Prayers
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Points of Order
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Speaker. You will know that the parliamentary website states officially:
“If the Queen’s Speech is amended, the Prime Minister must resign.”
The Fixed-term Parliaments Act 2011 has obviously changed what constitutes a no confidence motion but, historically, any amendment to the Queen’s Speech has been termed a no confidence motion.
I raise that question because the ministerial code of conduct, which is embodied in a motion of this House, states:
“Parliamentary Private Secretaries are expected to support the Government in important divisions in the House. No Parliamentary Private Secretary who votes against the Government can retain his or her position.”
I understand that the Prime Minister is letting his PPSs know that they are free to vote as they wish. Does that not suggest to you, Mr Speaker, that the Prime Minister has no confidence in his own Government?
Mr Speaker
What I would say to the hon. Gentleman is twofold. If he is quoting accurately, the website is wrong and can speedily be put right. On the second point, I simply say for his benefit and that of the House that the selection of amendments has not yet taken place. He is therefore in the realm of the hypothetical. Whether he wishes to be there I cannot say, but I do not and, I trust, neither does the House.
George Galloway (Bradford West) (Respect)
On a point of order, Mr Speaker. At 3 o’clock in the morning on 6 May in Shapla square in Dhaka, the capital of a Commonwealth country, Bangladesh, thousands of sleeping demonstrators were set upon by commandos. The reports are that significant numbers of people have been killed. Have you had any indication that the Foreign Secretary wishes to come to the House and make a statement about those extraordinary events?
Mr Speaker
I have received no such indication. However, when I think of the hon. Gentleman and an issue of concern to him, I almost invariably think of dogs and bones. Therefore, I imagine that this is a matter to which he will take other parliamentary opportunities to return. We look forward with interest and anticipation.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
On a point of order, Mr Speaker. You may be aware that last Thursday, Andrew Dilnot, the chair of the UK Statistics Authority, wrote to the Secretary of State for Work and Pensions regarding his misuse of official statistics on the benefit cap. It was found that, once again, the Department was making claims that were unsupported by official statistics. That follows similar issues regarding the Child Support Agency statistics in February, and also extends to the Secretary of State for Health and his health funding claims last December, and even to the Prime Minister’s use of official statistics last October. The Work and Pensions Committee has also—
Mr Speaker
Order. I allowed the hon. Lady to pursue—[Interruption.] Order. No assistance from anybody is required. I let the hon. Lady raise her point of order, but it was in danger of becoming an abuse. From what I heard, the matter that she raised is obviously of concern to her and to others, but is not a point of order or a matter for the Chair. There are opportunities, which I am sure she will use, to draw attention to the issue. We will leave it there.
Debate on the Address
Health and Social Care
(11 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Health (Mr Jeremy Hunt)
In challenging circumstances, the NHS is performing extremely well. Front-line staff are making heroic efforts to control costs as they cope with the pressures of an ageing population and when 1 million more people are using A and E every year than at the time of the last election.
The Opposition run down NHS performance, but the reality is a service delivering more than it ever did on their watch: 400,000 more operations every year than under Labour; the number of people waiting more than a year for an operation down from over 18,000 in May 2010, to just 665 at the end of February; MRSA infections halved; mixed-sex accommodation nearly abolished; dementia diagnosis rates going up; and more than 28,000 people receiving life-saving drugs from the cancer drugs fund that Labour refused to set up. As we debate health, care and support today, I take the opportunity to commend and thank all the dedicated professionals who work extraordinary hours, day in, day out, for their part in making this happen.
If we are to prepare for the future, however, we need to do more. In our generation, the number of over-85s will double, the number of people with dementia will pass the 1 million mark, and 3 million people will have not one, not two, but three chronic conditions to cope with, on top of the other pressures of old age. We must be there for each and every one of them—the founding values of the NHS would accept nothing less—and to do so we must be able to answer three big questions: how can we be certain that people receive compassionate care even when they are not able to speak for themselves; how can we deliver joined-up care to people who use the NHS and social care system on a regular basis; and how can we ensure that sustainable funding is in place for care and support?
David Tredinnick (Bosworth) (Con)
The Secretary of State will be aware of widespread concern among the herbal medical community that there is no statutory regulation on that area in the Care Bill. Does he agree that if polymorbidity is to be dealt with we must have firm regulation, and that just licensing herbs, as the European Union wants, would destroy the industry?
Mr Hunt
My hon. Friend follows such matters extremely closely and I reassure him that the Government will update the House on that issue very soon.
The Care Bill will take a critical step forward in addressing each of the big questions that I raised, so let us consider how. First is compassionate care. Labour’s target culture led to warped priorities in our NHS and appalling human tragedy. No one disputes the value of targets, and the four-hour target played an important role in improving A and E departments. We do not, however, need targets at any cost, as we saw at Stoke Mandeville, Maidstone and Mid Staffs.
Stephen Timms (East Ham) (Lab)
I agree with the Secretary of State about the value of the four-hour target. Is he disappointed, as I am, that that target has so often been missed in major A and E units over the past few months?
Mr Hunt
The right hon. Gentleman says “rubbish” from a sedentary position, but the Francis report—if he read it—mentioned 50 warning signs that were missed by his Government about Mid Staffs. He himself rejected 81 separate requests for a public inquiry into what happened. The Labour party created a lame duck Care Quality Commission, unable to speak out or force change, and an NHS where too often the system was more important than the individual.
Andy Burnham
At the outset, will the Secretary of State correct the record and remind the House that it was my decision, two months after being appointed Secretary of State in June 2009, to appoint Robert Francis to conduct an independent inquiry?
Mr Hunt
The right hon. Gentleman’s decision not to have a public inquiry that revealed extremely important information has meant that we are finally addressing the issue that his Government failed to address.
The Care Bill will include a vital element of our response to the Francis report, including regulatory clarity on who is responsible for identifying problems, driving up standards, and operating a single failure regime when urgent changes are not made.
Miss Anne McIntosh (Thirsk and Malton) (Con)
My right hon. Friend will be aware that there have been teething problems with the 111 telephone service, which could be an essential tool to treat people in their own homes, certainly for palliative care. Will he provide stringent new guidelines to all providers to ensure that such teething problems are addressed and to enable the 111 service to operate as it should?
Mr Hunt
My hon. Friend makes an important point. Teething problems have led to unacceptable levels of service in some parts of the country, which we are in the process of sorting out. As we sort them out, we also need to look at the long-term causes of the problems of out-of-hours provision and the fact that the general practitioner contract of 2004 has led to a removal of GP responsibility for out-of-hours care, which means that there is much less public confidence than there needs to be in the whole picture. We need to sort that out, too.
Dame Joan Ruddock (Lewisham, Deptford) (Lab)
Will the Secretary of State give way?
Mr Hunt
I will make some progress, then take more interventions.
The Care Bill will allow for comprehensive Ofsted-style ratings for hospitals and care homes, so that no one can pull the wool over the public’s eyes as to how well or badly institutions are performing. The Bill will make it a criminal offence for any provider to supply or publish deliberately false or misleading information. We cannot legislate for compassion, but in a busy NHS, we can ensure that no institution is recognised as successful unless it places the needs of patients at the heart of what it does. The Care Bill will be a vital step forward in making that happen. That compassion should extend not just to patients, but to carers. The Bill will put carers’ rights on a par with the people for whom they care. They will have a right to a care assessment of their own and new rights to support from their local authority.
Barbara Keeley (Worsley and Eccles South) (Lab)
Is the Secretary of State as disturbed as I am that the Bill puts young carers backwards a step? Adult carers’ rights might be taking a step forward, but young carers’ rights are not. We must address that during the passage of the Bill.
Mr Hunt
We are not putting young carers backwards. We very much recognise their needs—and a children’s Bill will address their concerns in a way that I hope will put the hon. Lady’s mind at rest.
The second issue that we need to address for the NHS going forward is joined-up care. It is shocking that, in today’s NHS, out-of-hours GP services are unable to access people’s medical records; that paramedics and ambulances answer a 999 call without knowing the medical history of the person whom they are attending; and that A and Es are forced to treat patients with advanced dementia, who are often unable to speak, without knowing a thing about their medical history.
Dame Joan Ruddock
I am grateful to the Secretary of State—out-of-hours is relevant to my point. He will be familiar with Newark. He closed the A and E department and the rate of deaths among local residents went up from 3.5% to 4.9%. Why does he therefore persist in saying that, if he downgrades Lewisham A and E, 100 lives will be saved across the south-east of London?
Mr Hunt
Because that is what the independent medical advice I have received has told me. The right hon. Lady should be very careful about the Newark statistics, because the increase in mortality rates, which is worrying and should not happen, happened before the A and E was downgraded. It is very important that we do not get the figures wrong.
Jim Dowd (Lewisham West and Penge) (Lab)
Will the Secretary of State give way?
Mr Hunt
I am going to make some progress.
Before I took the right hon. Lady’s intervention, I was talking about joined-up care. The truth is that Labour’s disastrous IT contract wasted billions and failed to deliver the single digital medical record that would transform the treatment received by so many vulnerable older people. Yes, it was a financial scandal, but it was also a care scandal. Last year, 42 people died because they received the wrong medicines. There were more than 20,000 medication errors that caused harm to patients, and 127,000 near misses. On top of that, structures such as payment by results were left unreformed for more than 13 years, making hospitals focus on the volume of treatment over and above the needs of individual patients. The Care Bill will help to address those issues by promoting integrated care. It creates a duty on local authorities and their partners to co-operate on the planning and delivery of care; it emphasises the importance of prevention and the reduction of people’s care needs; and, by making personal budgets the default and not the exception, it will significantly increase the control people feel over their care.
Andy Burnham
I am grateful to the Secretary of State for giving way, but the trouble with him is that, often, there is a huge gap between the rhetoric he comes out with at the Dispatch Box and the reality on the ground. He says he is promoting integrated care, but what does he say about the pioneers of integrated care in Torbay, who are threatening to take legal action because of the requirement for compulsory competitive tendering of services? Under this Government, are not the beacons of integration being demolished by his free market?
Mr Hunt
It is the right hon. Gentleman who has a problem with the difference between rhetoric and reality. Let me tell him about the reality of what happened to integrated care under Labour. Between 2001—[Interruption.] The right hon. Gentleman intervened, so perhaps he would like to hear the reply. We are talking about integrated care. On his watch, between 2001 and 2009—eight years during which Labour was in power—hospital admissions went up by 36%. In Sweden, where people started thinking about integrated care, such admissions went up by 1%. That is how badly Labour failed to do anything about integrated care when it had the chance. We are doing something about it. If the Opposition listen, I shall explain what.
Mr Hunt
I am going to make some progress.
The third question that the Care Bill addresses is about sustainable funding for care. We are all going to have to pay more for social care costs, either for ourselves or our families. Tragically, every year, up to 40,000 people have to sell the homes that they have worked so hard for all their lives to fund their care.
Our system does not just fail to help those who need it; it actively discourages people from saving to ensure that they have the funds. In 1997, Labour promised a royal commission on long-term care. The commission reported in 1999, and its recommendations were ignored. We then waited 10 whole years for a Green Paper, which arrived in 2009 and, again, was able to deliver nothing.
In stark contrast, in just three years, the coalition Government commissioned a report from Andrew Dilnot, have accepted it and are now legislating for it. The Care Bill will introduce a cap on the costs that people have to pay for care in their lifetimes. With a finite maximum cost, people will now be able to plan through their pension plan or an insurance policy. With a much higher asset threshold for state support, many more people will get help in paying for their care.
Sheila Gilmore (Edinburgh East) (Lab)
I respectfully suggest that the Secretary of State should look at the situation north of the border, where reform to change who pays has worsened the situation because no extra funding was put into care; all that happened was that we shuffled around who actually paid. Will he look carefully at that situation so that it is not repeated? How much extra funding is he going to put into the system?
Mr Hunt
I agree with the hon. Lady that the amount of financial support is important. I gently say to her that her party wants to cut the NHS budget, which would make the situation vastly worse.
The Bill is a vital element of our plans to improve the lives of the frail and elderly and of people with long-term conditions and disabilities, but it is only one element. Other areas that do not require legislation will come together in a plan for vulnerable older people. The plan will consider all aspects of how we look after older people most in need of support from the NHS and social care system. It will look at how our hospitals are set up to support frail and elderly patients, particularly those with dementia, in emergencies. Of course, we must continue to give people with serious needs immediate access to highly specialised skill, but in many cases we could offer better alternatives outside hospital. That would improve clinical outcomes and reduce pressure on A and E departments.
Secondly, the plan will look at primary care—in particular, the role of GPs in supporting vulnerable older people. Active case management of vulnerable people is making a huge difference in some parts of the country and we will look at whether the primary care sector as a whole has the incentives, investment and skills to deliver that. We will also consider the provision of out-of-hours services and how to restore public confidence in them following the disastrous changes to the GP contract in 2004.
Thirdly, the plan will look at the barriers and incentives that prevent joint commissioning and stop people from getting joined-up care. In particular, it will consider the operation of financial incentives in the system, which can act as an unnecessary and counter-productive barrier. The Minister responsible for care, my hon. Friend the Member for North Norfolk (Norman Lamb), who is leading on integration, will announce further practical steps forward later this week.
I intend to announce the plan in the autumn, with implementation from April 2014. It will require a great deal of careful work, ask difficult questions and make tough decisions, but if it leads to more personal, more integrated and more compassionate care, it will stand alongside the Care Bill as an important step forward in reforming the care received by millions of people.
Mr Dave Watts (St Helens North) (Lab)
Does the Secretary of State agree that that can work only if social services budgets are increased? Where will the resources come from to deal with the problems we face, and will there be an increase in social services budgets to pay for the services we need?
Mr Hunt
There is currently a difficult environment for public finance, for which the hon. Gentleman’s party bears considerable responsibility. The Labour party has given up on the budget; it says it wants to cut the NHS budget. We say that these changes are possible without cutting the NHS budget and in dealing with the inefficiencies caused when care is not joined up. Taken together, the measures represent more progress in three years than the Labour party made in 13 years. They represent our determination to prepare the country for the consequences of an ageing population.
Huw Irranca-Davies (Ogmore) (Lab)
The right hon. Gentleman knows that the cap on costs of care is a little way off the Dilnot proposals. How many weeks—surely his Department has made some calculations—would that involve for a typical older person before they reach the £72,000 cap?
Mr Hunt
The point of a cap is not that we expect everyone to have to pay £72,000 towards their care. First, through pension plans and insurance policies people can make provision so that they never have to pay that £72,000. Secondly, as part of the package, we are increasing the threshold, below which the Government help, to £118,000—much higher than it is currently—so that it will be available to help, I think, around 40,000 more people than are currently helped because of the level of the means-testing threshold.
Mr Hunt
I am going to make some progress.
Over the summer, we will consult on proposals to make the system fairer and ensure that people who should pay for NHS services do in fact do so. That will also help to ensure that our NHS remains sustainable at a time of tight public finance.
These proposals represent our commitment to ensuring a compassionate, fully integrated and sustainable system of health and social care built entirely around the needs of the patient. They represent a commitment to the NHS and social care system, which lies at the heart of our determination to make Britain the best country in the world to grow old in. [Interruption.]
Mr Speaker
Order. It is not altogether obvious whether the Secretary of State is giving way or has concluded his speech. [Interruption.] He has concluded his speech. It is usually helpful to have some indication of that.
Andy Burnham (Leigh) (Lab)
Like you, Mr Speaker, I am tempted to say, “Is that it?” I suggest to the Secretary of State that he starts reading the weekend newspapers. He began with complacent statements about how everything is marvellous and it is all going so well, but it will not feel like that to staff working in A and E. The Secretary of State’s statement will just confirm to them that he is completely out of touch.
Every day brings new signs of an NHS in distress: more ambulance queues outside A and E; more patients left waiting for a call-back by a 111 service ill-equipped to deal with their needs; more older people seeing social care support withdrawn, or struggling to pay spiralling care charges and ending up in A and E; more patients waiting hours in A and E on trolleys in corridors; and more hospitals running way beyond safe occupancy levels. This is the fragile state of the NHS today: battered and bruised by a reorganisation that nobody wanted and nobody voted for; an entire health and care system on the brink, facing huge challenges that require urgent answers. However, we will not find them in this Queen’s Speech. There is no answer to the collapse of social care, and no answer to the understaffing of hospitals or the growing chaos in A and E. On the preventable deaths and health harm caused by smoking and alcohol, there is silence.
This Queen’s Speech is the product of a dysfunctional Government who have lost any ability they once had to face up to the big challenges the country faces. It cements the impression of a failed coalition project now preparing the ground for the next election rather than governing in the national interest. What else could explain the pathetic spectacle this weekend of Government Members, spooked by UKIP, falling over themselves to say that they will be voting against their own legislative programme? Has this place ever seen something so ridiculous?
James Duddridge (Rochford and Southend East) (Con)
Will Labour give us a referendum?
Andy Burnham
I thought the new compassionate Conservative party was meant to have stopped “banging on about Europe”—that was the phrase, was it not?—but now its Members are all dancing to UKIP’s tune and reading out what Mr Crosby gives them. It will not wash. The country can see that this is a shambles of a Government who look ridiculous to the country they purport to govern. When Britain needed leadership, it got the farce of this coalition. There is no need to send in the clowns; they are already here.
Toby Perkins
Does my right hon. Friend think, like me, that perhaps the Government feel more comfortable exposing their divisions on Europe than facing up to their record on the NHS, which, as many people across the health service recognise, is an absolute disgrace?
Andy Burnham
I shall come to that point directly, because the Queen’s Speech is a diversion from the real issues, an attempt to say, “Look over here at this other issue” and divert people’s attention from the chaos the Government have visited on the NHS.
On health and care, our objection is not to the modest measures the Government are proposing. We will of course wait to see the detail, but it sounds as though we will be able to give our support to many of them. Our objection to the Gracious Speech is not to what is in it, but to what is not in it and to the unpleasant political strategy that lies behind it. As a response to the developing crisis in our health and care system, it is inadequate. Worse, however, it tries to disguise that fact by pointing the finger at others. Forget compassionate Conservatism; this is straight back to the dog-whistle tactics—failed tactics, I might add—of the 2005 general election. This is the coded message the Government want the Queen’s Speech to send: “You see all those problems with accident and emergency departments? Well it’s all down to immigration. It’s nothing to do with us.” It is a Crosby-fied Queen’s Speech that is more about positioning and politics than a serious programme for government.
Mr Edward Leigh (Gainsborough) (Con)
On a real issue that concerns people, there have been 1.1 million immigrants from eastern Europe since 2004, so I repeat the question very courteously put by my hon. Friend the Member for Rochford and Southend East (James Duddridge). The right hon. Gentleman talks about leadership, so will he show some and tell us whether the Labour party would grant the British people a referendum on Europe? Yes or no?
Andy Burnham
It is interesting, isn’t it? Here we are, in the middle of this Parliament, discussing the Queen’s Speech and health and social care, and what is the only issue Conservative Members can raise? Europe! We are talking about people waiting hours on end in A and E, about ambulances queuing outside, about a 111 service that does not ring anybody back, and about social care close to collapse, but they have nothing to say about those issues. Instead, they bang on about Europe. That is because they are preparing the ground for the 2015 election. The nasty party is back, scapegoating vulnerable people and stoking social division as a means of diverting attention from its own record, so get ready to hear how problems in the NHS are caused by health tourism and are nothing to do with the coalition’s toxic medicine of fragmentation, privatisation and budget cuts.
Chris Bryant
Is there not another side to the argument about immigration in relation to the NHS, which is that many of the people who keep the NHS functioning are from outside this country? One of the biggest problems facing accident and emergency departments around the country is that they cannot recruit enough consultants, yet the system that the Government have introduced on migration for those people is making it more difficult to recruit overseas. Would not a more enlightened attitude give us a more effective NHS?
Andy Burnham
As ever, my hon. Friend says it more eloquently than I can. The Government are playing politics rather than addressing the national interest. People will see that, but at least the Government have revealed their hand. We will work hard over the next two years to show who is really to blame and expose this Government’s failures on social care, the NHS and public health. Let me take each in turn.
At face value, the social care measures that the coalition is proposing sound like progress towards a fairer and simpler system. Indeed, the Care Bill builds on many of the recommendations of the Law Commission’s review of adult social care legislation, which was initiated by the last Government and included in the White Paper I published before the last election. National standards for eligibility could help to bring consistency to the care system, and stronger legal rights for carers are long overdue, as is improved access to information and advice. However, the question in the minds of many today, particularly councillors watching this debate, will be: how on earth will we be expected to pay for all that? That is when we realise again that there is a huge gap between the rhetoric we hear from the Dispatch Box and the reality on the ground across England. More than £1.3 billion has been cut from local council budgets for older people’s social care since this Government came to power.
Just last week, the Association of Directors of Adult Social Services said that Government cuts to care and councils would mean a further raid of £800 million from care budgets in the next year. The Care and Support Alliance has said that the system is in deep crisis and that without
“appropriate funding for the social care system…the aspirations set out in the Care Bill will not be reached.”
The Care Bill does nothing for people who face a desperate daily struggle to get the support they need right now, with many paying spiralling charges for their care. That is the effect of this Government’s drive to cut councils to the bone. They are foisting huge care charges on the most vulnerable people in our society. These are the coalition’s dementia taxes.
John Glen (Salisbury) (Con)
Does the right hon. Gentleman not understand that the people of this country would have more confidence in what he says at the Dispatch Box had he not said in the last general election campaign that it would be irresponsible to safeguard the NHS budget, which is what this Government undertook to do?
Andy Burnham
I will come directly to that quotation in a moment, because the hon. Gentleman will remember that at the last election he stood on a manifesto promising real-terms increases for the NHS. I hope that when he speaks later—or if he wants to get up right now—he will tell me whether they have been delivered.
Andy Burnham
Government Members are just embarrassing themselves. When they cannot answer a question, they try to raise another one or go on about Europe. It is just not good enough. The answer is—though the hon. Gentleman cannot admit it—that Andrew Dilnot said this Government had cut the NHS. It is there in black and white. That is what they have done, and they stood on a manifesto promising the opposite. I secured a budget to protect the NHS at the last election. I said that I could not give real-terms increases because that would be irresponsible; and as it turns out, nor can the hon. Gentleman. His party was writing cheques that it simply could not cash, and that is a fact.
The Care Bill does nothing for those hit by the coalition’s dementia taxes right now. Since this Government came to power, the average care user has paid £655 a year more for home care than when they came into office. Overall, that is around £6,800 a year. Dial-a-ride transport services have doubled in price over the same period, from an average of £1.92 to £4.12. Meals on wheels now cost an extra £235 a year, while people in Conservative areas pay more for each service on average than friends and family in Labour-controlled areas—on average, £15 a week or £780 a year more for home care. That is the record of this Government.
Stephen Mosley
The right hon. Gentleman has been speaking for more than 10 minutes and he has not once said what Labour would do. Will he come to what the Opposition propose we should do?
Andy Burnham
I assure the hon. Gentleman that I will come on to that, but I have a job to do in holding this shambles to account and that is exactly what I am doing.
Under this Government, people are paying more out of mum or dad’s bank account for care, which often does not come up to the standards that they want, because their council has been cut to the bone. What are they meant to make of a promised, far-off cap of £72,000, or £144,000 for a couple? The Government are giving a little with one hand, while with the other they are grabbing a fortune from people’s bank accounts.
Barbara Keeley
Does my right hon. Friend acknowledge that this is not even a question of £72,000 or £144,000, because those caps will be metered at the level that the council would pay, and will take no account of top-ups or accommodation costs? I have seen examples that show that people might have to pay £250,000 before they get anywhere near the cap and any help from the state.
Andy Burnham
My hon. Friend is absolutely right. The cap is a mirage, and this will not feel like progress to people who are paying care charges. Indeed, it is a cruel con trick. The Government are loading extra charges on people while telling them that they might benefit from a cap in a number of years. This simply means that more people will be paying right up to the level of that £72,000 cap.
How can it be fair to pay for the cap by raiding council support? That does not make sense. Those of us who were involved in the cross-party talks—the failed cross-party talks, I might add—will remember that a question was put directly to Andrew Dilnot. He was asked whether, if there was not enough money around, it would be better to pay for a cap or to pay to support councils to ensure that the baseline was not cut further. His clear answer was that we had to do both. He said that it would not make sense to do one without the other, yet that is what this Government are doing—
Andy Burnham
That is what this Government are doing. A cap is ineffective without long-term funding for the future of social care, and the failure to face up to the crisis in adult social care budgets that Conservative councillors are talking about will leave people with the impression that this Health Secretary is fiddling while Rome burns. The social care system in England is close to collapse, and the reality behind the Government spin is that, under this Government, people’s savings are being washed away more quickly than ever before.
I want to turn now to our accident and emergency services. The crisis in social care is the predominant driver of what we are now seeing in our accident and emergency departments. If people’s services are withdrawn, or if they cannot afford to pay for them, they are more likely to struggle and fall ill at home and to end up in hospital. That is bad for them, and it costs the NHS more. Also, NHS staff are finding that people who are ready to leave hospital cannot be discharged because the necessary support cannot be put in place. Beds are not being freed up on the wards, and A and E therefore cannot admit people to the wards because there is no space. A and E then becomes full, which results in ambulances queuing up outside because they cannot hand over patients. The system is now backing up right through A and E.
Andy Burnham
The Secretary of State is nodding; he should do something about it. This is happening on his watch. Across the country, hospitals are operating at levels way beyond safe bed occupancy—[Interruption.] He nods, but I am saying, “Do something. Don’t just nod!” We need action from the Secretary of State.
Let me return to the quote that I mentioned earlier. People love to say that I would have cut the NHS. For the record, I have never said that I would cut the NHS. At the last election, I promised real-terms protection for the NHS. The Conservatives promised real-terms increases, which have never been delivered. Let me read that quote in full:
“It is irresponsible to increase NHS spending if the effect is that it is damaging, in a serious way, the ability of other services to cope…that are intimately linked to the NHS. The health service needs functioning day care, and housing”
and meals on wheels.
That warning has now come true.
Andy Burnham
I will give way to the Secretary of State, but I ask him to address this point. He has paid for the so-called ring fence on the NHS by ransacking local government funding, and that makes no sense whatever.
Mr Hunt
If the right hon. Gentleman looks at the figures, he will see that real-terms spending on the NHS has gone up since Labour was in power. Given that he thinks it irresponsible to increase the NHS budget, does he agree that if he were to follow his own policy, he would now need to cut that budget from its current level? That is Labour policy.
Andy Burnham
I do not think the right hon. Gentleman is listening. I said that if there were to be any increase, it should go into supporting social care. I now hear that Government Members are proposing emergency transfers from the NHS budget to social care because of the crisis that the Secretary of State has created.
Hugh Bayley (York Central) (Lab)
Surely the Secretary of State has forgotten that he received a letter in December from Andrew Dilnot, the chair of the UK Statistics Authority, which said that
“we…conclude that expenditure on the NHS in real terms was lower in 2011-12 than it was in 2009-10…In light of this, I should be grateful if the Department of Health could clarify the statements made.”
Andy Burnham
I am very grateful to my hon. Friend. He has now embarrassed the Secretary of State who, just a moment ago from the Dispatch Box, claimed the opposite. Similarly, the Work and Pensions Secretary was pulled up last week for doing exactly the same thing. They think they can stand there and say whatever they like, and they think they can get away with it, but they cannot, because people have seen through them. They have cut the NHS; they have broken the central promise on which this Government came to office. Now they are saying that the pressure on A and E has nothing to do with social care funding or NHS funding, but is all to do with the GP contract in 2004. That is what they have been saying on the radio for the last three weeks.
Let the Government answer this. In 2009—five years after the GP contract came into force—98% of people were seen within four hours at A and E departments across England. What we have seen recently is that, week after week, major A and E units are missing their lowered target. That is the reality right now, and the Secretary of State had better start facing up to it.
Dame Joan Ruddock
My right hon. Friend will have heard me refer to the situation in Newark, when intervening on the Secretary of State. Does my right hon. Friend agree that when a promise is made that closing or downgrading an A and E will save lives, that is what one logically expects to happen? The fact that the death rate subsequently went up is an indictment of what the Secretary of State has done. Does my right hon. Friend agree that when we cannot meet the four-hour target for A and E throughout the country, it is ludicrous to close existing, well-functioning A and E units?
Andy Burnham
I could not agree more with my right hon. Friend. All over the country, we hear that A and E is under intense pressure. Such is the importance of these services to every community that changes should be made only if there is a compelling clinical case to support them. If clinicians can demonstrate that more lives will be saved and disability will be reduced by changing A and E services, I think every Member should have a moral obligation to support them, but when the changes are financially driven—my right hon. Friend knows this better than anybody, as the Secretary of State has downgraded a successful A and E in Lewisham to deal with problems in another trust—that simply will not do. A and E units in west London, for example, are being closed one after another. That is not good enough, and neither is it good enough in Greater Manchester, where huge changes are planned. These changes must be clinically driven, not driven by finance, which is what we are seeing under this Government.
Mr Watts
I am grateful to my right hon. Friend, who is rightly concentrating on A and E units and social care. Does he agree with me that many hospitals around the country are facing a financial crisis, too, where the Government are refusing to fund anything other than consultancies? In my area, that has meant spending hundreds of thousands of pounds to tell us what we already knew—namely, that my hospital is underfunded.
Andy Burnham
That is what happens when a market is set up in the NHS, pitting one hospital against another in open competition. That is what is beginning to take hold in the NHS, where the Government waste money on consultants and all the other things that come from bidding for contracts. That is a direct effect of the legislation they pushed through. This reorganisation and the budget cuts I mentioned a few moments ago are providing a toxic mix. This is why for 32 weeks running, the NHS in England has missed the Government’s own lowered A and E target for major units. It really is time that the Health Secretary got a grip on the issue. We hear that last week he was trying to hatch a panic plan to deal with the A and E crisis. That is the reality of what was going on behind this threadbare Queen’s Speech: the Health Secretary was trying to cobble together a plan to deal with the A and E problems, weeks after we had first raised the issue in the House.
We hear of an e-mail leaked by an NHS finance officer which said:
“The SoS would like to announce tomorrow that £300m-400m is being invested to solve the A&E problem. We have spent most of the day trying to hold him off doing this.”
The Health Secretary seems to have forgotten that his powers to intervene were given away by his predecessor. He no longer has the power to mandate the NHS to do what he wants; the NHS can now “hold him off”. I am afraid that he looks weak. He has no response to what is happening to A and E departments. And where is the “£300 to £400 million” plan? It has not materialised. That is proof that when the Government surrendered their powers of control over the NHS, the Health Secretary surrendered his ability to do anything about the problems that we now face.
It is just as bad when it comes to staffing. We hear that nurses’ posts continue to be lost. Nearly 5,000 have been lost since the Government came to power, and according to the findings of a survey published yesterday, nurses fear that further tragedies could happen as a result of staff losses. That should set alarm bells ringing throughout the Department of Health. The Care Quality Commission has said that one in 10 hospitals in England does not have adequate staffing levels. The Health Secretary nods. I am glad that he accepts that, but, again, what is he going to do about it?
I welcome the fact that the Care Bill will contain measures relating to the Francis report, and I will work with the Health Secretary on that, but let us get to the crux of the issue of safe staffing levels, because that is the most urgent problem facing the NHS. The Health Secretary nods again. Let me make him an offer. If he introduces a benchmark—if he specifies minimum staff to patient ratios—we will support him, and the measure will go straight through the House. I shall wait for him to respond to that offer, and to ensure that the recommendations of the Francis report are properly implemented.
I give a cautious welcome to some of the Health Secretary’s measures to deal with health tourism, but let me issue two caveats. First, it is important not to overstate the nature of the problem, and secondly, it is essential for health practitioners not to be turned into immigration officers. In March, when asked how much health tourism was costing the NHS, the Health Secretary said:
“I don’t want to speculate… but… we have heard… it’s £200 million.”
On the same day, the Prime Minister’s spokesman said he believed that the figure was more like £20 million. Perhaps the Health Secretary could account for the difference—or did he just add a zero?
Steve McCabe (Birmingham, Selly Oak) (Lab)
Would it not be helpful if the Health Secretary could tell us exactly how much he thinks is being lost and what it will cost to try to recover the money? At present the only figure that he has is the one on the invoices, rather than one relating to the money that is actually recovered.
Andy Burnham
We must wait to see what the Government produce, but we need to be sure that they are attacking the real problem rather than playing politics with an issue and creating the impression that all the A and E problems are caused by immigration. If that is their real intention, they will have no support from the Opposition.
Chris Bryant
Did my right hon. Friend have an opportunity to hear what the Conservative right hon. Member for Haltemprice and Howden (Mr Davis) said during the debate on the Queen’s Speech last week? It was very intelligent and nuanced. He said that it was necessary to ensure that not just life-threatening diseases but notifiable diseases and mental health conditions would not be covered by the proposed measures. The position is not quite as straightforward as some newspapers might like to suggest.
Andy Burnham
Nuance, care and caution are precisely what we need in this debate; we do not need press statements written by Lynton Crosby which then turn up in the House as Bills. We want responsible government, ensuring that the NHS is not abused. We will support the Government as long as that is their intention, but if they are doing something more sinister and playing politics with these issues, they will not have our support.
We have had no answers on the NHS. Let me finally turn to public health. There was not much on which I agreed with the last Health Secretary, but he had my strong support when he spoke about tackling smoking. He said that he wanted tobacco companies to have “no business” in this country, and that introducing standardised packaging was an essential next step to ensure that young smokers were not recruited by the tobacco industry. [Interruption.] The Under-Secretary of State for Health, the hon. Member for Broxtowe (Anna Soubry), looks confused, but I think she advanced the same argument on the radio a couple of weeks ago, saying she was an advocate of standardised packaging. Then, we read in advance in our newspapers that the measure had been dropped—one of the “barnacles” on “the boat”, we were told, by the said Mr Crosby. This is the same Mr Crosby who has represented “big tobacco” since the 1980s, who masterminded the campaign against standardised packaging in Australia, and who was federal director of the Liberal party of Australia when it accepted millions of pounds in donations from the tobacco industry.
The Secretary of State said last week that a decision has not been made yet because the consultation has only just finished. It ended nine months ago. He can make a decision. I say to him again today, here is another positive offer from the Opposition: if he brings forward these proposals, they will have our full support and we will get them on the statute book.
Ian Mearns (Gateshead) (Lab)
My right hon. Friend may be interested to learn that the Prime Minister wrote to me about plain packaging before the Queen’s Speech was delivered to both Houses. He said in that letter that there were currently no proposals to introduce plain packaging.
Andy Burnham
The former Secretary of State said that it was full steam ahead and that is what they would do. This Secretary of State comes in and says nothing about the issue. Then, a right-wing Australian lobbyist arrives, and all of a sudden no one mentions it at all. Has the Secretary of State ever met Lynton Crosby and discussed this issue with him? I think we have a right to know. [Interruption.] He nods; I should be interested to know the substance—[Interruption.] He has not met him to discuss the issue. He looks very uncomfortable all of a sudden.
Mr Jeremy Hunt
Just to put the right hon. Gentleman out of his misery, I have not discussed this matter on any occasion with Lynton Crosby.
Andy Burnham
We are going to have to get to the bottom of this—not just the Secretary of State, but all his Ministers and advisers and all the No. 10 advisers—because it looks to us as though this Government have raised the white flag on having any semblance of a progressive public health policy. I cannot believe that the Liberal Democrats put their name to such reactionary stuff. Where is minimum alcohol pricing? Where is public health in this Queen’s Speech? They are totally absent.
Jackie Doyle-Price (Thurrock) (Con)
I appreciate that the right hon. Gentleman has very clear convictions and a desire to tackle smoking as a public health issue. However, a third of cigarettes smoked in London are contraband. How would standardised packaging deal with that problem?
Andy Burnham
I agree that we need to do something about that, and we did bring forward measures in government, but standardised packaging is not plain packaging: it is about having designs on the pack that could be used to ensure there is no counterfeit tobacco. Surely some things are more important—the young smokers in the hon. Lady’s constituency and mine who are targeted by the tobacco industry. Surely we in this House can unite on issues such as this and take steps to improve the long-term health of the country. It seems to us that the Government have given up on the health of the nation.
I said I would set clearly out for the House what I would do had I been standing at the Government Dispatch Box today. For a start, I would have introduced a Bill to repeal the disastrous Health and Social Care Act 2012, which has placed our NHS on a fast track to fragmentation and privatisation. That Bill would have restored the powers and responsibilities that the Secretary of State’s predecessor gave away, and which he found out last week he no longer has. I would legislate for the full integration of health and social care as the only realistic answer to the challenges brought by the century of the ageing society.
People can see that increasingly it is the Opposition who have the courage and the answers to deal with the big challenges the country faces, not a failed coalition that is now playing out time. Its toxic medicine of cuts and reorganisation has laid the NHS low, and now it has no answers to the chaos it created. That is because the Secretary of State only discovered last week that his own reorganisation had stripped him of his powers to intervene, leaving him looking weak—in office, but not in power. Having done that, the Government’s answer is to try to scapegoat others for problems of their making. It will not work—we will remind people that it was a right-wing reorganisation that has left the NHS destabilised and demoralised. We will never tire of reminding the Prime Minister that the British people never gave him their permission to put the NHS up for sale, and we will restore the right values to the heart of our NHS—compassion before competition, integration over fragmentation, people before profits. The NHS and the country deserve better than a Government who are out of touch and out of ideas.
Nicholas Soames (Mid Sussex) (Con)
I am grateful for the opportunity to speak in the debate on the Address.
In nearly 30 years in the House, it has been my experience that Governments are always accused of having either too much or too little in their Queen’s Speeches. As my hon. Friend the Member for Banbury (Sir Tony Baldry) rightly said in his excellent contribution, however, they are works in progress. I congratulate the Government on bringing forward a measured and carefully thought-out programme, which has been welcomed by my constituents and which will make a positive contribution to the lives of many of our fellow citizens. The immigration measures, the national insurance contributions Bill and the deregulation Bill are particularly important to the work that the Government are doing—in my view far more successfully than they are being given credit for—in fixing the British economy, which is showing clear signs of real improvement.
I would like to report to the House that at the Burgess Hill Business Parks Association business exhibition on Friday there was a solid mood of determination to grow our local economy, as well as considerable satisfaction at the progress being made. The message that I take back from that admirable gathering is one that all our colleagues will find when they go to gatherings of that type: people want the Government to press on with getting rid of regulation and bringing in lower taxes—above all, they want to get on with growth. This Queen’s Speech presses on with a number of key reforms on welfare, on education and by the Home Secretary in her excellent work on immigration.
We were fortunate to have exceptionally good local election results in Mid Sussex, where the combination of a prudent and well-run West Sussex county council and an extraordinarily efficient and well-led district council have delivered with confidence the Government’s agenda, which is welcomed and well understood. What is clearly most important locally, however, is the state of the economy. For all of us, that must be at the very top of all our constituents’ concerns about the future of the country. Our constituents want the Chancellor and the Prime Minister to press on. If they do and the economy grows, much of the country’s serious anxieties will begin to disappear like the winter snow.
I am delighted that my right hon. Friend the Prime Minister is in Washington today with President Obama in our pursuit of the European Union-United States free trade agreement, which is clearly extremely important to our future, not only for our national trade and commerce in Europe and elsewhere, but as a mark of stability in world trade, which is vital to the ordinary conduct of economic and world trade growth. All of us here know that the opportunities in that regard are enormous.
Mr Robert Walter (North Dorset) (Con)
Does my right hon. Friend agree that if we were to vote to leave the European Union, we would no longer benefit from that free trade agreement?
Nicholas Soames
I do agree, but I will come to that point in a moment, if I may.
As co-chairman with the right hon. Member for Birkenhead (Mr Field) of the cross-party group on balanced migration, I warmly welcome the considerable progress that the Government have made on the difficult and sensitive matter of immigration. They have succeeded in driving down numbers and there is real progress, but there are no easy solutions. I welcome the carefully thought-out work of my right hon. Friend the Secretary of State for Health on those services. The cross-party group, and I think most of the House, knows that the most careful attention must now be paid to the question of access to benefits and the health service. Thus, the immigration Bill is an important step forward.
I know the Government do not underestimate the anger and frustration that many people feel about too many people arriving in Britain and accessing public services before they truly should. To that end, I will conclude by saying a few words about the European issue.
The House knows that I am a staunch but not uncritical pro-European. I acknowledge the profound frustration of dealing with Europe, and there are certainly the most serious problems with the European Union that we must fix. The Conservatives are committed to doing that. In many of these matters, we will find solid support across the continent from our European partners, and my right hon. Friend the Prime Minister will do that.
People need to understand that the Prime Minister has committed to the negotiation of a new settlement between Britain and the European Union. People questioned whether he would veto an EU treaty, but he has vetoed an EU treaty; people questioned his ability to get the EU budget cut, but he has succeeded in getting it cut; and people questioned his ability to get powers back from the EU, but the fact is that he got us out of the EU bail-out mechanism and saved this country hundreds of millions of pounds.
The Prime Minister has said that he is committed to negotiating a new settlement for Britain within the EU and I have every confidence that that is precisely what he will achieve. It will be then for the British people to judge that settlement in a referendum. There will be a referendum on our membership of the EU; the commitment on that is absolute. Some of my hon. Friends and indeed some of my right hon. Friends need to be a little cautious about trivialising what is involved. The decision on a referendum is hugely important for this country; it is probably the most important decision that it will have to take for generations. It is not to be lightly taken, or on the basis of prejudice or pub rhetoric.
Nicholas Soames
No, I will not. No good is done to the public governance of this country by a constant chipping away at trust and at the Government’s integrity. If the Prime Minister says that something will happen, such is the momentous nature and importance of this decision that it will happen with orderly process and proper debate, and not with some hysterical, knee-jerk, publicity-seeking action.
I beg this House to remember that, with all the EU’s imperfections and all its problems, it gives our country free and fair access to the single largest integrated economic area in the world; a single market of 27 countries and 500 million people with a gross domestic product of $16 trillion. I could not possibly look my constituents in the eye and tell them I was prepared to risk that. I urge the House to support the Prime Minister and the Government in the orderly process that has already been announced, which will result in a referendum. I am confident that it will be a positive referendum for the United Kingdom.
Frank Dobson (Holborn and St Pancras) (Lab)
I will not follow the right hon. Member for Mid Sussex (Nicholas Soames) in referring to Europe, other than to say I regret the possibility that European competition law will in future apply to the national health service, which will no doubt be exploited by major American health corporations.
I will talk exclusively about the current destruction of NHS Direct, a successful, safe and popular service, and its replacement by 111—I hesitate to call it a service— that has proved to be a shambles in many parts of the country. I must declare an interest—a sort of proprietorial one—because I was Health Secretary when we decided to set up NHS Direct in 1998. We set it up in a sensible way, and it worked from the start. We established three pilot schemes. The service was gradually rolled out across the country, learning all the time from the experiences of the earlier services that were already working. It worked well from the start, and there is no excuse for Ministers in this Government who have introduced the 111 service as a mess. They have been calling summits and announcing reviews ever since it started going wrong. That is pathetic, because they are not in the Department of summits and reviews; they are in the Department of Health.
Those Ministers were not even doing anything new. They had the opportunity to build on NHS Direct, which was a successful example. In 2002, it was described as a remarkably successful service by the Public Accounts Committee, then chaired by the hon. Member for Gainsborough (Mr Leigh), and of which the current Chancellor of the Exchequer was a very active member. Reports by the Comptroller and Auditor General and the PAC commended the service, saying it had met all its deadlines and properly addressed all the risks, and that it had a practical approach and had learned lessons as it went along. It was also commended for the fact that its computer procurement had been well managed and had been delivered to cost, and that there had been satisfactory consultation and it was clinically safe.
It was praised, too, for reducing demand on other parts of the NHS. The main reason it was reducing demand was because it was predominantly staffed by nurses, who had the professional confidence and judgment simply to offer reassurance to some who got in touch. In the current service, however, there are many call handlers, who do not have that professional knowledge and confidence, and are therefore referring people to GP services or A and E and are arranging ambulances.
I commend the views of the PAC back in 2002. It was far sighted, because it said:
“Departments should consider what wider lessons they could learn from the successful introduction of this significant and innovative service on time.”
The Chancellor’s Government have clearly decided to ignore that recommendation. The PAC also noted:
“Short lines of communication between the Project Team and those implementing the service at local level enabled lessons to be learnt quickly as the projects progressed.”
Clearly the current Government did not learn that lesson either.
The current Chancellor himself said in one of his contributions to the Committee:
“My concern is that the Permanent Secretary…is going to start saying, we are great, we have this giant switchboard for the NHS, and your service is going to lose the focus of its original function”.
That perfectly describes what has happened with the abolition of NHS Direct and its replacement by the 111 service.
The 111 service does not have short lines of communication—indeed, I doubt whether it has any at all. It has also taken on innumerable new functions, and has been expected to carry them out at less cost than NHS Direct was operating at. The only way it could reduce costs was by getting rid of nurses, because they are more expensive than call handlers. Indeed, GP representatives have told me the current service has reversed the situation: whereas there used to be more nurses than call handlers, there are now more call handlers than nurses, and in one area there are 15 call handlers and one nurse.
The computers keep going down, there are massive delays, and a lot of the call handlers are giving the wrong advice, much of which is expensive for the NHS. The Government cannot say that they were not warned about this because they were warned by Members, even Government Members, as long ago as March, not this year but last year.
In bidding to get one of these contracts, people assumed, in good faith or bad faith, that they could provide as good a service as NHS Direct at half the cost. It is now clear that they cannot. Other parts of the NHS are bailing them out to try to keep the 111 service going. As my right hon. Friend the Member for Leigh (Andy Burnham) said, the question that arises is what the Secretary of State can do about it. The people running these services have bid for fixed-price contracts. If they now need to spend more, how is the money going to get to them so that they can do so? They are left with three alternatives: they can struggle on providing this very poor, unreliable service, they can go bust and there is no service, or the money is found from somewhere else in the NHS. However, under the crackpot system that the Government introduced when they changed the law, there is no machinery for putting extra money into these services so that they can do their job properly.
Paul Burstow (Sutton and Cheam) (LD)
I want to concentrate my remarks on social care, because all too often in debates entitled “Health and Social Care” we tend to spend most of our time debating health, and yet our social care system is absolutely vital in regulating health care costs and delivering a better-quality health service. The Bill announced in the Queen’s Speech—it was indeed published on Friday—goes a long way towards laying some important foundations for a better social care system.
The Care Bill attempts to address a number of long-standing flaws in the system that have developed over the past 60 years through a series of piecemeal measures enacted by successive Governments. It is essential that in considering this over the next few months we make sure that we get it right, because legislation in the social care sphere comes to the House very infrequently. Our care and support system is of key importance because the rapid age shift that is taking place in our population is profoundly changing the nature of the demands on the system. It is important to note that this is not just about ageing; it is about the complex co-morbidities of long-term health conditions, both physical and mental, that are at the heart of the serious pressures on our whole system.
Our social care system has a number of features that need to change. It is too oriented around crisis and stutters into life when things have already gone wrong. It does not enable people to plan successfully for future care needs or, indeed, to prevent and postpone them. It does not provide adequate signposting, information, advice and advocacy for people to secure what they need from it, making it feel too much like a fight to get what is necessary. There is a lack of recognition of, and support for, family carers. Quality is variable around the country. We have heard announcements today about co-ordination of care and continuity, which is clearly a problem too. The costs of care are a lottery, and that needs to be addressed.
The Bill is taking all this forward. It focuses on early intervention and prevention, with a new responsibility for that to be up front in the way that local authorities plan their services. There are new duties on information and advice. I welcome the fact that the Government have agreed that the Bill should specifically refer to financial advice as being part of the legal obligations. There are new rights for adult carers—I will talk about young carers in a moment—with a lower threshold of eligibility for services. That is very welcome. A new rating system is being established to assist with quality of care and to help providers themselves to benchmark their performance.
Andy Burnham
I know that the right hon. Gentleman is very knowledgeable on this subject, but does he believe that councils have sufficient resources to consider new rights, given that we hear that care is collapsing all over the country and the Local Government Association says that if nothing else happens councils will be overwhelmed by the costs of care in less than 10 years?
Paul Burstow
I am grateful to the right hon. Gentleman for intervening. If he looks at last year’s Government impact assessment of the draft Bill, he will see that it gave a commitment to directing an additional £150 million specifically towards the rights of carers. The White Paper also gave a commitment to an additional £300 million over this and next year to support the system during this spending review period. I will address the funding questions for the future in a moment.
The right hon. Gentleman was a little harsh in his comments on the Bill laying the foundations for the implementation of the Dilnot cap on care costs. To understand this properly, we need to consider the relationship between the Government’s generous change to the means test—the threshold is being raised to £118,000—and the cap itself. Of course, we do not want people to reach the cap. We want steps to be taken to enable them to avoid having to pay catastrophic lifetime costs in the first place. The biggest gain of implementing the Dilnot proposals is a public health gain. It is about having conversations about care needs earlier, so that steps can be taken to minimise the risks of heavy-end care costs later in life. The Bill also commits the Government to national eligibility for the first time, which is hugely welcome.
I want to touch on three issues in the time remaining. First, some serious questions remain about how the Bill, which we will scrutinise over the coming months, will deal with the issue of young carers, which has already been raised. It is possible that young carers will fall into a gap between the Children and Families Bill, which is currently before the House, and the Care Bill, which will soon be before us. The Care Bill needs to address situations in which an adult does not qualify for local authority support and their children end up taking on caring responsibilities that become overly burdensome and inappropriate. In such circumstances the adult should be entitled to some sort of service so that their child does not lose their childhood to caring responsibilities. That requires action in the adult-related Care Bill; it should not be pushed away to be dealt with in the Children and Families Bill.
The second issue is poor commissioning practice, which was highlighted by an Equality and Human Rights Commission report on home care more than 18 months ago. It identified that contracting by the minute, or time-and-task contracting of home care, denigrated people and that they were being dealt with in an undignified way as a consequence of how services were being commissioned. Just a few weeks ago the Low Pay Commission’s most recent report highlighted, yet again, too many circumstances in which home care is being delivered by people who are paid below the national minimum wage. That is unacceptable and the Government need to deal with it.
Mrs Madeleine Moon (Bridgend) (Lab)
In a previous life I was a contracting officer for a local authority, and I contracted and commissioned care from the private sector. We always faced the same problem: the local authority tried to get more care for less money. That meant that contractors were paid less for their care workers, who were constantly not paid for travel time. How do we break this vicious cycle if we do not accept that we have to fund local authorities properly to make possible the provision of quality care?
Paul Burstow
I thank the hon. Lady for here intervention and will come to the issue of funding in a moment. The Joint Committee on the draft Care and Support Bill, which I chaired, was unanimous in its report’s recommendation that Government legislation must address the need for actual costs to be a relevant factor in determining fees for care. That is not covered adequately in the Care Bill at present and I am sure that hon. Members will take that into consideration. The Association of Directors of Adult Social Services said in its most recent survey that it was already concerned that some providers were suffering financially and that the situation would get considerably worse over the next two years. Will the Minister consider allowing the Care Quality Commission to inspect councils again when its inspections of local providers reveal that poor commissioning practices are at the heart of its concerns about those providers? The CQC has created a space for local authorities to self-improve and collaborate with one another. However, when its inspections reveal provider stress because of that, it should be able to inspect the council.
The Minister of State, Department of Health (Norman Lamb)
I agree that the quality of commissioning needs to be addressed as well as the quality of provision if we are to get better care for the people who need it.
Paul Burstow
I welcome that comment from the Minister and look forward to seeing more detail.
My final set of concerns relates to money. I and other hon. Members have referred to the report by the Association of Directors of Adult Social Services that came out last week. That report can be portrayed in very different ways. I took heart from the finding that despite undoubtedly being confronted with serious budgetary constraints, there is a lot of incredibly good practice by local authorities to protect front-line services. Only 13p in every pound of cuts has come from services being taken away directly.
Mr David Ward (Bradford East) (LD)
Can I tempt my right hon. Friend to comment on his proposals on the use of universal benefits for wealthy pensioners? I know that he has produced a pamphlet.
Paul Burstow
I will try to do that in the one minute and 14 seconds left to me.
The ADASS survey paints a quite disturbing picture of the next two years. More providers will face financial difficulties and there will be increasing pressures on the NHS as social services shunt people into health care services.
The spending review that is under way is for just 12 months. It needs to fund the successful implementation of this legislation, and not least the introduction of the Dilnot proposals. More than 450,000 people will need assessments to get into the new system. The spending review also needs to sustain the transfers of money from the NHS to social care. Beyond that, the spade work needs to be done now to make the case for the critical interdependencies between social care and health that will sustain our social care system and make our health system deliverable and affordable.
The Queen’s Speech, with its specific commitment to this legislation, contains a landmark reform that will do a great deal to improve the quality of life of our constituents.
Ann Clwyd (Cynon Valley) (Lab)
I am grateful to the 2,500 people from England, Scotland, Wales and Ireland who have written to me since last December, when I first raised the issue of compassion in nursing. The e-mails keep coming and I want to quote from some of them.
A man whose elderly mother was in hospital asked how many staff it takes to cut a fingernail:
“The hospital staff won’t cut my mother’s fingernails. They won’t clean them properly either. The excuse given to me is that this amounts to an ‘assault on patients.’”
My mother…has for the past several weeks been positive for a new superbug which is carried in faeces and would cause havoc if it got into the bloodstream…she’s in an isolation ward now. Barrier nursing, rubber gloves and pinnies for all staff and visitors. And still the nurses won’t do her fingernails, and they can’t or won’t see that filth under fingernails or wherever it is located, is intolerable in hospitals and needs to be eliminated—most especially in infection control units.”
The e-mail continued:
“I had a rant at the…staff for leaving the buzzer button and water out of reach of bedridden patients [i.e. people in beds near to my mother who were calling out to anyone for water]. My mother’s buzzer was also out of reach. I was then told these elderly patients might strangle themselves on a buzzer’s cable.
My mother tells me that if staff are dealing with a patient [e.g. bathroom visit] when the food trolley arrives then sometimes the patient may not get any meal. It is delivered, uneaten, and taken away. The idea the patient might still be in the land of the living and come back to their bed later and need some food seems not to bother them”.
A man whose father was on a ventilator wrote:
“There were no issues with the treatment he received, but the comment I received when going to say goodbye to him when the decision was taken by medics to switch off the machine is not one I will ever forget. After going to see him and saying goodbye, the nurse—whose Christian name and face I will always remember—said to me, ‘Can we crack on now?’”
A woman whose husband died of cancer at 53 after, she alleges, years of mistreatment and misdiagnosis wrote:
“When I complained to PALS—”
the patient advice and liaison service, which some hospitals have—
“my initial complaint was ignored. So I complained to the chief exec. I had several meetings with PALS and was told they would do an independent review. This took them two years and they denied any wrongdoing. No proper investigation took place. I then contacted a solicitor and had an expert review of the case. He said the treatment was nothing short of criminal…it has taken me four years of fighting for justice. They have now finally admitted liability for breach of care and duty and causing his death. But what happens to those responsible? Nothing. This was not one mistake, it was a catalogue of errors that went on for 3 years. They should be tried for manslaughter.”
A man whose wife suffered mistreatment wrote that
“she was regularly left to lie in her own faeces for half an hour or longer, and on more than one occasion for well over an hour. This led to a severe rash on her backside to the point that her bottom and the backs of both thighs were red and raw. The buzzer would be left hanging out of reach, either by accident or on purpose…at one point she was lucky enough to be able to reach her mobile phone as she rang me in tears during the middle of the night asking me to ring the high-dependency unit desk as she’d been desperate for a nurse…I had to bring her a fresh bottle of water every evening so that she could sleep with it in bed as the water on her tray was often pushed out of reach after her visitors had left for the night.
She was never weighed when in hospital despite multiple requests of both doctors and family. The staff allowed her muscles to atrophy to the point she could not even get herself out of bed…she was so badly undernourished, many family members doubted if she would ever come out of hospital.”
A woman writing about her mother’s mistreatment stated that
“nurses frequently chatted and laughed at the nurses’ station at night, showing a complete lack of consideration and respect for patients. Standards of cleanliness left much to be desired, and we were sometimes greeted by soiled dressings left lying around and on one occasion, splashes of blood which did not appear to be hers, left over the end of the bed. Generally there was poor liaison between the two hospitals and the GP, with outpatient consultant appointments being sent to my mother’s home address, when she was in hospital dying. We did not complain at the time as we were too distressed by my mother’s condition and after she had died unable to bear reliving her last months.”
A man wrote to plead that the right kind of person is selected and supported for a nursing job:
“I have seen nurses walk onto a ward chatting loudly about their social life, approach a patient and see to his needs while continuing their loud chat, apparently oblivious to the sad human bundle they were treating, as if it was a spare tyre that they were changing. I expect you have seen groups of nurses chatting at the nurses’ station and ignoring patients on their ward who are calling out for a nurse. Yes, we know, some of these will be demented or disorientated souls who do not need medical attention as such and are possibly a regular nuisance, but they are in the care of those nurses and should not be ignored.”
A woman, who after the experience of her last operation is dreading the next one, wrote:
“Upon being admitted I was placed in a storage area and left for hours in pain, and alone, and very frightened. A specialist came and took a cursory look and said I was to go home and come back the next day. I live alone and was very unwell to say the least. I became very upset and was treated like a naughty child. I then blacked out and upon waking I was in a bed with some very anxious nurses around me…I had blood poisoning. A nurse later stated that, ‘We have lost patients not as bad as you have been’. Later that night my abscess burst. I called a nurse who looked at the bed and then told me to sleep on a clean bit!”
One of the biggest problems is that of patients being starved. One account describes cleaners who
“put trays at the bottom of beds—unhygienic for a start—then come around half an hour later and lift the trays. Nobody checks to see if the patient has eaten it. It is fortunate if visitors or some of the better patients are around to help the more frail. I never saw any staff feed or help patients to sit up...I hope this is not common practice, but sadly I fear it is.”
Mr Charles Walker (Broxbourne) (Con)
I pay warm tribute to the right hon. Member for Cynon Valley (Ann Clwyd). That was an incredibly moving speech—we could have heard a pin drop in the House of Commons throughout those eight minutes—and a fantastic contribution to the debate.
I had intended to make a statesman-like speech, but sitting next to me is possibly one of the greatest statesmen, my right hon. Friend the Member for Mid Sussex (Nicholas Soames). I do not want to go out and bat on a losing sticky wicket; I would rather have a general thrash around the field of play. I admit to the right hon. Member for Leigh (Andy Burnham) that I am a Eurosceptic. When I came to the House of Commons, I fell into bad company, including my hon. Friend the Member for Aldershot (Sir Gerald Howarth). Indeed, when I arrived here, I was nursed at the bosom of my hon. Friend the Member for Stone (Mr Cash), so I am a Eurosceptic—[Interruption.] Anyway, I want to crack on.
In 2011, I attended a public meeting in my constituency. We were discussing the future of an urgent care centre. Five hundred of my constituents were there for a lively debate, which ended at about 8.30 pm. I had arranged at 9 pm to travel northwards in my constituency to Hoddesdon to meet 12 or 14 Polish people. As I left the room of what I would regard as fairly natural Conservatives and got in my car to drive up the A10, I thought, “Why on earth am I heading up the A10 to meet 12 or 14 Polish people?”
I was pleased I did. They waited in a circle to see me. We were in a recession at the time, but their eyes were gleaming and glittering. They said, “Mr Walker, this is the land of opportunity. It is fantastic. You don’t just get one job here; you can have two jobs. If you do those jobs really well and do what you are asked to do, you get promoted. This is a fantastic country.” It was so refreshing to see such enthusiasm in the room.
We should have had transitional measures in place when the Poles came over to this country. It was not good enough to say, “There might be 15,000 or 30,000,” when 500,000 ended up coming here. That was a grave error. However, to say that the Poles are somehow responsible for the country’s problems is a gross simplification and a fairly disgraceful statement to make. As I have said, I wish fewer had come here, because we should have had transitional arrangements. The infrastructure was not ready to welcome 500,000 people to this country, but I cannot fault them for a second for wanting to come here.
People say that people from eastern Europe want to come to this country to sponge off the NHS and our welfare system. The minority will, but the majority want to work hard and do the best for their families. There are rotten apples from European nations in this country, but there are quite a few rotten apples from this nation in foreign countries—hon. Members might have managed to see that a British fugitive was arrested by Spanish police yesterday on the Costa del Sol.
Immigration is not a uniformly good thing. It tends to work for the middle classes and the upper middle classes, whatever they are now. Basically, it works for people with money. Immigrants work very hard in our restaurants and cleaning our offices. However, immigration does not work so well if people are competing for scarce resources such as health, transport and education. I understand the concerns of people who now face additional pressures on scarce resources. We did not plan well. I do not want to sound overly partisan, but—dare I say—the previous Government did not plan well for the upsurge in immigration, which has created difficulties in our constituencies and a great deal of concern.
In my remaining three and a half minutes, I want to say a few more things about immigration. I am not a soft touch on that matter. I am extremely concerned about the continued underperformance of the UK Border Agency. About six years ago, I made the decision not to deal with immigration cases in my surgeries; I have enough problems from my own electorate to deal with, without having to take up UKBA’s case load as an unpaid officer.
Although our immigration system is improving, it still has a long way to go. It is simply not right that some people in this country should have to wait seven, eight or nine years for a decision on whether they can stay here. That is inhumane—it does not serve them or the taxpayer well. Unfortunately, those people are egged on by fairly ruthless and unpleasant lawyers, who keep lodging appeals and dragging out the process. However, it is we as politicians, of course, who provide the scope and room for those people to pursue those endless appeals processes. We must truncate the appeals process.
Mr Robin Walker (Worcester) (Con)
I congratulate my hon. Friend on his excellent speech. Does he agree that a system that does not work and leaves people in limbo is neither efficient nor compassionate?
Mr Charles Walker
I completely agree. Such a system is not efficient or compassionate and does not carry the confidence of the British people. More needs to be done to ensure that our immigration system carries the confidence of the British people, is fair and rewards immigrants who play by the rules. There has to be a premium for playing by the rules. We have to do something about the immigration system; we have to truncate the appeals process and to deal with people more quickly, including removing them more quickly once a decision has been reached.
I conclude with a few thoughts. I am a great fan of culture; I have travelled the world and immensely enjoyed other people’s cultures. However, I am also a great fan of our culture, which I think is pretty special—indeed, its promotion and protection are probably why most of us have chosen a vocation in politics. Our culture is often caricatured as being about the royal family and maypoles. Those are important—well, the royal family are; I am not so sure about maypoles—but what is our culture? Our culture, which we should promote ruthlessly, is freedom of speech, freedom of association, freedom of thought and expression, and the rights, protection and promotion of women and minorities. That is what being British is all about and what makes this country so attractive to so many people around the world.
I want to say something that I hope will not be misinterpreted. If people want to come here and make a positive contribution, that is fantastic. But people coming to this country should please value and respect everything that it offers them. It really is a great place. We can celebrate other people’s cultures, but we cannot have separate communities and societies in this country—that is not healthy for us or for those wanting to live here who eventually, I would like to think, integrate and become part of what is still a great place to live.
I am afraid I am running out of time, which probably comes as a great relief to most Members. I would just say that I am a world-expert moaner; if the Prime Minister even thinks about me, it is, “Oh my Lord! There goes Charles Walker moaning away again—the moaner-in-chief.” Actually, however, we are not in a bad place in the United Kingdom. Look at what is going on in Italy, Spain, Greece and Ireland. Things are pretty good here. I am sorry to say this to my Liberal Democrat hon. Friend, the Minister of State, Department of Health, but I am the first to whinge about the coalition. However, we are not actually in a bad place and in the final analysis, we should be grateful for what we have.
Barbara Keeley (Worsley and Eccles South) (Lab)
I welcome the fact that we have a Care Bill to debate. I pay tribute to the hard work of colleagues on the Joint Committee on the draft Care and Support Bill. I also welcome the fact that the Government have taken on board a number of the Committee’s recommendations. However, some have not been adopted. I want to speak about the areas where the Bill could be improved and strengthened: the identification of carers and, as the right hon. Member for Sutton and Cheam (Paul Burstow) mentioned, the clauses relating to young carers.
Roberta Blackman-Woods (City of Durham) (Lab)
Does my hon. Friend agree with the National Young Carers Coalition, which has written to all Members pointing out that the Bill does not do enough for young carers and needs to be amended so that there is a greater responsibility for identifying young carers? Does she agree that the Government should have taken heed of her excellent private Member’s Bill and incorporated it into the draft Bill?
Barbara Keeley
I am absolutely bound to agree with that point, and I will come on to it shortly.
As has been said, we cannot separate the funding of social care from the law on social care. We need to take on board the fact that the Bill will not help those who are struggling without the social care support they need, either today or in the months and years ahead.
The Bill builds on the recommendations of the Law Commission’s review on social care and carers, but we should remember that until the Care Bill, carers had been given rights only through measures in private Members’ Bills: the Carers (Recognition and Services) Act 1995, the Carers and Disabled Children Act 2000 and the Carers (Equal Opportunities) Act 2004. We should pay tribute to the late Malcolm Wicks, Tom Pendry and my hon. Friend the Member for Aberavon (Dr Francis) for their work on that early legislation to give rights to carers.
When I came to Parliament in 2005, I raised the issue for the first time that GPs and other health professionals needed to identify carers within their practice population. GPs are best placed to help carers at the start of caring, which is when they need that help and advice. It is the GP who deals with the patient with dementia, the patient recovering after a stroke, or the patient with cancer. The GP and primary health care team are, after those life-changing events, well placed to see if there is an unpaid family carer. It is then a simple step for them and their teams to take time to check the health of the carer and to refer them to sources of advice and support. Caring can have a serious impact on the health of carers. In a recent survey of 3,000 carers, Carers UK found that 84% said that caring was having a negative impact on their own health—up from 74% in 2011-12.
I have introduced three private Members’ Bills on the identification of carers, and in September I introduced the Social Care (Local Sufficiency) and Identification of Carers Bill. The Bill had good support in the House. My hon. Friend the Member for City of Durham (Roberta Blackman-Woods) and 11 MPs from across most parties were supporters. We also had support from 27 national charities, the National Union of Students, the business group Employers for Carers and 2,000 individual carers. However, the Government did not support the Bill. In the debate, the Minister of State, Department of Health, who is responsible for care services, stressed that it was best to get everything codified in one place so that one piece of legislation addressed all issues of care and support. However, the Care Bill does not help with the identification of carers; it puts the duty of assessment on to local authorities. It is questionable whether cash-strapped local authorities will be able to assess the needs of large numbers of carers in any way that makes it a worthwhile exercise for those carers. If the Minister wants to look at the Joint Committee’s web forum on the draft Care and Support Bill, he will see that many of those who commented said that local authority assessments are of little practical help in their caring role.
Mrs Moon
Last week, I had a telephone call from a young man who is caring for his father. His father has the same condition as my husband, and he contacted me because of the debate we had on dementia. He told me that he had phoned his social services department twice and the psychiatric nurse twice to ask for help and support. He did not know where to turn. Is this not increasingly the problem? There is just no money: no money to provide the assessments and no money to provide the care if those assessments are carried out.
Barbara Keeley
I agree with my hon. Friend: it is about carers knowing where to go for that help and support when they are so desperate.
In contrast to assessments, projects that work within primary care to help identify carers are producing outcomes that are genuinely helpful to carers. I spoke at an event last Friday organised by Salford carers centres for staff from those teams. The staff will help to identify carers and refer them to help and support. They will have a list of agencies and know where to go.
Paul Burstow
The hon. Lady is making important points about carers—an issue on which she has campaigned consistently. Would she join me in welcoming the announcement from the Royal College of General Practitioners over the weekend about the priority it wants attached to carers and the guidance it is now issuing to GPs to ensure that they do more? One in 10 of a typical practice’s patients are carers, so they could do a great deal more by identifying them.
Barbara Keeley
Very much so, but the difficulty is that GPs do not have to do it. It is good that some of them are, but they do not have to. We have a duty of assessment, which is an excellent thing, but we also have GPs who might not be doing it.
One important group of carers in great need of being identified is young carers. As we have heard, young carers are in a unique position, being directly impacted on by the health and independence of adults. The care provided to that adult should help to sustain the whole family and reduce the impact of any caring requirements on the child. We know that if care services ensured that all adults needing care received it, that would help the children in the family, but frequently, we must admit, they do not get it, and the person needing care then starts to rely on the child providing it, which impacts on the child’s well-being.
That is where improved identification and support for young carers is valuable, because it can prevent negative and harmful outcomes for those children and reduce the cost of expensive crisis intervention. We spent much time on this in the Joint Committee, and the Care Bill now provides a unique opportunity to ensure that young carers have equal rights. We shared the concern of our witnesses that it appeared that clauses in the draft Bill applied only to adult carers, leaving young carers with lesser rights. Some amendments have been made, but it has not progressed as much as it should have done, and I found it disappointing that in a recent Committee debate on the Children and Families Bill, the Under-Secretary of State for Education, the hon. Member for Crewe and Nantwich (Mr Timpson), who has responsibility for children, did not accept the amendments on young carers put forward on a cross-party basis.
My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) made the case for the amendments very powerfully. Interestingly, the children’s Minister argued in response that the draft Care and Support Bill already allowed for the assessment of adults with care and that that could be linked to other assessments, which he thought would allow for consideration of the effects of adult support needs on the rest of the household, but that is not happening on the ground. Only 4% to 10% of referrals to young carers services are from adult social care, so that route is not working. He said he wanted more adults to be given the support they needed in order to protect children from excessive caring, which is a fine sentiment, but the reality for young carers is that life is getting harder as adult care services fall away.
Norman Lamb
I look forward to visiting the hon. Lady in her constituency on Thursday and discussing this matter further. I totally agree with her concerns about young carers, and will seek to meet the children’s Minister to discuss it further. It is really important that we get the framework right.
Barbara Keeley
Indeed, but a cross-party approach did not convince the children’s Minister in Committee, which is why I am stressing it today. It is very important. I welcome the Minister of State’s assurance just now, but he has given assurances before. We cannot let the opportunity presented by these two Bills pass. Younger carers and their organisations feel that the coalition Government are leaving them out of the equation. At the moment, the threshold for an assessment is higher for young carers than for adult carers. In its evidence to the Joint Committee, the Law Commission said that the inclusion of clauses on young carers was an important area of improvement for the draft Care and Support Bill. Frances Patterson QC told us that the Bill should make provision for services for young carers as well as their assessments, and that the assessments were of limited use for young carers.
The picture of provision for young carers is now very confused, and it is a priority for Parliament to sort it out. It is not good enough to have this partial recognition of young carers in the Care Bill or to have the children’s Minister rejecting cross-party amendments on provision for young carers. The Minister of State, who is responsible for care services, has said several times that he wants a single statute. If that single statute is the Care Bill, it has to deal with young carers properly. It is plainly wrong that it does not. I am grateful for his intervention, but we need to get this right. Does he still support a single statute, and if so, can we get it right for young carers?
I welcome the steps being taken in the Care Bill, but it must be strengthened and improved in the ways I have outlined, because things such as assessments are not very helpful for carers and young carers, if that is all we are offering. As was said earlier, older people face continuing increases in home care charges. The number of people receiving publicly funded care has fallen by 7%. Unmet need is soaring, which is putting pressure on carers and our acute services. We need a bold response to the crisis in care, greater investment in social care and genuine integration of health and care services.
Mr Edward Leigh (Gainsborough) (Con)
I represent a Lincolnshire seat. I wish to say a bit about opinion in Lincolnshire and relay it to the House, if Members are not already aware of it from the local election results.
Coincidentally, today is the feast day of St Earconwald, who was born in 693 in Lindsey, north Lincolnshire. Various miracles were attributed to him. For example, when he was elderly and in his wheelchair, the wheels fell off but it kept going. I am reminded of how the coalition still keeps going, despite its wheels occasionally falling off. I think we may come to a time before the end of this Parliament when, such is the divergence of opinion—perfectly honourably felt—between very honourable people such as the Minister on the Front Bench and me, that for the sake of the nation we may have to bring this coalition to an end and honestly put our separate programmes to the people.
Mr Leigh
I have no idea when that will happen.
I said I wanted to talk about opinion in Lincolnshire. Despite all the Government’s success in their central aim of attempting to cut the deficit—we have cut it by a third—people there undoubtedly feel that their voice is not being heard. We have to listen to that voice. If I may be forgiven for being party political for a moment, I should point out that there is absolutely no enthusiasm for the Labour party, because people have not forgotten who created the borrowing mess we are in. We heard a lot about plain packaging from the right hon. Member for Leigh (Andy Burnham), who led for the Opposition today, but the whole Labour party is plain packaged. We have no idea, frankly, what it will do.
Barbara Keeley
I cannot speak for all parts of the country, but I campaigned in the recent county elections in Lancashire and there was huge enthusiasm for the Labour party.
Mr Leigh
We will have to see what happens in various parts of the country.
It is said that this is a thin Queen’s Speech. As a Conservative, I do not object to a thin Queen’s Speech. I do not object to deleting unnecessary legislation either, whether on minimal alcohol pricing or plain packaging. I view all these as creatures of the nanny state, so it is good conservatism that we are not introducing them. However, if we are to have a Queen’s Speech that is, shall we say, somewhat light and has lots of room in it, that means there are various other things that we could do. One thing we do not need to do, I would have thought, is persevere with the Marriage (Same Sex Couples) Bill. I will not repeat all the arguments, but this is an area where many people in Lincolnshire feel that their opinions are being not represented.
If anybody wants to look at an excellent article on this subject, they should read Charles Moore’s in The Daily Telegraph on Saturday. There is a real problem. We are trying to deal with an economic crisis and the very first thing we will do after this Queen’s Speech debate—although it was not mentioned in it; as far as the Government are concerned, this is the Bill that dare not speak its name—is have two days on same-sex marriage. The Bill will then go to the House of Lords. There are enormous, complex issues at stake for the Church of England. I have no doubt that we are moving to a world in which the Church of England will be allowed to conduct only religious marriages, but will not be able to complete them. They will have to be completed by the state because of equality legislation. These are serious issues. The Government could easily mend fences with many of their supporters by putting the Bill out to further consultation.
Steve McCabe
If the coalition survives longer than the hon. Gentleman suggests, does he think that next time round it might be an idea for the Government to have a debate and then produce a Queen’s Speech, rather than producing a Queen’s Speech and then having a debate about what should not be in it?
Mr Leigh
That is an interesting argument. I have appended my name to the important amendment to the Queen’s Speech, and we should have a serious debate on the issue. This is not Conservative Members of Parliament obsessing about Europe; this is a real issue for people. It is no longer a dry as dust issue.
In Boston, a seat with a 12,000 Conservative majority, UKIP won nearly every council seat two weeks ago. Unlike my hon. Friend the Member for Stone (Mr Cash), the people there are not particularly worried about all the details of European legislation, but they are worried about immigration. I echo what my hon. Friend the Member for Broxbourne (Mr Walker) said in his very measured speech: people in Lincolnshire are not closet racists. They welcome Polish, Lithuanian and Latvian people, but they want their public services to be supported, when, on the coast of Lincolnshire, public services are overwhelmed. Since 2004, 1.1 million have arrived in this country from eastern Europe, and we have to address that issue.
Mr Leigh
I am sorry; I have only a short time left.
Speaking personally as a comfortable, middle-class person living in the hinterland of the beautiful Lincolnshire wolds—where, incidentally, we held all the seats we were defending—and in a comfortable part of London, I have no angst about Poles. They are hard working, and I think that most of them will go back. Their religion is estimable, and I have no complaint whatever against them. But we should listen to the people who are worried about public services, and this is therefore a European issue.
I personally believe that we should listen to those people and that we should have a referendum. I would also say to my right hon. Friend the Member for Mid Sussex (Nicholas Soames) that I believe that the Prime Minister is absolutely a man of honour and a gentleman, and there is no doubt in my mind that if he is still Prime Minister in 2017 we will have that referendum. The trouble is that ordinary people—if I may use that expression—do not think like us. They do not think in terms of four-year Parliaments; they think about now. The question they ask is, “If this is such an important issue, why can’t we have a referendum in the next two years?”
