companies, and, of course, cotton traders, calling on them to use due diligence in their supply chains, to demand respect for human rights and to require Uzbekistan to abide by the employment conventions of the ILO, to which it is a signatory. In 2008, the country ratified the ILO convention on the minimum working age and the ILO Convention on the Worst Forms of Child Labour.
I hope that the Minister will be able to reassure the House that the UK Government will use their best endeavours at the ILO annual conference to bring this issue to the attention of the global community. Uzbekistan cotton is, of course, not the only area of concern to those campaigning for better rights for workers in the textile and clothing supply chain. Labour Behind the Label, an NGO which campaigns for better terms and conditions for those employed in making our textiles and clothing, calls for improvements in wages and in health and safety. It has joined forces with Asia Floor Wage in calling for a living wage across the region and has now widened its embrace to include work with activists in the USA, North America and Europe, but western companies must be more vigilant of the supply chain and take personal responsibility for checking the veracity of locally made claims that all is well.
Lord Stone of Blackheath
My Lords, perhaps because of our society’s destructive obsession with speed and short-termism, fashion is often neither ethical nor sustainable. In many fields we fail to consider the long-term effects of what we do: in politics, it is the next term’s votes; in the media, it is weekly ratings; in business, it is tomorrow’s share prices; and in fashion, consumers want today’s new look. At Marks & Spencer, I was taught by the late Lord Seiff about good human relations in industry. We were not only concerned with the long-term satisfaction of our customers and of our shareholders who were often with us for life, we were also frugal with our use of resources. We used minimal packaging; we did not have fancy window displays; we used low-energy lighting; and even our relationship with our suppliers was that of a long-term partnership. We mainly bought our goods in the UK, but even when we moved some production abroad, we ensured that there was fair pay and good conditions in the factories that made our clothing. Home production is an issue to which I will return.
The consumer, too, has a role in this. How does he or she decide what to buy? A brilliant mind in this field, as was mentioned, is the designer, artist and academic, Professor Helen Storey at the Centre for Sustainable Fashion at the London College of Fashion. She is involved in a project that seeks to explore and understand more deeply the relationship between us and our desire to acquire. At the heart of the question posed by this debate lies our understanding of human actions in relation to material consumption habits. Here in the western world we are consuming and wasting at a rate that threatens our own health and that of the planet. The fashion industry exemplifies the complexity and extreme nature of human society’s obsessive cycle of creation and destruction, but it is also a great place to find solutions. Fashion sits at a point that crosses economics, aesthetics, psychology, creativity and our individual notions of who we are. This research will produce some really interesting results.
At this point I must declare an interest. I have three wonderful children. I tried to stop each of them following me into the shmatter business. Daniel and Jessica work respectively in charities and healing, but I failed with my youngest child, Susie Stone, who has a couture fashion business. She says that sustainable fashion requires us to buy less but wear it more and to spend more on good, bespoke, UK-made clothing, which in the long term will cost you less, suit you more and make you feel better about yourself.
On a grander, wider scale, the noble Lord, Lord Alliance, is working on a project to bring textiles back to Britain. He and his team have involved Manchester University, local businesses and regional and central government. This should be supported by regional investment and government grants. Tens of thousands of jobs could be created, so the investment would be cost effective. Within it, ethics and sustainability should be built into contracts to make them synonymous with “Made in Britain”.
A friend who has a new factory in the UK tells me that some awful UK factories bring in people at night to work the machines. They are paid by the illegal “cabbage” system. They have no right-to-work documentation to prove they are legitimate workers. We need this stopped so that ethical trading companies with audited compliance are not put at a disadvantage. As well as criticising other countries, we need to enforce ethical trading here in the UK.
Finally, I am afraid we have uneducated consumers in this field. They do not know what is involved in making clothes well from start to finish in terms of skills nor what the costs of a retailer are in terms of staffing, distribution and running stores. The public have never been exposed to this understanding. Many companies in the retail industry tick the boxes in terms of ethical and sustainable initiatives but do not have them high on their agenda because their one-year operating plans are dominated by recession survival and the complexities of multichannel retailing. As we found this week with controlling the press and media, we cannot wait for retailers and manufacturers to put in place voluntary, sustainable and ethical reporting practices. We need to create laws and ensure compliance with them.
After the unchecked industrialism of the 20th century and in order to advance sustainable and ethical fashion, there is a need for reinvestment in the textile industry in this country, for transparency and information from brands so that people can make informed longer-term purchasing choices and for legislation and compliance monitoring from Her Majesty’s Government.
Lord Razzall
My Lords, it is not possible to overestimate the importance of fashion design in this country. From Stella McCartney to Vivienne Westwood, we are clearly world market leaders. It is also important that we should highlight the importance of ethical fashion, which was brilliantly highlighted in this House by the noble Baroness, Lady Young of Hornsey, and outside it by Livia Firth, who is better known in this field than her famous actor husband.