There should at least be a mandate referendum that we can put to the British people, asking whether we should have a new relationship with Europe based on political co-operation and economic free trade. If we fail to listen to the people, we will create a sense of alienation and, despite all our success in driving through the Government’s central economic policies and tackling the deficit—the reason that the coalition was created and what we are really about—that would eat away at the support for the coalition. A sense of alienation is created when people are worried about their public services.
People are worried about other issues as well. In the middle of my constituency, the Government are erecting wind turbines more than 150 metres high—taller than the highest point in the Lincolnshire wolds—that are being paid for by ordinary people living in terraced houses in Gainsborough. They are paying £100 a year, and the money is going straight into the pockets of rich farmers, all in the name of dealing with global warming—if indeed there is global warming, if indeed carbon emissions are causing it and if indeed wind farms will make any difference. That all adds to people’s sense of alienation.
People also worry about the budget for international development. I am personally in favour of spending money on international development, but we have a commitment to spend 0.7% of our gross national product, for which there is no scientific basis. As we reduce the number of staff in the Department for International Development, we are loading more burdens on the remaining staff to hand out more money. That is simply not good economics. It is not a good way to run a Department.
I do not believe we should ring-fence the budget of any Department. We should spend wisely and carefully on the right things at the right time. Whether we are talking about same-sex marriage, about the EU referendum or about the DFID budget, we must recognise that people are feeling a sense of alienation, and that good, strong Conservative voters do not feel that their Government are representing them all the time. Let us also put the focus on the Labour party, but let us concentrate on the core issue of getting rid of the deficit. Let us make that the successful mission of this Parliament.
Valerie Vaz (Walsall South) (Lab)
It is a pleasure to follow the hon. Member for Gainsborough (Mr Leigh) and to speak in the debate on the Gracious Speech to both Houses of Parliament.
I do not know about you, Madam Deputy Speaker, but I sense some confusion or dysfunction in the air—it started with the weather: first, we thought it was spring, and then found that it was not—which seems to have got down to the Government. Let me provide some examples. The Government want us to build more conservatories, but at the same time they are asking people to downsize to other properties. Over lunches, they are giving the benefit of the doubt to some companies minimising their tax bills, yet are not giving the benefit of the doubt to those who have to turn up to Atos assessments—even though they are in a wheelchair or have other long-term conditions. That is very dysfunctional.
Mr Qatada has been given £500,000 in legal aid, when he could have fought his appeal from abroad, but, with the cuts in legal aid, my constituent, Mrs Pressdee, cannot find a legal aid lawyer to help her from losing her home. What about the statement that Eton produces people who dominate Government because of their commitment to public service? I always thought there was a link between Eton and the Labour party, the Woodcraft Folk, the girl guides and the boy scouts, which are all committed to public service. Curiously, however, the number of public sector workers, who have a commitment to public service, has been decreasing over the last 13 quarters.
Let us deal with the commitment in the Gracious Speech to the reform of long-term care. This can be achieved only on the back of moving money from the health budget to social care, which the previous Secretary of State for Health had already started to do. This commitment in the Gracious Speech has been made against the backdrop of nurses and junior doctors saying they need more staff and that they are overstretched, but there is no commitment to staffing ratios.
About £10 million was spent on the Francis report, but its recommendations on the health service they have been practically discarded by this Government. Instead, the Secretary of State for Health is suggesting what can be described only as a vanity policy—he wants a chief inspector of hospitals. He was unable to tell me how much the chief inspector would earn, where the budget was coming from, whether this counted as committed spending, whether the Treasury knew about it, or whether it was to be taken out of the Care Quality Commission budget. This was not a recommendation that either Robert Francis or the Health Select Committee made. The Health Service Journal surveyed senior people in the hospital sector, 73% of whom said they did not believe hospital inspectors would be effective. This is a headline vanity policy.
The Francis report was not about sticks or the smack of firm government, but about a change in culture. Francis said that there should be one organisation undertaking the monitoring of organisations’ ability to deliver compliance of fundamental standards. At the moment, we have the CQC, Monitor and now the chief inspector who will apparently have the power to close hospitals. The Secretary of State made a comparison with Ofsted earlier, so let us remember Helen Mann, a head teacher who was so terrified of an Ofsted inspection downgrading her school from outstanding that she hanged herself. Is this what we want our public servants to do? In any case, it was not Ofsted, but the hard work of teachers and pupils that drove up standards. Here is the chaotic part: for a top-performing hospital, there will be lower regulation. How can that be fair? The Secretary of State was unable to tell the Select Committee how long these top-performing hospitals would be able to keep their top rating. That is a recipe for chaos. And what will be monitored? Again, the Secretary of State was unable to say. Will it be mortality rates, success in surgery or what?
I would like draw hon. Members’ attention to an article by Professor Nick Black in The Lancet in March 2012, in which he discusses the myth that grew up—that productivity in the NHS was falling—and warned of the dangers of using one set of indicators. That is exactly what happened at the Leeds hospital. The Secretary of State has conceded that the data were not verified when Sir Bruce Keogh made the decision to close children’s heart surgery, leaving parents and professionals confused and anxious. Whoever has the ear of the chief inspector and has their own data could therefore damage a hospital.
Let me deal now with the Gracious Speech’s reference to improving the water industry. Members may like to know that Thames Water, which is controlled by an Australian bank, now proposes to recycle sewage water for drinking, yet fails to mention investment in infrastructure or the leaking pipes that caused the shortage in the first place. All that was despite the fact that the company had made £552 million in profit by the end of March 2013. I ask the Government to look further into that.
This Gracious Speech should be based on justice, tolerance and the rule of law, yet all that is being undermined. The gracious people of this country, on whose behalf the Gracious Speech was made, deserve better.
Nadine Dorries (Mid Bedfordshire) (Con)
My speech will be in two halves. I shall talk first about health care issues, as this is a health debate.
I welcome the Care Bill, particularly its commitment to social care. I feel that words such as “compassion” are sometimes missing from our discussions on health care. Before I say more, let me welcome publicly, for the first time, the right hon. Member for Cynon Valley (Ann Clwyd) to her position as head of a review body that will examine NHS complaints.
As many Members know, I was a nurse in a former life, and it was a profession that I absolutely loved. I was, I think, a committed nurse. I lived in a nursing home, and often worked for more hours than I was supposed to. I would go into the hospital on my days off to visit patients who had no relatives. I was not alone in that; most of the nurses in my nursing home behaved in the same manner. I pay tribute to a nurse who started work on the same day as me, on 5 November 1975: Helen Windsor, who contacted me recently. For all these years, she has been delivering the same committed care that she delivered in 1975.
I suppose many people will say that that was a long time ago, and it was, but I think that qualities such as compassion, kindness and caring are timeless. It does not matter when they were being delivered; they should be delivered in the same way today. Unfortunately, however, I—like many other Members—regularly receive complaints from constituents about the standard of nursing care. I mentioned Helen Windsor because I want to pay tribute to the nurses who deliver good care.
I recently visited a constituent in hospital, an 89-year-old man with no relatives. It was interesting that the right hon. Member for Cynon Valley mentioned nail clippings, because I had already written down that I intended to raise the subject. That constituent was agitated because his nails were serrated and were catching on the cardigan that he was wearing as he sat in his chair. When I asked the nurse whether she could cut his nails—he said that he had been asking for it to be done himself—she replied “No, I can’t. We are not allowed to do that.” So I took an emery board out of my handbag and filed his nails myself. I know that sometimes, as Members of Parliament, we feel that we are social workers, but I had never imagined that I would extend my role to the nail care and general hand hygiene of a constituent in hospital—but I did.
Unfortunately, on a number of occasions recently I have sat in a hospital and witnessed nursing care being delivered to my own daughter. Only a few weeks ago, when she was on a hospital trolley waiting to go into the operating theatre—distressed, anxious, upset—we witnessed nurses holding conversations over her head about intimate details of their love lives and their social lives, which, while she was in pain, my daughter had no interest in hearing. Not only was she subjected to those intimate details of their private lives; she was also subjected to a lack of care. She was completely ignored on that trolley. Yes, she was about to go into an operating theatre and be dealt with, but it is when patients are in that condition that they need nursing care most. They need to be reassured. They need to be calm. They need to know that everything is going to be OK. However, there was no interest in that.
The most appalling thing that happened was that, just before my daughter went into the operating theatre, one nurse told the other that she was going to the bathroom, and then gave exact details of what she was going to do there. I cannot think of a more polite way of putting it in the Chamber. It was a totally inappropriate conversation to be having outside the doors of an operating theatre.
A constituent who recently came to see me in my surgery told me that, when in hospital following a road traffic accident, she had noticed after a few days that her bottom sheet had not been changed and was bloodstained. Each day she wrote the date around the border of the bloodstains. When she left hospital 10 days later, she left that bottom sheet for the nurses to see, with the dates written in a pattern around the bloodstains. During those 10 days, no sheets had been changed. We used to change the sheets every day, and that was possibly excessive, but I think that, given that we are constantly trying to find ways in which to deal with, beat and get on top of hospital-acquired infections, bloodstained sheets indicate a lack of care.
I do not want to labour the point about complaints, because I know that a number of other people have already done so, and I feel that it is now the remit of the right hon. Member for Cynon Valley. Rather, I want to discuss immigration and its impact. We send £53 million per day to Europe, which limits our dealings with the rest of the world—in fact, the Prime Minister is trying to tackle that issue today. Labour will not commit to a referendum. Do Labour Members not see that that £53 million a day could be spent on dementia care, on Alzheimer’s care, on young carers? There are so many things we could do with that money.
People were asked one question when we went into the Common Market: do you want to go in, yes or no? They should be asked the same question to exit. If we can go to the electorate on behalf of the Liberal Democrats with a referendum on the alternative vote in a matter of months, why do we have to wait years to offer them a referendum on an issue as big as the European Union? Do we not realise what a self-serving, self-interested bunch we seem to people out there, when we can call an expensive national referendum on AV, yet obfuscate and delay on the question of European Union membership?
It is no good saying that people are not interested in this issue, because they are: it is the subject of almost every other question I am asked when I go out in my constituency. People now know exactly how much we are spending on the European Union, and they do not believe that leaving will cost us 3 million jobs. They would like a piece of the action in China, which reported growth of some 9.5% in the past year. They want some of the action taking place in the BRIC countries. That is where they want to trade—not in a sick and failing Europe that is getting sicker by the day.
I want to add my voice to those who have spoken out on this issue, and I would definitely join the two Cabinet Ministers in voting to be out. I would vote no tomorrow, and I know many of my constituents would. I completely support the measures in the health Bill in the Queen’s Speech, which will be well received by everybody, but I want to add my voice to the case for an in/out referendum. We must find a way to deliver that. We know that the Prime Minister means what he says; but if we can do it on AV, we have to do it on the EU: otherwise, people will not believe us.
Mr Kevin Barron (Rother Valley) (Lab)
I have to say to the hon. Member for Mid Bedfordshire (Nadine Dorries): welcome back to the Conservative party. I heard what she has been saying today from the Conservatives about 20 years ago. It led to their spending 13 years in opposition, and I hope it has the same result in a couple of years’ time. I look forward to that.
This debate seems to be more about what is not in the Queen’s Speech than what is, but immigration and access to the national health service are addressed, and the tone of this debate has been quite distasteful. We know that, from time to time, some of our constituents go to work in other European economic area countries; they pay their taxes and social insurance contributions there, and as a consequence they are allowed to obtain health care in those countries. Immigrants are not coming to this country to use our national health service, and they do not use it for free: they pay, as they should.
We need be very careful when we talk about people moving around Europe. Tens of thousands of our fellow citizens have gone to live in Spain, Portugal and France, not to work but to retire. If they return to this country en bloc, consider the impact on the health service, social care and care for the elderly. We need to have a rational debate on this issue.
Mrs Main
In the last Parliament, I was privileged to serve on the Communities and Local Government Committee. We produced a report on community cohesion and integration under the right hon. Gentleman’s Government. It said that the pace of change, the resources and facilities were all wrong, and many of the communities we visited said that. He needs to show a little humility when talking about immigration and numbers, because his own Government condemned the situation in that report.
Mr Barron
It was not a Government report but a Select Committee report, and I do not remember it, quite frankly.
Community cohesion is important and has been important in this country for centuries—not just since we joined the European economic area or the EU expanded to 27 countries, with people having the right to come and work here, as indeed we have the right to go out and work in other EEA countries. A lot of this debate is distasteful and is not the truth. In a recent by-election, a political party that is not represented here and I hope will not be was saying that, as of January next year, probably nearly half the population of Bulgaria will come and work in this country. That is nonsense, and neither Back Benchers nor Front Benchers should have a knee-jerk reaction to that type of debate. We should have sensible debates about what immigration does or does not do in this country.
Nadine Dorries
Can the right hon. Gentleman provide evidence for his numbers? Can he tell us how he knows what the numbers will be? Can he quote from some extensive research that proves this?
Nadine Dorries
How does the right hon. Gentleman know that that is not the figure?
Mr Barron
If the hon. Lady will keep quiet, I can tell her that that was what was said, but there are fewer than 8 million Bulgarians living out there. Many Bulgarians have been living and working in this country for many years, because they met criteria outwith the criteria laid down when Bulgaria and Romania joined the EU. The whole debate is disgraceful, and we should get it into some perspective.
Mr Barron
No, I have given way twice and I am not going to give way any more.
What is not in the Queen’s Speech? Public health has been mentioned by several people. I served on the Bill Committee for what became the Health and Social Care Act 2012. I will leave the reorganisation of the NHS for another day, but at the time the Bill was going through, the defence given by Ministers was, “What we will start doing is putting real measures down, and for the first time ever we will put in statute a responsibility to reduce health inequalities in this country.”
Two policies that most people involved in and concerned about public health thought would be in the Queen’s Speech are absent. One is the minimum pricing of alcohol, which was talked up by the Prime Minister over many months. There is evidence that it will stop some people drinking excessively. I served on the Health Committee in the previous Parliament, and just before the general election we published a report on alcohol. People ought to read it to see exactly what is happening. One of the worst statistics was on the people who are likely to die from alcohol-related diseases—certainly cirrhosis of the liver. Thirty years ago, they were people like me—men in their 60s—but now, men and women in their 20s are dying of that disease. This House has a responsibility to do something about that.
The other area that I wish to discuss briefly is the absence of legislation to bring in standardised packaging of cigarettes. That has also been talked up, not only by the Prime Minister but by others. The consultation on standardised packaging started on 16 April last year and ended on 20 August; now, nine months later, nothing is going to happen. I am deeply concerned, and I will tell Members why, although there can be no surprises about me and tobacco, because I have been on an anti-tobacco crusade in the House for nearly two decades. In my borough—I represent a third of it—there are still some 48,000 smokers, and although the number is declining, it is likely that more than 950 young people between the ages of 11 and 15 will take up smoking this year, and half of them will die a premature death. This year, more than 100,000 of our fellow citizens will die a premature death from using tobacco as instructed to by the tobacco companies. If half that many people were dying of anything else in this country, this House would be up in arms about such a massive number of deaths. In the past few months, what we have had is Ministers talking up the idea of legislation further to protect young children from starting smoking, but none of that has come about.
Paul Burstow
When the right hon. Gentleman chaired the Health Committee, it published the report that led to the banning of smoking in enclosed public places. That ban was only secured by a free vote in this House. Does he agree that, if we cannot get the Government to act, we need a free vote so that we can make the change in that way?
Mr Barron
I shall be putting my name in the ballot for a private Member’s Bill in a few days. If I am successful as I was in 1993, the right hon. Gentleman will have a Bill on standardised packaging on which to vote.
The Government have ducked the issue. There has been some influence—many people say that Lynton Crosby, who has come along to advise the Government, has had that influence, but I will not make that accusation. I wrote to the Prime Minister last week to ask several questions about whether Lynton Crosby has been involved in giving any advice in political circles in this country. Lynton Crosby is advising the Conservative party about re-election, but I want to know whether he has been involved in this area, given his record both politically with the party that he ran, and with his company’s work with and the money it has taken from tobacco companies.
The right hon. Member for Sutton and Cheam (Paul Burstow) is quite right to say that in 2006, when this House took a decision on smoking in public places, Members of this House had a free vote. I was effectively the architect of that free vote, because I tabled an amendment signed by 10 members of the Health Committee and I negotiated a free vote with my own party, as one was being offered by the then Opposition. On that major public health measure, this House was trusted to take the decision itself. Yes, we were lobbied by our constituents. There is nothing wrong with that—after all, it is what we are here for, although we cannot represent them all, as some people seem to think we can. The House was trusted to make that decision and the then Government, to their credit—they should have been awarded that credit—allowed it to do so. Many people were against that, including the Prime Minister, who has said since that he thinks it is the best piece of legislation that ever went through this House.
I say to Ministers that, whether it is because of strings being pulled by people close to the tobacco lobby or because of anything else, we cannot tolerate their not taking further action against tobacco when it is killing 100,000 of our fellow citizens each year. It is about time that someone showed some courage, stood up for ordinary people and for good public health measures—not nonsense measures—and did something to stop the dreadful premature deaths in this country.
Sir Gerald Howarth (Aldershot) (Con)
I must say at the outset that I am disappointed that no day has been set aside for us specifically to discuss defence and foreign affairs, because we face some pretty severe challenges around the world and, of course, our armed forces are undergoing major change. Such a debate would have provided me with a further opportunity to argue that we should not spend another £2.5 billion on overseas aid this year and that we should divert that money to our armed forces, which are very hard-pressed.
James Duddridge
I understand my hon. Friend’s argument, but I disagree with it. I respectfully ask him: what is the right amount to spend on international aid?
Sir Gerald Howarth
It is a question of priorities. Our level of aid is such that the Prime Minister can say, with great justification, that Britain has given a lead in the world, but the figure of 0.7% is entirely arbitrary. I would submit that there is no natural level for the amount of aid to be given. I am not an opponent of overseas aid; I just believe that there should be other priorities at the moment.
I do not wish my speech to be a negative one, and it was written not by Mr Lynton Crosby but by myself. I welcome some aspects of the Gracious Speech. The first is the continuing priority to cut the budget deficit. It was pretty nauseating to listen to the shadow Health Secretary, the right hon. Member for Leigh (Andy Burnham), and to hear him demand more money here, there and everywhere. He was part of a Government who destroyed the public finances of this country. That is why we have to make cuts. These cuts are Labour’s cuts across the country, because Labour destroyed the public finances by running up an impossible debt.
Secondly, I welcome the confirmation that we are going to pursue further reforms of the benefits system. It has been most encouraging to see how warmly the country has received our changes, particularly the £26,000 limit on families receiving benefits. The Philpott case was an eye-opener to many, highlighting that far too many people in this country are living a wholly immoral lifestyle on public finance, and we need to crack down on that.
Sir Gerald Howarth
As the right hon. Gentleman would not give way to me, I am rather disinclined to give way to him.
Sir Gerald Howarth
I will come back to the right hon. Gentleman in a minute.
Thirdly, I welcome the further attempts to bear down on regulation. We need to do much more to liberate businesses from regulation, but we are, of course, inhibited by Europe, on which I wish to say a few words later.
Fourthly, the reform of long-term care arrangements has not come before time. I recommend to my Front-Bench colleagues an excellent publication from March 1997 called “A New Partnership for Care in Old Age.” We had a tremendous scheme then, which unfortunately we were not able to implement because power passed to Labour, whose Government did nothing in the 13 years when they had stewardship of these matters. I also welcome the measures to tackle immigration, although I suspect they will have limited effect.
Finally on the good news front, I think the Prime Minister has done a fantastic job of promoting Britain’s interests overseas, particularly in developing overseas trade. We have seen some reflection of that in increased trade with non-EU countries, as against trade with the EU, which, as we all know, is in meltdown.
Two issues were not mentioned: gay marriage and Europe. My hon. Friend the Member for Gainsborough (Mr Leigh) set out why the same-sex marriages proposal is a complete diversion. We should not be doing this: the Government have no mandate for it, it is deeply divisive, particularly among many Conservative supporters, and I think we should drop it here and now.
Immigration is a big issue and it is relevant to this debate, as the Government are seeking to put in place changes to prevent people from benefiting from our taxpayers’ money by coming to this county simply to tap into our health care system. There have been encouraging signs. The observations made by the right hon. Member for Rother Valley (Mr Barron) show precisely what has been wrong in this country, in that anybody wishing to speak up on immigration has been told that their tone is wrong, or this is not the right time, or they are insensitive. His Front-Bench colleagues have now recognised that the kinds of policy he supports have been deeply damaging to his party. Labour supporters are as concerned about immigration as Conservative supporters and, I suspect, Liberal Democrat supporters.
Mr Stewart Jackson (Peterborough) (Con)
My hon. Friend is making a powerful case. Does he agree that we should take the blandishments of the right hon. Member for Rother Valley (Mr Barron) in respect of Romania and Bulgaria with a pinch of salt, given that the Labour Government predicted that between 13,000 and 15,000 eastern European citizens would come to the UK, yet over 1.2 million have come here since 2004? Labour got the figures catastrophically wrong.
Sir Gerald Howarth
My hon. Friend is absolutely right. I was going to tell the right hon. Gentleman that some 1% of the Romanian population of working age, which is 150,000 people, have indicated that they wish to come to this country, as have 4% of the 4.9 million Bulgarians of working age, which is another 200,000 people. That is another 350,000 people. We cannot go on building houses and cities. As MigrationWatch has said, we will need eight cities the size of Birmingham if we are going to accommodate all the people who wish to come to this country.
I welcome the fact that the Opposition have at long last recognised that this is a serious issue. They have not a snowball’s chance in hell of being re-elected unless they are prepared to recognise the concerns of the British people. Under Labour’s stewardship, there was a deliberate act of policy: Andrew Neather, a speech writer at No. 10, said immigration was being positively encouraged by the Labour Government in order to
“rub the Right’s nose in diversity.”
They knowingly inflicted this on the country—it was not done by accident—and they left this Government with the most awful backlog of cases to deal with, which is unfair to those who ought to be allowed to stay in the UK and to those in our country whose lives are affected by the presence here of people who should have been deported.
Mrs Main
The Select Committee report “Community Cohesion and Migration”, which Labour Members seem to have forgotten about, stressed that second and third-generation immigrants were as resentful as the native British population, because the necessary resources were never provided by the Government, who encouraged so much immigration so fast and without preparation.
Sir Gerald Howarth
My hon. Friend is absolutely right. Immigration is imposing burdens on our services, such as the health service and social services. I am seeing that in my own constituency. We now have some 10,000 Nepalese, mostly elderly, who have come to the United Kingdom as a result of the politicians’ caving in to the campaign run by an actress called Joanna Lumley. That has resulted in a fundamental change to the nature of Aldershot that has deeply upset my constituents, who are entitled to express a view without being told that they are racist. They do not like seeing their locality changed—[Interruption] I wish the right hon. Member for Rother Valley would shut up—because of something on which they were not asked for their opinion. When they do express an opinion, they are dismissed as being racist.
The projection that the United Kingdom’s population is likely to reach 70 million in the next 15 years means, as I said, that we will need to build eight large cities outside the capital during that time—in other words, one home every seven minutes, day and night, just to house new immigrants unless the Government are able to continue their progress in tackling immigration. The 2011 census revealed a mass exodus of white British from the city of London—a fall of 600,000 between 2001 and 2011. Almost half the population of Ealing and Hammersmith were born outside the United Kingdom. These are fundamental changes to the nature of our country. The people of Britain are entitled to express a view on the composition of their country. Last week there was a story in the Evening Standard about Harris Primary Academy Philip Lane in Haringey, where 59% of the 463 children are on free school meals, 79% have English as a second language, and Somali and Turkish are the most prevalent languages. What are we doing to our country? We have to take sterner action, and I recommend that to the Government.
Let me turn briefly to Europe, which the right hon. Member for Leigh dismissed as irrelevant and not a great issue that should be addressed, although he had no answer to the challenge by my hon. Friend the Member for Gainsborough. This issue is not going to go away, and it is of great concern to people in this country. Our European partners are determined to create a united states of Europe, which is not what the people of Britain want. The Prime Minister is entirely right to seek to renegotiate. He is also right to have a referendum. Like my right hon. Friend the Member for Mid Sussex (Nicholas Soames), I profoundly believe that he will deliver that referendum after the next election. The trouble is that people are uncertain about whether we are committed to that. The way to deliver it is a new Act of Parliament during this Parliament to determine that there will be a referendum during the next Parliament.
Mrs Anne McGuire (Stirling) (Lab)
It is a pleasure to speak in this debate and to follow the hon. Member for Aldershot (Sir Gerald Howarth), although obviously I would not necessarily agree with all his comments.
I was not going to say anything about immigration, but sometimes we need to look to ourselves when we talk about that subject. I suspect that there is not one individual here who has not had at one point in their background an immigrant who came to the United Kingdom. Those who talk about the “native British” need to reflect on the fact that Britain has always had immigrants—from the Vikings to the Huguenots and from the Dutch to the Irish. My father told me that our family were descended from members of the Spanish armada who were shipwrecked off the north coast of Ireland when they were trying to avoid the English fleet. We need to reflect and have a rational debate about immigration, not the hysteria that there sometimes is in this House.
Mrs McGuire
Very quickly, because I want to get on to the main substance of my speech.
Mrs McGuire
As I have said, I do not want to go down that track but, having been nursed in a UK hospital by non-indigenous British staff, I think we ought to be more balanced in our comments on immigration.
The main focus of this debate—health and social care—is a vital issue for many people; even if they do not think so at present, it certainly will be in the future. As we are all aware, the changing demography and advances in modern medicine and technology have thrown up challenges to our society in how to develop the capacity for social care and, indeed, how to pay for it. The issue is not unique to the United Kingdom; it is a challenge in many countries across the world. As has already been said, the Administrations in Wales and Scotland are developing their own policies in the realm of social care.
Although the legislation under discussion relates to England specifically, I want to discuss some general issues that cut across the debate in the whole of the UK. Like my colleagues on the Opposition Front Bench, I welcome some aspects of the Care Bill, which builds on the work undertaken by my right hon. Friend the Member for Leigh (Andy Burnham), the shadow Health Secretary, when he was in government. I hope that the Bill will simplify the existing regulations, provide some confidence that lifetime assets will not be swept away by care costs, and—I stress that I hope that this will happen—eradicate the postcode lottery of care, introducing an element of consistency to the system. The Bill should also give stronger legal rights to carers—I echo the words of my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley)—who are often the forgotten players when we debate social care.
Having said that, there are still some major areas of concern and I want to concentrate on them. Frankly, they throw up challenges for everyone in this House, regardless of which political party we belong to. I am not convinced that the Government have thought through where young carers fit into the big picture painted by the new Bill. It is, of course, a welcome development that, for the first time, councils will have to meet the eligible needs of carers for support. I also welcome the aim for a family assessment, which in some areas should pick up the pressures on young carers.
Many organisations representing young carers, however, feel that many concerns have not been covered adequately. The well-being of young carers very much depends on the level of support that the person they care for—more often than not their parent—receives. If that support is not adequate, an unacceptable pressure remains on young people who should, to be frank, be doing other things. Council budgets are being stretched and care and support is being restricted in many instances to those who have critical or severe needs, so an unacceptable burden is still being placed on young carers who support family needs but who will not meet the new exacting standards.
I do not want to reiterate some of the points that other hon. Members have made about the need to move from the current random method of identifying young carers to a more systematic approach. I want to spend a few moments on the issue of working-age people who need support from our social services. Too often the debate on social care concentrates on older people, but it should not focus on them alone, because the reality is that about a third of people who rely on support are of working age and they are often forgotten. I am sure we will all agree that a younger person’s need for support from the care system is not necessarily the same as that of an older person. To that end, the all-party parliamentary groups on local government and on disability launched a joint inquiry to investigate how social care policy, funding and practice can better meet the needs of disabled adults. The hon. Member for South Derbyshire (Heather Wheeler), as chair of the local government all-party parliamentary group, and Baroness Campbell of Surbiton and myself, as joint chairs of the disability all-pary paliamentary group, were delighted that 10 parliamentarians of all parties and from the Cross Benches in the Lords agreed to undertake an independent inquiry.
The report will be launched officially on Wednesday, so I will not pre-empt its findings. I hope that colleagues will take time out of their schedules to come along and hear what the disabled people, organisations and experts that appeared before the inquiry committee said. The evidence is powerful and I hope that people will read it. When we debate health and social care over the next few weeks, I hope that we will listen to the voices of the people who matter: the people on the receiving end of the system. What they say gives us food for thought and food for action.
It is well documented that more than a third of the people who receive social care are of working age. We must also recognise that most of the pressure and innovation will be at a local level. It is important that we encourage local organisations and local government to ensure that there is innovation in the system. As my right hon. Friend the Member for Leigh said in his opening remarks, there is a funding crisis in local government that no amount of innovation can mitigate. There is only so much innovation that any system can support without the recognition of financial instability. It is not just Labour councils that are saying that to the Government; councils of all political persuasions are trying to persuade the Government that they cannot continue to support the pressure that is being placed on their social services.
Finally, we have spoken a lot about the cap and the protection of assets. The Government have not been clear about what will happen to people who do not have the capacity to build up assets, and I am talking about working-age adults who are disabled who have not had that opportunity. The overwhelming majority of people with learning disabilities will not be affected by a cap because they do not have an asset base to protect.
I hope that there will be a robust, challenging and honest debate about the future of social care.
Pauline Latham (Mid Derbyshire) (Con)
It is a pleasure to speak in the health and social care debate on the Queen’s Speech, which seems to have been rather wide-ranging.
I pay tribute to the Government for introducing the Care Bill. It shows that they have listened to the concerns of many people. I support the proposals for three main reasons. First, the Bill will put people in control of their care and give them greater choice. Secondly, it will simplify the system and processes to provide the freedom and flexibility that local authorities and social workers need to innovate and achieve better results. Thirdly, it will provide people with a better understanding of what is on offer, help them to plan for the future, and ensure that they know where to go for help when they need it.
The Care Bill is essential to the modernisation of adult care and support in England. One purpose of the Bill is to set out clearly what support people can expect from the Government and what action the Government will take to help them to plan, prepare and make informed choices about their care. I support the well-being principle as an underlying principle for care and the support for carers. However, I urge colleagues in the Department of Health to monitor the implementation of the Bill carefully to ensure that local authorities are completely clear about their responsibilities.
I have a constituent who suffers from an acquired brain injury. His parents sought assistance from the adult care services department of their local authority, Derby city council, and from the primary care trust. Both organisations say that it is the other’s responsibility. That is causing great distress and frustration to my constituent’s elderly parents who are caring for him and his six-year-old child. I have written to both parties, as well as to Ministers in the Department of Health, and so far both have repeatedly refused to take responsibility.
I have also written to Health Ministers about another constituency case. A constituent of mine is suffering from severe chronic pancreatitis and has been told he needs to undergo a pancreatectomy and an islet cell transplant. However, as the national specialised commissioning group has not issued confirmation of funding for an islet cell laboratory in my region, my constituent is left suffering in extreme pain unnecessarily. I would like to see movement on the two cases that I have raised with the Department of Health.
Over the past three years, I have also raised constituency casework concerning the cancer drugs fund, and I pay tribute to my right hon. Friend the Prime Minister who set up that initiative. Some 23,000 cancer patients in England have benefited from the additional £650 million provided by the Government to fund cancer drugs.
Mel Stride (Central Devon) (Con)
Like my hon. Friend, I welcome the cancer drugs fund, which I think is important. About 150 of my constituents will die from cancer this year—about 100,000 people a year. Currently, 15% of 15-year-olds are regular smokers. Does my hon. Friend feel, as I do, that we should have standardised plain packaging of cigarettes to discourage the take-up of smoking and the cancer that results from it?
Pauline Latham
I certainly do, and having watched my mother die from lung cancer, I passionately believe in anything that will stop people smoking. It is not a pretty sight, and I would do anything to stop young people in particular taking up the drug of smoking. That is important.
Sir Gerald Howarth
I am grateful to my hon. Friend for giving way. Our hon. Friend the Member for Thurrock (Jackie Doyle-Price) mentioned the risk from counterfeit tobacco, which is very serious indeed. There are two risks: first that the substance will be less pure than commercial tobacco; and secondly that the Treasury will lose a tremendous amount of money as the result of trafficking.
Pauline Latham
There is already counterfeit tobacco, so I do not see that it would make much difference. Those who are drawn to smoking do not go over and buy counterfeit goods; they start off in this country—often under age—by buying cigarettes over the counter. If we can stop that, I passionately believe we should do so, and I am disappointed that that measure was not in the Queen’s Speech.
The cancer drugs fund is a force for good, but in my constituency of Mid Derbyshire, which was covered by the east midlands cancer drugs fund, I have had constituents who were unable to access cancer drug treatment that was available from other CDFs. In one case, if my constituent had lived just 40 minutes down the road in Burton upon Trent in the west midlands, that CDF would have paid for her treatment. She paid more than £60,000 of her own money, but since I first raised the issue she has sadly died. The reforms introduced by the Government from 1 April this year and the establishment of the national CDF will end the unfair system of the postcode lottery. Under treatments now offered by the new NHS Commissioning Board, if my constituent were alive today, she would have access to that treatment.
Pauline Latham
I am running short of time; I am sorry but I must make progress.
I urge my right hon. and hon. Friends on the Front Benches to look again at this matter because the Government have set up the CDF to ensure that people get access to the life-saving cancer treatment they need. I have constituents who need access to a form of radiotherapy called “SIR-Spheres”, which is used where bowel cancer has spread to the liver. That treatment is not now available anywhere in the NHS—people can pay for it, of course—although it was previously available in most CDF areas, although not the east midlands. Will the Minister look again at the issue and meet me and my constituents’ hospital consultant, Dr Jamie Mills, to see whether we can make progress?
I recently started working with the British Heart Foundation on sudden adult death syndrome after I was contacted by two constituents whose son, Sam, died suddenly as a result of cardiac arrest. He was 19 years old. SADS claims the lives of at least 12 young people such as Sam every week, but many of those fatalities are completely preventable. I knew a young man in his 20s who died in the middle of his round in a dressage competition. Like Sam, he was a very fit young man. All such young deaths are devastating for everyone concerned, family and friends alike.
The seconds and minutes after someone has a cardiac arrest are vital to ensuring their survival. Cardiopulmonary resuscitation should be used immediately until a defibrillator can be located. If those activities are used together, the potential for survival is immediately increased. In fact, here in the UK, we currently have only a 20% survival rate—that figure is for all cardiac arrests, not just cardiac arrests among young people—but in Seattle, where there is mandatory CPR education in secondary schools, the survival rate has increased to 54%. I am sorry that my hon. Friend the Under-Secretary of State for Skills in the Department for Education is no longer in the Chamber—he was here a few minutes ago. My suggestion is that, if we roll out a schools programme, we could increase survival rates, as more children are trained to undertake CPR and to follow-up with defibrillators.
I am deeply concerned about those figures. I should like to highlight the pressing need for the availability of life-saving equipment and skills in our schools. In the first instance, will the Department of Health work with local authorities through health and wellbeing boards to urge them to consider providing funding to install automated external defibrillators in all schools and other local authority facilities? AEDs are very simple to use, even for the untrained layperson. Detailed instructions on how they are to be deployed are delivered through a set of simple audio and visual commands. The machines are programmed to administer an electrical shock only if the patient’s condition requires it. In order to prevent mortality as a result of SADS, it is essential that those easy-to-use and relatively inexpensive devices are made available in schools.
Further to the availability of AEDs, it is also extremely important that, through citizenship lessons, children of school age are aware of, and able to administer, life-saving treatment such as CPR. Such a scheme would cost local authorities very little, and ultimately has the potential to save many lives every year. Organisations such as St John Ambulance would be able to go to schools to train students and teachers so that they are able to undertake such treatment.
In addition, I should like to point out to hon. Members that the British Heart Foundation provides grants to schools for defibrillators. Many schools are not aware of that. Perhaps MPs on both sides of the House could make schools in our constituencies aware of the grant. I look forward to working with the Department of Health on the issues that I have raised about the cancer drugs fund and on defibrillators.
Steve McCabe (Birmingham, Selly Oak) (Lab)
It is a pleasure to follow the thoughtful speech of the hon. Member for Mid Derbyshire (Pauline Latham).
I congratulate the Government on their fine display of unity on the Queen’s Speech. In all my years in the Whips Office, I cannot recall seeing anything quite like it. In the early days of the Government, the ambition was simple: wipe out the deficit in a single Parliament, set debt on a downward path and restore health to the economy. Hon. Members were to judge success by how the credit ratings agencies maintained the triple A rating. Simple! The Government now claim that their ambition is to cut the deficit by a third, but almost everyone else believes it is more likely to be cut by only a quarter. That is our lot for the rest of the Parliament. Debt is rising, not falling, and triple A credit ratings are but a distant memory.
After the costs in administrative chaos caused by the top-down reorganisation of the health service, which the Prime Minister promised would not happen, the Government are turning their hand to social care. They are right to do so, at least in the sense that social care is a time bomb that desperately needs tackling. My most recent survey of constituents in Selly Oak shows that 73% of them consider care to be an issue of extreme importance, and only 42% think that the quality of care received by someone close to them is satisfactory.
People are struggling—people such as Mrs Hanslow, who cares for her 96-year-old father. She asks only for the odd break, and in the past she has arranged that by phoning a social worker. When she tried that this February, she discovered that the social worker had left. The office said that somebody would phone her back, but nobody did. She phoned again and was told that she needed to make a fresh application; apparently, files and arrangements leave with the social workers these days.
After several abortive attempts, Mrs Hanslow spoke to a nice lady called Wendy, who said that she would sort the situation out. Then a Mrs Collins rang saying that she was arranging for a social worker to come. But guess what? Mrs Hanslow waited in all day and no one came. Frustrated, she rang again and spoke to a Jackie, who could find no record of her application or complaint but said that someone would ring her back. No one rang, so Mrs Hanslow phoned again. This time, people at the office were not so nice. Mrs Hanslow was told that nothing had been reported because the social worker was out of the office.
Pauline Latham
What the hon. Gentleman is describing is the fault of the local authority, not the Government. The local authority is responsible for social workers, not the Government.
Steve McCabe
Bad practice is a problem everywhere, and everyone has to take responsibility for it—that is my point.
When Mrs Hanslow got upset and said she would have to cancel her break and lose her deposit, she was told, “That’s up to you.” She did not get her respite care. She is now under the care of the GP, and if she cannot carry on, we will need to find a bed for her dad. Perhaps he will become another bed blocker; there are so many in Birmingham that the brand new Queen Elizabeth hospital cannot cope and emergency wards in the old hospital, scheduled for closure, are reopening.
What about my constituent Margaret McGarry? She has cared for her elderly mother, who now has 9% kidney function and has had a dementia score of six, for about 10 years; if it was not for Ms McGarry’s love and care, her mum would probably be dead. In 2004, her mum received direct payments from Birmingham, which enabled Ms McGarry to hold down her job as well as look after her. The family then moved to Redbridge, but Redbridge decided that Ms McGarry’s mum was Birmingham’s responsibility. Ms McGarry pointed out that she was the carer and that her mum lived with her, but that was not the case as far as Redbridge was concerned. Eventually, the council offered the equivalent of six hours of support, as opposed to the 34 that Birmingham had provided.
Last year, after a hospital experience that almost killed her mum, the family moved back to Birmingham. Ms McGarry’s mum now needs almost constant care. That means another assessment, which takes weeks and weeks. As soon as they moved, Redbridge council terminated the payments. Birmingham’s assessment commenced in August. In November, it recommended fewer care hours than Redbridge and by December still had not paid a penny. As the old lady’s health deteriorates, so does the level of support.
I have had a letter from the man in charge assuring me that the case is complex. One of the complexities seems to be that Ms McGarry has exercised her rights and engaged a solicitor. Apparently, that is a very naughty thing to do if a person is caring for an elderly relative because Ms McGarry has now been advised that all direct payments are being stopped. That is the reality of social care in this country today, and it is against such nonsense that we are asked to have faith that the Government are going to give people more rights. We are asked to accept that £150 million and promises from the Secretary of State will fix the problem. It may have escaped the Government’s notice, but the most recent round of cuts took a further £800 million out of services for the elderly and disabled, on top of last year’s cuts. When will it dawn on the public relations boys in No. 10 that it is pointless pretending they are giving people more rights when they are cutting services to the bone?
Let us examine what the Government are actually doing. They say they are setting a cap at £75,000—£72,000 in the first instance—raising the savings limit to £123,000 and giving a guarantee that no one will have to sell their home. Of course, £75,000 covers only the costs of care, not what is called hotel costs, such as food and accommodation. The cap is not, as my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) pointed out, the amount the individual spends, but the amount a local authority can buy for £75,000. When we add the real costs of residential care, rather than the local authority rate, to the hotel charges, it is much more likely that an individual will spend at least double that amount before the cap kicks in.
The £123,000 savings threshold means that anyone who has capital, including an empty home, will have to pay all their care costs until the cap is reached. That only leaves the guarantee that no one will be forced to sell their home—except that since October 2001 no one has been forced to sell their home. The previous Government introduced the deferred payments scheme and, in 2009, advised local authorities that if they failed to recognise the scheme, the courts would almost certainly rule their actions illegal. No interest is charged on deferred payment arrangements while a person is in receipt of care, or for 56 days after their death. The Government intend to make the existing arrangements compulsory, but also apply interest charges from the moment the scheme is activated. While questions remain about who will qualify, it is estimated that most of the additional subsidy will go to the richest 40% of people in the care system. That is what is wrong with the Government. The Government are built on falsehoods: falsehoods about the unity and purpose of the coalition; denial about the real state of the economy; and policies that are more about UKIP than the UK. We need genuine reform. That is what a decent Government would put in the Queen’s Speech.
Mr Robert Walter (North Dorset) (Con)
I would like to talk on two issues that, although not included in the Queen’s Speech, will come before the House in this Session, one of which needs to be addressed with some urgency.
In 2005, the European Court of Human Rights ruled that Britain’s automatic blanket ban on the right of prisoners to exercise their vote was incompatible with the convention on human rights, of which we are a signatory. Almost eight years on, the United Kingdom has still not acted on that ruling and time is running short. The Government must submit their response to the Council of Europe’s Committee of Ministers by 30 September. We have less than five months to prepare and present a formula that will be not only satisfactory to the Committee, but acceptable to Parliament and credible in the eyes of the British public.
I would like to state from the outset that I disagree with the ECHR ruling. I believe that the current ban on prisoner voting, which was ruled on and reinforced by successive Parliaments, is a proper and proportionate response following conviction and imprisonment, and I spoke and voted accordingly when the House last debated this matter. I repeat that to my mind the right to vote is not an intrinsic right, but a civic duty reserved for responsible citizens. However, we cannot talk of individual duty and responsibility in the eyes of the law while shirking our national obligations to uphold the international rule of law, one of the basic tenets of British foreign policy. Here is the troubling paradox: if, as the old maxim goes, no man is above the law, surely no country is either. I welcome the fact that this Government, unlike their predecessors, have recognised this responsibility, and I am pleased that the draft Bill on prisoner voting has been presented and that a Joint Committee will consider its options, but I am concerned that matters are progressing slowly against a swiftly approaching deadline and that we are not making a strong enough case for a pragmatic solution.
If the Government choose to maintain the status quo, we will stand in breach of the convention. If we ignore the judgment, we send the message that dissent is an acceptable state of play, and we would damage our reputation and lose the moral authority to demand compliance from those countries that persistently violate international law. Do we want our record on observing the rule of law compared with that of Russia, Ukraine, Turkey, Azerbaijan and Armenia? It would be neither right nor desirable, but a solution might be closer to home than we think.
Before the blanket ban came into force under the Representation of the People Act 1969, limited forms of prisoner voting were permissible and even practised. The Forfeiture Act 1870 disqualified convicted felons from voting, but only those serving a sentence exceeding 12 months. Felons serving less than 12 months could legally vote, and where it was practically and logistically possible, some indeed did. In the 1950 general election, for example, postal ballots were returned from prisoners in jails across the country.
There is more. When the Criminal Law Act 1967 abolished the distinction between felonies and misdemeanours, the concomitant disqualification on prisoner voting came temporarily to an end. In fact, all prisoners could vote. In effect, these prisoners had the right to vote, and it might surprise people that this was not an unintended consequence of the legislation, but a conscious decision based on a recommendation by a law review committee that the practice of prisoner disfranchisement should not continue.
That policy continued until a ban was introduced in 1969 under the Representation of the People Act, but the point is that the issue was not historically set in stone—not under the Forfeiture Act and not when the United Kingdom signed the convention in 1950—so past precedents should lead the way. To this end, the Government’s proposals on minimum thresholds are worthy of consideration, as they reflect an approach that was deemed compatible with UK law, public opinion and the convention, but we need to step up the dialogue.
How, then, do we move forward? I believe that the distinction between felonies and misdemeanours is obsolete, but the classification of crimes into indictable and summary offences, which distinguishes between grades of crime, mode of trial and punishment available, continues to apply. Like the old felonies, the most serious indictable crimes are tried before a Crown court, and I believe that this distinction could be used as a building block for a sentence-based solution that recognises the gravity of an offence committed. This is a route that we should consider, and the United Kingdom now has an advantage: the European Court recently reaffirmed its commitment to allowing the UK greater flexibility in how we apply the ruling, providing an opportunity to develop a policy that reconciles both principle with pragmatism and which allows our past to pave the way forward.
Mr Christopher Chope (Christchurch) (Con)
I think my hon. Friend has made a constructive contribution, but would he accept that what he is saying is totally at odds with what the people of this country believe? They do not want prisoners to have the vote and they do not see why European judges should be bossing them around and telling them otherwise.
Mr Walter
I do not see why European judges should be bossing us around either, but if we stick to the principle that we should do nothing that we did not already do when we signed the convention back in 1950, then we have a pragmatic way forward to deal with the problem.
I said I wanted to deal with two issues. I want to say a few words to those of my colleagues who are often banging on about Europe. Let me remind them that divided parties do not give the electorate confidence and are generally not re-elected. If those colleagues genuinely want a referendum, they should rally behind the Prime Minister, who has a clear commitment to address the European Union’s institutional deficiencies and to get a better deal in Europe and then put that to the people of this country in a referendum. Carrying on in this mode is a sure-fire way to give Nigel Farage job security, for we will keep UKIP in business for ever if we undermine the Prime Minister and lose the next election. Perhaps some of my colleagues enjoy banging on about Europe and are not interested in the Prime Minister’s endeavours to find a solution, but they will have plenty to bang on about if we have another Labour Government. If they sincerely believe that what we want is a referendum on Europe, let me tell them that the only way we will achieve that is to return a Conservative Government. Therefore, I shall not support the amendment that has been tabled, although not yet selected; I shall definitely be supporting the Prime Minister.
Stephen Timms (East Ham) (Lab)
I am pleased to follow the hon. Member for North Dorset (Mr Walter). He is right: we have heard a wide variety of views about Europe from the Government Benches in this afternoon’s debate. The most compelling case was the one set out in the first Back-Bench contribution, by the right hon. Member for Mid Sussex (Nicholas Soames). He made a compelling case for the UK to remain in the European Union. He was also right to make the point that what his constituents are really concerned about is the state of the economy.
That is the background to the Queen’s Speech. There is wide anxiety across the country because of our economic difficulties—rising unemployment and falling living standards. Their root is in the global financial crisis that has engulfed us and others, but they have been compounded by the failure of the Government’s economic policy to deliver what we were promised it would. We were told—I remember the Prime Minister telling us this three years ago—that the policy would deliver steady growth and falling unemployment. Instead, we have had no significant growth since, and unemployment has stayed high. It is rising at the moment and is forecast to become higher still later this year. We will get an update on Wednesday, but the key backdrop to the rather thin Queen’s Speech that we are debating over these few days is rising unemployment, falling living standards and the inability of the Government’s economic policy to deliver what we were told it would.
There is also a lot of anxiety about what is happening in the health service. That was clear from a survey of 1,700 nurses, the findings from which were published in the Sunday Mirror yesterday. Fifty-five per cent of them said things had got worse in the NHS since the election, compared with 6.5% who said they had got better. More than half the nurses surveyed said that morale in the national health service was either poor or at rock bottom. Rather startlingly, more than 40% said that there had not been enough staff to provide safe cover on their most recent shift. It is quite difficult to reconcile that description of what is happening in the health service—which tallies with some of the things we have heard in this debate about what is happening in hospitals—with the rather rosy picture that the Secretary of State presented to us at the beginning of the debate.
When this Government were elected, they criticised the health service targets that had been set under Labour, but there is no doubt that some of the targets delivered massive and very welcome improvements. In particular, the target for 98% of accident and emergency patients to be seen within four hours was very valuable. I was pleased to hear the Secretary of State affirm its value this afternoon. Before it was introduced, I regularly saw constituents who had experienced terribly long delays in accident and emergency. It was not unusual to hear from people who had been kept waiting all night, for example, but when the target was introduced the problem was resolved completely, and remarkably quickly.
After the election, this Government weakened the target from 98% to 95%. I am glad that there is still a target in place, but, as I said to the Secretary of State in an intervention earlier, there are growing signs that it is not being hit. The NHS in England has now missed the new, reduced target for major accident and emergency units for 32 weeks running. I hope, as he has reaffirmed the importance of the target today, the right hon. Gentleman will take steps to ensure that it can be delivered rather than be missed.
I want to mention two other parts of the Queen’s Speech. My first point is not a matter for the Ministers on the Front Bench today, although it is likely to be of some interest to them. The Mesothelioma Bill, announced last week, is the culmination of a process begun by the last Government, in which my noble Friend Lord Mackenzie played an important role. The plan was for the insurance industry collectively to compensate the victims of diseases caused by exposure to asbestos during their employment, often many years previously. Problems have arisen when the original employer’s insurance policy cannot be found.
The Bill is starting in the other place. I was struck by a report in The Independent on Sunday—not yesterday, but the week before—that the proposal had been so
“watered down after extensive lobbying from the insurance industry”
that it would help only a fraction of the victims, and that payments would be 30% lower than was standard. The report went on to say:
“Department for Work and Pensions minister Lord Freud met insurers 14 times about asbestos between October 2010 and September 2012. Over the same period, he met victims’ groups twice.”
It also stated that the scheme would apply only to people with mesothelioma and not to the similar number of people affected by other conditions caused by exposure to asbestos, and that one of the victims’ groups had described the Bill as an “insult”. As the Bill goes through the other place and then through this House, I hope that the Government will accept that many of us want to see a fair settlement for asbestos victims, rather than a scheme that simply minimises the costs to insurers. We know what a terrible disease mesothelioma is, but the other asbestos-related conditions are also very troubling.
I also want to comment on the commitment in the Queen’s Speech to ensure that
“it becomes typical for those leaving school to start a traineeship or an apprenticeship, or to go to university.”—[Official Report, 8 May 2013; Vol. 563, c. 3.]
I do not know what that means. I searched through the speech made by the Secretary of State for Business, Innovation and Skills on Friday without finding any illumination of that commitment. Indeed, when my hon. Friend the Member for Streatham (Mr Umunna) responded, he accurately described the proposal as “vague”. It is not at all clear what “typical” means in this context, for example.
I was in Germany with the shadow Secretary of State for Work and Pensions, my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), last month. In the jobcentre in the town we were visiting, we were struck by the fact that young people were expected either to be on their way to university or to have an apprenticeship place arranged by the age of 15. For the 20% of youngsters who are not in that position, the jobcentre sorts it out for them. I hope that we can do something similar here.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
On a point of order, Madam Deputy Speaker. I am sorry to interrupt the debate, but I need to raise a matter of extreme urgency. At the weekend, a constituent of mine, Augustine Umukoro, came to my surgery to consult me about his immigration situation. He handed me a letter and told me that he had had a meeting with representatives of the UK Border Agency, who said that in two weeks they might have to start removal proceedings, for which they would visit him and his family—his wife and their two children—in their home. I therefore dictated a letter to the Home Secretary today, asking her to look into the matter. Within the past hour, I have had a telephone call from Mr Umukoro to say that when he reported to the UK Border Agency office at Dallas Court in Salford, as he does every week, he and his children were taken into custody. His wife was not, as her whereabouts appeared to be unknown. He was taken down to Heathrow, and he is due to be removed from this country at 10 o’clock tonight without any warning and without the Border Agency having fulfilled any of its conditions.
I took the matter up with the office of the Minister for Immigration, the hon. Member for Forest of Dean (Mr Harper), half an hour ago. His principal private secretary told me that, as far as he knew, the Minister was content for the removal to go ahead. This is not a removal; it is a kidnapping. It is against every aspect of the rule of law in this country, and I am making it public because it is about time that acts such as these were stopped and because, in this particular case, Mr Umukoro should be allowed, through his Member of Parliament, to make representations.
Madam Deputy Speaker (Dawn Primarolo)
As the right hon. Gentleman will know, that is not a point of order for the Chair. He is an experienced Member of Parliament, and he has placed this important issue on the record today, which I suspect was his intention. I am sure that he will continue to hold discussions with the relevant Minister right up to 10 o’clock tonight. This is not a matter for the Chamber or for the Chair but, as I have said, I know that he will wish to pursue it elsewhere.
Sarah Newton (Truro and Falmouth) (Con)
The inclusion in the Queen’s Speech last week of a Care Bill in this new Session of Parliament is nothing short of a landmark occasion. Those of us who have been concerned with the reform of our social care system for decades know that those desperately needed reforms, which are well summarised in the Bill, have repeatedly been kicked into the long grass or filed under “Too difficult to do”. Finally, however, we are making progress.
I have been disappointed by the response to the Bill from Labour Members, who know as well as I do how welcome the proposals are, and what a step forward they will represent for the quality of life of many thousands of people in this country. It was a courageous decision by the Government to introduce the Bill at this time, given that public finances are under enormous pressure as we try to clear up the mess of the financial legacy bequeathed to us by the Labour Government, because the reforms will require additional public finances.
In the last Session of Parliament, excellent work was done by the group of Members of both Houses in undertaking pre-legislative scrutiny of the draft Bill. That was a good example of how people can bring the experience they have gained outside Parliament into their work as legislators. I am grateful for their consideration of my contribution and the subsequent inclusion in their report of my recommendations. The recommendations resulted from work undertaken with a number of Members across the political parties who worked with the charity Macmillan, looking at what could be done to improve the quality of care of people who want to stay at home at the end of their lives. Ensuring people have a genuine choice over where they die is of particular importance to me.
Last year, I chaired a round table event in Parliament, organised by Macmillan Cancer Support, which brought together carers, health and social care professionals and policy makers to discuss how to enable more people to be cared for at home until they die, if that is what they choose. The expert attendees were clear that access to basic social care support can make the difference between somebody dying at home surrounded by their families or dying in an expensive hospital ward. All too often, however, patients and families cannot access the support because of a lack of integration of health and social care systems or because they cannot afford to pay for it.
I believe that removing the social care means test for people on the end-of-life care register would lift a significant barrier to the integration of care, allowing many more people to access the support they need and to exercise choice, which could also save the considerable costs of people being in hospital. The Government’s commitment, made in the care and support White Paper, to assess free social care at the end of life through the palliative care funding review pilots represents very good progress. However, with the Care Bill likely to become an Act before the pilots finish in 2014-15, it is also crucial that the Bill allows for the delivery of free social care at the end of life. This would enable the Government to implement the policy without delay, once the pilots report.
I understand from the responses I have received to written questions that the Minister is undertaking a review of the pilots this year. I very much hope that clauses will be added to the Bill to enable free social care for those at the end of life. Such a step forward would be welcomed by professionals and families alike. It would make such a difference to families at such a difficult time of their lives.
Another specific aspect of the Bill I would like the Minister to consider—together with the Under-Secretary of State for Work and Pensions, the hon. Member for Wirral West (Esther McVey), who has responsibility for disabilities—is social care for working-aged adults with disabilities. The debate about the future of our adult care system has very much focused on the elderly and their family and carers. I am as guilty as anyone else of focusing on the injustices in the current system for elderly people and the need for a fairer and better system, but the care system has another group of people who need support: adults who acquire a disability through an accident or an illness. They might not have been working long enough to have savings that they can spend on their care needs and they might have a degenerative condition that has prevented them from working full time. For them, reform of the current system is less to do with how they can protect their assets or how they can pay for care without selling their homes than with how they can get the help they so desperately need.
The definition of eligibility for care within the Bill is of greater importance than the means-tested threshold and the caps on personal expenditure. We must have a realistic threshold of eligibility, so that people can participate in society as a whole—in education, as volunteers or as employees.
As the Minister will be aware, some local authorities have, sadly, chosen not to spend the money provided by central Government on the adult social care budgets and have been increasing the eligibility criteria. The Dilnot commission highlighted this concerning trend, and I know that Ministers listened. I understand that the Department of Health is working on amendments to the fair access to care criteria currently used by local authorities. The amendments are reflected in the Bill, which includes new interim eligibility criteria. Concerns have been raised, however, that the interim criteria will not address the continuing shift of social care provision away from those with moderate needs. Research undertaken by the London School of Economics indicates that 105,000 people could lose eligibility if the Government move ahead as proposed.
Sarah Newton
The hon. Gentleman makes a very good point, which illustrates the findings of the Dilnot commission.
I urge the Minister to consider this further and to ensure that the final interim criteria agreed upon, which will be in the Bill, recognise the very real care needs of those who fall into the moderate care category within the current fair access to care system. We found from the report we received on Friday on the Government’s consideration of what improvements might be put into the Bill that they have agreed to look at the eligibility criteria and to fund the proposals under the June comprehensive spending review. All that is very welcome. I hope that, once the criteria and the funding to support it have been agreed, the money passed over to local authorities will be ring-fenced for a period, perhaps up to three years. The Government have done that for public health, and doing it in this instance would enable the estimated 105,000 people who have moderate care needs to receive the funding and to continue with their working and volunteering lives, playing their full part in society.
I am sure that the Minister of State has been listening closely to the organisations that represent people with disabilities. I am also sure he supports the excellent vision and work of the Minister with responsibility for disabilities that aims to enable people living with disabilities to play as full a part in society as possible. I very much hope that, as this Bill passes through the House and is further scrutinised and consulted on, we will address the concerns of these groups of people who all too often fail to have their voices heard.
The Government have listened hard to the needs of elderly people and have produced a good way forward. These straightforward and common-sense improvements will make a hugely positive contribution to the lives of people at the end of life and those of working age who are living with disabilities. Those people are often living out of sight; we must show them that they are not living out of our minds.
Chris Ruane (Vale of Clwyd) (Lab)
I wish to speak on four matters in today’s debate on the Queen’s Speech. The first—heart-related issues—has already been mentioned by my right hon. Friend the Member for Rother Valley (Mr Barron) and by the hon. Member for Mid Derbyshire (Pauline Latham), who is no longer in her place. I am the chairman of the all-party parliamentary group on heart disease, which was set up 12 years ago. I give credit to the Government for consulting on minimum pricing of alcohol and on plain packaging for cigarettes and tobacco. Both those consultations have been good, engaging MPs from all parties and, indeed, the wider community, but the Government have lost a golden opportunity to put these measures in this year’s Queen’s Speech.
Over the past 10 or 12 years, we have had a fantastic record on heart disease, with deaths going down by 46%. We have taken some big and bold decisions: for example, the Labour Government passed a measure to ban smoking in public places; we also introduced statins, which are largely responsible for the 46% drop in heart-related deaths. We must keep up the momentum, however, and minimum pricing of alcohol and plain packaging of cigarettes could have helped us to do so.
Each year, about 11,000 10 to 15-year-old children in Wales take up smoking. The industry wants to catch those smokers young and keep them smoking until they are 55, 65 or until they die, in order to keep up profits. Those young people have been deliberately targeted. The hon. Member for Mid Derbyshire mentioned the use of defibrillators and the teaching of resuscitation skills in schools. If the Government made progress on those, it would help to keep up our excellent momentum on tackling heart disease in the UK.
Many Members have touched on immigration and some have connected it with the health service. There will not be one of us in this Chamber whose life has not been touched by an immigrant worker in the NHS. My doctor for 25 years, Dr Rao—sadly, now passed away—came from the Indian subcontinent, while the man who delivered my first-born child was an Egyptian consultant, and I am really grateful to both of them. If all the immigrants working in the national health service left tomorrow, our national health service would collapse. I pay tribute, too, to the Filipino workers in the care sector—lovely, family-orientated people, who have great respect and great compassion for the elderly. Immigration is an issue throughout the country and we need to reflect concern about it in Parliament. What we do not need to do is add to it. We certainly do not need to whip it up, as I feel some Members have done today.
I praise the hon. Member for Mid Derbyshire for what she said about cancer treatments. I pay tribute to the work of my constituent Mike Peters, a friend of mine, who has had cancer twice in his life and currently has a chronic leukaemia condition. Mike is spearheading an international campaign to increase the number of donors of matching blood cells for leukaemia treatment. He has set up two organisations, the Love Hope Strength Foundation and Delete Blood Cancer UK. He is a rock star who is a lead singer in The Alarm and Big Country, and he tries to recruit people when he sings in countries around the world. He has personally recruited 35,000 donors, mainly in America, through his concerts, and 500 people’s lives have been saved as a result.
Mike is holding an event in Room R in Portcullis House on Tuesday 4 June. Anyone—any Member of Parliament!—aged between 17 and 55 will be welcome to become a donor. All it takes is a mouth swab. The DNA is then kept on file, so that anyone in this or any other country who needs stem cells will be able to gain access to them. Let me again pay tribute to the work that Mike Peters has done.
I now want to say something about how mindfulness can help with problems related to health and social care. Members may ask “What is mindfulness?” Mindfulness is an integrative mind-body-based approach which helps people to change the way they think and feel about their experiences, especially stressful experiences. It involves paying attention to our thoughts and feelings so that we become more aware of them, less enmeshed in them, and better able to manage them. It uses breath as an anchor to slow down the mind and body and to help us to live in the present moment, rather than being chased by our past or worried by our future. It is the perfect way to combat stress—and the impact of stress on heart problems, cancer and mental health conditions is massive.
Members may think that that sounds a bit airy-fairy, but the National Institute for Health and Clinical Excellence has backed mindfulness as a better way of treating repeat-episode depression than drug therapy. It puts the individual in control. It is as cheap as drug therapy in the short term, and cheaper in the long term. It has no known side-effects, and, if taught early enough, it is preventive. Let me give the House some statistics. A total of 32.3% of people aged between 15 and 25 suffer from one or more psychological conditions. Every Member in the Chamber will know someone with such a condition, perhaps even a family member. In 1991, 9 million prescriptions for anti-depressants were issued; in 2011, 46 million were issued. That is a 500% increase in 20 years.
Mrs Moon
As my hon. Friend says, one of the problems on which we need to focus is depression among young people. Young people oppose the idea of taking anti-depressants. Will my hon. Friend say something about the importance of mindfulness in enabling them to build up their self-awareness, their self-confidence and their ability throughout their lives to handle possible recurring depression?
Chris Ruane
I know that the incidence of suicides among young people is a particular issue in my hon. Friend’s constituency, and mindfulness has a role to play in that context.
Many Members have mentioned compassion today. Mindfulness can help to give compassion to the individual and also to the health care worker. If compassion is lacking, mindfulness can enhance it. It can be used within the health care system, and has been taken up by doctors who are then in a better position to relate to their patients. Earlier this year there was a mindfulness session in the House of Commons for Members of this House and the House of Lords, and another will begin on 4 June.
Mindfulness can help in a personal capacity, but it can also assist the development of policy in prisons—85% of prisoners have mental health conditions—in education, in the armed forces, in the police and fire services, and in any area where there is trauma. It can play a big role throughout society and in all departments. I urge the Department of Health to recognise that, to act on NICE’s 2004 recommendations, and to ensure that the use of mindfulness for the treatment of repeat-episode depression is fully implemented. I also urge the Department to consider carefully its possible use in other parts of the national health service.
David Tredinnick (Bosworth) (Con)
It is a pleasure to follow the hon. Member for Vale of Clwyd (Chris Ruane). I entirely agree with what he said about mindfulness and the need for NICE to ensure that it is available for the treatment of stress in particular. That is all the more important now that we have a Government who have put patient choice at the heart of the health service, a fact that will become more and more evident as health and wellbeing boards and Healthwatch start to make an impression through the Health and Social Care Act 2012.
Like the hon. Gentleman, I intend to focus exclusively on health issues. I shall concentrate not on what is in the Queen’s Speech but on what is missing from it, particularly the expected statutory regulation of herbal therapies. If we are to ensure that the range of treatments that people demand, including mindfulness, are safely regulated in the health service, we must tackle the issue of herbal medicine, which is a crucial tool in our cupboard.
At this point, I must declare an interest. I was involved in the legislation applying to the last two groups that were made subject to statutory regulation, the Osteopaths Act 1993 and the Chiropractors Act 1994, as a member of the Standing Committees that considered those Bills. Let me emphasise to Ministers how important it is to take that route. It makes practitioners focus on a disciplined structure and operate a robust complaints procedure, it makes it easier for doctors to refer, and it makes treatments more widely available.
When it comes to herbs, we need an interface with European legislation. We must deal with regulation 3(6) of the Human Medicines Regulations 2012, which grants “a person”, not a therapist, the right to practise. What worries me is that Ministers may regulate not therapists but specific herbs. There are thousands of them out there, and that cannot be satisfactory. We must give therapists the right to prescribe. In the case of traditional Chinese medicine, for example, most practitioners will prescribe three herbs to work in conjunction. As I have said in the House before, it works like the Whips Office: there is a chief, a deputy and a messenger. The messenger takes the chief and the deputy to cure the problem. My hon. Friend the Member for Rochford and Southend East (James Duddridge) laughs; of course, that does not always apply to Whips.
My greatest worry is this: I believe that the statutory regulation has been blocked by vested interests in the orthodox medical community who have said to the Secretary of State “We do not want this, because it will enhance the status of herbal therapists.” If that is true, it is selfish and stupid.
A sub-set of the problems lies in the fact that there are two types of herbal therapies. There is the phyto therapy provided by Hydes Herbal Clinic in Leicester, which I believe is in the constituency of the hon. Member for Leicester West (Liz Kendall), and there is traditional Chinese medicine, which involves the use of different types of herb. We need separate registers to make sure that these therapies are prescribed safely.
It is interesting to see the headlines that are appearing now. The hon. Member for Vale of Clwyd talked about doctors using mindfulness. One headline states, “GPs prefer herbal remedies to Prozac, says survey”, and one such cited remedy is St John’s wort, which in fact has side-effects if used with other, conventional, medicines. One reason why I want statutory legislation is to make sure that people who are taking herbal medicines can go to their doctors and say, “Yes, I am taking it, and doing so under the prescription of a statutorily regulated practitioner.”
I should say in passing that the Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), who has been dealing with this issue, has graciously offered me a meeting to discuss it further, and I look forward to taking him up on that.
Provision was made in the Health and Social Care Act 2012 for the Professional Standards Authority, which should regulate all complementary therapies other than those provided by individual practitioners, who are regulated under individual legislation. The Society of Homeopaths, which I have supported for years, should be regulated too. Here, we are completely out of line not just with Europe but with Asia and America. We have not used enough of such resources. It is patently absurd to say it is all placebo, given that in Europe 40,000 physicians practise homeopathy, in Asia, 250,000 physicians practise it, and it is practised in Brazil, Nigeria and America. It is not a placebo, because people are using it. One can fool some of the people all of the time and vice versa, but not all the people all of the time.
The other reason why those who oppose such therapies make some headway is they refer only to homeopaphy randomised control trials. Sixty-four of 156 have been positive, and only 11 negative. We should also consider meta-analyses and patient-reported outcomes. Where double-blind placebo-controlled trials are conducted, they are ignored.
Just a few centuries ago, scientists were saying that the sun went round the earth; now, we know that the earth goes round the sun. Science changes. Here, we should bear in mind what is known as the Semmelweis reflex. When a doctor in Germany discovered that child mortality rates could be reduced if doctors washed their hands, conventional practitioners pooh-poohed the idea, but eventually it became the norm. We have to be progressive, and so it is with some homeopathic remedies, which are so dilute that they cannot be seen through conventional analysis. However, the fact is that those very dilute substances work effectively. The future lies in a wider range of health provision across the health service.
I want to finish with an e-mail I received today:
“Dear David,
From browsing the web I hear you are cynically referred to as the honourable member for Holland and Barrett.”
Yes, a Labour Minister many years ago called me that. The e-mail continues:
“If those who jeer had survived a life debilitating illness like Parkinson’s for twenty years, I would have more time for them.
I have done this while trying to escape the unsolicited attentions of a family populated with several consultants and even more GPs… Alternative therapies like homeopathy, acupuncture, herbs and now helminths are the reason I am alive today.”
Alison Seabeck (Plymouth, Moor View) (Lab)
It is a pleasure to follow my hon. Friend the Member for Vale of Clwyd (Chris Ruane) and the hon. Member for Bosworth (David Tredinnick), who care passionately about health care in its widest and broadest sense.
This Gracious Speech is unprecedented. I cannot recall in all my years of working in this place, dating back to 1977, another instance of a Prime Minister saying it is okay for their party to vote against the Government’s programme. I cannot see the late Baroness Thatcher condoning such a move. This coalition Government are in meltdown, and the public must be wondering whether any of the proposals in the Queen’s Speech have the wholehearted support of their Members.
That said, there are measures in the health Bill that could and should be shaped and improved on a cross-party basis. It is therefore important that adequate time be allotted for the various debates and the Committee stage. The proposed programme is hardly onerous, so the guillotining of Bills should not be required—unless the Government decide that they dare not encourage full debate, and chicken out. We shall see.
Before moving on to the health-related elements of the Gracious Speech, I would like to mention the draft consumer rights Bill because it revisits the private Member’s Bill introduced by my father—Michael Ward, who was a Member of Parliament—which became the Unfair Contract Terms Act 1977. He was supported by the late David Tench in enacting what was groundbreaking consumer legislation. Lord Denning, the then Master of the Rolls, described it as
“the most important change in civil law”.
My father would, if he were alive, be very keen to ensure that the streamlining and simplification process in bringing together so much consumer legislation does not water down consumer rights.
There are a number of health-related proposals in the Queen’s Speech. In Plymouth—a mesothelioma hot spot because of the nature of its industrial base—people will welcome the further progress that has been made on speeding up the process through which insurance companies accept liability and pay compensation. However, for too many of my constituents progress has been tragically slow: they have not survived this awful disease long enough to benefit from the legislation. We have a moral duty to do everything we can to support the victims, and we need to ensure that the Bill, which has had a very slow gestation—it was discussed under the last Labour Government—does what it says on the tin and guarantees faster pay-outs. The failure to address other asbestos-related diseases is also giving rise to concern.
Those who are more fortunate are now, with support, living into grand old age, and we have to resolve the issue, which has dogged successive Governments, of providing care for our older citizens, as well as younger people with illness or disability. The care and support Bill should be welcomed as a step in the right direction, but I fear it will not be enough and, rather than having a full-blown national care service, we will end up with a piecemeal one. The level of the cap has been set too high—higher than Andrew Dilnot recommended—and without investment in local services the Bill will have serious consequences, as clearly set out in the opening speech by my right hon. Friend the Member for Leigh (Andy Burnham).
To deliver much of what will need to be delivered, local authorities will therefore be required to step up to the plate—the joined-up care that the Secretary of State talked about. Yet we know that many are having to dismantle the architecture upon which good care and support is offered—as we are seeing in Torbay, an exemplar—because of the deep cuts being made to their budgets. Can the Government please be clear about who will be running these care and support networks? If it is the private sector, how will they ensure that there is not a postcode lottery?
Oddly, earlier the Secretary of State was behaving like one of those nodding dogs we see in the backs of cars when it was pointed out that hospitals are under pressure and staffing levels are not all they should be. However, he has provided no real answers in this Queen’s Speech.
At long last, after almost four years, we have a Bill paving the way for a potentially dramatic change to the way defence procurement is carried out. There is consensus across the political divide that successive Administrations did not sufficiently reform defence procurement. Equipment programmes were overheated in respect of funding, and the Ministry of Defence was underpowered in the skills required to deliver increasingly complex programmes. There are too many questions that need to be asked for the time available, and today is not about defence, but we will need to come back to those questions. The themes, however, are the accountability of the proposed GoCo —Government-owned, contractor-operated organisation —and where the risk lies. For example, does it lie with the taxpayer or with the private company? Warning bells are already ringing around Westminster about the management of risk. We know from successive Public Accounts Committee and National Audit Office reports that the MOD struggles when it comes to assessing risk. We need to know whether the Ministry of Defence, like the Department of Health, is producing legislation that removes the Secretary of State’s power to intervene and take responsibility.
Finally, I come to the Bills that were not mentioned. My right hon. Friend the Leader of the Opposition emphasised the missing legislation in his response to the Loyal Address. The cold hand of the Prime Minister’s henchman, whose links to the tobacco industry as a lobbyist are well documented and who has accepted major donations to his campaign in Australia from British American Tobacco, is writ large on this Gracious Speech.
Mr John Leech (Manchester, Withington) (LD)
I agree that not having legislation to introduce standardised packaging for tobacco products is the wrong decision, but does the hon. Lady agree that it is appalling how the unions, too, have tried to stop this legislation?
Alison Seabeck
People work in those industries, and, understandably, the unions representing them have to consider the membership’s point of view. Among the unions as a whole, there is a broad range of views, very much reflecting those in this place today.
Returning to my point, perhaps that is why No. 10 has U-turned, from a position where it was wrong for children to be attracted to smoking by glitzy designs on packets and there were statements that children should be protected from the start, to the obverse position, where we are not being allowed to have legislation that would have a beneficial impact on the future health of our population and on the NHS budget. As my right hon. Friend the Member for Rother Valley (Mr Barron) said, we need to know who is pulling the strings in setting Government policy. The Government have bottled it; they are in thrall to their right wing. Young people in Plymouth, particular our Youth Parliament members and those in our youth cabinet, who wanted very much to see this change brought forward, will feel that they have been sold down the river. Many young people are asking what is in the Queen’s Speech for them; there is nothing to protect their future health and nothing to help them into work.
If the Government were serious about improving the health of the nation, we would have given these measures a fair wind. They would have had broad support from the Opposition, as would investment in other areas, such as housing that is affordable to rent, because good housing equates to good physical and mental health. Nothing has been said on those issues. The Queen’s Speech is a huge missed opportunity, and it is simply not good enough.
Mr Gary Streeter (South West Devon) (Con)
It is a real joy to follow the hon. Member for Plymouth, Moor View (Alison Seabeck), my next-door neighbour—you are being extremely skilful in your selection of speakers today, Mr Deputy Speaker. I very much enjoyed her contribution; she spoke in her usual trenchant and passionate style. I also enjoyed hearing about the work that her late father was involved in, and I can say with some confidence that he would be extremely proud of her and all that she has done in her time as a Member of Parliament.
I liked the Queen’s Speech, but it was a little long for my liking. I was looking forward to the Queen sitting on the throne and saying, “My Government have decided to introduce no new laws this year, but to concentrate on implementing and overseeing well the policies that we have already passed and the laws that we have already put in place.” As we all know, coming to the House and taking legislation through involves a huge time commitment for Ministers, and there is a huge case to be made for Ministers to focus on implementing well the things that we have already decided. We have been radical in the past three years in this Parliament, so let us make sure that the policies now work in practice on the ground—let us set our Ministers free to do that. Interestingly, the key areas our constituents are most concerned about—getting the deficit down, getting the economy moving and cracking down on immigration—do not require any legislation at all. They simply require us to do well the things we have already decided.
I welcome the Queen’s Speech and, despite having said what I just said, the increased attention on immigration, which is what our constituents want. The reaction of my constituents to some of the tough measures we have introduced so far on immigration and on welfare changes is, “It’s about time. We have been waiting for this for many years.” So I support the broad direction of travel of the Government, and I have full confidence in the Health Secretary.
I want to make two points in a brief contribution about health issues, the first of which is about the challenge of urgent care. Our parliamentary system has many strengths, but one weakness is that every Government Member is inclined to say that everything we are doing is wonderful, while the Opposition are inclined to say that everything we are doing is rubbish. We all know that the truth lies somewhere in between. I support and pay tribute to the fact that we continue to pump fresh money into the health system year after year. The shadow Health Secretary is convinced that we are not meeting our commitment to increase health spending above inflation every year—I think we are, but of course there is a debate to be had. I do know that there are pressure points in the health system that need to be tackled, and urgent care is one of them.