We all remember the horrors of Primark, which were referred to earlier. It was accused of exploiting third-world employees to produce dresses that it was cheaper to wear once, throw away and replace with another than to dry clean. However, the big companies have begun to catch on. I commend to the noble Lord, Lord Young, and others—I do not know why I picked on him—the Gucci ecologically 100% traceable bag. It is not black but a burgundy brownish red because this is the best vegetable-sourced colour. The leather is sourced from cows reared without causing deforestation and the handle is made from bamboo that grows like a weed. Gucci may sell furs, but this bag is a start.
It is not only major companies that have caught on. The United Kingdom has Brora, which sources ethically produced fibre from the Mongolian goat and turns it into cashmere in Scotland. It also has People Tree, which started in 2001 and is recognised as a pioneer in fair trade and environmentally sustainable fashion. It both provides desirable fashion and works to improve the lives and environment of workers and farmers in developing countries. UK manufacturers do not just provide jobs. Barbour not only makes all its waxed coats in United Kingdom but is a major donor to charity. It has given away £8 million in recent years, including a recent grant of £1 million to Newcastle University for medical research.
What can the Government do? That is the Question put by the noble Baroness. I am not a great believer in government intervention, but if we accept that demand for high-end value manufactured goods made here rather than in China is good for the United Kingdom, the Government could, first, encourage universities to concentrate courses on manufacture rather than just design; secondly, following the reference to Vince Cable, contemplate the creation of manufacturing hubs, or “catapults” to use the jargon, to encourage manufacturing; and, thirdly, in their export drives, promote manufacturers and suppliers of ethically produced clothing that is made here. They could also, as the noble Lord, Lord Stone, indicated, give a lot of money to the initiative of my noble friend Lord Alliance.
Lord Giddens
My Lords, fashion is a huge global industry, as other noble Lords said, with a large carbon footprint. It has left behind it a trail of eco-destruction. Now, fortunately, efforts are being made to counter the existing structures of the industry. As usual it is the Scandinavians and not us who are in the lead, as they always are on environmental issues. I commend to noble Lords the work of the Nordic Fashion Association, which was briefly touched on in other speeches. It has a very wide range of projects and amazing coverage in the Scandinavian press. One of the main emphases of the NFA is eco-design: integrating sustainability into garments at the design stage.
Among high-profile figures in the UK, I commend in particular Vivienne Westwood for her work on climate change. A couple of years ago I went to speak at a literary festival in Hanover. I gave my speech on climate change. It was followed by the Handel opera “Semele”, performed in the same long, elegant gallery where Handel first presented it. This was “Semele” with a difference. It was called “The Semele Walk” and featured models parading in Vivienne Westwood costumes. All the singers in the opera were also dressed in Vivienne Westwood clothing. It was a brilliant adaptation. She chose “Semele” because it is about the battles of the gods, and climate change is about our battles with the immense forces that we have created.
Sustainability is becoming important in the fashion industry around the world. There are many initiatives in North America. The annual Eco Fashion Week debate has been going for six years and attracts 2,000 people from the industry. Even more important is China, where the picture is very mixed. In some respects this echoes what my noble friend said about another part of the world close by. The turnover of the garment industry in China is about $60 billion a year. Most of the money is earned from exports, mainly to the West. There are massive contradictions here. On the one hand, children work all hours to produce cheap garments for the western market. The film “China Blue” is a very good exposition of this. On the other hand, sustainable fashion is now talked of as widely in Hong Kong and Shanghai as it is in London. I admire the designs of Ma Ke, who makes beautiful, traditional clothing.
There are two questions that I would like to ask the Minister arising from this. First, all this is worthwhile but it seems to be nibbling at the edges of the global garment trade and it could degenerate into eco-chic concentrated at the high end of the industry. Is it possible to generalise it to the industry as a whole? Secondly, how do we get the big corporations more involved? As far as I can see, there are many corporations involved, but mainly their corporate responsibility department, which is usually a minor part of the business. We surely need companies to be much more integrated in the whole design process to transform it, and I would welcome the Minister’s comments on that.
Baroness McIntosh of Hudnall
My Lords, I join everyone else in thanking the noble Baroness, Lady Young, for securing the debate—it is indeed very timely, in view of the article in the Guardian today—and for her excellent and comprehensive overview of the issues. I am glad that the debate is to be answered by the noble Lord, Lord De Mauley, for many reasons, not least, and I hope he will not mind my saying this, because we could all agree that he is unarguably one of the most stylish Members of your Lordships’ House.
I had not intended to speak—I should be singing—but I wanted to make a couple of short points. However, they have all been made by other speakers and so I will quickly pick up on a couple of matters that other people have spoken to and expand them a little. My noble friend Lord Stone spoke about buying less and wearing it more. That is absolutely at the heart of how we change human behaviour in this area. It will be difficult because in the developed world we have become addicted to over-consumption, and fashion is no exception. I am a complete serial offender in this respect. I have that wardrobe full of misguided purchases, to which the noble Baroness, Lady Young, referred, which were bought in haste and without due consideration. I am very ashamed of it, but unfortunately that does not stop me doing it.