Andy Burnham
The hon. Gentleman’s association with the detail seemed to be loose there; Andrew Dilnot wrote to the Government to say that health spending was lower in real terms in 2010-11 than it was when Labour left government. It is important to point out that the promise the hon. Gentleman stood on was for real-terms increases in every year of this Parliament and that that has not been honoured.
Mr Streeter
That is Andrew Dilnot’s opinion, but it is not mine—that is the point I am seeking to make. [Interruption.] The right hon. Gentleman’s speech was riddled with references to spending—more spending on health and on local councils—but is he not aware that this year the deficit in this country will still be, even after three years of austerity, £110 billion? If he comes to the Dispatch Box to make speeches about extra spending for health and local councils, he is obliged to tell us where that money will come from. At the moment, I can see no signs of it whatever.
Mr Streeter
I will not take any further interventions, but let us not hear any further speeches calling for extra spending unless we know where the money is coming from.
As I was saying, before I was so rudely interrupted, there are pressure points in the health system, and urgent care is one of them. This is about not only accident and emergency departments, but GP and out-of-hours services, community nursing, social care, ambulance services and hospital beds—there is pressure on all those points.
The hon. Member for Plymouth, Moor View and I are fortunate to go to Derriford hospital in Plymouth for briefings. I have been going slightly longer than she has—21 years—and I can tell the House that in good times and in bad times Derriford hospital is under pressure. It has a running capacity of about 95%, which means that when there are spikes, as there have been this winter, it can be running at 103% capacity, which puts the hard-working staff under enormous pressure. Even when the Labour Government were spending money as though it were going out of fashion, I have never gone to Derriford hospital and had the staff tell me, “It’s fine. There are no pressure points. Everything is working in our health service. It’s all working well and waiting lists are coming down.” That has not happened once in 21 years.
Stephen Phillips (Sleaford and North Hykeham) (Con)
Does my hon. Friend agree that perhaps one problem with the Queen’s Speech, and one of the issues with which neither Ministers nor shadow Ministers tend to grapple, is that there is a real problem in this country with demand? Unless and until we grapple with that, the national health service will always be under pressure.
Mr Streeter
I completely agree with my hon. and learned Friend, and I might come on to deal with that point in a moment.
The point I wanted to raise with Ministers is that the funding formula for emergency work needs to be reviewed. As I understand the system, the formula is based on the 2008-09 baseline, and any extra patients who come into an acute hospital over and above that baseline are paid at 30% of the tariff. It costs hospitals 100% to meet the needs of those people coming in, yet they are paid at 30%; the extra 70% is supposed to be spent by other health care agencies in providing alternative centres of treatment, which are intended to divert people away from acute hospitals. I am pretty well plugged into what is going on in my constituency, and I have not seen anything since 2008 that looks vaguely capable of diverting pressure away from Derriford hospital. The system of allocating 30% to the hospital and 70% elsewhere is simply not working. I ask our Ministers to look urgently at that formula and to find out why, if it is not working, we are still using it and to address that. I am not calling for extra money; I am calling for money to be diverted to the acute hospitals, because they are where the pressure points are. In my constituency, there have been no realistic options for treatment other than to go to Derriford hospital. So, such hospitals should be receiving not 30% but 100% of the tariff.
My hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) is absolutely right about demand growing exponentially. In 1979, if a man reached the age of 65, they could expect to live until they were 77. If a man reaches the age of 65 now, they can expect to live until they are 88, and of course that age is rising year on year, so the demand is going up.
One thing that we are noticing is that although the number of people admitted to the emergency department at Derriford hospital in the last 12 months has been stable, there is much higher acuteness—in other words, people are much sicker and therefore it requires a lot more effort to treat them. Please, nice Ministers on the Front Bench, may we have a look at that formula for the funding for people accessing acute hospitals on an emergency basis?
My final point, in the one minute of my time that remains, is that 20 years ago or so I made a speech in this House saying that the health service had lots of challenges, issues and problems, but that one of the things we did not need to touch was primary care as it was working fine. I cannot make that speech today. I will not hammer the Opposition again about the GP contract, but in the past few years constituents have been complaining to me in a way that they never did in the previous 15 years to say that accessing their GP is becoming extremely difficult. For someone—whether they are a mum with a young baby, or a senior citizen—to get a surgery appointment when they want it has become a serious issue in the past few years. Addressing that issue does not necessarily require legislation, but may I ask Ministers whether we can please put in place a system whereby GPs give the seven o’clock in the morning to seven o’clock at night, seven days a week service that this country so desperately deserves?
Paul Blomfield (Sheffield Central) (Lab)
It is a delight to follow the hon. Member for South West Devon (Mr Streeter). I might not have agreed with everything he said, but he was right to point out that away from this place people’s concern is about economic growth. Sadly, the Queen’s Speech does not adequately address that concern.
Some of the less thoughtful contributions have demonstrated just how deeply divided this Government are—not between parties, but within the main party of government. The Prime Minister is unable to command the support of his own party. When he makes a decision, it is often the wrong one, putting party squabbles before national interest.
Just for one moment, let us imagine the scene in Washington today. The Prime Minister is there to seek the ear of the President on the EU-US trade deal, which is hugely important to this country and worth £10 billion a year. As the President received his pre-meeting briefing, I wonder what his advisers would have been saying: “Don’t waste time on this Prime Minister, Mr President. He has only two years left. He can’t even command the support of his own party. His Cabinet members are speaking out against him as they jostle for succession, and he has even told members of his own Government that they can vote against him on the Government’s programme. We will have to talk to the people who count in Government—ignore this one.” As Barack Obama raises his eyebrows in incredulity, British influence disappears out of the window because of the weakness of this Prime Minister.
That situation is also demonstrated in the Queen’s Speech, and as much by what is not included in it as by what is. When the Prime Minister makes a decision, too often he buckles under pressure from the wrong people, backing powerful vested interests against those of ordinary people. As a number of my colleagues and a number of Government Members have done, I want to highlight the absence of the promised legislation for standardised cigarette packaging, which sacrifices the health of our children in favour of the profits of the big tobacco companies.
Back in February, the Prime Minister talked clearly about introducing legislation for standardised packaging. The papers reported that
“Ministers are convinced that the ban is necessary to take the next step to reduce smoking in the UK.”
Those reports were confirmed by a senior Whitehall source, who said:
“We are going to follow what they have done in Australia.”
The source correctly went on to say:
“The evidence suggests it is going to deter young smokers. There is going to be legislation”.
That was what we were all expecting, although perhaps some of us were surprised that the Government had actually got it right on this issue and were putting people first—that was, until just a few days ago. I do not know whether they were under the influence of Lynton Crosby—bear it in mind that he earned considerable sums of money from the tobacco lobby, and that he failed to win the argument against standardised packaging in Australia before bringing his toxic approach to politics here—or perhaps they were just running frightened from the UK Independence party’s opposition to public health measures against smoking.
Paul Blomfield
My understanding is that the majority of unions would support standardised packaging. I deeply regret the fact that the tobacco giants use some individual trade unionists as de facto lobbyists.
The Government surrendered to the tobacco giants. What message does that send to the country? This Government are prepared to see people die and, as the hon. Member for Mid Derbyshire (Pauline Latham) said, die horribly, and in their hundreds of thousands, to prop up the profits of the tobacco industry. There are no industries like the tobacco industry—the more cigarettes it sells, the more money it makes and the more people die.
Since science confirmed the link between smoking and lung cancer, the tobacco industry has opposed every single measure to reduce smoking. We all know that smoking is the largest preventable cause of cancer; it is responsible for four out of every 10 cancer deaths. According to Cancer Research UK, tobacco is responsible for 100,000 deaths in the UK every year. We have made huge strides with the measures that have already been taken against smoking, but as we have encouraged people to stop smoking, the tobacco giants have been building their market among young people. A report from Cancer Research UK in March showed that the number of children smoking had risen by 50,000 in just one year.
Frank Dobson
Let me demonstrate the absolutely vile morality—if I can combine those two words—of the tobacco industry. When it was discovered that nicotine was addictive, the industry increased the proportion of nicotine in cigarettes to make them more addictive. People like that should not be listened to; they should be shown the door.
Paul Blomfield
I agree with my right hon. Friend: the tobacco industry should not be listened to. However, it finds no end of ways to seek to defeat the arguments of public health lobbies against smoking, and indeed to encourage the wider use of cigarettes.
Shockingly, in the last year for which figures are available about 207,000 children aged between 11 and 15 started smoking. The vile way—to use my right hon. Friend’s word—in which the tobacco giants operate means that that is a direct result of the industry’s marketing strategies, which are as sophisticated as they are cynical. Flavoured cigarettes have been introduced, and not only menthol, but chocolate and fruit flavours. Some cigarettes are targeted at young women. Even the Daily Mail pointed out, in condemning that move, that those cigarettes seek to
“make smoking look elegant, sexy and classy”.
Alternatively, as British American Tobacco’s Hinesh Patel said, almost acknowledging the company’s strategy:
“We’ve taken a creative approach to respond to the female under-30 demand for a smaller, slimmer, less masculine cigarette…a contemporary product in a new accessible size.”
In that context, packaging is crucial. A Saatchi & Saatchi marketeer said this of British American Tobacco’s Vogue package:
“The cigarettes look like something found behind a glitzy counter at Selfridges....trying to capitalise on a woman’s desire to feel beautiful to sell their cigarettes.”
The Government public health Minister, the hon. Member for Broxtowe (Anna Soubry), is not present, but she has made her views on this subject clear. In April, she said before a House of Lords Select Committee:
“We know that the package itself plays an important part in the process of young people and their decision to buy a packet and to smoke cigarettes.”
All the experts back standardised packaging, and until a few days ago we thought the Government did, too. The public back that as well, with 63% in favour and only 16% against, according to recent polling. This Government are getting it wrong again. They are showing again that they are out of touch with people and they are on the wrong side of the argument, and I urge them to think again.
Mr David Ward (Bradford East) (LD)
I want to congratulate the hon. Member for Truro and Falmouth (Sarah Newton) on her contribution, and I hope to add to her comments.
A quiet revolution is taking place. Slowly—although probably not very slowly—but surely, the life chances of thousands of vulnerable people are being changed. We in Bradford did a huge amount of survey work following the publication of the health and social care White Paper, the Bill and the progress report on funding reform, and we received a huge response with more than 500 direct responses from within the constituency. I want to pay tribute to Bradford council, which was very much involved, as well as the Bradford and District Age UK, the Bradford Alzheimer’s Society, Ideal Care Homes, Bradford disabled people’s forum, the Consortia of Ethnic Minority Organisations and also the area manager of Specialist Autism Services, who submitted a response last week.
The report was published after a Westminster Hall debate on this subject, and many of the Government’s proposals were generally welcomed. Some areas caused concern, however, including on hospital discharges, specialist housing, and waiting times for adaptations. Much of the concern is less about legislation and more about local delivery—about what is actually in place in the locality.
The backdrop to everything we are doing in all policy areas is the austerity programme and the deficit, and many local authorities are facing severe funding cuts as a consequence of the measures being taken. Their effects are being exacerbated by the increasing demand for social care. In my area, there will be an additional 5,000 over-65s in the next 10 years and a 38% increase in the number of over-85s. There will also be a large increase in those with learning disabilities. This will add an extra £10 million to local costs. A lot of complex cases are arising, and all of this must be seen against the backdrop of the cuts and changes.
The Government say that local authorities must decide on priorities. That is true, but it is also a bit dishonest. The national health service budget, for which the Government are seen as responsible, is protected, but the social care budget, which is predominantly picked up by local authorities, is under attack and being cut. If many of the preventive measures we are seeking to introduce enable people to go home sooner and have a better experience on their return from hospital, that will reduce the pressures on the NHS budget but increase the costs facing local authorities, as they will have to pick up the costs arising from those successful preventive measures. Things will be difficult for many local authorities, therefore.
The report we in Bradford produced following the publication of the Bill focused on residential care, and since then we have done a lot more work on another crucial, and topical, area: Bradford council has, through a consultation process, been addressing the fair access to care services—FACS—criteria, and I will focus on the criteria for the provision of social care. I mentioned discharge from hospital and adaptations, but the level at which the FACS criteria are set is crucial in determining the services many people will receive in their homes and the life chances and experience they will have.
The “critical” criteria include when “vital social support systems” and
“vital involvement in work, education or learning cannot or will not be sustained”.
A person’s care and support needs are deemed as “substantial” when
“many aspects of work, education or learning cannot or will not be sustained.”
We understand all that, but the bit I am not comfortable with is the description of anything lower than that as being “moderate.” That is a terminological inexactitude or misnomer. Listed under “moderate” are
“an inability to carry out several personal care or domestic routines and/or...several aspects of work, education or learning”.
I do not regard that as being “moderate.” The ability to do such things is often essential if people are to live a satisfactory life in their own homes and as part of their local community.
In plain and simple terms, and without trying to be funny, if someone cannot get their knickers or underpants on in the morning, they will not go to the day centre, however good it is, and if someone does not get the help to get the right tablets in the morning, they will not be going to the day centre in a minibus; they will go to hospital in an ambulance. We must not call this level of need “moderate.” For many people, it is essential if they are to have a full life in their community and in their home.
We must look less at what can be funded and more at what levels of need we need to fund. My right hon. Friend the Member for Sutton and Cheam (Paul Burstow) pointed out that much of the proposed legislation is about intervention and prevention, on the basis that prevention is better than cure, but the danger is that today’s moderate needs will become tomorrow’s substantial or critical needs if they are not met at the correct time. This is not about cutting our cloth or making do in times of austerity. It is about, foolishly, making short-term savings to the detriment of future taxpayers who will have to bear the costs of what should, and could, be regarded as avoidable needs.
Roberta Blackman-Woods (City of Durham) (Lab)
My hon. Friend the Member for Sheffield Central (Paul Blomfield) made a powerful case against the influence of the tobacco companies and their lobbying of this Government, and the utter ineffectiveness of the Prime Minister in standing up to them. I am also pleased to follow the hon. Member for Bradford East (Mr Ward), who made an impassioned plea on behalf of his constituents and others. He demonstrated the need for proper local authority funding to support care services, and I will address that later in my speech.
I think it is true to say that all independent commentators are noting that the Gracious Speech was very thin and did not rise to the many challenges facing this country, particularly the need for economic growth. I was therefore concerned to hear speech after speech in which Conservative Members talked only about Europe in a very obsessive way, without any recognition of the fact that constituencies such as mine that are desperately in need of economic growth rely on our relationship with Europe. Our region exports the most from this country, and a huge proportion of our exports are to European countries. We need those exports to grow, not to be damaged by the rhetoric on Europe that we hear day after day from the Government and Conservative Members.
I was also concerned when I listened to the Secretary of State for Health and heard how complacent he is about the state of the NHS. He showed no recognition at all of the anxiety of many of my constituents about what sort of health service we are going to end up with in a couple of months’ time and whether it will be able to meet their most basic needs. He showed no awareness at all of the challenges facing A and E departments right across the country, including my own in Durham. I am not criticising the staff, who struggle against the odds to provide the best care. This is happening because the Government are not looking at how to use the resources effectively and how to channel them towards under pressure A and E departments.
It would be extraordinary if we did not have a Bill on care in this Queen’s Speech given the clamour for it from carers, carers’ organisations, other agencies, cross-party commissions, and cross-party groups, and some of the work that Labour did when in government. The question remains, however: is the Bill up to the job of dealing with the problems facing our care system, which need to be addressed urgently because, as we all know, it is in danger of falling into crisis? The House of Commons Library has produced research showing that 10 million people in the UK are over 65 and that by 2030 the number is projected to rise to 15.5 million. Many of these additional older people will have care needs, putting increasing pressure on our care system. At the same time, more funds are being stripped from social care. The £500 million funding gap in our social care provision is still growing and, as Age UK has made clear, this is having a hugely detrimental impact on the care received by our elderly people. Age UK states that
“the widening funding gap has led to a reduction in service provision, increasing charges levied by councils for their services and less older people receiving the support they need.”
It further says:
“Every older person using local authority care services is now being charged £150 per year more in real terms in 2010-11 than in 2009-10, and £360 more than 2008-09”.
The situation is expected to get worse still. Due to the massive cuts faced by local government, by 2013-14 local authorities will have reduced their expenditure on adult social care by £2.7 billion—a massive 18% reduction when demand is increasing all the time. Clearly, this is not sustainable.
The Bill will do nothing to close the growing funding gap or to help the thousands of people who are already suffering with spiralling living costs and increases to home care costs. These people find themselves passed between care providers, often without any continuity of service. We will all have heard about such experiences in our constituency surgeries. Many people are ending up in hospital unnecessarily because they are not getting the care they need at home. Similarly, the Government’s earlier decision to ignore Dilnot and the experts who recommended a maximum cap of £35,000 and set it at £72,000 plus accommodation costs will not help many of my constituents, particularly those on lower or middle incomes.
Where the Bill might make some meaningful progress is with regard to improved rights and support for carers, but, as several hon. Members have said, there are huge gaps, particularly in identification of and support for young carers. That will need to be addressed as the Bill makes its way through the House. More needs to be done to support the various organisations that help carers. I work with a number of voluntary sector bodies in my local communities, and they are very worried that they will go out of business because they are not able to get enough resources to keep going.
Carers UK has set out some tests of this Bill. It says that it needs to be underpinned by appropriate funding, that it must promote the well-being and dignity of all our elderly residents, that it must ensure that independent advice is available to people and that there are appropriate advocacy services, that it should make sure that the criteria for people to get support are clear and transparent —it is no good just having assessments; they have to produce something in the form of appropriate levels of care—and that it must guarantee continuity of service and portability in whatever care support is given. I hope that as the Bill goes through the House it will be tested on those criteria.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
I am pleased to follow the hon. Member for City of Durham (Roberta Blackman-Woods), who picked up the theme of the hon. Member for Bradford East (Mr Ward) in talking about social care, which I too should like to remark on.
Unlike others, I will not be tempted into the subjects of tobacco, Europe or gay marriage but will stick fundamentally to the title of this debate on health and social care. I have a few specific points to make about the impact on my constituency. In general, though, I am proud to be part of a Government who, despite the need to eliminate the huge budget deficit left to us, have protected spending on the NHS. That has been necessary, in large part, because of the demographic changes that are happening in the UK with a rapidly ageing population. We need to do more than just target health spending on the older population; we need to change the way we think about providing care for the elderly and what this means for our society. I think that that is what other hon. Members are working towards as regards the cross-over between social care and health care.
I warmly welcome the inclusion of the Care Bill in the Queen’s Speech and the Secretary of State’s comments about personal health care and social care plans for the elderly. We can all make criticisms in saying that more should have been done, but the fact is that this Government have actually done it. The previous Government kept promising to do something about the tragedy of people having to sell their homes to pay for care; this Government have set about doing it by introducing a Bill that will end that tragedy by introducing a cap on care costs. That is remarkable given the background of the deficit we face. The implications of that will be borne out when the electorate understand that finally a Government have committed to go this far.
I firmly believe that this is the right way forward. It has been clear for some time that we needed to create a long-term solution to allow people to plan with confidence for their future. Now other generations, too, can plan how they want to look after themselves in old age because they know that the cap is there and that there will be a higher means-testing threshold allowing them to put some money aside to address these issues. We have already heard in this debate arguments about the threshold, the cap, and the way forward. However, I hope that Labour Members will recognise that, as the right hon. Member for Leigh (Andy Burnham) and the hon. Member for Worsley and Eccles South (Barbara Keeley) indicated, we need to find a bipartisan way to deal with this fundamental demographic issue facing the population of this country and try to shift it out of the political arena.
Having talked about social care, I now want to address NHS funding more broadly. As I have said, I am proud that NHS spending has risen in real terms over the life of this Parliament, but the historic formula used to distribute NHS money around the country needs to be reassessed. Although it is correct to factor in depravation when deciding where funds are allocated, a bigger weighting needs to be given to the age of the local population. A recent Age UK briefing note stated that at any one time about 65% of hospital patients will be over the age of 65, while, according to national statistics, areas with the highest depravation are also likely to be those with the youngest population. At present, therefore, those parts of the country with the highest numbers of older people have to deliver highly specialised services and care without a funding formula to assist them in their work. Moreover, as a Member representing a semi-rural part of the country, I see at first hand the effect that geography also has on the delivery of services and the extra costs involved in delivering quality health care over a wide area.
Lancaster is part of the Morecambe Bay NHS Foundation Trust. It is a pleasant and wonderful geographical area, but it is enormous. It has three hospitals—in Lancaster, Barrow and Kendal. The distance between the hospital in Barrow, which offers some specialist services, and that in Lancaster, which offers others, is 50 miles by car, but the hills and dales mean that it sometimes takes one and a half to two hours to travel between the two. Nothing in the national formula acknowledges the problems faced by the trust. Specialist services need to be retained in as many of those hospitals as possible if journey times are to be kept to acceptable levels, which means that they will require proper funding to allow them to operate. I look forward to working with my hon. Friends the Members for Suffolk Coastal (Dr Coffey) and for Beverley and Holderness (Mr Stuart), as well as others, to try to tackle this unfair disparity with regard to some geographical areas.
I want to pinpoint how the problem affects us locally. The Royal Lancaster Infirmary has a vascular service unit and, despite the excellent clinical outcomes it has delivered for years, it has been suggested that it should close. That would leave a service gap between Carlisle in the north and Preston in the south of nearly 90 miles. It would leave patients from the more rural parts of my constituency, especially those from Barrow or south Cumbria, with lengthy journeys if they needed specialist treatment. Some areas are well outside the 90-minute transport target time, which is already an extension of the national target of 60 minutes.
That delay in journey time is a genuine issue for consideration when establishing where specialist services should be located, as has already been proven by the decision to retain a vascular service in Carlisle, where an exception was made to most of the scoring criteria because of the local geography and the time it would take to transport patients elsewhere. If exceptions are rightly being made in one part of the north-west, they should apply to other areas where substantial delay is likely to occur. As I have already said, under the current plans there is a huge geographical gap in service provision between Carlisle and Preston.
The closure proposal has been referred to the Secretary of State for a final decision and I sincerely hope that he and his Ministers will decide in favour of retaining the specialist provision at the RLI. That, however, is just one example. A more wide-ranging review is being undertaken of service provision across north Lancashire and there are concerns that our local A and E unit may be under threat as a result of geography not being taken into account.
The funding formula needs to change to take greater account of those parts of the country with an elderly population. It also needs better to reflect the difficulties of providing services in large geographical, sparsely populated areas. Without that and the accompanying reallocation of resources, hospitals in rural and semi-rural areas will struggle even more to provide the necessary services to their residents. I urge the Secretary of State to look into this as a matter of urgency.
Ian Mearns (Gateshead) (Lab)
I am pleased to follow my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) and in particular my hon. Friend the Member for Sheffield Central (Paul Blomfield), who made a very strong speech about the Government bottling the proposal for plain packaging for cigarettes.
The response to the Queen’s Speech from my constituency of Gateshead, the north-east and the whole country is: what a missed opportunity. Research by Sheffield Hallam university highlighted recently in The Times illuminated the impact of welfare reforms on local areas across the whole of Britain. The impact varies from place to place: the worst affected areas face financial losses that are twice the national average and four times those in the least affected areas, and—surprise, surprise—it is Britain’s regions and older industrial areas that are hit the hardest, whereas much of the south and south-east of England outside London escapes comparatively lightly. As a general rule, the more deprived the local authority, the greater the financial hit. Professor Steve Fothergill, who undertook the study, said that
“the Coalition government is presiding over national welfare reforms that will impact principally on individuals and communities outside its own political heartlands.”
So that is what they mean by, “We’re all in this together.”
What are the Government’s priorities? A local audit Bill, a water Bill, a deregulation Bill and, in terms of health, a chronic outbreak of Europhobia. Those are hardly the country’s priorities. Meanwhile the country and its people in regions such as mine continue to suffer.
New research in a book published this month, “The Body Economic: Why Austerity Kills” by the respected political economist David Stuckler and the physician and epidemiologist Sanjay Basu, shows conclusively that austerity policies are
“seriously bad for our health”.
They argue that in Greece, HIV infections have risen by more than 200% since 2011, as prevention budgets have been cut and intravenous drug use has grown amid 50% youth unemployment. Greece has also experienced its first malaria outbreak in decades, after budget cuts to mosquito spraying. David Stuckler has said:
“Austerity is having a devastating effect on health in Europe and North America. The harms we have found include HIV and malaria outbreaks, shortages of essential medicines, lost healthcare access, and an avoidable epidemic of alcohol abuse, depression and suicide, among others. Our politicians need to take into account the serious, and in some cases profound, health consequences of economic choices. But so far, Europe’s leaders have been in denial of the evidence that austerity is costing lives.”
Despite the clear evidence, the coalition is taking no action on minimum pricing of alcohol or on plain packaging of tobacco products. It has capitulated to manufacturers, lobbyists and self-interested advisers. In the face of the clear and unequivocal damage that this coalition’s policies are doing to the health of our nation, it has no appropriate response, despite the fact that we all know that prevention is better than cure. My hon. Friend the Member for Sheffield Central highlighted the number of people who annually die prematurely as a result of cigarette smoking. Over the weekend Wembley stadium was almost full for the FA cup final; imagine that number of people dying annually as a result of preventable disease induced by smoking.
A health warning should be printed on this Government: “Warning: this Government’s policies will seriously harm you and others around you, and will detrimentally impact your mental health and that of your family and friends.” We have heard example after example. It was reported this week that, sadly, Stephanie Bottrill killed herself on 4 May. Already struggling financially, Stephanie faced the devastating prospect of the bedroom tax. In a suicide note left for her son, she said that
“the only people to blame are the government”.
Stephanie’s case is, of course, only the tip of the iceberg. Since this Government came to power the website Calum’s List has listed 33 cases where a coroner has recorded that an individual has been driven to suicide by welfare cuts.
On the evidence of this Queen’s Speech, the Government clearly do not understand or care about the human cost of what is happening. It is equally clear that they do not understand or care about the economic devastation that their policies have brought to significant sectors of our economy. Do they read the IMF reports on our economy? Do they even know how to contact the IMF to talk about them?
Having read the Queen’s Speech, it appears that the Government have no idea what to do. They seem like rabbits stuck in the headlights of their own rhetoric. The plans are more and more and more of the same: cuts followed by cuts followed by more cuts. With sectors and regions of our economy stuck in a spiral of decline, the country needs leadership, yet we have a vacuum of a Queen’s Speech. We need leadership to get us out of the problem, not dig us further into it, but instead we have a coalition strangled by indecision and political inertia. Where are the plans for growth? Where is the growth Bill, the national recovery Bill, or even the “We understand what the problem is” Bill? The Government seem to have no idea how to move things forward. There is not one substantial proposal in the speech.
It is not just me, my hon. Friends and the IMF who are saying that. Even the Chancellor’s new Governor of the Bank of England, Mark Carney, said only last month that Britain is an economy in crisis. He compared the UK with basket case countries in the eurozone. Speaking on the fringes of the IMF’s spring meeting in Washington, he said:
“The US is breaking out of the pack of crisis countries that includes the euro area, the UK and Japan.”
That pales into insignificance compared with the words of the IMF’s chief economist, Olivier Blanchard, who said last month that Britain was “playing with fire” by pressing ahead with austerity. We need change and we need action. The Queen’s Speech delivered neither.
Mr Robin Walker (Worcester) (Con)
It is a pleasure to speak in the debate on the Humble Address that was proposed so elegantly by my neighbour and hon. Friend the Member for Mid Worcestershire (Peter Luff), in whose speech I was named and suitably embarrassed. I was grateful for the kind tributes that were paid to my late father by my hon. Friend and the right hon. Member for Doncaster North (Edward Miliband), the Leader of the Opposition. I was keen to speak in today’s debate because what the Leader of the Opposition referred to as “that voice of moderation” and what my hon. Friend rightly identified as the middle way, the spirit of one nation conservatism, is not, as the right hon. Gentleman tried to suggest, unfashionable, but is at the heart of this Government’s programme and embedded in the Queen’s Speech.
“Efficiency with compassion” were the watchwords of my late father. He believed that a balance of the two was essential to meet the challenges of the hour and the needs of our country. I believe that the same is true today. Compassion has been shown by the coalition Government in introducing the Care Bill and by being the first to introduce legislation to cap social care costs. I spoke in the debate on last year’s Gracious Speech to express my disappointment that there was no such legislation and to support Opposition Members who were calling for it. It would be churlish of those who spoke out then not to recognise the enormous significance of the move in this Gracious Speech.
By setting a cap, albeit a higher one than many of us would have liked, the Bill will start the process of ensuring that nobody has to lose their home to pay for care. Setting a cap at any level should help the insurance industry to create products that protect thousands more people from that risk. The threshold, as the right hon. Member for Sutton and Cheam (Paul Burstow) pointed out, is key and will ensure that thousands more people are helped by the Government than would have been the case without the legislation.
This is not a theoretical far-off issue that we can put off tackling, but a real and painful issue that has affected our constituents for too many years. Hard-working people who have laboured and saved for years to afford the roof over their heads should not find that when they need care, their families are deprived of that asset. We all have constituents to whom that has happened. This is not, as some would like to pretend, a problem only for the rich. It affects everyone who owns a home and stands to lose it if the costs of their care are too great. Many of them are people who can afford to own a home only in retirement and many of them live in former council houses.
It was right of the Government to commission the Dilnot review and it is right to strike the balance that Dilnot acknowledged was needed between the cost of the policy to the public purse and the desperate need for a cap. Too many homes have been sold to pay for care. It is a tragedy that Governments of all colours have failed to act sooner to address the problem. It is greatly to the credit of the coalition that it is proposing the first part of a solution. I also draw the Minister’s attention to Macmillan’s ongoing campaign for further progress on free social care at the end of life, which was mentioned by my hon. Friend the Member for Truro and Falmouth (Sarah Newton).
Compassion is also being shown in the determination to improve the pensions of those who have spent years bringing up children, in the focus on preventing sexual violence across the world, and through tackling the impact of climate change, which will affect millions of the poorest people in the world. Compassion continues to be served by other ongoing policies of the coalition Government, such as the pupil premium, which directs funding to the most deprived pupils and helps schools to raise their attainment; the greater increase in the basic pension; and the increased investment in our NHS.
We have heard much from Labour Members about the pressures on our NHS and Ministers are right to have acknowledged the challenges faced in A and E and urgent care, but it is absurd for the Labour party to rail against pressures that have been building for years, including under its rule, and then to implement cash cuts in NHS spending in Wales, where that party runs the Government. The South Worcestershire clinical commissioning group will receive a £7 million increase in funding this year as a result of the coalition’s policy of increasing NHS spending. By coincidence, that is the amount by which the funding of Welsh health boards is being cut this year by the Labour Administration. On a recent visit to my local hospital, I saw some of the pressures on A and E, but I also saw how the coalition’s investment had enabled the retention of more nurses and how it will soon deliver a new clinical decisions unit that will help to alleviate some of the pressures.
We have heard much from the Labour party about the supposed privatisation of the NHS. I recently asked my local clinical commissioning group what amount of its budget goes to the private sector. Knowing that it has for some years, including under Labour, contracted certain operations, such as hip replacements, to private sector providers, I had presumed that the amount would be quite significant. I was surprised to find that the spending of the South Worcestershire clinical commissioning group in the private sector amounted to just 1.8% of its budget. That is less than its increase in spending this year. This Government are committed to efficiency and compassion in the NHS.
Compassion and efficiency are served by the emphasis on education in the Queen’s Speech. I would like to expand on that in more detail, but fear that I do not have time. We have heard excellent speeches from my hon. Friends the Members for Lancaster and Fleetwood (Eric Ollerenshaw) and for South West Devon (Mr Streeter) about the funding formula in health. I merely point out to the Government that addressing the funding formula in education is equally urgent.
Jeremy Lefroy (Stafford) (Con)
Will my hon. Friend acknowledge that that is an issue across many parts of England, including in my county of Staffordshire?
Mr Walker
I wholly agree with my hon. Friend. I will be in Staffordshire to meet the F40 group and its executive, who are campaigning for fairer funding and a more efficient system.
That brings me to the efficiency side of the equation. As a member of the Business, Innovation and Skills Committee, I would have liked to speak on the day of the debate that was themed on that portfolio. I regret that the Opposition chose to assign that theme to a Friday when I, like most other MPs, have many commitments in my constituency, including speaking to local businesses and schools.
There is a great deal in the Queen’s Speech to support business and increase efficiency in Government. The employment allowance is something that I have campaigned for and it will be extremely welcome to smaller businesses and entrepreneurs as it will reduce the cost of taking people on. I would like to have seen a Bill to reform business rates and will continue to push for further such reforms. The Bill to reduce regulation on business has been called for by almost every business organisation that I have met and will be universally welcomed, as long as it works.
The investments in infrastructure are sensible and necessary to support growth in our economy and to get Britain moving. Reducing the deficit is essential. For all the noises off that we have heard from the Opposition in this debate, they still have not got the point that the answer to a debt crisis cannot be to borrow more. When one invests, it is essential to invest well. The story of Worcester’s colleges is just one example. The previous Labour Government promised huge rebuilds costing tens of millions of pounds, but delivered nothing. This Government have delivered measured investments that have made a difference.
It would be remiss of me, having spoken in the Back-Bench debate on an EU referendum some years ago, not to mention the amendment that has been tabled by many Back-Bench Members, which I hope will be selected for debate by the Chair. I was proud to support a motion that called for a European referendum two years ago. I welcome the fact that our Prime Minister has set out clearly that he will fight for a referendum at the next election and that he is pressing for a renegotiation of our relationship with the EU in the meantime. He was right to wield his veto, he was right to press for a reduction in the European budget, which many thought was impossible, and he is right to say that the people of this country need to be given a real choice. Like my right hon. Friend the Member for Mid Sussex (Nicholas Soames), I have every confidence that he will continue to succeed on this issue.
I regret that some in the media have sought to build the amendment up as a criticism of the Prime Minister. It is for that reason that I did not sign it. However, I do regret that we could not include an EU referendum Bill in the Queen’s Speech, not because I believe it could have succeeded against the arithmetic of this House and its current composition, but because the debate would have shown how out of touch the main Opposition party is on this issue. I shall therefore support the amendment if the chance arises, and I welcome the fact that in my party at least, it will be a matter of conscience and a free vote. Although the current media frenzy is trying to paint a picture of division, I am pleased that my party is united in its determination to change our relationship with Europe for the better.
In conclusion, it is a challenge for all Governments to balance efficiency with compassion, but for all the strains of coalition—and there are many—the coalition Government continue to govern in the national interest. Perhaps that is why, despite being mid term and despite visits in the weeks before the recent local elections from the leaders of UKIP and the Green party and the Leader of the Opposition, the party that won the greatest share of the popular vote across Worcester was none of those but the true one-nation party—the Conservative party.
I particularly welcome the historic and long overdue decision announced in the Gracious Speech to place a cap on the cost of social care. I am honoured to have spoken in this debate and I look forward to supporting the Government as they continue to press for a fairer and more prosperous Britain.
Kate Green (Stretford and Urmston) (Lab)
It is a pleasure to follow the hon. Member for Worcester (Mr Walker). I, too, want to talk about social care. First, however, let me reinforce the comments made by my right hon. and hon. Friends about the announcement on compensation for sufferers of mesothelioma. That devastating illness affects a number of families in my constituency, as well as many workers in Trafford Park over many decades. Work was begun by Labour on a system of compensation for asbestos-related illness where employers and insurers cannot be traced, and we now at last have a proposal from the Government although it is disappointingly limited in its reach.
The proposed scheme will apply only to diagnoses made after 2012, and it completely misses half the victims of asbestos-related cancers because it is limited to mesothelioma sufferers and a cap is imposed on the level of payments. The deal favours insurance companies; it is not good enough for victims or for the public purse because many sufferers will continue to rely on payments from the Department for Work and Pensions as they will not be eligible for the compensation scheme. Although the proposals in the Queen’s Speech for a system of compensation are welcome, I hope we will be able to improve the legislation as the Mesothelioma Bill passes through the House.
On social care, everyone agrees that people would prefer to be cared for in their own home for as long as possible, but community-based provision must be in place for that to happen. As many right hon. and hon. Members have said, a lack of community provision is placing excessive strain on the NHS with regard to A and E and bed blocking, and my local authority in Trafford has received repeated reports that a lack of access to rehabilitation, physiotherapy, speech and language therapies—for example, after a stroke—and to support and care packages means that it is often impossible to discharge someone, even when they are medically fit to go home. That backdrop is of particular concern at a time when a significant reconfiguration of our national health service is being proposed in Trafford. There must be real concern about a squeeze on NHS services when community provision is not in place.
I am pleased that the Secretary of State has recognised the need for a single named professional to have oversight of an individual’s health and social care needs, but the fragmentation and contracting of NHS services does not help. Competition works against the integration of primary, secondary, tertiary and social care and, as many colleagues have said, cuts to local authority budgets are having a massive effect. Trafford is cutting nearly £3 million this year from social care budgets, which means cuts to day services, for example, or increased costs for meals. Curiously, the local authority intends to achieve a large part of those savings through the introduction of personalised budgets, which we understood were not intended as a savings measure.
Families want to help and keep loved ones at home, but they are under great pressure and rely particularly on day services and respite care. They tell me that assembling a personal package is complex. One constituent —a highly resourceful and articulate businessman—told me of his struggle to use a personalised budget to assemble a care package for his partner. He called seven potential providers, but most could not cope with assembling the package she needed to meet her complex needs. If my constituent could not put together that package, how—as he rightly asked me—will the more marginalised and excluded manage? He pointed to the importance of decent brokerage services, yet at the same time we are seeing cuts to advocacy services. There is already evidence that personalised budgets do not work so well for elderly people or those without family and friends to help.
It is not clear what the long-term effects of spreading personal budgets will be, but they could lead to further fragmentation of services or exacerbate inequalities. For example, there is evidence of a lack of cultural awareness among brokers and providers, and the complexity of putting together a personal care package may leave the most excluded even further behind. I invite Ministers to tell the House what steps they will take to monitor the impact of personal budgets on inequality and outcomes for the elderly and most vulnerable.
Norman Lamb
Does the hon. Lady accept that there has sometimes also been a lack of cultural awareness in the traditional way of delivering services when people make assumptions about someone’s care needs and the right way to deliver them? Putting the individual in charge and letting them determine their priorities gives us a better chance of getting it right and meeting the cultural choices that are so important to people.
Kate Green
I accept what the Minister is saying but evidence suggests that for certain more disadvantaged and vulnerable individuals, articulating those needs is very difficult and so culturally appropriate advocacy, representation and brokerage services will be of huge significance. Evidence from research carried out so far suggests that the effects of personal budgets are patchy. I am sure the Minister will wish to raise standards across the board, and I look forward to the further work that we—collectively and with local authority colleagues—can do to ensure that that is the case.
Work force issues relating to social care are also a concern. As others have pointed out, many of those working in social care earn the national minimum wage and contract pressures mean that they have little time to do more than rush in and out of appointments and provide the basic physical care that clients need. There is little time to stop for a chat or a cup of tea, or for some of the social interaction that is so valued by those in receipt of social care. Many providers have told me they are anxious and that they are being screwed down on pricing as a result of local authority spending pressures, which could lead to their contracts becoming unviable. Poor levels of pay— as my hon. Friend the Member for Bridgend (Mrs Moon) said, staff are often not paid as they move from one appointment to the next—mean that they will not be motivated to provide the best care in those circumstances, and some will be forced to give up their jobs.
Finally, I welcome the development of extra care for those in need of residential care, and some good projects are under development in Trafford. I hope the proposed development in Old Trafford will receive approval. As colleagues have pointed out, the Dilnot recommendations, as taken forward in a more limited form by the Government, will leave many families in my constituency with substantial costs but without liquid savings with which to meet them, meaning they are still likely to be forced to consider the sale of the family home.
Overall, the Queen’s Speech needed a much bolder approach to prepare us for an ageing society, including policies for maximising saving in working age—difficult when the Government are putting family budgets under such pressure—and a bolder approach that looks at combining health and social care budgets, investment in primary and community health provision to keep people out of hospital longer, integration over competition, personalisation accompanied by a service investment programme, and serious attention to work force development. I regret the many missed opportunities in those areas in the Queen’s Speech.
Stephen Mosley (City of Chester) (Con)
We are now three years into the coalition Government and there is much that we can be proud of—health, welfare, police and education reforms; this has been one of the most radical Governments in a generation, but there is still much to do. It is not only about ensuring that our country is on the right economic track; the British people must know that the Government are on their side.
Recent local elections have shown that a sizeable minority are disaffected, disillusioned and dismayed by politicians and political parties, and the Prime Minister, Deputy Prime Minister and Leader of the Opposition have been bombarded with advice, often from their own Back Benchers. Often—surprise, surprise—the advice from those Back Benchers seems to be that the only way we can re-engage the trust of the electorate is by taking over their pet project. My advice to my party leader is that there is no magic bullet to winning over the electorate. Voters are cynical and fed up of political spin. They will spot a phoney a mile off. My right hon. Friend should be himself, be natural and not pretend to be something he is not. He should be proud of what we have achieved.
Things can sometimes be difficult in a coalition. Compromises need to be made. Sometimes our friends in the Liberal Democrats have had to make compromises; sometimes Conservatives have had to do so. However, at long last, Britain is moving in the right direction again. I urge the Government to hold their nerve, do what they believe to be right and ignore the siren voices calling for a change of direction. Some in the Chamber shout loudly, but that does not mean they are right, or that they have the support of the majority of their colleagues.
The Government should stay calm, because the foundations of future prosperity have been laid in the past three years, but we must not be complacent. The measures announced in the Queen’s Speech are another step on the journey to national recovery. I am particularly pleased that the Queen’s Speech tackles head-on two tricky problems that were classified as too difficult to touch by the previous Government. Both problems—reform of social care and reform of pensions—involve helping people in their old age.
Twenty years ago, Britain had the best pensions provision in Europe. Our pensions savings were the envy of the world. Millions of workers were signed up to excellent final salary pension schemes. Schemes were in surplus, and workers could look forward to retirement with a good, inflation-proof income. All that changed in 1997. The scrapping of advance corporation tax relief blew a massive hole in the value of pension schemes. That measure cost more than £5 billion a year—it has now cost pension schemes more than £100 billion, and the average worker has lost around £100,000.
Labour’s raid on pensions was just one nail in the coffin of final salary pension schemes. People are living much longer, and the global recession, the turmoil in the eurozone and our massive deficit have not helped matters—they have resulted in historically low interest rates, meaning that pensioners get less income from their savings.
Reform is urgently needed, which is why I warmly welcome the inclusion of the pensions Bill in the Queen’s Speech and the introduction of the single-tier pension. To ensure that future pensions remain affordable, people will have to work a year or two longer, so the Bill will bring forward the increase in the state retirement age and introduce a five-yearly independent review to ensure that the state pension remains sustainable. The current pension system is complex and confusing. It is almost impossible for people to work out how much they will receive. Under the new single-tier pension, people will qualify for the full pension of £144 a week provided they have made 35 years of national insurance contributions. Millions of future pensioners will be removed from poverty, and people who have saved for retirement will be able to enjoy the full benefit of their savings.
The proposals will address the inequalities in the current pension system. The Bill will support women who have taken time out to raise a family, and support low earners. The national insurance contributions of the self-employed will count towards a pension for the first time. Future generations will also benefit from the option of a workplace pension, with a contribution from both their employer and the Government. The pensions Bill will provide a clear, straightforward and fair pension for all—one that is secure as we face the problem of an ageing population.
Another big worry for people as they get older is who will look after them in their old age. The cost of care can be astronomical. For many, the fear of running out of money or being forced to sell their home to pay care charges causes huge concern. It is only natural for people to want to leave something behind for their children and grandchildren, and only natural that, after a lifetime of working hard and paying taxes, people want and expect the Government to be there to help. I therefore warmly welcome the announcement of the social care Bill and the reforms to long-term care funding. A cap on social care costs will help to ensure that the elderly do not have to sell their homes to meet their care bills, and that old people do not feel that they are a burden on others as their lives draw to a close.
The Bill will make a great many other improvements to the social care system, such as standardised thresholds for determining whether individuals are eligible to support from a local authority. It will include a duty on councils to inform residents about care provision, and a new right for carers to receive more support. For too long, Governments have found the problems of social care too difficult to tackle, and consequently tried to ignore them. I am proud that this Government are tackling the problem head-on and proposing a long-term solution that will benefit millions.
I warmly welcome the Government’s programme outlined in the Queen’s Speech. We have begun the long and hard process of restoring our nation’s finances to order. We must now turn to strengthening our society. We have achieved a massive amount in the past two Sessions of this Parliament, but a great deal more needs to be done. This year’s Queen’s Speech is an excellent step in the right direction.
Dan Jarvis (Barnsley Central) (Lab)
I am grateful for the opportunity to contribute to the Queen’s Speech debate on health and social care. Protecting the health of young people, reducing preventable deaths and safeguarding the health of Britain’s population are three important goals, but the absence of a Bill to introduce plain packaging for cigarettes undermines the Government’s commitment to those goals.
Cancer is an illness that touches many people’s lives. Although research is key to finding new ways to treat cancer, the Government can take simple and practical measures to avoid preventable deaths. Last week, the Government failed to introduce one such measure that could help to reduce cancer and other forms of smoking-related disease.
The introduction of standardised, plain packaging had been heralded as a good idea by a number of members of the Government. The Under-Secretary of State for Health, the hon. Member for Central Suffolk and North Ipswich (Dr Poulter), a member of the medical profession, had previously shown his support for plain packaging. He said that plain packaging
“could certainly help to reduce the brand marketing appeal of cigarettes to teenagers, and most importantly, help to stop young people from developing a smoking habit that can only shorten their lives.”
I agree with him. The Under-Secretary of State for Health, the hon. Member for Broxtowe (Anna Soubry), has stated that the evidence she has
“seen suggests that it is the attractiveness of the packets that leads young people to decide to take up smoking.”—[Official Report, 16 April 2013; Vol. 156, c. 561.]
I agree with her, too, and yet, three years into this Parliament, no action has been taken by the Government.
According to Cancer Research UK, more than 100,000 deaths are caused by tobacco each year in the UK. That could be much reduced if the Government took meaningful action. Between 2006 and 2007, the Labour Government took action to curb the harmful effects of smoking by banning smoking in public places. As the shadow Secretary of State for Health has said, the introduction of plain packaging for cigarettes is a natural progression, and as the Leader of the Opposition said in his response to the Queen’s Speech, plain packaging is the right thing for public health and the right thing for the country. I agree with him.
Since the Government consultation on plain packaging closed some nine months ago in August 2012, more than 150,000 children will have started an addiction to a substance that results in the death of half its long-term users. I accept that the introduction of plain packaging is not a silver bullet, but neither is it the nanny state, as some have described it. Plain packaging is a means of preventing young people from taking up a habit that, in the long run, could cost them their lives. Some 257,000 11 to 15-year-olds become smokers each year, and that number is unacceptable. We already have legislation to prevent children below the age of 18 from buying cigarettes. We banned smoking in public places, but more needs to be done.
Mrs Moon
The allegation is that it would be a nanny state if we introduced plain packaging. Is that not a contradiction, given that we know that state intervention often saves lives? If we had been worried about the nanny state, we would never have introduced seat belts or drink-driving laws, yet we would never move back from those. Is it not time we moved forward on plain packaging as well?
Dan Jarvis
I completely agree. The term “nanny state” has been used, but we want to prevent young people from taking up a habit that in the long term could cost them their lives. In 2013, Labour Members are on the correct side of the debate, which is also where the public are.
We should pause to consider the financial costs of smoking, which can be seen in its impact in towns such as the one I am proud to represent. The financial costs encompass much more than heightened NHS expenses; lost output and lost productivity both increase the price associated with smoking. For Barnsley alone, smoking creates a bill amounting to £75.3 million each year.
Yet the financial cost is small compared with the human cost. In Barnsley, there are 485 adult deaths from smoking each year. Despite that, nearly 1,000 children in Barnsley aged between 11 and 15 take up smoking each year and approximately 1,100 10 to 14-year-olds there are regular smokers. Like the rest of the UK, Barnsley has paid too high a price. It is time that action was taken to prevent the costs of smoking from stretching further and further into the future.
Let us be clear: advertising works. If it did not, the tobacco industry would not spend such vast amounts of time, money and effort on packaging presentation and it would not be opposing plain packaging with such vigour. For the tobacco industry, packaging is a form of advertising that helps to keep existing customers loyal and attracts new ones. On that point, the World Health Organisation is clear:
“Marketing of tobacco products encourages current smokers to smoke more, decreases their motivation to quit, and urges”
young people to start.
Of course children will be attracted to sophisticated and glamorous packaging. When he was Health Secretary, the Leader of the House echoed that view, stating:
“It’s wrong that children are being attracted to smoke by glitzy designs on packets…children should be protected from the start.”
Unusually, I agree with him.
A lack of evidence cannot be used as an excuse for delaying the essential legislation. Advertising does impact on young people’s decisions, and in the context of smoking that means that children’s health is put at risk. The trade-off between the tobacco industry and children’s health has been in favour of the industry for too long. It is time that something was done to redress the balance.
There is also clear support for plain packaging from the public. Last year, 63% of the UK public supported standardised, plain packaging and only 16% of people opposed it. A lack of public support is not holding the Government back from introducing the legislation; in fact, 85% of people back Government action to reduce the number of young people who start smoking.
By delaying the next step in smoking prevention, the Government are not only putting a future generation’s health at risk, but ignoring a key issue that British people want and need Parliament to address. There is the evidence, the public support and the moral imperative to act, yet the Government have so far failed to take the definitive action needed to save lives, reduce health care costs and prevent children’s health from being put at risk.
Madam Deputy Speaker, please accept my apologies for not being able to attend the winding-up speeches. Let me conclude by saying that I am in no doubt that plain packaging is the right thing for public health and the right thing for the country. I am in no doubt we will have plain packaging. When we get there, we will wonder why it took so long to protect children against the harmful impacts of smoking and about the lives that could have been saved if we had acted sooner. We can stop that wondering if we act sooner rather than later. We know that advertising works and that smoking kills. It is time to do something about it.
Jeremy Lefroy (Stafford) (Con)
It is an honour to follow the hon. Member for Barnsley Central (Dan Jarvis), with whom I entirely agree about standardised packaging for cigarettes. I also agree with those who have spoken in favour of a minimum price for alcohol on public health grounds.
The Gracious Speech contains many important measures that are likely to assist the economy in my constituency—not least the employment allowance, the reduction of the burden of excessive regulation and measures to make it easier to protect intellectual property. Unemployment has fallen in my constituency since the election, but there is still a great deal to do. The number of apprenticeships has risen, so I welcome the Government’s plans to ensure that it becomes
“typical for those leaving school to start a traineeship or an apprenticeship, or to go to university.”
As previous speakers have said, the Government are taking important long-term decisions on the financing of pensions and certain parts of social care. Those decisions, including the change in the state pension age, the introduction of a flat-rate pension and the capping of care home costs, aim to give more certainty in an increasingly uncertain world, and I shall return to that.
I shall be opposing one measure, I am afraid—the plan for High Speed 2. It is my belief and that of my constituents that both the concept and the business case are deeply flawed. My constituents cannot understand why a route is announced 13 years before work starts without a proper plan to compensate immediately those whose property has been rendered unsellable. I have visited and heard from constituents who must, for pressing personal reasons, move house now, but who simply cannot. I urge the Government to put in place a full, fair and speedy system of compensation or purchase of property to enable those constituents to carry on with their lives.
I now wish to concentrate on health and social care. First, I ask the Government to provide time for a full debate on the Francis report into the Mid Staffs NHS Foundation Trust. Important lessons have already been learned. The appointment of a dedicated inspectorate of hospitals is a major step—unusually, I must disagree with the hon. Member for Walsall South (Valerie Vaz)— as is the introduction of more practical teaching into nursing training.
However, there is much more in the Francis report that needs to be debated. The vital and important work that Julie Bailey and Cure the NHS did to highlight problems in care deserves a thorough hearing. Earlier, we were all moved by the speech made by the right hon. Member for Cynon Valley (Ann Clwyd), who is looking into the matter and takes it so seriously. We also need to look at how mortality statistics are compiled and used, as they are becoming important and controversial.
Secondly, I spoke about the importance of trying to give some certainty on basic needs in an uncertain world. That applies to health as much as to pensions and social care. The provision of a national health service free at the point of need probably provides more peace of mind to the people of this country than any other single thing that a Government could do, apart from ensuring security, law and order.
Health care affects each of us and does so, in different ways, throughout our lives. It is a common bond between us and contributes to social cohesion. Yet its long-term financing is on difficult ground. The Government have rightly protected NHS spending at a time when other budgets have had to be cut, but with a growing and ageing population, it is likely that we will need a real-terms increase in spending in the coming years.
There is little room to cut costs from other Departments. We have to find another way to allow controlled, efficient and effective increases in health and social care spending, to deal with the challenges posed by an ageing population while not cutting other essential public services. I encourage the Government, over a period of years, to look at turning national insurance into a national health insurance that, as now, is based progressively on personal income, and which will provide the funding for health and, eventually, social care. That would enable us to have a sensible discussion on the national insurance rate required to fund health and social care properly, separate from the wider debate on tax rates and tax policy.
Thirdly, I wish to raise again the question of emergency and acute tariffs, on which my hon. Friend the Member for South West Devon (Mr Streeter) spoke so eloquently. The continuing squeeze on them, coupled with the fact that activity greater than 2009 levels is paid at only 30% of the full tariff, is leading inexorably to financial difficulties for acute hospitals, particularly district general hospitals such as mine at Stafford. However, it is not only the smallest that are affected. Major trusts also face deficits. Even if they are not, they will have to pick up the work load if acute services are removed from their smaller neighbours. That situation cannot continue. The drift towards centralising all emergency and acute services in the largest hospitals has to be stopped—even reversed. It will mean much closer working between hospitals, as hon. Members have said, and perhaps the end of many smaller trusts, though not smaller hospitals. It will also mean that royal colleges will have to get a grip and stop the fragmentation of health care into more and more specialties that cover less and less. We need, as the head of a medical school said to me recently, to rediscover the importance of high-quality generalists. A publicly funded national health service can only survive on that basis. That does not mean that specialisms have no place in the NHS—of course they do—but they must not drive out good general medicine.
Fourthly, the Government need urgently to look at health allocations across the country, as my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw) said. The welcome increase in public health funding where there are particular inequalities was meant to enable per head allocations to become fairer, but that has not happened. Currently, South Staffordshire receives at least £40 million per year below its recognised fair shares allocation, and that is making the work of local clinical commissioning groups even harder. The Government have committed themselves to addressing this, but it needs to be done this year or CCGs will find themselves in a very difficult position right from the outset.
Finally, it is vital that the Government listen to the public. On 20 April, it is estimated that 50,000 local people went on a local march and rally, which I had the honour of addressing, in support of Stafford hospital. They were speaking out against the idea that emergency, acute and maternity services could be removed, and were making the point that alternative services were too far away and, in any case, themselves under great pressure, and that the proposals did not take proper account of the increasing population and demography. All of that is common sense, and I hope that the administrators currently running Stafford and Cannock hospitals listen to that common sense, and that it is heard across the country.
Monitor has a chance, together with the trust development authority, to establish a sensible and long-lasting configuration for emergency and acute hospital services across the country that recognises the important role of our smaller, acute district general hospitals. That can be done and it must be done. The Government are tackling the long-term problems on pensions that we need to take on, and it is vital that we do the same for health and social care.
John Woodcock (Barrow and Furness) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Stafford (Jeremy Lefroy), who made a thoughtful and considered speech on an issue of great importance nationally, as well as to his constituents.
It was a pleasure to be in the Chamber to hear such a powerful speech on plain packaging for cigarettes from my hon. Friend the Member for Barnsley Central (Dan Jarvis). Frankly, if Ministers are not convinced after hearing his arguments, they should probably not be in their place. I think that they are convinced and I hope to see them make progress.
I want to start on a note of consensus. I welcome the inclusion in the Gracious Speech of the Bill on mesothelioma compensation. This dreadful disease is a time bomb that, once detonated, often goes on to kill within months. With its shipbuilding heritage, more individuals in Barrow and Furness suffer from mesothelioma than in any other constituency in England. We owe a duty of care to all those who are suffering: they made an honest living and what is happening to them is not right. We should applaud all those who have pushed for further progress, including former Labour Ministers and the hon. Member for Chatham and Aylesford (Tracey Crouch), who I understand wanted to be here but is on her sick bed.
There are early concerns about the Government’s paucity of ambition. It is vital that the Government mandate a scheme that will build fittingly on the work of my predecessor, Lord Hutton, who expanded and speeded up compensation in the previous Parliament. However, many will see the thin programme last week as a missed opportunity to address increasing alarm about the Government’s poor stewardship of the NHS. It would be too optimistic to hope that Ministers have had an early change of heart on the costly and ill-conceived reforms they have just bulldozed through Parliament. In addition to the lamentable absence of plain packaging legislation, they could have introduced measures that sought to bridge the yawning gap between their rhetoric on listening to local people and the reality that is seeing the clear wishes of residents on NHS services ignored up and down the country.
In Barrow and Furness, we hope that health professionals in charge of provision across Morecambe bay will heed the passion and powerful arguments from local people on oncology, maternity, and accident and emergency provision. While residents understand that it can make sense to travel to get the best that 21st century health care can offer, like so many across the country they love their local hospital, they think it should have its fair share of the very best, and they think local provision, that is accessible to them and visiting loved ones, is a basic part of a quality service, not something to be dismissed as an unnecessary luxury.
I have some hope that the new management team at Morecambe Bay NHS Foundation Trust will listen to local concerns. An early test will be the publication of revised plans for Furness General hospital’s oncology unit this month. However, we see what is happening in other areas where the Government’s local engagement test is proving to mean little more than holding a meeting and nodding in an understanding manner, and ignoring everything people say and downgrading services anyway. When my constituents see the scale of the upheaval and cuts to front-line nursing staff involved in reducing the budget of Morecambe Bay Trust by £25 million within two years, they are, understandably, very wary of trusting Government promises that no efficiency savings will be allowed to affect the quality of patient care. I hope the Minister will tell me whether the Government will heed calls, including from the trust itself, for a rethink on the speed and scale of the cuts they are imposing.
Will the Government not take heed of the dismay felt about recent NHS reorganisations and enact measures to strengthen the power of local opinion in determining the future of our hospitals? We live in times of strained resources, but faith in the future of the NHS may continue to be eroded until we learn genuinely to trust local communities. When we come to look back at the history of the NHS over the current decade, I think we will see this as the time when we were bound overly tightly to the idea that the clinician always knows best. We will come to see the Government’s blind faith in the clinical stamp for taking services away as an early 21st century equivalent of the “Whitehall knows best” mentality that gripped reforming Governments after the second world war. Just like the “Whitehall knows best” ethos of the 1940s and 1950s, the clinician knows best mantra has the best of intentions but is insufficiently responsive to challenge from the patients who rely on the services that are being shaped by those at the centre.
Let me be clear. It is essential that health professionals make their case when decisions are made. Their expertise is immense and people should not deviate lightly from their plans. However, it is by no means certain that any one group, even one bursting with medical experience, will always call it right first time. Their views must be subject to scrutiny. Often the clinical push to concentrate a specialism at a single site takes less account of local geography and community links to health facilities than is demanded by local people, who ultimately pay the clinicians’ wages.
This is not an argument for sentimentality. The views of local people will sometimes be irreconcilably different in a single area, but if, for example, Barrow families suddenly face the prospect of a 100-mile round trip to visit a relative—because a unit at Furness General hospital has moved to Lancaster—their views on the move will be important. Many communities across England are fighting for their local health services. Some are threatened by cuts, but others are at risk from this clinically led decision-making model.
James Duddridge
The hon. Gentleman is making some valid points, several of which I am deeply sympathetic to, but on clinicians, is he referring to GPs or specialists? Does he think that the clinical commissioning groups of GPs who are more fixed in the community could have an impact on, for example, oncology and other specialisms in local hospitals?
John Woodcock
That is a good point, and it remains to be seen. We hope so, but the system has yet to be put to the test.
I am disappointed that no move towards genuine localism was outlined in the Gracious Speech. It is time for a people’s NHS Bill to end the toothless sham that too often passes for local consultation. When local people say no, the default should be that they have exercised a veto that ought to be heeded. That would require a step change in our NHS away from a model that, yes, might have helped deliver improvements in health outcomes of which the country should be proud, but which has done so—
John Woodcock
I will give way, if the Minister is quick, because I do not have much time left.
Norman Lamb
I am interested in what the hon. Gentleman is saying, and I accept the point about the importance of accountability. [Interruption.] He has just realised that he has got an extra minute of time, so I have done him a favour. Does he accept, however, that the old NHS, which we reformed, had no local accountability at all and that we have introduced some accountability through the health and wellbeing boards, bringing together local authorities and the NHS?
John Woodcock
It is an interesting point. I am not claiming that the system operating now is fundamentally different from that of three years ago, but around the country people who were promised a say in local decisions have been devastated to find out that they have none. Unquestionably, what has been put in place is not adequate. It is a sop to localism that does not do what it says. It would be a step change to move away from the current model.
Following the current model has meant alienating many local people who understood the trade-offs, but nevertheless fervently desired to keep services local. Whatever happens, surely the current tension between national planning and local unrest is unsustainable in the long term. In opposition, the Conservative party told the public that it understood that and pledged to end local hospital service closures, but of course its promises turned out to be a cheap election con trick. Instead, Ministers have forced through an expensive, chaotic and divisive health reform package that ultimately has pushed NHS decision making still further from the people it serves. We need a change of direction. Local communities pay for the health service they receive, and they deserve to be treated with greater respect.
Paul Maynard (Blackpool North and Cleveleys) (Con)
It is a pleasure to speak in this section of the debate on the Queen’s Speech.
It is three years, almost to the day, since I made my maiden speech, in the very same section of the debate on the Queen’s Speech—health and social care—and a lot has changed in those three years, especially on the Government Benches, in terms of policy. Listening to the Opposition speeches, however, and indeed to some from the Government Benches, it seemed to me that a lot had not changed. I think back to 1997, when the Conservative party experienced an appalling and traumatic defeat. How did it react? For a short while, we thought that the voters had got it wrong, that we could keep thrashing away at the same old themes and that very soon the voters would repent of their folly and everything would be all right, we would be carried back, shoulder high, into power. Of course, it did not happen; it took us 13 years and three election defeats to realise that singing the same old tune, time and time again, did not deliver the promised nirvana.
When I listen to Opposition Members, I feel as if I am listening to the Conservative party of 1997, only now it is the Labour party of 2013: unwilling to change, going back to what makes it feel comfortable, bashing the tobacco companies—perhaps quite rightly, but there needs to be a much stronger evidence base than disliking global capital, for heaven’s sake! Time and again, I listen to Labour Members and think, “Theirs is not a party that is ready for power”, because I am not hearing a new analysis or new arguments; I am just hearing the same old grudges, although I might except the hon. Member for Barrow and Furness (John Woodcock), who is one of Labour’s more thoughtful Members—that is quite rare on the Labour Benches.
I was delighted to have the Leader of the Opposition in Cleveleys for the local election campaign. On this occasion, he kindly wrote to tell me in advance—the first time he had done that, despite having made several visits—so I thank him for that small courtesy, if for nothing else. He gathered in the shopping centre in the centre of Cleveleys, with his little pallet, which he stepped on to. Labour bussed in all the councillors it could from Blackpool, because there are hardly any Labour activists in Cleveleys, and he just stood around, and my spy, who was there, tells me that no one paid him the slightest attention—he was looked upon as rather a curiosity, while people walked by eager to get on with their shopping and get their bargains. What happened? The political compass needle in Cleveleys barely shifted compared with 2009. If Labour cannot win back Lancashire—a county it controlled from 1981 to 2009—it is not in a position to gain power, in my view. That is why it is doubly important that Conservative Members do not get overly seduced by what UKIP is doing, but focus on what matters and what we were elected to do.
In my maiden speech three years ago, I stressed the importance of the dignity of patients in our health care system, and I have stressed it ever since. We are now starting to see progress on that, not least thanks to the activism of the right hon. Member for Cynon Valley (Ann Clwyd) and the role she now plays, but more importantly thanks to the rhetoric around what we recognise as being important. On my way here today from Euston, I was standing on an underground train behind a young trainee nurse. In her arms was a thick folder bearing one title: “dignity”. That message is starting to get through to NHS staff, in particular.
Although we can all recite cases from constituents of cases of care that they felt were below standards, we must balance that with the recognition that nurses are the glue that holds the NHS together and that we talk them down at our peril. For every nurse who might not have ensured that somebody was adequately fed or had their fingernails clipped or their conversation in the morning, there is another for whom nursing is a vocation. We have to recognise that. Nursing is a vocation. Occasionally, it is a very difficult vocation. The system can be testing, trying and infuriating for many, but nurses are there because they want to care for their patients. Perhaps the secret to health policy lies in allowing our health care professionals to express that vocation, not to smother it beneath a system that does not allow that feeling of good will and desire to do good for our fellow patients to express itself.
The other thematic issue I want to come to is perhaps a little more controversial. We are all politicians, are we not, whether we like it or not? I am sure I would rather not be a politician, but I am a Member of Parliament and it comes with the territory. The moment anything is scheduled to close in our constituencies, there is an immense temptation to man the proverbial barricades. We issue a press release and set up a photo op outside the threatened location, but do we always pause to think what is in the best interests of our constituents, or do we think, “What will get me more votes?”
I am fortunate, as I have an excellent hospital in Blackpool, the Victoria. It has one of the premier stroke rehabilitation units in the north-west. When it opened, it started taking in-patients from as far away as the south lakes. I am not quite sure, but the area it covers might even stretch as far as Barrow—I know it goes as far as Kendal. That was quite controversial at the time, because it meant that a patient having a stroke would have to drive past about four hospitals to get to Blackpool. Some people thought, “Why can’t we go to our local hospital? It’s got wonderful facilities.” However, since the stroke unit at Blackpool opened, survival rates have increased for all patients in all groups, because of the excellence of its specialist care. That is a challenge for every Member of this House, no matter what our political parties. The easy answer—the easy campaign, the scare story, or what I call “campaigning in the conditional”—is not always in our long-term interests.
I ask myself how I would have reacted if the stroke unit had been in Lancaster rather than Blackpool. Would I have manned a barricade, gone on a march or set up a petition? I do not know; I hope I would not. I hope I would have trusted in the idea of outcomes. Although I recognise what the hon. Member for Barrow and Furness (John Woodcock) said about localism needing to mean something, I also recognise that clinicians, too, have a role. Where outcomes are unacceptably poor, something has to be done. However, we need to do a much better job of communicating to our electorate why the clinical evidence that suggests that a particular thing has to change is powerful evidence, because evidence is power and we need to convince those who are most concerned.
Mrs Madeleine Moon (Bridgend) (Lab)
There are approximately 6 million carers in the UK, 2.2 million of whom provide more than 20 hours of care a week. Between them, they provide more than £119 billion- worth of care each year. They are listening to this evening’s debate. They want to know whether what is in the Queen’s Speech are empty words and further promises, or whether their lives will improve and changes will be made.
A lot of people have spoken of the work undertaken by my right hon. Friend the Member for Cynon Valley (Ann Clwyd) in the complaints review. I have sent copies of the letters I wrote when I made a complaint about the absolutely appalling treatment of my mother in an English hospital over a number of visits. I worked hard to make the complaint stick and ensure that my voice as her carer was heard, but even I, as a Member of Parliament, was worn down in the end.
I have sat in this debate and listened to Government Members criticise the Welsh health service. I have a very sick husband. He uses the Welsh health service, and I am grateful for the quality of care that he receives from it every day of the week. I know that my GP service is excellent and I know that if I need care from my local hospital for him, it is there, so I want to hear no more nonsense about the Welsh health service.
Mrs Moon
No, I will not; I am in the midst of my speech.
In Bridgend, there are 18,000 people providing care for relatives or friends. Some 5,500 of them provide unpaid care for more than 50 hours a week—care that is compassionate and dedicated; care of a quality that we would love to hear is being provided in our hospitals. I asked a group of carers recently what it meant to be a carer. One of them said, “It’s like trying to live two people’s lives and cramming them into one person’s life.” The other said, “You’re an expert in bodily fluids. Urine, faeces, blood and vomit are the daily recipe.” Is it any wonder that the Royal College of General Practitioners recommended last week that all carers should be screened for depression? It recognises that carers are particularly susceptible to depression and that there is a need for greater support.
Carers UK has reported that almost a third of those caring for 35 hours a week or more receive no practical support, while 84% of carers surveyed said that caring had a negative impact on health. That is up from 74% in 2011-12, so the problem is getting worse. Four in 10 —42%—of those caring for someone discharged from hospital in the last year felt that the person they were caring for was not ready to come out of hospital and that they did not have the right support at home. I worked in discharge care in a number of hospitals in Wales. Safe discharge was a major platform on which we worked. The things that are a problem remain the same. There is a lack of specialist equipment readily available for carers to assist with discharge—I am talking about beds that prevent bed sores, hoists, commodes, adapted bathrooms, swallowing assessments, speech and language therapy, occupational therapists and physios. It is not just nursing we need to focus on; it is all those important services.
We also need to look at the availability of treatment and medication that make a difference to people’s lives. I want to talk briefly about a condition that really shocks me and the carers of those who have it: aHUS, or atypical hemolytic uremic syndrome. I am the co-chair of the all-party kidney group. A few weeks ago I chaired a meeting of people with aHUS. There is a drug available for the condition that is called—excuse me, Madam Deputy Speaker, but it is a dreadful drug to pronounce—eculizumab. It sounds like some sort of African tribe, but that is what it is called. Taking eculizumab can virtually cure someone with aHUS. They get their life back. We are talking about a very small number of people who have the condition—less than 170. The typical form is triggered by a bacterial infection such as E. coli; the atypical form is genetic. We heard tragic evidence from families in which perhaps three or four generations of children and adults carried the genetic trigger. More importantly, the only treatment other than taking eculizumab is to have dialysis on a virtually daily basis. We heard from carers who have to place the extremely painful and long needles needed for dialysis into their children’s arms. Those children cannot have a kidney transplant because the transplant would almost certainly have the same condition. Even if they had a transplant, they would continue to need dialysis.
I am appalled to learn that the Government have agreed that those who are taking the drug on a trial basis may continue to take it, while those who have already been diagnosed but refused access to the drug on a trial basis will not be allowed access to it. Newly diagnosed patients will, however, have access to it. That is nonsense. We could save a large amount of money, and we could save those patients the trauma of daily dialysis. The drug was recommended for use by the Advisory Group for National Specialised Services and it has now been submitted to the National Institute for Health and Clinical Excellence for further appraisal. Sufferers of the condition might therefore have to wait until 2014 to get access to it, which is totally unacceptable.
Madam Deputy Speaker, I am sorry that I shall not be able to stay for the winding-up speeches, but I hope that the Minister will consider whether it might be possible for access to this drug to be extended to all sufferers of aHUS, so that they and their carers can once more have a decent quality of life, and so that the NHS can save money.
James Duddridge (Rochford and Southend East) (Con)
It is a privilege to be called to speak in the debate, and it is good to follow the hon. Member for Bridgend (Mrs Moon). Some of her comments about rare kidney diseases resonated with me, as I have recently visited the very good renal centre in Southend. I have also looked into the issue of rare diseases. Individually, they might be rare, but collectively they are quite common as a group, and the funding for the relevant drugs and for more general treatment can be tricky.
I have a quite carefully drafted speech here, but I was blown away by my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), who spoke without notes and whose speech was a fantastic tour de force. I am tempted, perhaps unwisely, to pick up on a number of issues that have been mentioned in the debate, some of which have been quite controversial. I did not listen to every single speech today; I missed half an hour. While I nipped out for a cup of tea, I heard colleagues on this side of the House speaking out against equal marriage—perhaps some Opposition Members did so as well—but I for one am glad that that legislation will be dealt with in this Session. The carry-over motion will ensure that we have ample time to debate it and to work through some of the issues. In 20 or 30 years, we will look back in confusion as to what the problem was. We are perhaps introducing the legislation faster than the public has an appetite for, but politicians sometimes need to lead rather than follow.
At lunchtime today, I had the privilege of having lunch with my mum and dad, who were in very good form. They said that they had been looking for me during the Queen’s Speech but had been unable to see me, and I told them that the debate was carrying on today. I asked them what they had thought of the speech, and they told me they thought it was very funny. I am not sure that either Her Majesty or the Prime Minister wanted to create that impression. I asked my mum why she found it funny, and she described how Black Rod had got stuck halfway down and been held up by the Speaker.
There has been a debate today about whether the Queen’s Speech was too narrow. The right hon. Member for Rother Valley (Mr Barron) criticised Conservative Members for talking more about what was not in the speech, but the general public do not think in terms of Bills and Acts; they think in themes, as my hon. Friend the Member for Blackpool North and Cleveleys said. One theme of today’s debate has been immigration seen through the prism of the NHS, although the general public probably also look at it through other prisms, including housing and Europe. Looking at the Queen’s Speech in a thematic way is perhaps slightly more useful.
I am tempted to make some comments on Europe. It is constructive that we should vote on the matter. If the coalition is to survive, it will need to be more comfortable about having open debates rather than simply private ones. We will need to have more open debates, rather than fewer, if the coalition is to be healthy all the way through to 2015. It is a strength of democracy to have open debate rather than narrowly commit ourselves to certain lines.
On immigration, the right hon. Member for Rother Valley talked about the use of extremist language. Actually, far from its use being negative in this context, the use of immoderate language can sometimes be essential if we are to have an open discussion. Otherwise, the debate gets overtaken by the Daily Mail and the Daily Express. We should have a full and frank debate on immigration, and on other issues.
When we consider health—the main focus of today’s debate—I think politicians are sometimes too scared to ask questions about a merger or a closure, for example, and to query whether those are the right things to do. We should be more open minded. The hon. Member for Barrow and Furness (John Woodcock) said that more local people should be involved in the process. I am sure he is right, but I am not sure that that is a totally new thing, as the Minister intervened to say in the latter part of his speech. I was certainly very close to the position the hon. Gentleman stated. I am not sure which of us should worry more about that, but it is a statement of fact about how I felt.
The commitment to spending 0.7% of gross national income on international aid was not in the Queen’s Speech. That is a totally arbitrary figure, but it is a promise that all the main political parties made and one that I fully support. To be frank, I cannot get het up about whether or not the commitment is built into a piece of legislation. If my family was starving in Ethiopia, or in the northern badlands as Bob Geldof would describe them, I would not care whether the money was coming because it had been mandated or because it had been promised. It makes little difference. I certainly congratulate the Government on actually spending that money, which is far and away the most important thing.
Let me deal with the deregulation Bill—legislation announced in the Queen’s Speech to reduce the body of existing legislation. I feel that an awful lot more can be done. The Bill has not been published, but I think that the Government have been too modest in their ambitions when it comes to deregulation. The Better Regulation Task Force is producing some really strong ideas.
John Woodcock
I am fascinated by what the hon. Gentleman is saying. Perhaps he was about to mention this, but what does he want to deregulate?
James Duddridge
At the moment, we have piecemeal deregulation, whereby we look at specific issues and then deregulate. I was elected as chair of the Regulatory Reform Committee, which as a body deals with pieces of legislative reform that the Government think can be fast-tracked for regulation or deregulation in order to avoid burdensome regulation. That is very much a piecemeal process—we looked, for example, at veterinary legislation—but it would be much better to have a big thematic review of issues surrounding care homes, for example. Rather than look at health and safety, the medical issues or equipment separately, it would be better to have a thematic review, cutting across Departments in the same way this debate cuts across the division between the health service and social services, local councils and different funding streams. I think it is our responsibility to do that here in the House of Commons.
The deregulation Bill will be good and tidy up bits of the statute book, but I would like to see a lot more detail about how that is going to happen. A Joint Committee will be set up between the Lords and the Commons, and I would very much like to serve on it, but as much as possible we should open out the number of Bills that we are looking at. Setting aside the issue of whether we should be in or out of Europe, the increase in European legislation demands that we face up to a two-for-one deregulatory challenge, just to stay standing. We need to go further.