We buy too much of everything because we can and because the market is geared towards high volume and low costs, as we have heard from many other speakers. We have largely forgotten how to value, restore, maintain and sustain the clothes that we wear. We are shamefully and shamelessly profligate.
This is a difficult issue for Governments of all complexions because the prevailing economic orthodoxy says that consumption equals growth, and growth is the only game in town. I can see that we have got problems but we should surely be wondering whether that model is itself sustainable. I rather doubt that it is.
Fashion, of course, is very much about novelty and therefore inevitably about consumption. However, at its best it is also about beauty, craft, skill and durability, and it is often about small businesses doing one thing really well. Does the Minister agree that one of things the Government can do is to put as much support as they can behind small businesses in fashion, as well as trying to persuade the large businesses to change their practices, which I do not deny is extremely important?
We must not forget that sustainable fashion is, of course, about sustainability, but it is mainly about fashion. If we do not get the fashion part right—that is, if the fashion that comes as sustainable is not as good as, if not better than, other fashion choices we could make—then it will never get off the ground. That is why we need small businesses that have creativity built into them.
My final point goes to the heart of how we can keep those small businesses coming: our education system. The system that we have at present, as we have already heard, has allowed some very talented people to come through and has allowed the fashion industry in this country to be world beating in many respects. If we do not keep the education system balanced so that the creative education necessary to allow those talents to emerge is properly sustained and valued, we shall find in a few years’ time that we are not the world beaters that we once were. I would extend that into the higher education sector where, as I should probably have said at the start, I have a personal interest in the excellent work of the Centre for Sustainable Fashion, which has been mentioned many times today, because my son works for it. What he has learnt through being part of that team has engaged my interest and I hope that there will be more units like the Centre for Sustainable Fashion in future, and that they will themselves be sustained.
Baroness Jones of Whitchurch
My Lords, I add my thanks to the noble Baroness, Lady Young, for initiating the debate and echo the thanks for her enthusiastic leadership and for the fashion inspiration that she has given to the All-Party Parliamentary Group on Ethics and Sustainability in Fashion, of which I am also a member. I declare an interest as a board member of WRAP, which, among other things, as we have heard, manages the Sustainable Clothing Action Plan on behalf of the English, Scottish and Welsh Governments.
This is undoubtedly a complex area in which it is difficult to be an active and responsible consumer. In the short time that I have available, I will highlight a couple of ways in which government can make a difference at a UK level.
First, it remains surprising that the Government pay so little attention to the fashion sector, as it is a major player in our economy. As the recent WRAP report, Valuing our clothes, identifies, clothing accounts for around 5% of the UK’s annual retail expenditure, with consumers spending £44 billion a year on buying clothes, or around £1,700 per household.
Many UK clothing producers, particularly small businesses, as my noble friend Lady McIntosh identified, are putting ethical and sustainable fashion at the heart of their business models. They are making a point of celebrating quality manufacturing, greater longevity, respected craft skills and locally sourced materials. However, to expand further they need greater investment in production skills, improved training and a higher status, which would encourage the next generation to believe that the sector has a future. Will the Minister update the House on the steps being taken by BIS and other departments to build up our UK textile capacity and attract the brightest and best young people into UK sustainable textile production and design for the future?
Secondly, a wholesale shift towards sustainable and ethical fashion means that all the major production and retail businesses in the sector have to commit to change. I am very proud of the work being done by WRAP in the Sustainable Clothing Action Plan to sign up a list of companies prepared to work towards ambitious targets on sustainability by 2020. Already, major retailers such as John Lewis, Primark and Marks & Spencer are involved. Together they are addressing a range of environmental challenges such as the overuse of scarce water in production, the fact that a third of discarded clothing goes straight to landfill and the short lifespan of most clothing with resulting demands, as we have heard, for endless new purchases to fill the wardrobe.
The Sustainable Clothing Action Plan is providing businesses with practical tools to deliver change, such as how to accurately measure the environmental footprint of the clothes they produce, how to design clothes with a longer active life, how to give consumers consistent information so that they can see the benefit of changing their behaviour and how sustainable business models can bring financial benefits as well. For example, it has worked out the financial advantages of retailers providing repair services for their own garments, extending clothing hire services, offering a buy-back and resale section within their stores and providing clothing exchange events among consumers.
I echo the congratulations of the noble Baroness, Lady Young, to WRAP and Defra on being awarded the Global Leadership Award in Sustainable Apparel in Sweden in January. Will the Minister confirm that this work continues to be a priority for Defra and that WRAP’s work will continue to be funded? Will he reassure the House that, contrary to rumours, environmental sustainability will remain a key priority in Defra’s current review of its priorities?
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)
My Lords, I thank the noble Baroness, Lady Young, for initiating this debate on the promotion of ethical and sustainable fashion. I have enjoyed the contributions of all noble Lords and I will try to respond in a moment to relevant comments raised during the debate.
Although I make no claim to be a fashion expert, I should declare a vicarious interest by virtue of having a wife who runs a small but, she tells me, successful business retailing fashion accessories. Her range includes, I am relieved to say, sustainable products, notably some in the shape of handbags made from recycled offcuts of leather. She tells me that they are highly desirable. Of course, I am very interested in the range of economic, ethical and environmental issues associated with the fashion industry, which have been so well covered this evening.
As several noble Lords have said, fashion is a vital part not only of our national but of the global economy. In 2009, the United Kingdom fashion industry was estimated to contribute more than £20 billion to our economy and to support more than 800,000 jobs, so this is indeed an industry worth talking about. About 90% of the clothing consumed in the UK is imported. Our consumption has positive economic effects in developing countries, but there are also a wide range of environmental and ethical implications to take into account. We need to consider the water, fertiliser and pesticides used when fibres are grown and the emissions generated when synthetic fibres are made. There are issues associated with access to markets and trade terms for producer farmers. There are concerns about labour conditions in clothing factories, sweatshop conditions and child labour.
As the noble Baroness, Lady Jones of Whitchurch, said, there are significant water as well as greenhouse gas impacts associated with washing and drying clothes and waste at end of life. As the noble Lord, Lord Young, said, we landfill around a third of a million tonnes of clothing every year. There are complex global supply chains. Although the issues are different, the recent and ongoing horsemeat saga has shown that we need to be able to trust all our supply chains, including, of course, the fashion ones. I will return to this in a moment.
We want to ensure that the fashion sector continues to grow. Several noble Lords, the noble Baroness, Lady McIntosh, in particular, spoke about small businesses, and I agree with her. I will return to that point in a moment. Last October, the Government hosted the UK fashion and textile manufacturing showcase. This was part of the Government’s Make it in Great Britain initiative, designed to dispel the myth that the UK does not make anything any more. UK Trade & Investment is promoting UK products and services to customers abroad and encouraging foreign investment in the UK through its GREAT campaign. I hope the noble Baroness, Lady McIntosh, will be pleased to hear that Creative Skillset, the sector skills council for the creative industries, recently launched its first higher level apprenticeship in fashion and textiles and is planning to deliver 500 apprenticeships. My noble friend Lord Razzall and the noble Baroness, Lady McIntosh, both spoke about higher education, and I will return to that, too, time permitting.
As for environmental improvements, my department, with WRAP, co-ordinated the Sustainable Clothing Action Plan, which several noble Lords referred to. This is a collaborative effort with businesses and third sector organisations to reduce the environmental impacts of the UK clothing supply chain. The organisations involved include high-street names such as Nike, Sainsbury’s, M&S, John Lewis and Primark, as well as clothing reuse and recycling organisations such as Oxfam and the Salvation Army.
This is a world-leading initiative, which has been recognised internationally. As the noble Baroness, Lady Young, said, Defra and WRAP have just received the 2013 global leadership award in sustainable apparel from the Sustainable Fashion Academy in Stockholm. I am proud about that and pleased that the noble Baroness was able to be there.
Government action to improve ethical standards in the fashion sector includes the creation of the Responsible and Accountable Garments Sector—RAGS—Challenge Fund. This fund helps projects that improve the conditions of vulnerable garment production workers. It is aimed at workers in low-income countries in Asia that supply the UK market.
DfID has also provided support to the Ethical Trading Initiative, an alliance that brings together businesses, trade unions and voluntary organisations and has developed a base code to define the minimum standards that member companies should reach. The nine provisions of the base code include that child labour shall not be used.
The Government, of course, need to look to their own procurement, too. The government buying standard for textiles was published in December 2010. It limits the levels of hazardous chemicals and encourages the consideration of durability, the use of recycled fibres, ethical standards and end of life disposal. We are now starting a review of this standard and plan to strengthen it and cover additional issues such as demand management, recyling and repair, and we will work with the Government Procurement Service to embed the new standard in the framework contracts for use across government. We are working hard to ensure that the climate is right for growth in the UK fashion industry, and at the same time are encouraging businesses to move UK consumption on to a more ethical and sustainable footing.
I will now address questions the noble Lords have asked. The noble Lord, Lord Young, referred to the number of government departments involved. Ethical and sustainable fashion is a complicated topic, and there are roles here for more than one government department. DCMS leads on the UK fashion industry, BIS on UK business, Defra on environmental policy aspects, and DfID on poverty reduction aspects. We work together to ensure that appropriate links are made without duplicating or generating unnecessary bureaucracy. There are cross linkages between the initiatives. For example, Fairtrade, the ethical trading initiative, and DfID are all members of the sustainable clothing action plan steering group. Many of the businesses involved in the Ethical Trading Initiative are also involved in sustainable clothing action plan, and there is a joint BIS-DfID trade unit. In many cases it makes sense to take a wider geographical approach. We look at the broad range of issues in a particular country and identify opportunities for reducing poverty and improving working conditions.