The economy is another key theme in the Queen’s Speech. Given our current economic position, if we had had a Conservative Government from the outset, I believe such a Government would have tested every single Bill by asking, “Will this Bill help the economy? If not, it is marginal, and we should push it to one side—certainly when it comes to parliamentary time and impact.” I think that the Budget is much more important. When we highlight the themes in the Queen’s Speech, we should not judge ourselves by the amount of paperwork we sign off. The Budget is, in many ways, more important. Corporation tax, the national insurance deal and so forth will get Britain booming. I have seen it in my local area, where, for example, Southend airport has boomed, generating over 500 jobs in the few years that it has been motoring in a serious way, as opposed to when it was a rather hobbyist airport. There is much still to be done, but we should not judge ourselves by the volume of legislation. In fact, through the deregulation Bill, we should be able to reduce that volume.
Grahame M. Morris (Easington) (Lab)
I thought that, rather than speaking about Europe or votes for prisoners, I might make a couple of points about health and social care.
There are many provisions that I should have liked the Government to include in their legislative programme. For instance, I should have liked to see a commitment to extending freedom of information requests to private health care companies. I should also have liked to see a commitment to excluding health care from the scope of trade agreements as part of a broader exclusion of public services. I understand that the Prime Minister is involved in negotiations at this moment, and I hope that the trade agreement issue is on his agenda, because there is an increasing fear among Opposition Members that—in that context, and also as a result of the Health and Social Care Act 2012—our health care system is being prepared for privatisation, and the way is being cleared for the mass entry of United States health care multinationals to the UK market.
I am pleased that the Care Bill is to be introduced in the current Session. It will go some way towards helping those who are most in need of social care, as well as their carers, providing as it does the first ever legislative framework for social care. It is a much-needed first step in the right direction, which has been a long time coming. However, it raises a great many issues. As usual with this Government, we need to look beneath the veneer and establish whether an opportunity is being taken or missed, and whether we are taking one step forward and several steps back. It would certainly be a retrograde step to raise expectations only for them to be dashed as people discover that the proposals are really quite limited. We need to be honest about what is on offer.
Members often receive some shocking and surprising statistics in their mailbags, but some of the most surprising pieces of information that I have seen relate to social care. I must thank a range of organisations—including Scope, Age UK, the Alzheimer’s Society, the TUC, the British Medical Association, Barnardo’s and the European Federation of Public Service Unions—for supplying briefings to me and to other Members. It shames me, and I am sure it shames Members in all parts of the House, that in Britain in the 21st century four out of 10 disabled people who receive social care support say that it does not meet their needs. That was established recently by research on social care conducted by the disability charity Scope following the publication of a report by the Joint Committee on the draft Care and Support Bill, on which I served. It is feared that the current provisions, and some of those that are proposed, will not be sufficient.
Other Members have welcomed the Bill. However, it is hugely worrying that local government finance has been hollowed out. That will have major consequences. It has been said that local government allocations for social care are protected, but they are certainly not protected when it comes to provision for transport and other supplementary services that are of value to members of the group involved. Many organisations have pointed out that setting eligibility criteria for care at “moderate” is essential if this framework is to be effective. As the hon. Member for Bradford East (Mr Ward) pointed out, according to the findings of a survey by Scope, by 2012 84% of councils had set their eligibility criteria at the “substantial” threshold. That represents an increase of nearly a third since 2005. As a result, only 14% of people with “moderate” needs are now receiving care, and the findings of recent surveys suggest that the position will only get worse.
According to Marc Bush, head of research and public policy at Scope,
“if we take moderate level needs, there are 36,000 people within the system of working age who, if the reforms go through as they are currently set, would fall out of the care system…if you do not meet need early, people's needs escalate and the costs escalate.”
Mr Bush’s evidence is in paragraph 186 of the Joint Committee’s report. Indeed, the Local Government Association has estimated that by 2019-20, 45% of council budgets will be spent on social care. Unless we increase substantially the amount of resources available—
Mrs Moon
There is pressure on people with illnesses and with disabilities if they do not get access to that social care, but should we not acknowledge the wider pressures on their families, who have to fill that gap all too often? That means taking time off from work and reducing the time spent on their leisure pursuits, thereby adding to family tensions.
Grahame M. Morris
That is an excellent point. The role of carers and families is absolutely critical; they are an army of unsung heroes.
We cannot build a quality care service based on driving down the terms and conditions of the people who deliver it. I am very concerned about the increase in the number of zero-hour contracts, through which staff are paid the bare minimum. Such contracts are increasingly being used by private care companies seeking flexibility when meeting short-term staffing needs, and they often lead to job insecurity and a lack of appreciation of workers. We are seeing the fragmentation of social care, driven by the pressure to cut costs, which only places obstacles in the way of quality and of integrating services. Contracting out and privatisation also make it more difficult to have joined-up services, and there is a real risk that local authorities will find it impossible to comply with their new duties.
We should be honest about what the Bill can achieve. It is a framework. It is paving legislation. It will not stop people having to sell their homes to pay for care. Under the existing deferred payment scheme, councils can loan money to people to cover their care costs, which has to be paid back by selling the family home after the elderly person has died. The Government propose something similar, but unlike the current system, interest is charged on the loan. The care Bill will not necessarily cap at £72,000 the costs elderly people actually pay for residential care. As has been said, hotel and other accommodation charges are not covered. Many elderly people in care homes will die long before they reach the cap that is being trumpeted as such a success. It certainly will not mean that pensioners get their care for free if they have income or assets worth up to £123,000. Elderly people will get free care only if they have income or assets under the lower means-tested threshold, which is not being increased and will be £17,000 in 2016.
More widely, the care Bill does nothing to address the funding crisis in social care or to help those who face a daily struggle to get the support they need right now. Elderly and disabled people are facing huge increases in home care charges, which are a stealth tax on the most vulnerable people in society. Few older people are getting their care for free, and more older and disabled people are being forced to pay for more vital services that help them to get up in the morning and get washed, dressed and fed.
We need a far bigger and bolder response to meet the needs of our ageing population: a genuinely integrated NHS and social care system which helps older people to stay healthy and live independently in their own homes for as long as possible. That would truly reinstate the idea of people being looked after from cradle to grave—a worthy extension of Aneurin Bevan’s legacy. Labour’s alternative is integrated, whole-person care, incorporating health, mental health and social care in a truly national health and social care service.
John Glen (Salisbury) (Con)
I welcome the Queen’s Speech, particularly where it promotes the interests of people in our society who work hard, want to get on and recognise that in the long term their well-being is likely to be sustained when they rely more on themselves than on the state.
I want to focus most of my remarks on the Care Bill and on the absence of the plain packaging legislation. Before I do so, I make the observation that the integrity of the Government and their ultimate success will be reliant not so much on what they say on Europe, but on what they deliver on welfare reform and the state of the economy. Thankfully, there was no significant new legislation on welfare reform in the Queen’s Speech, because it is now about the delivery of what we have already brought before Parliament. I am delighted that the Government are listening carefully and working deliberately and carefully through the process of pilots before bringing in fully the welfare reform.
One aspect of that reform, referred to in the Queen’s Speech, is access to benefits for immigrants. It is right that the Government are considering limiting access to housing benefit and health care for people who have not earned the right to it. It is not enough to keep ignoring that uncomfortable truth because we are frightened of being too right wing, too nasty or too unpleasant. The routine experience of people up and down this country is that on the front line, at the point of delivery and at the point of receiving public services, they are too often displaced by people who, apparently, should not have the right to access those services. I am pleased that the Government will address that in legislation.
On the health aspects that are the focus of today’s debate, it is right that the Government have finally introduced the Care Bill, as every constituency MP has been concerned about this issue for many years. In some of our earlier exchanges today, we have, as usual, debated who cut what when. I know that before 2010—or before 2007—there were prolonged periods when this country had significant surpluses of moneys and, despite considerable evidence indicating that reform of the care system was required, nothing was done. I am therefore pleased that the coalition Government have found a way forward.
Some specific details on how the arrangements will work—the interaction with the local authorities, and the timing and practicalities of the cap roll-out—need to be delivered. That requires a spirit of collaboration and constructive engagement, and an examination of the complexity of multiple agencies of government working together to deliver care in circumstances that cannot always be defined by legislation. Too often in these debates we use examples from our constituency case load, which are often emotive and provoke an emotional response, but our responsibility as Members of Parliament is surely to absorb and take on those challenging individual cases, and to work through the different processes of government to see that better outcomes accrue and occur. We must also reflect honestly on the systems that led to those failures, and distinguish between the systems that may have failed and cases where—sadly, unfortunately—human error and individual failures led to dissatisfied constituents.
We must be honest about issues with the NHS, because we need behavioural change and a different appetite among the electorate for public health measures. We also need to take a constructive view about what is affordable with pensions. Therefore, I welcome the single-tier pension, which simplifies a lot of the complexity that has developed in our system.
I am deeply disappointed that the Government have failed to include legislation on plain packaging of cigarettes explicitly in the Queen’s Speech. I completely agree with the speech made by the hon. Member for Barnsley Central (Dan Jarvis). When we have 10 million smokers, when two thirds of those who start smoking do so before the age of 18 and when 200,000 young people start to smoke every year, it is not enough to rely on arguments about the complexity of illegal trafficking.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
The hon. Gentleman is making an important and valid point and we have heard a number of his colleagues making similar points; I suggest that they table an amendment on the issue. If they do so, they might find that a lot of Labour Members support them, and who knows what might happen?
John Glen
I am grateful to the hon. Gentleman for that intervention, but I think we have had quite enough amendments this week.
Nevertheless, the point remains that we cannot rely on a debate about the issues of the illegal production of illicit cigarettes or in the packaging industry; those issues need to be tackled head-on. The core point is this: why does the tobacco industry spend so much money on elaborate packaging? It does so because such packaging works and because it encourages young people to take up the habit of smoking.
In this Chamber, the hon. Member for Shipley (Philip Davies) would usually sit next to me. Fortunately he is not here today, because if he were I am sure he would have intervened. He would have said it should be about freedom to choose. I am sorry, but I do not believe that 16-year-olds faced with massive peer pressure in certain communities genuinely have freedom to choose. It is not enough to say that the Government gain lots of tax revenues. For those individuals and their families, the health implications of smoking are dire. The situation is disappointing and I hope that a private Member’s Bill or another mechanism will be found to address the issue before the end of this Parliament.
James Duddridge
I am persuaded to a degree by my hon. Friend’s argument, and if plain packaging were the solution to eliminate the problem, I would be inclined to vote for it. However, I cannot help but think that there will be something else around the corner, such as a ban on smoking in films or a ban on role models being seen to smoke, and ultimately an absolute ban on smoking. That might well be the right answer, but I am not quite sure where the debate is going.
John Glen
The reality is that smoking is almost unique in its proven health implications: the fact that it is so addictive and the fact that, particularly for young people, the implications for their future health are dire. We cannot just use the “freedom” arguments or ask “Where will the debate go?” to hide from that reality. We have a responsibility to do something about it.
I want to use my remaining speaking time to focus on the issue of rhetoric versus reality and the gap between the two, because I recognise that the election results a couple of weeks ago threw up big issues for my party about how we handle that. That takes me back to what I said at the outset. Most people want a Government who are concerned about the economic well-being of this country, about generating growth, about delivering fairly provided quality public services that not only look after the most vulnerable properly but give incentives to those people who can create wealth and jobs to do so, and about allowing the economy to prosper.
I think it would be wrong to get into a trade-off of rhetoric on the Europe issue, because all the proposed solutions are a long way off. The reality for this Government is that it will be a slow, hard and difficult process, but it is one that is well set out in this Queen’s Speech, with practical, sensible measures that are likely to win support over the course of the remainder of this Parliament.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
It is appropriate that I should follow the hon. Member for Salisbury (John Glen), as he made an important point about the economic aspects of the Queen’s Speech, and that serves to remind us that health is not just a matter of hospitals, doctors, nurses and medicine—important though all that is—but it is also affected by Government policies in other areas. I disagree with the hon. Gentleman in this respect, as I am very concerned that many of this Government’s policies are, directly or indirectly, having a damaging effect on the health of many millions of people in this country.
The first of those effects is illustrated by the growth in real poverty, which has led to the mushrooming number of food banks throughout the UK. I now have two food banks operating in my constituency, along with other sources of free food for those in need, and that situation is replicated in every constituency across the land. The food provided through the food banks is healthy food that is beneficial to the diets of those who receive it. In most cases food is provided only for a limited period, however, which suggests that at other times those who depend on food banks do not get decent meals and a decent diet, and often go hungry. Evidence from the Trussell Trust suggests that about one third of the people who are dependent on food banks are children, and we all know that those who have a bad diet at the beginning of their life can face serious lifelong consequences.
I acknowledge that the reasons why people go to food banks are complex. There is a world economic crisis and increases in food prices at a worldwide level, so I do not pin all the blame on this Government’s policies. No doubt in the current global circumstances we would have seen an increase in food banks under any Government. I would, however, have liked to have heard some mention in the Queen’s Speech about policies that would serve to tackle child poverty and the scandal of so many in our society being dependent on food banks.
We might have reversed policies such as the 1% cut in many benefits that passed through Parliament not long ago. Another broader area that has a direct impact on health is poor-quality housing and lack of housing provision. The situation has been exacerbated by the bedroom tax. There cannot be a single MP on either side of the House who has not been contacted by constituents who are suffering directly as a result of the introduction of the bedroom tax. I shall not comment on the tragic case recently reported in the media and which was mentioned earlier, but I know of plenty of cases in my constituency where people’s lives have been turned upside down by the bedroom tax. It often has a serious effect on their mental health and sometimes takes away their ability to work, which in turn affects their ability to feed themselves and their family and to meet their energy bills. So, too, does the fact that the bedroom tax leads to people losing benefits, but there was not a word in the Queen’s Speech to amend a policy that has increasingly been shown to be indefensible.
The housing problem is not just about homes being under-occupied. Many of us know from our own constituencies about the problems of poor-quality housing, overcrowded housing and lack of affordable housing. The Queen’s Speech did not give sufficient priority to addressing that. Yes, there were policies designed to support the housing market, some of which will have benefits as regards affordable housing, and I welcome that. However, the Government still seem desperately keen to promote a housing boom at the higher end of the market, because houses worth up to £600,000 will be eligible for their programme. Again, that is an example of the wrong priorities when the real priority should have been to tackle poor-quality housing, and not to force people into the terrible situation in which many find themselves because of the bedroom tax.
Another area where wider policies have a direct impact on health is employment. We all know that health and being in a job go together. In many cases, being unable to work or being in insecure employment is likely to be extremely damaging to health. I was taken by the comments of my hon. Friend the Member for Easington (Grahame M. Morris) about workers on zero-hours contracts in the health service. That is bad not only for the health service but for the workers whose health may be directly affected by the insecurity of being in such a situation.
No matter what the official employment figures say, and they are bad enough, the reality of unemployment, low employment and under-employment is underestimated. In all our constituencies, people are working part-time when they do not want to and being forced to take large wage cuts. We have the spectre of people working on zero-hours contracts, returning to a day-labourer system where people do not know from day to day whether they will be in employment. If anyone thinks that that does not have direct effects on people’s health and well-being, they are deluding themselves. If we do not tackle these issues, there will be increasing health problems for many people in our society. That is why Labour’s job-creation programmes, which we will discuss in later debates on the Queen’s Speech, are so important. We also need international action, with a change in direction to get away from the austerity programmes that are causing so many problems and so much unhappiness not only in our country but throughout the rest of Europe.
Toby Perkins
The link between health and unemployment was addressed very well, under the previous model of the NHS, by Derbyshire primary care trust, which supported and funded programmes to get the long-term unemployed into work. This does not seem to be happening as much in the restructured NHS. Will my hon. Friend expand on the importance of getting the long-term unemployed into work and the impact that joblessness has on their health?
Mark Lazarowicz
My hon. Friend makes an important point. Measures to address long-term unemployment and child poverty, to tackle housing inequality and poor housing provision, and to provide more security in jobs and housing and in other ways are some of the biggest things that could have been done to promote health throughout our country.
I wish that Conservative Members who have spoken in the debate on the Queen’s Speech and the debates leading up to it had shown as much concern and passion about these issues as they have with the in-fighting on European issues that has taken up so much of the internal debate within their party. I accept that in the past few hours we have heard mainly constructive and thoughtful speeches on health issues by Conservative Members, but I suspect that that is simply because the ones who are doing the plotting and the in-fighting are doing it elsewhere. It is a pity that more Conservative Members have not paid attention to the issues that the people in our country want addressed—health, employment and housing. In those areas we need a significant change in direction from the Government which the Queen’s Speech did not give us.
Sarah Champion (Rotherham) (Lab)
I would like focus on two groups of people who are not adequately covered in the Care Bill: young carers and the disabled.
I recently had the pleasure of spending time with a remarkable group of Rotherham young carers who are supported by Barnardo’s. Because of funding limitations, Barnardo’s is able only to work with young people between the ages of eight and 18, and only 100 in a year. Sadly and shockingly, Barnardo’s estimates that 3,000 young people are carers in Rotherham alone. It has on its waiting list children as young as six who are counting down the days until their eighth birthday when they can get some support.
The young carers asked me to make colleagues aware of their plight. Hannah told me that the main thing she wanted was recognition for the work she did. She understands her mum, who suffers from severe depression, better than anyone. Hannah wants her experience to be fed into her mum’s assessments. As she said,
“they trust me to look after her but they don’t trust my opinions.”
When Hannah calls the medics to say that her mum is deteriorating, she should be taken seriously. Instead, young carers have to contact their Barnardo’s worker to lobby on their behalf, because they are not recognised by the authorities.
I welcomed many of the measures in the draft Care and Support Bill, but they are limited to adults caring for adults. The Care Bill represents a missed opportunity to improve the rights of all carers, including adults caring for children and young carers. The young carers I met know that, because of them, their parents do not have to stay in hospital, a mental institution or a care home. They know how much their help saves the Government. On their behalf, I urge the Minister to make sure that the Care Bill gives young carers a little support in exchange.
Consolidating provisions relating to adult carers in previous Bills will create neat, codified legislation, with
“clear legal entitlements to care and support”
for adults, while young people will be left with piecemeal, leftover legislation that practitioners will struggle to navigate. This is highly problematic. As I have said, workers often need to act as advocates for young carers and protect their rights. This area has long faced the challenge of a confusing legal framework, and the Bill has the potential to make matters worse. It appears to provide a clear picture of carers’ rights, while in effect excluding some of the most vulnerable carers.
I recognise that the bulk of the changes needed to protect young carers need to be made in the Children and Families Bill, but changes could also be made in the Care Bill. In order to prevent inappropriate caring, it is important that measures are put in place to ensure that adults’ needs are met and that young people with potential caring roles are identified as part of an adult’s assessment. Not only would that recognise the important role that young carers play, but it would allow their needs to be acknowledged formally, forcing existing services to be more accommodating. For example, all of the young carers I met faced challenges at school, with inflexibility on late homework, missing school and the need to call home during the day. If young carers are formally recognised as part of the assessment process, that could be fed through to the school and teachers could be notified of the young person’s needs, allowing them to be better supported.
On the Bill’s implications for those with disabilities, my office has seen a marked increase in the number of cases of disabled people struggling to make ends meet. The introduction of the employment and support allowance has been confused and poorly administered. I have dealt with numerous cases of vulnerable people being placed in unnecessarily stressful situations and left financially worse off by this Government’s reforms. Such cases already make up 10% of my overall case load. The abolition of incapacity benefit will soon be followed by the abolition of the disability living allowance and the introduction of personal independence payments, meaning that disabled people are being squeezed at an unsustainable level.
John Woodcock
My hon. Friend is making an important speech. Does she share the concern of my local disability association that the problems with the ESA benefit and how it has been reassessed have led to grave worries about the introduction of personal independence payments?
Sarah Champion
I thank my hon. Friend for yet another example of the extreme stress that people are being put under and the mismanagement of this entire process. The pressure of the burden being placed on them is intolerable.
I am extremely concerned that the Government’s Care Bill will put further pressure on that vulnerable group. The key issue for social care reform is eligibility. A third of social care users are working-age disabled people. The Bill will not improve the social care system for them, and 105,000 disabled will be shut out from receiving the social care that enables them to live their lives.
My hon. Friend the Member for Easington (Grahame M. Morris) mentioned statistics from Scope that make depressing reading. Four in 10 disabled people who receive social care support say that it does not meet their basic needs, including eating, washing, dressing and just getting out of the house. A third of working-age disabled people say that cuts to their social care have prevented them from working or volunteering.
The Bill appears to focus on the elderly and does not address the care crisis facing disabled people. For those working-age disabled people who do not meet the eligibility threshold, the £72,000 cap on care costs will not apply. They will continue to need to meet the cost of their social care. If an individual’s care needs increase later in their working life to the point that they become eligible for social care, the cap will not take into account the contributions they have already made to meet their care needs.
I agree that the introduction of a national eligibility threshold is a step in the right direction. Alongside a new assessment system, I hope that it will end the postcode lottery in care provision. However, it is vital that the threshold is set at a level that ensures that working-age disabled people receive support to meet their basic needs.
The Government spend £14.5 billion a year, or 2% of public expenditure, on adult social care, which includes older people’s services. However, it was estimated by the Dilnot commission that social care services are under-resourced by £2 billion. Those services are being further squeezed by the pressure of an ageing population and a 33% reduction in local council budgets. Local authorities are therefore dramatically under-resourced for the demands that are placed on them. As a consequence, they have been raising the threshold at which disabled people become eligible for support. Recent surveys suggest that almost half of local authorities plan to reduce spending on care services for adults, which will hit those with learning difficulties and those with disabilities.
Unless there is sustainable funding for adult social care, the situation is likely to get worse. The upcoming spending review must be used to secure more long-term funding for social care services to underpin the Care Bill. The Government must not lose sight of disabled people and young people as the Bill progresses.
Jim Shannon (Strangford) (DUP)
Will you confirm, Mr Deputy Speaker, that I may speak until 9.40?
Mr Deputy Speaker (Mr Lindsay Hoyle)
The hon. Gentleman has eight minutes, and if two interventions come along that will give him 10 minutes.
Jim Shannon
I am sure that my colleagues will intervene.
I thoroughly enjoyed the opening of Parliament. It always fills me with a sense of optimism to look forward to another Session and what we can do. As the DUP Health spokesman, that optimism was dulled when I noted, with some dismay, that the Government had not included standardised cigarette packs in the Queen’s Speech. It would have been great to see essential measures on that.
I am reminded of the dance, the hokey-cokey: they are in for packaging, they are out for packaging, they are in for packaging, they are out for packaging, and they swing it all about. I cannot do the hokey-cokey, but I know who can. The Government can do the hokey-cokey and nobody can do it better. Bruce Forsyth often says, “Didn’t they do well?” If he ever retires, there are two hon. Members who will be vying for his position.
I am encouraged that some hon. Members have had the courage of their convictions. The hon. Member for Salisbury (John Glen) has taken a clear stance on plain packaging, as have other Members. I appreciate that.
I have received many e-mails from constituents on this issue. One stated:
“Since tobacco advertising became illegal in the UK, the tobacco companies have been investing a fortune on packaging design to attract new consumers. Most of these new consumers are children with 80% of smokers starting by the age of 19.”
Other Members have made it clear that we must stop smoking being an attraction for young people. About 200,000 children as young as 11 years old are smoking already and the addiction kills one in two long-term users. A recent YouGov poll showed that 63% of the public back plain packaging and that only 16% are against it.
Last week, I asked the Prime Minister whether he would introduce plain packaging. He said:
“On the issue of plain packaging for cigarettes, the consultation is still under way”.—[Official Report, 8 May 2013; Vol. 563, c. 24.]
That is not exactly accurate because the standardised packaging consultation started on 16 April last year and ended nine months ago on 10 August 2012. I am keen to hear from the Government just what is happening.
Chris Ruane
I am just doing Mr Deputy Speaker’s bidding by intervening to give the hon. Gentleman an extra minute. When plain packaging was introduced in Australia, the tobacco industry fought the longest, dirtiest battle it had ever fought against any Government proposal to curb smoking. Why does the hon. Gentleman think that was? It threatened that triads would come over from China and take over Australia, but that never occurred. Why did it threaten so much and fight so hard? Is he pleased that it lost?
Jim Shannon
I thank the hon. Gentleman for his intervention. I perceive and am of the opinion that companies saw such measures as a loss to their profit margin, and we would like to see what happened in Australia happen here.
The former Health Secretary, the right hon. Member for South Cambridgeshire (Mr Lansley),was quoted in the media saying that the Government did not work with tobacco companies as they wanted them to have “no business” in the UK. Has that changed? The current Health Secretary stated that one of his key priorities is to reduce premature mortality. His call to action on premature mortality commits to a decision on whether to proceed with standard packaging. He also stated:
“Just because something is not in the Queen’s Speech doesn’t mean that the Government cannot bring it forward in law.”
Even at this late stage, may we hear a commitment to bringing forth such a measure in law? If we do, that will be good news and we will welcome it.
Some 10 million adults smoke in the UK and more than 200,000 children start smoking at a very early age. More than 100,000 people die from cancer-related smoking diseases across the UK, which is more than from the next six causes of preventable death put together. The immensity of the number of deaths from smoking cannot be underestimated. Many Members have spoken about that, and I believe the fact we are all saying the same thing is something we should underline.
We cannot remove people’s choice to smoke—that is a decision to be made by any adult—but we can, and must, ensure that everyone knows they are doing harm to themselves and those around them. Evidence that standardised packaging helps smokers quit and prevents young people from taking up the habit and facing a lifetime of addiction is clear, and we should encourage more people to stop smoking and not to become addicted.
Frank Dobson
Does the hon. Gentleman agree that the argument sometimes put by defenders of the tobacco industry—usually paid defenders—is that people are exercising free choice? In fact, they are not exercising free choice because they are addicts who took up the addiction when tobacco companies persuaded them to smoke when they were teenagers.
Jim Shannon
I thank the right hon. Gentleman for that intervention and for clearly underlining the stand we are all taking on this issue. We hope that Ministers will respond positively. I believe that plain packaging is a major step in this informational and educational journey to end smoking, and I ask the Minister to commit today to begin that journey that has been planned for so long.
Another disappointment in last week’s speech was the lack of reference to the minimum pricing of alcohol, although there has been some indication that there may be a change of heart, which we hope will be the case. Last week I was sent a copy of a study containing numerous sources, and there are certainly some shocking statistics. Its findings, among other pertinent points, demonstrate that alcohol is 45% more affordable today than it was in 1980. Men and women can currently exceed the recommended low-risk daily drinking guidelines for £1. That is hard to believe in this day and age, but it is the truth. Data from Canadian provinces suggest that a 10% increase in the average minimum price would result in about an 8% reduction in consumption, a 9% reduction in hospital admissions, and—this is the big one, Mr Deputy Speaker—a 32% reduction in deaths caused wholly by alcohol, which is even higher than the figure suggested in the Government’s impact assessment.
Alcohol Health Alliance UK stated:
“The case for introducing minimum unit pricing is clearer than ever, yet despite committing to the principle of minimum unit pricing, it appears that the Government are going to drop the measure from their alcohol strategy.”
Perhaps Ministers will comment on that, but I sincerely hope it is not the case. Minimum pricing of alcohol is not to ensure that those on low incomes cannot have a drink, but to ensure that people of all incomes are aware how much they are drinking and conscious of the health implications of excessive or binge drinking. When it comes to minimum pricing for alcohol, we can all take note and take advantage of it.
Every year there are 1.5 million victims of alcohol-fuelled violence in the United Kingdom, and it is clear that community safety is threatened by the misuse of alcohol. Police superintendents have advised that alcohol is present in half of all crimes committed, and a 1990 study for the Home Office found that growth in beer consumption was the single most important factor in explaining the growth in crimes of violence against the person. The figures are clear. Statistics show that 37% of offenders had a current problem with alcohol; 37% had a problem with binge drinking; 47% have misused alcohol in the past; and 32% had violent behaviour related to their alcohol use. When we mix young people, who have not had time to develop their moral standards and ideals, with alcohol, we have a generation who are fuelled by the desire to live in the moment, with no thought of the consequences. Alcohol changes personalities, and young people are only learning who they are. Adding alcohol to the mix means that they will never have a good understanding of who they are. A minimum price for alcohol will lessen the number of young people who drink copious amounts of it. Hopefully, it will also mean a lessening of crimes that are aggravated or exacerbated by alcohol.
My third point is on diabetes, which is a ticking bomb in our society. We had a debate on it in Westminster Hall, when the right hon. Member for Leicester East (Keith Vaz) made the point about diabetes and obesity among children. The figures are overwhelming. The United Kingdom of Great Britain and Northern Ireland diabetes strategy ended in April, but perhaps the Minister can tonight commit to its continuation. I believe the strategy was working. Had it not had an effect, the figures would be much worse. Even given the strategy, the number of people living with types 1 and 2 diabetes has increased by 33% in Northern Ireland, 25% in England, 20% in Wales, and 18% in Scotland. The numbers are rising. A commitment to the continuation of the strategy would be helpful. The statistics are scary—3.7 million people in the UK are diagnosed with type 2 diabetes. However, we are talking not only about statistics, but about people’s lives. We need to prevent and control as well as we can.
I am aware that the health portfolio is not an easy one. Everybody needs something urgently. I understand the restrictions that apply, but does the Minister understand that the three issues that I and others have raised affect every corner of the United Kingdom of Great Britain and Northern Ireland? I believe we could have reform on those issues if the Government put their hand to the plough and disregard all but the health and safety of our population.
Liz Kendall (Leicester West) (Lab)
It is a great pleasure to speak at the close of the debate after so many passionate and thoughtful speeches from hon. Members on both sides of the House.
My right hon. Friend the Member for Stirling (Mrs McGuire) and the hon. Member for Truro and Falmouth (Sarah Newton), who is not in her seat, rightly stressed that, although many debates on the future of health and care services focus on the needs of older people, social care is critical to adults of working age. My hon. Friends the Members for Bridgend (Mrs Moon), for Worsley and Eccles South (Barbara Keeley), and for Rotherham (Sarah Champion), spoke of the vital role of unpaid family carers, who are the bedrock on which the care system rests. They spoke particularly of the needs of young carers, who often feel that their childhood is being taken away from them by their caring responsibilities.
My hon. Friends the Members for Birmingham, Selly Oak (Steve McCabe), for Easington (Grahame M. Morris) and for City of Durham (Roberta Blackman-Woods) spoke of the growing crisis in social care funding, the increase in care charges that family members must pay, and the pressures on services and support. The hon. Member for Stafford (Jeremy Lefroy) gave, as ever, a thoughtful speech on how we might pay for NHS and social care in future. There will be different views on his proposals, but he made, as ever, a thoughtful contribution.
My hon. Friends the Members for Stretford and Urmston (Kate Green) and for Barrow and Furness (John Woodcock) rightly said that we have a duty to provide decent compensation and care for mesothelioma sufferers. My right hon. Friend the Member for Rother Valley (Mr Barron), my hon. Friends the Members for Vale of Clwyd (Chris Ruane), for Sheffield Central (Paul Blomfield), for Gateshead (Ian Mearns) and for Barnsley Central (Dan Jarvis), and the hon. Members for Salisbury (John Glen), for Mid Derbyshire (Pauline Latham) and for Strangford (Jim Shannon), spoke with passion about the Government’s failure to introduce standardised packaging for cigarettes to reduce premature deaths from smoking in this country. I hope the Government think again on that. Finally, my right hon. Friend the Member for Cynon Valley (Ann Clwyd) once again gave a direct voice to people who have suffered from unacceptably poor standards of care in the NHS. My right hon. Friend and all of us here are absolutely determined to stamp those out.
I want to focus on the measures in the Queen’s Speech on social care. The current legislation on adult social care is complex and confusing, and it needs reform. That is why the previous Labour Government set up the Law Commission review, which has led to many of the measures in the Care Bill. We support the new rights that the Bill contains; they build on the rights that Labour introduced in government, such as the right for family carers to request flexible working.
During the Bill’s passage, we will work to ensure that older and disabled people and their family carers get the best possible deal. We will seek to make amendments where there are serious omissions, such as the needs of young carers, or where improvements should be made, such as introducing free social care at the end of life. Organisations such as Sue Ryder and Macmillan Cancer Support have shown that such care can give people more choice about the place of their deaths and save taxpayers money by reducing the need for more expensive hospital care.
Those new rights, however welcome, risk being meaningless if people cannot get the services and support they need on the ground. That is the reality that hundreds of thousands of people now face. The 70 organisations that make up the Care and Support Alliance are clear that the Bill will not solve the crisis now engulfing social care. They warn that there is now a real danger that most people—not some, but most—will not get the help they need just to get up, dressed and out of the house as councils struggle to cope with swingeing budget cuts and growing demand.
Ever tighter eligibility criteria for council support mean that fewer older and disabled people get the help that they desperately need. Let us be clear. People talk about providing care and support only for people with substantial needs but not for those with moderate needs, but those latter needs are serious. I have seen in my constituency that “substantial needs” involve only people with terminal illnesses or who are incontinent or blind. There are many other very high levels of need. We are missing out support for those who desperately need it.
Even when people do qualify, they routinely face 15-minute home visits—barely enough time to get an elderly, frail, vulnerable person with dementia up, washed, dressed and fed. People wait a long time to get basic help such as grab rails and stairlifts so they are without the support for basic preventive care that helps people to live independently at home, which is what they and their families desperately want. Family carers are left struggling without the breaks that they need just to keep going or even a bit of emotional support and advice on the phone, as local voluntary organisations cut back and close.
The tragedy is not just that older and disabled people and their family carers suffer; it is that taxpayers end up paying more for the price of failure. Elderly people have to go into more expensive hospitals or residential care when they do not need to, because they cannot get the support they need in the community or at home. One in three family carers have to give up work or reduce their hours because they cannot get the help they need to care for their loved ones. Their own health suffers, which puts more pressure on the NHS, and their income suffers. The Treasury loses more than £5 billion a year in lost tax revenues and benefit bills because those family carers have to give up work.
The Government remain in complete denial about the scale of the care crisis we now face. They have been repeatedly warned by local councils about what the cuts in budgets and pressures on services mean. Councils are warning that in 15 years’ time they will not be able to provide the services that members of the community want and like—the libraries, leisure services and swimming —because of the pressures on local council adult social care budgets. The Government refuse to listen.
The Government are not being straight with people about their future plans either. The Prime Minister, Deputy Prime Minister and Health Secretary have repeatedly said that no one will have to sell their home to pay for their care. That simply is not the case. In future, all local authorities will have a duty to offer deferred payment schemes, lending people money to pay for their residential care. However, the loans will have to be paid back, after the elderly person has died, by selling the family home. The Government’s new scheme will charge interest on the loans, unlike under the current system, so people will lose even more of their family home than they do now. However, they have not told the public that they will be paying more, with that interest, under their new scheme. Will the Minister now come clean and tell families how much interest they will be charged? Will the Minister tell us how much interest families will be charged? Will he give a straight answer? He is not going to now. I hope he will when he responds to the debate.
Ministers also repeatedly claim that the Bill will cap the amount people are charged for their care at £72,000. The Health Secretary was at it again when he was at the Dispatch Box today, claiming that the Bill sets “a finite maximum cost” that individuals will have to pay. Again, that simply is not the case. The so-called cap on care costs is based on the standard rate local councils would pay for their residential care in their area—approximately £480 a week nationally—and not what people actually pay for their care. The 125,000 people who fund their own care fully, and many more who pay top-ups, will face far higher bills, particularly in the south and east of England. Government Members should take heed of that point, because if they tell their constituents that there will be a finite cap on their care costs, they will be sorely disappointed. The extra costs, above and beyond the standard rate that councils pay, will not count towards the cap. That means that older people will think they have reached it when they have not. In reality, it will take four years to hit the cap, yet the average length of stay in a care home is just over two years, and a quarter of people in care homes die after just a year. In other words, most people will be dead years before they reach the cap. Even if they are still alive, the state will pay only the standard council rate, leaving self-funders no choice other than to either leave the care home and move somewhere cheaper, or to pick up the extra costs.
The Government have failed to explain that people will not get their care for free if they have income or assets worth up to £123,000, the new increased upper means-tested limit. They will get care for free only under the lower means-tested limit, which is not being increased, and will be £17,500 in 2017. In between, there is a sliding scale of support. However, the way the means test works will mean that pensioners on average incomes—those who have worked hard and saved for a modest second pension of, say, £80 a week—will not get any council support, even with the increased upper means-tested limit, because councils calculate it by determining a notional income based on the capital in people’s homes. That, combined with the average pensioner income, takes them above the level at which they would receive council-funded support.
Government Members look surprised. That is unsurprising, as their Ministers have not spelled out the reality of the Government’s plans. Ministers should be straight about what their plans really mean, so that older and disabled people and their families can plan for the future properly. Instead, they tour the TV studios and make statements to this House giving false reassurances that are simply not borne out by the facts. We all know that people are fed up with politicians who say one thing and do another: claiming that people’s care costs will be capped when they will not, and claiming that raising the means test will help pensioners on average incomes with modest second pensions when it will not. I warn Government Members that that will not help to restore faith in politics or politicians, or help us to plan properly for the future.
Things could and should have been so different. Rather than forcing through their damaging and distracting backroom NHS reorganisation, the Government should have spent the last three years laser-focused on the service reforms people desperately need, shifting care out of hospitals and into the community and more towards prevention. Instead of diluting Dilnot’s proposals and then misrepresenting them to the public, they should have engaged in meaningful cross-party talks to agree a system that helps those on low and modest incomes, not just those predominantly at the top. And instead of driving greater fragmentation of NHS care services, jeopardising some of the best examples of integrated care, such as in Torbay, they should have adopted Labour’s plans for whole-person care, a single service with a single budget, funded through a year of care, that would shift the emphasis out of hospitals and into the community and result in better care for people and better value for money for taxpayers too.
Meeting the challenges of our ageing population is one of the biggest issues facing our country and society. We need a far bigger, bolder, straighter, clearer response, which this worn-out, divisive and divided coalition will never provide.
The Minister of State, Department of Health (Norman Lamb)
I thank hon. Members for their contributions to the debate.
Despite all the knocks that Opposition Members like to give it, the NHS is performing remarkably well, with 3.3 million more out-patient appointments, more than 500,000 operations, 1.5 million more diagnostic tests, the number MRSA infections halved and record low numbers of people waiting more than a year for their operations—just 665 people, down from 18,000 in 2010. These are real achievements for the NHS, and we should applaud and pay tribute to a really remarkable work force who have achieved these things despite tough economic times. The last Government rightly set in train £20 billion of efficiency savings, and those savings are being achieved despite the tough challenges.
Despite the doom and gloom heard during the debate, some brilliant things are happening in social care, including in some Labour authorities. In Leeds and Barnsley, for example, great things are happening, with people looking at new ways of doing things and redesigning services, recognising that times are tough and that, even under a Labour Government, they would face the same challenges. I recognise, however, that the system is facing real pressures, so it is disappointing that the Opposition, including the shadow Secretary of State and shadow Minister, the hon. Member for Leicester West (Liz Kendall), sought to polarise the debate by making exaggerated claims about the state of the NHS, when we all know the truth, which is that pressures are growing and have been for a long time. We have people living with long-term conditions, often for many years, and with a mix of mental and physical health problems. Those are the difficult cases sometimes clogging up our A and E departments, so let us have a mature debate about how we deal with the challenges.
We have a completely fragmented system and we are not spending money effectively to achieve the best possible care. Mental health is institutionally entirely separate from physical health, health care is separate from social care, and primary care is separated from hospital care. The whole urgent care system is under significant pressure. [Interruption.] I tell the shadow Secretary of State that on some of these issues we in fact agree more than he would sometimes like us to believe. The system is dysfunctional and we have to change it. We have had 4 million more people visiting A and E since the disastrous renegotiation of the GP contract by the last Labour Government. The hon. Member for South West Devon (Mr Streeter) talked about the significant pressures on A and E. Let me reassure him that Monitor and NHS England have issued a call for evidence on how the tariff system is working, with a view potentially to reforming it.
Liz Kendall
Does the Minister agree that in 2009, five years after the GP contract was agreed, 98% of patients were seen in A and E within four hours?
Norman Lamb
What I would say to the shadow Minister is that since 2010, 1 million extra people have visited A and E. These are real pressures and we all have to think about how we manage them. Surely the way to do that is to try to improve people’s care so that they avoid ending up there in the first place. Tomorrow I will announce a decisive shift towards integrated care, which will be part of a major strategy for vulnerable older people, whom the Secretary of State talked about earlier. We have to focus on preventing people’s health from deteriorating, stopping the crises that end up with people in A and E despite the system’s best efforts.
Several hon. Members referred to pressures in social care, including the hon. Member for City of Durham (Roberta Blackman-Woods) and my hon. Friend the Member for Bradford East (Mr Ward). The Government have done what they can. We have put £7.2 billion extra into social care and local government to support the system through these difficult times because of the local government settlement, but we all know that things have to be done differently. The Care Bill is totally consistent with that approach: it focuses on prevention, co-operation, integration of care and spending money more effectively to improve care for patients. I was pleased that the hon. Member for Easington (Grahame M. Morris) welcomed the Bill, as did the hon. Member for Salisbury (John Glen) and many others. I pay tribute to my right hon. Friend the Member for Sutton and Cheam (Paul Burstow) for his work as Minister and subsequently as Chair of the pre-legislative scrutiny Committee. He has done a lot of brilliant work to highlight the issues that the Bill deals with.
It is hard to exaggerate just how badly the Care Bill is needed. Previous legislation is now hopelessly outdated and almost irrelevant to the needs of today’s society. Tinkering around the edges was keeping the system afloat, but no more than that. The shadow Secretary of State was dismissive of the value of the Bill, but it will be a big social reform—one of which this coalition Government should be proud. The new Care Bill will reform an antiquated, paternalistic system, improve people’s experience of care and establish both health education England and the health research authority as non-departmental, stable, independent public bodies. The Bill will pool together threads from more than a dozen Acts into a single, modern framework for care and support, but it is far more than a mere compilation. The Bill will fundamentally reform how the system works, prioritising people’s well-being, needs and goals, so that they no longer feel they are battling against the system to get good care.
Barbara Keeley
The Minister is back on his point about the Bill creating a single statute, but it will not do that for young carers, who will be left with the protection only of the private Member’s Bills I mentioned earlier. It is not good enough for young carers to face a higher threshold than other carers before their needs are assessed. That has to be looked at. The children’s Minister has let the House down on this issue; I hope that this Minister will not do that.
Norman Lamb
I was coming on to pay tribute to the hon. Lady for the work she has done. I absolutely agree with her that we need to get this right. We have the juxtaposition of two Bills, dealing with children on the one hand and adult social care on the other. Earlier I made a commitment to meet the children’s Minister; I had an opportunity to speak to him briefly when he was in the Chamber earlier. I am also meeting the hon. Lady later this week. I am committed to doing everything I can to get this right, and to ensure that young carers are not let down.
The Care Bill also highlights the importance of preventing and reducing ill health and of putting people in control of their care and support. This will involve the right to personal budgets, taken as a direct payment if the individual wants it, and putting people in charge of their care and of how the money is spent. This will put carers on a par with those for whom they care for the first time. The hon. Lady has consistently argued her case, and I am determined that we should get this provision right. The hon. Member for Rotherham (Sarah Champion) also made some powerful points on the subject.
The Bill will also end the postcode lottery in eligibility for care support. My hon. Friend the Member for Totnes (Dr Wollaston), the hon. Member for Easington and others raised concerns about the level of the eligibility. That question will obviously have to wait until the spending review, but I point out that if we were to set it at moderate need, the cost attached would be about £1.2 billion. All hon. Members need to recognise that this is difficult, given the tough situation with public finances. We also need to do longer-term work on developing a more sophisticated way of assessing need and providing support before people reach crisis point.
The Bill will refocus attention on people rather than on services. It will bring in new measures based on the Francis inquiry, ushering in a new ratings system for hospitals and care homes, so that people will be able to judge standards for themselves. The hon. Member for Walsall South (Valerie Vaz) criticised the idea of appointing a chief inspector of hospitals, but I disagree with her. It will be really important to identify where poor care exists and to expose it so that improvements can be demanded without fear or favour. The chief inspector will be able to do just that. It will also be really important to celebrate great care, so that those people in the health and care system who are doing everything right can be applauded and recognised for the work they are doing.
Frank Dobson
Does the Minister accept that a generalised rating for a hospital is not going to be valuable because, within one hospital, some departments might be doing a brilliant job while others are not? It would be stupid if an overall rating persuaded people not to go to a particular hospital for treatment if the specialty they required was being practised brilliantly.
Norman Lamb
I disagree. We brought in Jennifer Dixon of the Nuffield Trust to advise on this matter. There will be ratings for specific services within hospitals to identify areas of great care, but the single rating will give the hospital the incentive to bring up to a proper standard those areas that are falling short, and that will be a good thing.
Norman Lamb
I want to make some progress; I am conscious of the time.
The Bill will introduce a single failure regime, so that, for the first time, a trust can be put into administration because of quality failure as well as financial failure. Until now, it has been only the finances that can put a trust into administration. This Government recognise that quality failure is just as important, if not more so, and that such failure must carry consequences.
The stories recounted by the right hon. Member for Cynon Valley (Ann Clwyd) and the hon. Member for Bridgend (Mrs Moon) reinforce our determination to make improvements and to ensure that people get the best possible care. I again pay tribute to the impressive work carried out by the right hon. Lady, and I thank her for her work on complaints procedures. The hon. Member for Mid Bedfordshire (Nadine Dorries) also talked about the importance of compassion in good nursing care.
The Bill will make it a criminal offence for providers to provide false and misleading information. My hon. Friend the Member for Stafford (Jeremy Lefroy), who has done great work representing his constituents in the most honourable and responsible way, drew our attention to the importance of mortality statistics being accurate so that we can rely on them. Alongside this Bill, we will introduce the statutory duty of candour—something of which I am personally proud. It does not require primary legislation, but the Government will introduce it.
The funding of care is to be reformed so that there will be a cap on the care costs that people will pay in their lifetime. This is long overdue. Reform has been in the long grass for too long. Several hon. Members, including the hon. Members for Worcester (Mr Walker), for City of Chester (Stephen Mosley) and for Lancaster and Fleetwood (Eric Ollerenshaw), made the point that people will no longer have to sell their homes during their lifetime to pay for care. So often people have had to sell their homes in distress at the moment they go into a care home. When they cannot organise their affairs properly, they have to sell up to pay for care. No longer will that be the case. They can delay all those issues because of the right to deferred payments.
It is this coalition Government who have bitten the bullet on a very important reform. I am very proud of the fact that we are doing this, introducing a long overdue reform. Andrew Dilnot himself has strongly supported the Government’s action. That is happening together with a very significant extension of support—I take on board what the hon. Member for Leicester West said—to help people of modest means with their care costs. Each one of those measures would be significant by themselves. Together, they provide real optimism that we can shake off the shackles of the past and look towards the future, not with fear, but with optimism. The Opposition are wrong to dismiss the importance of this Bill. They should recognise just how much it could improve the lives of some of the most vulnerable people in society.
Norman Lamb
I am going to conclude.
We are two thirds of the way through this Parliament and we have already addressed big challenges that were ignored during Labour’s three terms in office. We have been and will always be 100% committed to an NHS that is not satisfied with mediocrity, but is always searching to be better, more focused, more helpful than ever before. Society is changing, drug costs are increasing and expectations are higher. The NHS and the social care system must change to meet those challenges and we are helping to make that happen, safeguarding the NHS now and in the future.
Ordered, That the debate be now adjourned.— (Mr Swayne.)
Debate to be resumed tomorrow.
Cleveland Fire Authority
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
First, I thank you, Mr Speaker, for giving me the opportunity to have this important Adjournment debate.
I am sure that hon. and right hon. Members—at least those on the Opposition Benches—are acutely aware of the financial squeeze being applied to their fire and rescue authorities by central Government. Indeed, two years ago, my hon. Friend the Member for Hartlepool (Mr Wright) raised the point that Cleveland’s government settlement was the second worst in the country. However, I fear that many Members and the public might not be aware of this Government’s support, both financial and political, for proposals to take front-line fire and rescue services out of the public sector.
The Minister may say that this is not the case and that these services would remain under local authority control. However, the community interest company in the case of Cleveland fire authority, is already registered at Companies House as a separate entity, and managers are stating that an expansion of the existing CIC is the vehicle they intend to use for the formation of a “public service mutual”.
Recently, fellow Cleveland MPs and I met the Cleveland fire authority. Let me make it clear now that the categorical statement from the chair and other members was that they would do nothing that would lead to the privatisation of the service. However, the chief fire officer said that any contract would be subject to competition after the initial contract awarded to any mutual expired. He said at that meeting that the initial contract could be for anything from three to nine years. My hon. Friend the Member for Stockton North (Alex Cunningham) and I have been greatly concerned about what the chief fire officer—along with, if I may add, firm Government encouragement—had proposed.
Alex Cunningham (Stockton North) (Lab)
I congratulate my hon. Friend on securing this important debate. I am sure he agrees that the Cleveland fire chief responsible for the area that probably has the highest fire risk in Europe is ploughing a lone furrow with his proposals, given that other fire chiefs throughout the country are dismissing the mutual model, and firefighters themselves are convinced that competition law would soon open the way for private companies to take them over and put profits—
Alex Cunningham
That took me a little by surprise, Mr. Speaker.
I am expecting my hon. Friend to agree with me that the Cleveland fire chief responsible for the area that probably has the highest fire risk in Europe is ploughing a lone furrow with his proposals, given that other fire chiefs throughout the country are dismissing the mutual model, and firefighters themselves are convinced that competition law would soon open the way for private companies to take them over and put profits before people—for the second time of asking.
Tom Blenkinsop
I think you will agree, Mr. Speaker, that it was such an important point that it had to be made a second time. I shall develop my response to it during my speech, if my hon. Friend will allow me to do so.
In Cleveland, the chief fire officer is exploring the possibility of spinning out the fire brigade. The whole range of fire and rescue services activity, including emergency response, is being examined for the purposes of being “spun out”—to coin a Government phrase. The proposal is being supported by Ministers in the Department for Communities and Local Government and by the Cabinet Office, which is spending over £100,000 on the legal advice that will be necessary for the pursuing of such a restructuring.
Tom Blenkinsop
I will, although Members normally inform the Member who has secured the debate that they wish to intervene.
James Wharton
I thank the hon. Gentleman for his generosity. He was at the same meeting with the fire authority and the chief fire officer that I attended with the hon. Member for Stockton North (Alex Cunningham). We discussed these matters then, and I think that the main concern among all the MPs who were present was to ensure that the employment rights of the people who work for the fire service were protected.
The hon. Gentleman has mentioned the organisations that he thinks are backing this proposal. Will he acknowledge that it is the Labour-run fire authority that is pushing it, and the Labour chairman of the authority who thinks that it is such a good idea?
Tom Blenkinsop
We understand that, under the recent regulations introduced under the Government’s own Health and Social Care Act 2012, the TUPE regulations are worth about 90 days in practice. As for the hon. Gentleman’s claim that the Labour authority is pushing the proposal, the Labour chair actually said “If we were properly funded, we would not even consider going down this route.” As I shall make clear, this is a devolved blame game initiated by Ministers to thrust a mutilation of the concept of mutualisation on the people in Cleveland.
Mr Iain Wright (Hartlepool) (Lab)
That is very good. Very clever, at 10 o’clock at night.
Tom Blenkinsop
Thank you very much.
Many operational issues arise from the proposals, relating to, for instance, local, regional and national resilience. I understand that the Fire Officers Association, the Chief Fire Officers Association and the Fire Brigades Union have raised them with officials in the Department for Communities and Local Government. I shall focus on four specific concerns. The first is the apparent lack of employee support for the proposals, and the uneasy lack of public awareness. The second is the sheer lack of transparency on the part of both the Government and the fire authority's senior officers. The third is the question of whether a spun-out brigade would raise additional revenue. If so—as a caveat—would such a spin-out have an adverse impact on existing local economy arrangements? Finally, and most importantly, I want to discuss the real risk that these proposals could lead to the privatisation of front-line fire services on Teesside.
I am a member of the Co-operative party, and a supporter of co-operatives and mutuals. I believe that if a mutual is to function effectively, it will require the support of its members, and that measures should not be forced on a work force. I am not at all convinced that that would be the case in Cleveland, given that the proposals appear to be very much management-driven. The only letters I have received from firefighters in my constituency about this matter strongly oppose the proposals. Indeed, at a single meeting attended by more than 250 firefighters, approximately half the uniformed service in Cleveland, there was unanimous opposition to them. The FBU, which represents some 85% of uniformed fire service workers, has identified a total lack of demand from staff for employee ownership in the fire sector. Instead, there has been “overt hostility”, except from a “smattering of principal managers”. Indeed, I doubt whether there is support even among principal managers, with 40 English chief fire officers and fire chief executives adding their names to the CFOA’s pre-consultation response, which highlighted major concerns with these proposals.
Even the language used by those promoting the model seems to have been redefined to address the level of employee support. According to the FBU, the model was originally promoted as a John Lewis-style, employee-owned mutual. However, that was only until it became apparent that employees did not want ownership, and nor would they be afforded shares as per that model. The title changed to an “employee-led” mutual, until the vast majority of employees indicated that they did not support the model, and that the only employees who did were a select group of senior managers. The latest title employed is a “locally led” mutual, which in effect acknowledges employee opposition and in doing so employs the term “mutual” as a misnomer.
Interestingly, one senior local manager has indicated that 51% work force support is the threshold required, although FBU legal advice suggests the fire authority has the ultimate say. It is difficult even to assess the extent to which any spun-out fire brigade would in fact be a mutual, with the authority’s senior officers showing a total disregard for transparency in these proposals. In the authority’s meetings, just about everything related to the proposals has been transacted under “confidential business”, making it impossible for me, my hon. Friends, the media or the public to scrutinise them. Although I believe that the authority will be putting out a business plan to public consultation in due course, I fear it may be presented as a fait accompli. It is indeed remarkable that the authority’s officers, prior to spending tens of thousands of pounds of taxpayers’ money, did not consult stakeholders to ascertain the appetite for these proposals or involve them in setting the terms of reference for the creation of any business plan.
The Minister may want to say that the authority’s integrated risk management planning has previously stated that it would explore alternative business models, which it did, but only in the most generic terms. What it has not done so far is consult in detail the people of Cleveland. It has not even indicated whether this would be subject to detailed consultation as part of the ongoing IRMP process.
The Government are doing all they can do to prevent us from analysing these proposals. The fire authority’s senior officers are also providing the bare minimum they can under freedom of information legislation. When my office requested copies of these briefings and their assessment of procurement options for spinning out the brigade, they declined to provide a copy. Amazingly, they argued that it was not in the public interest to do so.
Andy McDonald (Middlesbrough) (Lab)
I note my hon. Friend’s comments about the failure to publish the pre-consultation responses. Does he share my concern that the proposal fundamentally to change the basis upon which our fire and rescue service is delivered is being progressed beneath a veil of secrecy? If the scheme is such a good idea, should it not be subject to open and transparent scrutiny, with comprehensive information being shared among all interested parties?
Tom Blenkinsop
I absolutely agree with my hon. Friend, who himself has had to get FOIs and put those letters of information into the House of Commons Library, due to the lack of transparency.
One of the main genuine reasons why some members of the fire authority are even considering going down this route is their belief that it would mitigate some of the cuts, due to the spun-out body’s ability to bid for private contracts. Also, one of the chief fire officer’s stated aims is job creation. The areas the CFB is exploring are not related to core FRS activity; indeed, these are services currently provided by other sectors. The CFB proposals seek to replace these “others” by providing the same service with their existing work force, thus removing other workers from employment. That in no way can be described as job creation; in fact, it is the very opposite. However, nor do I believe that this would raise any further revenue.
Mr Iain Wright
I congratulate my hon. Friend on securing what is a vital debate for our area. Can he confirm that there is nothing to prevent the community interest company from bidding for existing work? Can he think of anything that, in an effort to secure additional revenue streams, would prevent the current situation from continuing, compared with what a mutual or private model can do?
Tom Blenkinsop
At the meeting mentioned by the hon. Member for Stockton South (James Wharton), the main thrust of the chief fire officer’s argument for seeking a mutual model was to avoid corporation tax. If that is the sole purpose of pursuing the mutual model, one has to assume that the mutual is making a profit, but I want to go into that in more detail. Spending £198,000 from the Department of Health’s social enterprise investment fund, the brigade created an arm’s length company, the Cleveland Fire Brigade Risk Management Services community interest company, to bid for contracts from the private and public sector, with any profits to be given to the brigade. However, it operated at a loss of £38,000 in its first year and has already lost a major telecare contract that it had secured six months previously. I am no mathematician, and I do not know what the corporation tax yield would be for the Treasury on a community interest company running at minus £38,000, but with the CIC struggling to make a profit as it is, I fail to see how spinning out the brigade would generate any more contracts or revenue than the current arrangement.
The most important reason I, along with my hon. Friends the Members for Stockton South, for Hartlepool (Mr Wright) and for Middlesbrough (Andy McDonald), object to the proposals is the scope for privatisation that they permit. I cannot confess to being an expert on the technicalities of European public procurement law, but if the brigade were to be spun out, it would seem almost inevitable that once the initial contract has expired, the authority, as a commissioner, would be obliged to open the process up to competitive tendering, with social value legislation offering little protection. The authority’s senior officers have refused to provide my office with information about the procurement routes it is considering, but none of the “no market”, “joint venture”, “in-house incubation” or “competitive tender” options discussed on the Cabinet Office’s mutuals taskforce website offer protection from competitive tendering in the medium or long term.
There does not appear to be an appetite from senior officers in anywhere but Cleveland for spinning out the brigade, but the necessary changes to the Fire and Rescue Services Act 2004, which the Minister attempted to push through the Regulatory Reform Committee in a legislative reform order, would, in his own words,
“enable fire and rescue authorities in England to contract out their full range of services to a suitable provider”.
Ian Lavery (Wansbeck) (Lab)
My hon. Friend correctly highlights the fact that the issue was placed in letter form before the Regulatory Reform Committee, of which I am a member. Can he give any explanation for why that was the case?
Tom Blenkinsop
That is precisely why we are here tonight. My hon. Friend makes the valid point about letters on separate issues appearing before the Regulatory Reform Committee with no prior warning. That suggests something going on behind closed doors that we have still not been able to get the documents on in any proper manner.
I presume these providers could be in the private sector as well as the third sector, which could obviously have effects throughout England. The Minister confirmed that view to the FBU’s parliamentary group only recently. The Labour party supports mutuals, as do I, but the Co-operative party and I feel that this is a wholly inappropriate application of the model. The application does not appear to be the end in itself, but merely a stepping stone to further change. I am sure the Minister can see the difference between mutualising a bailed-out, formerly privately owned bank and mutualising a life-or-death public good such as a fire service.
I am sure the Minister has a series of quotes ready to fire at me accusing me of scaremongering, but before he does that, I would be grateful if he can clarify one simple point in his response. Specifically, will he absolutely guarantee that if the brigade were to be spun out, a few years down the line, it would not be subject to competitive tender? That would be despite the fact that Cleveland’s own chief fire officer stated that any contract would be subject to competition after the initial contract awarded to any mutual expired. If the Minister can confirm this, will he please inform the House which procurement route would permit this?
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
Thank you, Mr Speaker, for calling me to speak.
“From foundation trust hospitals to co-operative trust schools, we are already seeing the benefits that new mutual organisations are bringing to public services. These can provide the efficiency gains of the private sector whilst providing…democratic accountability, giving users, employees and other stakeholders a real say in how their organisations are run. If we are serious about creating a new politics, then giving ordinary people real power over the services that they rely on is the best way to do it.”
Those words are from the website of the Co-operative party—the party with which the Labour party is in formal coalition.
I will go further. The Leader of the Opposition has also endorsed mutuals and co-operatives, and the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) said that he does too. The Leader of the Opposition endorsed them in local government in a pamphlet on that very topic. The Labour party’s own local elections launch praised councils for
“pursuing new co-operative models of service and delivery.”
I suspect that a party that was true to its word would seek to support Cleveland fire brigade in its mutual bid, rather than playing politics with it.
Today’s public sector faces huge challenges, and the services that are delivered remain as important as ever. With that in mind, I am somewhat surprised—just as some Members might have been after hearing those quotes—that Opposition Members have been arguing for months in the public domain, and again in the Chamber tonight, against Cleveland’s desire to mutualise. Although I have been lobbied continuously by my hon. Friend the Member for Stockton South (James Wharton) and although the hon. Member for Wansbeck (Ian Lavery) has approached me in a meeting, I am surprised that the hon. Member for Middlesbrough South and East Cleveland, if he feels so strongly about the issue, has not come to see me to talk to me about it or to raise any of the concerns that he has just raised tonight. If he felt that strongly, I would have thought that he would have come to see me or asked to see me some time ago, when I could have explained the situation to him. We have done so publicly on a number of occasions and I will do so again tonight.
Fire and rescue authorities, like other organisations, need to innovate and to change in order to make the efficiencies that they want and need to find while continuing to deliver excellent services to the communities they serve. Being open to new ways of working is an important part of that and we are supporting those fire and rescue authorities that want to innovate and look for new delivery models, such as locally led mutuals.
At their heart, mutuals will give front-line staff a real stake in the ownership and governance of the organisations they work for. Giving front-line staff the power to do their jobs in the way that they know is best, as well as the power to be responsive to the needs of individuals, can create better, more efficient public services while feeding the benefits back to communities.
Alex Cunningham
Will the Minister answer this simple question: does he agree with the chief fire officer of Cleveland that after the initial contract—be that for three, four or nine years—any contract would be open to competition from any suitable provider at that stage?
Brandon Lewis
If the hon. Gentleman will bear with me, I will answer that question directly: it is on the assumption that the chief fire officer can go down that route in the first place. I made a statement to the FBU parliamentary group—the hon. Member for Wansbeck was there—in which I made it clear that we would not go down the route of allowing somebody to privatise a front-line fire service. I will return to that point in a few moments.
Richard Fuller (Bedford) (Con)
The Minister is talking about the requirement for the fire service to innovate. As the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) said, the process for Cleveland was stimulated by an £8.9 million funding gap. Does the Minister accept that organisational tinkering, which raises serious concerns that are, I think, shared by all parties in the House, is perhaps not as good a route as looking at different ways of putting additional services through the infrastructure of our fire service and its assets? Would taking that route not solve the problem and address some of the concerns that have been raised by Opposition Members?
Brandon Lewis
It is absolutely right that a number of different authorities are looking at different ways of moving forward and at how they work. I will discuss that in just a few moments, if my hon. Friend will bear with me.
Let us look at some examples. City Health Care Partnership community interest company in Hull provides front-line health services. It has delivered £600,000 worth of savings a year while delivering a significant improvement in patient satisfaction and a number of new services. Since it mutualised in 2011, Project Salus, a provider of children’s and youth services, has grown by around 30% and increased spending on front-line services by 10%.
The Government have a role to play in encouraging innovation and efficiency in the public sector and in creating the right conditions for organisations to explore options such as becoming mutuals. We are creating new opportunities for public sector workers to take over the running of services in many areas, including health services, adult social care and social work, youth services, Sure Start children’s centres and probation services.
In the last two years the number of public service mutuals has jumped from just 10 to 70 under this Government, not a Labour Government, delivering so far about £1 billion-worth of public services. There has previously been support from across the political spectrum for co-operatives and mutuals in local government, although I appreciate that tonight in some areas, for reasons of political expediency, that seems to have changed. Indeed, the Communities and Local Government Committee recently called on the Government to do more to support the development of mutuals and co-operatives in local government.
Brandon Lewis
I will give way first to the hon. Member for Middlesbrough (Andy McDonald).
Andy McDonald
The Minister is extolling the virtues of mutualisation for this service, but on 17 December he received a letter from the Chief Fire Officers Association—I do not know whether he has replied—which says:
“Whilst we can see why the mutual delivery model may be attractive for some public services, we are concerned about its suitability for the delivery of an emergency service.”
We are talking about putting out fires; we are talking about mutualising, on the road to privatisation, to put out fires. Can the Minister not understand why people think this is not the right route to go down?
Brandon Lewis
I shall now give way to the hon. Member for Middlesbrough South and East Cleveland.
Tom Blenkinsop
I am not going to respond to personal digs, but I will say that I met the Minister’s predecessor on more than one occasion about concerns relating to the CIC. Opposition Members were concerned about that and wanted to be constantly fed information so they could know what was happening and disseminate information to their constituents. However, in recent months we have certainly not had that from this Department.
I will read to the Minister a quote from the Secretary of State for Communities and Local Government reported on 20 March in The Northern Echo:
“If that means we cannot move on mutualisation, we will not move on mutualisation—if that means privatisation of the fire service. Have I left any room for manoeuvre?”
Would the Minister like to comment on that?
Brandon Lewis
Yes, that is absolutely the position, which is why I said that the hon. Gentleman is somewhat behind the times. We have made our position very clear, and in the six months or so that I have been involved in this issue, he has not approached me on it. I was also slightly surprised today when I spoke to the Labour chairman of the fire authority to learn that he had not been approached by the hon. Gentleman about tonight’s debate. I spoke to the chairman today to pay him the courtesy of confirming our position and what I would be saying.
It is disappointing that Her Majesty’s Opposition have not, on the whole, been supportive of mutualisation in the fire and rescue service. It is all very well Opposition Members making comments such as those that the hon. Gentleman just made, but the reality is that they have not been supportive whereas this Government are looking to do what we can to help mutuals move forward.
The Labour party has been distorting our support for fire and rescue authorities that are considering mutualisation by painting it as privatisation. As the hon. Gentleman himself eloquently outlined, we have made our position very clear: if this allows for privatisation, we simply will not let it happen. Mutualisation transcends the old binary distinction between in-house and privatised public services. Cleveland’s own local authority chairman, who is a Labour councillor, has described these claims as “scaremongering”. There has been an orchestrated campaign of misinformation in the media, which has wrongly played on peoples’ fears, and I want to correct that today. For the Labour party to start a campaign to stop something that was never happening in the first place is an achievement even for it. My aim is to support fire and rescue authorities in delivering excellent services to their communities, and I will do all in my power to help them do that.
Tom Blenkinsop
I genuinely hope the Minister will take this opportunity to stop the strategy of stonewalling, as a result of which we have received no answers to freedom of information requests or questions in this House, and answer the final question in my speech: will he guarantee that there is no route via mutualisation that will allow for privatisation, as outlined by the chief fire officer to us at a recent meeting? I ask that as the Conservative party is currently in the throes of anger over Europe and is enthralled by European competition law that allows privatisation of a public sector service.
Brandon Lewis
The hon. Gentleman can try to spin this whichever way he wants, but he has already eloquently outlined our position. He quoted the Secretary of State and I was present when he said that if there is no way of mutualising without opening the door to privatisation, we will not do it. Cleveland will not be able to go down the road of becoming a mutual with the help of the Government unless we can find a way of doing it that does not open the door to privatisation. That is why I made the point about the Labour party campaigning on a route we were never going down in the first place.
James Wharton
This is very important, because I am sure that a lot of Cleveland firefighters are watching this debate or will follow it up. In my discussions with my hon. Friend, we have talked not only about the risks of privatisation and why the Government are against it, but the employment rights and conditions of the firefighters who work there. Whatever the Government allow to happen, will he confirm that we will protect those as best we can and not let them be put at risk?
Brandon Lewis
My hon. Friend makes a good point. Yes, of course we will.
Let me be very clear about this. Cleveland, a Labour authority with a Labour fire authority chairman, has come to the Government wanting to mutualise. We have said that we will work with the authority if we can find a way for it to do that, should it need the Government to take action to allow it. We will not do that unless we are confident that there is a way to do it that does not open the door to privatisation. That position has not changed since the beginning and it remains unchanged. Cleveland expressed an interest in exploring mutualisation to deliver services. Let us remember that under the 2004 Act, introduced by the Labour Government, many fire services can already be provided through private procurement and through mutuals or other bodies, if they wish it.
The wider sector has shown an interest in having the flexibility to do things differently, and authorities across the country are looking at how they can innovate. In such a scenario the authority would, however, retain its responsibilities in statute for delivering the important public service that fire authorities deliver. A mutual would generally be free from the restrictions of the public sector and be able to design services in a way that better meets the needs of their local communities, harnessing the energies and expertise of the front-line staff who are the real experts in the services that they deliver. Benefits can flow back to the community in terms of a better designed service, delivering it more efficiently and giving new opportunities for community engagement and involvement.
Cleveland identified some barriers that were preventing it from taking this step, and as the Government it is right that we should look into whether we can help to consider this innovative delivery option. We have undertaken an initial consultation with key partners to understand the issues at hand. Following that, we approached the Chair of the Regulatory Reform Committee to consider whether it would be appropriate to make any changes to existing legislation. In my view, raising this issue on behalf of the fire and rescue authorities was essential to inform our understanding of the potential barriers, challenges and benefits to the fire sector. To avoid the topic completely would have been wrong. Just because a question is new and different does not mean that we should be afraid to ask it.
Let me be clear: the No. 1 priority of every fire and rescue authority is, and always will be, preventing fires and saving lives, and this Government will continue to support them in this essential life-saving role.
Brandon Lewis
I am going to make some more progress given the time.
The key point is that we have listened to the responses and, following feedback, we have made it abundantly clear that despite the claims of the Labour party, we are not, as the hon. Member for Middlesbrough South and East Cleveland clearly outlined in the quote by the Secretary of State, selling off the sector. My aim remains to support fire and rescue authorities in exploring new and innovative ways of providing their services, and we are reviewing the options to enable such models without opening up the delivery of key fire and rescue services to outside parties.
Brandon Lewis
No, I will not, in view of the time.
Mutuals are also being considered as part of a wider review generally, in the case of the fire and rescue sector by Sir Ken Knight, whose report will be published shortly. However, mutuals are not the only innovative delivery model that fire and rescue authorities are considering. Some are exploring other opportunities that deliver benefits for their communities, while others are looking at closer joint working and sharing of resources within both the fire sector and the wider blue light community. Increased collaboration and partnership are excellent principles that all parties, whatever their political view, should endorse.
Cleveland fire and rescue authority, and others of its kind, should be lauded for exploring pioneering options for delivering its services for the benefit of its staff and, importantly, the community it serves. It, a Labour-controlled authority, has recognised the need to work in different ways and is seemingly not afraid to try new things in order to meet the challenges that the public sector faces and to do the best for its community.
I hope that I have responded to all my colleagues’ concerns. We may not agree on things, but the simple fact is that the Cleveland authority has asked us to look at something and we have said that we will do so. All parties should be working together to support Cleveland and any other fire and rescue authority that is trying to do something new and innovative for the benefit of its community. This is, and always has been, about giving the fire sector the freedom and flexibility to save lives and to deliver the excellent service that they provide to their communities.
Question put and agreed to.
Ministerial Correction
Home Department
(11 years ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Karl Turner
To ask the Secretary of State for the Home Department what estimate she has made of the additional cost of police and security as a result of the recall of Parliament on 10 April 2013.
[Official Report, 18 April 2013, Vol. 561, c. 502W.]
Letter of correction from Damian Green:
An error has been identified in the written answer given to the hon. Member for Kingston upon Hull East (Karl Turner) on 18 April 2013.
The full answer given was as follows:
Damian Green
This information is not collected centrally. The cost of security services on the parliamentary estate is a matter for the Independent Parliamentary Standards Authority (IPSA).
The correct answer should have been:
Damian Green
This information is not collected centrally. The cost of security services on the parliamentary estate is a matter for the parliamentary authorities.
Changes to Welfare in Hartlepool
Written Ministerial Statements
Handling Members' Correspondence
(11 years ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
I am today publishing a report on Departments’ and agencies’ performance on handling Members’ and peers’ correspondence during the calendar year 2012. Details are set out in the table below. Correspondence statistics for 2011 can be found on 15 March 2012, Official Report, column 30WS.
Departmental figures are based on substantive replies unless otherwise indicated. The footnotes to the table provide general background information on how the figures have been compiled.
Correspondence from MPs/Peers to Ministers and Agency Chief Executives1 | 2012 | ||
|---|---|---|---|
Department or Agency | Target set for reply (working days) | Number of letter received | % of replies within target |
Attorney-General’s Office | 20 | 525 | 97 |
Department for Business, Innovation and Skills | 15 | 10,274 | 84 |
- Companies House | 10 | 111 | 99 |
- Insolvency Service | 15 | 73 | 99 |
- Land Registry | 15 | 65 | 80 |
- Met Office | 10 | 19 | 74 |
- Ordnance Survey | 10 | 15 | 87 |
- Skills Funding Agency | 10 | 131 | 95 |
Cabinet Office | 15 | 3,681 | 77 |
Charity Commission | 15 | 309 | 96 |
Department for Communities and Local Government | 10 | 8,819 | 67 |
- Planning Inspectorate | 102 | 260 | 97 |
Crown Prosecution Service | 20 | 427 | 98 |
Department for Culture, Media and Sport3 | 20 | 5,100 | 88 |
Ministry of Defence | 204 | 5,160 | 88 |
Department for Education | 15 | 16,413 | 55 |
Department of Energy and Climate Change | 15 | 6,837 | 68 |
Department for Environment, Food and Rural Affairs | 15 | 10,968 | 75 |
- Animal Health and Veterinary Laboratories Agency | 15 | 191 | 90 |
- Rural Payments Agency | 15 | 240 | 92 |
Food Standards Agency | |||
DH Ministers replies | 20 | 212 | 85 |
FSA Chair/CE replies | 20 | 98 | 87 |
Foreign and Commonwealth Office | 20 | 9,635 | 91 |
Department of Health | 18 | 17,279 | 98 |
- Medicines and Healthcare Products Regulatory Agency | 20 | 241 | 95 |
Home Office3 | 15 | 10,318 | 75 |
- Criminal Records Bureau | 15 | 320 | 98 |
- Identity and Passport Service | 155 | 1,222 | 87 |
- UK Border Agency | 20 | 53,395 | 81 |
Department for International Development | 15 | 3,527 | 96 |
Ministry of Justice | 15 | 4,887 | 70 |
- HM Courts Service and Tribunals Service | 15 | 1,245 | 65 |
- National Archive | 10* | 8 | 75 |
15** | 12 | 83 | |
- National Offender Management Service | 15* | 896 | 68 |
- Office of the Public Guardian | 15 | 163 | 94 |
20** | 265 | 92 | |
- Official Solicitor and Public Trustee | 15 | 27 | 89 |
*Where Ministers replied | |||
**Where CEO replied | |||
Northern Ireland Office | 15 | 534 | 71 |
Office for Standards in Education, Children’s Services and Schools | 15 | 247 | 91 |
Office of Fair Trading | 15 | 610 | 66 |
Office of Gas and Electricity Markets | 15 | 289 | 83 |
Office of the Leader of the House of Commons | 15 | 165 | 97 |
Office of the Leader of the House of Lords | 15 | 124 | 98 |
Office of Rail Regulation | 20 | 38 | 59 |
OFWAT (Water Services Regulation Authority) | 10 | 108 | 39 |
Scotland Office | 15 | 208 | 91 |
Serious Fraud Office | 20 | 25 | 80 |
Department for Transport | 15(01/01/2012-31/08/2012) | 7,148 | 73 |
20(01/09/2012 -31/12/2012) | 3,442 | 97 | |
- Driver Vehicle Licensing Agency | 7 | 1,804 | 99 |
- Driving Standards Agency | 10 | 126 | 99 |
- Highways Agency | 15 | 392 | 92 |
- Vehicle and Operator Services Agency | 10 | 90 | 91 |
HM Treasury | 15 | 16,539 | 53 |
- H M Revenue and Customs | 15 | 2,693 | 57 |
- HMRC CEO* | 15 | 8,939 | 60 |
*Cases where the HMRC’s Chief Executive has replied directly, rather than Ministers | |||
Treasury Solicitor’s Department | 10 | 16 | 100 |
Wales Office | 15 | 132 | 81 |
Department for Work and Pensions | 20 | 20,613 | 94 |
- Child Maintenance and Enforcement Commission6* | 15 | 1,956 | 100 |
- Health and Safety Executive* | 15 | 142 | 97 |
- DWP Operations7* | 15 | 3,775 | 97 |
*Letters sent direct to Chief Executive/Officials | |||
1Departments and agencies which received 10 MPs/Peers letters or fewer are not shown in this table. Holding or interim replies are not included unless otherwise indicated. The report does not include correspondence considered as Freedom of Information requests. 2Target from 19/03/2012, previously seven days. 3Government Equalities Office was part of Home Office from January-August and then part of DCMS from September-December. During the year the GEO’s performance was 74%. 4Target from March 2012, previously 15 days. 5Target previously 10 working days up to April 2012. 6The Child Maintenance and Enforcement Commission was abolished on 30 July 2012. From 1 August 2012, operational correspondence from MPs and Peers relating to child maintenance became the responsibility of the Child Support Agency within DWP. 7With effect from 1 October 2011, correspondence activity relating to Jobcentre Plus and the Pensions, Disability and Carers Service was merged under the organisation of the Chief Operating Officer within DWP. |
Equitable Life Payment Scheme
(11 years ago)
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The Economic Secretary to the Treasury (Sajid Javid)
As of 30 April 2013 the scheme has made payments totalling £604 million and has informed 85% of eligible individual policyholders the value of any payment due. The scheme has also published a further progress report, which can be found at:
http://equitablelifepaymentscheme.independent.gov.uk/
The scheme has now contacted all the eligible individual policyholders it can trace. Any holders of an individual non with-profits annuity or with-profits annuity who have not been contacted by the scheme should call the scheme on 0300 0200 150 to confirm the eligibility of their policy and be advised of the next steps they should take.
The scheme has also started making payments to those who bought their Equitable Life policy through a company pension scheme, with circa 65,000 payments already made to this group. These payments will continue over the coming months.
The scheme has also confirmed that the estates of some 8,000 deceased policyholders have been paid and the process of identifying, tracing and contacting the estates of deceased policyholders continues.
The Government are committed to drawing a line under the Equitable Life issue and the scheme remains on track to close as planned in 2014. The scheme will begin the process of closing down and shutting to new claims later this year. In advance of that the scheme will place adverts in national newspapers to encourage those that are due a payment and have not received it to come forward.
Reuse of Plutonium
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The Department of Energy and Climate Change (DECC) will publish today the conclusions of its consultation on the proposed justification process for the reuse of plutonium.
The concept of justification is based on the internationally accepted principle of radiological protection; that no practice involving exposure to ionising radiation should be adopted unless it produces sufficient benefits to the exposed individuals, or to society in general, to offset the health detriment it may cause.
Before a new class or type of practice that involves a risk from ionising radiation can be undertaken in the UK, it must be justified. It is not necessary to show the class or type of practice being considered for justification is the best available option.
The consultation was published in May 2012 and views were sought on whether the proposed process was clear and proportionate, took into account the relevant factors for consideration and whether guidance should be specific or generic.
Having considered all responses received during the consultation period, the UK Government have set out the application and decision-making processes in a “Guidance for Applicants” document.
Copies of the consultation response and “Guidance for Applicants” have been placed in Libraries of the House or can be obtained from the GOV.UK website:
https://www.gov.uk/government/consultations/re-use-option-for-managing-our-plutonium-stocks.
Managing Radioactive Waste Safely
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The Government remain committed to geological disposal as the right policy for the long-term, safe and secure management of higher-activity radioactive waste. For the reasons I gave in my written ministerial statement on 31 January 2013, Official Report, column 54WS (www.gov.uk/government/ speeches/written-ministerial-statement-by-edward-davey-on-the-management-of-radioactive-waste) I remain confident that the objective of the managing radioactive waste safely (MRWS) programme is sound and will be put into effect, and that a site for a geological disposal facility (GDF) will be found.
Further to my previous statement, I can now confirm that the Government will today launch a call for evidence on the site selection process of the managing radioactive waste safely (MRWS) programme. The evidence provided in response to this call will inform a public consultation later this year.
The invitation remains open for communities to come forward and express an interest, without commitment, in the site selection process for a GDF.
Russia
(11 years ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
The Prime Minister travelled to Russia on Friday 10 May as part of a series of visits to G8 capitals ahead of the G8 summit in Lough Erne. The meeting with President Putin took place in Sochi, the venue for the 2014 winter Olympics. Security for the games was one of the topics of discussion.
As the House is aware, co-operation with the Russian authorities over security issues has been a sensitive subject since the death of Alexander Litvinenko. Following a lack of progress with the Russian authorities in the investigation in 2007, the Government took a number of measures, dubbed the “Litvinenko measures”. Since then we have had no contact with the Federal Security Services (FSB).
For the forthcoming Sochi Olympics, we must work with the Russian authorities on their security preparations for the games. This will help assure the safety of British nationals at the event. The Prime Minister agreed with President Putin that a limited channel of communication with the relevant Russian authorities will be set up for the specific objective of preparing for security issues arising from the Sochi games. This will include contact with the FSB, specifically and solely for the purposes of ensuring the safety of British visitors and participants in the Sochi Olympics.
There has been no change to the measures announced to Parliament by the previous Government in 2007. The Government continue to seek justice in the Litvinenko case and believe that the two suspects identified by the Crown Prosecution Service should face trial in the UK.
Identity and Passport Service
(11 years ago)
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The Minister for Immigration (Mr Mark Harper)
With effect from 13 May 2013, the Identity and Passport Service (IPS) will be renamed and its functions carried out under the name of Her Majesty’s Passport Office.
The new title reflects the role of Her Majesty’s Passport Office in issuing passports to citizens of the United Kingdom on behalf of the Crown under the exercise of the royal prerogative. It also reflects the policy of Her Majesty’s Government to end the previous Administration’s plans for identity cards. Her Majesty’s Passport Office will retain responsibility for the work of the General Register Office for England and Wales.
The change in name does not affect the validity of existing British passports nor the form and content of future British passports.
Death of a Member: Lord Reay
The Lord Speaker (Baroness D'Souza)
My Lords, I regret to inform the House of the death of the noble Lord, Lord Reay, on 10 May. On behalf of the House, I extend our deepest condolences to the noble Lord’s family and friends.
NHS: 111 Telephone Service
(11 years ago)
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Lord Hunt of Kings Heath
To ask Her Majesty’s Government what steps they are taking to improve the implementation of the NHS 111 service.
Lord Hunt of Kings Heath
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and refer noble Lords to my health interests in the register.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, we recognise that the NHS 111 launches in March did not go as smoothly as planned and that a number of providers have delivered an unacceptable service, especially at weekends. NHS England is working closely with clinical commissioning groups to stabilise providers who have failed to deliver an effective service and to ensure that areas yet to go live are in a safe and fit state to do so.
Lord Hunt of Kings Heath
My Lords, I am grateful to the noble Earl for that response, but on what grounds was the decision made to go ahead with the national rollout in the light of the results from the pilots, which showed problems with the scheme, and the fact that many people in the NHS advised Ministers and NHS England not to roll it out because it was not ready?
Earl Howe
My Lords, the University of Sheffield did work for the department reporting on the first four NHS 111 pilots. That showed that 92% of patients were satisfied with the service and that 93% felt that the advice given was helpful. It also found that, overall, the service was meeting its objective of getting people to the right place first time. On that basis, it was considered safe to go ahead with a rollout. Unfortunately, in particular areas of the country, the resources deployed to meet the demand have not been accurately assessed, but I stress that that is in a minority of locations.
Lord Mawhinney
My Lords, does my noble friend accept that if the Government were to take firm action and turn back the clock to require general practitioners to provide seven days a week, 24 hours a day comprehensive and efficient service, demands on 111 would greatly decrease?
Earl Howe
My noble friend, with his experience, is very wise on these matters. I think it would be quite difficult to turn the clock back completely, but I take his point. There is enormous scope for GPs to contribute to the drive to keep elderly, frail people in particular out of hospital. Too many people are landing up in hospital with chronic diseases who should never have been allowed to get there.
Baroness Wall of New Barnet
My Lords, the Minister has just stolen my thunder in his response to the noble Lord. Does the Minister have any idea when the failings in the system will be sorted? At the Barnet and Chase Farm Hospitals NHS Trust, of which I declare an interest as chair, we see extra people coming into A&E who, as he has just said, are very poorly and should not really be in hospital because they need antibiotics or something like that and would get better much quicker either in their own home or in a nursing home.
Earl Howe
On the issue of A&E, there is no doubt that the NHS has been under very heavy pressure over the past few weeks. I am pleased to say that over the past two weeks the NHS as a whole has met the 95% standard, but obviously that statistic masks difficulties that are still being experienced in particular locations. The challenge now is to ensure that we are ready for next winter, and all the work that is now being done in NHS England, by clinical commissioning groups and within providers is designed to ensure that we are much readier for the pressures to come.
Lord Laming
My Lords, does the Minister accept that, although we refer to “primary care services”, they are not primary in that they are available for the shortest number of hours per week of any part of the health service? Unless things change dramatically, it is inevitable that accident and emergency will be seen as the first point of call for more and more people, especially in out of office hours.
Earl Howe
I take the noble Lord’s point. That is why the 111 service has been created; there is no doubt that there was a very confusing landscape in which people did not know who to call out of hours, and they did not necessarily have the telephone number of the out of hours provider in their area. The 111 service is designed to simplify all that, and across the vast bulk of England people are getting a good, if not fantastic, service. Unfortunately, in two areas of the country, the south-east and the south-west, we are still seeing problems arising, and those are being gripped.
Baroness Jolly
My Lords, the out of hours services, the ambulance services, A&E and these 111 services need to work in a harmonious and co-ordinated way for the good not only of the patient but of the service as a whole. Will the Minister reassure the House that the 111 service will be part of the review of urgent and emergency services being led by Sir Bruce Keogh?
Lord Tomlinson
Does the Minister accept that Sir Bruce looking at these questions is not necessarily a comfort? Sir Bruce looked at accident and emergency services in south London but, based on what the Minister has said today about the pressure on accident and emergency services, Sir Bruce came to the wrong conclusion about Lewisham accident and emergency.
Baroness Masham of Ilton
The Minister said that there had been confusion in the past. There is even more confusion now. Does he not agree that there should be some publicity for the general public so that they know where to go?
Earl Howe
I agree. NHS England and clinical commissioning groups are engaged in that publicity. I think it will be a while before the general public are fully aware of what NHS 111 has to offer, but I have in my brief a series of very complimentary testimonials about 111 that show that many members of the public are already enjoying its benefits.
Baroness McIntosh of Hudnall
My Lords, would the Minister accept that many people who are not directly involved in the health services find it quite hard to understand why NHS Direct was dismantled in favour of the 111 service, which has clearly not been working terribly well? Does he agree that the fact that this change has not succeeded tremendously well does not give one great confidence that other changes that appear to have been relatively unnecessary will go through successfully?
Earl Howe
I agree. It is unfortunate that the launch of this service was not nearly as satisfactory as was planned. The adverse performance in certain areas of the country has rather overshadowed the very good, if not excellent, performance in other areas, so while not belittling the issue the noble Baroness raises, I think we have to get it in proportion.
UK Clothing Sector: Safety
Baroness Young of Hornsey
To ask Her Majesty’s Government what steps they are taking to ensure that retailers operating in the United Kingdom clothing sector take a rigorous approach to ensuring that people working throughout their supply chains enjoy safe and secure working conditions.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, the Bangladesh garment factory tragedies bring into sharp focus the challenges arising from blurred and multiple supply chains in retail and the protection and well-being of those who manufacture. BIS is working closely with DfID, the FCO, overseas Governments and companies to secure improvements in working conditions and invest in assessing risks. We are supporting voluntary initiatives and international principles to reform legislation and regulation.
Baroness Young of Hornsey
I thank the Minister for his response and for indicating that some action is beginning to take place. Does he agree that it is damaging for retailers in the UK to be associated with making profit on the backs of cheap labour working in dangerous conditions? Does he agree that the Government have a leadership role to play in working in partnership with retail outlets in order to ensure that their operational and business models are changed and can address the seriousness of this situation?
Viscount Younger of Leckie
I thank the noble Baroness for that. Indeed, it can be damaging for businesses. I know that many of them, including Primark, are already working extremely hard to help at the sharp end in Bangladesh in the aftermath of this terrible tragedy. Before I go on, can we not rejoice at the rescue of the seamstress a couple of days ago while remembering, of course, that 1,000 people died?
Many companies now have a corporate social responsibility department, and it is within that area that companies and businesses need to drive forward their responsibilities. From the Government’s perspective, in terms of reporting, we are bringing in from 1 October a mandatory report on human rights issues.
Lord Avebury
Will my noble friend consider asking the Bangladeshi authorities whether we could offer advice on ensuring that building regulations in Dhaka are fit for purpose and that inspectors police the enforcement of building regulations free of corruption?
Viscount Younger of Leckie
My noble friend makes a very important point. We welcome the statement by the Bangladeshi Foreign Secretary that Rana Plaza is “a turning point in Bangladesh’s history”. I know that the Bangladeshi Government have taken this dreadful tragedy extremely seriously. I understand that they have shut down 18 factories, some of which have reopened on the basis of rigorous safety certificates.
Baroness McIntosh of Hudnall
Does the Minister not agree that although corporate social responsibility is clearly important in this matter, what is really at stake is a business model for many of these retailers which depends upon being able to sell clothes at prices that are, frankly, ridiculously low? I am just as guilty as most other people of taking advantage of that opportunity when I see it, but I would really rather not have it before me. Will the Minister say in what way the Government can help to educate the market in this country to understand the price of low prices?
Viscount Younger of Leckie
I understand that even if wages were doubled in Bangladesh—I know that we are talking about a health and safety issue—it would put only 2p on the price of a T-shirt, so there are some real issues to tackle. As I mentioned earlier, this is a cross-departmental issue. For example, DfID is supporting the ethical trading initiative which is a leading alliance of companies, trade unions and NGOs, and the Government very much support it. Secondly, DfID, with government support, is supporting the Responsible and Accountable Garment Sector challenge fund, known as RAGS, so a number of initiatives are being pushed by the Government, and we continue to put the necessary pressure on the retail organisations.
Lord Naseby
I have lived and worked in that part of the world. Is my noble friend aware that there is nothing wrong with the building regulations? It is entirely a matter of whether the buildings are inspected. Clearly, the loading on the floors of this particular factory was far in excess of what it should have been. Can the Government not think of something practical to do? We have high commissioners in Commonwealth countries and ambassadors in non-Commonwealth countries. We usually have a trade section. Why can we not have someone within our own sphere of interest liaising principally with the importers in the UK and the major retailers—
Lord Naseby
It is not too long when more than 1,000 people were killed. Why can we not have someone liaising with the two parties to ensure that this sort of tragedy does not happen again?
Viscount Younger of Leckie
There are two strands to that. First, I reassure my noble friend that Governments, particularly the UK Government, are working extremely hard with the Bangladesh Government and others at all levels—political and diplomatic—to get to the bottom of the reasons behind this dreadful collapse. Secondly, there is now even greater pressure on organisations to look at their supply-chain management and the multiplicity of those links, to be sure that health and safety issues at the beginning of the supply chain are up to scratch.
The Lord Bishop of Bath and Wells
My Lords, does the Minister agree that retailers need to put resources into providing safe conditions, particularly by having personnel on the ground in the areas affected by this kind of tragedy?
Viscount Younger of Leckie
The right reverend Prelate makes a good point. Many retailers in this country have individuals on the ground. Primark, for example, has somebody on the ground; they are working hard to deal with the aftermath of the disaster and looking ahead at remedies.
The Earl of Clancarty
My Lords, what is the Government’s response to Muhammad Yunus’s call for an international minimum wage for those working in the garment industry, the level of this wage to be agreed upon by the foreign buyers?
Viscount Younger of Leckie
The issue of wages is clearly linked. We have obviously been talking about a very serious health and safety issue with the factory collapsing. I alluded to wages before and, again, further pressure needs to be brought on organisations to be sure that a decent wage, however defined, is paid out in these particular countries.
Lord Young of Norwood Green
My Lords, does the Minister agree that if the owner of that company had listened to the concerns of the workers who complained the day before about cracks in the building then this tragedy could possibly have been averted? That stresses the importance of having independent trade unions, independent health and safety committees and workers committees in these factories if we are to ensure a safe future for the workers.
Viscount Younger of Leckie
The noble Lord makes a very good point. From our perspective in Britain, we need to exert as much pressure as we can to encourage greater communication between workers, workers’ representatives and Governments in countries such as Bangladesh.
Scotland: Independence
(11 years ago)
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Lord McAvoy
To ask Her Majesty’s Government what if any instructions they have given to each Government department to outline the impact that independence would have on its responsibilities in Scotland.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, the Government announced last year that they would carry out a detailed analysis of how Scotland and the rest of the UK contribute to and benefit from our partnership. This work will look at issues including the legal and constitutional set-up, the economy, wider policy issues such as the United Kingdom’s place in the world, defence, energy and welfare. This work is being carried out across government by policy experts in relevant areas.
Lord McAvoy
My Lords, I thank the Minister for his Answer. He will, like me, be confident that the overwhelming body of evidence supplied by government Ministers and their departments will show that Scotland is far better off staying within the union. However, the Minister knows that we must be careful with how this is portrayed in Scotland. We do not want lecturing or hectoring. I ask the Minister to do whatever he can to ensure that government Ministers produce and present these facts in such a way that they do not alienate opinion in Scotland.
Lord Wallace of Tankerness
I very much agree with the initial comments of the noble Lord that Scotland is better within the UK and the UK is better with Scotland in it. I take his point, too, that it is important that the tone of the argument is set, and that it is positive, because there is a very positive case to make. However, pointing out some of the difficulties and challenges of independence does not mean that we are scaremongering or being negative. For example, the paper recently published on currency showed the disadvantages of a number of other options but also showed, beyond peradventure, that the best option of all is for Scotland to remain part of the United Kingdom.
Lord Forsyth of Drumlean
My Lords, will my noble and learned friend indicate what the Government’s position will be on the West Lothian question and on the Barnett formula? Surely, if people are going to vote in the referendum and wish to remain in the United Kingdom, they need to know what the position of their representatives at Westminster will be, and what the funding position in the future will be.
Lord Wallace of Tankerness
My Lords, as my noble friend will know, the commission established to look at the so-called West Lothian question, under the chairmanship of Sir William McKay, reported a couple of months ago, and obviously the Government are looking at and considering the detail of that report. It has been made clear on a number of occasions that the Government do not have any plans to reform or revise the Barnett formula, as our primary objective is to get the UK government finances back into a healthy situation.
Lord West of Spithead
My Lords, I am sure that the Minister agrees that defence and security are the most important duties of any Government. Is the Minister content that sufficient work is being done on looking at the full detail of the inconsistency of what the SNP says about providing a new MoD, command and control, intelligence and the Five Eyes community? These are a whole raft of issues that are crucially important for the defence of these islands in the future should, by some error or whatever, Scotland become separate. Those things need to be looked at, and I am not sure that they are being looked at.
Lord Wallace of Tankerness
My Lords, I certainly agree that one of the primary responsibilities of government is the defence and security of the realm. The report, which was published two weeks ago by the Foreign Affairs Committee of the House of Commons and the Economic Affairs Committee of this House, touched on a whole stream of important issues related to defence. Defence is one of the issues on which a paper will be published in the Scotland analysis series. It is important to recognise the benefits Scotland gets, not only from our defence of the UK but from the number of jobs that are dependent on the defence industries in Scotland.
Lord Maclennan of Rogart
My Lords, have the Government given collective consideration to how to get across to the general voting public in Scotland the facts that are being made available, in a department-by-department process? It is extremely important to bear in mind that the media are not giving detailed consideration to these issues. The Government might think it right to communicate with the electors directly on these matters. If we follow the pattern of the previous referendum, on alternative voting, we had two weeks of media coverage of that issue, although admittedly it was nothing like as important as the break-up of Britain. However, if we do not get detailed knowledge to an intelligent electorate, we could find that the public react against the general condition of the country at the time.
Lord Wallace of Tankerness
My Lords, I take my noble friend’s point about the importance of communicating the arguments. The paper on currency to which I have just referred in my response to the noble Lord, Lord McAvoy, had so many points in it that some did not necessarily get the full airing that they might have. The next paper in the series will be on the financial services industry, and numerous issues could arise from that. It is not anticipated that there will be any separate government publication in the run-up to the election in the way that there was in the run-up to the EU referendum of 1975. However, it is important that the Government communicate these important messages and arguments for the union in a way that is readily accessible. It is important that they are underpinned by some weighty analysis, but there is also a case to be made for making sure that the arguments are readily available to the public.
Lord Butler of Brockwell
My Lords, what guidance has been given to the Civil Service about maintaining neutrality between the two sides in the lead-up to the referendum on independence?
Lord Wallace of Tankerness
My Lords, I recall that some time ago, following the election of the present Scottish Government, the previous Cabinet Secretary gave some indication that Scottish civil servants working for the Scottish Government would be expected, as are UK government civil servants, to promote the policy of their Government. Likewise, civil servants working for the Scottish Government, albeit that they are UK civil servants, will be expected to work towards the policy of the Scottish Government.
Lord Foulkes of Cumnock
My Lords, will the Minister answer a question that his namesake, the noble Lord, Lord Wallace of Saltaire, could not, and confirm that the Cabinet has taken two decisions: first, that there should be no pre-negotiation with the Scottish Government, which is absolutely correct; and, secondly, that there should be no contingency planning, which is quite wrong, particularly, as my noble friend Lord West said, in the area of defence? Will the issue of contingency planning be reconsidered by the Government?
Lord Wallace of Tankerness
My Lords, the Government have indicated that there will be neither pre-negotiation nor contingency planning. I can understand why people talk about red lines and making things clear, but to ask the United Kingdom Government to prioritise one part of the United Kingdom over another would not sit easily with a Government who seek to serve the interests of all our citizens in all parts of the United Kingdom. It is not in the interests of Scotland or of the United Kingdom that we should start to unstitch the fabric of the United Kingdom before the people of Scotland have had their say.
Leveson Inquiry: Report
Lord Fowler
To ask Her Majesty’s Government what assessment they have made of the proposals put forward by a number of newspapers in response to the Leveson inquiry report.
Lord Gardiner of Kimble
My Lords, the Press Standards Board of Finance petitioned the Privy Council Office with a draft royal charter on 30 April. A royal charter of this kind, submitted to the Privy Council, must go through due process. It has been published on the Privy Council website for people to offer views. Thereafter, it will be considered against the criteria published by the Privy Council Office. The Government’s view on the cross-party royal charter has not changed.
Lord Fowler
My Lords, so that we can be absolutely clear about the position, is it that the delay has been purely to allow the Privy Council to consider the newspapers’ alternative proposal for a royal charter but that the Government remain absolutely committed to their own charter, which was approved unanimously by MPs in the other place? Surely the point is that in a democracy it is the will of Parliament that should take precedence over any interest group, however powerful.
Lord Gardiner of Kimble
My Lords, as I mentioned, there will need to be due processes for the Pressbof royal charter to be considered. However, the royal charter published on 18 March continues to have cross- party support, and the support of all party leaders. It was the subject of 21 weeks of discussion and negotiation. The Government believe it would put in place a system of independent self-regulation with a robust system of redress, while protecting the freedom of the press.
Lord Soley
Will the Minister convey to the Secretary of State for Culture and, through her, to the Prime Minister the sense of outrage that is felt, not just by victims, at the way senior members of the press are trying to override the will of Parliament? They claim press freedom, but they were the ones who closed the News of the World rather than sacking the chief executive and chairman. Why are we listening to them when they ought to be showing a bit of humility and recognising the will of Parliament?
Lord Gardiner of Kimble
My Lords, of course I understand what the noble Lord has said. We must indeed remember why the Leveson inquiry was held. Innocent people suffered tremendous harm and we owe it to them to ensure that this does not happen again. However, that should not and does not conflict with the important place we have for protecting freedom of the press.
Baroness Bonham-Carter of Yarnbury
My Lords, has the Minister seen the response from the NUJ to the publishers’ and proprietors’ charter? The NUJ represents journalists and utterly condemns the charter as showing contempt for parliamentary democracy. Who does the Minister think supports the publishers’ charter? Does he not agree that the proposal would not create a self-regulator that was genuinely independent or impartial, which is what the people of this country, and in particular the victims, want and deserve?
Lord Gardiner of Kimble
My Lords, I am aware of the representations of the NUJ and, indeed, other interests. I have to repeat that there are due processes for any submission of a royal charter. I checked the website at the Privy Council Office and I can work out how one can put across one’s views during this period of openness. There will be 15 working days for a period of openness, when people can put their views to the Privy Council as to the Pressbof royal charter.
Lord Prescott
My Lords, I confess not to being a full supporter of the royal charter, although I was quite prepared to accept it if all three parties got together, and it embodied the Leveson proposals. I am pleased to hear that that is now going ahead. Will the Minister confirm that, even under those proposals, there will have to be legislation before these Houses to determine the issue on damages and costs for those editors and papers that refuse to co-operate with any form of charter? Can he confirm that there will be legislation here? If that is the Government’s policy, why was it not in the Queen’s Speech, which we are now debating?
Lord Gardiner of Kimble
My Lords, my understanding is that all outstanding matters were dealt with in discussions not only of the royal charter but of the Crime and Courts Bill before the House rose for prorogation. So my understanding is that all outstanding matters vis-à-vis the matters that the noble Lord has raised have already been handled.
Baroness Jones of Whitchurch
My Lords, perhaps I may return to the Minister’s answer to the noble Lord, Lord Fowler, on the issue of the chronology of what has occurred. It seems very strange that, although the all-party supported royal charter was agreed before the one put together subsequently by the press group, the only one being put forward to the Privy Council is the press version, which was agreed after the one that was originally put forward on an all-party basis. I really do not understand why that has been allowed to happen. Why is not the Privy Council also considering the one put forward on an all-party basis?
Lord Gardiner of Kimble
My Lords, I can understand the point that the noble Baroness has made. I asked the question myself. I understand that you cannot have two royal charters relating to the same sort of subject dealt with in parallel. It will have to be, because of the due process, that there is one royal charter from Pressbof, which is a professional, body-based version, and then the state-sponsored royal charter, which this and the other House agreed on 18 March. Therefore, the first process is that there will have to be a consideration of the Pressbof royal charter. Once that has been achieved and the Privy Council has dealt with it, my understanding is that you cannot have two applications at the same time.
Equality (Titles) Bill [HL]
Rights of the Sovereign and the Duchy of Cornwall Bill [HL]
Arrangement of Business
(11 years ago)
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Lord Newby
My Lords, there are currently 166 speakers on the lists for the remaining three days of debate on the humble Address. If Back-Bench contributions are kept to eight minutes, the House should be able to rise by 10 pm tonight, around 11 pm on Tuesday and around midnight on Wednesday.
Queen’s Speech
(11 years ago)
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The Commercial Secretary to the Treasury (Lord Deighton)
My Lords, it is a privilege to open this debate. We will be considering the Government’s priorities for business, the economy, local government and transport for the year ahead. I am particularly looking forward to the maiden speech of the noble Baroness, Lady Lane-Fox of Soho. She brings valuable business expertise, inspiration to our entrepreneurs and a deep knowledge of how to make the most of technology to revolutionise business and our daily lives. She is a most welcome addition to this House.
The measures in Her Majesty’s gracious Speech advance the Government’s strategy to position this country for success in the global economy. This strategy and its component parts are clear and have been consistently articulated and pursued. Our priority now must be the effective implementation of the policies which have been introduced, delivering meaningful improvements to our economic performance. The foundation of this strategy remains the steady restoration of our public finances from their precarious state in 2010. Although slower than anticipated growth, caused principally by problems in the eurozone, has necessarily extended the period of fiscal consolidation, the deficit has already been cut by a third. This has established credibility in the financial markets and keeps our borrowing costs at record low levels. This commitment to fiscal responsibility, reinforced by an activist monetary policy and the reform of the banking system, is the base on which we are building the supply side measures, such as establishing the lowest corporation tax rate in the G20, aimed at making the UK a great place to do business.
Last Thursday, we hosted a conference in London which attracted senior business people and investors from around the world. The positive attitude to the UK’s business environment was overwhelming and represents a significant advantage to us in the global race, which we can exploit but cannot take for granted. Our economy faces many challenges, but progress is promising in a number of areas: more than a million and a quarter private sector jobs have been created since 2010, with the OBR projecting employment to rise in every year of its forecast. We have also seen our exports to some of the large emerging markets increasing strongly, a trend that we must accelerate to reduce our relative exposure to a slower growing Europe.
I turn to some of the specific initiatives driving this agenda forward. Following the Financial Services Act, the Banking Reform Bill, which was introduced in the previous Session, will enter this House for consideration before the Summer Recess. This Bill is fundamental to the Government’s commitment to pass the necessary legislation before the end of this Parliament to restore the financial system to stability. Only then can it effectively support growth in the economy. The Bill implements the recommendations of the Independent Commission on Banking, ring-fencing retail banking services on which households depend from more volatile wholesale activities.
In addition to strengthening our financial infrastructure, first-class economic infrastructure is a necessary condition for UK business to achieve global competitiveness. Our intention is to improve our approach to planning for, financing and delivering this critical infrastructure as we go through a significant period of renewal. This is very well illustrated by our ambitious programme to deliver transport infrastructure. We all know that good transport is essential to drive sustainable economic growth and prosperity. Efficient transport systems help UK businesses to be more productive by making journeys quicker and more reliable, supporting UK exports, enabling a flexible workforce, attracting inward investment and rebalancing our economy by generating development opportunities throughout the country.
In many cases, crucial transport investments are needed now to unlock growth and support the supply chain. That is why we are pioneering new ways to deliver infrastructure projects faster in all parts of the country, from essential highway maintenance that keeps traffic moving, to targeted improvements to our networks, to transformational investments for future generations. We will reduce the time it takes to plan and deliver new roads by up to a half and we are piloting a new delivery model for upgrades to the M1, M3 and M6. We have also focused our short-term investment plans on projects that will deliver benefits quickly, such as addressing pinch points and extending managed motorways.
Her Majesty’s gracious Speech announced the paving Bill and High Speed 2 hybrid Bill. High-speed rail is an engine for growth that will help drive regional regeneration, secure economic prosperity across Britain and support tens of thousands of jobs. We should not underestimate the scale of transformation that rail infrastructure is providing. Crossrail is the largest infrastructure project of its kind in Europe—it is going on at the moment—and is one of the largest single infrastructure investments undertaken in the UK. The high-speed rail link will be the first new line that we have built north of London for over 120 years —that is why we need it—and will boost our rail capacity, benefiting many throughout the country. Network Rail’s current investment in our railway infrastructure is the biggest since Victorian times. Introducing a paving Bill will allow Parliament to make a clear commitment to high speed rail. Crucially, the Bill will also give us the spending powers to progress the detailed design work for the scheme. We want to get this project moving and delivered at the earliest opportunity and this Bill will help us do just that.
It is not only railway lines that are being transformed but a concerted regeneration of major stations is currently under way. Two examples of this are, the £550 million part-privately funded redevelopment of Birmingham New Street that will stimulate the physical regeneration of the surrounding area, and the £850 million reconstruction of Reading station, due for completion in 2015, which will add five new platforms.
As to local government, we believe there is a significant opportunity to deliver our growth agenda more effectively by supporting the initiatives, capabilities and energy that exist in our regions and cities. Local government has a key role to play in local economic development. By implementing many of the recommendations in the review by my noble friend Lord Heseltine, the Government are handing power to the regions. We are committed to creating a single local growth fund for the key areas of skills, housing and transport. The final size of the fund will be set out at the spending round next month.
We have brought in local enterprise partnerships, with public and private participation, to co-ordinate regional development and enabled cities to take control of their own local economies through City Deals. Thus far, City Deals have been implemented in eight major cities, with 20 more to be agreed this year. Now we are going further by continuing the process of devolving resources away from Whitehall towards local leaders who know what is best for their areas. We are introducing a localism Bill and the general power of competence. The Bill will increase local accountability by empowering local people to hold councils and local bodies to account for local spending decisions and ensure that they deliver effective value for money. This is the final step in a programme of reforms to local audit arrangements that will close the Audit Commission and deliver an estimated £1.2 billion of savings over 10 years.
We are also committed to reforming the planning system to help achieve sustainable development. We have simplified planning and provided incentives for communities to support development through neighbourhood plans and the community infrastructure levy. The primary legislation required to enact this programme is in place, and we are now streamlining the planning application process, including by broadening permitted development rights by exploring opportunities to create new housing from shops and agricultural buildings.
Housing is central to our plans for economic growth but, more importantly, it is essential to the hopes and dreams of people across the country. Our aim is to help people achieve their aspiration to live in a home that gives them security. The Government are committed to addressing housing shortages through a major increase in the supply of new homes where they are needed and wanted. This is why the Government have committed to invest over £11 billion in housing programmes during this spending review period. It is why, to date, the Government have sold enough surplus public sector land to deliver 45,000 new homes. With our new guarantees programme, we now aim to deliver 200,000 new affordable homes by 2016-17 with over £20 billion investment. It is also why we are providing a package of support for councils and developers to help accelerate and unblock locally led large housing sites. In addition, we are of course making it easier to obtain a mortgage through our Help to Buy scheme.
Direct support for business is a key part of our plan to improve the UK’s competitive performance: this takes the form of tax incentives, progressive legislation, access to finance and other forms of intervention with a particular focus on nurturing smaller businesses. The National Insurance Contributions Bill will entitle businesses and charities to a £2,000 employment allowance each year. By reducing the costs of employment, this will support small businesses aspiring to grow. More than 90% of this benefit will go to small businesses with fewer than 50 employees. This Bill also builds on the robust stance that this Government are taking in tackling all forms of tax and NICs avoidance. Our approach is very simple: in return for offering a highly competitive tax system, we expect everyone to pay their taxes. The general anti-abuse rule reinforces this principle and will deter those who market and participate in artificial schemes. In addition, we continue to lead international efforts to develop a more effective cross-border tax framework.
The Government are also working hard to help UK businesses to increase their exports. We have supported 32,000 UK exporters in 2012-13, up from 25,000 the previous year. This has helped UK exporters to win billions of pounds of high-value export contracts, such as £150 million for an oil industry project in Brazil and over £78 million of new business for UK rail companies in Singapore. However, we want to do more, which is why we have committed to increase total annual UK exports from £488 billion in 2011 to a £1 trillion target by 2020. We plan to deliver this partly through increasing the number of UK SMEs that export from one in five to one in four.
If those SMEs are to grow, they need better access to finance. That is why we have set up the business bank with £1 billion of funding. Of the £1 billion, the Government will invest £300 million alongside private investors over the next two years in new channels, such as non-bank lenders.
We have also set up the Green Investment Bank to stimulate the additional investment required to finance the UK’s transition to a greener economy. In its first six months of operation, the bank has committed more than £635 million, including investments in each of its four priority sectors: waste, offshore wind, non-domestic energy efficiency and the Green Deal.
Beyond these schemes, we have implemented a package of credit-easing measures to improve the supply of affordable credit to SMEs across the country. For example, the Funding for Lending scheme was recently extended with incentives heavily skewed towards SME lending support. The £1.2 billion Business Finance Partnership was established to stimulate the development of alternatives to bank finance.
The Government are also supporting SMEs which lack a sufficient track record or collateral to access bank finance by providing government loan guarantees. Since May 2010, more than 10,500 SMEs have been offered enterprise finance guarantee loans with a total value in excess of £1 billion.
Her Majesty’s gracious Speech announced legislation that will further support SMEs in the design sector to drive growth through innovation by facilitating the protection of their intellectual property. The Intellectual Property Bill will implement the recommendations of the Hargreaves review. One of its key elements is the unified patent court agreement, which will make it possible for British businesses to protect their inventions across 25 countries in a single application. That could bring direct savings to UK businesses of up to £40 million per annum in translation costs alone.
The Department for Business, Innovation and Skills also plans to modernise and simplify our consumer rights framework through introducing a consumer rights Bill during this Session. In particular, this Bill will include important new protections for consumers buying digital content such as music downloads or software where legal protection is currently unclear. Clarity in this area should also reduce the regulatory burdens for business, with the aim of improving market performance.
In summary, I believe that our future prosperity depends on our ability to be competitive in a fast-changing world. That means competitive in terms of hosting businesses that can take on the world and win, and competitive in terms of attracting highly mobile capital and investment. This Government are determined to create the best possible financial and economic conditions for the UK to succeed in this race. First, we have to demonstrate that we can deal with the deficit—it is impossible to produce sustained growth if the public finances are not under control. Secondly, we need to complete our work in fixing the financial system so that it is able to sustain growth in the economy. Thirdly, we must implement the reforms necessary to improve our competitiveness. These range from the support we are providing for SMEs to investments in infrastructure and housing and to the devolution of important local spending responsibilities. I believe that this is the right recipe to convert from our current phase of economic healing to one of sustained recovery and the right recipe to unlock the aspirations of our nation by backing people who want to work and get on.
Lord Eatwell
My Lords, I am most grateful to the noble Lord, Lord Deighton, for introducing this part of the debate on the gracious Speech. If only all the good news that he spoke of had some connection with economic reality.
Like all noble Lords, I look forward to the maiden speech of the noble Baroness, Lady Lane-Fox. Many noble Lords may not know that she is an accomplished actress. It was surely no accident that one of her most successful roles was as Miranda in “The Tempest”, since Miranda famously hails:
“O brave new world,
That has such people in’t!”.
The noble Baroness has been a major force in guiding this country into that brave new world of information technology and is one of the most remarkable people in it. We are all delighted to see her in this House.
The whole House is keenly aware that the central issue facing Britain today is economic failure: no growth for two years, output still 2.5% below the level of four years ago, 1 million young people unemployed, productivity well below the level of 2008, the banking system still unreformed, and a government deficit that has not fallen significantly for two years—the worst economic performance of any G7 economy other than Italy.
Given the seriousness of our economic problems, it has been widely remarked upon that there are no Treasury measures in the gracious Speech other than the welcome national insurance contributions Bill and the banking Bill carried over from the previous Session. However, there should be no surprise at this inaction. It is the very essence of the Government’s strategy that the Treasury has a very limited role other than the maintenance of austerity. Activism is to be left to others. That is made abundantly clear in the recent most valuable outline of the Government’s economic policy that accompanied the Chancellor’s letter defining the remit of the Financial Policy Committee. It was echoed by the noble Lord, Lord Deighton, today, but he left out one bit. The letter declares:
“The Government’s economic strategy consists of four key pillars: monetary activism and credit easing, stimulating demand, maintaining price stability and supporting the flow of credit in the economy”.
All that is the responsibility of the Bank of England. The letter continues with,
“deficit reduction, returning the public finances to a sustainable position and ensuring … fiscal credibility”—
austerity—
“reform of the financial system, improving the regulatory framework to reduce risks to the taxpayer and build the resilience of the system”,
which refers to the banking Bill, of which there will be more later,
“and a comprehensive package of structural reforms, rebalancing and strengthening the economy for the future, including an ambitious housing package and programme of infrastructure investment”.
All this is predominantly farmed out to other departments.
Those are the pillars on which the Government’s entire strategy is built. It is worth considering just how sound these pillars really are. First, on monetary activism, there certainly has been plenty of activity—from quantitative easing and Merlin to the Funding for Lending scheme and now Funding for Lending mark 2. The difficulty with all that activism is that when there is a lack of demand, it is very difficult for monetary policy to achieve any traction, so QE2 follows QE1 and there is no noticeable effect on lending. Funding for lending offers banks cheap funds to lend at highly profitable rates, but there is no noticeable increase in lending. Now we have Funding for Lending 2, and without any prospect of sustained growth of demand the result will be the same—no noticeable increase in lending. It is no wonder that in his letter defining its remit, the Chancellor appeals rather plaintively that the FPC,
“takes into account, and gives due weight to, the impact of its actions on the near-term economic recovery”.
In other words, “give me financial stability, but not yet”.
What all that activism has achieved is a serious distortion of the monetary system. The rock-bottom interest rates of which the Chancellor is so proud have put pension funds under severe strain, and pensioners have no chance of buying a worthwhile annuity. The excess liquidity, unused for real investment, is funding a bubble in the stock market that bears no relation to Britain’s real economic condition. The conclusion is that monetary activism may help growth a little bit but fundamentally does not work. That is one pillar gone.
Of the next pillar, reform of the banking system, the key reform is of course the banking Bill. But which banking Bill, the watered-down version of the Vickers proposals favoured by the Treasury or the beefed-up banking Bill proposed by the Parliamentary Commission on Banking Standards? The banking Bill has already passed through Committee in another place, where any amendments related to the serious criticisms of the Bill in the Parliamentary Commission on Banking Standards’ report, published on 11 March, were resolutely voted down by the Government.
A further report by the commission is due at some time in the next four weeks or so. Will the Minister tell the House how the Government intend to deal with the arguments of these two reports? Will the Government recommit the Bill in another place? If not, how are the commission’s proposals to be dealt with in this House, or has the lobbying by the banks secured the Government’s commitment to ignore the commission’s arguments? Conclusion: the banking reform Bill is decidedly shaky.
I turn to the,
“ambitious housing package and programme of infrastructure investment”,
which the Chancellor claims are at the heart of his comprehensive package of structural reforms. These were referred to by the noble Lord, Lord Deighton. We certainly need an ambitious housing package. No peacetime Government since the 1920s have presided over fewer housing completions than this Government have in the past two years. The situation is getting worse. Housing starts fell by 11% last year to below 100,000, while house prices, particularly in London and the south-east, spiralled out of the reach of young people attempting to buy a first home.
So what do the Government do? Unbelievably, they increase the affordable homes guarantee programme that applies to the existing housing stock as well as new build, giving their own special twist to the housing price spiral. This British version of Fannie Mae should be focused on new build. That is what is needed. Even this bit of economic activism on housing is a bit too much for the Treasury’s do-nothing sensibilities. The decision whether the guarantee scheme is to continue in three years’ time is to be handed over to unelected officials at the Bank of England.
What of the programme of infrastructure investment? We were told in the Budget that the Government are planning a £3 billion boost in two years’ time. I ask the Minister why, when infrastructure projects are notoriously slow to get started, work cannot begin now. The Government are committed to borrowing the money in two years’ time, so why not borrow it today? Is the postponement not entirely due to the Government’s attempt to massage a falling trend in the deficit, however slight?
As to the railways, the welcome paving legislation for HS2 proposed in the gracious Speech heralds a change of heart from the more than £1.25 billion cut in railway investment in the last spending review. The planned increased of £9.2 billion for five years from next year is clearly needed and welcome, but will the Minister tell us how it is to be funded? How much of it is to be paid for by an increase in Network Rail’s debt and how much by yet more inflation-busting increases in rail fares? Conclusion: the infrastructure pillar may be in place at some time or other in the future but certainly not today.
Finally, I turn to the fourth pillar of the Government’s economic strategy: austerity, to ensure that,
“fiscal credibility underpins low long-term interest rates”.
As all noble Lords will be well aware, there is a growing international consensus among all serious commentators on economic policy that austerity strategies have failed. The academic work purported to validate the austerity policy has been demonstrated to be seriously flawed. As for Britain, Olivier Blanchard, the chief economist of the IMF, has said that the country is “playing with fire” if it allows stagnation to continue.
As your Lordships are well aware, in 2010 the coalition’s austerity transformed Britain’s growth rate from a steady 2% a year into an equally steady 0% a year, with little prospect of returning to 2% in the near future. The level of output remains stubbornly below the level of output obtained in 2008, while other countries have at least recovered from the worst ravages of the global financial crisis. What is the Government’s justification for clinging to this failed doctrine? The Treasury argues over and over again that any change to the strategy it has followed for the past three years will damage the Government’s credibility in the financial markets, and that the subsequent increase in long-term interest rates would outweigh any benefits from cutting taxes or increasing spending. Since this is the only shred of justification for sticking to the failed austerity policy, it is worth examining for a moment.
First, with whom are the Government seeking credibility? The answer is: the markets. Who are they? What they are not is some single malevolent force tying George Osborne’s hands behind his back as he pleads to be set free to stimulate growth. In fact, the markets comprise millions of individual traders who pore over their computer screens trying to guess how the markets will move in the next month, week or even the next few seconds, and trying to make a secure return. In other words, they are trying to guess what everyone else in the market will do in response, for example, to announcements by firms or Governments, to the release of economic data or to research reports. This is not easy, but it is made much easier if an authoritative source makes statements that every trader believes all the other traders will accept. We have had a striking example of this in the eurozone, where Mario Draghi’s statement that the ECB would do everything necessary to defend the euro convinced each trader that all the other traders would take Draghi at his word. Accordingly, the markets all moved together in exactly the way in which Mr Draghi wanted. Authoritative statements can move markets, so if all the traders are convinced that any relaxation of austerity will result in higher interest rates in the UK, it will.
Credibility is potentially a vice tightening its grip around the heart of the British economy, but what do the clowns at the Treasury do about it? They do everything they can to reinforce those traders’ beliefs. They turn potential into reality and they cry from the rooftops that the markets will tighten the austerity vice because it is the only justification they have left of a failed policy, and the danger for Britain is that anyone will believe them. At the same time, they falsify the arguments for abandoning austerity. No one is expecting George Osborne to take himself off to the Tower of London, crying out to the world, “I was wrong”—although when thinking about it, that is not quite such a bad idea. What we all hope for is a steady and carefully staged change of emphasis. Bring forward that increase in infrastructure spending; why postpone it for two years? A British investment added to a strengthened banking Bill, a jobs guarantee for the long-term unemployed, a real new-build housing programme, and, to improve the existing housing stock, a reduction in VAT on home repairs, maintenance and improvements—none of these requires a fanfare announcement; all they need is real activism from a do-nothing Treasury.
What is left of the four pillars?
Lord Forsyth of Drumlean
My Lords, I have much sympathy with what the noble Lord says about clarity. Can he tell us by how much the Opposition would wish to increase borrowing in order to deliver the programme he has just outlined?
Lord Eatwell
Gross borrowing could be increased so that net borrowing would fall. That is our strategy.
Again, what is left of these four pillars is something that the Opposition perhaps do not understand. The noble Lord, Lord Deighton, who has a good economics degree, understands it very well. What is left of the four pillars of the Government’s strategy? Monetary activism that does not work, a banking Bill that fails to reform the banks in the way that Britain needs, an infrastructure policy that recedes into the distant future, and a housing policy that does precious little for the new build that homebuyers and the construction industry desperately need. Last, but by no means least, there is an austerity policy that fails to cut the deficit but is very successful in cutting real incomes. Those are the four pillars, but what this Queen’s Speech reveals is that the Government’s economic policy does not have a leg to stand on.
Lord Empey
My Lords, every time the economy and public spending are mentioned, the word “growth” usually accompanies them. Today is no exception. People say that what we need are policies for growth, as this is the only way to close the deficit and reduce our borrowing. It is easy to see why this is a popular idea. When one looks at the graph of spending to borrowing, a rise in tax revenues brought about by an increase in economic activity would, over time, solve our problems—or would it? When we were enjoying economic growth, we increased our spending. We did not use the increased tax revenues to pay down our debt, so when the crisis of 2007-08 occurred, we were caught in a trap from which we have not escaped. Who said we are entitled to expect ongoing growth in our economy? Growth will occur only if we remain competitive. We no longer provide sufficient goods and services at prices that the world wants to pay. This is not surprising, for a number of reasons.
There is a deep-seated culture in this country that has not given a parity of esteem to those in business who have led the way in innovation and exports. In competitor countries such as Germany, those who decide to become engineers, for example, are highly regarded and respected. Vocational education in Germany is also regarded with higher esteem than it is in this country and not seen as what a student does if they have failed in the academic pathway, as is often the case here. This is unfortunate, because it permeates our education and governmental apparatus from top to bottom. There is a form of snobbery which perversely values those professions and skill sets that spend taxpayers’ money over those professions and skill sets that create it.
I had the privilege of being a member of the ad hoc Select Committee of your Lordships’ House which looked at SMEs and exports. We found a large number of potentially highly successful small businesses out there which are really trying—some are succeeding—to grow the export potential of this country. There is no lack of potential but there are failings which frustrated those of us on the committee and which we want to air when the report is debated later in this Session.
However, it is clear that businesses in this country are having to pass on to customers the overwhelming cost burden of a welfare state that we simply cannot sustain at present levels unless we have a larger economy. I come from a region which benefits greatly from the welfare state and the financial transfers from Westminster. As an elected representative there for more than 25 years, I know something of the plight and the dependence of many constituents who rely on having access to various benefits. To be blunt, this situation cannot go on as it is. When we were discussing the Welfare Reform Bill and the health legislation, many of your Lordships pointed to the hardship some of these changes would cause for individuals in the community. There is no doubt that this is true. What was lacking from these sincere expressions of concern was any apparent grasp of the dire long-term consequences of the UK’s continuing economic weakness for the future of the welfare state. Little emphasis was placed on how the wealth is to be created to produce the revenues to spend on so many deserving cases.
I will suggest a few steps we might take, to which the Minister, in winding up, will perhaps respond. I feel that the time has come to place a general duty on all departments to have regard to the economic well-being of this country. I also feel that all civil servants, irrespective of which department they currently serve in, should, as part of their terms and conditions, be required to have a general duty to look at the consequences of their actions on the economy. We need to review the priority given to wealth creation in our education system, which needs to run right through from primary to tertiary education. It is simply not happening on a large enough scale.
Turning to the Treasury estimates, there seems to be a muddled message in some of these decisions. In recent years, Governments of all parties have recognised the valuable role of our foreign service in promoting exports and trade abroad. With a meagre budget of £2 billion, the FCO is expected to promote our diplomatic and commercial interests around the world, yet the Department for International Development will have £10.7 billion to spend next year. Given recent diplomatic fallout from the decision to cut £19 million of aid to South Africa and a similar row last year over aid to India, who looks at the downstream commercial consequences of these decisions? Is there no way of handling things to avoid such bad publicity and possible damage to our long-term commercial interests?
This is one reason why I repeat my call for all departments to have to look at the economic fallout of their decisions. Perhaps there needs to be a form of economic proofing of departmental decisions. It will not be lost on many that with the international development budget growing while the defence budget is falling, there is a need for a review of how best to ensure that priority is given to the UK’s long-term national interests in these spending areas.
Since I came to your Lordships’ House, I have been struck by the division that still exists between those of your Lordships who can be regarded as Europhiles and many who are seen as Eurosceptics. Perhaps I will add another category: Eurorealists. The arguments of the 1970s are over. The UK took a decision to join the then EEC and we have seen that economic community change into a rival to nation states. I have no doubt that this was always the intention of the EU founding fathers, but it was most certainly not the intention of the British people. Ironically, many of those who are now sounding alarm bells about the growing appetite of Brussels for its own statehood supported the necessary legislative and treaty changes that have brought about the present situation.
As we are talking about the g-word—growth—today, it is obvious that significant business growth is currently available outside the EU. Indeed, parts of the EU face years of contraction and not a small risk of political instability as a result of the politics—rather than the economics—of Europe. The euro has been a disaster for southern Europe: there is 64% youth unemployment in Greece and 57% in Spain. For how long can this go on?
The EU is still a huge consumer market, to which the UK sends 40% of its exports, but it is not sufficient to generate the growth that we need. While there is no incompatibility between trading with the EU and with the rest of the world—including, I hope, a growth in our trade with the Commonwealth—the fact remains that Europe is making itself progressively less competitive with the rest of the world and we are powerless to stop this on our own.
I do not relish another four years—or maybe more—of these pro- and anti-European arguments. While at all times acting in our own interests, we must strive to shorten this period of uncertainty. I am not sure that a referendum or referenda can wait until 2017. I support the concept of a last-ditch attempt to renegotiate the terms of our membership of the EU. But we must remember that Brussels has only done and is only doing what we, as an independent nation state, through this Parliament, agreed that it should do. There is no point is blaming Brussels or the Commission for their actions; the blame lies in this House and the other place. We agreed to the free movement of labour within and between member states; that means that we agreed that the workforce in a country such as Bulgaria, with a minimum wage of 83p per hour, was free to seek work in this country. While it was never envisaged that the diversity of economies in Europe would be so wide, we had the opportunity to negotiate at the time of the various treaties, but we failed to do so.
We are in a pickle of our own making and it is in the interests of our future economic well-being to ensure as speedy a resolution to the Europe question as possible. No good will come of endless delay and procrastination.
The Lord Bishop of Birmingham
My Lords, I am grateful for what we have heard today of Her Majesty's Government’s aspirations for a stronger economy and a fairer society, because those two are held together at the head of the gracious Speech. We aspire to them ourselves, even as far north as Birmingham.
It is on the holding-together of these two laudable elements and the outworking of their detail that we must focus in the local economy day by day, person by person, job by job. There are, as we have heard, murmurs of good news. Foreign direct investment in greater Birmingham in 2012 rose by 52%, bringing in 2,200 new jobs and more than £174 million of new investment, four-fifths of which was within the sectors targeted by Business Birmingham—they are in some of the exciting areas about which we may hear later: IT, food and drink, life sciences, digital media, professional and financial services and advanced engineering. It was also good to hear about infrastructure developments. I recommend that any of your Lordships who visit Birmingham should do so via New Street station, which is already much improved. The airport runway is also being extended so that we can travel further. In real economics, we need to persuade air carriers to use our regional airports. Connecting up the macro and the micro is significant. High Speed 2 is welcome, particularly when the right compensation deals are agreed. Of course—to bring culture into the argument—Birmingham has one of the finest new libraries in the whole of Europe, to be opened in September this year. Universities are investing and so are hospitals.
Building on this apparent success in the regions is based on a recognition that well resourced employment is at the heart of a stronger economy and a fairer society. I was glad to hear the Minister mention local enterprise partnerships, inspired by the No Stone Unturned report, but I urge clarity on how much money is going to be attached to the now-published strategic growth plans that our region and, I am sure, other regions have, and when it will be forthcoming. It is in the further connecting-up of the macroeconomic and the day-by-day experience of ordinary people that we need to persuade ourselves here in Westminster that it is possible to delegate power and responsibility to talented and enthusiastic workers, businesses and institutions in our regions.
We will see a steady rise in the economy when we see a steady rise in the active participation in the economy of ordinary workers, people who want to use their skills and talents and to engage them in any way that is on offer to them. These macroeconomic policies will be tested on whether people have hope and changed lives in their local areas.
Perhaps I may drill down a little into practical matters. Those of us on this Bench are supposed to stick to principles, but I find that principles are best illustrated by hard decisions, particularly where money is concerned. In the wide-ranging Birmingham social inclusion White Paper, published in March this year and accepted by local businesses and politicians alike, economic policies are seen as being at the heart of changing society, particularly for those who are excluded at the moment. Let me mention just four areas which are of economic interest, and I would be very grateful for a response from the Government.
The first is removing the corrosion of youth unemployment. Birmingham has published, as I am sure have many other regions, commissions and strategies to deal with the appalling waste of young talent coming out from school through their not being able to engage in the economy. I encourage the Government to have even more flexibility in apprenticeship schemes and enabling businesses to take on more than just one person at a time. I recommend proper devolution of the implementation of those schemes through youth contracts to regions such as ours.
The second is the abolition of the spectre of unmanageable debt. That connects with what we have heard already this afternoon to do with banking. I focus on asking the Government to support credit unions even more strongly. That quieter, softer area of the financial world may not produce huge profits but can be profitable and can enable the 9 million people in this country who do not have access to bank accounts to manage their affairs in a way which will enable them to be contributors rather than dependants. But the Government must deal face-to-face with the appalling business of the poverty premium, which means that the poorest people in the country pay the most for the ordinary goods that we take for granted in our houses because they do not have access to finance and have not been able to save.
Thirdly, we have heard and will hear more in this Parliament about the banking system. I am delighted that my noble and most reverend friend the Archbishop is here, but I speak in your Lordships’ House today because he cannot be here tonight, he has church duties to perform. We have heard about the support for small and medium-sized enterprises and the £300 million that has been offered. I urge that to happen quickly in a trustworthy manner so that those employers, who form the majority of the business employers in the country, can have confidence in their ability to take on new workers and to develop their businesses.
Finally, I address local government more directly and the more widespread and long-distance issue, which is fundamentally economic but also social. That is continuing to promote cross-cultural friendship. I hope that your Lordships will forgive me for mentioning this in an economic debate, but it is economic because the Government have been supporting it through a Near Neighbours programme. Although modest in money terms, it has already reached out in our area to 120 projects, spending just under £400,000. The basic requirement is that people of different cultures and faiths meet together to engage in community activity. That underlies a successful and healthy economy—a strong economy, but also a fairer society. I trust that all those commitments will be given forensic attention in the next period.
The phrase that holds together a stronger economy and a fairer society that has been used lately in our debates is social cohesion. Your Lordships will know from your deep knowledge that it was first used by a former Archbishop of Canterbury, William Temple, in his Scott Holland lecture of 1928. In it, he said that all can flourish when, by the exercise of principles of freedom, fellowship and service, faith, family, church, trade and professional associations, businesses and voluntary movements working together can achieve what any nation wants: peace and prosperity. I urge the Government to attend to those details of ordinary lives so that people can immediately participate in a country that may again be one of the greatest in the world. In the words of someone whom William Temple heard just before he died, “Give us the tools in the regions and we will finish the job”.
Lord Forsyth of Drumlean
My Lords, it is a great pleasure to follow the right reverend Prelate, who is absolutely right to warn us of the considerable dangers of unmanageable debt both in households—private debt—and in government. We are heading for a doubling of our national debt by the end of this Parliament to about £1.5 trillion to £1.6 trillion. For the life of me, I do not know how it is possible to pay back that kind of money. We are passing on to the next generation a terrific burden, one that is tough enough already with interest rates that are well below historical norms. They will certainly go up, and with them will go the cost and burden of servicing the debt. I have considerable respect for the noble Lord, Lord Eatwell, but when I asked him by how much the Opposition wish to increase that debt still further, he did not really give me an answer. He told me that the Opposition did not understand this. I think that he meant the Government, but he may have been listening to the interview that his leader gave on the “Today” programme, which certainly gave the impression that the Opposition did not understand it.
Lord Eatwell
I am grateful to the noble Lord for correcting any verbal infelicities that may have occurred. I wonder if he has noticed that the significant government cuts in expenditure have not resulted in a falling deficit for the past two years. In the same way, an expenditure programme targeted on worthwhile activities that stimulated a flow of tax returns would result in a reduction in the deficit. One other small point: when he says that there is a burden on our children from this debt, I wonder if he ever thinks about who we owe the debt to. The answer is that one group of our children owes it to another group of our children. Collectively, there is no burden.
Lord Forsyth of Drumlean
That is all right, then; we will just write it off, there will be no problem and the world will continue to treat the pound in the same way. One of the extraordinary things is that although the pound has sunk significantly on the markets relative to other currencies, we are still not able to increase our exports and improve our productivity. As the noble Lord, Lord Empey, said, the key to this is being able to sell goods and services to a global marketplace competitively. Unless we can increase our revenue, we will not pay back the debt or, more importantly, provide the public services that the right reverend Prelate rightly emphasised as being of importance. The issue for us is how we do that.
The gracious Speech is a bit disappointing in the vision stakes. It is a list of Bills. One of the things that I have learnt in almost 30 years of being associated with Parliament is that legislation is seldom the answer to any problem, and usually creates considerably more. The idea that we should address every problem by thinking of a Bill or a new regulation comes out of this gracious Speech. To be fair, many people have said that they thought that the Speech was a bit thin, and in some regards it was. Perhaps it was modesty on the part of my noble friend, but I do not know why Her Majesty did not refer in the gracious Speech to the fantastic success that we had last summer with the Olympics, when Britain was advertised across the world as a competitive, successful and enterprising nation that was proud of its young people. My noble friend Lord Deighton played his part in ensuring that the Games were an enormous success, along with my noble friends Lord Coe and Lord Moynihan. Perhaps we could have done with a touch of levity in the Speech: I was itching to know whether Her Majesty had any further plans for appearing in Bond movies, for example.
I think that we have to go back to 1946 for the last time that there was a proposal to amend a Motion on the gracious Speech, which is happening in the other place. That amendment arises, again, because of the issues that the noble Lord, Lord Empey, pointed to—because Banquo’s ghost continues to haunt us. I cannot believe that it is now so many years since we discussed the Maastricht treaty yet I find myself mouthing the same arguments now to colleagues as appeared then.
I want to touch on the central themes of the gracious Speech. We have to improve Britain’s economic competitiveness and get Britain working and our economy growing again by investment in infrastructure.
I have to say to my noble friend Lord Deighton, who is a very clever chap, that whatever one’s views on the high-speed train—I have views that I had better not repeat because I want to be supportive of the Government—the immediate need is for jobs now. In roads and transport, we want people out fixing the holes in the road that are there today. We need more activity now in order to create employment. It is no good dreaming up fantastic, high-profile, wonderful schemes that will take place in 25 years’ time. We may not be around to see the benefits of those projects.
Similarly, there is talk of wanting another Bill to reduce regulation. Why do you need legislation to get rid of legislation? I should declare an interest as chairman of a small business that my daughter runs selling handbags—which are very good, by the way. Small businesses are not allowed any rates relief while they are setting up and before they start trading. Rates are a huge burden, particularly on the retail sector. They are competing with companies, such as Amazon, that pay no corporation tax or rates because, thanks to the splendid efforts of many entrepreneurs—not least the noble Baroness, Lady Lane-Fox, whose speech we very much look forward to hearing this afternoon—they are using cyberspace and are therefore able to escape taxation. Their competitors on the high street in bricks and mortar are faced with a burden of rates that they must pay regardless of whether they are profitable. It is no good saying that we are reducing the burden of corporation tax because you pay corporation tax only if you are making a profit, and our high streets are bleeding. We need to look at the burden of business rates and shift it in a direction that takes account of the needs of entrepreneurs and people starting up, particularly in retail.
The gracious Speech also refers to our commitment to encourage people to save for their pensions, but why do my noble friend and his colleagues in the Treasury continue to interfere and change the rules that apply to pension schemes? Raids started with Mr Gordon Brown’s on dividend tax relief. Then we had A-day; rules were going to be set in stone and people could rely on them, but in every Budget and finance Bill we have another nibble at the rules on pension saving. Why does that matter? People might say that it affects only the very wealthy who have built up very large pension pots. It matters because it undermines confidence in a long-term saving vehicle in a country that needs more long-term saving. Then you have the Government, who say that they are holding down interest rates because of their control on public expenditure—which, incidentally, is going up in cash terms—and who are funding their own borrowing by quantitative easing and creating, through quantitative easing, an artificially low interest rate. You then have the contributions that employers and companies must make to company pension schemes determined by the gilt yield. The result is that billions of pounds that would otherwise be going into growth and investment to create jobs for the future are going into pension funds, whence they will never come out because the assessed liabilities of those pension funds have been exaggerated by the Government’s quantitative easing policy. Far from quantitative easing helping, it is causing enormous damage and sucking productive funds out of the economy, from the private sector, which would otherwise be invested in job creation.
There is also the commitment to supporting the union, which, of course, I very much endorse, but if people are being asked to vote in a national referendum about Scotland’s continued place in the United Kingdom, which is in the interests of Scotland and the rest of the United Kingdom, we need to sort out the issues that remain unresolved from devolution and, in particular, the role of Scottish MPs voting at Westminster on devolved matters: the so-called West Lothian question. People voting in the referendum need to know what they are voting for. The Government simply cannot continue to run away from the West Lothian question. They need to say what the arrangements will be in future.
Similarly, if we are to continue with a devolved Parliament, we need a system of funding that is fair to Wales, England and the rest. Barnett is certainly not that. Repeated reports, including one from the House’s own committee that was set up for the purpose, have drawn attention to the unfairness of Barnett. The Government simply cannot say that they are concentrating on reducing the deficit and are therefore not doing anything about Barnett. That is a non-sequitur. There is no relationship between these two arguments.
On what is going on at the other end of the Building in respect of Europe, it seems that the central theme of the gracious Speech is our country being competitive and creating those jobs and opportunities that the noble Lord, Lord Empey, talked about. That depends on our looking outwards and recognising what is going on in Europe. It is not a matter of our leaving Europe; the rest of Europe is leaving us. It is going off on this madcap scheme to have a single currency. There seems to be no price that it is not prepared to pay in terms of the misery being created, particularly in the southern European states. They have unemployment among young people of 60%—more than half their youngsters unemployed. That is not only an outrage but simply unsustainable. The rest of Europe is determined that no sacrifice is too great for the sake of this project.
Lord Spicer
Can my noble friend confirm that one of the reasons why it will be so difficult to renegotiate the repatriation of powers that he has implied already is the acquis communautaire? The acquis insists on all movement, all the changes in the treaty, going in one way: towards a federal state. It is endemic in the treaty and is always supported by the court.
Lord Forsyth of Drumlean
My noble friend is absolutely right. I remember, when I was an Employment Minister, spending hours trying to prevent the working time directive coming into being, which ended with our challenging it in the courts and being advised that we would lose because the court has a duty to promote the acquis, which is about integration. We are involved in a club that has a particular direction. That direction is to create a country called Europe with one Finance Minister, one currency and one set of interest rates, which will take no account of the relative competitiveness of the member states. We can see what is happening. The result will be years of economic decline. It is our marketplace. It is a big marketplace, of course, but the rest of Europe actually sells more to us than we sell to it. We have a Commonwealth. We have relationships around the globe. We need to get out there and sell to those parts of the world that are growing. That is where our future lies. It does not lie in being tied up in sclerotic bureaucracy created by this organisation called Europe.
As to the referendum, all the political parties are split to one degree or another on our membership of the European Union. We should have a referendum as soon as possible. Just as it was argued in Scotland that we should have a referendum in order to end the uncertainty as quickly as possible, so we should have a referendum to end the uncertainty about our continuing membership of the European Union. Some of my colleagues who are of the same view as me say, “We might lose. Perhaps we should delay it. Perhaps we should put the arguments for longer”. Others, who are in favour of us maintaining our current relationship, take the same view. Let us trust the people and let them decide.
I say to my noble friends that the most disgraceful thing has been the behaviour of the Deputy Prime Minister and the Liberals on this matter. I took part in the general election campaign. I saw the leaflets that were produced asking us to sign a petition to send to Liberal headquarters, with a picture of the Deputy Prime Minister saying that the people of Britain must be given an in/out vote. That is what the Liberals fought the general election on. Indeed, the former Prime Minister, Gordon Brown, was attacked by Nick Clegg at Prime Minister’s Questions for not giving the people an in/out vote. Nick Clegg says that he wants to restore trust in British politics. Holding the Prime Minister hostage and preventing him giving the people a say on this crucial matter is a very funny way of doing that. Let us have a referendum, get it out of the way and then concentrate on building our prosperity by selling our goods and services to the rest of the globe, and using those relationships—our soft power—to make Britain produce the resources and revenues that we need to fulfil our obligations to our fellow citizens.
Baroness Kramer
My Lords, I do not flatter myself that so many noble Lords have remained in this Chamber for my speech, but rather for the speech of the noble Baroness, Lady Lane-Fox, who will follow me—and quite right, too. I very much hope that she will address the issues of entrepreneurship in such a cutting-edge industry. That will be fascinating, not just on a personal level, but because it lends itself so much to the issues of economic growth that we are talking about today.
The opening phrases of the gracious Speech indicated that the Government’s purpose is to focus on building a stronger economy and promoting a fairer society. Let me wholeheartedly endorse those two principles, which must go hand in hand. This country has, at times in its history, pursued one but not the other, and that has damaged us as an economy and a society.
Much of the work of rebuilding the economy is already under way. I will pick up on the latest measure that was in the Queen’s Speech, which is extremely positive, namely the commitment to introduce a new employment allowance of £2,000, not least because its simplicity should make it very attractive to small businesses. We have heard again today, from the right reverend Prelate the Bishop of Birmingham, and others, that small businesses are key to the future of this country’s economy. This should be a spur to new hirers.
I commend the Government on resisting the temptation to constantly think up more legislation in the finance area, where we already have crucial banking reform legislation to deal with. I am on the Parliamentary Commission on Banking Standards, and our report will come out in the next few weeks. The Government slightly surprised me today by saying that that Bill will come to this House before the Summer Recess. It is very important that the issues raised in our final report have the opportunity to be properly considered, and, on many fronts, incorporated into that legislation. I therefore ask the Government to take a serious look at the timing.
I agree with one part of the speech made today by the noble Lord, Lord Forsyth: it is sometimes a relief that we have a Government who do not constantly try to address every problem by producing yet another piece of legislation. When we heard the noble Lord, Lord Eatwell, essentially complaining that there were not enough new laws in the Treasury field for this section, I thought, “Labour’s continuing with its old habits of legislation”. I am glad that he finally agrees that implementation and governance are the right answers, but those are not the words that his colleagues have used.
In these uncertain times in which we live, it is unwise to overestimate green shoots in the economy. However, I have been struck by the very positive tone that I now hear from a wide range of those working in small businesses, in business accountancy, and even in the commercial sector of the banking industry. Help to buy is having a very big impact on the housing market; Barratts has reported the highest demand for five years, and now warns of a possible skills shortage in construction, which it is combating by planning for 600 new apprentices and graduates over the next three years. The CBI report also reinforces the sense that there is momentum.
We have seen these signs before. In 2011 confidence began to grow, but was knocked back with the problems in Greece, and in 2012 we began again to see gathering confidence, which was then shaken by concerns over Italy and Spain. This time, however, there is a broader base, with a pickup in the service sector, non-EU exports, manufacturing output and retail sales. I would love to hear from the Government about retail sales, but I understand that much of the pickup comes from the over-45 age group, which, frankly, was much less impacted by unemployment and by wage compression. That group has the capacity to spend, and if it is starting to again, that is a very important message for the economy.
Of course, any return to recovery has its own risks. A few months ago it was fashionable to suggest that many companies in the UK were essentially zombie companies—the walking dead that would collapse in an economic revival. Thank goodness that theory has largely been discarded because it does not fit the facts. However, it is true that as the economy improves many companies will quickly chew through their cash reserves, and it will be absolutely critical that we have a banking sector able to meet the demands especially of small and medium-sized businesses. I confess that this worries me.
The Government’s decision in the Budget to continue and expand Funding for Lending, with much more emphasis on small business lending, was significant and welcome. The big banks have been clearing their balance sheets and trying to retrain their staff to look at the sector, and they should have enhanced lending capacity—although I remain sceptical about the low levels of demand that they insist exist in the economy. However, as the economy recovers we will definitely see a very significant pickup in demand for credit. It will come not in steady increments but in waves of expansion. We cannot afford for the banks to fail us again. If they are correct that only lack of demand has been holding back the flow of credit, we should see that change. In case they do not, I hope very much that the Government are looking at additional contingencies. It would be terrible to lose the opportunity of a rising economy because our banking sector, which has never focused very much on the real economy in the UK, failed to live up to expectations.
In the long run, new banking players and non-banking players will enter the credit market. We must never again depend on just four institutions, as essentially we do today. I am very pleased that we are close to achieving a proper regulatory framework for peer-to-peer lenders, and that they are getting support from the business bank. I congratulate the regulators, the FCA and the PRA, on a complete about-face in historical strategy. They are now setting out to remove barriers to the entry of new banks. Measures such as seven-day account switching will finally let ordinary people change their banks to get a better service, and will open the opportunity for new players to thrive. The Chancellor has proposed that the regulator should take on the payment system—the plumbing of financial services and banking—which has been in a sclerotic state and made it almost impossible for any new players to enter the market. We are moving towards an environment where competition is encouraged.
I am still concerned that waiting for banking and credit markets to grow organically and provide us with new players of any size will take longer than we can wait, and longer than one economic cycle. For that reason, I urge the Government to look closely at RBS, and possibly Lloyds, and consider splitting them up. People talked about splitting RBS into a good bank and a bad bank. That would have made sense five years ago but we are past that point now. Much more interesting would be a split into a number of regional banks that could identify and focus on the needs of each regional business base. For decades we have let the market shape our banking industry. It has been a disaster; we have seen nothing but consolidation and homogenisation. We now need the Government to tackle the failings in the structure of the industry, not just the failings of individual banks, which they are tackling with capital requirements, ring-fencing and other measures, so that it is fit for purpose, and the purpose is serving the real economy.
I know that Lloyds and RBS have had trouble selling off the pieces of their own banks that they have been forced to sell by European law. Two points are relevant here. One is the appalling legacy technology that the institutions are burdened with, which has not been brought up to date. The other is a general expectation that they will simply consolidate into another new big bank rather than remain sustainable as regional organisations. Economies of scale have dropped sharply and dramatically with modern technology. Highly competitive regional banks have proved viable across the globe. If national banks cannot serve our businesses and regional banks can, we should seize the once-in-a-generation opportunity of returning two major banks to the private sector to build the banking structure that best supports our economy.
Baroness Lane-Fox of Soho
My Lords, I am not the first Lane-Fox to make a maiden speech, but I think I may be the first Baroness to have a survived a virtual and a real-world crash. In 2000, the company I cofounded, lastminute.com, was navigating the choppy waters of the dot com boom and bust. Frankly, it was difficult—but she survived and thrived, as I was extremely fortunate to do when I was flung from a car in 2004.
The friendliness of this House is legendary, but I have been overwhelmed by the support and kindness of everybody, most recently in the past two minutes those who came to find me to tell me that I was coming up right now—but also the security staff, attendants, and catering and administrative staff. My two supporters, the noble Lord, Lord Chadlington, and the noble Baroness, Lady King, have given invaluable advice and were endlessly jolly on the day of my introduction, which banished nearly all my nerves.
My great aunt, Felicity Lane-Fox, gave her maiden speech in 1981, talking about disability rights, so I feel that it is particularly poignant that I can stand up and make a speech now and try to follow her great example. I would like to reassure any noble Lords who might remember Felicity that I do not intend to career down corridors towards my detractors, as she was given to doing in her newly electrified wheelchair—a weapon of persuasion.
When we started in 1998, we spent most of the time at lastminute.com convincing investors, suppliers and customers that the internet would be a force for good in the economy and was not about to blow up. It was surprising to me that well over 10 years later, when I was asked to become UK digital champion, I again spent my time convincing two successive Governments and millions of people in the country that the internet has much to offer. Shockingly, there are still 16 million people in the UK who do not have basic digital skills, and 7 million who have never been online. But we do have strong digital foundations: the internet accounts for 8% of our GDP, the highest of any G20 country, and recent forecasts suggest that 25% of our economic growth will come from the internet sector in future. We have competitively priced access and the highest number of online shoppers in the world. But I would like to argue that we should go much further and build on those foundations. I see usage of, and access to, the internet as a basic right that all citizens should be able to enjoy.
Why does it matter that so many people have never used the internet or do not have those basic digital skills? Partly, it is because we know that the majority come from the most disadvantaged communities—yet we also know that, if you are online, you are 40% more likely to be able to get work and will achieve 25% better results in education. Even the lowest income families will save up to £170 a year from online deals. In addition, the data show that feelings of loneliness and isolation are dramatically reduced when you get online. Some 1.5 million of the unskilled live alone and see nobody in a whole week.
British businesses also need support, as has been mentioned here already, and small and medium-sized business in particular. We know that only 30% of them are able effectively to use online tools, and that there is a potential £18 billion in the economy if we are able to give them more advanced skills to sell and buy online.
I have been fortunate enough to meet many people who have told me of the transformative power of the internet on their lives, but one young man I met in Leeds I think of often. He told me that the internet had saved his life. Saved his life—really? Even I was amazed. But he described how, homeless and addicted to drugs, he had ended up at a drop-in centre in Leeds, where they had encouraged him to learn some new skills, and now he was making music and selling it all over the world as well as teaching other people in his community—a budding entrepreneur and giving something back.
We must not create a two-tier society but aspire to a universality of digital skills. We must make sure that the potential of all our citizens is unlocked. I believe that this will help the UK prosper and grow at a national level and at an individual one. Only when we focus on all aspects of digital growth, both infrastructure and skills, will we be a truly digital Britain. In this tough economic climate, the internet is such a powerful tool to help people manage the trickiest circumstances of their lives, whatever their age and whatever their location.
This is not an impossible challenge. The charity I founded, Go On UK, managed to reduce the offline population by 50% in just six months in Liverpool last year by bringing together interesting partnerships in that one area. However, we know that all the data show that by far and away the most effective method of spreading skills is through peer-to-peer support, so, naturally, as I look around here, I see a room full of potential.
The internet has had a profound effect on my life. It has enabled me to start businesses and to work with charities and has helped me to endure long periods in hospital as well as deepening my cultural life in a way that I would never have thought possible. I am honoured to join this House and hope that from here I can continue to encourage and champion a truly digital Britain.