The noble Baronesses, Lady Young and Lady Prosser, raised the issue of child labour in Uzbekistan in particular, I think. In negotiations about eligibility for the EU’s generalised system of preferences, we understand that there are legitimate concerns about the use of forced labour during the cotton harvest season in Uzbekistan. There remains much to do, but we welcome this year’s progress; enforcing a ban outlawing the use of children aged under 15 in this year’s cotton harvest is a step in the right direction. We continue to monitor the situation and encourage further efforts towards full implementation of Uzbekistan’s obligation under the ILO conventions.
My noble friend Lord Patten asked about child labour, and other noble Lords have also referred to this matter. The Government are committed to ensuring that children are not engaged in work that is harmful or detrimental to them. We know that this is an ethical issue—perhaps the issue on which, as the noble Lord, Lord Young of Norwood Green, said, UK businesses already take action. I also agree with my noble friend Lord Razzall, who has congratulated several businesses that he has named. We help by supporting organisations that enable companies to demonstrate their commitment. I have referred already to several initiatives. Let me add to the Ethical Trading Initiative and Fairtrade the UN Global Compact, which is a call to companies everywhere to align their operations and strategies with 10 universally accepted principles, including abolishing child labour.
We are working towards long-lasting changes that tackle the poverty we identify as being at the root of the problem of child labour. The noble Lord, Lord Young of Norwood Green, referred to the launch of the UK business and human rights strategy. The Foreign and Commonwealth Office has led a successful process across government to agree the UK’s first strategy on business and human rights. Arrangements are being finalised for the launch in the near future. The UK has played a leading role in supporting the UN guiding principles on business and human rights.
My noble friend Lady Parminter asked about government advice to UK business on ethical issues relating to specific countries. I have already mentioned the strategy on business and human rights. This includes clear signposting to advice provided by different government departments responding to business feedback during extensive consultations when business requested clearer guidance on how to approach the Government for advice. The Government also provide guidance to businesses on how to carry out corporate social responsibility reporting on environmental and ethical issues. I think it is fair to say that UK companies lead the world on corporate and social responsibility reporting.
My noble friend also asked about audit and checks on the supply chains. Textile supply chains can be complicated, with many intermediaries, and UK businesses often do not have visibility along their whole supply chains or even beyond their tier 1 suppliers. That said, many businesses are working to improve this, and even without full transparency they can still influence the practices of their suppliers through their product specifications.
The noble Lord, Lord Stone, spoke about the role of consumers. I agree with him. Further action that consumers can take includes buying pre-owned clothing, choosing fair trade products, washing at lower temperatures and recycling textiles. He also asked whether the Government would introduce compulsory reporting on corporate social responsibility for all UK companies, particularly in this area. UK companies, as I have said already, lead the world in choosing to report on their contribution to social, ethical and environmental sustainability. We support mechanisms that help them to improve their reporting and are keeping a watching brief on current trends towards more mandatory reporting in some countries.
My noble friend Lord Razzall raised the issue of encouraging universities to support ethical fashion. London is seen as a global centre of fashion, with our universities attracting students from around the world. In 2011, almost 18,000 students were registered on fashion and textile courses, and there were 190 apprenticeship starts in the fashion and textile framework.
I will write to noble Lords if I have not answered all their questions. To finish, there is no simple answer to the many economic, environmental and ethical issues associated with the global fashion industry. However, I hope noble Lords will agree that we are taking action and are making progress.
Jobseekers (Back to Work Schemes) Bill
Welfare Benefits Up-rating Bill
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Any mandatory 1% up-rating stipulated in section 1(1) shall not apply to statutory maternity pay.”
Baroness Sherlock
My Lords, I rise to move Amendment 6, which is in my name and that of my noble friend Lord McKenzie as well as the names of other noble Lords. We rehearsed this issue in Committee but I return to it on Report because, with apologies, I found the response from the Minister so disappointing. Because it is the last amendment of the day, I will be brief.
The Government estimate that some 232,000 families will claim statutory maternity pay, or SMP, in 2012-13, rising to 235,000 in 2013-14. Using the Government’s own inflation forecasts, the Children’s Society calculated that if a woman were on maternity leave now with her first child, and had her second child in 2015, she would find that she received about £184 less in real terms during her second period of maternity leave than her first. If her earnings were below the flat-rate level of SMP, that figure rises to £217. Just when a family needs money most, support is being cut.
This is by no means the first assault on the living standards of mothers of young children. In Committee, I recited the litany of cuts to support for parents of new children. I will spare the House the entire list but will just reprise one or two. We have seen the abolition of the health and pregnancy grant, the abolition of the Sure Start maternity grant for all but the first child, the abolition of the baby element of child tax credit and the cancellation of the planned toddler element, the abolition of the government contribution to child trust funds, cuts to the percentage of childcare help and much more. Since then, the Children’s Society has analysed in detail the impact of those changes. The results are shocking. They have calculated that a working couple about to have a second child in 2015 could find themselves over £7,000 worse off than they would have been over the following two years, simply as a result of changes since 2010. That is the context for this amendment and, indeed, for this Bill.