Baroness Wheatcroft
My Lords, it gives me great pleasure to follow the noble Baroness, Lady Lane-Fox, and I congratulate her on such an insightful maiden speech. As others have said, she is a very welcome addition to this House, bringing to it a remarkable business background and a determination to help everyone make the most of digital technology. She is now working with the Cabinet Office to that end, but I first met her when she was running lastminute.com, the business she started with Brent Hoberman. Unlike so many digital businesses, lastminute.com is still going strong. However, the noble Baroness, Lady Lane-Fox, has moved on and now sits on several boards, including that of Marks & Spencer. She has also launched a chain of karaoke clubs. I like to think that many of your Lordships are members and enjoy their facilities.
In February, “Woman’s Hour”, that most influential of programmes, anointed her as one of the 100 most powerful women in the UK. From what we have heard today, I am certain that she will make a very powerful contribution to your Lordships’ House. Britain needs more people to build businesses and create wealth. The gracious Speech spelt out that the Government’s first priority is to strengthen Britain’s economic competitiveness, but we have a long way to go. I am delighted that by 2015, this Government will have cut the rate of corporation tax to a level which makes the UK the joint lowest in the G20, but a low rate of corporation tax will not ensure our competitiveness. The UK suffers from a dire level of productivity. Figures released in February by the Office for National Statistics showed that output per British worker trailed the G7 average by 21% in 2011. Output per hour was some 16% worse than across the other major industrialised economies, the worst figure for 18 years. Economists expect that the picture will be even bleaker in the current year. According to Spencer Dale, the Bank of England’s chief economist, the level of private sector productivity is around 15% below the level that would be implied by a continuation of the trend before the economic crisis hit. My noble friend Lord Deighton pointed to the new investment in infrastructure and transport being made and that will help, but it will not cure the problem.
Today, in his inimitable style, the Mayor of London gave his own explanation for why UK productivity may be low. He referred to classic,
“British short-termism, inadequate management, sloth, low skills, a culture of easy gratification and underinvestment in both human and physical capital and infrastructure”.
No doubt London’s business leaders will wish to respond to his considered view. I do not completely share it. However, it is clear that low productivity disadvantages the country and we need to find a way to improve it. The gracious Speech heralded some welcome measures for business—in particular, the promise of further deregulation. Red tape remains a major hindrance to business efficiency and undoubtedly puts UK firms at a disadvantage when competing particularly with those from outside Europe. Europe, of course, is where much of the red tape begins.
I also applaud the move cited by my noble friend Lady Kramer to exempt companies from the first £2,000 of their national insurance bills. That should encourage businesses to recruit, but the Mayor is right when he cites low skills and a lack of investment as the key to Britain’s productivity problems. The Government are doing their best to enhance the skills of those currently in the education system and are committed to trying to ensure that school leavers not going on to university move into training or apprenticeships. However, we have far too many unskilled workers. According to the Chartered Institute of Personnel and Development, there are on average 45 people applying for every low-skilled job. Improving the skills of the older unemployed is essential—and so is investment.
Britain’s companies are sitting on an unprecedented cash pile. Non-financial businesses had a total of £672 billion in the bank last year. The Government have tried to encourage them to invest. Generous capital allowances are available but that policy has not been noticeably successful. There seems to be a risk aversion in business and the key may be to address the chronic short-termism that the Mayor cites. The owners of big businesses, the shareholders in public companies, do not encourage investment for the long term, because they are too interested in short-term gains. We need to find a way of encouraging investors to think long term and to foster an attitude that does not view stocks as mere gambling chips. There have been many investigations and reports into this but, so far, nobody has found a solution. If the Government were to find some means of encouraging and rewarding institutional investors for taking a long-term view, it would result in an improvement in productivity.
The other aspect of the economy on which I should like to focus is the dominance of London. Even allowing for the importance of financial services to the capital and the hammering that the sector has taken in recent years, London’s economy has outperformed that of other regions since 2007. Between 2007 and 2011, it grew by a nominal 12.4%, compared to just 2.3% in some parts of the country and no more than 6.8% anywhere else. This led to London’s share of output increasing from 20.7% to 21.9% over that period. The right reverend Prelate the Bishop of Birmingham spoke eloquently of the needs of the regions.
Whether the statistics say that we have escaped a double-dip recession or not, there are many parts of the country where the views of economists count for little. If it looks like a recession, if it feels like a recession and if it hurts like a recession, it is a recession. The Government are pledged to push a greater proportion of growth-related spending to local areas from 2015, and we have heard how that will be of benefit. However, more can be done. The numbers employed in the public sector are decreasing but will remain substantial. Wherever possible, those jobs should be pushed out of London—not just the clerical jobs but the jobs at the top. In the digital age, with Skype available to all, there is no need for everyone to be in the capital. The savings in property costs would be beneficial, as would the boost that would be delivered to the regions. I am sure that plenty of civil servants would hesitate even to contemplate this and might talk about the huge transport bills that they would incur when coming to London for meetings. Forget it; they can just go online. I am sure that the noble Baroness, Lady Lane-Fox, can advise on how that could be done. There is much talk of rebalancing the economy away from financial services to manufacturing, but a bit of rebalancing away from London would also be a good idea.
Lord Lea of Crondall
My Lords, as the first speaker from these Benches following the outstanding maiden speech of the noble Baroness, Lady Lane-Fox of Soho, I add that, as someone who has always been in difficulty in working my computer, let alone shopping online, I stand in awe of anyone in that line of business. Perhaps I can get some private tuition.
I welcome the role that the Bishops are taking on as the only territorial representatives in this House, as well as now having the financial expertise of the most reverend Primate the Archbishop of Canterbury, in both cases indicating a relationship to real people in real communities.
I wish also to refer to the highly political 16-minute speech of the noble Lord, Lord Forsyth. No attempt was made by the Whips on the government Benches to remind him that eight minutes had been advised. It was a 16-minute speech, and I trust that the government Chief Whip will now confirm that we can all have 16 minutes, especially in our case, as my noble friend Lord Bhattacharyya seems to have disappeared.
Lord Forsyth of Drumlean
My Lords, I am most grateful to the noble Lord. I think that I was interrupted, and also no time limit has been specified for this debate.
Lord Lea of Crondall
There is an advisory limit of eight minutes. I inquired and that was stated. I do not know whether anyone would like to confirm that that is the case.
Lord Wallace of Saltaire
My Lords, as the question has been raised, the Chief Whip gave the advice that if Members were to keep their remarks to eight minutes we would finish at 10 o’clock. I am advised that it is traditional in debates on the Queen’s Speech not to enforce the advisory rule, so it is entirely open to noble Lords still to be here at one o’clock in the morning if they so wish. However, if anyone were to go on for a very long period, I dare say that noble Lords would have ways of making their feelings on this known.
Lord Lea of Crondall
My Lords, I have no wish to produce the result whereby people are here at one o’clock in the morning. I simply say that I hope no one thinks that there is any discourtesy if, in the light of what has been said, one does not stick to eight minutes.
As my noble friend Lord Eatwell pointed out in his magisterial analysis of the short term, austerity will not improve our tax revenues, nor will it reduce our tax expenditures. There are perhaps three timescales over which one can analyse economic prospects: short, medium and long, by which I mean for the short term possibly three to four years, for the medium term 10 to 15 years, and for the longer term perhaps 20 to 30 years. The post-war architecture of the world economy—Bretton Woods and so on—goes back no less than 70 years. The IMF and the World Bank were the main institutions created at that time. Surprisingly—it is hard to think that it is true—the European Union in all its manifestations now goes back for the best part of 50 years. It is partly in view of the extraordinarily peremptory and dismissive speeches made by the noble Lords, Lord Forsyth and Lord Lawson, in recent days that I will concentrate on the second and third of those timescales.
Their recipe for leaving the European Union and indeed for the future of the nation as a whole is, in my view, catastrophic. It is going down an ideological road and is far from an objective analysis of our economy and our place in the world. It is also as far removed from pragmatism and empiricism as something that went on in the Labour Party in the 1980s, and that is where the Conservative Party will wind up if they follow that line. In the short term, it will be, as I said, catastrophic. Figures published today by the TUC, which has done some analysis of the statistics of the International Monetary Fund, suggest that by 2017 our per capita income in Britain will have increased by precisely 0.0%. I know it sounds extraordinary that a figure should be as precise as that but it works out that our living standards, our per capita income, in Britain will have risen by precisely 0.0% since 2008. Given the vast increase in the quantum of the top 1% and, indeed, 10%, that explains the deep cut in living standards for the median and the vast majority of the British people who, not surprisingly, are angry and disorientated as a result, and are prepared more readily to listen to sophists such as Mr Farage and others nearer to home.
I acknowledge that the EU as a whole has not had a very much better record, although perhaps I may draw attention to the fact that per capita incomes in the same series in Germany and Sweden—two examples of northern Europe—will both be projected to have risen by 10% in this period, a point to which I will return. In passing, I will also mention that on a couple of occasions I have asked my noble friend Lord Eatwell a rhetorical question about how we will pay for this, that and the other without increasing the deficit. The noble Lord, Lord Forsyth, says that we have to get on urgently with filling up the potholes. Perhaps he will pay for it himself but I assume that it will come out of public expenditure.
What is the bigger economic picture that we face in this country? Just to put the numbers another way, the loss of output in these 10 years below our earlier potential of roughly 2% growth per annum comes out at some extraordinary numbers. If you look at the cumulative loss against that trend, by the year 2017 it will work out at some £3 trillion—£3,000 billion. It will not be £30 billion or £300 billion but £3,000 billion. People can work it out for themselves. The noble Lord, Lord Forsyth, is looking puzzled but if he does a bit of mental arithmetic he will find that that is in the right ball park. I know he does not have time to work all that out in the time of my speech but perhaps later he will realise that my figures are accurate. We are talking about figures that are worse than the slump in the 1930s after the parallel banking crisis of 1929, from which we only recovered the full scale of our potential during the late 1930s and the Second World War, as, of course, did Germany and the United States.
As to my own prescription or views regarding these matters, I do not begin by wanting to be orthodox in terms of Labour Party policy. I do not think that that is the role that one is necessarily here to play. I am generally orthodox but I just should like to draw attention to one or two features of the trade deficit. It is not that we cannot grow our economy in the European Union. If the EU per se is the reason for some incompatibility because of so-called red tape, how is it that Germany, despite absorbing a very weak East German economy over the past 20 years, has a GDP per head of 121—if we put EU equals 100—while ours is 109?
Germany, of course, which relies much more than we do on something as old fashioned as manufacturing, is rarely mentioned by the new ideologues. They seem to think that there is something magic about the City of London. For every £2-worth of goods or services—in the statistics they come to the same thing—we now export, we import £5-worth. This is, in part, to do with our exchange rate. Of course we cannot go on devaluing the pound without our living standards falling. However, if we want to regain our competitiveness, I could argue at the same level of abstraction as the noble Lords, Lord Forsyth and Lord Lawson, who think they are brilliant economists—I do not think that I am a brilliant economist but at least I can see the fallacies in what they are saying—but what is wrong with saying that although we are now stable at 85p to a euro we would be more competitive at parity with the euro? That is a devaluation of 15%. With the growth of our educational system and our whole industrial policy, perhaps that would ensure that we stay, for once, at parity with the euro.
I do not anticipate great enthusiasm for what I have just said but is it not a fact that our trade deficit is a fundamental issue both within the European Union and outside it? Simply asserting that we have got to trade with the rest of the world in no way addresses that fundamental question. As for the European side of growth, that, too, goes back to Lehman Brothers five years ago. It is not as if the whole of the European slow growth was created within the European Union.
The other point which needs to be put to these new iconoclasts is whether they would stay in the European Economic Area along with Switzerland, Norway and Iceland. There is plenty of red tape in the European Economic Area. We signed the EFTA treaty in Stockholm leading up to its creation in 1960 and there have been rules on state aid and so on. The noble Lord who referred to the acquis, the noble Lord, Lord Spicer, who is not in his place, is correct in that if we were a member only of EFTA we would be following all of the acquis without having a seat or a vote at the decision-making table. Would he be happy to be in that position? He has given no clue as to the scenario we would be expected to vote for if he had his way.
The third and final fallacy—I am still three minutes off my 16 minutes—concerns relying on the City of London. The noble Lord seems to want to have it both ways. Either it is the centre of Europe’s financial system and dependent on our being part of the EU for its strength, or it will somehow have a comparative advantage in its own right without our being part of the European Union. The noble Lord must have missed the speeches by leading officials in China, the United States and elsewhere, who have said that of course our share of world investment would be considerably at risk if we were to leave the European Union.
In conclusion, “Stop the world, I want to get off” is a policy which I am sure the British people, when they are told the truth—we are told that we have to get them to understand the truth, but that is a bit difficult when the Murdochs, the Daily Telegraph, Daily Mail and so on do not allow them to know it because for the most part they censor it—will reject. On the state of British public opinion, I shall read out three or four statistics taken from a new survey produced by YouGov/The Fabian Society looking at the attitudes of the younger generation, those aged between 18 and 34. They were asked:
“How convincing or unconvincing do you find the following statements in favour of the European Union? … It has given people the freedom to travel, work and live in other EU countries”.
Some 60% found it “fairly convincing”. Perhaps I should send an e-mail to the noble Lord, Lord Lawson, in France saying that I hope he is happy that that has enabled him to live there.
“The EU has agreed common standards of workers’ rights, consumer protection and played an important role in guaranteeing the social rights of individual citizens”.
The response showed that 48% found that statement “fairly” or “very” convincing against 15% who did not.
“Co-operation between EU countries is the best way to tackle the big issues of our time, like climate change, the global financial crisis and international terrorism”.
Some 49% said yes, while 18% said no.
“The EU has helped keep peace in western Europe since the second world war”.
Some 47% agreed and 17% did not.
Perhaps I may say in my final sentence that, so far as peace in the world is concerned, it is essential that Germany, France and ourselves are in the same Europe with a common defence approach vis-à-vis the rest of the world. That point will become clearer and clearer as this debate continues.
Lord Razzall
My Lords, first, from these Benches I congratulate the noble Baroness, Lady Lane-Fox of Soho, on her brilliant maiden speech. Like other noble Lords, I look forward very much to her contributions to the deliberations of this House and her contribution to driving growth in the economy, which she touched on so ably in her remarks.
There has been much criticism of the gracious Speech, particularly from those on the Benches opposite, who suggest that it is slight and insubstantial. I do not share that view. The criticism suggests that the role of government is to legislate. I do not believe that that is right; the role of government is to govern. Do we really believe that the 30 or so crime Bills in 13 years of Labour Government caused the recent drop in crime rates? I certainly do not. I come from the school which believes that we have too much legislation, and I have often thought that occasionally a one-line Queen’s Speech saying, “My Government propose no legislation this year”, would be appropriate. Whether your Lordships agree that the primary role of government is to govern, all must agree that the Government now face two major challenges, both of which have been touched on by other noble Lords: what to do about the economy and what to do about Europe.
On the economy, there is common ground that economic growth will not be forthcoming without a correction in aggregate demand. Unlike in the 1930s when Keynes was a lone voice against the austerity measures of the Bank of England, there is also now common ground that an economic slump is not self-correcting, that there are limits to monetary policy alone in dealing with a deficiency in aggregate demand, and that fiscal policy plays a significant role in stimulating demand. But then policy advocates part company. On the one hand, Keynes is prayed in aid, particularly on the Benches opposite, to dignify any proposal to spend more money and oppose cuts, while on the other hand, the right wing—not represented quite so strongly here—sees its authority in Hayek rather than Keynes to justify supply-side arguments—namely, that we need more deregulation, to scrap employment legislation, and that growth will come from the private sector always filling the space left by a retreating state. I have always leant towards the Keynesian side of the argument, but I have to accept that the UK crisis since 2008 is different from that in the 1930s.
In the 1930s, we did not see the difficulties in the banking sector that we have had since 2008. Indeed, in his classic work, Keynes hardly mentioned the problems of the banking sector. If we take banking assets relative to GDP, the UK has the biggest banking sector of any major industrial country. The banking crisis and the measures taken to avoid future crises have, as my noble friend Lady Kramer said, seriously impeded credit flows, particularly to SMEs and to individuals. As the Minister indicated, the Green Investment Bank and the business bank represent an attempt to start to deal with this problem. However, progressing from millions to billions being available for investment through those two institutions will not be easy.
To understand the other difference with the 1930s, I need to be a bit technical. In the 1930s, Keynes assumed that private sector multipliers of two to three times for every £1 of public sector spending would apply. However, the Office for Budget Responsibility now estimates that there is an income multiplier of only 0.4 for tax cuts and revenue spending and a multiplier of one for capital projects. Tax cuts, or an increase in current spending as advocated by certain members of the Opposition, would have significantly less effect on the creation of demand and carry a much greater risk of damage to our credibility in world markets and our ability to finance the deficit. When the coalition Government were formed in 2010, it was clear that the UK would lose the confidence of our creditors without a credible plan for deficit reduction. However, the issue for the Government now is whether the balance of risks has changed. In May 2012, the IMF said that the risk of losing confidence as a result of a more relaxed fiscal policy, particularly the financing of more capital investment by borrowing, may have diminished relative to the risk of deterioration of public finances through lack of growth. I believe that there is now a case for a significant increase in public investment where there are impediments to growth, particularly capital spending on housing and infrastructure spending on the so-called “shovel-ready” projects.
On Europe, the noble Lords, Lord Lawson and Lord Lamont, as well as television star Michael Portillo, have now weighed in on the side of the “come out” camp. I am slightly reluctant to intrude on Tory grief over this issue but will make three points against them. First, the noble Lord, Lord Lawson, disagrees with the common assumption that leaving Europe would cost 3 million jobs. Indeed, he said that the Deputy Prime Minister was talking “poppycock” in using that argument and knew nothing about economics. As Alistair Darling said in the Times last week, although any assessment is theoretical, even if only 1.5 million jobs would be lost, that is a lot of jobs. Secondly, the main thesis of the noble Lord, Lord Lawson, was that our presence in Europe distracts our industry from competing in the growth markets of Asia, India and South America. However, it does not seem to stop the Germans in those markets—and they do not want to come out of Europe. The third argument against those advocating coming out seems to be the potential loss of international investment. The motor car industry is a classic example of an industry that has seen major overseas investment, primarily because of our presence in the European Union. The motor vehicle industry is a huge success story—last year, for the first time ever since the creation of the motor car, we exported more motor cars from the UK than we imported. Why should Tata, the Japanese and the Americans locate a new plant in the United Kingdom if we are outside the European Union? It is a highly risky strategy to assume that the European Union would allow us free trade in motor vehicles if we were outside it.
I have a suspicion that the arguments to come out, certainly from members of the Tory party in another place, have much more to do with fears of UKIP than economics. However, those Members of another place who are in fear of UKIP are in danger of misreading why people have been voting for UKIP.
Lord Forsyth of Drumlean
I am most grateful to the noble Lord, who obviously feels very strongly about this and feels that he has very strong arguments. But if they are so strong, why is the Liberal party in the coalition preventing the Government committing themselves to having a referendum, so that we can have this debate and people can decide, given that the Liberals campaigned for an in/out vote during the general election campaign?
Lord Razzall
I am grateful to the noble Lord, Lord Forsyth, for his intervention. As in so much of life, the question is timing. We are not in favour of having a referendum now. We might well have been in favour of having a referendum in 2010. Bearing in mind the policy of the Prime Minister to renegotiate our arrangement with the European Union, it seems sensible to have that referendum once that renegotiation has been completed.
Going back to my argument, I do not believe that people are voting UKIP because they want to come out of Europe. That is demonstrated by the detailed research that the noble Lord, Lord Ashcroft, has done. I commend his polling information to all noble Lords. It is very informative. People are voting UKIP because of a desire to go back to a perceived past world of Englishness, with no foreigners, with grammar schools and smoking in pubs, and where people knew their place.
John Major spotted this trend 20 years ago when he glorified a world of,
“long shadows on county grounds, warm beer, invincible green suburbs, dog lovers … old maids bicycling to Holy Communion through the morning mist”.
Unfortunately for his point, John Major quoted Orwell out of context. In criticising the past, Orwell had also talked about:
“The clatter of clogs in Lancashire mill towns, the to-and-fro of the lorries on the Great North Road, the queues outside the Labour Exchanges”.
I fear that this is the world to which UKIP wishes us to return. When I think of UKIP, I also think of 80 year-old Wyn Florey, on my ward committee, who said to me in the 1980s, “Don’t let them tell you about the ‘good old days’; they weren’t”. On the same point, my Tory colleagues might be better persuaded by William Whitelaw, who said in 1972:
“I do not intend to prejudge the past”.
I hope that, in deciding about Europe, Tory colleagues are not seduced by UKIP, and follow the Whitelaw advice. I hope and pray that they will not sacrifice the interests of our children and grandchildren to a misplaced nostalgia.
Lord McFall of Alcluith
My Lords, today UK businesses have about £700 billion in cash on their balance sheets—money that is looking for places to invest but companies are lacking the confidence to do so. In addressing the growth strategy—which currently seems to be absent—the biggest task facing the Government is to instil confidence in people and companies. We have to recognise that there is a demand problem facing the country. That is why the austerity approach taken by the Government in the past few years has been wrong.
However, we need to ensure that confidence is based on reality. As a member of the Parliamentary Commission on Banking Standards, I am very much aware of the reality that in banking and finance the architecture has crumbled. We need not just to reform but to rebuild that from the floor up. We cannot afford to apply a sticking plaster to a system. Just how much the system has disintegrated was admitted by Adair Turner, the former chairman of the Financial Services Authority, in a remarkable interview a few weeks ago in the Sunday Telegraph. He said:
“I think we—as the authorities, central banks, regulators, those involved today—are the inheritors of a 50-year-long, large intellectual and policy mistake. We allowed the banking system to run with much too high levels of leverage, inadequate levels of capital, and we ignored the development of leverage in the financial system and in the real economy. And not only did we ignore it but we had a pretty overt intellectual philosophy that we could ignore it, because we knew the financial system was just a market like any other and whatever it did was bound to be for the good because that’s what markets are … I was surprised at the supervisory approach. I’d been on the board of a bank, I’d been involved in banks, I’d dealt with banks back in the 1980s and 1990s, and I, throughout that, had accepted the existing capital regime as a given, right? I had never gone back to basics and said, ‘Why do we allow banks to run with 30, 40, 50 times leverage?’. And neither had anybody else, funnily”.
That includes Larry Summers, former Treasury Secretary of the United States, adviser to President Clinton and president of Harvard University—he is presently the Charles Eliot professor of economics at Harvard—who has said that everything that he has taught in economics has been called into question by the crisis. When the respected John Kay and Professor Charles Goodhart came to the Treasury Select Committee a few years ago, I asked them whether they understood risk, to which Charles Goodhart succinctly answered no. John Kay said, “I’ve been teaching risk for the past 25 years at Oxford University and what I did was throw my notes away, because nobody understands risk at the present time”.
Therefore, the situation in which we find ourselves is fragile. I suggest that if we do not go back to basics we will not solve the long-term problems that affect the financial services industry. The Prime Minister last week admitted in response to a question from the chief executive of Santander that the Government were confused and had mixed messages for the sector. As for briefings from the Treasury and the Chancellor, I have been taken aback to read in newspapers over the past few weeks that the Treasury is paving the way to sell the Government’s bailed-out bank stakes at a loss. The Times commentators, Sam Coates and Patrick Hosking, both of whom I know and are very respected, wrote recently that the Treasury wants to,
“lower public expectations over the amount that will be recovered from the sale”.
It hopes that the Parliamentary Commission on Banking Standards will conclude that the Labour Government paid too much for Royal Bank of Scotland and Lloyds in 2008.
From my point of view, there is not a chance of that happening, and it is simply not true. Alistair Darling made it clear in an article in the Financial Times last week that, on the eve the general election in 2010, the economy was growing and the Royal Bank of Scotland’s share price was 504p, which meant that the taxpayer was up £500 million on the deal. Three years later, with no growth, the taxpayer is down almost £20 billion. It is vital that we do not turn a paper loss into a real one with a hasty sell-off. The Business Secretary, Vince Cable, agrees with us on that very point. He said:
“I don’t see the need for any haste”,
as he called for the break-up of the Royal Bank of Scotland to boost competition. That is perhaps as a result of his membership of the Future of Banking Commission—on which he sat along with me and David Davis MP, who chaired it excellently—when we called for increased competition, maximum transparency and a new culture and ethos in the system where customers’ interests come first.
Three years into the life of this coalition, meaningful competition is a more distant prospect than it was in 2010. The events at Lloyds with Project Verde and the RBS sell-off to Santander, which has hit the dust, illustrate that the Government have neither leadership nor control of this situation despite being the dominant shareholder in these entities. We cannot leave the structure of the banking system to the vagaries of the market. Perhaps the time has come for us to abandon the pretence that UKFI is in control of events, in a situation where Lloyds has already spent more than £1 billion on Project Verde and Santander has withdrawn from the agreement with Royal Bank of Scotland after years of negotiation. We have seen everything turn to dust.
The Government need to demonstrate leadership by producing a blueprint of their own for a changed financial service. Perhaps, as the noble Baroness, Lady Kramer, who is an excellent member of the Parliamentary Commission on Banking Standards, mentioned earlier, that could be in conjunction with the regional partnership initiative of the noble Lord, Lord Heseltine. We have heard calls today for decentralisation from Westminster, for a rebalancing of the economy and for other parts of the country to share in prosperity.
However, if we do it in a hurry, it will be messed up. I suggest that the date of the next general election should not be the deciding factor in reforming the architecture of the banking system. This is a one-off opportunity. Mention has been made of the situation in Germany, where the privately owned Mittlestand companies are thriving because of their close regional relationship with the 3,000-plus independent banks, whose managers understand their businesses. Handelsbanken in the UK had a favourable press because of the same style of engagement at local level.
If we are serious about rebalancing the economy, developing SMEs and revitalising manufacture, this is the time. There has never been a better opportunity to use the leverage that we have. The politically myopic reactions to the situation from the spinners at the Treasury do no service whatever. Although the Parliamentary Commission on Banking Standards is doing excellent work, it is not the forum to produce a blueprint for the Royal Bank of Scotland and Lloyds. It can point the way forward, but the blueprint is for the Government. That is not our main focus. Our focus when we were established was clearly to look at culture and standards in the banking and financial services industry. RBS should not be a big element of our report, but we should recognise that there is an opportunity to do something there for the manufacturing and regional banking sector.
Also, we do not at present know what is on the banks’ balance sheets. Less than two weeks ago, the Financial Policy Committee said that British banks have a £25 billion shortfall in capital overall. The other day, the Local Authority Pension Fund Forum, representing 55 public pension funds, stated that the Royal Bank of Scotland has £10 billion of undisclosed loan losses on its balance sheet because it is using accounting standards that allow loss to be booked only after it is incurred, however likely a default may be, thereby underplaying the likely losses. We have been here before with accounting standards, when the banks, in their heyday, booked options and their own bonuses and expenses based on expected profits. A year of two later, however, the profits did not materialise. It is a sensitive and shaky situation.
Only the other week, I had discussions with HMRC after the noble Lord, Lord Lawson, and I, in a sub-committee of the Parliamentary Commission on Banking Standards, examined Barclays and the structured capital management vehicle, which the noble Lord accurately referred to as tax avoidance on an industrial scale. It is a black box. Following my discussions with HMRC, the head of the business unit wrote to me to say that HMRC has 92 issues with the big banks at the moment and £3.2 billion is under consideration in relation to tax avoidance schemes. Those matters have still to be determined. They will not be determined tomorrow or next month; it could take between seven and 10 years. The sum of £3.2 billion could have considerable impact on the prudential stability and health of banks. The banks have set aside £16 billion already for PPI mis-selling—perhaps that is a euphemism for fraud—and that figure is not final. The situation is fragile and illustrates the folly of making definitive judgment calls before a general election. We are presently clawing our way in the dark. Incentives are at the heart of the matter in banking.
At the end of the day, we need that leadership from the Government. A quick disposal of shares on political grounds will negate the golden opportunity for the Government to effect real change. I submit that the customers’ interest, both personal and economic, requires a responsible, mature approach to the disposal. When I was chairman, the Treasury Select Committee was clear that we wanted the taxpayers’ interest to be paramount. The Public Accounts Committee has followed that up and said in its report of 2012:
“The taxpayer has invested £66 billion in RBS and Lloyds shares and it seems that their ‘temporary public ownership’ will last for some time if getting value for our investment remains the most important objective for Government … We are concerned that a short-term decision to sell might undermine long-term realisation of value for the taxpayer. The Treasury, with UK Financial Investments Ltd, should set out a strategy for its share sales, and how it will prioritise the government’s various objectives so that the taxpayer’s interests are protected in any eventual sale”.
Hope and confidence are at the centre of that. If we expect to take taxpayers along with us, we need to have that mature and fundamental look at the system.
Lord Bilimoria
My Lords, the gracious Speech said a lot of really good things: build a stronger economy so that the United Kingdom could compete and succeed in the world; strengthen Britain’s economic competitiveness; ensure that interest rates are kept low and that people who work hard are properly rewarded; invest in infrastructure—I could go on. It is terrific.
However, when I was making my maiden speech, as the noble Baroness, Lady Lane-Fox, did today, in the same debate on the economy, I was advised, “Don’t worry about what’s in the gracious Speech; you can speak about things that are not in the gracious Speech”. I congratulate the noble Baroness on an excellent maiden speech. I am delighted to have a fellow entrepreneur in the House, and on the Cross Benches too. She spoke passionately about online inclusiveness, and I am sure that from now on all Peers will be online. Of course, we already are.
What is missing? What has been picked up in a huge way is Europe. The noble Lord, Lord Forsyth, said that to him this was like Groundhog Day—déjà vu. I am not going to go into that topic. Europe is going to go on for a long time. The eurozone crisis has not gone away. There are regular lulls before the storm, but that storm is still about to come and it will be a perfect storm. I believe that we need to start with a clean sheet of paper and renegotiate our position in Europe. I say every day, “Thank God we are not in the euro”.
As an economy, we may have lost our triple-A rating but our interest rates are low and our inflation is relatively low. However, although we have avoided a triple dip, we are bumping along the bottom. We need to generate growth. What worries me is the Government’s priorities in achieving this. Why did we waste so much time pushing through employees giving up their rights for shares? This was against the will of business. It was twice sent back by the House of Lords to the House of Commons. It has gone through in a watered-down way. The lesson that I have learnt from this is that I could see very clearly that the Government had not consulted business properly first or listened to it. One of my favourite sayings in business is that good judgment comes from experience and experience comes from bad judgment. Will the Minister confirm that the Government have learnt from this mistake?
Lord Lea of Crondall
If the noble Lord will forgive me—this is a slightly sensitive subject—in regretting that noble Lords did not press their amendment, he may just be reminded that it was a Cross-Bencher, the noble Lord, Lord Pannick, who had put up an excellent performance on the first two occasions, who withdrew the amendment.
Lord Bilimoria
The noble Lord, Lord Pannick, did an excellent job, and the noble Lord is absolutely right. Will the Government accept, learn and consult business more in future?
The spending review is about to come along. Are the Government on target, given that, as the noble Lord, Lord Forsyth, said, our borrowings are increasing and will double to £1.5 trillion? We have to bring government expenditure as a proportion of GDP down. Is there a target of 40% of GDP for government spending? Could the Minister confirm that?
With regard to priorities, immigration has reared its head again. I am really worried about this. The gracious Speech mentions dealing with illegal immigration, the bad immigration that harms our country, and yes, we need to deal with that. Unfortunately, though, the signals that are being sent out, reinforced by highlighting immigration in the gracious Speech, are about discouraging and deterring the immigration that we benefit from. The number of Indian students has gone down by more than 40,000. In fact, recently we had a former head of immigration from Australia in the UK, and he said that every day in Australia they pray and thank God for the existence of the UK Border Agency. It has been proven unfit for purpose; that is why it is being dismantled. We are harming our competitiveness. If students do not come here, they go to Australia, Canada and the United States. It is one of our biggest strengths. We need to send out a very clear signal that we want immigration to benefit this country and that we appreciate the good immigration that has benefited it.
On infrastructure and High Speed 2, the noble Lord, Lord Forsyth, hesitated, but in his fantastic speech moving the Motion for an humble Address, the noble Lord, Lord Lang, spoke about High Speed 2 being a good investment in infrastructure from which our grandchildren will benefit. It is high speed being delivered at slow speed. Will the Minister confirm exactly when this project will be completed? It is an example of long-term thinking, which is great. The Minister spoke about Crossrail. I congratulate the Government on Crossrail. It is a fantastic initiative, started by the previous Government, which will benefit our economy, but nobody has spoken about Heathrow and the desperate need to improve our air services. We need that third runway at Heathrow. Why are the Government just postponing it?
What about a balanced economy? There is nothing in the gracious Speech about a balanced economy. When I am asked about my business, I say with pride that first and foremost we are manufacturers. Are the Government keen on promoting manufacturing? What are they going to do about that? We should be maximising our competitive strengths.
The tourism industry brings more than £115 billion to this economy. Expanding Heathrow would help tourism, but the most photographed building in the world is the Eiffel Tower. The second most photographed building in the world is our wonderful Palace of Westminster. The reason it is second is because we are not in the Schengen scheme for visas. There are so many people, particularly from China, who come to Europe, come as far as the channel, but do not come to the UK because a Schengen via for 25 countries is cheaper than a UK and Ireland visa. We should join Schengen. Anyone who has a Schengen visa should be able to come into this country. The reason we do not join Schengen is that we are worried about our border security. I have just spoken about the UK Border Agency. Why are the Government continually postponing imposing exit checks at our borders? They need to be brought in soon. We know who is coming into our country, but we do not know who is leaving. We need to have those exit checks. Will the Minister inform us of when they are going to be introduced?
Another of our competitive strengths is higher education, but there was not one mention of it in the gracious Speech. Earlier this month it was mentioned in this House that the University of Cambridge has achieved more Nobel Prizes than any other university. That is something of which we should be proud. That is in spite of the fact that we spend less as a proportion of GDP on R&D and innovation than the OECD or the European Union. We spend half the proportion of GDP on R&D that South Korea spends. When it comes to higher education funding, overall we spend less as a proportion of GDP than the EU average or the OECD average and way below countries such as the United States. Why is it that the United States always bounces back quickly? Why is it so competitive? Why is it so productive? Why it is so innovative? It is because it invests more than we do as a proportion of GDP in innovation and higher education. Why do the Government not do more of this?
Will the Minister confirm that we are going to be promoting clusters? There are three big clusters in the world: Silicon Valley, Boston-Cambridge in Massachusetts and Cambridge in the UK. We need to promote more clusters. Birmingham, for example, is a prime location for a manufacturing cluster. Will the Government promote clusters more proactively?
The noble Lord, Lord McFall, spoke about the financial sector. I remember speaking in the debates about Northern Rock. That was six years ago. The nationalisation of Northern Rock was rushed through in six months. It has taken us six years to get to reforming our banking system. That is scary. I am very hopeful, and I congratulate the Government on appointing Mark Carney, a Canadian, to come in and head our Bank of England. Can the Government confirm that, apart from inflation targeting, they will now encourage the Bank of England to also have nominal GDP growth targeting as well? On SMEs, which other noble Lords have spoken about, I keep hearing that they cannot raise finance. In fact, I have heard that the enterprise finance guarantee scheme loans are falling. Can the Minister confirm that? They should be increasing at times like this, when businesses desperately need finance.
On a positive note, I am delighted with the efforts that the Government are putting in through UK Trade and Investment to promote British businesses doing business abroad. I am delighted to hear that the UK India Business Council, which is funded by UK Trade and Investment and of which I am the founding chair, is now to be opening up within India. The British high commission in India has opened up two new deputy high commissions in Hyderabad and Chandigarh and will increase the number of people on the ground helping to promote British business in India. This is fantastic. As the noble Lord, Lord Forsyth, concluded, we must promote and encourage our businesses not just in doing business with Europe, but in doing business with the emerging markets such as India—the BRIC nations.
The Government are doing a fantastic job through their marketing campaign, “Great Britain”. The “Great Britain” campaign tries to promote Britain with confidence aboard. I suggest that we need a “Great Britain” campaign to promote Britain within Britain. We do not appreciate enough the amazing strengths that we have as a country. We have the best of the best in the world in just about every field you could imagine, whether it is the creative industries or the legal and accounting professions, and manufacturing including beer, automobiles and aerospace, as well as sport, film and theatre. Our universities are, along with America’s, the best in the world. London is the greatest of the world’s great cities. I could go on.
We may be bumping along the bottom as an economy, but we should never take for granted the amazing strengths that I wish the Government would get behind—strengths which we should spread with confidence throughout our country. Then we will be able to generate growth with confidence.
Viscount Simon
My Lords, we have heard noble Lords give interesting speeches on business and the economy. This reminds me that I never know on which days to speak, because I will not be talking about these matters. I intend to address various matters of concern to road safety experts and the police and on road policing.
There was a programme on BBC Three recently called “Barely Legal Drivers” where, at the beginning, three interesting statements were shown:
“1 in every 3 drivers who die on UK roads is 25 or under … 1 in 10 young people have been in a crash that resulted in death or serious injury … 1 in 5 young drivers has a crash within 6 months of passing their test”.
Things do not change very much, I have to admit, because I had a crash within six months of my passing the driving test. This led to my commencing a long attachment, as a civilian, to the traffic police with whom, over the years, I have taken lots of advanced driving courses.
Keeping inexperienced drivers in mind, it has been suggested that graduated licences could be introduced, putting in place certain requirements as to when they are allowed to drive, the number of passengers carried and probably various other bits and pieces. The insurance industry may require recording devices to be fitted to the cars of inexperienced drivers to see how they are driving. They may well adjust the premiums accordingly; I understand that this is already happening with young lady drivers. However, enforcement could well be a problem as there are some difficult issues and logistical considerations to be made in terms of how much time the police would have to enforce any legislation introduced. With the reduction of fully trained roads-policing officers over quite a number of years, this would not be a priority.
At the end of April, six terrorists were found guilty of serious offences against the mainland with the intention of blowing up towns and causing havoc. It was a roads-policing officer who instinctively decided to stop the vehicle they were driving. In view of his expertise, and that of all roads-policing officers, I wonder what plans the Government have to ensure that adequate funding and support is given to chief constables so that roads-policing receives higher priority, and greater investment in technology to ensure more criminals are caught while on the roads. With better vehicle-mounted technology and investment in skills and officers, criminals on the road will fear the risks and know that they will be caught.
The Royal Society for the Prevention of Accidents deduced that the currently used method of defining certain priorities is out of date and that the causes of premature deaths that can be prevented should be an area on which to focus. At all ages, cancers and other preventable diseases eclipse accidents. To put another area of premature death into the arena, accidents kill around 14,000 people in this country every year but only about 2,000 of these deaths occur on the road or in the workplace. So, home and leisure accidents now account for the majority of deaths, but this does not detract from reducing death and injury on our roads. After all, the total cost of each road death is now about £1.6 million, which means that every reduction can be calculated on a financial basis.
On costs, it has been suggested that the purchase of more battery-operated vehicles should be encouraged to reduce emissions. While this is an admirable idea, I wonder how long a battery will last and what it would cost to replace one. I may be wrong, but I have heard that they are very expensive.
In the past two or three years a number of reforms to the police have taken place: the introduction of police and crime commissioners along with pay and pension reforms. Somebody joining the police gets £19,000 a year, yet a new PCSO gets £25,000 a year. What message does this send out? Then there is the potential for the introduction of direct entry at the rank of superintendent, with no experience of policing anticipated. How many people would go to their surgery to be seen by a doctor whose only experience is as a helicopter pilot? These changes, and others that have taken place over the past decade or so, are completely counter to those who label the police as “the last unreformed public service”. In addition, police have to deal with the impact of reforms on other services, particularly in the area of mental health. There are too few areas where places of safety are available on a 24-hour basis to assess individuals who are suffering from mental illness and in need of immediate support. This means that far too many people have to be taken to police cells following their detention under Section 136 of the Mental Health Act due to the lack of an available place of safety.
The next comprehensive spending review is on 26 June. I hope that no further cuts will be made to the police. If there are, there could well be disastrous effects in dealing with the requirements of the public. In order to reduce costs, a few constabularies are working closely together but there are still the same number of chief constables, deputy chief constables and police and crime commissioners within each constabulary. This has led to there being little consistency in approach, with little evidence to demonstrate savings or benefits to the public once these changes have been made.
The Crime and Policing Bill will enable the creation of the police remuneration review body. Police officers are officeholders, independent of state and answerable for their actions to the law. This onerous responsibility brings many restrictions on an officer, not least of which is the fact that they are forbidden in law to take industrial action. The transition from the current national Police Negotiating Board must take into account an officer’s inability to directly influence policy concerning police pay and conditions of service. Mechanisms must be put in place to ensure that officers feel that they will be treated fairly by the Government of the day. A system of appeal that can be influenced by the Police Federation is essential so that the relationship between state and officeholder continues with a common understanding. I would also urge caution with the current proposals to introduce compulsory severance, which could change the independence of the constable. There should be a pause to ascertain the necessity for something drastic, particularly as many no longer see it as necessary. It is the first duty of government to protect its citizens and it is the duty of the Government to be fair to those discharged with this responsibility, the British police service.
Lord Tugendhat
My Lords, I will focus on one of the biggest disappointments of our economic reforms over the past few years. I refer to our failure to expand our exports as rapidly as had been hoped, and in particular to expand them outside the eurozone, despite the 20% devaluation of sterling on a trade-weighted basis since 2007. Ministers invariably place the blame for this on the sluggish performance of the eurozone. Certainly the eurozone’s sluggish performance has played a significant part, but as an article on UK export performance in the February issue of the Bank of England’s Inflation Report points out, UK exports have increased by much less than those of several eurozone members, including Spain, Italy and Portugal, for whom the eurozone is also their major export market.
The Bank of England suggests that part of the reason for this is the weakness in demand, since 2007, for financial services provided by banks and other financial institutions. Devaluation cannot do much about that—which, given the composition of UK exports, shows the limitations of devaluation as a means of boosting British exports. However, devaluation should have given a boost to British manufactured exports beyond the eurozone, and our failure to make progress on that front is particularly disappointing.
The contrast with Germany is particularly striking. Against the background of rising trade with both eurozone and non-eurozone countries, the balance of Germany’s trade has shifted in favour of the latter. In 1999, when the euro began, some 45% of Germany’s trade was with other eurozone countries—now it is 37%. The fastest-growing partners for German foreign trade include China, India, Korea, Indonesia and Brazil. Within the next few years China is expected to become Germany’s biggest trading partner.
I accept that the quality and composition of German manufactured goods are such that overall they are always likely to outperform ours in that sphere. This is a sad fact, but, I fear, true. None the less, why are we so stuck in the eurozone, as Ministers keep pointing out, while they are so much more successful at breaking out into markets in other parts of the world? The single market is meant to be a launch pad for selling to the rest of the world, not a contemporary equivalent of imperial preference. Germany and other countries have achieved that break-out, and I wonder why we appear to have so much difficulty in doing so.
This is a complex subject, and there are many reasons for this situation, but I ask the Government—if they cannot reply tonight, perhaps they will do so later—whether they feel that ownership has anything to do with it. The great bulk of German industry is German-owned, and free to seek markets wherever its management sees fit. By contrast, Sir Alan Rudge has recently pointed out:
“The UK is home to 228 large manufacturing companies … and only 93 are UK-owned”.
I have always been a great supporter of inward foreign direct investment. Many foreign companies have made a huge contribution to modernising the British economy, improving the quality of its management and introducing new ideas. The spectacular revival of the British motor industry, thanks to Japanese and German investment, illustrates this point very vividly. Where British ownership failed, Japanese and German ownership has succeeded and the United Kingdom has benefited enormously.
However, it cannot be gainsaid that much of foreign direct investment into Britain has been made to supply European markets rather than markets outside Europe. The companies that have made those investments see their UK plants as part of a worldwide network in which plants in different geographical locations are aimed primarily at different markets. The same would be equally true of FDI in, for example, Spain or other European locations against which we compete to attract investment.
I do not mean to be absolutely black and white about this. Corporate trade patterns shift in response to changing circumstances. As I have said already, this is a complex matter in which many factors come into play. None the less, it would be helpful if the Government launched a review to determine to what extent the subsidiaries of foreign-owned companies in this country have the flexibility to take full advantage of opportunities opening up in markets beyond Europe, and what can be done to encourage them.
I know that many people will say that I have focused on the largest manufacturing companies, and that is true. However, the supply chains depend on those companies and, generally, in this country the largest manufacturing companies account for the greatest proportion of exports. Therefore, if the largest manufacturing companies are concentrated in one part of the world, it will follow that the supply chains that service them will equally be concentrated on that part of the world. Rather than look to the red tape and the other things people talk about that supposedly hold us back in the eurozone, we should see why it is that Germany and other eurozone countries appear to be so much more successful.
I will refer to the remarks of the Mayor of London, who has pointed out that if we were to leave the European Union, which I personally would deeply regret and regard as very counter to British interests, we would find that many of our problems arise from inadequacies within our own economy.
Lord Monks
My Lords, I, too, will address the long-term prospects for the economy, as well as the relationship with the European Union. I am pleased to be able to follow the noble Lord, Lord Tugendhat, who has expressed some very wise words from the Conservative Benches, words that I hope will be heard loudly in that party as the frenzied debate seems to be kicking off again in such a vigorous way.
Before the crash of 2008, only a few of us warned of the excesses of what we termed “casino capitalism” in the financial services industry. These excesses, as we now know, were not even properly understood by many of those in the financial services sector themselves, including many at the top of our greatest banks. We know the consequences: the bank problem became the problem of the nation states, and the consequences of austerity which have resulted need not have been as severe as they have been, as was well spelt out by my noble friend Lord Eatwell. However, the consequences are plain. As Francis O’Grady, the new general secretary of the TUC, said recently:
“The victims continue to be those who did least to cause it”.
Spending cuts are weakening vital services. Austerity rolls back gains in equality, and real pay levels, for most, are falling. Our performance on exports, as the noble Lord, Lord Tugendhat, just spelt out, continues to be unimpressive, and contrasts with our neighbours—not just Germany but our neighbours on the other side of the North Sea.
Apart from the noble Lord, Lord Heseltine, and, on a good day, the Business Secretary, no one on the Government side seems to show the urgency and energy that is necessary to tackle the mess we are in and to rebalance our economy more in the direction of the other side of the North Sea. As the Business Secretary said in the equivalent debate in the other place last Friday, there are no easy answers. However, there are some wrong answers, and these include a slavish belief in deregulation and in scapegoating the European Union for our difficulties. I ask, as my noble friend Lord Glasman did recently in an article in the New Statesman, why Germany is doing comparatively well. It has the highest level of workforce participation in its governance; it has the greatest degree of regulation of labour market entry through insistence on high-class vocational qualifications; and it has the most severe constraints on capital in its banking system. How can that be? The orthodoxy practised on the other side of the House is that you grow by deregulating, reducing workers’ rights and cutting some standards. The Queen’s Speech mentioned extra proposals in that direction. The German example is not being followed. We should go for the high road and not seek some kind of low road to growth. I looked in vain in the gracious Speech for evidence that the noble Lord, Lord Heseltine, or the Business Secretary had had a decisive influence on the Government’s programme, but I found little trace of anything other than the deregulation of employment tribunals and a further weakening of health and safety standards.
If there is a distressing lack of energy and application to the problem of rebalancing the British economy, there is no lack of energy in the debate in the Conservative Party about our relationship with the European Union. I note with great concern that scepticism is rapidly turning to phobia. Our problems are being presented as the EU’s fault—not just by eccentrics but by people who are much respected in the affairs of this nation. The call for divorce from the EU risks becoming a Tory stampede for the exit. I was pleased to see, as the noble Lord, Lord Tugendhat, mentioned, Boris Johnson partially taking on this case in today’s Telegraph and—rather bravely given the current mood—arguing that the UK will have to recognise that most of our problems are not caused by the European Union. For once, I find myself in agreement with him.
It is not the EU’s fault that we do not have a better record of export to the rest of the world, or to the EU itself. They are not alternatives. To compare the single market with a comfort zone akin to pre-war imperial preference is surely wrong. I wish that there had been a fixation among more British businesses on exports to the EU, or indeed to anywhere else. However, too many of our businesses did not have sufficient motivation, expertise or whatever to do the job. We cannot blame others for that; we must look inside ourselves. Neither is it the EU’s fault that much of what remains of the UK’s manufacturing is overseas owned, with the car industry the prime but far from the only example. Many of those owners are here only because of our EU membership. Ignoring this would be a huge national risk that certain metropolitans, or even expatriates, seem to be ignoring at present. Those of us from the weaker regions know exactly what is at stake.
Why would we want to loosen our ties with our neighbours, especially when we rely so much on inward investment and overseas ownership? A very dangerous vision is developing of a Britain that is somehow offshore, with low tax, low regulation, low benefits and low standards, but able with impunity to go around the world undercutting the standards of the best and thinking that we will get access to their markets. If you think that occasionally there are problems with the single market, which there are, and that occasionally there are obstructions to the way trade operates in Europe, as there can be, you should listen to the stories of people who trade with the rest of the world. There, protection is the norm and not the exception. Businesses that export all say that the difficulties of breaking into markets, including the Commonwealth and the United States, are on a pretty large scale.
We on this side of the House, and many elsewhere, will do our utmost to keep us from becoming a sort of Greater Monaco, seeking that low road to the future. Presenting the EU as the enemy, which the noble Lord, Lord Forsyth, seemed to do, is ridiculous and over the top. There are many problems to iron out in future, but that is not the way to do it. It is not in Britain’s interests to follow that route even a little way, and I hope that the Conservative Party will come to its senses as quickly as possible.
Lord Bradshaw
My Lords, Members of your Lordships’ House who were involved in the local elections might forgive us for doing something that the electorate certainly did not want. They wanted attention paid to local things. Most candidates who were successful had concentrated on local things. The first item on my list is the maintenance condition of our road network. It is absolutely disgraceful and if people are talking about emulating low standards, certainly the roads of this country are a disgrace. What is more, as water gets into the foundations of the roads, they will rapidly deteriorate further. I would like to hear from the Government that they will do something immediately to make use of shovel-ready schemes to give us a decent distributive road network. The problem is infecting even the main A-class roads and motorways of this country.
The second thing to which I will draw attention is the apparent failure of the M6 toll road. This has very serious implications for the Government’s ambitions to attract private sector capital into financing the road network. There have already been calls for the nationalisation of the M6 toll in order to relieve Macquarie, which was behind the scheme, of the liability that it openly accepted. One lesson that you are supposed to learn in a capitalist economy is that if you back a loser, you will lose money. That has applied to the banks but applies to other things as well. I would very much like to know how the Government intend to introduce private capital into this sector of the economy, which has been mentioned as being an important part of the recovery process.
Thirdly, in view of the possibility of Scotland somehow separating from England, I raise the case of the A1 in Northumbria. It is a key route between England and Scotland. It is a dreadful route with a dreadful safety reputation—and the diversionary routes are even worse. I believe that all the preparations have been done and that there is a shovel-ready scheme. This would be a step towards underlining our unity with Scotland rather than allowing the relationship to deteriorate into some sort of cul-de-sac.
The railways are desperately short of rolling stock. I advise the Government that the best thing they can do is get out of the way of investment, which they have inhibited for years by indicating within the franchise agreement a presumption that there will be a carry-over of rolling stock from one franchise to the next. This is very similar to the TUPE arrangements whereby staff from one franchise can automatically expect to move forward to the next. It does not seem that the Department for Transport is in any way equipped to work out a rolling-stock strategy for the railway. That should be done by the private sector. This was the original intention of privatisation. There were supposed to be asset-light franchises, and Railtrack was supposed to maintain the network. We know what happened there. The rolling stock companies are anxious to invest money and have large sums of money to invest, but they need the Government to get out of the way and allow commercial relations to take root between train operators and the railway.
Lord Mitchell
My Lords, in my reply to the gracious Speech, I will address two issues. The first is the special concern of small business growth, and the second the consequences and opportunities of the digital revolution.
Despite the fact that my job definition as Shadow Business Minister includes responsibility for SMEs, I have vowed to myself to refrain as best I can from using the expression SME. It is so engrained in our vocabulary, but it is such a misnomer. The fact is that small businesses and medium-sized businesses are not the same and should not be grouped together; their requirements are so different that combining them is an error. Those who do so, in my opinion, demonstrate that they have no understanding of the particular needs of each sector.
As I have mentioned on many occasions in your Lordships’ House, nearly 40 years of my business career were spent in the small business environment. Well, that is not quite true, because the three small businesses I founded each grew to become medium-sized international companies. But in the beginning each business started with a few of us sitting around a small table, or at the bar in a pub, where we said, “Wouldn’t it be a good idea if?”. It is very hard to convey what it is that motivates one to become an entrepreneur. When I think back, I sometimes think that I must have been crazy; the incidence of failure in start-up businesses is heavily stacked against the entrepreneur. What few people outside the entrepreneurial circle understand is just how stressful it all is. There is the perennial stress that the money might run out, that an important customer might go somewhere else, or that a key employee might be recruited elsewhere. You need the constitution of an ox. Put simply, it is not for everyone, but if you succeed it is truly wonderful.
When I created my companies I never thought about the rates of income tax, corporation tax or capital gains tax, and I certainly did not have the vaguest notion what inheritance tax was, nor did I care. Indeed, when I started my first business in 1972, I seem to recall that the top rate of income tax was 83%, plus unearned income tax of 15%—not what one might call an entrepreneurial incentive. To me it was all irrelevant. I wanted to be my own boss. I had worked for big companies, and I simply knew that I could do it better; it was the arrogance of youth. I loved the freedom, I loved building teams of well motivated and excited people, and I revelled in the joys of customer satisfaction. So when I hear politicians somehow thinking that a tweak here and an incentive there will suddenly turn us into an entrepreneurial society, I know that they have got it wrong. It is not how it works. Nothing illustrates this better than the shares-for-rights issue that we debated at length in the previous Session. No businessman would have dreamt up such lunacy as this.
What does matter is creating a climate where the entrepreneur feels comfortable—and for them, as for all business people, the one ingredient that gives comfort is confidence. Success in any field comes from confidence. Just see what happens to a football team when a great new manager arrives; the same players are revitalised. As the Minister will know better than anyone, we saw it in the Olympics. When people believe in themselves, they can move mountains. As it is with sport, so it is with business. Confidence comes from leadership, and leadership, of course, comes from the very top. When I look at the grim face of George Osborne, all I see is dour despondency. What he needs to do is to lighten up and provide strong, positive leadership. He needs to change the atmosphere, be upbeat and introduce a strategy for growth. He could have done it in the gracious Speech, but he chose not to.
Goldman Sachs, for which I know the Minister has a special attachment, has run an interesting study in business growth, and I would like to bring it to your Lordships’ attention. Several years ago, Goldman Sachs introduced a project called 10,000 Small Businesses, which is a target that it set for itself. In conjunction with five UK universities and based on its American experience, it set its goal to supercharge ambitious small businesses, seeking to generate small business growth that otherwise would not have happened. The results have been extraordinary.
Small businesses are the major source of job creation and also drive economic growth through innovation and market expansion. It is true that the overwhelming majority of small businesses do not grow and are static; they are important, but they do not produce economic growth. But there is a small percentage of small companies that are ambitious, growth hungry and well run. What the Goldman Sachs programme seeks to do is to locate such high-growth companies and propel them to achieve significantly greater returns. So what does Goldman Sachs do? It selects high-growth potential companies that have more than 10 employees and a turnover of just over £1 million and screens them carefully to determine their ambition and their management competence. Each CEO commits to undertake 100 hours of involvement over a four-month period. As Goldman Sachs puts it, they are companies that have dreams and talent which they wish to translate into advanced action. They learn about money and metrics, leadership, marketing, strategy, financing, and putting it all together. At the end, they produce a business growth plan—not so much a business plan, more a commitment to growth. The most exciting aspect of the programme is the dependence on peer-to-peer learning and engagement, which comes from the entrepreneurs themselves, from different backgrounds and different industries, sitting down together, challenging, querying and providing support from each other to each other.
The results are staggering. Employment growth is up 23% compared with 1% for small businesses as a whole, and there is revenue growth of 16% compared with minus 9% for the small business area as a whole. Equally impressive are the following qualitative statistics: 92% became more confident of their ability to grow their businesses; 83% introduced new internal processes; 81% used financial data to derive business decisions; and 84% had an understanding of external finance options that they did not have before. The programme has so far created around 2,000 new jobs. This type of programme is not exclusive to Goldman Sachs and variants are practised by others, but there is no denying that these are impressive results and an indicator that selecting high-growth small companies with big ambitions and helping them to accelerate their growth is an important way to stimulate the economy.
I cannot let the opportunity go by without welcoming the noble Baroness, Lady Lane-Fox of Soho. Her maiden speech was outstanding; for me, as an IT entrepreneur, it touched many key points. The noble Baroness is not in her place, but perhaps I can relate to fellow Members of the House of Lords how I first met her. I had to see her to do with a charity that I was involved in, and I was given an address in Soho. I went along this street and that street and, eventually, was standing outside what I would probably describe as a massage parlour. It was a tanning salon—noble Lords get my drift. I was pretty concerned about this, but I went in through the aforementioned massage parlour and into the noble Baroness’s office, where lots of exciting people were doing amazing things in the IT sector.
Soho has played a major part in my own life. As a misbegotten youth, I used to spend much time there going to jazz clubs and generally hanging around. But perhaps I should move swiftly on. When I met my wife, she was a film director working in Soho, and we had our wedding reception there. In a moment of complete madness I opened a mega-restaurant just off Dean Street, which failed dismally and cost me a fortune. I put it down to a learning experience. So one way or another, Soho is part of my life. My only regret is that, unlike the noble Baroness, I did not have the foresight to include Soho as part of my title.
To those of us in the IT sector, Martha Lane Fox, as she then was, is a legend. Lastminute.com was one of the triumphs of the dotcom boom and one of the survivors, as was I, when all around us collapsed. Indeed, the noble Baroness is a born survivor. No matter what slings and arrows have been flung her way, she just brushes herself off and gets on with it. She has been a champion for our industry and has helped government understand the challenges of the digital revolution. Through her chairmanship of Go On UK, she has sought to make Britain the most digitally skilled nation in the world. That is a tough challenge in that, as she said, 7 million people have never used the internet. I am delighted to have a fellow IT entrepreneur in your Lordships’ House and I look forward to working with her.
There is a digital train crash about to happen. In the past few months, we have seen some dramatic failures on our high streets. Jessops, HMV and Blockbuster video have all gone bust but not as a result of the financial crisis, the Government’s policies or the boom in out-of-town shopping centres. They have failed because they were unable to anticipate the tsunami of the digital revolution. Cameras are on their way out, music is streamed, DVDs are downloaded over the internet. This is just the beginning and we had better get used to it. The internet is changing everything. It is Schumpeter’s creative destruction being condensed into months rather than decades.
This digital revolution is exciting and challenging. It will continue to revolutionise our lives. We must not be afraid of it. We must grasp it and make sure that all our people are equipped to participate in its benefits. Most of all, we must make sure that no one is left behind.
Lord Higgins
My Lords, I certainly agree with the noble Lord who has just spoken—we have heard an outstanding maiden speech from the noble Baroness, Lady Lane-Fox of Soho. However, I should also add a word of warning: competition is increasing from the younger generation. I discovered last weekend that my eight year-old grandson has created his own fully operational website. An interesting section at the end states that no harm has been caused to animals in the creation of the website, which indicates a correct order of priorities.
I welcome various aspects of the gracious Speech, particularly the action that is proposed to be taken on asbestos-related cancer. That matter has been raised previously in your Lordships’ House but without success. I am glad that proposals are now in place to deal with it. Other than that, I think that the gracious Speech is regarded as being somewhat thin, and there is a tendency to concentrate on what has been left out rather than what has been put in, particularly at the other end of the building. None the less, there is no doubt that the central part, as far as economic management is concerned, is embodied in the paragraph that states:
“My Ministers will continue to prioritise measures that reduce the deficit, ensuring interest rates are kept low for home owners and businesses”.
I strongly support the line that the Chancellor of the Exchequer has taken on this. However, I am somewhat concerned by the assertion, which was repeated by my noble friend on the Front Bench this afternoon, that we have reduced the deficit by a third. I do not think that that is the right way to put it. One should say that we are still increasing borrowing at two-thirds the appalling rate set by the previous Government. I do not believe that this can go on. It is crucial that we find a means of reducing that deficit, as stated in the gracious Speech. I said right at the beginning of the formation of the coalition how difficult that would be. We are still not the least bit clear where the Opposition stand. Mr Balls still seems to be saying that the deficit has been cut too soon and too much. I do not believe that either of those assertions is valid.
However, the policy is now being reappraised. An IMF team is making its usual annual visit to the UK. The press seems to be indicating that the IMF’s support for the Chancellor’s policy is weakening. I believe that that is wrong. I very much hope that the IMF will continue to sustain his efforts to reduce the deficit and ensure that our position is sustained internationally. Various people have argued against the stance adopted by the Chancellor, as we have heard from the opposition Front Bench today. However, one thing is absolutely clear: the rating agencies are not reducing our rating because we are cutting the deficit too much but because we are not cutting it enough. That is an important point to take into account.
At the same time, we have to relate this overall problem to economic management. Demand management seems to have disappeared totally from discussion. It is very important, however, because if we find ourselves in a situation—as we are—where fiscal stimulus is not possible, we must rely on monetary measures. To that extent, I very much welcome the action that has been taken on quantitative easing. It is, of course, true that this is having a serious effect on pension funds, as was pointed out by the opposition Front Bench. The time has probably come to reappraise whether achieving quantitative easing by working through the gilts market is the right way to do it—that is, the rather ludicrous situation whereby the Bank of England purchases the gilts and then pays interest to the Chancellor. That is rather silly. We should consider other ways of doing this as we will never want to reissue the debt which has been purchased. If we need to do that to control inflationary pressures later on, that can be done by issuing new gilts, which are likely to be of a better form and duration than those which have been purchased. I suggest to my noble friend on the Front Bench that we need to do some serious work on that matter.
The article by my noble friend Lord Lawson was very helpful in as much as it made one think afresh about Europe. I have to confess that for many years I have said to people that there is no question whatever of our withdrawing from Europe. I believe that the time has come when we need to reassess that. Indeed, the Prime Minister has indicated that that is the case. The timetable that he has set out is right. In television interviews he is asked whether he would vote to stay in or to go out of Europe if there were a referendum tomorrow. However, that is a totally false question. People come down on one side or the other but usually state their reservations, which are then totally disregarded in subsequent headlines. That is the situation we happen to be in but, as I say, the Prime Minister’s proposed timetable is right and we should follow it.
My noble friend Lord Lawson and others are too pessimistic about negotiations. At all events, we should take the opportunity to negotiate. It would be absurd simply to say that we will pull out without any negotiation whatever. That would not be the right way to approach the problem. However, irrespective of whether the negotiations are likely to be successful, the touchstone is the financial transaction tax. If we fail to resist that being applied to the City of London, the possibility of successfully negotiating other issues may be less than one would hope. None the less, overall, it is worth entering into negotiations and it is worth while to have a referendum in due course, as is proposed.
Meanwhile, those who are in my party need to be very careful. There is not to be a referendum, as I understand it, unless the Conservative Party wins the next general election. If there is one thing that I learnt from some 18 years on the executive of the 1922 Committee in another place it is that the electorate are far more concerned about whether a party standing for election is united than they are about any individual policy. I lived through that in 1997. My only consolation was that the people on the 1922 executive who were being such a pain were the ones who lost their seats. We really must deal with this issue with a little more sensitivity. The press is bound to blow up enormously the matter of a referendum as a great event, which it may be, but we have to keep a sense of perspective on this issue.
Baroness Hayter of Kentish Town
My Lords, I shall speak about consumer rights, on which a number of things are to be welcomed. First, I welcomed the opportunity of hearing the maiden speech of the noble Baroness, Lady Lane-Fox of Soho. We look forward to her continued activity on behalf of consumers, particularly in disadvantaged communities. Secondly, I welcome the proposed consumer rights Bill and everything in it. Anything which can be done to make markets work better for consumers is good for the economy, as well for consumers. I also pay tribute to the role played by the Minister, the noble Baroness, Lady Hanham, in accepting our amendment on requiring letting and managing agents to belong to an ombudsman scheme. That is going to make a real difference to tenants and landlords, and help clean up the sector, which can only be good for the provision of much-needed homes. She should be proud of the results of her arm-twisting. Thirdly, I welcome the opportunity that will be provided through pre-legislative scrutiny of a draft Bill. This will ensure that we end up with a Bill that will make a real difference to consumers. That is probably enough of the good side.
I now turn to what is not in the Bill and where the Government have failed to help consumers. We on this side have tried to amend various Bills to help consumers. We sought to have the Prudential Regulatory Authority and Competition and Markets Authority set up consumer panels. The Government resisted. We sought to amend the Financial Services Bill and the Enterprise and Regulatory Reform Bill whereby service providers should have to exercise a fiduciary duty towards their retail savers or beneficiaries. The Government resisted. We asked for the Competition and Markets Authority to include members drawn from a consumer background. We failed. We sought to prevent the closure of Consumer Focus. Sadly, we failed.
Furthermore, funding of trading standards has been slashed, thereby making the identification and prosecution of scams and rip-offs even less likely. The Government also failed to introduce a register of lobbyists. Yet who has the money to pay for fancy public affairs companies? It is not consumers. Whether it is the tobacco industry, drinks manufacturers, the insurance industry, food producers or newspaper proprietors, their bought access is never in the interests of their customers but of those industries’ bottom line. We need to know who is paying for such access. Sadly, the Government omitted from the gracious Speech proposals in this area. When tested, the Government have shown themselves to be lacking in resolve to help consumers negotiate complicated or unfair markets. The Government have failed to put consumers’ interests centre stage. Other measures in the Queen’s Speech, such as requiring landlords to check the immigration status of tenants, are likely to lead to more unofficial letting or to fewer available lets, both of which disadvantage potential tenants.
I turn to the proposals, which, although welcome, do not go far enough and miss the opportunity to ensure that consumers always get a fair deal or, failing that, easy access to redress or restitution. We welcome the enabling of “opt-out” collective redress in competition cases, whereby firms found guilty of competition law breaches will be more likely to pay damages to all affected consumers. However, the proposals are limited to competition and do not cover breaches of consumer law. Why is there no provision for claims to be brought by representative bodies, which could cover product liability, mis-selling or unfair terms such as over bank charges? We welcome the proposal to clarify the law on unfair terms in consumer contracts, which will enable, for example, bank charges to be assessable for fairness by the OFT or its equivalent body. We welcome the introduction of redress for a breach of consumer protection regulations, which will clarify the law and extend consumers’ ability to claim for losses from misleading advertisements or aggressive sales practice. We welcome the remedy for consumers when they have not received what they expected from a service, although we would like this to be extended to where the service was substandard, even though the provider used skill and care.
We welcome the provisions to clarify consumer rights for purchases with digital content. However, it is not clear whether a consumer can get a refund for faulty digital content. We will return to this matter in due course. As with our letting agents amendment, we support consumers having access to redress but would like to go further, with better enforcement and the possibility of a single portal to assist such access. We will seek to ensure that the Bill provides for a strong, accessible, collective redress mechanism, similar to those in Portugal and Australia.
Finally, where are the measures to respond to constant consumer problems? These include cold calling; energy bills increasing by £300 a year since the Government came to office; ever-increasing rail fares, up 9% a year after the Government allowed train operators to increase some fares by 5% above the cap; and extortionate charges on some pension savings such that on retirement some pensioners find that nearly half their pension fund has been wiped out by charges. We need a tough energy watchdog to force suppliers to pass price cuts on to the consumer and to ensure that the over-75s automatically get the cheapest tariff. We need intervention on rail fares and rights for passengers to get the cheapest ticket available, without having to be a whizz-kid on the computer—be they my noble friend Lord Mitchell or our latest noble Baroness.
We need transparent charges on pensions and savings, and to tackle the worst offenders by capping charges at 1%. In addition, we should have had a communications Bill to help consumers, involving greater protection for children and action to tackle the industry’s concentration and monopolistic nature. We need to strengthen people’s rights in a digital consumer’s charter that should cover privacy and online theft, price transparency, greater ease in switching providers, help for parents to protect their children online, improved access to decent broadband, consumer protection for digital payments, and effective action to tackle nuisance calls, texts and spam e-mail.
In short, we need action to create a culture that respects consumers and helps them to obtain a fair deal across all markets. We need to tackle rip-offs and sharp practice, and we need a Government to be on the side of users and consumers, not a voice for the producer or service provider over the less powerful consumer. We will welcome the consumer Bill but work to improve it to make it the best that it can be.
Lord Mawson
My Lords, the first words of the gracious Speech tell us that the Government will continue to focus on building a stronger economy so that the United Kingdom can compete and succeed in the world. That is exactly right.
At a recent meeting with a large construction company that is playing a major role in rebuilding some of our public infrastructure, I was told how the company longed to build developments that were more “joined up”. The present silo approach to regeneration did not make business or social sense with the limited funds now available. In recent years, there has been much talk and some action from successive Governments in seeking to join up public sector budgets because they get more bang for their buck, but the living examples of success are still rare. The silos that exist between education, health, housing and business funding remain stubbornly in place, and successful partnerships between the business, public and voluntary sectors are still hard to do because our procurement systems are broken. When times get hard, the tendency is for us all to retreat back into our familiar silos precisely at the time when the financial squeeze presents us with a real opportunity to address this enduring impasse. I fear that this is happening now, and without clear leadership centrally it will get worse.
When you have worked in a local community for 30 years, you gain the long-term view. You have seen government programmes come and go, and you have gained some measure of what works and what does not. There has been a whole host of attempts in recent years by successive Governments to join up local delivery. Everyone—particularly the business community—knows that that is really important and that it is the only way to make smaller budgets stretch further. As a result, there has been a whole host of initiatives. To name just a few, there have been local integrated services, Total Place, small area budgets, participatory budgeting, Total Neighbourhoods and the Neighbourhood Community Budgets programme. These government programmes had one thing in common: they were short-term initiatives promoted by one Minister. What seems to have happened is that as some have encountered the difficulty of making change happen, interest towards them has waned and the pilots have not been sustained or the Minister has changed. Another Minister has then decided that they want to tackle the problem and so they start again.
These initiatives seem to fall into two types. There are the Total Place-type initiatives, which are about bringing together local public services—for example, health and social care—and then there are the small area budgets and Neighbourhood Community Budgets programme, which seem increasingly to have taken the direction of consulting local people about local service delivery. However, it is far from clear why the process of consulting local people necessarily has an impact on the quality of local services or enables services to be delivered in a more joined-up way. Again, in our experience the private sector was excluded.
It may be helpful at this point to share with noble Lords some recent practical experience. This is not a criticism of government but it illustrates what can happen to those of us in local communities who are serious about this agenda. On the Department for Communities and Local Government website we are told that in October 2011 the Communities Secretary announced details of how areas can bid to trial two local approaches to integrated services: Whole Place Community Budgets and Neighbourhood Community Budgets. The website describes this dramatic new shift as,
“an opportunity to change the future of the way public services are funded and be the thumping heart of your community”.
We are told that 24 areas out of 45 had been shortlisted to put their name forward to work with Whitehall and develop neighbourhood-level community budgets to explore how different public sector funding streams could be brought together to both save money and create more integrated public services. The website says that the applications demonstrated a drive across the country to explore new ways to give local people more control over services.
Our partners in Tower Hamlets working in education, housing and health thought that this was a very good idea and timely, because we had been developing integrated services together for many years with some success and often against the odds. Here was an opportunity seriously to extend our work and create more joined-up solutions that focus on the individual and the family.
As partners, we applied for and won pathfinder status, and here I must declare an interest. I was asked to speak at a meeting of civil servants new to this field of work and to share our experience early in the process. I was also invited, with an excellent local authority CEO, to meet 15 directors-general from across government, who said that they were all keen to co-operate and learn from our experience of what works on the ground. We were encouraged by the offer of support and involvement from government. Although we did not want government to hold our hand, we did want understanding of the practical issues involved and a little oil in the wheels.
In Tower Hamlets we began to get practical, bringing local people and partners together. We developed a pilot programme and explored how we could bring budgets together and thus use the limited moneys that were available in health, education and housing more efficiently. Crucially, we wanted to involve local people in the delivery process and not in talking shops, thus creating buy-in, new skills and community ownership. We began to talk to major business partners to bring them on board; there was some interest.
There is real concern from politicians across the House about a lack of engagement with local communities, particularly at a time when people feel increasingly disengaged from the political process. We have had a taste of this in recent weeks. In my experience, people do not want to be just the recipients of the state and its services or to be consulted to death about what the state is going to do to them. No—our experience over many years is that many local people also desire to be involved and practically engaged in the delivery of services. New jobs and skills and innovation can come through this process, as we have discovered, and very poor people’s lives and those of their families have been changed for ever as a result.
After some consultation and research, our team decided to focus its efforts during the first year on the diabetes epidemic that is rife in Tower Hamlets. This epidemic needs to be tackled through a joined-up approach in the local community. The lead consultant at the local hospital told me that his caseload was overwhelming him. He agreed that the solution lay in people’s lifestyles and diet, and that it could be tackled only through a joined-up programme run in the community connecting health, education and lifestyle. We created a business plan and began to commit individual budgets as a sign of good faith and to build the project around well established work we had already been doing in this area.
What we then experienced from government was what one of our very experienced CEOs described as a “journey in retreat”. Promises were made to work with us to “enable” the process, but when we asked the Minister to write two letters to the chairman of a supermarket chain and the chairman of the local hospital—both of whom were coming towards the project anyway—to help to oil the wheels, we were told that the officials advised against it. The more we sought to create integrated solutions, bring funding together, innovate and to take seriously what the Secretary of State had said about empowering communities, the more we experienced a process which encouraged consultation and talking shops and not delivery.
Given the health crisis we faced, this about-turn was serious. We were being pushed back into thinking we had explored 20 years earlier and had moved on from precisely because in our experience it delivered little change in practice and often led to increased apathy among local people, along with more talk and reports. My colleagues and I began to ask: is government under the leadership of any party capable of being a learning organisation? Very little, as far as we could see, was being learnt. I never saw the directors-general again and, as far as we can tell, we will now have to move forward on our own with, we suspect, little learning taking place at the centre. This we will of course do; we do not want wet-nursing by central government but we worry about the cost of this process and another wasted opportunity.
I suspect that this experience is not unique and that it has something to do with why the electorate, many of whom have become involved in this project, are increasingly sceptical about the ability of any Government to follow through and deliver. This is one policy initiative that was actually a very good idea: it could have led to deeper community engagement, joined-up innovation and a streamlining of public funding. We had created a project that we could all together learn from by acting both centrally and locally, but, as far as we can tell to date, there has been little follow-through.
So how do we move integrated working forward and deepen practical partnerships between the various sectors? First, we need to recognise the importance of long-term leadership. In my experience, real change happens in a community where there is clear, committed leadership that remains involved for the long term. Secondly, we need to resolve the confusion between democracy and delivery. The reason local services are not joined up is not that local people are not consulted. While it is good to understand the priorities and concerns of local people, joining up delivery is hard work and, if at every turn the partners feel they need to check via some amorphous consultation process, it is likely to run into the sand. Instead, we need to enable and encourage local organisations to deliver services together, and to use the Government’s procurement muscle to deepen partnership working between the sectors. Business is now up for this but it needs encouragement and not signals that point to a retreat.
Thirdly, what is the role of government? Everyone knows that we have to make this work. One of the reasons why there is such a loss of trust in the political process is the frequent failure of successive Governments to deliver on all their many promises. My colleagues and I suggest that the Government identify a figure who everyone respects and who will take long-term responsibility for this process in government. Then they should find an organisation outside central government to run the programme and agree a sensible budget with a 10-year contract.
To be frank, if the will or desire to do this is not there, my advice is to stop wasting everyone’s time with talk of joined-up thinking and action. The electorate know spin when they hear it. If the present Government want to distinguish themselves from previous Governments and distance themselves from broken political promises, I suggest our politicians focus on three words: delivery, delivery, delivery. My colleagues and I have found that trust is created and local people participate when you deliver in practice on what you say.
Is not an integrated, in-the-round community what politicians past and present are struggling to define when they use phrases such as the third way, big society and one nation? This is how you put flesh on the bones of what these terms might mean in practice and make them come alive for people.
I have an awful feeling that I could be making this same speech in response to many future gracious Speeches: I just hope that someone will prove me wrong. We can hope. I certainly will continue to worry about this issue like a dog with a bone because I know what a difference integrated working can make when you get it right and, of course, what moneys can be saved if you do it.
Lord Faulkner of Worcester
My Lords, in my speech this afternoon I intend to concentrate on transport, with particular reference to the gracious Speech’s very welcome confirmation that the Government are proceeding with a paving Bill to allow work to proceed on plans for the construction of High Speed 2. I wish them well with that and with the hybrid Bill, which I hope may pass before the end of this Parliament.
I should remind the House of my relevant interests. I serve as an unpaid member of First Great Western’s stakeholder advisory board. I am president of the Cotswold Line Promotion Group and the Heritage Railway Association. I am also the co-author of a recently published book called Holding The Line: How Britain’s Railways Were Saved, which contains a political and social history of the railways, particularly since the publication of the Beeching report 50 years ago.
Perhaps I may start by picking up a theme that runs through that book. It is sometimes hard to recall how massive the turnaround in the public’s attitude to rail travel and the fortunes of the industry has been. In the 1970s, 1980s and early 1990s, the railways appeared to be in terminal decline. The process of retrenchment and cost-cutting, which had started at the time of Beeching, appeared remorseless and inexorable. Numerous plans were hatched to reduce the size of the network further by line closures, cuts in services and fare increases.
Governments of both parties encouraged plans to substitute buses for rail services, particularly in rural areas. Weird enthusiasts for the Railway Conversion League were listened to as they put forward plans to concrete over the railways and turn them into busways. Thirty years ago, it looked as though the lobbyists for the road industry, road haulage and motorway construction might achieve their final victory. Back in 1960, the Road Haulage Association felt able to say in its journal, The World’s Carriers:
“We should build more roads, and we should have fewer railways … We must exchange the ‘permanent way’ of life for the ‘motorway’ of life ... road transport is the future, the railways are the past”.
Happily, it did not get its way because the public decided that they liked their railways and did not want them closed. By 2001, the distinguished City correspondent, Christopher Fildes, who served on the Railway Heritage Committee with me and was a journalistic colleague of the noble Baroness, Lady Wheatcroft, was able to write in the Spectator:
“Railways are a growth industry. Their most sustained attempts to drive away their customers have not succeeded”.
Twelve years on, the growth continues. In 2012, the total number of rail passengers exceeded 1.5 billion, compared with 630 million in 1982. Numbers grew by 5.5% in 2012, 7.2% in 2011 and 7.9% in 2010. The number of those travelling in the last quarter of 2012 was the highest for any quarter since the 1920s. It will not have escaped the attention of your Lordships that much of this has been achieved at a time of recession and in the face of fare increases above the rate of inflation, as my noble friend Lady Hayter pointed out. On 11 March, Sir David Higgins, chief executive of Network Rail, said in a speech at the Campaign for Better Transport conference in the Science Museum that,
“utilities such as airports and power have seen annual compound growth rates of no more than 1 per cent on average, yet rail has grown by 5 per cent compound every year”.
As people’s experiences of travelling by rail and the reliability of services improve, this growth is likely to continue. The West Midlands Regional Rail Forum says that Network Rail’s growth forecast for 2021-22 has already been achieved eight years early and it is a similar story elsewhere. Both the west coast main line and the east coast main line will reach capacity before the end of this decade. In the case of the west coast main line, that will be less than 15 years after the completion of one of the most disruptive and expensive upgrades of all time.
I do not understand how anyone can seriously argue that spending another £20 billion-plus on upgrading these two Victorian railways and disrupting services for years at a time, and in the end producing infrastructure that cannot support line speeds that are commonplace throughout Europe and the Far East, stands any sort of comparison with the benefits that will flow from building High Speed 2. To argue, as the HS2 opponents do, that the new line is only about reductions in journey time between London and Birmingham is completely wrong and misses the point. It is about revitalising the economies of towns and cities in the Midlands and the north of England, and narrowing the north-south divide. It is about giving the railway the opportunity to satisfy the ever-growing demand for passenger travel. It is about reducing the number of car journeys and short-haul air passenger flights, both of which will have significant environmental benefits.
Perhaps equally important, High Speed 2 will—according to the WSP engineering consultancy—lead to 500,000 fewer heavy goods vehicle journeys on the M1, the M40 and the M6, which is the equivalent of 65,000 tonnes of CO2. The new railway will produce environmental benefits worth £1.3 billion over 60 years. For all those reasons, I am happy to reaffirm my unqualified support for High Speed 2, which is a rare example of a brilliant idea conceived by one Administration—thanks to my noble friend Lord Adonis—and then picked up and developed by their successor.
Before I conclude, there is one other matter that I wish to bring to the attention of the Minister. I have already given her notice of my intention to raise it in this debate. This is also a non-party issue in the sense that the previous Government took the initial decision and this one are sticking with it. I am talking about the western terminus of Crossrail, which is a hugely important and valuable project capable of transforming the travel-to-work experience of hundreds of thousands of commuters, as the noble Lord, Lord Deighton, said in his opening speech.
On 5 March, a number of Members of the other place and of this House, including the noble Earl, Lord Attlee—who I am very pleased to see in his place—and I visited the site of the new Crossrail station at Bond Street. The following week, I was taken by First Great Western on a tour of the new station at Reading. I was particularly interested to see included in the new arrangements a platform designed to accommodate four Crossrail trains an hour, should it be decided at some stage that Reading should be the western terminus, rather than Maidenhead. To me, and to almost everyone in the industry and outside it who understands these issues, it is intuitively self-evident that, following the Government’s welcome decision to authorise electrification of the Great Western main line, it is to Reading that the Crossrail trains should run.
I also learnt that we are within days of starting work in Maidenhead to construct the turnback facilities, taking around 18 months and costing as much as £35 million. I wrote to the noble Earl, Lord Attlee, on 18 March, making the point that if the decision was to be taken later to extend Crossrail to Reading, much of the new infrastructure at Maidenhead would not be needed and the Government and Transport for London would be criticised for wasting money. The Minister replied to me last week and I thank him for his letter. It contained the sentence:
“Officials will continue to work with Network Rail and the train operators on the timetabling issues presented by the introduction of Crossrail services on the Great Western Mainline”.
It did not, unfortunately, state that there would be any pause in the work at Maidenhead.
I raise this issue today because we are at the point where a decision must be made to prevent money being wasted at Maidenhead and to deliver a far better arrangement in its place. I understand that various discussions are going on behind the scenes involving Transport for London, Network Rail, the train operators and the Crossrail team. I ask that DfT Ministers get directly involved and help deliver a solution that makes best sense all round. I hope the noble Baroness will have an answer to that when she replies.
Baroness Byford
My Lords, the Government are committed to building up the economy, supporting growth in the private sector and the creation of more jobs and opportunities. This is welcome. I also very much welcome the maiden speech of the noble Baroness, Lady Lane-Fox of Soho, because she spoke on the important topic of digital online and the growth of online services. Increasing the coverage of broadband and improving broadband speeds is but one way of achieving this goal. A survey of the Institute of Directors in January 2013 found that fixed-line broadband for urban businesses is generally good but that in rural areas growth was unsatisfactory. Its conclusions state that,
“broadband in rural areas is an urgent priority”.
The CLA estimates that 18% to 20% of rural areas cannot get broadband. This affects around 100,000 businesses, with a turnover of up to £60 billion, many of which are obviously farming or farm-related businesses. Rural broadband influences diversification and has enormous potential for on-farm increases. The noble Baroness stressed the importance of digital growth and online services. She commented that there should be a universal UK system and that it was a basic right for everyone.
I am grateful to the NFU for its briefing on broadband services. Defra’s whole-farm approach involves moving most or all of the farming-related services online and is run through Business Link. Without adequate broadband services many businesses are unable to progress and grow. The House of Lords Communications Committee report of July 2012 criticised the Government’s broadband strategy for failing to create a future- proof national network, concluding that the current programme risks leaving people and businesses in certain areas of the UK behind.
In his introduction to the debate on the report, my noble friend Lord Inglewood highlighted three key elements. First, broadband policy should be driven by the need to arrest and ultimately eliminate the digital divide. Secondly, it should be driven by a long-term but flexible view of the infrastructure’s future; the report referred to fibre-optic hubs that could bring open access into or within reach of every community. Thirdly, it should strive to reinforce the robustness and the resilience of the network as a whole.
I should have spoken in tomorrow’s debate, which obviously covers agriculture, but I cannot and so I have tried to pick three issues that are common to the debate today—namely, regulatory reform, broadband and local government. I move swiftly to regulatory reform.
My noble friend Lord Forsyth, who has just left his seat, said that he felt that there was no need to have in the gracious Speech a Bill to look at the effectiveness of the regulation of business. I am not sure that I agree with him but I share some of his thoughts. Within the agricultural sector, a farming regulation task force was set up in July 2010. It was asked to carry out an independent review of ways to reduce the regulatory burden on farming businesses. The report brought forward some 200 recommendations.
Defra responded in February 2012 and followed up with an implementation group chaired by Richard Macdonald. One year on, it has identified five priority issues. First, there should be a culture change, focusing on outcomes rather than on processes. Secondly, there should be a system of inspection and earned recognition allowing farmers to demonstrate best practice and earn recognition, which would reduce the number of inspections made on-farm. Thirdly, data-sharing and paperwork across Defra and its agencies should be improved. Fourthly, a system for overseeing government projects and developing ways to deliver simplified and integrated environmental regulatory messages should be followed. Fifthly, the electronic reporting of animal movements should be extended.
I have gone into some detail as the evidence reflects that change comes slowly. In its briefings, the NFU recognises that progress has been made but that it is slow, which results in frustration. Its plea is that the recommendations should be driven forward urgently, with the impact on the ground being the real test for delivery. I suspect that other noble Lords will have had similar experiences within their own range of businesses.
Finally, I turn to local government and particularly to planning. In a Written Statement last week from the Department for Communities and Local Government, it was stated that the secondary legislation will, among other things, allow underused and old-fashioned offices to be revamped as dwellings and existing unused agricultural buildings of 500 square metres or less to be used for new businesses, all without recourse to the planning system. As the Written Statement points out, the rural economy will be given a boost,
“while protecting the open countryside from development”.—[Official Report, Commons, 9/5/13; col. 5WS.]
The simplification of planning guidance and a careful relaxation of planning law will benefit both town and country—provided, that is, that the remaining rules are observed, and strictly enforced by local government where they are not.
It is known that in some areas the flouting of planning laws leads to both a marked decrease in community spirit and, in too many cases, to an increased risk for local inhabitants. An obvious risk is where a business is established in premises with poor access to a main road and where planning permission would have been turned down by the Highway Authority if it had known about it. Figures on serious road accidents have already shown a rising trend in rural areas.
A less obvious problem is that businesses without planning permission tend not to advertise their presence. Visitors in vehicles of all kinds use postcodes. Google focuses each postcode on one particular building and satellite navigation systems take drivers to what might be a private dwelling. I know of one dwelling occupied by a single, elderly lady which receives unwanted callers several times a day, from 7.30 am until 9.30 pm. The drivers are looking for second-hand car offers, for sale over the internet, from premises on the other side of the road. Clearly, that site should not have been approved, and it was not.
On 24 April, permission was granted in another place for a Bill requiring local authorities to impose substantial fines for the flouting of planning regulations. Such a move would not affect legitimate development. However, it would support the National Planning Policy Framework, which explicitly recognises that effective enforcement by local government is necessary for maintaining public confidence. Is the Minister confident that local authorities have the planning officers and the finance to make sure that this happens?
Finally, I turn briefly to direct farming issues. Farms and the farming industries provide a variety of different businesses within the whole. They produce food, look after the countryside, care for biodiversity and are involved and engaged in energy projects. One thing makes the farming community different from all other businesses: it is subject to the vagaries of the weather. Over the past year, snow, sunshine and drought followed by floods have obviously had a big impact. Farm incomes for 2012 show a bottom-line decrease of some 14%. UK agriculture is but part of the food industry, but it is an enormously important one that wants to play its part. It needs people with vocational training and appropriate skills. Science and technology are hugely important, while innovation is key to making our businesses grow. Farmers are responding to these issues and they are willing to take calculated risks. They look to diversity and growing new ideas outside their businesses.
I welcome many of the proposals in the gracious Speech, but the Government are supporting many other things beyond the Bills set out in it.
Baroness Warwick of Undercliffe
My Lords, I join with other noble Lords in congratulating the noble Baroness, Lady Lane-Fox of Soho, on a splendid maiden speech that was delivered with grace and feeling. I look forward very much to hearing more such contributions from her.
There was one piece of very good news in the gracious Speech. The Intellectual Property Bill will provide a new exemption within the Freedom of Information Act for pre-publication research. This is an amendment which I, together with several other noble Lords, notably the noble Baroness, Lady Brinton, argued for during the passage of the Protection of Freedoms Bill. It is true to say that the Government took some persuading. The Justice Committee of another place took up the argument, and the Government finally accepted that some real harm could flow from the premature exposure of ongoing research material. I want to congratulate the Government on taking this step and I shall certainly support the measures as the Bill progresses.
I am far less certain that we should wholly welcome the promised immigration Bill. In announcing the Bill in the Queen’s Speech, the Government made it clear that the purpose was to,
“ensure that this country attracts people who will contribute, and deters those who will not”.
I think that there is a danger in this description. It seems to play to popular notions of “good” and “bad” immigration. It also suggests that we can know absolutely what a migrant will bring to this country in the future. I can think of many examples of people who came to this country as refugees who have made enormous contributions, not least in academic fields. However, in framing the introduction of the Bill in this way, the Government have sought to emphasise the value of many migrants to the UK. We should welcome and not deter them.
I am sure that the Prime Minister and many of those close to him understand and share my view that international students are an enormous asset to the UK and make both an immediate and a long-term contribution to this country. Where I think we differ is in believing that the UK is doing the best it can to attract such people. Although the Prime Minister has gone some way to explaining that the UK welcomes international students, that has not been enough to counter the effect of recent policy restrictions and, perhaps more significantly, hostile rhetoric. If the Prime Minister wants to see growth in this important area of university activity, he is going to have to do more. Removing international students from the net migration target would send an important signal that the Government do not intend to meet that target by means of steadily tightening the rules for students. In that context, can the Minister explain how the measures in this Bill will affect students? Will they be affected by new restrictions on access to the NHS? Which appeal rights will be lost? What calculations have the Government made on the impact of requirements to check immigration status in regard to the supply of private rental accommodation?
If the Government’s aim is to achieve a balance in policy which ensures that the UK attracts migrants who contribute to the country, what plans are in place to increase our attractiveness, given the evidence that we are losing ground? The Minister may say that applications for visas to study in universities are up, and that UCAS figures are also up. There are a good many people in this House who understand these figures and know that the really important measure is the number of new enrolments. These figures, as the Minister will no doubt be aware, have shown a decrease recently, particularly for post graduate taught students. In the context of a rapidly growing market, this should be a cause for concern. While the Government are clearly doing what they feel they can to put off those who, in their view, are unlikely to contribute, where are the measures to attract those who clearly do make an unequivocal contribution?
Finally, I want to speak briefly about something which was absent from the gracious Speech. Last year, we were led to expect a higher education Bill. We now know that we will not see one this side of an election. However, even without a Bill, the Government will be taking decisions that will have a major impact on the future of our universities. The spending decisions that the Chancellor will make in the next couple of months for the years 2015-16 will be very challenging indeed, and I certainly do not envy him the task. But the biggest priority facing this Government is the return to growth. It would be economically short-sighted in the extreme to cut funding for teaching and research at this time. NESTA has shown that 54% of jobs growth between 2000 and 2005 was produced by innovative companies. It also showed that innovative companies employ more than double the share of graduates than non-innovative businesses. The UK now ranks second in the world for university-business collaboration. It amazes me that we still spend substantially below the OECD average on tertiary education in the UK, and we spend substantially less on research than many of our competitors. This would be precisely the wrong time to make that disparity even worse. The industries which are going to help us re-establish growth need graduates and they need a strong research base. I hope that the Government will not prioritise one at the expense of the other. Yes, we need to maintain expenditure on research, but not at the expense of student numbers or efforts to widen participation.
In that context, we know that part-time undergraduate numbers in England have decreased considerably, with a 40% drop in part-time enrolments compared with 2010. We really cannot afford to ignore this. I am pleased that the Government have asked Universities UK to lead a review into the reasons for this decrease. The fact is that although many in higher education have been aware of the issue, little public or political attention has been devoted to it. A recent meeting of the All-Party Parliamentary University Group heard some of the possible reasons for the fall, but we were all struck by the fact that if something like this happened to the full-time population, there would be an enormous reaction and great concern; there should be concern about part-time provision too. The changing demands of employers mean that we have to provide routes back into education for people long past their early twenties. I would like to ask the Minister what assessment has been made of the impact of the drop in part-time enrolments on the economy.
I hope that the Government will look carefully at the recommendations of the Universities UK review when they are published in the autumn. I hope, too, that in the difficult spending round ahead, we will see that the Government are committed to investing in both teaching and research. I know that many others in this House will join me in making that case over the next few months.
Baroness Bonham-Carter of Yarnbury
My Lords, like the noble Baroness, Lady Byford, I should really be taking part in tomorrow’s debate, in my case concentrating on culture and education. Today, I will talk about the creative industries, so there is quite a nice overlap. However, perhaps I may start by offering my congratulations to the noble Baroness, Lady Lane-Fox, who I know a little. She made the most fantastic maiden speech. Her father, the distinguished historian, was sitting next to me and said that he was far more nervous than she was, and I suspect that that was probably true. Perhaps he will give the noble Baroness hints for her speeches on horticultural and historical matters.
I will concentrate on the creative industries and the contribution they make to our economy, our shared identity as communities and as a nation, and our reputation in the world. Matthew Parris has referred to the culture of a country as its heartbeat. It is a fitting image, as considerable economic benefits flow into the body politic from cultural activities. The UK’s creative industries are a significant contributor to our economy and can, if properly nurtured, play a key role in the nation’s financial recovery and be part of the solution to the problem of our young people facing unemployment, to which the right reverend Prelate the Bishop of Birmingham referred. They are a result of innovation, ideas, imagination and spontaneity, inspired by the rich tapestry of British arts and culture. As a country, we have always been blessed with a wealth of creative talents which have shaped and illuminated our history and national identity.
We have a global reputation for creativity and innovation, even more so since last year’s Cultural Olympiad. Who can forget that opening ceremony? It was a beautiful and brilliant spectacular; complex and humorous. In celebrating the entity that is the United Kingdom, it was a showcase for our great creative industries. We saw our pre-eminent conductor, Sir Simon Rattle, performing with Mr Bean. There was James Bond, first the product of a writer, Ian Fleming, and then of film-makers, actors, special-effects creators, costume and set designers, and those who make the costumes and sets. It celebrated our children’s literature, music, television and art, and how art and design can come together in such a wonderful creation as Thomas Heatherwick’s “The Cauldron”. And centre stage of course—literally—was Tim Berners-Lee, British creator of the world wide web. The ceremony was shot through with our creative accomplishments, and was a huge one in its very self.
Aware as I am that this is a debate partly about the economy, I have some statistics. The UK’s creative industries are worth more than £36 billion a year, generating about £70,000 every minute for the UK economy. Employment in the sector has grown at double the rate of the economy as a whole. At least £856 million per annum of spending by tourists who visit here can be attributed directly to arts and culture. The economic contribution of the arts and cultural sector has grown since 2008, despite the UK economy as a whole remaining below its output level before the global financial crisis. The UK has the largest cultural economy in the world as a proportion of GDP. That is all according to a report brought out by the Arts Council last week. That last point is crucial, because in today’s global economy, where capital and labour are so mobile and goods and services can be produced almost anywhere, it is the power of ideas and innovation, and of creativity and design adding value, that will bring growth, economic success and prosperity. The world’s creative industries make up around 7% of global GDP and are rightly being recognised as crucial to economic success. While ours are a driver for economic growth in the UK, they are also helping our country compete effectively on the world stage.
I am lucky enough to be the Prime Minister’s trade envoy to Mexico. On a recent trip, I was impressed by the opportunities that this one country potentially offers the UK in terms of trade and by the reputation that goes before us there in the area of the creative industries. Guadalajara, the second largest city in Mexico, was designated last year by the new Government as a digital creative city. Developing that is a priority for the Government and for the governor of that area. It will focus on attracting technology companies that produce video games, movies, multimedia and mobile applications—all areas in which we excel—and offers a clear opportunity to achieve our Government’s target of doubling bilateral trade with Mexico by 2015.
Then there is the contribution that creative industries make to the vitality of our own society. Here, like my noble friend Lord Razzall, I will quote John Maynard Keynes, although in my case it will be with his Arts Council hat on. He said that government must recognise,
“the support and encouragement of the civilising arts of life as part of their duty”.
An area of great concern is the cuts being inflicted at local government level on arts and culture, despite LGA and Arts Council research that shows the benefits council investment in these areas brings—revitalising local economies and regenerating neighbourhoods that have seen traditional industries decline. Sheffield is an old example of this: an economy that was based on the manufacturing of steel, cutlery, engineering and tool-making. Its city council was the first to recognise that investing in cultural industries was an alternative as a source of employment creation and urban regeneration. It discovered that putting money into culture became investment rather than simply subsidy.
As I mentioned at the start of this speech, I sit on the board of the Lowry in Salford. The idea behind it was to build a major arts complex as a trigger for the regeneration of the area. In 1996, £64 million of National Lottery money was allocated. Central to the Lowry’s ethos is interaction with the local population through a community and education programme. An example is the “Walkabout” project, in which a member of the Lowry team and a range of artists spend 14 months within a specified community—recently the Yemeni and Orthodox Jewish communities. The primary aim is to help them turn their own ideas into creative projects that articulate local issues. A recent report showed that 71% of, I think, the 2,340 people involved in it said that it helped them develop skills which would be useful in future jobs while 81% said participation made them feel more part of their local community. The establishment of the Lowry has been a resounding success in encouraging social cohesion but also as a catalyst for the regeneration of the local economy. The BBC’s decision to relocate some of its key departments to Salford Quays and the subsequent development of MediaCity are clear evidence of this. They brought with them employment, traineeships and new floor space for business and residential property.
In conclusion, the creative industries punch above their weight, providing a significant return on what government invests. The UK is fortunate to have a powerful creative industries sector, but we must maintain it. This creative economy needs creative innovators and employees—we must continue to create the creators. Interestingly, this is an area where we do not have a jobs problem but a skills problem, so it is excellent that the coalition Government have listened to the industry and included computer science in the science strand of the EBacc; and excellent that, last October, the Secretary of State for Education announced bursaries of £20,000 for 50 top graduates to train as computer science teachers.
However, the creative economy needs people who are not just skilled in computer science but also art and other creative subjects. My noble friend Lady Hanham will not have heard this but many other noble Lords have heard me ask about Darren Henley’s review into cultural education, which was published 18 months ago and greeted with great enthusiasm by the Secretary of State for Education. We were told that a national plan for cultural education would follow immediately. When I asked last autumn, I was told we would be getting it this year; when I asked at the beginning of this year, I was told it would be in the spring. We may or may not have had a spring but we certainly have not had a national plan for cultural education, so I am asking again when this might happen. We should listen to such successful and highly respected individuals as Sir James Dyson and Sir John Sorrell, who argue that we should invest more in creative education and design.
The other area in which the creative industries struggle is in getting access to finance. It is a two-way problem. The banks and the regional development funds do not understand the creative industries and the creative industries are not aware of the various support schemes that exist. I commend the coalition Government on setting up the Creative Industries Council, the remit of which includes addressing this problem. But I draw to the attention of my noble friend the Minister the CIC’s Access to Finance Working Group Report, which says:
“In order to grasp the opportunity, investors must learn to understand creative innovators, and creative innovators must learn to make themselves investor-ready … The challenge for public policy is to address the shortage of risk capital in creative content companies and the dire consequences if ignored”.
The creative industries are worth more than £36 billion a year and employ 1.5 million people in the UK. With the right support, they have the potential to bring even more benefits to our communities and our economy.
Lord Borrie
My Lords, the great German Chancellor Otto von Bismarck once said:
“Laws are like sausages, it is better not to see them being made”.
Of course, we in this House see laws being made all the time. It is what we do. We use words such as “scrutiny” and “amendments” and so on, but what we do is watch laws being made. Sometimes it is not a very edifying sight. Since naturally I will choose examples of recent times, it is not really a blame that I can attach to a Government of any particular colour.
We are very familiar with Bills that have been through all stages in the other place and yet we find they have been inadequately discussed or whole chunks of them have not been discussed at all. Sometimes we get Bills in this House where Ministers have to produce all sorts of amendments because they have only recently thought of things or because of points made by Back-Benchers in the other place or this House. Sometimes, as in recent Sessions, we get Bills such as the Public Bodies Bill or the Enterprise and Regulatory Reform Bill, which range over an unrelated mix of topics so it is quite difficult for us to understand what the specific aims of the legislation are. Sometimes the aim of the Bill may be clear but the solution that the Government propose to us is not at all clear. Sometimes new institutions are created that are not really necessary.
For example, in the previous Session, the purpose of the Groceries Code Adjudicator Bill was perfectly clear and the Government had a perfectly good answer to the question: what is the purpose of the Bill? The Competition Commission had recommended that because of the overweening powers of supermarkets, suppliers such as farmers and others deserved some sort of protection and dispute machinery. Why on earth did the Government not simply give this role to the Office of Fair Trading, which was about to be amalgamated—under another Bill of the Government’s—to form a powerful competition body called the Competition and Markets Authority? Instead, a new institution was set up, a charming lady has been appointed; nobody knows how many cases it will receive, but a whole new institution has been set up with a back office and all the rest of it. I do not know how much work it is going to do. It must be very difficult to estimate because “groceries” is very narrowly defined. Nobody knows quite how many different anti-competitive practices may emerge that deserve to be looked at by this adjudicator. It may take some time to know what the result is. It does not even cover all supermarkets; only the biggest ones are specified.
Time and again, the Government tell us that there is a great need to protect small and medium-sized enterprises. I apologise to those who think that there is a real difference between small and medium-sized. Of course there is, but they are classed together for many purposes and that seems quite reasonable. One of the troubles that SMEs—as I will continue to call them—suffer from is late payment of debts. Larger companies deprive SMEs of their cash flow because the cash flow does not proceed in accordance with the dates that the contract has set out. Payments are delayed and small companies have to put up with that. This is a very real problem. I have not seen the full report yet but I am glad to note that the special adviser to the Government on matters of enterprise, the noble Lord, Lord Young of Graffham, has pointed specifically to this problem as something the Government ought to deal with. Of course, I entirely agree.
To my mind, instead of creating some new body, one should look at the Financial Conduct Authority, which was set up recently by the Government; it is a perfectly good, existing body that could be given the task of assisting the creditors among the small enterprises which really need assistance. It is unreasonable to leave it to consumers or small businesses to fight their own case. If they start fighting their own case, they may find that that supplier does not wish to deal with them again.
I note the very worthy sentence in the gracious Speech that:
“A draft Bill will be published establishing a simple set of consumer rights to promote competitive markets and growth”.
It will be very important to see how far the ordinary consumers will be assisted—because they will need assistance—in getting advice or pursuing their case, by citizens advice bureaux, trading standards officers and the like. They will need that help. How far will the resources be provided?
“A simple set of consumer rights” sounds like some kind of holy grail, and people have been using that phrase for quite a long time. I have been involved with the reform of consumer law one way or another for about 50 years. In the 1960s and 1970s Governments of different political colours set about making a number of changes; for example, making illegal any contract terms that sought to exempt a seller from his normal liability to supply goods that are fit for their purpose and of satisfactory quality. Incidentally, it used to be “merchantable quality” but it was reasonable for the Houses of Parliament to accept that “merchantable quality” was not a phrase that would appeal particularly to the ordinary consumer and something else was needed, and so one has “satisfactory quality”, bearing in mind the price and description of the goods. That was an excellent change, but I wonder whether the setting out of consumer rights more simply can be achieved, because it may be very difficult. It may be asking the impossible to set out rights in such a way that they are self-explanatory and the consumer needs no help, but I am delighted, as others are, to see the Bill, and to see how it might be achieved.
Lord Sutherland of Houndwood
My Lords, there is much that has been excellent in the rich tapestry of speeches which we have already heard, but I am tempted to say, “And now for something completely different”, which I hope is not too Pythonesque.
I wish to talk about greed. I will not be surprised if this produces a frisson of embarrassment. It is perhaps to be expected that a right reverend Prelate should use this word from time to time, because that is partly what they are for. It is perhaps not unexpected if an ex-trade union official does likewise, because in the days before sharp suits replaced cloth caps talking about greed was fairly regular practice. It is perhaps not unexpected if a “leftie” academic does this, for, after all, we do not pay them particularly well and they probably have not got over being a student at the LSE in the 1970s. And so on we could go, but it is still unsettling to hear the word in polite company. It is a bit like using the word “fornication” at a Mothers’ Union meeting, or confessing to preferring football in the directors’ box at Twickenham. However, I have to tell your Lordships that the world has changed. The Prime Minister has been reported in the press using the word, as has the Chancellor of the Exchequer. It has appeared in a Times leader and even in a report in the Financial Times. So, thus encouraged, I continue.
Perhaps I may offer you two different interpretations of the word. The first is from Gordon Gekko in the film “Wall Street”. “Greed”, he said, “is good”. There is a remarkable scene in the film where he persuades unwitting customers to buy useless products. Contrast that with David Hume, who wrote in his Treatise that greed—he used the 18th-century term “avidity”—is the most destructive of all the vices. That is strong stuff.
Which of these is right? And what does it have to do with the gracious Speech? The first clause in the speech states that,
“my Government’s legislative programme will continue to focus on building a stronger economy”.
The second sentence reads:
“It will also work to promote a fairer society that rewards people who work hard”.
These themes are reiterated and re-emphasised:
“My Government is committed to a fairer society where aspiration and responsibility are rewarded”.
These themes, of the economy and fairness and justice, are tied together in the Queen’s Speech. It is difficult to talk about things such as greed in the various debates on the Queen’s Speech—there is no particular section that deals with it, so I am taking today.
Two questions arise. The first is whether Gordon Gekko was right about the driving force of capitalism—if he was, it is a very serious matter, and it is claimed by some that that is the case—or whether David Hume was right and has given us fair warning.
The second question is: what is the relationship between a stronger economy and fairness? That relationship is posed in the gracious Speech. I am with Hume in the voting lobby on both these questions. Hume’s case is pretty straightforward. He argued that one of the two major responsibilities of the state was to enshrine in law the rules concerning property—who owns what, what are the grounds of legitimacy of ownership and what are the rules governing the transfer of property and wealth, because societies, until well into west European history, used other means of transferring property and other means of claiming legitimacy of ownership. This covers much of what is important to all the members of our society. It covers ownership of property, payment of wages and salaries, payment of taxes in life and death, inheritance and financial gain or loss.
Hume argues that in a society where everyone understands these rules and sees them enshrined in law, we find them broadly acceptable. In such a society, there will be stability, continuity and sustainability, which are essential in many ways—not least in “building a stronger economy”, because without these civic virtues enshrined in our society the strength of the economy will begin to fray. It would also help in “strengthening Britain’s economic competitiveness”—another phrase from the gracious Speech.
However, connoisseur as David Hume was of the ways of men and women and the contortions of civil society, he saw that the needs of society went beyond the simple definition, simple acquiescence and enforcement of law. A just society goes beyond simple acquiescence in words of the law; it goes beyond the capacity of the state simply to enforce the requirements of the law. A just society requires the acceptance of a shared concept of fairness within that society.
Acquiescence in the law is fine, and indeed necessary up to a point, but it is not a sufficient condition of health in a society, whether economic health or civic health. If one’s sole criterion of acceptable behaviour, commercial and financial, is whether that behaviour is in accord with the law, Gordon Gekko becomes the relevant guru—“Greed is good”, if you can get away with it. If the definitions of law are inadequate or, even more, the enforcement of law is weak, then “grab all you can” is the order of the day. Forget flaccid words such as “fairness” and “justice” even if they feature in the gracious Speech. Tax evasion is, after all, not the same as tax avoidance, especially if you are an international company with international tax arrangements. Tax avoidance is okay, provided your overseas bank account is sufficiently shielded from the gaze of HMRC.
Greed in those circumstances, Gekko would claim, is actually good—it is good policy; it is the right technique to use. After all, as both Amazon and Starbucks argue in these circumstances, it provides jobs and satisfies customers. There is some good in it. “Well, what is wrong,” some would ask, “with the going rate of £4 million as an average perhaps annual bonus in certain areas of the financial services? Four million pounds is not big by comparison with some of the bonuses paid, but it is the equivalent of 40 years’ earnings for a university professor, a junior consultant and all sorts of people who are considered reasonably comfortable. There is something odd; there is a distortion that we have drifted into when that kind of figure—and that is at the lower end of the scale—is seen as acceptable.
“All very well”, you might say. “You’re wearing your conscience on your sleeve. What is to be done about it? It is not so easy to deal with”. I have to declare an interest here, lest your Lordships get the wrong impression: I am actually a capitalist. I chair an SME that employs 130 people, most of whom are software engineers, in the town of Halifax. It makes a major contribution to the employment of talented young people. We have a strong overseas sales portfolio; we know what this is about; but just conforming to the letter of the law is not enough—the company is called Frog, by the way, if you want to check it out.
What do we do about it? That is hard. It is not easy to change a culture, but that is what is required. There has to be a change in culture. This is not the politics of envy; I am reasonably comfortable, as many Members of this House are, but it has to do with the way in which we see the future of our society.
Hume has two suggestions for us to turn our minds to. He says that the capacity to be a mature moral agent with mature moral opinions has two sources in society. One is the family and the other is education. In the family, the two year-old learns that it is not just, “Me, me, me; mine, mine, mine”. That begins in the family. In education, virtue has to be learnt, it has to be taught, it is part of how we see the future development of young people, but that is a story for another evening.
Lord Sheikh
My Lords, I am very pleased to speak in this debate. Last week’s gracious Speech was rightfully centred above all else on the economy. It was a reminder to us all that although we have made some progress, there is still much to be done and our Government are committed to staying the course and maintaining our disciplined approach of austerity. Even more than that, it was about managing our economy in a way that is fairer for people and rewards those who work hard.
As a businessman myself, I was particularly heartened to see that central theme running through the very heart of our plans for the next 12 months. I am sure that everyone will agree that the way to strengthen our economic competitiveness is by growing our economy back to the health that it once enjoyed. That will be achieved only through more companies doing more business and offering more job opportunities.
I believe that the twin engines behind achieving that will be those of increasing our level of international trade and attracting higher inward investment from overseas. Last week, the Prime Minister spoke passionately to financial leaders at the global investment conference, when he rightly said that we face a sink or swim moment in the global economic race. Indeed, two of several key points that the Prime Minister outlined were focusing on trade deals and ensuring that the UK remains as internationally connected as possible.
Encouraging figures were also released last week which showed that our successful management of the 2012 Olympic Games brought the UK an extra £2.5 billion of direct foreign investment, increasing our productivity and, ultimately, our competitiveness. It created 58,000 new jobs, and 105,000 jobs were safeguarded as a result, firmly retaining our position as the leading destination for foreign investment in Europe. UK Trade and Investment was involved in helping to deliver the majority of those projects and should be applauded for its efforts.
Our focus must now turn to maintaining the momentum. We need to prove to the rest of the world why the UK remains an ideal place to do business. Specifically in terms of trade, I believe that we must begin to look much more seriously at developing our trade relationships in Africa. We have historic ties with some African countries and we can build on those connections further. Strong growth over the past decade has already helped to reduce poverty, and the International Monetary Fund recently forecast that sub-Saharan Africa will grow by 6% over the next four years. In fact, Ghana, Mozambique, the Congo, Liberia and six other African economies are expected to grow by 7% or more this year. To put that into perspective, the only other emerging economies in that 7% growth club are China, India and Vietnam.
It is therefore a very good time for British companies to get more involved with and invest in Africa. We must capitalise on that rapidly expanding economy simultaneously to grow British business and to help to drive further development and job creation across the African continent.
Here at home, as specifically mentioned in the Queen’s Speech, we must also continue to grow our private sector. Well over 1 million new jobs have been created since 2010, which has played a key role in the reduction of our deficit by one-third. I am very confident in our Government’s commitment to increase that further by a number of encouraging policies.
The £2,000 allowance on national insurance contributions has been welcomed with open arms by businesses across the board. It will particularly help those smaller firms which currently find that a substantial financial burden and means that one-third of all employers will not have to make any further national insurance payments. Research has shown that employers favour that measure, and it will be a business-boosting initiative. The Federation of Small Businesses has even stated that it went beyond what it was asking for.
The continued cutting of corporation tax is also helping private businesses to keep more of their cash to invest in expansions and employ more people, while promoting the UK as an attractive place for overseas companies to set up businesses here. Our Government have also promised to reduce the burden of excessive regulation on business. Again, that will make a considerable difference to small and medium-sized businesses, which find themselves bogged down with health and safety laws and restrictive red tape.
If there was ever a time to do away with the over-bureaucratic legislation that holds some businesses back, it is now. In particular, I look forward to seeing progress on the scaling back of consultations, audits and judicial reviews, as well as the elimination of equality impact assessments.
The latest figures show that we now have 4.8 million companies; 75% of them are sole traders; and 96% of all firms in the United Kingdom employ fewer than 10 people. It is therefore safe to say that small businesses will continue to drive us out of the economic downturn. The SMEs should, however, utilise digital technology as much as possible. That will be essential for their survival and growth.
I have always supported SMEs in my business life. In that regard, I declare the interest that I am chairman and chief executive of an insurance organisation which helps smaller organisations to place the insurance covers. I add that I was previously the chairman and chief executive of an organisation which had connections with more than 1,000 smaller insurance organisations.
In addition to cutting and reforming where necessary, it is also the job of government to invest in infrastructure to help to nurture growth and provide extra jobs. I was glad to see that explicitly referenced in the gracious Speech, with a specific focus on the development of the High Speed 2 railway line. I appreciate some of the controversy that inevitably comes with such a large-scale project, particularly on the acquisition of land, but the long-term benefits that it will provide to businesses across the country cannot be underestimated. It also takes a significant step in addressing two economic policies that I feel most strongly about—that of rebalancing our economy towards a manufacturing sector, which made our country so great; and promoting the redistribution of growth to many of our cities and regions nationwide.
Through such turbulent times, I believe that it is crucial that the Government are seen to be acting not just in the interests of economic health per se but in a way that also promotes economic fairness. That was another key pillar of the Queen’s Speech and one that goes hand-in-hand with our disciplinary approach to finances. It is heartening for me to see a government pledge on,
“building an economy where people who work hard are properly rewarded”.
I have always believed strongly in the notion of individual responsibility and reaping rewards from one’s own commitment and perseverance, and have spoken to that effect in your Lordships’ House in my support for reform of the benefit system.
Let us make no mistake: this Government’s welfare reforms are about making sure that the right people are helped back in to work while allowing for increased levels of support to those genuinely in need. Simplifying and rebalancing the ways in which benefits are considered and awarded can be seen only as progressive, particularly in the current climate.
I also welcome the inclusion of a Bill to help businesses protect their intellectual property. I have already declared my interest in the insurance business. I add that I have arranged insurance schemes for the protection of patents and copyrights. I therefore fully appreciate the value of a Bill to protect the intellectual property rights of businesses across the country. This is essential if we are to be seen as a centre for innovative ideas and products.
Before concluding, I wanted to mention my appreciation for the inclusion in the Queen’s Speech of the Government’s focus on preventing sexual violence in conflict worldwide. I have spoken on this subject both in your Lordships’ House and at several meetings elsewhere, and I am very grateful to the Government for placing a focus on it. The victims of these heinous crimes deserve justice, and it is up to countries like ours to provide the support that they need and to take effective action to deal with this dreadful problem. I have made clear my appreciation of the Government’s £1 million funding to the Office of the UN Secretary-General’s Special Representative on this matter, and I look forward to further progress in this regard.
Baroness Turner of Camden
My Lords, I have decided to speak in this debate because I feel that many of the problems that we all face stem from the policies on the economy. We all know what the problems are—unemployment, declining living standards, public sector cuts and general feelings of dissatisfaction that became manifest during the recent elections. It is now generally accepted that we need growth and that the economy needs to be rebalanced. The lack of balance is obvious in the growth of the south-east compared with the decline in the Midlands and the north. Areas where once mining, steel and shipbuilding provided often highly skilled employment to the local population are instead now areas of high and continuous unemployment.
My own union, Unite, has frequently drawn attention to the need for government policies to do more to support manufacturing industries. It says that while Britain remains an engineering powerhouse, it is suffering from a crumbling infrastructure, a growing skills shortage and years of neglect from successive Governments, particularly that of the Thatcher Administration. There is concern that manufacturing is not now showing the growth that is required. Unite believes that this is because of subdued domestic demand, particularly in the construction industry. The cutbacks in public expenditure have also had an impact on manufacturing.
The union calls for an active industrial strategy to be developed, similar to that already existing in Germany. There is now apparently an increased interest in the German strategy, with the New Statesman devoting its recent issue to the subject, while today we have had well informed contributions on the same subject from the noble Lord, Lord Tugendhat, and my noble friend Lord Monks.
Unite also draws attention to the relative success of the automotive industry in the UK, where the Automotive Council, which involves the union, works extensively to promote the industry. It also believes that there should be a strategic investment bank. The Government have of course committed themselves to the establishment of a Green Bank, but a strategic investment bank could provide access to funding for innovative companies, including small businesses. The contribution that unions make to the training of their members is often overlooked. The TUC has always had a skills training programme called Unionlearn, and refers to this in its current statement on the economic situation.
During the previous Session of Parliament we considered two pieces of legislation that one might have thought would have addressed some of these problems: the Growth and Infrastructure Bill and the Enterprise and Regulatory Reform Bill. Both have now been accepted by both Houses, but both contained provisions weakening employment rights, making it more complicated and costly to sue for unfair dismissal, changing legal requirements relative to accidents and illnesses through work and making it more difficult for workers to obtain compensation. Then there was the peculiar provision whereby workers surrender employment rights, fought for by previous generations, in return for shares. I and a number of noble Lords opposed those provisions—unfortunately, without success. The Government appear to believe that a system in which workers are regarded as disposable—hired when needed and sacked without rights when no longer required—will improve the economic situation. I think that they are wrong. The support of the workforce is necessary if companies are to succeed. Will Hutton, the director of the Work Foundation, put it very well when he said that,
“it is only through workforce engagement and commitment that successful innovation can be achieved. Care must be taken to ensure that procedures and processes embody fairness—in performance management, in promotion, in setting bonus targets, and in resolving disputes. In this respect trade unions can be important custodians of good faith processes, and as communication routes that uphold the authenticity and integrity of management actions”.
Of course, trade unions insist on good pay and conditions. One of the problems about the private sector, where union organisation is low, is that the pay is too low as well. The benefits system is actually subsidising employers who pay low wages. That has an effect on the housing market too, where housing benefit has to be provided to ensure that families are not rendered homeless. We have discussed these issues in the House in the past, when I and other noble Lords have said that rents are too high and pay is too low. The TUC is calling for the introduction of the living wage, in the hope that this will lift families out of poverty.
These are all important aspects of the economic situation that we have been experiencing. The austerity measures that have been introduced and are continuing have not helped—indeed, quite the contrary. A determined effort by the Government is needed to introduce measures to stimulate the economy, particularly by assisting the financing of innovative companies in manufacturing and other industries that can contribute to growth.
The measures already taken in regard to apprenticeship training are welcome. These are necessary in light of the unacceptable level of youth unemployment. However, we probably need to go much further, particularly for vulnerable and poorer disadvantaged children. The role of unions in developing such schemes should not be underestimated.
We need to rebalance the economy. We cannot rely on financial services, important as they are, to produce the growth we need. The Government should reconsider their current policies. They need to change direction.
Lord Shipley
My Lords, I declare my interest as a vice-president of the Local Government Association. I welcome the comments of my noble friend the Minister, reflecting his and the Government’s support for faster growth by devolving greater financial powers to local government and local enterprise partnerships, particularly from 2015 with the proposals for the single pot. They are hugely welcome.
In the gracious Speech itself, I welcome in particular the proposals on national insurance, which will cut NI for small businesses through the £2,000 employment allowance, thus generating new jobs. I welcome High Speed 2, which will increase passenger capacity, freight capacity and speed in linking the north of England, Scotland and the Midlands together and linking them in turn with London and the south. Better connectivity will drive faster growth.
I welcome the Energy Bill, or its continuation, which will create green jobs and growth, with up to 250,000 jobs in the private sector following an estimated £110 billion of investment. However, in terms of energy, that growth needs to be achieved without ever-spiralling costs to consumers. Today it is reported that almost one-third of UK households say that the cost of gas, electricity and water has become their biggest worry, and the Government will need to pay very close attention to that trend.
I thank my noble friend Lord Bradshaw for his comments on the A1 in Northumberland and the need for it to be dualled throughout its length. On grounds of safety, volume of traffic and access to east coast ports, particularly from Scotland, and to grow the local and regional economy of the north-east, the case is unanswerable, and I hope progress will be made soon. I thank my noble friend Lady Kramer for her constructive and timely suggestions around regional banking, which could be a major catalyst in driving regional growth.
I shall refer to three strategic issues relevant to the gracious Speech that could help the Treasury: first, reducing public spending where it is higher than it need be by investing more in prevention; secondly, reducing overhead costs caused by duplication in public service provision; and thirdly investing further in social rented housing.
In terms of prevention, I am very disappointed that no Bill is yet proposed on the minimum pricing of alcohol. Recent research from Canada has shown that a 10% increase in average minimum price would result in a 9% reduction in hospital admissions and a 32% reduction in wholly alcohol-caused deaths. The costs to the NHS, the police and local councils in dealing with the consequences of alcohol abuse and excess are substantial. It is in the interests of the public purse that minimum pricing is introduced. The same is true of smoking, where good work has been done to reduce it. Reducing it further through plain packaging would save the NHS yet more.
As a third example of how investing in prevention can help to cut costs, I shall mention concessionary fares for pensioners. I declare that I am a holder of a concessionary bus pass. I raise this in the context of the forthcoming Care Bill and proposals for the support of children. There has been some discussion recently about the justification for such passes, but too often it is considered only in terms of its immediate cost. Concessionary bus fares should be seen as part of the support system for carers. They enable older people to travel to give help to families and friends. Demands on the public purse for care could rise without the availability of those bus passes. In addition, without the income from bus passes to bus companies, many bus routes could close down or else would require higher public subsidies to keep them running, which would be of no help to those trying to get to and from work. There are no plans, of course, to change the policy on concessionary passes, but could we look again at levels of reimbursement to local authorities and make them reflect actual usage of buses rather than simply a population split? As a national scheme with national funding, the distribution of the budget needs to reflect the higher costs in those areas with lower car ownership, more bus routes and hence more passengers.
Next I shall speak about the potential for reducing public spending through reducing the overhead costs of public sector organisations that we now know can be achieved through whole community budgeting. There have been whole place pilots in Greater Manchester, west Cheshire, Essex and the London boroughs of Hammersmith and Fulham, Westminster, and Kensington and Chelsea. This latter tri-borough community budget pilot concluded that it could within five years deliver savings of approximately £80 million per annum across all public services through initiatives to drive growth, build homes, create jobs, reduce dependency and rehabilitate offenders. That report was published in October last year. Essex has estimated £127 million cashable savings. West Cheshire and Greater Manchester also forecast substantial savings. The evidence from the Local Government Association is that savings of between £2 billion and £5 billion a year across England can be generated, depending on implementation. In the context of a forecast £16.5 billion funding gap for local government by 2019, it has become clear that some of it could be made up for by community budgeting. It has become vital that this process is progressed speedily.
I agree substantially with the noble Lord, Lord Eatwell, on housing and social rented housing in particular. It is not enough to try to stimulate new housing simply by subsidising mortgages, which is likely in any event to lead to higher prices. The priority has to be increasing the housing supply at levels of affordability, which is why relaxing the housing borrowing cap for the local government rented sector matters. More properties for social rent could reduce significantly the Government’s housing benefit bill in the more expensive private sector. Local authorities have further headroom to borrow without it being counted as public sector borrowing since their local housing accounts are now trading accounts.
There are two Bills in which I shall take a close interest. The first is the local audit Bill. A key role of the Audit Commission was to assess good practice and value for money, and I do not want to see it lost as new audit arrangements are introduced. The second is the water Bill which will reform the water industry in England and Wales. I welcome, in particular, the proposal to ensure that flood insurance remains affordable in areas of high flood risk. When we debated the Growth and Infrastructure Bill, I raised concerns that the duties on Ofwat might be insufficiently strong to drive economic growth strongly enough by guaranteeing an adequate water and sewerage system deliverable to all premises. The Minister indicated then that my amendment was probably unnecessary, and that may indeed be so. However, there might be an opportunity during the passage of the water Bill to make Ofwat’s obligations even more explicit, and I hope we can look at this further.
Finally, making the economy stronger is central to this gracious Speech. The role of our universities will be central to that process. Universities working with their regions and with regional banks will help to underpin the work of LEPs and local authorities. But in repairing our economy, can we put youth unemployment at the top of list of priorities? The Government have done good work with apprenticeships, but the current scale of youth unemployment is deeply worrying. All proposals for investing in growth, of which there are many, should be tested for the number of long-term jobs that they can generate for young people because we cannot permit a lost generation, as seems to be happening in some other parts of Europe.
Lord Berkeley
I welcome two parts of the Queen’s speech. The first is:
“My Government will continue to invest in infrastructure to deliver jobs and growth for the economy”.
The second is:
“My Government will continue with legislation to update energy infrastructure and to improve the water industry”.
I shall speak to these two issues with two examples, one large and one small.
The large one is the Thames tunnel, the £4.3 billion tunnel to remove the inflow of sewage-flavoured rainwater into the Thames when it floods. I believe that it is the wrong project, that the wrong company is doing it and, equally bad, that the regulator does not appear to be regulating. That is to the detriment of customers and the environment. There is no point in the Government investing in infrastructure if the private sector can or should do it or if there is a cheaper or better alternative, especially if that will create more and local jobs, as I believe this one will.
The tunnel has been discussed for many years and Thames Water is now starting the process of obtaining planning permissions. However, in the past five years, there has been increasing evidence from around the world that the scheme is out of date. The best example is probably in Pittsburgh in the US, where it has been demonstrated that preventing the volume of storm water entering the sewage system in the first place is a much more effective solution. It is easier to achieve, there is much less risk than building a big tunnel, it will use lower-skilled and therefore local labour and it will start the clean-up of the river much sooner, which could mitigate the effects of the potential fine from the European Commission of up to about £1 billion because the Government have failed to clean up the Thames. The problem is that neither the Government nor Thames Water have examined this new option properly. I wrote to Ministers about a month ago, asking them to set up an independent inquiry to look at the alternatives; I have not had an answer yet.
Another reason for such an inquiry is Thames Water itself and whether it is a fit and proper company to undertake such a project, especially when it has reduced its asset base over the years to the extent that it says that it cannot fund the tunnel—it needs government help, which the Government have kindly given it through legislation last year—but still suggests that this project will add £80 to the bills of every Thames Water drainage customer for the next 125 years. Thames Water customers go well past Reading to Oxford and places such as that—that is a lot of customers.
Since the Minister said in his opening remarks that the Government intend to tackle all forms of tax avoidance, and the Treasury indicated a few weeks ago that the Government intend to stop companies bidding for major contracts if they have used aggressive tax structures in recent years, perhaps this particular company and project should be looked at. Other examples include Wales & West Utilities, which was recently sold to Cheung Kong Infrastructure Holdings, where the shareholder equity was largely represented by a shareholder loan at 15% to 21%—not bad for a boring utility—and Arqiva, where the equity is represented by shareholder loans at 13% and no corporation tax has been paid from 2007 to 2011. It is difficult to find much information about Thames Water. One thinks that Macquarie Bank is involved, but it is almost certain that it has followed the same route, which is the kind of route that many of these utilities have followed.
It is surprising that the regulator, Ofwat, has not investigated whether Thames Water complies with condition P of its licence, which is that Ofwat has to,
“be satisfied, in each particular case, that the prospective owner has the probity and the operational and financial capacity to assume that role”.
The CEO of Thames Water, Mr Baggs, said in a letter of 8 March that shareholders should not be required to pay for enhancements of the network. That seems to contravene the duties of the regulator to,
“secure that the functions of each undertaker”—
in this case Thames Water—
“are properly carried out and that they are able to finance their functions”.
It appears that the Government are already asleep in failing to apply their Treasury ruling that those companies applying aggressive financial structures should not be involved in constructing government-funded infrastructure projects. Ofwat is also in a long-term sleep, failing not only to apply the probity test on Thames Water but to ensure that the company has the financial resources and capability to pay for enhancements.
The noble Lord, Lord Shipley, mentioned these water issues. I have not read the proposed water industry Bill that was mentioned in the gracious Speech. I certainly hope that it will put right some of the wrongs that I have outlined. In the mean time, I ask the Minister whether the Government will agree to an independent inquiry into this Thames tunnel project before any more taxpayers’ money is wasted.
My second issue is much smaller and a long way away: the Isles of Scilly transport. It should fit in with this statement in the Queen’s Speech:
“My Government will continue to invest in infrastructure to deliver jobs and growth for the economy”.
This is where it is needed. It is a small project in an outlying part of the UK, which is just as deserving of better infrastructure and services. If the island community of 2,000 is to survive, its economy, now based largely on tourism, needs to be maintained and to prosper. At present, the decline in visitor numbers is more rapid than that in mainland Cornwall, which can only be due to the high cost of travel there. Islanders need a year-round service, tourists in the summer need a range of services and all need to receive these at affordable prices.
Noble Lords will know that the helicopter service stopped on 1 November last year, probably for good. There remains a fixed-wing air service of eight-seater or 19-seater planes, which operate all year round but are frequently delayed or cancelled by wind, fog or waterlogged runways at Land’s End. These planes—as anybody who is an expert in them, which I am not, will tell you—are much more vulnerable to bad weather than helicopters. The “Scillonian” operates March to October and has just had a good refit for a five-year life extension. As noble Lords will know, the original build of the ferry was funded with support from Harold Wilson when he was Prime Minister. However, that was some time ago and one ought to be looking forward to a replacement.
The loss of the helicopter has brought into focus the dire service that remains. Between November and March, Land’s End was closed due to waterlogging for more than half the days. Immediately before Christmas, 177 people were queueing, unable to travel between the islands and the mainland for over three days; they finally got there on Christmas Eve. Some islanders have in desperation travelled in a RIB, a high-speed motor boat, from the Scillies across 20 or 30 miles of very rough sea, costing 12 people £1,200. That shows the desperation; it is not as if there are a lot of rich people there.
What can be done? A year ago, the Council of the Isles of Scilly produced a report comparing the transport available there to that for the Scottish islands: charges, frequencies and the lifeline service concept, which ensures an affordable service to all islands—some provided privately, some subsidised, but guaranteeing a service so that people can go for work, business, pleasure or hospital appointments at a cost that approximates to that of using an equivalent road distance. In the case of the Scillies, it would be £20 to £30 return, compared with the current fare of £84 on the ship and £160 by air. The islanders get a concession on the ship but not in the air, as the noble Earl, Lord Attlee, pointed out to me some time ago.
These are the kind of journeys that everyone else takes for granted, so there is general support for short-term measures for the airport and harbour improvements to be expedited. I ask the Minister whether the Government are planning to accept the applications from Cornwall Council and the Council of the Isles of Scilly for the ERDF-funded harbour improvements, because time is running out for some of these grants.
The affordability and reliability of a year-round service needs attention. The answer for next winter would be a trial winter sea service, which the Isles of Scilly Steamship Company is prepared to operate; it operates the air service as well. However, it will not say how much subsidy it would need, because it fears that the service will be tendered out. I have written to the Minister responsible, Norman Baker MP, asking whether the department would consider this. We have to reflect that there are very few other places, however remote and vulnerable they are to snowdrifts, floods, gales and so on, that have only one unreliable means of travel throughout the winter. It is not as if people can walk or cycle if it is difficult—it is a bit wet and you cannot do it.
I am very pleased that the new Cornwall and Isles of Scilly Local Enterprise Partnership, which the Minister also referred to, is keen to help and follow up the recommendations of the Scottish report, by offering to lead a detailed economic transport study to identify the best means of providing for the long-term needs of the islanders and visitors. Sadly, however, the Council of the Isles of Scilly has indicated that it is not interested in taking part. I find that very depressing. However, I hope that the new councils in the Isles of Scilly and Cornwall will be able to work much more closely together to further the interests of the islanders and visitors. I hope that they will start a joint campaign to persuade the Government that the Scillies need a trial winter service for next winter and to agree to a policy of developing a public service obligation with a new ship to give these islanders the long-term comfort that they need to enable their economy to grow on a firm basis. I hope that they will support the LEP in accepting its offer.
In summary, my questions for the Government are: what is the status of the application for the funding for harbour improvements that I mentioned and will the Government consider a trial subsidy for a ferry next winter? With that ferry and the air service, there would be a very good chance that at least one of them would get you to and from the mainland, when you want to go, without having to spend too many nights in hotels in Penzance.
Lord Hodgson of Astley Abbotts
My Lords, it is perhaps inevitable that all defeated Governments engage in a period of introspection during which there is a tendency to rewrite history. It appears that the previous Labour Government are no exception to this rule. The narrative that we have heard this afternoon focuses on two things: first, that the economic crash of 2008 was the result of factors entirely outside their control; and secondly, that by May 2010 their actions were bringing economic recovery. I am afraid that neither of these assertions withstands close examination. It is true, and absolutely fair, that the trigger for the economic cataclysm of 2008 was the collapse of the sub-prime mortgage market in the United States. However, the economic policies of the Labour Government left this country uniquely ill prepared to withstand the consequent shocks. Profligate government spending without any associated requirements for economic performance, linked to low interest rates, which inflated asset prices—particularly house prices—were policies that could have only one ending, and it was not the promised ending of “boom and bust”.
Tullett Prebon, the money broker, has produced an interesting study of debt levels. Between 1997 and 2010, in constant prices, public debt increased by 250%, and private debt by 275%. Such levels of indebtedness, with their associated asset price inflation, will inevitably take a long time to unwind, and it will be a painful process. It does not seem wise for the Opposition now to propose, as I understand they do, that the Government should go out and borrow more money. I was therefore reassured by the commitment in the gracious Speech that the Government will stick to their broad strategic economic approach. In my commercial life outside the House I see some good signs of a pick-up in economic activity generally.
However, one area that continues to concern me is the persistence of, and perhaps increase in, regional disparities, a matter which the right reverend Prelate the Bishop of Birmingham referred to earlier. It is hard to find many signs of recession in London and, to a greater or lesser extent, in the south-east. However, in the review of the Charities Act which I carried out for the Government I travelled and met representatives from the voluntary sector all over England and Wales, and the economic outlook, as well as the level of social capital, were all too often not encouraging. My noble friend Lord Heseltine made some interesting suggestions about how to narrow these gaps in his report No Stone Unturned: In Pursuit of Growth, and I was very glad to hear in my noble friend’s opening remarks that the implementation of these proposals is now under way.
For the rest of my remarks I wish to go off on a riff of my own. It is not an issue which was raised in the Queen’s Speech, but it is an important issue, and one which particularly concerns the Treasury and local government—namely the implications of population growth in the world and in this country. This is a sensitive issue that is easily capable of being hijacked, so I make it clear that my remarks are not about immigration under another name; they are not about relative population sizes and whether there are more white people or black people; they are not about the relative sizes of faiths and whether there are more Christians, Jews or Muslims; they are not about the relative sizes of social classes and whether there are more rich or poor people; and, finally and most importantly, they are not about preaching or personal example, because I need to put on record that I have four children. My remarks are about the staggering absolute increase in the population of the world and in that of the UK.
It is worth while every Member of your Lordships’ House bearing in mind that each morning when he or she looks in the shaving mirror or the make-up mirror, there are 200,000 more people in the world than there were when that exercise was undertaken 24 hours earlier. We are creating a city the size of Wolverhampton every day, 365 days a year: 70 million people a year. According to UN population projections, this will continue, albeit at a slightly slower rate of 40 million people a year by 2050: 120,000 people a day. By then the world population will have increased by one-third, from 7 billion to 9.2 billion.
It needs no great imagination to see the stresses and strains that the arrival of an additional 2 billion people will likely cause on land, resources and, above all, water. We would be foolish to believe that the issue will not touch us in this country. Desperate people do desperate things. We may be sitting here tonight feeling slightly sorry for ourselves because of our economic fortunes, but if you are sitting impoverished in a huge family in a war-torn, unstable country, the United Kingdom looks like nirvana. Somehow, however unpleasant, dangerous and difficult the road may be, people are going to get here.
What can be done? All research suggests that the best way to reduce population growth is to give women control over their fertility. A woman’s quality of life is not enhanced by repeated pregnancies. It is believed that there are more than 200 million women in the world with no access to family planning. The Government’s overseas aid programme rightly places a high focus on providing family planning and advice. We all know that economic times are hard. I hear voices suggesting that cuts should be made to our overseas aid budget. Of course we must be careful to ensure that our overseas aid is properly spent, but I urge my noble friend, wearing his Treasury hat, to resist any cut in that part of the aid that is devoted to family planning. It is in all our interests that it should be continued.
Finally, I turn to the no less challenging position of the United Kingdom. Our population is now just over 63 million. The Office for National Statistics’ mid-range projections suggest that the UK’s population will reach 70 million by 2027, 15 years from now. What do 7 million people look like? The city of Manchester has 500,000 people: think 14 Manchesters. The larger Manchester conurbation, including Bolton, Bury, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford and Wigan has a population of just over 2 million, so we will have to build three Greater Manchesters by 2027.
There is a further complication. Not only is England the sixth most densely populated country in the world, after Bangladesh, Taiwan, South Korea, Lebanon and Rwanda, but the population is not spread evenly across the country. The bulk of the population increase will surely take place in the south-east, where we will probably have to build two of the three Greater Manchesters. It will certainly be a challenge for future government planning Ministers to explain all this, not least to those who live in the shires and the leafy suburbs.
What can be done? “Stop immigration” is a popular cry. That would make some difference, but perhaps not as much as people think. The Migration Observatory at Oxford University has pointed out that with 100,000 migrants per annum—the Government’s target—the population would reach 70 million by 2035. With zero migration the figure would be 66 million, a difference of 4 million. On the other hand, there are those who say that unless we have more young people, we cannot afford to look after our existing old people. They appear to have forgotten the implications of compound interest. We would be engaging in what Sir David Attenborough calls a gigantic population Ponzi scheme. We have to recognise that at some point we will have to achieve a stable, balanced population in this country. There will be considerable strains during the transition phase, but at some point, someone, somewhere has to be brave enough to state this fact and withstand the misinterpretation, misconstruction, misreporting and misquotation that will surely follow.
Finally, it is worthwhile reflecting on how much more serious this problem is for the UK, and especially for England, than it is for our continental European neighbours. At present, with a population of 63 million, England has a population density of 383 people per square kilometre. We have just overtaken the Netherlands and we are now more densely populated than that country. By contrast, France has 102 people—about 25% of our density—and Germany 226, which is about two-thirds. No less importantly, both those countries and Italy have falling populations. Germany’s population today is 83 million compared to our 63 million but, on present trends, it will fall to between 70 million and 74 million by mid-century. Sometime in the 2030s, the UK’s population will overtake Germany’s, and we will become the most populous country in Europe.
None of this is to say that we cannot fit the people in. I have referred to our present population density of 383 people per square kilometre. Bangladesh has about 1,400 people per square kilometre, so we can certainly fit the people in—but at what cost to the quality of life? Sir John Sulston, who recently chaired an inquiry by the Royal Society on people and the planet, said that our target should not be to cram as many people as possible on to the planet. He went on to say:
“We have to look at what will allow humankind to flourish. We want to aim for a high quality of life and not just to scrape along”.
I conclude by addressing why I am raising this topic particularly today, as some noble Lords may be wondering. The answer is that the issue concerns every government department but is the responsibility of none. No doubt, my noble friend on the Front Bench is thinking that this is at least one speech to which she does not have to reply when she comes to stand up—that she can pass gracefully on. That lacuna is part of the problem. No one anywhere in government has responsibility for looking at this problem, looking at the big picture and the long-term trends, and explaining the implications for us all. A Minister with responsibility for considering the issue and drawing the attention of the public to what lies ahead would be a good first step.
Dean Acheson, the US Secretary of State, once said that policies did not trickle down but welled up. This is an issue that is rapidly going to well up.
Viscount Hanworth
My Lords, I concur with much of what the previous speaker said in the second part of his speech and nothing of what he said in his first part.
On Wednesday 10 April, the House of Lords met to pay tribute to Baroness Thatcher. Most of the tributes were the anecdotes of those who had participated in Thatcher’s Governments, and we should not begrudge them the opportunity to reminisce. However, some of the tributes expounded the methodology of the Conservative Party as it relates to those years. Perhaps now is the time to call into question some of the things that were said on that day.
It was said that Margaret Thatcher had helped to pick Britain up off its knees, changed our place in the world, and made Britain great again. It was asserted that her programme of deregulation and denationalisation, and of defeating the trades unions, had made Britain again into a global economic competitor. Finally, it was said that Margaret Thatcher transformed the very nature of our political debate. In common with most of my colleagues on these Benches, I disagree with all of this, save, perhaps, the assertion that Mrs Thatcher transformed the nature of our political debate. For this, I believe that she and her acolytes deserve discredit.
Under Margaret Thatcher, political warfare reached a level of intensity that had not been seen for several generations. It was in this respect that she transformed the nature of our political debate. Her unbridled aggression toward her political opponents eventually led to her downfall. By exalting the motives of personal economic gain at the expense of the principle of social cohesion, Mrs Thatcher subverted the growing egalitarianism of British society. At the same time, she protected and reinforced the traditional privileges of the wealthy classes. These persons, and the party that she served, expressed their gratitude by adopting her own social and economic philosophies. The economic philosophy in question was a resurrected version of the moral philosophy of the commercial classes of the 18th century that is associated with the name of the Scottish economist Adam Smith. Smith’s nostrums are manifestly unsuited to the modern world, and their adoption by politicians has done untold damage to Britain’s economy. How has this damage arisen? It has been multifarious, but I should like to focus on two areas. The first area concerns the Conservatives’ flagship policy for the denationalisation of Britain’s strategic industries and utilities. The second area concerns financial deregulation.
One of the major Acts of privatisation, of which we will be facing the consequences in this Session of Parliament, concerned the electricity supply industry. This was enacted in 1990, at the end of Thatcher’s period as Prime Minister. She must have regarded it as her crowning achievement. The national electricity grid was one of the great technical achievements of the interwar period. Its origins date back to the Electricity (Supply) Act 1926, which created the Central Electricity Generating Board—CEGB—that set up the UK’s first synchronised, nationwide AC network. The grid provided a prototype and an inspiration for electricity networks throughout the world.
Our national electricity industry was serviced by some world-famous British engineering companies, which it also sustained. Foremost of these was BTH (British Thomson-Houston), later incarnated as AEI (Associated Electrical Industries) and as GEC (General Electric Company). This company provided generators, transformers, switchgear and turbines. Over the years, it absorbed several companies of foreign origin, including Siemens Brothers and Company, which was an offshoot of the German company. Another famous company which was sustained by orders from the CEGB was C A Parsons and Company, famous for the invention of the steam turbine.
The ultimate effect of the denationalisation of the electricity industry was to place it in foreign hands. Powergen now bears the name of its owner, the German utility company E.ON. National Power split into a UK business, which is now owned by the German utility company RWE, and an international business, which is now fully owned by the French company GDF Suez. Britain’s nuclear power stations are now in the hands of EDF Energy, which has 5.7 million customer accounts in the UK. EDF is wholly owned by the French state.
Another effect of the denationalisation, which began immediately, was the crippling of the companies that had served the industry. This was the consequence of the so-called dash for gas, whereby the newly privatised electricity-generating companies, many of which were on a small scale, opted for combined cycle gas turbine generators. The British engineering companies, which had been crippled by the loss of their primary market, were unable to compete. The outcome has been that virtually all the modern equipment in our power stations is of foreign origin. The major suppliers of this equipment are the Japanese companies Toshiba and Mitsubishi, the American company Raytheon, the French company Alstom, which absorbed a large part of GEC on the eve of the privatisation, and the German company Siemens. The strength of these various companies derives from the fact that they are sustained by the electricity-generating utilities of their native countries, which, for the most part, are nationally owned industries. The failure of our national Governments to support our strategic industries in the way that has been common in the countries that are our competitors is both remarkable and hard to explain. However, part of the explanation lies in the insouciant free-market and laissez faire ideology that was espoused by the Conservatives during Thatcher’s Administrations and that continues to dominate the policies of the present Government. We have seen its devastating effect on several occasions recently.
The story of our electricity network has been paralleled by the story of our rail network. A recent episode concerned the proposal to award the contract for supplying Thameslink rolling stock to the German company Siemens in preference to Bombardier, which is a Canadian-owned enterprise that runs the last remaining manufacturer of rolling stock in Britain. Siemens is also the company that has provided most of the equipment for our wind-powered electricity-generating facilities.
Another respect in which the policies of Margaret Thatcher have done great damage to the British economy has been in the promotion of the interests of the City of London via the programme of deregulation which began in 1986 during the time of Thatcher’s second Administration. Here, there is a sharp division of opinion between the Conservatives and us on these Benches. A week ago, a senior Conservative politician proposed that we should leave the European Union for the reason that the Parliament in Brussels seems to be intent on placing restraints on the activities of the City. He pointed to the success of the City and its importance to all of us through the fact that it accounts for a large proportion of the British national economic product. Far from being an asset that benefits the nation as a whole, the City serves the interests of a very restricted class of people at the expense of the rest. The very size of the City is a symptom of the morbid hypertrophy of an organ of the economy that threatens the health of the body as a whole. Until recently, the City has been responsible for sustaining an overvalued rate of exchange that has made it difficult and sometimes impossible for our industries to export their products. The City has been largely responsible for the way in which our industries have fallen into the hands of foreign owners. It also bears responsibility for one of the longest periods of economic recession on record, which we are currently undergoing. The detrimental effects of the City have been monstrous.
Viscount Waverley
My Lords, the gracious Speech emphasised the focus on building a stronger economy and that the first priority is to strengthen Britain’s economic competitiveness; this following recent remarks calling for greater productivity in the United Kingdom by, among others, the noble Lord, Lord Heseltine, who is not in his place.
There is, however, a substantial success story by UK companies in the oil and gas supply chain. According to trade information, exports related to that sector have grown for the 14th year in a row and are now worth £17.2 billion. Certainly, I can confirm in relation to activities in which I am engaged that UK supply chain-based companies have the highest number of individual companies supplying a high-priority export market—that of Kazakhstan.
However, we cannot afford to relax. Kazakhstan has been determined to be a priority export market by the United Kingdom and cannot be ignored. Leaders from other supply-chain countries are knocking on Kazakhstan’s doorstep. The German Chancellor has visited and now the French presidency has confirmed another state visit. I am in no doubt that to underpin the UK’s position requires a visit by the Prime Minister in helping to retain our position. No Prime Minister has visited Kazakhstan since independence in 1991, and yet it is where British interests, notably BG and Shell, are excelling.
I should declare that I chair the British Kazakhstan Parliamentary Group and the regional Central Asia Parliamentary Group and, for the record, have signed a co-operation agreement with opposite numbers in Astana that includes, among other initiatives, encouraging emphasis on increasing two-way investment and trade.
What can be done to consolidate our position as a lead player? Measures and mechanisms that increase co-operation agreements between those with the necessary technology to partner those in Kazakhstan, indeed in all new energy economies, is a process that stakeholders should embrace in a new world order. There is good pragmatic reason to do so, beyond economic. The importance of social and corporate responsibility on the part of investors and suppliers is paramount, and they have a moral and legal imperative to put this into practice. Foreign legislation is increasingly demanding it.
Helping to create a culture of legacy beyond investment, development and profits should be embraced as a norm that would protect the UK’s position, and for which recipient countries should encourage and reward. Employment creation creates an environment for stability. This enhances the confidence that protects the very investments necessary for the development of those national assets. The underlying challenge is to contribute to the strengthening of professional skills and the industrial base by maximising opportunities for local companies and citizens to benefit directly. This developing of indigenous capabilities, in partnership with the United Kingdom’s professionalism and experience, would become a winning formula.
In my capacity advising the national oil company, KazMunaiGas, I was given the task by the chairman, Mr Kiinov, to unify the fragmented approach towards local content development endeavours of the lead oil and gas operators, Kashagan, KPO, NCOC and Tengizchevroil, which include such partners as BG, Shell, Chevron, ExxonMobil and Total. I invited them to London to determine common ground and agree necessity in what we labelled the “London Process”, and which culminated after complex discussions in the signing of the Aktau Declaration a year later. Operators agreed a strategy and the content of a forward engagement plan with ministries, regulatory authorities and industry bodies concerned with local content development.
Delivery by stakeholders contains six key components: first, training and skills development with fast-track programmes to address critical skill shortages and longer-term skills capacity building; secondly, an industrial capacity register as a source of reference to identify current and potential capacity in the oil and gas sector and, importantly, the non-oil and gas sector; thirdly, harmonisation of standards, specification and code of practice; fourthly, enterprise development to stimulate the promotion, growth and new development of local companies, including access to management expertise and funding; fifthly, an inward investment programme to contribute to the commercial environment and identify opportunities to accelerate and expand domestic manufacturing and supply; and, sixthly and lastly, research and development to anchor specific technology development programmes to create new high-value business opportunities within domestic and regional markets.
The technical, commercial and socioeconomic challenges will take time, investment and commitment to develop, with huge challenges ahead. These priorities can be delivered in the United Kingdom’s national interest within existing contractual arrangements and international treaties with foresight, willingness, respect and innovation. The programme I have outlined can be developed further into a bilateral win-win.
Lord Warner
My Lords, nearly six hours into this debate I thought I would give us a change of subject. I was reliably informed by the Chief Whip’s Office that if I wanted to talk about the Care Bill and its implications for local government, I should speak today. In doing so, I declare my interests both as a member of the Commission on Funding of Care and Support, whose recommendations the Bill largely implements, and as a member of the Joint Select Committee that considered the draft Bill. However, before turning to that Bill I want to make a few observations on youth unemployment.
It is rare for me to quote approvingly remarks made by the late Lady Thatcher. However, nearly 30 years ago she said something that was true then and remains true today. She said:
“Young people ought not to be idle. It is very bad for them”.
She might have added that it is also bad for society, but that was not a word that easily passed her lips.
As the founding chair of the Youth Justice Board, set up after the 1997 election, I dealt with some of the consequences of unemployed, untrained and uneducated young men ending up in the criminal justice system. I am not going to lay all the blame on the current Government, because youth unemployment is a global problem. OECD figures suggest that 26 million 15 to 24 year-olds in developed countries are not in employment, education or training. Our performance in the UK is better than some but it is certainly not as good as it ought to be, with 1 million young people unemployed. Unless we improve the way that we tackle this problem, we will be storing up trouble not just for those young people but for ourselves.
Much current social policy is preoccupied with the demography of an ageing society. This is understandable and my noble friend Lord Filkin chaired a committee of your Lordships’ House which produced an excellent report on our lack of preparedness for the service demands of an ageing society. However, one of the social requirements of that ageing society is a well trained and educated workforce that is generating wealth—not a growing number of sullen, unemployed malcontents.
As we grapple with the needs of an ageing society through worthwhile measures such as the Care Bill, we also must ensure that we set aside sufficient resources to educate, train and employ our young people, and not waste their talents. That means striking a better balance than we have now in our priorities for public expenditure between the young and the elderly. That may be an unfashionable thing to say but, as one of the elderly, I think I am entitled to say it.
All the parties need to stop oversubsidising the well-off elderly with winter fuel allowances, free travel passes and free TV licences. I am sorry but on this I disagree with the noble Lord, Lord Shipley, who is not in his place. If tough decision-making is the political mantra of today, why not start by at least taxing those entitlements or partially withdrawing them, and removing exemption from national insurance contributions for those who work after retirement age? Will the Minister comment on those issues in her response, even if it gets her into a bit of trouble with No. 10?