My second concern is that the Minister failed entirely in Committee to address the question that I raised as to the rationale for including SMP in this Bill. Noble Lords may recall that the Prime Minister’s official spokesperson responded to critics by telling the Telegraph that it was a “personal choice” for parents to decide whether to return to work or to stay at home after having a child. Of course it is, just like deciding where to go on holiday, where to shop, or where to buy your children’s clothes is a personal choice—if you have enough money, that is. If not, then it is George at Asda for you, rather than Giorgio Armani Junior. Money is what makes people have choices, not simply the fact of having a baby.
However, that was not the reason that the Chancellor gave when he announced this Bill back in the autumn. He claimed that the legislation was necessary to ensure that the welfare state was fair to working people, and not to those who lie in bed with their blinds down when their neighbours go to work. In Committee, I asked the Minister to explain how SMP fits with his argument. Let us recall that SMP is a contributory benefit, paid only to women who have given up work to give birth or to care for a new baby, after having been in continuous employment for the requisite period and earning enough to require their employers to pay national insurance contributions on their behalf. However, answer came there none. I therefore ask the Minister one last time: how does including SMP in this Bill fit with the Chancellor’s narrative, and why should pregnant women and new mothers pay the price for a tax cut for millionaires? I look forward to the answer. I beg to move.
Lord Bach
My Lords, I very much support what my noble friend has said in moving the amendment. The House seems very quiet this evening, following the shenanigans of this afternoon when it looked very much to some of us as though there was an organised group on the other side—many of whose members are no longer present, of course, it being after dinner time—who found a huge interest in this Bill in order to keep the Report stage going. Be that as it may, those times are obviously past.
If I read correctly, the Minister—to whom I attach no blame at all for what has been going on, of course—said in reply to my noble friend in Committee that the cost in the last of the three years of allowing this amendment would be around £50 million. Let me tell her one way, at least, that that £50 million could be found five times over. The communities department has £250 million to spend, and has done for some time, in order to make rubbish collections weekly rather than fortnightly. No doubt that is a priority for some, and no doubt it has a validity of its own. However, compared to the wrong which is being done by this Bill—and by others too—and in particular the wrong addressed by my noble friend in her amendment, could the Government not get some proper sense of priority as to what does and does not matter, even at this late stage? That is £50 million, compared with £250 million that is sorted away. This was not mentioned, of course, by the noble Lords who were this afternoon defending the Government’s position with such vigour, because it is an inconvenient truth that in government there is spend which could be much better spent on protecting those who are going to be hammered by this legislation. I ask the noble Baroness to answer my question: what is wrong with spending part of that £250 million, and agreeing to my noble friend’s amendment?
Lord Bates
My Lords, I was not intending to speak on this amendment, but I rise at the prodding of the noble Lord, Lord Bach, who seemed to suggest that some kind of operation was going on in the conduct of our discussion. If there was any operation, the strangest thing about it was that there was not a single speech from the Back Benches of Her Majesty’s Opposition. It is amazing. We are talking here about what we recognise as being critical issues. On each amendment, there were probably three speeches from the Back Benches here, but not one single speech from the Back Bench of the Official Opposition. If the noble Lord wants to come back on that, I shall be more than happy to give way.
Baroness Hollis of Heigham
I overheard one of the government Whips encouraging those who sit on the Privy Council Bench to speak and speak and to string out it out to delay the votes. I heard that myself. Those Members made their own decisions and I do not in any sense criticise the quality of their speeches. I also saw briefing being passed from the Minister and so on. Perhaps the noble Lord could not see from where he was sitting in the same way as we who have a front-stalls view of what is going on might have done, but, certainly, there was active encouragement of three privy counsellors, none of whom has been known to display any interest in social security hitherto—unlike the noble Lord. All credit to the noble Lord: he has stayed with us; he works on these matters; and he tries to take a balanced approach. I make no criticism of him, but, as to today’s proceedings, there was not a shadow of doubt. Perhaps the noble Lord was sitting in the wrong place, in more ways than one.
Lord Bates
That is a wonderful way of expressing it. The noble Baroness has been complimentary to me; let me reciprocate by stating a fact. She knows more about this subject than anybody else in this Chamber and everybody would immediately acknowledge that. Our previous discussions in Committee and at Second Reading were enhanced immeasurably by her thought-provoking contributions. Now, what is more unusual: that a few Members on Her Majesty’s Government’s side should rise to speak in support of the amendments or that the noble Baroness did not make one speech during their consideration?