Let me turn now to the Care Bill. The coalition Government are to be congratulated on grasping the nettle of both reforming social care law, as recommended by the Law Commission, and on accepting the thrust of the proposals in the Dilnot commission’s report. Here, I pay tribute to Paul Burstow and Norman Lamb for tenaciously pursuing reform despite Treasury obstacles. I do not intend today to comment on the detail of the Bill and will save those comments for the Bill’s Second Reading next week.
However, I want to comment on social care funding and the problems that it presents in implementing the Bill’s good intentions, particularly on some of the implications of that parlous state of funding for the NHS. Adult social care is now consuming more and more of local government’s budgets and is set on a course to consume virtually all of it in a couple of decades. Yet, strangely, the latest survey from the Association of Directors of Adult Social Services shows that by next April local councils will have stripped out £2.7 billion—I repeat, billion, not million—from adult social care services since 2010. That is equivalent to 20% of their budget for care at a time when demand for their services is rising considerably. Domiciliary care is being paid for at below the minimum wage by some councils and some care homes are relying on subsidies from self-funders because councils simply are not paying the true cost of providing decent care.
The transfer of £850 million to councils from the NHS this year does no more than cover the budget reductions that councils are making. One-third of the directors of ADASS consider that many people who in the past would have qualified for help will no longer get it as a result of the existing tightening of eligibility criteria. On present plans, that rises to half of directors in two years’ time when the Care Bill will be implemented. The idea that this Care Bill can be implemented without a significant increase in the service and administrative budgets for adult social care is pure fantasy. However, let me emphasise that I am not suggesting an increase in public expenditure, as I shall explain.
The Dilnot commission made clear that its proposals would do nothing to bring up to speed the existing shortfall in funding of adult social care. On the most conservative estimate I suggest that the shortfall is somewhere in excess of £1.2 billion a year. Demography is worsening these matters by about 3% a year—another half a billion pounds a year. The consequences of this social care funding crisis for the NHS are already clear to see in the overcrowded medical wards of acute hospitals. Experts acknowledge that those wards have around a quarter to a third of patients who simply should not be there. The great majority of those people are aged 80 and older. This is both bad for the patients and extremely costly for the taxpayer. The present way in which we are caring for elderly patients in some of our hospitals and care homes is simply another Mid Staffordshire waiting to happen.
What we need now is a much clearer policy across the political parties of resource transfer from the £110 billion a year NHS budget to fund adult social care properly, where the taxpayers’ money would be better spent. Can the Minister tell the House what further plans the Government have to transfer resources from the NHS to social care this year and next to make good the budget shortfall before implementation of the Care Bill starts?
We have heard a lot today about Europe. Whether we leave or stay in Europe, we will still have to tackle these and the many other domestic problems that have been identified today. Endless banging on about EU membership seems to many of us a self-indulgent political diversion from resolving some of the difficult problems in our own back yard.
Viscount Trenchard
My Lords, it is always a privilege and a pleasure to speak in the debate on the gracious Speech. I, too, pay tribute to the noble Baroness, Lady Lane-Fox of Soho, on her excellent maiden speech. Given how important IT is to all of us, it is very good to have her in your Lordships’ House and I look forward to many contributions from her. Like many noble Lords, I congratulate my noble friend Lord Lang on the entertaining and skilfully constructed speech he made in proposing the Motion for an humble Address.
In preparing for this debate today I was struck by the fact that much of the work that your Lordships’ House will undertake in this Session on business, the economy, local government and transport was not mentioned in the gracious Speech. The carrying over of Bills which have substantially completed their progress through another place has resulted in a growing disconnect between the gracious Speech and the agenda set for this House over the coming months.
On transport, the High Speed 2 Bills were announced. However, does it make sense to decide to go ahead with HS2 before deciding on the location of London’s main hub airport? The airport question should surely be determined first. After that it will be clear what enhancements to our railway network will be needed. I am sceptical about the value of shaving a few minutes off the journey from London to Manchester. Certainly I do not believe the figures produced in an attempt to monetise the value of HS2 in terms of enhancement to GDP.
If Heathrow is to remain our principal airport hub and expansion is to take place there, surely HS2 should be routed via Heathrow. If, as I believe should be urgently considered, a new airport in the Thames estuary were to be built, then there might well be a case for a new high-speed railway to be built as a part of the new airport’s links with Birmingham, Manchester and the north.
Among the measures announced in the gracious Speech was the deregulation Bill. We have only just seen Royal Assent given to the Enterprise and Regulatory Reform Act which paved the way for the merger of the Office of Fair Trading and the Competition Commission and some assorted minor tinkering. I fear that the new deregulation Bill, which is not yet published, will bring us more of the same. The Government’s website informs us that the Bill forms part of their agenda to reduce the burden of excessive or unnecessary regulation where primary legislation is required. I ask the Minister to explain exactly what that means. What about reducing the burden of excessive or unnecessary regulation where primary legislation is not required?
The Institute of Directors has commented that the gracious Speech shows a “poverty of ambition” about reducing the regulation of businesses. The Government’s Fifth statement of new regulation states that:
“A substantial proportion of the burden of red tape and bureaucracy emanates from Europe. The Government is working with our allies in Europe to encourage the EU institutions to reduce the EU regulatory burden”.
I fear that the Government’s encouragement of their allies will not achieve a great deal. European regulations in areas where we have lost our national competencies bind directly, without parliamentary ratification, and the transposition of European directives into British law continues to produce a vast volume of cumbersome red tape. I fear that it will be largely a waste of time to debate the deregulation Bill, which will be of such limited effect against the massive tide of new regulation engulfing us.
It is not fashionable to defend our banks and financial institutions, which continue, six years on from the financial crisis, to be bullied and abused by Governments and politicians not only here but in many other countries. Although not mentioned in the gracious Speech, soon the Financial Services (Banking Reform) Bill will come here from another place. Your Lordships’ House will have a duty to ensure that this Bill does not negatively affect the prosperity of our financial services sector and the competitiveness of our financial markets compared with their global competitors. British and foreign banks alike are grappling with the burdens of the new regulatory structure; around 2,000 institutions will be regulated both by the FCA and the PRA. The fastest growing departments in many City institutions are compliance and IT—all power to the noble Baroness—rather than the business departments that promote lending to SMEs. No wonder the executive committees of City institutions spend 90% of their time discussing ICAAP and ILAA rather than talking about how to do more to support and lend to new and growing businesses.
Unlike my noble friend Lord Lawson, with whom I agree on most things, I am not really convinced that the strict ring-fencing of retail banks is either necessary or desirable. I do not think that if ring-fencing had been in place, it would have made any difference to any of the banks which failed. Besides, banks now enjoy greatly improved capital and liquidity ratios, which I believe is more important. However, ring-fencing is going to happen. The Government want it, the banks have accepted it, and your Lordships’ House should concentrate on implementing it with as little collateral damage as possible.
As noble Lords are well aware, our new regulatory system is being introduced at the same time that the three equivalent bodies at the European level have been reorganised as fully fledged regulators. I have heard from some continental bankers that they are surprised that we have undertaken such a far-reaching reform of our national regulatory system because, “Everyone knows that it is intended that eventually the European regulators will do the job for the whole of the EU”. The soaring costs and the continuing uncertainty about the regulation of our financial services markets have undoubtedly already lost us many jobs and business operations to other centres.
I do not know whether it will be possible to repatriate significant powers such as financial regulation, but if the European Union is to consist principally of one very large country—the eurozone, one medium-sized country—the United Kingdom, and perhaps one or two small countries, then I think that it will be neither comfortable nor advantageous for us to remain a member, and I congratulate my noble friend Lord Lawson on his decision to articulate his view at this time. As my noble friend Lord Forsyth so eloquently argued, our future lies in developing our global trading relationships with the Commonwealth and the growing economies of Asia, South America and elsewhere. Of course we would need to negotiate a free trade agreement with the EU, but if South Korea can have one, why can we not have the same? Why would the EU not agree? After all, we buy more from the EU than it does from us.
I have spent a third of my working life resident in Japan, which is at last enjoying its day in the sun after a very long economic winter. I was naturally delighted that the Prime Minister and the former Japanese Prime Minister Mr Noda signed two important collaboration agreements in April last year: one on military equipment procurement and one on civil nuclear power. Hitachi’s acquisition of Horizon, rescuing our new nuclear power industry, is an example of the second. I believe that our excellent trading and investment relationship with Japan can make an increasing contribution to our growth and urge the Government to include Japanese alongside Mandarin Chinese as one of the languages that may be offered in primary school at key stage 2. Given the deep economic ties with Japan, and the fact that the Chinese and Japanese economies are nearly the same size, it is strange and upsetting to our Japanese friends that Japanese is excluded from the list.
The Government deserve congratulations for sticking to their pledge progressively to reduce corporation tax. By April 2015, we should enjoy, at 20%, the joint lowest rate in the G20. That should help the Government’s first priority: to strengthen Britain’s economic competitiveness. Although I keenly support the Government’s economic policy, I would ask my noble friend to explain what the Treasury meant by its statement following the gracious Speech that there would be a crackdown on tax avoidance and evasion, with a £4.6 billion package, including a new information exchange agreement between the Isle of Man, Jersey and Guernsey. Can my noble friend confirm that, in spite of the Treasury’s statement, the Government still distinguish between tax avoidance and tax evasion? Can she explain whether the UK is also a party to the information exchange agreement between the three territories? What is meant by a £4.6 billion package: will it yield £4.6 billion and, if so, over what period, or will it cost £4.6 billion to implement? The language is not clear.
In common with some other noble Lords, I confess that I, too, did not really feel inspired by the gracious Speech. I regret that it felt somewhat lacking in enthusiasm and vision. Nevertheless, there are some sensible measures, already referred to by other noble Lords, such as the Local Audit and Accountability Bill, which abolishes the Audit Commission and outsources and delegates its powers to local communities. The National Insurance Contributions Bill will also, in a modest way, encourage small businesses to take on more employees. I look forward to hearing the rest of the debate and the Minister’s reply.
Baroness Wall of New Barnet
My Lords, I, too, will quote from Her Majesty’s gracious Speech, even though when you are almost 40th on the list, I guess there is nothing new that one can say. I quote in particular the statement:
“My Government’s first priority is to strengthen Britain’s economic competitiveness. To this end, it will support the growth of the private sector and the creation of more jobs and opportunities”.
I want to focus on what that really means for businesses operating in a global economy, be they large companies or small and medium-sized enterprises.
Manufacturing is still the third-largest sector of our economy and generated £126 billion in gross value added in 2012. The United Kingdom is still the world’s ninth-largest manufacturer and, despite some popular misconceptions, still makes things that the world wishes to buy. However, I suggest that not only will any amount of expansion in manufacturing depend on the success of British manufacturing in designing new products and continuing to increase productivity—both of which are hugely important—but that there is a role for government to play in creating the environment for manufacturing to grow and prosper.
Like other noble Lords, I am going to quote from the interesting report of the noble Lord, Lord Heseltine, No Stone Unturned: In Pursuit of Growth, in particular the chapter in which he refers to his vision for a new business support infrastructure. He says:
“Each country provides support in its own way, but what is striking is how unusual the UK is amongst advanced industrial countries in not having a strong and stable business support infrastructure. We should address this deficiency”.
I understand that the Government have welcomed this report, to which many other noble Lords have referred, so I would be interested to know, in addition to what the noble Lord, Lord Deighton, said at the beginning of this debate—many hours ago—just what the Government are intending to do to address the deficiency referred to by the noble Lord, Lord Heseltine.
This is still work in progress but the Government should aim to address the concerns of the businesses that I visit and support. One is that all government departments should have the same focus on “Made in Britain” that BIS does, and should have a culture of checking every policy they work with by asking: will this support businesses to grow and prosper? The UK cannot and indeed should not hide from international competition. What manufacturing businesses want is a levelling of the playing field, an understanding of the challenges that UK manufacturers face, policies to ensure that, wherever possible, manufacturing is supported in government policy, and for policymakers to heed the Hippocratic oath—which exists in my other interest, the health service—“First, do no harm”.
Many businesses are striving to sustain their market share in a still-fragile economy, but those businesses that have really grasped the well quoted saying that the workforce is the most important component in a successful business are those that despite—or perhaps because of—these difficult times have focused on skilling and re-skilling their valued employees. They realise that doing this ensures that they have the talent and skilled workforce to seek out opportunities—as few as they are in some sectors—and to be in a fit state to take on challenging contracts in pursuit of growing their businesses.
The understanding of the need to keep manufacturers competitive has also been recognised by the British trade unions. My noble friend Lady Turner, who I worked with for many years in the trade union movement, referred to this. Many trade unions have worked closely with employers to support business competitiveness, by achieving flexible working patterns, encouraging and supporting the apprenticeship programmes and by constructive resolution to any disputes between business and their employees.
I am sad that my noble friend Lord Hanworth is not in his place. He bemoans the privatisation of many companies but I can give him examples of companies —BAE Systems, part of the aerospace industry he referred to, Jaguar Land Rover, Siemens and others—that have had this successful relationship, employing many thousands of people in the UK and further afield, all of whom are getting great skills and advancing their own individual opportunities.
I congratulate the Government on continuing and re-emphasising the focus on skills, in particular apprenticeships. This was started by the Labour Government, who put several millions of pounds into getting this off the ground. I was employed for many years in a major chemical company in the north-west where having apprentices was a way of life and the whole business was surrounded by young men, very often carrying the can for tradespeople. Nevertheless, apprenticeships were a way of life. We are now getting back to what I think is the best of all worlds by having apprenticeships revived. The evolution of apprenticeships is exciting and necessary for business services.
The level of skills required by UK manufacturing businesses has increased. According to the UK Commission for Employment and Skills, by 2017 the percentage of manufacturing jobs that will be in the employers’ “high end”—mostly degree-level employment —will rise from 27% today to 37%, meaning that there will be about as many people in high-end occupations in manufacturing as in low-end occupations. That is aspirational; it is wonderful; and we should all aim to support those who want to rise from the low end to that high end in all their businesses.
The recent focus on higher apprenticeships is making a huge difference to large businesses. As well as recruiting graduates to their management training programmes to carry forward talent and leadership skills, as they have in the past, they are focusing on expanding this talent pipeline by offering existing skilled employees the opportunity to gain additional leadership and management skills, thereby bringing them along that same route to senior management and senior supervision positions. Many businesses doing this say that those employees who have already served skilled apprenticeships will have the added bonus of knowing the business from the shop floor to the boardroom.
It was feared that SMEs would not see that higher apprenticeships were for them. However, many of them—when supported, for example, by Semta, the sector skills council for science, engineering, manufacturing and technology with which I work—are realising that they add huge value to their business opportunities, particularly in the supply chains within which they operate. Having people with skills, vision and leadership gained through the higher apprenticeships ensures that they stay competitive and, very often, punch above their weight.
Government must not let this visionary and sustainable policy be just another flavour of the month. They should continue to support employers to recruit more so as to retain the true value of the whole apprenticeship programme and not allow it to be diluted, leading to the devaluation of these important levers. Although the increase in the number of apprenticeships and the money that is brought with it are welcome, I ask the Minister to reassure us that the quality of apprenticeships is hugely valued.
The funding allocation from government via the Higher Apprenticeship Fund, which was created to develop a range of higher-level apprenticeships and fund 10,000 apprenticeships, was enthusiastically received. However, as I have identified the pressing need for advanced skills in our economy, the Government need to consider doubling or trebling this level of support so that the quality of our apprenticeships increases as numbers rise. Employers need to support that by providing matched funding in many cases.
There is a growing momentum and ambition across the manufacturing business world to get out of this recession. Government must capitalise on this moment and on the consensus among political parties about the importance of manufacturing. The consensus, too, around the importance of apprenticeships must not be wasted. We must take this opportunity to reshape our economy and put it on a more sustainable footing.
The Earl of Glasgow
My Lords, it seems that all parties regard transport as a minor, even expendable, department of government. In the past three years of this Parliament, we have already had three Ministers of Transport. The job has become a staging post for Ministers moving on to what are generally regarded as more important ministerial roles. As someone who cares a lot about our public transport, I find this department’s continual relegation to the class of a lesser ministry quite depressing.
On the other hand, I have to accept that there is one aspect of the transport brief that must make it less attractive to ambitious career politicians: nearly all important transport policies and decisions have already been made before you take up the job, often—in fact, usually—by an earlier Government. Any major decision that you may make in office is likely to come to fruition only long after you have moved on, and there is little satisfaction when someone else takes the credit for the hard work that you did 15 years earlier. All the big planning decisions are made at least 10 years before they are implemented.
That, of course, is the situation in the case of HS2. It has been on the cards for at least five years and now at last we learn that the first phase of the controversial high-speed rail line from London to Birmingham is expected to be completed in about 15 years’ time, with the further extension to Manchester and Leeds seven years beyond that. Work, however, is not expected to start before 2017, so HS2 and other long-term projects, such as extra airport runways around London, can be safely planned only with the aid of a crystal ball. What sort of world will we be living in 20 years’ time? Will we really need more airport capacity? Will we be driving electric cars? Will the threat of global warming finally be taken seriously and carbon emissions substantially and forcibly reduced? Will we still be in Europe? When will we be seeing those flying cars that feature in so many science fiction films nowadays?
I am convinced of one thing. Our middle to long-distance journeys within the United Kingdom will increasingly be taken by train. Apart from anything else, it is the only civilised and potentially pleasant method of travelling long distances. Flying is always a hassle and uncomfortable if you are squashed up to a particularly large man—and unhealthy, too, if he has a streaming cold, as happened to me recently. Driving long distances in a car is always stressful. Cars should be used primarily for shopping at your local market town, visiting neighbours and driving to the station to catch a train. Incidentally, we need more safe parking at our suburban and country stations.
I believe that the train is the only long-term answer to our national transport problems and will continue to be so for at least the next 30 years. I am therefore very supportive of the HS2 plans announced in the Queen’s Speech. I would like the Minister’s assurance that the Government will not be diverted by a number of powerful anti-HS2 bodies who believe that they can persuade them to change their mind. Its opponents are against it on the grounds of cost, that the money would be better spent elsewhere, that the Government have got their projections and figures wrong, that it is not a good use of taxpayers’ money and that it will pollute the English countryside, particularly the Chilterns. I believe, however, that HS2 is a crucial element in Britain’s overall policy for improving our railway network and should, if anything, go ahead with more urgency and, if necessary, at even greater expense to ensure that it achieves the objectives to which it aspires.
One of the objectors’ arguments is that the money could be spent on improving the existing rail network, but I am under the impression that the existing network is to be upgraded at the same time. I would like the Minister’s assurance that that is indeed the case and that it is not an either/or option. After all, one of the justifications for high-speed rail is that it will free up capacity for the existing network and enable other lines to operate more efficiently.
Beside the country’s overall need for a faster and more efficient train service, another of HS2’s purposes is to bring London and the south-east closer to the north and the Midlands. It has been calculated that if London and the Home Counties formed a separate country, it would be by far the most prosperous in Europe, but when included within the rest of the United Kingdom we stand only about half way in the pecking order. Surely anything that helps to widen Britain’s areas of prosperity can only be a good thing, although it will be up to the Government to ensure that the new rail line is used more to encourage southerners and southern companies to go north, rather than seducing more northerners to come down south to London. The BBC’s move to Salford shows that major relocations can and do work.
The argument that high-speed rail will ruin beautiful countryside seems completely fatuous. If you live nearer than a quarter of a mile from a proposed route, you may well have reason to object, but I understand that those adversely affected will be amply compensated—and so they should be. Who nowadays objects to any of our existing railways passing through areas of outstanding natural beauty? In some cases, the railway actually enhances the countryside. No one has ever made a convincing case that wildlife has been more than temporarily disturbed by new railway lines. A railway is not like a motorway, particularly a motorway interchange or, worse still, an extended runway to an existing airport, which really can have an adverse effect on the surroundings and everyone living near it.
HS2 is a bold project and needs bold measures to ensure that it realises its potential. One of its detractors, the HS2 Action Alliance, calls it,
“arguably the single largest ever project ever contemplated in peace time by a British Government”.
It then goes on to list what it considers to be the project’s flaws. My fear is that compromise and elements of cold feet may infiltrate the Government’s future thinking. In the present plans, the project is to be completed in two main phases, followed rather vaguely by a contemplated further phase. However, these contemplated further phases are essential to the success of the whole project. For instance, there surely must be a direct connection to Heathrow Airport, and from there to Gatwick Airport. However, this is not intended in either of the first two phases. There must surely be a direct connection with High Speed 1 so that passengers from Manchester or Leeds can go straight through to Paris without having to change in London, yet this, too, is not included in the first two phases. HS2 needs to go north at least as far as Preston in order to make the time saving significant enough for passengers travelling to and from Scotland, ultimately making internal flights in the United Kingdom unnecessary. In the present two-phase plan, only three-quarters of an hour will be knocked off the journey time from Glasgow to London, which is not enough to deter many of us from taking the plane.
Phase 1 takes us only as far as Birmingham. If for any reason the line were to stop there, I would agree with the objectors that the whole thing had been a disgraceful waste of government money. When in phase 2 it reaches Manchester and Leeds, the project begins to make sense, but the real benefits come only when the distance travelled is considerably longer and when these other essential connections are made. The Government must therefore commit to phase 3 before even starting on phase 1. Delay the start if the financial situation demands it but, once started, all three phases must go ahead as quickly as possible, one after the other. The project cannot afford long gaps between phases, when the fares will be high and the benefits strictly limited.
The Government, supported by all three parties, are taking an expensive gamble on High Speed 2, a gamble that in my view will pay off handsomely in the end. However, the Government must be bold and buy wholeheartedly into the whole package, not progress slowly in small, hesitant steps. I would like the Minister’s assurance that this is indeed the Government’s intention and that they recognise the danger of progressing too slowly.
Lord Patten
My Lords, I warmly congratulate my noble friend Lord Glasgow on what he has just said about high-speed rail, and not only on what he said but on the way that he said it, which was lucid and clear, so unlike many speeches that the political classes tend to unleash on the innocent electorate. They say all that stuff about how we are about to be nudged by the nudge unit, the need for a national conversation—what is a national conversation?—about this, that or the other and the need for us all to go out into the street and celebrate something as stakeholders, probably slipping into a paradigm shift as we do so. I greatly regret the way in which the political classes tend to address themselves and not the electorate, thus widening the gap between the two. The next thing that we will be told is that we need a political narrative about HS2. What is a political narrative? I cannot tell the difference between a political narrative and the back end of a number 11 bus.
I say this respectfully, but in the gracious Speech we have another prime example of meaningless guff, drafted for Her Majesty about a policy that I happen to support very strongly, saying that it is to be “world-class”—that dread phrase that public relations experts wheel out in company reports. I regret that the gracious Speech had those words for Her Majesty.
In the three areas that I intend to address, which are the economy, housing and transport and HS2—I regret to say that my noble friend has largely shot my fox, so the third section will be short—I wish to talk about the need for clarity and, above all else, for honesty, because if we are honest we will get a proper payback from the electorate.
I turn first to the realities of the economic situation that we are in. I am a strong supporter of our policy on deficit reduction. Doubtless the Treasury is pleased to hear that. There may not be all that many of us left, but those of us who are mostly think that the naysayers to our policy can “IMF off”.
I think the electorate will accept what is being done to achieve this deficit reduction if it is explained in an open and transparent way, so we should explain to our electorate that the UK’s debt, just as in the aftermath of World War 2, has ballooned to a level that will never be paid off by economic growth alone, probably in our lifetimes. Therefore, not wanting, at one extreme, to default our way out of the debt problems that face us or, at the other end, to impose impossible levels of austerity, what we are doing is very sensible. It is reducing the real value of debt by keeping interest rates below inflation. After 1945, this policy of negative real interest rates, sustained for many years—indeed into the 1970s—was a bipartisan and very effective approach to reducing the debt pile, with savers then as savers now being asked slowly to absorb the pain. They were a captive audience buying government debt at below market interest rates. That is certainly happening today with inflation fast approaching 3%.
Against the background of a more or less flatlining economy likely to obtain for some while—a long period of low growth—there is nowhere else for us to go. The banks already know, with greater regulation, which I again support, concerning demands on them to hold more capital, that the Government know that there is a set of captive buyers for their debt out there. I am not quite so sure that the rank and file of retail savers have woken up to the fact that government policy is indeed to erode the real value of their capital in order to reduce the country’s debt. This is a highly inconvenient truth, but truth it is, and both parties have conspired to cover up that truth in earlier years. It is better explained than not, better understood than glossed over. We should be honest.
Incidentally, there are those who want to persecute entirely innocent baby boomers for having had it too good over the years and force them to make recompense by passing some of their wealth down to generations X and Y. We should recognise that this blameless group is already doing quite a lot of that by taking part in the process that I have just outlined. Also, from January 2014, we will see more such transfers between the generations as the help to buy scheme, following the new buy scheme and then the fresh buy scheme, begins to be rolled out, paid for in part by savers and taxpayers, many of them in the baby boomer generation.
My second point is that, needless to say, I hope, I support anything that will enable more people to buy their own homes in a proper and orderly way. I also support anything that helps the building industry because it employs people and gets more jobs created more quickly. I also support anything that enhances the environment. However, there are three risks involved. First, there is the risk that under the new scheme, from some date in January 2014 onwards, people who should not be borrowing money may be brought into borrowing it and, as in the run-up to 2007, we may have a higher risk of people taking on debts that they should not be taking on. At no point in the excellent speech by my noble friend Lord Deighton that introduced this debate did I hear any assessment of the risk of this or, indeed, of the parallel risk that the scheme may incite house price inflation again in a way that we have not seen in recent years.
I am told that my noble friend was an investment banker in the old days. Doubtless he was pretty used to assessing risk and to mitigating it. I do not know whether he took a few risks as a young banker, but I do not wish to take risks with taxpayers’ funds that may leave more people in debt who should not be in debt and lead to house price inflation coming back again. If my noble friend Lady Hanham, who always speaks very clearly and never uses jargon, any more than my noble friend Lord Glasgow does, is tempted to say in her wind-up speech—if she chooses to address the point that I am making—that there is no risk at all in those schemes, I promise her I shall not barrack from my spot high up on the Back Benches by shouting “Bunkum!”, but I shall certainly be thinking it very fiercely. It is terribly important that we stress that risks are being introduced in this new housing policy.
The third risk, of course, is that it will lead to more rapid development on greenfield sites. I support housebuilding on greenfield sites. I prefer it to be on brownfield sites, but I support it because it is necessary and the only way that we can provide houses and flats for those with the ability to buy them.
However, I hear disturbing stories about the landscape effect and the quality of new buildings on greenfield sites being rolled out by housebuilding companies. I therefore took an interest this weekend and went to look at a housing scheme being run by Bovis Homes, a publicly listed company, on the edge of Wincanton, a small market town in the boondocks of Somerset. I found what I saw there disturbing. Much of the pre-existing landscaping that had been demanded by the local Liberal Democrat-controlled council had been eaten into, tree shelterbelts interfered with and taken into part of the development sites, and hedges planted by Messrs Bovis now ripped up and replaced by metal- grilled fencing, giving a terrible look to the development itself. It is just the kind of thing that discourages those who might be tempted to support, as I do, the building of high-quality houses on greenfield sites and gives it a bad name.
Incidentally, if it were not so sad it would be funny also to be told that in one or two of the new houses, which have been on sale only for about six months, there are the sort of issues that none of us who wish to promote the welfare of the housebuilding industry wish to see. One poor lady putting her three-pin plug into a socket in the wall found that it would not power up her appliances, so she asked an electrician to come; I have checked these facts, and they are facts. When the electrician came, he—for it was a male electrician—found that there was indeed no electrical supply of any sort running up the walls to the sockets. My noble friend Lady Hanham needs to do all she can to encourage local government to be strict on the maintenance of landscaping around greenfield site new buildings, and all she can to encourage the building industry to be right first time, just as we hope all manufacturers will be right first time.
Thirdly and lastly, I turn to infrastructure. Just as bad housing developments can be a blot on the landscape, as my noble friend Lord Glasgow said, we undoubtedly face blots on the landscape from the development of HS2. There is no point in messing about and saying that they are not there. We should be absolutely honest and say that HS2 will be damaging to some parts of the environment, at least for a while, through noise and the destruction of landscape and views. It is therefore absolutely right that we must persuade people to accept HS2 in its various manifestations as something that we will be prepared to pay large sums of compensation for in order to make it bearable for people who live nearby. I hope that we will say transparently that we recognise the environmental risk and intend to do something about it, including, maybe, the introduction of environmental offsets of one sort or another.
That sort of transparency is also vital for those who wish to come alongside the Government. My noble friend Lord Deighton wishes to attract investment from abroad, which I entirely support. Only last week, we had one of the big Canadian pension funds, the Ontario teachers’ pension fund, saying that it felt that too many schemes were seeking public funding from entities like it, and that it was important that we reduced the number of schemes and concentrated on those that were deliverable—and, as my noble friend Lord Glasgow said, get going on it very quickly.
Lord Whitty
My Lords, some have said that this Queen’s Speech is too thin. I do not have a problem with that. Frankly, it is an issue of quality rather than width. If the legislation proposed was going to do something about the economy and improve our economic and societal prospects, I would welcome it, however thin it was and however many Bills were involved. As it is, I welcome some of what is there, and welcome the opportunity to debate the rest. I am very glad that we are about to debate the Energy Bill and the water Bill; both will probably be discussed more tomorrow, but both are vital for issues of living standards and cost of living, and for our investment programme. The Energy Bill seems deeply flawed, and I am sure that we will have some serious debates on that. I agree with what is in the water Bill, broadly speaking, but there are great gaps in it—in particular any reform of the abstraction sector, which will be vital for the economic and environmental future of that sector.
I am glad, although it was not mentioned in the gracious Speech, that we will also get banking reform back before the House. However, I am pretty dubious about the present proposal’s ability to reform a sector which both caused the financial crisis by its recklessness and which is failing and holding back the recovery by its caution. It is a sector in this country which, despite the dramatic changes since 2007, has somehow retained, broadly speaking, the same structure. Some institutions are under different ownership, including state ownership but, basically, we have not tackled the problem of the structure of the banking sector in particular. I was hoping that we would see a more decentralised and more segregated banking system, both horizontally and vertically, and an absence of organisations which, for the future, would be “too big to fail”. I regret that we are not yet in that position, and I cannot see that this proposition on banking reform will get us to it.
On other legislation in the gracious Speech, I think I welcome the Mesothilioma Bill, which should—although it requires some detailed scrutiny—right a serious, long-standing and distressing situation. On the deregulation Bill, I hope that it will raise burdens on small and medium-sized firms, but I suspect that it is largely another rehearsal of saloon bar prejudices, and so I cannot give it an unequivocal welcome.
I hope I will be able to welcome the proposed consideration of the draft consumer protection Bill. As my noble friend Lady Hayter has said, the Government’s record on consumer issues in legislation has not been particularly good. They not only abolished my own organisation, Consumer Focus, but resisted proposals from noble Lords on all sides of the House during the previous Session to improve the protection of consumers in Acts that were passed in that Session. I hope that we will see some real proposals for improvements for consumers this time round.
In particular, I hope the Government will return to the issue that was mentioned by my noble friend Lady Hayter: that of collective redress, which I have been banging on about on every possible occasion over the past few years. It was to be included in one of the last pieces of legislation of the last Government, but unfortunately it was lost during the wash-up when it was objected to by the then Opposition. Collective redress would have avoided a lot of the hassle which consumers face, for example with PPI, where they are exploited first by financial institutions and then by claims companies. To have a proper system of collective redress for consumers would be a major step forward, and I hope that the Government have that in their sights in the production of the draft consumer protection Bill.
Excluded from the gracious Speech are some serious proposals on how to get out of the current economic recession. I follow the noble Lord, Lord Patten, in this, although I have seen the same bad example in Wincanton to which he refers. We need a massive housebuilding programme. The Government, after cutting back even on the rather inadequate programme they inherited from the previous Government, have finally realised this, and they are providing some significant support for the purchase of housing. However, as the noble Lord, Lord Shipley, said, that is not enough. In default of increasing the supply of housing—in other words, acting on the provision and capital side as well as supporting potential buyers and landlords—the net effect of underwriting and providing mortgages under Help to Buy and other schemes will be to raise house prices and increase housing costs, aggravating rather than resolving the problems of dysfunctional housing markets. Help on the capital side for building houses, by raising the limit on borrowing for local authorities and housing associations, by joint ventures and by supporting the private sector in housebuilding, is one way out.
Investment in housing ought to be accompanied by investment in infrastructure. The only serious mention of infrastructure in the gracious Speech was the reference to HS2. I broadly support it, but I will not enter into that controversy now. HS2 will bring jobs and serious investment only in several years’ time. We need investment in ready-to-roll projects now. There is an absence of that both in the Queen’s Speech and in the Government’s thinking.
Of course, behind all this is the problem of the economy, which manifests itself in a number of ways. The political obsessions at the moment with the EU and with immigration are a reflection of the failure of the economy. It is probably too late at night and I have too small an audience—actually, the audience is distinguished enough for me to go into a bit of a rant about the economy. Brussels, Frankfurt and Great George Street are all in thrall to a dangerous economic ideology, and they must get out of it if we are to see any economic progress in this country and in Europe.
The effect of the eurozone and the ECB’s view on how they should impose austerity on the rest of Europe is pretty clear. A single currency requires the transfer of resources and credit from the richer part of the EU to the poorer part. The fact that the Deutsche Bundesbank, German politicians and the ECB do not see that sufficiently clearly will, if they are not careful, ruin the eurozone. I speak as a passionate pro-European. I was even broadly in favour of the single currency at some point. However, they are failing to manage it properly because they are in thrall to an ideology that says that the only way out of economic recession and a public finance crisis is to impose austerity in a way that impacts most detrimentally on the poorest part of the eurozone.
Having been critical of the eurozone, I say in a less dramatic way that we are pursuing the same policy here. The Chancellor likewise is locked in the same ideology. The one great success of the Treasury in the past three years has been to convince the bulk of the press and a large proportion of the British public that the current difficulties in the economy and the public finances are entirely the fault of the previous Labour Government. The noble Lord, Lord Hodgson, who is no longer in its place, said that the Labour Party was in denial about this. My assertion tonight is that it is the Government who are in danger of believing their own propaganda. The financial crisis was started by private debt in America and in Europe. It was compounded by the failure of the banks, and compounded further by the fact that Governments throughout Europe and North America decided that they were going to bail out the banks. That is what caused the crisis in public finances.
The UK was more impacted than others because we are more dependent than other countries on the financial sector. The long-run record of the Labour Government was that before 2007-08 we had a debt-to-GDP ratio that was roughly the average of the OECD countries. It got worse because of our dependence on the financial sector. That is something that this Government have to pick up. However, they should not try to do so by imposing a form of austerity on the whole of the country in a way that minimises our chances of getting out of the recession. In particular, they should not focus on the social security budget and misrepresent the way in which it has increased over recent years. The vast majority of that, of course, has been because of the increase in the part of the population of pensionable age. The other two elements include the increase in housing benefit, which has got seriously out of control. But that is due to a failure of the housing market, not of social security policies, and housing benefit should not be included within the universal credit system until we have resolved the problems of the housing market in a way that does not lead to huge increases in housing benefit for those dependent on ever-decreasing opportunities within the housing sector.
If you look at the Government’s credibility in international markets and their inability to stimulate investment within this country, despite the fact, as somebody said, that significant money is available in corporate accounts and pension funds, you can see that people are not investing in the UK because they do not have confidence in this Government’s ability to get growth going in the UK.
Lord Phillips of Sudbury
I am grateful to the noble Lord for giving way. I cannot resist asking him, on his second reference to our position in the international markets—he talked about our credibility—whether the most vivid example of where we stand in the eyes of would-be speculators against sterling is not the fact that the rate at which we have to pay on our admittedly massive international debt is little if any more than the Germans pay. Had we not adopted a programme of some austerity, the cost of our borrowing would have been enormously greater.
Lord Whitty
No, my Lords, I do not accept that. I accept the first part of what the noble Lord, Lord Phillips, says, but not the second. The ability to borrow in international markets, as with borrowing in almost any context, depends on a number of things. It depends on your ability to have a low rate of interest and low cost of borrowing; a reasonable term of borrowing; and an ability to service that borrowing and to repay the borrowing. On all those counts, throughout the desperate period of 2007 to 2011, the UK retained credibility and could borrow at relatively low rates over relatively long periods. The final qualification is that the markets have to be confident that the Government can raise enough money to repay those debts over the medium to long term. What has lost credibility in this Government is the slow growth and flat-lining of the economy, as well as the downturn of financial income for the Government as a direct result of that economic failure, which has reduced the markets’ confidence in the ability of the UK to repay loans. That is why the credit rating has gone. It was not Gordon Brown who lost the credit rating—it is actually George Osborne and his failure to get economic growth within this country. Unless the Government recognise that and start changing course by investing in infrastructure and housing and getting us out of this economic recession, they will be going down the wrong road. I think that they have already gone too far down that road, but there is still time even for this Government to change their direction.
Lord Flight
My Lords, as the noble Lord, Lord Deighton, pointed out, there are some useful, detailed provisions in the gracious Speech for the economy, but it seems to me that there is really nothing of great substance. The national insurance allowance is welcome for small businesses. The help to buy scheme is extremely unwise in that it applies to existing property and not just to new builds and is in danger of feeding yet another housing bubble. It is perhaps inevitable, with two years before an election and with a coalition Government, that this is not a time for radical change. However, both the Labour Party and the IMF are by mistake or wantonly misreading the situation. The reality is that this Government are still running a deficit of £120 billion and they have financed most of the spending of £380 billion by printing money. They could not be much more Keynesian than that, in truth, whatever may be being said. In my book, we are erring on the rather incautious side in that territory and telling a slightly different story from the underlying reality.
I repeat that it is a question of what is politically practical at this stage of the cycle but, in principle at least, I would like to see radical supply side measures. Taxes are still too high, the state is too large, the incentives to work, invest and save are too low, regulations are too burdensome and increasing and the lack of planning reform is still the key delay to new housebuilding. The energy reforms will do nothing to reduce prices. Energy policy needs radical change to encourage fracking, given what is happening to the US economy as a result of that. There is plenty of potential here in that regard. We have a crackpot policy of massively subsidising unreliable and expensive wind power, which will result in ridiculously high tariffs for manufacturing industry and impoverish consumers. I am greatly disappointed that the Government have not yet got round to reviewing what is clearly a mistaken policy. The childcare scheme discriminates unjustly against single-earner families. Although I am absolutely convinced that the noble Lord, Lord Deighton, is doing his best, infrastructure investment needs to be released to a far greater extent than is the case. It is still hugely delayed by planning and environmental red tape. It is pathetic to continue to put off a decision on the airports serving London, which is clearly a very pressing decision relevant to overseas investment in this country.
However, my particular concerns are what I call “kicking the can down the road” measures, things being done today which do not attract much opposition from the Opposition or the media but will be the source of major cost in the future. It seems to me that care for the elderly will saddle the taxpayer with huge future liabilities, is a regressive extension of the welfare state and does not really solve the fundamental problems. Shifting the burden of identifying illegal immigrants onto landlords just adds to their costs and is unlikely to be successful. We have spent time in this House debating the Public Service Pensions Bill. Nobody seems to be concerned that by 2017 there will be an annual cash flow deficit of somewhere between £20 billion and £25 billion per annum. I question whether the Government of the day will be able to afford that, whichever party is in power.
The House of Lords Library recently presented a most interesting report which forecasts that the proportion of students who do not repay their student loans will rise from 28% to 40%. Forty per cent of a total of £80 billion is £32 billion to write off on the student loan book. There are two problems here. One is that a lot of students simply do not earn enough because their degrees have no commercial value. A second category of students either go overseas or return to Europe and do not repay their loans. The whole machinery needs to be tightened up. I have been told by students in Europe that they would be happy to repay their loans but do not how to do so because it involves getting a standing order from a bank account in Europe, which is in euros, translated into a sterling order over here and finding a representative bank to pay it. However, behind that there is a much more serious problem of the establishment still not attaching sufficient value to vocational training. The figures show that people doing proper vocational training get jobs more easily and earn more than those doing a lot of liberal arts degrees. Their debts are much lower because it takes much less time to complete vocational training. The truth is that the policy of trying to send 50% of the population to university, and then saddling them with massive debt, is wholly mistaken. What we need in this country is much more vocational training and for it to have the status it deserves given its economic value.
I now want to switch to a much more positive angle because it seems to me that few people realise that the UK economy is recovering extremely well. That is not just according to the latest figures, which I will come on to. What is happening is that the impact of the depreciation of sterling is finally working its way through. The second quarter showed 0.8% growth, strong factory output and particularly strong advertising spend, which is always a pretty reliable precursor to wider economic recovery. The true picture in relation to what has been happening for the past four years has also emerged. There has been a major reduction in North Sea oil production, and if you take that out of the equation the private sector has been growing by an average of 1.3% annually—more than 5%, which I said was the case when we debated the budget. That is where all the new jobs have come from. In comparison to much of continental Europe, the UK economy, as a matter of fact, has been doing surprisingly well. That is extremely good news and is not adequately recognised. In that context, it would be mistaken for government policy to overegg what is already happening of its own accord. In Birmingham South, you have an economic region in Europe that is among the most successful.
I want to close by picking up on the odd comment on the eurozone. In the 1930s it was the gold standard and reparations which caused chronic unemployment, particularly in Germany, and which, bluntly, let directly to the rise of Hitler. It is horrific that people are standing by and seeing some 50% youth unemployment in Spain and some 30% youth unemployment in Italy. This risks causing dangerous political reactions. It is a crackpot policy, all in the name of keeping the euro together. It is absolutely clear that the characteristics of southern and northern Europe mean that they cannot comfortably share a currency. The reality of that needs to be addressed. The German policy of getting away with doing as little as possible and temporarily financing it through the ECB ignores completely the political risks that are staring us in the face. The fact that Germany of all countries, having lived through what happened in the 1930s, cannot see that is completely extraordinary. Whether it is Italy or perhaps, eventually, Germany, I hope that they wake up to the dangers and realise that there has to be currency adjustment within Europe if they are to avoid severe political dangers. I hope that it is going to happen sooner rather than later.
Baroness Crawley
My Lords, at this point in the evening, one wag in the House will say, “Surely everything has been said”, and his fellow wag will respond, “Ah, but not everyone has said it”. Despite that, I congratulate our new colleague, the noble Baroness, Lady Lane-Fox of Soho, on her maiden speech. I believe that we all feel that her contribution was a master class in riveting, resourceful and modern rhetoric. I look forward to her further interventions in your Lordships’ House.
Those colleagues who say that the gracious Speech was a bit thin this year may have a point because when I held it up to the light I could just see the letters “U-K-I-P” in the watermark. However, I was perhaps mistaken because most noble Lords will know that chasing UKIP on immigration or European policy will not turn our country’s economy around—and turn it around we must if 1 million unemployed young people are to enter work; if real wages, which have fallen rapidly since the election, are ever to recover; if the downward trajectory of bank lending to SMEs is to be reversed; and if growth is to be put back on track.
The only thing that seems to be growing in Britain today is the Prime Minister’s bewilderment at the antics of his own party on the issue of Europe. When asked by our leading polling organisations what their main concerns are, the British public continue to put the state of the economy first. Only one in 10 respondents, when asked, will put Europe as their main concern.
Therefore, the unseemly spectacle of Conservative MPs disagreeing with their own Queen’s Speech is indeed “strange” and “extraordinary”, to quote the Prime Minister today. However much we may all wish to see reform in the European Union and work towards it, the idea that we can just vote to leave Europe, putting at risk the British jobs that depend on our 40%-plus trade with the rest of the EU and putting at risk the inward investment that comes to us because we are part of the largest trading bloc in the world, is bizarre. The idea that we can just start over with the BRIC countries, which make up a fraction of the trade that we have with Europe, is indeed strange and extraordinary. The PM and I are at one on this, as I am sure he will be thrilled to know.
My specific interest in the gracious Speech, as president of the Trading Standards Institute, is the draft consumer rights Bill, which sets out to establish, as the speech says,
“a simple set of consumer rights to promote competitive markets and growth”.
So far, so good. The main elements of the Bill are to consolidate legislation in one place, bringing together eight separate pieces of legislation on consumer rights, and it will cover goods, services, digital content and unfair contract terms. Again, we would all welcome such a consolidation.
The main benefits of the Bill, being to give consumers greater confidence when buying, to introduce new protections for consumers and businesses, to update the law to take account, finally, of the purchases of digital content and to reduce burdens on business are all to be welcomed, as my noble friend Lady Hayter made clear. So where is the catch?
I hope that it is not the Government’s intention in this draft Bill to dilute the powers of the enforcement agencies—of trading standards officers in particular—to enter suspect premises unannounced. If that were the case, a vital aspect of consumer protection would be done away with and those Members of your Lordships’ House who champion consumer rights would oppose such a move strongly.
In this very difficult economic climate, it is more important than ever to boost markets by boosting consumer confidence, yet the regulatory services in local government, including trading standards, have lost a substantial number of key posts in the budget cuts of the past three years, and that policy continues. This has not left us, for instance, in a strong position to deal with the horsemeat scandal or whatever is next to come round the corner, and consumer confidence has taken a knock as a result. If the Government’s Bill were to damage further the enforcement role of the regulatory services, carried out in the interests of both consumers and businesses, then I am certain that many noble Lords would find that unacceptable.
The gracious Speech needs to be part of a toolbox for building growth and prosperity back into our country. I am not confident, with the exception of High Speed 2, as made clear by my noble friend Lord Faulkner of Worcester, that this gracious Speech will do that job.
Lord Tope
I am not sure whether my noble friend, who started his local government career on the same day as I did, although it did not last nearly so long, was saying “shame” because it has gone on for so long or because it is coming to an end. However, it is too late at night for us to indulge in our familiar repartee.
It is customary at this stage of the debate to say that it has been wide-ranging, and indeed it has been. However, all the subjects covered today—business, the economy, transport, and, dare I say, standing immediately behind the noble Lord, Lord Forsyth, even the European Union—are matters that are crucial to local government. Indeed, good local government is crucial to the success of each of them. Long gone are the days when business and local government viewed each other from a distance with mutual suspicion and distrust, at a time when the only contact that most businesses had with their local council was with its regulatory services, and not always very positive contact at that.
Local growth is now top of the agenda for pretty well all local authorities of all sizes throughout the country, and it can be achieved only with a positive and dynamic partnership between the business community and the local authority. When that happens, it is a powerful driver for growth in the local economy. The roles of local enterprise partnerships are crucial to that, although I have to say that I think they are rather a mixed bag and it may be time to review the effectiveness of some of them.
A good transport infrastructure, both locally and nationally, is vital to the local economy everywhere. I say to my noble friend Lord Glasgow that I have waited nearly all my adult life for Crossrail in London. Now, at last, it is happening. So, in respect of HS2, I say to him to hang in there because I am sure that it will happen and that it will reach Glasgow one day.
On Europe, I tread carefully. It is calculated in the European Union generally that something like 70% of EU regulation has to be implemented by local or regional government as appropriate. That is crucial to local government. The say that local government should have in the preparation of that regulation and in getting rid of unnecessary regulation is extremely important and very often overlooked. I am conscious that the Minister who will reply to this debate was, like me, for many years a member of the EU Committee of the Regions, the voice of regional and local government in the European Union. Indeed, I recall that our third speaker today, the noble Lord, Lord Empey, joined me in the first term of the Committee of the Regions.
Turning now to the gracious Speech, I am quite sure that if local government had been asked what it wanted to hear in the Queen’s Speech, it would generally have echoed the words of my noble friend Lord Razzall earlier in this debate. The words it would most have wanted to hear are, “My Government propose no legislation”. The world would really have changed if that had been accompanied by a commitment from the Secretary of State and some of his Ministers to a prolonged period of silence on matters that should properly be the sole concern of local authorities and their electors in a true spirit of localism. But that is fantasy world and it will not happen. The Government will continue to legislate and regulate because that is what they do, and some Ministers inevitably will continue to make unnecessary and often ill-informed comments on matters that should not be their concern, although I exempt from that totally our Minister in this House, who has long since known better than to do so.
My noble friend Lord Shipley has already referred to a number of the Bills of significance to local government. Next week, we will debate two Bills of considerable significance—the Local Audit and Accountability Bill, and the Care Bill, which is not a subject for today’s debate but which has great significance to local government and, particularly, to its residents. We will have ample opportunity to consider them both in detail in the weeks to come, so I will save my comments on both of them until then.
However, of even greater significance to local government will be the spending review to be announced next month. The past three years have been a period of unprecedented challenge and opportunity for local government. The challenge has been implementing 33% budget cuts in only two years. The fact that they were front-loaded in the four-year review was a very unwelcome and unexpected surprise. Some Ministers, although never the noble Baroness who will reply shortly, have sometimes given the impression that that was easy—that all that was needed was to get rid of a few chief executives, cut the pay of the rest, share a few services and the job would be done. At the other extreme, local government representatives gave the impression that the world was going to collapse. Both of these, of course, were considerable exaggerations.
On the whole, local government has managed these major budget cuts very well. However, they have been just that—cuts—and the threat of more cuts in the next spending round is an even greater challenge. They will not be achieved just by reducing back-office costs and a few more salami slices. They will need real transformation in the delivery of local services and the expectations of local residents of what they should receive from their local authorities—a real behavioural change. Behavioural change and transforming services and the way in which they are delivered takes time and needs a climate that encourages creativity and innovation. That is very difficult to achieve when all jobs are under threat and the future is far from clear. It needs good, strong local leadership.
That is the challenge, and it is a big one—but what of the opportunities? Despite the rhetoric of some Ministers to which I have already referred, this Government have made some welcome changes to reverse the trend towards more and more centralisation which has gone on throughout my time in local government. It is not enough and is not fast enough for my liking but it is nevertheless real movement which has sometimes been overshadowed by some of the other measures and some of the other comments.
In his opening address the Minister referred to city deals. These provide real opportunities for the cities concerned and involve real power being devolved to them, together with the requirement, quite rightly, for those cities to take much greater responsibility. So far the two rounds of city deals have been confined to cities. I hope that the Minister can reassure us when she responds that the next round will be targeted largely at rural areas. No doubt it will have a different title but one hopes that it will have the same intentions and the same effect. However, we still need to move faster. We need more devolution of that power and responsibility.
My noble friend Lord Shipley also referred to whole-place community budgeting. I echo what he said. I would also add something that is even more exciting and interesting—namely neighbourhood community budgets as distinct from whole-place community budgets. As my noble friend said, huge savings have been suggested by the implementation of community budgets. Whether those estimates are accurate we will know only if and when we do it. However, even if they are only half-accurate they will achieve huge savings. Even more importantly, that will be done not by reducing services but by targeting those services more effectively on the people who are receiving them and worrying less about who or which organisation is delivering them.
Two Sessions ago we spent a long time on what is now the Localism Act, but that legislation will not implement itself. It gives local authorities the opportunity to do things differently, to innovate and, above all, to devolve power and responsibility to their own local communities. Local government faces a period of continuing challenge but also of great opportunity. My plea to Ministers is to trust local government and to let it get on with it. My plea to my colleagues in local government is to stop moaning and demanding more from central government. Rise to the challenge and make the most of the opportunities.
Lord Stevenson of Balmacara
My Lords, I thank the noble Lord, Lord Deighton, for introducing the debate on the humble Address and for making a fair fist of it, despite the relatively sparse material he had to work with. I am sure that he will not mind my saying that he had to rely on more than a few previously announced policies—housing, infrastructure, training and planning come to mind. Of course, there is always a case for limiting the amount of legislation, provided, as my noble friend Lord Whitty said, it is of high enough quality. However, the problem he had and that the Government have in general is in matching their rhetoric to the reality of their programme. You cannot trumpet your wish to focus on building a stronger economy if all you do is bring forward a programme that fails to deliver the growth and jobs required while attacking people’s rights and economic security and perpetuating a failed austerity policy.
I should like to congratulate the noble Baroness, Lady Lane-Fox, on her excellent maiden speech, which managed the difficult trick of making a substantial contribution to the debate, to which I should like to return, while leaving us all wanting a little more. I hope that she will intervene regularly in our work over the succeeding period.
I thank all other noble Lords for their contributions. It was a pity, although, I confess, quite amusing for us on this side of the Chamber, that the crisis du jour—how or whether we should continue our membership of the European Union—boiled over into the debate. However, I suppose we had better get used to it. It is invidious to single out contributions, but I hope that when the Minister responds she will pick up some or all of the interesting points made by the noble Lord, Lord Forsyth, on the Scottish dimensions to many of our debates and the Barnett consequences of that, which are very important. UK productivity problems were raised by the noble Baroness, Lady Wheatcroft, who also touched on regional recession concerns, a subject also raised by the right reverend Prelate the Bishop of Birmingham.
Our poor export performance and questions about why that arises were raised in a powerful intervention by the noble Lord, Lord Tugendhat, and I should like to hear the response to that. We were also advised that we need a more effective consumer regime than seems to be promised by the draft Bill. That was picked up initially by my noble friend Lady Hayter, and then by my noble friends Lord Whitty and Lady Crawley. Mention was made of the needs of small and medium-sized companies, particularly small companies that want to grow. My noble friend Lord Mitchell, late of Soho, picked up points that are worth taking forward. We had a reference to higher education by my noble friend Lady Warwick. I endorse that; it has been far too long since a major statement on higher education has been made and we have not had a chance in this Parliament to debate at any length the very radical changes that are being pushed through by the Government.
Finally, but not exclusively, my noble friend Lord Berkeley raised in a wide-ranging speech, not all of which I was able to follow, particularly geographically, a number of important points about the water industry, to which I am sure the Minister will want to respond. I could have referred to the points raised by the noble Lord, Lord Flight, but there were so many and they were so sharply focused on the Government, rather than on any general points, I did not think it was worth encouraging him; we will pass over that quickly. I am sorry about the listing but, by implication, the point I am making is that a number of issues have been raised all around the Chamber about the focus of the gracious Speech and why it does not match up to the rhetoric of the title of “building a stronger economy”. Why do so few of the Bills we have talked about and will be debating over the next few months focus on the question of how to build our economy?
When we debated Her Majesty’s gracious Speech last year, unemployment had soared beyond 2.6 million, we were in a double-dip recession, and the Government were borrowing £150 billion more than forecast to pay for the costs of their failed economic plan. What has happened to the economy since then? Since October 2010, the UK economy has grown by just 1.1% compared with 3% in Germany and 4.3% in the United States. Unemployment has stuck at around 2.5 million. A large number of those in work are working part-time when they want full-time work, and most people face difficulties in maintaining their standard of living, let alone improving their lot.
According to this year’s gracious Speech, and quoting it in full,
“my Government’s legislative programme will continue to focus on building a stronger economy so that the United Kingdom can compete and succeed in the world”.
You would have thought that an aspiration on that scale would have presaged Bills that created the conditions for businesses to grow and for wealth to be created, to enhance productivity and to propose a restructuring of our economy, ensuring diversification towards those sectors that would contribute to GDP in the future. Instead, what do we have? In finance, we have the carryover banking Bill and the welcome but very modest national insurance Bill. In business, we have a modest set of amendments to the intellectual property regime; a promise of more regulatory reform, but led from the Cabinet Office; and a welcome but very limited consumer Bill that plays around with structures and responsibilities but does not introduce the sort of regime that will protect hard-pressed consumers and empower them as drivers in making markets work effectively for them and for producers, thus helping to provide the foundation for UK businesses to succeed here and in other markets abroad. Surely what we needed to make this speech’s laudable aspiration a reality was a set of Bills that would establish a modern industrial strategy—an agenda where the role of government is not to step back but to work with business to create better outcomes at home and to ensure that we can pay our way in the world, to ensure that growth is more broadly based across sectors and the regions, and to reduce imports and to grow exports. So, to add to the list of gaps identified by other noble Lords, I want to mention four areas where there are still points to be picked up, and to which we will return as we move forward through the programme.
As my noble friend Lord Eatwell said, we must reform our banking sector, not only so that banks are made safe but so that the sector better serves the economy. Under this Government, lending to businesses is falling month on month, including a fall of £4.8 billion in the three months to February according to the latest Bank of England figures. We know that the rash of government schemes, from Project Merlin to the national loan guarantee scheme, and now the Funding for Lending scheme too, have simply failed to get credit to the businesses that need them. The problems are exacerbated in the regions and nations of this country. Every other country in the G8 has a state-backed investment institution to tackle this problem and to ensure that their small businesses can access the finance they need. That is why we have been arguing for the establishment of a proper British investment bank and for the creation of a network of regional banks, perhaps, following on from my noble friend Lord McFall, using one of the nationalised banks to operate alongside that institution to transmit the investment bank schemes to small businesses.
Weaknesses in vocational skills are a concern of every business that we talk to and a source of competitive disadvantage for the UK as compared to our neighbours. With almost 1 million young people out of work, we must ensure we have a system that delivers people with the education and skills our businesses need. Ministers boast that they have created more than a million apprenticeships, but the number of 16 to 18 year-olds starting an apprenticeship in the first half of this academic year has dropped by 12%. We urgently need to improve a situation in which two-thirds of large companies in this country do not offer apprenticeships. Why will the Government not legislate to require those large firms getting government contracts to have active apprenticeship schemes, ensuring opportunities to work for the next generation?
The only direct mention of infrastructure in the gracious Speech is the two HS2 Bills. I declare an interest, as the current route for HS2 goes close to my home—not, as I may have mentioned to the noble Earl, Lord Glasgow, close enough to qualify for compensation, although I have my hopes. I have made clear before that I support my party’s approach to the scheme although, like the noble Viscount, Lord Trenchard, and, I think, the noble Earl, Lord Glasgow, we do not yet understand the rationale for the introduction of a paving Bill before decisions have been made on our airports, for example. We have made clear that we will look to ensure that HS2 is fully integrated into the existing rail network, with services running directly to a wide range of towns and cities in addition to those already placed on the new line, which amount to a very small number; affordable to use, rather than a premium-priced service aimed at business passengers; not at the expense of investment in the existing network, including the rolling programme of electrification, upgrades and new rolling stock; and required to generate at least 1,000 apprenticeship opportunities for every £1 billion of public investment.
However, surely we need to look beyond HS2 and its 30-year payback. As the noble Lord, Lord Forsyth, said, we need jobs now. With our economy flatlining, the country is crying out for investment in infrastructure to create jobs, boost confidence and strengthen our productivity and competitiveness, particularly in the regions. Both the CBI and the EEF criticised the Government for their failure to get on and deliver on infrastructure. The last infrastructure pipeline update given by the Government shows that of their 576 projects, less than 5% were completed or operational. Why was there not more in the Queen’s Speech to take that forward? Where are the practical measures on housebuilding, which would kick start the economy with jobs in the construction industry while providing much needed homes?
Finally, what on earth is happening on communications? Communications are vital to every aspect of our lives today—from business to leisure and accessing public services. Everyone should be able to access a decent level of communication, including phone and internet. Our content and broadcast industries need copyright protection and certainty. The communications sector was worth £50 billion, employing 530,000 people, in 2011, and of course it supports the wider economy. The internet contributed 8.3%, or £121 billion, of the British economy in 2010—a bigger share than in any other G20 major country, and is predicted to grow at 11% a year over the next five years. In her excellent maiden speech, the noble Baroness, Lady Lane-Fox, argued that the Government should develop a strategy and a programme that would get as many people online as possible. We agree. A communications Bill is desperately needed, focused on helping people to get broadband in rural areas, a point picked up by the noble Baroness, Lady Byford; helping people improve their digital skills through training and education for both business and personal reasons, as more public services will be delivered online; ensuring that those who do not have a computer or broadband at home can access those facilities from a public library; and making sure that older people, disabled people and people with learning difficulties have access through the appropriate design of services and equipment.
This debate has been primarily about the economy, business and transport but it has also dealt with local government, and the main Bill in that section is the Local Audit and Accountability Bill. Having announced the abolition of the Audit Commission three years ago, the Government have finally come forward with a proposal to try to fill the vacuum they have created. However, we must ensure that taxpayers get value for money and that we maintain high standards of audit. We have concerns about whether the plans will produce an open and competitive market—contracts may well be awarded to a small number of firms—and there are real uncertainties about the level of future audit fees.
The draft Bill was heavily criticised in pre-legislative scrutiny. The committee questioned the estimated savings claimed by the Government. It also called for a new financial impact assessment, stronger safeguards for whistleblowers, and better value for money compressions to enable more informed judgments about the effectiveness of local expenditure. I hope that the Minister will be able to reassure us on these points.
Twelve months ago, we warned that the Bills in last year’s programme would not do much to get the economy going again. Today, the economy is flatlining and there is little, if any, hope that the legislative programme announced so far will bring the growth and jobs that we so desperately need. For me, the saddest thing is that the Government who legislated for a fixed-term Parliament of five years seem to have run out of steam after three—what a waste.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, I am probably the only person in the Chamber who sat and listened to every single one of the speeches made today. It is with some lack of confidence that I say I will be able to respond to all the points that were made. I will do my best. It may require me gabbling a bit but I will provide as many responses as I can. This has been an important and good debate. I always enjoy the Queen’s Speech debate because it is very wide-ranging—I apologise to the noble Lord, Lord Patten—and we get a whole lot of views.
In his opening speech—many, many hours ago—my noble friend Lord Deighton laid out the Government’s programme for the next Session. Since then, we have had more than 40 commendable speeches, to which I will endeavour to do justice in the short time available to me. Where I have been asked direct questions, if I do not answer them I will see that a letter is sent to the noble Lord concerned.
I, too, congratulate our new noble friend, the noble Baroness, Lady Lane-Fox. Many others have complimented her on her speech, very justifiably, and I, too, would like to say how fortunate this House is to have her in our midst. She will not know this but I knew the previous Baroness Lane-Fox very well and respected her very much as a great supporter of the disabled. She was one of the first people to really put the needs of disabled people on the map, of course being disabled herself. She was a great person and I am sure that the noble Baroness will follow adequately in her shoes.
The comments started off with a sort of mish-mash of disagreement about what has happened with the economy. I found rather rich the suggestion that the Government were not doing the right thing to put it right. On a number of occasions in this House, I have gently reminded noble Lords on the other side that this deficit was not of our making. We inherited it after 13 years and now to suggest that we should borrow our way out of this situation, when we were borrowed into it, is something that will require more time for debate than I have today.
Despite the considerable efforts that have been and are being made by the Government, the country is still facing difficult economic challenges. The departments represented in today’s debate—my department, the Department for Communities and Local Government; BIS; the Department for Transport; and the Treasury—are the most involved in providing the essential measures that can assist recovery and stimulate growth.
The Government have been consistent in basing their policy on an unwavering commitment to fiscal responsibility and introducing measures aimed at ensuring that this country is one of the best places in the world to do business.
We have had many speeches on the economy, on both its strengths and its weaknesses. The Government’s key objective is to reduce the deficit, and spending consolidation is a vital part of this. Interesting speeches on this were made by the noble Lords, Lord Eatwell and Lord Empey, and the noble Baroness, Lady Wheatcroft. The Government have consistently looked to prioritise growth and enhance spending. The Chancellor announced in the Budget that the Government would increase their infrastructure spending plans by £3 billion per annum, paid for through permanent reductions in current spending. This will mean £18 billion additional investment by the end of the next Parliament.
The noble Lord, Lord Empey, suggested that individual departments and civil servants should have a duty to make savings and to understand what they were doing—I think that that is more or less what I would interpret it as. We are currently engaged with departments to identify more savings from their budgets ahead of the spending review on 26 June. There will be a zero-based review of capital to identify the highest-value-for-money growth schemes. As noble Lords have said and understand, capital growth is essential to support the growth strategy.
Public investment as a share of national income, thus GDP, will be higher on average between 2010-11 and 2020-21 than under the whole period of the previous Government despite much greater constraints on the public finances. This means that the Government will never cut capital spending to the levels planned by the previous Government, who intended to cut it by 7% more than in our plans. This would have meant £3.4 billion less investment by 2014-15.
We have made good progress on coalition agreement commitments and business plan delivery. Our focus now is on maximising the impact of our policies, particularly to achieve growth at a local and national level. That means devolving powers and responsibilities and giving business as much freedom and support as possible so that it can flourish. As my noble friend Lord Tope has pointed out, my department has been instrumental in passing funding and responsibilities to local government to help to promote business activity.
A final part of this localisation is covered by the measures announced in the gracious Speech of the local audit Bill. I shall not go into the details tonight because it looks as though we are going to have a lively time with it, but I know that we will be starting consideration of that in the next few weeks. The legislation will enable local authorities to be more independent of central government in selecting their auditors and managing their finances.
We have had a number of contributions today on transport and transport infrastructure. It is correct that we are investing more on major transport projects such as HS2 and Crossrail. Despite the strictures of my noble friend Lord Forsyth, we are investing also in local roads, rail and transport schemes. I am pleased that, in general, speeches today have supported that investment.
I was asked specific questions by the noble Lords, Lord Faulkner and Lord Bradshaw, and the noble Viscount, Lord Simon. They were all kind enough to give me advance warning of these, so I shall briefly respond to them now. The noble Lord, Lord Faulkner, asked about Crossrail having a station at Reading or Maidenhead. I know that he has recently had a written response from my noble friend Lord Attlee and that my noble friend is happy to speak to him again on this subject if he wishes. Network Rail’s Crossrail works on the Great Western main line are already under way in a number of places. However, the works at Maidenhead that might not be needed if the route was extended to Reading are not due to commence until 2016, so there is plenty of time to deal with that.
The noble Lord, Lord Bradshaw, asked about the acute shortage of railway rolling stock and whether Her Majesty’s Government would get out of the way of investment by indicating in franchise agreements a presumption of the carry-over of such stock.
The Government’s rail Command Paper stated that bidders should not be fettered in their future use of rolling stock and should have more market freedom. That was endorsed by the industry’s rolling stock strategy, published in February 2013. The Government already make use, where appropriate, of Section 54 of the Railways Act, under which we can require a new operator to take on the previous operator’s rolling stock.
Finally, the noble Viscount, Lord Simon, was concerned about young drivers’ road safety. We are intent on reducing the number of accidents involving young drivers. That is a top priority and we have already taken steps to make the driving test more realistic by introducing independent driving and stopping the publication of test routes. A Green Paper considering a range of options for improving the safety of newly qualified drivers will be published later in the spring.
My noble friend Lord Forsyth asked about the modernisation of transport, to which I have just referred. We are undertaking the biggest modernisation programme for the railways since the Victorian era. We are working with local authorities and businesses to target investment where it is most needed, and we have established the independent Airports Commission to make recommendations on how to safeguard future international aviation capacity. The noble Lord, Lord Bilimoria, asked about that. Sir Howard Davies will be delivering a shortlist of credible proposals by the end of this year. He will also identify ways in which we can make better use of existing capacity and, as part of his final report in summer 2015, the commission will provide materials to support the Government in preparing a national policy statement.
We have of course made a commitment to HS2, which I am glad was largely supported by speakers from around the House. We believe that that will change the economic geography of the nation. The noble Lord, Lord Bilimoria, also asked us about timescales. I can tell him that we aim to produce a paving Bill this year. The target for Royal Assent to the paving Bill is November this year. The hybrid Bill for phase 1 will be introduced by the end of 2013, with 2015 the target for Royal Assent. We expect that the hybrid Bill for phase 2 will be introduced in 2018. Construction of phase 1 will start in 2017 and construction of phase 2 will start in the mid-2020s. We hope to have the first line open in 2026.
The general support for HS2 is a great help. The noble Lord, Lord Faulkner, gave stirring support for it. I agree with him that it is not just about high speed. It will unlock the enormous potential opportunities that cities including Birmingham, Manchester and Leeds have to offer, making them more attractive places to locate and do business. HS2 will bring jobs on the railway to the cities that it will serve. HS2 Ltd estimates that about 9,000 jobs will be created to construct the new London-Birmingham route, with a further 1,500 permanent jobs created in operations and maintenance. All in all, it is something to look forward to and support. However, we have not just been working on HS2. We have also been investing in other railway and road structures in an ongoing programme to ensure that it is not just new lines that are supported but current ones.
We know that at least 90% of businesses are small and medium-sized enterprises and that they have not found it easy to access finance in the past few years, so we have created a business bank, which will deploy £1 billion of additional capital to address gaps in the supply of finance to small and medium-sized enterprises. That will enable them to access loans and give them certainty to bid for contracts both within this country and beyond. We are providing further help by reducing corporation tax from 28% to 20% by April 2015. In addition, we will be providing a £2,000 contribution towards employers’ national insurance contributions if they take on extra staff and so help the unemployment situation, which my noble friend Lord Sheikh welcomed.
My own department has been at the forefront of promoting infrastructure support, which, as other noble Lords have said, is important to the future of the economy. Creating the right conditions for increasing infrastructure projects is essential to stimulate growth, particularly through the construction industry, so we are building on an existing commitment to an £11 billion housing investment in this spending review. In this year’s Budget, a further housing package totalling £5.4 billion was announced. The noble Lord, Lord Eatwell, suggested that there should be more concentration on new housing. I remind him that we have recently launched an equity loan scheme for help to buy, and that will provide £3.5 billion of investment, focusing on new-build home ownership. It will also boost construction. That has been well received and well taken up.
We have introduced a mortgage guarantee scheme from January 2014 to provide guarantees to support £130 billion of high loan-to-value mortgages. We are undertaking a build-to-rent scheme, the funding for which has expanded from £200 million to £1 billion, to support the development of more new homes. The affordable homes guarantee programme doubled the support for a further 15,000 new affordable homes in England by 2015, and we have the right to buy.
The noble Lord, Lord Shipley, and I disagree that none of this will generate more housing and boost construction. It will, and that is what we are aiming for. However, it involves a huge investment of money in both housing and construction.
The Government published our full response to the Heseltine review in March 2013, confirming that 81 out of 89 recommendations had been accepted in full or in part, including the creation of a single local growth fund. The size of the pot has not yet been agreed but it will encompass quite a lot of other pots.
The Government have also established 24 enterprise zones, and those are creating jobs as we speak. The right reverend Prelate the Bishop of Birmingham rightly pointed out how Birmingham was doing, particularly with the city deals. Birmingham clearly has a good future and is working extremely hard to ensure that it is at the top of the tree and ready to take on any responsibilities to come its way. It is estimated that the first wave of city deals will create 175,000 jobs over the next 20 years and 37,000 new apprenticeships.
In addition to the Autumn Statement, 2012 saw the announcement of government investment of an additional £980 million in schools in England by the end of the Parliament, the funding for 100 new academies and free schools. All these promote growth and investment.
The noble Lord, Lord Bilimoria, made a passionate plea for more pressure on trade, including selling the UK in the UK. The Government are encouraging investment in exports as a route to a more balanced economy, and we have set out our ambitions to increase total annual UK exports from £488 billion in 2011 to £1 trillion by 2020.
My noble friend Lord Sheikh and the noble Lord, Lord Bilimoria, promoted the need to pursue trade with Africa as well as with India and China. We understand the need to extend that, and I know that my noble friend Lord Deighton will be taking notice of that.
Lord Lea of Crondall
The Minister has mentioned Africa and China. Does she recall that a number of noble Lords have mentioned Europe? Does she think that it makes no difference to the prospects for investment in Britain if we have one hand on the door handle to exit from the European Union?
Baroness Hanham
I was not ignoring Europe. I was speaking directly to the points that were made about India and Africa. Of course our trade with Europe is extremely important, both imports and exports. I do not think anybody is going to want to unbalance that. The noble Lord’s point is well made and I was not trying to underestimate its importance. Trade with the rest of the world is also extremely important.
In January 2013, the Government introduced a one-in, two-out system of deregulation whereby no new regulation is introduced unless it is offset by deregulation of twice the equivalent value. That will be part of the discussions we will be having later when the deregulation Bill comes forward.
I have a sheaf of papers here and about two minutes to deal with them. The noble Lord, Lord Eatwell, spoke about the banking reform Bill. The Government are going to give careful consideration to the recommendations made by the Parliamentary Commission on Banking Standards, including those it makes in its final report. We will consider tabling amendments to the Bill when and if appropriate. The Government have committed to ensure that both Houses will have enough opportunity to consider and debate any amendments tabled.
The noble Lord, Lord Bilimoria, asked about promoting trade beyond Europe. UKTI is working with the Foreign Office and applying a range of criteria to prioritise its focus on emerging and high-growth markets.
The noble Lord, Lord McFall, and the noble Baroness, Lady Kramer, asked about the break-up and sale of RBS and other banks. The government shareholdings in RBS and Lloyds Banking Group are managed on a commercial and arm’s-length basis. UKFI works closely with those banks to assure itself of their approach to strategy. Its objectives are to create value for money for the taxpayer and to devise and execute a strategy for realising it in an orderly and active way over time.
My noble friend Lord Forsyth suggested that quantitative easing has exaggerated the liabilities of pension funds because of low interest rates. We recognise that quantitative easing is a major tool designed to affect the economy as a whole to meet the 2% inflation target over the medium term. Over 2011-12, companies with defined pension schemes have seen their scheme deficits more than double from around £100 billion to £250 billion, but the recent fall in gilt yields cannot be ascribed to quantitative easing alone. Factors such as flight to safety from the eurozone also have an impact.
Lord Forsyth of Drumlean
I realise it is rather late, but the point that I was making was that the assessed deficit is based on gilt yields, not corporate bond yields. If the Pensions Regulator were to change that view, huge sums of money that are not required but appear to be required because of the fall in gilt yields would not be put into pension funds.
Baroness Hanham
I thank my noble friend for that extra explanation. I shall carry straight on because I might just get a few more of these done.
The noble Baroness, Lady Hayter, asked whether private landlords will be required to check the immigration status of tenants. Many landlords already carry out some identity checks. An additional requirement, such as taking a copy of a passport, should not be too burdensome.
My noble friend Lord Tugendhat asked a number of questions, as did the noble Lord, Lord Monks. They are all quite technical, so I hope they will forgive me if I reply in writing.
There were questions about the consumer Bill that will come before us in the not-too-distant future, and there will be a great deal of debate and discussion on it.
My noble friend Lady Byford raised the question of rural broadband. I am sure she will appreciate that, during the passage of the Growth and Infrastructure Bill a few months ago, there was considerable discussion of rural broadband and the necessity for it including the permitted development rights and the limitation of those. The Government absolutely recognise that rural broadband is essential, not only to promote industry and its facilities but also for individuals.
My noble friend also asked whether local authorities have sufficient resources for planning, based on the new permission for agricultural buildings to be converted. We are giving all authorities a 15% inflation-linked increase in fees. Some have managed to deliver significant improvements in their services despite other reductions.
The noble Lord, Lord Mawson, speaks with great experience and he and I have discussed issues like this before. I note with concern what he was saying about neighbourhood budgets and communities. Perhaps we might discuss that further some other time.
I will probably run out of your Lordships’ patience as time goes on. I will deal with two more points and then answer the others in writing.
The noble Lord, Lord Warner, spoke about youth unemployment as well as other important matters. The 16-17 year-old unemployment level fell by 5,000 to 192,000, down 21,000 from the same time last year. The 18-24 year-old level rose by 25,000, but that is down 25,000 from the same time last year. The proportion of 16-24 year-olds not in employment, education or training has fallen over the year and is currently at 15%. That is too high and needs to come down. I accept entirely what noble Lords say: youth employment is one of the real problems that we need to address. The noble Lord also asked about the resource transfer from the National Health Service to social care. As he will know, all government spending is being reviewed as part of the spending review, including social care funding.
Finally, my noble friend Lord Trenchard asked what we are doing about excessive regulations where primary legislation is not required. The deregulation Bill is not all we are doing to reduce regulation. We are also making changes through secondary legislation, but this Bill will help us meet our target to repeal and reform at least 3,000 regulations in this Parliament.
I must just respond to my noble friend Lord Tope on city deals because he was so nice about me. At the moment there is no plan for rural deals. Of course, some rural areas are caught up within the city deals and are helped by that. The Government plan to devolve to all local enterprise partnerships, rural and urban, the single local growth fund.
I apologise for gabbling and being rather short. Where I have not answered, correctly and in appropriate detail, points that have been made, I will do so in writing.