Baroness Hollis of Heigham
I am grateful to the noble Lord for letting me come back on this. Today, we started with a key debate on whether it was right to tie future Secretaries of State’s decisions on the rate of uprating of benefits. My noble friend Lord McKenzie moved the relevant amendment and we had an extensive discussion. We then had a hugely important debate on children, a hugely important debate on disabled people and then an important debate led by the noble Lord, Lord Kirkwood. The noble Lord, Lord Bates, will know as well as I do that, as we had only effectively half a day—because people are not here after dinner—to discuss four key issues, either we had to postpone key debates to a period of time when no one would be here, including his Privy Council colleagues, to listen and take part, or we acted in a way that was self-disciplined in order that the arguments at least in their basic form could be heard, so that those who wished to—and there were not very many on his side—could come in and listen to those points being made to see whether they affected their vote. We were trying to act responsibly. Had we had two days on Report, we could have paced it differently and I for one would have been delighted to have spoken at least three times on each amendment and made a dozen speeches.
Lord Bates
I take the noble Baroness’s point and shall not pursue it further. I had not intended to make that point, but it is important. Perhaps I may say one other thing. Since I have trodden on a few toes, let me tread on truly sacred ground.
Lord Bates
I am going to deal with it. I want to come back to the point that I was going to make previously, because I think it is relevant. For the first six weeks of the 39 weeks of statutory maternity pay, 90% of the benefit that is payable is linked to earnings. The point that I was going to make is that, while benefits have increased in line with inflation by 20% in the past five years, as we have heard many times, average earnings have increased by only 10%. In fact, according to the Centre for Social Justice, that increase for some of the lowest earners, particularly females, has been 7.8%. I wanted to make the point that in terms of helping with maternity pay at that particular point, the best we can do is see a growth in salaries. If salaries grow, it is axiomatic that the statutory maternity benefit in that first six weeks will be enhanced. The problem is that salaries have been suppressed.
The OBR report relating to the Bill that we are debating shows some quite encouraging signs. For the first quarter of 2014, we have a forecast of increases in the order of 4.5% per year, growing to 4.6% during the period of this Bill. Surely increases of that nature, when linked to the statutory maternity pay of which we are talking, must have some effect. In the same way, I inquired of the noble Baroness, Lady Sherlock, who introduced this amendment, whether the stark numbers that she presented to us contained any element that reflected the suppression of wages that we have seen over the past five years. This has been seen particularly in the private sector, although it has been in the public sector as well, where wage increases are subject to a 1% cap. That is the point that I ask the noble Baroness to clarify when she responds.
Baroness Howe of Idlicote
My Lords, it is good to get back to the subject of the Bill. I support the amendment of the noble Baroness, Lady Sherlock. Although everyone is inevitably suffering under this economic disaster, it is surely completely counterproductive for the Government not to make specific arrangements for those who produce and support children. This is a particularly important generation of children. We will all need to depend upon them and will need to help them develop to their full potential if we are to have a brighter and more economically successful future. Not to do so will also specifically disadvantage—I would argue even discriminate against—women.
Whatever hopes there are for both parents to share childcare in future, to include statutory maternity pay at present would clearly disadvantage women, on whom the main responsibility remains for their children’s upbringing. It will also particularly disadvantage single parents, the vast majority of whom are women. While 30% of all households with children are affected, 95% of lone parents—that is 2 million—are affected by the Bill. The Government have already estimated that the Bill will push a further 200,000 children into poverty, so what effect will this economic deprivation have on this vitally important next generation of children and their well-being?
First, there is their health: the 2010 Marmot review highlighted how poor health is strongly linked to low socioeconomic status. Children in the lowest-income households, for example, are three times as likely to suffer mental health problems as their more affluent peers. At the age of 33 they are at increased risk of severe long-term and life-limiting illness.
Next is their education. The link between economic disadvantage and educational underachievement is widely recognised by academics, as well as by parliamentarians. Children’s cognitive development, related to parental social status, is evident as early as 22 months. The earliest high-achievers from deprived backgrounds are overtaken at five years, with this gap widening by the time children reach 10. DfE figures also show that only 26.6% of secondary school pupils eligible for free school meals achieved five or more A* to C GCSEs, compared with 54.2% for all the rest.
In employment, inevitably, the educational and health inequalities drive a similar divide. Young people who are NEET are more likely to have grown up in socially disadvantaged households, for example, from single-parent households and those where parents also have low educational qualifications.
Finally, there are family relationships and children’s subjective well-being. Living on a low income is stressful and difficult and can, and often does, adversely affect family life and intra-familial relationships, as well as children’s assessment of and satisfaction with their lives. Poverty can make strong parent-child relationships more difficult, and research shows that children growing up in poverty are more likely to suffer from low self-esteem and to be socially isolated.
Having listened to the excellent speech of the noble Baroness, Lady Sherlock, and a range of other subjects also brought into the conversation, I hope that the Government will find a way to accept this very reasonable amendment.
Baroness Stowell of Beeston
My Lords, I must say to noble Lords on the Benches opposite that we have had a number of debates about the economic context in which we are making these changes, and I have been disappointed that more noble Lords have not found themselves moved to contribute to them so far. I am glad that there have been more contributions to this debate.
Baroness Hollis of Heigham
My Lords, I thought that we had discussed this already. Can the noble Baroness help me by describing how we could have made our contributions? As she knows, four or five of us have regularly taken part in social security debates—including my noble friends Lady Lister and Lady Donaghy, and me, among others. If we had made our contributions, does she think that we would have got to the important debates on disability and the 3% trigger amendment before dinner? If not, does she think that it would have been fair to disabled people to exclude them from the possibility of Parliament reconsidering a foolish decision?
Baroness Stowell of Beeston
In my short time in this House, we tend to sit until about 10 pm and have debates on amendments at all times that we are sitting. I did not realise that we were expected to have debates before a certain time at night.
Let us focus on statutory maternity pay. I remind the House that the UK 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 states that a woman should benefit from 14 weeks paid maternity leave; we provide 39 weeks. The directive states 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 per week. That compares to the statutory sick pay rate of £85.85 per week. In addition, the latest available data from the OECD show that the proportion of our GDP spent on maternity and parental pay is higher than that in Germany or France.
It is also worth reflecting on the fact that in the past decade, the length of time for which statutory maternity pay was payable more than doubled. Under the previous Government, it was doubled. It is important to be aware of the baseline that we are starting from.
Yes, the decisions that we have to take on statutory maternity pay will mean a slightly smaller increase for people over the next few years, but that is in the context of a strong and effective maternity architecture in our country which will remain firmly in place. Indeed, the Government are committed to make this architecture even stronger. Noble Lords will soon be debating provisions in the Children and Families Bill which allow working parents to choose which parent takes parental leave and parental pay to care for their child in the early years.
It is also important to understand these changes in the context of other government reforms that support women, families and children and help make positive changes to their lives. I said this in Committee, but it is important, so I will repeat it. For example, a woman working full time at the 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.
We have debated universal credit many times before, and it is acknowledged that its purpose is to make it worth while for people to move back into work. Once universal credit is introduced, some 800,000 out-of-work lone parents would benefit significantly if they started to work just 10 hours per week. In nearly all such cases, these parents would see at least £40 more in their pocket per week than they would have done under the current system. Also as part 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 fewer than 16 hours per week. That means 100,000 more working families will be helped with their childcare costs.
Looking ahead, as my noble friend Lord Newby mentioned in one of the earlier debates today, we have set out changes that will increase eligibility of support to five times as many families as currently is the case through a new tax-free childcare scheme. As part of these changes, we have also announced today a further £200 million additional support in universal credit that will provide working families with the equivalent of 85% of their childcare costs where the lone parent or both parents pay income tax.
When referring to various different payments to families, the noble Baroness, Lady Sherlock, said that she could go on; so could I. There are other things that the Government are doing to support families and women. The support for families that the Government provide is about more than income transfers. I do not deny that families value them and they can make an important difference, but money is often better invested in interventions that really can change lives. In demonstrating this today, I have tried to explain what the Government are doing in addition to the comprehensive support that we provide to new mothers and to show how much there is in providing for families in the right way.
This amendment would reduce savings from the Bill by around £50 million in 2015-16. As I have said, we have taken none of the decisions in this Bill lightly, but we have to recognise that if the savings do not come from the measures set out in the Bill, that could clearly put additional pressures on to public services. The noble Lord, Lord McKenzie, mentioned alternatives that he would like to propose. They are not ones that I would point to because these amendments are part of a Bill that is about reducing by a smaller amount the increase that we pay in benefits.
To answer the noble Baroness’s question about why we are including statutory maternity pay, we have sought to address the very significant welfare bill, which I am afraid is unsustainable, but doing so in way to protect the most vulnerable. We discussed and debated that at length earlier today. Regrettable as it is to have to make any reductions or cap any of the increases in the way that we have, the infrastructure and architecture there for women and families are strong. They provide sound support that will make a real change to people’s lives. While I recognise that these are difficult decisions, I hope that I have provided enough assurance to the House to show that the Government take their obligations to parents seriously and that we will continue to provide a supportive environment for new mothers in the years to come. I hope therefore that the noble Baroness can withdraw her amendment.
Baroness Sherlock
My Lords, I am grateful to all noble Lords who have spoken in this debate, especially to my noble friend Lord Bach for his strong support, and to my noble friend Lady Hollis for her interventions. I am also grateful to the noble Baroness, Lady Howe, for a thoughtful and persuasive speech that highlighted the impact of these cuts on the next generation. I thank her for that.
In response to the noble Lord, Lord Bates, I would say three things. First, we have debated this a lot. We sat through the previous stages, and we have all contributed in long form to the Committee stage and reflected a great deal on this. I hope that we now know what each other thinks. Certain noble Lords contributed to every amendment but they did not make five speeches; they made the same speech five times. I am not sure that that took us much further. None the less, we are doing our best here today.
I say to the noble Lord that it is worth noting that the poorest mothers get the flat rate of SMP and are therefore unaffected by any impact on wage growth, so that point would not affect them. On the question of wage suppression, the consequence of that—in fact, of the whole Bill—is a double whammy for those who are finding that their wages are frozen or have been kept down, because these benefits and tax credits are the very things that will normally help to compensate the individuals as well as acting as stabilisers more broadly.